The wrong reading

The ECJ recently had to consider the scope of EU provisions which are designed to deprive terrorists of funds in Case C-340/08 M (Grand Chamber, 29 April 2010).

Regulation 881/2002 requires that neither 'funds' nor 'economic resources' be made available 'directly or indirectly' to persons or groups designated as terrorist organisations.

The question in the case concerned social security payments which were made to the spouse of designated persons. Were those payments caught on the grounds that, by paying money to the family of a person designated as a terrorist, 'funds' or 'economic resources' would thereby be indirectly made available to the designated person? The UK Treasury thought so, and imposed various requirements designed to supervise the way money was spent in the household to ensure that the designated person did not indirectly benefit.

That approach was challenged, and the House of Lords referred the case to the ECJ while making it clear that it considered the Treasury's approach oppressive and intrusive.

The ECJ held that the Treasury's interpretation was unduly restrictive. It examined various different language versions of the regulation, and found them remarkably divergent. It therefore considered, in detail, the purpose of the measure '“ which it found was to 'stop [designated] persons having access to economic or financial resources, whatever their nature, that they could use to support their terrorist activities'. It was, as the ECJ remarked, 'not disputed' that funds used to meet basic household expenditure were not capable of being diverted to support terrorism; there was no suggestion that they were being misappropriated for that purpose. The fact that a terrorist might derive some indirect benefit from being a member of the household was not, in the ECJ's view, within the mischief that the legislation had been designed to prevent.

The judgment is an impressive one '“ not so much in terms of the result it reaches (though that was consistent with the House of Lords' view of the matter, and surely accords with common sense) but also because of the detail of its reasoning. It is good to see the ECJ grappling in a detailed and scholarly fashion with the text, and presenting a sustained and detailed argument for the result it reaches.

The Judgments Regulation and other conventions

Article 71 of the Judgments Regulation (44/2001) provides that the regulation 'shall not affect any conventions to which the member states are parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments'.

In Case C-533/08 TNT Express (Grand Chamber, 4 May 2010) the ECJ was called on to consider how this applied to the jurisdictional rules under article 31 of the Convention on the Contract for the International Carriage of Goods by Road (CMR).

The case arose out of a 'race to judgment' following the loss of goods being carried from the Netherlands to Germany. The first proceedings were brought by the carrier in the Netherlands, seeking a declaration of limitation. The next proceedings were brought in Germany, by the insurer of the goods. An application to dismiss those on the grounds that the Netherlands courts were first seised was dismissed. Meanwhile, back in the Netherlands, the carrier had lost its action, but appealed.The question which then arose was: should the Netherlands appeal court recognise the German judgment as decisive? The carrier argued that it should not, because article 31(2) of the CMR provided that, once an action was pending in the Netherlands, no action should have been brought in Germany. It was, in short, the typical sort of muddle which parallel proceedings create.