Posts Tagged Germany

Jabir and others v. KiK Textilien und Non-Food GmbH. German court kicks supply chain CSR litigation into the long grass. Questions on Statutes of limitation under Rome II left out in the open.

Jonas Poell, Julianne Hughes-Jennett, Peter Hood and Lucja Nowak reported and succinctly reviewed Case No. 7 O 95/15 Jabir and Others v Kik early January – the ‘next week’ promise in my Tweet below turned out a little longer.

Survivors of a fire in a Pakistani textile supplying factory are suing Germany-based KIK as the “main retailer” of the merchandise produced in the Pakistani premises. Jurisdiction evidently is easily established on the basis of Article 4 Brussels Ia.

As Burkhard Hess and Martina Mantovani note here, claimants are attempting to have KIK held liable for not having promoted and undertaken, in practice, the implementation of “adequate safety  measures” in the Pakistani factory (producing clothes), thus breaching an engagement  they undertook in a Code of Conduct applicable to its relationship with its contractual  counterpart.

Prof Hess and Ms Mantovani’s paper ‘Current developments in forum access: Comments on jurisdiction and forum non conveniens European Perspectives on Human Rights Litigation’ incidentally is an excellent stock taking on the issues surrounding mass tort (human rights) litigation.

The Dortmund court held that the case is time-barred under Pakistani law which was the lex causae per Rome II, Regulation 864/2007. Now, I have not had access to the full ruling (lest the 3 page ruling linked above is precisely that – which I am assuming it is not), so a little caveat here, however the court’s discussion of limitation periods is startlingly brief. Article 15 Rome II includes ‘the manner in which an obligation may be extinguished and rules of prescription and limitation’ in the scope of application of the lex causae’. Yet as the development inter alia of relevant English statute shows (discussed ia by Andrew Dickinson in his Rome II book with OUP), there are a multitude of issues surrounding statutes of limitation. One of them being Article 1(3) Rome II’s confirmation that evidence and procedure is not within its scope, another Article 26’s ordre public exception which certainly may have a calling here.

I have reported before on the difficult relationship between A1 and A15 in Spring v MOD and in PJSC Tatneft v Bogolyubov.

The court at Dortmund also rejects the argument that parties’ settlement negotiations before the claims were filed amount to choice of (German) law per Article 14(1). That would have triggered the 3 year German limitation period as opposed to the 2 year Pakistani one. Dr Jungkamp, the chamber president, argues that parties did not have any reflection on the Pakistani (or indeed German) limitation period in mind when they corresponded on the ex gratia out of court settlement, hence excluding the intention (animus contrahendi) required to speak of choice of law. I would suggest that is a bit of a succinct analysis to conclude absence of choice of law. Parties need not be aware of all implications of such choice for it to be validly made.

Appeal is possible and, I would suggest, warranted.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.7, Heading 4.8, Chapter 8, Heading 8.3.

 

 

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COMI in NIKI.

Thank you Bob Wessels for again alerting us (with follow-up here [update 15 January 2018 and here ; looks like regular revisits of prof Wessels’ blog are in order) and also reporting by Lukas Schmidt here) timely to a decision this time by the German courts in Niki, applying the Insolvency Regulation 2015, on the determination of COMI – Centre of Main Interests. Bob’s review is excellent per usual hence I am happy to refer for complete background.

Of particular note is the discussion on the extent of a court’s duty to review jurisdiction ex officio; the court’s correct assumption that in the event of foggy circumstances, the EIR’s presumption of COMI at the place of incorporation must have priority; and finally in my view the insufficient weight the court places on ascertainability by third parties.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

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A late entry on your timeline. Anas v Facebook leaves plenty of questions on internet jurisdiction.

I discussed this case with my students the day the judgment came out. Copy of the judgment has travelled with me far and wide. Yet I only now find myself getting round to posting on Anas v Facebook, at the courts at Würzburg back in February. Mr Anas came from Syria as a refugee and took a famous selfie with Frau Merkel. The photo later came to haunt him as fake news sites used it in connecting with accusations of terrorism. Mr Anas thereupon sued Facebook, requesting it to act more swiftly to remove the various content reporting on him in this matter. The Würzburg court obliged. I understand that in the meantime Mr Anas has halted further action against FB which I am assuming includes the appeal which FB must have launched.

Now, the interest for this blog lies not in the issue of fake news, but rather the jurisdictional grounds for the ruling. Mr Anas sued Facebook Ireland, not Facebook Inc. The latter, I would suggest, he might have done on the basis of the Brussels I Recast’s provisions on consumer contracts – albeit that the conditions for that title might not be fulfilled if Mr Anas became a FB user in Syria.

The court did not entertain the consumer title. It did uphold its jurisdiction on the basis of Article 7(2) of the Recast, as lex loci damni. (But without consideration of the Shevill limitation). Awkwardly, it then lest my German fails me, goes on to determine its internal jurisdiction on the basis of German civil procedure law. Plaintiff was domiciled in Berlin; not Würzburg. The judgment therefore turns into the proverbial cake and eating it: Article 7(2) does not just lay down jurisdiction for a Member State: it also identifies the very court in that MS that has jurisdiction. It cancels out internal rules of jurisdiction. With Mr Anas’ domicile in Berlin, Wurzburg as locus damni is not immediately obvious.

German speakers, if I am not reading this right please do comment.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.

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SCOTUS holding in Bristol-Myers Squibb BMS further restricts personal jurisdiction in State courts.

I have reported before (search tag ‘CSR’ or ‘ATS) on the personal jurisdiction cases in US litigation. The United States Supreme Court this morning held in Bristol-Meyers Squibb, BMS for short. For background see earlier reporting in this post. California was held not to have jurisdiction for claims brought by non-residents. In her dissenting Opinion justice Sotomayor notes the important impact of the ruling, suggesting that a corporation that engages in a nationwide course of conduct cannot now be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State.  Precedent evidently includes Bauman.

Judgment and opinion include many interesting takes on personal jurisdiction and how it should be managed.

Kenneth Argentieri and Yuanyou (Sunny) Yang have an interesting suggestion here, that ‘plaintiffs will continue to develop creative arguments to obtain jurisdiction over defendants in their preferred jurisdictions, for example, by arguing that a corporation’s registration to do business in a state or designation of an agent to accept service in a state constitute consent to the jurisdiction in that state. Circuit and state courts are currently split on this issue, and the United States Supreme Court has not yet ruled on it.’ We are not a the end of the personal jurisdiciton road.

Geert.

 

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Location of damage resulting from law firm’s alleged wrongful inducement in breach of exclusive jurisdiction clause. The High Court in AMT v Marzillier.

AMT v Marzillier [2014] EWHC 1085 (Comm) concerns special jurisdiction under tort, Article 5(3) of the Brussels I-Regulation, in the event of a loss of contractual right. Here: the loss, allegedly due to wrongful inducement by defendant (a law firm) to have a contractual claim heard in England. Contractual claims (alleged precarious investment advice) by a group of individuals had been settled by AMT in Germany.  Popplewell J concisely revisits the complete history of Article 5(3), from Bier via Kalfelis and Dumez France to Marinari and Kronhofer, however, leaving out Shevill. (See also below).

On the basis of said precedents he holds that the Courts of England do indeed have jurisdiction: ‘The place where the damage occurred as a result of MMGR’s allegedly tortious conduct was England, where such conduct deprived AMT of the contractual benefit of the exclusive jurisdiction clause which ought to have been enjoyed in England. ‘ (at 46). Counsel for AMT had also put forward an alternative ground which was that the payments for the settlements and costs came from England, and that England is where management time was wasted and future business lost.  Not so: Popplewell J: ‘The unquantified heads of loss for wasted management time and loss of business are not the primary heads of claim and do not constitute the main part of the damage said to have occurred as a result of the harmful event. They are not the damage. They are not initial, direct or immediate damage, but to the extent quantifiable and recoverable, merely the remoter financial consequences of the harm suffered in Germany. ‘ (at 52).

Per Shevil, jurisdiction of the English courts will be limited to the extent of damages suffered by the loss of the contractual benefit of the exclusive jurisdiction clause which ought to have been enjoyed in England: how exactly that ought to be quantified (if liability is at all withheld, of course) will not be a straightforward matter, one assumes. Geert.

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Germany v Commission re toys: ECJ confirms that recourse to precautionary principle is no walk in the park.

The ECJ this morning held in Germany v Commission (for context see my earlier posting). On 1 March 2012, the European Commission only partially (and temporarily) granted Germany approval for upholding stricter limits on limit values for lead, barium, arsenic, antimony, mercury, nitrosamines and nitrosatable substances in toys (for the decision, see here).
The ECJ stood with Germany only in its appeal against the EC’s decision on values for lead: this decision was internally inconsistent (acknowledgement of higher public health protection in the German measures while at the same time unfounded (and vague) limitation in time for those German measures). However for all other substances, the ECJ rejected Germany’s appeal. In doing so it emphasises the burden of proof which the precautionary principle implies (often misrepresented by opponents of the principle). The review of the available scientific evidence shows first of all the challenges associated with the different methods employed by Germany cq the EC. The latter’s measures employ migration limits (migration being the amount of toxic substances not just released from the product but effectively absorbed by the human body), while Germany’s measures rely on bioavailability (the amount of chemical substances released from the product and available for human absorption, even if not all of that is necessarily effectively absorbed).

The ECJ supports the room for Member States to have divergent opinions on risk than those of the EC, however, it needs to show that the national measures better protect human health and do so in a proportionate way. The crucial shortcoming in Germany’s proof turned out to be that its exposure scenarios were, in the view of the ECJ, unrealistic (and not supported by further scientific reporting): they imply simultaneous exposure of a child to all possible toy safety Directive scenarios: dry, brittle, powder-like or pliable toy material; AND liquid or stocky toy material; AND scraped-off toy material.

Hum. That such simultaneous exposure should necessarily be unrealistic is of course open to debate. Many of us have tales to tell of children achieving the impossible with toys clearly not designed for the game a child or group of children might at some point concoct . (Reminiscent of the inherently flawed furniture endurance tests displayed by large furniture chains: I have always thought that letting our family loose on the displayed piece of kitchen, bathroom or dining room furniture would be a more realistic test than an engineered testroom).

As often with risk assessment and risk management: the final conclusion almost always remains open to discussion.

Geert.

 

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A death prolonged or hope renewed? The ‘Apartheid’ twist to Kiobel and the ATS.

Update 19 June 2017. SCOTUS held today in BMS and rejected jurisdiction.

Update 8 May 2017. Transcipt of pleadings issued in BMS and background here.

Update 12 January 2017 Bristol-Myers, if certiorari will be granted, will further define the limits to the Daimler case-law. Notice how Bristol-Myers, in their certiorari submission, emphasise predictability for the defendant: a sentiment often found in EU private international law. Update 19 January 2017. Certiorari granted.

Update 6 January 2017 a new case has just been launched in New York, against Germany, re its colonial past in Namibia, which one imagines will test both sovereign immunity and ATS.

(Update 3 September 2014: case dismissed end of August). Previous Update 25 July 2014: Docket still shows active case but no further development).

(Update on linked development: in April 2015, SCOTUS denied certiorari in Chiquita, in whuich the CA had applied Kiobel restrictively).

In Kiobel, the USSC /SCOTUS held on the basis of extraterritoriality: under what circumstances may US courts recognize a cause of action under the Alien Torts Statute, for violations of the law of nations, occurring within the territory of a sovereign other than the United States? In focusing on this question (and replying in the negative), the SC did not entertain the question which actually led to certiorari, namely whether the law of nations recognises corporate liability.

Soon after the same USSC held in Daimler that general jurisdiction other than in the State of incorporation applies only (in the case of foreign companies) when a foreign company’s “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.”

In the ‘Apartheid litigation’ [Lungisile Ntsebeza et al v Ford General motors and IBM], the Southern District of New York picked up the issue where SCOTUS had left it: can corporations be held liable under the Alien Tort Statute (“ATS”) for violations of “the law of nations”‘? Scheindlin USDJ held they can on 17 April last [Xander Meise Bay has a good overview of the successive litigation here]. She firstly held that it is federal common law that ought to decide whether this is so – not international law itself (ATS being a federal US Statute). Next she argued that the fact in particular (withheld by Jacobs J in Kiobel) that few corporations were ever held to account in a court of law for violations of public international law was not instrumental in finding against such liability.

Counsel have now been instructed to brief on the ‘touch and concern’ test put forward by the Supreme Court in Kiobel, with the warning that they must show in particular that the companies concerned acted ‘not only with the knowledge but with the purpose to aid and abet the South African regime’s tortious conduct as alleged in these complaints’.  A strict timetable for arguments has been laid down whence the wait for further development should not be too long. (Update 25 July 2014: Docket still shows active case but no further development; Update 3 September 2014: case dismissed end of August).

Geert.

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