Posts Tagged Forum
 EWHC 3196 (Ch) Kinsella et al v Emasan et al is not quite as extensive an analysis on choice of court as Etihad Airways v Prof Dr Lucas Flöther which I review here. Nevertheless the required ‘good arguable case’ standard is again responsible for the extensive discussion of the issue.
Issues are similar as under A25 BIa – in the case at issue it is the Lugano Convention (Article 23) that is engaged. Teverson M’s analysis is very much a factual, contractual one: the basis of Emasan’s (defendant, domiciled at Switzerland) jurisdiction challenge is that: it is domiciled in Switzerland; an alleged 2002 Agreement was an oral agreement which was not subject to any jurisdiction agreement; that alleged 2002 Agreement was not varied by 2006 and 2007 Deeds in such a way as to bring claims for breaches of its alleged terms within the ambit of the jurisdiction clauses contained in those later Deeds, but was superseded by them; there is no other basis upon which the jurisdiction of the English Courts is established in relation to claims based on the 2002 Agreement.
Whether choice of court was made for the 2002 agreement depended on whether A23 Lugano’s conditions were fulfilled that the agreement be made in writing or evidenced in writing; or in a form which accords with practices which the parties have established between themselves (the lex mercatoria gateway was not relevant at issue).
Every one of the written agreements made to give effect to claimant’s entitlement under the original, oral 2002 Agreement included a jurisdiction clause recognising the jurisdiction of the English Courts. A great deal of emphasis was placed on witness statements. At 101 Master Teverson holds that the agreement on jurisdiction under the 2002 agreement can properly in the circumstances of this case be regarded as evidenced by the jurisdiction clauses in the 2006 and 2007 Deeds.
(Handbook of) European Private international law, 2nd ed. 2016, Ch.2, Heading 2.2.9
In  EWHC 982 (Comm) Pan Ocean v China-Base Group, Hancock J reviews CJEU authority old and new on Article 25 Brussels I Recast at length, starting with Colzani and Segoura and ending with Profit Sim.
The sole but important focus of the discussion is on Article 25 (1)(a)s ‘in writing or evidenced in writing’ (the Article’s other options for the existence of expression of consent were not under discussion: see at 32).
His conclusion, justifiable in my view, is (at 32) that there is no authority (CJEU or otherwise) which would go so far as to say that agreement to an exclusive jurisdiction clause which was implied solely from the conduct of the parties suffices for the purposes of compliance with Article 25.
At 35 ff he considered obiter the issue of anti-suit aimed at Singapore, had he decided that there is a valid clause, in summary rejecting that, too, at 63.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.
Saey Home: The CJEU on choice of court and invoices, and place of performance of concession contracts.
C‑64/17 Saey Home, is yet another illustration of, mercifully for us conflicts lawyers, even fairly sophisticated businesses often fail properly to conclude commercial agreements. Here: what is said to be a semi-exclusive concession agreement, was concluded verbally only.
Saey Home & Garden is a company with its registered office in Kortrijk (Belgium), which specialises in the manufacture and sale, inter alia, of kitchen equipment and utensils bearing the trademark ‘Barbecook’. That company does not have a branch or establishment in Spain. Lusavouga has its registered office in Cacia, Aveiro (Portugal). Its premises are in Portugal. Its network covers Spain, inter alia, where it has no branch or establishment. Parties to the main proceedings concluded a commercial concession agreement concerning the exclusive promotion and distribution (with the exception of one client) in Spain.
First up, has choice of court in favour of the courts at Kortrijk (referred to by its French synonym Courtrai, but then without the ‘r’ in referral documents and by the CJEU) been validly made if this choice was only included in the general terms and conditions included in the invoices? Hoszig (where a jurisdiction clause is stipulated in the general conditions, such a clause is lawful where the text of the contract signed by both parties itself contains an express reference to general conditions which include a jurisdiction clause) and Leventis (the purpose of the requirements as to form imposed by Article 25(1) is to ensure that consensus between the parties is in fact established) are the most recent CJEU precedent referred to. Both of them build on standing CJEU principle: one must not be overly formalistic when assessing the existence of agreement, but one must be certain that such agreement exists. While it is up to the national court to assess this in fact, the Court does indicate it is unlikely to be the case when no written agreement has been made (neither initially nor subsequently confirming an earlier verbal agreement) and all one has are the invoices.
Choice of court being unlikely, next up is the application of Article 7(1) to determine which court has jurisdiction to hear an application for damages relating to the termination of a commercial concession agreement concluded between two companies, each established and operating in a different Member State, for the marketing of goods on the domestic market of a third Member State in which neither of those companies has a branch or establishment.
Referring to Corman-Collins, the Court classifies concession agreements as being service contracts, which per Article 7(1) second indent, leaves to be determined the ‘place in
a Member State where, under the contract, the services were provided or should have been provided;’. Note: the place in a Member State. Not different places. Per Wood Floor Solutions, when there are several places of performance of the obligation characteristic of a contract for the supply of services the ‘place of performance’ must be understood as the place with the closest linking factor, which, as a general rule, will be at the place of the main provision of services. This place of ‘main provision’ follows from the provisions of the contract and, in the absence of such provision, of the actual performance of that contract and, where it cannot be determined on that basis, the place where the agent is domiciled (still per Wood Floor Solutions). This specific determination is left to the referring court.
One imagines different national courts may have treated all of this as acte clair – except perhaps for the peculiarity of Spain being a Member State where neither of the parties has either domicile or branch.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 220.127.116.11.
Postscript 16 May 2018 Tanya Monestier article re same here.
Thank you Stephen Pittel for flagging 2017 SCC 33 Douez v Facebook Inc. Stephen also discusses the forum non conveniens issue and I shall leave that side of the debate over to him. What is interesting for comparative purposes is the Supreme Court’s analysis of the choice of court clause in consumer contracts, which it refuses to enforce under public policy reasons, tied to two particular angles:
- ‘The burdens of forum selection clauses on consumers and their ability to access the court system range from added costs, logistical impediments and delays, to deterrent psychological effects. When online consumer contracts of adhesion contain terms that unduly impede the ability of consumers to vindicate their rights in domestic courts, particularly their quasi-constitutional or constitutional rights, public policy concerns outweigh those favouring enforceability of a forum selection clause.’ (emphasis added)
Infringement of privacy is considered such quasi-constitutional right.
- ‘Tied to the public policy concerns is the “grossly uneven bargaining power” of the parties. Facebook is a multi-national corporation which operates in dozens of countries. D is a private citizen who had no input into the terms of the contract and, in reality, no meaningful choice as to whether to accept them given Facebook’s undisputed indispensability to online conversations.’
With both angles having to apply cumulatively, consumers are effectively invited to dress up their suits as involving a quasi-constitutional issue, even if all they really want is their PSP to be exchanged, so to speak. I suspect however Canadian courts will have means of sorting the pretended privacy suits from the real ones.
A great judgment for the comparative binder (see also Jutta Gangsted and mine paper on forum laboris in the EU and the US here).
Kaynes v BP PLC. A good Canadian illustration of forum non conveniens to shareholder pursuit of non-disclosure.
With many conflict of laws classes fresh underway, it is good to be reminded of the classics. Forum non conveniens was at issue in Kaynes v BP, at the Court of Appeal for Ontario. There is a pending class action in the U.S. District Court, Southern District of Texas. The class in that proceeding includes current plaintiff and other Canadian investors who purchased BP securities on the NYSE.
The judgment has ample and concise background, please refer to it for same. The Court of appeal has now lifted a stay, previously put in place on forum non conveniens ground, in light of changed circumstance. The U.S. District Court judge ruled that as the moving party and his proposed Canadian class were members of the class represented by the lead plaintiffs, he was not entitled to now assert a separate class action based upon a claim that the lead plaintiffs had not pursued. Second, the U.S. District Court judge ruled that the moving party’s claim was time-barred under the Ontario Securities Act. Plaintiff and other members of his proposed class are free to pursue individual claims in the U.S. District Court (not already represented in the class action) based on Ontario securities law, subject to any defences BP may advance, including a limitations defence. (Note that the US court therefore holds limitations to be part of the lex causae, not lex fori).
Since the US court do not claim exclusive jurisdiction over the litigation, and given that if a case were to go ahead in the US, it would be subject to Ontario law, the stay was lifted.
The case is a good illustration that forum non conveniens is live and evolving, not static.
Postscript 24 September 2015: the incoterm ‘ex works’ was at issue in Cimtrode The Electrode Company GmbH v Carbide BV at Gerechtshof ‘s-Hertogenbosch. Judgment (on appeal) was issued 1 September 2015. The court held inter alia that whether the incoterm was actually part of the agreement between parties, could only be judged in accordance with the lex causae. The agreement was a verbal agreement, and any choice of court which one of the parties claimed had been made, had not been confirmed in writing. Reference to relevant standard terms and conditions on the invoices sent later, following execution of the agreement, could not, the court held, be regarded as confirmation of the choice of court.
In Rhoonse Recycling & Service BV v BSS Heavy Machinery GmbH, the Court at Rotterdam first of all discussed the factual circumstance of a possible choice of court agreement between parties, in favour of the courts at Eberswalde (Germany). Such choice of court is made in the general terms and conditions of seller, BSS. Whether parties had actually agreed to these, was in dispute. Roonse suggests the reference on the front page of the order form to the general terms and conditions on the backside (‘umseitiger‘) was without subject for that back page was blank. The court therefore suggests that agreement depends on whether, as was suggested, the standard terms and conditions were attached (stapled, presumably) to the order form. Whether this was the case is a factual consideration which Rotterdam does not further entertain for even if the choice of court agreement is invalid, the court found it would not have jurisdiction under the only other alternative: Article 7(1) special jurisdictional rule for ‘contracts’.
Rhoonse suggest that the parties had agreed that the contract, a delivery of good, is performed in Rotterdam for that, it argues, is where delivery took place per the Incoterm CPT (carriage paid to). The CJEU has flagged the inconclusive effect of the mere use of Incoterms for the purposes of finding an agreement between parties under Article 7, in Electrosteel Case C-87/10 (in that case with respect to the use of ‘ex works’) and has generally insisted, per Car Trim Case C-381/08 that the courts need to make reference to all relevant terms and conditions in the agreement so as to determine the place of delivery.
Rotterdam in casu held the Incoterm CPT Rotterdam as being mostly a reference to costs, not place of delivery. Where it is impossible to determine the place of delivery on that basis, without reference to the substantive law applicable to the contract, that place at least for the sale of goods, the CJEU held, is the place where the physical transfer of the goods took place, as a result of which the purchaser obtained, or should have obtained, actual power of disposal over those goods at the final destination of the sales transaction. In casu, this was found to be in the geographical jurisdiction of the courts at Den Haag. Given that Article 7(1) does not merely identify the courts of a Member State but rather a specific court within a Member State, Rotterdam has no jurisdiction.
The case is a good reminder of the limited power of Incoterms to determine jurisdiction. Better have a specific choice of court clause (which here may or may not have presented itself here in the general terms and conditions of seller).