Ships classification and certification agencies. The CJEU (again) on ‘civil and commercial’, and immunity.

I earlier reviewed Szpunar AG’s Opinion in C‑641/18 Rina, on which the Court held on 7 May, confirming the AG’s view. Yannick Morath has extensive analysis here and I am happy to refer. Yannick expresses concern about the extent of legal discretion which agencies in various instances might possess and the impact this would have on the issue being civil and commercial or not. This is an issue of general interest to privatisation and I suspect the CJEU might have to leave it to national courts to ascertain when the room for manoeuvre for such agencies becomes soo wide, that one has to argue that the binding impact of their decisions emanates from the agencies’ decisions, rather than the foundation of the binding effect of their decisions in public law.

I was struck by the reference the CJEU made at 50 ff to the exception for the exercise of official authority, within the meaning of Article 51 TFEU.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

 

Ships classification and certification agencies: The immunity ship ain’t sailing according to Szpunar AG in Rina.

In C‑641/18 Szpunar AG opined on Tuesday and notes that the request of the referring court brings to mind the current debate about the influence of human rights on private international law. It seeks to ascertain whether and, if so, to what extent the scope of ‘civil and commercial’ in the Brussels Ia Regulation may be influenced by the interest in ensuring access to the courts, a right guaranteed by Article 47 Charter.

(The case itself is subject to Brussels I which did not yet include ‘acta iure imperii’. As the AG notes at 56, this is merely a clarification following CJEU interpretation of the previous concept.

Relatives of the victims, along with survivors of the sinking of the Al Salam Boccaccio ’98, a ship sailing under the flag of the Republic of Panama, which happened in 2006 on the Red Sea and caused the loss of more than a thousand lives, have brought an action before the District Court, Genoa against the companies Rina SpA et Ente Registro Italiano Navale. Claimants argue that the defendant’s certification and classification activities, the decisions they took and the instructions they gave, are to blame for the ship’s lack of stability and its lack of safety at sea, which are the causes of its sinking.

Defendants plead immunity from jurisdiction. They state that they are being sued in respect of certification and classification activities which they carried out as delegates of a foreign sovereign State, namely the Republic of Panama. They argue activities in question were a manifestation of the sovereign power of the foreign State and the defendants carried them out on behalf of and in the interests of that State.

The AG first of all reviews how the principle of customary international law concerning the jurisdictional immunity of States relates to the scope ratione materiae of Brussels Ia. He starts his analysis noting that in the absence of codification at international level (international conventions on the issue not having met with great success), the principle concerning the jurisdictional immunity of States remains to a large extent governed by customary international law.

There is little use in quoting large sections of the Opinion verbatim so please do refer to the actual text: the AG opines (referring ia to C-154/11 Mahamdia) that it is unnecessary to refer to the principle of customary international law concerning State immunity from jurisdiction when considering the scope ratione materiae of Brussels Ia. Those principles he suggests do play a role when it comes to enforcing any exercise of such jurisdiction against the will of the party concerned.

At 46: ‘the distinction between disputes which are civil or commercial matters and those which are not must be drawn by reference to the independent criteria of EU law identified by the Court in its case-law. Consequently, an act performed in the exercise of State authority (acta iure imperii) from the perspective of the law relating to immunity, is not necessarily the same as an act performed in the exercise of State authority according to the independent criteria of EU law.’ (The latter as readers of the blog will know, are not always clearly expressed; see ia my review of Buak).

In the second place, the AG then considers whether an action for damages brought against private-law entities concerning their classification and/or certification activities falls within the scope of BIa. At 83, following extensive review of the case-law (almost all of which I also reviewed on the blog and for earlier cases, in Chapter 2 of the Handbook), the AG opines that neither the fact that the acts in question were performed on behalf of and in the interests of the delegating State nor the possibility of the State’s incurring liability for harm caused by those acts, in itself conclusively characterises those acts as ones performed in the exercise of powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals. 814/79 Rüffer also makes a non-conclusive appearance.

At 95 then follows the core of the factual assessment: defendants’ role is limited to carrying out checks in accordance with a pre-defined regulatory framework. If, following the revocation of a certificate, a ship is no longer able to sail, that is because of the sanction which, as the defendants admitted at the hearing, is imposed by Panama law. Not acta iure imperii – the issue falls under Brussels Ia.

Finally, must as a result of a plea of immunity from jurisdiction a national court decline to exercise the jurisdiction which it ordinarily derives from the Regulation? In a section which will be interesting to public international lawyers, the AG reviews international and EU law (particularly Directive 2009/15) and concludes that there is no principle in international law which grants immunity to certification agencies in cases such as the one at hand.

To complete the analysis, the AG opines that should the Court disagree with his views on immunity, the national court’s views on jurisdiction would not be impacted by the right to court guarantees of the Charter, for there is no suggestion at all that the victims would not have proper access to Panamian courts for their action.

Note of course that the Opinion does not address lex causae.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

 

CJEU finds Aarhus does not add value in Belgian VAT case.

As a practising lawyer registered to the Belgian Bar I had more than a passing interest in C‑543/14 Orde van Vlaamse Balies v Ministerraad. The case was held on 28 July. At issue is the reversal of the Belgian exemption of legal services from value-added tax (VAT). Of interest for this blog was the Bar Council’s argument that making legal services subject to VAT endangers access to court for individuals. Corporations recover said VAT from the tax their own sales incur. For them, making legal services subject to VAT has zero impact on their books.

The Bar Council sought support among others in the Aarhus Convention, particularly Article 9(4) and (5) on access to court:

‘3.       In addition and without prejudice to the review procedures referred to in paragraphs 1 and 2 above, each Party shall ensure that, where they meet the criteria, if any, laid down in its national law, members of the public have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment.

4.       In addition and without prejudice to paragraph 1 above, the procedures referred to in paragraphs 1, 2 and 3 above shall provide adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive. Decisions under this article shall be given or recorded in writing. Decisions of courts, and whenever possible of other bodies, shall be publicly accessible.

5.       In order to further the effectiveness of the provisions of this article, each Party shall ensure that information is provided to the public on access to administrative and judicial review procedures and shall consider the establishment of appropriate assistance mechanisms to remove or reduce financial and other barriers to access to justice.’

Perhaps taking inspiration from the Grand Chamber’s approach in Vereniging Milieudefensie, and consistent with the suggestion of Sharpston AG, the five judges Chamber dismissed direct effect for Articles 9(4) and (5) of Aarhus, mostly because of the Conventions deference in Article 9(3) to ‘national law’.

Given the increasing (but as noted recently qualified; see also here) cloud the CJEU’s Grand Chamber had been given Aarhus, this finding by a five judge chamber that Aarhus Articles 9(4) and (5) do not have direct effect is a little awkward. It also puts the Grand Chamber itself in a challenging position. There are quite a number of Aarhus-related cases pending. Will this chamber’s view on 9(4) and (5) be followed by the assembled top dogs? And if it is not, can the Grand Chamber overrule or distinguish without embarrassment?

Geert.

I am dreaming of a…Chair at Leuven Law?

Leuven Law is recruiting 2 full-time chairs, at professorial level (the actual grade in which the chair will be appointed will depend on candidates’ experience) in both EU institutional and constitutional law, and public international law. The latter is a joint appointment with Open University of The Netherlands.

Questions on the chairs can be put to the dean (see the chair notice) however as Head of the Department of International and EU law, I am happy to entertain queries, too: preferably after the Christmas break for there is no rush. Deadline for applications is 10 March, 2016.

Geert.

Court of Justice dismisses Vereniging Milieudefensie in air quality appeal. Aarhus not always the jawbreaker in judicial review.

In Joined Cases C‑401/12 P to C‑403/12 P, the issues at stake are the scope of judicial review (in the specific context of information requests), the EU’s long and difficult relationship with locus standi in environmental matters (again though within the perhaps more narrow context of access to information), the correct implementation of the Aarhus Convention, and the direct effect of said Convention. The judgment which the ECJ issued yesterday, underlines the need to review the direct effect of international law on a case-by-case and indeed article-by-article basis. While it is clear that the European Court of Justice overall has great sympathy for the binding impact of the Aarhus Convention (see i.a. my postings on the ECJ’s judgments in cases related to the cost of environmental litigation), in this case the relevant environmental organisations failed to convince the ECJ that Article 9 of the Convention has direct effect.

Article 9 Aarhus provides a review procedure in the event requests for information have been refused. (Readers may wish to consult Article 9 themselves to judge direct effect or lack of it themselves).

Regulation 1367/2006 implements the Aarhus Convention is-a-vis the EU Institutions. The case concerns Article 10 of that regulation, entitled ‘Request for internal review of administrative acts’, which provides in paragraph 1 thereof: ‘Any non-governmental organisation which meets the criteria set out in Article 11 is entitled to make a request for internal review to the Community institution or body that has adopted an administrative act under environmental law or, in case of an alleged administrative omission, should have adopted such an act.

Article 2(1)(g) of that Regulation defines ‘administrative act’ as meaning: ‘any measure of individual scope under environmental law, taken by a Community institution or body, and having legally binding and external effects’.

The Netherlands, in accordance with Article 22 of the ambient air quality Directive, Directive 2008/50, had notified the Commission that it had postponed the deadline for attaining the annual limit values for nitrogen dioxide in nine zones and that it was availing itself of a specific exemption from the obligation to apply the daily and annual limit values for particulate matter. The Commission accepted that postponement. Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht submitted a request to the Commission for internal review of that decision pursuant to aforementioned Article 10(1). The EC refused internal review.  The Commission considered the request inadmissible as the concerned acts in their view were not “administrative acts” as defined in Article 2(1)(g), not being, the EC argued , of ‘individual scope’ but rather of general application.

The General Court sided with applicants: because Article 10(1) of Regulation 1367/2006 limits the concept of “acts” that can be challenged by NGOs to “administrative acts” defined in Article 2(1)(g) of the Regulation as “measures of individual scope”, it argued that the Regulation is not compatible with Article 9(3) Aarhus. That judgment was appealed by many. The AG in current case also sided with the applicants. (Albeit following a different reasoning than the General court).

The ECJ itself disagreed. The provisions of an international agreement to which the European Union is a party can be relied on in support of an action for annulment of an act of secondary EU legislation or an exception based on the illegality of such an act only where, first, the nature and the broad logic of that agreement do not preclude it and, secondly, those provisions appear, as regards their content, to be unconditional and sufficiently precise. (Ex multi, the ECJ quoted its judgment in the Emissions Trading Scheme case, C-366/10).

Article 9(3) Aarhus, the Court held, does not contain any unconditional and sufficiently precise obligation capable of directly regulating the legal position of individuals and therefore does not meet those conditions: since only members of the public who ‘meet the criteria, if any, laid down in … national law’ are entitled to exercise the rights provided for in Article 9(3), that provision is subject, in its implementation or effects, to the adoption of a subsequent measure at the national level. The Aarhus Contracting Parties enjoy have a broad margin of discretion when defining the rules for the implementation of the ‘administrative or judicial procedures’ (at 59 in fine).

We were quite getting used to Aarhus being employed as a jawbreaker by the ECJ and national courts alike. I am not saying those days are over. However Vereniging Milieudefensie does show both that we cannot assume the Convention’s empowering effect for all of its provisions, and secondly, that at the level of the Convention itself, beefing up one or two articles would certainly assist its implementation. (That in itself, of course, may become more difficult the more frequent the ECJ and national courts both in the EU and elsewhere, employ Aarhus against unwilling State authorities).

Geert.

PS note that in Joined Cases C‑404/12 P and C‑405/12 P, Stichting Natuur en Milieu, the ECJ mirrors this judgment with respect to an internal review of a Regulation setting maximum residue levels for pesticides.