Droit international général

The second issue of Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ) Vol. 81 (2017) has just been published:

Wolf-Georg Ringe, Das Beschlussmängelrecht in Großbritannien (Contesting Shareholder Resolutions in Great Britain)

The contestability of shareholder resolutions is a perennial problem in corporate law – effective minority protection needs to be carefully balanced with the risk of abuse. An analysis of the approach of English law may inform the policy debate in other legal systems. English law has effectively eliminated the risk of abuse with a number of simple and pragmatic steps.

In a nutshell, errors in formal resolutions can hardly ever be challenged, unless the claimant can demonstrate an underlying intentional disadvantage. But even substantive errors in resolutions are rarely conducive to a successful challenge. Instead, English law has developed a number of alternative mechanisms – often beyond our traditional understanding of law – which address the problem.

Minority shareholders of a UK company have a variety of ways to make their concerns heard. They may seek a declaratory judgment confirming the invalidity of the shareholders’ resolution due to procedural irregularities. Further, they may rely on the traditional shareholder lawsuit (derivative action) or the remedy for unfair prejudice. For each of these remedies, English law succeeds in limiting actionable situations to those where the claimant has been substantially wronged, while also filtering out those situations where a challenge would be arbitrary or vexatious. The more developed capital market in the UK and informal strategic shareholder influence are additional considerations that allow for greater flexibility in the British context.

Holger Fleischer & Peter Agstner, Grundlagen, Entwicklungslinien, Strukturmerkmale (Civil and Commercial Partnerships in Italy and Germany – Foundations, Developments, Distinctive Features)

This paper explores the trajectories of partnership law in Italy and Germany, firstly tracing its origins back to both the classical societas in Roman law and the late medieval commenda and compagnia in Northern Italy. It moves on to analyse the key characteristics of partnerships on both sides of the Alps, beginning with their legal nature and the organisation of partnership property either as joint property or as a community of collected hands (Gesamthand). Further topics include the liability of partners vis-à-vis third parties and the principles of management and the legal representation of partnerships in both jurisdictions.

Frederick Rieländer, Ein einheitliches „Unfallstatut“ für   Passagiergemeinschaften? – Methoden der Statutenkonzentration im Internationalen Personenbeförderungsrecht (A Uniform “Accident Act” for Passenger Carriers? – Statutory Concentration Methods for Passenger Carriage in International Law)

Despite extensive harmonisation of the substantive law relating to personal injuries arising out of traffic accidents during passenger carriage by air, rail, road and sea, the various legal systems in the EU still present striking differences with respect to the recoverability of non-economic damage for “secondary victims” in the case of death or injury to the “primary victim”. In terms of mass casualty incidents, the relevant EU conflict of laws rules provide for a useful “concentration effect” by designating a manageable quantity of national legal systems governing the carrier’s (extra-)contractual liability against fatally injured passengers and their surviving dependants. Nonetheless, since the claims of passengers and their survivors may be governed by different national legal systems, the amount of damages awarded may vary according to the applicable substantive law. At first glance, applying a single body of law governing the claims of all fatally injured passengers and their survivors against the carrier facilitates claims management and promotes equality between the victims who have shared the same misfortune. This article elaborates on the preconditions for an adaptation of EU conflict of laws rules as a possible means of ensuring the application of a single regime of (extra-)contractual liability for mass casualty incidents. In essence, it could be justified to develop a new concept of adaptation in the EU conflict of laws sphere if applying different national legal systems to a mass casualty incident infringes the principle of equal treatment under EU law. A closer analysis of the respective conflict of laws rules reveals that applying the law of habitual residence of the individual passenger is justified as a legitimate aim of consumer protection. Despite its harmonising effects, the legal concept of adaptation cannot guarantee the application of a sole body of law without exception, as the example of aircraft collisions demonstrates. On the other hand, adopting an artificial conflict of laws rule designating the applicable law for personal injuries arising out of passenger carriage necessarily contravenes the principle of identifying the closest connection and causes unequal treatment between individual victims of comparable tragic scenarios.

Corjo Jansen, Der Einfluss des deutschen auf das niederländische bürgerliche Recht zwischen 1840 und 1940 (The Influence of German Civil Law on Dutch Civil Law Between 1840 and 1940)

From 1840 onwards, Dutch civil law demonstrated a fundamental openness to influences from foreign, especially German, civil law. In fact, German civil law was one of the main sources of inspiration for the Dutch judge, scholar and legislator at the end of the nineteenth century and during the first two decades of the twentieth century, as were the ideas contained in the works of German luminaries such as Friedrich Carl von Savigny, Rudolph von Jhering and Bernhard Windscheid. The Dutch lawyers felt a close kinship to their German colleagues, due to a common historical background in Roman law. This common tradition, which formed the basis of German and Dutch law, made it attractive to borrow German legal concepts for introduction into the Dutch legal system, a process called legal transplant. The concepts of “security ownership” and “legal act” found a warm welcome in Dutch literature and legal practise and helped Dutch law develop, or, in other words, effected the necessary changes so that Dutch business and patrimonial law could meet the requirements of the time. Apparently German lawyers were confronted with problems in connection with extending credit, new technological developments, crises, and so on, several decades earlier than Dutch lawyers, and their solutions seamlessly found their way into Dutch legal practise.

Similarly, following the introduction of the German Bürgerliches Gesetz- buch (BGB) in 1900, its influence on Dutch private-law literature, legislation and justice and on Dutch civil lawyers was considerable in the first decades of the twentieth century. The Dutch legislative system was faltering, and so there was every reason to look to the German codification for inspiration and lessons. The comparison with German law in the first decades of the twentieth century breathed new life into the small world of Dutch civil law, even influencing the New Dutch Civil Code which entered into force in 1992. The designer of that Code, the Leiden professor of Civil Law, E. M. Meijers, used his extensive knowledge of German law to design the new Civil Code, an assignment given to him by the Dutch government in 1947.

Chuck Kotuby and Luke Sobota recently published General Principles of Law and International Due Process:  Principles and Norms Applicable in Transnational Disputes (Oxford University Press). The book updates Bin Cheng’s seminal book on general principles from 1953. The book also collects and distills these principles in a single volume as a practical resource for lawyers and scholars. According to Judge James Crawford, “This book explores how general principles of law are being applied, providing a timely update to Bin Cheng’s classic work. It focuses on the application of the principles to private conduct–an astute response to the evolution of international process over the past half-century. The result is a work that will benefit both academics and practitioners.”

In Re Walter Energy Canada Holdings, Inc, 2017 BCSC 709 (available here) the British Columbia Supreme Court had to consider the validity of a large claim (over $1 billion) filed in restructuring proceedings underway in the province under federal legislation.  The claim was for unfunded pension liabilities and was based on an American statute, the Employee Retirement and Income Security Act of 1974, 29 U.S.C. § 1001.  So the court had to consider whether that statute could apply to a claim in British Columbia against entities organized in Canada (mostly in British Columbia).

Starting at para. 93 the court considered whether the claim against the entities being restructured was governed by Canadian or American law (in each case the relevant law was either federal rather than provincial or state or did not vary as between provinces).  This is a choice of law question which raises the issue of the characterization of the claim.  Canadian courts do not often analyze characterization in detail, but the court did so in this case, making the decision notable.  The claimant argued that the claim was one in the law of obligations and sought to identify the proper law of the obligation.  The entities being restructured in contrast argued the claim went to a point of corporate law, namely their separate existence from other entities in an international corporate group.  The court referred to several of the main general authorities about the characterization process but considered the specific issue before it to be one of first instance.  It sided with the entities being restructured – the claim went to the issue of separation of corporate personality and status.  The American statute was imposing liability by “lifting the corporate veil” (paras. 137-38) between international corporate entities.

Having characterized the issue, the court then had to identify the connecting factor for the choice of law rule.  It held:

[160] The issue as to whether the Walter Canada Group’s separate legal personalities can be ignored is subject to the Canadian choice of law rule that the status and legal personality of a corporation is governed by the law of the place in which it was incorporated, namely British Columbia and Alberta. Here, as with the corporations within the Walter Canada Group, both with limited liability and unlimited liability, it is admitted that all of the partnerships were organized under British Columbia law. Accordingly, the choice of law analysis leads to the same result in relation to the partnerships, namely British Columbia law, including under the Partnership Act, R.S.B.C. 1996, c. 348.

[161] The place of incorporation or organization is a matter of public record and all persons who would do business with or otherwise deal with the Walter Canada Group entities would or should be well aware of that fact.

[162] I agree that, under Canadian choice of law rules, the place of incorporation or organization of the Walter Canada Group entities is the appropriate “connecting factor” in relation to the issue arising from the 1974 Plan’s claim.  As a result, British Columbia and Alberta law determine whether the separate legal personalities of the Walter Canada Group entities can be ignored.

Given that the American statute is not part of British Columbia or Alberta law, the court concluded that the claim failed (paras. 177-78).

 I want to reflect more on the decision, but at this point I am not certain I agree with the characterization analysis.  It is true that the only way the American statute makes the Canadian entities liable is by imposing liability on others within a larger corporate group.  But to me it does not follow that the statute is a matter of corporate status and not of obligation.  The statute imposes an obligation and extends that obligation to various entities.  I think there is room to debate that the primary element of the statute is the obligation it imposes.

However, support for the decision can lie in Macmillan Inc v Bishopsgate Investment Trust (No 3), [1996] 1 WLR 387 (CA), which the court does mention, which stresses the possibility of characterizing a specific legal issue within the context of a broader claim.  The analysis could be that there is a nested issue – that of corporate separation or status – within the broader question of liability for an unfunded pension.

Ontario has enacted and brought into force the International Commercial Arbitration Act, 2017, SO 2017, c 2, Sched 5 (available here) to replace its previous statute on international commercial arbitration.  The central feature of the new statute is that it provides that BOTH the 1958 New York Convention and the 1985 Model Law have the force of law in Ontario.  Previously, when Ontario had given the Model Law the force of law in Ontario it had repealed its statute that had given the New York Convention the force of law in Ontario.  This made Ontario an outlier within Canada since the New York Convention has the force of law in all other provinces (as does the Model Law).

The previous statute did not address the issue of the limitation period for enforcing a foreign award.  The new statute addresses this in section 10, adopting a general 10 year period from the date of the award (subject to some exceptions).   Section 8 deals with the consolidation of arbitrations and section 11 deals with appeals from arbitral decisions on jurisdiction.

Last week, the US Supreme Court issued its decision in Bolivarian Republic of Venezuela v. Helmerich & Payne International, deciding the pleading threshold a party must establish for the purposes of the ‘expropriation exception’ under § 1605(a)(3) of the Foreign Sovereign Immunities Act (FSIA).

We’ve reported on the case already here and here, and at this stage, there is little more that can be said about the decision that has not already been reported by Amy Howe at SCOTUSBlog and Ted Folkman and Ira Ryk-Lakhman at Letters Blogatory.

In sum, the plaintiff is a U.S. company, and its Venezuelan subsidiary, Helmerich & Payne de Venezuela. Helmerich & Payne de Venezuela started drilling for the state-owned oil company decades ago, but in 2010, then-President Hugo Chavez issued a decree appropriating the subsidiary’s drilling rigs, which the state-owned oil company now uses. A little over a year later, the two companies filed a lawsuit in federal court in Washington, D.C., invoking the “expropriation exception” to the FSIA. That exception allows lawsuits against foreign governments to go forward in the United States when “rights in property taken in violation of international law are in issue” and the state or state-owned entity later owns that property and has a commercial connection to the United States. As you can see, the language of the statute shows that the merits of a claim and the jurisdictional inquiries are substantially intertwined

In 2015, the court of appeals held that the claims could go forward so long they met the “exceptionally low bar” of not being “wholly insubstantial or frivolous.” In an opinion by Justice Stephen Breyer, the court explained that the bar for such claims is, in fact, a bit higher. To wit, the expropriation exception will apply, and a U.S. court will have jurisdiction, only when the facts “do show (and not just arguably show) a taking of property in violation of international law.” Such questions, the Court held, should be decided “as close to the outset” of the case “as is reasonably possible,” in order to provide clarity to foreign governments and minimize the extent to which they are involved in litigation in U.S. courts. This, the court suggested, will in turn reduce the likelihood of friction with other countries and retaliatory litigation against the United States overseas.

Professor Donald Earl Childress III of Pepperdine University School of Law has just released on SSRN an article that will soon appear in the Duke Journal of Comparative & International Law. It is a contribution to a symposium on internationalizing the new Conflicts Restatement, and examines the impact that transnational cases have had on judicial decisions in the United States, and how the resolution of these cases by U.S. courts may be helpful to the drafters of the new Conflicts Restatement. It begins with the observation that recent transnational cases, regardless of whether they are treated separately by the new Conflicts Restatement, offer important insights into the current and evolving conflict-of-laws process in the United States. These cases also offer insight into the ways in which the new Conflicts Restatement’s focus on scope and priority should be developed. Part I explores how the presumption against extraterritoriality relates to the new Conflicts Restatement’s concern with scope and priority. Part II considers whether the new Conflicts Restatement should consider larger, regulatory conflicts in the transnational arena, and, if so, how to deal with them, especially in the context of the priority question. This contribution concludes with some points for further study that should be examined by the new Conflicts Restatement.

It is available for download here.

Recent developments have significantly affected some of the characteristic features of litigation in the US and their impact on foreign jurisdictions. In light of this, the Swiss Institute for Comparative Law, together with the University of Lausanne have organized a one-day conference next June 23, where well-known US, Swiss and European law professors and practicing lawyers will debate on issues such as the jurisdictional reach of US courts, choice-of-court agreements, class actions, discovery, extraterritorial application of US law, and the recognition and enforcement of judgments.

Click here to see the program.

Thank you Dentons for flagging 2016 ONCA 836 Cook v 1293037 Alberta Ltd, on the application of the forum of necessity or forum necessitatis doctrine in the Canadian courts. A doctrine which in some way or another allows a court to be used as court of last resort, should no other court be reasonably be available to plaintiff. Those States which do have it (Belgium, for instance: In Article 11 of its Statute; readers of the blog will also remember the EC suggested its introduction in the Brussels I Recast (Article 26 of COM(2010)748), but failed) all insist the jurisdictional trigger can only be exercised in the most exceptional of circumstance.

Cook v 129…Alberta is a good illustration of this exceptional nature. The Canadian Supreme Court set out the conditions in 2012 SCC 17 Van Breda v Village Resorts Ltd. Appellants had made a tactical decision not to bring their action in Alberta, the natural forum of the case. The limitation period for bringing the action in Alberta has now expired. They should under the circumstance not be allowed to bring the action in Ontario.

Does someone somewhere have an (undoubtedly slim) catalogue of those forum necessitatis actions which did succeed?

Geert.

(Handbook of) European private international law, 2nd ed.2016, Chapter 2, Heading 2.2.4 (p.68.)

Professor Francisco Javier Zamora Cabot has just published an article on The Rule of Law and Access to Justice in Recent and Key Decisions of the UK Courts

The English abstract reads:

Following an Introduction that points out the current significance of transnational human rights litigations, and their implications arising out of the recent stance taken by the United Kingdom Supreme Court in the case Belhaj v. Straw, the present study underlines throughout Section II the approach to this case, linked with the “Extraordinary Renditions Programme”, of the United States, and with tortures as well as unlawful detention suffered by the plaintiffs, in which the British Government is denounced as an accomplice.

This Section also reflects decisions of the High and Appeal Courts, giving way all along Section III to the Supreme Court judgment, in the same direction of the one of the Court of Appeal as far as immunity of jurisdiction and the Act of State are concerned, and that afterwards it is scrutinized by the author of the present study in a positive way to the extent that access to justice by victims of serious violations of HHRR prevails. And that is so above all through the inactivation in the case of State of Act for the english public policy, allowing such an access and largely in agreement with a great deal of initiatives emerging from the international community and at the same time widespread doctrinal opinions.

This study comes to an end with some Conclusive Reflections (Section IV), bringing to light the way the Supreme Court has come to find a path in order to respond to a question involving sensitive edges, enhancing the rule of law, the access to justice and the defense of HHRR as foundations that cannot be waived in the course of its performance.

The full article (in Spanish) is available in the Papeles el Tiempo de los Derechos (open access): https://redtiempodelosderechos.files.wordpress.com/2015/01/wp-3-17.pdf 

and on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2960256

More than many other legal disciplines Private International Law draws its inspiration from its history. The complexity, the technicality characterizing it, but also a continuity that no euphoria of legislation has succeeded in compromising, urge to exploit the treasure of a past gathering both the constructive efforts of an untiring doctrinal reflection and the lessons of a constantly renewed experience of concrete cases. The understanding of the problems that the plurality of legal orders poses to private law relationships, and of the methods and solutions employed to address them, comes at this price.
This book is conceived to meet this need, to which it responds nevertheless with modesty. It would have been too daring to aim at an exhaustive account of the innumerable hesitations and temerities of a doctrine and a practice experienced through an abundant casuistry. With the hope of providing useful guidance in the understanding of today’s Private International Law, this monograph endeavors to present elements constituting the milestones that marked and shaped a rich and complex evolution.

Bertrand Ancel is Professor Emeritus of the University of Paris II Panthéon-Assas where he taught civil law, comparative private law and private international law, and where some fifteen years ago he set up the teaching of the history of Private International Law. The book Éléments d’histoire du droit international privé has just been published by LGDJ.

The recent report by the German newspaper Frankfurter Allgemeine Sonntagszeitung (FAS) on Jean-Claude Juncker’s dinner with British PM Theresa May has already triggered a lively political debate on both sides of the channel. For those not fluent in German, it is perhaps welcome that the FAS has taken the rather unusual step of publishing the article again in an English translation on its website here. For readers interested in the legal aspects of future negotiations on Brexit, it is probably most interesting that, in the course of the dinner, May alluded to British opt-in rights under Protocol 36 to the TFEU as a blueprint for “a mutually beneficial reciprocal agreement, which on paper changed much, but in reality, changed little”. It is not reported, though, whether the British Government would suggest a similar strategy with regard to Protocol 21 which deals with opt-in rights of the UK concerning the EU’s legislative acts on private international law as well. It is difficult to imagine how such an approach could be reconciled with the UK Government’s desire to be freed from the judicial surveillance by the CJEU, however. Anyway, the article states that the head of the Commission resolutely rejected any kind of legal window-dressing. So, it seems that Brexit will actually mean Brexit.

The following report has been kindly provided by Dr. Susanne Gössl, LL.M. (Tulane) and Daniela Schröder.

On April 6th and 7th, 2017, the first German conference for young scholars interested in Private International Law took place at the University of Bonn. The general topic was “Politics and Private International Law (?)”.

The conference was organized by Susanne Gössl, Bonn, and a group of doctoral or postdoctoral students from different universities. It was supported by the Institute for German, European and International Family Law, the Institute for Commercial and Economic Law and the Institute for Private International Law and Comparative Law of the University of Bonn the German Research Foundation (DFG), the German Society of International Law (DGIR), the Dr. Otto-Schmidt-Stiftung zur Förderung der Internationalisierung und der Europäisierung des Rechts, the Studienstiftung Ius Vivum, the Verein zur Förderung des Deutschen, Europäischen und Vergleichenden Wirtschaftsrechts e.V., and the publisher Mohr Siebeck.

Professor Dagmar Coester-Walten, LL.M. (Michigan), Göttingen, gave the opening speech. She emphasized that the relation between politics and conflict of laws has always been controversial. Even the “classic” conflict of laws approach (Savigny etc.) was never free from political and other substantive values, as seen in the discussion about international mandatory law and the use of the public policy exception. She outlined the controversy around the “political” Private International Law in the 20th century, resulting in new theories of Private International Law such as Currie’s “governmental interest analysis” and counter-reactions in continental Europe. Even after a review of the more political conflict of laws rules of the EU, Professor Coester-Waltjen came to the conclusion that the changes of the last decades were less a revolution than a careful reform in continuance of earlier tendencies.

The first day was devoted to international procedural law. First, Iina Tornberg, Helsinki, evaluated more than 20 arbitration awards from the International Chamber of Commerce (ICC). Her focus was on the use of the concept ordre public transnational. She came to the result that there is no reference to truly transnational values. Instead, domestic values are read into the concept of the ordre public transnational. Masut Ulfat, Marburg, claimed that the Rome I Regulation should mandatorily determine the applicable law in arbitration proceedings to ensure a high level of consumer protection and enhance EU law harmonization. In his responsio Reinmar Wolff, Marburg, to the contrary, had the opinion that this last statement contradicts the fundamental principles of international arbitration as a private proceeding and its dogmatic basis in party autonomy. In addition, he did not regard the application of Rome I as necessary: the level of consumer protection could be reviewed at the stage of recognition and enforcement of the arbitration award.

In the second panel Dominik Düsterhaus, Luxemburg, dealt with the question to what extend EU law and the interpretation through the CJEU lead to a “constitutinalisation” of Private International Law and International Procedure Law. He showed clear tendencies of such a charge with legal policy considerations of apparently objective procedural regulations. He criticized the legal uncertainty, arising from the fact that the CJEU does not always disclose his political considerations. Furthermore, only 4% of the referred cases include questions of Private International Law. Thus, the CJEU has only few possibilities to concretize his considerations. Jennifer Lee Antomo, Mainz, dedicated herself to the question whether an agreement of exclusive international jurisdiction is also a contractual agreement with the effect that it is possible to claim compensation for breach of contract. She answered generally in the affirmative in the case a claimant brings a suit in a derogated court. Nevertheless, court authority to adjudicate can be limited, especially within the EU due to the EU concept of res iudicata.

The second day was dedicated to conflict of laws. Friederike Pförtner, Konstanz, analysed human rights abuses by companies in third countries. She objected a broad use of “escape devices” such as the public policy exception or loi de police. As exceptions they should be applied restrictively. Reka Fuglinsky, Budapest, investigated the problem of cross-border emissions with a focus on the CJEU case law and the new Hungarian Private International Law Act. She scrutinized, inter alia, under which conditions a foreign emission protection permission has effects on the application or interpretation of national (tort) law. Another more factual problem is the later enforcement of domestic decisions in third countries.
Finally, Martina Melcher, Graz, analysed the relation between Private International Law and the EU General Data Protection Regulation, which is combining a private international law approach with a public international one. A separate conflict of laws rule should be introduced in the Rome II Regulation, following the lex loci solutionis instead of the territoriality principle. Tamas Szabados, Budapest, talked about the enforcement of economic sanctions by Private International Law. He characterized economic sanctions as overriding mandatory provisions (Article 9 (1) Rome I). In cases of third state (e.g. US) sanctions, an application was only possible as “being considered” in the sense of Article 9 (3) Rome I. A clear decision by the CJEU is necessary to ensure a transparent approach and a unitary EU foreign policy.

The conference concluded with the unanimous decision to organize further conferences for young scholars in Private International Law, probably every two years. The next conference will be held in Würzburg, Germany, in spring 2019.

The full texts of the presentations will be published in a forthcoming book by Mohr Siebeck. The presentations of the conference are available here (all in German).

It is one of the pinnacle theories of conflict of laws and when first introducing students to it, they almost invariably respond glassy-eyed. Renvoi has an unlimited ability to surprise parties and courts alike. It is best excluded, either by Statute, or by the parties, but frankly to be on the safe side: always and everywhere best by both. (Lest there are well considered arguments not to do so in a specific instance. As readers of my book now, the Brussels I Recast provisions on renvoi for choice of court (complicating less fori prorogati) is not such an instance: Handbook 2016, p.128-129, Heading 2.2.9.4.2).

At issue in Dankor [Dancor Construction, Inc. v. FXR Construction, Inc., 2016 IL App (2d) 150839] was the choice of court and governing law clause cited by the court at 44:

“The parties agree that this agreement was executed in Kane County, Illinois and shall be governed by the law of the State of Illinois. Any claims, lawsuits, disputes or claims arising out of or relating to this agreement shall be litigated in Kane County, Illinois.”

This clause could be a boilerplate or midnight clause except those routinely do exclude renvoi. ‘The law of the State of Illinois’ in the clause would then be followed by ‘excluding its choice of law rules’ or something of the kind. Why it was dropped here is entirely unclear. As Clifford Shapiro writes ‘So what happens when an Illinois general contractor fires a New York subcontractor who was working on a New York project under a subcontract that required Illinois law to apply and litigation to take place in Illinois? Unfortunately for litigants, what can happen is nearly three years of jurisdictional litigation in both New York and Illinois, and then dismissal of the Illinois case less than 60 days before trial with an order directing the case to be re-filed in New York.’

As the court notes (at 69) choice of court and choice of governing law are separate issues (for that reason they are als best deal with in clearly separated contractual clauses). Relevant precedent for the validity of the former is Rieker 378 Ill. App. 3d 77, 86 (2007). Applying Rieker, and following Section 187(2) of the Restatement (Second) of Conflict of Laws, the Court held (reference is best made to Clifford’s summary or to the judgment itself) that New York law applied to the validity of the clause, leading to its being void: New York law mandatorily prohibits application of another State’s law or litigation outside of the State for New York construction projects (Illinois incidentally has a mirror provision).

Need one say more? Renvoi is always best excluded. It would not necessarily have made this clause enforceable: ordre public discussions could always still be raised. However it sure as anything would have made the validity of the clause much more likely.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 1, Heading 1.4).

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

C. Thole: The recast of the European Insolvency Regulation

On 26 June 2017, the recast of the European Insolvency Regulation (reg. 2015/848) will enter into force. Although the recast does not entail radical changes, it is not confined to minor editorial amendments either, but adds some distinct new features to the EIR. This article sketches the corner points of the recast and attempts to identify new legal questions brought up by the new regulation.

M.-P. Weller: The Recast of the Brussels II bis Regulation

On 6/30/2016 the European Commission presented its draft of a revised version of the Brussels II bis Regulation. The proposals for reform primarily affect proceedings in matters of paternal responsibility. The article provides an outline and a discussion of the benefits and shortcomings of the essential changes proposed by the draft. In addition, the article critically reviews the Commission’s opinion on the lack of a need for a reform of the rules on matrimonial matters.

B. Heiderhoff: The Adjustment of German Law to the Matrimonial Property Regulations

Before the EU regulations on matrimonial property regimes (2016/ 1103) and on property consequences of registered partnerships (2016/1104) come into force on 29th January 2019, the national law must be adjusted. This contribution makes suggestions for the alignment of the conflict of laws rules as well as the introduction of the necessary procedural complements. In essence, it recommends adopting the same conflict of laws rules contained in the regulations also for those general effects of marriage that are not covered by the regulation. The procedural implementation should be effected in a separate new law and structured as parallel as possible to the law implementing the EU Succession Regulation.

M. Rohls/M. C. Mekat: The interplay between the provisions of the EU Service Regulation and the German Regulation on Judicial Assistance in Civil Matters (ZRHO) concerning the service of judicial documents to foreign States

The authors examine the interplay between the provisions of the EU Service Regulation and the German Regulation on Judicial Assistance in Civil Matters (Rechtshilfeordnung für Zivilsachen, abbreviated “ZRHO”) in the field of service of judicial documents to foreign states. The authors conclude that the options of service of documents as granted by the EU Service Regulation – within their scope – cannot be restricted by the ZRHO’s character as domestic administrative guidelines. Against this background, the authors call for a primary application of the provisions on the service of documents as foreseen in the EU Service Regulation, insofar as contrary national provisions in Germany (and other Member States of the EU) restrict a service of documents to foreign states.

G. Kühne: Some Observations on the 1986 German Reform of Private International Law

The German Private International Law Reform of 1986 has recently been the subject of discussions and contributions to this Review by various authors. The author of this article has contributed to the 1986 reform by a separate Draft, the so-called “Kühne-Entwurf” of 1980. In the following article he adds some supplementary observations on a few specific aspects concerning his Draft, in particular party autonomy in international matrimonial and succession law, where his proposals differed from those put forward by the German Council for Private International Law.

O. L. Knöfel: Public policy – The Concept of Extrajudicial Documents – Does the European Service Regulation Apply to Private Documents?

The article reviews a decision of the European Court of Justice (Case C-223/14 – Tecom Mican SL, José Arias Domínguez), dealing with the question whether the concept of “extrajudicial documents” (Art. 16 of the European Service Regulation of 13 November 2007) covers private documents. The Court answered this question in the affirmative, which is not convincing, as the notion of “extrajudicial documents” is habitually considered to encompass only documents emanating from authorities and judicial officers of a State. The author analyses the background of the notion of “extrajudicial documents” in the Hague Conventions on civil procedure and in other international legal instruments, and discusses the consequences of the decision of the ECJ for international legal assistance in civil and commercial matters.

S. Burrer: The question of cautio judicatum solvi in the case of German claimants domiciled outside of Germany and the Hague Convention on Civil Procedure

Following the amendment in 1998 to § 110 German Code of Civil Procedure to abolish the obligation on foreign claimants to furnish cautio judicatum solvi and the implementation of a new obligation on all claimants who are not residents in the EU/the EEA to provide security for costs, a question arose as to how German claimants domiciled outside of the EU/the EEA but domiciled in one of the signatory states of the Hague Convention on Civil Procedure (HCCP) should be treated. This question was neither discussed nor solved for several years. Initial views in both jurisprudence and literature refused an exemption of such expatriate German claimants as compared to nationals from other contracting states. Dissenting with these views, the Higher Regional Court of Munich decided in 2014 that such expatriate German claimants also enjoy exemption from the obligation to provide security where they are domiciled within the area of application of the HCCP due to the general principle of equality in Art. 3 para. 1 German Basic Law. This article critically discusses both the opposing view as well as the reasoning of the Higher Regional Court of Munich and shows by way of an analysis of the historic sources, a comparison with the legal situation in Switzerland and by purposive interpretation of the HCCP, that freedom from the security requirement within the scope of the convention is the correct outcome. This is not justified by applying the exemption in Art. 17 HCCP in conjunction with § 110 para. 2 no. 1 Code of Civil Procedure, but solely as a result of the commitment of enforcement in Art. 18 HCCP in conjunction with § 110 para. 2 no. 2 Code of Civil Procedure.

U. P. Gruber: Die Überleitung eines europäischen Mahnverfahrens in ein Erkenntnisverfahren

Pursuant to Art. 17 of the Regulation (EC) No 1896/2006, when the defendant lodges a statement of opposition to the European order for payment, the proceedings shall continue before the competent courts of the Member State of origin in accordance with the rules of ordinary civil procedure. In its decision C-94/14, the ECJ emphasizes that the transfer to ordinary civil proceedings is governed by the national laws of the Member States. The laws of the Member States also govern the extent of the verification obligations to which national courts are subject when determining their international jurisdiction. European law only sets certain minimum standards that must be observed, i.e. the rights of the defence and the effectiveness of European regulations. German law meets these standards; in the author’s opinion, also the claimant’s obligation to designate the competent court (§ 1090 ZPO) is in accordance with European law.

B. Rentsch/M.-P. Weller: Recognition of judgments in International Family Law – regulatory levels in Brussels IIbis vs. leveled balancing of public policy

The Brussels IIbis Regulation is unique in its intertwinement with both European and International Family Law instruments. Despite its independence both from International treaties on child protection and neighboring EU instruments, all regimes of child protection tend to coincide in International family law litigation. In its judgment P ./. Q, the ECJ makes an effort to distinguish, namely, protection mechanisms of the 1980 Hague Convention on the Civil Aspects of International Child Abduction, and the return regime provided by Art. 10 Brussels IIbis-Regulation. Given its advocacy for a clear-cut separation, the judgment still evidences how both regimes may end up converging on the level of public policy.

P. F. Schlosser: Standard Forms and unclearly drafted choice of law stipulations

Regarding private international law the court makes three statements of general interest.
1. The issue whether the applicability of a national legal system has validly been agreed is to be dealt with according to the law possibly designated.
2. This rule includes the inference of unclear drafting which, according to § 305c (German) BGB, leads to the solution, and hence in the case of choice of law stipulations, to the law most favorable for the partner of the user of general trade terms.
3. In this specific case the judgment relied on the common view of both parties that German law was the most favorable for the co-contracting partner. By arguing in this way the court could not reach the more general issue, which solution should be “more favorable” for the co-contracting party if the unclear stipulation refers to a complex multitude of terms or to a national legal system encompassing both, elements favorable as well as unfavorable for the co-contracting party. The author’s proposition is: to grant an option to the co-contracting party; but only to choose between the respective entirety of the standard terms or of the dispositions of a national legal system.

P. Huber: CISG: traditional analysis on the right to avoid and a new approach to set off (note on a judgment by the German Bundesgerichtshof)

The article discusses a judgment by the German Bundesgerichtshof on the Convention for the International Sale of Goods (CISG). The main issues covered are the buyer’s right to avoid the contract for non-conforming delivery by the seller and the issue of set off in a CISG contract. With regard to avoidance, the court mainly affirms the prevailing opinion. A rather new aspect, however, is that the court requires the seller who wishes to cure the non-conformity to give notice of that intention to the buyer. The author agrees with this part of the decision. With regard to set off, the court explores new ground by assuming that set off is governed by (general principles underlying) the CISG in cases where both claims are based on the same contractual relationship and where this contract is governed by the CISG. The author criticizes this part of the judgment and argues that set off should be left to the applicable (national) law.

A. Reinisch: On the Scope of Immunity of the Swiss National Bank before Austrian Courts and Central Banks in General. Case Comment on Austrian Supreme Court, 17 August 2016 – 8 Ob 68/16g.

The Austrian Supreme Court had an opportunity to rule on a novel issue of immunity from jurisdiction enjoyed by foreign central banks. It decided that public statements formulated by central bank officials supporting and explaining its foreign exchange policy were so closely connected to the bank’s sovereign tasks that they also qualified as non-commercial, iure imperii activities justifying their exemption from judicial scrutiny as a result of sovereign immunity principles. It thereby also confirmed the settled Austrian jurisprudence that foreign states enjoyed a limited, restrictive immunity for iure imperii acts only and that this standard was specifically relevant for foreign central banks where the 1972 Council of Europe Convention on State Immunity was applicable.

S. Corneloup: Validity and Third-Party Effect of Choice of Court Agreements. The Cour de cassation between European and national interpretation

The national courts of the Member States are often torn between, on the one hand, the necessity to respect the autonomous interpretation of EU law given by the ECJ and, on the other hand, the temptation to translate their own visions based on national particularities. This tension has become particularly obvious in the recent case-law of the French Cour de cassation with respect to the validity and third-party effect of choice of court agreements. In the matter of third-party effect of choice of court agreements, the Cour de cassation implements the restrictive rulings of the ECJ regarding international chains of contracts even though they are in contradiction with French civil law. In contrast, for asymmetric choice of court agreements the court lays down its own conditions of validity without concern for European harmonization. On both topics the current French case-law is subject to critical analysis.

S. Krebber: Jurisprudence for suits of an employee against the third person in tripartite constellations of employment law.

The decision of the chambre sociale of the Cour de cassation deals with jurisdiction under the regime of the Brussels Ibis regulation for suits of an employee against the third person in tripartite constellations. In such tripartite constellations, employment law may be applicable against the third party either because the third party is considered as an employer or because rights and duties also vis-à-vis the third party are vested in the employment relationship between the employer and his employee. Art. 20 et seq. Brussels Ibis regulation are applicable to such suits even though Art. 20 requires an employment contract.

K. Bälz: DIFC Court of Appeal, Urteil vom 25. Februar 2016 in Sachen DNB Bank ASA v (1) Gulf Eyadah Corporation (2) Gulf Navigations Holdings PSJC

A recent decision of the DIFC Court of Appeals opens up the possibility to recognize and enforce German court decisions in civil matters in the UAE by using the courts of the financial free zone DIFC as a conduit jurisdiction. In view thereof, there is now reciprocal enforcement in relation to the Emirate of Dubai within the meaning of sec. 328 of the German Code of Civil Procedure (ZPO).

Recognition of Foreign Administrative Acts, edited by / a cura di J. Rodríguez-Arana Munoz, M. Garcìa Pérez, J.J. Perna Garcìa, C. Aymerich Cano, Springer, 2016, ISBN 9783319189741, pp. 388, EUR 135,19.

This book presents an analysis of the concept of the administrative act and its classification as ‘foreign’, and studies the administrative procedure for adopting administrative acts in a range of countries in and outside Europe. While focusing on the recognition and execution of foreign administrative acts, the book examines the validity, efficacy and enforceability of foreign administrative acts at national level. The book starts with a general analysis of the issue, offering general conclusions about the experiences in different countries. It then analyses the aforementioned themes from the perspective of the domestic law of different European nations and a number of international organisations (European Union, MERCOSUR, and Andean Community). In addition, the book studies the role of the European Union in the progress towards the recognition and execution of foreign administrative acts, where the principle of mutual recognition plays a vital part. Finally, the book analyses the international conventions on the recognition and execution of administrative acts and on the legalisation of public documents.

Gerard McCormack, Andrew Keay, Sarah Brown, European Insolvency Law – Reform and Harmonization, Edward Elgar, 2017, ISBN: 9781786433305, 512 pp, GBP 95

Critically analysing the substantive law of insolvency in the EU countries as a whole, this book carries out horizontal cross-cutting analysis of the data gathered from a study of national insolvency laws. It selects particular areas for detailed discussion and considers the pros and cons of particular legislative solutions. Using the US and Norway as comparator countries, the expert authors identify areas where disparities in national laws produce problems that have impacts outside national boundaries. They analyse these against key policy goals including: improving economic performance throughout the EU; promoting a more competitive business environment; efficient asset allocation; and building more stable and sustainable human capital in terms of support for entrepreneurs and responses to consumer over-indebtedness. The book also considers possible reform and harmonization measures situated against the wider contextual background of the Capital Markets Union and the Europe 2020 agenda of promoting jobs and growth. Discerning and practical, European Insolvency Law will appeal to academics in both insolvency and finance as well as insolvency practitioners and lawyers. Its reform suggestions will be of interest to EU Member States’ government departments, while also providing a useful reference for consumer associations and debt charities.

A quick note to tickle the interest of the BIT community out there: I have come across a suggestion that recent initiatives on supply chain liability (for the notion see my earlier reblog of Penelope Bergkamp’s piece) may run counter the protection of foreign investment under Bilateral investment treaties. The analysis at issue is directed at Queensland’s chain of responsibility laws. While it is clearly a law firm’s marketing pitch (heyho, we all have to make rain somehow), the issue is real: supply chain liability laws can I suppose under circumstances qualify as regulatory takings just as any other new law.

Or can they?

Geert.

The LSE Law and Financial Markets Project will host a workshop on “International Finance, Party
Autonomy and Public Interest” on 18 May 2017. Speakers include Philipp Paech (LSE), Stéphanie Francq (Louvain-la-Neuve), Jan Kleinheisterkamp (LSE)  and Matthias Lehmann (University of Bonn).

Details are available here.

L’11 e il 12 maggio 2017 il Dipartimento di Giurisprudenza dell’Università Roma Tre ospita la nuova edizione dell’annuale incontro fra i giovani cultori del diritto internazionale. Il tema di quest’anno è Frontiere, spazi giuridici e territorio.

Le relazioni toccano, fra gli altri, anche temi di diritto internazionale privato.

Il programma completo dell’incontro è disponibile a questo indirizzo.

On 19 April 2017, Professor Cyril Nourissat and the lawyers Alexandre Boiché, Delphine Eskenazi, Alice Meier-Bourdeau and Gregory Thuan filed a complaint with the European Commission against France for a violation of several obligations arising from the European Rome III and Brussels IIbis Regulations, as a result of the divorce legislation reform entered into force on 1 January this year. The following summary has been kindly provided by Dr. Boiché.

“Indeed, since January the 1st, in the event of a global settlement between the spouses, the divorce agreement is no longer reviewed and approved in Court by a French judge. The agreement is merely recorded in a private contract, signed by the spouses and their respective lawyers. Such agreement is subsequently registered by a French notaire, which allows the divorce agreement to be an enforceable document under French law. From a judicial divorce, the French divorce, in the event of an agreement between the spouses, has become a purely administrative divorce. The judge only intervenes if a minor child requests to be heard.

The implications and consequences of this reform in an international environment were deliberately ignored by the French legislator, with a blatant disregard for the high proportion of divorce with an international component in France. The main violations arising from this reform are the following.

First of all, as there will be no control of the jurisdiction, anyone will be able to get a divorce by mutual consent in France, even though they have absolutely no connection with France whatsoever. For instance, a couple of German spouses living in Spain will now be able to use this new method of divorce, in breach of the provisions of the Brussels IIbis Regulation. The new divorce legislation is also problematic in so far as it remains silent on the law applicable to the divorce.

Moreover, the Brussels IIbis Regulation states that the judge, when he grants the divorce (and therefore rules on the visitation rights upon the children, or issues a support order, for instance) provides the spouses with certificates, that grant direct enforceability to his decision in the other member states. Yet, the new divorce legislation only authorizes the notary to deliver the certificate granting enforceability to the dissolution of the marriage itself, but not the certificate related to the visitation rights, nor the support order. This omission is problematic insofar as it will force the spouses who seek to enforce their agreement in another member state to seize the local Courts.

Last but not least, article 24 of the Charter of Fundamental Rights of the European Union makes it imperative for the child’s best interests to be taken into consideration above all else, and article 41 of the Brussels IIbis Regulation provides that the child must be heard every time a decision is taken regarding his residency and/or visitation rights, unless a neutral third party deems it unnecessary. Yet, under the new legislation, it is only the parents of the child who are supposed to inform him that he can be heard, which hardly meets the European requirements. Moreover, article 12 of the Brussels IIbis Regulation provides that, when a Court is seized whereas it isn’t the Court of the child’s habitual residence, it can only accept its jurisdiction if it matches the child’s best interests. Once again, the absence of any judicial control will allow divorces to be granted in France about children who never lived there, without any consideration for their interests. This might be the main violation of the European legislation issued by this reform.

For all those reasons, the plaintiffs recommend that the Union invites France to undertake the necessary changes, in order for this new legislation to fit harmoniously in the European legal space. In particular, they suggest a mandatory reviewal by the judge in the presence of an international component, such as the foreign citizenship of one of the spouses, or a foreign habitual residence. They would also like this new divorce to be prohibited in the presence of a minor child, an opinion shared by the French ‘Défenseur des Droits’“

The full text of the complaint (in French) is available here.