Droit international général

Professor Zhengxin Huo, China University of Political Science and Law, has provided an interesting note entitled “A Battle over the Chinese Culture Treasure Lost Overseas–to be decided by Private International Law?”. It comments on the forthcoming auction of “Tiger Ying”, an ancient water vessel, which is believed to have been taken during the looting of Beijing’s Old Summer Palace by the British and French forces in 1860, at the Canterbury Auction Galleries in Kent on 10 and 11 April, and the pending proceedings in Amsterdam and Sanming (China) brought by Chinese villagers against a Dutch collector for the return of a stolen 1,000-year-old Buddhist mummy, known as the statue of Zhanggong-zushi. The full text can be found by following A Battle over the Chinese Culture Treasure Lost Overseas.

Professor Huo is Professor of Law, Deputy Dean of International Law Faculty at China University of Political Science and Law; Associate Member of International Academy of Comparative Law; Observer of the UNESCO 1970 Convention. Email: zhengxinh@cupl.edu.cn.

For anyone interested in state immunities against execution, I have prepared a short report about a recent ruling of the Greek Supreme Court, which can be retrieved here

This year’s Forum Conveniens Annual Lecture at the University of Edinburgh will be held on Wednesday 2nd of May, 5.30 – 7 pm.
The speaker is Dr. Alex Mills, Reader in Public and Private International Law at University College London, on the topic: “Party Autonomy in Private International Law: The Privatisation of Global Governance?”
The venue is Raeburn Room, Old College, South Bridge, Edinburgh, EH8 9YL
The event is free but registration is required at https://forum_conveniens_2018.eventbrite.co.uk.

Thank you Klaus Oblin for flagging OGH 7 Ob 183/17p X SE v I SpA (yet again I am happy to grumble that there is really no need to keep B2B litigation anonymous) at the Austrian Supreme Court. At issue is the application of Article 25 Brussels I Recast: when can consent to choice of court be established.

The facts of the case reflect repeated business practice: offers are made and accepted; a business relationship ensues on the basis of which further offers and orders are made; somewhere along the lines reference is made to general terms and conditions – GTCs which include choice of court. Can defendant be considered to have consented?

The Supreme Court, justifiably, lays the burden of proof with the claimant /plaintiff: if the contract is concluded through different offer and acceptance documents, the offer need only reference the terms and conditions containing the agreement conferring jurisdiction only if the other party: can follow-up on this with reasonable diligence; and actually receives the terms and conditions.

I am happy to refer to Klaus’ excellent overview (which also discussed the absence of established business practice between parties: one of the alternatives for showing choice of court). Yet again, the first and foremost quality required of lawyers (here: in-house counsel) emerges: ensure proper filing and compliance with simple procedure. Here: a clear flag of the GTCs in correspondence, and simple follow-up would have sufficed.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.9.

Béligh Elbalti, Associate Professor at Osaka University, Graduate School of Law and Politics, has kindly informed us that the forthcoming volume of the Japanese Yearbook of International Law (Vol. 60, 2017) will feature the following articles and case notes relating to private international law.

Articles

Uniform Law Treaties: Their Reception, Implementation, Success and Failure

Hirao Sano, Introductory Note (pp. 4-9)

Hirao Sano, Going Forward with Uniform Private Law Treaties: A Study in Japan’s Behavioral Pattern (pp. 10-58)

Tomotaka Fujita, When Does Japan Not Conclude Uniform Private Law Conventions? (pp. 59-85)

Souichirou Kozuka, The Selective Reception of Uniform Law in Asia (pp. 86-112)

Tetsuo Morishita, Successes and Failures of Harmonization of Commercial Laws (pp. 113-135)

Unilateralism and Multilateralism in Regulating Cross-border Business Transactions: Part Two

Yoshiaki Nomura, Fall of Extraterritoriality and Resurgence of Choice of Law in Global Securities Litigation (pp. 314-338)

Cases and Issues in Japanese Private International Law

Dai Yokomizo, Recognition of a Foreign Judgment on Children Born Through Surrogate Pregnancy (pp. 399-409)

As it has been the tradition since the creation of the Yearbook in 1959 (former The Japanese Annual of International Law), the forthcoming volume will also include English translations of a number of Japanese Court decisions relating to private international law.

Judicial Decisions in Japan

II. Private International Law

Supreme Court 1st Petty Bench), Judgment, March 10, 2016 (pp. 488-490)
International Adjudicatory jurisdiction over a Tort Claim – Special Circumstances- Defamation – Lis Pendens

Supreme Court 1st Petty Bench), Decision, June 2, 2016 (pp. 490-495)
Locus Standi – Civil Procedure Law – Party Authorized Charge of Litigation – Principle of Representation in Court by Attorney-at-law – Prohibition of Creating Trusts for Litigation

Tokyo High Court, Judgment, November 17, 2014 (pp. 495-498)
International Adjudicatory jurisdiction – Exclusive Choice of Court Agreement – Consumer Contracts – Redemption on Maturity – Alternative Claim for Damages Based on Tort- Article 3.4(1) of the Code of Civil Procedure- Public Policy

Intellectual Property High Court, Decision, March 25, 2015 (pp. 499-506)
Governing Law of Tort Claim – Defamation – International Adjudicatory jurisdiction for Tort Claim International Adjudicatory Jurisdiction Based on a Close Connection with an Anchor Claim

Tokyo District Court, Judgment, March 24, 2014 (pp. 506-509)
International Adjudicatory jurisdiction – Action to Oppose Enforcement of Arbitral Awards – Setoff

Tokyo District Court, Judgment, April 28, 2015 (pp. 509-512)
International Adjudicatory jurisdiction over a Tort Claim – Infringement of Intellectual Property Rights- Place of a Tort

Shizuoka District Court, Judgment, December 2, 2015 (pp. 512-517)
Applicable Law to Parental Authority – Parental Authority Under the Japanese Civil Code – Handing over a Child – Habitual Residence

Fukuoka District Court (Kokura Branch), Decision, December 4, 2015 (pp. 517-520)
Applicable Law to Maritime Lien – Applicable Law to Contractual Obligation Characteristic Performance – Vessel Auction

Kobe District Court, Decision, Janua1y 21, 2016 (pp. 520-522)
Applicable Law to Maritime Lien – Applicable Law to Contractual Obligation – Characteristic Pe1formance- Vessel Auction

Tokyo District Court, Interlocutory Judgment, February 15, 2016 (pp. 523-526)
International Adjudicatory jurisdiction over a Tort Claim – Validity of Exclusive Jurisdiction Clause-Anti-trust (Competition) Law

Tokyo District Court, Decision, September 26, 2016 (pp. 526-533)
Governing Law of Labor Contract – Application of Mandatory Provisions of the Law of the; Most Closely Connected Place to a Labor Contract – The Place Where the Work Should be Provided

More information on the Yearbook (former Annual) and the content of its past volumes is available at http://www.ilajapan.org/jyil/.

The latest issue of the „Praxis des Internationalen Privat- und Verfahrensrechts (IPRax)“ features the following articles:

H.-P. Mansel/K. Thorn/R. Wagner: European conflict of laws 2017: The Dawning of Interstate Treaties

The article provides an overview of developments in Brussels in the field of judicial cooperation in civil and commercial matters from December 2016 until December 2017. It summarizes current projects and new instruments that are presently making their way through the EU legislative process. It also refers to the laws enacted at the national level in Germany as a result of new European instruments. Furthermore, the authors look at areas of law where the EU has made use of its external competence. They discuss both important decisions and pending cases before the ECJ as well as important decisions from German courts pertaining to the subject matter of the article. In addition, the article also looks at current projects and the latest developments at the Hague Conference on Private International Law.

S. Huber/S. Geier-Thieme: Jurisdiction for Tort Claims under the European Rules of Jurisdiction in the case of Purely Economic Loss

The preliminary ruling of the ECJ in the case Universal Music concerns a situation where a person entered into an unfavourable contract with a third party due to the negligent behaviour of the alleged tortfeasor. In this context, the ECJ has clarified that the bank account, which the injured party used in order to fulfil the disadvantageous commitment, is not the decisive factor for establishing jurisdiction for a tort claim. This part of the decision is convincing. Otherwise, the claimant would be able to influence the place of jurisdiction by the simple choice between different bank accounts. The Court, however, missed the opportunity to determine the place of jurisdiction in cases of purely economic loss at the place where the primary damage occurred. The ECJ refers to the place where the injured party concluded a settlement agreement with the third party. This settlement agreement, however, only diminished the damage that had already occurred when the injured party had entered into the unfavourable contract with the third person. As such, the obligations that resulted from this contract to the detriment of the injured party constitute the primary damage. Under the rules of international private law, these obligations are situated where the debtor, i.e. the injured party, resides. It is true, that this allows the injured party to bring a claim in the courts of his home country, but such a result seems appropriate in situations as in the present case. The opposite approach of the ECJ leads to legal uncertainty and time-intensive disputes about the question of jurisdiction.

H. Dörner: “One-shotter“ versus „repeat player“ – Elucidation of Art. 13 para. 2 and Art. 11 para. 1 lit. b of the Regulation (EU) No 1215/2012

In the opinion of the European Court of Justice, the European “Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters” grants the persons referred to in Art. 13 para. 2 and 11 para. 1 lit. b an additional place of jurisdiction at their own domicile, because this group of persons is in each case the “economically weaker and legally less experienced party”. Since the granting of such a plaintiff’s legal status implies an improvement in procedural law, the idea arises that this is also supposed to compensate for deficiencies in the procedure. The author proposes to describe the relationship of the litigants and the structural inferiority of the respective plaintiffs utilizing the distinction between “one-shotter” and “repeat player” introduced by Marc Galanter. A one-shotter is an “Einmalprozessierer” who only occasionally uses the help of the courts, while the repeat player, as a “Vielfachprozessierer”, repeatedly performs similar processes in a certain area. By adopting this pair of terms, the subject matter can firstly be presented without contradiction and, in particular, the ECJ decision to be discussed here can be classified appropriately. Secondly, the diffuse construct of the “weaker party”, which depends on various variables, is attributed to a single criterion that can be verified empirically and is thus accessible to evidence, namely the extent of the parties’ process activity.

F. Koechel: Art. 26 of the Brussels I Regulation: The relevant moment for the challenge to jurisdiction and the notion of entering of an appearance

It is settled case law of the Court of Justice of the European Union that under Art. 26 of the Brussels Ibis Regulation the defendant may not challenge the jurisdiction of the court seized after he has made the submission which under national law is considered to be his first defence. In response to a request for a preliminary ruling by the Corte di Cassazione, the CJEU has now specified that the defendant may bring the challenge to the jurisdiction of the court seized even simultaneously with his first defence and in the alternative to other objections of procedure. While the CJEU defines the relevant moment for the challenge to jurisdiction autonomously, it does not introduce an autonomous notion of entering of an appearance for the purposes of Art. 26 of the Brussels Ibis Regulation but refers to the “first defence” under the law of the forum State. Therefore, the actual stage in the national proceedings until which the defendant can raise the lack of jurisdiction depends on which procedural act of the defendant is considered to be the first defence by the lex fori. The case law of German civil and labour courts on the matter is inconsistent. While civil courts already consider the defendant’s submissions in writing prior to the oral hearing as a “first defence”, the Regional Court of Aachen recently followed a more restrictive interpretation applied by labour courts, which necessarily require a submission during the contentious oral hearing. As this article argues, both civil and labour courts should consider submissions prior to the oral hearing as possible “first defences” by the defendant. Much rather than the stage of the proceedings, it is the subject of the defendant’s submission, which is decisive for its qualification as an entering of an appearance within the meaning of Art. 26 of the Brussels Ibis Regulation. The defendant should be deemed to have entered an appearance if the plaintiff and the court seized are able to objectively ascertain from the content of the submissions that it is aimed at a contested decision by the court on any question different than jurisdiction or at an amicable settlement with the participation of the court.

M. Gebauer: Can a jurisdiction agreement prevent the right of a defendant to set-off before German courts?

The decision, rendered by the German Federal Supreme Court (BGH), illustrates some of the problems that arise when the BGH is confronted with a claim of a substantive right to set-off by a German based defendant. The case involved a Chinese plaintiff seeking the purchase price of X-ray equipment delivered to a German defendant. The German defendant alleged deficiencies in the equipment and sought damages in an amount exceeding the plaintiff’s initial claim. The contract contained a jurisdiction agreement in favour of the courts of their respective domiciles. The BGH declined jurisdiction with regards to the setoff claim, despite a close connection between the alleged claim and the alleged right to set-off. The author considers a line of German jurisprudence dating back over forty years, in terms of which the BGH has consistently worked on the basis that a jurisdiction agreement in favour of the courts of the parties’ respective domiciles prevents any right of a German domiciled defendant to claim substantive set-off, in so far as the contract does not explicitly and unambiguously allow such a right. The author specifically questions the decision of the BGH in this case, together with its long-standing jurisprudence on the matter, in light of the Brussels I Regulation and wider European Union law, suggesting that the time is ripe for the matter to be re-visited by the Court of Justice of the European Union in the form of a preliminary reference.

W.-H. Roth: Drittstaatliche Eingriffsnormen und Rom I-Verordnung

The application of overriding mandatory provisions of states other than the forum is one of the much-discussed topics in academia, whereas its practical relevance, as yet, seems to be rather limited In the negotiations on the Rome I-Regulation a compromise with the United Kingdom led to Art. 9 (3), allowing for the application of such overriding mandatory provisions only under the very restrictive conditions set forth therein. In its Nikiforidis judgment the Court of Justice of the European Union stresses the exceptional character of Art. 9 vis-à-vis party autonomy and its relevance for legal certainty. Art. 9 (3) is attributed exhaustive character which prevents Member States to take any way around. In contrast, Member States are not precluded to take overriding mandatory rules into account as a matter of fact if provided for by the substantive law applicable to the contract (according to the general rules of the Rome I- Regulation). The principle of sincere cooperation (Art. 4 (3) EUT) does not lead to a different conclusion. It does not authorise the Member States to circumvent the preconditions set forth by Art. 9 Rome I-Regulation. The judgment of the Court is criticised for dealing with this fundamental principle just in a rather formal manner.

M. Makowsky: Land registration of fractional ownership in cases of a foreign matrimonial property regime

Land acquisition by spouses with a foreign matrimonial property regime plays an increasing role in practice. Yet, the land registration often causes difficulties, if the spouses wish the registration of sole or fractional ownership although the matrimonial property regime (regularly) provides for joint property. In this context, the decision of the Higher Regional Court of Munich confirms that the land registry must obtain knowledge of the applicable foreign law ex officio. Contrary to the Court’s opinion, however, an interim order, which obliges the applicant to obtain a legal opinion, should not be regarded as generally inadmissible by law. According to the predominant view, the land registry may only refuse the registration of sole or fractional ownership, if it is convinced that this would make the land register inaccurate with regard to the matrimonial property regime. In case of mere doubts regarding the foreign law, the registration is nonetheless subject to prior clarification. The opposing view of the Court is not convincing. Furthermore, the Higher Regional Court correctly affirms that the acquisition of sole or fractional ownership is possible under the Polish statutory matrimonial property regime. Contrary to the view of the Court, however, the land registry does not have to register sole or fractional ownership only because, in the abstract, the law provides for such an acquisition.

Rechtbank Rotterdam held on 15 March last that 4 ships owned and operated by the Sea Trade concern had to be regarded as waste when they left the port at Rotterdam cq Hamburg (they were eventually beached in a variety of destinations). Not having been notified as waste, their shipment was considered illegal and the concern as well as some of its employees consequently convicted. (Illegal waste shipments being a criminal offense).

The court decided not to refer to the CJEU on the application of the waste definition to ships, as it considered the issue to be acte clair. The court’s review of the legal framework is included in Heading 4.3.4. As such, the analysis does not teach us much about the difficulty of applying the waste definition to international maritime logistics, in particular ship disposal. The court found at a factual level that the owners’ intention to dispose of the ships was clearly established when the ships left the EU, with, it suggested, the facts proving that the intention to dispose was at that moment of such an intensity as to trigger the waste definition.

The court does flag its appreciation for the difficulties. Not only is eventual disposal of hardware such as ships a possibility from the moment of their purchase. Such intention may also be withdrawn, reinstated, modified, at various moments of the ships’ life, fluctuating with market circumstances. Particularly given the criminal nature of the legal discipline here, I find that a very important driver to tread very cautiously and to look for firmer objective factors to establish intent.

Most probably to be continued on appeal.

Geert.

(Handbook of ) EU Waste law, 2nd ed. 2017, para 1.20 ff. Disclosure: I acted as court expert.

An International Symposium on Parental Child Abduction and Mediation in a Globalized World will take place at Stanford Law School on 10 April 2018 (one day only – California, USA). One of the aims of the symposium is to discuss what is happening between the United States and Mexico, one of the busiest borders with respect to  child abduction cases (see the latest statistical survey published by the Hague Conference on Private International Law -HCCH-). Click here for more information on the event and to register.

The event is free and open to the public. Speakers will include Professor Nuria González Martín (UNAM), the former Secretary General of the HCCH Hans van Loon, academics, judges, and Central Authority officials. Click here for the full program.

Thank you Tobias Lutzi for alerting us to the ECtHR drawing the final curtain (legally speaking at least) over the tragic events surrounding the Krombach case. The case is a classic viz ordre public, recognition and enforcement issues. Current decision however relates to the criminal law aspects of the case and the ne bis in idem principle in particular.

The Court declared Krombach’s complaint inadmissible.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.1.4.

On March 15 the ECtHR, sitting as the Grand Chamber,decided on the Naït-Litman v. Switzerland case (application no. 51357/07), against the applicant. Independently on whether one agrees or not  with the final outcome, for PIL lawyers and amateurs the judgment is certainly worth reading.

The case concerned the refusal by the Swiss courts to examine Mr Naït-Liman’s civil claim for compensation for the non-pecuniary damage arising from acts of torture allegedly inflicted on him in Tunisia. According to the applicant, he was arrested in April 1992 by the police in Italy, and after being transferred to the Tunisian consulate in Genoa, he was taken to Tunis by Tunisian agents. Mr Naït-Liman alleges that, from 24 April to 1 June 1992, he was detained and tortured in Tunis in the premises of the Ministry of the Interior on the orders of A.K., the then Minister of the Interior. Following the alleged torture, Mr Naït-Liman fled Tunisia in 1993 for Switzerland, where he applied for political asylum; this was granted in 1995.

On 14 February 2001, having learnt that A.K. was being treated in a Swiss hospital, the applicant lodged a criminal complaint against him with the Principal Public Prosecutor for the Republic and the Canton of Geneva. He applied to join these proceedings as a civil party. The Prosecutor dropped the proceedings after finding out that A.K. had left the country some days earlier.

Several years later, on 8 July 2004, the applicant lodged a claim for damages with the Court of First Instance of the Republic and the Canton of Geneva against Tunisia and against A.K. The Court of First Instance declared the claim inadmissible on the ground that it lacked territorial jurisdiction and that the Swiss courts did not have jurisdiction under the forum of necessity in the case at hand, owing to the lack of a sufficient link between, on the one hand, the case and the facts, and, on the other, Switzerland. Mr Naït-Liman lodged an appeal with the Court of Justice of the Republic and the Canton of Geneva, which was rejected on the grounds of immunity from jurisdiction of the defendants. The Federal Supreme Court dismissed the second appeal in 2007, considering that the Swiss courts in any event lacked territorial jurisdiction.

The ECtHR considered that international law had not imposed an obligation on the Swiss authorities to open their courts with a view to ruling on the merits of Mr Naït-Liman’s compensation claim, on the basis of either universal civil jurisdiction in respect of acts of torture or a forum of necessity.

The case is without doubt of interest for CoL and beyond: the methodology employed by the Court is remarkable. A wide comparative legal analysis is conducted, which regarding universal civil jurisdiction encompasses the work of the Institute of International Law on the topic in 2015, and the report drafted by A. Bucher, and takes into account 39 member States of the Council of Europe (Albania, Armenia, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria, the Czech Republic, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, the Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Spain, Turkey, Ukraine and the United Kingdom), as well as certain States which are not members of the Council of Europe. The forum necessitatis prong comprises: the works of both the IIL and the  International Law Association -The Sofia Resolution, 2012, of its former Committee on International Civil Litigation and the Interests of the Public-; eleven of European States (Austria, Belgium, Estonia, France, Germany, Luxembourg, the Netherlands, Norway, Poland, Portugal and Romania) which explicitly recognise either the forum of necessity or a principle bearing another name but entailing very similar if not identical consequences (as in the case of France); Switzerland; and Canada (Quebec) as a non-member States of the Council of Europe. Finally, reference is also made to the forum non conveniens provision in the EU maintenance, succession and matrimonial property regulations.

(Summary here).

This post has been authored by

Dr. Jorg Sladic, Attorney in Ljubljana and Assistant Professor in Maribor (Slovenia)

The most interesting development in European private international law and European insolvency law seems the Croatian AGROKOR case. Rulings of English courts have been reported (see e.g. Prof. Van Calster’s blog, Agrokor DD – Recognition of Croatian proceedings shows the impact of Insolvency Regulation’s Annex A.)[1] However, a new and contrary development seems to be an order by the Slovenian Supreme Court in case Cpg 2/2018 of 14 March 2018.[2] The Slovenian forum refused to grant exequatur to Croatian extraordinary administration as a way of divestiture of insolvent debtor.  Large parts of the order do read as a manual of non-contentious proceedings and deal in assessment of interest in bringing an appeal. However, the part dealing with private international law and European civil procedure has to presented. It will have a wider international effect. It is also interesting that the Slovenian forum refused to contemplate any assessment done by the High Court of Justice of England & Wales in case In the matter of Agrokor dd

and in the matter of the Cross-border insolvency regulations 2006 ([2017] Ewhc 2791 (Ch)).

Facts:

AGROKOR is a huge agro-industrial enterprises in South-Eastern Europe (Croatia, Slovenia, Romania, Serbia and also perhaps some other European jurisdictions) employing more than 50 000 employees. It is also the biggest owner of agricultural lands in that part of Europe. The impacts of Agrokor were discussed by Hogan & Lovell on their website.[3] Agrokor was owned and operated by a local oligarch and is apparently implied in not all to transparent business operations. As a consequence it became insolvent.

Due to huge debts that would actually require a collective insolvency proceedings Croatia adopted the Law on Extraordinary Administration Proceeding in Commercial Companies of Systemic Importance for the Republic of Croatia.[4] The essence of that legislation is summarized in English by the High Court of Justice of England & Wales in case In the matter of Agrokor dd

and in the matter of the Cross-border insolvency regulations 2006 ([2017] Ewhc 2791 (Ch)). The essence of Croatian legislation is the (temporary) suspension of par condicio creditorum in and pari passu clauses in insolvency law. AGROKOR was passed under extraordinary administration suspending the rights of owners and of the board of directors.

The Croatian extraordinary administrator requested the recognition of extraordinary administration under Croatian law also for the assets and subsidiaries in Slovenia in 2017. Upon opposition of creditors (banks as creditors ex iure crediti) the recognition order was vacated. After remedies the case came before the Supreme Court and ended with an unanimous refusal of recognition.

Reasoning:

In this report only points of private international law will be reported. Questions of standing and of interest in bringing proceedings will not be discussed.

Inapplicability of EU private international law

Even though Slovenia and Croatia are nowadays Member States of the EU, the Regulations 1346/200 and 848/2015 are not to be applied, as the Croatian proceedings are not mentioned in the Annex A. Slovenian national international collective insolvency law (Art. 445 – 488 Financial Operations, Insolvency Proceedings and Compulsory Winding-up Act) and the Bilateral Legal Assistance Treaty Between Slovenia and Croatia of 1994 are to be applied (par. 6).

The lis pendens plea

Agrokor argued that an arbitration case is pending in London and that some of the parties in the Slovenian case declared their claims in Croatian proceedings for extraordinary administration. The Slovenian Supreme court dismissed such a plea. The effects of lis pendens on the arbitration in the UK are a matter for UK courts (par. 23). As a consequence the recognition of Croatian extraordinary administration in the UK by the judgement of the High Court of Justice Nr. CR-2017-005571 of 9 November 2017 is of no importance for Slovenian proceedings. However, even if UK law incorporated the UNCITRAL guidelines the High court (judge Paul Matthews) based its argumentation on common law and precedents based on that law. The Slovenian forum completely cut the discussion by a laconic statement according to which understanding and application of devices of insolvency law under [English] common law is quite different from Slovenian civil law legal order (par. 24).

However, lis pendens could be given effect due to parallel pending proceedings in Slovenia and Croatia. The Slovenian Court did not apply the Regulation Brussels Ia (1215/2012) but referred to national Slovenian law. The Slovenian forum explained that the Regulation Brussels Ia is not t be applied by virtue of its exception for bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings (Art. 1(b) Regulation 1215/2012). National Slovenian private international law deals with the exception of lis pendens in Art. 88 Private International Law and Proceedings Act of 1999.[5] The essence of Slovenian international lis pendens is the request to suspend proceedings before a Slovenian forum. Where Slovenian private international law applies, a Slovenian forum will not suspend the proceedings ox officio. In concreto, however, none of the parties in Slovenian set of proceedings requested suspension.

Cross-border effects of substantive consolidation

One of the pleas in appeal was the erroneous application of substantive consolidation under the UNCITRAL model law. Lower courts considered that the substantive consolidation violated the par condicio creditorum principle, i.e. a basic principle of Slovenian insolvency law. Lower courts assessed the Croatian extraordinary administration and concluded that in essence such an administration is to be considered as a substantive consolidation. Substantive consolidation is a treatment of the assets and liabilities of two or more enterprise group members as if they were part of a single insolvency estate.[6] Slovenian insolvency legislation followed the UNCITRAL model law. The Supreme Court did not have any problem incorporating via its own case-law the UNCITRAL Legislative Guide on Insolvency Law. According to the Slovenian forum the Croatian  Law on Extraordinary Administration Proceeding in Commercial Companies of Systemic Importance for the Republic of Croatia indeed incorporated the substantive consolidation in Croatian law. Art. 43 of the said Croatian law namely provides for a systemic measure of substantive consolidation (paras. 29 – 40, especially par. 36). Substantive cross-border consolidation is contrary so Slovenian international ordre public.

The defence of ordre public (paras 41 – 53)

The essence of Slovenian Supreme Court’s reasoning consists of assessment of the compliance with ordre public condition for granting recognition (see on Slovenian legislation in Italian e.g. in Sladi? La Corte suprema slovena si confronta con i danni punitivi, Danno e responsabilità 1/2014, p. 18 et seq.). The national Slovenian law applies the prerequisite of international ordre public, i.e. only foreign decision that could endanger the legal and moral integrity of Slovenian legal order are not recognised. The ordre public defence is the ultimate refuge. However, recognition of foreign proceedings for divestiture of over-indebted debtors where the condition of equal treatment of creditors (par condicio creditorum) is not complied with would not comply with the requirements of Slovenian international ordre public. Slovenia namely protects on the one hand in national insolvency proceedings the equal treatment of creditors. On the other hand it only grants recognition in international insolvency legislation the powers of foreign administrator to conduct the case for the common representation of all creditors (par. 45). The Croatian Law on Extraordinary Administration Proceeding in Commercial Companies of Systemic Importance for the Republic of Croatia is a form of State’s economic intervention or economic protectionism having the aim of protection of commercial companies of systemic importance. The Croatian law interferes in the fundamental principles of collective insolvency law and gives certain creditors privileges to be paid by priority by an administrator’s discretionary decision without any consent of the board of creditors (par. 47). The extraordinary administration is conditioned by the State’s interest and certainly not by the interest of creditors. Creditors do not get nor the benefit of the par condicio creditorum (no equal treatment of creditors in having the same condition vis-a-vis the debtor) and are not paid in equal shares (no pari passu clause) (par. 48).

The Slovenian Supreme Court refused to engage in any assessment of compatibility of Croatian law with the Croatian ordre public (par. 49). However, it remarked that Courts in successor States of Yugoslavia refused to recognise the effects of judicial decisions based on the Law on Extraordinary Administration Proceeding in Commercial Companies of Systemic Importance for the Republic of Croatia. Courts in Montenegro (Supreme Court of Montenegro), Serbia (Commercial court of Appeal), Bosnia (Supreme Court of Bosnia) all concluded that the Croatian Law on Extraordinary Administration Proceeding in Commercial Companies of Systemic Importance for the Republic of Croatia does not deal in insolvency, it is aimed at the protection of State’s interests. The Croatian law is contrary to ordre public of any of those States. Perhaps the said decisions can also be seen as introducing the government interest analysis in South-Eastern Europe?

In the end the Slovenian Supreme Court stressed the importance of the European ordre public. “In the framework of national ordre public also the European ordre public is to be acknowledged next to regional ordre public. [Comment: The order does not clarify what the difference between the European and regional ordre public is]. A Slovenian forum is not empowered to refuse the recognition of foreign insolvency proceedings even though they might be contrary to national ordre public if such a refusal would not be justified or proportional from a European point of view. Slovenia and Croatia are namely both members of European legal area, i.e. members of the EU. However, each State is empowered to set types and conditions of collective insolvency proceedings on their territories. The effects and closing can then be a subject-matter of recognition (both automatic and according to the rules) in other States and also to set interest to be affected by legal consequences of recognition of foreign insolvency proceedings.” Slovenia decided to protect the creditors’ interests, for their equal treatment, as a consequence the refusal of recognition of the extraordinary administration complies with the Slovenian ordre public.

[1]https://gavclaw.com/2018/03/26/agrokor-dd-recognition-of-croatian-proceedings-shows-the-impact-of-insolvency-regulations-annex-a/#comment-69405

[2]Available in Slovenian at http://www.sodisce.si/sodni_postopki/objave/2018031912582798/

[3]https://www.hlbriworkoutblog.com/2017/12/english-recognition-agrokor-insolvency-not-tick-box-exercise/#page=1

[4]The Croatian version available on the webise of the Croatian Official Journal https://narodne-novine.nn.hr/clanci/sluzbeni/2017_04_32_707.html

[5]The translation in Encyclopedia of Private International Law (Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio), 2017, p. 3784–3804 reads as: »A court of the Republic of Slovenia will stay the proceedings at the request of a party if other proceedings on the same matter have been initiated before a foreign court between the same parties:

• if the suit in the proceedings conducted abroad was served on the defendant before the service of the suit in the proceedings conducted in the Republic of Slovenia; or if a non-contentious procedure abroad started earlier than in the Republic of Slovenia;
• if it is probable that the foreign decision will be recognized in the Republic of Slovenia, and;
• if reciprocity exists between the two states.«

[6]http://www.uncitral.org/uncitral/en/uncitral_texts/insolvency/2004Guide.html.

By Frédéric Breger, Legal Officer at the Permanent Bureau of the Hague Conference on Private International law (HCCH) 

In March 2018, the Permanent Bureau of the HCCH relaunched the publication of the Judges’ Newsletter on International Child Protection after almost four years of absence. Volume XXI of the Judges’ Newsletter (Winter-Spring 2018) has now been released on the HCCH website.  

This issue of the Judges’ Newsletter includes a Special Focus on the Seventh meeting of the Special Commission on the Practical Operation of the 1980 Hague Child Abduction Convention and the 1996 Hague Child Protection Convention meant to provide an insight into the discussions held during the meeting on a selected range of topics. It reflects, amongst others, the discussions held on topics such as a Draft Guide to good practice on Article 13(1)(b) of the 1980 Convention, addressing delays under the 1980 Convention, the benefits and use of the 1996 Convention in relation to the 1980 Convention, the revision of forms for return and access under the 1980 Convention, recognition and enforcement of protection orders, etc.  

Following the Conclusions and Recommendations adopted at this Special Commission meeting, the Judges’ Newsletter will henceforth be edited in-house and published in electronic format only. All previous volumes of the Judges’ Newsletter are available here. 

Readers of this blog may be interested to learn that the well-known (and, in many ways, quite depressing) Krombach/Bamberski saga appears to have finally found its conclusion with a decision by the European Court of Human Rights (Krombach v France, App no 67521/14) that was given yesterday.

Krombach – who, after having been convicted for killing his stepdaughter, had successfully resisted the enforcement of the French civil judgment in Germany (Case C-7/98 Krombach) and, equally successfully, appealed the criminal sentence (Krombach v France, App no 29731/96), before he had famously been kidnapped, brought to France, and convicted a second time – had brought a new complaint with regard to this second judgment. He had argued that his conviction in France violated the principle of ne bis in idem (as guaranteed in Art 4 of Protocol No 7) since he had previously been acquitted in Germany with regard to the same event.

Yesterday, the Court declared this application inadmissible as Art 4 of Protocol No 7, according to both its wording and the Court’s previous case law, ‘only concerned “courts in the same State”‘ (see the English Press Release).

[35.] … [L]a Cour constate que cette thèse [du requérant] se heurte aux termes mêmes de l’article 4 du Protocole no 7, qui renvoient expressément au « même État » partie à la Convention plutôt qu’à tout État partie à la Convention. …

[36.] La Cour a ainsi jugé avec constance que l’article 4 du Protocole no 7 ne visait que les « juridictions du même État » et ne faisait donc pas obstacle à ce qu’une personne soit poursuivie ou punie pénalement par les juridictions d’un État partie à la Convention en raison d’une infraction pour laquelle elle avait été acquittée ou condamnée par un jugement définitif dans un autre État partie … .

It also pointed out that ‘the fact that France and Germany were members of the European Union did not affect the applicability of Article 4 of Protocol No. 7’ (ibid).

[38.] La Cour estime par ailleurs que la circonstance que la France et l’Allemagne sont membres de l’Union Européenne et que le droit de l’Union européenne donne au principe ne bis in idem une dimension trans-étatique à l’échelle de l’Union européenne … est sans incidence sur la question de l’applicabilité de l’article 4 du Protocole no 7 en l’espèce.

The Strasbourg Court thus appears to have added the final chapter to a case that has occupied the courts in Germany, France, and Luxembourg for almost 35 years, raising some pertinent questions as to mutual trust and judicial corporation in the process.

The first edition of the doctoral seminar in Public, International and European Law of the University of Milan will take place on 15, 16 and 17 October 2018. This year’s topic is Big Data and the Law – New Challenges beyond Data Protection.

The seminar will consist of three panels: (1) Big Data and Public Law: artificial intelligence, algorithmic decision and algorithmic transparency, Big data and Public Health, Big data and Taxation; (2) Big Data and State Jurisdiction (The un-territoriality of Data): how territoriality is challenged by the present day dynamics governing the search and seizure of digitized information; (3) Digitization of Public Administration and Big Data: tools, challenges and prospects of the transition to a digitalized public administration.

Each panel will host presentations by three PhD students, followed by a brief discussion by another PhD student.

The seminar will take place in Gargnano, on the shores of Lake Garda, at the historical Palazzo Feltrinelli.

Interested PhD students are encouraged to submit an 800-word abstract of their presentation, in English, by 30 April 2018. The abstracts should address one of the above issues from a public, international (including private international) or EU law perspective.

See here for further information.

Hotlinking is explained at para 17 of [2018] EWHC 550 (Ch) Wheat v Alphabet /Google Inc and Monaco Telecom. (Cross-reference is also made to the related main case against Monaco Telecom, [2017] EWHC 3150 (Ch)). The principal claim against Monaco Telecom is that it has broadcast, and continues to broadcast, an unauthorised duplicate of theirearth.com – claimant’s website. Google is involved in the litigation because claimant alleges that Google’s search engine algorithm has done little to address hotlinking practice, which, it is said, facilitates copyright infringement.

Both cases are a good example of the standards for serving out of jurisdiction, essentially, to what degree courts of the UK should accept jurisdiction against non-UK defendants (here: with claimants resident in the UK). The Brussels I Recast Regulation is not engaged in either cases for neither Monaco nor Alphabet are EU based.

Copyright aficionados are best referred to the judgment to appreciate its impact. The judgment essentially confirms that other than in a B2C context (particularly where EU law applies and privacy is involved), suing (for tort) Google or indeed internet companies not headquartered here, is not an easy proposition.

Geert.

On 26 February 2018, a well-attended, high-level workshop on the organization of databases on European civil procedural law took place at the Max-Planck-Institute (MPI) Luxembourg that was organized by Prof. Dr. Dr. h.c. Burkhard Hess and our fellow conflictoflaws.net-editor Prof. Dr. Marta Requejo Isidro. The event gathered contributions of experts from the European Commission, the European Court of Human Rights and the Court of Justice of the European Union. The workshop was part of a research project in which the MPI is participating together with major European Universities (Antwerp, Complutense, Freiburg [coordinator], Milan, Rotterdam, Wroclaw), the so called IC²BE study (Informed Choices in Cross-Border Enforcement). The final aim of this endeavor is to assess the working in practice of the “second generation” of EU regulations on procedural law for cross-border cases, i.e., the European Enforcement Order, Order for Payment, Small Claims (as amended by Regulation [EU] 2015/2421) and the Account Preservation Order Regulations. Marta Requejo Isidro has written a detailed report on the workshop that is available at the MPI’s website here.

Over the last few years, litigation in European courts against gross human rights violations and widespread environmental disasters has intensified. Recent case law shows that victims domiciled in third States often attempt to sue the local subsidiary and/or its parent company in Europe, which corresponds to the place where the latter is seated. In light of this, national courts of the EU have been asked to determine whether the parent company located in a Member State may serve as an ?anchor defendant? for claims against its subsidiary – sometimes with success, sometimes not:

For example, in Okpabi & Ors v Royal Dutch Shell Plc & Anor, the English High Court, Queen’s Bench Division, by its Technology and Construction Court, decided that it had no international jurisdiction to hear claims in tort against the Nigerian subsidiary (SPDC) of Royal Dutch Shell (RDC) in connection with environmental and health damages due to oil pollution in the context of the group’s oil production in Nigeria. To be more specific, Justice Fraser concluded that the Court lacked jurisdiction over the action, inasmuch as the European parent company did not owe a duty of care towards the claimants following the test established in Caparo Industries Plc v Dickman. Under the Caparo-test, a duty of care exists where the damage was foreseeable for the (anchor) defendant; imposing a duty of care on it must be fair, just, and reasonable; and finally, there is a certain proximity between the parent company and its subsidiary, which shows that the first exercises a sufficient control over the latter.

On 14 February 2018, the Court of Appeal validated the first instance Court’s reasoning by rejecting the claimants appeal (the judgment is available here). In a majority opinion (Justice Sales dissenting), the second instance Court confirmed that the victims’ claims had no prospect of success. Nevertheless, Justice Simon provided a different assessment of the proximity requirement: after analysing the corporate documents of the parent company, he observed that RDS had established standardised policies among the Shell group. According to the Court, however, this did not demonstrate that RDS actually exercised control over the subsidiary. At paragraph 89 of the judgment, Justice Simon states that it is “important to distinguish between a parent company which controls, or shares control of, the material operations on the one hand, and a parent company which issues mandatory policies and standards which are intended to apply throughout a group of companies (…). The issuing of mandatory policies plainly cannot mean that a parent has taken control of the operations of a subsidiary (…) such as to give rise to a duty of care”. Therefore, the Court of Appeal set a relatively high jurisdictional threshold that will be difficult for claimants to pass in the future.

Conversely, in Lungowe v Vedanta, a case that involved a claim against a parent company (Vedanta) seated in the UK and its foreign subsidiary for the pollution of the Kafue River in Zambia, as well as the adverse consequences of such an occurrence on the local population, the Court of Appeal concluded that there was a real issue to be tried against the parent company. Moreover, the Court considered that the subsidiary was a necessary and proper party to claim and that England and Wales was the proper place in which to bring the claims. Apparently, this case involved greater proximity between the parent company and its subsidiary compared to Okpabi. In particular, the fact that Vedanta hold 80% of its subsidiary’ shares played an important role. The same can be said as regards the degree of control of Vedanta’s board over the activities of the subsidiary (see the analysis of Sir Geoffrey Vos at paragraph 197 of the Okpabi appeal).

Unsatisfied with the current landscape, some States adopted –or are in the process of adopting– legislations that establish or reinforce the duty of care or vigilance of parent companies directly towards victims. In particular, France adopted the Duty of Vigilance Law in 2017, according to which parent companies of a certain size have a legal obligation to establish a vigilance plan (plan de vigilance) in order to prevent human rights violations. The failure to implement such a plan will incur the liability of parent companies for damages that a well-executed plan could have avoided. In Switzerland, a proposal of amendment of the Constitution was recently launched, the goal of which consists in reinforcing the protection of human rights by imposing a duty of due diligence on companies domiciled in Switzerland. Notably, the text establishes that the obligations designated by the proposed amendment will subsist even where conflict of law rules designate a different law than the Swiss one (overriding mandatory provision). Finally, some other States, such as Germany, propose voluntary measures through the adoption of a National Action Plan, as this was suggested by the EU in its CSR Strategy.

For further thoughts see Matthias Weller / Alexia Pato, “Local Parents as ‘Anchor Defendants’ in European Courts for Claims against Their Foreign Subsidiaries in Human Rights and Environmental Damages Litigation: Recent Case Law and Legislative Trends” forthcoming in Uniform Law Review 2018, Issue 2, preprint available at SSRN.

Dr. Philipp M. Reuß (University of Munich) is organizing a serialized online symposium on the private international law of parentage and filiation. The conferences will be held in German and feature a list of highly distinguished experts. The first event will take place on 19 April 2018, at 2 p.m. (local time). For the programme and further information on registration, please click here.

If one needed further illustration that the Brussels I Recast and the Recast Insolvency Regulation do not dovetail (a concept which I explore ia here) [2017] EWHC 2791 (Ch) Agrokor DD is it.

The English courts are being asked to recognise Agrokor’s extraordinary administration as a foreign main proceeding under the Cross-Border Insolvency Regulations 2006 (CBIR). For the facts of the case and Hogan Lovells breakdown of the judgment see here.

Of note for this blog is that Croatia have not included the emergency procedure foreseen Agrokor Act in the relevant Annexes to the Insolvency Regulation. Consequently no matter how much the procedure in the abstract meets with the definition of insolvency proceedings, it does not fall under the Insolvency Regulation hence recognition and enforcement of same does not follow that Regulation. Neither does it follow Brussels I Recast: for the procedure most definitely meets with the ‘insolvency’ exception under that Regulation. Matthews J justifiably refers to both in passing only, noting they have no calling here.

Recognition was eventually granted. Despite some serious relevant differences between Croatian and English insolvency law, none of these as so serious as to trigger ordre public objections. As Jake Hardy notes: if no man is an island, nor is any debt obligation – no matter how English it has painted itself to be.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5.

Today, the European Council has published a document of guidelines with a view to the opening of negotiations on the overall understanding of the framework for the future relationship EU-UK. In our field of interest those are the relevant ones

10. The future partnership should include ambitious provisions on movement of natural persons, based on full reciprocity and non-discrimination among Member States, and related areas such as coordination of social security and recognition of professional qualifications. In this context, options for judicial cooperation in matrimonial, parental responsibility and other related matters could be explored, taking into account that the UK will be a third country outside Schengen and that such cooperation would require strong safeguards to ensure full respect of fundamental rights.

Judicial cooperation in civil matters is not mentioned.

Guidelines 7 and 15 refer to the CJEU:

7. The European Council further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies. The role of the Court of Justice of the European Union will also be fully respected.

15. Designing the overall governance of the future relationship will require to take into account:

iii) the requirements of the autonomy of the EU legal order, including the role of the Court of Justice of the European Union, notably as developed in the jurisprudence.