Posts Tagged Regulation 1215/2012
Qualifying ‘consumers’ on social media and in the case of assignment. Bobek AG in Schrems v Facebook.
Bobek AG must have picked up his knack for colourful language at Teddy Hall. His Opinion last week in C-498/16 Schrems v Facebook is a delight and one does best service to it by simply inviting one reads it. Now, that must not absolve me of my duty to report succinctly on its contents – the Court itself I imagine will be equally short shrift with claimant’s arugments.
When I asked my students in the August exam to comment on the case, I simply gave them the preliminary questions and asked them how the CJEU should answer them:
1 Is Article 15 of Regulation 44/2001 to be interpreted as meaning that a ‘consumer’ within the meaning of that provision loses that status, if, after the comparatively long use of a private Facebook account, he publishes books in connection with the enforcement of his claims, on occasion also delivers lectures for remuneration, operates websites, collects donations for the enforcement of his claims and has assigned to him the claims of numerous consumers on the assurance that he will remit to them any proceeds awarded, after the deduction of legal costs?
2. Is Article 16 of Regulation (EC) No 44/2001 to be interpreted as meaning that a consumer in a Member State can also invoke at the same time as his own claims arising from a consumer supply at the claimant’s place of jurisdiction the claims of others consumers on the same subject who are domiciled
a. In the same Member State, b. In another Member State: or c. In a non-Member State,
if the claims assigned to him arise from consumer supplies involving the same defendant in the same legal context and if the assignment is not part of a professional or trade activity of the applicant, but rather serves to ensure the joint enforcement of claims?
The long and the short of the case is whether the concept of ‘consumer’ under the protected categories of Brussels I (and Recast) is a dynamic or a static one; and what kind of impact assignment has on jurisdiction for protected categories.
On the first issue, I expected my students to point to the CJEU’s precedent of applying the Regulation with a view to predictability and legal certainty; specifically for consumers, to Gruber and the burden of proof in cases of dual use; and to the Court’s judgment in Emrek. Other than the last issue, the AG points to all. Predictability points to a static approach: I would suggest the AG is right. Bobek AG does leave the door ajar for a dynamic interpretation: at 39: in exptional cases, a ‘dynamic’ approach to consumer status should not be entirely excluded. This could be potentially relevant in the event that a contract does not specify its aim, or it is open to different uses, and it lasts a long period of time, or is even indeterminate. It is conceivable that in such cases, the purpose for which a certain contractual service is used might change — not just partially, but even completely. Social media contracts may lead to such circumstances, one imagines, however there would be many ifs and buts to such analysis: including, I would suggest, the terms of the contract wich the service provider initially drew up.
On the issue of assignment the AG’s approach is entirely logical and not surprising: evidently Herr Schrems cannot have claims assigned to him and then exercise those claims using any other jurisdictional prerogatives then present in the original claim. While these may allow him to sue in the forum actoris of the original consumer, there is no valid argument whatsoever to suggest he could join them to his own domicile. The arguments made de lege ferenda (need for forum shopping in collective consumer redress) are justifiably rejected.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 188.8.131.52.
Thank you Angharad Parry for flagging  EWCA Civ 1609 Koza v Akcil – Angharad has excellent factual background. The case concerns the application of Article 24(2) of the Brussels I Recast Regulation, which assigns exclusive jurisdiction to the Courts of the Member State of the seat in matters relating to the life and death of companies and of the validity of decisions made by their organs:
in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. In order to determine that seat, the court shall apply its rules of private international law;
Referring particularly to C-144/10 BVG and to C-372/07 Hassett, the Court of Appeal at 28 correctly suggests Article 24’s exclusive jurisdictional rules need to be interpreted with their limited purpose in mind: ‘when article 24(2) speaks of proceedings having an “object” it is not referring to the purpose of the proceedings. Rather that phrase is to be interpreted as “proceedings which are principally concerned with” one of the types of subject matter within the article.’ At 37: ‘The task for the court in each case is therefore to determine whether the proceedings relate principally to the validity of the decisions of an organ of the company. A mere link to a decision of the company, or an issue raised which is ancillary to the heart of a contractual or some other dispute, is insufficient to bring the proceedings within the exclusive jurisdiction.’
Floyd LJ at 46 summarises the direction for courts: ‘I do not take from the English or European authorities which were cited to us any suggestion that one is required in all cases to disentangle issues which are interlinked in this way and apply Article 24(2) to each issue separately. On the contrary, faced with such proceedings, the court is required to form an overall evaluative judgment as to what the proceedings are principally concerned with. The position is obviously different from a case where two quite independent claims are made in the same proceedings. Exclusive jurisdiction in relation to each claim would, in those circumstances, have to be determined separately.’ In the case at hand the case was found overall and fundamentally to concern one and the same issue of the validity of decisions of the organs of the company
Consequently the issue is one of looking beyond the particulars of form and into the true nature of the proceedings. Not a decision always made with ease.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading
Aspen Underwriting: When the domicile ship has sailed, litigation splinters. And distinguishing between contract and tort.
Aspen Underwriting v Kairos Shipping et al  EWHC 1904 illustrates the splintering of claims which may well occur when plaintiff chooses to ignore Brussels I’s core jurisdictional rule of domicile of the defendant. Evidently such splintering often is the strategic intention of a plaintiff and even if it does inconvenience them, having part of the claims settled by one court rather than another may still be its overall preference. The case however also highlights important crossed wires between the common law and EU law on the qualification of ‘tort’, and the relation between Rome II and Brussels I (Recast).
The vessel ATLANTIK CONFIDENCE sank in the Gulf of Aden in 2013. It had earlier been held in a limitation Action commenced by her Owners, the First Defendant, that the Vessel was deliberately sunk by the master and chief engineer at the request of Mr. Agaoglu, the alter ego of the Owners. In the current action the Hull Underwriters of the Vessel, who paid out on the hull and machinery policy (“the Policy”) in August 2013 but who now consider, on further investigation, that the Vessel was deliberately cast away by her Owners, claim recovery of the insurance proceeds which were paid to Owners and the Vessel’s mortgagees, Credit Europe Bank NV, the Third Defendant (“the Bank”).
The Bank is domiciled in the Netherlands. and maintains that under the Brussels Regulation the High Court has no jurisdiction to hear and determine the claim against the Bank. It must be sued in the courts of the Netherlands where it is domiciled. The Hull Underwriters maintain that the High Court does have such jurisdiction for three reasons. First, it is said that Bank is bound by a Settlement Agreement which confers exclusive jurisdiction on the court. Second, it is said that the Bank is bound by the exclusive jurisdiction clause in the Policy. Third, it is said that the claims brought against the Bank are matters which relate to tort, delict or quasi-delict and the harmful event occurred in England.
Teare J rejected the first and second argument on the basis of analysis of the settlement. He then looks into Article 7(2) Brussels I Recast. The insurance heading of the Regulation does not apply as the relations concern those between two professional parties (at 72 the High Court refers to C-347/08 Voralberger; the CJEU confirmed later in C-521/14 Sovag).
Whether the claim of misrepresentation leading to the settlement, is one in tort or one in contract depends on how closely one finds it to be connected to the contract at issue (the Settlement). Plaintiff suggests that where such misrepresentations induce a contract, in this case the Settlement Agreement, the resulting claims are not matters relating to tort within the autonomous meaning of Article 7(2) but are matters relating to a contract within Article 7(1).
Teare J settles on the basis of the following convincing argument, at 76: ‘The court is concerned with a claim between the Hull Underwriters and the Bank. The Hull Underwriters allege that misrepresentations made by the Bank induced the Hull Underwriters to enter into the Settlement Agreement with the Owners. They seek to recover damages suffered by the Hull Underwriters as a result of the Bank’s misrepresentations. Whilst there is a factual connection between the claim and the Settlement Agreement I do not consider that that is enough to make the claim a matter relating to a contract and so within Article 7(1). Where there is a claim against the contracting party and it is alleged that the contract should be rescinded on the grounds of misrepresentations made by that party because such misrepresentations induced the contract it can sensibly be said that the subject-matter of the claim is the contract. But in the case of the claim against the Bank I do not consider that it can be fairly said that the subject-matter of the claim is the Settlement Agreement.‘
Now, the claim for damages based upon misrepresentation can be brought in England so long as the “harmful event” occurred in England (at 79; with reference to Bier /Mines de Potasse split into locus delicti commissi and locus damni). Jurisdiction for the claim based on misrepresentation can be brought fully in England because (at 79) ‘either the damage occurred in England (where Norton Rose Fulbright signed the Settlement Agreement and/or where the $22m. was paid to Willis’ bank account in London) or the event giving rise to the damage occurred in London (being the place where the misrepresentations were made and/or the place where the Hull Underwriters were induced).’
At 78 the High Court highlights the difficulty of the qualification viz conflict of laws of restitution based on unjust enrichment. The common law has the precedent of the House of Lords in Kleinwort Benson v Glasgow  1 AC 153. Teare J summarises ‘In that case Lord Goff, with whom the other members of the court agreed on this point, said that a claim in restitution based upon unjust enrichment does not, save in exceptional circumstance, presuppose a harmful event and so is impossible to reconcile with the words of Article 7(2). He was not deterred from reaching this conclusion by the decision in Kalfelis. The claim for restitution in this case is based upon a mistake; it does not require a harmful event, though there might in fact be one as suggested by [plaintiff]. I consider that I am bound to follow the decision of the House of Lords and to hold that the claim in restitution based upon mistake is not within Article 7(2). It must follow that this court has no jurisdiction over that claim and that if it is to be pursued it must be pursued in the Netherlands where the Bank is domiciled.‘
The claim for unjust enrichment cannot be brought in England. Teare J observes the consequence of the Brussels I Regulation (at 80): ‘On case management grounds it is unsatisfactory to reach the conclusion that the tort claim may be brought in England but that the restitution claim may not be brought in England. However, this is the consequence of the Brussels Regulation as was accepted in Kalfelis. Of course, the entirety of the Hull Underwriters’ case against the Bank could be brought in the Netherlands but in circumstances where the Hull Underwriters’ case against the Owners and Managers is being brought in England that also is not satisfactory. The court cannot however base its jurisdictional decisions when applying the Brussels Regulation on considerations of forum conveniens.’
Of note finally is that Kleinwort Benson was issued post Kalfelis but prior to Rome II, which contains a specific heading on unjust enrichment. Notwithstanding its clear non-contractual nature (‘non-contractual’ being the generic title of Rome II which therefore encompasses more than just torts), it is not generally considered a tort: this continues to create issues in the application of Rome II.
A good case to illustrate the lasting challenges in distinguishing contracts from torts.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 184.108.40.206, Heading 220.127.116.11.
As Bot AG put it, Joined Cases C-24 and 25/16 Nintendo v Big Ben gave the Court an opportunity to determine the territorial scope of a decision adopted by a court of a Member State in respect of two co-defendants domiciled in two different Member States concerning claims supplementary to an action for infringement brought before that court.
The case concerns the relation between Brussels I and Regulation 6/2002 – which was last raised in the recent BMW case, particularly as for the former, the application of Article 6(1) (now 8(1))’s rule on anchor defendants. And finally the application of Rome II’s Article 8(2): the identification of the ‘country in which the act of infringement was committed’. In this post I will focus on the impact for Brussels I (Recast) and Rome II.
The Landgericht held that there had been an infringement by BigBen Germany and BigBen France of Nintendo’s registered Community designs. However, it dismissed the actions in so far as they concerned the use of the images of the goods corresponding to those designs by the defendants in the main proceedings.
The Landgericht ordered BigBen Germany to cease using those designs throughout the EU and also upheld, without territorial limitation, Nintendo’s supplementary claims seeking that it be sent various information, accounts and documents held by the defendants in the main proceedings, that they be ordered to pay compensation and that the destruction or recall of the goods at issue, publication of the judgment and reimbursement of the lawyers’ fees incurred by Nintendo be ordered (‘the supplementary claims’).
As regards BigBen France, the Landgericht held that it had international jurisdiction in respect of that company and ordered it to cease using the protected designs at issue throughout the EU. Concerning the supplementary claims, it limited the scope of its judgment to BigBen France’s supplies of the goods at issue to BigBen Germany, but without limiting the territorial scope of its judgment. It considered the applicable law to be that of the place of infringement and took the view that in the present case that was German, Austrian and French law.
BigBen France contends that the German courts lack jurisdiction to adopt orders against it that are applicable throughout the EU: it takes the view that such orders can have merely national territorial scope. Nintendo ia takes the view that German law should be applied to its claims relating to BigBen Germany and French law to those relating to BigBen France.
Taking into account the objective pursued by Article 6(1) of Regulation No 44/2001, which seeks inter alia to avoid the risk of irreconcilable judgments, the existence of the same situation of fact must in such circumstances — if proven, which is for the referring court to verify, and where an application is made to that effect — cover all the activities of the various defendants, including the supplies made by the parent company on its own account, and not be limited to certain aspects or elements of them. If I understand this issue correctly (it is not always easy to see the jurisdictional forest for the many IP trees in the judgment), this means the Court restricts the potential for the use of anchor defendants in Article 8(1).
As for the application of Article 8(2) Rome II, at 98 and following inter alia analysis of the various language versions of the Article, the CJEU equates the notion ‘country n which the act of infringement is committed’ with the locus delicti commissi: ‘it refers to the country where the event giving rise to the damage occurred, namely the country on whose territory the act of infringement was committed.‘ At 103: ‘…where the same defendant is accused of various acts of infringement falling under the concept of ‘use’ within the meaning of Article 19(1) of Regulation No 6/2002 in various Member States, the correct approach for identifying the event giving rise to the damage is not to refer to each alleged act of infringement, but to make an overall assessment of that defendant’s conduct in order to determine the place where the initial act of infringement at the origin of that conduct was committed or threatened.’
At 108 the Court rules what this means in the case at issue: ‘the place where the event giving rise to the damage occurred within the meaning of Article 8(2) of [Rome II] is the place where the process of putting the offer for sale online by that operator on its website was activated’.
At 99 however it warns expressly that this finding must be distinguished as being issued within the specific context of infringement of intellectual property rights: Regulation 6/2002 as well as Rome II in its specific intention for IP rights, aims to guarantee predictability and unity of a singly connecting factor. This is a very important caveat: for while this approach by the CJEU assists with predictability, it also hands means for applicable law shopping and, where the Court’s approach for locus delicti commissi in IP infringement extended to jurisdiction, for forum shopping, too.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 18.104.22.168; Chapter 3.
I discussed this case with my students the day the judgment came out. Copy of the judgment has travelled with me far and wide. Yet I only now find myself getting round to posting on Anas v Facebook, at the courts at Würzburg back in February. Mr Anas came from Syria as a refugee and took a famous selfie with Frau Merkel. The photo later came to haunt him as fake news sites used it in connecting with accusations of terrorism. Mr Anas thereupon sued Facebook, requesting it to act more swiftly to remove the various content reporting on him in this matter. The Würzburg court obliged. I understand that in the meantime Mr Anas has halted further action against FB which I am assuming includes the appeal which FB must have launched.
Now, the interest for this blog lies not in the issue of fake news, but rather the jurisdictional grounds for the ruling. Mr Anas sued Facebook Ireland, not Facebook Inc. The latter, I would suggest, he might have done on the basis of the Brussels I Recast’s provisions on consumer contracts – albeit that the conditions for that title might not be fulfilled if Mr Anas became a FB user in Syria.
The court did not entertain the consumer title. It did uphold its jurisdiction on the basis of Article 7(2) of the Recast, as lex loci damni. (But without consideration of the Shevill limitation). Awkwardly, it then lest my German fails me, goes on to determine its internal jurisdiction on the basis of German civil procedure law. Plaintiff was domiciled in Berlin; not Würzburg. The judgment therefore turns into the proverbial cake and eating it: Article 7(2) does not just lay down jurisdiction for a Member State: it also identifies the very court in that MS that has jurisdiction. It cancels out internal rules of jurisdiction. With Mr Anas’ domicile in Berlin, Wurzburg as locus damni is not immediately obvious.
German speakers, if I am not reading this right please do comment.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.