Yet more on The Prestige recognition tussle. On service, state immunity and the insurance title of Brussels Ia.

I have twice already reported on The Prestige recognition issue: see here and here. In a further judgment at the end of July, [2020] EWHC 1920 (Comm), Butcher J after helpfully summarising the various claims, considered

  • whether a Member State may be served under the EU Service Regulation 1393/2007, or whether residual PIL (here: the UK State immunity Act) may insist on an alternative. This did not so much engage the issue of ‘civil and commercial’ (CJEU Fahnenbrock being cited) on which both parties agreed. Rather on the exhaustive effect or not of the Service Regulation, in particular, whether Member States may insist on service upon authorities of other Member States via diplomatic means only. Butcher J holding correctly in my view at 45, that service via the means provided for in the Regulation, suffices.
  • next, whether the case engages sovereign immunity of Spain and France which Butcher J held that they do not for the most part. He mostly cites the States’ submission to arbitration in this respect.
  • further, whether the English courts have jurisdiction or whether that is ruled out by virtue of the arbitration exception or the insurance title of the Regulation (at 93 ff; the preceding paras concern claims which fall outside BIA and are to be judged under common law). At 107 Butcher J holds that the arbitration exclusion is not engaged, citing national and CJEU authority as well as recital 12 BIa, and holding at 108 that ‘(t)he present Judgment Claims are a further step beyond what is contemplated by an ‘action or judgment concerning … the enforcement of an arbitral award’ in recital (12).’ As for the insurance heading, with reference to Aspen Underwriting, he holds that the insurance title is engaged, and (at 132) that the States they are entitled to the jurisdictional protections of Section 3, without it having to be shown that they are in fact economically weaker parties. (There is a lingering doubt over one of the claims subrogated to Spain). The insurance title being engaged, this mains that the parties protected by it may only be sued in their jurisdiction (Article 14(2)’s exception to that was held not to be applicable), hence the English Courts for those claims do not have jurisdiction.

The result is a partial jurisdiction in England only – and permission to appeal, I imagine.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1, Heading 2.2.11.2, Heading 2.2.16.

 

The CJEU in Movic on enforcement of unfair trading practices and the less than abstract determination of ‘civil and commercial’.

I reviewed Szpunar AG’s Opinion in C-73/19 Belgische Staat v Movic BV et al here. The CJEU held this morning. At the time of posting an English version of the judgment was not yet available. The case at issue concerns enforcement of Belgium’s unfair trading act by the public authorities of the Member State. Movic BV of The Netherlands and the others defendants practices ticket touting: resale of tickets for leisure events.

The Court is more succinct than the AG in its analysis yet refers repeatedly to points made by Szpunar AG without itself therefore having to refer to so extensive an analysis.

The fact that a power was introduced by a law is not, in itself, decisive in order to conclude that the State acted in the exercise of State authority (at 52). Neither does the pursuit of the general interest automatically involve the exercise of public powers (at 53). With respect to the authorities’ powers of investigation, it would seem that the Court like the AG reads (at 57) C‑49/12 Sunico as meaning that to exclude proceedings from the scope of ‘civil and commercial matters’, it must be determined, in concreto, whether the public authority uses evidence which it has in its possession as a result of its public powers of investigation, hence putting it in a different position as a person governed by private law in analogous proceedings. Collecting evidence in the same way as a private person or a consumer association could, does not fall within that category (at 58).

Neither the request for penalty payments nor an application for an injunction makes the proceedings drop out off Brussels Ia: both instruments are available to private parties, too. That is not however the case for the observation of continued infringement by mere civil servant oath as opposed to bailiff certification. This, the Court holds like the AG, does amount to exercise of public authority (at 62) however (at 63) that element alone escapes BIA, it does not so taint the other part of the proceedings.

As I noted in my review of first Advocate General Szpunar’s Opinion, the need for highly factual considerations sits uneasily with the Regulation’s expressed DNA of predictability. However this squares with the CJEU case-law on ‘civil and commercial’.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2, Heading 2.2.

The Prestige recognition tussle – ctd. On arbitration and state immunity.

A short update on the Prestige litigation. I reported earlier on the disclosure order in the recognition leg of the case. In that review I also listed the issues to be decided and the preliminary assessment under Title III Brussels Ia. That appeal is to be heard in December 2020 (see also 21 ff of current judgment). In The London Steam-Ship Owners’ Mutual Insurance Association Ltd v Spain (M/T “PRESTIGE”) [2020] EWHC 1582 (Comm) Henshaw J on 18 June held on yet another set of issues, related to arbitration and State Immunity.

He concluded after lengthy analysis to which it is best to refer in full, that Spain does not have immunity in respect of these proceedings; that the permission to serve the arbitration obligation our of jurisdiction, granted earlier to the Club should stand; and that the court should appoint an arbitrator.

I am pondering whether to add a State immunity chapter to the 3rd ed. of the Handbook – if I do, this case will certainly feature.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1, Heading 2.2.11.2, Heading 2.2.16.

Alexander bros v Alstom. A reminder of the relevance of EU law for New York Convention refusal of recognition of arbitral awards on ordre public grounds.

In Alexander Brothers Ltd (Hong Kong SAR) v Alstom Transport SA & Anor [2020] EWHC 1584 (Comm) Cockerill J discussed inter alia (at 177 ff) the impact of EU law on the ordre public assessment for potential refusal of recognition of an arbitral award under section 103 of the 1980 New York Convention.

CJEU authority are C-126/ 97 Eco Swiss (concerning EU competition law) and C-168/ 05 Claro (unfair terms in consumer contracts). At 183 Cockerill J does not suggest the CJEU authority should no longer stand. Indeed she suggests obiter that there is no reason to suggest the CJEU’s line of reasoning should not apply to wider issues than just competition law or consumer law. However, the burden of proof of showing that particular parts of EU law are of a nature to justify the ordre public exception, lies upon the party objecting to recognition. In casu Alstom have fallen short of that duty. Yes, there is scant reference to anti-corruption in the private sector; and yes there is EU money laundering law. However (at 186) ‘the EU has, in general terms, set its face against corruption. But aside from the area of money laundering it has not put in place mandatory laws or rules. In the context of international corruption of the kind in focus here it has left it to the individual member states to adopt what measures seem good to them. There is, in short, no applicable mandatory rule or public policy.’

An interesting discussion.

Geert.

On the benefits of summary judgment in enforcement. DVB Bank v Vega Marine.

Henshaw J in  DVB Bank SE v Vega Marine Ltd & Ors [2020] EWHC 1494 (Comm) (on substance a straightforward case on sums loaned) made some important observations on the benefits of summary judgment as opposed to a default judgment in the context of recognition and enforcement.

This a few days before publication of the thesis of Vincent Richard on the very topic.

There is no doubt the English courts have jurisdiction per a valid choice of court clause under A25 BIa. Claimants are pressing for summary judgment, citing

  • Brexit. The Withdrawal Agreement extends EU law in civil procedure to proceedings issued before the end of the transition period, however claimants express anxiety over the speed of Greek enforcement proceedings given courts’ shutdown in the Covid19 era. At 61: ‘Greek counsel has advised the Claimants that the Greek courts shut down earlier this year for an indefinite period, so that obtaining an enforcement order in Greece would be likely to be delayed;’.
  • More crucially however, Henshaw J notes at 61, correctly, that even under BIa, default judgments are more vulnerable: ‘there is a risk that an enforcement order based on a simple default judgment, even if obtained before 31 December 2020, might be set aside on public policy grounds. Greek counsel advised that the Greek courts would be much less likely to refuse to recognise and enforce a reasoned English judgment following a hearing on the merits.’

Summary judgment was given against the defendants.

Geert.

PJSC v Starr. A glimpse of the complications of non-automatic recognition and enforcement.

A short note on Public Joint Stock Company (Rosgosstrakh) v Starr Syndicate Ltd & Ors [2020] EWHC 1557 (Comm) just to illustrate the complications for recognition and enforcement in the absence of a near-automated process such as under Brussels IA (the Hague Judgments Convention is meant to lubricate the process internationally). Claimant applies for summary judgment on its claim for recognition and enforcement of three judgments obtained in its favour in the Russian courts in 2015 and 2016.

Moulder J first discussed the issue of lack of jurisdiction for the Russian courts and she finds at 93 after consideration that the discussions to and fro, and the evidence of Russian experts for each of the parties, necessitates proper discussion with oral evidence of the contractual construction, under Russian law, of the relevant choice of court clauses. Of course under BIa and other regimes operating with a certain amount of mutual trust, second-guessing jurisdiction is not part of the assessment.

Next, the allegations of bias are also discussed, with at 126 ia reference to an interference by President Putin, and at 138 a solid set of reasoning for Moulder J to dismiss the potential for summary judgment on this point, too. Of course bias is an ordre public issue which even under BIa’s rules for recognition of judgments from other Member States, might justify refusal of recognition.

Geert.

 

 

 

GFH Capital v Haigh. Enforcement of DIFC judgment puts spotlight on international commercial courts.

DIFC Courts, the Dubai International Financial Centre’s Courts, is one of the new generation of international commercial courts. Its rulings piggyback unto recognition and enforcement treaties which the UAE concludes with third countries (India being a recent example).

In GFH Capital Ltd v Haigh & Ors [2020] EWHC 1269 (Comm) Henshaw J first of all notes that there is no such treaty between the UK and the UAE hence he considers recognition of the July 2018 DIFC judgment by Sir Jeremy Cooke under common law principles. Helpfully, these principles have been summarised in a January 2013 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales. Under discussion in the case is mostly the condition that the foreign court be a court of competent jurisdiction; that the foreign judgment be not obtained fraudulently; and that its recognition be not incompatible with English ordre public.

The judgment is an extensive treatment of the relevant principles and therefore suited to comparative materials.

Geert.

 

AB v EM. Recognising Sharia decisions in England.

AB v EM [2020] EWHC 549 (Fam) concerns for a large part the application of Brussels IIa’s traditional jurisdictional rules (habitual residence etc.) and I shall not comment on those.

Of interest to the blog are, first, at 37 ff the application of the Regulation’s forum non conveniens rules: in that respect, compare with my posts on V v M and W v L. Further, the question whether the order made by the Sunnite Sharia Court of Beirut on 6 February 2019 in proceedings commenced by the mother in Lebanon in November 2018, incorporating and approving an agreement between the parties to these proceedings regarding custody and access with respect to M, capable of recognition in the UK and, if so, what impact should this have on the UK courts’ welfare determination?  The 2019 agreement established that the father would have custody of M and would reside with M in either the United Kingdom, Egypt or some other location of his choosing.

MacDonald J at 71-73, having referred to the spirit of comity, does not hold on what at 73 are briefly refered to as ‘wider criticisms’ of the February 2019 Order, or the allegations of durress in the coming to be of that order. He notes more as a matter of fact that circumstances in the child’s welfare have changed since the Order, and that the father did not at any rate honour elements of the agreement which the Order had confirmed.

No grand statement of principle, therefore. Rather, a measured practical approach.

Geert.

SAS Institute v World Programming. A complicated enforcement saga continues.

Update 15 June 2020 as Gilles Cuniberti notes, enforcement jurisdiction (see towards the end of this post) ought to have involved some discussion of A24(5) Brussels Ia.

I reported earlier on complex enforcement issues concerning SAS Institute v World Programming. In [2020] EWCA Civ 599 SAS Institute Inc v World Programming Ltd Flaux J gives an overview of the various proceedings at 4:

The dispute between the parties has a long history. It includes an action brought by SAS against WPL in this country in which SAS’s claims were dismissed; a decision by WPL, following an unsuccessful challenge on forum non conveniens grounds, to submit to the jurisdiction of the North Carolina court and to fight the action there on the merits; a judgment in favour of SAS from the North Carolina court for some US $79 million; an attempt by SAS to enforce the North Carolina judgment in this jurisdiction which failed on the grounds that enforcement here would be (a) an abuse of process, (b) contrary to public policy and (c) prohibited by section 5 of the Protection of Trading Interests Act 1980 (“the PTIA”); and a judgment from the English court in favour of WPL for over US $5.4 million, which SAS has chosen to ignore.’

A good case to use therefore at the start of a conflicts course to show students the spaghetti bowl of litigation that may occur in civil litigation. There are in essence

  • English liability proceedings, decided in the end following referral to the CJEU (Case C-406/10);
  • North Carolina liability proceedings, in which WPL submitted to jurisdiction after an earlier win on forum non grounds was reversed on appeal and the NC courts came to the same conclusions as the English ones despite a finding they were not (clearly) under an obligation to apply EU law;
  • next, an SAS enforcement attempt in England which failed (with permission to appeal refused): my earlier post reviews it;
  • next, enforcement proceedings of the NC judgment in California. That CAL procedure includes an assignment order and WPL sought an anti-suit injunction to restrain SAS from seeking assignment orders as regards “customers, licensees, bank accounts, financial information, receivables and dealings in England”: it was not given the injunction for there was at the time no CAL assignment order pending which could be covered by anti-suit.
  • Currently, it seems, there is, and it is an anti-suit against these new assignment orders which is the object of the current proceedings.

At 59 ff follows a discussion of the situs of a debt; at 64 ff the same for jurisdiction re enforcement judgments, holding at 72

Applying these internationally recognised principles to the present case, the North Carolina and California courts have personal jurisdiction over WPL but do not have subject matter jurisdiction over debts owed to WPL which are situated in England. That is so notwithstanding that the losses for which the North Carolina court has given judgment were incurred by SAS in the United States. Nevertheless the effect of the proposed Assignment Order would be to require WPL to assign debts situated in England to SAS which would at least purport to discharge its customers from any obligation owed to WPL, while the effect of the proposed Turnover Order would be to require WPL to give instructions to its banks in England which would discharge the debts situated in England currently owed by the banks to WPL. In substance, therefore, the proposed orders are exorbitant in that they affect property situated in this country over which the California court does not have subject matter jurisdiction, thereby infringing the sovereignty of the United Kingdom.

Update 15 June 2020 as Gilles Cuniberti notes, enforcement jurisdiction ought to have involved some discussion of A24(5) Brussels Ia.

Which is later confirmed at 83. Consequently the earlier order is overturned: at 89: ‘it follows also that the judge’s conclusion that the Assignment and Turnover Orders were not “markedly exorbitant” was based upon a mistaken premise.’

The anti-suit and anti-enforcement applications are dealt with in particular with reference to comity, and largely granted with some collateral notices of intention by SAS not to seek a particular kind of enforcement.

Someone somewhere must have made partner on this litigation.

Geert.

 

 

Enforcement of unfair trading practices and ‘civil and commercial’. Szpunar AG extensively in Movic (re ticket touts).

Advocate-General Szpunar in his Opinion in C-73/19 Belgische Staat v Movic BV et al refers in footnote to the comment made by Yours Truly (much humbled) on p.38 of the Handbook, that the seminal Eurocontrol and Steenbergen judgments on the concept of ‘civil and commercial’ in the Brussels regime, each posit dual criteria for the concept but only ever have one of their two legs applied. The Opinion in general testifies to the complex picture that emerges in case-law on the issue.

The issue is a knock-out point under Brussels Ia and the majority of EU private international law instruments. If the case is not civil and commercial, European PIL does not apply and residual national law takes over. Despite or perhaps because of this core relevance, the debate on the concept is far from settled. I reported on it as recently as a few weeks back (Øe AG in C-189/19 Supreme Site; and a little before that C-421/18 Dinant Bar v maître JN,) and I expressed a need for serious chewing over following different strands of focus among the CJEU’s chambers (my post on C-579/17 Buak).

The case at issue concerns enforcement of Belgium’s unfair trading act, not as in C‑167/00 Henkel by a consumer group but rather by the public authorities of the Member State.

Movic BV of The Netherlands and the others defendants practices ticket touting: resale of tickets for leisure events. Belgium in recent years has been cracking down on the phenomenon and in conflict terms, has expressed an eagerness to qualify big chunks of e-commerce laws as lois de police. One assumes this explains the reluctance of the defendants to be hauled in front of a Belgian judge.

At 12: what the Belgian authorities are seeking, is

first, findings of infringement in respect of conduct constituting, inter alia, unfair commercial practices, secondly, an order for the cessation of such infringement, thirdly, an order for publicity measures to be taken at the expense of the defendants; fourthly, the imposition of a penalty payment in a fixed sum, due in respect of each and every infringement which may be found to have taken place after service of the judgment, and fifthly, permission for the fact of such infringement to be certified simply by means of a report drawn up by a sworn official of one of the authorities in question.

At 16: arguments against the issue being of a civil and commercial nature, are

first, unlike any other person, the Belgian authorities are not required to demonstrate that they have an interest of their own in bringing proceedings of the kind illustrated by the main proceedings, secondly, their powers of investigation are not available to legal persons governed by private law, and thirdly, they also have enforcement powers which are not available to such persons.

As for the issue of lack of requirement of showing interest:

The first authority signalled is C‑551/15 Pula Parking: acting in the public interest does not equate acting in the exercise of State authority. Per the same case and per Fahnenbrock, and Kuhn, neither, the AG points out, does origin of authority in Statute, equate acta iure imperii. The fact that a power was introduced by a law is not, in itself, decisive in order to conclude that the State acted in the exercise of State authority (at 32). Neither does it follow from C-271/00 Baten that that the mere fact of exercising a power which the legislature has specifically conferred on a public authority automatically involves the exercise of public powers (at 34).

The AG then more specifically discusses the issue of lack of requirement to show interest to establish standing. Here there are plenty of similarities with the consumer organisations at issue in Henkel (37 ff). The exemption does not mean that the entity enjoys a prerogative under which it has powers altering the civil or commercial nature of its legal relationship with the private law entities, or the subject matter of the proceedings in which a cessation action is brought.  Similarly, it has no such powers as regards the procedural framework within which the proceedings arising out of those relationships are heard, which is identical whatever the status of the parties to the proceedings may be.

Further, with respect to the powers of investigation:  here the AG reads C‑49/12 Sunico as meaning that to exclude proceedings from the scope of ‘civil and commercial matters’, (at 53)

it is not sufficient to identify national provisions which, in abstracto, authorise a public authority to gather evidence through the use of its public powers and to use such evidence in legal proceedings. Equally, it is not sufficient to find that that evidence has in fact been used in the proceedings. In order to exclude the proceedings from the scope of that expression, it must also be determined, in concreto, whether, by virtue of having used that evidence, the public authority is not in the same position as a person governed by private law in analogous proceedings.

(In the case at issue there are no such indications). This reading of Sunico makes the exemption exercise very much a factual one – which is not in itself unusual in the context of the case-law on ‘civil and commercial’. One hopes the Court itself will give clear guidance on how Sunico must be read.

The AG also zooms in on the request for penalty payments. Here, the core reference is C‑406/09 Realchemie. At 72 (after having analysed the issue): a procedure in which such payment is sought, falls within the scope of ‘civil and commercial matters’ where,

‘first, the purpose of the penalty payment is to ensure the effectiveness of the judicial decision given in the proceedings, which fall within the scope of that expression, and secondly, the penalty payment is a normal measure of civil procedure which is also available to private individuals, or which is imposed without exercising special powers that go beyond those arising from the rules of general law applicable to relationships between private individuals.’

(With both these boxes ticked in casu). This I believe is most sound.

Within the same context, the last argument refers to the need or not to instruct a bailiff to certify the existence (and frequency) of continued infringement: the relevant Belgian authorities can suffice with an oath by a civil servant. This is in fact not a point signalled by the referring court however the Belgian Government at hearing seemingly sought insurance cover as it were, effectively seeking sanction of its use of a civil servant statement in lieu of what ordinary parties would have to do, which is to instruct a bailiff. This, the AG suggest (at 75), does amount to exercise of public authority, but only then for that part of the claim (the penalty payment( against the Dutch defendants): weapons which an ordinary person could not avail themselves of (I would refer to C-271/00 Steenbergen here).

 

All in all the case illustrates the relatively narrow room for abstract pondering of the issue of ‘civil and commercial’. The Opinion is highly factual, and admirably on point viz the extensive CJEU authority. The need for highly factual considerations sits uneasily with the Regulation’s expressed DNA of predictability. However this squares with the CJEU case-law on same. And it bodes interestingly when we will start applying the corresponding Hague Judgments Convention provisions…

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Heading 2, Heading 2.2.