Posts Tagged Exam question
Thank you very much indeed Sarah Venn and Emma Hynes both for flagging Garcia v BIH, Total Gabon and Sigma,  EWHC 739 (Admlty), and (Emma) for providing me with copy (Bailii are not yet running it). This case is extremely suited to an oral exam of conflict of laws: in a written exam to many issues would have to be discussed. (Mine this term are mostly written. Hence I’ll run this piece early).
Claimant is a French national who worked as a professional diver offshore Gabon, West Africa, and suffered catastrophic brain injury which he blames on poor working practices on the second defendant’s site (Total Gabon), which is where he was working. He was employed by first defendant BIH, a UK based company, with choice of court and governing law made for English courts cq English law. First defendant is clearly domiciled in the UK and the Brussels I Regulation clearly applies to it. The third defendant Sigma, was contracted by Total Gabon. Claimant’s position is that he was deployed by BIH to work under the control of Sigma on the site which was, or should have been, supervised by Total Gabon. Total Gabon claim the contractual relationships between it and Sigma prevent a claim against the former.
BIH is small fish which may even have been struck off the company register. It is clear that plaintiff will not receive from BIH the amounts he needs for his constant medical care.
A default judgment was issued against BIG who did not engage with proceedings – at any rate jurisdiction against BIG per Owusu (with which readers of this blog are now ad nauseam familiar) could not be dismissed; . Total Gabon contest jurisdiction on the basis that England and Wales is not the appropriate forum.
This is not said in so many words in the Judgment however the presence of an anchor defendant per Article 4 Brussels I Recast, is of no relevance where the co-defendants are not domiciled in the EU. The regulation cannot be used to justify such anchor, residual conflicts rules take over.
Jervis Kay QC AR considers many cases which I have reported on before: VTB, Owusu, Lungowe, Spiliada. Lungowe in particular is considered by Mr Kay, including the issue of abuse of the use of anchor defendants and (at 23 in fine) the acknowledgment, implicitly (I wrote it explicitly in my review of the case) that of course EU precedent in this respect is pro inspiratio only. Applying English residual conflicts rules, the judge then reviews whether there is a serious case (‘a real prospect of succeeding’) that could be made against Total Gabon, either one in tort or one in contractual liability. He found there is such real prospect, for both, but especially for tort.
However the case eventually (access to justice issues in Gabon were not flagged neither discussed) stumbles on the question whether the English courts would be the most appropriate forum: it is found they are not. Inspiration is found especially in Erste Group Bank  EWCA Civ 379, a case in which forum non conveniens was applied even against an England-domiciled defendant because there had already been submission to Russian jurisdiction. In Garcia, the Court applies Erste per analogiam: the parallel, Mr Kay suggests, is that the case against the first defendant has effectively been wrapped up. The spectre of competing judgments therefore, Mr Kay holds, does not arise (at 36) and England is therefore not the appropriate forum. If the case is appealed I would imagine this altogether brief consideration of appropriateness and the parallel seen with Erste, I would imagine would be its Achiless heel.
(One of the considerations which defendant, per VTB, considers, is that as a rule of thumb, Gleichlauf is to be preferred (I have often found this a less attractive part of the Supreme Court’s ruling). Which is why defendant considers Rome II: if the English courts were to hear the case, they would have to apply Rome II even if their jurisdiction is a result of residual English conflicts rules).
An alternative action for Mr Garcia, one imagines, would have been (or perhaps it still is) to use Total France SA as anchor in France, to try and have the subsidiary’s actions assigned to it: a more classic CSR case.
Anyways, I think you will agree that one could have a good chinwag on this judgment at oral exam.
Don’t leave the store without asking. Joinders, and the Aldi principle applied in Otkritie. On the shopping list for the EU?
Postscript 21 November 2017: For an application in Hong Kong see Far Wealth Ltd v Lo Ki Mou, reported here: proceedings dismissed as an abuse of process because the plaintiffs could have protected their position by way of a counterclaim in prior proceedings commenced against them by the defendants.
A posting out off the box here, so bear with me. Neither Brussels I nor the Recast include many requirements with respect to (now) Article 8(1)’s rule on joinders. A case against a defendant, not domiciled in the court’s jurisdiction, may be joined with that against a defendant who is so domiciled, if the cases are ‘so closely connected that it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments’. There is of course CJEU case-law on what ‘so closely connected’ means however that is outside the remit of current posting.
As I reported recently, the CJEU has introduced a limited window of abuse of process viz Article 8(1), in CDC. The Court’s overall approach to Article 8(1) is not to take into account the subjective intentions of plaintiff, who often identify a suitable anchor defendant even if is not the intended target of their action. The Court does make exception for one particular occasion, namely if it is found that, at the time the proceedings were instituted, the applicant and that defendant had colluded to artificially fulfil, or prolong the fulfilment of, (now) Article 8’s applicability.
What if at the time the proceedings were instituted, applicant artificially ignores the fulfilment of, (now) Article 8’s applicability?
The Aldi rule of the courts of England and Wales, and its recent application in Otkritie, made me ponder whether there is merit in suggesting that the CJEU should interpret Article 8(1) to include an obligation, rather than a mere possibility, to join closely connected cases. I haven’t gotten much further than pondering, for there are undoubtedly important complications.
First, a quick look at the Aldi rule, in which the Court of Appeal considered application of the Johnson v Gore Wood principles on abuse of process of the (then) House of Lords, to an attempt to strike out a claim for abuse of process on the basis that the claim could and should have been brought in previous litigation. Aldi concerned complex commercial litigation, as does Otkritie. The result of Aldi is that plaintiffs need to consult with the court in case management, to ensure that related claims are brough in one go. Evidently, the courts need to walk a fine rope for the starting point must be that plaintiffs have wide discretion in deciding where and when to bring a claim: that would seem inherent in Article 6 ECHR’s right to a fair trial.
In Otkritie [the case nota bene does not involve the Brussels Regulation], Knowles J strikes the right balance in holding that the Aldi requirement of discussing with the court had been breached (and would have cost implications for Otkritie in current proceedings) but that otherwise this breach did not amount to abuse of process.
Now, transporting this to the EU level: to what degree could /should Article 8 include a duty to join closely related proceedings? Should such duty be imposed only on plaintiff or also on the court, proprio motu? A crazy thought perhaps for the time being, but certainly worthwhile pondering for future conflicts entertainment.
‘The Bundesgerichtshof was wrong to deny choice of court in favour of Virginia, on the basis of EU mandatory law.’ Discuss.
Such would be the title for a perfect exam question for an advanced conflict class. It would also kill the bird of making the point of German law and scholarship being particularly relevant to conflict of laws. In September 2012 (only just now brought to my attention), the Bundesgerichtshof denied a choice of court agreement in favour of the courts in Virginia. The agreement was part of a contract between a German agent and a principal from the US and co-incided with a choice of law clause, also in favour of the laws of Virginia. Under Virginian law, the agent would not have a right to indemnity, contrary to the commercial agents Directive, which was held in Ingmar to be part of EU mandatory law: that was enough for the German courts to refuse to accept the validity of the choice of court clause, and to accept jurisdiction for German courts on the basis effectively of a minimum presence rule (general jurisdiction over a defendant anywhere it maintains a registered branch or office).
Progress is to varying degree based on assimilation: I shall not therefore repeat the excellent analysis of Jennifer Antomo here. Choice of court clauses in favour of non-EU courts are not covered by the Brussels I-Regulation. Yet when national courts refuse to acknowledge such choices and assume jurisdiction, the Rome I Regulation on applicable law for contracts, does come into play. In effect, the German court here refuses to acknowledge the clause on the basis of applicable law considerations, whence EU law is far from absent in the case. Some sort of judicial review with the ECJ might therefore have been warranted.