GtFlix. Hogan AG suggests the jurisdictional gateway for economic damage, not defamation, catches malicious falsehood between economic operators.

As I noted when I signalled the reference, the French Supreme Court in C-251/20 GtFlix has not referred the question whether Bolagsupplysningen is good authority for acts of unfair competition between competitors. Rather, it queries whether Bolagsupplysningen means that a claimant who requests both rectification /retraction and damages, has to necessarily turn to courts with full jurisdiction or whether they can continue to turn for the damages part, to all courts with locus damni jurisdiction.

Hogan AG in his Opinion a few weeks ago (more analysis by  Marta Requejo Isidro here) right up to (94) revisits the wisdom of applying Shevill’s Handlungsort/Erfolgort distinction and the possibility of using GtFlix to overturn. I agree that this is not the case to do it. (On the CJEU and overturning its authority, see excellently the departing Bobek AG in C‑205/20).

At 95 he then essentially requalifies and answers the question which the SC had not referred. The action at the French courts is one in dénigrement, which is a form of malicious falsehood which, the AG suggests, does not call into question the Bolagsupplysningen line of cases but rather Tibor Trans and the cases before it.

An action relating to an infringement of unfair competition law may be brought before the courts of any Member State where that act caused or may cause damage within the jurisdiction of the court seised. Where the market affected by the anticompetitive conduct is in the Member State on whose territory the alleged damage is purported to have occurred, that Member State must be regarded as the place where the damage occurred for the purposes of applying Article 7(2) (99).  A final reference at (102) ff is to the applicable law level under (Article 6) Rome II. 

Should the CJEU follow, one of the left-over questions following Bolagsupplysningen will not be answered, yet another issue on falsehoods spread between competitors, will.

Geert.

(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2

Rantos AG in TOTO. Important considerations on lis pendens and provisional measures, and on contractual drafting of choice of court.

Advocate General Rantos opined two weeks ago in C-581/20 Skarb Państwa Rzeczypospolitej Polskiej reprezentowany przez Generalnego Dyrektora Dróg Krajowych i Autostrad v TOTO SpA – Costruzioni Generali et al. – I propose we shorthand the case as ‘TOTO’.

Following public procurement, the Polish treasury granted the works for the construction of a stretch of motorway to an Italian consortium. In the contract, choice of court is made for Poland. The necessary guarantees eg for payment of fines in the event of late completion, were underwritten by a Bulgarian insurance company, whose guarantee is subject to Polish law. The consortium  to no avail sought negative declaratory relief (with a view to obtaining a finding that no fines are due under the contract) and injunctive relief (with a view to prohibiting the Polish authorities from exercising the guarantee) with the Polish court with substance matter jurisdiction. However it subsequently secured the injunctive relief from a Bulgarian court with Article 35 Brussels Ia provisional measures jurisdiction. This relief expressed itself inter alia in custodial attachment of the guarantees which the Polish authorities had sought to exercise with a European Order for Payment form. That Bulgarian relief is now before the Bulgarian Supreme Court.

The questions before the court are  whether the provisional measures can at all be ordered under the A35 gateway given that they might concern acta iure imperii and not civil and commercial matters; and if the matter is within the scope of BIa, whether the A35 court may still order such measures if the court with subject-matter jurisdiction has denied them. Finally, whether if the issue is within the scope of BIa, the ordinarily applicable Bulgarian rule that no such relief may be ordered against public authorities, must be set aside.

The Advocate-General suggests the Court settle the questions mainly by recourse to the lis pendens rule of A29 ff of the Regulation, rather than by the alternative of focusing on the ‘provisional’ nature of the measures imposed by the A35 court. A29 ff do not limit their application to substance matter proceedings hence if and when the lis pendens conditions are met, the court last seized must (identical cases) or may (related cases) relinquish its jurisdiction. The opposite is true, as well: if the A35 court has been seized first, the court with subject-matter jurisdiction has been gazumped at least for provisional measures.

The AG also (55 ff) suggests that choice of court must be read to include authority for the chosen court to issue provisional measures, but not (unless expressly agreed; an issue of contractual interpretation which must be left to the national judge to assess) the exclusion of other courts to exercise their A35 jurisdiction.

Finally if the court with subject-matter jurisdiction has taken a definitive decision viz the provisional measures, that decision travels under Title III BIa and A45 does not seem to offer room to object to recognition and enforcement. Should that decision not yet be definitive, the ordinary lis pendens rules must apply.

This is a case with rather important contractual drafting and civil procedure consequences.

Geert.

EU Private International law, 3rd ed 2021, 2.512ff, 2.550 ff, 5.584 ff.

 

Yet again on distinguishing contract from tort (and on enforcement jurisdiction). Saugmandsgaard Oe reigns in forum delicti and forum contractus in HRVATSKE ŠUME.

Saugmandsgaard Oe AG opined (no English version at the time of writing) last week in C‑242/20 HRVATSKE ŠUME on the classic conflict of laws issue of distinguishing contract from tort.. He, oddly perhaps, unless some technical reason for it escapes me, does not entertain the question on the scope of Article 24(5) Brussels Ia’s exclusive jurisdictional rule for ‘proceedings concerned with the enforcement of judgments’.

The Opinion is a Qualificationfest.

The case concerns actions for recovery of sums unduly paid, in other words, undue enrichment. This enrichment came about by a Croatian court having  earlier ordered Hrvatske Šume, debtor of  Futura, both of Croatia, to pay its debt to Futura directly to BP Europe SA, successor to Burmah Oil, both domiciled in Germany. Hrvatske appealed that order however that appeal did not halt the payment. Now that the appeal has turned out to be successful, Hrvatske want their money back yet so far Croatian courts have held that they do not have jurisdiction under Article 7(2) BIa (the case actually went under the the predecessor, Brussels I however there is no material difference).

As the referring court notes, there is no delicti commissi in the case of unjust enrichment: it is a non-contractual obligation in which no delict is committed. (This is the very reason Rome II includes a separate heading for unjust enrichment). One might suggest this would leave forum damni only under A7(2), however the AG correctly in my view re-emphasises the seminal statements in CJEU Kalfelis, that actions under A7(2) concern ‘all actions which seek to establish liability of a defendant  and which are not related to a ‘contract’ within the meaning of Article [7](1)’. Unjust enrichment not seeking to establish liability, A7(2) is not engaged. Along the way, note his discussion of linguistics and his seeking support in Rome II.

At 71 ff the AG distinguishes the wide interpretation of ‘establishing liability’ in CJEU Austro Mechana.

A clear implication of the Opinion is that it confirms a disjoint in BIa /Rome II: not all non-contractual obligations for which Rome II identifies a lex causae, are caught by A7(2) BIa’s forum delicti rule.

The AG also engages with the possibility of Croatia being forum contractus  (he kicks off his Opinion with this issue) and dismisses it, seeking support inter alia in CJEU Handte and also in Rome II specifically providing for an unjust enrichment heading. This part of the Opinion is more optimistically straightforward than one might have expected. Following flightright, Wikingerhof etc., A7(1) has been (unduly, in my view) stretched and it would be good to have the CJEU further clarifying same. (C-265/21, in which I have been instructed, might be just the case).

Geert.

EU Private International Law, 3rd ed. 2021, 2.419 ff.

Winslet & Ors v Gisel. Textbook application of De Bloos and looking over the fence to determine forum contractus.

Winslet & Ors v Gisel, The Estate of [2021] EWHC 1308 (Comm) is a brilliant example to teach the ‘looking over the fence’ method for determining forum contractus under Article 7(1), for contracts that do not fall within the default categories and whence the CJEU De Bloos place of performance bumps into the limits of harmonisation following CJEU Tessili v Dunlop. Confused?: the judgment certainly helps.

Claimants, domiciled at England, seek to recover from the estate of a late friend, a considerable sum by way of repayment of principal in respect of a number of interest-free loans between friends (the borrower domiciled at France).

At [16] Butcher J holds (despite considering the broad interpretation of ‘services’ by the AG in Corman-Collins /Maison du Whiskey) ‘In my judgment, the simple provision of money to a friend, which is not undertaken as part of a business of lending money, probably does not qualify as the provision of a service’ (per A7(2), GAVC – reference is made to C-533/07 Falco Privatstiftung v Weller-Lindhorst [29]: “The concept of services implies, at the least, that the party who provides the service carries out a particular activity in return for remuneration.”

The answer to the question ‘what is the place of performance of the obligation to repay’ therefore leads to Rome I per CJEU Tessili v Dunlop and to Article 4(2) Rome I. [26]

‘In the context of banking services, it is, at least ordinarily, the lender that renders characteristic performance of a loan agreement in providing the principal sum to the borrower’ (reference to CJEU Kareda). [27] ‘The question of which party renders the characteristic performance of a loan agreement outside the sphere of financial services has been viewed as rather less clear cut.’ [32] ‘pursuant to the contracts of loan which are in issue, claimants loaned money in return for a promise to repay.’ They, it is held, rendered characteristic performance under the Loans.

As a result, the Loans are governed by English law, as England is the place where each claimant has his or its habitual residence, and English law therefore determines the place of performance, which it does at the creditor’s place of residence or business (contrary it would seem to the position under French law.

Superbly clear analysis.

Geert.

EU private international law, 3rd ed. 2021, 2.401 ff.

Abusive forum shopping in defamation suits. The Parliament study on SLAPPs.

Strategic Lawsuits Against Public Participation – SLAPPs (I look at them comparatively in my Monash Strategic and Public Interest Litigation Unit, LAW5478) are a well-known tool to silence critics. Based on defamation, they (or the threat with them) aim to shut down the voice of opposition. Not many find the energy, financial resources and nerves to fight a protected libel suit in court.

The EP recently published the study led by Justin Borg-Barthet and carried out by him and fellow researchers at the University of Aberdeen. At the substantive level, distinguishing between SLAPPs and genuine defamation suits is not straightforward. As Justin et al point out, there is an important private international law element to the suits, too. Clearly, a claimant will wish to sue in a claimant-friendly libel environment. Moreover, where a deep-pocketed claimant can sue in various jurisdictions simultaneously, this compounds the threat.

The Brussels and Lugano regime is particularly suited to the use of SLAPPs as a result of the CJEU case-law on Article 7(2) forum delicti. The Handlungsort /Erfolgort distinction as such already tends to add jurisdictional gateways. In more recent years this has been compounded by the additional ‘centre of interests’ gateway per CJEU e-Date and Bolagsupplysningen – even if this was recently somewhat contained by the Court in Mittelbayerischer Verlag. As I have flagged before, Brussels Ia’s DNA is not supportive of disciplining abusive forum shopping, as illustrated ia in competition law and intellectual property law cases.

For these reasons, the report (Heading 4, p.33 ff) suggests dropping the availability of Article 7(2) and sticking to Article 4 domicile jurisdiction, supplemented with (unlikely) choice of court.

The European Parliament more than the European Commission has picked up the defamation issues both for BIa and for applicable law under Rome II (from which the issue is hitherto exempt; the report reviews the applicable law issues, too). It remains to be seen whether with this report in hand, Parliament will manage to encourage the EC to pick up the baton.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.431 ff, 4.24 ff.

 

The Antwerp court of first instance in CMB (Bocimar NV), ‘The Mineral Water’: In dubio pro reo or a perfect excuse for forum shopping?

The Antwerp court of first instance (criminal section) has held last Friday, 25 June (I have copy of the judgment (in Dutch) on file) in the prosecution against CMB (an Antwerp based shipowner; specifically: Bocimar NV) and a number of individuals for the alleged illegal transport of waste, in the shape of the discarded ship the Mineral Water, destined for beaching at Chittagong, Bangladesh (the same location of relevance in Begum v Maran).

The Mineral Water was built in 1999, bought by CMB in 2007. A decision was made ‘end 2015’ (the judgment does not clarify specific date and /or circumstance of that decision) to sell  her, with a view to recycling. That sale was approved on 19 January 2016 by Bocimar Board Decision, to a cash buyer based on the British Virgin Islands, when the ship was anchored at Fangcheng, China. Actual transfer of the ship happened at Malaysia a few weeks later. The ship’s registry was changed from Antwerp to Niue after the transfer and she was beached at Chittagong in February.

The case is a criminal prosecution which of course carries with it a high burden of proof. Seeing as the ship sailed under Belgian flag, the principled application of Belgian and EU law was not as such disputed. Neither do the original owners dispute that at the time of the January 2016 decision, the ship met with the definition of waste ia per CJEU Shell. However defendants argue the EU Waste Shipments Regulation – WSR does not apply for, they argue, the Mineral Water never sailed in European waters and was not physically exported from the EU with a view to recycling (p.5 in fine).

[The court later (p.8) notes this is not quite correct: occasionally EU ports were used for (un)loading and in 2015 there was rare bunkering at Malta].

The court held for the defence. Core to the decision is Article 2, 30 31 and 32: the definitions of ‘import’, ‘export’, ‘transfer’. The prosecutor seeks support in Article 2.22: ”country of dispatch’ means any country from which a shipment of waste is planned to be initiated or is initiated’. The court however held that neither the place of decision nor the flag State is of relevance to the territorial scope of application of the WSR. (Note the contrast on that point with the Ships Recycling Regulation – SRG 1257/2013, not applicable to the facts at issue).

One imagines more on that issue can and should be said upon appeal.

The countries of dispatch, transfer and destination of the ship are all ex-EU. Importantly, at p.8 the court notes there is no indication that the owners would have gamed the system to ensure the ship lay outside EU territorial waters at the time of the decision to discard.

The case shows the importance of the flag State in the SRG (itself not free of difficulties; the IMO Hong Kong Convention should avoid gaming). Of note is also that the place of decision-making (relevant for conflict of laws: locus delicti commissi, eg under A7 Rome II as discussed in Begum v Maran) did not play a  role. The crucial element was the almost complete lack of physical contact between the ship and the EU.

One assumes the prosecution will appeal.

Geert.

Handbook of EU Waste law, 2015, Chapter 3.

Mittelbayerischer Verlag: the CJEU surprisingly reigns in Article 7(2) centre of interests jurisdiction in cases of online defamation.

I reviewed the AG’s Opinion in C-800/19 Mittelbayerischer Verlag KG v SM here. The CJEU held yesterday (no English version yet at the time of posting). Tobias Lutzi already has analysis up here.

As I reported at the time, the AG suggested that despite the need for restrictive interpretation of the special jurisdictional rules, in the case at issue there was foreseeability of many a Pole’s centre of interests as a tort gateway, given the predictable fall-out of protest among Poles given the contents and context of the article (please refer to earlier post for detail): an ‘objective foreseeability test’.

The CJEU however restricts the availability of the centre of interests gateway further:  [46]

article 7, point 2, du règlement no 1215/2012 doit être interprété en ce sens que la juridiction du lieu où se trouve le centre des intérêts d’une personne prétendant que ses droits de la personnalité ont été violés par un contenu mis en ligne sur un site Internet n’est compétente pour connaître, au titre de l’intégralité du dommage allégué, d’une action en responsabilité introduite par cette personne que si ce contenu comporte des éléments objectifs et vérifiables permettant d’identifier, directement ou indirectement, ladite personne en tant qu’individu.

The aggrieved needs to be identifiable, at the time of publication, as an individual, not as belonging to an abstract group of offended persons.

With Gtflix TV pending, the CJEU will have a further opportunity to clarify the A7(2) gateway for defamation.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.12.2.5, and para 2.598 in fine.

 

 

DTEK Energy: Grounds for the Rome I issue of Schemes of Arrangement to be heading for the Court of Appeal.

In DTEK Energy BV, Re [2021] EWHC 1551 (Ch) Norris J yesterday expanded on his reason to sanction this scheme of arrangement of a Dutch corporation. I had referenced an earlier DTEK scheme in my post here. The judge firstly pointed out the straddle position of the E&W courts, in assessing the sanction of the scheme from the jurisdictional point of view: [30]:

for the purposes of testing whether the Judgments Regulation presented a jurisdictional bar to the English Court exercising jurisdiction over EU domiciled scheme members or creditors it was assumed to apply (and an appropriate gateway identified). But for the purposes of testing international effectiveness it was not assumed to apply, and the English Courts looked for expert evidence which demonstrated alternative bases.

He also points out [31] what I have repeatedly mentioned: the analysis was never extensive, for the schemes tended eventually to be unopposed. Summary of the default position is done [31] with reference to Van Gansewinkel (in which I acted as one of the experts) seeing as, like DTEK, it involved recognition and enforcement in The Netherlands.

At [37], importantly, the judge refers to a report produced by Prof. Dr. Christoph Paulus and Prof. Dr. Peter Mankowski as to the likelihood of the recognition of the Bank Scheme by EU Member States. They seemingly are of opinion that the Bank Scheme would be given effect in every Member State by virtue of Art 12(1)(d) Rome I. This provides that the law applicable to a contract (in the instant case, English law) shall govern the various ways of extinguishing obligations: and that rule covers all modes of extinguishing obligations (including those operating against dissentient creditors). At [38] this conclusion is said to have been supported by a number of relevant E&W precedents (all of which  I have reported on the blog; see eg Lecta Paper) however these all merely scratched the surface.

Gazprombank however oppose this conclusion and refer in support to a report produced (I have not seen it) by Dr Peters (sic; it’s Prof Dr Niek Peters) for the Dutch situation and, at [44] by Mr Vorkas for the Cypriot situation. Both question the opposability of the scheme to recalcitrant creditors in light of amended choice of law. I have not studied the issue in the detail these reports have, and I have not seen any of them. However my own view on this is that there is certainly merit in what is here the opponents’ input:  the position of certain English schemes under Rome I is really quite vulnerable.

At [41] the judge on balance sides with the Paulus /Mankowiski report for ‘it is common ground that I cannot decide between the rival Dutch views’ (later repeated for the Cypriot report). I do not think that is necessarily correct, or at least it deserves some discussion: Brussels Ia may not be retained EU law yet Rome I is, therefore this is arguably not an issue of ‘foreign law’ (and certainly not ‘Dutch law’).  

Conclusion [46]: If sanctioned, the Bank Scheme will certainly be effective as regards 95% of Energy’s creditors. There is a reasonable prospect that the sole dissentient creditor will be unable to mount any challenge to it. Even in the event of a challenge, uncontested evidence demonstrates that the Bank Scheme will be effective in the jurisdiction in which operations are undertaken and assets located.

Seeing as this is one of the first times the BIa and particularly the Rome I situation is discussed in greater detail, I do hope this case is heading for the Court of Appeal.

Geert.

EU Private International Law, 3rd ed. 2021, para 5.35 ff.

Suing TikTok: on GDPR and ordinary jurisdiction, as well as applicable law in the Dutch collective claim.

A short note on the claim form for the collective claim by a group of parents based in The Netherlands against TikTok Technology Limited, domiciled at Dublin, Ireland.  It engages Article 79 GDPR, as well as the consumer section of Brussels Ia. At the applicable law level, it suggests application of Article 6 Rome I (consumer contracts; a logical counterpart of the jurisdictional analysis) and, in subsidiary fashion, Article 4 Rome II, each to suggest application of Dutch law.

I wrote on Article 79 here, and the problems which I signalled have in the meantime surfaced in case-law, as I signalled ia here.  Current TikTok claim however prima facie would seem to be more straightforward under both GDPR, BIa and Rome I – one imagines a possible TikTok’s defence to go towards the meaning of ‘establishment’.

Geert.

 

WWWRT v Tyshchenko. Interesting if contestable engagement with Brussels IA’s Article 34’s forum non-light regime.

In WWRT Ltd v Tyshchenko & Anor [2021] EWHC 939 (Ch) and following an earlier Worldwide Freezing Order, Bacon J engages with Article 34 Brussels Ia’s forum non conveniens ‘light’ regime.

The proceedings are brought by WWRT ltd against Mr Serhiy Tyshchenko and his ex-wife, Mrs Olena Tyshchenko. The claim is founded on an allegation that the Defendants carried out an extensive fraud on the Ukrainian bank, JSC Fortuna Bank during which time the bank was (it is claimed) ultimately owned by Mr Tyshchenko. The bank was subsequently declared insolvent and was liquidated, in the course of which a package of its assets, including the disputed loans, was sold to Ukrainian company Star Investment One LLC.  Star in turn sold those rights and assets to WWRT in March 2020. WWRT’s case is that following those two assignments it has now acquired the rights to bring the claim relied upon in the present proceedings, which is one in tort under Article 1166 of the Ukrainian Civil Code.

In current proceedings, defendants contest jurisdiction, on the basis of 3 alternative grounds:

Firstly, the principle of ‘modified universalism’ (which I have discussed ia here) which should ground a stay under common law so as to prevent WWRT from bypassing the Ukrainian insolvency proceedings. The suggestion is that CJEU Owusu did not deal with a potential stay to allow the judge in one EU Member State to stay proceedings so as to support insolvency proceedings in another Member State. Bacon J held [57], in my view justifiably, that even if indeed the CJEU in Owusu did not specifically deal with this issue, its reasoning (particularly the insistence on predictability and legal certainty) extends to the current scenario. Insolvency proceedings may well (and indeed clearly) fall outside BIa’s scope, however the claim at issue is one in tort, which falls squarely within it. At 62 ff he discusses obiter that even if such stay would have been theoretically possible, he would not have exercised his discretion to grant it.

Secondly, at 89 ff, a stay by analogy with A34 BIa. It is seemingly common ground between the parties and the judge that the bankruptcy exclusion in A1 BIa precludes the express application of A34 if the pending action in the third State is in the nature of bankruptcy or insolvency proceedings. Support is found in Baker J’s views in BB Energy. This is not a settled issue. Neither is much discussion, pro or contra, of the in my view unjustifiable finding of reflexive application of A28 Lugano in JSC Commercial Bank v Kolomoisky [2019] EWCA Civ 1708. The more sound rejection of an A34 stay in the case at issue  in my view lies in the judge’s obiter finding at 95 that the proceedings in E&W are not ‘related’ to those in the Ukraine.

Thirdly, a more straightforward argument of lack of domicile of one of the defendants in the UK, hence room for a forum non conveniens stay. This argument was in fact dealt with first, at 38 ff, with Bacon J  holding on the basis of a pattern of settled residence that domicile was in fact established. At 98 ff he holds obiter that even if A4 hence BIa had not been engaged, he would not have allowed a stay on forum non grounds.

In conclusion, the freezing orders were continued.

Geert.

EU Private International Law, 3rd ed 2021, para 2.539 ff