Class 7 Flashcards
What is the goal of art. 24(2)?
- Article 24(2): limited sense: if there is a decision on whether a company still exists, has been validly established -> you want the law of the seat of that corporation to hear the case:
- That way, you don’t get conflicting judgements on the existence of companies and their decisions.
- Closts to the lex societatis = issue its judgement on those validity concerns.
What is the case BVG?
- Case about choice of court or law by a director: outside the scope of their power = these kinds of defenses do not fall under art. 24(2) because exceptions to art. 4 have to be interpreted restrictively.
- Whether art. 24 applies cannot rely on whether or not that defense is used because that would make it unpredictable!
- If the issues listed in article 24/2 are just raised by way of defence, then they are not the object of the proceedings and hence they will not trigger article 24/2.
- Different approach than the Gat and Luk case (art. 24(2)
What does art. 24(2) mean?
- Article 24(2): in order to determine the seat, the court shall apply its rules of private international law = exception to art. 62: corporate domicile:
- In article 63: potential of positive conflicts.
- Result is that you might get more than 1 exclusive jurisdiction!
What are the situations where you could have 2 exclusive jurisdiction?
- Both art. 24(1) and 24(2): bizarre situation = oxymoren that you have more than 1 court with exclusive jurisdiction.
- Under art. 24(1): one person seizes the courts in the domicile of the defendant.
- Other person seizes the courts in court of the locus rei sitae.
- Both of them jurisidiction
- Similarly in art. 24(2): a court in Luxemburg that has been seized because according to my Luxemburgish private international law rules, the seat of this corporation is here, in Luxemburg.
- While at the same time: a court in Hamburg might say: ““according to my national private international law rules, the seat of this corporation is here, in Ljubljana.”
What is the solution of of the 2 exclusive jurisdictions?
- Article 31(1): in that case, any other court than the first court seized, will have jurisdiction or will at least have a first go at determining its jurisdiction.
- You could still have a race to court = that you try and beat the other party by seizing a court which you hope you’ll be able to convince that it has jurisdiction or at the very least, you hope that you’ll be able to delay the proceeding sufficiently to frustrate the other party or to force them into a settlement.
Case Gat v Luk
- Case about art. 24(4): intellectual property rights
- Important: it is only IP rights whose creation necessitates registration = not a case concerning copyrights = do not require registration in order to be valid, or for it to exist.
- Here, contrary to BVG, “even if you raise it by defense, the article will be engaged”. = very contradictory!
- This is because it is literally included in the regulation!
- Leads to uncertainty: from the moment the validity of the IPR is raised, that issue will be subject to the exclusive jurisdiction of the courts indicated in article 24/4, but does that court, so indicated, then only hold on the validity issue? Or does it then take the whole case?
- Very often: validity issues are raised by way of defense.
What is a classic defense in IPR litigation?
- An alleged holder of an IP right will sue the party claiming that they’ve infringed that IPR and a classic defense: defending party to say that no such IPR exists.
- How could I’ve have infringed your trademark if it has never been validly registered?
- Often these cases are are not primarily about the validity, they are primarily about an alleged IPR holder wanting to get compensation for infringement of an IPR right and also of course wanting to gain an injunction for further use of the infringed IPR right.
- Some member states practiced that they are happy to stay the proceeding, until the court, designated in article 24/4, has held on the validity issue and then they will resume the case on damages and injunctions and so on, once the validity or not has been established.
- Some of the courts will say once article 24 is triggered, the whole case shifts to this other member state. The difference is huge.
- If you practice IPR = intellectual property right, you will be very aware of what courts you might want to end up in, in the interest of your client.
What are DNIs?
- In a DNI, the action is taken by the party whose accused of having infringed a IPR. It is a proactive action taken by somebody, who expects, because they had conversations or because they received letters by patent attorneys (seize and desist), where you receive a letter from a law firm saying you must stop infringing our IPR.
How are DNI’S used?
- They will seize a court to have that court declare that they haven’t infinged their IPR:
- Your honor, could you please establish that I have not infringed any rights.
- DNIs = usually in a different court than in art. 24(4), but courts of the domicile of the alleged infringer on the basis of art. 7(2).
- The opposing party (here who holds the IPR) will say: this claim dresses up as a declaration of non-infringement but actually: the party is aiming to achieve that I do not have an IP right at all on this trademark.
- The DNI = really is one that fits art. 24(4) → importance of claim formulation.
- It is always best as in-house council to be disciplined and not throw around arguments that would support art. 24(4).
What is art. 24(5)?
- Any issues in procedures concerned with the enforcement of judgments, courts of member state which judgment is enforced → has to be read restrictively:
- The idea is that not by triggering a discussion on the enforceability or not of a judgment of another member state, that you start reigniting the underlying litigation.
- Example: AS Autoteile Service: where one of the parties tried to provoke a discussion on enforcement and then smuggled in the discussion a whole range of issues on the set-off between the 2 parties. They said we might potentially given that this judgment has held that we owe you X Euro, we might forget that you also owe me Y Euros as a result of another case.
What is reflexive application?
- Mozambique rule: common law cas which is established in art. 24(1) = rights in rem issues need to be litigated in the courts of the situs of the immovable object.
- Comitas gentius to justify the Mozambique rule and it also referred to the expectation of reciprocity.
- the reason why we do this is because we expect colleges to equally respect our sovereignty on litigation over English land or real estate.
- Mozambique rules echoes in what the question is on reflexivity /mirror application of art 24 heads of jurisdiction.
What if the immovable object of art. 24(1) is outside the EU?
- Court did not answer but it seems to be that we should look beyond the mere EU-element of the jurisdiction.
- The court ignored it → MS courts that they haven’t been told no so they applied art. 24 reflexively.
- Case Ferrexpo: case where the English court, on an issue that falls under art. 24(4), the decision of the General Meeting of Ukrainian corporation = Ukrainian court should decide on the validity and not an English court, Despite article 24-2 that it does not apply reflectively.
- Case Ferrexpo: case where the English court, on an issue that falls under art. 24(4), the decision of the General Meeting of Ukrainian corporation = Ukrainian court should decide on the validity and not an English court, Despite article 24-2 that it does not apply reflectively.
What is the second part of the matrix
- Article 26: jurisdiction by appearance = submission:
- Sort of impromptu choice of court. If you sue someone and the other party appears before the judge and doesn’t make any noise of that court not having jurisdictions, you can assume that the other party is submitting. The person is then happy being in this court.
- Article does not appear if you appear to contest the jurisdiction.
- Result of the case Elephanten Shoe: If you contest that jurisdiction means that you’re not submitting.
What is the extension of art. 26?
- This now extends to MS where the CPR rules require that you enter a defense on the substance of the case simultaneously with contesting jurisdiction. When you contest jurisdiction, the court will take note of your jurisdictional contestation and move on to the matters of the case. You will be obliged to defend on the merits.
- That’s different in other jurisdictions where the main jurisdictional issues is dealt with first if it is raised before the merits are dealt with. The regulation now clarifies that you still not submit even if you’re pleading of the substance of the case.
Do you have to contest jurisdiction in limine litis?
- National case law and question marks about whether you should contest jurisdiction in limine litis = you must under EU rules, also under CPR national rules, that you must contest jurisdiction on the earliest opportunity = very first engagement with the court → you have to be aware of this!
- Often 5 months into litigation: maybe it is a jurisdictional issue that you do not have to conceit.
What with the cost order proceedings and art. 26?
- A lot of discussion about costs: cost order proceeding = Where you ask the court to force the other party to deposit a minimum amount of funds into a court bank account just in case the other party would lose and has to cover all of the expenses.
- Question: would that be enough to have submitted → it would be useful to have case law on that but there is not.
What are the 2 limitations in art. 26?
- You cannot voluntarily appear in an art. 24 litigation: you cannot both agree to sue in Rotterdam for a German real estate.
- Protected categories: the voluntary appearance must not be used at the detriment of the protected categories.
- A consumer (art. 17), employee (art.21), small-insured who is protected can only submit under art. 26 if the judge tells them specifically that they do not have to be there.
- So the judge has the task to alert the weaker party → so the weaker party has to insist, even though they know their rights.
- It has to be included in the official version of the judgement → to get enforced in another state. A judgement which has been issues in contravention of the protected categories sections can be refused recognition.
What is something you have to be mindful about when you’re a business against a protected category?
- As a business you want to avoid that your opposing party, whose happily agreed to being in a court that they shouldn’t really be, after having been told so by the judge, you want to avoid that they later on in the proceedings, when you’re seeking to enforce the judgment, they say this is a contravention of the protected categories section → registered on the judgement.
- At the least: more difficult to get your judgement recognized and enforced.
What are protected categories?
- Important phenomenon across jurisdictions → attention to making sure that people in an economically weaker position or inbalance of power = they need to be protected against their agreement with choice of court or choice of law provisions.
- Eg. you want to buy a book from a web retailer = you do not have negotiation power over the GTC = general terms and conditions.
- In many jurisdictions: courts have a way to modify or second guess your agreement with the GTC.
How are protected categories helped in European PIL vs. the US?
- European PIL: incapsulated that protection in the regulations themselves (so in statute), as opposed to leaving it to a more factual assessment of weakness.
- US courts: restatement of the law which is this federal attempt to have harmonization etc. But conflict of laws in the US is state law. And almost all states will have regimes for protected categories like employees and like consumers, more on a factual, ad hoc basis with lots of authority that will try and define the criteria and so on as opposed to there being a statute.
- So it’s not just in jurisdiction that there are protected categories.
What are the 3 protected categories?
- Consumers
- Employees
- Small insured = policy holders of small insurance risks: complex picture but not really discussed here. You must consult the appropriate sources when you are faced with those insurance contracts.
Focus on consumers & employees: more straightforward: regime that is regulated by Brussels Ia, Rome I and Rome II.
What is the protection given to the protected categories?
- Protection: the regulation gives them an extra, presumably adventageous, forum where they can sue as a claimant.
- Only presence in the regulation where the regulation is concerned with the position of the claimant (usually predictability for the defendant (art. 4: actor sequitur forum rei = defendant)).
- It will allow the consumer to sue in the courts of their place of domicile and it will allow the employee to sue the employer int he case where the works is habitually carried on.
What 2 (maybe conflicting) principles guide the interaction of art. 4 and the protected categories?
- Court of Justice insists on 2, sometimes conflicting, main guiding principles in art. 4: any exception must be applied restrictively because art. 4 is the general rule:
- You cannot expand the title on protected categories to really kind of make complete negation of the guiding principle of article 4. So it needs to be applied with a certain amount of restriction.
- The Court of Justice does also insist that of course you do apply these sections for the purpose for which they’ve been intended. They are intended to protect consumers, employees and small-insureds, so you musn’t drive your restrictive interpretation to such lenghts that you make the protective regime effectively nullatry, that you make it an empty box = effet utile!
What is the objective of the protected categories?
- Protective objective: So in your interpretation of these sections you must make sure that you meet that protective objective. As you will imagine, depending on what position a party takes, they will insist more on the former or on the latter element of interpretation.