“The pace of change in the legal landscape has never felt quicker. The world of disputes and investigations is rapidly evolving, as markets, technology and society develop in extraordinary times. We are delighted to share Linklaters’ summary of significant recent events and what is on the horizon in some key jurisdictions.”
Patrick Robinson, Global Dispute Resolution Knowledge & Learning Partner, United Kingdom
Online safety reforms: Under the Online Safety Act 2021 (Cth), which takes effect from January 2022, online service providers will be under more stringent obligations to take down image-based abuse, cyber abuse, cyber bullying and seriously harmful online content, while the eSafety Commissioner will have new powers to ensure enforcement and create industry standards.
Privacy reform: Broad privacy law reform is expected in 2022. The Government previously flagged a review, including stricter requirements for when and how consent is obtained, an updated definition of 'personal information' and enhanced enforcement powers for the Office of the Australian Information Commissioner (OAIC). Any changes in this area will be heavily scrutinised in light of COVID-19 and personal privacy being at the forefront of Australians' minds.
Climate change litigation continuing to increase: Litigation is increasingly being used to seek to compel government and business to act on climate change and climate-related risks, with this trend expected to continue. Claimants are testing numerous litigation pathways, including claims based in human rights, tort law, consumer laws and corporate disclosure laws.
Implementation of the EU Collective Redress Directive: After highly controversial discussions, the EU Collective Redress Directive was approved by the European Parliament on 24 November 2020. It aims to ensure that consumers in Belgium have access to at least one effective and efficient representative action for obtaining injunctions and remedies for violations of general consumer protection rules, such as the rules on unfair terms in consumer contracts, unfair B2C practices and misleading advertising, as well as sector-specific consumer rules. Belgium will have to transpose the Directive by 25 December 2022 and it will be effective on 25 June 2023.
Reform of Belgian insolvency law:The Act of 21 March 2021 made several changes to the Belgian insolvency laws rules. The Act introduces a “pre-pack procedure” that offers a legal framework for the negotiation of amicable or collective agreements between the debtor and its creditors under the supervision of a judicial trustee, followed by accelerated judicial reorganisation proceedings. The changes aim at facilitating access of enterprises to judicial reorganisation proceedings and anticipate a more fundamental reform of Belgian insolvency law following the implementation of the EU Restructuring Directive, which is due by the summer of 2022.
New law implements cooperation between EPPO and criminal justice system: A law of 17 February 2021 has implemented the cooperation with the European Public Prosecutor’s Office (EPPO) into the Belgian criminal justice system. The Belgian legislator has opted for a stand-alone prosecution office, meaning that the EP and the EDPs are not integrated in the national prosecution office. Specialised investigating judges (intervening at the pre-trial stage in the investigation) will be appointed across the country to handle EPPO matters in cooperation with the Belgian EP and EDPs. The Belgian EP and EDPs have the same powers as the Procureur du Roi/Procureur des Konings (national public prosecutor).
Reform of the Civil Code – Book 5 (Obligations): The law on obligations is set to change extensively. The reform aims at: (i) codifying existing concepts developed by the case law and the legal authors; (ii) restructuring the various regimes (sources, contracts, obligations); (iii) introducing new concepts such as hardship theory, anticipatory breach of contract, price reduction as a sanction for a (quantitative) partial execution of a contract; and (iv) increasing the creditor’s unilateral activism to declare the contract null, to replace the debtor or to terminate the contract. The reform should be adopted during the first semester of 2022 and will come into force six months after its publication in the Official Gazette.
Economic Crime Levy to be introduced: HMRC has published details on the new Economic Crime (Anti-Money Laundering) Levy. As anticipated, entities that are regulated for anti-money laundering purposes (as defined by The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017) will be in scope, provided their UK revenue (as defined) for the relevant accounting year is at least £10.2m. The levy will be established by the Finance Bill 2021-22 and come into operation for the financial year 1 April - 31 March 2023, with the first payments due in the financial year 1 April 2023 - 31 March 2024. It will be reviewed by the end of 2027.
Law Commission to report back on review of corporate criminal liability: The Law Commission is expected to report back in 2022 following its consultation on the review of corporate criminal liability. Proposals for reform may include the extension of the ”failure to prevent” concept of corporate liability to offences such as fraud, money laundering and market abuse.
Compulsory ADR coming to court?: The Civil Justice Council (CJC) has concluded that the introduction of compulsory alternative dispute resolution (ADR) into the English civil justice system would be lawful and may also be desirable.
Unified Patent Court: Amongst others, Germany has to ratify the Agreement on the Unified Patent Court and deposit the ratification instrument for the unified patent system to enter into force. In 2021, Germany’s Federal Constitutional Court has dismissed the request for interim measures against the ratification of the UPC Agreement. The dismissal enabled Germany to continue the ratification process and the ratification instrument is expected to be deposited soon. The UPC Preparatory Committee estimates that the UPC will commence its operations around mid-2022.
Implementation of the Collective Redress Directive: Until the end of 2022, Germany must implement the EU Directive on representative actions for the protection of the collective interests of consumers, which goes far beyond existing collective redress mechanisms in Germany.
The insolvency regime in Hong Kong: Cross-border insolvency co-operation between Hong Kong and mainland China took a major step forward in 2021 with the two jurisdictions announcing an arrangement concerning mutual recognition of and assistance to insolvency proceedings between their respective courts (the Arrangement). From the perspective of Hong Kong‘s insolvency practitioners, the Arrangement applies where the debtor’s centre of main interests is in Hong Kong and have principal assets, or a place of business or a representative office in Shanghai, Xiamen or Shenzhen. The Hong Kong Court issued its first letter of request to the Shenzhen Intermediate People’s Court shortly afterwards. It has also granted a recognition and assistance order to a Mainland administrator under the Arrangement. In 2022, all eyes will be on the draft Companies (Corporate Rescue) Bill (the Bill), which may be put to the Legislative Council soon.
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Postponement of the transposition of Directive 2019/1023: The European Delegation Law 2019-2020 has mandated the Government to transpose Directive 2019/1023 (“Restructuring Directive”) into Italian law; after the Government asked for a one-year extension of the transposition period, the deadline is now 17 July 2022.
Implementation of the Collective Redress Directive According the draft European Delegation Law 2021, by 25 December 2022 the Italian Government shall transpose Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers and repealing Directive 2009/22/EC.
Reform of on several provisions of the Criminal procedure code: the following amendments are notably contemplated:
- extension of the rules on international territorial jurisdiction of criminal courts;
- extension of the detention period after which a defendant must be brought before the investigating judge in cases for which a preparatory investigation has been opened;
- right of the investigating judge to use audiovisual means of communication in the context of in the context of expert reports;
- introduction of the electronic file in criminal matters;
- order to speak of the different parties during the criminal trial;
- composition of the criminal divisions of the district court;
- extension of the conditions under which recourse to the criminal order (“ordonnances pénales”) may be made.
New legislation will enhance the freezing and confiscation of proceeds of crime: the complete transposition of directive no 2014/42/EU of the European Parliament and of the Council dated 3 April 2014 on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union should be achieved. In addition, deficiencies in the Luxembourg Criminal Code should also be addressed to improve its effectiveness, by enabling the better detection and tracing of property to be frozen and confiscated. Following strong criticism of the status of the authority first contemplated to be in charge of managing and recovering criminal assets, the government has filed several substantial amendments recently following which two different authorities should be created under the respective direction of the direction of magistrates of the public prosecutor's office and the authority of the Minister of Justice.
New PRC Arbitration law to be introduced: In July 2021, the Chinese mainland’s Ministry of Justice proposed amendments to the Arbitration Law of the People’s Republic of China. The key proposals include broadening the scope of disputes for which parties may choose arbitration and allowing the tribunal to rule on its own jurisdiction, which should effectively facilitate the resolution of new types of dispute as well as jurisdiction-related disputes. In addition, foreign arbitral institutions will be allowed to establish “business organisations” in Mainland China to conduct “foreign-related arbitral business” and ad hoc arbitrations will be allowed in foreign-related arbitration, two measures which should make mainland Chinese arbitration more attractive to overseas parties. Lastly, under the proposals, interim relief may be sought from the mainland Chinese courts or the tribunal, moving the Chinese mainland’s system closer to global arbitration centres. The market expects the amended law to be released soon.
Implementation of the EU Collective Redress Directive: The directive must be transposed by 25 December 2022 and come into force on 25 June 2023. The draft legislation consultation closed on 31 May 2021. The Government believes that the Act on collective damages claims, that came into force on 1 January 2020, covers most of the directive's requirements and minor changes are required. A draft bill is expected early 2022.
Implementation of EU Preventive Restructuring Directive: Legislative proposal no. 115/XIV/3, that aims to implement the Directive (EU) 2019/1023, was recently approved by the Parliament.
Several amendments to the Portuguese Insolvency and Company Recovery Code (Código da Insolvência e da Recuperação de Empresas) are expected, including in the legal framework of special revitalization (PER) and insolvency proceedings. Besides the obvious impact that this proposal will have in restructuring and insolvency matters, this proposal will also carry out relevant changes in the Portuguese Companies Code (Código das Sociedades Comerciais), concerning the inapplicability of certain frameworks during any corporate restructuring proceedings provided in the Portuguese Insolvency and Company Recovery Code. According to the proposal, the following provisions shall not apply in the context of such corporate restructuring proceedings: (i) the regime applicable to the subcapitalisation scenario, (ii) the requirements for the share capital increase, and in particular, (iii) for the share capital increase by incorporation of reserves, as well as some provisions regarding the reduction of share capital, mainly the requirements for (iv) the calling of the general assembly, (v) the resolution, and (vi) the protection of creditors regime.
We may expect this new framework to be fully in force in 2022.
Implementation of the EU Collective Redress Directive: Directive (EU) 2020/1828 will represent a significant milestone for the further development of representative actions to protect the collective interests of consumers. This Directive aims to ensure that consumers have access in all Member States to, at least, injunctive and redress measures, and establishes rules to guarantee that the respective proceedings mechanism is efficient and effective, including on cross-border situations. Member States will have to implement the Directive into their national laws by December 2022.
Conditional fee agreements in arbitration and selected court proceedings: The Ministry of Law has proposed a bill to legalise the use of conditional fee agreements between lawyers and clients in arbitration and proceedings before the Singapore International Commercial Court (SICC). Such arrangements are currently prohibited under Singapore law. The bill is expected to be passed in early 2022.
Amendments to the Rules of Court: The amendments, which will come into force in April 2022, aim to streamline the civil justice process significantly. Key changes will include the consolidation of the majority of interlocutory applications into a single application, the narrowing of the scope of document production, and active case management by the courts through case management conferences throughout the life cycle of the case.
Changes to insolvency law: Insolvency law is expected to be amended during 2022 to adapt the Spanish legal system to the EU Restructuring and Second Chance Directive. The amendment, aimed at making it easier to restructure viable businesses and improve insolvency procedures, will bring major changes to pre-insolvency and insolvency rules in the country.
Justice. More efficient procedures: The Spanish government has announced a draft bill aimed at addressing structural weaknesses in the Spanish judicial system, to make it more efficient. Among other aspects, the legislation adds and promotes the use of out of court methods for resolving civil and business disputes, and takes steps to speed up judicial procedures and toward digital transformation of Spain’s justice system. A root-and-branch overhaul of the appeal process to the Supreme Court in civil cases is planned, as well as the introduction of a pilot judgment procedure to deal with mass litigation. We expect this legislation to come into effect in 2022.
Mortgage costs: The CJEU is expected to issue a decision in the next few months on when limitation periods start to run for consumers to demand reimbursement of payments made under invalid terms on mortgage costs. In the case referred for a preliminary ruling, Spain’s Supreme Court considers two options for when time limits start to run: (i) the date of the court judgment finding the term to be invalid, or (ii) the date of the Spanish Supreme Court judgment that set the case-law principle of reimbursement as the effect of invalidity (23 January 2019) or the date of the CJEU judgment in which it held that action for reimbursement could be subject to a time limit (16 July 2020).
Consumer law: Revised consumer legislation has begun its passage through Spain’s parliament, to adapt to Directive 2019/2161. The law applies to new forms of e-commerce and bars certain practices (such as stealth advertising) that are detrimental to consumers. Enforcement powers are also beefed up for Spain’s Ministry for Consumer Affairs.
Collective redress: The Spanish government has launched a public consultation on the implementation of Directive 2020/1828 on representative actions for the protection of the collective interests of consumers. The new law is expected to correct some of the shortcomings in the current rules on collective actions in Spain.
More greenwashing actions expected: 2022 will likely bring more greenwashing claims, both by the government and private plaintiffs, against corporates and investment funds. The SEC is also expected to issue a proposal targeting funds that market themselves as “green” or “sustainable," and could require fund managers to disclose the criteria and underlying data used. The SEC may also take a holistic look at the “Names Rule,” which requires funds to invest at least 80% of their assets in the investment type their names suggest.
New 2020 IBA Rules on the Taking of Evidence in International Arbitration: The 2020 revision to the International Bar Association’s (IBA) influential Rules on the Taking of Evidence in International Arbitration (the Rules), which replace the 2010 edition, was released in February 2021. Notable additions include provisions to accommodate the expanded use of video conference and other communications technology for arbitral hearings and to raise awareness of cybersecurity and data protection issues. Further changes concern the potential exclusion of illegally obtained evidence, replying to objections to document requests and clarification regarding translations of documents.
Online Harms – A comparative analysis: In late 2020, ambitious proposals were announced by the EU, the UK and Ireland seeking to impose greater obligations on organisations to tackle online harms. These proposals follow reforms in Australia, France, Germany and Singapore. In the US, reform is still the subject of much debate. Linklaters have published a new flagship, interactive, online publication called “Online Harms – a comparative analysis”.
Cross-border Guide on the Impact of Insolvency on International Arbitration: Our Global International Arbitration Practice has published the first edition of a brand new comparative review: The Impact of Insolvency on International Arbitration.
Transfer pricing appeal concluded: In May, the High Court refused the Commissioner of Taxation leave to appeal from the Full Federal Court's decision in a significant transfer pricing dispute. The case dealt with a change in contractual and pricing arrangements between Glencore, an owner and operator of an Australi-an mine, and its Swiss parent in relation to the sale of copper concentrate. This decision has significant implications for the interpretation of Australia’s domestic transfer pricing provisions. It is likely to be of interest outside of Australia.
Landmark climate change decision and review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBCA): In Sharma v Minister for the Environment, the Federal Court ruled that the Federal Environment Minister has a duty of care to protect Australian children from climate change harms when exercising powers under the EPBCA. The Minister has appealed. Also, an independent review of the EPBCA identified required key reforms, including new, legally enforceable National Environmental Standards; independent oversight and enforcement; and Indigenous engagement.
Cartel conduct still a key enforcement priority for the ACCC: The ACCC finalised two cases in 2021. In one, the Federal Court ordered three international shipping participants to pay a cumulative penalty of $83.5 million, one of the largest criminal cartel fines awarded in Australia. In another landmark trial, a company, its managing director and a former employee were all acquitted of criminal cartel offences. It was the first Australian case to involve criminal cartel charges against individuals and the first Australian criminal competition law matter to be heard before a jury.
Case law anti-abuse provisions: The past year(s) saw a sharp increase in the number of cases where the Belgian tax authorities invoked the domestic and/or EU anti-abuse provisions to challenge certain tax planning strategies (with varying success). In this context, the Belgian courts have also applied the ‘EU principle of the prohibition abuse’. Hence, the need for a thorough analysis of any tax structuring becomes ever more important.
Increased Belgian antitrust enforcement: The BCA has brought two high-profile cases. In October, the BCA’s Prosecutor General announced it is looking to prosecute, under the full infringement procedure, four cigarette manufacturers for alleged hub-and-spoke future pricing exchanges. The final decision can be expected early 2022. Earlier in the year, the BCA’s Competition College fined cosmetics manufacturer Caudalie €859,310 for unlawfully imposing minimum prices on its retailers and limiting active and passive sales in its selective distribution system of cosmetic products.
Supreme Court rules on parent company liability for environmental damage: In Okpabi v Royal Dutch Shell [2021] UKSC 3, the UK Supreme Court allowed an appeal against a Court of Appeal ruling that a tort claim against a parent company for environmental damage allegedly caused by one of its subsidiaries was not arguable.
Supreme Court rules in SFO’s extra-territorial powers: The Supreme Court has found that the powers of the UK’s Serious Fraud Office under section 2 Criminal Justice Act 1987 do not extend to ordering the production of documents held outside the jurisdiction by foreign parties.
High Court rejects mass action for abuse of process: In Municipo di Marina and others the English High Court rejected mass action against multi-national group BHP PLC and the Australian BHP Ltd for abuse of process. This decision is noteworthy, not only in seeing the dismissal of one of the largest mass tort claims before the English courts, also for the message it carries about the management of such claims which often involve related local proceedings.
Law Commission launches discussion of corporate criminal liability: The Law Commission (“LC”) has published a discussion paper seeking views on whether, and if so, how, the law relating to corporate criminal liability can be improved so that it appropriately captures and punishes criminal offences committed by corporations and their directors or senior management.
New UK sanctions to tackle global corruption: A new sanctions regime targeting international criminals looking to use the UK and its financial system to launder the proceeds of crime was introduced on 26 April 2021. The new regime gives the government the power to exclude from the UK individuals who are or have been involved in serious crime, prevent them from using British banks and subject them to asset freezes.
The “Scope of Duty” principle in English law on professional negligence: In two landmark decisions handed down on the same day (Manchester Building Society v Grant Thornton [2021] UKSC 20 and Khan v Meadows [2021] UKSC 21), the UK Supreme Court refined and restated the principle laid down in South Australia Asset Management Corpn v York Montague Ltd [1997] AC 191 (“SAAMCO”) regarding an adviser’s “scope of duty” in professional negligence claims.
Public policy challenges to arbitration awards in the context of illegality: In Betamax Ltd v State Trading Corporation (Mauritius) [2021] UKPC 14, the Judicial Board of the Privy Council provided important guidance, of relevance to both English arbitration law and Model Law states, on the extent to which, where illegality is alleged, a domestic court may review an arbitral award on public policy grounds.
The Competition Appeal Tribunal approves UK style opt out class actions: Following the Supreme Court’s landmark judgment in Merricks v Mastercard in December 2020, which clarified questions relating to class certification for a collective proceedings order in private actions for damages for breaches of competition law, the Competition Appeal Tribunal has granted the first three such orders first since the collective action regime was introduced in 2015, in the cases of Merricks itself, Le Patourel v BT Group Plc in September 2021 and Gutmann v First MTR South Western Trains & Others, in October 2021.
Read more… here, here and here
Supreme Court allows Google’s appeal in landmark representative action: Mr Lloyd brought the representative action after Google bypassed cookie settings on the Safari browser to track the internet activity of iPhone users without their individual knowledge or consent. This was a breach of privacy laws for which Google was fined by US regulators. The Supreme Court unanimously allowed Google's appeal and refused permission for Mr Lloyd to serve proceedings out of the jurisdiction in respect of his claim for compensation for an alleged breach under the Data Protection Act 1998. The Supreme court held that “damage” under the 1998 Act does not include pure loss of control and a case where individualised assessment of damages is required is not suitable for a representative action.
Paris Court of Appeal sets aside US$90m-arbitral award on evidence of corruption: The Republic of Gabon and the City of Libreville, both represented by Linklaters, sought to set aside of a US$90m-ICC arbitral award rendered in 2018 on the ground that the award gave effect to public contracts tainted by corruption.
Prosecution of a leading group company on the charge of complicity in crimes against humanity: On 7 September 2021, the French Supreme Court rendered its first decision setting the conditions of criminal liability of companies for complicity in crimes against humanity.
Criminal liability of parent companies for acts committed by employees of their subsidiaries: The French Supreme Court has confirmed (16 June 2021) that a parent company may be held criminally liable for an offence committed by its subsidiaries’ employees, even in the absence of a legal link with the individuals for which it is accountable.
Constitutional complaints against German Climate Change Act partially successful: In a landmark decision, the Federal Constitutional Court ruled that the provisions of the German Climate Change Act of 12 December 2019 (Klimaschutzgesetz) are incompatible with fundamental rights insofar as they lack sufficient requirements for further emission reductions from 2031 onwards. Subsequently, in addition to numerous copycat lawsuits to enforce stricter regulations at the level of the federal states, NGOs have also taken companies to German courts.
Reform of the money laundering law: A reform “to strengthen the fight against money laundering by means of criminal law” entered into force on 18 March 2021. The overarching goal of the reform is a considerable tightening of the criminal law on money laundering in Germany and the financial drying up of organised crime.
New Supply Chain Due Diligence Act: Following intense discussions, Germany passed a mandatory Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz) that has the potential to become one of the most significant statutes in that area worldwide.
Changes to patent litigation: Germany passed changes to the Patent Act in June 2021, especially with regard to the claim for an injunction. Such claims will become subject to a proportionality test, thereby bringing German patent law in line with technological and economic changes, as well as international standards.
Facilitation of the bundling of claims: The Federal Court of Justice (Bundesgerichtshof), Germany’s highest civil court, upheld a mass claims collection model that bundled the claims of several parties into one action by way of assignment to a legal services provider (Inkassozession). In doing so, it has removed a number of stumbling blocks for these “claims vehicles”, thereby legitimising an extremely controversial practice which, in the absence of an efficient class action system in Germany, has become very important for the bundled assertion of claims for damages. In parallel, the German legislature also addressed certain aspects of this business practice, albeit mainly with a view to consumer protection.
Federal Court of Justice decides on legal standing in the context of the model declaratory action: Germany does not have a US-style class action system but under the Model Declaratory Action Act, qualified organisations may file a model declaratory action to protect consumer interests. Germany’s highest Civil Court clarified the requirements for qualified claimants under the Model Declaratory Actions Act.
Court of Appeal gives guidance on what constitutes sufficient notification for breach of warranty: In Invest Gain Limited v Novel Good Limited [2021] HKCA 62, Linklaters acted for the purchaser in a shares purchase agreement in a landmark victory in upholding the validity of a notice of breach of warranties that was issued without any particularisation of the alleged breaches. This is the first case in Hong Kong in which the Court of Appeal upheld such a “bald notice” clause in a shares purchase agreement, subsequent to the English authority Forrest v Glasser [2006] 2 Lloyd’s Rep 392.
Hong Kong implements the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong SAR (the “Supplemental Arrangement”) in full: In May 2021, the Arbitration (Amendment) Ordinance 2021 came into force implementing the Supplemental Arrangement in full. All Mainland awards rendered pursuant to the PRC Arbitration Law are now enforceable in Hong Kong. In addition, awards can now be concurrently enforced in both Hong Kong and the Mainland so long as the total amount recovered does not exceed the award amount. This should enhance the prospects of successful enforcement of awards against parties who have assets in both jurisdictions, reinforcing Hong Kong’s status and as an international arbitration hub and a preferred seat of arbitration for resolving China-related disputes.
Judicial reforms to accelerate civil and criminal proceedings: On November 23 the Italian Government approved a law "Delegation of powers to the Government for the efficiency of the civil process and for the revision of the discipline of the alternative dispute resolution instruments and urgent measures for the rationalization of the procedures". The measure provides for a series of mandates to the Government - to be exercised within one year of the law coming into force – and namely: (i) it strengthens the tools for alternative dispute resolution (ADR), which may also be carried out electronically, providing incentives for civil and commercial mediation; (ii) it intervenes on the discipline of arbitration by providing, among other things, for the inclusion of the rules on corporate arbitration in the Italian Code of Civil Procedure; (iii) it makes a number of changes to the civil process of first instance in order to improve the efficiency of civil justice; (iv) it intervenes in the discipline of the appeal process, strengthening the admissibility filter and simplifying the preliminary phase of the procedure; (v) it introduces the possibility, for the judge of merit, to propose the so-called "preliminary reference", i.e. to submit directly to the Court of Cassation the resolution of a matter of mere law, as long as completely new; (vi) it amends the discipline of the enforcement procedures by enhancing the measures of indirect coercion as per art. 614 bis of the Italian Code of Civil Procedure (so-called astreintes).
Court of Cassation rules on the controversial topic of guarantees on ABI standard forms and referred the matter to the Joint Sessions (Sezioni Unite):The Court of Cassation has referred to the Joint Session (Sezioni Unite) the matter of the nullity of personal guarantees (fideiussioni) entered into in the first decade of the 2000s on the basis of standard forms issued by the Italian Banking Association (“ABI”). These standard forms were previously declared by the Bank of Italy (in its former capacity as Italian Antitrust Authority) to be restrictive agreements in breach of antitrust law.
The Court of Venice rules on the Dieselgate class action: The Court of Venice ruled on the Dieselgate case on 7 July 2021. It found the Volkswagen Group and its Italian distributor liable for pecuniary and non-pecuniary damage, following unfair and deceptive commercial practices concerning some car models produced by the company.
Court of appeal rules on interim judge’s jurisdiction in case of arbitration clauses: The Court of Appeal has held that the interim judge (“juge des référés”) could, even where an arbitration clause is applicable, order the payment of a “provision” (that is, an amount of money fixed by the judge as interim relief in consideration of the loss prima facie demonstrated by the claimant), if the urgency of the case is demonstrated.
Reform of the civil procedural code: A law “to strengthen the efficiency of civil and commercial justice” came into force on 16 September 2021. Amongst the numerous amendments, the major ones are: the extension of the Magistrate courts’ jurisdiction (“Tribunal de paix”) to include disputes up to €15,000; the ability to pursue enforcement measures on the basis of a temporary payment order; the extension of the powers of the judge in charge of the case and the limitation of the number of written submissions on procedural nullities’ arguments; the creation of a fast-track procedure (subject to several conditions); the introduction of time limit for experts to hand over their reports; and the obligation for parties to file summary written submissions.
New PRC Anti-foreign Sanctions Law: The Chinese mainland’s legislature passed the Anti-foreign Sanctions Law in June 2021. The new law creates a legal framework to combat foreign sanctions that purport to interfere in China’s internal affairs and activities that may endanger China’s national sovereignty, security and development interests.
New pre-insolvency restructuring procedure for companies in financial distress: On 1 January 2021, the Act on Confirmation of Extrajudicial Restructuring Plans (WHOA) came into force. The WHOA established a new pre-insolvency procedure to restructure the debts of companies in financial distress. It incorporates elements from frequently applied foreign restructuring tools, such as US Chapter 11 proceedings and UK Schemes of Arrangement, into a single framework. The Dutch scheme offers an effective, flexible and widely accessible tool for distressed companies to implement a financial restructuring.
Royal Dutch Shell ordered to reduce carbon emissions: On 26 May 2021, the Hague District Court ordered Royal Dutch Shell to reduce its global carbon emissions by 45% by 2030 compared with 2019 levels. This not only includes the emissions of the Shell group but also its suppliers and customers. The case was brought by the Dutch arm of Friends of the Earth (Milieudefensie) and over 17,000 citizens, among other claimants. The court concluded that Shell’s climate plan is not “concrete” enough and that meeting the goals of the Paris Agreement is not only up to governments.
Oil multinational liable for oil spill damage: The Hague Court of Appeal held Shell Nigeria (SN) liable for damage caused by oil spills near Goi and Oruma (Nigeria) under Nigerian law and ordered SN to pay compensation to the Nigerian claimants (amount to be determined at a later stage). SN had not proven beyond reasonable doubt that third party sabotage had caused the leakage. Hence, the Court found SN liable for the damage on the basis that it had breached its duty of care in its response to the leakages under Nigerian common law. In the Oruma case, the Court found also that SN continuously breached its duty of care by not installing a leak detection system. It ordered SN to install such a system. This order was also imposed on Royal Dutch Shell (RDS). As Nigerian common law does not have precedent cases on parent company liability, English precedents have persuasive authority, according to the Court. The Court concluded from Vedanta v Lungowe [2019] UKSC 20, that a parent company breaches its duty of care towards third parties if its subsidiary committed a tort against these third parties, the parent company knew or should have known this and intervened in the subsidiary’s relevant business operations. RDS knew that SN breached its duty of care by not installing a leak detection system, because from at least 2010 it intervened in internal discussions about this system. However, RDS did not use its authority to force SN to install this system, even though it knew or should have known that its absence could cause severe adverse effects in the case of another leak. This judgment follows the trend that, increasingly, parent companies are being sued in European courts for alleged torts of their overseas subsidiaries.
Approval and Future Implementation of the National Strategy on Anti-Corruption: The Portuguese National Strategy on Anti-Corruption 2020-2024 was approved on 6 April 2021. In order to implement those new measures the Portuguese Government submitted the legislative proposal no. 90/XIV/2, which was recently approved by the Parliament.
This new framework amends several structural laws, such as the Portuguese Criminal Code, Criminal Procedural Code, and the law on criminal liability of public officers. Its key topics include (i) a clear regulation on whistleblowing and its different consequences depending on the stage of the proceedings, and (ii) the responsibility of companies in corruption crimes, in particular, the relevance of adopting and implementing internal compliance programmes.
New Foreign Arbitral Institutions enter the Russian arbitration market: In May 2021, two more foreign arbitral institutions obtained the status of “permanent arbitral institutions” (“PAIs”): the International Court of Arbitration of the International Chamber of Commerce (“ICC”) and the Singapore International Arbitration Centre (“SIAC”). This means that the SIAC and the ICC can now administer international commercial disputes in Russia, including some types of corporate disputes (i.e. disputes in relation to sale-purchase agreements).
Russia’s first anti-suit injunction case: The Russian courts have resolved the first ever anti-suit injunction case in Russia (No. А60-36897/2020) based on the recent amendments to the Russian Arbitrazh (Commercial) Procedure Code (“New Law”). Currently, the Anti-Suit case is being reviewed by the Supreme Court of Russia.
Major reform of Russian Bankruptcy Law: The Russian Parliament is considering a major reform of Russian Bankruptcy Law (the “Draft Bill”). The purpose of the reform is to shift the focus of bankruptcy procedures from liquidation of the debtor’s business to its rehabilitation via restructuring.
Third party funding of domestic arbitration and selected court proceedings: The third-party funding regime, which previously only covered international arbitration and related proceedings, has been expanded to include domestic arbitration, proceedings commenced in the Singapore International Commercial Court (SICC), and related proceedings.
SICC establishes specialist list for technology disputes: The Singapore International Commercial Court has established a new Technology, Infrastructure and Construction (TIC) List to enable the expeditious resolution of technically complex disputes. Cases placed on the list will benefit from enhanced case management features to expedite resolution, and will be presided over by specialist Judges and Registrars.
Arbitral tribunals have a duty to consider corruption: The Singapore courts have ruled that Tribunals must take a pro-active role in considering evidence of corruption, and that parties cannot preclude the Tribunal from doing so by mutual agreement (Lao Holdings NV v Government of the Lao People’s Democratic Republic [2021] SGHC(I) 10).
Covid-19: As the year has progressed, the Spanish government has taken new measures and extended some of those already in place to tackle the Covid-19 crisis. The steps, mostly of a social and economic nature, have been focused on financial support for businesses and the self-employed, protecting the most vulnerable members of society and job retention. From a Dispute Resolution perspective (i) preference has been given for court proceedings to be held remotely; and (ii) evictions of vulnerable tenants with no alternative accommodation are stayed (and will be until 28 February 2022). In addition, until 31 December 2021 debtors that are insolvent will not have the duty to file for insolvency proceedings.
SCC Express: The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has introduced a new dispute resolution mechanism, namely the SCC Rules for Express Dispute Assessment. SCC Express is a voluntary confidential procedure where a neutral expert will make a non-binding legal assessment (alternatively in the form of a decision if the parties have agreed to make the findings binding) of the dispute in three weeks for a fixed fee. SCC Express is designed for parties who would like to resolve a dispute quickly or otherwise do not wish for a full-length arbitration.
Dubai abolishes DIFC-LCIA Arbitration Center: Dubai’s Decree No 34 of 2021, effective on 20 September 2021, abolished the DIFC-LCIA Arbitration Centre and the Emirates Maritime Arbitration Centre (EMAC) in an apparent effort to concentrate institutional arbitration in a to be revamped Dubai International Arbitration Centre (DIAC), Dubai’s onshore arbitration institution. The status of the Dubai International Financial Centre (DIFC) itself, and of its courts, is not affected by the new Decree.
Virginia’s new data privacy legislation: In March 2021, Virginia passed the Virginia Consumer Data Protection Act (“VDCPA”), making it the second U.S. state to enact comprehensive privacy legislation. Virginia’s legislation is notable as it signifies a growing trend of U.S. states taking the lead to enact privacy legislation, following California’s pioneering Consumer Privacy Act (“CCPA”).
SEC Creates Enforcement Task Force to Assess ESG and Climate: The Securities and Exchange Commission (“SEC”) recently announced the creation of a Climate and ESG Task Force. The task force will focus on identifying material gaps, misstatements, and analyzing disclosure and compliance issues related to climate risks and investment advisers and funds’ ESG strategies respectively. The creation of the task force is yet another indication that the SEC is prioritizing ESG and climate-related issues.
The Biden Administration issued an Executive Order on improving the nation’s cybersecurity: In May 2021, in wake of several recent high-profile cyberattacks in both the US public and private sectors, the Biden administration issued an “Executive Order on Improving the Nation’s Cybersecurity” (“Executive Order” or “Order”). The Executive Order outlines requirements to strengthen the US federal government’s efforts in “the prevention, detection, assessment, and remediation” of such attacks. In addition to requiring additional security measures across federal agencies, the Order requires federal contractors that provide technology to the federal government to promptly share information about cyberattacks within 72 hours and establishes security requirements for commercial software products purchased by the federal government.
The Biden Administration issued its first National Security Study Memorandum: In June 2021, President Biden issued his first National Security Study Memorandum (“NSSM”), highlighting global corruption as a serious threat to national security. The NSSM, which builds on several other recent anti-corruption efforts of the Biden Administration, instructs federal agencies to develop a unified strategy “to promote good governance; bring transparency to the US and global financial systems; prevent and combat corruption at home and abroad; and make it increasingly difficult for corrupt actors to shield their activities.”
Recent US regulatory actions on cybersecurity and governance: In September, the US Office of the Comptroller of the Currency, an independent bureau of the US Treasury Department, issued a cease-and-desist order against a national banking association regarding technology and operational risk management. Although the order is directed towards the national banking association in question, it sets the bar for reasonable practices any company can adopt to build its cybersecurity practice.
SEC issues “sample letter” on climate change disclosures: In September 2021, the SEC issued a “sample letter” providing guidance on the climate-related disclosures companies should currently be making in their SEC filings. The SEC, which has yet to release its climate change disclosure proposal, largely reiterates the SEC’s 2010 climate change guidance in the letter. The sample letter collates comments that the SEC staff may issue to companies during the SEC filing review process regarding their climate-related disclosure.
SEC Commission approves Nasdaq’s new rules regarding diversity and disclosure: In August 2021, a 3-2 divided US SEC approved Nasdaq’s new listing rules regarding board diversity and disclosure. Under Rule 5606, companies listed on Nasdaq’s US Exchange must annually disclose aggregated statistical information about the board’s voluntary self-identified gender and racial characteristics and LGBTQ+ status in the format set forth in Nasdaq’s Board Diversity Matrix. Further, under Rule 5605(f), companies must have, or explain why they do not have, two self-identified diverse members on its board of directors, of which at least one must self-identify as a female and at least one must self-identify as an unrepresented minority and/or LGBTQ+.
DOJ announces tougher enforcement approach: Deputy Attorney General Lisa Monaco of the US DOJ recently announced key changes in the DOJ’s approach to corporate crime, putting companies on notice of the Biden Administration’s stricter attitude to enforcing criminal laws. Monaco announced three changes, including (1) restoring prior requirements to gain cooperation credit; (2) consideration of a company’s full civil, criminal, and regulatory record; and (3) greater use of independent corporate monitors.
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