Thursday, 4 September 2014

Financial Services and Jurisdiction: AG Szpunar in Kolassa (C-375/13)

3 September 2014: Opinion of AG Szpunar in Kolassa (C-375/13)

The Austrian resident Kolassa made claims against the British Barclays Bank based on prospectus liability (amongst others). He had acquired a bearer bond which lost all its value. The bonds had been issued by Barclays' German agency bank and were solely sold to institutional investors, not to private persons. The German DAB Bank AG bought some of these bonds and transmitted them to their Austrian subsidiary (direktanlage.at AG), who then sold it to the private investor Kolassa. Mr Kolassa himself was not the holder of the bond, but direktanlage.at, who held the bond in his own name and owed Mr Kolassa only a contractual obligation of delivery. The Austrian court dealing with the case had doubts about its jurisdiction and submitted several questions regarding the Brussels I Regulation to the CJEU.

As regards the application of Art 15 Brussels I Regulation, AG Szpunar suggested that Mr Kolassa himself is qualified as a consumer and that Barclays had directed its activities to the Member State of Mr Kolassa's domicile by having published the bond's prospectus in Austria. However, AG Szpunar answers in negative the question whether a contract was concluded between the parties of the dispute ('In matters relating to a contract...'). As a consequence, he deems Art 15 Brussels I Regulation not to be applicable.

The AG's reasoning why Art 5 Nr 1 lit a Brussels I Regulation is not applicable either is quite similar. He stresses the fact that, in the relation between Mr Kolassa and Barclays, there was no obligation freely assumed by one party towards another. The obligations Barclays had towards Mr Kolassa were thus not contractual in nature, but rather claims in tort, delict or quasi-delict within the meaning of Art 5(3) Brussels I Regulation. Prospectus liability clearly falls under Art 5(3) Brussels I Regulation. According to the AG, the harmful event occurred in the Member State of domicile of the 'holder' of a certificate, if the certificate's prospectus was published in this Member State and caused the holder's financial loss. Transferring this reasoning to the actual case, the Austrian court would have jurisdiction over the case. 

Finally, the Austrian court asked if, while determining its jurisdiction, national courts should only take into consideration the facts asserted by the applicant or whether they should rather conduct a comprehensive taking of evidence. On this topic, the AG suggested that national courts should evaluate the arguments of both sides, the applicant and the defendant, while not delaying the procedure with a comprehensive taking of evidence, which seems to be a reasonable solution.

Another preliminary procedure on financial services, this time in relation with the Brussels I Regulation. Let's see how the CJEU will decide!

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