Position papers on judicial cooperation in civil matters: steps towards clarity?

As the new legal year starts in London, we’re running a short series of posts covering developments and cases you might have missed over the summer.  This first post in the series looks at the UK and EU position papers on Judicial Cooperation in Civil and Commercial Matters.

Since the Brexit Referendum of June 2016, there has been uncertainty as to how the current conflict of laws regimes concerning civil and commercial matters will change. (Other civil matters are outside the scope of this brief note.)

Until recently, there had been no indication from governmental levels as to the proposals both for the wind-down of the current regime and for the future basis of judicial cooperation (if any) between the UK and EU Member States.   This summer saw the publication of position papers by both the EU and the UK.  On 12 July 2017, the EU published its Position Paper on Judicial Cooperation in Civil and Commercial Matters.  On 22 August 2017, the UK published its paper entitled “Providing a cross-border civil judicial cooperation framework: a future partnership.”

Both papers set out proposals for the “wind-down” period.  The EU paper makes no proposals for any new relationship between itself and its former member, the UK. The UK makes some high level proposals in this regard. Continue reading

Italian law is no way out of swap liability for Prato

The Court of Appeal’s recent decision is another blow for litigants who hope that foreign law will allow them to escape from liability under English law contracts.  This case, Dexia Crediop SpA v Comune di Prato [2017] EWCA Civ 428 (15 June 2017) arose from a claim by Dexia (the Bank) for some EUR 6.5 million due under an interest rate swap.[1]  The contract was subject to English law and jurisdiction.

The defendant, an Italian local authority (Prato), sought to rely on various Italian law arguments.  Not one arrow in Prato’s “capacious quiver” [2] of defences struck home, however.  The result of Walker J’s judgments[3] was basically reversed.

The case demonstrates how hard it is to show that “mandatory” rules of foreign law should apply (due to Article 3(3) of the Rome Convention) where parties have expressly chosen English law.  The 2016 Banco Santander case[4] (discussed in my post on Blair J’s March judgment and the Court of Appeal’s December decision) covered similar ground but this case is more extreme.  Continue reading

Court of Appeal confirms that Portuguese “mandatory” law is no defence to swaps liability

Earlier this year (see my March post), Blair J held that Lisbon based transport companies could not use “mandatory” provisions of Portuguese law to defeat a multi-million Euro claim by Santander under interest rate swaps contracts.  The Court of Appeal has now upheld this decision in Banco Santander Totta SA v Cia Carris de Ferro de Lisboa SA [2016] EWCA Civ 1267 (main judgment, Sir Terrance Etherton MR).

In short, under article 3(3) of the Rome Convention, a “mandatory” provision of national law could only displace the parties’ express choice of law in a contract if the situation is truly domestic – an “international situation” (even if not pointing to a specific other country) is sufficient to prevent article 3(3) applying. Continue reading

Brexit?

This briefing note explores some of the alternatives to the Brussels I Regime that may be introduced if the UK were to vote to leave the EU.

The law relating to civil jurisdiction and judgments has undergone substantial change in recent years, with the entry into force of the Brussels I Regulation (Recast) (‘the Recast Regulation’) on 10 January 2015. That Regulation is the latest in a line of European legislative instruments governing both the allocation of civil and commercial jurisdiction among EU member state courts and the recognition and enforcement of their judgments. This regulatory regime, which has been in force in the UK in various guises since 1987, is likely to be significantly modified, if not entirely replaced, in the event of Brexit.

Read the full note here.

Extra-territorial claims in the “spider’s web” of the law? Supreme Court judgment on Iraqi Civilians appeal

Ministry of Defence (Respondent) v Iraqi Civilians (Appellant) [2016] UKSC 25

Ever since the case of Al Rawi v Secretary of State for Foreign and Commonwealth Affairs [2008] QB 289, and the Binyam Mohamed case, the direction of travel of jurisprudence by English Courts left behind an earlier position that considered UK foreign affairs a non-justiciable area, and shifted towards scrutiny of the impact of UK foreign policy decisions on individuals.  After all, as it was put by Lord Sumption, in an address at the LSE in 2012, “the acts of the executive are by definition justiciable in its own courts”. The most significant factor for such a shift as Lord Sumption noted, was the enactment into English Law of the European Convention on Human Rights (“ECHR”).

Yet, in a broader spectrum of cases, jurisdictional issues (ratione temporis) and time bars are proving to be hurdles on the path of claimants bringing extra-territorial claims before the highest court of the land. It was so in the recent Supreme Court decision Kayu v Secretary of State for Foreign and Commonwealth Affairs (“Batang Kali massacre“) [2015] UKSC 69 in the form of a temporal jurisdictional obstacle. It is so again in the Supreme Court’s 12 May 2016 decision in Ministry of Defence v Iraqi Civilians [2016] UKSC 25 (“The Iraqi civilians case”) in the guise of a time bar.  

While the Batang Kali massacre case was concerned with the Supreme Court’s interpretation of public international law rules (quite centrally, with the duties Article 2 of the ECHR imposes on the UK in the context of inquiries) the decision in the Iraqi civilians case concerns English private international law and turned on a point of interpretation of The Foreign Limitation Periods Act 1984.

In the Iraqi civilians case, the Supreme Court gave judgment in relation to 14 lead claimants (claims had been brought by over 600 Iraqi citizens) who had alleged unlawful detention and/or physical maltreatment at the hands of British armed forces in Iraq between 2003 and 2009.

The Supreme Court held, applying Iraqi limitation law, that the claims of the Iraqi civilians, were time-barred. It dismissed the appeal. This post addresses the central finding in the case.
Continue reading

Limited scope for the application of Portuguese mandatory rules: Banco Santander Totta SA

This case (Banco Santander Totta SA v Companhia de Carris de Ferro de Lisboa SA [2016] EWHC 465 (Comm)), arises from a number of complex swap contracts under which, by October 2015, some EUR 272 million were due but not paid.

In his judgment on 4 March 2016, among other things, Blair J decided that Article 3(3) of the Rome Convention [1] could not be used to displace a contractual choice of English law with certain mandatory provisions of Portuguese law even where both contracting parties were Portuguese.  Had he held otherwise, Portuguese law might have provided a complete defence to payment.  Blair J’s decision was clearly influenced by the desirability of legal certainty in major financial transactions and upholding party autonomy.

Blair J’s decision is notable because his conclusion is at odds with that of Walker J in a similar case involving Italian parties (Dexia Crediop SpA v Comune di Prato [2015] EWHC 1746 (Comm)). Continue reading