Guistra v Twitter. The BC Supreme Court on suing Twitter for libel in Canada, and rejecting forum non with enforcement elephants in the room.

A post I started writing on 14 December 2021 so it’s about time I’ld finish it. In  Guistra v Twitter 2021 BCCA 466 (the case echoes Haaretz in Ontario) the Supreme Court of British Columbia with  Grauer J delivering the unanimous opinion, upheld jurisdiction for the BC courts on the basis of the claim pointing to a tort having been committed in BC, BC therefore being locus delicti commissi. The Court held that damage in the jurisdiction, locus damni, needs then not separately be argued.

Mr. Giustra, a British Columbia resident, alleges that Twitter published tweets that defamed him in British Columbia, as well as elsewhere.  Twitter asserts nota bene that, in law, it cannot properly be considered a “publisher” of tweets that were authored and posted on its platform by its users. That issue is deferred for the merits of the claim: at the jurisdiction level, the pleading is what is important: compare with the situation under Brussels Ia.

A forum non conveniens challenge in favour of the courts at California was rejected, where reference was made ia to Google v Equustek. There is an elephant in the room here, so identified, namely that a claim in California is doomed to fail on free speech grounds, and that an eventual Canadian judgment is doomed to be unenforceable at least in the US.

A good judgment for comparative purposes.

Geert.

Kumlin v Jonsonn. Judge dismisses jurisdiction for most of Swedish businessman’s libel claim, defusing what is said to be a SLAPP suit.

Kumlin & Anor v Jonsson & Ors [2022] EWHC 1095 (QB) disciplines forum shopping, in this case libel tourism, in a claim that is considered a SLAPP: a Strategic Lawsuit against public participation.

First Claimant is an entrepreneur, businessman and investor in sustainable and ethical business ventures, resident in Monaco, with business interests in the UK including in the Second Claimant, of which he is the founder, Chairman and Chief Executive Officer. He is a Swedish citizen. Second Claimant is a public limited company registered in England and Wales. Claimants’ case is that between 29 September 2020 and 2 November 2020 the Defendants, or some of them, all of whom are Swedish, published or caused to be published on the Website eight articles concerning the Claimants. There was further publication via Facebook, Twitter, etc, where links to the Articles were posted. 

The Articles are in Swedish. Knowles J [30] advances the reasoning, proposed by defendants, that jurisdiction under any of the gateways as a result of A4 BIa, locus damni or locus delicti commissi (A7(2) BIa per CJEU Bier and Shevill), or centre of interests (A7(2) BIa, per CJEU eDate and Bolagsupplysningen) only exist to the degree the case is actually actionable in those cases which, he submits, requires reference to the domestic laws of those Member States (e.g. a minimum ‘publication’ threshold). I believe this is incorrect: jurisdiction and actionability are not the same. While lex fori on threshold issues will have an immediate impact on the practical reality of a claim, it does not stand in the way of principled jurisdiction under BIa, which exists without reference to national laws.

The judge refers to much CJEU and E&W authority, all of it discussed on this blog, most recently the Court of Appeal in Mincione.

Knowles J’s discussion eg [69] ff of the intensity of publication etc required, under residual double actionability rules, in my view is a threshold question and not, as it is presented, a jurisdictional, gateway question, albeit the analysis in this section is mixed with justifiable discussion of direct v indirect damage under the CJEU Marinari rule. The judgment is much more extensive on this point than it could have been in my opinion.

[224] it is concluded that on the centre of interest issue, which is relevant for the natural person claimant only, his centre of interests is Monaco, where he is habitually resident. That is a factual assessment which is unlikely to be material for an appeal.

Geert.

EU private international law, 3rd ed. 2021, 2.439 ff.

The Prestige litigation before the CJEU. A tricky Opinion on court-sanctioned arbitral awards as judgments under Brussels Ia.

I give background to Collins AG’s Opinion in C-700/20 The London Steam-Ship Owners’ Mutual Insurance Association Limited v Kingdom of  Spain here. The Court of Appeal nota bene in the meantime has held that the High Court should have never referred, as I report here.

Does an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

The case at issue in essence enquires how far the arbitration exception of Brussels Ia stretches. Does the arbitration DNA of the case once and for all means any subsequent involvement of the courts is likewise not covered by Brussels Ia (meaning for instance that it must not have an impact on the decision to recognise and enforce an incompatible judgment issued by another Member State in the case); or should the  involvement of the courts in ordinary be judged independently against the Regulation’s definition of ‘judgment’.

The case therefore echoes the High Court’s later intervention in the infamous West Tankers case, and the recent CJEU judgment in C-568/20 J v H Limited (on third country judgments).

(44) the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG suggests a broad scope of the exclusion, seeking support in the Jenard and Schlosser Reports. He also confirms the exclusion of arbitration has the effect, in particular, of making it impossible to use that regulation to enforce an arbitral award in another Member State by first turning it into a judgment and then asking the courts of the other Member State to enforce that judgment under Chapter III.

However, in the case at issue he suggests the proceedings are not caught by the arbitration exception, for 3 reasons:

(53) the notion of ‘judgment’ needs to be interpreted broadly;

(54) CJEU Solo Kleinmotoren instructs that for a finding to be a ‘judgment’,  ‘the decision must emanate from a judicial body of a Contracting State deciding on its own authority on the issues between the parties’;  that is the case here for (55) the S66 court does not rubberstamp; it discusses and settles a range of substantive issues between the parties;

(57) there is no requirement that a court must determine all of the substantive elements of a dispute in order to deliver a judgment that satisfies the purposes of that provision; reference here is made to CJEU C-394/07 Gambazzi (see the Handbook 2.576).

In the view of the AG (62) A1(2) is not determinative as to whether a judgment under the recognition and enforcement Title comes within the scope of the Regulation. Those provisions, he suggest, were enacted for different purposes and pursue different objectives: they aim to protect the integrity of a Member State’s internal legal order and to ensure that its rule of law is not disturbed by being required to recognise a foreign judgment that is incompatible with a decision of its own courts. A1(2) on the other hand is firmly part of the free movement of judgments rationale of the Regulation (and limitations thereto).

I think the CJEU judgment could go either way and if I were a betting man (which I am not) I suspect the Court will not follow and instead will take the same holistic approach towards protecting the application of Brussels Ia by the courts in ordinary, as it did in CJEU West Tankers. By the very nature of s66 (and similar actions in other Member States), the ‘issues between the parties’ are different in actions taking place entirely in courts in ordinary, and those in arbitration awards which are subsequently sanctioned (in the sense of ‘approved’) by a court. The latter proceedings do not discuss ‘the issues’ between the parties. They only engage a narrow set of checks and balances to  ensure the soundness of the arbitration process.

Neither do I follow the logic (63) that if the UK were not allowed to take account of the s66 judgment in its decision to recognise, it would mean that Member States would have to ignore all internal judgments with res judicata in an excluded area, including insolvency, social security etc., in favour of other Member States judgments ‘adjudicating upon the same issue’ (63): if they truly adjudicate upon ‘the same issue’, the judgment of the other Member State will be exempt from Brussels Ia. This is unlike the case at hand which clearly did involve a Spanish judgment on a subject matter covered by the Regulation. The arbitration exemption is the only exemption that relates to a modus operandi of conflict resolution: all the others relate to substantive issues in conflict resolution.

Commercial arbitration enjoys a peculiar privilege in the CJEU’s view on ADR (see CJEU Komstroy). I do not think however the Court will give it a forum shopping boost in the context of Brussels Ia.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

 

The CJEU confirms a corporation’s general duty of care is not caught by the corporate carve-out. Judgment in ZK v BMA (Peeters Gatzen suit) impacts on business and human rights litigation, too.

The CJEU a little while back held in C‑498/20 ZK v BMA on the applicable law for the Dutch ‘Peeters Gatzen’ suit, for which I reviewed the AG Opinion here. The suit is  a tortious suit brought by a liquidator. In Nk v BNP Paribas the CJEU held at the jurisdictional level it is covered by Brussels Ia, not by the Insolvency Regulation.

A first issue of note, which I discuss at some length in my earlier post, is whether the liability is carved-out from Rome II as a result of the lex societatis provision. The CJEU confirms the AG’s contextual analysis, without repeating his general criterion, emphasises the need for restrictive interpretation, and specifically for the duty of care holds that liability resulting from a duty of care of a corporation’s bodies and the outside world, is covered by Rome II. This is important for business and human rights litigation, too: [55]

Pour ce qui concerne spécifiquement le manquement au devoir de diligence en cause au principal, il convient de distinguer selon qu’il s’agit du devoir spécifique de diligence découlant de la relation entre l’organe et la société, qui ne relève pas du champ d’application matériel du règlement Rome II, ou du devoir général de diligence  erga omnes, qui en relève. Il appartient à la seule juridiction de renvoi de l’apprécier.

The referring judge will have to decide whether the case engages the duty of care vis-a-vis the wider community (including the collectivity of creditors) however it would seem most likely that it does. If it does, locus damni is held, confirming the AG view, to be The Netherlands if the referring judge finds that the insolvent corporation’s seat is based there. The financial damage with the creditors is indirect only and does not establish jurisdiction.

[44] Should a judge decide that they do not have jurisdiction over the main claim, they also and necessarily have to relinquish jurisdiction over the warranty /guarantee claim against a third party under A8(2) BIa. CJEU Sovag is referred to in support.

Geert.

Pal v Damen. A haywire engagement with the consumer, contract section of Brussels Ia.

Pal v Damen & Anor [2022] EWHC 4697 (QB) is another application (compare Clarke v Kalecinski) of Brussels Ia’s consumer section to cosmetic surgery contracts. Respectfully, the analysis is a botched job.

Claims are both in contract and in tort, as is usual in this type of litigation. Jurisdiction on the basis of the consumer title against the Belgium-based surgeon is undisputed, as is the lack of jurisdiction under Article 7(2)’s tort gateway against the clinic where the surgery was performed, locus damni (direct damage, CJEU Marinari) and locus delicti commissi both being in Belgium. The core question is whether there is a contract between surgeon and /or the clinic and the patient, and whether this is a consumer contract.

The second question needs to be determined first. The clinic essentially provides the hardware for the surgeon, but also ensures patient flow via its website http://www.wellnesskliniek.com which without a doubt meets with the  CJEU Pammer /Alpenhof criteria and therefore ‘directs its activities’ towards the UK. Its general terms and conditions, of which it is somewhat disputed that claimant ticked the relevant box, state ia that the clinic ‘is not party to the treatment agreement between the physician and the patient.’ 

The  expert evidence [25] ff centres around Belgian law. Expert for one of the defendants is their Belgian counsel, and Cook M dismisses his report [55] as not meeting relevant CPR requirements on expert evidence. On the basis of the remaining evidence, the judge finds [59]

the Claimant has established a good arguable case for the existence of a contract for medical treatment and /or medical services between her and the Surgeon and accordingly this Court has jurisdiction over that claim. The Claimant has failed to establish a good arguable case for the existence of a contract for medical treatment and /or medical services against the Clinic and accordingly the Court does not have jurisdiction over that claim.

With respect, the direction of analysis is entirely wrong. The first line of enquiry should have been whether there is a consumer contract with either or both of the Belgian parties, and if there is with one, whether the other party could have been caught in its jurisdictional slipstream. Á la Bonnie Lackey but then in the opposite direction: in Bonnie Lackey the question was whether persons in the immediate orbit of the undisputed ‘consumer’-claimant, may also sue under the consumer title. In current case, the question would be whether those in the immediate vicinity of the business-defendant, may be sued under the consumer title. The existence of a consumer contract is entirely an EU law question, not a Belgian law one.

Next, if the decision were taken that at least one of the parties is not caught by the consumer title, the existence of a ‘contract’ (for the provision of ‘services’) under Article 7(1) would be triggered, as would the forum contractus under Article 7(1)a, with an analysis of where the services were or should have been provided. This, too, is an analysis that requires EU law and EU law alone. [There is no trace in the judgment of a choice of court and /or law which for the former per A25 Brussels Ia may require Belgian law, with renvoi, a lex fori prorogati but even then only for the material ‘consent’ issue].

Belgian law does not come into this analysis at all, unless, potentially and most unlikely, one argues that the A7(1) analysis requires the conflicts method, should a contract for medical services not be caught by Article 7(1)’s ‘provision of services’: in that case, Rome I’s decision tree would be required to determine lex contractus and place of performance. Even then however it is not at all certain that Belgian law would be the outcome of Rome I’s matrix.

Geert.

EU Private International Law, 3rd ed. 2021, 2.222 ff, 2.385 ff.

Galapagos Bidco v DE. The CJEU fails to clarify whether move of COMI by mere market notice, may be effective.

Krzysztof Pacula reported end of March on CJEU C-723/20 Galapagos Bidco v DE and justifiably highlighted the Brexit issue. The case concerns a move of COMI – centre of main interest within the context of the Insolvency Regulation 2015/848 and it is on the element of impromptu move that my post will focus.

Galapagos SA is a Luxembourg holding company whose centre of administration (‘effective place of management‘ according to the former directors) was moved in June 2019, at least so contend previous directors, to England. At the end of August 2019, they apply to the High Court in England and Wales to have insolvency proceedings opened.

Echos of the tussle are here and of course also in Galapagos Bidco SARL v Kebekus & ors [2021] EWHC 68 (Ch). The day after the move of centre of administration, the former directors were replaced with one other, who moved centre of administration to Dusseldorf and issued relevant market regulation statements to that effect. This move was subsequently recognised  by the Courts at Dusseldorf as having established COMI there. The High Court action in London was never withdrawn and would seem to have been dormant since.

Applicant in the proceedings is Galapagos BIDCO Sarl, a creditor of Galapagos SA. It is I understand (but I am happy to be corrected by those in the know) Luxembourg based. As Krzysztof reports, it contests that the German move has effected move of COMI which it argues lies in England (although I fail to see how its reasoning should not also apply to the earlier instant move from presumably Luxembourg to England).

The question that arises is whether, in the determination of the centre of a debtor company’s main interests, specific requirements must be imposed to prevent abusive conduct. Specifically, in the light of the Regulation’s stated aim of preventing forum shopping, whether ‘on a regular basis’ in the second sentence of the first subparagraph of Article 3(1) Insolvency Regulation 2015, presupposes an adequate degree of permanence and is not present if the establishment of a centre of administration is pursued at the same time as a request to have insolvency proceedings opened. Respondents in the appeal, which include the insolvency administrator (trustee) contend that the requirement of administration ‘on a regular basis’ is fulfilled if the administration is permanent.

The CJEU unfortunately fails to answer that question, choosing to reply instead with a hierarchical answer which encourages race to court: [36]

the court of a Member State with which a request to open main insolvency proceedings has been lodged retains exclusive jurisdiction to open such proceedings where the centre of the debtor’s main interests is moved to another Member State after that request is lodged, but before that court has delivered a decision on that request, and that, consequently, where a request is lodged subsequently for the same purpose before a court of another Member State, that court cannot, in principle, declare that it has jurisdiction to open such proceedings until the first court has delivered its decision and declined jurisdiction.

However in the case at issue, the Withdrawal Agreement has the effect that if the High Court has not, as it would seem, taken its decision on the opening of proceedings prior to the end of Brexit Implementation Day 1 January 2021 (CET), the German courts need no longer apply that consequence of mutual trust and are at liberty to determine the existence of COMI.

The CJEU ends by suggesting Q1 no longer needs answering. Yet I think it does. Perhaps not so much for the case at issue (which explains why the judicially economical CJEU does not offer a reply). The German courts, as Zacaroli J notes in his decision [14], held in October 2019 that COMI for GAS has successfully moved to Germany as from 25 August 2019, the day the capital market and bondholders were informed that the centre of administration had been moved to Düsseldorf. Yet the file does not suggest that COMI prior to the attempted move, existed in Germany: it was established there following the new director’s decision. In accordance with the Regulation’s presumptions, it would have previously existed in Luxembourg. The element of ‘on a regular basis’ therefore still matters. Is the CJEU suggesting that a mere information of the capital markets suffices to move COMI?

Geert.

EU Private International Law, 3rd ed. 2021, Heading 5.6.1.

 

Abu Dhabi Commercial Bank v Shetty. Rome II applicable law for fraud, misrepresentation, instructs forum non conveniens stay.

Abu Dhabi Commercial Bank Pjsc v Shetty & Ors [2022] EWHC 529 (Comm) engages Rome II by way of the applicable law to the claim playing a role in the forum non conveniens challenge. (Compare BRG Noal v Kowski for a similar discussion under Rome I). The case confirms the importance of retained Rome I and II discussion. The stage is set at [7]

at the heart of the jurisdiction challenge is an assertion that England is manifestly not the most suitable forum for the resolution of this dispute which all defendants maintain should be resolved by the UAE courts. Unsurprisingly, ADCB places significant reliance for its case that England is the most suitable forum for resolution of this dispute on the fact that Plc was a FTSE 100 quoted company, that the contracts by which the two most important of the Core Facilities were given contractual effect (the Syndicated Facility Agreement and the Club Facility Agreement) were drafted and completed in London by a prominent London law firm and were subject to London arbitration clauses and on its contention that England is the governing law of the dispute. Equally unsurprisingly the defendants emphasise that Plc was a holding company that carried on no active business activity, that the activity in London was essentially administrative in nature, that the lending which it is alleged lies at the heart of the scheme was lending by ADCB (a UAE registered entity trading in the UAE) to entities within the Group including principally Healthcare, all of which were based elsewhere than England and Wales. They maintain that if what is alleged is true then this was from first to last a conspiracy that was conceived and carried into effect in the UAE. They maintain that the governing law is beyond argument UAE law.

I shall limit the post to the Rome II element: Pelling J discusses this [64] ff, with the core element [68-69]:

the damage occurred when a UAE based company drew down against or otherwise benefitted from the Core Facilities offered by a UAE based bank. …ADCB … ultimately acted upon the representations in Abu Dhabi, from where the relevant loan funds were drawn down by NMC Healthcare“.

In the case of a misrepresentation or fraud, the locus damni is held to be the place where that misrepresentation is acted upon. UAE law as lex causae is in fact also and primarily confirmed by A4(2) Rome II: joint place of habitual residence, held [71] to be the UAE. Application of the A4(3) escape clause is dismissed [77], and a passing reference to a potential for A12 Rome II’s culpa in contrahendo leading to English law as the lex contractus, is summarily dismissed [78].

A stay is granted.

Geert.

Chep Equipment. Brussels Ia’s forum prorogati (with renvoi) rule once again does not make the cut.

In Chep Equipment Pooling BV v ITS Ltd & Ors [2022] EWHC 741 (Comm), Salter DJ untangles a myriad of jurisdictional gateways, partially tortious (with reference to UKSC Brownlie, and to CJEU Bier etc where relevant), partially contractual and subject to choice of court. A forum non challenge is rejected.

The choice of court discussion is interesting in particular for at 48 the judge mixes the forum prorogati rule of Article 25 BIa juncto its recital 20. One of the defendants claims the privilege of an A25 choice of court to establish compulsory Belgian jurisdiction. The judge notes that the agreement of which the clause is part, is governed by Belgian law and

The Audit Agreement, although in the English language, is governed by Belgian law. Rightly, neither party had tendered evidence of the principles of interpretation of jurisdiction clauses under Belgian law. At this stage of the proceedings, reliance on the presumption of similarity with English law is sufficient: see Brownlie (supra) at [157], per Lord Leggatt. In those circumstances, I must simply apply to this provision the principles of interpretation articulated in Fiona Trust and Holding Corpn v Privalov [2007] UKHL 40[2007] Bus LR 1719.

This is a touch incorrectly formulated. Per BIa, the existence of consent and its expression are governed by A25, not by reference to any national law. The validity of consent by contrast does rely on national law however it is not the lex contractus of the underlying agreement which is relevant but rather the lex fori prorogati (also Belgian law), with renvoi. The judge in my view cannot rely on English law to judge the validity of choice of court at good arguable case level: once jurisdiction settled, it will not be allowed to be revisited. Even at this stage, therefore, per BIa the enquiry arguably must be made under Belgian law. Whether there was actually any suggestion that under Belgian (and subject to renvoi) law consent may not have been given, is not clear from the judgment.

Claimants tried to argue that the claim does not arise ‘out of or in connection with’ the Audit Agreement that contains choice of court however the judge disagrees. This part of the claim therefore must be litigated in Belgium (and an A8(1) anchor would of course not assist to keep the proceedings in England).

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.4.

Samsung Electronics. A forum non conveniens assessment of claims re the settlement of follow-on competition law damages, closes with a PS on transparency in EU antitrust findings..

Samsung Electronics Co. Ltd & Ors v LG Display Co Ltd & Anor [2022] EWCA Civ 423 concerns follow-on damages claimed against non-EU based defendants. The European Commission had earlier found the existence of a cartel. The Court of Appeal confirms the refusal of service out of the jurisdiction on forum non conveniens grounds, holding, like the first instance judge, that England & Wales are clearly not the appropriate forum (Taiwan and /or South Korea are).

I report the case for it contains an interesting Ps on the confidentiality of the EC finding: Males LJ:

The parties were united in urging upon us that the Commission Decision is confidential and that reference to its recitals should not be made in open court. I have to say that, as a general proposition, this seems paradoxical. I find it hard to see how a Decision can at the same time be both confidential and binding in public follow-on proceedings. To that extent it appears that any requirement of confidentiality may be in tension with the fundamental constitutional principle of open justice. Moreover, this particular Commission Decision deals with events which are now in the distant past and has been extensively litigated in the years since it was made. It is hard to think that there is any real confidentiality left.

Nevertheless I have been careful to confine my citation from the Decision to what is necessary to explain the submissions made to us and the conclusions which I have reached. I have referred only to recitals which were alleged to explain and support the operative part of the Decision (cf. Emerald Supplies Ltd v British Airways Plc [2015] EWCA Civ, [2016] Bus LR 145 at [68]) and have omitted any reference to other participants in the cartel who were not represented before us.

This invites interesting reflections on the principles of open justice in EU competition law findings – a discussion I shall leave to others.

Geert.

CJEU holds EU flight Regulation abides by customary international law in extending its reach to flights partially carried out outside the EU.

A brief post on the judgment of the CJEU in C-561/20 United Airlines. The CJEU held that the EU flight delay compensation rules of Regulation 261/2004 apply to a flight operated by non-EU airline on behalf of EU airline, even when  the delay relates to flight segment outside the EU. On the issue of international jurisdiction, the Court engages with customary international law questions, referring ia to its C-366/10 ATAA judgment which I discussed here.

The CJEU firstly [51] repeats that since

a principle of customary international law does not have the same degree of precision as a provision of an international agreement, judicial review must necessarily be limited to the question whether, in adopting the act in question, the institutions of the European Union made manifest errors of assessment concerning the conditions for applying such a principle

I do not think its poor view on the lucidity of customary international law is justified, however its finding that only manifest errors may lead to illegality does of course mean the CJEU does not have to worry about all the nuts and bolts of territorial jurisdiction. It suffices [52] that there is a close connection with the territory of the EU since the Regulation specifies that connecting flights fall within the scope of that regulation on the ground that the passengers have started their journey from an airport located in a Member State. [53]:

The regulation applies to a long delay caused in a leg of a flight operated in a third country only in limited and clearly defined circumstances in which the flight concerned, taken as a whole, is operated from an airport located in the territory of a Member State. Such a flight and its passengers thus retain a close connection with the territory of the European Union, including for the leg of the flight operated outside the European Union.

Flights which are wholly operated in a third country or between two third countries, without any connection with EU territory [55].

Geert.

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