Percival v Moto Novu. Your tutorial on enforcement of judgments under Brussels Ia, courtesy of Justice Murray.
In  EWHC 1391 (QB) Percival v Moto Novu LLC Murray J considers the ins and outs of Article 38 Brussels Ia.
The dispute arose out of an aborted property transaction in Italy. Mr Teruzzi and Ms Puthod are husband and wife. La Fattoria was a “pass-through” company incorporated under Italian law and owned by Mr Teruzzi and Ms Puthod through which the property at the centre of the dispute was temporarily owned. It has since been dissolved.
By an Assignment of Rights of Judgment dated 28 March 2011 (but signed by the parties on 29 June 2011) and governed by the laws of the Commonwealth of Massachusetts (“the 2011 Assignment”), Mr Teruzzi assigned to the respondent, Motu Novu LLC (“Motu Novu”), a Delaware limited liability company, all of his right, title and interest in the Tribunal Judgment and the CA Milan Judgment. There is a dispute between the parties as to whether the 2011 Assignment was also effective to transfer the right, title and interest of Ms Puthod and La Fattoria in those judgments or, if not, whether that fact is relevant to the effectiveness of the registration.
At 8: Title III (the recognition and enforcement Title) involves two stages: i) under Article 39 of the Regulation, a first stage involving only the applicant, who must be an “interested party” and who applies ex parte to the relevant “court or competent authority” listed in Annex II to the Regulation to obtain an order for registration of the foreign judgment in order to permit enforcement locally; and ii) under Article 43 of the Regulation, a second stage, inter partes, during which the respondent (the judgment debtor) has the opportunity to raise certain limited objections by lodging an “appeal” (under English CPR rules this would be an application to set aside the order).
Under Article 44 of the Regulation, the order made on appeal under Article 43 is subject to a single further appeal on a point of law.
At 11: The ex parte stage of the registration process is governed by Articles 38 to 42 of the Regulation. The inter partes stage is governed by Articles 43 to 47. The remainder of section 2 of chapter III of the Regulation, Articles 48 to 52, deals with miscellaneous points that do not arise in this case, other than in relation to Article 48 (undue delay).
The process is further described in detail in the judgment. This is most helpful. Unless one has done one of these oneself, in all Member States the actual procedure is often shrouded in various levels of fog.
Of longer term authority interest is the discussion of the mistake made at an earlier stage, to register all 3 Italian judgments even though under Italian law only one of them was actually enforceable. At 44 Murray J in my view justifiably excuses this error: there is nothing ‘in the Regulation, or otherwise, (that) limits an applicant’s registration of a foreign judgment to the proportion to which he is entitled. I have seen no authority for that proposition.’
What is also of note is the concept of ‘interested party’. At 45:
The term “interested party” is not defined in the Regulation, but a person who is the assignee of a named judgment creditor, even where there are other named judgment creditors, is clearly an interested party. It seems to me fundamentally incompatible with the deliberately limited and mechanical nature of the registration process under chapter III of the Regulation that the registering court or competent authority should be required to enquire into the nature and extent of an applicant’s interest in a judgment, beyond what is necessary to establish prima facie that the applicant is an interested party.
I believe this is right. That the proceedings leading to the Italian Judgment were served on the Original Claimants on 17 January 2011, pre-dating the 2011 Assignment by over two months has therefore become irrelevant (at 48).
Intricate detail of Title III is not often litigated. This judgment is noteworthy.
(Handbook of) EU private international law 2nd ed. 2016, Chapter 2, Heading 2.2.16.
Tigipko. High Court minded to extend CJEU’s Turner anti-suit prohibition to 1996 Hague Convention parties and family law.
Not all of  EWHC 1579 (Fam) RJ v Tigipko is easily understood. Detail is kept private and proceedings were conducted in camera for evident reasons. The case concerns an earlier order to return a child from the Ukraine, which was followed up by an unsuccessful appeal to the Ukrainian courts to recognise this order under the 1996 Hague convention. Application in England now is to beef up the return order.
What is of interest to the blog is the consideration of action against the maternal grandfather. From the little detail in the judgment one can infer that he is complicit in the parental kidnapping. What exactly is being asked from him is not made clear however it is not quite like an anti-suit but rather (at 21) ‘a mandatory injunction requiring a party to commence and act in a foreign suit in a certain way, which is an order.’ Here, at 20, Mostyn J would seem to be minded to apply CJEU C-159/02 Turner v Grovit to Hague Convention States.
That, I would suggest, is a bold move not supported by either authority or spirit of EU law. Full argument on it will be heard later.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1.
New Look: Application of the good old rules for schemes of arrangements, with some doubt over the substantial effects test.
In  EWHC 960 (Ch) New Look Secured Issuer and New Look Ltd, Smith J at H applies the standing rules on jurisdiction over the scheme and other companies which I also signalled in Algeco and Apcoa (with further reference in the latter post). Against the scheme companies jurisdiction is straightforward: they are England incorporated. Against the scheme creditors, English courts apply the jurisdictional test viz the Brussels I Recast (‘a’) Regulation arguendo: if it were to apply (which the English Courts have taken no definitive stance on), would an English court have jurisdiction? Yes, it is held: under Article 8 (anchor defendants). (Often Article 25 is used as argument, too).
At 48 Smith J signals the ‘intensity’ issue: ‘In some cases it has been suggested that it may not be enough to identify a single creditor domiciled in the United Kingdom, and that the court should consider whether the number and size of creditors in the UK are sufficiently large: see Re Van Gansewinkel Groep,  EWHC 2151 (Ch) at ); Global Garden Products at ; Re Noble Group Ltd  EWHC 3092 (Ch) at  to .’ Smith J is minded towards the first, more liberal approach: at 49. He refers to the liberal anchoring approach in competition cases, both stand-alone (think Media Saturn) and follow-on (think Posten /Bring v Volvo, with relevant links there).
At 51 he also discusses the ‘substantial effects’ test and classifies it under ‘jurisdiction’:
‘As well as showing a sufficient jurisdictional connection with England, it is also necessary to show that the Schemes, if approved, will be likely to have a substantial effect in any foreign jurisdictions involved in or engaged by the Schemes. This is because the court will generally not make any order which has no substantial effect and, before the court will sanction a scheme, it will need to be satisfied that the scheme will achieve its purpose: Sompo Japan Insurance Inc v Transfercom Ltd,  EWHC 146 (Ch); Re Rodenstock GmbH,  EWHC 1104 (Ch) at -; Re Magyar Telecom BV,  EWHC 3800 (Ch) at .’
This is not quite kosher I believe. If, even arguendo, jurisdiction is established under Brussels Ia, then no ‘substantial effects’ test must apply at the jurisdictional stage. Certainly not vis-a-vis the scheme companies. Against the scheme creditors, one may perhaps classify it is a means to test the ‘abuse’ prohibition in Article 8(1)’s anchor mechanism.
A useful reminder of the principles. And some doubt re the substantial effects test.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.
A late flag following my much earlier Tweet on  EWHC 325 (Comm) Pipia v BGEO. Moulder J had to consider, as I put it in the tweet, a combination of conflict of laws and EU external relations law. Under CPR 25.12 security for costs must not be sought against parties covered by Brussels Ia or the Lugano Convention. The issue is whether the EU-Georgia association agreement is tantamount to those Conventions.
Article 21 headed “Legal cooperation” specifically refers to the Hague Convention and states that: “1. The Parties agree to develop judicial cooperation in civil and commercial matters as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation and, in particular, the conventions of the Hague Conference on Private International Law in the field of international legal cooperation and litigation as well as the protection of children.” Article 21 merely refers to “developing judicial cooperation” as regards the ratification and implementation of the Hague Convention. The stated aims of the Association Agreement are set out in broad terms in Article 1. They include: “(f) to enhance cooperation in the area of freedom, security and justice with the aim of reinforcing the rule of law and the respect for human rights and fundamental freedoms”.
The Association Agreement does not therefore provide for the enforcement of judgments either on a bilateral basis or through the Hague Convention. At 10 Moulder J therefore does not accept that there is any basis on which the Association Agreement can be interpreted as falling within the express terms of CPR 25.13 (2)(a)(ii). (re: residence in BRU1a /Lugano State).
Neither in her view can the general non-discrimination requirement of the Agreement be read to have an impact on the issue.
Back to the 80s. Arthur Scargill, submission (voluntary appearance) under Brussels Ia and applicable law for statutes of limitation.
In  EWHC 1359 (Comm) National Union of Mineworkers v Organisation Internationale de l’energie et des mines defendant is French-domiciled and represented by its chair, Arthur Scargill. That’s right, many of us whether Brits or not will remember him from the 1970s and 1980 mine strikes. (Unlike what some think, he did not though feature in the Tracey Ullman cover of Madness’ ‘my girl’: that was Neil Kinnock.
Of more immediate relevance for the blog is the discussion at 19 ff on jurisdiction and applicable law.
Defendant is an international body to which a number of trade unions are affiliated. Those unions operate in different countries but all represent workers engaged in the fields of mining and/or energy supply. The name the Defendant uses in English is the International Energy and Mineworkers’ Organisation (“the IEMO”) and it is the successor to the International Mineworkers’ Organisation (“the IMO”) following a merger in 1994.
The proceedings relate to the parties’ respective rights in relation to sums recovered by the Defendant from Mr. Roger Windsor in August 2012 after prolonged legal proceedings in the French Republic and in England. Those proceedings were undertaken in the name of the Defendant but funded in part by the Claimant. There is a shortfall between the sums recovered and the amounts of the principal debt and the legal costs of the proceedings. The parties are in dispute as to the distribution of the sums recovered from Mr. Windsor; as to which should bear any shortfall between the sums recovered and the costs incurred in the proceedings; and as to the amounts which each has paid by way of costs in those proceedings.
The underlying indebtedness which resulted in recovery being made against Mr. Windsor derived from a loan of £29,500 which the Claimant made to him in 1984. He was then the Claimant’s Chief Executive Officer and the loan was made by way of assistance with house purchase following the relocation of the Claimant’s headquarters from London to Sheffield in 1983. There was a repayment of that loan in November 1984 but it is common ground that to the extent that there was such a repayment it came from funds which had been lent to Mr. Windsor. In 1986 the right to recover payment from Mr. Windsor (either of the original loan or of the subsequent loan) was assigned to the IMO.
Claimant argues the courts of England and Wales have jurisdiction by reason of Articles 7(1) and 25(1)(b) Brussels Ia (by virtue of an agreement made in 1990), and that in any event defendant is to be treated as having accepted that the court has jurisdiction to try this matter (an Article 26 ‘prorogation’, ‘submission’ or ‘voluntary appearance’ in other words).
Eyre J at 24 agrees that submission has taken place: CPR rules (Pt11) provide the details the procedure to be followed by a defendant contesting jurisdiction. Defendant did make an application to the court within 14 days of filing the acknowledgement of service, as requested by CPR 11. However, it expressly accepted that the application was to be regarded as relating to the questions of limitation and of the effect of the Release Agreement. In its application it made extensive reference to Brussels Ia but did so in that context. In particular that material was put forward in support of the contention that the claim was statute-barred either by reference to the Limitation Act 1980 or by reference to the French limitation provisions. There was in other words no wider or more fundamental challenge to the court’s jurisdiction and the realisation probably in hindsight that jurisdiction may not be that straightforward, cannot impact on that original application.
Had there not been submission, interesting discussions could have ensued I suspect on the place of performance of the agreement (unless clear choice of court had been made), England as a forum contractus, and I for one shall be using the case in my classes as a good illustration of the ‘conflicts method’ (looking over the fence)
Attention then turns to the issue of applicable law for the time-barred argument: at 26: ‘Defendant also argued that the proceedings were to be regarded as subject to French law and in particular the French limitation provisions which impose a time limit of three years for claims. The Defendant made reference to the Civil Jurisdiction and Judgments Act 1982 and the Foreign Limitation Periods Act 1984. The contention was that French law was applicable because the judgments against Mr. Windsor were obtained in France and then registered in England and Wales. That argument was misconceived. Such an argument might have relevance if the issue were one of the enforcement of the judgments against Mr. Windsor though I make no finding on that question. The current proceedings are not concerned with the enforcement of the judgments against Mr. Windsor but with the distribution of the sums which have been received by the Defendant as a result of the litigation against Mr. Windsor. It follows that the provisions to which the Defendant made reference can have no relevance to the current proceedings. The Defendant made passing reference to the fact that it is domiciled in France but this was not the principal basis of the contention that French law was applicable and without more it would not cause the parties’ dealings to be governed by French law. In those circumstances the parties’ rights and liabilities are to be determined by reference to the law of England and Wales and any questions of limitation are governed by the Limitation Act 1980.‘
I am not privy to the submissions on applicable law, but I am assuming that there must have been some discussion of the impact of the 1980 Rome Convention. Not the Rome I Regulation which would not have applied ratione temporis. That Regulation like Rome II has not altogether straightforward provisions (as I have noted on other occasions) on procedure being covered by the lex contractus. Whether Eyre J classifies the limitation issue as being covered by English law per lex fori or alternatively as lex causae (lex contractus of the 1990 agreement) is not clear.
Back in the 80s I would have never dreamed of bumping into Mr Scargill again in the context of an interesting conflict of laws issue.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 1, Heading 1.3.1, Chapter 2, Heading 2.2.7.
Bonnie Lackey v Mallorca Mega Resorts. High Court throws a wide net for jurisdictional privileges of consumers.
I have waited a little while to discuss (I had tweeted it earlier)  EWHC 1028 (QB) Bonnie Lackey v Mallorca Mega Resorts. It is a good case for an exam essay question and that is what I used it for this morning (albeit in simplified form, focusing on the consumer title).
Defendant is domiciled in Spain, and is hereafter referred to as ‘the Hotel’. Claimant was one of a group of friends who went on holiday to Magaluf in Mallorca, Spain. The booking was made in May 2017 by Ms Donna Bond, who was one of the party and a friend of Bonnie Lackey. The Agency’s Booking Conditions stated
‘references to “you” and “your” include the first named person on the booking and all persons on whose behalf a booking is made …’.
Section A, applicable to all bookings stated:
“By making a booking, you agree on behalf of all persons detailed on the booking that you have read these terms and conditions and agree to be bound by them”.
In my exam question I have left the agency out of the factual matrix. Its presence is immaterial for the case for the agency acts, well, as an agent: contract is between clients and the hotel direct.
The group were staying at the site owned and operated by the Hotel. It is agreed between parties that the Agency’s and Hotel’s marketing meets with the Pammer Alpenhof criteria, in other words that they direct their activity at England. Claimant, Ms Lackey, who is domiciled in England, was seriously injured in the ‘wave’ pool and is now tetraplegic. Damages application is for £9 million given the high cost of care for the now 41 year old claimant.
A first discussion concerned the insurance section (not part of the exam essay)(15 ff). Generali (of Spain) were the hotel’s insurers and had already accepted jurisdiction for the English courts. Their liability though was capped at an absolute max of 0.45 Million Euros – far off the claim. Claimant’s hope was that Article 13(3) Brussels Ia as Clyde point out, might be used for a claim anchored unto Generali. Here, the High Court followed the authority of Hoteles Pinero Canarias SL v Keefe  EWCA Civ 598, see references to EU law there. That case went up to the Supreme Court and thence to the CJEU where it was taken off the roll following settlement. In any event, following Keefe, Davison M in Bonnie Lackey held that jurisdiction was conferred on the English courts by Articles 11 and 13 BIa, (contained in Section 3) which permit a claim here against the insurer and the joinder of the hotel to that claim. Master Davison rejected suggestions for the need of a CJEU reference among others because he also upheld jurisdiction under the consumer title. The essential question here was whether there is a need for complete identity between the consumer referred to in Article 17(1) and the consumer referred to in Article 18(1) BIa.
Davison M suggests there need not, referring in particular to the Regulation’s aims to protect the weaker party, and to rule out as much as possible the risk of irreconcilable judgments.
Defendant’s reference to Schrems was considered immaterial. At 39: ‘Plainly, the consumer bringing the claim must be a beneficiary of the consumer contract or at least within its ambit. That does not mean that she personally must have concluded it. To borrow again from the judgment of Gloster LJ in Keefe, there would be no linguistic or purposive justification for such a restrictive interpretation.’ I am not sure I agree, not at any rate without proper discussion of ‘within its ambit’. The CJEU’s case-law on the protected categories does evidently aim to protect weaker categories and interpretation of same must serve that purpose. However the CJEU at the same time also emphasises the fact that these sections are an exception to the general rule and therefore must not be applied too widely, either.
Master Davison cuts short too extensive a discussion of the ‘ambit’ issue, by referring to the General Terms and Conditions – GTCS: the consumer who booked, accepted these GTCS ‘on behalf of all persons detailed in the booking’. At 40: ‘The hotel deployed no evidence of any kind to displace the effect of these terms, (which, I would add, are standard terms to be expected in a contract of this kind). A person who contracts through an agent has still “concluded” a contact. Thus, all argument about the need for complete identity between the consumer referred to in Article 17.1 and the consumer referred to in Article 18.1 is redundant. In each case it was the claimant, Ms Lackey.’ Whether counsel should have made more noise about this issue I do not know, however I would have expected discussion here of the general respect the Regulation has for privity of contract (which I discuss repeatedly on the blog).
I do not think this case will settle the matter. Its outcome evidently is positive (particularly considering that for Ms Lackey it will really not be straightforward to attend trial in Spain). However its legal reasoning cuts a few corners.
I would expect my students to discuss the need for effective protection of consumers ‘v’ the exceptional character of the section; and privity of contract which the CJEU flags on several occasions. Each with proper case-law references.