Posts Tagged Brexit
A short update on the innovation principle‘s continued (corporate-sponsored, let’s be frank) journey.
Thank you first of all prof Maria Lee for signalling the UK’s planned introduction of an ‘innovation test’, to be piloted as part of industrial strategy. Its goal is expressed as ‘We will create an outcome-focused, flexible regulatory system that enables innovation to thrive while protecting citizens and the environment.’ Not much more detail is given. Formulated as such, it does nothing that the current EU regulatory model does not already address – its true goal undoubtedly is a post-Brexit libertarian regulatory environment.
Further, Nina Holland observed with eagle eyes the link between Nafta 2.0 (USMCA) and innovation, in particular Article 12-A-4 ‘parties’ “recognize the importance of developing and implementing measures in a manner that achieves their respective level of protection without creating unnecessary economic barriers or impediments to technological innovation’ (like the UK initiative: meaningless for already addressed by current international trade agreements; the real intention actually is deregulation). American industry has been arguing that the US should ‘build on’ the new NAFTA when negotiating with the EU (should TTIP ever be resuscitated).
Canary Wharf Limited v European Medicines Agency. High Court holds Brexit is a seismic, but not a frustrating event. (Engages Rome I’s Article 12, and vires issues per lex loci corporationis).
Update 5 July 2019 EMA have dropped their appeal following settlement.
In  EWHC 335 (Ch) Canary Wharf Limited v European Medicines Agency Smith J earlier this week held that Brexit is a seismic, but not a frustrating event under English contract law (at 241). The Agency’s lease would not be discharged by frustration upon Brexit and neither does EMA’s move to Amsterdam constitute a frustrating event. The EMA is to honour its lease obligations.
At 186 brief mention is made of the usefulness of Article 12 Rome I (which lists the isused covered by the lex contractus): ‘Article 12 of the Rome I Regulation provides that the law applicable to a contract by virtue of the Regulation governs – among other things – the “performance” of the contract and “the various ways of extinguishing obligations”. Both are subject therefore to English law (a choice of law clause in the contract, and the premises being in England) whichever way one classifies the theory of frustration.
At 187 the discussion is however extended to the issue of supervening illegality under a foreign law that is not the applicable law. The capacity of a corporation to exercise specific rights is determined – at least in the first instance – by the constitution of the corporation, which is itself governed by the law of the place of incorporation: lex loci corporationis. This itself is discussed at 130 ff, leading to interesting views on the status of EU law in the UK post Brexit and, one infers, a finding that ‘EU law’ is the lex loci corporationis. EMA’s argument then is that under EU law it would be acting ultra vires to continue the lease outside the EU’s territory.
At 188: ‘The question, then, is whether – assuming that the EMA is right as regards the points it makes on vires – these are relevant for the purpose of frustration by way of supervening illegality. The question is whether the English law of frustration, which has regard to questions of legality where the performance of the contract would be unlawful according to the law of the place of performance, should also have regard to the law of incorporation, at least where this affects the capacity of a party to continue to perform obligations under a transaction lawfully entered into by it.’ Smith J after discussing precedent, at 189 holds that it cannot.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 3.
In one of my many ponderings on research I would like to do but might never get an opportunity do (hence my repeated sharing of potential PhD topics) I came across an excellent post by Daniel Jowell QC on the application of EU competition law in the UK courts post-Brexit.
The usual disclaimer of course applies (let’s wait and see what happens in the future Treaty between the UK and the EU) yet one important consideration has wider appeal: how does one apply the classic conflicts suggestion that courts do not apply foreign public law, or if they do, do so with great caution?: both out of comity with the foreign State; and to protect one’s own ordre public.
Competition law is often seen as being of quasi-public nature. Daniel justifiably suggests that post Rome II (in which competition law is assigned a specific (if complicated) lex causae), the UK will revert to its standard rules which increase the possibility that UK courts might refuse to apply foreign competition law, including the EU’s, on public policy grounds.
One to remember.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 4, Heading 4.6.2.
A concise note (I am currently tied up mostly in writing research grants. And and and… I hope to return to the blog in earnest later in the week) to signal prof Hess’ excellent short paper on Brexit and judicial co-operation. Prof Hess focuses on the possibility to use the Lugano Convention. (See here for a draft of Michiel Poesen’s overview). I agree that Lugano would not be a good route if one’s intention is to safeguard as much as possible co-ordination between the UK’s common law approach to private international law, and the EU’s. Neither evidently if one aims to facilitate smooth cross-border proceedings.
Prof Hess has an interesting side consideration on schemes of arrangements. (Including reference to Apcoa). Again I agree that the English courts’ approach to same is not entirely without question marks (particularly jurisdictional issues in the event of opposing creditors: see here). I do not though believe that they would justify hesitation at the recognition and enforcement stage in continental Europe – even after Brexit. At least: not in all Member States. For of course post Brexit, UK judgments become those of a ‘third country’, for which, subject to progress at The Hague, we have no unified approach.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.
Update 11 December 2018 there could have been many more updates I could have inserted in between – see e.g.
- the conflicts provisions in the draft Withdrawal Agreement
- Articles 66 to 69. Specifically, for civil and commercial matters:
- Legal proceedings “instituted before the end of the transition period” will continue to be subject to Brussels I Recast on jurisdiction in civil and commercial matters.
- Its recognition and enforcement proceedings will continue to apply to “judgments given in legal proceedings instituted before the end of the transition period”.
- Provided that the relevant EEO Certificate was applied for before the end of the transition period, the European Enforcement Order Regulation (uncontested claims) will also continue to apply
- Rome I Regulation shall apply in the UK in respect of contracts concluded before the end of the transition period (31 December 2020)
- Rome II Regulation shall apply in the UK in respect of events giving rise to damage, where such events occurred before the end of the transition period.
- (Both Regulations continued to be applied by the other MSs post the transition period, given principle of universal application)
- today the UK provisions for Rome I, II, and the Rome Convention post Brexit, as well as Diana Wallis MEP (rtd) on some of the implications for the victims of car accidents.
Update 21 April 2017 many thanks to Gordon Nardell QC for alerting me to the Bar Council’s Brexit papers which includes one on jurisdiction and enforcement.
The House of Commons’ report on ‘negotiating priorities for the justice system’ reviews more than conflict of laws, indeed it is a tour d’horizon of most (if not all) issues relevant to Justice and Home Affairs in the EU. Martha Requejo makes a number of valid points on the report and indeed plenty of these, and others, have been made by a number of conflicts commentators: I will not review all here. There is a scholarly cottage industry on post-Brexit issues and the area of private international law is no exception.
The report mentions among others that a role for the CJEU in respect of essentially procedural legislation concerning jurisdiction, applicable law, and the recognition and enforcement of judgments, is a price worth paying to maintain the effective cross-border tools of justice discussed throughout our earlier recommendations. That is a very sensible approach, not just within the overall context of UK /continent judicial co-operation: it is also an obvious lifeline for London’s legal services market. Without proper integration into the EU’s civil procedure corpus, judgments from UK courts will immediately lose a lot of their appeal. The Government however have manoeuvred itself into a cul-de-sac by rejecting a role for the European Court of Justice post Brexit. The report’s call, and many with it, therefore is likely to fall upon deaf ears. Both for the UK and for EU conflicts rules, this will be a great loss. Few continental courts live up to the same standards as their UK counterparts when it comes to applying the intricate detail of conflict of laws, whether EU based or not.
For the facts of the case, and the reasoning of the AG in C-559/14 Meroni, I refer to my earlier posting. At the end of May (I am indeed still hoovering up the queue) the Court held very much alongside Kokott AG’s Opinion, I shall therefore not repeat its reasoning here. The CJEU does insist that if third parties rights are directly affected with the intensity as in the case at issue, that third person must be entitled to assert his rights before the court of origin (which English courts provide for), lest one runs the risk of the injunction being refused recognition under ordre public. As I had feared, the Court does not address the AG’s concern whether Mareva orders actually constitute a ‘judgment’ for the purposes of the Regulation.
Post Brexit, this considerable attraction of English courts in interlocutory proceedings might become a lot less real. (Like many of us, I am working on a short review of Brexit consequences for European private international law).
(Handbook of) European private international law, second ed. 2016, Chapter 2, 220.127.116.11.1, 18.104.22.168.4