Tilman v Unilever. A preliminary reference on flag-wrap B2B choice of court under Lugano.

A puzzling title perhaps I agree but let me explain. Thank you Matthias Storme for alerting me to the May 2021 preliminary reference by the Belgian Supreme Court, a reference now known at the CJEU as Case C-358/21 Tilman SA (of Belgium) v Unilever Supply Chain Company AG (of Switserland). Elucidation is asked of Article 23 of the Lugano 2007 Convention, the choice of court provision in the Convention.

The question referred, reads

Are the requirements under Article 23(1)(a) and (2) of [Lugano 2007], satisfied where a clause conferring jurisdiction is contained in general terms and conditions to which a contract concluded in writing refers by providing the hypertext link to a website, access to which allows those general terms and conditions to be viewed, downloaded and printed, without the party against whom that clause is enforced having been asked to accept those general terms and conditions by ticking a box on that website?

Article 23 Lugano 2007 is identical (mutatis mutandis: the only difference being that A23 Lugano refers to ‘States to the Convention’ instead of ‘Member States’) to the former Article 23 of the Brussels I Regulation, Regulation 44/2001.  A23 Lugano 2007 reads in relevant part

    1. If the parties, one or more of whom is domiciled in a State bound by this Convention, have agreed that a court or the courts of a State bound by this Convention 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. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; or (b) in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
    2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’.

The case at issue therefore does not question so-called ‘click-wrap’ consent to general terms and conditions – GTCs. These require the contracting partner to tick the relevant box which then ‘wraps up’ the agreement, including choice of court (and law). They were the subject of CJEU El Majdoub v CarsOnTheWeb. In that judgment, the CJEU held that in a B2B context, where the GTCs that have to be ticked can be saved and printed, they can be a ‘durable’ record of consent. (Not: consent itself: that is subject to a separate analysis, under the relevant lex causae, see below).

Rather, the title of this post calls the issue one of ‘flag-wrap’: one of the parties’ (Unilever’s) GTCs  are contained on a website, and their existence is ‘flagged’ in the written main contract. Does that suffice to bind the parties as to the GTC’s choice of court (in favour of the English courts; note the courts were seized pre-Brexit; the UK’s Lugano troubles are not engaged)?

The provisions on forum clauses are drafted in a way ‘not to impede commercial practice, yet at the same time to cancel out the effects of clauses in contracts which might go unread’ (Jenard Report), or otherwise ‘unnoticed’ (CJEU Colzani). The Brussels Convention and now the Regulation show great support for choice of court agreements and aim not to be as overly formalistic as the conditions imposed upon them.

Importantly, valid choice of court does require both a clearly and precisely demonstrated consent to be bound by choice of court and one or another Article 25-sanctioned form of expression of that consent. In Colzani the CJEU held [7]:

the requirements set out in Article [25] governing the validity of clauses conferring jurisdiction must be strictly construed. By making such validity subject to the existence of an ‘agreement’ between the parties, Article [25] imposed upon the court before which the matter is brought the duty of examining, first, whether the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties, which must be clearly and precisely demonstrated. The purpose of the formal requirements imposed by Article [25] is to ensure that the consensus between the parties is in fact established.

CJEU authority of Colzani and Coreck Maritime impose on the court the duty of examining ‘whether the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties’ and this had to be ‘clearly and precisely demonstrated’.

In practice, many courts conflate the check for consent with the check for expression of that consent and even the CJEU is not always clear in distinguishing it. In particular, absence of proof of any of the three possible avenues for expression of consent, included in Article 25(1) a, b or c, or then taken as an absence of consent, full stop. In Colzani, the CJEU held

[T]he mere fact that a clause conferring jurisdiction is printed among the general conditions of one of the parties on the reverse of a contract drawn up on the commercial paper of that party does not of itself satisfy the requirements of Article 17, since no guarantee is thereby given that the other party has really consented to the clause waiving the normal rules of jurisdiction. Where a clause conferring jurisdiction is included among the general conditions of sale of one of the parties, printed on the back of a contract, the requirement of a writing under the first paragraph of Article 17 of the Convention is fulfilled only if the contract signed by both parties contains an express reference to those general conditions.

The CJEU here, wrongly, seems to suggest lack of compliance with the expression of consent indicates a lack of that consent full stop.

Importantly, the CJEU in its rulings on what was then Article 23 and its Brussels Convention predecessor keeps utterly silent on national conditions relating to the actual formation or existence of consent. This, as regular readers of the blog will know, is at least for cases covered by Brussels Ia, subject to the lex fori prorogati, with renvoi, an issue which both national courts and the CJEU struggle with.

How then should the CJEU respond to the question (I asked my conflict of laws students at Leuven this question in a first exam on 18 June)?

Firstly, the Court should (and will) remind us of the Jenard /Colzani core instruction: the need to ensure consent is established, without being overly formalistic. Different from the context of the protected categories, there is no ‘weaker category’ to protect here.

Secondly,  there needs to be durability of the record of consent. That seems to be guaranteed here via the technicalities of the Unilever platform (downloadable GTCs) and in line with aforementioned CJEU Al Majdoub (the June students were not given technical details but should still flag durability).

Thirdly, despite the formal A23  requirement most probably being met, the consent requirement to me seems far from certain. In a click and wrap context ― lest there be issues of agency, duress, consumer protection laws etc. (in a context where the consumer title’s conditions are not met) which need to be held under the law applicable to consent ― the box ticking solidifies establishment of consent. In a mere flag and wrap context, that to me seems far less certain. If the reference were to a url where GTCs are properly and collectively displayed (if need be, updated with clear reference to chronology; see housekeeping), consent by an ordinary careful business (the proverbial (business)man on the Clapham omnibus). Yet if such as here, the link communicated in the formal contract refers to a platform where the  GTCs are not the first thing the contracting party sees, rather, where it is expected that that contracting party registers and /or downclicks, search and retrieve etc., that consent to me seems far less certainly established. [Again my students were not given the details on the platform which the reference includes, they did however have to signal the issue of consent).

Finally, under BIa, the lex fori prorogati, incl renvoi, would determine the above considerations of consent. Here, therefore, English law including its conflict of laws rules on choice of court. However seeing as the case is not subject to Brussels Ia, but rather to Lugano, the lex causae for consent will be an issue for the courts seized (here, the Belgian courts) to determine. Under the Belgian rules, this means application of Rome I (Rome I excludes choice of court agreements however Belgium’s private international law Act makes Rome I applicable even to carved-out contractual arrangements).

An interesting reference.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.10.

 

Skat v Solo Capital Partners. When faced with Dicey rule 3, I’ll see your tax claim and raise it to a fraud one.

I reviewed the first instance judgment in Skat v Solo Capital Partners here and concluded that it endangered the effet utile of Brussels Ia (and Lugano). Justice Baker had concluded that all SKAT’s claims were inadmissible as a consequence of Dicey Rule 3. The Court of Appeal has now largely reversed, [Skatteforvaltningen v Solo Capital Partners Llp [2022] EWCA Civ 234] thereby resurrecting a £1,4 billion claim.

SKAT (Danish customs and excise) seeks the return of amounts it says it was wrongly induced to pay out as tax refunds. SKAT is not seeking to recover due and unpaid dividend tax or indeed any tax, because the foundation of its argument is that in the case of the alleged fraud defendants there was no liability to pay tax, no shares, no dividends, no tax and no withholding tax. There was never a taxpayer/tax authority relationship between the Solo etc Applicants or the alleged fraud defendants and SKAT. The mere fact that the alleged fraud is committed in the context of taxation or against a foreign tax authority is insufficient to bring the matter within the rule [SKAT’s counsel arguments, [30]-[31]). To allow the defendants to escape their liability, not in a tax fraud but in a general conspiracy, would also run counter the fraus omnia corrumpit principle [ditto, 62], a point which Flaux C agrees with obiter [146] in a case of a major international fraud..

Flaux C is much less verbose than the submissions before him. Yet again a jurisdictional point was allowed to be litigated to great length – albeit one may appreciate counsel and clients’ energy on those issues given the value of the claim.

[127] the basis of the claim is fraudulent misrepresentation. It is not a claim to unpaid tax or a claim to recover tax at all. It is a claim to recover monies which had been abstracted from SKAT’s general funds by fraud [128]. Even though SKAT may be an emanation of the Danish state, the Dicey revenue rule does not apply [128], neither does the wider sovereign powers rule within Dicey Rule 3:

‘In bringing a claim to recover the monies of which it was defrauded, SKAT is not doing an act of a sovereign character or enforcing a sovereign right, nor is it seeking to vindicate a sovereign power. Rather it is making a claim as the victim of fraud for the restitution of monies of which it has been defrauded, in the same way as if it were a private citizen.’ [129]

This latter reasoning falls short I find of proper criteria to guide its future application, although more is said at [130]: the claim to recover the money is at the core of the Chancellor’s reasoning here and that claim is a straightforward money claim, and [133] ‘the claims are ones which could just as well be brought by a private citizen’. That is the kind of argument which echoes CJEU authority on civil and commercial and to my mind the Court of Appeal could have helped us all by pointing out more specifically to what degree Dicey Rule 3 be informed by CJEU authority on ‘civil and commercial’, regardless of Brexit.

That there would be a detailed examination of the Danish tax regime and possible criticism of it and of SKAT’s systems and control, does not somehow convert the claim into one to enforce that tax regime. Recognition of foreign revenue laws is permissible under Dicey Rule 3 [138].

The position of one of the defendants, ED&F Man, is different in the sense that there is no allegation that they were implicated in a fraud. Although it is alleged that misrepresentations were made by them, the misrepresentations are said to have been negligent.

SKAT has to accept that as against those defendants the claim is inadmissible by virtue of Dicey Rule 3 unless it can satisfy the Court: (i) that the claim is a “civil and commercial matter” not a “revenue matter” for the purposes of Article 1(1) of the Brussels Recast Regulation; and (ii) that the operation of Dicey Rule 3 is precluded because, contrary to the judge’s analysis, it would impair the effectiveness of the Brussels Recast Regulation.

Contrary to the conclusion the judge reached the Court of Appeal finds that the claim against ED&F Man is a “revenue matter” falling outside the Brussels Recast Regulation. Here the Court of Appeals applies parity of reasoning with its assessment of the other claims: [150]:

Whilst the test for the application of Dicey Rule 3 may not be identical to that for determining what is a “revenue etc matter” for Article 1(1) of the Brussels Recast Regulation, it can be seen that its application leads to the same answer. If Dicey Rule 3 applies (as SKAT has to accept it does in relation to the claim against ED&F Man) then by the same reasoning, the basis for the claim by SKAT against those defendants is either a right which arises from an exercise of public powers or a legal relationship characterised by an exercise of public powers, from which it necessarily follows that the claim is a revenue matter outside the Brussels Recast Regulation.

Unfortunately therefore the effet utile argument (that application of Dicey rule 3 impairs the effectiveness of BIa /Lugano, as I had argued in my earlier post) is not discussed [153].

The title of this piece of course hints at the relevance of claim formulation. It is also exaggerated: SKAT cannot conjure up fraud elements out of nowhere to reinvent a tax claim as one in mere tortious and fraudulent misrepresentation. However it is clear that in cases that are somewhat murky, claim formulation will be crucial to navigate Dicey Rule 3.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff.

Kwok v UBS. Cockerill J helpfully on Lugano, economic loss and branch jurisdiction.

Update 25 02 2022 thank you Matthew Hoyle for letting me know that Justice Cockerill today granted UBS permission to appeal against her judgment.

In Kwok & Ors v UBS AG (London Branch) [2022] EWHC 245 (Comm) Cockerill J holds on forum damni (Article 5(3) for purely economic loss, and branch jurisdiction (Article 5(5) for the English courts under the Lugano Convention. Defendant is Switserland based and the proceedings clearly were initiated prior to Brexit.

On A5(3) locus damni, all parties and the judge agree that CJEU authority is not easy to disentangle and does not unequivocally point into one direction: see eg [84] ‘the authorities are not entirely pellucid on what they do say.’

The bank, defending, argues ia that a rule of thumb under (limited) English authority is that in a case of negligent misstatement the damage will occur where the misstatement is received and relied upon. Cockerill J distinguishes the authority from current case and also points out [82] that all cases concerned predate the CJEU authority particularly in Lober and Vereniging van Effectenbezitters, and that ‘the tide of authority is against the proposition that loss is suffered wherever a claimant ultimately feels it’ [85]. Having summarised the lines of interpretation following from CJEU authority, she concludes [113]

Once the focus is on actual manifestation (of damage, GAVC) the most natural analysis is to view the damage as occurring where and when the Acquired Shares were liquidated.

here, London, where the shares claimants had invested in were held and where the funds they had invested were depleted; the loss crystallises, manifests, becomes certain and irreversible with the sale of shares and that loss of claimants’ Monetary Contribution which had merged into the shares  [115].

The account, where the damage was first “registered” or “recorded” was in London with the defendant itself (as in CJEU Kronhofer) [117]. The Universal Music-instructed ‘special circumstances’ cross-check also points to London: [118]

London was the place at which it had been agreed by all parties that the Acquired Shares would be held, and all of the contractual documents UBS entered into (albeit for a transaction at one remove from the Claimants) were to be in English and governed by English law. It was therefore entirely predictable and foreseeable from November 2014 that the parties might sue or be sued in London in relation to the Investment and dealings with the Acquired Shares.

Branch jurisdiction under Article 5(5) is dealt with obiter [120] ff. Cockerill J holds [138] that was is needed inter alia per CJEU flyLAL is ‘sufficient nexus’, sufficiently significant connection does not require involvement in the tortious acts [140]. This is supported, Cockerill J holds [148] by the fact that UBS London’s thoughts and actions will be relevant to the trial. There will be a need to investigate UBS London’s conduct and intentions both (i) at the time of the representations and advice given by UBS and (ii) late events and the loss resulting therefrom.

A good judgment to assist with the economic loss jigsaw.

Geert,

(Rejected) appeal in PIFSS v Banque Pictet leads to renewed criticism of the intensity of jurisdictional litigation – as well as continuing uncertainty on anchor jurisdiction.

The appeal in The Public Institution for Social Security v Banque Pictet & Cie SA & Ors [2022] EWCA Civ 29 has been dismissed. I reviewed the first instance judgment here. I conclude that review writing ‘Those criticising the intensity of jurisdiction squabbles will find ammunition in this 497 para judgment.’ The Court of Appeal judgment is another 152 paras and as Andrew Dickinson also notes, Carr LJ, too, is critical: [12]

There will of course be cases where a novel and/or complex point of law needs to be debated fully and decided and, as foreshadowed above, this litigation raises some new, albeit relatively short, legal issues. Further, the sums involved are substantial and the allegations made are serious. However, these features did not create a licence to turn a jurisdictional dispute into an extensive and essentially self-standing piece of litigation. The costs incurred below ran to many, many millions of pounds: the interim payment orders in respect of the Respondents’ costs amounted to £6.88 million against a claimed total of some £13.5 million.

The issues on appeal are listed [41] ff and they of course reflect the discussion I summarised in my post on the first instance findings. I list them below and summarise the Court’s findings.

Article 23 formal requirements (involving Banque Pictet and Mr Bertherat only):

i) For the purposes of the requirement in Article 23(1)(a) that a jurisdiction agreement must be in or evidenced in writing, was the Judge right to conclude that it was unnecessary for the GBCs containing the EJCs (‘exclusive jurisdiction clauses, GAVC) actually to have been communicated to PIFSS?

ii) If so, was the Judge right to find that Banque Pictet did not have the better of the argument that the GBCs were communicated to PIFSS prior to 2012?

Lady Justice Carr is right in my view e.g. [67] that CJEU authority does not require material communication of GTCs etc which contain EJCs. Rather, the judge needs to establish ‘real consent’,  in the spirit of the Raport Jenard with a rejection of excessive formality.

Article 23 material validity (involving all Pictet and Mirabaud Respondents (save for Pictet Asia, Pictet Bahamas and, for the avoidance of doubt, also Mr Amouzegar and Mr Argand)):

i) Was the Judge right to conclude that the “particular legal relationship(s)” in connection with which the EJCs were entered into for the purpose of Article 23 was the totality of the legal relationships between the parties forming part of the banker/customer relationship between them?

ii) Was the Judge right to conclude that the relevant Respondents had the better of the argument that the disputes relating to (a) the Pictet/Mirabaud bribery claims; (b) the Pictet/Mirabaud accessory claims “ar[o]se out of” those “particular legal relationship(s)”?

The term ‘material validity’ is employed both in first instance and at the Court of Appeal although it is not quite correct; what is really meant is what Henshaw J called the ‘proximity’ requirement: which ‘disputes’ ‘relate to’ the matters covered by the EJCs? Here, Carr LJ sides eventually [98] with the judge mostly as a matter of factual analysis: neither CJEU Apple nor CDC require a restrictive approach where parties have formulated the EJC very widely. The judge carefully considered the wording of the clause and on contractual construction was right to find that the disputes at issue fell within it.

Scope of EJCs (as a matter of the relevant domestic law) (involving all Pictet and Mirabaud Respondents (save for Pictet Asia and Pictet Bahamas and again, for the avoidance of doubt, Mr Amouzegar and Mr Argand)):

i) Was the Judge right to find that PIFSS had the better of the argument that, on the true construction of the relevant EJCs, the disputes relating to the wider accessory claims fell outside the scope of the applicable EJCs?

ii) (Mr Mirabaud only): Was the Judge right to conclude that PIFSS had the better of the argument that claims against Mr Mirabaud relating to events after 1 January 2010 fell outside the scope of the relevant EJCs?

This issue relates to whether the EJCs, as a matter of construction under Swiss (or Luxembourg) law – which the judge had discussed obiter, did not extend to cover the wider accessory claims. [101]: in summary the relevant parties suggest that, having correctly recognised that what was alleged by PIFSS were unitary schemes arising out of continuing courses of conduct, the Judge was then wrong to conclude that they did not have the better of the argument that the wider accessory claims also fell within the EJCs.

Carr LJ deals rather swiftly with these discussions, again I feel finding mostly that the judge’s analysis was mostly factual (albeit seen from the viewpoint of Swiss and /or Luxembourg law) and not incorrect.

Article 6: (the number of Respondents to whom the Article 6 challenge is relevant will depend on the outcome of the appeals on the issues above, but on any view the issue of principle arises in relation to Mr Amouzegar and Mr Argand):

i) Was the Judge right to conclude that, for the purpose of Article 6, the Court was not required to consider solely the risk of irreconcilable judgments between the claim against the anchor defendant and the claim(s) against the proposed Article 6 defendant(s) but rather was permitted to consider other relevant circumstances including, in particular, the risk of irreconcilable judgments between the claims sought to be made against the proposed defendant and other claims in other member states?

ii) Did the Judge apply the test correctly in relation to each relevant Respondent?

This I find is the most important part of the judgment for it is in my view the one which most intensely deals with a point of law. Readers may want to refer to my earlier post for a summary of the A6 (Lugano) issues. The judge had found against A6 jurisdiction, also following Privatbank‘s ‘desirability’ approach. Parties upon appeal argue [110] that the Judge’s interpretation results in exclusive jurisdiction clauses having practical effects well beyond the scope of their application, with the collateral effect of conferring on them a “gravitational pull” which is inconsistent with the proper interpretation of A23 Lugano. PIFSS submits that it undermines the drive for legal certainty that motivates the strict approach to A6 identified in the authorities. They also suggested (in oral submission) that for A6 purposes only actual, and not merely potential, proceedings are properly to be taken into account. 

The CA however [112] confirms the relevance of future as well as extant claims and generally supports the flexible approach to A6. Carr J concedes [131] that this approach can be said to give “gravitational pull” to A23 and suggests ‘(t)here is nothing objectionable about that, given the respect to be accorded to party autonomy.’

I do not think this is correct. Including broadly construed ‘related’ claims in choice of court would seem to deny, rather than protect party autonomy: for if parties had really wanted to see them litigated in the choice of court venue, they ought to have contractually include them.

The issue of desirability per Privatbank is not discussed and therefore remains open (compare EuroEco Fuels).

Forum non conveniens: Pictet Asia and Pictet Bahamas:

i) Depending on the outcome of the issues above, was the Judge right to conclude that PIFSS had not shown that England was clearly the appropriate forum for the resolution of the claims against Pictet Asia and Pictet Bahamas?

Here the swift conclusion [143] is that the judge’s finding that PIFSS had not shown that England was clearly the proper forum is unimpeachable.

A lot is riding on this jurisdictional disagreement.  Permission to appeal to the Supreme Court was refused by the CA but may still be sought with the SC itself.

Geert.

EU Private International Law, 3rd ed. 2021, big chunks of Chapter 2.

 

The Brazilian orange juice cartel: successful claimants on among others Article 34 Brussels Ia ‘forum non light’, with lingering doubts on A4 ‘domicile’..

Viegas & Ors v Cutrale & Ors [2021] EWHC 2956 (Comm) (05 November 2021) concerns an alleged cartel between several Brazilian companies which produce orange juice, including Sucocítrico Cutrale: 3rd defendant. The other two defendants, Mr Cutrale Sr and Mr Cutrale Jr,  are natural persons Claimants are orange farmers who are all domiciled in Brazil.  The claim relates to alleged antitrust infringements committed in Brazil and said to have restricted competition in markets in Brazil, causing harm to the Claimants there.

Claimants claim to be entitled to maintain proceedings in England and Wales on the bases that:

i)                   although Sucocítrico Cutrale is a Brazilian company, it has its central administration in London and is therefore domiciled in the UK pursuant to A63(1)(b) Brussels Ia;

ii)                 alternatively, the Claimants were entitled to serve Sucocítrico Cutrale, pursuant to CPR 6.3(c)/6.9(2) at a “place within the jurisdiction where [it] carries on its activities; or any place of business of the company within the jurisdiction”.

iii)               Cutrale Snr is domiciled in England; and

iv)               Cutrale Jnr is domiciled in Switzerland and the claims against him are so closely connected with the claims against Sucocítrico Cutrale and Cutrale Snr that it is expedient to hear and determine them together so as to avoid the risk of irreconcilable judgments, pursuant to Article 6 Lugano Convention.

The Defendants’ position is in outline as follows:

Sucocítrico Cutrale

i)                   Sucocítrico Cutrale has its “central administration” in Brazil and is therefore not domiciled in the UK for the purpose of A63(1)(b) BIa.  There is therefore no right to bring proceedings against the company in England under Article 4(1). The court must apply common law principles to determine jurisdiction.

ii)                 Alternatively, the claims against Sucocítrico Cutrale should be stayed under A33 and/or 34 BIa because of ongoing proceedings in Brazil concerning the alleged cartel.

iii)               The Claimants were not entitled to serve Sucocítrico Cutrale at an address within the jurisdiction, and so the company has not been validly served.

iv)               Alternatively, applying common law forum non conveniens principles, Brazil is the proper place for the claims against Sucocítrico Cutrale and the court should not exercise jurisdiction against it.  The claims against Sucocítrico Cutrale should be stayed even if (contrary to the Defendants’ primary case) Cutrale Snr is domiciled in England. Cutrale Snr has confirmed that he would submit to the jurisdiction of the Brazilian court. The risk of inconsistent judgments in England and Brazil therefore carries little weight because it would be caused by the Claimants’ unnecessary pursuit of litigation in England. In such circumstances, the court may stay the claims against the foreign defendant notwithstanding the presence of a UK domiciled anchor defendant (reference is made to Vedanta Resources plc v Lungowe [2020] AC 1045 . I flagged the ‘submission to foreign jurisdiction’ issue in my review of Vedanta).

Cutrale Snr

v)                  Cutrale Snr is not domiciled in the UK. There is therefore no right to bring proceedings against him under A4(1) BIa.

vi)               Further or alternatively, the court should stay the claims against Cutrale Snr pursuant to A34 BIa because of the ongoing proceedings in Brazil.

vii)             Although Cutrale Snr was served in the jurisdiction, applying common law forum non conveniens principles Brazil is the proper place for the claim.  Accordingly, the court should decline jurisdiction.

Cutrale Jnr

viii)           If neither Sucocítrico Cutrale nor Cutrale Snr is English domiciled there is no basis to assume jurisdiction against Cutrale Jnr.

ix)               If Cutrale Snr is English domiciled but the claims against Sucocítrico Cutrale are to proceed in Brazil, the criteria under A6 Lugano are not met because it would be more expedient for the claims against Cutrale Jnr to be heard in Brazil alongside the claims against Sucocítrico Cutrale.

x)                  Further or alternatively, the court should stay the claims pursuant to a reflexive application of A28 Lugano Convention because of the ongoing proceedings in Brazil.

Henshaw J held that the court lacks jurisdiction over Sucocítrico Cutrale however that it does have jurisdiction over Cutrale Snr and Cutrale Jnr and  that there is no proper basis on which to stay the claims against them.

Domicile of Sucocítrico Cutrale (‘SuCu’)

A63 BIa determines corporate domicile as the place where the corporation has its (a) statutory seat; (b) central administration; or (c) principal place of business. Claimants suggest place of central administration as being in London. Anglo American came to my mind as indeed it did to counsel and judge in current case. At 31 ff a concise look into the travaux is offered as are references to CJEU case-law under freedom of establishment (including Uberseering). I would be cautious however with too much emphasis on those cases, which are judged in quite a different context to the one in a jurisdictional assessment.

SuCu are in in essence a family-run business [55]. This is also emphasised in the witness statement of Cutrale Sr himself. SuCu refer extensively to its internal by-laws and the role in same for the ‘Executive Board’ which is made up of professionals. However there is also a, by-laws sanctioned, Family Board (in which Cutrale Sr until recently had a 99% stake). The Executive Board, by defendant’s own admission [55], runs the company on a day to day basis. The Family Board seemingly meets at various places worldwide, and the role of London in the family Board’s direction is not small, given that Cutrale Sr has secretarial assistance for his business interests there, and that his daughter (who also sits on the Family Board) conducts all her business interests there [57].

In Anglo American, the CA held

 ‘the correct interpretation of “central administration” in Article 60(1)(b)when applied to a company, is that it is the place where the company concerned, through its relevant organs according to its own constitutional provisions, takes the decisions that are essential for that company’s operations. That is, to my mind, the same thing as saying it is the place where the company, through its relevant organs, conducts its entrepreneurial management; for that management must involve making decisions that are essential for that company’s operation’

[75] ff the judge does not see London as that place where the entrepreneurial management takes place. This is to some degree a factual appraisal however I I am minded to see quite strong arguments in favour of London. I do not think for instance that BIa’s DNA of predictability for the defendant knowing where it might be sued, carries too much weight here seeing as the complex structure and the diverse effective location of the Family Board’s meetings is of its own making. By failing clearly to implement one centre of entrepreneurial management, visible to outsiders, the defendant in my view brings the risk of positive conflicts of jurisdiction upon itself.  All the more so in my view in cases where, such as here, the accusation is involvement in a cartel, which is unlikely to have happened with the firm controller of the Family Board having been kept in the dark.

Alternative serving under CPR 6.9.(2) [“Any place within the jurisdiction where the corporation carries on its activities; or any place of business of the company within the jurisdiction.”] is also dismissed: [104] ff.

[112] ff the judge discusses the domicile of Cutrale Sr which, per A62(1) BIa is to be determined under English law. This [129] ff is held to be England.

Cutrale Jr being undisputably domiciled in Switserland, the question arises whether the claim against him may be anchored upon the claim against his father, per A6(2) Lugano. The judge is reminded of his own judgment in PIS v Al Rajaan. Defendants submit that if the claims against Sucocítrico Cutrale must be pursued in Brazil, it is more expedient for the claims against Cutrale Jnr to be pursued in that jurisdiction, even if the Claimants are entitled to sue Cutrale Snr as of right in England. However [142] the judge agrees with Claimants’ point that somewhat different policy considerations arise when considering the risk of inconsistent judgments within the EU (or between Lugano States), compared to the position vis-à-vis so-called ‘third States’, and that the latter context does not involve the same particular impetus to remove obstacles to the single market and observe the principle of ‘mutual trust’ between the courts of different Member States.

Whilst the claims against Cutrale Jnr are of course connected with those against Sucocitrico, they are also bound to involve important issues in common with the claims against Cutrale Snr which (subject to the issue of an A34 stay, see below) are to be pursued in England  [143].

[144] In conclusion the expediency threshold under A6 Lugano is held to have been reached.

Next, a stay of the proceedings against Cutrale Snr under A34 BIa is rejected [147] ff. Much of the A34 authority, all of which I have discussed on the blog, is flagged. The judge observes the tension between Kolomoisky and EuroEco Fuels (Poland) as to whether the power to stay depends on there being a procedural means by which the two actions could, in fact, be tried together. At [163] the judge thankfully notes the important distinction between A33-34 and A29-30, despite citing A29-30 authority with some emphasis:

I would observe, however, in disagreement with the Defendants, that despite the similarity of language it may well make a difference whether a stay is sought (a) under Article 28 as such or (b) under Article 34 or under Article 28 as applied reflexively vis a vis proceedings in a third country (see § 238 below).  The observation quoted above that there might be a presumption in favour of a stay seems considerably easier to justify in a case where the intra-EU internal market considerations referred to in § 142 above apply than where the overseas proceedings are in a non-Member State.  On the contrary, a presumption of a stay in favour of a third country state of proceedings prima facie brought as a right against a defendant in his place of domicile may well be hard to square with the fundamental principles underlying the Brussels and Lugano regimes.

At [221], too, and in an in my view important and marked departure from Justice Turner in Municipio, Henshaw J here holds that

whilst recital 24 indicates that the court should consider all the circumstances of the case, it does not follow that the court can grant a stay pursuant to Article 34 which is in substance no more than a forum non conveniens stay.  It follows that the factors listed in § 213.iv) above are relevant only insofar as they support the granting of a stay based on the Favero and Costa claims as related claims.

This puts the horse back before the cart.

At [164] ff the ‘rival’ Brasil claims are discussed, [197] of which only two predate the current E&W claim against Cutrale Sr and a conclusion [210] that these are related in a broad sense to the present claims, but that degree of relationship would be insufficient to make it expedient to stay the present claims by reference to them.

[213] ff the various arguments that a stay would be in the ‘interest of justice’ are rejected: these include in particular [216] suggestions of consolidation or joint case management, whilst theoretically possible, are unrealistic in practice (reference is made ia to the fact that none of the current Brazilian claims have been consolidated); [217] neither rival claim is likely to reach a conclusion in the reasonably foreseeable future: on the contrary, both have been mired in procedural disputes for many years.

Similar arguments are made obiter when considering an A33-34 stay against Sucocitrico (in the event the A4 analysis, above, were to be wrong): [241] ff.

At 237, the possibility of a stay of the proceedings against Cutrale Jr, under a reflexive application of A28 Lugano is rejected with mere reference to the reasons listed viz the A34 stay. The judge has to follow the Court of Appeal’s finding in Kolomoisky, that reflexive application of A28 Lugano is possible. Clearly, I submit, it is not and this will be an important point to clarify when and if the UK accede to Lugano.

The judge concludes [249] ff by obiter upholding a forum non stay. His arguments here are interesting among others for they lead to a different result than the A33-34 application – which serves to confirm the very different nature of both mechanisms.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.15.3.

Commerzbank. The CJEU adopts a flexible approach on the ‘international’ in ‘private international law’, at least for the protected category of consumers.

I reviewed the AG’s Opinion in C-296/20 Commerzbank here. The CJEU held a few weeks back, rejecting the AG’s main proposal and instead following him on the subsidiary argument – I lean towards the AG’s first option. For the consumer section, it now suffices the international element surfaces only after the contract has been concluded, provided of course (I am assuming; the CJEU refers to the case but is not quite clear) the contract at issue meets with the Pammer Alpenhof criteria: the business concerned need not necessarily actively pursue a commercial activity in the State in which the consumer is now domiciled, yet its organisation of operations and marketing is such as to meet the ‘directed at’ criteria of the consumer section.

It is to be assumed that the Court’s flexible interpretation (for which it relies to a large degree on mBank) of the international element to this far-reaching extent, only applies given the protective intent of Lugano’s (and Brussels Ia’s) consumer, potentially employees’ and insurance title. It carries far les authority for B2B contracts I would suggest.

Geert.

EU Private International Law, 3rd ed. 2021, 2.222 ff.

Commerzbank. Sanchez-Bordona AG on the timing of the ‘international’ element required to trigger consumer protection in private international law (here: Lugano).

Sanchez-Bordona AG Opined last week in C-296/20 Commerzbank AG v E.O, a case on the consumer section of the Lugano Convention however in essence on the international element required to trigger consumer protection in private international law. The distinguishing feature of this case lies in the fact that, at the time when the contract was concluded, both parties were domiciled in the same State (Germany), whereas, when recovery was sought through the courts, the customer was domiciled in Switzerland.

The international nature of the situation therefore came about subsequently rather than being present at the outset.

The Advocate General is absolutely right to point to the objective of the consumer section of Lugano, and indeed Brussels Ia, to protect the consumer as the economically weaker party; and in C-98/20 mBank, the Court held that the consumer’s domicile needs to be determined at the time of the instigation of the suit, not the conclusion of the contract (or a later date in the proceedings) even in those circumstances where the consumer failed to inform the professional party of the change of domicile.

The AG however also insists on the predictability of forum both as claimant and as defendant, for the economic operator.

His provisional conclusion therefore (73-74), following analysis of the travaux, is that the international element needs to be present at the outset. However then comes the oddity of A17(3) Lugano, which mirrors A19(3) Brussels Ia:

‘The provisions of this Section may be departed from only by an agreement [conferring jurisdiction]:… 3. which is entered into by the consumer and the other party to the contract, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same State bound by this Convention, and which confers jurisdiction on the courts of that State, provided that such an agreement is not contrary to the law of that State.’

[With respect to the last element of this Article, it is indeed by no means certain that national law allows for such agreement and the AG (87) notes same].

The Jenard Report viz the Brussels 1968 Convention explains that that rule was included for reasons of equity to benefit a seller or lender domiciled in the same State as the buyer or borrower in the case where the latter establish themselves abroad after the contract has been concluded. The AG opines that the purely domestic setting of A17(3) must not be extended to the remainder of the consumer section, instead keeping it confined to the particular circumstances of that subsection.

In subsidiary fashion, the AG proposes that if the CJEU does not follow him on the generally required international element at the outset, it limit the extensive  application of the consumer section to cases where the economic operator pursues in the State of the consumer’s new domicile a trade or profession such as that which gave rise to the conclusion of the contract.

Interesting.

Geert.

EU Private International Law, 3rd ed. 2021, 2.222 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.

 

LugaNON. My brief thoughts on the European Commission’s refusal to support the UK’s accession to Lugano 2007, and a clarification of the procedure and required majorities.

Update 9 July 2021 Thank you Ekaterina Pannebakker for flagging the momentarily definitive ‘no’: the EU’s official confirmation of non-consent.

Update 8 June 2021 for the Dutch regret of the EC’s approach yet de facto acceptance of the EC position, see  here – with thanks to Taco Van Der Valk for signalling. The Dutch Government also emphasises the fact that the issue is open-ended: it can be revisited in a later stage of EU-UK relations.

This post is my tuppenny worth on the European Commission’s Assessment on the application of the United Kingdom of Great Britain and Northern Ireland to accede to the 2007 Lugano Convention. These are my considered but of course not my exhaustive initial thoughts. For excellent review of the legal status quo, see Andrew Dickinson’s ‘Realignment of the Planets – Brexit and European Private International Law’ in IPRax 2021/3.

The background. 

In June 2020, Michel Barnier reportedly commented ‘Do we really want the UK to remain a centre for commercial litigation for the EU, when we could attract these services here?’. This illustrated what has been clear now for quite a while: legal services contribute directly to GPD, mostly as a result of law firms’ turnover and, more recently,  via the financial performance of third-party financing. More importantly, they have an impact on the reputation of a country. Courts’ know-how, speed and general performance are a particularly relevant factor here. Therefore the legal sector acts as one factor in attracting foreign direct investment, as the rise of  international commercial courts shows.

The quote also illustrates however that the European Commission and the Member States were keenly aware of the impact of Brexit on judicial co-operation. Throughout the process, this included early EU flags that, should judicial co-operation fail to be included in the EU-UK Trade and Co-operation Agreement – TCA, it should not be assumed that the EU would support UK Lugano membership. Scholarship, too, warned of the inferiority of Lugano viz Brussels IA, and the particular weakness of Lugano States only having to take  ‘due account’ (Article 1 Protocol 2 Lugano 2007) of CJEU case-law on Lugano.

As readers will be aware, the TCA as eventually negotiated includes precious little on judicial co-operation in civil and commercial matters. A Hard Brexit in this area, therefore. Amidst the many issues that needed to be discussed in the TCA, judicial co-operation did not make the grade. This was not a big surprise. As Peter Bert signalled from the start, judicial co-operation barely featured in the negotiation mandate on the EU side, and on the UK side the Government kept largely schtum about the issue.

The lack of provision in the TCA put back into the spotlights the UK’s April 2020 application to join Lugano. Of note is as I have signalled before, that the UK could accede to Lugano, bypassing EU approval , if it were to become a fully fledged EFTA Member State (A70(1)a Lugano). That of course is not the route the UK has followed in its disentanglement from the EU. Under A72 Lugano therefore accession requires consent from the current Lugano States, consent which they ‘endeavour to give’ at the latest within one year after the invitation to do so by the Depository (i.e., Switserland). 

The flip-flop? 

It is reporting in the Financial Times which subsequently put things into a bit of a spin, whether as a result of misinformation or lobbying, I cannot say. On the day of an important meeting of the relevant Working Party, the FT first reported the EC would support Lugano Membership – contrary to what the vast majority of observers had assumed. By the afternoon a U-turn in reporting was made, suggesting additionally that a split had emerged among the Member States. That split is simply not there, or not to a sufficient degree (see below re the voting procedure).

The morning’s reporting of white smoke made the lack of EC support look like a surprise or indeed a disappointment. Clearly it could not have been the former: most of us had assumed the EC would not support the application.

That leaves the feeling of disappointment. Quite aside from one’s view on Brexit as a whole, for legal practice clearly a continuing umbilical cord between the UK and the Brussels Regime in its widest form (BIa, Rome I and II etc etc) would have been most preferable. Lugano would have been a second best. I remind readers that Lugano not only lacks a unified solid judicial oversight. It also lags behind Brussels Ia in important aspects (Lugano 2007 instead mirrors Brussels I, Regulation 44/2001).

The reasoning.

In its Communication to the EP and the Member States, as Peter Bert reports, the EC’s core reasoning is

“For the European Union, the Lugano Convention is a flanking measure of the internal market and relates to the EU-EFTA/EEA context. In relation to all other third countries the consistent policy of the European Union is to promote cooperation within the framework of the multilateral Hague Conventions. The United Kingdom is a third country without a special link to the internal market. Therefore, there is no reason for the European Union to depart from its general approach in relation to the United Kingdom. Consequently, the Hague Conventions should provide the framework for future cooperation between the European Union and the United Kingdom in the field of civil judicial cooperation.”

The Commission specifically refers to the example of Poland as the direction of travel (closer integration with the EU), and to Lugano being a flanking measure of the Internal Market. The 1968 Brussels Convention quite clearly shows the DNA and the narrative of market integration. The development of the EU judicial area in the meantime has moved along in the direction of the EU citisen, rather than merely corporations, as consumers of EU judicial co-operation. Yet without Lugano States being part of the much wider judicial co-operation agenda of the EU proper, it is not absurd to suggest that Lugano 2007’s narrative is more closely aligned with market  integration than it is with ever deeper integration.

At the time of Poland‘s accession to Lugano, this was indeed clearly also linked to its impending membership of the EU, as also noted by David Lock QC, relevant UK Minister at the time. For current candidates, one could think e.g. of Georgia, and the Balkan countries, as stronger candidates for Lugano membership than the UK. Clearly, however, they may bump into opposition by the non-EU Lugano States.

The victims.

The general narrative, to which I subscribe, is that it is not Business to Business contracts, and the litigation by big business cases that will be much hit by this hard Brexit in judicial co-operation. They will turn to arbitration, they will agree exclusive choice of court (covered by the 2005 Hague Convention), and if need be they will simply absorb being litigated in, or having to litigate in the EU. Likewise, many UK judgments in standard business cases will find little difficulty, if some delay, in enforcement in the EU.

Rather: SMEs (lest they too enter into exclusive choice of court agreements per Hague 2005; and they will be less likely to be able to absorb the cost of parallel litigation), consumers and employees, travellers (including in direct action versus the insurer), and claimants in corporate due diligence cases will find it much harder to have a smooth judicial process between the UK and the EU. Consumers domiciled in the EU will still be able to sue UK corporations in the EU, provided they meet the Pammer Alpenhof criteria under the relevant Section of Brussels Ia; and employees carrying out their duties here, likewise will be able to sue a UK employer in the EU. Yet with the distinct possibility of parallel UK proceedings, and subsequent difficulties in having a European judgment enforced, there will be many a freezing effect on proactive judicial action by these protected groups. Clearly and mutatis mutandis, the same categories in the UK will see a major judicial protection avenue fall away, as non-EU cq non-Lugano domiciled consumers, employees and small insureds do not enjoy the protection of the relevant Sections in BIa cq Lugano.

A distinct category of claimants that will be hit, are those which recently have enjoyed the reigning in of forum non conveniens in business and human rights cases particularly under Lugano (where Owosu’s rejection of forum non rules) and even under Brussels Ia (where A33-34 does create some obstacles). Without Lugano, forum non in these cases will once again come to the fore, although recent Court of Appeal and Supreme Court authority on duty of care may alter that fear. 

The voting procedure and future options.

Greg Callus suggests a number of future options here. I have made the following admittedly lame football comparison: If BIa is the Champions League, then Lugano is the Premier League and the Hague Judgments Convention the Ruritanian Boy Scouts football conference. That is because the 2019 Convention does not impact on forum non theories of the signatory States; is a long, long way off entry into force (albeit as noted the EC signals it might speed up the accession process); has such a huge amount of exceptions, reservations and open questions, counsel will drive an entire tank company through it; and, like all Hague instruments, lacks a harmonising court with authority over interpretation.

The Lugano Convention encourages consent within a year of notification. Absence of an answer in other words simply continues a status of lack of consent.

An important final word on the voting procedure: it is NOT the case that the final word on the current initiative lies with the Member States under qualified majority – QMV voting. An EU yes to Switserland, the depository, requires a Council Decision with QMV. However that requires a COM proposal for such decision. This, the European Commission clearly is not willing to put forward. Article 241 TFEU enables Council to request the EC to put forward a proposal for decision. Yet to amend that proposal (which would have to be the case here, seeing as the EC will not propose consent), unanimity is required.

In conclusion

I return to my Barnier quote above: ‘Do we really want the UK to remain a centre for commercial litigation for the EU, when we could attract these services here?’ Free movement of judgments simply is too big a cherry to have the UK pick it in the absence of a more overall framework for judicial co-operation in civil and commercial matters. I fear the fall-out for the categories listed above, might not be enough to make the EC and indeed enough Member States deviate from the Brexit negotiation mandate, which continues to cast a long shadow over this particular initiative.

Geert.

EU private international law, 3rd ed. 2021, Heading 1.7.

Skatteforvaltningen v Solo Capital Partners. Unfinished business on endangering Brussels Ia’s effet utile, ‘civil and commercial’ in revenue matters, enforcing foreign public law and Dicey Rule 3.

At issue in Skatteforvaltningen (The Danish Customs And Tax Administration) v Solo Capital Partners LLP & Ors [2021] EWHC 974 (Comm)  is ‘Dicey Rule 3’ which states that “English courts have no jurisdiction to entertain an action: (1) for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign State; or (2) founded upon an act of state“. The assertion of such claims is an extension of a sovereign power of taxation and, per Lord Keith of Avonholm in Government of India v Taylor [1955] A.C. 491, 511: “an assertion of sovereign authority by one State within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties“.

By its claims, SKAT (Danish customs and excise) seeks the return of amounts it says it was wrongly induced to pay out as tax refunds.

Brussels Ia and Lugano (the latter viz a number of defendants domiciled in Lugano States) feature in the discussion because SKAT argue that [22] ‘: (i) this is a ‘civil and commercial matter’, not a ‘revenue, customs or administrative matter’, under A1(1) BIa; and (ii) it is therefore not possible to invoke Dicey Rule 3 to dismiss its claims against Brussels-Lugano defendants, because to do so would be to decline to exercise a jurisdiction conferred by the Brussels-Lugano regime otherwise than in accordance with its rules.’

If the argument were upheld, any claims falling within Dicey Rule 3 would proceed against Brussels-Lugano defendants while being dismissed against other defendants. 

Dicey Rule 3 is not a jurisdictional rule: it is a substantive rule of English law. Yet SKAT’s argument in my view essentially means that an application of Dicey Rule 3 to the matter, would deprive A1(1) BIa of its effet utile.

Logically the BIa /Lugano argument would have had to have been considered first. Baker J does the opposite (his thinking process, unlike writing up, may of course first have considered the BIa argument) and holds at 120 after thorough consideration of the authorities on Dicey Rule 3, that the rule applies: SKAT’s claims seek indirectly to enforce in E&W, Danish revenue law.

In an interesting Coda at 121 ff, he also considers obiter the argument that, in essence, was that in line with a long public international law history, the cross-border recovery of tax refunds wrongfully procured is seen as or assumed to be a matter of revenue law requiring to be dealt with (if at all) by supranational legal instrument. Refence here is made ia to 1925 League of Nations reports.

Justice Baker starts [132] the BIa /Lugano argument along familiar lines: need for autonomous interpretation. QRS 1 ApS et al v Frandsen [1999] EWCA Civ 1463 is English authority under the Brussels Convention, and CJEU C-49/12 Sunico (to which both the AG and the CJEU refer in C-73/19 Belgische Staat v Movic BV et al) CJEU authority.

[142] In Sunico, the CJEU considered claims brought by HMRC alleging missing trader VAT carousel frauds. The substantive claims, for damages at common law for an alleged tortious conspiracy to defraud, were pursued in E&W against defendants domiciled in Denmark. HMRC also brought ancillary  proceedings in Denmark to attach assets with a view to enforcing any damages judgment obtained in England. Those Danish proceedings were objected to on the basis that they were a ‘revenue [etc] matter’ excluded from BI.

[144] The CJEU concluded at [41]-[43], essentially, that because the claim was framed in tort and not as a claim under a tax law, the proceedings were a ‘civil and commercial matter’ and not a ‘revenue [etc] matter’ for the purpose of Article 1(1) of the Brussels Regulation, so long as “the commissioners were in the same position as a person governed by private law in their action against Sunico and the other non-residents sued in the High Court of Justice” (ibid at [43]).

At 149 Baker J concedes that the decision of the Court of Appeal in Frandsen was incorrect per Sunico, however then holds that the result would be the same: the classification of proceedings as a ‘civil and commercial matter’ or a ‘revenue [etc] matter’ for the purpose of applying the Brussels-Lugano regime does not touch the question whether Dicey Rule 3 applies so as to defeat the claim. He suggests [149] a search for the lex causae under Rome II would be largely irrelevant for per A16 Rome II Dicey Rule 3 qualifies as lois de police, and finds support for his view that despite scholarly suggestion (i.a. by prof Briggs), Frandsen must not be displaced, in The Law Debenture Trust Corporation [2017] EWHC 655 (Comm) [and in Andrew Dickinson’s reporting on same], in which the English Act of State doctrine was upheld despite Rome II’s classification of the matter as civil and commercial.

At 165 ff he, somewhat superfluously still considers the more recent CJEU authority of Buak and the aforementioned Movic, and decides at 174 that per BUAK and Movic (on the use of evidence etc.) that SKAT was neither attempting nor able to change the rules of the litigation game, either as to the substantive rules of law that would apply in determining its claims, or as regards the procedural rules applicable in the litigation, or as regards the status or effect of any of the evidence it might deploy or disclose. SKAT was not by this litigation pursuing public law proceedings, in which liabilities are determined as if this were a judicial review of SKAT’s actions, decisions or exercise of public law powers.

Yet that the matters are of a civil and commercial nature, in the end does not matter at all: [176]

To the extent that SKAT relied on the Brussels-Lugano regime as the basis for this court having jurisdiction over the Brussels-Lugano defendants that have been sued, including it may be for serving proceedings out of the jurisdiction, in my judgment it was right to do so. But its having been entitled to do so did not oust or disapply Dicey Rule 3 in respect of those defendants.

Using prof Dickinson’s words (26-27), there is a dissonance here between Brussels Ia and the applicable law. One that, I would suggest, endangers the effet utile of Brussels Ia. Dicey Rule 3’s character as a substantive rather than a jurisdictional rule, does not to my mind save that.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff.

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