Posts Tagged Comity
Steady now. Eva Glawischnig-Piesczek v Facebook. The CJEU on jurisdiction and removal of hate speech.
My interest in C-18/18 Eva Glawischnig-Piesczek v Facebook as I noted in my short first review of the case, concerns mostly the territorial reach of any measures taken by data protection authorities against hosting providers. The Court held last week and o boy did it provoke a lot of comment.
The case to a large degree illustrates the relationship between secondary and primary law, and the art of reading EU secondary law. Here: Article 15 of the e-commerce Directive 2001/31 which limits what can be imposed upon a provider; and the recitals of the Directive which seem to leave more leeway to the Member States. Scant harmonisation of tort law in the EU does not assist the Institutions in their attempts to impose a co-ordinated approach.
The crucial issue in the case was whether Article 15 prohibits the imposition on a hosting provider (Facebook, in this case) of an obligation to remove not only notified illegal content, but also identical and similar content, at a national or worldwide level? The Court held the Directive does not as such preclude such order, and that as to the worldwide injunctive issue, EU law has not harmonised and that it is up to the Member States to direct in any such orders in compliance with public international law.
The judgment to a large degree concerns statutory interpretation on filtering content, which Daphne Keller has already reviewed pre the judgment succinctly here, Dan Svantesson post the judgment here, as did Lorna Woods, and a frenzied Twitter on the day of the judgment e.g. in this thread. A most balanced analysis is provided by Andrej Savin here. e-Commerce law is not the focus of this blog, neither my professed area of expertise (choices, choices). I do want to emphasise though
- that as always it pays to bear in mind the CJEU’s judicial economy. Here: the need to interpret its judgment in line with the circumstances of the case. As Steve Peers noted, the Austrian court had ruled that the post was defamatory, which is a recognised basis for limiting freedom of expression; see also at 40: ‘In that regard, it should be made clear that the illegality of the content of information does not in itself stem from the use of certain terms combined in a certain way, but from the fact that the message conveyed by that content is held to be illegal, when, as in the present case, it concerns defamatory statements made against a specific person.‘ Nota bene, the same need to read the judgment in context goes for the earlier Google v CNIL case, applying Directive 95/46 and the GDPR, which I review here.
- that speaking strictly as a member of the public who has seen the devastating effect of ‘social’ media on people close to me, the technical discussions on filtering (‘what filter does the CJEU think might possibly ever be available to FB to remove content in the way the Court wishes’) are emphatically beside the point. The public justifiably are not interested in the how. A service is offered which clearly has negative effects on EU citisens. Remedy those effects, or remove the service from those citisens. That is true for the negative impacts of goods (in 25 years of regulatory Bar practice I have seen plenty of that). There is no reason it should be any less true for services.
The jurisdictional issues are what interest me more from the blog’s point of view: the territorial scope of any removal or filtering obligation. In Google viz the GDPR and the data protection Directive, the Court confirmed my reading, against that of most others’, of Szpunar AG’s Opinion. EU law does not harmonise the worldwide removal issue. Reasons of personal indemnification may argue in specific circumstances for universal jurisdiction and ditto reach of injunctive relief on ‘right to be forgotten’ issues. Public international law and EU primary law are the ultimate benchmark (Google V CNIL). It is little surprise the Court held similarly in Eva Glawischnig-Piesczek, even if unlike in Google, it did not flag the arguments that might speak against such order. As I noted in my review of Google, for the GDPR and the data protection Directive, it is not entirely clear whether the Court suggests EU secondary law simply did not address extraterritoriality or decided against it. For the e-commerce Directive in Eva Glawischnig-Piesczek the Court notes at 50-52
Directive 2000/31 does not preclude those injunction measures from producing effects worldwide. However, it is apparent from recitals 58 and 60 of that directive that, in view of the global dimension of electronic commerce, the EU legislature considered it necessary to ensure that EU rules in that area are consistent with the rules applicable at international level. It is up to Member States to ensure that the measures which they adopt and which produce effects worldwide take due account of those rules.
In conclusion, Member States may order a host provider to remove information covered by the injunction or to block access to that information worldwide within the framework of the relevant international law. To my knowledge, the Brussels Court of Appeal is the only national court so far to consider public international law extensively viz the issue of jurisdiction, and decided against it, nota bene in a case against Facebook Inc.
Any suggestion that the floodgates are open underestimates the sophisticated engagement of national courts with public international law.
In general, the CJEU’s approach is very much aligned with the US (SCOTUS in particular) judicial approach in similar extraterritoriality issues (sanctions law; export controls; ATS;…). There is no madness to the CJEU’s approach. Incomplete: sure (see deference to national courts and the clear lack of EU law-making up its legislative mind on the issues). Challenging and work in progress: undoubtedly. But far from mad.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52, Heading 184.108.40.206.5.
When I reported  EWHC 466 (Fam) V v M, I suggested that forum non considerations there, moot given that eventually jurisdiction of the English courts was upheld, would resurface in further cases. They have.  EWHC 1995 (Fam) W v L eventually went much the same way as V v M.
The Brussels BIIa Regulation applies when determining the question of jurisdiction regardless of whether there is an alternative jurisdiction in a non-member state (Re A (Jurisdiction: Return of Child)  1 AC 1 , later confirmed in CJEU UD v XB C-393/18 PPU  1 WLR 3083 ). Brussels IIa has an intra-EU forum non conveniens regime (applied in C‑428/15, Child and Family Agency, on which I report here).
Art 8(1) of BIIa provides that the courts of a Member State shall have jurisdiction in matters of parental responsibility over a child who is habitually resident in that Member State at the time the court is seised.
MacDonald J at 30 posits that where the English court does have jurisdiction under Art 8 BIIa but there are proceedings also in a third party non-member state (here: Jordan) the issue becomes one of forum conveniens – which he subsequently discusses following the Spiliada criteria. In V v M to which current judgment refers at 34, Williams J reflected on whether forum non at all has calling following (he held it does; not convincingly). MacDonald J in current case first at 30 simply seems to accept such application. Then at 38 holds he need not decide this issue here (counsel had suggested the issue was in fact covered by Brussels Ia and the precedent value of Owusu therefor clear) for even if forum non conveniens has to be decided, it clearly points to England.
In conclusion, therefore: the issue still has not been settled and will, again, return.
The internet’s not written in pencil, it’s written in ink. Szpunar AG in Eva Glawischnig-Piesczek v Facebook, re i.a. jurisdiction and removal of hate speech. (As well as confirming my reading of his Opinion in Google).
Case C-18/18 Eva Glawischnig-Piesczek v Facebook as I noted in my short first review of the case, revolves around Article 15 of the E-Commerce Directive. Does Article 15 prohibit the imposition on a hosting provider (Facebook, in this case) of an obligation to remove not only notified illegal content, but also identical and similar content, at a national or worldwide level?
Szpunar AG in his Opinion kicks off with a memorable Erica Albright quote from The Social Network: The internet’s not written in pencil, [Mark], it’s written in ink’.
His Opinion to a large degree concerns statutory interpretation on filtering content, which Daphne Keller has already reviewed succinctly here and which is not the focus of this blog. The jurisdictional issues are what interest me more: the territorial scope of any removal obligation.
Firstly, Szpunar AG matter of factly confirms my reading, against that of most others’, of his Opinion in C-505/17 Google: at 79:
‘in my Opinion in that case I did not exclude the possibility that there might be situations in which the interest of the Union requires the application of the provisions of that directive beyond the territory of the European Union.’
Injunctions (ordering removal) are necessarily based on substantive considerations of national law (in the absence of EU harmonisation of defamation law); which law applies is subject to national, residual conflicts rules (in the absence of EU harmonisation at the applicable law, level, too): at 78. Consequently, a Court’s finding of illegality (because of its defamatory nature) of information posted may well have been different had the case been heard by a court in another Member State. What is however harmonised at the EU level, is the jurisdiction for the civil and commercial damage following from defamation: see e-Date, in particular its centre of interests rule which leads to an all-encompassing, universal’ jurisdiction for the damages resulting from the defamation.
Separate from that is the consideration of the territorial extent of the removal obligation. Here, the AG kicks off his analysis at 88 ff by clearly laying out the limits of existing EU harmonisation: the GDPR and data protection Directive harmonise issues of personal data /privacy: not what claimant relies on. Directive 2000/31 does not regulate the territorial effects of injunctions addressed to information society service providers. Next, it is difficult, in the absence of regulation by the Union with respect to harm to private life and personality rights, to justify the territorial effects of an injunction by relying on the protection of fundamental rights guaranteed in Articles 1, 7 and 8 of the Charter: the scope of the Charter follows the scope of EU law and not vice versa. In the present case, as regards its substance, the applicant’s action is not based on EU law. Finally, Brussels Ia does not regulate the extra-EU effects of injunctions.
In conclusion therefore EU law does not regulate the question of extraterritorial reach in casu.
For the sake of completeness, the AG does offer at 94 ff ‘a few additional observations’ as regards the removal of information disseminated worldwide via a social network platform. At 96 he refers to the CJEU’s judgment in Bolagsupplysningen which might implicitly have acknowledged universal jurisdiction, to conclude at 100 (references omitted)
the court of a Member State may, in theory, adjudicate on the removal worldwide of information disseminated via the internet. However, owing to the differences between, on the one hand, national laws and, on the other, the protection of the private life and personality rights provided for in those laws, and in order to respect the widely recognised fundamental rights, such a court must, rather, adopt an approach of self-limitation. Therefore, in the interest of international comity…, that court should, as far as possible, limit the extraterritorial effects of its junctions concerning harm to private life and personality rights. The implementation of a removal obligation should not go beyond what is necessary to achieve the protection of the injured person. Thus, instead of removing the content, that court might, in an appropriate case, order that access to that information be disabled with the help of geo-blocking.
There are very sound and extensive references to scholarship in the footnotes to the Opinion, including papers on the public /private international law divide and the shifting nature of same (the Brussels Court of Appeal recently in the Facebook case justifiably found jurisdictional grounds in neither public nor private international law, to discipline Facebook Ireland and Facebook Inc for its datr-cookies placed on Belgian users of FB).
I find the AG’s Opinion convincing and complete even in its conciseness. One can analyse the jurisdictional issues until the cows come home. However, in reality reasons of personal indemnification may argue in specific circumstances for universal jurisdiction and ditto reach of injunctive relief. However these bump both into the substantial trade-off which needs to be made between different fundamental rights (interest in having freedom removed v freedom of information), and good old principles of comitas gentium aka comity. That is not unlike the US judicial approach in similar issues.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 220.127.116.11, Heading 18.104.22.168.5.
Arcelor Mittal v Essar. The High Court races ahead in its support for arbitration. On comity, fraud, and worldwide freezing orders.
 EWHC 724 (Comm) ArcelorMittal USA LLC v Essar Steel Limited and others is quite the highlight in worldwide regulatory competition for championing arbitration.
As 20 Essex Street note, Jacobs J refused to vary an earlier worldwide freezing order (WFO), despite the award being foreign, Claimant and Defendant companies being foreign, there being no significant assets within the jurisdiction, and the courts at Mauritius (defendant is Mauritius-incorporated, defendant to the Arbitration Claim, and the debtor under the ICC award) potentially feeling gazumped by their English colleagues.
Of note over and above Essex Street’s analysis is
- the defendants urging the Court on the grounds of comity (no need for the English courts to act at policeman for assets located abroad: at 72, referring to Popplewell J. in Conocophillips China Inc v Greka Energy (International) BV.  EWHC 2733) to resist the call for a WFO. This was rejected (at 81) with the argument ‘I consider that I am entitled to proceed on the basis of the evidence that the Mauritian courts would not regard the WFO as offensive in some way.’; and ‘The WFO does not presently conflict with any order of the Mauritian courts, and this is not a case where the Mauritian courts have refused equivalent relief or where there is evidence that those courts would be likely to do so.’ Jacobs J therefore does consider comity quite carefully.
- the Court’s sense of urgency in what it sees as a case of fraus: At 45:
‘There is no precise definition of what is meant by the phrase “international fraud” found in the case-law, but I do not consider that it is confined to cases where the underlying cause of action is a claim in deceit or a proprietary claim relating to the theft of assets. If there is a strong case of serious wrongdoing comprising conduct on a large or repeated scale whereby a company, or the group of which it is a member, is acting in a manner prejudicial to its creditors, and in bad faith, then I see no reason why the English court should not be willing to intervene rather than to stand by and allow the conduct to continue and, to put the matter colloquially, to let the wrongdoer get away with it. In the present case, I would regard the attempted dissipation of Essar Steel’s US$ 1.5 billion asset, in the face of the commencement of arbitration proceedings, as sufficient in itself potentially to warrant intervention under the “international fraud” exception, or as constituting “exceptional circumstances”.’
- and the rejection at 73 of a CJEU C-391/95 Van Uden type of restraint, requiring a real connecting link between the subject matter of the measures sought and the territorial jurisdiction of the English court.
Chapter 15 is the typical entry gate for a foreign insolvency practitioner to engage in US bankruptcy proceedings – it is also the general jurisdictional gateway for US courts viz international insolvencies, COMI and insolvency tourism discussions etc. By way of example see Norton Rose’s 2017 overview here.
In Ema Garp Fund v. Banro Corp., Case No. 18-01986 Law360 summarise the outcome as it stands (I understands motion to appeal has been filed) as follows: ‘Canada’s Banro Corp. won’t face a suit in New York federal court alleging the mining company lied to investors about its operations in the Democratic Republic of Congo after a judge ruled (..) that those claims were resolved last year in bankruptcy proceedings in Canada.’
Kelly Porcelli excellently reviews the issues here, with justified emphasis on comity considerations – I am happy to refer.
One for the comparative litigation ledger.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.5, Heading 5.6.
In  EWHC 466 (Fam) V v M, Williams J refused both an application for a stay on the basis of forum non conveniens of English proceedings in favour of proceedings in India, and an anti-suit injunction. Applicant mother is V and the respondent is the father M. They are engaged in litigation in England and in India in respect of their son. The English limb of the proceedings is the mother’s application for wardship which was issued on or about the 16 October 2018, and which includes within it application for the summary return of the child from India to England.
India is (obviously) neither a Brussels IIa party nor the 1996 Hague child Protection Convention. Brussels IIa contains a forum non-light regime (as Brussels Ia now does, too): see e.g. Child and Family Agency v J.D. Whether more general forum non is excluded following Owusu v Jackson per analogiam, has not reached the CJEU however as Williams J notes at 22 ‘the trend of authority in relation to the ‘Owusu-v-Jackson’ points towards the conclusion that the power to stay proceedings on forum non-conveniens grounds continues to exist in respect of countries which fall outside the scheme of BIIa or the 1996 Hague Child Protection Convention.’
Given that eventually he upholds jurisdiction of the English courts, the point is moot however may be at issue in further cases.
At 48 ff the various criteria for forum non were considered:
i) The burden is upon the applicant to establish that a stay of the English proceedings is appropriate.
ii) The applicant must show not only that England is not the natural or appropriate forum but also that the other country is clearly the more appropriate forum.
iii) In assessing the appropriateness of each forum, the court must discern the forum with which the case has the more real and substantial connection in terms of convenience, expense and availability of witnesses. In evaluating this limb the following will be relevant;
a) The desirability of deciding questions as to a child’s future upbringing in the state of his habitual residence and the child’s and parties’ connections with the competing forums in particular the jurisdictional foundation
b) The relative ability of each forum to determine the issues including the availability of investigating and reporting systems. In practice, judges will be reluctant to assume that facilities for a fair trial are not available in the court of another jurisdiction but this may have to give way to the evidence in any particular case.
c) The convenience and expense to the parties of attending and participating in the hearing and availability of witnesses.
d) The availability of legal representation.
e) Any earlier agreement as to where disputes should be litigated.
f) The stage any proceedings have reached in either jurisdiction and the likely date of the substantive hearing.
g) Principles of international comity, insofar as they are relevant to the particular situation in the case in question. However public interest or public policy considerations not related to the private interests of the parties and the ends of justice in the particular case have no bearing on the decision which the court has to make.
h) The prospects of success of the applications.
iv) If the court were to conclude that the other forum was clearly more appropriate, it should grant a stay unless other more potent factors were to drive the opposite result; and
v) In the exercise to be conducted above the welfare of the child is an important (possibly primary), but not a paramount, consideration.
Conclusion is that on clear balance England is the natural and appropriate forum and India is not clearly the more appropriate forum.
At 50, the anti-suit injunction was considered premature (Williams J suggests that had it been a commercial matter, it may not have been): ‘Assuming that a stay application can be made and that some form of judicial liaison can be commenced to enable this court and the Indian court to work cooperatively to solve the riddle of competing applications in our respective courts, it is in my view wholly premature to grant such an injunction. That situation might fall to be reconsidered if no progress can be made and in particular if the father embarked upon a rear-guard action to play the Indian courts to delay the resolution of matters. However we are far from that position as yet.’
Note the comity considerations here, reflecting on the potential judicial co-operation between India and England, advanced here given the interest of the child (less likely for purely commercial cases, one assumes).
Cuzco v Tera (Chapter 11). Respect for Korean exclusive jurisdictional rule (shareholder derivative claims) does not trump US subject-matter jurisdiction.
Thank you Dechert for flagging Case No. 16-00636 Cuzco v Tera (Chapter 11), in which Faris J with great clarity wades in on a motion to dismiss US Chapter 11 jurisdiction in favour of exclusive jurisdiction for the Seoul courts with respect to a Korean company shareholder derivative action.
The case is relevant to insolvency practitioners. More generally however it highlights the need for a court to keep a level heading when wading through to and fro litigation in various States.
A bit of factual detail is required to appreciate the ruling.
Cuzco USA filed a chapter 11 in Hawaii with its sole asset real property in Hawaii. Tera Resources Co., Ltd. (“Tera”), one of Cuzco Korea’s shareholders asserted that the Debtor and its insiders conspired to deprive Cuzco Korea of the value of the real property. Tera commenced an action for fraud, breach of fiduciary duties, piercing the corporate veil, unjust enrichment and imposition of constructive trust.
The defendants moved to dismiss, in favour of the Korean courts – and failed, both on arguments of forum non conveniens and on arguments of there being exclusive jurisdiction for the courts at Seoul. Defendant Mr Lee is purportedly the manager of Cuzco USA and the representative director of Cuzco Korea. Defendant Ms Yang is shareholder and creditor of Cuzco Korea and an ally of Mr. Lee.
Cuzco USA had proposed, and the court confirmed, a Third Amended Plan of Reorganization. Briefly summarized, the Third Amended Plan provided that Cuzco USA would transfer the Keeaumoku (Hawaii) Property to Newco, a Hawaii limited liability company of which Mr. Lee is the sole member, that Newco would attempt to raise enough money through a refinancing to repay all of Cuzco USA’s creditors in full, and that if the refinancing did not occur by a date certain, Newco would sell the Keeaumoku Property at auction and distribute the proceeds to Cuzco USA’s creditors.
Tera and others filed motions for reconsideration of the order confirming the Third Amended Plan. Tera is a shareholder of Cuzco Korea. It also holds a judgment, entered by a Korean court, against Ms. Yang, and orders from a Korean court that, according to Tera, resulted in the seizure of Ms. Yang’s interests in and claims against Cuzco Korea.
Cuzco USA then moved to modify the Third Amended Plan and replaced it with a Fourth Amended Plan. Briefly summarized, this Plan eliminates the transfer of the Keeaumoku Property to Newco; instead, Cuzco USA will retain the property and either refinance it or sell it at auction. Tera and others vigorously objected to plan confirmation on multiple grounds. The court confirmed the Fourth Amended Plan.
Tera argued (among other things) that the Third Amended Plan was the product of a fraudulent scheme by Mr. Lee, Ms. Yang, and others to divert the equity in Cuzco USA from Cuzco Korea to themselves and to render Tera’s interests in Cuzco Korea worthless.
That Korean law covers governs the right to bring derivative claims on behalf of a Korean corporation is not under dispute between the parties. (It is therefore considered part of the rules on internal organisation which are subject to lex societatis). However Faris J dismissed defendants’ suggestion that the US court should also respect Korea’s jurisdictional rules that such suits be brought in Seoul only.
At B, p.10: US statutes confer subject matter jurisdiction on US courts. Statutes of another nation, such as the South Korean statute on which the moving defendants rely, cannot change the subject matter jurisdiction of a United States bankruptcy court under a United States statute.
Forum non conveniens was dismissed for there is a strong policy that favors centralization of claims against the debtor in the bankruptcy court that outweighs any other interest (at C, p.12). One would have to have strong arguments to push that aside and clearly these were not present here.