Archive for category Conflict of Laws /Private international law

Sabbagh v Khoury. The Court of Appeal struggles on merits review for anchor defendants.

Sabbagh v Khoury at the High Court was the subject of a lengthy review in an earlier post. The Court of Appeal has now considered the issues at stake, in no lesser detail.

In line with my previous post (readers unfamiliar with it may want to refer to it; and to very good Hill Dickinson summary of the case), of particular consideration here is the jurisdictional test under (old) Article 6(1) Brussels I, now Article 8(1) in the Recast, in particular the extent of merits review; and whether the subject matter of the claim comes within the succession exception of Article 1(2)(a) of the Brussels I Regulation.

As for the latter, the Court, after reviewing relevant precedent and counsel argument (but not, surprisingly, the very language on this issue in the Jenard report, as I mention in my previous post) holds in my view justifiably that ‘(t)he source of the ownership is irrelevant to the nature of the claim. ..The subject matter of the dispute is not whether Sana is an heir, but whether the defendants have misappropriated her property.‘ (at 161).

With respect to the application of Article 6(1) – now 8(1), the majority held in favour of a far-reaching merits review. Lady Justice Gloster (at 166 ff) has a minority opinion on the issue and I am minded to agree with her. As she notes (at 178) the operation of a merits test within Article 6(1) does give rise to risk of irreconcilable judgments, which can be demonstrated by reference to the present facts. She successfully, in my view, distinguishes the CJEU’s findings in Kolassa and in CDC, and the discussion at any rate one would have thought, merits CJEU review.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

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A late entry on your timeline. Anas v Facebook leaves plenty of questions on internet jurisdiction.

I discussed this case with my students the day the judgment came out. Copy of the judgment has travelled with me far and wide. Yet I only now find myself getting round to posting on Anas v Facebook, at the courts at Würzburg back in February. Mr Anas came from Syria as a refugee and took a famous selfie with Frau Merkel. The photo later came to haunt him as fake news sites used it in connecting with accusations of terrorism. Mr Anas thereupon sued Facebook, requesting it to act more swiftly to remove the various content reporting on him in this matter. The Würzburg court obliged. I understand that in the meantime Mr Anas has halted further action against FB which I am assuming includes the appeal which FB must have launched.

Now, the interest for this blog lies not in the issue of fake news, but rather the jurisdictional grounds for the ruling. Mr Anas sued Facebook Ireland, not Facebook Inc. The latter, I would suggest, he might have done on the basis of the Brussels I Recast’s provisions on consumer contracts – albeit that the conditions for that title might not be fulfilled if Mr Anas became a FB user in Syria.

The court did not entertain the consumer title. It did uphold its jurisdiction on the basis of Article 7(2) of the Recast, as lex loci damni. (But without consideration of the Shevill limitation). Awkwardly, it then lest my German fails me, goes on to determine its internal jurisdiction on the basis of German civil procedure law. Plaintiff was domiciled in Berlin; not Würzburg. The judgment therefore turns into the proverbial cake and eating it: Article 7(2) does not just lay down jurisdiction for a Member State: it also identifies the very court in that MS that has jurisdiction. It cancels out internal rules of jurisdiction. With Mr Anas’ domicile in Berlin, Wurzburg as locus damni is not immediately obvious.

German speakers, if I am not reading this right please do comment.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.

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Sharia divorce and Rome III. Saugmandsgaard Øe in Sahyouni.

In Case C-372/16 Sahyouni SAUGMANDSGAARD ØE Opined Friday last (Opinion not yet available in EN at the time of writing of this post; the curia press release on the case helps). The case concerns the scope of application of Rome III, Regulation 1259/2010 (on enhanced co-operation Regulation on divorce and legal separation), as well as the application of its Article 10.  This Article inserts the lex fori for the lex causae, where the lex causae as identified by the Regulation makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex.

In the previous Sahyouni Case C‑281/15, the request was considered inadmissible for lack of factual beef to the bone to allow the Court to apply its Dzodzi case-law (Joined Cases C‑297/88 and C‑197/89). In that case, the Court had held that the authors of the Treaty did not intend to exclude from the jurisdiction of the Court requests for a preliminary ruling on a provision of EU law in the specific case where the national law of a Member State refers to the content of that provision in order to determine rules applicable to a situation which is purely internal to that State and that, on the contrary, it is manifestly in the interest of the EU legal order that, in order to forestall future differences of interpretation, every provision of EU law should be given a uniform interpretation irrespective of the circumstances in which it is to be applied.

In the case at hand, Rome III is not generally applicable to decisions on divorce and legal separation issued by the authorities of third States. German residual private international law on the matter, however, makes it so applicable.

SAUGMANDSGAARD ØE first of all opines that the national court now does give the CJEU enough information for it to rule on the case. Contrary to what the German legislature
assumed, however, the AG suggests Rome III does not cover divorces which are declared without a constitutive decision of a court or other public authority, such as a divorce resulting from the unilateral declaration of a spouse which is registered by a religious court. Note that the AG for this purpose employs lex fori in the sense of EU law (the Regulation and its preparatory works), to determine whether such divorce is ‘private’ or not; not as might be considered an alternative in the case at hand, Syrian law. Those of us with an interest in Vorfrage may find this interesting.

Next, the AG does complete the analysis should the Court disagree with his view on scope of application. The question whether access to divorce provided for by the foreign law is discriminatory (this is the test of the aforementioned Article 10) must, in the view of the AG, be assessed in the abstract, and not specifically in the light of the circumstances of the case. Therefore, it suffices that the applicable foreign law be discriminatory by virtue of its content for it to be disapplied. This AG suggests that the EU legislature considered that the discrimination at issue, namely that based on the sex of the spouse, is so serious as to warrant unqualified rejection, without the possibility of exception on a case-by-case basis, of the entirety of the law which should have been applied in the absence of such discrimination. This interpretation differs from the standard application of another well-known mechanism, that of ordre public, where any assessment needs to be based on a case-by-case basis.

Finally, the AG examines whether the fact that the spouse discriminated against
possibly consented to the divorce allows the national court not to disapply the foreign law despite its discriminatory nature, and therefore to apply that law. He suggests that question be answered in the negative. The rule set out in Article 10 of the ‘Rome III’ Regulation, which is based on compliance with values considered to be fundamental, is mandatory in nature and therefore, as a result of the intention of the EU legislature, does not fall within the sphere in which the persons at issue can freely waive the protection of their rights.

A judgment to look out for.

Geert.

 

 

 

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Expect some final turbulence. CJEU wrongfoots Ryanair and Crewlink on ‘place where the employee habitually carries out his work’.

I reported earlier on Saugmandsgaard ØE’s opinion in Cases C‑168/16 and C‑169/16, Nogueira et al and Osacar v Ryanair. The CJEU yesterday held and as I put it in immediate comment on the case reported in the FT, the Court’s view clearly resonates with the current mood against social dumping.

The case here ostensibly concerns jurisdiction only, however the Rome I Regulation includes mandatory protection of the employee guaranteed by the laws of the same place where (s)he habitually carries out his /her work. Hence a finding in the context of the Brussels I Recast inevitably has an impact on applicable law, too.

Firstly the Court has no mercy for the limiting choice of court agreement in the relevant contracts (at 53): in the case of employment contracts, a jurisdiction clause cannot apply exclusively and thus prohibit the employee from bringing proceedings before the courts which have jurisdiction under the protective regime of the Brussels I Recast.

The Court then essentially reiterates its AG: The concept of ‘place where the employee habitually carries out his work’ must be interpreted as referring to the place where, or from which, the employee in fact performs the essential part of his duties vis-à-vis his employer (at 59). Referring to its earlier case-law, the Court reiterates that national courts must, in particular, determine in which Member State is situated (i) the place from which the employee carries out his transport-related tasks, (ii) the place where he returns after his tasks, receives instructions concerning his tasks and organises his work, and (iii) the place where his work tools are to be found. (at 63). The place where the aircraft aboard which the work is habitually performed are stationed must also be taken into account (at 64).

The CJEU’s judgment then zooms in particularly on the notion of ‘home base’, a term used in relevant EU civil aviation law. The concept of ‘place where, or from which, the employee habitually performs his work’ cannot be equated with any concept referred to in another act of EU law (at 65).  However that does not mean that it is irrelevant to determine the place from which an employee habitually carries out his work. In fact, the Court held, the concept is likely to play a significant role in the identification of place of habitual employment in cases as these (at 69). In fact, taking account of the facts of each of the present cases, it would only be if applications, such as those at issue in the main proceedings, were to display closer connections with a place other than the ‘home base’ that the relevance of the latter for the identification of ‘the place from which employees habitually carry out their work’ would be undermined (at 73).

Nationality of the aircraft is summarily dismissed at 75, as being of any relevance at all.

At 62, the Court, importantly, also wars against fraudulent forum shopping: ‘That circumstantial method makes it possible not only to reflect the true nature of legal relationships, in that it must take account of all the factors which characterise the activity of the employee (see, by analogy, judgment of 15 March 2011, Koelzsch, C‑29/10, EU:C:2011:151, paragraph 48), but also to prevent a concept such as that of ‘place where, or from which, the employee habitually performs his work’ from being exploited or contributing to the achievement of circumvention strategies (see, by analogy, judgment of 27 October 2016, D’Oultremont andOthers, C‑290/15, EU:C:2016:816, paragraph 48 and the case-law cited).

The case now goes back to Mons howeer as has been reported, it is almost inconceivable for that court not to find Charleroi to be the place of habitual employment. Despite Ryanairs bravado, it is clear this judgment blows a hole in its regulatory strategy.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 2, Heading , Chapter 3, Heading 3.2.5.

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Ordre Public in Bankruptcy. The Amsterdam Court of Appeals in Yukos.

Michael Broeders and Ulrike Verboom have excellent overview of the decision back in May by the Amsterdam Court of Appeal not to recognise the Russian liquidation order of 1 August 2006 regarding OAO Yukos Oil Company. The refusal to recognise is based on ordre public: in particular, a finding was made that the Russian order contravenes the principles of due process hence also ordre public. Reference was made in extenso to decisions by the European Court of Human rights against Russia in related cases in 2011 and 2014.

Michael and Ulrike also refer to previous case-law of the Dutch Supreme Court which held that on the basis of the lex concursus (here: Russian), there is no principled objection to the Russian trustee in bankruptcy to exercise his powers as such trustee in The Netherlands.

Geert.

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De IPR-kwalificatie van pauliana-achtige aansprakelijkheid: welk label voor Peeters/Gatzen (“collectieve schade”)?

Yummie: Dutch High Court asks the European Court of Justice for assistance in qualifying anti-avoidance /fraudulent conveyance mechanisms. (Guest blog in Dutch).

Corporate Finance Lab

De Nederlandse Hoge Raad stelde op 8 september het Europese Hof van Justitie enkele interessante prejudiciële vragen over de Peeters/Gatzen-vordering (ECLI:NL:HR:2017:2269). Voor hen die er het raden naar hebben wie die Peeters of Gatzen dan wel zijn, eerst een korte toelichting. De andere lezers kunnen gelijk naar de navolgende alinea’s scrollen.

1.

In eerdere posts wezen we al op de actio pauliana als techniek van schuldeisersbescherming. Ze laat schuldeisers, en na faillissement de boedel, toe om handelingen niet-tegenwerpelijk te laten verklaren, mits voldaan is aan bepaalde voorwaarden. We noemen hier omwille van de bondigheid enkel de voornaamste twee:

  • de ene voorwaarde is verhaalsbenadeling: het beslag op het schuldeisersvermogen wordt bemoeilijkt of uitgehold, bijvoorbeeld omdat de schuldenaar goederen wegschenkt aan vrienden;
  • de andere voorwaarde is het zogenoemde subjectief element: de schuldenaar heeft de bestreden handeling verricht met “wetenschap van benadeling” of zelfs “bedrieglijke intentie”.

Soms is de pauliaanse niet-tegenwerpelijkheid…

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A v M (Austria): Copyright infringement, locus delicti commissi in case of breach of obligation to pay.

For your second conflicts reading of the day I thought I should serve something more substantial. In A (an Austrian company) v M (a company located in Luxembourg) the Austrian Supreme Court (Oberster Gerichtshof) had to decide on the determination of the locus delicti commissi in the event of infringement of copyright. M had effectively siphoned off to its website, some of A’s satellite broadcasts. Plenty of CJEU precedent is referred to (Hejduk; Austro Mechana; to name a few).

Thank you very much indeed Klaus Oblin for providing me with copy of the judgment – back in early June. Effectively, at issue was  the infringement of a duty to pay.  Klaus has excellent overview of the issues, of which the following are definitely worth highlighting. The Supreme Court justifiably of course emphasises autonomous interpretation of Article 7(2) Brussels I Recast. Yet autonomous interpretation does not provide all the answers. There are plenty of instances where locus delicti commissi is not easily identified, such as here.

The Oberster Gerichtshof seeks support in the Satellite Directive 93/83, but notes that the Directive includes no procedural clauses, let alone any regarding international jurisdiction (at 2.4.2. It refers to the German Bundesgerichtshof’s decision in Oscar). It then completes the analysis by reference to national law:

Section 42b(1) of the Act on Copyrights and Related Rights to classify breach of copyright as a tort (CJEU Kalfelis would have been a more correct reference) ; and

Section 907a(1) of the Civil Code) to identify the locus of the delicti commissi: because monetary debts in acordance with that section must be discharged at the seat of the creditor, the domestic courts at the Austrian seat of the collecting society have jurisdiction. In coming to its conclusion, the court (at 3.2) refers pro inspiratio to Austro Mechana, not just the CJEU’s judgment but also the ensuing national judgment.

Now, lest I am mistaken, in Austro Mechana the CJEU did not identify the locus delicti commissi: it simply qualified the harm arising from non-payment by Amazon of the remuneration provided for in Austrian law, as one in tort: at 52 of its judgment: it follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member state have jurisdiction to entertain Austro-Mechana’s claim. (emphasis added)

Given its heavy reliance on national law, I would suggest the judgment skates on thin ice. Reference to the CJEU seemingly was not contemplated but surely would have been warranted. Kainz is a case in point where locus delicti commissi was helpfully clarified by Luxembourg, Melzer one for locus damni.

Geert.

(Handbook of) European Private international Law, 2nd ed. 2016, Chapter 2, heading 2.2.11.2.

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