I reviewed Advocate-General Bobek’s Opinion in C-304/17 Löber v Barclays here. The following issues in particular were of note (I simply list them here; see the post for full detail): First, the AG’s view, coinciding with mine, that the CJEU’s finding in CDC that locus damni for a pure economic loss, in the case of a corporation, is the place of its registered office, is at odds with precedent (he made the same remark in flyLAL). Next, on locus delicti commissi, the AG suggests that despite Article 7(2)’s instruction, a single ldc within the Member State in the case at hand cannot be determined. Further, for locus damni, I disagree for reasons explained in the post with the AG’s suggestions.
The Court held on Wednesday. At 26 it immediately cuts short any expectation of clarification on locus delicti commissi: ‘In the present case, the case in the main proceedings concerns the identification of the place where the damage occurred.’
The referring court’s questions were much wider, asking for clarification on ‘jurisdiction’ full stop. Yet the Court must have derived from the file that only locus damni was in dispute. A missed opportunity for as I noted, Bobek AG’s views on that locus delicti commissi are not obvious.
On locus damni then, I may be missing a trick here but the Court simply does not answer the referring court’s question. As the AG notes, Ms Löber in order to acquire the certificates, transferred the corresponding amounts from her current (personal) bank account located in Vienna, to two securities ‘clearing’ accounts in Graz and Salzburg. Payment was then made from those securities accounts for the certificates at issue. The Court refers to Kolassa and to Universal Music, to reiterate that the simple presence of a bank account does not suffice to establish jurisdiction: other factors are required, such as here, at 33,
‘besides the fact that Ms Löber, in connection with that transaction, had dealings only with Austrian banks, it is furthermore apparent from the order for reference that she acquired the certificates on the Austrian secondary market, that the information supplied to her concerning those certificates is that in the prospectus which relates to them as notified to the Österreichische Kontrollbank (Austrian supervisory bank) and that, on the basis of that information, she signed in Austria the contract obliging her to make the investment, which has resulted in a definitive reduction in her assets.’
The Court concludes that ‘taken as a whole, the specific circumstances of the present case contribute to attributing jurisdiction to the Austrian courts.’
That however was not seriously in doubt: the more specific question is which one: Vienna? (which had rejected jurisdiction) Graz and /or Salzburg? Article 7(2) requires identification of a specific court (which the AG had identified in his opinion: I may not follow his argumentation, but it did lead to a specific court): not merely a Member State, and the Oberster Gerichtsthof had specifically enquired about the need for centralisation of the claim in one place.
All in all a disappointing judgment which will not halt further questions on jurisdiction for prospectus liability.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 22.214.171.124.7
4 Replies to “Jurisdiction re prospectus liability. CJEU reiterates Universal Music in Löber v Barclays. Unfortunately fails to identify the exact locus damni and leaves locus delicti commissi unaddressed.”
I agree that the reasoning of the Court is disappointing and the Court seems to forget that Article 7 also identifies territorially competent courts. However, in the operative part of the judgment, the Court identifies the competent court in “the courts of that investor’s domicile” and not, like in paras 31 and 34, generally in Austrian courts. Accordingly, the Court seems to have Vienna in mind in tis reasoning. That said, considering that the two securities accounts used by Ms Löber for the investment were located in Salzburg and Graz, it seems rather difficult to conclude that the loss occurred directly in the investor’s bank account with a bank established within the jurisdiction of the investor’s domicile (Vienna) courts.
In my view, despite the vagueness of the Court’s reasoning, the competence of Vienna’s courts should be excluded. The question would then be whether Salzburg and Graz are still relevant for determination of jurisdiction under Article 7(2).
Thank you very much indeed, Nicolo! – the court could have been much clearer I believe.
I agree with Geert that the ECJ completely misunderstood the reference. The question was not about international jurisdiction, but about venue. It was therefore pointless to decide that the Austrian courts have jurisdiction, which was by all means clear anyway. Surprising also that the court simply assumed that prospectus liability falls under Art 7(2), a question it had struggled with so hard in Kolassa. But at least it got that one right now. Overall, I think we should not attribute to much importance to this case, as the drafter has ignored the text of the Regulation and the ECJ’s own case law.