Tag: service

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

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

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

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

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

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

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

Recital 32 adds

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

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

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

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

Geert.

 

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Bank of Baroda v Maniar. The impact of the lex concursus on personal guarantees.

It was a year ago since I started writing up this post – I must have gotten distracted, for I continue to find the issues both relevant and interesting. In Bank of Baroda v Maniar & Anor [2019] EWHC 2463 (Comm) (not appealed to my knowledge),  Pearce J considered the attempt by an Indian Bank (with business activities in the UK) to enforce personal guarantees given in respect of the liability of an Irish-registered company (which had been set up by the guarantors) under a credit facility. The Irish company had entered into examinership under Irish law, and the Irish courts had approved a scheme of arrangement. Of interest to the blog is whether the bank had properly served notice on the guarantors, in accordance with the Companies Act 2014 (Ireland) s.549.

Claimant referred inter alia to the Gibbs rule, which I discussed in my posting on [2018] EWHC 59 (Ch) International Bank of Azerbaijan , since confirmed by the Court of Appeal. Defendants rely ia on Article 4 of the EIR 2000, Regulation 1346/2000, materially applicable to the proceedings:  “(1)…the law applicable to insolvency proceedings and their effects shall be the law of the Member State within the territory of which such proceedings are opened…(2) The law of the State of the opening of proceedings shall determine the conditions of the opening of those proceedings, their conduct and their closure. It shall determine in particular: .. j. The conditions for and the effects of closure of insolvency proceedings, in particular by composition; k. Creditors’ rights after the closure of insolvency proceedings.”

Claimant concedes that law of the State of the opening, namely Irish law, may be required to be given effect under the EIR, however argues that effect is limited to those aspects of Irish insolvency law which are necessary for the insolvency proceedings to fulfil their aim, and that Section 549 of the Irish Company Act (which concerns the preservation of the right to pursue guarantors) does not fall within the ambit of “the law applicable to insolvency proceedings” to which Article 4(1) of EIR applies.

In other words Claimant does not entertain the possibility of what was Article 13 in the 2000 EIR and is now Article 16 in the 2015 EIR, also applied by the CJEU in Nike, Kornhaas and Lutz. Rather, it more straightforwardly argues that relevant sections of the Irish Company Act are simply not within the scope of the lex concursus and that (at 84) the law governing the guarantees is English law per Article 4 Rome I.  At 109 Pearce J ultimately rather concisely holds

The important point here is the potential effect of a Section 549 offer on creditors’ meetings. The fact that the making of such an offer gives rise to the possibility of the guarantor accepting the offer and exercising the voting rights of the creditor at a members’ meeting creates a significant connection between the notice and the conduct of the examinership itself. This brings the procedure within the ambit of Article 4 of EIR. (now Article 7 EIR 2015 – GAVC)

Why the relation with the carve-out of Article 13 (now 16) was not discussed is not clear to me, particularly as at 156 ff there is discussion of Article 15 (now 18)’s provision : “The effects of insolvency proceedings on a lawsuit pending concerning an asset or a right of which the debtor has been divested shall be governed solely by the law of the Member State of which that lawsuit is pending.”) 

Claimant not having discussed Article 13 (16), presumably did not raise the possibility of an appeal, either. 

The remainder of the discussion then turns to the validity of service under Irish law,  to be judged by an English judge. With Pearce J at 138 and 143 I see no reason why the EIR would stand in the way of an English judge so applying the lex concursus, even if an Irish judge would do so with an amount of discretion. At 152 and 154, after consideration, service was deemed not to have been valid.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.7.

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Yet more on The Prestige recognition tussle. On service, state immunity and the insurance title of Brussels Ia.

I have twice already reported on The Prestige recognition issue: see here and here. In a further judgment at the end of July, [2020] EWHC 1920 (Comm), Butcher J after helpfully summarising the various claims, considered

  • whether a Member State may be served under the EU Service Regulation 1393/2007, or whether residual PIL (here: the UK State immunity Act) may insist on an alternative. This did not so much engage the issue of ‘civil and commercial’ (CJEU Fahnenbrock being cited) on which both parties agreed. Rather on the exhaustive effect or not of the Service Regulation, in particular, whether Member States may insist on service upon authorities of other Member States via diplomatic means only. Butcher J holding correctly in my view at 45, that service via the means provided for in the Regulation, suffices.
  • next, whether the case engages sovereign immunity of Spain and France which Butcher J held that they do not for the most part. He mostly cites the States’ submission to arbitration in this respect.
  • further, whether the English courts have jurisdiction or whether that is ruled out by virtue of the arbitration exception or the insurance title of the Regulation (at 93 ff; the preceding paras concern claims which fall outside BIA and are to be judged under common law). At 107 Butcher J holds that the arbitration exclusion is not engaged, citing national and CJEU authority as well as recital 12 BIa, and holding at 108 that ‘(t)he present Judgment Claims are a further step beyond what is contemplated by an ‘action or judgment concerning … the enforcement of an arbitral award’ in recital (12).’ As for the insurance heading, with reference to Aspen Underwriting, he holds that the insurance title is engaged, and (at 132) that the States they are entitled to the jurisdictional protections of Section 3, without it having to be shown that they are in fact economically weaker parties. (There is a lingering doubt over one of the claims subrogated to Spain). The insurance title being engaged, this mains that the parties protected by it may only be sued in their jurisdiction (Article 14(2)’s exception to that was held not to be applicable), hence the English Courts for those claims do not have jurisdiction.

The result is a partial jurisdiction in England only – and permission to appeal, I imagine.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1, Heading 2.2.11.2, Heading 2.2.16.

 

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Ali v Rodrigues: Divorce (decree) forum shopping and the impact on (EU) migration status.

In [2019] EWHC 2776 (Fam) Ali v Rodrigues, claimant appreciated that the date of petition to divorce and date of and English respectively Scottish decrees are highly important to the husband’s immigration status. One way in which a former EEA family member can retain right of residence is if the marriage exceeded 3 years.

The husband was in Pakistan from 10th January 2016 to 18th February 2016. A certificate of entitlement to a divorce was issued on 21st March 2016 and decrees nisi and absolute were pronounced in the Romford (England) Family Court on, respectively, 12th April and 27th May 2016. That was the English decree. On 14th December 2016, the Home Office notified the husband that it was revoking his residence card on the basis that he was no longer a family member of an EEA national. The wife remarried in 2016, following the English decree and has sponsored her second husband’s application for leave to remain. The husband petitioned for divorce in Scotland on 27th September 2016, three years and five months after the date of the marriage and at least two years and three months from the date of the separation. On 6th November 2017, the Edinburgh Sherriff Court and Justice of the Peace Court pronounced the decree absolute, which is the Scottish decree.

If the English decree stands, the marriage will have lasted less than 3 years. If the Scottish decree stands, 3 years will have been exceeded. The husband essentially argues that the English decree is tainted by irregularity of service upon him. Lieven J held that the English decree should stand, on the basis that when it comes to failures related to service, it is appropriate to look at the nature of what went wrong and where the prejudice, if any, lies (at 36 ff). The wife took reasonable steps; and there are indications that the husband was trying to avoid service.

Given irregularities in service the English decree is voidable, but not void in the discretionary opinion of the court: the consequences of setting aside the English decree would more severe than that of the Scottish decree’s invalidity. If the English decree does not stand, the wife’s second marriage would have been made at a time when the first marriage persisted. That would be a very serious impact on her, her second husband and the child.

Geert.

 

 

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Conflicts, conflicts Uber-al. Employment and conflict of laws (Rome I) in the Uber decision.

Update 28 December 2018 the Court of Appeal in [2018] EWCA Civ 2748 has confirmed. Rome I issues no longer featured in the analysis.

Update 10 November 2017: [2017] UKEAT 0056_17_1011: The Appeals Tribunal has confirmed.

Thank you Steve Peers for alerting me to the relevance of the conflict of laws and the Rome I Regulation in particular in the recent Aslam et al v Uber Employment Tribunal decision. The case essentially revolves around whether claimants are employees – it is a pivotal case determining the immediate regulatory context for this part of the ‘sharing economy’. Para 87 is a particularly delightful expression of scepticism towards the sharing economy’s claims (further highlights are here).

Conflict of laws is addressed at para 103 onwards, a completion of the analysis in case of rejection of the tribunal’s view that the UK company in the Uber group employs claimants, and instead one would have to regard Uber BV (of The Netherlands) as employer. I do not think the tribunal expresses itself entirely clearly on Rome I.

If Uber BV is the employer, reclassification of the contract as one of employment (as opposed to one for the provision of services), makes the choice of law for Dutch law partially inoperable (not, as the tribunal notes at para 105 in fine, replaced with the laws on England and Wales). Next the tribunal (paras 106-109) continues to speak of ’employer’ but reviews application of Article 3 (including the application of Article 3(3)’s ‘purely domestic contracts’. If there is a contract of employment, in my view only Article 3(1) and (2) can have any impact on the analysis: the remainder of Article 3 concerns provisions for which Article 8 itself provides exhaustive rules.

From para 110 onwards, the tribunal does more tidily address Article 8 Rome I and holds, after reference to counsel view, that if indeed the Dutch BV is the employer (for it does not suggest that the contract would have to be qualified as one of services), Dutch law would largely apply, except for a limited number of provisions of English law by way of mandatory rules. (Reference to Article 21’s ordre public is justifiably rejected).

I am assuming Uber are appealing. Expect the conflicts analysis to return.

Geert.

(Handbook of) European private international law, Chapter 3, Heading 3.2.5.

 

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