Posts Tagged Tort

Close, but no sigar. The CJEU on libel, internet and centre of interests in Bolagsupplysningen.

The Court held some weeks ago in C-194/16 Bolagsupplysningen OÜ on the application of the Shevill rule, as supplemented by e-Date advertising, to infringements of a company’s personality rights over the internet. I held back reporting on the case for exam reasons – yep, some of the places I teach at already have exams.

Judgment was issued in Grand Chamber. There can be no clearer indication of the relevance the Court attaches to the question. The CJEU introduces in my view further complication in the Article 7(2) rule (jurisdiction for torts) by requiring the court seized carry out analysis of ‘main economic activity’ with those same courts being told not to get carried away however in that analysis. The judgment does not I believe offer a solid conclusion for the issues of removal and rectification.

An Estonian company operating in Sweden was blacklisted for its allegedly questionable business practices on the website of a Swedish employers’ federation. The website attracted a number of hostile comments from its readers. The Estonian company brought an action before the Estonian courts against the Swedish federation. It complained that the published information has negatively affected its honour, reputation and good name. It asked the Estonian courts to order that the Swedish federation rectify the information and remove the comments from its website. It also requested damages for harm allegedly suffered as a result of the information and comments having been published online.

Can the Estonian courts assert jurisdiction to hear this action on the basis of the claimant’s ‘centre of interests’, a special ground of jurisdiction that the Court previously applied to natural persons, but so far not legal persons? If they can, then second, how should the centre of interests of a legal person be determined? Third, if the jurisdiction of the Estonian courts were to be limited to situations in which the damage occurred in Estonia, the referring court wonders whether it can order the Swedish federation to rectify and remove the information at issue.

I reviewed Bobek AG’s Opinion here – let me recap core issues: Bobek AG suggested there are two novelties in the questions referred: a legal person (not a natural one) is primarily asking for rectification and removal of information made accessible on the internet (and only secondarily for damages for the alleged harm to its reputation). This factual setting, the AG suggests, leads to the question of how far the seemingly quite generous rules on international jurisdiction previously established in Shevill with regard to libel by printed media, and then further extended in eDate to the harm caused to the reputation of a natural person by information published on the internet, may be in need of an update.

At the real root of course of the generous rules on jurisdiction for tort, lies the Court’s judgment in Bier. Bobek AG joined Szpunar AG in severely questioning the wisdom of the Bier rule (both locus delicti commissi and locus damni lead to jurisdiction) in the age of internet publications. Not unexpectedly, the Court of Justice further refined Bier, but did not overrule it.

It held first of all that legal persons like natural persons can claim for damages in their centre of interests (at 38): the split in Bier was introduced for reasons of judicial suitability (‘sound administration of justice’), not personal interest of the plaintiff hence the qualification of that plaintiff has no bearing on the rule.

Following e-Date, the national court therefore needs to determine a centre of interests for a legal person just as it would for a natural person. At 41: for legal persons, this centre of interests ‘must reflect the place where its commercial reputation is most firmly established and must, therefore, be determined by reference to the place where it carries out the main part of its economic activities. While the centre of interests of a legal person may coincide with the place of its registered office when it carries out all or the main part of its activities in the Member State in which that office is situated and the reputation that it enjoys there is consequently greater than in any other Member State, the location of that office is, not, however, in itself, a conclusive criterion for the purposes of such an analysis.’ As one knows from the definition of ‘domicile’ under the Brussels I Regulation, leading to positive jurisdictional conflicts (it is perfectly possible for more than one Member State considering itself the domicile of a corporation), it is far from self-evident to determine where a company’s ‘main’ economic activities are located.

At 43 the Grand Chamber reminds the national courts that their role in the application of the Brussels I Recast is limited to the jurisdictional stage: they must not go into the merits (yet), hence if it is ‘not clear from the evidence that the court must consider at the stage when it assesses whether it has jurisdiction that the economic activity of the relevant legal person is carried out mainly in a certain Member State’, the Court must conclude that the Article 7(2) locus damni for the full damage is not available to that claimant.

 

The Court then distinguishes actions for rectification of false information and removal of comments: there is no jurisdiction before the courts of each Member State in which the information published on the internet is or was accessible. The Court follows Bobek AG’s Opinion on this point (although the AG also employed it to support his view on withdrawal of Bier altogether) at 48: ‘in the light of the ubiquitous nature of the information and content placed online on a website and the fact that the scope of their distribution is, in principle, universal …an application for the rectification of the former and the removal of the latter is a single and indivisible application and can, consequently, only be made before a court with jurisdiction to rule on the entirety of an application for compensation for damage [the Court refers to Shevill and e-Date] and not before a court that does not have jurisdiction to do so.’

On this latter point, the judgment is bound to create a need for further clarification: Shevill and e-Date confirm full jurisdiction for the courts of the domicile of the defendant and of the locus delicti commissi. These do not necessarily coincide but do raise the same difficulty of claims for rectification and removal by nature being single and indivisible. With more than one court having such full jurisdiction I do not see a solution in the Court’s approach.

Geert.

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

 

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Right to be forgotten v Right to know. In Townsend v Google Inc and Google UK the Northern Irish High Court emphasises public interest in open justice.

In [2017] NIQB 81 Townsend v Google Inc. & Anor the Northern Ireland High Court refused service our of jurisdiction in relation to a request for Google (UK and Inc.) to de-list a number of urls relating to reports on sexual and other criminal offences committed by plaintiff.

Plaintiff seeks an injunction inter alia requiring the defendants and each of them to withdraw and remove personal data relating to the plaintiff, making reference to or tending to reveal sexual offences committed by the plaintiff while a child, from their data processing and indexing systems and to prevent access to such personal data in the future. The Court references ia Vidal-Hall and Google Spain. I will leave readers to digest the ruling largely for themselves for there is a lot in there: consideration of Article 8 ECHR; Directive 95/46; aforementioned precedent; tort law etc.

Of particular note is Stephens J’s finding at 61 that ‘(t)here is a clear public interest in open justice. There is a clear right to freedom of expression. In such circumstances the processing was not unwarranted and that there is no triable issue in relation to any allegation that Google Inc. has not satisfied this condition.’

A judgment to add to the growing pile of internet, jurisdiction and balancing of interests in privacy considerations.

Geert.

 

 

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Aspen Underwriting: When the domicile ship has sailed, litigation splinters. And distinguishing between contract and tort.

Aspen Underwriting v Kairos Shipping et al [2017] EWHC 1904 illustrates the splintering of claims which may well occur when plaintiff chooses to ignore Brussels I’s core jurisdictional rule of domicile of the defendant. Evidently such splintering often is the strategic intention of a plaintiff and even if it does inconvenience them, having part of the claims settled by one court rather than another may still be its overall preference. The case however also highlights important crossed wires between the common law and EU law on the qualification of ‘tort’, and the relation between Rome II and Brussels I (Recast).

The vessel ATLANTIK CONFIDENCE  sank in the Gulf of Aden in 2013. It had earlier been held in a limitation Action commenced by her Owners, the First Defendant, that the Vessel was deliberately sunk by the master and chief engineer at the request of Mr. Agaoglu, the alter ego of the Owners. In the current action the Hull Underwriters of the Vessel, who paid out on the hull and machinery policy (“the Policy”) in August 2013 but who now consider, on further investigation, that the Vessel was deliberately cast away by her Owners, claim recovery of the insurance proceeds which were paid to Owners and the Vessel’s mortgagees, Credit Europe Bank NV, the Third Defendant (“the Bank”).

The Bank is domiciled in the Netherlands. and maintains that under the Brussels Regulation the High Court has no jurisdiction to hear and determine the claim against the Bank. It must be sued in the courts of the Netherlands where it is domiciled. The Hull Underwriters maintain that the High Court does have such jurisdiction for three reasons. First, it is said that Bank is bound by a Settlement Agreement which confers exclusive jurisdiction on the court. Second, it is said that the Bank is bound by the exclusive jurisdiction clause in the Policy. Third, it is said that the claims brought against the Bank are matters which relate to tort, delict or quasi-delict and the harmful event occurred in England.

Teare J rejected the first and second argument on the basis of analysis of the settlement. He then looks into Article 7(2) Brussels I Recast. The insurance heading of the Regulation does not apply as the relations concern those between two professional parties (at 72 the High Court refers to C-347/08 Voralberger; the CJEU confirmed later in C-521/14 Sovag).

Whether the claim of misrepresentation leading to the settlement, is one in tort or one in contract depends on how closely one finds it to be connected to the contract at issue (the Settlement). Plaintiff suggests that where such misrepresentations induce a contract, in this case the Settlement Agreement, the resulting claims are not matters relating to tort within the autonomous meaning of Article 7(2) but are matters relating to a contract within Article 7(1).

Teare J settles on the basis of the following convincing argument, at 76: ‘The court is concerned with a claim between the Hull Underwriters and the Bank. The Hull Underwriters allege that misrepresentations made by the Bank induced the Hull Underwriters to enter into the Settlement Agreement with the Owners. They seek to recover damages suffered by the Hull Underwriters as a result of the Bank’s misrepresentations. Whilst there is a factual connection between the claim and the Settlement Agreement I do not consider that that is enough to make the claim a matter relating to a contract and so within Article 7(1). Where there is a claim against the contracting party and it is alleged that the contract should be rescinded on the grounds of misrepresentations made by that party because such misrepresentations induced the contract it can sensibly be said that the subject-matter of the claim is the contract. But in the case of the claim against the Bank I do not consider that it can be fairly said that the subject-matter of the claim is the Settlement Agreement.

Oddly no reference here is made to relevant CJEU precedent including recently Granarolo and Kareda.

Now, the claim for damages based upon misrepresentation can be brought in England so long as the “harmful event” occurred in England (at 79; with reference to Bier /Mines de Potasse split into locus delicti commissi and locus damni). Jurisdiction for the claim based on misrepresentation can be brought fully in England because (at 79) ‘either the damage occurred in England (where Norton Rose Fulbright signed the Settlement Agreement and/or where the $22m. was paid to Willis’ bank account in London) or the event giving rise to the damage occurred in London (being the place where the misrepresentations were made and/or the place where the Hull Underwriters were induced).’

At 78 the High Court highlights the difficulty of the qualification viz conflict of laws of restitution based on unjust enrichment. The common law has the precedent of the House of Lords in Kleinwort Benson v Glasgow [1999] 1 AC 153.  Teare J summarises ‘In that case Lord Goff, with whom the other members of the court agreed on this point, said that a claim in restitution based upon unjust enrichment does not, save in exceptional circumstance, presuppose a harmful event and so is impossible to reconcile with the words of Article 7(2). He was not deterred from reaching this conclusion by the decision in Kalfelis. The claim for restitution in this case is based upon a mistake; it does not require a harmful event, though there might in fact be one as suggested by [plaintiff]. I consider that I am bound to follow the decision of the House of Lords and to hold that the claim in restitution based upon mistake is not within Article 7(2). It must follow that this court has no jurisdiction over that claim and that if it is to be pursued it must be pursued in the Netherlands where the Bank is domiciled.

The claim for unjust enrichment cannot be brought in England. Teare J observes the consequence of the Brussels I Regulation (at 80): ‘On case management grounds it is unsatisfactory to reach the conclusion that the tort claim may be brought in England but that the restitution claim may not be brought in England. However, this is the consequence of the Brussels Regulation as was accepted in Kalfelis. Of course, the entirety of the Hull Underwriters’ case against the Bank could be brought in the Netherlands but in circumstances where the Hull Underwriters’ case against the Owners and Managers is being brought in England that also is not satisfactory. The court cannot however base its jurisdictional decisions when applying the Brussels Regulation on considerations of forum conveniens.’

Of note finally is that Kleinwort Benson was issued post Kalfelis but prior to Rome II, which contains a specific heading on unjust enrichment. Notwithstanding its clear non-contractual nature (‘non-contractual’ being the generic title of Rome II which therefore encompasses more than just torts), it is not generally considered a tort: this continues to create issues in the application of Rome II.

A good case to illustrate the lasting challenges in distinguishing contracts from torts.

Geert.

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

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A late entry on your timeline. Anas v Facebook leaves plenty of questions on internet jurisdiction.

I discussed this case with my students the day the judgment came out. Copy of the judgment has travelled with me far and wide. Yet I only now find myself getting round to posting on Anas v Facebook, at the courts at Würzburg back in February. Mr Anas came from Syria as a refugee and took a famous selfie with Frau Merkel. The photo later came to haunt him as fake news sites used it in connecting with accusations of terrorism. Mr Anas thereupon sued Facebook, requesting it to act more swiftly to remove the various content reporting on him in this matter. The Würzburg court obliged. I understand that in the meantime Mr Anas has halted further action against FB which I am assuming includes the appeal which FB must have launched.

Now, the interest for this blog lies not in the issue of fake news, but rather the jurisdictional grounds for the ruling. Mr Anas sued Facebook Ireland, not Facebook Inc. The latter, I would suggest, he might have done on the basis of the Brussels I Recast’s provisions on consumer contracts – albeit that the conditions for that title might not be fulfilled if Mr Anas became a FB user in Syria.

The court did not entertain the consumer title. It did uphold its jurisdiction on the basis of Article 7(2) of the Recast, as lex loci damni. (But without consideration of the Shevill limitation). Awkwardly, it then lest my German fails me, goes on to determine its internal jurisdiction on the basis of German civil procedure law. Plaintiff was domiciled in Berlin; not Würzburg. The judgment therefore turns into the proverbial cake and eating it: Article 7(2) does not just lay down jurisdiction for a Member State: it also identifies the very court in that MS that has jurisdiction. It cancels out internal rules of jurisdiction. With Mr Anas’ domicile in Berlin, Wurzburg as locus damni is not immediately obvious.

German speakers, if I am not reading this right please do comment.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.

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A v M (Austria): Copyright infringement, locus delicti commissi in case of breach of obligation to pay.

For your second conflicts reading of the day I thought I should serve something more substantial. In A (an Austrian company) v M (a company located in Luxembourg) the Austrian Supreme Court (Oberster Gerichtshof) had to decide on the determination of the locus delicti commissi in the event of infringement of copyright. M had effectively siphoned off to its website, some of A’s satellite broadcasts. Plenty of CJEU precedent is referred to (Hejduk; Austro Mechana; to name a few).

Thank you very much indeed Klaus Oblin for providing me with copy of the judgment – back in early June. Effectively, at issue was  the infringement of a duty to pay.  Klaus has excellent overview of the issues, of which the following are definitely worth highlighting. The Supreme Court justifiably of course emphasises autonomous interpretation of Article 7(2) Brussels I Recast. Yet autonomous interpretation does not provide all the answers. There are plenty of instances where locus delicti commissi is not easily identified, such as here.

The Oberster Gerichtshof seeks support in the Satellite Directive 93/83, but notes that the Directive includes no procedural clauses, let alone any regarding international jurisdiction (at 2.4.2. It refers to the German Bundesgerichtshof’s decision in Oscar). It then completes the analysis by reference to national law:

Section 42b(1) of the Act on Copyrights and Related Rights to classify breach of copyright as a tort (CJEU Kalfelis would have been a more correct reference) ; and

Section 907a(1) of the Civil Code) to identify the locus of the delicti commissi: because monetary debts in acordance with that section must be discharged at the seat of the creditor, the domestic courts at the Austrian seat of the collecting society have jurisdiction. In coming to its conclusion, the court (at 3.2) refers pro inspiratio to Austro Mechana, not just the CJEU’s judgment but also the ensuing national judgment.

Now, lest I am mistaken, in Austro Mechana the CJEU did not identify the locus delicti commissi: it simply qualified the harm arising from non-payment by Amazon of the remuneration provided for in Austrian law, as one in tort: at 52 of its judgment: it follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member state have jurisdiction to entertain Austro-Mechana’s claim. (emphasis added)

Given its heavy reliance on national law, I would suggest the judgment skates on thin ice. Reference to the CJEU seemingly was not contemplated but surely would have been warranted. Kainz is a case in point where locus delicti commissi was helpfully clarified by Luxembourg, Melzer one for locus damni.

Geert.

(Handbook of) European Private international Law, 2nd ed. 2016, Chapter 2, heading 2.2.11.2.

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E-date Advertising for companies. Libel, internet and centre of interests. Bobek AG in Bolagsupplysningen OÜ.

Bobek AG opined mid July in C-194/16 Bolagsupplysningen OÜ on the application of the Shevill rule, as supplemented by e-Date advertising, to infringements of a company’s personality rights over the internet.  This is one of those Opinions where summaries fall much, much short of the contents of the original document and I should urge readers to consult the Opinion in full.

An Estonian company operating in Sweden was blacklisted for its allegedly questionable business practices on the website of a Swedish employers’ federation. The Advocate General dryly notes ‘(a)s inevitably happens in the era of anonymous internet bravery, universally known for its genteel style, subtle understanding, and moderation, the website attracted a number of hostile comments from its readers. The Estonian company brought an action before the Estonian courts against the Swedish federation. It complained that the published information has negatively affected its honour, reputation and good name. It asked the Estonian courts to order that the Swedish federation rectify the information and remove the comments from its website. It also requested damages for harm allegedly suffered as a result of the information and comments having been published online.

Can the Estonian courts assert jurisdiction to hear this action on the basis of the claimant’s ‘centre of interests’, a special ground of jurisdiction that the Court previously applied to natural persons, but so far not legal persons? If they can, then second, how should the centre of interests of a legal person be determined? Third, if the jurisdiction of the Estonian courts were to be limited to situations in which the damage occurred in Estonia, the referring court wonders whether it can order the Swedish federation to rectify and remove the information at issue.

The Advocate General suggests there are two novelties in the questions referred: a legal person (not a natural one) is primarily asking for rectification and removal of information made accessible on the internet (and only secondarily for damages for the alleged harm to its reputation). This factual setting, the AG suggests, leads to the question of how far the seemingly quite generous rules on international jurisdiction previously established in Shevill with regard to libel by printed media, and then further extended in eDate to the harm caused to the reputation of a natural person by information published on the internet, may be in need of an update. At the real root of course of the generous rules on jurisdiction for tort, lies the Court’s judgment in Bier. Bobek AG joins Szpunar AG in severely questioning the wisdom of the Bier rule in the age of internet publications.

Now, human rights scholars will enjoy the Advocate General’s tour d’horizon on whether and to what extend companies may enjoy human rights. On the whole I believe he is absolutely right in suggesting that there ought to be no difference between legal persons and natural persons when it comes to the very possession of personality rights (such as the right not to be libelled) and that neither is there any ground to distinguish between natural persons and legal persons when it comes to the jurisdictional consequences of upholding these rights.

Then, to the jurisdictional consequences (para 73 onwards): the AG suggests that ‘putting Shevill online’ (the AGs words) essentially means granting the forum to a large number of jurisdictions simultaneously, 28 within the European Union. That is because allegedly false or libelous information on the internet is instantly accessible in all Member States.

Bobek AG suggests such multiplicity of fora stemming from the distribution criterion is very difficult to reconcile with the objective of predictability of jurisdictional rules and sound administration of justice enshrined in recital 15 of the Brussels I Recast Regulation, and does not serve the interests of claimant (although the AG concedes that in litigation practice, sending the defendant on a goose chase throughout the EU may be an attractive proposition). Now, in Bier the CJEU upheld jurisdiction for both locus damni and for locus delicti commissi on the grounds that this was attractive from the point of view of evidence and conduct of proceedings: this gives both the ‘special link’ which the special jurisdictional rules require. Whether the Court will be swayed by the argument that in the internet context, neither is of relevance, remains to be seen. It is true that number of clicks, which presumably is the relevant criteria to establish ‘damage’ in the context of Article 7(2), can be established just as well outside the jurisdiction as inside it (Google Analytics being used in a variety of national proceedings). It is also true however that Bier and Shevill are dogma for the Court and it is unlikely that it will simply abandon or even vary them.

Variation is all the more unlikely in the direction of the alternative suggested by the AG: locus delicti commissi relates to whoever is in charge of publishing and altering the content of the online information. So far so good: this is a useful clarification of Shevill in the internet age and one that has as such been so applied by national courts.

Harm then would in the AG’s view have to be defined as solely being the place where the reputation of the claimant was most strongly affected. That is the place of his centre of interests. The AG further suggests (at 104 ff) that in the case of a profit-making legal person, that is, a company, the jurisdiction is likely to correspond to the Member State where it attains the highest turnover. In the case of non-profit organisations, it is likely to be the place where most of its ‘clients’ (in the broadest sense of the word) are located. In both cases, such a Member State is likely to be the one where the damage to reputation and therefore to its professional existence is going to be felt the most. However in all cases, assessments needs to be fact-specific, and moreover, more than one centre of interests could potentially be established (at 116); that latter concession of course is not likely to endear the AG to the Court, given the requirement of predictability.

Answering then the query re injunctions (under the assumption that is an injunction sought by way of final remedy, not an interim measure), the AG employs the possibility of conflicting directions issued by courts with jurisdiction as to the merits of the case, as further argument, ad absurdum, to support his view on locus damni. This issue could raise interesting discussions on the usefulness of directions to remove internet content from particular websites only.

All in all, there is an awful lot of to the point analysis by the AG in this opinion. However the Court’s repeated reluctance to vary Bier and Shevill, a formidable obstacle.

Geert.

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

 

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Kareda v Stefan Benkö: CJEU rules with speed on recourse claim brought between jointly and severally liable debtors.

 

Less than two months after the AG Opined (see my report here), the Court of Justice has already held in C-249/16 Kareda v Stefan Benkö. The judgment follows Opinion to a tee albeit with a slightly more cautious link between Brussels I (jurisdiction) and Rome I /II (applicable law): at 32, with reference to the similarly cautious approach of the Court in Kainz.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9 .

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