Conflictoflaws

The American Association of Private International Law (ASADIP) will be holding its annual XIV conference entitled “Private International Law and Modern Technologies” on 4-5 November 2021 for the first time online.

There is a full website dedicated to this conference, click here.

The Conference will be mostly in Spanish (with a few exceptions) but simultaneous English-Spanish interpretation will be provided on the first day of the conference, which has been made possible thanks to the Organization of American States (OAS).

The programme is available here. Many international organisations will take part of this conference, notably the OAS, UNCITRAL, HCCH, and UNIDROIT.

The Conference has many interesting panels but perhaps it is worth noting the one taking place on Thursday 4 November at 14:15 – 16:00 h (Argentinean time, 18:15 – 20:00 CET time) – PANEL II – “Blockchain, contratos inteligentes y Derecho internacional privado” (Blockchain, intelligent contracts and Private International Law), where Giesela Rühl, a conflictoflaws.net editor and former general editor, will be participating along with Matthias Lehmann, Luis Ernesto Rodríguez Carrera and Alfonso Ortega Giménez. As previously indicated, simultaneous English-Spanish interpretation will be provided on that day.

The Conference is free of charge and no previous registration is required. The platform that will be used is KUDO and there are four links that have been provided to join the conference, one for each session. Participants will be allowed as “spectators” and their cameras and microphones will be deactivated but it will nonetheless be possible to use the chat function with the moderator to ask questions.

To join each session, participants must click on the provided link (for the specific session) and enter their full name and their professional affiliation. For more information on how to join, click here and see below.

First session (morning) / Thursday 4 November
Hora: 9:45 am a 1:00 pm (Horario Argentina)
https://live.kudoway.com/br/110112440372
Meeting ID: 110112440372

Second session (afternoon) / Thursday 4 November
Hora: 2:15 pm a 5:30 pm (Horario Argentina)
https://live.kudoway.com/br/110111239295
Meeting ID: 110111239295

Third session (morning) / Friday 5 November
Hora: 9:45 am a 2:00 pm (Horario Argentina)
https://live.kudoway.com/br/110115267689
Meeting ID: 110115267689

Fourth Session (afternoon) / Friday 5 November
Hora: 3:00 pm a 5:30 pm (Horario Argentina)
https://live.kudoway.com/br/110115948325
Meeting ID: 110115948325

Written by Huiyin Zhang, PhD Candidate at the Wuhan University Institute of International Law

China enacted the Personal Information Protection Law (PIPL) at the 30th Session of the Standing Committee of the 13th National People’s Congress on August 20, 2021. This is the first comprehensive national law in China concerning personal information protection and regulating the data processing activities of entities and individuals. PIPL, the Cyber Security Law (came into force on June 1, 2017) and Data Security Law (promulgated on September 1, 2021) constitute the three legal pillars of the digital economy era in China.

PIPL includes eight chapters and 74 articles, covering General Provisions, Rules for Processing Personal Information, Rules for Cross-border Provisions of Personal Information, Rights of Individuals in Activities of Processing Personal Information, Obligations of Personal Information Processors, Departments Performing Duties of Personal Information Protection, Legal Liability and Supplementary Provisions. This note focuses on its extraterritorial effect.

1.Territorial Scope

Article 3 of the PIPL provides:

“This Law shall apply to activities conducted by organizations and individuals to control the personal information of natural persons within the territory of the People’s Republic of China.

This Law shall also apply to activities outside territory of the People”s Republic of China to handle the personal information of natural persons within the territory of the People’s Republic of China under any of the following circumstances:

a . personal information handling is to serve the purpose of providing products or services for natural persons within the territory of the People’s Republic of China;

1. personal information handling is to serve the purpose of analyzing and evaluating the behaviors of natural persons within the territory of the People’ s Republic of China; or
2. having other circumstances as stipulated by laws and administrative regulations.”

According to paragraph 1 of Art 3, PIPL applies to all data processing activities of personal information carried out in China. If foreign businesses processes or handles the personal information within the territory of China, in principle, they shall comply with the PIPL. It indicates that this clause focuses on the activities of processing or handling personal information in the territorial of China, especially the physical link between the data processing or handling activities and Chinese territory.

According to paragraph 2 of Art 3, the PIPL shall be applicable to activities outside the territory of China in processing or handling the personal information within China under some circumstances. As provided in Art 53, “personal information handlers outside the borders of the People’ s Republic of China shall establish a dedicated entity or appoint a representative within the borders of the People’ s Republic of China to be responsible for matters related to the personal information they handle”. Notably, this clause focuses on the physical location of the data processors or handlers rather than their nationality or habitual residence.

PIPL has extraterritorial jurisdiction to data processing or handling activities outside the territorial of China under 3 circumstances as provided in paragraph 2 of Art 3 of the PIPL. This is the embodiment of the effect principle, which derives from the objective territory jurisdiction and emphasizes the influence or effect of the behavior in the domain. If the purpose is to provide products or services to individuals located in China, or to analyze the behaviors of natural person in China, the PIPL shall be applicable. Crucially, the actual “effect” or “influence” of data processing or handling is emphasized here, i.e. when it is necessary to determine what extent or what requirements are met of the damage caused by the above-mentioned data processing or handling activities outside the territorial of China, Chinese courts may reasonably exercise the jurisdiction over the case. Obviously, it reflects the consideration of the element of “brunt of harm”. However, if the “effect” or “influence” is not specifically defined and limited, there will be a lot of problems. It is important to figure out exactly whether data processors or handlers outside the territorial of China are aware of the implications of their actions on natural person within China and whether the “effect” or “influence” of the data-processing behaviors are direct, intentional and predictable.

The PIPL explicitly states its purported extraterritorial jurisdiction for the first time and insists on the specific personal jurisdiction and the effect principle. It is mainly because the PIPL is formulated “in order to protect personal information rights and interests, standardize personal information handling activities, and promote the rational use of personal information”, but in the process of legal protection of personal information of natural person, there are a lot of challenges, such as the contradiction between the application of traditional jurisdiction, the virtual nature of personal information and so on. In this sense, all jurisdiction of the PIPL, whether territorial jurisdiction or personal jurisdiction or effect principle, are all further supplements for the existing personal information protection regime previously provided.

2.PIPL and GDPR: a Comparative Study

The provisions on jurisdiction of GDPR are mainly concentrated in Art 3 and Art 23, 24, 25, 26, 27 of preambular 2. In Art 3, paragraph 1 and 2 identified “establishment principle” and “targeting principle” and paragraph 3 provides “This regulation applies to the processing of personal data by a controller not established in the Union, but in a place where Member State law applies by virtue of public international law”.

A. Establishment Principle

Under paragraph 1 of Art 3, GDPR applies to “the processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union, regardless of whether the processing takes place in the Union or not.” It set the “establishment criterion”, which has the dual characteristics of territorial jurisdiction and extraterritorial jurisdiction.

Compared with establishment criterion in GDPR, the PIPL indicates that personal information handlers outside the territorial of China shall establish a dedicated entity or appoint a representative within China as previously mentioned. It highlights the significance and necessity of establishing an entity when foreign data handlers process the personal information of national persons outside China under circumstance in paragraph 2 of Art3 of PIPL.

B. Targeting Principle

Compared with targeting criterion in GDPR, PIPL has many differences. Paragraph 2 of Art 3 of the GDPR clearly states that for data processors and controllers that do not have an establishment in the EU, GDPR will apply in two circumstances. Firstly, as stated in Art 3 of GDPR, the processing activities relate to “the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union” (Art 2 GDPR). It seems too abstract to give the definition and processing method of data processor and controller’ s behavior intention. Art 23 of the GDPR provides the clarification that “it should be ascertained whether it is apparent that the controller or processor envisages offering services to data subjects in one or more Member States in the Union.” The key factor to assess whether the processor or controller “targets” the EU is whether the behaviour of the offshore data processors or controllers indicates their apparent intention to provide goods or services to data subjects in the EU. This is an objective subjective test.

In contrast, Art 3 of the PIPL states that the law shall apply when the data processor processes personal information “to serve the purpose of providing products or services for natural persons within the territory of the People’ s Republic of China”. It indicates that the purpose of data processor or controller outside China is to provide a product or service to a domestic natural person in China. The key to the application is not only about whether it has purpose, but also about whether they have processed personal information of a natural person in China.

Secondly, the procession activities are in related to “the monitoring of their behaviour as far as their behaviour takes place within the Union”. It requires both the data subject and the monitored activity be located within the EU. “Monitoring” shall be defined in accordance with Article 24 of the GDPR preamble. This provision does not require the data processors or controllers to have a corresponding subjective intent in the monitoring activity, but the European Data Protection Board ( Hereinafter referred to as EDPB) pointed out that the use of the term “monitoring” implied that the data controllers or processors had a specific purpose, namely to collect and process the data. Similarly, Art 3 of the PIPL also applies to activities outside China dealing with personal information of natural persons within China, if the activities are to analyse and evaluate the acts of natural persons within China. The meaning of “analysis and evaluation” here is very broad and seems to cover “monitoring” activities under the GDPR.

Furthermore, paragraph 3 of Art 3 of the GDPR provides: “This Regulation applies to the processing of personal data by a controller not established in the Union, but in a place where Member State law applies by virtue of public international law.” It suggests that the data processor or controller does not have an establishment in the territory of the EU and there is no circumstances under paragraph 2 of Art 3 of the GDPR. Due to that the international law applies EU member state law in the area where the numerical controller is located, this law shall apply. This condition is primarily aimed at resolving the issue of extraterritorial jurisdiction over data processing or controlling that takes place in EU without an establishment. This condition is similar to Directive 95/46 of the European Parliament and the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data. The similar condition is not included in the PIPL, which instead shall apply to other circumstances “as stipulated by laws and administrative regulations”.

C. Passive personality principle

Under the passive personality principle, a state has prescriptive jurisdiction over anyone anywhere who injures its nationals or residents. As previously mentioned, paragraph 2 of Art 3 of the GDPR states that although the personal data processors or controllers are not established in the EU, EU still applies the laws of member states in accordance with public international law. Art 25 of the preamble of GDPR provides examples of such situations which may include a Member State’s diplomatic mission or consular post.

To some extent, GDPR includes all the personal data processing activities involving natural persons situated in the EU area into its jurisdiction, which is a variation of the passive nationality principle. It is because EU treats the individual data right as a fundamental human right and aims to establish a digital market of the unified level of protection. PIPL adopts the similar practice by adopting the passive nationality principle to protect Chinese citizens and residents.

3.Conclusion

The promulgation of PIPL shows that China recognizes the extraterritorial effect of data protection law. The exploration of legislation not only has the meaning of localization, but also contributes to the formulation of data rules for the international community. It marks an important step towards China’ s long-term goal of balancing the preservation of national sovereignty, the protection of individual rights and the free flow of data across borders.

This is a case note on the very recent Nigerian Court of Appeal’s decision that recognised the immunity of the President of the Commission of ECOWAS (Economic Community of West African States) from being impleaded in Nigerian courts.[1]

In Nigeria, the applicable law in respect of diplomatic immunities and privileges is the Diplomatic Immunities and Privileges Act, which implements aspects of the Vienna Convention on Diplomatic Relations 1961 (the “Vienna Convention”). Under the Diplomatic Immunities and Privileges Act, foreign envoys, consular officers, members of their families, and members of their official and domestic staff are generally entitled to immunity from suit and legal process.[2] Such immunities may also apply to organisations declared by the Minister of External Affairs to be organisations, the members of which are sovereign powers (whether foreign powers or Commonwealth countries or the Governments thereof).[3]

Where a dispute arises as to whether any organisation or any person is entitled to immunity from suit and legal process, a certificate issued by the Minister stating any fact relevant to that question shall be conclusive evidence of that fact.[4]

In a very recent case the claimant/respondent who was a staff of the Commission of ECOWAS sued the defendant/appellant in the National Industrial Court in Nigeria for orders declaring his suspension from office by the Commission unlawful and a violation of ECOWAS Regulations, and damages from the defendant/appellant for publishing what the claimant/respondent considered a “libelous” suspension letter. The defendant/appellant responded to the suit with a statement of defence and equally filed a motion of notice objecting to the jurisdiction of the National Industrial Court on grounds of diplomatic immunity he enjoys from proceedings in municipal courts of Nigeria by virtue of the Revised Treaty of ECOWAS, General Convention on Privileges and Immunities of ECOWAS and the Headquarters Agreement between ECOWAS and the Government of the Republic of Nigeria. He also placed reliance on Principles of Staff Employment and ECOWAS staff Regulations. In addition he attached a certificate from Nigeria’s Minister of Foreign Affairs which acknowledged his diplomatic immunity.

The trial court (Haastrup J) held that it had jurisdiction and dismissed the preliminary objection of the defendant/appellant. It relied on Section 254C (2)[5] of the 1999 Constitution (as amended in 2011)  and Order 14A Rule 1 (1)[6] of the National Industrial Court of Nigeria(Civil Procedure) Rules, 2017 to hold that the National Industrial Court had jurisdiction to resolve all employment matters in Nigeria, including cases that have an international element.

The Nigerian Court of Appeal unanimously allowed the appeal. Ugo JCA in his leading judgment held as follows:

“So this Certificate of the Minister of Foreign Affairs of Nigeria attached to the affidavit of Chika Onyewuchi in support of appellant’s application/objection before the trial National Industrial Court for the striking out of the suit is sufficient and in fact conclusive evidence of the immunity claimed by appellant. That also includes the statement of the Minister in paragraph 2 of the same certificate that the ECOWAS Revised Treaty of 1993 was “ratified by the Federal Republic of Nigeria on 1st July, 1994,” thus, putting paid to the trial Judge’s contention that appellant needed to prove that the said treaty was ratified by Nigeria for him to properly claim immunity.
Even Section 254C(2) of the 1999 Constitution of the Federal Republic of Nigeria which states that ‘Notwithstanding anything to the contrary in this Constitution, the National Industrial Court shall have the jurisdiction and power to deal with any matter connected with or pertaining to the application of any international convention, treaty or protocol of which Nigeria has ratified relating to labour, employment, workplace, industrial relations or matters connected therewith,’ does not by any means have the effect of conferring jurisdiction on the National Industrial Court over diplomats. In fact Section 254C(2) of the 1999 Constitution, as was correctly argued by Mr. Obi, only confers on the National Industrial Court power to apply international conventions, protocols and treaties ratified by Nigeria relating to labour, employment, workplace, industrial relations and matters connected therewith while exercising its jurisdiction over persons subject to its jurisdiction. Diplomats who enjoy immunity from Court processes from municipal Courts in Nigeria like the Respondent are not such persons. Incidentally, the apex Court in African Reinsurance Corporation v. Abate Fantaye (1986) 3 NWLR (PT 32) 811 in very similar circumstances conclusively put to rest this issue of immunity from proceedings in municipal Courts enjoyed by persons like appellant. That case was cited to the trial Judge so it is surprising that she did not make even the slightest reference to it in expanding her jurisdiction to appellant who has always insisted, correctly, on his immunity. In truth, the lower Court did not simply expound its jurisdiction but attempted to expand it too. A Court is competent when, among others, the subject matter of the case is within its jurisdiction and there is no feature in the case which prevents the Court from exercising its jurisdiction…
Appellant’s diplomatic status and his consequent immunity from proceedings in the Courts of this country was such a feature that prevented the National Industrial Court from exercising jurisdiction over him and Suit No. NICN/ABJ/230/2019 of respondent; it was therefore wrong in holding otherwise and dismissing his preliminary objection…”[7]

Adah JCA in his concurring judgment held as follows:

“The Appellant, being an international organization enjoys immunity from suit and legal process, both by virtue of Section 11 and 18 of the 1962 Act, and Certificate issued by the Minister of External Affairs. Where a sovereign or International Organization enjoys immunity from suit and legal process, waiver of such immunity is not to be presumed against it. Indeed, the presumption is that there is no waiver until the contrary is established. Thus, waiver of immunity by a Sovereign or International Organization must be expressly and positively done by that Sovereign or International Organization.

In the instant case, the appellant from the record before the Court is an international organization. The Foreign Affairs Minister of Nigeria had given a certificate to indicate the immunity of the appellant. Exhibit CA issued by the Ministry of Foreign Affairs on 16th January, 2020 in paragraphs 2 and 3 thereof state as follows:

“2. The ministry of Foreign Affairs wishes to reaffirm the status of the ECOWAS Commission as an international organization and the immunity and privileges of the Commission and its staff members with exception of Nigerians and holders of Nigeria permanent residency from Criminal, Civil and Administrative proceedings by virtue of ECOWAS Revised Treaty by of 1993, which was ratified by the Federal Republic of Nigeria on 1st July, 1994.
3. The Headquarters Agreement between the ECOWAS Commission and the Federal Republic of Nigeria also confers immunity on officials and other employees of ECOWAS by virtue of Article VII (3) (C) of the Agreement.”

It is very clear therefore, that the appellant is covered by the Diplomatic Immunities and Privileges Act and is not amenable to the jurisdiction of the Municipal Courts. The fact that their base is in Nigeria or that Nigeria is the Host Country of the appellant does not make the appellant subserviate to the jurisdiction of Nigerian Courts. It is therefore, the law as stated lucidly in the leading judgment of my learned brother that the lower Court has no jurisdiction to entertain the claim against the appellant…”[8]

This is not the first time Nigerian courts have dealt with the issue of impleading a diplomat or foreign sovereign before the Nigerian court.[9] The decision of the trial judge was surprising in view of the weight of authorities from the Nigerian Supreme Court and Court of Appeal on the concept of diplomatic immunities in Nigeria. The claimant/respondent may have argued that matters of employment qualify as waiver of diplomatic immunity, but this position has never been explicitly endorsed by Nigerian courts. The Supreme Court of Nigeria has only accepted the concept of waiver in situations where the person claiming immunity entered into commercial transactions with the claimant.[10]

Looking at the bigger picture how does an employee who has been unfairly dismissed by a diplomatic organisation gain access to justice in Nigerian and African courts? Should the law be reformed in Nigeria and African countries to take into account the interest of employees as weaker parties?

[1] President of the Commission of ECOWAS v Ndiaye (2021) LPELR-53523(CA).

[2]Diplomatic Immunities and Privileges Act, Cap D9 LFN 2004 ss 1, 3-6.

[3]ibid, ss 11 and 12.

[4]ibid, s 18.

[5] ‘Notwithstanding anything to the contrary in this Constitution, the National Industrial Court shall have the jurisdiction and power to deal with any matter connected with or pertaining to the application of any international convention, treaty or protocol of which Nigeria has ratified relating to labour, employment, workplace, industrial relations or matters connected therewith.’

[6] It provides that:

1.—(1) Where an action involves a breach of or non-compliance with an international protocol, a convention or treaty on labour, employment and industrial relations, the Claimant shall in the complaint and witness statement on oath, include,

(a) the name, date and nomenclature of the protocol, convention or treaty ; and

(b) proof of ratification of such protocol, convention or treaty by Nigeria.

(2) In any claim relating to or connected with any matter, the party relying on the International Best Practice, shall plead and prove the existence of the same in line with the provisions relating to proof of custom in the extant Evidence Act.”

[7] President of the Commission of ECOWAS v Ndiaye (2021) LPELR-53523(CA) 19-20.

[8] Ibid 24-26.

[9] See generally RF Oppong and CSA Okoli, Private International Law in Commonwealth Africa (2nd edition) (chapter 7).

[10]African Reinsurance Corporation v JDP Construction (Nig) Ltd (2007) 11 NWLR 224, 234-5 (Akintan JSC)..

The University of Turin and ILO International Training Centre’s Master in International Trade Law are pleased to announce the 2021/2022 Programme’s inaugural keynote. The event will take place on 5 November 2021, from 3.00 to 5.00 P.M. CET, on Zoom (at the following link: https://itcilo-org.zoom.us/j/85085505961?pwd=U2dLRitJTzUzYzlJUHAyM0NzclNydz09#success). The keynote will deal with ‘Gender and Trade Law’ and it will be delivered by Amrita Bahri, Assistant Professor, ITAM; Co-Chair, WTO Chair Program; Trade and Gender Consultant, International Trade Centre.

Please see the event’s flyer below:

The Time is Ripe? Proposed Regulation of Third Party Litigation Funding in the European Union

Written by Adrian Cordina, PhD researcher at Erasmus School of Law, project member of the Vici project ‘Affordable Access to Justice’ which deals with costs and funding of civil litigation, financed by the Dutch Research Council (NWO).

The question of how to fund litigation is an essential precondition for civil justice systems. While in some countries like Australia third party litigation funding (TPLF) has been developing for decades, in Europe too TPLF is now on the rise, particularly in international arbitration and collective actions. This has also caught the attention of the European legislator.

On the 17th of June 2021 the European Parliament Committee on Legal Affairs published a Draft Report with recommendations to the Commission on Responsible Private Funding of Litigation (TPLF). This follows the February 2021 European Parliament Research Service Study on the same matter. TPLF is the funding of litigation by an external third party in return for a share of the proceeds in case of success and is a growing commercial practice. The Draft highlights that TPLF in the EU is however currently operating in a ‘regulatory vacuum’, as it is not only present in consumer collective redress cases, in which case specific funding rules have already been enacted through the Directive (EU) 2020/1929 on representative actions for the protection of the collective interests of consumers [Representative Actions Directive  (RAD)].

While recognising the role TPLF plays in facilitating access to justice where otherwise not available due to the costs and risks of litigation, the Draft attempts to provide proposals on how to tackle the risks and concerns TPLF gives rise to. It focuses especially on the conflicts of interest between the litigation funders and the claimants, more specifically on the economic interest of the funder, which could drive the funder to demand excessive shares of the proceeds and to control the litigation process.

Similarly to the RAD, the Draft contains recommendations that it should be ensured that decisions in the relevant legal proceedings, including decisions on settlement, are not influenced in any way by the litigation funders and that courts or administrative authorities be empowered to require disclosure of information on third-party litigation funding.

Amongst the main recommendations which go beyond the funding rules in the RAD is that of establishing a system of supervisory authorities in each Member State which permits TPLF. These would grant authorisations and require that litigation funders comply with minimum criteria of governance, transparency, capital adequacy and observance of a fiduciary duty to claimants. Article 5 also proposes that third-party funding agreements need to comply with the laws of the Member State of the litigation proceedings or of the claimant, which could create problems if claimants and/or intended beneficiaries are from different Member States, from outside the EU or if one Member State prohibits TPLF in cross-border litigation.

It also contains recommendations on funding agreements being worded transparently, clearly and in simple language, on capping the return rate to the litigation funder at 40%, and on, subject to exceptions, preventing litigation funders from withdrawing funding midway through proceedings.

The debate on TPLF in Europe has only in recent years started to take the limelight in civil justice academia (see e.g. Kramer & Tillema 2020; Tzankova & Kramer 2021). That this topic is garnering attention is also evidenced by the September 2021 survey commissioned by the U.S. Chamber Institute for Legal Reform on Consumer Attitudes on TPLF and its regulation in the EU. While the complex matter of TPLF is in need of further research and reflection, considering developments in legal practice perhaps now indeed the time is also ripe for regulatory discussions.

GD Goenka University, Gurugram is part of the GD Goenka Group. GD Goenka University was established in 2013 under the Haryana Private Universities (Amendment) Act, 2013. The GD Goenka University School of Law offers Law Degree Programs at Undergraduate, Post Graduate and Doctoral levels and strives to open new vistas in the arena of law through clinical legal studies and research. With an objective to raise the standards of clinical legal education in India, the GD Goenka University, School of Law regularly hosts Moot Court Competitions and encourages law students from various Law Schools and Universities from across India and world to learn the art and skills of advocacy.

In November 2020, School of law, GD Goenka University successfully organized an arbitration moot court competition “GD Goenka – CIArb (India) International Virtual Commercial Arbitration Competition 2020” in association with CIArb (India) Chapter. The University is now organising the Fifth edition of  “GD Goenka – CIArb (India) International Virtual Commercial Arbitration Competition 2021″ in association with CIArb (India) Chapter on 20th-21st November. The event is expected to have participation from various Law Schools and Universities from across India & abroad.

The Registration for the Competition is open. The registration fee is USD 11 /- only.

You would also be pleased to know the Prizes for winners in various categories-

Winners- Rs 70,000/- (USD 935/-)

Runners Up- Rs 40,000/- (USD 534/-)

Best Speaker Male & Female- Rs 10,000/- each. (USD 133/- each)

Best Memorial- Rs 10,000/- (USD 133/-)

The link to the registration form, posters and brochure is found below.

Registration Form- https://forms.gle/ZwJpZKmsPNDJiwMN6

With Warm Regards,

Prof. (Dr.) Tabrez Ahmad,

Vice Chancellor GD Goenka University &

Dean School of Law

The INSOL Europe Academic Forum (IEAF) is inviting submission for its 17th annual conference, taking place from 2-3 March 2022 in Dublin (Ireland). Expressions of interest are invited for the delivery of research papers within the overall academic conference’s theme: “The Emerging New Landscape of European Restructuring and Insolvency”

The theme is intended to focus on, inter alia, the following overall topics:

• Reflections on the 2019/1023 Directive as such, and on further harmonization of insolvency laws in the EU;
• Reports on national implementations of the 2019/1023 Directive in the EU Member States, including related changes to insolvency and company laws;
• Cross-border issues relating to the new restructuring frameworks;
• The longer-term impacts of the COVID-19 pandemic on insolvency and restructuring laws in the EU and elsewhere;
• Digital assets and data in the context of insolvency proceedings and the new restructuring frameworks.

Conference methodology

In line with practice established in our past academic conferences, the intention for this year’s conference is to have research papers that challenge existing approaches, stimulate debate and ask, and attempt to answer, comparative and interdisciplinary questions about the above-mentioned topics. Accordingly, proposals are invited that do more than just outline a topic of interest in respect of any given jurisdiction, but seek to understand, analyse and critique the fundamentals of insolvency and restructuring systems in ways that are relevant across jurisdictions and across fields of academic inquiry. All contributions must be in English.

Presenting at the IEAF conference

Expressions of interest in delivering papers within the conference theme should be sent by email on or before 6 December 2021 to the INSOL Europe Academic Forum’s Secretary. Authors of papers selected for presentation will benefit from a waiver of the participation fee for the academic conference, however, they will be responsible for their own travel and accommodation costs. A limited number of travel grants will be available to junior scholars invited to present.

For further information, see: www.insol-europe.org/academic-forum-events

Tulane University School of Law and The American College of Trust and Estate Counsel’s Legal Education Committee are organizing the 9th academic symposium financially supported by The ACTEC Foundation. The symposium, Conflict of Laws in Trusts and Estates will be held at the Tulane University School of Law on Friday, October 21, 2022. The keynote address will be given by Professor Jeffrey Schoenblum of Vanderbilt University Law School.

Among the objectives of this symposium are the following:

• To bring together prominent and up-and-coming scholars for the discussion of important issues in conflict of laws;
• To spur leading-edge research on conflict of laws in trusts and estates;
• To encourage professors of trusts and estates to incorporate and consider issues of conflict of laws in their scholarship and teaching;
• To promote collaborations and exchanges between conflict-of-laws scholars and scholars of trusts and estates.

Papers presented at the symposium will consist of papers selected from this Call for Papers and papers from invited speakers. The papers will be published in the Tulane Law Review.

If you would like to be considered to present a paper, please submit an abstract of your paper to Ron Scalise by email (rscalise@tulane.edu) by November 1, 2021. Those chosen to participate  in the symposium will be notified no later than December 1, 2021. Symposium speakers will be required to submit a draft of their papers by August 15, 2022, so that the panel commentators will have sufficient time to prepare their commentary.

Symposium speakers will be reimbursed for their travel expenses (economy airfare, the cost of ground transportation, and up to two nights’ hotel stay). Speakers will be invited to dinner on the evenings of Thursday, October 20, 2022, and (for speakers staying Friday evening) Friday, October 21, 2022.

Breakfast and lunch will be provided to speakers and attendees on Friday, October 21, 2022, courtesy of The ACTEC Foundation.

Questions about the symposium or this call for papers should be directed to Ron Scalise at the email address above.

This symposium was made possible through the financial support of The ACTEC Foundation, https://actecfoundation.org.

Under the auspices of the project “Time to Become Digital in Law” (DIGInLaw), funded by the Erasmus+ Partnerships for Digital Education Readiness, the University of Aberdeen organizes in collaboration with the Universities of Osijek, Zagreb, and Milan, a PhD Book Club – European Private International Law in a Digital World.

The PhD Book Club will be held online on 8 December 2021. The goal of the book club is to raise awareness and expand knowledge through a discussion on contemporary private international law issues that stem from digitalization.

Participants can choose to join one or both of the following discussion panels:

10.00 – 11.30 UK time – Topic 1 – Jurisdiction in Digital World: Focus on the Extraterritorial Effects of the General Data Protection Regulation and the EU Commission’s Proposal AI Act 

12.30 – 14.00 UK time – Topic 2 – Cross-Border Family Law in Digital World: Judicial & Administrative Co-operation and the Use of High-Risk AI Tools in Cross-Border Family Litigation

The reading list will be distributed in advance to allow participants to prepare for discussion, which will be moderated by law professors and lecturers from the above-mentioned universities. All PhD researchers are eligible to apply. Please follow the registration link available on the event webpage here: https://www.abdn.ac.uk/law/events/16837/

This is an update on my previous blog post here

Capacity to sue and be sued is an important aspect of conflict of laws. It connects very well with the issue of access to justice. For example if a foreign company that does business with a Nigerian company cannot sue in Nigeria it can result in injustice, and lead to loss of confidence in doing transactions with parties located in the Nigerian legal system.

Why is the above topic important? Having undertaken further research, it can be said that Nigerian court decisions are not consistent on the issue of capacity of a foreign company to sue and be sued in Nigeria. The latest reported authoritative source from the Nigerian Supreme Court is that by virtue of Section 54 and 55 of the Companies and Allied Matters Act 2004 Cap C20 (now Section 78 and 79 of the Companies and Allied Matters Act 2020), a foreign company that carries on business in Nigeria without being registered as a Nigerian company carries out an illegal and void transaction, and thus such a contract cannot be enforced in Nigerian courts.[1] In effect, the provision of Section 60(b) of the Companies and Allied Matters Act 2004 Cap C20 (now Section 84(b) of the Companies and Allied Matters Act 2020) cannot avail the foreign company in granting it the capacity to sue in Nigeria to enforce a contract where it carries on business in Nigeria without registering as a foreign company.[2] It is only where the foreign company that is not registered in Nigeria enters into a contract with a Nigerian company, while not doing business in Nigeria, will such a contract be enforceable in Nigeria.[3] The key word is thus doing business in Nigeria in determining whether a foreign company that is not registered in Nigeria can sue or be sued in Nigeria. This decision has now been confirmed by a very recent Court of Appeal decision, though in the instant case it was held that the foreign company had a Nigerian subsidiary and it was not carrying out business in Nigeria (it was a single transaction), so the contract was enforceable in Nigeria.[4]

Yet this current position of Nigerian law is strange and appears to contrast with the law in other common law countries including common law African countries. The recent position of the Nigerian Supreme Court also appears to contrast with previous decisions of Nigerian appellate courts that held that foreign companies could sue and be sued in Nigeria irrespective of whether they are carrying on business in Nigeria.[5]

This aspect of law requires further reflection as it is now an important and controversial aspect of Nigerian law. Dr Abubakri Yekini and I plan to write a full blown article on this interesting subject. Please stay tuned!

[1] Citec Intl Estates Ltd. v. E. Intl Inc. and Associates (2018) 3 NWLR (Pt. 1606) 332, 357 – 364 (Eko JSC)

[2] Ibid.

[3] Ibid.

[4] Mocoh SA & Anor v. Shield Energy Ltd & Anor (2021) LPELR-54559(CA).

[5]INFAZ v COBEC (Nig) Ltd (2018) 12 NWLR Pt. 1632) 127; Bank of Baroda v Iyalabani Company Ltd (2002) 13 NWLR 551. See also Watanmal (Singapore) Pte Ltd v. Liz Olofin and Company Plc (1997) LPELR-6224(CA) 13 (Musdapher JCA as he then was); NU Metro Retail (Nig) Ltd v. Tradex S.R.L & Another (2017) LPELR-42329(CA) 41-2 (Garba JCA as he then was).

This post is by Emilia Beuger (LL.M. Utrecht), JD Candidate at the University of Pittsburgh School of Law.

As noted in an earlier post on this site, the United States Supreme Court granted a petition for a writ of certiorari to the Ninth Circuit’s decision in Cassirer v. Thyssen-Bornemisza Collection Foundation on September 30, 2021. Below is a more detailed discussion of the issues at play in this case.

This case originated in the state of California and was then appealed to the Ninth Circuit before filing a writ of certiorari to the Supreme Court of the United States. The central legal issue concerns the Foreign Sovereign Immunities Act (FSIA), whose application and interpretation has been split across Circuit Courts.

The issue before the Supreme Court is whether a federal court hearing state law claims brought under the FSIA must apply the forum state’s choice-of-law rules to determine what substantive law governs the claims at issue, or whether it may apply federal common law. The state law is California’s choice-of-law test and the federal common law’s choice-of-law test is set forth in the Restatement (Second) Conflict of Laws. The FSIA does not have an express choice of law provision.

Background

The Cassirer family has sought to recover a painting that was stolen from Lilly Cassirer by the Nazis in 1939, and it was subsequently smuggled into the United States and traded privately. This was unbeknownst to Lilly, who brought proceedings in the United States Court of Restitution Appeals under the assumption that the painting had been lost or destroyed. The Thyssen-Bornemisza Collection Foundation (TBC) purchased the painting in 1993. TBC is a public foundation, and it is considered an agency or instrumentality of the Kingdom of Spain. In 2000, Lilly’s grandson Claude Cassirer learned that TBC had possession of the painting and requested both Spain and TBC for the painting’s return. Spain refused. Claude filed suit against Spain and TBC in 2005. Spain was voluntarily dismissed as a party in 2011.

Claude passed away in 2010, and his children David and Ava, as well as the United Jewish Federation of San Diego County, were substituted as plaintiffs. Ava’s estate was substituted as a plaintiff after she passed away in 2018.

Issues and Arguments

A series of different proceedings have occurred since the original filing in 2005. The Ninth Circuit found that the Foreign Sovereign Immunities Act applies to the dispute because the painting was stolen by Germany in violation of international law.

The most recent case in the district court in 2015 was a result of the parties’ cross-motions for summary judgment on the choice-of-law and its application. The district court found for TBC. Even though the buyer prior to TBC had not purchased the painting in good faith and did not pass good title to TBC, TBC lacked actual knowledge under Spanish law. Because TBC lacked actual knowledge under Spanish law, TBC was allowed to keep the stolen painting.

Cassirer’s theory on appeal was that the district court should have applied California law, not Spanish law. Under California law, a thief cannot pass title to anyone, even if there was a good faith purchaser (i.e. who TBC claims to be in this case). Therefore, if California law had been applied in this case, the outcome would have been different.

Key to both sides arguments is that the FSIA provides: “foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances.” 28 U.S.C. § 1606.

On appeal, the Ninth Circuit agreed with the district court, affirming the application of federal common law to the choice-of-law analysis under the FSIA, but remanded because the Ninth Circuit felt that the district court did not properly apply the Spanish law. Cassirer argues that this contrasts with other Circuit Courts, such as the Second, Fifth, Sixth and D.C. Circuits, who have applied the law of the forum state to the choice-of-law analysis for claims under the FSIA.

In Cassirer’s petition, he cites cases across the Second, Fifth, Sixth, and D.C. Circuits that say the law of the forum state should be applied, not federal common law. The decision to apply federal common law by the Ninth Circuit turned on the wording of past precedents that show that the court may “prefer” to apply it. In contrast, the Second Circuit has interpreted that the FSIA is a “pass-through” for the application of state law to be controlling when there is an issue of choice-of-law. If the goal of the FSIA is to apply the same laws to foreign states and private individuals, then the application must be done with the law that the court would use if the court was dealing with two private parties. Cassirer argues that the application of California’s choice-of-law test would have led to the application of California law because the state law interest of California would be more impaired than if the Spanish law was chosen to be applied in this case.

The Ninth Circuit’s approach, Cassirer argues, would lead to an inconsistency within the liability standards for foreign states and private individuals because the law applied in the state court would be different than the law applied if the suit was brought in federal court. Additionally, Cassirer puts forth public policy arguments. Because there is a split in the Circuit Courts, Cassirer argues that the Supreme Court should hear this case.

While Cassier argues that both tests would have warranted application of California law, TBC argues that both tests would have warranted application of Spanish law.

TBC filed a response to Cassirer’s Petition, arguing that while there may be a split amongst the Circuits, the split is a shallow one. TBC also argues that the outcome(s) will almost always be the same, no matter what choice-of-law test is applied. Public policy arguments are also advanced by TBC that the FSIA’s goal of holding foreign sovereigns accountable and that foreign sovereigns are to be dealt with differently than individuals, specifically at the federal level. Additionally, the jurisdiction of the Ninth Circuit rests on a federal question, not a diversity matter, so the Ninth Circuit should apply the federal common law test.

Briefs will be filed later this year and early next year.

The Supreme Court is slated to hear arguments during its 2021 Term.

This book celebrates the work and scholarship of Professor Giorgio Bernini, Honorary President of ICCA, who held the chair of European Union Law, Arbitration and International Commercial Law at the University of Bologna for almost 30 years. A very successful international lawyer, he was the Italian Minister of Foreign Trade and a Member of the Italian Antitrust Authority. Bernini has built a long career in the study and practice of arbitration with a record of 450 cases. The book is divided into an introduction and two parts, to highlight many of Bernini’s contributions to the Law.

In a special introductory section of the book, entitled ‘portraits of a pioneer’, some authors offer specific references to some of his many activities in the field: from the ICC Institute of World Business Law to the International Council for Commercial Arbitration, from the Italian Arbitration Association to his professional life as an international lawyer. Then, in the first part of the book, essays on Contract Law and International Trade Law have been collected. The second part is dedicated to arbitration in its many dimensions: domestic, international, commercial and investment Law.

The contributors are amongst the most highly qualified publicists of the various Nations, with the highest academic credentials and proven experience in the field: Yves Derains, Lise Bosman, Maria Beatrice Deli, Antonio Fraticelli, Guido Alpa, Alfonso-Luis Calvo Caravaca, Javier Carrascosa González, Roberto Ceccon, Gabriele Crespi Reghizzi, Abdel Hamid El Ahdab, H. Ercüment Erdem, Marcel Fontaine, Roy Goode, Kaj Hober, Ernst-Ulrich Petersmann, Fausto Pocar, Stefano Azzali, Ronald A. Brand, Sergio M. Carbone, Dominique Carreau, Claudio Consolo, Giorgio De Nova, Donald Francis Donovan, Romain Zamour, Ugo Draetta, José Carlos Fernandez Rozas, Emmanuel Gaillard, Maria Chiara Malaguti, Eleonora Finazzi Agrò, Fabrizio Marrella, Margaret L. Moses, William W. Park, Hassan Rahdi, Christoph Schreuer, Nicola Soldati, Shengchang Wang.

For further information please visit here:

The latest issue of RabelsZ has just been published online. It contains the following contributions:

Jaakko Husa: Merging International Law and Comparative Law – Balancing Between Normative and Non-Normative, Volume 85 (2021) / Issue 4, pp. 745-774 (30), https://doi.org/10.1628/rabelsz-2021-0045

The relationship between comparative law and public international law is paradoxical. These fields are in principle close to each other but remote in practice. The emergence of comparative international law has changed the situation as it invites comparative law scholars to enter into discussion on international law. This article provides a critical analysis on the possibilities for comparative law in the field of international law. It discusses and explains why a non-normative understanding of comparative international law works well together with the pluralist conception of comparative law, and why a normative understanding of comparative international law is incompatible with it. This article explains why comparative law scholars do not welcome the use of comparative law for international law purposes with open arms.

Malte Kramme: Mehr als ein Qualifikationsproblem: Zum Verhältnis von Verbrauchervertrags- und Geschäftsfähigkeitsstatut, Volume 85 (2021) / Issue 4, pp. 775-810 (36), https://doi.org/10.1628/rabelsz-2021-0046

More than a Problem of Characterization: The Relationship Between Consumer Contract Law and the Law of Capacity. – The EU regulations in the area of private international law largely exclude legal capacity. The law applicable to questions of capacity is determined by the applicable national conflict-of-law rules. This raises the question of the scope of the law of capacity and how it is to be distinguished from neighbouring fields of law. In particular, drawing this distinction vis-à-vis contract law presents difficulties in cases involving consumers. Both consumer law and the law of capacity place the protection of the weaker party in the foreground. Distinguishing the law of capacity from neighbouring fields of law is therefore more than a mere problem of characterization: it is a matter of not undermining the level of protection sought by the different fields of law in cross-border cases. In this paper, a proposal is made as to how the boundaries of the law of capacity can be determined in relation to contract law, taking into account this intended protection of the weaker party.

Jürgen Samtleben, Gonzalo A. Lorenzo Idiarte: Das Allgemeine Gesetz des Internationalen Privatrechts von Uruguay, Volume 85 (2021) / Issue 4, pp. 811-851 (41), https://doi.org/10.1628/rabelsz-2021-0047

The Uruguayan General Law of Private International Law. – Uruguay has always been a center for private international law. The Montevideo Congress, held in 1888 and 1889 at Uruguay’s invitation – before the Hague Conference on Private  International Law – was of instrumental significance for the development of private international law in Latin America. Uruguay has consistently played an active role in preparing the inter-American specialized conferences on private international law and in propagating bilateral PIL treaties. The new private international law legislation underway since the end of the last century does not break with tradition completely, but seeks to develop it further adapting it to present-day demands. Some major features of the reform bear emphasis: a comprehensive regulation of the general rules of private international law, refinements to the contours of international family law, a recasting of international contracts law based on party autonomy,  and detailed rules on the exercise of jurisdiction by national courts in international disputes.

For a German translation of the Uruguayan General Law of Private International Law of 27 November 2020 by Samtleben, see: Volume 85 (2021) / Issue 4, pp. 907-925 (19), https://doi.org/10.1628/rabelsz-2021-0052

Issue 4/2021 also includes the following contributions originating in the Symposium “The Code of Capital”, held at the Max Planck Institute for Comparative and International Private Law in Hamburg on 11 May 2021:

• Ralf Michaels: Vorwort zum Symposium, Volume 85 (2021) / Issue 4, pp. 852-853 (2), https://doi.org/10.1628/rabelsz-2021-0048

• Hans-Bernd Schäfer: Nationalreichtum und private Armut durch Zivilrecht? – Eine Besprechung des Buchs »The Code of Capital« von Katharina Pistor, Volume 85 (2021) / Issue 4, pp. 854-875 (22), https://doi.org/10.1628/rabelsz-2021-0049

• Katharina Pistor: Recht und Ökonomie im Spannungsfeld verschiedener Schulen – Eine Replik auf Hans-Bernd Schäfers Buchbesprechung, Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ), Volume 85 (2021) / Issue 4, pp. 876-889 (14), https://doi.org/10.1628/rabelsz-2021-0050

• Ralf Michaels: Der Code des Kapitals und seiner Portabilität – Anmerkungen zu Katharina Pistor, Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ), Volume 85 (2021) / Issue 4, pp. 890-906 (17), https://doi.org/10.1628/rabelsz-2021-0051

This post is by Alberto Pomari, LLM Student at the University of Pittsburgh School of Law and JD Student at the University of Verona School of Law.

Although the United States has historically led the way in the field of antitrust law, it is currently taking a backseat to the European Union, which has become the global role model in competition law. The Illumina/Grail merger illustrates this tendency.

In March 2021, the FTC challenged the merger and filed an administrative complaint for a temporary restraining order to keep Illumina and Grail from closing the transaction. Specifically, the FTC avers that Illumina’s acquisition of Grail will “lessen competition in the U.S. MCED test market by raising costs and hindering development efforts of Grail’s rivals.” Effectively, the FTC is leaning on the theory of harm, known as “increased leverage theory,” that aims at protecting competitors in the downstream market from the merged firm’s stronger “bargaining position in affiliate negotiations.” However, this theory was soundly rejected only a few years ago in United States v. AT&T, Inc. where the Court stuck with the traditional lodestar of American antitrust law, i.e. the consumer welfare theory. In a fanciful attempt to overrule the AT&T decision, the increased leverage theory was incorporated in Section 4 of the (already withdrawn) 2020 Vertical Merger Guidelines. Notwithstanding, after only two months, the FTC dropped its temporary restraining order petition as Illumina and Grail had, in the meantime, been prevented from merging under European competition law. Indeed, in view of its cooperation with the FTC, the European Commission announced in April 2021 an investigation into the transaction at stake pursuant to a new interpretation of Article 22 of the E.U. Merger Regulation.

Unlike its American counterpart, European competition law has traditionally served an array of policy goals that, going beyond the mere consumer welfare, include the protection of small- and medium-sized enterprises as well as the preservation of a competitive market structure. Accordingly, mergers like Illumina/Grail usually have a harder time passing the scrutiny of the European institutions. However, what is unprecedented in this case is the European Commission’s willingness to go the extra mile to crack down on an acquisition that involves two American companies, one of which—Grail—does not even have any business activity in the European Union.

In March 2021, the EC issued a new interpretation of the referral mechanism set out by Article 22 of the Merger Regulation. Particularly, National Competition Authorities may now require the European Commission to assess any proposed merger that “may have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States,” irrespective of the merging parties’ actual presence in the European market. By adopting this new interpretation, the European Union was able to come to the rescue of the ill-equipped FTC by halting the Illumina/Grail transaction thanks to the (administrative) standstill obligation imposed by Article 7 of the E.U. Merger Regulation.

In conclusion, Illumina and Grail have been the hapless victims of a joint EC-FTC scheme that should send chills down the spine of any American company interested in a vertical merger, mainly for two reasons. First, according to the new interpretation of Article 22 of the E.U. Merger Regulation, many cutting-edge U.S. mergers are likely to be scrutinized by the European Commission under the E.U. stringent theory of harm, even if the companies involved have no current business in the European Market. Second, to challenge these mergers, the FTC will likely engage in unprecedented transatlantic forum shopping to obtain from the European Commission a (administrative) temporary restraining order that should otherwise be sought before an American court. This may be just the beginning of a far-reaching “Europeanization of the U.S. antitrust.”

The UNCITRAL LAC Day 2021 will take place online on Thursday 21 October 2021 at 10:00 Argentinian time and 15:00 CEST time (in Spanish). This event has been organised by UNCITRAL, the Organization of American States (OAS – OEA), Secretaría de Integración Económica Centroamericana / Secretariat for Central American Economic Integration (SIECA) and ASADIP.

The focus of the conference will be international commercial mediation and expedited arbitration. In particular, it will be discussed the work carried out by UNCITRAL’s Working Group II: Dispute Settlement.

By Jack Wass (Stout Street Chambers, New Zealand)

The enforcement of judgments from Chinese courts continues to generate controversy in common law countries. In Hebei Huaneng Industrial Development Co Ltd v Shi, the New Zealand courts have been faced with the argument that because Chinese courts are not independent of the political arms of government, they do not qualify as “courts” and their judgments are not entitled to recognition.

In 2020, the High Court rejected this argument in a jurisdictional context: see our report here and the issue has also arisen in the United States. The issue arose again, in the same case, on an application for summary judgment by the plaintiff judgment creditor. Here the argument received more traction from a different judge of the same court.

The judges at both stages recognised that there were two ways to look at allegations that courts lacked impartiality and independence: the first is to assess whether the courts, as a general matter, possess the characteristics of judicial bodies whose decisions are entitled to recognition; the second is to assess whether the absence of independence resulted in a breach of natural justice in the circumstances of the actual case.

Both approaches present the court with a potentially invidious inquiry, but the clear message from the judges in both decisions is that a defendant has a better chance of showing that justice was not done in an individual case than convincing the court to condemn an entire judicial system. With the application for summary judgment rejected, the case will now go to trial; this will not be the last word on the enforcement of Chinese judgments in New Zealand.

Written by Marco Farina, Italian lawyer, PhD in Civil Procedural Law at the University La Sapienza of Rome – Adjunct Professor of Civil Procedural Law at the University LUISS of Rome

In a judgment rendered on 16 September 2021, the Italian Supreme Court (Corte di Cassazione) reversed a decision from the Court of Appeal of Rome, which had denied recognition and enforcement of a monetary judgment issued by the Royal Court of Guernsey, due to a breach of the fundamental rights of defence allegedly occurred in the proceedings.

The Court of Appeal of Rome reasoned under Article 64 (b), of the Italian Act on Private International Law (Law 31 May 1995 no. 218), which provides, inter alia, that a foreign judgment may be not recognized and enforced if fundamental rights of defence have been breached in the foreign proceedings.

The Court of Appeal found that a relevant breach of the fundamental rights of defence had occurred because, at the outset of the proceedings, a worldwide freezing injunction (associated with a disclosure order) had been issued against the defendant. In the Court of Appeal’s opinion, the injunction and its effects altered the procedural equality of the parties before the foreign court, since it was a “highly coercive measure against the defendant who is not only severely affected in the free disposal of his assets, but is also exposed to the risk of even being deprived of his personal freedom, if he does not cooperate with his counterpart in the identification of his assets to be seized” (English translation).

This relevant alteration of the procedural equality of the parties existed, according to the Court of Appeal, because, whilst the defendant was impacted by this order, the plaintiff was not.

In the end, the Court of Appeal held that the injunction issued against the defendant had “the concrete ability – in the absence of any conduct of the defendant indicating that he intended to harm the claimant’s rights – to limit, restrict, diminish the defendant’s ability to defend itself, both in imposing significant limitations on the free disposal of his assets and in constraining him to collaborate with the claimant before of preparing its own defence. All this, while nothing of the same kind affected the assets or the defensive opportunities of the claimant. The defendant, therefore, found himself in a much weaker defensive position than his counterpart” (English translation).

The Supreme Court found several flaws in this reasoning.

Firstly, the Supreme Court held that if, in principle, it could not be denied that a relevant alteration of the procedural equality might amount to a breach of the fundamental rights of defence, the mere fact that the judgment to be recognized and enforced in Italy had been preceded by a provisional order – in the form of an injunction (associated with a disclosure order) – could not, in any case, lead to such a breach.

Regarding the functioning of a freezing injunction issued by a common law court, the Supreme Court asserted that (i) the injunction is sought to preserve the defendant’s assets until judgment can be obtained or satisfied, (ii) the injunction may be rendered when the claimant has shown a good arguable case and a risk of dissipation exists, (iii) it operates in personam; therefore, its effectiveness depends on the threat of punishment for contempt of court, and (iv) it is usually associated with other orders, which are aimed at rendering the freezing injunction more effective, thus constraining the affected party to identify its assets and their location (disclosure order) under the threat of being excluded (debarred) from the proceedings (unless order).

Having said that, the Supreme Court went on to state that, in the case at hand, the injunction was associated with a disclosure order but not with an unless order. So, even if the defendant were not to comply with the injunction and the disclosure order, he remained fully entitled to participate in the proceedings defending himself as no exclusion and/or debarring was pronounced against him.

In the light of the above, the Supreme Court had good reason to observe that the Court of Appeal should not have found any breach in the fundamental rights of defence (in terms of the alteration of the procedural equality of the parties) since – as the same Italian Supreme Court held in its previous judgment (judgment no. 11021 rendered on 9 May 2013 in the well-known Gambazzi case, following the decision from CJEU in Case C-394/07, 2 April 2009, Gambazzi) – the right to a fair trial should be considered breached in the event of “manifest and disproportionate infringement of the defendant’s right to be heard” (English translation).

Thus, the Supreme Court noted that, if a judgment rendered against a defendant who – due to his failure to comply with a disclosure order associated with a freezing injunction – had been excluded and/or debarred from the proceedings, must be recognized and enforced in Italy (see again judgment no. 11021 of 9 May 2013 in the Gambazzi case), a fortiori a monetary judgment rendered against the defendant whose participation in the proceedings had not been prevented notwithstanding its failure to comply with the disclosure order associated with the freezing injunction, ought to be recognized and enforced in Italy.

The validity of this line of reasoning must be inferred, according to the Supreme Court, from the injunction (and the disclosure order which was associated with it) being a provisional and protective measure aimed at preserving the claimant’s right to enforce the judgment which might be rendered in its favour at the end of the proceedings on the merits. Therefore, such measures are as much an essential part of the common law procedural system as the attachment and/or preservation orders are in Italy (sequestro conservativo, Article 671 of Italian Code of Civil Procedure).

Hence, asserting that – as the Court of Appeal did – the mere fact that a freezing injunction has been issued and enforced against a defendant (and not against the claimant) amounts to a breach of the right to a fair trial (in terms of the alteration of the procedural equality of the parties), would insinuate that a breach of the fundamental right of defence occurs in Italy every time a claimant succeeds in obtaining a protective measure against the defendant, when the former is not addressed with the same measure.

This is not an alteration of the procedural equality of the parties. On the contrary, this is the essence of litigation between two parties in an adversarial system.

It is natural in contentious civil proceedings that the party against whom a claim is brought may be affected by measures which result in finding itself in a different situation from that of the claimant. This cannot, by definition, give rise to any relevant breach of the fundamental rights of defence in terms of violation of the principle of the so-called ‘equality of arms’. For example, in the ordinary proceedings instituted by the debtor for opposing an enforceable order of payment obtained by the creditor, the debtor finds himself in different position from that of the creditor; a defendant, in ordinary civil proceedings, finds himself in a different situation from that of the claimant who has obtained – before or during the proceedings – an attachment order for the defendant’s assets.

Accordingly, provided that both parties are granted equal chances to obtain and enforce a protective and/or provisional measure, is part of the ordinary functioning of a civil proceeding that a party will succeed in obtaining it and the other will not.

In the case at hand – the Supreme Court noted – both parties were granted equal and fair chances of defence as, (i) the freezing injunction and the disclosure order were given ex parte but the defendant was given the right to apply to the court to vary or reverse the order, and (ii) the claimant had assumed the obligation of complying, under the same threat of the “contempt of court”, with any subsequent order of the Court condemning the claimant for any loss suffered by the defendant.

Moreover, the Supreme Court asserted that nothing to the contrary may be inferred from the fact that the injunction and the disclosure order operate in personam and that the infringement thereof triggered the consequences of a “contempt of court”. The Cassazione did not see any violation of the fundamental rights of defence, all the more because the Italian legal system features cases in which a failure to comply with a judicial order could amount to a criminal offence.

The judgment of the Italian Supreme Court can be read here (in Italian).

By Julian Henrique Dias Rodrigues

The Brazilian Superior Court of Justice reinforced the understanding that a foreign judgment that sets the amount of child support must be enforced even if the high economic-financial standard of the country of origin gives rise to an excessive amount, when compared to the national standards.

The case concerns the enforcement in Brazil of a decision from the District Court of Bludenz, in the Republic of Austria, against a debtor residing in Brazil.

The Austrian court set the monthly amount of maintenance at EUR 290.00 and determined that the amounts in arrears totaled EUR 35,090.00.

The debtor claimed that the decision could not be enforced since such amount would be totally unreasonable in relation to the economic reality of the defendant, characterizing the foreign decision as violating human dignity and the basic principles of the Brazilian legal system by ignoring the socioeconomic reality of Brazil and of the defendant in particular.

However, the Court emphasized that the enforcement of a foreign decision is a merely formal act, whereby is not possible to enter into the merits of the original dispute, nor investigating any injustice of the foreign decision. This enforcement, therefore, has the sole and exclusive purpose of transferring into the Brazilian legal system a decision handed down abroad, provided the formal requirements required by Brazilian law are met.

With this, the enforcement does not deprive the debtor of the possibility of filing a suit to review the amount of the child support, in view of the alleged disparity between the economic realities in Brazil and in the country where the amount was fixed.

The decision was rendered in Application HDE n.º 4.289 (Special Section of the STJ) and took into consideration the requirements under Brazilian law for enforcement of a foreign decision.

Brazilian legal framework on enforcement of foreign decisions

The Brazilian Federal Constitution states that the enforcement of foreign judgements is a competence of the Superior Court of Justice (STJ). The Brazilian legal instrument, therefore, for the recognition of foreign decisions is, in Portuguese, the Ação Especial de Homologação de Decisão Estrangeira (HDE).

The requirements for the enforcement of a foreign judgment through HDE are foreseen in Article 963 of Código de Processo Civil (CPC) and in Articles 216-C and 216-D of the Internal Rules of the STJ. In this regard, it is worth remembering that neither Brazil nor Austria ratified the Convention of 2 October 1973 on the Recognition and Enforcement of Decisions Relating to Maintenance Obligations.

The article 216-D states that the foreign decision must:

1. have been rendered by a competent authority,
2. contain evidence that the parties have been duly summoned or that a default judgement has been legally issued, and

• have become effective or res judicata in the country in which it was rendered.

According to Article 216-F a foreign decision shall not be enforced if that offends national sovereignty, human dignity and/or public order.

In short, the debtor argued that the economic disparity and the lack of analysis by the Austrian Court about his financial condition in particular would imply a violation of human dignity and the Brazilian legal order, but the Brazilian Court found that these issues would be a question of merit, and not of formal requirements. Whereas related to the merit of the suit filed before the foreign Court, these questions cannot be analyzed before the Court in the exercise of its competence merely to enforce the decision rendered abroad.

Click here to access the full decision (in Portuguese)

Thomas Pfeiffer/Quincy C. Lobach/Tobias Rapp (Eds.), “Facilitating Cross-Border Family Life – Towards a Common European Understanding”, Heidelberg University Publishing 2021 (link)

The EUFams II consortium has just released the project’s Final Study. The volume contains the papers presented at the project’s Final Conference. The contributors were invited to present historical developments, discuss the status quo, and draw the lines along which European family and succession law may develop. The authors hope to inspire the readership and the scientific community at large to engage in further research along and across these lines.

The book is available both online (open access) as well as in print (link). Its contributors are (in alphabetical order): Marlene Brosch, Laura Carballo Pineiro, Diletta Danieli, Rosario Espinosa Calabuig, Ivana Kunda, Quincy C. Lobach, Cristina M. Mariottini, Ulf Maunsbach, Nicolo Nisi, Cinzia Peraro, Thomas Pfeiffer, Paula Poretti, Tobias Rapp, Lenka Valkova, Ilaria Viarengo, Francesca Villata, Marcel Zühlsdorff, and Mirela Zupan.

The EUFams II project (2018-2020) was coordinated by the Institute for Comparative Law, Conflict of Laws and International Business Law of Heidelberg University. Project partners were the Universities of Lund, Milan, Osijek, Valencia, and Verona as well as the MPI Luxembourg. This blog has previously reported on some of the project’s research outputs, including the Final Conference.

This project was funded by the European Union’s Justice Programme (2014-2020). The content of this study represents the views of the authors only and is their sole responsibility. The European Commission does not accept any responsibility for use that may be made of the information it contains.

This week the European Union has given notice to all stakeholders that is preparing an initiative relating to justice and fundamental rights, the purpose of which is to enact the implementing acts establishing the decentralised IT system to be used for cross-border service of documents and cross-border taking of evidence. Click here and here.

This is in accordance with the Regulation (EU) 2020/1784 of the European Parliament and of the Council of 25 November 2020 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents) (recast) and the Regulation (EU) 2020/1783 of the European Parliament and of the Council of 25 November 2020 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters (taking of evidence) (recast).

As stated in the notifications, the implementing acts will set out the technical specifications of the methods of communication and communication protocols, security objectives and relevant technical measures, minimum availability objectives and the establishment of a steering committee.

It is planned for the first quarter of 2022.