Groundhog day, but with Unicorns. Bobek AG in Obala v NLB i.a. on ‘civil and commercial’.

Probably precisely because it would have been obvious, Bobek AG did not refer in the opening lines of his Opinion in C-307/19 Obala v NLB to Groundhog Day, which, following Pula Parking, this case certainly is. He did at 2 summarise why the issue, essentially on the notion of ‘civil and commercial’ under Brussels Ia and the Service Regulation 1393/2007 keeps on coming before the CJEU (this time in no less than 9 long questions):

The crux of the problem appears to be a certain double privatisation carried out by the Croatian legislature at both management and enforcement level. A matter commonly perceived in other Member States to be administrative in nature is entrusted to private entities. The subsequent enforcement of such a claim is also not designed to be a matter for the courts, but rather, at least at first instance, for notaries.

The EC had objected to quite a few questions on the basis that they engaged too much the substance of the case, which the AG disagrees with: at 31 he suggest that inevitably in conflict of laws jurisdictional advice, ‘telescopic analysis of the substance’ is needed.

On the issue of ‘civil and commercial’, Germany and Slovenia submit the origin of the power under which the contract was concluded and which is enforced in this respect that is determinant.  The applicant, the Croatian Government and the Commission take the opposite view: to them, it is not the origin of the power but rather the modalities of its exercise which represent the determinative element for identifying ‘civil and commercial matters’. It is quite extraordinary that we should still not have consensus on this after to many cases, however as I noted in my review of Buak, the divergent emphasis by different chambers of  the Court has not helped.

At 42 ff Bobek summarily revisits the case-law under BIa (he concedes at 53-54 that case-law on other instruments does not add much), concluding at 52 that the CJEU has used both the ‘subject matter’ approach and the ‘legal relationship’ approach, without expressing a preference for either.

At 59 the Advocate-General opts for the ‘legal relationship’ approach, arguing that path ‘most reliably performs the function of the figurative railroad switch point guiding the dispute from one procedural track to another in search of the ‘right’ institutional path in a Member State at the preliminary stage of jurisdiction’. That path is also the one which as I point out in my review of Buak, was followed by the Second (which includes President Lenaerts, the chair of conflict of laws at Leuven prior to my immediate predecessor, Hans van Houtte) and not the First Chamber:

The Second chamber (K. Lenaerts, A. Prechal, Toader, Rosas and Ilešič in Buak, focus on Sapir which was issued by the third Chamber, comprising at the time Toader (Rapporteur), Ilešič, Jarašiūnas, Ó Caoimh,  Fernlund. Toader and Ilešič are the common denominator with judment in BUAK. Sapir has focus also firstly on the legal relationship between the parties to the dispute, but secondly the basis and the detailed rules governing the bringing of the action (not: the to my knowledge never applied Eurocontrol criterion of ‘subject matter’ of the action).

At 66 the AG offers ‘pointers’ within the ‘nature of the legal relationship’ approach which he believes may be of assistance to any public power assessment:

‘(i) start with the legal relationship which characterises the dispute; (ii) assess it against the framework generally applicable to private parties; and (iii) establish whether the dispute arises from a unilateral exercise of public powers outside that normal private ‘reference framework’.’

which applied to the case at issue, he concludes at 87, leads to a finding of there not appearing to be an exercise of public powers.

I conclude my overview of ‘civil and commercial’ at para 2.65 of the third ed of the Handbook (forthcoming February 2021) with

the acte clair doctrine (meaning that national courts need not refer to the CJEU when the interpretation of EU law is sufficiently clear either by virtue of that law itself or following CJEU interpretation in case-law) implies that national courts by now ought to have been given plenty of markers when applying this condition of application of the Brussels I and Recast Regulation. Except of course the acte might not be that clair at all, as the above overview shows.

Bobek AG seems to have a similar end in mind: at 65: there is no unicorn, a truly autonomous interpretation of ‘civil and commercial’.

The Opinion continues with the classic themes of whether notaries are courts, and a firm opinion that leaving your car in a public parking space provokes contractual relations.

Geert.

European Private International Law, 3rd ed. 2021, paras 2.28 ff concluding at 2.65.

The UKSC in Highbury Poultry Farm. On mens rea and EU law.

I am a bit late with a post as a follow-up to my Tweet, below, re the Supreme Court’s judgment in Highbury Poultry Farm Produce Ltd, R (on the application of) v Crown Prosecution Service [2020] UKSC 39. Thankfully, the judgment is of more than fleeting relevance. It is also a good example of the structured approach to legal argument, its discussion in scholarship and its engagement with the parties’ legal arguments which will be missed post Brexit.

A poultry slaughterhouse was being accused of breaching Regulation 1099/2009 on the protection of animals at the time of killing – the same Regulation at stake in the CJEU Shechita proceedings.

Core issue in the case is whether the EU law at issue implies a requirement for mens rea (criminal intent) in the ability for Member States to discipline its breach. If no means rea is required, the law is one of strict liability.

At 14 Lord Burrows makes the point that the Regulation at issue left it to the Member States to determine the sanctions rolled-out by national law to ensure compliance with the Regulation. Had a Member State decided to deploy civil sanctions only, that would have been fine: criminal law enforcement was not necessary. What follows is a good summary of the authority on means of UK and EU statutory interpretation, with in the case at issue particular emphasis on the impact of recitals: at 51: an unclear recital does not override a clear article.

Conclusion after consideration of the Regulation (the only stain on the analysis being the lack of linguistic input (a fleeting reference at 32 only), given the CILFIT authority on equal authenticity)): that all animals which have been stunned must be bled by incising at least one of the carotid arteries or the vessels from which they arise, is formulated by the Regulation as an obligation of strict liability under EU law. Hence its effet utile requires that Member States that opt for enforcing it via criminal law, employ strict liability in that enforcement.

Reference to the CJEU was neither sought nor seriously contemplated.

Geert.

 

Hebei Huaneng v Deming Shi_B. New Zealand High Court on the notion of ‘courts’ in recognising ‘judgments’ internationally.

Thank you Jan Jakob Bornheim for alerting me to Hebei Huaneng v Deming Shi_B [2020] NZHC 2992, which dismissed the defendant’s application for summary judgment and discusses the notion of a ‘court’ , required to recognise its ‘judgments’ internationally. Readers will recognise the discussion ia from the CJEU case-law in judgments such as Pula Parking.

Hebei Huaneng had obtained judgment against Mr Shi at the Higher People’s Court of Hebei Province. The amount remained unsatisfied. Hebei Huaneng then found out that Mr Shi has assets in New Zealand – an inner-city apartment in Auckland and shares in a New Zealand company.  Mr Shi objects to New Zealand hearing this case on the basis that China does not have true courts and that Hebei Huaneng should first enforce its securities in China.

At 78-79 Bell J holds briefly that questions of real and substantial connection with New Zealand and appropriate forum are not much in issue. The two main arguments raised at this stage lie elsewhere.

Given the lack of treaty on the issue between NZ and PRC, he summarises the NZ common law on recognition at 16:  the common law regards a judgment of a foreign court as creating an obligation enforceable under New Zealand law if the judgment is given by a court, the judgment is final and conclusive, the judgment is for a definite sum, the parties are the same or privies, and the court had jurisdiction under New Zealand’s jurisdiction recognition rules. No merits review will be undertaken however refusal of enforcing a ‘money judgment’ is possible if obtained in breach of New Zealand standards of natural justice, enforcing the judgment would be contrary to public policy,
the judgment was obtained by fraud, the judgment was for a revenue debt, or the judgment involves the enforcement of a foreign penal law. Lack of reciprocal recognition by the other State is no objection.

On the issue of the notion of court, he notes at 29 that complaints that a foreign legal system is so defective that its courts cannot be trusted to do substantial justice may arise in two contexts: in forum non cases, where the analysis is prospective seeing as the case may not even be pending abroad; and in recognition cases, where the analysis is retrospective. At 28 Bell J already points out that style of writing etc. particularly also given the civil law background of China must not confuse. At 35 he notes to core issues viz the concept of court: (a) whether the bodies carrying out judicial functions are distinct from those with legislative and administrative function; and (b) whether the bodies carrying out judicial functions are subject to improper interference. Then follows lengthy-ish consideration of expert evidence to conclude at 60 that the good arguable case of the Chinese courts being independent, is satisfied.

The question of the ‘property security first’ principle’ which would mean satisfaction would first have to be sought against the Chinese secured assets, is discussed mostly in the context of Chinese law, against the backdrop of the common law principle of a party’s freedom to chose asset enforcement. The lex causae for that discussion I imagine will be further discussed at the merits stage.

A good case for the comparative conflicts binder.

Geert.

 

The CJEU in Wikingerhof on distinguishing tort from contract between contracting parties. No Valhalla for those seeking further clarification of Brogsitter, let alone De Bloos.

Update 25 November 10:38 AM:  Readers  may want to refer to the discussion posted to Tobias Lutzi’s view on the case, which I will not copy /paste here save for my initial reply: ‘I believe Tobias’ biggest take-away from the judgment is the Court’s emphasis on ‘indispensability’ of contractual interpretation for A(7)1 to be triggered (he will correct me if I am wrong).
As I argue in my review of the judgment, I think that’s a change of emphasis viz Brogsitter and e.g. Apple v eBizcuss rather than a change in nature of the CJEU approach.
However assuming one applies the authority that courts must not dwell too long on merits in assessing jurisdictional gateways, it does follow that A7(1) will only be engaged in those cases where the contract prima facie is overwhelmingly needed to solve the underlying dispute. This still leaves room for manoeuvre for the creative claimant (see also the AG’s points on forum shopping), but not as much as might have been expected prior to this judgment.’

 

The CJEU held yesterday (Tuesday) in C-59/19 Wikingerhof v Booking.com. I reviewed the AG’s Opinion here and the Court follows the AG’s minimalist interpretation. The case was held in Grand Chamber, which might have provoked expectations yet the judgment is not exactly a bang. Neither however can it be described a whimper. As I note in my review of the Opinion, the case in my view could have been held acte clair. The AG did take the opportunity in his Opinion to discuss many issues which the CJEU was bound not to entertain, at least not in as much detail as the AG did.

Let me first signal what I believe might be the biggest take-away of the litigation, if at least the referring court is followed. That is the Bundesgerichtshof’s finding that  there is no durable record of the alleged consent by Wikingerhof of the amended GTCs, including choice of court, effected via amendments on the ‘Extranet’, which is the portal via which the hotel may update its information and retrieve reservations. Booking.com claimed these amounted to a ‘form which accords with practices which the parties have established between themselves’ pursuant to Article 25(1)(b). Parties will still argue on the merits whether the initial consent to the primary GTCs was strong-armed because of booking.com’s dominant position.

With respect to to the jurisdictional issue, the CJEU in a succinct judgment firstly points to the need for restrictive interpretation. It points at 29 to the claimant being the trigger of A7(1) or (2). Without a claimant’s decision to base a claim on the Articles, they simply do not get to be engaged. That is a reference to the forum shopping discussion of the AG. Still, the court hearing the action must assess whether the specific conditions laid down by those provisions are  met.

At 32, with reference to Brogsitter, ‘an action concerns matters relating to a contract within the meaning of [A7(1)(a) BIa] if the interpretation of the contract between the defendant and the applicant appears indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of against the former by the latter’.  ‘That is in particular the case of an action based on the terms of a contract or on rules of law which are applicable by reason of that contract’ (reference to Holterman and to Kareda, with the latter itself referring to De Bloos). At 33  ‘By contrast, where the applicant relies, in its application, on rules of liability in tort, delict or quasi-delict, namely breach of an obligation imposed by law, and where it does not appear indispensable to examine the content of the contract concluded with the defendant in order to assess whether the conduct of which the latter is accused is lawful or unlawful, since that obligation applies to the defendant independently of that contract, the cause of the action is a matter relating to tort, delict or quasi-delict’.

At 32 therefore the CJEU would seem to confirm De Bloos’ awkward (given the Regulation’s attention to predictability) support for forum shopping based on claim formulation yet corrected by what is more akin to Sharpston AG’s approach in Ergo and the Court’s approach in Apple v eBizcuss, a judgment not referred in current judgment: namely that the judge will have to consider whether contractual interpretation is strictly necessary (the Court uses ‘indispensable’) to judge the case on the merits. Update 25 November 2020 as Tobias Lutzi notes here, it is the repeated (after its first use in Brogsitter) emphasis on ‘indispensable’ which might be the core clue of the CJEU: it would make the threshold for the 7(1) gateway in cases like these, high. A change in emphasis compared to Brogsitter, rather than one in substance.

Here, Wikingerhof rely on statutory German competition law (at 34-36): therefore the claim is one covered by Article 7(2).

The judgment confirms the now very fine thread between jurisdictional and merits review for the purposes of tort-based litigation between two contracting parties.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9. 3rd ed. 2021 para 2.469.

 

Safety-Kleen. On the definition of waste and probably not the best use of the Shell authority.

Decisions on the definition of waste under the EU waste framework Directive 2008/98 inevitably involve quite a bit of factual analysis and Safety-Kleen UK Ltd v The Environment Agency [2020] EWHC 3147 (Admin)  is no exception.

Safety-Kleen UK Ltd, the Claimant, provides specialist mechanical parts washers, containing kerosene, to businesses, such as those undertaking automotive repairs and to small engineering businesses. They are used for cleaning the parts of heavy oil, grease, paint, ink, glues and resins. The machines enable a cleaning process by physical means, such as scrubbing and automatic agitation with kerosene, and by kerosene acting as a solvent. Safety-Kleen collects the used kerosene from its customers in drums and replaces it with cleaned kerosene. Safety-Kleen takes the drums of used kerosene back to a depot, empties them into a sump or reservoir and then rinses out the drums with used kerosene from the reservoir, to which the now re-used kerosene returns. From there, the re-used kerosene is pumped into the “dirty” tanks, whence it is tankered away to a different company for a specialised industrial waste recovery or regeneration process, by which the dirty kerosene is distilled and cleaned. The cleaned kerosene is returned to a Safety-Kleen depot, and placed into the cleaned drums.

There was no issue but that the dirty kerosene, when it reached the “dirty” tanks at the depot was “waste”, within the WFD, and remained waste when transferred to the depot for distillation and waste until it was cleaned for re-use by customers. Until 2017, there had been no issue between Safety-Kleen and the Environment Agency but that the used kerosene was waste when it was collected by Safety-Kleen from its customers’ premises. However, in 2017, Safety-Kleen concluded that the kerosene did not become waste until it had been used for the cleaning of the drums back at the depot, and was sent to the “dirty” tanks, to await removal for recovery or regeneration. The Agency thought otherwise.

Ouseley J discussed the classics with particular focus on Arco Chemie and  Shell, and at 50-51 a rather odd deference even in judicial review, to what the regulator itself held. The EU definition of waste is a legal concept; not one to be triggered by the Agency’s conviction. Nevertheless he reaches his ‘own judgment’ (52) fairly easily and, I believe on the basis of the facts available, justifiably, that the kerosene is being discarded by the holder, it being ‘indifferent to what beneficial use Safety-Kleen may be able to make of it back at the depot’ (at 56).

Claimant’s reliance on Shell seemed not the most poignant, seeing as the case here is not one of reverse logistics but rather one of truly spent raw materials on their way to perhaps receiving a second life following treatment.

Geert.

Handbook of EU Waste law, OUP, second ed, 2015.

Ryanair v DelayFix. The CJEU dots some i’s on choice of court and unfair terms in consumer contracts; defers to national law on the assignment issue; and keeps schtum on renvoi in Article 25 Brussels Ia.

In C-519/19 Ryanair v DelayFix, the CJEU held yesterday. The case echoes the facts in Happy Flights v Ryanair at the Belgian Supreme Court.

Following inter alia  CJEU Jana Petruchova, the (absence of) impact of substantive European consumer protection rules on the consumer section of European private international law is now fairly settled. The separation between the two sets of laws seems quite clear for the application of the consumer section itself.

However under A25 BIa, EU consumer law might still play a role in those circumstances where the conditions of the consumer Section are not met (dual-use contracts, contracts for transport (such as here) etc.) yet where one of the parties may qualify as a consumer under substantive EU consumer protection law.

A core issue of contention is the consideration of the EU unfair terms in consumer contracts Directive 2019/2161 and its predecessor Directive 93/13 , which was applicable in Ryanair v DelayFix. Via Article 25’s lex fori prorogati rule on substantive validity for choice of court, the Directive plays an important role.

In the case at issue at the CJEU, Passenger Rights, now DelayFix, a company specialised in the recovery of air passengers’ claims under the EU Regulation on air passenger rights, has requested the courts at Warsaw to order Ryanair,  to pay EUR 250 in compensation, a passenger on the relevant flight having assigned DelayFix their claim with respect to that airline.

The CJEU first of all looks at the issue from the limited extent of what is actually materially regulated by A25: the requirement of ‘consent’ (as well as the formal expression of that consent. It holds, not surprisingly, that in principle of course a jurisdiction clause incorporated in a contract may produce effects only in the relations between the parties who have given their agreement to the conclusion of that contract (referring ex multi to Refcomp).  In the case at issue,  a jurisdiction clause incorporated in the contract of carriage between a passenger and that airline cannot, in principle, be enforced by the latter against a collection agency to which the passenger has assigned the claim.

However, at 47, there is a gateway for the choice of court nevertheless to extend to third parties, namely when the third party not privy to the original contract had succeeded to an original contracting party’s rights and obligations, in accordance with national substantive law. At 49, referring to A25(1), that law is the lex fori prorogati. Here: Irish law.

Recital 20 BIa in fact instructs to include the lex fori prorogati’s conflict of laws rules (in other words: an instruction for renvoi) to be part of the referral. In the aforementioned Belgian SC ruling in Happy Flights, renvoi was simply ignored. Here, the CJEU does not mention renvoi, even if it does not expressly exclude it.

The CJEU does point out that Directive 93/13 on unfair terms in consumer contracts of course is part of the Irish lex fori prorogati, as it is of all the Member States. In making that reference it would seem to have answered in the negative the question whether the ‘consent’ provisions of that Directive have not been superseded in the context of the ‘consent’ requirements of Article 25 Brussels Ia, as recently discussed obiter in Weco Projects.

Per previous case-law, the capacity of the parties to the original agreement at issue is relevant for the application of the Directive, not the parties to the dispute.  Further, a jurisdiction clause, incorporated in a contract between a consumer and a seller or supplier, that was not subject to an individual negotiation and which confers exclusive jurisdiction to the courts in whose territory that seller or supplier is based, must be considered as unfair under Article 3(1) of Directive 93/13 if, contrary to requirement of good faith, it causes significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. Reference is made in particular to Joined Cases C‑240/98 to C‑244/98 Océano Grupo (at 58).

It will be up to the national courts seised of a dispute, here: the Polish courts, to draw legal conclusions from the potential unfairness of such a clause (at 61). DelayFix therefore are not quite yet home and dry.

Geert.

European Private International Law, 3rd ed. February 2021, Chapter 2, para 2.240.

KCA Deutag throws contractual commitment not to oppose into the scheme of arrangement jurisdictional mix.

KCA Deutag UK Finance PLC, Re (In the Matter of the Companies Act 2006) [2020] EWHC 2977 (Ch) is in most part a classic scheme of arrangement sanctioning hearing, with the scheme proposed by a UK-incorporated company with COMI undisputedly there, too. See a range of posts on the blog for the classic jurisdictional analysis.

What is slightly out of the ordinary is the contractual commitment by the creditors not to oppose the scheme in foreign jurisdictions.  Snowden J, at 33:

In this case, two things give me that comfort. The first is that there was an overwhelming vote by Scheme Creditors in favour, and a very large number of such creditors entered into a lock-up agreement which bound them contractually to support the Scheme and not to do anything to undermine it. It is very difficult to see how such creditors who contractually agreed to support the Scheme and/or who voted in favour could possibly be allowed to take action contrary to the Scheme in any foreign jurisdiction, and the number and financial interests of those who did not vote in favour is comparatively very small indeed. That alone is sufficient to demonstrate to me that the Scheme is likely to have a substantial international effect and that I would not be acting in vain if I were to sanction it.

I would intuitively have felt quite the opposite, although detail is lacking (e.g. was the commitment given as a blank cheque before the details of the scheme were known): such contractual commitment even if valid under (presumably; no details are given) English law as the lex contractus of the commitment, could serve to undermine international effectiveness. For I would not be surprised if creative counsel on the continent could find a range of laws of lois de police or ordre public character, to try and object to contractual commitment to sign away the right to oppose.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5. Third edition forthcoming February 2021.

Napag Trading v Gedi. A right Italian tussle on libel over the internet, leads to jurisdictional dismissal on good arguable case grounds.

Napag Trading Ltd & Ors v Gedi Gruppo Editoriale SPA & Anor [2020] EWHC 3034 (QB) engages (and refers to) the issues I previously reported on in inter alia Bolagsupplysningen, Saïd v L’Express,

It is worthwhile to list both claimants and defendants.

On the claimants side, Napag Trading Limited (“the First Claimant”) is an English-domiciled company. Napag Italia Srl (“the Third Claimant”) is an Italian-domiciled subsidiary of the First Claimant. Sgr Francesco Mazzagatti (“the Second Claimant”), an Italian national with his main residence in Dubai, is the CEO and sole director of, and 95% shareholder in, the First Claimant. The First Claimant trades, and the Third Claimant has traded, in petroleum-based products.

On the defendants side, Gedi Gruppo Editoriale S.p.A. (“the First Defendant”) is the publisher amongst other things of L’Espresso which is a weekly Italian-language political and cultural magazine available both in print and online in England and Wales. Società Editoriale Il Fatto S.p.A. (“the Second Defendant”) is the publisher of Il Fatto Quotidiano (“Il Fatto”), a daily Italian-language newspaper published in England and Wales only on the internet.

An earlier Brexit-anticipatory forum non conveniens challenge was waived away by Jay J at 7: ‘Only the Second Defendant saw fit to raise a forum non conveniens challenge in advance of 1st January 2021 and the relevant EU regulation no longer applying. I would have been very reluctant to rule on this sort of application on an anticipatory basis.’

Identifying a centre of interest in England and Wales, leading to full jurisdiction there for damages, per CJEU e-Date and Bolagsupplysningen and also a precondition to apply for injunctive relief (see also Bolagsupplysningen: only courts with full jurisdiction may issue such relief) is of course a factual assessment.

The Second Claimant is an entrepreneur, born in Calabria but now living in Dubai. He founded the Third Claimant in 2012. Initially, it traded in oil and petroleum products from offices in Rome. The Third Claimant dealt in particular with the Italian oil company Eni S.p.A. (“Eni”), headquartered in Rome and in part state-owned, and Eni Trading & Shipping S.p.A. (“Ets”) which is based in Rome and has a branch in London. Second Claimant incorporated the First Claimant in April 2018. His evidence is that London was a better base from which to conduct and grow his business because he was encountering resistance from some banks and financial institutions who were diffident about working with an Italian company. More specifically, the strategy was to hive off the Third Claimant’s oil and gas business into the First Claimant, and the former would devote itself to trading in petrochemicals. Additionally, the idea was to invest in an “upstream” development in the UK Continental shelf, and the first discussions about this were in November 2018.

Justice Jay revisits the CJEU’s instructions re centre of interests for natural persons per e-Date. At 29:

First, other things being equal, and certainly in the absence of evidence to the contrary, a natural person’s “centre of interests” will match his or her habitual residence. Whether or not this may accurately be described as an evidential presumption does not I think matter (in my view, no legal presumption is generated); in any case, the CJEU – subject to my second point – is not purporting to assist national courts as to the rules of law that should govern the exercise of ascertainment. Secondly, general considerations of predictability and the need for clarity militate in favour of straightforward and readily accessible criteria rather than any microscopic examination of the detail.

At 32 follows an interesting discussion of para 43 of the CJEU Bolagsupplysningen judgment

“43. It is also appropriate to point out that, in circumstances where it is not clear from the evidence that the court must consider at the stage when it assesses whether it has jurisdiction that the economic activity of the relevant legal person is carried out mainly in a certain member state, so that the centre of interests of the legal person which is claiming to be the victim of an infringement of its personality rights cannot be identified, that person cannot benefit from the right to sue the alleged perpetrator of the infringement pursuant to article 7(2) of Regulation No 1215/2012 for the entirety of the compensation on the basis of the place where the damage occurred.”

After a reference to what Justice Jay calls Bobek AG’s ‘masterly opinion’, in particular the burden of proof issues are discussed which Jay J justifiably holds are not within the scope of Brussels Ia (not at least in the sense of deciding the procedural moment at which proof must be furnished). I agree with his finding that the CJEU’s meaning of para 43 is simply that

in the event that the national court concluded that it could not identify the “centre of interests” because the evidence was unclear, article 7(2) of the RBR could not avail the claimant.

Conclusion of the factual consideration follows (probably obiter: see 150) at 161: first Claimant has the better of the argument that its “centre of interests” is in England and Wales.

Jay J then discusses at 35 ff that whether there actually is damage within E&W as a matter of domestic law to decide to good arguable case standard, that the case may go ahead. That discussion shows that  the actual concept of ‘damage’ within the meaning of Brussels Ia and indeed Rome II is not quite so established as might be hoped, and it is held at 141 that no serious damage has occurred within E&W for there to be jurisdiction.

The case is a good illustration of the hurdle which national rules of civil procedure continue to form despite jurisdictional harmonisation under EU private international law rules.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.

Third ed. forthcoming February 2021.

 

The CJEU in Ellmes Property Services. Forum contractus in the case of real estate co-ownership with echoes of De Bloos.

The CJEU held yesterday in C‑433/19 Ellmes Property Services.

On the application of Article 24(1) Brussels Ia rights in rem it confirms Szpunar AG’s Opinion which I discussed here: the erga omnes charachter or not of the rights relied upon needs to be confirmed by the referring court for A24(1) to be engaged.

I suggested the forum contractus analysis was the more exciting one. The Advocate General advised it be determined by the Italian judge following the conflicts method per CJEU 12/76 Tessili v Dunlop, with little help from European harmonisation seeing i.a. as the initial co-ownership agreement dates back to 1978.

The Court held at 39 that the fact that a downstream co-owner was not a party to the co-ownership agreement concluded by the initial co-owners has no effect on there being a contract per A71(a)  BIa, per Ordre des avocats du barreau de Dinant and Kerr

Unlike the AG, however, the CJEU does not hold that the Tessili Dunlop looking over the fence test is required. It comes seemingly uncomplicated to the conclusion of the locus rei sitae as the forum contractus. At 44, yet linking it to the intention of the contractual obligations:

It seems that that obligation is thus intended to ensure the peaceful enjoyment of the property subject to co-ownership by the owner of that property. Subject to verification by the referring court, that obligation relates to the actual use of such property and must be performed in the place in which it is situated.

This may however harbour more uncertainty than first meets the eye. The CJEU here seems to suggest the original contractually designed ‘peaceful enjoyment by the owner’ , which indicates the contractual performance as being one of ‘actual use’ as determining the forum contractus.  A claim relating to a more immaterial use of the property, such as arguably letting the property for financial gain, or indeed an intention to divest the property, would in this perception not necessarily be linked to the locus rei sitae – which brings one back to the discussion entertained by the AG: depending on who brings which claim and how that claim is formulated (an echo from De Bloos, whose usefulness is currently sub judice in Wikingerhof), forum contractus will vary.

Geert.

(Handbook of) EU Private International Law, Chapter 2, Heading 2.2.6.1 (cited by the AG) and Heading 2.2.11.1.

(Third edition forthcoming February 2021).

Troke v Amgen. On lex causae for interest and the procedural exception of Rome II.

Troke & Anor v Amgen Seguros Generales Compania De Seguros Y Reaseguros SAU (Formerly RACC Seguros Compania De Seguros Y Resaseguros SA) [2020] EWHC 2976 (QB) is an appeal against a decision of the country court at Plymouth. It has a case-name almost as long as the name of some Welsh villages (that’s an observation, I mean no disrespect. I live in a country which has villages names such as Erps-Kwerps; but I stray).

For brevity’s sake I suspect it is best shortened to Troke v Amgen. The case involves only the rate of interest awarded on what were otherwise agreed awards of damages against the defendant insurer  to the  claimant, victims of a road traffic accident in Spain.

Spanish law is lex causae. Rome II like Rome I excludes “evidence and procedure…”. The extent of this exception is not settled as I have discussed before. Of particular recurring interest is its relation with Article 15 ‘scope of the law applicable’ which reads in relevant part for the case

 “15. The law applicable to non-contractual obligations under this Regulation shall govern in particular: (a) the basis and extent of liability… (…) (c) the existence, the nature and the assessment of damage or the remedy claimed; (d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;”

Griffiths J refers in particular to Actavis v Ely Lilly and to KMG v Chen, and at 45 holds obiter that were the interest a contractual right, it would clearly not be covered by Rome I’s exclusion for procedural issues seeing as it would then clearly amount to a substantive right under the contract.

At play here however is Rome II. Griffiths J first refers to a number of inconclusive precedent on the interest issue under various foreign applicable laws, to then note at 65 ff that the judge in the county court whose findings are being appealed, was informed in the expert reports that the interest sought under Spanish law were not mandatory ones but rather discretionary ones: the terminology used in the expert report which determined that decision was ‘contemplates’.

This leads Griffiths J to conclude ‘I reject the argument that the Expert Report was describing a substantive as opposed to a procedural right to interest. It follows that the Judge was right not to apply the Spanish rates as a matter of substantive right to be governed by the lex causae.’

This is most odd. It could surely be argued that a discretionary substantive right is still a substantive right, and not a procedural incident. Whether the right is mandatory or discretionary does not in my view impact on its qualification as being substance or procedure.

The judge’s findings

It follows that I agree with the Judge that the award of interest in this case was a procedural matter excluded from Rome II by Article 1(3); that there was no substantive right to interest at Spanish rates to be awarded to the Claimants under the lex causae; that interest could be awarded under section 69 of the County Courts Act 1984 as a procedural matter in accordance with the law of England and Wales as the lex fori; and that he was entitled to award interest at English and not Spanish rates accordingly.

in my view surely therefore most be appealable.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.8.

Third edition forthcoming February 2021.