Conflictoflaws

Written by Giesela Rühl, University of Jena/Humboldt-University of Berlin

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. Corporate social responsibility has been the subject of lively debates in private international law for many years. These debates revolve around the question of whether companies domiciled in countries of the Global North can be held liable for human rights violations committed by foreign subsidiaries or suppliers in countries of the Global South (so-called supply chain liability).

2. According to the majority view in the public international law literature, companies are not, at least not directly bound by human rights. Although numerous international law instruments, including the UN’s 2011 Guidelines for Business and Human Rights (Ruggie Principles), also address companies, liability for human rights violations is, therefore, a matter of domestic law.

3. The domestic law applicable to liability for human rights violations must be determined in accordance with the provisions of (European) private international law. Direct recourse to the lex fori, in contrast, is not possible. The legal situation in Europe is, therefore, different from the United States where actions which are brought on the basis of the Alien Tort Claims Act (ATCA) are governed by US-American federal (common) law.

4. Claims for human rights violations committed abroad will usually be claims in tort. Under (European) private international law it is, therefore, the law of the place where the damage occurs (Article 4(1) Rome II Regulation) and, hence, foreign law which governs these claims. Exceptions apply only within narrow limits, in particular if domestic laws can be classified as overriding mandatory provisions (Article 16 Rome II Regulation) or if application of foreign law violates the ordre public (Article 26 Rome II Regulation).

5. In addition to tort law, claims for human rights violations may also be based on company law, namely when directors are directly held liable for torts committed by a foreign subsidiary. According to the relevant private international law provisions of the Member States these claims are governed by the law of the (administrative or statutory) seat of the foreign subsidiary. As a consequence, claims in company law are also subject to foreign law.

6. The fact that (European) private international law submits liability for human rights violations to foreign law is very often criticized in the private international law literature. Claiming that foreign law does not sufficiently protect the victims of human rights violations, a number of scholars, therefore, attempt to subject liability claims de lege lata to the domestic law of the (European) parent or buyer company.

7. These attempts, however, raise a number of concerns: first, under traditional (European) private international law, substantive law considerations do not inform the determination of the applicable law. Second, the wish to apply the domestic law of a European country is mostly driven by the wish to avoid poorly functioning court systems and lower regulatory standards in countries of the Global South. Neither of these aspects, however, has anything to do with the applicable tort or company law. Regulatory standards, for example, are part of public law and, therefore, excluded from the reach of private international law. Finally, the assumption that the domestic law of the (European) parent or buyer company provides more or better protection to the victims of human rights violations does not hold true de lege lata. Since parent and buyer companies are legally independent from their foreign subsidiaries and suppliers, parent and buyer companies are only in exceptional cases liable to the victims of human rights violations committed abroad by their foreign subsidiaries or suppliers (legal entity principle or principle of entity liability).

8. The difficulties to hold (European) parent and buyer companies de lege lata liable for human rights violations committed by their foreign subsidiaries or suppliers raises the question of whether domestic laws should be reformed and their application ensured via the rules of private international law? Should domestic legislatures, for example, introduce an internationally mandatory human rights due diligence obligation and hold companies liable for violations? Proposals to this end are currently discussed in Germany and in Switzerland. In France, in contrast, they are already a reality. Here, the Law on the monitoring obligations of parent and buyer companies (Loi de vigilance) of 2017 imposes human rights due diligence obligations on bigger French companies and allows victims to sue for damages under the French Civil Code. The situation is similar in England. According to a Supreme Court decision of 2019 English parent companies may, under certain conditions, be held accountable for human rights violations committed by their foreign subsidiaries.

9. The introduction of an internationally mandatory human rights due diligence obligation at the level of national law certainly holds a number of advantages. In particular, it may encourage companies to take measures to prevent human rights violations through their foreign subsidiaries and suppliers. However, it is all but clear whether, under the conditions of globalization, any such obligation will actually contribute to improving the human rights situation in the countries of the Global South. This is because it will induce at least some companies to take strategic measures to avoid the costs associated with compliance. In addition, it will give a competitive advantage to companies which are domiciled in countries that do not impose comparable obligations on their companies.

10. Any human rights due diligence obligations should, therefore, not (only) be established at the national level, but also at the European or – even better – at the international level. In addition, accompanying measures should ensure that the same rules of play apply to all companies operating in the same market. And, finally, it should be clearly communicated that all these measures will increase prices for many products sold in Europe. In an open debate it will then have to be determined how much the Global North is willing to invest in better protection of human rights in the Global South.

 

Full (German) version: Giesela Rühl, Unternehmensverantwortung und (Internationales) Privatrecht, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 89 et seq.

 

Posted at the request of Sahil Verma, Managing Editor, Trade, Law and Development

General Issue

Issue 12.2 | Winter’20

The Board of Editors of Trade, Law and Development are pleased to invite original, unpublished manuscripts for publication in the Winter ’20 Issue of the Journal (Vol. 12, No. 2) in the form of ‘Articles’, ‘Notes’, ‘Comments’ and ‘Book Reviews’.

Manuscripts received by August 15th, 2020, pertaining to any area within the purview of international economic law will be reviewed for publication in the Winter ’20 issue.

Founded in 2009, the philosophy of Trade, Law and Development has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. Towards these ends, we have published works by noted scholars such as WTO DDG Yonov F. Agah, Dr. Prof. Ernst Ulrich Petersmann, Prof. Steve Charnovitz, Prof. Petros Mavroidis, Prof. Mitsuo Matsuhita, Prof. Raj Bhala, Prof. Joel Trachtman, Gabrielle Marceau, Simon Lester, Prof. Bryan Mercurio, and Prof. M. Sornarajah among others. TL&D also has the distinction of being ranked the best journal in India across all fields of law for seven consecutive years by Washington and Lee University, School of Law.

Manuscripts may be submitted via e-mail or ExpressO. For further information about the Journal, please click here. For submission guidelines, please click here.

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LAST DATE FOR SUBMISSIONS: 15 August, 2020

Written by Nico Krisch, Graduate Institute for International and Development Studies, Geneva

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The conceptual framework of jurisdictional boundaries in international law continues to be dominated by the principle of territoriality and its exceptions, even if calls for a reorientation have grown in recent years.

2. The principle of territoriality leads today to far wider jurisdictional claims than in the past, and its limits are being redefined through ‘territorial extensions’ in a number of areas.

3. These extensions are rarely questioned by states, and clear and consistent jurisdictional boundaries remain hard to define. Contestation arises primarily when states seek to use extraterritorial measures to counteract important policy choices of other states.

4. The result is a far-reaching overlap of different jurisdictional spheres which, if seen in conjunction with the multiple forms of transnational regulation existing today, leads to a multi-layered ‘jurisdictional assemblage’.

5. So far, there are no accepted rules governing the relationship of competing jurisdictional spheres in this assemblage. The effective exercise of jurisdiction depends, in large part, on the political and economic power of a country in a given issue area and market.

6. The wider options for action that result from this territorial extension allow for more effective responses to existing societal challenges, especially with a view to the provision of (national and global) public goods, albeit in a limited way.

7. The new jurisdictional regime accentuates hierarchies between countries, interferes with the autonomy of weaker states, and subverts the principle of sovereign equality. Yet under certain circumstances, it also allows actors in weaker states to compensate for their otherwise limited ability to hold multinational companies to account.

8. Existing procedural and substantive proposals only have limited promise for alleviating the tensions resulting from the power imbalance in the exercise of jurisdiction.

9. The territorial principle in the law of jurisdiction has always been sufficiently limited not to overly impede powerful states’ pursuit of their interests.

10. Territoriality today appears less as a principle of effective limitations than as the basis of different strategies and tactics through which states seek to hold mobile actors to account and through which they pursue their political aims in a global context.

 

Full (German) version: Nico Krisch, Entgrenzte Jurisdiktion: Die extraterritoriale Durchsetzung von Unternehmensverantwortung, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 11 et seq.

Written by Anatol Dutta, University of Munich

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of the contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The question of the reach of courts’ jurisdiction is highly significant for claims against transnational enterprises based on human rights violations or environmental damages abroad. It does not only determine the applicable law but also the access to a particular justice system.

2. Universal jurisdiction of national courts for human rights and environmental damages claims against enterprises cannot be established, neither on the basis of existing law nor from a legal policy perspective. Rather, such claims have to be handled under the traditional jurisdictional mechanisms.

3. From a global perspective, a remarkable shift regarding jurisdiction can be noted: Whereas the courts in the United States are increasingly limiting access to their justice system in cases with foreign elements, jurisdictional limits are no significant hurdle for human rights and environmental damages claims in the European Union.

4. Domestic enterprises can be sued at their seat. Yet, the forum non conveniens doctrine allows US courts – and perhaps soon English courts as well – to decline jurisdiction, also for human rights and environmental damages claims.

5. Yet, human rights and environmental damages claims against foreign enterprises can also only be brought under certain circumstances in the EU.

6. Claims against foreign enterprises for human rights violations and environmental damages abroad can only rarely be brought before domestic courts based on special jurisdiction related to specific subject matters, for example the jurisdiction for tort claims at the place where the harmful event occurred.

7. If human rights and environmental damages claims are simultaneously directed against a domestic enterprise, for example a mother company or a buyer company in the EU, at least partially, foreign subsidiaries and suppliers can be sued on the basis of special jurisdiction over multiple defendants which can be used strategically.

a) If foreign enterprises have their seat in a third State outside the European Union, the jurisdiction of the domestic courts over the foreign co-defendant is governed by the national law of the forum Member State.

b) However, the current trend to establish a separate liability of domestic enterprises, for example, by extending human rights and environment-related duties of care for the supply chain, could endanger this special jurisdiction over multiple defendants, which, on the other hand, could lose significance.

8. Extending the general jurisdiction at the domicile of the defendant by relying on a personal criterion different to the seat of the defendant enterprise is not a viable solution.

a) Today US courts refuse to exercise jurisdiction based solely on the foreign enterprise ‘doing business’ within the territory. In some EU Member States, for claims against foreign enterprises at least with a seat in a third State, exorbitant jurisdiction can be established, for example, based on assets of the foreign defendant enterprise within the territory.

b) At the most from a policy perspective, for claims against foreign subsidiaries of a domestic enterprise the introduction of an enterprise jurisdiction could be considered.

9. For claims against foreign enterprises jurisdiction of the domestic courts can often only be based on a forum necessitatis if proceedings cannot reasonably and effectively be brought or conducted abroad; the hurdles for such an exceptional jurisdiction are, however, high.

10. To hear human rights and environmental damages claims against enterprises lies within the powers of the domestic courts.

a) Foreign enterprises do not enjoy State immunity even if they violate human rights or damage the environment abroad in collaboration with foreign States.

b) The power to adjudicate is also not limited by the fact that a decision of the court on human rights and environmental damages claims potentially has implications on the foreign policy relations of the forum State.

c) The domestic courts are often even not barred from deciding on human rights and environmental damages claims of foreign States against enterprises.

 

Full (German) version: Anatol Dutta, Internationale Zuständigkeit für privatrechtliche Klagen gegen transnational tätige Unternehmen wegen der Verletzung von Menschenrechten und von Normen zum Schutz der natürlichen Lebensgrunlagen im Ausland, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 39 et seq.

In April 2019 the German Society of International Law (Deutsche Gesellschaft für Internationales Recht) held its 36th biannual conference at the University of Vienna. Organised by August Reinisch (University of Vienna) in cooperation with Eva Maria Kieninger (University of Würzburg) and Anne Peters (Max Planck Institute Heidelberg), the conference  discussed the concept of „Corporate social responsibility“ from both a public and a private international law perspective. Presentations were given by Tanja Domej (University of Zurich), Oliver Dörr (University of Osnabrück), Anatol Dutta (University of Munich), Peter Hilpold (University of Innsbruck), Stefan Huber (University of Tübingen), Nico Krisch (Graduate Institut of Geneva), Giesela Rühl (University of Jena/Humboldt-University of Berlin) and Silja Vöneky (University of Freiburg).

Over the course of the next days conflictoflaws.net will present the main findings of the contributions in a series of blogposts. The full (German) contributions can be found in the conference proceedings that have just been published by C.F. Müller.

The Choice of Court Convention is already close to its 5th year of application. Case law is still scarce. A Greek court tackled with the question, whether to apply the Convention or not. It decided that it should apply, but at the end it considered that the agreement was asymmetric, therefore outside the scope of the Convention.

 

THE FACTS

The claimant is a ship owner company registered in Monrovia, Liberia. While the claimant’s ship was on its way to Novorossiysk, Russia, the claimant agreed with a company registered in Hong Kong [defendant], having however a branch in Piraeus, to buy a quantity of petrol, to be delivered at the port of the Russian city. A few days later, both the ship and the fuel were in Novorossiysk. During bunkering, the 1st engineer of the ship requested the interruption of the supply. He was suspicious that petrol was not of the agreed quality. A technical inspection a couple days later proved that the engineer was right. As a result, litigation ensued before the Piraeus courts. The defendant did not challenge the court’s international jurisdiction. At the same time, he filed an interpleader action against the petrol supplier. The latter, a company registered in Monaco, challenged the jurisdiction of the Greek court, by invoking a choice of forum agreement between the parties, stipulated on the invoice issued as a standard term of the deal.

 

THE RULING

The court engaged in a thorough analysis of the issue: It confirmed that the agreement was falling under the scope of the convention both ratione temporis and ratione materiae. The agreement was signed after the entry into force of the Convention (1/10/2015) and concerned a genuinely commercial dispute. It then examined the content of the choice of forum clause, and considered that the agreement was asymmetric, i.e. unilaterally in favor of the seller, and to the detriment of the buyer. As a second step, the court found that the Brussels Ia Regulation was also not applicable, because the conditions provided by Article 25, lit. a – c were not met. Following the above, the court resumed to domestic provisions of the Greek Code of Civil Procedure, in order to establish its international jurisdiction (Article 31, similar actions).

 

COMMENT

The wording of the choice of court clause reads as follows: The contract is governed by English law; the contracting parties accept the exclusive jurisdiction of English courts for the resolution of any dispute related to the present contract [translated by the author]. I don’t think I need to say anything here; there’s nothing asymmetric in this clause. I will just reproduce a passage from the Explanatory Report prepared by Professors Hartley and Dogauchi:

105 Asymmetric agreements. Sometimes a choice of court agreement is drafted to be exclusive as regards proceedings brought by one party but not as regards proceedings brought by the other party. International loan agreements are often drafted in this way. A choice of court clause in such an agreement may provide, “Proceedings by the borrower against the lender may be brought exclusively in the courts of State X; proceedings by the lender against the borrower may be brought in the courts of State X or in the courts of any other State having jurisdiction under its law.”

 

The final point I want to make is that the court shouldn’t go that far with the examination of the matter. As mentioned above, the parties in question were registered in Hong Kong and Monaco. Both countries are not signatory members to the Hague Convention. Hence, the analysis was unnecessary.

 

Conclusion: Bad publicity is still publicity. There are of course drawbacks in the court’s analysis; still, on the other side, it is very fortunate that the court examined the facts from the Hague Convention’s point of view too. The worst case scenario would have been to ignore completely the Convention’s existence, which regrettably occurs occasionally, both for Hague Conventions and sometimes for EU Regulations as well.

 

[Piraeus Court of First Instance nr. 3106/2019, available (in Greek) here]

Today, the ECJ decided in case C-641/18 –  LG and Others v. Rina SpA, Ente Registro Italiano Navale, on the concepts of ‘civil and commercial matters’ and ‘administrative matters’ under Article 1 Brussels I Regulation.

The case arose from the following facts:

14      LG and Others — relatives of the victims and survivors of the sinking of the Al Salam Boccaccio’98 vessel in the Red Sea on 2 and 3 February 2006, in which more than 1 000 people lost their lives — brought an action before the Tribunale di Genova (District Court, Genoa, Italy) against the Rina companies — ship classification and certification societies — whose seat is in Genoa.

15      LG and Others claim compensation for the pecuniary and non-pecuniary losses stemming from the Rina companies’ civil liability, arguing that the classification and certification operations for the Al Salam Boccaccio’98 vessel, carried out by the Rina companies under a contract concluded with the Republic of Panama, for the purposes of obtaining that State’s flag for that vessel, were the cause of that sinking.

16      The Rina companies contend that the referring court lacks jurisdiction, relying on the international-law principle of immunity from jurisdiction of foreign States. In particular, according to those companies, the classification and certification operations which they conducted were carried out upon delegation from the Republic of Panama and, therefore, are a manifestation of the sovereign powers of the delegating State.

17      According to LG and Others, by contrast, given that the Rina companies have their seat in Italy and the dispute at issue in the main proceedings is civil in nature, within the meaning of Article 1 of Regulation No 44/2001, the Italian courts have jurisdiction under Article 2(1) of that regulation. In addition, LG and Others submit that the plea of immunity from jurisdiction, relied on by the Rina companies, does not cover activities that are governed by non-discretionary technical rules which are, in any event, unrelated to the political decisions and prerogatives of a State.

18      The referring court raises the question of the jurisdiction of the Italian courts in so far as, while it is common ground that the Rina companies have their seat in Italy, it is claimed that they acted upon delegation from the Republic of Panama.

19      In that regard, the referring court refers, in its request for a preliminary ruling, to the case-law of the Corte costituzionale (Constitutional Court, Italy) and of the Corte Suprema di Cassazione (Supreme Court of Cassation, Italy) concerning immunity from jurisdiction. In accordance with the case-law of those supreme courts, recognition of immunity from jurisdiction is precluded only in respect of the acts of foreign States consisting in war crimes and crimes against humanity or where such recognition undermines the principle of judicial protection.

The Court held that

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that an action for damages, brought against private-law corporations engaged in the classification and certification of ships on behalf of and upon delegation from a third State, falls within the concept of ‘civil and commercial matters’, within the meaning of that provision, and, therefore, within the scope of that regulation, provided that that classification and certification activity is not exercised under public powers, within the meaning of EU law, which it is for the referring court to determine. The principle of customary international law concerning immunity from jurisdiction does not preclude the national court seised from exercising the jurisdiction provided for by that regulation in a dispute relating to such an action, where that court finds that such corporations have not had recourse to public powers within the meaning of international law.

The full text of the judgment is here.

The CoL post on the Opinion of Advocate General Szpunar in this case is here.

The Organization of American States (OAS) has announced that it is launching a weekly virtual forum entitled “Inter-American law in times of pandemic”.  It begins on Monday 11 May at 11:00 am (EDT, local time in Washington, D.C.).  The first session “Challenges to Inter-American Law” will be held in Spanish, with no simultaneous interpretation. Registration is free but space is limited. The agenda is available here.

As announced, “the topics to be discussed in relation to the impact of the pandemic in the Americas will include: the challenges to Inter-American law; the importance of access to public information; protection of privacy and personal data; the fight against corruption; legal cooperation against cyber-crime; food security as a specific challenge; the difficulties for private international law; among others.”

The list of virtual fora is available here. On Monday 29 June 2020, a forum will be held on “New Challenges for Private International Law.” Apparently, the sessions will be recorded and will be available on video later on the OAS website.

In addition, the Hague Conference on Private International Law (HCCH) has published a COVID-19 Toolkit, which is available in both English and French.

By Stephen G.A. Pitel, Faculty of Law, Western University

Instrubel, N.V., a Dutch corporation, has been attempting in litigation in Quebec to garnish assets of the Republic of Iraq.  The difficult issue has been the nature of the assets sought to be garnished and where they are, as a matter of law, located.  The assets are funds in a bank account in Switzerland payable to the Republic of Iraq (through the Iraqi Civil Aviation Authority) by IATA, a Montreal-based trade association.

The judge at first instance held the assets were not a debt obligation but in effect the property of the Republic of Iraq and located in Switzerland and so could not be subject to garnishment in Quebec proceedings.  The Court of Appeal reversed, holding the assets were a debt due to the Republic of Iraq which it could enforce against the trade association at its head office in Quebec, so that the debt was located in Quebec under the basic rule for locating the situs of a debt.

Last December the Supreme Court of Canada denied the appeal for the reasons of the Quebec Court of Appeal.  One judge, Justice Cote, dissented with reasons to follow.  On May 1, 2020, she released those reasons: see International Air Transport Association v. Instrubel, N.V., 2019 SCC 61 (available here).

As a Quebec case, the decision is based on the civil law.  Justice Cote’s dissent hinges on the view that the funds in the account are the property of the Republic of Iraq, not the IATA, and are merely being held by the latter before being remitted to the former (see para. 36).  The funds are not part of the “patrimony” of the IATA.  This is because the nature of the agreement between the Republic of Iraq and the IATA is one of “mandate” (see paras. 40-41 and 45).  As Justice Cote notes (at para. 48) “there is a general principle in the law of mandate that a mandatary’s obligation towards a mandator is not a debt”.  While the payments that went into the bank account were collected and held by the IATA, they were made to the Republic of Iraq (para. 53).  Indeed, the account “is for practical purposes equivalent to a trust account” (para. 61).

As noted, the six judges in the majority simply adopted the reasons of the Quebec Court of Appeal (available here).  So they did not directly engage with Justice Cote’s reasons.  The Court of Appeal concluded (at para. 41) that “there is no ownership of or real right to the funds … Rather, there is a creditor/debtor relationship”.  It also observed that the Republic of Iraq “never owned the debts due it by various airlines in consideration of landing at Iraqi airports.  It does not now own the funds collected in satisfaction of those debts and deposited by IATA in its bank account.  IATA’s obligation is to pay a sum of money not to give the dollar bills received from third parties” (para. 43).

The Court of Appeal noted (at para. 50) a practical rationale for its conclusion: “More significantly it seems that [Instrubel, N.V.] and others in similar positions which seek to execute an unsatisfied claim would be forced into an international “shell game” of somehow discovering (or guessing) where the mandatary/garnishee (IATA), deposited the money – a virtually impossible task.  The law, correctly applied, should not lead, in my view, to such unworkable results.  As the in personam debtor of ICAA, it matters not whether IATA deposited the money it collected and giving rise to such indebtedness in a bank account in Geneva, New York or Montreal.  The situs of its bank account does not change the situs of the debt IATA owes to its creditor.  As such, that funds were initially collected in Montreal or at an IATA branch office in another country is inconsequential.”

The case is at minimum important for what it does not do, which is authorize the garnishing of assets outside Quebec.  All judges take the position that would be impermissible.

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Pedro de Miguel Asensio from the Universidad Complutense de Madrid has published a book on Conflict of laws and the Internet. The publisher’s blurb reads as follows: . The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution. . Key features include:

• comprehensive analysis of the complex conflict of laws issues that arise in connection with Internet activities
• discussion on the jurisdiction of national courts and the determination of applicable law
• a European perspective on the relationship between Internet Law and Private International Law (PIL)
• consideration of the cross-border effects of judgments in all major fields of PIL affected by the Internet.

Conflict of Laws and the Internet will be a vital resource for practitioners and policy-makers alike with applications for IT law experts and companies active in e-commerce. Providing a strong doctrinal base for an area of ever increasing importance and attention, this book will also be a valuable reference for academics working in the fields of IT law and PIL.

Additional information plus access to its detailed table of contents are available here.

The latest issue of the Italian Journal Diritto del commercio internazionale (34.1/2020) features an article (in English) on “Brexit and Cross-Border Insolvency Looking Beyond the Withdrawal Agreement” written by Antonio Leandro (University of Bari).

The abstract of the article reads as follows: “The UK and the EU have concluded the Withdrawal Agreement which officially triggers the so-called Brexit. However, the real effects of the Brexit still are unclear, at least as regards the future following the end of the transition period provided for by the Withdrawal Agreement during which the UK will be treated as if it were a Member State. After the transition period, mini hard Brexit(s) are in fact likely for matters currently governed by the EU Law that the Parties will not want to relocate in new legal frameworks, such as bilateral treaties. The paper addresses the consequences of a mini hard Brexit for cross-border insolvency proceedings involving the UK and the Member States with the aim to explain why this specter should be avoided”.

Today, Advocate General Szpunar delivered his Opinion in Case C-253/19 – MH, NI v. OJ, Novo Banco SA. As is generally known, Article 3 of Regulation 2015/848, entitled ‘International jurisdiction’, provides in paragraph 1:

‘The courts of the Member State within the territory of which the centre of the debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings (“main insolvency proceedings”). The centre of main interests shall be the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.

In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary. That presumption shall only apply if the registered office has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.

In the case of an individual exercising an independent business or professional activity, the centre of main interests shall be presumed to be that individual’s principal place of business in the absence of proof to the contrary. That presumption shall only apply if the individual’s principal place of business has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.

In the case of any other individual, the centre of main interests shall be presumed to be the place of the individual’s habitual residence in the absence of proof to the contrary. This presumption shall only apply if the habitual residence has not been moved to another Member State within the 6-month period prior to the request for the opening of insolvency proceedings.’

As the Opinion explains (paras. 4 et seq.):

4. The applicants are married to each other and, since 2016, have been resident in Norfolk (United Kingdom), where they are engaged in paid employment. The couple made a request to the Portuguese courts to declare them insolvent. The court of first instance declared that it did not have international jurisdiction to rule on their request, holding that, under the fourth subparagraph of Article 3(1) of Regulation 2015/848, the centre of their main interests was their place of habitual residence, namely the United Kingdom.

5. The applicants brought an appeal against that judgment before the referring court, claiming that it was based on a misinterpretation of the rules laid down by Regulation 2015/848. In that regard, they submitted that, in so far as the sole immovable asset that they owned was located in Portugal, where all the transactions which gave rise to their insolvency had occurred, the centre of their main interests was not their place of habitual residence (United Kingdom), but was located in Portugal. Moreover, they claimed that there is no connection between their current place of residence and the events that led to their insolvency, which occurred entirely in Portugal.

6. The referring court has doubts as to the correct interpretation of Article 3(1) of Regulation 2015/848 and is uncertain, in particular, of the criteria to be used for the purpose of rebutting the simple presumption laid down in that provision for natural persons not exercising an independent business or professional activity, according to which, for such persons, the habitual residence of the concerned party is presumed to be the centre of that party’s main interests in the absence of proof to the contrary.

7. In that regard, the referring court points out that recital 30 of that regulation states that, in the case of natural persons not exercising an independent business or professional activity, it should be possible to rebut that presumption, for example where the major part of the debtor’s assets is located outside the Member State of the debtor’s habitual residence.

AG Szpunar proposed (paras. 65 et seq.) that the Court should answer the question referred for a preliminary ruling by the Tribunal da Relação de Guimarães (Court of Appeal, Guimarães, Portugal) as follows:

Article 3(1), first and fourth subparagraphs, of Regulation (EC) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings must be interpreted as meaning that the presumption that the habitual residence of a debtor who is a natural person not engaged in a self-employed activity is the centre of his main interests may be rebutted if the place of habitual residence does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of his revenue is earned and spent, or as the place where the major part of his assets is located.

However, that presumption cannot be rebutted in favour of the Member State within the territory of which a debtor’s sole immovable asset is located in the absence of any other indication that the centre of that debtor’s main interests is located in that Member State. That fact may be determined on the basis of objective factors which are ascertainable by third parties (current and potential creditors) and relate to the financial interests of that debtor.

by Marie Elaine Schäfer

The cross-border expansion of EU companies’ economic activities not only leads to a globalised market, but also impacts human rights as well as the environment in countries worldwide. The recent rise of claims against EU companies for the violations committed by their subsidiaries located in third countries is a by-product of that context. With Germany being the world’s third largest importing country, the question of corporate responsibility for harmful events abroad is crucial. The present post provides an overview of the most recent legal developments on that topic.

“National Action Plan” and voluntary principle

The central aspect of Germany’s approach to prevent human rights violations and environmental damages caused by German companies’ foreign subsidiaries is a voluntary – as opposed to binding – principle.

In 2016, the German Government adopted the “Nationaler Aktionsplan Wirtschaft und Menschenrechte” (National Action Plan on Business and Human Rights) to implement the UN guiding principles on Business and Human Rights (Ruggie Principles). This fixed framework is the first of its kind in Germany. The objective of the National Action Plan is to delineate German enterprises’ responsibility to protect human rights: at least 50 per cent of all large companies in Germany (with more than 500 employees) have to implement a system of human rights due diligence by 2020. Accordingly, “[c]ompanies should publicly express their willingness to respect human rights in a policy statement, identify risks, assess the impact of their activities on human rights, take countermeasures if necessary, communicate how they deal with risks internally and externally and establish a transparent complaints mechanism” (see the Report on the National Action Plan).

An inter-ministerial committee (on business and human rights), formed by the Government under the auspices of the German Federal Foreign Office, monitors the status of implementation of human rights due diligence. However, any tangible measures remain optional for companies and inaction entails no consequences yet.

KiK litigation

German courts faced the question of companies’ liability to some extent in the KiK litigation, which ended with a judgment issued by the Court of Dortmund (Germany) in 2019.

The facts of that case are the following: the German textile importer and reseller KiK Textilen and Non-Food GmbH (hereafter, KiK) is listed amongst the ten largest providers in the German textile industry and has over 28.000 employees. In September 2012, 259 people died in a fire in a textile factory in Pakistan and 47 more were injured. The main buyer of the factory’s goods was KiK. In 2015, relatives of three of the deceased victims and one of the injured workers himself started proceedings against KiK in the Regional Court of Dortmund for damages of 30.000 € each for suffering and the death of the deceased victims.

The court ruled that, based on Art. 4(1) of the Rome II Regulation, Pakistani law was applicable. In the main proceedings, that court retained expert evidence on Pakistani Law and dismissed the lawsuit due to the Pakistani limitation period for such claims that ended even before the proceedings in Germany had started. For further general discussion on Article 4(1) of the Rome II Regulation as well as on the potential relevance of Article 4(3) Rome II Regulation see here.

According to the further holdings of the court, the claimants could alternatively hold KiK liable for the events in Pakistan, had an acknowledgement of liability been written. However, KiK had agreed on a code of conduct with the supplier, which the court and the expert on Pakistani law evaluated as an agreement to compensate on an ex gratia basis and not as an acknowledgement of liability. Furthermore, the court stated that, even if German law was applicable, a code of conduct would then, at most, lead to a legal binding agreement between KiK and the supplier. The suppliers’ employees could not file any direct claims against KiK based on the supply contract and the code of conduct, which cannot be seen as a contract to the benefit of a third party under German law (supplementary interpretation of the contract).

In light of this, it is questionable how long the voluntary principle will remain the leading path in Germany’s approach to deal with expanding supply chains and the challenges for both environmental and human rights standards.

Current legislative developments

An alliance of non-governmental institutions (similar to the coalition that launched the Swiss initiative populaire “entreprises responsables – pour protéger l’être humain et l’environnement” in 2016) has formed the “Initiative Lieferkettengesetz” (Supply chain Law Initiative) with the intention of establishing binding obligations as they can be found in the French Duty of Vigilance Law (“loi n°2017-399 relative au devoir de vigilance des sociétés mères et entreprises donneuses d’ordre”). Accordingly, German companies shall establish diligence plans to protect human rights and the environment in the states where their subsidiaries are located. Violations of diligence would lead to sanctions in form of shortening of government aids and high fines. In order to ensure the companies’ liability for violations in German courts, the law would be formed as an overriding mandatory provision in the sense of Art. 9(1) of the Rome I Regulation.

Applied to the KiK litigation, the problem does not only lie within the applicability of German law. As the Court of Dortmund ruled, only a written acknowledgement of liability would enable employees to start proceedings. Since a mandatory system of due diligence would likely take the form of codes of conduct rather than acknowledgements of liability, violations of German law would lead to the sanctioning of the companies but would not offer a cause of action to suppliers’ employees against the German enterprises.

Even though the enactment of a supply chain law remains highly disputed within the government, recent developments show that a change towards binding obligations may be on its way.
The ministers of labour and of development are of the opinion that the voluntary principle does not lead to the desired result, since only about 20 per cent of the companies affected by the National Action Plan have carried out human rights due diligence in 2019. According to Gerd Müller, the minister of development, legislation will follow if a second survey in 2020 does not show any improvement.

In addition to that, in 2019, more than 40 German companies, ranging from larger enterprises, such as Nestlé Germany to Start-Ups, publicly demanded binding obligations to ensure legal certainty and equal competitive competitions.

As shown, German Companies’ responsibility is a question of voluntary implementation of the National Action Plan. In light of the KiK litigation, employees’ proceedings against enterprises will likely have no success, although legislation in this field may lead to higher standards that enterprises then would have to impose to their suppliers abroad.

Still, the introduction of legislation remains uncertain as the result of a second survey on the National Action Plan’s implementation will determine upcoming developments and the future of the German voluntary principle.

As was reported on this blog here, the Munich Dispute Resolution Day on 5 May 2020 was going to focus on “Human Rights Lawsuits before Civil and Arbitral Courts in Germany”, but Covid-19 forced the organisors to reschedule.

Marie Elaine Schäfer, Student Research Assistant at the University of Bonn, Germany

 

by Nadia Rusinova

The coronavirus will have an enormous impact on how we consume, how we learn, how we work, and how we socialize and communicate. It already significantly impacts the functioning of the justice system – the COVID-19 pandemic and social distancing requirements have required courts to be flexible and creative in continuing to carry out essential functions.

Six weeks ago, it was almost difficult to imagine that in a regular child-related proceeding the hearing could be conducted online, and that the child can be heard remotely. Is this the new normal in the global justice system? This post will first provide brief overview regarding the developments in the conduction of remote hearings, and discuss the limitations, but also the advantages, of the current procedures related to children. Second, it will touch upon the right of the child to be heard in all civil and administrative proceedings which concern its interest, pursuant to Article 12 of the United Nations Convention on the Rights of the Child and how this right is regarded in remote proceedings in the context of the COVID-19 situation. It will also highlight good practices, which are without doubt great achievements of the flexibility and adaptability of the professionals involved in child-related civil proceedings, which deserve to be appreciated and which may provide grounds for significant change in the future (e.g. by using remote tools much more often.)

In civil and administrative proceedings, which concern children, strict insistence on personal attendance is unlikely to be feasible during the Coronavirus pandemic, and may contravene current health guidance, putting both families and professionals at unacceptable risk. As a consequence, the number of children’s hearings scheduled to take place during the Coronavirus pandemic have globally been reduced to only those required to ensure essential and immediate protection of children or to consider orders relating to restriction of liberty. So long as restrictions regarding social distancing remain in place all over the world, many children’s hearings in the next months will be conducted remotely and digital facilities are being put in place to enable a wide range of people to participate remotely in virtual hearings.

I. What the recent experience on the remote hearings shows

 Worldwide, over the past month, thousands of hearings took place remotely, many of them concerning children. How did the authorities comply with the current challenges and also with the right of the child to express its views?

Some countries, like Scotland, issued special rules as an amendment to the existing national law.  In the context of the emergency, the provisions in the Coronavirus Act 2020 Guidance on looked-after children and children’s hearings provisions, issued by the Scottish Parliament as an update to the Coronavirus (Scotland) Bill, are designed to enable best use of very limited resources by local authorities, and the children’s hearings system, so that efforts can be focused on safeguarding the welfare of Scotland’s most vulnerable children, and on supporting families and careers who need it most. The provisions are also time-limited and will automatically expire within six months, unless the Scottish Parliament extends them for a further period of six month.

The American Bar Association has also prepared detailed rules on “Conducting Effective Remote Hearings in Child Welfare Cases” to  distill some best practices and other recommendations for remote or “virtual” hearings, providing special considerations to the judges, and directions for all professionals dealing with child-related proceedings.

The case law of the domestic courts is not less intriguing. In one recent judgment of The Family Court of England and Wales – RE P (A CHILD: REMOTE HEARING) [2020] EWFC 32, delivered by Sir Andrew McFarlane, the issues surrounding the advantages and disadvantages of the remote hearing when the case concerns children are discussed in a very original way. The case concerns ongoing care proceedings relating to a girl who is aged seven. The proceedings are already one year old and they were issued as long ago as April 2019, but the possibilities for multiple appeals in the adversarial proceedings caused immense delay. It has been initiated by the local authority, which have made a series of allegations, all aimed at establishing the child has been caused significant harm as a result of fabricated or induced illness by its mother. The allegations are all fully contested by the mother, and a full final hearing is to take place in order to be decided if the child should be return to its mother or placed in long term foster care. Since April 2019 the child has been placed in foster care under an interim care order. The 15-day hearing was scheduled to start on Monday, 20 April, but the Covid-19 pandemic has led to a lockdown and most Family Court hearings that have gone ahead are being undertaken remotely, over the telephone or via some form of video platform.

II. Challenges

In this light it might be useful to identify some of the issues that the justice system faced in the attempts to comply with the special measures amid the pandemic and the lockdown order in disputes about children.

Must a hearing take place remotely, or this is just an option to be decided on by the court?

All the guidance available aims mostly at the mechanics of the process. The question whether any particular hearing should, or should not, be conducted remotely, is not specifically discussed. In any case, the access to justice principle should in some way provide for flexibility and practicability. In this sense, the fact that a hearing can be conducted remotely, does not in any way mean that the hearing must be conducted in that way.

As Sir McFarlane said, “In pushing forward to achieve Remote Hearings, this must not be at the expense of a fair and just process.” Obviously, the question is how to strike a fair balance between keeping the principle of fair trial as paramount while not putting the child into an intolerable situation that might follow as a consequence of the limitations in this pandemic situation.

In which cases it is justified to hold a remote hearing?

Given the Government’s imposition of the ‘stay at home’ policy in many countries, requests for an attended hearing are highly unlikely to be granted unless there is a genuine urgency, and it is not possible to conduct a remote hearing, taken as a cumulative condition together. If one of these elements is not present, the respective judge should assess the emergency in the particular case.

In general, all cases are pressing when the welfare of children is to be determined. However, some of it indeed call for urgency and it is to be analyzed on a case by case basis, in accordance with the claims of the parties and available evidence. In the discussed case RE P [2020] EWFC 32 the girl was already suffering significant emotional harm by being held “in limbo”, and that she could only be released from this damaging situation of simply not knowing where she is going to live and spend the rest of her childhood, at least for the foreseeable future, by the court decision. As the judge says, “she needs a decision, she needs it now and to contemplate the case being put off, not indefinitely but to an indefinite date, is one that (a) does not serve her interests, because it fails to give a decision now, but (b) will do harm itself because of the disappointment, the frustration and the extension of her inability to know what her future may be in a way that will cause her further harm.”

Another issue to be considered is to which extent the personal impression (for which the face-to-face hearing is best suited to) and the physical presence in the courtroom as a procedural guarantee for fair trial in adversarial proceedings, are decisive in the particular case. In RE P [2020] EWFC 32 sir McFarlane holds that “The more important part, as I have indicated, for the judge to see all the parties in the case when they are in the courtroom, in particular the mother, and although it is possible over Skype to keep the postage stamp image of any particular attendee at the hearing, up to five in all, live on the judge’s screen at any one time, it is a very poor substitute to seeing that person fully present before the court.” This is a case for protection from violence, and taking into account the subjective aspect, the personal impression is crucial. Yet, it might be that other type of cases, with less impact on the life of the child, or when the balance between the urgency and the importance of personal attendance might affect the best interest of the child ,might still be held remotely. In the discussed case the judge refers explicitly to the need of the physical presence of the parties, and especially of the mother, for him to get personal impression, and to give her full opportunity to present her defense and to ensure fair trial. The Court therefore finds that a trial of this nature is simply not one that can be contemplated for remote hearing during the present crisis. It follows that, irrespective of the mother’s agreement or opposition to a remote hearing, the judge holds that this hearing cannot “properly or fairly” be conducted without her physical presence in a courtroom.

A similar approach (with different outcome) has been taken in Ribeiro v Wright, 2020 ONSC 1829, Court of Ontario, Canada. The parties, currently in the process of divorce, and the plaintiff wishes to obtain a safeguard order so that the defendant’s access rights are modified such that they are suspended and replaced by contacts via technological means (Skype, Facetime, etc.). Due to the ongoing divorce procedure at the stage of the application for the safeguard order, some evidence is available already. The judge recognizes that the social, government and employment institutions are struggling to cope with COVID-19 and that includes the court system. Obviously, despite extremely limited resources, the court will always prioritize cases involving children, but it is stated that parents and lawyers should be mindful of the practical limitations the justice system is facing. If a parent has a concern that COVID-19 creates an urgent issue in relation to a parenting arrangement, they may initiate an emergency motion under the domestic law – but they should not presume that raising COVID-19 considerations will necessarily result in an urgent hearing. In this case the judge refuses to start emergency proceeding (which would be conducted remotely), takes into account the behavior of the parents and urge them to renew their efforts to address vitally important health and safety issues for their child in a more conciliatory and productive manner, asking them to return to court if more serious and specific COVID-19 problems arise.

In order to determine some general criteria to be applied when the emergency assessment is to be done, a good general example can be seen in the Coronavirus Act 2020 Guidance on looked-after children and children’s hearings provisions (Scotland). The Scottish Government seeks to empower professional staff and volunteer tribunal members to exercise sound judgment and make decisions to protect and support children and young people, based on available information and in partnership with families. It provides that this exercise of emergency powers should: i. be underpinned by a focus on children’s, young people’s, and families’ human rights when making decisions to implement powers affecting their legal rights; ii. be proportionate – limited to the extent necessary, in response to clearly identified circumstances; iii. last for only as long as required; iv. be subject to regular monitoring and reviewed at the earliest opportunity; v. facilitate, wherever possible and appropriate, effective participation, including legal representation and advocacy for children, young people and family members, and vi. be discharged in consultation with partner agencies.

Furthermore, in the Scottish Children’s Reporter Administration update paper on Children’s Hearings System, issued on 20 April 2020, it is stated that  the reporter assesses and considers each individual child’s case and their unique circumstances, and the panel makes the best possible decision based on the information before them. Priority is given to hearings with fixed statutory timescales, or to prevent an order from lapsing. The UK Protocol Regarding Remote Hearings, issued on 26 March 2020, also sets some general criteria in par. 12 applicable to child-related proceedings, stating that it will normally be possible for all short, interlocutory, or non-witness, applications to be heard remotely.  Some witness cases will also be suitable for remote hearings.

What form the “remote” hearing may take?

There is currently no ‘single’ technology to be used by the judiciary. The primary aim is to ensure ongoing access to justice by all parties to cases before the court, so the professionals and parties involved must choose from a selection of possible IT platforms (e.g. Skype for Business, Microsoft Teams, Zoom, etc.) At present, many courts provide laptops to magistrates with secure Skype for Business and Microsoft Teams installed.

Remote hearings may be conducted using any of the facilities available. Generally, it could be done by way of an email exchange between the court and the parties, by way of telephone using conference calling facilities, or by way of the court’s video-link system, if available. In the specific child related proceedings however, it should be noted that the UN General comment No. 12 (2009) on the right of the child to be heard sets one recommendation in par. 43 – the experience indicates that the situation should have the format of a talk rather than a one?sided examination. Therefore, the use of tools allowing conversational approach, like Skype for Business, BT MeetMe, Zoom, FaceTime or any other appropriate means of remote communication can be considered. If other effective facilities for the conduct of remote hearings are identified, the situation obviously allows for any means of holding a hearing as directed by the court, so there is considerable flexibility.

The timing of the hearing of the child

Naturally, if there are rules in place regarding the timely hearing of the child, in the current situation some adjustments could be accepted. In the domestic systems, when such provisions exist, respective temporary amendments could be a solution to facilitate the activity in these very challenging circumstances.

If we look again at the Coronavirus Act 2020 Guidance on looked-after children and children’s hearings provisions, it provides for situations where it will not be practicable for there to be a hearing within three working days (as prescribed by the law), due to the likely shortage of social workers, reporters, decision-makers, children and families to attend an urgent hearing in the new area. As a result, the Act amends the time limit for some particular proceedings involving children up-to seven days. It is duly noted that in order to avoid unnecessary delays, the respective professionals involved should note these extended timescales, and prepare accordingly.

Is the objection by the parties to the hearing being held remotely decisive?

The pandemic situation is very potentially convenient for the parties who seek delays for one reason or another. As an example, the passage of time could undoubtedly affect the court’s decision to assign custody in parental disputes, or as pointed by the ECtHR in Balbino v. Portugal, the length of proceedings relating to children (and especially in child abduction proceedings) acquire particular significance, since they are in an area where a delay might in fact settle the problem in dispute.

The objections that deserve attention would be most likely based on two grounds: health reasons, related or not to COVID-19, and the technical issue of internet access. When we speak about health reasons, the first logical suggestion would be to request medical evidence. Sadly, in the coronavirus situation this is not the case – simply because one can have contracted it without any knowledge or symptoms, which puts the courts in difficult position having in mind the considerable danger if they take the wrong decision. Therefore, it is justified that the judges continue with the proceedings and do not accede to these kinds of applications, but to indicate that the party’s health and the resulting ability to engage in the court process would be kept under review.

Regarding internet access, this might arise as a difficult issue. On one side, it is easy to say that the arrangements for the party to engage in the process, as they are currently understood, involve the party being in her/his home and joining the proceedings over the internet, and all that’s needed is some basic internet access. It can be also said that the party can go to some neutral venue, maybe an office in local authority premises, a room in a court building, and be with an attorney that they are instructing, keeping a safe socially isolated distance. However, for objective reasons the internet access available might be not sufficient, and this should not lead to a violation of the principle of a fair trial, and the judge should also take these considerations seriously.

How is security and transparency addressed?

This section will briefly touch upon only two of a multitude of issues related to the security and transparency when dealing with remote hearings – the open hearings principle and the recording of the hearing.

Obviously, all remote hearings must be recorded for the purposes of making records of the respective hearing, and it goes without saying that the parties may not record without the permission of the court. Some of the solutions might be recording the audio relayed in an open court room by the use of the court’s normal recording system, recording the hearing on the remote communication program being used (e.g. BT MeetMe, Skype for Business, or Zoom), or by the court using a mobile telephone to record the hearing.

As to the second issue, remote hearings should, so far as possible, still be public hearings. Some of the proceedings concerning children are indeed not public, but this is not the rule. The UK Protocol Regarding Remote Hearings addresses how this can be achieved in times of pandemic: (a) one person (whether judge, clerk or official) relaying the audio and (if available) video of the hearing to an open court room; (b) allowing a media representative to log in to the remote hearing; and/or (c) live streaming of the hearing over the internet, where broadcasting hearings is authorized in legislation. This way, the principles of open justice remain paramount.

It could be suggested that, in established applications moving to a remote hearing, any transparency order will need to be discharged and specific directions made. In the UK Court of protection remote hearings  the authorities are satisfied that, to the extent that discharging the order in such a case engages the rights of the press under Article 10 ECHR, any interference with those rights is justified by reference to Article 10(2), having particular regard to the public health situation which has arisen, and also the detailed steps set out are designed to ensure that the consequences on the rights of people generally and the press in particular under Article 10 are minimized.

III. How to assess if a particular child-related hearing is suitable to take place online?

As noted by Sir McFarlane, whether or not to hold a remote hearing in a contested case involving the welfare of a child is a particularly difficult one for a court to resolve. A range of factors are likely to be in play, each potentially compelling but also potentially at odds with each other. The need to maintain a hearing in order to avoid delay and to resolve issues for a child in order for its life to move forward is likely to be a most powerful consideration in many cases, but it may be at odds with the need for the very resolution of that issue to be undertaken in a “thorough, forensically sound, fair, just and proportionate manner”. The decision to proceed or not may not turn on the category of case or seriousness of the decision, but upon other factors that are idiosyncratic of the particular case itself, such as the local facilities, the available technology, the personalities and expectations of the key family members and, in these early days, the experience of the judge or magistrates in remote working. It is because no two cases may be the same that the decision on remote hearings has been left to the individual judge in each case, rather than making it the subject of binding national guidance.

Therefore, it should be assessed on a case per case basis if a hearing that concerns a child can be properly undertaken over the remote system. Sometimes the proceedings prior to this moment are supporting the judge in allowing the hearing to go remotely – the allegations have been well articulated in documents, they are well known to the parties, the witnesses – members of the medical profession, school staff, social workers – gave or can give their evidence remotely over the video link and for the process of examination and cross-examination to take place. What normally goes wrong is the technology rather than the professional interaction of the lawyers and the professional witnesses. In this sense the case might be ready for hearing and the parties are sufficiently aware of all of the issues to be able to have already instructed their legal teams with the points they to make.

IV. The right of the child to be heard in the context of remote proceedings

It is natural that remote hearings and all means of online communication unavoidably affect the proceedings itself. The current situation, unprecedented as it is and with all the challenges described above, raises the question of specifically how the child should be heard, if at all, and is this an absolute right, considering that providing a genuine and effective opportunity for the child to express their views requires the court to take all measures which are appropriate to the arrangement of the hearing, having regard to the best interests of the child and the circumstances of each individual case?

To explore this right in the light of the COVID-19 pandemic, some background should be provided. As it is pointed in the UN General comment No. 12 (2009) on the right of the child to be heard, the right itself imposes a clear legal obligation on States’ parties to recognize it and ensure its implementation by listening to the views of the child and according them due weight. This obligation requires that States’ parties, with respect to their particular judicial system, either directly guarantee this right, or adopt or revise laws so that this right can be fully enjoyed by the child. Something more – in par. 19 it says that “Article 12, paragraph 1, provides that States parties “shall assure” the right of the child to freely express her or his views. “Shall assure” is a legal term of special strength, which leaves no leeway for State parties’ discretion. Accordingly, States parties are under strict obligation to undertake appropriate measures to fully implement this right for all children.”

The right of the child to be heard is regulated in the same sense in Article 24(1) of the Charter of the Fundamental Rights of the EU and Article 42(2)(a) of Regulation No. 2201/2003 (Brussels II bis). The Hague convention of 25 October 1980 on the Civil Aspects of International Child Abduction also provides in Article 13 that the judicial or administrative authority may also refuse to order the return of the child if it finds that the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of its views.

Brussels IIa recast (Regulation 1111/2019, in force as of August 2022) pays special attention to the strengthening of the right of the child to express his or her view, reinforcing it with special provision – Article 26 in Chapter III “International child abduction”, in compliance with a detailed Recital 39. It states that the court may use “all means available to it under national law as well as the speci?c instruments of international judicial cooperation, including, when appropriate, those provided for by Council Regulation (EC) No 1206/2001” but “in so far as possible and always taking into consideration the best interests of the child” thus retaining some degree of discretion also in this regard.

In Joseba Andoni Aguirre Zarraga v. Simone Pelz (case C-491/10 PPU) however CJEU held that hearing a child is not an absolute right, but that if a court decides it is necessary, it must offer the child a genuine and effective opportunity to express his or her views. It also held that the right of the child to be heard, as provided in the Charter and Brussels II bis Regulation, requires legal procedures and conditions which enable children to express their views freely to be available to them, and the court to obtain those views. The court also needs to take all appropriate measures to arrange such hearings, with regard to the children’s best interests and the circumstances of each individual case.

It is worth noting that in some cases the hearing of the child can be conducted indirectly or via representative, or where it is considered as harmful for the child it can be dispensed with altogether. In the case of Sahin v. Germany, on the question of hearing the child in court, the ECtHR referred to the expert’s explanation before the regional court in Germany. The expert stated that after several meetings with the child, her mother and the applicant, he considered that the process of questioning the child could have entailed a risk for her, which could not have been avoided by special arrangements in court. The ECtHR found that, in these circumstances, the procedural requirements implicit in Article 8 of the ECHR – to hear a child in court – did not amount to requiring the direct questioning of the child on her relationship with her father.

So far, the question how the right of the child to be heard is regarded in the remote hearings, that had to take place recently, is not widely discussed. Therefore, at this moment we should draw some conclusions from the available case-law and emergency rules. Naturally, this right itself cannot be waived and the views of children and young people should be taken into account when emergency placements are first made; the decision at any given time must take into account the best interests of the child. The most appropriate approach would be adjusting the available domestic proceedings, and at all times the local authorities should provide pertinent information to inform this decision and the child must be at the center of all decision making, which includes the social work team listening to the child’s views.

How this might look in practice? First of all, the children as a rule should be offered the opportunity to join their hearing virtually and securely. Testing and monitoring are crucial in order to get as many children as possible able to attend. Good suggestion would be a letter giving them more information about how they can participate via their tablet laptop/PC or mobile phone, information sheet which will explain how they can join a virtual hearing, instructions to help them with the set up. This should be followed by a test to make sure everyone is prepared for the day of the hearing. In accordance with the domestic procedural rules, information about rights and reminder for the children and young people that they have the right to have a trusted adult, an advocate or lawyer attend the virtual hearing to provide support might be also useful.

However, it for sure would not be possible for every child to join its hearing remotely. In this case, they should still provide their views – e.g. by emailing the information to the local team mailbox and the judge will then ensure this information is given to the respective professionals involved in the procedure.

V. Conclusion

The rapid onset of the Covid-19 pandemic has been a shock to most existing justice systems These are times unlike any other, and extraordinary measures are being taken across the world. Many of us are already asking ourselves – why not earlier? And with those changes in place, can things go back to the way they were? Should a regular framework for the development of virtual courtrooms and remote hearings that enables all concerned, including the judges, to operate remotely and efficiently be created, and was it due even before the pandemic? There are no easy answers – but it is well-worth analyzing the options of applying and making full use of the existing online tools and resources in child-related proceedings in the future. Well summarized by Justice A. Pazaratz in Ribeiro v Wright: “None of us have ever experienced anything like this. We are all going to have to try a bit harder – for the sake of our children.”

Nadia Rusinova, LL M., Lecturer in International/European private law, Attorney-at-law, The Hague University of Applied Sciences | International and European Law Department

Thanks to the entering into force of the Dutch Collective Redress of Mass Damages Act (Wet afwikkeling massaschade in collectieve actie, WAMCA) on 1 January 2020, there has been an increase in prospective litigation against Volkswagen in the Netherlands and other countries in Europe involving the Volkswagen emissions scandal (also known as Dieselgate). We have previously reported on this law here and also on ongoing litigation against Volkswagen here (CJEU) and here (UK).

One of the institutes / organisations taking advantage of this opportunity is the Diesel Emissions Justice Foundation (DEJF), which was founded in the Netherlands, and which is seeking to be the exclusive representative in a collective redress action against Volkswagen. The DEJF is currently acting in the Netherlands, Belgium and France and has recently extended its activities to the rest of Europe provided that certain conditions are fulfilled (e.g. customers have not yet been compensated – one cannot be compensated twice and has to choose one representative – see more information here).

As indicated on its website, on 13 Mar 2020, DEJF summoned Volkswagen et al. to appear before Amsterdam District Court under new WAMCA proceedings. DEJF requested to be appointed as the Exclusive Representative Organisation (“Lead Plaintiff”). A summary in English is available here and the full text in Dutch is available here. See a summary of the progress here.

Undoubtedly, the ongoing litigation in other parts of the world and its final outcome will have an impact on this action. We will keep you informed.

Edoardo Rossi has published (in Italian) a book on the Sharing Economic in EU Private International Law (“” (“Sharing Economy in EU Private International Law”). The author has kindly provided us with an abstract:

In the current economic and social context new and controversial sharing practices, offering anyone the opportunity to search for or make available goods or services on the market regardless of the professional or amateur nature of the persons involved, have emerged. These practices, very heterogeneous and concerning the most different areas of daily life, such as mobility, housing, business activities, communications, work, culture, communication, education and finance, have been linked  to the notion of “sharing economy”, which brings them together by virtue of temporary access to goods or services, facilitated by the large-scale intervention of digital platforms, through which requests and offers are coordinated online in order to share goods or services.

The legitimacy of schemes linked to these new economic models has been challenged in a number of aspects, including low quality of services, safety of consumers, authorisation and licensing, taxes and compliance with competition rules. The inadequacy of the existing rules to deal with the provision of services through the sharing economy models has consequently emerged.

In spite of these critical profiles, the legal relations established through sharing economy platforms are constantly increasing around the world, implying the emergence of elements of transnationality, from which derives the recourse to the rules of private international law, in order to determine the applicable law and the judge competent to rule on any disputes.

The monograph thus attempts to analyse some of the most important private international law issues, such as the inadequacy of the party autonomy in regulating the phenomenon, especially with reference to the general terms and conditions of contract unilaterally drawn up by platform operators, which state that the latter is totally unrelated to the legal relations between users, often in conflict with the minimum level of consumer protection guaranteed by EU law and by the national legislations. Critical profiles have also been identified in the online conclusion of contracts that bind the parties involved in sharing economy legal relations, in ascertaining the effectiveness of consent on the choice of forum and choice of law clauses, in cases of potential related actions and in the location of the “domicile” of the platform operators.

For further information see here.

The summary is available here.

The latest issue of the „Praxis des Internationalen Privat- und Verfahrensrechts (IPRax)“ features the following articles:

A. Stein: The 2019 Hague Judgments Convention – All’s Well that Ends Well?

The Hague Convention on the Recognition and Enforcement of Foreign Judgments, which was concluded in July 2019, holds the potential of facilitating the resolution of cross-border conflicts by enabling, accelerating and reducing the cost of the recognition and enforcement of judgments abroad although a number of areas have been excluded from scope. As the academic discussion on the merits of this instrument unfolds and the EU considers the benefits of ratification, this contribution by the EU’s lead negotiator at the Diplomatic Conference presents an overview of the general architecture of the Convention and sheds some light on the individual issues that gave rise to the most intense discussion at the Diplomatic Conference.

C. North: The 2019 HCCH Judgments Convention: A Common Law Perspective

The recent conclusion of the long-awaited 2019 HCCH Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the “Judgments Convention”) provides an opportunity for States to reconsider existing regimes for the recognition and enforcement of foreign judgments under national law. This paper considers the potential benefits of the Judgments Convention from a common law perspective. It does so by considering the existing regime for recognition and enforcement at common law, and providing an overview of the objectives, structure and a number of key provisions of the Judgments Convention. It then highlights some of the potential benefits of the Convention for certain common law (and other) jurisdictions.

P.-A. Brand: Recognition and enforcement of decisions in administrative law matters

Whereas for civil and commercial matters there are extensive rules of international and European civil procedural law on mutual legal assistance and in particular on the recognition and enforcement of civil court decisions, there is no similar number of regulations on legal assistance and for the international enforcement of administrative court decisions. The same applies to the recognition of foreign administrative acts. This article deals with the existing rules, in particular with regard to decisions in administrative matters, and concludes that the current system of enforcement assistance in the enforcement of administrative decisions should be adapted to the existing systems of recognition and enforcement of judgments in civil and commercial matters.

B. Hess: About missing legal knowledge of German lawyers and courts

This article addresses a decision rendered by the Landgericht Düsseldorf in which the court declined to enforce, under the Brussels Ibis Regulation, a provisional measure issued by a Greek court. Erroneously, in its decision the Landgericht held that applications for refusal of enforcement of foreign decisions (article 49 Brussels Ibis Regulation) are to be lodged with the Landgericht itself. Since the party lodged its application with the Landgericht on the last day of

the time limit, the Oberlandesgericht Düsseldorf eventually held that the application was untimely as it was not lodged with the Oberlandesgericht, instead. The Oberlandesgericht refused to restore the status quo ante because the information about the competent court had been manifestly erroneous, whereas the lawyer is expected to be familiar with articles 49 (2) and 75 lit b) of the Brussels Ibis Regulation. This article argues that jurisdiction over applications for refusal of enforcement is not easily apparent from the European and German legal provisions and that the legal literature addresses the issue inconsistently. This results in a certain degree of uncertainty as concerns jurisdiction over such applications, making it difficult to establish cases of possibly manifestly incorrect applications.

C.F. Nordmeier: Abuse of a power of attorney granted by a spouse – The exclusion of matrimonial property regimes, the place of occurrence of the damage under Brussels Ibis and the escape clause of art. 4 (3) Rome II

The article deals with the abuse of power of attorney by spouses on the basis of a decision of the Higher Regional Court of Nuremberg. The spouses were both German citizens, the last common habitual residence was in France. After the failure of the marriage, the wife had transferred money from a German bank account of the husband under abusive use of a power of attorney granted to her. The husband sues for repayment. Such an action does not fall within the scope of the exception of matrimonial property regimes under art. 1 (2) (a) Brussels Ibis Regulation. For the purpose of determining the place where the damage occurred (Art. 7 No. 2 Brussels Ibis Regulation), a distinction can be made between cases of manipulation and cases of error. In the event of manipulation, the bank account will give jurisdiction under Art. 7 No. 2 Brussels Ibis Regulation. Determining the law applicable by Art. 4 (3) (2) Rome II Regulation, consideration must be given not only to the statute of marriage effect, but also to the statute of power of attorney. Particular restraint in the application of Art. 4 (3) (2) Rome II Regulation is indicated if the legal relationship to which the non-contractual obligation is to be accessory is not determined by conflict-of-law rules unified on European Union level.

P.F. Schlosser: Governing law provision in the main contract – valid also for the arbitration provision therein?

Both rulings are shortsighted by extending the law, chosen by the parties for the main contract, to the arbitration provision therein. The New York Convention had good reasons for favoring, in the absence of a contractual provision specifically directed to the arbitration provision, the law governing the arbitration at the arbitrators’ seat. For that law the interests of the parties are much more predominant than for their substantive agreements.

F. Rieländer: Choice-of-law clauses in pre-formulated fiduciary contracts for holding shares: Consolidation of the test of unfairness regarding choice-of-law clauses under Art. 3(1) Directive 93/13/EEC

In its judgment, C-272/18, the European Court of Justice dealt with three conflict-of-laws issues. Firstly, it held that the contractual issues arising from fiduciary relationships concerning limited partnership interests are included within the scope of the Rome I Regulation. While these contracts are not covered by the exemption set forth in Art. 1(2)(f) Rome I Regulation, the Court, unfortunately, missed an opportunity to lay down well-defined criteria for determining the types of civil law fiduciary relationships which may be considered functionally equivalent to common law trusts for the purposes of Art. 1(2)(h) Rome I Regulation. Secondly, the Court established that Art. 6(4)(a) Rome I Regulation must be given a strict interpretation in light of its wording and purpose in relation to the requirement “to be supplied to the consumer exclusively in a country other than that in which he has his habitual residence”. Accordingly, this exception is applicable only if the consumer needs to leave the country in which he has his habitual residence for the purpose of enjoying the benefits of the services. Thirdly, the Court re-affirmed that choice-of-law clauses in pre-formulated consumer contracts are subject to a test of unfairness under Art. 3(1) Directive 93/13/EEC. Since the material scope of this Directive is held to apply to choice-of-law clauses, such a clause may be considered as unfair if it misleads the consumer as far as the laws applicable to the contract is concerned.

U. Bergquist: Does a European Certificate of Succession have to be valid not only at the point of application to the Land Registry, but also at the point of completion of the registration in the Land Register?

When it comes to the evidentiary effect of European Certificates of Successions, there are different opinions on whether a certified copy of the certificate has to be valid at the time of the completion of a registration in the Land register. The Kammergericht of Berlin recently ruled that a certified copy loses its evidentiary effect in accordance with art. 69 (2) and (5) of the European Succession Regulation (No. 650/2012) after expiry of the (six-month) validity period, even if the applicant has no influence on the duration of the registration procedure. This contribution presents the different arguments and concludes – in accordance with the Kammergericht – that not the date of submission of the application but the date of completion of the registration has to be decisive for the required proof.

D. Looschelders: International and Local Jurisdiction for Claims under Prospectus Liability

The judgment by the Austrian Supreme Court of Justice (Oberster Gerichtshof, OGH) deals with international and local jurisdiction for a claim under prospectus liability. It is mainly concerned with the determination of the place in which the harmful event occurred, as stated in Art. 5(3) of Regulation No 44/2001. Specifying the damage location can pose significant problems due to the fact that prospectus liability compensates pure economic loss. The OGH had stayed the proceedings in order to make a reference to the European Court of Justice (ECJ) for a preliminary ruling on several questions related to this issue. However, the decision by the ECJ left many details unsettled. This article identifies the criteria developed by the OGH in light of the case. The author agrees with the OGH to designate the damage location in this particular case as the injured party’s place of residence. Nevertheless, he points out the difficulties of this approach in cases where not all investment and damage specific circumstances point to the investor’s country of residence.

W. Voß: U.S.-style Judicial Assistance – Discovery of Foreign Evidence from Foreign Respondents for Use in Foreign Proceedings

In the future, German litigants in German court proceedings will have to hand over to the opposing party evidence located on German territory based on American court orders? In general, under German law, the responsibility to gather information and to clarify the facts of the case lies with the party alleging the respective facts, while third parties can only be forced to produce documents in exceptional circumstances.  However, the possibility to obtain judicial assistance under the American Rule 28 U.S.C. § 1782(a) increasingly threatens to circumvent these narrow provisions on document production in transatlantic relations. For judicial assistance this Federal statute provides parties to foreign or international proceedings with access to pre-trial discovery under U.S. law, if the person from whom discovery is sought “resides or is found” in the American court district. Over the years, the statute has been given increasingly broad applicability – a trend that is now being continued by the recent ruling of the Second Circuit Court of Appeals discussed in this article. In this decision, the Court addressed two long-disputed issues: First, it had to decide whether the application of 28 U.S.C. § 1782(a) is limited to a person who actually “resides or is found” in the relevant district or whether the statute could be read more broadly to include all those cases in which a court has personal jurisdiction over a person. Second, the case raised the controversial question of whether 28 U.S.C. § 1782 allows for extraterritorial discovery.

M. Jänterä-Jareborg: Sweden: Non-recognition of child marriages concluded abroad

Combatting child marriages has been on the Swedish legislative agenda since the early 2000s. Sweden’s previously liberal rules on the recognition of foreign marriages have been revisited in law amendments carried out in 2004, 2014 and 2019, each reform adding new restrictions. The 2019 amendment forbids recognition of any marriage concluded abroad as of 1/1/2019 by a person under the age of 18. (Recognition of marriages concluded before 1/1/2019 follows the previously adopted rules.) The marriage is invalid in Sweden directly by force of the new Swedish rules on non-recognition. It is irrelevant whether the parties had any ties to Sweden at the time of the marriage or the lapse of time. The aim is to signal to the world community total dissociation with the harmful practice of child marriages. Exceptionally, however, once both parties are of age, the rule of nonrecognition may be set aside, if called upon for “extraordinary reasons”. No special procedure applies. It is up to each competent authority to decide on the validity of the marriage, independently of any other authority’s previous decision.  While access to this “escape clause” from the rule of non-recognition mitigates the harshness of the system, it makes the outcome unpredictable. As a result, the parties’ relationship may come to qualify as marriage in one context but not in another. Sweden’s Legislative Council advised strongly against the reform, as contrary to the aim of protecting the vulnerable, and in conflict with the European Convention on Human Rights, as well as European Union law. Regrettably, the government and Parliament took no notice of this criticism in substance.

I. Tekdogan-Bahçivanci: Recent Turkish Cases on Recognition and Enforcement of Foreign Family Law Judgements: An Analysis within the Context of the ECHR

In a number of recent cases, the Turkish Supreme Court changed its previous jurisprudence, rediscovered the ECHR in the meaning of private international law and adopted a fundamental-rights oriented approach on the recognition and enforcement of foreign judgements in family matters, i.e. custody and guardianship. This article aims to examine this shift together with the jurisprudence of the European Court of Human Rights, to find a basis for this shift by analysing Turkey’s obligation to comply with the ECHR and to identify one of the problematic issues of Turkish private international law where the same approach should be adopted: namely recognition and/or enforcement of foreign judgements relating to non-marital forms of cohabitation.

 

Written by Elijah Granet

When a British woman gives birth in a German hospital staffed with British midwives on a contract from the British ministry of defence, what law applies and to what extent? This seemingly simple question took Mrs Justice Foster, in the English and Welsh High Court of Justice, 299 paragraphs to answer in a mammoth judgment released on 24 April: Roberts (a minor) v Soldiers, Sailors, Airmen and Families Association & Ors [2020] EWHC 994 (QB).   In the course of resolving a variety of PIL issues, Mrs Justice Foster held that the German law of limitations should be disapplied as, on the specific facts of the case, contrary to public policy.

Facts

The British military has maintained a continuous presence in Germany since the end of the Second World War.   In June 2000, Mrs Lauren Roberts, the wife of a British soldier serving in Germany and herself a former soldier, gave birth to her son, Harry, in the Allegemeines Krankenhaus in Viersen (‘AKV’), a hospital in North-Rhine Westphalia.

AKV had been contracted to provide healthcare for British military personnel and their dependents by Guy’s & St Thomas’s Hospital NHS Trust in London, which, in turn, had been contracted  by the British Ministry of Defence (‘MoD’) to procure healthcare services in Germany.  Midwifery care for British personnel and dependents, however, was supplied instead by the Soldiers, Sailors, Airmen and Families Association (‘SSAFA’), a charity.  These British midwives worked under the direction of AKV, taking advantage of the mutual recognition of qualifications under EU law.

Tragically, during the birth, Harry suffered a brain injury which has left him severely disabled.  Mrs Roberts, who brought the action in her son’s name, alleges that negligence on the part of an SSAFA midwife during Harry’s birth caused these injuries. She further alleges that the MoD is vicariously liable for this negligence.  The MoD, in turn, while denying negligence on the midwife’s part, asserts that, regardless, German law  allocated any vicarious liability to AKV.  These allegations have yet to be tried before the court.

The applicable law

Due to unfortunate procedural delays, the case, although begun in 2004, took until 2019 to reach the High Court. This meant that the 2007 Rome II Regulation was inapplicable, and the case instead was governed by English conflicts rules.  The relevant statutory provision was the Private International Law (Miscellaneous Provisions Act).  Section 11 of that Act lays out a general rule of lex loci delicti commissi, but s 12 allows this principle  to be displaced where significant factors connecting a tort or delict to another country mean ‘that it is substantially more appropriate’ to use a law other than that of the location of the tort or delict.  Counsel for Mrs Roberts argued that the s 12 exception should apply, given that inter alia Mrs Roberts was only in Germany at the behest of the Crown, had no familial or personal connections to Germany, moved back to England in 2003, and were being treated by English-trained midwives who were regulated by British professional bodies.

The authoritative  text on English conflicts rules, Dicey, Morris & Collins on the Conflict of Laws (15th ed), provides that at para 35-148 that the threshold for invoking s 12 is very high, and that the section is only rarely invoked successfully.  This is reinforced by inter alia  the decision of the English and Welsh Court of Appeal, per Lord Justice Longmore, in Fiona Trust and Holding Corp & Ors v Skarga & Ors [2012] EWCA Civ 275.   Mrs Justice Foster (at para 132) ruled (at paras 132–144) that this threshold was not met.  Her Ladyship placed great significance on the fact that the midwives were required to learn basic German, follow the directions of German obstetricians, operate according to the rules of the German healthcare system, and provide care to military personnel who were living in Germany.  Thus, German law was applicable.

The limitation period question

English jurisprudence addresses questions of foreign law as matters  of objective fact to be determined through expert evidence.  This can prove, as it did in this case, to an extremely complex task.  For the purposes of this article, it is sufficient to note that Mrs Justice Foster ultimately found (after extensive discusssion at paras 192–280) that, in light of various decisions of the German Bundesgerichtshof (Federal Court of Justice) on the application of both the old and new versions of §852 of the Bürgerliches Gesetzbuch (German Civil Code), the relevant limitation period of  three years commenced in 2003, meaning that the claim issued in 2004 was within time.

More relevantly for PIL scholars, Her Ladyship also ruled that, in the alternative, any applicable German limitation period was to be disapplied.  In English law, the disapplication of foreign limitation periods is governed by the appropriately-named Foreign Limitation Periods Act 1984.  While the general rule is that foreign limitation periods displace English limitations, Section 2(2) allows for the disapplication of foreign limitation periods where their application would ‘conflict with public policy to the extent that its application would cause undue hardship’ to a party.  This is, once again, a deliberately high threshold which is rarely applied; the authoritative English text on limitation, McGee on Limitation Periods (8th ed), provides (at para 25-027) that ‘[j]udges should be very slow indeed to substitute their views for the views of a foreign legislature’.   Similarly, Mr Justice Wilkie, in KXL v Murphy [2016] EWHC 3102 (QB), para 45, warned that the entire system of private international law could collapse if public policy was too readily invoked, and the public policy test should only succeed where the foreign provision caused undue hardship which would be ‘contrary to a fundamental principle of justice’.

After surveying the case law, Mrs Justice Foster concluded, at paras 181–184, that undue hardship must be a ‘detriment of real significance’, whose existence (or lack thereof) must be determined through a careful and holistic evaluation of the particular facts of any given situation.  Thus, the question was not if the German limitation period per se caused undue hardship (and indeed, Mrs Justice Foster held at para 182 that it did not), but rather if the application of an otherwise unobjectionable provision to the unique factual matrix of the case would create undue hardship.  Thus, Mrs Justice Foster ruled (at paras 185–6) that, if (contrary to her findings) the German limitation period commenced in 2001, this would be a disproportionate hardship given the disadvantages Mrs Roberts had as a primigravida unfamiliar with obstetrics who had given birth in a foreign country where she did not speak the language. Furthermore, the highly complex organisational structure of medical care, between the SSAFA, the MoD, and AKV would mean that it would be unjust and disproportionate for the relevant ‘knowledge’  for the purposes of the §852 limitation period to have been said to commence in 2001.

Comment

This case demonstrates the complexities which arise when applying abstract rules of private international law to the realities of human affairs.  Although the (by comparative standards) wide discretion accorded to judges in English law has its critics, in this case, the ability to disapply foreign law where it might lead to an unjust result was able to ensure that the Roberts family, for whom one must have the greatest sympathy, were able to proceed with their claim.  It is hard to disagree with Mrs Justice Foster’s conclusion that, on the facts, it would be a disproportionate hardship on the family. Both the case-law and texts are clear that this discretion should be applied only rarely, given that its overuse would be to the detriment of the principles of legal certainty and English conflicts rules, Roberts demonstrates that the common law preference for flexibility can, if used wisely, avert serious injustice in those rare circumstances where the general rules are insufficient.

By Radhika Parthasarathy

The advent of the internet has led to mass-communication like no other. Everything one wants is at the tip of our fingers now, thanks to mobile phones, laptops, iPads and the likes. Mass consumerism has seen an exponential increase in the last ten years. If one needs to buy quirky stationery, we have the likes of Amazon and Chumbak online; if one wants to watch the latest episode of Brooklyn Nine-Nine, Netflix does the needful; if we wish to read multiple newspapers, while also saving papers, multiple Apps such as InShorts exist.  Platforms such as these stream large quantities of data across the globe, thus bringing the world closer, but also leading to certain jurisdictional issues in case of litigations. Such activity requires a cross-cutting need and definition of personal jurisdiction.

Personal jurisdiction relates to the jurisdiction of a Court to adjudge a dispute between parties. The general rule is that to exercise such jurisdiction, physical presence is mandatory. As such, jurisdiction in personam is not to be exercised over a person who is not subject to the jurisdiction of courts. This has become a commonly accepted principle domestically and globally. However, the advent of technology and the pervasiveness of the world wide web has led to massive debates in this regard. How is personal jurisdiction then to be adjudicated for matters of cyber torts, or that of defamation that takes place online? In the context of the internet, personal jurisdiction oft refers to and deals with websites or services on the internet that deal with advertisements or promotions of business or brands online in their home State but debate their liability to be litigated within another foreign State. However, courts in the United States, Europe and, India are now determining how to assess and enforce such jurisdiction.[1]

Understanding Personal Jurisdiction: the United States and Europe A.   The United States

In the United States [“the US”], the criteria of “certain minimum contact” with the jurisdiction where the cyber transaction has occurred must be met to assess personal jurisdiction. This aligns with the Long Arm Statute of the United States of America. Traditionally, in International Shoe v. Washington, the Supreme Court held that a defendant may be held liable for such cross-border issues if they have at least a minimum level of contact with the State that seeks to hold them liable and there must be a reasonable expectation of being sued in that State.[2] In this regard, courts in the US have held that mere advertisements on a website are not enough to hold a defendant liable for a cross-border tort and to exercise personal jurisdiction there.[3]

Before this, however, was the iconic case, Calder v. Jones,[4] where the Court, in 1984, held that where an action is targeted at a particular forum, even if there is minimum contact, the “effects” test may be applied. In this case, an article was written and edited in Florida, the article concerned a resident in California and relied on sources in California, and thus, the Court held that the intentional tortious act was “expressly aimed at California”. This test essentially, thus, lays down that where an act is done intentionally, has an effect within the forum state and is directed or targeted at the forum state, then jurisdiction will be satisfied.[5] Thus, the effects test is useful when the exact nature of the defendant’s internet activities need to be assessed vis-à-vis, injury caused to a resident elsewhere, in a different State.[6]

The legal position in the US has been seemingly settled, off late, in this regard in Zippo Manufacturing Co. v. Zippo Dot Com Inc,[7] which rendered the famous Zippo Test. Per the Zippo Test, a finding of jurisdiction would be contingent upon the nature of the website and sought to employ a sliding scale test. It further laid down two important points:

1. The interactive nature of the site, which would aid in quantifying the extent of the damage so caused;
2. The harmful effect within the jurisdiction of the concerned state.

Per Zippo, websites are of three kinds- websites that conduct business over the internet; websites where users exchange information with the host computers; and websites that do little more than present information.[8] However, this has been criticized for not providing enough information on the assessment of the extent of interactivity of the website to justify purposeful availment.[9]

Multiple cases, however, well into the 2000s, yet apply the Calder case. For instance, in Blakey v. Continental Airlines,[10] the minimum contacts test was applied along with the effects test to assess “proper jurisdiction”. This was further cemented by Young v. New Havem Advocate,[11] where two Connecticut newspapers defamed the warden of Virginian prison. Here, the court assessed the issues based on the Calder test once again and opined that proof must be derived that the defendant’s internet activity is expressly targeted at or directed to the forum State. Similarly, in Yahoo! Inc. v. La Ligue Contre Le Racisme et l’antisemitisme,[12] the Calder test was applied once again to establish personal jurisdiction between two French organizations and Yahoo (an American company). Thus, it seems more appropriate to say that Courts in the US, first apply the Zippo Test, but then apply the effects test as laid down in Calder to have a wholly encompassing test.

B.    European Standing

In the European Union [“EU”], the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters [“Brussels Convention”][13] regulates acts concerning torts, delict and quasi-delict under Art. 5(3) and thereby, a defendant may be sued in the court of the place where the harm has occurred.[14] The leading law on the matter of defamation can be found in Shevill & Ors. v. Presse Alliance S.A.,[15] where a libellous article was published in one place but distributed across multiple jurisdictions. Here, the ECJ devised what came to be known as the mosaic approach and held that the place where the harm has occurred includes:

1. the place where publisher resides, or where the defamatory statement came into existence, or the place of publication;
2. the place of distribution or where the material was read and received.

This approach was also applied in Handelskwekerij G J Bier B. V. v. Mines de Potasse d’Alsace SA, where the Court held that the “place where the harmful event occurred” must be understood as being intended to cover both the place where the damage occurred and the place of the event giving rise to it.[16] However, this approach has led to criticism that it enables forum shopping for the plaintiff.[17] This approach suggests that the plaintiff may choose the more convenient forum under Art. 5(3) as one forum may have a more liberal approach to prove defamation than another.

Article 5(3) was subject to further interpretation in 2011 when the ECJ held that a person may bring an action for liability when their rights have been infringed on the internet before:

1. the courts of the Member State in which the publisher of that content is established; or
2. before the courts of the Member State in which the centre of his interests is based; or
3. the courts of each Member State in the territory of which content placed online is or has been accessible.[18]

This position has since been challenged in the Svensk Handel case, wherein Article 7 of the Brussels Recast Regulation (similar to Article 5(3)) was assessed.[19] Here, while the Court didn’t expressly reject the Mosaic Approach, it did, however, lay down that “the centre of interest” must be located and interpreted broadly to include residence, where the most harm occurs. However, the Court laid down an important safeguard by stating that any order for the takedown of insulting content cannot be initiated in every Member State where the website is accessible. Since the earlier days till now, there seems to be a newfound cogency in the application of personal jurisdiction for defamatory matters in the EU.

Banyan Tree Holdings and the Indian Position

In the case of Banyan Tree Holdings v. A. Murali Krishna Reddy,[20] the plaintiff is part of the hospitality business and has since 1994, used the word mark, “Banyan Tree” which has now acquired a secondary meaning. It also maintains websites that use the mark and are accessible in India. However, in 2007, the defendants began work on Banyan Tree Retreat and hosted a website which directed to a “Banyan Tree” project. The Plaintiffs contended that the use of this mark is dishonest and aimed at encashing on the reputation and goodwill of the Plaintiff. They also claim that it would lead to confusion and deception if such usage was so allowed.

In this case, the Court found that the website of the defendant is accessible in Delhi and is thus, not a passive website, as derived from American laws. Further, the defendant also sent a brochure to Delhi regarding their property’s sale. In this case, parties relied on the holdings and observations of International Shoe Co., the Zippo Test of “sliding scale”, Cybersell Inc. and the effects test in Calder, among multiple other American cases on the same issue. It then discussed cases from Australia and Canada before assessing the Indian Position on the same.

In India, there seems to have been some form of debate on such issues. In a similar factual matrix as Banyan Tree, the Delhi High Court in Casio India Ltd. v. Ashita Tele Systems Pvt Ltd.[21] held that even a mere likelihood of deception on the internet would entertain an actual action for passing off and no actual deception needed to be proven. Thus, the mere accessibility of the website from Delhi could invoke the Court’s jurisdiction. However, in another case,[22] the Court held that the mere accessibility of a website from one jurisdiction may not be enough or sufficient for a court to exercise its jurisdiction.

In Banyan Tree, on an analysis of these positions, Justice Muralidhar found that essential principles developed in other jurisdictions may be seamlessly adopted into our own.[23]  The Court chose to disagree with Casio and held that a passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction.[24] Further, it observed that the degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined while adjudging the “effects” test.[25] Additionally, there is a need to assess whether the Plaintiff can show a prima case that the specific targeting in the forum State by the Defendant resulted in an injury or harm to the Plaintiff within the forum state.[26] The Court thus chose to apply the “effects” test with the “sliding scale” taste, this reconciling the application of the Calder test with the Zippo Test in India.

On the matter of jurisdiction, the Court held that to establish a prima facie case under Section 20(c) of the Code of Civil Procedure, 1908 [“the CPC”], the Plaintiff will have to establish that irrespective of the passive or interactive nature of the website, it was targeted specifically at viewers in the forum State, which in this case would have been Delhi.[27] They will then have to establish that there has been specific harm or injury caused to it by the Defendant’s actions.

Conclusion: Certainty in India’s Position?

In India’s case, it has become abundantly clear that cross-border defamation will be adjudged as per Section 19 of the CPC, as per the residence of the defendant or where the wrong has been done. Additionally, India also follows the double actionability rule to adjudge applicable law in such matters. However, if the tort is committed outside India, then Section 19 yields to Section 20 of the CPC, and the territorial jurisdiction is adjudged as such.[28] The factors relating to the cause of action and its assessment have been discussed in multiple cases. For instance, online sale of property in a different jurisdiction did not constitute sufficient cause of action for courts in Kerala.[29] However, while the test in Banyan Tree may be quite descriptive, Muralidhar J. opines that it does not lay down a “one size fits all” test,[30] in the sense that while it is foolproof for an online commercial transaction and intellectual property issues, it does not cover the area of torts such as defamation.

In a differing opinion, in World Wrestling Entertainment, Inc. v. M/s Reshma Collection & Ors,[31] the Appellant was a Delaware based company providing the online sale of digital merchandise to customers world over and also in Delhi and held the trademark for the same. Here, the Court held that due to the spontaneous nature of the transactions (offer and acceptance and payment of consideration) over the internet, the cause of action is deemed to have occurred at the place the customer carried out his part of the transaction.[32]

The jurisprudence in such torts is still developing in India and largely follows the double actionability rule. The double actionability rule is the foundation or cross-border torts, particularly, defamation.[33] This rule lays down two points:

1. The act must be “actionable” as a tort in England; and
2. The act must be “non-justifiable” by the law of the place where it was committed. (this was eventually overruled by Boys v. Chaplin)[34]

This rule was further discussed and upheld in Govindan Nair v. Achuta Menon,[35] when the then Raja of Cochin (which was at the time an independent Indian State), sent a communication to the plaintiff excommunicating him from his caste in British India. The High Court applied the rule but dismissed the case as there was no trace of malice. In more recent times, the order in Baba Ramdev and Anr. v. Facebook Inc.,[36] is highly interesting. The allegation here was that a book based on the plaintiff was being circulated on a global basis by social media platforms, such as Facebook. The basic issue here was whether a global takedown order could even be passed by the Court. The Court essentially held that:

1. If the content was uploaded in India, or from IP addresses in India, the content had to be taken down, blocked/ restricted on a global basis;[37]
2. However, if uploaded from outside India, the Court cannot exercise its jurisdiction.[38]

Such exercise of jurisdiction has also been discussed in YouTube v. Geeta Shroff, wherein the Court held that any exercise of jurisdiction must be done assuming that the internet transaction is one akin to a real-life transaction, thereby ensuring that the Court cannot assume extra-territorial jurisdiction on the matter.[39]

Julia Hornle points out that the laws in the US are quite liquid on the point of personal jurisdiction and can be used to adapt to multiple scenarios.[40] However, tests in India have seemingly been fact-specific and not one test that can cover the entirety of actions that take place on the internet. Thus, courts may exercise jurisdiction either very broadly or very narrowly. However, this does not mean that India does not follow any minimum standard. The laws laid down in the US and other common law jurisdictions have gone a long way in establishing India’s position on personal jurisdiction in matters of cyber-transactions. Thus, it is easy to conclude by saying India has given the concept of personal jurisdiction a wide berth and a multi-dimensional interpretation and one can hope to have a “one size fits all” criteria in the foreseeable future, as Courts get better acclaimed with the use of and the advancement of technology in all fields – legal, commercial

[1] TiTi Nguyen, A Survey of Personal Jurisdiction based on Internet Activity: A Return to Tradition, 19 Berkeley Tech. L.J. 519 (2004).

[2] International Shoe v Washington, 326 U.S. 310 (1945)

[3] Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997)

[4] Calder v. Jones, 465 U.S. 783 (1984)

[5] Id.

[6] Dudnikov v. Chalk & Vermilion, 514 F.3d 1063 (10th Cir. 2008).

[7] Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119

[8] Id; Christopher Wolf, Standards for Internet Jurisdiction, FindLaw (May 03, 2016), https://corporate.findlaw.com/litigation-disputes/standards-for-internet-jurisdiction.html

[9] No Bad Puns: A different Approach to the Problem of Personal Jurisdiction and the Internet, 116 Harv. L. Rev. 1821, 1833 (2003).

[10] Blakey v. Continental Airlines, 751 A.2d 538 (NJ 2000)

[11] Young v. New Havem Advocate, 315 F 3d 256 (4th Cir, 2003)

[12]Yahoo! Inc. v. La Ligue Contre Le Racisme et l’antisemitisme, 433 F.3d 1199 (9th Cir. 2006)

[13]Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, Regulation 44/2001 (Dec. 22, 2000)

[14] Article 5(3) allows for two jurisdictions – the place of domicile of the defendant OR the place where the harm has occurred; Handelskwekerij G. J. Bier B.V. v Mines de Potasse d’Alsace S.A. (preliminary ruling requested by the Gerechtshof of The Hague) (Case 21/76) [1976] ECR 1735, [1978] QB 708, [1977] 1 CMLR 284.

[15] Shevill & Ors. v. Presse Alliance S.A., Case C-68/93 [1995] 2 W.L.R. 499

[16]  Handelskwekerij G J Bier B. V. v. Mines de Potasse d’Alsace SA, Case 21/76 [1976] E.C.R. 1735

[17] Christopher Forsyth, Defamation under the Brussels Convention: A Forum Shopper’s Charter?, 54(3) Cam. L.J. 515 (1995)

[18] eDate Advertising GmbH and Others v X and Société MGN Limited, Cases C-509/09 and C-161/10

[19] Bolagsupplysningen OÜ Ingrid Ilsjan v. Svensk Handel AB, Case C-194/16, ECJ

[20]Banyan Tree Holdings v. A. Murali Krishna Reddy, CS (OS) No.894/2008 (Nov. 23, 2009) [hereinafter Banyan Tree]

[21] Casio India Co. Limited v. Ashita Tele Systems Pvt. Limited 2003 (27) PTC 265 (Del)

[22] (India TV) Independent News Service Pvt. Limited v. India Broadcast Live Llc And Ors., 2007 (35) PTC 177 (Del.).

[23]Banyan Tree, supra note 20 at ¶38

[24] Id at ¶38

[25] Id at ¶42

[26]Id

[27] Id at ¶45

[28] Sarine Technologies v. Diyora and Bhanderi Corpn., 2020 SCCOnline Guj 140.

[29] Presteege Property Developers v. Prestige Estates Projects Pvt. Ltd., 2008 (37) PTC 413 (SC)

[30] Justice Muralidhar, Jurisdictional Issues in Cyberspace, 6 Ind. J. L & Tech. 1 (2010).

[31] World Wrestling Entertainment, Inc. v. M/s Reshma Collection & Ors, AO (OS) 506/2013 and CM Nos. 17627/2013 & 18606/2013, decided on October 15, 2014.

[32] Id.

[33] Philips v Eyre, 6 L.R. Q.B. 1, 28 (1870, Queen’s Bench).

[34] Boys v. Chaplin, 2 Q.B. 1 (1968, Queen’s Bench).

[35] Govindan Nair v. Achuta Menon, (1915) I.L.R. 39 Mad 433.

[36] Baba Ramdev and Anr. v. Facebook Inc, CS (OS) 27/2019

[37]Id at ¶96(i)

[38] Id at ¶96(ii)

[39] YouTube v. Geeta Shroff, FAO 93/2018

[40] Julia Hörnle, The Conundrum of Internet Jurisdiction and How US Law has Influences the Jurisdiction Analysis in India, 14 Ind. J. L. Tech. 183 (2018).