Anglo American: The Court of Appeal on ‘Central Administration’ in Brussels-I

In Anglo-American South Africa, the Court of Appeal held mid July on the application of the definition of corporate ‘domicile’ in the Brussels I-Regulation. Specific context was the use of the English courts under the Brussels I Regulation, by a Botswana-born plaintiff, against a South Africa incorporated company, part of the Anglo-American PLC group of companies. Anglo-American itself are incorporated in England, hence a case against them would have been straightforward (under Article 2 of the Regulation) however would not have had any merit: there was no suggestion that Anglo-American were in any way at fault for the behaviour of one of the employees of one of their corporate affiliates.

For a company, legal person or association of natural persons, Article 60 of the Regulation (in contrast with the provision for natural persons, which refers to national conflicts law to determine the concept) aims to encourage harmonisation by listing three possible locations only, for the determination of corporate domicile: statutory seat (a term not known in English or Irish law: hence Article 60(2) refers to registered office or place of incorporation; central administration; and principal place of business.

Evidently this troika of criteria does not rule out positive jurisdiction conflicts – it does help address negative ones (ie where no court claims jurisdiction).

It was for the Court of Appeal to decide whether under the rules of the Brussels I-Regulation, AASA could be found to have their central administration in England (place of incorporation and principal place of business not having any calling). Justifiable reference was made to the fact that the concept needs to be given an EU (‘autonomous’) meaning. ECJ case-law on the exact issue is however, non-existent (reference in the judgment was made to Daily Mail, ECJ case-law on the freedom of establishment, and to relevant German case-law).

Aikens LJ essentially agreed with the analysis in first instance by Smith J, that ‘the correct interpretation of “central administration” in Article 60(1)(b), when applied to a company, is that it is the place where the company concerned, through its relevant organs according to its own constitutional provisions, takes the decisions that are essential for that company’s operations. That is, to my mind, the same thing as saying it is the place where the company, through its relevant organs, conducts its entrepreneurial management; for that management must involve making decisions that are essential for that company’s operation’. (at 45).

This is in contrast with (at 39) both place of incorporation, and principal place of business: ‘the first is the domicile for the purpose of the internal laws of the state where the company is incorporated. It will usually be identified in its Memorandum and Articles of Association or equivalent. The third is the place where the company does its principal “business”. Where that is must be a question of fact in each case.

The case is an interesting attempt at forum shopping, with a certain relevance for the corporate social responsibility debate: by suggesting that the place of central administration is the very head of the corporate spider web, plaintiffs can sue directly in Europe. This case shows however that such suggestion is not easily substantiated. Neither would it necessarily assist much at the applicable law stage.

Geert.

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

InĀ  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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