Windhorst v Levy. The High Court on the narrow window to refuse a Member State judgment under Brussels Ia, which subsequently got caught up in insolvency.

Windhorst v Levy [2021] EWHC 1168 (QB) has been in my in-tray a little while. The court was asked to consider whether registration of a German judgment under Brussels Ia should be set aside when the judgment debt in question was subsequently included within a binding insolvency plan, which is to be recognized in E&W pursuant to the European Insolvency Regulation  – EIR 1346/2000 (not materially different on this point to the EIR 2015). Precedent referred to includes Percival v Moto Novu LLC.

Appellant argues the registration order should be set aside as the initial 2003  judgment is no longer enforceable, having been waived as part of a binding insolvency plan, which came into effect by order of a German court on 31 August 2007 (“the Insolvency Plan”), and which this court is bound to recognize under the Insolvency Regulation.

In CJEU C-267/97 Coursier v Fortis Bank SA (held before the adoption of the EIR) it was held that enforceability of a judgment in the state of origin is a precondition for its enforcement in the state in which enforcement is sought. However that judgment then at length discussed what ‘enforceability’ means, leading to the Court holding that it refers solely to the enforceability, in formal terms, of foreign decisions and not to the circumstances in which such decisions may in practice be executed in the State of origin. This does not require proof of practical enforceability. The CJEU left  it to ‘the court of the State in which enforcement is sought, in appeal proceedings brought under [(now) Brussels Ia], to determine, in accordance with its domestic law including the rules of private international law, the legal effects of a decision given in the State of origin in relation to a court-supervised liquidation.’

The respondent contends that, applying the test laid down in Coursier v Fortis, the 2003 Judgment plainly remains enforceable in formal terms under German law.

The judge, at 52 ff, refers ia to CJEU Prism Investments and Salzgitter to emphasise the very narrow window for refusal of recognition, and holds [56] that the German judgment clearly is still formally enforceable in Germany (where enforcement is nota bene only temporarily stayed pending appeal proceedings). The effects of the German insolvency plan, under German law, are not such that the 2003 judgment has become unenforceable [58].

The request for a stay of execution is also denied, seeing as the appellant chose not to pursue a means available to it under German law and before the German courts, to seek a stay (it would have required it to put down the equivalent sum as court security).

Geert.

EU Private International Law, 3rd ed. 2021, 2.560 ff, 5.141 ff.

Winslet & Ors v Gisel. Textbook application of De Bloos and looking over the fence to determine forum contractus.

Winslet & Ors v Gisel, The Estate of [2021] EWHC 1308 (Comm) is a brilliant example to teach the ‘looking over the fence’ method for determining forum contractus under Article 7(1), for contracts that do not fall within the default categories and whence the CJEU De Bloos place of performance bumps into the limits of harmonisation following CJEU Tessili v Dunlop. Confused?: the judgment certainly helps.

Claimants, domiciled at England, seek to recover from the estate of a late friend, a considerable sum by way of repayment of principal in respect of a number of interest-free loans between friends (the borrower domiciled at France).

At [16] Butcher J holds (despite considering the broad interpretation of ‘services’ by the AG in Corman-Collins /Maison du Whiskey) ‘In my judgment, the simple provision of money to a friend, which is not undertaken as part of a business of lending money, probably does not qualify as the provision of a service’ (per A7(2), GAVC – reference is made to C-533/07 Falco Privatstiftung v Weller-Lindhorst [29]: “The concept of services implies, at the least, that the party who provides the service carries out a particular activity in return for remuneration.”

The answer to the question ‘what is the place of performance of the obligation to repay’ therefore leads to Rome I per CJEU Tessili v Dunlop and to Article 4(2) Rome I. [26]

‘In the context of banking services, it is, at least ordinarily, the lender that renders characteristic performance of a loan agreement in providing the principal sum to the borrower’ (reference to CJEU Kareda). [27] ‘The question of which party renders the characteristic performance of a loan agreement outside the sphere of financial services has been viewed as rather less clear cut.’ [32] ‘pursuant to the contracts of loan which are in issue, claimants loaned money in return for a promise to repay.’ They, it is held, rendered characteristic performance under the Loans.

As a result, the Loans are governed by English law, as England is the place where each claimant has his or its habitual residence, and English law therefore determines the place of performance, which it does at the creditor’s place of residence or business (contrary it would seem to the position under French law.

Superbly clear analysis.

Geert.

EU private international law, 3rd ed. 2021, 2.401 ff.

ID v LU. A voluntarily appearing defendant cannot serve as anchor for another under the English residual rules (as indeed under BIa).

In ID v LU & Anor [2021] EWHC 1851 (Comm) Pelling J discusses a challenge to jurisdiction in which each of the parties are Ukrainian nationals. Brussels Ia applies but is only engaged viz one of the defendants. Claimant and second defendant are both domiciled and resident in Ukraine. The first defendant is a Ukrainian national who is and was at all material times domiciled in an otherwise unidentified EU Member State.

Claimant alleges that the second defendant approached him requesting that he move his corporate banking business to the second defendant, a Bank. Following discussions, the claimant agreed to do so and considerable funds  were placed with The Bank. The claimant’s case is that he agreed to do so only after the second defendant agreed that he would undertake personal responsibility for all monies that the companies placed with The Bank. The claimant alleges that it was expressly agreed by the claimant and second defendant that this oral agreement was governed by English law.

There was more tro and fro however I focus here on the jurisdictional challenge. With reference to Article 4 BIa and the most recent authority of Vedanta, the judge holds that in principle the defendant with EU domicile has a right to refuse to be sued other than in his place of domicile. However that defendant acknowledged service, indicating an intention to defend the claim but not to contest jurisdiction. This leads the judge to conclude, after some discussion, that there is A26 BIa submission (aka voluntary appearance).

Next follows an important discussion on the circumstances in which a defendant who voluntarily submits, may serve as an anchor defendant under the English residual rules.  It would certainly not be possible under Brussels Ia. The relevant rule in the practice directions (this is ‘Gateway 3’) reads

“3.1 The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where –… 3) A claim is made against a person (‘the defendant’) on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and  – a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.

Second defendant argues claimant is not entitled to rely on Gateway 3 because the first defendant is not a defendant who is to be treated as being a person on whom the claim form has been or will be served because the court has jurisdiction over the first defendant only because he has voluntarily submitted to the jurisdiction of the English Court. The overall nature of the discussions on this issue essentially discuss the need to avoid abuse. Of note in this respect is the judge finding [41] that there is ‘no evidence that suggests that there was any agreement reached between the claimant and the first defendant by which the first defendant agreed to submit to the jurisdiction of the court prior to the issue of the Claim Form in these proceedings or for that matter afterwards.’

Nevertheless the judge holds that the current authorities in particular the Court of Appeal in the Benarty [1983] 1 Lloyds Rep 361, continue to not permit a claimant to rely on an anchor defendant who has voluntarily submitted to the jurisdiction when he could not otherwise have been served in accordance with the CPR. Obiter he holds that while there is a real issue to be tried against the second defendant, the contract gateway for jurisdiction (which would require English law to be the lex contractus) is not engaged. No clearly demonstrated will exists for English law to be lex voluntatis per Rome I [76] and [80]

There is no plausible evidential basis to submit that that the governing law identified by either Article 4(2), 4(3), or 4(4) [of Rome 1] would be English law. The Tripartite Agreement was, if made: (a) agreed between three Ukrainians who reside (or resided) in Ukraine and/or [The EU Member State]; (b) agreed in, variously, [The EU Member State], Ukraine, and France; (c) premised on a further agreement said to have been agreed in Ukraine, between two Ukrainians, in respect of deposits made by Ukrainians into a Ukrainian bank; (d) to be performed outside England. No party has provided any evidence of any connection between themselves, or the Tripartite Agreement, and England”

Neither does the tort gateway help [83]:

There is no evidence that at any stage any of the contact that took place leading to what the claimant contends to be the inducement of a breach by the first defendant of the Tripartite Agreement took place otherwise than in either Ukraine or The EU Member State.

At [86] ff England is, equally obiter, held to be forum non conveniens.

Lack of jurisdiction against the second defendant is confirmed. One imagines there might be ground of appeal given the change to the practice directions’ formulation after the Benarty and the need to clear up this principled issue.

Geert.

Lakatamia Shipping. On (in)direct damage, applicable law (A4(3) Rome II) and conspiracy.

Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm)  discusses i.a. [840 ff; this is a lengthy judgment] the applicable law in the case of conspiracy. Lakatamia advance two claims against the Defendants, the first re dissipation of two assets (net sale proceeds of two Monegasque villas – the Monaco conspiracy and a private jet – the Aeroplane conspiracy)  in breach of a World Wide Freezing Order (“WFO”)  and secondly re intentional violation of rights in a judgment debt.

Lakatamia’s case as claimants is that English law applies to the claims regarding both conspiracies, whilst Madam Su’s case is that Monaco law applies to the claim regarding the Monaco Sale Proceeds and that an unspecified law (but not English law) applies to the Aeroplane Conspiracy.

None of the specific categories of torts in the Rome II Regulation are said to apply, bringing the focus therefore on the general rule of Article 4(1), with firstly its insistence that only direct damage determines lex causae, not indirect damage.

At 843 Bryan J, like claimants, focuses on the judgment:

the focus being on the freezing order and judgment, with the damage to Lakatamia being suffered in England as that is the situs of the Judgment Debt arising out of the Underlying Proceeding in England, policed by the… Freezing Order, and that is where the Judgment Debt stands to be paid, and where Lakatamia suffers damage if it is not paid or the ability for it to be paid is impaired – put another way England is the country where the Judgment Debt should have been paid, and the damage has accordingly occurred here.

To support the point, at 845 ff English and CJEU authority (much of it also reviewed on this blog) under A7(2)BIa is discussed albeit the judge correctly cautions ‘Authorities on the Brussels Regulation are “likely to be useful” but are not of direct application’. Core reference is Pan Oceanic,

(6)  There is a difference between a case in which the claimant complains that he has lost his money or goods (as in the Marinari case [1996] QB 217 or the Domicrest case [1999] QB 548 ) and a case in which the claimant complains that he has not received money or goods which he should have received. In the former case the harm may be regarded as occurring in the place where the money or goods were lost, although the loss may be said to have been consequentially felt in the claimant’s domicile. In the latter case the harm lies in the non-receipt of the money or goods at the place where they ought to have been received, and the damage to him is likely to have occurred in the place where he should have received them: the Dolphin case [2010] 1 All ER (Comm) 473 , para 60 and the Réunion Européenne case [2000] QB 690 , paras 35-36. (emphasis in the original).

I am not entirely convinced. While it is true that the conspiracy clearly impacts on the receipts, this is the consequence of actual behaviour by defendants elsewhere, with actual impact of that behaviour in that same place abroad. I do not think it is inconceivable to qualify the damage in England as ricochet hence indirect damage. The discussion here leads to CJEU Lazar which, it would seem, was not discussed in the proceedings.

At 860 at any rate, the judge lists his reasons for picking English law as the ‘proper law of the tort’ per A4(3) Rome II. This may be a more solid decision than the A4(1) decision.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.30, para 4.39 ff.

Emerald Pasture. The High Court on on actions ‘related to’ insolvency (Gourdain; vis attractiva concursus) and jurisdiction for E&W courts post Brexit.

In Emerald Pasture Designated Activity Company & Ors v Cassini SAS & Anor [2021] EWHC 2010 (Ch) there is an interesting split between pre and post Brexit applicable EU rules, with BIa not engaged yet the EU insolvency rules firmly in the picture.

Claimants Emerald are lenders, and first defendant Cassini is the borrower, under a senior facilities agreement dated 28 March 2019 (the SFA). The SFA is governed by English law and has an exclusive jurisdiction clause in favour of the English courts. Cassini is subject a French ‘Sauvegarde’) opened on 22 September 2020. This is a form of debtor-in-possession safeguard proceeding for a company in financial difficulties that wishes to propose a restructuring plan to its creditors. Sauvegarde is included in the proceedings that are subject to the Recast European Insolvency Regulation 2015/848. Parties are seemingly in agreement that the EIR 2015 continues to apply in the UK in respect of the Sauvegarde, because it was commenced prior to 31 December 2020, Brexit date.

Cassini contest jurisdiction, arguing that the claim derives from and is closely linked to the Sauvegarde and thus falls within A6(1) EIR, the so-called vis attractiva concursus which reads

“The courts of the Member State within the territory of which insolvency proceedings have been opened in accordance with Article 3 shall have jurisdiction for any action which derives directly from the insolvency proceedings and is closely linked with them, such as avoidance actions.”

This Article is the result of CJEU case-law such as Gourdain , Seagon , German Graphics , F -Tex.

Zacaroli J unfortunately repeats the suggested dovetail between BIa and the EIR, referring to CJEU Nickel & Goeldner.

As the judge notes [24] the application of A6(1) has not been made easier by the CJEU blurring the distinction between the conditions – with reference to Bobek AG in NK v BNP Paribas Fortis NV (on the Peeters /Gatzen suit).

Emerald argue that the question is whether the action itself derives from the insolvency proceeding. They contend that since the action is for declaratory relief in respect of a contract, its source is the common rules of civil and commercial law. Cassini focus on the issue raised by the action. They contend that since the only matter in issue in the action is whether the rights to information under the SFA are overridden by the Sauvegarde – and the principles of French insolvency law that govern the Sauvegarde – the real matter in issue concerns the effects of the insolvency proceedings so that the action falls within A6(1).

The judge [45] after discussion and assessment of the authorities (incl   ING Bank NV v Banco Santander SA ) discussed by both parties, decides against vis attractiva concursus. He holds that the legal basis for the declarations sought remains the SFA, and thus the rules of civil and commercial law, notwithstanding that the only issue which the court would be required to determine is the impact of French insolvency law on the obligations under the SFA. The question which the declarations are designed to answer, it is held, is the enforceability of the contractual rights.

On that basis, the exclusive choice of court clause grants E&W courts jurisdiction, under English common law (as it would have done under BIa, given the judge’s finding on vis attractiva).

If the claim goes ahead (one images appeal may be sought), the French insolvency proceedings will not have lost their relevance. Cassini argue on that issue [12 ff] that since the characteristic performance of the SFA is the loan of funds, which has already occurred, the SFA is not a “current contract” and as a result of French law, is no longer enforceable. Only the underlying debt subsists, they argue, which must be paid by way of dividends in the French insolvency proceedings. That argument, one assumes, will bump into further obstacles.

Geert.

EU Private International Law, 3rd ed, 2021, para 5.76 ff.

 

Volvo Trucks. The CJEU unconvincingly on locus damni in follow-on damages suit for competition law infringement.

The CJEU held yesterday in C-30/20 Volvo Trucks. I reviewed Richard de la Tour AG’s Opinion here.

After having noted the limitation of the questions referred to locus damni [30]  (excluding therefore the as yet unsettled locus delicti commissi issues) the CJEU confirms first of all [33] that Article 7(2) clearly assigns both international and territorial jurisdiction. The latter of course subject to the judicial organisation of the Member State concerned. If locus damni x has no court then clearly the Regulation simply assigns jurisdiction to the legal district of which x is part. However the Court does not rule out [36] per CJEU Sanders and Huber that a specialised court may be established nationally for competition law cases.

The Court then [39] applies C‑343/19 Volkswagen (where goods are purchased which, following manipulation by their producer, are of lower value, the court having jurisdiction over an action for compensation for damage corresponding to the additional costs paid by the purchaser is that of the place where the goods are purchased) pro inspiratio: place of purchase of the goods at artificially inflated prices will be locus damni, irrespective of whether the goods it issue were purchased directly or indirectly from the defendants, with immediate transfer of ownership or at the end of a leasing contract [40].

The Court then somewhat puzzlingly adds [40] that ‘that approach implies that the purchaser that has been harmed exclusively purchased goods affected by the collusive arrangements in question within the jurisdiction of a single court. Otherwise, it would not be possible to identify a single place of occurrence of damage with regard to the purchaser harmed.’

Surely it must mean that if purchases occurred in several places, Mozaik jurisdiction will ensue rather than just one locus damni (as opposed to the alternative reading that locus damni jurisdiction in such case will not apply at all). However the Court then also confirms [41 ff] its maverick CDC approach of the buyer’s registered office as the locus damni in the case of purchases made in several places.

Here I am now lost and the simply use of vocabulary such as ‘solely’, ‘additionally’ or ‘among others’ would have helped me here. Are we now to assume that the place of purchase of the goods is locus damni only if there is only one place of purchase, not if there are several such places (leaving a lot of room for Article 7(2) engineering both by cartelists and buyers); and that, conversely, place of registered office as locus damni only applies in the event of several places of purchase, therefore cancelling out the classic (much derided) Article 7(2) Mozaik per Shevill and Bier – but only in the event of competition law infringement? This, too, would lead to possibility of forum engineering via qualification in the claim formulation.

I fear we are not yet at the end of this particular road.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.12.2.8.

 

Eastern Pacific Chartering v Pola Maritime. How an application for lis pendens awakens the Brussels Convention (as between the UK and Gibraltar).

Eastern Pacific Chartering Inc v Pola Maritime Ltd [2021] EWHC 1707 (Comm) is a highly unusual case which shows that dormant Conventions can be awoken from their slumber.  I merely dabble in EU external relations law, I am no expert in it. The application of that law in the context of private international law is an issue I have tasked one or two students with – let’s just say they find it challenging.

On the specific issue at hand, parties agree that consequential to the Civil Jurisdiction and Judgments Act 1982 (Gibraltar) Order 1997, matters of jurisdiction between the E&W Courts and the Supreme Court of Gibraltar are governed by the Brussels Convention 1968 and that this remains the case notwithstanding Brexit. That core issue of external relations law pre and post Brexit is therefore not sub judice. One imagines that had it been, it could have led to extensive to and fro, among others within the context of the UK having revoked the 1968 Convention per the jurisdiction and Judgments Exit Regulations SI 2019/479, and of the Withdrawal Agreement.

In July 2020, claimant had a ship arrested in Gibraltar, with the purpose to serve as security for claims under a charterparty between both, claims that were to be brought in London, consistently with an exclusive jurisdiction clause in the charterparty. Roberston DJ classifies that action as one for provisional measures under Article 24 Convention (35 of the Brussels Ia Regulation).  The legality of that arrest (which ended upon claimant releasing it) continues to be disputed (ia viz the actual ownership of the ship).

Claimant (not domiciled in a 1968 Convention Contracting State) now sues  in E&W (pursuant to the choice of court) Defendant (domiciled at Cyprus) for outstanding monies. In current proceedings it applies to dismiss and strike out that part of the Defendant’s counterclaim at the E&W courts which seeks to advance claims in tort based on the alleged wrongful Gibraltar arrest.  In essence claimant submits that the High Court court has no jurisdiction to try the Defendant’s tort claims and should decline jurisdiction in favour of the Supreme Court of Gibraltar.

After a swipe [18 ff] at both parties having engaged, without court approval, experts on Gibraltarian law (which, she holds, bear no relevance for the jurisdictional issues anyways), Roberston DJ proceeds to discuss the lis pendens issue.

Defendant’s primary case is that, on the facts of this case, Article 17 Convention (A25 BIa) applies to confer jurisdiction, because the exclusive jurisdiction clause is broad enough to cover the tort claims. The Defendant’s fallback position is that, if that is wrong, the Court nevertheless has jurisdiction in respect of its counterclaims, not on the basis of A5(3) Convention (the Claimant (defendant on the counterclaim) not being domiciled in a Convention State) either because that necessarily follows from the Claimant’s decision to litigate its own claims here, or because Claimant has taken steps since service of the Defence and Counterclaim which waived any right to object to jurisdiction in respect of the counterclaims.

The discussion revolves around the contractual and statutory interpretation of the action radius of choice of court. This also involves the classic issue of tort claims between contractual parties (compare Wikingerhof) with the judge opting for the one stop shop approach (distinguishing ia Ryanair Ltd v Esso Italiana Srl [2015] 1 All ER (Comm) 152): 42: ‘there is a clear causal connection [between the contractual and tort claims, GAVC], which seems to be sufficient for the purposes of a clause worded “in connection with“.’ In conclusion: [52]: ‘whether damages are recoverable for an allegedly wrongful arrest made in seeking security for claims under the charter, ..is a claim “in connection with” the charter’ hence the E&W courts have jurisdiction. [39]: this ‘allows a single accounting, as regards the overall financial position of the parties as a result of the legal relationship created between them by the charter, and their dispute about what rights and obligations properly flow from that legal relationship.’

Obiter jurisdiction on the alternative grounds, under English residual rules, is also accepted (with the interesting note of the absence, in the Convention, of a gateway for counterclaims, in contrast with Brussels I and Brussels Ia).

Coming then to lis pendens under Article 21 Convention, this is dismissed. [70] The arrest claim plainly does not involve either the same cause of action or the same object as the Defendant’s tort claims seeking to recover damages for wrongful arrest, which are advanced solely by way of counterclaim in E&W. The factual and legal foundation for that counterclaim needs, on any view, to travel substantially beyond the matters the Claimant relies on for its own cause of action and the object of the counterclaim is to recover damages.

Neither [73] is an acknowledgment of service in the Gibraltar arrest proceedings does not amount to a submission to that jurisdiction which would preclude the Defendant from raising its distinct tort claims in E&W.

A stay on ‘related proceedings’ (Article 22 Convention) is also rejected for the reasons listed at [83]. Core reference here is Research in Motion v Visto [2007] EWHC 900 (Ch).

Geert.

EU Private International Law, 3rd ed. 2021, Chapter 1 Heading 1.7, Chapter 2 para 2.375, 2.469.

Josiya ea v BAT ea (tobacco labourers’ exploitation). On documentary proof of link between claimant and defendant.

Josiya & Ors v British American Tobacco Plc & Ors [2021] EWHC 1743 (QB) is the first shot in an important business and human rights case, accusing the defendants of being responsible for working conditions said to include the widespread use of unlawful child labour, unlawful forced labour and the systematic exposure of vulnerable and impoverished adults and children to extremely hazardous working conditions with minimal protection against industrial accidents, injuries and diseases.

I briefly want to flag the 25 June order by Spencer J for it highlights a point I often make when teaching, or sharing my practice experience on, strategic and public interest litigation: that most of these cases are won not by an eloquent speech on grand principles, delivered in Hollywood fashion. Rather, by the dogged determination of invested lawyers, with a keen eye for detail across civil procedure (including standing, statutes of limitation, service, timely filing of procedural , third party and other ways of financing, tort and other applicable law).

The order at issue dismisses an application for strike-out which was essentially based on an alleged lack of documentary proof of claimants’ link to the defendants, leading to claim said to be an abuse of process.

Brussels IA applies to the claim (claim form was filed on 18 December 2020, the particulars of claim – POC on 12 January 2021): claimants aim to avoid forum non conveniens although of course Articles 33-34 might still be raised. Locus causae is said to be Malawi law [19]. Claimants concede [23] they do not at this stage have documentary evidence that categorially links each individual Claimant to one or more of the Defendants or companies within the Defendants’ corporate groups. They tried to obtain this unsuccessfully in pre-trial disclosure.

Claimant’s counsel, Richard Hermer QC, successfully argued a distinction [41]  between what is required for a party to plead the case; and what is required for a party to prove the case at trial.

Held: the claim form without specific identification of the link between individual claimants and specific defendants is not an abuse of process under the circumstances. An application for disclosure may and must be prepared.

Geert.

European Private International Law, 3rd ed. 2021, Chapter 7.

Hydrodec: A comparative pointer for COMI determination.

As I seem to be in a comparative mood today, consider Hydrodec Group Plc [2021] NSWSC 755, in which a suggestion of COMI in the UK, of a company incorporated there, was dismissed in favour of COMI in the US. Cooper Grace Ward have the relevant background here. The result of the order is that the company will be wound up under Australian law.

Hydrodec Group Plc is the parent company for a corporate group comprised of: subsidiaries located in the UK, Australia and Japan that were not trading; and a sole trading subsidiary located in the United States of America, which owns valuable assets. As CGW report, Hydrodec contended that its COMI was in the UK because, among other things: it has an address in the UK; its affairs are administered in the UK by directors that reside in the UK; its main asset was its shareholding in a subsidiary, in the UK; and the majority of its creditors are in the UK. 

The judge however reportedly (see the CGW overview; I have not been able to locate judgment at this stage) disagreed on the following grounds. COMI must be identified by reference to criteria that are objective and ascertainable by third parties (ditto in the EU under the EIR). The A16(3) UNCITRAL Model Law presumption of COMI in the place of registered office does not apply seeing as the corporation has two of these. The only trading entity within the corporate group controlled by Hydrodec was in the USA.  Hydrodec described the USA as its ‘key market’ and the focus of Hydrodec’s plans for growth. The principal creditor of the corporate group controlled by Hydrodec was in the USA. The administration of the affairs of Hydrodec involved, in substance, the administration of the operations of the USA subsidiary. Finally, Hydrodec’s primary focus was the re-financing of its operations in the USA.

The judgment shows the specificity of determining COMI in the case of a corporation which itself does not have a market focus.

European Private International law, 3rd ed. 2021, 5.65 ff.

Roark v Bridgestone, Shandong et al. Contract fine-print and regulatory compliance determines minimum contacts in Washington.

A short post for comparative conflicts purposes. Readers might be aware of the minimum contacts rule in US jurisdictional analysis.  Rice J excellently summarises the issues in his order denying a strike-out application (‘motion to dismiss’) on the basis of lack of jurisdiction.

‘Under the Due Process Clause, a court may exercise personal jurisdiction over a defendant only where “the defendant ha[s] certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” [Picot v. Weston, 9th Cir. 2015) (quoting Int’l Shoe Co. v. Wash., [1945])….

Personal jurisdiction over a non-resident defendant may take two forms:
general jurisdiction or specific jurisdiction. General jurisdiction requires connections with the forum “so continuous and systematic as to render the foreign corporation essentially at home in the forum State (Ranza). Specific jurisdiction, by contrast, may only be exercised “when a case aris[es] out of or relate[s] to the defendant’s contacts with the forum.”

Shandong essentially argue that they are kept at arm’s length from US jurisdiction because they are not the one importing the tires into the US: a separate corporation imported, a third distributed. The judge however (in the process dismissing Shandong’s assertion that the goods were shipped FOB – Free on Board), found that Shandong delivered tires into the stream of commerce, was involved, in consequence of its contractual duties, in shipping the tires to Washington ports, and has taken steps for creating tires compliant with state and federal law to arrive in Washington pursuant to the supply agreement.  This echoes the EU jargon of ‘directing activities at’ the state of Washington.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.460, para 4.48 ff.