Archive for category Conflict of Laws /Private international law

‘Like Dassonville on steroids’. Bobek AG in Rheinland on personality v territoriality, the nature of EU harmonisation, and its links with (as well as historic roots of) conflict of laws and regulatory competition.

In advising on a territorial restriction in an insurance clause earlier this month, I studied the CJEU judgment in C-581/18 Rheinland, important for the (limitations to the) reach of Article 18 TFEU, the general non-discrimination requirement on the basis of nationality. Bobek AG had earlier opined, and the Court followed, that in the absence of harmonisation and in a scenario with no EU links, Article 18 TFEU is not engaged. I had missed the AG’s earlier opinion – forgive me if I am late to this party.

It is important to sketch the context: Bobek AG had summarised the facts as

A German patient received, in Germany, defective breast implants manufactured by Poly Implant Prothèse SA (‘PIP’), a French undertaking that is now insolvent. The patient seeks compensation before the German courts from Allianz IARD SA, the French insurer of PIP. In France, manufacturers of medical devices are under a statutory obligation to be insured against civil liability for harm suffered by third parties arising from their activities. That obligation led PIP to conclude an insurance contract with Allianz, which contained a territorial clause limiting the cover to damage caused on French territory only. Thus, PIP medical devices that were exported to another Member State and used there were not covered by the insurance contract.

In this context, the Oberlandesgericht Frankfurt am Main (Higher Regional Court, Frankfurt am Main, Germany) enquires whether the fact that PIP was insured by Allianz for damage caused by its medical devices on French territory only, to the exclusion of that potentially caused in other Member States, is compatible with Article 18 TFEU and the principle of non-discrimination on grounds of nationality contained therein.

This post is not on Article 18 TFEU. Rather, consider the excellent (and eloquent) discussion by Bobek AG at 109 ff. Does the imperative of equal protection of all European citizen-consumers, in the absence of EU harmonising law on the issue, preclude a national rule that, in effect, limits insurance cover to persons who undergo surgery on the territory of the Member State, thus indirectly limiting the cover to citizens of that Member State? Bobek AG emphatically and despite moral sympathy for the victims, says no. The alternative would be ‘like Dassonville on steroids’ (at 111), it would ‘turn regulatory competence within the internal market on its head’ (at 109).

Consider his link with conflict of laws at 114-115:

In other words, the fact that goods once came from another Member State is not a sufficient reason to suggest that any matter later concerning those goods is covered by EU law. If that logic were to be embraced, by a questionable interpretation of Article 18 TFEU, the movement of goods in Europe would become (once again) reminiscent of medieval legal particularism, [at footnote 78 he refers to the excellent work by my legal history colleague Randall Lesaffer] whereby each product would, like a person, carry its own laws with it. Goods would be like snails, carrying their homes with them in the form of the legislation of their country of origin, to be applicable to them from their production to their destruction.

Such a consequence would not only displace any (normal) territoriality in the application of laws, but would also generate conflicts of regulatory regimes between the Member States. Indeed, such an expansionist interpretation of Article 18 TFEU could make the legislation of any of the Member States potentially applicable on the same territory without any clear and objective criteria as to which legislation should prevail in a given dispute, with the victim being able to choose the most favourable legislation.’

Most delightful analysis.

Geert.

 

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Avonwick Holdings. The High Court awkwardly on locus damni, and on ‘more closely connected’ in Rome II.

In Avonwick Holdings Ltd v Azitio Holdings Ltd & Ors [2020] EWHC 1844 (Comm), Picken J among quite a few other claims, at 146 ff discussed a suggested defrauding by misrepresentation of the best available market price for a bundle of stocks. Toss-up was between Ukranian law and English law and, it was suggested, was only relevant with respect to the issue of statute of limitation. Counsel for both parties agreed that the material differences between Ukranian and English law were minor.

They omitted, it seems, to discuss the relationship between statute of limitations and the carve-out in Rome II for procedural issues.

At 151:

It was not in dispute…that the default applicable law under Article 4(1) is the law of Cyprus in that this was the country in which the event giving rise to the damage occurred since, although Avonwick was incorporated in the BVI and its entry into the Castlerose SPA was formally authorised in Ukraine, Avonwick’s directors were based in Cyprus and the steps necessary to transfer its shares in Castlerose to Azitio and Dargamo would, therefore, have been taken by those directors in Cyprus.

Here I am simply lost. A4(1) does not suggest locus delicti commissi (‘country in which the event giving rise to the damage occurred’) rather it instructs specifically to ignore that. Even if a locus damni consideration was at play, for purely economic loss as readers will know, there is considerable discussion on that exact location. How the judgment could have ended up identifying locus delicti commissi is a bit of a mystery.

At 153 then follows a discussion of a displacement of Cypriot law by virtue of A4(3)’s ‘manifestly more closely connected’ rule, including interesting analysis of any role which Article 12’s culpa in contrahendo provision might play.

For the reasons listed at 166 ff, the judge agrees that A4(3) applies to replace Cypriot law with Ukranian (not: English) law. Those reasons do seem to make sense – yet despite this, the A4(1) analysis should have been carried out properly.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.5.2.

 

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CJEU in Novo Banco: confirms mere presence of a natural person’s core immovable asset (the ‘family home’) does not in itself determine COMI (in insolvency).

When I reviewed Szpunar AG’s opinion, I pointed out that the crux of this case is the determination of ‘centre of main interests’ in the context of natural persons not exercising an independent business or professional activity, who benefit from free movement. The CJEU has now held.

With respect to natural persons outside of a profession, the Insolvency Regulation 2015/848 (‘EIR 2015’) determines ‘(i)n the case of any other individual, the centre of main interests shall be presumed to be the place of the individual’s habitual residence in the absence of proof to the contrary. This presumption shall only apply if the habitual residence has not been moved to another Member State within the 6-month period prior to the request for the opening of insolvency proceedings.’

‘Habitual residence’ is not defined by the EIR 2015. The CJEU runs along the usual themes: need for predictability and autonomous interpretation; emphasis on the Regulation generally defining COMI as ‘the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties’ (at 19 and referring to recital 13 of the previous Regulation); among those third parties, the important position of (potential) creditors and whether they may ascertain said centre (at 21); to agree with the AG at 24 that

relevant criteria for determining the centre of the main interests of individuals not exercising an independent business or professional activity are those connected with their financial and economic situation which corresponds to the place where they conduct the administration of their economic interests or the majority of their revenue is earned and spent, or the place where the greater part of their assets is located.

Like the AG, the CJEU holds that the mere presence of a natural person’s one immovable asset (the ‘family home’, GAVC) in another Member State than that of habitual residence, in and of itself does not suffice to rebut COMI (at 28).

At 30, the Court specifically flags that COMI in effect represents the place of the ’cause’ of the insolvency, i.e. the place from where one’s assets are managed in a way which led the insolvent into the financial pickle: 

In that regard, although the cause of the insolvency is not, as such, a relevant factor for determining the centre of the main interests of an individual not exercising an independent business or professional activity, it nevertheless falls to the referring court to take into consideration all objective factors, ascertainable by third parties, which are connected with that person’s financial and economic situation. In a case such as the one in the main proceedings, as was observed in paragraph 24 above, that insolvency situation is located in the place where the applicants in the main proceedings conduct the administration of their economic interests on a regular basis or the majority of their revenue is earned and spent, or the place where the greater part of their assets is located.

As in all other scenarios of rebuttal, the ascertainability in particular by (potential) creditors is key and is a factual consideration which the national courts have to make.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

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The Hungarian Supreme Court on conduct in litigation resulting in implied choice of law.

An overdue post on the Hungarian Supreme Court’s judgment 2020.3.72.a, finding an implied choice of law pro Hungarian law, made by a Serbian and Hungarian party to a contract for agency and business counseling. In the absence of choice of law, per Article 4 Rome I, applicable law would have been Serbian law. Yet the SC held that the conduct of the Serbian business party in the litigation, made for implicit choice of law.

Under Rome I, choice of law may be made and changed at any time during the course of the contract. Whether it can also be made by conduct of litigation is somewhat disputed. Arguments pro rely heavily on a parallel with impromptu choice of court in Brussels Ia, by submission. The Hungarian courts had assessed the merits of the case on the basis of Hungarian law, and the Serbian defendant had engaged in that discussion in a detailed, substantive statement of defence without any objections to Hungarian law being the lex contractus. This, the courts held and the SC agreed, meant parties had made an implied choice of law by their conduct. A change of heart by defendant upon appeal was a unilateral change of law, which cannot bind the parties.

Richard Schmidt sent me the judgment and has additional analysis here– on which I relied for I do not read Hungarian. Scholarship has engaged with the issue and this SC judgment will be highly relevant material for that discussion.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.4.

 

 

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Forum non and infringing copyright in the air: The Performing Rights Society v Qatar Airways.

Performing Right Society Ltd v Qatar Airways Group QCS [2020] EWHC 1872 (Ch) concerns the infringement or not of copyright via Qatar Airways’ inflight entertainment system known as “Oryx One”. Holding on an application for a stay on grounds of forum non conveniens or alternatively on case management grounds, Birss J on Friday first of all noted the relevance of Lucasfilm Limited v Ainsworth [2011] UKSC 39 that the English court can have jurisdiction over claims for infringement of copyright by non-UK acts and under non-UK law where there is a basis for in personam jurisdiction. Which there is because of the presence of the aircraft on the ground or in the territorial airspace of the UK – the airline was served at the London address of the UK branch (defendant, QATAR Airways Group Q.C.S.C. is not domiciled in the UK, I gather). Lucasfilm did not itself deal with forum non.

I flag this case for Birss J gives a good summary of the approach to forum non, building of course on Spiliada but also with reference to Vedanta, Okpabi etc., all reviewed on the blog. Note at 16-17 claimant’s and defendant’s alternative formulations of the Stage 1 cq 2 tests following Spiliada.

The defendant has summarised the test in Spiliada as follows:

“(1) Is there another available forum which is clearly and distinctly the natural forum, that is to say, the “forum with which the action has the most real and substantial connection”?

(2) If there is, is England nevertheless the appropriate forum, in particular because the court is not satisfied that substantial justice will be done in the alternative available forum?”

At: claimant’s rival formulation is:

“Stage 1: Qatar Airways bears the burden of satisfying the Court that the Qatari court is an available forum with competent jurisdiction to determine PRS’s claim and is clearly or distinctly a more appropriate forum than England for the trial of the issues. If it fails to satisfy the Court of these matters, a stay should be refused.

Stage 2: If the Court determines that the Qatari court is prima facie more appropriate, it must nevertheless refuse to grant a stay if PRS demonstrate that, in all the circumstances of the case, it would be unjust for it to be deprived of the right to trial in England.”

The distinctions may seem trivial. However they relate to, firstly, burden of proof and secondly, which factors need to be considered in which stage (and therefore, proven by whom). In particular, it is suggested that issues such as the location of witnesses arose at the first stage yet that at least aspects of the points which were debated about expert witnesses (of foreign law) arose at the second stage not the first.

Birss J ends up summarising Stage 1 as entailing the following headings:

i) the personal connections the parties have to the countries in question; ii) factual connections which the events relevant to the claim have with the countries; iii) applicable law; iv) factors affecting convenience or expense such as the location of witnesses or documents.

I will leave readers to digest the arguments under the various headings themselves, Birss J concludes that Qatar is not clearly a more appropriate forum and does not therefore consider Stage 2.

Readers will remember that the CJEU in Owusu objected to forum non on the basis of its unpredictability. Now, I am not one for arguing that following Spiliada and Vedanta, and given the authority rule to which common lawyers and judges are attuned, forum non be unpredictable. Neither can one posit however, seeing the intensity of the discussion here and in many other cases, that it is an entirely clear exercise.

Geert.

 

 

 

 

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Google and the jurisdictional reach of the Belgian DPA in right to be forgotten cases. Another piece misplaced in the puzzle?

Thank you Nathalie Smuha for first signalling the €600,000.00 fine which the Belgian Data Protection Authority (DPA) issued on Tuesday against Google Belgium, together with a delisting order of uncertain reach (see below) and an order to amend the public’s complaint forms. The decision will eventually be back up here I am assume (at vanished yesterday) however I have copy here.

Nauta Dutilh’s Peter Craddock and Vincent Wellens have very good summary and analysis up already, and I am happy to refer. Let me add a few things of additional note:

  • The one-stop shop principle of the GDPR must now be under severe strain. CNIL v Google already put it to the test and this Belgian decision further questions its operationalisation – without even without for the CJEU to answer the questions of the Brussels Court of Appeal in the Facebook case. At 31, the DPA refers to a letter which Google LLC had sent on 23 June 2020 (a few days therefore after the French decision) to the Irish DPA saying that it would no longer object to national DPAs exercising jurisdiction in right to be forgotten cases. Of note is that in ordinary litigation, deep-pocket claimants seeking mozaik jurisdiction seldom do that because it serves the general interest.
  • Having said that, the Belgian DPA still had to establish jurisdiction against Google Belgium. Here, CJEU Google v Spain, Google v CNIL, and Wirtschaftsakademie led the DPA to take a ‘realistic’ /business plan approach (such as Jääskinen AG in Google Spain) rather than a legally pure approach: at 80 following extensive reference to CJEU authority, and to the effet utile of the GDPR, the DPA holds that it matters little whether the actual processing of the date takes places outside of the EU, by Google employees ex-EU, and that Google Belgium’s activities are supportive only. A Belgian resident’s right to be forgotten has been infringed; a Google entity is available there: that would seem to suffice.
  • That left the issue of the territorial reach of the delisting request. The DPA arguably cuts a few corners on the Google Belgium issue; here, it is simply most vague: at 81 ff it refers to the jurisdictional decision in e-Date Advertising, that for infringement of privacy within Brussels Ia, the courts of the person’s centre of interests are best placed to hear the case in its entirety, holding this should be applied mutatis mutandis in GDPR cases and removal orders. It then holds at 85 that neither Google v CNIL nor Belgian law give it specific power to impose a worldwide delisting order, yet at 91 that an EU-wide delisting order would seem an effective means of redress, to end up in its final order (p.48-49) not identifying a territorial scope for delisting.

I am confused. I suspect I am not the only one.

Geert.

(Handbook of) EU private international law, 2nd ed.2016, chapter 2, Heading 2.2.8.2.5.

 

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The CJEU in Movic on enforcement of unfair trading practices and the less than abstract determination of ‘civil and commercial’.

I reviewed Szpunar AG’s Opinion in C-73/19 Belgische Staat v Movic BV et al here. The CJEU held this morning. At the time of posting an English version of the judgment was not yet available. The case at issue concerns enforcement of Belgium’s unfair trading act by the public authorities of the Member State. Movic BV of The Netherlands and the others defendants practices ticket touting: resale of tickets for leisure events.

The Court is more succinct than the AG in its analysis yet refers repeatedly to points made by Szpunar AG without itself therefore having to refer to so extensive an analysis.

The fact that a power was introduced by a law is not, in itself, decisive in order to conclude that the State acted in the exercise of State authority (at 52). Neither does the pursuit of the general interest automatically involve the exercise of public powers (at 53). With respect to the authorities’ powers of investigation, it would seem that the Court like the AG reads (at 57) C‑49/12 Sunico as meaning that to exclude proceedings from the scope of ‘civil and commercial matters’, it must be determined, in concreto, whether the public authority uses evidence which it has in its possession as a result of its public powers of investigation, hence putting it in a different position as a person governed by private law in analogous proceedings. Collecting evidence in the same way as a private person or a consumer association could, does not fall within that category (at 58).

Neither the request for penalty payments nor an application for an injunction makes the proceedings drop out off Brussels Ia: both instruments are available to private parties, too. That is not however the case for the observation of continued infringement by mere civil servant oath as opposed to bailiff certification. This, the Court holds like the AG, does amount to exercise of public authority (at 62) however (at 63) that element alone escapes BIA, it does not so taint the other part of the proceedings.

As I noted in my review of first Advocate General Szpunar’s Opinion, the need for highly factual considerations sits uneasily with the Regulation’s expressed DNA of predictability. However this squares with the CJEU case-law on ‘civil and commercial’.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2, Heading 2.2.

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Bundeszentralamt Fur Steuern v Heis. On comity, staying proceedings, and the ‘public /private’ divide in international litigation.

Bundeszentralamt Fur Steuern (Being the Federal Central Tax Office of the Federal Republic of Germany) & Ors v Heis & Ors [2019] EWHC 705 (Ch) was held in March 2019 bit only came unto BAILII recently and had not caught my attention before.

The primary question raised is whether appeals by the applicants, the German Federal Tax Office (“the GTA”) and by Deutsche Bank AG (“DB”) against the rejection by the Joint Special Administrators (“the Administrators”) of MF Global UK Limited (“MFGUK”) of their respective proofs of debt, to allow the underlying claim which forms the subject of the proof to be resolved by the specialist German tax or fiscal courts, which both the applicants (for different reasons) contend are the natural forum for the determination of the claims and the forum in which they can be resolved most efficiently.

The underlying issue concerns German withholding tax.

The GTA has at all times maintained that its claim should be determined in Germany by the German tax courts, per the UK-Germany double taxation Treaty, based on the OECD model convention (for those in the know: it is Article 28(6) which the GTA has suggested exclusively reserves its GTA Claim to the German Courts). However it felt compelled to submit a proof in MFGUK’s UK administration proceedings in order to preserve its rights.

Under German law, it is within the GTA’s power to give a decision on MFGUK’s objection to relvant Amended Tax Assessment Notices. If and when it did so, it would then be for MFGUK, if it wished to pursue the matter further, to file an appeal against that decision by the GTA with the Fiscal Court of Cologne. The Fiscal Court of Cologne is one of the 18 fiscal courts in Germany which are the courts of first instance for tax matters. That seems a natural course to take however here the GTA is caught in a conundrum: at 18: the GTA has not yet formally rejected MFGUK’s objection. This is because such objection would establish proceedings in Germany, and there is a procedural rule of German law that, in order to prevent parallel proceedings, a German court will automatically defer to the court first seized of a matter. Accordingly, it seems likely that if the GTA were to reject MFGUK’s objection before the Stay Application has been decided by the UK Court, on any appeal by MFGUK, the Fiscal Court of Cologne might as a matter of comity defer to this Court in order to avoid parallel proceedings.

At 57: Brussels Ia is not engaged for the case concerns both the insolvency and the tax exclusion of Articles 1.1 and 1.2.b. At 56 Hildyard J considers the issues under English rules on the power to stay, with a focus on the risk of irreconcilable judgments.

At 84 Hildyard J holds that the GTA read too much into A28(6) and that there is no exclusive jurisdiction, leaving the consideration of whether a stay might be attractive nevertheless (at 89 ff the issue is discussed whether German courts could at all entertain the claim). This leads to an assessment pretty much like a stay under Brussels Ia as ‘related’ (rather than: the same, to which lis alibi pendens applies) cases. Note at 87(6) the emphasis which the GTA places on the actual possibility of consolidating the cases – similar to the arguments used in BIa A33-34 cases such as Privatbank and later cases).

At 115 the impact of this case having public law impacts becomes clear: ‘It seems to me that, despite my hunch that there will also be considerable factual enquiry, and a factual determination of the particular circumstances may determine the result …, the legal issues at stake are not only plainly matters of German law, but controversial and complex issues of statutory construction of systemic importance and substantial public interest in terms of the legitimate interests of the public in the protection of its taxation system from what are alleged to be colourable schemes.’

And at 116, referring ia to VTB Capital v Nutritek, ‘the risk of inconsistent decisions in concurrent proceedings in different jurisdictions, is the more acute when in one of the jurisdictions the issue is a systemic one, or may be decided in a manner which has systemic consequences. Especially in such a context, there is a preference for a case to be heard by the courts of the country whose law applies.’ Reference to VTB is made in particular with resepect to the point that Gleichlauf (the application by a court of its own laws) is to be promoted in particular (at [46] in VTB per Lord Mance: “it is generally preferable, other things being equal, that a case should be tried in a country whose law applies. However, this factor is of particular force if issues of law are likely to be important and if there is evidence of relevant differences in the legal principles or rules applicable to such issues in the two countries in contention as the appropriate forum.’

At 117: ‘even if the factual centre of gravity may be London, the jurisdiction likely to be most affected by the result is Germany: and even if the US approach of ‘interest analysis’ is not determinative in this jurisdiction it does not seem to me to be an impermissible consideration.’

Held, at 121, there is here ‘a sufficiently “rare and compelling” reason for granting the stay sought by the GTA, provided that the German Fiscal Court are an available forum in which to determine the substance of the disputes.’ At 122 Hildyard J seeks assurances ‘insofar as the parties’ best endeavours can secure it, resolution of both the GTA Claim and the Later MFGUK Refund Claim as expeditiously as possible. That seems to me necessary in order to safeguard this jurisdictions’ insolvency processes and for the protection of the interests of the body of creditors as a whole.’

Then follows at 131 ff extensive analysis of the impact of this stay decision on the related case of Deutsche Bank, with at 190 a summary of the issues to be decided. Held at 218: ‘By careful selection of potentially dispositive issues, I consider that there is some prospect of that process enabling a determination without recourse to the intricacies of German tax law which are to be decided in the context of the GTA Claim; whereas an immediate stay guarantees a long delay before this court can determine the matter, based on presently hypothetical claims, after a long wait for non-binding guidance from the German court which may result from other cases to which DB is not a party.’ However at 219 the prospect of a stay after all is held out, should a quick resolution of those issues not be possible.

Most interesting.

Geert.

 

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The Colouroz Investment et all Scheme of arrangement. Change to asymmetric choice of court issue left to sanction hearing.

In Colouroz Investment et al [2020] EWHC 1864 (Ch.), Snowden J at 59 ff considers the classic issues (see ia Lecta Paper) on the jurisdictional consideration: no cover under the Insolvency Regulation; cover under Brussels Ia (future Brexit alert: ditto under Lugano) left hanging and assumed arguendo. At 62 Snowden J summarises the position excellently:

‘(T)he court has usually adopted the practice of assuming that Chapter II of the Recast Judgments Regulation applies to schemes of arrangement on the basis that the scheme proposal is to be regarded as a “dispute” concerning the variation of the existing relationship between the company and its creditors under which the company “sues” the scheme creditors as “defendants” seeking an order binding them to the scheme.  If, on the basis of that underlying assumption, the court has jurisdiction over the scheme creditors pursuant to Chapter II of the Recast Judgment Regulation, then there is no need for the Court to determine whether that assumption is correct.

At 64: ‘Credit Agreements and the ICA (Intercreditor Agreement, GAVC) were originally governed by New York law and were subject to the exclusive jurisdiction of the New York Court. However, as a result of the amendments made on 2 June 2020 with the consent of the requisite majority of the lenders under the contractual amendment regime, the governing law and jurisdiction provisions have now been changed to English governing law and English exclusive jurisdiction.’ At 65: expert evidence on NY law suggests amendments made on 2 June 2020 are valid and binding as a matter of New York law.

This to my mind continues to be a fuzzy proposition under the Rome I Regulation: change of lex contractus by majority must beg the question on the relevant provisions under Rome I. As far as I am are, this hitherto has not been driven home by anyone at a sanction hearing however it is bound to turn up at some point.

At 66 Snowden J, who gives consent for the sanction hearing, announces that one issue that will have to be discussed there is that if the Schemes are sanctioned, the intention is to have the jurisdiction clauses then changed to asymmetric jurisdiction clauses, detailed in 21-23: lenders will be entitled to bring proceedings against the obligors in any jurisdiction although any proceedings brought by the obligors must be brought in England. At 66 in fine: ‘that question is not for decision at this convening hearing, but should be considered at the sanction hearing.’

That’s a discussion I shall look forward to with interest.

Geert.

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

 

 

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Applicable law and statutes of limitation in CSR /business and human rights cases. The High Court, at least prima facie, on shipbreaking in Bangladesh in Begum v Maran.

Hamida Begum v Maran UK [2020] EWHC 1846 (QB) engages exactly the kinds of issues that I have just posted about, in court rather than in concept. On 30th March 2018 Mr Mohammed Khalil Mollah fell to his death whilst working on the demolition of a defunct oil tanker in the Zuma Enterprise Shipyar in Chittagong (now Chattogram), Bangladesh. On 11th April 2019 the deceased’s widow issued proceedings claiming damages for negligence under the UK Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976; alternatively, under Bangladeshi law. The scope of the proceedings has subsequently been broadened inasmuch as draft Amended Particulars of Claim advance a cause of action in restitution: more precisely, unjust enrichment.

Application in the current case is for strike-out and /or summary judgment (denying liability) hence the legal issues are dealt with at prima facie instead of full throttle level. One or two of the decisions deserve full assessment at trial. Trial will indeed follow for the application was dismissed.

The case engages with the exact issues in exchanges I had at the w-e.

Proceedings have not been brought against the owner of the yard and/or the deceased’s employer. Both are Bangladeshi entities. Maran (UK) Ltd,  defendant, is a company registered in the UK and, it is alleged, was both factually and legally responsible for the vessel ending up in Bangladesh where working conditions were known to be highly dangerous.

Focus of the oral argument has been whether claim discloses viable claims in English law on the basis of tort of negligence (answer: yes) and in unjust enrichment (answer: no).

The issue of liability in tort is discussed on the basis of English law, which is most odd for Rome II might suggest Bangladeshi law as the lex causae and Justice Jay himself says so much, but only at 76 ff when he discusses Rome II viz the issue of limitation. (Update 17 July 2020: I emphasise again that in applications for summary judgment, orders’ reasoning and order of argument may take odd form as a result of the prima facie nature of the proceedings).

On the tort of neglicence claimant argues under English law, with direct relevance to the current debate on environmental and human rights due diligence, that a duty of care required the defendant to take all reasonable steps to ensure that its negotiated and agreed end of life sale and the consequent disposal of the Vessel for demolition would not and did not endanger human health, damage the environment and/or breach international regulations for the protection of human health and the environment. The EU Ship Recycling Regulation 1257/2013 was suggested as playing a role, which is dismissed by Justice Jay at 24 for the Regulation was not applicable ratione temporis.

At 30, claimant’s case on negligence is summarised:

First, the vessel had reached the end of its operating life and a decision was taken (perforce) to dispose of it. Secondly, end-of-life vessels are difficult to dispose of safely. Aside from the evident difficulties inherent in dismantling a large metal structure, a process replete with potential danger, an oil tanker such as this contains numerous hazardous substances such as asbestos, mercury and radio-active components. Although these were listed for Basel Convention purposes and for the attention of the buyer, and the deceased was not injured as a result of exposure to any hazardous substance, the only reasonable inference is that waste such as asbestos is not disposed of safely in Chattogram. Thirdly, the defendant had a choice as to whether to entrust the vessel to a buyer who would convey it to a yard which was either safe or unsafe. Fourthly, the defendant had control and full autonomy over the sale. Fifthly, the defendant knew in all the circumstances that the vessel would end up on Chattogram beach. Sixthly, the defendant knew that the modus operandi at that location entailed scant regard for human life.

The gist of the argument under tort therefore is a classic Donoghue v Stevenson type case of liability arising from a known source of danger.

At 42 ff Justice Jay discusses what to my mind is of great relevance in particular under Article 7 Rome II, should it be engaged, giving claimant a choice between lex locus delicti commissi and lex locus damni for environmental damage, in particular, the issue of ‘control’. One may be aware from my earlier writings (for an overview see my chapter in the 2019 OUP Handbook of Comparative environmental law) that the determination of the lex causae for that issue of control has not been properly discussed by either the CJEU or national courts. This being a prima facie review, the issue is not settled definitively of course however Justice Jay ends by holding that there is no reason to dismiss the case on this issue first hand. This will therefore go to trial.

As noted Rome II is only discussed towards the end, when the issue of limitation surfaces (logically, it would have come first). Claimant does not convince the judge that the case is manifestly more closely connected with England than with Bangladesh under A4(3) Rome II. Then follows the discussion whether this might be ‘environmental damage’ under Article 7 Rome II, which Justice J at 83 ff holds preliminary and prima facie, it is. That might be an overly broad construction of A7 Rome II, I believe, which may show too much reliance on the context of the litigation – Update 17 July 2020: here, too, it is important to note again that without having seen submissions it is difficult to speculate on the arguments made.

At 85 a further issue for debate is trial is announced, namely whether the one-year statute of limitation under Bangladeshi law, should be extended under Article 26 Rome II’s allowance for ordre public (compare Roberts and CJEU C-149/18 Martins v DEKRA – that case concerning lois de police and statutes of limitation. 

Plenty of issues to be discussed thoroughly at trial.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

 

 

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