CJEU on the distinction between contract and tort (art. 7 Brussels I-bis)

On the 24th November 2020 the CJEU has rendered the decision in Case C-59/19 “Wikingerhof”. The case concerns the distinction between special jurisdiction for contract and tort under art. 7 Reg. 1215/2012, when the parties are bound by a contract.

Claimant asked for an injunction against some contract-related practices held by Booking.com, arguing that it has been forced to enter into the contract due to the dominant market position of the defendant, which violated German competition law. The case required the Court to evaluate whether the claim had to be qualified as contractual or not.

The CJEU stated that the cause of the action has to be qualified as a matter relating to tort, delict or quasi-delict within the meaning of point 2 of Article 7 of Regulation No 1215/2012 if:

  • the applicant relies […] on rules of liability in tort, delict or quasi-delict, namely breach of an obligation imposed by law, and
  • it does not appear indispensable to examine the content of the contract concluded with the defendant in order to assess whether its alleged conduct is lawful or unlawful, since that obligation applies to the defendant independently of that contract”.

In the case at stake, Wikingerhof stated that it had no choice but to enter into the contract and to accept the amendments to Booking.com’s general terms and conditions due to its strong position on the market. Therefore, to determine whether the defendant’s conduct was lawful or not, it was not indispensable to refer to the contract between the parties, as the crucial legal issue was if Booking.com committed an abuse of dominant position. As a consequence, the Court concluded that the action “in so far as it is based on the legal obligation to refrain from any abuse of a dominant position, is a matter relating to tort, delict or quasi-delict within the meaning of point 2 of Article 7 of Regulation No 1215/2012“.

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Competent court in actions against air carriers: Italian Supreme Court 24632/2020

The Italian Supreme Court has faced the issue of the competent court in actions filed by passengers against air carriers following cancellation of flights (Ordinanza 24632/2020, 5 November 2020).

The case was about seven EasyJet flight tickets from Rome (Fiumicino) to Copenhagen. The flight was suddenly cancelled. Therefore, the seven passengers had to buy tickets from another carrier and travel by taxi to their destination.

The passengers asked for both the default lump-sum compensation granted by artt. 5 and 7 of the Air Passenger Rights Regulation and for additional damages. This second claim is regulated by the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air. The passengers sued EasyJet in front of the Perugia’s Tribunal according to art. 33 of the Convention, which states that the proceedings have to be brought at the “place of business through which the contract has been made”.

The air carrier objected to the jurisdiction of the Tribunal, invoking the Brussels I-bis Regulation: the competent court were either those having territorial competence over the airport of departure (Civitavecchia, art. 7, Brussels I-bis) or arrival (Copenhagen, art. 7 Brussels I-bis), or in London (art. 4 Brussels I-bis).

Starting from the lump-sum claim, the Court stated that the Air Passenger Rights Regulation does not deal with jurisdiction: therefore, the Brussels I-bis Regulation applies. According to art. 7, the Italian territorial competent court is the one having jurisdiction over the airport of departure (Rome Fiumicino): the Giudice di pace of Civitavecchia.

Coming to the damage claim, the Montreal Convention prevails over the Brussels I-bis Regulation as it constitutes a lex specialis. The Court held that art. 33 grounds a territorial competence (CJEU Case, C-204/08; contra, Cassazione 8901/2016). Since the travel agency can be considered as a ticket office of the air carrier for the purposes of art. 33, the competent court will be the Giudice di Pace of Città di Castello.

The Court finally stated that art. 30 Brussels I-bis Regulation should apply to face practical issues arising from the severability of related actions grounded on same facts.

It should be noted that, in the case at hand, there were no parallel proceedings according to art. 30 Brussels I-bis. In any case, art. 30 refers to parallel proceedings pending “in the courts of different Member States”.

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“Guidelines on Binding and Non-Binding Agreements” – Inter-American Juridical Committee of the Organization of American States (OAS)

The Inter-American Juridical Committee of the Organization of American States (OAS) has recently approved the “Guidelines on Binding and Non-Binding Agreements”.

The Guidelines offer a concrete and detailed set of definitions, understandings, and “best practices” for the OAS Member States (and others) to employ in pursuing different types of international agreements and engaging with the various actors – States, government agencies, and sub-national territorial units – who make them.

The Guidelines deal with matters related to these instruments regarding capacity, identification methods, procedures, and effects, and aim at an overall systematization of such complex legal field.

Guidelines on Binding and Non-Binding Agreements – Official Text

European Commission against Amazon for alleged abuse of dominant position

Amazon’s behavior is under multiple investigations as it could constitute a breach under Article 102 of the Treaty of Functioning of the European Union for abuse of dominant position.

On the 10th of November the European Commission (the “EC”) released a Statement of Objections towards Amazon, informing it of its breach of EU antitrust rules by distorting competition in online retail markets. Amazon has a dual role as a platform: i) provide a marketplace where independent sellers can sell and ii) sell products as a retailer on the same market in competition with the aforementioned sellers. The problem lies in the fact that, according to the preliminary findings of the EC, the US firm collects large quantities of non-public seller data and uses them to strategically choose own products to offer, at disadvantage of the other marketplace sellers.

Furthermore, the EC opened a second antitrust investigation against Amazon in relation to its business practices. The concern is that Amazon may be favoring its own retail offers and the offers of independent sellers using its logistic and delivery systems. The investigation will focus firstly on the criteria used by the Seattle’s based firm when it chooses the winner of the “Buy Box” and enables sellers to offer products to Prime users, in order to understand if there is a preferential treatment. Secondly, it will focus on the possibility for independent sellers to reach Prime users, which tend to generate more sales.

Both investigations are crucial. Needless to say, an abuse of dominant position in today’s platform economy is particularly risky. Especially due to the crisis where more and more sellers and consumers are dependent, in different ways, on these platforms. Is it fair for Amazon to exploit other sellers’ data for its own profit? Are independent sellers really free and competing when on Amazon’s marketplace? 

The Statement of the EC is available here: https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_20_2082

15 Asia-Pacific Nations sign the Regional Comprehensive Economic Partnership Agreement, the world’s largest trade arrangement

On 15th November 2020, the Association of Southeast Asian Nations (ASEAN) – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam – together with Australia, China, Japan, the Repubblic of Korea and New Zealand signed the RCEP Agreement.

Acknowledged as critical for the signatory Countries’ response to the COVID-19 pandemic, the RCEP Agreement is an unprecedented trading arrangement that comprises a diverse mix of developed, developing and least developed economies of the region. It covers a market of almost 30% of the world’s population with a combined GDP of US$ 26.2 trillion, about 30% of global GDP.

The objective of the RCEP Agreement is to establish a mutually beneficial economic partnership that will facilitate the expansion of regional trade and investment. With its comprehensive coverage area, it provides a framework aimed at lowering trade barriers in the region as well as promoting development cooperation across signatory States.

Altough the RCEP Agreement is coming into effect at a time of global economic uncertainty, it could give a potential boost to foreing direct investment flows, of which RCEP is already a major destination. In this regard, policy priorities in the coming years will likely include a sustainable post-covid recovery, through investments in infrastructure, healthcare and clean energy, and a promotion of investment in the least developed RCEP countries. 

The agreement remains open for accession by new countries and reserves a special accession procedure to India, which, after having participated in the negotiations from their beginning in 2013, has eventually withdrawn.

More information at the RCEP official website

You can find the text of the agreement here

Hebei Huaneng Industrial Development Co Ltd v Shi: political interferences on Chinese Courts and judgements’ enforceability

In a judgement published on the 12th November 2020 in the case Hebei Huaneng Industrial Development Co Ltd v Shi [2020] NZHC 2992, the High Court of New Zealand faced the issue of the enforceability of a Higher People’s Court of Hebei money judgement .

The defendant objected that the judgement should not be enforced because the courts of China are not independent from the government and therefore cannot be qualified as “courts” as far as common law rules on the enforcement of foreign judgments are concerned. The High Court rejected the argument.

The High Court stated that a Court cannot refuse to recognize an entire foreign legal system, which would rise to practical problems. Thus, political interferences may be relevant only if a failure to comply with the standards of natural justice occurred in the individual case.

The Court cited some precedents where the same reasoning had been carried on: in Carl Zeiss Stiftung v Rayner &  Keeler Ltd (No 2) [1967] 1 AC 853, the House of Lords recognized the courts of the German Democratic Republic. In Blanco v Banco Industrial de Venezuela 997 F 2d 974 (2nd Cir 1993) the Second Circuit Court of Appeals recognized a judgemenet from Venezuela. On the opposite, a judgment from Liberia was refused recognition in Bridgeway Corp v Citibank 45 F Supp 2d 276 (SDNY 1999), 201 F 3d 134 (2nd Cir 2000), as at that time Liberia had not a functioning court system.

In the case at stake, the Court carefully examined Chinese legal system and noticed that Chinese courts are distinct from the legislative power and the government; moreover, even though there were proofs suggesting that sometimes the courts deliberately met the Communist Party’s expectations, this was not enough to refuse recognition to the chinese system as a whole. Last, as far as the specific case is concerned, the defendant had not proved any actual political interference. Therefore, the judgmeent could be recognized.

Click here for the High Court of New Zealand judgement from the official website.

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The Italian Competition Authority opens an investigation against Google for an alleged abuse of dominant position

The Italian Competition Authority has opened an investigation against Google for alleged abuse of dominant position in the italian market of digital advertising. The decision was taken on the 20th October 2020, following a report by the Interactive Advertising Bureau Italia.

Google may have violated art. 102 of the Treaty on the Functioning of European Union in relation to the availability and use of data for the elaboration of advertising campaigns of display advertising. In 2018 Google stopped releasing Google ID user’s decrypting keys and disabled the tracking systems (pixels) of third parties. The descripted commercial behavior inhibits competitors from being able to analyze users’ activities on Google and, therefore, preventing them to attain an efficient advertising targeting capacity.

At the present date, the tech giant’s conduct is also object of a major antitrust lawsuit started by the U.S. Department of Justice and an investigation opened by India’s antitrust watchdog for alleged abuses of dominant position, respectively in the search advertising and over its payment app. Similarly, a lot of pressure is being put on the EU in order to end Google’s alleged abuse in search advertising.

What would a lack of competition in display advertising entail? Could it mean a decrease of resources destined to websites productors and editors and a subsequent impoverishment of the quality of the content? Furthermore, an absence of competition based on merits could discourage technologic innovation for the development of technologies and put off also less invasive advertising techniques for consumers.

You can read the decision of the AGCM from the following link (in Italian): https://www.agcm.it/dotcmsdoc/allegati-news/A542_avvio%20istruttoria.pdf

Webinar of the EAPIL Young EU Private International Law Research Network: “Overriding Mandatory Rules in the Law of the EU Member States”

On the 16th November 2020, the Young EU Private International Law Research Network of the EAPIL (European Association of Private International Law) organizes a webinar on “Overriding Mandatory Rules in the Law of the EU Member States“.

The webinar will start at 9.15 a.m. and will end at 3.30 pm. The researchers will deal with matters such as the overriding of mandatory rules in the context of the pandemic, in the field of family law and in the context of arbitral proceedings as well.

Attendance is free of charge; all interested researchers are invited to send an e-mail to youngeupil@gmail.com.

The whole program is available here: https://eapil.org/wp-content/uploads/2020/10/Online-Conference-Programme-EAPIL-Young-EU-PIL-Research-Network-20201116.pdf

The Webinar is presented here: https://eapil.org/2020/10/27/save-the-date-overriding-mandatory-rules-in-the-law-of-the-eu-member-states/

Visit the EAPIL website here: https://eapil.org/

Chinese Court holds arbitral award rendered by foreign arbitration institution in China enforceable

In Brentwood Industries Inc. v. Guangdong Faanlong Co, Ltd and Others (2015 Sui Zhong Min Chu Si Zi No. 62), the Guangzhou People’s Intermediate Court (“Guangzhou court”) ruled that an award rendered by the International Court of Arbitration (“ICC”) in China should be regarded as a domestic award which can be enforced under the local procedural rules, demonstrating China’s opening-up trend towards international commercial arbitration.

The case involved a Sale and Purchase Agreement (“SPA”) along with a supplementary agreement signed between Brentwood Industries Inc., a USA based company, and three Chinese companies (colletively, “Respondents”).  Art 16 of the SPA provided that any dispute between the parties “shall be submitted to ICC for arbitration in the place where the project is located”.

Because Guangzhou was the project site, Brentwood brought a case before the Guangzhou Court seeking for the annulment of the arbitration clause, which was rejected. Subsequent to the Court’s ruling confirming the validity of the arbitration clause, Brentwood commenced arbitration proceedings before the Arbitration Court of International Chamber of Commerce Hong Kong Office against the Respondents. After the award was rendered, Brentwood applied for its recognition and enforcement before the Guangzhou Court.

Ruling on the award’s nationality and enforceability, the Court held that, even if rendered by a foreign institution, it shall be regarded as a domestic award, thus enforceable under the local Civil Procedural Law rather than under the New York Convention, as argued by Brentwood.

Thus, the Court denied the enforcement of the award stating that Brentwood had invoked the wrong legal basis and directed the latter to re-apply for enforcement under the Civil Procedural Law.

New article from the “BRICS Law Journal”: “Transnational Contracts and their Performance during the COVID-19 Crisis: Reflections from India”

On the Vol. 7(3) of the BRICS Law Journal, Dr Saloni Khanderia, Associate Professor OP Jindal Global University, India and Visiting Associate Professor, Faculty of Law, University of Johannesburg, has recently published an essay on the impact of the pandemic on the performace of international contracts. The paper provides a comparative analysis of Indian law with Austria, Australia, China, France, Germany, the U.K. and the U.S. and shows the deficiencies of Indian law.

More in https://conflictoflaws.net/2020/new-article-on-transnational-contracts-and-their-performance-during-the-covid-19-crisis-reflections-from-india/

The original paper is available under Creative Commons Attribution 4.0 License here: https://www.bricslawjournal.com/jour/article/view/385/177

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