Tag: Procedure

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The PIFFS v Al Wazzan litigation continues with disclosure order viz Swiss-held documents under English CPR, with consideration of prosecution risks under Swiss law.

I reported earlier on the jurisdictional issues in a case where PIFSS brings claims for sums totalling in the region of US$874 million, arising from the alleged corruption between 1994 and 2014 of its former Director General. In The Public Institution for Social Security v Al Wazzan & Ors [2023] EWHC 1065 (Comm), Henshaw J held early May that documents held in Switzerland must be disclosed, in application of disclosure rules under English civil procedure.

The disclosure concerns a large file of documents held by the Swiss Federal Prosecutor’s Office (SFPO)  arising from its investigations of Mr Al Rajaan and Ms Al Wazzan (Mr Al Rajaan’s widow) since 2012, and other documents held by Swiss-based entities or individuals, or located in Switzerland, or originating from and obtained under compulsion in Switzerland.

Disclosure was ordered, with a small caveat [161] which will see future specific measures (eg restriction of disclosure to counsel) be taken to ensure disclosure of the SFPO file documents to PIFSS does not create a risk of transmission to the State of Kuwait, which in turn might be viewed as sidestepping the State of Kuwait’s pending Mutual Legal Assistance (MLA) request to Switserland for the purpose of the continuing criminal proceedings in Kuwait.

Justice Henshaw’s lengthy considerations do justice to two restraints on disclosure, under English CPR for use in English proceedings. The principal approach is [43 ff; and [47] in particular with reference to Bank Mellat v HM Treasury [2019] EWCA Civ 449] that questions of disclosure and inspection are part of the law of procedure and are therefore matters of English law as the lex fori ; duties of confidentiality (which, if breached, may result in sanction) arising under foreign law do not provide an automatic basis to withhold disclosure and inspection. They are a matter for the judge’s discretion, and disclosure is only not ordered where the party shows that the foreign law is regularly enforced, so that the risk of prosecution is real.

[51] the judge holds that comity considerations are an independent element to consider, and in the process refers to its neat definition in Dicey’s 16th ed § 7-002:

“The United [States] Supreme Court famously said in Hilton v Guyot, a case on the recognition of foreign judgments: “‘Comity,’ in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.”

An interesting judgment raising several relevant issues (including one side-issue on the tardiness of the Hague Taking of Evidence rules).

Geert.

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Soriano v Forensic News. Court of Appeal confirms high bar to disciplining discovery forum shopping.

Soriano v Forensic News LLC & Ors [2023] EWCA Civ 223 deals with the discipline an English court should hand out to defendants trying to use foreign proceedings and their discovery rules, to assist them in the defence of a claim (here a libel claim) in England and Wales. (Defendants’ attempt at dismissing jurisdiction had earlier failed).

In a joint and fairly succinct opinion, Voss MR, Carr LJ and Warby LJ dismiss the contention that the defendants should be served with an anti-suit injunction (also refused at first instance by Murray J a mere 20 days back; this was a most swift appeal) to restrain them from continuing US proceedings. These had been initiated in the District Court for the Southern District of New York (the DCSDNY) on 6 December 2022. Defendants seek an order there requiring HSBC USA to produce two very broad categories of banking documents relating to Mr Soriano’s companies. Defendants here, claimants in the US, rely in 28 USC §1782 (a so-called 1782 application) allowing a US court to provide assistance to an applicant in gathering evidence in support of legal proceedings in a foreign court. It provides that: “[t]he district court … may order [a person] to … produce a document or other thing for use in a proceeding in a foreign … tribunal”, and “[t]he order may be made … upon the application of any interested person”.

The Court of Appeal relied like the judge on the grounds per South Carolina Insurance Co v. Assurantie Maatschappij “De Zeven Provincien” NV [1987] 1 AC 24 to find that defendants were not guilty  of “conduct which [was] oppressive or vexatious or which [interfered] with the due process of the court” in seeking the US order.

In essence, the Court supports the lawful exercise of evidence gathering and does not easily decide that use of foreign proceeding for same be considered oppressive.

Geert.

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Sedgwick v Mapfre Espana. On subrogation in Rome II, and yet again on its procedural carve-out (re: interest rates).

Sedgwick v Mapfre Espana Compania De Seguros Y Reaseguros Sa [2022] EWHC 2704 (KB) discusses the application of Article 19 Rome II on direct actions against insurers, and the procedural carve-out of the Regulation.

Claimant lives in Wales. At the time of the accident she was on her honeymoon, staying at the Hotel Blue Sea Callao Garden in Santa Cruz which was owned and operated by a company registered and incorporated in Spain. She was descending an inadequately lit concrete staircase when she fell and sustained severe fracture injuries to her left knee and to her right heel.

Spanish law is the governing law of the insurance contract/policy which provides the tortfeasor with the right of indemnity within the terms of the policy and that the claimant has, under Spanish law, a direct right of action against the insurer. Parties also agree that Spanish law applies per A4(1) Rome II.

The scope of the law applicable is set out in A15 Rome II, which reads in relevant part: “…the law applicable to non-contractual obligations under this Regulation shall govern in particular: (a) the basis and extent of liability including the determination of persons who may be held liable for acts performed by them; (b) the grounds for exemption from liability, any limitation of liability and any division of liability; (c) the existence, the nature and the assessment of damage or the remedy claimed;…”

A1(3) Rome II carves out all matters of procedure and evidence to the law of the forum court: “This Regulation shall not apply to evidence and procedure “. I have reported on the carve-out frequently (see eg here and linked postings there, or use search tag ‘evidence and procedure’).

On a technical side-note, Matthew Hoyle here (he also has a general excellent note on proving foreign law here) correctly notes a confusion with the judge [11] on the issue of proving foreign law, seeing as she conflates assumption of English law as the lex causae when the content of a suggested foreign law is not proven and pleaded (it was so in the case at issue), and assumption in certain circumstances, of the foreign law as being identical to English law.

Issues for determination, are:

i) the resolution of a series of questions relevant to the award of general damages (for non-pecuniary loss) under Spanish law; these are purely issues of Spanish law and of no interest to the blog.

ii) whether the claimant is able to pursue a claim for subrogated losses on behalf of her travel insurer. The contentious issue is whether the claimant herself is able to bring a claim for subrogated losses or whether the claim must be brought in a separate action by the insurer.

[60] if the claim is to be brought separately, it can no longer so be brought because it is now time-barred.

Defendant submits that the claim for those losses incurred by the travel insurer must be brought in accordance with Spanish law and that the proper person entitled to bring a claim against the defendant insurer under A43 Spanish Insurance Contract Act 50/1980 is the third party insurer, not the claimant, as those subrogated losses are losses of the third party payer.

Claimant submits that Spanish law is relevant only to the extent that, as the applicable law of the tort, it provides for recovery of expenses. Spanish law does not govern the relationship between the claimant and the travel insurer, nor the travel insurer’s rights of subrogation by means of the claimant’s claim under those policies. Those matters are regulated, it is argued, by the law governing the insurance policy, in this case, English law, consequential to A19 Rome II (“where a person (the creditor) has a non-contractual claim upon another (the debtor) and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether and the extent to which the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.”)

The issue therefore is whether the question of whether the insurer may bring a claim in the name of the insured (rather than by other means) a question of “whether, and the extent to which” the insurer is entitled to exercise the rights of the insured against the third party? Lambert J [73] says it is, as a matter of language and construction, and she also expresses it (less immediately convincing to my mind) as an issue of common sense:

‘Putting the matter another way, it would be distinctly odd if English law determined the right of subrogation and limits upon that right (e.g. the legal principle that there must be full indemnity before subrogated rights attach) but an important aspect of the English law of subrogation (namely that the claim may and must be brought in the name of the insured) may not apply depending on where loss is caused which is to be indemnified.’

Finally, iii) the appropriate rate of interest to apply to the damages award, whether the Spanish (penalty) rate of interest applies or a rate applied under s 35A [E&W] Senior Courts Act 1981. Clearly the issue is whether penalty interest rules are substantive rather than procedural: in the latter case, they are carved out from Rome II, and English law as the lex causae applies.

Troke v Amgen is referred to, and the judge in Swedgwick decides [101]

Whether the decision in Troke is binding upon me or not, I agree with its conclusion and the underlying reasoning which I endorse and follow.

and [102]

the penalty interest provisions are discretionary; they may be excluded if there is a good reason to do so and they are procedural in character.

In my review of Troke I noted its reasoning was unconvincing. Lambert J [101] adds more arguments here, and I find these more convincing, if not conclusive.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 4.8.

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Suppipat v Siam Bank. Unsatisfactory discussion of legal advice privilege and lex fori.

Suppipat & Ors v Siam Commercial Bank Public Company Ltd & Ors [2022] EWHC 381 (Comm) repeats (and indeed refers to) the inadequate discussion of applicable law and privilege in PJSC Tatneft v Bogolyubov which I discuss here.

The application is for an order prohibiting respondents from using or deploying in these proceedings certain documents covered by legal professional privilege and/or containing confidential information, copies of which the respondents obtained pursuant to subpoenas in Thailand.

It is not in dispute apparently [26] and in any event Pelling J would have concluded that whether a document is capable of being privileged is a question to be determined as a matter of English conflicts law by the lex fori, which in this case is English law. That follows not undisputedly from the Rome Regulation which applies to the proceedings as either acquired or retained EU law (it is not clear when the claim form was issued).

The next question that arises is whether the Documents should be treated as privileged in this litigation notwithstanding that they have been obtained by the respondents lawfully by operation of an order of a court of competent jurisdiction in Thailand. This question is discussed as one of an alleged breach of an obligation of confidence (the subpoena in Thailand does not mean that the documents have entered the public domain) and the law that should apply to that obligation which both parties suggest must be discussed under Rome II. Thai law according to the defendants ([38-39] an unjust enrichment /restitution claim under Article 10; alternatively locus damni under the general rule of Article 4 with Thailand as the locus damni, it being the place of disclosure) , however claimants maintain that the issue is to be resolved applying English law for essentially all the reasons set out in the authorities deciding that English law applies to the question whether a particular document is privileged or not.

 

 

Pelling J [40] ff agrees with the claimants and holds that even if Rome II were to apply, both A16 Rome II’s overriding mandatory law rule and A26’s ordre public rule would trump Thai law given the robust nature of legal advice privilege in English law. That statement leads to an incorrect application of both Articles (for starters, A26 requires case-specific, not generic application).

The Rome II discussion cuts many corners and is certainly appealable. The judge’s views put the horse before the cart. Neither Article 16 nor Article 26 are meant to blow a proper Rome II analysis out off the water. Nor as I flagged, does the judgment do justice to the proper application of A16 and 26.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.81.

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Johnson v Berentzen. The doubtful Pandya conclusions on service as lex causae confirmed.

Cressida Mawdesley-Thomas has overview of the facts and issues in Johnson v Berentzen & Anor [2021] EWHC 1042 (QB) here. Stacey J essentially confirms the conclusions of Tipples J in Pandya.

The case concerns the extent of the ‘evidence and procedure’ exclusion from the Rome II Regulation on applicable law in the event of non-contractual obligations.  For the reasons I outlined in my review of the latter (readers please refer to same), I continue to disagree. With counsel for claimant I would suggest Pandya wrongly interpreted A15(h) Rome II in concluding that the provisions of A15 (‘scope of the law applicable) are to be construed widely , and the evidence and procedure exclusion (not: ‘exception’), narrowly.

Something for the Court of Appeal to look into, I would suggest.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.79 ff.

 

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Duffy v Centraal Beheer Achmea. Interim payments qalified as procedural, not within the scope of Rome II.

Update 23 February 2021 see Gilles Cuniberti here on a related issue of the application of the lex causae to interim proceedings, with the French Supreme Court reversing decades of case-law to hold that interim measures are included in the lex causae, not subject to lex fori.

I am busy on many fronts and not complaining, yet I am sorry if some posts are therefore a little later than planned. A quick flag of Duffy v Centraal Beheer Achmea [2020] EWHC 3341 (QB) in which Coe J noted parties agreed that interim payments are included in the Rome II exemption of evidence and procedure: at 8:

The claim is brought in the English Court against a Dutch motor insurer and it is agreed that the law of the Netherlands applies to this claim in tort. The claimant, as a result of Dutch law has a direct right of action against the insurer and, following the decision in FBTO v Odenbreit [2007] C 463-06, the jurisdiction of the English Court is not an issue. The law of the Netherlands applies (pursuant to Article 41(1) of the Rome II Regulation on applicable law in tort (Regulation 864/2007)). Dutch law will govern limitation, breach of duty and causation as well as the existence of, the nature of and the assessment of damages to which the claimant might be entitled. Matters of procedure and evidence are nonetheless reserved to the forum court (see Article 15 (c) of the Rome II Regulation and Article 1(3)). This is an application for an interim payment which is a procedural application and thus governed by English law. However, when it comes to any assessment of the damages to which the claimant might be entitled on which to base the interim payment decision, Dutch law has to be applied.

Coe J has little reason to disagree however I imagine she would have entertained the issues more had the distinction between Dutch and English law on the interim payment issue been materially different, hence had counsel made diverging noise. For as I have signalled before, the extent of the evidence and procedure exemption is not clear at all.

Geert.

EU Private International Law. 3rd ed. 2021, Chapter 4, Heading 4.8.

 

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Troke v Amgen. On lex causae for interest and the procedural exception of Rome II.

Troke & Anor v Amgen Seguros Generales Compania De Seguros Y Reaseguros SAU (Formerly RACC Seguros Compania De Seguros Y Resaseguros SA) [2020] EWHC 2976 (QB) is an appeal against a decision of the country court at Plymouth. It has a case-name almost as long as the name of some Welsh villages (that’s an observation, I mean no disrespect. I live in a country which has villages names such as Erps-Kwerps; but I stray).

For brevity’s sake I suspect it is best shortened to Troke v Amgen. The case involves only the rate of interest awarded on what were otherwise agreed awards of damages against the defendant insurer  to the  claimant, victims of a road traffic accident in Spain.

Spanish law is lex causae. Rome II like Rome I excludes “evidence and procedure…”. The extent of this exception is not settled as I have discussed before. Of particular recurring interest is its relation with Article 15 ‘scope of the law applicable’ which reads in relevant part for the case

 “15. The law applicable to non-contractual obligations under this Regulation shall govern in particular: (a) the basis and extent of liability… (…) (c) the existence, the nature and the assessment of damage or the remedy claimed; (d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;”

Griffiths J refers in particular to Actavis v Ely Lilly and to KMG v Chen, and at 45 holds obiter that were the interest a contractual right, it would clearly not be covered by Rome I’s exclusion for procedural issues seeing as it would then clearly amount to a substantive right under the contract.

At play here however is Rome II. Griffiths J first refers to a number of inconclusive precedent on the interest issue under various foreign applicable laws, to then note at 65 ff that the judge in the county court whose findings are being appealed, was informed in the expert reports that the interest sought under Spanish law were not mandatory ones but rather discretionary ones: the terminology used in the expert report which determined that decision was ‘contemplates’.

This leads Griffiths J to conclude ‘I reject the argument that the Expert Report was describing a substantive as opposed to a procedural right to interest. It follows that the Judge was right not to apply the Spanish rates as a matter of substantive right to be governed by the lex causae.’

This is most odd. It could surely be argued that a discretionary substantive right is still a substantive right, and not a procedural incident. Whether the right is mandatory or discretionary does not in my view impact on its qualification as being substance or procedure.

The judge’s findings

It follows that I agree with the Judge that the award of interest in this case was a procedural matter excluded from Rome II by Article 1(3); that there was no substantive right to interest at Spanish rates to be awarded to the Claimants under the lex causae; that interest could be awarded under section 69 of the County Courts Act 1984 as a procedural matter in accordance with the law of England and Wales as the lex fori; and that he was entitled to award interest at English and not Spanish rates accordingly.

in my view surely therefore most be appealable.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.8.

Third edition forthcoming February 2021.

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The governing law of privilege. The Dutch courts in re Shell.

This item has been in the queue a long time – apologies. Thank you Marco Vogels for reporting end of 2019 on the Rotterdam court’s approach re privilege in ECLI:NL:RBROT:2019:7856, a criminal prosecution involving Shell. Marco’s report is most complete and I am happy to refer.

Compare the Dutch approach to my earlier reports on the issue in England and in the US. The Rotterdam court takes the law of the place of establishment of the (self-employed) solicitors as the connecting factor, ditto for in-house lawyers (on which The Netherlands takes an unusual (bu continental European standards) position of professional privilege). However the court also held that privilege falls away for the whole in-house legal department and all its lawyers, foreign established or not, if the head of legal is member of the Executive Committee.

Geert.

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Pandya v Intersalonika. Plenty of (appealable?) things to chew on re limitation periods and Rome II.

Many thanks 2TG for initially flagging the judgment, and for Maura McIntosh and colleagues not just for further reviewing it but also for sending me copy: for the case has not yet appeared on the usual sites.

In Pandya v Intersalonika [2020] EWHC 273 (QB), Tipples J held that proceedings were time-barred in accordance with Greek law as the lex causae, where the claim form was issued in the English courts before the expiry of the applicable Greek limitation period, but was not served until after that period had expired.

The claim arises out of a road traffic accident that happened in Kos, Greece on 29 July 2012. The claimant is a UK national and was on holiday in Kos with her family when she was struck by a motorcycle as she was crossing the road. The claimant suffered a severe traumatic brain injury and was then aged fifteen. Defendant is the Greek-registered insurance company which provided insurance to the motorcyclist or the motorcycle that he was riding.

That claimant is entitled to sue the insurer in England is not of course, contrary to Tipples J passing reference, a result of Rome II but rather of Brussels IA. Jurisdiction however at any rate was not under discussion.

Defendant then relies on A15(h) Rome II to argue a time bar under Greek law, the lex locus damni: service of the claim is a rule of Greek law in relation to limitation and a claim has to be issued and served to interrupt the limitation period. This means that the requirement of service cannot be severed, or downgraded, to a step which is simply governed by the rules of civil procedure under English law. Claimant by contrast argues that service of the claim is a point of pure procedure, which falls squarely within Article 1(3) and is governed by the rules of civil procedure under English law.

At 25 ff Tipples J discusses the issue (I highlight the most relevant arguments; compare nb with the situation under the Rome Convention in Mineworkers):

  • starting with the principle of autonomous interpretation;
  • further, a need for wide interpretation of A15 which she derives from its non-exhaustive character. I do not agree that non-exhaustive listings necessarily equate broad interpretations;
  • thirdly the need, by contrast, to interpret A1(3) narrowly ‘because it is an exception’ to the general rule of lex locus damni in A4. This too I disagree with: A1(3) states it ‘it shall not apply to evidence and procedure, without prejudice to Articles 21 and 22’ (which concern formal validity and burden of proof). In my view A1(3) like A1(2) defines the scope of application, like A1(2). It is listed separately from the issues in A1(2) for unlike those issues, part of the excluded subject-matter is partially brought back into the scope of application. If anything therefore needs to be interpreted restrictively, it is the partial cover of evidence and procedure.  Seemingly between parties however this was not disputed.
  • Further support is found in Dicey & Morris 15th ed., which refers to Wall v Mutuelle de Poitiers a case which discusses the issues somewhat, yet if anything more in support of English law applying to the discussion in Pandya rather than the other way around. (A reference further on in Andrew Dickinson’s Rome II Volume with OUP in my mind, too, further underlines the opaqueness of the A1 /A15 distinction and does not clearly lend support pro the lex causae argument).
  • Fifth, predictability and certainty are cited in support however how these gazump exclusions from the scope of application is not clear to me.
  • Finally PJSC Tatneft v Bogolyubov is referred to but dismissed as irrelevant (which surprises me).

Held: the claim was time-barred and therefore dismissed.

I would suggest there is plenty of scope for appeal here.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 3.

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KMG v CHEN. The common law reflective loss rule held as being substance, not procedure, and not qualifying as either lois de police or ordre public under Rome II.

KMG International NV v Chen & Anor [2019] EWHC 2389 (Comm)  entertains a claim made in tort, based on a breach of duties allegedly owed as a matter of Dutch or alternatively English law. The wrongful acts of the Defendants are said to have resulted in a diminution of the assets of DPH, against which KMG had won a substantial arbitration award. It is asserted that the Defendants caused the DP Group to part with a valuable asset, namely the shares in a German company, which company was part of the DP Group. It is asserted that the purpose of the transfer was to disable DPH from satisfying the arbitration award.

The core legal issue that would apply under English law are the principles of reflective loss (‘RL’). Defendants argue that the English law rules as to reflective loss barred the Claimant’s claims, even under Dutch law, because: (1) The RL rule was a rule of procedure and not substance and was accordingly governed by the lex fori and not the lex causae; (2) The RL rule was a mandatory overriding rule of English law within the meaning of Article 16 of Rome II; (3) Any derogation from the RL rule would be manifestly incompatible with English public policy within the meaning of Article 26 of Rome II.

A first issue is whether the English RL rule is one of procedure that would fall outside the scope of Rome II. Reference is made on this issue to Actavis v Eli Lilly, with Hancock J at 36 deciding the RL rule is one of substance. I would agree with his suggestion that unlike the discussion of DNI requirements in Actavis, the RL ‘is not a precondition to an action, but is a bar to recovery of a particular type of loss. In my judgment, the RL rule is clearly one which affects the substantive rights and remedies of the Claimant and is not a procedural rule.’ However I disagree with his suggestion (for which he finds support in EC suggestions made in the travaux) that the procedural provision in A1(3) needs to be applied restrictively: A1(3) is not an exception: it is a determination of scope.

Attention then turns at 45 ff to whether the RL could count as overriding mandatory law under A16 Rome II. At 50 Hancock J holds that there is simply no support in any authority for holding that that the RL would meet the high bar of qualifying as lois de police. At 57 he then judges that the RL rule does not meet the requirements to qualify as ordre public either, with due refence to CJEU authority on the exceptional nature of ‘ordre public’ under EU conflict of laws.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.8, Heading 4.10.

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