Posts Tagged Forum shopping
Derivatives’ forum shopping aka Gerichtshof Einkaufen. Suing Bayer of Germany in New York, applying German law.
Many thanks indeed Kevin La Croix for flagging the suit brought in New York by a group of Bayer AG shareholders, against Bayer (with seat at Leverkusen, Germany), concerning the not altogether successful purchase of Monsanto by Bayer. Kevin has excellent analysis and I am happy to refer.
Claimants of course pre-empt arguments of lack of subject-matter jurisdiction and, subsidiarily, forum non conveniens – please refer to Kevin’s overview for the arguments to and fro. Most interesting. It brought back to me echoes of the Australian case of Tiger v Morris, not because the subject-matter is similar (it is not) but because in this increasingly globalised world (despite Covid19), courts everywhere are increasingly asked to consider the reach of their courts in cases with competing local and foreign interests. Comity considerations underlying the historic roots of conflict of laws are being brought back to the fore, no doubt also partially as a result of the impact of third party financing, contingency fees etc.
One to keep an eye on. One wonders whether Bayer might be launching a related case in Germany, then triggering A33/34 considerations.
The background in Wright v Ver  EWCA Civ 672 is the mysterious history of Bitcoin and its creator, ‘Satoashi Nakamoto’. “Satoshi Nakamoto” is the pseudonym used by the person, or persons, who developed Bitcoin. On 31 October 2008 an academic paper was published under the name of Satoshi Nakamoto titled “Bitcoin: A peer to peer electronic cash system”. The academic paper described the manner in which the electronic cash system operated. Dr Craig Wright, claimant and appellant, is a national of Australia who now lives in Surrey. He has lived in the UK since December 2015 after emigrating from Australia. He also became a citizen of Antigua and Barbuda in 2017. He is a computer scientist with a particular interest in cryptocurrencies, including Bitcoin. Dr Wright says that he is Satoshi Nakamoto.
Roger Ver, defendant and respondent, is a bitcoin investor and commentator on bitcoin and other cryptocurrencies. Mr Ver was born in California, and raised in Silicon Valley. He moved to Japan in 2005. In 2014 he renounced his US citizenship and became a citizen of St Kitts & Nevis, although he continues to live in Japan. Mr Ver does not accept that Dr Wright is Satoshi Nakamoto.
The judgment does not address whether Dr Wright is Satoshi Nakamoto.
Dr Wright claims that he was libelled by Mr Ver in a YouTube Video posted on the Bitcoin.com YouTube channel on about 15 April 2019, a tweet containing the YouTube Video posted on Mr Ver’s Twitter Account on 3 May 2019, and a reply on Mr Ver’s Twitter Account posted on 3 May 2019 some 8 minutes after the tweet from Mr Ver. The defamatory meaning of these publications is said to be that Dr Wright “had fraudulently claimed to be Satoshi Nakamoto, that is to say the person, or one of the group of people who developed Bitcoin”.
Never more (data produced were broken down over periods) than 7 of the total YouTube views were in the UK. 7% of Mr Ver’s Twitter followers are in the UK. By judgment dated 31 July 2019 Mr Justice Nicklin found that England and Wales was not clearly the most appropriate place in which to bring the libel claim in this action and made a declaration that the Court had no jurisdiction to hear the claim.
The Court of Appeal, Dingemans LJ leading, agreed. Brussels Ia is not engaged. The jurisdictional test is section 9 of the Defamation Act 2013 – I previously discussed it in Sadik v Sadik: ‘A court does not have jurisdiction to hear and determine an action to which this section applies unless the court is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.’
At 56 Dingemans notes that after Brexit, the Act’s reach will increase.
The first instance judge had argued inter alia that the evidence showed that Dr Wright was putting down roots in the UK and that would increase the reputational interests that Dr Wright had in this jurisdiction but that could not displace the global reputation that he enjoyed.
Dr Wright’s counsel submitted that the judge had set Dr Wright an impossible task by requiring him to adduce evidence of actual harm to his reputation in each candidate jurisdiction, and concluding that in the absence of such evidence Dr Wright could not satisfy the jurisdictional test. Further it was submitted that the judge had wrongly failed to carry out a comparative assessment as to whether each candidate jurisdiction was appropriate for the claim, and therefore failed to carry out the task mandated by s9.
Relevant factors for jurisdiction are discussed at 61 ff. Evidence will have to be shown of all the places in which the relevant statement has been published, as well as the number of times it has there been published. Targeting the publication at an English audience clearly will be an issue. Further elements include the availability of fair judicial processes in the other jurisdictions in which publication occurred. The available remedies from the Courts of the other jurisdictions may be relevant, as may be the costs of pursuing proceedings in each possible jurisdiction. Other factors that might impact on access to justice, for example language barriers, can be relevant. The location of likely witnesses is another feature that may be relevant. This list of factors is not exhaustive.
In a mercifully succinct manner, Dingemans J reviews all the elements and decides the test has not been met here.
A good primer for the 2013 Act.
Fletcher v Estee Lauder and Clinique. New York judge rejects forum non argument in asbestos litigation. Sheds an interesting light on the perception of England as a forum for non-occupational exposure.
Personal injury cases never make for light reading and Fletcher v Estee Lauder and Clinique is not an exception to that rule. Mrs Fletcher, aged 45, claims that her lifelong use of the Estee Lauder talc and face powder and Clinique loose face powder, starting with puffs of powder purchased by her mother in New York in 1976, followed by regular purchases in the city in later years, caused her to develop mesothelioma.
Thank you Leigh Day, who represent Mrs Fletcher, for reporting on the case. In a preliminary ruling, Justice Mendez rejected a forum non conveniens argument made by the cosmetics giants, who had argued that England is a more natural and suitable forum for the case.
The case is interesting for my readers who follow my reports in the ‘comparative’ binder, for it is not that routine for judges to list arguments against the suitability of England as a forum.
Arguments made pro forum non are on p.2, claimant’s arguments on p.3, and Mendez J’s criteria to dismiss (having earlier established per authority that the burden of proof to dismiss is necessarily high for defendants with a substantial presence in New York) on p.5. Note his reference to the absence of no win no fee (and claimant’s limited resources); absence of jury trial; limited and expensive discovery; and a general hesitation of the legal profession in bringing cases like these (non-occupational exposure claims) against manufacturers.
Most relevant and interesting.
In Representation of Lydian international Limited  JRC 049 MacRae DB refers to universality in insolvency proceedings only once, namely where he refers to authority at 20. Yet his approach in honouring the request for assistance, made by the courts at Ontario ‘on the basis of comity’, walks and talks like universality. This is of course reminiscent of Menon CJ’s recent speech on the issue, or similar decisions elsewhere.
‘Though there is no precedent in Jersey for a Canadian CCAA order or similar order being enforced or recognised in relation to a Jersey company, we had no doubt that we should assist the Canadian Court in this case. There were no reasons of Jersey public policy impeding the court making the orders sought. To the contrary, it is consistent with Jersey’s status as a responsible jurisdiction for the Royal Court to lend assistance in order to facilitate an international insolvency process in a friendly country that has a potential to benefit the creditors of the Lydian Group as a whole.’ The Deputy Bailiff also notes that key Jersey creditors and the Jersey corporation of the Lydian group itself were represented in the Canadian proceedings.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.
A quick note on  EWHC 893 (Fam) I and L (children), in which Mostyn J berates and effectively disciplines a father’s abuse forum and process shopping.
‘I pause at this point to reflect on the actions taken by the father. Not only did he act in bad faith, as I have explained, but he also was guilty not only of blatant forum shopping but also of process shopping. If the father had genuinely developed misgivings about the wisdom and merits of the parenting agreement signed by him on 5 August 2019 then the appropriate place to raise those misgivings was the court in South Africa [the habitual residence of the children, GAVC]. Instead, by a ruse de guerre he lured the mother and children to this jurisdiction where he immediately started proceedings in the forum which he considered to be most favourable to him. By striking pre-emptively he also selected the process which he considered most favourable to him. Had he merely retained the children on 3 January 2020 and awaited the mother to take steps in response she would, unquestionably, have raised a case under the 1980 Hague Convention on the Civil Aspects of Child Abduction. In such a process the welfare of the children, while being an important consideration, would not have been the paramount consideration. Instead, the court would have started with the position that the children should be returned to the place of their habitual residence unless the father could demonstrate a defence.’
In the end he held that under the Children Act, in which the welfare of the children is the paramount criterion, a return to their habitual residence (to be effected as fast as possible following the end of Covid-19 lock-down) is in their best interest, thus torpedoing the abuse. Clearly like in QD, the English courts do not appreciate cloak and dagger manipulation of forum or process.
Forum shopping and personal insolvency. The High Court (briefly) in Wilson and Maloney (in re McNamara). Is this the last UK reference to the CJEU?
 EWHC 98 (Ch) Wilson and Maloney (bankruptcy trustees of Michael McNamara), concerns mostly Article 49 TFEU (freedom of establishment) and Article 24(1) of the Citizens’ Rights Directive 2004/38 (equal treatment). (At 114) the critical question is whether the exclusion of pension rights on bankruptcy is something that can impact on the right of establishment, or is otherwise within the scope of Art 49 TFEU.
The substantive case at issue concerns the inclusion or not of in investment in a certain pension scheme, into the bankruptcy. My interest in the judgment lies in the succinct reference to forum shopping under insolvency regimes.
Mr McNamara was made bankrupt on 2 November 2012 on his own petition, presented that day. Prior to his bankruptcy Mr McNamara had been a high profile property developer operating primarily, if not exclusively, in the Republic of Ireland. But he and his wife had moved to London in July 2011, and the Court accepted that he had moved his centre of main interests (or COMI) from Ireland to England by the date of presentation of the petition.
Nugee J decided to refer to the CJEU for preliminary review (this having happened on 23 January, clearly one of the last if not the last UK reference to go up to the CJEU). Whether COMI was moved for forum shopping purposes is not likely to feature in the eventual judgment – for there does not seem to be any suggestion that the move of COMI to England had not been properly established.
Update 27 May 2020 for the French view on the nature of Bitcoin, see the decision of the courts at Nanterre of February 2020.
Update 21 January 2020 for the cryptoassets issue, see AA v Persons Unknown & Ors, Re Bitcoin  EWHC 3556.
Happy 2020 reading, all!
At the back of my mind I have a number of interesting examples of the English Courts and English law’s awareness of the relevance of courts and substantive law in regulatory competition. I post them here together by way of illustration.
Sir Vos’ speech on how English law on cryptoassets should develop so as to boost the
confidence of would-be parties to ‘smart’ legal contracts; a further analysis of same by the ‘UK jurisdiction taskforce’, and Outer Temple’s reaction to ditto.
Also however RPC’s review of Davey v Money  EWHC 997 (Ch), in which Snowden J declined to cap a litigation funder’s liability for adverse costs at the amount of funding provided: essentially adding a potential risk to be considered by third-party litigation funders and illustrating that attractive as England may be as a forum for litigation, the sector is not a free for all.
Finally, the English courts are not of course alone in the realisation of the issues: witness this 2017 report by the French Supreme Court: ‘”Le juge et la mondialisation”.
Canadian recognition of Syncreon Group English Scheme of Arrangement underscores new markets for restructuring tourism.
An essentially Dutch group employs English restructuring law and has the resulting restructuring recognised in Canada. Need one say more to show that regulatory competition is alive and well and that the UK, England in particular need not fear a halt to restructuring forum shopping post Brexit.
Blakes first alerted me to the case, the Initial recognition order 2019 ONSC 5774 is here (I have not yet managed to locate the final order). Insolvency trustee PWC have a most informative document portal here. See also the Jones Day summary of the arrangements here. The main issue of contention was the so-called third party release in favour of Syncreon Canada which could have bumped into ordre public hurdles in Ontario as these clearly have an impact on the security of underlying debt. The way in which the proceeding are conducted (fair, transparent, with due consideration of minority holders etc.) clearly have an impact on this exercise.
(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5.
In  EWHC 2776 (Fam) Ali v Rodrigues, claimant appreciated that the date of petition to divorce and date of and English respectively Scottish decrees are highly important to the husband’s immigration status. One way in which a former EEA family member can retain right of residence is if the marriage exceeded 3 years.
The husband was in Pakistan from 10th January 2016 to 18th February 2016. A certificate of entitlement to a divorce was issued on 21st March 2016 and decrees nisi and absolute were pronounced in the Romford (England) Family Court on, respectively, 12th April and 27th May 2016. That was the English decree. On 14th December 2016, the Home Office notified the husband that it was revoking his residence card on the basis that he was no longer a family member of an EEA national. The wife remarried in 2016, following the English decree and has sponsored her second husband’s application for leave to remain. The husband petitioned for divorce in Scotland on 27th September 2016, three years and five months after the date of the marriage and at least two years and three months from the date of the separation. On 6th November 2017, the Edinburgh Sherriff Court and Justice of the Peace Court pronounced the decree absolute, which is the Scottish decree.
If the English decree stands, the marriage will have lasted less than 3 years. If the Scottish decree stands, 3 years will have been exceeded. The husband essentially argues that the English decree is tainted by irregularity of service upon him. Lieven J held that the English decree should stand, on the basis that when it comes to failures related to service, it is appropriate to look at the nature of what went wrong and where the prejudice, if any, lies (at 36 ff). The wife took reasonable steps; and there are indications that the husband was trying to avoid service.
Given irregularities in service the English decree is voidable, but not void in the discretionary opinion of the court: the consequences of setting aside the English decree would more severe than that of the Scottish decree’s invalidity. If the English decree does not stand, the wife’s second marriage would have been made at a time when the first marriage persisted. That would be a very serious impact on her, her second husband and the child.
Sadik v Sadik. Domicile, libel tourism and the absence of party autonomy in the Defamation Act 2013.
Update 7 November 2019 for a second What’sApp defamation case under the common law see 5 November Tallha Abdulrazaq v Nibras Hassan  EWHC 2930 (QB) – where jurisdiction was not an issue.
In  EWHC 2717 (QB) Sadik v Sadik, the claim is one in libel. Claimant is a businessman and philanthropist who lives in Dubai and spends 30 to 35 days in London each year. Claimant and Defendant are brother and sister in law. Defendant has a house in Kuwait with her husband. Until at least 19 September 2017 she lived in London, whilst also maintaining a house in Kuwait.
Defendant is prepared to accept for the purposes of this application that the relevant date for determining domicile is the date proceedings were commenced, ie 26 September 2017: see inter alia JSC BTA Bank v Mukhtar Ablyazov. (Upheld on Appeal). Should no domicile in the UK (or another EU /Lugano State) be upheld, forum non conveniens kicks in.
The UK Defamation Act 2013 (the DA 2013) was entered precisely to address libel tourism in the UK. It reads in relevant part (Section 9)
“Action against a person not domiciled in the UK or a Member State etc
(1) This section applies to an action for defamation against a person who is not domiciled
(a) in the United Kingdom; (b) in another Member State; or (c) in a state which is for the time being a contracting party to the Lugano Convention.
(2) A court does not have jurisdiction to hear and determine an action to which this section applies unless the court is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement.
(3) The references in subsection (2) to the statement complained of include references to any statement which conveys the same, or substantially the same, imputation as the statement complained of.
(4) For the purposes of this section –(a) a person is domiciled in the United Kingdom or in another Member State if the person is domiciled there for the purposes of the Brussels Regulation; (b) a person is domiciled in a state which is a contracting party to the Lugano Convention if the person is domiciled in the state for the purposes of that Convention.”
Defendant says that the Claimant cannot possibly satisfy the test in s 9(2). That is because Claimant in her view does not complain of any publication within this jurisdiction. She submits that s 9 implicitly requires the words complained of to have been published in England and Wales: ‘of all the places in which the statement complained of has been published…’. In effect, she says that s 9 means that this court does not have jurisdiction to hear a claim against a defendant not domiciled in the jurisdiction (or within a Brussels/Lugano state) for a claim in respect of solely foreign publication. In the alternative, if is necessary for the court to compare jurisdictions to determine which is the most appropriate forum for trial Defendant submits that the burden is on the Claimant to demonstrate that England and Wales is clearly the most appropriate forum, and there is no realistic prospect of him being able to discharge that burden. She points in particular to the fact that both of the parties are based in the Middle East, as are all of the publishees of the What’sApp Messages concerned, save for one, who is based in the United States.
Claimant submits that Defendant has submitted to the jurisdiction and so can no longer dispute the Court’s jurisdiction under s 9 of the DA 2013, or otherwise. Further or alternatively, he submits that provision is of no assistance because she was domiciled within the jurisdiction at the relevant time.
At 55 Knowles J holds that failure by a defamation defendant to follow the procedure in Part 11 of the civil procedure rules, for contesting jurisdiction under s 9 does not mean that her right to make a jurisdictional challenge under that section has been waived. ‘Section 9(2) is in mandatory form. Where the defendant is not domiciled within one of the specified jurisdictions then s 9(2) provides (emphasis added), ‘A court does not have jurisdiction to hear and determine an action to which this section applies unless …’. In my judgment jurisdiction under s 9 cannot be conferred by waiver, submission or consent. It is concerned with the subject matter of the suit and not with personal jurisdiction over the defendant.’ In the DA 2013 Parliament in other words inserted mandatory rules on jurisdiction which are not within the remit of party autonomy.
At 60 ff then follows the analysis of ‘domicile’ for natural persons under English law (following Article 62 Brussels Ia’s deference to national law), leading to a conclusion of domicile in the UK at the relevant time.
The remainder of the case discusses grounds for summary dismissal on the grounds of substantive English libel law.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.10