Lodi Trading, a lotta fog: Kolassa in the Belgian Supreme Court.

Many thanks Michael Verhaeghe  (whom I have the pleasure with jointly to be representing a client) for alerting me to Lodi Trading in which the Belgian Supreme Court applied (and distinguished) Kolassa. Lodi Trading is registered in The Netherlands and seemingly had been duped into transferring funds to a gang of fraudsters.  As always, the judgment is very very scant on factual reference, and I have not been able to find the Court of Appeals’ judgement: if anyone can: Court of Appeal Gent, 8 December 2015.

Like the CJEU itself did clearly in Universal Music, the Hof van Cassatie distinguished Kolassa (although it does not refer to Universal Music in this part of the judgment) by insisting there be circumstances specific to the case, over and above the simple presence of a bank account, which point to the damage occurring in that State.

In Universal Music the CJEU had emphasised the need for case-specific facts for bank accounts to be a relevant factor in determining jurisdiction, by holding that ‘it is only where the other circumstances specific to the case also contribute to attributing jurisdiction to the courts for the place where a purely financial damage occurred, that such damage could, justifiably, entitle the applicant to bring the proceedings before the courts for that place.’ (emphasis added).

What seems (but again: see the joint caveat of the Supreme Court’s judgment being scant and the Court of Appeal’s judgment being untraceable) to be specific to this case is that the Court of Appeal had held in favour of the location of the bank account of recipient of the funds being locus damni, given that ‘internal law’ (by which I take it reference is made to Belgian, not Dutch law) determines that the time of payment is determined by the moment of accreditation of the funds to the beneficiary’s account: not (the alternative reading; but again I am assuming for the judgment’s 10 brief paras do invite speculation) the time of the funds leaving the account holder’s account.

It could well be therefore that the Supreme Court is rebuking the Court of Appeal for having Belgian law enter the equation, given the need for autonomous interpretation of European civil procedure. But I am not entirely sure.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 2, Headings 2.2.11.2, 2.2.11.2.7

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Now you sue me, now you don’t. Trump v Daily Mail.

The president and Mrs Trump keep on exercising the courts. In Melania Trump v Webster Tarpley and Mail Media, Inc., the circuit court for Montgomery County, Maryland, accepted jurisdiction against the former, who is resident in Maryland, but rejected it against the latter, who is resident at New York. (It is registered there and also has its head office there). The second defendant is most likely the owner of the website dailymail.com and dailymail.co.uk. Whether that was really the case was left in the middle though for the Daily Mail group (whom Wikipedia today confirmed as no longer accepting as a source of facts), wanted the judge to rule on the merits of jurisdiction rather than on a possibly wrongly identified defendant.

Alleged libel concerns reports published by Mr Tarpley, a blogger, and the Daily Mail, relating to remarks, later retracted by both defendants, on alleged past racy activities of Mrs Trump. At issue was whether the courts at Maryland have personal jurisdiction over Mail Media. Mrs Trump’s legal team suggest publication of defamatory material in a publication with significant circulation in the forum state, suffices for jurisdiction. This, they argue, is compounded by targeted interactivity between the Daily Mail and readers in Maryland. Mail Media suggest there is no direct connection between Maryland and the Mail Article at issue and that even if the court were to accept such connection, jurisdiction should be refused on the basis of forum non conveniens.

The court accepted the first defence and did not therefore entertain the second. P.7: operating a website, even one that is popular and makes money from advertising, is not ‘purposeful availment’ under precedent rule: the publication has to intentionally enter the forum market: the MAil’s influence in the US is on a national (federal) basis.

Note to class: compare the court’s approach with that of European courts under the Brussels I Recast Regulation.

Mrs Trump has now refiled in New York, where both her and second defendant are resident.

Geert.

 

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High Court stay of Micula ICSID award pending CJEU finding on State Aid decision.

I have written this blog post with in my mind a rather bibliographical purpose: having collated all sources I would rather like finding them all back again. In [2017] EWHC 31 (Comm) Micula and others v Romania and the European Commission, the High Court effectively halted the enforcement of an ICSID award, pending a Court of Justice Ruling (in Case T-694/15) on the legality of an EC finding of State Aid. The Award arose out of the Romania-Sweden BIT and as such got caught up in the maelstrom (this could have been an intended pun however etymologically the word is Dutch, not Swedish) of discussions surrounding EU competencies in intra-EU Bilateral Investment Treaties (for background on that issue see here).

Not quite following the rabbit down the hole however nevertheless quite a wonderland of colliding legal regimes.

Geert.

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‘Performance based’ and ‘Well to wheel’ renewable (bio)fuel standards.

Thank you Jonathan Cocker for flagging Ontario’s stakeholder consultation on renewable fuel standards, aka biofuels. Current thinking, outlined in the discussion paper, is to make the standards ‘performance based’: ie without pushing one or rather additive and exclusively focus on achieved (documented) reduction of greenhouse gas emissions.

Biofuels are known to create international trade tension. Argentina and the EU are still formally in consultation over the EU’s approach. Various WTO dispute settlement concerns anti-dumping duties on biofuels. Finally one or two elements of WTO dispute settlement on support for renewable energy touch upon fuel standards.

With all that in mind one particular element of the Ontario regime caught my attention: the intention to regulate GHG emissions ‘well to wheel’: ie ‘to assess emissions performance across the fuel’s full well-to-wheel lifecycle, from extraction to processing, distribution and end-use combustion.’(p.6). Canada does that already for  diesel, with its 2014 greener diesel Regulation, employing what is known as the ‘GHGenius’ model.

What I have not been able to gauge from my admittedly limited research into that model: does it at all and if so how, apply to particularly extraction outside of Canada indeed outside Ontario? For the EU, much of the biofuel production (let alone biofuel imports) at some point or another involves extra-EU elements. How does a well to wheel method in such case work under WTO rules?

Geert.

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Finding SHELLter. The High Court on CSR and applicable law in Okpabi.

Where does one look first? : as I reported last week, Ms Kiobel is now taking her US case to The Netherlands (this case essentially involves human rights), at a time when Shell is still pursued in the Netherlands by Milieudefensie, in a case involving environmental pollution in Nigeria.

That latter case now is being mirrored in the High Court in London in Okpabu v Shell [2017] EWHC 89 (TCC). The dual proceedings are squarely a result of the split listing of Shell’s mother company, thus easily establishing jurisdiction in both The Netherlands and London, under Article 4 Brussels I Recast.

The only preliminary issue which the High Court had to settle at this early stage was whether Shell’s holding company, established in the UK, can be used as anchor defendant for proceedings against Shell Nigeria. It held that it could not. The questions dealt with are varied and listed as follows:

1. Do the claimants have legitimate claims in law against RDS?

2. If so, is this jurisdiction the appropriate forum in which to bring such claims? This issue encompasses an argument by RDS that it is an abuse of EU law for the claimants to seek to conduct proceedings against an anchor defendant in these circumstances.

3. If this jurisdiction is the appropriate forum, are there any grounds for issuing a stay on case management grounds and/or under Article 34 of the Recast Regulation in respect of the claim against RDS, so that the claim against SPDC can (or should) proceed against SPDC in Nigeria?

4. Do the claims against SPDC have a real prospect of success?

5. Do the claims against SPDC fall within the gateway for service out of the jurisdiction under paragraph 3.1(3) of CPR Practice Direction 6B?

This issue requires consideration of two separate sub-issues, namely (a) whether the claims against RDS involve a real issue which it is reasonable for the Court to try; and (b) whether SPDC is a necessary or proper party to the claims against RDS.

6. Is England the most appropriate forum for the trial of the claims in the interests of all parties and for the ends of justice?

7. In any event, is there a real risk the Claimants would not obtain substantial justice if they are required to litigate their claims in Nigeria?

 

In detailed analysis, Fraser J first of all seems to accept case-management as a now established route effectively to circumvent the ban on forum non conveniens per Owuso (see Goldman Sachs and also reference in my review of that case, to Jong and Plaza). Over and above case-management he refers to potential abuse of EU civil procedure rules to reject the Shell Nigeria joinder. That reference though is without subject really, for the rules on joinders in Article 8 Brussel I recast only apply to joinder with companies that are domiciled in the EU – which is not the case for Shell Nigeria.

Of specific interest to this blog post is Fraser J’s review of Article 7 Rome II: the tailor made article for environmental pollution in the determination of lex causae for torts: in the case at issue (and contrary to the Dutch mirror case, which is entirely being dealt with under residual Dutch conflicts law) Rome II does apply to at least part of the alleged facts. See here for my background on the issue. That issue of governing law is dealt with at para 50 ff of the judgment.

For environmental pollution, plaintiff has a choice under Article 7 Rome II. Either lex damni (not appealing here: for Nigerian law; the judgment discusses at some length on the extent to which Nigerian law would follow the English Common law in issues of the corporate veil), or lex loci delicti commissi. This, the High Court suggest, can only be England if two questions are answered in the affirmative (at 79). The first is whether the parent company is better placed than the subsidiary to avoid the harm because of its superior knowledge or expertise. The second is, if the finding is that the parent company is better placed, whether it is fair to infer that the subsidiary will rely upon the parent. With reference to precedent, Fraser J suggest it is not enough for the parent company simply to be holding shares in other companies. (Notice the parallel here with the application of ATS in Apartheid).

The High Court eventually holds that there is no prima facie duty of care than can be established against the holding company, which would justify jurisdiction vis-a-vis the daughter. At 106, the Court mirrors the defendant’s argument: it is the Nigerian company, rather than the holding, that takes all operational decisions in Nigeria, and there is nothing performed by the holding company by way of supervisory direction, specialist activities or knowledge, that would put it in any different position than would be expected of an ultimate parent company. Rather to the contrary, it is the Nigerian company that has the specialist knowledge and experience – as well as the necessary licence from the Nigerian authorities – to perform the relevant activities in Nigeria that form the subject matter of the claim. … It is the specialist operating company in Nigeria; it is the entity with the necessary regulatory licence; the English holding company is the ultimate holding company worldwide and receives reports back from subsidiaries.

 

Plaintiffs have been given permission to appeal. Their lawyers have indicated to rely heavily on CJEU precedent, particularly T-343/06 Shell v EC. This case however concerns competition law, which as I have reported before, traditionally has had a theory on the corporate veil more easily pierced than in other areas. Where appeal may have more chance of success, I believe is in the prima facie character of the case against the mother company. There is a thin line between preliminary assessment with a view to establishing jurisdiction, and effectively deciding the case on the merits. I feel the High Court’s approach here strays too much into merits territory.

Geert.

 

 

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Trading Together For Strong and Democratically Legitimized EU International Agreements

I am happy to post here the link to the statement which I signed together with 62 colleagues from various walks of (trade) life, on the EU’s modus operandi for the signature of trade agreements.  Post-CETA, we strongly believe that current procedures, when properly implemented, ensure democratic legitimacy for the EU’s international agreements at multiple levels. The statement is available in English, French and German: EU noblesse oblige.

Geert.

 

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Amino acids, foodstuffs and precaution. The CJEU disciplines Member States in Queisser Pharma.

There is as yet no EU harmonisation on amino acids, in so far as they have a nutritional or physiological effect and are added to foods or used in the manufacture of foods. A range of EU foodlaws therefore do not apply to national action vis-a-vis amino acids, in particular Regulation 1925/2006 – the food supplements Regulation. In the absence of specific EU law rules regarding prohibition or restriction of the use of other substances or ingredients containing those ‘other substances’, relevant national rules may apply ‘without prejudice to the provisions of the Treaty’.

In C-282/15 Queisser Pharma v Germany, moreover there were no transboundary elements: Articles 34-36 TFEU therefore do not in principle apply.

No doubt food law experts may tell us whether these findings are in any way unusual, however my impression is that the Court of Justice in this judgment stretches the impact of the ‘general principles of EU food law’ as included in Regulation  178/2002. Indeed the Court refers in particular to Article 1(2)’s statement that the Regulation lays down the general principles governing food and feed in general, and food and feed safety in particular, at EU and national level (my emphasis). Article 7 of the Regulation is of particular relevance here. That Article gives a definition of the precautionary principle, and consequential constraints on how far Member States may go in banning foodstuffs, as noted in the absence of EU standards and even if there is no cross-border impact.

Article 7 Precautionary principle

1. In specific circumstances where, following an assessment of available information, the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure the high level of health protection chosen in the Community may be adopted, pending further scientific information for a more comprehensive risk assessment.

2. Measures adopted on the basis of paragraph 1 shall be proportionate and no more restrictive of trade than is required to achieve the high level of health protection chosen in the Community, regard being had to technical and economic feasibility and other factors regarded as legitimate in the matter under consideration. The measures shall be reviewed within a reasonable period of time, depending on the nature of the risk to life or health identified and the type of scientific information needed to clarify the scientific uncertainty and to conduct a more comprehensive risk assessment.

Germany on this point is probably found wanting (‘probably’, because final judgment on the extent of German risk assessment is left to the national court) – reference is best made to the judgment for the Court’s reasoning. It is clear to me that the way in which the Regulation defines precaution, curtails the Member States considerably. Further ammunition against the often heard, and wrong, accusation that the EU is trigger happy to ban substances and processes in the face of uncertainty.

Geert.

 

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