Posts Tagged Regulation 1215/2012

Ships classification and certification agencies: The immunity ship ain’t sailing according to Szpunar AG in Rina.

In C‑641/18 Szpunar AG opined on Tuesday and notes that the request of the referring court brings to mind the current debate about the influence of human rights on private international law. It seeks to ascertain whether and, if so, to what extent the scope of ‘civil and commercial’ in the Brussels Ia Regulation may be influenced by the interest in ensuring access to the courts, a right guaranteed by Article 47 Charter.

(The case itself is subject to Brussels I which did not yet include ‘acta iure imperii’. As the AG notes at 56, this is merely a clarification following CJEU interpretation of the previous concept.

Relatives of the victims, along with survivors of the sinking of the Al Salam Boccaccio ’98, a ship sailing under the flag of the Republic of Panama, which happened in 2006 on the Red Sea and caused the loss of more than a thousand lives, have brought an action before the District Court, Genoa against the companies Rina SpA et Ente Registro Italiano Navale. Claimants argue that the defendant’s certification and classification activities, the decisions they took and the instructions they gave, are to blame for the ship’s lack of stability and its lack of safety at sea, which are the causes of its sinking.

Defendants plead immunity from jurisdiction. They state that they are being sued in respect of certification and classification activities which they carried out as delegates of a foreign sovereign State, namely the Republic of Panama. They argue activities in question were a manifestation of the sovereign power of the foreign State and the defendants carried them out on behalf of and in the interests of that State.

The AG first of all reviews how the principle of customary international law concerning the jurisdictional immunity of States relates to the scope ratione materiae of Brussels Ia. He starts his analysis noting that in the absence of codification at international level (international conventions on the issue not having met with great success), the principle concerning the jurisdictional immunity of States remains to a large extent governed by customary international law.

There is little use in quoting large sections of the Opinion verbatim so please do refer to the actual text: the AG opines (referring ia to C-154/11 Mahamdia) that it is unnecessary to refer to the principle of customary international law concerning State immunity from jurisdiction when considering the scope ratione materiae of Brussels Ia. Those principles he suggests do play a role when it comes to enforcing any exercise of such jurisdiction against the will of the party concerned.

At 46: ‘the distinction between disputes which are civil or commercial matters and those which are not must be drawn by reference to the independent criteria of EU law identified by the Court in its case-law. Consequently, an act performed in the exercise of State authority (acta iure imperii) from the perspective of the law relating to immunity, is not necessarily the same as an act performed in the exercise of State authority according to the independent criteria of EU law.’ (The latter as readers of the blog will know, are not always clearly expressed; see ia my review of Buak).

In the second place, the AG then considers whether an action for damages brought against private-law entities concerning their classification and/or certification activities falls within the scope of BIa. At 83, following extensive review of the case-law (almost all of which I also reviewed on the blog and for earlier cases, in Chapter 2 of the Handbook), the AG opines that neither the fact that the acts in question were performed on behalf of and in the interests of the delegating State nor the possibility of the State’s incurring liability for harm caused by those acts, in itself conclusively characterises those acts as ones performed in the exercise of powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals. 814/79 Rüffer also makes a non-conclusive appearance.

At 95 then follows the core of the factual assessment: defendants’ role is limited to carrying out checks in accordance with a pre-defined regulatory framework. If, following the revocation of a certificate, a ship is no longer able to sail, that is because of the sanction which, as the defendants admitted at the hearing, is imposed by Panama law. Not acta iure imperii – the issue falls under Brussels Ia.

Finally, must as a result of a plea of immunity from jurisdiction a national court decline to exercise the jurisdiction which it ordinarily derives from the Regulation? In a section which will be interesting to public international lawyers, the AG reviews international and EU law (particularly Directive 2009/15) and concludes that there is no principle in international law which grants immunity to certification agencies in cases such as the one at hand.

To complete the analysis, the AG opines that should the Court disagree with his views on immunity, the national court’s views on jurisdiction would not be impacted by the right to court guarantees of the Charter, for there is no suggestion at all that the victims would not have proper access to Panamian courts for their action.

Note of course that the Opinion does not address lex causae.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.1.

 

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Supreme v Shape: Dutch Appellate Court rules on the merits of immunity and A6 ECHR, takes Luxembourg by surprise.

Update 14 January 2020 see also review by Rishi Gulati here, with cross-references to the postings on gavclaw.com.

With the festive season approaching, I am happy to give the floor to María Barral Martínez, currently trainee at the chambers of Advocate General Mr Manuel Campos Sánchez-Bordona for her update on Supreme et al v Shape.

On 10 December, the Den Bosch Court of Appeal delivered its judgment on the main proceedings of the Supreme et al. v SHAPE case. The case concerns a contractual dispute between Supreme (a supplier of fuels) and SHAPE (the military headquarters of NATO). Supreme signed several agreements (so-called “BOA agreements”) to supply fuels to SHAPE in the context of a military operation in Afghanistan-ISAF-, mandated by the UNSC. Supreme also signed an escrow agreement with JFCB (Allied Joint Force Command Brunssum, a military headquarters subject to SHAPE´s authority) to cover mutual potential payments after the mission/contract termination. In December 2015, Supreme instituted proceedings in the Netherlands against Shape/JFCB requesting the payment of certain costs. Moreover, Supreme sought, in the context of a second procedure, to levy an interim garnishee order targeting the escrow account in Belgium. The latter proceedings -currently before the Dutch Supreme Court- triggered a reference for a preliminary ruling (case C-186/19 « Supreme Site Services»)  as already commented in an earlier post, related to the Brussels I bis Regulation.

In the judgment on the merits, the Appellate Court addressed the Brussels I bis Regulation as well, albeit briefly. The Appellate Court asked parties whether the reference to the CJEU impacts the proceedings on the merits. Both parties were of the opinion that it was not the case. Moreover, the Court itself considered that since Shape and JFCB only invoked in their defence immunity of jurisdiction the parties had tacitly accepted the Dutch court’s jurisdiction.

In regards to the question of immunity of jurisdiction, the Dutch Appellate Court granted immunity of jurisdiction to Shape and JFCB on the basis of customary international law. It found it was inconclusive that immunity of jurisdiction in respect of Shape and JFCB flows from the provisions of the Protocol on the Status of International Military Headquarters Set up Pursuant to the North Atlantic Treaty (Paris Protocol 1952), or the Agreement on the Status of the North Atlantic Treaty Organisation (Ottawa’s Agreement).

On the role of article 6 ECHR, contrary to what the District Court ruled on the judgment under appeal, the Court of Appeal held that Supreme had a reasonable dispute settlement mechanism available to it to submit its claims. Article 6.1 ECHR therefore would not be breached.  It argued that the judge must perform a case by case analysis in order to determine whether the international organisation offers reasonable alternative means to protect the rights enshrined under article 6.1 ECHR, and if needed set aside the immunity of jurisdiction of the international organisation. The Court concluded that the Release of Funds Working Group, which was agreed by the parties to settle any possible contractual differences, can be considered, under Dutch law, as a reasonable dispute settlement mechanism and therefore, the Court has no jurisdiction.

At the public hearing in C-186/19 held in Luxembourg on 12 December, the CJEU could not hide its surprise when told by the parties that the Dutch Appellate Court had granted immunity of jurisdiction to Shape and JCFB. The judges and AG wondered whether a reply to the preliminary reference would still be of any use. One should take into account that the main point at the hearing was whether the “civil or commercial” nature of the proceedings for interim measures should be assessed in the light of the proceedings on the merits (to which interim measures are ancillary, or whether the analysis should solely address the interim relief measures themselves.

Maria.

 

 

 

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Dinant Bar v maître JN. CJEU confirms Bar membership fees are in principle neither civil and commercial nor contractual.

The CJEU on Thursday last week largely confirmed Saugmansdgaard ØE’s Opinion which I reviewed here, in C-421/18 Dinant Bar v maître JN, however with different emphasis than the AG. The Court insists that in accordance with Belgian law, registration with the bar association constitutes a legal obligation to which practising as a professional lawyer is subject, and that individuals wishing to practise that profession must be a member of a bar association and must comply with decisions taken by that association, notably as regards the payment of fees.

Disputes concerning those fees then are not civil and commercial and therefore not covered by Brussels I a, unless,

‘in so far as those fees constitute consideration for services freely consented to, including insurance services, which that bar association may have negotiated with a third party with a view to obtaining more advantageous terms for its lawyer members, the obligation to pay those fees would be of a contractual nature and, therefore, an action initiated with a view to ensuring that that obligation is performed would come within the scope of Article 7(1)(a) of Regulation No 1215/2012. It is for the referring court to ascertain whether that is the case in the dispute in the main proceedings’.

The AG had emphasised the factual circumstances of the case, in which the Bar had lowered the fees for maître JN to the very insurance premium only. In most cases of course Bar fees disputes probably will be about more than that and the Court’s approach may lead to split (non)applicability of Brussels Ia, in which payments for services freely consented to will have to be distinguished from those due in return for public service obligations. (Bar councils may wish to split these sums in their yearly invoice).

Geert.

Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.2.2

 

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Lis alibi pendens denied traction in Lotus v Marcassus Sport.

[2019] EWHC 3128 (Comm) Lotus v Marcassus Sport Sarl concerns the application of Articles 29-30 Brussels Ia – the lis alibi pendens rules.

Lotus, an English company, is a well-known manufacturer of cars. By a series of four written contracts entered in 2016, Lotus appointed Marcassus, a French company in the business of distributing sports cars, as a non-exclusive dealer and authorised repairer of Lotus cars in Toulouse and Bordeaux. Each of these contracts was governed by English law and provided for the non-exclusive jurisdiction of the English courts.

In September 2018 Lotus gave notice terminating one of the four agreements. It is common ground that the parties’ overall relationship thereafter terminated. Marcassus then brought proceedings in the Toulouse Commercial Court, claiming loss of profits and bonuses and seeking to enforce contractual penalties. A summons was filed with the Hussier de Justice on 21 December 2018 for onward transmission to the Foreign Process Section of the High Court for service on Lotus, summoning Lotus to appear in Toulouse on 26 March 2019. Marcassus’ claim was filed at the Toulouse Commercial Court on 7 January 2019. Lotus did indeed appear at the hearing on 26 March 2019 and has served a defence disputing the claim, but not claiming in respect of or relying on Marcassus’ non-payment of the 2018 invoices. Lotus offered to undertake not to make such a claim in the Toulouse proceedings hereafter, provided of course that these proceedings were permitted to continue. Meanwhile, on 13 March 2019, Lotus issued these proceedings claiming the amounts due under the 2018 invoices. Marcassus was served with the claim form on 24 April 2019.

Phillips J first of all (at 15 ff ) deals with the issue of which course was ‘seized’ first (compare MB v TB). Lotus contended that Marcassus’ application should fall at the first hurdle because Marcassus has not demonstrated when, if at all, the summons in the Toulouse proceedings was received by the “authority responsible for service” of that summons for the purposes of A32 Brussels Ia, and so cannot establish that the Toulouse court was seised before the English court was seised by the issue of the claim form on 13 March 2019. Marcassus’ case is that the relevant authority is the Hussier de Justice, it being accepted that he received the summons on 21 December 2018. But, in the alternative, if the relevant authority is the Foreign Process Section of the High Court (as Lotus contends), Marcassus invites the inference that it was received by that authority shortly after that date, but in any event before 13 March 2019. Marcassus points to the fact that Lotus appeared before the Toulouse court on 26 March 2019 and has taken no point on service in those proceedings.

Phillips J decides not to hold on this point given that he rejects Article 29 lis alibi pendens anyway – however he indicates he does not find Lotus’ assertion very attractive.

On Article 29, Marcassus accepted that the proceedings, whilst between the same parties, do not presently involve the same “cause of action” however argued that the court could take into account the likely future shape of the proceedings, namely, that Marcassus would seek to set-off and counterclaim the very same claims it has brought in Toulouse. This approach however cannot fly per CJEU C-111/01 Gantner, at 31: in order to determine whether there is lis pendens in relation to two disputes, account cannot be taken of the defence submissions, whatever their nature, and in particular of defence submissions alleging set-off, on which a defendant might subsequently rely when the court is definitively seised in accordance with its national law” and the Article 29 route was duly dismissed.

On Article 30, the claims were found not to be ‘related’ on grounds of Lotus having secured an exclusion of set-off in the contract (Phillips J spent some time debating whether the contract did include such clear exclusion of set-off). This clause effectively keeps the claims on various invoices at arm’s length.

Even had Article 30’s conditions been met, the case would not have been stayed on grounds that the judge (unlike in A29 cases) has discretion whether to do so. Referring to The Alexandros T, at 44: ‘it is obvious that these proceedings should be permitted to continue so that the question of whether clause 29.2 is an effective no set-off clause is determined in this jurisdiction. That issue. (sic) which does not arise in the Toulouse proceedings (limiting the extent of “relatedness”), is an issue of the interpretation of an English law contract (establishing close proximity with this jurisdiction) and can be determined speedily in a summary judgment application (indicating that the stage proceedings have reached is not a factor against this jurisdiction). Further, the parties have expressly agreed to the jurisdiction of the English courts, albeit on a non-exclusive basis.

Application dismissed.

Geert.

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

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Vestel v HEVC Advance (Delaware) and Philips (NL). High Court denies stand-alone competition law damage both on the basis of Article 7(2) BRU Ia and residual CPR rules.

In [2019] EWHC 2766 (Ch) Vestel Elektronik v HEVC Advance and Koninklijke Philips NV, Hacon J found no jurisdiction in a stand-alone competition law damages case (no finding of infringement yet; claim is one of abuse of dominant position). He rejected the existence of jurisdiction against Philips NV (of The Netherlands) on the basis that no damage existing or potential could be shown grounding Article 7(2) Brussels Ia tortious Jurisdiction. Against the Delaware defendant, the relevant CPR rules applied per Four Seasons v Brownlie did not lead to jurisdiction either.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

 

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PrivatBank v Kolomoisky and Boholiubov. The Court of Appeal reverses the High Court ia on abuse of the anchor mechanism. Further consideration, too, of the reflexive effect of Article 28’s lis alibi pendens, and of Article 34.

The Court of Appeal in [2019] EWCA Civ 1708 has reversed [2018] EWHC 3308 (Ch) PrivatBank v Kolomoisky and Boholiubov et al which I reviewed here. When I tweeted the outcome on the day of release I said it would take a little while for a post to appear, which indeed it has. Do please refer to my earlier post for otherwise the comments below will be gobbledegook.

As a reminder: the High Court had set aside a worldwide freezing order (‘WFO’) granted earlier at the request of Ukraine’s PrivatBank, against Ihor Kolomoisky and Hennadiy Boholiubov – its two former main shareholders.

Fancourt J’s judgment implied in essence first of all, the Lugano Convention’s anchor defendant mechanism, concluding that any artificial fulfilment (or apparent fulfilment) of the express requirements of Article 6.1 is impermissible, and this includes a case where the sole object of the claim against the anchor defendant is to remove the foreign defendant from the jurisdiction of domicile. Bringing a hopeless claim is one example of such abuse, but the abuse may be otherwise established by clear evidence. In principle, the fact that there is a good arguable case against the anchor defendant should not prevent a co-defendant from establishing abuse on some other ground, including that the “sole object” of the claim is to provide jurisdiction against a foreign domiciled co-defendant.

The English Defendants serving as anchor, were not considered legitimate targets in their own right and hence the ‘sole object’ objection was met. 

The Court of Appeal in majority (Lord Newey at 270 ff dissenting) disagreed and puts particular emphasis on the non-acceptance by Parliament and Council at the time of adoption of Brussels I, of an EC proposal verbatim to include a sole object test like was done in Article (then) 6(2) (it also refers to drafters and rapporteur Jenard making a bit of a muddle of the stand-alone nature, or not, of the sole object test). Following extensive consideration of authority it decides there is no stand-alone sole object test in (now) Article 8(1) Brussels I (or rather, its Lugano equivalent) but rather that this test is implied in the Article’s condition of connectivity: at 110: ‘we accept Lord Pannick’s analysis that, as shown by the references to Kalfelis and Réunion,..that the vice in using article 6(1) to remove a foreign defendant from the courts of the state of his domicile was met by a close connection condition.’

Obiter it held at 112 ff that even if the sole object test does exist, it was not met in casu, holding at 147 that the ability to obtain disclosure from the English Defendants provided a real reason for bringing these proceedings against them.

Fancourt J had also added obiter that had he accepted jurisdiction against the Switzerland-based defendants on the basis of the anchor mechanism, he would have granted a stay in those proceedings, applying the lis alibi pendens rule of Lugano reflexively, despite the absence of an Article 34 mechanism in Lugano. The Court of Appeal clearly had to discuss this given that it did accept jurisdiction against the Switserland-based defendants, and held that the High Court was right in deciding in principle for reflexive application, at 178: ‘This approach does not subvert the Convention but, on the contrary, is in line with its purposes, to achieve certainty in relation to jurisdiction and to avoid the risk of inconsistent judgments.’

That is a finding which stretches the mutual trust principle far beyond Brussels /Lugano parties and in my view is far from clear.

However, having accepted lis alibi pendens reflexively in principle, the Court of Appeal nevertheless held it should not do so in casu, at 200 as I also discuss below: ‘the fact that consolidation was not possible was an important factor militating against the grant of a stay, when it came to the exercise of discretion as to whether to do so’.

Finally, stay against the English defendants was granted by the High Court on the basis of A34 BIa, for reasons discussed in my earlier post. On this too, the Court of Appeal disagreed.

Firstly, on the issue of ‘related’ actions: At 183: ‘The Bank argues that the actions are not “related” in the sense that it is expedient to hear and determine them together, because consolidation of the Bank’s claim with Mr Kolomoisky’s claim in the defamation proceedings would not be possible. It is submitted that unless the two actions can be consolidated and actually heard together, it is not “expedient” to hear and determine them together. In other words, the Bank submits that expediency in this context means practicability.’ The Court of Appeal disagreed: At 191: ‘The word “expedient” is more akin to “desirable”, as Rix J put it, that the actions “should” be heard together, than to “practicable” or “possible”, that the actions “can” be heard together. We also consider that there is force in Ms Tolaney’s point that, if what had been intended was that actions would only be “related” if they could be consolidated in one jurisdiction, then the Convention would have made express reference to the requirement of consolidation, as was the case in article 30(2) of the Recast Brussels Regulation.’

Further, on the finding of ‘sound administration of justice’: at 211: ‘the unavailability in the Ukrainian court of consolidation of the Bank’s current claim with Mr Kolomoisky’s defamation claim remains a compelling reason for refusing to grant a stay. In particular, the fact that the Bank’s claim would have to be brought before the Ukrainian commercial court rather than before the Pechersky District Court in which the defamation proceedings are being heard means that if a stay were granted, the risk of inconsistent findings in these different courts would remain. Furthermore, we accept Lord Pannick’s overall submission that, standing back in this case, it would be entirely inappropriate to stay an English fraud claim in favour of Ukrainian defamation claims, in circumstances where the fraud claim involves what the judge found was fraud and money laundering on an “epic scale” ‘

Finally, at 213, ‘that the English claim against Mr Kolomoisky and Mr Bogolyubov and the English Defendants should be allowed to proceed, it inevitably follows that the BVI Defendants are necessary or proper parties to that claim and that the judge was wrong to conclude that the proceedings against the BVI Defendants should be set aside or stayed.’

One or two issues in this appeal deserve to go up to the CJEU. I have further analysis in a forthcoming paper on A34.

Geert.

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

 

 

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