#3620 - Jurisdiction Under Brussels I Regulation 2 - Conflict of Laws

JURISDICTION UNDER BRUSSELS REGULATION 2

Tort

Article 5(3)

• Person domiciled in Member State may be sued in matters relating to tort, delict or quasi-delict, in courts for place where harmful event occurred or may occur.

• C may bring proceedings under Regulation for both:

1. Committed wrongs (that have already occurred)

2. Threatened wrongs (that may occur in future)

• Regulation does not apply where tort is committed outside of EU.

Definition

• ‘Tort’ has autonomous community meaning.

• Tort covers any proceedings which

1. attempt to show liability of D;

2. but which does not involve matters relating to a contract.

• Kalfelis v Bankhaus Schroder [1988]

• English courts have diverted from this viewpoint.

• stated that unjust enrichment – which seems to be a ‘harm’ – was not ‘harmful event’.

• Kleinwort Benson v Glasgow City Council [1997]

• ECJ’s view is correct one.

• Whether event is ‘harmful’ as per Article 5(3) may be determined by national law of courts seised.

• Shevill v Presse Alliance [1996]

Place Where Harmful Event Occurred

1. Multiple Localities

• Sometimes D’s wrongful act is committed in one place, and the harm occurs in another.

• Here the ‘harmful event’ as per Art 5(3) occurs either at:

1. Place where damage occurs; or

2. Place of event giving rise to damage

• GJ Bier v Mines de Potasse d’Alsace [1976]

• Thus C may choose to sue in either jurisdiction.

• GJ Bier v Mines de Potasse d’Alsace [1976]

1. Place where damage occurs

• Place in which damage occurs is place where actual harm is or would be inflicted.

• e.g. for sale of defective goods, this is place in which ‘initial damage occurs as result of normal use of product for purpose for which it was intended’

• and not place in which defective good was manufactured

• Zuid-Chemie BV [2010]

• For defamation, this is where C’s reputation is damaged by defamatory material

  • Shevill [1996]

Indirect loss

• ‘Place in which damage occurs’ does not include indirect damage

• i.e. if D caused damage in State A which results in loss for C in State B, C must sue in place where harm was inflicted on him (State A)

• and NOT where this harm resulted in loss for C (State B)

• Marinari v Lloyds Bank [1995]

2. Place of event giving rise to damage

• Normally easy to know where event giving rise to damage took place.

• For defamation, this is where defamatory material is published

• Shevill [1996]

Misrepresentation

• For misrepresentation, place of event giving rise to damage is place where D makes the misrepresentation

• and NOT where C hears/receives the misrepresentation.

• Domicrest v Swiss Bank [1999] (UK case)

• thus if misrepresentation is made via telephone by someone in France to someone in UK, harmful event occurs in France

• NB place in which damage occurs will still be place in which C suffers loss as a result of relying upon misrepresentation

• this usually where C hears and relies on representation

• Domicrest v Swiss Bank [1999]

2. Distinct Torts

• Where events constitute distinct torts, C may sue in every jurisdiction in which a distinct tort has occurred.

• however when suing in particular jurisdiction , C may only recover for harm caused by torts in that jurisdiction.

• Shevill v Presse Alliance [1996]

Claims in Contract and Tort

• ECJ: where there are claims arising from same event for both breach of contract and tort, claims must be separated.

• i.e. both can be brought, but must be done in separate proceedings

• Kalfelis v Bankhaus Schroder [1988]

• UK: UK courts have however diverted from this viewpoint.

• suggested that where breach of contract gives rise to claims in contract and in tort, case is simply one for breach of contract

• i.e. if English courts do not have jurisdiction under Article 5(1) to hear the contractual claims, they are automatically prevented from hearing the tort claims

• Source Ltd v TUV Rheinland [1998]

Thus under Source view, claims in tort can only be heard if they fall outside the scope of contract

• e.g. a tort covering damage separate to that under contract (economic torts)

• may be possible for C to sue someone else for tortious liability, and then have D joined as a co-defendant (thus evading Source problem)

Activities of a Branch, Agency Etc.

Article 5(5)

• Courts of a Member State have jurisdiction over D where:

1. the dispute relates to the operation of D’s branch, agency, or other establishment

2. and where relevant branch/agency/other establishment is situated in that Member State

• For this to be case, D itself must also be domiciled in a Member State (though not necessarily one in which branch etc. operates)

Thus D, a French company, may be sued in England where it has a branch in England, and the dispute relates to tort/breach of contract committed by that branch.

“Branch, Agency or Other Establishment”

• Key characteristic is whether branch/agency is subject to direction or control of D.

• De Bloos [1978]

• This test then refined in Blanckaert; i.e. for something to constitute D’s branch/agency etc., needs to be:

1. permanent place of business in fixed place;

2. subject to direction and control of D;

3. with a certain autonomy from D; and

4. able to act on behalf of D

• Blanckaert & Willems v Trost [1981]

• Thus must be shown the business is acting on behalf of D, and not simply for its own benefit.

• Subsidiary may be ‘branch’ merely if it appears to third parties that subsidiary is acting on behalf of parent

• even where the two companies are legally independent of each other

• Schotte v Perfums Rothschild [1987]

Dispute Relating to Operation of Branch etc.

• Jurisdiction under Article 5(5) limited to “disputes arising out of the operations of that branch”.

• Relevant operations are any undertakings entered into or incurred by branch on behalf of D which either:

1. fall to be performed by branch itself; or

2. fall to be performed elsewhere (e.g. by D)

• For activities to be those of branch, suffices that there is sufficient nexus between branch and dispute in question.

• i.e. so that it is natural to describe dispute as one arising from activities of branch

• Anton Durbeck [2003]

1. For tort, no need for harmful event to have actually occurred in Member State in which branch is situated

• provided tort arose out of some activity of branch, does not matter even if harmful event occurred outside EU

  • Anton Durbeck [2003]

• whether tort actually arose from operations of D’s branch depends on facts of case.

  • Anton Durbeck [2003]

2. For contracts, no need for obligation to fall to be performed in Member State in which branch is situated.

• i.e. provided there is sufficient nexus between dispute and branch, does not matter where the contractual obligation falls to be performed (even if this is outside EU)

• Lloyds Register of Shipping [1995]

Additional Parties

• Article 6 gives various circumstances in which jurisdiction may be obtained through joining D to proceedings.

1. Multiple Defendants

Article 6(1)

• Allows claimant to join a co-defendant to a proceedings.

• Only possible for C to co-join additional defendant(s) where:

1. the additional D is domiciled in a Member State; and

2. there is an “anchor” defendant.

• **i.e. one of the joint defendants must be being sued in their own domicile (i.e. under Article 2 jurisdiction)**

• Article 6(1): Joinder allowed where claims are so closely connected that they need to be heard together to avoid risk of irreconcilable judgments in separate proceedings.

• For this to be case, must be a risk of both:

1. divergence in outcome of dispute

2. that arises in context of same situation of law and fact

• Freeport v Arnoldsson [2007] (ECJ)

• When ascertaining whether there has been divergence in law and fact, national court must look at all the factors.

• Freeport v Arnoldsson [2007]

• Relevant factor in deciding question is law governing the respective contracts.

• E.g. if C’s contracts with D1 and D2 are both governed by English law, joinder of D2 more likely to be granted

• Gard Marine and Energy v Glacier Reinsurance [2011]

Legal Basis

• No need for claims to have same legal basis.

• provided there is sufficient connection between claims, can be joinder even if one claim is in contract, and the other in tort

• Freeport v Arnoldsson [2007]

• Had previously been ruled by ECJ that both claims had to have same legal basis.

• Reunion Europeenne [2000]

• English courts had criticised the view in Reunion Europeenne

• Watson v First Choice Holidays and Flights Ltd [2001]

• However matter now resolved by Freeport

Tactical Use

• Article 6(1) can be used where C uses it for sole purpose of removing a defendant from courts of his domicile.

• i.e. where C sues D1 and then invokes Article 6(1) solely to prevent courts of D2’s domicile having jurisdiction over D2.

• Freeport plc v Arnoldsson [2007]

2. Third Party Proceedings

Article 6(2)

• Allows defendant to join a co-defendant to proceedings.

• Allowed where additional D2 is domiciled in a Member State

• No requirement for D1 (i.e. who seeks to co-join D2) to have been sued in Member State of domicile in order to join D2.

• For Article 6(2) to be used by D to co-join D2, must be sufficient nexus between:

1. C’s claim against D

2. D’s claim for contribution against D2

• Kinnear v Falconfilms [1996]

• Nexus required to given English courts jurisdiction over third parties under common law rules likely to be sufficient to satisfy Article 6(2).

• Kinnear v Falconfilms [1996]

Tactical Use

• Article 6(2): art 6(2) CANNOT be used for sole purpose of removing D2 from jurisdiction of Member State of his domicile.

• Is abuse of process on D’s behalf

3. Counterclaims

Article 6(3)

• Allows D to make counterclaim against C in courts of...