Posts Tagged VI ZR 516/14
Fahnenbrock: ‘Civil and commercial’ viz bearers of Greek bonds. ECJ puts forward ‘direct and immediate effect’.
[Postscript 11 March 2016. The decision of the Bundesgerichtshof on 8 March 2016 is at odds with the CJEU’s finding. Peter Bert has background. The German Court declared action by German bondholders against the Greek State inadmissable on grounds of sovereign immunity: if the case were admissible, the German courts would have to assess the merits of Greek acta iure imperii].
Within the context of the service of documents Regulation (1393/2007) but with no less relevance for the Jurisdiction Regulation, the Court held last week on the qualification of an action by (German) holders of Greek bonds, against the Greek State, for the involuntary shave they took on those bonds. I reviewed Bot AG’s Opinion here. He had suggested that in the case at issue, the Greek State, with its retroactive insertion of the collective action clause in the underlying contract, exercised acta uire imperii with direct intervention in the contract itself. Not an abstract, general regime (such as a change in overall tax) which only has an impact on said contract at arm’s length.
The ECJ disagreed. Its finding may be distinguishable, in that it emphasises (at 40 and 44 in particular) that for the service of documents Regulation, things need to move fast indeed and hence interpretation even of core concepts of the Regulation needs to proceed swiftly: ‘in order to determine whether Regulation No 1393/2007 is applicable, it suffices that the court hearing the case concludes that it is not manifest that the action brought before it falls outside the scope definition of civil and commercial matters.‘ (at 49) However in the remainder of the judgment it does refer to precedent in particular under the Brussels I Regulation, hence presumably making current interpretation de rigueur for European civil procedure generally.
As noted in my earlier review, Bot AG opined that the Greek State’s intervention in the contracts was direct and not at a distance from the contract. The Court on the other hand essentially emphasised (at 57) that even though the Greek State, with its retroactive insertion of the collective action clause in the underlying contract, enabled the subsequent vote by the majority of the bondholders (to the dismay of the outvoted applicants), it was the vote, which led directly and immediately to changes to the financial conditions of the securities in question and therefore caused the damage alleged by the applicants – not the Act which enabled it. Not acta iure imperii therefore and hence European civil procedure is applicable.
I need to ponder this a bit further however at first sight the ‘direct and immediate’ effect test brings back soar memories of the ‘primarily aimed at’ test in WTO law, which took some time for the Appellate body to shake off. A bit of a leap, I know, but the trade lawyers among you will know what I mean. Applicants in the case at issue may be left arguing that identifying the Greek State’s intervention as the cause of the change in law, is no application of the butterfly effect (an extremely remote event which is being blamed for downstream effects) but rather an elephant in the Greek bond market room.
‘Direct and immediate effect’ may become an important consideration in the ECJ’s application of ‘civil and commercial’ in EU civil procedure law.