Monthly Archives

July 2013

seminar_update

A District Court in Holland ‘sets aside’ the immunity of the European Patent Organisation

By | IAL, International Administrative Law, News | No Comments

An international civil servant has successfully begun a claim in the national courts in Holland after exposing the lack of access to justice provided by the European Patent Office and the International Labour Organisation Administrative Tribunal (ILOAT) in hearing his dispute.

In a ground-breaking and landmark ruling given on 16 July 2013 the District Court of The Hague (“the Court”) rejected an application by the European Patent Organisation (“EPO”) inviting the Court to rule that the Court was not competent and lacked jurisdiction to hear a complaint from a staff member because of the immunity from legal suit enjoyed by the International Organisation. The Court considered that in this ‘exceptional case’ the EPO’s immunity from the jurisdiction of the national courts could not be relied upon as it was disproportionate and therefore liable to be overruled by the Court.

The Court decided that the decision by the President of the EPO on the appeal by the staff member against the conversion of his disability pension into a disability allowance was a judgment by a non-independent court. Furthermore, whilst the right to appeal against the President’s decision to the ILOAT was to an independent and impartial tribunal the delay of 15 years waiting for the ILOAT to hear the case would deprive [the staff member] of a fair process and breached the employee’s human rights to have his civil rights determined by an independent court within a reasonable time.

The Court was not deterred by the fact that the EPO is not itself a party to the European Convention on Human Rights in reaching its decision, but referred to the fact that the EPO Service Regulations, which formed part of the staff members contract of employment, expressly applied human rights.

National courts have historically been reluctant to allow employment disputes by staff members against International Organisations such as the EPO to be brought before them and have generally upheld the immunity from suit that the organisations enjoy. This decision marks a welcome change in approach since no court could reasonably conclude that a delay of 15 years in hearing a case represents a system of justice let alone a trial within a reasonable time. Perhaps the most lamentable observation in the judgement was that there was no suggestion being put forward that the ILOAT was taking any measures to remedy these long waiting times for EPO employees. Regrettably it is considered that far from being an ‘exceptional case’ the lack of fairness and delay experienced by this staff member is one that is only too likely to be faced by many other staff members at the EPO and quite possibly some of the other 41,000 staff members working at other International Organisations who are compelled in similar circumstances to appeal to the ILOAT as well.

This case typifies the worst of the difficulties facing International Civil Servants seeking to air a grievance at the treatment they have received at work. In order to improve the standard of the internal justice systems of the many International Organisation Neil Macaulay and Lee Marler have founded the International Administrative Law Centre of Excellence. All those involved in internal justice systems who have an interest in finding ways to bring the systems up to date and compliant with modern human rights standards are welcome to join the Centre of Excellence and contribute to bringing about a new era of effective dispute resolution in International Organisations around the globe.

 

Read judgment

[seal] DISTRICT OF THE HAGUE
DISTRICT OF THE HAGUE SECTION

DISTRICT COURT OF THE HAGUE
District of The Hague Section

Case no.: 1223887/12-31860
16 July 2013

Judgment in respect of jurisdiction in the matter of:

The legal entity according to international public law the EUROPEAN PATENT
ORGANISATION, established in Munich (Germany), as well as Rijswijk (South Holland),
claimant in the procedural matter respondent in the principal proceedings, hereafter referred to as “EPO”, authorised representative: Mr G.R. den Dekker

and

[details omitted] respondent in the procedural matter
claimant in the principal proceedings, hereafter referred as [details omitted] authorised representative: [details omitted]

Proceedings

The District Court has considered the following documents:

  •   Summons dated 3 December 2012;
  •   Motion for the Dutch court to decline jurisdiction and transfer the case
  •   Response to the motion
  •   Evidence submitted.

Finally, a judgment was issued on the matter.

Facts
[details omitted] was appointed to the EPO on 1 January 1988 and was last employed as a researcher for the European Patent Office. [details omitted] is in a dispute with the EPO pertaining to amendments to his pension scheme.

The European Patent Office is a body of the EPO and is established, amongst others, in Rijswijk where [details omitted] performed his duties.

The Service Regulations for Permanent Employees – hereafter referred to as the Service Regulations – are applicable to [details omitted]’s employment contract. The Service Regulations provides, amongst others, for an incapacity for work scheme in the form of a disability pension. The following statement from the Board of the EPO, submitted at the meeting of 13 to 15 December 1994, applicable:

“The Administrative Council and the President of the Office note that when reviewing the law applied to EPO staff the ILO Tribunal considers not only the legal provisions in force at the European Patent Organisation but also general legal principles, including human rights.

The Administrative Council also noted with approval the President’s declaration that the Office adheres to the said legal provisions and principles.”

[details omitted] received a disability pension from 2003 due to his incapacity to work. [details omitted] has since left the employment of the EPO and has received financial compensation from [details omitted]. Furthermore, [details omitted] is also receiving a disability allowance of [details omitted] per month.

The European Patents Convention of 5 October 1973 and the European Patent Organisation’s Protocol on Privileges and Immunities of 5 October 1973 are applicable to the EPO, amongst others.

On the grounds of art. 13 of the Convention (former) employees of the EPO may submit disputes with the EPO to the Administrative Tribunal of the International Labour Organisation (hereafter referred to as: ILOAT). This appeal is only admissible when the interested party has exhausted all means of redress available to him pursuant to the Service Regulations, the Pension Scheme or the employment terms and conditions for other personnel.

[details omitted] submitted an appeal against the EPO decision to convert his disability pension into a disability allowance by email on 11 March 2008. The Internal Appeals Committee (hereafter referred to as the IAC) unanimously advised the President of the EPO on 9 August 2011 to allow the appeal virtually in full. Subsequently the President of the EPO, Mrs [details omitted] did not adopt a significant proportion of the advice of the IAC. On 27 February 2012 [details omitted] submitted an appeal against this decision to the ILOAT. On 15 June 2012 [details omitted] wrote to the registrar of the ILOAT by email asking how long the ILOAT procedure would take. In response to this email, the registrar to the ILOAT informed [details omitted] by email on 2 July 2012:

“Dear Mr [details omitted]

Complaint No. 3

I have your email of 15 June.
The duration of the exchange of written pleadings is, as usually, about one year.
However, as you are well aware we are facing a situation where out of 425 pending cases, 150 concerns the European Patent Organisation, THAT IS 35.4%.  This is obviously disproportionate in view of the fact that a total of 48,483 staff members have access to our Tribunal and the EPO has “only” 6,847 staff members.  In addition, of these 425 cases we have at the moment, 209 are ready to be dealt with by the Tribunal of which 101 are against the EPO, that is 48,3%. Considering that the Tribunal examines around 50 cases per session, including four or five against the EPO, you may have a correct idea of the conclusions one can draw from these facts.

Yours sincerely,
[details omitted] Registrar”

The ILOAT convenes two sessions per year, and therefore should the situation not change it would take around 15 years before [details omitted]’s case was heard by the ILOAT.

Application in this matter

The EPO’s application is, in brief, for the District Court of Hague to rule that it is not competent to hear this dispute, as it has no jurisdiction in this matter, given that the EPO has immunity and, on a subsidiary point, given the contents and scope of the claims by [details omitted], including, amongst others, the costs of the proceedings to be awarded against [details omitted].

The EPO is submitting the following as a basis for this application. The EPO is an intergovernmental organisation with 38 member states enjoying immunity on the grounds of the aforementioned Privileges and Immunities Protocol associated with the 1973 European Patents Convention. The EPO benefits from this immunity in the context of its official activities. According to this Protocol official activities are taken to refer, amongst others, to those activities which are strictly necessary for the administrative and technical implementation of its tasks as defined in the Convention. The work performed by [details omitted], carried out at the time for the EPO, fall under this. There is a special procedure for resolving disputes between the EPO and its (former) employees. An appeal against a disputed decision by the EPO should first be submitted to the President; should the latter determine there are no grounds for the dispute then the IAC shall be asked for advice. The President shall issue a decision with grounds after the IAC advice. An appeal against this may be submitted to the ILOAT. This course of proceedings is sufficient to be referred to as a fair process in the sense of art. 6 of the ECHR, to which the EPO is, furthermore, not a party. In addition to this the ILOAT is entitled to alter the time for the proceedings.

[details omitted] in this matter

[details omitted] submitted with grounds against [details omitted] that this, in brief, the 15 year procedural waiting time amounted to him being deprived of a fair process within a reasonable period by an independent and impartial court as granted to all under art. 6 of the ECHR. This therefore overrules the EPO’s immunity and this district court is therefore competent to hear this case.

Assessment of the matter

Given that the decision of the President of the EPO on the appeal of [details omitted] against the conversion of his disability pension into a disability allowance is a judgment by a non-independent court and that the judgment by the ILOAT on appeal is, in itself, both independent and impartial, yet were this to take 15 years it would deprive [details omitted] of a fair process. This would lead to the EPO’s immunity becoming disproportional and may therefore be overruled. Taken together this means that in this exceptional case that the court, which under normal circumstances would hear disputes pertaining to pension regulations, does have jurisdiction. Given that the EPO is also established in Rijswijk this district court is a competent court. This does not detract from the fact that this may create the possibility of the District Court of The Hague influencing the official activities of the EPO. This is, after all, the consequence of the immunity – which the EPO would in principal be awarded in these types of dispute – being set aside, but is something the EPO shall have to bear in this exceptional case.

Nor does this detract from the fact that the EPO is not a party to the ECHR; this matter is concerned with determining an individual’s civil rights by an independent court within a

reasonable time period and as such is a human right protected by the ECHR and – according to the aforementioned statement with the EPO’s Service Regulations – human rights are explicitly applicable to this matter.

Finally, it has neither been submitted nor has it become evident that the ILOAT is taking measures in order to shorten the waiting time for hearings involving employees of the EPO, and therefore [details omitted] may reasonably assume that the period taken to hear his case will be too long.

Taken together this leads to the conclusion that the submission in the procedural matter should be rejected. Having found against the EPO the latter shall be ordered to pay the costs of proceedings in this case.

Judgment

The District Court,

Rejects the submission on the procedural matter;

Orders that this judgment may be submitted to appeal;

Orders the EPO to pay the cost of proceedings incurred by [details omitted] estimated to amount to €500.00 in payment to his authorised representative;

Refers the principal proceedings to the case-list hearing of 13 August 2013 to hear the counter submission;

Reserves judgment on the other matters.

This judgment was issued by Mr R.J. ter Kuile, district court judge, and read out at a public hearing on 16 July 2013 in the presence of the clerk of the court.

[signatures]

Copy certified by the clerk of the district court for the district of The Hague [initials]

 

 

 

Self-reporting-corrupt-misconduct

Self-reporting corrupt misconduct – honesty is the best policy

By | Development Banks, Multilateral Development Banks, News, World Bank | No Comments

In its published announcement dated 24 July 2013 on the sanctioning of Sinclair Knight Merz Pty (SKM) the World Bank’s Integrity Vice Presidency has set what can be viewed as a benchmark new level of reduced punishment for those companies which uncover corruption within the business and then voluntarily report the matter to the Bank.

In this case the company avoided an immediate debarment from future Bank-financed projects after reporting ‘corrupt misconduct’ and ‘illegitimate payments’ by key individuals and senior managers at SKM. Instead the company and its parent companies Sinclair Knight Merz Management Pty Ltd and Sinclair Knight Merz Holdings Ltd have negotiated an agreement with INT which includes a conditional non-debarment for a period of two and a half years. This means the company can continue to bid for Bank financed projects and the debarment only comes into operation if the company fails to fulfil its obligations to improve its compliance program and cooperate with INT.

The World Bank announcement makes it clear that the Bank has reflected the high levels of voluntary cooperation by SKM with the imposition of a conditional non-debarment and is sending out a clear signal for other companies to self-report by this example. There is also an implied warning to those companies that have engaged in business with SKM that they may fall under the microscope because the cooperation received from SKM has enabled the Bank to ‘identify other potential targets for investigation’.

The Vice President of Integrity stated: “The World Bank took into account SKM’s cooperation and willingness to provide evidence in support of further INT investigations. The outcome of this case introduces a new standard of compliance by a company that opted for self-policing in response to the discovery of misconduct in its own ranks. By promptly self-reporting, committing to corporate transparency and their enforcement of disciplinary action against those responsible, SKM has practically demonstrated how to confront wrongdoing and commit to doing business with integrity.”

This case clearly illustrates the benefits of conducting a ‘thorough internal investigation’ when companies discover corrupt or fraudulent misconduct internally so that an informed decision can then be made on whether or not self-reporting is necessary and in the best interests of the company.

If you are a senior executive concerned that there may be matters that have occurred in your company that should be reported to the World Bank or any of the other Multi-Lateral Development Banks then contact Bretton Woods Law’s Neil Macaulay or Lee Marler for a confidential and legally privileged consultation to examine how best to protect the long term interests of your company.

To read the full press release click here.