Posts Tagged consumers
Salvoni v Fiermonte. CJEU confirms quasi-notarial nature of Brussels Ia’s Article 53 certificate, other than for provisional measures. Consumer protection cannot be raised at that stage. Also rejects interpretative force of substantive consumer law rules for jurisdictional issues.
I reviewed Bobek AG Opinion in Case C-347/18 Salvoni v Fiermonte earlier. The referring court enquires whether the court of origin tasked with issuing the Article 53 Certificate (issued with a view to enabling swift recognition and enforcement) may, of its own motion, seek to ascertain whether the judgment whose enforcement is sought was issued in breach of the rules on jurisdiction over consumer contracts, so that it may, where appropriate, inform the consumer of any such breach and enable her to consider the possibility of opposing enforcement of the judgment in the Member State addressed.
The CJEU has entirely confirmed the AG’s Opinion (no English version at the time of posting): no such second-guessing of jurisdiction.
At 34 ff the Court points out an important distinction with certificates issued with a view to enforcing provisional measures: there, the court issuing the certificate does carry out jurisdictional review (whether the court ordering the measures has jurisdiction as to the substance of the case).
At 40 ff the Court also confirms that substantive consumer protection laws (such as Directive 93/13) do not transfer to the procedural /jurisdictional rules of Brussels Ia: an important conclusion overall.
(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52, Heading 2.2.16.
Merinson v Yukos: Dutch settlement following employment contract. Appeal denied. England has full jurisdiction as domicile of the defendant.
In  EWCA Civ 830 the Court of Appeal has dismissed the appeal against Yukos v Merinson which I reviewed here – review which readers may need to appreciate the judgment. Three issues were considered by Gross LJ at the Court of Appeal:
1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s answer at the High Court was YES. I suggested in my review that that finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here. Both Salter DJ and Gross LJ (at 27 ff) were persuaded however by the highly material nexus between the annulment claims – whether considered together with or separately form the damages claims (Gross LJ distinguished Aspen Underwriting in the process).
2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Salter DJ’s answer was negative, on the basis of extensive reference to the Jenard Report and Convention and Regulation scholarship. Gross LJ agrees – I continue to find that conclusion unconvincing.
3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>Here the Court of Appeal made the High Court’s reasoning its own, much more succinctly than its entertaining of the other questions.
Plenty to discuss here for the 3rd ed of the Handbook.
Bobek AG Opined early May (excuse posting delay) in Case C-347/18 Salvoni v Fiermonte. The referring court enquires whether the court of origin tasked with issuing the Article 53 Certificate (issued with a view to enabling swift recognition and enforcement) may, of its own motion, seek to ascertain whether the judgment whose enforcement is sought was issued in breach of the rules on jurisdiction over consumer contracts, so that it may, where appropriate, inform the consumer of any such breach and enable her to consider the possibility of opposing enforcement of the judgment in the Member State addressed.
A related issue therefore to the CJEU judgment in Weil last week.
Mr Alessandro Salvoni, a lawyer based in Milan, asked the Tribunale di Milano (District Court, Milan) to issue Ms Anna Maria Fiermonte (who resides in Hamburg) with a payment order for an amount owed to him as consideration for the professional services rendered by him in connection with legal proceedings concerning a will. Payment order was granted, no challenge was made by Ms Fiermonte (at 24 the AG emphasises that evidently, the court needs to check whether proper service was made). Mr Salvoni then requested the same court to issue the Article 53 Certificate with respect to that order. However this time the same court (with the AG at 22 one can assume that composition was different) proprio motu (and belatedly: see at 15) classified the relationship as B2C under the relevant provisions of Brussels Ia. Ms Fiermonte should have been sued in Hamburg.
Bobek AG courteously calls the court’s initiative ingenious and well-intended (at 29) but has no choice but to conclude that the Regulation simply has no tool for the Court somehow to mitigate let alone correct its earlier mistake. In a gesture effectively of public service (at 34; this rescues something useful from the otherwise fairly futile exercise; I doubt the CJEU will do something similar), the AG then rephrases the question into a more general one, which is detached from the specific course of action apparently contemplated by the national court: Is a national court, when issuing the Article 53 Certificate, entitled (or even obliged), under EU law, to ascertain whether the judicial decision that is to be certified was issued in breach of the rules on jurisdiction over consumer contracts?
At 44 ff the AG delightfully side-steps the chicken and hen issue of the C-54/96 Dorsch criteria (is an A53 court a ‘court’ entitled to preliminary review under Article 267 TFEU) and eventually concludes that there is no room for the A53 Court to assess the application of the consumer title. At 54: ‘
The interpretation of [A53] proposed by the referring court cannot easily be reconciled with the above considerations [speed; simplicity: GAVC]. In particular, that interpretation would in effect back-pedal on one of the main features of the new system introduced by Regulation No 1215/2012. Indeed, the checks that were previously made in the Member State addressed when issuing the exequatur would not be eliminated, but merely shifted to the certification stage carried out in the Member State of origin. That reading of the provision would thus run against the logic and spirit of Regulation No 1215/2012.’
At 81 and 82 the likely outcome of course is pointed at by the AG: Article 45(1)(e)(i) and Article 46 BIa grant consumers a special ground of refusal of recognition and enforcement in cases where the judgment in question conflicts with the jurisdictional rules for the protected categories. This ground has now been handed Ms Fiermonte on a plate – leaving the Milan courts with red cheeks.
(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 184.108.40.206, Heading 2.2.16.
Yukos v Merinson: A Brussels I jurisdictional bonanza. Particularly the issue of ‘after the issue has arisen’ for protected categories.
I have been posting a series of comments in recent weeks, with more on the way, on cases that caught my attention pre-exam period. They were all candidates for exam questions except much as I would want to, I can only subject my students to that many developments in conflict of laws. Another one in this series of ‘overdue’ postings:  EWHC 335 (Comm) Yukos v Merinson.
From Salter DJ’s summary of the facts: (excuse their length – this is rather necessary to appreciate the decision)
_____________The defendant was employed by the first claimant under a contract of employment governed by Dutch law. Various proceedings were commenced before the Dutch courts by the defendant and entities within the claimant group in relation to the defendant’s employment. The parties reached terms of settlement of those proceedings, which were embodied in a settlement agreement executed by the parties and subject to the exclusive jurisdiction of the Dutch courts. The settlement agreement was in turn approved by the Dutch courts, with the effect that it became a “court settlement” within the meaning of article 2 of Brussels I Recast. Subsequently, upon certain additional facts as to the defendant’s conduct being learnt by the claimants, they brought a claim against the defendant in England, where the defendant was then domiciled, seeking damages for losses allegedly suffered as a result of the defendant’s breach of duties under his employment contract (“the damages claims”) and a declaration that the settlement agreement did not bar the damages claims, alternatively an order that the settlement agreement should be annulled under Dutch law on the grounds of error and/or fraud (“the annulment claims”). The defendant applied for a declaration that the courts of England and Wales had no jurisdiction to try the claims brought and an order that the claim form be set aside, on the grounds that all of the claims fell within the settlement agreement conferring exclusive jurisdiction on the Dutch courts, which therefore had exclusive jurisdiction by operation of Article 25 Brussels I Recast, and (1) in respect of the annulment claims, Article 25 could not be overridden by Articles 20(1) and 22(1) requiring proceedings to be brought in the courts of the state of the defendant’s domicile at the time of issue of the claim form, since those claims were not “matters relating to [an] individual contract of employment” within the meaning of Article 20(1); (2) in respect of all claims, Article 23(1) allowed the rule in Articles 20(1) and 22(1) to be departed from, since the settlement agreement had been entered into after the dispute had arisen; and (3) the settlement agreement being a juridical act of the Dutch courts, the English courts were precluded by Article 52 from reviewing its substance in respect of the annulment claims and, the settlement agreement also being a court settlement, the English courts were required by Articles 58 and 59 to recognise and enforce it unless it was manifestly contrary to public policy._______________
All in all, plenty of issues here, and as Salter DJ was correctly reassured by counsel for the various parties, not any that the CJEU has had the opportunity to rule on. Four issues were considered:
1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s Answer: 25 ff: YES. His main argument: the Settlement Agreement set out the terms on which Mr Merinson’s contract of employment came to an end. In so doing, it also varied the terms of that contract of employment. The terms of the Settlement Agreement now form part of the contractual terms on which Mr Merinson was employed, and which govern the rights and liabilities arising out of the employment relationship between him and the Yukos Group. In my view this finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here.
2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Answer (on the basis of extensive reference to Brussels Convention and Regulation scholarship): a dispute will have “arisen” for the purposes of these Articles only if two conditions are satisfied: (a) the parties must have disagreed upon a specific point; and (b) legal proceedings in relation to that disagreement must be imminent or contemplated. Salter DJ correctly emphasises the protective policy which underlies these provisions, however I am not confident he takes that to the right conclusion. Common view on the protective regime is that when parties have had the privilege of legal advice, they can be assumed to have been properly informed: the position of relative weakness falls away.
3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>The issue of court settlements was specifically considered in the Brussels Convention, and the Jenard Report, given their importance in Dutch and German practice. In C-414/92 Solo Kleinmotoren the CJEU (at 17) held ‘to be classified as a “judgment” within the meaning of the Convention, the act must be that of the court belonging to a Contracting State and ruling on its own authority on points in dispute between the parties.’: considering Dutch expert evidence on the issue, the decision here is that despite the limited authority under Title III Brussels I Recast for other Courts to refuse to recognise a court settlement (ordre public in essence), it is not a ‘judgment’. Salter DJ concludes on this point that normal jurisdictional rules to challenge the settlement apply. At 81 he suggests, provisionally, that ‘it would nevertheless be open to this court in those circumstances to case manage the enforcement application and the set-aside action, so that they are dealt with together, the result of the action determining the enforcement application. Fortunately, I am not required to wrestle with those practical complexities in order to determine the present application, and I make no decision one way or another on any of these matters. There is no application before me to enforce the Dutch Court Settlement, merely an application for a declaration that the court “has no jurisdiction to try the Claimants’ claims”.‘
This insight into the case-management side of things, however, does highlight the fact that the findings on the jurisdiction /enforcement interface appear counterintuitive. Particularly in cases where the English courts would not have jurisdiction viz the settlement, but would be asked to enforce it – which they can only refuse on ordre public grounds, the solution reached would not work out at all in practice.
4. And finally what are the consequences, as regards jurisdiction, of the decisions on the first three of these issues?>>>Held: the English court, as the court of the Member State in which Mr Merinson was domiciled at the date this action was commenced, has jurisdiction in relation to all of the claims made in the present action.
There is much more to be said on each of the arguments – but I must not turn the blog into a second Handbook, I suppose.
Postscript 16 May 2018 Tanya Monestier article re same here.
Thank you Stephen Pittel for flagging 2017 SCC 33 Douez v Facebook Inc. Stephen also discusses the forum non conveniens issue and I shall leave that side of the debate over to him. What is interesting for comparative purposes is the Supreme Court’s analysis of the choice of court clause in consumer contracts, which it refuses to enforce under public policy reasons, tied to two particular angles:
- ‘The burdens of forum selection clauses on consumers and their ability to access the court system range from added costs, logistical impediments and delays, to deterrent psychological effects. When online consumer contracts of adhesion contain terms that unduly impede the ability of consumers to vindicate their rights in domestic courts, particularly their quasi-constitutional or constitutional rights, public policy concerns outweigh those favouring enforceability of a forum selection clause.’ (emphasis added)
Infringement of privacy is considered such quasi-constitutional right.
- ‘Tied to the public policy concerns is the “grossly uneven bargaining power” of the parties. Facebook is a multi-national corporation which operates in dozens of countries. D is a private citizen who had no input into the terms of the contract and, in reality, no meaningful choice as to whether to accept them given Facebook’s undisputed indispensability to online conversations.’
With both angles having to apply cumulatively, consumers are effectively invited to dress up their suits as involving a quasi-constitutional issue, even if all they really want is their PSP to be exchanged, so to speak. I suspect however Canadian courts will have means of sorting the pretended privacy suits from the real ones.
A great judgment for the comparative binder (see also Jutta Gangsted and mine paper on forum laboris in the EU and the US here).
C-191/15 Verein für Konsumenteninformation v Amazon SarL is one of those spaghetti bowl cases, with plenty of secondary law having a say on the outcome. In the EU purchasing from Amazon (on whichever of its extensions) generally implies contracting with the Luxembourg company (Amazon EU) and agreeing to Luxembourg law as applicable law. Amazon has no registered office or establishment in Austria. VKI is a consumer organisation which acted on behalf of Austrian consumers, seeking an injunction prohibiting terms in Amazon’s GTCs (general terms and conditions), specifically those which did not comply with Austrian data protection law and which identified Luxembourg law as applicable law.
Rather than untangle the bowl for you here myself, I am happy to refer to masterchef Lorna Woods who can take you through the Court’s decision (with plenty of reference to Saugmandsgaard Øe’s Opinion of early June). After readers have consulted Lorna’s piece, let me point out that digital economy and applicable EU law is fast becoming a quagmire. Those among you who read Dutch can read a piece of mine on it here. Depending on whether one deals with customs legislation, data protection, or intellectual property, different triggers apply. And even in a pure data protection context, as prof Woods points out, there now seems to be a different trigger depending on whether one looks intra-EU (Weltimmo; Amazon) or extra-EU (Google Spain).
The divide between the many issues addressed by the Advocate General and the more narrow analysis by the CJEU, undoubtedly indeed announces further referral.
(Handbook of) European Private International Law, 2016, Chapter 2, Heading 220.127.116.11.5.