Tag: Article 34

Posted on

Galapagos v Kebekus. Freeport’s unfinished anchor mechanism analysis continues to spook the intensity of merits review at the jurisdictional stage.

Galapagos Bidco SARL v Kebekus & ors [2021] EWHC 68 (Ch) is yet again a fairly extensive first instance judgment merely on the issue of jurisdiction, entertaining Article 8(1) Brussel Ia’s anchor defendant mechanism as well as Article 25 choice of court.

On A8(1), focus of the discussion was the extent of a merits review under A8(1), which I also discuss  in Sabbagh v Khoury and Senior Taxi v Agusta Westland (both referred to here by Zacaroli J at 44 ff.; as was nb PIS v Al Rajaan). The issue was raised in CJEU C-98/06 Freeport but not answered. The judge here uses the notion of ‘sustainable claim’ to ensure absence of abuse of the anchor mechanism, concluding at 132 after fairly serious if arguably not excessive engagement with the merits, that the conditions of A8(1) are fulfilled.

Article 25 choice of court is discussed obiter at 138 ff., leading to some discussion on the timing of the binding character of the clause upon various parties (and a minor side-issue re Brexit).

A case-management stay was also applied for, with the judge justifiably adopting the strict approach at 160 that such a stay must not be used to circumvent the inapplicability of an Article 34 BIa challenge (the A34 route was dropped; in the light of A25 jurisdiction being established, it would be unavailable at any rate): case-management stay in such circumstances is in essence an application for forum non conveniens which is not permitted under BIa.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.13.1 (in particular 2.496); Heading 2.2.15.3.2.

Posted on

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.

Posted on

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

Update 8 July 2022 the Court of Appeal today has unanimously upheld the appeal ([2022] EWCA Civ 951), holding unanimously that the forum non conveniens, A34 Brussels Ia and case-management stay applications all fail. Bar a (likely) attempt to appeal to the Supreme Court, the victims of the 2015 Fundão Dam disaster may now sue in England and Wales. I will have analysis on the decision up soon in a separate post.

Update 27 July 2021 the Court of Appeal today granted the CPR 52.30 application and has given permission to appeal.

Update 10 May 2021 the Court of Appeal have agreed to hear our application to challenge the refusal for PTA.

Update 31 03 2021 the Court of Appeal have confirmed refusal to appeal in an order which fails to engage properly with inter alia the A34 issues.

Update 1 February 2021 Turner J last week refused permission to appeal (which can now still be taken to the Court of Appeal itself).

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.

Posted on

Petrobas securities class action. Applicable law update: Dutch court holds under Rome II on lex causae in tort for purely economic loss. Place of listing wins the day (and leads to Mozaik).

Thank you Matthias Lehmann for flagging and reviewing the Rotterdam Court’s judgment late in January on applicable law in the Petrobas case. I had earlier reviewed the jurisdictional issues, particularly the application of Brussels Ia’s Article 33-34.

The case relates to a Brazilian criminal investigation into alleged bribery schemes within Petrobras, which took place between 2004 and 2014. The court first, and of less interest for the blog, deals with a representation issue, holding that Portuguese speakers cannot be represented in the class, for the Portuguese version of the relevant dispute settlement provisions, unlike the English translation, was not faulty.

Turning then to applicable law at 5.39 ff. Events occurring on or after 12 January 2009 are subject to the Rome II Regulation. For those before that date, Dutch residual PIL applies which the Court held make Brazilian law lex causae as lex loci delicti commissi: for that is where the alleged fraud, bribery and witholding of information happened.

For the events which are covered by Rome II, the court does not wait for the CJEU finding in VEB v BP and squarely takes inspiration from the CJEU case-law on purely financial damage and jurisdiction: Kronhofer, Kolassa, Universal Music. The court notes that the CJEU in these cases emphasised a more than passing or incidental contact with a State (such as: merely the presence of a bank account) as being required to establish jurisdiction as locus damni. At 5.47 it rejects the place of the investor’s account as relevant (for this may change rapidly and frequently over time and may also be easily manipulated) and it identifies the place of the market where the financial instruments are listed and traded as being such a place with a particular connection to the case: it is the place where the value of the instruments is impacted and manifests itself. It is also a place that meets with the requirements of predictability and legal certainty: neither buyer nor seller will be surprised that that location should provide lex causae.

Conclusion therefore is one of Mozaik: Brasil, Argentina, Germany, Luxembourg are lex causae as indeed may be other places where Petrobas financial instruments are listed. (At 5.49: Article 4(2)’s joint domicile exception may make Dutch law the lex causae depending on who sues whom).

Geert.

(Handbook of) EU private international law, 2nd ed.2016, Chapter 4, Heading 4.4.

 

 

 

 

Posted on

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 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

Update 29 10 2021 the first instance judge’s decision not to extend time to serve Date of Damage Pleadings (“DODPs”) and associated material, was upheld by the Court of Appeal.

Update 1 October 2021 Stuart-Smith J’s finding that the case could not proceed as a representative action was upheld: Jalla & Anor v Shell International Trading And Shipping Co Ltd & Anor (Appeal (2): Representative Action) [2021] EWCA Civ 1389.

Update 27 January 2021 ) – the jurisdictional issues were not under appeal, which was held today: see Jalla & Ors v Shell International Trading And Shipping Company & Anor [2021] EWCA Civ 63, in which the Court of Appeal held that claimants do not have a cause of action for the continuing nuisance, leading to the claim of most of them being statute-barred.

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 concreto. He 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.

Posted on

Steinhoff: The court at Amsterdam may yet rule on ‘first seized’ in Article 33-34 Brussels Ia’s forum non-light rules.

In California Public Employees’ Retirement System et al v Steinhoff International Holdings NV et al, the Rechtbank Amsterdam stayed proceedings in The Netherlands on the basis of Article 30 Brussels Ia (related actions), in favour of proceedings, started earlier, in Germany.

Despite the nominal difference in applicable law (Dutch cq German), the Court held that at the end of the day, both the Dutch and German laws in the competing proceedings aimed to determine whether the corporations at issue were liable for having released misleading financial information.

Of note to the blog is also the potential for lis pendens with South African proceedings, under Article 33 or 34 Brussels Ia. The court announced that it would revisit these articles if and when the stay on the basis if lis pendens in Germany, were to be lifted. This includes the question whether, to decide whether a non-EU court has been seized first, A32 BIa ought to be followed . Under Dutch residual rules, the lex fori in the foreign proceedings determines  the timing of seizure.

Finally, the court also held it was staying the proceedings against other defendants, domiciled at California, until such time as the CJEU will have held in Vereniging van Effectenbezitters v BP, which will hopefully shed light on locus damni in cases of purely economic loss. (The court having rejected The Netherlands as locus delicti commissi.) Dutch residual rules on the issue are applied mutatis mutandis per the EU rules.

Geert.

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

Posted on

Gray v Hurley. Court of Appeal refers to Luxembourg on anti-suit to support EU jurisdiction against ex-EU action.

Update 2 October 2020 the case is know at the CJEU as C-946/19 MG v HH, the questions referred are also here, and Marta Isidro now reports that the request has been retracted following settlement.

Update 6 July 2020  for a case-note by Mukarrum Ahmed see here.

Update a few hours after posting. For the New Zealand perspective see Jan Jakob Bornheim’s thread here.

I reviewed the High Court’s decision (refusal of anti-suit) in Gray v Hurley here. The Court of Appeal [2019] EWCA Civ 2222 has now referred to Luxembourg.

As I noted at the time, the High Court discussed the matrimonial exception of Brussels Ia, as well as the exclusive jurisdictional rule of Article 24(1), and (briefly) Article 25’s choice of court. The appeal however only concerns the application of Article 4’s domicile rule. Was Mr Hurley domiciled in England on 26 March 2019, when the court was seized?  Article 62(1) Brussels Ia refers to the internal law. Lavender J decided that Mr Hurley was not domiciled in England, however that Lindner should be read as extending to the defendant’s last known domicile in a case where the Court: (1) is unable to identify the defendant’s place of domicile; and (2) has no firm evidence to support the conclusion that the defendant is in fact domiciled outside the European Union. I suggested at the time that this is a very relevant and interesting reading of Lindner, extending the reach of Brussels Ia as had been kickstarted by Owusu, with due deference to potential New Zealand jurisdiction (New Zealand domicile not having been established).

Note also that Mr Hurley had initially also relied on A34 BI1 however later abandoned this line. Article 34 is however cross-referenced in the discussion on Article 4’s domicile rule.

The Court of Appeal has concluded that the meaning of Article 4(1) and its applicability in this case is not acte clair and has referred to Luxembourg. The focus of the discussion was not whether or not Ms Gray was domiciled in England (see however my doubts as to the extension of Linder in the case at issue). Rather, the focus is on anti-suit and Article 4: Ms Gray submits that Article 4(1) provides her with a right not to be sued outside England, where she is domiciled, and that the court is obliged to give effect to this right by the grant of an anti-suit injunction to restrain proceedings in a third State.

As the Court of Appeal notes, the consequences of her arguments are that an EU-domiciled tortfeasor who was being sued only in a third State could require the court of his domicile to grant an anti-suit injunction – in contrast to the ‘flexible mechanism’ under Articles 33 and 34 in cases where the same or related proceedings exist in both jurisdictions. By the same token, if there are proceedings in a Member State, the defendant could seek an anti-suit injunction to prevent the claimant from taking or continuing unrelated proceedings in a third State. And, as appears from the present case, it is said that it makes no difference that the claimant’s case is not one that the courts of the Member State could themselves entertain, meaning that the ‘right’ said to be conferred on the claimant by Article 4(1) would have no content.

Yet again therefore interesting issues on the use of anti-suit to support EU (rather than: a particular Member State) jurisdiction. The Court of Appeal is minded not to side with Ms Gray, for comity reasons (anti-suit being a serious meddle in other States’ jurisdictional assessment) and because the use of anti-suit here would not serve the Regulation’s objectives of sound and harmonious administration of justice. At 52 it suggests the MS Gray line of reasoning would have profound consequence which would be expected to be explicit in the Regulation and not to be arrived at sub silentio – but refers to the CJEU for certainty.

Geert.

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

 

Posted on

NN v Barrick Tz Limited (Acacia) in the English courts. Another CSR /jurisdictional marker with likely role for Articles 33-34 Brussels Ia.

I have for the moment little to go on in a new claim, launched in the English courts, in the Corporate Social Responsibility /mass torts category. The claim was apparently filed against Barrick Tz Limited, formerly Acacia Mining, domiciled in the UK, alleging human rights abuses by security forces at the company’s North Mara mine.

Of jurisdictional note undoubtedly will be the application of Articles 33-34 Brussels Ia: forum non conveniens – light, and a likely application for summary judgment by defendant. There is as far as I know no mother holding issue involved, unlike in Vedanta or Bento Rodriguez /Samarco.

Geert.

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

 

Posted on

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.

 

Posted on

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 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

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

%d bloggers like this: