ANTI-SUIT INJUNCTIONS: BACK IN STOCK?

On 18 November 2022, the English High Court handed down a judgment in Ebury Partners Belgium SA v Technical Touch BV [2022] EWHC 2927 (Comm) in favour of an anti-suit injunction against the Belgian proceedings breaching the English exclusive jurisdiction agreement. Mr. Justice Jacobs provided some welcome clarification and confirmation of the principles applicable upon breaches of exclusive jurisdiction agreements in the altered legal landscape post-Brexit. Indeed, the decision might be considered a continuing development following the anti-suit injunction granted by the English Commercial Court against the Spanish court proceedings in QBE Europe SA/NV and another v. Generali Espana de Seguros y Reaseguros [2022] EWHC 2062 (Comm).

A brief glimpse of the factual background

The dispute arose between Ebury Partners Belgium SA/NV (Claimant) and Technical Touch and Jan Berthels (Defendants) in April 2021 following their Relationship Agreement for foreign exchange currency services which was consented to electronically through the claimant’s website. The hyperlink attached to the box ticked by Mr. Berthels (director of the company) would have taken onto the webpage containing a pdf file with the terms and conditions of the claimant applicable to their business dealings. Indeed, Clause 27 entitled “Other important terms” included governing law and exclusive jurisdiction clauses as follows:

“[27.11] This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation, interpretation, performance and/or termination (including non-contractual disputes or claims) shall be exclusively governed by and construed in accordance with the laws of England and Wales.

[27.12] Each party irrevocably agrees that the courts of England shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation, interpretation, performance and/or termination (including non-contractual disputes or claims). For such purposes, each party irrevocably submits to the jurisdiction of the English courts and waives any objection to the exercise of such jurisdiction. Each party also irrevocably waives any objection to the recognition or enforcement in the courts of any other country of a judgment delivered by an English court exercising jurisdiction pursuant to this Clause 27.12.”

The parties further concluded a Guarantee Agreement signed by Mr. Berthels as a guarantor regarding TT’s obligations to Ebury. The latter agreement also contained English law and choice of court clauses as follows:

“[15] This guarantee and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. If any provision hereof or part thereof shall be held invalid or unenforceable no other provisions hereof shall be affected and all such other provisions shall remain in full force and effect.

[16] Each party irrevocably agrees that subject as provided below, the courts of England and Wales shall have exclusive jurisdiction over any dispute or claim arising out of or in connection with this guarantee or its subject matter or formation (including non-contractual disputes or claims). Nothing in this clause shall limit the right of Ebury to take proceedings against the Guarantor in any other court of competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdictions, whether concurrently or not, to the extent permitted by the law of such other jurisdiction.”

When TT failed to pay a margin call and further sums under their Relationship Agreement and no amicable settlement was achieved, TT brought the Belgian proceedings to seek negative declaratory relief and challenge the validity of the two agreements under Belgian law. In response to the Belgian proceedings, Ebury brought an action in England as agreed between the parties. In addition, Ebury also applied for a grant of an anti-suit injunction in breach of the exclusive jurisdiction clause.

A short recap of the judge’s legal reasoning and decision

As expressed by Mr. Justice Jacobs, the arguments brought by the parties – Ebury’s application for an anti-suit order, and the Defendants’ applications challenging the court’s jurisdiction or inviting the court not to exercise it, were pretty much different sides of the same coin.

Indeed, by considering the claimant’s application first, the judge swept away the defendant’s counter arguments. It was emphasised that, while it would not have been possible to grant an anti-suit relief upon the presence of the proceedings at an English and any other European Member State court pre-Brexit, the principles applicable upon such a request were already well-settled. In this context, the court particularly underlined Mr. Justice Foxton’s reasonings in QBE Europe SA/NV v Generali España de Seguros Y Reaseguros [2022] EWHC 2062 (Comm) at para [10]. Indeed, the judgment was based on Section 37(1) of the Senior Courts Act 1981 giving power to the court to grant an anti-suit injunction for restraining foreign proceedings when it was required by the ends of justice, therefore, was “just and convenient”, furthermore, a “high degree of probability” about the existence of a jurisdiction was established.

Being the touchstone of the reasoning, and referring to already established prior authorities, the judge rejected the defendants’ application challenging the English court’s jurisdiction and seeking a stay or a relief to that end. It was confirmed that there was a good arguable case for service out (in line with CPR 6.33 (2B) (b), also pursuant to the application of the Hague Convention on Choice of Court Agreements 2005) and the English court had exclusive jurisdiction per the agreements between the parties.  Accordingly, there were no strong reasons for the English court to decline its jurisdiction – in contrast, the court was bound to accept its jurisdiction per Article 5 of the Convention.

Significance of the judgment

This decision is of high importance for several reasons: It reiterates the emphasis that has been traditionally placed on party autonomy and authentic consent in English law and practice be it in a conventional or an electronic form by incorporation of the standard terms and conditions which would bring a useful reference point for businesses.  Indeed, the Court asserted the principles of English law regarding the dealings in e-commerce and particularly click-wrap agreements.

The judgment also reasserts the termination of the prior authorities preventing the English courts from granting anti-suit injunctions against the proceedings at the European Member State courts (re: West Tankers and Turner Grovit). Indeed, the judgment follows up the Qbe reasoning which was a grand opening of a fresh chapter for anti-suit reliefs post-Brexit. It is worth noting that the availability of such reliefs might also stimulate the European courts to issue similar orders against the English courts bringing the effects of a double-edged sword.

Last but not least, the high value of the judgment derives also from the fact that it addresses the Hague Choice of Court Agreement 2005. While there is still an unreasonable lack of relevant authorities referring to this global convention, the judgment brings hope about more case law and precedents built upon by virtue of the HCCCA 2005.   

Brexit the endgame. Part 2. EU retained law in the maritime sphere.

Further items of maritime EU law that amount to retained law which were implemented through a statutory instrument pursuant to the powers given to the Secretary of State under s2(2) of the European Communities Act 1972.

– The Merchant Shipping (Oil Pollution) (Bunkers Convention) Regulations 2006  SI 2006/ 1244 which implemented the Bunkers Convention

– the Merchant Shipping (Carriage of Passengers by Sea) Regulations 2012 which implemented the Protocol to the Athens Convention, pursuant to the powers given to the Secretary of State under s2(2) of the European Communities Act 1972, and also applied it to domestic voyages within the UK on board Class A ships on or after 30 December 2016 and Class B ships on or after 30 December 2018.  When the Protocol entered into force internationally on 23 April 2014, the UK ratified the Protocol by means of the Merchant Shipping (Convention relating to the Carriage of Passengers and their Luggage by Sea) (Amendment) (Order) 2014 no 361 in exercise of the powers conferred by sections 183(4) and (6) and 184(1) and (3) of the Merchant Shipping Act 1995, and therefore the Protocol itself will remain part of the law of the UK after Brexit. The provision relating to domestic voyages within the UK does, however, constitute retained EU law.

– The Environmental Damage (Prevention and Remediation) (England) Regulations 2015 SI 2015/810 (and equivalent Regulations in Northern Ireland, Scotland and Wales);

– The Merchant Shipping (Compulsory Insurance of Shipowners for Maritime Claims) Regulations 2012, SI 2012 No. 2267.

These will all be subject to the sunset provisions of the Retained EU Law (Revocation and Reform) Bill 2022 unless restated by regulation by a relevant national authority no later that 23 June 2026 (the tenth anniversary of the EU referendum).

Brexit, the endgame. The Retained EU Law (Revocation and Reform) Bill 2022.

On 22 Sept 2022 the UK Government introduced The Retained EU Law (Revocation and Reform) Bill 2022 which provides for two sunset dates for existing retained EU law. On 31st December 2023, all retained EU law will expire, unless otherwise preserved. Any retained EU law that remains in force after this date will be assimilated in the domestic statute book, by the removal of the special EU law features previously attached to it. The Bill provides a second sunset date by including an extension mechanism for delaying the expiry of specified pieces of retained EU law until 2026. The Bill will also reinstate domestic law as the highest form of law on the UK statute book. In case of conflict with retained EU law domestic law will prevail.

There is very little by way of retained EU law that is relevant to the maritime practitioner. The Brussels Regulation and Lugano Convention both ceased to have effect as at the end of the implementation period. The Port Services Regulation survived but is currently on death row and is the subject of a government consultation as to its repeal.

What does remain, however, are the two conflicts of law regulations, Rome I for contracts and Rome II for tort/delict, both now suitably domesticated as UK law, and also the Rome Convention 1980 which was brought into UK law by the Contracts Applicable Law Act 1990, now amended so that it will continue to apply to existing contracts entered into between 1 April 1991 (the date on which the Rome Convention came into force) and 16 December 2009 (after which Rome 1 replaced the Convention in the relevant EU Member States). 

It is likely that these three pieces of retained law will either be specifically retained, or their expiry delayed until the end of 2026, but who knows? Should they disappear into the sunset, conflicts of law will return to the common law rules for contracts made after the sunset date and the rules in Part III of the Private International Law (Miscellaneous Provisions) Act 1995 for torts committed after the sunset date.

Harmonised cybersecurity rules? The EU proposes Cyber Resilience Act 2022

On Thursday, 15 September 2022, the European Commission proposed the first-ever EU-wide Cyber Resilience Act regulating essential cybersecurity requirements for products with digital elements and ensuring more secure hardware and software for consumers within the single market.

According to the Commission, cybersecurity of the entire supply chain is maintained only if all its components are cyber-secure. The existing EU legal framework covers only certain aspects linked to cybersecurity from different angles (products, services, crisis management, and crimes), which leaves substantial gaps in this regard, and does not determine mandatory requirements for the security of products with digital elements.

The proposed rules determine the obligations of the economic operators, manufacturers, importers, and distributors to abide by the essential cybersecurity requirements. Indeed, the rules would benefit different stakeholders; by ensuring secure products, businesses would maintain customers’ trust and their established reputation. Further, customers would have detailed instructions and necessary information while purchasing products which would in turn assure data and privacy protection.

According to the proposal, manufacturers must ensure that cybersecurity is taken into account in the planning, design, development, production, delivery, and maintenance phase, and cybersecurity risks are documented, further, vulnerabilities and incidents are reported. The regulation also introduces stricter rules for the duty of care for the entire life cycle of products with digital elements. Indeed, once sold, companies must remain responsible for the security of products throughout their expected lifetime, or a minimum of five years (whichever is shorter). Moreover, smart device makers must communicate to consumers “sufficient and accurate information” to enable buyers to grasp security considerations at the time of purchase and to set up devices securely. Importers shall only place on the market products with digital elements that comply with the requirements set out in the Act and where the processes put in place by the manufacturer comply with the essential requirements. When making a product with digital elements available on the market, distributors shall act with due care in relation to the requirements of the Regulation. Non-compliance with the cybersecurity requirements and infringements by economic operators will result in administrative fines and penalties (Article 53). Indeed, market surveillance authorities will have the power to order withdrawals or to recall non-compliant devices.

The Regulation defines horizontal cybersecurity rules while rules peculiar to certain sectors or products could have been more useful and practical. The new rules do not apply to devices whose cybersecurity requirements have already been regulated by the existing EU rules, such as aviation technology, cars, and medical devices.

The Commission’s press release announced that the new rules will have an impact not only in the Union but also in the global market beyond Europe. Considering the international significance of the GDPR rules, there is a potential for such an expected future. On another note, attempts to ensure cyber-secure products are not specific only to the EU, but different states have already taken similar measures. By comparison, the UK launched consultation ahead of potential legislation to ensure household items connected to the internet are better protected from cyber-attacks.

While the EU’s proposed Act is a significant step forward, it still needs to be reviewed by the European Parliament and the Council before it becomes effective, and indeed, if adopted, economic operators and the Member States will have twenty-four months (2 years) to implement the new requirements. The obligation to report actively exploited vulnerabilities and incidents will be in hand a year after the entry into force (Article 57).

Hague Judgments Convention to enter into force!

On 29 August 2019, the European Union deposited its instrument of accession to the Hague Judgments Convention 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (HJC). On the same day, Ukraine ratified the Convention.

According to Articles 28 and 29 of the HJC, the Convention shall enter into force on the first day of the month following the expiration of the twelve months after the second State has deposited its instrument of ratification, acceptance, approval, or accession. On this occasion, the Convention has already two Contracting States, and as a practically effective tool, it will be utilised by commercial parties for the swift resolution of international disputes from 1 September 2023.

The Hague Conference on Private International Law (HCCH) adopted the HJC on 2 July 2019 – 27 years after the initial proposal of a mixed instrument covering both jurisdiction and recognition and enforcement rules. Indeed, with the aim of guaranteeing the effectiveness of court judgments similar to what the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) ensured for arbitral awards, the HJC has become a game-changer in the international dispute resolution landscape. As the HCCH announced, “the Convention will increase certainty and predictability, promote the better management of transaction and litigation risks, and shorten timeframes for the recognition and enforcement of a judgment in other jurisdictions.”

The HJC provides recognition and enforcement of judgments given in civil and commercial cases including the carriage of passengers and goods, transboundary marine pollution, marine pollution in areas beyond national jurisdiction, ship-source marine pollution, limitation of liability for maritime claims, and general average. As a complementary instrument to the Hague Convention on Choice of Court Agreements 2005 (HCCCA), the HJC shares the same goals to ensure commercial certainty and access to justice, serves legal certainty and uniformity by providing free circulation of judgments and parties’ autonomy, also, advances multilateral trade, investment and mobility. The HJC also aims at judicial cooperation and recognition and enforcement of judgments given by the courts designated in the parties’ agreement, other than an exclusive choice of court agreement whereas the HCCCA applies to exclusive jurisdiction agreements and resulting judgments.

The HJC is the only global instrument for the mutual recognition and enforcement of judgments in civil and commercial disputes and it will significantly contribute to legal certainty in the post-Brexit era together with its sister instrument HCCCA. Now, it is the UK’s turn to take appropriate measures to accede to the treaty for facilitating the free movement of judgments in civil and commercial cases between the UK and the EU. Indeed, the EU’s opposition to the UK’s application to ratify the Lugano Convention will most likely impede the ratification of the HJC for the provision of the continuing civil judicial cooperation.

Insurance and P&I: life in Europe just got easier

Whatever you think of Brexit, there can be little doubt that English P&I Clubs have reaped a substantial dividend from it when it comes to jurisdiction. A discreet bottle or two will no doubt be cracked open as a result of Foxton J’s judgment today in QBE Europe SA v Generali España de Seguros y Reaseguros [2022] EWHC 2062 (Comm).

The facts will be entirely familiar to any P&I claims handler. The Angara, a small superyacht insured against P&I risks by QBE UK under a policy later transferred to QBE Europe, allegedly damaged an underwater cable linking Mallorca and Menorca to the tune of nearly $8 million. The cable owners’ underwriters Generali brought a subrogated claim in the Spanish courts against QBE, relying on a Spanish direct action statute (Arts. 465-467 of the 2014 Ley de Navegación Marítima). QBE pointed to a London arbitration clause requiring disputes between insurer and assured to be arbitrated in London, said that if Generali wanted to enforce the policy they had to take the rough with the smooth. This being a post-Brexit suit, they sought an ASI.

Generali resisted. They argued that they were enforcing a direct delictual liability under Spanish law, and that in any case since the arbitration clause merely referred to assured and insurer (and indeed the whole policy excluded any third party rights under the Third Parties (Rights against Insurers) Act 1999) they were unaffected by it.

Pre-Brexit, QBE’s position would have been fairly hopeless: intra-EU ASIs were banned, and furthermore the effect of Assens Havn (Judicial cooperation in civil matters) [2017] EUECJ C-368/16 (noted here in this blog) would have largely pre-empted the matter in the Spanish courts.

But in this, one of the first post-Brexit P&I cases to come to the English courts, QBE won hands down. Solid first instance authority had extended the rule in The Angelic Grace [1995] 1 Lloyd’s Rep 87 (i.e. that very good reasons had to be shown for not granting an ASI to halt foreign proceedings brought in blatant breach of contract) to cases where the person suing was enforcing transferred rights, as where a subrogated insurer sought to take advantage of contractual provisions between its insured and the defendant. That line of decisions applied here: and Foxton J duly followed it, confirmed it and lengthened it by one.

He then asked whether, properly characterised, Generali’s suit was a tort claim or in substance a claim to piggy-back on the policy QBE had issued. His Lordship had no doubt that it was the latter. True, the Spanish direct action provisions disapplied certain limitations in the policy, such as pay to be paid provisions and a number of defences based on misconduct by the assured; but the matter had to be viewed in the round, and overall the cause of action arising under the 2014 Spanish law, being based on the existence of a policy and limited to sums assured under it, was clearly contract-based. It remained to deal with Generali’s further point based on the limited wording of the arbitration clause. Here his Lordship accepted that parties could provide that an arbitration clause in a contract did not apply to those suing under some derivative title, but said that much more would be required to demonstrate such an intent: the mere fact of reference to the original parties to the contract was not nearly enough.

And that was it: having failed to show any substantial reason why the ASI should not go, Generali were ordered to discontinue the Spanish proceedings.

What messages can P&I clubs and other insurers taker away? Three are worth referring to. One is that the enforcement of jurisdiction and arbitration clauses in a European context is now fairly straightforward. Another refers to the specific case of Spain, which altered its direct action statute in 2014: the QBE case has confirmed that under the new dispensation, as much as under the old, an attempt to use direct action as a means of getting at insurers abroad will continue to be be regarded as essentially an attempt to enforce the insurance contract. And third, judges in the UK are unlikely to be very receptive to attempts by claimants desperate to litigate at home to give arbitration or jurisdiction clauses an unnaturally narrow meaning.

Life, in short, has got a good deal easier for P&I interests. Now, where’s that bottle of cava?

EU inclusion of shipping in the ETS. Latest developments.

Almost a year ago the EU Commission proposed inclusion of shipping in the Emissions Trading Scheme https://iistl.blog/2021/07/14/bastille-day-eu-commissions-present-to-the-shipping-industry/  with a proposed directive amending the 2003 ETS Directive. This was considerably less extensive that the proposed amendment to the 2015 MRV Regulation which is what the EU Parliament voted for in October 2020. The matter has recently come back to the European Parliament which voted on 22 June to make certain amendments to the EU Commission’s proposed directive amending the 2003 ETS Directive.

The Parliament’s proposed amendments would see coverage of 100% of emissions from intra-European routes as of 2024 and 50% of emissions from extra-European routes from and to the EU as of 2024 until the end of 2026. From 2027, emissions from all trips in and out of the EU should be covered 100% with possible derogations for non-EU countries where coverage could be reduced to 50% subject to certain conditions. 75% of the revenues generated from auctioning maritime allowances should be put into an Ocean Fund to support the transition to an energy-efficient and climate-resilient EU maritime sector. Instead of the phasing in of the surrender of allowances proposed by the Commission, the Parliament proposes that from 1 January 2024 and each year thereafter, shipping companies shall be liable to surrender allowances corresponding to one hundred percent (100 %) of verified emissions reported for each respective year.

Under the Commission’s proposal the person or organisation responsible for the compliance with the EU ETS should be the shipping company, defined as the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner.

The Parliament has accepted this, but has proposed an amendment whereby, a binding clause should be included in contractual arrangements with the shipping company so that the entity that is ultimately responsible for the decisions affecting the greenhouse gas emissions of the ship is held accountable for covering the compliance costs paid by the shipping company under this Directive. That entity would normally be the entity that is responsible for the choice and purchase of the fuel used by the ship, or for the operation of the ship, as regards, for example, the choice of the cargo carried by, or the route and speed of, the ship – in other words, the time charterer.

Quite how this binding clause in time charters of vessels coming into and out of the EU would be monitored is another matter.

The Parliament also proposed the expansion of the MRV Regulation, Regulation (EU) 2015/757, beyond CO2 emissions, to encompass ‘greenhouse gas emissions’ meaning the release of CO2, Methane and Nitrous Oxides into the atmosphere. The scope of the MRV Regulation should also be amended to cover ships of 400 gross tonnage and above from 1 January 2024, but operators of such ships operators should only be required to report the information which is relevant for inclusion from 1 January 2027 of such ships within the scope of the EU ETS, in particular the type of fuel, its carbon factor and energy density.

The Parliament’s decision was shortly followed by the Council communication of 29 June 2022 stating:

“The Council agreed to include maritime shipping emissions within the scope of the EU ETS. The general approach accepts the Commission proposal on the gradual introduction of obligations for shipping companies to surrender allowances. As member states heavily dependent on maritime transport will naturally be the most affected, the Council agreed to redistribute 3,5% of the ceiling of the auctioned allowances to those member states. In addition, the general approach takes into account geographical specificities and proposes transitional measures for small islands, winter navigation and journeys relating to public service obligations, and strengthens measures to combat the risk of carbon leakage in the maritime sector.

The general approach includes non-CO2 emissions in the MRV regulation from 2024 and introduces a review clause for their subsequent inclusion in the EU ETS.”

Following the adoption of the Council’s position, negotiations between the Parliament and the Council will start shortly in view of finding an agreement on the final text. One way or another, the inclusion of shipping in the ETS is coming soon.

The Prestige case. Victory for Spain in the CJEU.

Back in March we noted the reference to the CJEU of three questions regarding the application of Article 34 in the London P&I Club’s appeal against the recognition of the Spanish judgment against it in The Prestige case. https://iistl.blog/2022/03/25/the-prestige-20-years-on-cjeu-reference-may-be-withdrawn-at-last-gasp/

The High Court stayed proceedings and referred three questions to the CJEU for a preliminary ruling:

1. Is a judgment granted pursuant to s.66 of the Arbitration Act 1996 capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3)?

2. Is a judgment falling outside the material scope of Regulation No 44/2001 by reason of the Article 1(2)(d) arbitration exception, capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3)?

3. If Article 34(3) does not apply, can Art 34(1) be relied on as a ground of refusing recognition and enforcement of a judgment of another Member State as being contrary to domestic public policy on the grounds that it would violate the principle of res judicata by reason of a prior domestic arbitration award or a prior judgment entered in the terms of the award granted by the court of the Member State in which recognition is sought?

The Court of Appeal set aside the Judge’s order referring the questions to the CJEU. However, only the referring judge has jurisdiction to withdraw the reference. The Court of Appeal referred to Butcher J, pursuant to CPR 52.20(2)(b), the question of whether, in the light its judgment, he should withdraw the reference he made to the CJEU on 21 December 2020.

  The reference was not withdrawn and on Monday the CJEU gave its decision on the three questions referred [2022] EUECJ C-700/20.

The answer to the first two questions is that Article 34(3) of Regulation No 44/2001 must be interpreted as meaning that a judgment entered by a court of a Member State in the terms of an arbitral award does not constitute a ‘judgment’, within the meaning of that provision, where a judicial decision resulting in an outcome equivalent to the outcome of that award could not have been adopted by a court of that Member State without infringing the provisions and the fundamental objectives of that regulation.

The infringement would be two fold. First, as regards the relative effect of an arbitration clause included in an insurance contract which does not extend to claims against a victim of insured damage who bring a direct action against the insurer, in tort, delict or quasi-delict, before the courts for the place where the harmful event occurred or before the courts for the place where the victim is domiciled (as per the CJEU judgment of 13 July 2017 in Assens Havn, C 368/16, EU:C:2017:546).

Second, as regards the rules on lis pendens in Article 27 which favour the court first seised where there are parallel proceedings between the same parties, and does not require effective participation in the proceedings in question. The proceedings in Spain and in England involved the same parties and the same cause of action, and the proceedings were already pending in Spain on 16 January 2012 when the arbitration proceedings were commenced. It is for the court seised with a view to entering a judgment in the terms of an arbitral award to verify that the provisions and fundamental objectives of Regulation No 44/2001 have been complied with, in order to prevent a circumvention of those provisions and objectives, such as a circumvention consisting in the completion of arbitration proceedings in disregard of both the relative effect of an arbitration clause included in an insurance contract and the rules on lis pendens laid down in Article 27 of that regulation. No such verification took place before either the High Court or the Court of Appeal and neither court made a reference to the CJEU for a preliminary ruling under Article 267 of the CJEU.

The answer to the third question is that Article 34(1) of Regulation No 44/2001 must be interpreted as meaning that, in the event that Article 34(3) of that regulation does not apply to a judgment entered in the terms of an arbitral award, the recognition or enforcement of a judgment from another Member State cannot be refused as being contrary to public policy on the ground that it would disregard the force of res judicata acquired by the judgment entered in the terms of an arbitral award.

EU Port Services Regulation heading for the UK dustbin. Consultation process now running.

The Port Services Regulation 2017/352 Regulation (the PSR), includes provisions in the following areas: market access for port service providers; transfer of undertakings; financial transparency; charges; training and consultation; complaints and appeals.

The PSR has not been popular in the UK. In October 2017 the then shipping minister John Hayes told members of the UK Major Ports Group that the Regulation would be “consigned to the dustbin” in the UK due to Brexit”. But the Port Services Regulation was not immediately repealed. It was supplemented in domestic legislation by practical and procedural provisions in the Port Services Regulations 2019 (SI 2019/575) and in The Pilotage and Port Services (Amendment) (EU Exit) Regulations 2020 (SI 2020/671 which covers the situation as from 1.1.21.

The government’s view is that all the areas covered by the Ports Services Regulation are sufficiently covered in the UK by commercial practice within the framework of domestic law. The government intends to repeal the PSR as EU retained law, to revoke The Port Services Regulations 2019, and to amend the Pilotage and Port Services (Amendment) (EU Exit) Regulations 2020, by revoking those parts of the regulations that relate to the PSR and were made to ensure that the EU PSR remained operable after the UK’s withdrawal from the European Union.

 The government has now opened a consultation period from 22 March – 22 April 2022, https://www.gov.uk/government/consultations/repealing-the-eu-port-services-legislation/repealing-the-eu-port-services-legislation#:~:text=The%20government%20has%20signalled%20its,worked%20properly%20for%20the%20UK.

The Prestige, 20 years on. CJEU reference may be withdrawn at last gasp.

The London Steam-Ship Owners’ Mutual Insurance Association Ltd v The Kingdom of Spain M/T “PRESTIGE” (No. 5) [2022] EWCA Civ 238 (01 March 2022),  concerns a reference to the CJEU by Butcher J, arising out of the longstanding litigation between Spain and the owners’ P&I Club in connection with the Prestige oil spill in 2002. The Club had appealed against an order registering the judgment of the Spanish Supreme Court on 28 May 2019. The appeal was fixed for a two-week trial from 2 December 2020 to determine (i) as a matter of law, whether the judgment entered by Hamblen J constituted a judgment within the meaning of Article 34(3) and, if not, whether that judgment and the arbitration award (and the res judicata to which they give rise as a matter of English law) could be relied upon and (ii) as a matter of fact and law, whether the Spanish Proceedings had breached the human rights of the defendants, including the Club.

Spain made an application seeking the reference of six questions to the CJEU (later adding a seventh) and invited  Butcher J to determine that application at the hearing of the appeal in order to be in a position to lodge any request with the CJEU before “the Brexit cut off”  with the end of the Implementation Period on 31 December 2020. On 21 December 2020 Butcher J then referred three issues to the CJEU.

“(1) Given the nature of the issues which the national court is required to determine in deciding whether to enter judgment in the terms of an award under Section 66 of the Arbitration Act 1996, is a judgment granted pursuant to that provision capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of EC Regulation No 44/2001?

(2)  Given that a judgment entered in the terms of an award, such as a judgment under Section 66 of the Arbitration Act 1996, is a judgment falling outside the material scope of Regulation No 44/2001 by reason of the Article 1(2)(d) arbitration exception, is such a judgment capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of the Regulation?

(3)  On the hypothesis that Article 34(3) of Regulation No 44/2001 does not apply, if recognition and enforcement of a judgment of another Member State would be contrary to domestic public policy on the grounds that it would violate the principle of res judicata by reason of a prior domestic arbitration award or a prior judgment entered in the terms of the award granted by the court of the Member State in which recognition is sought, is it permissible to rely on 34(1) of Regulation No 44/2001 as a ground of refusing recognition or enforcement or do Articles 34(3) and (4) of the Regulation provide the exhaustive grounds by which res judicata and/or irreconcilability can prevent recognition and enforcement of a Regulation judgment?”

At the time of making the reference Butcher J had not decided the Club’s human rights argument. That was decided against the Club in May 2021, after the end of the Implementation Period, and could not be referred to the CJEU. The reference, C-700/20, was heard by the CJEU on 31 January 2022 and the opinion of the Advocate General is expected on 5 May 2022, with the judgment of the CJEU to be delivered at any time thereafter.

The Club appealed the decision of Butcher J, and on 1 March 2022 the Court of Appeal held that Butcher J did not have the authority to refer the questions to the CJEU. The necessity test mandated in Art 267 of 267 of the Treaty on the Functioning of the European Union would only be satisfied if the European law question is conclusive of the issue which the national court has to decide on a particular occasion in accordance with its national procedure. The judge’s discretion as to whether to make a reference only arises once the test of necessity has been satisfied.  That was not the case here as Butcher J had not decided the human rights policy issue raised by the Club. Unless and until that issue had been determined against the Club, the questions referred could not be said to be conclusive or even substantially determinative of the appeal. The questions could have been resolved entirely in Spain’s favour, yet the Club could have won on the human rights issue. Looking at previous CJEU authority in Cartesio Oktato es Szolgaltato bt (Case 210/06) [2009] Ch 354 it was clear that as a matter of national law a reference can be set aside on appeal.

The Court of Appeal allowed the appeal and set aside the Judge’s order referring the questions to the CJEU. However, only the referring judge has jurisdiction to withdraw the reference. The Court of Appeal referred to Butcher J, pursuant to CPR 52.20(2)(b), the question of whether, in the light its judgment, he should withdraw the reference he made to the CJEU on 21 December 2020. The Court of Appeal indicated that the hearing should take place as soon as possible, and in any event in time for any decision to withdraw the reference to be effective.