Posts Tagged Forum shopping
I have often argued that the European Commission and by extension the EU’s Insolvency Regulation is wrong in taking as a starting point that forum shopping in insolvency matters as a rule needs to be discouraged. This aversion towards forum shopping is one of the main reasons for the UK and other Member States to keep Schemes of Arrangement and other restructuring devises well out off the reach of the Regulation. (The Brussels I recast for instance allows for much more strategic choice of court use).
Thank you Debra Dandeneau for flagging the US Bankruptcy Court, Southern District of New York’s decision in Ocean Rig. The Court essentially argues that to use forum shopping in a restructuring /insolvency case is absolutely acceptable provided it is done in good faith, particularly with a view to maximizing chances of survival and /or maximal recovery by the creditors. Note that the Court, in determining COMI for the various companies in the group, pays specific attention to the ascertainability, by third parties, of COMI.
A judgment to be applauded. And this posting, incidentally, is the 500th on this blog. To 1000 and beyond!
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.1, Heading 5.4.6.
As I turn my attention to clearing the blog queue, a light posting to begin with. Kind of light, that is, because for the plaintiffs at issue of course the issue is not at all a laughing matter. I am assuming readers will be somewhat aware of the Duke and Duchess of Cambridge having taken action against ‘Closer’ (more precisely, the publishers, SAS Mondadori), for invasion of privacy after photos appeared of the couple relaxing poolside in a French private residence. The photos were taken with sniper lenses some distance away. Like everyone else, I have not seen the photos.
Following an earlier injunction the couple have now been awarded damages. I have not managed to locateactual text of either injunction (going back to 2012) or last week’s judgment on the substance of the matter. If any reader can assist, I would be most obliged.
I often use the case in my very introductory class of private international law for it illustrates a wide plethora of conflicts issues: why did the couple decide to sue in France rather than England where it easily would have standing; how do the injunction proceedings in particular illustrate enforcement issues; where do Gleichlauf, forum shopping etc. come in. I will not reveal all the ifs and buts here for it would spoil the fun for future classes. Conflicts buffs will see the attraction of the case for teaching purposes.
Sinocore International Co Ltd v RBRG Trading: The commercial court on fraus, ordre public and arbitration.
Fraus omnia corrumpit (fraud corrupts all; alternatively formulated as ex turpi causa non oritur actio) is not easily applied in conflict of laws. See an earlier post here. In Sinocore International Co Ltd v RBRG Trading , the Commercial Court granted permission for the enforcement of a foreign arbitral award despite allegations that the transaction in question had been “tainted” by fraud: this is how the case is summarised by Mayer Brown and I am happy broadly to refer to their overview and analysis.
The Commercial Court’s relaxed attitude is another sign of strong support of the English courts for the New York Convention and its narrow application of ordre public.
An interesting case for comparative conflicts /arbitration classes.
Disciplining forum shopping not a relevant consideration under Brussels IIa. CJEU in Child & Family Agency v J.D.
I reported earlier on the AG’s Opinion in C‑428/15, Child and Family Agency. The Court held late October. It first of all confirms earlier case-law relating to the interpretation of the notion ‘civil matters’, with reference to the need for autonomous interpretation. ‘Civil matters’ may include adoption of child protection measures, including cases where those measures are considered, under the domestic law of a Member State, to be governed by public law (at 32).
More fundamentally, the question of forum non conveniens. Article 15(1) of Regulation No 2201/2003 provides that the courts of a Member State having jurisdiction as to the substance of a case may request the transfer of that case, or a specific part thereof, to a court of another Member State with which the child has a particular connection, if they consider that that court is better placed to hear the case, and where the transfer is in the best interests of the child. Article 15(3) lists exhaustively the factors that can be taken into account in this respect.
Not surprisingly of course the CJEU puts the interests of the child at the core of its analysis. The criterion of proximity (leading to the principal jurisdiction for the courts of the habitual residence of the child) can only be set aside if there are facts-specific considerations that to do so is in the better interest of the child.
Article 15(3) being an exhaustive list, the Court is not willing to consider any other consideration: the impact of the referral on the free movement rights of others, in particular the parents, can not be of any relevance, lest such impact in turn has an impact on the free movement of the child itself. Moreover, the concern of the Irish court that referred, namely that a transfer of children from the UK to Ireland (following the parent’s exercise of her freedom of movement), thus amending their habitual residence, may be an abusive form of forum shopping, cannot be a relevant consideration.
One cannot have one’s cake and eat it. Meaning once the cake has been eaten, it is gone and you no longer have it. (Apologies but this saying is so often misunderstood I thought I should clarify).
Anyways, the Flemish tax administration had something along these lines in mind when it recently ruled in a case involving a Liechtenstein Stiftung. Many thanks to De Broeck & Van Laere for bringing the ruling to my attention. The Inland Revenue generally employ quite a lot of deference towards trusts and Stiftungs of all kind. In the case at hand however it requalified the transfer of means from the Stiftung to the heirs of the deceased, as being of a contractual nature. That is because the deceased, upon creation of the Stiftung, had issued such precise instructions in the Stiftung’s by-laws, that the hands of the trustees (or equivalent thereof) had been tied. This essentially takes away a crucial part of the Stiftung’s nature, and no longer shields the assets from the (Flemish) taxman. The cake has been eaten.