This post was authored by François Mailhé, who is Professor of Private Law at the University of Picardie Jules Verne. It is the fourth in a series of posts regarding the ruling of the European Court of Justice, of 20 June 2022, in the case of LondonSteam-Ship Owners’ Mutual Assistance Association Ltd v Spain. The first post was contributed by Adrian Briggs, the second one by Gilles Cuniberti, and the third one by Antonio Leandro.
Much has already been said on this case and this post does not contend to address all the issues both dealt with and raised by the decision.
Rather, I would like to submit, as a summer food for thought, a topical methodological problem exampled by this decision after several others: that of the bias tending to analyse all problems through the articles of the Regulation at stake. More precisely, I would suggest Brussels I as a whole shouldn’t have been applied in that case and that the reason for those opposite findings by the ECJ can also be explained because it preferred interpreting article 34 rather than the scope of the Regulation as a whole.
It all starts with what I contend to be a poorly presented prejudicial question. It did ask whether, first, the English decision at stake was a “judgment” preventing recognition of the Spanish decision under Article 34 of Brussels I, second if it may be such even if it was taken in accordance with the Arbitration Act 1996. The question therefore focused on Article 34 and, by doing so, begged for the answer.
Indeed, if one looks at the issue through Article 34 and the notion of irreconcilability, then the Hoffmann case, on Article 34’s ancestor, Article 27 Brussels Convention, is the relevant case-law. In that decision, the ECJ held that a decision on the status of a natural person, a matter outside the scope of the Convention, could still be considered from Article 27 perspective as long as it “entailed legal consequences which were mutually exclusive” with the other judgment. It was a very pragmatic decision, allowing to solve the conflict between Article 27 (that solved the problem) and Article 1 (on the scope of the Convention). It allowed to disregard the subject-matter of the judgment if it may have consequences in the field of what was the Brussels convention at the time. Disregarding the arbitration exclusion was, therefore, an obvious choice considering the phrasing of the question.
What is more, asking whether Article 34 could be applied even if the judgment had a specificity under national law (the Arbitration Act 1996) was also a good way to get a specific answer. National specificities are obviously irrelevant.
What was relevant, though, was the topic of this national act: arbitration. There lied the problem.
Article 1(2) had been forgotten in the question and bypassed too quickly by the Court in its answer, who considered the problem was identical to that in Hoffmann. But what worked for 1(2)(a) was not adapted to all other exclusions of Article 1(2). Relevant for a conflict of substance (status of natural persons, succession and wills, etc.) since its solution eventually only considers substance (that of the consequences of those conflicting decisions), it is hardly adapted to procedural exceptions. Arbitral awards, and therefore decisions about them, intervene almost by essence on contractual and liability matters, all matters dealt with by the Regulation. Most often, the final decision will be about such remedies as liability and damages, or avoidance of a contract. How may such a decision not be conflicting with other judicial decisions between the same parties and matters?
The problem of arbitration is that it is not a different matter, hence no different decisions, but a different procedure. Using an analysis of the substance of any final award and an associated judgment therefore amounts to strip the arbitral aspect of the litigation and to deprive the exclusion clause of article 1(2)(d) of the Regulation of any effet utile. One may just have to compare with what could have been the reasoning with a judgment pronounced within the scope of the Insolvency Regulation recast. There again, comparing the substance of the decisions would have revealed a potential conflict between mutually exclusive legal consequences, and therefore, according to that line of reasoning, the exclusion of the Insolvency Regulation…
Falling back on Article 34 and the Hoffmann decision was therefore too simple a way to bypass the arbitration issue. In the conflict between the problem to solve and the scope of the Regulation, the latter is obviously to be addressed first. Indeed, there is no real conflict: there was no question, once Brussels I would have been declared applicable, that the issue would have to be solved by Article 34… The question of the scope of a Regulation arises first since its rules only play within its limits. And the London Steam-Ship case shows how such a line of reasoning is not only an issue of logic, but also of policy. The policy issue, indeed, was not the narrow interplay between two such decisions, but rather the scope of the arbitration exclusion in Brussels I, an issue that has not always been clearly addressed. This issue of the limits of the Regulation itself should have been at the core of the prejudicial question, not the conditions of Article 34 facing a specific judgment.
It is not the first time such a narrow analysis is at play, though. One may remember, for example, the Owusu decision. Where, in that decision, the question was whether or not forum non conveniens was compatible with the Convention, the Court went in depth as to the “imperative” nature of the sole Article 2 of the Convention to reject it. This method prevented the Court to pose a principle of exclusion of forum non conveniens within the scope of the Brussels Convention itself, a solution far simpler (and more efficient) than interpreting its Article 2, which was not answering that problem at all. Indeed, resorting to specific articles of the Regulation, silent on new issues, often leads to just ignoring them.
I do not know whether, at least in this London Steam-Ship case, the Court was perfectly aware of this methodological choice. But it is that of a young Court, applying a young law. A French author cannot but think of the exegetic school of French law that endured in case-law for decades after the Code civil was enacted, restricting itself to the strict meaning of its articles even when new issues arose. This is what the ECJ did, here again, by preferring to interpret the technical rule rather than trying a systemic analysis.
The Court has found maturity in other branches of European law, displaying much subtility and a much wider vision to address complex issues. Private international law, as this other branch of law harmonising relations between member State laws, could benefit from such a change in perspective.
Much has already been said on this case and this post does not contend to address all the issues both dealt with and raised by the decision.
Rather, I would like to submit, as a summer food for thought, a topical methodological problem exampled by this decision after several others: that of the bias tending to analyse all problems through the articles of the Regulation at stake. More precisely, I would suggest Brussels I as a whole shouldn’t have been applied in that case and that the reason for those opposite findings by the ECJ can also be explained because it preferred interpreting article 34 rather than the scope of the Regulation as a whole.
It all starts with what I contend to be a poorly presented prejudicial question. It did ask whether, first, the English decision at stake was a “judgment” preventing recognition of the Spanish decision under Article 34 of Brussels I, second if it may be such even if it was taken in accordance with the Arbitration Act 1996. The question therefore focused on Article 34 and, by doing so, begged for the answer.
Indeed, if one looks at the issue through Article 34 and the notion of irreconcilability, then the Hoffmann case, on Article 34’s ancestor, Article 27 Brussels Convention, is the relevant case-law. In that decision, the ECJ held that a decision on the status of a natural person, a matter outside the scope of the Convention, could still be considered from Article 27 perspective as long as it “entailed legal consequences which were mutually exclusive” with the other judgment. It was a very pragmatic decision, allowing to solve the conflict between Article 27 (that solved the problem) and Article 1 (on the scope of the Convention). It allowed to disregard the subject-matter of the judgment if it may have consequences in the field of what was the Brussels convention at the time. Disregarding the arbitration exclusion was, therefore, an obvious choice considering the phrasing of the question.
What is more, asking whether Article 34 could be applied even if the judgment had a specificity under national law (the Arbitration Act 1996) was also a good way to get a specific answer. National specificities are obviously irrelevant.
What was relevant, though, was the topic of this national act: arbitration. There lied the problem.
Article 1(2) had been forgotten in the question and bypassed too quickly by the Court in its answer, who considered the problem was identical to that in Hoffmann. But what worked for 1(2)(a) was not adapted to all other exclusions of Article 1(2). Relevant for a conflict of substance (status of natural persons, succession and wills, etc.) since its solution eventually only considers substance (that of the consequences of those conflicting decisions), it is hardly adapted to procedural exceptions. Arbitral awards, and therefore decisions about them, intervene almost by essence on contractual and liability matters, all matters dealt with by the Regulation. Most often, the final decision will be about such remedies as liability and damages, or avoidance of a contract. How may such a decision not be conflicting with other judicial decisions between the same parties and matters?
The problem of arbitration is that it is not a different matter, hence no different decisions, but a different procedure. Using an analysis of the substance of any final award and an associated judgment therefore amounts to strip the arbitral aspect of the litigation and to deprive the exclusion clause of article 1(2)(d) of the Regulation of any effet utile. One may just have to compare with what could have been the reasoning with a judgment pronounced within the scope of the Insolvency Regulation recast. There again, comparing the substance of the decisions would have revealed a potential conflict between mutually exclusive legal consequences, and therefore, according to that line of reasoning, the exclusion of the Insolvency Regulation…
Falling back on Article 34 and the Hoffmann decision was therefore too simple a way to bypass the arbitration issue. In the conflict between the problem to solve and the scope of the Regulation, the latter is obviously to be addressed first. Indeed, there is no real conflict: there was no question, once Brussels I would have been declared applicable, that the issue would have to be solved by Article 34… The question of the scope of a Regulation arises first since its rules only play within its limits. And the London Steam-Ship case shows how such a line of reasoning is not only an issue of logic, but also of policy. The policy issue, indeed, was not the narrow interplay between two such decisions, but rather the scope of the arbitration exclusion in Brussels I, an issue that has not always been clearly addressed. This issue of the limits of the Regulation itself should have been at the core of the prejudicial question, not the conditions of Article 34 facing a specific judgment.
It is not the first time such a narrow analysis is at play, though. One may remember, for example, the Owusu decision. Where, in that decision, the question was whether or not forum non conveniens was compatible with the Convention, the Court went in depth as to the “imperative” nature of the sole Article 2 of the Convention to reject it. This method prevented the Court to pose a principle of exclusion of forum non conveniens within the scope of the Brussels Convention itself, a solution far simpler (and more efficient) than interpreting its Article 2, which was not answering that problem at all. Indeed, resorting to specific articles of the Regulation, silent on new issues, often leads to just ignoring them.
I do not know whether, at least in this London Steam-Ship case, the Court was perfectly aware of this methodological choice. But it is that of a young Court, applying a young law. A French author cannot but think of the exegetic school of French law that endured in case-law for decades after the Code civil was enacted, restricting itself to the strict meaning of its articles even when new issues arose. This is what the ECJ did, here again, by preferring to interpret the technical rule rather than trying a systemic analysis.
The Court has found maturity in other branches of European law, displaying much subtility and a much wider vision to address complex issues. Private international law, as this other branch of law harmonising relations between member State laws, could benefit from such a change in perspective.
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