Conflictoflaws

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.

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.

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?”

The determination of jurisdiction and the applicable law concerning violations of financial law remains one of the most controversial subjects in EU private international law. Departing from its previously wayward case law regarding jurisdiction in disputes concerning purely financial losses, the Court of Justice of the European Union (CJEU) has finally taken a more principled approach in its Verenigeng van Effectenbezitters (VEB) decision, concentrating jurisdiction for actions based on issuer liability for inaccurate disclosures in the courts of the Member States where the issuer “has complied, for the purposes of its listing on the stock exchange, with the statutory reporting obligations”. While the judgment marks a necessary step forward, this paper argues that a market-oriented rule, which the CJEU has thus far not fully embraced, for conferring jurisdiction in disputes concerning infringements of securities law needs to be further developed and consistently applied in determining the applicable law. M Ahmed, “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” This article examines the private international law and substantive liability issues in tort claims against UK based parent companies for the actions of their foreign subsidiaries. Arguments drawn from private international law’s largely untapped global governance function inform the analysis and the methodological pluralism manifested in the jurisdictional and choice of law solutions proposed. The direct imposition of duty of care on parent companies for torts committed by foreign subsidiaries is examined as an exception to the bedrock company law principles of separate legal personality and limited liability. In this regard, the UK Supreme Court’s recent landmark decisions in Vedanta v Lungowe and Okpabi v Shell have granted jurisdiction and allowed such claims to proceed on the merits in the English courts. This article assesses these decisions and their significance for transnational corporate accountability. The post-Brexit private international law regime and its implications for the viability of tort claims against parent companies are examined. N Brannigan, “Resolving conflicts: establishing forum non conveniens in a new Hague jurisdiction convention” In 1992, the Hague Conference on Private International Law (HCCH) commenced the Judgments Project with the aim of delivering a convention harmonising rules of jurisdiction and recognition and enforcement of judgments. Despite the ambition and promise the project held, the first major attempt at delivering a convention, the 2001 Interim Text, was unsuccessful after it failed to gain consensus among the Conference’s Member States. The HCCH scaled back the Judgments Project to focus work on the 2005 Convention on Choice of Court Agreements and the 2019 Convention on the Recognition and Enforcement of Foreign Judgments. However, the issue of jurisdiction has not been forgotten, with the Hague having recently established a Working Group to begin drafting provisions for a fresh attempt at the subject which hopefully will succeed where the Interim Text did not. The aim of this article is to explore the issue of how the proposed convention shall address conflicts of jurisdiction in international litigation. A conflict of jurisdiction will typically arise where the same proceedings, or related ones, come before the courts of several fora, or in one forum which considers another forum to be better placed to adjudicate the dispute. One solution to such conflicts is the, originally Scottish, doctrine of forum non conveniens, which allows a court discretion to decline to exercise jurisdiction on the basis that the appropriate forum for the trial is abroad or the local forum is inappropriate. This article argues for the inclusion of a version of forum non conveniens in the proposed jurisdiction convention to settle these conflicts when they arise. However, as there are many interpretations of what makes one forum more or less appropriate to hear a case than another, this article tackles the issue of how such a principle could be drafted to achieve consensus at the Hague Conference. Much of this analysis is based on the original 2001 Interim Text, and upon more modern cross-border agreements which utilise forum non conveniens. J Huang, “Substituted service in Australia: problem, tension, and proposed solution” Substituted service is an important and frequently used method to bring judicial documents to a defendant’s attention when service of process in the manner otherwise required by the civil procedure rule is impracticable. Between substituted service and the Hague Service Convention 1965 exists a tension: as the scope of substituted service expands, the application of the Convention shrinks. The tension predated the pandemic but has become increasingly acute as Australian courts have frequently been called upon to address when substituted service may be ordered to replace service under the Convention. Addressing this tension is significant but complex as it involves Australia’s international obligation to follow the Convention, a plaintiff’s legitimate expectation to quickly effect service of process, and a defendant’s fundamental right to due process. This paper is a digest of Australian private international law on substituted service. It provides timely proposals both at the domestic and international dimensions to address this tension. AA Kostin & MA Pesnya, “The recognition of foreign judgments on personal status under Russian law (Historical aspects and current issues)” The Article provides an insight into the development of the Russian rules of law concerning recognition of foreign judgments on personal status. The analysis reveals that initially the Russian (formerly Soviet) law did not include any specific provisions relating to recognition of foreign judgments on personal status. In this regard such judgments were recognised on the basis of the conflict of laws’ provisions of the Family and Civil Codes. In turn the current Article 415 of the Civil Procedure Code of the Russian Federation addressing the recognition of foreign judgments on personal status and foreign divorces should be considered as a borrowing from the legislation of the former Socialist countries. The authors argue that the concept of “personal status” in Article 415 covers both foreign judgments affecting capacity and regarding filiation (kinship). Therefore, these foreign judgments shall be recognised in Russia in absence of an international treaty and without exequatur proceedings.

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:

”

4th International
Class Action Conference

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.

by Rui Dias

 

On 23 February 2022, the European Commission published its proposal of a Directive on Corporate Sustainability Due Diligence (CSDD) in respect to human rights and the environment. For those interested, there are many contributions available online, namely in the Oxford Business Law Blog, which dedicates a whole series to it (here). As to the private international law aspects, apart from earlier contributions on the previous European Parliament resolution of March 2021 (info and other links here), some first thoughts have been shared e.g. by Geert von Calster and Marion Ho-Dac.

Building on that, here are some more brief remarks for further thought:

Article 2 defines the personal scope of application. European companies are covered by Article 2(1), as the ones «formed in accordance with the legislation of a Member-State», whereas those of a «third country» are covered by Article 2(2). While other options could have been taken, this criterium of incorporation is not unknown in the context of the freedom of establishment of companies, as we can see in Article 54 TFEU (basis for EU legal action is here Article 50(1) and (2)(g), along with Article 114 TFEU).

There are general, non PIL-specific inconsistencies in the adopted criteria, in light of the relative, not absolutethresholds of the Directive, which as currently drafted aims at also covering medium-sized enterprises only if more than half of the turnover is generated in one of the high-impact sectors. As recently pointed out by Hübner/Habrich/Weller, an EU company with e.g. 41M EUR turnover, 21M of which in a high impact sector such as e.g. textiles is covered; whilst a 140M one, having «only» 69M in high-impact sectors, is not covered, even though it is more than three times bigger, including in that specific sector.

Article 2(4) deserves some further attention, by stating:

«As regards the companies referred to in paragraph 1, the Member State competent to regulate matters covered in this Directive shall be the Member State in which the company has its registered office.»

So, the adopted connecting factor as to EU companies is the registered office. This is in line with many proposals of choice-of-law uniformization for companies in the EU. But apparently there is no answer to the question of which national law of a Member-State applies to third-country companies covered by Article 2(2): let us not forget that it is a proposed Directive, to be transposed through national laws. And as it stands, the Directive may open room for differing civil liability national regimes: for example, in an often-criticised option, Recital 58 expressly excludes the burden of proof (as to the company’s action) from the material scope of the Directive proposal.

Registered office is of course unfit for third country-incorporated companies, but Articles 16 and 17 make reference to other connecting factors. In particular, Article 17 deals with the public enforcement side of the Directive, mandating the designation of authorities to supervise compliance with the due diligence obligations, and it uses the location of a branch as the primarily relevant connection. It then opens other options also fit as subsidiary connections: «If the company does not have a branch in any Member State, or has branches located in different Member States, the competent supervisory authority shall be the supervisory authority of the Member State in which the company generated most of its net turnover in the Union» in the previous year. Proximity is further guaranteed as follows: «Companies referred to in Article 2(2) may, on the basis of a change in circumstances leading to it generating most of its turnover in the Union in a different Member State, make a duly reasoned request to change the supervisory authority that is competent to regulate matters covered in this Directive in respect of that company».

Making a parallel to Article 17 could be a legislative option, so that, in respect to third-country companies, applicable law and powers for public enforcement would coincide. It could also be extended to jurisdiction, if an intention arises to act in that front: currently, the general jurisdiction rule of Brussels Ia (Article 4) is a basis for the amenability to suit of companies domiciled (i.e., with statutory seat, central administration, or principal place of business – Article 63) in the EU. In order to sue third country-domiciled companies, national rules on jurisdiction have to be invoked, whereby many Member-States include some form of forum necessitatis in their national civil procedure laws (for an overview, see here).The Directive proposal includes no rules on jurisdiction: it follows the option also taken by the EP resolution, unlike suggested in the previous JURI Committee draft report, which had proposed new rules, through amendments to Brusselas Ia, on connected claims (in a new Art. 8, Nr. 5) and on forum necessitatis (through a new Art. 26a), along with a new rule on applicable law to be included in Rome II (Art. 6a) – a pathway which had also been recommended by GEDIP in October 2021 (here).

As to the applicable law in general, in the absence of a specific choice-of-law rule, Article 22(5) states:

«Member States shall ensure that the liability provided for in provisions of national law transposing this Article is of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State.»

So, literally, it is «the liability provided for» in national transposing laws, and not the provisions of national law themselves, that are to be «of overriding mandatory application». This may be poor drafting, but there is apparently no material consequence arising out of it.

Also, the final part («in cases where the law applicable to claims to that effect is not the law of a Member State») does not appear to make much sense. It is at best redundant, as Geert van Calster points out, suggesting it to be struck out of the proposal. Instead of that text, it could be useful to add «irrespective of the law otherwise applicable under the relevant choice-of-law rules», miming what Rome I and II Regulations state in Articles 9 and 16.

A further question raised by this drafting option of avoiding intervention in Rome II or other choice-of-law regulations, instead transforming the new law into a big set of lois de police, is that it apparently does not leave room for the application of foreign, non-EU law more favourable to the victims. If a more classical conflicts approach would have been followed, for example mirrored in Article 7 of Rome II, the favor laesi approach could be extended to the whole scope of application of the Directive, so that the national law of the Member-State where the event giving rise to damage occurred could be invoked under general rules (Article 4(1) of Rome II), but a more favourable lex locus damni would still remain accessible. Instead, by labelling national transposing laws as overridingly mandatory, that option seems to disappear, in a way that appears paradoxical vis-à-vis other rules of the Directive proposal that safeguard more favourable, existing solutions, such as in Article 1(2) and Article 22(4). If there is a political option of not allowing the application of third-country, more favourable law, that should probably be made clear.

With this present issue, Lex & Forum enters its second year of publication. The first four issues of the previous year were dedicated to the fundamental and most current issues of European private/procedural international law: the judicial cooperation after BREXIT (1st issue), the impact of 40 years since Greece joined the European Union to the internal Procedural Law (2nd issue), the importance of private autonomy in European private/procedural international law (3rd issue) and the accession of the European Union to the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019 (4th issue). During the second year, the focus of the issues will now be shifting to individual disputes, influenced by European  procedural or private international law. The focus of the present issue refers to maritime differences, which are particularly important for our country. As data shows, while the population of Greece represents only 0.15% of the world population, the Greek-owned ships represent almost 21% of the world tonnage and 53% of the EU merchant fleet. Greek shipowners lead the world rankings in ship ownership with 17% for 2021, compared to colossal countries in terms of population and economy, such as China (15%) and Japan (12%) (data: IUMI 2021). Under these circumstances, maritime differences at the European and global scale are a particularly crucial chapter for our country’s economy and fully justify the involvement of this focus on this issue.

The ‘Praefatio’ of this Lex&Forum issue has the great honor of hosting the valuable thoughts of the former President of the CJEU (2003-2015), Prof. Vassilios Skouris, on the topic of mutual trust and recognition as key pillars of the European Union. The main topic of the issue (Focus) is dedicated to maritime disputes and was initially presented at an online event, on the 21st of February 2022, in collaboration with the most competent bodies on the subject, the Piraeus Court of First Instance and the Piraeus Bar Association (<https://www.sakkoulas.gr/el/info/events/archive/lex-forum-oi-navtikes-diafores-ston-evropaiko-kai-ton-pagkosmio-charti/>). The Focus in this issue incorporates the contribution of the Professor at the HSB Hochschule Bremen Ms. Suzette Suarez on arrest of ships in cases of environmental damages, the presentation of the Professor at  the University of Athens and Chair of the meeting Ms. Lia Athanassiou, regarding the treatment of foreign shipping companies by the Greek jurisprudence, and the ones of the Judges who served in the Mari­time Department of the Court of Piraeus, Mr. Antonios Alapandas, PhD, Judge at the Court of Appeal, on the special jurisdictional bases of maritime disputes, and Mr. Kyriakos Oikonomou, former Judge of the Supreme Court, on the choice of court agreements in maritime disputes, as well as the contributions of the Judge Mr. Antonios Vathrakokilis, on the applicable law to maritime privileges, and, finally, of Mr. Georgios Theocharidis, Professor of Maritime Law and Politics at the World Maritime University in Malmö, Sweden, on the International Convention on the ‘Judicial Sale of Ships’. Lex&Forum expresses its warmest thanks to the President of the Courts of First-Instance of Piraeus Council Judge Mr. Vassilios Tzelepis and the President of the Piraeus Bar Association Mr. Elias Klappas, as well as to all the rapporteurs for their honorable contributions.

The jurisprudence section of this issue includes the CJEU judgments, 15.7.2021, European Commission v. Poland, on the topic of national regulations restricting the independence of judges, with commentary by the scientific associate in the International Hellenic University Ms R. Tsertsidou, 7.5.2020, LG/Rina, on the concept of civil and commercial matters in case of an action against a ship classification and certification body under the authority of a third state, with a commentary by Dr. N. Zaprianos, 1.7.2021, UE, HC, on a European Certifi­cate of Succession of ‘indefinite time’, with commentary by Dr. S. Karameros, and 4.6.2020, FX/GZ, on international jurisdiction for the adjudication of the opposition against the execution of a maintenance claim, with commentary by the President of the Court of First Instance Mr. A. Vathrakokilis.

The national case law section features the following judgments:  Court of First Instance Piraeus No 3296/2020, on the appointment of an Interim Administration of a Shipping Company with a registered office abroad, with commentary by the PhD Cand. Ms. A. Lagoudi; Court of First Instance Korinthos No 1/2022, on the topic of parental care and maintenance of an out-of-marriage minor by parents of foreign citizenship, with commentary by Dr. G.-A. Georgiadis; Supreme Court decision No 1127/2020, on the applicable law on limitation periods in case of a lawsuit of an insurance company against a carrier, with commentary by Dr. A. Anthimos.

The issue includes as well the legal opinion of Professor Emeritus at the University of Athens Mr. Nikolaos Klamaris on the international jurisdiction of the Court of Piraeus (Department of Maritime Disputes) on a tort, committed in Piraeus by defendants based in Asia, while in the column L&F Praxis, the Judge Mr. Georgios Safouris presents the main practical problems of the referral questions to the CJEU within 11 Q&As.

Lex&Forum renews its scientific appointment with its subscribers for the next issue, focusing on the Internet and other emerging technologies within the EU and International legal order.

 

EFFORTS (Towards more EFfective enFORcemenT of claimS in civil and commercial matters within the EU) is an EU-funded Project conducted by the University of Milan (coord.), the Max Planck Institute Luxembourg for Procedural Law, the University of Heidelberg, the Free University of Brussels, the University of Zagreb, and the University of Vilnius.

The eighth EFFORTS Newsletter has just been released, giving access to up-to-date information about the Project, save-the-dates on forthcoming events, conferences and webinars, and news from the area of international and comparative civil procedural law.

The EFFORTS Final Conference will take place on Friday, 30 September 2022. On that occasion, the Project Partners’ research groups will present the outcomes of the Project; increase awareness of the EFFORTS Regulations (Brussels Ia, European Enforcement Order, European Payment Order, European Small Claims Procedure and European Account Preservation Order); and evaluate and discuss the state of the art in EU and national legislation and practices relating to the implementation of the EFFORTS Regulations in the 7 targeted Member States. More details will follow in due course.

Regular updates are available on the Project website and via the Project’s LinkedIn and Facebook pages.

Project JUST-JCOO-AG-2019-881802
With financial support from the Civil Justice Programme of the European Union

In a widely reported trip, members of the 5th Civil Chamber of the Higher Regional Court of Hamm, Germany, together with two court-appointed experts, travelled to Peru to collect evidence in one of Germany’s first climate-change lawsuits. The highly symbolic case has been brought by Saúl Luciano Lliuyas, a Peruvian farmer, who claims that man-made climate change and the resulting increased flood risk threatens his house in the Andes, which is located right below a glacial lake. Supported by two German NGOs, he seeks compensation from RWE, Europe’s single biggest emitter of carbon dioxide, for the equivalent of its contribution to worldwide human carbon dioxide emissions, i.e. 0.47 percent, of the additional protective measures he had to take to flood-prove his house.

The trip had already been scheduled in 2019 but was delayed by the Covid-19 pandemic. Its main purpose appears to have been the proper instruction of the two experts, who are charged with assessing the climate-change-related risk for the claimant and the extent of RWE’s potential contribution to it.

In terms of private international law, the case is straightforward. The German courts have international jurisdiction on the basis of Articles 4(1), 63(1) Brussels Ia as RWE has its statutory seat and central administration in Germany. As far as the applicable law is concerned, the claimant can rely on the privilege awarded to the (alleged) victims of environmental torts by Art 7 Rome II, according to which they may opt for the law of the country in which the event giving rise to the damage occurred (as opposed to the law of the country in which the damage occurred, which generally applies pursuant to Art. 4(1) Rome II), i.e. for German law in the case of pollutions caused by RWE’s power plants in Germany. Thus, the usual PIL problems of climate-change lawsuits (international jurisdiction based on Art. 7(2) or 8(1) Brussels Ia, immunity of state-owned corporations, predictability of the law of the place of the damage, application of Art. 17 Rome II, …) do not arise in this case.

Regarding the application of substantive German law, the case is much more open. In the first instance, the Regional Court of Essen outright rejected the claim for lack of a sufficient causal connection between RWE’s contribution to climate change and the specific risk of the claimant. This is in line with what might still be the majority position in German scholarship, according to which individual contributions to global climate change cannot trigger civil liability in tort or property law. The fact that the second-instance court has now started to collect evidence implies, however, that it considers the claim to succeed on the basis of the claimant’s submissions. Seen together with the German Constitutional Court quashing national legislation for being incompatible with Article 20a of the Constitution and international commitments to limit global warming in 2021, the lawsuit in Hamm may be a sign of German courts slowly adopting a more active position in the global fight against climate change, including with regard to civil liability.

Meetings & Events

From 17 to 19 May 2022, the First Meeting of the Special Commission on the 2007 Child Support Convention and 2007 Maintenance Obligations Protocol was held in The Hague in hybrid format, attended by over 200 delegates representing HCCH Members, Contracting Parties and Observers. More information is available here. The meeting resulted in the adoption of over 80 Conclusions & Recommendations, providing guidance to (prospective) Contracting Parties on a wide range of issues relating to the implementation and practical operation of these instruments. More information is available here.

 

Publications & Documentation

On 25 May 2022, the Permanent Bureau announced the launch of the post-event publication of HCCH|Approach, “Advancing and Promoting the Protection of All Children”, an HCCH initiative organised in celebration of the 25th anniversary of the HCCH 1996 Child Protection Convention. More information is available here.

 

Upcoming Events

Registrations are now open for the upcoming Conference on Conflicts of Jurisdiction, organised by the Journal of Private International Law and the Singapore Management University, with the support of the HCCH. The conference will be held online on 23 and 24 June 2022. More information is available here.

The inaugural CODIFI Conference will be held online from 12 to 16 September 2022. CODIFI will examine issues of private international law in the Commercial, Digital, and Financial (CODIFI) sectors, highlighting developments in the digital economy and fintech industries as well as clarifying the roles of core HCCH instruments: the 1985 Trusts Convention, the 2006 Securities Convention, and the 2015 Choice of Law Principles.?More information is available here.

 

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

 

What’s new in EU family law?

High-level conference on the Brussels IIb Regulation

8 September 2022 13h-16h CET

Hybrid Conference – European Parliament Brussels and Online

Hosted by

Ewa Kopacz

Vice President and European Parliament Coordinator on Children’s Rights

and

Didier Reynders

Commissioner for Justice

Please click here to register and to view the draft conference programme.

 

This high-level conference aims to draw attention to the novelties and important changes introduced by the Brussels IIb Regulation, which enters into application on 1 August 2022, and to provide a forum for an exchange of views with legal practitioners on cross-border family disputes involving children in the European Union.

The conference will provide participants with an opportunity to hear from experts in EU family law on the key changes to the Regulation and to engage in a moderated discussion on the topic through a Q & A session.

The event will be hosted online with the limited possibility to participate in person in Brussels*. Interpretation of the conference will be provided in 10 languages (DE, EN, FR, IT, EL, ES, PT, PL, BG, RO).

*Participation in this event is free. Please note that persons planning to attend this event in the European Parliament in Brussels do so at their own expense.

On Tuesday, June 7, 2022, the Hamburg Max Planck Institute will host its 23rd monthly virtual workshop Current Research in Private International Law at 11:00-12:30 CEST. Rosario Espinosa Calabuig (Universidad de Valencia) will speak, in English, about the topic

“Sorority, Equality and Private International Law“.

Gender perspective in Private International Law (PIL) can be claimed through the so-called Sorority: Solidarity between women against sexual discrimination. PIL becomes an ethical tool to fight for solidarity and against phenomena such as misogyny and sexism, among others. Different topics (such as application of Islamic law by national authorities, child abduction in cases of gender violence or transnational surrogacy) show how PIL can be a tool to promote equality rights and how sorority can reinforce this equality. So, there is a reciprocal influence between all of them.

The presentation will be followed by open discussion. All are welcome. More information and sign-up here.

If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.

Webinar series: ‘Crossroads in Private International Law’ First webinar: ‘Strategic Climate Change Litigation in the EU: Between Judicial Restraint and Proactive Judicial Policy’ The Aberdeen Centre for Private International Law invites you to a webinar titled ‘Strategic Climate Change Litigation in the EU: Between Judicial Restraint and Proactive Judicial Policy’. It is the first webinar within the Centre new webinar series ‘Crossroads in Private International Law’. The event will be delivered by Nevena Jevremovic, Honorary Lecturer at the Aberdeen School of Law and moderated by Professor Guillaume Laganière from the Université du Québec à Montréal (UQAM). The webinar will be held on Wednesday 01 June 2022, 4-5pm UK time, through MS Teams.  Click here for more information and registration

The ASADIP is pleased to share with you the Partnership entered into with the International Academy of Comparative Law (IACL) and the Center for the Study of Law, Economics and Policy (CEDEP) with a view to hold its annual event. The XV Conference of the Association: “A private international law to transform the world” will take place on October 27, 2022 in the city of Asunción, Paraguay during the General Congress of the International Academy of Comparative Law, which will take place from October 23 to 28, 2022. The ASADIP invites you especially to be able to participate and meet again in this very special year. The opening of early registration for the General Congress is imminent. For the first time there will be simultaneous interpretation into Spanish during the Congress. The opportunity presented by this conjunction of activities and specialists of the highest level from all continents is unique. More information here. A call for papers is forthcoming.

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 26 May 2022 at 3:00 pm (Mexico City time – CDT), 10:00 pm (CEST time). The topic of the webinar is The impact of artificial intelligence on Private International Law and will be presented by Professor Wendolyne Nava, Professor Yaritza Pérez and Roberto Falcón (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/84254265759?pwd=0r4SHVY24q8DByvWf236cKaQo1mPXF.1

Meeting ID: 842 5426 5759

Password: BMAAMEDIP

Participation is free of charge.

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

Based on a tweet by the ‘enfant terrible of tech’, Elon Musk, Michael Douglas recently discussed ‘Conflict of Laws of Freedom of Speech on Elon Musk’s Twitter’ on this blog. In a new volume published by Mohr Siebeck, Anna Bizer adresses similar questions, from the point of view of German and European PIL. Starting from the observation that social media challenges the existing legal framework (even more so than the internet itself) by incentivizing the sharing of, and interaction with content, and thus perpetuating violations of personality rights, even where the original author of a post has already deleted it, the author focuses on three areas of law: contract law, tort law, and data protection.

As far as questions of contract law are concerned, Bizer rightly puts an emphasis on the fact that social media platforms often involve a triangle (or pyramid) of contractual relationships between the hosts and at least two users. Regarding the relationship between the host and individual users, she identifies the delineation between private and professional use (only one of which triggers the consumer rules in the Brussels Ia and Rome I Regulations) as the main problem and argues in favour of a much wider understanding of the consumer definition. Regarding the relationship between multiple users of the same service, she rightly acknowledges the potential of the platform contract to influence the applicable law via Art. 4(3) Rome I.

Concerning tort law, Bizer is generally critical of the existing legal framework under Art. 40–42 of the German EGBGB (infringements of personality rights being excluded from the Rome II Regulation). Instead of giving the claimant a choice between Handlungsort (place of acting) and Erfolgsort (place of damage), potentially leading to a mosaic of applicable laws, the applicable law should be determined by identifying the objective centre of the violation, with the intended readership of a given publication as the guiding criterion, which may be supplemented, if necessary, by the CJEU’s centre-of-interests criterion and the place of acting. Again, the author acknowledges that the contract for the social media platform might be taken into account via an escape clause (i.e. Art. 41 EGBGB).

In addition to questions of data protection, the author also addresses the role of the e-Commerce Directive’s country-of-origin rule and the ordre public in what is a well-argued, excellently researched book on a highly topical question.

The American Law Institute is currently drafting the Restatement (Third) of Conflict of Laws. Lea Brilmayer (an eminent scholar of conflict of laws and a professor at Yale Law School) and Kim Roosevelt (the Reporter for the Restatement (Third) and a professor at the University of Pennsylvania Carey Law School) recently engaged in a spirited debate about the current state of that project. Brilmayer and Daniel Listwa argued here that the current draft needs less theory and more blackletter rule. Roosevelt argued in response that the critics identify a problem that does not exist and propose a solution that would make things worse.

This exchange — the latest back-and-forth in a conversation between these interlocutors — is likely to prove illuminating to anyone curious about the status of the Restatement (Third) in the United States.