Tag: Jurisdiction

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The buck (or copper tube) does not stop here. Forum shopping and European Competition Law in  KME Yorkshire v Toshiba Carrier.

A neat reminder of the relevance of follow-up litigation and anchor defendants in the EU competition law sector. In [2012] EWCA Civ 1190 KME Yorkshire et al v Toshiba Carrier UK at al [2012] EWCA Civ 1190 the Court of Appeal has confirmed that a connected undertaking that had implemented, but not been party to, an anti-competitive agreement, can nevertheless be in breach of Article 101 TFEU (the foundation Article for EU competition law) and therefore ground jurisdiction against all other defendants who had been originally named in the Commission decision fining the companies concerned.

Toshiba et al had been buying large quantities of copper tubes from the group of companies which had been fined earlier by the European Commission (for follow-up litigation at the ECJ see here).

Article 6 of the Jurisdiction Regulation on multipartite litigation and consolidated claims, includes four cases which grant jurisdiction to a court which does not originally have it against some of the defendants and which are effectively joined to its jurisdiction against another. Are all inserted because of procedural expediency and because of the need to avoid irreconcilable judgments. However they all do harbour scope for abuse hence the ECJ has interpreted each of them fairly strictly.

Procedural efficiency and forum shopping often tempts plaintiffs into identifying an ‘anchor defendant’ in one jurisdiction, subsequently to employ Article 6 (or similar provisions in national law for subjects outside of the JR) to engage other parties in the same jurisdiction. The KME decision at the Court of Appeal confirms the kosherness of forum shopping and anchor defendants in cases such as these.

Geert.

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Football Dataco: CJEU confirms ‘intended target of information’ criterion as jurisdictional trigger in an internet context

[postscript 5 February 2014: L’Oreal and e-bay settled their dispute (referred to below) out off court in January 2014. Settlement is undisclosed.]

Mere accessibility of data does not suffice to grant jurisdiction under the Database Directive. In Football Dataco, the  CJEU has confirmed the ‘intended target of information’ criterion as a jurisdictional trigger in an internet context.

The Football Dataco judgment has its most immediate impact in the Intellectual property area, however the judgment has generally confirmed the ‘intended target’ criterion as a trigger for jurisdiction in an internet context.

In the trademark sector, the L’Oréal /Ebay litigation led to the CJEU instructing that where goods located in a third State, which bear a trade mark registered in an EU Member State or a Community trade mark and have not previously been put on the market in the EEA or, in the case of a Community trade mark, in the EU, (i) are sold by an economic operator on an online marketplace without the consent of the trade mark proprietor to a consumer located in the territory covered by the trade mark or (ii) are offered for sale or advertised on such a marketplace targeted at consumers located in that territory, the trade mark proprietor may prevent that sale, offer for sale or advertising by virtue of the rules set out in relevant EU legislation. It is the task of the national courts to assess on a case-by-case basis whether relevant factors exist, on the basis of which it may be concluded that an offer for sale or an advertisement displayed on an online marketplace accessible from the territory covered by the trade mark is ‘targeted at’ consumers in that territory: When the offer for sale is accompanied by details of the geographic areas to which the seller is willing to dispatch the product, that type of detail is of particular importance in the said assessment:

The CJEU itself noted in para 64 of its L’Oréal judgment the analogy with the Pammer and Alpenhof litigation [the main judgment for the application of the Jurisdiction Regulation in an internet context].

‘Intended target of information’ as a criterion of applicability was now also confirmed as the criterion for application of the Database Directive, Directive 96/9 in Case C-173/11 Football Dataco (judgment of 18 October 2012): ‘Article 7 of Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases must be interpreted as meaning that the sending by one person, by means of a web server located in Member State A, of data previously uploaded by that person from a database protected by the sui generis right under that directive to the computer of another person located in Member State B, at that person’s request, for the purpose of storage in that computer’s memory and display on its screen, constitutes an act of ‘re-utilisation’ of the data by the person sending it. That act takes place, at least, in Member State B, where there is evidence from which it may be concluded that the act discloses an intention on the part of the person performing the act to target members of the public in Member State B, which is for the national court to assess.’

In other words, mere accessibility of data does not suffice to grant jurisdiction under the Database Directive.

Geert.

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On the latest round in preparing for jurisdiction review: the Parliament report of September 2012

Readers of this blog will have noticed that one is getting quite excited about the impending review of the Brussels I Regulation, the Jurisdiction Regulation. I have previously reported on the impact of some of the Council’s proposals, in light of their June general approach document. Parliament has now added the ultimate input prior to the vote in First Reading in November.

Tadeusz Zwiefka MEP, the rapporteur on the review, has issued his (draft) Report which, much like the Council in its June 2012 document, regroups Parliament’s suggestions for amendment. Mr Zwiefka’s text largely speaks for itself and I shall not repeat it all here. It is clear that alignment between Parliament and Council is near complete, not all of it, I believe, very wisely so (in particular, on the arbitration exclusion and on the protected categories), as I have reported earlier when reviewing the Council’s general approach.

There is one advantage to having the Parliament’s text: it also includes all recitals (as opposed to the Council’s General Approach document which had some recitals included as footnotes, but not all). This clarifies at least one element, namely the application of the consumer title of the Regulation.

I had suggested earlier, that Council’s (and now also Parliament’s) insertion in Article 16(1) of a possible forum against companies not domiciled in the EU, for consumer’s contracts, does not trump the Council’s re-insertion of Article 4 (now as noted, 4(a)), hence the counterparty would still have to be domiciled in the EU, for the consumer contracts section to apply. Parliament’s recital 11(f) now suggests I was wrong:

‘However, in order to ensure the protection of consumers and employees, to safeguard the jurisdiction of the courts of the Member States in situations where they have exclusive jurisdiction and to respect party autonomy, certain rules of jurisdiction in this Regulation should apply regardless of the defendant’s domicile.’

Were this amendment to go ahead, the condition of ‘directing activities to’ the Member State’ in Article 15 JR, will gain ever more importance for the territorial scope of the Regulation.

Geert.

 

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Shell holding hauled before Dutch court for infringement of environmental law in Nigeria – All left to be decided

It has been widely reported that Shell’s top holding has been hauled before a Dutch court by a Dutch environmental NGO (Milieudefensie), seeking (with a number of Nigerian farmers) to have the mother holding being held liable for environmental pollution caused in Nigeria. Readers will be aware of Shell being in the docket once or twice these days for so-called ‘corporate social responsibility’ (CSR) issues (see here for relevant links).

The media have been somewhat wrongfooted in reporting on the issue. Establishing jurisdiction in an EU court vis-a-vis a company with seat in the EU, is not exactly rocket science. It is a simple application of the Brussels I Regulation. As readers will be aware, the Court of Justice of the EU has barred national courts from even pondering rejection of such jurisdiction (Owusu: rejection of forum non conveniens considerations).

What is interesting, is the fact that Milieudefensie and the individual applicants are also pursuing the Nigerian daughter company in The Netherlands. In an interim ruling going back to 2009, the court held that the case against the Nigerian daughter may prima facie at least be bundled with the case against the mother holding. I understand however that the bundling issue will be revisited in the proceedings which started yesterday.

Moreover, under the Rome II Regulation, the Dutch court near inevitably will have to apply the lex loci damni i.e. Nigerian law, both against mother and daughter. That not only means that (presumably stricter) EU environmental standards will be out off reach, it also leaves the question  whether under Nigerian law (indeed the same would have been the case under Dutch law), in substance the mother can actually be held liable for activities of its daughter.

Finally, were daughter Shell to be held liable, enforcement would have to be sought in Nigeria. Rejection of such enforcement by Nigerian courts is not unlikely.

One assumes that not many of the legal hesitations signaled above will be of much concern to the NGO involved: publicity for the wider CSR issue is arguably what is sought. This begs the more conceptual question whether overall sustainable development is assisted by having courts in ‘developed’ countries exercise jurisdiction and apply ‘developed’ law to cases such as these.

Geert.

ps for Dutch readers, I have an op-Ed on the case, in Dutch, here.

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Cour de Cassation rejects view of its own AG – Upholds jurisdiction over Erika disaster. Total to appeal to ECoHR.

Today the French Cour de Cassation upheld French jurisdiction over the Erika disaster, both from a criminal and a civil law point of view. It rejected the view of its Advocate General, on which I reported earlier. I have yet to read the judgment itself, however in a press release (not a standard procedure for the Court), the Court suggested it has several jurisdictional grounds to pick from, in both public international law, law of the Seas in particular, as well as international environmental law.

The court did not merely confirm the criminal convictions of Total, it also imposed civil liability which the Courts had earlier denied.

Total’s lawyers immediately announced a procedure with the European Court of Human Rights, however on what grounds is not immediately clear to me. (Postscript July 2014: I have indeed in the meantime seen no trace of such application).

Expect the judgment to become standard material in international environmental law classes. Students better dust their French.

Geert.

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Mühlleitner: To enjoy protection as ‘consumer’ contracts, contracts need not be concluded at a distance

The Court of Justice has followed the Opinion of the Advocate General (on which I reported here) in Mühlleitner: Article 15(1)(c) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as not requiring the contract between the consumer and the trader to be concluded at a distance.

Debate on the issue had been provoked by the factual circumstances of Alpenhof. The Court of Justice however stuck to both a literal (no mention of distance contracts in the relevant provision), teleological (protection of consumers) and historical (purpose of the change in the Regulation as compared with the previous text in the Convention) interpretation. The relevant Article now only requires that the trader pursue commercial or professional activities in the Member State of the consumer’s (‘consumer’ is separately defined) domicile or, by any means, directs such activities to that Member State or to several States including that Member State and, secondly, that the contract at issue falls within the scope of such activities.

In the case at issue, Ms Mühlleitner, domiciled in Austria, searched on the internet for a car of a German make which she wished to acquire for her private use. After connecting to the German search platform http://www.mobile.de, she entered the make and type of vehicle she wanted, thereby obtaining a list of vehicles corresponding to the characteristics specified. After selecting the vehicle which corresponded best to her search criteria, she was directed to an offer from the defendants, Mr A. Yusufi and Mr W. Yusufi, who operate a motor vehicle retail business via Autohaus Yusufi GbR (‘Autohaus Yusufi’), a partnership established in Hamburg (Germany).Wishing to obtain more information about the vehicle offered on the search platform, Ms Mühlleitner contacted the defendants, using the telephone number stated on the website of Autohaus Yusufi, which included an international dialling code. As the vehicle in question was no longer available, she was offered another vehicle, details of which were subsequently sent by email. Ms Mühlleitner then went to Germany and, by a contract of sale signed on 21 September 2009 in Hamburg, bought the vehicle, taking immediate delivery of it. The contract therefore was not concluded at a distance.

The judgment is a good illustration of the need to consult the EU’s preparatory works, with reference being made to input into the legislative process by Parliament, Council and Commission alike.

Geert.

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The Council on the validity of choice of court agreements

The Council in June issued its ‘General Approach‘ on the review of the Brussels I Regulation /the Jurisdiction Regulation . The General Approach is the backbone of what will be the Council Common Position, once the European Parliament has held its ‘first reading’ (which is now scheduled for November 2012, after having been postponed twice: from January 2012 it had already been moved to June). I commented here on the arbitration exception and here on the protected categories.

In its General Approach on the review of the Brussels I Regulation, the Council of the EU proposes the following with respect to choice of court agreements:

If the parties, regardless of domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State.

The Commission had proposed ‘substance’ rather than the words ‘substantive validity’. The Council also suggest inserting a recital as follows:

The question as to whether a choice of court agreement in favour of a court or the courts of a Member State is null and void as to its substantive validity should be decided in accordance with the law of that Member State. The reference to the law of the Member State of the chosen court should include the conflict of laws rules of that State.

Finally, the Council prooses to add a fifht para to Article 23 as follows:

‘5. An agreement conferring jurisdiction which forms part of a contract shall be treated as an agreement independent of the other terms of the contract.

The validity of the agreement conferring jurisdiction cannot be contested solely on the ground that the contract is not valid.’’

Both the Council and the Commission proposal address the elephant in the room: Article 23 of the Jurisdiction Regulation lists a number of requirements establishing consent to choice of court agreements, however it does not address any conditions for the validity of the underlying agreement. The majority of ECJ authority would seem to favour having the validity of the forum clause to be exclusively determined by the conditions of Article 23. I would however submit that the material validity of the forum clause under the curent version of the JR ought to be determined by the lex contractus.

The result of the discussion is unsatisfactory, as in practice it leaves it up to the Member States to decide how to address the substantive validity of choice of court agreements. This is now addressed by the Commission in its proposal for review of the JR: the proposal introduces a harmonised conflict of law rule on the substantive validity of choice of court agreements, thus ensuring a similar outcome on this matter whatever the court seized. The Council amendment aims at making the solution clearer still.

Oddly, the Council adds renvoi to the mix (see ‘The reference to the law of the Member State of the chosen court should include the conflict of laws rules of that State.’). EU private international law, for good (mostly practical) reasons typically excludes renvoi. I am not entirely sure that adding it here has any merit.

Note that in line with the Hague Convention on Choice of Court Agreements, it will no longer be necessary for at least one of the parties to be domiciled in the EU, for an agreement giving jurisdiction to a court in the EU to be covered by the JR.

Geert.

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‘Damage’, Brussels I and internet sales – Determining jurisdiction in copyright cases and material carriers in CJEU Pinckney.

In Case C-170/12 Pinckney, on 11 April 2012, the French Cour de Cassation referred the following question for preliminary review with the Court of Justice (Case C-170/12)

 Is Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters  to be interpreted as meaning that, in the event of an alleged infringement of copyright committed by means of content placed online on a website,

–           the person who considers that his rights have been infringed has the option of bringing an action to establish liability before the courts of each Member State in the territory of which content placed online is or has been accessible, in order to obtain compensation solely in respect of the damage suffered on the territory of the Member State before which the action is brought,

or

–           does that content also have to be, or to have been, directed at the public located in the territory of that Member State, or must some other clear connecting factor be present?

Is the answer to Question 1 the same if the alleged infringement of copyright results, not from the placing of dematerialised content online, but, as in the present case, from the online sale of a material carrier medium which reproduces that content?

As excellently summarised by Stephen Vousden here, the Cour de Cassation is assuming two CoJ precedents need to be distinguished from Pinckney:

Case C-324/09, L’Oréal, which concerns the territorial scope of the EU’s trademark laws and revolves around websites ‘targeting’ consumers as opposed to merely being accessible to them; and

Cases C-509/09 and C-161/10 eDate Advertising and Martinez (‘Kylie Minogue’), in which the Court added the connecting factor ‘centre of interests’ for internet infringements of personality right. As I reported here, the Court of Justice in Wintersteiger confirmed that the connecting factor ‘centre of interests’ in Kylie Minogue and eDate Advertising only holds for infringement of personality rights in an internet context. Trademark violation is distinguished, on the grounds that rebus sic stantibus intellectual property rights are protected on a territorial basis. In Pinckney, which also concerns intellectual property, the Cour de Cassation moreover points out that the offending item was in fact a material carrier: a vinyl record, illegally compiling songs.

Plenty of factual elements therefore, complicating the finding of ‘place of the harmful event’ /damage under Article 5(3) Brussels I.

Geert.

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The Council on the review of the Brussels I Regulation – Confusing proposals on the ‘protected categories’

The Council in June issued its ‘General Approach‘ on the review of the Brussels I Regulation /the Jurisdiction Regulation. The General Approach is the backbone of what will be the Council Common Position, once the European Parliament has held its ‘first reading’ (which is now scheduled for November 2012, after having been postponed twice: from January 2012 it had already been moved to June). I commented here on the arbitration exception.

The Council’s view on the extension of the ‘protected categories’ is relevant for the general issue of the ‘extraterritorial’ working of the Regulation. The protected categories are contracts where the EU gives specific protection to consumers, employees, and insureds, allowing the ‘weaker’ party additional fora to sue, and limiting forum choice for the stronger party.

The Commission proposal generally makes the protective jurisdiction rules available for consumers, employees and insured also applicable if the defendant is domiciled outside the EU.

The Council, by contrast, reinstates the domicile condition for the protective jurisdictional rules with respect to insurance, however then inserts a slightly confusing section for consumer contracts, and a rather mixed regime for employment contracts.

With respect to consumer contracts, the Council re-inserted the reference to Article 4 of the Regulation (albeit in a renumbered 4a fashion). Article 4 suggests that against defendants not domiciled in the EU, the EU Regulation (with one or two exceptions, which are not of interest here) does not apply, and national conflict rules take over. However the Council then oddly inserts in Article 16(1):

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

(the extract in bold is the Council’s addition to the Commission proposal)

One assumes that this insertion in Article 16(1) does not trump the Council’s re-insertion of Article 4 (now as noted, 4(a)), hence the counterparty would still have to be domiciled in the EU, for the consumer contracts section to apply.

As far as employment contracts are concerned, here, too, the Council refers to Article 4 (4a), in Article 18(1), however then adds in Article 19(2), that an employer not domiciled in a Member State may be sued in a court of a Member State, either in the courts for the place where or from where the employee habitually carries out his work or in the courts for the last place where he did so, or if the employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the employee is or was situated.

This raises a contradiction with respect to employers located outside the EU. Either one follows the Article 4a cue and decides they are out of reach of the JR, or one assumes the new Article 19(2) takes priority.

The latter interpretation would mean that only for employment contracts, the Council follows the Commission’s view and brings non-EU based employers within the reach of the JR. Might that be because in carrying out the contract in the EU, these issues have a stronger territorial EU link?

Geert.

note: I have in a later entry clarified that proposed recital 11f confirms that in fact the consumer title is meant to apply to companies not domiciled in the EU.

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Court Judgment in Solvay: Roche distinguished, jurisdiction for provisional measures upheld in spite of Article 22(4) JR.

Solvay, case C-616/10 [I reported on the AG’s Opinion here; readers may want to have a quick look at that post before or after reading on], was decided by the Court on Thursday, 12 July. AG and Court revisited a number of old chestnuts in the application of the Brussels I Regulation (the Jurisdiction Regulation or ‘JR’): the exclusive ground of jurisdiction with respect to intellectual property rights, of Article 22(4); multipartite litigation in Article 6 JR; and finally provisional measures, referred to in Article 31.

Solvay accuses Honeywell Flourine Products Europe BV and Honeywell Europe NV of performing the reserved actions in the whole of Europe and Honeywell Belgium NV of performing the reserved actions in Northern and Central Europe. In the course of its action for infringement, on 9 December 2009 Solvay also lodged an interim claim against the Honeywell companies, seeking provisional relief in the form of a cross-border prohibition against infringement until a decision had been made in the main proceedings.  In the interim proceedings, the Honeywell companies raised the defence of invalidity of the national parts of the patent concerned without, however, having brought or even declared their intention of bringing proceedings for the annulment of the national parts of that patent, and without contesting the competence of the Dutch court to hear both the main proceedings and the interim proceedings.

On the applicability of Artice 6 (multipartite litigation), the Court agrees with the AG that Roche still holds: the same situation of law cannot be inferred where infringement proceedings are brought before a number of courts in different Member States in respect of a European patent granted in each of those States and those actions are brought against defendants domiciled in those States in respect of acts allegedly committed in their territory. A European patent continues to be governed, per the Munich Convention, by the national law of each of the Contracting States for which it has been granted.

However in the specific circumstances of a case, Roche may be distinguished: whether there is a risk of irreconcilable judgments if those claims were determined separately, is for the national court to determine. The Court of Justice instructs the national court to take into account, inter alia, the dual fact that, first, the defendants in the main proceeding are each separately accused of committing the same infringements with respect to the same products and, secondly, such infringements were committed in the same Member States, so that they adversely affect the same national parts of the European patent at issue.

On the application of Article 22(4), the Court emphasises the very different and unconnected nature of Article 22 and Article 31. They are part of different titles of the Regulation, etc. However, on the other hand, the application of one part of the Regulation may of course have an impact on the remainder, hence one cannot simply apply different parts of the Regulation in splendid isolation.

The COJ notes that according to the referring court, the court before which the interim proceedings have been brought does not make a final decision on the validity of the patent invoked but makes an assessment as to how the court having jurisdiction under Article 22(4) of the Regulation would rule in that regard, and will refuse to adopt the provisional measure sought if it considers that there is a reasonable, non-negligible possibility that the patent invoked would be declared invalid by the competent court. Hence there is no risk of conflicting decisions: the interim proceedings have been brought will not in any way prejudice the decision to be taken on the substance by the court having jurisdiction under Article 22(4) .

‘…does not make a final decision’: this effectively means that the Court simply states that as long as the main condition of Article 31 is met [measures covered by Article 31 need to be ‘provisional’; see also Case C-261/90 Reichert], Article 22(4) does not interfere with a court’s jurisdiction under Article 31.

Geert.

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