Droit international général

As already mentioned in my previous post, at the end of each year I publish an article (in German) about the Conflict of Laws developments in Germany of the last twelve months, covering more or less the year 2024 and the last months of 2023. This post is the second with an overview over those topics that seem to be most trending.

The two parts focus on the following topics (part 1 contained 1. and 2.):

1. Restitution of Money lost in Illegal Gambling
2. Applicable Law in the Dieselgate litigation
3. The (Non-)Valitidy of Online Marriages
4. New German conflict-of-law rules regarding gender afiliation / identity
5. Reforms in international name law

I will now give attention to the last three topics that focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

This is not a resumen of the original article as it contains a very detailed analysis of sometimes very specific questions of German PIL. I do not want to bore the readers of this blog with those specificities. Those interested in knowing those details can find the article here (no free access).

I would be really curious to hear whether these or similar cases are also moving courts in other jurisdictions and how courts deal with them. So, please write me via mail or in the comments to the post if you have similar or very different experiences on those cases.

Part 2 – Online Marriages, Gender Afiliation and Name Law

1.  The (Non-)Validity of Online Marriages

   One highly discussed topic of the last few years was the treatment of Online Marriages. Online Marriage refers to a marriage ceremony where the declarations of intent to marry are declared virtually by digital means. In the relevant cases, at least one of the (future) spouses was located in Germany when this intent was declared via Zoom, Whatsapp or similar means, while the rest of the ceremony, esp. the registration or the other acts of a registrar, was located in another State, esp. in Utah or Afghanistan. The case which the BGH (Supreme Court) decided in September 2024 was about two Nigerians that were in Germany while their declaration was registered in Utah, USA.

   In German law, the validity of such a marriage is determined in two steps: The substantial law of marriage follows the law of the nationality of each spouse (Article 13 EGBGB). The formal validity, in general, follows the classical alternative connecting factors of either the law of the main question (lex causae) or the law of the place of the relevant (lex locus), Article 11 EGBGB. Nevertheless, regarding marriages, a special rule applies regarding the formal validity: Article 13 para. 4 EGBGB provides that a marriage concluded in Germany necessarily follows German law regarding the form.

   As the requirements of each nationality’s laws where fulfilled, main question of the case was: Where does the celebration of a marriage actually take place if it is celebrated online?

   Before this question came up, the prevailing opinion and case law referred to the law of the place where the state authority or the religious authority were located (Coester-Waltjen/Coester Liber Amicorum Verschraegen (2023), 1 (6); vgl. auch Gössl NJW 2022, 3751; BGH 19. 12. 1958 – IV ZR 87/58 ), which in my opinion makes sense as these authorities make the crucial difference between a mere contract and a marriage conclusion from the point of view of German law. Nevertheless, the Supreme Court (BGH 25.9.2024 – XII ZB 244/22) and other courts (VG Karlsruhe 28.9.2023 – 1 K 3074/23; VG Düsseldorf 5.7.2024 – 7 K 2728/22) decided that the place of the marriage is located at the place where the spouses declare their intents to marry – with the consequence that Art. 13 para. 4 EGBGB applied in all cases where at least one spouse was located in Germany at the moment of the declaration.

   I am personally not convinced of the case. The Supreme Court distinguishes the decision from so-called proxy marriages where the declaration is made by the proxy and, therefore, not where the spouses are located but where the proxy is communicating. Nevertheless, this comparison is not convincing: German courts characterize the declaration of a proxy as a (merely) formal requirement in cases where the “proxy” has no power to decide but merely communicates the will of the spouse. Thus, in my opinion, the “proxy” is more a messenger than a real proxy and then the location of the declaration again is where the spouses (not the proxies) are in the moment they send the messenger. Furthermore, I am skeptical because the cases decided yet happened in migration contexts and might have been regarded differently with different parties.

   What are your thought? Do you have similar questions in your jurisdictions?

2. New German conflict-of-law rules regarding gender afiliation and “Mirin”

   Since November 2024 the German EGBGB has an explicit conflict of laws rule on gender affiliation / gender identity. It was introduced by the Gender Self-Determination Act. According to Art. 7a para. 1 EGBGB (here you find the provision in German), a person’s nationality’s law must be applied. That was more or less the unwritten rule, courts followed in Germany. The second paragraph introduces a very limited form of party autonomy: According to Art. 7a para. 2 EGBGB , a (foreign) person with habitual residence in Germany can choose German law for the change of gender or a related change of name.

   While this rule opens non-nationals to change their legal gender in Germany, it does not comply with the case law of the CJEU. In the decision Mirin (ECLI:EU:C:2024:845 – Mirin) the CJEU extended her case law regarding the recognition of names to gender changes that took place in another Member State. It establishes the obligation to recognise the change of gender validly made in another Member State.

    If a person changes the gender in another Member State without being a national of that State but (e.g.) living there, in Germany that gender reallocation cannot be accepted by Art. 7a EGBGB. An extension of Art. 7a para. EGBGB, i.e. a choice of law in favour of every habitual residence (not limited to a German one), might help, even though it probably will not include all situations possible where the obligation to recognize a gender afiliation can exist. This development again shows that the classical “recognition via conflict of laws” method is not able to implement the case law of the CJEU.

   What are your thoughts to those developments (Mirin and the new rule)?

3. Reforms in International Name Law

   Finally, there was a general reform of German name law and – in a last minute move my the legislator – in International Name Law as well. The new rules will enter info force in May 2025.

   At the moment, the law of the person follows her nationality (Article 10 para. 1 EGBGB – version until the end of April 2025). Furthermore, there is a very limited possibility of a choice of law for spouses regarding a common name (each spouses nationalities and German law if one has the habitual residence in Germany) and for children and their family names (nationality of each parent or other person with parental responsibility or German law, if one parent has the habitual residence in Germany).

   The new Article 10 para. 1 EGBGB changes the connecting factor: instead of nationality, habitual residence of the person determines her name, renvoi excluded. According to Art. 10 para. 4 EGBGB, instead, the person can choose the law of the nationality. The futher choice of law for spouses and children family names remains, but allows spouses to choose the law of the habitual residence of one of them, no matter whether it is the German one or not. A child’s name now can be chosen by the parents’ and the child’s nationality (new). In all those cases, persons with double nationality can choose both nationalities.

   Finally, Article 48 EGBGB contains a provision that implements the CJEU case law regarding the recognition of names. Until now, it provides that a person can choose to change the name into the name acquired during a habitual residence in another Member State of the European Union and entered in a civil status register there, unless this is manifestly incompatible with fundamental principles of German law.

   The new provision is almost identical, but some subtle but important changes were made: First, a person does not have to have their habitual residence in the Member State in which they acquired the name. Nationality is sufficient. This implements “Freitag“. Second, it no longer depends on whether the name was ‘lawfully’ acquired in another Member State, but only on the (possibly incorrect) entry of the name in a foreign register. This last requirement (in my opinion, see Gössl, IPRax 2018, 376) goes further that the CJEU requires, as the name has to be “validly acquired” in another Member State to create the obligation to “recognize” or accept that name. Nevertheless, the CJEU most probably will not object to a Member State that is more recognition/acceptance-friendly than necessary.

 

I hope you found this overview interesting. Next year, I am planing to provide similar articles, so any feedback is very welcome.

 

 

On 27 March 2025, the Court of Justice will hand down the judgment in case C-186/24, Auto1 European Cars. The request for a preliminary ruling arises in relation to insolvency proceedings opened by the Landesgericht Linz (Regional Court of Linz) on May 2022. The main dispute opposes the insolvency practitioner to Auto1, a company headquartered […]

 

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 27 March 2025 at 14:30 (Mexico City time – CST), 21:30 (CET time). The topic of the webinar is ‘Circular Economy and Private International Law’ and will be presented by Prof. Verónica Ruiz Abou-Nigm (in Spanish).

The details of the webinar are:

https://us02web.zoom.us/j/84118243541?pwd=GoZxHgM7OlZNOCaL1GUpaqsvVTYIK6.1

Meeting ID: 841 1824 3541

Password: AMEDIP

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

 

Post authored by Lance Huckabee, JD candidate and Global Legal Scholar at the University of Pittsburgh School of Law

When a foreign sovereign breaches a commercial contract with a private entity, what recourse does the wronged party have? In the United States, the Foreign Sovereign Immunities Act (FSIA) governs such disputes, providing an exception for commercial activity that causes a “direct effect” in the U.S. Yet, the definition of “direct effect” has remained elusive, leading to decades of judicial inconsistency and a deepening circuit split.

At the heart of this legal uncertainty is the Supreme Court’s decision in Republic of Argentina v. Weltover (1992), which sought to clarify the issue but instead left room for widely divergent interpretations. Some circuits have adopted a flexible, causation-based approach, analyzing whether a foreign state’s breach had an immediate consequence in the U.S. Others, like the recent D.C. Circuit decision in Wye Oak Tech., Inc. v. Republic of Iraq, have imposed rigid bright-line rules—specifically requiring that the contract contemplate the U.S. as a place of performance. This formalistic approach creates a dangerous loophole, allowing foreign states to structure agreements in a way that insulates them from jurisdiction. As a result, a U.S. business may suffer substantial financial harm from a foreign sovereign’s breach but find itself without legal recourse simply because the contract was silent on where payments were to be made.

This restrictive interpretation undermines the FSIA’s core purpose: to hold foreign sovereigns accountable when their commercial activities impact U.S. businesses. By prioritizing contractual language over economic reality, decisions like Wye Oak erode the ability of American companies to seek redress, making sovereign breaches effectively consequence-free. A proper interpretation of the FSIA should align with Weltover’s focus on causation, ensuring that foreign states cannot exploit technicalities to evade liability. If left uncorrected, the current trend risks turning the FSIA into little more than a paper shield—one that protects sovereigns rather than those they harm.

The Wye Oak decision exacerbates both intra- and inter-circuit inconsistencies, further complicating the FSIA’s application and weakening the commercial activity exception in breach-of-contract cases. By imposing a rigid bright-line rule, it unduly narrows the scope of what qualifies as a “direct effect,” creating uncertainty for U.S. businesses engaged in international commerce. With Wye Oak’s attorneys petitioning for certiorari in January 2025, the case presents a critical opportunity for the Supreme Court to resolve the longstanding circuit split on the FSIA’s direct effects clause.

The Dutch SC has today held that it is minded to refer to the CJEU on a variety of issues relating to Rome II’s applicable law rule for (follow-on damages claims) related to competition law infringement. The case is related to the air cargo cartel referral which I flag here and is a follow-up to the Opinion of the AG at the SC, which I discuss here.

The decision to refer is not definitive yet seeing as the judgment was held on a (intra-Netherlands) preliminary reference. Parties are now given the opportunity to comment on the intention to refer.

The SC first of all refers to the questions it has today already sent up to the CJEU, namely whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims. I briefly discuss these here. [4.2.8] clearly a qualification as one claim much facilitates the determination of applicable law and therefore arguably also the enforcement of EU competition law (reference to C-605/21 Heureka v Google).

It then addresses Rome II’s scope ratione temporis and the consequential conflit mobile which I discuss in my earlier post. Unlike its AG (who opined that there is no material difference in outcome hence no need to request an academic opinion, as it were, from Luxembourg), the SC does feel that this question needs to be referred to the CJEU, seeing as it held on yet another question referred to it that the Dutch residual rules do not lead to the outcome suggested by the AG.

Finally, the court intends to ask the CJEU to clarify Article 6(3) a (‘markets affected’ and b (conditions for claimant’s choice of law) Rome II, part of the complex layer of rules on the lex causae for follow-on (and stand alone) claims: in particular, the meaning of ‘markets affected’ and the conditions for choice of law which claimants may exercise.

As I discuss inter alia in this paper, Article 6 frankly is a mess, flying directly in the face of predictability so coveted by EU private international law.

[4.6.6] the SC refers to a perceived need for consistency between Article 6 Rome II and Article 7(2) Brussels Ia (e.g. in Volvo), a need which in my opinion is neither as established nor as obvious as the SC sees it.

This will be a very important case for the application of Rome II Article 6.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Palink.Dutch SC minded to refer to CJEU on the scope ratione temporis of Rome II (conflit mobile arising from continuous infringement of competition law; follow-on damages)ECLI:NL:HR:2025:414lnkd.in/eXyB3JTABackground here lnkd.in/emyQYWpG

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T12:26:03.537Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_palink-dutch-sc-minded-to-refer-to-cjeu-activity-7308820270905999362-FZ7w?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1903054432079647053

 

 

 

I discussed Vlas AG (at the Dutch Supreme Court)’s opinion in the Air Cargo case here. The Dutch Supreme Court today has decided to refer to the CJEU. The specific questions referred, concern the (effet utile of) the EU’s rules on effective enforcement of EU competition law and the qualification of continuous infringement of competition law as leading to one claim per victim, with multiple heads of damages, or rather one claim per infringement, each single handedly qualifying as a separate entitlement for damages.

The difference is relevant to conflict of laws given the ‘conflit mobile’. If the claims are separate, Rome II with its complex rule for competition law damages in Article 6, ratione temporis only applies to some of the claims. I discuss in my previous post how that leads to a complicated patchwork of applicable law.

The actual question referred enquires with the CJEU on whether continuous infringement leads to one albeit diverse claim as opposed to various albeit related claims, but adds ‘with a view to determining applicable law’. It will be interesting to see therefore how intensively the CJEU will engage with the Rome II issues on the specific case, which however is likely to be joined with the other case in which the SC is minded to refer and which I discuss here.

Geert.

EU Private International Law, 4th ed. 2024, 4.53 ff.

Lufthansa ea v SCC eaDutch Supreme Court refers to CJEU re qualification of continuous infringement of competition law, follow-on damages claimsWhether one albeit diverse claim as opposed to various albeit related claimsRelevant viz applicable law, Rome II.deeplink.rechtspraak.nl/uitspraak?id…

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-21T11:47:13.510Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_deutsche-lufthansa-et-al-v-stichting-cartel-activity-7308816006683000832-aU9Q?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1903050936391455031

On 24 February 2025, the Arbitration Act 2025 received Royal Assent. The Act implements the recommendations of the Law Commission for reform to the arbitral framework in England and Wales and Northern Ireland. It addresses the following matters: Law applicable to arbitration agreement; Impartiality: duty of disclosure; Immunity of arbitrator: application for removal; Immunity of […]

In IDBI Bank Ltd v Axcel Sunshine Ltd & Anor [2025] EWHC 442 (Comm) claimant is an Indian bank which, at the relevant times, operated outside India via a branch in the Dubai International Financial Centre – DIFC. Defendants are a company incorporated and registered in the British Virgin Islands, and a company incorporated and registered in India.

Second defendant argues ia that a relevant letter of comfort must not be enforced seeing as its performance would contravene Indian law.

Persey J discussed among others therefore whether an English court should disregard a letter of comfort due to A3(3) or A9(3) of the assimilated Rome I Regulation. These are the Articles which in the case of Article 3(3)  give priority to domestic law in a ‘purely domestic’ contract subject to a third country law:

Where all other elements relevant to the situation at the time of the choice are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

and in the case of Article 9(3):

Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

In the case of Article 3(3), domestic law trumping lex voluntaris is mandatory, while in the case of Article 9(3), the override is optional, at the discretion of the court.

As for Article 3(3), the judge refers in particular to Banco Santander Totta. It was there held that for Art 3(3) to apply, all elements of a claim needed to be within the other country. [105]

In the present case there are elements with connections to the BVI and Dubai, such that Art 3(3) does not apply. Thus, for example, the CFA was entered into by the Bank’s Dubai branch office, the LoC was addressed to the Bank’s Dubai branch office, Axcel was incorporated in the British Virgin Islands, Axcel was required to repay its loan to an account in Dubai, and the facilities under the CFA were used by Siva to repay the debt owed by WinWind (a Finnish company), and thereby to discharge the WinWind Guarantee and Facility (both contracts being governed by English law). The same discharge was used by Siva to obtain the discontinuance of the WinWind Proceedings (before the English court).

([106] the judge doubts very much whether the contended effect of Indian regulation is what defendant purports it to be).

As for A9(3), [108]

I am satisfied that Article 9(3) also does not apply in this case. It is only applicable where the obligations ‘have to be‘ performed in a country where performance would be unlawful. As I have already observed above, performance under clause 3 ought to have taken place in Dubai, not India. Had performance been required to take place in India, the FEMA Regulations are not regarded by India as crucial to safeguarding its public interests. [the judge refers here to expert evidence]

Moreover, obiter [109] even had Article 9(3) applied, the judge would have used his discretion not to grant priority to the Indian rules:

In circumstances where the Indian Courts would enforce the guarantee and/or a judgment of this Court, I am satisfied that there is no basis for giving Siva relief under Art 9(3).

This judgment is a good illustration of what Articles 3(3) and 9 might lead to – although not on the facts of the case.

Geert.

Handbook of EU Private International LAw, 4th ed. 2024, 3.73 ff.

https://bsky.app/profile/gavclaw.bsky.social/post/3ljz7jp7o7c2j https://www.linkedin.com/posts/geert-van-calster-60abab9_judgment-discussing-ia-whether-english-court-activity-7304791236215795712-tb2M?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA https://x.com/GAVClaw/status/1899025501504651508

The fourth issue of 2024 of the Dutch journal of private international law, Nederlands Internationaal Privaatrecht, was published a few weeks ago. It comes with the following contributions An editorial is written by Mathijs ten Wolde (Professor of private international law and international transport law at the Groningen University) who provides an overview of the […]

The Irwin Law “Essentials Series” is a collection of texts about Canadian law aimed at a broad audience: it includes law students and also lawyers, judges and academics.  It has been quite successful over the past twenty years.  In 2024 Irwin Law was acquired by University of Toronto Press.  It has continued the Essentials Series and the use of the Irwin Law imprint.

It has now published the third edition of Conflict of Laws written by Professor Stephen G.A. Pitel of Western University, Canada.  The second edition was published in 2016 and so this edition updates almost a decade of activity, mainly from courts across Canada.  The major change is that the chapter on declining jurisdiction has been reorganized and updated in light of the Supreme Court of Canada’s decisions in Douez v Facebook, Inc (2017) and Haaretz.com v Goldhar (2018).  All chapters have been updated to reflect new decisions, legislative changes and recent scholarship.

More information is available here.  For those outside Canada, the book is a clear and accessible source of comparative conflict of laws analysis.

The 21st century has witnessed a remarkable surge in academic scholarship on private international law in Asia. This is not to say that significant studies on the subject were absent before this period. However, in recent decades, Asian scholars have brought renewed vigour and depth to the field, establishing private international law as a critical area of legal inquiry on the continent.

A testament to this intellectual flourishing is Hart Publishing’s extensive series on private international law in Asia, featuring no fewer than 16 volumes with Professors Anselmo Reyes and Paul Beaumont as Series Editors. These works serve as a rich repository of comparative legal thought, offering valuable insights that extend far beyond Asia’s borders. Scholars and practitioners seeking inspiration from diverse jurisdictions will find these books to be an essential resource. Moreover, other publishers have also contributed to this growing body of literature, further amplifying Asia’s voice in the global discourse on private international law.

Having read and reviewed many of these works on the blog, I am continually struck by the depth of scholarship they offer. Each new book reveals fresh perspectives, reinforcing the notion that private international law is not merely a regional concern but a truly global conversation.

As someone deeply engaged with African private international law, I have found immense value in these Asian publications. The parallels between Asia and Africa—particularly in terms of legal pluralism and cultural diversity—make these studies both relevant and instructive. The cross-pollination of ideas between these regions has the potential to strengthen the development of private international law in both continents.

What is most striking about this surge in Asian scholarship is its outward-looking nature. No longer confined to internal discussions, private international law in Asia is now exporting ideas, influencing legal developments worldwide. This is a phenomenon that deserves both recognition and emulation. The rise of Asian scholarship in private international law is not just an academic trend—it is a pivotal force shaping the future of global legal thought.

In my contribution to the EAPIL online seminar discussing Ekatarina Aristova’s excellent Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts (OUP 2024), I flagged the discussion by Dr Aristova in Chapter 6 of the book, of one of the objections to jurisdiction exercised by ‘European’ or by extension courts in the Global North, in cases involving human rights and environmental abuse by business located in the Global South. That is the argument that such exercise of jurisdiction is a form of neocolonialism.

This same argument was used by counsel for defendants in Da Silva & Ors v Brazil Iron Ltd & Anor [2025] EWHC 606 (KB). The case involves mining pollution in Bahia state by Brazil Iron, domiciled at England. Background to the case is here. [71] Bourne J summarises counsel’s argument:

For this Court to accept the Claimants’ attempt to litigate the case in this country would, [counsel] submits, be contrary to requirements of judicial comity and would be an exercise of judicial colonialism. In that regard he referred to Altimo Holdings v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 PC, where Lord Collins said at [97]:

“Comity requires that the court be extremely cautious before deciding that there is a risk that justice will not be done in the foreign country by the foreign court, and that is why cogent evidence is required.”

Justice Bourne did not directly address the ‘judicial colonialism’ vocabulary yet in accepting jurisdiction for the E&W courts and rejecting the forum non conveniens challenge, he clearly disagrees with it.

Defendants’ attempt at rebuffing jurisdiction of course centres upon the Court of Appeal’s recent application of the test in cases like these in Limbu v Dyson and the approach, as was to be expected, attempts to distinguish Dyson and /or employ the one or two levers to support a forum non challenge, indicated by that judgment.

The judge summarises [100]

“an examination of “connecting factors” leads to the conclusion that Brazil is the forum with which this action has the more real and substantial connection, although there are factors leaning in both directions.”

Emphasis was put by defendants ia on the risk  of irreconcilability of the outcome of the English proceedings with an ongoing Brasilian ‘Civil Public Action’ – CPA, a well as an ordinary civil claim introduced in Brasil.

The judge acknowledges that risk [101]. He refers in this context to Vedanta which flagged it as an important issue.  (See also the extensive discussions on irreconcilability in Municipio viz the then applicable European rules of Brussels Ia (Articles 33-34)).

However he finds it outweighs the fact that the Defendants in England and are served there “as of right” (the actor sequitur forum rei principle). Also, control of  the Brazilian company Brazil Iron Mineração Ltda (“BIML”), which operates the Fazenda Mocó iron ore mine in Mocó that is core to the claim, is held to be an issue which will be important in the proceedings and which heavily leans towards England. [101] Although “the Defendants’ directors may not live in the UK, it would be a logical assumption that a significant amount of evidence about the control issue may emanate from England and be in English.”

Overall, arguments which counted for Brasil are

[103] “the most important issues in the case are likely to concern (1) the operation and regulation of the Mine and (2) its impact on the Claimants. That does not mean that control will not be an important issue, but ultimately the claims concern environmental damage and the relevant environment is in Brazil. Those matters obviously occurred in Brazil and will be the subject of witness evidence and documentary evidence in that country.”

[104] “it is agreed that Brazilian law applies to the dispute. The relevant regulatory framework also is that of Brazil, or Bahia State. It therefore appears highly likely that there will be expert witnesses from Brazil, whether or not there are also experts from any other country. I do not overlook the fact that the English courts are well accustomed to applying foreign law. Nevertheless, there may be significant differences between the applicable systems of law – civil law and common law – and that favours the jurisdiction of the Brazilian courts. There may also be issues about Quilombola status and although I do not place much emphasis on that fact, it would be a theme with which the English courts would be wholly unfamiliar.” The latter refers to the issue of protection of indigenous communities under Brasilian law.

[105] “it would plainly be easier and cheaper for ..evidence to be received in Brazil, in Portuguese.”

However the one strong argument standing out in favour of jurisdiction of the English courts is [106]-[107]

that there is a real risk that the Claimants will not be able to obtain substantial justice in Brazil. That means that Brazil, despite its closer connection with the case, is not the appropriate forum in which it can most suitably be tried in the interests of the parties and for the ends of justice.

The reason, in brief summary, is that the evidence reveals a real risk that the Claimants will not be able to fund, or obtain funding for, legal representation of the kind necessary to litigate these claims to a proper conclusion.

This is not [108] down to any criticism of the Brasilian legal system, nor lack of integrity of that system or delay, neither of which the judge suggests exist. Rather, [110] the relatively small size of the claims, [111] the small number of claimants (implicit reference here by the judge to Municipio), [112] the limited means of the claimants, [113] complexity of the case in terms of both liability and control, [114] despite the judge not accusing the Brasilian system of delay, it has been shown that it does take a long time for Brasilian courts to hold on issues of such complexity.

[115] in England the case will go forward under a conditional fee arrangement – CFA, while [116] ff the expert evidence on balance of the possibility to find appropriate funding in Brasil including via legal aid, on the whole shows that that is unlikely.

[134] Comity is not considered to be an obstacle:

“As I have said, it is not premised on any criticism of the legal system in Brazil. Instead, it is founded on the fact that the economics of litigating this claim in the two jurisdictions are significantly different.”

[146] Lack of representation in a particular forum clearly is the Leitmotiv for the judge’s decision, and it is one based on a detailed consideration of the various options presented to him.

A judgment of note!

Geert.

EU private international law, 4th ed. 2024, Chapter 7.

 

Catarina Oliveira Da Silva ea v Brazil Iron ea [2025] EWHC 606 (KB)High Court applying Limbu v Dyson gavclaw.com/2024/12/13/l… rejects forum non challenge in mining pollution case Reject defendants' suggestion that jurisdiction for E&W courts would amount to 'judicial colonialism'

— Geert Van Calster (@gavclaw.bsky.social) 2025-03-16T10:41:59.200Z

https://www.linkedin.com/posts/geert-van-calster-60abab9_court-rules-claim-against-brazil-iron-can-activity-7306988440980516864-PSld?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAHHS6oB7DOA8jUedLLahLDL6cEwepyHYwA

https://x.com/GAVClaw/status/1901222249807462509

 

The German Parliament has adopted a reform of the law of names, including private international law, to enter into force in mid-2025. It includes a ground-breaking change from the classic connecting factor, nationality, to habitual residence. This seems to be a new trend: the incoming Austrian coalition government also plans a similar shift. The Text […]

This article was written by Prof. William S. Dodge (George Washington University Law School) and first published on Transnational Litigation Blog. The original version can be found at Transnational Litigation Blog. Reposted with permission.

On March 7, 2025, Judge Stephen N. Limbaugh, Jr. (Eastern District of Missouri) entered a default judgment for more than $24 billion against the People’s Republic of China and eight other Chinese defendants for hoarding personal protective equipment (PPE) during the early days of the COVID pandemic in violation of federal and state antitrust laws. The Eighth Circuit had previously held that the Foreign Sovereign Immunities Act (FSIA) barred most of Missouri’s claims but that the hoarding claim fell within the act’s commercial activity exception.

Missouri now has the judgment against China that it wanted. But Missouri may find that judgment hard to enforce. As discussed below, there appear to be significant procedural problems with the judgment that at least some defendants might raise. More broadly, the properties of foreign states and their agencies or instrumentalities are entitled to immunity from execution under the FSIA. Immunity from execution is broader than immunity from suit, and it is not clear that any of the defendants have property in the United States that can be used to satisfy the judgment.

The Defendants and the Claims

On April 21, 2020, Missouri brought four COVID-related claims against nine Chinese defendants: the People’s Republic of China, the Chinese Communist Party, the National Health Commission, the Ministry of Emergency Management, the Ministry of Civil Affairs, the People’s Government of Hubei Province, the People’s Government of Wuhan City, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. The original complaint asserted four claims under Missouri tort law: (1) public nuisance, (2) abnormally dangerous activity, (3) breach of duty by allowing the transmission of COVID, and (4) breach of duty by hoarding PPE. The district court initially held that all the claims were barred by the FSIA, but the Eighth Circuit reversed on the hoarding claim.

The FSIA governs the immunity of foreign states and their agencies and instrumentalities from suit in federal and state courts, as well as the immunity of their properties from execution to satisfy judgments. Some of the FSIA’s provisions distinguish between foreign states and their political subdivisions on the one hand and their “agencies or instrumentalities” (including “organs” and majority state-owned companies) on the other. Other provisions extend the same immunities to both categories.

Of the nine defendants, the Eighth Circuit held that seven of them were part of the Chinese state. China itself is clearly a foreign state, and its National Health Commission, Ministry of Emergency Management, and Ministry of Civil Affairs are part of the state. The People’s Government of Hubei Province and the People’s Government of Wuhan City fall into the same category because they are political subdivisions. “The Chinese Communist Party may look like a nongovernmental body at first glance,” the court of appeals wrote, but it is “in substance” the same body that governs China and therefore properly considered part of the state. The remaining two defendants, the Wuhan Institute of Virology and the Chinese Academy of Sciences, are legally separate from the Chinese government “but still closely enough connected” to qualify as “organs” and thus as “agencies or instrumentalities” of a foreign state covered by the FSIA.

Under the FSIA, all nine defendants are immune from suit in the United States unless an exception to immunity applies. The Eighth Circuit found that only one exception applies—the commercial activity exception in 28 U.S.C. § 1605(a)(2)—and that it applies only to Missouri’s claim for hoarding PPE. The court reasoned that hoarding was the kind of activity that private parties can engage in and that the complaint sufficiently alleged that the hoarding had a direct effect in the United States.

After the Eighth Circuit’s decision, I pointed out some of the difficulties that Missouri would face on remand trying to prove its tort claims, including whether Missouri law applied under Missouri choice-of-law rules, whether Missouri law established a duty of care for these defendants, whether the defendants breached any such duty of care, and whether any such breach was the actual and proximate cause of Missouri’s damages. I don’t know whether Missouri’s attorney general reads TLB, but on the eve of trial Missouri changed the legal basis for its hoarding claim from common-law tort to federal and state antitrust law. Antitrust claims are not subject to state choice-of-law rules.

The District Court’s Judgment

The Chinese defendants decided not to appear and defend against Missouri’s claims. Section 1608(e) of the FSIA provides: “No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.” This provision is supposed to ensure that the U.S. court does not simply accept the plaintiff’s allegations and instead tests the evidence to make sure that judgment is warranted. Some courts have held, however, that they may accept as true a plaintiff’s “uncontroverted evidence.” That is what Judge Limbaugh did here.

Relying on the plaintiff’s evidence, the district court concluded that “China engaged in a deliberate campaign to suppress information about the COVID-19 pandemic in order to support its campaign to hoard PPE from Missouri and an unsuspecting world.” The court noted that local officials closed schools and quarantined doctors and patients in December 2019, while at the same time other officials were denying that COVID could be spread between human beings. The district court further concluded that “Defendants engaged in monopolistic actions to hoard PPE through both the nationalization of U.S. factories [in China] and the direct hoarding of PPE manufactured or for sale in the United States.” The court pointed to evidence that China stopped exporting PPE and started importing a lot of it.

The court found the evidence sufficient to establish liability for monopolization under federal antitrust law. Pursuant to 15 U.S.C. § 15c, Missouri’s attorney general was also permitted to bring a federal antitrust claim parens patriae on behalf of the citizens of Missouri. The court also found the evidence sufficient to establish liability for monopolization under Missouri antitrust law, which the court noted is to be construed “in harmony with” federal antitrust law.

Relying on an expert report on damages submitted by Missouri, the court found that between 2020 and 2051 Missouri either had lost or would lose $8.04 billion in tax revenue because of the impact of China’s hoarding of PPE on economic activity. The court further found that hoarding caused Missouri to spend an additional $122,941,819 on PPE during the pandemic. The court added these amounts and multiplied by three—because federal and state antitrust laws permitted treble damages—for a total damages award of $24,488,825,457.

Problems with the District Court’s Analysis

I see a number of problems with the district court’s analysis. First, the court treated the defendants as an undifferentiated group, seemingly following Missouri’s supplemental brief, which refers simply to the nine defendants collectively as “China.” But the individual defendants in this case knew different things and did different things (and Missouri does not appear to have argued that there was a conspiracy allowing the acts of one defendant to be attributed to the others). The fact that local officials seem to have been aware that COVID could be transmitted from human to human, for example, does not establish that the central government knew this. Indeed, a U.S. intelligence report in 2020 found that local officials hid information about the virus from Beijing. Similarly, the fact that the central government was nationalizing PPE factories, limiting exports, and buying PPE abroad does not show that the Wuhan Institute of Virology or the Chinese Academy of Sciences was doing so.

Second, the damages calculations seem fanciful. The opinion contains no discussion of causation. How can one disentangle the impact of China’s hoarding PPE on Missouri from other factors that contributed to the spread of the pandemic there, for example the fact that Missouri was among the last states to adopt a stay-at-home order? Establishing hoarding’s impact on Missouri’s economy and derivatively its impact on Missouri’s tax revenues is fraught with complications, especially when estimates are projected to the year 2051.

Third, the court failed to consider whether trebling damages is allowed under the FSIA. Section 1606 provides that “a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.” In other words, while the FSIA allows the trebling of damages against the Wuhan Institute of Virology and the Chinese Academy of Sciences, it may not allow the same against China itself or the other governmental defendants.

But China did not make any of these points, or others that it would undoubtedly have thought of, because it decided not to appear. The China Society of Private International Law did file two amicus briefs, but the district court did not mention them. I can understand China’s reluctance to submit to the authority of a U.S. court (including to the discovery of evidence) in a case that it no doubt feels is politically motivated. But the decision not to appear gave Missouri an enormous advantage.

What Happens Now?

So, what happens now? There are probably many possibilities, but I will discuss just three: (1) the possibility that some of the defendants might seek to set the judgment aside for improper service; (2) the possibility of enforcing the judgments against the defendants’ property in the United States; and (3) the possibility of similar suits in other states.

A Rule 60(b) Motion Addressing Service of Process?

China could move to set aside the judgment under Rule 60(b)(4) on the ground that the judgment is void for lack of subject matter jurisdiction. The factors that made China decide not to appear in the first place would likely dissuade it from raising all the issues that it could raise in a 60(b) motion. But it might make sense for some of the defendants to raise service of process in such a motion, particularly the Wuhan Institute of Virology and the Chinese Academy of Sciences, which, as explained below, are likely to be the most vulnerable to enforcement of the judgment.

The FSIA has rules for serving foreign states and their agencies or instrumentalities. For foreign state and their subdivisions, Section 1608(a) lists four means of service that must be tried in order. In this case, the first three were not available. (China refused to execute a request for service under the Hague Service Convention on the ground that doing so would infringe its sovereignty, as Article 13 of the Convention allows it to do.) So, the district court ordered service through diplomatic channels, which was then made on all the defendants except the Chinese Communist Party, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. I see no defects in service here.

With respect to the remaining three defendants, the district court authorized service by email pursuant to Rule 4(f)(3). There are three problems with this. First, the district court treated the Chinese Communist Party as a non-governmental defendant for purposes of service, but the Eighth Circuit later held that it is instead a foreign state for purposes of the FSIA. After the Eighth Circuit’s decision, Missouri argued that its service on China through diplomatic channels should count as service on the Chinese Communist Party as China’s alter ego. Judge Limbaugh seems to have accepted this assertion without discussion, but the Communist Party could certainly raise the issue in a Rule 60(b) motion.

The second problem is that Rule 4(f)(3) allows a district court to order alternative means of service only if those means are “not prohibited by international agreement.” As Maggie Gardner and I have explained repeatedly, the Hague Service Convention prohibits service by email, at least when the receiving state has objected to service through “postal channels” as China has done. District courts are divided on this, however, and Judge Limbaugh cited a number of district court cases holding (wrongly) that email service is permitted. A Rule 60(b) motion raising this point would be unlikely to convince him, but it might succeed on appeal to the Eighth Circuit.

The third problem is that service by email in this case is inconsistent with the FSIA. For agencies and instrumentalities, like the Wuhan Institute of Virology and the Chinese Academy of Sciences, Section 1608(b)sets forth the permitted means of service. It appears that the first two were not available and that the district court relied on Section 1608(b)(3)(C), which allows service “as directed by order of the court consistent with the law of the place where service is to be made” (emphasis added). But Chinese law does not permit private parties to serve process by email.

When this issue arose after the Eighth Circuit’s decision, Missouri argued that the language of Section 1608(b)(3)(C) “is nearly identical to Federal Rule of Civil Procedure 4(f)(3), which Missouri previously invoked in its request to serve WIV and CAS by email.” This was misleading. Rule 4(f)(3) refers to means of service that are “not prohibited by international agreement,” whereas Section 1608(b)(3)(C) refers to means of service that are “consistent with the law of the place where service is to be made,” that is Chinese law. Even if service by email were permitted by the Hague Convention—which, as discussed above, it is not—that would not establish that service by email is consistent with Chinese law. Judge Limbaugh did not address this issue in his judgment and might be open to persuasion on a Rule 60(b) motion.

A Rule 60(b) motion limited to service of process issues might have some appeal for China. Although it would require becoming involved in the U.S. litigation, it would not involve arguing the merits of China’s actions during the pandemic or submitting to U.S. discovery. China would be able to make purely legal arguments that the Chinese Community Party was not properly served under Section 1608(a) and that the Wuhan Institute of Virology and the Chinese Academy of Sciences were not properly served under Section 1608(b) because email service is prohibited by both the Hague Service Convention and by Chinese law.

Alternatively, defendants could raise the service of process issues, and perhaps other procedural defects, at the enforcement stage if and when Missouri attempts to execute the judgment against any of their properties in the United States. One advantage of waiting for enforcement is that the arguments would be heard by a different judge with no psychological commitment to past decisions. Also, if defendants were to file a Rule 60(b) motion before Judge Limbaugh and lose, they might be precluded from raising the same issues again at the enforcement stage. On the other hand, a successful Rule 60(b) motion could void the judgment once and for all for some of the defendants, whereas saving these arguments for the enforcement stage could require the defendants to raise them anew in multiple enforcement proceedings.

Immunity from Execution

Defendants also have the option of asserting that any property Missouri attempts to seize is immune from execution. As a general matter, federal court judgments are enforceable against a judgment debtor’s assets anywhere in the United States. But judgments against foreign states and their agencies or instrumentalities are subject to the FSIA’s rules on immunity from execution.

Specifically, Section 1610(a)(2) provides that “[t]he property in the United States of a foreign state … used for a commercial activity in the United States, shall not be immune … from execution, upon a judgment entered by a court of the United States or of a State … if … (2) the property is or was used for the commercial activity upon which the claim is based.” This means that the properties in the United States of China, its ministries and subdivisions, and the Chinese Communist Party are immune from execution unless those properties were used to hoard PPE. I find it hard to imagine a situation in which that would be true.

The immunity for properties owned by agencies or instrumentalities is not as broad. Section 1610(b)(2) permits execution against “any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States” if the judgment was rendered under the FSIA’s commercial activities exception (as this judgment was) “regardless of whether the property is or was involved in the act upon which the claim is based.” This means that the properties in the United States of the Wuhan Institute of Virology and the Chinese Academy of Sciences would be subject to execution if those defendants are engaged in commercial activities in the United States even if the properties themselves were not used to hoard PPE. Thus, these two defendants, unless they can get the judgment set aside for improper service as discussed above, are potentially more exposed to execution than the others.

It is worth emphasizing the district court’s judgment against these nine defendants is enforceable only against properties owned by these nine defendants. Missouri cannot execute its judgment against property in the United States simply because the property is Chinese owned. This is clear from the Second Circuit’s decision in Walters v. Industrial & Commercial Bank of China (2011), another case involving a default judgment against China under the FSIA, in which the court of appeals held that plaintiffs could not use assets belonging to agencies or instrumentalities of China to satisfy a judgment against China itself.

Walters relied on the Supreme Court’s decision in First National City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec) (1983). As Ingrid Brunk has explained, Bancec stands for the proposition that U.S. courts must generally respect the corporate separateness of foreign states and their agencies or instrumentalities. Indeed, the Supreme Court in Bancec quoted the FSIA’s legislative history, which says specifically that the FSIA “will not permit execution against the property of one agency or instrumentality to satisfy a judgment against another, unrelated agency or instrumentality.”

If a judgment against an agency or instrumentality of a foreign state cannot be executed against the property of another agency or instrumentality of that foreign state, it necessarily follows that the judgment cannot be executed against property not belonging to any agency or instrumentality of that foreign state. For example, Smithfield Foods is a major pork producer operating in Missouri. Its property cannot be seized to satisfy this judgment. Smithfield Foods is owned by a private Chinese conglomerate, but Smithfield Foods was not a defendant in this action, and so its property is not subject to execution.

Copycat Cases

In addition to Missouri’s efforts to enforce this judgment, it is likely that the defendants will face copycat cases in other states. Mississippi filed a similar complaint against the same defendants in May 2020. Again, the defendants chose not to appear. On February 10, 2025, Judge Taylor B. McNeel (Southern District of Mississippi) held an evidentiary hearing. It remains to be seen whether Judge McNeel will scrutinize Mississippi’s arguments more carefully than Judge Limbaugh did.

Conclusion

$24 billion is a big number. But it seems highly unlikely that Missouri will ever see a penny of it, given the FSIA’s rules on immunity from execution. Missouri may, nevertheless, be able to harass these defendants—and potentially other Chinese parties holding property in the United States—by filing actions to execute the judgment even if those actions ultimately prove unsuccessful.

Last week, friend-of-TLB Ted Folkman had this to say about the Missouri judgment over at Letters Blogatory:

When we think about these cases, we have to think about what it would be like if the shoe were on the other foot. In 2021, the US and other western countries were accused of hoarding the COVID vaccine. Should the United States have been amenable to suit in China or elsewhere because it prioritized the public health needs of its own people? The technical term for taking seriously the question, “what if the shoe were on the other foot?” is comity. We need more of it.

Ugljesa Grusic (UCL) has kindly shared the following invitation with us.

On 24 March 2025, at 6pm UK time, Marta Pertegás (Maastricht University; University of Antwerp; a fulltime member of the Permanent Bureau of the Hague Conference on Private International Law between 2008 and 2017) and Alex Mills (UCL; a Specialist Editor of Dicey, Morris and Collins on the Conflict of Laws, with particular responsibility for, inter alia, the rules on the recognition and enforcement of foreign judgments) will give a seminar on The 2019 Hague Judgments Convention – English and EU Perspectives at the Faculty of Laws, University College London. The event will be delivered in a hybrid format and the readers of the blog are welcome to join either in person or on line.

The seminar is part of the International Law Association (British Branch) Lecture Series and will be chaired by Ugljesa Grusic.

On 1 July 2025, the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters will enter into force in England and Wales. This historic regime establishes a general treaty basis for the recognition and enforcement of civil judgments between Convention States, supplementing the existing national rules and the Hague Choice of Court Convention 2005. Perhaps most significantly, it will provide common rules for the recognition and enforcement of judgments from England and Wales in EU Member States, and conversely, for EU Member State judgments to be recognised and enforced in England and Wales, to some extent filling a ‘gap’ created by Brexit.

This seminar will address the significance of this development from both an English and EU perspective, examining the main features of the 2019 Convention and considering the opportunities and challenges it presents.

To register, please follow this link.

On 24 March 2025, at 6pm UK time, Marta Pertegás (Maastricht University; University of Antwerp; a fulltime member of the Permanent Bureau of the Hague Conference on Private International Law between 2008 and 2017) and Alex Mills (UCL; a Specialist Editor of Dicey, Morris and Collins on the Conflict of Laws, with particular responsibility for, […]

The following post was kindly provided by Hannah Buxbaum, Vice President for International Affairs, Professor of Law and John E. Schiller Chair, Indiana University, and is cross-posted on tlblog.org

As was widely reported yesterday, the Trump administration permitted two planes carrying Venezuelan deportees to continue on their way to El Salvador after receiving a judicial order to turn the flights back to the United States. A story in Axios quotes an administration official who explains that they were not in fact “actively defying” the judge—the order just came too late, since the planes were already out of U.S. airspace. This seems to be an extraterritoriality argument, suggesting that the judge lacks authority to order an action to take place outside U.S. borders.

The administration has this completely wrong. The judge is ordering the administration to take action inside the United States—that is, to instruct the planes to turn around. That instruction will in turn cause something to happen elsewhere (the pilots will change course), but that doesn’t make the order impermissibly extraterritorial. This is exactly the same the basis on which courts in garden-variety civil disputes order parties subject to their jurisdiction to procure evidence or turn over assets that are located abroad. Moreover, since the planes were reportedly over international waters at the time the order was entered, compliance would not have required any actions by a foreign actor or within the territory of another state—in other words, it wouldn’t have created a conflict of laws.

Now that the deportees are already in El Salvador, that picture is more complicated, since local authorities there might refuse to take action. Even the existence of such a conflict, though, doesn’t mean that Judge Boasberg’s order exceeds his authority. It remains to be seen whether any of the other justifications the White House offered up for ignoring that order are any more compelling, but the argument that it didn’t apply once the planes had left the United States is certainly not.

For further leading expert input on extraterritoriality see one of our previous posts here.

The decision in case C-57/24, Ławida, has been scheduled for delivery on 27 March 2025. The Sąd Okręgowy w Gliwicach (Poland) has referred to the Court of Justice the following question: Must Article 13 of Regulation (EU) No 650/2012 [on succession] be interpreted as meaning that it does not apply in a situation where, in […]

Benedikt Schmitz (University of Groningen) has kindly shared the following reminder of his Call for Participants with us.

The project concerns the interpretation of Article 6 (2) Rome I Regulation in the EU Member States and is very limited in nature. Time commitments are therefore very limited. Click here for more information.

We are still looking for scholars from Croatia, Czechia, Estonia, Finland, France, Ireland, Italy, Luxemburg, Malta, Romania, and Slovenia. Danish scholars may also participate on the basis of Article 5(2) Rome Convention.

The team currently consists of established scholars from 15 (former) EU Member States:

• Austria: Andreas Schwartze (Leopold-Franzens-Universität Innsbruck)
• Belgium: Cedric Vanleenhove (Universiteit Gent)
• Bulgaria: Ilia Lassin (Sofia University St. Kliment Ohridski)
• Cyprus: Nicholas Mouttotos (Universität Bremen)
• Germany: Benedikt Schmitz (Rijksuniversiteit Groningen)
• Greece: Kostas A. Rokas (Aristotle University of Thessaloniki)
• Hungary: Ferenc Szilágyi (Pázmány Péter Katolikus Egyetem Budapest)
• Lithuania: Katarzyna Bogdziewicz (Mykolo Romerio universitetas Vilnius)
• Netherlands: Benedikt Schmitz (Rijksuniversiteit Groningen)
• Poland: Anna Wysocka-Bar (Uniwersytet Jagiello?ski Kraków)
• Portugal: Anabela Gonçalves (Universidade do Minho)
• Slovakia: Dominika Moravcová (Trnavská univerzita v Trnave)
• Spain: Anna María Ruiz Martín (Universitat Oberta de Catalunya) & Beatriz Añoveros Terradas (Universitat de Barcelona)
• Sweden: Gunnar Bramstång (Lunds Universitet)
• UK: Ross Pey (Western University Ontario)

Interested in participating?

Contact Benedikt Schmitz through email: b.schmitz@rug.nl

At the end of each year I publish an article (in German) about the Conflict of Laws developments in Germany of the last twelve months, covering more or less the year 2024 and the last months of 2023. I thought it would be interesting for the readers of this blog to get an overview over those topics that seem to be most trending.

The article focuses on the following topics:

1. Restitution of Money lost in Illegal Gambling
2. Applicable Law in the Dieselgate litigation
3. The (Non-)Valitidy of Online Marriages
4. New German conflict-of-law rules regarding gender afiliation / identity
5. Reforms in international name law

I will start in this post with the two first areas that are mainly dealing with questions of Rome I and Rome II while in my follow-up post I will focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

This is not a resumen of the original article as it contains a very detailed analysis of sometimes very specific questions of German PIL. I do not want to bore the readers of this blog with those specificities. Those interested in knowing those details can find the article here (no free access).

I would be really curious to hear whether these or similar cases are also moving courts in other jurisdictions and how courts deal with them. So, please write me via mail or in the comments to the post if you have similar or very different experiences on those cases.

Part 1 – Illegal Gambling and “Volkswagen”

I will start with the two areas that are mainly questions of Rome I and Rome II while in my follow-up post I will focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

1. Restitution of Money lost in Illegal Gambling

Cases involving the recovery of money lost to illegal online gambling are being heard in courts across Germany and probably across Europe. Usually the cases are as follows: A German consumer visits a website offering online gambling. These websites are in German and offer German support by phone or email with German phone numbers etc. However, the provider is based in Malta or – mainly before Brexit – Gibraltar. After becoming a member, the consumer has to open a bank account with the provider. He transfers money from his (German) account to the account in Malta and uses money from the latter account to buy coins to gamble. In Germany, in order to offer online gambling, you need a licence under German law. The operators in these cases are usually licensed under Maltese law but not under German law.

• In terms of applicable law, Rome I and Rome II are fairly straightforward. Since the question in this case is whether the plaintiff can claim the return of money lost on the basis of an illegal and therefore void contract, Rome I is applicable as it also governs claims arising from contracts that are ineffective or of doubtful validity. It is therefore irrelevant that German law would provide for restitution on the basis of unjust enrichment (Leistungskondiktion), which generally is a non-contractual obligation that falls within the scope of Rome II. As we have a consumer and a professional, Article 6 Rome I has to be applied. As I described the case above, there are also little doubts that the website is (also) directed to Germany and therefore German law as the country of the habitual residence of the consumer applies. To this conclusion came, e.g. the German BGH, but also the Austrian OGH.
• The application of German law leads to the invalidity of the contract pursuant to sec. 134 BGB, which declares a contract null and void if it violates a law that prohibits that contract. In order to determine whether the law prohibits this concrete gaming contract, the question arises as to the geographical scope of the prohibition on offering gambling/casino contracts without a German licence. As this prohibition is based on German public law, it is limited to gambling/casino games that take place on German territory. So far, German courts have applied the German prohibition in cases where the consumer was in Germany when playing. One court (LG Stuttgart, 11.9.2024 – 27 O 137/23, 18.09.2024 – 27 O 176/23) even considered it sufficient if the consumer was in Germany when opening the bank account with the gaming provider from which the money was then transferred to the games. The court ruled that it did not matter whether the consumer played from Germany, whether the provider was located abroad or whether the bank account from which the money was finally transferred to the game was located in another country. It appears that Austrian courts have similar cases to decide, but see this point differently, the Austrian OGH decided that the Austrian rules prohibiting unlicensed gambling are limited to providers based in Austria.
• As you probably know, the Austrian OGH made a request to the CJEU to determine the place of the damage (Article 4 para. 1 Rome II) in a case where the consumer/player transfers the money from the local bank account to the account of the Bank in Malta and then makes payments from this second bank account. So far, German courts were hesitant to take this road. The way over unjust enrichment resulting from a invalid contract has the charming effect that you do not have to apply Rome II’s general tort rule (Article 4 para. 1 Rome II) and dive into the discussion how to determine the place of economic damages. Under German law, however, Rome II may be relevant in cases where the claim is not based on unjust enrichment but on intentional damage inflicted in a manner offending common decency (vorsätzliche sittenwidrige Schädigung), a special offence which is more difficult to prove (sec. 826 BGB). In some few cases, where sec. 826 was in question, courts still did try to avoid the discussion how to locate this economic loss. One simply applied the law of the place of the habitual residence of the consumer/gamer as the play from which the transfer from the first bank account was effected (OLG Karlsruhe 22.12.2023 – 19 U 7/23; 19.12.2023 – 19 U 14/23). Other courts avoided the discussion altogether by applying Article 4 para. 3 Rome II directly – leading to an accessory connection to the law applied to the gambling contract (LG Hagen, 5.10.2023).

One footnote to the whole scenario: There is a case pending at the CJEU that might make the whole discussion superfluous (Case C-440/23). The German practice of distributing gambling licences might be classified as unlawful under EU law at least for some older cases. The question by the CJEU to be decided is whether this results in a ban on reclaiming losses from this gambling.

2. Place of Damage in Volkswagen Cases

The Volkswagen emission scandal cases, in German dubbed “Dieselgate”, are about claims for damages that end customers are asserting against Volkswagen (or other vehicle manufacturers). The damage is that they bought a car with a manipulated defeat device which, under certain conditions of the type-approval test, resulted in lower emissions than in normal operation. As a result, vehicles with higher emissions than permitted were registered and marketed. Volkswagen is currently being sued throughout Europe. Most cases are initiated by consumers who did not buy directly from the manufacturer but through a local dealer, so there is no direct contractual link. As German law is in some respects restrictive in awarding damages to final consumers, it seems to be a strategy of Volkswagen to come to German law.

• Rome I: As far as Volkswagen argued that there is an implicit contract between Volkswagen and the end consumer resulting from a warranty contract in case with a Spanish end buyer, a German court did not follow that argument or at least came to the conclusion that this is a question of Spanish law as such a warranty contract would have to be characterized as a consumer contract in the sense of Article 6 para. 1 Rome I Regulation (LG Ingolstadt 27.10.2023 – 81 O 3625/19)
• In general  German courts apply Article 4 para. 1 Rome II and determine the law of the damage following the CJEU decision in VKI  and MA v FCA Italy SpA: The place of damage is where the damaging contract is concluded or, in case the places are different, where the vehicle in question is handed over. The BGH (and lower instance courts, e.g. OLG Dresden, 07.11.2023 – 4 U 1712/22 – not free available online) followed that reasoning. One court had to consider whether, instead, Article 7 Rome II Regulation (environmental damages) would be applicable, as the increased emissions would also damage the environment. The LG Ingolstadt did not follow that line of argument, as the damage claimed in the concrete case was a pure economic loss, not an environmental damage.

What are your thoughts? How do courts treat these cases in your jurisdictions (I guess there are many cases as well)? Do you have different or similar issues in discussion?

 

Stay tuned for the second part of this article which will move to trending topics in family law…