Posts Tagged 1215/2012
Ergo, and Haras des Coudrettes. Provisional measures under Brussels I Recast and Lugano before the French Supreme Court.
Thank you Nicolas Contis and Leonardo Pinto for reporting judgments by the French Supreme Court (Cour de Cassation) 16-19-731 Ergo Versicherung v Volker and 16-27.913, Haras des Coudrettes v X, both held on 14 March 2018.
The judgments concern the interpretation of Article 35 Brussels I Recast c.q. Article 31 of the Lugano Convention (the second case concerned a defendant domiciled in Switzerland) on provisional measures.
Please refer to Nicolas and Leonardo for a summary of the facts the judicial proceedings in the case. In neither cases do the French courts have subject-matter jurisdiction: in Ergo, the German courts do by virtue of choice of court; in Haras des Coudrettes, the Swiss courts do by virtue of Article 5(3) Lugano (locus delicti commissi being there; and direct damage also having occurred there hence leaving only indirect, financial damage with the French owner of the horse at issue, even if the exact nature and size of those direct injuries could only be later established in France).
In Ergo, the Supreme Court held that ‘la juridiction française (est) compétente pour ordonner, avant tout procès, une mesure d’expertise devant être exécutée en France et destinée à conserver ou établir la preuve de faits dont pourrait dépendre la solution du litige. Appointing an expert to assess any damages caused to a solar plant, and to explore liabilities for such damage, falls within Article 35 Brussels I Recast. I would agree with such a wide reading as I have discussed before in my review of the Belo Horizonte case. The Supreme Court does not consider relevant to the outcome claimants’ argument, that under Article 2 Brussels I Recast, provisional measures only enjoy free movement under the Regulation when ordered by a court with subject-matter jurisdiction. Indeed in view of the Supreme Court the Court of Appeal need not even consider whether it has such jurisdiction. Given that the form Annexed to the Regulation includes a box requiring exactly that, this may seem odd. One assumes the Court held so given that the forensic measures ordered, can be rolled out entirely in France: no need for any travel at all.
In Haras des Coudrettes, the Supreme Court annulled because the Court of Appeal had established subject-matter jurisdiction for the Swiss courts, and had subsequently not entertained the possibility of provisional measures, even though the object at issue (the mare: ‘la jument’) is in France: ‘Qu’en statuant ainsi, alors qu’elle relevait que la mesure sollicitée avait pour objet notamment d’examiner la jument située en France, la cour d’appel, qui n’a pas tiré les conséquences légales de ses propres constatations, a violé les textes susvisés.‘
and ‘une mesure d’expertise destinée à conserver ou établir la preuve de faits dont pourrait dépendre la solution du litige, ordonnée en référé avant tout procès sur le fondement du second de ces textes, constitue une mesure provisoire au sens du premier, qui peut être demandée même si, en vertu de cette Convention, une juridiction d’un autre Etat lié par celle-ci est compétente pour connaître du fond’:
expert findings which aim at maintaining or establishing facts upon which the eventual solution of the litigation may depend, fall within the scope of provisional measures and may be ordered even before any entertainment of subject-matter jurisdiction. Again, the fact that for the effective roll-out of the provisional measures no other State need be engaged, must have relevance in this assessment.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.15.
I called Bobek AG’s Opinion in C-337/17 ‘solid’ – by which I also implied: convincing. Is the actio pauliana by a Polish company against a Spanish company, which had bought immovable property from the former’s contracting party, one relating to ‘contract’ within the meaning of Article 7(1) Brussels I Recast?
Bobek AG Opined it is not. The CJEU today held it is. I disagree.
Firstly, the second chamber, at 29 ff, repeats the inaccurate references in Valach and Tunkers, that (at 30) ‘actions which fall outside the scope of [the Insolvency Regulation] fall within the scope of [Brussels I Recast].’ This oft repeated quote suggest dovetailing between the two Regulations, a view which is patently incorrect: readers can use the tag ‘dovetail’ or ‘arrangement’ (for ‘scheme of arrangement’) for my view on same; see e.g. Agrokor.
Having held (this was not seriously in doubt) that Brussels I Recast is engaged, the Court then takes a much wider view of the Handte formula than advocated by Bobek AG. The Court at 37 refers to Granarolo, merely in fact to emphasise the requirement of strict interpretation of the jurisdictional rules which vary Article 4’s actor sequitur forum rei’s rule. At 43 follows the core of its reasoning: ‘By [the pauliana] the creditor seeks a declaration that the transfer of assets by the debtor to a third party has caused detriment to the creditor’s rights deriving from the binding nature of the contract and which correspond with the obligations freely consented to by the debtor. The cause of this action therefore lies essentially in the breach of these obligations towards the creditor to which the debtor agreed.’
The Court does not refer to Ergo, let alone to Sharpston AG’s ‘centre of gravity’ test in same, however it would seem that this may have influenced it. Yet in my view this is way too extensive a stretch of the Handte or Sharpston AG’s Ergo formula. Litigation in the pauliana pitches the creditor against the third party. It would take really quite specific circumstances for Handte to be met in the relation between these two. That a contractual relation features somewhere in the factual matrix is almost always true.
For a comparative benchmark, reference can be made to Refcomp where the Court took a very limiting view on subrogration of choice of court.
The Court’s formulation at 45 is entirely circular: were the creditor not able to sue in the forum contractus, ‘the creditor would be forced to bring proceedings before the court of the place where the defendant is domiciled, that forum, as prescribed by Article 4(1) of Regulation No 1215/2012, possibly having no link to the place of performance of the obligations of the debtor with regard to his creditor.’ Indeed: because the pauliana does not mordicus have to links to that place; it is not because it might not, that a forum contractus has to be conjured up to secure these links.
The Court then quite forcefully and seemingly without much hesitation identifies a specific forum contractus (unlike the AG who had suggested that that very difficulty supports his view that there simply is no forum contractus to speak of): at 46: ‘the action brought by the creditor aims to preserve its interests in the performance of the obligations derived from the contract concerning construction works, it follows that ‘the place of performance of the obligation in question’ is, according to Article 7(1)(b) of this regulation, the place where, under the contract, the construction services were provided, namely Poland.’
The initial contractual obligation between creditor and debtor therefore creates crucial jurisdictional consequences vis-a-vis third parties whose appearance in the factual matrix presents itself only very downstream. That, I would suggest, does not at all serve the predictability which the Chamber (rightly) emphasises at the very outset of its judgment as being the driving principle behind its interpretation.
I am not convinced by this judgment. (And yes, I am being polite).
Feniks: Bobek AG rejects forum contractus for Actio Pauliana and defends predictability of the Brussels regime.
Is the actio pauliana by a Polish company against a Spanish company, which had bought immovable property from the former’s contracting party, one relating to ‘contract’ within the meaning of Article 7(1) Brussels I Recast?
Bobek AG Opined in C-337/17 Feniks v Azteca on 21 June. His Opinion features among others a legal history class on the action pauliana, and eventually a justifiable conclusion: the action is not one in contract. In C-115/88 Reichert I the Court held that the French civil law actio pauliana does not fall within exclusive jurisdiction concerning rights in rem in immovable property (Article 24(1). Soon afterwards, the Court added in C-261/90 Reichert II that the same actio pauliana was neither a provisional measure nor an action bringing proceedings concerned with the enforcement of a judgment. It was also not a matter relating to tort, delict or quasi-delict.
That left only the potential for a forum contractus to be decided.
The AG reviews a number of arguments to come to his decision. One of those I find particularly convincing: at 62: assuming that the applicability of the head of jurisdiction for matters relating to a contract were to be contemplated, the question that immediately arises is which of the two contracts potentially involved should be taken as relevant? To which of the two contracts would an actio pauliana in fact relate? Among others (at 69-70) Sharpston AG’s Opinion in Ergo is discussed in this respect and the AG in my view is right when he dismisses the contractual relations at issue as an anchor point.
At 69 the AG also adds a knock-out point which could logically have come at the very beginning of the Opinion:
‘it should also be added and underlined that both approaches outlined above fail to satisfy the requirement of ‘obligation freely assumed by one party towards another’, [the AG refers to Handte, GAVC] that is by the Defendant towards the Applicant. Even if the case-law of this Court does not require that there is identity between the parties to the proceeding and to the respective contract, it appears difficult to consider that the mere filing of an actio pauliana creates a substantive-law relationship between the Applicant and the Defendant resulting from, for example, some kind of legal subrogation founded by an act of COLISEUM (as the Applicant’s initial debtor).’
Readers further may want to take note of para 92: the AG’s view to treat the power of recitals with caution. The AG ends at 97-98 with a robust defence of the Brussels regime, with specific reference to the common law (footnotes omitted):
‘What has to be sought is a principled answer that applies largely independently of the factual elements in an individual case. While fully acknowledging and commending the attractive flexibility of rules such as forum(non) conveniens that allow for derogation in the light of the facts of a specific case, the fact remains that the structure and the logic of the Brussels Convention and Regulations is indeed built on different premises. What is understandably needed in a diverse legal space composed of 28 legal orders are ex ante reasonably foreseeable, and thus perhaps somewhat inflexible rules at times, and less of an ex post facto explanation (mostly as to why one declared oneself competent) heavily dependent on a range of factual elements.
All in all, in the current state of EU law, actio pauliana seems to be one of the rare examples that only allows for the applicability of the general rule and an equally rare confirmation of the fact that ‘… there is no obvious foundation for the idea that there should always or even often be an alternative to the courts of the defendant’s domicile’. ‘
A solid opinion with extra reading for the summer season (on the Pauliana).
Hofsoe: Scope ratione personae of Brussels I’s protected categories in cases of assignment (specifically: insurance).
In C‑106/17 Hofsoe, the CJEU held late January that the Brussels I Recast Regulation jurisdictional rules for jurisdiction in matters relating to insurance, do not apply in case of assignment to a professional party. A B2C insurance contract assigned to a professional party therefore essentially turns into a B2B contract: the rules for protected categories are meant to protect weaker parties only. The Court also rejects a suggestion that the assignee ought to be able to prove that in fact it merits the forum actoris protection (on account of it being a sole insurance practitioner with little practice): the weakness is presumed and not subject to factual analysis.
Conclusion: at 43: ‘a person such as Mr Hofsoe, who carries out a professional activity recovering insurance indemnity claims against insurance companies, in his capacity as contractual assignee of such claims, should not benefit from the special protection constituted by the forum actoris.’
Predictability, and restrictive interpretation of the Regulation’s exceptions to the actor sequitur forum rei rule, are the classic lines along which the CJEU holds the case.
I for one continue to find it difficult to get my head round assignment not leading to the original obligation being transferred full monty; including its jurisdictional peculiarities. The referring court in this respect (at 28) refers to the applicable national law which provides for as much:
‘In that regard, the referring court points out, under Article 509(2) of the Civil Code, ‘all rights associated with the claim …shall be transferred with the claim’. In those circumstances, the assignment of the claim should include that of the benefit of jurisdiction.’
Indeed in Schrems the Court emphasises the impact of the assignor’s rights on the rights of the assignee. By contrast in Hofsoe, the assignee’s qualities (here: as a professional) call the shots. The Court essentially pushes an autonomous and not necessarily consistent EU law on assignment here. In Rome I, the issue has triggered all sorts of discussions – not least the relevant BICL study and the EC 2016 response to same. Under Brussels I Recast, the discussion is more silent.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.
Belo Horizonte: Court at Rotterdam (using English as language of the oral procedure): Access to seized documents is no provisional measure under Brussels I Recast.
Arnold van Steenderen and Milan Simić have complete and concise review here of judgment of the Rotterdam court of December 2017 in re the Belo Horizonte (officially Cefetra et al v Ms ‘IDA’ Oetker Schiffahrtsgesellschaft MbH & Co KG et al). The case is a follow-up to 2015 proceedings. In these the Rotterdam court had first sanctioned seizure, and then rejected further action for claimant had not formally requested access to the documents.
Arnold and Milan summarise the facts very very helpfully – I am much obliged for the judgment is in Dutch (although as the judgment shows, the proceedings were actually conducted in English: a nice example of the use of regulatory competition in civil procedure) and their efforts have saved me a lot of translation time:
The decisions of the Rotterdam Court are a result of the carriage under bill of lading of soya beans on behalf of Cefetra B.V. (Netherlands based) on board of the “Belo Horizonte” from Argentina to the United Kingdom. Cefetra supplies raw materials to the feed, food, and fuel industries. Cefetra Ltd. (UK based) was the holder of the b/l’s and English law applied to the b/l’s. The vessel is owned by MS ‘IDA’ Oetker and is time chartered by Rudolf A Oetker (both German based, together addressed as Oetker). MS ‘IDA’ Oetker is the carrier under the b/l’s. London arbitration is agreed upon for any dispute rising from the contract of carriage and the b/l’s.
Following engine failure, ‘(d)uring the voyage, experts commissioned by both Cefetra and Oetker visited the “Belo Horizonte” to preliminary assess the condition of the vessel and its engines. Further investigation was conducted upon arrival in England. Oetker, however, only granted permission for inspection of the engine room and refused to disclose the documents on board. Crew interviews were not allowed as well. Subsequently, Cefetra obtained leave to attachment for the purpose of preserving evidence in the Netherlands on 27 October 2015. The leave was effected by the bailiff on 28 October 2015 on board of the “Belo Horizonte”. Several documents were seized and handed over to a sequestrator. Cefetra initiated proceedings’ to gain access to the seized documents.
The dispute in the main is arbitrable in London.
Oetker disputes jurisdiction of the court at Rotterdam on the basis of defendants’ domicile in Germany. Cefetra argue in favour of jurisdiction on the basis of Article 7(1), alternatively 7(2) or indeed Article 35 Brussels I Recast:
- 7(1) forum contractus: for, it is argued, the main agreement between the two parties implies an obligation to provide any relevant evidence; the place of performance for that ‘obligation in question’ lies in The Netherlands since that is where the sequestrator holds them.
- 7(2) forum delicti: Oetker’s obstruction of truth finding is a tort which is located (locus delicti commissi) at Rotterdam since that is where Oetker opposes disclosure.
- 35 provisional, including protective measures.
The Court does not at all entertain Cefetra’s arguments on the basis of 7(1) or 7(2). Wrongly so: plenty of not at all obvious contracts or torts could qualify as same under these provisions. To not address them at all does not make them simply go away.
The court first of all (5.7 in fine) rejects relevance of the arbitration exclusion on the basis of C-391/95 Van Uden Deco-Line. It then sticks to a very restrictive approach to Article 35, with the classic provisionary (not covered by Article 35) v provisional (covered) nature of measures, as also discussed in C-104/03 St. Paul Dairy/Unibel (to which the Court refers). In the words of the court: seizure of evidence is provisional; actual access, copy or extract is not (5.8): the court suggests this is not provisional since it allows the party to gauge the evidentiary position of the party and hence is irreversible.
I disagree -and I have at least a shelf in my library to support the discussion.
Ireversibility in fact (once the evidence seen, the party can never wipe it from its memory, so to speak) does not equate ireversibility in law. The court takes a very limited view of Article 35 and I do not believe it is the right one.
There are not that many national judgments covering Article 35 quite so expressly. This is one to treasure.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.15.