A boutique blog and legal practice on niche areas of the law. Recent developments in conflict of laws; WTO law; environmental law.
This post to flag my analysis of SAS Saloni France v SAS Nexity Logement, Tribunal de Commerce de Paris, 19ème chambre, 14 December 2022, over at Lexis Nexis arbitration. It is a rare application by a French court of first instance, of the fairly recently introduced theory of unforeseeability (imprévision) in the context of the price spike in energy costs, transport and packaging as a result particularly of the Russian war in Ukraine.
Geert.
A short note to refer to this post on the Wave News which focuses on third party litigation funding and how it might be used in climate change litigation, with input by Yours Truly. A good introductory summary of the opportunities and points of attention of third party funding generally, too.
Geert.
I do not often use pictures on the blog but this one is just too evocative to let pass:
On 18 December 2023 (i.e. a year from now), Willem Theus (KU Leuven – UCLouvain), Dr Michel Erpelding (University of Luxembourg), Prof Dr Francesco Tamburini (University of Pisa), Prof Dr Fouzi Rherrousse (University of Oujda), and myself are organising a conference to celebrate the centenary of the Statute of Tangier, signed at Paris. Credit for kicking off the process goes to Willem.
This treaty, signed between France, Spain and the United Kingdom, and later joined by Sweden, Belgium, the Netherlands, Portugal and Italy, provided for the creation of a new legal entity: the International Zone of Tangier. Established by 1925, the Tangier Zone was formally an integral part of Morocco, but subject to a special regime that left most of its institutions under the joint administration of several Western powers. This special regime would last until Morocco’s independence in 1956, with some international elements remaining in place under a Royal Charter until 1960.
Thinking about the Zone triggers an extravaganza of thoughts on international commercial courts, conflict of laws, history of law and so much more. The call asks for papers on
The Politics of Individual Powers Towards/Within the Zone
Moroccan Attitudes and Policies Towards/Within the Zone and Its Institutions
The Interzonal and Foreign Relations of the International Zone
Politics in the International Legislative Assembly
The Veto-Role of the Committee of Control
The Zone’s Legal System/Codes
The Operation, Case Law and Reforms of the Mixed Court
The Bar of the International Zone
Careers of Individual Lawyers/Officials/Businessmen/Intermediaries
The Tangier Banking System
The Ecclesiastical, Jewish and Sharia Courts
The Working and Case Law of the American Consular Court
The Spanish Civil War and its Impact on the Zone
The Architecture of the International Administrative Buildings of the Zone
Smugglers and the Law; and
The Legal System of the Transition Period (1956–1960)
The call and further details are available in Arabic, English, French, Italian and Spanish.
Happy pondering abstracts!
Geert.
A short note on the claim form for the collective claim by a group of parents based in The Netherlands against TikTok Technology Limited, domiciled at Dublin, Ireland. It engages Article 79 GDPR, as well as the consumer section of Brussels Ia. At the applicable law level, it suggests application of Article 6 Rome I (consumer contracts; a logical counterpart of the jurisdictional analysis) and, in subsidiary fashion, Article 4 Rome II, each to suggest application of Dutch law.
I wrote on Article 79 here, and the problems which I signalled have in the meantime surfaced in case-law, as I signalled ia here. Current case prima facie may not be entirely straightforward under GDPR, BIa and Rome I – one imagines a possible TikTok’s defence to go ia towards the meaning of ‘establishment’.
Geert.
Update autumn 2022 my article on A7 Rome II has now been published: Lex ecologia. On applicable law for environmental pollution, a pinnacle of business and human rights as well as climate change litigation.
I have an article forthcoming on the application of Rome II’s Article 7, ‘environmental damage’ rule. Last week’s widely reported first instance ruling in the Dutch Shell climate case will of course now feature.
I reported on application of A7 in Begum v Maran. There I submit, the Court of Appeal engaged without sufficient depth with the Article. It held against its application. Xandra Kramer and Ekaterina Pannebakker then alerted us to the use of Article 7 in last week’s momentous Milieudefensie v Shell (umpteen) ruling [Dutch version here, English version here], in which Shell by a first instance judge has been ordered to reduce its CO2 emissions. In that ruling, too, the judges leave a lot of issues on Rome II underanalysed. The conclusion however goes in the opposite direction: the court held A7 is engaged and leads to Dutch law as the lex loci delicti commissi (Handlungsort or ldc).
I have taken the Dutch version of the judgment as the basis for the analysis for the English version is a touch under par when it comes to the finer detail. The Dutch version it has to be said is not entirely clear either on the conflict of laws analysis.
Firstly, Milieudefensie argue that A7 is engaged, and it suggests it opts for Dutch law given the choice left to it by that Article. Whether it does so as lex loci damni (Erfolgort or ld) or lex loci delicti commissi is not specified. It is reported by the courts that in subsidiary fashion Milieudefensie argue that per A4(1)’s general rule, Dutch law is the lex causae: that has to be Erfolgort. (Lest the court inaccurately reported parties’ submissions here and the argument made under A4 focused on Article 4(3)’s displacement rule) [4.3.1].
The judges further report [4.3.2] that parties were in agreement that climate change, whether dangerous or otherwise, due to CO2 emissions constitutes ‘environmental damage’ in the sense of A7 Rome II (and the judges agree) and that they were in disagreement on the locus delicti commissi. Milieudefensie argue that Shell’s holding policy viz climate change and emissions, dictated from its corporate home of The Netherlands, is that Handlungsort. Shell argue that the place of the actual emissions are the Handlungsorts (plural), hence a Mozaik of applicable laws. (This nota bene has interesting applications in competition law, as I suggest here).
Then follows a rather sloppy reference to Jan von Hein’s note bene excellent review of Article 7 in Calliess; distinguishing of the arguments made by Shell with reference to ia product liability cases; and eventually, with reference to ia the cluster effect of emissions (‘every contribution towards a reduction of CO2 emissions may be of importance’ [4.3.5]) and the exceptional, policy driven nature of A7, the conclusion [4.3.6] that the holding policy is an independent cause of the CO2 emissions and hence imminent climate damage and obiter [4.3.7] that A4(1) would have led to the same conclusion.
The ruling will of course be appealed. It would be good to get the application of Article 7 right, seeing as environmental law is a core part of strategic and public interest litigation.
Geert.
EU Private International Law, 3rd. ed. 2021, Chapter 4, Heading 4.6.3 (4.54 ff).
Update 12 07 2021 Shell have now dropped further jurisdictional objections. The Nigerian daughter companies will therefore be joined to the case at the High Court, together with the English-incorporated mother corporation (Shell dual list in England and The Netherlands).
Those who combine my excitement of having professor McCorquodale contribute to the blog, with his enthusiasm at the end of his post, may find themselves in a perennial game of complimentary renvoi.
Robert, who represented interveners CORE in Okpabi v Shell (one-line summary in live tweeting here), signals the jurisdictional take-aways. The wider due diligence context of the case is considered by Ekaterina Aristova and Carlos Lopez here, Lucas Roorda signals ia the merits bar following the jurisdictional findings and Andrew Dickinson expressed his hope of an end to excessively lengthy jurisdictional proceedings here.
Okpabi v Shell: Judges’ Approach to Jurisdictional Issues is Crucial
In Okpabi v Shell [2021] UKSC 3, Nigerian farmers brought a claim against Shell’s parent company (RDS) and its Nigerian subsidiary (SPDC) for environmental and human rights impacts of oil pollution. The claim had been struck out at the initial state on the basis of lack of jurisdiction in relation to the actions of SPDC, and this decision had been upheld by the Court of Appeal.
The Supreme Court unanimously swept aside these decisions. It held that when considering issues of the court’s jurisdiction over such a claim, a court must start from the basis that the alleged facts of the claim are true and from there determine if the claim has a real prospect of success. The defendant should not bring evidence of its own to dispute the alleged facts unless the facts are demonstrably untrue or unsupportable, as otherwise it risks showing that there is an issue to be tried. If a judge engages with the evidence and makes findings on it in a summary judgment, the more likely it is that the decision to strike out will be overturned. Further, the Court considered that there was a danger of a court determining issues which arise in parent/subsidiary cases without sufficient disclosure of material documents in the hands of the defendants. Both courts below had acted incorrectly and conducted a “mini-trial”, and so the appeal by the claimants was successful.
The Court affirmed Vedanta that parent companies can have a duty of care towards those affected by a subsidiary’s actions, and that the Caparo test was inapplicable to these types of cases. The Court also clarified the scope of the duty of care by making clear that control is not determinative, it is the level of management involvement by the parent which is crucial. A parent company’s group-wide policies and standards were relevant in this respect. The Court, unfortunately, did not refer in its decision to any comparative law cases or international developments, even though these had been drawn to its attention.
This decision embeds the position that parent companies can have a duty of care towards those affected by a subsidiary’s actions, and that de facto management is a factor to consider. It examined the legal process by which courts consider these jurisdictional issues and made it much harder for a judge to strike out a case at the jurisdictional stage unless the facts on which the claim is based are demonstrably untrue or unsupportable. This could enable quicker proceedings towards the merits in these types of cases.
—Robert McCorquodale – it is my honour to contribute to this excellent blog.
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.
Update 10 March 2021 the forum necessitatis and other amendments to Brussels Ia and Rome II were rejected. Update 16 April 2021 Thalia Kruger has succinct additional analysis and references here. Of note is here remark that the Resolution would leave it up to Member States to qualify any EU law as lois de police: clearly that would indeed be an odd move.
Update 28 October 2020 see also Chris Tomale’s further critical reflection here.
Update 22 October 2020 see for comparative purposes Jan von Hein’s critical comments on the EP draft work for a Regulation on the civil liability for artificial intelligence. There is a clear tendency in the institutions to draft tailor-made regimes for the PIL aspects of whatever hot topic hits them – it is generally neither a wise nor a necessary move.
Update 12 October 2020 Jan von Hein has weighed in on the debate here. Update 9 October 2020 Giesela Ruhl has further review of the Rome II elements here.
Thank you Irene Pietropaoli for alerting me to the European Parliament’s draft proposal for a mandatory human rights due diligence Directive. The official title proposed is a Directive on Corporate Due Diligence and Corporate Accountability). Parliament also proposes insertions in both Brussels Ia and Rome II. For the related issues see a study I co-authored on the Belgian context, with links to developments in many jurisdictions.
I do not in this post go into all issues and challenges relating to such legislation, focusing instead on a first, preliminary analysis of the conflicts elements of the proposal.
A first issue of note in the newly proposed Directive is the definitional one. The proposal’s full title as noted uses ‘corporate due diligence and corporate accountability’. However in its substantive provisions it uses ‘duty to respect human rights, the environment and good governance’ and it defines each (but then with the denoter ‘risk’) in Article 3. For human rights risks and for governance risks these definitions link to a non-exhaustive list of international instruments while for the environment no such list is provided.
The proposed Directive points out the existence of sectoral EU due diligence legislation e.g. re timber products and precious metals, and suggests ‘(i)n case of insurmountable incompatibility, the sector-specific legislation shall apply.’ This is an odd way to formulate lex specialis, if alone for the use of the qualifier ‘insurmountable’. One assumes the judge seized will eventually be the arbitrator of insurmountability however from a compliance point of view this is far from ideal.
As for the proposed amendment to Brussels Ia, this would take the form of a forum necessitatis as follows:
Article 26a
Regarding business-related civil claims on human rights violations within the value chain of a company domiciled in the Union or operating in the Union within the scope of Directive xxx/xxxx on Corporate Due Diligence and Corporate Accountability, where no court of a Member State has jurisdiction under this Regulation, the courts of a Member State may, on an exceptional basis, hear the case if the right to a fair trial or the right to access to justice so requires, in particular: (a) if proceedings cannot reasonably be brought or conducted or would be impossible in a third State with which the dispute is closely related; or (b) if a judgment given on the claim in a third State would not be entitled to recognition and enforcement in the Member State of the court seised under the law of that State and such recognition and enforcement is necessary to ensure that the rights of the claimant are satisfied; and the dispute has a sufficient connection with the Member State of the court seised.
This proposal is a direct copy paste (with only the reference to the newly proposed Directive added) of the European Commission’s proposed forum necessitatis rule (proposed Article 26) at the time Brussels I was amended to Brussels Ia (COM (2010) 748). I discussed the difficulty of such a forum provision eg here (for other related posts use the search string ‘necessitatis’). The application of such a rule also provokes the kinds of difficulty one sees with A33-34 BIa (including the implications of an Anerkennungsprognose).
Coming to the proposed insertion into Rome II, this text reads
Article 6a
Business-related human rights claims
In the context of business-related civil claims for human rights violations within the value chain of an undertaking domiciled in a Member State of the Union or operating in the Union within the scope of Directive xxx/xxxx on Corporate Due Diligence and Corporate Accountability, the law applicable to a non-contractual obligation arising out of the damage sustained shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred or on the law of the country in which the parent company has its domicile or, where it does not have a domicile in a Member State, the law of the country where it operates.
I called this a choice between lex locus damni; locus delicti commissi; locus incorporationis; locus activitatis. Many of the associated points of enquiry of such a proposal are currently discussed in Begum v Maran (I should add I have been instructed in that case).
A first obvious issue is that the proposed Article 6a only applies to the human rights violations covered by the newly envisaged Directive. It does not cover the environmental rights. These presumably will continue to be covered by Rome II’s Article 7 for environmental damage. This will require a delineation between environmental damage that is not also a human rights issue, and those that are both. Neither does the proposed rule apply to the ‘good governance’ elements of the Directive. These presumably will continue to be covered by the general rule of A4 Rome II, with scope for exception per A4(3).
My earlier description of the choice as including ‘locus incorporationis’ is not entirely correct, at least not if the ‘domicile’ criterion is the one of Brussels Ia. A corporation’s domicile is not necessarily that of its state of incorporation and indeed Brussels Ia’s definition of corporate domicile may lead to more than one such domicile. Does the intended rule imply claimant can chose among any of those potential domiciles?
Locus delicti commissi in cases of corporate due diligence (with the alleged impact having taken place abroad) in my view rarely is the same as locus damni, instead referring here to the place where the proper diligence ought to have taken place, such as at the jurisdictional level in CJEU C-147/12 OFAB, and for Rome II Arica Victims. This therefore will often co-incide with the locus incorporationis.
Adding ‘locus activitis’ as I called it or as the proposal does, the law of the country where the parent company operates, clearly will need refining. One presumes the intention is for that law to be one of the Member States (much like the proposed Directive includes in its scope ‘limited liability undertakings governed by the law of a non-Member State and not established in the territory of the Union when they operate in the internal market selling goods or providing services’). Therefore it would be be best to replace ‘country where it operates’ with ‘Member State’ where it operates. However clearly a non-EU domiciled corporation may operate in many Member States, thereby presumably again expanding the list of potential leges causae to pick from. Moreover, the very concept of ‘parent’ company is not defined in the proposal.
In short, the European Parliament with this initiative clearly hopes to gain ground quickly on the debate. As is often the case in such instances, the tent pegs have not yet been quite properly staked.
Geert.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.
(3rd ed forthcoming February 2021).
Update 28 August 2020 permission to appeal and cross-appeal has been granted and is being additionally sought by both parties on various issues.
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 odd at first sight given Rome II might suggest as a starting point Bangladeshi law as the lex causae ; Justice Jay himself says so much, but only at 76 ff when he discusses Rome II viz the issue of limitation. In applications for summary judgment however, reasoning and order of argument may take odd form as a result of the prima facie nature of the proceedings and the conversations between bench and parties at case management stage.
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 Jay at 83 ff holds preliminarily and prima facie, it is. Analysis of Article 7 is bound to be of great importance at trial and /or appeal.
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.
I thought I should post briefly, including for archiving purposes, on one or two developments and recommendations viz the draft UN Business and Human Rights Treaty. This also follows exchanges I had at the w-e on the issue.
See Nadia Bernaz here for an introduction and see here for a document portal. The overview of statements made, shows some attention being paid to forum non conveniens, universal jurisdiction, and applicable law – a summary of those comments re applicable law is here at 84. That same document in Annex II contains the list of experts and further in the Annexes, their views on jurisdiction etc. (incl. forum necessitatis) which anyone wishing to write on the subject (that would include me had I not a basket already thrice full) should consult.
Claire Bright at BIICL also posted her views on the applicable law issues last week, including a proposal to exclude renvoi from the applicable law Article.
Things, they are moving. Including in case-law. That will be my next posting.
Geert.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.
gavc law - geert van calster 