Tag: External relations

Posted on

Bank Melli Iran: How corporate social responsibility reports may act as a shield in export controls law.

A short (and late – I am in mopping-up mood it seems) post on the AG’s Opinion in Case C‑124/20 Bank Melli Iran – in which he also cites my former colleague proximus Cédric Ryngaert. Hogan AG’s Opinion addresses the rock and the hard stone, or the devil and the deep blue sea dilemma facing corporations in the light of diverging export laws /sanctions law. May a German bank refuse to do business indeed end business with an Iranian bank, under pressure from US secondary export control laws?

More on the external relations aspects of the case is ia here and of course in the Opinion itself. My interest here lies in part of the Opinion: the AG’s view that an EU undertaking seeking to terminate an otherwise valid contract with an Iranian entity subject to the US sanctions must demonstrate to the  satisfaction of the national court that it did not do so by reason of its desire to comply with those sanctions. It must show other motives, such as ethical reservations about doing business with Iran. These reservations may be documented by a genuinely rolled-out CSR compliance program: (88)

‘In order, however, to establish that the reasons given in respect of any decision to terminate a contract on this ground were in fact sincere, the person referred to in Article 11 of the EU blocking statute in question − in the present case Telekom Deutschland – would need, in my view, to demonstrate that it is actively engaged in a coherent and systematic corporate social-responsibility policy (CSR) which requires them, inter alia, to refuse to deal with any company having links with the Iranian regime.’

CSR programs have been used as carrot ia in Trafigura and as stick ia in Vedanta. The view here is very much the carrot or if one likes, the shield function: CSR policies as a defensive weapon against the rock and hard stone dilemma. That is most interesting for the EU corporations concerned and likely to draw the attention of export sanctions practitioners (both in-house and out) to part of the corporation’s blurb which they may otherwise ignore. Yet it may put too much emphasis on fairly unregulated CSR policy drafting, and compliance issues.

Geert.

Posted on

Eastern Pacific Chartering v Pola Maritime. How an application for lis pendens awakens the Brussels Convention (as between the UK and Gibraltar).

Eastern Pacific Chartering Inc v Pola Maritime Ltd [2021] EWHC 1707 (Comm) is a highly unusual case which shows that dormant Conventions can be awoken from their slumber.  I merely dabble in EU external relations law, I am no expert in it. The application of that law in the context of private international law is an issue I have tasked one or two students with – let’s just say they find it challenging.

On the specific issue at hand, parties agree that consequential to the Civil Jurisdiction and Judgments Act 1982 (Gibraltar) Order 1997, matters of jurisdiction between the E&W Courts and the Supreme Court of Gibraltar are governed by the Brussels Convention 1968 and that this remains the case notwithstanding Brexit. That core issue of external relations law pre and post Brexit is therefore not sub judice. One imagines that had it been, it could have led to extensive to and fro, among others within the context of the UK having revoked the 1968 Convention per the jurisdiction and Judgments Exit Regulations SI 2019/479, and of the Withdrawal Agreement.

In July 2020, claimant had a ship arrested in Gibraltar, with the purpose to serve as security for claims under a charterparty between both, claims that were to be brought in London, consistently with an exclusive jurisdiction clause in the charterparty. Roberston DJ classifies that action as one for provisional measures under Article 24 Convention (35 of the Brussels Ia Regulation).  The legality of that arrest (which ended upon claimant releasing it) continues to be disputed (ia viz the actual ownership of the ship).

Claimant (not domiciled in a 1968 Convention Contracting State) now sues  in E&W (pursuant to the choice of court) Defendant (domiciled at Cyprus) for outstanding monies. In current proceedings it applies to dismiss and strike out that part of the Defendant’s counterclaim at the E&W courts which seeks to advance claims in tort based on the alleged wrongful Gibraltar arrest.  In essence claimant submits that the High Court court has no jurisdiction to try the Defendant’s tort claims and should decline jurisdiction in favour of the Supreme Court of Gibraltar.

After a swipe [18 ff] at both parties having engaged, without court approval, experts on Gibraltarian law (which, she holds, bear no relevance for the jurisdictional issues anyways), Roberston DJ proceeds to discuss the lis pendens issue.

Defendant’s primary case is that, on the facts of this case, Article 17 Convention (A25 BIa) applies to confer jurisdiction, because the exclusive jurisdiction clause is broad enough to cover the tort claims. The Defendant’s fallback position is that, if that is wrong, the Court nevertheless has jurisdiction in respect of its counterclaims, not on the basis of A5(3) Convention (the Claimant (defendant on the counterclaim) not being domiciled in a Convention State) either because that necessarily follows from the Claimant’s decision to litigate its own claims here, or because Claimant has taken steps since service of the Defence and Counterclaim which waived any right to object to jurisdiction in respect of the counterclaims.

The discussion revolves around the contractual and statutory interpretation of the action radius of choice of court. This also involves the classic issue of tort claims between contractual parties (compare Wikingerhof) with the judge opting for the one stop shop approach (distinguishing ia Ryanair Ltd v Esso Italiana Srl [2015] 1 All ER (Comm) 152): 42: ‘there is a clear causal connection [between the contractual and tort claims, GAVC], which seems to be sufficient for the purposes of a clause worded “in connection with“.’ In conclusion: [52]: ‘whether damages are recoverable for an allegedly wrongful arrest made in seeking security for claims under the charter, ..is a claim “in connection with” the charter’ hence the E&W courts have jurisdiction. [39]: this ‘allows a single accounting, as regards the overall financial position of the parties as a result of the legal relationship created between them by the charter, and their dispute about what rights and obligations properly flow from that legal relationship.’

Obiter jurisdiction on the alternative grounds, under English residual rules, is also accepted (with the interesting note of the absence, in the Convention, of a gateway for counterclaims, in contrast with Brussels I and Brussels Ia).

Coming then to lis pendens under Article 21 Convention, this is dismissed. [70] The arrest claim plainly does not involve either the same cause of action or the same object as the Defendant’s tort claims seeking to recover damages for wrongful arrest, which are advanced solely by way of counterclaim in E&W. The factual and legal foundation for that counterclaim needs, on any view, to travel substantially beyond the matters the Claimant relies on for its own cause of action and the object of the counterclaim is to recover damages.

Neither [73] is an acknowledgment of service in the Gibraltar arrest proceedings does not amount to a submission to that jurisdiction which would preclude the Defendant from raising its distinct tort claims in E&W.

A stay on ‘related proceedings’ (Article 22 Convention) is also rejected for the reasons listed at [83]. Core reference here is Research in Motion v Visto [2007] EWHC 900 (Ch).

Geert.

EU Private International Law, 3rd ed. 2021, Chapter 1 Heading 1.7, Chapter 2 para 2.375, 2.469.

Posted on

Air transport. The CJEU in Adriano Guaitoli v Easyjet. The not always clear delineation between the jurisdictional rules of the Brussels and Montreal regimes.

C-213/18 Adriano Guaitoli et al v Easyjet concerns the clearly complex relationship between the Brussels Ia jurisdictional regime, the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air, and the EU’s flight compensation Regulation 261/2004.

Montreal Article 33 determines which court has jurisdiction to hear an action for damages against an air carrier falling within the scope of that instrument. The reference has been made in the context of a cross-border dispute between an airline and a number of passengers, in relation to sums claimed by those passengers both by way of standardised compensation under Regulation 261/2004 and by way of individualised compensation for damage caused to them by the cancellation of an outward and a return flight, both operated by that airline.

Saugmandsgaard ØE had advised that the two instruments should be applied distributively, according to the nature of the relevant head of claim. The Court has followed: the court of a Member State hearing an action seeking to obtain both compliance with the flat-rate and standardised rights provided for in Regulation No 261/2004, and compensation for further damage falling within the scope of the Montreal Convention, must assess its jurisdiction, on the first head of claim, in the light of Article 7(1) BIa and, on the second head of claim, having regard to Article 33 Montreal.

This is also the result of Articles 67 and Article 71(1) BIa which allow the application of rules of jurisdiction relating to specific matters which are contained respectively in Union acts or in conventions to which the Member States are parties. Since air transport is such a specific matter, the rules of jurisdiction provided for by the Montreal Convention must be applicable within the regulatory framework laid down by it.

Note that per Article 17(3) BIa the consumer section ‘shall not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation’ (see also C‑464/18 Ryanair). The rule of special jurisdiction for the supply of services, A7(1)(b) BIa, designates as the court having jurisdiction to deal with a claim for compensation based on air transport contract of persons, at the applicant’s choice, that court which has territorial jurisdiction over the place of departure or place of arrival of the aircraft, as those places are agreed in that transport contract; see also C-88/17 Zurich Insurance.

The Court further held that Article 33 Montreal, like A7BIa, leads to the direct appointment of the territorially competent court within a Montreal State: it does not just just identify a State with jurisdiction as such.

The combined application of these rules inevitable means that unless claimants are happy to sue in Mozaik fashion, consolidation of the case will most likely take place in the domicile of the airline. In the Venn diagram of options, that is in most cases the only likely overlap.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2, Heading 2.2.11.1.

Posted on

Trading Together For Strong and Democratically Legitimized EU International Agreements

I am happy to post here the link to the statement which I signed together with 62 colleagues from various walks of (trade) life, on the EU’s modus operandi for the signature of trade agreements.  Post-CETA, we strongly believe that current procedures, when properly implemented, ensure democratic legitimacy for the EU’s international agreements at multiple levels. The statement is available in English, French and German: EU noblesse oblige.

Geert.

 

Posted on

CMR and the Brussels regime. The UKSC applies Nipponkoa in BAT /Essers.

Confession time: when teaching the general conflicts course I tend to simply say about Article 71 of the Brussels I Regulation (unchanged in the Recast): ‘it’s complicated’. I have also briefly flagged the Article in my posting on Nickel and Goeldner. I suppose I should not be quite so shy in addressing the relationship even in an introductory conflicts class for, essentially, it is not that complicated at least form a hierarchical point of view. Article 71 mirrors Article 351 TFEU which states that any rights or obligations arising prior to the TFEU shall not be affected by it unless the agreements are not compatible with the TFEU. At stake therefore is a review by the courts whether international agreements between the Member States prior to the creation of the EU, are compatible with the TFEU.

In [2015] UKSC 65  BAT Denmark v Kazemier and BAT Switserland v Essers, the United Kingdom Supreme Court had to carry out this exercise vis-a-vis the 1956 CMR Convention –   the Convention on the Contract for the International Carriage of Goods by Road. As Steven Baker notes, Lord Mance kicks off his judgment with the rather delightfully accurate ‘Cigarettes attract smokers, smugglers and thieves’. Tobacco manufactuters are also of course active litigators hence providing us with repeated opportunity to review case-law on a wide variety of contractual and other matters.

In the two appeals, one container load was allegedly hi-jacked in Belgium en route between Switzerland and The Netherlands in September 2011, while another allegedly lost 756 of its original 1386 cartons while parked overnight contrary to express instructions near Copenhagen en route between Hungary and Vallensbaek, Denmark.

The consignors (two of BAT’s corporate vehicles) are claiming against English main contractors who undertook responsibility for the carriage and against sub-contractors in whose hands the cigarettes were when the alleged losses occurred. The carriage was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (“CMR”), given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965.

English law and English jurisdiction are said to offer the advantage that such duty and/or taxes are recoverable in a CMR claim against carriers, which is not the case in some other jurisdictions (at 4).

Citing (and reading in a particular way) CJEU precedent, in particular  Nipponkoa Insurance Co (Europe) Ltd v Inter-Zuid Transport BV (DTC Surhuisterveen BV intervening), C-452/12, the Supreme Court held (at 57) that CMR represents a balanced jurisdictional régime adopted across a wide-range of some 55 states, only half of which are Union member states. It did not regard its tailored balance as impinging on any of the principles of Union law which the CJEU would have it check against.

CMR applies therefore and under relevant English application, neither of the defendants can be sued in England.

Geert.

Posted on

Landmark judgment in the making. High Court refers to Luxembourg, demarcation of Moroccon territory viz Saharawi.

How exactly is the EU bound by public international law? What is the justiciability of acts of foreign sovereign nations in EU courts? To what extent can an individual rely on customary or other sources of public international law, in national courts or at the CJEU?  All of these questions often puzzle non-lawyers (if something is illegal due to a higher rule, how can the lower rule still be in existence) and lawyers alike. At the EU level, things are complicated due to the hybrid (OK: sui generis) nature of the EU, and its complicated relationship with international law.

In Western Sahara Campaign UK, claimant is an independent voluntary organisation founded in 1984 with the aim of supporting the recognition of the right of the Saharawi people of Western Sahara to self-determination and independence and to raise awareness of the unlawful occupation of the Western Sahara. Defendants are the Inland Revenue, challenged for the preferential tariff given on import to the UK of goods that are classified as being of Moroccan origin but in fact originate from the territory of Western Sahara. The second challenge is brought against the Secretary of State for the Environment and Rural Affairs (DEFRA) in respect of the intended application of the EU-Morocco Fisheries Partnership Agreement to policy formation relating to fishing in the territorial waters of Western Sahara.

Essentially, it is claimed that defendants ought not to apply the relevant European agreements for these are, arguably, in violation of public international law. Claimant contends that Morocco has annexed the territory of Western Sahara and claims it as part of its sovereign territory despite decisions of the United Nations and the International Court of Justice (ICJ) that the people of Western Sahara have the right to self-determination. Accordingly it is said that Morocco’s occupation is in breach of the principles of international law and the Charter of the United Nations.

Under EU law, only the CJEU can establish the invalidity of EU law. Blake J decided to send the case to Luxembourg for preliminary review. Defendants opposed such reference primarily because they submit that the issues raised by the claimant are matters of public international law that the CJEU will decline to adjudicate on in the present circumstances. Precedent which they relied on is not unequivocal, however. This case therefore will be an opportunity for the CJEU (Grand Chamber, one would imagine) to clarify the relationship between EU and public international law.

Geert.

Posted on

Is something fishy in the State of Denmark? Faroe Islands WTO and UNCLOS litigation provides a honey pot to trade and EU lawyers

POSTSCRIPT 11 June 2014: An understanding reached today (11 June) means the case will now not reach the WTO. Pitty in many ways.  See EC press release  and WTO database.

Yummie. That’s how Trade lawyers and EU lawyers receive news of the Danish request for consultations  with the EU, over at the WTO, on behalf of the Faroe Islands. A separate action is underway with UNCLOS (although the docket there shows no sign as yet of the case). Disagreement over herring stock lies at the root of the offending EU Regulation, with sanctions imposed by the EU disallowing Faroese fishermen to land mackerel or herring in EU harbours or export such fish to the EU.

The EU justify their action on stock conservation grounds, thus bringing GATT Article XX into play. Action at the WTO is exciting both because it joins a growing list of actions related to domestic regulatory authority, and because it is unheard of for one EU Member to take another to the WTO (Faroe’s specific status under EU law explains this, however even in EU law this terrain is quite uncharted).

As sources at the WTO say: ‘it’s a really interesting case’: that quote must be in the running for understatement of the year. Sources at the EU suggest no one had expected Denmark’s WTO filing to actually materialise.

Geert.

Posted on

How ‘trade related’ is the Agreement on Trade-Related Aspects of Intellectual Property Rights? The ECJ in Daiichi Sankyo v Demo

In  Daiichi Sankyo v Demo (most likely ‘Demo’ in shorthand), the Court of Justice held last Thursday, 18 July. One of the main issues was the extent of Article 207 TFEU on the EU’s common commercial policy, vis-a-vis the TRIPS Agreement. Article 207 grants the EU exclusive competence (and the European Commission a very strong hand) in ‘common commercial policy’.

By its first question, the referring Greek court asked essentially whether Article 27 of the TRIPs Agreement falls within a field for which the Member States have primary competence and, if so, whether the national courts may accord that provision direct effect subject to the conditions laid down by national law. The TRIPs Agreement was concluded by the Community and its Member States by virtue of shared competence. At the time, for the EU to be able to exercise exclusive jurisdiction pre Lisbon, under the in foro interno, in foro externo principle, it would have had to have exercised its powers in the field of patents, or, more precisely, of patentability: roll-out of its internal powers on patentability, would have als led to exclusive power externally. The European Commission however suggested that the mixed agreement discussion (and the exercise, or not, of its internal powers), was no longer relevant, given that the Lisbon Treaty has now given it exclusive competence in the entire common commercial policy, including for intellectual property rights. Under the old Article 113 EC Treaty (later updated to Article 133 – many of us still speak of the ‘Article 113 Committee, which surely dates us!), intellectual property rights did not feature in the common commercial policy.

The ECJ conceded that of the rules adopted by the European Union in the field of intellectual property, only those with a specific link to international trade are capable of falling within the concept of ‘commercial aspects of intellectual property’ in Article 207(1) TFEU and hence the field of the common commercial policy. However it emphatically [and contrary to the view of Cruz Villalon AG] held that such is indeed the case for the TRIPS Agreement: ‘Although those rules do not relate to the details, as regards customs or otherwise, of operations of international trade as such, they have a specific link with international trade. The TRIPs Agreement is an integral part of the WTO system and is one of the principal multilateral agreements on which that system is based.’ (para 53).

Member States cannot therefore grant direct effect to the provisions of TRIPS, in accordance with national law. It is up to the ECJ to hold on such direct effect – or not, and in the absence of such direct effect, to interpret the provisions of EU law in line with the provisions of the TRIPS Agreement.

The judgment also reviews a number of substantial aspects of intellectual property law which I feel less entitled to comment on, I fear.

Geert.

%d bloggers like this: