Tag: Regulation 44/2001

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The scope of ‘civil and commercial’ in the Brussels I Regulation (compensation for expropriation under the Nazi regime), and application of joinder to non-EU based defendants: the ECJ in Sapir

The ECJ yesterday issued its ruling in Case C-645/11 Sapir. The issues under consideration were the application of the Brussels I Regulation to proceedings brought by a State (Berlin) against a group of defendants, some of whom were based outside the EU, some inside the EU but not in Germany, and only a limited number in Germany. The request for preliminary review has been made in proceedings between, on the one hand, Land Berlin and, on the other, Ms Sapir, Mr Busse, Ms Birgansky, Mr Rumney, Mr Ben-Zadok, Ms Brown and five other persons, concerning the repayment of an amount overpaid in error following an administrative procedure designed to provide compensation in respect of the loss of real property during persecution under the Nazi regime.

Jurisdiction against the non-German based defendants could only theoretically be established on the basis of Article 6(1) of the Regulation, which allows for plaintiff to identify an anchor defendant in one Member State, and drag other defendants not based there into those proceedings:

‘A person domiciled in a Member State may also be sued:

1.       where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings; (…)

The first issue under consideration was the nature of the proceedings. There was a whiff of ‘public law’ surrounding the procedure, given its core foundation in administrative law procedures and the involvement of a public authority. However the ECJ, and Trstenjak AG with it, considered these not to be material to the nature of the proceedings: the request for repayment of part of the sum was made on the basis of a provision in German law (unjust enrichment) which was generally available and in which neither the public nature of plaintiff nor the substantial grounds on the basis of which compensation was granted, played any role: the basis and the detailed rules governing the bringing of the action were unrelated to the authority acting ius imperii.

The second issue concerned the defendants’ substantial argument against the claim of unjust enrichment: they argued that they are entitled to an amount which exceeds a share of the proceeds of sale as the amount realised through that sale failed to reach the market value of the property and that those additional compensation claims preclude the applicant’s claim of unjust enrichment.  The AG suggested a ‘close connection’ (and thus a possibility to invoke Article 6(1)), as the additional compensation claims lodged fit in perfectly with the identical situation of law and fact in the actions, which the ECJ requires for the application of Article 6(1). Identical legal basis is not required (in particular, one of the defendants, the lawyer representing a large part of the group, was being pursued on the basis of pure tort, rather than unjust enrichment). Only the German laws in question (the Vermögensgesetz and the Investitionsvorranggesetz) can provide the defendants with the legal basis to justify the excess amount they received, which also requires an assessment, for all of the defendants, in relation to the same factual and legal situation.

The third issue concerned the application of Article 6(1) to non-EU residents: this, the Court held, was not the case. Article 6(1) clearly refers expressly to defendants domiciled in the EU. In order to sue a co-defendant before the courts of a Member State on the basis of Article 6(1) , it is necessary that that person should be domiciled in another Member State.

In Case C-51/97 Réunion européenne, the ECJ had similarly (given the need to apply special jurisdictional rules restrictively) held that Article 6(1) cannot be applied to bring an action before the Court of a Member State against a defendant, domiciled in a different Member State, who could only be sued in that Member State by virtue of a joinder with a suit against a party not domiciled in any of the Member States.

The judgment in Sapic is not revolutionary, but useful.

Geert.

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Subrogation of choice of court clauses: The ECJ (succinctly) in Refcomp

The ECJ has issued its ruling in Refcomp, Case C-543/10. I reported on Jaaskinen AG’s Opinion here. The Court effectively confirmed the Opinion, albeit within the boundaries of its customary judicial economy.

Like the AG, the Court first of all limits precedent value to a ‘chain of contracts under Community law’: i.e. a succession of contracts transferring ownership which have been concluded between economic operators established in different Member States of the European Union. It subsequently re-affirms the consensual nature of jurisdiction clauses as insisted on by Article 23 of the Jurisdiction Regulation, and the Brussels Convention before it.  ‘It follows that the jurisdiction clause incorporated in a contract may, in principle, produce effects only in the relations between the parties who have given their agreement to the conclusion of that contract. In order for a third party to rely on the clause it is, in principle, necessary that the third party has given his consent to that effect.’

In a chain of contracts transferring ownership, the relationship of succession between the initial buyer and the sub-buyer is not regarded as the transfer of a single contract or the transfer of all the rights and obligations for which it provides – in contrast with bills of lading for which the Court had previously (Case C‑387/98 Coreck) held that a jurisdiction clause incorporated in a bill of lading may be relied on against a third party to that contract if that clause has been adjudged valid between the carrier and the shipper and provided that, by virtue of the relevant national law, the third party, on acquiring the bill of lading, succeeded to the shipper’s rights and obligations.

Basically, under French law and French law (almost) alone, the action by Doumer against Refcomp would, exceptionally, be considered contractual. In the other Member States, it would not. To refer, the court holds, the assessment as to whether the sub-buyer may rely on a jurisdiction clause incorporated in the initial contract between the manufacturer and the first buyer to national law, would give rise to different outcomes among the Member States liable to compromise the aim of unifying the rules of jurisdiction pursued by the Regulation. The concept of ‘jurisdiction clause’ referred to in that provision therefore must be interpreted as an independent concept, guided by the need to give full effect to the principle of freedom of choice on which Article 23(1) of the Regulation is based.

The ECJ therefore holds that

Article 23 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that a jurisdiction clause agreed in the contract concluded between the manufacturer of goods and the buyer thereof cannot be relied on against a sub-buyer who, in the course of a succession of contracts transferring ownership concluded between parties established in different Member States, purchased the goods and wishes to bring an action for damages against the manufacturer, unless it is established that that third party has actually consented to that clause under the conditions laid down in that article.

Geert.

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No big surprises in Dutch Shell Nigeria / Royal Dutch Shell ruling

Postscript/2015: Shell’s arguments in appeal (in Dutch) on the specfic issue of jurisdiction, may be found here

As reported earlier, Shell’s top holding has been hauled before a Dutch court by a Dutch environmental NGO (Milieudefensie), seeking (with a number of Nigerian farmers) to have the mother holding being held liable for environmental pollution caused in Nigeria. Judgment came yesterday and generally is quite comforting for Shell (and other holding companies in similar situations).

The court stuck to its decision to join the cases, hence allowing Shell Nigeria to be pursued in the Dutch Courts, together with the holding company (against which jurisdiction was easily established under the Brussels I Regulation).  On this point, one imagines, Shell might appeal.

The court held against application of the Rome II Regulation for temporal reasons and did therefore not entertain any (unlikely) options in that Regulation which may  have led to Dutch law: the events which gave rise to the damage occurred before the entry into force of that Regulation. The Court therefore applies lex loci damni. If I am not mistaken, prior to Rome II, The Netherlands applied a more or less complex conflicts rule, not necessarily leading to lex loci damni, neither to lex loci delicti commissi, which was the rule in most EU Member States prior to the entry into force of the Rome II Regulation.

Nigerian law applied and any route to apply Dutch law was rejected.  Incompatibility with Dutch ordre public, for instance, was not withheld. Nigerian law running along common law lines, the court ran through negligence in tort, applied to environmental cases, leading amongst others to the inevitable Rylands v Fletcher. The  court found that the damage occurred because of sabotage, which under Nigerian law in principle exhonerated Shell Nigeria. Only for two specific instances of damage was liability withheld, for Shell Nigeria had failed to take basic precautions.

The conditions of Chandler v Cape (2012) to establish liability for the holding company, were not found to be met in the case at issue. The court did not establish a specific duty of care under Nigerian law (with the loop to the English common law) for Royal Dutch Shell (RDS), the mother company. A general CSR committment was not found not to alter that.

No doubt to be continued in various forms of appeal.

Geert.

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Negative jurisdiction conflicts covered by enforcement title of Brussels I – The ECJ in Gothaer

The ECJ has issued its ruling in C-456/11 Gothaer, the AG’s Opinion in which I reported earlier. The Court first of all confirmed that the term ‘judgment’ within the meaning of Article 32 of Regulation No 44/2001 covers a judgment by which a court of a Member State declines jurisdiction on the ground of an agreement on jurisdiction, even though that judgment is classified as a ‘procedural judgment’ by the law of the Member State addressed.

Moreover, the ECJ held that the court in the Member State in which enforcement is sought, is bound by the finding of the first court – made in the grounds of a judgment, which has since become final, declaring the action inadmissible – regarding the validity of that clause. To justify its finding, it refers in principle to the very definition of recognition as highlighted in the Report Jenard: recognition must ‘have the result of conferring on judgments the authority and effectiveness accorded to them in the State in which they were given’. Accordingly, a foreign judgment which has been recognised under Article 33 of Regulation No 44/2001 must in principle have the same effects in the State in which recognition is sought as it does in the State of origin. It further emphasizes the same arguments as flagged by the AG in coming to its finding.

On the peculiarity that in the case at issue, the choice of court clause points way from the EU, which raises the question what effect can be given to such clauses under the Jurisdiction Regulation, the court concedes that Article 23 does not apply, however, like the AG, it refers to the Lugano Convention, which contains a proviso very much like Article 23 JR. That to me is a bit of an awkward finding: whether the choice of court clause points to a Lugano State or not ought to be irrelevant. It would, through the recognition process, make choice of court in favour of Lugano States in some way less ‘not covered’ by the JR than those pointing to non-Lugano States (and by flagging Lugano, the Court leaves open the question of jurisdiction clauses in favour of non-Lugano States). A further argument made by the court in my view is more convincing, namely the ‘but for’ argument:

To allow a court of the Member State in which recognition is sought to disregard, as devoid of effect, the jurisdiction clause which a court of the Member State of origin has held to be valid would run counter to that prohibition of a review as to the merits, particularly in circumstances where the latter might well have ruled, but for that clause, that it had jurisdiction. (at 38)

Indeed typically the action in the court of origin is taken by the recalcitrant party (i.e. the one acting in spite of a choice of court clause), trying to convince the court of origin that it has jurisdiction on the basis of another Article in the JR, Whence indeed but for the clause, that court would most likely have exercised jurisdiction. A finding of validity of the clause therefore is likely to have been seriously considered. Allowing a court in another Member State to nevertheless exercise jurisdiction and refusing recognition and enforcement,  would make the JR nugatory.  This is in my view no different where as a result (such as here) no court in the EU will be able to hear the case.

Geert.

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Christmas comes early. Council adopts recast of Brussels I Regulation.

Other than for those of the low countries (who will appreciate that this is a Sinterklaas gift and hence impeccably timed), Father  Christmas has brought an early gift on 6 December: Council adopted the recast of the Brussels I Regulation. Council having accepted all of the EP’s amendments (with the Commission not having made any changes since the adoption by Parliament), the text which I reported on earlier, will now be applicable as of early 2015.

I have been taught never to look a gifted horse into its mouth, of course, however as I have flagged on this blog, the recast is not satisfactory in all its parts. Difficulties in practice will remain and future interpretation /adaptation likely. However repetition, too, accords with the festive season.

Geert.

 

 

 

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Subrogation of Choice of court clauses: Opinion AG in Refcomp to intensify debate on harmonisation of European contract law

There are one or two issues in the application of the jurisdiction Regulation where ECJ intervention is eagerly awaited. One of those is the subrogation of choice of court clauses in contracts. Is the party subrogated into the contractual rights and obligations of another, bound by the choice of court clause in the original contract?

The answer to this question so far depends largely on national law. In the absence of common European contract law, there is no general rule.

Relevant facts. In the case at issue, SNC Doumer (‘Doumer’) had renovation work carried out on a building complex located in Courbevoie (France), and had taken out insurance with Axa Corporate Solutions Assurance SA (‘Axa Corporate’), whose registered office is at Paris, France. As part of that work, air-conditioning units each equipped with a number of compressors were installed, which had been:

–        manufactured by Refcomp SpA (‘Refcomp’), whose registered office is in Italy,

–        purchased from that company and assembled by Climaveneta SpA (‘Climaveneta’), whose registered office is also located in Italy,

–        supplied to Doumer by Liebert, to whose rights Emerson Network Power (‘Emerson’), itself insured with Axa France IARD (‘Axa France’), is subrogated, the respective registered offices of which are located in France.

Irregularities occurred in the air-conditioning system following installation. An expert’s report ordered by a court revealed that those failures were caused by a defect in the manufacturing of the compressors. Subrogated to the rights of Doumer, to which it paid compensation as its insured, Axa Corporate summoned the manufacturer Refcomp, the assembler Climaveneta and the supplier Emerson to appear before the Tribunal de grande instance de Paris (Regional Court, Paris), for the purposes of claiming from them in solidum compensation in respect of that defect.

The two Italian defendant companies contested the jurisdiction of the Tribunal de grande instance de Paris, relying, in respect of Climaveneta, on an arbitration clause which appears in the distribution contract between it and Emerson, and, in respect of Refcomp, on a clause conferring jurisdiction on an Italian court which was included in the general terms of the sales contract concluded between itself and Climaveneta.

National court’s decision. The Court of appeal, Paris held that the objection raised by Climaveneta had to be upheld: it argued it did not have jurisdiction to hear and determine the claim brought against that company on the ground that under French law, in a chain of contracts transferring ownership, an arbitration clause was automatically transferred as an appurtenance to the right of action which is itself an appurtenance to the substantive rights transferred, the homogeneous or heterogeneous nature of the chain being of little importance.

By contrast, the Cour d’appel de Paris upheld the lower court’s rejection of the objection of lack of jurisdiction raised by Refcomp. It justified its decision stating that the rules governing special jurisdiction in matters relating to a contract laid down in Article 5(1) of Regulation No 44/2001 did not apply to a dispute between the sub‑buyer of goods and the manufacturer who was not the seller, since such a dispute concerns matters relating to tort or delict, which are governed by the provisions of Article 5(3) of that Regulation, and stated that Article 23 thereof was no longer applicable since the action had no contractual basis.

The case went to the Cour de Cassation which in turn referred to the ECJ. Jaaskinen AG opined on 18 October. Precedent at the ECJ includes Handte, however only in minor aspect. The AG first of all referred to the fact that the Court of appeal’s findings are a result of French law on contracts:

‘the legal theory according to which, although the principle of privity of contract ordinarily applies, in that contracts are binding only on the parties who have signed them, an exception is nevertheless made to that principle where there is a transfer of ownership, ownership being transferred to all the subsequent purchasers of the goods concerned together with all elements appurtenant to it. It follows that, in French law, the sub-buyer of goods may bring an action for damages against the seller, or against any of the intermediaries who sold the goods or even directly against the manufacturer of those goods’ (at 22).

He then proactively distinguishes his Opinion (at 26-28), in particular that the case at issue only concerns situations where the clause is enforced against the subrogated party, not by it. He would also seem to suggest that his Opinion may only hold where the chain is entirely ‘Union’ based: i.e. not where there is a contractual element with parties outside of the EU (however that might just be me reading too much into the ‘Community chain’ reference).

Generally, however, the AG firmly pulls the harmonisation card: choice of court agreements are exempt from the Rome I Regulation; there is therefore no harmonised conflicts rule [see here for the proposals in the current review of the Regulation]; leaving it up to national conflict rules creates uncertainty and, as a method, has been abandoned by Regulation 44/2001 (under the old rules on special jurisdiction for contracts, the Court had to find in Tessili that it could not force a European approach to characteristic performance; this has now changed for a number of usual suspects among contract categories).

The issue therefore needs to be given a European interpretation which, the AG suggests on the basis of the exceptional character of Article 23 and the protection of unsuspecting third parties, needs to be that

‘a clause conferring jurisdiction agreed between the manufacturer of goods and one of the purchasers of those goods which falls within the scope of the provisions of that article does not produce binding effects against the sub-buyer of those goods who is not party to the contract containing that clause, or against the insurer who is subrogated to the rights of the sub-buyer, unless it is established that that sub-buyer agreed to the clause in accordance with the detailed rules laid down in that article.’

While the AG suggests that this is a solution along the lines of the current review of the Regulation, I disagree: that review will lead to a harmonised approach to which conflict of laws rules decide the issue, but not whether privity of contract extends to choice of court agreements. Neither and incidentally, as far as I am aware, does the European Commission proposal for a Common European Sales Law, address the issue of subrogation.

One or two things for the ECJ to ponder.

Geert.

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Negative declarations for tort are covered by Article 5(3) JR – The Court of Justice in Folien Fischer

Does Article 5(3) JR cover an action for declaration as to the non-existence of liability? This was the question in Folien Fischer and it was answered by the ECJ in the affirmative.

Article 5(3) holds a special jurisdictional rule for tort:

A person domiciled in a Member State may, in another Member State, be sued: (…)

3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;

Jurisdiction is established under Article 5(3) for the court of the place where the harmful event occurred ‘or may occur’.

The question on negative declarations for liability in tort was referred for a preliminary ruling by the German Bundesgerichtshof in the course of a dispute between, on the one hand, Folien Fischer AG (‘Folien Fischer’) and Fofitec AG (‘Fofitec’), companies established in Switzerland, and, on the other hand, Ritrama SpA, which has its registered office in Italy. Folien Fischer and Fofitec had been accused of essentially infringement of competition law in their sales practice and in Fofitec’s refusal to grant a license to Ritrama for one of its patents. Ritrama had issued a shot across the bows in sending Folien Fischer a letter alleging the incompatibility with competition law of its commercial practices.

Folien Fischer subsequently took the case to court first, in Hamburg, where it was found to be inadmissible for lack of international jurisdiction. Hamburg had taken its cue from that part of German scholarship which  argued that negative declarations are not covered by Article 5(3), thus leaving Folien Fischer no choice but to seek that declaration in Italy. Upon appeal the issue came before the ECJ.

Unlike Jaaskinen AG, the ECJ itself did not think that the reversal of roles in a negative declaration of liability, merits the non-application of Article 5(3) and the Bier formula. Jaaskinen AG had in so many words suggested that although the Court does not expressly say so in Bier, its holding in that case had a strong whiff about it of protecting the presumed victim, who is generally the claimant in the proceedings. The Court itself laid more emphasis on negative and positive declarations of liability essentially relating to the same matters of law and fact.

Post Bier, the ECJ has had to continue massaging the consequences of that seminal judgment. Bier threatened to open the floodgates to too many potential fora. I believe the Court was wrong in Bier to connect jurisdiction to applicable law (which it did when it found that a variety of fora had ‘natural’ links to the case by virtue of applicable law, or evidence). However follow-up case-law in the meantime (and as often reported on this blog) has taken on large dimensions. Bier /Mines de Potasse now has a large constituency: A complete revisit of the arguments in Bier is probably a tall order (pun intended I fear).

Geert.

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The buck (or copper tube) does not stop here. Forum shopping and European Competition Law in  KME Yorkshire v Toshiba Carrier.

A neat reminder of the relevance of follow-up litigation and anchor defendants in the EU competition law sector. In [2012] EWCA Civ 1190 KME Yorkshire et al v Toshiba Carrier UK at al [2012] EWCA Civ 1190 the Court of Appeal has confirmed that a connected undertaking that had implemented, but not been party to, an anti-competitive agreement, can nevertheless be in breach of Article 101 TFEU (the foundation Article for EU competition law) and therefore ground jurisdiction against all other defendants who had been originally named in the Commission decision fining the companies concerned.

Toshiba et al had been buying large quantities of copper tubes from the group of companies which had been fined earlier by the European Commission (for follow-up litigation at the ECJ see here).

Article 6 of the Jurisdiction Regulation on multipartite litigation and consolidated claims, includes four cases which grant jurisdiction to a court which does not originally have it against some of the defendants and which are effectively joined to its jurisdiction against another. Are all inserted because of procedural expediency and because of the need to avoid irreconcilable judgments. However they all do harbour scope for abuse hence the ECJ has interpreted each of them fairly strictly.

Procedural efficiency and forum shopping often tempts plaintiffs into identifying an ‘anchor defendant’ in one jurisdiction, subsequently to employ Article 6 (or similar provisions in national law for subjects outside of the JR) to engage other parties in the same jurisdiction. The KME decision at the Court of Appeal confirms the kosherness of forum shopping and anchor defendants in cases such as these.

Geert.

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On the latest round in preparing for jurisdiction review: the Parliament report of September 2012

Readers of this blog will have noticed that one is getting quite excited about the impending review of the Brussels I Regulation, the Jurisdiction Regulation. I have previously reported on the impact of some of the Council’s proposals, in light of their June general approach document. Parliament has now added the ultimate input prior to the vote in First Reading in November.

Tadeusz Zwiefka MEP, the rapporteur on the review, has issued his (draft) Report which, much like the Council in its June 2012 document, regroups Parliament’s suggestions for amendment. Mr Zwiefka’s text largely speaks for itself and I shall not repeat it all here. It is clear that alignment between Parliament and Council is near complete, not all of it, I believe, very wisely so (in particular, on the arbitration exclusion and on the protected categories), as I have reported earlier when reviewing the Council’s general approach.

There is one advantage to having the Parliament’s text: it also includes all recitals (as opposed to the Council’s General Approach document which had some recitals included as footnotes, but not all). This clarifies at least one element, namely the application of the consumer title of the Regulation.

I had suggested earlier, that Council’s (and now also Parliament’s) insertion in Article 16(1) of a possible forum against companies not domiciled in the EU, for consumer’s contracts, does not trump the Council’s re-insertion of Article 4 (now as noted, 4(a)), hence the counterparty would still have to be domiciled in the EU, for the consumer contracts section to apply. Parliament’s recital 11(f) now suggests I was wrong:

‘However, in order to ensure the protection of consumers and employees, to safeguard the jurisdiction of the courts of the Member States in situations where they have exclusive jurisdiction and to respect party autonomy, certain rules of jurisdiction in this Regulation should apply regardless of the defendant’s domicile.’

Were this amendment to go ahead, the condition of ‘directing activities to’ the Member State’ in Article 15 JR, will gain ever more importance for the territorial scope of the Regulation.

Geert.

 

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Bot AG on negative conflicts of jurisdiction in Gothaer

Plenty of recognition and enforcement issues to ponder in Case C-456/11 Gothaer.

Krones AG, a German company whose transport insurers are Gothaer and others, had sold a brewing installation to a Mexican undertaking. Krones engaged Samskip GmbH, the German subsidiary of Samskip Holding BV, a transport and logistics undertaking founded in Iceland and established in Rotterdam (Netherlands), to organise and perform the transport of that equipment from Belgium to Mexico under a bill of lading which contained a term conferring jurisdiction on the courts of Iceland. The consignee and Gothaer and Others brought proceedings against Samskip GmbH in the Belgian courts, alleging that the consignment had been damaged during transport.

The Antwerp Court of Appeal (the actual judgment has not been published, however I do have a copy should you be interested) declared, in the operative part of its judgment, that it had ‘no authority to hear and decide the case’ after finding, in the grounds of the judgment, that the term in the bill of lading conferring jurisdiction on the courts of Iceland was valid and that, while Gothaer and Others could sue as successors in title to Krones AG, they were bound by that term. Antwerp did not, incidentally, clarify whether it found the choice of court clause (again: away from the EU) to be covered by the Jurisdiction Regulation or not. The validity of the clause was not sub judice: only the applicability to the insurers was.

Krones AG and Gothaer and Others brought a fresh action for compensation before the German courts: on what grounds is not mentioned in the documents before the ECJ – one assumes Article 2’s general proviso for domicile of the defendant. The Landgericht Bremen (thanks go to Piotr Stenko for a copy of that judgment) stayed the proceedings and referred to the European Court of Justice, raising the question of the legal effects of the judgment given in Belgium.

Bremen’s questions (reformulated by the AG) essentially were

– whether the term ‘judgment’ within the meaning of Article 32 of Regulation No 44/2001 covers a judgment by which a court of a Member State declines jurisdiction on the ground of an agreement on jurisdiction, even though that judgment is classified as a ‘procedural judgment’ by the law of the Member State addressed.

– If the answer to the first two questions is in the affirmative, it has to be determined whether Articles 32 and 33 of Regulation No 44/2001 must be interpreted as meaning that the court before which recognition is pleaded of a judgment by which a court of an other Member State has declined jurisdiction on the basis of an agreement on jurisdiction is bound by the finding relating to the validity and scope of that agreement which appears in the grounds of the judgment.

Article 32 prima facie is a definitional article (as an aside, I have often found it poor legislative technique not to include all definitions in one of the very first articles of the Regulation but rather scattered throughout ). However given that courts of other Member States have no or very little room for manoeuvre not to recognise and enforce ‘judgments’ given in other Member States, what exactly a ‘judgment’ is, evidently is very relevant.

In Gothaer Bot AG summarises the Court’s case law into three criteria: organic, procedural (closely related to organic), and substantive. Most definitely an attractive way to appreciate Article 32 JR.

The first criterion is organic. The judgment must emanate from a court or tribunal, that is to say, a body which acted independently of the other institutions of the State and impartially.  (…) The second criterion, which cannot be separated from the first, is procedural. It requires that the rights of the defence were observed in the procedure which led up to the adoption of the judgment.(…)  The third criterion is substantive. The judgment is characterised by the exercise of a power of assessment by the judicial body from which it emanates. That criterion means that a distinction must be drawn depending on whether the authority has a decision-making role or restricts itself to a more passive function, consisting for example in receiving the intentions of the parties to the proceedings. (…)’ (at 36 ff)

Consequently, in the AG’s view, a judgment by a court in a Member State, finding that it does not have jurisdiction because of a choice of forum clause pointing away from the EU (in the case at issue: Iceland), is a ‘judgment’ within the meaning of Article 32 JR.

The AG then refers to the usual suspects to underline the consequences of that finding: the principle of mutual trust per Gasser and Turner; the strict lis alibi pendens rule; the high degree of predictability built into the Regulation. Consequently (at 53 of the Opinion) the Regulation in the AG’s view includes among judgments that are capable of being recognised judgments by which the court first seised has ruled on its jurisdiction, whether it has declared itself to have jurisdiction or, on the contrary, has declined jurisdiction.

This is clear, the AG suggests where the court declares that it has jurisdiction. However Bot AG suggests it also ought to be the case where the court declines jurisdiction. The court asked to recognise and enforce the judgment, in doing so in cases of the first court refusing recognition, in the AG’s reasoning regains its freedom to review its own jurisdiction under the Regulation. The AG in this respect refers to the need to help avoid negative conflicts: ie one where no court is happy to entertain the claim. As the AG writes at 58,  ‘A conflict of that kind could arise if the court second seised refused to acknowledge the judgment previously given and declined jurisdiction on the ground that the court first seised had jurisdiction.‘

However in the case at issue, of course, the ‘negativity’ of the conflict is such only between EU courts: an Icelandic court may be happy to (indeed feel itself obliged to) take the case, on the basis of the choice of court clause. I researched whether the Icelandic courts have actually done so – and failed to find a record (although that may be due to my dodgy Icelandic). It is likely though that had they actually done so, traces of that would have surfaced in the Opinion.

This is where the answer to the third question becomes relevant: is the court asked to recognise, bound by the substantial reasons of the court which issued the judgment, as to the rejection of jurisdiction? The AG acknowledges that choice of court in favour of a non-EU court is not covered by Article 23 JR – however the AG refers to a similar proviso in the Lugano Convention to justify essentially the extension of the means and motives of the JR to the facts at issue, This is where I disagree with the Opinion: Iceland may be a party to the Lugano Convention – however jurisdiction of an Icelandic court in casu was not established by virtue of the Lugano Convention. Both parties to the contract at issue were domiciled in the EU and employed the JR’s room for court of choice agreements, to agree forum in favour of an Icelandic court.

Agreements granting jurisdiction to a court outside of the EU, are not covered by Article 23. Whether the courts of an EU Member State on that occasion are entitled to decline jurisdiction in favour of the non-EU court, is unclear. In Owusu, the Court of Justice does not answer this question as it was not asked by the High Court. Léger AG does refer to the issue once or twice in his opinion in Owusu however does not really entertain it – as the question was not sub judice. However it would seem fair to say that under the Owuso approach, the ECJ almost certainly would argue that the courts of an EU Member State, where they have jurisdiction under an alternative ground in the Regulation, have to exercise that jurisdiction. The question is not properly answered by the Commission proposal for review, neither is it in my view by the AG in Gothaer. It is to be expected however that the Court given its flavour for judicial economy, will not even go as far as the AG in pondering so many issues.

Geert.

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