Posts Tagged Germany
Two negatives a positive make? A brief report on anti anti-suit in (among others) continental courts.
A flag on anti anti-suit. Steve Ross reports here on the Paris Court of First Instance (Tribunal de Grande Instance) judgment in RG 19/59311 IPCom v Lenovo /Motorola granting a preliminary injunction. IPCOM GmbH & Co. KG is an intellectual property rights licensing and technology R&D company. Lenovo/Motorola a telecommunications company. As Steve writes, the French Court held that it had jurisdiction over the case with regard to a patent infringement claim and ordered Lenovo to withdraw the motion for an anti-suit injunction which that company had brought before the US District Court of the Northern District of California in so far as it concerns the French part of the patent.
Steve notes (I have not read the actual judgment) that ‘according to the French Court, the international French public order (ordre public) does not recognise the validity of an anti-suit injunction, except where its purpose is to enforce a contractual jurisdiction clause or an arbitral clause. Under all other circumstances, anti-suit injunction proceedings have the effect of indirectly disregarding the exclusive power of each sovereign state to freely determine the international jurisdictional competence of their courts.’
Peter Bert also reports last week a German anti anti-suit injunction at the Courts in Munchen, also for IPR cases.
For progress in the US anti-suit (one ‘anti’ only) application see order here.
Juve Patent report (as does Peter) that the High Court, too, has issued a (partial) anti anti-suit in the case however I have not been able to locate the judgment.
Note that continental courts (see in the French case) finding that anti-suit in general infringes ordre public is an important instruction viz future relationships with UK court orders post Brexit (should the UK not follow EU civil procedure).
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.1.
Airbus v Generali et al: The Court of Appeal on the intensity of review of choice of court under Article 25. Clear echoes of Turner v Grovit and West Tankers.
The claimant in this action and the respondent to the appeal, Airbus, claims declarations (1) that it is not liable to the defendant insurers for losses incurred in relation to an incident which occurred on 29 September 2013 in which an aircraft which it had manufactured sustained damage when landing in Rome and (2) that proceedings commenced against it by the defendants in Italy have been commenced contrary to the terms of an English exclusive jurisdiction clause. The clause in question is contained in an Airframe Warranties Agreement dated 8 July 2010 (“the Warranties Agreement”) concluded between (among others) Airbus and the defendants’ insured, the Italian airline company Alitalia. The issue on this appeal is whether the English court has jurisdiction over these claims by virtue of the jurisdiction clause. Moulder J held that it does and the defendant insurers (henceforth “the appellants”) now appeal.
Appellants contend, in outline, that the jurisdiction clause is of limited scope and does not extend to Airbus’s claims in this action, that the claim for a negative declaration falls within an arbitration clause in a different agreement, a Purchase Agreement dated 31 October 2005 which provides for ICC arbitration in Geneva, and that their own proceedings in Italy under articles of the Italian Civil Code are not within the scope of either clause. They say in addition that they cannot be in breach of an exclusive jurisdiction clause to which, as insurers, they were never parties and that, regardless of the true construction of the clause, there is no basis on which the English court can make a declaration against them (essentially, per Turner v Grovit and West Tankers).
Males LJ at 49: The standard of proof to be applied in determining whether the English court has jurisdiction under Article 25 of the Brussels Recast Regulation is that of a good arguable case. Kaifer Aislimentos was discussed as relevant authority. However, at 52: ‘sometimes it will be sensible, when a question of law arises on an application to challenge jurisdiction, for the court to decide it rather than merely deciding whether it is sufficiently arguable.’ Discussion of the contractual construction of the choice of court clause then follows at 62 ff and concludes in favour of a wide application in casu.
At 77 ff: The question whether the appellants’ claim in Italy falls within the scope of the English jurisdiction clause. Males LJ notes correctly that this depends on the nature of the claim brought in Italy, not on the defences which may be or have in fact been raised by Alitalia. At 82 he fairly swiftly concludes that even though the Italian claim is for breach of non-contractual obligations under articles of the Italian Civil Code, it is sufficiently connected to the Warranties Agreement to be within the scope of the exclusive jurisdiction clause. At 83 therefore: the commencement and pursuit of the Italian proceedings was contrary to the terms of that clause and that the English court has jurisdiction to determine that claim.
That then brings us to the discussion of what the English courts might potentially do to assist the party relying on the choice of court clause – given the unavailability of anti-suit per West Tankers. Noteworthy is that the new lis alibi pendens rule protecting choice of court following Brussels Ia, seemingly was not deployed or discussed in the Italian proceedings – at any rate there is no reference to any such discussion in the Court of Appeal judgment (other than perhaps at 84 which seems to suggest that amendment of claims brought the issue to the surface and this may not yet have been the case at the time of the discussion of the Italian proceedings).
A statement by the English courts finding infringement of the clause, would not just have an impact on cost rulings but would also ground a delictual claim. At 97 Males LJ settles the discussion whether such a declaration might be possible: ‘I can see no valid basis on which West Tankers can be distinguished. If it is held that commencement of the Italian proceedings by Alitalia would have been a breach of the jurisdiction clause in the Warranties Agreement, it follows that their commencement by the appellant insurers is a breach of an equivalent obligation in equity which Airbus is entitled to enforce and that the English court has jurisdiction to grant a declaration to say so.’
Interesting and highly relevant authority.
(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 126.96.36.199.2., Heading 2.2.9, Heading 188.8.131.52.
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.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.
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.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.
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  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 – as well as a cursory review of the consumer title.
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.
Succinct review is also made of the consumer title, with the finding that on its applicability there is an issue to be tried. At 58, Popplewell J suggests ‘wherever the dividing line is to be drawn in the case of investors, the result is likely to be heavily dependent on the circumstances of each individual and the nature and pattern of investment. At one end of the scale may be the retired dentist who makes a single investment for a modest amount by way of pension provision. At the other may be an investment banker or asset manager who plays the markets widely, regularly and for substantial amounts, for his own account. In between there are many factors which might influence the result, including the profile of the investor, the nature and extent of the investment activity, and the tax treatment of any profits or losses. The issue is fact specific.’ I do not think too much should be read in these examples – more so, the insistence that circumstances of the case do have an impact on the qualification as ‘consumer’.
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.
In Case C-228/11 Melzer v MS Global, the court at Dusseldorf requested the Court of Justice to clarify Article 5(3) Brussels I, the special jurisdictional rule for tort: on the basis of the application of this rule in Bier, a defendant may be sued in the place where the damage occurred (locus damni) and, if different, where the action (or inaction) leading to that damage occurred (the locus delicti commissi) . Article 5(3), like Article 5(1), determines not just international jurisdiction [i.e. the courts of which Member State have jurisdiction], but also territorial jurisdiction within that State.
Mr Melzer, who is domiciled in Berlin, was solicited as a client and looked after by telephone by the company Weise Wertpapier Handelsunternehmen (‘WWH’), whose registered office is in Düsseldorf. That company opened an account for Mr Melzer with MF Global UK Ltd (‘MF Global UK’), a brokerage house located in London, which traded in stock market futures for Mr Melzer in return for corresponding fees. Mr Melzer brought proceedings before the Landgericht Düsseldorf claiming that MF Global UK should be ordered to pay him damages equivalent to the difference between what he had paid out and what he had received in the context of those transactions, namely EUR 171 075.12, with interest. W.W.H. has not been implicated in the proceedings. In support of his claims, Mr Melzer maintained that he had not been sufficiently informed about the risks involved in futures trading, so far as options contracts were concerned, either by WWH or by MF Global UK.
The court at Dusseldorf rejected its jurisdiction on the basis of locus damni, arguing that this had taken place in Berlin (Melzer’s domicile), not Dusseldorf. It does however argue that it has jurisdiction on the basis of the locus delicti commissi, based on a combination of Article 5(3) Brussels I and the German Civil Code. Under Paragraph 830 of that Code (Bürgerliches Gesetzbuch), entitled ‘Joint participants and common purpose’:
‘(1) Where several persons have caused damage by the commission of an unlawful act undertaken in common, each of them shall be liable for that act. That is also the case even where it is impossible to determine which of the persons involved caused the damage by his act.
(2) Instigators and accomplices shall be treated as joint participants of the act.’
The attribution of W.W.H.’s actions to MS Global, in the view of the Dusseldorf court, gives it jurisdiction on the basis of Article 5(3). It asked the following of the Court of Justice:
‘In the context of jurisdiction in matters relating to tort or delict under Article 5(3) of Regulation [No 44/2001], where there is cross-border participation of several persons in a tort or delict, is reciprocal attribution of the place where the event occurred admissible for determining the place where the harmful event occurred?’
There is no trace in the Jurisdiction Regulation of any rule on attribution for acts committed in tort. There are however many arguments against allowing such attribution from creating extra fora:
The JR’s general rule determines jurisdiction in the domicile of the defendant. This principle may be subject to many exceptions, and to many a jurisdictional rule which trumps it, however it remains the principle. As emphasised repeatedly by the ECJ, exceptions to Article 2’s general rule must be interpreted strictly, for the exceptions would otherwise lead to too many potential jurisdictions. All the more so in the case at issue. Allegations of attributions are easily made, and it is not clear how far the Court can go in reviewing the merits of the argument at the jurisdictional stage.
A restrictive interpretation also serves the Regulation’s purpose, as emphasised by the ECJ, of predictability and reliability. A party may otherwise end up being pursued in courts in which it could not reasonably have foreseen to be sued.
Furthermore of course, the attributive rule at issue superimposes national law unto Article 5(3) JR. The Court’s emphasis on autonomous interpretation sits uneasily with that.
Alternative jurisdictional rules would have been possible to establish jurisdiction: Article 6’s rule on joinders (which would have required plaintiff to use WWH as an anchor defendant) comes to mind; as does Article 5(1)’s rule on contracts (although it may not have been easy to establish that the services under contract were or should have been provided in Dusseldorf).
The Court held on 16 May. It referred inter alia to Refcomp to emphasise the presumption against letting national law infiltrate the concepts used by the Regulation, and to many of the arguments referred to above, and held
Accordingly, the answer to the question referred is that Article 5(3) of Regulation No 44/2001 must be interpreted as meaning that it does not allow the courts of the place where a harmful event occurred which is imputed to one of the presumed perpetrators of damage, who is not a party to the dispute, to take jurisdiction over another presumed perpetrator of that damage who has not acted within the jurisdiction of the court seised.