Posts Tagged 44/2001
The European Court of Justice held last week in C‑368/16, Assens Havn. It confirmed privity of choice of court in the event of subrogation of the victim in the rights of the insured. The victim is not bound by choice of court between insurer and tortfeasor:
At 41: ‘The extension to victims of the constraints of agreements on jurisdiction based on the combined provisions of Articles 13 and 14 of Regulation No 44/2001 could compromise the objective pursued by Chapter II, Section 3, thereof, namely to protect the economically and legally weaker party.
That the CJEU confirms privity of contractual choice of court is no surprise: see most recently Leventis. In the case of insurance contracts the issue is slightly less obvious for unlike in the case of consumers and employees, the legal presumption of weakness often does not represent commercial reality.
Whether the subrogated party can make use of the choice of court clause in the underlying contract was not sub judice in the judgment.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2.
Yesterday in Case C-436/16 Leventis the Court of Justice summarily confirmed the principle of privity of choice of court under the Brussels I Recast. I have looked at this issue before e.g. when I discussed Refcomp and Profit Sim. The tos and fros between the various parties in the case meant they were acquainted with each other in the courtroom and in arbitration panels. It also meant that actions, settlements etc. between one of them and a third party necessarily impacted commercially on the other.
However the Court of Justice essentially held that such a close, voluntary or not, relationship between the two parties does not mean that a jurisdiction clause in a contract between two companies can be relied upon by the representatives of one of them to dispute the jurisdiction of a court over an action for damages which aims to render them jointly and severally liable for supposedly tortious acts carried out in the performance of their duties. The Court simply noted that the referring national court had given no indication of choice of court made between the parties as to the latter issue, employing the classic (now) Article 25 set of criteria.
Of note is that unlike other cases such as Goldman Sachs v Novo Banco, there did not seem to be any kind of theory in relevant national law which would have led to imputability (or potential to call upon) choice of court to a third party under the given circumstances.
(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52.
Refusal of recognition for failure to serve. ECtHR tests the Brussels regime against Strasbourg in AVOTIŅŠ v Latvia
In AVOTIŅŠ v Latvia |Avotins v LAtvia, the Grand Chamber of the ECtHR at Strasbourg held late May that Article 6 ECHR (right to fair trial) was engaged but not infringed by the Latvian’s Supreme Court’s application of Article 34(2( Brussel I (now Article 45(1) b Brussels I Recast).
The Article reads ‘A judgment shall not be recognised: (…) 2. where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so;…
In the case at issue applicant sought refusal by the Latvian court of recognition of a Cypriot judgment issued against him. After review of the Regulation’s core pedigree of mutual recognition and mutual trust, burden of proof particularly exercised the Court: at 121:
‘The fact that the applicant relied on that Article (34(2), GAVC) without having challenged the judgment as required necessarily raised the question of the availability of that legal remedy in Cyprus in the circumstances of the present case. In such a situation the Senate was not entitled simply to criticise the applicant, as it did in its judgment of 31 January 2007, for not appealing against the judgment concerned, and to remain silent on the issue of the burden of proof with regard to the existence and availability of a remedy in the State of origin; Article 6 § 1 of the Convention, like Article 34(2) in fine of the Brussels I Regulation, required it to verify that this condition was satisfied, in the absence of which it could not refuse to examine the applicant’s complaint. The Court considers that the determination of the burden of proof, which, as the European Commission stressed (see paragraph 92 above), is not governed by European Union law, was therefore decisive in the present case. Hence, that point should have been examined in adversarial proceedings leading to reasoned findings. However, the Supreme Court tacitly presumed either that the burden of proof lay with the defendant or that such a remedy had in fact been available to the applicant. This approach, which reflects a literal and automatic application of Article 34(2) of the Brussels I Regulation, could in theory lead to a finding that the protection afforded was manifestly deficient such that the presumption of equivalent protection of the rights of the defence guaranteed by Article 6 § 1 is rebutted. Nevertheless, in the specific circumstances of the present application the Court does not consider this to be the case, although this shortcoming is regrettable.’
Those ‘specific circumstances’ include in particular the applicant’s professional background: at 124:
‘the applicant, who was an investment consultant, should have been aware of the legal consequences of the acknowledgment of debt deed which he had signed. That deed was governed by Cypriot law, concerned a sum of money borrowed by the applicant from a Cypriot company and contained a clause conferring jurisdiction on the Cypriot courts. Accordingly, the applicant should have ensured that he was familiar with the manner in which possible proceedings would be conducted before the Cypriot courts (…). Having omitted to obtain information on the subject he contributed to a large extent, as a result of his inaction and lack of diligence, to bringing about the situation of which he complained before the Court and which he could have prevented so as to avoid incurring any damage’.
I am not convinced by the Court’s view on the burden of proof and on the national court’s duty to assess the law in the State of origin sua sponte. Judges Lemmens and Briede, jointly concurring but for different reasons as the court, in my view have the better argument where they say
‘If the applicant wanted to argue that no remedy had in fact been available to him in Cyprus, in our opinion it would have been for him to raise this issue explicitly before the Supreme Court. We question whether he could expect the Supreme Court to raise that issue of its own motion. And we definitely consider that he cannot complain under Article 6 § 1 of the Convention about the lack of an explicit response to an argument that was not explicitly made.’
The end result is the same at the ECtHR. For future application of the Brussels I (Recast) Regulation however it makes a big difference.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.16, Heading 184.108.40.206.4 (p.198).