Posts Tagged Universal Music

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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Universal Music: The CJEU distinguishes Kolassa but just won’t give up on Bier.

Uppdate 4 October 2017 for the eventual Dutch judgment (Hoge Raad) see here. Thank you Michiel Poesen for flagging. UM had not invoked other factual elements linking the case to The Netherlands, than the payment of the settlement from a Dutch bank account.

As I had feared /as was to be expected, the CJEU did not follow Szpunar AG’s lead in formally letting go of Case 21/76 Bier‘s Erfolgort /Handlungsort distinction, even if it did accept the AG’s rejection in the case at issue, of the mere presence of a bank account triggering jurisdiction for tort under (now) Article 7(2) Brussels I Recast.

Kolassa upheld jurisdiction in favour of the courts for the place of domicile of the applicant by virtue of where the damage occurred, if that damage materialises directly in the applicant’s bank account held with a bank established within the area of jurisdiction of those courts. In Universal Music the CJEU distinguished Kolassa: for in the latter case there where ‘circumstances contributing to attributing jurisdiction to those courts.’ In general, the Court held in Universal Music, ‘purely financial damage which occurs directly in the applicant’s bank account cannot, in itself, be qualified as a ‘relevant connecting factor’‘ (at 38) . ‘ 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.‘ (at 39).

The Court at 38 flags a rather interesting and relevant argument for dismissing pure presence of  a bank account as a determining connecting factor (a student of mine, Tony Claes, had made the same argument earlier this ac. year): a company such as Universal Music may have had the choice of several bank accounts from which to pay the settlement amount, so that the place where that account is situated does not necessarily constitute a reliable connecting factor. What the Court is essentially saying is that in such circumstance the applicant can manipulate jurisdiction and hence shop for a forum: which is not part of the jurisdictional rule for tort.

Crucially of course we are left having to ponder what exactly ‘other circumstances’ than location of bank account may imply.

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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