Courts in the EU increasingly issue injunctions against anti-suit injunctions, or “anti-anti-suit injunctions”. We have already read in this blog about the French practice. The Germans are doing it as well.
Facts
One example is a decision by the Court of Appeal in Munich dated 12 December 2019 (English translation here). As in the French proceedings, at issue was a claim for patent violation. And again, the defendant raised a counter-claim for fair, reasonable and non-discriminatory (FRAND) licensing in the US and applied for an anti-suit injunction against the proceedings in Europe.
Perhaps less usual is that the defendant resorting to this tactic was a behemoth of the German industry, the company Continental, which produces everything from tyres to electronic systems for car manufacturers. Continental had been sued in Germany by Finnish company Nokia for an alleged patent violation. Continental in turn sued Nokia in the US for FRAND licensing and applied for an anti-suit injunction there to stop the German proceedings.
The reason behind this behaviour apparently is that the US courts interpret the conditions for FRAND licensing more favourably for the licensee than their European counterparts. Defendants in patent licensing disputes therefore try to shift the battlefield to the other side of the Atlantic. Even German companies now prefer Californian over Bavarian courts, and companies called “Continental” switch to different continents.
Decision
Continental’s tactic drew the ire of the Landgericht Munich I, a tribunal of first instance. It issued an injunction against the German company, enjoining it from any anti-suit application in the US against the proceedings in Germany (English translation here). The Court of Appeal (Oberlandesgericht) in Munich affirmed.
The legal rule on which Nokia’s lawyers based their claim was quite peculiar. They resorted to nothing less than the authorisation of self-defense under the German Civil Code (sec. 227 BGB). One is accustomed to the usage of this provision in cases about pub brawls or domestic violence, but less in intellectual property rights disputes between multinational companies.
The Munich Court of Appeal felt somehow uneasy with this legal basis. They stayed in more familiar terrain by weighing the interests of the parties. The court stressed Nokia’s right to pursue its patent in court (sec. 1004 BGB applied by analogy), which would be constitutionally protected and impeded by the pending US anti-suit injunction. The defendant, on the other hand, could be expected to raise the FRAND issue in the German proceedings. Hence the decision to issue the anti-anti-suit injunction.
Group of companies – A minor complication
One peculiarity of the case is that the defendant in the German proceedings, the parent company Continental AG, was not identical to the party of the counter-proceedings in the US. Instead, these had been started by another company of the Continental group. The court had however little problems in attributing the behaviour of the subsidiary to the parent of the same “Konzern” or group of companies.
Public international law – A major problem
What is more surprising is that the Munich court had no qualms to consider its injunction as being entirely in line with customary public international law. In the past decades, European courts, especially in Germany, have complained about the extraterritorial overreach by US courts and the violation of sovereignty through anti-suit injunction. Now they are doing the same.
The tribunal of first instance had come up with an interesting justification. In its opinion, anti-suit injunctions could not be illegal under customary public international law because the Anglo-Saxon courts had issued them for years. In other words, bad practice creates bad customary law.
The Munich Court of Appeal found an easier and more formal excuse. It simply stated that the extraterritorial effects would be a mere reflex of the anti-anti-suit injunction and not impair the sovereignty of the US. More worryingly still, it also opined that the legality under public international law hardly mattered since the injunction was in line with the German constitution. Constitutionality trumps legality under international law – a strange and dangerous concept.
Assessment
Anti-anti-suit injunctions are a remarkable shift from the traditional European aversion against extraterritoriality and the interference with judicial proceedings abroad. Courts in Germany and in France seem to have lost both their naivety and their innocence. They now use the same weapons as their Anglo-Saxon counterparts.
The development can be summarised in terms of the Old Testament: “An eye for an eye”. As the experience of claw-back-litigation has taught, the winning country will be the one where most assets are located. German companies will thus probably never again apply for anti-suit injunctions in the US against proceedings in Germany.
The aim of the European courts to defend their jurisdiction is certainly understandable. Yet the mutual exchange of anti-suit injunctions across the Atlantic also has costs. What stops a US court from issuing an “anti-anti-anti-suit injunction”? In the end, civil justice becomes a power play. It is long ago that public international law incarnated the polite rules of diplomacy. We seem to be back to the state of nature.
Thanks for this interesting post. While the French court did not elaborate much on this, it seems to suggest that anti anti suit injunctions would be more legitimate than anti suit injunctions. Would there be an argument that offering a remedy against a violation of public international law would be compliant with public international law? After all, there is a self defense exception in public international law as well …
As far as I know, the self-defense exception in public international law has so far been applied to acts of violence and war. I think you are right: we need to extend this exception to anti-anti-suit injunctions. The reason why the German courts did not dare using it probably is that there is no precedent as of yet. But customary law has to start with a first case…
I fear that the alleged reference to customary international law in the Munich Regional Court Judgment mentioned by prof. Lehmann may be somewhat misleading, since this particular source of international law can not be born overnight, nor at the snapping of Anglo-Saxon courts’ fingers alone. Practice, however vast and authoritative, can not by itself produce a new customary rule. For this to happen, in fact, practice needs to be coupled with opinio juris, as the International Court of Justice (ICJ) and more recently the International Law Commission (ILC) required. Plus, as made abundantly clear by the ICJ in its case law, both practice and opinio juris need to abide by some requirements. Time is a paramount factor for the creation of a customary rule, together with generality, ie the spread of an emerging custom in different areas of the world (cherishing different legal traditions and possibly following both the civil and the common law pattern), consistency, coherence, lack of contestation. It is far from certain, thus, that a customary rule on anti suit injunctions had emerged and crystallized by last July, when the judgment was adopted.
Moving on to the next issue, ie self-defence in the international legal order, one needs to keep in mind that under art. 51 UN Charter this doctrine has got a very circumscribed scope, encompassing only fully-fedged armed attacks, a set of conducts sharing no common element with the preseervation of the jurisdictional competence of the forum Plus, being self-defence an exception to a rule, namely the prohibition on the use of force, established under article 2 para 4 UN Charter, the former has to abide by the requirements established under general legal theory with reference to exceptions, ie first and foremost it needs to be interpreted in a restrictive fashion. No analogy nor any teleological interpretation of provisions establishing excpetions can ever be envisaged. In conclusion, thus, I do not believe that either customary international law or self-defence have a very significant role to play in the overall anti anti suit injunctions fray.
On the other hand, the reference to the protection of human rights as the ultimate rationale justifying this new institution appears to be much more sensible and convincing. It makes a lot of sense to envisage the need to adequately protect the right to (intellectual) property and even more so the right of access to a court, a quintessential tenet of the right to a fair trial, as the very foundation of anti anti suit injunctions. Put it this way, anti anti suit injunctions may fit in the toolbox of instruments preventing a denial of justice. Be it as it may, I believe anti anti suit injunctions to be a problem which will keep both public and private international international lawyers busy for the foreseeable future.
Many thanks, Mariangela, for these crucial clarifications. Your expertise is highly welcome and necessary. Your comment underlines the important role that public international lawyers can play in the solution of private international law issues.
Thank you first of all for this so interesting exchange of views. I personally share the perplexities shown by Mariangela Lamanna in her comment. As it is generally understood, there are no generally accepted public international law rules fixing precise limits to the exercise of jurisdiction by the courts of different countries in respect of civil disputes. As a matter of principle, what customary international law rules forbid is the exercise of public authority in another country’s territory without its consent. Of itself, the mere assumption of jurisdiction in respect of a dispute even weakly related to the forum and more effectively connected with another country does not imply a violation of such a rule, insofar as such an assertion of jurisdiction is not followed by the adoption of coercive measures in the latter country’s territory. Normally, assertions of an ‘excessive’ or ‘exorbitant’ civil jurisdiction is countered by way of a denial of recognition and enforcement of a foreign decision that is based on a ground of jurisdiction which the country where recognition and enforcement are sought would consider insufficient. The same rationale should apply in respect of orders like anti-suit injunctions. The best that the country where the addressee of such an injunction is domiciled or possesses assets passible of measures of constraint based on such an injunction could do is to deny any effect to such an injunction. Obviously, the matter becomes more complicated in those cases like those having formed the subject of the judgments by the Court of Appeal of Paris and the Oberlandesgericht Muenchen commented upon by Gilles Cuniberti and Matthias Lehmann respectively. In these cases, by virtue of their multinational corporate structure, the addressees of the anti-suit injunction would risk suffering adverse consequences from a refusal to comply with such an injunction directly through their subsidiaries or, anyway, assets present within the jurisdiction of the court having issued the injunction. There lays the rationale for an anti-anti suit injunction by the concurrent court to which the party concerned has reverted on the basis of a more effective ground of jurisdiction. Anti-anti suit injunctions, nonetheless, provided the courts to which they are requested are available to deliver them, might in turn be disregarded by the courts having issued the initial anti-suit injunction.
This so far as we keep reasoning in terms of general international law rules. The situation, inevitably, changes sensibly when special regimes apply, finding their legal source either in an international convention or in regional instruments, such as, most notably, those adopted within the EU. While it might seem clear, at first sight, that the relationships between the courts of a Member State of the EU on the one side – be they the courts of France, Germany, or, so far, the UK, or of any other Member State – and the courts of a third country like the US on the other side are in principle not governed by the EU rules, this, nonetheless, does not prove entirely true in any set of circumstances. In a complex litigation scenario like that so aptly described by the case having given rise to the decisions by the Paris Court of Appeal and the Oberlandesgericht Muenchen respectively, there may well occurr that Member State courts are vested with jurisdiction to entertain the substantive claim brought before them based on EU rules. If I got it right from reading the judgments to which Gilles Cuniberti and Matthias Lehmann helpfully provided links in their posts, jurisdiction of, respectively, the French and German courts seized in either case could well be based on the rules of jurisdiction contained under the Brussels Ia Regulation (i.e. Reg. EU 1215/2012), with particular regard to the exclusive ground of jurisdiction contemplated under Article 24, para. 4, second sentence, in respect of proceedings concerned with the registration or validity of a European patent granted for the Member State whose courts are seized, or with regard to the general forum of the defendant’s domicile under Article 4, or the alternative forum of the place of tort under Article 7, para. 2 of the same Regulation. In such cases, the European Court of Justice has clearly stressed in too well known cases like Turner and West Tankers that anti-suit injunctions are not admissible, insofar as they would interfere with the exercise of jurisdiction conferred on a Member State court under the rules once existing in the 1968 Brussels Convention and thereafter in the Brussels I and then Brussels Ia Regulation. As it is also well known to the readers of this blog, the ECJ has also clearly stated in its although discussed ruling in Owusu that the exercise of jurisdiction conferred by EU rules on the courts of a Member State shall be considered as mandatory, so that those court may not discretionally renounce to exercise their jurisdiction conferred by those rules in favour of the courts of a third country with which the case might be connected.
Certainly, much water has flowed under the bridges since the times of the Owusu judgment. As a matter of fact, the Brussels Ia Regulation nowadays expressly contemplates the possibility for the courts of a Member State to stay their proceedings in case of lis alibi pendens or related actions pending before the courts of a third country. Nonetheless, if one compares the rules on lis pendens and related actions vis-à-vis a third country court set out under Articles 33 and 34 of the Brussels Ia Regulation to the rules concerning the same occurrencies as between the courts of different Member States, he or she will surely appreciate the broad extent of discretion, and, at the same time, the prudence they require of a Member State court before taking the decision to stay its proceedings for giving way to an action previously commenced before the courts of a third country.
In that logic, therefore, even if in the case before the French courts – if I am not wrong – the US court had been seized first, the French court could by no means feel obliged to give way to the US proceedings, apart form the fact that the subjective and objective identity between the two actions could appear controversial, and certainly not as a consequence of an anti-suit injunction issued by the US courts. This is even more so, clearly, in the case of the German court, which – once more if I am not wrong – had been seized first.
If we now come to the entitlement of Member States’ courts to issue anti-anti suit injunctions in order to counter an anti-suit injunction issued by a third country court in a case where the former courts are vested of jurisdiction pursuant to the EU rules of jurisdiction, while there is certainly no express legal basis in the Brussels Ia Regulation for issuing such orders, I would consider that, being these to be qualified as a sort of interim measures, the rule under Article 35 of the Regulation could be referred to by analogy. That rule, as the readers of this blog well know, provides that application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter. In a case such as those brought before the French and German courts to which Gilles Cuniberti and Matthias Lehmann respectively referred, jurisdiction as to the substance of the action was vested with the courts seized, as we have noticed, based on either of the relevant rules of the Brussels Ia Regulation, so that the question of jurisdiction to order such measures would be absorbed by the availability of jurisdiction as to the substance, The controversial point was probably, as Gilles and Matthias pertinently noted commenting on the course of action taken by either courts, that of the availability of such a remedy under the respective national law. Beyond that, the fact of a third country and its courts being involved does not seem to raise a particular obstacle in this respect.
And let as now come to a final point. Under the logic of the rule now under Article 35 of the Brussels Ia Regulation, the provisional or protective measures contemplated by that rule should inherently be intended to protect somehow the rights in dispute pending a final decision on the substance of the action. And how can an anti-anti suit injunction perform such a function? Apparently, such an injunction operates purely on the jurisdictional level. Instead, and there I share the view expressed by Mariangela Lamanna in the second point made in her comment, the fact for the Europe-based companies involved in the complex affair having given rise to both the French and German court decisions in question to have access to the relevant Member State’s courts having jurisdiction based on the pertinent EU rules stands as a guarantee for their right to a fair trial, which, as the European Court of Human Rights has clearly stressed in a long line of cases starting from Golder in 1975, presupposes the right of access to a court. As it is trite to say for the benefit of the readers of this blog, in order for such a right to be effective, the court to which the claimant must be granted access shall be a court presenting a sufficient proximity to the case and where the claimant would have reasonable chances to come to a judgment which would usefully dispose of his claim, a point which appeared of crucial relevance in the case at hand, where it appeared clearly that any obstacle to a timely enforcement of the IP rights in question would have amounted to depriving the rights in dispute of their effectiveness.
Thank you Fabrizio for these very interestings comments. They raise many points. For the time being, allow me to focus on the first one: are anti suit injunctions a violation of public international law, and if so could this justify anti anti suit injunctions? I certainly agree with you that public international law is essentially permissive with respect to assessments of jurisdiction in civil and commercial matters. But a convincing argument could be made that anti suit injunctions interfere with the jurisdiction of the foreign court, and therefore with the organisation of the foreign state (its judicial administration). The French view has long been that there is a rule of public international law granting exclusive jurisdiction to a state to organize its own public services. If that is correct, and if you do not buy the in personam/in rem distinction, then anti suit injunctions could be analysed as violations of public international law. And if this is so, the next question is whether the invaded state is entitled to resist under public international law.
Thank you Gilles for your very interesting remarks. Certainly, the traditional view expressed by the French case law you were referring to in your post has been that anti-suit injunctions were incompatible with French public policy for the reasons you were pointing out. As you well know, our English colleagues have always insisted that those injunctions, as addressed to the party who had applied to the foreign court, were not to be intended as an interference with the exercise of jurisdiction by foreign courts. Indeed, viewed from the Continent, as they say, this has always appeared as a polite excuse, being it generally understood that, even though indirectly, such injunctions caused in substance an interference. As I was noting in my comment, the plainest way for a continental-European court to react to an anti-suit injunction would consist in refusing to grant to it any effect in their own legal system. This would not amount to an unlawful act, least to say to a countermeasure from the point of view of public international law, since, absent treaty rules so providing, there is no duty under general international law rules to give effect to foreign court decisions and orders. Nonetheless, as I was noting, this would not shield the addressee of an anti-suit injunction from adverse effects deriving from non-compliance in the country were the injunction was adopted. In this respect, an anti-anti suit injunction would apparently be more effective. But there are still doubts that may be raised in thsi respect: an anti-anti suit injunction, in turn, would not be directed to the foreing court having issued the anti-suit injunction, but to the party having applied for it. The court having issued the initial injunction, assuming it as perfectly lawful under its own law and denying it amounted to an unlawful interference with the jurisdiction of the foreign courts, could accordingly refuse to enforce the anti-anti suit injunction, and, in so doing, would not breach any rule of general international law. To conclude, to my humble perception, general rules of pblic international law are rather a blunt weapon in this respect.
Thank you all for lively and interesting debate, overcoming the (alleged) boundaries between private and public international law. A petty point perhaps on Fabrizio’s comment: it is certainly true that the right of access to a court has been paramount in the ECHR system ever since the 1970s.
However, if the Nait-Liman case has taught us something, it is that not even well-grounded and consolidated interpretative techniques are to be taken for granted. I mean, if a denial of justice as the one performed by Swiss judges in national proceedings, leaving no alternative avenue for redress to a torture survivor seeking monetary compensation for very serious human rights violations, does not amount to an infringement of art 6 para 1 ECHR, than I have a hard time imagining that something else will, least of all a denial of justice with reference to a claim based on IP protection!
Best regards to all
Thank you very much. I appreciate Mariangela Lamanna’s point on the Nait-Liman case. It is certainly true, and the European Court has stressed it on many occasions, that the right of access to a court is a right capable of suffering limitations, such as those deriving from the rules on State immunity in those cases where the defendant is a foreign State, like in the sort of litigation to which the Nait-Liman case referred. The situation, nonetheless, is rather different in purely private litigation, since in this case there is no opposing interest to protect a foreign State’s sovereignty, as would be likely to justify a limitation to the right of access to justice.
Still, even in the context of purely private litigation, it is generally assumed that the right of access to a court does not imply the right of access to a particular court of the plaintiff’s choice, nor to a court that would necessarily uphold his claim. What matters is that the claimant might find a court having jurisdiction, before which the action might be tried fairly and without undue inconvenience, as, returning to the circumstances of the case forming the subject of Gilles Cuniberti and Matthias Lehmann’s posts, would be likely to be incurred by a Europe-based company if it were forced to litigate in the US a claim related to the conditions for licensing rather than to the infringement of a European patent.