Posts Tagged Owusu

Kennedy v National Trust for Scotland. Applying forum non conveniens within the UK. And how to make a case ‘international’.

In [2017] EWHC 3368 (QB) Kennedy v National Trust for Scotland, Eady J considers two important (for this blog at least) issues leading to dicta: when a prima facie domestic case may turn out to be international really; and following his ruling on same, the application of forum non conveniens intra-UK. I reviewed the latter issue, also intra-UK, in my analysis of Cook & McNeil (v Virgin & Tesco).

First the issue of the case being purely domestic or international. It is only when it is the latter, that the Brussels I Recast regime is engaged and, per Owusu, forum non conveniens excluded.

The Claimant, who is domiciled in Scotland, seeks damages and other remedies in this jurisdiction against the National Trust for Scotland in respect of a number of allegations published in both jurisdictions as well as in Italy, France and Brazil. He relies not only on defamation but also on negligence and on alleged breaches of the Data Protection Act 1998. The dispute arises over the Claimant’s attendance at Craigievar Castle in Aberdeenshire on 23 February 2012, when he took a series of photographs of a naked model for commercial purposes. He claims that he did so pursuant to an oral contract, entered into with a representative of the Defendant, which expressly authorised that activity. Some years later, this episode came to the attention of the daughter of Lord Sempill who had gifted the castle to the Defendant (more than 50 years ago) and she protested that it had been used for the purpose of taking nude photographs. Her remarks caught the attention of a journalist who made enquiries and was given a statement by or on behalf of the Defendant on 24 February 2016 which was reported in the Scottish Mail on Sunday of 28 February. Thereafter, the Defendant also issued a press release which denied that the taking of the photographs had been authorised. This was sent to a number of media outlets including a reporter on the (London) Metro newspaper.

Claimant suggests that this is not “a purely domestic case” by referring to re-publication of the defamatory words in France and Italy. At 51 Eady J, with reference to the aforementioned Cook v Virgin Media, suggests the purpose of the regulation, and of the rule of general jurisdiction in particular, is to regularise issues of jurisdiction as between different states, and that no such question arises here, because the only potential competition is between the courts of Scotland and England & Wales (i.e. internal to the United Kingdom). I do not think this is the effect of CJEU precedent, Lindner in particular, as well as Maletic and Vinyls Italia (the latter re Rome I). The potential competition between the England and Scotland only arises if, not because, the Brussels I Regulation does not apply: the High Court’s argument is circular. In Linder and in Maletic, the CJEU upheld the application of Brussels I even though competing jurisdiction elsewhere in the EU was only potential, not actual. Given the potential for jurisdiction with courts in France and Italy, I would suggest the Lindner logic applies.

Eady J though applies forum non conveniens to establish Scotland as the more appropriate forum in the UK, and to stay the English case.

He then obiter (had FNC not applied), at 86 ff suggests the court develop a novel sub-national model of Shevill, such that only courts of the sub-national place where the publisher is domiciled would have jurisdiction to award global damages – and all other courts within the United Kingdom would be restricted to awarding damages for harm occurring within their relevant regions. Importantly, even for post-Brexit use, Eady J suggest the importation of CJEU case-law in applying English law of conflicts is appropriate for Parliament has approved rules in parallel to those under the Recast Regulation.

A little gem of a judgment.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.2.1.

, , , , , , , , , , , ,

Leave a comment

Bestolov v Povarenkin. On the determination of domicile (and yes, Owusu strikes again).

Many thanks to Andrew Savage and Nick Payne for flagging [2017] EWHC 1968 (Comm) Bestolov v Povarenkin a little while ago, and for sending me copy of the judgment at the time. Apologies for late reporting: frustratingly even at gavclaw we cannot always devote the amount of time to the blog we would wish. Dr Maganaris in the meantime also has summary here.

As readers no doubt are aware, the Brussels I Recast Regulation (Article 62) does not define ‘domicile’: it defers to national private international law on the issue. The Civil Jurisdiction and Judgments Order 2001 establishes that a person is domiciled in England for the purpose of the Brussels Regulation (recast) if: the person is “resident” in England; and (cumulatively) the person has a “substantial connection” to England. Bryan DJ takes us through the relevant (and often colourful) precedent and notes, importantly, at 28 that the consequence of the English rules is that the same person can be resident in two different jurisdictions at the same time. At 44, he summarises with a list of criteria, and decides on the facts of the case that Mr Povarenkin is indeed domiciled in England (the substantial connection test having been more easy to determine than that of residence).

Subsequently the High Court reviews at length whether there was a valid choice of court agreement under Article 25 of the Regulation – which at this jurisdictional stage of the proceedings Bryan DJ decides there was not (choice of law for the relevant contracts being English law, was justifiably not considered definitive in this respect), at least not clearly. Obiter, the judge reviews forum non conveniens, at lenght in fact (and in a very clear way with a keen eye on relevant precedent as well as court practice in England) however he holds both before and after the obiter that evidently given Owusu, forum non conveniens has no calling.

A well written judgment, the approach of which on domicile evidently goes beyond having relevance merely for the English courts: for under the Regulation, courts in other Member States, too, may have to consider whether parties are domiciled in an EU Member State other than their own including, for the time being, the United Kingdom.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.3, Heading 2.2.14.5.

, , , , , , , , , , , ,

Leave a comment

Unilever. Accepting CSR jurisdiction against mother companies not the High Court’s cup of tea.

Postscript 13 June 2017 for a similar scenario in the Italian courts (hearings pending) see here: Ikebiri v ENI.

After  Shell/Okpabi, the High Court has now for the second time in 2017 rejected jurisdiction to be established against the foreign subsidiary (here: in Kenya) using the mother company as an anchor. In [2017] EWHC 371 (QB) AAA et al v Unilever and Unilever Tea Kenya ltd, Unilever is the ultimate holding company and registered in the UK. Its subsidiary is a company registered in Kenya. It operates a tea plantation there. Plaintiffs were employed, or lived there, and were the victims of ethnic violence carried out by armed criminals on the Plantation after the Presidential election in Kenya in 2007. They claim that the risk of such violence was foreseeable by both defendants, that these owed a duty of care to protect them from the risks of such violence, and that they had breached that duty.

Laing J unusually first of (at 63 ff) all declines to reject the case on ‘case management’ grounds. Unlike many of her colleagues she is more inclined to see such stay as ignoring ‘through the back door’ Owusu‘s rejection of forum non conveniens.  I believe she is right. Instead the High Court threw out the case on the basis that the claims, prima facie (on deciding jurisdiction, the Court does not review the substantial merits of the case; a thin line to cross) had no merit. Three issues had to be decided:

i) By reference to what law should the claim be decided? This was agreed as being Kenyan law.

ii) Are the criteria in Caparo v Dickman [1990] 2 AC 605 satisfied? (A leading English law case on the test for the duty of care). The relevance of English law on this issues comes about as a result of Kenyan law following the same Caparo test: as I have noted elsewhere, it is not without discussion that lex fori should apply to this test of attributability. Laing J held that the Caparo criteria were not fulfilled. The events were not as such foreseeable (in particular: a general breakdown in law and order). Importantly, with respect to the holding company and as helpfully summarised by Herbert Smith:

  • the pleaded duty effectively required the holding to ensure that the claimants did not suffer the damage that they suffered, and not merely to take reasonable steps to ensure their safety;
  • the pleaded duty also effectively imposed liability on that holding for the criminal acts of third parties, and required it to act as a “surrogate police force to maintain law and order”; and
  • such a duty would be wider than the duty imposed on the daughter, as the actual occupier of the Plantation, under the Kenyan Occupiers’ Liability Act

At 103, Laing J discussed and dismissed plaintiff’s attempts at distinguishing Okpabi. In her view, like in Shell /Okpabi, the mother’s control is formal control exercised at a high level of abstraction, and over the content and auditing of general policies and procedures. Not  the sort of control and superior knowledge which would meet the Chandler test.

iii) Are the claims barred by limitation? This became somewhat irrelevant but the High Court ruled they were not. (This, under the common law of conflicts, was a matter of lex causae: Kenyan law, and requiring Kenyan expert input. Not English law, as the lex fori).

The case, like Okpabi, is subject to appeal however it is clear that the English courts are not willing to pick up the baton of court of prefered resort for CSR type cases against mother companies.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

, , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Finding SHELLter. The High Court on CSR and applicable law in Okpabi.

Where does one look first? : as I reported last week, Ms Kiobel is now taking her US case to The Netherlands (this case essentially involves human rights), at a time when Shell is still pursued in the Netherlands by Milieudefensie, in a case involving environmental pollution in Nigeria.

That latter case now is being mirrored in the High Court in London in Okpabi v Shell [2017] EWHC 89 (TCC). The dual proceedings are squarely a result of the split listing of Shell’s mother company, thus easily establishing jurisdiction in both The Netherlands and London, under Article 4 Brussels I Recast.

The only preliminary issue which the High Court had to settle at this early stage was whether Shell’s holding company, established in the UK, can be used as anchor defendant for proceedings against Shell Nigeria (Shell Petroleum Development Company of Nigeria – SPDC). It held that it could not. The questions dealt with are varied and listed as follows:

1. Do the claimants have legitimate claims in law against RDS?

2. If so, is this jurisdiction the appropriate forum in which to bring such claims? This issue encompasses an argument by RDS that it is an abuse of EU law for the claimants to seek to conduct proceedings against an anchor defendant in these circumstances.

3. If this jurisdiction is the appropriate forum, are there any grounds for issuing a stay on case management grounds and/or under Article 34 of the Recast Regulation in respect of the claim against RDS, so that the claim against SPDC can (or should) proceed against SPDC in Nigeria?

4. Do the claims against SPDC have a real prospect of success?

5. Do the claims against SPDC fall within the gateway for service out of the jurisdiction under paragraph 3.1(3) of CPR Practice Direction 6B?

This issue requires consideration of two separate sub-issues, namely (a) whether the claims against RDS involve a real issue which it is reasonable for the Court to try; and (b) whether SPDC is a necessary or proper party to the claims against RDS.

6. Is England the most appropriate forum for the trial of the claims in the interests of all parties and for the ends of justice?

7. In any event, is there a real risk the Claimants would not obtain substantial justice if they are required to litigate their claims in Nigeria?

 

In detailed analysis, Fraser J first of all seems to accept case-management as a now established route effectively to circumvent the ban on forum non conveniens per Owuso (see Goldman Sachs and also reference in my review of that case, to Jong and Plaza). Over and above case-management he refers to potential abuse of EU civil procedure rules to reject the Shell Nigeria joinder. That reference though is without subject really, for the rules on joinders in Article 8 Brussel I recast only apply to joinder with companies that are domiciled in the EU – which is not the case for Shell Nigeria.

Of specific interest to this blog post is Fraser J’s review of Article 7 Rome II: the tailor made article for environmental pollution in the determination of lex causae for torts: in the case at issue (and contrary to the Dutch mirror case, which is entirely being dealt with under residual Dutch conflicts law) Rome II does apply to at least part of the alleged facts. See here for my background on the issue. That issue of governing law is dealt with at para 50 ff of the judgment.

For environmental pollution, plaintiff has a choice under Article 7 Rome II. Either lex damni (not appealing here: for Nigerian law; the judgment discusses at some length on the extent to which Nigerian law would follow the English Common law in issues of the corporate veil), or lex loci delicti commissi. This, the High Court suggest, can only be England if two questions are answered in the affirmative (at 79). The first is whether the parent company is better placed than the subsidiary to avoid the harm because of its superior knowledge or expertise. The second is, if the finding is that the parent company is better placed, whether it is fair to infer that the subsidiary will rely upon the parent. With reference to precedent, Fraser J suggest it is not enough for the parent company simply to be holding shares in other companies. (Notice the parallel here with the application of ATS in Apartheid).

The High Court eventually holds that there is no prima facie duty of care that can be established against the holding company, which would justify jurisdiction vis-a-vis the daughter. At 106, the Court mirrors the defendant’s argument: it is the Nigerian company, rather than the holding, that takes all operational decisions in Nigeria, and there is nothing performed by the holding company by way of supervisory direction, specialist activities or knowledge, that would put it in any different position than would be expected of an ultimate parent company. Rather to the contrary, it is the Nigerian company that has the specialist knowledge and experience – as well as the necessary licence from the Nigerian authorities – to perform the relevant activities in Nigeria that form the subject matter of the claim. … It is the specialist operating company in Nigeria; it is the entity with the necessary regulatory licence; the English holding company is the ultimate holding company worldwide and receives reports back from subsidiaries.

 

Plaintiffs have been given permission to appeal. Their lawyers have indicated to rely heavily on CJEU precedent, particularly T-343/06 Shell v EC. This case however concerns competition law, which as I have reported before, traditionally has had a theory on the corporate veil more easily pierced than in other areas. Where appeal may have more chance of success, I believe is in the prima facie character of the case against the mother company. There is a thin line between preliminary assessment with a view to establishing jurisdiction, and effectively deciding the case on the merits. I feel the High Court’s approach here strays too much into merits territory.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

 

 

, , , , , , , , , , , , , , , , , , , ,

Leave a comment

Anti-suit once again climaxes outside the Brussels I (Recast) context. The High Court in Crescendo Maritime.

As I have reported before, English practice is to continue using anti-suit injunctions outside of the Brussels I Regulation, in particular to support arbitration. Recent application was made in Crescendo Maritime, restraining litigation in China. Teare J confirmed among others (per Toepfer v Cargill) that forum non conveniens (Chine was the natural forum for litigation in ordinary) has little relevance in the context of arbitration clauses.

Kennedys have background to the case (essentially, backdating of a shipbuilding contract to avoid newly introduced international rules on tank coatings). The considered use of anti-suit once again underlines the importance of tools of civil procedure to support global arbitration practices.

Geert.

European private international law, second ed. 2016, Chapter 2, Heading 2.2.2.10

, , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Away to Scotland with thee! CA applies forum non conveniens to intra-UK conflicts in Cook & McNeil (v Virgin & Tesco)

A great example of internal forum shopping and the application of forum non conveniens in the Court of Appeal. (Just before Christmas. I am still hacking away at my end-of-year queue).

Claimants claim damages for personal injuries they alleged they sustained in accidents in Scotland as a result of the negligence and/or breach of statutory duty of the defendants. The claims were issued in the Northampton County Court. The registered offices of the defendants are situated in England and Wales. Both claimants are domiciled in Scotland. Liability has been admitted in the case of Cook, but denied in the case of McNeil.  Since the claims related to accidents in Scotland, the claims were allocated to Carlisle County Court, which is the court geographically closest to Scotland. The claims were struck out on forum non conveniens grounds, with Scotland being the appropriate forum.

The most important issue that arises on these appeals (and the reason why Tomlinson LJ gave permission for a second appeal) is whether the doctrine of forum non conveniens can apply in a purely domestic context where the competing jurisdictions are England and Scotland. Put simply, the question is: does the English court have the power in such a case to stay or strike out a claim on the ground that the natural and more appropriate forum is Scotland?

As Floyd MR notes (at 7) it is surprising that there was no authority on this point.

He correctly holds that the ‘international element’ required for the Brussels I regime to apply, as it did in Owusu and Maletic  (but also Lindner) is absent in the case at issue. There is nothing in the facts which renders the case international in the Brussels I (Recast) sense.  Relevant precedent which did have some calling was Kleinwort Benson, Case C-346/93, in which the CJEU refused to interpret the (then) Brussels Convention in a purely domestic UK situation, even if the internal UK rules were modelled on the Brussels regime.

Forum non conveniens could be applied. Though not under appeal, Floyd MR does suggest that in his view the claim in which liability was admitted (Cook), should not have been struck out but rather stayed under the relevant rules.

Geert.

, , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

Plaza v The Law Debenture Trust. The Owusu hall of mirrors is ever more reflexive.

There is an obvious downside to the European Court of Justice’s judicial economy. The Court often leaves unanswered many questions asked by national courts without an answer to them being strictly necessary for the case at hand. Evidently quite a few of those resurface in later practice. Owusu is a case in point. Many postings on this blog have entertained the unanswered questions left by the ECJ’s seminal rejection of Forum Non Conveniens. UK courts in particular have leapt on the opportunity to distinguish Owusu, effectively now leading to a fairly narrow context in which Owusu is applied. As recently as Jong v HSBC on which I reported last week, the High Court professed sympathy for vacating a case pending in the UK and having it joined to proceedings in Monaco, on ‘case management’ grounds.

In Plaza v The Law Debenture Trust, Proudman J dealt with a UK fallout of longstanding litigation inter alia in Australia, following the insolvency of the Australian Bell group in the 1990s. Curacao is COMI. Secondary or ancillary proceedings were opened in Australia. A variety of litigation mostly concerning priority of claims and timely (or not) execution of securities, led among others to a 2013 Deed of Settlement between parties to the current litigation. The Law Debenture trust (LDTC) is trustee for a number of bonds issued by Bell, some of which are held by Plaza (these bonds contain a non-exclusive choice of court in favour of England). Others are held inter alia by the Insurance Commission of Western Australia (ICWA).

The 2013 Deed contains an exclusive choice of court clause in favour of Western Australia. Plaza, incorporated in Curacao, sues LDTC, domiciled in the UK, in England, basically questioning its suitability as a trustee for the bonds, citing alleged conflicts of interest (LDTC may or may not be acting under instruction of ICWA).

Proudman J essentially had to decide whether Article 23 (now Article 25) of the Jurisdiction Regulation in its original version (the recast does not apply) ought to be applied reflexively (protecting choice of court in favour of non-EU courts); alternatively, whether Article 28 of the same Regulation (the lis alibi pendens rule) may be so applied; and what the impact of the ECJ’s rejection of forum non conveniens is on this all.

Ferrexpo in particular assisted her in holding that reflexive application of Article 23 (now 25) of the Brussels I Regulation is not barred by Owusu. The main argument for this approach lies in the judicial economy which I cite above: the ECJ was asked but did not entertain the question. Moreover Article 23 is a more dominant rule in the Regulation than Article 2 (now 4)’s rule referring to domicile of the defendant: a mandatory exception to the rule of Article 2 rather than, in the words of Proudman J, a discretionary exception such as forum non conveniens.

Subsidiarily, the High Court also suggests Article 28’s lis alibi pendens rule ought to apply reflexively, although it expressly suggests more discussion of that point is needed and the Article need not be laboured in the case at issue, given its finding on Article 23.

To heap further pressure on the Owusu pile, a further potential for undermining finding in Owusu is suggested in the shape of ‘case management powers’, also suggested in Jong and hinted at as potentially introducing forum non conveniens through the back door.

With Plaza v Debenture, application of Owusu by the English courts now is so distinguished, arguably little is left of the ECJ’s original intentions. One assumes: for as I noted above, judicial economy allowed national courts to be creative in their application of the rule. The issue is bound to end up again at the ECJ at some point.

Geert.

 

, , , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a comment

%d bloggers like this: