Freedom of establishment after Polbud: Free transfer of the registered office

Bastian Brunk, research assistant and doctoral student at the Institute for Comparative and Private International Law at the University of Freiburg (Germany), has provided us with the following first thoughts on the CJEU’s groundbreaking Polbud judgment.

The Judgment

In its judgment in Polbud (C-106/16), the CJEU again took the work out of the EU legislature’s hands while further developing the freedom of establishment provided for in Articles 49 and 54 TFEU. The case was heard following a request for a preliminary ruling under Article 267 TFEU by the Sad Najwyzszy (Supreme Court of Poland). In short, the CJEU had to decide on the following questions:

(1) Are Articles 49 and 54 TFEU applicable to a transfer of the registered office of a company incorporated under the law of one Member State to the territory of another Member State with the purpose of converting its legal form, when the company has no intention to change the location of its real head office or to conduct real economic activity in the latter Member State?

Court of Appeal allows in England claims against English-based multinational for overseas human rights violations

Written by Ekaterina AristovaPhD in Law Candidate, University of Cambridge

On 14 October 2017, the London’s Court of Appeal passed its long awaited decision in Lungowe v Vedanta confirming that foreign citizens can pursue in England legal claims against English-based multinationals for their overseas activities.

In 2015, Zambian villagers commenced proceedings against Vedanta, an English-based mining corporation, and its indirect Zambian subsidiary, KCM, alleging responsibility of both companies for the environmental pollution arising out of the operation in Zambia of the Nchanga Copper Mine by KCM. In 2016, the High Court allowed claims against both companies to be heard in England. The overall analysis of the judgement (see the author’s earlier post on this blog) suggested that (1) claims against the parent company on the breach of duty of care in relation to the overseas operations of the foreign subsidiary can be heard in the English courts and (2) the existence of an arguable claim against the English-domiciled parent company also establishes jurisdiction of the English courts over the subsidiary even if the factual basis of the case occurs almost exclusively in the foreign state. The Court of Appeal has entirely upheld a High Court ruling.

Dutch collective redress dangerous? A call for a more nuanced approach

Prepared by Alexandre Biard, Xandra Kramer and Ilja Tillema, Erasmus University Rotterdam

The Netherlands has become dangerously involved in the treatment of mass claims, Lisa Rickard from the US Chamber of Commerce recently said to the Dutch financial daily (Het Financieele Dagblad, 28 September 2017) and the Dutch BNR newsradio (broadcast of 28 September 2017). This statement follows the conclusions of two reports published in March and September 2017 by the US Institute for Legal Reforms (ILR), an entity affiliated with the US Chamber of Commerce. Within a few hours, the news spread like wildfire in online Dutch newspapers, see for instance here.

Worryingly enough, the March 2017 report, which assessed collective redress mechanisms in ten Member States, predicted that ‘there are a number of very powerful indicators that all of the same incentives and forces that have led to mass abuse in other jurisdictions are also gathering force in the EU’. Among the jurisdictions surveyed, the Netherlands appeared as a place particularly prone to such abuse. The September 2017 report focuses on consumer attitudes towards collective redress safeguards, and ultimately concludes that 85% of respondents tend to support the introduction of safeguards for the resolution of mass claims.


The End of the “Sahyouni Saga”

The German Bundesgerichtshof (BGH) in August finally decided the case “Sahyouni” that made it twice to the ECJ (Sahyouni I  and Sahyouni II). The BGH decision (German text here) applied the new German rules on private divorces. The German legislator had enacted these rules after the ECJ declared the Rome III Regulation as only applicable on divorces by a court. Additionally, the court took the opportunity to comment on several other private international law issues. The probably most interesting issues of the case are (1) the new German rules, (2) the treatment of parties with more than one nationality if the connecting factor is nationality and (3) the question whether the unilateral private divorce finally was recognized.

  1. German law regarding “private divorces”

Following the second “Sahyouni” decision, new private international law rules were enacted. German private international law follows the principle of “recognition via conflict of laws”, meaning that a divorce not issued by a court decision will only be recognized if it complies with the rules applicable according to German private international law. The new rules basically declared the Rome III Regulation applicable to private divorces mutatis mutandis except for those rules that could not be applied on a private divorce (e.g. the application of lex fori as there is not forum). Furthermore, Article 10 Rome III, the rule that initially triggered the request for the preliminary ruling, is not applicable. Thus, only the “usual” public policy exception can prevent the application of the lex causae.

Personal jurisdiction over a non-resident defendant in a product liability case to be argued before the US Supreme Court today: the consolidated Ford Motor cases

The US Supreme Court will hear oral arguments today (7-Oct-2020) concerning two consolidated cases: Ford Motor Co. v. Montana Eighth Judicial District Court and Ford Motor Co. v. Bandemer. The consolidated cases deal with the difficult issue of personal jurisdiction over a non-resident defendant, where there is a split in federal courts of appeals and state courts of last resort. These cases are significant because they will have a direct impact on the ease with which plaintiffs can lodge a complaint in product liability cases against big automobile companies (and others) before the courts of their own state. In a nutshell, it can be argued that besides jurisdictional matters relating to the defendant, these cases deal with fundamental notions of access to justice for consumers.

The oral argument was originally scheduled for April 2020 but given the Covid-19 pandemic was rescheduled for the October 2020 term. Please note that the Supreme Court can hear oral arguments even though they are currently only 8 justices. According to Rule 4 of the Supreme Court of the United States, six Members of the Court constitute a quorum. Nevertheless, complications may arise if there is a 4-4 split during the deliberations. Given the great experience and expertise of Justice Ginsburg in this area (see our previous post here), it is a pity that she could not partake in this oral argument and decision, and she will be greatly missed.

Below I include the question presented. More information will follow soon, stay tuned!

Petition for a writ of certiorari on behalf of Ford Motor Company

“The Due Process Clause permits a state court to exercise specific personal jurisdiction over a non-resident defendant only when the plaintiff’s claims “arise out of or relate to” the defendant’s forum activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks omitted).”