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Lydia Lundstedt, Senior Lecturer in Private International Law at the Stockholm University and in Intellectual Property Law at the Linköping University, has accepted the invitation of the editors of the blog to present her recent book, titled ‘Cross-Border Trade Secret Disputes in the European Union: Jurisdiction and Applicable Law’, published by Edward Elgar.

In today’s knowledge-based and data-driven economy, information is a company’s most valuable asset. The most common form of legal protection for information are laws that protect trade secrets. In contrast to patents, copyright, and trademarks, whose importance for protecting intangible assets is well-recognised, trade secret protection has often come in their shadow as the less important form of protection. The importance of legal protection for trade secrets is however gaining acceptance and many states have sharpened their laws on trade secret protection. In determining the form and level of trade secret protection, states consider (often constitutional) rules on the freedom of information, the freedom to compete and operate a business, employee mobility, and privacy. Depending on the social, political, and economic environment of the state, the form and level of protection may vary considerably.

To ensure a ‘sufficient and consistent level’ of protection under the laws of all the Member States, the European Union (EU) enacted Directive 2016/943 on the Protection of Undisclosed Know-how and Business Information (Trade Secrets) against their Unlawful Acquisition, Use and Disclosure. The Directive is in the form of a minimum directive, so Member States may provide for more far-reaching protection. Complicating matters is the fact that trade secret protection is a bit of a ‘strange bird’, which is reflected in the diverging doctrinal basis for trade secret protection. This divergence continues even after the implementation of the Trade Secret Directive, where some Member States continue to provide protection under unfair competition law, others have introduced a sui generis form of protection, and one Member State protects trade secrets as an intellectual property (IP) right. In addition, all Member States continue to protect trade secrets under contract law, and under the legal systems of some Member States, a trade secret holder may raise concurrent claims based on contractual and non-contractual grounds.

Trade secret protection is even more diverse on the international level. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) guarantees only a minimum level of protection for ‘undisclosed information’ and leaves a wide margin of discretion with respect to how Members can afford protection. The inclusion of trade secret protection in a treaty on intellectual property adds to the confusion about the correct classification of trade secrets.

With the ease of digital communications, employee migration, and international trade, trade secret violations can easily have a cross-border, and even a global dimension.  Unlike physical assets, information can move at the speed of light and become ubiquitous instantaneously.  In this respect, trade secrets are like (traditional) IP rights in that trade secrets and IP rights consist of commercially valuable information that are often exploited over national borders in order to take full advantage of their economic potential. In another respect, however, trade secrets differ from IP rights, which pursuant to the territoriality principle, may be in the public domain in some states without affecting their protection in others. This is not the case for trade secret protection because if the information becomes freely accessible, it will no longer fulfil the criterium of secrecy that is required for its continued protection.

Within the EU, one would expect that the environment would be conducive for the litigation of cross-border trade secret disputes because the rules on private international law are harmonised at the EU level. Despite this, cross-border litigation and enforcement of trade secrets is considered to be extremely difficult and is also rare. This may be due to the varying doctrinal bases for trade secret protection and the fact that trade secret violations can take place in contractual and non-contractual contexts. Moreover, if the trader secret holder brings proceedings against a former employee, weaker party rules will affect the choice of forum and applicable law. Another complicating factor is that in some cases, jurisdiction and the applicable law is based on the location of damage, which is difficult to localise as trade secrets are intangible and can be acquired, disclosed, and used everywhere. What is more, there may be a number of potential defendants located in different countries that allegedly violated the trade secrets, and it may be difficult to join them all in one proceeding and under one law.

The book investigates how the EU private international law rules can be interpreted to facilitate the objectives of the EU Trade Secret Directive when trade secrets are litigated and enforced over national borders. A basic assumption for this study is that effective and consistent protection of trade secrets in cross-border situations is facilitated when the parties can resolve their dispute before one court that has jurisdiction over the entire dispute and under one law, resulting in a judgment capable of being enforced in all Member States. When analysing which Member States have jurisdiction and which law or laws are applicable as well as the scope of the jurisdiction and of the applicable law, the book considers the competing interests of the parties and the EU public interest in general.

The book concentrates on three common categories of defendants, namely, contractual partners, employees, and competitors, and describes and analyses where each respective category of defendant can be sued and what law(s) is(are) applicable from an EU private international law perspective. The book also considers whether any of the rules in the Trade Secret Directive might be overriding mandatory rules, public policy (ordre public), or non-excludable rules that displace corresponding rule in the lex causae.

Jürgen Samtleben just published a collection of his work on the PIL of Latin America; he kindly shared the following announcement with us:

Jürgen Samtleben has authored numerous articles over the years on private international law and international civil procedure in Latin America. These contributions have now been updated and systematically organized into a single volume, thereby offering a unique overview of the conflict of laws in Latin American countries. The collection of articles in German, Spanish and English is supplemented by a comprehensive volume containing the relevant statutory materials in their original language as well as in German translation.

The indices of volume I (‘Rechtsordnungen’) and volume II (‘Gesetzestexte’) can be found here and here. More information is available here.

A webinar on early marriages, organised by the Interest Group on Private International Law of SIDI, the Italian Society of international Law, will take place on 5 October 2023 at 4 pm CET.

The event will specifically concern the decision of the German Federal Constitutional Court, of 2023, on the constitutionality of the German law combating child marriages of 2017, and aims to provide comparative reflections on early marriages and their regulation in national and international law.

The main speaker will be Nadjma Yassari (Max Planck Institute for Comparative and International Private Law), while Giacomo Biagioni (University of Cagliari) will act as a discussant.

The webinar, in English, will be broadcast through Microsoft Teams. Those interested in attending are invited to use this link to connect as the webinar begins. No registration is required.

I have already reported that the UK Supreme Court ruled on the meaning of a “matter” in Article II(3) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) in its judgment of 20 September 2023 in Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32.

On the very same day, the Privy Council, speaking through Lord Hodge (other judges were Lord Reed (President), Lord Lloyd-Jones, Lord Briggs, and Lord Kitchin), gave a judgment on Article II(3) NYC in FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corporation [2023] UKPC 33. This case was decided on appeal from the Court of Appeal of the Cayman Islands.

While there is a degree of overlap between the two judgments, the facts of the two cases are different and FamilyMart raised a broader range of issues.

Facts

A traveller to the Far East can be surprised by the number of convenience stores and the range of goods and services they offer. This case concerns a dispute between FamilyMart China Holding Co Ltd (“FMCH”) and Ting Chuan (Cayman Islands) Holding Corporation (“Ting Chuan”), the shareholders of China CVS (Cayman Islands) Holding Corp (“Company”), a Cayman Islands company that operates some 2,400 convenience stores in China under the “FamilyMart” brand.

The relationship between the shareholders is governed by a shareholders’ agreement, which contains a clause providing that “any and all disputes in connection with or arising out of this Agreement [shall be] submitted for arbitration” in Beijing.

In 2018, FMCH presented a petition in a Cayman Islands court to wind up the Company on the just and equitable ground under the Companies Law (2018 Revision). The petition was based on alleged misconduct by Ting Chuan in connection with the management of the Company. Ting Chuan applied to strike out or stay the petition under section 4 of the Foreign Arbitral Awards Enforcement Act, which applies to foreign arbitrations and implements Article II(3) NYC into Cayman Islands law. It provides as follows:

Staying of certain court proceedings — If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to the proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings; and the court, unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings.

Kawaley J in the Grand Court struck out a part of the petition and granted a stay of the remainder. The Court of Appeal overturned this decision on the basis that no part of the winding up petition was arbitrable and that, consequently, the arbitration agreement was “inoperative”. The parties agreed that the dispute fell within the scope of the arbitration clause. The central dispute was whether the FMCH’s petition had made the matters raised in that petition non-arbitrable.

Judgment

To decide the appeal, the UKPC had to rule on the meaning of a “matter” and “inoperative” in section 4 of the Foreign Arbitral Awards Enforcement Act/Article II(3) NYC.

Regarding the first issue, the UKPC essentially set out, albeit in more detail, and relied on the same principles that the UKSC set out and applied in Mozambique. Since I addressed this issue in a previous post, here I want to focus on the second issue, namely the meaning of “inoperative” and the arbitrability of the subject matter and the remedies sought in the court proceedings.

The UKPC stated that there are two broad circumstances in which an arbitration agreement may be inoperative: (1) where certain types of dispute are excluded by statute or public policy from determination by an arbitral tribunal; and (2) where the award of certain remedies is beyond the jurisdiction which the parties can confer through their agreement on an arbitral tribunal. The UKPC referred to the first type as “subject matter non-arbitrability” and to the second as “remedial non-arbitrability” ([70]).

The underlying concept of subject matter non-arbitrability is that there are certain matters which in the public interest should be reserved to the courts or other public tribunals for determination ([72]). For example, by preventing parties by agreement from contracting out of an employee’s right to have access to an employment tribunal and the courts, section 203 of the UK Employment Rights Act 1996 and section 144(1) of the UK Equality Act 2010 preserve a right of access to the courts ([71]). Similarly, a subject matter will be non-arbitrable if “there is an inherent conflict between arbitration and the public policy considerations involved in that particular type of dispute” ([71], referring to [44] of the SGCA case of Larsen]. While there is no agreement internationally as to the kinds of subject matter or dispute which fall within subject matter non-arbitrability ([72]), the court can refer to the jurisprudence of the courts of other common law jurisdictions ([74]).

Remedial non-arbitrability is concerned with the circumstance in which the parties have the power to refer matters to arbitration but cannot confer on the arbitral tribunal the power to give certain remedies. There is a general consensus in the common law world that the power to wind up a company lies within the exclusive jurisdiction of the courts ([75]). There is also a general consensus that an arbitral tribunal can grant inter partes remedies, such as ordering a share buy-out in proceedings for relief for unfairly prejudicial conduct in the management of a company under section 994 of the UK Companies Act 2006. This is because no third party has a legal interest and there is no public element in the dispute ([76]).

That is why even in an application to wind up a company there may be matters in dispute, such as allegations of breaches of a shareholders’ agreement or of equitable duties arising out of the parties’ relationship, which can be referred to an arbitral tribunal, notwithstanding that only a court can make a winding up order ([77], [78]).

Following these principles, the UKPC decided that some matters were arbitrable, while others were non-arbitrable. Arbitrable matters were: whether FMCH had lost trust and confidence in Ting Chuan and the management of the Company; and whether the parties’ relationship had irretrievably broken down. A stay was granted and the parties were referred to arbitration in relation to these matters. Non-arbitrable matters were: whether it was just and equitable to wind up the company; whether an order should be made requiring Ting Chuan to sell its shares to FMCH; or whether a winding up order should be made. The parties were not referred to arbitration in relation to these matters. Nevertheless, a stay was ordered because the determination of the arbitrable matters would be an essential precursor to the assessment of the non-arbitrable matters.

Commentary

This is an important judgment that offers not only an authoritative interpretation of the concept of a “matter” in Article II(3) NYC (like its sister UKSC judgment in Mozambique) but also of the concept of “inoperative” in this provision.

Importantly, the UKPC clarified the difference between “subject matter non-arbitrability” and “remedial non-arbitrability”. However, the judgment can be criticised on two bases.

First, the efforts of the UKPC to decide the case by reference to comparative law are commendable. Still, the court’s focus on the jurisprudence from the “leading arbitration jurisdictions in the common law world” ([57]; similarly [74], [75], [77]) has a whiff of parochialism. The same criticism can be levelled at the UKSC judgment in Mozambique, which focused on the jurisprudence of the “leading jurisdictions involved in international arbitration in the common law world” ([71] of that judgment).

Second, the court could have gone a step further in its dealing with the concepts of “inoperative” and set out some kind of test for determining whether or not a matter is arbitrable. Provisions like 203 of the UK Employment Rights Act 1996 and section 144(1) of the UK Equality Act 2010 that expressly prohibit contracting out are an exception. When it comes to non-arbitrability for reasons of public policy, one is left to wonder when exactly “there is an inherent conflict between arbitration and the public policy considerations involved in that particular type of dispute” or when there is “no public element in the dispute”. The instruction to the courts to look at “the jurisprudence of the courts of other common law jurisdictions” to answer these questions is not necessarily helpful. Can the courts look at the jurisprudence of the courts of non-common law jurisdictions, which are the majority of NYC jurisdictions and include some very important arbitration centres? Does this instruction even make much sense in a world where the NYC and the UNCITRAL Model Law have done so much to transcend the common law – civil law divide in international commercial arbitration?

Article 1 of the following decision confirms the participation of Ireland to e-Codex: Commission Decision (EU) 2023/2099 of 28 September 2023 confirming the participation of Ireland in Regulation (EU) 2022/850 of the European Parliament and of the Council on a computerised system for the cross-border electronic exchange of data in the area of judicial cooperation in civil and criminal matters (e-CODEX system), OJEU L 241, 29.9.2023, p. 144

Source: http://data.europa.eu/eli/dec/2023/2099/oj

A new conflict of laws article was just published today on the African Journal of International and Comparative Law. It is titled: CSA Okoli, A Yekini & P Oamen, “The Igiogbe Custom as a Mandatory Norm in Conflict of Laws: An Exploration of Nigerian Appellate Court Decisions.”

The abstract reads as follows:

Under the Igiogbe custom of the Bini Kingdom of Edo State Nigeria, the eldest surviving son exclusively inherits the ancestral home of his deceased father. This custom is a mandatory norm in conflict of laws. Litigation on the custom has been described as a matter of life and death. There is a widely shared view among academic writers, practitioners, and judges that this customary law is absolute. Contrary to this popular view, this work argues that the Igiogbe custom can be displaced by statute and other customary or religious laws. To substantiate this position, this article examines all the reported appellate court decisions on the Igiogbe custom and other connected principles. It is often taken for granted that every Bini man is subject to customary law, thereby leading to the overriding application of the Igiogbe custom. Recent developments in case law suggest otherwise. There is a conflict of personal law question that is often ignored in most litigation concerning the Igiogbe. Careful consideration of this question can potentially lead to the application of other systems of succession law (statutory, religious, and other customary laws) other than the Igiogbe custom. Besides, these conflict of laws techniques and constitutional human rights norms can be used to strike the appropriate balance between competing interests and reasonable legitimate expectations of the deceased and their heirs.

 

Originally posted in the NGPIL website

The Nigeria Group on Private International Law “(NGPIL”) invites submissions for the annual NGPIL Conflict of Laws’ Competition. The winner will be awarded for the best essay on any aspect of Nigerian conflict of laws. Entries will be accepted from the following: an undergraduate and/or postgraduate scholar studying in Nigeria, or any Nigerian lawyer five years call or below practising and residing in Nigeria. The essay should be unpublished at the time of submission. Submitted essays should be in the English language. Submitted essays should also be within five to eight thousand words. Competitors may be citizens of any nation, age or gender but must be an undergraduate and/or postgraduate scholar studying in Nigeria, or any lawyer below five years post-call experience practising and residing in Nigeria.

The first prize is  150,000 Naira (NGN), and the winner of the competition will be encouraged to publish the paper in any high-quality peer reviewed journal on private international law (conflict of laws). The second prize is  90,000 Naira (NGN), and third prize is  60,000 Naira (NGN). The prize is sponsored by and will be awarded by NGPIL.

Submissions to the Prize Committee must be received no later than January 15, 2024. Entries should be submitted by email in Word or pdf format. The winner will be announced no later than 2 months after the deadline. Decisions of the NGPIL on the winning essay and on any conditions relating to this prize are final. Submissions and any queries should be addressed by email to ngpilaw@gmail.com. All submissions will be acknowledged by e-mail.

Previous Winners

Oluwabusola Fagbemi (Winner for the 2022/2023 session)

Solomon Adegboyo (Winner for the 2021/2022 session)

 

The Court of Justice will not be extremely busy with private international law this October, but I am pretty sure the three cases – one of them in particular- have generated a lot of expectation beyond the usual crowd.

Advocate General J. Richard de la Tour will deliver his Opinion in case C-566/22, Inkreal, on Thursday 12. In the request for a preliminary ruling, the Nejvyšší soud (The Supreme Court, Czech Republic) submits the following question to the Court:

From the perspective of the existence of an international element, which is required for [the Brussels I bis regulation] to apply, is the application of that regulation to be based solely on the fact that two parties with their seat in the same Member State agree on the jurisdiction of courts of another EU Member State?

The main proceedings concern an application for the payment of EUR 153,740 plus interest and ancillary costs. The applicant, a company incorporated under Slovak law and established in Slovakia, is asking for the determination of the court having territorial jurisdiction to rule on the merits of the case pursuant to Law No 99/1963 – the code of civil procedure- as amended (the ‘CCP’).

The amount of EUR 153,740 corresponds to receivables assigned to the applicant by means of an agreement dated 8 December 2021. The receivables arose from an Agreement on a Financial Loan dated 29 June 2016 and Agreement on a Financial Loan dated 11 March 2017, entered into by the applicant’s legal predecessor, as the creditor, and the defendant, as the debtor. Both creditor and debtor are domiciled in Slovakia.

According to the Loan Agreements, ‘any ambiguities or disputes arising from the Agreement and in connection therewith shall be first resolved by negotiation aimed at reaching a solution acceptable for both parties. If the parties are unable to settle such a dispute, the dispute shall be settled by a court of the Czech Republic having substantive and territorial jurisdiction, in line with Law No 99/1963, the Code of Civil Procedure, as amended.’ The applicant holds that this is a valid prorogation agreement in a private law relationship involving international elements, pursuant to Article 25(1) of the Brussels I bis regulation, and there is no special or exclusive jurisdiction of another court pursuant to the regulation. The applicant states that, in view of the fact that the defendant is a legal entity having its registered office abroad with no plant or organisational unit in the Czech Republic, and that, at the same time, international jurisdiction of the courts of the Czech Republic is given pursuant to the Brussels I bis regulation, territorial jurisdiction cannot be determined in the standard fashion, as the conditions for determining territorial jurisdiction pursuant to the CCP are lacking or cannot be established. The applicant asked the Supreme Court to determine which court will hear and decide the matter.

The case will be decided by a chamber of five judges, with A. Kumin as reporting judge.

On the same day, the Court will publish its decision on C-21/22, OP, on Regulation (EU) No 650/2012 on matters of succession. I reported on the case here. In his Opinion delivered on 23 March 2023, related only to the second question asked, Advocate General M. Campos Sánchez-Bordona suggests the Court of Justice replies to the Sąd Okręgowy w Opolu (Regional Court, Opole, Poland) as follows:

Article 75 of Regulation (EU) No 650/2012 …, in conjunction with Article 22 thereof, is to be interpreted as not precluding a situation where, pursuant to a bilateral treaty concluded between a Member State and a third country before the accession of that Member State to the European Union, a national of the third country, who is resident in the Member State bound by the bilateral treaty, does not have the right to choose the law applicable to his or her succession.

Finally, on 17 October 2023, a hearing will take place in case C-633/22, Real Madrid Club de Fútbol. Here, the French Court of Cassation requests the interpretation of the ‘old’ Brussels Regulation in relation to the Charter of Fundamental Rights of the EU:

1) Must Articles 34 and 36 of the [Brussels I] regulation and Article 11 of the Charter of Fundamental Rights of the European Union be interpreted as meaning that a financial penalty imposed for harm caused to the reputation of a sports club by the publication of a story in a newspaper can manifestly infringe freedom of expression and therefore constitute a ground for refusing to recognise and enforce a judgment?

2) In the event of an affirmative answer, must those provisions be interpreted as meaning that the court in which enforcement is sought may find that the penalty is disproportionate only where the damages have been categorised as punitive either by the court of origin or by the court in which enforcement is sought and not where they have been awarded as compensation for non-material damage?

3) Must those provisions be interpreted as meaning that the court in which enforcement is sought may take account only of the deterrent effect of the penalty in the light of the resources of the person on whom the penalty is imposed, or may it have regard to other factors such as the seriousness of the wrong or the extent of the harm?

4) Can the deterrent effect in the light of the resources of the newspaper in itself form a ground for refusing to recognise and enforce a judgment due to a manifest infringement of the fundamental principle of freedom of the press?

5) Must the deterrent effect be understood as meaning that the financial stability of the newspaper is threatened or may it simply refer to an intimidating effect?

6) Must the deterrent effect on the newspaper publishing house and on a journalist as an individual be assessed in the same way?

7) Is the general economic situation of the print media a relevant factor when assessing whether, beyond the newspaper in question, the penalty is likely to have an intimidating effect on the media overall?

Background of the preliminary reference is a Spanish decision sentencing the newspaper Le Monde and one of its journalists to pay damages to Real Madrid and to AE, a member of its medical team, for damage to their reputation. Real Madrid and AE asked for the recognition and enforcement of the decision in France; the Paris Court of Appeal refused. On cassation, the referring court asks the Court a series of questions relating to the reason for refusal of recognition based on public policy (Article 34, point 1, of the Brussels I Regulation), read in the light of Article 11 of the Charter.

Judge T. von Danwitz will act as reporting judge for a decision to be taken by the Grand Chambre, benefiting from an Opinion by Advocate General M. Szpunar.

The question of the accession (or reluctance to accede) of Muslim countries to the 1980 HCCH Convention has attracted the interest of scholars from Muslim countries and abroad. Scholars who have addressed this issue have come to different (sometimes contradictory) conclusions, especially when it comes to the influence of classical Islamic rules and principles on the attitudes and policies of Muslim states. Unfortunately, it is not uncommon that the available studies on this subject do not take into account the actual judicial practice of Muslim jurisdictions and focus more on the (theoretical) compatibility (or not) of Islamic rules and principles underlying the 1980 HCCH Convention.

 

This post briefly presents some decisions dealing with the issue of cross-border child abduction under the 1980 HCCH Convention in a Muslim state, Morocco, but without going into too much into details or assessment, as this deserves to be done properly in a dedicated article. Morocco became a member state of the HCCH in 1993 and a party to the 1980 HCCH Convention in 2010. It is often presented in literature as the first Islamic country to ratify the 1980 HCCH Convention. The Convention effectively entered into force in Morocco on March 1, 2012, with the publication of the text of the Convention in the Official Gazette (No. 6026). Since then, and for more than a decade, Moroccan courts have been dealing with cross-border abduction cases under the Convention. To my knowledge, there are so far seven Supreme Court decisions on the application of the 1980 HCCH Convention. Surprisingly, these cases have not been included in the database maintained by the HCCH (INCADAT), nor (apparently) have they been reported or commented on elsewhere, although they provide extremely valuable material for the study of the operation of the 1980 HCCH Convention in an Islamic context.

 

The seven cases are summarized in the following tables:

 

Case 1 Ruling No. 283 of 2 June 2015 (Case No. 443/2/1/2014) Taking Parent Mother (M), Moroccan national Left behind Parent Father (F), Moroccan national, domiciled in France Child(ren) 1 (son) Moroccan national born in France Age (at the time of the return order application as deduced from the facts) 4 Return requested to France Cited Articles Art. 3, Art. 12, Art. 13 Legal Issue(s) Whether there was a wrongful removal of the child and whether the 1980 HCCH Convention should apply Ruling (loose summary) M and F had their habitual residence in France with their child before M returned to Morocco with the child. According to Frech law (Art. 371-1 and 2 Civil Code), which is the law of the child’s place of habitual residence prior to its removal to Morocco, custody (hadhana) is a right jointly shared by the parents during their marriage

Morocco has ratified the 1980 HCCH Convention, thus its application should take precedence over national law upon its publication. The court of the appealed decision which failed to apply the HCCH Convention violated the Constitution and the provisions of the Convention Outcome Appeal admitted. The appealed decision rejecting the return of the child overturned

 

Case 2 Ruling No. 90 of 26 January 2016 (Case No. 286/2/1/2015) Taking Parent Father (F), Moroccan national, domiciled in Morocco Left behind Parent Mother (M), German national, domiciled in Germany Child(ren) 4 (3 sons and 1 daughter). All Moroccan nationals Age

(At the time of the return order application as deduced from the facts) 13, 11, 9, and 6 Return requested to Germany Cited Articles Art. 2, art. 3 Legal Issue(s) Whether there was child abduction in the meaning of the 1980 HCCH Convention Ruling (loose summary) The children’s habitual residence is in Morocco (as they have been living there with their father since M decided to return to Germany). Therefore, the conditions for the application of the Convention are not met. Outcome Appeal admitted. The appealed decision ordering the return of the children overturned

 

Case 3 Ruling No. 196 of 27 March 2018 (Case No. 660/2/1/2016) Taking Parent Mother (M), Muslim Moroccan Left behind Parent Father (F), non-Muslim Italian Child(ren) 2 (sons) born out of wedlock in Italy Age (at the time of the return order application as deduced from the facts) One has 7, the age of the other is not unclear due to confusing details in the judgment Return requested to Italy Cited Articles Art. 3, Art. 12, Art. 14 Legal Issue(s) Whether the application of the 1980 HCCH Convention depends on the existent of a legitimate filiation between the children and their father Ruling (loose summary) It was established that the two children had been removed from their habitual residence in Italy to Morocco in violation of the provisions of the 1980 HCCH Convention, which does not require the existence of legitimate bond (filiation) between the parents and the child. Outcome Appeal rejected. The appealed decision ordering the return of the children affirmed

 

Case 4 Ruling No. 303 of 28 July 2020 (Case No. 629/2/2/2018) Taking Parent Mother (M), Moroccan Left behind Parent Father (F), Moroccan, domiciled in Belgium Child(ren) 1 (daughter) Age (at the time of the return order application as deduced from the facts) unclear Return requested to Belgium Cited Articles Art. 3, Art. 5, Art. 16 Legal Issue(s) Whether the mother’s action for custody can be admitted despite the ongoing proceedings for the return of the child return under the 1980 HCCH Convention Ruling (loose summary) By rendering a decision on the custody despite the ongoing proceedings to order the return of the child, the court of the appealed decision violated the provisions of the Convention Outcome Appeal admitted. The appealed decision conferring custody to the mother overturned

 

Case 5 Ruling No. 38 of 2 February 2021 (No. 1226/2/1/2019) Taking Parent Father (seems to be Moroccan) Left behind Parent Mother (seems to be Canadian) Child(ren) 2 (daughters) Age (at the time of the return order application as deduced from the facts) 11, 5 Return requested to Canada (Ontario) Cited Articles Art. 13(4) Legal Issue Whether the opinion of the children who refused to return with their mother should be heard and taken into account Ruling (loose summary) The court of the appealed decision which disregarded the father’s arguments according to which his daughters refuse to return to Canada and that they suffer from their mother’s mistreatment and refused to accept his request to initiate an investigation in order to find the truth violated the provisions the Convention Outcome Appeal admitted. The appealed decision ordering the return of the children overturned with remand

 

Case 6 Case 6: Ruling No. 297 of 8 June 2021 (Case No. 61/2/1/2020) Taking Parent Mother (M) (nationality unclear, but seems to be Moroccan) Left behind Parent Father (F) (nationality unclear, but seems to be Moroccan) domiciled in Belgium Child(ren) 1 (son). The child in this case had a brother Age (at the time of the return order application as deduced from the facts) 8 Return requested to Belgium Cited Articles Art. 3, Art. 17 Legal Issue Whether the judgment conferring custody to the taking parent in the State where the child was wrongfully retained could justify the refusal to order the return of the child to the State of its habitual residence Ruling (loose summary) The judgment rendered in the State where the child was retained attributing custody of the child should not be taken into account. The court of the appealed decision which considered that the M’s refusal to return the child constituted a wrongful retention within the meaning of article 3, overturned the first instance decision of the CFI and ordered the return of the child to Belgium, exercised its discretion in assessing the facts and correctly took into account the best interests of the child Outcome Appeal dismissed. The appealed decision ordering the return of the child affirmed

 

Case 7 Ruling No. 421 of 26 July 2022 (Case No. 200/2/1/2019) Taking Parent Father (F) (nationality unclear but seems to be Moroccan) Left behind Parent Mother (M) (nationality unclear but seems to be Moroccan) domiciled in Belgium Child(ren) 3 (1 daughter and 2 sons) Age (at the time of the return order application as deduced from the facts) 10 and 8 for the sons, 3 for the daughter Return requested to Belgium Cited Articles Art. 13 [(1)(b)] Legal Issue Whether there was grave risk that could justify the refusal to return the children to their place of habitual residence Ruling (loose summary) The evidence and testimony presented to the court show that the mother, who was prosecuted for adultery, verbally and physically abused the children and lacked moral integrity and rectitude (as she used to invite a stranger into the home and cheated on the father in front of the children); therefore, returning the children to their mother would expose the children to grave risks. Outcome Appeal admitted. The appealed decision which ordered the return of the children overturned

 

 

 

 

It is a truth universally acknowledged that a significant portion of international commerce is organized around instruments and structures that do not emanate from national states and laws but from private entities. Traditionally, most legal scholars addressing this phenomenon could be sorted into one of two camps: those who want to limit the notion of ‘law’ to the state and see instances of private ordering primarily as social, rather than legal phenomena; and those who consider national law already as a abstract concept with limited and decreasing importance for the reality of international business. Torsten Kindt belongs to neither of those two camps. With his recently published book, based on his doctoral thesis, he attempts to fill the gap left between the two seemingly irreconcilable positions, with a special focus on the transnational dimension of private ordering.

Kindt develops his argument in two steps. In the first part of the book (chapters 1 and 2), he takes a closer look at three instruments of particular importance for the financial sector that have largely been developed by private actors and independently from state law: letters of credit, syndicated loans, and credit derivatives. He focuses on the structural similarities between those instruments in order to demonstrate, in particular, the surprising degree to which they still incorporate and react to state law.

In the second part of the book (chapters 3 to 6), Kindt then introduces the concept of the ‘transnational contract’ – a contract corresponding to, and executed in accordance with, an internationally accepted model document negotiated and supervised by members of the relevant sector or industry – in order to discuss the ways in which existing state law can, in turn, incorporate the reality of the previously discussed instruments. For each area of law discussed – choice of law, contract law, and international civil procedure – Kindt identifies a variety of avenues for such incorporation, including, e.g. a (very) generous approach to choice-of-law and choice-of-court clauses that are linked or correspond to a model document.

Listing all the other intersections between transnational contracts and state law discussed by Kindt would exceed the limits of this post. Fortunately, though, the book itself is available open access, offering to the reader not only a wealth of insights into the private ordering of international finance but also a spirited and stimulating discussion of its present and potential future incorporation into national and international private law. It is highly recommended to anyone working on international business law, legal pluralism, and anything in between.

 

X v Y (*grumbles his usual grumble about anonymisation*) ECLI:NL:GHDHA:2023:1759  is an interesting judgment discussing, yet not determining, the extent of Rome I’s Article 18’s ‘burden of proof’ provision. Clearly the discussion has echoes for the similar provision in Article 22 Rome II.

Article 18 Rome I

Burden of proof

1.   The law governing a contractual obligation under this Regulation shall apply to the extent that, in matters of contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   A contract or an act intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 11 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.

Article 22 Rome II

Burden of proof

1.   The law governing a non-contractual obligation under this Regulation shall apply to the extent that, in matters of non-contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   Acts intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 21 under which that act is formally valid, provided that such mode of proof can be administered by the forum.

The court first of all [5.6] justifiably confirms that A24(1) BIa does not stand in the way of its jurisdiction, which parties agreed to in a choice of court clause per A25 BIa: the claim concerns monies allegedly still owed on the transfer of a share of ownership in German real estate. It does not have rights in rem in that property as the object of the proceedings.

Choice of law was made for German law. The A18 Rome I issue is triggered by a declaration made by the claimant in the main proceedings, in front of a German notary. Claimant argues that statement was made to speed up the entry of the sale in the German land register, not to discharge the defendant in the main proceedings of the monies owed. The court [5.9] holds that German law as a result of A18 only determines the burden of proof and evidentiary value of that statement, to the degree German law has specific rules relating to the law of obligations generally or for the specific contract at issue.

On the facts, the court [5.16] holds that it need not determine the lex causae issue for evidentiary value under the Dutch ‘antikiesregel’ ―meaning the court being absolved of the proprio motu obligation to determine applicable law if the alternatives lead to the same result― for under neither laws the notarial statement has discharging effect. I for one am not convinced that the antikiesregel complies with the effet utile of EU private international law, but that is a different matter.

Geert.

Extent of A18 Rome I's burden of proof being subject to lex causae, v procedure being subject to lex fori (here: sale of ownership of German real estate, subject to German law as lex voluntatis)

Den Haag court in appeal, X v Y ECLI:NL:GHDHA:2023:1759 https://t.co/SXDUgdORYB

— Geert Van Calster (@GAVClaw) September 19, 2023

The Working Group charged by the Hague Conference on Private International Law with advancing the Jurisdiction Project met in Buenos Aires from 18 to 22 September 2023. This was the fifth meeting of the Working Group since its establishment, in 2021.

The Jurisdiction Project builds on the conclusion of the 2019 Judgments Convention and explore the possibility of drafting a harmonised set of rules dealing with jurisdiction and parallel proceedings.

In establishing the Group, the Council on General Affairs and Policy of the Conference tasked it to proceed, in an inclusive and holistic manner, with an initial focus on developing binding rules for parallel proceedings and related actions, while acknowledging the primary role of both jurisdictional rules and the doctrine of forum non conveniens, notwithstanding other possible factors, in developing such rules.

No detailed report of the recent Buenos Aires meeting was publicly available at this stage at the time of writing this post. As stated in the news section of the website of the Hague Conference, the Working Group “made further progress on the development of draft provisions on parallel proceedings and related actions or claims”.

The detailed reports of previous meetings, with the draft texts resulting therefrom, can be found here (February 2022) and here (February 2023).

The sixth meeting of the Working Group will take place in January 2024. The Group will then report on the progress of its work to the Council on General Affairs and Policy. The Council is expected to address the topic (and decide about the next steps) at its next meeting, in March 2024.

Those interested in the Project may refer to the scholarly works listed in the useful bibliography prepared by the Permanent Bureau of the Conference.

On 2 August 2023, Gerard Quinn, the UN Special Rapporteur on the rights of persons with disabilities, and Claudia Mahler, the Independent Expert on the enjoyment of all human rights by older persons, issued a joint statement regarding the European Commission’s proposals of 31 May 2023 on the protection of adults in cross-border situations.

As explained in a post on this blog, the latter proposals consist of a proposal for a Council Decision whereby all Member States would become (or remain) parties to the Hague Convention of 2000 on the International Protection of Adults Convention “in the interest of the Union”, and a proposal for a Regulation of the Parliament and the Council that would complement the Hague Convention in the relations between Member States, including by the creation of a European Certificate of Representation which would make it easier for the representatives of an adult to prove their powers in a Member State other than the Member State where those powers were conferred or confirmed.

Scope and Purpose of the Submission

The joint submission examines the above proposals against the background of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). While acknowledging that private international law “has a profoundly important role to play in giving effect to the object and purpose, substance and interpretation of the UNCRPD”, the authors express serious reservations regarding the solutions envisaged by the Commission, and reiterate the idea – voiced in a previous joint statement, of 2021 – whereby the Hague Convention should “be re-purposed” in light of the UNCRPD “to subserve higher and newer goal of protecting human autonomy”.

According to the document, ratification of the Hague Convention and its implementation (including regionally, through the proposed EU measures) “must selfconsciously steer toward higher substantive norms and trends”, notably as regards the preservation of the autonomy of persons with disabilities.

There is “a real risk”, the submission warns, that, “if enacted as proposed”, the Regulation and the Decision

will only be used to freeze into place an outdated policy response to disability and the needs of older persons [and] only attract needless legal liability in the international legal order for the EU and its Member States.

Hence the call to

think through how the Hague Convention might be selfconsciously moulded to underpin and not undermine the UN CRPD and also create breathing space for the drafting and eventual adoption of a universal (UN) treaty on the rights of older persons.

Main Concerns Expressed in the Submission

The authors of the submission note that the Commission did recall the UNCRPD in its proposals, notably in Recitals 10 and 15 of the proposed Regulation, but consider that is largely insufficient. They just “do not see any consistent follow-through from these Recitals in the substantive provisions of the proposed Regulation”, and rather see “many contradictions”.

According to Recital 10, the interpretation of the Regulation “should be guided by its objectives that are to enhance the protection of fundamental rights and freedoms and other rights of adults in cross-border situations, including their right to autonomy, access to justice, right to property, right to be heard, right to free movement and equality”, since the rights enshrined in this regard in both the UNCRPD and the Charter of Fundamental Rights of the European Union “are to be protected both in national and cross-border cases”. Measures taken in relation to persons with disabilities, the Recital goes on, are to be in line with the UNCRPD in order to benefit from recognition under the Regulation.

For its part, Recital 15 of the proposed Regulation observes that, regardless of the terminology used in each Member State, “measures directed to the protection of adults and taken in compliance with the fundamental rights of the adults concerned should circulate without obstacles in the Union”, adding that, to this end, the Regulation “should be interpreted in accordance with the Charter and the UNCRPD”, where assessing whether a measure taken by the authorities of another Member State is not manifestly contrary to public policy (and should accordingly be refused recognition), “the authorities of a Member State where the recognition is sought should assess whether that measure ensures the fundamental rights of the adult, in light of Articles 3, 9 12 and 19 of the UNCRPD”.

All this being regarded as insufficient, the authors of the submission reiterate the view, expressed in the joint statement of 2021, mentioned above, that States, when joining the Hague Convention, should adopt an interpretive declaration whereby they would commit to interpret and apply the Hague Convention in accordance with obligations arising out of or relating to their participation in the UNCRPD and other relevant human rights obligations, “or as a result of participation in future human rights treaties” on the same matter.

The move, the submission explains, “would make clear (not only within the EU but also vis-à-vis third States) that the CRPD is given lexical priority”.

The authors of the joint submission further suggest, for the same purpose, that States joining the Hague Convention should make a reservation to that Convention, aimed at excluding (to the effect that the Convention does allow for it) “institutionalisation” (i.e., measures whereby an adult would be placed or kept in a residential institution against or regardless of their will), from the scope of protective measures that would benefit from the Convention (and the Regulation).

This would play a significant role, they say, in ensuring that institutionalisation “is no longer seen as an appropriate response to the needs of persons with disabilities or older persons”.

According to the submission, the proposed Regulation should even go further than that, and “explicitly” prohibit institutionalisation “as a form of ‘protection’ … as between EU Member States”, as this would be “manifestly at odds” with Articles 5 and 19 of the UNCRPD.

The submission is also concerned with “representation agreements”, a term used in the document to refer to private mandates or “powers of representation”, to use the language of the Convention. The authors argue, first, that the arrangements in question “should be re-framed to only mean ‘supported decision making agreements’”. Arrangements “that only kick into place upon the occurrence of a contingency like ‘incapacity’”, it is added, should be “avoided at all costs”.

Some General Remarks

Gerard Quinn and Claudia Mahler address in their submission a range of delicate and complex issues. These cannot be discussed in detail here. I will limit myself to two rather general remarks.

Do the Hague Convention (and the Proposed EU Regulation) Really Need “Re-purposing”?

The joint submission appears to build on the premise that the rules of private international law (PIL) laid down in the Hague Convention (and in the Proposed Regulation) are designed to serve goals that differ from (and couldin fact be incompatible view) the objects of the UNCRPD. The general orientation, the submission seems to argue, not just their practical operation, should accordingly be reconsidered.

This assumption is, in my view, questionable. In a contribution to the Guide to Global Private International Law edited by Paul Beaumont and Jayne Halliday (Hart Publishing 2022), I argued that the Hague Convention was designed in such a way as to advance precisely the goals that the UNCRPD (which was adopted a few years later) is meant to promote.

The Convention, for example, sets out some rather elaborate rules regarding the allocation of jurisdiction among Contracting States and the mutual communication and cooperation between the authorities of the States concerned. These rules depart significantly from those found in other texts (the Brussels I bis Regulation for instance). This is so because they are inspired by policy considerations that reflect the peculiar concerns that surround the protection of adults, including the preservation and enhancement of their autonomy. In fact, the Convention is not guided by “value-neutral” policies such as legal certainty, nor it purports to ensure that Contracting States “blindly” open their legal systems to measures of protection taken elsewhere, or private mandates governed by foreign law. Rather, the Hague Convention aims to ensure that the fundamental rights of the adults concerned may be properly realised in cross-border situations; the same can be said, generally speaking, of the proposed EU Regulation.

The question, then, in my view, is not so much whether the purpose of the Convention or the proposed Regulation should be “corrected”. The issue is rather whether the technical solutions in the Convention and in the Regulation are such that they effectively and efficiently ensure the realisation of the UNCRPD in all circumstances.

Thus, the matter is not one of orientation, but one of legal engineering. I believe the Convention and the proposed Regulation already go in the same direction as the UNCRPD. One might wonder whether the interpretation of the Convention and the wording of the proposed Regulation can be improved in a way that is more conducive to the objectives of the UNCRPD being fully met.

Should References to the UNCRPD be Featured More Prominently in PIL Rules in this Area?

The joint submission seems to underlie a concern for the visibility of the UNCRPD. This is entirely understandable. The UNCRPD brought about a real paradigm shift in disability law. Tremendous efforts are needed at the national, regional and international law to make sure that the rights enshrined in the UNCRPD turn into policy and normative changes that can actually improve the life of those concerned. In this sense, recalling the achievements of the UNCRPD and the challenges posed by its implementation is no doubt helpful.

That said, various elements indicate that PIL scholars and practitioners are already generally aware, notably in Europe, of the need to take human rights seriously in their day-by-day work.

For instance, more than twenty years have passed since the European Court of Human Rights ruled, in Pellegrini, that foreign judgments simply cannot be recognised if they were given in breach of the fundamental rights of the parties. And while it’s true that EU legislation has made the (intra-EU) movement of judgments easier, but – as the Court of Justice itself consistently repeated (starting from Debaecker) – this goal cannot be attained by undermining in any way the fundamental rights of those concerned. The two-decade long experience with EU texts dealing with the cross-border protection of children further attest that it is perfectly possible to embody human rights considerations in PIL instruments. Additionally, as the Court made clear in Krombach, the public policy defence – if no other tools are available – can always be triggered to avoid that fundamental rights are infringed through a “mechanical” application of PIL rules.

The question, accordingly, is not whether practitioners should be directed at taking the UNCRPD into account (they obviously should, and this should occur in respect of any rule, in the field of PIL or elsewhere). The issue is, again, technical rather than political in nature. It is uncontroversial that PIL rules must be crafted and applied in a manner that is entirely consistent with the UNCRPD: the question is, rather, whether this entails that safeguards other than those arising from the Convention and the Regulation must be adopted.

The joint submission suggests that States should issue a declarative interpretation when ratifying the Hague Convention that the latter must be read and applied in light of the UNCRPD, and even make a reservation regarding institutionalisation.

I’m not entirely certain this would be strictly necessary (the Vienna Convention on the Law of Treaties already provides various tools aimed to guarantee the kind of inter-textual coordination advocated by the submission), and sense that a similar initiative may have some unintended adverse effects.

I consider, however, that such a move would hardly be sufficient in itself. It is the task of those applying PIL rules (and, of course, the task of the Union’s legislature, for its part) to ensure, creatively as the case may be, the proper articulation of PIL rules and human rights instruments relating to the protection (including the self-determination) of adults. It’s a complex and certainly unfinished task, but one that should reasonably be approached with optimism.

The joint submission of Gerard Quinn and Claudia Mahler is a powerful reminder that the topic requires further discussion, and that efforts aimed at ensure mutual understanding between experts in different fields (human rights law and PIL, in this case) remain crucially necessary.

In C-632/21 JF and NS v Diamond Resorts Europe Limited (Sucursal en España) (‘Diamond Resorts Europe) the CJEU has held that Article 6(2) Rome I on consumer contracts is exhaustive, preventing a consumer to shop for more favourable laws different from those of their habitual residence.

Applicants are British consumers resident in the UK who concluded, on 14 April 2008 and 28 June 2010 respectively, two timeshare contracts with Diamond Resorts Europe, an English company operating as a branch in Spain of the Diamond Resorts group. The accommodation subject to the timeshare is spread across the EU with focus on Spain. Applicants request invalidity of the contracts on the basis of the Spanish timeshare laws, which implement the relevant EU law at issue. They seize a Spanish court, claiming the proceedings have as their object a right in rem in immovable property (the jurisdictional echo of C-73/04 Klein v Rhodos Management already should have made them think otherwise imho). Defendants argue the claim concerns a right in personam which in consequence of Rome Convention’s and /or the Rome I Regulation’s provisions on consumer contracts, are subject to the laws of the habitual residence of the consumers, i.e. English law.

The CJEU first of all holds (para 55) that as a consequence of Articles 66(a) and 126 of the UK-EU Withdrawal Agreement, the Rome Regulation applies to one of the contracts only, the other one being subject to the Rome Convention. It also confirms (para 52) that despite the contracts having been concluded between UK parties, the contract is clearly ‘international’ given the presence of foreign elements.

Next, it confirms without much ado (para 70 ff) the contracts as consumer contracts, notes lex voluntatis as being English law, and in consequence of the consumer title, that lex voluntatis being the same lex contractus as would have applied in the absence of choice.

Importantly, with reference mutatis mutandis to CJEU Schlecker, and a clear hint as to the future reply in VK v N1,

“An interpretation whereby it would be possible to derogate from the conflict-of-law rules laid down by the Rome I Regulation for determining the law applicable to consumer contracts, on the ground that another law would be more favourable to the consumer, would necessarily seriously undermine the general requirement of predictability of the applicable law and, therefore, the principle of legal certainty in contractual relationships involving consumers” (para 75)

A further question on Article 9 overriding mandatory provisions is declared inadmissible for lack of any detail on the nature of the national laws, given by the referring court.

Geert.

New #CJEU judgment applicable law Rome I, re timeshare agreements and consumer law
C-632/21 Diamond Resorts Europehttps://t.co/IBmyg43pzM

— Geert Van Calster (@GAVClaw) September 14, 2023

This post was written by Nadia Rusinova (Hague University of Applied Sciences).

On 12 September 2023 a draft law to amend and supplement other statutes regarding the proceedings in civil cases under the application of the law of the European Union was submitted for consideration to the Bulgarian Parliament.

The adoption of legislative changes in the Civil Procedure Code, Child Protection Act and Private International Law Code is explained in the proposal as necessitated by the need to ensure the smooth and proper functioning of the common European area of justice while respecting the different legal systems and traditions of the Member States. The draft law is currently under discussion.

Civil Procedure Code

The draft law refers to the special rules regarding civil proceedings under the application of EU law. It provides conditions for implementing the provisions of three instruments: the Taking of Evidence Regulation, the Service Regulation and the Brussels II ter Regulation.

The amendments regarding the Taking of Evidence Regulation concern: the participation of representatives of the requesting court in evidence collection by the requested court, and the rights of the parties, their representatives, and experts to participate in evidence collection in another Member State as permitted by Bulgarian law (Article 615 of the Civil Procedure Code); possibility for direct collection of evidence in another Member State by the court, a delegated member of the court, or an expert appointed by the court (Article 614); implementation of Article 3(1) of the Regulation specifying that requests for evidence collection in Bulgaria are directed to the district court within whose jurisdiction the collection will occur (Article 617); and designation of the district court in Bulgaria, within whose jurisdiction the direct evidence collection will take place, as competent to authorize and provide practical assistance for evidence collection under Article 19 of the Regulation (Article 617).

The amendments relating to the Service Regulation are as follows: the indication of bailiffs as ‘transmitting authorities’ under Article 3(1) of the Regulation, in addition to district courts (Article 611 of the Code); a new rule for service in the event of an unsuccessful attempt to serve the specified address – the receiving authority makes an official check on the recipient’s address and, if necessary, forwards the request to the district court in whose district the service must be carried out (Article 611, para. 3); the indication of competent authorities under Article 7(1)(a) of the Regulation – the district court for whose district the address data is provided is competent. When no address information is provided, the Sofia District Court is competent (Article 612).

The amendments in respect of the Brussels II ter Regulation include the introduction of domestic procedures for issuing, correcting, and revoking certificates required by the Regulation (Articles 620a and 620b). A new Article 622c is envisaged, governing the direct enforcement of decisions from another member state in Bulgaria. It adheres to regulation principles, including the right to defense for the party against whom enforcement is sought, the ability to request refusal, and the right of the plaintiff to swift enforcement with the use of coercive measures, without harming the child. Provisions are made for suspention of the enforcement if it endangers the child, as well as measures in cases of long-term risk.

Child Protection Act

Changes stemming from the Brussels II ter Regulation affect as well the Child Protection Act regarding legal proceedings before Bulgarian courts concerning child return. They include hearing the child’s opinion based on age and maturity, evidence collection, decision deadlines, and issuing certificates for decision implementation. New rules cover measures for the child’s contact with the left behind parent, child protection during and after legal proceedings, ensuring the child’s safety upon return. The participation of a prosecutor in proceedings for child return under the 1980 Hague Convention is eliminated, aligning Bulgarian procedures with those of European countries. Prosecutors’ involvement is only maintained when the prosecutor initiates the return request, whereas in cases initiated by a parent through the Ministry of Justice, the Ministry represents the applicant, and the case is considered civil.

Private International Law Code

The proposed amendments to the Private International Law Code include a rule whereby international jurisdiction should be verified ex officio by the seised court, with the court ruling at an earlier stage on its own jurisdiction, including when the choice of court is made in the course of the proceedings. This would enable the court to take a stance on jurisdiction at the time of drawing up the preliminary report and notify the parties thereof.

Such early indication on the grounds of international jurisdiction and the applicable law, as well as the reflection of the choice of court and applicable law in the minutes of the hearing, create clarity and legal certainty and provide the parties with an opportunity to conduct the process in view of the applicable legal framework. The choice of court affects the issue of parallel proceedings in other Member States so it must be documented at the time of its execution.

Article II(3) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) provides:

The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

What is the meaning of a “matter” in this provision? This is the question that the UK Supreme Court addressed in its judgment of 20 September 2023 in Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32.

Facts

In 2013 and 2014, three special purpose vehicles wholly owned by the Republic of Mozambique entered into supply contracts with three of the respondents in this case for the development of Mozambique’s exclusive economic zone. The contracts are governed by Swiss law and contain broad arbitration clauses. The arbitration clauses in two contracts cover “all disputes arising in connection with” the contracts and the arbitration clause in the third contract covers “any dispute, controversy or claim arising out of, or in relation to” to the contract.

The SPVs borrowed money from various banks and Mozambique granted sovereign guarantees for the borrowing. The guarantees are governed by English law and provide for dispute resolution in English courts.

Mozambique accuses the three respondent companies and some other persons of bribing its officials and exposing it to a potential liability under the guarantees. It brought a claim for damages against the respondents in England in 2019.

The Respondents argue that Mozambique is bound by the arbitration clauses and seek a stay of proceedings under section 9 of the Arbitration Act 1996, which implements Article II(3) of the New York Convention into English law.

Was the matter in dispute in the English proceedings a “matter” within the meaning of section 9 of the 1996 Act/Article II(3) of the NYC? This is the preliminary question that the court addressed in its judgment. For the purposes of the preliminary question, it was assumed that Mozambique was bound by the arbitration clauses.

Judgment

Lord Hodge gave the judgment, with which Lord Lloyd-Jones, Lord Hamblen, Lord Leggatt and Lord Richards agreed.

The UKSC provided an interpretation of the concept of a “matter” in this context that is based on five principles. In doing so, it considered other countries’ (HK, Singapore, Australia, and Cayman Islands) jurisprudence on this issue.

First, in applying section 9 of the 1996 Act, the court adopts a two-stage process: first, the court must identify the matter or matters which the parties have raised or foreseeably will raise in the court proceedings, and, secondly, the court must determine in relation to each such matter whether it falls within the scope of the arbitration agreement. The court must ascertain the substance of the dispute(s) between the parties, without being overly respectful to the formulations in the claimant’s pleadings, and have regard to the defences raised or reasonably foreseeable.

Secondly, the “matter” need not encompass the whole of the dispute between the parties. Partial stays of court proceedings are possible.

Thirdly, a “matter” is a substantial issue that is legally relevant to a claim or a defence which is susceptible to determination by an arbitrator as a discrete dispute, rather than an issue which is peripheral or tangential to the subject matter of the proceedings. If the “matter” is not an essential element of the claim or of a relevant defence to that claim, it is not a “matter” in respect of which the legal proceedings are brought.

Fourthly, the process entails a matter of judgment and the application of common sense rather than a mechanical exercise.

Fifthly, when turning to the second stage of the analysis, the court must have regard to the context in which the “matter” arises in the legal proceedings.

The substance of the dispute in the English proceedings was whether the contracts and the guarantees were obtained through bribery, and whether the respondents had knowledge of this at the relevant times. The court found that it was not necessary to examine the validity of the contracts and that a defence that the contracts were valid and on commercial terms would not be relevant to the question of the respondents’ liability. This defence would only be relevant in relation to the quantification of the loss suffered by Mozambique. As the validity and commerciality of the contracts were not essential to any relevant defence, the court held that they were not “matters” within the meaning of section 9 of the 1996 Act in relation to the question of the respondents’ liability. The court further found that there was no case law in which section 9 had been invoked to obtain a stay only in relation to a dispute about the quantification of a claim.

The court also dealt with the issue of scope of the arbitration clauses. It held that there was no question of the arbitration clauses extending to cover Mozambique’s allegations on which it relied to establish the respondents’ liability. With respect to the dispute over the partial defence to the quantification of Mozambique’s claim, rational businesspeople would not seek to send such a subordinate factual issue to arbitration. In other words, this partial defence fell outside the scope of the arbitration clauses and the court did not have to decide whether it was a “matter” within the meaning of section 9 of the 1996 Act.

Importance of the Judgment

English law adopts a pro-arbitration approach. But the judgment in Mozambique v Privinvest Shipbuilding SAL (Holding) shows that there are limits to this approach.

The judgment is also important because it offers an authoritative interpretation of the concept of a “matter” within the meaning of Article II(3) NYC. This is one of the ways in which English law (see also the recent proposed changes to the 1996 Act) makes an important contribution to the comparative law of international commercial arbitration.

In a recent article, Pedro de Miguel Asensio points to a seeming contradiction at the heart of EU consumer law (see La Ley – Unión Europea, issue 116/2023, soon available here). This contradiction concerns the notion of consumer in the rules of substantive consumer law and in EU Private International Law (PIL). The CJEU has constructed in both areas differently.

The Notion ‘Consumer’ in Substantive EU Law

For substantive consumer law, the Court adopts a very wide notion of the consumer, in principle also covering contracts concluded for a dual private and commercial purpose. Consumer protection is excluded only where the commercial purpose predominates the private one (see e.g. in the context of the Unfair Terms Directive CJEU Case C-570/21 I.S. and K.S. v YYY. S.A., para 53).

The Notion ‘Consumer’ in EU PIL

In the context of PIL, in contrast, the CJEU defines ‘consumer’ much more narrowly. Regarding the special provisions of the Brussels I Regulation for the protection of consumers, it has held that they must be interpreted strictly and, in principle, do not apply in case of dual use (see CJEU Case C-464/01 Gruber v Bay Wa, para 39). It would be otherwise only where the link between the contract and the trade or profession of the person concerned was ‘so slight as to be marginal’ (ibid). One must follow Pedro de Miguel when he submits that this narrow interpretation needs to be extended to the Rome I Regulation as another instrument of EU PIL as well (see Recital 7 Rome I).

Divergences Cause Distortions

As a result of these divergences, a contract may be a consumer contract for the purposes of substantive law and a professional or commercial contract for the purposes of PIL. Pedro de Miguel frets that this may give rise to certain ‘distortions’. For instance, in the Lyoness case (commented here), it was questionable whether terms in a cross-border contract were abusive in the sense of the Unfair Terms Directive. Even if this were the case and EU substantive law applied, one could not be sure that the consumer could vindicate the protections of the Directive in a Member State court. After all, the special protective heads of jurisdiction for consumer actions under the Brussels Ibis Regulation are to be interpreted more narrowly than those of the Unfair Terms Directive (see also for the possibility of a waiver of the consumer status under the Brussels Ibis Regulation the comment by Marion Ho-Dac here).

The Impact of Choice-of-Court Clauses

Pedro de Miguel brings the problem to a head with the hypothetical example of a contract with an unfair term that also contains a choice-of-court clause in favour of a non-Member State court, e.g. a Swiss court. In this case, the Member States’ courts would have to decline jurisdiction if the EU resident had pursued more than a marginal professional or commercial purpose with the contract. This evidently undermines the goals of the Unfair Terms Directive, which most certainly would not be given effect by third country courts where their general PIL rules do not lead to a Member State law. Pedro de Miguel denounces this as a hole in the EU consumer protection rules.

Attempting an Explanation

The seeming incoherence between EU substantive and Private International Law may have quite a simple reason. In its substantive law, the EU is free to take consumer protection to an extreme level, covering also contracts that serve up to 49 % a professional or commercial purpose. However, on the international plane, the EU policy clashes with that of other regions or states that follow a much more restricted concept of the consumer. In light of these divergences, it may be advisable to not fully follow the EU consumer protection policy through in order to avoid quarrels with third country courts over jurisdiction or the non-recognition and/or enforcement of Member State judgments.

Comparison with Convention Law

However, the wider notion of the consumer of EU substantive law is seemingly in line with the Hague Choice-of-Court Convention and the Hague Judgments Convention. Both contain special rules for contracts concluded by a consumer (see Art 2(1)(a) Hague Choice-of-Court Convention and Art 5(2) Hague Judgments Convention), and define the consumer as a person acting ‘primarily’ for personal, household or family purposes. This wording of ‘primarily’ seems to be more in line with the extensive definition of the consumer in EU substantive law than with the restrictive of EU PIL.

However, one must also pay attention to the notion ‘for personal, household or family purposes’, which is in fact much more restrictive than both EU notions. The latter apply whenever a contract is concluded outside a trade or profession, never mind whether it is for personal, household or family or for other purposes, e.g. a speculative investment or saving for retirement. One may thus say that the convention strikes a middle ground between the wide and the narrow consumer notion. Without venturing into an analysis of the compatibility of the Brussels Ibis Regulation’s rules with the Hague Conventions, one can say that the latter do not support an extreme version of consumer protection.

Conclusion

The definition of the ‘consumer’ in EU substantive law differs from that in EU PIL. This may mean that EU citizens and residents do not get the full benefit of the Union’s substantive law when they go abroad. But this may be a price worth paying for international harmony and avoiding quarrels with other states.

— Thanks to Paul Eichmüller for reviewing this post.

The international seminar “Vulnerability: a Matter of Perspective(s)”, is scheduled to be held online on Friday, 29 September 2023, starting at 10 a.m. CET on Microsoft Teams.

The seminar is centered around Private International Law (PIL). Specifically, various sessions of the seminar will delve into the diverse and interdisciplinary perspectives of PIL in the context of ‘Vulnerability.’ Many presentations will scrutinize the role of PIL, as well as international conventions and treaties, in relation to vulnerable communities, territories, and individuals. Additionally, the seminar will emphasize the importance of PIL in devising viable solutions. These solutions aim to ensure that present and future generations can remain in their homelands and achieve sustainable human development. This encompasses a broad range of societal aspects, including food, housing, artificial intelligence, and finance.

The teams link to access the seminar is: https://tinyurl.com/25knxwa8

The conference is a collaborative effort between EuriConv (www.euriconv.eu) and Omninext (www.omninext.it).

The seminar’s format comprises three sessions:

English session at 10 a.m. CET
Italian session at 4 p.m. CET
Spanish and Portuguese session at 6 p.m. CET

Each session will be coordinated by Ivan Allegranti, Ph.D. Candidate in Civil Law at the University of Camerino, while the coordination of the entire seminar is curated by Allegranti himself together with Jorge Gracia Ibáñez and Míriam Villamil Balestro. The panels will feature insights from distinguished academics and researchers across Italy, Germany, Spain, Argentina, India, Portugal, and Brazil.

Introductory Context of the Seminar: The concept of ‘Vulnerability’ has recently gained paramount importance across various disciplines – from philosophy, politics, and law to the socio-economic domain. Today, this term encompasses broader themes like environmental conservation, formulation of policies at various levels, and an array of nuanced meanings when linked with individual experiences. It provokes profound deliberations on human interactions, societal unity, and sustainable advancement. As researchers, understanding and articulating this multifaceted notion becomes essential.

The scientific committee includes: Patricia Branco, Lucia Briamonte, Piermichele La Sala, Mariana N. Sánchez, Gerald G. Sander, and Antonio Sàrcina.

The technical secretariat of the event is composed by: Grazia Sàrcina and Ilaria Tonti.

Subsequent to the seminar, the proceedings will be published in a collective work which will be released in the weeks following the event.

Furthermore, this seminar will set the stage for EuriConv’s upcoming initiative on Disaster Risk Management and the Right to Remain in Your Own Homeland, laying the groundwork for a series of future scientific initiatives.

For general information or inquiries about the seminar please contact EuriConv at: connect@euriconv.eu.

The Permanent Bureau is pleased to announce that a colloquium on Central Bank Digital Currencies (CBDCs), titled “CODIFI Edition 2023 – CBDCs”, will be held online on Thursday 5 October 2023, following the mandate of the Council on General Affairs and Policy (CGAP) at its 2023 meeting (C&D No 17).

CODIFI Edition 2023 – CBDCs will cover selected topics related to the HCCH’s CBDCs Project, established by CGAP in March 2023 with the mandate to study the private international law implications of CBDCs. The colloquium will feature a series of pre-recorded video discussions, led by subject-matter experts of the CBDCs Project and other specialists of academia, government, and industry. Live discussion sessions will also take place on the same day to summarise the proceedings and provide more insights and some ideas on the way forward.

The colloquium will be streamed on the HCCH LinkedIn page from 9.30 a.m. (CEST) on Thursday 5 October 2023. The opening session, starting at 9.30 a.m. (CEST), will be followed by the release of the pre-recorded video discussions. In addition to being streamed on the HCCH LinkedIn page throughout the morning, the pre-recorded video discussions will also be available for on-demand viewing on the HCCH website and the HCCH YouTube channel. The live panel and the live interview will be streamed on the HCCH LinkedIn page from 12.30 p.m. and 2.30 p.m. (CEST), respectively.

To register for updates on the colloquium, please indicate your interest here.

For more information, please consult the HCCH’s website and the colloquium’s draft agenda.

 

Description

This important book systematically analyses the private international law issues regarding private antitrust damages claims which arise out of transnational competition law infringements. It identifies those problems that need to be considered by injured parties, defendants, judges and policy-makers when dealing with cross-border private antitrust damages claims in a global context. It considers the post-Brexit landscape and the implications in cross border private proceedings before the English courts and suggests how the legal landscape should be developed. It also sets out how private international law techniques could play an increasingly important role in private antitrust enforcement.

Comprehensive and rigorous, this is required reading for scholars of both competition litigation and private international law.