Class 5: Civil and Commercial condition

Question 1

What was Eurocontrol?

Answer 1

• Civil and commercial = knockout point → if your case is not civil and commercial → regulation does not apply at all.
• Eurocontrol: autonomous interpretation: concepts used in the regulation must be given a wide EU-meaning:
  
  • “Certain types of judicial decisions must be regarded as excluded from the area of application of the convention, either by reason of the legal relationships between the parties to the action or of the subject-matter of the action.”
  • Also reference to the idea of public authority acting in the exercise of its powers = translates into acta jure imperii -> does not fall under the regulation

Question 2

What is the intention of the Brussels regulation?

Answer 2

• Intention regulation: have a clear, harmonized set of jurisdictional rules which then in the 3rd step means through predictability = no room for manoeuvre of judges to second-guess the application of the regulation by other judges.
• Specific attention to the defendant = almost complete certainty of the place where they might be sued!

Question 3

What is the case Fahnenbrock? Facts of the case?

Answer 3

• German bold holders seeking compensation for the Greek bonds for disturbance of ownership and property rights.
• No acta jure imperi = it does not fall under the notion civil and commercial matters so the regulation does not apply. German court found it inadmissible.
• Debt: haircut → you have to kiss goodbye to x % of your claim. Greek debt crisis = collective haircut to save the debt.
  
  • The bond holders did not want to end up before a court in Greece: they would rather be in Germany, because these non-Greek debt holders = lots of open controversy.

Question 4

What was the opinion of the AG in Fahnenbrock?

Answer 4

• Opinion Advocate General: Yves Bot, he looks more, whether the actions of the parliament = distance from the contract. you had to look at the practical, real world impact on the claim litigated in the court. Court of Justice = direct & immediate effect, look more at how far removed you are.

Question 5

What did the court say in Fahnenbrock?

Answer 5

• Direct and immediate effect: if the public authority has a direct and immediate impact on the claim of the claimant → case falls under acta iure imperii and not one that is covered by a regulation.
• Court: manifestly falling out = only if it is clearly not. Here because it is the Evidence Regulation.

Question 6

What is the idea of “direct & immediate” effect?

Answer 6

• Direct and immediate effect
• Issues: you have to be aware, this is a case, unlike Kuhn, under the Evidence regulation = quick enforcement of judgements. The point is that you get a quick and swift solution to the issue.
• If the public authority have a direct & immediate effect on the claim of the claimant = not covered by regulation

Question 7

What is the case of Kuhn?

Answer 7

• Case on the sovereign debt: Greek state had immunity because of public authority = excluded from Brussels Ia regulation.
• Problem is: the whole point is predictability but here a lot of wiggle room!
  
  • Greek State had sovereign immunity in the case, despite early rumblings about civil and commercial.

Question 8

Case Dinant Bar

Answer 8

• Payment of bar fees by a French registered lawyer at the Bar of Dinant and the Court of Justice distinguished between that part of the bar fee:
  
  1. Representation, payment for the professional duties which the bar counsel has to carry out by law: eg. certain provisions in the civil code.
  2. Big chunk not related to public functions: eg. professional indemnity insurance.
• So it is only the part of the public duties fee that falls outside of the scope of Brussels Ia, all the rest inside. So you could have split litigation.

Question 9

Case movic?

Answer 9

• Case about the Supreme Site Services. Court of Justice tries to give more detail on the procedural context of the litigation: privileges which one particular party might have vis à vis the other → has an impact on the classification of civil and commercial.
• Relates to Belgian code of Civil procedure which gave specific powers to Ministère Publique as opposed to private parties.
• Quite a convoluted analysis.

Question 10

Does public procurement fall under civil and commercial?

Answer 10

• Public procurement: can be used for the public authority so sometimes you could argue that it is not civil and commercial.
• Eurocontrol was at a time where you could not pursue a money claim against an authority.
• Fahnenbruck, Movik = all cases about money where the other party drags up a public authority line which makes the judge doubt, even if it is just a partial link or part of a claim = might be enough to delay things.

Question 11

What is excluded from the scope of application of Brussels Ia?

Answer 11

• Revenue, customs and administrative matters
• Status and legal capacity of natural persons
  
  • Mostly covered by other instruments
• Insolvency
• Social security: not civil or commercial
• Arbitration: has been debated
• Maintenance obligations

Question 12

What was Eurocontrol?

Answer 12

• Article 1 should be given an autonomous interpretation: the kind of court which is involved is irrelevant.
• A dispute between an individual and the state is not a civil and commercial matter when the public body is exercising its public powers.
• When the public body is acting in a private capacity, the case can be civil and commercial
• It is the nature of the relationship between hte parties that is decisive.

Question 13

Is arbitration included in the regulation?

Answer 13

• Complicated matter: it is in principle excluded from the scope but:
• Rich: this exclusion does not only apply to the arbitration proceedings themselves, but also to other proceedings that relate to the arbitration
  
  • Here: the appointment by a regular court of an arbitrator
• West Tankers: if however the procedure that relates to the arbitrationd oes not have arbitration itself as the subject, the matter does fall within the scope of the regulation:
  
  • In this case an anti-suit injunction before an Italian court with arbitration proceedings in the UK

Question 14

When can the regulation apply?

Answer 14

1. When the defendant is domiciled in an EU Member State
   
   • When the defendant is not domiciled in the EU, article 6 lists instances where the Regulation still applies
2. When a court in the EU has exclusive jurisdiction on the basis of art. 24
3. When there is a valid choice of court agreement which appoints a court in the EU
4. When the contract is a B2C (with activities directed at the EU) or an employment contract (with employee habitually employed in the EU)

Question 15

What is domicile?

Answer 15

• Core term in the regulation:
• Art. 62: natural persons:
  
  • The national court applies its national law to establish whether a party is domiciled in their territory
• Art. 63: business: 3 possibilities:
  
  1. Statutory seat
  2. Place of central administration
  3. Principal place of business

Question 16

What is the matrix?

Answer 16

1. Exclusive jurisdiction regardless of domicile: 24
2. Jurisdiction by appearance: 26
3. Insurance, consumer and employment contract (protected categories): 10-23
4. Agreements on jurisdiction (choice of court): 25
5. General jurisdiction, defendants domiciled in the MS: 4-5
6. General jurisdiction, defendants domiciled in the MS: 7-9
7. Residual jurisdiction: defendans not domiciled in any MS: 6
8. Loss of jurisdiction, lis alibi pendens & related actions: 29-34
9. Applications for provisional or protective measures: 35

Question 17

Why was insolvency excluded from Brussels Ia?

Answer 17

• Insolvency was excluded from Brussels Ia because it is so importantly and closely related to the internal markt and the ideas of fostering trade → separate convention (which came much later).

Question 18

Why is arbitration excluded from Brussels Ia?

Answer 18

• There is already an international convention that deals with recognition and enforcement of arbitral awards = Convention of New York 1958 → Excluded arbitration from Brussels Ia -> case Rich!
• Commission thought about including arbitration, then no more anti-suit but a more effective instrument than under NY Convention. In the end it did not come through.
  
  • See recital 12

Question 19

What was the case Rich?

Answer 19

• Company that ordered a big amount of oil with an Italian company Impianti and this contract included an arbitration clause. They both sued each other whether the arbitration clause was valid = falls within the scope of the convention?
• Court: Parties intended to exclude arbitration in its entirety, including proceedings brought before national courts. But it stated that one should look at the subject matter of the dispute to decide whether or not it is about arbitration.

Question 20

What if you do not fall under any EU PIL instrument?

Answer 20

• Everything that is not harmonized by the EU = residual area of application: not within the scope of application, not civil and commercial → states can have their residual rules on how they deal with jurisdiction, application, enforcement, recognition.
• For this: definitions are really important because if you do not fall under any EU PIL instrument → come into the residual sphere.
• For this: definitions are really important because if you do not fall under any EU PIL instrument → come into the residual sphere.
  
  • As a consequence: you have a lot of discrimination between those areas where EU law does apply and where it doesn’t = creates disparity, more unpredictability.
  • But the upside = you get regulation policy “sandbox”: you leave people room to play with new ideas, new approaches,…

Question 21

Case Van Houtte

Answer 21

• Talks about ancillarity to arbitration proceedings: “If a proceeding is ancillary to an arbitration proceeding, then it falls within the exception. But not if it is ordered in parallel to such proceeding and intended as measure of support because those protective right of rights”
• Van Houte: provisionary measures.
• Distinction between measures that are ancillary to arbitration proceedings and others which are parallel to arbitration proceedings. People focused on provisionary measures elements and the arbitration measure was not thought about.

Question 22

Case West Tankers

Answer 22

• Can we issue anti-suit to support arbitration? That was seen by London as really crucial = because the anti-suit can be quite useful for parties.
• In order to determinate if this falls within the scope of Brussels Ia, a reference should be made to the proceeding (Rich). More specifically, the nature of the right of which the proceeding seeks to protect (van Houte).
• An anti-suit proceeding is outside the scope of Brussels 1A, so there is what the Court says it looks if you just knock yourself out and issue an anti-suit injunction to order the party to turn arbitration.
• Court of Justice said: none of the commercial impact has any relevance to interpretation on Brussels Ia = predictability, autonomous interpretation, legal certainty → quite a shock!

Question 23

What is the legal status of recitals?

Answer 23

• Recitals do not have a status of law, you cannot distil a legal rule merely on the basis of recitals, but you can use them to supplement your interpretation in a provision.
• However, there is a growing trend in European PIL to put rules in recitals which are not included in the Regulations itself = not just supplement interpretation but provide additional rules that are not in the Regulation → very worrying!

Question 24

Case Premier Cruises?

Answer 24

• Case where DLA Piper tried to get out of an arbitration proceeding related to a particular advice they gave to Premier Cruises by claiming that the litigation fell outside the scope, so that they had to go to Russia to arbitrate.
• Court: this can be settled by the ordinary rules or arbitration exception.

Question 25

What are the concerns with the Brussels Ia regime and the arbitral exception?

Answer 25

• Development of recitals
• Court’s ignorance of commercial realities
• Ignorance of the need to protect the European judicial space against arbitration centers outside of the EU
• Lack of attention of Court for regulative competition and civil procedure.
• Relevance of MS of using their residual sphere because MS will no longer be able to pick up interesting ideas of other MS if they all simply copy paste the European principles.

Question 26

What is the scope of application ratione personae of Brussels Ia?

Answer 26

1. Defendant is domiciled in an EU MS: Art. 4: actor sequitur forum re = you may sue the defendant in their MS domiciled.
2. When a court in the EU had exclusive jurisdiction on the basis of art. 24
   
   • Art. 24: list of issues where the regulations gives exclusive jurisdiction to a court in a MS regardless of domicile of the parties, even if none of the parties are domiciled in the EU, this jurisdiction rule will still apply.
3. When there is a valid choice of court agreement which appoints a court in the EU. Before Brussels Ia: you could only do this if one of you was domiciled in the EU to choose a MS court because your judgement would not travel under EU PIL = you could still choose, but frustrating.
   
   • Now it is possible: neither party has to be domiciled in the EU to appoint a court in a MS and that judgement will travel throughout the EU.
4. When the contract is B2C or an employment contract. It will apply regardless of domicile of the parties.

Question 27

What is the matrix?

Answer 27

• Matrix means that the regulation lists a number of jurisdictional rules in varying order of exclusivity, of strength.
  
  • Some rules you can get rid of by consent of the parties, others are not as flexible.
• Matrix: lists the most exclusive first and least exclusive at the bottom, not chronologically = no clear hierarchy → you need to learn by heart.
• Important: you need to qualify properly (Von Savigny) = you are the post master.
  
  • You work your way through the matrix until one applies and leads you to a court! You reverse engineer in practice if you want to end up somewhere specific.