Posts Tagged Jurisdiction

The Brussels jurisdictional regime at 50. A conference at Leuven on 23 March.

As I am about to take the family on a half-term break (and with no less than 22 draft blog posts in the ledger – February /March are likely to be intense blog months), I am pleased to flag a conference which I am calling together with Jura Falconis, the faculty’s student-run law review.

Registration and program are here. Below is the blurb and exciting line-up. It would be great to see many of you at Leuven! Geert.

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In 2018 we celebrate the 50th year since the adoption of the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. The 1968 attempt to facilitate the free movement of judgments in the EU, helped lay the foundations for the exciting developments in European private international law which have occurred since. Many of the outstanding issues in what is now the Brussels I Recast (also known as EEX-bis; or Brussels Ibis) continue to have an impact on other parts of European civil procedure.

Co-organised by Leuven Law’s Institute of Private International Law and Jura Falconis, KU Leuven’s student law review, this event will consider, capita selecta wise, the application and implications of the Convention and its successors. It will also discuss the future direction of EU private international law both for civil and commercial matters, and for issues outside of commercial litigation. At a time when in most Member States the majority of commercial transactions have some kind of international element, this is a timely refresher for practitioners, judges, students and scholars alike.

PROGRAM

Morning program. Chaired by professor Jinske Verhellen (U Gent)

10:00 – 10:30 
Registration and welcome

10:30 – 10:35 
Opening by Jura Falconis

10:35 – 11:00
Les grands courants of 50 years of European private international law
Professor Geert Van Calster (KU Leuven)

11:00 – 11:30
Regulatory competition in civil procedure between the Member States
Professor Stéphanie Francq (UC Louvain)

11:30 – 12:00 
The application of Brussels I (Recast) in the Member States
Professor Burkhard Hess (Max Planck Institute Luxembourg)

12:00 – 12:15
Discussion

12:15 – 13:00
Lunch

Afternoon program. Chaired by professor Karen Vandekerckhove (European Commission’s Directorate General for Justice and Consumers, UC Louvain)

13:00 – 13:30
Brussels calling. The extra-EU application of European private international law
Professor Thalia Kruger (U Antwerpen)

13:30 – 14:00
The (not so symbiotic?) relation between the Insolvency and the Brussels I regimes
Arie Van Hoe (NautaDutilh, U Antwerpen)

14:00 – 14:30
Alternative Dispute Resolution and the Brussels Regime
Professor Stefaan Voet (KU Leuven)

14:30 – 15:00
Brussels I Recast and the Hague Judgments Project
Professor Marta Pertegas (U Antwerpen)

15:00 – 15:15
Discussion

15:15 – 15:45
Coffee break

15:45 – 16:10
Provisional measures under the Brussels regime
Professor Arnaud Nuyts (ULB)

16:10 – 16:30
Brussels falling. The relationship between the UK and the EU post Brexit
Dr Helena Raulus (UK Law Societies’ Brussels office)

16:30 – 16:50
The current European Commission agenda for the development of European private international law
Dr Andreas Stein (European Commission’s Directorate General for Justice and Consumers)

16:50 – 17:15
The CJEU and European Private International Law
Ilse Couwenberg (Judge in the Belgian Supreme Court/Hof van Cassatie)

17:15 – 17:30
Close of conference
Professor Geert Van Calster (KU Leuven)

17:30 – 18:30
Drinks

 

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Bestolov v Povarenkin. On the determination of domicile (and yes, Owusu strikes again).

Many thanks to Andrew Savage and Nick Payne for flagging [2017] EWHC 1968 (Comm) Bestolov v Povarenkin a little while ago, and for sending me copy of the judgment at the time. Apologies for late reporting: frustratingly even at gavclaw we cannot always devote the amount of time to the blog we would wish. Dr Maganaris in the meantime also has summary here.

As readers no doubt are aware, the Brussels I Recast Regulation (Article 62) does not define ‘domicile’: it defers to national private international law on the issue. The Civil Jurisdiction and Judgments Order 2001 establishes that a person is domiciled in England for the purpose of the Brussels Regulation (recast) if: the person is “resident” in England; and (cumulatively) the person has a “substantial connection” to England. Bryan DJ takes us through the relevant (and often colourful) precedent and notes, importantly, at 28 that the consequence of the English rules is that the same person can be resident in two different jurisdictions at the same time. At 44, he summarises with a list of criteria, and decides on the facts of the case that Mr Povarenkin is indeed domiciled in England (the substantial connection test having been more easy to determine than that of residence).

Subsequently the High Court reviews at length whether there was a valid choice of court agreement under Article 25 of the Regulation – which at this jurisdictional stage of the proceedings Bryan DJ decides there was not (choice of law for the relevant contracts being English law, was justifiably not considered definitive in this respect), at least not clearly. Obiter, the judge reviews forum non conveniens, at lenght in fact (and in a very clear way with a keen eye on relevant precedent as well as court practice in England) however he holds both before and after the obiter that evidently given Owusu, forum non conveniens has no calling.

A well written judgment, the approach of which on domicile evidently goes beyond having relevance merely for the English courts: for under the Regulation, courts in other Member States, too, may have to consider whether parties are domiciled in an EU Member State other than their own including, for the time being, the United Kingdom.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.3, Heading 2.2.14.5.

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International Bank of Azerbaijan: Principle or practice of ‘modified universalism’ in (cram-down resulting from) insolvency proceedings.

[2018] EWHC 59 (Ch) International Bank of Azerbaijan is an excellent illustration of the practicality v the doctrine of modified universalism in international insolvency law, as well as of the binding force of precedent even in a changing world. Hildyard J first summarises at 2 the question raised as ‘whether the Court has power to grant a permanent moratorium or stay to prevent a creditor exercising its rights under a contract governed by English law in order to prevent that creditor enforcing its rights contrary to the terms of the foreign insolvency proceeding by which all creditors were, under the relevant foreign law, intended to be bound. If it does, the second question is whether in its discretion the Court should exercise that power.’

IBA has fallen into financial difficulties, obliging it to enter into a restructuring proceeding under Azeri law. The Foreign Representative, Ms Gunel Bakhshiyeva (hence also giving her name to the official case-name) had the High Court issue an order  recognising the Restructuring Proceeding as a foreign main proceeding. That recognition order imposes a wide-ranging moratorium preventing creditors from commencing or continuing any action against IBA or its property without the permission of the Court.  The plan proposed by IBA pursuant to the restructuring proceeding has been approved by a substantial majority at a meeting of creditors in Azerbaijan, sanctioned by the relevant Azeri court, and as a matter of Azeri law, the plan is now binding on all affected creditors, including those who did not vote and those who voted against the Plan: a classic cram-down.

Respondents in the case contend that the plan cannot bind them. In each case their relationship as creditor with IBA is governed by English law. They rely on the (1890) rule in Gibbs, which states that a debt governed by English law cannot be discharged by a foreign insolvency proceeding. Reformulating the essential issues at 19, Hildyard J summarises them as

(1) Whether the Court has jurisdiction to extend a moratorium imposed under the CBIR without limit as to time, and in particular, beyond the date on which the foreign proceeding will terminate; and

(2) If so, whether the Court should refuse to lift the continuing moratorium in favour of a creditor whose debt is governed by English law, so as to prevent that creditor from achieving a better return than that enjoyed by all of the company’s other creditors under a restructuring plan promulgated in the jurisdiction in which the company is registered and has its centre of main interests (“COMI”).

At 44 ff Hildyard J excellently summarises the rule, and the critical reception of it in recent scholarship, the latter suggesting it is not just out of touch with a less anglo-centric view of the world, but also inconsistent with the English courts themselves expecting foreign recognition of schemes of arrangement (SAs being of a corporate, not lex concursus nature but nevertheless fishing in the same waters as insolvency proceedings) conducted in the English courts with English law as the lex causae.

Having summed up all the arguments against the rule and yet recent continued application of it, Hildyard J at 58 dryly notes that his place in the hierarchy means that he cannot simply swipe the rule aside: he must apply it and simply assess whether it applies in the current circumstances. More particularly, whether at one and the same time the ‘rule’ may formally be observed by accepting the continuation of the rights which English law confers, and yet also the principles of modified universalism which the UNCITRAL Model Law gives effect to.

Lengthy discussion then follows of the pros and contras, with the High Court eventually finding no persuasive argument to set aside the rule, particularly not by the English application of the UNCITRAL model law. Counsel had argued that qualifying the model law as procedural as opposed to substantive law, would enable the Court effectively to sidestep Gibbs as precedent. However Hildyard J prefered to accept the full force of precedent rather than sweeping it aside by the procedural pretext.

The substantive rule clearly is ripe for reconsideration by the Court of Appeal.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.1.

 

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Schrems v Facebook. Consumer class actions and social media.

I reported on Bobek AG’s Opinion in Schrems v Facebook when it came out last year. The CJEU held this morning (judgment so far in FR and DE only) and largely confirms the AG’s Opinion.

As I noted at the time, the long and the short of the case is whether the concept of ‘consumer’ under the protected categories of Brussels I (and Recast) is a dynamic or a static one; and what kind of impact assignment has on jurisdiction for protected categories.

On the first issue, Mr Schrems points to his history as a user, first having set up a personal account, subsequently, as he became the poster child for opposition to social media’s alleged infringement of privacy, a Facebook page. Each of those, he suggests, are the object of a separate contract with Facebook. FB suggests they are part of one and the same, initial contractual relationship. This one assumes, would assist FB with its line of argument that Herr Schrems’ initial use may have been covered by the forum consumentis, but that his subsequent professional use gazumps that initial qualification.

The Court suffices at 36 with the simple observation that the qualification as a single or dual contract is up to the national court (see inter alia the Gabriel, Engler and Ilsinger conundrum: Handbook, Chapter 2, Heading 2.2.11.1.a and generally the difficulties for the CJEU to force a harmonised notion of ‘contract’ upon the Member States), yet that nevertheless any such qualification needs to take into account the principles of interpretation of Brussels I’s protected categories: in particular, their restrictive interpretation. Whence it follows, the Court holds, that the interpretation needs to be dynamic, taking into account the subsequent (professional or not) use of the service: at 37-38: ‘il y a notamment lieu de tenir compte, s’agissant de services d’un réseau social numérique ayant vocation à être utilisés pendant une longue durée, de l’évolution ultérieure de l’usage qui est fait de ces services. Cette interprétation implique, notamment, qu’un requérant utilisateur de tels services pourrait invoquer la qualité de consommateur seulement si l’usage essentiellement non professionnel de ces services, pour lequel il a initialement conclu un contrat, n’a pas acquis, par la suite, un caractère essentiellement professionnel.’

The Court does add at 39-40 that acquired or existing knowledge of the sector or indeed the mere involvement in collective representation of the interests of the service’s users, has no impact on the qualification as a ‘consumer’: only professional use of the service does. (The Court in this respect refers to Article 169(1) TFEU’s objective to assist consumers with the representation of their collective interest).

On this point therefore the Court unlike the AG attaches more weight to restrictive interpretation than to predictability. (Bobek AG’s approach to the issue of dynamic /static was expressed more cautiously).

As for the assignment issue, the Court sides squarely with its AG: the assigned claims cannot be pursued in the jurisdiction which is the domicile of the assignee. That in my view de lega lata makes perfect sense.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

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Extraterritorial application of warrants: Our amicus curiae brief in the Microsoft Ireland case.

For background to the Microsoft  Ireland case under the Stored Communications Act (SCA), see here. The issue is essentially whether the US Justice Department may force Microsoft to grant access to e-mails stored on Irish servers.

With a group of EU data protection and conflicts lawyers, we have filed an amicus curiae brief in the case at the United States Supreme Court last week, arguing that the Court should interpret the SCA to apply only to data stored within the United States, leaving to Congress the decision whether and under what circumstances to authorize the collection of data stored in other countries.

There is not much point in me rehashing the arguments here: happy reading.

Geert.

 

 

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Prof Hess on Brexit and Lugano.

A concise note (I am currently tied up mostly in writing research grants. And and and… I hope to return to the blog in earnest later in the week) to signal prof Hess’ excellent short paper on Brexit and judicial co-operation. Prof Hess focuses on the possibility to use the Lugano Convention. (See here for a draft of Michiel Poesen’s overview). I agree that Lugano would not be a good route if one’s intention is to safeguard as much as possible co-ordination between the  UK’s common law approach to private international law, and the EU’s. Neither evidently if one aims to facilitate smooth cross-border proceedings.

Prof Hess has an interesting side consideration on schemes of arrangements. (Including reference to Apcoa). Again I agree that the English courts’ approach to same is not entirely without question marks (particularly jurisdictional issues in the event of opposing creditors: see here). I do not though believe that they would justify hesitation at the recognition and enforcement stage in continental Europe – even after Brexit. At least: not in all Member States. For of course post Brexit, UK judgments become those of a ‘third country’, for which, subject to progress at The Hague, we have no unified approach.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.

 

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Airia Brands Inc v Air Canada: jurisdiction and certification of global classes.

Interestingly enough the issue of inclusion of foreign victims in class action suits came up in conversation around our dining room the other day. (Our youngest daughter, 15, is showing encouraging signs of an interest in a legal career). In 2017 ONCA 792 Airia Brands Inc v Air Canada is reviewed excellently by Dentons here and I am happy to refer.  (See also here for Norton Rose reporting on related cases – prior to the CA’s decision in Airia Brands).

The jurisdiction and ‘real and substantial connection’ analysis referred to Van Breda (which recently also featured mutatis mutandis in the forum necessitatis analysis in  Cook).

Certification of global classes was part of the classic analysis of developments in international class action suits, which hit us a few years back when many EU states started introducing it. Airia Brands shows that the concerns are far from settled.

Geert.

 

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