Posts Tagged Supreme Court

WTO examiners: at ease! Canadian Supreme Court holds in R. v. Comeau (New Brunswick restrictions on alcohol trade).

Fellow faculty about to examine students on the Law of the World Trade Organisation, have their exam sorted (especially if it is an oral exam). In 2018 SCC 15 R v Comeau the Canadian Supreme Court held last week. At issue is New Brunswick’s restrictive regime on the import and sale of alcoholic beverages. Greg Tereposky and Daniel Hohnstein have background to the case.

Despite the Province’s regime having clear trade impact, the SC held that it was not illegal under Canada’s internal free trade rules – with occasional reference to GATT and WTO. For comparative and exam purposes, the interesting angle is clear: has the Supreme Court adopted the kind of aims and effects test which the WTO is no fan of?

Copy of the judgment. 15 mins prep. And Bob’s your (oral exam) uncle.

Geert.

(Handbook of) The law of the World Trade Organisation, forthcoming at OUP with Demeester, Coppens, Wouters and Van Calster.

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X v I: The Austrian Supreme Court on due diligence in choice of court under Brussels I Recast.

Thank you Klaus Oblin for flagging OGH 7 Ob 183/17p X SE v I SpA (yet again I am happy to grumble that there is really no need to keep B2B litigation anonymous) at the Austrian Supreme Court. At issue is the application of Article 25 Brussels I Recast: when can consent to choice of court be established.

The facts of the case reflect repeated business practice: offers are made and accepted; a business relationship ensues on the basis of which further offers and orders are made; somewhere along the lines reference is made to general terms and conditions – GTCs which include choice of court. Can defendant be considered to have consented?

The Supreme Court, justifiably, lays the burden of proof with the claimant /plaintiff: if the contract is concluded through different offer and acceptance documents, the offer need only reference the terms and conditions containing the agreement conferring jurisdiction only if the other party: can follow-up on this with reasonable diligence; and actually receives the terms and conditions.

I am happy to refer to Klaus’ excellent overview (which also discussed the absence of established business practice between parties: one of the alternatives for showing choice of court). Yet again, the first and foremost quality required of lawyers (here: in-house counsel) emerges: ensure proper filing and compliance with simple procedure. Here: a clear flag of the GTCs in correspondence, and simple follow-up would have sufficed.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9.

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Lodi Trading, a lotta fog: Kolassa in the Belgian Supreme Court.

Many thanks Michael Verhaeghe  (whom I have the pleasure with jointly to be representing a client) for alerting me to Lodi Trading in which the Belgian Supreme Court applied (and distinguished) Kolassa. Lodi Trading is registered in The Netherlands and seemingly had been duped into transferring funds to a gang of fraudsters.  As always, the judgment is very very scant on factual reference, and I have not been able to find the Court of Appeals’ judgement: if anyone can: Court of Appeal Gent, 8 December 2015.

Like the CJEU itself did clearly in Universal Music, the Hof van Cassatie distinguished Kolassa (although it does not refer to Universal Music in this part of the judgment) by insisting there be circumstances specific to the case, over and above the simple presence of a bank account, which point to the damage occurring in that State.

In Universal Music the CJEU had emphasised the need for case-specific facts for bank accounts to be a relevant factor in determining jurisdiction, by holding that ‘it is only where the other circumstances specific to the case also contribute to attributing jurisdiction to the courts for the place where a purely financial damage occurred, that such damage could, justifiably, entitle the applicant to bring the proceedings before the courts for that place.’ (emphasis added).

What seems (but again: see the joint caveat of the Supreme Court’s judgment being scant and the Court of Appeal’s judgment being untraceable) to be specific to this case is that the Court of Appeal had held in favour of the location of the bank account of recipient of the funds being locus damni, given that ‘internal law’ (by which I take it reference is made to Belgian, not Dutch law) determines that the time of payment is determined by the moment of accreditation of the funds to the beneficiary’s account: not (the alternative reading; but again I am assuming for the judgment’s 10 brief paras do invite speculation) the time of the funds leaving the account holder’s account.

It could well be therefore that the Supreme Court is rebuking the Court of Appeal for having Belgian law enter the equation, given the need for autonomous interpretation of European civil procedure. But I am not entirely sure.

Geert.

(Handbook of) European private international law, second ed. 2016, Chapter 2, Headings 2.2.11.2, 2.2.11.2.7

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The Scottish Government submission to Brexit at the SC, and the EU’s conflict agenda.

For those with an interest in UK constitutional law and its impact on the EU, these evidently are interesting days. I just wanted briefly to flag that the Scottish Government’s submission to the Supreme Court’s Article 50 case contains a short section on the EU’s civil justice agenda. At 48, the submission points out the impact withdrawal will have on the civil justice relations between Scotland, the remainder of the UK, and the EU.

There are plenty of papers out there on the impact of Brexit on conflict of laws. Without the correct arrangements, the UK is bound to lose a lot of its attraction in international dispute settlement. With the falling pound, Christmas shopping in London is particularly attractive to those outside the UK. Forum shopping a lot less so.

Geert.

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CMR and the Brussels regime. The UKSC applies Nipponkoa in BAT /Essers.

Confession time: when teaching the general conflicts course I tend to simply say about Article 71 of the Brussels I Regulation (unchanged in the Recast): ‘it’s complicated’. I have also briefly flagged the Article in my posting on Nickel and Goeldner. I suppose I should not be quite so shy in addressing the relationship even in an introductory conflicts class for, essentially, it is not that complicated at least form a hierarchical point of view. Article 71 mirrors Article 351 TFEU which states that any rights or obligations arising prior to the TFEU shall not be affected by it unless the agreements are not compatible with the TFEU. At stake therefore is a review by the courts whether international agreements between the Member States prior to the creation of the EU, are compatible with the TFEU.

In [2015] UKSC 65  BAT Denmark v Kazemier and BAT Switserland v Essers, the United Kingdom Supreme Court had to carry out this exercise vis-a-vis the 1956 CMR Convention –   the Convention on the Contract for the International Carriage of Goods by Road. As Steven Baker notes, Lord Mance kicks off his judgment with the rather delightfully accurate ‘Cigarettes attract smokers, smugglers and thieves’. Tobacco manufactuters are also of course active litigators hence providing us with repeated opportunity to review case-law on a wide variety of contractual and other matters.

In the two appeals, one container load was allegedly hi-jacked in Belgium en route between Switzerland and The Netherlands in September 2011, while another allegedly lost 756 of its original 1386 cartons while parked overnight contrary to express instructions near Copenhagen en route between Hungary and Vallensbaek, Denmark.

The consignors (two of BAT’s corporate vehicles) are claiming against English main contractors who undertook responsibility for the carriage and against sub-contractors in whose hands the cigarettes were when the alleged losses occurred. The carriage was subject to the Convention on the Contract for the International Carriage of Goods by Road 1956 (“CMR”), given the force of law in the United Kingdom by the Carriage of Goods by Road Act 1965.

English law and English jurisdiction are said to offer the advantage that such duty and/or taxes are recoverable in a CMR claim against carriers, which is not the case in some other jurisdictions (at 4).

Citing (and reading in a particular way) CJEU precedent, in particular  Nipponkoa Insurance Co (Europe) Ltd v Inter-Zuid Transport BV (DTC Surhuisterveen BV intervening), C-452/12, the Supreme Court held (at 57) that CMR represents a balanced jurisdictional régime adopted across a wide-range of some 55 states, only half of which are Union member states. It did not regard its tailored balance as impinging on any of the principles of Union law which the CJEU would have it check against.

CMR applies therefore and under relevant English application, neither of the defendants can be sued in England.

Geert.

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Toyota v Prolat and the Brussels I arbitration exception. Plus ça change.

In Toyota v Prolat, the High Court was asked by Toyota to confirm the existence of an agreement between parties to arbitrate. The arbitral panel, already seized by Toyota, agreed that it would be best for the Court preemptively to settle this issue since it suspects any ruling by the tribunal itself will be subject to litigation by Prolat. The agreement (existence of which is disputed by Prolat; it had employed an authorised agent, whose signings on behalf of Prolat are disputed) concerns the delivery of sugar by Toyota to Prolat. Prolat objects to the jurisdiction of the tribunal. It has itself started proceedings in Naples for damages for various alleged wrongdoing by Toyota, whether for breach of contract or tort.

The interest of the case for this blog lies in particular with the concurrent proceedings in Italy and the UK. Should the UK decline? The case is subject to Regulation 44/2001, not to the recast. Cooke J holds that ‘This Court is not being asked to interfere with the functions of the Italian court as no form of anti-suit injunction is being sought against Prolat. This Court is being asked to determine whether or not there is an arbitration agreement and to make a declaration in the light of its conclusion.West Tankers is therefore distinguished.  Would, had it applied, Regulation 1215/2012 made a difference? Cooke J held that it would not: ‘Article 1(2)(d) remains unchanged from the earlier Regulation but is more fully explained in paragraph 12 of the Preamble. I was also referred to Article 73 which states that the Regulation will not affect the application of the New York Convention. (…)‘ (at 16)

He concludes ibidem ‘Although it is not yet in force, it was suggested that some might regard the new Regulation as declaratory of the existing state of the law. . The jury on that, as is well-known, is out.

Cooke J further explores the issue of the applicable law to the contract per its putative law (Article 10(1) Rome I). Firm and justifiable conclusion (at 18) there, is: English law.

Geert.

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Supreme Court goes Jules Verne and crosses the HS2 Bridge at high speed. Aarhus, SEA, EIA and supremacy of EU law all fail to make an impact.

In Chapter XXVIII of Jules Verne’s Around the world in Eighty Days, the train driver, egged on by enthusiastic US passengers and despite objections by Passepartout, reverses his train to cross a wobbly bridge (successfully) at high speed. With all passengers on board. It is a favourite chapter of mine and one which comes in handily in risk management classes.

In HS2 Action Alliance v Secretary of State for Transport, the United Kingdom Supreme Court took inspiration from Chapter XXVIII in dismissing all arguments based on the Aarhus Convention, the EIA Directive, the SEA Directive, and supremacy of EU law. These arguments were raised against the UK Government’s  ‘Command paper’, “High Speed Rail: Investing in Britain’s Future – Decisions and Next Steps” . The command papers sets in motion the reality of the development of the HSs high speed rail link between the South of England, the north and Scotland.

Lord Carnwath summarised the legal issues as follows (at 15):

i) SEA whether the DNS in the circumstances of HS2 is a “plan or programme” which “sets the framework for development consent” and was “required by administrative provisions” within the meaning of articles 2-3 of Directive 2001/42/EC (“the SEA Directive”).

ii) Aarhus whether if the interpretation of the majority in the Court of Appeal is correct, article 3(2)(a) of the SEA Directive is inconsistent with article 7 of the Aarhus Convention, and if so with what consequences.

iii) EIA/Hybrid Bill whether the Hybrid Bill procedure as proposed meets the requirements of Directive 2011/92/EU (“the EIA Directive”), taking account in particular that (a) issues of principle will be excluded from the Select Committee stage, and (b) the debate on the Bill at Second and Third Reading will be subject to a Government whip.

iv) Timing whether the court should intervene at this stage, or whether the court should wait until the Parliamentary process is completed;

v) CJEU reference whether any of the above questions raise uncertain issues of European law on which a reference should be made to the European court.

David Hart QC superbly summarises the Court’s findings and much of its reasoning over at the Human Rights blog and I am happy to refer my readers to him to get, well, up to speed on the judgment. I should simply like to point out that the Court’s boldness lies not so much in the merits of its decision, rather in the more or less belligerent wording and indeed telling off aimed at the Court of Justice.

With respect to Strategic Environmental Assessment – SEA [aimed at ensuring that environmental impacts are identified upstream, by ensuring that programs and plans which will lead to EIA-bound projects, are vetted themselves], a command paper formally does not set anything in stone about the ensuing (or not) development of the project which it will lead to. Much can still change and Members of Parliament have every right and prerogative to have the project amended or indeed scrapped altogether. However, clearly this is a project the realisation of which the government will want to ensure. It is in my view not merely ‘policy’, but a proper plan. Whence in reality this is exactly the kind of program which the SEA Directive had in mind when pressing for impact assessment upstream. Like the train carrying Passepartout et al, the adoption of this Command Paper has set in motion developments which will be all but impossible to stop. With one step following logically from the other, the intentions addressed in the Command Paper display a high degree therefore of fait accompli. The intent and purpose of the SEA Directive in my view does require its application in casu. I appreciate however that intent and purpose as interpretative tool is met lukewarmly by the Supreme Court. (I grant moreover that the Supreme Court does justifiably criticise some of the ECJ’s case-law on the EIA Directive, where very clear provisions nevertheless were altered in their meaning by reference to intent and purpose. The ‘claris’ in ‘in claris non fit interpretatio’ clearly lies in the eye of the beholder).

Of particular EU institutional interest is the Supreme Court’s reference to the Bill of Rights (at 206), Parliamentary Sovereignty, and the 2013 Bundesverfassungsgericht’s judgment on  the Counter-Terrorism Database Act. (Translated by the SC in relevant part as as part of a co-operative relationship, a decision of the Court of Justice should not be read by a national court in a way that places in question the identity of the national constitutional order). The SC is right in pointing out the difficulty under the doctrine of separation of powers, of courts second-guessing not the way in which data were put before parliament, but rather how members of that parliament subsequently interpret and apply those data. More generally, though, in suggesting, when criticising the ECJ judgments on that role of the courts, to restrain the ECJ in its interpretative space, the Supreme Court inevitably joins the queue of national supreme courts which are jittery about the positioning of the ECJ (and the ECtHR) on their turf.

This judgment is of very high relevance both for EIA and SEA, and for EU Institutional law. No doubt much more to be chewed on.

Geert.

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