Posts Tagged EU
Zetta Jet: COMI, time of filing, forum shopping, ordre public in insolvency. A comparative law Fest in Singapore.
An interesting comparison may be made between  SGHC 53 Re Zetta Jet Pte Ltd and  EWHC 2186 (Ch) Videology on which I reported here. Both concern recognition of foreign main (or not) proceeding under of the UNCITRAL Model Law on Cross-Border Insolvency (“the Model Law”). Zetta Jet came to me courtesy of my former student Filbert Lam, and has now also been analysed to great effect by Tan Meiyen and colleagues here.
The judgment is a master class on COMI determination, but also on comparative legal analysis re time of filing etc.: best read judgment and Tan’s note for oneself. Of particular note are
- the expression of sympathy by Aedit Abdullah J for forum shopping in insolvency law; compare also with Ocean Rig, and Kekhman; here this took the particular form of following the US approach to selecting the date on which the application for recognition is filed, as relevant to COMI determination (friendlier to forum shopping than te EU’s and England’s date of commencement of the foreign insolvency proceedings);
- the emphasis on the basket of criteria required to identify COMI;
- the narrow approach to ordre public despite Singaporean court order having been defied; yet also the relevance of the fact that these orders post defiance had been varied.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1 et al.
The title of this piece is optimistic. Broadly defined many of the conflicts issues I address touch upon civil procedure of course. Yet I rarely address civil procedure pur sang (see here for an example). C-637/17 Cogeco was held by the European Court of Justice yesterday.
The Court held that the EU (competition law) damages Directive 2014/104 does not apply ratione temporis to the facts at issue.
The Directive includes two recitals on limitation periods:
Recital 36 argues
‘National rules on the beginning, duration, suspension or interruption of limitation periods should not unduly hamper the bringing of actions for damages. This is particularly important in respect of actions that build upon a finding by a competition authority or a review court of an infringement. To that end, it should be possible to bring an action for damages after proceedings by a competition authority, with a view to enforcing national and Union competition law. The limitation period should not begin to run before the infringement ceases and before a claimant knows, or can reasonably be expected to know, the behaviour constituting the infringement, the fact that the infringement caused the claimant harm and the identity of the infringer. Member States should be able to maintain or introduce absolute limitation periods that are of general application, provided that the duration of such absolute limitation periods does not render practically impossible or excessively difficult the exercise of the right to full compensation.’
Recital 49 adds
‘Limitation periods for bringing an action for damages could be such that they prevent injured parties and infringers from having sufficient time to come to an agreement on the compensation to be paid. In order to provide both sides with a genuine opportunity to engage in consensual dispute resolution before bringing proceedings before national courts, limitation periods need to be suspended for the duration of the consensual dispute resolution process.’
Article 10 then foresees expressis verbis
1. Member States shall, in accordance with this Article, lay down rules applicable to limitation periods for bringing actions for damages. Those rules shall determine when the limitation period begins to run, the duration thereof and the circumstances under which it is interrupted or suspended.
2. Limitation periods shall not begin to run before the infringement of competition law has ceased and the claimant knows, or can reasonably be expected to know:
(a) of the behaviour and the fact that it constitutes an infringement of competition law;
(b) of the fact that the infringement of competition law caused harm to it; and
(c) the identity of the infringer.
3. Member States shall ensure that the limitation periods for bringing actions for damages are at least five years.
4. Member States shall ensure that a limitation period is suspended or, depending on national law, interrupted, if a competition authority takes action for the purpose of the investigation or its proceedings in respect of an infringement of competition law to which the action for damages relates. The suspension shall end at the earliest one year after the infringement decision has become final or after the proceedings are otherwise terminated
Article 11 adds for joint and several liability
‘Member States shall ensure that any limitation period applicable to cases under this paragraph is reasonable and sufficient to allow injured parties to bring such actions.’
and finally Article 18(1) reads
‘Member States shall ensure that the limitation period for bringing an action for damages is suspended for the duration of any consensual dispute resolution process. The suspension of the limitation period shall apply only with regard to those parties that are or that were involved or represented in the consensual dispute resolution.’
Of note in my view is first of all the unavailing nature of much of the recitals quoted above. As the overview shows, the recitals are more or less verbatim repeated in the actual rules; or the other way around: the Articles’ provisions are copy /pasted into the recitals. To that there is not much point.
Further, the minimum period imposed by the Directive (not applicable, as noted, ratione temporis) is five years. (Compare in the mooted amendment of the motor insurance Directive 2009/103: minimum 4 years is being suggested – subject to gold plating). The Court could not evidently read that minimum period as being ius commune. However it did read much of the qualitative requirements of recitals and articles effectively as ius commune using the effective enforcement of EU competition law as an anchor. It held that the Portuguese limitation period of three years, which, first, starts to run from the date on which the injured party was aware of its right to compensation, even if the infringer is not known and, secondly, may not be suspended or interrupted in the course of proceedings before the national competition authority, renders the exercise of the right to full compensation practically impossible or excessively difficult.
I realise it is a bit of a stretch to see this as a move towards a European Ius Commune on limitation periods. Yet it might be a first cautious step.
Mirror entries in EU (hazardous) waste law. Campos Sánchez-Bordona AG in Verlezza et al. I.a. a useful reminder of the true meaning of precaution.
Joined Cases C-487/C-489/17 Alfonso Verlezza et al, in which Campos Sánchez-Bordona AG opined last week, (no version in English available) is one of those rather technical EU environmental law cases which for that reason risks being overlooked by many. This is even more the case in EU waste law. Many of its provisions are subject to criminal law sanctions, hence encouraging defendants to take its application to the most intricate of corners so as to avoid a criminal conviction.
Verlezza et al concerns the implementation by Italy of a notoriously tricky part of EU waste law: the determination of wastes as being ‘hazardous’. Clearly, these wastes are subject to a range of stricter measures than ordinary wastes. Interestingly, while these wastes are more dangerous than ordinary wastes, they are often also more attractive to waste industries: for as secondary raw materials they may have high value (one can think of cartridges, batteries, heavy metals).
Protracted to and fro at the time between the European Commission and the Member States plus Parliament (which I explain in relevant chapter of my Handbook of EU Waste law; which I am pleased to note the AG refers to), eventually led to a regime with two or if one likes three categories: wastes considered per se hazardous; and wastes which may be considered hazardous or not, depending on whether or not they display hazardous properties in the case at issue (hence three categories: hazardous per se; non-hazardous and hazardous in concreto). This latter category are the so-called ‘mirror entries’: wastes originating from the same source which depending on the specifics of the case, may be hazardous or not.
Wastes produced by households (‘domestic waste’) are not considered hazardous. However the AG emphasises correctly that this exemption from the hazardous waste regime (via Article 20 of the waste framework Directive, 2008/98) does not apply to the case at issue, given that the ‘domestic’ wastes concerned have already been mechanically sorted. It is the qualification of the waste residues following sorting that needs to be resolved.
The mirror entries are the result of heated debate between the Institutions. The EC was hesitant to provide a binding list given the need for individual assessment; Council and EP were looking for regulatory certainty. In the end, Member States may (indeed have to) consider waste as hazardous when the material displays one or more of the hazardous properties listed in Annex to the EU list of waste. This also requires the Member States to issue a procedure which guides this assessment. It is the specifics of the Italian procedure (producers have to classify specific streams of waste as either hazardous or not; they have to carry out the necessary scientific tests; they are bound by the precautionary principle) which have triggered the case at issue.
At 19 the AG refers to the discussion in Italian scholarship: one part among others on the basis of the precautionary principle defends a reversal of the burden of proof: waste in the mirror entries is considered hazardous unless industry proves its non-hazardous characteristics; the other part proposes that scientific analysis needs to determine hazardousness in each specific case (quoting the sustainable development of the sector in support).
The AG opines that the Italian modus operandi needs to be given the green light, among others referring to the recent April 2018 EC guidance on wastes classification and the criteria defined in the Directive, which render a waste hazardous: producers of waste are perfectly capable indeed in the Directive’s set-up have to assess the hazardous character of the waste and the Italian regulations are a capable way of ensuring this.
The defendants’ ultimate argument that the precautionary principle should allow them to consider waste as hazardous even without such assessment, also fails: scientific assessment is able to determine a substance’s hazardous characteristics. Defendants’ approach would lead to all mirror entries being defined as hazardous. The Directive’s principle of cost benefit analysis ensures this does not lead to excessive testing- proportionate testing for properties will do the job. (It may be surprising that the defendants make this argument; but remember: in a criminal procedure all arguments are useful to try and torpedo national law or practice upon which a prosecution is based; without a valid law,, no prosecution).
This latter part of the Opinion, related to the precautionary principle, is a useful reminder to its opponents (who came out in force following this summer’s mutagenesis ruling; for excellent review of which see KJ Garnett here), of the principle’ true meaning.
Handbook of EU Waste law, 2nd ed. 2015, OUP, Chapter 2, Heading 2. ff (to which the AG refers).
Videology: Snowden J’s textbook consideration of COMI under UNCITRAL Model Law and EU Insolvency Regulations.
Looking at my back queue for blog postings,  EWHC 2186 (Ch) Videology is one I do wish to bring to the attention of my readers. Snowden J refused to recognise proceedings under Chapter 11 of the US Bankruptcy Code (“Chapter 11”) in relation to Videology Ltd as a foreign main proceeding under Article 17 of the UNCITRAL Model Law on Cross-Border Insolvency (“the Model Law”) as incorporated into English law in Schedule 1 to the Cross-Border Insolvency Regulations 2006 (the “CBIR”). He did so because he was not satisfied that the centre of main interests (“COMI”) of the Company was in the US where the Chapter 11 proceedings are taking place. He did, however, grant recognition of the Chapter 11 proceedings as a foreign non-main proceeding.
The Judgment is a master class on COMI determination. Of note are
- at 28 the rejection of, for so long as the UK remains a party to the Recast EIR, any different approach in relation to the concept of COMI under the CBIR/Model Law and the Recast EIR;
- the emphasis on a basket of criteria required to displace the presumption of COMI in place of the registered office;
- at 42 ff the rejection of a narrow focus on, or attachment of overriding importance to, the location in which the directors and senior management act;
- Snowden J’s rejection at 46 ff of the Head Office approach as being determinant under EU law (see also Handbook heading 22.214.171.124.4); and
- the factors referred to eventually to uphold the presumption: at 72: ‘In addition to being the place of its registered office, the UK is where the Company’s trading premises and staff are located, where its customer and creditor relationships are established, where it administers its relations with its trade creditors on a day-to-day basis using those premises and local staff, and where its main assets (the receivables and cash at bank) are located. All of those factors will be visible and immediately ascertainable by the customers, and in particular by the trade creditors, of the Company. The UK is also, importantly, where representations were made to the Company’s main finance creditor that its COMI was situated.’
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1 (specifically also 126.96.36.199.4 for the Head Office discussion).
Update 10 January 2019 the final report is out here. Social scientists will be particularly interested in Chapter 3 and Chapter 4, where the report takes a holistic view of risk management.
There are many scientific and legal /regulatory angles to the pollution caused by micro and nanoplastics (MNPs). I was pleased to have been invited to be part of a scoping exercise with the European Commissions Group of Chief Scientific Advisors, following which that Group issued its initial statement early July.
MNPs is an issue where the EU undoubtedly can recognise its regulatory leadership – at the same time appreciating that the challenge is of a truly global nature (many of the worst plastics pollution issues are located in river deltas way outside EU borders). At the scientific level, studies particularly in the marine environment show cause for great concern – but not necessarily easy fixes.
I accepted therefore to be part of the SAPEA Consortium (Science Advice for Policy by European Academies) Working Group on MNPs, which will oversee in first instance the collation of the state of the art: from a regulatory as well as a scientific point of view – and subject to tight deadlines.
Autumn should be interesting.
A short post on manufactured nanomaterials and data. (Readers will be aware that although the blog focuses mostly on litigation, I dabble in regulatory research and practice, too. And that nanotechnology regulation has been a consistent interest of mine).
Thank you Lynn Bergeson and Carla Hutton for flagging the study by EUON on data collection and reporting methodology for manufactured nanomaterials. EUON, the European Union’s Observatory for Nanomaterials, is hosted by ECHA – the EU’s Chemicals Agency. The study’s purpose is made clear on p.15 (only) of the report: the overall context is for the regulators to have an overview of the heterogeneous market for nanomaterials. In order to do so, the study measures the reliability etc of existing reports and studies on the nanomaterials market. It concludes that a Delphi study of the existing research would be required.
For those of you with an interest in information flows and the transparency of data, the implications are clear: part of the exercise of regulating new technologies is to know what is out there; and manufacturers’ data clearly are not making it into the public domain in a transparent and coherent manner. Consider alongside this report, for instance the proposed US EPA rule on transparency in regulator science.
One or two of you are aware I have written a whole handbook on EU waste law. That now needs updating as a result of the publication of the adopted ‘Circular Economy package’ – although implementation dates are some time off so if you do have a copy, do not discard it just yet.
The package includes amendments to the ELV, Batteries, WEEE, Landfill, packaging and packaging waste, and waste framework Directive.
I am hoping to write a paper on the package which will summarise the developments – watch this space.
Handbook of EU Waste law, 2nd ed. 2015: all chapters 🙂 .