Posts Tagged Reflexive

Huawei v Conversant wireless. Reflexive application of patent validity jurisdiction confirmed in principle – but rejected in casu.

In [2019] EWCA Civ 38 Huawei v Conversant Wireless (on appeal from [2018] EWHC 808 (Pat) the Court of Appeal considered whether in the event of 2 defendants being UK based (the others domiciled in China) the UK courts may relinquish jurisdiction reflexively to honour Article 24(4) Brussels Ia’s exclusive jurisdictional rule for the validity of patents.

Neither Article 33’s lis alibi pendens or Article 34’s ‘forum non conveniens’ rule were discussed.

Huawei China and ZTE China have commenced proceedings in China against Conversant, seeking to establish invalidity and (in the case of Huawei China only) non-infringement of Conversant’s Chinese patents. Conversant have inter alia sued Huawei China and ZTE China in Germany for infringement of its German patents.

Following Owusu, jurisdiction for infringement of UK patents against UK incorporated companies must lie and remain with the English courts per Article 4 B1a. As readers will remember from my review of Ferrexpo, the English courts for some time however have noticed with relish that the CJEU in Owusu did not entertain the part of the referral which asked it whether exclusive jurisdictional rules may apply reflexively – holding thereafter in the CJEU’s stead that they might so do (in a discretionary: not a slavish fashion: Floyd J here at 115).

At 95 ff Floyd J discusses the issues after having summarised the various representations made (see a summary of the summary by John de Rohan-Truba here), with much of the discussion turning on English CPR and jurisdictional rules, and reflexive application of Article 24(4) confirmed in principle, but not applied here. Requests to refer to the CJEU were summarily dismissed.

Geert.

(Handbook of ) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.7, Heading 2.2.9.5.

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

Leave a comment

Vik v Deutsche Bank. Court of Appeal confirms High Court’s view on Article 24(5) – jurisdiction for enforcement.

I have reported earlier on Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2017] EWHC 459 and Dennis v TAG Group [2017] EWHC 919 (Ch).

The Court of Appeal has now confirmed in [2018] EWCA Civ 2011 Vik v Deutsche Bank that permission for service out of jurisdiction is not required for committal proceedings since the (now) Article 24(5) rule applies regardless of domicile of the parties. See my posting on Dar Al Arkan and the one on Dennis .

Gross LJ in Section IV, which in subsidiary fashion discusses the Brussels issue, confirms applicability to non-EU domicileds however without referring to recital 14, which confirms verbatim that indeed non-EU domicile of the defendants is not relevant for the application of Article 24.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.8.

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

Leave a comment

B.win v Emerald Bay. Article 34 Brussels I Recast (as well as dépeçage and lex causae for jurisdiction clauses)

Update May 2017. Judgment upheld on appeal.

Thank you David Lewis QC for signalling B.WIN v Emerald Bay at the courts of Gibraltar. The dispute arises between Bwin, the internet gaming company, and various former shareholders of Bwin, domiciled at Gibraltar and England (as well as Israel). The former shareholders had advanced a claim in the New Jersey Courts alleging that Bwin made fraudulent, alternatively negligent misrepresentations in relation to the opportunity for internet gaming in New Jersey, as a result of which they divested their shares for lower value prior to a lucrative take-over of Bwin.

Bwin Gibraltar in the proceedings at issue are seeking an anti-suit injunction in respect of the existing New Jersey proceedings (an earlier EU-wide and Lugano States anti-suit request was wisely dropped, seeing as it runs counter CJEU authority (Owusu).

Jack J, considers first of all the issue of dépeçage or bifurcation for choice of court made in two successive agreements with differing choice of court provisions (distinguishing recourse for regulatory as opposed to purely contractual issues).  At 38 the court misses the ball on lex causae for choice of court. While it is true that Rome I exempts choice of court agreements from its scope, going straight to the ordinary rules of English and Gibraltarian conflict of laws ( under which in general the proper law of the contract will govern the jurisdiction clause), negates Brussels I a’s new Article 25 rule combined with the recitals. These oblige the court to apply lex fori prorogati with renvoi. This may have had an impact on the complex analysis of the choice of court provisions made in the 2010 as opposed to the 2014 agreement (with an interesting side-step made into the potential reflexive effect of Article 25’s choice of court provisions).

Briefly then the new lis alibi pendens /related actions regime of Articles 33-34 Brussels I Recast is discussed. (In a much more succinct way than Zavarco). At 73 in particular: ‘I am doubtful whether any part of the [FNC] doctrine survives in cases where this Court has jurisdiction under the Brussels I-Recast Regulation. [reference to Owusu]. Instead the extent to which this Court can and should say the current proceedings is likely to be limited by Arts 33 and 34 of Brussels I-Recast.’ This is an interesting reflection on Article 34 Brussels I Recast, despite inevitable parallel particularly experienced by common law courts, not amounting to a forum non conveniens light.

Continued then at 74 ff:

‘However, I do not need to determine that issue. Gibraltar is a perfectly appropriate venue for the determination of the dispute between the parties. The business of Bwin Gibraltar is run from here. All the parties reside here. The misrepresentations relied on were made in Gibraltar or London. Most of the lay witnesses are either in Gibraltar or in Europe.

75. It is true that the New Jersey courts will be more familiar with New Jersey gaming law. However, given that a trial there would be with a civil jury, that may not be such an advantage. In terms of disclosure of documents from the DGE, this is neutral in my judgment. If the proceedings continue in Gibraltar, the parties can apply in the federal courts of New Jersey…for disclosure of documents…

76. In my judgment, neither Gibraltar nor New Jersey is a forum non conveniens. In exercising my discretion as to whether to grant an anti-suit injunction, I consider that there is nothing substantial to weigh against Bwin Gibraltar’s contractual entitlement not to be sued in New Jersey. Accordingly, I will grant an anti-suit injunction.’

A further, brief, consideration of Article 34.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016 , Chapter 2, Heading 2.2.14.5.

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

Leave a comment

Zavarco: Donaldson DJ emphasises difference between Article 34 Brussels I Recast and forum non conveniens. And considers Article 24(2)’s exclusive jurisdictional rule.

Peter Ola Blomqvist v Zavarco PLC [2015] EWHC 1898 (Ch) is to my knowledge the first serious consideration of the new lis alibi pendens and related actions provisions of Articles 33-34 Brussels I Recast.

The defendant company has applied for a stay on the basis of forum non conveniens and/or lis alibi pendens founded on the pendency of the action in Kuala Lumpur.

Donaldson DJ first considers whether claimant’s action falls within Article 24(2)’s exclusive jurisdictional rule for company matters. Article 34 has no application where jurisdiction is assigned by Article 24.

Precedent referred to includes Reichert as well as BVG. The claim founds on the claimant, Mr Blomqvist’s allegation that the company has failed to comply with its obligation under applicable English corporate law to call a meeting at the request of a member registered as the holder of more than 5% of the paid-up shares so as to enable consideration of resolutions to replace the directors, thus entitling him to convene such a meeting himself.  The company contests that the court is obliged to focus on the defence that the shares were not paid up, which he suggests is the only real matter in dispute and turns solely on whether the terms of the relevant purchase agreement were complied with, a matter outside Article 24.

At 25: CJEU Case-law and the Jenard report exclude ‘from the reach of Article 24 a contractual claim to which questions of corporate governance were advanced by way of defence. It is however equally important not to remove from its ambit a claim seeking redress for failures of corporate governance on the basis of a defence which is purely contractual.’

Turning then to Article 34. Donaldson DJ suggests at 34 that ‘The clear purpose of Article 34 is to liberate the court from the constraint imposed by the Regulation in earlier versions, exemplified in Owusu , as regards stay in favour of the courts of non-Member States.’ I am not convinced. Articles 33-34 may now allow for a stay in relations with third States. Yet forum non conveniens is one thing – and indeed one ruled out by the CJEU under the Brussels regime. Articles 33-34 are quite another.

Consideration is then made of the rather awkward first condition of Article 34 that a stay requires that ‘it is expedient to hear and determine the related actions together’. At 38: ’it is hard to see how the actions could in practice ever be heard and determined together and hence how such a course could ever be expedient. This result can, as I see it, only be avoided by a purposive construction which treats the words “is expedient” as equivalent to “would have been expedient”. I believe this is right: this condition is likely to have to be interpreted at an abstract level: as in that it would have been expedient to hear the actions together (typically, by use of Article 8(1)’s anchor mechanism), had the considerations involved competition between two (or more) EU courts: seeing as an EU judge is evidently in no position to demand a related action be handed over from a third State court.

The bar for the application of Article 34 is necessarily high – and was arguably applied so in Zavarco: at 41 ff convincing arguments are displayed to that effect.

Finally, at 44 ff Donaldson DJ entirely justifiably, and emphatically, rejects the suggestion that with lis alibi pendens having failed, a stay could be issued on case-management grounds: (the Owusu) prohibition cannot be circumvented by re-labelling the exercise as one of case management so as to “achieve by the back door a result against which the ECJ has locked the front door”(per Lewison J in Skype technologies SA v Joltid Ltd [2009] EWHC 2783 (Ch) ).

This is the first proper consideration of Article 34 of the Recast. No doubt it will not be the last.

Geert.

(Handbook of) European Private International Law – 2nd ed. 2016 (forthcoming), Chapter 2, Heading 2.2.6.5, Heading 2.2.14.5.

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

Leave a comment

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

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

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

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

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

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

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

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

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

Geert.

 

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

Leave a comment

Should Bank St Petersburg anti-enforcement injunctions fall foul of the Brussels I-Regulation?

In Bank St Petersburg, the High Court issued an anti-enforcement injunction on 14 May. The Bank had obtained a number of Russian judgments in their favour (in interlocutory proceedings), which they aimed to have enforced in France and Bulgaria. Following the Russian judgments however parties agreed to have their core dispute (the control over a Russian company against the background of a restructuring operation of the  Arkhangelskys’ financial interest) judged exclusively by the English courts. The anti-enforcement injunction bans the Bank from having the judgments enforced in France, Bulgaria, or anywhere else.

Prima facie the injunction escapes all attention under the Brussels I Regulation: the judgments, enforcement of which is sought, originate from outside the EU. The choice of court clause is agreed between two parties domiciled outside of the EU, whence also falling outside the Regulation in its current version (this will change following the Brussels I-recast). (Notwithstanding Article 23(3)’s limited protection by instructing courts not named in the clause to desist – however Article 27’s lis alibi pendens rule would still protect the courts who despite  this instruction hear the case anyway).  Of particular note is also the subject-matter of the underlying dispute, which might be caught, if the Regulation were applied reflexively (such as the High Court did in Ferrexpo), by reflexive application in favour of the Russian courts of the exclusive Jurisdictional rule of Article 22(2).

These are altogether not very forceful points of entry for the Brussels I-Regulation to have a calling in the matter. Therefore this also rules out that the injunction might be caught by the ECJ’s general aversion vis–a-vis ‘anti-suit’ injunctions.

Geert.

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

Leave a comment

Court of Appeal suggests in Dal Al Arkan that Choudhary reading of Article 22(5) Brussels I was per incuriam. (Exclusive jurisidiction for enforcement).

Postscript 24 November 2017 Dal Al Arkan was confirmed in Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2017] EWHC 459 and in Dennis v TAG Group [2017] EWHC 919 (Ch).  Permission for service out of jurisdiction is not required since the (now) Article 24(5) rule applies regardless of domicile of the parties.

In Dar Al Arkan, the Court of Appeal has suggested that the Court’s reading of Article 22(5) of the Brussels I-Regulation in Choudhary was  per incuriam (meaning, in short, without reference to relevant statutory law and case-law and hence not subject to the rule of precedent).

Article 22(5 provides for ‘exclusive jurisdiction’ ‘regardless of domicile’, ‘in proceedings concerned with the enforcement of judgments’, established for the ‘courts of the Member State in which the judgment has been or is to be enforced’.  The key word for this exclusive jurisdictional ground is ‘enforcement’. ‘Proceedings concerned with the enforcement of judgments’ means ‘those proceedings which can arise from recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments‘ (Raport Jenard).

Difficulties arising out of such proceedings come within the exclusive jurisdiction of the courts for the place of enforcement, as was already the case in a number of bilateral Treaties concluded between a number of the original States, and also in the internal private international law of those States.

The Jenard report does not quote a specific reason for the reasoning behind this exclusivity, however one assumes that such proceedings are so intimately linked to the use of judicial authority and indeed force, that any complications in their enforcement ought to be looked at exclusively by the courts of the very State whose judicial authorities are asked to carry out the enforcement. In the words of the Court of Justice: ‘the essential purpose of the exclusive jurisdiction of the courts of the place in which the judgment has been or is to be enforced is that it is only for the courts of the Member State on whose territory enforcement is sought to apply the rules concerning the action on that territory of the authorities responsible for enforcement.’ [Case C-261/90 Reichert v Dresdner Bank, [1992] ECR 2149, para 26.).

Neither Convention, Regulation or Report Jenard clarify specifically for Article 22(5) whether the Article applies against non-EU domiciled defendants. In Choudhary, the Court of Appeal had held that it does not. However it had refrained from citing any relevant statutory or (ECJ) case-law authority. In Dar Al Arkan, the Court suggests that this renders judgment in Choudhary per incuriam in line of ECJ and scholarly authority. This is the right approach: the raison d’etre for Article 22(5) is a specific and narrowly construed one, as it is for all other parts of Article 22, in particular per the extract from Reichert, above. (A convincing case for Gleichlauf between court and applicable law).

For instance, the Article 22(5) ground for jurisdiction must not thwart jurisdiction of other courts who would have jurisdiction had the case not been brought as part of an enforcement difficulty. Therore, by way of example, the court which has jurisdiction on the basis of Article 22(5), cannot hear the defence against enforcement which is based on a request for compensation with a different mutual debt (Case 220/84, AS-Autoteile Service). Neither does Article 22(5) trump the enforcement Title of the Regulation.

Within those narrow confines, there is no reason not to extend the jurisdictional rule to defendants domiciled outside of the EU. Their non-dom status is immaterial to the proceedings. (Note that the issue on the ‘reflexive’ nature of 22(5) is not resolved by this judgment. Neither by the Brussels I recast, which does clarify (recital 14) that indeed non-EU domicile of the defendants is not relevant for the application of Article 24 of the new Brussels I-Regulation).

Geert.

 

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

Leave a comment

%d bloggers like this: