Posts Tagged Autonomous interpretation
In  EWCA Civ 1581 Taftnet v Bogolyubov the Court of Appeal held that an English court can allow addition of a claim which is time barred by the governing law identified by Rome I or Rome II. At 72 Longmore J notes ‘Under Article 12.1(d) of Rome I and Article 15(h) of Rome II, the applicable foreign law governs limitation of actions.’ However neither Rome I nor Rome II apply to matters of procedure (Article 1(3) in both of the Rome Regulations).
The Court of Appeal clearly takes Article 1(3) at face value by allowing amendment of the claim even if it thence includes a claim time barred under the lex causae: not to do so would endanger the consistent application of English procedural law. Article 12 cq 15 do not sit easily with Article 1(3). That has been clear from the start and it is an issue which needs sorting out. In the absence of such clarification, it is no surprise that the English courts should hold as Longmore J does here.
(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 3, Chapter 4.
Aspen Underwriting: When the domicile ship has sailed, litigation splinters. And distinguishing between contract and tort.
Aspen Underwriting v Kairos Shipping et al  EWHC 1904 illustrates the splintering of claims which may well occur when plaintiff chooses to ignore Brussels I’s core jurisdictional rule of domicile of the defendant. Evidently such splintering often is the strategic intention of a plaintiff and even if it does inconvenience them, having part of the claims settled by one court rather than another may still be its overall preference. The case however also highlights important crossed wires between the common law and EU law on the qualification of ‘tort’, and the relation between Rome II and Brussels I (Recast).
The vessel ATLANTIK CONFIDENCE sank in the Gulf of Aden in 2013. It had earlier been held in a limitation Action commenced by her Owners, the First Defendant, that the Vessel was deliberately sunk by the master and chief engineer at the request of Mr. Agaoglu, the alter ego of the Owners. In the current action the Hull Underwriters of the Vessel, who paid out on the hull and machinery policy (“the Policy”) in August 2013 but who now consider, on further investigation, that the Vessel was deliberately cast away by her Owners, claim recovery of the insurance proceeds which were paid to Owners and the Vessel’s mortgagees, Credit Europe Bank NV, the Third Defendant (“the Bank”).
The Bank is domiciled in the Netherlands. and maintains that under the Brussels Regulation the High Court has no jurisdiction to hear and determine the claim against the Bank. It must be sued in the courts of the Netherlands where it is domiciled. The Hull Underwriters maintain that the High Court does have such jurisdiction for three reasons. First, it is said that Bank is bound by a Settlement Agreement which confers exclusive jurisdiction on the court. Second, it is said that the Bank is bound by the exclusive jurisdiction clause in the Policy. Third, it is said that the claims brought against the Bank are matters which relate to tort, delict or quasi-delict and the harmful event occurred in England.
Teare J rejected the first and second argument on the basis of analysis of the settlement. He then looks into Article 7(2) Brussels I Recast. The insurance heading of the Regulation does not apply as the relations concern those between two professional parties (at 72 the High Court refers to C-347/08 Voralberger; the CJEU confirmed later in C-521/14 Sovag).
Whether the claim of misrepresentation leading to the settlement, is one in tort or one in contract depends on how closely one finds it to be connected to the contract at issue (the Settlement). Plaintiff suggests that where such misrepresentations induce a contract, in this case the Settlement Agreement, the resulting claims are not matters relating to tort within the autonomous meaning of Article 7(2) but are matters relating to a contract within Article 7(1).
Teare J settles on the basis of the following convincing argument, at 76: ‘The court is concerned with a claim between the Hull Underwriters and the Bank. The Hull Underwriters allege that misrepresentations made by the Bank induced the Hull Underwriters to enter into the Settlement Agreement with the Owners. They seek to recover damages suffered by the Hull Underwriters as a result of the Bank’s misrepresentations. Whilst there is a factual connection between the claim and the Settlement Agreement I do not consider that that is enough to make the claim a matter relating to a contract and so within Article 7(1). Where there is a claim against the contracting party and it is alleged that the contract should be rescinded on the grounds of misrepresentations made by that party because such misrepresentations induced the contract it can sensibly be said that the subject-matter of the claim is the contract. But in the case of the claim against the Bank I do not consider that it can be fairly said that the subject-matter of the claim is the Settlement Agreement.‘
Now, the claim for damages based upon misrepresentation can be brought in England so long as the “harmful event” occurred in England (at 79; with reference to Bier /Mines de Potasse split into locus delicti commissi and locus damni). Jurisdiction for the claim based on misrepresentation can be brought fully in England because (at 79) ‘either the damage occurred in England (where Norton Rose Fulbright signed the Settlement Agreement and/or where the $22m. was paid to Willis’ bank account in London) or the event giving rise to the damage occurred in London (being the place where the misrepresentations were made and/or the place where the Hull Underwriters were induced).’
At 78 the High Court highlights the difficulty of the qualification viz conflict of laws of restitution based on unjust enrichment. The common law has the precedent of the House of Lords in Kleinwort Benson v Glasgow  1 AC 153. Teare J summarises ‘In that case Lord Goff, with whom the other members of the court agreed on this point, said that a claim in restitution based upon unjust enrichment does not, save in exceptional circumstance, presuppose a harmful event and so is impossible to reconcile with the words of Article 7(2). He was not deterred from reaching this conclusion by the decision in Kalfelis. The claim for restitution in this case is based upon a mistake; it does not require a harmful event, though there might in fact be one as suggested by [plaintiff]. I consider that I am bound to follow the decision of the House of Lords and to hold that the claim in restitution based upon mistake is not within Article 7(2). It must follow that this court has no jurisdiction over that claim and that if it is to be pursued it must be pursued in the Netherlands where the Bank is domiciled.‘
The claim for unjust enrichment cannot be brought in England. Teare J observes the consequence of the Brussels I Regulation (at 80): ‘On case management grounds it is unsatisfactory to reach the conclusion that the tort claim may be brought in England but that the restitution claim may not be brought in England. However, this is the consequence of the Brussels Regulation as was accepted in Kalfelis. Of course, the entirety of the Hull Underwriters’ case against the Bank could be brought in the Netherlands but in circumstances where the Hull Underwriters’ case against the Owners and Managers is being brought in England that also is not satisfactory. The court cannot however base its jurisdictional decisions when applying the Brussels Regulation on considerations of forum conveniens.’
Of note finally is that Kleinwort Benson was issued post Kalfelis but prior to Rome II, which contains a specific heading on unjust enrichment. Notwithstanding its clear non-contractual nature (‘non-contractual’ being the generic title of Rome II which therefore encompasses more than just torts), it is not generally considered a tort: this continues to create issues in the application of Rome II.
A good case to illustrate the lasting challenges in distinguishing contracts from torts.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 18.104.22.168, Heading 22.214.171.124.
Szpunar AG in Mulhaupt /SCI Senior Home: national law determines what rights in rem are under the Insolvency Regulation. However EU law does constrain national room for manouvre.
In C-195/15 Mulhaupt /SCI Senior Home, the question referred reads
Does the term ‘right in rem’ in Article 5(1) of (…) Regulation (…) 1346/2000 (…) on insolvency proceedings include a national rule such as that contained in Paragraph 12 of the Grundsteuergesetz (Law on real property tax, ‘GrStG’) in conjunction with the first sentence of Paragraph 77(2) of the Abgabenordnung (Tax Code, ‘AO’), pursuant to which real property tax debts are by operation of law a public charge on real property and the property owner must accept enforcement against the property in that respect?
Applicant is the trustee in bankruptcy of Société civile immobilière Senior Home, a French registered company. Gemeinde Wedemark is forcing the sale of real estate belonging to Senior home, linked to arrays in real estate tax. It is suggested by the referring court that the qualification under German law, of real property tax (also known as ‘stamp duties’ or ‘estate taxes’), owed to public authorities, as rights in rem, mean that the forced sale of the site at issue, as a result of Article 5(1) of Regulation 1346/2000, is covered by German law and is therefore not subject to French law, which in the case at issue is the lex concursus of the insolvency proceedings that have been opened. Regulation 1346/2000 in the meantime has been replaced by Regulation 2015/848 however the provisions at issue have not materially changed.
Szpunar AG Opined end May (other than a Tweet I have kept schtum about the Opinion so far, for exam reasons).The Opinion is as yet not available in English.
In terms of applicable law, Article 4 of the Regulation is the general rule: unless otherwise stated by the Regulation, the law of the State of the opening of proceedings is applicable.
The general rule of Article 4 inevitably had to be softened for quite a number of instances. As noted in the introduction, insolvency proceedings involve a wide array of interests. The expediency, efficiency and effectiveness craved inter alia by recital 2 (old; now 3) of the Regulation, has led in particular to the automatic extension of all the effects of the application of the lex concursus by the courts in the State of opening of the proceedings. That could not be done without there being exceptions to the general rule:
In certain cases, the Regulation excludes some rights over assets located abroad from the effects of the insolvency proceedings (as in Articles 5, 6 and 7). In other cases, it ensures that certain effects of the insolvency proceedings are governed not by the law of the State of the opening, but by the law of another State, defined in the abstract by Articles 8, 9, 10, 11, 14 and 15. In such cases, the effects to be given to the proceedings opened in other States are the same effects attributed to a domestic proceedings of equivalent nature (liquidation, composition, or reorganization proceedings) by the law of the State concerned. Of particular note are precisely Article 5 on third parties’ rights in rem, but also Article 10 on employment contracts, and Article 13 on ‘detrimental acts’.
The precise demarcation of rights in rem hovers between the classic interpretative rule of EU private international law, namely the principle of autonomous interpretation, and the lack of a European Ius Commune on what rights in rem are. The Advocate General completes his already extensive analysis in Lutz, with a combined reference to the recitals of the Regulation, and the Virgós/Schmit Report.
In particular, Article 5(2) does serve as something of a straightjacket, leading to the conclusion that rights in rem require restrictive interpretation: once the first hurdle of qualification using national law (of the rei sitae) is passed, the right also needs to meet with the fundamentals of what the Virgos-Schmit report defines as rights in rem (at 41-45 of the Opinion): these are (at 103 of the Report): a right in rem basically has two characteristics
(a) its direct and immediate relationship with the asset it covers, which remains linked to its satisfaction, without depending on the asset belonging to a person’s estate or on the relationship between the holder of the right in rem and another person;
(b) the absolute nature of the allocation of the right to the holder. This means that the person who holds a right in rem can enforce it against anyone who breaches or harms his right without his assent (e.g. such rights are typically protected by actions to recover); that the right can resist the alienation of the asset to a third party (it can be claimed erga omnes, with the restrictions characteristic of the protection of the bona fide purchaser); and that the right can thus resist individual enforcement by third parties and in collective insolvency proceedings (by its separation or individual satisfaction).
The Virgos-Schmit report in this respect cross-refers to the 1968 Brussels Convention however it is noteworthy that the CJEU, in defining rights in rem under the now Brussels I recast Regulation, does not in turn refer to the Virgos-Schmit report.
In conclusion therefore the AG suggests that the right at issue is indeed a right in rem under Article 5. Finally, that it benefits a public authority (the inland revenue) rather than a private individual or legal person, does not impact upon that qualification: Szpunar AG correctly highlights that the public character of the creditor is not a determining criteria in either the recitals of the Regulation or the Virgos-Schmit report.
A prima facie straightforward question met by complete analysis of the AG which in passing solves more issues than those raised by the referring court: this Opinion may well become an important part of authoritative sources in applying the Insolvency Regulation..
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.1 ).
And the winner is….National law. Saugmandsgaard ØE AG in Austro-Mechana on Tort and reproduction rights.
Determining whether a legal relationship is one in tort, for the purposes of (now) Article 7(2) of the Brussels I Recast Regulation, is in principle subject to autonomous interpretation. National law ought not to feature (emphasised ia in Melzer). In the Brussels I Regulation, Article 5(3) features alongside Article 5(1)’s jurisdictional rule for contract. (In the Recast Regulation, Artt 7(1 and (2)). Sometimes, as in Brogsitter, both are present between two contractual parties and one needs to be separated from the other. In Kalfelis, the CJEU defined ‘tort’ as ‘all actions which seek to establish the liability of a defendant and which are not related to a “contract” within the meaning of Article 5(1).‘
Tobias Lutzi’s review is very useful in reminding us of the need to distinguish the two tracts of the Kalfelis definition. Just focusing on Brogsitter might lead one into thinking that Article 5(1) and 5(3) [7(1) /7(2)] ‘dovetail’: i.e. if it is not the one, it is the other (with tort being the subordinate category). That is however clearly not the case: that it may have looked like this in Brogsitter is due to liability being present in any case: the issue was there where contractual liability stops and liability in tort takes over.
Article 5(3) therefore requires an ‘action which seeks to establish the liability of a defendant’ which leads the Advocate General here into lengthy review of the Austrian implementation of EU law on copyright levies. With respect, I do not think that is what is either called for or justified. Article 5(3) requires an autonomous, EU interpretation. Too much interference of national law spoils that broth – a point also made in Melzer. Moreover the application of the jurisdictional categories is just that: it determines jurisdiction only. Once that settled, the national courts regain their authority to requalify and indeed may still decide that there is no liability in tort (or contract, as the case may be) at all, but rather one in contract (or tort, as the case may be) or indeed none at all.
I feel Sharpston AG’s centre of gravity etc. modus operandi, suggested by her re distinguishing between Rome I and II in Ergo but (probably) not accepted by the Court, would have come in handy at the jurisdictional level in Austro Mechana, too.
The CJEU’s judgment here is one to look out for.
European private international law, second ed. 2016, Chapter 2, Heading 126.96.36.199
Jurisdiction rules on joinders apply regardless of whether they are brought by or against third parties. The insurance title does not apply between professional parties. CJEU in Sovag.
The CJEU has held in Case C-521/14 Sovag that Article 6(2) Brussels I (Article 8(2) in the Recast) applies regardless of whether the proceedings are brought against (which is what inter alia the English language version suggests) or by a third party.
A, the victim of a traffic accident that took place in Germany, brought an action in Finland against SOVAG, with which the vehicle responsible for the damage was insured. That traffic accident also constituting a work accident under the Law on accident insurance, If, which is established in Finland, paid A compensation for the accident in accordance with that law. After A had brought the action against SOVAG, If itself sued SOVAG before the same court of first instance.
The national court in first instance held that, in accordance with Article 8 of Regulation 44/2001, in matters relating to insurance jurisdiction may be determined by the provisions of Section 3 of Chapter II of that Regulation alone. According to SOVAG, Article 6(2) of Regulation 44/2001 is indeed not applicable because Section 3 of Chapter II of the same Regulation establishes an autonomous system for the conferring of jurisdiction in matters of insurance. On this issue, the CJEU (at 30) reminded the national court of earlier case-law that where the action at issue in the main proceedings concerns relations between professionals in the insurance sector, and will not affect the procedural situation of a party deemed to be weaker, the insurance title does not apply. [Relevant precedent is in particular C-347/08 Voralberger v WGV-Schwabishe]. The objective of protecting a party deemed to be weaker being fulfilled once jurisdiction is established on the basis of Section 3 of Chapter II of Regulation 44/2001, subsequent procedural developments concerning only relations between professionals cannot fall within the ambit of that section.
Next, the wording of several of the language versions of Article 6(2), in particular the German, French, Finnish and Swedish versions, does not prevent the court before which the original proceedings are pending from having jurisdiction to hear and determine an action brought by a third party against one of the parties to the original proceedings. However, other language versions of that provision, particularly the English language version, appear to restrict its scope to actions brought against third parties (‘a person domiciled in a Member State may also be sued: … as a third party’).
While the CJEU acknowledged that the special jurisdictional rules need to be applied restrictively, ie not going beyond their purpose, here the purpose of Article 6(2) is the harmonious administration of justice, namely minimising the possibility of concurrent proceedings and ensuring that irreconcilable judgments will not be given in two Member States. Therefore Article 6(2) must also apply where the third party brings the proceedings, not just where it is drawn into those proceedings by others.
However, the Court also sanctioned the Finnish rule of civil procedure that the right of a third party to bring an action in connection with pending judicial proceedings, is contingent on that action being linked to the original proceedings. Given that Article 6(2) does not apply where the proceedings were brought ‘solely with the object of removing’ the party concerned from the jurisdiction of the court which would ordinarily have jurisdiction to hear the case, the CJEU OK-ed the Finnish rule as being one that assist in helping to avoid abuse of the rule on joinders.
I would have thought the Court would have made that rule one of EU law, given its insistence on autonomous interpretation. (Rather than simply OK-ing a national rule). Whether there is such a European rule therefore must stay into the open a little longer.
Burgo Group: Some not altogether shocking revelations on the Insolvency Regulation. Useful revelations nevertheless.
There’s case-law of the Essent, Kylie Minogue (eDate Advertising), Seal Pups, or Kiobel type. And then there is case-law of the, well, Burgo type. In Burgo Group v Illochrama SA, Case C-327/13, the ECJ held on 4 September. The judgment does not reveal anything shocking. (Some might argue at least some of the questions could have been acte claire). However the Court’s findings nevertheless put to bed some concerns which insolvency practitioners might have had.
On 21 April 2008, the Commercial Court, Roubaix-Tourcoing (France) placed all the companies in the Illochroma group — including Illochroma, established in Brussels (Belgium) — into receivership and appointed Maître Theetten as agent. On 25 November 2008, it placed Illochroma in liquidation and appointed Maître Theetten as liquidator.
Burgo Group, established in Altavilla-Vicentina-Vicenza (Italy), is owed money by Illochroma for the supply of goods. On 4 November 2008, Burgo Group presented Maître Theetten with a statement of liability in the amount of EUR 359 778.48. Maître Theetten informed Burgo Group that the statement of liability could not be taken into account because it was out of time.
Burgo Group then requested the opening of secondary proceedings in respect of Illochroma. The referring court (The Brussels Court of Appeal) observed that the Insolvency Regulation defines ‘establishment’ as any place where the debtor carries out a non-transitory economic activity with human means and goods, which is the situation in the present case. Illochroma is a company with two establishments in Belgium, where it is the owner of a building, buys and sells goods and employs staff. Illochrama and the liquidator contend that, since Illochroma has its registered office in Belgium, it cannot be regarded as an establishment within the meaning of Regulation No 1346/2000. They argue that secondary proceedings are restricted to establishments without legal personality (issue 1).
Belgian law applicable to the present case provides that any creditor, including a creditor established outside Belgium, may bring an action before a Belgian court for the opening of insolvency proceedings against its debtor. However, Illochroma maintains that that right is restricted to creditors established in the Member State of the court before which the action seeking the opening of secondary proceedings has been brought, since the sole purpose of such proceedings is to protect local interests (issue 2).
Finally, the referring court observes that Regulation No 1346/2000 does not state whether the possibility for the persons referred to in Article 29 thereof to request, in the Member State within the territory of which the establishment is situated, the opening of secondary proceedings is a right that must be recognised by the court having jurisdiction in that regard or whether that court enjoys a discretion as to whether it is appropriate to grant that request, with a view, in particular, to protecting local interests (issue 3).
With respect to issue 1, the ECJ first of all dismissed any suggestions that COMI may be second-guessed by courts in other Member States. Even if the French courts erred in accepting primary jurisdiction, per Bank Handlowy the courts in other Member States have to stick by that judgment. Any challenge to it must be brought in the national courts of the Member States were main proceedings were opened. The Regulation nevertheless of course has inserted the possibility of secondary proceedings precisely to protect local interests in other Member States. (Even though correction of COMI was not as such thought of when secondary proceedings’ architecture was conceived, in practice they do serve to offset some of the consequences of (alleged) wrong COMI assessment).
‘Establishment’ is defined in Article 2(h) of Regulation No 1346/2000 as ‘any place of operations where the debtor carries out a non-transitory economic activity with human means and goods’. Per Interedil, the fact that that definition links the pursuit of an economic activity to the presence of human resources shows that a minimum level of organisation and a degree of stability are required. It follows that, conversely, the presence alone of goods in isolation or bank accounts does not, in principle, satisfy the requirements for classification as an ‘establishment’. On the other hand, the definition does not refer to the place of the registered office of a debtor company or to the legal status of the place in which the operations in question are carried out.The Member State where the company has its registered office clearly is not excluded from the definition: otherwise local interests would be denied the opportunity of seeking protection, which would exist in other Member States where an establishment is present.
As for the second issue, the Regulation draws a clear distinction between territorial proceedings opened prior to the opening of main proceedings, and secondary proceedings. It is only in relation to territorial proceedings that the right to request the opening of proceedings is limited by the Regulation to creditors who have their domicile, habitual residence or registered office within the Member State in which the relevant establishment is situated, or whose claims arise from the operation of that establishment (at 48, with reference to Zaza Retail). Any other conclusion would amount to indirect discrimination on the grounds of nationality, since non-residents are in the majority of cases foreigners (at 49).
Finally, with respect to issue 3, the Regulation grants broad discretion, with regard to the opening of secondary proceedings, to the court before which an action seeking the opening of secondary proceedings has been bought. Article 28 of the Regulation determines in principle as the law applicable to secondary proceedings, that of the Member State within the territory of which those secondary proceedings are opened. Whether opening of the proceeding is ‘appropriate’ has to be determined by that applicable law. EU law does have an impact on that assessment, though (at 64 ff): in deciding appropriateness, Member States must not discriminate on the basis of place of residence or registered office; the Regulation’s motifs for allowing secondary proceedings must be respected (in the main: protection of local interests, given that universal proceedings may be preferred however do often lead to practical difficulties); and finally the principle of sincere co-operation implies that the court assessing the secondary proceedings, must have regard to the objectives of the main proceedings.
All in all therefore very much a common sense judgment, with the final instruction to the courts being quite relevant: secondary proceedings must not operate as isolated incidents and they have to take some lead from the main proceedings.
Pike & Doyle (Mumbai terror) at the High Court: forum non conveniens and the need for distinguishing Rome II and Brussels I
In Pike & Doyle v the Indian Hotels Company Limited, the High Court withheld its jurisdiction in the case of two (surviving but injured) victims of the Mumbai terror attacks. The UK Human Rights Blog has a posting on the forum non conveniens side of the case. I would like to point to some interesting observations in the judgment on the impact of the interpretation of the special jurisdictional rule for tort under the Jurisdiction Regulation (Brussels I).
The First Claimant suffers continuing pain and loss of amenity and substantial economic losses caused by his injuries. The Second Claimant sustained loss of earnings in England and Wales and has a continuing loss in the form of counselling. On that basis both Claimants have therefore suffered indirect or secondary damage as a result of the Defendants’ alleged negligence in Mumbai. The Claimants’ submission is that this is sufficient to found jurisdiction. The Defendants challenge this.
In support of their claim, defendant relied essentially on the impact which EU law suo arguendo has on the interpretation of the relevant English rules of procedure: as summarised by Stewart J (at 12):
The Defendants’ submission is as follows:
(i) Before 1 January 1987 RSC order 11 rule 1(1)(h) required a plaintiff to establish that the action was “founded on a Tort committed within the jurisdiction”. The test was “where in substance did the cause of action arise?” (Distillers Co Ltd v Thompson [reference omitted]).
(ii) On 1 January 1987 the rule changed such that the new RSC order 11 rule 1(1)(f) became “the claim is founded on a Tort and the damage was sustained, or resulted from an act committed, within the jurisdiction.” The change was made to give effect to Article 5(3) of the Brussels Convention and the decision of the European Court in Handelskwekerij G.J. Bier B.V. v Mines Potasse d’Alsace S.A. [reference omitted]
[references to further precedent omitted]
(iii) The European Rules do not allow indirect secondary damage to found jurisdiction.
Dumez France v Hessische Landesbank [reference omitted]). Marinari v Lloyds Bank plc [reference omitted]). [references to further precedent omitted]
(iv) This is all accepted and is in line with the original Bier case where the European Court held that where an act occurred in one Member State and the damage occurred in another, the Claimant could sue the Defendant in the Courts of either state. (…)
(v) Given the above, the Court should apply normal principles of interpretation to the rule namely: delegated legislation is construed in the same way as an Act, the starting point is to ascertain the legislative intention and the person seeking to understand that intention must do so in the light of the enactment and its purpose. The interpretation must be an informed one [references omitted]
(vi) Therefore since the pre 1987 law would not have allowed indirect secondary damage to found jurisdiction and since the purpose of the change was to align the RSC (subsequently CPR) with the European rules which do not allow such a founding of jurisdiction, the rules should be interpreted consistently with the European cases.
Stewart J disagreed and precedent did before him. Absent the European context – for defendant is not domiciled in the EU and the Brussels I-Regulation does not otherwise apply, there is no reason to assume that the relevant English rules cannot be applied taking into account indirect damage as a jurisdictional basis for the English courts: Tugendhat J had already held so with reference to the preparatory works of the relevant change to the Rules of Procedure. He effectively found that Parliament did not fully assimilate the rules relating to non party states with those relating to states which are a party; it effectively wanted their to be a wedge between the application of the jurisdictional rule for tort in and outside the Brussels-I context.
Neither, Stewart J held, can Rome II come to the defendants’ rescue. This was an attempt by defendants to recycle the limitation to Article 5(3) of the Brussels I Regulation. No reference to this was made in the judgment however a prima facie forceful recital in the Rome II Regulation is recital 7: The substantive scope and the provisions of this Regulation should be consistent with Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I) and the instruments dealing with the law applicable to contractual obligations.
Since Rome II harmonises applicable law for tort even if the national court withholds jurisdiction on the basis of its residuary jurisdictional rules (such as here, given that Brussels I does not apply), this bridge between the various Regulations might resurrect the relevance of the Dumez France and Marinari limitations to the judgment in Bier.
Stewart J however was not swayed and referred to Sir Robert Nelson in Stilyanou:
- Brussels 1 relates to a different subject matter, namely jurisdiction, and has to be construed as a separate regulation, albeit consistently with the other regulations forming part of the compatible set of measures.
- Rome II does not abolish the discretion which has to be exercised under the CPR in relation to non Member States.
- Article 2 on its face is wide enough to include any damage direct or indirect which the regulation as a whole covers. Article 4(1) expressly excludes indirect damage which would otherwise be included by virtue of Article 2. There is no reason why “damage” under the CPR should be interpreted as in a specific Article such as Article 4 which defines the applicable law, rather than interpreted as a general article such as Article 2 which applies to the regulation as a whole (apart from Article 4).
- Inconsistencies in the meaning of damage may exist as the tests are different under Brussels 1, Rome II and CPR. The latter includes the exercise of the discretion and hence consideration of forum conveniens to ensure the proper place for the trial is selected, whereas Brussels 1 and Rome II do not.
- Rome II does not concern jurisdiction and does not override CPR 9(a). Where Brussels I does not apply, the issue of jurisdiction will be governed by a country’s own rules ie. in England and Wales the CPR
Neither Stewart J nor Sir Robert refer to recital 7 Rome II however their arguments in my view are supported post their findings by the ECJ judgment in Kainz.
A very interesting case for many aspects of conflicts law.