Posts Tagged SHAPE

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

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

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

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

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

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

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

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

Maria.

 

 

 

, , , , , , , , , , , , , , , , , , , , , , , ,

1 Comment

Supreme v Shape: Lifting attachments (‘garnishments’) on assets of international organisations in another state. Dutch Supreme Court refers to CJEU re exclusive jurisdiction, and the impact of claimed immunity.

Many thanks Sofja Goldstein for alerting me a while back to the Hoge Raad’s decision to refer to the CJEU and what is now known to be Case C-186/19. The case concerns SHAPE’s appeal to a Dutch Court to lift the attachment aka ‘garnishment’ of a Belgian NATO /SHAPE escrow account by Supreme Services GmbH, a supplier of fuel to NATO troops in Afghanistan. As Sofja reports, in 2013, Supreme and Allied Joint Force Command Brunssum (JFCB), the Netherlands-based regional headquarters of NATO, set up an escrow bank account in Belgium with the goal of offsetting any contingent liabilities on both sides at the end of Basic Ordering Agreements (BOAs). Supreme Services in 2015 initiated proceedings against SHAPE and JFCB in the Netherlands arguing that the latter parties had not fulfilled their payment obligations towards Supreme. It also attached the account in Belgium.

SHAPE and JFCB from their side seized the Dutch courts for interim relief, seeking (i) to lift the attachment, and (ii) to prohibit Supreme from attaching the escrow account in the future.

The Supreme Court acknowledges the Dutch Courts’ principle jurisdiction at the early stages of the procedure on the basis of Article 35’s rule concerning provisional measures, yet at this further stage of the proceedings now feels duty-bound firstly under Article 27 of Brussels Ia to consider whether Article 24 paragraph 5 applies (Belgium being the place of enforcement of any attachment should it be upheld); further and principally, whether the Brussels I a Regulation applies at all given that SHAPE and NATO invoke their immunity (it is in my view unlikely that the invocation or not of an immunity defence may determine the triggering or not of Brussels Ia), this immunity interestingly being the result of a Treaty not between The Netherlands and NATO but rather resulting from the headquarter agreement between NATO and Belgium.

An interesting example of public /private international law overlap.

Geert.

 

 

 

, , , , , , , , , , , , , , , , , , , ,

1 Comment

Pearl v Kurdistan. The DIFC on waivers of sovereign immunity.

Update 17 November 2017 For discussions in Dutch case-law (including re contractual waiver) with respect to SHAPE, see here.

Thank you Peter Smith over at Tamimi for flagging [2017] DIFC ARB 003 Pearl v Kurdistan. Peter summarises as follows:

‘In 2007, Crescent Petroleum, the oldest privately-owned oil and gas company in the Middle East, agreed with Dana Gas, one the leading publicly-listed natural gas companies in the region, to create a joint venture called Pearl Petroleum (together, “the Consortium”). The Consortium entered into an agreement with the Kurdistan Regional Government (“KRG”) for the development of the Khor Mor and Chemchemal petrochemical fields in the Kurdistan region of Iraq. The KRG were and remain engaged in a political dispute with the Federal Government of Iraq, meaning that the Consortium were unable to export gas produced by the developed fields. As a result, the KRG became liable under its contract with the Consortium to pay a minimum guaranteed price, but it failed to make the required payments in full.’

Arbitration in London under LCIA rules ensued. The contract between the Consortium and the KRG was governed by English law and provided explicitly that “the KRG waives on its own behalf and that of [The Kurdistan Region of Iraq] any claim to immunity for itself and its assets”.

Cooke J held that whilst the UAE’s recognition of other states was a matter of foreign policy which the DIFC Courts could not rule on, construing the KRG’s waiver of immunity was a question of law and not public policy. In agreeing to arbitrate, a party agrees that the arbitration shall be effective in determining the rights of the parties (at 26). The waiver of any claim to immunity for itself and its assets must mean waiver of immunity from execution (at 28): any argument on that is blocked by issue estoppel (at 36).

Sovereign immunity therefore was not a trump which could be played at the time of enforcement: whatever immunity there might or might not have been had been contractually signed away.

An interesting and well argued judgment.

Geert.

, , , , , , , , , , , , , , , , ,

Leave a comment

%d bloggers like this: