Posts Tagged Hof van Cassatie

Happy Flights v Ryanair. Belgian Supreme Court (only) confirms proper lex causae for validity of choice of court under Article 25 Brussels Ia.

Thank you alumna and appreciated co-author Jutta Gangsted for flagging Charles Price’s (former learned colleague of mine at Dibb Lupton Alsop) and Sébastien Popijn’s alert on the Belgian Supreme Court’s ruling of 8 February last in C.18.0354.N Happy Flights v Ryanair. Happy Flights are a Belgium-based online claim agency to which disgruntled passengers may assign claims for compensation under Regulation 261/2004.

At issue is the validity of Ryanair’s choice of court in its general terms and conditions, referring consumers to Irish courts. The Brussels Commercial court on 30 May 2018 seemingly first of all did not assess whether the agency may be considered a ‘consumer’ within the terms of Irish consumer protection law (itself an implementation of Directive 93/13), having been assigned the consumers’ claims. The May 2018 decision itself is unreported <enters his usual rant about the lack of proper reporting of Belgian case-law>.

The Supreme Court (at 2, line 47) notes this lack of assessment by the lower court. It does not however complete the analysis sticking religiously to its role to interpret the law only, not the facts. Per CJEU Schrems mutatis mutandis I would suggest an affirmative answer (the agency having been assigned the consumers’ rights).

Do note that the use of the word ‘consumer’ in this context must not confuse: the consumer title of Brussels Ia itself does not apply unless the contract is one of combined travel and accommodation (or other services); the Regulation excludes contracts for travel only, from the scope of application of the consumer title.

The Brussels Commercial court subsequently and again from what one can infer from the Supreme Court’s ruling, discussed the validity of choice of court under Article 25 Brussels Ia, reviewing its formal conditions (formation of consent) yet judging the material validity under the lex fori, Belgian law, not the lex fori prorogati, Irish law. This is a clear violation of A25 juncto recital 20 Brussels Ia. The Supreme Court suggests that the relevant Irish implementation of the unfair consumer terms Directive 93/13 does imply invalidity of the clause (again: if the claim is held to fall under the consumer title, this analysis will become superfluous).

Note that the SC omits recital 20’s renvoi instruction, keeping entirely schtum about it: clearly misapplying the Regulation.

The Court’s judgment unlike the understandably enthusiastic briefing by Happy Flight’s counsel does not quite yet mean that Ryanair’s terms and conditions on this issue have been invalidated. However it is likely they will be upon further assessment on the merits – with hopefully the Court of Appeal not omitting Brussels Ia’s renvoi instruction. As I note above first up there will be the issue of assignment rather than the issue of A25.

For your interest, I gave a Twitter tutorial on a related issue (consumer law, lex causae, compulsory referral to arbitration) recently.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.9.4.

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Publish and rule. The Belgian Supreme Court on scholarship and the judiciary.

Thank you Jelle Flo for alerting us to the succinct Belgian Supreme Court ruling of 21 November 2018. A judge had published a scholarly piece on an issue of law, in tempore non suspecto, expressing a point of view which the Advocate General at the Court (here effectively acting as an amicus curiae) in a later specific case, agrees with.

The judiciary does publish regularly-ish. As do solicitors and barristers. For those of us who teach as well as practice, this at most leads to interesting times when opposing counsel or the bench points out a scholarly piece seemingly expressing a different point of view than our submissions; ordinarily, things are distinguishable…

For the judiciary, the Supreme Court sees no issue as long as the piece meets with scientific standards: ‘Le fait qu’un juge ait adopté un point de vue sur une question juridique dans une publication scientifique n’implique pas qu’il ne dispose plus de l’impartialité requise pour connaître d’un litige abordant ce sujet, pourvu qu’il ait développé sa pensée dans le respect des règles de la science du droit.’

The Court does not express guidance on what such standard might be – peer review perhaps comes to mind.

Geert.

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Lodi Trading, a lotta fog: Kolassa in the Belgian Supreme Court.

Many thanks Michael Verhaeghe  (whom I have the pleasure with jointly to be representing a client) for alerting me to Lodi Trading in which the Belgian Supreme Court applied (and distinguished) Kolassa. Lodi Trading is registered in The Netherlands and seemingly had been duped into transferring funds to a gang of fraudsters.  As always, the judgment is very very scant on factual reference, and I have not been able to find the Court of Appeals’ judgement: if anyone can: Court of Appeal Gent, 8 December 2015.

Like the CJEU itself did clearly in Universal Music, the Hof van Cassatie distinguished Kolassa (although it does not refer to Universal Music in this part of the judgment) by insisting there be circumstances specific to the case, over and above the simple presence of a bank account, which point to the damage occurring in that State.

In Universal Music the CJEU had emphasised the need for case-specific facts for bank accounts to be a relevant factor in determining jurisdiction, by holding that ‘it is only where the other circumstances specific to the case also contribute to attributing jurisdiction to the courts for the place where a purely financial damage occurred, that such damage could, justifiably, entitle the applicant to bring the proceedings before the courts for that place.’ (emphasis added).

What seems (but again: see the joint caveat of the Supreme Court’s judgment being scant and the Court of Appeal’s judgment being untraceable) to be specific to this case is that the Court of Appeal had held in favour of the location of the bank account of recipient of the funds being locus damni, given that ‘internal law’ (by which I take it reference is made to Belgian, not Dutch law) determines that the time of payment is determined by the moment of accreditation of the funds to the beneficiary’s account: not (the alternative reading; but again I am assuming for the judgment’s 10 brief paras do invite speculation) the time of the funds leaving the account holder’s account.

It could well be therefore that the Supreme Court is rebuking the Court of Appeal for having Belgian law enter the equation, given the need for autonomous interpretation of European civil procedure. But I am not entirely sure.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 2, Headings 2.2.11.2, 2.2.11.2.7

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It’s true! Belgian Supreme Court confirms order for Yahoo! to hand over IP-addresses.

Jurisdiction and the internet is a topic which has featured once or twice on this blog recently (and in a  paper which I have already referred to in those earlier postings). Belgian’s Supreme Court in ordinary (the Hof van Cassatie /Cour de Cassation) employed the objective territoriality principle in a case with roots going back to 2007 (the fraudulent purchase of and subsequent failure to pay for electronic equipment from a shop in Dendermonde, Belgium), Yahoo! was requested to hand over the IP addresses associated with e-mail accounts registered to Yahoo!’s e-mail service. Yahoo! Inc, domiciled in California, refused to comply, triggering fines under criminal law. (It’s corporate slogan btw used to be ‘it’s true!’ Hence the title of the post).

Responding to Yahoo!s claims that Belgium was imposing its criminal laws extraterritorially, the Court of Appeal had held that Yahoo! is territorially present in Belgium, hereby voluntarily submitting itself to the jurisdiction of the Belgian authorities: it takes an active part in economic life in Belgium, among others by use of the domain name http://www.yahoo.be, the use of the local language(s) on that website, pop-up of advertisements based on the location of the users, and accessibility in Belgium of Belgium-focussed customer services (among others: a ‘Belgian’ Q&A, FAQ, and post box). [Notice the similarity with the Pammer /Alpenhof criteria]. The Court of Appeal had suggested that the accusations of extraterritoriality could only be accepted had there been a request for the handover of data or objects which are located in the USA, with which there is no Belgian territorial link whatsoever, and if the holder of these objects or data is not accessible in Belgium (either physically or virtually).

The Supreme Court on 1 December confirmed all of the Court of Appeal’s arguments, essentially linking them to the objective territoriality principle. Yahoo! actively directs its activities towards consumers present in Belgium.

Even though the case involves a criminal proceeding, the Court’s judgment inevitably (not necessarily justifiably) will be used as further support for the Belgian tussle with Facebook.

Geert.

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Belgian supreme court holds on gold-plated provisions in Unamar. Appeal judgment annulled, case to be revisited.

Writing a case-note on Unamar is becoming an ever moving target: the Belgian Supreme Court (Hof van Cassatie /Cour de Cassation) held on 12 September, following the ECJ’s judgment in same – I would recommend reading my earlier posting. (Relevant databases, it would seem, do not yet hold a copy of the judgment in Cassatie. Please be in touch should you like one. (Language of the case: Dutch)).

The Court has annulled the Court of Appeal judgment for lack of due justification. In doing so, it (only) refers to the ECJ’s dictum, in full, followed by the conclusion that the Court of Appeal has not duly justified its decision. Now, Supreme Court judgments are not necessarily easy to read: often lengthy and verbatim reference is made in particular to applicants’ legal argument, followed by much more succinct conclusion by the court itself. Interpretation therefore hinges on being able to identify those specific arguments which may have swayed the court. I confess I have not found it easy to do so in this instance.

In my view, the ECJ’s judgment clearly implies a presumption against the mandatory nature of gold-plated provisions: ‘only if the court before which the case has been brought finds, on the basis of a detailed assessment, that, in the course of that transposition, the legislature of the State of the forum held it to be crucial, in the legal order concerned, to grant the commercial agent protection going beyond that provided for by the directive, taking account in that regard of the nature and of the objective of such mandatory provisions.‘ (emphasis added)

The Court of Appeal at Antwerp had focused its analysis on the correct transposition of the minimum requirements of the commercial agents directive in Bulgarian law. It had referred to discussion in the Belgian parliament, suggesting the altogether limited mandatory character of the Belgian rules from the moment a conflict of laws context is present.

In other words, paraphrasing the ECJ,  there was no ‘detailed assessment, that, in the course of that transposition, [Belgium] held it to be crucial, in [its] legal order, to grant the commercial agent protection going beyond that provided for by the directive. Neither, though, did applicants’ arguments, at least as referred to in the Supreme Court’s judgment, include such detailed assessment. Had there been so in applicants’ submission, I would have assumed the Court would have referred to it.

There is in my view no active requirement for the courts to scout for indications of mandatory character. The default position is against such character. In the absence of indications of detailed assessment (not just one or two references to passing discussion in parliament) by applicants themselves, I believe the Antwerp Court of Appeal has been wrongly rebuked for not having duly entertained such assessment.

The case now goes back to appeal (this time at the Brussels Court of Appeal).  The ball must be squarely in the court of the applicants. They seek to establish the mandatory character: they ought to provide the ‘detailed assessment’ that the ECJ requires, which the Brussels Court of Appeal at its turn may or may not be convinced by. (Please note that the Court does not address at all the issue of non-abitrability, which as I noted, was not part of the reference to the ECJ).

Geert.

 

 

 

 

 

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Unamar: Better get those travaux préparatoires out. The ECJ does not rule out gold-plating as being ‘mandatory rules’ however the final judgment is up to the forum. Legality of arbitration rules undecided.

I reported earlier on the AG’s Opinion in Unamar, Case C-184/12.  The Court held this morning.

The facts  of the case were as follows:  in 2005, Unamar, as commercial agent, and NMB, as principal, concluded a commercial agency agreement for the operation of NMB’s container liner shipping service. The agreement was for a one-year term and was renewed annually until 31 December 2008. It provided that it was to be governed by Bulgarian law and that any dispute relating to the agreement was to be determined by arbitration in Bulgaria. On 19 December 2008, NMB informed its agents that it was obliged, for financial reasons, to terminate their contractual relationship. The agency contract concluded with Unamar was extended only until 31 March 2009.

Unamar brought an action on 25 February 2009 before the Antwerp Commercial Court for an order that NMB pay various forms of compensation provided for under the Law on commercial agency contracts.  NMB in turn brought an action against Unamar for payment of outstanding freight.

In the proceedings brought by Unamar, NMB raised a plea of inadmissibility alleging that the Belgian court did not have jurisdiction to hear the dispute before it because there was an arbitration clause in the commercial agency contract. By judgment of 12 May 2009, after joining the cases referred to it by each of the parties, the court ruled that NMB’s plea of lack of jurisdiction was unfounded. As regards the applicable law in the two disputes brought before it, that court ruled, inter alia, that Article 27 of the Belgian Law on commercial agency contracts was a unilateral conflict-of-law rule which was directly applicable as a ‘mandatory rule’ and which thus rendered the choice of foreign law ineffective.

Appeal brought the case in judicial review before the ECJ. The Court did not rule on the issue of jurisdiction, given that the Hof van Cassatie had not raised this in its request. This means that the debate on whether Belgian’s trumping of foreign arbitration in cases such as these continues to be unresolved.

According to NMB, the application of the Law on commercial agency contracts to the dispute in the main proceedings cannot be considered to be ‘mandatory’ within the meaning of Article 7(2) of the Rome Convention, given that the dispute concerns a matter covered by Directive 86/653 and the law chosen by the parties is precisely the law of another Member State which has also transposed that Directive into its national law. Thus, according to NMB, the principles of the freedom of contract of the parties and legal certainty preclude the rejection of Bulgarian law in favour of Belgian law.

The Court emphasises the harmonising purpose of the commercial agency contracts Directive.  It also highlights that the wording of Article 7(2) of the Rome Convention does not expressly lay down any particular condition for the application of the mandatory rules of the law of the forum.  However the ECJ then insists (at 46) that the possibility of pleading the existence of mandatory rules under Article 7(2) of the Rome Convention does not affect the obligation of the Member States to ensure the conformity of those rules with EU law. The considerations underlying such national legislation can be taken into account by EU law only in terms of the exceptions to EU freedoms expressly provided for by the Treaty and, where appropriate, on the ground that they constitute overriding reasons relating to the public interest (reference is made to Arblade). The classification of national provisions by a Member State as public order legislation applies to national provisions compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State.

The plea relating to the existence of a ‘mandatory rule’ within the meaning of the legislation of the Member State concerned, as referred to in Article 7(2) of the Rome Convention, must therefore be interpreted strictly: for otherwise it risks upsetting the core rule of that Convention, which is parties’ freedom to choose applicable law.

The Court finally holds that it is for the Belgian court,

in the course of its assessment of whether the national law which it proposes to substitute for that expressly chosen by the parties to the contract is a ‘mandatory rule’, to take account not only of the exact terms of that law, but also of its general structure and of all the circumstances in which that law was adopted in order to determine whether it is mandatory in nature in so far as it appears that the legislature adopted it in order to protect an interest judged to be essential by the Member State concerned. As the Commission pointed out, such a case might be one where the transposition in the Member State of the forum, by extending the scope of a directive or by choosing to make wider use of the discretion afforded by that directive, offers greater protection to commercial agents by virtue of the particular interest which the Member State pays to that category of nationals.‘ (at 50)

The Court then distinguishes Ingmar, in which the law which was rejected was the law of a third country, while in Unamar, the law which was to be rejected in favour of the law of the forum was that of another Member State which, according to all those intervening and in the opinion of the referring court, had correctly transposed Directive 86/653.

The Court concludes ‘Articles 3 and 7(2) of the Rome Convention must be interpreted as meaning that the law of a Member State of the European Union which meets the minimum protection requirements laid down by Directive 86/653 and which has been chosen by the parties to a commercial agency contract may be rejected by the court of another Member State before which the case has been brought in favour of the law of the forum, owing to the mandatory nature, in the legal order of that Member State, of the rules governing the situation of self-employed commercial agents only if the court before which the case has been brought finds, on the basis of a detailed assessment, that, in the course of that transposition, the legislature of the State of the forum held it to be crucial, in the legal order concerned, to grant the commercial agent protection going beyond that provided for by the directive, taking account in that regard of the nature and of the objective of such mandatory provisions.‘ (emphasis added)

The Courts instructions are therefore clear: there is a strong presumption against mandatory law, in light of the correct implementation by Bulgaria; and the national court has to conduct a proper review of the preparatory works of the relevant Belgian Act which transposed the Directive. Discussions in Belgian scholarship reveal that there is no clear view on the exact nature of the ‘mandatory’ character of the gold-plated provisions.

The ECJ does also refer in passing to the Rome Regulation. This Regulation introduces two types of mandatory provisions: simple ‘mandatory’ ones, with reference to national as well as to EU law and with specific reference to gold-plating for the latter; and ‘overriding mandatory’ ones, with reference to the Arblade criteria but no reference to gold-plating.

It is not therefore entirely certain what the precedent value is of Unamar viz the future application of the Regulation, neither is it in my view what the Hof van Cassatie’s research of the travaux préparatoires of the 1995 Act will reveal.

Geert.

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Wahl AG in Unamar: national gold-plating of Union law does qualify as lois de police under the Rome Convention

I flagged earlier that regardless of the outcome for the Unamar case itself, an important consideration would be what the Court’s eventual answer will teach us about the Rome I Regulation on the applicable law for contracts (as opposed to its Treaty predecessor, the Rome Convention, which applies to the case at issue). Wahl AG’s Opinion was published this morning (as often, the English version was not yet available at the time of writing). It focuses almost entirely on the Rome Convention – for which from a legal point of view it cannot be faulted.

Belgium’s stronger protection of the agent, long held by Belgian law to be of overriding mandatory rules calibre, gold plates the regime of the Commercial Agents Directive, Directive 86/653. In Unamar, parties have agreed on Bulgarian law being applicable law (as well as incidentally on the case having to go to arbitration in Bulgaria first, attempting to circumvent Belgian law which proscribes the use of arbitration for disputes such as those at issue; the AG notes that this issue was not actually part of the questions referred by the Hof van Cassatie, hence he does not entertain it). The question therefore arises as to whether Belgian law, the lex fori, can justifiably trump Bulgarian law of which no suggestion is being made that it does not meet the minimum standard of the precited Directive.

In view of the minimum harmonisation character of the commercial agents Directive, and of there being no indication that such application leads to infringement of primary EU law, the AG suggests that Belgium courts are justified to qualify the Belgian gold-plating as being of overriding mandatory character.

As I noted when I flagged the reference, in my view the answer would have to be different under the Rome I Regulation. In the absence of a reference to gold plating in Article 9, and (arguably) its presence in Article 3, effect utile requires that the allowance for national rules of overriding mandatory nature, does not cover gold plating. However in the Rome Convention which is applicable to the case referred, EU law as mandatory law does not figure at all, and the room for overriding rules is much wider than it is in the Rome Regulation.

One will have to wait for the ECJ’s judgment to assess whether the Court itself will reveal anything on its position vis-a-vis the Regulation.

Geert.

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