By Justin Jütte
In Bolagsupplysningen OÜ, Ingrid Ilsjan v Svensk Handel AB (BOÜ/Ilsjan) the Court of Justice of the European Union (ECJ) ruled that a legal person can bring an action for damages and request the correction and removal of allegedly defamatory information before the courts of the Member State where that person has its centre of interests. The ECJ, however, also ruled that an action for removal of certain incorrect information and removal of comments by way of an injunction can, cannot be initiated in every Member State where the website was accessible. With this ruling the Court implicitly confirms its jurisprudence on the special rule of jurisdiction under Article 7(2) of Regulation No 1215/2012 (Brussels I Regulation (recast)) for online infringements of personality rights. Unfortunately, it did not address the changes AG Bobek suggested in this respect in his Opinion (discussed here).
The facts and the questions have already been extensively described in the post on the AG’s Opinion. Therefore they are only briefly summarized in this post.
The claimants in the proceedings underlying this preliminary reference are a company registered in Estonia (BOÜ) and one of its employees (Ms Ilsjan). The Respondent operates a website on which it had posted allegedly incorrect information which had provoked comments by users. The Claimants demanded that the information be rectified, the comments deleted and that the respondent pay compensation to BOÜ and to Ms Ilsjan. In first instance the Estonian court rejected jurisdiction under Article 7(2) of the Brussels I Regulation. The Appeals Court upheld this verdict. The Estonian courts maintained that no damage had occurred in Estonia because the website was published only in Sweden and the turnover of BoÜ was mainly in Swedish krona.
In this context the Estonian Riiggikohus (Supreme Court) referred three questions to the ECJ.
- Can a person who has alleged online infringements of personality rights bring an action for correction and removal of information in any Member State where the website concerned was accessible?
- Can a legal person sue for the entire harm caused by such online infringements on a website in the country where that person has its centre of interest?
- Where is the centre of interest for legal persons?
Opinion of Advocate General Bobek
AG Bobek commenced his opinion with a discussion of the question whether legal persons have personality rights (which he suggested they do), a question that the Court completely ignored. More interesting, however, was his re-assessment of the Court’s jurisprudence on the place of jurisdiction for infringements of personality rights. AG Bobek suggested reducing the approach developed in Shevill and eDate/Martinez for online defamation to two places: the centre of interest of the injured party, and the place where the publisher of infringing comments is established. The AG suggested abandoning the so-called ‘mosaic’ approach, under which a claimant was also entitled to sue the alleged infringer for damages in all Member States in which damage has occurred, but only for the respective damage that occurred in that jurisdiction. For injunctions, the opinion suggested that although they are indivisible by nature, even a national court which is only competent to rule on part of the damages that have occurred would still be competent to rule on all other remedies available under national law (including a request to correct false information).
The Court’s Analysis
First, the Court addresses the third and second question and then moves on to answer the first question.
Jurisdiction for personality infringement of legal persons
The Court begins its assessment of the two questions by stressing the rationale of Article 7(2) of the Brussels I Regulation, which provides that in matters relating to tort the respondent to an action may be sued in the courts of a Member State where the harmful event occurred or may occur. This rule supplements the general rule of jurisdiction of the Regulation that a respondent may be sued in the courts of the Member State where he or she is domiciled. Article 7(2) is based on the consideration that courts with a particularly close connecting factor should also have jurisdiction over a dispute. The Court also makes reference to Recital 16 of the Regulation which underlines that the special rules of jurisdiction based on a close connection between the court and the dispute are meant to safeguard legal certainty as to the place of jurisdiction and to avoid that the respondent is exposed to a jurisdictional venue that he or she could not have reasonably foreseen. Finally, the court also underlined the distinction already made in Bier v Mines de potasse d’Alsace that the place where the harmful event occurs covers the place where the event giving rise to the damage takes place and the place where the harm is suffered.
The latter is the criterion in question in BoÜ/Ilsjan as both claimants allege that the non-material damage caused by defamatory information occurred in Estonia. The Court already ruled in Shevill that the place where the harm has occurred are those Member States where the publication was distributed (para. 31). For online publications, a victim of a defamatory publication can sue before the courts of the Member State in which that person has his or her centre of interests. This is the place, so the Court argues, where “the damage caused by online material occurs most significantly” (para. 33). This particular forum ensures that the local courts can best assess the damage to the rights of that person and the rule guarantees a high capacity to predict the courts that enjoy jurisdiction (paras 34-35).
The Court then goes on to clarify that the special rule of jurisdiction of Article 7(2) does not have the purpose to protect the weaker party, as opposed to the rules in Sections 3-5 of Chapter II of the Regulation. Instead, they serve to enable the sound administration of justice, and for that purpose the courts which are best able to hear and rule upon the dispute are those where the claimant has its centre of interest and suffers the most damage (paras 38-39).
The location of the centre of interests
Having re-established that the centre of interests is a possible place of jurisdiction, without addressing the other potential places of jurisdiction (namely the domicile of the defendant and all other Member States where the infringing material was accessible – admittedly, this was not the subject of the preliminary reference), the Court addresses the question of where the centre of interest of a legal person is located.
For natural persons, the centre of interest is, as a general rule, the Member States of his or her habitual residence. However, other close links, such as professional activities in another Member State may warrant a derogation from that general rule (para. 40).
Pursuant to the Court, a legal person has its centre of interests at the “place where its commercial reputation is most firmly established” which must be “determined by reference to the place where it carries out the main part of its economic activities.” This can be the place of the legal person’s registered office, but this is not a conclusive criterion (para 40). As with natural persons, other factors can justify a deviation from this general assumption. This is, for example, the case when a company “carries out the main part of its activities” in a Member State other than that of its registered office. In BOÜ/Ilsjan, this Member State would be Sweden, where BOÜ carries out its main business and from where the site that featured the allegedly incorrect information and defamatory content is operated. The Court also considered that the website was solely available in Sweden and therefore almost exclusively linguistically accessible to persons living in Sweden (para. 42).
Concluding on the first two questions, the Court rules that a legal person can bring claims against an alleged perpetrator for the correction and removal of defamatory content and compensation for damages in the Member State where that person has its centre of interests. This is the place where it carries out the main part of its activities and this does not necessarily need to be the place where the legal person has its registered office (para. 44).
With its first question, the referring court asks whether the victim of defamatory remarks can bring an action for rectification and removal of information in any Member State where that information was accessible. In eDate/Martinez the Court had also created the option that a victim of online defamation could sue the alleged perpetrator for damages in all Member States where the website was accessible for the respective damage suffered in each Member State. AG Bobek had used this question to challenge this head of jurisdiction on a principal basis (AG Opinion, paras 73-90). The Court did not address this systematic critique but ruled, in one brief paragraph, that “in the light of the ubiquitous nature of the information and content placed online” an action for removal and/or rectification being “a single and indivisible application” must be made before a court which has the competence to rule on the entirety of an action (para. 48).
After the Opinion of AG Bobek, the EJC’s ruling is, in a sense, anticlimactic. It can be criticized for lacking an argument when it could have reasonably made one. Whereas it is fully justified to say that the Advocate General went slightly beyond the scope of the questions that were asked, the Court missed the chance to alter its case law on jurisdiction for infringements of personality rights. Abandoning the ‘mosaic’ approach to limit the number of potential jurisdictions would more likely reflect the rationale of the special rule of jurisdiction under Article 7(2). Although the Court does not expressly confirm its jurisprudence in Shevill and eDate/Martinez, it does little to dispel the notion that it will maintain it in the future. It merely refuses to extend the ‘mosaic’ approach to actions for correction and removal of information. This makes absolute sense, as the publisher of a website can only remove the information in one country; a court completely unrelated to the place where the infringing content or information was uploaded or created – in which it was merely accessible – would not be in a better position than the court where the publisher is located or where the victim’s centre of interest is located. Only these courts have a reasonably close connection to the case. In the interest of the sound administration of justice these courts are best positioned to issue such an order and also to ensure its effective enforcement. In this respect, the Court agrees with AG Bobek; both make their arguments, it seems, in favour of a more effective administration of justice – they just take different routes.
The route chosen by the Advocate General is, for this author, slightly more convincing because he links the effective ordering of injunctions to an effective place of jurisdiction. Limiting the potential fora for damages and for injunctions to two goes a long way for ensuring the foreseeability of competent courts. However, limiting the place of jurisdiction for injunctions to only two might create even bigger problems. What would happen, for example, if a respondent chose to sue for damages under the ‘mosaic’ approach in all Member States where a website containing information allegedly infringing personality rights was accessible? Would she then still have to request injunctions only before the courts of her centre of interests and the establishment of the publisher, although the claimant only asks for partial damages in these jurisdictions? This would create the situation that one court, e.g. at the centre of interest of the injured party, would rule on partial damages and on injunctions, whereas another court, where the website was merely accessible, would also decide on parts of the damages but is barred from ordering injunctions. The former would only retain jurisdiction based on a hypothetical scenario.
The reasoning of the Court is not convincing in relation to the first question, which is mainly due to the fact that the court does not provide arguments for its finding. Questions two and three, however, provide practical and reasonable solutions for companies that have suffered reputational damage. Unfortunately, it might be more important and pressing for companies to order injunctions quickly. Therefore, a wider choice of possible jurisdictions might have served their interests better, but as the Court argued, Article 7(2) serves to make potential jurisdiction foreseeable. Whether this aim is achieved by maintaining the ‘mosaic’ approach for damages and a separate regime for injunctions is debatable.