EAPIL blog

Florence Guillaume and Swen Riva (University of Neuchatel) have posted Blockchain Dispute Resolution for Decentralized Autonomous Organizations: The Rise of Decentralized Autonomous Justice on SSRN.

For the past twenty years, the use of the Internet has facilitated international commercial relations between people who do not know each other and who are geographically distant. Disputes resulting from e-commerce have undermined the supremacy of state courts, which have proved unable to provide an appropriate response to small claims arising in an international context and raising delicate questions as to jurisdiction and applicable law. The length, cost and complexity of the procedure, as well as the risk associated with the international enforcement of the judgment are deterrent factors that led e-commerce platforms to develop online dispute resolution (ODR).

Thanks in part to the removal of intermediaries, the transfer of cryptocurrencies and other crypto assets using blockchain technology has further facilitated international commercial relations. The decentralized and distributed characteristics of blockchain technology and the pseudonymity of its transactions has led to a new economy growing independently from nation states. This technology has brought an additional degree of complication in the application of private international law (PIL) rules by removing the illusion that online transactions can be linked to the territory of a state. Smart contracts also allow the creation of digital entities that can enter into commercial relations. The first decentralized autonomous organization (DAO) was the source of a resounding dispute between parties with diverging interests, which had to be urgently resolved without any access to state courts or a dispute resolution mechanism. This case revealed the risk of disputes in the blockchain environment and the resulting legal uncertainty, and led to the emergence of various models of blockchain dispute resolution (BDR) mechanisms (BDRs) inspired by the solutions developed in e-commerce.

This chapter deals with the application of PIL rules to the resolution of disputes involving DAOs. The authors first analyze what is a DAO and whether DAOs legally qualify as companies. What is at stake is the legal personality of DAOs and their capacity to conduct legal proceedings. The authors then examine whether disputes involving DAOs may be brought before state courts. This analysis highlights the problems related to the location, pseudonymity, and uncertainty regarding the legal personality of the participants of the blockchain environment, which challenge the jurisdiction of state courts in case of a dispute. The authors then draw on the experience acquired in the field of e-commerce to examine the advisability of setting up alternative dispute resolution mechanisms available to the actors of the blockchain environment. Based on an analysis of existing BDRs, the authors examine whether and how BDRs are likely to avoid a denial of justice and bring legal certainty to disputes related to contractual relationships with DAOs formalized through smart contracts as well as disputes related to the governance of DAOs. The authors find that a BDR decision which can be directly enforced through smart contracts confers effective justice to the actors of the blockchain environment. Finally, the authors address the more delicate issue of the enforcement of a BDR decision on non-crypto assets. This approach shows that a type of justice based on cryptoeconomic incentives challenges the concept of fair justice. This could be an impediment to obtaining the assistance of state authorities for the enforcement of a BDR decision outside of the blockchain environment as this type of decision could be considered contrary to public policy.

The analysis is mostly based on Swiss private international law and major private international law conventions. In this chapter, the authors outline the contours of a new private justice system designed to provide decentralized autonomous justice to the actors of the crypto economy.

The paper is forthcoming in Bonomi and Lehmann (eds), Blockchain and Private International Law (Brill Nijhoff 2022)

Cross-Border Litigation in Central Europe – EU Private International Law Before National Court, is the tile of a collection of essays, edited  by Csongor István Nagy and just published by Kluwer.

Cross-Border Litigation in Central Europe, an indispensable reference book, provides a detailed understanding of the process of seeking justice in cross-border disputes in Central Europe. It is the first of its kind to offer a comprehensive and analytical overview of the judicial practice in the region and to make this case law accessible in English.

The book provides a critical insight into the case law of ten Central European States relating to various fields of EU private international law (general civil and commercial, insolvency, family and succession matters).

The contributions were written by Dora Zgrabljic Rotar, Tena Hosko, Katazyna Bogdzevic, Pavle Flere, Lucia Gandzalova, Justyna Gumula-Kedracka, Monika Jagielska, Elena Judova, Inga Kacevska, Wojciech Klyta, Vadim Mantrov, Gabor Palasti, Magdalena Sobas, Janos Szekely, Dace Trupovniece, Jiri Valdhans, Emod Veress, and Lucie Zavadilova.

Meanwhile, a paper issued from the research on which the book builds has appeared on SSRN. It is authored by Csongor Nagy and is titled EU Choice-Of-Law Rules before Hungarian Courts: Contractual and Non-Contractual Obligations.

The abstract reads as follows:

This article is based on the Hungarian strand of the multiyear CEPIL project carried out with the generous support of the European Commission Directorate General Justice and Consumers. One of the leading considerations behind the CEPIL project was that the value of private international law unification can be preserved only if EU private international law instruments are applied correctly and uniformly, hence, the European endeavours in the field should not and cannot stop at statutory unification but need to embrace the judicial practice and make sure that besides the vertical communication between the CJEU and national courts, there is also a horizontal communication between national courts, authorities and the legal community in general. The purpose of this publication is to contribute to this horizontal communication between Member State courts by providing an analytical insight into the Hungarian case-law on the Rome I and the Rome II Regulations.

Additional information on the edited book, including the table of contents, is available here.

The author of this post is Lydia Lundstedt, who is a Senior Lecturer at the Stockholm University.

In IRnova (C-399/21), decided on 8 September 2022, the CJEU clarified the interpretation of Article 24(4) of the Brussels I bis Regulation. The latter provision confers exclusive jurisdiction “in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered” upon “the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place”.

In its judgment, the Court ruled that Article 24(4) is to be interpreted as not applying to a dispute, in the context of an action based on an alleged status of inventor or co-inventor, concerning the determination of whether a person is entitled to certain inventions referred to in patent applications filed and patents granted in third countries.

I reported on the facts and the question referred here but a brief synopsis follows.

The Swedish company IRnova AB brought proceedings before the Swedish Patent and Market Court against the Swedish company FLIR Systems AB for a declaration that it was entitled to inventions referred to in certain European, US and Chinese patent applications and certain US patents on the ground that its employee was the true inventor (or co-inventor).

The Patent and Market Court dismissed the part of IRnova’s action concerning the patent applications filed in the US and China and the patent granted in the US. Incidentally, the court retained jurisdiction over the European applications which are governed by the lex specialis rules in the Protocol on Jurisdiction and the Recognition of Decisions in respect of the Right to the Grant of a European Patent.

IRnova AB appealed to the Patent and Market Court of Appeal, which asked the CJEU whether Article 24(4) could be applied to these types of entitlement disputes concerning patents registered and applied for in non-Member States.

The CJEU began by slightly reformulating the referring court’s question to refer to applications filed and patents granted in third States as opposed to non-Member States (paras 22-24). Thereafter, the CJEU established that the dispute had international character and therefore fell within the scope of the BIa Regulation (paras 25-31). Referring to its decision Owusu, C-281/02, the CJEU observed that international character may be based on the subject-matter of the dispute (here the patent applications and the patents) being connected to a third State.

Thereafter, the CJEU answered the question whether Article 24(4) applied to a situation such as the one in the Swedish proceedings. First, the CJEU observed that it follows from the wording of Article 24(4) that it concerns the courts of a Member State of registration and therefore the provision was not applicable to patents applied for and registered in third States (paras 32-35).

Second, the CJEU held that entitlement disputes, including those based on inventorship, are not “concerned with the registration or validity of patents” in the meaning of Article 24(4) (paras 36-49). In this regard, the CJEU recalled that the concept was autonomous and that it must not be given a wider interpretation than is required by its objective (paras 38-39).

The CJEU also recalled its case law in Duijnstee, 288/82 , GAT, C-4/03, and Hanssen Beleggingen, C-341/16 where it held that the rule on exclusive jurisdiction in what is now Article 24(4) is justified by the fact that the courts of the Member State where the patents are applied for or registered are best placed to adjudicate upon cases in which the dispute itself concerns the validity or lapse of a patent, the existence of the deposit or registration or an alleged right of priority by reason of an earlier deposit. It recalled further that an action which merely raises the question of who is the owner of a patent or whether a person has been correctly registered as the owner of a trade mark is not covered by that rule of exclusive jurisdiction because such questions are not closely linked in fact and law to the place where the right has been registered (paras 36-41).

The CJEU stated that the dispute in the Swedish proceedings did not concern these questions but only the question concerning the right to the inventions or to a part of them (para 42).

In this regard, the Court observed first that the question of who owns the inventions, which includes the question of who is the inventor, does not concern the application for an intellectual property right or the right as such, but the object of the right. The CJEU referred to its earlier case law on the justification for Article 24(4) and concluded that it was relevant in a case such as the one in the Swedish proceedings where the question relates only to the entitlement to object of the right, i.e. the invention (para 43).

Thereafter, the CJEU noted that the question of who is the inventor, which the CJEU noted was the sole issue in the Swedish proceedings, is a preliminary question and therefore distinct from that of whether a patent application has been filed or a patent granted. In addition, the CJEU stated that the dispute did not concern the validity an application, but seeks only to establish the right to the inventions themselves. The CJEU stated that the fact that a lack of entitlement to an invention may constitute a ground for refusal of the application is therefore not relevant to the jurisdiction to hear disputes concerning inventorship (paras 44-45).

Lastly, the CJEU stated that the preliminary question of who is an inventor is also distinct from that of the validity of the patent and that latter question was not part of the case in the Swedish proceedings.

The CJEU added that even if the national court was required to examine the claims in the patent applications or patents to determine each employee’s contribution to the invention, this examination does not concern the patentability of the invention.

The CJEU further added that infringement actions also require an in-depth assessment of the protection afforded under the law of the protecting country but that it had previously held that such actions were not covered by the rule on exclusive jurisdiction (paras 46-48).

In my opinion, the CJEU comes to a sensible outcome – the parties should not need to pursue duplicative proceedings in every granting third State with risk that inventorship is decided differently in different states.

The question of inventorship is not closely linked in fact to the state where the patent was applied for or granted as the relevant facts will have taken place where the invention was made, which in this case was most likely in Sweden. Although there is proximity in law to the State where the patent was applied for or granted (the CJEU noted that the Swedish court will likely need to apply US and Chinese law), inventorship disputes are mostly factual disputes concerning who actually came up with the inventive idea, and not the legal value of the parties’ contributions.

If IRnova succeeds with its case on the merits, an interesting question is how it will get the judgment enforced. It can use the Swedish judgment in support of a request before the US and Chinese authorities to persuade them to correct the applicant or owner. An interesting question is whether IRnova can request the Swedish court to order FLIR Systems to transfer the patent applications and patents to it.

Lastly, the decision has significant implications so it is surprising that the CJEU did not obtain a written opinion from the Advocate General. Indeed, the CJEU dealt with the question whether Article 24(4) applies to third States in a rather summary fashion.

The question whether Article 24 in general can be given reflexive effect either as a matter of EU law or national law has been hotly debated in the legal doctrine so I would have expected more than a textual argument to support the CJEU’s conclusion.

The Danish Supreme Court held in a judgment of 31 May 2022 (case 134/2018), that Danish law should be applied for tort liability for assaults committed during the military operation Green Desert in Iraq in 2004.

In the aftermath of the war in Iraq in 2003, Iraq was controlled and administrated by international coalition forces. Danish troops took part in the coalition between 2003 and 2007. In 2004, Danish and British troops collaborated with Iraqi military in a search and arrest operation called “Green Desert”. During the operation, several Iraqis claimed that they were subject to torture. For this maltreatment, 18 Iraqis filed a civil lawsuit against the Danish Defence Authority for tort compensation in Denmark.

In its judgment, the Danish Supreme Court found that it was proven that Iraqis had been subject to assault during operation Green Desert. Whether the Danish Defence Authority could be held liable for the assaults should be decided according to Danish law and the European Convention on Human Rights.

The conclusion to apply Danish law was not elaborated in the judgment. However, the Danish Supreme Court notes that pursuant to section 18 in the Coalition Provisional Authority’s Order 17, third party claims shall be dealt with “in a manner consistent with the Sending State’s laws, regulations and procedures”. Regardless of whether the order could be seen as having status of Iraqi law or not, the Supreme Court held that its status does not matter as it points out Danish law to be applicable. Perhaps, this statement by the Supreme Court can be interpreted as an allowing attitude to the doctrine of renvoi as it seems that a remission to Danish law would be accepted if Iraqi law would have been pointed out by Danish choice of law rules. As the judgment is not at all framed as a private international law matter, such conclusions shall probably be cautiously made.

In substance, the Danish Supreme Court held that the Iraqi plaintiffs were not entitled to compensation according to the Danish Damages Act’s Section 26 on liability for torts as it was not proven that assault was conducted by Danish troops. Nor was it proven that the Danish troops should have known or understood that collaborating Iraqi military personnel would conduct assault to the civilians. Eventually, the Supreme Court held that nor did the European Convention on Human Rights (ECHR) lead to a different result. In this part, the Supreme Court concluded that the alleged assaults were conducted on territory controlled by Iraq. Hence, Denmark lacked public international law jurisdiction, which is a prerequisite for application of the ECHR according to Article 1.

The DynamInt Research Group at Humboldt University (located in the heart of Berlin, close to the Brandenburg Gate) invites international post-docs in the field of European law (broadly understood) to apply for a research stay lasting between 3 and 6 months.

Applications are excepted on a rolling basis (no deadline). Successful candidates will receive a financial allowance and will be provided with a fully equipped working place. It is possible to teach classes while staying at Humboldt University. However, teaching is not mandatory.

Further information is available here.

The third issue of the Journal du droit international for 2022 was released in July. It contains two articles and several case notes relating to private international law issues.

In the first article, Caroline Kleiner (University of Paris Cité) discusses the private international law dimension of the sanctions against Russia (L‘application des « sanctions économiques » adoptées par l’Union européenne contre la Russie à la suite de l’invasion de l’Ukraine : éléments de droit international privé).

The English abstract reads:

The adoption of sanctions by the European Union is the main tool available to EU member states to react politically, legally and economically to Russia’s aggression against Ukraine. On an unprecedented scale, the sanctions initiated in 2014 in EU regulations following the annexation of Crimea and reinforced from 23 February 2022 are very diverse. On the one hand, restrictions of different intensity have been imposed on trade and financial matters. On the other hand, measures to freeze funds and economic resources are aimed at “target” persons and entities. These provisions, which are mandatory throughout the European Union and in respect of any economic activity carried out in whole or in part therein and in respect of any person who is a national of a Member State or who is incorporated under the law of a Member State, are being applied, however, according to a distinct mechanism. Sanctions-rule interfere with contracts as mandatory rules (lois de police), while the application of sanctions-decision is based on the method of recognition.

In the second article, Hélène Gaudemet-Tallon offers some thoughts on the recent draft code of private international law (Quelques réflexions sur le projet de Code français de droit international privé du 31 mars 2022).

The English abstract reads:

On 31 March 2022, a draft French Code of Private International Law was submitted to the Minister of Justice. This text was prepared by a group working under the chairmanship of Jean-Pierre Ancel (honorary president of the first civil chamber of the Court of Cassation). The project goes beyond what was requested in 2018 by Ms. Belloubet, Minister of Justice. Far from being a simple consolidation of the existing law, throughout its 207 articles, it proposes some new solutions and precise several acquired solutions. This article, after recalling the genesis of the project, shows the scope of the field covered, the plan adopted to deal with all issues of private international law, general theory of both conflicts of laws and conflicts of jurisdictions (jurisdiction and recognition and enforcement), special applications, proceedings, provisional measures, etc. However, the draft does not deal with international arbitration or jurisdictional immunities. Particularly interesting because the difficulty was high is the solution adopted to ensure the articulation between the French code and European law or international conventions : the primacy of European and conventional law is generally affirmed; then various articles contain numerous references to a particular European regulation or international convention. Sometimes the project extends the application of a European regulation to issues excluded by a regulation.

Without studying all the provisions of the project, this study draws the attention of the reader to particularly striking innovations : careful adoption of the method of recognition ; rejection of the distinction between available and unavailable rights and obligation for the judge to always apply the conflict rule ; full recognition of all foreign judgments without distinguishing according to their nature ; solutions proposed for divorce by private agreement ; new rules on filiation (rejection of the connection to the national law of the mother), medically assisted procreation with third-party donor, surrogacy, adoption. The important powers granted to the judge and the use of several flexible concepts should also be noticed (for example, procedural loyalty).

This study is intended to describe the project and to assess the importance of its future.

The table of contents of the issue can be accessed here.

The International Commission on Civil Status (ICCS) will host a conference, jointly organised with the Société de Législation Comparée, under the title Plurilingual Forms – Present and Future of International Cooperation in Civil Status Matters.

The conference will take place in Strasbourg on 21 September 2022.

Speakers (and chairs) include Hans Van Loon (former Secretary General of the Hague Conference on Private International Law), Paul Lagarde (Emeritus Professor at the University Paris I, former secretary general of the ICCS), Patrick Wautelet (University of Liège), Bojana Zadravec (President of the Slovenian Association of Administrative Staff, EVS -European Association of Registars), Olivier Guillod (University of Neuchâtel), Laura Martinez-Mora (Hague Conference on PIL), Nicolas Nord (Secretary General of the ICCS), Anatol Dutta (University of Munich), Camille Reitzer (Deputy Secretary General of the ICCS), Marie Vautravers (European Commission), Guillermo Palao Moreno (University of Valencia), Alexander Schuster (University of Graz), Andreas Bucher (Emeritus Professor at the University of Geneva).

The working languages will be French and English (presentations made in one language will be simultaneously translated into the other).

Further information can be found here.

The conference comes only a few weeks after the Strasbourg Convention of 14 March 2014 on the issue of multilingual extracts from civil status acts came into force internationally (on 1 July 2022), for Germany, Belgium and Switzerland.

This post was written by Paul Lorenz Eichmüller, University of Vienna.

Austrian law provides for an international forum necessitatis in Austria if this is necessary to avoid a denial of justice, i.e. if legal action abroad is (objectively) impossible or (subjectively) unreasonable, see § 28(1)2 Jurisdiktionsnorm (Civil Jurisdiction Act). The Austrian Supreme Court has recently issued four decisions (2 Nc 11/22y, 2 Nc 17/22f, 9 Nc 8/22h and 10 Nc 6/22x) in which it stated that bringing a claim for flight compensation in the UK is indeed unreasonable for Austrian claimants. This – admittedly, quite harsh – verdict shows once again Brexit’s negative impact on matters of civil jurisdiction.

The Austrian forum necessitatis

Compared to other European countries, the institution of a forum necessitatis takes a rather prominent role in the Austrian provisions on international jurisdiction in civil and commercial matters. If there is no other forum reasonably available to claimants with Austrian (or EU-) nationality or habitual residence/domicile in Austria, they can file an application to the Austrian Supreme Court to establish the jurisdiction of the Austrian courts. This procedure is called the “ordination” of jurisdiction. The cases covered by this provision range from instances where there are in fact no other countries whose courts would hear the claim, to cases where the other available fora are regarded as unreasonable – as determined on a case-by-case basis.

Even though the Supreme Court constantly reiterates that the notion of unreasonableness needs to be interpreted restrictively in order to avoid a general forum actoris in Austria (see RIS-Justiz RS0046322), its interpretation in practice is surprisingly broad. Rather obvious instances of unreasonableness include the non-enforcement of the foreign judgment in Austria; urgent proceedings abroad taking too long; a factual standstill of judicature in the respective country; severe doubts regarding the independence of the courts; or one of the parties being subject to political persecution abroad.

However, also significant additional costs of the foreign proceedings compared to litigation in Austria can constitute a ground for (subjective) unreasonableness; this includes the lack of legal aid; the lack of reimbursement of legal costs by the winner of the proceedings; or unusually high deposits as security for costs. In contrast, a less favourable position in the substantive law that is applied abroad is normally insufficient to justify an ordination of an Austrian forum necessitatis (RIS-Justiz RS0117751).

In relation to member states of the Brussels Ibis Regulation or the 2007 Lugano Convention, the ordination of a forum necessitatis will generally be impossible, as bringing a claim in these countries is not considered impossible or unreasonable (RIS-Justiz RS0112108). Since the end of the transitional period, the UK is no longer part of either of these instruments and thus subject to the general reasonableness test of the Austrian Supreme Court.

Flight Compensation as a Contentious Point

Unlike the Brussels Ibis Regulation, the domestic Austrian rules on international jurisdiction do not include a general jurisdictional head at the place of performance. The corresponding provision in § 88 JN is limited only to cases in which the place of performance was explicitly agreed upon in the contract and can be proven by a document signed by the respondent. The practical relevance of this head of jurisdiction is therefore negligible.

When it comes to flights operated by an airline based in a third country, there is thus neither a place of general jurisdiction nor any court with specific jurisdiction in Austria. If – like in one of the Supreme Court decisions (2 Nc 17/22f) – the airline has assets in Austria, the claimant can at least base the (exorbitant) jurisdiction of Austrian courts on the location of the airline’s assets (§ 99 JN). In all other cases of flight cancellation or delays (without assets of the airline in Austria), travellers living in Austria – even if they departed from an airport in Austria – would thus have to bring a claim at the airline’s seat in a third country. However, the decision of the third country will not necessarily be enforced in Austria. This is where the ordination of an Austrian forum necessitatis comes into play: No enforcement means that the judgment would be worthless, so the proceedings abroad are considered unreasonable for the claimant.

In all four of the recent decisions, Austrian claimants sought flight compensation from an airline based in the UK. However, after the UK left the EU, the reasonableness of an action against the airline at its seat in England also depends on the chances of the English judgment being recognised in Austria. While there is in fact an Austro-British treaty on the mutual recognition and enforcement of judicial decisions in civil and commercial matters from 1961, this treaty only guarantees the recognition of the decisions by “superior courts” (Art II(1)). In England, that would only be decisions by the High Court, the Court of Appeal or the Supreme Court (Art I(2)(a)). Due to the low amount of money usually in dispute in a flight compensation case, it will regularly be impossible to reach one of these courts. Thus, the recognition of a potential English judgment would fail, and this is the reason why an Austrian forum necessitatis was provided by the Supreme Court. Brexit has led to a step back into the 1980’s – when these issues were last discussed (RIS-Justiz RS0002320).

An Outlook

Due to an increasing number of ordination cases regarding flight compensation, the Austrian legislator has reacted and recently § 101a JN , providing for jurisdiction of the courts at the place of departure or arrival in all matters relating to the EU Flight Compensation Regulation. It is thus unlikely that situations like the ones decided will occur again.

Yet, these decisions continue to be of interest, for they show one thing very clearly: while Austria is in the fortunate situation to have a bilateral treaty with the UK that provides for the recognition of some (high-profile and high-value) decisions, it is far from covering everything. Particularly claims of lower value that will not reach the superior courts will not be enforced in Austria. With its forum necessitatis, Austria has found a way to minimise the negative jurisdictional side effects of Brexit for its citizens and residents, but Brexit still continues to pose us with problems we had considered solved a long time ago.

A quick update related to the insolvency regulation (Regulation 2015/848): on 30 August 2022 the Commission adopted Decision (EU) 2022/1437 confirming the participation of Ireland in Regulation (EU) 2021/2260 of the European Parliament and of the Council amending Regulation (EU) 2015/848 on insolvency proceedings to replace its Annexes A and B.

The Decision takes up the notification to the Commission of 31 May 2022 whereby Ireland notified its wish, in accordance with Article 4 of Protocol (No 21), to accept and be bound by Regulation (EU) 2021/2260 of the European Parliament and of the Council. The preamble explains that there are no specific conditions attached to the participation of Ireland in Regulation (EU) 2021/2260 and there is no need for transitional measures; the measure concerned by the current notification of Ireland merely updates the Annexes A and B to that Regulation containing the list of national insolvency proceedings and the list of national insolvency practitioners, respectively. The Decision has entered into force the day after its publication in the Official Journal, thus on 1 September 2022.

Those in Luxembourg on 8 September 2022 may want to attend the hearing in case C-393/21, Lufthansa Technik AERO Alzey. The request for a preliminary ruling comes from the Lietuvos Aukščiausiasis Teismas (Lithuania), and was lodged on 28 June 2021. It focuses on Article 23 of Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims. The provision addresses the stay or limitation of enforcement. The request will oblige the Court to decide on the scope, conditions of application and extent of the review carried out by a competent court or authority of the Member State of enforcement under Article 23(c), and on the possibility of simultaneously applying several measures referred to in this article. A final question raises the issue of the relationship between the stay of the enforcement procedure under the above mentioned Article 23, and that provided for by Article 44(2) of Regulation No 1215/2012.

The facts of the case are the following.

In enforcement proceedings, a bailiff operating in Lithuania is executing an order of the Amtsgericht Hünfeld (Local Court, Hünfeld, Germany) of 14 June 2019, on the basis of a European Enforcement Order certificate of 2 December 2019 regarding the recovery of a debt of EUR 2 292 993.32 from the debtor, Arik Air Limited.

Claiming that the certificate had been issued unlawfully because the procedural documents of the Local Court, Hünfeld, had not been duly served on it, thus causing it to miss the time limit for lodging objections, Arik Air Limited applied to the Landgericht Frankfurt am Main (Regional Court, Frankfurt am Main, Germany) for withdrawal of the European Enforcement Order certificate of 2 December 2019. In an order of 9 April 2020, that court stated that execution of the enforcement order of 24 October 2019 would be stayed if Arik Air Limited paid a security of EUR 2 000 000.

Arik Air Limited, requested the bailiff to stay the enforcement proceedings in the Republic of Lithuania until the debtor’s claims for withdrawal of the European Enforcement Order certificate had been examined in a final procedural decision of the court in Germany. The bailiff refused to stay the enforcement proceedings.

By order of 11 June 2020, the Kauno apylinkės teismas (District Court, Kaunas, Lithuania), before which an action regarding this refusal was brought, did not uphold the action. The court stated that the debtor’s request had already been examined by a court of the State of origin in the order of 9 April 2020 and, therefore, it had no grounds to examine it.

By order of 25 September 2020, the Kauno apygardos teismas (Regional Court, Kaunas) set aside the order of the court of first instance, upheld the action brought by Arik Air Limited, and ordered the stay of the enforcement proceedings pending a full examination of the applicant’s claims by a final judgment of the German court that had jurisdiction. The appellate court stated that, in view of the disproportionately great harm which might be caused in the enforcement proceedings, an application regarding a European Enforcement Order certificate to a court of the State where it was issued was a sufficient ground for staying the enforcement proceedings. Taking the view that there was nothing in the case file to confirm that the security specified in the order of the Regional Court, Frankfurt am Main, of 9 April 2020 had been paid, the appellate court concluded that there was no ground to believe that the question of the suspension of enforcement measures in the enforcement proceedings had been examined by the court of the State origin.

On 16 December 2020, the interested party, Lufthansa Technik AERO Alzey GmbH, brought an appeal on a point of law before the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania).

The questions referred read:

1. How, taking into account the objectives of Regulation  805/2004, inter alia the objective of accelerating and simplifying the enforcement of judgments of Member States and effective safeguarding of the right to a fair trial, must the term ‘exceptional circumstances’ in Article 23(c) of Regulation 805/2004 be interpreted? What is the discretion that the competent authorities of the Member State of enforcement have to interpret the term ‘exceptional circumstances’?
2. Are circumstances, such as those in the present case, related to judicial proceedings in the State of origin which decide a question regarding the setting aside of the judgment on the basis of which a European Enforcement Order was issued to be regarded as relevant when deciding on the application of Article 23(c) of Regulation  805/2004? According to what criteria must the appeal proceedings in the Member State of origin be assessed and how comprehensive must the assessment of the proceedings taking place in the Member State of origin that is carried out by the competent authorities of the Member State of enforcement be?
3. What is the subject matter of the assessment when deciding on the application of the term ‘exceptional circumstances’ in Article 23 of Regulation No 805/2004: must the impact of the respective circumstances of the dispute when the judgment of the State of origin is challenged in the State of origin be assessed, must the possible potential benefit or harm of the respective measure specified in Article 23 of the regulation be analysed, or must the debtor’s economic abilities to implement the judgment, or other circumstances, be analysed?
4. Under Article 23 of Regulation  805/2004, is the simultaneous application of several measures specified in that article possible? If the answer to this question is in the affirmative, what criteria must the competent authorities of the State of enforcement rely on when deciding on the merits and proportionality of the application of several of those measures?
5. Is the legal regime laid down in Article 36(1) of Regulation (EU) 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to be applied to a judgment of the State of origin regarding the suspension (or cancellation) of enforceability, or is a legal regime similar to that specified in Article 44(2) of that regulation applicable?

Sitting judges are C. Lycourgous, S. Rodin, J.C. Bonichot, L.S. Rossi, and O. Spineanu-Matei (reporting). An opinion has been requested from P. Pikamäe.

On the same day, the Court will render a three-judges decision (O. Spineanu-Matei reporting, sitting with S. Rodin and L.S. Rossi) in case C-399/21, IRnova. The request by the Svea hovrätt, Patent- och marknadsöverdomstolen (Sweden) was lodged on June 28, 2021. In the dispute on the merits, the company FLIR has applied for patents on certain inventions in inter alia the United States of America and China. IRnova brought an action seeking a declaration that IRnova has better entitlement to the inventions than FLIR. The action was dismissed at first instance on the ground that it is related so closely to the registration and invalidity of patents that the Swedish courts do not have jurisdiction to hear the case. IRnova has lodged an appeal against this dismissal decision before the referring court. This is thus a request for interpretation of Article 24(4) of Regulation (EU)  1215/2012 with just one question:

Is an action seeking a declaration of better entitlement to an invention, based on a claim of inventorship or co-inventorship according to national patent applications and patents registered in a non-Member State, covered by exclusive jurisdiction for the purposes of Article 24(4) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters?

Before getting into it, the Court will need to decide whether the Regulation applies at all, taking into account that the dispute arose between two companies having their registered office in the same Member State, and that it seeks to establish a right of ownership, probably also arising in Sweden. There is indeed a foreign element – the case concerns patent applications made and patents granted abroad: but this foreign element is not located on the territory of a Member State, but in China and the US.

The next PIL event will take place on September 15. The Court will then hand down its decision on C-18/21, Uniqa Versicherungen. The reference was sent by the Oberster Gerichtshof (Austria), and lodged January 12, 2021. It consists of just one question, on Regulation 1896/2006:

Are Articles 20 and 26 of Regulation 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure to be interpreted as meaning that those provisions preclude an interruption of the 30-day period for lodging a statement of opposition to a European order for payment, as provided for in Article 16(2) of that regulation, by Paragraph 1(1) of the Austrian Bundesgesetz betreffend Begleitmaßnahmen zu COVID-19 in der Justiz (Federal Law on accompanying measures for COVID-19 in the administration of justice), pursuant to which all procedural periods in proceedings in civil cases for which the event triggering the period occurs after 21 March 2020 or which have not yet expired by that date are to be interrupted until the end of 30 April 2020 and are to begin to run anew from 1 May 2020?

I reported here on the request. AG Collins’s opinion was delivered on March 31, 2022:

Articles 16, 20 and 26 of Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure do not preclude the adoption, in the circumstances of the COVID-19 pandemic, of a national measure that interrupted the 30-day time limit for lodging a statement of opposition to a European order for payment contained in Article 16(2) thereof.

The deciding chamber is one of five judges, namely K. Jürimäe (reporting), K. Lenaerts, N. Jääskinen, M. Safjan, and N. Piçarra.

On 19 September 2022, within the framework of the EU-FamPro Project, a conference titled Couples’ Property with Cross-Border Implications: Uniting Academic Discussions and Practical Concerns will be held in Almeria, followed by a seminar on Practical Challenges in the Application of the Twin Regulations. Remote participation is also available.

The conference and the seminar are the two main parts of an event of the EU-FamPro (E-training on EU Family Property Regimes) Project, co-funded by the European Union and conducted by the University of Camerino (coord.), the Law Institute of Lithuania, the University of Almeria, the University of Ljubliana, and the Rijeka University.

The Conference will provide an international forum where the Partners of the Project illustrate the contribution of the E-learning experience to the dissemination and understanding of the recent EU regulations on matrimonial property and property of registered partnerships (Twin Regulations), while academics, policymakers, and practitioners exchange their views on the different roles of legal professionals applying EU family property law.

The Seminar will focus on specific and cross-cutting issues related to the application of the Twin Regulations. The presentations are planned to cover the application of the Twin Regulations in the different national experiences, especially with regard to jurisdictional rules, determination of applicable law and party autonomy. Specific attention will also be given to the interaction of property regulations and Regulation on Succession.

Further info on the event is available on the Project website and the event programme is available here.

The International Institute for the Unification of Private Law (Unidroit) is conducting an online consultation on the draft Model Law on Factoring.

The online consultation will run for 12 weeks, from 29 July until 21 October 2022.

The purpose of the consultation is to: (1) Raise awareness about the instrument; (2) Ensure that the instrument is well suited to application in different contexts, including both civil law and common law jurisdictions as well as developing economies, emerging markets, and developed economies; (3) Seek feedback from parties engaged in factoring on whether the instrument sufficiently addresses issues that arise under existing legal frameworks and will improve factoring arrangements in those States that implement the Model Law; (4) Solicit comments on the drafting of the instrument itself.

The public consultation has three aspects:

1. The launch of this webpage on the UNIDROIT website allowing interested parties to access the draft Model Law on Factoring and facilitating the submission of comments.
2. The circulation of the draft Model Law on Factoring directly to interested parties.
3. The organisation of one or more consultation events to discuss the content of the draft instrument with stakeholders.

Further information, including on the draft Model Law on Factoring itself, is available here.

This post was contributed by Dr. Vincent Richard, who practices with Wurth Kinsch Olinger in Luxembourg.

The end of the summer is the right time to draw readers’ attention to the recent entry into force in all EU Member States except Denmark of the Evidence Regulation recast on 1 July 2022 (Regulation 2020/1783).

The Evidence Regulation facilitates the cross-border taking of evidence by allowing a court or authority to request a court located in another Member State to take evidence there. The Regulation also allows courts to take evidence directly from another Member State after having asked permission from the central authority of that Member State.

The main goal of the recast is to bring the Evidence Regulation into the digital era by imposing that all communications and exchanges of documents should be carried out through a decentralised IT system such as e-CODEX and by encouraging the taking of evidence through videoconferencing. Additionally, the recast facilitates the direct taking of evidence and it introduces interesting changes to the notion of “court” under the Regulation.

Electronic Transmission of Requests through e-CODEX

The main objective of the recast is to impose an electronic transmission of requests and documents among courts using the Evidence Regulation. To that end, Article 7 (former Article 6 of Regulation 1206/2001) was entirely modified to provide for a fully dematerialised procedure and to allow electronic signatures, governed by Regulation no 910/2014 on electronic identification.

Communication between courts relies on the e-CODEX system, which is a decentralised and interoperable system for cross-border communication, allowing secure communication between preapproved and identifiable users such as judges and clerks. The e-CODEX system has already been used to connect the commercial registers of the Member States and in several pilot projects. The solution has been tested by a limited number of States in the application of the European Payment Order, Small Claims and European Account Preservation Order Regulation. The Regulation on the taking of evidence and the Regulation on the service of documents are the first texts on judicial cooperation in civil matters to require Member States to deploy access points to the e-CODEX system, but the Commission wishes to generalize the method, both in civil and criminal matters. On this issue, the reader may consult a recent blog post by Marta Requejo on the entry into force of the e-CODEX Regulation.

Because of the technical difficulties that this transformation entails, the relevant article (Article 7) did not enter into force in July 2022 with the rest of the Regulation but it will enter into force in 2025, three years after the adoption of the implementing regulation defining technical specifications (Commission implementing regulation (EU) 2022/422 of 14 March 2022).

Taking of Evidence through Videoconferencing

Where the taking of evidence requires the hearing of a person who is not in the territory of the requesting court, the Regulation encourages Member States to use videoconferencing whenever possible (Articles 12 and 20). This technology can be used to hear a party, a witness, an expert or even a child in the context of the application of Regulation 2019/1111. The recast encourages the use of videoconferencing, whether the taking of evidence is carried out by the requested court or directly by the requesting court.

The Notion of “Court” under the Regulation

Article 2 of the recast provides two definitions. One on the “decentralised IT system” and one on the notion of “court”. The latter definition is worth mentioning because it aimed to close the debate as to whether notaries can use the Evidence Regulation. (On the broader issue of notaries in EU PIL, see the post by Martina Mantovani on this blog, here)

Under the recast, the notion of court encompasses not only courts per se but also “other authorities in Member States as communicated to the Commission under Article 31(3), that exercise judicial functions, that act pursuant to a delegation of power by a judicial authority or that act under the control of a judicial authority, and which are competent under national law to take evidence for the purposes of judicial proceedings in civil or commercial matters”.

Hence, Member States are free to delegate the taking of evidence to notaries or court clerks and other Member States must respect this choice as long as it was communicated to the Commission. Recital 5 specifies that this definition includes authorities that qualify as courts under other Union legal acts, such as Brussels I bis, Brussels II ter and the Succession Regulation.

Direct Taking of Evidence

Article 19 to 21 of the recast further encourages requesting courts to use direct taking of evidence after asking permission from the central authority where the evidence is located. If that central body does not answer within 30 days of acknowledgement of receipt of the request, article 19(5) provides that the requesting court may send a reminder. Interestingly, if the requesting court does not receive a reply within 15 days of the acknowledgement of receipt of the reminder, the request for the direct taking of evidence shall be considered accepted. The Regulation, therefore, provides that the silence of the central body is equivalent to implicit acceptance of the taking of evidence on its territory. Exceptionally, the central body may, however, still refuse the taking of evidence after the deadline until the moment of the actual direct taking of evidence.

Conclusion

The Evidence Regulation has never been used much but it remains a useful tool at the disposal of judges and counsels who need to gather evidence abroad in cross-border disputes. The introduction of the e-CODEX system and the use of videoconferencing should speed up the process of obtaining evidence abroad.

Moreover, the recast foreshadows the method that will be followed in judicial cooperation in the coming years and it will be interesting to observe the implementation of e-CODEX in all Member States.

The European Commission has announced that the European Union and Ukraine both joined the 2019 Hague Judgments Convention today. More specifically, the EU has acceded and Ukraine has ratified the Convention on 29 August 2022.

Didier Reynders, EU Commissioner for Justice, said:

Today‘s accession is the culmination of years of intense efforts. By being the first to accede to the Convention together with Ukraine, the European Union paves the way for others to join soon. The wider the accession rate of States to the Hague Judgments Convention, the more powerful an instrument it will become for the benefit of more citizens, more companies, and wider international trade and investment.

The Convention will enter into force for the EU and Ukraine on 1 September 2023.

A delicate question will then be whether EU Member States will apply the Convention to judgments issued by courts located in any part of Ukraine under Russian “control” (whatever that may mean, and if any by then).

Unless Russia, which has signed the Convention, becomes a Contracting State in the meantime.

Following the abolition of exequatur by the Brussels I bis Regulation (Article 39), a new model (application for refusal of enforcement, Articles 46-51) has been introduced. So far, case law has been scarce in the vast majority of Member States. Greece was no exception to the rule.

A dispute between a Cypriot and a Greek company led to a series of judgments, which demonstrate the problems of mixing EU with domestic procedures. The facts of the case are complicated, at least for Greek practice standards, departing from the average scheme of creditor v debtor.

Facts

Stage 1: Cyprus

The case began in Cyprus. A Cypriot aviation company (creditor = C) started litigation against another Cypriot company before the district court of Nicosia (debtor 1 = D1). C requested the return of a Cessna aircraft, of which it was the owner. The aircraft was leased to D1. The latter did not appear in the proceedings. The default judgment was served to D1. At some point, C was informed that the aircraft was not anymore in Cyprus. D1 had subleased the aircraft to a private aviation company situated in Thessaloniki (debtor 2 = D2).

Stage 2: Greece

In light of the above circumstances, C filed an action against D2 before Thessaloniki courts. However, ordinary proceedings do not offer chances of a speedy dispute resolution. Indeed, the hearing of the action is scheduled to take place end September 2022. C had not time to lose. It obviously was in a dire need to get hold of the aircraft as soon as possible. Therefore, five days after filing the action, C decided to follow a different path: It served both the judgment and the certificate of Article 53 of the Brussels I bis Regulation (issued by the Nicosia court) to D2, requesting the return of the aircraft, in accordance with the order of the Cypriot court.

Stage 3: The remedies of D2

Faced with the sword of Damocles, D2 opened three sets of proceedings: an application for refusal of enforcement; an action to oppose execution (five days after filing the above application); an application to suspend enforcement (filed same day with the action).

The grounds of defence were identical: Some of the grounds referred to the classic impediments featured under Article 45 of the Brussels I bis Regulation, namely public policy and violation of the right to be heard, aiming at the refusal of enforcement. The remaining grounds challenged the execution proceedings.

Judgements

The rulings of the Thessaloniki courts:

1. The first decision (Thessaloniki Court of first Instance, 19 November 2021, unreported) concerned the action to oppose execution. The court did not enter into the merits of the case. It stated that, taking into account the melange of grounds against enforceability and enforcement, it must stay proceedings, until the court seised with the application for refusal of enforcement renders its ruling. The court underlined that it had no powers to examine the grounds against the execution proceedings, because D2 explicitly requested the court to examine the latter grounds (i.e., those against execution proceedings), only if it rejects the former. (i.e., those against enforceability)
2. The second decision (Thessaloniki Court of first Instance, 16 February 2022, unreported) concerned the application for refusal of enforcement. Again, the court did not enter into the merits of the case. A number of issues were in need of clarification, so that the court could render judgment. Therefore, the court ordered the stay of proceedings, requesting evidence with respect to the following issues:

First, the court was not aware of the right of D2 to challenge the Cypriot judgment in the state of origin, pursuant to Cypriot law of civil procedure.

Second, the court was not aware of the Cypriot provisions on the service of process to legal entities.

Third, the court requested the original certificate of the service of process to D1.

Fourth, the court requested the production of a document, which will certify whether the Cypriot judgment is final and conclusive

3. The third decision (Thessaloniki Court of first Instance – summary proceedings, 9 March 2022, unreported) concerned the application to suspend enforcement. It focused on the defence raised by D2 with respect to the certificate under Article 53. Upon scrutiny of the certificate, the court traced two defects: First, the certificate stated that the judgment was rendered in contradictory proceedings, although the judgment was given in default of appearance, as evidenced in the judgment issued by the Nicosia court. Second, the certificate did not include the date of service. The above were considered as vices of the enforceable foreign judgment, on the grounds of which the execution is founded. Therefore, the court ordered the temporary stay of execution, until the judgment on the action to oppose execution id rendered. NB: No reference was made to Article 44 Brussels I bis Regulation

Assessment

On a European level, judgments dealing with refusal of enforcement under the Brussels I bis Regulation are a sheer rarity. This may be evidenced by reading the reports published in the JUDGTRUST and EFFORTS projects.

Greece has not taken steps to clarify the landscape concerning Article 47 Brussels I Regulation. Greek legal scholarship supports unanimously the right of the judgment debtor to file a single remedy, challenging both enforceability and enforcement, i.e., an action to oppose execution. This has been accepted by the courts in the case at hand. However, D2 opted for the opposite solution: Applying prevailing lawyer tactics, it filed two separate documents, accumulating all possible grounds in each of them. It didn’t work the way it was expected. Luckily, D2 managed to suspend execution. Hence, the battle is still on ground zero. More judgments will follow, most probably reaching the Supreme Court.

Given that the courts did not enter into the merits (save the court ordering suspension of execution based on substantial evidence / the balance of probabilities), many intriguing issues are left unanswered: The right of C to initiate execution against a non-litigant in the country of origin; the obligation of D2 to challenge the Cypriot decision, without being a party to the proceedings; the significance of the errors found in the certificate under Article 53 on the level of enforceability. These are matters which will surely be scrutinized by the courts in the forthcoming proceedings. However, before concluding this post, it should be mentioned that the courts referred to three core rulings of the CJEU, offering guidance for the next set of litigation, namely the ruling of 2016 in the case of Rudolfs Meroni v Recoletos, the ruling of 2015 in the case of Diageo Brands BV, and the ruling of 2012 in Trade Agency.

P.S. A recent decision of the Thessaloniki Court of first instance, issued at the end of December 2021, examined the application for refusal of the Greek company against the enforcement of a judgment issued by the court of Reggio Emilia in 2021. More information about the case is available here.

The latest issue of the IPRax (Praxis des Internationalen Privat- und Verfahrensrechts) will be published on 1 September 2022. It contains a number of interesting articles and case comments regarding issues of jurisdiction and applicable law. The table of contents is available here. The following abstracts have been kindly provided to us.

J. Richter, Cross-border service of writs of summons according to the revised EU Service Regulation

The service of judicial documents, particularly the service of writs of summons, is of central importance in civil proceedings. In cross-border proceedings, service of legal documents poses particular problems, which are addressed by the European Regulation on the Service of Documents. The revision of this regulation, which will enter into force on 1 July 2022, provides an opportunity to examine the current and future rules by taking the example of the international service of writs of summons.

G. van Calster, Lex ecologia. On applicable law for environmental pollution (Article 7 Rome II), a pinnacle of business and human rights as well as climate change litigation

The European Union rules on the law that applies to liability for environmental damage, are an outlier in the private international law agenda. EU private international law rules are almost always value neutral. Predictability is the core ambition, not a particular outcome in litigation. The rules on applicable law for environmental damage, contained in the Rome II Regulation on the law that applies to non-contractual obligations, are a clear and considered exception. Courts are struggling with the right approach to the relevant rules. This contribution maps the meaning and nature of those articles, their application in case-law, and their impact among others on business and human rights as well as climate change litigation.

M. Castendiek, “Contractual” rights of third parties in private international law

Although contractual rights are usually limited to the parties, almost all jurisdictions in Europe recognize exceptions of this rule. Whereas those “contractual” rights of third parties are strictly limited in common law countries, German and Austrian Law even extend contractual duties of care on third persons related to the parties. Prior to the Rome Regulations, the conflict-of-law judgments on those “contracts with protective effect in favour of third parties” differed between German and Austrian courts.
The article points out that a consistent jurisdiction on this issue needs a clear distinction between contractual and non-contractual rights even between the parties of the contract. It points out that the Regulation Rome I covers only obligations that would not exist without the contract. Those obligations remain contractual even if they entitle a third party.
“Contractual” duties of care corresponding with negligence in tort, on the other hand, fall within the scope of the Regulation Rome II. For the contracting parties as well as for third parties, the conflict-of-laws in claims following the disregard of such duties is determined by the application of Article 4 Regulation Rome II. The article provides criteria to determine whether the close connection rule in Article 4(3) Regulation Rome II can lead to the application of the law governing the contract.

C. von Bary, News on Procedural Consumer Protection from Luxemburg: Consumer Status and Change of Domicile

In two recent decisions, the CJEU continues to refine the contours of procedural consumer protection in cross-border disputes. In the case of a person who spent on average nine hours a day playing – and winning at – online poker, the court clarified that factors like the amount involved, special knowledge or the regularity of the activity do not as such lead to this person not being classified as a consumer. It remains unclear, however, which criteria are relevant to determine whether a contract is concluded for a purpose outside a trade or profession. Further, the CJEU stated that the relevant time to determine the consumer’s domicile is when the action is brought before a court. This seems to be true even if the consumer changes domicile to a different member state after the conclusion of the contract and before the action is brought and the seller or supplier has not pursued commercial or professional activities or directed such activities at this member state. This devalues the relevance of this criterion to the detriment of the professional party.

W. Voß, The Forum Delicti Commissi in Cases of Purely Pecuniary Loss – a Cum-Ex Aftermath

Localising the place of damage in the context of capital investment cases is a perennial problem both under national and European civil procedural law. With prospectus liability having dominated the case law in the past decades, a new scenario is now increasingly coming into the courts’ focus: liability claims resulting from cum-ex-transactions. In its recent decision, the Higher Regional Court of Munich confirms the significance of the place of the claimant’s bank account for the localisation of purely financial loss in the context of sec. 32 German Civil Procedure Code but fails to provide any additional, viable reasoning on this notoriously debated issue. The decision does manage, however, to define the notion of principal place of business as delimitation of the scope of application of the Brussels regime convincingly. Incidentally, the text of the judgment also proves an informative lesson for the recently flared-up debate about anonymization of judicial decisions.

L. Hornkohl, International jurisdiction for permission proceedings under the German Telemedia Act (TMG) in cases of suspected abusive customer complaints on online marketplaces

In its decision of 11 March 2021, the Cologne Higher Regional Court denied the international jurisdiction of the Cologne courts for permission proceedings under the German Telemedia Act (TMG) in cases of suspected abusive customer complaints in online marketplaces. The Cologne court decision combined several precedents of the German Federal Court and the European Court of Justice. Although the Cologne Higher Regional Court decided that permission proceedings constitute a civil and commercial matter within the meaning of the Brussels I Regulation, international jurisdiction could not be established in Germany. The place of performance according to Art. 7 No. 1 lit. b second indent Brussels Ibis Regulation must, in case of doubt, uniformly be determined at the place of establishment of the online marketplace operator in Luxembourg. Article 7 No. 2 of the Regulation also does not give jurisdiction to German courts. The refusal to provide information per se is not a tort in the sense of Article 7 No. 2. Furthermore, there is no own or attributable possibly defamatory conduct of the platform operator. Contradictory considerations of the German legislator alone cannot establish jurisdiction in Germany.

A. Spickhoff, Contract and Tort in European Jurisdiction – New Developments

The question of qualification as a matter of contract or/and of tort is among others especially relevant in respect to the jurisdiction at place of performance and of forum delicti. The decision of the court of Justice of the European Union in res Brogsitter has initiated a discussion of its relevance and range to this problem. Recent decisions have clarified some issues. The article tries to show which. The starting point is the fraudulent car purchase.

R.A. Schütze, Security for costs for UK plaintiffs in German civil proceedings after the Brexit?

The judgment of the Oberlandesgericht Frankfurt/Main deals with one of the open procedural questions of the Brexit: the obligation of plaintiffs having permanent residence in the United Kingdom to provide security of costs in German civil proceedings. The Court has rightly decided that from January 1st, 2021 plaintiff cannot rely on sect. 110 par. 1 German Code of Civil Procedure (CCP) anymore as the United Kingdom is no longer member of the EU. If the plaintiff has lodged the complaint before January 1st, 2021, the obligation to provide security of costs arises at that date and security can be claimed by respondent according to sect. 110 CCP. However, the Court has not seen two exceptions from the obligation to provide security for costs according to sect. 110 par. 2 no. 1 and 2 CCP which relieve plaintiff from the obligation to provide security of costs if an international convention so provides (no. 1) or if an international convention grants the recognition and execution of decisions for costs (no. 2). In the instant case the court had to apply art. 9 par. 1 of the European Convention on Establishment of 1955 and the Convention between Germany and the United Kingdom on Recognition and Execution of Foreign Judgments of 1960, both Conventions not having been touched by the Brexit. Facit therefore: claimants having permanent residence in the United Kingdom are not obliged to provide security for costs in German Civil proceedings.

H. Roth, Qualification Issues relating to § 167 Civil Procedure Code (Zivilprozessordnung, ZPO)

§ 167 of the Civil Procedure Code (ZPO) aims to relieve the parties of the risk accruing to them through late official notification of legal action over which they have no control. This norm is part of procedural law. It is valid irrespective of whether a German court applies foreign or German substantive law. The higher regional Court (Oberlandesgericht) of Frankfurt a.M. found differently. It holds that § 167 should only be considered when German substantive law and thus German statute of limitations law is applied.

A. Hemler, Undisclosed agency and construction contract with foreign building site: Which law is applicable?

Does the term “contract for the provision of services” in Art 4(1)(b) Rome I Regulation include a building contract with a foreign building site? Or should we apply the exception clause in Art 4(3) Rome I Regulation if the building site is abroad? Which law governs the legal consequences of undisclosed agency, i.e. how should we treat cases where a contracting party acts as an agent for an undisclosed principal? Furthermore, what are the legal grounds in German law for a refund of an advance payment surplus in such a building contract? In the case discussed, the Oberlandesgericht (Higher Regional Court) Köln only addressed the latter question in detail. Unfortunately, the court considered the interesting PIL issues only in disappointing brevity. Therefore, based on a doctrinal examination of the exception clause in Art 4(3) Rome I Regulation, the paper discusses whether the scope of the general conflict of laws rule for contracts for the provision of services should exclude building contracts with a foreign building site by virtue of a teleological limitation. It also sheds light on the dispute around the law governing cases of undisclosed agency. The paper argues that Art 1(2)(g) Rome I Regulation is not applicable in this regard, i.e. the issue is not excluded from the Rome I Regulation’s scope. Instead, it is covered by Art 10(1) Rome I Regulation; hence, the law governing the contract remains applicable.

S.L. Gössl, Uniqueness and subjective components – Some notes on habitual residence in European conflict of laws and procedural law

The article deals with the case law of the ECJ on the habitual residence of adults, as addressed in a recent decision. The ECJ clarified that there can only ever be one habitual residence. Furthermore, it confirms that each habitual residence has to be determined differently for each legal acts. Finally, in the case of the habitual residence of adults, subjective elements become more paramount than in the case of minors. In autonomous German Private International Law, discrepancies with EU law may arise precisely with regard to the relevance of the subjective and objective elements. German courts should attempt to avoid such a discrepancy.

D. Wiedemann, Holidays in Europe or relocation to Bordeaux: the habitual residence of a child under the Hague Convention on International Child Abduction

A man of French nationality and a woman of Chilean nationality got married and had a daughter in Buenos Aires. A few months after the birth of their daughter, the family travelled to Europe, where they first visited relatives and friends and finally stayed with the man’s family in Bordeaux. One month and a few days after they arrived in Bordeaux, mother and daughter travelled to Buenos Aires and, despite an agreement between the spouses, never returned to Bordeaux. The father in France asked Argentinean authorities for a return order under the HCA. According to the prevailing view, the HCA only applies, if, before the removal or retention, the child was habitually resident in any contracting state except for the requested state. The court of first instance (Juzgado Civil) assumed a change of the child’s habitual residence from Argentina to France, but, considering that the lack of the mother’s consent to move to France results in a violation of the Convention on the Elimination of All Forms of Discrimination against Women, it granted an exception under Art. 20 HCA. The higher court (Cámara Nacional de Apelaciones en lo Civil) and the Argentinian Supreme Court (Corte Suprema de Justicia de la Nación) required the manifestation of both parents’ intent for a change of the child’s habitual residence. The higher court saw a sufficient manifestation of the mother’s intent to move to France in the termination of her employment in Buenos Aires and ordered the return. In contrast, the CSJN refused to give weight to the termination of employment as it happened in connection with the birth of the daughter.

H.J. Snijders, Enforcement of foreign award (in online arbitration) ex officio refused because of violation of the defendant’s right to be heard

With reference to (inter alia) a judgement of the Amsterdam Court of Appeal, some questions regarding the consideration of requests for recognition and enforcement of foreign arbitral awards in the Netherlands are discussed. Should the State Court ex officio deal with a violation of public order by the arbitral tribunal, in particular the defendant’s right to be heard, also in default proceedings like the Amsterdam one? In addition, which public order is relevant in this respect, the international public order or the domestic one? Furthermore, does it matter for the State Court’s decision that the arbitral awards dealt with were issued in an online arbitration procedure (regarding a loan in bitcoin)? Which lessons can be derived from the decision of the Amsterdam Court for drafters of Online Arbitration Rules and for arbitral tribunals dealing with online arbitration like the arbitral e-court in the Amsterdam case? The author also points out the relevance of transitional law in the field of arbitration by reference to a recent decision of the Dutch Supreme Court rejecting the view of the Amsterdam Court of Appeal in this matter; transitional law still is dangerous law.

This post was authored by François Mailhé, who is Professor of Private Law at the University of Picardie Jules Verne. It is the fourth in a series of posts regarding the ruling of the European Court of Justice, of 20 June 2022, in the case of London Steam-Ship Owners’ Mutual Assistance Association Ltd v Spain. The first post was contributed by Adrian Briggs, the second one by Gilles Cuniberti, and the third one by Antonio Leandro.

Much has already been said on this case and this post does not contend to address all the issues both dealt with and raised by the decision.

Rather, I would like to submit, as a summer food for thought, a topical methodological problem exampled by this decision after several others: that of the bias tending to analyse all problems through the articles of the Regulation at stake. More precisely, I would suggest Brussels I as a whole shouldn’t have been applied in that case and that the reason for those opposite findings by the ECJ can also be explained because it preferred interpreting article 34 rather than the scope of the Regulation as a whole.

It all starts with what I contend to be a poorly presented prejudicial question. It did ask whether, first, the English decision at stake was a “judgment” preventing recognition of the Spanish decision under Article 34 of Brussels I, second if it may be such even if it was taken in accordance with the Arbitration Act 1996. The question therefore focused on Article 34 and, by doing so, begged for the answer.

Indeed, if one looks at the issue through Article 34 and the notion of irreconcilability, then the Hoffmann case, on Article 34’s ancestor, Article 27 Brussels Convention, is the relevant case-law. In that decision, the ECJ held that a decision on the status of a natural person, a matter outside the scope of the Convention, could still be considered from Article 27 perspective as long as it “entailed legal consequences which were mutually exclusive” with the other judgment. It was a very pragmatic decision, allowing to solve the conflict between Article 27 (that solved the problem) and Article 1 (on the scope of the Convention). It allowed to disregard the subject-matter of the judgment if it may have consequences in the field of what was the Brussels convention at the time. Disregarding the arbitration exclusion was, therefore, an obvious choice considering the phrasing of the question.

What is more, asking whether Article 34 could be applied even if the judgment had a specificity under national law (the Arbitration Act 1996) was also a good way to get a specific answer. National specificities are obviously irrelevant.

What was relevant, though, was the topic of this national act: arbitration. There lied the problem.

Article 1(2) had been forgotten in the question and bypassed too quickly by the Court in its answer, who considered the problem was identical to that in Hoffmann. But what worked for 1(2)(a) was not adapted to all other exclusions of Article 1(2). Relevant for a conflict of substance (status of natural persons, succession and wills, etc.) since its solution eventually only considers substance (that of the consequences of those conflicting decisions), it is hardly adapted to procedural exceptions. Arbitral awards, and therefore decisions about them, intervene almost by essence on contractual and liability matters, all matters dealt with by the Regulation. Most often, the final decision will be about such remedies as liability and damages, or avoidance of a contract. How may such a decision not be conflicting with other judicial decisions between the same parties and matters?

The problem of arbitration is that it is not a different matter, hence no different decisions, but a different procedure. Using an analysis of the substance of any final award and an associated judgment therefore amounts to strip the arbitral aspect of the litigation and to deprive the exclusion clause of article 1(2)(d) of the Regulation of any effet utile. One may just have to compare with what could have been the reasoning with a judgment pronounced within the scope of the Insolvency Regulation recast. There again, comparing the substance of the decisions would have revealed a potential conflict between mutually exclusive legal consequences, and therefore, according to that line of reasoning, the exclusion of the Insolvency Regulation…

Falling back on Article 34 and the Hoffmann decision was therefore too simple a way to bypass the arbitration issue. In the conflict between the problem to solve and the scope of the Regulation, the latter is obviously to be addressed first. Indeed, there is no real conflict: there was no question, once Brussels I would have been declared applicable, that the issue would have to be solved by Article 34… The question of the scope of a Regulation arises first since its rules only play within its limits. And the London Steam-Ship case shows how such a line of reasoning is not only an issue of logic, but also of policy. The policy issue, indeed, was not the narrow interplay between two such decisions, but rather the scope of the arbitration exclusion in Brussels I, an issue that has not always been clearly addressed. This issue of the limits of the Regulation itself should have been at the core of the prejudicial question, not the conditions of Article 34 facing a specific judgment.

It is not the first time such a narrow analysis is at play, though. One may remember, for example, the Owusu decision. Where, in that decision, the question was whether or not forum non conveniens was compatible with the Convention, the Court went in depth as to the “imperative” nature of the sole Article 2 of the Convention to reject it. This method prevented the Court to pose a principle of exclusion of forum non conveniens within the scope of the Brussels Convention itself, a solution far simpler (and more efficient) than interpreting its Article 2, which was not answering that problem at all. Indeed, resorting to specific articles of the Regulation, silent on new issues, often leads to just ignoring them.

I do not know whether, at least in this London Steam-Ship case, the Court was perfectly aware of this methodological choice. But it is that of a young Court, applying a young law. A French author cannot but think of the exegetic school of French law that endured in case-law for decades after the Code civil was enacted, restricting itself to the strict meaning of its articles even when new issues arose. This is what the ECJ did, here again, by preferring to interpret the technical rule rather than trying a systemic analysis.

The Court has found maturity in other branches of European law, displaying much subtility and a much wider vision to address complex issues. Private international law, as this other branch of law harmonising relations between member State laws, could benefit from such a change in perspective.

The latest issue of GRUR International (Journal of European and International IP Law) features an article by Pedro De Miguel Asensio, titled Protection of Reputation, Good Name and Personality Rights in Cross-Border Digital Media”.

The abstract reads:

Following the recent judgments of the Court of Justice in Mittelbayerischer Verlag and Gtflix tv, this paper analyses the European Union framework in relation to the enforcement of rights relating to personality, including those of legal persons, against harmful content posted online. As regards jurisdiction, special attention is given to the scope of the centre of interest of the victim as ground for jurisdiction. Furthermore, the fragmentation that results from attributing jurisdiction to the courts of the place(s) where the damage occurs under the so-called mosaic approach is discussed. Particular attention is devoted to the difficulties that arise in relation to the broad understanding by the Court of Justice of the place where the damage occurs as the connecting factor and its position regarding the mere accessibility of online content as the decisive element for determining jurisdiction. Additionally, the interplay between jurisdiction and choice of law and its implications on the territorial scope of orders and the cross-border recognition of judgments are considered.”

Further information can be found here.

This post was written by Stefan Leible and Felix M. Wilke (both University of Bayreuth). It is the fourth in a series of posts on the French draft code of private international law of March 2022 (the previous posts in the series discussed the issues of renvoi, foreign law and the recognition of marriages celebrated abroad). It is based on an article by the authors (in French) forthcoming in the Revue critique de droit international privé. The English manuscript of that article can be found SSRN here (SSRN).

The outlook that France might soon have a full private international law (PIL) code can cause some envy in a German PIL scholar. After all, Germany does not have – nor will it have it in the foreseeable future – such a code. To be sure, a big part of German conflict-of-laws provisions can be found in one place, i.e. the Introductory Act to the Civil Code (EGBGB). But this Act overall is not limited to PIL issues. Moreover, there is no piece of legislation exclusively and comprehensively devoted to questions of cross-border proceedings in civil matters. International jurisdiction outside the scope of EU law typically must be determined by applying the rules for local jurisdiction/venue “double-functionally” (on the prevalence of this concept in the EU, see the project (see here). And while the German Code of Civil Procedure (ZPO) expressly addresses other cross-border issues (such as service abroad or recognition and enforcement of foreign decisions), it only does so in the context of the respective subject matter (e.g. service in general and effects of decisions in general). Hence, these provisions are scattered across the Code.

Nevertheless, we hope some remarks from a German perspective may be of interest. At the risk of coming across as stereotypical German (PIL) scholars, we focus on the General Part of the Draft Code in this contribution. The readers may rest assured that our forthcoming article in the Revue critique de droit international privé has a broader approach.

Idea and Scope of the General Part

The general part (Book I: “General Rules” = Articles 1-33) of the Draft Code contains provisions on conflict of laws as well as on procedure, including four “general general” provisions applying to both areas. The idea of “factoring out” provisions in this way obviously speaks to us, with the German Civil Code (BGB) arguably being the pinnacle of this legislative technique. True, to organize provisions in this way can run contrary to the accessibility of a legal instrument and therefore could be detrimental to one of the main goals of the Draft Code (see the Report of the Working Group (“Report”), p. 7). As the level of abstraction is still rather low, however, the advantage of not having to repeat the same provisions over and over (or at least to insert a plethora of references across the code) outweighs this risk. Furthermore, some of the general issues of PIL tend to appear to outsiders as arcane. Hence, it is beneficial for legal clarity to make some of them explicit.

The general part in the field of conflict of laws contains many of the usual suspects. It comes as no surprise in particular that there are provisions on renvoi (Article 8 of the Draft Code) and public policy (Article 11 of the Draft Code); we are not aware of any code of private international law anywhere in the world that fails to address these issues. It is commendable that a provision on characterisation (Article 6 of the Draft Code) has been drafted, following trends in other countries. The basic German approach (characterisation lege fori) is the same as in the Draft Code, but there is no provision to this effect. Of course, one of the main problems with characterisation concerns institutions unknown to the lex fori. Special conflict-of-laws provisions for such institutions make life much easier. It is thus a very good idea to have included provisions on trusts in the special part (Articles 107-114 of the Draft Code).

Renvoi and the Sword of Damocles

Article 8 of the Draft Code on renvoi has already been the subject of an insightful post by Gilles Cuniberti on this blog. We are in agreement with him that the respective reference in the Report to insights from comparative (private international) law are vague and misleading. We can add that Germany would be another example of national PIL allowing renvoi in general (Article 4(1) EGBGB).

We do not think that legal clarity is improved by making renvoi mandatory only if one of the parties so requests (Article 8 cl. 2 of the Draft Code). This would mean that applicable law at least for a considerable time has the sword of Damocles hanging over its head: Assuming that application of renvoi would lead to a different applicable law than if renvoi was excluded, the applicable law ultimately would be subject to one party choosing to “trigger” the application of renvoi or not. And why should one party have the unilateral power to change the applicable law in this way, possibly to the detriment of other parties?

The Conundrum of Overriding Mandatory Provisions

Article 7(1) of the Draft Code contains a definition of lois de police (overriding mandatory provisions). Paragraph 2 sets forth that French overriding mandatory provisions must be applied; pursuant to paragraph 3, foreign overriding mandatory provisions can be applied under certain conditions. The legislative technique thus is rather similar to Article 9 Rome I. There is no comparable provision in the EGBGB (Article 34 EGBGB – implementing the respective provision of the Rome Convention – was abolished at the end of 2009). Again, we consider it beneficial for legal clarity to have a written rule on this issue.

But the function of Article 5(2) of the Draft Code is not clear to us in this regard. It states that a conflict-of-laws rule is “excluded” (écartée) by a material rule for certain international situations or by an overriding mandatory provision. Why is this statement even needed if Article 7(2) and (3) of the Draft Code contain precise instructions of how to deal with overriding mandatory provisions? Additionally, we object to the idea arguably expressed in Article 5(2) of the Draft Code that a rule of substantive law can take precedence over a conflict-of-laws rule. This would mean to conflate two areas of law that – analytically speaking – must be strictly kept apart.

Even More General Provisions?

While the German EGBGB with only four articles in the section on “General Provisions” does not serve as an inspiring example in this context, one might consider addressing even more issues in the general part of the Draft Code. (The Report does not indicate whether this was on the Working Group’s agenda.) In particular, we are thinking of the incidental question and the triad of adaptation, substitution and transposition. All of them concern a stage in the analysis of a case in which the applicable law has seemingly already been determined. There is a certain risk that especially those not well-versed in PIL could overlook that not necessarily all aspects of the case will be governed by the law just determined and/or that some adjustments still must be made under substantive law. To include provisions on these issues, even if phrased rather broadly, could at least draw attention to them. And the French PIL Code could be something of a trailblazer here.

A conference titled The Brussels I bis Reform will take place on 9 September 2022, between 8:30 am and 4:30 pm (CEST), organised by the Max Planck Institute Luxembourg.

Regulation (EU) 1215/2012 is the fundamental reference-instrument of cross-border judicial cooperation in civil matters within the European Union. It provides rules on jurisdiction, pendency, recognition, and enforcement of judgments and other enforceable titles. Since its establishment in 1968, it has been a constantly evolving instrument. At present, the European Commission is required to present a report on the application of the Regulation and to propose improvements. Against this background, a Working Group was set up within the network of the European Association of Private International Law (EAPIL) to draft a position paper. The group is led by Burkhard Hess (Luxembourg) and Geert van Calster (Leuven). Members of the working group answered a questionnaire, reporting the application and possible shortcomings of the Brussels Ibis Regulation in their respective jurisdictions.

Speakers include Dario Moura Vicente, Björn Laukemann, Vesna Lazić, François Mailhé, Stefaan Voet, Camelia Toader, Chrysoula Michailidou, Alexander Layton, Matthias Weller, Krzysztof Pacula, Marta Requejo Isidro, Viktória Harsági, Gilles Cuniberti and Marco Buzzoni.

The topics of the conference are based on the reports received from working group members and observers. Many of the reporters will have the opportunity to take up issues they indicated as important. Additional experts will present topics ranging from insolvency proceedings to third state relationships. Most importantly, the conference will provide a forum for all attendees to discuss the application of the Brussels I bis Regulation up until now and the need for future improvements. The aim of the conference is to prepare a position paper.

The paper will be presented to the European Commission to advise it in the evaluation process.

The conference, which is organised in collaboration with the European Association of Private International Law and the University of Leuven, will take place at the premises of the MPI Luxembourg. Digital participation is possible. Registration is on a first come, first served basis.

Those interested in participating are required to register before 26 August 2022.