December 10, 2024
Rome II locus damni for misrepresentation. The High Court in Jaffe v Greybull. – gavc law – geert van calster

Rome II locus damni for misrepresentation. The High Court in Jaffe v Greybull. – gavc law – geert van calster

In Jaffe & Anor Greybull Capital LLP & Ors [2024] EWHC 2534 (Comm) one of the issues was the applicable law for misrepresentation about the source of funds being injected into a company. Cockerill J, applying Article 4 Rome II and referring to earlier judgments all reviewed on the blog, in the end [300] holds for German law:

In terms of direct damage, damage occurred when those misrepresentations took effect in the minds of those attending the meeting in Germany and were subsequently relied upon. The alleged key decisions were said to have been taken at the November meeting of Wirecard’s Management Board; and this seems to have taken place in Germany. The direct links to Germany are simply much stronger than any links to this jurisdiction.

This echoes Abu Dhabi Commercial Bank v Shetty’s ‘in the case of a misrepresentation or fraud, the locus damni is held to be the place where that misrepresentation is acted upon’ (not a direct quote, rather my summary at the time). I believe this is the right conclusion. It is a stronger justification than [299]’s inclusion of the place where the loss is ultimately held, for instance:

Overall – and despite the clear and careful arguments advanced for the Claimants, I conclude that the preferable analysis is that the applicable law is German Law. There are many immediate factors linking the case to Germany both in terms of direction, causation and ultimate feeling of the loss. By contrast Wirecard is forced to rely on the effects of Side Letter 7. But Side Letter 7 did not immediately cause Wirecard damage and would not inevitably do so. It took a further contingency (administration) and the application of the relevant rules to manifest the chargebacks. The links to England are too derivative (described by the Claimants in closing as manifesting at “the fourth and fifth stages” of the analysis) and too poorly evidenced.

Geert.

https://x.com/GAVClaw/status/1844671980462575965

 

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