Jamieson v Wurttemburgische Versicherung. On being seized for lis alibi pendens purposes, and on whether the protected categories regimes ought to gazump torpedo actions.

Jamieson v Wurttemburgische Versicherung AG & Anor [2021] EWHC 178 (QB) has been in my draft folder for a while – Master Davison refused an application for a stay on the basis of A29 Brussels I’a’s lis alibi pendens rule, holding that the issue of which court was being seized first, was properly sub judice in the German courts, as is the issue whether litigation subject to the protected categories, should rule out a stay in cases where the weaker party is being disadvantaged.

James Beeton has the background to the case here. Claimant was injured in a road traffic accident in Munich. He was working as a commodities broker for the second defendant. He was attending the Oktoberfest with clients, whom he was entertaining. He was walking from the beer hall to his hotel. He crossed a busy highway and was struck by a taxi, sustaining very severe injuries. The precise circumstances of the collision are in dispute. The taxi was insured by the first defendant, against whom the claimant has a direct right of action.

I tell students and pupils alike that too strong a hint of judicial action in pre-litigation action may trigger a torpedo suit in a court not preferred by client. That is exactly what happened in this case. In pre-action correspondence the insurers for the taxi were asked to confirm that they would not issue proceedings in another jurisdiction – to which they never replied other than by issuing proceedings in Germany for a negative declaration, i.e. a declaration that they were not liable for the accident. Those proceedings had been issued on 18 July 2017. Claimants then issued protectively in England on 10 May 2018. The to and fro in the German proceedings revealed that the correct address for the English claimant was not properly given to the German courts until after the English courts had been seized. 

Hence two substantive issues are before the German courts: when were they properly seized (a discussion in which the English courts could formally interfere using A29(2) BIa); and if they were seized first, is A29 subordinate to the protected categories’ regime: for if the German torpedo goes ahead, claimant in the English proceedings will be bereft of his right to sue in England.

The suggestion for the second issue is that either in Brussels Ia, a rule needs to be found to this effect (I do not think it is there); or in an abuse of EU law (per ia Lord Briggs in Vedanta) argument (CJEU authority on and enthusiasm for same is lukewarm at best).  Despite Master Davison clear disapproval of the insurer’s actions at what seems to be an ethical level, he rules out a stay on the basis of comity and of course CJEU C-159/02 Turner v Grovit: the English High Court must not remove a claim from the jurisdiction of the German courts on the basis of abuse of EU law before those courts.

A most interesting case on which we may yet see referral to the CJEU – by the German courts perhaps.

Geert.

EU Private International Law, 3rd ed 2021, Heading 2.2.9.4, 2.2.15.1.

Markt24: CJEU emphasises predictability of place of habitual employment.

There is a benefit to the pace of work becoming so hectic that I cannot post on CJEU case-law swiftly: others have analysis to which I can refer. In the case of CJEU C-804/19 BU v Markt24 GmbH, Anna Wysocka-Bar has posted analysis this morning (Opinion Saugmandsgaard Øe here).

BU whose place of residence is at Salzburg (Austria) signed an employment contract for carrying out cleaning work in Munich (Germany) for Markt24 GmbH, whose registered office is also located in Munich. The contract was signed in a bakery in Salzburg, where Markt24 also had an office. BU was never allocated any work, the employment contract was terminated and BU claims outstanding wage at the Landesgericht Salzburg.

The CJEU refers to Holterman to define employment [25] and holds [26] that the presence of a contract of employment is relevant for triggering the protective regime: not its actual exercise, at least if the lack of performance of the contract is attributable to the employer [28].

This issue was not sub judice however reasoning mutatis mutandis I would suggest the attributability or not to the employer be subject to the putative lex loci laboris per A8 Rome I.

Having established that A21 BIa applies, the question is how a ‘‘place where or from where the employee habitually carries out his work’ may be determined if no work has been carried out. At 41:

in the case where the contract of employment has not been performed, the intention expressed by the parties to the contract as to the place of that performance is, in principle, the only element which makes it possible to establish a habitual place of work (…) That interpretation best allows a high degree of predictability of rules of jurisdiction to be ensured, since the place of work envisaged by the parties in the contract of employment is, in principle, easy to identify

In casu, that place is Munich albeit [46] Salzburg might also still be an option given as A20 BIa makes A7(5)’s branch jurisdiction applicable (“as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place where the branch, agency or other establishment is situated”). Whether the conditions for that Article apply, is for the court at Salzburg to determine.

The CJEU’s emphasis on predictability in my view also means that if a place is agreed yet the employee, without agreement from the employer, de facto carries out the work elsewhere, the agreed place must take precedent.

The CJEU also holds [34] that the employment title of BIA exhaustively harmonises jurisdiction: more favourable national CPR rules (in casu granting jurisdiction to the employee’s residence and /or place of payment of the remuneration) become inoperable.

An important judgment.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.278 ff.

Not in a gambling mood. CJEU in Peil confirms dynamic interpretation of BIa consumer title, and the Petruchová /Reliantco approach towards knowledge of the market.

Update 15 December 2021. Tobias Lutzi has concurring analysis here. Since he refers to me, we may now have started a renvoi vortex that, with some luck, wil swallow 2020 whole.

The CJEU held last week in C-774/19 AB and BB v Personal Exchange International Limited. I propose for the sake of our memories that we call it Personal Exchange International Limited or even PEIL. (No English version of the judgment available at the time of writing).

May an online poker playing contract, concluded remotely over the internet by an individual with a foreign operator of online games and subject to that operator’s general terms and conditions, also be classified as a contract concluded by a consumer for a purpose which can be regarded as being outside his trade or profession, where that individual has, for several years, lived on the income thus obtained or the winnings from playing poker, even though he has no formal registration for that type of activity and in any event does not offer that activity to third parties on the market as a paid service?

The case echoes Schrems, Petruchová and Reliantco and the CJEU refers to the two former extensively.

At 21 the referring court had signalled the linguistic difference in e.g. the Slovenian and the English version of Article 17 BIA (A15 in BI which is discussed in the judgment), where mention is made of elements over and above the  use of ‘professional’ in the other language versions (e.g ‘trade and profession’ in the English version). The CJEU at 27 refers to the classic collective authentic force of the various language versions to dismiss paying too much attention to this difference.

With reference to Petruchová, the Court at 23 dismisses the relevance of whether the player’s winnings allow him to earn a living. Since the player does not beforehand know those winnings, the consumer title would become unpredictable which is of course a big no-no.

At 37 ff the intimate knowledge of the market is dismissed, too, with reference to Schrems: for this would make the title too dependent upon the subjective situation of the individual.

At 41 ff the Court does reiterate the dynamic interpretation of the title per Schrems (reminder: that has only so far been held in the direction of losing the protection one once has a consumer).

Finally, the frequency and length of play does not constitute a singularly relevant criterion either (at 46), even if they can be taken into account. However the Court confusingly (and unlike eg in  Salvoni) does here refer to substantive consumer law in which it has held (eg in C‑105/17 Kamenova) that these elements do play some role.

All in all a fairly standard re-emphasis of earlier case-law. The referring court is asked to do the remaining math itself.

Geert.

EU Private International Law, 3rd ed. 2021, 2.235 ff.

 

 

 

Weco projects: on Yachts lost at sea, anchor jurisdicton (that’s right), lis alibi pendens, carriage, ‘transport’ and choice of court.

In Weco Projects APS v Piana & Ors [2020] EWHC 2150 (Comm),  Hancock J held on a case involving Brussel Ia’s consumer title, including the notion of contract of ‘transport’, Article 25’s choice of court regime, and anchor jurisdiction under Article 8(1) BIa.

The facts of the case are complex if not necessarily complicated. However the presence of a variety of parties in the chain of events led to litigation across the EU. Most suited therefore to be, as WordPress tell me, the 1000th post on the blog.

For the chain of events, reference is best made to the judgment itself. In short, a Yacht booking note, with choice of court and choice of law was made for the Yacht to be carried from Antigua to Genoa. Reference was also made to more or less identical standard terms of a relevant trade association. A clause was later agreed with the identity of the preferred Vessel to carry out the transfer, followed by subcontracting by way of a Waybill.

The Yacht was lost at sea. Various proceedings were started in Milan (seized first), Genoa and England.

At 21, Hancock J first holds obiter that express clauses in the contract have preference over incorporated ones (these referred to the trade association’s model contract), including for choice of court. Readers will probably be aware that  for choice of law, Rome I has a contested provision on ‘incorporation by reference’, although there is no such provision in BIa.

Next comes the issue of lis alibi pendens. Of particular note viz A31(2) [‘Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement’] is the presence of two prima facie valid but competing exclusive choice of court agreements. Hancock J proceeds to discuss the validity of the English choice of court agreement in particular whether the businessman whose interest in sailing initiated the whole event, can be considered a consumer.

The judge begins by discussing whether the contract concerned is one of mere ‘transport’ which by virtue of A17(3) BIa rules out the consumer title all together. At 37 it is concluded that the contract is indeed one of transport and at 37(8) obiter that freight forwarding, too, is ‘transport’. Hancock J notes the limited use of CJEU authority, including Pammer /Alpenhof. In nearly all of the authority, the issue is whether the contracts at issue concerned more than just transport, ‘transport’ itself left largely undiscussed.

Obiter at 75, with reference to CJEU Gruber and Schrems, and also to Baker J in Ramona v Reliantco, Hancock J holds that Mr Piana had failed to show that the business use of the Yacht was merely negligible.

Following this conclusion the discussion turns to the impact of the UK’s implementation of the EU’s unfair terms in consumer contracts regulations, with counsel suggesting that the impact of these is debatable, in light of A25 BIa’s attempt at harmonising validity of choice of court. Readers will be aware that A25’s attempt at harmonisation is incomplete, given its deference to lex fori prorogati). Hancock J does not settle that issue, holding at 111 that in any event the clause is not unfair viz the UK rules.

Next follows the Article 8(1) discussion with reference to CJEU CDC and to the High Court in Media Saturn. Hancock J takes an unintensive approach to the various conditions: they need to be fulfilled without the court at the jurisdictional stage getting too intensively caught up in discussing the merits. At 139 he justifiably dismisses the suggestion that there is a separate criterion of foreseeability in A8(1). On whether the various claims for negative declaratory relief are ‘so closely connected’, he holds they are on the basis of the factuality of each being much the same and therefore best held by one court. Abuse of process, too, is ruled out per Kolomoisky and Vedanta: at 143: there is no abuse of process in bringing proceedings which are arguable for the purposes of founding jurisdiction over other parties.

(The judgment continues with extensive contractual review of parties hoping to rely on various choice of court provisions in the chain).

Quite an interesting set of Brussels Ia issues.

Geert.

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

 

 

 

The CJEU in Reliantco on’consumers’ and complex financial markets. And again on contracts and tort.

C-500/18 AU v Reliantco was held by the CJEU on 2 April, in the early fog of the current pandemic. Reliantco is a company incorporated in Cyprus offering financial products and services through an online trading platform under the ‘UFX’ trade name – readers will recognise this from [2019] EWHC 879 (Comm) Ang v Reliantco. Claimant AU is an individual. The litigation concerns limit orders speculating on a fall in the price of petrol, placed by AU on an online platform owned by the defendants in the main proceedings, following which AU lost the entire sum being held in the frozen trading account, that is, 1 919 720 US dollars (USD) (around EUR 1 804 345).

Choice of court and law was made pro Cyprus.

The case brings to the fore the more or less dense relationship between secondary EU consumer law such as in particular the unfair terms Directive 93/13 and, here, Directive 2004/39 on markets in financial instruments (particularly viz the notion of ‘retail client’ and ‘consumer’).

First up is the consumer title under Brussels Ia: Must A17(1) BIa be interpreted as meaning that a natural person who under a contract concluded with a financial company, carries out financial transactions through that company may be classified as a ‘consumer’ in particular whether it is appropriate, for the purposes of that classification, to take into consideration factors such as the fact that that person carried out a high volume of transactions within a relatively short period or that he or she invested significant sums in those transactions, or that that person is a ‘retail client’ within the meaning of A4(1) point 12 Directive 2004/39?

The Court had the benefit of course of C-208/18 Petruchová – which Baker J did not have in Ang v ReliantcoIt is probably for that reason that the case went ahead without an Opinion of the AG. In Petruchová the Court had already held that factors such as

  • the value of transactions carried out under contracts such as CFDs,
  • the extent of the risks of financial loss associated with the conclusion of such contracts,
  • any knowledge or expertise that person has in the field of financial instruments or his or her active conduct in the context of such transactions
  • the fact that a person is classified as a ‘retail client’ within the meaning of Directive 2004/39 is, as such, in principle irrelevant for the purposes of classifying him or her as a ‘consumer’ within the meaning of BIa,

are, as such, in principle irrelevant to determine the qualification as a ‘consumer’. In Reliantco it now adds at 54 that ‘(t)he same is true of a situation in which the consumer carried out a high volume of transactions within a relatively short period or invested significant sums in those transactions.’

Next however comes the peculiarity that although AU claim jurisdiction for the Romanian courts against Reliantco Investments per the consumer title (which requires a ‘contract’ to be concluded), it bases its action on non-contractual liability, with applicable law to be determined by Rome II. (The action against the Cypriot subsidiary, with whom no contract has been concluded, must be one in tort. The Court does not go into analysis of the jurisdictional basis against that subsidiary, whose branch or independent basis or domicile is not entirely clear; anyone ready to clarify, please do).

At 68 the CJEU holds that the culpa in contrahendo action is indissociably linked to the contract concluded between the consumer and the seller or supplier, and at 71 that this conclusion is reinforced by A12(1) Rome II which makes the putative lex contractus, the lex causae for culpa in contrahendo. At 72 it emphasises the need for consistency between Rome II and Brussels IA in that both the law applicable to a non-contractual obligation arising out of dealings prior to the conclusion of a contract and the court having jurisdiction to hear an action concerning such an obligation, are determined by taking into consideration the proposed contract the conclusion of which is envisaged.

Interesting.

Geert.

(Handbook of) EU private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

 

 

Salvoni v Fiermonte. CJEU confirms quasi-notarial nature of Brussels Ia’s Article 53 certificate, other than for provisional measures. Consumer protection cannot be raised at that stage. Also rejects interpretative force of substantive consumer law rules for jurisdictional issues.

I reviewed Bobek AG Opinion in Case C-347/18 Salvoni v Fiermonte earlier. The referring court enquires whether the court of origin tasked with issuing the Article 53 Certificate (issued with a view to enabling swift recognition and enforcement) may, of its own motion, seek to ascertain whether the judgment whose enforcement is sought was issued in breach of the rules on jurisdiction over consumer contracts, so that it may, where appropriate, inform the consumer of any such breach and enable her to consider the possibility of opposing enforcement of the judgment in the Member State addressed.

The CJEU has entirely confirmed the AG’s Opinion (no English version at the time of posting): no such second-guessing of jurisdiction.

At 34 ff the Court points out an important distinction with certificates issued with a view to enforcing provisional measures: there, the court issuing the certificate does carry out jurisdictional review (whether the court ordering the measures  has jurisdiction as to the substance of the case).

At 40 ff the Court also confirms that substantive consumer protection laws (such as Directive 93/13) do not transfer to the procedural /jurisdictional rules of Brussels Ia: an important conclusion overall.

Geert.

(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.16.

 

Bonnie Lackey v Mallorca Mega Resorts. High Court throws a wide net for jurisdictional privileges of consumers.

I have waited a little while to discuss (I had tweeted it earlier)  [2019] EWHC 1028 (QB) Bonnie Lackey v Mallorca Mega Resorts. It is a good case for an exam essay question and that is what I used it for this morning (albeit in simplified form, focusing on the consumer title).

Defendant is domiciled in Spain, and is hereafter referred to as ‘the Hotel’. Claimant was one of a group of friends who went on holiday to Magaluf in Mallorca, Spain. The booking was made in May 2017 by Ms Donna Bond, who was one of the party and a friend of Bonnie Lackey. The Agency’s Booking Conditions stated

‘references to “you” and “your” include the first named person on the booking and all persons on whose behalf a booking is made …’.

Section A, applicable to all bookings stated:

“By making a booking, you agree on behalf of all persons detailed on the booking that you have read these terms and conditions and agree to be bound by them”.

In my exam question I have left the agency out of the factual matrix. Its presence is immaterial for the case for the agency acts, well, as an agent: contract is between clients and the hotel direct.

The group were staying at the site owned and operated by the Hotel. It is agreed between parties that the Agency’s and Hotel’s marketing meets with the Pammer Alpenhof criteria, in other words that they direct their activity at England. Claimant, Ms Lackey, who is domiciled in England, was seriously injured in the ‘wave’ pool and is now tetraplegic. Damages application is for £9 million given the high cost of care for the now 41 year old claimant.

A first discussion concerned the insurance section (not part of the exam essay)(15 ff). Generali (of Spain) were the hotel’s insurers and had already accepted jurisdiction for the English courts. Their liability though was capped at an absolute max of 0.45 Million Euros – far off the claim. Claimant’s hope was that Article 13(3) Brussels Ia as Clyde point out, might be used for a claim anchored unto Generali. Here, the High Court followed the authority of Hoteles Pinero Canarias SL v Keefe [2015] EWCA Civ 598, see references to EU law there. That case went up to the Supreme Court and thence to the CJEU where it was taken off the roll following settlement. In any event, following Keefe, Davison M in Bonnie Lackey held that jurisdiction was conferred on the English courts by Articles 11 and 13 BIa, (contained in Section 3) which permit a claim here against the insurer and the joinder of the hotel to that claim. Master Davison rejected suggestions for the need of a CJEU reference among others because he also upheld jurisdiction under the consumer titleThe essential question here was whether there is a need for complete identity between the consumer referred to in Article 17(1) and the consumer referred to in Article 18(1) BIa.

Davison M suggests there need not, referring in particular to the Regulation’s aims to protect the weaker party, and to rule out as much as possible the risk of irreconcilable judgments.

Defendant’s reference to Schrems was considered immaterial. At 39: ‘Plainly, the consumer bringing the claim must be a beneficiary of the consumer contract or at least within its ambit. That does not mean that she personally must have concluded it. To borrow again from the judgment of Gloster LJ in Keefe, there would be no linguistic or purposive justification for such a restrictive interpretation.’ I am not sure I agree, not at any rate without proper discussion of ‘within its ambit’. The CJEU’s case-law on the protected categories does evidently aim to protect weaker categories and interpretation of same must serve that purpose. However the CJEU at the same time also emphasises the fact that these sections are an exception to the general rule and therefore must not be applied too widely, either.

Master Davison cuts short too extensive a discussion of the ‘ambit’ issue, by referring to the General Terms and Conditions – GTCS: the consumer who booked, accepted these GTCS ‘on behalf of all persons detailed in the booking’. At 40: ‘The hotel deployed no evidence of any kind to displace the effect of these terms, (which, I would add, are standard terms to be expected in a contract of this kind). A person who contracts through an agent has still “concluded” a contact. Thus, all argument about the need for complete identity between the consumer referred to in Article 17.1 and the consumer referred to in Article 18.1 is redundant. In each case it was the claimant, Ms Lackey.’ Whether counsel should have made more noise about this issue I do not know, however I would have expected discussion here of the general respect the Regulation has for privity of contract (which I discuss repeatedly on the blog).

I do not think this case will settle the matter. Its outcome evidently is positive (particularly considering that for Ms Lackey it will really not be straightforward to attend trial in Spain). However its legal reasoning cuts a few corners.

I would expect my students to discuss the need for effective protection of consumers ‘v’ the exceptional character of the section; and privity of contract which the CJEU flags on several occasions. Each with proper case-law references.

Geert.

Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.

Merinson v Yukos: Dutch settlement following employment contract. Appeal denied. England has full jurisdiction as domicile of the defendant.

In [2019] EWCA Civ 830 the Court of Appeal has dismissed the appeal against Yukos v Merinson which I reviewed here – review which readers may need to appreciate the judgment. Three issues were considered by Gross LJ at the Court of Appeal:

1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s answer at the High Court was YES. I suggested in my review that that finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here. Both Salter DJ and Gross LJ (at 27 ff) were persuaded however by the highly material nexus between the annulment claims – whether considered together with or separately form the damages claims (Gross LJ distinguished Aspen Underwriting in the process).

2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Salter DJ’s answer was negative, on the basis of extensive reference to the Jenard Report and Convention and Regulation scholarship. Gross LJ agrees – I continue to find that conclusion unconvincing.

3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>Here the Court of Appeal made the High Court’s reasoning its own, much more succinctly than its entertaining of the other questions.

Plenty to discuss here for the 3rd ed of the Handbook.

Geert.

 

 

Bobek AG in Salvoni v Fiermonte. Brussels Ia’s Article 53 certificate and consumer protection.

Bobek AG Opined early May (excuse posting delay) in Case C-347/18 Salvoni v Fiermonte. The referring court enquires whether the court of origin tasked with issuing the Article 53 Certificate (issued with a view to enabling swift recognition and enforcement) may, of its own motion, seek to ascertain whether the judgment whose enforcement is sought was issued in breach of the rules on jurisdiction over consumer contracts, so that it may, where appropriate, inform the consumer of any such breach and enable her to consider the possibility of opposing enforcement of the judgment in the Member State addressed.

A related issue therefore to the CJEU judgment in Weil last week.

Mr Alessandro Salvoni, a lawyer based in Milan, asked the Tribunale di Milano (District Court, Milan) to issue Ms Anna Maria Fiermonte (who resides in Hamburg) with a payment order for an amount owed to him as consideration for the professional services rendered by him in connection with legal proceedings concerning a will. Payment order was granted, no challenge was made by Ms Fiermonte (at 24 the AG emphasises that evidently, the court needs to check whether proper service was made). Mr Salvoni then requested the same court to issue the Article 53 Certificate with respect to that order. However this time the same court (with the AG at 22 one can assume that composition was different) proprio motu (and belatedly: see at 15) classified the relationship as B2C under the relevant provisions of Brussels Ia. Ms Fiermonte should have been sued in Hamburg.

Bobek AG courteously calls the court’s initiative ingenious and well-intended (at 29) but has no choice but to conclude that the Regulation simply has no tool for the Court somehow to mitigate let alone correct its earlier mistake. In a gesture effectively of public service (at 34; this rescues something useful from the otherwise fairly futile exercise; I doubt the CJEU will do something similar), the AG then rephrases the question into a more general one, which is detached from the specific course of action apparently contemplated by the national court: Is a national court, when issuing the Article 53 Certificate, entitled (or even obliged), under EU law, to ascertain whether the judicial decision that is to be certified was issued in breach of the rules on jurisdiction over consumer contracts?

At 44 ff the AG delightfully side-steps the chicken and hen issue of the C-54/96 Dorsch criteria (is an A53 court a ‘court’ entitled to preliminary review under Article 267 TFEU) and eventually concludes that there is no room for the A53 Court to assess the application of the consumer title. At 54: ‘

The interpretation of [A53] proposed by the referring court cannot easily be reconciled with the above considerations [speed; simplicity: GAVC]. In particular, that interpretation would in effect back-pedal on one of the main features of the new system introduced by Regulation No 1215/2012. Indeed, the checks that were previously made in the Member State addressed when issuing the exequatur would not be eliminated, but merely shifted to the certification stage carried out in the Member State of origin. That reading of the provision would thus run against the logic and spirit of Regulation No 1215/2012.’

At 81 and 82 the likely outcome of course is pointed at by the AG: Article 45(1)(e)(i) and Article 46 BIa grant consumers a special ground of refusal of recognition and enforcement in cases where the judgment in question conflicts with the jurisdictional rules for the protected categories. This ground has now been handed Ms Fiermonte on a plate – leaving the Milan courts with red cheeks.

Geert.

(Handbook of) European private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.16.

 

Ramona Ang v Reliantco: On bitcoins, choice of court, complex financial markets and ‘consumers’. As well as a first vindication of my GDPR jurisdictional prediction.

Update the merits were held today in Ang v Reliantco Investments Ltd [2020] EWHC 3242 (Comm)

As noted, I have come up for some air after a few hectic weeks – next case to report on is [2019] EWHC 879 (Comm) Ramona v Reliantco, held 12 April. (A similar case is pending with the CJEU against Reliantco as Case C-500/18).

Defendant (‘Reliantco’) is a company incorporated in Cyprus offering financial products and services through an online trading platform under the ‘UFX’ trade name. Claimant, Ms Ang, is an individual of substantial means who invested in Bitcoin futures, on a leveraged basis, through the UFX platform. She claims, essentially and primarily, that Reliantco wrongfully blocked and terminated her UFX account and should compensate her for the loss of her open Bitcoin positions, or at a minimum should refund her cash value invested. She also makes claims for relief in respect of what she says have been breaches of data protection obligations owed by Reliantco in connection with her UFX account.

The judgment does not concern the merits of Ms Ang’s claims but rather an application by Reliantco challenging jurisdiction. Reliantco contends that Ms Ang is bound by its standard terms and conditions, clause 27.1 of which provides that the courts of Cyprus are to have exclusive jurisdiction over “all disputes and controversies arising out of or in connection with” her customer agreement. Reliantco therefore relies on Article 25 Brussels Ia.

Ms Ang says that clause 27.1 is ineffective to require her to bring her claim in Cyprus, either because she is a consumer within Section 4 of Brussels (Recast) or because clause 27.1 was not incorporated into her UFX customer agreement with Reliantco in such a way as to satisfy the requirements of Article 25. Ms Ang says, in the alternative, that her data protection claims may be brought here notwithstanding Article 25 Brussels Ia even if Article 25 applies to her primary substantive claims.

All in all a nice set of jurisdictional issues and no surprise to have prof Jonathan Harris QC involved as counsel.

At all times material to her claim, Ms Ang was not employed or earning a living in any self-employed trade or profession (unless, which is contentious between the parties and considered below, her activity as a customer of Reliantco via the UFX platform is itself to be so classified). Ms Ang worked in money markets for two months as a trainee, observing US$/DM currency swaps. Other than that, she has no professional currency trading or money market experience (again, that is, unless her use of the UFX platform to invest in Bitcoin futures itself counts as such).

At 9, a little bit of Bitcoin drame enters the scene: Ms Ang’s husband, Craig Wright, is a computer scientist with cybersecurity and blockchain expertise who works as Chief Scientist for nChain Ltd, a blockchain technology company with a corporate vision “to transform how the world conducts all transactions – using the blockchain’s distributed, decentralised ledger that chronologically records transactions in an immutable way“. As a researcher, he publishes prolifically and has developed innovations for which patent protection has been sought. He is the same Craig Wright who has identified himself publicly as being ‘Satoshi Nakamoto’, the online pseudonym associated with the inventor (or a co-inventor) of Bitcoin. Baker J holds that he need not consider whether that claim is true, and on the evidence for this application I would not be in any position to do so.

Was Ms Ang a ‘consumer’? At 52 ff the arguments of Reliantco are summarised; at 55 ff those of Ms Ang.

CJEU precedent discussed by Baker J is C-89/91 Shearson; C-269/95 Benincasa; C-464/01 Gruber; C-498/16 Schremsand the pending cases C‑208/18 Petruchová [I reviewed the AG’s Opinion (issued a day before the High Court’s judgment) yesterday] and C-500/18 Reliantco Investments and Reliantco Investments Limassol Sucursala Bucureşti.

Baker J concludes at 34 ‘the ECJ/CJEU has not decided whether contracts entered into by a wealthy private individual for the purpose of investing her wealth, or particular types of such contract, are not (or can never be) consumer contracts.’

Reference is then made to English precedent along the very lines of the precedent dismissed by Tanchev AG in Petruchová: including AMT Futures v Marzillier, and at 35 ff Standard Bank London Ltd v Apostolakis both through the English and the Greek courts – with differing results. At 44: ‘the disagreement between the English and Greek decisions in Apostolakis turns upon and is constituted by a difference of view as to whether investing private wealth for gain, if it takes the form of buying and selling foreign currency, is by nature a business activity so that an individual investing their wealth in that way cannot when doing so be a ‘consumer’ under Brussels (Recast). Longmore J thought there was no such proposition of law; the Greek court took the contrary view.’ German case-law is also discussed.

At 63 Baker J comes to the core of his reasoning: ‘In my judgment, the investment by a private individual of her personal surplus wealth (i.e. surplus to her immediate needs), in the hope of generating good returns (whether in the form of income on capital, capital growth, or a mix of the two), is not a business activity, generally speaking. It is a private consumption need, in the sense I believe intended by the ECJ in Benincasa, to invest such wealth with such an aim, i.e. that is an ‘end user’ purpose for a private individual and is not exclusively a business activity. That means, as was also Popplewell J’s conclusion in AMT v Marzillier, that it will be a fact-specific issue in any given case whether a particular individual was indeed contracting as a private individual to satisfy that need, i.e. as a consumer, or was doing so for the purpose of an investment business of hers (existing or planned).’

And at 65 in fine: the ‘question of purpose is the question to be asked, and it must be considered upon all of the evidence available to the court and not by reference to any one part of that evidence in isolation.’

At 68 he concludes ‘the purpose of her contract with Reliantco therefore was outside any business of hers’.

Baker J notes that he was not asked to defer any decision in C‑208/18 Petruchová. I believe it would have been of help to determine the issue before him. Tanchev AG (as noted, in an Opinion not available to Baker J at the time of his drafting his judgment) suggests that ‘to determine whether a person must be regarded as a consumer, reference must be made to the nature and objective of the contract, not to the subjective situation of the person concerned.’ 

Obiter, he then reviews Article 25, where CJEU authority discussed is ia Colzanni and Cars on the Web. Ms Ang contended that she was not able to access the standard terms web page at the time she opened her account, and therefore clause 27.1 did not comply with Article 25 B1a. At 78 extensive technical detail is discussed and at 80 Baker J finds that the Cars on the Web criterion of accessibility and durability were met; and at 81 that in any case, the current issue is not one of a click-wrap agreement for a signed hard copy of the GTCs with choice of court in it, had also been sent.

Equally obiter, at 83 ff Baker J summarily discussed the GDPR jurisdictional arguments which would have been more relevant had he not accepted jurisdiction under the consumer title. The brief discussion entirely fulfils my summer 2018 prediction here: Article 79 GDPR will create a lot of issues at the level of jurisdiction.

A very relevant case.

Geert.

(Handbook of) EU private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.