Ça alors! French evidence, the evidence Regulation and UK courts: The High Court in National Grid

In National Grid Electricity Transmission, the UK High Court correctly confirmed the Evidence Regulation as being subsidiary only.

The European Commission had found 20 companies to have been engaged in an extensive and sophisticated cartel regarding the supply of GIS, Gas Insulated Switchgear, which controls energy flow in electricity grids, and is therefore used as a major component in power substations. National Grid alleges that it suffered substantial losses by reason of overcharges resulting from the illegal cartel. Current judgment is an interim judgment on the issue of disclosure.  Estimating the cartel overcharge is very dependent on expert economic evidence.

Alstom and Areva are both French-domiciled defendants. They argue that providing disclosure will put them, as French companies, in breach of a prohibition under French law which attracts criminal penalties, and therefore should not be ordered. This prohibition is referred to in the High Court judgment as the ‘French Blocking Statute‘, of 1968, as amended, most notably in 1980. The prohibition is mostly meant to assist French companies in resisting excessive disclosure requests originating in the United States. Applicants had made a request under the EU’s Evidence Regulation and had served that request to the French Ministry of Justice.

The Ministry eventually refused, mostly for technical legal reasons (the request made had identified the defendants as the ones having to produce the evidence, rather than the court having to order them to do so). Alstrom and Areva subsequently argued that the only route for them to be safe from prosecution under the French law, was for the UK court to seek the assistance of a French Court under the EU Evidence Regulation.

Roth J first considered (with French expert help) the likelihood of the companies involved being prosecuted under the Act. On that point, he concluded ‘I find it virtually inconceivable that where jurisdiction over a company is exercised pursuant to an EU regulation to make it a defendant to proceedings in another EU Member State, for damages alleged to result from an established and serious violation of a fundamental provision of EU law, which proceedings serve an objective of EU policy, the public authorities of one EU Member State would in the exercise of their discretion institute criminal proceedings against that company for complying with the procedural rules of the courts of the Member State where the proceedings are brought.’

He subsequently discussed the evidence Regulation. This Regulation is of a subsidiary nature, as I have flagged once or twice before. It does not rule out national procedural rules as an alternative. Roth J correctly holds that the Regulation would not assist in this case (whether or nor it applies to disclosure proceedings between litigious parties at all is a different matter), inter alia because of the delays and because of the potential for the French courts eventually not to meet the request, thus leading to further uncertainty. He held therefore that the French Defendants should be subject to an order for disclosure in the same way as all the other defendants.

Appeal on 22 October 2013 did not lead to the findings being overturned. The French companies now face the proverbial rock and hard stone: comply with the English order but face the possibility, however remote, of prosecution under French law. Or be safe from prosecution under French law but face contempt in the UK courts.

Geert.

postscript: The Supreme Court refused permission to appeal in December 2013.

Evidence Regulation’s subsidiary nature confirmed in ProRail. Questions on enforcement left open.

Update 11 January 2021 see therefore my doubt viz Coward Phaestos Ltd & Ors [2021] EWHC 9 (Ch): Application, denied, for discovery /evidence order of data held in England, for use in Cypriot matrimonial proceedings. Held application could and should have been made in Cyprus under EU evidence regulation.

The ECJ has confirmed the subsidiary nature of the Evidence Regulation in ProRail, Case C-332/11. Regulation 1206/2001 does not govern exhaustively the taking of cross-border evidence, but simply aims to facilitate it, allowing use of other instruments having the same aim. The Court in this respect confirmed its view in Lippens.

Unfortunately the ECJ did not entertain the questions of the Belgian Hof van Cassatie on the role of the Brussels I Regulation, in particular Article 31 (confirming jurisdiction for provisional, including protective measures), Article 32 (defining ‘judgment’), and Article 33 (providing for automatic recognition and enforcement).  Admittedly, the national court could have been more precise on the role, if any, it saw for these Articles of the Jurisdiction Regulation in the dispute at issue (the appointment of an expert, for an expertise to be carried out outside of Belgium).

A possible impact of Articles 31-33 JR might relate to challenges of the carrying out of work by the expert (e.g. by way of seeking an injunction) in The Netherlands: would the Dutch court be prevented from second-guessing the expert’s brief, qualifications etc?

The Hof van Cassatie itself, according to the order of reference to which JÄÄSKINEN AG refers, flagged the Jurisdiction Regulation at the instigation of ProRail, whose appeal alleged infringement of Regulation No 44/2001. ProRail sought to infer that the power to order that an expert’s report be obtained lies exclusively with the courts of the place in which it is to be executed and, a contrario, that such a measure does not have any extraterritorial effect except by virtue of the authorisation of the Member State in which that investigative measure is to be carried out.  Switzerland, intervening on this point because of the similarities with the Lugano Convention, suggested that the measure by which a court charges an expert to carry out an investigation in the territory of another Member State is neither a provisional nor a preventive measure within the meaning of Article 31 of Regulation No 44/2001, on the ground that such a measure cannot produce extraterritorial effects, nor a judgment which may be the subject of recognition or enforcement within the meaning of Article 32 of the same regulation.

In the end, the AG suggested that the reference to the Jurisdiction Regulation was not specifically enough included in the questions put to the ECJ – a view which the ECJ implicitly agreed with. An interesting opportunity wasted, so it would seem.

Geert.

Court confirms limitations to the evidence Regulation in Lippens

Postscript: The Hoge Raad issued its final ruling, following the ECJ’s judgment, in June 2013. Most of Lippens’ arguments had become redundant following the ECJ’s judgment. The Hoge Raad rejected his argument that to hear him in The Netherlands would be an infringement of Article 6 ECHR’s right to fair trial.

In Case C-170/11 Lippens, the Court has today confirmed the limitations to the scope of application of the evidence Regulation, Regulation 1206/2001. The request for a preliminary ruling was referred by the Hoge Raad der Nederlanden (Supreme Court) (Netherlands) in substantive proceedings brought before a Dutch court against defendants domiciled in Belgium, the provisional hearing of whom as witnesses was requested by the applicants. The persons concerned wanted to be heard in French in their country of residence (Belgium) by means of an application to be addressed by the court hearing the proceedings to the Belgian judicial authorities under Regulation No 1206/2001. The Dutch court rejected that application, stating that the hearing should take place in the Netherlands and summoning the witnesses to appear before it under national procedural law.

The core question therefore was whether the evidence Regulation governs the obtaining of evidence in civil and commercial cases by one Member State from another exclusively and exhaustively or whether it leaves room for other means of access to such evidence.

Following the Opinion of Jääskinen AG, the Court confirmed that the evidence Regulation offers the national courts assistance, should they wish to request the co-operation of the authorities of other Member States to obtain evidence outside of their territory, but they they are not obliged to take the Regulation route should they consider their national procedural laws to suffice (or indeed offer a better alternative). In the case at issue, Lippens et al also appeared as parties in the Dutch proceedings. Dutch procedural law allows for the summoning of parties as witness. The Dutch courts therefore of course prefer the efficiency of those national proceedings given that the witnesses in such cases are already present (or represented), rather than having to take the roundabout way of the evidence Regulation.

The  ECJ moreover conceded that in its current state, the evidence Regulation with its strict conditions and delays, is likely to be less efficient than national proceedings.

A finding of the Regulation as being exhaustive in the field of cross-border obtaining of evidence in civil and commercial cases, would have been very surprising. However it is good to have the ECJ confirm it, for its interpretation of the scope of European private international law is extensive indeed.

Geert.