Posts Tagged Exorbitant jurisdiction
No VAR needed here. French Supreme Court on choice of court ex-EU in employment contracts. X v AS Monaco.
Update 30 January 2019 many thanks to François Mailhé who contacted me to point out that the reasoning re Article 1412-1 in fact was only made by claimant but not entertained by the Court, who only applied Brussels I Recast. An ‘attendu que’ which was however followed by ‘selon le moyen que’, in my haste overlooked by me. Apologies – and a first correction on any post on the blog since its launch in 2012. I have amended the post to correct this.
Thank you Hélène Péroz for flagging 17-19.935 X v AS Monaco at the French Supreme Court, held December 2018. Claimant is a former physiotherapist employed by AS Monaco. His contract included choice of court ex-EU (not further specified in the judgment but one assumes, Monaco. Monaco is one of those micro-States with a complex arrangement with the EU).
The Supreme court first of all could have addressed the application of France’s jurisdictional rule R. 1412-1 of the Code du Travail. This assigns territorial jurisdiction in principle to the employment courts of the area where the employee habitually carries out the employment, with fall-back options which are similar to yet not quite the same as the provisions of Brussels I Recast:
Art. R. 1412- 1 L’employeur et le salarié portent les différends et litiges devant le conseil de prud’hommes territorialement compétent. Ce conseil est :
1 Soit celui dans le ressort duquel est situé l’établissement où est accompli le travail ;
2 Soit, lorsque le travail est accompli à domicile ou en dehors de toute entreprise ou établissement, celui dans le ressort duquel est situé le domicile du salarié.
Le salarié peut également saisir les conseils de prud’hommes du lieu où l’engagement a été contracté ou celui du lieu où l’employeur est établi. — [ Anc. art. R. 517- 1, al. 1er à 3.]
These provisions cast a slightly wider jurisdictional net than Brussels I Recast. That gap was even wider before Brussels I Recast had extended its jurisdictional reach to parties (the employer, or the business in the case of the consumer title) domiciled ex-EU. It is particularly its existence pre Brussels I Recast for which the provision is ranked among France’s exorbitant jurisdictional rules.
Now, coming to the case at issue. Claimant had suggested the Supreme Court address the nature of the provision as lois de police, in particularly by severely curtailing same in the event of choice of court ex-EU. Claimant argued ‘ce n’est que si le contrat est exécuté dans un établissement situé en France ou en dehors de tout établissement que les dispositions d’ordre public de l’article R. 1412-1 font échec à l’application d’une telle clause.’ : it is argued that only if the contract is performed in an establishment of the employer in France, or entirely outside such establishment (from the employee’s home or ‘on the road’) does Article R.1412-1 trump choice of court ex-EU. The lower court’s judgment had failed to assess these circumstances and therefore, it was suggested, infringes the Article.
The Supreme Court unfortunately does not however dot the i’s and cross the t’s on this issue at all: it only (not unjustifiably, if an expression of judicial economy) looks at Brussels I Recast. Reportedly the application of Brussels I to the issue is not something the Court has properly done in the past.
Article 21 Brussels I Recast requires assessment of the place of habitual carrying out of the work. Claimant worked mostly from the club’s training ground, which is in Turbie, France, and accompanied the club at fixtures. These however by reason of the football calendar clearly took place in Monaco only one out of two games (see the Count of Luxembourg for similar identification of the relevant criteria). Core of the employment therefore is France, notably in the Nice judicial area and therefore the lower court was right to uphold its jurisdiction.
Addressing Article 1412-1 will have to be for future judgment, outside the Brussels I Recast context.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52.
Liu v Ma. NSW (Australian) PIL happy to enforce foreign judgments where jurisdiction is based simply on nationality.
At 6 Mukhtar AJS notes ‘There is sufficient authority for the view that Australian Courts will enforce a foreign judgment where the defendant is a subject of the foreign country in which the judgment was obtained. That view has its critics (footnote omitted, GAVC) and it may have its difficulties especially if the citizenship is inactive. Nevertheless, it is founded on a line of English authority exemplified by the statement of Buckley LJ in Emanuel v Symon‘.
Many would argue that at the very jurisdictional level nationality as a ground is parochial /exorbitant. At the same time that at the level of recognition, one should show restraint in refusing to recognise judgments based on such flimsy jurisdictional grounds.
For those wanting to dig deeper, prof Andrew Dickinson has critical review of the relevant case-law in (2018) 134(July) LQR 426-449 (‘Schibsby v Westenholz and the recognition and enforcement of judgments in England’).
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.4. for a discussion of ‘parochial’ jurisdiction in the EU context).
Postscript 26 April 2016: the PCIA Yukos Arbitral award which I refer to below, was later squashed for lack of jurisdiction – that judgment is currently under appeal.
When should a court being asked to apply the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) – the ‘New York Convention‘, look mercifully on forum shopping with a view to the smooth enforcement of such award? That, in essence, was the issue in Yukos v Tomskneft at the Irish High Court. Both Yukos Capital and Tomskneft were originally part of the Yukos group – of PCIA Yukos arbitral award fame. Tomskneft was later transferred to Rosneft. Arbitral proceedings had taken place in Switzerland, Yukos’ attempts at enforcement in Russia failed, as they did in France. Singapore attempts are underway.
The Irish courts involvement at first view looks odd. There are no Tomskneft assets in Ireland, neither corporate domicile of any Tomskneft affiliates. As Kelly J noted, the Irish proceedings effectively would serve as a jack for proceedings in other jurisdictions where Tomskneft does hold assets. Waving a successful enforcement order (even if it were in practice nugatory, given the lack of assets) obtained in a ‘respectable’ jurisdiction, would assist with enforcement proceedings elsewhere.
The New York Convention has a pro-enforcement bias however the Irish (and other, especially common law countries’) arbitration act in enforcement of the Convention, runs alongside the application of Irish civil procedure rules ‘out of the jurisdiction’, being against a foreign defendant: Kelly J (at 59): ‘In implementing the Convention as it did, the legislature did not attempt to dispense with the necessity to obtain leave to serve out of the jurisdiction in a case where the respondent is not normally resident within it.‘
US law, too, requires that preliminary to recognising and enforcing a foreign award, in personam jurisdiction must be established. Decision on such remains subject to lex fori. A jurisdiction which all too happily entertains such cases is then said to employ ‘parochial’ or ‘exorbitant’ jurisdictional rules.
In the case at issue, after referencing prior case-law both in Ireland and elsewhere, Kelly J rejected applicant’s request (at 141): ‘It is a case with no connection with Ireland. There are no assets within this jurisdiction. There is no real likelihood of assets coming into this jurisdiction. This is the fourth attempt on the part of the applicant to enforce this award. There is little to demonstrate any “solid practical benefit” to be gained by the applicant. The desire or entitlement to obtain an award from a “respectable” court has already been exercised in the courts of France and is underway in the courts of Singapore.‘
Note therefore that the court is not unsympathetic to the attempt at employing successful (even if hollow) enforcement in one jurisdiction as a lever in the real target jurisdiction (the one with the assets). Except, in the case at issue, similar attempts had already been or still were underway elsewhere.
The case is a very good illustration of the attraction (and uncertainty) of forum shopping, in particular at the enforcement stage. As well as a powerful reminder of the in personam jurisdictional rules of the common law.