Tag: Jurisdiction

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Beverage City v Advance Magazine. The CJEU adopts flexible approach to anchor defendant mechanism in Trademark cases.

I have been absolutely swamped in recent months and as a result, the blog has suffered. In coming up for some air, I decided to first tackle some of the oldest drafts in my blog queue. First up is CJEU C-832/21 Beverage City & Lifestyle GmbH et al v Advance Magazine Publishers Inc held let’s say a little while ago (September 2023; did I flag I have been busy?) which in essence clarifies CJEU Nintendo.

The EU Trademark Regulation 2017/1001 has lex specialis conflict of laws provisions viz Brussels Ia. However it does not specify an anchor mechanism and therefore [26] Article 8(1) Brussels Ia  applies in full.

I discussed Richard de la Tour AG’s Opinion here. As I summarised when I tweeted the judgment, the CJEU has essentially followed the AG’s suggestion of a flexible interpretation of the A8(1) conditions:

with respect to the the A8(1) (compare CJEU The Tatry) condition relating to the existence of the “same situation of law”, this [31] “appears to be satisfied” (final check is for the national court) where the claim concerns the protection of claimant’s exclusive right over EU trade marks, which is based on EU trademark law identical to all EU Member States. [29] Any difference in the legal bases under national law of claims relating to that protection is irrelevant to the assessment of the risk of conflicting decisions.

further, with respect to the condition of “same situation of fact”,  [37]

“the existence of a connection between the claims concerned relates primarily to the relationship between all the acts of infringement committed rather than to the organisational or capital connections between the companies concerned. Similarly, in order to establish the existence of the same situation of fact, particular attention should also be paid to the nature of the contractual relationship between the customer and the supplier.”

[38] Anchor defendant Beverage City & Lifestyle was connected to Beverage City Polska by an agreement for the exclusive distribution of the energy drink ‘Diamant Vogue’ in Germany.

“That exclusive contractual relationship between those two companies may make it more foreseeable that the acts of infringement of which they are accused may be regarded as concerning the same situation of fact, capable of resulting in a single court having jurisdiction to rule on the claims brought against all of the actors who committed those acts.”

The CJEU throughout the judgment emphasises the sound administration of justice objective supporting the joinder mechanism.

Geert.

EU Private International Law, 4th ed. 2023, 2.505 ff, 2.518.

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Granville Technology. Applicable law issues in follow-on cartel damages claim provoke engagement with territorial scope of EU competition law, its effet utile (and contrasts with CJEU in CDC, flyLAL).

In Granville Technology Group Ltd v Chunghwa Picture Tubes Ltd & Ors [2024] EWHC 13 (Comm) Pelling J deals with a follow-on damages claim in the context of the LCD cartel (an EC decision under Article 101 TFEU). In E&W these are characterised as tortious claims for breach of statutory duty, as they are in most EU jurisdictions, too.

The applicable law issues were dealt with under residual English law pre Rome II. The events with which this claim is concerned occurred before 11 January 2009, when Rome II came into effect. For the Brussels Ia and Rome II issues see my paper here. However the judge’s discussion of elements displacing the English law’s presumption of locus damni have important comparative context to EU law as I discuss below.

Claimants were English registered companies carrying on business in England and Wales in the manufacture and/or sale primarily of  desktop PCs sold with monitors and notebooks. They are now all in liquidation. The judge handily recalls the principles [18]] for those not familiar with follow-on actions

A claimant alleging a competition law infringement can bring a claim before the English courts either as a ‘standalone’ claim (in which case it must establish both the breach of competition law alleged and the loss which it alleges was caused thereby); or (as in this case) as a ‘follow-on’ claim, where the claimants rely on the findings of the relevant competition authority (in this case the Commission) to establish breach. The “follow on” option is available because  in law the High Court is bound by infringement decisions of the Commission, such as the Decision. However the claimant in a follow on claim must prove the loss it alleges it has been caused by the infringement relied on…

Damage of course is an issue and [27] in this case as in many similar ones, “complex economic evidence involving statistical modelling at various levels of complexity and sophistication was deployed by both parties but in particular by the defendant in an attempt to identify what part of the price increases in LCD panels over the Relevant Period was attributable to the cartel’s infringing activity.”

[34] Applicable issues of law that arise against some of the defendants, are:

i) Whether any losses that arise out of purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market outside the EEA fall outside the territorial scope of EU law and are therefore unrecoverable;

ii) whether the Claim in so far as it arises out of purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market in South Korea, Taiwan, China and Japan is governed by the laws of these countries; and if so whether the claims by the claimant to recover damages for breach of TFEU, Article 101 and/or AEEA, Article 53 is a cause of action within the laws of those states. The claimants have not attempted to prove the relevant laws of any of those states and rely on the presumption (“Presumption of Similarity”) that those laws are materially the same as English law unless the contrary is pleaded and proved. The defendants case is that the Presumption of Similarity is of no application applying the decision of the Supreme Court in Brownlie v FS Cairo (Nile Plaza) LLC [2021] UKSC 45 per Lord Leggatt at [119] – [124]. If the defendants are correct on this issue, they maintain the claim fails to the extent that it is based on purchases by the claimants of LCD panels or LCD Products containing LCD panels which were first put onto the market in South Korea, Taiwan and China and Japan. The defendants estimate this at about 78% of the whole. There is a dispute as to the correct percentage in the event the defendants succeeds on the principle  In any event, the claimants submit that if I agree with the defendants on the issue of principle I should adjourn determination of the issue and give the claimants the opportunity to plead and prove the relevant foreign law. I return to that issue below; and

iii) Whether the claims against the third and fourth defendants are statute barred under the Limitation Act 1980 (“LA”). The claimants rely on LA, s.32 and maintain that they could not have with reasonable diligence discovered the relevant facts before publication of the Decision, particularly given that all the claimants are in liquidation and have acted at all material times by their liquidators and their support staff.

The foreign law issue is dealt with [292] ff. The relevant agreements, decisions  and concerted practices all occurred outside the EU in Taiwan, Japan and South Korea, as did the overcharge for the LCD panels incorporated into the goods which the claimants ultimately bought: this occurred when the LCD panels were first sold by the cartelists including the defendants to the manufacturers of screens that were then incorporated into monitors and notebooks. Loss to the claimants loss (subject to downstream pass on) happened in E&W, when they purchased monitors or notebooks with LCD screens incorporated into them or the parts necessary to enable them to assemble notebooks. Their losses on reduced sales were also suffered in E&W.

This is where PILA s11 and 12 come in: for their content and implications see my post on UKSC Zubaydah. This is where interesting comparative elements emerge with EU law.

[297]

Once the different elements of the events and the country in which they occurred have been identified, the court then has to make a ‘value judgment’ regarding the ‘significance’ of each of those ‘elements’ in relation to the tort in question – see Iiyama (UK) Ltd v Samsung Electronics Co Limited (ibid.) at [48]. In that case, it was conceded that “…in the modern world the place where a cartel agreement happens to be made is of little significance…” Neither party in this case suggests, and in particular the defendants do not suggest, otherwise. I agree. That being so, the primary considerations that remain by a process of elimination are (a) the place or places where the cartel was intended to be implemented; and (b) the place or places  where the damage resulting from the infringing activity was suffered.

In my aforementioned paper p.150 I criticise the CJEU’s approach for jurisdictional purposes) in C-352/13 CDC which it repeated in C-27/17 flyLAL. For locus delicti commissi, under Article 101 TFEU (cartels), with reference to CDC, the CJEU opted for courts for the place in which the agreement was definitively concluded: this truly is extraordinary for it allows for forum shopping by the cartel participants, and it is a far cry form the sentiment expressed in current judgment (for applicable law) that the place where a cartel agreement happens to be made is of little significance…. For Article 102 TFEU (abuse of dominant position) the picture is more fuzzy at the CJEU as I discuss in my post on flyLAL. I realise the analysis in current judgment is for applicable law, not jurisdiction and I also realise that on applicable law Rome II’s Article 6 is closer to a forum damni analysis (as befits the general DNA of Rome II) than the CJEU’s locus delicti commissi analysis for jurisdiction in CDC and flyLAL.

Parties still disagree however on where that place is where the cartel was first implemented. Defendants say this was at the time prices first incorporated the Overcharge, which was when LCD panels were sold to original equipment manufacturers in Taiwan, Japan, China  and South Korea.

The judge in this context discusses the territorial scope of EU competition law [299] ff:

….if and to the extent that the focus in relation to applicable law should be on the restriction on competition within the internal market, then concluding that EU competition law should not apply to infringing activity that has effect within the EU because the cartelists are based, or conspired, or first gave effect to their conspiracy outside the EU would have a chilling effect on the efficacy of EU competition law as an effective mechanism for protecting and enhancing fair competition for the benefit ultimately of all consumers within the EU.

Enter CJEU Woodpulp, Gencor and Intel. [308] “in my judgment the evidence available establishes that the cartel in issue in these proceedings was a worldwide cartel which was intended to produce and in fact produced substantial indirect effects on the EU internal market.”

[313]

I conclude that the claim is one that comes within the territorial scope of EU competition law Returning to the applicable law issue, these conclusions lead me to the further conclusion that applying PILA, s.11(2)(c),  the applicable law is that of England and Wales including the law of the EU that applied at the time of the events giving rise to this claim.  I reach that conclusion because the most significant elements of those events were (a) the place or places where the cartel was intended to be implemented, which for the reasons I have identified was materially the territory of the EU including the UK and, therefore, England and Wales ; and / or (b) the place or places where the damage resulting from the infringing activity was suffered which again materially was England and Wales. As the Commission makes clear in Article 331 of the Decision, while the effects of the cartel were experienced elsewhere as well that is entirely immaterial for present purposes, as is the fact that a number of sales were first put on the market outside the EU. That is so because the Commission has decided and the Decision establishes that the indirect sales of panels were targeted at the EU (including England and Wales) and were intended to and in the event had substantial effects on competition in the EU (including England and Wales).

Reference here is also made to Deutsche Bahn Ag & Ors v Mastercard Incorporated & Ors [2018] EWHC 412 (Ch) in which both a pre and a post Rome II scenario was at issue.

Obiter, [314]

…had I concluded that the general rule was that the applicable law in relation to sales that were first put on the market outside the EU was the law of the state where that had occurred, I would nonetheless have concluded that the significance of the factors referred to above which connect the tort to the EU and, therefore, England and Wales, so outweighed the factors connecting the tort to the states where LCD screens were first put on the market outside the EU during the Relevant Period so as to make it substantially more appropriate for the applicable law to be the law of England and Wales incorporating that of the EU as relevant. EU competition law is the most appropriate law to apply to a tort concerned with a breach of TFEU, Article 101 to the extent that it has effect within the EU because it comes within the territorial scope of EU competition law and English law is the most appropriate intra EU system of law to apply by reason of the effect on the market so far as the claimants are concerned being in England and Wales, the claimed losses having been suffered in England and Wales and the claimants having carried on business in England and Wales during the whole of the relevant period until they were each placed in administration. The geographical place of incorporation of each claimant is a minor consideration although the first and second claimants were registered in England and Wales and although OTC was registered in Jersey, it nonetheless carried on business in England and Wales and claims in respect of losses suffered there. To my mind it is also at least realistically arguable, given the cost and inconvenience of having to prove separately the competition law of each state where LCD screens were first put on the market outside the EU during the Relevant Period, that to decide otherwise would undermine the direct effect and/or the effectiveness principles.

Of note. Geert.

EU private international law, 4th ed. 2024, [2.447] ff, 4.53 ff.

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AGPS BondCo: Court of Appeal obiter slightly opening the jurisdictional can of worms in English restructuring practice.

I have frequently reported on the use of English restructuring and law, including Plans and Schemes of Arrangement, and the forum and applicable law shopping strategies for same. Readers will find the tag ‘restructuring’ or ‘scheme of arrangement’ useful.

My post on Apcoa  summarises many of the issues and cross-refers to many other postings. The same post in a later update reports on Codere, which has become standard reference, and to AGPS Bondco Plc, Re, where the Court’s jurisdiction was unsuccessfully challenged on the basis that the Issuer Substitution was ineffective or invalid as a matter of German law.

That latter judgment has now been successfully appealed in Strategic Value Capital Solutions Master Fund LP & Ors v AGPS BondCo PLC (Re AGPS BondCo PLC) [2024] EWCA Civ 24. The Court of Appeal held that the first instance judge had unjustifiably departed from the paru passi distribution of assets principle in sanctioning the cross-class cram down.

Of note for the blog however is Lord Justice Snowden’s obiter reference to the jurisdiction [29] ff as follows:

      1. After the failure of the consent solicitation, the Group announced its intention to implement the proposed restructuring by an alternative route. This was to propose a restructuring plan under Part 26A and to ask the English court to exercise its cram down power to overcome the objections of the Appellants. To that end, the Plan Company was incorporated in England and Wales as a subsidiary of the Parent Company on 23 December 2022.
      1. On 10 January 2023, the Appellants put forward an alternative restructuring proposal to the Group. That elicited no immediate response, but on 19 January 2023 the SteerCo informed the Company that the Appellants’ proposal was not acceptable.
      1. On 11 January 2023 the Plan Company was substituted for the Parent Company as the issuer of the Notes, ostensibly pursuant to the substitution procedure under the Notes (the “Issuer Substitution”). In connection with that substitution, the Parent Company guaranteed the Plan Company’s obligations under the Notes, and the Parent Company issued back-to-back loan notes to the Plan Company on the same terms as the Notes.
      1. It is self-evident, and the Plan Company accepted before the Judge, that the Issuer Substitution was carried out for the sole purpose of introducing an English company into the Group structure in order to persuade the English court to exercise its jurisdiction under Part 26A. Absent the Issuer Substitution, a proposal for the compromise of foreign law debts owed by a foreign company with no relevant connection with England would not have been entertained by the English court.
      1. The technique of inserting a newly incorporated English company as a substitute obligor or co-obligor of debt owed by a foreign company in order to engage the jurisdiction of the English court under Part 26 or Part 26A has been used in a number of schemes and plans that have been sanctioned at first instance over the last few years: see e.g. Codere Finance (UK) Limited [2015] EWHC 3778 (Ch) and Gategroup Guarantee Limited [2021] EWHC 775 (Ch) at [12]-[23]. Mr. Bayfield KC told the Judge that it was “an established technique”. It has, however, not been the subject of consideration at an appellate level.
      1. The Appellants did not oppose the Plan before the Judge on the basis that the Issuer Substitution was an artificial device that could not justify the exercise of discretion to sanction the Plan. The point did not, therefore, arise for consideration on this appeal. For the avoidance of doubt, and without expressing a view one way or the other, I would wish to make it clear that the fact that this judgment does not deal with this issue should not be taken as an endorsement of the technique for future cases.
      1. The Appellants did, however, challenge the legality of the Issuer Substitution as a matter of German law, both before the Judge, and by proceedings in Germany itself. The Judge heard expert evidence and was satisfied that it complied with German law. The Appellants also indicated that irrespective of our decision on this point, they reserved the right to continue their challenge to the Issuer Substitution in Germany.

(emphasis added)

The point is clearly made obiter, seeing as the issue was not appealed (although it is being litigated in Germany, which evidently will raise interesting further issues); and of course it is possible that Snowden LJ simply mentions the issue for it was litigated at first instance. Yet often if that is the case, the Court of Appeal simply keeps schtum about it. Therefore just possibly it may be hinting that the often applied arguendo approach to jurisdiction for Schemes and Plans (“arguments put forward are not barmy and they are not really opposed by any party therefore we accept jurisdiction”) may not work at least across the board in restructuring cases.

An obiter hint of note.

Geert.

EU Private International Law, 4th ed. 2024, 5.35 ff.

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A good illustration of the not always well understood ‘looking over the fence’ aka the ‘conflicts method’ for determining jurisdiction: X v Y ECLI:NL:RBLIM:2023:4342.

X v Y (yep, annoying and entirely without reason, an anonymous judgment) ECLI:NL:RBLIM:2023:4342 is an interesting illustration of Brussels Ia’s Article 7(1)(a’)s ‘looking over the fence’ aka the conflicts method for determining forum contractus.

The method implies that beyond the standard contractual categories for which Article 7(1)(b) locks in forum contractus as a European ius commune, the ‘place of performance of the obligation in question’ needs to be determined by provisionally identifying the lex contractus and then using that lex contractus to determine place of performance, leading to a conclusion whether the judge seized has jurisdiction or not. See CJEU 12/76 Tessili v Dunlop.

In the case at issue, the contract is a loan and the applicable law is determined with reference to CJEU Kareda. This is where the court veers off course (my first categorisation by Tweet of the judgment being an excellent example therefore needs to be corrected): In Kareda the CJEU held that the credit agreement at issue was to be considered an ‘agreement for the provision of services’ per A7(1)(b), locking in forum contractus “in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided”. In such case, no more looking over the fence is required, let alone consideration of Article 4(3) Rome I etc. At the least, the court in current case should have clarified whether the loan was e.g. between friends or family, in which case a Winslet & Ors v Gisel -type analysis might exclude the A7(1)(b) ‘services’ qualification.

Geert.

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Say-Wittgenstein v (former) King Juan Carlos. High Court restricts harassment jurisdiction for E&W courts, leaves open grounds for appeal.

Ugljesa Grusic’s excellent post on  Sayn-Wittgenstein-Sayn v HM Juan Carlos Alfonso Victor Maria De Borbon y Borbon [2023] EWHC 2478 (KB) is prompting me to try and do something about the draft posts queue for the blog. Ugljesa has very good overview and this post can largely refer to his.

Nicklin J had earlier held that in [2022] EWHC 668 (QB) that in a former lover’s harassment case against the former King of Spain, Juan Carlos, the former King does not enjoy foreign sovereign immunity under the State Immunity Act 1978. That was overruled upon appeal [a Saint Nicholas gift for the King, held 6 December 2022 [2022] EWCA Civ 1595] for all pre-abdication conduct which the Court of Appeal held does fall under foreign sovereign immunity. The claim continued for the remainder and is ratione temporis subject to Brussels Ia (the EU jurisdictional rules for cases like this).

Collins Rice J in current judgment resoundingly held [303] ff against jurisdiction on the basis of the gateway for tort, and obiter blew the claim out off the water in many other ways:

My principal conclusion is that the High Court of England and Wales lacks jurisdiction to try this claim. That is because it has not been brought against the Defendant in his country of domicile, as is his default entitlement; and the Claimant has not satisfied me she has a good arguable case that her claim falls within an exception to that default rule. That in turn is because she has not sufficiently established that the ‘harmful event’ of which she complains – harassment by the Defendant – happened in England.

I am not satisfied either that the Defendant has, or should be deemed to have, submitted to the jurisdiction of the High Court by his own conduct of this litigation so far.

In the alternative, if I had been able to conclude that the High Court did have jurisdiction over this claim, I would have refused the Claimant’s application to amend her claim. This application was multifaceted; she wished to amend her claim in a number of respects and my reasons for refusing vary correspondingly. They include the inconsistency of her proposals with the decision of the Court of Appeal on the extent of the Defendant’s state immunity from suit; problems with the clarity, accuracy and consistency of the way she wanted to change her case; and the lack of good enough explanations for the timing of the changes she wanted to make. My conclusion in all the circumstances was that the changes did not introduce and express matters on which she would have a real prospect of succeeding at trial.

I would also have granted the Defendant’s application to strike out her claim. The claim did not comply with the rules of court applicable to the drafting of a harassment claim. As pleaded, I could not be satisfied that her statement of case disclosed reasonable grounds for bringing her claim as she did.

The Claimant has an account she wishes to give of her personal and financial history with the Defendant, and about the harm he has caused her peace of mind and personal wellbeing, and her business, social and family life. I take no view about that account as such. The only question for me has been whether the Claimant can compel the Defendant to give his side of the story to the High Court. My conclusion, as things stand, is that she cannot.

[17] ff the judge discusses ‘submission’ aka voluntary appearance under Article 26 Brussels Ia and essentially held [42] that the former King’s reservation of his jurisdictional position (made within the PCR prescribed 14 days within acknowledgment of service) pending resolution of the state immunity issue was apparently intended to be comprehensive, rather than to have deliberately conceded anything.

I believe that finding is right in essence however there is also a clear warning here for defendants that if they wish to oppose jurisdiction they better be comprehensive about it from the start.

For the determination of locus delicti commissi and locus damni under Article 7(2) Brussels Ia, the judge holds [62] ff

In this case, the parties have proceeded on the basis that I must hold in mind both the autonomous (internationally consistent) meaning of the ‘place of the harmful event’ together with the guidance on that provided by the CJEU, and, at the same time, the function of national tort law in identifying the legally relevant ‘harm’ in the first place. Authority for that appears (in a non-defamation case) in the decision of the Supreme Court in JSC BTA Bank v Ablyazov & Anor [2020] AC 7272 per Lord Sumption and Lord Lloyd-Jones JJSC at [32]-[33]. Having confirmed that the expression ‘place where the harmful event occurred‘ required an autonomous interpretation, the judgment continues:

However, the requirement of an autonomous interpretation does not mean that the component elements of the cause of action in domestic law are irrelevant. On the contrary, they have a vital role in defining the legally relevant conduct and thus identifying the acts which fall to be located … In particular, whether an event is harmful is determined by national law.

Approaching the question of the special jurisdiction therefore requires considering the autonomous question of whether England is either the place of the ‘event giving rise to the damage’ or the place ‘where the damage occurs’; and the relevant ‘event’ and ‘damage’ are determined by English tort law. The latter requires consideration of whether the relevant components of an actionable tort, occurring in England, have been made out to the relevant standard.

A lot more can be said about this issue. The need for autonomous interpretation on the one hand (note [103] the reference to CJEU Melzer which IMHO can work both in the defendant’s and claimant’s favour), the role of the putative lex causae for Vorfrage and characterisation, and the role of the lex fori in same on the other are not easily reconciled.  And as I point out here, there is a lot that JSC BTA Bank did but also a lot it did not entertain.

Ugljesa is absolutely right in his post to refer, as the judge did in current case, to CJEU Shevill’s potential for national law to limit forum shopping possibilities, however the CJEU in Shevill (para 41) does also emphasise the Brussels’ regime’s effet utile (which nb also made it into ECHR Arlewin v Sweden and engages ia Article 6 ECHR):

The criteria for assessing whether the event in question is harmful and the evidence required of the existence and extent of the harm alleged by the victim of the defamation are not governed by the Convention but by the substantive law determined by the national conflict of laws rules of the court seised, provided that the effectiveness of the Convention is not thereby impaired.  (emphasis added)

Ugljesa finally is absolutely right in pointing to the lack of Rome II input into the extraterritoriality issue and this I suspect is but one element on which appeal may and can be sought.

Geert.

EU Private International Law, 4th ed. 2024, Heading 2.2.12.2

https://bsky.app/profile/gavclaw.bsky.social/post/3kb3ifsvp742p

 

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Club La Costa: The CJEU on timeshare agreements: Applicable law, jurisdiction. Confirms privity of contract at least with the business as defendant.

Case C-821/21 NM v Club LA Costa UK, sucursal en España et al (I shall shorten it to ‘Club La Costa’), in which the CJEU held the other week, first of all confirms privity of consumer contracts at least from the point of view of the business as the defendant. The case was heard without AG Opinion which at first sight is a bit odd for the claim does raise interesting and not necessarily acte clair issues.

NM, a British consumer resident in the UK, concluded, through the branch in Spain of Club La Costa (UK), established in the UK (‘Club La Costa’), a timeshare contract in respect of tourist accommodation (‘the contract at issue’), which, the referring court states, does not concern either a right in rem in immovable property or a tenancy right (cue CJEU C-73/04 Klein v Rhodos Management and see generally Zhen Chen on Timeshare and Brussels Ia /Rome I).  NM sued that company and other companies belonging to the same group, with which so the facts state without further detail, he was also contractually linked, but which were not parties to that contract. All the defendant companies in the main proceedings are established in the UK, with the exception of European Resorts & Hotels, which is established in Spain. Furthermore, the referring court states that Club La Costa directs its commercial activity not only to Spain, but also to other countries, in particular the UK. The contract at issue contains English (exclusive) choice of court and law.

The CJEU first of all holds that  the expression ‘other party to a contract’ in Article 18 Brussels Ia on consumer contracts, is to be understood as referring only to the natural or legal person who is a party to the contract in question. It does not also encompass other persons, not parties to that contract, but who are connected with that person. It refers [45] to the need for restrictive interpretation of the consumer title, as well as [56] a contrario to the express provision in the Regulation for branch jurisdiction, and to the repeated wording (“the other party to the contract”, emphasis on the singular) as it also had done in CJEU C-215/18 Libuše Králová v Primera Air Scandinavia. The Court itself [54] distinguishes CJEU Maletic for in that case the consumer was from the outset contractually linked, inseparably, to two contracting partners.

The judgment nota bene may also indicate a direction of travel albeit not direct authority for the question whether on the side of the consumer as claimant, the contractual net may be cast wide: see Bonnie Lackey.

[63] the Court confirms that A63 BIa does not establish any hierarchy between the three criteria for a corporation’s ‘domicile’ and that therefore it is for the consumer to choose between them. It also holds [66] that A63 does not lay down rebuttable presumptions: it imposes autonomous definitions.

Finally, the CJEU confirmed that the the consumer protection provision of A6 Rome I is not only specific but also exhaustive, as it also held in Diamond Resorts of the same day.

Geert.

 

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Rechtbank Noord Holland on applicable law viz a pig butchering scam, echoing the classic difficulty of distinguishing contract from tort.

X v Coinbase Ireland Ltd ECLI:NL:RBNHO:2023:5305 is of interest to the blog for its imho shaky finding on the law applicable to the claim. The case is a so-called pig butchering scam, a term I had never before heard of. Sites like these will tell you what it means. Essentially, in the case at issue the claimant had acquired cryptocoins on a Coinbase account and was subsequently tricked into transferring those into a ‘wallet’ over which she lost control.

Coinbase is defendant, for the fraudsters clearly are nowhere to be found. The claim in a variety of ways attempts to have Coinbase cover the €170,000 or so damage. Jurisdiction is established per A17 ff Brussels Ia (the consumer title). [4.2.4] its activities are found to have been directed at The Netherlands even without it having a Dutch banking licence: it facilitated use of the Dutch iDEAL payment option; it listed The Netherlands as one of the countries in which crypto coin exchange services were available; it offered a Dutch app and a Dutch website; it had paid for Coinbase to appear in Dutch-instructed search engine queries for coinbase and for a link to its website following up on such queries.

Applicable law is held to be Dutch law, applying Rome I. The court first asks itself whether the claim is covered by Rome I or Rome II. With reference to the need for consistency between Brussels Ia and the Rome Regulations (regular readers of the blog know that I am not convinced; see eg tag ‘consistency’ or ‘reading across’ in the search box of the blog) and to CJEU Reliantco, the court holds it is Rome I that is engaged. This is despite the claim largely being based on unfair trading, a statutorily circumscribed tort in The Netherlands. In that respect the claim echoes CJEU Winkingerhof, yet the Dutch court here opts for contract in Sharpston AG Ergo style: [4.3.4] without the contract between the parties there would not currently have been a claim.

The court’s application of Article 6 Rome I then cuts many corners: it notes Coinbase’s argument that its GTCs identify Irish law as the lex contractus, acknowledges that per Rome I (only) mandatory Dutch law trumps Irish law, yet then [4.3.7] rules out the entire application of the lex voluntatis in the GTCs merely on the basis that applying Irish law would be ‘too onerous’ for the consumer, ‘if only’ because it is much more difficult to find legal advisers in The Netherlands with knowledge of Irish law. All of that is sloppy at best.

The remainder of the judgment then dismisses the claim on the basis of Dutch law.

Geert.

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Dutch court wrongly rejects Brussels Ia consumer title jurisdiction in collective WAMCA action against Airbnb.

Leuven term is finally wrapping up and I am hoping to post more of the promised updates over the course of the next few weeks.

In Stichting Massaschade & Consument [SMC] v Airbnb Ireland UC ECLI:NL:RBDHA:2023:8562, the Hague court of first instance held the Dutch courts do not have jurisdiction in a collective claim under the  Dutch WAMCA (mass torts managed by a collective claim).

SMC on behalf of the class members, claims a refund of the service costs which Airbnb charged to the short-term tenants (the claim is not related to the landlords using the platform).

Airbnb’s GTCs include inter alia

“As a consumer, you may bring any judicial proceedings relating to these Terms before the competent court of your place of residence or the competent court of Airbnb’s place of business in Ireland.”

The court first of all reviews the application of the consumer title in particular Article 18(1):

“A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled.”

The court [4.7] is wrong in my opinion to hold that Article 18 only applies when the consumer him /herself brings the claim. Dutch courts most certainly in my view have jurisdiction.

The Court finds support for its argument that A18 only applies when the consumers bring the claim themselves in CJEU Schrems,

Rather, in Schrems the CJEU [48] with reference indeed to Bobek AG’s Opinion in the case, holds “an assignment of claims such as that at issue in the main proceedings cannot provide the basis for a new specific forum for a consumer to whom those claims have been assigned.” Meaning, in my view, the assignee must bring the claim (presuming it does not bring it in the defendant’s domicile, here Ireland) as A18 instructs “in the courts for the place where the consumer is domiciled”. A18(1) as far as the consumer is concerned, assigns not just national but also territorial jurisdiction (see also Mankowski, BIbis, 2nd revised ed., p.516), vide “the courts for the place where the consumer is domiciled” as opposed to, for the business, “the courts of the Member State in which that party is domiciled” (emphasis added)

This of course is inconvenient for SMC which for that reason [4.4] had suggested that all Dutch courts have jurisdiction and that seeing as a considerable part of the claimants are domiciled in The Hague, that is where the claims ought to be consolidated. That does not follow in my view from Article 18 and /or Schrems.

The court then rejects A19’s possibility for a more generous choice of court purely because SMC is not a consumer, misapplying Schrems again. Some kind of SMC-favourable choice of court clause under A25 linked to Airbnb’s GTCs is rejected (the judgment seems to suggest it was not even prompted by SMC). SMC had it seemed subsidiarily argued A7(1) jurisdiction, I think (but the judgment is brief on this issue) arguing that the service charge element of the agreement somehow is different from the consumer contract. Here, with reference to CJEU C-19/09 Wood Floor Solutions, the competing arguments of ‘place of performance’ viz A7(1) BIa are Ireland as the place from which the platform is run (Airbnb) and The Netherlands as the place to which that platform is directed, in Dutch (SMC, [4.17]). Here, [4.19], the court goes with Airbnb’s suggestion as the one element that is predictable, while looking at it form the user’s points of view leads to unpredictability seeing as the platform can be used by anyone anywhere in the world. On this I think more can be said.

Overall however as noted, the court in my view misapplied Article 18. Whether that may lead on appeal to consolidation at The Hague, is a different matter.

Geert.

EU private international law, 3rd ed. 2021, 2.222 ff.

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Jalla v Shell – continued. A further judgment in the Bonga Spill litigation considers Article 7 Rome II, and the Nigerian EEZ as a ‘country’ under Article 25 of the Regulation.

Update 10 May 2023 In Jalla and another v Shell International Trading and Shipping Company and another [2023] UKSC 16, the Supreme Court has now held that the spill was a one-off event, not a continuing nuisance, and therefore time-barred under applicable Nigerian law. Update 15 03 2024 see Jalla & Ors v Royal Dutch Shell PLC & Ors [2024] EWHC 578 (TCC) for some of the costs consequences.

Jalla & Anor v Shell International Trading and Shipping Company Ltd & Anor [2023] EWHC 424 (TCC) is a follow-up of earlier, procedural (including jurisdictional) issues which I discuss here.

[1]-[2] The 2011 Bonga Spill emanated from an offshore floating production, storage and off-loading facility (“the Bonga FPSO”), located approximately 120 kilometres off the Nigerian coastline of Bayelsa State and Delta State within the Nigerian Exclusive Economic Zone. The Spill was caused by a rupture of one of the pipelines connecting the Bonga FPSO to a single point mooring system (“SPM”), both of which were operated and controlled by one of the defendants, Shell Nigeria Exploration and Production Company Ltd (“SNEPCo”), a Nigerian company regulated by the Nigerian governmental authorities. The technical manager of the vessel, the MV Northia, that was loading from the Bonga FPSO at the time of the spill was another defendant, Shell International Trading and Shipping Company Ltd, (“STASCO”), a company domiciled and registered in the UK.

Anchor defendant is STASCO. SNEPCo is co-defendant.

The High Court had determined that the claims for damage caused by the Spill  could not constitute a continuing nuisance until any pollution was remedied, so as to extend the limitation period and defeat the defendants’ limitation defence; it held claimants each had a single claim in nuisance in respect of any damage caused by the Bonga Spill, such cause of action accruing when their land and/or water supplies were first impacted by the oil. Claimants’ appeal against that part of the judgment as I reported earlier was dismissed by the Court of Appeal [2021] EWCA Civ 63  and this “Continuing Nuisance Appeal” is now being appealed to the Supreme Court.

[4] Current case is to determine the date on which actionable damage, if any, was suffered by the claimants as a result of the Bonga Spill, for the purpose of deciding whether any of the claims against the anchor defendant, STASCO, are statute-barred for limitation and, therefore, whether E&W courts have jurisdiction to determine the substantive claims. 

[39] Stuart-Smith J (as the then was), alongside the jurisdictional challenges, had further held that the High Court had no discretion to allow, or would refuse, amendment of the claim form to join STASCO and the amendment to add allegations against STASCO, if and to the extent that the applications were made after the expiry of the relevant limitation period. The allegations against STASCO in respect of its responsibility for the  were deemed by the court not to have been made until 2 March 2020.

[40] ff

The issue of jurisdiction as against SNEPCo, a Nigerian corporation, is dependent on there being a valid claim against STASCO, a UK corporation. The court rejected other jurisdictional challenges made by the defendants but was unable to finally dispose of the challenge to jurisdiction because it was subject to the outstanding issue as to whether the claims against STASCO were statute-barred. If the claims against STASCO, the anchor defendant, were statute-barred, there would be no basis on which service out of the jurisdiction against SNEPCo could be permitted and the court would have no jurisdiction to determine any of the claims.

Given the significance of the limitation issue, the court ordered that there should be a trial of preliminary issues to determine in respect of all claimants the date on which they suffered damage, the appropriate limitation period and limitation as a defence to the claims.

Parties agree that Nigerian Law applies to the claims relating to the spill, including the limitation period applicable to the claims (the case therefore does not engage with the outstanding issue of the treatment of limitation under Rome II, discussed most recently in Bravo v Amerisur Resources (Putumayo Group Litigation). The issue between the parties is whether the applicable limitation period is six years, as submitted by the claimants, or five years, as submitted by the defendants.

O’Farrell J holds that given the date of damage, none of the claims in these proceedings was made against STASCO within any applicable limitation period. Obiter, she holds on the limitation issue anyway.

The relevant law that applies in Nigeria is the (English) Limitation of Actions Act 1623 which provides for a limitation period of six years for claims that would amount to tortious claims. The National Assembly for the Nigerian Federation has not enacted any general limitation statute and no such provision is made in the Constitution. The State legislature for Delta State however has enacted a general limitation statute. Section 18 of the Limitation Law of Delta State 2006 (“the Delta State Limitation Law”) provides for a limitation period of five years for claims in tort. 

[306] Claimants’ position is that the limitation period applicable to their claims is the six-year period provided for by the 1623 Act. In the absence of specific federal legislation on this issue, they argue this residual provision is the limitation law generally applicable in Nigeria, including at a federal level, by virtue of section 32(1) of the Interpretation Act 1964; further, that the Delta State Limitation Law is inapplicable in the Federal High Court; only federal legislation can apply, irrespective of where the Federal High Court sits.

Further, [307], claimants argue they are entitled by Article 7 Rome II  to choose the law applicable in the Nigerian Exclusive Economic Zone (“EEZ”) as the lex causae governing their claims for environmental damage, as the country where the event giving rise to the damage occurred, the locus delicti commissi, Handlungsort. The EEZ falls within the control of the Federal Government of Nigeria; as such, it would be subject to the Nigerian Federal law of torts and the residual 1623 Act limitation period.

[308] Defendants’ position is that the limitation period applicable to the claims is the five-year period provided for by the Delta State Limitation Law. The relevant Federal High Court for the claims would be the Federal High Court in Delta State, as the place where the alleged damage occurred. They suggest Nigerian authorities on limitation confirm that if a local limitation law exists in the relevant state, that law applies to the claim; and the limitation statute of each state is territorial in scope. On that basis, the Delta State Limitation Law applies to any action brought in the territorial area of Delta State, including the Federal High Court in Delta State.

[309] viz A7 Rome II they argue the Nigerian EEZ is not a “country” for the purpose of Article 25(1) Rome II [‘“Where a State comprises several territorial units, each of which has its own rules of law in respect of non-contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation”], that it has no applicable limitation law and that it would not override the jurisdiction of the Federal High Court to determine the claims in these proceedings.

The judge [336] ff holds the country in which the alleged damage occurred is Delta State, making the law of Delta State the default choice of law under Article 4(1) Rome II; that although the claims are for environmental damage, and the event giving rise to the alleged damage occurred at the FPSO within the Nigerian EEZ, the EEZ is not a country within the meaning or A25(1): Nigeria is a Federation with 36 states plus the FCT of Abuja. The EEZ is not a territorial unit and does not comprise one of those states; and the EEZ does not have its own rules of law in respect of non-contractual obligations.

The remainder of the judgment deals with issues of proof of foreign customary law.

Interesting!

Geert.

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The CJEU on consumer signalling with a view to the protected categories, in Wurth Automotive. One or two further specifications of its Gruber, Milivojević, Schrems case-law.

The CJEU last week held in C-177/22 JA v Wurth Automotive. The case concerns the consumer title of Brussels Ia, in particular a refinement of the CJEU  C-630/17 Milivojević and C-28/18  Petruchová case-law (involvement of people with a background in the sector), C-498/16 Schrems (evolvement of use from non-professional to professional or the other way around) and  CJEU C‑464/01 Gruber criteria (dual (non-)professional use).

Applicant in the main proceedings, whose partner is a car dealer and managing director of an online platform for the sale of motor vehicles, was mentioned on the homepage of that platform as the graphic and web designer, without actually having carried out that activity at the time of the facts in the main proceedings. At the request of the applicant in the main proceedings, the partner did some research and contacted the defendant in the main proceedings from his professional email address, in which he indicated a price offer for the purchase of a vehicle. It was stated in that email that the contract of sale was to be concluded on behalf of the applicant in the main proceedings, however a little while after the purchase the partner enquired (but was rebuffed) about the possibility to indicate the VAT amount of the invoice (typically only of interest to business buyers).

Firstly, in applying the consumer title, must account be taken of current and future purposes of the conclusion of that contract, and of the nature of the activity pursued by that person as an employed or self-employed person? As for the latter, the CJEU answer [27] is clearly ‘no’, with reference to Roi Land Investments. As for the former, whether the purpose for the use is current or planned in the future, per Milivojević [88-89], is held by the CJEU not to be of relevance. I would personally add to both Milivojević and Wurth Automotive that any such future use must have been somehow signalled to the business. While the CJEU in Schrems confirmed the possibility to lose the consumer status as a result of subsequent professional use, it has not held (and in my view ought not to) that an initial professional use later changed to non-professional use, may belatedly trigger the consumer section (it has of course supported the later ‘internationalisation’ of the contract per Commerzbank).

Next, what is the burden of proof on whom, and what needs to be proven, when a good or service has been procured for dual professional and non-professional use. Here, the CJEU [30] ff confirms that first of all the professional use or not of the good or service needs to be established on the basis of the objective elements of the file. Only if “that evidence is not sufficient, that court may also determine whether the supposed customer had in fact, by his or her own conduct with respect to the other party, given the latter the impression that he or she was acting for business purposes, such that the other party could legitimately have been unaware of the non-professional purpose of the transaction at issue” [32].

[36] “the impression created by the conduct of the person claiming the status of ‘consumer’….on the part of the other contracting party, may be taken into account to establish whether that person should be afforded the procedural protection laid down in Section 4 of that regulation.”

In the case at issue,

[38] inaction following the presentation of a contract identifying the buyer as a trader, can constitute evidence (but not of singlehandedly determinative value) that the applicant in the main proceedings could have created, on the part of the defendant in the main proceedings, the impression that she was acting for professional purposes;

[39] ditto the sale of the vehicle shortly after the conclusion of the contract and [40] the potential making of a profit, albeit that the latter would in the view of the CJEU ordinarily not be of great impact.

The CJEU finally is not prepared (despite a self-confessed [47] in Wurth Automotive] potential to read same in CJEU Gruber) to read a benefit of the doubt, in inconclusive cases, to the benefit of the alleged consumer, leaving that with reference to CJEU TOTO to national procedural law. Here I think the Court could have held against such benefit on the basis of Brussels Ia itself.

Geert.

EU private International Law, 3rd ed. 2021, 2.231 ff.