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Petronas Lubricants: ECJ confirms that Art 20(2) Brussels I can be used by employer for assigned counter-claim
Last Thursday, the ECJ rendered a short (and rather unsurprising) decision on the interpretation of Art 20(2) Brussels I (= 22(2) of the Recast Regulation). In Petronas Lubricants (Case C 1/17), the Court held that an employer can rely on the provision to bring a counter-claim in the courts chosen by the employee even where said claim has been assigned to the employer after the employee had initiated proceedings.
The question had been referred to the ECJ in the context of a dispute between an employee, Mr Guida, and his two former employers, Petronas Lubricants Italy and Petronas Lubricants Poland. Mr Guida’s parallel employment contracts with these two companies had been terminated among allegations of wrongly claimed reimbursements. Mr Guida, who is domiciled in Poland, had sued his Italian employer in Italy for wrongful dismissal and his employer had brought a counter-claim for repayment of the sums Mr Guida had allegedly wrongfully received, which had been assigned by the Polish employer.
Art 20(2) Brussels I contains an exception to the rule in Art 20(1), according to which an employee can only be sued in the courts of their country of domicile, to allow the employer to bring a counter-claim in the courts chosen by the employee. Similar exceptions can be found in Art 12(2) Brussels I (= Art 14(2) of the Recast; for insurance contracts) and Art 16(3) Brussels I (= Art 18(3) of the Recast; for consumer contracts), all of which incorporate the ground for special jurisdiction provided in Art 6 No 3 Brussels I (= Art 8(3) of the Recast). In the present case, the ECJ had to decide whether this exception would also be available for counter-claims that had been assigned to the employer after the employee had initiated proceedings.
The Court answered this question in the affirmative, pointing out that
[28] … provided that the choice by the employee of the court having jurisdiction to examine his application is respected, the objective of favouring that employee is achieved and there is no reason to limit the possibility of examining that claim together with a counter-claim within the meaning of Article 20(2) [Brussels I].
At the same time, the Court emphasised that a counter-claim can only be brought in the court chosen by the employee if it fulfils the more specific requirements of Art 6 No 3 Brussels I, according to which the counter-claim must have arisen ‘from the same contract or facts on which the original claim was based’. This has recently been interpreted by the ECJ (in Case C-185/15 Kostanjevec) as requiring that both claims have ‘a common origin’ (see [29]–[30] of the decision). Where this is the case – as it was here (see [31]–[32]) –, it does not matter that the relevant claims have only been assigned to the employer after the employee had initiated proceedings (see [33]).
Mareva injunctions under Singapore law
Whether the Singapore court has the jurisdiction or power to grant a Mareva injunction in aid of foreign court proceedings was recently considered by the Singapore High Court in PT Gunung Madu Plantations v Muhammad Jimmy Goh Mashun [2018] SGHC 64. Both plaintiff and defendant were Indonesian and the claim related to alleged breaches of duties which the defendant owed to the plaintiff. The plaintiff had obtained leave to serve the writ in Indonesia on the defendant. The defendant thereupon applied, inter alia, to set aside service of the writ and for a declaration that the court has no jurisdiction over him. In response, the plaintiff applied for a Mareva injunction against the defendant in respect of the defendant’s assets in Singapore. The plaintiff had, after the Singapore action was filed, commenced actions in Malaysia and Indonesia covering much the same allegations against the defendant.
Under Singapore law (excluding actions commenced in the Singapore International Commercial Court where different rules apply), leave to serve the writ on the defendant abroad may be granted at the court’s discretion if the plaintiff is able to show: (i) a good arguable case that the claim falls within one of the heads of Order 11 of the Rules of court; (ii) a serious issue to be tried on the merits; and (iii) Singapore is forum conveniens. On the facts, the parties were Indonesian and the alleged misconduct occurred in Indonesia. As the plaintiff was unable to satisfy the third requirement, the court discharged the order for service out the writ out of the jurisdiction. Other orders made in pursuant of the order for service out were also set aside.
On the Mareva injunction, the Singapore High Court adopted the majority approach in the Privy Council decision of Mercedes Benz v Leiduck [1996] 1 AC 284. Lord Mustill had distinguished between two questions, to be approached sequentially: first, the question of whether the court has in personam jurisdiction over the defendant; secondly, the question of whether the court has a power to grant a Mareva injunction to restrain the defendant from disposing of his local assets pending the conclusion of foreign court proceedings. Valid service is required to found in personam jurisdiction under Singapore law. In PT Gunung Madu Plantations, as in Mercedes Benz itself, as the answer to the first question was in the negative, the second question did not arise.
Justice Woo was cognisant of the difficulties caused by hewing to the traditional approach of viewing Mareva relief as strictly ancillary to local proceedings but stated ‘that is a matter that has to be left to a higher court or to the legislature’ (para 54). His Honour referenced developments in the UK and Australia, where freestanding asset freezing orders in aid of foreign proceedings are permitted. Further, the Singapore International Arbitration Act was amended in 2010 to give the court the power to grant an interim injunction in aid of a foreign arbitration. It is likely that legislative intervention will be required to develop Singapore law on this issue.
The judgment may be found here: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/high-court-judgments/23135-pt-gunung-madu-plantations-v-muhammad-jimmy-goh-mashun
Nori Holdings: England & Wales High Court confirms ‘continuing validity of the decision in West Tankers’ under Brussels I Recast
Earlier this month, the English High Court rendered an interesting decision on the (un-)availability of anti-suit injunctions in protection of arbitration agreements under the Brussels I Recast Regulation (No 1215/2012). In Nori Holdings v Bank Otkritie [2018] EWHC 1343 (Comm), Males J critically discussed (and openly disagreed with) AG Wathelet’s Opinion on Case C-536/13 Gazprom and confirmed that such injunctions continue to not be available where they would restrain proceedings in another EU Member State.
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RabelsZ: New issue alert
The latest issue of RabelsZ has just been released. It contains the following contributions:
OBITUARY
Eva-Maria Kieninger, Ralf Michaels: Jürgen Basedow * 29.9.1949 † 6.4.2023, pp. 229–235, DOI: 10.1628/rabelsz-2023-0051
ESSAYS
Felix Berner: Implizite Qualifikationsvorgaben im europäischen Kollisionsrecht, pp- 236–263, DOI: 10.1628/rabelsz-2023-0028
Implicit Characterization in European Conflict of Laws. – Most German scholars assume that problems of characterization in European choice of law are to be resolved by means of functional characterization. This essay challenges that assumption. Quite often, European choice-of-law rules themselves require a certain treatment of a characterization problem. This can follow from the rules or recitals of European regulations. In such cases, the required approach is more or less explicitly given. However, the required analysis can also be implicitly established, especially when it is derived from the purpose of certain choice-of-law rules. The approach towards characterization is of both practical and theoretical significance. In practice it determines the outcome of a characterization inquiry. On a theoretical level, the approach towards characterization embodies a conceptual change: The more rules on characterization there are, the more the classic problem of characterization is marginalized. Questions of characterization turn into questions of “simple statutory interpretation”.
Frederick Rieländer: Die Anknüpfung der Produkthaftung für autonome Systeme, pp. 264–305, DOI: 10.1628/rabelsz-2023-0032
DEADLINE EXTENDED-Call for submissions: 2023 Nygh and Brennan Essay Prizes – ILA Australian Branch
Written by Phoebe Winch, Secretary of International Law Association (ILA) Australian Branch.
The Australian Branch is now calling for submissions for the 2023 Brennan Essay Prize in Public International Law and the Nygh Essay Prize in Private International Law.
The prizes are awarded for essays that demonstrate outstanding scholarship and make a distinct contribution to the field of public international law and private international law (conflict of laws), respectively. Essays for the prize to be awarded in 2023 should be sent to the email address of the Secretary of the Australian Branch at secretary@ila.org.au.
Further details (including conditions of entry) are available here. The extended deadline for submission is: 5 August 2023.
The results will be made available on the website of the ILA (www.ila.org.au) on approximately 31 August 2023. Winners will be notified by email.
Upcoming Event: International Symposium (hybrid format) on International Arbitration and Mediation in Japan
The Ministry of Justice of Japan (MOJ), Civil Affairs Bureau, in cooperation with the Japan Commercial Arbitration Association (JCAA) and supported by CIArb East Asia Branch, Japan Association of Arbitration (JAA), Japan International Dispute Resolution Center (JIDRC), is organizing an international symposium (hybrid format) on the “Future Prospects of International Arbitration and Mediation: How does the Judiciary Assist?”.
This event could not have been more timely as the House of Councillors (the upper house of the Japanese Diet) unanimously passed and enacted into law on 21 April of this year the amendments to the Arbitration Act and the “Act for the Implementation of Settlement Agreements Resulting from Mediation” (the “Singapore Mediation Convention Implementation Act”). These enactments aim to promote international arbitration and mediation in Japan and to make Japan an attractive hub for international dispute resolution in competition with other leading centers in the region.
Date, Venue & Formats:
July 7 (Fri.), 2023, 9am-12:30 pm (JST)
Hotel New Otani Tokyo?ONSITE / Online?
Language: English
English-Japanese consecutive interpretation available
Program (see link below):
Keynote Speeches
Panel Sessions
Registration: free
Sign up on the Official Website of the Forums
by 6pm, JUNE 26 (Mon.) for ONSITE participation,
by noon, JULY 3 (Mon.) for Online participation
Details of registration and the program can be found here.