Kuhn: ‘Civil and commercial’ viz bearers of Greek bonds. Bot AG applies Fahnenbrock’s ‘direct and immediate effect’ and distinguishes Kolassa.
Advocate-General Bot opined on 4 July 2018 in the case of C-308/17 Leo Kuhn, domiciled at Vienna, who had purchased through an Austrian bank, Greek sovereign bonds. Pursuant to a forced exchanged /haircut carried out by Greece in March 2012, the bonds were replaced with new bonds with a lower nominal value. Mr Kuhn sued to have the initial borrowing terms enforced.
The Advocate-General is of course aware of the similarities with Fahnenbrock – in which he himself had also opined but was not followed by the Court. He first of all points out the similarities between the service Regulation and the Brussels I Recast (both e.g. limiting their scope of application to ‘civil and commercial’ matters), however also flags the specific recitals (in particular: recital 12) suggesting that in the context of the services Regulation the analysis needs to be done swiftly hence only cases which prima facie fall outside the scope of application (including where they manifestly (see the dictum of Fahnenbrock and para 50 of the AG’s Opinion in Kuhn) are not covered by that Regulation.
Coming next to the consideration of the application of ‘civil and commercial’, the facts of this case reflect very much the hybrid nature of much of sovereign debt litigation. In my view yes, the haircut took place within the wider institutional nature of Greece’s debt negotiations with the EU. Yet the ‘collective action clause’ (CAC) which was not part of the original terms and conditions (there was no CAC in the original lex causae, Greek law, but there is one in the newly applicable lex causae, English law: at 63 of the Opinion), was negotiated with the institutional holders of the bond and crammed down the minority holders like Mr Kuhn (at 66). The AG suggest that this does not impact on the qualification of the changes being ‘immediate and direct’, this being the formula employed by the Court in Fahnenbrock.
I am not so sure of the latter but it will be up to the CJEU to decide.
The Advocate General note bene subsequently ‘completes the analysis’ in case the CJEU disagrees with this view, and finds that if the issue is civil and commercial, it can be litigated under Article 7(1)’s rule on special jurisdiction for contractual obligations (the AG at para 88 ff distinguishes the case from C-375/13 Kolassa (in which the CJEU saw no contractual bond between the issuer of the bonds and the acquirer on the secondary market), the obligation at issue, he suggests, having to be performed in Greece. As for the latter element, the Advocate General does refer for the determination of the place of performance to the initially applicable law: Greek law, leaving the later lex causae, English law, undiscussed.
Whether the Court will follow the AG remains of course to be seen.
I was at the Belgian Parliament yesterday for a hearing on the BIBC, following publication of the Government’s draft bill. For those of you who read Dutch, my notes are attached. We were limited to two pages of comments – the note is succinct.
An important change vis-a-vis the initial version (on which I commented here) is that the Court will now be subject to Belgian private international law (including primacy of EU instruments) for choice of law, rather than being able to pick the most appropriate law (arbitration panel style). That brings the court firmly within Brussels I. Also note my view and references on the Court being able to refer to the CJEU for preliminary review.
In C-1/17 Petronas Lubricants, the CJEU held end of June, entirely justifiably, that assigned counterclaims may be brought by the employer in the forum chosen by the employee under (now) Article 20 ff Brussels I Recast to bring his claim. In the case at issue, the employer had only obtained the claim by assignment, after the employee had initiated proceedings.
The Court pointed to the rationale underlying Article 22(1), which mirrors all other counterclaim anchor provisions in the Regulation: the sound administration of justice. That the counterclaim is merely assigned, is irrelevant: at 28: ‘…provided that the choice by the employee of the court having jurisdiction to examine his application is respected, the objective of favouring that employee is achieved and there is no reason to limit the possibility of examining that claim together with a counter-claim within the meaning of Article 20(2)’ (Brussels I, GAVC).
Evidently the counterclaim does have to meet the criteria recently re-emphasised in Kostanjevec.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 126.96.36.199.
Szpunar AG in C‑379/17 Società Immobiliare Al Bosco: the impact of the lex fori executionis re preservation orders.
Is it compatible with Article 38(1) Brussels I (and the equivalent provisions in the Brussels I Recast) to apply a time limit which is laid down in the law of the State in which enforcement is sought, and on the basis of which an instrument may no longer be enforced after the expiry of a particular period, also to a functionally comparable instrument issued in another Member State and recognised and declared enforceable in the State in which enforcement is sought?
A preservation order had been obtained in Italy. It had been recognised in Germany. However applicant then failed to have it enforced within a time-limit prescribed by the lex fori executionis.
On 20 June Szpunar AG in C‑379/17 Società Immobiliare Al Bosco opined (Opinion not yet available in English) that the lex fori executionis’ time limits must not obstruct enforcement. Moreover, he suggests that his view is not impacted by the changes to exequatur in the Brussels I Recast, and that his Opinion, based on the effet utile of the Brussels regime, has appeal even outside the case at issue (in which Italian law has a similar proviso).
A small but significant step in the harmonisation process of European civil procedure.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.16
In  EWHC 1670 (Comm) BNP Paribas v TRM, the High Court essentially had to hold on its jurisdiction in the face of competing choice of court clauses in an ISDA MAster Agreement (the courts of England; and lex contractus English law) and the attached Financing Agreement (the courts of Turin).
Knowles J dissected the agreements in relation to the claims made by the parties (again highlighting the relevance of formulation of claims): at 27: where, as here, there is more than one contract and the contracts contain jurisdiction clauses in favour of the courts of different countries, the court is faced with a question of construction or interpretation. And at 54: ‘The parties agreed jurisdiction in favour of the English Court under the Master Agreement. The fact that TRM further committed itself in the Financing Agreement to comply with its commitments under the Master Agreement does not mean that commitments under the Master Agreement and swap transaction are any the less subject to the jurisdiction agreed under the Master Agreement, or any the less able to be adjudicated upon and enforced by proceedings in England.’
Application to reject jurisdiction of the English Courts dismissed.
One or two of you are aware I have written a whole handbook on EU waste law. That now needs updating as a result of the publication of the adopted ‘Circular Economy package’ – although implementation dates are some time off so if you do have a copy, do not discard it just yet.
The package includes amendments to the ELV, Batteries, WEEE, Landfill, packaging and packaging waste, and waste framework Directive.
I am hoping to write a paper on the package which will summarise the developments – watch this space.
Handbook of EU Waste law, 2nd ed. 2015: all chapters 🙂 .