HELMS-BURTON. CUBAN ADJUSTMENT FROM EUROPE

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Damage claims by European subsidiaries – which would therefore be EU operators – of a Cuban company against a US oil company that has sued its parent company on the basis of the Helms-Burton Act are by no means out of the question.

Article 6 of the Blocking Statute regulates the right of EU operators to compensation. They are entitled to compensation for any damage and in any place (breach of contract by the other party, damage to their creditworthiness or goodwill, damage to reputation, legal costs, etc.) caused to them under the application of the rules listed in the Annex to that statute or actions based thereon or arising therefrom. The claim shall be directed against the natural or legal person or any other entity causing the damage or against any person acting on their behalf or as an intermediary. Compensation may take any form provided for by the law of the Member State of the Union in which the proceedings are conducted, such as seizure and sale of assets, including shares held by the defendants in a legal person incorporated in the European Union.

In conclusion, Article 6 of the blocking statute articulates the possibility for the EU operator sued in the United States on the basis of Title III of the Helms-Burton Act to respond with another lawsuit brought in the European Union, claiming any damages caused by the lawsuit brought in the United States and the decisions resulting from it. This in no way precludes EU and especially non-EU operators from bringing claims before the courts of the Member States on the basis of the provisions of the domestic law of each Member State, where such laws contain procedural and substantive provisions that may support their claims.

With regard to the issue of international jurisdiction, and let us not forget that we are dealing with cases in which the defendant will usually be domiciled in the United States, Article 6 determines that Regulation (EU) 1215/2012 of 12 December on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Bis)[1] shall apply to legal proceedings instituted and judgments rendered pursuant to that Article. Jurisdiction shall be determined on the basis of the provisions of Sections 2 to 7 of Chapter II of that Regulation, as well as in accordance with Article 67 thereof, proceedings may be brought in the courts of any Member State in which the defendant (natural person, entity, person acting on his behalf or an intermediary) has assets[2] .

The forums provided for in sections 2 to 7 of Chapter II of Regulation (EU) 1215/2012 are not really operative in cases of claims for compensation sought by EU operators harmed by claims brought under Title III of the Hemls-Burton Act[3]. One could try to force the forum of the place of the damage, provided for in Article 7(2), by saying that the financial or reputational damage arising from the claim brought in the United States occurs in the territory of the European Union. However, after what was held by the Court of Justice of the European Union in its judgments of 19 September 1995[4] , 10 June 2004 [5]and 16 June 2016[6] , this argumentation lacks foundation, since in the first of these, which determined the subsequent case law doctrine, the Court stated: “Even if it is thus accepted that the concept of <<place where the harmful event occurred>>, within the meaning of Article 5(3) of the Convention, may refer both to the place where the damage occurred and to the place of the harmful event, that concept cannot be interpreted in an extensive manner to the point of encompassing any place where the harmful consequences of an event which has already caused damage actually occurring elsewhere may be experienced. Consequently, that concept cannot be interpreted as including the place where the victim, as in the main proceedings, claims to have suffered pecuniary damage as a result of an initial damage sustained and suffered by him in another Contracting State. Certainly, given the particular problems with regard to which the blocking statute operates, it might be tempting to qualify this jurisprudential position, especially if one takes into account that the original damage occurs outside the European Union and by the extraterritorial application of a punitive legislation and with these assumptions construct that the forum of the place of the damage is the place in the European Union in which the injured EU operator has its domicile, headquarters or is present.

In view of the possible ineffectiveness of the forums contained in sections 2 to 7 of Chapter II of Brussels I Bis, the drafters of the blocking statute had the good sense to create, on the basis of Article 67[7], a forum that attributes jurisdiction to the courts of the place where the defendant has assets. Thus, anyone with assets in the European Union will have to be very cautious about suing an EU operator on the basis of Title III of the Helms-Burton Act, as they can easily find themselves facing a counter-claim in the place where their assets are located.

In addition, outside the blocking statute and the Brussels I Bis Regulation, both EU and non-EU operators should explore the possibilities of suing on the basis of the forums of international jurisdiction provided for in the internal rules of origin of each EU Member State.

 

Lupicinio Rodríguez

Executive Chairman Lupicinio International Law Firm

José Luis Iriarte

Professor of International Law at the University of Navarre

Of Counsel Lupicinio International Law Firm

 

More information:

Lupicinio International Law Firm

C/ Villanueva 29

28001 Madrid

T: +34 91 436 00 90

F: +34 91 587 24 99

info@lupicinio.com

 

[1] Regulation (EC) 2271/96, as could not be otherwise given the date on which it was issued, refers to the Brussels Convention of 27 September 1968. It should be understood that the reference is now to the Brussels I Bis Regulation, and this is what the Commission expressly states, although the same page contains a curious error in terms of regulatory succession. European Commission, <<Guidance note. …>>, 8.

[2] Regulation (EC) No 2271/96 refers to Sections 2 to 6 of Title II and Article 57(3) of the Brussels Convention.

[3] On the other hand,  they may be operative in cases of damages caused by other American Secondary Sanctions; for example, those imposed on Iran may give rise to breaches of contract, in these cases the forum of Article 7.1 of Brussels I Bis may have a great projection.

[4] Case C-364/93; Antonio Marinari v Lloyd’s Bank plc and Zubaidi Trading Company; ECLI:EU:C:1995:289. Peter Mankowski, <<Article 7>>, in: European Commentaries on Private International Law ECPIL. Vol. I Brussels Ibis Regulation, ed. by Ulrich Magnus and Peter Mankowski (Köln, 2016), 305-314.

[5]  Case C-168/02; Rudolf Kronhofer/M. Maier, Ch. Möller, W. Hofius and Z. Karan, ECLI:EU:C:2004:364.

[6] Case C-12/15; Universal Music International Holding BV v. Universal Music International Holding BV. Tétreault Schilling, I. Schwartz and J. Broz; ECLI:EU:C:2016:449.

[7] Peter Mankowski, << Article 67>>, in: European Commentaries …, 1020-1023.

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