Porr Bau. Medina AG on waste and end-of-waste status of excavated soil.

Medina AG’s end June Opinion in C-238/21 Porr Bau GmbH v Bezirkshauptmannschaft Graz-Umgebung will delight waste lawyers for the case once again evolves around the definition of ‘waste’ as applied to excavated soil. Statute to be interpreted is the WFD or the Waste Framework Directive 2008/98. CJEU SAPPI is a recent judgment  often referred to by the AG.

Porr Bau, the applicant in the main proceedings, is a construction undertaking established in Austria. In July 2015, certain local farmers asked it to supply them, against payment, with excavated soil and to distribute it over their properties. The purpose of the farmers’ request was to level their agricultural land and improve their cultivation areas, thereby increasing yields. Porr Bau applied to the relevant authorities for a statement that the soil was not to be considered waste so as it could avoid a number of taxes. That authority disagreed and also held that the soil, which it considered to be waste, had not yet reached end-of-waste status.

The AG (36) opines that it should not be assumed that all excavated soil by a construction undertaking is by default to be discarded, and that it is difficult to conclude that, under circumstances such as those of the present case, the intention of a construction undertaking is to discard excavated soil that has been carefully selected, subjected to a quality control and supplied as uncontaminated top-quality material in order to attend to a specific request from local operators in need of that material. He also suggests, less convincingly in my view, (38 ff) that such soil may be considered a by-product of the construction sector. 

Should he not be followed on the waste definition issue, the AG suggests and he is right in my view that national law must not deny end-of-waste status until the holder fulfils certain formal requirements with no environmental relevance such as record-keeping and documentation obligations.

Geert.

EU Waste law, 2nd ed 2015, 1.20 ff.

 

Van Heck v Giambrone. In the absence of an EU harmonised approach, whether an issue is finally determined by foreign courts (relevant to lis pendens purposes) is a matter of national civil procedure, and as foreign law needs to be proven.

This one is overdue for review on the blog. In Van Heck v Giambrone & Partners Studio Legale Associato [2022] EWHC 1098 (QB) the High Court confirmed in appeal the refusal of a stay on Article 29 Brussels Ia lis pendens grounds in a case concerning a barrister’s claim for professional fees. The defendant in the English proceedings had initiated an Italian claim, prior to the English claim, in which it denied liability for the fees: a classic mirror claim. The court of first instance in Palermo had denied it had jurisdiction. That judgment went to appeal, where it is pending however the first instance, sole judge in England held that the jurisdictional issue had been conclusively dealt with and was not in appeal. Hence that no ‘lis’ was still pending for Article 29 to apply.

Soole J [75] held that the critical question for determination was whether the proceedings in the court first seised, i.e. the Palermo Claim, had been ‘finally determined in relation to its jurisdiction’. Whether or not that is the case, in the absence of a European harmonised approach to whether the national courts are still seized of the jurisdictional issue, is a matter of national procedural law [80]] which the E&W judge is to assess as a matter of foreign law hence fact, to be proven by the parties. That finding is a factual issue which the judge held upon with the help of relevant expert and  is not within the appeal.

Stay therefore dismissed.

Geert.

Deane v Barker. Foreign law is fact leads to interesting comparative discussion on statutory interpretation (and the Spanish language).

In Deane v Barker & Ors [2022] EWHC 1523 (QB) concerns the frequent and upsetting scenario of falls in rented holiday accommodation. Claimant is habitually resident in England, proceedings were issued in December 2019, and subject therefore to Brussels Ia. Any jurisdictional challenge would have been tricky (but not impossible, seeing as 2 of the defendants are based in Spain; one of them one presumes is sued in E&W on the basis of BIa’s insurance title, the other (the Spanish company which manages the property) on the basis of the anchor mechanism or perhaps forum contractus). At any rate, there is no jurisdictional objection.

The owners of the villa, like the claimant, are domiciled in England and they are being sued on the tort of negligence which, per A4(2) Rome II, makes English law in principle the applicable law to most of the claim (there is also an additional contractual claim against the property manager, said to be subject to Spanish law per the cascade of A4 Rome I; and a claim in tort subject to Spanish law per A4(1) ).

Issues such as the standard of care and breach of duty viz the main claim will be informed by whether the staircase complied with Spanish law safety standards – CTE: that is the result of A17 Rome II. The issues for this preliminary discussion, are [21]

Issue 1 Whether the works conducted at the villa and/or on the staircase were refurbishment works (such as to trigger the application of the CTE) or merely maintenance works (such as not to trigger the application of the CTE)? Issue 2 Whether the villa (and the staircase within it) was for general or public use (such that the material provisions of the CTE would presumptively apply) or for restricted use (such that the same provisions would not apply)? Issue 3 Whether, if the material provisions of the CTE apply, this would in principle give rise to a breach of duty in English and Spanish law?

Issue 1 and 2 depend on the interpretation of foreign law which, in common law courts, is fact and must be proven. The discussion here seems to have turned on lengthy debate on the exact meaning of definitions. That this should be discussed so intensely does not surprise me (unlike the judge who suggested it was unusual): if a definition is of great relevance to the outcome of the case, why should it not be extensively discussed.  The debate also engages the methods of interpretation by the Spanish courts: this leads [38ff] to expert views and discussion that are  interesting with a view to comparative statutory interpretation, and will be of relevance to those with an interest in languages and law.

Geert.

A primer on the latest climate litigation judgment: Friends of the Earth et al v UK Government. Victory on transparency and data grounds.

Others will no doubt analyse Friends of the Earth Ltd & Ors, R (On the Application Of) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWHC 1841 (Admin) at much more length. I just thought I would pen down my thoughts when reading the judgment.

The case is a further judgment holding Governments to account for not addressing climate change challenges properly. The United Kingdom being a dualist country (all the more so following Brexit), the arguments do not much feature the Paris Agreement directly. Rather, claimants aim to hold Government to how Parliament said it should act in addressing climate change  in the Climate Change Act 2008 – CCA 2008, and, additionally, through the requirements of the European Convention on Human Rights, whether or not in combination with the UK Human Rights Act. The core of the exercise and judgment therefore is one of statutory interpretation.

Of note first of all is that most of the claimants’ arguments were rejected and one assumes therefore that they will be seeking permission to appeal (just as the Government will).

The judgment kicks off with the oblique reference to trias politica. Holgate J [22] cites R (Rights: Community: Action) v Secretary of State for Housing Communities and Local Government [2021] PTSR 553 at [6]: –

“It is important to emphasise at the outset what this case is and
is not about. Judicial review is the means of ensuring that public
bodies act within the limits of their legal powers and in
accordance with the relevant procedures and legal principles
governing the exercise of their decision-making functions. The
role of the court in judicial review is concerned with resolving
questions of law. The court is not responsible for making
political, social, or economic choices. Those decisions, and those
choices, are ones that Parliament has entrusted to ministers and
other public bodies. The choices may be matters of legitimate
public debate, but they are not matters for the court to determine.
The court is only concerned with the legal issues raised by the
claimant as to whether the defendant has acted unlawfully.”

And [194]: judicial review in this case must not be merits review and the judge must adopt a ‘light touch’.

Starting with the ECHR arguments, there were summarily dismissed [261] ff. They engaged with Article 2 ECHR’s right to life, Article 8’s right to family life (these two being the classic anchors for environmental rights in the ECHR) and Article 1 of the first protocol (‘A1P1′)’s right to [protection of property. Holgate J holds that the claimants’ argument on the ECHR ‘goes beyond permissible incremental development of clear and constant Strasbourg case law’ [275] and [269-270] that the Dutch Urgenda decision offers a narrow window of ECHR relevance to climate law which does not open in the current case (with [270] in fine an explicit warning that Dutch authority, it being a monist country, should not hold much sway in England and Wales).

A first ground discussed the role of quantitative v qualitative assessment and whether and the degree to which the Minister was to show the targets could be met quantitatively. The judge held that ‘the CCA 2008 does not require the Secretary of State to be satisfied that the quantifiable effects of his proposals and policies will enable the whole of the emissions reductions required by the carbon budgets to be met. The [statutory] obligation …does not have to be satisfied by quantitative analysis alone.’ [193].

However one of the grounds on which the challenge did succeed is the quality of the input for the Minister’s decision: this overall briefing was held to have omitted data the minister was legally obliged to take into account, and which was not insignificant. As a result the Minister failed to take it into account as a material consideration, so that his decision was unlawful (compare [200]). [221] the briefing was held to have been wanting, in that it failed to identify under the quantitative analysis the contribution each quantifiable proposal or policy would make to meeting the UK’s carbon budgets; and it failed to identify under the qualitative analysis which proposals and policies would meet the 5% shortfall for one of the carbon budgets and how each would do so.

[246] ff (where Holgate J does refer, albeit with statutory distinguishing, to relevant Irish cases), another partial ground is upheld namely that of proper information given to Parliament (and therefore also the public; both a sore point in the current UK Government) on the data reached for the Ministerial conclusion and data on the pathways for delivery themselves. [257]: ‘contributions from individual policies which are properly quantifiable must be addressed in’ the report given to Parliament and hence the public.

The result therefore is important in terms of accountability and transparency (where unfortunately no mention was made of the Aarhus Convention which continues to apply to the UK), with the latter element also being inspirational for other jurisdictions where Governments have been told to go back to the climate change drawing board.

Geert.

Nagel v PDC. Permission for service out withdrawn on forum non and disclosure issues.

W Nagel (a firm) v Pluczenik& Ors [2022] EWHC 1714 (Comm) concerns litigation in the diamond sector. It is an appeal against permission for service out which triggers various jurisdictional considerations, including forum non, as well as disclosure and ‘clean hands’ concerns.

The judgment is a good illustration of claim and counterclaim serving jurisdictional purposes.

Defendants are a Belgium-domiciled diamond manufacturer (PDC) and its equally Belgium-based managing director Mr Pluczenik . Claimant Nagel is a UK based diamond broker. Nagel is defendant in Belgian proceedings brought in May 2015 by defendants in the E&W proceedings, who used a Belgian-based anchor defendant to sue the English claimant in Belgium (A8(1) Brussels Ia); Nagel are also defendant in a September 2015 Belgian claim brought by the same claimants and since consolidated by the Belgian courts. Nagel itself issued a claim against PDC in the English High Court in March 2015, did not serve it, but sent a letter before action which indicated that it intended to bring proceedings in England.

In June 2015, as direct reaction to the Belgian Claim, Nagel amended the English Claim to seek negative declaratory relief to the effect that it was not liable in respect of a number of contractual duties.

In July 2017 Popplewell J found for Nagel, including in respect of the negative declaratory relief: W Nagel (A Firm) v Pluczenik Diamond Company NV [2017] EWHC 1750 (Comm). His judgment was confirmed by the Court of Appeal: [2018] EWCA Civ 2640, payments were made and the E&W proceedings ended.

Come forward third defendant in the current E&W proceedings, Ms Shine, who was the CEO of a subsidiary of De Beers – De Beers Trading Company. She has never worked for either of the Claimant or the First or Second Defendants, but she gave a statement to the Belgian court in 2017, supporting PDC. Her statement was provoked it seems by the outcome of the E&W proceedings which did not match her recollection. Nagel originally objected to jurisdiction solely on the ground of lis pendens (A29-30 BIa).

In July 2020 (one can see that in this case the speed of Belgian proceedings is nothing like in the case I reported yesterday) the Belgian claimants put forward their arguments on jurisdiction based on Antwerp being forum contractus per A7(1) BIA (they argued centre of gravity or characteristic performance was in Antwerp) [20].

In an interim, February 2021 interim judgment the Belgian court held it had jurisdiction on the basis of A7 forum contractus. It considered the lis pendens issue noting that it could no longer apply now that the English Claim was concluded. It then concluded that it had jurisdiction to determine the dispute. The Court noted that “the defendants apparently do not (or no longer) dispute” that the services were performed in Antwerp. 

Nagel then dropped the jurisdictional arguments and at hearings 7 May 2021 onwards went for res judicata, arguing …the English judgment has the status of res judicata with regard to the present proceedings, so that the court on the basis of Article 23 and 25 Judicial Code [the Belgian CPR, GAVC] is currently prohibited from again deciding on the claim…” [30]. End of May 2021 Nagel then commenced the present claim in the Commercial Court. The claim alleges that the Belgian Claim constitutes a tortious abuse of process and forms part of an unlawful means conspiracy between the Defendants. Ms Shine is the Third Defendant. It is said that the provision of the Shine Statement and its (lack of) merits justify an inference that she was involved in the abuse of process and the conspiracy [31].

In September 2021 Moulder J gave permission for service out (required post Brexit) on the basis that the claim met limb (a) of the tort gateway viz “damage was sustained, or will be sustained, within the jurisdiction” (Nagel trades from England, paid sums to Belgian lawyers from a bank account in England and has consequently suffered loss here; she also UKSC Brownlie for the damage gateway). She refused permission on two other gateways – necessary and proper party and tort committed within the jurisdiction. It is alleged by defendants that Moulder J was not given any indication of the Belgian interim judgment.

The Belgian Claim is now scheduled for trial in January 2023.

[64] Cockerill J holds that the Belgian findings on jurisdiction and the existence of a judgment which dealt in terms with jurisdiction should on any view have been put before Moulder J and [65] that this breach of duty of disclosure was deliberate. She also holds [70] that the picture sketched of the Belgian proceedings being ‘in limbo’ was plainly wrong: they were definitely active, and that it had been wrongfully suggested that the Belgian judge was not going to deal with the res judicata issue. On that basis, she would have set aside permission for service out [75] however this point turns out to be obiter for the reason for reversal of the order is that E&W are not the appropriate forum [76] ff. Relevant factors being that (i) the jurisdiction of the Belgian Courts appears to have been established by PDC and accepted by Nagel (at least on a prima facie basis), (ii) the Belgian claim is progressing and (iii) there is scope for determination of a res judicata issue (which replicates the issues sought to be brought here) and (iv) a determination of the res judicata issue is (and was) likely to be determined relatively soon.

Moreover, Belgium clearly is an appropriate forum [79] the Belgian Claim is one brought by a Belgian company (PDC), arising out of services provided in Belgium (as the Belgian Court has held), alleging fraud on the Belgian Court. (The serious issue to be tried discussion leads to an analysis of Article 4 Rome II as retained EU law).

A good illustration as I mentioned of claim, counterclaim, and of course the clean hands principle.

Geert.

Simon v Tache. Interesting issues on post-Brexit Brussels lis pendens, and on moment of seizure in amended claims.

Simon v Tache & Ors [2022] EWHC 1674 (Comm) is an interesting judgment which one assumes is very appealable given the untested Withdrawal Agreement and other angles.

At issue is i.a. whether Article 67 Withdrawal Agreement requires both sets of proceedings which are a candidate for Brussels Ia’s Article 29-30 lis pendens /related cases provisions, to have been pending prior to Brexit Implementation Date and what date needs to be considered the date of seizing.

Claimants argue, that the Belgian Proceedings, which I outline below, could only have become related on 3 May 2021 by the lodging of the 3 May Submissions, and that the English Court only became seized of the English proceedings after 31 December 2020, either on the making of Service Out Application or on the subsequent issue of the English Proceedings. On this basis it would not be open to the Defendants in the English proceedings to rely upon Article 67 as applying Articles 29 and 30 of Brussels Recast to the English Proceedings.

Claimant is a French national living in London. She is a medical doctor who previously practiced. She now focuses on art and design. Defendants are Belgian nationals, contemporary art dealers with a gallery website in English. This element notably raises issues whether the contract could qualify as a consumer contract. Defendants deny this, citing the very example I often give in class when teaching the relevance of language in the context of the Pammer Alpenhof criteria: the very use of English on websites, particularly in the art, design or hospitality sector in cities like Brussels are hardly an indication of direction of activities outside the location. The contract being a consumer contract seemingly was not flagged in claim form or submissions, it only came up at hearing.

Claimant and defendants having met in Paris, various artworks were delivered to claimant’s Paris address. Lex contractus is disputed [20]. The relationship soured and Belgian libel proceedings by defendants in the E&W proceedings were initiated end of October 2020. End of March 2021 Dr Simon was given permission to serve out. Her application mentioned the Belgian proceedings but argued that these were unrelated, ia in light of the different (non)contractual basis of those proceedings [35]. A claim form was sent to defendants’ lawyers early April 2021 and the claim form was filed 10 May 2021. On 3 May the defendants in the E&W proceedings amended thier Belgian claim, adding a request for declaration of non-liability: in other words they requested the Belgian court to declare that there was no wrongdoing on their part in the contractual relationship.

End of October 2021 the first instance Belgian court held it does have jurisdiction, but that no damage was proven. That court however declined to rule on the claim for a negative declaration because the allegations were before the English court. The Belgian court’s dictum on that issue is very brief, declaring only ‘“Whereas the ensuing dispute was never resolved and is currently the subject of a lawsuit in London, such that this court will refrain from commenting on the merits of that case.” : it did not specify why which clearly is a failure on its part.

[50] it is the Defendants’ case that the Belgian court was first seized on 3 May 2021, before the E&W Court was first seized on 10 May 2021 on the issue of proceedings. On the other hand, it is Dr Simon’s case that the E&W Court was first seized on the making of the Service Out Application and/or the making of the Service Order on 30 March 2021, alternatively on the issue of the Claim Form on 10 May 2021, but that the Belgian court was only seized when the Defendants’ claim for a negative declaration was filed on 5 August 2021.

It is undisputed [52] that as a matter of Belgian procedural law, it would be open to Dr Simon to raise a counterclaim in respect of the causes of action that she seeks to pursue by the English Proceedings in the Belgian Proceedings, and to do so notwithstanding that they are now before the Belgian Appeal Court. Expectations of the Court of Appeal ruling varied between one and five years [54] however in the end that Court surprised all and held after the English judge’s draft judgment had been circulated.

In November 2021 Dr Simon at her turn added a claim to her English claim form, one in dishonesty.

The judge holds [74] that BIa continues to apply to new claims added to proceedings commenced prior to 31 December 2020 and claims against new defendants joined to such proceedings after that date. He refers to  On the Beach Ltd v Ryanair UK Ltd [2022] EWHC 861 (Ch) in support (acknowledging that that case is not authority to him and that the parties in that case were in agreement on the issue).

On the issue of seizure, the judge holds [92] that this must be linked to the formal lodging of a claim form in order to issue proceedings, rather than the taking of some preliminary step to obtain permission with regard to the service of proceedings which might never be issued. I have sympathy with the view [85] that this gives the other party a great opportunity to torpedo proceedings.

“the same cause of action, between the same parties” is judged, despite an acknowledgment of EU autonomous interpretation, with reference to Belgian procedural law and expert reports on same [103]. That must be a vulnerable position.

Conclusion on A29 is that a stay must be ordered [114] and obiter [120] that one would have been ordered on A30 grounds.

Service out is discussed [121] in a bit of a vacuum because of course is BIa applies then service out is not required. Here reference is made to Rome I’s applicable law as an element of the gateway requirements (contract governed by English law) (held: no: Belgian law is prima facie lex contractus [134], with discussion ia of the consumer title. As a pudding, forum non conveniens is considered and this is surely where the jurisdictional arguments become excessive per Lord Briggs’ speech in Vedanta.

Then comes the final pousse-café: the Belgian Court of Appeal, unexpectedly fast, found it had no jurisdiction (this may be appealable to the Belgian Supreme Court), leaving the possibility of a negative conflict of jurisdiction which the parties were invited to comment upon.

A case to watch.

Geert.

The Belgian DPA yet again on processing of activities and Article 3(1) v 3(2) GDPR. Google appeals a prime example of circular reasoning.

The Belgian Data Protection Controller (DPA)’s decision of March 2022 (thank you Peter Craddock for alerting me to it at the time) has been travelling with me since it was issued mid March 2022: a late posting, I realise. There is however follow-up because Google have appealed.

The case concerns a classic ‘right to be forgotten’ aka delisting request, which Google refused, made by a practising solicitor with a criminal conviction and disciplinary measures taken against him. Google was rebuked, but not fined, for not dealing with the request promptly. However in substance the DPA agreed with Google’s refusal to delist, citing the link of the convictions to the applicant’s current profession, the recent nature of the conviction, and the severity of the facts.

This post however wants to signal the issue for which Google have appealed: the territorial reach of the GDPR under Article 3(1) v 3(2) GDPR,  as also explained in the European Data Protection Board (EDPA) December 2019 guidelines on the territorial scope of the GDPR (and something which the Belgian Court of Appeal has grappled with before, albeit not in the 3(1) v 3(2) setting).

Article 3(1) of the GDPR applies to “the processing of personal data in the context of the activities of an establishment of a controller or processor in the Union, regardless of whether processing takes place in the Union or not“. Article 3(2) applies the GDPR to “the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to (a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union, or (b) the monitoring of their behaviour as far as their behaviour takes place within the Union“.

Google Ireland was fast out off the picture by consent among the parties and the DPA [39-40]: it had no role at all in any of the processing. Google LL.C. admitted [44] that Article 3(1) applies to it, while Google Belgium [53] posits that as a mere internal consultancy /lobbying outfit for the Google group, it, too, has no role in the processing of the data.

Citing earlier decisions and CJEU Google Spain, the DPA nevertheless takes a broad view of ‘data processing’, arguing [64] that Google Spain identifies an ‘inextricable link’ between the various units of a group as sufficient to trigger DPA jurisdiction, even if one of these units has no role in the data processing.  While this reasoning ([68] and [71] in particular) suggests the wide notion of inextricable link triggers Article 3(1), in subsequent paras ([69] in particular) suggest the opposite causality: suggesting that because Article 3(1) applies, the activities are inextricably linked. Clearly, as Peter Craddock had pointed out before (I read it at the time but cannot find the source anymore I fear) that is a case of circular reasoning.

For Google, application of the GDPR to the US based entity as opposed to the EU based ones clearly is of significant difference. Its appeal with the Court of Appeal will be heard in the autumn.

Geert.

EU private international law, 3rd. ed. 2021, 2.256 ff.

 

Dutch court finds Seafarers ‘Dockers’ clause falls within European competition law ‘Albany’ collective bargaining exception.

Many thanks Ruwan Subasinghe for alerting me to the judgment: Early July the courts at Rotterdam held in ITWF, Nautilus International and FNV v Marlow Navigation Netherlands BV et al that the International Transport Workers Federation (IT(W)F) Non Seafarers’ Work Clause, also known as the Dockers’ Clause, falls within the CJEU ‘Albany’ exception of EU competition law. The case was brought against a number of shipowners who disregarded the clause.

In the interest of full disclosure, I should note I acted as expert witness for the ITWF.

The dockers’ Clause, negotiated between trade unions and employers, forms an integral part of a set of agreements primarily entered into by ITF and the Joint Negotiation Group (JNG – represent maritime owners from across the world) . In short  the clause amounts to a ban on ships’ crews carrying out work relating to securing and releasing the load on a ship (often: containers), collectively known as ‘lashing’ /’unlashing’ work. Tiredness and fatigue are some of the biggest risks for seafarers, who are expected to rest in the ports, not carry out the specialised and dangerous work of dockers. 

The Dockers’ Clause, together with the other employment conditions, was the result of an intensive and multi-year period of negotiations between a large number of social partners. Exemptions are possible under conditions.

Collective agreements of course are prima facie suspect under EU competition rules. The Albany ‘exception’ of the Court of Justice of the European Union concerns the core criteria which the CJEU employs in its competition law assessment of the activities carried out by organisations that organise social protection for workers in a given sector. The Court held (at 60) that

It therefore follows from an interpretation of the provisions of the Treaty as a whole which is both effective and consistent that agreements concluded in the context of collective negotiations between management and labour in pursuit of such objectives must, by virtue of their nature and purpose, be regarded as falling outside the scope of Article 85(1) of the Treaty.

Article 85(1) is what is now Article 101 TFEU, and by ‘such objectives’ the Court (at 59) means ‘social policy objectives’.

Note, for conflicts lawyers, the application of Article 4-4 Rome I, and, viz some of the defendants, Article 4(1) Rome II, to conclude application of Dutch law.

The Court at Rotterdam held that the seafarers clause fits squarely within the Albany exception: it is ‘entered into in the framework of collective bargaining between employers and employees’, and it improves the employment and working conditions of workers’. Note at 4.38 the reference to these agreements necessarily involving a ‘package deal’ which implies that the interest of all involved will be weighed and that as a result of the collective bargaining, some of those concerned will get a better deal than others. However both the CJEU and the Court at Rotterdam leave that assessment to the negotiation process.

Further arguments based ia on free movement of workers, services, establishment  were rejected. (A narrow Covid19 exception was accepted for a narrow set of circumstances).

An important judgment for those interested in competition law and collective bargaining.

Geert.

The São Paulo Panels. Szpunar AG on declaratory actions and the jurisdictional impact of their contractual roots.

First Advocate-General Szpunar opined in C-265/21 AB, AB-CD v Z EF a few weeks back. The case-name is a victim of the anonymisation rules and I propose we name it ‘the São Paulo Panels’, this being its ultimate subject: 20 panels exhibited at the 1977 São Paulo Art Biennial (this much information one can read in the publicly available referral decision and the AG Opinion). Tobias Lutzi has summary of the most relevant sections in the Opinion here and in the interest of disclosure I should add I am instructed for Belgium in the case.

Early in the 1980s the original German artists handed over the panels to an art gallery in Belgium. The nature of the deposit (sale or deposit) is contested. The owner of the art gallery later sold the panels to her daughter and son-in-law, who requested Christie’s of London to sell the panels. That sale has been suspended since 2013 (hence the case is subject to Brussels I, not Brussels Ia however there is no material difference) in light of one of the original artists, the wife (her husband had passed away) claiming ownership; the wife in the meantime has passed away, too, and the proceedings are continued by their son. (The CJEU may find this of note, seeing as the original proceedings at the outset involved at least one of the original contracting parties).

Current proceedings result from the Belgian-domiciled claimants having requested the Belgian courts to confirm their ownership of the objects. The Belgian courts are asking the CJEU whether the case involves A7(1) special jurisdiction for contract and if so, where the forum contractus lies. Claimants argue the claim engages A7(1) on the basis of the original contract which they argue is one in sale, with performance in Belgium. The defendant argues the original contract was one of deposit, and that a declaratory claim such as the one at issue, with the parties to the proceedings not being parties to the original contract, does not engage A7(1) at all, instead only being subject to Article 4, domicile of the defendant.

Clearly the questions will enable the Court to clarify whether its Feniks, Flight Right etc case-law, with their extended notion of ‘contract’, applies across the board, without much need to take the specific context of those cases into account; or whether there ought to be some restraint on the reach of the forum contractus. One assumes it may seek some inspiration in its approach to distinguishing contracts and torts, eg in Wikingerhof (or Sharpston AG’s earlier ‘ancestry’ test for the Rome I and II distinction in Ergo). Without restraint, CJEU De Bloos’ great window of opportunity for claim formulation hence forum shopping is likely to be reinvigorated.

The AG (44) ff explains the initial restrictive approach to forum contractus per CJEU Handte, and (53) confesses not to be a fan of a restrictive interpretation of A7, arguing such interpretation would undermine the Regulation’s intention, in formulating the special jurisdictional rules, of ensuring that courts with a particular suitability to hear the case will have jurisdiction to do so. The alternative view is that too wide an interpretation undermines the Regulation’s DNA of predictability and the statutorily expressed view that A4 forum rei is the core principle of the Regulation, and the established case-law in support of this principle that exceptions to it need to be restrictively interpreted. The AG refers more than once in his Opinion to scholarship of one of my Doktorkinder, Dr Michiel Poesen, to substantiate the scholarly debate.

He subsequently discusses the later wider CJEU wider approach, starting with Engler and culminating in flight right, concludes that the current claim falls within that wider framework but does emphasise that the contract must lie at the foundation of the claim: ‘et sur laquelle se fonde l’action du demandeur’ (75).

(76) ff discusses the important question how far the judge, faced with opposition to her /his jurisdiction, must go in the consultation or interpretation of the contract, to establish whether or not the claim finds its foundation in contract. Per Kolassa and Universal Music, both the claimant’s and the defendant’s arguments to that effect are said by the AG to be of relevance. (83) Seeing as both parties argue their position with reference to a contract, the AG advises that on the facts of the case, the contractual foundation is clear; (84) that the contract which is the initial source of the rights and obligations (“la source originale des droits et obligations litigieux”) is the anchor point for the forum contractus, i.e. the disputed 1980s contract and not the later contract of sale; and (86) ff, that the judge will have to apply the classic A7(1) cascade: if the initial contract cannot be qualified as one for the sale of movable goods or a service, the CJEU Tessili Dunlop method of looking over the fence will have to be applied. (The referral decision is short on factual elements to help the AG opine on this point).

Fun with contracts…..

Geert.

EU Private International Law, 3rd ed. 2021, 2.419 ff.

The CJEU in Allianz. Among others linguistic arguments lead to the Court confirming Brussels Ia identifies territorial jurisdiction in direct action against an insurer.

In Case C-652/20 HW, ZF, MZ v Allianz Elementar Versicherungs AG, the CJEU held (no English version of the judgment is as yet available) end of June that A11(1)(b) Brussels Ia, determines jurisdiction not just of ‘the’ courts in a Member State (leaving territorial jurisdiction to be determined by national civil procedure rules) but rather of a specific court within that Member State. The judgment is a bit longer than might have been expected: that is because the referring judge did not qualify one or two elements which, particularly in an insurance context, can be quite convoluted. (Such as the nature and deliniation of ‘beneficiaries’, ‘insureds’, ‘victims’).

In accordance with the Article, ‘An insurer domiciled in a Member State may be sued: …(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the claimant is domiciled’.

[35] The Court observes that in the Romanian (the language of the case) as well as the English and Finnish version of Brussels Ia use the plural ‘courts’ while in the other language versions, the singular is used. (Regular readers of the blog may be familiar with my earlier work on languages and interpretation). Coupled with the indications of territorial jurisdiction in the relevant section of the Report Jenard, and with the similar language in A7(1) and (2) and relevant case-law there (ex multi: Kareda, Volvo), the CJEU concludes that where A11(1)(b) and all its conditions apply, the Article identifies both national and territorial jurisdiction indeed.

Geert.

 

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