Posts Tagged Curia
Nori Holdings: High Court holds that West Tankers is still good authority even following Brussels I Recast. (Told you so).
In  EWHC 1343 (Comm) Nori Holdings v Otkritie Males J follows exactly the same line as mine in commenting on West Tankers – specifically the bodged attempt in Brussels I Recast to accommodate the concerns over West Tankers’ sailing the Brussels I ship way too far into arbitral shores.
For my general discussion of the issues see here. A timeline:
- When the Council came up with its first draft of what became more or less verbatim the infamous recital 12 I was not enthusiastic.
- When Wathelet AG in his Opinion in Gazprom suggested recital 12 did overturn West Tankers, I was not convinced. (Most of those supporting this view read much into recital 12 first para’s instruction that the Regulation does not impede courts’ power ‘from referring the parties to arbitration’).
- Indeed the CJEU’s judgment in Gazprom did not commit itself either way (seeing as it did not entertain the new Regulation).
- Cooke J was on the right track in Toyota v Prolat: in his view the Recast did not change West Tankers.
- Males J confirms: West Tankers is still good authority. At 69 ff he does not just point out that Wathelet was not followed by the Court. 92 ff he adds five more reasons not to follow the suggestion that West Tankers has been overruled. He concludes ‘that there is nothing in the Recast Regulation to cast doubt on the continuing validity of the decision in West Tankers (Case C-185/07)  AC 1138 which remains an authoritative statement of EU law’.
(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 184.108.40.206.2.
Espírito Santo (in liquidation): CJEU on vis attractive concursus in the event of pending lawsuits (lex fori processus).
The title of this piece almost reads like an encyclical. C-250/17 Esprito Santo (in full: Virgílio Tarragó da Silveira Massa v Insolvente da Espírito Santo Financial GroupSA – readers will appreciate my suggestion of shortening), held last week, concerns the scope of Article 15 juncto 4(2)(f) of the EU’s Insolvency Regulation 1346/2000 (materially unchanged in Regulation 2015/848).
In many jurisdictions lawsuits pending are subject to vis attractiva concursus: all suits pending or not, relevant to the estate of the insolvent company are centralised within one and the same court. In the context of cross-border insolvency however this would deprive the courts and the law of the Member State other than the State of opening of proceedings, of hearing cq applying to, pending suits.
The Court has now held along the lines what is suggested in the Virgos-Schmit report: only enforcement actions are subject to Article 15. Lawsuits pending which merely aim to establish the merits of a claim without actually exercising it (in the judgment: ‘Substantive proceedings for the recognition of the existence of a debt’), remain subject to the ongoing proceedings in the other Member State.
The judgment evidently has more detail but this is the gist of it. Of note is that yet again, linguistic analysis assists the court in its reasoning.
(Handbook of) EU Private International, 2nd ed. 2016, Chapter 5.
Choices, choices. I will continue to follow the GDPR for jurisdictional purposes, including territorial scope. (And I have a paper coming up on conflict of laws issues in the private enforcement of same). But for much of the GDPR enforcement debate, I am handing over to others. Johannes Marosi, for instance, who reviews the CJEU judgment this week in Fansites, over at Verfassungsblog. I reviewed the AG’s Opinion here.
Judgment in Grand Chamber but with small room for cheering.
As Johannes’ post explains, there are many loose ends in the judgment, and little reference to the GDPR (technically correct but from a compliance point of view wanting). (As an aside: have a look at Merlin Gömann’s paper, in CMLREv, on the territorial scope of the GDPR).
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 220.127.116.11.5.
E.ON v Dědouch. Squeeze-outs and the not-so restrictive application of Brussel I Recast’s corporate exception.
I promised a post on C-560/16 E.ON v Dědouch sooner than I have been able to deliver – I have reviewed Wathelet AG’s Opinion here. I do not evidently hold the magic key to the optimal interpretation of Article 24(2) Brussels I Recast’s. Yet regular readers of the blog indeed my students will know I am not much of a fan of Article 24 full stop – let alone its extensive interpretation.
Briefly, the facts. By a resolution of 8 December 2006, the general meeting of the company incorporated under Czech law, Jihočeská plynárenská, established in the Czech Republic, decided on the compulsory transfer of all the participating securities in that company to its principal shareholder E.ON, established in Munich (Germany). A group of minority shareholders contest not the validity of the sale, but purely the price paid. Czech law moreover holds that any finding on the reasonableness of the price paid cannot have an impact on the very validity of the transfer.
Lower Czech courts consecutively entertained and accepted cq rejected jurisdiction on the basis of Article 6(1) [no details are given but presumably with Jihočeská plynárenská as the anchor defendant, 24(2) (but then presumably with , 7(1) [again no details given but presumably a consequence of the purchase of shares by the minority shareholders]. Both Wathelet AG suggests, and the CJEU holds that the action for review of the reasonableness of the consideration that the principal shareholder of a company is required to pay to the minority shareholders of that company in the event of the compulsory transfer of their shares to that principal shareholder, comes within the scope of application of (now) Article 24(2). Both refer extensively to C‑372/07 Hassett and Doherty, among others.
The general line of interpretation is: secure Article 24’s effet utile, but apply restrictively (like all other exceptions to the actor sequitur forum rei rule). I do not think that the CJEU honours restrictive interpretation in E.ON. Readers best consult the (fairly succinct – ditto for the Opinion) judgment in full. A few observations.
In the majority (not quite all) of the cases of exclusive jurisdictional rules, Gleichlauf is part of the intention. That generally is a proposition which goes against the very nature of private international law and should not in my view be encouraged. Particularly within the EU there is not much reason not to trust fellow courts with the application of one’s laws – indeed quite regularly these laws may be better applied by others.
Generally at least three of Article 24 Jurisdictional rules (rights in rem; the corporate exception; and IPR) refer at least in part to the issue of publicity (of public records) and their availability in the Member States whose courts haven been given exclusive jurisdiction. That argument in my view is sooo 1968 (which indeed it is). I see little reason to apply it in 2018.
Further, in accordance with the Jenard report, the principal reason for Article 24(2) is to avoid conflicting decisions of EU courts on the existence of the company or the validity of the decisions of its organs. This goal of course may be equally met by the lis alibi pendens rule – Article 24 does not play a unique role here.
Finally the CJEU remarks at 34 ‘In the present case, while it is true that, under Czech law, proceedings such as those at issue in the main proceedings may not lead formally to a decision which has the effect of invalidating a resolution of the general assembly of a company concerning the compulsory transfer of the minority shareholders’ shares in that company to the majority shareholder, the fact nonetheless remains that, in accordance with the requirements of the autonomous interpretation and uniform application of the provisions of Regulation No 44/2001, the scope of Article 22(2) thereof cannot depend on the choices made in national law by Member States or vary depending on them.’ To cross-refer to the aforementioned Jenard Report: if Article 24(2)’s goal is to avoid conflicting decisions on life and death etc. And if that life and death of a national company depends on the applicable national law as the Court acknowledges here and ditto in Daily Mail and Cartesio/Polbud), then of course the lex causae must have an impact on the application of Article 24(2) .
The Court’s finding on 24(2) meant it did not get to the Article 7 analysis – which I did review in my post on the AG’s Opinion.
(Handbook of) EU Private international law, 2nd ed. 2016. Heading 18.104.22.168.
Jurisdiction re prospectus liability (misrepresentation) before the CJEU again. Bobek AG in Löber v Barclays.
Even Advocate-General Bobek has not managed to turn jurisdictional issues re prospectus liability into the prosaic type of analysis which many of us have become fond of. His Opinion in C-307/17 Löber v Barclays is a lucid, systematic and pedagogic review of the CJEU’s case-law on (now) Article 7(2)’s jurisdiction for tort in the context of ‘prospectus liability’ aka investment misrepresentation. Starting with the direct /indirect damage distinction; and focusing of course on the determination of pure economic loss.
Ms Helga Löber invested in certificates in the form of bearer bonds issued by Barclays Bank Plc. In order to acquire those certificates, the corresponding amounts were transferred from her current (personal) bank account located in Vienna, Austria to two securities accounts in Graz and Salzburg. Payment was then made from those securities accounts for the certificates at issue.
Note immediately that the jurisdictional discussion is a result of Article 7(2) not just identifying a Member State: it identifies specific courts within that Member State. Here: claimant brought her claim before a court in Vienna, the place of her domicile. This is also where her current bank account is located, from which she made the first transfer in order to make the investment. The first- and second-instance courts in Vienna however decided that they did not have jurisdiction to hear the case. The case is now pending before the Oberster Gerichtshof (Supreme Court, Austria). That court is asking, in essence, which of the bank accounts used, if any, is relevant to determine which court has jurisdiction to hear the claim at issue.
Close reference is made to Kolassa. In my posting on that case at the time, I noted that the many factual references which the Court built in in its decision, gave it dubious precedent value. Bobek AG in Löber necessarily therefore distinguishes many factual situations. The almost sole focus lies on 7(2): unlike in Kolassa, contracts neither consumer contracts are an issue.
Here are a few things of note:
First, in his review of the existing case-law the AG at 38 points out like I did at the time of the judgment, that the CJEU’s finding in CDC that locus damni for a pure economic loss, in the case of a corporation, is the place of its registered office, is at odds with precedent (he made the same remark in flyLAL).
Next, on locus delicti commissi, the AG suggests that despite Article 7(2)’s instruction, a single ldc within the Member State cannot be determined. The relevant point in his view is the moment from which the prospectus can, by operation of law, start influencing the investment behaviour of the relevant group of investors. In the present case, and considering the national segmentation of the capital market regulation at issue, that relevant group is made up of investors on secondary markets in Austria. At 65: once it became possible to offer the certificates on the Austrian secondary market, that possibility was immediately available for the whole territory of Austria. ‘The nature of the tort of misrepresentation at issue does not allow for the identification of a location within the national territory because once the author of the tort is allowed to influence the given national territory, that influence immediately covers the whole territory, irrespective of the actual means used for the publication of a specific prospectus.’ As we know from CDC, the Court does not readily accept that a single ldc cannot be determined.
Further, for locus damni, the AG suggests (at 78) ‘The place where…a legally binding investment obligation is factually assumed… The exact location of such a place is a matter for the national law considered in the light of available factual evidence. It is likely to be the premises of a branch of the bank where the respective investment contract was signed, which may correspond, as in the Kolassa case, to the place where the bank account is held.‘ That in my view first of all is not a warranted outcome. The investor in Löber is not a consumer within the protected categories of the Regulation. Suggesting the place of conclusion of the obligation leaves room for the claimant to manipulate the forum of any future suit in tort. This is exactly what the Court objected to in Universal Music. Moreover, note the reference to ‘the national law’. It is quite unusual to suggest such a role for lex fori in light of the principle of autonomous interpretation. Unless the AG in fact means the ‘lex contractus’, presumably to be determined applying Rome I.
In summary there are quite a few open questions here – not something of course which I would necessarily object to.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 22.214.171.124.7
Place of performance of multimodal transport. Tanchev AG in Zurich Insurance seeks support in flightright, and in the CMR and Hamburg rules.
Not just my blog posts on both cases follow each other closely. Tanchev AG in his Opinion in C-88/17 Zurich Insurance v Metso, takes inspiration from the Court’s findings in flightright (which I reported this morning). He emphasises the objective of predictability of the Brussels I Recast Regulation.
The case concerns multimodal transport of goods from one Member State to another. Pursuant to an agreement entered into with a Finnish undertaking, a British haulier undertook to carry goods from Finland to the United Kingdom. After the goods concerned were lost while being transported in the United Kingdom, the Finnish undertaking and the insurer of the goods sued for damages before a Finnish court. Does that court have jurisdiction per Article 7(1)b, second indent ?: in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided.
ALS concluded a contract for the carriage of goods with Metso Minerals Oy (‘Metso’), a Finnish manufacturer of equipment for the mining and construction industries. A cylindroconical crusher was to be transported from Pori in Finland to Sheffield in the United Kingdom. The crusher was insured by Zurich Insurance plc (‘Zurich’). Both Metso and Zurich are the plaintiffs in the main proceedings.
ALS, with the help of subcontractors, transported the crusher as follows. It was first transported from Pori to Rauma in Finland by a lorry with a low loader. At Rauma, it was unloaded from the lorry and driven on to a ship under its own power. After transport by sea to the United Kingdom, the crusher was again driven under its own power off the ship in the port of Hull and loaded onto another lorry. As Metso’s consignee did not have sufficient or adequate storage capacity, it asked a sub-contractor of ALS to drive the crusher to its own warehouse and keep it there temporarily for a couple of days. However, the crusher was stored there for a longer period, and disappeared before it could be delivered to the consignee in Sheffield.
ALS argues that only the place of unloading may be deemed to be the place of performance, claiming that the place of performance can only be one single place and that the place of final destination is of considerably greater importance than the place of dispatch. This, according to ALS, is consistent with the determination of the applicable law in respect of contracts for the carriage of goods under Rome I, which gives a degree of preference to the place of delivery and is to be interpreted taking into account the Brussels I Regulation.
The Commission, referring to CJEU predecent Rehder, Wood Floor Solutions Andreas Domberger and Color Drack, acknowledges that, in any event, the place of arrival is a place of performance, as it is the final place in the chain of transportation. The Commission further argues, however, that, bearing in mind the requirements of proximity, foreseeability and legal certainty, it would be appropriate to recognise in addition the place of dispatch as a place of performance.
The question of international jurisdiction arises in the main proceedings because the case has connections not only with Finland but also with other countries: Finland is the country in which the goods were dispatched and the consignor has its seat, whereas the destination of the goods being carried and the location of the haulier’s seat is in the United Kingdom, where, moreover, the goods were ultimately lost. Finally, in order to convey the crusher from Finland to the United Kingdom, it had to be transported through the waters of other Member States or waters under the sovereignty of no State. In ordinary language, the AG suggests (at 28) all these territories and waters are places where the contract was performed.
According to their wording, both sections (a) and (b) of Article 5(1) of the Brussels I Regulation refer to ‘the place of performance’ and, in the case of section (b), additionally to ‘the place in a Member State’. In consideration of the singular form employed, it seems, the AG suggests at 30, that only one single place can be regarded as having special jurisdiction in respect of contractual matters. However, this conclusion is not borne out by the case-law.
In color Drack the Court ruled that, if it is not possible to determine one single principal place of performance, each of the places of performance has a sufficiently close link of proximity to the material elements of the dispute and, accordingly, a significant link as regards jurisdiction. In a dispute concerning the sale of goods, the Court has held that, in such a case, the plaintiff may sue the defendant at one of the places of performance — at his choice.
In flightright, as far as delayed flights are concerned, the Court considers both the place of departure and the place of the final destination to be equally significant under the contract, thereby establishing a sufficient territorial link between these places and any proceedings arising from the contractual situation.
(At 59) In the present situation, where the means used to transport the goods change as the journey progresses, particularly in harbours, the fact that the goods are carried in a number of different stages is also an inevitable feature of such transport. In the AG’s view, however, even the fact that it was necessary to unload heavy and bulky goods such as the crusher in question and transfer it across land under its own power, with the dangers in terms of loss or damage inherent in a procedure of that kind (including the possibility of theft), does not alter the situation in such a way as to give the places of reloading or transhipping an importance equal to that of the place of dispatch. Therefore, recognising the latter place, along with the place of destination, as one of two ‘places of performance’ does not enhance the number of available fora in a way as to give reason for concerns of forum shopping.
The AG clearly struggles between limiting forum shopping and enhancing predictability, and suitability of various places to assess the litigation at issue. The AG (at 60) finds support for his view that the intermediate stages should not so be given jurisdiction, in the fact that it is common practice not to mention the places of reloading or reshipping in contracts of the kind in issue in the main proceedings.
The AG concludes therefore that the place of dispatch and the place of destination are thus both ‘main places of performance’ under the second indent of Article 7(1)(b), whereas the loading places in general are not.
A good case to further complete analysis under Article 7(1).
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 126.96.36.199
flightright. The extensive CJEU notion of ‘contract’. Mumbles on effet utile and residual private international law.
One of my PhD students, Michiel Poesen, has an extensive case-note coming up on C-274/16 flightright – when it is out I shall include a link here. For the time being therefore I shall be very brief. In summary, the Court held
- first of all that the special jurisdictional rules of the Brussels I Recast do not apply to defendants domiciled outside of the EU. That was as such an obvious finding: these suits are subject to residual national rules on jurisdiction. However the Court makes a point, at 54, to emphasise that in accordance with the principle of effectiveness (effet utile), rules under national law cannot make it impossible or excessively difficult to exercise the rights conferred by EU law. Here: the rights of passengers under the flight delay compensation rules, Regulation 261/2004. Is that CJEU shorthand for suggesting that if a Member State were not to allow claimants based in the EU, to claim compensation against third-country defendants, it would contravene EU law?
- second, where an operating air carrier which has no contract with the passenger performs obligations under Regulation 261/2004, it is to be regarded as doing so on behalf of the person having a contract with that passenger. (At 64) that carrier must be regarded as fulfilling the freely consented obligations (a reference to the Handte formula) vis-à-vis the contracting partner of the passengers concerned. Those obligations arise under the contract for carriage by air. Consequently, an application for compensation for the long delay of a flight carried out by an operating air carrier such as (here) Air Nostrum, with which the passengers concerned do not have contractual relations, must be considered to have been introduced in respect of contracts for carriage by air concluded between those passengers and the carrier with whom they bought tickets. (Per the first bullet-point above, provided that carrier does have domicile in the EU). Of note is that this finding of a jurisdictional trigger under the rule of contracts (7(1), does not necessarily imply that at the substantive level, the court with jurisdiction will eventually decide that there is a contract on the basis of the lex causae.
- finally, to determine per Article 7(1)b second -, the court of ‘the place in a Member State where, under the contract, the goods were delivered or should have been delivered’, a contract for carriage by air, such as the contracts at issue in the cases in the main proceedings consisting of a single booking for the entire journey, establishes the obligation, for an air carrier, to carry a passenger from a point A to a point C. Such a carriage operation constitutes a service of which one of the principal places of provision is at point C. That finding is not called into question by the fact that the operating operates only the carriage on a flight which does not finish at the place of arrival of the second leg of a connecting flight in so far as the contract for carriage by air relating to the connecting flight covers the carriage of those passengers to the place of arrival of the second leg.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52.