Droit international général

On 2 June 2022, the Court of Justice of the EU handed down another judgment interpreting the EU Succession Regulation. In the T.N., N.N. case (C-617/20) provisions on the declaration of the waiver of succession were analyzed for the first time. The Opinion to the case was delivered by the AG Szpunar.

The deceased was habitually resident in Germany. When he died, his wife has initiated succession proceedings in Germany, the country of his habitual residence within the meaning of Article 4 of the Succession Regulation. German law, as applicable pursuant to Article 21(1) of the Regulation, perceived the wife and two nephews, resident abroad, namely in the Netherlands, as heirs. The nephews were informed about the succession proceeding by a letter from the German court dated of 19 June 2019. In September 2019 the nephews made a declaration of waiver before the court in the Netherlands. They have informed the German court about these declarations by a letter written in Dutch in December 2019. Copies of declarations were attached.

In January 2020, the German court informed them that it had not been possible to take account of their declaration as documents should have been accompanied by a translation into German. At this stage of the proceeding, pursuant to Article 1944 Bürgerliches Gesetzbuch (the German Civil Code), the nephews were deemed to have accepted the succession, as the six months period applicable to cross-border cases, has elapsed before the originals of the declarations were presented.

The higher instance court had doubts whether this is correct and has asked, inter alia, the following preliminary question:

Does a declaration concerning the waiver of succession by an heir before the court of a Member State that has jurisdiction for the place of his or her habitual residence, which complies with the formal requirements applicable there, replace the declaration concerning the waiver of succession to be made before the court of another Member State that has jurisdiction to rule on the succession, in such a way that when that declaration is made, it is deemed to have been validly made (substitution)?

Along the general rules on jurisdiction and applicable law which apply to “the succession as a whole”, as indicated in Articles 4, 10, 21, 22, 23, the Succession Regulation contains specific rules with respect to declarations which might be made by the heirs or legatees (namely, concerning waiver of the succession, acceptance of the succession and designed to limit the liability of the heir). These rules are analysed by the CJEU in the commented case.

In accordance with Article 13, in addition to the court having jurisdiction in the succession case in general, the courts of the Member State of the habitual residence of any person who, under the lex successionis, may make, before a court, such a declaration, has jurisdiction to receive such declarations where, under the law of that Member State, such declarations may be made before a court. Then, pursuant to Article 28, such declaration is valid as to form where it meets the requirements of either lex successionis (Article 28(a)) or the law of the habitual residence of the heir making this declaration (Article 28(b)).

The Court of Justice explains the very practical solution provided for in Article 13 which considers the situation of the heirs or legatees in cross-border cases, in particular that it may well happen that they live in another Member State than the one, with which the deceased was connected and therefore has jurisdiction in succession proceedings (based on habitual residence – Article 4, or location of assets – Article 10 and other circumstances). Not to force the heir to travel abroad in order to, for example, simply waive the succession, this Article provides for “an alternative forum of jurisdiction which aims to enable heirs (…) to make their declarations concerning the acceptance or waiver of succession before a court of the Member State in which they have their habitual residence” [para. 37].

Additionally, the rule on alternative jurisdiction is “complemented by a conflict-of-laws rule contained in Article 28” [para. 38], which is “conceived in such a way as to recognise the validity of a declaration concerning the waiver of succession either where the conditions laid down by the law on succession are satisfied (…) or where the conditions laid down by the law of the State of the habitual residence of the heir are satisfied (…)” [para. 39]. The way this rule is construed remine other private international law rules contained in numerous instruments and aimed at favoring a validity (favor validitatis) of a juridical act, for example Article 11(1) of the Rome I Regulation on formal validity of a contract or Article 1 of the HCCH Convention on Form of Wills on formal validity of dispositions of property upon death. Article 28 of the Succession Regulation provides that the declaration made by the heir is valid as long as it conforms with requirements provided for in one of the listed laws (and not cumulatively by both of them)

The Court of Justice also noted that “there is a close correlation between those two provisions, with the result that the jurisdiction of the courts of the Member State of the habitual residence of the heir to receive declarations concerning the waiver of succession is subject to the condition that the law on succession in force in that State provides for the possibility of making such a declaration before a court. If that condition is satisfied, all the steps to be carried out before a court of the Member State of the habitual residence of the heir wishing to make such a declaration are determined by the law of that Member State” [para. 40]. Any other understanding of the provision would deprive it of its practical effect.

As the Succession Regulation does not provide for a mechanism for the communication of declarations to the court having jurisdiction, it is the heir or a legatee that should “assume the burden of communicating the existence of those declarations to the authorities responsible for the succession” [para. 47], and therefore, such declaration will “produce legal effects before the court having jurisdiction to rule on the succession, provided that that court has become aware of the existence of that declaration” [para. 39]. It seems however that there is no requirement as to the originality or translation of the declaration that must be strictly applied.

Taking all the above into account the CJEU ruled that:

a declaration concerning the waiver of succession made by an heir before a court of the Member State of his or her habitual residence is regarded as valid as to form in the case where the formal requirements applicable before that court have been complied with, without it being necessary, for the purposes of that validity, for that declaration to meet the formal requirements of the law applicable to the succession.

The understanding of the Succession Regulation presented by the Court of Justice in this judgement is practical and very much in line with the idea of facilitating the lives of heirs and legatees in cross-border cases. As usually happens we tend to be accustomed to rules and procedures of our domestic succession laws, whereas the application of the Regulation requires much more flexibility.

Private International Law Festival

16 to 17 May 2022

Edinburgh, United Kingdom

by Michael Cremer and Samuel Zeh*

After two years of living through a global pandemic, the very first Private International Law Festival from 16 to 17 May 2022, held in Edinburgh, was the first opportunity for many to finally meet other scholars and exchange ideas in person again. The event was hosted by the University of Edinburgh in cooperation with the Max Planck Institute for Comparative and International Private Law (Hamburg) and organized primarily by Verónica Ruiz Abou-Nigm (Edinburgh).

As its name implies, the Festival was meant as an opportunity for scholars from all around the world to celebrate the many facets of the discipline. This was reflected in the broad range of presentations, which featured both traditional and novel approaches to Private International Law (PIL). The two-day Festival included seven panels, the Forum Conveniens Annual Lecture at Edinburgh Law School and a book launch. Thematically, it encompassed not only sustainable development, decolonial theory and migration governance, but also Private International Law in Scotland, same-sex relationships and many other topics.

After a welcome by the host Verónica Ruiz Abou-Nigm who emphasized the overarching goal to celebrate the discipline, the first cluster of the event focused on Private International Law and Sustainable Development. Hans van Loon (Institut de Droit International) gave an overview of the relationship between Private International Law and the UN Sustainable Development Goals 2030. He outlined the challenge of reconciling economic development with sustainability and the contribution PIL can make towards this goal. In the previous year, he had, together with Ralf Michaels and Verónica Ruiz Abou-Nigm, worked on the project “The Private Side of Transforming our World – UN Sustainable Development Goals 2030 and the Role of Private International Law” which culminated in a Conference and an open-access book publication. As the coordinator of that project, Samuel Zeh (Max Planck Institute for Comparative and International Private Law, Hamburg) elaborated on the lessons learned and insights gained in the process. Afterwards, María Mercedes Albornoz (MacCormick Fellow, Edinburgh Law School / CIDE, México) offered a Global South perspective on Sustainable Development and Private International Law. The first thematic panel concluded with Ralf Michaels discussing whether facilitation and regulation as key objectives of PIL can be reconciled with the quest for sustainability.

Ralf Michaels then switched to chair the second panel of the day on Decolonising Law and Private International Law. It was started off by Roxana Banu (Queen Mary University of London) with Reflections on Private International Law’s Colonial History. She made the case for expanding the intellectual history of Private International Law both geographically and in terms of actors, while at the same time situating PIL theories and techniques in a colonial context. Subsequently, Nicole Štýbnarová (University of Helsinki / University of Oxford) elaborated on how Private International Law has transitioned from arguing about transnational marriages from relativist arguments in the 19th century to universalist language and how this transition was sparked by the changing imperial economy. María Julia Ochoa Jiménez (Universidad de Antioquia) addressed PIL in Latin America and explained its neo-colonial character by tracing its historical development. Finally, Sandrine Brachotte (Sciences Po Paris) laid out a method for decolonizing PIL with non-secular worldviews. She suggested a pragmatic approach that goes from specific cases to theory, thereby altering the concepts of Private International Law.

After the lunch break, two panels – chaired by Gerry Maher (University of Edinburgh) and Verónica Ruiz Abou-Nigm – were dedicated to Private International Law in Scotland in accordance with the location of the Festival. Scholars from several Scottish universities gave an overview of their respective Private International Law curricula and their current topics of research. This included Paul Beaumont and Jayne Holliday (University of Stirling), Justin Borg-Barthet and Patricia Živkovi? (University of Aberdeen), Verónica Ruiz Abou-Nigm (Edinburgh Law School), Janeen Carruthers and Bobby Lindsay (University of Glasgow). Additionally, Kirsty Hood (The Faculty of Advocates) and Michael Clancy (Law Society of Scotland) emphasized the importance of Private International Law for legal practitioners in Scotland.

Like every grand festival the Private International Law Festival also took place on different stages: The main stage in the Usha Kasera Lecture Theatre at Edinburgh Law School was reserved for the Forum Conveniens Annual Lecture. It was delivered by Máire Ní Shúilleabháin (University College Dublin) on Same-Sex Couples in the Cross-Border Context: Closing the Gaps in the Conflict of Laws. Living up to this title the lecture was a true tour de force as it covered virtually all aspects of the topic. It brought together common law perspectives from Irish, Canadian and UK law with the European regulations and requirements of negative integration and cross-border recognition as established by the judgments of the CJEU. Thus, the lecture sparked an animated debate which was chaired by Carlos Esplugues Mota (Universitat de València) and continued well into the subsequent Forum Conveniens Reception.

The second day of the Festival opened with a cluster on a new project that the panelists are working on: Private International Law and Sustainable Migration Governance. Verónica Ruiz Abou-Nigm, Jinske Verhellen (Ghent University), Gülüm Özçelik (Bilkent University), Laura Carballo Piñeiro (University of Vigo), Ulla Liukkunen (University of Helsinki) and Hans van Loon presented their findings up until now and future plans for this project. This includes issues such as migrants’ right to legal identity, access to social security schemes in a cross-border context and circular migration.

The topic of migration was also a focus of the second panel of the day, which was chaired by Kasey McCall-Smith (Edinburgh Law School) and offered Interdisciplinary Latin American Perspectives on Coloniality and Migration. Isadora Dutra Badra Bellati (Max Planck Institute for Comparative and International Private Law, Hamburg) analyzed a Brazilian Supreme Court decision on the legality of the outsourcing of labor through the lens of decolonial theory. This was followed by Valentina Rioseco (University of Edinburgh) discussing whether the obligation of states to allow entry and stay in international and inter-American human rights law can pave pathways for regular migration. Afterwards, Gabriela García García (University of Aberdeen) spoke about The Latin American Landscape of Migrant Integration and Inclusion and proposed a baseline framework for domains and indicators of integration in Latin America. Next, Nuni Vieira Jorgensen (Queen Mary University of London) shed light on the effects that the closure of land borders has on transnational family arrangements and family reunifications: “protected borders” tend to interrupt care arrangements to the detriment of transborder families. As last speaker on the panel, Marilda Rosado (Universidade do Estado do Rio de Janeiro) gave an overview of initiatives that support migrants in Brazil and foster cooperation.

The next highlight of the Festival was the book launch of the much awaited “Guide to Global Private International Law” (Hart Publishing). The editors, Paul Beaumont and Jayne Holliday, presented the book, which not only provides an overview of PIL from a global perspective, but also offers many suggestions for its further unification. They were joined by multiple contributors, some in the room and some connected virtually, who gave short insights into their chapters and their workflow. Keeping in the spirit of the Festival, this was a true celebration of the hard work and dedication that have gone into compiling this guide.

The last panel of the Festival was chaired by Alex Mills (University College London) and covered New Horizons for Private International Law. First, Nicolas Rennuy (University of York) analyzed the Law of Social Security Coordination and showed how there are multiple links between the field and Private International Law, including the type of conflict rules, the connecting factors, the scope of the rules and conceptions of indirect choice of law. Afterwards, Michael Cremer (Max Planck Institute for Comparative and International Private Law, Hamburg) made the case for Private International Law perspectives in patent law, illustrating this through a conflict of laws reconstruction of the right of priority stemming from the 1883 Paris Convention on the Protection of Industrial Property. Next, Rosario Espinosa (Universitat de València) presented her work on Sorority, Equality and Private International Law explaining how Private International Law can be used as a tool to promote equality and solidarity between women. The last contribution was made by Toni Marzal (University of Glasgow) who proposed A Relations-First Approach to Choice of Law and criticized the established positivist perspective that dominates the current understanding of PIL.

Sadly, every celebration must come to an end. The last words of the Festival belonged to the driving force behind it: Verónica Ruiz Abou-Nigm. It was not before a big applause for her work and effort in organizing the event so quickly and perfectly, that everybody bid farewell.

The Private International Law Festival in Edinburgh was a resounding success. It was itself the perfect example of the multiple facets of Private International Law, that it set out to celebrate. The presentations not only covered an extensive number of different topics, but also displayed both traditional and novel methodologies. They put new topics on the agenda of the discipline, while also shedding new light on existing debates. In addition, the Festival combined truly global projects like the launch of the Guide to Global PIL with the focus on the Scottish perspectives on PIL. At the same time, it also provided the opportunity for intergenerational exchange, with many younger researchers presenting their work and joining the debate.

For many it was the first in person meeting with fellow scholars after the pandemic. The Festival provided a worthy setting for this return. Hopefully, it will become a regular event.

* Michael Cremer and Samuel Zeh are both research associates and PhD studens under Ralf Michaels at the Max Planck Institute for Comparative and International Private Law, Hamburg

This post was contributed by Francesco Pesce, who is a professor at the University of Genoa.

The very first meeting of the Hague Conference on Private International Law’s (HCCH) Special Commission (SC) on the Practical Operation of the 2007 Child Support Convention and 2007 Maintenance Obligations Protocol was held from 17 to 19 May 2022. The event was attended by over 200 delegates representing HCCH Members, Contracting Parties and Observers from all regions of the world.

Following an invitation coming from the Secretary General of the HCCH, for the first time EAPIL participated as an Observer to a meeting of the Hague Conference.

The meeting resulted in the adoption of over 80 Conclusions & Recommendations, providing guidance on a wide range of issues relating to the implementation and practical operation of these instruments.

Among other things, the Special Commission took into a specific consideration some issues raised in the Position Paper on Child Support and Maintenance Obligations prepared by the EAPIL Working Group specifically created for that purpose.

More in detail, HCCH Members and Contracting Parties discussed some problems concerning the effective access to legal assistance for children under the Convention, for the recovery of maintenance obligations arising from a parent-child relationship.

Firstly, the interpretation of the concept of ‘residence’ (Article 9) was reaffirmed to be necessarily consistent with Article 53, which prescribes uniformity in the interpretation and application of the Convention, due to its international character. In this perspective, it has been recalled that the intention behind the use of (simple) ‘residence’ is to provide the easiest and the widest access to Central Authorities and make it is as easy as possible to apply for international recovery of child support, so that a child has the possibility to require financial support wherever he or she may be living and should not have to satisfy a strict residence test in order to apply for assistance to receive it (cf. Borrás-Degeling Report, para. 228). Based on this assumption, the SC confirmed that Article 9 does not always indicate a single national Central Authority: when the creditor/child is permanently living in two different Contracting States, then it does not prevent a choice of most appropriate (State, and subsequently) Central Authority to submit the application. The creditor may take into account many factors in making this decision, bearing in mind that support is usually needed for a prolonged period of time. Such a case is considered under para. 7 of the Conclusions & Recommendations, expressly referred to the situation of a child studying abroad, when the debtor habitually resides or has assets in another Contracting Party than the State of either the residence or habitual residence of the creditor.

Secondly, the SC noted that some doubts were raised by the responses to the Questionnaire of August 2019 on the practical operation of the 2007 Child Support Convention, on the concept of ‘creditor’ with reference to the existing difference between those systems where it is the child him/herself who qualifies as ‘creditor’ acting for the protection of his/her own interests (even if procedurally through an adult (parent) acting on his/her behalf) and, on the other hand, those States providing that a dependent child cannot be the creditor, so that the action for the maintenance recovery is brought by the parent on his/her own In this respect, the SC recalled that, in the case where the child is an applicant, information concerning the name of the non-debtor custodial parent should be written under “Other information” in Section 10 of the Recommended Form (cf. Conclusions & Recommendations, para. 8);

Lastly, the SC addressed the issue of family status, with a specific reference to recognition and enforcement of maintenance decisions concerning relationships not provided by the law of the requested State. On this matter, para. 24 of the Conclusions & Recommendations simply reaffirms that, in accordance with Article 19(2) of the 2007 Convention, maintenance obligations arising from these relationships can still be recognised and enforced without recognising such relationships per se. The specific issue of (same-sex) marriages and other relationships – such as cohabitations – that could be equated to marriage in the national law of the State of origin was raised by the Position Paper, but it was not deepened during this first meeting of the SC: in fact, spousal support was not considered a priority at this stage (cf. para. 67).

The Organization of American States (OAS) has issued a call for applications for the XLVII Course on International Law, which will take place from 1 to 12 August 2022 in Rio de Janeiro, Brazil at Universidade Federal do Rio de Janeiro –  in Spanish and English (no interpretation services will be offered).

As indicated in the convocation: “For over forty years, the Course on International Law has offered attorneys and internationalists from around the Americas the opportunity to promote analysis, exchange ideas and generate an open discussion on relevant topics of international law in general and of the Inter-American System in particular. This, in addition to, an opportunity to expand their professional networks, develop their abilities in an inclusive, diverse, and multicultural environment.  Students may interact in an academic setting with the most prestigious jurists from the Americas and Europe, counting among them judges of international courts, members of the Inter-American Juridical Committee, professors of public and private international law from the Americas and Europe, diplomats, as well as officials of various international organizations.”

The deadline for applications is 17 June 2022 (at 5:00 pm U.S. Eastern Standard Time). The selected students will be notified at the end of June. Space is limited. Enrollment in the course and study materials are free of charge but students will be responsible for paying their transportation, food expenses and lodging costs. For more information, click here.

The current draft program includes speakers such as the president of UNIDROIT Governing Council Maria Chiara Malaguti and Vicepresident of the Inter-American Juridical Committee José Moreno Rodríguez. A draft program is available here.

EU Cross-Border Succession Law, edited by Stefania Bariatti, Ilaria Viarengo and Francesca C. Villata, was just released. Providing a comprehensive and dedicated analysis of the EU law on cross-border successions and benefitting from the insight of internationally renowned scholars, this volume is a welcome addition to the already thriving ‘Elgar European Law and Practice series’.

The abstract reads as follows:

With cross-border successions becoming increasingly common in the context of the European Union, this timely volume offers a systematic practical analysis of how cross-border successions should be treated, including an examination of which courts may establish jurisdiction over succession disputes and which law governs such disputes. Studying cross-border successions in the context of estate planning and in the opening and liquidation of a succession, the volume examines the specificities of the European Certificate of Succession, contextualising it within its interface with the national laws and practices of EU Member States.

Key Features:

• Practical analysis of the provisions of the EU Succession Regulation
• Consideration of issues at the intersection between cross-border successions and taxation
• Analysis of the specificities of the European Certificate of Succession and its interface with national laws
• Study of cross-border successions in the context of both estate planning and the opening and liquidation of a succession
• Contextualization of the EU Succession Regulation in the framework of the national law and practice of several EU Member States

A comprehensive study of EU cross-border succession law with global reach, this volume is an invaluable source of reference and guidance for practitioners specialising in estate planning, family law and property law, including judges, notaries, tax specialists and lawyers. Scholars of European succession law and conflict of laws will also find this volume’s critical analysis an instrumental tool in their research.

EU Cross-Border Succession Law, Stefania Bariatti, Ilaria Viarengo and Francesca C. Villata (eds), Elgar European Law and Practice series (2022) 576 pp.

Benedetta Cappiello from the University of Milan has recently published a book on European private international law and non-contractual liability for AI systems (AI Systems and Non-contractual Liability: A European Private International Law Analysis, Giappichelli 2022: https://www.giappichelli.it/media/catalog/product/excerpt/9788892143289.pdf). She has kindly provided us with the following abstract:

The advent of AI-systems has fundamentally altered the whole of society and is about to change our daily lives as well as relationships between private parties.

The current challenge for the legislator is to determine a clear legal framework able to firstly, guarantee continued technological development and secondly, to be integrated with already binding sources of law. Whether the said framework will correspond to an already existing one, adapted to AI-systems, or whether it will be an ad hoc framework is still to be scrutinized. What is certain is that the challenge to determine a legal framework assumes a cross-border connotation: only common and shared choices at the supranational level will guarantee the definition of a coherent and effective discipline.

Within the said framework, the present book focuses on the non-contractual obligations which arise within the European Union out of the development and use of AI-systems; more precisely, as for the civil liability regime the advent of AI is about to lead to a paradigm shift in the allocation of liability throughout the “production chain”. Namely, the question has become how to ascertain who is liable for what; the opacity of AI-systems – especially those engaging with machine learning techniques – can make it extremely difficult to identify who is in control and therefore responsible.

Both EU substantive and private international law (“PIL”) provisions on civil liability, in general, and on product liability in particular, are scrutinized, following an approach de lege lata and de lege ferenda.

The concluding remarks integrates the results reached in the analysis and ethical considerations. Both substantive and PIL provisions should be ethically oriented and abide, and ensure, the protection of fundamental rights; private international law shall be an effective instrument for reaching the results pursued by the corresponding substantive provisions. Accordingly, this book will conclude suggesting anew direction of European private international law provisions; as per AI-systems field, it might be time the European legislator accepts connecting factors oriented more towards human rights protection.

Ilaria Pretelli, a legal adviser at the Swiss Institute of Comparative Law, has recently posted on SSRN her paper titled Filiation between Law, Language, and Society

The paper was presented this May at a conference on Family Status, Identities and Private International Law. A Critical Assessment in the Light of Fundamental Rights organized by the Swiss Institute of Comparative Law, European Law Institute and Università di Pisa. The post about the conference may be found here.

The abstract reads as follows:

The legal problems around contractual filiation are often presented as creating an opposition between rainbow family and traditional ones but they conceal, underneath, an opposition between two distinct visions of filiation. In patriarchal societies, control over his genealogy by the patriarch is functional in the protection of the social position of the family. These societies are characterised by substantial social immobility. The wealth of sons and daughters depends entirely on the ancestors. Children have duties vis-à-vis their parents, who maintain power and control over them. The importance of lineage can on the other hand be scaled back whenever, in a given society, it is possible to acquire wealth through one’s own efforts in life, rather than only by retaining wealth from ancestors or acquiring it through marriage. Today, the wealth of the children of middle-class families, assisted from the educational and economic point of view by the welfare state, also depends on their ability to integrate into the social fabric through their personal contribution. Children have rights vis-à-vis their parents, and law must assist them, as they are vulnerable persons, in enjoying their rights.

Written by Christian Rüsing, University of Münster

From 2 to 4 June 2022, the founding conference of the European Association of Private International Law (EAPIL) took place in Aarhus. After the idea of founding the association had emerged at a conference in 2018 and its incorporation in 2019, it offered an opportunity to discuss fundamental issues of private international law in Europe with about 150 participants.

In his keynote speech at the kick-off event on Thursday, Peter Arnt Nielsen (Copenhagen Business School) outlined the development of the institutional framework and its significance for European conflict of laws. Andreas Stein (European Commission) addressed current legislative projects in his report from Brussels. Particularly, he highlighted the recently published Directive proposal on “Strategic lawsuits against public participation” (SLAPPs). Subsequently, drawing inspiration from AG Maciej Szpunar’s report from Luxembourg on current fundamental rights issues in private international law, the conference especially discussed the significance of the EU Charter of Fundamental Rights with great enthusiasm, including SLAPPs and the recognition of foreign judgments.

On Friday morning, the presentations and discussions concentrated on digitalisation, with particular attention to platforms, blockchains, the transfer of digital assets and the digital resolution of cross-border disputes. Several speakers and participants addressed the challenging question of the extent to which new technologies require special treatment in private (international) law. In the afternoon, the focus was on the phenomenon of fragmentation in European private international law, which led to a lively debate on the need for a coherent general instrument or codification of EU conflict of laws. After the speakers had expressed themselves rather neutrally or even partly positively on the phenomenon, several participants in the discussion spoke rather in favour of stronger coordination.

The questions of fragmentation and need for reforms also arose on Saturday, when issues of international family law, succession law and property law were dealt with. Now, however, it was more a question of concrete issues of demarcation, such as those that can arise between matrimonial property law and property law. With regard to international family law, the role of religious laws in private international law and parental responsibility in cross-border cases was discussed as well.

At the general assembly, the association’s past and future activities and participation opportunities for members in seminars, working groups and a Young Researchers Network were presented. The Secretary General, Giesela Rühl (Humboldt-University of Berlin), was happy to announce that the association already had 389 members from 63 countries. Since practitioners can also become members, the association fosters the exchange between science and practice, which was clearly seen at the conference in several contributions to the discussion on the user-friendliness of European legal acts. Further information on the EAPIL can be found here.

All in all, the conference offered – also thanks to the organisation by Morten M. Fogt (University of Aarhus) and his team – an excellent opportunity for academic exchange, which so many participants missed in recent years. The full program of the conference and an overview of the speakers are available here.

On 2 June 2022, the ECJ delivered its judgment in the case of T.N. et al. ./. E.G., C-617/20, on the interpretation of the ESR in relation to cross-border declarations of waiver of succession (on the facts of the case and AG Maciej Szpunar’s Opinion in this case see our previous post).

The Court followed the AG’s Opinion and concluded (para. 51) that

“Articles 13 and 28 of Regulation No 650/2012 must be interpreted as meaning that a declaration concerning the waiver of succession made by an heir before a court of the Member State of his or her habitual residence is regarded as valid as to form in the case where the formal requirements applicable before that court have been complied with, without it being necessary, for the purposes of that validity, for that declaration to meet the formal requirements of the law applicable to the succession”.

This conclusion was based on a EU-law specific approach rather than by discussing, let alone resorting to, fundamental concepts of private international law (compare Question 1 by the referring national court, the Higher Regional Court of Bremen, Germany, on a potential application of the concept of substitution; compare the AG’s considerations on characterisation of the issue as “substance” or “form”, see Opinion, paras. 34 et seq.). Rather, the Court reformulates the question functionally (para. 32):

“The present reference for a preliminary ruling concerns the conditions which must be satisfied in order for a declaration concerning the waiver of succession, within the meaning of Articles 13 and 28 of Regulation No 650/2012, made before the court of the State of the habitual residence of the party waiving succession, to be regarded as valid. In that regard, the referring court asks, in particular, whether and, if so, when and how such a declaration must be notified to the court having jurisdiction to rule on the succession”.

Textual as well as systematic arguments (Article 13 as part of Chapter II, Article 28 as part of Chapter III of the ESR), paras. 36 et seq., supported by Recital 32 (simplification of procedures), para. 41, as well as the general effet utile of the ESR in light of Recital 7, para. 42, lead the Court to the result that

“as the Advocate General stated in point 64 of his Opinion, compliance with the objective of Regulation No 650/2012, which is to enable heirs to make declarations concerning the waiver of succession in the Member State of their habitual residence, implies that those heirs are not required to take further formal actions before the courts of other Member States other than those provided for by the law of the Member State in which such a declaration is made, in order for such declarations to be regarded as valid”.

Whether this result occurs, technically speaking, as a substitution – and thus by a kind of “recognition”, or as a matter of characterisation of the issue as “form”, is not directly spelled out, but based on the general approval of the AG’s approach, the latter is certainly more likely than the former.

Additionally, in furthering the effet utile, the Court adds on the issue of communication of and time limits for a waiver declared according to the conditions of the law of the habitual residence (paras. 49 et seq.) that compliance with “formal requirements” before the court of the habitual residence must suffice as long as the court seised with the succession “has become aware of the existence of that declaration”. And the threshold for this awareness seems to be very low, but “in the absence of a uniform system in EU law providing for the communication of declarations” of the kind in question here, must be brought about by the declaring person (para. 48). As a further element of effet utile, this person is not bound by any formal requirements under the lex successionis, para. 48: “if those steps [by the declaring person] are not taken within the time limit prescribed by the law applicable to the succession, the validity of such a declaration cannot be called into question” (emphasis added). The only factual time limit therefore is that the court becomes aware before it takes its decision. Appeal, therefore, cannot be grounded directly on the fact that the court was not made aware in time, even though the declaration had existed before the court’s decision. Appeal may be available on other grounds and then the declaration may be introduced as a novum, if the lex fori processualis allows it.

Speaking of the lex fori processualis: As there is now an autonomous time limit, the question became irrelevant whether making the court aware of the declaration of waiver depends on any language requirements. In the concrete case, the persons declaring the waiver before a Dutch court, obviously in Dutch language, informed the German court first by submitting Dutch documents and only later with translations, but at any rate before the court’s decision. Principally speaking, however, if the court’s language is e.g. German, any kind of communication must be conducted in that language (see section 184 German Gerichtsverfassungsgesetz). In addition, according to the Court’s decision, only  “formal requirements of the law applicable to the succession” are irrelevant. The need for translations, however, is a matter of the lex fori processualis. It will be an interesting question of “language law” within the EU whether the effet utile of the ESR (and comparable regulations in other instruments) might overcome principal language requirements according to the lex fori processualis. And on a general level it may be allowed to state the obvious: questions of characterisation (and others of general PIL methodology) will never disappear.

On 2 June 2022, the CJEU ruled in Case C-196/21 that courts are not ‘applicants’ in the meaning of Article 5(2) of the 2007 Service Regulation and should thus not bear the costs of translating documents sent to foreign based third parties seeking to intervene in the court proceedings.

The reasons given by the CJEU are quite narrow and formalistic. Unfortunately, the decision does not address broader questions such as whether courts may impose translation of documents that they intend to serve, and whether third parties applying for intervening in judicial proceedings may benefit from a right to translation.

Two parents who, it seems, were both residents in Romania, started proceedings in Romania for the dissolution of the marriage and various issues relating to parental responsibility over their child.

During the proceedings, various members of the family (siblings of the child, paternal grand father) residing in France applied for leave to intervene in the proceedings in support of the husband/father of the child.

The issue arose as to whether certain judicial documents to be served on the interveners by the court ought to be translated in French, and most importantly who should pay for it.

Art. 5(2) of the 2007 Service Regulation, which has now become Article 9(2) the 2020 Service Regulation Recast, provides:

1.   The applicant shall be advised by the transmitting agency to which he forwards the document for transmission that the addressee may refuse to accept it if it is not in one of the languages provided for in Article 8.

2.   The applicant shall bear any costs of translation prior to the transmission of the document, without prejudice to any possible subsequent decision by the court or competent authority on liability for such costs.

In this case, the Romanian court had ruled that the parties to the original proceedings (ie the parents of the child) should bear the costs of translating the documents to be served on the interveners. The parents refused, and argued that they were no “applicant” in the meaning of Art. 5(2), but that the court was the “applicant”, since it had ordered transmission of the relevant documents to the addressees (here, the interveners).

The CJEU rules that a court cannot be considered as “the applicant” in the meaning of Art. 5(2).

The CJEU puts forward a number of arguments based on the wording of the Service Regulation, which distinguishes between courts and applicants.

It also refers to legislative history, and points to the explanatory report to the 1997 Service Convention, which stated with respect to a similar provision:

“applicant” means in all cases the party interested in transmission of the document. It therefore cannot refer to the courts.

Finally, the CJEU explains that courts are responsible for ensuring fairness of the service process, and that it would be weird if they were themselves applicants, as they would not be impartial in serving this function.

This decision is a bit surprising in the narrowness of its focus. One wonders whether the most important issues raised by the case were not missed.

First, there is no obligation to translate documents under the Service Regulation. Art 5(2) addresses the issue of the burden of the costs of translation if the applicant chooses to translate the relevant document. The applicant is free to serve judicial documents without any translation, as the addressee may never use his right to refuse service on the ground of language. In this case, it seems likely that the addressees were all Romanian emigrés, and it may well be that they did not need any translation. So the first problem in this case was that the Romanian court had decided to impose immediate translation, and then was looking for someone to pay.

Indeed, isn’t the rationale of Art. 5(2) to put the burden of paying the costs of translation on anybody insisting on such translation at a stage where it is unclear whether it will be needed? In other words, Art 5(2) aims at avoiding an externality. It was much easier for the Romanian court to impose the (non existing) obligation in the first place if it knew it would not pay it.

The second issue raised by this case is that the ‘addressee’ was a third party applying to intervene in foreign proceedings. The critical question was therefore whether a party choosing to participate in judicial proceedings (as opposed to a defendant) should have any right of receiving a translation of judicial documents, and if so whether it would extend to documents exchanged by the original parties beforehand.

I am in tidying up mode clearly for my goodness I have way too many windows open on various browsers. And as always: Bloggo, ergo sum. (Or at the least: when I blog and /or Tweet the cases seem more firmly lodged in my memory). In FDI v Barclays & Ors [2022] EWHC 391 (Ch) defendants applied successfully for a case management stay to allow for clarification of the position in parallel US multi-district litigation (‘MDL’) proceedings (started earlier) involving the LIBOR fixing rate scandal. The confusion seems to be about what US  jurisdictional decisions in those proceedings mean against at least some of the defendants in the UK proceedings.

The UK proceedings were started pre-Brexit. One assumes therefore that the decision takes full advantage of the wedge that exists between a procedural, case management stay and a full-blown jurisdictional decision. The latter surely needs to be discussed under Brussels Ia, including its Articles 33-34 forum non-type mechanism, lest  one were to argue res judicata which, if the US Proceedings have not moved beyond jurisdictional decisions, is unlikely.

The judgment also indicates that a further CMC – Case Management Conference will be held in October. One looks forward to further development there.

Geert.

#LIBOR fixing, successful application for case management stay to clarify relationship with US proceedings
Claims based on US State law of deceit and EN competition law

Oddly no consideration of A33-34 BIa

FDI v Barclays & Ors [2022] EWHC 391 (Ch) https://t.co/33oGvgTizQ

— Geert Van Calster (@GAVClaw) February 25, 2022

I tweeted on the case at the time I think and now bumped into it as per ‘too many open browser windows -syndrom’ ;-): Liman J’s January’s judgment in Suez Water New York v Dupont, Chemours et al serves as a good primer (Legally Blonde a strong second) to explain general (where the defendant is ‘at home’) and specific (based on the defendant’s contacts with the State) personal (as opposed to subject-matter) jurisdiction.

In the US (with slight variations in federal and State approaches), general personal jurisdiction over the defendant arises either because of its continuous and systematic business affiliations with the state (indisputably established in case of domicile in the State) or, in the case of foreign corporations (incl in the business and human rights context) where its activities make it ‘essentially at home’ in the State (Daimler v Bauman). Specific personal jurisdiction, aka ‘long arm’ jurisdiction, exercised against those ‘not at home’ in the State, requires contact with the State, typically through the (attempted) sale or supply of goods or services, the commitment of a wrongful act (tort) or Moçambique-type matters such as transactions involving real estate in the State.

In the case at issue, the judge concludes that claimant, who is seeking to recover the water remediation costs of PFAS, ‘forever chemicals’ pollution,  has made the requisite prima facie showing of personal jurisdiction over the original manufacturers (ia of ‘Teflon’ non-sticky pans) albeit just barely, accepting a prima facie link between those defendants’ marketing activities  in New York and the contamination. However the judge does not prima facie accept jurisdiction over the successor corporations, holding that under New York law, successor jurisdiction is appropriate only where a predecessor and successor remain one and the same after some corporate-restructuring event. If this trend continues, it would be a vindication for escaping environmental liabilities by the use of special purpose vehicles, including corporate restructuring.

The case in the end faltered on the basis of vagueness in the claim however I understand this can be remedied (and may have been done so on the meantime). Other courts will have different approaches and unfortunately the length of the judgment (which also discusses eg public nuisance claims) illustrates  the industry will battle liability to the end. Another sad, sad case-study for the late lessons from early warnings collection.

Geert.

The University of Bretagne – Loire, France, is seeking to recruit a doctoral candidate to conduct research on ex officio application of private international law rules under the supervision of Prof. David Sindres.

The doctoral thesis is to be written in French. The issue of ex officio application of choice of law rules is a hot topic in France at the present time (see our posts here, here and here), but the topic would not be limited to these particular PIL rules.

Définir l’« office du juge » consiste, de manière générale, à cerner le rôle du juge dans la direction du procès, ce qui implique de préciser ses pouvoirs et leurs limites (Lexique des termes juridiques, Dalloz 2021-2022). En droit international privé, la question de l’application d’office, par le juge, des règles de droit international privé se pose de manière extrêmement fréquente, dans tous les domaines couverts par la discipline. Ainsi s’interroge-t-on sur le point de savoir si le juge doit ou non vérifier d’office sa compétence internationale, s’il doit d’office mettre en œuvre la règle de conflit de lois, soulever d’office une exception de fraude ou d’ordre public international, vérifier d’office les conditions de régularité d’un jugement étranger dans le cadre de la procédure d’exequatur etc…

Nonobstant sa très grande importance pratique et la qualité des écrits qui lui ont été consacrés, la question de l’application d’office par le juge des règles de droit international privé demeure grevée de nombreuses incertitudes : les solutions en la matière varient considérablement d’un domaine à l’autre, n’obéissent à aucune logique d’ensemble et s’avèrent très évolutives.

Dans ce contexte, l’objectif premier de la recherche proposée consiste à déterminer s’il serait possible d’instiller davantage d’homogénéité et de clarté en la matière, en identifiant plus précisément les critères qui devraient présider à l’application d’office par le juge des règles droit international privé. Ne pourrait-on pas, en particulier, faire usage de critères analogues s’agissant de la détermination de la compétence internationale, de la résolution des conflits de lois, et de la reconnaissance et d’exequatur des jugements étrangers ? A supposer que la délimitation de l’office du juge quant à l’application de ses règles de droit international privé puisse reposer sur des critères semblables d’un champ à l’autre, ces critères devraient-ils reposer sur l’origine, interne, internationale ou européenne, des textes applicables ? Sur la nature, disponible ou non, des droits litigieux ? Sur l’appartenance à l’ordre public des règles applicables ? Sur d’autres critères ?

L’intérêt du sujet tient notamment au fait qu’il présente à la fois un grand enjeu pratique et une dimension théorique très marquée, empruntant à divers domaines du droit : droit international privé, droit processuel, droit européen, théorie générale du droit etc…

Le sujet présente par ailleurs une forte dimension internationaliste et européenne et constitue de surcroît un terreau fertile pour une approche comparatiste : dans une mesure qu’il incombera au candidat de déterminer précisément, la question de l’office du juge dans la mise en œuvre de ses règles de droit international privé relève en effet de l’autonomie procédurale des Etats membres, de sorte que la pratique sur ce point des différents Etats, membres et non membres, n’est pas uniforme et gagnerait à être comparée.

Le sujet pourra au surplus donner lieu à une approche innovante dans la mesure où il visera à établir un trait d’union entre les différents pans du droit international privé, alors que les travaux publiés jusqu’ici sur la question s’inscrivent dans une approche très compartimentée du droit international privé, envisageant séparément l’office du juge en matière de conflit de lois, de compétence internationale et de reconnaissance des décisions.

Enfin, le sujet, même s’il est ample, est bien délimité, si bien qu’il donnera au candidat la possibilité de terminer sa thèse dans un délai raisonnable, n’excédant pas cinq ou six ans.

Applications are to be filed here by 15 June 2022.

For more information, see here and contact Prof. Sindres at david.sindres@univ-angers.fr

The Court of Justice delivered last week (2 June 2022) its judgment in Case C‑196/21 (SR and alii), which is about the Service bis Regulation:

« Article 5(2) of Regulation (EC) No 1393/2007 […] must be interpreted as meaning that, where a court orders the transmission of judicial documents to third parties that apply for leave to intervene in the proceedings, that court cannot be regarded as being the ‘applicant’ within the meaning of that provision”.

Note : Article 5 Service bis Regulation states :

“1. The applicant shall be advised by the transmitting agency to which he forwards the document for transmission that the addressee may refuse to accept it if it is not in one of the languages provided for in Article 8.

2. The applicant shall bear any costs of translation prior to the transmission of the document, without prejudice to any possible subsequent decision by the court or competent authority on liability for such costs”.

Source: https://curia.europa.eu/juris/document/document.jsf;jsessionid=D6263372CF35902864FE65D23613F425?text=&docid=260188&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=4507548

The Court of Justice delivered last week (2 June 2022) its judgment in Case C‑617/20 (T.N. and alii), which is about the Succession Regulation:

“Articles 13 and 28 of Regulation (EU) No 650/2012 […] must be interpreted as meaning that a declaration concerning the waiver of succession made by an heir before a court of the Member State of his or her habitual residence is regarded as valid as to form in the case where the formal requirements applicable before that court have been complied with, without it being necessary, for the purposes of that validity, for that declaration to meet the formal requirements of the law applicable to the succession”.

Source: https://curia.europa.eu/juris/document/document.jsf;jsessionid=D6263372CF35902864FE65D23613F425?text=&docid=260184&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=4507548

This post is an abridged adaptation of my recent article, Private International Law and Substantive Liability Issues in Tort Litigation against Multinational Companies in the English Courts: Recent UK Supreme Court Decisions and Post-Brexit Implications in the Journal of Private International Law. The article can be accessed at no cost by anyone, anywhere on the journal’s website. The wider post-Brexit implications for private international law in England are considered at length in my recent OUP monograph, Brexit and the Future of Private International Law in English Courts.

According to a foundational precept of company law, companies have separate legal personality and limited liability. Lord Templeman referred to the principle in Salomon v Salomon & co Ltd [1896] UKHL 1, as the ‘unyielding rock’ on which company law is constructed. (See Lord Templeman, ‘Forty Years On’ (1990) 11 Company Lawyer 10) The distinct legal personality and limited liability of each entity within a corporate group is also recognized. In Adams v Cape Industries plc [1990] Ch 433 the court rejected the single economic unit argument made in the DHN Ltd v Tower Hamlets LBC [1976] 1 WLR 852 decision, and also the approach that the court will pierce the corporate veil if it is necessary to achieve justice. In taking the same approach as the one taken in Salomon v Salomon & co Ltd [1896] UKHL 1, the court powerfully reasserted the application of limited liability and the separate legal entity doctrine in regard to corporate groups, leaving hundreds of current and future victims uncompensated, whilst assisting those who seek to minimize their losses and liabilities through manipulation of the corporate form, particularly in relation to groups of companies. A parent company is normally not liable for the legal infractions and unpaid debts of its subsidiaries. However, the direct imposition of duty of care on parent companies for torts committed by foreign subsidiaries has emerged as an exception to the bedrock company law principles of separate legal personality and limited liability. In Chandler v Cape plc [2012] EWCA Civ 525, [69], Arden LJ ‘……emphatically reject[ed] any suggestion that this court [was] in any way concerned with what is usually referred to as piercing the corporate veil.’

Arguments drawn from private international law’s largely untapped global governance function inform the analysis in the article and the methodological pluralism manifested in the jurisdictional and choice of law solutions proposed. It is through the postulation of territoriality as a governing principle that private international law has been complicit in thwarting the ascendance of transnational corporate social responsibility. (See H Muir-Watt, ‘Private International Law Beyond the Schism’ (2011) 2 Transnational Legal Theory 347, 386) Private international law has kept corporate liability within the limits of local law through forum non conveniens and the lex loci delicti commissi. It is only recently that a challenge of territoriality has emerged in connection with corporate social responsibility.

Extraterritoriality is employed in this context as a method of framing a private international law problem rather than as an expression of outer limits. Therefore, there is nothing pejorative about regulating companies at the place of their seat, and there is no reason why the state where a corporate group is based should not (and indeed should not be obliged to) sanction that group’s international industrial misconduct on the same terms as similar domestic misconduct, in tort claims for harm suffered by third parties or stakeholders. (Muir-Watt (ibid) 386)

The idea of methodological pluralism, driven by the demands of global governance, can result in jurisdictional and choice of law rules that adapt to the needs of disadvantaged litigants from developing countries, and hold multinational companies to account. The tort-based parental duty of care approach has been utilized by English courts for holding a parent company accountable for the actions of its subsidiary. The limited liability and separate legal entity principles, as applied to corporate groups, are circumvented by the imposition of direct tortious liability on the parent company.

The UK Supreme Court’s landmark decisions in Vedanta v Lungowe [2019] UKSC 20 and Okpabi v Shell [2021] UKSC 3 have granted jurisdiction and allowed such claims to proceed on the merits in English courts. The decisions facilitate victims of corporate human rights and environmental abuse by providing clarity on significant issues. Parent companies may assume a duty of care for the actions of their subsidiaries by issuing group-wide policies. Formal control is not necessarily the determining factor for liability, and any entity that is involved with the management of a particular function risks being held responsible for any damage flowing from the performance of that function. When evaluating whether a claimant can access substantial justice in another forum, English courts may consider the claimants lack of financial and litigation strength. The UK Supreme Court decisions are in alignment with the ethos of the UN Guiding Principles on Business and Human Rights (“Ruggie Principles”), particularly the pillar focusing on greater access by victims to an effective remedy. (The United Nations Guiding Principles on Business and Human Rights, UN Doc. A/HRC/17/31 (2011))

Post-Brexit, the broader availability of the doctrine of forum non conveniens may help the English courts to ward off jurisdictional challenges against parent companies for damage caused by their subsidiaries at the outset. However, in exceptional cases, the claimant’s lack of financial and litigation strength in the natural forum may be considered under the interests of justice limb of The Spiliada test, which motivate an English court not to stay proceedings. (Spiliada Maritime Corpn v Cansulex Ltd (The Spiliada) [1987] AC 460) It has been argued that if the Australian “clearly inappropriate forum” test for forum non conveniens is adopted, (Voth v Manildra Flour Mills Pty Ltd (1991) 65 A.L.J.R. 83 (HC); Regie National des Usines Renault SA v Zhang [2002] HCA 10 (HC)) it is unlikely that a foreign claimant seeking compensation from a parent company in an English court would see the case dismissed on forum non conveniens grounds. As a result, it is more likely that a disadvantaged foreign litigant will succeed in overcoming the jurisdictional hurdle when suing the parent company. From a comparative law standpoint, the adoption of the Australian common law variant of forum non conveniens will effectively synthesize The Spiliada’s wide-ranging evaluative enquiry with the certainty and efficiency inherent in the mandatory rules of direct jurisdiction of the Brussels-Lugano regime.

In relation to choice of law for cross-border torts, the UK has wisely decided to adopt the Rome II Regulation as retained EU law. (See The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019) Article 4(1) of the Rome II Regulation will continue to lead to the application of the law of the country where the damage occurred. Post-Brexit, it remains to be seen whether the English courts would be more willing to displace the applicable law under Article 4(1) by applying Article 4(3) of Rome II more flexibly. The territorial limitations of the lex loci damni might be overcome by applying the principle of closest connection to select a more favorable law. The result-selectivism inherent in the idea of a favorable law is reminiscent of the regulatory approach of governmental interest analysis. (See SC Symeonides, Codifying Choice of Law Around the World (OUP 2014) 287) Article 7 of the Rome II Regulation provides the claimant in an environmental damage claim a choice of applicable law either pursuant to Article 4(1) or the law of the country in which the event giving rise to the damage occurred. Alternatively, any regulatory provisions in English law may be classified as overriding mandatory provisions of the law of the forum under Article 16 of the Rome II Regulation. The Rome II Regulation, under the guise of retained EU law, constitutes a unique category of law that is neither EU law nor English law per se. The interpretation of retained EU law will give rise to its own set of challenges. Ultimately, fidelity to EU law will have to be balanced with the ability of UK appellate courts to depart from retained EU law and develop their own jurisprudence.

Any future amendments to EU private international law will not affect the course of international civil litigation before English courts. (Cf A Dickinson, ‘Walking Solo – A New Path for the Conflict of Laws in England’ Conflictoflaws.net, suggests engagement with the EU’s reviews of the Rome I and II Regulations will provide a useful trigger for the UK to re-assess its own choice of law rules with a view to making appropriate changes) However, recent developments in the UK and Europe are a testament to the realization that the avenue for access to justice for aggrieved litigants may lead to parent companies that are now subject to greater accountability and due diligence.

The first issue of the Journal of Private International law for 2022 was released yesterday. It features the following articles:

M Lehmann, “A new piece in the puzzle of locating financial loss: the ruling in VEB v BP on jurisdiction for collective actions based on deficient investor information”

For the first time, the CJEU has ruled in VEB v BP on the court competent for deciding liability suits regarding misinformation on the secondary securities market. Surprisingly, the Court localises the damage resulting from misinformation on the secondary financial markets at a single place, that where the financial instruments in question were listed. This raises the question of how the decision can be squared with earlier cases like Kolassa or Löber and other precedent. It is also unclear how the new ruling applies to special cases like dual listings or electronic trading venues. Furthermore, the judgment is of utmost importance for the jurisdiction over collective actions by postulating that they should not be treated any differently than individual actions, without clarifying what this means in practice. This contribution analyses these questions, puts the judgment in larger context, and discusses its repercussions for future cases.

F Rielaender, “Financial torts and EU private international law: will the search for the place of “financial damage” ever come to an end?”

Matthias Weller (University of Bonn) has published the special course that he gave at the Hague Academy in Volume 423 of Collected Courses of the Hague Academy of International Law.

The title of the course is “Mutual Trust”: A Suitable Foundation for Private International Law in Regional Integration Communities and Beyond?

Professor Weller reflects on how ‘mutual trust’ has become the central justification of the EU to drive its private international law forward. For this, he explores the theoretical potential of trust perspective on private international law. As a first step of the analysis, the concept of trust is deconstructed based on an interdisciplinary analysis. Then, the results are connected with fundamentals of private international law. The central finding is that private international law builds on the dichotomy of trust and control: how far should foreign judgments, foreign law and other foreign judicial acts be integrated – “trusted” – within the domestic administration of justice? This question must be answered by each and every legislator and each and every court, in particular by those that strive for economic and complementing judicial integration. Recurring tools of trust management can be identified. How do regional integration communities use and finetune these tools for their private international law and what are potential explanations from their history, their economics, and their legal cultures? Four communities, selected from different parts of the world, are presented under this perspective, ordered in a series towards growing intensities of mutual trust: the ASEAN, the CEMAC, the MERCOSUR, and the EU. In his contribution Professor Weller comes to the conclusion that trust is, must, and can be managed and dosed according to the respective conditions and contexts, but no matter where we are: to trust or not to trust – that is the question of private international law, for regional integration communities and beyond.

The volume also includes the course of Meg Kinnear (Vice president of the World Bank Group) on The Growth, Challenges and Future Prospects for Investment Dispute Settlement.

Further details about the volume are available here.

Update from the organizers:

“Thanks to the generosity of our sponsors we are able to offer a limited number of participants a partial waiver of the conference. If you work in the not-for-profit sector (academia, ngo’s, judiciary or other government institutions) you can contact the conference bureau (conference@uva.nl) to check for eligibility. The reduced fee will be the same as the one for students and PhD fellows.”

For all those interested in the various aspects of collective redress, including cross border issues (in securities and competition cases), the 4th International Class Action Conference held as an on-site conference in Amsterdam provides an excellent opportunity to discuss current issues and share your own experiences. The international conference is co-organized, inter alia, by the University of Amsterdam (The Netherlands), University of Haifa (Israel) and Tilburg University (The Netherlands) and described as follows:

”

Amsterdam, 30 June – 1 July 2022

On 30 June and 1 July 2022 the University of Amsterdam will host the 4th international class action conference. The conference is organized by a team from the University of Haifa, the University of Tilburg and the University of Amsterdam, in collaboration with several renowned institutions. The theme of this year’s conference is ‘From Class Actions to Collective Redress: Access to Justice in the 21st century’.

The Conference will bring together a diverse range of international expertise in collective redress. The conference is intended to act as a forum for the sharing of experiences and knowledge. In an increasingly interconnected world, such opportunities for international scholars and practitioners to come together and compare notes on the development of collective redress in their jurisdictions, are more relevant than ever.

For details on the programme and a full list of collaborators, please see 4th International Class Action Conference – Home (aanmelder.nl).”

There are different registration fees for commercial participants (500 EUR) and academics/judges/NGOs (300 EUR) as well as a reduced charge for (PhD) students (75 EUR).

(authored by Chen Zhi, Wangjing & GH Law Firm, PhD Candidate at the University of Macau)

It is axiomatic that an arbitration agreement is generally not binding on a non-signatory unless some exceptional conditions are satisfied or appear, while it could even be more controversial in cases relating to guarantee where a non-signatory third person provides guarantee to the master agreement in which an arbitration clause has been incorporated. Due to the close connection between guarantee contract and master agreement in their contents, parties or even some legal practitioners may take it for granted that the arbitration agreement in master agreement can be automatically extended to the guarantor albeit it is not a signatory, which can be a grave misunderstanding from judicial perspective and results in great loss thereby.

As a prime example, courts in China have long been denying the applicability of arbitration agreements to a non-signatory guarantor with rare exceptions based on specific circumstances as could be observed in individual cases, nonetheless, the recent legal documents have provided possibilities that may point to the opposite side. This short essay looks into this issue.

1. The Basic Stance in China: Severability of the Guarantee Contract

Statutes in China provide limited grounds for extension of arbitration agreement to a non-signatory. As set out in Articles 9 & 10 of the Interpretation of the Supreme People’s Court’s (hereinafter, SPC) on Certain Issues Related to the Application of the Arbitration Law?which was issued on 23 August 2006?, this may occur only under the following circumstances:

“(1) An arbitration clause is binding on the non-signatory who is the successor of a signed-party by means of merge, spilt-up of an entity and decease of a natural person or;

(2) where the rights and obligations are assigned or transferred wholly or partially to a non-signatory, unless parties have otherwise consented”.

Current laws are silent on the issue where there is a guarantee relationship. Due to the paucity of direct instructions, some creditors seeking for tribunal’s seizure of jurisdiction over a non-signatory guarantor would tend to invoke Article 129 of the SPC’s Interpretation on Certain Issues Related to Application of Warranty Law (superseded by SPC’s Interpretation on Warranty Chapter of Civil Code since 2021 with no material changes being made), which stipulates that the guarantee contract shall be subject to the choice of court clause as set out in the main agreement, albeit the creditor and guarantor have otherwise consent on dispute resolution. Nevertheless, courts in China are reluctant to apply Article 129 to an arbitration clause by way of mutatis mutandis. In the landmark case of Huizhou Weitong Real Estate Co., Ltd v. Prefectural People’s Government of Huizhou,[1] the SPC explicitly ruled that the Guarantee Letter entered into between creditor and guarantor had created an independent civil relationship which shall be distinguished from the main agreement and thereby the arbitration clause should not be binding on the guarantor and the court seized with the case could take the case accordingly. In a nutshell, due to the independence of the guarantee contract from the main contract, where there is no clear arbitration agreement in the guarantee contract, the arbitration agreement in the main contract cannot be extended to be applicable to the guarantor.

The jurisprudence of Weitong has been subsequently followed and acknowledged as the mainstream opinion for the issue. In SPC’s reply to Guangxi Provincial High Court regarding enforcement of a foreign-related arbitral award rendered by CIETAC on 13 September 2006?Dongxun?,[2] where a local government had both issued a guarantee letter and signed the main agreement, the SPC opined that as there was no term of guarantee provided in the text of main agreement, the issuance of guarantee letter and signature of main agreement was not sufficient to make the government a party to the arbitration clause. In light of this, SPC agreed with the Guangxi Court’s stance that the dispositive section regarding execution of guarantee obligation as set out in the disputed arbitral award had exceeded the tribunal’s power and thus shall be rejected to be enforced. In the same vein, in its reply on 20 March 2013 to Guangdong Provincial High Court regarding the annulment of an arbitral award[3], the SPC held that the disputed arbitral award shall be partially vacated for the arbitral tribunal’s lack of jurisdiction over the guarantee for which the guarantor was a natural person. Hence, it can be drawn that whether the guarantor is a governmental institution or other entity for public interest is not the determining factor to be considered for this type of cases.

2. Controversies and Exceptions

Theoretically, it is correct for the SPC to unfold the autonomous nature of arbitration jurisdiction, which shall be distinguished from that of litigation. Parties’ autonomy to designate arbitration as a method of dispute resolution and the existence of an arbitration agreement are key elements for a tribunal to be able to obtain the jurisdiction. By this logic, the mere issuance of guarantee letter or signature of a standing-alone guarantee is not sufficient to prove parties’ consent to arbitration as expressed in the main contract. The SPC is not alone in this respect. Actually, one of the much-debated cases by foreign courts is the decision made by the Swiss Supreme Court in 2008 which opined that a guarantor providing guarantee by virtue of a standing-alone letter was not bound by the arbitration clause as provided in the main agreement to which the guarantee letter has been referred, except there was an assumption of contractual rights or obligations, or a clear reference to the said arbitration clause. [4]

All that being said, the SPC’s proposition has given rise to some controversies for the sacrifice of efficiency through a dogmatic understanding of arbitration. Moreover, the segregation of the main contract and guarantee contract may produce risks of parallel proceedings and conflicting legally-effective results. As some commentators have indicated, albeit the severability of guarantee contract in its formality, its content is tight with the main agreement. In the light of the tight connection,[5] the High Court of England ruled in Stellar that it was predictably expectable for a rational businessman to agree on a common method of dispute resolution as set out in the main contract, where the term of guarantor’s endorsement was involved, based on the close connection between the two contracts.[6]

A like but nuanced approach, however, has been developed through individual cases in China, to the author’s best knowledge, one of the prime cases is Li v. Yu decided by Hangzhou Intermediate Court on 30 March 2018  concerning an annulment of an award handed down via arbitration proceedings.[7] The case concerns a main agreement entered into by the creditor, the debtor and the guarantor (who was also the legal representative of the debtor), which had set out a general guarantee term but did not provide detailed obligations. The guarantor subsequently issued a guarantee letter without any clear reference to arbitration clause as stated in main agreement. After the dispute arose, the creditor lodged arbitration requests against both the debtor and the guarantor, the tribunal ruled in creditor’s favor after tribunal proceedings started. The guarantor then applied for annulment of the arbitral award on the basis that there was no valid arbitration agreement between the guarantor and the creditor, contending tribunal’s lack of jurisdiction over the guarantor. The court, however, opined that the guarantor’s signature in the main agreement, in combination of the general guarantee clause incorporated therein, was sufficient to prove the existence of arbitration agreement between the creditor and the guarantor and the guarantor’s consent thereby. Therefore, the annulment application was dismissed by the court.

Admittedly, the opinion as set out in Li is sporadic and cannot provide certainty, largely relying on specific circumstances drawn from individual cases, hence it is difficult to produce a new principle hereby. However, the case does have some novelties by providing a new track for extension of arbitration agreement to a guarantor who is not clearly set out as one of the parties in main agreement. In other words, the presumption of severability of guarantee relationship is not absolute and thus rebuttable. To reach that end, creditors shall furnish proof that the guarantor shall be well aware of the details of the main contract (including arbitration clause) and has shown inclination to be bound thereby.

3. New Rules That Shed New Light

On 31 December 2021, the SPC released Meeting Note of the National Symposium on Foreign-related Commercial and Maritime Trials, which covers judicial review issues on arbitration agreements. Article 97 of the Meeting Note provides systematical approach in reviewing arbitration agreement where an affiliated agreement?generally refers to guarantee contract or other kinds of collateral contract?is concerned, which can be divided into two facets:

First, where the guarantee contract provides otherwise dispute resolution, such consent is binding on the guarantor and thus shall be enforceable. As a corollary, the arbitration agreement in main agreement is not extensible to the guarantor.

Secondly, while the guarantee contract is silent on the issue of dispute resolution, the arbitration agreement as set forth in the main agreement is not automatically binding on the guarantor unless the parties to the guarantee contract is the same as that of main agreement.

In summary, the Meeting Note has sustained the basic stance while providing an exception where the main agreement and the guarantee contract are entered into by the same parties. As indicated by one commentator, the Meeting Note is not a judicial interpretation which can be adopted by the courts to decide cases directly but it to a large extent reflects consensus of judges among China, [8] and hence will produce impact on judicial practice across the whole country.

Nevertheless, some uncertainties may still arise, for instance, whether a mere signature in the main contract by the guarantor is sufficient to furnish the proof about “the same parties”, or shall be in combination with the scenario where an endorsement term of guarantor is incorporated in the main contract. On the contrary, it is also unclear whether a mere existence of term of guarantee is sufficient to make a non-signatory guarantor a party to the main contract.

Another more arbitration-friendly method can be observed from the draft for Revision of Arbitration Law that has been released for public consultation since 30th July of 2021, Article 24 of which provides that the arbitration clause as set out in the main agreement shall prevail over that in the guarantee contract where there is a discrepancy; where the guarantee contract is silent on dispute resolution, any dispute connected thereto shall be subject to the arbitration agreement as set out in main agreement. This article is a bold one which will largely overturn the SPC’s current stance and makes guarantee relationship an exception. A piece of more exciting news comes from the newly-released law-making schedule of 2022 by the Standing Committee of the National People’s Congress,[9] according to which the revision of Arbitration Law is listed as one of the top priorities in 2022 whilst it is still to be seen whether Article 24 in the draft can be retained after scrutiny of the legislature.

4. Concluding Remarks

It is not uncommon that a guarantee for certain debts is provided by virtue of a standing-alone document which is separated from the main contract, whether it is a guarantee contract or a unilaterally-issued guarantee letter. It shall be borne in mind that the close connection between the guarantee document and main contract alone is not sufficient to extend the arbitration agreement as set out in main agreement to a non-signatory guarantor per the consistent legal practice in China over the past 20 years. While the new rules have provided more arbitration-friendly approaches, uncertainties and ambiguities will probably still exist.

From a lawyer’s perspective, as the mainstream opinion in judicial remains unchanged currently, it is necessary to attach higher importance while reviewing a standing-alone guarantee contract which is separated from a master agreement in its formality. In the light of avoiding prospective parallel proceedings incurred thereby, the author advances two options in this respect:

The first option is to insert an article endorsing guarantee’s obligation into the master agreement, and require the guarantor to sign the master agreement, which resembles the scenario in Stellar and Li. Whereas this approach may be less feasible in the post-negotiation phase of master agreement when all terms and conditions are fixed and endorsed, the option mentioned below can be served as an alternative.

The second option is to incorporate into guarantee document a clause which unequivocally refers to the arbitration agreement as set out in master agreement, in lieu of any revision to the master agreement. This approach is in line with Article 11 SPC on Certain Issues Related to the Application of the Arbitration Law which provides that parties can reach an arbitration agreement by reference to dispute resolution clauses as set out in other contracts or documents. While it is noteworthy that from judicial practice in China, such reference shall be specific and clear, otherwise the courts may be reluctant to acknowledge the existence of such arbitration agreement.

[1] Case No: 2001 Min Er Zhong No. 177.

[2] Case No: 2006 Min Si Ta No. 24.

[3] Case No: 2013 Min Si Ta No. 9.

[4] Case No. 4A_128/2008,decided on August 19, 2008, decided by Tribunal federal(Supreme Court) of Swiss, as cited in Extension of arbitration clause to non-signatories (case of a guarantor) – Arbitration clause by reference to the main contract (deemed too general and therefore not admitted), available at https://www.swissarbitrationdecisions.com/extension-of-arbitration-clause-to-non-signatories-case-of-a-gua.

[5] See Yifei Lin: Is Arbitration Agreement in Master Agreement Applicable to Guarantee Agreement? Available at http://www.360doc.com/content/16/0124/11/30208892_530188388.shtml.

[6] Stellar Shipping Co Llc v Hudson Shipping Lines [2010] EWHC 2985 (Comm) (18 November 2010).

[7] Case No: 2018 Zhe 01 Min Te No. 23.

[8] Lianjun Li et al?China issues judicial guidance on foreign related matters, Reed Smith In-depth?25 April 2022??available at https://www.reedsmith.com/de/perspectives/2022/04/china-issues-judicial-guidance-on-foreign-related-matters.

[9] For more details, please see the news post available at https://m.thepaper.cn/baijiahao_18072465. Moreover, per the news report released in late May of 2022, The National Committee of Chinese People‘s Political Consultative Conference had discussed the revision of Arbitration Law in its biweekly symposium held on 30 May 2022, where the attendees had stressed the significance of party autonomy in commercial arbitration, available at: http://www.icppcc.cn/newsDetail_1092041.