Tag: Brussels I

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The Supreme Court considers ‘sharp practice’ vs torpedoes in The Alexandros

In the case of the Alexandros T, the UK Supreme Court had to consider the impact on UK proceedings, opened in response to proceedings in Greece, in a dispute in which the insurers of the ship were under the impression that things had been settled following earlier proceedings in England.

On 3 May 2006 the vessel Alexandros T sank and became a total loss 300 miles south of Port Elizabeth, with considerable loss of life. Her owners were Starlight Shipping Company (“Starlight”). They made a claim against their insurers, who denied liability on the basis that the vessel was unseaworthy with the privity of the assured, namely Starlight. The insurers also said that Starlight had failed properly to report and repair damage to the vessel. Suits and countersuits followed, in England, on the basis of an exclusive jurisdictional clause in the insurance agreements. On 13 December 2007, the 2006 proceedings had been settled between Starlight and the LMI (as well as various underwriters) for 100% of the claim, but without interest and costs, in full and final satisfaction of the claim.

In April 2011, nine sets of Greek proceedings, in materially identical form, were issued by Starlight and by a range of other interested parties, against the LMI and the underwriters. The claims are for compensation for loss of hire and loss of opportunity by Starlight and for pecuniary compensation due to moral damage. All the claims rely upon breaches of the Greek Civil and Criminal Code, not, as before, on the contractual arrangements. Since the issue of the Greek proceedings, the insurers have taken further steps and brought further proceedings in England. The insurers sought to enforce the settlement agreements. Starlight at al subsequently  sought a stay of the English proceedings under Article 27 or 28 of the Brussels I Regulation. The High Court refused. The Court of Appeal granted. The Supreme Court had to untie the knot.

The Brussels I Regulation (the Jurisdiction Regulation or ‘JR’) is quite strict on lis alibi pendens, as has been repeatedly emphasised on this blog. The ECJ, too, insists on a guillotine approach of lis alibi pendens, provided of course the conditions for its application are met. The lis alibi pendens rule of Article 27 JR obliges a Court to stay proceedings if another Member State court has already been seized in the same matter, and to trust the proper application by the latter of the jurisdictional grounds of the Regulation. Article 27 JR has given malevolent parties a means to obstruct proceedings, by seizing a court in a Member State with no or desperate grounds for jurisdiction, banking on the tardiness of its judicial proceedings to gain time and ‘torpedo’ the case of the bona fide party.

Article 27

1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seized is established.

2. Where the jurisdiction of the court first seized is established, any court other than the court first seized shall decline jurisdiction in favour of that court.

Article 28

1. Where related actions are pending in the courts of different Member States, any court other than the court first seized may stay its proceedings.

2. Where these actions are pending at first instance, any court other than the court first seized may also, on the application of one of the parties, decline jurisdiction if the court first seized has jurisdiction over the actions in question and its law permits the consolidation thereof.

3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.

The rule is (fairly) simple and clear: where the same action, between the same parties is brought before the courts of two Member States, Article 27 obliges the court seized second, to at least freeze its jurisdiction. The conditions for Article 27 to apply are that the case involves the same action, between the same parties. The ECJ has clarified in Gubish Machinenfabrik and in The Tatry what was already clearer in other language versions namely that Article 27 requires three identities: identify of parties; identify of object or ‘subject-matter’; and identity of cause. The English version and the German version mention ‘same parties’ and ‘same cause of action’ only: they do not expressly distinguish between the concepts of “object” and “cause” of action. The ECJ held in Gubish that ‘(T)he “cause of action” comprises the facts and the rule of law relied on as the basis of the action.’ , and added in Gantner Electronic that  in this respect account should be taken only of the claims of the respective applicants, to the exclusion of the defence submissions raised by a defendant.

Article 28, then, applies to actions which do not conform to the Article 27 conditions, e.g. for actions between different parties, however where the actions are so related that separate proceedings would risk irreconcilable judgments. The purpose of that provision is to avoid the risk of conflicting judgments and thus to facilitate the proper administration of justice in the Union – it gives much more flexibility to the courts of the Member States as to whether to apply the provision or not.

In the case of the Alexandros, the application of these two Articles led to extensive to and fro by counsel with Lord Clarke (at 51 ff) stating that the principles of Article 27 JR ‘require a comparison of the claims made in each jurisdiction and, in particular, consideration of whether the different claims have le même objet et la même cause without regard to the defences being advanced (…)  As I see it, Article 27 involves a comparison between the causes of action in the different sets of proceedings, not (as in Article 28) the proceedings themselves. (…) the analysis cannot involve a broad comparison between what each party ultimately hopes to achieve. The analysis simply involves a comparison between the claims in order to see whether they have the same cause and the same object.‘ He then suggested that Article 27 has no impact on the proceedings at issue – the English proceedings should not be stayed and in Lord Clarke’s view the matter is acte claire: no reference to the ECJ needed.

Lord Mance disagreed with this approach, essentially suggesting that both actions seek a declaration of non-liability and are therefore at least for some of them, the same action within the meaning of Article 27. Lest parties drop those claims (they have been given two weeks to do so), this question will be referred to the ECJ.

As for the application of Article 28, Lord Clarke suggest that the English Court should not exercise the possibility of a stay, inter alia in light of the exclusive choice of court clause previously agreed between the parties: ‘ I can see no reason why, in exercising that discretion under Article 28, the court second seised should not take into account the fact that the parties had previously agreed (or arguably agreed) an exclusive jurisdiction clause in favour of that court. On the contrary, depending upon the circumstances of the particular case, that seems to me to be likely to be a powerful factor in support of refusal of a stay.’ (at 95) On this, Lord Mance did not disagree, neither did he suggest referral to the ECJ.

The interpretation of Article 27 is therefore quite likely to end up at the ECJ: it is difficult to conceive that parties will drop those claims rather than retain the possibility of the ECJ siding with them.

The judgment to my knowledge is the first to examine Articles 27 and 28 JR at quite such length and with quite such expert counsel.

Geert.

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Do single internet transactions lead to multiple jurisdictions for consumer contracts? The ECJ in Maletic

In Case C-478/12 Maletic, plaintiffs (the Maletics) are domiciled in Bludesch (Austria), which lies within the jurisdiction of the Bezirksgericht Bludenz (District Court, Bludenz, Austria). They had booked and paid for themselves, as private individuals, a package holiday to Egypt on the website of lastminute.com. On its website, lastminute.com, a company whose registered office is in Munich (Germany), stated that it acted as the travel agent and that the trip would be operated by TUI, which has its registered office in Vienna (Austria). The booking was made for a particular hotel, the name of which was correctly communicated to TUI by lastminute.com, however the former had mismanaged the booking. Upon their arrival in Egypt, the Maletics discovered the mix-up, stayed at the hotel which they had intended, and subsequently sued for the recovery of the extra costs. They brought an action before the Bezirksgericht Bludenz seeking payment from lastminute.com and TUI, jointly and severally.

The Bezirksgericht Bludenz dismissed the action in as far as it was brought against TUI on the ground that it lacked local jurisdiction. According to that court, Regulation 44/2001 was not applicable to the dispute between the applicants in the main proceedings and TUI as the situation was purely domestic. It held that, in accordance with the applicable provisions of national law, the court with jurisdiction was the court of the defendant’s domicile, that is, the court having jurisdiction in Vienna and not that in Bludenz. As regards lastminute.com, the court held that it had jurisdiction to hear the substantive proceedings on the basis of Article 15 of the Jurisdiction Regulation.

The booking transaction therefore was a single transaction, even if it led to two separate contracts. Assessed separately, one of those clearly leads to application of the Brussels I-Regulation. The other one does not for it is purely domestic. Does the latter become ‘international’ by association?

The ECJ held that it did, for two reasons. Firstly, it referred to its judgment in Owusu in which it held (under the Brussels Convention but with no less relevance for the Brussels I Regulation) that the mere domicile within an EU Member State of just one of the parties involved, is enough to trigger the application of the Regulation. In Owusu, that finding was not affected by the remainder of the parties and fact being external to the EU. The ‘international’ element required to trigger the application of the Jurisdiction Regulation can therefore be quite flimsy indeed. The Court does not refer to Lindner (Case C-327/10) however that case in my view is an even stronger indication of the relaxed attitude of the Court vis-a-vis the international element required. In Maletic, the Court held that the second contractual relationship cannot be classified as ‘purely’ domestic since it was inseparably linked to the first contractual relationship which was made through the travel agency situated in another Member State.

Further, the Court referred to the aim of the consumer title of the Regulation, in particular recitals 13 and 15 in the preamble to Regulation No 44/2001 concerning the protection of the consumer as ‘the weaker party’ to the contract and the aim to ‘minimise the possibility of concurrent proceedings … to ensure that irreconcilable judgments will not be given in two Member States’. Those objectives, the Court held, ‘preclude a solution which allows the Maletics to pursue parallel proceedings in Bludenz and Vienna, by way of connected actions against two operators involved in the booking and the arrangements for the package holiday at issue in the main proceedings.’

I suppose what the Court meant but did not say is that the alternative would not so much ‘allow’ the Maletics to pursue the case in two different courts but rather would oblige them do so. Moreover of course in the case at issue, the parallel proceedings would not concern two different Member States but rather two different courts in one Member State. National joinder and lis alibi pendens rules presumably would go a long way to avoid irreconcilable judgments – not enough, so it would seem, to satisfy the ECJ.

The case was heard without Opinion by the Advocate General. I think it may have warranted such: for the outcome I would suggest is not necessarily straightforward.

Geert.

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Prove it if you can? E-commerce and jurisdiction: the ECJ further completes the jigsaw in Emrek

As tweeted last week, the Court of Justice has clarified the scope of the consumer title of the Brussels-I Regulation in Case C-218/12 Emrek. In Spicheren, a town close to the German border, Mr Sabranovic sells second-hand motor vehicles. He had an internet site on which French telephone numbers and a German mobile telephone number were mentioned, together with the respective international codes. Mr Emrek, who resides in Saarbrücken (Germany) and who learned through acquaintances (not via the internet) of Mr Sabronovic’s business went there and purchased a second-hand motor vehicle.

Subsequently, Mr Emrek made claims against Mr Sabronovic under the warranty before the Amtsgericht (District Court) Saarbrücken. Mr Emrek took the view that, under Regulation No 44/2001, that court had jurisdiction to hear such an action. It was clear from the set-up of Mr Sabranovic’s website that his commercial activity was also directed to Germany. However, it was also clear that the contract that had been concluded was not the result of that direction: Mr Emrek had heard from the business by word of mouth, not the internet.  Must there be a causal link between the means employed to direct the commercial activity to the Member State of the consumer’s domicile, namely the internet site, and the conclusion of the contract with the consumer?

The Court held that requiring such causal link would raise questions of burden of proof. Difficulties related to proof of the existence of a causal link would tend to dissuade consumers from bringing actions before the courts of their domicile and would therefore weaken the protection of consumers pursued by the regulation. However if and when that causal link is in fact established, it would constitute strong evidence which may be taken into consideration by the national court to determine whether the activity of the professional trader is ‘directed at’ the Member State of the consumer’s domicile.

The Court’s judgment could have certainly swayed differently. There are – among other textual – reasons for arguing pro requiring a causal link between the activities directed at the consumer’s place of domicile, and the eventual contract. The ECJ pushes out the consumer protection boat yet a little further.

I can’t quite think of a pun to end this posting. I’ll just end it. Geert.

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Choice of court and choice of law on the web – Due diligence required. Brussels Court of Appeal in A v P.

The Brussels Court of Appeal held in A v P on 25 March 2013, on a choice of court agreement included on the internet. Its judgment should be a reminder of the need to take care of the design and formulation of choice of court clauses in standard terms and conditions via the internet. The judgment can be consulted via this issue of  Tijdschrift@IPR.be (p.37 ff).

The CA first of all correctly holds that the alleged non-existence of a contract does not affect its duty to review whether the choice of court agreement which is part of the contract, might be valid.

Company P has its registered seat in Poland. Company A in Belgium. P had sent A a quote for delivery of a substantial amount of solar panels. The judgment does not specify how the offer was sent however it was subsequently countersigned by A. Subsequent e-mails specified that the panels had to be delivered in Poland. The quote contained a reference to a weblink which contained P’s standard terms and conditions. No further written or verbal reference had been made by the parties to a choice of court agreement. P’s standard terms and conditions contained choice of court in favour of the courts at Brussels.

The Court of Appeal referred to Colzani in which the ECJ held that ‘IN THE CASE OF A CLAUSE CONFERRING JURISDICTION , WHICH IS INCLUDED AMONG THE GENERAL CONDITIONS OF SALE OF ONE OF THE PARTIES , PRINTED ON THE BACK OF THE CONTRACT , THE REQUIREMENT OF A WRITING UNDER THE FIRST PARAGRAPH OF ARTICLE 17 OF THE CONVENTION OF 27 SEPTEMBER 1968 IS ONLY FULFILLED IF THE CONTRACT SIGNED BY THE TWO PARTIES INCLUDES AN EXPRESS REFERENCE TO THOSE GENERAL CONDITIONS .‘ [apologies for the capital letters: this is how ECJ judgments used to be reported].

The Court of Appeal noted that the standard terms and conditions were not included in the quote: rather, only a reference to a website was made.  The Court does entertain (but rejects) the possibility of the link being a ‘communication by electronic means’ within the meaning of article 23(2) of the jurisdiction Regulation.

I disagree with the guillotine application of Colzani’s reference to the inclusion of choice of court in the signed document. Surely Colzani can be applied mutatis mutandis to exclusively electronically available STCs. What’s more relevant in my view is the Convention’s (and now the Regulation’s) emphasis simply on making sure that parties have actually agreed to the clause: see Colzani at para 7: ‘BY MAKING SUCH VALIDITY SUBJECT TO THE EXISTENCE OF AN ‘ AGREEMENT ‘ BETWEEN THE PARTIES , ARTICLE 17 IMPOSES ON THE COURT BEFORE WHICH THE MATTER IS BROUGHT THE DUTY OF EXAMINING , FIRST , WHETHER THE CLAUSE CONFERRING JURISDICTION UPON IT WAS IN FACT THE SUBJECT OF A CONSENSUS BETWEEN THE PARTIES , WHICH MUST BE CLEARLY AND PRECISELY DEMONSTRATED .‘

A simple reference to standard terms and conditions in the paper contract signed by the parties, offers no more or less certainty that the party who agrees to the other’s conditions, has actually even read them (indeed as we all know, many never read the small print until it comes to litigation or complaint). What matters more, is that it can be reasonably assumed that they had at least the opportunity to do so.  That is no less the case in the event of STCs included on the web.

However, in such case, the party whose STCs are included on the web, needs to ensure that the other party can be reasonably assumed to have consulted them, in the version applicable to the contract at issue. In my view this requires the STCs to be properly displayed on the website, and, in the event of changes in versions, for them to be numbered accordingly (and for that number or date to have been referred to in the undersigned quote, or contract, or electronic order). On this, I do agree with the Court of Appeal: the Court pointed out that the weblinked STCs had not been recorded in durable fashion (see Article 23 of the Jurisdiction Regulation).

Geert.

 

 

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Of Vikings, airlines and trade unions – The High Court in British Airways leaves a treasure trove of questions on ‘civil and commercial’

In  British Airways v Sindicato Espanol de Pilotos de Lineas Aereas – SEPLA, crucial consideration was whether the court had jurisdiction under the Brussels I Regulation to determine the claim brought by BA against SEPLA, a Spanish trade union, for damages and declaratory and injunctive relief alleging that strikes of Spanish airline pilots organised by SEPLA were unlawful under Spanish law in that they were in breach of the Claimants’ right to freedom of establishment and to provide cross border services under Articles 49 and 56 TFEU. The international federation of airline pilots association acted as anchor defendant (being domiciled in the UK at the time the action was introduced (it had since moved to Canada) and the case against both arguably being closely linked within the meaning of Article 6 of the Jurisdiction Regulation).

The High Court accepted the ‘knock-out point’ of defendant: that the matter was not ‘civil and commercial’ and therefore not within the scope of application of the Regulation. Field J argued with reference to the ECJ’s judgment in Viking (or more specifically, the AG’s Opinion in same) that ‘it remains the case that the source of the fundamental freedoms are treaty provisions imposing obligations on states‘, and that ‘a court having to decide whether SEPLA was in breach of Articles 49 and/or 56 TFEU will have to conduct a sensitive balancing exercise in which it weighs SEPLA’s constitutional right to strike and the fundamental right to strike which forms part of the general principles of Community Law against the fundamental freedoms enshrined in Articles 49 and 56. In my judgment, such an exercise will involve a resort to notions of public law rather than to private law.‘

I am not so sure. Firstly, the horizontal (i.e. between individuals) direct effect of the Treaty Articles concerned is quite established. Moreover, under the Eurocontrol and subsequent case-law formula, the public authority (here: merely a private organisation, a trade union, perhaps carrying out duties of a quasi-public law nature (the right to strike)) involved needs to have acted iure imperii. It is only if the legal relationship (not: the underlying applicable law) between the parties to the action is of a public law nature, giving one of them extraordinary authority which the other lacks, that the Regulation may not apply. There was no indication that the trade union in the specific case acted in some kind of iure imperii matter. This was not acte claire I would have thought, but the High Court evidently thought otherwise.

Geert.

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Supreme Court confirms broad use of anti-suit injunctions to support arbitration

The UK Supreme Court confirmed on 13 June the broad use of anti-suit injunctions in Ust-Kamenogorsk. I have reported earlier (e.g. here) on the tension between the common law and the ECJ over the use of anti-suit injunctions. The judgment only holds for injunctions served outside of the Brussels-I (and Lugano) States.  The case at issue was peculiar in that no arbitral proceedings had been commenced or were as yet proposed – however the respondent remained concerned that the appellant would seek to bring further court proceedings in Kazakhstan in breach of the contractual agreement that such disputes should be subject to arbitration in London. As a result the respondent continued with the proceedings.

Geert.

Supreme Court Press Release

Background to the appeals. The appellant is the owner of a hydroelectric power plant in Kazakhstan. The respondent is the current operator of that plant. The concession agreement between the parties contains a clause providing that any disputes arising out of, or connected with, the concession agreement are to be arbitrated in London under International Chamber of Commerce Rules. For the purposes of this appeal the parties are agreed that the arbitration clause is governed by English law. The rest of the concession agreement is governed by Kazakh law.

Relations between the owners and holders of the concession have often been strained. In 2004 the Republic of Kazakhstan, as the previous owner and grantor of the concession, obtained a ruling from the Kazakh Supreme Court that the arbitration clause was invalid. In 2009 the appellant, as the current owner and grantor of the concession, brought court proceedings against the respondent in Kazakhstan seeking information concerning concession assets. The respondent’s application to stay those proceedings under the contractual arbitration clause was dismissed on the basis that the Kazakh Supreme Court had annulled the arbitration clause by its 2004 decision.

Shortly thereafter the respondent issued proceedings in England seeking (a) a declaration that the arbitration clause was valid and enforceable and (b) an anti-suit injunction restraining the appellant from continuing with the Kazakh proceedings. An interim injunction was granted by the English Commercial Court and the appellant subsequently withdrew the request for information which was the subject of the Kazakh proceedings. However, the respondent remained concerned that the appellant would seek to bring further court proceedings in Kazakhstan in breach of the contractual agreement that such disputes should be subject to arbitration in London. As a result the respondent continued with the proceedings. The English Commercial Court found that they were not bound to follow the Kazakh court’s conclusions in relation to an arbitration clause governed by English law and refused to do so. The Commercial Court duly granted both the declaratory and final injunctive relief sought.

The appellant appealed to the Supreme Court of the United Kingdom on the grounds that English courts have no jurisdiction to injunct the commencement or continuation of legal proceedings brought in a foreign jurisdiction outside the Brussels Regulation/Lugano regime where no arbitral proceedings have been commenced or are proposed.

Judgment. The Supreme Court unanimously dismisses the appeal. The English courts have a long-standing and well-recognised jurisdiction to restrain foreign proceedings brought in violation of an arbitration agreement, even where no arbitration is on foot or in contemplation. Nothing in the Arbitration Act 1996 (“the 1996 Act”) has removed this power from the courts. The judgment of the court is given by Lord Mance.

Reasons

  • § An arbitration agreement gives rise to a ‘negative obligation’ whereby both parties expressly or impliedly promise to refrain from commencing proceedings in any forum other than the forum specified in the arbitration agreement. This negative promise not to commence proceedings in another forum is as important as the positive agreement on forum [21-26].
  • § Independently of the 1996 Act the English courts have a general inherent power to declare rights and a well-recognised power to enforce the negative aspect of an arbitration agreement by injuncting foreign proceedings brought in breach of an arbitration agreement even where arbitral proceedings are not on foot or in contemplation [19-23].
  • § There is nothing in the 1996 Act which removes this power from the courts; where no arbitral proceedings are on foot or in prospect the 1996 Act neither limits the scope nor qualifies the use of the general power contained in section 37 of the Senior Courts Act 1981 (“the 1981 Act”) to injunct foreign proceedings begun or threatened in breach of an arbitration agreement [55]. To preclude the power of the courts to order such relief would have required express parliamentary provision to this effect [56].
  • § The 1996 Act does not set out a comprehensive set of rules for the determination of all jurisdictional questions. Sections 30, 32, 44 and 72 of the 1996 Act only apply in circumstances where the arbitral proceedings are on foot or in contemplation; accordingly they have no bearing on whether the court may order injunctive relief under section 37 of the 1981 Act where no arbitration is on foot or in contemplation [40].
  • § The grant of injunctive relief under section 37 of the 1981 Act in such circumstances does not constitute an “intervention” as defined in section 1(c) of the 1996 Act; section 1(c) is only concerned with court intervention in the arbitral process [41].
  • § The reference in section 44(2)(e) of the 1996 Act to the power of the court to grant an interim injunction “for the purposes of and in relation to arbitral proceedings” was not intended to exclude or duplicate the court’s general power to grant injunctive relief under section 37 of the 1981 Act [48].
  • Service out of the jurisdiction may be affected under Civil Procedure Rule 62.2 which provides for service out where an arbitration claim affects arbitration proceedings or an arbitration agreement; this provision is wide enough to embrace a claim under section 37 to restrain foreign proceedings brought or continued in breach of the negative aspect of an arbitration agreement [49].
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No national (tort) law, please. The ECJ in Melzer v MS Global.

In Case C-228/11 Melzer v MS Global, the court at Dusseldorf requested the Court of Justice to clarify Article 5(3) Brussels I, the special jurisdictional rule for tort: on the basis of the application of this rule in Bier, a defendant may be sued in the place where the damage occurred (locus damni) and, if different, where the action (or inaction) leading to that damage occurred (the locus delicti commissi) . Article 5(3), like Article 5(1), determines not just international jurisdiction [i.e. the courts of which Member State have jurisdiction], but also territorial jurisdiction within that State.

Mr Melzer, who is domiciled in Berlin, was solicited as a client and looked after by telephone by the company Weise Wertpapier Handelsunternehmen (‘WWH’), whose registered office is in Düsseldorf. That company opened an account for Mr Melzer with MF Global UK Ltd (‘MF Global UK’), a brokerage house located in London, which traded in stock market futures for Mr Melzer in return for corresponding fees. Mr Melzer brought proceedings before the Landgericht Düsseldorf claiming that MF Global UK should be ordered to pay him damages equivalent to the difference between what he had paid out and what he had received in the context of those transactions, namely EUR 171 075.12, with interest. W.W.H. has not been implicated in the proceedings. In support of his claims, Mr Melzer maintained that he had not been sufficiently informed about the risks involved in futures trading, so far as options contracts were concerned, either by WWH or by MF Global UK.

The court at Dusseldorf rejected its jurisdiction on the basis of locus damni, arguing that this had taken place in Berlin (Melzer’s domicile), not Dusseldorf. It does however argue that it has jurisdiction on the basis of the locus delicti commissi, based on a combination of Article 5(3) Brussels I and the German Civil Code. Under Paragraph 830 of that Code (Bürgerliches Gesetzbuch), entitled ‘Joint participants and common purpose’:

 ‘(1)      Where several persons have caused damage by the commission of an unlawful act undertaken in common, each of them shall be liable for that act. That is also the case even where it is impossible to determine which of the persons involved caused the damage by his act.

(2)      Instigators and accomplices shall be treated as joint participants of the act.’

The attribution of W.W.H.’s actions to MS Global, in the view of the Dusseldorf court, gives it jurisdiction on the basis of Article 5(3). It asked the following of the Court of Justice:

‘In the context of jurisdiction in matters relating to tort or delict under Article 5(3) of Regulation [No 44/2001], where there is cross-border participation of several persons in a tort or delict, is reciprocal attribution of the place where the event occurred admissible for determining the place where the harmful event occurred?’

There is no trace in the Jurisdiction Regulation of any rule on attribution for acts committed in tort. There are however many arguments against allowing such attribution from creating extra fora:

The JR’s general rule determines jurisdiction in the domicile of the defendant. This principle may be subject to many exceptions, and to many a jurisdictional rule which trumps it, however it remains the principle. As emphasised repeatedly by the ECJ, exceptions to Article 2’s general rule must be interpreted strictly, for the exceptions would otherwise lead to too many potential jurisdictions. All the more so in the case at issue. Allegations of attributions are easily made, and it is not clear how far the Court can go in reviewing the merits of the argument at the jurisdictional stage.

A restrictive interpretation also serves the Regulation’s purpose, as emphasised by the ECJ, of predictability and reliability. A party may otherwise end up being pursued in courts in which it could not reasonably have foreseen to be sued.

Furthermore of course, the attributive rule at issue superimposes national law unto Article 5(3) JR. The Court’s emphasis on autonomous interpretation sits uneasily with that.

Alternative jurisdictional rules would have been possible to establish jurisdiction: Article 6’s rule on joinders (which would have required plaintiff to use WWH as an anchor defendant) comes to mind; as does Article 5(1)’s rule on contracts (although it may not have been easy to establish that the services under contract were or should have been provided in Dusseldorf).

The Court held on 16 May. It referred inter alia to Refcomp to emphasise the presumption against letting national law infiltrate the concepts used by the Regulation, and to many of the arguments referred to above, and held

Accordingly, the answer to the question referred is that Article 5(3) of Regulation No 44/2001 must be interpreted as meaning that it does not allow the courts of the place where a harmful event occurred which is imputed to one of the presumed perpetrators of damage, who is not a party to the dispute, to take jurisdiction over another presumed perpetrator of that damage who has not acted within the jurisdiction of the court seised.

Geert.

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‘Sale of Goods’ or ‘delivery of services’? Jaaskinen AG in Corman-Collins

In Case C-9/12 Corman-Collins, the questions referred are as follows:

Should Article 2 of Regulation No 44/2001,where appropriate in conjunction with Article 5(1)(a) and (b), be interpreted as precluding a rule of jurisdiction, such as that set out in Article 4 of the Belgian Law of 27 July 1961, which provides for the jurisdiction of Belgian courts where the exclusive distributor has its registered office in Belgian territory and where the distribution agreement covers all or part of that territory, irrespective of where the grantor of the exclusive distribution rights has its registered office, where the latter is the defendant?
Should Article 5(1)(a) of Regulation No 44/2001 be interpreted as meaning that it applies to an exclusive distribution of goods agreement, pursuant to which one party purchases goods from another party for resale in the territory of another Member State?
If Question 2 is answered in the negative, should Article 5(1)(b) of Regulation No 44/2001 be interpreted as meaning that it refers to an exclusive distribution agreement, such as that at issue between the parties?
If Questions 2 and 3 are answered in the negative, is the contested obligation in the event of the termination of an exclusive distribution agreement the obligation of the seller-grantor or that of the buyer-distributor?

Corman-Collins is registered in Belgium; La Maison du Whisky in France.  Jaaskinen AG justifiably replies to the first question in succinct fashion: where defendant is domiciled in a Member State other than the Member State of the forum, the Brussels I Regulation has priority over national jurisdictional rules (such as here: the 1961 Act on ‘concession’ agreements).

The 2nd and 3rd question are rephrased by the AG however also re-ordered: Article 5(1) b) of the Regulation, being the more specific, has priority over Article 5(1) a). Jaaskinen then points to an important difficulty: ‘concession’ agreements are not a concept known in EU law (in contrast, for instance, with ‘agency’). In view of the need for autonomous interpretation by the ECJ, the qualification or not of a contract as a ‘sale of goods’ cq ‘provision of services’ (two distinct categories employed by the Regulation), must not be left to national law (and ditto courts) to decide. The AG opts for ‘services’: sale of ‘goods’ is not the core distinguishing element in a ‘concession’ agreement – it is more than that: the holder of the concession rights is explicitly allowed by the other party, to distribute their goods in a given territory, indeed often this right is an exclusive right; holder and grantor often agree common sales techniques (indeed in the case at issue, use by the holder of a domain name indicating the grantor’s trading name); the concession agreement usually is a framework agreement, followed by individual sales agreements. Moreover, the holder commits to holding stock; to having an after sales service; frees the grantor from the requirement to have to establish their own distribution network in the territory; the grantor organises specific training sessions for the holder’s staff, etc. The holder therefore effectively provides a ‘service’, and jurisdiction has to be determined by Article 5(1) b), second indent.

Proof of whether such elements are present in the contractual relationship between parties, needs to be furnished by the party invoking the jurisdictional rule based on ‘services’; qualifications in accordance with lex fori are not relevant for such determination (European Law in other words harmonises qualification).

The final question, which the AG only entertains in subsidiary fashion, concerns the issue of what part of the contractual relationship needs to be withheld as ‘the obligation in question’ of Article 5(1)(a): ‘in matters relating to a contract, in the courts for the place of performance of the obligation in question;’ The concession holder in the case at issue (Corman-Collins) argues that where the grantor’s obligation entails delivery of the exclusive right for the holder to exercise an exclusive right of sale in a given territory, the suit for damages needs to be introduced in that territory.

‘The obligation in question’ was left undefined in both the Brussels Convention and the preparatory works. Indeed the Jenard Report is very brief on the special jurisdictional clause for contracts. In De Bloos the Court specified ‘For the purpose of determining the place of performance within the meaning of Article 5 (…) the obligation to be taken into account is that which corresponds to the contractual right on which the plaintiff’s action is based’. Plantiff’s suit inevitably leans upon defendant’s contractual obligations: it is the latter which determines ‘the obligation in question’. Where that place of performance lies, however, remains subject to national law: the Court in Tessili v Dunlop held that it was in no position to impose a European definition. Jaaskinen AG does not venture to give one, either: outside of the specific categories of Article 5(1)(b), European conflicts law has no grip on the qualification of contracts and their ‘place of performance’ by national courts.

Geert.

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Evidence Regulation’s subsidiary nature confirmed in ProRail. Questions on enforcement left open.

Update 11 January 2021 see therefore my doubt viz Coward Phaestos Ltd & Ors [2021] EWHC 9 (Ch): Application, denied, for discovery /evidence order of data held in England, for use in Cypriot matrimonial proceedings. Held application could and should have been made in Cyprus under EU evidence regulation.

The ECJ has confirmed the subsidiary nature of the Evidence Regulation in ProRail, Case C-332/11. Regulation 1206/2001 does not govern exhaustively the taking of cross-border evidence, but simply aims to facilitate it, allowing use of other instruments having the same aim. The Court in this respect confirmed its view in Lippens.

Unfortunately the ECJ did not entertain the questions of the Belgian Hof van Cassatie on the role of the Brussels I Regulation, in particular Article 31 (confirming jurisdiction for provisional, including protective measures), Article 32 (defining ‘judgment’), and Article 33 (providing for automatic recognition and enforcement).  Admittedly, the national court could have been more precise on the role, if any, it saw for these Articles of the Jurisdiction Regulation in the dispute at issue (the appointment of an expert, for an expertise to be carried out outside of Belgium).

A possible impact of Articles 31-33 JR might relate to challenges of the carrying out of work by the expert (e.g. by way of seeking an injunction) in The Netherlands: would the Dutch court be prevented from second-guessing the expert’s brief, qualifications etc?

The Hof van Cassatie itself, according to the order of reference to which JÄÄSKINEN AG refers, flagged the Jurisdiction Regulation at the instigation of ProRail, whose appeal alleged infringement of Regulation No 44/2001. ProRail sought to infer that the power to order that an expert’s report be obtained lies exclusively with the courts of the place in which it is to be executed and, a contrario, that such a measure does not have any extraterritorial effect except by virtue of the authorisation of the Member State in which that investigative measure is to be carried out.  Switzerland, intervening on this point because of the similarities with the Lugano Convention, suggested that the measure by which a court charges an expert to carry out an investigation in the territory of another Member State is neither a provisional nor a preventive measure within the meaning of Article 31 of Regulation No 44/2001, on the ground that such a measure cannot produce extraterritorial effects, nor a judgment which may be the subject of recognition or enforcement within the meaning of Article 32 of the same regulation.

In the end, the AG suggested that the reference to the Jurisdiction Regulation was not specifically enough included in the questions put to the ECJ – a view which the ECJ implicitly agreed with. An interesting opportunity wasted, so it would seem.

Geert.

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Subrogation of choice of court clauses: The ECJ (succinctly) in Refcomp

The ECJ has issued its ruling in Refcomp, Case C-543/10. I reported on Jaaskinen AG’s Opinion here. The Court effectively confirmed the Opinion, albeit within the boundaries of its customary judicial economy.

Like the AG, the Court first of all limits precedent value to a ‘chain of contracts under Community law’: i.e. a succession of contracts transferring ownership which have been concluded between economic operators established in different Member States of the European Union. It subsequently re-affirms the consensual nature of jurisdiction clauses as insisted on by Article 23 of the Jurisdiction Regulation, and the Brussels Convention before it.  ‘It follows that the jurisdiction clause incorporated in a contract may, in principle, produce effects only in the relations between the parties who have given their agreement to the conclusion of that contract. In order for a third party to rely on the clause it is, in principle, necessary that the third party has given his consent to that effect.’

In a chain of contracts transferring ownership, the relationship of succession between the initial buyer and the sub-buyer is not regarded as the transfer of a single contract or the transfer of all the rights and obligations for which it provides – in contrast with bills of lading for which the Court had previously (Case C‑387/98 Coreck) held that a jurisdiction clause incorporated in a bill of lading may be relied on against a third party to that contract if that clause has been adjudged valid between the carrier and the shipper and provided that, by virtue of the relevant national law, the third party, on acquiring the bill of lading, succeeded to the shipper’s rights and obligations.

Basically, under French law and French law (almost) alone, the action by Doumer against Refcomp would, exceptionally, be considered contractual. In the other Member States, it would not. To refer, the court holds, the assessment as to whether the sub-buyer may rely on a jurisdiction clause incorporated in the initial contract between the manufacturer and the first buyer to national law, would give rise to different outcomes among the Member States liable to compromise the aim of unifying the rules of jurisdiction pursued by the Regulation. The concept of ‘jurisdiction clause’ referred to in that provision therefore must be interpreted as an independent concept, guided by the need to give full effect to the principle of freedom of choice on which Article 23(1) of the Regulation is based.

The ECJ therefore holds that

Article 23 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that a jurisdiction clause agreed in the contract concluded between the manufacturer of goods and the buyer thereof cannot be relied on against a sub-buyer who, in the course of a succession of contracts transferring ownership concluded between parties established in different Member States, purchased the goods and wishes to bring an action for damages against the manufacturer, unless it is established that that third party has actually consented to that clause under the conditions laid down in that article.

Geert.

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