Posts Tagged Jurisdiction

On ‘civil and commercial’, and, again, notaries as courts. The CJEU in Pula Parking.

Issued on the same day as Zulfikarpašić, Pula Parking Case C-551/15 deals with similar core issues, with a few extras thrown in. Pula Parking, a company owned by the town of Pula (Croatia), carries out, pursuant to a decision of the mayor of that town, the administration, supervision, maintenance and cleaning of the public parking spaces, the collection of parking fees and other related tasks. In September 2010, Mr Tederahn, who is domiciled in Germany, parked his vehicle in a public parking space of the town of Pula. Pula Parking issued Mr Tederahn with a parking ticket. Since Mr Tederahn did not settle the sums due within the period prescribed, Pula Parking lodged, on 27 February 2015, with a notary whose office is in Pula, an application for enforcement on the basis of an ‘authentic document’. A notary issued a writ of execution on 25 March 2015, on the basis of that document.  In his opposition, Mr Tederahn put forward a plea alleging that the notary who issued the writ of execution of 25 March 2015 did not have substantive and territorial jurisdiction on the ground that that notary did not have jurisdiction to issue such a writ on the basis of an ‘authentic document’ from 2010, against a German national or a citizen of any other EU Member State.

Does the Brussels I recast apply at all? And does it relate also to the jurisdiction of notaries in the Republic of Croatia?

On the temporal scope of the Brussels I Recast, the Court repeats its (Brussels Convention) Sanicentral (Case 25/79) finding: the only necessary and sufficient condition for the scheme of the Regulation to be applicable to litigation relating to legal relationships created before its entry into force is that the judicial proceedings should have been instituted subsequently to that date. Accession timing is irrelevant to the case: per C-420/07 Apostolides the Act of Accession of a new Member State is based essentially on the general principle that the provisions of EU law apply ab initio and in toto to that State, derogations being allowed only in so far as they are expressly laid down by transitional provisions.

On the substantial scope of the Brussels I Recast Regulation, for the issue of ‘civil and commercial’ the Court refers to its standing case-law (particularly most recently Aertssen and Sapir). In casu, it would seem (the national court is asked to confirm) that the parking debt claimed by Pula Parking is not coupled with any penalties that may be considered to result from a public authority act of Pula Parking and is not of a punitive nature but constitutes, therefore, mere consideration for a service provided. Brussels I applies.

However, notaries in casu do not act as courts: in a twin approach with Zulfikarpašić, the Court holds that the writ of execution based on an ‘authentic document’, issued by the notary, is served on the debtor only after the writ has been adopted, without the application by which the matter is raised with the notary having been communicated to the debtor. (at 58) Although it is true that debtors have the opportunity to lodge oppositions against writs of execution issued by notaries and it appears that notaries exercise the responsibilities conferred on them in the context of enforcement proceedings based on an ‘authentic document’ subject to review by the courts, to which notaries must refer possible challenges, the fact remains that the examination, by notaries, in Croatia, of an application for a writ of execution on such a basis is not conducted on an inter partes basis.

Geert.

European private international law, second ed. 2016, Chapter 2, Heading 2.2.16.1.1. Chapter 6, Heading 6.2.1.

 

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

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

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

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

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

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

Geert.

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

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Now you sue me, now you don’t. Trump v Daily Mail.

The president and Mrs Trump keep on exercising the courts. In Melania Trump v Webster Tarpley and Mail Media, Inc., the circuit court for Montgomery County, Maryland, accepted jurisdiction against the former, who is resident in Maryland, but rejected it against the latter, who is resident at New York. (It is registered there and also has its head office there). The second defendant is most likely the owner of the website dailymail.com and dailymail.co.uk. Whether that was really the case was left in the middle though for the Daily Mail group (whom Wikipedia today confirmed as no longer accepting as a source of facts), wanted the judge to rule on the merits of jurisdiction rather than on a possibly wrongly identified defendant.

Alleged libel concerns reports published by Mr Tarpley, a blogger, and the Daily Mail, relating to remarks, later retracted by both defendants, on alleged past racy activities of Mrs Trump. At issue was whether the courts at Maryland have personal jurisdiction over Mail Media. Mrs Trump’s legal team suggest publication of defamatory material in a publication with significant circulation in the forum state, suffices for jurisdiction. This, they argue, is compounded by targeted interactivity between the Daily Mail and readers in Maryland. Mail Media suggest there is no direct connection between Maryland and the Mail Article at issue and that even if the court were to accept such connection, jurisdiction should be refused on the basis of forum non conveniens.

The court accepted the first defence and did not therefore entertain the second. P.7: operating a website, even one that is popular and makes money from advertising, is not ‘purposeful availment’ under precedent rule: the publication has to intentionally enter the forum market: the MAil’s influence in the US is on a national (federal) basis.

Note to class: compare the court’s approach with that of European courts under the Brussels I Recast Regulation.

Mrs Trump has now refiled in New York, where both her and second defendant are resident.

Geert.

 

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Hooley: Modified universalism outside the EU’s Insolvency Regulation.

Hooley [Hooley v The Victoria Jute Company Ltd and others [2016] CSOH 14] has been sitting in my in-box for a few months. It concerns the liquidation (particularly: selling of companies’ assets by liquidators under Scots law) of companies incorporated in Scotland but with COMI (centre of main interests) outside the EU. In particular, India.

Given the presence of COMI outside the EU, the Insolvency Regulation does not apply. Indeed the Court of Session (Lord Tyre) does not refer to it at all.Findings would have been very different were the Regulation to apply: place of incorporation has to give way to COMI, where these two do not coincide, in which circumstance the place of incorporation at best may open secondary proceedings.

At issue was among others (and for the first time in a Scots court, I understand) the consideration of ‘modified universalism’: ie what is the practical impact of there being a company incorporated in Scotland, given Scots courts and administrators jurisdiction over the insolvencies, when the companies’ business is mainly carried out abroad and when proceedings are also pending abroad.

Per Rubin v Eurofinance, Universalism” means the “administration of multinational insolvencies by a leading court applying a single bankruptcy law.”  The principle of modified universalism was stated by Lord Sumption in Singularis Holdings Ltd v Pricewaterhouse Coopers [2015] AC 1675 (PC) at para 15 as being that “the court has a common law power to assist foreign winding up proceedings so far as it properly can” (see also Lord Collins at paragraph 33 and Lord Clarke of Stone‑cum‑Ebony at paragraph 112).

Essentially Lord Tyre had to decide whether the Scottish administrators’ powers were only exercisable to the extent that their exercise was recognised as legally valid by the law of the relevant non-UK jurisdiction. He held (at 36) that the proceedings taking place in India were ancillary to the administration proceedings in Scotland. The powers of a validly appointed administrator to a Scottish company were therefore not limited by the Indian winding up.

As often of course this judgment is but one side of the coin. Indian courts are at liberty to disregard the Scots findings. Any purchasers of Hooley assets therefore will have a compromised title. One assumes this has an impact on price.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.1, Heading 5.5.

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It does not get more The Hague than this. Footballing around jurisdiction, applicable law and corporate finance in ADO Den Haag v United Vansen (PRC)

Thank you Bob Wessels for alerting me to ADO Den Haag v United Vansen (of China). ADO Den Haag NV (the corporate vehicle of a Dutch Premier League club) domiciled at The Hague, sue United Vansen International Sports Co. Ltd, domiciled at Beijing, essentially for the latter to pay a deposit on the premium due for the shares it acquired in the club. Vansen did not appear.

First of all, were Vansen properly summoned in accordance with the Hague Service Abroad Convention (which both China and The Netherlands have ratified)? The court holds that it cannot yet decide that this has actually happened (relevant steps taken via the Dutch judicial authorities only recently having taken place) however it applies Article 15(3)’s provisions for extreme urgency: ‘Notwithstanding the provisions of the preceding paragraphs the judge may order, in case of urgency, any provisional or protective measures.

Next up: do the Dutch courts have jurisdiction? Given the defendant’s domicile outside of the EU and the non-applicability of any of Brussel I’s rules where domicile is irrelevant, the Court applied Dutch residual rules of private international law. These grant it jurisdiction essentially in respect of urgent proceedings of attachment.

Of more interest to this blog is the court’s consideration of applicable law, which the Court conducts with reference to Rome I. The share purchase agreement seemingly did not contain choice of law, either implicit or explicit: at 2.15, the court suffices with a mere observation of the absence of choice of law. None of the standard contracts of Article 4(1) Rome I applies [there is some discussion in scholarship whether share purchase is covered by Article 4(1)a’s ‘contract for the sale of goods’], hence the relevance of Article 4(2)’s ‘characteristic performance’ test. Here, the Court declared unequivocally (and most probably correctly) that the characteristic performance is the  transfer of the share premium. The habitual residence of the party required to carry out that performance is the relevant connecting factor. In casu therefore, Chinese law in principle is the applicable law.

However the Dutch court finally settles for Dutch law after all, employing Article 4(3)’s escape clause. It holds that all circumstances of the case indicate that Dutch law is more closely connected: at 2.15: the agreement originated in The Netherlands; the performance has to be carried in The Netherlands (transfer of the sums into a Dutch bank account), and the transfer of the premium will benefit a Dutch company. Although the judgment does not give much detail on the contract, its origins etc., it would seem that in finally opting for Dutch law, the court does make proper application of the rather strict conditions of Article 4(3).

A good illustration of Article 4’s waterfall /cascade.

Geert.

(Handbook of) European private international law, 2nd ed. 2016, Chapter 3, Heading 3.2.6.

 

 

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Cybercrime and jurisdiction. The CJEU in Concurrences /Samsung /Amazon.

In the flurry of judgments issued by the European Court of Justice on Super Wednesday, 21 December, spare a read for C-618/15 Concurrence /Samsumg /Amazon: Cybercrime, which dealt with jurisdiction for tort under the Brussels I Recast Regulation and the location of locus damni in the event of online sales. The foreign suffix of the website was deemed irrelevant.

To fully appreciate the facts of the case and the Court’s reasoning, undoubtedly it would be best to read Wathelet AG’s Opinion alongside the Court’s judgment.

Concurrence is active in the retail of consumer electronics, trading through a shop located in Paris (France) and on its online sales website ‘concurrence.fr’. It concluded with Samsung a selective distribution agreement (covering France) for high-end Samsung products, namely the ELITE range. That agreement included, in particular, a provision prohibiting the sale of the products in question on the internet. Exact parties to the dispute are Concurrence SARL, established in France, Samsung SAS, also established in France, and Amazon Services Europe Sàrl, established in Luxembourg. Amazon offered the product range on a variety of its websites,  Amazon.fr, Amazon.de, Amazon.co.uk, Amazon.es and Amazon.it.

Concurrence sue variously for a lift of the ban on internet sales (claiming the ban was illegal) and alternatively, an end to the  offering for sale of the elite products via Amazon. The French courts suggest they lack jurisdiction over the foreign Amazon websites (excluding amazon.fr) because the latter are not directed at the French public. Concurrence suggest there is such jurisdiction, for the products offered for sale on those foreign sites are dispatched not only within the website’s country of origin but also in other European countries, in particular France, in which case jurisdiction, they suggest,  legitimately lies with the French courts.

Pinckney figures repeatedly in Opinion and Judgment alike. Amazon submit that the accessibility theory for jurisdiction should not be accepted, since it encourages forum shopping, which, given the specific nature of national legal systems, might lead to ‘law shopping’ by contamination. Amazon seek support in Jaaskinen’s Opinion in Pinckney. Wathelet AG first of all notes (at 67 of his Opinion) that this argument of his colleague was not accepted by the CJEU. Moreover, he finds it exaggerated: the national court can award damages only for loss occasioned in the territory of the Member State in which it occurs: this limitation serves as an important break on plaintiffs simply suing in a State per the locus damni criterion ‘just because they can’.

The Court agrees (at 32 ff) but in a more succinct manner (one may need therefore the comfort of the Opinion for context):

  • The infringement of the prohibition on resale outside a selective distribution network is given effect by the law of the Member State of the court seised, so that a natural link exists between that jurisdiction and the dispute in the main proceedings, justifying jurisdiction for the latter.  It is on the territory of that Member State that the alleged damage occurs.
  • Indeed, in the event of infringement, by means of a website, of the conditions of a selective distribution network, the damage which the distributor may claim is the reduction in the volume of its sales resulting from the sales made in breach of the conditions of the network and the ensuing loss of profits.
  • The fact that the websites on which the offer of the products covered by the selective distribution right appears operate in Member States other than that of the court seised is irrelevant, as long as the events which occurred in those Member States resulted in or may result in the alleged damage in the jurisdiction of the court seised, which it is for the national court to ascertain.

With this judgment national courts are slowly given a complete cover of eventualities in the context of jurisdiction and the internet.

Geert.

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

 

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Place of performance of a contract: Court of Appeal in JEB v Binstock.

In JEB Recoveries v Binstock, [2016] EWCA Civ 1008, the Court of Appeal (on appeal from the High Court, 2015] EWHC 1063 (Ch)) exhaustively reviewed relevant EU precedent for the determination of the ‘place of performance’ of a contract under Article 5(1) (now 7(1)) of the Brussels I (Recast) Regulation. Kitchin LJ first of all refuses to deal with the alleged submission to jurisdiction by Mr Binstock. The argument was made that,  by making and pursuing an application for security for costs, Mr Binstock had submitted to the jurisdiction. The issue was however not raised before the High Court and therefore not sub judice at the Court of Appeal.

Mr Binstock (of casino fame) argued that the contracts at issue were not performed in England, for he himself was domiciled in Spain  and the claimant in the case at issue (for most of the relevant contracts, jurisdiction was dismissed at hand) had arguably carried out his contractual arrangements largely from Paris.

Relevant CJEU precedent was C-19/09 Wood Floor Solutions the findings of which Lord Justice Kitchin helpfully summarised as follows:

  1. ‘…First, the place of performance must be understood as the place with the closest linking factor between the contract and the court having jurisdiction and, as a general rule, this will be at the place of the main provision of the services.
  2. Secondly, the place of the main provision of the services must be deduced, so far as possible, from the provisions of the contract itself.
  3. Thirdly, if the provisions of the contract do not enable the place of the main provision of the services to be determined, either because they provide for several places where services are to be provided or because they do not expressly provide for any specific place where services are to be provided, but services have already been provided, it is appropriate, in the alternative, to take account of the place where activities in performance of the contract have for the most part been carried out, provided that the provision of services in that place is not contrary to the parties’ intentions as appears from the contract.
  4. Fourthly, if the place of the main provision of the services cannot be determined on the basis of the terms of the contract or its performance, then it must be identified by another means which respects the objectives of predictability and proximity, and this will be the place where the party providing the services is domiciled.’

Based upon the place where the services have for the most part been carried out, the Court of Appeal held that JEB has no good arguable case that the place of the main provision of Mr Wilson’s services was England.

A neat application of Article 7(1) and an improved re-phrasing of the CJEU’s own rules.

Geert.

(Handbook of) EU Private International Law, Chapter 2 Heading 2.2.11.1.,

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