Posts Tagged Article 6(3)
Inversiones v Cancun. The Dutch Supreme Court on counterclaims and locus damni for diluted shareholdings.
This post can be classified under ‘better late than never’. Thank you Irina Timp for flagging in December, Inversiones v Cancun at the Dutch Hoge Raad. The case concerned alleged dilution of one company’s (Inversiones) shareholding in another as a result of increased emission of shares orchestrated by another shareholder (Cancun). Note that exclusive jurisdiction under Article 24(2), justifiably, was not suggested.
The Hoge Raad focused on the discussion concerning (now) Article 8(3)’s provision for counterclaims: courts even if not the court of domicile of the defendant have jurisdiction ‘on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending;’ C-185/15 Kostanjevec is the main reference. Of particular note was the language issue: the Dutch version of the text employs ‘rechtsfeit’: suggestion a narrower interpretation than the English version (‘facts’) just quoted. The Hoge Raad justifiably followed the linguistic implications of the majority of language versions (e.g “facts”, “Sachverhalt”. “fait”) and held in favour of jurisdiction on the basis of a counterclaim.
The result of that finding is that it did not further entertain the consequences of Universal Music on the location of the locus damni for diluted shareholdings: what other factors are needed to have the shareholder’s corporate domicile qualify for same?
On the temporal scope of Brussels I, and the notion of ‘counterclaim’ in Art.6(3) Brussels I Regulation. Kokott AG in C-185/15 Kostanjevec.
In Case C-185/15 Kostanjevec, Kokott AG (not available in English at the time of writing) advised on a number of issues in relation to a counterclaim under Article 6(3) Brussels I (now 8(3) of the Recast). At the core of the dispute lies a leasing contract and the consumer counterclaiming for restitution per unjust enrichment, of the sums she had transferred to counterparty. The counterclaim follows the annulment of the contract between the two, even though Marjan Kostanjevec had initially been ordered to pay.
The first relates to the temporal scope not of the Recast Brussels I Regulation viz Brussels I, but rather simply of Regulation 44/2001, in particular with respect to a Member State (Slovenia) which joined the EU on 1 May 2004. The Brussels Convention had never applied to Slovenia. The proceedings between parties go back to 1995, prompting the EC among others to suggest that per Article 66 of the Regulation (This Regulation shall apply only to legal proceedings instituted…after the entry into force thereof) it simply does not apply. Kokott AG however suggests first of all that the new claim in restitution, followed the use of a separate means of redress under Slovenian law, instituted after the initial claim by the leasing company had been wrapped up in its entirety. Moreover, other language versions refer not to ‘proceedings’ but rather to a claim (defined in C-341/93 Danvaern Production as claims by defendants which seek the pronouncement of a separate judgment or decree. It does not apply to the situation where a defendant raises, as a pure defence, a claim which he allegedly has against the plaintiff (at 18).
Regulation 44/2001 applies therefore, in the view of the AG. I would agree that it should: this is particularly relevant where parties have a long and complex history of litigation. (Similarities here may exist with Nikiforidis, which is in my blog pile). Applying Danvaern Production however for the interpretation of Article 66 I think may be problematic. The raison d’être of Article 6(3) is to help avoid conflicting decisions in cases that are closely related. Even if, per Danvaern, they seek a separate pronouncement, they do essentially relate to reciprocal commitments which are part of the same bundle of facts. (See also Kokott AG herself, in para 44 of her Opinion with reference to the Jenard Report and to Léger AG in Danvaern). It feels a little inconsistent to call upon arguments developed viz inseparable claims (under Art.6(3): Danvaern) to support a thesis of separability (viz the application ratione temporis: they are separate claims even if they have a common history in fact and in contractual liaison).
With reference to C-297/14 Hobohm, the AG subsequently also advises that the counterclaim is covered by the Regulation’s consumer contracts title as having a ‘close link’ with the consumer contract, and, for the sake of completeness, and with reference to Profit SIM, that claims for restitution are covered by (now) Article 7(1) ‘s forum contractus even if they are grounded in a claim arguing that the contract at issue did not actually exist.
I am curious how the Court will approach the temporal application issue.
(Handbook of) European Private International law, 2nd ed. 2016, chapter 2, Heading 22.214.171.124.a, Heading 126.96.36.199, Heading 2.1.1
Habitat Directive: ECJ rejects ‘mitigation measures’ in Briels and forces infrastructure works into the compensation procedure.
The widening of the A2 motorway towards Eindhoven, impacted on the Natura 2000 site Vlijmens Ven, Moerputten & Bossche Broek (‘the Natura 2000 site’). That site was designated by the Netherlands authorities as an SAC for, in particular, the natural habitat type molinia meadows, which is a non-priority habitat type. The Minister provided for a certain number of measures aimed at lessening the environmental impact of the A2 motorway project.
Assessment concluded that the A2 motorway project would have negative implications for the existing area comprising the habitat type molinia meadows. The assessment also stated that sustainable conservation and development of the molinia meadows be achieved if the hydrological system was completed. In that regard the A2 motorway project provides for improvements to the hydrological situation in Vlijmens Ven, which will allow the molinia meadows to expand on the site. The Minister states that this will allow for the development of a larger area of molinia meadows of higher quality, thereby ensuring that the conservation objectives for this habitat type are maintained through the creation of new molinia meadows.
Briels and Others brought an action against the two ministerial orders before the referring court. They take the view that the Minister could not lawfully adopt the orders for the A2 motorway project, given the negative implications of the widening of the A2 motorway for the Natura 2000 site in question. They argue that the development of new molinia meadows on the site, as provided for by the ministerial orders at issue in the main proceedings, could not be taken into account in the determination of whether the site’s integrity was affected. They submit that such a measure cannot be categorised as a ‘mitigating measure’, a concept which is, moreover, absent from the Habitats Directive.
The Netherlands Raad van State suggested that the criteria for determining whether the integrity of the site concerned is affected are not to be found either in the Habitats Directive or the Court’s case-law, whence the question ‘whether the expression “will not adversely affect the integrity of the site” in Article 6(3) of [the Habitats Directive] to be interpreted in such a way that, where the project affects the area of a protected natural habitat type within [a Natura 2000 site], the integrity of the site is not adversely affected if in the framework of the project an area of that natural habitat type of equal or greater size [to the existing area] is created within that site?’ and ‘[If not], is the creation of a new area of a natural habitat type then to be regarded in that case as a “compensatory measure” within the meaning of Article 6(4) of the [Habitats Directive]?’
The Court held (at 28) that the application of the precautionary principle in the context of the implementation of Article 6(3) of the Habitats Directive requires the competent national authority to assess the implications of the project for the Natura 2000 site concerned in view of the site’s conservation objectives and taking into account the protective measures forming part of that project aimed at avoiding or reducing any direct adverse effects for the site, in order to ensure that it does not adversely affect the integrity of the site.
! However (at 29), protective measures provided for in a project which are aimed at compensating for the negative effects of the project on a Natura 2000 site cannot be taken into account in the assessment of the implications of the project provided for in Article 6(3).
(As a supporting argument (at 32), the Court suggested that as a rule, any positive effects of a future creation of a new habitat which is aimed at compensating for the loss of area and quality of that same habitat type on a protected site, even where the new area will be bigger and of higher quality, are highly difficult to forecast with any degree of certainty and, in any event, will be visible only several years into the future. Consequently, they cannot be taken into account at the procedural stage provided for in Article 6(3) of the Habitats Directive).
Authorisation for the project therefore needs to be given in accordance with the procedure for compensation measures, provided for in Article 6(4). (Which does not make the project impossible. It just makes the outcome less certain and at the least more lengthy).
Many developers (and authorities with them) had hoped that a different answer of the ECJ would have had the potential to reduce the amount of negative appropriate assessments. Quod non.