Court of Justice of the European Communities (including Court of First Instance Decisions)

OPINION OF ADVOCATE GENERAL

CAMPOS SÁNCHEZ-BORDONA

delivered on 17 December 2020 (1)

Case C‑709/19

Vereniging van Effectenbezitters

v

BP plc

(Request for a preliminary ruling
from the Hoge Raad der Nederlanden (Supreme Court of the Netherlands))

(Preliminary ruling procedure – Regulation (EU) No 1215/2012 – International jurisdiction in civil and commercial matters – Jurisdiction in tort, delict or quasi-delict – Litigation over investments – Place where the harmful event occurred – Purely financial damage – Action for a declaratory judgment brought by an organisation for the collective defence of interests)

1.        An association of securities holders has brought an action for damages before the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) over the fall in the value of their shares in a company established in the United Kingdom, following an oil spill at the company’s operations in the Gulf of Mexico.

2.        In the context of those proceedings, the court needs to obtain an interpretation of Article 7(2) of Regulation (EU) No 1215/2012. (2) As the claim is for purely financial damage, the court has difficulty in deciding on its jurisdiction in the light of previous decisions of the Court of Justice, particularly the judgments in Kolassa, Universal and Löber. (3)

3.        The doubts experienced by the referring court highlight the risks inherent in open-textured interpretations in this area, such as an interpretation that links international jurisdiction to the ‘specific circumstances’ of the case. At the same time, they provide an opportunity to qualify or, if necessary, revise those interpretations.

I.      Legal framework

A.      EU law: Regulation No 1215/2012

4.        Recital 16 provides as follows:

‘In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen. …’

5.        Article 4 provides that:

‘1.      Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.

…’

6.        Pursuant to Article 7:

‘A person domiciled in a Member State may be sued in another Member State:

…

(2)      in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;

…’

B.      Netherlands law: Burgerlijk Wetboek (4)

7.        Article 305a of Book 3 of the BW (5) provides that:

‘(1)      Any institution or association which has full legal capacity may bring an action in defence of similar interests held by others, provided that the defence is conducted in accordance with its statutes.

…

(3)      An action such as that provided for in paragraph (1) may not be brought for the purpose of obtaining … monetary damages.

…’

II.    Facts, proceedings before the national courts and question referred

8.        Vereniging van Effectenbezitters (Association of Securities Holders, ‘VEB’) is a Dutch association established in The Hague (Netherlands), whose purpose as defined in its statutes is to defend the interests of securities holders.

9.        BP plc (‘BP’) is an oil and gas company whose registered office is in London (United Kingdom) and which operates worldwide. Its ordinary shares are listed on the London and Frankfurt stock exchanges.

10.      In April 2010 an explosion occurred on an oil rig leased by BP in the Gulf of Mexico, causing serious environmental damage.

11.      On 17 April 2015 VEB commenced proceedings against BP before the rechtbank Amsterdam (District Court, Amsterdam, Netherlands), bringing a collective action under Article 3:305a of the BW on behalf of all persons who had bought, held or sold BP ordinary shares through an investment account in the Netherlands or through an investment account of a bank or investment firm established in the Netherlands during the period from 16 January 2007 to 25 June 2010 (‘BP shareholders’).

12.      VEB sought a ruling from the rechtbank Amsterdam (District Court, Amsterdam):

–        that the courts in the Netherlands have international jurisdiction to hear the claims for compensation brought by the BP shareholders;

–        that the rechtbank Amsterdam (District Court, Amsterdam) has territorial jurisdiction to hear those claims;

–        that BP acted unlawfully towards its shareholders inasmuch as it made incorrect, incomplete and misleading statements about: (i) its safety and maintenance programmes prior to the oil spill on 20 April 2010; or (ii) the extent of the oil spill; or (iii) the role and responsibility of BP in regard to the oil spill;

–        that, had it not been for the unlawful conduct on the part of BP, the purchase or sale of BP shares by the BP shareholders would have been effected at a more favourable market price, or not at all;

–        that there is a conditio sine qua non link between BP’s unlawful conduct and the loss suffered by the BP shareholders due to the fall in the share price in the period between 16 January 2007 and 25 June 2010.

13.      BP disputed the jurisdiction of the Netherlands courts, in reliance on Regulation No 1215/2012. The rechtbank Amsterdam (District Court, Amsterdam) declared that it lacked jurisdiction, and the gerechtshof Amsterdam (Court of Appeal, Amsterdam, Netherlands) upheld that decision.

14.      VEB has lodged an appeal in cassation with the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), which has referred the following questions to the Court of Justice for a preliminary ruling:

‘(1)      (a)      Should Article 7(2) of [Regulation No 1215/2012] be interpreted as meaning that the direct occurrence of purely financial damage to an investment account in the Netherlands or to an investment account of a bank and/or investment firm established in the Netherlands, damage which is the result of investment decisions influenced by globally distributed but incorrect, incomplete and misleading information from an international listed company, constitutes a sufficient connecting factor for the international jurisdiction of the Netherlands courts by virtue of the location of the occurrence of the damage (“Erfolgsort”)?

(b)      If not, are additional circumstances required to justify the jurisdiction of the Netherlands courts and what are those circumstances? Are the additional circumstances referred to paragraph 4.2.2 ^[(6)^] sufficient to found the jurisdiction of the Netherlands courts?

(2)      Would the answer to Question 1 be different in the case of a claim brought under Article 3:305a of the BW by an association the purpose of which is to defend, in its own right, the collective interests of investors who have suffered damage as referred to in Question 1, which means, among other things, that neither the places of domicile of the aforementioned investors, nor the special circumstances of individual purchase transactions or of individual decisions not to sell shares which were already held, have been established?

(3)      If courts in the Netherlands have jurisdiction on the basis of Article 7(2) of [Regulation No 1215/2012] to hear the claim brought under Article 3:305a of the BW, do those courts then, on the basis of Article 7(2) of [Regulation No 1215/2012], also have international and internal territorial jurisdiction to hear all subsequent individual claims for compensation brought by investors who have suffered damage as referred to in Question 1?

(4)      If courts in the Netherlands as referred to in Question 3 above have international, but not internal, territorial jurisdiction to hear all individual claims for compensation brought by investors who have suffered damage as referred to in Question 1, will the internal territorial jurisdiction be determined on the basis of the place of domicile of the misled investor, the place of establishment of the bank in which that investor holds his or her personal bank account or the place of establishment of the bank in which the investment account is held, or on the basis of some other connecting factor?’

III. Proceedings before the Court of Justice

15.      The request for a preliminary ruling was lodged at the Registry of the Court of Justice on 25 September 2019.

16.      Written observations were submitted by VEB, BP and the European Commission. Following the cancellation of the hearing that had originally been arranged, the Court of Justice sent them questions to be answered in writing, to which they replied on 8 October 2020.

IV.    Analysis

A.      General comments

17.      In accordance with the indications given by the Court of Justice, this Opinion will address only the first two questions referred.

18.      Before examining these questions, I would like to draw attention to the following points:

–        The provisions of Regulation No 1215/2012 must be interpreted independently, by reference to its scheme and purpose. (7)

–        In so far as Regulation No 1215/2012 replaces Regulation (EC) No 44/2001 (8) (which, in turn, replaces the Brussels Convention), (9) the interpretation by the Court of Justice of previous provisions equivalent to those in the instrument currently in force remains valid. (10)

–        The sole purpose of identifying the place where the harmful event actually occurred or manifested itself, in the context of Article 7(2) of Regulation No 1215/2012, is to establish the jurisdiction of the courts of a Member State.

–        Identifying that place helps to ensure that parties to cross-border private-law disputes have access to an effective remedy, opening up an alternative jurisdiction to that of the defendant’s domicile to meet ‘objective need[s] as regards evidence or the conduct of the proceedings’. (11)

–        Within the scheme of Regulation No 1215/2012, jurisdiction is assigned to the courts of the place in which the claimant is domiciled (forum actoris) only in exceptional circumstances. (12)

B.      Preliminary points on the request for a preliminary ruling

19.      The first and second questions contain several linked queries concerning Article 7(2) of Regulation No 1215/2012.

20.      The sequence of those queries can be summarised as follows:

–        the referring court wishes to know whether the direct occurrence of purely financial damage to an investment account (13) in the Netherlands is grounds for attributing international jurisdiction to that Member State, as the place where the damage occurred, in a situation where the damage was the result of decisions taken in the light of information available to everyone, issued by an international company listed on the stock exchange of another Member State;

–        if the answer is in the negative, it asks whether additional circumstances are required, and what those circumstances are;

–        it requests a particular examination of the specific circumstances at issue in the proceedings; (14) and

–        lastly, it wishes to know what impact the collective nature of the action could have on the response.

21.      I should, in any event, set out the points which are not in debate and which are taken as read. They are as follows:

–        the action is classed as non-contractual;

–        the causal event occurred outside the Netherlands; and

–        the damage is purely financial, can be attributed to specific individuals, and equates to the loss in value of BP ordinary shares. (15)

22.      The queries raised by the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) are based on a premiss known as the ‘holistic approach’, (16) adopted by the Court of Justice in connection with Article 7(2) of Regulation No 1215/2012 in certain proceedings concerning investments, (17) where the loss was said to have occurred in the place of the investor’s bank account. (18)

23.      While it is true that the location of the investor’s account was used to identify the court with jurisdiction, it must be noted that this occurred in circumstances described by the Court of Justice as ‘specific’, (19) in that:

–        it was considering the question from a very precise angle, since the case concerned ratification of the jurisdiction of the courts of the applicant’s domicile; and

–        the location of the account as a connecting factor was of only relative importance, since the appropriateness of that location as a basis for attributing jurisdiction was confirmed by a combination of other factors which took into account the close connection between the action and the jurisdiction and the foreseeability of the jurisdiction for the parties.

1.      Obstacles to accepting the location of an investment account as the place where the damage occurred

24.      Where a Member State’s jurisdiction is under debate, I am not convinced that the fact that the applicant’s account is located in that Member State is a relevant consideration in any non-contractual action for damage suffered by investments as a result of defective information, even when supplemented by other factors. While noting that the Court of Justice has inclined towards that view, in my opinion it is an open question.

25.      In so far as an investment account records the value of assets, and those assets suffer a loss, the location of that account could, in principle, represent the place where the account holder suffered purely financial damage. The identification of a specific geographical location for the damage is, however, a figure of speech or a fiction, as with any location predicated as the place where immaterial damage occurs. (20)

26.      When it comes to deciding between the various possible locations for the damage, one must not lose sight of the purpose of the law in question. From this perspective, an investment account (or a bank account, in the broadest sense) is of questionable relevance: the case-law of the Court of Justice confirms that the connection is a tenuous one.

27.      The location of the account largely favours the interests of the shareholder, particularly if it coincides with his or her place of domicile or residence, and, in the case of consumers or small investors, this is consistent with the legislative policy objectives of the substantive law. (21) However, that policy should not be promoted at the expense of the purpose of Regulation No 1215/2012, as currently drafted.

28.      The location of an account can contribute to the objective proximity between the dispute and the court with jurisdiction, but the importance of this should not be overstated. The accounts in which securities are deposited or in which a fall in their value is registered do not condition, for example, the causal link between the event and the harm, or the extent of the resulting damage.

29.      Moreover, the company that issues the listed shares cannot predict where its shareholders will have their accounts, making it impossible for the company to foresee the courts with international jurisdiction in which it could be sued.

30.      It is true that, in deciding to list on the stock exchange of a State other than the one where it has its seat, an issuer of shares implicitly accepts that it may perhaps be sued outside its domicile. However, inasmuch as it has no control over the subsequent circulation of its securities, from the company’s perspective, the location of an investor’s account (22) is both random and unforeseeable. (23)

31.      Against that background, accepting the location of the account as the decisive factor in determining jurisdiction does not prevent ‘the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen’. (24) Rather, it facilitates that possibility.

2.      Reservations over the use of the ‘holistic approach’ in cases such as this

32.      In my Opinion in Verein für Konsumenteninformation I said that the absence of physical damage impedes the identification of the place where the damage occurs and creates uncertainty about whether it is possible to use that place as a connecting factor for the purposes of Article 7(2) of Regulation No 1215/2012. (25)

33.      I noted that, for this reason, it has been suggested to the Court of Justice on several occasions that it should abandon the choice between the place of the event giving rise to the damage and the place where the damage occurred in situations involving financial loss alone. I agreed with that approach, with the qualification that it could be applied in certain, but not necessarily all, circumstances. (26)

34.      I therefore share the reservations as regards an interpretation of Article 7(2) of Regulation No 1215/2012 which, in matters of non-contractual liability in connection with investments in securities, is based on the fiction that immaterial damage occurs in a particular place, and which also requires the existence of a set of specific circumstances in order to attribute jurisdiction to the courts of that place. (27)

35.      The notion that this approach should be revisited is supported by an argument concerning legal certainty: at the appropriate moment in the proceedings (in some cases, even at the start of proceedings), the court with which the action has been lodged must identify the factors that connect the action to the forum State, from which the court will derive its own international jurisdiction, in the light of the applicable legislation. For practical reasons but also, I repeat, on grounds of legal certainty, the court must readily be able to rule on this requirement, before hearing the substance of the case.

36.      In situations such as this, an interpretation of Article 7(2) of Regulation No 1215/2012 which requires an analysis of the specific circumstances of each case is not conducive to providing certainty of outcome. Moreover, the very nature of the criterion may well create uncertainty among legal practitioners and encourage procedural delaying tactics, as well as divergent interpretations in Member States and further requests to the Court of Justice for preliminary rulings. (28)

3.      Provisional conclusion

37.      Thus, in cases such as the present one, it may not be essential to adopt the contact grouping method in order to attribute jurisdiction on the basis of Article 7(2) of Regulation No 1215/2012. It would then be a case of locating the occurrence of the damage in a place which accorded more closely with the objectives pursued by the law, and ruling out the place where the investment account is located.

38.      I believe this approach is possible, and indeed it has been adopted by courts in some Member States, which examine their jurisdiction on the basis of other factors, giving priority to the place of the market on which the shares are listed, for example. (29) That place (not necessarily a physical location) is well known ex ante and has been chosen by the issuer, which is subject to its legislation on reporting obligations; and the investor has, or should have, advance notice of the place when he or she acquires shares in the company. (30)

39.      However, having regard to the wording of the questions referred, I shall answer them in accordance with their own premisses, that is to say, in the light of the existing case-law of the Court of Justice, examining the alternative solutions that have been proposed, where applicable.

C.      First question referred

1.      Reply in the light of the case-law of the Court of Justice

(a)    Paragraph (a): Is the place where the investment account is held a ‘sufficient connecting factor’?

40.      It can be seen from the judgments in Kolassa, Universal and Löber that the location in a Member State of the bank account (in a broad sense) that records the financial loss is not sufficient to attribute international jurisdiction to the courts of that Member State. Specific circumstances must also exist which, taken together, enable jurisdiction to be attributed to it. (31)

41.      Leaving to one side the effect which the (collective) nature of the action lodged by VEB could have on the case (32) for the moment, I cannot identify any distinctive element in the case that is significant enough to enable a departure from that case-law.

42.      The referring court stresses that, in the judgment in Universal, the financial damage was registered in a bank account chosen by the applicant itself for the purposes of settling its debt; the injured party decided where it suffered the loss, making the location of the account less reliable as a factor in attributing international jurisdiction. By contrast, in the present case the financial loss that follows the fall in the value of the shares held in investment accounts occurs directly in those accounts.

43.      I do not find the argument convincing, for various reasons:

–        in that judgment the Court of Justice described the unreliability of the account chosen by the applicant as a supplementary reason rather than one of the main grounds; (33)

–        one cannot discount the possibility that a shareholder may choose the account his or her securities are to be deposited in, enabling him or her to predetermine the location of that account and thus establish a link to a particular territory, with a view to a future action against the issuer of the shares; (34)

–        the fact that the shareholder whose securities have fallen in value did not choose the location does not make the factor any less unforeseeable for the issuer, as I have explained.

44.      Nor do the differences between this case and those addressed in the judgments in Kolassa and Löber as regards the form and extent of the allegedly misleading information supplied by the defendant justify the attribution of international jurisdiction to the courts of the place where the investment accounts are located.

45.      Indeed, the fact that the information provided by the issuing company is not addressed specifically or separately to Netherlands investors would seem instead to support the opposite conclusion. (35) However, in so far as, in VEB’s view, this factor is a specific circumstance that corroborates the jurisdiction of the courts of the Netherlands, I shall examine it later from that perspective.

46.      In short, the fact that the financial damage took place in an investment account located in the Netherlands cannot be accepted as a ‘sufficient connecting factor for the international jurisdiction’ of the courts of that State.

(b)    Paragraph (b): specific circumstances of the case

47.      In the event that the reply to the first question referred is in the negative, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) wishes to know whether ‘additional circumstances [are] required to justify the jurisdiction of the Netherlands courts and what … those circumstances [are]’. Specifically, it asks whether the circumstances referred to in paragraph 4.2.2 of the order for reference (36) would be sufficient.

48.      As I explained in a previous case, where the damage described in the application is purely financial, it is not possible to state in the abstract which specific circumstances, taken together, create a sufficient connection between the action and a jurisdiction. (37)

49.      Nevertheless, it seems appropriate to reiterate that the ‘specific circumstances’ relevant to attributing jurisdiction are those which demonstrate the proximity between the action and the jurisdiction, and the foreseeability of that jurisdiction for the parties, because these principles provide the basis for the international jurisdiction of the courts for the ‘place of the damage’. (38)

50.      Those circumstances must include:

–        factors that facilitate the sound administration of justice and the smooth operation of proceedings; and

–        factors that may have helped the parties to determine where they should institute proceedings or where they might be sued as a result of their actions.

51.      It can be seen from the documents on the case file that there are no specific circumstances in the main proceedings analogous to those in the Kolassa and Löber cases. According to the order for reference, there may, however, be other such circumstances. (39) In my opinion, most of these (leaving to one side, for the moment, the collective nature of action) are not significant for the purposes of attributing jurisdiction. (40)

(1)    BP’s settlement with other shareholders

52.      I consider that the fact that BP has reached a settlement with its shareholders in the USA which has not been offered to European shareholders is irrelevant. In terms of foreseeability, proximity or the sound administration of justice, it offers nothing to suggest that the Netherlands should have jurisdiction within the European Union.

(2)    Shareholder-consumer status

53.      In my opinion, it is also irrelevant that some of those affected are consumers. (41) While it might be desirable to regulate the situation of minority investors along the lines of Section 4 of Chapter II of Regulation No 1215/2012, (42) that is not the position at present.

54.      The only consumers who are protected under Regulation No 1215/2012 are those who participate in a contract in the circumstances provided for in Article 17. (43) As currently drafted, the regulation does not contain an overall consumer protection principle which gives consumers the right always to sue in their place of domicile.

55.      In the absence of such a general rule, the status of ‘consumer’ must, as with the other factors, be evaluated in the context of Article 7(2): that is, in terms of the proximity and foreseeability of the jurisdiction. In this regard, I cannot see how the fact that some BP investors are consumers makes for an objectively closer connection between the jurisdiction and the action, or that it makes the jurisdiction of the Netherlands courts more or less foreseeable from the defendant’s perspective. (44)

(3)    BP’s information about its shares

56.      The information BP provides on its shares is intended for a worldwide investor public. BP is therefore aware that its securities may be acquired by investors in States other than the one where it has its seat or where the stock exchange or exchanges on which it has decided to list are established. (45)

57.      It is true that an economic operator cannot hide behind the general nature of information disseminated by it in order to avoid being sued in a particular place. But it does not seem reasonable to require it to submit to every single jurisdiction from which that information might be accessed via the internet, when the purpose of the information is to show the characteristics of listed shares which are normally transferred through a series of intermediaries over which the issuer has no control.

58.      In other words, I believe that, for the purposes of Article 7(2) of Regulation No 1215/2012, the fact that a company makes information on its shares available worldwide does not provide any support for the jurisdiction of the courts of a specific State. (46)

59.      Against this background, I do not believe that the specific circumstances referred to in the second question referred advance the case for attributing jurisdiction to the Netherlands courts.

2.      An alternative solution?

60.      The Commission proposes that, exceptionally, the damage should be interpreted as occurring in the investment account held in a Member State, enabling jurisdiction to be attributed to the courts of that State, without the need for any additional circumstances, if there are no factors that allow jurisdiction to be attributed to a different Member State.

61.      The Commission maintains that, otherwise, in circumstances such as these, the claimant would be denied the option offered by Article 7(2) of Regulation No 1215/2012 where the place of the causal event is the same as that of the defendant’s domicile.

62.      My view is that while this outcome is unfortunate, it is not contrary to the system for attributing international jurisdiction established by Regulation No 1215/2012, whereas the opposite outcome might be.

63.      The Brussels Convention and, later, the regulations, start from the premiss that (save for the exceptions provided for therein) the defendant’s domicile is and must be the main place of jurisdiction. The additional special jurisdictions are intended to address a series of issues which do not expressly include, as an end in itself, the provision of alternatives for the applicant. (47)

64.      At the heart of the interpretation of Article 5(3) of the Brussels Convention lies the provision’s underlying purpose, which encompasses both the place where the harmful event occurred and the place where the damage occurred. That purpose would be frustrated if the provision were to be systematically interpreted solely as the place where the causal event occurred, because this generally coincides with the defendant’s domicile. (48)

65.      But the Court of Justice has also constantly stressed that Article 7(2) of Regulation No 1215/2012 must be interpreted narrowly, to avoid negating the general principle that the courts of the State where the defendant is domiciled are to have jurisdiction. (49)

66.      I note, in this context, that the jurisdiction provided for in Article 7(2) of Regulation No 1215/2012 is not designed to protect the applicant. This observation is generally accompanied by a warning against adopting an interpretation of the provision that would incline towards the jurisdiction of the courts of the claimant’s domicile. (50)

67.      Hence, the objective of facilitating an action by the applicant cannot take precedence over the objectives of ensuring legal certainty and physical proximity between the action and the jurisdiction.

68.      In my view, these arguments show that there is no imperative – and certainly no absolute imperative – to allow the applicant options when bringing proceedings, still less a requirement to give him or her the option of bringing his or her action in a place where damage is said to have occurred when – since the place of damage is, in practice, a fiction – it does not provide the necessary connection between the action and the jurisdiction.

69.      Consistent with this approach, I note that, according to the Court of Justice, where it is impossible, or difficult, to determine where the causal event took place, it will be for the injured party to bring his or her action in the court of the place where the damage occurred. (51)

70.      I would add, as I have done on a previous occasion, (52) that the Court of Justice excluded the application of Article 5(1) of the Brussels Convention (now Article 7(1) of Regulation No 1215/2012) in relation to an obligation which ‘is not capable of being identified with a specific place or linked to a court which would be particularly suited to hear and determine the dispute relating to that obligation’. (53)

71.      In any event, in so far as it is a condition for the application of Regulation No 1215/2012 that the defendant be domiciled in a Member State, at the very least the applicant has access to courts whenever the regulation applies. Therefore there is no risk of denial of justice. (54)

D.      Second question referred

72.      The referring court wishes to know whether the reply to the first question is affected by the nature of the action brought by VEB (that is, the fact that it is a collective action) and the fact that it is purely an action for a declaratory judgment.

73.      In this context, it refers to the judgment in CDC Hydrogen Peroxide, (55) in which the Court of Justice held that the transfer of claims by each original creditor to the applicant does not affect the determination of the court having jurisdiction under Article 7(2) of Regulation No 1215/2012.

74.      In the view of the referring court, if this solution were applied to the main proceedings it would render collective action ineffective.

1.      Collective actions and the place of the damage

(a)    Applications solely for a declaration of liability

75.      Under the national law applicable at the time the application was lodged, an organisation for the defence of collective interests such as VEB does not have standing to bring an action for (monetary) damages. These could only be claimed by the individual injured parties.

76.      The Court of Justice has stated that Article 7(2) of Regulation No 1215/2012 covers actions for a declaration of non-contractual civil liability, (56) including actions for a declaration that there is no liability (57) and for an injunction to prevent future damage. (58)

77.      According to this case-law, the courts of the Member State in which either the causal event took place or the harm occurred or may occur may lawfully accept jurisdiction by virtue of Article 7(2) of Regulation No 1215/2012 in actions in which specific damages have not (yet) been sought. (59)

78.      In the judgment in DFDS Torline, the Court of Justice:

–        based its reasoning on, among other factors, the connection between the first stage of the action (for a declaration that certain conduct was unlawful) and the second stage (for damages for the conduct in question);

–        took the view that if these two stages were split for the purposes of international jurisdiction, the applicant would be required to bring proceedings in the courts of different Member States, and this ‘would be contrary to the principles of sound administration of justice, legal certainty and the avoidance of multiplication of bases of jurisdiction as regards the same legal relationship’. (60)

79.      In the light of the above, I see no difficulty in applying Article 7(2) of Regulation No 1215/2012 to declaratory actions such as that brought by VEB, in advance of subsequent actions for damages which may be brought only by the individual injured parties, whose identity and residence are unknown at the time of the (first) action.

80.      The above statement is, in any event, based on the premiss that there is some link, or functional connection, between the declaratory proceedings commenced by VEB and subsequent actions for damages. (61) Whether or not this premiss is satisfied in the context of Article 3:305a of the BW is a matter for the referring court.

81.      It must be said that identifying the place where the harm occurs will be more complex in these two-stage procedural scenarios, in that the harm affects holders who have not necessarily been identified yet. In my view, that fact does not in itself mean that the harm is not ‘real, rather than abstract’. (62)

82.      In the present case the difficulty is mitigated by the restricted nature of the interests defended by the applicant, which are limited to interests arising from the fact that the investment accounts which recorded the fall in the value of shares are located in the Netherlands.

(b)    Collective action and plurality of places where the harm occurs

83.      When considered as grounds for international jurisdiction, the place where the damage occurred is the place where the adverse consequences of an event actually manifest themselves. (63) We therefore need to know, first of all, what the harm is, and in order to know this we need to identify the legal interest that is potentially affected.

84.      Material interests that are capable of suffering harm fall into different types. To simplify, we can distinguish between diffuse interests, (64) collective interests (65) and individual interests; in the latter case, the identity of the owner of those interests is known beforehand or can be determined once the action has been commenced (or, even, once judgment has been given).

85.      It is for the referring court, rather than the Court of Justice, to determine the nature of the interest defended by the applicant in the type of collective action envisaged by Article 3:305a of the BW, on which the applicant appears to have relied.

86.      If the referring court considers that, in the collective action brought by VEB, the interests at stake belong to identified or readily identifiable individuals (as appears to be the case), (66) the response to the second question referred must be based on the relevant case-law established to date by the Court of Justice.

87.      In the judgment in CDC, in which individual claims were grouped together after they had been transferred, the Court of Justice ruled that the transfer did not affect the determination of international jurisdiction. (67)

88.      In adopting this approach, the Court of Justice confirmed its earlier ruling in the judgment in ÖFAB, according to which: (a) the particularly close connection between the place where the harmful event occurred and the court of jurisdiction remains, even if the initial creditor transfers his or her claim; and (b) a different answer would be contrary to the aim of the regulation, according to which the rules of jurisdiction must be highly predictable. (68)

89.      According to that case-law, if, in its collective action, VEB is considered to be defending the individual interests of investors who have entrusted it with the defence of their interests before the courts, the conclusion must be that the collective nature of the action does not alter the conditions for attributing jurisdiction to the Netherlands courts pursuant to Article 7(2) of Regulation No 1215/2012.

90.      The attribution of jurisdiction will therefore be dependent on satisfaction of the general conditions required by the case-law of the Court of Justice: (a) the place or places where the damage actually occurs for each injured party must be located in the Netherlands; and (b) there must be specific circumstances that demonstrate the close connection between the court and the action.

91.      The referring court assumes that, in this case, ‘neither the places of domicile of the aforementioned investors, (69) nor the special circumstances of individual purchase transactions or of individual decisions not to sell shares which were already held, have been established’. But, in view of the nature of the proceedings that have been brought, the absence of these factors would not seem to prevent recognition of the jurisdiction of the Netherlands courts, if the general conditions referred to above are satisfied.

2.      Effectiveness of collective action

92.      The Hoge Raad der Nederlanden (Supreme Court of the Netherlands) considers that the collective action mechanism would cease to be effective if an organisation such as VEB were required to bring an action in each of the places where the individual damage occurs.

93.      I have no doubt that the national court’s argument is correct, (70) but I can find no alternative under the current EU system for attributing international jurisdiction, as set out in Regulation No 1215/2012.

94.      However, I do not rule out the possibility that, if all the relevant damage were found to have occurred in a single Member State, the problems of territorial fragmentation arising from a strict application of Article 7(2) of Regulation No 1215/2012 could be solved by arguments in support of a specialised court in a particular local jurisdiction. (71)

95.      Lastly, I agree with the comments made by Advocate General Bobek in his Opinion in the Schrems case with regard to the absence, in Regulation No 44/2001, of ‘specific provisions on the assignment of claims … or procedures for collective redress’: it is not for the courts, including the Court of Justice, to introduce new procedural mechanisms, pre-empting the legislature on such a sensitive matter; (72) nor is it for them to create an ad hoc ground of jurisdiction. (73)

V.      Conclusion

96.      In the light of the above, I suggest that the Court of Justice should reply to the first and second questions referred for a preliminary ruling by the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) as follows:

(1)      Article 7(2) 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 (recast) must be interpreted as meaning that:

(a)      it is not a sufficient connecting factor for attributing international jurisdiction to the courts of a Member State that a fall in the value of the shares of a company listed on stock exchanges in other Member States is recorded in investment accounts located in that Member State or in investment accounts of a bank or investment firm established in that Member State, where the damage is the result of decisions taken by investors on the basis of allegedly incorrect, incomplete and misleading information distributed globally by the listed company;

(b)      the existence of a settlement between the defendant company and some shareholders in a third State which has not been offered to the applicants in the main proceedings and the fact that some applicants are consumers are not relevant specific circumstances for the purposes of attributing international jurisdiction pursuant to Article 7(2) of Regulation No 1215/2012. Nor is the fact that the relevant information was distributed worldwide by the defendant company.

(2)      The exercise of a collective action in accordance with national rules of procedure by an association representing the interests of the holders of the securities who suffered the damage does not alter the interpretation of Article 7(2) of Regulation No 1215/2012.

1      Original language: Spanish.

2      Regulation 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 (recast) (OJ 2012 L 351, p. 1).

3      Judgments of 28 January 2015, Kolassa (C‑375/13, EU:C:2015:37, the ‘judgment in Kolassa’); of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, the ‘judgment in Universal’); and of 12 September 2018, Löber (C‑304/17, EU:C:2018:701; the ‘judgment in Löber’).

4      The Netherlands Civil Code (the ‘BW’).

5      ‘Article 3:305a of the BW’.

6      Those circumstances are as follows: BP focuses on a global investment public, including Dutch investors; VEB represents the interests of a large number of investors, the vast majority of whom are domiciled in the Netherlands; the settlement reached between BP and its shareholders in the United States has not been offered to the investors whose interests are represented by VEB, and no other similar procedure has been undertaken in Europe; the shareholders for whom VEB is acting include consumers, to whom Regulation No 1215/2012 affords special legal protection.

7      With regard to the rule on special jurisdiction in matters relating to tort, delict or quasi-delict, see judgment of 25 October 2011, eDate Advertising and Others (C‑509/09 and C‑161/10, EU:C:2011:685, paragraph 38).

8      Council Regulation of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1).

9      1968 Brussels Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 1972 L 299, p. 32; consolidated version in OJ 1998 C 27, p. 1, the ‘Brussels Convention’).

10      See recital 34 of Regulation No 1215/2012.

11      Judgment of 10 June 2004, Kronhofer (C‑168/02, EU:C:2004:364, the ‘judgment in Kronhofer’, paragraph 18).

12      Judgment of 19 September 1995, Marinari, (C‑364/93, EU:C:1995:289, the ‘judgment in Marinari’, paragraph 13), and the judgment in Kronhofer, paragraph 20.

13      The referring court uses this expression to cover both ‘investment accounts in the Netherlands’ and ‘investment accounts of a bank or investment firm established in the Netherlands’.

14      See footnote 6 of this Opinion.

15      In its observations, BP disputes the classification of the damage to the investment accounts as ‘direct’, but the referring court does not ask about this point. If the matter needs to be addressed, in my opinion there is no indirect damage in the sense of damage which is ‘accessory to initial damage arising and suffered by a direct victim’, as Advocate General Léger puts it in his Opinion in Kronhofer (C‑168/02, EU:C:2004:24, point 45), where the damage consists in the loss in share value recorded by an investment account: this is not a question of two different sequential losses but of a single loss.  In my view, it is not possible to separate the fall in value of the securities from the financial loss suffered by the shareholder; on this point I agree with Advocate General Léger. In any event, I note that the national court does not use the adjective ‘direct’ (or the adverb ‘directly’) to distinguish between direct and indirect damage, but to highlight that the facts are different from those that gave rise to the judgment in Universal, where it was the applicant who selected the account from which the funds for which he subsequently made a claim were taken (see point 4.9.1 of the order for reference).

16      This expression is used in legal theory (along with the term ‘minimum contacts approach’ or ‘théorie du groupement des points de contact’) to describe the modus operandi in the judgments in Universal, Kolassa and Löber: Gargantini, M., ‘Competent Courts and Applicable Law’, Busch, D., Ferrarini, G., and Franx, J.P., Prospectus Regulation and Prospectus Liability, OUP, 2020, marg. 19.27.

17      Judgments in Kolassa and Löber. It did not feature in the earlier judgment in Kronhofer, in which the defendant was not the issuer of the securities but the financial intermediary, which had been in direct contact with the claimant.

18      Judgment in Kolassa, paragraph 55 and paragraph 3 of the operative part, and judgment in Löber, paragraphs 16 and 35 and the operative part. And previously, indirectly, in the judgment in Kronhofer, paragraph 18. It was not clear from these judgments, which dealt with different types of accounts, which account was considered to be the place where the damage occurred – the one from which the funds were paid out or the one in which the securities were deposited: Gargantini, M., loc. cit., margs. 19.21 and 19.24.

19      Judgment in Universal, paragraph 37, citing the judgment in Kolassa, and the judgment in Löber, paragraph 29.

20      In the judgment in Kronhofer the Court of Justice rejected the jurisdiction of the courts of the place where the claimant was domiciled, although it acknowledged that financial damage had occurred there. In fact, it accepted the premiss of the referring court that the damage affected the whole of the claimant’s assets simultaneously; it considered that the place where the damage was sustained and the place where the event which resulted in the damage occurred are the same; it accepted that the same damage also occurred in other places (for example, in the account from which the funds were paid), but it refused to confirm the jurisdiction of the courts of the place where the applicant was domiciled and where his assets were concentrated, which coincided with those places. See paragraph 17 et seq. and the operative part.

21      Such as Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (OJ 2017 L 168, p. 12).

22      And even the investor’s identity, in some cases. The obligation on Member States to ensure that companies have the right to identify their shareholders has been established in Article 3a of Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies (OJ 2007 L 184, p. 17), following Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (OJ 2017 L 132, p. 1).

23      See Staedler, A., ‘Der deliktische Erfolgsort als internationaler Gerichtsstand bei reinen Vermögensdelikten’, Festschrift für Reinhold Geimer zum 80. Geburtstag, C.H. Beck, 2017, pp. 715 to 722. If the account is used as a criterion for attributing jurisdiction, an issuer of the shares who wishes to neutralise the risk of being sued in unforeseeable jurisdictions will have to rule out selling its shares to minority shareholders.

24      Recital 16 of Regulation No 1215/2012.

25      Case C‑343/19, EU:C:2020:253 (‘my Opinion in Verein für Konsumenteninformation’), points 46 and 48.

26      Loc. ult. cit.

27      I do not discount the possibility, for example, that in other proceedings over purely financial damage it may be possible to locate the damage based simply on the ‘holistic approach’, without giving serious consideration to the foreseeability of that place or its connection to the dispute or, indeed, to whether it facilitates the sound administration of justice. That is what I argued in my Opinion in Verein für Konsumenteninformation (although I noted the need for caution: see point 70). The same would be true in actions over the freezing of bank accounts as a precautionary measure in cross-border cases, where the debtor is entitled to compensation on the ground that the account was wrongfully frozen. The jurisdiction of the courts of the location of the account that was seized without due cause seems indisputable.

28      Prior to this request, see the request for a preliminary ruling which gave rise to the judgment of 9 July 2020, Verein für Konsumenteninformation (C‑343/19, EU:C:2020:534).

29      See judgments of the Cour de cassation (Court of Cassation, France) of 7 January 2014, No 11‑24.157 (JurisData No 2014-000040), and of the Oberster Gerichtshof (Supreme Court, Austria) of 7 July 2017 (6Ob18/17s).

30      I recognise, however, that this solution is not immune from criticism: it does not favour the small investor domiciled in another State (although Article 7(2) is not designed to protect him or her); and shares may be listed on more than one market. Moreover, this connecting factor may lead to the defendant’s domicile, if the defendant chooses the Member State where it is located as its home Member State within the meaning of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ 2004 L 390, p. 38). I acknowledge too that it may mean that the ‘place of the event giving rise to the damage’ and ‘the place where the damage occurred’ are the same. On this point I refer to the comments by Advocate General Szpunar in his Opinion in Universal Music International Holding (C‑12/15, EU:C:2016:161, point 38): ‘When there is … damage which consists only in a reduction in financial assets, I think that the term “Erfolgsort” is not wholly relevant. In certain situations, it is impossible to distinguish between “Handlungsort” and “Erfolgsort”…’ See also point 60 et seq. below, in this Opinion.

31      Judgment in Universal, paragraphs 36 and 37, and judgment in Löber, paragraph 31 and the operative part.

32      That effect is addressed in the second question referred.

33      Paragraph 38.

34      The difference with the judgment in Universal would therefore lie in the timing of the selection of the account, rather than the selection itself.

35      The national court itself acknowledges that, in these circumstances, the defendant would be unable to foresee the place of jurisdiction: see point 4.9.3 of the order for reference.

36      Reproduced in footnote 6 of this Opinion. Inasmuch as the referring court is requesting an evaluation of specific circumstances, the question referred is not, in my opinion, a hypothetical one, contrary to the assertion by BP in its written reply to the questions put by the Court of Justice (paragraphs 3 to 6).

37      My Opinion in Verein für Konsumenteninformation, point 67.

38      Loc. ult. cit.

39      See footnote 6 of this Opinion.

40      The fact that BP shareholders affected by the fall in the value of the shares are resident in the Netherlands may, however, be considered significant from a case management perspective (for example, in terms of service of notice, or the need for the shareholders to give evidence). It would be for the referring court to weigh up whether this is so, having regard to the nature and purpose of the proceedings.

41      My view would not change even if all those affected were consumers. Moreover, in this case, the consumers themselves are not even applicants; the applicant is VEB.

42      This approach was rejected by the Court of Justice in the judgment in Kolassa, when it found that the claim was not a contractual claim and, therefore, neither that section nor Article 5(1) of Regulation No 44/2001 applied.

43      The Court of Justice has already stated that Article 5(3) of Regulation No 44/2001 does not pursue the objective of offering the weaker party stronger protection: see judgment of 25 October 2012, Folien Fischer and Fofitec (C‑133/11, EU:C:2012:664, the ‘judgment in Folien Fischer and Fofitec’, paragraph 46).

44      Naturally, consumers are, in general terms, more likely to belong to the class of ‘inadequately informed’ operators referred to by the Court of Justice in the judgment in Kolassa, paragraph 56, and the judgment in Löber, paragraph 35, as a factor which the defendant should take into account. However, it was not that factor per se that was the (or a) deciding factor in the Court of Justice’s interpretation, but the fact that the prospectus was notified in the State of the investors’ domicile.

45      It may be precisely for that reason that it does not try to impose geographical restrictions on access to the published information (for example, through geo-blocking or by providing the information in a language spoken only in a particular territory).

46      In its written reply to the questions put by the Court of Justice, VEB seems to admit the weakness of its arguments on this aspect when it states (paragraphs 19 and 21) that the worldwide dissemination of the information may represent a sufficient connection to the Netherlands, ‘at least, in conjunction with the shareholder’s residence’ in that State.

47      Recitals 15 and 16 of Regulation No 1215/2012. The Court of Justice has underlined the objective nature of the basis for the special jurisdictions: see judgment in Folien Fischer and Fofitec, paragraph 45, where it states that the objectives of foreseeability of jurisdiction and legal certainty pursued by Article 7(2) ‘are not connected either to the allocation of the respective roles of claimant and defendant or to the protection of either’.

48      Judgment of 30 November 1976, Bier (21/76, EU:C:1976:166, paragraphs 20 and 23).

49      Judgment in Marinari, paragraph 13; judgment of 27 October 1998, Réunion européenne and Others (C‑51/97, EU:C:1998:509, paragraph 29); or judgment in Universal, paragraph 25, among many others.

50      Judgment in Marinari, paragraph 13, and judgment in Kronhofer, paragraph 20.

51      Judgment of 27 October 1998, Réunion européenne and Others (C‑51/97, EU:C:1998:509, paragraph 33).

52      My Opinion in Verein für Konsumenteninformation, points 49 and 50.

53      Judgment of 19 February 2002, Besix (C‑256/00, EU:C:2002:99, paragraph 49). The case concerned an obligation not to do something, applicable without geographical limit.

54      The Court of Justice is generous when interpreting domicile as a prerequisite for the applicability of the European regulation: see judgment of 17 November 2011, Hypoteční banka (C‑327/10, EU:C:2011:745). If the defendant is not domiciled in the European Union Regulation No 1215/2012 is not applicable, but the residual systems provided for by Member States apply.

55      Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335, the ‘judgment in CDC’).

56      Judgment of 5 February 2004, DFDS Torline (C‑18/02, EU:C:2004:74, the ‘judgment in DFDS Torline’).

57      Judgment in Folien Fischer and Fofitec.

58      Judgment of 1 October 2002, Henkel (C‑167/00, EU:C:2002:555, the ‘judgment in Henkel’). Since the adoption of Regulation No 44/2001, this possibility is now incorporated into the wording.

59      The questions that gave rise to the judgments in Henkel and Folien Fischer and Fofitec did not directly address the usefulness of the criterion of ‘place where the harmful event occurred’ in the respective actions, but rather their classification as ‘non-contractual’. See, in particular, paragraph 42 et seq. of the judgment in Henkel and paragraphs 39, 48 and 52 of the judgment in Folien Fischer and Fofitec.

60      Judgment in DFDS Torline, paragraphs 25 and 26. In paragraph 27 the Court of Justice adds the standard argumentation on proximity of the action and ease of taking evidence, noting that it ‘is equally relevant whether the dispute concerns compensation for damage which has already occurred or relates to an action seeking to prevent the occurrence of damage’. The judgment in Folien Fischer and Fofitec, paragraph 48, adopts a similar approach. In my opinion, where the purpose of the action is to obtain a declaration that conduct is unlawful, justification on grounds of ease of proving the damage is, naturally, secondary, but not non-existent – contrary to the view expressed by BP in its observations. The same is true of the causal link, in so far as it translates into an abstract test – as it seems to in the Netherlands model – for determining whether there is a conditio sine qua non link between the conduct and the damage suffered. The relationship of cause and effect in the strict sense must be established later, in each individual action. See Bosters, T., Collective redress and private international law in the EU, T.M.C. Asser Press, 2017, p. 41, and judgment of the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) of 27 November 2009, LJN BH2162 (VEB/World Online).

61      In my view, the existence of a link or functional connection between proceedings nullifies the view expressed by BP in paragraphs 14 to 18 of its written reply to the questions put by the Court of Justice, where it contends that the place where the harm occurs is not grounds for attributing jurisdiction in actions such as that brought in the present case.

62      As Advocate General Jääskinen puts it in his Opinion in Folien Fischer and Fofitec (C‑133/11, EU:C:2012:226, point 49).

63      Judgment of 16 July 2009, Zuid-Chemie (C‑189/08, EU:C:2009:475, paragraph 27), and judgment in CDC, paragraph 52, amongst others.

64      Meaning general interests which, in principle, affect all citizens and are recognised in a (statutory or constitutional) legislative act.

65      These are interests shared by a specific group in society (for example, consumers), who are bound together by objective factors or particular legal ties and who may be represented by a private legal person or a public entity.

66      The order for reference does not mention allegations of breach of legal interests other than the individual shareholder’s financial interests; such interests could include the freedom of decision-making of market operators – who may have invested on the basis of (allegedly) false information – or market confidence.

67      Paragraph 2 of the operative part.

68      Judgment of 18 July 2013, ÖFAB (C‑147/12, EU:C:2013:490, paragraphs 57 and 58, and paragraph 3 of the operative part).

69      In fact, according to the order for reference, the connecting factor is not the place of the investor’s residence but the place where the investment account is held.

70      Although the referring court does not say so explicitly, I believe that the potential loss of effectiveness is, moreover, two-fold: an organisation that is defending collective interests may be forced to bring actions in different jurisdictions, depending on the location of the damage, if the damage occurs in various Member States; and it may also have to bring proceedings in different courts within those States, since Article 7(2) of Regulation No 1215/2012 determines territorial as well as international jurisdiction.

71      See, by analogy, judgment of 18 December 2014, Sanders and Huber (C‑400/13 and C‑408/13, EU:C:2014:2461).

72      Case C‑498/16, EU:C:2017:863, points 119 to 123.

73      Directive (EU) 2020/1828 of the European Parliament and of the Council of 25 November 2020 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC (OJ 2020 L 409, p. 1) retains the system of international jurisdiction established in Regulation No 1215/2012, as had already been suggested in the proposal for a Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC, of 11 April 2018 (COM(2018) 184 final): see recital 21 and Article 2(3). In addition to automatic recognition of the standing of a qualified entity designated in one Member State to bring actions in other Member States, the directive envisages the promotion of cooperation between such entities to facilitate actions with cross-border implications: see recitals 32 and 71 and Articles 6(2) and (3) and 20(4). It also places an obligation on Member States to provide mechanisms to enable consumers habitually resident in one Member State to be represented in compensatory collective redress actions brought in another Member State: see recital 31 and Article 6(2).

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