TWR v Panasonic. Obiter consideration of A34 Brussels Ia forum non light. Hamburg court likely to have to take up that baton in some form.

TRW Ltd v Panasonic Industry Europe GmbH & Anor [2021] EWHC 19 (TCC)  adds to the slowly developing case-law on Article 34 Brussels Ia’s forum non conveniens light, on which I have reported at each occasion the Article to my knowledge has been applied (most recently in Ness Global Services).

The defendant Panasonic companies are based in Germany. Panasonic’s Group headquarters are in Japan. TRW is the English subsidiary, based in Solihull, of a German group of companies, ZF Group. The defendants say the parties agreed to German law and exclusive jurisdiction of the Hamburg court over any claim by TRW arising from supply of the resistors. TRW says the parties agreed to English law and jurisdiction.

There are related proceedings in Michigan, with judgment expected in about April 2021.

Kerr J decides at 55 ff here was valid A25 choice of court and hence jurisdiction for the courts at Hamburg, following the usual discussion on whether and if so which choice of court has been agreed in to and fro messages, purchase orders, invoices, references to general terms and conditions and the like. The kind of housekeeping complications which I discuss ia here.

Then follows obiter the Article 34 discussion. Parties agree that if jurisdiction under A25 BIa is established by neither party, TRW was at liberty to sue in England as the place of delivery of the goods, under A7(1) BIa; and that for A34 purposes there is a related lis alibi pendens in Michigan. The discussion turned on whether the word “expedient” in A34(1)(a) bears the meaning “desirable, even if not practicable” or “both practicable and desirable”, given the inconsistent case-law in JSC Commercial Privatbank v. Kolomoisky, SCOR v Barclays, Municipio de Mariana,  Federal Republic of Nigeria v. Royal Dutch Shell plcand of course  EuroEco.

At 94 Kerr J seems to side with Kolomoisky and with not reading EuroEco as a rejection of same, however he does not take definitive sides or does not attempt to reconcile the judgments. At 95 he says he would have not exercised his discretion for a stay, for the reasons earlier listed by counsel for claimants: these were (at 92-93)

Mr Caplan strongly opposed any stay. He submitted that, assuming I have any discretion to grant a stay (contrary to his reserved position), I should not exercise it. The risk of irreconcilable judgments could not be eliminated, he argued. The Michigan case would shortly produce a judgment binding on neither party to the present claim and, probably, applying Michigan law.

There was no scope for issue estoppel or abuse of process because the parties were different and the law could be different. Neither party in this case had opted for Michigan as the chosen forum and Michigan law as the choice of law. If the outcome of the Michigan litigation helped to promote settlement of the present claim, that could happen anyway, without a stay, since this claim is still at an early stage; the first case management conference has yet to take place.

At 98 Kerr J summarises

I would refuse a stay. The first condition in article 34(1)(a) – the expediency condition – may well be met, subject to clarification of the test emerging from the case law. The second condition is met. The third is not. I am far from satisfied that a stay is necessary for the proper administration of justice.

Kerr J concludes at 99

defendants have undertaken to submit to the jurisdiction of the Hamburg court, subject to seeking a stay of proceedings in Hamburg to await the outcome of the Michigan proceedings.

The Hamburg court is likely to see A34 arguments return, lest of course the Michigan proceedings will be concluded, in which case res judicata, recognition, and irreconcilability of judgment might be a core concern.

We have fairly little, if growing (*makes a note to now really really finish that paper*) authority to work with on A34. All bits help.

Geert.

European Private International, 3rd ed. 2021, Heading 2.2.15.3.2, para 2.539 ff

Ness Global Services: A33-34 BIa’s forum non conveniens-light applied to the Scarlet Pimpernel of BIa: non-exclusive choice of court.

Ness Global Services Ltd v Perform Content Services Ltd [2020] EWHC 3394 (Comm)  engages Articles 33-34 of the Brussels Ia Regulation, its so-called forum non conveniens light regime. I reported on it before of course, most recently re Municipio de Mariana in which the judge arguably failed to engage with BIa properly (making A33-34 a carbon copy of abuse and /or forum non arguments in my view is noli sequi).

Perform and Ness are UK-registered companies with offices in London.  Perform are defendants in the UK action. Ness Global Services and its parent Ness Technologies Inc are defendants in parallel proceedings in New Jersey. Both sets of proceedings are based on the same facts and matters. These are said to constitute the basis for termination by both sides of a written agreement.

Ness argue application of A33-34 must be dismissed for there is non-exclusive choice of court in favour of England which, it argues, makes the A33-34 threshold very high. (The clause reads ‘”Governing Law and Jurisdiction. The Agreement shall be governed by and construed in accordance with the laws of England and Wales and the parties hereby irrevocably submit to the non-exclusive jurisdiction of the Courts of England and Wales as regards any claim, dispute or matter arising under or in connection with this Agreement.”)

Houseman J introduces BIa’s scheme clearly and concisely, using the excellent Adrian Briggs’ suggestion of there being a hidden hierarchy in the Regulation – which in my Handbook I have also adopted (clearly with reference to prof Briggs) as the ‘jurisdictional matrix’. Houseman J at 39 notes that non-exclusive jurisdiction is hardly discussed in the Regulation. and concludes on that issue ‘If the internal hierarchy is “hidden” then is fair to say that the concept of non-exclusive prorogated jurisdiction is enigmatic and elusive. It is The Scarlet Pimpernel of the Regulation.’ Later non-EJA is used as shorthand for non-exclusive jurisdiction agreement.

At 62 after consideration of the reflexive application of exclusive jurisdictional rules, including choice of court, the text of A33-34, and recital 24, the judge considers that the recital

focusses upon connections with the ‘first seised’ Non-Member State, rather than the ‘second seised’ Member State which is applying Article 33 or Article 34. This is conspicuous notwithstanding the fact that the jurisdictional gateway language presupposes some connection between either the defendant (domicile) or the circumstances of the case (special jurisdiction) and the ‘second seised’ forum. Further, there is no obvious room in this wording for accommodating or giving effect to a Non-EJA in favour of the courts of the latter forum, and no warrant for affording it the significance that it would receive under English private international law principles, as noted below. In contrast, the second paragraph of the recital appears to contemplate the conferral of exclusive prorogated jurisdiction (albeit reflexively) in favour of the ‘first seised’ Non-Member State, as noted above.

At 80, Houseman J emphasises that in his view the internal hierarchy of the Regulation (the matrix) has no direct role to play in interpreting or applying the gateway language in A33-34. Those articles are themselves part of such hierarchy and are themselves a derogation from the basic rule of domiciliary jurisdiction. He then refers in some support to UCP v Nectrus (reference could also have been made to Citicorp) to hold at 95 that

where Article 25 operates to confer prorogated jurisdiction upon the courts of the ‘second seised’ Member State, whether exclusive or non-exclusive, Articles 33 and 34 are not applicable. In such a case it cannot be said that the court’s jurisdiction is “based upon” Article 4.

A suggestion at 96 that in such case A33-34 can apply reflexively is justifiably rejected.

At 109 application of A33-34 had they been engaged is declined obiter as being not in the interest of proper administration of justice. At 107 mere reference, neither approving nor disapproving was made ia to Municipio de Mariana which effectively places the Articles on a forum non footing.  At 112 it is held obiter

Without engaging in a full granular balancing exercise, given that this is a hypothetical inquiry in the present case, I am not persuaded that it is or would have been necessary for the proper administration of justice to stay these proceedings in favour of the NJ Proceedings. The parties bargained for or at any rate accepted the risk of jurisdictional fragmentation and multiplicity of proceedings by agreeing clause 20(f). That risk has manifested, largely through the tactical choice made by Perform to commence proceedings pre-emptively in New Jersey. The continuation of these proceedings, notwithstanding the existence of the NJ Proceedings, is a foreseeable consequence of the parties’ free bargain and a risk that Perform courted by suing first elsewhere.

An interesting addition to the scant A33-34 case-law, in an area this time of purely commercial litigation.

Geert.

European Private International Law, 3rd ed. 2021, 2.539 ff.

High Court declines jurisdiction in Municipio de Mariana. An important (first instance) #bizhumanrights marker.

I am instructed for claimants in the case hence my post here is a succinct report, not a review and it must not be read as anything else.

Turner J yesterday struck out (not just: stayed) the case against the companies jointly operating the facilities that led to the 2015 Brazilian dam break and consequential human and environmental loss in Município De Mariana & Ors v BHP Group Plc & Anor [2020] EWHC 2930 (TCC). I reported on the case before here.

Eyre J’s earlier Order had identified the threefold jurisdictional challenge: 1. Forum non conveniens for non-EU defendants; 2. Article 34 Brussels IA for the EU-based defendants; 3. Abuse of process, case management for both.

In his judgment Turner J makes abuse of process the core of the case, hinging his subsequent obiter analysis of forum non and of Article 34 on his views viz abuse. At the centre of his abuse analysis is his interpretation of AB v John Wyeth & Brother (No.4), also known as the benzodiazepine litigation, with the points he takes from that judgment (even after the subsequent CPR rules wre issued) summarized at 76.

At 80 ff is a discussion (see e.g. my earlier review of Donaldson DJ in Zavarco) on the use of case-management powers, including abuse, against EU-domiciled defendants post CJEU Owusu (the ‘back-door analogy per Lewison J in Skype technologies SA v Joltid Ltd [2009] EWHC 2783 (Ch) ).

At 99 ff Turner J pays a lot of attention to the impact of accepting jurisdiction on the working of the courts in England, discusses some of the practicalities including language issues, and decides at 141 in an extract which has already caught the attention of others, that ‘In particular, the claimants’ tactical decision to progress closely related damages claims in the Brazilian and English jurisdictions simultaneously is an initiative the consequences of which, if unchecked, would foist upon the English courts the largest white elephant in the history of group actions.’

At 146 ff follow the obiter considerations of the remaining grounds, Article 34 Recast, forum non conveniens and case management stay. On Article 34 viz BHP Plc, the issue of ‘relatedness’ is discussed with reference of course to Euroeco and the tension between that case and Privatbank, as I flag ia here, holding at 199 in favour of Privatbank as the leading authority (hence focus on desirability of hearing cases together rather than on practical possibility). On relatedness, Turner J does not follow the approach of either Zavarco or Jalla, both of course first instance decisions.

At 206 Turner J takes the instructions of recital 24 Brussels Ia’s ‘all circumstances of the case’ to mean including circumstances which would ordinarily be part of a forum non consideration, despite Owusu, and at 231 Jalla is distinguished (at least practically; Jalla is not authority for the judge here) and i.a. at 221 Turner J lists his reasons for allowing an Article 34 stay (again: these are obiter views). As already noted, these echo his findings on abuse of process.

The forum non conveniens analysis viz BHP Ltd at 235 ff, applying Spiliada, delivers inter alia on an inherent implication of Lord Briggs’ suggestions in Vedanta: that a commitment of defendants voluntarily to submit to the foreign alternative jurisdiction, hands them the key to unlock forum non. At 241: ‘In this case, both defendants have offered to submit themselves to the jurisdiction of Brazil. Thus the force of any suggestion that there may be a risk of irreconcilable judgements against each defendant is attenuated.’

Conclusions, at 265:

(i) I strike out the claims against both defendants as an abuse of the process of the court;

(ii) If my finding of abuse were correct but my decision to strike out were wrong, then I would stay the claims leaving open the possibility of the claimants, or some of them, seeking to lift the stay in future but without pre-determining the timing of any such application or the circumstances in which such an application would be liable to succeed;

(iii) If my finding of abuse were wrong, then I would, in any event, stay the claim against BHP Plc by the application of Article 34 of the Recast Regulation;

(iv) If my finding of abuse were wrong, then I would, in any event, stay the claims against BHP Ltd on the grounds of forum non conveniens regardless of whether the BHP reliance on Article 34 of the Recast Regulation had been successful or not;

(v) If my findings on the abuse of process point were wrong, then a free-standing decision to impose a stay on case management grounds would probably be unsustainable.

Appeal is of course being considered.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

3rd ed. forthcoming February 2021.

Jalla and others v Shell. High Court upholds mother holding jurisdiction, no stay granted on the basis of Brussels Ia’s Article 34 forum non conveniens-light.

Update 3 December 2020 see for an interim case-management decision on the issues under appeal here.

Update 18 August 2020 for subsequent procedural judgment unrelated to jurisdiction see [2020] EWHC 2211 (TCC).

England remains a jurisdiction of choice for corporate social responsibility /CSR litigation, in recent parlour often referred to as corporate (human and other rights due diligence. Jalla & Ors v Royal Dutch Shell Plc & Ors [2020] EWHC 459 (TCC) concerns a December 2011 oil spill which claimants allege companies forming part of the Shell group are responsible for. Anchor defendant in the UK is Shell International Trading and Shipping Company Limited – STASCO.

Stuart-Smith J on Tuesday last week upheld jurisdiction against the London-based mother holding on the basis of Article 4 Brussels Ia, and rejected an application for stay on Article 34 grounds. The judgment is lengthy, the issues highly relevant: this post therefore will be somewhat more extensive than usual.

Standard applications in cases like these now take the form of opposing jurisdiction against UK based defendants using Article 34 Brussels Ia (forum non conveniens -light; readers will remember the issues from ia Privatbank (cited by Stuart-Smith J) and other A34 postings on the blog); alternatively, resisting the case go to full trial on the basis that there is no real issue to be tried; abuse of process arguments (against such defendants: based on EU law); and case-management grounds. The latter two are of course disputed following Owusu. And against non-UK (indeed non-EU based defendants), using forum non conveniens; abuse of process; case-management and no real issue to be tried.

[A further application at issue is to amend form claims to ‘correct’ defendant companies, an application which is subject to limitation periods that are disputed at length in the case at issue. This is civil procedure /CPR territory which is less the subject of this blog].

The jurisdiction challenges are what interests us here and these discussions start at 207. The discussion kicks of with core instructions for ‘Founding jurisdiction’ in principle: the five step ladder expressed by Lord Briggs in Vedanta – which of course confusingly include many echoes of forum non as well as Article 34 analysis. Claimant must demonstrate:

(i) that the claims against the anchor defendant involve a real issue to be tried;

(ii) if so, that it is reasonable for the court to try that issue;

(iii) that the foreign defendant is a necessary or proper party to the claims against the anchor defendant;

(iv) that the claims against the foreign defendant have a real prospect of success; and

(v) that, either, England is the proper place in which to bring the combined claims or that there is a real risk that the claimants will not obtain substantial justice in the alternative foreign jurisdiction, even if it would otherwise have been the proper place, or the convenient or natural forum.

For the purposes of current application, Stuart-Smith J focuses on i, ii, and v:

  • When considering whether there is “a real issue to be tried” the test to be applied is effectively the same as the test for summary judgment: reference here is made to Okpabi. It may be important to point out that the ‘real issue to be tried’ test must not be confused as a negation of Owusu. The test effectively has a gatekeeping purpose, not unlike the similar test in e.g The Netherlands as shown in Kiobel.
  • The second condition, reasonableness to try the real issue, Stuart-Smith J concedes that this condition has been heavily debated for it is not entirely clear. He links the condition to the anchor jurisdiction issue: for Stuart-Smith J, the fact that the anchor defendant is sued for the sole or predominant purpose of bringing the foreign defendant into the action within the jurisdiction is not fatal to an application to serve the foreign defendant out of the jurisdiction. He seems to suggest therefore a light reading of the reasonableness requirement and emphasises (at 215) as Lord Briggs had done in Vedanta, that per C-281/02 Owusu, the effect of the mandatory terms of A4(1) BIa is that jurisdiction that is vested in the English Court by the article may not be challenged on arguments which in other circumstances would be forum non conveniens grounds. (This reinforces his flexible reading of the reasonableness requirement).
  • On the fifth condition, Stuart-Smith J at 217 focuses on the scenario of an A4 defendant likely to continue being sued regardless of the English PIL decision (forum non in particular) viz the non-EU defendants (an issue which was quite important in Vedanta, where no A34 arguments were raised). If that is indeed likely then in his view this must have an impact on how the court considers the application of the English rules.

As noted Stuart-Smith J lists these arguments as ‘founding jurisdiction’ and at 227 finds there is a real issue to be tried: a reliable conclusion in the other direction (that STASCO had not retained legal responsibility for the operation of the Northia) cannot be found at this jurisdictional stage.

The Abuse of EU law argument is given short, one para (at 218) shrift, with reference to Lord Briggs in Vedanta (who focused on Article 8(1) CJEU authority for there is little precedent on abuse of EU law).

Turning then to the pièce de résistance: Article 34.  Readers of the blog will have followed my regular reporting on same.

Stuart-Smith’s first discusses authority in abstracto, and his points are as follows:

  • BIa’s section 9, ‘lis pendens – related actions’, harbours two twins. At 222: ‘Articles 29 and 33 apply where proceedings in different jurisdictions involve the same cause of action and are between the same parties. Articles 30 and 34 apply where proceedings in different jurisdictions are “related” without satisfying the additional prerequisites for the application of Articles 29 and 33 (i.e. the same cause of action and between the same parties).‘ The twins are of course not identical: in each set, one involves action ex-EU, the other looks to intra-EU scenarios.
  • Zooming in on the A30-34 twin: A30 defines ‘related’ and A34 does not. Under A30(3), actions are related where they are “so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from different proceedings.” (at 222) under A34(1)a, the discretion to stay an action under that article does not arise unless “it is expedient to hear and determine the related actions to avoid the risk of irreconcilable judgment resulting from separate proceedings”. Semantically one might suggest the latter therefore is a subset of the former (which would also suggest not all actions that are ‘related’ under A30 are so under A34). Stuart-Smith J however proposes to focus on the commonality of both, which is the presence of expediency, ‘to hear and determine them together to avoid the risk of irreconcilable judgments resulting from <different: A30> <seperate: A34’ proceedings. Again at 222: ‘Although there is a semantic argument that this means that cases falling within Article 34(1)(a) are a subset of “related actions”, I cannot conceive of circumstances where this would matter: the expediency criterion is a pre-requisite for the exercise of the court’s discretion both under Article 29 and under Article 34.’
  • At 223 then follows the discussion of “risk of irreconcilable judgments”. ‘Because Articles 30 and 34 do not require the proceedings to involve the same cause of action and to be between the same parties, it is plain that the “risk of irreconcilable judgments” to which Articles 30(3) and 34(1)(a) refer cannot require that there be a risk that one judgment may give rise to an issue estoppel affecting the other.’ In other words, the test of irreconcilability is suggested to be more easily met in A30 (and 34) then it is under A29 (and 33). Nevertheless, with reference to Donaldson DJ in Zavarco, Stuart-Smith J suggests the points of difference between the judgments (whether arising from findings of fact or of law) would have to “form an essential part of the basis of the judgments” before A30 or 34 may be engaged.
  • At 225 he then refers to Privatbank, held by the Court of Appeal after proceedings in Jalla had been closed, in which the Court of Appeal held that the fact that actions could not be consolidated and heard together (much as of course such togetherness cannot be imposed upon the foreign courts) is relevant to the exercise of the Court’s discretion and, in the absence of some strong countervailing factor, will be a compelling reason for refusing a stay. At 246, that importance of the impossibility of consolidated hearings is re-emphasised.

At 228 then Stuart-Smith J arrives at the application in concretoHe starts with the defendants’ arguments: ‘In their written submissions the Defendants rely upon a number of claims brought by groups of claimants or communities before various courts in Nigeria and one action of rather different complexion, known as the Federal Enforcement Action [“FEA”]. They submit that the English proceedings against STASCO should be stayed, at least temporarily, in order to avoid the risk of irreconcilable judgments being reached in England and in one or more of the Nigerian proceedings by waiting for the determinations of the Nigerian Courts and then taking proper account of those determinations in disposing of the English proceedings. The Defendants submit that, by the imposition of a stay, the court would avoid “a course of conflict with the courts of a friendly state” and avoid “cutting across executive actions of the Nigerian State in relation to property situated within its territory” which the Defendants submit would be in breach of the act of state doctrine and considerations of comity.‘ He then proceeds to discuss the arguments:

  • Firstly he discusses at length the status of the FEA (which counsel for the defendants focused on) as well as a number of other actions pending in the Nigerian courts.
  • Of note is his observation at 234: ‘It is a fact material to the exercise of the court’s discretion on these applications that the Defendants in these proceedings rely upon the existence of the FEA as grounds for imposing a stay pursuant to Article 34 while at the same time SNEPCO is maintaining its root and branch opposition to the validity (as well as the factual merits) of the FEA.’
  • At 237 he notes the not carbon copy but nevertheless overlap between proceedings, at the level of claimants, defendants, and facts, but not the allegations of negligence and Rylands v Fletcher which are not directed at STASCO in the FEA proceedings. Of note is that he adds in fine that the potential problem of double recovery is simply an issue with which the English and Nigerian courts may have to grapple in due course.
  • At 241 he holds obiter that expediency is not met here for a stay would not reduce the risk of irreconcilable judgments. Here, the true nature of forum non (I realise of course A34 is only forum non light) re-emerges: the English proceedings will continue after the stay in all likelihood will have been lifted (there will continue to be a case to answer for STASCO). ‘(A)lthough the English court would afford due attention and respect to the findings of the Nigerian courts, the findings of the Nigerian courts in the FEA and the other actions would not bind the English court to make equivalent findings even on the most basic matters such as whether the December 2011 Spill reached land.’ However ‘in the light of the ruling by the Court of Appeal [in Privatbank, GAVC] that expediency is a theoretical concept, I will proceed on the assumptions (without deciding) that, for the purposes of Article 34, (a) the actions in Nigeria are related actions and (b) it is expedient to determine the related actions together to avoid the risk of irreconcilable judgment resulting from different proceedings.’
  • That leaves the question whether a stay is necessary for the ‘proper administration of justice.’
    • At 242 the elements of recital 24 are considered in turn. Stuart-Smith emphasises in particular that while the damage occurred in Nigeria, there is a strong international element that is alleged to give rise to a duty of care owed by STASCO to the Claimants; and he underlines the uncertainty as to the length of the Nigerian proceedings).
    • At 245 he concludes that no stay is warranted: I shall recall the para in full (underlining is mine, as is the lay-out):
      • ‘Balancing these various considerations together, I am not satisfied that a stay is necessary for the proper administration of justice.
      • I start with the fact that jurisdiction is based on Article 4 and that it is contemplated that the proceedings against STASCO may continue after a temporary stay to await the progress of the Nigerian actions.
      • Second, the length of that stay is indeterminate whether one looks at the FEA or the other actions; but on any view it is likely to be measured in years rather than months, thereby rendering these Claimants’ claims (which were issued late) almost intolerably stale.
      • Third, a stay would prevent any steps being taken towards the resolution of the difficult limitation and other issues which the earlier parts of this judgment identify; and it would prevent any other steps being taken to ensure the swift and just progression of the English action if and when the stay is removed. That is, in my judgment, a major drawback: if and to the extent that there are valid (i.e. not statute-barred) claims to be pursued, there is a compelling interest of justice in their being pursued quickly. Otherwise, as is well known, there is a risk that valid claims may fall by the wayside simply because of the exorbitant passage of time.
      • Fourth, although the factual connection with Nigeria is almost complete, the English court’s jurisdiction is not to be ousted on forum non conveniens grounds and, that being so, there is no reason to assume that imposing a stay until after the Nigerian courts have reached their conclusions will either cause the English proceedings to be abandoned or determine the outcome of the English proceedings or eliminate the risk of irreconcilable findings altogether. I am certain that the English court would and will, if no stay is imposed at this stage, remain vigilant to the need to respect the Nigerian courts and their proceedings; and I do not exclude the possibility that circumstances might arise at a later stage when a pause in the English proceedings might become desirable in the interest of judicial comity and respect for Nigeria’s sovereign legal system.
      • Fifth, I bear in mind the fact that the scope of the FEA action is not clear, so that it is not clear what issues will be determined, save that the issue of STASCO’s responsibility and actions will not be as they are not before the Nigerian Court. Turning to the other actions, STASCO is only a party to the HRH Victor Disi Action which, though technically pending, cannot be assumed to be certain to come to trial. The status of the remaining actions, where STASCO is not a party, is as set out above but does not give confidence that one or more of those actions will emerge as a suitable vehicle for determining issues relating to the spill so as to fetter the freedom and resolve of the English court to reach a different conclusion on behalf of different claimants and in an action against STASCO if that is the proper result.
      • Sixth, in my judgment, the proper administration of justice is better served by taking interim steps to bring order to the English proceedings, specifically by addressing the issues of limitation and, potentially, existence and scope of duty, which are disclosed in the earlier parts of this judgment. The outcome of those steps should determine whether and to what extent STASCO is available as an anchor defendant.’

There is an awful lot here which may prove to be of crucial relevance in the debate on the application of Article 34. Most importantly, Stuart-Smith’s analysis in my view does justice to the DNA of A34, which includes a strong presumption against a stay.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

Agbara et al v Shell. Recognition /enforcement, ordre public and natural justice. Shell Nigeria ruling refused registration in the High Court.

[2019] EWHC 3340 (QB) Agbara et al v Shell Nigeria et al (thank you Adeole Yusuf for flagging) illustrates what many a conflict teacher initiates classes with. There is some, but often limited use in obtaining a judgment which subsequently cannot be enforced where the defendant’s funds are. Coppel DJ refused to enter registration of a 2010 Nigerian judgment by which claimants were awarded 15,407,777,246 Naira (approximately £33 million today) in damages in respect of the pollution of land occupied by them following the rupture of a pipeline maintained by Shell in 1969 or 1970.

Brussels Ia does not apply to recognition and enforcement of an ex-EU judgment hence the common law was applied (clearly with due deference to international comity yet the standards of natural justice nevertheless being determined by lex fori, English law). Natural justice was found to have been infringed by the proceedings at issue. This included an impossibility for Shell to cross-examine witnesses and an unusually swift completion of proceedings following the dismissal of a procedural argument made by Shell. Shell’s subsequent bumbling of the appeal via procedural mistake was not found by Coppel DJ to alter the findings of infringement of natural justice.

Obiter the factual mistakes made in the calculation of damages leading to the award and the opaque inclusion of punitive damages were also found to stand in the way of recognition and enforcement.

The ruling has some relevance for Article 33/34 BI1’s Anerkennungsprognose.

Geert.

 

PrivatBank v Kolomoisky and Boholiubov. The Court of Appeal reverses the High Court ia on abuse of the anchor mechanism. Further consideration, too, of the reflexive effect of Article 28’s lis alibi pendens, and of Article 34.

Update 18 May 2020 early April the Supreme Court ruled that it would not hear the case – which therefore stands as (complicated) authority.

The Court of Appeal in [2019] EWCA Civ 1708 has reversed [2018] EWHC 3308 (Ch) PrivatBank v Kolomoisky and Boholiubov et al which I reviewed here. When I tweeted the outcome on the day of release I said it would take a little while for a post to appear, which indeed it has. Do please refer to my earlier post for otherwise the comments below will be gobbledygook.

As a reminder: the High Court had set aside a worldwide freezing order (‘WFO’) granted earlier at the request of Ukraine’s PrivatBank, against Ihor Kolomoisky and Hennadiy Boholiubov – its two former main shareholders.

Fancourt J’s judgment implied in essence first of all, the Lugano Convention’s anchor defendant mechanism, concluding that any artificial fulfilment (or apparent fulfilment) of the express requirements of Article 6.1 is impermissible, and this includes a case where the sole object of the claim against the anchor defendant is to remove the foreign defendant from the jurisdiction of domicile. Bringing a hopeless claim is one example of such abuse, but the abuse may be otherwise established by clear evidence. In principle, the fact that there is a good arguable case against the anchor defendant should not prevent a co-defendant from establishing abuse on some other ground, including that the “sole object” of the claim is to provide jurisdiction against a foreign domiciled co-defendant.

The English Defendants serving as anchor, were not considered legitimate targets in their own right and hence the ‘sole object’ objection was met. 

The Court of Appeal in majority (Lord Newey at 270 ff dissenting) disagreed and puts particular emphasis on the non-acceptance by Parliament and Council at the time of adoption of Brussels I, of an EC proposal verbatim to include a sole object test like was done in Article (then) 6(2) (it also refers to drafters and rapporteur Jenard making a bit of a muddle of the stand-alone nature, or not, of the sole object test). Following extensive consideration of authority it decides there is no stand-alone sole object test in (now) Article 8(1) Brussels I (or rather, its Lugano equivalent) but rather that this test is implied in the Article’s condition of connectivity: at 110: ‘we accept Lord Pannick’s analysis that, as shown by the references to Kalfelis and Réunion,..that the vice in using article 6(1) to remove a foreign defendant from the courts of the state of his domicile was met by a close connection condition.’

Obiter it held at 112 ff that even if the sole object test does exist, it was not met in casu, holding at 147 that the ability to obtain disclosure from the English Defendants provided a real reason for bringing these proceedings against them.

Fancourt J had also added obiter that had he accepted jurisdiction against the Switzerland-based defendants on the basis of the anchor mechanism, he would have granted a stay in those proceedings, applying the lis alibi pendens rule of Lugano reflexively, despite the absence of an Article 34 mechanism in Lugano. The Court of Appeal clearly had to discuss this given that it did accept jurisdiction against the Switserland-based defendants, and held that the High Court was right in deciding in principle for reflexive application, at 178: ‘This approach does not subvert the Convention but, on the contrary, is in line with its purposes, to achieve certainty in relation to jurisdiction and to avoid the risk of inconsistent judgments.’

That is a finding which stretches the mutual trust principle far beyond Brussels /Lugano parties and in my view is far from clear.

However, having accepted lis alibi pendens reflexively in principle, the Court of Appeal nevertheless held it should not do so in casu, at 200 as I also discuss below: ‘the fact that consolidation was not possible was an important factor militating against the grant of a stay, when it came to the exercise of discretion as to whether to do so’.

Finally, stay against the English defendants was granted by the High Court on the basis of A34 BIa, for reasons discussed in my earlier post. On this too, the Court of Appeal disagreed.

Firstly, on the issue of ‘related’ actions: At 183: ‘The Bank argues that the actions are not “related” in the sense that it is expedient to hear and determine them together, because consolidation of the Bank’s claim with Mr Kolomoisky’s claim in the defamation proceedings would not be possible. It is submitted that unless the two actions can be consolidated and actually heard together, it is not “expedient” to hear and determine them together. In other words, the Bank submits that expediency in this context means practicability.’ The Court of Appeal disagreed: At 191: ‘The word “expedient” is more akin to “desirable”, as Rix J put it, that the actions “should” be heard together, than to “practicable” or “possible”, that the actions “can” be heard together. We also consider that there is force in Ms Tolaney’s point that, if what had been intended was that actions would only be “related” if they could be consolidated in one jurisdiction, then the Convention would have made express reference to the requirement of consolidation, as was the case in article 30(2) of the Recast Brussels Regulation.’

Further, on the finding of ‘sound administration of justice’: at 211: ‘the unavailability in the Ukrainian court of consolidation of the Bank’s current claim with Mr Kolomoisky’s defamation claim remains a compelling reason for refusing to grant a stay. In particular, the fact that the Bank’s claim would have to be brought before the Ukrainian commercial court rather than before the Pechersky District Court in which the defamation proceedings are being heard means that if a stay were granted, the risk of inconsistent findings in these different courts would remain. Furthermore, we accept Lord Pannick’s overall submission that, standing back in this case, it would be entirely inappropriate to stay an English fraud claim in favour of Ukrainian defamation claims, in circumstances where the fraud claim involves what the judge found was fraud and money laundering on an “epic scale” ‘

Finally, at 213, ‘that the English claim against Mr Kolomoisky and Mr Bogolyubov and the English Defendants should be allowed to proceed, it inevitably follows that the BVI Defendants are necessary or proper parties to that claim and that the judge was wrong to conclude that the proceedings against the BVI Defendants should be set aside or stayed.’

One or two issues in this appeal deserve to go up to the CJEU. I have further analysis in a forthcoming paper on A34.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2, Heading 2.2.14.5

 

 

Wigmans v AMP. Abuse of process and multiplicity of proceedings.

[2019] NSWCA 243 Wigmans v AMP concerns the challenging application of fraus /abuse / vexatious and oppressive proceedings principles to multiplicity of proceedings. Fraus or abuse is not easily applied in civil procedure let alone conflict of laws context. See e.g. my critique of Pablo Star but equally other postings; search tag ‘abuse’ or ‘fraus’ should help locate them. Neither is the common law Aldi rule requiring claimants to bring grouped cases together easy to consider.

Following testimony given by executives of AMP in the (Australian) Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, five class actions were commenced within a short time of each other on behalf of shareholders in AMP who had made investments during periods of time in which it was said that AMP ought to have disclosed certain information to the market. Four of the five class actions were commenced in the Federal Court but were transferred to the Supreme Court. Two of the sets of proceedings then consolidated so that five became four. Each of the respective plaintiffs of the remaining four pending proceedings brought applications to stay each of the other sets of proceedings. AMP, whilst not filing a stay application, supported an outcome in which it would face only one set of proceedings.

Unclear principles on the issue have led to considerations of ‘beauty parades’ (which legal team might best lead the class action) as well as third party funding implications.

The primary judge ordered, pursuant to ss 67 and 183 of the Civil Procedure Act 2005 (NSW) and the inherent power of the Court, that the representative proceedings commenced by 3 of the 4 be permanently stayed. Each of these 3 fell within the definition of group member in the 4th, the ‘Komlotex’ proceedings. Ms Wigmans, one of the 3, made an application for leave to appeal that decision.

The issue in respect of which leave to appeal was granted (but appeal eventually refused) related to the principles applicable to applications to stay and counter-stay multiple open representative action proceedings.

The case therefore does not strictly relate to conflict of laws, rather to civil procedure and case management. However multiplicity of proceedings is clearly an issue viz conflicts, too (think lis alibi pendens; forum non etc.) hence I thought it worthwhile to flag the case; in which Bell P quotes conflicts handbooks; and in which 85 he expressly considers forum non and Cape v Lubbe. The House of Lords in that case had refused to stay proceedings which had been commenced in England where it was said that South Africa was the natural or more appropriate forum, in circumstances where it was held that the proceedings could only be handled efficiently and expeditiously on a group basis in England where appropriate funding was available. The lack of means available in South Africa to prosecute the claims required the application for a stay of proceedings to be refused.

An interesting case in which conflict of laws principles inspired domestic civil procedure rules, and where relevant considerations have an impact on e.g. the Article 33-34 Brussels Ia discussions.

Geert.

 

 

Huawei v Conversant wireless. Reflexive application of patent validity jurisdiction confirmed in principle – but rejected in casu.

In [2019] EWCA Civ 38 Huawei v Conversant Wireless (on appeal from [2018] EWHC 808 (Pat) the Court of Appeal considered whether in the event of 2 defendants being UK based (the others domiciled in China) the UK courts may relinquish jurisdiction reflexively to honour Article 24(4) Brussels Ia’s exclusive jurisdictional rule for the validity of patents.

Neither Article 33’s lis alibi pendens or Article 34’s ‘forum non conveniens’ rule were discussed.

Huawei China and ZTE China have commenced proceedings in China against Conversant, seeking to establish invalidity and (in the case of Huawei China only) non-infringement of Conversant’s Chinese patents. Conversant have inter alia sued Huawei China and ZTE China in Germany for infringement of its German patents.

Following Owusu, jurisdiction for infringement of UK patents against UK incorporated companies must lie and remain with the English courts per Article 4 B1a. As readers will remember from my review of Ferrexpo, the English courts for some time however have noticed with relish that the CJEU in Owusu did not entertain the part of the referral which asked it whether exclusive jurisdictional rules may apply reflexively – holding thereafter in the CJEU’s stead that they might so do (in a discretionary: not a slavish fashion: Floyd J here at 115).

At 95 ff Floyd J discusses the issues after having summarised the various representations made (see a summary of the summary by John de Rohan-Truba here), with much of the discussion turning on English CPR and jurisdictional rules, and reflexive application of Article 24(4) confirmed in principle, but not applied here. Requests to refer to the CJEU were summarily dismissed.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

Modern Families. UK Supreme Court confirms CSR jurisdiction against mother and daughter in Lungowe v Vedanta and Konkola – yet with one or two important caveats.

Update 26 May 2020 for an application of the Vedanta summary of the rules to be followed when deciding service out of jurisdiction see Marsh CM in Satfinance Investment Ltd v Inigo Philbrick & Ors [2020] EWHC 1261 (Ch), update 22 December 2020 confirmed upon appeal [2020] EWHC 3527 (Ch), concerning a valuable painting entitled ‘Humidity’ by the New York artist Jean-Michel Basquiat. (Note at 9 the ‘art and the law’ issue of the lex situs: ‘The principal pointer to a legal system other than England is that the Painting was in New York at the time the agreement was made and the lex situs would naturally govern the transfer of title and the manner in which the title was held.’). Do bear in mind that the judgment, setting aside an earlier order giving permission to serve out of jurisdiction, only concerns a defendant resident in New York. Against the English-domiciled anchor defendant, no such permission is needed.

Update 10 June 2019 for an update of Canadian case-law developments see here.

Update 30 April 2019 I cannot possibly keep up with all emerging scholarship on the issue yet this review by Penelope Bergkamp most complete and worthwhile.

Update 17 April 2019 Opinio Juris have relevant review here.

Update 16 April 2019 Nick Lees and Tim Pickworth have similar caution for overenthusiastic reaction to the UKSC judgment here.

The SC this morning held in [2019] UKSC 20 Vedanta and Konkola v Lungowe, confirming jurisdiction in England for a human rights /environmental claim against a Zambia-based defendant, Konkola Copper Mines or ‘KCM’, anchored unto an EU-based defendant, Vedanta resources, the ultimate parent company of KCM. Both High Court and Court of Appeal had upheld such jurisdiction (the links lead to my blog post on both).

Of note are:

1. First of all

Lord Briggs’ emphatic rebuke of parties (and courts, one assumes) having disproportionately engaged with the issue of jurisdiction. With reference to ia VTB Capital he underlines that jurisdictional dispute should be settled in summary judgment alone, and should not lead to a mini trial. Reference is made to the size of the bundles etc. A bit of an unfair comment perhaps given that clearly there was a need for SC intervention. At any rate, one imagines that current judgment settles a number of issues and that in future litigation therefore these at least will have to be met with less arguments; lest, as his lordship notes at 14, the Supreme Court’ will find itself in the unenviable position of beating its head against a brick wall.’

2. As noted by Coulson J at 57 in the High Court judgment, neither Vedanta nor KCM pursue an Article 34 Brussels Ia argument of lis alibi pendens with proceedings in Zambia. As I signalled in my succinct review of recent study for the EP yesterday, the A34 defence is likely to be important in future litigation.

3. Applicants’ arguments that pursuing the case against them is an abuse of EU law, were advanced and equally rejected at both the High Court and the Court of Appeal stage. They are pursued again with the SC (at the latter’s express instruction).

  • At 29 Lord Briggs agrees with the HC and the CA and decides that the point that there has been no such abuse of EU law, is acte clair – no reference to the CJEU therefore.
  • At 31 ff he discusses the limited authority (all of it discussed at the HC and the CA) on abuse of Brussels I (a), particularly abuse of the anchor defendant mechanism of (now) Article 8(1), including of course CDC and at 37 raises the interesting issue of remedy: if abuse is found, is it to be disciplined under a European remedy or rather using the common law instrument of forum non conveniens?
  • And at 39: appellants argue that in CSR cases like these, Owusu has the almost inevitable effect that, providing a minimum level of triable issue can be identified against an English incorporated parent, then litigation about environmental harm all around the world can be carried on in England, wherever the immediate cause of the damage arises from the operations of one of that group’s overseas subsidiaries. With the case against the England-based defendant going ahead at any rate, per Owusu, the risk or irreconcilable judgments should jurisdiction against the subsidiaries be vacated, simply becomes to great. Not so hands tied behind the back, appellants argue, but forum non paralysis.
  • At 40 Lord Briggs suggests an adjustment of the English forum non conveniens doctrine for cases like these: namely to instruct claimants of the need to avoid irreconcilable judgments, where the anchor defendant is prepared to submit to the jurisdiction of the domicile of the foreign defendant in a case where, as here, the foreign jurisdiction would plainly be the proper place, leaving aside the risk of irreconcilable judgments

 

4. Despite Owusu, the English courts are still within their rights to reject the case in summary judgment if there is no ‘real issue’ to be tried against the anchor defendant. Here, discussion turned at 42 ff as to whether one should merely apply Chandler v Cape [2012] EWCA Civ 525, or whether this case involves the assertion of a new category of common law negligence liability.

  • This was rejected, like it was by Sales LJ in AAA v Unilever plc [2018] EWCA Civ 1532, which I review here.
  • Lord Briggs 54 concludes that viz the common law of liability there is neither anything special nor conclusive about the parent /subsidiary relationship, and
  • at 53 flags what instantly has become a favourite among commentators on the case: ‘Even where group-wide policies do not of themselves give rise to such a duty of care to third parties, they may do so if the parent does not merely proclaim them, but takes active steps, by training, supervision and enforcement, to see that they are implemented by relevant subsidiaries. Similarly, it seems to me that the parent may incur the relevant responsibility to third parties if, in published materials, it holds itself out as exercising that degree of supervision and control of its subsidiaries, even if it does not in fact do so. In such circumstances its very omission may constitute the abdication of a responsibility which it has publicly undertaken.’

4bis This part of course inevitably may give parent companies a means to prevent such liability (do not proclaim group-wide policies, let alone train or enforce them – as Gabrielle Holly also immediately noted here). However a variety of mechanisms may prevent this becoming a cheap trick to avoid liability: such compliance programs are often required under competition law, financial law etc., too; are relevant for directors’ liability; and of course may already (such as in the French devoir de vigilance) or in future (as mooted ia by the EC and the EP) be statutorily prescribed.

At 60: in the case at issue, the SC finds that the High Court with sufficient care examined and upheld the essence of the claimants’ case against Vedanta, that it exercised a sufficiently high level of supervision and control of the activities at the Mine, with sufficient knowledge of the propensity of those activities to cause toxic escapes into surrounding watercourses, as to incur a duty of care to the claimants. At 61 Lord Briggs adds obiter that not all the material (particularly services agreements) would have persuaded him as much as they did the HC or the CA, however at 62 he emphasis again that the HC and CA’s judgment on same was not vitiated by any error of law.

5. At 66 ff then follows the final issue to be determined: forum non conveniens and the further advancement of the issue already signalled above: it troubles Lord Briggs at 75 that the trial judges did not focus upon the fact that, in this case, the anchor defendant, Vedanta, had by the time of the hearing offered to submit to the jurisdiction of the Zambian courts, so that the whole case could be tried there. (An argument which was considered by Leggatt J in VTB).

  • Evidently the A4 BruIa case would have had to continue per Owusu, yet the reason why the parallel pursuit of a claim in England against Vedanta and in Zambia against KCM would give rise to a risk of irreconcilable judgments is because the claimants have chosen to exercise that right to continue against Vedanta in England, rather than because Zambia is not an available forum for the pursuit of the claim against both defendants: claimant-inflicted forum non.
  • Why, at 75 in fine, (it may be asked) should the risk of irreconcilable judgments be a decisive factor in the identification of the proper place, when it is a factor which the claimants, having a choice, have brought upon themselves?
  • Lord Briggs’ argument here is complex and I need to cross-refer more to the various authorities cited however the conclusion seems to be that Lord Briggs rejects the argument of Leggatt J in VTB and he finds that ! provided the ex-EU forum is a suitable forum, under English private international law claimants do have to make a choice: either only sue the A4 defendant in the EU but not the ex-EU subsidiaries; or sue all in the forum where they may all be sued (if there is such a forum), here by virtue of submission to the non-EU forum. The alternative would allow claimant to profit from self-inflicted risks of irreconcilable judgments.
  • In the end the rule is of no impact in the case for Zambia was found not to be an appropriate forum, for reasons of ‘substantial justice’: among others because of the absence of Conditional Fee Agreements, and given the unavoidable scale and complexity of this case (wherever litigated), the trial judge was right that it could not be undertaken at all with the limited funding and legal resources which the evidence led him to conclude were available within Zambia.

 

6. By way of my conclusion so far: (update 11 April 2019: in the meantime echoed by Robert McCorquodale’s analysis here; and here; he was counsel for interveners in the case hence was able to refer to insight gained from having seen parties’ submissions)

The group policy direction, enforcement, compliance and communication of same -issue is an important take away from this case. Particularly as it may be expected that holding companies will not find it that straightforward simply to do away with such policies. Of great impact too will be the choice now put upon claimants in the forum non conveniens issue: suing nondom companies by virtue of anchoring unto the A4 mother company in England at least will be less straightforward (many usual suspects among the competing jurisdictions do have CFAs, allow for third party funding  etc.). Yet the two in my view dovetail: the reason for bringing in the ex-EU subsidiaries often is because the substantial case against them tends to serve the case against the mother. With a tighter common law neglicence liability the need to serve the daughter may be less urgent.

Geert.

European private international law, second ed. 2016, Chapter 8, Headings 8.3.1.1., 8.3.2

Petrobas securities class action firmly anchored in The Netherlands. Rotterdam court applying i.a. forum non conveniens under Brussels Ia.

Many thanks to Jeffrey Kleywegt and Robert Van Vugt for re-reporting Stichting Petrobas Compensation Foundation v PetrÓleo Brasilieiro SA – PETROBRAS et al. The case, held in September (judgment in NL and in EN) relates to a Brazilian criminal investigation into alleged bribery schemes within Petrobras, which took place between 2004 and 2014. the Court had to review the jurisdictional issue only at this stage, and confirmed same for much, but not all of the claims.

The Dutch internal bank for Petrobas, Petrobas Global Finance BV and the Dutch subsidiary of Petrobas, Petrobas Oil and Gas BV are the anchor defendants. Jurisdiction against them was easily established of course under Article 4 Brussels Ia.

Issues under discussion, were

Firstly, against the Dutch defendants: Application of the new Article 34 ‘forum non conveniens’ mechanism which I have reported on before re English and Gibraltar courts. At 5.45: defendants request a stay of the proceedings on account of lis pendens, until a final decision has been given in the United States, alternatively Brazil, about claims that are virtually identical to those brought by the Foundation. They additionally argue a stay on case management grounds. However the court finds

with respect to a stay in favour of the US, that

the US courts will not judge on the merits, since there is a class settlement; and that

for the proceedings in which these courts might eventually hold on the merits (particularly in the case of claimants having opted out of the settlement), it is unclear what the further course of these proceedings will be and how long they will continue. For that reason it is also unclear if a judgment in these actions is to be expected at ‘reasonably short notice’: delay of the proceedings is a crucial factor in the Article 34 mechanism.

with respect to a stay in favour of Brasil, that Brazilian courts unlike the Dutch (see below) have ruled and will continue to rule in favour of the case having to go to arbitration, and that such awards might not even be recognisable in The Netherlands (mutatis mutandis, the Anerkennungsprognose of Article 34).

Further, against the non-EU based defendants, this of course takes place under residual Dutch rules, particularly

Firstly (Dutch CPR) Article 7(1)’s anchor defendants mechanism such as it does in Shell. The court here found that exercise of jurisdiction would not be exorbitant, as claimed by Petrobas: most of the claims against the Dutch and non-Dutch defendants are so closely connected as to justify a joint hearing for reasons of efficiency, in order to prevent irreconcilable judgments from being given in the event that the cases were heard and determined separately: a clear echo of course of CJEU authority on Article 8(1). The court also rejects the suggestion that application of the anchor mechanism is abusive.

It considers these issues at 5.11 ff: relevant is inter alia that the Dutch defendants have published incorrect, incomplete, and/or misleading financial information, have on the basis of same during the fraud period issued shares, bonds or securities and in that period have deliberately and wrongly raised expectations among investors. Moreover, at 5:15: Petrobras has itself stated on its website that it has a strategic presence in the Netherlands.

Against two claims ‘involvement’ of the NL-based defendants was not upheld, and jurisdiction denied.

Further, a subsidiary jurisdictional claim for these two rejected claims on the basis of forum necessitatis (article 9 of the Duch CPR) was not upheld: Brazilian authorities are clearly cracking down on fraud and corruption (At 5.25 ff).

Finally  and again for these two remaining claims, are the Netherlands the place where the harmful event occurred (Handlungsort) and /or the place where the damage occurred (Erfolgsort)? Not so, the court held: at 5.22: the Foundation has not stated enough with regard to the involvement of the Dutch defendants in those claims, for the harmful event to be localised in the Netherlands with some sufficient force. As for locus damni and with echos of Universal Music: at 5.24: that the place where the damage has occurred is situated in the Netherlands, cannot be drawn from the mere circumstance that purely financial damage has directly occurred in the Dutch bank accounts of the (allegedly) affected investors – other arguments (see at 5.24) made by the Foundation did not convince.

Finally, an argument was made that the Petrobas arbitration clause contained in its articles of association, rule out recourse to the courts in ordinary. Here, an interesting discussion took place on the relevant language version to be consulted: the Court went for the English one, seeing as this is a text which is intended to be consulted by persons all over the world (at 5.33). The English version of article 58 of the articles of association however is insufficiently clear and specific: there is no designated forum to rule on any disputes covered by the clause. Both under Dutch and Brazilian law, the Court held, giving up the constitutional right of gaining access to the independent national court requires that the clause clearly states that arbitration has been agreed. That clarity is absent: the version consulted by the court read

“Art. 58 -It shall be resolved by means of arbitration [italics added, district court], obeying the rules provided by the Market Arbitration Chamber, the disputes or controversies that involve the Company, its shareholders, the administrators and members of the Fiscal Council, for the purposes of the application of the provision contained in Law n° 6.404, of 1976, in this Articles of Association, in the rules issued by the National Monetary Council, by the Central Bank of Brazil and by the Brazilian
Securities and Exchange Commission, as well as in the other rules applicable to the functioning of the capital market in general, besides the ones contained in the agreements eventually executed by Petrobras with the stock exchange or over-the-counter market entity, accredited by the Brazilian Securities and Exchange Commission, aiming at the adoption of standards of corporate governance established by these entities, and of the respective rules of differentiated practices of corporate governance, as the case may be.”

A very relevant and well argued case – no doubt subject to appeal.

Geert.

(Handbook of) EU private international law, 2nd ed.2016, Chapter 2, almost in its entirety.