Posts Tagged Choice of court

Apple v eBizcuss. Wahl AG on choice of court, anti-trust (competition law; clarifying CDC) and ‘corresponding relationships’.

Those of us who are familiar with the issue of multilingualism and international courts, will  enjoy the discussion of contractual terms in Wahl AG’s Opinion in C-595/17 Apple v eBizcuss. Not only does the issue entre around the precise implications of the wording of a choice of court provision. The Opinion (not yet available in English) also highlights the difficulty of translating the original English of the contractual term, into the languages at the Court.

Current litigation is a continuation of the earlier spats between Apple and eBizcuss, which led to the Cour de Cassation’s 2015 reversed stance on the validity of unilateral choice of court – which I discussed at the time.

The 2002 Apple Authorized Reseller Agreement (in fact the 2005 version which applied after continuation of the contract) included a governing law and choice of court clause reading

„This Agreement and the corresponding relationship between the parties shall be governed by and construed in accordance with the laws of the Republic of Ireland and the parties shall submit to the jurisdiction of the courts of the Republic of Ireland. Apple reserves the right to institute proceedings against Reseller in the courts having jurisdiction in the place where Reseller has its seat or in any jurisdiction where a harm to Apple is occurring.” (emphasis added)

Footnote 3 displays the translation difficulty which I refer to above: parties disagree as to the translation of the contractual clause in French: applicant suggest this should read  „et la relation correspondante”, defendant proposes „et les relations en découlant”. The AG suggest to include both for the purposes of his analysis „Le présent contrat et la relation correspondante (traduction de la requérante)/et les relations en découlant (traduction de la défenderesse) entre les parties seront régis par et interprétés conformément au droit de l’Irlande et les parties se soumettent à la compétence des tribunaux de l’Irlande. Apple se réserve le droit d’engager des poursuites à l’encontre du revendeur devant les tribunaux dans le ressort duquel est situé le siège du revendeur ou dans tout pays dans lequel Apple subit un préjudice.” In Dutch: „De door partijen gesloten onderhavige overeenkomst en de bijbehorende betrekking (vertaling van verzoekster)/de hieruit voortvloeiende betrekkingen (vertaling van verweerster) tussen partijen zullen worden beheerst door en worden uitgelegd volgens het Ierse recht, en partijen verlenen bevoegdheid aan de Ierse rechter. Apple behoudt zich het recht voor om vorderingen jegens de wederverkoper aanhangig te maken bij het gerecht in het rechtsgebied waar de wederverkoper is gevestigd of in een land waar Apple schade heeft geleden.”

This translation issue however highlights precisely the core of the discussion: ‘the corresponding relationship’ suggest a narrow reading: the relationship corresponding to the contractual arrangements. Infringement of competition law does not correspond, in my view. ‘La relation correspondante’ displays this sentiment. ‘(L)es relations en découlant’ suggests a wider reading.

In 2012 eBizcuss started suing Apple for alleged anti-competitive behaviour, arguing Apple systematically favours its own, vertically integrated distribution network.

The Cour de Cassation had rebuked the Court of Appeal’s finding of lack of jurisdiction. In its 2015 decision to quash, (the same which qualified the Court’s stance on unilateral jurisdiction clauses) it cited C-352/13 CDC, in which the CJEU held that choice of court clauses are not generally applicable to liability in tort (the clause would have to refer verbatim to tortious liability): the specific para under consideration is para 69 of that judgment in CDC:

the referring court must, in particular, regard a clause which abstractly refers to all disputes arising from contractual relationships as not extending to a dispute relating to the tortious liability that one party allegedly incurred as a result of its participation in an unlawful cartel’.

At issue in Apple /eBizcuss is essentially what kind of language one needs for choice of court to include infringement of competition law (for Dutch readers, I have an earlier overview in Jacques Steenbergen’s liber amicorum here).

Wahl AG emphasises (at 56) that it would not be in the spirit of Article 25 Brussels I Recast (which he analyses in extenso in the previous paras) to require parties to include the exact nature of the suits covered by the choice of court agreement. He is right of course – except those suits in my view do need to be contractual unless non-contractual liability has been clearly included: that in my view is the clear instruction of the CJEU in CDC.

The AG then continues the discussion (which will be redundant should the CJEU not follow his lead) as to whether the clause covers both follow-on (a suit for tort once a competition authority has found illegal behaviour) as well as stand-alone (private enforcement: a party claiming infringement of competition law in the absence of an authority’s finding of same) suits. He suggests there should be no distinction: on that I believe he is right.

Geert.

 

 

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BN Rendering: the old chestnut of Colzani featuring heavily in Scots-English choice of court.

Thank you Chloe Oakshett for flagging [2018] CSOH 45 BN Rendering Limited v Everwarm Ltd, in which the Commercial Court in Edinburgh considered its jurisdiction to enforce an adjudicator’s award. Bone of contention was choice of court (ditto law) in the underlying contracts in favour of the courts at England (and English law). Both parties are domiciled in Scotland. Relevant works had to be carried out in Scotland. The Brussels I Recast Regulation does not formally apply between them: Scots-English conflicts are not ‘international’ within the meaning of that Regulation.

However Lord Bannatyne (at 16) points out that even for intra-UK conflicts, the Civil Jurisdiction and Judgements Act 1982 (per instruction in section 20(5) a) must be interpreted taking into account the Brussels regime and its application by the CJEU. It is in this context that Case 24/76 Colzani resurfaces: ‘real consent’ needs to be established without excess formality.

At 28 Lord Banatyne lists claimant’s arguments:  the party’s contract was not signed by both parties; nevertheless the defender’s subcontract terms and conditions form part of the contract; the subcontract order refers expressly to the defender’s subcontract terms and conditions which includes the jurisdiction exclusion clause and lastly, that express reference meets the test for real consent to the jurisdiction clause.

Put in summary: At 49: Is an express reference in the defender’s subcontract order (sent to the pursuer) to the defender’s subcontract terms and conditions, which contain the jurisdiction clause (which document is unsigned by the pursuer) sufficient to satisfy the test that it is clearly and precisely demonstrated that the parties agreed to the clause conferring jurisdiction on the English courts? Or put another way, in order to satisfy the said test is it not only necessary for there to be an express reference to the defender’s subcontract terms and conditions but for the subcontract order to have been signed by the pursuer to demonstrate that the parties agreed to the clause conferring jurisdiction on the English courts?

The judge considers the answer to the above questions to be question 1, yes and question 2, no – and I believe he is right.

Geert.

 

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Ermgassen v Sixcap Financials: Singapore High Court the first to recognise and enforce under the Hague Choice of Court Convention

[2018] SGHCR 8 Ermgassen v Sixcap Financials to my knowledge is the first recognition and enforcement by any court under the 2005 Choice of Court Convention. Together with the 28 EU Member States (and the EU itself), Singapore, with Mexico, are the 30 States for which the Convention has entered into force.

In his decision for the High Court, Colin Seow AR recognises a High Court ex parte summary judgment, taking the process to the Hague motions: whether the issue is civil and commercial; whether choice of court was concluded in favour of the courts having issued the judgment; and pointing to the UK’s membership of the Convention and to counsel for the plaintiff having been heard at the London High Court hearing: this makes the judgment one on the merits, not just a judgment in absentia (of the defendant: a Singapore-domiciled company). Of note is Seow AR’s flexible approach to the requirement to produce certified copies of the judgment (at 23 ff).

Geert.

 

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BNP Paribas v TRM: Competing choice of courts in the same commercial relation.

In [2018] EWHC 1670 (Comm) BNP Paribas v TRM, the High Court essentially had to hold on its jurisdiction in the face of competing choice of court clauses in an ISDA MAster Agreement (the courts of England; and lex contractus English law) and the attached Financing Agreement (the courts of Turin).

Knowles J dissected the agreements in relation to the claims made by the parties (again highlighting the relevance of formulation of claims): at 27: where, as here, there is more than one contract and the contracts contain jurisdiction clauses in favour of the courts of different countries, the court is faced with a question of construction or interpretation. And at 54: ‘The parties agreed jurisdiction in favour of the English Court under the Master Agreement. The fact that TRM further committed itself in the Financing Agreement to comply with its commitments under the Master Agreement does not mean that commitments under the Master Agreement and swap transaction are any the less subject to the jurisdiction agreed under the Master Agreement, or any the less able to be adjudicated upon and enforced by proceedings in England.’

Application to reject jurisdiction of the English Courts dismissed.

Geert.

 

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Forum non conveniens, lis alibi pendens ex-EU following Brussels I Recast. High Court adopts limiting approach in UCP v Nectrus.

In [2018] EWHC 380 (Comm) UCP Plc v Nectrus Limited Cockerill J takes the same conclusion on the new lis alibi pendens rule ex-EU in the Brussels I Recast, which I had suggested in the Handbook (p.182). A court in a Member State seized of an action other than those based on Articles 4, 7, 8 or 9 cannot refuse jurisdiction in favour of a court based ex-EU.

From Herbert Smith’s summary of the case: Nectrus, a Cypriot company, commenced proceedings in the Isle of Man seeking payment of sums withheld by UCP, an Isle of Man company, on the sale of a company, Candor. UCP then commenced proceedings in England claiming that Nectrus was in breach of an Investment Management Agreement (IMA), the loss being the amount by which the sale consideration of Candor had been reduced, hence the amount withheld on its sale.

The IMA contained a non-exclusive jurisdiction agreement in favour of the English courts. UCP disputed the jurisdiction of the Manx court, but in the event the proceedings continued, indicated they would raise the cause of action relied on in the English proceedings by way of equitable set off. Nectrus disputed their right to do so.

Nectrus disputed the jurisdiction of the English court on the basis that the Manx courts were the most appropriate forum to determine the dispute and were first in time.

Other than for the articles listed above, the CJEU’s findings in Owusu continue to apply. That includes English jurisdiction on the basis of non-exclusive choice of court, covered by Article 25 of the Recast Regulation. Justice Cockerill is entirely correct in unhesitatingly (at 39) rejecting forum non conveniens.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.4 (International impact of the Brussels I Recast Regulation), Heading 2.2.14.5.2.

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Pretty pennies and exclusive choice of court. BDO Cayman v Argyle Funds

In BDO Cayman v Argyle Funds, reported  by Harneys, the Grand Court of the Cayman Islands followed English and Australian authority in having an anti-suit injunction followed by a cost order against the party that had infringed choice of court. Costs including not just the domestic proceedings (that would be obvious) but also the foreign proceedings (here: in the US).

It is this type of measure which makes jurisdictions stand out and be noticed in civil procedure regulatory competition – not, as I flagged earlier, half-baked attempts to add some gloss via international business courts.

Geert.

 

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X v I: The Austrian Supreme Court on due diligence in choice of court under Brussels I Recast.

Thank you Klaus Oblin for flagging OGH 7 Ob 183/17p X SE v I SpA (yet again I am happy to grumble that there is really no need to keep B2B litigation anonymous) at the Austrian Supreme Court. At issue is the application of Article 25 Brussels I Recast: when can consent to choice of court be established.

The facts of the case reflect repeated business practice: offers are made and accepted; a business relationship ensues on the basis of which further offers and orders are made; somewhere along the lines reference is made to general terms and conditions – GTCs which include choice of court. Can defendant be considered to have consented?

The Supreme Court, justifiably, lays the burden of proof with the claimant /plaintiff: if the contract is concluded through different offer and acceptance documents, the offer need only reference the terms and conditions containing the agreement conferring jurisdiction only if the other party: can follow-up on this with reasonable diligence; and actually receives the terms and conditions.

I am happy to refer to Klaus’ excellent overview (which also discussed the absence of established business practice between parties: one of the alternatives for showing choice of court). Yet again, the first and foremost quality required of lawyers (here: in-house counsel) emerges: ensure proper filing and compliance with simple procedure. Here: a clear flag of the GTCs in correspondence, and simple follow-up would have sufficed.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9.

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