Tag: Jurisdiction

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On the Beach v Ryanair. A clairvoyance stretch in assessing an Article 30 ‘related actions’ stay.

Another overdue post following up on earlier Twitter flag. In On the Beach Ltd v Ryanair UK Ltd & Anor [2022] EWHC 861 (Ch) is a competition law ‘stand-alone’ damages suit. OTB  is an online travel agent. It claims against Ryanair on the basis of abuse of dominant position. Ryanair have claimed against ia OTB in Ireland, on the basis among others of infringement of intellectual property rights. (Ryanair prefer to sell directly to consumers and  do not generally co-operate with online or other travel agents). OTB suggest the Irish claim is effectively warehoused and that an Irish court will soon hold the claim be dismissed for want of ‘prosecution’.

Nugee LJ considered in particular whether in assessing the relatedness of proceedings, the judge can indeed may have to take into account what is likely to be pleaded by way of defence in both actions (here: OTB is likely to plead competition law arguments should the case continue in Ireland). He held [52] he can:

the better view is that where an application for a stay is made at a stage when the defence to an action has not yet been pleaded, the Court can have regard to the substance of a defence that it can confidently predict is likely to be pleaded.

However [53] ff on the facts he then sided with OTB which argued

that the Court can hardly proceed on the basis that OTB is likely to plead any particular matter by way of defence in the Irish OTB proceedings as if its motion to dismiss the action for want of prosecution succeeds, there never will be a defence. At that point any chance of the two actions being related will disappear.

This is where the reasoning becomes contradictory. The judge [54] concedes that he ‘was not asked by either party to form any view of the likely outcome of OTB’s motion to dismiss, and I would in any event be very reluctant to do so as this is self-evidently a matter for the Irish court’ . However [55] he says that

if one looks at the Irish proceedings as they stand, with no competition issues yet raised, there does not seem to me much overlap between the claims there made and Ryanair’s prospective defence in England which will be focused very largely on competition issues.

This I believe amounts to a form of judicial and litigation clairvoyance which goes too far, even in the wide remit which Article 30 gives to the judge assessing relatedness and the appropriateness of an Article 30 stay.

[57] ff Nuggee LJ holds obiter that had the cases been related, he would have exercised his discretion not to stay.

Geert.

EU Private International Law, 3rd ed. 2021, 2.521 ff.

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The Belgian DPA yet again on processing of activities and Article 3(1) v 3(2) GDPR. Google appeals a prime example of circular reasoning.

The Belgian Data Protection Controller (DPA)’s decision of March 2022 (thank you Peter Craddock for alerting me to it at the time) has been travelling with me since it was issued mid March 2022: a late posting, I realise. There is however follow-up because Google have appealed.

The case concerns a classic ‘right to be forgotten’ aka delisting request, which Google refused, made by a practising solicitor with a criminal conviction and disciplinary measures taken against him. Google was rebuked, but not fined, for not dealing with the request promptly. However in substance the DPA agreed with Google’s refusal to delist, citing the link of the convictions to the applicant’s current profession, the recent nature of the conviction, and the severity of the facts.

This post however wants to signal the issue for which Google have appealed: the territorial reach of the GDPR under Article 3(1) v 3(2) GDPR,  as also explained in the European Data Protection Board (EDPA) December 2019 guidelines on the territorial scope of the GDPR (and something which the Belgian Court of Appeal has grappled with before, albeit not in the 3(1) v 3(2) setting).

Article 3(1) of the GDPR applies to “the processing of personal data in the context of the activities of an establishment of a controller or processor in the Union, regardless of whether processing takes place in the Union or not“. Article 3(2) applies the GDPR to “the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to (a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union, or (b) the monitoring of their behaviour as far as their behaviour takes place within the Union“.

Google Ireland was fast out off the picture by consent among the parties and the DPA [39-40]: it had no role at all in any of the processing. Google LL.C. admitted [44] that Article 3(1) applies to it, while Google Belgium [53] posits that as a mere internal consultancy /lobbying outfit for the Google group, it, too, has no role in the processing of the data.

Citing earlier decisions and CJEU Google Spain, the DPA nevertheless takes a broad view of ‘data processing’, arguing [64] that Google Spain identifies an ‘inextricable link’ between the various units of a group as sufficient to trigger DPA jurisdiction, even if one of these units has no role in the data processing.  While this reasoning ([68] and [71] in particular) suggests the wide notion of inextricable link triggers Article 3(1), in subsequent paras ([69] in particular) suggest the opposite causality: suggesting that because Article 3(1) applies, the activities are inextricably linked. Clearly, as Peter Craddock had pointed out before (I read it at the time but cannot find the source anymore I fear) that is a case of circular reasoning.

For Google, application of the GDPR to the US based entity as opposed to the EU based ones clearly is of significant difference. Its appeal with the Court of Appeal will be heard in the autumn.

Geert.

EU private international law, 3rd. ed. 2021, 2.256 ff.

 

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The CJEU in Allianz. Among others linguistic arguments lead to the Court confirming Brussels Ia identifies territorial jurisdiction in direct action against an insurer.

In Case C-652/20 HW, ZF, MZ v Allianz Elementar Versicherungs AG, the CJEU held (no English version of the judgment is as yet available) end of June that A11(1)(b) Brussels Ia, determines jurisdiction not just of ‘the’ courts in a Member State (leaving territorial jurisdiction to be determined by national civil procedure rules) but rather of a specific court within that Member State. The judgment is a bit longer than might have been expected: that is because the referring judge did not qualify one or two elements which, particularly in an insurance context, can be quite convoluted. (Such as the nature and deliniation of ‘beneficiaries’, ‘insureds’, ‘victims’).

In accordance with the Article, ‘An insurer domiciled in a Member State may be sued: …(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the claimant is domiciled’.

[35] The Court observes that in the Romanian (the language of the case) as well as the English and Finnish version of Brussels Ia use the plural ‘courts’ while in the other language versions, the singular is used. (Regular readers of the blog may be familiar with my earlier work on languages and interpretation). Coupled with the indications of territorial jurisdiction in the relevant section of the Report Jenard, and with the similar language in A7(1) and (2) and relevant case-law there (ex multi: Kareda, Volvo), the CJEU concludes that where A11(1)(b) and all its conditions apply, the Article identifies both national and territorial jurisdiction indeed.

Geert.

 

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Municipio de Mariana v BHP. Questions on Brussels Ia’s lis pendens rules viz third states remain. Yet overall approach to environment, human rights suits against corporations in their domicile, to be applauded.

Update 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

Municipio De Mariana & Ors v BHP Group (UK) Ltd & Anor [2022] EWCA Civ 951 (background to the case here) is the appeal against the stay (and partial strike-out), on forum non conveniens, A33-34 Brussels Ia and case-management grounds ordered by Justice Turner. The Court of Appeal has overturned all three reasons for a stay. Bar appeal with the Supreme Court (which the defendants are likely to seek) the claimants may now bring their claim in the courts of England and Wales.

For the benefit of full disclosure I should add I am instructed for claimants in the case; this post however does not speak for claimants or co-counsel in the case and is merely my academic view on the judgment.

The judgment runs to 107 pages (not excessive given the issues and facts covered). There is little point in me rehashing it all (again, reference to my previous post may be useful). 40 pages are spent describing the applicable law in Brasil and the various proceedings underway there. This is of particular importance seeing as the crux of all three defences advanced is that the proceedings are already underway in Brasil and should not be duplicated by an English procedure.

In the main:

Abuse is dealt with [170] ff, with the key points for reversal listed [179] and the CA’s own analysis detailed thereafter, summarising in [234] ff.

Of particular note here is the rebuke of Justice Turner’s finding of ‘unmanageability’ of proceedings (which the CA as such does not believe will be the case) having dominated his subsequent findings on other elements of abuse, and the use of forum non conveniens criteria for the assessment of abuse.

[182] Consideration should have been made of the question of the availability of full redress in Brazil. To those following business and human rights litigation, this will be a welcome finding. [186] Support for manageability of proceedings not having a place in the abuse assessment (other than [187] if the claimant were to have vexatiously made the proceedings unmanageable himself), was found in Mastercard v Merricks [2020] UKSC 5.

[190] discussion of what Turner J at the abuse level,  saw as complications arising out of the existence of parallel proceedings in Brazil, already indicate the direction the Court took on the forum non and A34 issue: the many differences between the English and the Brazilian proceedings.

The Article 34 Brussels Ia application is discussed [237] ff and is of particular relevance to readers of the blog.

Firstly [256] the Court of Appeal settles for now the Privatbank /Euroeco discussion on ‘expediency’ (see also ia SCOR v Barclays) in favour of the former: What is required to fulfil A34(1)(a)’s condition is that it must be desirable for the two actions to be heard and determined together in order to avoid the risk of irreconcilable judgments, irrespective of whether that is a practical possibility. (Claimants have reserved the right to contest this should the matter go before the Supreme Court).

Further [257] the test of relatedness for the purposes of A34 is held by the CA to be a broad test: [243] per Tesauro AG in C-406/92 The Tatry, whenever the judge seized of the stay request considers that the reasoning adopted by the court hearing the earlier proceedings may concern issues likely to be relevant to its own decision, the cases can be said to be related. This is opposed to the narrow approach in the House of Lords Sarrio SA v Kuwait Investment Office [1991] AC 32: there the HoL held that for there to be a risk of irreconcilable judgments the inquiry is limited to “primary” issues which are those necessary to establish the cause of action, and does not include issues which the court might or might not decide and which would not be essential to its conclusion.

On the condition ‘that the court of the third State will give a judgment capable of recognition‘, at the hearing the question was asked whether a twofold condition exists, namely (i) that a judgment was expected as a matter of fact and (ii) that the expected judgment was one which was capable of recognition and, where applicable, enforcement. The Court [260] supports the view that only the second (ii) condition applies. I do not think that is correct and I am not convinced by the Court’s travaux analysis on this point [266] – I detail this in my forthcoming paper in the JPIL. As for that second condition, the CA holds [269] that ‘the exercise at this stage is a conceptual one, looking at the type of judgment to which the third state pending action may give rise, and evaluating whether it attracts recognition, or where applicable enforceability.’

‘Necessity for the proper administration of justice’ is dealt with [273] ff (although it confusingly includes discussion of more than just this ultimate A33-34 condition), starting with the discussion whether a stay was available or could be justified on a “consolidation” basis (effectively, an allocation of jurisdiction [275], or on a “wait and see” basis [temporary case-management: wait and see whether and to what extent the outcome of the case ex-EU affects the action in the member state]. [277] Underhill LJ takes a holistic approach: Does waiting for the outcome [of the Brazilian proceedings held to be related] give rise to advantages which sufficiently outweigh any disadvantages such that a stay is necessary? [279] The CA takes a broad approach to the issues that might be considered, including issues classic to a forum non conveniens analysis. I believe that is right, with the important caveat that A34 must not effectively be conflated with forum non (which is what the first instance judge had effectively done) (compare Ness).

[282] the Court takes a formalistic (and correct) view on the ‘related proceedings’ and their being ‘pending’:

for the purposes of the article 34 application, the nature and extent of overlap which falls to be considered when addressing whether and to what extent there is a risk of irreconcilable judgments, and in considering whether that risk weighs in favour of a stay being necessary for the proper administration of justice, is limited by reference to that which might be decided in the [pending Brazilian proceedings].

In particular, an advantage eg in winding-up proceedings viz the defendants or related undertakings, which could be obtained down the line from the outcome of the related proceedings, would not be caught by the comparative overlap and the likelihood of relatedness therefore is seriously reduced ([283] contrary to Turner J’s finding that that the list of areas in which potentially irreconcilable judgments are liable to arise was “almost endless”).

[291] ff the CA makes its own assessment of the ‘proper administration of justice’ requirement given the judge’s core mistakes (particularly, his abuse conflation and the consideration given to future proceedings which are not pending).

[298] The CA holds that the continuation of the claim against BHP Australia (for which later in the judgment it finds that this is not barred on forum non grounds) in and of itself argues against an A34 stay (and that relevant parts of Lord Briggs’ speech in Vedanta do not change that).

Obiter [300] ff it lists other factors against a stay: [302] there is a real possibility that final resolution of the related BRA proceedings,  if they resume at all, is well over a decade away; [303] ‘For there to be a further delay of years, and quite possibly over a decade, before [E&W proceedings] could resume would cause very substantial prejudice to the claimants in obtaining relief, and would be inimical to the efficient administration of justice as a result of all the well-known problems which delay brings to the process’; [304] ff there are many disadvantages to the BRA proceedings including that these will not address the liability of the defendants in the E&W proceedings; [308] the degree of overlap between the proceedings is limited.

The forum non application is highly relevant given the English courts’ preponderant reliance on it, outside the BIa context, following UKSC Brownlie. Of note here is ia [345] the unrealistic prospect of the alternatives being suggested – I will leave the further forum non analysis to blogs less focused on European conflict of laws.

Rejection of a case-management stay is done succinctly, with Underhill LJ noting ia [374] that such stay would be incompatible with A34 and A4 BIa.

All in all I do not agree with each of the Court’s findings on tenets of A34, however in general the Court’s application reflects the correct approach to the Article, which very much makes a stay the exception.

Geert.

See also Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules

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Barings et al succeed in first instance winding up order against Galapagos on shaky COMI and Withdrawal Agreement grounds.

I discuss the background to Barings (UK) Ltd & Ors v Galapagos SA [2022] EWHC 1633 (Ch) here. At the end of August 2019 an opening of insolvency proceedings was requested by various Barings companies and Goldman Sachs, in respect of the Respondent, Galapagos S.A. – GSA.

While this request was pending before the English courts, a group of high yield noteholders (including Signal, the main opponent in the English proceedings) procured the replacement of GSA’s English directors with a German director, and the new German director and two creditors brought separate ex parte applications before the Düsseldorf Amtsgericht (District Court) for the opening of insolvency proceedings there. Following the opening of insolvency proceedings by the Düsseldorf court, the English proceedings were stayed. The German proceedings then led to a preliminary reference to the CJEU which resulted in a judgment on 24 March 2022, the judgment I discuss in my previous post.

[12] ff Bacon J summarises the procedural tussle (including the, I believe unreported August 2019 Norris J stay: [2019] EWHC 2355 (Ch)). Justice Norris had stayed the English proceedings believing inter alia that the German courts might dismiss the German proceedings once they had been properly told of the English action.

The dictum in C-723/20 was

Article 3(1) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings must be interpreted as meaning that the court of a Member State with which a request to open main insolvency proceedings has been lodged retains exclusive jurisdiction to open such proceedings where the centre of the debtor’s main interests is moved to another Member State after that request has been lodged, but before that court has delivered a decision on it. Consequently, in so far as that regulation is still applicable to that request, the court of another Member State with which another request is lodged subsequently for the same purpose cannot, in principle, declare that it has jurisdiction to open main insolvency proceedings until the first court has delivered its decision and declined jurisdiction.

 

The reference to ‘in so far as that regulation is still applicable’ refers to the Brexit element to the case which surprisingly perhaps was not included in the dictum: COMI presumptions ordinarily serve to protect the first court seized’ privilege to find, or reject, COMI in its jurisdiction however that privilege no longer applies vis-a-vis UK courts post Brexit.

As I note in my earlier review, the CJEU wrongly decided not to answer the German court’s question

Is Article 3(1) of [Regulation 2015/848] to be interpreted as meaning that:

(a)      the courts of the Member State within the territory of which the centre of the debtor’s main interests is situated at the time when the debtor lodges the request to have insolvency proceedings opened retain international jurisdiction to open those proceedings if the debtor moves the centre of its main interests to the territory of another Member State after lodging the request but before the decision opening insolvency proceedings is delivered, and

(b)      such continuing international jurisdiction of the courts of one Member State excludes the jurisdiction of the courts of another Member State in respect of further requests to have the main insolvency proceedings opened received by a court of that other Member State after the debtor has moved its centre of main interests to that other Member State?’

Neither, possibly because the question was not so asked by the referring court, does it entertain the issue of ‘permanency’ required to move COMI to another state (see my previous post for detail).

Applicants in the current case and Bidco say that the effect of the GalapagosCJEU judgment is that GSA’s winding up can and should now proceed in E&W. Signal, however, contends that the English insolvency proceedings should remain stayed or should be dismissed.

Of relevance in that assessment is Article 67(3) (c) withdrawal agreement, which reads

In the United Kingdom, as well as in the Member States in situations involving the United Kingdom, the following provisions shall apply as follows:…

Regulation (EU) 2015/848 of the European Parliament and of the Council shall apply to insolvency proceedings, and actions referred to in Article 6(1) of that Regulation, provided that the main proceedings were opened before the end of the transition period;

The question in my view is not ‘are the German insolvency proceedings to be regarded as the “main proceedings” within the meaning of Article 3 of the Recast EIR?’ which is the course which the judge seems to follow. Rather, whether either the German or the English insolvency proceedings were to be regarded as main proceedings.

In either case, in my view, main proceedings have been opened and the EU EIR continues to apply as acquired EU law.

[21] Signal’s position is that unless and until the German courts have given effect to CJEU Galapagos by setting aside or otherwise the Düsseldorf insolvency proceedings, the German insolvency proceedings remain the “main proceedings” for the purposes of the Recast EIR. Accordingly, under A67(3) WA the Recast EIR remains applicable and the German proceedings have to be recognised by the English court, precluding the making of a winding up order. If that is wrong, and the Recast EIR does not apply, Signal argue that GSA’s COMI is not in England, such that the UK IR (the retained Insolvency Regulation) does not apply, leaving s. 221 of the relevant UK law as the only jurisdictional basis for a winding up order. In addition, whether under the UK IR or s. 221, Signal contends that the circumstances are such that the court should not exercise its discretion to make the order.

The rather important questions are therefore summarised by Bacon J [23] as

i) The first issue is whether the Recast EIR remains applicable to these proceedings, as Signal contends. That in turn depends on whether the German proceedings are to be characterised as “main proceedings” for the purposes of Article 67(3)(c) of the Withdrawal Agreement. – as I note above, that issue is wrongly formulated.

ii) If the German proceedings are not “main proceedings”, such that the Recast EIR no longer governs the question of jurisdiction of the UK courts in the present case, the next question is whether there is jurisdiction to make a winding up order under the UK IR on the basis that GSA’s COMI is in England. – again see my own caveat above.

iii) The final issue is whether the court should exercise its discretion to make a winding up order under either the UK IR if that is applicable, or alternatively under s. 221 of the Insolvency Act 1986.

[48] the judge has the interim conclusion that up to and until 31 December 2020, the combined effect of the pending application before the High Court and the Recast EIR was to prohibit the German courts from declaring jurisdiction to open main insolvency proceedings. After that date, however, they could quite validly do so, if GSA’s COMI was by then situated in German territory.

I am not convinced that a mere request for opening of proceedings equates opening of these proceedings, and I am not convinced that the fall-back finding of COMI in England [83] ff, applying the Swissport ([2020] EWHC 3556 (Ch), unreported) summary of criteria, is solid: it is exactly on this point that the CJEU’s silence on the issue of ‘permanency’ is frustrating.

The judge concludes that a winding up order in respect of GSA be made however I think her analysis is incorrect and I assume permission to appeal must have been sought.

Geert.

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FDI v Barclays and others. A case-management stay on clarification grounds and the prospect of an Article 33-34 challenge given earlier US proceedings?

I am in tidying up mode clearly for my goodness I have way too many windows open on various browsers. And as always: Bloggo, ergo sum. (Or at the least: when I blog and /or Tweet the cases seem more firmly lodged in my memory). In FDI v Barclays & Ors [2022] EWHC 391 (Ch) defendants applied successfully for a case management stay to allow for clarification of the position in parallel US multi-district litigation (‘MDL’) proceedings (started earlier) involving the LIBOR fixing rate scandal. The confusion seems to be about what US  jurisdictional decisions in those proceedings mean against at least some of the defendants in the UK proceedings.

The UK proceedings were started pre-Brexit. One assumes therefore that the decision takes full advantage of the wedge that exists between a procedural, case management stay and a full-blown jurisdictional decision. The latter surely needs to be discussed under Brussels Ia, including its Articles 33-34 forum non-type mechanism, lest  one were to argue res judicata which, if the US Proceedings have not moved beyond jurisdictional decisions, is unlikely.

The judgment also indicates that a further CMC – Case Management Conference will be held in October. One looks forward to further development there.

Geert.

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Suez Water NY v Dupont, Chemours: PFAS /PFOAs forever chemicals jurisdiction, a good primer on general, specific jurisdiction in the States.

I tweeted on the case at the time I think and now bumped into it as per ‘too many open browser windows -syndrom’ ;-): Liman J’s January’s judgment in Suez Water New York v Dupont, Chemours et al serves as a good primer (Legally Blonde a strong second) to explain general (where the defendant is ‘at home’) and specific (based on the defendant’s contacts with the State) personal (as opposed to subject-matter) jurisdiction.

In the US (with slight variations in federal and State approaches), general personal jurisdiction over the defendant arises either because of its continuous and systematic business affiliations with the state (indisputably established in case of domicile in the State) or, in the case of foreign corporations (incl in the business and human rights context) where its activities make it ‘essentially at home’ in the State (Daimler v Bauman). Specific personal jurisdiction, aka ‘long arm’ jurisdiction, exercised against those ‘not at home’ in the State, requires contact with the State, typically through the (attempted) sale or supply of goods or services, the commitment of a wrongful act (tort) or Moçambique-type matters such as transactions involving real estate in the State.

In the case at issue, the judge concludes that claimant, who is seeking to recover the water remediation costs of PFAS, ‘forever chemicals’ pollution,  has made the requisite prima facie showing of personal jurisdiction over the original manufacturers (ia of ‘Teflon’ non-sticky pans) albeit just barely, accepting a prima facie link between those defendants’ marketing activities  in New York and the contamination. However the judge does not prima facie accept jurisdiction over the successor corporations, holding that under New York law, successor jurisdiction is appropriate only where a predecessor and successor remain one and the same after some corporate-restructuring event. If this trend continues, it would be a vindication for escaping environmental liabilities by the use of special purpose vehicles, including corporate restructuring.

The case in the end faltered on the basis of vagueness in the claim however I understand this can be remedied (and may have been done so on the meantime). Other courts will have different approaches and unfortunately the length of the judgment (which also discusses eg public nuisance claims) illustrates  the industry will battle liability to the end. Another sad, sad case-study for the late lessons from early warnings collection.

Geert.

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Bourlakova v Bourlakov. An ‘everything including the kitchen sink’ jurisdictional challenge, with the Article 34 forum non light issues held obiter.

Update 17 01 2023 my article on Articles 33-34 has now been published: Lis Pendens and third states: the origin, DNA and early case-law on Articles 33 and 34 of the Brussels Ia Regulation and its “forum non conveniens-light” rules, The link in the title should give free access to the first 50 takers, and I assume link to the review for those that come after.

‘Soonish’ was pretty accurate – I have been busy teaching LAW5478 at Monash. In Bourlakova v Bourlakov [2022] EWHC 1269 (Ch),  Trower J held ia against a stay of English proceedings on Article 34 Brussels Ia grounds. My paper on Article 33-34 is in the editorial stages at the Journal of Private International Law and the case will be included in its overview of the case-law so far. That case-law is predominantly English, perhaps a reflection of how (wrongly) English courts are convinced into thinking the Article 33-34 defence is another form of a forum non convenience objection to jurisdiction.

As in many of the cases (including Municipio de Mariana in which a Court of Appeal judgment ought to be delivered around June /July), the judge has to consider a mixed forum non conveniens (for the non-EU based defendants) and Article 33-34 (for the EU domicileds) defence. On top of that, there are applications for a  case-management  stay, and objections to valid service in Latvia. In other words, the classic ‘everything including the kitchen sink’ jurisdictional defence, leading to a judgment of over 400 paras long!

Jurisdiction in the case as far as Brussels Ia i concerned, is a combination of Article 4 and 8(1) – the Lugano Convention also has a calling.

Claimants are Mrs Loudmila Bourlakova and two companies of which she is the ultimate beneficiary, one of which (Hermitage One Limited (“H1”)) is incorporated in the Isle of Man and the second of which (Greenbay Invest Holdings Limited (“Greenbay”)) is incorporated in the Seychelles.  First defendant is Oleg Bourlakov, who died on 21 June 2021, which was after the commencement of these proceedings but before the applications to challenge jurisdiction had been made. The major part of his and his family’s wealth derived from the acquisition and subsequent sale of Novoroscement OJSC, a major Russian cement producer, which was sold for US$1.45 billion in 2007. Both Bourlakovi are or were Ukrainian, Russian and Canadian nationals. At the material time they were both domiciled in Monaco, although during the course of their marriage they had lived in a number of other jurisdictions including Canada.

Claimants allege that, since late 2017, there had been an irretrievable breakdown in marital relations. Divorce proceedings were initiated by Mrs Bourlakova in Monaco in 2018. It was common ground in the Monaco divorce proceedings that the law governing the matrimonial property regime is Ukrainian law and the Ukrainian concept of community property applied to the marriage. The Monegasque courts remained seised of the divorce proceedings at the time of Mr Bourlakov’s death.

Second to fourth defendants were all involved in the provision of fiduciary corporate services and advice to Mr Bourlakov, together with companies and foundations owned or controlled by him. Domicile for these is England, Cyprus or Switzerland. Fifth defendant, domiciled in Israel, somehow got caught up in the proceedings through a family trust, and is pursuing alternative litigation in England. Sixth defendant is a German qualified lawyer domiciled in Latvia, other defendants (family members ) are domiciled at Estonia or (companies) Panama.

The essence of the allegations is that Mr Bourlakov and his advisers conspired to reduce the share of the ex-wife in the matrimonial estate.  Mr Bourlakov and Mrs Bourlakova have never lived in England and the alleged partnership at the heart of the dispute is unrelated to England, did not operate here and is not governed by English law. None of the underlying assets which the claimants believe form part of Mr Bourlakov’s estate are located in England (or even held through English companies). Neither though, does Monaco (the alternative forum suggested in the jurisdictional objection) feature in the factual matrix.  One of the defendants is domiciled in England and one or two relevant meetings were held in England.

Divorce proceedings were commenced in Monaco and Mr Bourlakov and his advisers filed criminal proceedings there against Mrs Bourlakova on the basis of alleged breach of trust, concealment and money-laundering.  As is often the case in continental European proceedings, a civil claim there was lodged with an investigating judge, which will eventually lead to a court required to rule on the civil claim as well as the criminal one. Mr Bourlakov’s compaint has led to nought however Mrs Bourlakova’s counterclaim is still pending there in some, disputed form, as are Mr Bourlakov’s estate proceedings.

There is an extraordinarily complex web of issues to be held under English and EU jurisdictional rules but I shall limit this post to the Article 34 stay application – which was held obiter.

The judge [292] firstly notes, as noted obiter (for the A34 defence was raised too late), with reference ia to CJEU Aertssen,  that the defendants had not properly established that the Monaco criminal proceedings, viewed from the pont of Monegasque criminal procedure, were an “action pending before the court of a third state” for the purposes of A34 at the time the current proceedings were commenced.

[294] ff also discuss, equally obiter, whether any related third state action must fall within the scope of BIa for A34 to apply at all. [298] ff in that respect refer to two cases in which it was accepted that the court must be satisfied that the proceedings pending in the foreign jurisdiction, as well as the English proceedings, fall within the scope of BIa. However, in neither [BB Energy (Gulf) DMCC v Al Amoudi, WWRT Ltd v Tyshchenko, both engaged with the insolvency exclusion of BIa] was there a judicial decision on the point.

[312] Trower J also notes that A34 ‘accepts more risk of an irreconcilable judgment than article 30’, despite the reference in the recitals to flexibility. ‘Related’ actions are also discussed with reference to Viegas, and the judge [330] ff suggests he would not have ordered a stay on five further grounds, some of them related it seems to the ‘sound administration of justice’ requirement (and cited, too, for the refusal of a case management stay).

A complex web of findings and claims, with the A34 discussion showing that much is still outstanding on its application. I do not yet know whether permission to appeal has been sought and if so, on what grounds.

Geert.

European Private International, 3rd ed. 2021, Heading 2.2.15.3.2, para 2.539 ff

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Guistra v Twitter. The BC Supreme Court on suing Twitter for libel in Canada, and rejecting forum non with enforcement elephants in the room.

A post I started writing on 14 December 2021 so it’s about time I’ld finish it. In  Guistra v Twitter 2021 BCCA 466 (the case echoes Haaretz in Ontario) the Supreme Court of British Columbia with  Grauer J delivering the unanimous opinion, upheld jurisdiction for the BC courts on the basis of the claim pointing to a tort having been committed in BC, BC therefore being locus delicti commissi. The Court held that damage in the jurisdiction, locus damni, needs then not separately be argued.

Mr. Giustra, a British Columbia resident, alleges that Twitter published tweets that defamed him in British Columbia, as well as elsewhere.  Twitter asserts nota bene that, in law, it cannot properly be considered a “publisher” of tweets that were authored and posted on its platform by its users. That issue is deferred for the merits of the claim: at the jurisdiction level, the pleading is what is important: compare with the situation under Brussels Ia.

A forum non conveniens challenge in favour of the courts at California was rejected, where reference was made ia to Google v Equustek. There is an elephant in the room here, so identified, namely that a claim in California is doomed to fail on free speech grounds, and that an eventual Canadian judgment is doomed to be unenforceable at least in the US.

A good judgment for comparative purposes.

Geert.

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Kumlin v Jonsonn. Judge dismisses jurisdiction for most of Swedish businessman’s libel claim, defusing what is said to be a SLAPP suit.

Kumlin & Anor v Jonsson & Ors [2022] EWHC 1095 (QB) disciplines forum shopping, in this case libel tourism, in a claim that is considered a SLAPP: a Strategic Lawsuit against public participation.

First Claimant is an entrepreneur, businessman and investor in sustainable and ethical business ventures, resident in Monaco, with business interests in the UK including in the Second Claimant, of which he is the founder, Chairman and Chief Executive Officer. He is a Swedish citizen. Second Claimant is a public limited company registered in England and Wales. Claimants’ case is that between 29 September 2020 and 2 November 2020 the Defendants, or some of them, all of whom are Swedish, published or caused to be published on the Website eight articles concerning the Claimants. There was further publication via Facebook, Twitter, etc, where links to the Articles were posted. 

The Articles are in Swedish. Knowles J [30] advances the reasoning, proposed by defendants, that jurisdiction under any of the gateways as a result of A4 BIa, locus damni or locus delicti commissi (A7(2) BIa per CJEU Bier and Shevill), or centre of interests (A7(2) BIa, per CJEU eDate and Bolagsupplysningen) only exist to the degree the case is actually actionable in those cases which, he submits, requires reference to the domestic laws of those Member States (e.g. a minimum ‘publication’ threshold). I believe this is incorrect: jurisdiction and actionability are not the same. While lex fori on threshold issues will have an immediate impact on the practical reality of a claim, it does not stand in the way of principled jurisdiction under BIa, which exists without reference to national laws.

The judge refers to much CJEU and E&W authority, all of it discussed on this blog, most recently the Court of Appeal in Mincione.

Knowles J’s discussion eg [69] ff of the intensity of publication etc required, under residual double actionability rules, in my view is a threshold question and not, as it is presented, a jurisdictional, gateway question, albeit the analysis in this section is mixed with justifiable discussion of direct v indirect damage under the CJEU Marinari rule. The judgment is much more extensive on this point than it could have been in my opinion.

[224] it is concluded that on the centre of interest issue, which is relevant for the natural person claimant only, his centre of interests is Monaco, where he is habitually resident. That is a factual assessment which is unlikely to be material for an appeal.

Geert.

EU private international law, 3rd ed. 2021, 2.439 ff.

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