EAPIL blog

Laura Carpaneto, Stefano Dominelli and Chiara Enrica Tuo (all University of Genova) have edited Brussels I bis Regulation and Special Rules – Opportunities to Enhance Judicial Cooperation. The book, which has just been published by Aracne, may be accessed for free here in its entirety.

Contributors include, in addition to the editors themselves, Jean-Sylvestre Bergé, Pierangelo Celle, Silvana Çinari, Chirouette Elmasry, Rosario Espinosa Calabuig, Paula-Carmel Ettori, Giulio Cesare Giorgini, Aida Gugi Bushati, Flutura Kola Tafaj, Rosa Lapiedra Alcami, Guillermo Palao Moreno, Francesco Pesce, Ilaria Queirolo, Isabel Reig Fabado and Jessica Sanchez.

The blurb reads as follows.

The volume collects the results of the EU co-funded Project Enhancing Enforcement under Brussels Ia – EN2BRIa, European Union Justice Programme 2014-2020, JUST-JCOO-AG-2018 JUST 831598. It critically and thoroughly addresses art. 67 Brussels I bis Regulation, which determines the relationships between the Regulation and other EU law instruments governing jurisdiction or the free movement of decisions. Also tackling “indirect” relevant relationships between international civil procedure and material law, the Volume rationalizes the main criticalities examined, and offers Principles, Recommendations and Guidelines to increase capacity of practitioners to address such issues, to improve awareness of stakeholders, and to support uniform application of EU law.

For further information see here.

Andrea Bonomi and Patrick Wautelet have authored an article-by-article commentary, in French, of Regulations 2016/1103 and 2016/1104 on the property regimes of international couples, with the assistance of Ilaria Pretelli, Eva Lein, Guillaume Kessler, Sara Migliorini and Konstantinos Rokas.

The book has just been published by Larcier under the title Le droit européen des relations patrimoniales de couple – Commentaire des Règlements (UE) 2016/1103 et 2016/1104.

The authors have kindly provided the following presentation in English.

Professionals in the area of family law and estate planning are increasingly confronted with cross-border couples and families whose assets may be scattered in different countries. The determination of the law governing the family assets has often become an indispensable step in order to advise spouses or partners about the financial implications of their union, the consequences of a change of residence, or to share out their property in the case of divorce or death. In all these scenarios, it is often necessary to assess the validity and effects of a property agreement entered into in a foreign jurisdiction. And in the case of disputes, the determination of the competent court and of the cross-border effects of a court decision will be crucial. All these questions are made more complex by the fact that most relationships extend over several years, if not decades, by the possible involvement of third parties, and by the connection with other areas of the law.

The European regulations on matrimonial property and on the property consequences of registered partnerships intend to provide answers to some of these problems and to ensure more legal certainty. However, the interpretation of these complex instruments also raises a great number of new and intriguing questions.

This new commentary provides for a very detailed and fine-tuned analysis of the two regulations. The textual and systematic interpretation rests on a solid comparative law background and is enriched by numerous practical examples. Drafted by an international team of experts, it offers a genuinely European reading of the new instruments, taking into account their multiple connections with the other EU regulations in the area of civil justice, notably the Succession Regulation and the Brussels II-terRegulation, as well as the guidance provided by the Court of Justice of the European Union.

This book intends to serve as reference for researchers dealing with two major regulations adopted by the EU. It also aims to stir up the conversation among researchers and policy makers interested in private international law and the economic aspects of family law by pointing to the advantages of the European instruments, while not ignoring the shortcomings and imperfections of two regulations which will guide cross-border activity in family law in the years to come.

For more information, see here.

Which conflict-of-laws rule is the most appropriate for the blockchain? This fundamental question is part of two parallel targeted consultation papers issued as recently by the European Commission.

One of the consultations covers the Settlement Finality Directive (SFD), while the other concerns the Financial Collateral Directive (FCD). Both regulate the “plumbing” of financial markets (the so-called market infrastructures) and contain conflict-of-laws provisions (see Article 9(2) SFD and Article 9 FCD). Yet, the infrastructures and transactions they target are conventional ones. The Settlement Finality Directive deals with payment and securities settlement systems, in which traditional cash (e.g. euros) and conventional financial instruments (e.g. shares and bonds) are traded. The Financial Collateral Directive concerns collateral provided in either cash or financial instruments.

The question posed by the European Commission is whether these texts also can (and must) be applied to modern digital assets, like cryptocurrencies (e.g. Bitcoin) and tokens, and whether they need to be adapted to them through reform.  Since both directives also contain conflict-of-laws provisions, the relationship of crypto-assets to these regulations raises typical conflict-of-laws questions as well.

Take for example Article 9(2) SFD. Its text speaks about securities “legally recorded on a register, account or centralised deposit system” and submits them to the law of the Member State where this register, account or system is “located”. This raises the following issues: 1. whether a blockchain network is a “register” in this sense; 2. whether crypto assets can be said to be “legally” recorded, despite the lacking legal protections of such assets under most private laws; and 3. where blockchains, which may be distributed potentially on a planetary scale, are located.

Even more doubts are caused by Article 9 FCD. It submits financial collateral arrangements to the law of the country “in which the relevant account is maintained”. Blockchain networks basically operate without any intermediaries and do not feature “accounts” in the proper sense of the word. Even if they would, it would be hard to say where the account is “maintained” given the distributed nature of a blockchain network.

These issues have a certain sense of urgency due to the fact that some EU and EEA Member States have already pressed ahead and created specific rules for crypto assets.

France for instance allows for securities (such as bonds and shares) traded over the counter (OTC) to be issued on blockchain networks (described as “distributed electronic registers” (dispositif d’enregistrement électronique partagé – DEEP)). The condition is that the securities are issued in the French territory and governed by French law, see Art. L211-3 French Code monétaire et financier. The transfer and pledge of such crypto financial instruments is equally governed by French law.

Germany has drafted a bill to allow the issuance of bonds (including covered bonds) and investment participations on the blockchain. Section 32 of the bill provides for the applicability of the law of the country in which the administrator of the register is supervised.

Liechtenstein, an EEA member and as such also bound by the SFD and the FCD, has adopted an Act on Token and TT (Trustworthy Technology) Services Providers, which, by any standard, is one of the most comprehensive and innovative blockchain regulations in the world. The Act is appliable where: 1. the TT provider is headquartered or residing in the Principality; or 2. where the parties expressly chose its provisions, see its Art. 3(2).

These are three different approaches to the conflict-of-laws issues raised with regard to different types of crypto assets. But are those national laws compatible with the SFD and the FCD? Do the SFD and FCD apply at all to crypto assets? If so, are their provisions, including those on the conflict of laws, compatible with the nature of the blockchain? And if they do not apply, should they be extended to them? Some legal consistency and harmony would surely be welcome. The question is if and when the EU legislator will provide it.

On 24 March 2021 the Court of Justice issued a judgement in the case of SS v MCP, C-603/20 PPU, which concerns interpretation of the jurisdictional rules of Brussels II bis Regulation. The request for a preliminary ruling originated from the High Court of Justice (England & Wales), Family Division.

The Court decided that a court of a Member State seized of an action relating to parental responsibility cannot base its jurisdiction on Article 10 of the Brussels II bis Regulation in a case of abduction of a child to a third State.

Interestingly, the opinion (commented here by Geert Van Calster from the perspective of the principle of mutual trust) suggested the opposite conclusion, in spite of the fact that both the CJEU and the advocate general relied on the wording of the relevant provisions, their context and objectives, legislative history and relation with international instruments.

Factual Background

SS and MCP are two Indian citizens residing in the UK, where their child P was born in 2017. The couple is not legally married. SS is indicated as the father on the birth certificate, and consequently he has parental responsibility. In October 2018, the mother went to India with the child, where the child stayed with her grandmother. In August 2020 P submitted an application to the referring court, seeking an order for the return of the child to the UK and a ruling on rights of access.

The mother has challenged the jurisdiction of the court, since the child is not habitually resident in the UK. In the opinion of the referring court, the conduct of the mother probably amounts to the child’s wrongful removal (retention) in India. India is not a contracting party to the 1980 Hague Child Abduction Convention.

Preliminary Question

The referring court considers that it is necessary to determine whether it has jurisdiction on the basis of Brussels II bis (for its application in the UK for proceedings initiated before the end of transition period see: Note to Stakeholers on Brexit and PIL). Because the child does not have habitual residence in the UK and there is no consent of both parents as to jurisdiction of UK courts, the court has doubts whether it might base its jurisdiction on Article 10 Brussels II bis.

In accordance with this provision in case of a wrongful removal (retention), the courts of the Member State where the child was habitually resident immediately before the wrongful removal (retention) retain their jurisdiction until the child has acquired habitual residence in another Member State and one of alternative additional requirements is met. As the child was wrongfully retained in a third State, the referring court wonders whether Article 10 provides that UK courts retain their jurisdiction … indefinitely.

The Judgement

The CJEU answered strongly in the negative and underlined that:

(…) there is no justification for an interpretation of Article 10 [Brussels II bis] that would result in indefinite retention of jurisdiction in the Member State of origin in a case of child abduction to a third State, neither in the wording of that article, nor in its context, nor in the travaux préparatoires, nor in the objectives of that regulation. Such an interpretation would also deprive of effect the provisions of the 1996 Hague Convention in a case of child abduction to a third State which is a contracting party to that convention and would be contrary to the logic of the 1980 Hague Convention (paragraph 62).

As a result, the jurisdiction of the referring court might be determined in accordance with the applicable international conventions or, in the absence of any such international convention, in accordance with Article 14 Brussels II bis (which requires the presence of the child within the forum).

The Reasoning of the Court

First, the wording of Article 10 Brussels II bis clearly indicates that it applies to intra-EU abductions only (points 38-41), as it talks about “a Member State” and “another Member State”.

Second, as regards the context of Article 10 Brussels II bis, CJEU pointed that it constitutes a special ground of jurisdiction with respect to the general one in matters of parental responsibility laid down in Article 8(1), which provides for the jurisdiction of the Member State, where the child is habitually resident (paragraph 43). This ground of jurisdiction “defeats what would otherwise be the effect of the application of the general ground of jurisdiction (…), in a case of child abduction, namely the transfer of jurisdiction to the Member State where the child may have acquired a new habitual residence, following his or her abduction. Since that transfer of jurisdiction might secure a procedural advantage for the perpetrator of the wrongful act, Article 10 of that regulation provides (…) that the courts of the Member State where the child was habitually resident before the wrongful removal or retention are, nonetheless, to retain their jurisdiction unless certain conditions are met” (paragraph 45).

As a result, if the child has acquired new habitual residence outside the EU, after being wrongfully removed (retained) in a third State, there is no room for the application of the general rule. Hence,  in such case also the rule laid down in Article 10 “loses its raison d’être, and there is not, therefore, any reason to apply it” (paragraph 46). Additionally, as it is a special ground of jurisdiction, it must be interpreted restrictively (paragraph 47).

By the way, it is striking to see absolutely different conclusions drawn from this juxtaposition of Articles 8 and 10 Brussels II bis in the opinion:

Where a child was habitually resident in a Member State, as is the case with the child here, the courts of that Member State are to retain their jurisdiction until that child acquires his or her habitual residence in ‘another Member State’. Since reference is made only to another Member State, it can be inferred from this, in my view, that, where a child is wrongfully removed to, or retained in, a non-Member State, the courts of the Member State in which that child was habitually resident continue to have jurisdiction (paragraph 53 of the opinion)

Third, the CJEU refers to the legislative history of Brussels II bis and reminds that the EU legislature wanted to establish strict rules with respect to child abductions within the EU, whereas abductions to third states are supposed to be covered by international conventions, such as the 1980 Hague Child Abduction Convention and 1996 Hague Parental Responsibility Convention. It might be noted that 1980 Hague Convention is not referred to in the opinion.

The CJEU points out also that the interpretation of Article 10 Brussels II bis as proposed by the referring court “would have the consequence that, where the child has acquired a habitual residence in a third State which is a contracting party to the 1996 Hague Convention, following an abduction, Article 7(1) and Article 52(3) of that convention would be deprived of any effect” (paragraph 53). It should be noted that Article 7(1) 1996 Hague Convention makes provision (like Article 10 Brussel II bis) “for a transfer of jurisdiction to the courts of the State where the child has acquired a new habitual residence, if certain conditions are satisfied. Those conditions are connected, in particular, to the passage of time together with acquiescence or inaction on the part of the person concerned who holds a right of custody, the child having become settled in his or her new environment” (paragraph 54). This possibility would be precluded if Brussels II bis would allow the courts of a Member State to retain indefinitely their jurisdiction (paragraph 55).

Such retention of jurisdiction, in view of the CJEU, would also be “contrary to Article 52(3) of the 1996 Hague Convention, which prohibits rules agreed between one or more contracting States (…) from affecting, in the relationships of those States with the other contracting States, the application of the provisions of that convention. To the extent that jurisdiction in matters of parental responsibility could not be transferred to those courts of contracting States, those relations would necessarily be affected” (paragraph 55).

Additionally, indefinite retention of jurisdiction would be incompatible with one of the fundamental objectives pursued by the regulation, namely the best interests of the child, which gives priority to the criterion of proximity (paragraph 58). This objective requires setting balance between “the need to prevent the perpetrator of the abduction from reaping the benefit of his or her wrongful act” and “the value of allowing the court that is closest to the child to hear actions relating to parental responsibility” (paragraph 59). Interestingly, in the opinion, while referring to the best interest of the child, the objective of “deterring child abductions” seems to be given priority (paragraph 70 of the opinion).

Finally, indefinite retention of jurisdiction, according to the CJEU, would also disregard the logic of the mechanisms established by the 1980 Hague Convention.

If, in accordance with Article 16 of that convention, it is established that the conditions laid down by that convention for return of the child are not satisfied, or if an application under that convention has not been made within a reasonable time, the authorities of the State to which the child has been removed (…) become the authorities of the State of habitual residence of the child, and should, as the courts that are geographically closest to that place of habitual residence, have the power to exercise their jurisdiction in matters of parental responsibility. That convention remains applicable, in particular, in relations between the Member States and the other contracting parties (paragraph 61).

I am not especially keen on celebrating anniversaries. However, as things stand now in the European Union I thought it worth a short post on the seminal decision of the Court of Justice in case 22/70, AETR (EU:C:1971:32), of 31 March 1971. My attention has been drawn to its fiftieth anniversary.

Let’s celebrate what it meant legally (no political stance here), in terms of strengthening the competences of the (nowadays) Union and, as a consequence, for the uniformity of the legal systems of the Member States.

Background

The case is named after the European Agreement concerning the work of crews of vehicles engaged in international road transport (AETR), done at Geneva on 19 January 1962. The agreement had been signed by five of the six Member States of the EEC and other European States, but could not enter into force, absent the necessary ratifications. Negotiations for the revision of the agreement were resumed in 1967. Similar work undertaken at Community level with regard to standardizing driving and rest periods of drivers of road transport vehicles resulted in Regulation No 543/69 of the Council of 25 March 1969 on the harmonization of certain social legislation relating to road transport. In the course of its meeting on 20 March 1970 the Council, in view of the meeting of the sub-committee on Road Transport of the Economic Commission for Europe of  April 1970 at Geneva, discussed the attitude to be taken by the six Member States of the EEC in the negotiations for the conclusion of a new AETR.

The Member States conducted and concluded the negotiations in accordance with the proceedings of 20 March 1970. The AETR was made available by the secretariat of the Economic Commission for Europe from 1 July 1970 for signature by the Member States. On 19 May 1970 the Commission of the European Communities lodged an application for the annulment of the proceedings of the Council of 20 March 1970 regarding the negotiation and conclusion of the AETR by the Member States of the EEC.

In essence, the Commission disputed the validity of said proceedings on the ground that they involved infringements of the Treaty, more particularly of Articles 75, 228 and 235 concerning the distribution of powers between the Council and the Commission, and consequently the rights which it was the Commission’s duty to exercise in the negotiations on the AETR.

Ruling

The Court ruled actually against the application. This notwithstanding, it also made substantial assertions on the extent of the external competence of the Community:

The Community enjoys the capacity to establish contractual links with third countries over the whole field of objectives defined by the Treaty. This authority arises not only from an express conferment by the Treaty, but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions. In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form they may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules or alter their scope. With regard to the implementation of the provisions of the Treaty, the system of internal Community measures may not be separated from that of external relations.

Consequences in the Domain of PIL

The consequences of the AERT decision on PIL conventions have been profusely analyzed by scholars (see, for instance, The External Dimension of EU Private International Law after Opinion 1/13, edited by P. Franzina). Two Opinions have been rendered directly focusing on the field. In the first one, Opinion 1/03 (EU:C:2006:81), delivered on February 7, 2006, the Court was requested by the Council to answer whether the conclusion of the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters falls entirely within the sphere of exclusive competence of the Community, or within the sphere of shared competence of the Community and the Member States. The second Opinion is Opinion 1/13 (EU:C:2014:2303), of 14 October 2014; the European Commission asked the Court whether the exclusive competence of the European Union encompasses the acceptance of the accession of a non-Union country to the Convention on the civil aspects of international child abduction concluded in the Hague on 25 October 1980.

In both cases the Court’s ruling supports the exclusive competence of the Union. This should be enough to proceed without a further Opinion in regard to the HCCH 2019 Judgments Convention, or, for that matter, to the accession of the UK to the 2007 Lugano Convention. A trickier question may be, though, whether the Member States are free to update bilateral conventions preexisting the Brussels regime, just as Norway has done (see, implicitly in favor of negative answer, Alex Layton here. I concur).

In September 2020, the First President of the French supreme court for private and criminal matters (Cour de Cassation), Ms Chantal Arens, presented the main aspects of the Court’s international strategy for 2020-2022.

The report of this presentation (available here, in French) may be of interest to practitioners and academics dealing with private international law (PIL) issues connected to France.

Here are the key elements of the report and some personal comments.

This “international action plan” of the Cour de Cassation is the result of discussion within the Court and exchanges with institutional partners worldwide. It is based on three main objectives: international reputation, promotion of fundamental values and judicial cooperation.

International Reputation

The first objective is for the Cour de Cassation to gain an international recognition of its qualities as a judicial institution, in particular regarding its working methods (see here) and caselaw. This ambition is also part of a broader goal of promoting the civil law tradition and the French-speaking community worldwide.

Against this backdrop, the website of the Court will be accessible in foreign languages and its landmark judgements will be translated into various languages and accessible online (see, for now, the very few documents available in English). It will be a great advantage for non-French-speaking PIL experts to be able to access the French “living law” in civil and commercial matters. In this respect, the international commercial chamber at the Paris Court of Appeal (ICCP-CA) established in 2018 may surely be seen as a pioneer within the French legal landscape, since its judgements are translated into English (see here).

Fundamental Values

The second objective is the promotion of the fundamental values and principles of the French judicial system (i.e. independence of justice, legal certainty, “dialogue” between judges, fundamental freedoms). However, these are not specific to France since they are inherent to the European legal order, within the Council of Europe and the European Union.

Regarding transnational judicial dialogue, it can be noticed that the Cour de Cassation is more and more likely to refer to European case law in its own decisions (for a recent example reported on this blog, see here). It may also be noted that the Court submitted to the ECtHR, in October 2018, the first request under Protocol No. 16 in the field of international family law. A PIL issue was at stake, namely the compliance with article 8 of the ECHR of the non-recognition of a foreign birth certificate of a child born abroad as the result of a surrogacy – prohibited in France – (for the request see here and for the advisory opinion see here).

Within the EU legal order, however, one could expect the Cour de Cassation to reinforce its involvement by referring to the CJEU requests of interpretation of EU law (and EU PIL in particular). With respect to judicial Cooperation in civil matters, only two cases submitted by the French Court are currently pending before the Court of justice (and three altogether for France in this field; two were reported here and here), whereas, at the same time, around fifteen preliminary questions from German Courts are pending (following a quick research via the curia case-law search form). A recent judgment of the Cour de Cassation on the scopes of Brussels II bis Regulation and 1996 Hague Convention (reported here) may be seen as an illustration of the reluctance of the French Supreme Court to submit preliminary questions to the CJEU, despite the existence of serious doubts on the interpretation of EU (PIL) law (and its duty to do so pursuant to article 267, §3, TFEU).

International Judicial Cooperation

The third objective is to learn from other legal systems in order to enrich French law. It implies, in particular, the development of transnational exchanges on common legal issues. In this context, international judicial cooperation is crucial.

The Cour de Cassation is a member of various European and international networks such as the Association of the French-speaking Supreme Courts (AHJUCAF) and the network of The Presidents of the Supreme Judicial Courts of the Member States of the European Union.

The latter network serves as a forum for exchanges between the European institutions and the national Supreme Courts.

A common portal of case law is also accessible to facilitate the search (and the translation) of national case law within the legal orders of the EU Member States. It should not be confused with the Judicial Network of the European Union (Réseau judiciaire de l’Union européenne, “RJUE”) created more recently on the initiative of the President of the CJUE and the Presidents of the Constitutional and Supreme Courts of the Member States in 2017.

It also provides for a collection of decisions delivered by national courts and tribunals, which are of particular interest for EU law. The creation of such online compendiums of transnational case law is surely of great interest for PIL experts and more efforts (and funds) should be put in their developments (see, by comparison, the unalex and the Lynxlex databases).

 

*Thanks to my colleague Lukas Rass-Masson (University of Toulouse), a recorded conference on the international strategy of the French Court of Cassation, with Ms First President Chantal Arens, is available here.

Ilaria Pretelli (Swiss Institute of Comparative Law, University of Urbino) has posted Protecting Digital Platform Users by Means of Private International Law on SSRN.

The present article offers perspectives on the possible adaptation of traditional connecting factors to the digital space. It analyses cases that pit platform users against each other and cases that pit platform users against the digital platform itself. For the first set of cases, reliable guidance is offered by the principle of effectiveness. The enforcement of court decisions in cyberspace is often necessary and also plainly sufficient to render justice. Enhanced protection of weaker parties is advocated, both in tortious (favor laesi) and contractual liability (protection of the weaker party), in line with the most recent achievements in human rights due diligence. Protection clauses leading to destination-based labour standards would be a welcome step forward. Protection of users also offers guidance for the shaping of private international law rules governing disputes between users and the platform.

The paper is forthcoming in Cuadernos de Derecho Transnacional.

It is well-known that the Succession Regulation contains specific rules relating to succession agreements in its Article 25. Inter alia, it allows the parties to select the law applicable to such agreements, offering the choice between the law of the parties’ last habitual residence or nationality (Article 25(3)). But when can such a choice be assumed, and under which rules? This is the subject of a recent decision by the German Federal Supreme Court.

Facts

An Austrian and a German national were married and lived together in Germany. In 1996, they appointed each other in a “Gemeinschaftliches Testament”, literally a “common will”, as sole heirs and determined who should succeed the surviving spouse. The will was made in two separate deeds and was therefore technically an “agreement as to succession” in the sense of Article 3(1)(b) of the Succession Regulation, and not a “joint will”, which the Regulation defines as a will drawn up in one document by two or more persons, see its Article 3(1)(c). The parties excluded any unilateral modification of the agreement during their lifetimes and after the death of one spouse.

This agreement was binding on the surviving spouse under German law, but not under Austrian law due to the lack of the notarial form.

After the death of her husband, the wife wrote a new will. When she died, its validity was challenged in a German court by the heirs designated in the agreement from 1996.

Legal Issue

To solve this case, the German Federal Court had to characterise the agreement under the provisions of the Succession Regulation and to determine whether it was governed by German or Austrian law.

The Succession Regulation was applicable as the second spouse had deceased after its entry into force on 17 August 2015 (Article 83(1)). The Regulation’s rules on dispositions after death, which include agreements as to succession, apply in addition to the law of habitual residence and nationality of the deceased, in line with the principle of favor validatis (Article 83(3) Succession Regulation).

The Federal Court considered whether the parties had chosen German law for their agreement in line with Article 25(3) Succession Regulation. But under which rules should the court determine whether such a choice is made? Is this issue governed by EU law or by the chosen national law?

Holding

The German Federal Court opted for the application of EU rules to determine whether a choice of law exists. The autonomous determination was important because the conditions for a choice under German law were not fulfilled in the case.

The court based the need for an EU autonomous interpretation on several arguments. It cited Article 22(2) of the Succession Regulation and Recitals 39 and 40, which show that the Regulation lays downs requirements for the choice of law. The German Federal Court did not see Article 22(3) Succession Regulation as contrary to this view since this provision would concern the validity of a choice, not the existence of a choice itself.

In the opinion of the German judges, Article 22 Succession Regulation permits an implicit choice of law. The Court in this regard distinguished Article 3(1) Rome I Regulation, which does not allow such implicit choice. The Federal Court explained this divergence by reference to the fact that, in case of contractual obligations, the parties typically have opposing interests, which calls for an unambiguous determination of the applicable law. The situation in succession would be different as there are no conflicting interests to be taken into account, only the will of the de cujus.

The Federal Court furthermore considered it unnecessary to submit these questions to the CJEU, as the answers would result with sufficient clarity from the text of the Succession Regulation and the previous case law of the European court (“acte claire” doctrine).

Result

The German Federal Court concluded that from an autonomous European point of view the spouses had implicitly chosen German law to govern their succession agreement. It deduced this from the use of legal terms typical for German law, such as “Schlusserbe” (final heir), which cannot be found in Austrian legislation. Moreover, the Court emphasised the parties’ intention for the agreement to be binding, which was possible only under German but not under Austrian law.

Assessment

The result reached by the German Federal Court has to be applauded. The spouses had drawn up two wills which they wanted to be mutually binding. This intention was best served by assuming the applicability of German law. Yet this result could also have been achieved by an application of Article 25(2) subpara. 2 of the Succession Regulation, as the agreement was most closely connected to Germany, given that both decedents had their habitual residence there and one of them was a German national at the time the deeds were drawn up.

Be that as it may, the clarifications of the Federal Court with regard Article 25(3) of the Regulation are to be welcomed. The judgment draws a distinction between the existence of a choice, which shall be governed by EU law, and its substantive validity, which would be determined by the chosen national law. Admittedly, this is a fine line, yet it is a necessary one. In the case at hand, it was not easy to say which law the parties had chosen in the first place. This question cannot be answered by the hypothetically chosen law.

However, the Federal Court’s distinction between the Succession Regulation and the Rome I Regulation fits unilateral wills only. It is not equally persuasive for agreements as to succession and joint wills, which are much more akin to a contract and where the parties do not necessarily pursue the same interests.

The answers to the questions raised by the case are far from obvious. It is therefore regrettable that the German Federal Court did not submit a reference for a preliminary ruling to the CJEU. This omission demonstrates once again the importance of providing English summaries of national decisions, as is done in this blog.

— Many thanks to Verena Wodniansky-Wildenfeld and Felix Krysa for their contribution to this post.

Due to the uncertainties regarding the corona situation, the Scientific Council of EAPIL has decided to postpone the Aarhus EAPIL Conference to 2-4 June 2022.

Again, Aarhus University has offered to host the conference.

Participants who have previously chosen to transfer their registration/fee to the 2021 conference will be contacted directly by e-mail and offered to transfer their registration to 2022 or be reimbursed.

The program for the conference remains unchanged and many of the speakers have already confirmed their attendance once again.

EAPIL is confident that all the speakers will join the Aarhus Conference in 2022.

Registration for the 2022 EAPIL Aarhus Conference will be announced on both the Aarhus Conference and EAPIL website and is expected to open mid-April 2021.

On 26 and 29 March 2021, the European Commission will host a webinar on the use of artificial intelligence technologies in the field of justice.

This will be the first in a series of events, which are a follow-up to the Communication of the Commission itself on the Digitalisation of Justice in the European Union of 2 December 2020 (reported here on this blog).

The topic of the first webinar is the Anonymisation and pseudonymisation of judicial decisions.

The webinar will bring together representatives of the academia, the private sector and the Member States with the aim to further discussions, in particular on publication of judicial decisions practices, including online publication, provision of judicial decisions as open data, approaches towards the protection of personal data, techniques for anonymisation and pseudonymisation of judicial decisions, existing projects and solutions at the national level and solutions available on the market…

Speakers include Eero Hyvönen (Aalto University and University of Helsinki), Monica Palmirani (University of Bologna), Edita Gruodytė (Vytautas Magnus University) and Louis Béziaud (University of Rennes).

The full program is available here. For the web streaming service see here (26 March) and here (29 March).

COVID – or rather, its consequences on legal relationships – has arrived to the CJEU in the form of a request for a preliminary ruling of the Austrian Oberster Gerichtshof. The question submitted in case C-18/21, Uniqa Versicherungen, relates to Regulation No 1896/2006 creating a European order for payment procedure. It reads as follows:  

Are Articles 20 and 26 [of the Regulation] 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 [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?

The request was made in the following context.

The District Court for Commercial Matters of Vienna issued a European order for payment on 6 March 2020, which was served on the defendant, who is resident in Germany, on 4 April 2020. The latter lodged a statement of opposition which was posted on 18 May 2020. The court of first instance rejected the opposition as being out of time, on the ground that the objection had not been filed within the 30-day period provided for by Article 16(2) of Regulation No 1896/2006.

The Commercial Court of Vienna, ruling on the appeal on the merits, set that order aside. It held that the period for lodging a statement of opposition under Article 16(2) of the Regulation had been interrupted pursuant to Paragraph 1(1) of the Austrian Federal Law on accompanying measures for COVID-19 in the administration of justice. The applicant’s appeal on a point of law was directed against that decision, and sought to have the order of the court of first instance restored.

Article 20 of the Regulation provides for the review of the European order for payment before the competent court in the Member State of origin in exceptional cases – in the case at hand the relevant para would be 1 (b). According to Article 26, all procedural issues not specifically dealt with in the Regulation are governed by national law.

(And: among the argument of the Austrian OGH to refer its doubts to the Court, the divergent views of scholars on the impact on the Regulation of national procedural measures due to COVID-19 is placed first. Legal literature matters).

Kurt Siehr (formerly MPI Hamburg) has posted Mandatory Rules of Third States: from Ole Lando to Contemporary European Private International Law on SSRN.

The abstract reads:

On 18 October 2016 the European Court of Justice, in the case Greece v. Nikiforidis, decided: ‘Article 9 (3) of the Regulation No. 503/2008 on the law applicable to contractual obligations must be interpreted as precluding overriding mandatory provisions other than those of the State of the forum or of the State where the obligations arising out of the contract have to be or have been performed from being applied, as legal rules, by the court of the forum, but as not precluding it from taking such other overriding mandatory provisions into account as matters of fact in so far as this is provided for by the national law that is applicable to the contract pursuant to the regulation’. Ole Lando already anticipated this development when he dealt with this problem arising under the Rome Convention of 1980 on the law applicable to contractual obligations still in force in Denmark.

The paper was published in the European Review of Private Law 2020.

In Re G (Abduction: Consent/Discretion) judgment issued on 9 February 2021 the Court of Appeal (Civil Division) of England and Wales ruled on an appeal proceeding following an order to return issued by the High Court of Justice (Family Division) based on the 1980 Hague Convention on the Civil Aspects of International Child Abduction.

The importance of the case is related to the interpretation of the provisions of Article 13 of the Convention, the existence of consent and the exercise of discretion by the requested court in ordering the return of the child when consent is established.

The proceedings were initiated by the father who consented to the mother bringing the children to England. In first instance the High Court ordered the return of the two children to Romania to their father. Following an appeal by the mother, the Court of Appeal reversed the order.

Background

Between 2015 and 2018, the parents and their children I and P have relocated twice from Romania to England. In 2018, the father returned to Romania while the mother and the two girls remained in England. In February 2019 the parents agreed to divorce in Romania. On 14 March 2019 the parents entered into a notarised agreement by which the mother could travel out of Romania with the children, without the father, for a period of three years.

During the divorce procedure the parents discovered that if they wanted their children to live in England with the mother, they had to go through a court divorce. In order to avoid this on 15 April 2019 they entered into a notarised agreement that parental authority would be exercised by both parents and that after the divorce the children would live with the mother in Romania. This is required by Article 375(2) Romanian Civil Code for the finalisation of the divorce procedure. However, in fact, the parents agreed that the children would continue to live with the mother in England.

In an attempt to reconcile, the parents agreed that the girls will spend a trial period with the father in Romania, while the mother remained in England. Thus, for a period of five months (September 2019 – February 2020) the children were with the father in Romania. The mother continued to work in England and the father and children visited for Christmas. During this period the parents agreed that it would be better overall for the children to return to live in England with the mother.

On 5 February the mother traveled to Romania to take the children back to England. When meeting the father in Romania she told him that she formed another relationship with another man. Although upset, the father gave the mother the children traveling documents, birth certificates and helped with the packing of the children’s belongings. The mother and the children remained with the mother’s parents the evening before returning to England.

Without the mother knowledge the father visited a notary on 5 February and executed a document revoking his agreement from March 2019 allowing the mother to travel with the children. The father gave the documents to his Romanian lawyer who sent it to the border authority, but did not inform the mother of the revocation of content although he bound himself to do so and was aware that the revocation was only effective from the moment of its communication to her.

By the time the revocation was registered by the Romanian authorities the next day, the mother together with the children already flew to England.

Proceedings in Romania

On 16 March 2020 the mother begun proceedings in Romania seeking an order that she did not require the father’s permission for the children to travel. She has since made further applications and the proceedings are ongoing. The Romanian Judge was aware of the proceedings in England.

Proceedings before the High Court

On 17 July 2020, the father issued proceedings in England seeking the children’s summary return to Romania. Before the judge he argued that he had showed the revocation of consent document to the mother when they first met on 5 February. However, the Judge found that while the mother was in Romania the father neither gave her the revocation document nor informed her of its existence, and she had only learned about it when she saw it on the family’s shared photo drive five days after she returned to England.

Further, the mother argued that the children were not habitually resident in Romania on 6 February 2020 so that their removal was not wrongful, that the father had consented to the removal, and that the older child objected to the return. The child’s objections defence was scarcely pursued, and the Judge rejected it.

The High Court Judge concluded that at the time of their removal the girls were habitually resident in Romania, the father consented to the removal, but based on the exercise of his discretion granted by the Convention the Judge would order to return of the children to Romania as the jurisdiction that should determine the issues related to their welfare.

Appeal Judgment

The mother sought permission to appeal on three grounds. The Judge stayed the return order and granted permission to appeal on two grounds: (1) assessment of habitual residence of the children and (2) the exercise of judge discretion in ordering the return of the children. The father thought to uphold the same order for additional reasons.

Habitual residence

With regard to the assessment of the habitual residence. The appeal judges in paragraph 22 considered that the High Court Judge:

directed himself correctly by reference to the summary of principle contained in Re B (A Child) (Custody Rights: Habitual Residence) [2016] EWHC 2174 (Fam) at [16-19], as approved with one significant amendment by this court in Re M (Children) (Habitual Residence: 1980 Child Abduction Convention) [2020] 4 WLR 137; [2020] EWCA Civ 1105 at [63]. His task was to assess the degree of the children’s integration in their Romanian social and family environment, and in doing so to focus firmly on their actual situation as opposed to weighing their comparative connections with the two jurisdictions. (…) But here they had oscillated between two countries with which in both cases they had strong social and family connections. Up to 5 February they were living with their father and grandparents under arrangements that might, had their parents reconciled, have continued along similar lines. The conclusion that they were significantly integrated, and accordingly habitually resident, in Romania is one that was clearly open to the Judge.

Therefore this ground of appeal was reject by the Court.

Consent

With regard to assessment of existence of consent, the analysis focused on the following exception in Article 13 of the Convention:

Notwithstanding the provisions of the preceding Article, the judicial or administrative authority of the requested State is not bound to order the return of the child if the person, institution or other body which opposes its return establishes that – 1. the person, institution or other body having the care of the person of the child… had consented to or subsequently acquiesced in the removal or retention; …

In summarising the Court’s practice in previous case law – Re P-J (Children) (Abduction: Consent) [2009] EWCA Civ 588 [2010] 1 WLR 1237, drawing on the decisions in Re M (Abduction) (Consent: Acquiescence) [1999] 1 FLR. 174 (Wall J); In re C (Abduction: Consent) [1996] 1 FLR 414 (Holman J); In re K (Abduction: Consent) [1997] 2 FLR 212 (Hale J); and Re L (Abduction: Future Consent) [2007] EWHC 2181 (Fam); [2008] 1 FLR 914 (Bodey J). Other decisions of note are C v H (Abduction: Consent) [2009] EWHC 2660 (Fam); [2010] 1 FLR 225 (Munby J); and A v T [2011] EWHC 3882 (Fam); [2012] 2 FLR 1333 (Baker J) – the Judge concluded that the key point of analysis rested on whether the giving or withdrawing of consent by the remaining parent must have been made known by words and/or conduct to the removing parent and whether the consent or withdrawal of consent of which a removing parent is unaware can be effective. This remained to be clarified by the Court as this did not arise for consideration in the above reported cases.

The court proceeded to analyse the interpretation of the text of the Convention on this point in paragraph 26 as following:

there are compelling reasons why the removing parent must be aware of whether or not consent exists. The first is that as a matter of ordinary language the word ‘consent’ denotes the giving of permission to another person to do something. For the permission to be meaningful, it must be made known. This natural reading is reinforced by the fact that consent appears in the Convention as a verb (“avait consenti/had consented”): what is required is an act or actions and not just an internal state of mind. But it is at the practical level that the need for communication is most obvious. Parties make important decisions based on the understanding that they have a consent to relocate on which they can safely rely. It would make a mockery of the Convention if the permission on which the removing parent had depended could be subsequently invalidated by an undisclosed change of heart on the part of the other parent, particularly as the result for the children would then be a mandatory return. Such an arbitrary consequence would be flatly contrary to the Convention’s purpose of protecting children from the harmful effects of wrongful removal, and it would also be manifestly unfair to the removing parent and the children.

In applying this reasoning to the case before them, the judges found that Judge’s primary findings of fact could not be challenged. The appeal judges agreed that although the father had developed misgivings, given his action to remove the consent by the notary, this actions showed otherwise. But, in fact, his behaviour the evening before their departure showed that he had not in fact withdrawn his consent, he had delivered the children and their passports to the mother on the eve of travel and he did not show the revocation document to the mother.

The Court agreed that the ‘best guide to the father’s eventual state of mind was to be found in his own actions’ (paragraph 29) and although having second thoughts he had not in fact withdrawn his consent. Therefore, the High Court Judge was not obliged to give weight to the sending of the revocation by the lawyer to the border authority because the revocation had been made known to the mother.

The Court concluded that ‘[c]onsent under the Convention is more than a private state of mind. Even if the father had in fact decided to withdraw his consent, it was necessary for the mother to have been made aware of that before the children departed’; therefore, the finding of the first Judge was upheld in appeal.

Discretion

On the exercise of discretion with regard to ordering a summary return of the children to Romania, the appeal judges acknowledged that the exercise of the discretion under the Convention is highly case-specific and has to be carried out within a framework of policy and welfare considerations.

Therefore, the court proceeded to weight in all relevant factors: the desirability of a swift restorative return of abducted children; the benefits of decisions about children being made in their home country; comity between member states; deterrence of abduction generally; the reasons why the court has a discretion in the individual case; and considerations relating to the child’s welfare.

By relying on Re J (A Child) (Custody Rights: Jurisdiction) [2006] 1 AC 80 at [12], the appeal judges found that the High Court Judge made an error of approach in attaching significant weight to the Convention considerations favouring the return based on a theoretical assessment rather than weighting in the relevant factors to the particular circumstance of the case. Thus, the Court considered it is bound to intervene for the following reasons (paragraph 49):

• The judge had ‘approached the balancing exercise incorrectly’ with regard to his discretion.
• ‘He then gave significant, indeed predominant, weight to policy considerations without explaining why he was doing so. He noted that the mother had been entitled to remove the children but he did not take into account that there was in consequence no reason for restorative or deterrent action. As to comity and home-based decision-making, he gave no weight to the fact that England is at least as much their “home country” as Romania – apart from the interrupted period of 20 weeks, these young children aged 6 and 3 had lived here for the last 2½ years. Nor did the Judge explain why it would be beneficial for the children to be in Romania while the Romanian court made its decisions. On the information now available, that can happen wherever the children are living, and there was no contrary information before the Judge. Moreover, as the leading proposal for the children’s future is for them to live with their primary carer in England, it might be thought that there was some advantage in the assessment being made while the children are here.
• In contrast, the Judge gave no identifiable weight to the reason for his being invested with a discretion, namely that the father had agreed to the removal, nor to the inherent unfairness of his then succeeding in summoning the mother and children back.
• The only other positive reason for a return order was that the children could have contact with their father in the interim, but that had to be balanced against the other consequences of summary return and the fact that it had been the father’s original decision to live in a different country to the children. The other matters (that some delay had been due to the pandemic, that the children are used to travelling, and that the mother would return with them) were not reasons in favour of a return, but factors that might mitigate its disadvantages. The Judge also accepted the father’s offer of protective measures at face value, even though his evidence had been fundamentally untruthful and he had already shown himself to have taken legal measures behind the mother’s back.
• The welfare analysis did not address the negative impact of a summary return at all. The children appear to be settled in the colloquial sense and the fact that they have been backwards and forwards in the past is not a reason why that should continue. The Judge noted that the mother would return and could apply to relocate, but he attached no weight to the limbo in which the children would meanwhile be living, or to their important relationship with their maternal grandmother, or to the disruption caused to their mother, who is resident in England and upon whose employment the children depend, or to the prospect of the children being sent to Romania only to return to England if the mother was given permission to relocate, or to I’s wishes. All in all, an effective summary survey of the welfare issues in this case was not carried out; had it been, it would have pointed strongly towards maintaining the interim status quo’.

The Court concluded that in this case the child-centre welfare considerations outweigh policy considerations’ and that the children current situation gave rise to no obvious concerns, and there were no advantage (and considerable disadvantage) in them being moved from where their father had agreed they should be in order for a decision to be taken about their future. Therefore, the Court of Appeal set aside the order for return finding that the exercise of the discretion was erroneous.

A new edition of Geert van Calster’s European Private International Law. Commercial Litigation in the EU has just been published by Hart.

The third edition of the book is a valuable addition to the library of any scholar, practitioner and student interested in matters of Private International Law. The book can serve as a good introduction into the topic for non-EU readers and a refreshing text for those familiar with the EU reality. The author’s experience as a practitioner is a plus for the analysis the book provides. Specific insights into national case law developments on particular aspects of private international law add to the richness of information the reader gets. Compared with the previous edition, the updated text includes some new sections on the realities of Brexit for European Private International Law and developments of the Hague Conference of Private International Law.

The blurb reads:

This classic textbook provides a thorough overview of European private international law. It is essential reading for private international law students who need to study the European perspective in order to fully get to grips the subject.

Opening with foundational questions, it clearly explains the subject’s central tenets: the Brussels I, Rome I and Rome II Regulations (jurisdiction, applicable law for contracts and tort). Additional chapters explore the Succession Regulation, private international law and insolvency, freedom of establishment, and the impact of PIL on corporate social responsibility. The new edition includes a new chapter on the Hague instruments and an opening discussion on the impact of Brexit.

Drawing on the author’s rich experience, the new edition retains the book’s hallmarks of insight and clarity of expression ensuring it maintains its position as the leading textbook in the field.

More information about the book can be found here. The table of contents and a sample reading of the book are available here and here.

The publisher offers a 20% discount to the readers of the EAPIL blog who order the book online at www.hartpublishing.co.uk. Using the code UG7 at the checkout to benefit from the discount.

In two judgments delivered on 10 December 2020, the French Supreme Court for civil and criminal matters (Cour de cassation) extended the reach of French attachments to any claims owed to third parties established in France, irrespective of whether the third party had its headquarters in France or abroad, and irrespective of the situs of the debt.

In the most spectacular case, the Cour de cassation allowed the attachment of rents owed by an American law firm to the United States of America with respect to a building in Paris, because the American law firm was a partnership with an office in Paris.

In both cases, the creditors were represented by French boutique law firm Archipel, which has engineered the most innovative enforcement strategies in recent years in France (in particular against foreign states such as Congo).

Background

The creditor in the first case was an employee of the U.S. embassy in Paris. After he was dismissed, he sued the U.S. in French courts. The U.S. raised a number of procedural arguments, including that it had not been lawfully served, and that the personal immunity of the Ambassador prevented that he be made a joint party to the proceedings (in addition to the U.S.). In 2009, the French court rejected the arguments of the defendants, held that the dismissal was unfair and ordered the U.S. to pay over € 130,000. The U.S. refused to pay. The plaintiff had passed away in the meantime, so his heirs went back to court to obtain an order that the U.S. complies with the judgment under penalty of € 1,000 a day. The U.S. argued that the judgment had not been properly served and still refused to pay (was that to Make America Great Again?). The total sum reached € 734,000.

The U.S. owns a building in Paris that it has been renting to Jones Day for its Paris office. I understand that Jones Day is a U.S. partnership headquartered in Cleveland, Ohio. The Paris office does not have an autonomous legal personality.

The French lawyers of the employee served Jones Day in Paris with an attachment order over the rents owed by the firm to the United States.

Traditional Paradigm: Situs of the Debt

Although it was never clearly formulated by the Cour de cassation, it was widely admitted in France that the focus of the principle of the territoriality of enforcement was the location of the relevant asset. As far as debts are concerned, this meant the situs of the debt. The understanding was thus that French enforcement authorities could attach debts located in France. As debts are intangibles with no genuine location, a rule was designed, which is not uncommon: debts were deemed to be located at the domicile of the debtor. For legal persons with branches in several countries, this meant at their headquarters.

On this basis, the Cour de cassation allowed French attachement orders to reach funds held in bank accounts in foreign banches of French banks. Although the court had not expressly said so, analysts agreed that the rationale for this outcome was that the debts of the foreign branchs were situated in France, at the headquarters of the French bank.

In this case, the debt was owed by an entity headquartered in the U.S. Under the traditional paradgim, it was thus situated in the U.S., and thus beyond reach of French enforcement measures. On this ground, the lower courts set aside the attachments. The employee appealed to the Cour de cassation, and his lawyers clearly argued that a shift in paradigm was necessary.

New Paradigm: Establishment of the Third Party

The Cour de cassation allowed the appeal and confirmed the validity of the attachment of the rents owed by Jones Day to the United States.

It held that French enforcement officers could reach any third party established in France, and that, for that purpose, a third party was established in France either if it had its seat in France or if it had there any “entity” with the power to pay the debt of the debtor.

The court then made clear that whether the situs of the debt  might have been in the U.S. was irrelevant.

These rules were deduced from a redefinition of the rule of territoriality of enforcement, that the court linked to the principle of sovereignty and independence of states, ie its view of public international law. The court held the said rule meant that constraint could only be exercised on a third party established in France. It was thus concerned with persons rather than assets.

Assessment

The shift from a paradigm focused on the location of intangible assets to a paradigm focused on the location of third parties is convincing. Intangible assets in general, and debts in particular, have no physical existence, and are thus located nowhere. The location of debts at the domicile of debtors is artificial, and it is unreasonable to determine the jurisdiction of enforcement authorities on such a factor.

While the shift in paradigm is convincing, the details of the new regime will have to be determined. The criteria for determining the establishment in France of third parties were not fully debatted before the court. It is not clear what the court meant by its reference to entities with the power to pay the debt of the debtor. I will report later on the second case in which a bank established in France was found not to be such an entity.

The University of Amsterdam in collaboration with the Open University, Maastricht University and Tilburg University are organising a conference on Transformative effects of covid-19 on globalisation and law, to be held online on 16 and 17 September 2021.

The conference is organised within the research project named Transformative Effects of Globalisation in Law (TEGL) funded by the Dutch Ministry of Education as part of the multi-year Sectorplan Social Sciences research initiative. The event is envisaged as a series of panels, organized bottom-up and discussing specific angles and questions related to COVID-19 effects and globalisation of law. 

As no area of life remains unaffected by the Coronavirus pandemic – from travelling to doing groceries and from grieving to global politics, there are signs that some of the effects of this period are more transient, while others are here to stay: the pandemic will have had transformative effects in a number of domains. What about law?

Within the research theme Transformative effects of Globalisation in Law, the organisers want to look at the possible transformative effects of the pandemic through three main lenses: boundaries and international cooperation, transformative effects on markets and transformation of institutions. The conference will close with a roundtable reflecting on the implications of the ongoing transformations – (how) can law help in reconstructing “better”, in light of the further crises we are all facing?

As possible themes to be explored, think of the following: Coordination and multi-level pandemic governance; Vaccines, TRIPs exceptions and IP caution; Evidence-based law and policy in the pandemic; Will free movement ever be the same again?; Covid-19 and global trade; Love and care at the time of Covid: reproductive labour; The contestation of expertise and/or; Independent agencies and regulatory institutions – a new role for central banks and competition authorities?; Covid-19 and courts: how to test government intervention in the midst of a global emergency?;Covid-19 and the Anthropocene.

The organisers invite scholars from within and outside the Transformative effects of globalisation in law theme to convene a panel on one of these themes or a related theme investigating by preference the transformative effects of the pandemic on the legal configuration of international cooperation and boundaries, institutions and markets.

Interested scholars must provide an abstract for their panel, including a tentative list of speakers, by 1 April.

More information about the call can be found here.

The post below was written by Alex Layton, of Twenty Essex, London. It is the third and final contribution to an on-line symposium devoted to the fate of the 1968 Brussels Convention, launched after a post by Matthias Lehmann (Brexit and the Brussels Convention: It’s All Over Now, Baby Blue?), which attracted comments by Eduardo Álvarez-Armas, Apostolos Anthimos, Gilles Cuniberti, Burkhard Hess, Costanza Honorati, Alex Layton, François Mailhé and Fabrizio Marongiu Buonaiuti. The previous contributions to the symposium, by Andrew Dickinson and Serena Forlati, can be found here and here.

Since the start of this year, the United Kingdom has been outside the Brussels-Lugano regime and it remains very doubtful that it will be welcomed back into the Lugano Convention 2007 in the near future. In this situation, as previous posts on this blog show, some ideas persist about whether the old Brussels Convention (1968, as amended) and the earlier Lugano Convention (1988) may have taken on a new relevance following the United Kingdom’s withdrawal from the European Union. I shall aim to show that such ideas are misplaced.

The latest development to prompt this discussion is the decision of the District Court of Zurich of 24 February 2021 (here, in German) to deny recognition of an English judgment dated September 2020 and to dismiss the application for a declaration of its recognition dated 18 February 2021. The decision is discussed by Rodrigo Rodriguez in a post on this blog dated 10 March. He says that the Zurich court refused to recognise the English judgment pursuant to the Lugano Convention. And if that is indeed what it decided, then I would agree with him (diffidently, as I am not a Swiss lawyer) that the point was wrongly decided by the Zurich court. But I am not sure that that is what it decided and even if it were I reach that conclusion by a somewhat different route.

I shall first explain my reasons for taking that view, and then turn to the question – also much discussed on this blog and elsewhere – on whether the Lugano Convention of 1988 might have provided an alternative basis for thinking the decision was wrongly decided and the related question of whether the old Brussels Convention of 1968 might also be revived.

Zurich Decision

The Lugano Convention 2007 formed part of the law of the European Union which, by reason of Article 127 of the Withdrawal Agreement, continued to apply “to and in” the United Kingdom during the transition period which ended on 31 December 2020. The critical point is that until that date, the UK was a State bound by the Convention. Article 33(1) of the Lugano Convention provides:

A judgment given in a State bound by this Convention shall be recognised in the other States bound by this Convention without any special procedure being required.

By that Article Switzerland undertook to recognise the English judgment from the time that it took effect in its own state of origin. Recognition of the English involves the extension of its authority into the Swiss legal order. It gained that authority in England – and hence also in Switzerland – in September and (so far as I am aware) nothing occurred in Swiss law to revoke the authority which it gained at that time.

The question of the enforcement of the English judgment is of course different. Here, the Lugano Convention, (like its counterpart in Regulation 44/2001 [Brussels I] but unlike Regulation 1215/2012 [Brussels I bis]), still provided for enforcement to take place following the issue of an exequatur. I can well see that by February 2021, the United Kingdom was no longer a “State bound by this Convention” within the meaning of Article 38(1) of the Lugano Convention which therefore would not (at least readily) provide a legal basis for an order for its enforcement. It would be a matter for Swiss procedural law to provide a mechanism for the inchoate recognition of the English judgment to be weaponised for the purposes of enforcement.

In the event, I think this is what the Swiss court actually decided. The judgment notes that the application was for a Vollstreckbarerklärung – a declaration of enforceability – which is what Article 38 relates to, rather than a declaration of recognition (Annerkennung). Indeed Article 38(1) is expressly referred to in the judgment.

In the converse situation, if an English court were now called upon to enforce a Swiss judgment given before 31 December 2020, it could clearly not do so pursuant to any legal powers in the Convention. English law is a dualist system and the domestic legislation giving effect to EU law – and hence to the Lugano Convention – was repealed with effect from 31 December 2020. Unlike the provisions of Brussels I bis, which continue to have effect in respect of judgments given in other EU states before that date, by reason of Article 67(2) of the Withdrawal Agreement, no such provision was made in respect of the Lugano Convention. This is not surprising, as it was not within the competence of either the EU or the UK to provide for the continued application of the Lugano Convention in relation to non-EU Contracting States. The statement by the Swiss Federal Office of Justice suggesting that the Lugano Convention would continue to apply cites the principle that jurisdiction is founded as a matter of principle upon the commencement of proceedings. But, with great respect,  that seems to me to lose sight of the distinction between adjudicatory jurisdiction to which that principle applies, and enforcement jurisdiction which probably requires a separate analysis.  The statement also cites doctrine pointing to Article 67.2 of the Withdrawal Agreement by way of analogy, but rightly does not concur with that view. Such an analogy would anyway be unconvincing unless Switzerland has ceded to the EU treaty-making powers in the field of civil justice (which I am not aware that it has).

How would an English court react in the converse situation? Although I am not aware of any case in which it has been tried, it is at least arguable that English law would recognise a Swiss decision made before 31 December 2020 and would find an alternative procedural means (such as an action for a declaration of recognition, or an action at common law on the Swiss judgment relying on its prior inchoate recognition under Article 33) that would enable this to occur. English law provides that a repeal does not affect any right acquired under the repealed enactment (Interpretation Act 1978, s. 16((1)(c)) and the extended authority of the Swiss judgment pursuant to Article 33 would probably confer such a right on the judgment creditor.

Interestingly enough, the non-application of the Lugano Convention after 31 December 2020 for a judgment given before that date was recognised as a potential issue in UK – Norwegian relations. By an Agreement signed in Oslo on 13 October 2020, the old bilateral convention on recognition and enforcement of judgments dating from 1961 was updated in certain respects, and provided, by Article 2(2), that:

The Parties shall continue to apply the rules of the Lugano Convention 2007 concerning recognition and enforcement of judgments, to the same extent that those rules applied immediately before the Lugano Convention 2007 ceased to apply to the United Kingdom and subject to the same limitations set out therein, to judgments given in proceedings that were instituted in a court of one of the Parties before the Lugano Convention 2007 ceased to apply between the Parties.

There was no equivalent bilateral convention between the United Kingdom and Switzerland, but there would be nothing to stop the UK and Switzerland – neither of which is now bound by the exclusive external competence of the European Union – from concluding a bilateral agreement to the same effect. Does the absence of an equivalent agreement with Switzerland perhaps support the idea that the Lugano Convention does not have an after-life in Anglo-Swiss relations?

Lugano 1988 (and Brussels 1968)

So, if Lugano 2007 does not live on, does the old Lugano Convention of 1988 maybe have an after-life? And if this involved an EU state, would the 1968 Brussels Convention maybe also have an after-life? In summary, a purposive interpretation of Brussels I and Lugano 2007 leave little or no room for doubt that the older instruments were intended to be consigned to the history books. The arguments have been well canvassed in earlier posts, notably by Andrew Dickinson, and I will not go over them again here.

But what of a literal textual interpretation?  True, the Lugano Convention of 1988 continues to govern relations with those non-European territories of France and the Netherlands to which the 2007 Convention has not been applied by their European ‘mother’ states: Articles 69(7) and 73(2). But this seems to me to be nowhere to the point. Also true, the 1988 Convention is not among those superseded by Lugano 2007 as defined by Article 65 and Annex VII. But Article 69(6) of the 2007 Convention is clear enough in providing that it “shall replace” (French: remplace; German: ersetzt) the 1988 Convention. That was a stipulation which was binding on the United Kingdom at the time, and which continues to bind Switzerland. It conveys a displacement of the old convention and the emplacement of the new convention. It does not leave linguistic room for the revival of the displaced.

So, what of the Brussels Convention of 1968?  Admittedly, when it was overtaken by the Brussels I regulation, the latter provided by Article 68 that it “shall …. supercede” the Brussels Convention, and that “supercede” has a less definitive tone that “replace”. But any such linguistic distinction disappears when confronted by other language versions. French uses the word “remplace” as in Lugano 2007.  The German text states “tritt … an die Stelle” (literally, “takes the place of”).

But perhaps the best literal argument for the afterlife of the Brussels Convention is that Article 70 of Brussels I (and also of Brussels I bis) provides that conventions referred to in Article 69 “shall continue to have effect” in relation to matters to which the Regulation does not apply. Read in isolation, that might suggest a revival of the Brussels Convention in relation to those Member States which were parties to it in its last amended form (that is, before the 2004 expansion of the EU). But the argument is harder to sustain when it is read together with Articles 68 and 69. Article 68, as we have just seen, provides for the Brussels Convention to be superceded, while Article 69 in turn refers to conventions which cover the same matters as  Brussels I, but then goes on to list “in particular” conventions not including the Brussels Convention. Although linguistically Article 69 can be read as including the Brussels Convention, read in context it is plain that it is not contemplated by Article 70.

Finally, the last word as far as English law is concerned lies with the UK legislator, which has repealed the provisions which gave effect to both Lugano Conventions and the Brussels Convention. In a dualist system, that is the end of the matter. If other states choose to regard  those instruments as still being in effect, that is a matter for them; but if their domestic legal systems require reciprocity as a condition of recognising foreign judgments, they will not find it in English law except in the limited class of cases in which English law recognises foreign judgments. Both under bilateral conventions, of which there are half a dozen with other Member States (France, Belgium, Netherlands, German, Italy and Austria) and under English common law, recognition is accorded only to final judgments for fixed sums of money given by a court of a country within whose territory the defendant was present when the proceedings began or to the jurisdiction of which the defendant agreed or submitted.

In conclusion, it is clear to me that both theoretically and as a matter of practical application of the law, and subject only to transitional exceptions for the Brussels I bis regulation and minor exceptions for non-European territories of Member States for both the Brussels and the Lugano instruments, the entire Brussels-Lugano regime no longer applies as between the United Kingdom and either other Member States or other Lugano states. Apart from Norway.

So, now, the question is whether the UK will be re-admitted to the 2007 Lugano Convention. The UK made its application in April 2020 and Switzerland, Norway and Iceland have all given their approval. But the EU (including Denmark in its own right) has yet to make its position clear. By Article 72(3) of Lugano 2007, it shall endeavour to give its consent at the latest within one year after the invitation by the Depositary. It only has a few weeks left, and its consent looks increasingly unlikely.

The author of this post is Olivera Boskovic, who is Professor of Private Law at the Université de Paris.

Background

On 12 February 2021, the Supreme Court of the United Kingdom delivered its judgement in Okpabi and others v. Royal Dutch shell and another. The action was brought by two Nigerian communities against Royal Dutch Shell, the UK-domiciled parent company of a multi-national group of companies and its Nigerian subsidiary. The appellants claimed that numerous oil spills in the vicinity of their communities had caused environmental harm leading to damage to health and property.

The first question was a jurisdictional one. Could the UK courts hear the case? This depended, among other questions, on “whether the claimants had an arguable case that a UK domiciled parent company owed them a common law duty of care so as to properly found jurisdiction against a foreign subsidiary company as a necessary and proper party to the proceedings”.

As underlined by Eva-Maria Kieninger, contrary to the decision in Vedanta, the Supreme Court did not clearly distinguish in Okpabi, as it should have, jurisdiction over the parent company and jurisdiction over the subsidiary. Having said that, at first instance and on appeal, it was held that “there was no arguable case that RDS owed the appellants a common law duty of care to protect them against foreseeable harm caused by the operations of SPDC”. On the contrary, the Supreme Court answered this question affirmatively and allowed the appeal.

A very important part of the jurisdictional question is thus solved in favour of the appellants. However, the final result is uncertain since the High court after remitting may still have to address some jurisdictional issues, at least concerning the subsidiary, such as forum non conveniens and/or access to justice in Nigeria which were not addressed in these proceedings.

The decision is in line with the landmark case Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents), decided in 2019.

Key Findings

Concerning the duty of care, at the jurisdictional stage, the key points to remember are the following :

• When determining the arguability of the claim at the interlocutory stage, the court should focus on the particulars of the claim, rather than the weight of the evidential case. Factual assertions on which the claim is based should be accepted by the court unless, exceptionally, they are demonstrably untrue and unsupportable and this will be the case only in very exceptional cases. Mini-trials should be avoided. On the documentary evidence it is particularly important to note that the preferred test is “are there reasonable grounds for believing that disclosure may materially add to or alter the evidence relevant to whether the claim has a real prospect of success » (§128)? (For the purpose of comparison, on the difficulties of access to documents which could establish the exact way of functioning of the group of companies in the French context see an interesting example Paris Court of Appeal, 17 September 2020, no. 19/20669)
• The existence of duty of care depends on the circumstances. There is no limiting principle such as the one the Court of Appeal relied on when deciding that the issuance of group wide policies can never give rise to a duty of care. Secondly the Court of Appeal focused inappropriately on the issue of control which in fact should only be the starting point. A duty of care may arise regardless of the issue of control as in the situation where the parent holds itself out as exercising that degree of supervision and control over its subsidiaries even if it does not in fact do so.
• As already stated in Vedanta, “the liability of parent companies in relation to the activities of their subsidiaries is, not of itself a distinct category of liability in common law negligence”. The general principles which determine such liability are “not novel” and hence do not require “an added level of rigorous analysis”

Jurisdiction: A Comparative Perspective

After Vedanta and Okpabi one can now say that English courts seem more prepared to hear cases brought at the same time against UK based companies and their over-seas subsidiaries. This is a very important step. Under the Brussels regime, no longer applicable in the UK, jurisdiction for an action brought against a UK domiciled company was easy to establish, but it was associated with the extreme difficulty of establishing liability (However, it is worth noting that the future is unclear; will the UK join the Lugano Convention or will it go back to common law rules on jurisdiction ?).

On the other hand, jurisdiction for an action brought against over-seas subsidiaries was very uncertain. Indeed, jurisdiction against foreign companies for damage sustained in a foreign country by foreign claimants was considered as problematic not only in the UK but in many countries.

In France, before the 2017 Duty of vigilance Act was adopted the main rules for jurisdiction based on the domicile of the defendants, the place of the harmful event or the nationality of the claimant did not allow French courts to assert their jurisdiction in such cases. Two possible grounds for jurisdiction, co-defendants and the risk of denial of justice, did exist, but both were very uncertain.

In 2017 the French Parliament adopted the Duty of Vigilance Act requiring certain large companies to identify risks that their business creates for human rights and the environment and prevent violations. Under certain conditions these companies can be liable for damage caused by their subsidiaries or companies in their supply chain. This means that, since 2017, mother companies can be considered as proper defendants. Hence, within the limited scope of the Duty of vigilance Act the co-defendants rule should be able to found the jurisdiction of the French courts over foreign subsidiaries. Outside of its scope, the situation remains uncertain.

At EU level, a recent proposal was made to introduce a forum necessitatis in the Brussels I recast which would, under certain conditions, give jurisdiction to Member States’ courts  to decide on business-related civil claims on human rights violations brought against undertakings located in third-countries, but within the supply chain of an EU undertaking. It was also proposed to amend the Rome II Regulation (see the posts of Geert Van Calster, Giesela Rühl, Jan von Hein, Chris Thomale, Eduardo Álvarez-Armas). Both of these proposals were rejected last week.

Choice of Law

Accepting jurisdiction is only the beginning.  The next step, which will be more difficult, is establishing liability. The liability of the subsidiary will, no doubt, be governed by the law of the place of the damage, which is also the law of the place of the causal event and the law of the place of the domicile of the subsidiary.

However, concerning the liability of the mother company one can hesitate. In Okpabi, the court considered that liability was governed by Nigerian law, which was identical to English law.

For environmental torts, Article 7 of the Rome II Regulation gives the claimant a choice between the law of the place of the damage and the law of the place of the causal event. Although this rule seems favourable to the claimants, the definition of the terms “causal event” gives rise to many questions. Is the causal event necessarily the material act that triggered the environmental damage or could one consider that decisions and environmental policy can constitute the causal event?

For other types of damage, the general rule in Article 4, and therefore the law of the place of the damage, applies. This means that in situations where one cannot consider that the local law is identical to the law of the domicile of the mother company, the choice of law question might be problematic.

In the light of these considerations, it appears that the discussion about the modification of the Rome II regulation proposed by the Committee on legal affairs of the European Parliament and rejected last week was a very important one (Although, the suggested rule was far from perfect, the idea of introducing such a rule was, to say the least, worth considering. On this modification see among others O. Boskovic, ‘La loi applicable aux «actions pour violations des droits de l’homme en matière commerciale»’, Recueil Dalloz 2021, p. 252).

Even though courts are starting to address these questions with existing tools (It is worth noting that the first appeals decision resulting in a victory on the merits for the victims in a foreign direct liability case was rendered on 29 January 2021 by the Hague Court of Appeal in the case of Four Nigerian Farmers and Milieudefensie v. Shell), a well drafted European choice of law rule would be very welcome. The same could be said of a European approach of mass tort litigation, the risk of which is raised by this decision. But this is yet another story.

Based on the priorities defined for the Portuguese Presidency of the Council of the European Union in the area of Justice, the Ministry of Justice of Portugal will host on 30 March 2021 a conference under the title Protecting Vulnerable Adults Across Europe – The Way Forward.

The relevance of private international law – and, specifically, the Hague Convention on the International Protection of adults – to the realisation of the fundamental rights of adults with disabilities features among the key topics of the conference.

Speakers include Salla Saastamoinen (Directorate-General for Justice and Consumers, European Commission), Zampia Vernadaki (Secretariat of the JURI Committee, European Parliament), Philippe Lortie (First Secretary, Hague Conference on Private International Law), and Jean-François de Montgolfier (Ministry of Justice, France).

Older persons, people with physical, intellectual, sensory or psychosocial impairments, and victims of hate crime or gender-based violence are among those adults who may face particular challenges in exercising their rights, defending their interests and accessing justice in civil and criminal proceedings.

Cross-border situations may further exacerbate these issues by creating additional obstacles with respect to language, representation and differences in national legal systems. This can particularly affect ‘vulnerable’ adults wishing to exercise their right of freedom of movement within the Union. In addition, the COVID-19 pandemic has increased the difficulties that this population faces.

These challenges affect a significant proportion of the European Union’s population. European societies are ageing and Eurostat expects that, by 2050, one-fifth people in the EU will have some form of impairment. This is likely to result in an increase in the numbers of people who may need support to protect their interests and participate on an equal basis with others in civil and criminal proceedings.

Since 2008, initiatives in the area of civil law have promoted the ratification of the 2000 Convention on the International Protection of Adults and discussed how to improve its application. Yet the overall situation in the EU remains far from satisfactory.

In the area of criminal law, the new EU Strategy on Victims’ Rights 2020-25 recognises the need to explore how to enhance the protection of adults in vulnerable situations.

In addition, since 2018, all EU Member States – and the EU itself – are States Parties to the UN Convention on the Rights of Persons with Disabilities.

As the protection of ‘vulnerable’ adults is one of the priorities of the Portuguese Presidency of the Council of the EU in the area of Justice, the Portuguese Ministry of Justice, the European Commission and the European Union Agency for Fundamental Rights (FRA) are organising a virtual High-Level Conference on 30 March 2021.

This event provides an opportunity to reflect on the current situation and look ahead to what steps are necessary to ensure that all members of our diverse societies can enjoy their fundamental rights, including equal access to justice, in practice.

Attendance is free. The practical information to attend may be found here. See here for general information on the event, including the detailed programme.

Gustavo Cerqueira and Nicolas Nord have edited a collection of essays, mostly in French, on the ascertainment of foreign law, titled La connaissance du droit étranger: à la recherche d’instruments de coopération adaptés. The book was published by the Société de législation comparée in late 2020.

The editors have kindly provided the following presentation in English.

Foreign law occupies an increasing place in practice not only for the judge, but also for other legal professions: notary, civil registrar, lawyer in particular. The most apparent causes for this increase are the proliferation of European Union regulations in private international law and the development of jurisdictions or specialized chambers in international litigation and the application of foreign law. A real competition has appeared in this regard for several years. Beyond the only aspect of litigation conventionally considered, the taking into account and the application of foreign law becomes essential for other perspectives: obligation of advice, non-contentious matters, drafting of acts, asset optimization, planning of international corporate transactions, among others.
The stakes are therefore crucial and the search for suitable cooperation instruments for a good knowledge of foreign law is essential.
This book contributes to the reflections on this subject. It thus includes an important inventory which makes it possible to update the diversity of regimes in the legal orders studied and the heterogeneity of professional practices. Concrete solutions are also proposed. They are the result of cross-discussions and round tables during the conference held at the French Cour de cassation on 28 November 2019.
While the apparent objective may be to achieve the adoption of a general instrument with the widest possible geographical scope, it quickly appeared vain to try to favor such an approach at present. On the one hand, each profession has different needs, on the other hand, the level of development of the different systems compared is not the same. While some are lagging behind and are struggling to adopt satisfactory rules in this area, others are at the forefront and therefore are really in demand for a cooperation instrument whose usefulness does not seem obvious to them. The various contributions and debates made it possible to consider paths for reflection as numerous as diverse, ranging from the revitalization of old instruments to the creation of specialized institutions at internal, international or European level, including the establishment of specific mechanisms or the use of artificial intelligence. Such an abundance shows the crucial nature of the issue and the vitality of the reflections carried out on it, but also the relevance of having debated it and the need to continue to do so.
In this sense, the next stage of this debate could be that of the opportunity of adopting a European regulation on the matter.

The book comes with a preface by Hélène Gaudemet-Tallon. The authors include, in addition to the editors themselves: Cyril Nourissat, François Ancel, Cyril Roth, Dominique Foussard, Olivier Berg, Nicolas Nord, Jochen Bauerreis, Guillermo Palao Moreno, Lukas Heckendorn Urscheler, Gustavo Ferraz De Campos Monaco, Patrick Kinsch, Maria Rosa Loula, Jean-Noël Acquaviva, Jean-Louis Van Boxstael, Marie Vautravers, Rodrigo Rodriguez, Wolfgang Rosch, and Françoise Monéger.

For more information, including the table of contents, see here.