Tag: Comparative conflict of laws

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Fong Chak Kwan v Ascentic. The Hong Kong Court of Final Appeal aligns the damage jurisdictional gateway with the UKSC’s Brownlie approach.

This post is one for the comparative binder. Fong Chak Kwan v Ascentic Limited and Others [2022] HKCFA 12 (many thanks to Poomintr Sooksripaisarnkit for alerting me to the judgment) discusses a variety of issues, the one of interest to the blog is the tort gateway for a tort allegedly committed outside of Hong Kong. The ruling on that issue was delivered by Lord Collins, a former UKSC judge who continues to sit in the Hong Kong judicial system (unlike others who have withdrawn from the Hong Kong courts in light of the region’s rule of law issues).

[67] Direct damage was sustained on the Mainland, with indirect damage only in Hong Kong.

The First Instance judge [68] ‘in line with the majority judgments of Lady Hale and Lord Wilson in [UKSC Brownlie] .., and being unpersuaded by the minority view of Lord Sumption, decided that (a) the expression “damage” in Gateway F was not limited to damage which completed the cause of action; (b) the expression was not limited to direct damage as opposed to indirect/consequential damage; (c) where damage was felt in more than one jurisdiction, indirect/consequential damage qualified under Gateway F if it was of some significance; (d) the expression was to be given its ordinary and natural meaning, which embraced indirect/consequential damage; and (e) the consequences of a wide interpretation were sufficiently addressed by the discretion as to forum conveniens.’ 

The Court of Appeal [69] ‘like the judge, held that the reasoning of the majority in Brownlie v Four Seasons Holdings Inc was to be preferred to that of the minority. Damage included all of the heads of damage which might be suffered as a result of tortious conduct, including all the detriment, physical, financial and social which the plaintiff suffered as a result. The natural and ordinary meaning of Gateway F was clear, and there was no basis for drawing a distinction between direct and indirect damage. Nor was there any basis for applying the European jurisprudence on the Brussels Convention and Brussels I Regulations. Finally, the expression “the damage” in Gateway F did not mean that all the damage, or the damage which completed the cause of action, had to be sustained in Hong Kong.’

[74] ff Collins NPJ provides a historic and geographical comparative (Commonwealth) tour d’horizon, confirming the lower courts’ view.

[107]-[108] ‘(I)n the light of the legislative purpose, the natural and ordinary meaning of the word “damage” is just that, and the rule does not distinguish between the damage which completes a cause of action and that which does not, nor does it distinguish between direct or indirect damage, or between physical or financial damage. The question is whether there is a legislative purpose, or a public policy, or an absurd or undesirable result, which justifies a narrower construction, to encompass only direct damage as opposed to indirect damage.’: the judge finds there is no such purpose, policy or result.’

[109] he discusses 3 flows in the reasoning of the alternative reading, which are worth a read. [121] the same safety valve is emphasised as the UKSC did in the majority view in Brownlie: where the exercise of the locus damni gateway leads to unwarranted results, forum non conveniens can come to the rescue.

Geert.

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Some pondering on EU reception of Celsius’ GTC choice of court and -law.

Update 30 01 2023 on cryptocurrency and arbitration see meanwhile Soleymani v Nifty Gateway LLC [2022] EWCA Civ 1297 and  Chechetkin v Payward Ltd & Ors [2022] EWHC 3057 (Ch) discussed here.

When prof Bookman asked my input on Celsius’ choice of court and governing law’s clause in its GTCs, I was otherwise engaged. Subsequently I waited with an answer for I used the issue for an exam question. – so here is my primer.

Celsius are one of the leading crypto currencies exchanges (future readers may not be familiar: crypto currencies were an early 21st century Ponzi scheme).

The question I put to the students, was:  A fellow academic and practitioner from the US asks you how clause 33 of the standard Celsius contract, copied below, would be received in the EU. Celsius are one of the world’s leading crypto currencies exchanges.

How do you respond to this question? Argue with reference inter alia to relevant CJEU case-law.

Students had two pages to answer. I did not specify Celsius’ domicile. This is what I expect to be included in the reply. Both for jurisdiction and for there is a clear distinction between the B2B and B2C scenario.

Re: B2C: For the contract to be a true ‘consumer’ contract within the meaning of Brussels Ia, Celsius would have had to target their activities at the consumer’s Member State etc.: CJEU Peil and Reliantco are good pointers, as are Ramona Ang and Khalifeh v Blom Bank. Whether Celsius are domiciled in the EU is of no consequence for the consumer section to be engaged. At the jurisdictional level, the choice of court clause would have no consequence (A19 BIa), and the consumer would be able to sue Celsius either in the consumer’s EU domicile, or in Celsius’ EU domicile if it has one. Celsius would only be able to sue in the consumer’s domicile. Articles 33-34 BIa lis pendens rules would not be engaged.

At the applicable law level, the choice for New York law would stand, however mandatory law of the consumer’s habitual residence (which would include transposition of EU consumer law) would trump any conflicting provisions (A6(1) and (2) Rome I).

Re: B2B or indeed a B2C contract which does not trigger the consumer section, the picture would be quite different. Here, whether Celsius as contracting partner has a domicile in the EU, does matter.

If there is such domicile, then at the level of jurisdiction, the EU based party is likely to seize the A4 domicile court, potentially also seeking out a forum contractus if the currency services were to be provided elsewhere than in the place of Celsius’ domicile. That is where Celsius, had it seized an ex-EU court first, then might seek application of A33-34. For this it may come to regret having included hybrid choice of court: recital 24(2)’s reference to the ex-EU court having exclusive jurisdiction arguably does not apply to hybrid choice of court.

Were Celsius to sue the other party in an EU court first (taking ‘any applicable jurisdiction’ at its face value and understanding it as including EU courts), the other party is likely to raise the invalidity of the hybrid choice of court. This is where BIa knickers will get into their proverbial twist: for recital 20’s lex fori prorogati’s instruction as lex casae for the validity of the clause, only refers to ‘a court or courts of a Member State’. Celsius could of course chose to ignore choice of court (implicitly accepting its invalidity) and seize the A4 court of the EU counterparty.

At the level of applicable law, choice for New York law will in any case stand in this scenario, with however A3(4) Rome I’s rule for ‘purely EU’ contracts kicking in, and potentially Article 9 Rome I’s lois de police.

If there is no EU Celsius domicile, Celsius is unlikely to sue in the EU (for it risks having an EU court apply EU banking, finance etc law as mandatory law) however if it does, it would either do so on the basis of A4 domicile jurisdiction, or invoking, as above, the ‘any applicable jurisdiction’ instruction in the hybrid choice of court. Only A9 Rome I could then marginally upset choice of NY law.

Finally, assuming Celsius were to sue the consumer outside the EU, and were to seek enforcement of the judgment in an EU Member State, this would engage the Member States’ residual rules on recognition and enforcement.

Quite a set of variables in the end, and I would be much happy to hear others’ thoughts.

Marking me will look out for core B2B /B2C and domicile considerations.

Geert.

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Suez Water NY v Dupont, Chemours: PFAS /PFOAs forever chemicals jurisdiction, a good primer on general, specific jurisdiction in the States.

I tweeted on the case at the time I think and now bumped into it as per ‘too many open browser windows -syndrom’ ;-): Liman J’s January’s judgment in Suez Water New York v Dupont, Chemours et al serves as a good primer (Legally Blonde a strong second) to explain general (where the defendant is ‘at home’) and specific (based on the defendant’s contacts with the State) personal (as opposed to subject-matter) jurisdiction.

In the US (with slight variations in federal and State approaches), general personal jurisdiction over the defendant arises either because of its continuous and systematic business affiliations with the state (indisputably established in case of domicile in the State) or, in the case of foreign corporations (incl in the business and human rights context) where its activities make it ‘essentially at home’ in the State (Daimler v Bauman). Specific personal jurisdiction, aka ‘long arm’ jurisdiction, exercised against those ‘not at home’ in the State, requires contact with the State, typically through the (attempted) sale or supply of goods or services, the commitment of a wrongful act (tort) or Moçambique-type matters such as transactions involving real estate in the State.

In the case at issue, the judge concludes that claimant, who is seeking to recover the water remediation costs of PFAS, ‘forever chemicals’ pollution,  has made the requisite prima facie showing of personal jurisdiction over the original manufacturers (ia of ‘Teflon’ non-sticky pans) albeit just barely, accepting a prima facie link between those defendants’ marketing activities  in New York and the contamination. However the judge does not prima facie accept jurisdiction over the successor corporations, holding that under New York law, successor jurisdiction is appropriate only where a predecessor and successor remain one and the same after some corporate-restructuring event. If this trend continues, it would be a vindication for escaping environmental liabilities by the use of special purpose vehicles, including corporate restructuring.

The case in the end faltered on the basis of vagueness in the claim however I understand this can be remedied (and may have been done so on the meantime). Other courts will have different approaches and unfortunately the length of the judgment (which also discusses eg public nuisance claims) illustrates  the industry will battle liability to the end. Another sad, sad case-study for the late lessons from early warnings collection.

Geert.

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Guistra v Twitter. The BC Supreme Court on suing Twitter for libel in Canada, and rejecting forum non with enforcement elephants in the room.

A post I started writing on 14 December 2021 so it’s about time I’ld finish it. In  Guistra v Twitter 2021 BCCA 466 (the case echoes Haaretz in Ontario) the Supreme Court of British Columbia with  Grauer J delivering the unanimous opinion, upheld jurisdiction for the BC courts on the basis of the claim pointing to a tort having been committed in BC, BC therefore being locus delicti commissi. The Court held that damage in the jurisdiction, locus damni, needs then not separately be argued.

Mr. Giustra, a British Columbia resident, alleges that Twitter published tweets that defamed him in British Columbia, as well as elsewhere.  Twitter asserts nota bene that, in law, it cannot properly be considered a “publisher” of tweets that were authored and posted on its platform by its users. That issue is deferred for the merits of the claim: at the jurisdiction level, the pleading is what is important: compare with the situation under Brussels Ia.

A forum non conveniens challenge in favour of the courts at California was rejected, where reference was made ia to Google v Equustek. There is an elephant in the room here, so identified, namely that a claim in California is doomed to fail on free speech grounds, and that an eventual Canadian judgment is doomed to be unenforceable at least in the US.

A good judgment for comparative purposes.

Geert.

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Royal Carribean v Browitt. On agency, consumer consent and choice of court Down Under.

Royal Caribbean Cruises Ltd v Browitt [2021] FCA 653 is a great addition to the comparative conflicts binder, particularly from the angle of ‘consent’ in business to consumer contracts. It also engages a classic tripartite relation between the consumer, signing a contract with a travel agent, whose GTCS in turn incorporate the GTCS of the carrier.

The case follows on from the December 2019 volcanic eruption at Whakaari.  (Mrs Browitt), for herself and as representative of the deceased estates of her late husband Paul and late daughter Krystal, and Stephanie (Ms Browitt), a daughter who survived the eruption with horrific injuries, are suing Royal Caribbean Cruises Ltd (RCCL), a Liberian registered company headquartered and operating in Miami, Florida, in the courts at Miami. There are applicable law and procedural advantages (incl discovery and trial (both on culpability and level of damages) by jury).

RCL Cruises Ltd (RCL) and RCCL apply for anti-suit in the FCA arguing that the Browitts were passengers on the Ovation of the Seas pursuant to a contract of carriage between the Browitts and RCL as the disponent owner and operator of the vessel. They seek a declaration that it was a term of the contract, signed at Flight Centre in Victoria, Australia, that any disputes between the parties would be subject to the exclusive jurisdiction of the courts of New South Wales.

The list of issues to be determined is long but I repeat it here anyways for they highlight the complexity of issues following a routine purchase of a cruise:

(1)    Was Flight Centre the agent of Mrs Browitt, RCL or both?

(2)    Were the RCL AU terms, including the exclusive jurisdiction clause, incorporated into the contract of carriage by: (a)    reference in the Flight Centre terms and conditions signed by Mrs Browitt on 14 February 2019? (b)    the text of a Royal Caribbean brochure? (c)    links on the RCL AU website? (d)    links in emails? (e)    links in the electronic guestbook?

(3)    As to the construction of the RCL AU terms: (a)    is RCL entitled to invoke the exclusive jurisdiction clause to restrain the Florida proceedings? (b)    is RCCL entitled to rely on the exclusive jurisdiction clause? (c)    did the purchase of insurance exclude the operation of the terms (cl 1)? (The respondents later dropped reliance on the purchase of insurance as excluding the operation of the exclusive jurisdiction clause, so this issue fell away.) (d)    does the contract of carriage apply to shore excursions (cl 25)? If not, does the exclusive jurisdiction clause nonetheless operate to restrain the Florida proceedings? (e)    does the exclusive jurisdiction clause permit a proceeding to be brought in the Federal Court of Australia sitting in New South Wales, and if not, what consequence follows from the commencement of this proceeding (cl 1, cl 37/38)? (f)    does the exclusive jurisdiction clause cover the Florida proceeding?

(4)    Is RCCL entitled to relief on the basis of the RCL AU terms?

(5)    Is the Florida proceeding vexatious and oppressive such that RCL and RCCL are entitled to an anti-suit injunction?

The judge held that although the Browitts were bound by the RCL AU terms, the Florida proceeding is not in breach of the exclusive jurisdiction agreement in those terms because RCCL is not a party to the agreement and RCCL does not enjoy the benefit of it. Also, there is no basis for the alternative case that the Florida proceeding is in any event vexatious and oppressive such as to justify an order restraining Mrs Browitt and Ms Browitt from pursuing it.

Terms and conditions were available on relevant websites and brochures, shown to and browsed by Mrs Browitt but not for the purposes of terms and conditions. Rather, as one would expect, for details of the journey, vessels etc. Unlike a quote, the eventual invoice included as part of the document three pages of booking terms and conditions. Some of those were highlighted in the copy made available to Mrs Browitt  Mrs Browitt could have read the GTCS but there was no inidcation she had or had been specifically pointed to them. Nothing in either version of the invoice, i.e., that which was printed for and signed by Mrs Browitt and that which was emailed by the agency, identifies which of RCCL and RCL was offering the cruise or operating the vessel.

The judgment, which I would invite readers to consult, eventually boils down to limitations of ‘agency’, privity of contract, and clear determination of contractual clauses. It does not decide for the Browitts on the basis of a particular concern for the weaker party in a classic B2C transaction, rather on the need for parties clearly to think through their spaghetti bowl of overlapping arrangements and GTCs when hoping to rely on them in court.

Geert.

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Roark v Bridgestone, Shandong et al. Contract fine-print and regulatory compliance determines minimum contacts in Washington.

A short post for comparative conflicts purposes. Readers might be aware of the minimum contacts rule in US jurisdictional analysis.  Rice J excellently summarises the issues in his order denying a strike-out application (‘motion to dismiss’) on the basis of lack of jurisdiction.

‘Under the Due Process Clause, a court may exercise personal jurisdiction over a defendant only where “the defendant ha[s] certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” [Picot v. Weston, 9th Cir. 2015) (quoting Int’l Shoe Co. v. Wash., [1945])….

Personal jurisdiction over a non-resident defendant may take two forms:
general jurisdiction or specific jurisdiction. General jurisdiction requires connections with the forum “so continuous and systematic as to render the foreign corporation essentially at home in the forum State (Ranza). Specific jurisdiction, by contrast, may only be exercised “when a case aris[es] out of or relate[s] to the defendant’s contacts with the forum.”

Shandong essentially argue that they are kept at arm’s length from US jurisdiction because they are not the one importing the tires into the US: a separate corporation imported, a third distributed. The judge however (in the process dismissing Shandong’s assertion that the goods were shipped FOB – Free on Board), found that Shandong delivered tires into the stream of commerce, was involved, in consequence of its contractual duties, in shipping the tires to Washington ports, and has taken steps for creating tires compliant with state and federal law to arrive in Washington pursuant to the supply agreement.  This echoes the EU jargon of ‘directing activities at’ the state of Washington.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.460, para 4.48 ff.

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RCT Holdings v LT Game. Supreme Court of Queensland sees no reason to frustrate choice of court pro Macau even in times of Covid19..

Update 3 December 2020 see Sarah McKibbin meanwhile for further background here.

Thank you Angus Macinnis for flagging RCD Holdings Ltd & Anor v LT Game International (Australia) Ltd [2020] QSC 318 in which  Davis J upheld choice of court in favour of the courts at Macau and held against a stay. The judgment is a good one for comparative purposes.

Claimants, ePayment Solutions Pty Ltd (EPS) and RCD Holdings Ltd (RCD), in their contract with the defendant, LT Game International (Australia) Ltd (LT) (a BVI domiciled company), agreed that any dispute between them would be litigated in Macau. However, when a dispute did arise they commenced proceedings in Queensland. LT entered a conditional appearance and now applies to strike out the claim, or alternatively, to have it stayed as being commenced in this court contrary to the contract.

Article 10 of the contract carries the title Governing law but actually is a choice of court clause – an oddity one sees more often than one might expect in B2B contracts: ‘Any dispute or issue arising hereunder, including any alleged breach by any party, shall be heard, determined and resolved by an action commenced in Macau. The English language will be used in all documents.”

Comparative insight includes the issue of whether A10 us a non-exclusive (an agreement not to object when proceedings are brought in the court designated) or exclusive (an agreement only to bring proceedings in the court designated) choice of court. Davis J settled for exclusive which would also seem to have been the position of both parties, despite some ambiguity at the start of proceedings.

Lex contractus is disputed, and at 27 Davis J settles for Macanese law, based upon factual construct of the contractual intention of the parties. Clearly that choice of court was made for Macau was an important factor – as it is in Rome I for consideration of so-called ‘implied’ choice of law in the event of choice of court made.

A stay on the basis of Covid19 impracticability (ia because of alleged difficulties for witness testimony) is dismissed, ia (at 34) because it is uncertain whether current travel restrictions will still be in place when the case in Macau might be heard. Davis j does suggest that a renewed application for a stay must not be ruled out in light of Covid19 developments, however will be seen against abuse of process: in other words claimants had best not do so lightly.

Geert.

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Bauer v QBE Insurance. Brussels IA, Rome I and Rome II in Western Australia.

It is not per se unheard of for European conflict of laws developments to be referred to in other jurisdictions. In Bauer v QBE Insurance [2020] WADC 104 however the intensity of reference to CJEU authority and EU conflicts law is striking and I think interesting to report.

The context is an application to serve out of jurisdiction – no ‘mini trail’ (Melville PR at 20) therefore but still a consideration of whether Western Australia is ‘clearly an inappropriate forum’ in a case relating to an accident in Australia following an Australian holiday contract, agreed between a German travel agent and a claimant resident (see also below) in Germany but also often present in Australia – which is where she was at the time the contract was formed. Defendant contests permission to serve ia on the basis of an (arguable) choice of court and governing law clause referring exclusively to Germany and contained in defendant’s general terms and conditions.

Two other defendants are domiciled in Australia and are not discussed in current findings.

In assessing whether the German courts have exclusive jurisdiction and would apply German law, the Australian judge looks exclusively through a German lens: what would a German court hold, on the basis of EU private international law.

Discussion first turns to the lex contractus and the habitual residence, or not, of claimant (who concedes she is ‘ordinarily’, but not habitually resident in Germany) with reference to Article 6 Rome I’s provision for consumer contracts. This is applicable presumably despite the carve-out for ‘contracts of carriage’ (on which see Weco Projects), seeing as the contract is one of ‘package travel’. Reference is also then made to Winrow v Hemphill.  Melville PR holds that claimant’s habitual residence is indeed Germany particularly seeing as (at 38)

she returned to Germany for what appears to be significant and prolonged  treatment after the accident rather going elsewhere in the world and after only apparently having left her employment in Munich in 2014, is highly indicative of the fact the plaintiff’s state of mind was such that she saw Germany as her home and the place to return to when things get tough, a place to go to by force of habit.

Discussion then turns to what Michiel Poesen has recently discussed viz contracts of employment: qualification problems between contract and tort. No detail of the accident is given (see my remark re ‘mini-trial’ above). Reference to and discussion is of Rome II’s Article 4. It leads to the cautious (again: this is an interlocutory judgment) conclusion that even though the tort per Article 4(3) Rome II may be more closely connected to Australia, it is not ‘manifestly’ so.

Next the discussion gets a bit muddled. Turning to jurisdiction, it is concluded that the exclusive choice of court is not valid per Article 25 Brussels Ia’s reference to the lex fori prorogati.

  • Odd is first that under the lex contractus discussion, reference is made to Article 6 Rome I which as I suggested above presumably applies given that the carve-out for contracts of carriage does not apply to what I presume to be package travel. However in the Brussels Ia discussion the same applies: contracts of carriage are excluded from Section 4’s ‘consumer contracts’ unless they concern (as here) package travel.
  • Next, the choice of court is held to be invalid by reference to section 38(3) of the German CPR, which to my knowledge concerns choice of court in the event neither party has ‘Gerichtsstand’ (a place of jurisdiction’) in Germany.  Whatever the precise meaning of s38(3), I would have thought it has no calling as lex fori prorogati viz A25 BIa for it deals with conditions which A25 itself exhaustively harmonises (this argument might be aligned with that of defendant’s expert, Dr Kobras, at 57). Moreover,  the discussion here looks like it employs circular reasoning: in holding on the validity of a ‘Gerichtsstand’, the court employs a rule which applies when there is no such ‘Gerichtsstand’.
  • Finally, references to CJEU Owusu and Taser are held to be immaterial.

In final conclusion, Western Australia is not held to be a clearly inappropriate forum. The case can go ahead lest of course these findings are appealed.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2.

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On the nature of private international law. Applying islamic law in the European Court of Human Rights.

Update 13 July 2020 see for an illustration of the issues, Matthians Lehmann here, on the classification by German judges of the mahr, akin to a dowry – with consideration (and eventually side-stepping of all) of the Rome I, III, and the maintenance and matriomonial property Regulations. The Court’s analysis feels like ten little monkeys bouncing on a bed: one by one the Rome I, Maintenance, Matrimonial property, Rome III Regulations are considered yet cast aside. See also Jan Jakob Bornheim’s reference here to Almarzooqi v Salih, [2020] NZHC 1049, where the New Zealand High Court assumed that the mahr was a contractual promise without much consideration of the characterisation issue. And Mukarrum Ahmed, who commented ‘in England, the leading case on the characterisation of mahr is Shahnaz v Rizwan. The wife’s claim was treated as a contractual obligation.’ [GAVC, that’s Shahnaz v Rizwan [1965] 1 QB 390].

Anyone planning a conflict of laws course in the next term might well consider the succinct Council of Europe report on the application of islamic law in the context of the European Convention on Human Rights – particularly the case-law of the Court. It discusses ia kafala, recognition of marriage, minimum age to marry, and the attitude towards Shari’a as a legal and political system.

Needless to say, ordre public features, as does the foundation of conflict of laws: respect for each others’ cultures.

Geert.

 

 

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Indigenous rights and qualification under conflict of laws. Newfoundland and Labrador v Uashaunnuat (Canada) and Love v Commonwealth (Australia).

Fasken alerted me to, and have good review of Newfoundland and Labrador (Attorney General) v Uashaunnuat (Innu of Uashat and of Mani‑Utenam) 2020 SCC 4. The Canadian Supreme Court held that Quebec has jurisdiction over aboriginal rights claims in a neighburing province. This assertion of jurisdiction hinges on the qualification of rights under section 35 of the Constitution Act, 1982 (the section which deals with aboriginal and treaty rights) as rights sui generis. A qualification as rights in rem erga omnes, as the dissenting opinion suggested, would have kept the case outside of Quebec jurisdictional reach.

The case came a week after the decision of the High Court of Australia in Love v Commonwealth[2020] HCA 3 which as Michael Douglas analyses here, is a case about personal status and whether an aboriginal may be considered an ‘alien’ for immigration purposes. Judges split as to the required approach to the issue.

Indigenous rights and conflict of laws for sure will continue to exercise one or two minds (ia in view of the UNSDGs) and these two cases seem to anchor a number of issues. Not something a short blog post can do justice to.

Geert.

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