Posts Tagged ordre public
Thank you Francesca Petronio, Fabio Cozzi & Francesco Falco for flagging the Italian Supreme Court’s judgment no. 16601/2017 of 5 July last. Thank you also to professor Marta Requejo for sending me copy of the judgment.
In what is suggested to be a Copernican revolution, the Supreme Court has dropped the Italian legal order’s fundamental objection to punitive damages, which made it near-impossible to obtain recognition and enforcement of in particular US judgments containing such damages. The judgment not surprisingly contains a number of conditions in particular on the excessive nature of such damages.
The judges seem to have been swayed by developments both in Italy (statutory law in places allowing for more than simple compensation of material loss) and US law (truly excessive punitive damages having been reigned in).
Punitive damages are the one example always identified as one of the core applications of ordre public in European recognition and enforcement law. After the Italian example surely this may now be less obvious in many jurisdictions.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.
Belgium’s Lernout & Hauspie case recently entered a further stage in its civil law chapter. The case is part of Belgium’s (and especially Flanders’) collective memory as an illustration of what can go wrong when markets and investors alike are fooled by corporate greed. Is it world-famous, in Belgium: for those outside, Wiki should help.
Of interest to this blog is the recent judgment of the Gent criminal court on the civil chapter of the case: see my colleague proximus Stefaan Voet’s analysis here. Stefaan has helpfully translated the most relevant sections of the judgment, in particular the court’s rejection of the argument that the US opt-out class action settlement were contrary to Belgium’s ordre public. The court, in my view entirely justifiably, holds that Belgium’s Private international law act does not oppose recognition and enforcement. Of note is the extensive comparative reference which the court makes not just to existing Belgian law on class actions (the Belgian legal order can hardly oppose what it tentatively has introduced itself), but also to a European Recommendation on comparative class action law in the EU (a sort of Ius Commune idea).
Recognition and enforcement rarely makes it to substantive review in Belgian case-law. This judgment is one of note.
Sinocore International Co Ltd v RBRG Trading: The commercial court on fraus, ordre public and arbitration.
Fraus omnia corrumpit (fraud corrupts all; alternatively formulated as ex turpi causa non oritur actio) is not easily applied in conflict of laws. See an earlier post here. In Sinocore International Co Ltd v RBRG Trading , the Commercial Court granted permission for the enforcement of a foreign arbitral award despite allegations that the transaction in question had been “tainted” by fraud: this is how the case is summarised by Mayer Brown and I am happy broadly to refer to their overview and analysis.
The Commercial Court’s relaxed attitude is another sign of strong support of the English courts for the New York Convention and its narrow application of ordre public.
An interesting case for comparative conflicts /arbitration classes.
Something to digest quietly, to start this new year: in Gaz de France v STS the French Conseil d’Etat annuled an arbitral award for breach of ordre public. The Conseil objected in particular to the panel’s denial of mandatory French (administrative) law. Reed Smith have analysis here, including of the issue on jurisdiction (Conseil d’Etat or Court de Cassation).
Upon reading the judgment, my question is this (just putting it in the group, as it were): does the Conseil have terminology right where it seems to classify breach of mandatory law as a violation of ordre public (it is the latter only which justifies annulment under the New York Convention)? Incidentally (at 5) it also refers to the possibility of mandatory EU law being part of this interpretation of ordre public. This structure is clearly inspired by the Rome I Regulation where, as I have noted before, the presence of mandatory law, overriding mandatory law, and ordre public, is causing confusion.
Happy New Year, happy reading, Geert.
Thank you Steve Peers for alerting me to the relevance of the conflict of laws and the Rome I Regulation in particular in the recent Aslam et al v Uber Employment Tribunal decision. The case essentially revolves around whether claimants are employees – it is a pivotal case determining the immediate regulatory context for this part of the ‘sharing economy’. Para 87 is a particularly delightful expression of scepticism towards the sharing economy’s claims (further highlights are here).
Conflict of laws is addressed at para 103 onwards, a completion of the analysis in case of rejection of the tribunal’s view that the UK company in the Uber group employs claimants, and instead one would have to regard Uber BV (of The Netherlands) as employer. I do not think the tribunal expresses itself entirely clearly on Rome I.
If Uber BV is the employer, reclassification of the contract as one of employment (as opposed to one for the provision of services), makes the choice of law for Dutch law partially inoperable (not, as the tribunal notes at para 105 in fine, replaced with the laws on England and Wales). Next the tribunal (paras 106-109) continues to speak of ’employer’ but reviews application of Article 3 (including the application of Article 3(3)’s ‘purely domestic contracts’. If there is a contract of employment, in my view only Article 3(1) and (2) can have any impact on the analysis: the remainder of Article 3 concerns provisions for which Article 8 itself provides exhaustive rules.
From para 110 onwards, the tribunal does more tidily address Article 8 Rome I and holds, after reference to counsel view, that if indeed the Dutch BV is the employer (for it does not suggest that the contract would have to be qualified as one of services), Dutch law would largely apply, except for a limited number of provisions of English law by way of mandatory rules. (Reference to Article 21’s ordre public is justifiably rejected).
I am assuming Uber are appealing. Expect the conflicts analysis to return.
(Handbook of) European private international law, Chapter 3, Heading 3.2.5.
For the facts of the case, and the reasoning of the AG in C-559/14 Meroni, I refer to my earlier posting. At the end of May (I am indeed still hoovering up the queue) the Court held very much alongside Kokott AG’s Opinion, I shall therefore not repeat its reasoning here. The CJEU does insist that if third parties rights are directly affected with the intensity as in the case at issue, that third person must be entitled to assert his rights before the court of origin (which English courts provide for), lest one runs the risk of the injunction being refused recognition under ordre public. As I had feared, the Court does not address the AG’s concern whether Mareva orders actually constitute a ‘judgment’ for the purposes of the Regulation.
Post Brexit, this considerable attraction of English courts in interlocutory proceedings might become a lot less real. (Like many of us, I am working on a short review of Brexit consequences for European private international law).
(Handbook of) European private international law, second ed. 2016, Chapter 2, 22.214.171.124.1, 126.96.36.199.4
I have reported earlier on the 2015 Belgian Act tackling the enforcement of vulture fund litigation. In preparation of a paper on the topic, I have had to translate the (relevant parts of: I have omitted intro- and extroductory parts) the Act. I thought I might as well share. Source reference would be much appreciated if you do employ the translation below.
When a creditor pursues an unfair benefit by purchasing Government bonds or receivables, his rights vis-à-vis the debtor State are limited to the price paid for the bonds or receivables.
Regardless of the law governing the legal relationship between the creditor and the debtor State, no enforcement title can be obtained in Belgium and no protective or enforcement measure can be taken in Belgium at the request of such creditor in connection with a payment to be received in Belgium if such payment procures an unfair benefit vis-à-vis the creditor.
Pursuing an unfair benefit exists where there is clear disproportion between the purchase price and the bonds or securities’ face value, or between the purchase price of the bonds and the sums actually claimed by the creditor.
Such clear disproportion must be supplemented by at least one of the following criteria for it to qualify as an unfair benefit:
– Bankruptcy or suspension of payments of /by the debtor State was established, or imminent, when the bonds or receivables were purchased;
– The creditor has its seat in a State or territory which
a) Either is included in the list of uncooperative States and territories as established by the Financial Action Task Force (FATF); or
b) Meets with the definition of tax haven established per Article 307, para 1, fifth indent of the Income Tax Act 1992; or
c) Is included in a Government list of States unwilling to negotiate an agreement which in accordance with relevant OECD standards, provides as of 2015 for the automatic exchange of data with Belgium on fiscal and banking matters;
– The creditor systematically employs litigation to obtain reimbursement of the bonds previously purchased;
– The creditor has refused to co-operate with the establishment restructuring measures for the debtor State;
– The creditor has abused the debtor State’s weakened position so to negotiate a clearly imbalanced repayment agreement; or
– Repayment in full of the sums claimed by the creditor would have a clearly establishable negative impact on the public finances of the debtor State and could endanger the socioeconomic development of its population.
This Act does not affect the application of international Treaties, the law of the European Union, or bilateral Treaties.