Posts Tagged ECJ

Saey Home: The CJEU on choice of court and invoices, and place of performance of concession contracts.

C‑64/17 Saey Home, is yet another illustration of, mercifully for us conflicts lawyers, even fairly sophisticated businesses often fail properly to conclude commercial agreements. Here: what is said to be a semi-exclusive concession agreement, was concluded verbally only.

Saey Home & Garden is a company with its registered office in Kortrijk (Belgium), which specialises in the manufacture and sale, inter alia, of kitchen equipment and utensils bearing the trademark ‘Barbecook’. That company does not have a branch or establishment in Spain. Lusavouga has its registered office in Cacia, Aveiro (Portugal). Its premises are in Portugal. Its network covers Spain, inter alia, where it has no branch or establishment. Parties to the main proceedings concluded a commercial concession agreement concerning the exclusive promotion and distribution (with the exception of one client) in Spain.

First up, has choice of court in favour of the courts at Kortrijk (referred to by its French synonym Courtrai, but then without the ‘r’ in referral documents and by the CJEU) been validly made if this choice was only included in the general terms and conditions included in the invoices? Hoszig (where a jurisdiction clause is stipulated in the general conditions, such a clause is lawful where the text of the contract signed by both parties itself contains an express reference to general conditions which include a jurisdiction clause) and Leventis (the purpose of the requirements as to form imposed by Article 25(1) is to ensure that consensus between the parties is in fact established) are the most recent CJEU precedent referred to. Both of them build on standing CJEU principle: one must not be overly formalistic when assessing the existence of agreement, but one must be certain that such agreement exists. While it is up to the national court to assess this in fact, the Court does indicate it is unlikely to be the case when no written agreement has been made (neither initially nor subsequently confirming an earlier verbal agreement) and all one has are the invoices.

Choice of court being unlikely, next up is the application of Article 7(1) to determine which court has jurisdiction to hear an application for damages relating to the termination of a commercial concession agreement concluded between two companies, each established and operating in a different Member State, for the marketing of goods on the domestic market of a third Member State in which neither of those companies has a branch or establishment.

Referring to Corman-Collins, the Court classifies concession agreements as being service contracts, which per Article 7(1) second indent, leaves to be determined the ‘place in
a Member State where, under the contract, the services were provided or should have been provided;’. Note: the place in a Member State. Not different places. Per Wood Floor Solutions, when there are several places of performance of the obligation characteristic of a contract for the supply of services the ‘place of performance’ must be understood as the place with the closest linking factor, which, as a general rule, will be at the place of the main provision of services. This place of ‘main provision’ follows from the provisions of the contract and, in the absence of such provision, of the actual performance of that contract and, where it cannot be determined on that basis, the place where the agent is domiciled (still per Wood Floor Solutions). This specific determination is left to the referring court.

One imagines different national courts may have treated all of this as acte clair – except perhaps for the peculiarity of Spain being a Member State where neither of the parties has either domicile or branch.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1.

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Planet49: pre-ticked agreement with clauses in terms and conditions.

A quick flag to those of you following consumer protection and the Directive (2002/58) on privacy and electronic communications. In Case C-673/17 Planet49 the Court of Justice is being asked to clarify to what extent a website which pre-ticks boxes in general terms and conditions (here: to share relevant personal data) is compatible with relevant EU laws.

File of the case here (in Dutch only).

Geert.

 

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Hofsoe: Scope ratione personae of Brussels I’s protected categories in cases of assignment (specifically: insurance).

In C‑106/17 Hofsoe, the CJEU held late January that the Brussels I Recast Regulation jurisdictional rules for jurisdiction in matters relating to insurance, do not apply in case of assignment to a professional party. A B2C insurance contract assigned to a professional party therefore essentially turns into a B2B contract: the rules for protected categories are meant to protect weaker parties only. The Court also rejects a suggestion that the assignee ought to be able to prove that in fact it merits the forum actoris protection (on account of it being a sole insurance practitioner with little practice): the weakness is presumed and not subject to factual analysis.

Conclusion: at 43: ‘a person such as Mr Hofsoe, who carries out a professional activity recovering insurance indemnity claims against insurance companies, in his capacity as contractual assignee of such claims, should not benefit from the special protection constituted by the forum actoris.’

Predictability, and restrictive interpretation of the Regulation’s exceptions to the actor sequitur forum rei rule, are the classic lines along which the CJEU holds the case.

I for one continue to find it difficult to get my head round assignment not leading to the original obligation being transferred full monty; including its jurisdictional peculiarities.  The referring court in this respect (at 28) refers to the applicable national law which provides for as much:

‘In that regard, the referring court points out, under Article 509(2) of the Civil Code, ‘all rights associated with the claim …shall be transferred with the claim’. In those circumstances, the assignment of the claim should include that of the benefit of jurisdiction.’

Indeed in Schrems the Court emphasises the impact of the assignor’s rights on the rights of the assignee. By contrast in Hofsoe, the assignee’s qualities (here: as a professional) call the shots. The Court essentially pushes an autonomous and not necessarily consistent EU law on assignment here. In Rome I, the issue has triggered all sorts of discussions – not least the relevant BICL study and the EC 2016 response to same. Under Brussels I Recast, the discussion is more silent.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.

 

 

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Altun: Fraud and social dumping. The CJEU emphasises the double sides of the mutual trust coin.

When I reported on Saugmandsgaard ØE’s Opinion in C-359/16 Altun, I emphasised the issue of mutual trust. I noted that the AG effectively flipped the coin: sincere co-operation requires sincerity on both sides (my words, not the AG’s). The AG had recalled the Halifax case-law of the CJEU: EU law cannot be relied on for abusive or fraudulent ends and that national courts may, case by case, take account — on the basis of objective evidence — of abuse or fraudulent conduct on the part of the persons concerned in order, where appropriate, to deny them the benefit of the provisions of EU law, in the light of the objectives pursued by the provisions of EU law concerned. In November 2017 the CJEU confirmed in C-251/16 Cussens that this principle has direct effect and is directly applicable: it is a general principle of EU law which does not require a national measure transposing it.

In the case at issue, the facts point to non-fulfillment of one of the substantive criteria for the E101 certificate to be issued, namely that only an undertaking which habitually carries on significant activities in the Member State in which it is established may be issued an E101 of that State.

The Court today has confirmed the AG’s view (only the Dutch and French version were available at the time of writing). Mutual trust implies responsibilities on both sides. Upon receiving indications of fraud, the Member State of origin is duty-bound to investigate diligently and either confirm or refute the suspicions. (In the event of continuing divergence, there is an appeals procedure within the relevant secondary law, and if need be the possibility for the host State to pursue infringement proceedings with the home State). Like its AG, the Court emphasises that the fraud must be established in the context of adversarial proceedings with legal guarantees for the persons concerned and in compliance with their fundamental rights, in particular the right to an effective remedy enshrined.

This remains relevant even after the planned changes to the posted workers Directive. In the future system, too, Member States will issue certificates, feed data into the newly created register etc.

Geert.

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Schrems v Facebook. Consumer class actions and social media.

I reported on Bobek AG’s Opinion in Schrems v Facebook when it came out last year. The CJEU held this morning (judgment so far in FR and DE only) and largely confirms the AG’s Opinion.

As I noted at the time, the long and the short of the case is whether the concept of ‘consumer’ under the protected categories of Brussels I (and Recast) is a dynamic or a static one; and what kind of impact assignment has on jurisdiction for protected categories.

On the first issue, Mr Schrems points to his history as a user, first having set up a personal account, subsequently, as he became the poster child for opposition to social media’s alleged infringement of privacy, a Facebook page. Each of those, he suggests, are the object of a separate contract with Facebook. FB suggests they are part of one and the same, initial contractual relationship. This one assumes, would assist FB with its line of argument that Herr Schrems’ initial use may have been covered by the forum consumentis, but that his subsequent professional use gazumps that initial qualification.

The Court suffices at 36 with the simple observation that the qualification as a single or dual contract is up to the national court (see inter alia the Gabriel, Engler and Ilsinger conundrum: Handbook, Chapter 2, Heading 2.2.11.1.a and generally the difficulties for the CJEU to force a harmonised notion of ‘contract’ upon the Member States), yet that nevertheless any such qualification needs to take into account the principles of interpretation of Brussels I’s protected categories: in particular, their restrictive interpretation. Whence it follows, the Court holds, that the interpretation needs to be dynamic, taking into account the subsequent (professional or not) use of the service: at 37-38: ‘il y a notamment lieu de tenir compte, s’agissant de services d’un réseau social numérique ayant vocation à être utilisés pendant une longue durée, de l’évolution ultérieure de l’usage qui est fait de ces services. Cette interprétation implique, notamment, qu’un requérant utilisateur de tels services pourrait invoquer la qualité de consommateur seulement si l’usage essentiellement non professionnel de ces services, pour lequel il a initialement conclu un contrat, n’a pas acquis, par la suite, un caractère essentiellement professionnel.’

The Court does add at 39-40 that acquired or existing knowledge of the sector or indeed the mere involvement in collective representation of the interests of the service’s users, has no impact on the qualification as a ‘consumer’: only professional use of the service does. (The Court in this respect refers to Article 169(1) TFEU’s objective to assist consumers with the representation of their collective interest).

On this point therefore the Court unlike the AG attaches more weight to restrictive interpretation than to predictability. (Bobek AG’s approach to the issue of dynamic /static was expressed more cautiously).

As for the assignment issue, the Court sides squarely with its AG: the assigned claims cannot be pursued in the jurisdiction which is the domicile of the assignee. That in my view de lega lata makes perfect sense.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

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Sharia divorce and Rome III. The CJEU in Sahyouni.

I reviewed the AG’s Opinion in Case C-372/16 here. The Court held late December. Like the AG, it held that  Rome III does not cover divorces which are declared without a constitutive decision of a court or other public authority: it squarely uses the Regulation itself to come tho this view, without any assessment of whether the foreign State’s courts in private sharia divorces, has any impact on that conclusion.

With the first question answered in the negative, the other, very interesting issues covered by AG, became without subject. A judgment not with a bang, but with a whimper.

Geert.

 

 

 

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Bot AG in Fansites. No cheers for unified applicable data protection laws.

Apologies for late reporting. Bot AG opined end of October in C‑210/16 Fansites. [The official name of the case is Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein v Wirtschaftsakademie Schleswig-Holstein GmbH, in the presence of Facebook Ireland Ltd, Vertreter des Bundesinteresses beim Bundesverwaltungsgericht. It’s obvious why one prefers calling it Fansites].

The Advocate-General summarises (para 2-3) the case as involving ‘proceedings between the Wirtschaftsakademie Schleswig-Holstein GmbH, a company governed by private law and specialising in the field of education (‘the Wirtschaftsakademie’), and the Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein, a regional data-protection authority in Schleswig-Holstein (‘ULD’) concerning the lawfulness of an order issued by the latter against the Wirtschaftsakademie requiring it to deactivate a ‘fan page’ hosted on the website of Facebook Ireland Ltd. The reason for that order was the alleged infringement of the provisions of German law transposing Directive 95/46. Specifically, visitors to the fan page were not warned that their personal data are collected by the social network Facebook (‘Facebook’) by means of cookies that are placed on the visitor’s hard disk, the purpose of that data collection being to compile viewing statistics for the administrator of the fan page and to enable Facebook to publish targeted advertisements.’

The case ought to clarify the extent of the powers of intervention of supervisory authorities such as ULD with regard to the processing of personal data which involves the participation of several parties (at 13). I had flagged earlier that this case is relevant to the jurisdictional and applicable law issues involving datr cookies.

Whatever the outcome of the case, its precedent value will be limited by the imminent entry into force of the new General Data Protection Regulation – GDPR. The GDPR clearly introduces a ‘one-stop principle’ with only one lead authority (in FB’s case, Ireland’s data protection agency) having the authority to act (see also the AG’s observation of same in para 103).

As prof Lorna Woods in excellent analysis observes, the issue comes down to the interpretation of the phrase from Art. 4(1)(a), ‘in the context of the activities of an establishment’. Dan Svantesson has most superb analysis of Article 4(1)(a) here, anyone interested in the issue will find his insight most helpful.

Now, the Advocate-General leans heavily on Weltimmo however I would suggest its precedent value for the Fanpages case is constrained. Weltimmo concerned a company set up in Slovakia but with no relevant activities at all in that Member State. Indeed as the Court itself observed (at 16-18) , the company was effectively male fide (my words, not the CJEU’s) moving its servers and creating fog as to its exact whereabouts. In other words a case of blatant abuse. There is no suggestion of abuse in Fanpages. Moreover according to the CJEU in C-230/14 Weltimmo the phrase ‘in the context of the activities of an establishment’ cannot be interpreted restrictively (AG’s reference in para 87), yet that CJEU holding in Weltimmo cross-refers to Google Spain in which the crucial issue was whether EU data protection laws apply at all. That is very different in Weltimmo and in Fanpages. That EU authorities have jurisdiction and that EU privacy law applies is not at issue.

There is sufficient argument to find in the Directive, even before its transformation into the GDPR, that in cases such as these the same processing operation ought to be governed by the laws of just one Member State. It would be good for the CJEU to recognise that even before the entry into force of the GDPR.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.5.

 

 

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