Tag: Regulation 1215/2012

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The CJEU on consumer signalling with a view to the protected categories, in Wurth Automotive. One or two further specifications of its Gruber, Milivojević, Schrems case-law.

The CJEU last week held in C-177/22 JA v Wurth Automotive. The case concerns the consumer title of Brussels Ia, in particular a refinement of the CJEU  C-630/17 Milivojević and C-28/18  Petruchová case-law (involvement of people with a background in the sector), C-498/16 Schrems (evolvement of use from non-professional to professional or the other way around) and  CJEU C‑464/01 Gruber criteria (dual (non-)professional use).

Applicant in the main proceedings, whose partner is a car dealer and managing director of an online platform for the sale of motor vehicles, was mentioned on the homepage of that platform as the graphic and web designer, without actually having carried out that activity at the time of the facts in the main proceedings. At the request of the applicant in the main proceedings, the partner did some research and contacted the defendant in the main proceedings from his professional email address, in which he indicated a price offer for the purchase of a vehicle. It was stated in that email that the contract of sale was to be concluded on behalf of the applicant in the main proceedings, however a little while after the purchase the partner enquired (but was rebuffed) about the possibility to indicate the VAT amount of the invoice (typically only of interest to business buyers).

Firstly, in applying the consumer title, must account be taken of current and future purposes of the conclusion of that contract, and of the nature of the activity pursued by that person as an employed or self-employed person? As for the latter, the CJEU answer [27] is clearly ‘no’, with reference to Roi Land Investments. As for the former, whether the purpose for the use is current or planned in the future, per Milivojević [88-89], is held by the CJEU not to be of relevance. I would personally add to both Milivojević and Wurth Automotive that any such future use must have been somehow signalled to the business. While the CJEU in Schrems confirmed the possibility to lose the consumer status as a result of subsequent professional use, it has not held (and in my view ought not to) that an initial professional use later changed to non-professional use, may belatedly trigger the consumer section (it has of course supported the later ‘internationalisation’ of the contract per Commerzbank).

Next, what is the burden of proof on whom, and what needs to be proven, when a good or service has been procured for dual professional and non-professional use. Here, the CJEU [30] ff confirms that first of all the professional use or not of the good or service needs to be established on the basis of the objective elements of the file. Only if “that evidence is not sufficient, that court may also determine whether the supposed customer had in fact, by his or her own conduct with respect to the other party, given the latter the impression that he or she was acting for business purposes, such that the other party could legitimately have been unaware of the non-professional purpose of the transaction at issue” [32].

[36] “the impression created by the conduct of the person claiming the status of ‘consumer’….on the part of the other contracting party, may be taken into account to establish whether that person should be afforded the procedural protection laid down in Section 4 of that regulation.”

In the case at issue,

[38] inaction following the presentation of a contract identifying the buyer as a trader, can constitute evidence (but not of singlehandedly determinative value) that the applicant in the main proceedings could have created, on the part of the defendant in the main proceedings, the impression that she was acting for professional purposes;

[39] ditto the sale of the vehicle shortly after the conclusion of the contract and [40] the potential making of a profit, albeit that the latter would in the view of the CJEU ordinarily not be of great impact.

The CJEU finally is not prepared (despite a self-confessed [47] in Wurth Automotive] potential to read same in CJEU Gruber) to read a benefit of the doubt, in inconclusive cases, to the benefit of the alleged consumer, leaving that with reference to CJEU TOTO to national procedural law. Here I think the Court could have held against such benefit on the basis of Brussels Ia itself.

Geert.

EU private International Law, 3rd ed. 2021, 2.231 ff.

 

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Does objection to territorial jurisdiction only, imply submission under Article 26 Brussels Ia? Gelderland in X v Lufthansa.

The first instance court of Gelderland held in X v Lufthansa that the latter’s limitation to objecting to territorial jurisdiction within The Netherlands, rather than to jurisdiction of the Dutch courts as such, amounts to submission under A26 BIa, leaving the Dutch courts to decide on territorial jurisdiction with reference to internal Dutch civil procedure rules (CPR).

The remainder of the judgment then agrees with Lufthansa on the basis of Dutch CPR identifying the defendant’s office or branch as the territorially relevant factor, leaving Gelderland without jurisdiction. The court seemingly rejected itself as forum contractus, holding that CJEU C-204/08 Rehder v Air Baltic does not apply due to the flight in current case not being intra-EU (final destination being Baku). I would have expected the court to consider C-20/21 LOT Polish Airlines, where the final destination equally was outside the EU.

I do not know what claimant argued (forum contractus one assumes, perhaps locus damni per A7(2) BIA?), at any rate it is wrong to hold that a limitation of jurisdictional objection to internal distribution, implies submission per A26 BIa, for those heads of jurisdiction which assign jurisdiction territorially, not just nationally. That includes A7 forum contractus and forum delicti.

Geert.

 

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The French Supreme Court in Barclay Pharmaceuticals v Mekni, summarily on blitz service under Brussels Ia, and on Article 24(3)’s jurisdiction viz public registers.

Thank you Gilles Cuniberti for flagging and discussing the French Supreme Court’s judgment in JE and B v Barclay Pharmaceuticals [cross-referral to the English judgment makes this Barclay Pharmaceuticals v Mekni]. Much of this post is already included in prof Cuniberti’s posts.

The core of the case concerns the enforcement of an English judgment [Barclay Pharmaceuticals Ltd v Antoine Mekni and others, [2018] 6 WLUK 461] which, in assisting Barclay Pharmaceuticals with enforcement of an earlier established £8.7 million debt (since accrued with costs etc to about £12 million), had declaratorily held that a large number of bank accounts and other entities which for the most part purport to belong to parties other than Mr Mekni, are in truth owned by him. Mr Mekni did not appear in the English declaratory relief proceedings hence did not there object to jurisdiction.

The relevant issue in the French proceedings for the purposes of the blog, is first of all Article 24(3) Brussels Ia’s exclusive jurisdiction for ‘proceedings which have as their object the validity of entries in public registers’. As Gilles had earlier discussed, here the Supreme Court [5-6] held that an English judgment determining ownership in shares held in public registers, does not engage ‘the validity of entries in public registers’, for said exclusive jurisdiction, it holds, only extends to the formal validity of such entry, not to the ownership of the assets related to the entry.

As Gilles notes, it was possible for the SC succinctly to deal with the A24(3) argument for under the applicable French law relating to the type of corporation involved, whose shares were the object of the proceedings, the only impact of the (non-obligatory) registration was to create limited third party effect; registration has no bearing on the existence, validity and ownership of the shares. Professor Cuniberti justifiably signals that a distinction between substantive and formal validity may not always be easily made.

The second issue of note to the blog, is the issue of service. A43(1) BIa prescribes that

Where enforcement is sought of a judgment given in another Member State, the certificate issued pursuant to Article 53 shall be served on the person against whom the enforcement is sought prior to the first enforcement measure. The certificate shall be accompanied by the judgment, if not already served on that person.

Recital 32 adds

In order to inform the person against whom enforcement is sought of the enforcement of a judgment given in another Member State, the certificate established under this Regulation, if necessary accompanied by the judgment, should be served on that person in reasonable time before the first enforcement measure. In this context, the first enforcement measure should mean the first enforcement measure after such service

In the case at issue, service happened at 2:55 PM and enforcement at 3 PM. Does that leave a ‘reasonable time’? I share Gilles’ frustration that the SC [3] merely replied that French CPR does not require the SC to engage with grounds of appeal that are manifestly unarguable

En application de l’article 1014, alinéa 2, du code de procédure civile, il n’y a pas lieu de statuer par une décision spécialement motivée sur ces griefs qui ne sont manifestement pas de nature à entraîner la cassation.

The take-away from this is that the SC in the circumstances did not see a clear infringement of A43 juncto A53 BIa. That does of course leave a lot of speculation as to when the timing of service might lead to enforcement issues – crucial too, I would suggest, in case of provisional measures.

Geert.

 

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Asian Offshore Services v Self Elevating Platform – SEP. A sloppy conclusion on ‘Principal place of business’ in Brussels Ia.

I am mopping up draft posts so forgive me if some of them are a touch late compared to my original report on them on Twitter.  Asian Offshore Services v Self Elevating Platform ECLI:NL:RBROT:2023:34 of the Court of First Instance at Rotterdam is an interesting illustration of the positive conflicts rule of Article 4 juncto Article 63 Brussels Ia.

Article 4’s domicile rule is supplemented by Article 63’s definition of domicile for legal persons:

Article 63:

1.   For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its: statutory seat [Dutch: statutaire zetel]; central administration; [Dutch: hoofdbestuur] or principal place of business [Dutch: hoofdvestiging].

2.   For the purposes of Ireland, Cyprus and the United Kingdom, ‘statutory seat’ means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place.

3.   In order to determine whether a trust is domiciled in the Member State whose courts are seised of the matter, the court shall apply its rules of private international law.

A63 may lead to so-called positive conflicts: more than one court considering itself to be the domicile of the defendant. This is interesting nota bene in the case of business and human rights cases where claimants may want to forum shop and sue in the EU, such as in Anglo American.

In the case at issue, the court first of all [4.2] dismisses the parties’ awkward consensus [4.1] that neither Brussels Ia, nor any international Treaty determines jurisdiction. Clearly Brussels Ia does apply (claimant is domiciled at Kuala Lumpur; defendant registered in Curaçao) and the Court applies it proprio motu.

The court then points to the statutory seat in Curaçao, and [4.9] notes SEP’s lack of contestation that Sliedrecht is its ‘fixed place of business’ as testified by an extract from the local commercial register. Now I a may be a stickler for language here but a fixed place of business is not the same as the principal place of business (which implies main business activities). It is the latter which the Regulation requires.

Geert.

EU Private International Law, 3rd ed. 2021, 2.131 ff.

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Public Institution for Social Security (PIFFS) v Ruimy. The High Court on ‘case pending’ in Article 34 Brussels Ia (forum non light), and a disappointing obiter conflation of forum non and Article 34.

In Public Institution for Social Security v Ruimy & Anor [2023] EWHC 177 (Comm) Jacobs J rejected both a forum non conveniens argument and an (acquired Brussels Ia) Article 34 Brussels Ia argument (raised by a Luxemburg-based defendant).

My paper on the Article 34 genesis and case-law hitherto is here.

Current claims are related to earlier jurisdictional challenges, culminating in The Public Institution for Social Security v Banque Pictet & Cie SA & Ors [2022] EWCA Civ 29 which I discuss here.

PIFSS is a Kuwaiti public institution responsible for Kuwait’s social security system and pension scheme. The claims involve alleged corruption of PIFSS. Director General by international financial institutions and intermediaries in return for causing or influencing PIFSS to invest substantial funds with or through those institutions and intermediaries (or related entities).

Following the Court of Appeal’s decision in January 2022 to uphold the successful jurisdictional challenge by some of the parties (‘the Mirabaud parties’), PIFSS have commenced proceedings against three of the Mirabaud parties (Banque Mirabaud, Mr Pierre Mirabaud and Mr Fauchier-Magnan) in Switzerland. These Swiss proceedings no longer, include a claim in respect of one of the schemes, the ‘Aerium’ scheme. Instead, the claim in those proceedings concerns a large number of other schemes in which the Mirabaud parties are alleged to have participated or assisted.

The forum non arguments are discussed [43] ff and are of course only possible because the United Kingdom are no longer party to the Lugano Convention (and the Swiss proceedings initiated post Brexit). At the heart of the forum non conveniens argument of some of the defendants in current claim, incl. Ruimy, is the proposition that the Aerium Scheme claims should be heard in Switzerland alongside the other claims advanced against the Mirabaud parties. [65] ff Jacobs J holds that defendants have not shown that Switzerland was clearly or distinctly more appropriate than the English forum.

I do not discuss forum non in detail for the interest of the post lies more with the Article 34 analysis.

This is discussed briefly [118] ff with the judge unfortunately albeit obiter following defendants’ concession that failure of the forum non argument would also sink Article 34. The reasoning seems to be that Article 34’s “necessary for the proper administration of justice” test fails if the third State at issue is not shown to be  the clearly or distinctly more appropriate than the English forum. As I discuss in my paper, this is wrong, and it falls into the same trap as the first instance judge in Municipio. While considerations relevant to the forum non test may play a role in Article 34, it is wrong to conflate the two tests.

As noted this view is made obiter only for the formal reason for the judge to reject the Article 34 defence is his decision that Article 34(1)’s condition  that an action be ‘pending before a court of a third State at the time when a court in a Member State is seised of an action which is related to the action in the court of the third State’, has not been met. Per the Court of Appeal in Municipio, “The action in the third state must be pending before the third state court when the member state court becomes seised of the action” (see also Henshaw J in Viegas v Cutrale[149]).

[122] Swiss proceedings which might potentially be considered to be relating to the English proceedings came too late, they were most definitely not pending at the time of the current English claims.

The only potentially relevant “proceedings”, in the context of Article 34, are the proceedings commenced by the service of the commandements de payer, however, they are held not to qualify: [129]

I agree with PIFSS that the request and issue of the commandements de payer did not mean that proceedings were “pending before a court” of Switzerland. In short, this is because there was no document lodged with any court. Commandments de payer are issued by administrative authorities, not a court. …a commandement de payer is at most a precursor to an action in court. In the present case, there was an objection by the recipient, with the result that court proceedings were then necessary if the requesting party wanted to take matters forward. This is what happened in the present case, when PIFSS did issue civil proceedings against the Mirabaud parties in 2022. But there were no relevant court proceedings issued by PIFSS in Switzerland prior to that time.

A judgment of note.

Geert.

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X v PayPal. Questionable Dutch compulsory settlement jurisdiction reignites discussion similar to English scheme of arrangement tourism. Also raises the question whether compulsory settlements are ‘contracts’ under Rome I.

The Dutch first instance judgment in Groningen  earlier this month, in X v PayPal (Europe) S.a.r.l. & Cie S.C.A., sees claimant debtor essentially seeking a compulsory settlement – CS. PayPal (established in Luxembourg) is the only debtor refusing the settlement proposed by claimant’s bank.

The CS is not listed in Annex I to the Insolvency Regulation 2015/848 (always check for the consolidated version, for the Annex is frequently updated by the Member States’ communication of proceedings to be included). This is where the discussion of scope of application could and should end.

Instead, the judge tests the CS against A1(1)’s abstract criteria. She decides there is neither divestment of assets, nor a temporary stay of individual enforcement proceedings.

This then raises the applicability of Brussels Ia. Seeing as the judge finds the action does not meet with the CJEU F-Tex criteria (Brussels Ia’s insolvency exception only applies to actions which derive directly from insolvency proceedings and are closely connected with them), she holds that Brussels Ia’s ‘insolvency’ exception is not triggered and that BIa applies.

The judge then cuts the corner which English courts in schemes of arrangement have often cut, namely to consider the willing debtors, domiciled in The Netherlands, as ‘defendants’ per Brussels Ia, hereby triggering Article 8(1) BIa’s anchor defendant mechanism. The judge justifies this by stating that the other creditors are interested parties and that it is in the interest of the sound administration of justice that the CS be discussed viz the interested parties as a whole. That may well be so, however in my view that is insufficient reason for A8(1) to be triggered. A8(1) requires ‘defendants’ in the forum state, not just ‘interested parties’. The suggestion that a co-ordinated approach with an eye for all interested parties, justifies jurisdiction, puts A8(1)‘s expediency cart before the A4 ‘defendant’-horse.

The judge then also cuts corners (at least in her stated reasons) on the applicable law issue, cataloguing this firmly in Rome I. She argues that even if the CS is a forced arrangement, replacing a proposed contract which party refused to enter into, it is still a contractual arrangement. That is far from convincing.

Equally not obvious is as the judge holds, that  per A4(2) Rome I, the party required to effect the ‘characteristic performance’ of a compulsory settlement, is the claimant-debtor of the underlying debt, leading to Dutch law being the lex causae.

The judgment at the very least highlights the continuing elephant in the restructuring tourism room, namely the exact nature of these proceedings under Brussels Ia, EIR and Rome I.

Geert.

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GW Pharma v Otsuka. Moçambique rule confirmed as not being engaged in mere contractual dispute. Court of Appeal ia distinguishes direct intellectual property rights validity challenges, and proceedings “principally concerned with” validity.

In GW Pharma Ltd & Anor v Otsuka Pharmaceutical Co. Ltd [2022] EWCA Civ 1462, the Court of Appeal confirmed jurisdiction for the courts of England and Wales, confirming the first instance judgment which I reviewed here.

The first instance judgment dismissing GW Pharma’s application decided three issues: jurisdiction under the Moçambique principle, foreign act of state and a distinct application for a stay on forum non conveniens grounds.

Arguments on appeal are listed [20] ff:

GW Pharma’s grounds 1 and 2 address the Moçambique principle and its application. GW Pharma contend that the judge erred in applying an overly restrictive test for the purposes of the Moçambique principle and further erred in his application of that test to the facts.

Ground 3 addresses the foreign act of state doctrine, and the common law public policy exception. The submission is that the judge erred in law in holding that the act of state doctrine (or common law public policy) did not require the court to decline jurisdiction.

Ground 4 relates to forum non conveniens, contending that the judge erred in declining a stay on those grounds.

Otsuka’s case is that the judge was right for the reasons he gave but Otsuka also advances two additional points in support of the judge’s overall conclusion. The first point is that as well as the exception to the Moçambique rule based on whether a validity challenge is direct or not which the judge applied, there is a second exception – for claims which relate to a contract. This case would also fall within that exception. The second point is a submission that GW Pharma’s case would necessarily involve a country-by-country approach, contrary to the approach adopted by the English courts in related contexts (citing the Supreme Court in Unwired Planet v Huawei [2020] UKSC 37). The relevant principles ought not to be applied so as to prevent Otsuka from bringing its contractual royalty claim against GW Pharma in a single set of proceedings in GW Pharma’s home jurisdiction.

Birss LJ [26] notes, with common sense, that Brussels Ia authority still has relevance, despite the Regulation no longer applying

the fact the Regulation does not apply is a different thing from the question whether aspects of the thinking behind the Brussels Regulation may illuminate questions which do arise.

[29] the main point of UKSC Lucasfilm is summarised as the

modern trend [being] in favour of the enforcement of foreign intellectual property rights, particularly where there is no issue as to validity.

That modern trend of course provokes discussion as to when a claim engages validity as opposed to mere infringement, with Chugai a classic illustration. The judge here sometimes necessarily skates on thin ice for creative counsel may direct the end-result by claim formulation. Here Birss LJ offers a relevant distinction between direct challenges to the validity of a patent, as opposed to proceedings being ‘principally concerned with’ such challenges:

In Chugai there is reference to both the idea of whether a validity challenge is a direct one and also to whether proceedings are “principally concerned with” validity. These two expressions are performing different tasks and it is worth keeping them distinct. A claim consisting of nothing other than a claim for infringement, in which the defendant does not claim that the patent is invalid, but merely requires the court to ask itself, as a guide to construction, what would be the hypothetical consequences for validity if there was infringement, does not involve a direct challenge to validity. Such a claim is also not principally concerned with validity. On the other hand a claim consisting of nothing other than a request for revocation on the ground of invalidity or a declaration of invalidity would be a direct challenge to validity, and would be principally concerned with validity. However a claim raising multiple issues might well properly be said not to be principally concerned with validity, even if one of the subsidiary issues was a direct challenge to validity; but in such a case the court’s response would depend on the circumstances. The court might not decline jurisdiction over the dispute as a whole but might address individual issues separately. If the direct challenge only arises on a contingent basis then the right response might involve case management. Unlike the judge below, I would not describe this latter situation as one in which what was really a direct validity challenge was rendered not a direct challenge owing to its subsidiary nature in the action as a whole. The nature of the challenge is a direct one, but its status in the proceedings as a whole means that they are not principally concerned with it.

This is a discussion which to my mind is also useful for the A24(4) discussion in Brussels Ia, sub judice in BSH Hausgeräte v Electrolux.

[38] ff discusses the long standing exception to the Moçambique rule concerning contracts and equitable obligations. [40] There are said to be two questions in the present case about the contract exception. One is whether it depends on the existence of an exclusive jurisdiction clause in the contract  (answered [42] in the negative] and the other is about the extent of the exception itself. Would it, for example, allow the court to entertain a direct challenge to the validity of a foreign patent which the court would not have had jurisdiction to determine in the absence of the relevant contract (or equitable obligation)? : [43]:

In a way the question is whether the exception really is an exception to a rule that the court has no jurisdiction to determine a claim principally concerned with title (etc.) to foreign land or whether it is really just a manifestation of the proper application of the test for what it does or does not mean to say that a claim is principally concerned with title (etc.). Or putting it another way, can the court, when considering a contract claim, decide on title to foreign land, and by extension the validity of a foreign patent?

[46] that question is answered with reference to the classic in rem v in personam discussion that is part of the original Moçambique rule (and A24(1)BIa)

The contract exception does not allow the court to make a decision about the validity of a foreign patent in rem but it would allow the court to address the validity of a foreign patent in the course of making a decision concerning contractual rights in personam, assuming (such as if the Lear point does work in the way I have described) such a question was relevant to the contract decision.

[48] ff Lord Justice Birss summarises:

Bearing all this in mind, I would state the Moçambique rule as explained and formulated in Lucasfilm, and as it applies to patents in the following way:

First, in a case in which the courts of England and Wales have in personam jurisdiction over a defendant, then the courts have jurisdiction in proceedings for infringement of a foreign patent save where those proceedings are principally concerned with a question of the validity of that patent. The proceedings will not be principally concerned with validity only because the defendant, who does not claim that the patent is invalid, requires the court to ask itself as a guide to construction, what would be the hypothetical consequences for validity if there was infringement. However what the rule does not permit is a direct challenge to the validity of a foreign patent, and (subject to the exception below) the court has no jurisdiction to determine a claim that the foreign patent is invalid.

Second, this Moçambique principle is also subject to a contractual exception. If the case is one in which the court is asked to enforce a contract between the parties then in addition to questions of patent scope/infringement, if and only to the extent that questions of the validity of foreign patents need to be addressed in order to decide on the true nature and scope of the parties’ contractual obligations to one another, then the court can do so.

Applying this summary to the first instance judgment, that judgment is confirmed [60].

The third ground of appeal then invokes the foreign act of State doctrine, in that is is said that (certain) intellectual property rights may be said to depend on the grant or registration by the state. Birss LJ dismisses the argument [73] essentially by suggesting it harks back to bygone notions of intellectual property rights:

even absent the authorities I would hold that as a matter of principle the modern grant of a patent for an invention does not fit within the act of state doctrine as it stands today for two reasons. The first reason relates to the exercise of grant itself. The very word “grant” harks back to a past time, before the Statute of Monopolies 1623, when letters patent were granted on the whim of the Stuart monarchs (and similarly I suspect the Danish monarchy in Blad v Bamfield). Today there is no such condescension by the sovereign power in the grant of a patent by the Comptroller of the Patent Office. Once a properly constituted patent application has been examined and found to comply with the requirements of the law, the Comptroller is required by statute to grant the patent. The relevant words are in s18(4) of the Patents Act 1977 which provide essentially that if the applicant’s application is all in order then ‘the comptroller shall … grant him a patent.’ The second reason follows on from this and was given by Henry Carr J in Chugai at paragraph 68. He observed that once the patent had been granted, any party can challenge the validity of the patent and then can do so in a manner and on grounds which are quite different from an attempt to challenge legislation or government acts such as requisition.

Conclusion on this ground [75]

on grounds of authority and principle, I agree with the judge below that the act of state doctrine is not relevant to the analysis of the court’s jurisdiction in this case.

The first instance judge’s finding on forum non is also confirmed and the appeal therefore dismissed.

I do not know whether, if sought, permission to appeal to the Supreme Court will be granted, but it seems unlikely. The appeal judgment in my view includes important instruction in particular on the ‘principally concerned with’ issue however it largely applies existing UKSC authority.

Geert.

EU Private International Law, 3rd ed. 2021, 2.196 ff.

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Grand Production v GO4YU. Szpunar AG (not, due to suggested inadmissibility) on copyright, VPNs and forum delicti for platform streaming.

Szpunar AG opined a few weeks back in C-423/21 Grand Production v GO4YU  ea. The case involves a variety of issues related to streaming and VPNs, many of which concern telecoms law yet one is of interest to the blog: namely the question whether

in the event of an allegation of infringement of copyright and related rights guaranteed by the Member State of the court seised, that court has jurisdiction only to rule on the damage caused in the territory of the Member State to which it belongs – because the territoriality principle precludes domestic courts from having jurisdiction to determine and examine the facts in relation to foreign acts of infringement – or can or must that court also rule on offences committed outside that territory (worldwide), as alleged by the author whose rights were allegedly infringed?

It transpires from the Opinion however that the case in the national court does not involve one for damages, yet rather one for a temporary injunction prohibiting distribution. To the degree this is aimed at the Serbian defendants at issue, these are domiciled outside the EU and hence not subject for actions in tort, to Brussels Ia. Against the Austrian defendants, the case is subject to full jurisdiction under A4 forum re, hence not triggering the full or partial jurisdictional issues of the relevant CJEU case-law (Bolagsupplysningen etc.).

The AG suggests inadmissibility of the Brussels Ia question.

Geert.

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Stait v Cosmos Insurance. A good reminder of the distinct notion of ‘domicile’ for a natural person under the UK’s implementation of Brussels Ia.

Stait v Cosmos Insurance Ltd Cyprus [2022] EWCA Civ 1429  is a ‘leapfrogged’ appeal direct to the Court of Appeal pursuant to CPR 52.23(1). The issue under appeal is whether Griffith DJ was wrong to decide that Mr Stait, an RAF officer who was at the time of him incurring serious injuries in a cycling accident in Cyprus on 24 October 2017 stationed at the Sovereign Base Area (‘SBA’) at Akrotiri  (Cyprus), was not domiciled in England and Wales.

[16] he SBA has never been part of Cyprus. Nor has it ever been part of the UK. It is not and never has been part of the EU. It is a former colony, now known as a British Overseas Territory. The SBA retains strong connections with the UK, and the UK retains an RAF base on it.

The issue of domicile is relevant to Article 11 Brussels Ia:

1. An insurer domiciled in a Member State may by sued: (a) in the courts of the Member State in which he is domiciled; (b) in another Member State, in the case of actions brought by the policyholder, the insured, or a beneficiary, in the courts for the place where the claimant is domiciled; or (c) if he is a co-insurer, in the courts of the Member State in which proceedings are brought against the leading insurer.”

Article 13.2 provides that

“Articles 10, 11 and 12 shall apply to actions brought by the insured party directly against the insurer, where such direct actions are permitted.”

[22] When read together, the effect of those provisions is to permit a claimant to sue an insurer in another Member State, provided certain conditions are met, in what is called a direct action: CJEU C-463/06 FBTO Schadeverzekeringen NV v Jack Odenbreit is the relevant authority for that.

[22] At [28] in FBTO, the CJEU explained the reason for permitting an injured person to bring a direct action in the courts of the Member State where that injured person was domiciled, namely to afford equivalent protection to that person who was regarded as vulnerable (emphasis added):

“…. To deny the injured party the right to bring an action before the courts for the place of his own domicile would deprive him of the same protection as that afforded by the regulation to other parties regarded as weak in disputes in matters relating to insurance and would thus be contrary to the spirit of the regulation.”

Per A62 BIA of course domicile of natural persons is determined by national law.

[28][29] The UK’s definition of domicile for the application of BIa is unrelated to and narrower than the domestic common law concept of domicile. [35]-[36] parties list their arguments for or against domicile in the UK, with Whipple  LJ [70] concluding

The balance of these factors favours sole residence in the SBA. That was where he was living, with his family. He retained links with England and Wales, certainly, but his life was in the SBA, where he had moved for work purposes, taking his family with him.

and Underhill LJ agreeing in more succinct terms [78] ff.

Geert.

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ROI Land Investments. The CJEU on letters of comfort and their leading to a qualification as employment cq consumer contract for jurisdictional purposes, and on more generous national rules for the protected categories.

In an interesting judgment, the CJEU yesterday held (no English edition yet) in C-604/20 ROI Land Investments Ltd v FD on protected categories suing a defendant not formally associated with the claimant by a clear contract of employment. That the defendant is not domiciled in the EU is in fact of less relevance to the issues.  I had somehow missed Richard de la Tour AG’s Opinion on same (it happens to the best of us).

Claimant in the main proceedings is FD, domiciled in Germany. Defendant is not his current employer and is not domiciled in a Member State. Yet by virtue of a letter of comfort it is directly liable to the employee for claims arising from an individual contract of employment with a third party. The gist of the case is whether an employee can sue this legal person under the employment title if the contract of employment with the third party would not have come into being in the absence of the letter of comfort.

The slightly complex three part construction, transferring relationships of employment, essentially is one of tax optimisation via Switserland. FD used to be employed by ROI Investment, a Canadian corporation, before his contract was transferred to R Swiss, a Swiss SPV created for the very purpose of the operation. ROI Investment via a letter of comfort effectively guaranteed the outstanding wages due to FD. FD’s contract with Swiss was ended, a German court held this to have been done illegally and ordered Swiss to pay a substantial sum whereupon Swiss went into insolvency. FD now wishes to sue the Canadian ’employer’.

CJEU Bosworth is the most recent case which extensively discusses the existence of ’employment’, referring to CJEU Shenavai and Holterman. In ROI Land the CJEU [34] instructs the national court in particular to assess whether there is a relationship of subordination between individual and corporation, even if subordination is actually only one of the Shenavai /Holterman criteria.

Erik Sinander has already noted here (his post came in as I was writing up mine) that this is a different emphasis from the AG: he had suggested a third party who was directly benefitting from the work performed by the employee (“un intérêt direct à la bonne exécution dudit contrat”) should be considered an employer. That to my mind is way too large a criterion and the CJEU is right to stick to the earlier ones.

[35] the CJEU suggests relevant circumstances in the case most probably confirming the relationship of subordination hence of employment: the activities which FD carried out for his two respective employers stayed the same, and the construction via the  SPV would not have been entered into by FD had it not been for his original employer’s guarantee.

The forum laboris in the case at issue is then I assume (it is not discussed quite so clearly in the judgment) determined by the place of habitual performance of the activities for the third party, the formal (now insolvent) employer, not the activities carried out for the issuer of the letter of comfort: for there are (no longer) such activities.

[37] ff the Court entirely correctly holds that more protective national rules cannot trump Brussels Ia’s jurisdictional provisions for the  protected categories: both clear statutory language and statutory purpose support that  conclusion.

[52] ff the CJEU entertains the subsidiary issue raised in the national proceedings as to whether the contract may be considered a consumer contract. It holds that the concept of ‘a purpose outside (a natural person’s) trade or profession’ does not just apply to a natural person in a self-employed capacity but may also apply to an employee. [56] seeing as FD would not have signed the new employment agreement without the letter of comfort, the employment agreement cannot be considered to be outside FD’s profession. Therefore it cannot qualify as a consumer contract.

Geert.

 

 

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