Case law Developments in PIL

March 2022 at the Court of Justice of the European Union

In March 2022 the Court of Justice will publish three judgments and three opinions.

Judgments

The decisions correspond to cases C-421/20, Acacia (3 March), C-498/20, BMA Nederland (9 March), and C-723/20, Galapagos BidCo (24 March).

Case C-421/20, Acacia, is a request for a preliminary ruling from the Oberlandesgericht Düsseldorf in a case opposing Bayerische Motoren Werke Aktiengesellschaft against an Italian company, Acacia S.R.L. The defendant manufactures rims for motor vehicles in Italy and sells them throughout the European Union. In Germany, it markets rims under the name ‘WSP Italy’, including the ‘Neptune GT’ model. The claimant considers that the distribution of the rims in Germany by the defendant constitutes an infringement of its Registered Design, whereas the defendant invokes the repair clause in Article 110 of the Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (Community Designs Regulation, CDR). The questions referred concern both the international jurisdiction and the applicable law, and require the interpretation of provisions of the CDR and of the Rome II Regulation:

  1. In proceedings for an infringement of Community designs, can the national court dealing with the infringement proceedings having international jurisdiction pursuant to Article 82(5) of the CDR apply the national law of the Member State in which the court dealing with the infringement proceedings is situated (lex fori) to subsequent claims in relation to the territory of its Member State?
  2. If Question 1 is answered in the negative: Can the ‘initial place of infringement’ for the purposes of the CJEU judgments in Cases C‑24/16, C‑25/16 (Nintendo v BigBen) regarding the determination of the law applicable to subsequent claims under Article 8(2) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (‘Rome II’) (‘the Rome II Regulation’) also lie in the Member State where the consumers to whom internet advertising is addressed are located and where goods infringing designs are put on the market within the meaning of Article 19 of the CDR, in so far as only the offering and the putting on the market in that Member State are challenged, even if the internet offers on which the offering and the putting on the market are based were launched in another Member State?

Advocate General M. Szpunar had published his opinion in October 2021. No English version is available so far. My translation would be the following:

‘Article 1(1) of Regulation (EC) No. 864/2007 (…) and Article 88 (2) as well as Article 89 (1) (d) of Council Regulation (EC) No. 6/2002 (…) are to be interpreted as meaning that a case in which a court of a Member State is seized pursuant to Article 82(5) of the latter Regulation of an infringement action by a right holder resident in this State against an infringer resident in another Member State, which concerns the offer for sale and the placing on the market of the goods in question in the first Member State, there is a connection to the law of different States within the meaning of Art 1(1) of Regulation No. 864/2007 and, consequently, Article 8(2) of that regulation determines the law applicable to subsequent claims relating to the territory of that Member State.

Article 8(2) of Regulation No 864/2007 must be interpreted as meaning that the term “[country] in which the act of infringement was committed” within the meaning of that provision, insofar as it relates to the determination of the infringement action subsequent claims asserted, relates to the country in which the original infringing act on which the conduct reproached is based was committed.’

The judgment will be adopted by the fifth chamber – E. Regan, K. Lenaerts, C. Lycourgos (as reporting judge), I. Jarukaitis and M. Ilešič.

Case C-498/20, BMA Nederland, was referred to the Court of Justice by the Rechtbank Midden-Nederland. The applicant in the main dispute is ZK, in his capacity as successor to JM, liquidator in the bankruptcy of BMA Nederland BV (‘BMA NL’); the defendant is BMA Braunschweigische Maschinenbauanstalt AG (‘BMA AG’). Stichting Belangbehartiging Crediteuren BMA Nederland acts as intervening party.

In the main proceedings, the liquidator seeks a declaration that BMA AG has breached its duty of care towards the general body of creditors of its sub-subsidiary – the bankrupt company BMA N L- ; that it has thereby acted unlawfully; and that it is liable for the damage suffered by the general body of creditors. In addition, he seeks a declaration that BMA AG is obliged to pay to the estate of BMA NL, for the benefit of the general body of creditors, damages equal to the non-recoverable part of the claims of the general body of creditors against BMA NL.

The Stichting seeks a declaration that BMA AG has acted unlawfully (i) towards all the creditors involved in the bankruptcy of BMA NL, (ii) towards the creditors who relied on BMA NL’s having fulfilled its obligations towards them, since BMA AG was supposed to provide BMA NL with adequate financing for that purpose, (iii) or towards the creditors who could have taken measures to prevent their claims against BMA NL from remaining unpaid had they been aware in advance of the cessation of further financing by BMA AG. The Stichting also claims that BMA AG should be ordered as a third party to pay to each of BMA NL’s creditors, at its first request, the entire amount (including interest) owed by BMA NL to that creditor.

The national court asks the following sets of questions to the Court of Justice:

Question 1

(a) Must the term ‘place where the harmful event occurred’ in Article 7, point 2, of Regulation (EU) No 1215/2012 [Brussels I bis] be interpreted as meaning that ‘the place of the event giving rise to the damage’ (Handlungsort) is the place of establishment of the company which offers no redress for the claims of its creditors, if that lack of redress is the result of a breach by that company’s grandparent company of its duty of care towards those creditors?

(b) Must the term ‘place where the harmful event occurred’ in Article 7, point 2, of the [Brussels I bis Regulation] be interpreted as meaning that ‘the place where the damage occurred’ (Erfolgsort) is the place of establishment of the company which offers no redress for claims of its creditors, if that lack of redress is the result of a breach by that company’s grandparent company of its duty of care towards those creditors?

(c) Are additional circumstances required which justify the jurisdiction of the courts of the place of establishment of the company which offers no redress and, if so, what are those circumstances?

(d) Does the fact that the Netherlands liquidator of the company which offers no redress for the claims of its creditors has, by virtue of his statutory duty to wind up the estate, made a claim for damages arising from tort/delict for the benefit of (but not on behalf of) the general body of creditors affect the determination of the competent court on the basis of Article 7, point 2, of the [Brussels I bis Regulation]? Such a claim implies that there is no room for an examination of the individual positions of the individual creditors and that the third party concerned cannot avail itself of all the defences against the liquidator which it might have been able to use in respect of certain individual creditors.

(e)     Does the fact that a portion of the creditors for whose benefit the liquidator makes the claim have their domicile outside the territory of the European Union affect the determination of the competent court on the basis of Article 7, point 2, of the [Brussels I bis Regulation]?

Question 2

Would the answer to Question 1 be different in the case of a claim made by a foundation which has as its purpose the protection of the collective interests of creditors who have suffered damage as referred to in Question 1? Such a collective claim implies that the proceedings would not determine (a) the domiciles of the creditors in question, (b) the particular circumstances giving rise to the claims of the individual creditors against the company and (c) whether a duty of care as referred to above exists in respect of the individual creditors and whether it has been breached.

Question 3

Must Article 8, point 2, of the [Brussels I bis Regulation] be interpreted as meaning that, if the court seised of the original proceedings reverses its decision that it has jurisdiction in respect of those proceedings, such a reversal also automatically excludes its jurisdiction in respect of the claims made by the intervening third party?

Question 4

(a) Must Article 4(1) of Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations [Rome II Regulation] be interpreted as meaning that ‘the place where the damage occurs’ is the place where the company which offers no redress for the damage suffered by its creditors as a result of the breach of the duty of care referred to above has its registered office?

(b) Does the fact that the claims have been made by a liquidator by virtue of his statutory duty to wind up the estate and by a representative of collective interests for the benefit of (but not on behalf of) the general body of creditors affect the determination of that place?

(c) Does the fact that some of the creditors are domiciled outside the territory of the European Union affect the determination of that place?

(d) Is the fact that there were financing agreements between the Netherlands bankrupt company and its grandparent company which nominated the German courts as the forum of choice and declared German law to be applicable a circumstance which makes the alleged tort/delict of BMA AG manifestly more closely connected with a country other than the Netherlands within the meaning of Article 4(3) of the Rome II Regulation?

The opinion of Advocate General M. Campos Sánchez-Bordona was requested only in relation to the fourth question. In order to answer it he addressed as well the exclusion of non-contractual obligations arising out of the law of companies from the scope of Regulation Rome II under its Article 1(2)(d). I provide here a non-official translation into English:

Article 1(2)(d) of the Rome II Regulation must be interpreted in the sense that it excludes from its scope of application the non-contractual obligations resulting from the infringement of the duty of diligence of partners or administrators when the law attributes the responsibility before third parties, derived from said infraction, to the partners or administrators for company law-related reasons. By contrast, liability arising from a breach of the generic duty of care is not excluded from the scope of the Regulation.

Article 4 (1), of the Rome II Regulation must be interpreted in the sense that the country where the damage occurs is the one where a company has its domicile, when the damage suffered by its creditors is the indirect consequence of economic losses initially suffered by the company itself. The circumstance that the actions are brought by a bankruptcy administrator in his capacity as insolvency liquidator, or by an entity for the defence of collective interests, in favour (but not on behalf) of all the creditors, is without incidence on the ascertainment of such a country. The domicile of some creditors outside the European Union is equally irrelevant.

Article 4(3) of the Rome II Regulation is to be interpreted as meaning that a pre-existing relationship between the tortfeasor and the direct victim (such as, for example, a financing agreement, for which the parties have chosen the applicable law) is an element to be weighed together with the rest of the circumstances, in order to establish whether there is, between the harmful event and a certain country, a manifestly closer connection than that of the same event and the country whose law would apply under Articles 4(1) and (2).

Judges N. Jääskinen, N. Piçarra and M. Safjan (reporting judge) will adjudicate.

The ruling in C-723/20, Galapagos BidCo, will be one delivered by a chamber of five judges (E. Regan, I. Jarukaitis acting as reporting judge, M. Ilešič, D. Gratsias and Z. Csehi), without a previous opinion. The case is pending before the Bundesgerichtshof (Germany), which has referred the following questions in relation to Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (the new insolvency regulation):

  1. Is Article 3(1) of Regulation (EU) 2015/848 to be interpreted as meaning that a debtor company the statutory seat of which is situated in a Member State does not have the centre of its main interests in a second Member State in which the place of its central administration is situated, as can be determined on the basis of objective factors ascertainable by third parties, in the case where, in circumstances such as those in the main proceedings, the debtor company has moved that place of central administration from a third Member State to the second Member State at a time when a request to have the main insolvency proceedings opened in respect of its assets has been lodged in the third Member State and a decision on that request has not yet been delivered?
  2. If Question 1 is answered in the negative: Is Article 3(1) of Regulation (EU) 2015/848 to be interpreted as meaning that:

(a)     the courts of the Member State within the territory of which the centre of the debtor’s main interests is situated at the time when the debtor lodges the request to have insolvency proceedings opened retain international jurisdiction to open those proceedings if the debtor moves the centre of its main interests to the territory of another Member State after lodging the request but before the decision opening insolvency proceedings is delivered, and

(b)     such continuing international jurisdiction of the courts of one Member State excludes the jurisdiction of the courts of another Member State in respect of further requests to have the main insolvency proceedings opened received by a court of that other Member State after the debtor has moved its centre of main interests to that other Member State?

Opinions

Let’s move now to the three opinions.

The one of Advocate General P. Pikamäe in case C-7/21, LKW WALTER, is expected on Thursday 9. The  questions come from the Bezirksgericht Bleiburg (Austria), on a case involving LKW WALTER internationale Transportorganisation AG, a company registered in the Austrian commercial register which operates in the field of international carriage of goods, and several defendants. The applicant is claiming EUR 22 168.09 plus interest and costs from the defendants on the ground of lawyers’ liability, because the defendants had failed to comply with the time limit to lodge in Slovenia an objection against a Slovenian decision on enforcement served on the applicant.

It is in those proceedings that the request for a preliminary ruling is made:

  1.  Are Articles 36 and 39 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union and the principles of effectiveness and equivalence (principle of sincere cooperation under Article 4(3) TEU), to be interpreted as precluding a provision of a Member State which provides for, as the sole remedy against a decision on enforcement issued by the court without prior adversarial proceedings and without an instrument permitting enforcement, and solely on the basis of the allegations of the party seeking enforcement, an objection, which must be lodged within eight days in the language of that Member State, even if the decision on enforcement is served in another Member State in a language which the addressee does not understand, and the objection is already rejected as being out of time if it is lodged within twelve days?
  2.  Is Article 8 of Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service of documents, read in conjunction with the principles of effectiveness and equivalence, to be interpreted as precluding a national measure which provides that, upon service of the standard form set out in Annex II informing the addressee of his or her right to refuse to accept the document within a period of one week, the period also begins to run in respect of bringing the appeal provided for against the decision on enforcement served at the same time, for which a period of eight days is laid down?
  3. Is Article 18(1) of the Treaty on the Functioning of the European Union to be interpreted as precluding a provision of a Member State which provides for, as the remedy against a decision on enforcement, an objection, which must be lodged within eight days, and that time limit also applies where the addressee of the decision on enforcement is established in another Member State and the decision on enforcement is not written either in the official language of the Member State in which the decision on enforcement is served or in a language which the addressee of the decision understands?

One week later – thus, on Thursday 17-, M. J. Richard de la Tour will deliver his opinion in C-604/20, ROI Land Investments, a request from the Bundesarbeitsgericht (Germany). In the main proceedings, the defendant is a company operating in the real estate sector; the seat of its central administration is in Canada. The applicant, domiciled in Germany , had been working for the defendant on the basis of a ‘service agreement’ since the end of September 2015. As the parties felt that there was uncertainty surrounding the applicant’s employment status, they decided ‘to transfer’ the contractual relationship to a Swiss company that was to be newly established. In mid-November 2015, they agreed to terminate the ‘service agreement’ with retroactive effect. An accompanying letter from the applicant states that he signed the agreement subject to the condition that an equivalent agreement be concluded in relation to an executive management contract in respect of the Swiss company to be established.

On January 2016, the defendant established a subsidiary, R Swiss AG, under Swiss law. On February 2016, the applicant concluded a written contract of employment with R Swiss for a position as its director; the same day the parties signed a ‘patron agreement’ (as per the terminology used by the parties, commonly referred to as a ‘letter of comfort’). The contract of employment was to be subject to Swiss law.

On July 2016, R Swiss notified the applicant that the contract of employment was to be terminated. By judgment of 2 November 2016, the Arbeitsgericht Stuttgart (Stuttgart Labour Court, Germany) found that the termination was ineffective and ordered R Swiss to pay the applicant a certain amount of money. This judgment became final, but R Swiss did not discharge its payment obligation. Later, bankruptcy proceedings were opened in respect of the assets of R Swiss under Swiss law. At the beginning of May 2017, those proceedings were discontinued owing to a lack of insolvency assets.

In the main proceedings, the applicant seeks, on the basis of the letter of comfort, payment from the defendant of the sums owed by R Swiss according to the aforementioned judgment of the Stuttgart Labour Court. The action was dismissed at first instance on the ground that the German courts lack international jurisdiction. The Berufungsgericht (Court of Appeal), on the other hand, found that the German labour courts do have jurisdiction and upheld the action. By its appeal on a point of law brought before the referring court, the defendant seeks to have the decision at first instance restored.

The success of the defendant’s appeal on a point of law depends therefore crucially on whether the German courts have international jurisdiction. That jurisdiction could arise, first, from Article 21(2) read in conjunction with Article 21(1)(b)(i) of the Brussels I Regulation (question 1), second, from Paragraph 48(1a) read in conjunction with Paragraph 3 ArbGG, although the applicability of that national rule is unclear (question 2) and, third, from Article 18(1) of the Brussels I Regulation, if the applicant can be regarded as a ‘consumer’ within the meaning of that provision (question 3). If the German courts do in fact have jurisdiction, the question also arises as to which national law is applicable to the letter of comfort (question 4). The questions referred to the Court of Justice are:

  1. Is Article 6(1) read in conjunction with Article 21(2) and Article 21(1)(b) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘Brussels I Regulation’) to be interpreted as meaning that an employee can sue a legal person – which is not his employer and which is not domiciled in a Member State within the meaning of Article 63(1) of the Brussels I Regulation but which, by virtue of a letter of comfort, is directly liable to the employee for claims arising from an individual contract of employment with a third party – in the courts for the place where or from where the employee habitually carries out his work in the employment relationship with the third party or in the courts for the last place where he did so, if the contract of employment with the third party would not have come into being in the absence of the letter of comfort?
  2. Is Article 6(1) of the Brussels I Regulation to be interpreted as meaning that the reservation in respect of Article 21(2) of the Brussels I Regulation precludes the application of a rule of jurisdiction existing under the national law of the Member State which allows an employee to sue a legal person, which, in circumstances such as those described in the first question, is directly liable to him for claims arising from an individual contract of employment with a third party, as the ‘successor in title’ of the employer in the courts for the place where the employee habitually carries out his work, if no such jurisdiction exists under Article 21(2) read in conjunction with Article 21(1)(b)(i) of the Brussels I Regulation?
  3. If the first question is answered in the negative and the second question in the affirmative:

(a) Is Article 17(1) of the Brussels I Regulation to be interpreted as meaning that the concept of ‘professional activities’ includes paid employment in an employment relationship?

(b) If so, is Article 17(1) of the Brussels I Regulation to be interpreted as meaning that a letter of comfort on the basis of which a legal person is directly liable for claims of an employee arising from an individual contract of employment with a third party constitutes a contract concluded by the employee for a purpose which can be regarded as being within the scope of his professional activities?

  1. If, in answer to the above questions, the referring court is deemed to have international jurisdiction to rule on the dispute:

(a) Is Article 6(1) of Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) to be interpreted as meaning that the concept of ‘professional activities’ includes paid employment in an employment relationship?

(b) If so, is Article 6(1) of the Rome I Regulation to be interpreted as meaning that a letter of comfort on the basis of which a legal person is directly liable to an employee for claims arising from an individual contract of employment with a third party constitutes a contract concluded by the employee for a purpose which can be regarded as being within the scope of his professional activities?

Finally, Advocate General A.M. Collins’s opinion on C-18/21, Uniqa Versicherungen should be available on the last Thursday of March. I refer to the explanation of the case I made previously, when announcing the hearing last January.

Legal Secretary CJEU Full Professor PIL University of Santiago de Compostela (Spain) Senior research fellow MPI Luxembourg (on leave)

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