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.

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:

…

…’

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.

…’

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):

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:

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.

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:

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:

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:

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:

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.

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 )

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.

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:

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.

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:

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 )

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.

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 )

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.

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 )

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.

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:

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.

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.

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 )

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: