Khalifeh v Blom Bank. On the availability of anti-suit to deter consumer contract proceedings ex-EU.

At issue in  Khalifeh v Blom Bank S.A.L. [2021] EWHC 1502 (QB) is inter alia whether an anti-suit injunction is available to  a claimant who purports to have the protection of Section 4 of the Brussels Ia Regulation. That is the section which protects consumers by granting them a forum actoris and by limiting suits against them to, in principle (limited extensions are possible) their place of domicile. The contract is one in the banking sector, for the opening of 2 USD accounts. Defendant is a Lebanon-incorporated bank. The proceedings which are to be restrained, take place in Lebanon. Current order concerns anti-suit only. Other issues, including applicable law per Rome I (where of course the consumer title also plays a role) are not addressed.

The case is part of my essay questions in a conflicts exam at Leuven today. I would expect students to refer to the discussions in Gray v Hurley and to any reasons for EU courts to exercise, or not, judicial muscle-power in upholding the jurisdiction of courts in the EU as against that of courts outside it.

Claimants calls in support upon Samengo-Turner v J & H Marsh [2007] EWCA Civ 723 and Petter v EMC Europe Ltd [2015] EWCA Civ 828. In those cases, concerning employees, anti-suit was employed viz employers’ potential action outside the EU. Defendant doubts the authority of both (and in particular of Samengo-Turner, a first instance judgment). It refers to both scholarly criticism of the position, and to the Court of Appeal’s recent finding in Gray v Hurley, referred to the CJEU but unfortunately (for reasons of legal certainty) since dropped.

At [38] Freedman J holds he need not make a ‘binary’ decision at this stage, and refuses the application for anti-suit, leaving the discussion for full debate at trial. Part of his reason for doing so is defendant’s commitment not to take the case in Lebanon any further at this stage (no commitment has been made of it to be dropped). At that trial, the ATI debate may continue (this, one imagines, will depend on defendant’s actions in Lebanon), as of course will the applicability of Rome I’s protected categories of consumers.

A trial to look out for.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.24.

Mittelbayerischer Verlag: the CJEU surprisingly reigns in Article 7(2) centre of interests jurisdiction in cases of online defamation.

I reviewed the AG’s Opinion in C-800/19 Mittelbayerischer Verlag KG v SM here. The CJEU held yesterday (no English version yet at the time of posting). Tobias Lutzi already has analysis up here.

As I reported at the time, the AG suggested that despite the need for restrictive interpretation of the special jurisdictional rules, in the case at issue there was foreseeability of many a Pole’s centre of interests as a tort gateway, given the predictable fall-out of protest among Poles given the contents and context of the article (please refer to earlier post for detail): an ‘objective foreseeability test’.

The CJEU however restricts the availability of the centre of interests gateway further:  [46]

article 7, point 2, du règlement no 1215/2012 doit être interprété en ce sens que la juridiction du lieu où se trouve le centre des intérêts d’une personne prétendant que ses droits de la personnalité ont été violés par un contenu mis en ligne sur un site Internet n’est compétente pour connaître, au titre de l’intégralité du dommage allégué, d’une action en responsabilité introduite par cette personne que si ce contenu comporte des éléments objectifs et vérifiables permettant d’identifier, directement ou indirectement, ladite personne en tant qu’individu.

The aggrieved needs to be identifiable, at the time of publication, as an individual, not as belonging to an abstract group of offended persons.

With Gtflix TV pending, the CJEU will have a further opportunity to clarify the A7(2) gateway for defamation.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.12.2.5, and para 2.598 in fine.

 

 

Greenaway & Rocks v Covea Insurance. On applying the EU’s multilinguistic laws post Brexit.

In Greenaway v Parrish & Ors [2021] EWHC 1506 (QB) ( I signaled it a while ago but the case has only recently appeared on BAILII), Spencer J had to consider the practical implications of the impossibility of referrals to the Court of Justice of the EU, by UK judges. Plenty of pending cases were introduced before Brexit day. Moreover, an even larger number of cases will be subject to retained EU law.

In a specific conflict of laws sense, this raises the particular (procedural and substantive) issue of foreign law being fact and hence needing to be proven. Retained and /or previously applicable EU law, will not be foreign law as such, yet clearly it is law of a different nature than UK statutory and common law across the isles.

The practical implications of all this have now surfaced in Greenaway. Following CJEU CILFIT, EU law is (usually) equally authentic in 22 languages. In the case at hand, this centres upon the meaning of the word ‘stolen’, in the motor insurance Directive 2009/103. How should a judge inform her /himself of the meaning of the word in the 22 languages, and potentially also of the implementation of the Directive across the Member States. 12 King’s Bench Walk have analysis of the case here. As they note, Mr Justice Spencer granted permission to each party to adduce four foreign law experts reports in EU jurisdictions of their choosing, so that the relevant foreign language versions of the Directive could be understood. He also gave permission for those experts to give evidence as to the implementation of the Directive in those member states, that material being part of the context in which the point at issue had to be decided.

This is an important procedural point which no doubt will surface in a variety of shapes in years to come.

Geert.

Dhir v Flutter. How choice of law takes you via Rome, to DIFC and Dubai.

A quick note on Dhir v Flutter Entertainment Plc (Rev 2) [2021] EWHC 1510 (QB), in which Griffiths J had to consider ia whether choice of law had been made at all and if so (or also if no choice of law had been made), whether this was for the onshore law of the Emirate of Dubai – onshore Dubai law, or for the law of the Dubai International Financial Centre – DIFC.

Claimant (Amarjeet Dhir) is a Dubai-based businessman who advanced money to another businessman in Dubai which he thought would be invested in the local property market. Unknown to him, the man taking his money (Tony Parente) was a gambling addict. As Mr Parente now admits, he applied money he had been given by Mr Dhir (and, it seems, others) to fund his gambling habit. One of the gambling businesses with which he lost a lot of money in a short space of time was the defendant, through that part of its operations branded as Paddy Power. Mr Dhir now seeks to recover from Paddy Power money in its hands which he says represents the money he is entitled to recover from Mr Parente.

The relevant agreement includes express choice of law as follows: 

“This agreement is signed in Dubai and shall be governed and construed in accordance with the laws of Dubai”.

Claimant says that it meant DIFC laws, while defendant says that it means onshore Dubai law). All experts agreed that it had to be one or the other: it could not be both.

[116] jurisdiction before the E&W Courts is by prorogation (A26 Brussels Ia). Both parties agree [129] that the Rome I Regulation guides the search for the lex contractus. The agreement is silent on choice of court: otherwise that could certainly have been a factor in determining choice of law (recital 12 Rome I). In general [118] the judge is cautious in ‘letting the jurisdiction dog wagging the choice of law tail’, and held the many ties of parties and contract with Dubai (including signature at Dubai and not DIFC: a geographically distinct location) pointed to onshore Dubai law as  lex contractus.

Choice of law therefore made not verbatim, yet ‘clearly demonstrated’ (A3(1) Rome I).

Geert.

EU Private International Law, 3rd ed. 2021, Heading 3.2.4.

Brussels IA arbitration exception claxon. Recognition of Spanish Prestige judgment in England & Wales. Res judicata issues concerning arbitration referred to the CJEU. Ordre public exceptions re Human Rights not upheld.

The London Steam-Ship Mutual Insurance Association Ltd v The Kingdom of Spain (M/T PRESTIGE) [2021] EWHC 1247 (Comm) has been in my blog in-tray for a little while: I had thought of using it for exam purposes but have now decided against that.

The case is the appeal against Cook J’s registration of the Spanish judgment in the Prestige disaster.  I have reported thrice before on the wider litigation – please use tag ‘Prestige’ in the search box.

References in the judgment are to Brussels I (44/2001), not its successor, Brussels Ia (1215/2012) however the  relevant provisions have not materially changed. Application is for recognition and enforcement of the Spanish Judgment to be refused,  and the Registration Order to be set aside for one or both of two main reasons, namely: (1) that the Spanish Judgment is irreconcilable with a 2013 Hamblen J order, upheld on Appeal,  enforcing the  relevant Spanish award (A34(3) BI), and (2) that recognition would entail a manifest breach of English public policy in respect of (a) the rule of res judicata and/or (b) human and fundamental rights (A34(1) BI).

Butcher J referred the first issue to the CJEU on 18 December 2020 – just before the Brexit deadline. I have not been able to obtain a copy of that judgment – the judge merely refers to it in current one. The CJEU reference, now known as Case C-700/20, is quite exciting for anyone interested in the relationship between arbitration and the Brussels regime. Questions referred, are

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 or 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?

These are exciting questions both on the arbitration exception and on the res judicata refusal for recognition and enforcement. They bring into focus the aftermath of CJEU West Tankers in which the status of the High Court confirmation of the English award was also an issue.

The Club’s argument that recognition would be contrary to English public policy because the Spanish Judgment involved a breach of human and fundamental rights was not referred to the CJEU. Discussion  here involves ia CJEU Diageo. Suggested breaches, are A 14(5) ICCPR; breach of fundamental rights in the Master being convicted on the basis of new factual findings made by the Supreme Court; inequality of arms; and; A1P1.

There is little point in rehashing the analysis made by Butcher J: conclusion at any rate is that all grounds fail.

That CJEU case is one to look out for!

Geert.

EU Private International Law, 3rd ed 2021, 2.84 ff, 2.590 ff.

 

DTEK Energy: Grounds for the Rome I issue of Schemes of Arrangement to be heading for the Court of Appeal.

In DTEK Energy BV, Re [2021] EWHC 1551 (Ch) Norris J yesterday expanded on his reason to sanction this scheme of arrangement of a Dutch corporation. I had referenced an earlier DTEK scheme in my post here. The judge firstly pointed out the straddle position of the E&W courts, in assessing the sanction of the scheme from the jurisdictional point of view: [30]:

for the purposes of testing whether the Judgments Regulation presented a jurisdictional bar to the English Court exercising jurisdiction over EU domiciled scheme members or creditors it was assumed to apply (and an appropriate gateway identified). But for the purposes of testing international effectiveness it was not assumed to apply, and the English Courts looked for expert evidence which demonstrated alternative bases.

He also points out [31] what I have repeatedly mentioned: the analysis was never extensive, for the schemes tended eventually to be unopposed. Summary of the default position is done [31] with reference to Van Gansewinkel (in which I acted as one of the experts) seeing as, like DTEK, it involved recognition and enforcement in The Netherlands.

At [37], importantly, the judge refers to a report produced by Prof. Dr. Christoph Paulus and Prof. Dr. Peter Mankowski as to the likelihood of the recognition of the Bank Scheme by EU Member States. They seemingly are of opinion that the Bank Scheme would be given effect in every Member State by virtue of Art 12(1)(d) Rome I. This provides that the law applicable to a contract (in the instant case, English law) shall govern the various ways of extinguishing obligations: and that rule covers all modes of extinguishing obligations (including those operating against dissentient creditors). At [38] this conclusion is said to have been supported by a number of relevant E&W precedents (all of which  I have reported on the blog; see eg Lecta Paper) however these all merely scratched the surface.

Gazprombank however oppose this conclusion and refer in support to a report produced (I have not seen it) by Dr Peters (sic; it’s Prof Dr Niek Peters) for the Dutch situation and, at [44] by Mr Vorkas for the Cypriot situation. Both question the opposability of the scheme to recalcitrant creditors in light of amended choice of law. I have not studied the issue in the detail these reports have, and I have not seen any of them. However my own view on this is that there is certainly merit in what is here the opponents’ input:  the position of certain English schemes under Rome I is really quite vulnerable.

At [41] the judge on balance sides with the Paulus /Mankowiski report for ‘it is common ground that I cannot decide between the rival Dutch views’ (later repeated for the Cypriot report). I do not think that is necessarily correct, or at least it deserves some discussion: Brussels Ia may not be retained EU law yet Rome I is, therefore this is arguably not an issue of ‘foreign law’ (and certainly not ‘Dutch law’).  

Conclusion [46]: If sanctioned, the Bank Scheme will certainly be effective as regards 95% of Energy’s creditors. There is a reasonable prospect that the sole dissentient creditor will be unable to mount any challenge to it. Even in the event of a challenge, uncontested evidence demonstrates that the Bank Scheme will be effective in the jurisdiction in which operations are undertaken and assets located.

Seeing as this is one of the first times the BIa and particularly the Rome I situation is discussed in greater detail, I do hope this case is heading for the Court of Appeal.

Geert.

EU Private International Law, 3rd ed. 2021, para 5.35 ff.

ZN v [Bulgarian Consulate]. Confirming Mahamdia and the ‘international’ in ‘private international law’.

In C-280/20, ZN v Generalno konsulstvo na Republika Bulgaria v grad Valensia, Kralstvo Ispania [the Bulgarian consulate], the CJEU last week essentially confirmed CJEU C-154/11 Mahamdia. ZN is a Bulgarian national residing in Sofia who holds a permit to reside in Spain, where she provided services relating to the activity of the Consulate General. ZN brought an action in Bulgaria against the Consulate General seeking, first, recognition of her employment relationship and, second, payment of compensation in lieu of paid annual leave not taken during a period in which she provided services concerning the receipt of documents. The Consulate General contests the jurisdiction of the Bulgarian courts and invokes the jurisdiction of the Spanish courts as the courts of ZN’s place of employment. The referring court has doubts as to the existence of cross-border implications in so far as the dispute at issue in the main proceedings concerns a Bulgarian employee and a Bulgarian employer, and the fact that their legal relationship is closely connected with the Republic of Bulgaria.  It also notes that Bulgarian law expressly provides that, in the case of contracts concluded between a Bulgarian employer established abroad and a Bulgarian national working abroad, any disputes may be examined only by the Bulgarian courts.

In Mahamdia the Court first of all applied the Vienna Convention on Diplomatic Relations and held that an embassy often acts iure gestionis, not iure imperii, and that under the Vienna rules, the EU is perfectly entitled to apply the Regulation given that it applies to ‘civil and commercial’ matters. In that vein, an embassy may very well have to be regarded as an ‘establishment’ within the meaning of Article 20(2) (on employment contracts). In ZN, the Court [28-29] suggests that services in connection with the receipt of documents in files opened at the consulate by Bulgarian nationals and the management of those files, do not fall within the exercise of public powers and do not risk interfering with the security interests of the Republic of Bulgaria. Hence it strongly suggests the issue is a ‘civil and commercial one’, leaving final determination of same to the referring court. I would intuitively have thought that processing documents at a country’s consulate quite au contraire, does engage closely with diplomatic functions that must be qualified as iure imperii, particularly seeing as before said processing one is likely not to have knowledge of the documents’ content.

On the issue of ‘international element’ required to trigger Brussels Ia, the Court per Mahamdia considers a consulate to be an ‘establishment’ of one Member State in another Member State. Hence one of the parties to the dispute must be considered to be domiciled or habitually resident in a Member State other than that of the court seised [37]: the cross-border element is clearly present, which will not surprise many of us. One also assumes that the  aforementioned Bulgarian rule on exclusive jurisdiction for employment disputes between Bulgarians even with an international element present, does not meet with EU law requirements.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.35, para 2.128.

 

Suing TikTok: on GDPR and ordinary jurisdiction, as well as applicable law in the Dutch collective claim.

A short note on the claim form for the collective claim by a group of parents based in The Netherlands against TikTok Technology Limited, domiciled at Dublin, Ireland.  It engages Article 79 GDPR, as well as the consumer section of Brussels Ia. At the applicable law level, it suggests application of Article 6 Rome I (consumer contracts; a logical counterpart of the jurisdictional analysis) and, in subsidiary fashion, Article 4 Rome II, each to suggest application of Dutch law.

I wrote on Article 79 here, and the problems which I signalled have in the meantime surfaced in case-law, as I signalled ia here.  Current TikTok claim however prima facie would seem to be more straightforward under both GDPR, BIa and Rome I – one imagines a possible TikTok’s defence to go towards the meaning of ‘establishment’.

Geert.

 

CNP v Gefion. The CJEU on (not) applying Brussels Ia’s insurance section to insurance professionals, and on branch jurisdiction.

I reported on the AG’s Opinion in C-913/19 CNP here. The CJEU held on 20 May.

The case essentially queries the application of Section 3 BIa (‘matters relating to insurance’) and Section 2 (the ‘special jurisdictional rules’, in particular contract and tort) in the event of assignment and /or subrogation of claims from the natural person to a professional party. As many of us may have experienced, filing an insurance claim particularly in the automotive sector immediately engages 2, 3 or more distinct businesses: insurance agents, insurers, towing trucks and garages…. The case also discusses whether some of those business may be considered a ‘branch’ of the insurance company on account of their close relationship as experienced by repairers and insureds.

In the case at hand, a road traffic accident occurred in Poland, in which two vehicles collided. The person responsible for the accident had, before that time, taken out a contract for motor liability insurance with Gefion, domiciled at Denmark. The injured party paid to lease a replacement vehicle from the repair workshop to which his damaged vehicle had been entrusted. By way of payment for that lease service arrangement, that person transferred the claim against Gefion to the repair workshop pursuant to a contract for assignment of the claim. Slightly later, pursuant to a new contract for the assignment of claims, the repair workshop assigned that claim to CNP. CNP requested Gefion to pay it the amount invoiced for the lease of the replacement vehicle. That request was sent to the address of Polins, a limited liability company established in Poland,  which represented Gefion’s interests in Poland. Crawford Polska, a company established in Poland and entrusted by Gefion with loss adjustment, then validated the invoice relating to the leasing of the replacement vehicle in part and granted CNP part of the amount invoiced for such lease. In its correspondence, Crawford Polska referred to the possibility of making a claim against it as the entity authorised by Gefion, or directly against Gefion, ‘either under the general provisions on jurisdiction or before the court with jurisdiction for the place where the policyholder, the insured person, the beneficiary or any other person entitled under the insurance contract is resident or established’. CNP then brought an action against Gefion in Poland, citing the information published by Gefion according to which Polins was its principal representative in Poland.  Gefion opposes the subsequent payment order, arguing inter alia that the Polish courts do not have jurisdiction.

Gefion rely in large part on CJEU Hofsoe, which as I noted in my review of UKSC Aspen Underwriting, is not as clear as one might hope. The Court in CNP v Gefion refers again to Hofsoe and Voralberger and zooms in on the professional activities of the corporations involved: [40] no special protection is justified where the parties concerned are ‘professionals in the insurance sector’; [43] CNP recovers claims from insurance undertakings. This precludes  it from being regarded as a party in a weaker position than the other party.

This finding as such arguably has no impact on the authority of Aspen Underwriting, in which the professional party, the Bank, is the named loss payee under the Policy and therefore the “beneficiary” of that Policy.

[46] The Court then confirms that Section 2’s special jurisdictional rules do open up in such circumstances.

As to whether Crawford may be considered a Gefion branch, the Court employs the criteria suggested by the AG (see my review of the opinion) and notes [56] that Crawford has every power to carry out activities involving the loss adjustment and settlement of claims which are binding on the insurer, meaning that Crawford Polska must be regarded as a centre of operations which has the appearance of permanency, such as the extension of a parent body. [57] Whether that centre is materially equipped to negotiate business with third parties, so that they do not have to deal directly with the parent body, is something which the referring court has to verify (and which will therefore determine branch jurisdiction).

Per CJEU Ryanair, [59] Crawford’s role here seems to have been more than just a data hatch: it was an active contributor (in deciding, upon having given such overall authority by Gefion,  only half of the amount claimed would be settled) to the legal situation that led to the dispute in the main proceedings. Therefore provided the aforementioned ‘material equipment’ criterion is met, the dispute is to be regarded as ‘arising out of the operation of the branch’.

All in all a bit more follow-up work to be done by the referring court and, as I noted in my review of the AG’s Opinion, not great publicity for the predictability of jurisdictional rules.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.293 ff, para 2.73 ff.

Applicable law (Article 4 and 7 Rome II) in the Dutch Shell climate ruling. Not quite as momentous as the core message.

I have an article forthcoming on the application of Rome II’s Article 7, ‘environmental damage’ rule. Last week’s widely reported first instance ruling in the Dutch Shell climate case will of course now feature.

I reported on application of A7 in Begum v Maran. There I submit, the Court of Appeal engaged without sufficient depth with the Article. It held against its application. Xandra Kramer and Ekaterina Pannebakker then alerted us to the use of Article 7 in last week’s momentous Milieudefensie v Shell (umpteen) ruling [Dutch version here, English version here], in which Shell by a first instance judge has been ordered to reduce its CO2 emissions. In that ruling, too, the judges leave a lot of issues on Rome II underanalysed. The conclusion  however goes in the opposite direction: the court held A7 is engaged and leads to Dutch law as the lex loci delicti commissi (Handlungsort or ldc).

I have taken the Dutch version of the judgment as the basis for the analysis for the English version is a touch under par when it comes to the finer detail. The Dutch version it has to be said is not entirely clear either on the conflict of laws analysis.

Firstly, Milieudefensie argue that A7 is engaged, and it suggests it opts for Dutch law given the choice left to it by that Article. Whether it does so as lex loci damni (Erfolgort or ld) or lex loci delicti commissi is not specified. It is reported by the courts that in subsidiary fashion Milieudefensie argue that per A4(1)’s general rule, Dutch law is the lex causae: that has to be Erfolgort.  (Lest the court inaccurately reported parties’ submissions here and the argument made under A4 focused on Article 4(3)’s displacement rule) [4.3.1].

The judges further report [4.3.2] that parties were in agreement that climate change, whether dangerous or otherwise, due to CO2 emissions constitutes ‘environmental damage’ in the sense of A7 Rome II (and the judges agree) and that they were in disagreement on the locus delicti commissi. Milieudefensie argue that Shell’s holding policy viz climate change and emissions, dictated from its corporate home of The Netherlands, is that Handlungsort. Shell argue that the place of the actual emissions are the Handlungsorts (plural), hence a Mozaik of applicable laws. (This nota bene has interesting applications in competition law, as I suggest here).

Then follows a rather sloppy reference to Jan von Hein’s note bene excellent review of Article 7 in Calliess; distinguishing of the arguments made by Shell with reference to ia product liability cases; and eventually, with reference to ia the cluster effect of emissions (‘every contribution towards a reduction of CO2 emissions may be of importance’ [4.3.5]) and the exceptional, policy driven nature of A7, the conclusion [4.3.6] that the holding policy is an independent cause of the CO2 emissions and hence imminent climate damage and obiter [4.3.7] that A4(1) would have led to the same conclusion.

The ruling will of course be appealed. It would be good to get the application of Article 7 right, seeing as environmental law is a core part of strategic and public interest litigation.

Geert.

EU Private International Law, 3rd. ed. 2021, Chapter 4, Heading 4.6.3 (4.54 ff).