Class 7

Question 1

What is the goal of art. 24(2)?

Answer 1

• 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.

Question 2

What is the case BVG?

Answer 2

• 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)

Question 3

What does art. 24(2) mean?

Answer 3

• 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!

Question 4

What are the situations where you could have 2 exclusive jurisdiction?

Answer 4

• 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.”

Question 5

What is the solution of of the 2 exclusive jurisdictions?

Answer 5

• 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.

Question 6

Case Gat v Luk

Answer 6

• 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.

Question 7

What is a classic defense in IPR litigation?

Answer 7

• 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.

Question 8

What are DNIs?

Answer 8

• 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.

Question 9

How are DNI’S used?

Answer 9

• 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).

Question 10

What is art. 24(5)?

Answer 10

• 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.

Question 11

What is reflexive application?

Answer 11

• 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.

Question 12

What if the immovable object of art. 24(1) is outside the EU?

Answer 12

• 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.

Question 13

What is the second part of the matrix

Answer 13

• 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.

Question 14

What is the extension of art. 26?

Answer 14

• 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.

Question 15

Do you have to contest jurisdiction in limine litis?

Answer 15

• 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.

Question 16

What with the cost order proceedings and art. 26?

Answer 16

• 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.

Question 17

What are the 2 limitations in art. 26?

Answer 17

1. You cannot voluntarily appear in an art. 24 litigation: you cannot both agree to sue in Rotterdam for a German real estate.
2. 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.

Question 18

What is something you have to be mindful about when you’re a business against a protected category?

Answer 18

• 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.

Question 19

What are protected categories?

Answer 19

• 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.

Question 20

How are protected categories helped in European PIL vs. the US?

Answer 20

• 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.

Question 21

What are the 3 protected categories?

Answer 21

1. Consumers
2. Employees
3. 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.

Question 22

What is the protection given to the protected categories?

Answer 22

• 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.

Question 23

What 2 (maybe conflicting) principles guide the interaction of art. 4 and the protected categories?

Answer 23

• 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:
  
  1. 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.
  2. 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!

Question 24

What is the objective of the protected categories?

Answer 24

• 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.

Question 25

What is the difference between art. 24 and art. 18 wrt consumers?

Answer 25

• Article 24 points to courts of a MS → indicates a MS courts that have jurisdiction, which court it is up for the MS CPR Rules
• If you go to art. 18: a consumer might bring proceedings against another party (which is the business = B2C), either in the courts of the MS in which their party is domiciled (this is art. 4 reinstated) or sue in the court for the place where the consumer is domiciled (=this is where the protection kicks in).
  
  • Even if the Belgian CPR rules state you have to go to Dendermonde, if you fall under Brussels Ia, you can ignore this and go to the court indicated by Brussels Ia (eg. Leuven)
  • This is a formidable opportunity, despite GTC’s which you have ticked → Amazon will nog be able to insist that you sue them in Luxembourg. You may insist that you sue them in Leuven. If that is where you are domiciled and ofcourse provided that the conditions for application of the consumer section are met.

Question 26

Does the consumer and employment section apply in or out EU?

Answer 26

• Both the consumer section and employment section apply regardless of inside EU or outside of the EU domicile of the defendant = business → important different with Brussels Convention I.
• Before proceedings initiated after the 10th of January 2015, if you were a business located outside of the EU then you would not be caught by the protective regime of either consumers or employees or indeed insurance risks.
  
  • Now section 4!

Question 27

What are the protected categorie s on the applicable law-level?

Answer 27

• Large corporations generally do not care where you sue them: have a local lawyer. What they do mind: to be subject to EU consumer laws → they would rather not be subject to EU privacy law.
  
  • Rome I: you will be able to insists as a consumer on the application of European consumer law, including privacy regulation.
• Pure transport contracts are excluded from the scope of application (art. 17(3)), other than a contract which for an inclusive price provides for a combination of travel and accommodation.
  
  • Slightly dated = now an important part of consumer contracts are transport: eg. airlines.

Question 28

What is excluded from consumer section?

Answer 28

• Pure transport is not included in the consumer exception. But the contracts come again from the moment within the scope of the consumer section from the moment the Corporation concerned offers more than just transport.
  
  • Eg. Eg. Eurostar: just a train ticket but they also provide St. Pancras hotel = within the scope of the consumer section again.

Question 29

What if your contract does not qualify as a consumer contract?

Answer 29

• Corrective mechanism, even if your contract does not qualify as a consumer contract within the rather strict conditions of art. 17 → still a role to be played for consumer law under art. 25: choice of court provisions.
• This does not mean that when you book with Ryanair that you are completely left out to dry → you will be protected to some degree under the limitations that European consumer law puts upon choice of court.
  
  • Case Ryanair and Delayfixed

Question 30

What if you do meet the conditions of the consumer section?

Answer 30

• Then your only home in the regulation is section 4:
  
  • Eg. art. 4 is not part of section 4 of the regulation.
  • Section 4 says: you can sue the business in their place of domicile, but that is not by virtue of art. 4, that is by virtue of art. 18.
• Important because on the most CPR rules in MS, including the Belgian rules, if you quote the wrong legal basis in an application for judicial review, the Supreme Court = already lost.
• You must provide the court with the exact legal basis that the lower courts have misapplied their judgement on.

Question 31

What is the first condition for the consumer section?

Answer 31

• You have to have a contract:
  
  • Art. 17: in matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his straight or profession and then jurisdictions will be determined by this section provided, if (number of conditions).
• The regulation is one of the pieces of EU-law where you think you can breeze through it, with the exception of the fact that there are more than 1 exclusive court = quite strange.

Question 32

Important difference common and civil law on contracts?

Answer 32

• In common law: you need consideration!
  
  • Common law does not know the unilateral contract, it does not exist, only when you both have obligations. Even if it is only 1 dollar → still enough quid for a his quo = legal advice → covered by professional privilige, not if they don’t.
• This is an important element: so in the regulation = you need a contract: if there is no contract, section is not triggered. Same thing for applicable law.
• Reason why, in the event of Facebook, looks like a free service = no contract? None of the jurisdictional law would apply or enforceable, but there is a consideration = you give away the rights for everything that you put on the website! You also surrender a lot of data: quid pro quo, despite it being called free.

Question 33

What was in the previous text required for consumers?

Answer 33

• Active consumers: in previous versions, there needed to be an offer by a business and an actual act of acceptance by the consumer reacting to that offer.
  
  • 20 cases going up to Luxemburg on tombola’s, raffles: mails where you have an offer for a consumer: “you have one a villa in Cyprus”. All you had to do was to send back the letter but if you read the small letter = part of a raffle.
  • This was an offer: is the single act of answering the email = yes, I’ll have my villa = enough for there to be reciprocity? Quid pro quo?
• Under the previous one: act of accepting the offer was required.

Question 34

What was case Ilszinger?

Answer 34

• Case Ilszinger: post Brussels I (first version of the regulation: turned into EU law), the wording has changed → do we still insist on reciprocity? Article 17: no longer the mention of recprocity.
• But reciprocity is still required: For the contract section, art. 17(1), it arguably might no longer be required.
• For common law background, art. 7’s notion of contract, which seemingly might not require a contract, might be a slightly awkward notion.