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ECJ on „civil and commercial matters“ under Article 1 (1) Brussels Ibis Regulation, judgment of 16 July 2020, C-73/19 – Movic
The Court decided that Article 1(1) of Regulation (EU) No 1215/2012 of Brussels Ibis Regulation must be interpreted as meaning that an action where the opposing parties are the authorities of a Member State and businesses established in another Member State, in which those authorities seek, primarily, findings of infringements constituting allegedly unlawful unfair commercial practices and an order for the cessation of such infringements and, as ancillary measures, an order for publicity measures and the imposition of a penalty payment, falls within the scope of the concept of ‘civil and commercial matters’ in that provision.
As AG Spzunar had proposed (see post on CoL), the Court held that
[t]o hold proceedings brought by a public authority are outside the scope of Regulation No 1215/2012 merely because of the use by that authority of evidence gathered by virtue of its public powers would undermine the practical effectiveness of one of the models of implementation of consumer protection envisaged by the EU legislature. In that model, in contrast to the one in which it is the administrative authority itself that determines the consequences that are to follow from an infringement, in circumstances such as those in the main proceedings the public authority is assigned the task of defending the interests of consumers before the courts.
The Court explained:
[26] The question posed by the referring court relates, in essence, to the determination of which court has jurisdiction to rule on actions brought by the authorities of a Member State against companies in another Member State that seek to identify and stop allegedly unlawful commercial practices of those companies that are aimed at consumers residing in the former Member State. (…).
[35] [T]he Court has repeatedly held that, although certain actions where the opposing parties are a public authority and a person governed by private law may come within the scope of Regulation No 1215/2012, it is otherwise where the public authority is acting in the exercise of its public powers (see, to that effect, judgments of 11 April 2013, Sapir and Others, C?645/11, EU:C:2013:228, paragraph 33 and the case-law cited, and of 12 September 2013, Sunico and Others, C?49/12,EU:C:2013:545, paragraph 34). (…).
[37] [I]n order to determine whether or not a matter falls within the scope of the concept of ‘civil and commercial matters’ within the meaning of Article 1(1) of Regulation No 1215/2012, and, consequently, whether it comes within the scope of that regulation, it is necessary to determine the nature of the legal relationships between the parties to the action and the subject matter of the action or,alternatively, the basis of the action and the detailed rules applicable to it (see, to that effect, judgments of 14 October 1976, LTU, 29/76, EU:C:1976:137, paragraph 4, and of 28 February 2019, Gradbeništvo Korana, C?579/17, EU:C:2019:162, paragraph 48 and the case-law cited).
[41] [T]he Court has previously held that an action concerning the prohibition on traders using unfair terms, within the meaning of Directive 93/13, in their contracts with consumers, in so far as it seeks to make relationships governed by private law subject to review by the courts, falls within the concept of a ‘civil matter’ (see, to that effect, judgment of 1 October 2002, Henkel, C?167/00, EU:C:2002:555, paragraph 30). That case-law has subsequently been reiterated and extended more generally to cessation orders under Directive 2009/22 (see, to that effect, judgment of 28 July 2016, Verein für Konsumenteninformation, C?191/15, EU:C:2016:612, paragraphs 38 and 39).
[42] It follows that actions aimed at determining and stopping unfair commercial practices, within the meaning of Directive 2005/29, are also ‘civil and commercial matters’ within the meaning of Article 1(1) of Regulation No 1215/2012.
[48] In the present case, it is apparent from the wording of Article 14(1) of the Law of 30 July 2013 and Article XVII.7 of the CEL that the Belgian authorities, in the same way as interested parties and consumer protection associations, can apply to the President of the rechtbank van koophandel (Commercial Court), subsequently the ondernemingsrechtbank (Companies Court), for a finding that the relevant national legislation has been infringed and for the making of a cessation order.
[49] It follows that the procedural position of the Belgian authorities is, in that regard, comparable to that of a consumer protection association.
A number of points were raised by the defendants against this characterization (e.g. no need to show an interest in bringing proceedings; acting in a general interest; use of evidence gathered by exercising public powers; ancillary publicity and penalty measures against the infringer), but none of them had success.
The full text of the judgment is here.
ECJ on international jurisdiction (rebuttal of presumption of the COMI for individuals) under the European Insolvency (Recast) Regulation, judgment of 16 July 2020, C?253/19 – Novo Banco
The Court decided, as had been proposed by AG Szpunar (see our post on the Opinion), that the first and fourth subparagraphs of Article 3(1) of the EIR(Recast) must be interpreted as meaning that the presumption established in that provision for determining international jurisdiction for the purposes of opening insolvency proceedings, according to which the centre of the main interests of an individual not exercising an independent business or professional activity is his or her habitual residence, is not rebutted solely because the only immovable property of that person is located outside the Member State of habitual residence.
MH and NI, a married couple who, since 2016, have been resident in Norfolk (United Kingdom) where they pursue an activity as employed persons, applied to the Portuguese courts to open insolvency proceedings against themselves. The court of first instance hearing the application declined international jurisdiction to hear that application on the ground that, under the fourth subparagraph of Article 3(1) of Regulation 2015/848, the centre of the main interests of the applicants in the main proceedings was their habitual residence, which was in the United Kingdom, and that consequently the courts of that Member State had jurisdiction to open insolvency proceedings. MH and NI lodged an appeal against the judgment given at first instance before the referring court claiming that that judgment was based on a misinterpretation of the rules laid down in Regulation 2015/848. They claim that the centre of their main interests is not their habitual residence in the United Kingdom, but rather it is in Portugal, the Member State where the sole immovable asset which they own is located and where all the transactions and all the contracts leading to their insolvency were conducted and concluded. Furthermore, there is no connection between their place of habitual residence and the events that led to their insolvency, which occurred entirely in Portugal. MH and NI therefore ask that the Portuguese authorities be recognised as having international jurisdiction.
Article 3 of the EIR (Recast) provides:
1.The courts of the Member State within the territory of which the centre of the debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings (‘main insolvency proceedings’). The centre of main interests shall be the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.
In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary. That presumption shall only apply if the registered office has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.
In the case of an individual exercising an independent business or professional activity, the centre of main interests shall be presumed to be that individual’s principal place of business in the absence of proof to the contrary. That presumption shall only apply if the individual’s principal place of business has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.
In the case of any other individual, the centre of main interests shall be presumed to be the place of the individual’s habitual residence in the absence of proof to the contrary. This presumption shall only apply if the habitual residence has not been moved to another Member State within the 6-month period prior to the request for the opening of insolvency proceedings.
The Court explained:
„[24] … [T]he relevant criteria for determining the centre of the main interests of individuals not exercising an independent business or professional activity are those connected with their financial and economic situation which corresponds to the place where they conduct the administration of their economic interests or the majority of their revenue is earned and spent, or the place where the greater part of their assets is located.
[25] In the second place, it is necessary to clarify the scope of the presumption established in the fourth subparagraph of Article 3(1) of Regulation 2015/848. It follows from the actual wording of that provision, read in the light of the first subparagraph of Article 3(1) of that regulation, that individuals not exercising an independent business or professional activity are presumed, in the absence of proof to the contrary, to conduct the administration of their interests on a regular basis in the place of their habitual residence, since there is a strong possibility that that place corresponds to the centre of their main economic interests. It follows that, as long as that presumption is not rebutted, the courts of the Member States where that residence is located have international jurisdiction to open insolvency proceedings against that individual.“
[26] However, the fourth subparagraph of Article 3(1) of Regulation 2015/848 provides that that presumption applies only until there is proof to the contrary, and recital 30 of that regulation states that it should be possible to rebut that presumption, for example where the major part of the debtor‘s assets is located outside the Member State of the debtor’s habitual residence, or where it can be established that the principal reason for moving was to file for insolvency proceedings in the new jurisdiction and where such filing would materially impair the interests of creditors whose dealings with the debtor took place prior to the relocation.
[27] As the Advocate General stated in point 55 of his Opinion, the mere fact that circumstances referred to in that recital are present is not sufficient to rebut the presumption set out in the fourth subparagraph of Article 3(1) of Regulation 2015/848.
[28] Although the location of the debtor’s assets is one of the objective criteria, ascertainable by third parties, to be taken into consideration when determining the place where the debtor conducts the administration of his or her interests on a regular basis, that presumption may be reversed only following an overall assessment of all the objective criteria. It follows that the fact that the only immovable property of an individual not exercising an independent business or professional activity is located outside the Member State of his or her habitual residence is not sufficient on its own to rebut that presumption.“
The full text of the judgment is here.
New article on Party Autonomy in the Choice of Law under Indian and Australian Private International Law
By Saloni Khanderia (Jindal Global Law School, India) and Sagi Peari (Faculty of Law, University of Western Australia) in the Commonwealth Law Bulletin, available for download here
The outbreak of the COVID-19 pandemic will affect the performance of several contracts and is likely to increase the number of disputes before the courts. In agreements with a foreign element, the adjudication of the rights and liabilities will depend on the applicable law. Most legal systems have embraced the doctrine of party autonomy and, accordingly, permit the parties to expressly select the law to govern the disputes that arise from international contracts. India and Australia are no exception to this trend. In general, the courts in both the commonwealth countries have reported being influenced by judicial practices of one another to develop their own law. Despite their common-law roots, the interpretations attached to the doctrine of party autonomy in the choice of law have varied in some respects in these countries. The paper analyses the judicial trends on the subject and demonstrates the role that party autonomy will play in resolving international disputes where the performance has been affected by the eventualities such as the COVID-19 pandemic in India and Australia. The paper delves into the manner in which the courts in India and Australia may offer reciprocal lessons to each another to revolutionise the interpretation of the doctrine of party autonomy in the choice of law.