Tilman v Unilever. CJEU supports choice of court in GTCs even if no possibility of click-wrap is offered.

Update 29 November 2022 see here for questions between Marco Farina and myself re the CJEU’s discussion 28-31 of the applicability at all of Lugano, in light of the Withdrawal Agreement.

The CJEU last week held in C-358/21 Tilman v Unilever, the context of which I reviewed here. Krzysztof Pacula has initial analysis here and also refers to the application of the consent for choice of court issues in Ebury Partners.

One of the parties’ (Unilever’s) GTCs  are contained on a website, and their existence is ‘flagged’ in the written main contrac, without there bring a tickable box that click-wraps the agreement. Does that suffice to bind the parties as to the GTC’s choice of court (in favour of the English courts)? Note the courts were seized pre-Brexit; the UK’s Lugano troubles are not engaged.

The CJEU answers exactly along the lines I suggested in my earlier post: no impeding of commercial practice; need for the contracting party relying on the clause to have drawn the attention to the GTCs; need for that clause to be durably consultable and storable; finally it is the national court’s task to verify  the formation of consent in these factual circumstances. That there is no box that can be ‘ticked’ is not conclusive [52].

All in all a welcome support for commercial choice of court.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.

Ebuy Partners. Anti-suit viz Belgian proceedings re incorporation of e-mailed and /or hyperlinked general terms and conditions, with a serious miss on Rome I.

Ebury Partners Belgium SA/NV v Technical Touch BV & Anor [2022] EWHC 2927 (Comm) discusses ia whether choice of court and law included in general terms and conditions – GTCs, agreed (or not) by inclusion in email and /or e-mailed click-wrapeable hyperlink (this is a factual discussion), justifies an anti-suit injunction against Belgian proceedings.

Pre-Brexit such injunction would not have been possible. It has since of course been granted frequently; my most recent report of one was QBE Europe v Generali. Issuing an anti-suit post Brexit therefore is no longer surprising (commentators continue to suggest the EU should somehow shield EU proceedings from them). The application of the Rome I Regulation under retained EU law however does remain less discussed – and it is poorly executed in current judgment.

Anticipatory proceedings seeking a declaration of non-liability were launched unexpectedly (Belgian CPR requires no prior warning in any circumstance) in Belgium on 4 May 2022. The Belgian court later that month held that Ebury’s jurisdiction challenge  will not be dealt with separately, instead, as is standard, will be reserved for consideration at the same time as the merits.

The English proceedings were launched in July 2022. A critical question is whether Ebury can show, with a high degree of probability, that there is a jurisdiction agreement governing the dispute in question. Was the E&W jurisdiction clause contained in Ebury’s RA standard terms incorporated into the agreement between Ebury and TT? The factual circumstances are not conclusive, for there are suggestions of GTCS with choice of court sent by incorporation in an e-mail and /or by click-wrapeable  hyperlink similarly e-mailed.

The judge is correct to classify Rome I as retained law [83]. However the exclusion of choice of court agreements from that Regulation has somehow entirely escaped him and counsel, it seems.

Rather therefore than considering the issue under English conflict of laws (in EU Member States the issue is now subject to Article 25  Brussels Ia however that is irrelevant here), the judgment ventures into Article 10 Rome I’s putative law /von Munchausen /bootstrap principle, to identify English substantive law as the lex cause for the validity (including the issue of incorporation) of the choice of court. This leads after extensive discussion to a finding of incorporation under English law [102].

[103] ff Belgian law is signalled as a fall-back under Article 3(5) and 10(2) Rome I, however the judge essentially ignores that possibility (although he formally entertains it) by referring to a lack of indication on the facts that the counterparty agreed to the relevant clauses. He uses the ‘man on the Clapham omnibus’ formula to reach that conclusion: counterparty did consult or should have consulted the GTCs and there are no factual indications it disagreed with them. Conflicting Belgian law  expert evidence is not discussed.

Anti-suit was eventually granted.

If their apparent lack of raising the proper analysis (ie: no inclusion of choice of court) of the Rome I issue does not prevent defendants from appealing, they clearly should, to the extent the English conflict of laws approach to validity of choice of court, may lead to a finding of non-incorporation.

Geert.

Tilman v Unilever. A preliminary reference on flag-wrap B2B choice of court under Lugano.

A puzzling title perhaps I agree but let me explain. Thank you Matthias Storme for alerting me to the May 2021 preliminary reference by the Belgian Supreme Court, a reference now known at the CJEU as Case C-358/21 Tilman SA (of Belgium) v Unilever Supply Chain Company AG (of Switserland). Elucidation is asked of Article 23 of the Lugano 2007 Convention, the choice of court provision in the Convention.

The question referred, reads

Are the requirements under Article 23(1)(a) and (2) of [Lugano 2007], satisfied where a clause conferring jurisdiction is contained in general terms and conditions to which a contract concluded in writing refers by providing the hypertext link to a website, access to which allows those general terms and conditions to be viewed, downloaded and printed, without the party against whom that clause is enforced having been asked to accept those general terms and conditions by ticking a box on that website?

Article 23 Lugano 2007 is identical (mutatis mutandis: the only difference being that A23 Lugano refers to ‘States to the Convention’ instead of ‘Member States’) to the former Article 23 of the Brussels I Regulation, Regulation 44/2001.  A23 Lugano 2007 reads in relevant part

    1. If the parties, one or more of whom is domiciled in a State bound by this Convention, have agreed that a court or the courts of a State bound by this Convention are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; or (b) in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
    2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’.

The case at issue therefore does not question so-called ‘click-wrap’ consent to general terms and conditions – GTCs. These require the contracting partner to tick the relevant box which then ‘wraps up’ the agreement, including choice of court (and law). They were the subject of CJEU El Majdoub v CarsOnTheWeb. In that judgment, the CJEU held that in a B2B context, where the GTCs that have to be ticked can be saved and printed, they can be a ‘durable’ record of consent. (Not: consent itself: that is subject to a separate analysis, under the relevant lex causae, see below).

Rather, the title of this post calls the issue one of ‘flag-wrap’: one of the parties’ (Unilever’s) GTCs  are contained on a website, and their existence is ‘flagged’ in the written main contract. Does that suffice to bind the parties as to the GTC’s choice of court (in favour of the English courts; note the courts were seized pre-Brexit; the UK’s Lugano troubles are not engaged)?

The provisions on forum clauses are drafted in a way ‘not to impede commercial practice, yet at the same time to cancel out the effects of clauses in contracts which might go unread’ (Jenard Report), or otherwise ‘unnoticed’ (CJEU Colzani). The Brussels Convention and now the Regulation show great support for choice of court agreements and aim not to be as overly formalistic as the conditions imposed upon them.

Importantly, valid choice of court does require both a clearly and precisely demonstrated consent to be bound by choice of court and one or another Article 25-sanctioned form of expression of that consent. In Colzani the CJEU held [7]:

the requirements set out in Article [25] governing the validity of clauses conferring jurisdiction must be strictly construed. By making such validity subject to the existence of an ‘agreement’ between the parties, Article [25] imposed upon the court before which the matter is brought the duty of examining, first, whether the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties, which must be clearly and precisely demonstrated. The purpose of the formal requirements imposed by Article [25] is to ensure that the consensus between the parties is in fact established.

CJEU authority of Colzani and Coreck Maritime impose on the court the duty of examining ‘whether the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties’ and this had to be ‘clearly and precisely demonstrated’.

In practice, many courts conflate the check for consent with the check for expression of that consent and even the CJEU is not always clear in distinguishing it. In particular, absence of proof of any of the three possible avenues for expression of consent, included in Article 25(1) a, b or c, or then taken as an absence of consent, full stop. In Colzani, the CJEU held

[T]he mere fact that a clause conferring jurisdiction is printed among the general conditions of one of the parties on the reverse of a contract drawn up on the commercial paper of that party does not of itself satisfy the requirements of Article 17, since no guarantee is thereby given that the other party has really consented to the clause waiving the normal rules of jurisdiction. Where a clause conferring jurisdiction is included among the general conditions of sale of one of the parties, printed on the back of a contract, the requirement of a writing under the first paragraph of Article 17 of the Convention is fulfilled only if the contract signed by both parties contains an express reference to those general conditions.

The CJEU here, wrongly, seems to suggest lack of compliance with the expression of consent indicates a lack of that consent full stop.

Importantly, the CJEU in its rulings on what was then Article 23 and its Brussels Convention predecessor keeps utterly silent on national conditions relating to the actual formation or existence of consent. This, as regular readers of the blog will know, is at least for cases covered by Brussels Ia, subject to the lex fori prorogati, with renvoi, an issue which both national courts and the CJEU struggle with.

How then should the CJEU respond to the question (I asked my conflict of laws students at Leuven this question in a first exam on 18 June)?

Firstly, the Court should (and will) remind us of the Jenard /Colzani core instruction: the need to ensure consent is established, without being overly formalistic. Different from the context of the protected categories, there is no ‘weaker category’ to protect here.

Secondly,  there needs to be durability of the record of consent. That seems to be guaranteed here via the technicalities of the Unilever platform (downloadable GTCs) and in line with aforementioned CJEU Al Majdoub (the June students were not given technical details but should still flag durability).

Thirdly, despite the formal A23  requirement most probably being met, the consent requirement to me seems far from certain. In a click and wrap context ― lest there be issues of agency, duress, consumer protection laws etc. (in a context where the consumer title’s conditions are not met) which need to be held under the law applicable to consent ― the box ticking solidifies establishment of consent. In a mere flag and wrap context, that to me seems far less certain. If the reference were to a url where GTCs are properly and collectively displayed (if need be, updated with clear reference to chronology; see housekeeping), consent by an ordinary careful business (the proverbial (business)man on the Clapham omnibus). Yet if such as here, the link communicated in the formal contract refers to a platform where the  GTCs are not the first thing the contracting party sees, rather, where it is expected that that contracting party registers and /or downclicks, search and retrieve etc., that consent to me seems far less certainly established. [Again my students were not given the details on the platform which the reference includes, they did however have to signal the issue of consent).

Finally, under BIa, the lex fori prorogati, incl renvoi, would determine the above considerations of consent. Here, therefore, English law including its conflict of laws rules on choice of court. However seeing as the case is not subject to Brussels Ia, but rather to Lugano, the lex causae for consent will be an issue for the courts seized (here, the Belgian courts) to determine. Under the Belgian rules, this means application of Rome I (Rome I excludes choice of court agreements however Belgium’s private international law Act makes Rome I applicable even to carved-out contractual arrangements).

An interesting reference.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.

 

Court Amsterdam on the impact of the lex fori prorogati’s consumer laws for choice of court. A high net value Australian businessman sails away from Dutch jurisdiction.

I am catching up a little on recent case-law and am focussing it seems on the consumer section (see also yesterday’s post). This Court Amsterdam judgment published on 8 September caught my eye for it discusses choice of court, applicable law for the substantive validity of same, and ‘consumers’ in the context of buying yachts (now that I write that, in my exams I often have consumers buying yachts). Thank you Haco van der Houven van Oordt for signalling the case.

A purchase agreement for a yacht worth €5.4 million was signed in Singapore between buyer, an Australian living in Australia, and a Dutch shipyard. Seller’s GTCs mention

‘Article 17 – Settlement of disputes 1. Each agreement between [claimant] and the other party is subject exclusively to the laws of the Netherlands. 2. Any disputes which arise between the other party and [claimant], including disputes relating to the interpretation of these terms and conditions, will be put exclusively before the competent judicial body in Amsterdam.’

Pre-delivery was scheduled for December 2018 in Italy. Buyer changes his mind a week after signature, saying he will not be able to honour the agreed price. Vendor pursues the contractual penalty clause of 25% of the sale price. 

The judge finds the consent to choice of court to have been validly expressed on the basis of A25 BIa, under the classic Colzani formula. References to the GTCs had been properly made in the written contract. A duly diligent contracting party could and should have read these GTCs. Defendant’s argument that the choice of court clause in the GTCs should have been the subject of specific negotiation, is rejected [4.3.3].

As for the substantive validity of choice of court, the Dutch court (unlike eg the Belgian Supreme Court in Happy Flights) does add renvoi to the mix per recital 20 BIa. Dutch private international law (like the BE rules, nota bene) makes Rome I applicable to contracts even for the subject-matter excluded of its scope of application, among which choice of court agreements. Lex voluntatis therefore rules and the court holds that the choice of law for Dutch law for the contract as a whole, extends to choice of law for the forum clause [4.3.7].

The defendant finally alleges invalidity of the choice of court agreement on the basis of the lex fori prorogati’s rules on ‘potestative’ (unreasonably onerous) clauses. On this point, the defence succeeds: [4.3.9]: the defendant has to be qualified as a consumer under Dutch law, despite his high net value and the object of purchase, and the GTCs per article 6.236 n BW should have included a clause giving the consumer the option to opt for the default court with jurisdiction (which one that would be is not clear to me and the judgment does not specify it).

Seeing as the choice of court agreement is held to be invalid, that the defendant is domiciled in Australia, and in the absence of a relevant bilateral agreement between the two countries, Dutch residual rules are applied to assess alternative grounds for jurisdiction. There is no Dutch forum contractus, given delivery in Italy [4.5.1, with reference ia to CJEU Car Trim] and no other jurisdictional grounds have any traction.

Conclusion: no jurisdiction for the Dutch courts. The case is good material for the lex fori prorogati rule and for the realisation that even outside the context of the consumer title of Brussels Ia (defendant not being domiciled in the EU, that title was not triggered), consumer law plays an important role in choice of court.

Geert.

Royal Carribean v Browitt. On agency, consumer consent and choice of court Down Under.

Royal Caribbean Cruises Ltd v Browitt [2021] FCA 653 is a great addition to the comparative conflicts binder, particularly from the angle of ‘consent’ in business to consumer contracts. It also engages a classic tripartite relation between the consumer, signing a contract with a travel agent, whose GTCS in turn incorporate the GTCS of the carrier.

The case follows on from the December 2019 volcanic eruption at Whakaari.  (Mrs Browitt), for herself and as representative of the deceased estates of her late husband Paul and late daughter Krystal, and Stephanie (Ms Browitt), a daughter who survived the eruption with horrific injuries, are suing Royal Caribbean Cruises Ltd (RCCL), a Liberian registered company headquartered and operating in Miami, Florida, in the courts at Miami. There are applicable law and procedural advantages (incl discovery and trial (both on culpability and level of damages) by jury).

RCL Cruises Ltd (RCL) and RCCL apply for anti-suit in the FCA arguing that the Browitts were passengers on the Ovation of the Seas pursuant to a contract of carriage between the Browitts and RCL as the disponent owner and operator of the vessel. They seek a declaration that it was a term of the contract, signed at Flight Centre in Victoria, Australia, that any disputes between the parties would be subject to the exclusive jurisdiction of the courts of New South Wales.

The list of issues to be determined is long but I repeat it here anyways for they highlight the complexity of issues following a routine purchase of a cruise:

(1)    Was Flight Centre the agent of Mrs Browitt, RCL or both?

(2)    Were the RCL AU terms, including the exclusive jurisdiction clause, incorporated into the contract of carriage by: (a)    reference in the Flight Centre terms and conditions signed by Mrs Browitt on 14 February 2019? (b)    the text of a Royal Caribbean brochure? (c)    links on the RCL AU website? (d)    links in emails? (e)    links in the electronic guestbook?

(3)    As to the construction of the RCL AU terms: (a)    is RCL entitled to invoke the exclusive jurisdiction clause to restrain the Florida proceedings? (b)    is RCCL entitled to rely on the exclusive jurisdiction clause? (c)    did the purchase of insurance exclude the operation of the terms (cl 1)? (The respondents later dropped reliance on the purchase of insurance as excluding the operation of the exclusive jurisdiction clause, so this issue fell away.) (d)    does the contract of carriage apply to shore excursions (cl 25)? If not, does the exclusive jurisdiction clause nonetheless operate to restrain the Florida proceedings? (e)    does the exclusive jurisdiction clause permit a proceeding to be brought in the Federal Court of Australia sitting in New South Wales, and if not, what consequence follows from the commencement of this proceeding (cl 1, cl 37/38)? (f)    does the exclusive jurisdiction clause cover the Florida proceeding?

(4)    Is RCCL entitled to relief on the basis of the RCL AU terms?

(5)    Is the Florida proceeding vexatious and oppressive such that RCL and RCCL are entitled to an anti-suit injunction?

The judge held that although the Browitts were bound by the RCL AU terms, the Florida proceeding is not in breach of the exclusive jurisdiction agreement in those terms because RCCL is not a party to the agreement and RCCL does not enjoy the benefit of it. Also, there is no basis for the alternative case that the Florida proceeding is in any event vexatious and oppressive such as to justify an order restraining Mrs Browitt and Ms Browitt from pursuing it.

Terms and conditions were available on relevant websites and brochures, shown to and browsed by Mrs Browitt but not for the purposes of terms and conditions. Rather, as one would expect, for details of the journey, vessels etc. Unlike a quote, the eventual invoice included as part of the document three pages of booking terms and conditions. Some of those were highlighted in the copy made available to Mrs Browitt  Mrs Browitt could have read the GTCS but there was no inidcation she had or had been specifically pointed to them. Nothing in either version of the invoice, i.e., that which was printed for and signed by Mrs Browitt and that which was emailed by the agency, identifies which of RCCL and RCL was offering the cruise or operating the vessel.

The judgment, which I would invite readers to consult, eventually boils down to limitations of ‘agency’, privity of contract, and clear determination of contractual clauses. It does not decide for the Browitts on the basis of a particular concern for the weaker party in a classic B2C transaction, rather on the need for parties clearly to think through their spaghetti bowl of overlapping arrangements and GTCs when hoping to rely on them in court.

Geert.

TWR v Panasonic. Obiter consideration of A34 Brussels Ia forum non light. Hamburg court likely to have to take up that baton in some form.

Update 29 October 2021 the decision was upheld upon appeal.

TRW Ltd v Panasonic Industry Europe GmbH & Anor [2021] EWHC 19 (TCC)  adds to the slowly developing case-law on Article 34 Brussels Ia’s forum non conveniens light, on which I have reported at each occasion the Article to my knowledge has been applied (most recently in Ness Global Services).

The defendant Panasonic companies are based in Germany. Panasonic’s Group headquarters are in Japan. TRW is the English subsidiary, based in Solihull, of a German group of companies, ZF Group. The defendants say the parties agreed to German law and exclusive jurisdiction of the Hamburg court over any claim by TRW arising from supply of the resistors. TRW says the parties agreed to English law and jurisdiction.

There are related proceedings in Michigan, with judgment expected in about April 2021.

Kerr J decides at 55 ff here was valid A25 choice of court and hence jurisdiction for the courts at Hamburg, following the usual discussion on whether and if so which choice of court has been agreed in to and fro messages, purchase orders, invoices, references to general terms and conditions and the like. The kind of housekeeping complications which I discuss ia here.

Then follows obiter the Article 34 discussion. Parties agree that if jurisdiction under A25 BIa is established by neither party, TRW was at liberty to sue in England as the place of delivery of the goods, under A7(1) BIa; and that for A34 purposes there is a related lis alibi pendens in Michigan. The discussion turned on whether the word “expedient” in A34(1)(a) bears the meaning “desirable, even if not practicable” or “both practicable and desirable”, given the inconsistent case-law in JSC Commercial Privatbank v. Kolomoisky, SCOR v Barclays, Municipio de Mariana,  Federal Republic of Nigeria v. Royal Dutch Shell plcand of course  EuroEco.

At 94 Kerr J seems to side with Kolomoisky and with not reading EuroEco as a rejection of same, however he does not take definitive sides or does not attempt to reconcile the judgments. At 95 he says he would have not exercised his discretion for a stay, for the reasons earlier listed by counsel for claimants: these were (at 92-93)

Mr Caplan strongly opposed any stay. He submitted that, assuming I have any discretion to grant a stay (contrary to his reserved position), I should not exercise it. The risk of irreconcilable judgments could not be eliminated, he argued. The Michigan case would shortly produce a judgment binding on neither party to the present claim and, probably, applying Michigan law.

There was no scope for issue estoppel or abuse of process because the parties were different and the law could be different. Neither party in this case had opted for Michigan as the chosen forum and Michigan law as the choice of law. If the outcome of the Michigan litigation helped to promote settlement of the present claim, that could happen anyway, without a stay, since this claim is still at an early stage; the first case management conference has yet to take place.

At 98 Kerr J summarises

I would refuse a stay. The first condition in article 34(1)(a) – the expediency condition – may well be met, subject to clarification of the test emerging from the case law. The second condition is met. The third is not. I am far from satisfied that a stay is necessary for the proper administration of justice.

Kerr J concludes at 99

defendants have undertaken to submit to the jurisdiction of the Hamburg court, subject to seeking a stay of proceedings in Hamburg to await the outcome of the Michigan proceedings.

The Hamburg court is likely to see A34 arguments return, lest of course the Michigan proceedings will be concluded, in which case res judicata, recognition, and irreconcilability of judgment might be a core concern.

We have fairly little, if growing (*makes a note to now really really finish that paper*) authority to work with on A34. All bits help.

Geert.

European Private International, 3rd ed. 2021, Heading 2.2.15.3.2, para 2.539 ff

JK Fabrications. Unbolted choice of court in GTCs simply cannot lead to proper forum consent.

JK Fabrications Ltd v Fastfix Ltd & Anor [2020] NIQB 63 is a good illustration of how not to draft choice of court (and governing law, in fact) provisions generally, let alone in general terms and conditions – GTCs. Albeit with a shaky obiter suggestion on identifying a court.

Tobsteel GmbH domiciled in Őhringen, Germany seeks to set aside a third party notice served on it on the ground that the Northern Irish courts have no jurisdiction to determine the third party proceedings brought by Fastfix, domiciled in Ireland.  Fastfix is the defendant in proceedings brought by JK Fabrications, domiciled in Northern Ireland.  In separate proceedings JK Fabrications Limited is sued by SMBJV, an unincorporated joint venture in respect of a major sewerage project in London.  Bolts are the common element in dispute in both cases; the bolts supplied by Tobsteel to Fastfix who in turn supplied these bolts to JK Fabrications.

As justifiably held by Larkin J, the choice of court upon which Tobsteel bases its argument, itself was not properly bolted. The clause at issue is included in a  “General Terms of Supply and Payment for TOBSTEEL GmbH” document which  General Terms of Delivery and Payment document in which clause VIII reads

“VIII. Place of performance, choice of forum, applicable legislation. 

 1.        The place of performance and choice of forum for deliveries and payments (including complaints regarding cheques or bills) and for all disputes arising between us and the purchaser from the purchase contracts concluded between us and him or her shall be Öhringen.  However, we shall be entitled to file a complaint against the purchaser at his or her residence or registered business address.

2.         The legal relationship between us and our customers or between us and third parties shall be governed exclusively by the legislation of the Federal Republic of Germany”

The judgment shows that Tobsteel itself in fact did not initially see clear as to which GTCs applied. In earlier affidavits, two more, and different, versions of GTCs were said to apply.

The first level of discussion was whether there had at all been consent to the GTCs. The judge held there had not been. At 16:

The instrument on which Tobsteel relies as the vehicle of agreement is a combination of the words “Subject to our general terms of business if requested a print can be provided” and Mr Connolly’s [of Fastifx, GAVC] email containing the words “Alex, this is O.K.”. This combination is too fragile to bear that weight.

This was not so much (at 17) because it could not be established that the clause had actually been consulted by Mr Connolly. Larkin J, in line with the Report Jenard:

While it is often a commercially necessary fiction that a party has ‘agreed’ terms that he may not have seen in advance, far less read, based on his signature indicating his consent to be bound by such terms or some other manifestation of acceptance, …

Rather, it has to be clear which version of what is actually referred to: at 17:

..it is observable that in those cases in which this commercially necessary fiction operates, it will be clear what the applicable terms are.

At 19-20:

If Tobsteel wished, as I find it did, to secure agreement on Clause VIII.1 with Fastfix it needed an adequate mechanism or instrument for obtaining that agreement.  In the event, and taking the evidence for Tobsteel at its reasonable height, Tobsteel sought to bind Fastfix in the documents referred to above to Tobsteel’s “general terms of business”.  Clause VIII.1 of June 2014 is not contained in a document entitled “general terms of business” but in a document entitled “General Terms of Supply and Payment for TOBSTEEL GmbH”.  One might properly say, further, that in 2017  Herr Gebert, insofar as he thought specifically about the matter, meant to refer to the June 2004 text, but whether he meant to or not, he did not refer to it so as to permit the creation of an agreement between Tobsteel and Fastfix that Clause VIII.1 should apply.

In none of the cases on Article 25 or its antecedents is there an example of a term incorporating X by reference being held to incorporate Y by reference and thus satisfy the requirements of [A25].

In conclusion, consent had not been clearly and precisely demonstrated. Again, this is a clear emphasis on the need for proper GTC filekeeping.

At 21 ff the judge obiter but in this case in my view wrongly, holds that even if he had found there to have been consent to the clause, it did not meet with the requirements of A25 BIa. As a reminder, the clause reads

 1.        The place of performance and choice of forum for deliveries and payments (including complaints regarding cheques or bills) and for all disputes arising between us and the purchaser from the purchase contracts concluded between us and him or her shall be Öhringen.  However, we shall be entitled to file a complaint against the purchaser at his or her residence or registered business address.

2.         The legal relationship between us and our customers or between us and third parties shall be governed exclusively by the legislation of the Federal Republic of Germany”

The judge argues that the proviso at 1 does not identify a court at all and that the choice of law proviso in 2 cannot come to the rescue (it could conversely, under Rome I) for choice of court and law as recently emphasised in Enka Insaat are to be looked at differently.

I agree 1 is an odd mix of anchoring locus solutionis typically done under A7(1) BIa, with what seems to be a unilateral choice of court pro Tobsteel; and that on that basis it might be vulnerable as choice of court under A25 (but it could be rescued under A7(1). I disagree that the name of a town that has a court (let alone a court; which the judge agrees with) needs to be included for it to be proper choice of court: name any town and local civil procedure rules will tell you the relevant court.

‘(A)n agreement on ‘Derry Recorder’s Court’ would satisfy the requirement of Article 25 that a court be agreed but that an agreement on ‘Derry’ would not.’: I do not think that is correct.

Geert.

EU Private International Law, 3rd ed. Feb 2021, 2.296, 2.315 ff

The CJEU in Wikingerhof on distinguishing tort from contract between contracting parties. No Valhalla for those seeking further clarification of Brogsitter, let alone De Bloos.

Update 25 November 10:38 AM:  Readers  may want to refer to the discussion posted to Tobias Lutzi’s view on the case, which I will not copy /paste here save for my initial reply: ‘I believe Tobias’ biggest take-away from the judgment is the Court’s emphasis on ‘indispensability’ of contractual interpretation for A(7)1 to be triggered (he will correct me if I am wrong).
As I argue in my review of the judgment, I think that’s a change of emphasis viz Brogsitter and e.g. Apple v eBizcuss rather than a change in nature of the CJEU approach.
However assuming one applies the authority that courts must not dwell too long on merits in assessing jurisdictional gateways, it does follow that A7(1) will only be engaged in those cases where the contract prima facie is overwhelmingly needed to solve the underlying dispute. This still leaves room for manoeuvre for the creative claimant (see also the AG’s points on forum shopping), but not as much as might have been expected prior to this judgment.’

 

The CJEU held yesterday (Tuesday) in C-59/19 Wikingerhof v Booking.com. I reviewed the AG’s Opinion here and the Court follows the AG’s minimalist interpretation. The case was held in Grand Chamber, which might have provoked expectations yet the judgment is not exactly a bang. Neither however can it be described a whimper. As I note in my review of the Opinion, the case in my view could have been held acte clair. The AG did take the opportunity in his Opinion to discuss many issues which the CJEU was bound not to entertain, at least not in as much detail as the AG did.

Let me first signal what I believe might be the biggest take-away of the litigation, if at least the referring court is followed. That is the Bundesgerichtshof’s finding that  there is no durable record of the alleged consent by Wikingerhof of the amended GTCs, including choice of court, effected via amendments on the ‘Extranet’, which is the portal via which the hotel may update its information and retrieve reservations. Booking.com claimed these amounted to a ‘form which accords with practices which the parties have established between themselves’ pursuant to Article 25(1)(b). Parties will still argue on the merits whether the initial consent to the primary GTCs was strong-armed because of booking.com’s dominant position.

With respect to to the jurisdictional issue, the CJEU in a succinct judgment firstly points to the need for restrictive interpretation. It points at 29 to the claimant being the trigger of A7(1) or (2). Without a claimant’s decision to base a claim on the Articles, they simply do not get to be engaged. That is a reference to the forum shopping discussion of the AG. Still, the court hearing the action must assess whether the specific conditions laid down by those provisions are  met.

At 32, with reference to Brogsitter, ‘an action concerns matters relating to a contract within the meaning of [A7(1)(a) BIa] if the interpretation of the contract between the defendant and the applicant appears indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of against the former by the latter’.  ‘That is in particular the case of an action based on the terms of a contract or on rules of law which are applicable by reason of that contract’ (reference to Holterman and to Kareda, with the latter itself referring to De Bloos). At 33  ‘By contrast, where the applicant relies, in its application, on rules of liability in tort, delict or quasi-delict, namely breach of an obligation imposed by law, and where it does not appear indispensable to examine the content of the contract concluded with the defendant in order to assess whether the conduct of which the latter is accused is lawful or unlawful, since that obligation applies to the defendant independently of that contract, the cause of the action is a matter relating to tort, delict or quasi-delict’.

At 32 therefore the CJEU would seem to confirm De Bloos’ awkward (given the Regulation’s attention to predictability) support for forum shopping based on claim formulation yet corrected by what is more akin to Sharpston AG’s approach in Ergo and the Court’s approach in Apple v eBizcuss, a judgment not referred in current judgment: namely that the judge will have to consider whether contractual interpretation is strictly necessary (the Court uses ‘indispensable’) to judge the case on the merits. Update 25 November 2020 as Tobias Lutzi notes here, it is the repeated (after its first use in Brogsitter) emphasis on ‘indispensable’ which might be the core clue of the CJEU: it would make the threshold for the 7(1) gateway in cases like these, high. A change in emphasis compared to Brogsitter, rather than one in substance.

Here, Wikingerhof rely on statutory German competition law (at 34-36): therefore the claim is one covered by Article 7(2).

The judgment confirms the now very fine thread between jurisdictional and merits review for the purposes of tort-based litigation between two contracting parties.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9. 3rd ed. 2021 para 2.469.

 

Wikingerhof v Booking.com. Saugmandsgaard AG on the qualification in contract or tort of alleged abuse of dominant position between contracting parties. Invites the Court to confirm one of two possible readings of Brogsitter.

Saugmandsgaard AG opined yesterday in C-59/19 Wikingerhof v Booking.com (no English version of the Opinion at the time of writing). At issue is whether allegations of abuse of dominant position create a forum contractus (Article 7(1) Brussels Ia) or a forum delicti (A7(2) BIa).

I published on jurisdiction and applicable law earlier this year and I am as always genuinely humbled with the AG’s (three) references to the handbook.  Wikingerhof submits inter alia that it only ever agreed to Booking.com’s general terms and conditions (‘GTCs’) because Booking.com’s dominant position leaves it no choice. And that it had most certainly not agreed to updates to the GTCs, effected via amendments on the ‘Extranet’, which is the portal via which the hotel may update its information and retrieve reservations.

At 16 of its referral, the Bundesgerichtshof holds acte clair and therefore without reference to the CJEU that there is no durable record of the alleged consent by Wikingerhof of the amended GTCs, including choice of court. Booking.com claimed these amounted to a ‘form which accords with practices which the parties have established between themselves’ pursuant to Article 25(1)(b). This finding echoes the requirements of housekeeping which I signalled yesterday.

In my 2020 paper I point out (p.153) inter alia that in the context of Article 25’s choice of court provisions, the CJEU in C-595/17 Apple v eBizcuss suggested a fairly wide window for actions based on Article 102 TFEU’s prohibition of abuse of dominant position to be covered by the choice of court. At 28 in Apple v eBizcuss: ‘the anti-competitive conduct covered by Article 102 TFEU, namely the abuse of a dominant position, can materialise in contractual  relations that an undertaking in a dominant position establishes and by means of contractual terms’. The AG as I note below distinguished Apple on the facts and applicable rule.

In the request for preliminary ruling of the referring court, CJEU C-548/12 Brogsitter features repeatedly. The Bundesgerichtshof itself is minded to hold for forum delicti, given that (at 24 of its reference)

‘ it is not the interpretation of the contract that is the focus of the legal disputes  between the parties, but rather the question of whether the demand for specific contractual conditions or the invoking of them by a company with an — allegedly — dominant market position is to be regarded as abusive and is therefore in breach of provisions of antitrust law.

In fact on the basis of the request, the court could have held acte clair. It referred anyway which gives the AG the opportunity to write a complete if  to begin with concise précis on the notion of ‘contract’ and ‘tort’ in BIa. At 38, this leads him to conclude inter alia that despite the need strictly to interpret exceptions to the A4 actor sequitur forum rei rule, these exceptions including the special jurisdictional fori contractus ut delicti, must simply be applied with their purpose in mind.

He calls it an application ‘assouplie’, best translated perhaps as ‘accommodating’ (readers may check this against the English version when it comes out) (viz tort, too, the AG uses the term assouplie, at 45, referring eg to CJEU C-133/11 Folien Fisher).

Further, the AG notes that in deciding whether the claim is one in contract, necessarily the claimant’s cause of action has an impact, per CJEU C-274/16 Flightright (at 61 of that judgment, itself refering to C‑249/16 Kareda which in turn refers to 14/76 De Bloos). The impact of claimant’s claim form evidently is a good illustration of the possibility to engineer or at least massage fora and I am pleased the AG openly discusses the ensuing forum shopping implications, at 58 ff. He starts however with signalling at 53 ff that the substantive occurrence of concurrent liability in contract and tort is subject to the laws of the Member States and clearly differs among them, making a short comparative inroad e.g. to English law, German law and Belgian /French law. (Michiel Poesen recently wrote on the topic within the specific context of the employment section).

The AG’s discussion of CJEU authority eventually brings him to Brogsitter. He he firmly supports a minimalist interpretation.  This would mean that only if the contractual context is indispensable for the judge to rule on the legality or not of the parties’ behaviour, is forum contractus engaged. This is similar to his Opinion in Bosworth, to which he refers. He rejects the maximalist interpretation. This approach puts forward that contractual qualification trumps non-contractual (arguably, a left-over of CJEU Kalfelis; but as the AG notes at 81: there is most certainly not such a priority at the applicable law level between Rome I and II) hence the judge regardless of the claimant’s formulation of claim, must qualify the claim as contractual when on the facts a link may exist between the alleged shortcomings of the other party, and the contract.

The maximum interpretation, at 76 ff, would require the judge to engage quite intensively with the merits of the case. That would go against the instructions of the CJEU (applying the Brussels Convention (e.g. C-269/95 Benincasa)), and it would (at 77) undermine a core requirement of the Brussels regime which is legal certainty. That the minimalist approach might lead to multiplication of trials seeing as not all issues would be dealt with by the core forum contractus, is rebuked at 85 by reference to the possibility of the A4 domicile forum (an argument which the CJEU itself used in Bier /Mines de Potasse to support the Mozaik implications of its ruling there) and by highlighting the Regulation’s many instances of support for forum shopping.

The AG then discusses abusive forum shopping following creative claim formulation at 88 ff. This  is disciplined both by the fact that as his comparative review shows, the substantive law of a number of Member States eventually will not allow for dual characterisation and hence reject the claim in substance. Moreover clearly unfounded claims will be disciplined by lex fori mechanisms (such as one imagines, cost orders and the like). This section confuses me a little for I had understood the minimalist approach to lay more emphasis on the judge’s detection of the claim’s DNA (along the lines of Sharpston AG in Ergo) than on the claim’s formulation.

The AG then continues with further specification of the minimalist approach, including at 112 a rejection, correct in my view (for the opposite would deny effet utile to A7(2), of the suggestion to give the A7(1) forum contractus the ancillary power to rule of over delictual (A7(2)) issues closely related to the contractual concerns.

Applying the minimalist test to the case at issue the AG concludes that it entails forum delicti, referring in support to CDC and distinguishing Apple v eBizcuss (which entails choice of court and relies heavily on textual wording of the clause).

It will be interesting to see which of the two possible interpretations of Brogsitter the CJEU will follow and whether it will clarify the forum shopping implications of claim formulation.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9.

 

Koksokhimtrans v Cool Consulting. The Dutch SC on E-mail proof and dispute resolution.

Update 3 October 2022 for an illustration of properly working hyperlinks, included in an e-mailed sales proposal and linking to the seller’s general terms and conditions, leading to valid choice of court under Article 25 Brussels Ia, see ECLI:NL:RBROT:2022:7843 Exact Software Iberia v Azmer.

An interesting exchange with fellow practitioners on Twitter yesterday reminded me of this post which I have had in the draft folder since some time in June.  Back in February, the  Dutch SC confirmed the approach of the lower courts and the Court of Appeal on the correct approach to e-mail evidence and the existence of specific dispute resolution clauses. Here: an agreement to arbitration. The result is that a London-issued arbitral award cannot be enforced in The Netherlands.

When I flagged the case on Linked-in in June I observed there were two approaches to the judgment. Some emphasise the Courts’ refusal to recognise the validity of the agreement to arbitrate made by e-mail, in the face of what is common and very informal practice in the shipping industry /charterparty; others point more practically to parties having to be prepared to prove the authenticity of electronic correspondence.

Defendant did not enter an appearance but the lower Court in earlier ruling was alarmed by the print-out of e-mails allegedly containing the ‘agreement’ in the charterparty looking dodgy (there were for instance various white blots). It proprio motu pursued originality research. In subsequent rulings confirmed and completed by the Court of Appeal, the courts were not satisfied by the originality research, among others because the claimant’s ‘independent’ expert was an ICT employee with the law firm involved in the case.

Procureur Generaal Vlas with the Hoge Raad in his Opinion in December 2019, discussed the slight differences between the 1958 New York Convention and the Dutch law on the evidence required (with the Dutch rules in fact being more relaxed), and the nature and content of guidelines issued for the interpretation of the Convention. He advised to follow the lower court’s approach not because of some grand statement in principle but rather because he could not see fault in the courts’ factual observation of lack of independent and objective proof of authenticity. The Supreme Court followed in the most succinct of ways, without justifying rejection of the appeal. It is entitled to do so in cases where its findings have no impact on the unity in application of the law, indicating that the factual observations swayed the SC.

‘Before e-mail’ (my kids would respond to that ‘yes dad, when you got to work on horse and cart’) printers and warehouse assistants where a key link in the chain of general terms and conditions – GTCs. They needed to ensure the right content ended up on the right printed, blank order forms, and ended up with the right wholesalers, sales agents etc. – to be repeated every single time these GTCs were amended; and many a litigation has begun with sales agents continuing to use old forms ‘because it would be a shame to throw all that paper’. Fast forward to electronic correspondence, and website managers and general ICT staff have now assumed that role. In the context of any dispute resolution, they need to ensure everyone has the right e-mail footer, properly functioning link to the right version of the GTCs on the website, etc. They also need to have protocols in place to ensure authentication is thought of proactively. Lack of such proper electronic housekeeping leads to results no different than when sales agents continued to use the old paper forms.

Geert.

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