The continuing enigma that is the Brussels Ia arbitration exception. The Paris CFI on liability claims against arbitrators.

Update 29 April 2021 prof Peters and Meester Bakker argued differently here, in 2020 (in Dutch), in summary and with strong arguments (as well as in contrast with the French Court) pointing to the locus arbitri, the curial seat as agreed between the parties, as the natural home for any subsequent disputes involving liability of the arbitrators.

Thank you indeed Gilles Cuniberti for flagging and discussing the end of March decision (Press Release only) by the Paris Court of First Instance in which it held that an action against an arbitrator for damages following his failure to disclose a conflict of interests, which led to the annulment of the award, fell within Brussels Ia despite its arbitration exception.

I have more sympathy for the decision than Gilles. At the very least I am not surprised national courts should be confused about the demarcation. Brussels Ia inserted the Smorgasbord of confusion following West Tankers, by collating an even prima facie conflicting array of ins and outs in its recital 12. Even before the entry into force of Brussels Ia, Cooke J in Toyota v Prolat held that recital 12 is of no use. Other than in fairly straightforward cases such as Premier Cruises v DLA Piper Russia, good argument might exist on many conceivable cases.

Deciding the demarcation with help from the New York Convention itself (one might have suggested that what is included in New York, should not be included in Brussels Ia) does not help in the case at issue for as ia Tadas Varapnickas notes, Uncitral and New York are silent on the status of the arbitrator.

Assuming BIa applies, there must be little doubt there is a contractual relation, even between the arbitrator and the party who did not appoint her or him, in the BIa Article 7(1) sense, following CJEU flightright.

Curial seat was Paris, yet hearings and deliberations had taken place in Germany. Forum contractus as a provision of services was held to have been Germany.

This is where Burkhard Hess, at the request of Gilles, took over: Burkhard further discusses the findings on arbitration, agrees with Germany as the forum contractus per ia CJEU Wood Floor Solutions, and suggests (see similarly Mann J in Philips v TCL) the German courts are bound by the Paris’ court’s findings per CJEU Gothaer.

Much relevant. I do not know whether appeal is being sought.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.3.4, para 2.110 ff.;

Koksokhimtrans v Cool Consulting. The Dutch SC on E-mail proof and dispute resolution.

An interesting exchange with fellow practitioners on Twitter yesterday reminded me of this post which I have had in the draft folder since some time in June.  Back in February, the  Dutch SC confirmed the approach of the lower courts and the Court of Appeal on the correct approach to e-mail evidence and the existence of specific dispute resolution clauses. Here: an agreement to arbitration. The result is that a London-issued arbitral award cannot be enforced in The Netherlands.

When I flagged the case on Linked-in in June I observed there were two approaches to the judgment. Some emphasise the Courts’ refusal to recognise the validity of the agreement to arbitrate made by e-mail, in the face of what is common and very informal practice in the shipping industry /charterparty; others point more practically to parties having to be prepared to prove the authenticity of electronic correspondence.

Defendant did not enter an appearance but the lower Court in earlier ruling was alarmed by the print-out of e-mails allegedly containing the ‘agreement’ in the charterparty looking dodgy (there were for instance various white blots). It proprio motu pursued originality research. In subsequent rulings confirmed and completed by the Court of Appeal, the courts were not satisfied by the originality research, among others because the claimant’s ‘independent’ expert was an ICT employee with the law firm involved in the case.

Procureur Generaal Vlas with the Hoge Raad in his Opinion in December 2019, discussed the slight differences between the 1958 New York Convention and the Dutch law on the evidence required (with the Dutch rules in fact being more relaxed), and the nature and content of guidelines issued for the interpretation of the Convention. He advised to follow the lower court’s approach not because of some grand statement in principle but rather because he could not see fault in the courts’ factual observation of lack of independent and objective proof of authenticity. The Supreme Court followed in the most succinct of ways, without justifying rejection of the appeal. It is entitled to do so in cases where its findings have no impact on the unity in application of the law, indicating that the factual observations swayed the SC.

‘Before e-mail’ (my kids would respond to that ‘yes dad, when you got to work on horse and cart’) printers and warehouse assistants where a key link in the chain of general terms and conditions – GTCs. They needed to ensure the right content ended up on the right printed, blank order forms, and ended up with the right wholesalers, sales agents etc. – to be repeated every single time these GTCs were amended; and many a litigation has begun with sales agents continuing to use old forms ‘because it would be a shame to throw all that paper’. Fast forward to electronic correspondence, and website managers and general ICT staff have now assumed that role. In the context of any dispute resolution, they need to ensure everyone has the right e-mail footer, properly functioning link to the right version of the GTCs on the website, etc. They also need to have protocols in place to ensure authentication is thought of proactively. Lack of such proper electronic housekeeping leads to results no different than when sales agents continued to use the old paper forms.

Geert.

 

 

Gazprom, arbitral Antisuit Injunctions and the Judgments Regulation: Wathelet AG gets one or two things off his chest

Wathelet AG opined yesterday in Gazprom, Case C-536/13, re the fate of arbitral anti-suit injunctions. (See my posting on the application, for context). He takes the opportunity to add to the chorus of criticism of the ECJ’s West Tankers ruling, at considerable length; and to review the ‘new’ regime under the Brussels I recast, in light of recital 12 of that Regulation.

His review of the ‘new’ regime of the Brussels I recast, and the contrasting positions of the EC and a number of Member States, support my proposition that the recast, by incorporating a summary of previous case-law in its recitals, has certainly not clarified things beyond discussion. Wathelet in fact suggest that the recitals do rebuke the ECJ and return application of the Regulation to the Rich scenario – however I am not convinced that Rich itself necessarily clarifies things. (It, too, like Van Uden and like the current recital, uses a confusing variety of criteria. I have a paper forthcoming on the Brussels I recast (already in a Dutch version should readers be interested) which looks into this).

At any rate, the lengthy review of the position under the recast evidently is outside the scope of the preliminary review, since the recast does not apply to it, and the ECJ is certain not to entertain the AG’s review of the recast and his rebuke of West Tankers at all. (Although his critical views are not likely to endear him to the Court).

Returning to the actual questions, the AG suggests the Court reply that that the Brussels I Regulation is not applicable in the present case (it falling exclusively within the scope of the 1958 New York Convention) and that, in any event, (what is effectively) an anti-suit injunction issued by an arbitration tribunal is not contrary to that Regulation. Finally, that under the New York Convention, a Member State cannot classify Brussels I’s jurisdictional regime as being ‘ordre public’ and hence capable of leading to refusal of recognition of an arbitral award.

The AG decisively supports arbitration in this opinion, however the ECJ is bound to be much shorter (and perhaps less sympathetic) in its judgment. To be continued….

Geert.

Does the EU need an arbitration Regulation?

the existence of parallel arbitration and judicial proceedings (lis pendens issues; see also here); and the circulation of arbitral awards and arbitration-related judgments, including the issue of the conclusive and preclusive effects of prior arbitral awards in relation to conflicting judgments (res judicata issues: including whether the priority which the Brussels I-Regulation concedes to the New York Convention, means that a court in a Member State can or indeed must give priority to a conflicting arbitral award over a judgment of the court of another EU Member State).

A great kick-off to a continuing debate. Geert.