KMG International NV v Chen & Anor [2019] EWHC 2389 (Comm) (13 September 2019)

KMG International NV v Chen & Anor [2019] EWHC 2389 (Comm) (13 September 2019)

The rule against reflective loss is substantive, not procedural, for the purposes of Rome II. It falls within Article 15, particularly Article 15(f), and is not excluded by Article 1(3). Therefore, Dutch law governs the recoverability of the claim, and the English reflective loss rule does not bar the Dutch law claim. The rule is not a mandatory overriding rule or public policy exception under Rome II.

Citation
[2019] EWHC 2389 (Comm)
Parties
Claimant: KMG International NV; Defendant: Melanie Anne Chen; Defendant: Chipper Management Limited
Jurisdiction
England and Wales
Judgment Date
13 September 2019
Procedural Posture
Commercial Court Claim (tort, Cross Border) / Interlocutory Application (strike Out and Summary Judgment)
Outcome
Defendants' application to strike out or for summary judgment on the Dutch law claim dismissed.
Legal Topics
Reflective Loss, Rome II Regulation, Substance Vs Procedure, Cross Border Tort Claims
Private International Law Tort Law Company Law Reflective Loss Rome II Regulation Substance Vs Procedure Cross Border Tort Claims

Case Brief

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Parties

KMG International NV

Claimant

Melanie Anne Chen

Defendant

Chipper Management Limited

Defendant

Procedural Posture

Commercial Court Claim (tort, Cross Border) / Interlocutory Application (strike Out and Summary Judgment)

Legal Issues

  1. 1 Whether the English law rule against reflective loss applies to a Dutch law tort claim under Rome II Regulation
  2. 2 Whether the reflective loss rule is substantive or procedural for the purposes of Rome II
  3. 3 Whether the reflective loss rule is a mandatory overriding rule or public policy exception under Rome II

Ratio Decidendi

The rule against reflective loss is substantive, not procedural, for the purposes of Rome II. It falls within Article 15, particularly Article 15(f), and is not excluded by Article 1(3). Therefore, Dutch law governs the recoverability of the claim, and the English reflective loss rule does not bar the Dutch law claim. The rule is not a mandatory overriding rule or public policy exception under Rome II.

Court Disposition

Defendants' application to strike out or for summary judgment on the Dutch law claim dismissed.

Orders

  • The Dutch law claim is not struck out and may proceed to trial.
  • Consideration of the English law claim is adjourned pending the Supreme Court decision on reflective loss.