Anglo American: The Court of Appeal on ‘Central Administration’ in Brussels-I

In Anglo-American South Africa, the Court of Appeal held mid July on the application of the definition of corporate ‘domicile’ in the Brussels I-Regulation. Specific context was the use of the English courts under the Brussels I Regulation, by a Botswana-born plaintiff, against a South Africa incorporated company, part of the Anglo-American PLC group of companies. Anglo-American itself are incorporated in England, hence a case against them would have been straightforward (under Article 2 of the Regulation) however would not have had any merit: there was no suggestion that Anglo-American were in any way at fault for the behaviour of one of the employees of one of their corporate affiliates.

For a company, legal person or association of natural persons, Article 60 of the Regulation (in contrast with the provision for natural persons, which refers to national conflicts law to determine the concept) aims to encourage harmonisation by listing three possible locations only, for the determination of corporate domicile: statutory seat (a term not known in English or Irish law: hence Article 60(2) refers to registered office or place of incorporation; central administration; and principal place of business.

Evidently this troika of criteria does not rule out positive jurisdiction conflicts – it does help address negative ones (ie where no court claims jurisdiction).

It was for the Court of Appeal to decide whether under the rules of the Brussels I-Regulation, AASA could be found to have their central administration in England (place of incorporation and principal place of business not having any calling). Justifiable reference was made to the fact that the concept needs to be given an EU (‘autonomous’) meaning. ECJ case-law on the exact issue is however, non-existent (reference in the judgment was made to Daily Mail, ECJ case-law on the freedom of establishment, and to relevant German case-law).

Aikens LJ essentially agreed with the analysis in first instance by Smith J, that ‘the correct interpretation of “central administration” in Article 60(1)(b), when applied to a company, is that it is the place where the company concerned, through its relevant organs according to its own constitutional provisions, takes the decisions that are essential for that company’s operations. That is, to my mind, the same thing as saying it is the place where the company, through its relevant organs, conducts its entrepreneurial management; for that management must involve making decisions that are essential for that company’s operation’. (at 45).

This is in contrast with (at 39) both place of incorporation, and principal place of business: ‘the first is the domicile for the purpose of the internal laws of the state where the company is incorporated. It will usually be identified in its Memorandum and Articles of Association or equivalent. The third is the place where the company does its principal “business”. Where that is must be a question of fact in each case.

The case is an interesting attempt at forum shopping, with a certain relevance for the corporate social responsibility debate: by suggesting that the place of central administration is the very head of the corporate spider web, plaintiffs can sue directly in Europe. This case shows however that such suggestion is not easily substantiated. Neither would it necessarily assist much at the applicable law stage.

Geert.

Place of habitual employment and the alternative findings of corporate ‘domicile’- The Employment Appeal Tribunal in Powell

In David Powell v OMV Exploration and production limited, the Employment Appeal Tribunal ruled on the (absence of) jurisdiction for UK courts in the case of a UK domiciled employee, employed originally to work from Yemen but in reality working from Dubai, hired by a Manx incorporated company run from Austria. The employment contract was subject to Manx law and to a choice of court agreement in favour of the courts of the Isle of Man. The Tribunal however ruled that the case was within the scope of the Brussels I Regulation – albeit like the tribunal itself, the Appeal tribunal does not systematically review the three alternative grounds for domicile of Article 60 of the Jurisdiction Regulation.

Domicile was found to be in Austria, for this is the place where the company was effectively managed from. The UK could claim jurisdiction on the basis of Article 19, were the employee found to habitually work in the UK – quod non.

A classic example of the employment chapter of the JR, with a bit of exotic flavouring (Manx) and, even if not altogether tidy, a correct conclusion on Austrian domicile.

Geert.

 

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