Sánchez-Bordona AG in ZK v BMA on applicable law for the Peeters Gatzen insolvency suit. Includes important suggestions for the corporate life (lex societatis) exception and duty of care.

Sánchez-Bordona AG opined at the end of October on the law applicable to the Peeters /Gatzen suit (of Nk v BNP Paribas fame) in Case C‑498/20 ZK, in his capacity of successor to JM, insolvency practitioner in the insolvency of BMA Nederland BV v BMA Braunschweigische Maschinenbauanstalt AG – ZK v BMA for short. An English version of the Opinion is still not available.

Peeters /Gatzen is a tortious suit brought by a liquidator. In Nk v BNP Paribas the CJEU held it is covered by Brussels Ia, not by the Insolvency Regulation. The obvious applicable law port of call is Rome II. A first point which the AG discusses is a rather important discussion on the lex societatis exception to Rome II. The extent of that exception is important e.g. also for business and human rights cases, for the Peeters /Gatzen suit essentially engages duty of care towards third parties.

The AG emphasises (35) one of my points of attention in the BIa /Rome I/II interplay: that in accepting a certain amount of consistency in interpretation, the courts must nevertheless appreciate each instrument’s autonomy and quite different subject-matter. (46) The reasoning behind the exclusion of the lex societatis from the 1980 Rome Convention is said to be the ambition at the time to harmonise company law across the EU which, as we know from CJEU Daily Mail and all its successors, has still not come true. The AG then refers to the internal /external dimension of corporate relations such as discussed in C‑25/18 Kerr and C‑272/18 Verein für Konsumenteninformation. However he then suggests (51) that the reference to the ‘internal’ dimension of the life of a corporation does not suffice to justify 2 of the examples which Rome II explicitly lists in A1(2)d as being part of the corporate exception: the
personal liability of officers and members as such for the obligations of the company or body and the personal liability of auditors to a company or to its members in the statutory audits of accounting documents.

At (52-53) he then posits his way out of the conundrum, immediately acknowledging that the criterion he suggests may not be easily applicable: all contractual and non-contractual elements for which a specific solution exists which emanates from the relationship between those elements and the internal life and mechanisms of a corporation (whether they relate to the internal workings or the external relations), are covered by one statutory corpus, namely the lex societatis. Put differently, they are excluded insofar as and because their corporate law element absorbs all other. Specifically viz non-contractual obligations, if the relevant rule is so ‘drenched’ with elements specific to the corporate law context that it looses its meaning outside that context, that rule qualifies as being part of the lex societatis exception.

He immediately acknowledges (56) that this kind of litmus test is not easy to apply in practice and suggest (57 ff) to employ the ratio legis of the liability at stake to assist with the exercise. If that ratio lies in the general neminem laedere rule, Rome II is engaged. If that ratio however immediately follows from corporate law considerations, such as a director’s loyalty to the corporation, the exception is engaged. The AG lists examples (63), including the scenario at stake in CJEU OFAB. At (66) the AG concludes, albeit not directly, that the Peeters Gatzen suit in all likelihood is not covered by Rome II and he discusses the other questions in subsidiary fashion.

(67ff) with reference ia to CJEU Lazar the CJEU refers to the tricky characterisation of damage as (in)direct and opts in cases such as these that the direct damage occurs in the insolvent (or otherwise facing liquidity issues) corporation: the diminishing impact on the creditors is indirect, ricochet. Locus damni therefore is The Netherlands if the referring judge finds that the insolvent corporation’s estate is based there. (76) Whomever initiates the suit (the insolvency practitioner and /or the creditors) is irrelevant, as is (80) the fact that some of the creditors are located outside the EU.

(83ff) then follows the discussion of A4(3) Rome II’s escape clause (most recently discussed in Scott v AIG). A pre-existing contractual relationship (which the AG suggests (95ff) may also be called upon by claimants that are not party to that relationship) is just one among many factors that may play a role – not a particularly dominant one: (93-94) particularly where such relationship (such as here, taking the form of a credit facility) is one where choice of law was made: A4(3) RII is directed at situations where the non-contractual relationship has a closer connection to a law other than the locus damni. Lex voluntatis does not necessarily reflect the tort’s closer relationship but rather the parties’ voluntary expression.

An important Opinion.

Geert.

EU Private International Law, 3rd ed 2021, para 4.22.,  para 4.39 ff.

O’Loan and Scott v MIB and AIG. On the meaning of ‘the tort’ in Article 4(3) Rome II’s displacement rule.

O’Loan and Scott v MIB and AIG (Fintan O’Loan and Elisabeth Scott v Motor Insurance Bureau and AI Europe SA) involves the same Loi Badinter that was also the subject of Marshall v MIB. I was alerted to the case buy Ian Denham’s post. Judgment is as yet unreported and I am grateful to Ian for having sent me copy.

The contested claim is the one of Ms Scott v AIG. She was the front seat passenger of the hire car, insured by AIG and driven by Mr O’Loan, her partner, when the car was driven into by an uninsured, French registered car. Ms Scott therefore turns to the driver, her partner (in reality, the insurer of the hire car), to have her damage covered under the strict liability (no need to show fault) rule of the French Loi Badinter.

To get to French law however she needs to overcome Article 4(2) Rome II’s provision that in case victim and party claimed to be liable are habitually resident in the same country at the time the damage occurs, the laws of that country apply. A4(3) is the portal to that escape route:

(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

It was conceded by both parties [12] that the district judge cut quite a few corners on the A4(3) analysis and Platts J therefore started afresh. Winrow v Hemphill of course was referred to, as was Owen v Galgey (the conclusions of which I disagreed with).

The judge notes (as does the Handbook: para 4.39) that it is important to identify what is meant by “the tort/delict’ in A4(3) before considering whether that tort/delict is more closely connected with a country other than England. A4(3) holds that ‘the tort’ (not individual elements of the tort, such as the event and/or the damage and /or anything singular at all) needs to be ‘more closely connected’.

I disagree with the judge [23] that ‘the tort’ or ‘delict’ clearly refers to the event which caused the damage, or ‘the incident’ [24]. In the case of a tortious obligation ‘the tort’ arguably refers to the classic 3 elements of event, damage, and causal link between the two (all three here clearly referring to France). I do agree it does not refer to the cause of action which arises from the incident [24]. While linguistically speaking that may be caught be ‘the tort’ for it would be one of its consequences, it would also mean that remedies available, or not, for instance would play a role in determining lex causae. Where Rome II envisages such assessment, it says so explicitly: such as in Article 7’s environmental damage rule.

The judge’s reasons for opting for displacement are [30]

I therefore consider the connection with France to be manifestly closer than the connection with England: the collision was in France; it was between two vehicles registered in France; the damage was caused in France in that the initial injury was suffered in France. Further, the circumstances were such that the claim of first claimant is to be dealt with under French law.

That last element is in slight contradiction I find to the judge’s consideration signalled above, that an advance on (remedies available or not under the) lex causae, must not play a role. If that is the case for claimant seeking to overturn A4(2)’s presumption, arguably there must not be a role either for the lex causae of other claims involved in the case.

Of note is the judge’s emphasis on the vehicles both being registered in France. If that is an element, travellers of countries without strict liability rules, might have a strong incentive indeed to hire cars rather than drive their own when driving in EU Member States with strict liability rules such as the Loi Badinter.

Appeal dismissed, for the result is the same (French law applies) even if the route to it was quite different from the first judge.

I do not think the analysis on ‘the tort’ is quite there yet.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 4.5.2 (para 4.39 ff).

 

Silverman v Ryanair. The High Court unconvincingly on the Montreal Convention, lex fori as lex causae for the interpretation of ius gentium, qualifying air carriage claims under Rome I, II, and displacing lex loci damni under the latter.

In Silverman v Ryanair DAC (Rev1) [2021] EWHC 2955 (QB), claimant was injured whilst going down stairs at an airport terminal in England. The claim is subject to EU private international law. Jurisdiction for the English courts in this personal injury claim is not disputed.

Under A5 Rome I, contracts for carriage of goods are subject to the ordinary lex voluntatis rule, while for carriage of passengers, parties can only choose from a limited selection of leges contractus. The standard approach is for  general terms and conditions to select the law of the carrier’s habitual residence or his place of central administration, which is entirely kosher under Rome I. Unless the booking qualifies as package travel, it essentially means that passengers are generally less protected than ordinary consumers under A6 Rome I.

In the case of Ryanair, the default choice inevitably leads to Irish law, except in this case (because Irish law would lead to higher damages), the airline unusually seeks to divert from its default choice of law.  The airline’s relevant clause, reads

8.2.4: Governing Law: “Except as otherwise provided by the Convention or applicable law, your contract of carriage with us, these Terms and Conditions of Carriage and our Regulations shall be governed by and interpreted in accordance with the laws of Ireland and any dispute arising out of or in connection with this contract shall be subject to the jurisdiction of the Irish Courts.”

The Montreal Convention for the Unification of Certain Rules for International Carriage by Air 1999 is unaffected by Rome I as a result of the Regulation’s A25, which gives clear priority to multilateral Conventions at least if the Convention concerned also includes non-EU Member States. The Convention also operates to make the choice of court provision invalid, as discussed ia in CJEU  C-213/18 Adriano Guaitoli et al v Easyjet.

Claimant however argues that assessment of quantum of damages is not regulated by Montreal and therefore remains subject to the lex voluntatis. This is where the second line of Ryanair’s defence comes in, namely an attempt to qualify the claim as one in tort, subject to Rome II’s lex loci damni rule, rather than Rome I’s lex voluntatis.

In essence therefore the question is a matter of Treaty interpretation viz the Montreal Convention (what does it mean to regulate in its provisions on liability and damages), subsequently secondary EU law interpretation viz Rome I and II (qualification: is it a claim in contract or tort, and once that held, does the lex casuae indicated by the relevant Regulation, cover quantum of damages).

Master McCloud turns to international comparison not by way of binding authority but pro inspiratio seeing as the case concerns an international Convention [52]. Scalia J’s ‘Pass-through’ approach to the lex fori’s choice-of-law rules in Zicherman (1996) is the approach also followed in this judgment. The judge uses the formulation by Bader Ginsburg J in El Al Israelthat Warsaw drafters intended to resolve whether there is liability, but to leave to domestic law (the local law identified by the forum under its choice-of-law rules or approaches) determination of the compensatory damages available to the suitor.”

Comparative case-law analysis makes sense. However one would have thought a starting point should have been analysis of the Convention and its travaux itself. Master McCloud does get to that when considering the rather awkward , counsel-inspired idea that there needs to be a discussion of the law that applies to the interpretation of the Convention. Determining the ‘Applicable law to matters of interpretation of the Convention’ might perhaps make sense in a dualist jurisdiction like the UK?

At [59] the judge holds the lex causae for interpretation of the Convention is the lex fori, English law therefore. At [61] he calls this

Convention law as understood by this court, ie the lex fori in that rather special international sense.’

Here I am lost.

The judge then employs the ‘natural language’ approach to determine what parts of the Montreal liability scheme parties can and cannot contractually be negotiated away.

Only the liability issues that have ‘passed through’ to the lex fori are then considered with a view to determining the qualification exercise: is the claim one in contract or one on tort. The judge raises the possibility that the claimant could have construed the claim as being a ‘Convention claim incorporated in the contract’ [64] however he holds that claim is not brought on that footing:

‘the Claim and Particulars are clear: they plead a claim for damages for breach of the Convention, they do not plead a claim in the law of contract’ [64].

That, I would submit, is wrong. The claim is subject to European conflict of laws rules. These require the judge to qualify the claim subject to the autonomous interpretation of ‘contract’ and ‘non-contractual obligation’ as most recently discussed by the CJEU in Wikingerhof. While I am the first to acknowledge claim formulation is a powerful tool to manage qualification (indeed Wikingerhof confirms as much), I do not think deference to claimant may be as large as suggested here.

The judge proceeds with the non-contractual nature (causing injury to the claimant through negligence [65]), points out that the Convention covers both contractual and non-contractual claims [66] and seeks support in his analysis on tort and contract in Prof. Thomas Kadner Graziano’s 2016 paper in the Yearbook of Private International Law. With respect, I do not think Thomas’ paper supports the conclusions in this case.

At [72][73] the judge then rather summarily and using A4(3) Rome II displaces the lex loci damni for the ‘passed through’ claim, in favour of Irish law, the lex contractus to the contract of carriage. Once the Rome II path chosen (of which, per above, I am not convinced), I do not think the lex loci damni may be pushed aside quite as concisely as this.

The relationship between international Conventions and European conflicts rules is not always straightforward. Yet here I think it has been presented a touch too convolutedly.

Geert.

Forever chemicals, and suing 3M for PFAS pollution in Europe. A flag on applicable law.

On Friday, together with my learned colleague at both Bar and Faculty Isabelle Larmuseau, I was asked to put my environmental law hat on at the Flemish Parliament. I was heard  on the current scandal hitting Flanders following PFAS (‘forever chemicals’) emissions by 3 M at the port of Antwerp. For background to PFAS see here.

Isabelle’s slidedeck for same is here (updated at 09:28 on 31 August to correct earlier pdf which contained an earlier version of the slides), and mine here. Both are in Dutch, with Isabelle’s focusing on the Flemish environmental law angle (albeit with strong EU law influence, necessarily) and mine on the EU and international law context).

Focus of the debate is on environmental /public health law however for my conflicts followers there is a treat. A civil law suit by Belgian and /or other [the port of Antwerp is very close for instance to the Dutch border. Emissions in air, water and soil (for the latter, particularly if exported) clearly impact Dutch citisens, say] claimants against 3M’s Belgian corporate presence is easily pursued both in Belgium (Article 4 Brussels Ia) and in other Member States (Article 7(2) locus damni). Residual private international law in all these States would fairly straightforwardly allow for the suit to be extended to 3M’s corporate mother, based at St Paul, Minnesota.

The more exciting bit is applicable law. The impact of common US (State) law on forever chemicals suits is well documented. Despite EU courts not willing to apply the punitive damages elements of these suits, an application of the other elements of US tort law may well be very attractive to claimants here. Those US laws are certainly within reach of claimants, using Article 7 Rome II. There is no question the damage ‘arises out of’ environmental damage (unlike the hesitation in Begum v Maran). There is certainly merit in the suggestion that locus delicti commissi is in St Paul, Minessota. Like with its fellow manufacturers and industrial users of PFAS, 3M’s worldwide grip on corporate communication and legal strategy on the issue is tight. More importantly, the decision tree on the manufacture, use and emissions of PFAS is arguably equally located at holding level. Reference here can be made to the relevance of Shell’s holding policy in lex causae determination in the recent climate ruling.

Clearly, via A17 Rome II, Flemish and of course European environmental law would play a role (cue Isabelle’s slidedeck for an excellent starter).

A collective action procedure in say The Netherlands in my view would be an ideal strategy to test these most murky waters.

Geert.

EU Private International Law, 3rd. ed. 2021, Chapter 4, Heading 4.6.3 (4.54 ff).

Lakatamia Shipping. On (in)direct damage, applicable law (A4(3) Rome II) and conspiracy.

Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm)  discusses i.a. [840 ff; this is a lengthy judgment] the applicable law in the case of conspiracy. Lakatamia advance two claims against the Defendants, the first re dissipation of two assets (net sale proceeds of two Monegasque villas – the Monaco conspiracy and a private jet – the Aeroplane conspiracy)  in breach of a World Wide Freezing Order (“WFO”)  and secondly re intentional violation of rights in a judgment debt.

Lakatamia’s case as claimants is that English law applies to the claims regarding both conspiracies, whilst Madam Su’s case is that Monaco law applies to the claim regarding the Monaco Sale Proceeds and that an unspecified law (but not English law) applies to the Aeroplane Conspiracy.

None of the specific categories of torts in the Rome II Regulation are said to apply, bringing the focus therefore on the general rule of Article 4(1), with firstly its insistence that only direct damage determines lex causae, not indirect damage.

At 843 Bryan J, like claimants, focuses on the judgment:

the focus being on the freezing order and judgment, with the damage to Lakatamia being suffered in England as that is the situs of the Judgment Debt arising out of the Underlying Proceeding in England, policed by the… Freezing Order, and that is where the Judgment Debt stands to be paid, and where Lakatamia suffers damage if it is not paid or the ability for it to be paid is impaired – put another way England is the country where the Judgment Debt should have been paid, and the damage has accordingly occurred here.

To support the point, at 845 ff English and CJEU authority (much of it also reviewed on this blog) under A7(2)BIa is discussed albeit the judge correctly cautions ‘Authorities on the Brussels Regulation are “likely to be useful” but are not of direct application’. Core reference is Pan Oceanic,

(6)  There is a difference between a case in which the claimant complains that he has lost his money or goods (as in the Marinari case [1996] QB 217 or the Domicrest case [1999] QB 548 ) and a case in which the claimant complains that he has not received money or goods which he should have received. In the former case the harm may be regarded as occurring in the place where the money or goods were lost, although the loss may be said to have been consequentially felt in the claimant’s domicile. In the latter case the harm lies in the non-receipt of the money or goods at the place where they ought to have been received, and the damage to him is likely to have occurred in the place where he should have received them: the Dolphin case [2010] 1 All ER (Comm) 473 , para 60 and the Réunion Européenne case [2000] QB 690 , paras 35-36. (emphasis in the original).

I am not entirely convinced. While it is true that the conspiracy clearly impacts on the receipts, this is the consequence of actual behaviour by defendants elsewhere, with actual impact of that behaviour in that same place abroad. I do not think it is inconceivable to qualify the damage in England as ricochet hence indirect damage. The discussion here leads to CJEU Lazar which, it would seem, was not discussed in the proceedings.

At 860 at any rate, the judge lists his reasons for picking English law as the ‘proper law of the tort’ per A4(3) Rome II. This may be a more solid decision than the A4(1) decision.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.30, para 4.39 ff.

Applicable law in cases of purely economic loss following judgment in Vereniging van Effectenbezitters.

I have reported before on the jurisdictional consequences of CJEU Vereniging van Effectenbezitters v BP. In this post for the European Association of Private International Law, I give my views on the impact for applicable law.

Geert.

Applicable law (Article 4 and 7 Rome II) in the Dutch Shell climate ruling. Not quite as momentous as the core message.

I have an article forthcoming on the application of Rome II’s Article 7, ‘environmental damage’ rule. Last week’s widely reported first instance ruling in the Dutch Shell climate case will of course now feature.

I reported on application of A7 in Begum v Maran. There I submit, the Court of Appeal engaged without sufficient depth with the Article. It held against its application. Xandra Kramer and Ekaterina Pannebakker then alerted us to the use of Article 7 in last week’s momentous Milieudefensie v Shell (umpteen) ruling [Dutch version here, English version here], in which Shell by a first instance judge has been ordered to reduce its CO2 emissions. In that ruling, too, the judges leave a lot of issues on Rome II underanalysed. The conclusion  however goes in the opposite direction: the court held A7 is engaged and leads to Dutch law as the lex loci delicti commissi (Handlungsort or ldc).

I have taken the Dutch version of the judgment as the basis for the analysis for the English version is a touch under par when it comes to the finer detail. The Dutch version it has to be said is not entirely clear either on the conflict of laws analysis.

Firstly, Milieudefensie argue that A7 is engaged, and it suggests it opts for Dutch law given the choice left to it by that Article. Whether it does so as lex loci damni (Erfolgort or ld) or lex loci delicti commissi is not specified. It is reported by the courts that in subsidiary fashion Milieudefensie argue that per A4(1)’s general rule, Dutch law is the lex causae: that has to be Erfolgort.  (Lest the court inaccurately reported parties’ submissions here and the argument made under A4 focused on Article 4(3)’s displacement rule) [4.3.1].

The judges further report [4.3.2] that parties were in agreement that climate change, whether dangerous or otherwise, due to CO2 emissions constitutes ‘environmental damage’ in the sense of A7 Rome II (and the judges agree) and that they were in disagreement on the locus delicti commissi. Milieudefensie argue that Shell’s holding policy viz climate change and emissions, dictated from its corporate home of The Netherlands, is that Handlungsort. Shell argue that the place of the actual emissions are the Handlungsorts (plural), hence a Mozaik of applicable laws. (This nota bene has interesting applications in competition law, as I suggest here).

Then follows a rather sloppy reference to Jan von Hein’s note bene excellent review of Article 7 in Calliess; distinguishing of the arguments made by Shell with reference to ia product liability cases; and eventually, with reference to ia the cluster effect of emissions (‘every contribution towards a reduction of CO2 emissions may be of importance’ [4.3.5]) and the exceptional, policy driven nature of A7, the conclusion [4.3.6] that the holding policy is an independent cause of the CO2 emissions and hence imminent climate damage and obiter [4.3.7] that A4(1) would have led to the same conclusion.

The ruling will of course be appealed. It would be good to get the application of Article 7 right, seeing as environmental law is a core part of strategic and public interest litigation.

Geert.

EU Private International Law, 3rd. ed. 2021, Chapter 4, Heading 4.6.3 (4.54 ff).

Skatteforvaltningen v Solo Capital Partners. Unfinished business on endangering Brussels Ia’s effet utile, ‘civil and commercial’ in revenue matters, enforcing foreign public law and Dicey Rule 3.

At issue in Skatteforvaltningen (The Danish Customs And Tax Administration) v Solo Capital Partners LLP & Ors [2021] EWHC 974 (Comm)  is ‘Dicey Rule 3’ which states that “English courts have no jurisdiction to entertain an action: (1) for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign State; or (2) founded upon an act of state“. The assertion of such claims is an extension of a sovereign power of taxation and, per Lord Keith of Avonholm in Government of India v Taylor [1955] A.C. 491, 511: “an assertion of sovereign authority by one State within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties“.

By its claims, SKAT (Danish customs and excise) seeks the return of amounts it says it was wrongly induced to pay out as tax refunds.

Brussels Ia and Lugano (the latter viz a number of defendants domiciled in Lugano States) feature in the discussion because SKAT argue that [22] ‘: (i) this is a ‘civil and commercial matter’, not a ‘revenue, customs or administrative matter’, under A1(1) BIa; and (ii) it is therefore not possible to invoke Dicey Rule 3 to dismiss its claims against Brussels-Lugano defendants, because to do so would be to decline to exercise a jurisdiction conferred by the Brussels-Lugano regime otherwise than in accordance with its rules.’

If the argument were upheld, any claims falling within Dicey Rule 3 would proceed against Brussels-Lugano defendants while being dismissed against other defendants. 

Dicey Rule 3 is not a jurisdictional rule: it is a substantive rule of English law. Yet SKAT’s argument in my view essentially means that an application of Dicey Rule 3 to the matter, would deprive A1(1) BIa of its effet utile.

Logically the BIa /Lugano argument would have had to have been considered first. Baker J does the opposite (his thinking process, unlike writing up, may of course first have considered the BIa argument) and holds at 120 after thorough consideration of the authorities on Dicey Rule 3, that the rule applies: SKAT’s claims seek indirectly to enforce in E&W, Danish revenue law.

In an interesting Coda at 121 ff, he also considers obiter the argument that, in essence, was that in line with a long public international law history, the cross-border recovery of tax refunds wrongfully procured is seen as or assumed to be a matter of revenue law requiring to be dealt with (if at all) by supranational legal instrument. Refence here is made ia to 1925 League of Nations reports.

Justice Baker starts [132] the BIa /Lugano argument along familiar lines: need for autonomous interpretation. QRS 1 ApS et al v Frandsen [1999] EWCA Civ 1463 is English authority under the Brussels Convention, and CJEU C-49/12 Sunico (to which both the AG and the CJEU refer in C-73/19 Belgische Staat v Movic BV et al) CJEU authority.

[142] In Sunico, the CJEU considered claims brought by HMRC alleging missing trader VAT carousel frauds. The substantive claims, for damages at common law for an alleged tortious conspiracy to defraud, were pursued in E&W against defendants domiciled in Denmark. HMRC also brought ancillary  proceedings in Denmark to attach assets with a view to enforcing any damages judgment obtained in England. Those Danish proceedings were objected to on the basis that they were a ‘revenue [etc] matter’ excluded from BI.

[144] The CJEU concluded at [41]-[43], essentially, that because the claim was framed in tort and not as a claim under a tax law, the proceedings were a ‘civil and commercial matter’ and not a ‘revenue [etc] matter’ for the purpose of Article 1(1) of the Brussels Regulation, so long as “the commissioners were in the same position as a person governed by private law in their action against Sunico and the other non-residents sued in the High Court of Justice” (ibid at [43]).

At 149 Baker J concedes that the decision of the Court of Appeal in Frandsen was incorrect per Sunico, however then holds that the result would be the same: the classification of proceedings as a ‘civil and commercial matter’ or a ‘revenue [etc] matter’ for the purpose of applying the Brussels-Lugano regime does not touch the question whether Dicey Rule 3 applies so as to defeat the claim. He suggests [149] a search for the lex causae under Rome II would be largely irrelevant for per A16 Rome II Dicey Rule 3 qualifies as lois de police, and finds support for his view that despite scholarly suggestion (i.a. by prof Briggs), Frandsen must not be displaced, in The Law Debenture Trust Corporation [2017] EWHC 655 (Comm) [and in Andrew Dickinson’s reporting on same], in which the English Act of State doctrine was upheld despite Rome II’s classification of the matter as civil and commercial.

At 165 ff he, somewhat superfluously still considers the more recent CJEU authority of Buak and the aforementioned Movic, and decides at 174 that per BUAK and Movic (on the use of evidence etc.) that SKAT was neither attempting nor able to change the rules of the litigation game, either as to the substantive rules of law that would apply in determining its claims, or as regards the procedural rules applicable in the litigation, or as regards the status or effect of any of the evidence it might deploy or disclose. SKAT was not by this litigation pursuing public law proceedings, in which liabilities are determined as if this were a judicial review of SKAT’s actions, decisions or exercise of public law powers.

Yet that the matters are of a civil and commercial nature, in the end does not matter at all: [176]

To the extent that SKAT relied on the Brussels-Lugano regime as the basis for this court having jurisdiction over the Brussels-Lugano defendants that have been sued, including it may be for serving proceedings out of the jurisdiction, in my judgment it was right to do so. But its having been entitled to do so did not oust or disapply Dicey Rule 3 in respect of those defendants.

Using prof Dickinson’s words (26-27), there is a dissonance here between Brussels Ia and the applicable law. One that, I would suggest, endangers the effet utile of Brussels Ia. Dicey Rule 3’s character as a substantive rather than a jurisdictional rule, does not to my mind save that.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.28 ff.

Begum v Maran. A hopeful Court of Appeal finding on duty of care; however open issues on its engagement with Rome II’s environmental heading.

I am late in reporting  Begum v Maran (UK) Ltd [2021] EWCA Civ 326, in which the Court of Appeal rejected an application for strike-out. I reported on the High Court judgment here and I should add I am instructed for claimant in the case. Oliver Holland, the lead Leigh Day solicitor in the case, discusses its implications together with Rachel Bonner (who was led by Richard Hermer) here.

Coulson LJ held that it is at least arguable (reminder: the specific action that was being discussed was an application for strike-out) that Maran does have a duty of care. His analysis essentially leans heavily on the fact that Maran availed itself of a disposal route, the consequences of which it was much aware of. It is clear that the well-known Bangladesh route to escape health, safety and environmental standards for the dismantling of ships, is questionable under the Basel Convention on Hazardous wastes and their disposal, and that shipowners have been using privity of contract in an attempt to shield themselves from any liability for consequences which are neither unexpected nor infrequent.

Others have written on the duty of care issue and I will focus on the A7 Rome II discussion: the lex specialis for environmental damage – on which I have a paper forthcoming (but to find more time!).  At 78 ff Coulson LJ firstly links the requirement of causality (the use of the flimsy ‘arising out of’) to the non-contractual obligation claimed (here: corporate duty of care), rather than the one immediately following the damage (here: negligence, recklessness causing death). That duty of care does not, it was held, ‘arise out of’ environmental damage. [82]: ‘In essence, it is the duty to take all reasonable steps to ensure that the sale of the vessel for demolition purposes did not endanger human life or health. That duty did not arise out of environmental damage; it had nothing to do with environmental damage at all. It arose out of the complete absence of workplace safety.’ And at 86: ‘even if the court had to consider whether the death (rather than the duty) arose out of environmental damage, the result would be the same…the death arose out of the absence of safe working practices and, in particular, the absence of a safety harness.’ Support is found in scholarly sources suggesting a narrow interpretation of A7; other sources are not discussed (despite having been submitted) and I continue to be convinced such limiting interpretation is not supported by the travaux. Males J, in his mostly concurring opinion, agrees that the last thing on A7 is far from said although he, too, holds that A7 is not engaged in casu.

Lord Justice Coulson obiter considers locus delicti commissi (which would be  the alternative lex causae under A7) and at 91 succinctly holds (pro memoria: obiter) that this would not have been England. There is authority I would suggest for the opposite finding and the judge’s interpretation of Arica Victims, I submit,  leaves room for discussion: at 91 he correctly refers to the Ovre Norrland Court of Appeal having pointed to ‘key decisions’ having been made in Sweden. These to me seem present in current case, too (and here: located in England).

At 110 ff the ordre public argument under A26 Rome II, which could displace the shorter statute of limitation of the Bangladeshi lex causae, for the longer English one, is succinctly dismissed as not meeting A26’s high hurdle. This leaves a narrower (and perhaps curiously indirect) ‘undue hardship’ argument under the E&W Foreign Limitation Periods Act 1984 to be discussed as a preliminary issue at the remanded trial in the High Court.

A most relevant case, also highlighting the many unresolved issues under A7 Rome II.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.54 ff.

Johnson v Berentzen. The doubtful Pandya conclusions on service as lex causae confirmed.

Cressida Mawdesley-Thomas has overview of the facts and issues in Johnson v Berentzen & Anor [2021] EWHC 1042 (QB) here. Stacey J essentially confirms the conclusions of Tipples J in Pandya.

The case concerns the extent of the ‘evidence and procedure’ exclusion from the Rome II Regulation on applicable law in the event of non-contractual obligations.  For the reasons I outlined in my review of the latter (readers please refer to same), I continue to disagree. With counsel for claimant I would suggest Pandya wrongly interpreted A15(h) Rome II in concluding that the provisions of A15 (‘scope of the law applicable) are to be construed widely , and the evidence and procedure exclusion (not: ‘exception’), narrowly.

Something for the Court of Appeal to look into, I would suggest.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.79 ff.

 

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