The Antwerp court of first instance in CMB (Bocimar NV), ‘The Mineral Water’: In dubio pro reo or a perfect excuse for forum shopping?

The Antwerp court of first instance (criminal section) has held last Friday, 25 June (I have copy of the judgment (in Dutch) on file) in the prosecution against CMB (an Antwerp based shipowner; specifically: Bocimar NV) and a number of individuals for the alleged illegal transport of waste, in the shape of the discarded ship the Mineral Water, destined for beaching at Chittagong, Bangladesh (the same location of relevance in Begum v Maran).

The Mineral Water was built in 1999, bought by CMB in 2007. A decision was made ‘end 2015’ (the judgment does not clarify specific date and /or circumstance of that decision) to sell  her, with a view to recycling. That sale was approved on 19 January 2016 by Bocimar Board Decision, to a cash buyer based on the British Virgin Islands, when the ship was anchored at Fangcheng, China. Actual transfer of the ship happened at Malaysia a few weeks later. The ship’s registry was changed from Antwerp to Niue after the transfer and she was beached at Chittagong in February.

The case is a criminal prosecution which of course carries with it a high burden of proof. Seeing as the ship sailed under Belgian flag, the principled application of Belgian and EU law was not as such disputed. Neither do the original owners dispute that at the time of the January 2016 decision, the ship met with the definition of waste ia per CJEU Shell. However defendants argue the EU Waste Shipments Regulation – WSR does not apply for, they argue, the Mineral Water never sailed in European waters and was not physically exported from the EU with a view to recycling (p.5 in fine).

[The court later (p.8) notes this is not quite correct: occasionally EU ports were used for (un)loading and in 2015 there was rare bunkering at Malta].

The court held for the defence. Core to the decision is Article 2, 30 31 and 32: the definitions of ‘import’, ‘export’, ‘transfer’. The prosecutor seeks support in Article 2.22: ”country of dispatch’ means any country from which a shipment of waste is planned to be initiated or is initiated’. The court however held that neither the place of decision nor the flag State is of relevance to the territorial scope of application of the WSR. (Note the contrast on that point with the Ships Recycling Regulation – SRG 1257/2013, not applicable to the facts at issue).

One imagines more on that issue can and should be said upon appeal.

The countries of dispatch, transfer and destination of the ship are all ex-EU. Importantly, at p.8 the court notes there is no indication that the owners would have gamed the system to ensure the ship lay outside EU territorial waters at the time of the decision to discard.

The case shows the importance of the flag State in the SRG (itself not free of difficulties; the IMO Hong Kong Convention should avoid gaming). Of note is also that the place of decision-making (relevant for conflict of laws: locus delicti commissi, eg under A7 Rome II as discussed in Begum v Maran) did not play a  role. The crucial element was the almost complete lack of physical contact between the ship and the EU.

One assumes the prosecution will appeal.

Geert.

Handbook of EU Waste law, 2015, Chapter 3.

Applicable law and statutes of limitation in CSR /business and human rights cases. The High Court, at least prima facie, on shipbreaking in Bangladesh in Begum v Maran.

Update 28 August 2020 permission to appeal and cross-appeal has been granted and is being additionally sought by both parties on various issues.

Hamida Begum v Maran UK [2020] EWHC 1846 (QB) engages exactly the kinds of issues that I have just posted about, in court rather than in concept. On 30th March 2018 Mr Mohammed Khalil Mollah fell to his death whilst working on the demolition of a defunct oil tanker in the Zuma Enterprise Shipyar in Chittagong (now Chattogram), Bangladesh. On 11th April 2019 the deceased’s widow issued proceedings claiming damages for negligence under the UK Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976; alternatively, under Bangladeshi law. The scope of the proceedings has subsequently been broadened inasmuch as draft Amended Particulars of Claim advance a cause of action in restitution: more precisely, unjust enrichment.

Application in the current case is for strike-out and /or summary judgment (denying liability) hence the legal issues are dealt with at prima facie instead of full throttle level. One or two of the decisions deserve full assessment at trial. Trial will indeed follow for the application was dismissed.

The case engages with the exact issues in exchanges I had at the w-e.

Proceedings have not been brought against the owner of the yard and/or the deceased’s employer. Both are Bangladeshi entities. Maran (UK) Ltd,  defendant, is a company registered in the UK and, it is alleged, was both factually and legally responsible for the vessel ending up in Bangladesh where working conditions were known to be highly dangerous.

Focus of the oral argument has been whether claim discloses viable claims in English law on the basis of tort of negligence (answer: yes) and in unjust enrichment (answer: no).

The issue of liability in tort is discussed on the basis of English law, which is odd at first sight given Rome II might suggest as a starting point Bangladeshi law as the lex causae ; Justice Jay himself says so much, but only at 76 ff when he discusses Rome II viz the issue of limitation. In applications for summary judgment however, reasoning and order of argument may take odd form as a result of the prima facie nature of the proceedings and the conversations between bench and parties at case management stage.

On the tort of neglicence claimant argues under English law, with direct relevance to the current debate on environmental and human rights due diligence, that a duty of care required the defendant to take all reasonable steps to ensure that its negotiated and agreed end of life sale and the consequent disposal of the Vessel for demolition would not and did not endanger human health, damage the environment and/or breach international regulations for the protection of human health and the environment. The EU Ship Recycling Regulation 1257/2013 was suggested as playing a role, which is dismissed by Justice Jay at 24 for the Regulation was not applicable ratione temporis.

At 30, claimant’s case on negligence is summarised:

First, the vessel had reached the end of its operating life and a decision was taken (perforce) to dispose of it. Secondly, end-of-life vessels are difficult to dispose of safely. Aside from the evident difficulties inherent in dismantling a large metal structure, a process replete with potential danger, an oil tanker such as this contains numerous hazardous substances such as asbestos, mercury and radio-active components. Although these were listed for Basel Convention purposes and for the attention of the buyer, and the deceased was not injured as a result of exposure to any hazardous substance, the only reasonable inference is that waste such as asbestos is not disposed of safely in Chattogram. Thirdly, the defendant had a choice as to whether to entrust the vessel to a buyer who would convey it to a yard which was either safe or unsafe. Fourthly, the defendant had control and full autonomy over the sale. Fifthly, the defendant knew in all the circumstances that the vessel would end up on Chattogram beach. Sixthly, the defendant knew that the modus operandi at that location entailed scant regard for human life.

The gist of the argument under tort therefore is a classic Donoghue v Stevenson type case of liability arising from a known source of danger.

At 42 ff Justice Jay discusses what to my mind is of great relevance in particular under Article 7 Rome II, should it be engaged, giving claimant a choice between lex locus delicti commissi and lex locus damni for environmental damage, in particular, the issue of ‘control’. One may be aware from my earlier writings (for an overview see my chapter in the 2019 OUP Handbook of Comparative environmental law) that the determination of the lex causae for that issue of control has not been properly discussed by either the CJEU or national courts. This being a prima facie review, the issue is not settled definitively of course however Justice Jay ends by holding that there is no reason to dismiss the case on this issue first hand. This will therefore go to trial.

As noted Rome II is only discussed towards the end, when the issue of limitation surfaces (logically, it would have come first). Claimant does not convince the judge that the case is manifestly more closely connected with England than with Bangladesh under A4(3) Rome II. Then follows the discussion whether this might be ‘environmental damage’ under Article 7 Rome II, which Justice Jay at 83 ff holds preliminarily and prima facie, it is. Analysis of Article 7 is bound to be of great importance at trial and /or appeal.

At 85 a further issue for debate is trial is announced, namely whether the one-year statute of limitation under Bangladeshi law, should be extended under Article 26 Rome II’s allowance for ordre public (compare Roberts and CJEU C-149/18 Martins v DEKRA – that case concerning lois de police and statutes of limitation. 

Plenty of issues to be discussed thoroughly at trial.

Geert.

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

 

 

Jabir and others v. KiK Textilien und Non-Food GmbH. German court kicks supply chain CSR litigation into the long grass. Questions on Statutes of limitation under Rome II left out in the open.

Update 11 April 2019 for Essex Law School /Anil Yilmaz legal opinion on the relevant common law principle at stake, see Opinion prepared for the case here.

Jonas Poell, Julianne Hughes-Jennett, Peter Hood and Lucja Nowak reported and succinctly reviewed Case No. 7 O 95/15 Jabir and Others v Kik early January – the ‘next week’ promise in my Tweet below turned out a little longer.

Survivors of a fire in a Pakistani textile supplying factory are suing Germany-based KIK as the “main retailer” of the merchandise produced in the Pakistani premises. Jurisdiction evidently is easily established on the basis of Article 4 Brussels Ia.

As Burkhard Hess and Martina Mantovani note here, claimants are attempting to have KIK held liable for not having promoted and undertaken, in practice, the implementation of “adequate safety  measures” in the Pakistani factory (producing clothes), thus breaching an engagement  they undertook in a Code of Conduct applicable to its relationship with its contractual  counterpart.

Prof Hess and Ms Mantovani’s paper ‘Current developments in forum access: Comments on jurisdiction and forum non conveniens European Perspectives on Human Rights Litigation’ incidentally is an excellent stock taking on the issues surrounding mass tort (human rights) litigation.

The Dortmund court held that the case is time-barred under Pakistani law which was the lex causae per Rome II, Regulation 864/2007. Now, I have not had access to the full ruling (lest the 3 page ruling linked above is precisely that – which I am assuming it is not), so a little caveat here, however the court’s discussion of limitation periods is startlingly brief. Article 15 Rome II includes ‘the manner in which an obligation may be extinguished and rules of prescription and limitation’ in the scope of application of the lex causae’. Yet as the development inter alia of relevant English statute shows (discussed ia by Andrew Dickinson in his Rome II book with OUP), there are a multitude of issues surrounding statutes of limitation. One of them being Article 1(3) Rome II’s confirmation that evidence and procedure is not within its scope, another Article 26’s ordre public exception which certainly may have a calling here.

I have reported before on the difficult relationship between A1 and A15 in Spring v MOD and in PJSC Tatneft v Bogolyubov.

The court at Dortmund also rejects the argument that parties’ settlement negotiations before the claims were filed amount to choice of (German) law per Article 14(1). That would have triggered the 3 year German limitation period as opposed to the 2 year Pakistani one. Dr Jungkamp, the chamber president, argues that parties did not have any reflection on the Pakistani (or indeed German) limitation period in mind when they corresponded on the ex gratia out of court settlement, hence excluding the intention (animus contrahendi) required to speak of choice of law. I would suggest that is a bit of a succinct analysis to conclude absence of choice of law. Parties need not be aware of all implications of such choice for it to be validly made.

Appeal is possible and, I would suggest, warranted.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.7, Heading 4.8, Chapter 8, Heading 8.3.

 

 

The ‘compact’ – A new phase in international regulatory co-operation or a way around GSP+ accusations?

Update 25 October 2017. The PCIA has accepted to review the complaint brought under a related instrument, the Bangladesh Accord between trade unions and fashion chains.

wIn response to the tragedy at the Rana Plaza factory, the EU, Bangladesh and the International Labour Organisation together launched the ‘Global Sustainability Compact’ early July. The full title of the Initiative is the “Compact for Continuous Improvements in Labour Rights and Factory Safety in the Ready-Made Garment and Knitwear Industry in Bangladesh”. According to the official EU statement upon release of the initiative, key considerations are:

  • Reforming the Bangladesh Labour Law to strengthen workers’ rights, in particular regarding freedom of association and the right to collective bargaining, and to improve occupational health and safety. A new Labour Law should be in place by the end of 2013. The ILO will monitor the effective enforcement of the new legislation.
  • Recruiting 200 additional inspectors by the end of 2013, as part of the efforts to ensure regular visits to factories and assess them in terms of working conditions, including occupational safety and health, and compliance with labour laws.
  • Improving building and fire safety, especially structural safety of buildings and fire safety in ready-made garment factories, by June 2014. The ILO will help to coordinate efforts and mobilise technical resources.

The initiative is said to be ‘non-binding’, whence presumably the countries resorted to the name ‘Compact’ – a new entry I believe in the dictionary of international law (policy?) instruments [there is of course the UN Global Compact, however that does not have State involvement]. The use of co-operation and partnership is said to be the ‘carrot’ as an alternative to the ‘stick’: the latter would be to remove GSP and GSP+ treatment to Bangladeshi import into the EU. GSP and GSP+ require developing countries to sign up to, and implement, a number of international conventions in a variety of areas, so as to enjoy preferential access to the EU (the US and other countries employ similar instruments).  Its use is not uncontroversial.

I would have thought that withdrawal of GSP treatment by the EU would have been a little bit crass, given the role of companies (and consumers) here in seeking cheap garments, the price of which, frankly, just cannot be right.

As often, follow-up of this new partnership will be of the essence.

Geert.