EAPIL blog

A book titled International Commercial Arbitration in the European Union, by Chukwudi Ojiegbe, has recently been published by Edward Elgar.

The blurb reads as follows:

This illuminating book contributes to knowledge on the impact of Brexit on international commercial arbitration in the EU. Entering the fray at a critical watershed in the EU’s history, Chukwudi Ojiegbe turns to the interaction of court litigation and international commercial arbitration, offering crucial insights into the future of EU law in these fields. Ojiegbe reviews a plethora of key aspects of the law that will encounter the aftermath Brexit, focusing on the implications of the mutual trust principle and the consequences for the EU exclusive competence in aspects of international commercial arbitration. He explores the principles of anti-suit injunction and other mechanisms that may be deployed by national courts and arbitral tribunals to prevent parallel court and arbitration proceedings. Advancing academic debate on the EU arbitration/litigation interface, this book suggests innovative solutions to alleviate this longstanding and seemingly intractable issue. Arriving at a time of legal uncertainty, this book offers crucial guidance for policymakers and lawyers dealing with the interaction of court litigation and international commercial arbitration in the EU, as well as academics and researchers studying contemporary EU and commercial law.

More information available here.

Following a lecture delivered in September 2020 at the Max Planck Institute for Comparative and Private International Law in Hamburg, Giesela Rühl (Humboldt University of Berlin) published a paper on SSRN – Towards a German Supply Chain Act? Comments from a Choice of Law and Comparative Perspective – analysing the project for a legislative proposal expected to shape Germany’s legislation in the field of corporate responsibility.

The project for a Supply Chain Act (Lieferkettengesetz) comes as a response to a second national survey published in July which analysed the implementation of the National Action Plan on Business and Human Rights (NAP). According to the results presented by the Federal Labour Minister Hubertus Heil and Federal International Development Minister Gerd Müller only a few companies are voluntarily taking responsibility to ensure that human rights are respected in their supply chain. Consequently, the coalition considered that the idea of a national supply chain law needs to be pursued. A hearing by the Committee for Human Rights and Humanitarian Aid of the German Bundestag that took place on 28 October 2020 under the leadership of Gyde Jensen (FDP) showed that many experts in Germany are in favour of a Supply Chain Law. Experts from business, politics and society predominantly supported the federal government’s plan for such a law, which is intended to improve compliance with human rights and environmental standards in the global environment.

As the subject remains a hot topic for the German legislator and it will have consequences beyond the German territory, Prof. Rühl’s addresses some of these relevant aspects from a private international law and comparative perspective. The abstract of the paper reads as follow:

The protection of human rights in global supply chains has become one of the most hotly debated issues in public and private (international) law. In a number of countries, including the United Kingdom, France and the Netherlands, these debates have led to the introduction of domestic human rights legislation. In other countries reform plans are under way. In Germany, for example, the federal government recently announced plans to adopt a German Supply Chain Act, which, if passed as suggested, will introduce both mandatory human rights due diligence obligations and mandatory corporate liability pro-visions. The following article takes this announcement as an opportunity to look at the idea of a German Supply Chain Act from both a choice of law and from a comparative perspective. It argues that that any such Act will necessarily be limited in both its spatial and in its substantive reach and, therefore, recommends that Germany refrains from passing national legislation – and supports the adoption of a European instrument instead.

The author of this post is Franz Kaps, Lawyer at DL Piper, Frankfurt am Main.

To stop the spread of the COVID-19 (Coronavirus) pandemic governments closed ports and “non-essential businesses”, restricted travel and imposed “lockdowns” or “stay-at-home” orders. In cases where the COVID-19 pandemic or government measures disrupt commercial contracts, it is necessary to carefully analyze the state of affairs to determine the appropriate remedy. A considerable number of articles have already been written on contracts affected by the COVID-19 pandemic, and now it is time to summarize the legal situation for commercial contracts in the most important jurisdictions in a nutshell. This post therefore presents remedies for commercial contracts affected by COVID-19, under the laws of the countries whose systems are most commonly chosen to be applied to commercial contracts, and the CISG.

UK, Hong Kong, Singapore Force Majeure

Force majeure is principally a matter of contract law in the common law jurisdictions England, Hong Kong and Singapore. Whether a force majeure clause is applicable in a particular situation and its consequences depends primarily on the wording of the force majeure clause. A clause modelled, for example, on the 2020 ICC force majeure clause (long form), presumes that an epidemic is a force majeure event; pandemics such as COVID-19 are not expressly mentioned, therefore it will be for the arbitral tribunals and courts to interpret the term “epidemic” under no. 3 (e) ICC to encompass pandemics.

The burden of proof is on the party invoking the force majeure clause as defense. Such a party has to demonstrate that a force majeure event occurred and that it had the stipulated effect on the contractual performance. If a party invokes a force majeure clause in a commercial contract, it releases the party from its contractual obligations when circumstances beyond its control have prevented, hindered or delayed its performance.

In case the COVID-19 pandemic falls within the scope of the force majeure clause, parties should carefully examine whether there are other relevant contractual terms affecting the application of the clause – in particular, whether there are any requirements to notify the other party before invoking the clause.

Frustration

Besides force majeure clauses, the main common law doctrine with potential relevance to the discharge of obligations in the light of unforeseen events – like the COVID-19 pandemic – is frustration. According to it, a contract may be discharged upon the occurrence of an unforeseeable event that either renders the contractual obligation impossible or radically changes the basis upon which the contract was reached. However, it should be noted that the doctrine of frustration has a very limited scope.

Germany Impossibility

Pursuant to Section 275 German Civil Code (BGB) a party is not required to perform its obligations to the extent that performance is impossible. Section 275 German Civil Code applies not only if performance of the obligation is technically or legally impossible, but also in cases where performance is still technically and legally possible, but would require expenses and efforts which, considering the subject matter of the obligation and the requirements of good faith, would be grossly disproportionate to the creditor’s interest of performance. In addition, Section 275 German Civil Code governs temporary impediments, i. e. a claim for performance is excluded as long as performance is impossible. However, German courts respect the legal principle pacta sunt servanda and hence apply Section 275 German Civil Code narrowly, in order not to undermine the agreed contractual obligations.

Frustration of Purpose

The doctrine of “frustration of purpose” (German Störung der Geschäftsgrundlage) can be invoked in cases affected by the COVID-19 pandemic. Frustration of purpose under Section 313 German Civil Code will apply where the balance between performance and counter-performance of a contract is significantly changed in a way that was not foreseeable by the parties when the contract was concluded. Such a “frustrated contract” entitles the disadvantaged party to request the amendment of the contract. If an amendment of the contract is not possible or unreasonable, the disadvantaged party may rescind or terminate the contract. According to case law the principle of “contractual loyalty” requires a strict interpretation of Section 313 German Civil Code.

France Force Majeure

Article 1218 French Civil Code addresses the concept of force majeure. According to its Article 1218 , the debtor’s performance is prevented by a force majeure event if three cumulative criteria are met:

1. The event must be beyond the control of the debtor;
2. It must be an event which could not reasonably have been foreseen at the time of the conclusion of the contract; and
3. The effects of the event could not be avoided by appropriate measures.

The legal consequence of Article 1218 French Civil Code is that if performance of the obligation is temporarily prevented, it is suspended unless the delay justifies termination of the contract. In the event of permanent prevention, the contract is terminated by operation of law and the parties are discharged from their obligations.

Hardship

The recently introduced Article 1195 French Civil Code requires renegotiation of a contract if circumstances which were unforeseeable at the time of conclusion of the contract render performance excessively onerous for a party which had not accepted to bear that risk. If renegotiations fail, the parties may agree to terminate the contract, or request a court to revise or terminate the contract.

Switzerland

Swiss law has no statutory provision for force majeure events. In the absence of a force majeure clause in a contract, the applicable legal regime depends on whether the performance of the contract is impossible.

Pursuant to Article 119, 62 Swiss Code of Obligations, the impossibility to perform a contract – due to circumstances not attributable to the debtor – releases both parties from their obligations to perform and leads to the unwinding of the contract according to the rules of unjust enrichment.

In case the impossibility to perform the obligation lasts only for a limited time, the default provisions of Article 107 to 109 Swiss Code of Obligations apply. They provide that if one party is in default, the other party may set an appropriate time limit for the performance. If no performance is rendered during such a time limit, the other party may terminate the contract.

When the performance of a contract is not entirely impossible, but has become extremely onerous, a party may rely on the legal doctrine clausula rebus sic stantibus. It must be a situation which is not only extremely onerous but was also unforeseeable when the contract was concluded. In such circumstances, the parties may agree to amend or terminate the contract. Should one party insist that the contract remains unchanged, the other party may refer the matter before a court. If the requirement of clausula rebus sic stantibus are fulfilled, the court may order an amendment or the termination of the contract.

United States

U.S. contract law is ordinarily a matter of state law. I will focus on New York law, as it is the most commonly chosen by commercial parties to govern their contracts.

Contractual Force Majeure Clauses

Force majeure clauses are contractual provisions that may excuse a party’s non-performance when circumstances beyond the control of a party prevent performance. New York courts have held that force majeure clauses are to be interpreted in a narrow sense and that performance under a contract is ordinarily excused only if the event preventing performance is explicitly mentioned in the force majeure clause.

Subsidiary Solutions

In the absence of a force majeure clause, the common law doctrines of impossibility, impracticability and “frustration of purpose” may excuse performance.

The doctrine of impossibility excuses a party’s performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible. The impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract. Impossibility is therefore a narrow legal doctrine.

The doctrine of impracticability is similar to the doctrine of impossibility, but it is more flexible in its application. According to the doctrine of impracticability, a failure to perform contractual obligations is excused, if a party’s performance is made impracticable without its fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made. Courts have generally applied the doctrine of impracticability conservatively.

Frustration of purpose is a common law doctrine that excuses a party’s performance under a contract when an unforeseen event renders the contract “virtually worthless” to the affected party. Although a literal performance under the contract is still technically possible, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense. The threshold of the doctrine of frustration of purpose is high, because performance of the contract must be economically impossible.

United Nations Convention on Contracts for the International Sale of Goods (CISG)

The CISG is applicable to contracts for the sale of goods between parties who have their place of business in different states, if these states are contracting states or if the rules of private international law lead to the application of the law of a contracting state and the CISG was not expressly excluded in the contract.

Strict Liability

Contracts for the supply of goods under the CISG are governed by the strict liability of the debtor. It is therefore irrelevant for the liability of the debtor whether they are responsible for the improper performance or the non-performance of their contractual obligation.

Exemption of Liability

In order to mitigate the strict liability of the debtor, Article 79 CISG provides for an exemption from the debtor’s liability if the failure to perform any of their obligations is due to an impediment beyond their control. It is additionally required that they could not reasonably be expected to have taken the impediment into account at the time of conclusion of the contract or to have avoided or overcome the impediment or its consequences. Article 79 CISG is advantageous to the seller. If the non-performance of an obligation to deliver is based on a force majeure event, the seller is released from the obligation to perform the contract for the period of the impediment. Also, the seller is not obliged to pay damages, because the performance is prevented by the force majeure event. However, pursuant to Article 79 para. 4 CISG the seller must inform the buyer of the impediment and its effects on their ability to perform within a reasonable period of time after they have or should have become aware of the impediment. Otherwise, they are liable for damages resulting from such non-receipt. The burden of proof that a contractual obligation was not performed or was delayed as a result of the COVID-19 pandemic lies with the debtor.

International practice accepts epidemics as being beyond the debtor’s typical sphere of control. Consequently, the COVID-19 pandemic could constitute a minore ad maius an impediment beyond control according to Article 79 CISG. Whether the COVID-19 virus exempts debtors from their obligation to perform the commercial contract depends on the individual case, since it requires a causal link between the impediment and non-performance.

Takeaway

The impact the COVID-19 pandemic will have on the parties’ commercial contracts depends primary on the wording of their force majeure clause. In case of a force majeure event, the arbitral tribunals and the courts grant the terms of a commercial contract precedence over the applicable law. If a commercial contract does not contain a force majeure clause, or if does not cover pandemics, the applicable laws determine the available remedies. The remedies and requirements under the applicable law for commercial contracts affected by the COVID-19 pandemic differ. National laws have in common that legal doctrines which amend or terminate contractual agreements are narrowly construed. The underlying consideration is that arbitral tribunals and courts are only exceptionally authorized to “rewrite” the contractual obligations of the parties. It is therefore decisive whether the contractual provisions comprise a force majeure clause covering the COVID-19 pandemic. Against this backdrop parties should commercial evaluate – based on the facts of each case – their options to invoke a force majeure defense or to perform, amend, or terminate their commercial contracts.

In light of the high thresholds for a force majeure defense under the applicable law, it is essential to ensure legal certainty by including a force majeure clause in commercial contracts which clearly encompasses epidemics and pandemics. In particular, the party that would be affected by an epidemic or pandemic in the performance of its contractual obligations should assure that such events are expressly referred to in their force majeure clause, to ensure a balanced distribution of risks. Whether the situation is one of an epidemic or a pandemic should be determine by an objective criterion: a declaration by the World Health Organization would be useful to decide when the events under examination trigger the force majeure consequences.

Good starting point for future “tailor-made” force majeure clauses in commercial contracts is the balanced 2020 ICC force majeure proposal. Moreover, as in our globalized world, the next epidemic or pandemic will spread sooner or later, a lege artis force majeure clause must cover epidemics and pandemics.

The University of Lyon (EDIEC-CREDIP) hosted a webinar (in French) under the title Situations in Motion : Debate on the Method, now available for online viewing.

Jean-Sylvestre Bergé (University of Côte d’Azur and French University Institute, IUF) presented his research project on Situations in motion and the Law, soon to be published in Q1 2021 (Dalloz). The webinar was co-chaired by Ludovic Pailler (University of Lyon) and Cyril Nourissat (University of Lyon) and organised by Marie Brossard and Véronique Gervasoni.

More details here.

By a judgment of 18 November 2020 in the case Ryanair v DelayFix, the CJEU has ruled that an assignee is not bound to a jurisdiction clause in the contract from which the assigned claim arose. While the ruling concerned the compensation claim of a passenger for a cancelled flight, it is cast in very general terms. It will therefore have far-reaching repercussions for all other cases of assignment of individual claims.

Facts

DelayFix, formerly Passenger Right, is a collection agency for the defence of air passenger rights. It started legal proceedings against Ryanair in Warsaw on the basis of compensation rights assigned to it by a Polish passenger after a cancelled flight. Ryanair contested the Warsaw court’s jurisdiction, relying on a choice-of-forum clause in its general terms and conditions in favour of Irish courts.

In the course of the proceedings, the Regional Court Warsaw submitted to the CJEU the question whether the jurisdiction clause is binding under Art 25 of the Brussels I bis Regulation or whether it is invalid under the Unfair Terms Directive.

Legal Issues

The CJEU split the question in two different issues: (1) Is the collection agency bound by the jurisdiction clause contained in the airline’s standard terms under the Brussels I bis Regulation? (2) Is the jurisdiction clause in the airline’s standard terms unfair within the meaning of the Unfair Terms Directive?

Third-party Effects of Jurisdiction Clauses

With regard to the first question, the CJEU issued a resounding “NO”. It stated at para 46 that

a jurisdiction clause incorporated in the contract of carriage between a passenger and that airline cannot, in principle, be enforced by the latter against a collection agency to which the passenger has assigned the claim.

An exception would exist only where the collection agency is the successor to all the initial contracting party’s rights and obligations (para 47). A case in point is the take-over of a contract, which is however not to be confounded with an ordinary assignment. The CJEU left it for the referring court to determine whether this exception applied in the present case.

The holding was to some extent predictable from earlier case law, see in particular the CJEU judgment in CDC Hydrogen Peroxide or in Refcomp. In these cases, the CJEU had stressed the relative effect of jurisdiction clauses and the freedom to agree on the competent court. The court had ruled that a third party who did not agree to the jurisdiction clause was bound to the latter only if it had succeeded to the original contracting party’s rights and obligations.

Nevertheless, the CJEU case law had identified several situations in which a third party is bound as a legal successor to a jurisdiction clause to which it had not agreed. It was ruled that such a binding effect would exist where a jurisdiction clause is included in the articles of association of a company (see the CJEU judgment in Powell Duffryn), in the prospectus of a bond (see the CJEU judgment in Profit Investment) or in a bill of lading (see e.g. the CJEU judgments in Russ and Coreck).

The literature had assumed that a legal succession would also exist in the event of an assignment and that the jurisdiction clause would therefore also extend to an assignee of a claim (see e.g. Magnus in Magnus and Mankowski (eds) ECPIL Art. 25 Brussels Ibis Regulation para 161; Stadler in Musielak and Voit (eds) ZPO Art. 25 Brussels Ibis Regulation para 4a). The CJEU now takes the opposite position: The assignee of a claim is not bound to a jurisdiction clause in the contract from which or in the context of which the claim arises.

Negative Effects for Agreements on the Jurisdiction of EU Member State Courts

The ramifications of this ruling are significant. For the first time, the CJEU has held that an assignee is not bound by a choice-of-forum agreement between the assignor and the debtor. As a result, the binding effect of jurisdiction clauses will be weakened. It suffices for a creditor to assign a claim to avoid an unpleasant jurisdiction clause in a contract. This behaviour cannot be excluded by a contractual prohibition of assignment because the latter is not always allowed. The ruling thus opens up manifold possibilities to circumvent jurisdiction agreements.

In this context, it must be remembered that the CJEU judgment covers only agreements on the jurisdiction of a Member State court. Jurisdiction agreements in favour of courts of third countries, such as the UK or Switzerland, will be governed by national law, which often considers the assignee to be bound. Arbitration clauses, which are considered binding on the assignee under most national laws, will also remain untouched. In sum, the CJEU has done a great disservice to EU Member State courts. It has given an incentive to choose third state courts and arbitral tribunals in their stead.

Unfairness of Jurisdiction Clauses

With regard to the second question, the CJEU referred to the national court to assess whether the jurisdiction clause in favour of Irish courts was unfair to the Polish passenger. This is understandable given that the Directive needs national transposition and national courts are competent apply the transposing legislation.

There are nevertheless two important takeaways from the CJEU’s judgment with regard to the assessment of unfairness.

First, the Court of Justice did not consider DelayFix – a business enterprise – as being precluded from invoking the unfairness of the clause under the Unfair Terms Directive, although the latter only covers contracts with consumers. The CJEU stresses that the scope of the Directive does not depend on the identity of the parties to the dispute but on the capacity of the parties to the agreement (para 53). Hence the validity of the clause must also be assessed in a subsequent proceeding between two businesses.

Second, the CJEU did not see the consumer protection provisions of the Brussels Ibis Regulation as an obstacle to a finding that the clause were unfair. One could have considered the protection under the Unfair Terms Directive superfluous given that the consumer is anyway protected by the jurisdiction of the courts at its domicile under Art 17 et seq. of the Brussels Ibis Regulation. That is however not the position of the CJEU. Instead, it asks the national court to assess the invalidity of the jurisdiction clause in an abstract manner, independently of the Brussels Ibis Regulation.

As a result, the Unfair Terms Directive may potentially apply to jurisdiction clause in a business-to-business relation. The protection afforded by the CJEU to the assignee seems unwarranted in light of the purpose of unfair terms control, which is targeted to consumers. The second part of the ruling will further weaken the binding force of jurisdiction clauses in B2B relations.

The latest edition (October 2020) of the Thessaloniki Bar Review (Armenopoulos) includes a section devoted to the application of the Rome I Regulation in Greece. The judgments reported examined issues regarding the law applicable to insurance and sales contracts, as well as a post-contract choice of law relating to multiple sales contracts.

Applicable Law in Insurance Contracts

In a lawsuit against a UK insurance company concerning a claim for compensation arising out of a freight insurance contract signed in 2014, the Thessaloniki Court of Appeal (judgment No 770/2019) resorted to Article 25 of the Greek Civil Code, i.e. the domestic conflict-of-laws provision for contractual obligations, and stated that the 1980 Rome Convention was not applicable to the case pursuant to Article 1(3) thereof (‘The rules of this Convention do not apply to contracts of insurance which cover risks situated in the territories of the Member States of the European Economic Community. In order to determine whether a risk is situated in those territories the court shall apply its internal law’). No reference was made to the Rome I Regulation.

The Court noted that the insurance contract expressly referred to the law to which the parties had submitted their contractual relationship and concluded that the dispute was governed by the English Maritime Insurance Act, common law and English practice (Institute Cargo Clauses) for boat insurance.

The court failed to examine the matter in accordance with the proper law, which was Article 7 of the Rome I Regulation, read in light of Article 1(2)(j).

Applicable Law to a Contract for the Sales of Goods

In a lawsuit brought by a Greek company against a Liberian company in connection with a contract for the sale of marine fuel between by the former and the latter, represented by its Greek agent, the Court of Appeal of Piraeus (ruling No 276/2019) applied Greek law to the sales contract on the ground that no choice had been made by the parties, and that the seller had its habitual residence in Greece. With respect to the representation of the defendant company for the purposes of the conclusion of the contract, the Court observed that the agency is excluded from the scope of Rome I Regulation. The Court relied on Greek conflict-of-laws rules to state that Greek law applied to agency, this being the law of the state where the agent had acted. 

Applicable Law in Multiple Sales Contracts

In proceedings brought by a Greek company against a company registered in the Marshall Islands, the Piraeus Court of first instance (ruling No 5326/2018) applied Greek law to a series of connected sales contracts, pursuant to Article 4(1) and (4) of the Rome I Regulation. The former was self-explanatory (seat of the seller in Greece), and the latter was founded on the fact that the contract was signed at the seller’s registered office. Finally, the court mentioned an additional reason for applying domestic law: It stated that a tacit post-contractual determination of applicable law may be deduced by the defendant’s default of appearance.

The fourth issue of the Journal du droit international for 2020 includes only one article on a topic of private international law.

It is authored by Jean-Charles Jaïs, Claudia Cavicchioli and Anne de Mazières (Linklaters Paris) and discusses the important topic of the law governing the confidentiality of international correspondence between attorneys and in-house counsels (La confidentialité des correspondances internationales des avocats et juristes en entreprise – la question du droit applicable).

The English abstract reads:

The rules applicable to the confidentiality of correspondence of lawyers and in-house counsel vary significantly from one country to the other. A French judge seized of an international dispute will thus have to confront these varying rules and determine which, amongst the competing norms, should be applied to the confidentiality of the correspondence at issue. The present article looks at the method which the seized judge should implement to determine the applicable law, and offers a reflexion on potential connecting factors. The solutions proposed differ according to whether one looks at correspondence exchanged between lawyers, between a lawyer and his/her client, or between an in-house counsel and his/her “internal client”.

The issue also includes several case notes of cases which address private international law questions. The full table of contents can be found here.

I attended recently a discussion among scholars about the notion of periculum in mora for the purposes of Article 7 of the Regulation 655/2014. In this context, attention was drawn to the decision of the Tribunal da Relação de Guimarães of 10 September 2020, which held (among other) that

IV. The preservation order requires proof of the requirements for the adoption of preventive measures: urgency, “fumus boni iuris” and “periculum in mora”.

V. The mere impossibility of collecting the claim, namely in an enforcement action instituted for that purpose, without being associated with any other element, is not enough to demonstrate the periculum in mora.

Looking at the text of the Regulation, the Portuguese court can hardly be criticised. According to Article 7(1),

The court shall issue the Preservation Order when the creditor has submitted sufficient evidence to satisfy the court that there is an urgent need for a protective measure in the form of a Preservation Order because there is a real risk that, without such a measure, the subsequent enforcement of the creditor’s claim against the debtor will be impeded or made substantially more difficult.

The provision shall be read together with Recital 14:

The conditions for issuing the Preservation Order should strike an appropriate balance between the interest of the creditor in obtaining an Order and the interest of the debtor in preventing abuse of the Order.

Consequently, when the creditor applies for a Preservation Order prior to obtaining a judgment, the court with which the application is lodged should have to be satisfied on the basis of the evidence submitted by the creditor that the creditor is likely to succeed on the substance of his claim against the debtor.

Furthermore, the creditor should be required in all situations, including when he has already obtained a judgment, to demonstrate to the satisfaction of the court that his claim is in urgent need of judicial protection and that, without the Order, the enforcement of the existing or a future judgment may be impeded or made substantially more difficult because there is a real risk that, by the time the creditor is able to have the existing or a future judgment enforced, the debtor may have dissipated, concealed or destroyed his assets or have disposed of them under value, to an unusual extent or through unusual action.

The court should assess the evidence submitted by the creditor to support the existence of such a risk. This could relate, for instance, to the debtor’s conduct in respect of the creditor’s claim or in a previous dispute between the parties, to the debtor’s credit history, to the nature of the debtor’s assets and to any recent action taken by the debtor with regard to his assets. In assessing the evidence, the court may consider that withdrawals from accounts and instances of expenditure by the debtor to sustain the normal course of his business or recurrent family expenses are not, in themselves, unusual. The mere non-payment or contesting of the claim or the mere fact that the debtor has more than one creditor should not, in themselves, be considered sufficient evidence to justify the issuing of an Order. Nor should the mere fact that the financial circumstances of the debtor are poor or deteriorating, in itself, constitute a sufficient ground for the issuing of an Order. However, the court may take these factors into account in the overall assessment of the existence of the risk.

It should be noted, though – and it has been highlighted in the abovementioned exchange of views – that the national court actually makes a very restrictive interpretation of the periculum in mora, even when a judgment has already been delivered favoring the creditor. It is not enough that the enforcement cannot be carried out in Portugal due to lack of assets there; nor that the debtor resides in another country (Spain, in the case at hand). The creditor has to prove that there is an intention on the part of the debtor to dissipate his assets, and the link between such intention and the risk of not recovering the moneys.

The ‘subjective’ element seems to be a feature common to other Member States’ interpretation of Article 7 (such as Lithuania or Germany – see LG Bremen, ruling of 7 January 2020 – 3 O 2166/19), but not to all (Spain being, for instance, one with a much more lenient understanding of the requirement: apparently, the mere impossibility of enforcement in Spain suffices for the judicial clerk, who is the one in charge at this stage, to grant the order). Moreover, and somehow funnily, the Portuguese court reaches its conclusion arguing on the basis of the similarities between the provision of the Regulation, and Article 391 of the national Code of Civil Procedure. The trend appears to be shared by other Member States, like, again, Germany and Lithuania.

In the light of the foregoing, a request for interpretation to the CJUE would not be a surprise. Unfortunately, it will hardly address any longer the policy issue of whether it makes sense to subject the cross-border preservation order to the periculum in mora requirement in spite of having obtained a decision  (see against B. Hess, ‘Article 7 Regulation 655/2014’, in Scholsser/Hess, Europäisches Zivilprozessrecht, 5th ed., para 2, forthcoming).

NoA: Note that urgency is not mentioned under Article 35 of the Brussels I bis regulation, and that measures which, because they are urgent, are ordered without the defendant being summoned to appear, are not to be recognised and enforced under the Regulation unless the judgment containing the measure is served on the defendant prior to enforcement.

Many thanks to Carlos Santaló (MPI Luxembourg) for the information on the topic as well as feedback.

The first post of the EAPIL blog was published one year ago, on 25 November 2019. More than 300 posts have followed since, written by the blog’s editors and by no less than twenty guests.

We are trying to make the blog richer in contents, and improve its visibility.

Various private international law specialists across Europe and beyond have offered to prepare guest posts for publication in the coming days or weeks. We are eager to read their contributions and share them with our readers.

In the meanwhile, we are working to make the blog – and the Association, generally – more active on social media.

Marco Pasqua, an Associate Member of the Association, with a special interest in collective redress and the liability of corporate groups for violation of EU competition law, has kindly accepted to serve as the Association’s social media manager. Thanks a lot, Marco!

So, join us also on Twitter (@eapilorg) and Linkedin!

Planning to become a member of EAPIL, and join the 255 scholars and practitioners who have already done so? We are glad to provide you with one more reason to submit your application before the end of the year!

While, as a general rule, fees are due for each calendar year, those applying for membership in December 2020 will not be required to pay any fees for 2020. The first fees due by such new members will be the fees due for 2021.

See here for information on the benefits you would be entitled to as a member, as well as on the types of membership offered and the admission process.

Once you are ready to apply for membership, just fill in the form you find here!

The 2020 Annual Conference of the French Association for European Studies (AFEE) will focus on Family within the Legal Order of the European Union, based on a collective research led by academics and practitioners from different EU countries, which resulted in a book edited by Elsa Bernard (University of Lille), Marie Cresp (University of Bordeaux) and Marion Ho-Dac (University of Valenciennes), to be published soon by Bruylant.

This year’s conference will take place on 11 December 2020, in the form of a Zoom webinar, from 11.45 to 14.30 MET, with the participation of the book’s authors and other speakers. It will be preceded, starting on 7 December 2020, by the posting of a series of short videos devoted to the contributions in the book.

Attendance is free, but those interesting in attending are required to register by 9 December 2020, by sending and e-mail to aline.dherbet@univ-lille.fr.

Family law, with its civil law tradition, and strong roots in the national cultures of the Member States, does not normally fall within the scope of European law. However, it is no longer possible to argue that family law is outside European law entirely. There are many aspects of the family which are subject to European influence, to the point that the outlines of a «European family» are starting to emerge. This book is intended to highlight the European experience of family law as well as its substantive (i.e. European citizenship, EU social policy, EU civil service…) and private international law aspects. Union law therefore contains a form of «special» family law which is shared between the Member States and supplements their national family laws. Its theoretical and political importance in the Union, as well as its future, are discussed by the authors. Far from remaining fragmented alongside the national laws of Member States, it will likely develop to offer European citizens and residents a common family law within the EU.

Contributors include: Katharina Boele-Woelki, Marlene Brosch, Christelle Chalas, Kiteri Garcia, Susanne Lilian Gössl, Loïc Grard, Víctor Luis Gutiérrez Castillo, Anastasia Iliopoulou-Penot, Beata Jurik, Hester Kroeze, Laure Lévi, Cristina M. Mariottini, Martina Melcher, Benjamin Moron-Puech, Marion Nadaud, Nicolas Nord, Cyril Nourissat, Ludovic Pailler, Nausica Palazzo, Amélie Panet-Marre, Etienne Pataut, Delphine Porcheron, Isabelle Rein Lescastereyeres, Sophie Robin-Olivier, Mathieu Rouy, Sandrine Sana Chaillé de Néré, Solange Ségala, Gaëlle Widiez et Geoffrey Willems.

Guillaume Payan (University of Toulon, France) is the editor of a new book offering commentaries of the most important of the judgments delivered by the Court of Justice of the European Union in the field of European civil procedure (Espace judiciaire européen – Arrêts de la CJUE et commentaires).

The author has provided the following abstract:

For twenty years, European directives and regulations have been multiplied in the field of the European judicial area in civil matters (Treaty on the Functioning of the European Union, art. 81). Their implementation in the various member states of the European Union is the source of significant litigation. In order to settle the disputes submitted to them, national Courts frequently request the Court of Justice of the European Union, submitting a request for a preliminary ruling on interpretation.

Knowledge of preliminary ruling is essential for a good understanding of European Union legislation, it being understood that the terms used therein are interpreted independently, by referring mainly to the objectives and scheme of European regulation and directive concerned, in order to ensure the uniform application.

The book “European civil judicial area: judgments of CJEU and comments” contains analyzes of more than 300 judgments of the Court of Justice.

In this book, the judgments of the Court of Justice of the European Union – and the older ones of the Court of Justice of the European Communities – are not arranged in chronological order, as is traditionally the case. However, their presentation follows the structure of the directives and regulations adopted in the field of the European Civil Judicial Area.

However, in the same case, the Court of Justice may have to interpret several provisions appearing in the same European legislative instrument or in separate European legislative instruments. As a result, some judgments appear at different places in the book. In such a case, each analysis is focused on a precise aspect of the solution adopted and references are made to the other comments relating to these judgments.

This choice pursues the objective of facilitating the identification of the correct meaning of the concepts which punctuate the European Union legislation developed in the field of judicial cooperation in civil matters. In the same perspective, in each analysis, the extracts from the judgments – and the conclusions of the Advocates General relating to them – appear in italics. In addition, the comments are preceded by the reproduction of the relevant extract from the judgment studied. This extract corresponds to all or part of its ruling. In addition, the list of judgments analyzed is reproduced at the end of the book in an alphabetical table of case law.

This work was written under the direction of Guillaume Payan (University of Toulon, France) and includes a foreword of Professor Hélène Gaudemet-Tallon. The contributors to the books are I. Barrière-Brousse, J. Bauchy, A. Berthe, V. Egéa, E. Guinchard, L.-C. Henry, M. Ho-Dac, F. Jault-Seseke, N. Joubert, M.-C. Lasserre, F. Mailhé, S. Menetrey, P. Nabet, P. Oudot, G. Payan, F. Reille.

More details can be found here, including the table of contents of the book which is available here.

Guillaume Payan (University of Toulon, France) is the editor of a new book offering commentaries of the most important of the judgments delivered by the Court of Justice of the European Union in the field of European civil procedure (Espace judiciaire européen – Arrêts de la CJUE et commentaires).

The author has provided the following abstract:

For twenty years, European directives and regulations have been multiplied in the field of the European judicial area in civil matters (Treaty on the Functioning of the European Union, art. 81). Their implementation in the various member states of the European Union is the source of significant litigation. In order to settle the disputes submitted to them, national Courts frequently request the Court of Justice of the European Union, submitting a request for a preliminary ruling on interpretation.

Knowledge of preliminary ruling is essential for a good understanding of European Union legislation, it being understood that the terms used therein are interpreted independently, by referring mainly to the objectives and scheme of European regulation and directive concerned, in order to ensure the uniform application.

The book “European civil judicial area: judgments of CJEU and comments” contains analyzes of more than 300 judgments of the Court of Justice.

In this book, the judgments of the Court of Justice of the European Union – and the older ones of the Court of Justice of the European Communities – are not arranged in chronological order, as is traditionally the case. However, their presentation follows the structure of the directives and regulations adopted in the field of the European Civil Judicial Area.

However, in the same case, the Court of Justice may have to interpret several provisions appearing in the same European legislative instrument or in separate European legislative instruments. As a result, some judgments appear at different places in the book. In such a case, each analysis is focused on a precise aspect of the solution adopted and references are made to the other comments relating to these judgments.

This choice pursues the objective of facilitating the identification of the correct meaning of the concepts which punctuate the European Union legislation developed in the field of judicial cooperation in civil matters. In the same perspective, in each analysis, the extracts from the judgments – and the conclusions of the Advocates General relating to them – appear in italics. In addition, the comments are preceded by the reproduction of the relevant extract from the judgment studied. This extract corresponds to all or part of its ruling. In addition, the list of judgments analyzed is reproduced at the end of the book in an alphabetical table of case law.

This work was written under the direction of Guillaume Payan (University of Toulon, France) and includes a foreword of Professor Hélène Gaudemet-Tallon. The contributors to the books are I. Barrière-Brousse, J. Bauchy, A. Berthe, V. Egéa, E. Guinchard, L.-C. Henry, M. Ho-Dac, F. Jault-Seseke, N. Joubert, M.-C. Lasserre, F. Mailhé, S. Menetrey, P. Nabet, P. Oudot, G. Payan, F. Reille.

More details can be found here, including the table of contents of the book which is available here.

The author of this post is Prof Dr Dan Jerker B. Svantesson, Professor at the Faculty of Law, Bond University (Australia), Visiting Professor at Masaryk University (Czech Republic) and Associated Researcher at the Swedish Law & Informatics Research Institute, Stockholm University (Sweden).

On 6 December 2020, I had the great honour of giving a presentation at the Royal Netherlands Society of International Law’s Annual General Meeting. The topic I had been invited to address was the questions of whether (public and private) international law is ready for the, already ongoing, digital age. In essence, I made six observations:

1. Examples can be found of the online environment undermining the proper functioning of public and private international law structures;
2. As structured and applied online today, public and private international law creates a situation of ‘hyperregulation’;
3. The complexity of international law stems in part from the fact that the frameworks and concepts applied were developed in other eras and under other conditions resulting in them being insufficient to address the issues with which we are confronted now at the beginning of the 21st century;
4. The international law community must do more to engage with, and prioritise, Internet-related legal issues, and must seek to increase the profile of public and private international law in the Internet regulation community;
5. Examples can already be found of, more or less, self-regulatory Internet-related ADR schemes that effectively exclude international law altogether (see here). We must recognise that, with a proliferation of such schemes, the role and influence of international law decreases; and
6. The international law community ought to do more to engage with large, forward-looking, questions such as how AI may support, and indeed reform, how we work with international law (see further here). In this context, we must be brave enough to be willing to reconsider also the most entrenched notions.

I am happy to have the opportunity to summarise some of my arguments here. Focus will be placed on the first four of the topics outlined above.

The Online Environment Undermining the Proper Functioning of Public and Private International Law Structures

There is a long-standing recognition of a tension between the largely borderless Internet and the border-focused law. However, here I want to point to a more specific (and recent) illustration of how the online environment challenges the proper functioning of private international law.

Ordinarily, the need for recognition and enforcement works to counter the impact of excessive foreign claims of jurisdiction that are contrary to a country’s public policy. However, the protection and equalising effect normally provided by the need for recognition and enforcement has been severely undermined by courts claim a broad ‘scope of jurisdiction’ (see also here) or ‘scope of remedial jurisdiction’ as preferred by the Court of Appeal for British Columbia (see here).

Scope of jurisdiction relates to the appropriate geographical scope of orders rendered by a court that has personal jurisdiction and subject matter jurisdiction. This question has gained far less attention to date than the other two types of jurisdiction. Yet, to understand its significance we need only consider the fact that, any time a court orders an Internet actor to block, delist, deindex, de-reference, delete, remove, or takedown content, it will need to consider whether to grant that order only in relation to publications in the state where the court sits, or to extend the order more widely – perhaps even globally. Thus, it is unsurprising that scope of jurisdiction has emerged as one of the most hotly contested ‘battle ground’ in the intersection between international law and the Internet.

In a situation where a court claims worldwide scope of jurisdiction in the context of an order against a major Internet platform, and that platform complies with the order, there simply is no need for recognition and enforcement – the worldwide impact is automatic.

Imagine, for example, that a Dutch citizen in the Netherlands posts something on a US social media site. The posting, while perfectly legal in both the Netherlands and in the US, is seen to be offensive to the Communist Party of China and a Chinese court or authority orders its removal. If the US social media company complies, the removal is effective worldwide without the need for any enforcement action in neither the Netherlands nor in the US. In fact, the laws and legal systems – including the public policies – of these countries do then not feature in the equation at all.

The threats to free speech posed by this scenario are beyond intelligent dispute. However, things get much worse when we consider that the CJEU’s recently adopted approach means that Internet platforms are not only subject to orders to remove posted content, but also to block – potentially with worldwide effect – future content that is ‘equivalent’ to the content removed (see further here and here).

Applying this to the China-related example above, we are heading towards a situation in which e.g. Chinese law may stifle regime critics from other countries to the degree that their postings, while lawful where the person resides, are censored by non-Chinese Internet platforms. In such a situation, the private international law of the state in which the person or the platform are based, has no influence. Further, it is doubtful that public international law as it stands provides sufficient protection, at least if the interpretation of the relevant rules of public international law are left to the country wishing to effect the censorship as suggested by the CJEU.

As Structured and Applied Online Today, (Public and) Private International Law Creates a Situation of ‘Hyperregulation’

The only reason law does not make impossible the operation of the Internet is found in the combined effect of, on the one hand, self-imposed state restraint in not applying their laws as widely as they could and, on the other hand, more pragmatically, enforcement difficulties. Worryingly, it seems to me that the latter of these factors plays a considerably larger role than does the former.

To see the extent of the challenge, we need only consider the number of countries’ laws that may apply to something as mundane as an unflattering social media post about another person. The person making the posting may have to take account of the law of the country she is in at the time of making the posting, the law of the country in which she is habitually residing (and/or has domicile) and, if different, the law(s) of her country of citizenship(s). Then she will probably also need to consider US law as most major social media platforms are based in the US (although there is also a considerable uptake in social media – such as the Chinese platform TikTok – from other parts of the world). We are here already confronted by a few, potentially very different, legal systems providing laws with which the person making the posting is meant to comply.

Given that our hypothetical posting relates to another person, we may also need to consider the laws of that person’s location, residence, domicile and citizenship(s). And we may also need to consider the laws of any additional countries in which that person has a reputation to protect.

Furthermore, under the law of many, not to say most, countries focus may be placed on where content is downloaded or read; two distinct, but often conflated, activities. Thus, the person making the posting will also need to comply with the laws of all the countries in which her ‘friends’ or ‘connections’ are found; and less predictably, the laws of all the countries in which they may be located when reading her posting. It goes without saying that, the number of additional legal systems to be considered grows with the number, and geographical diversity, of her friends or connections, and in light of the mobility of people, may never be fully ascertained at the time of posting.

As if the complexity alluded to so far was not enough, things get even messier when we confront the liability that may stem from re-publications; that is, to map out the full extent of potentially applicable laws, we must also take account of the laws of all the countries in which re-posted versions of the original posting may be downloaded or read. Here the original poster obviously loses all possibilities of predicting the scope of laws to which she may be exposed.

Finally, content placed on social media platforms is often stored in ‘the cloud’, and while we as users may not necessarily be able to find out where our content is located, we may be legally obligated to consider the laws of the country in which it is stored.

This legal situation, of extraordinary complexity, is what billions of social media users face on a daily basis. For the absolute majority, their postings will not lead to any legal drama. However, the thought of being exposed to potential legal liability in a large number of countries should be a concern to anyone. And of course, the very idea that you strictly speaking should inform yourself of all those laws you are meant to follow is daunting indeed.

Elsewhere (see here), I have described this as a situation of ‘hyperregulation’ characterised by the following conditions:

1. the complexity of a party’s contextual legal system (i.e., the combination of all laws that purport to apply to that party in a given context) amounts to an insurmountable obstacle to legal compliance; and
2. the prospect of legal enforcement of (at least parts of) the laws that make up the contextual legal system is more than a theoretical possibility.

The Complexity of International Law Frameworks and Concepts

In the context of applying international law to Internet activities or situations there are numerous instances of competing legitimate interests; State A’s protection of free speech may be difficult to reconcile with State B’s restrictions on hate speech, and so on. On a slightly more general level, we may observe that broad claims of jurisdiction may unreasonably interfere with the rights of people in other States, while restrictive approaches to jurisdiction may render a victim without realistic access to justice. Thus, the difficulties we experience in applying international law to the Internet stem from the fact that the ‘genuine regulatory challenges’ we need to work with are both numerous and go to the depth of involving the most fundamental legal notions. Yet this does not fully explain the complexity of our situation.

The application online of the pre-Internet legal concepts that make up public, and private, international law often involves decisions on the appropriate analogies and metaphors. As I have been arguing for the past 15 years, we must try to avoid inappropriate reliance on metaphors and analogies (see here).

In the survey that formed the base for the Internet & Jurisdiction Global Status Report 2019, several interviewed experts emphasised the concern that, in the jurisdiction field, legal concepts are old fashioned and outdated. Furthermore, one of the survey questions posed the claim that we already apply the right legal concepts to address cross-border legal challenges on the Internet. Among the surveyed experts, 46% either disagreed or strongly disagreed, 36% indicated that they neither agreed nor disagreed, and only 18% either agreed or strongly agreed.

This, it is submitted, hints at what may be termed ‘artificial (i.e. manmade) regulatory challenges’ in that the frameworks and concepts being applied are insufficient to address the issues with which we are confronted. In general, it seems that international lawyers are looking at all changes taking place in today’s world through the lenses of vested concepts such as extraterritoriality, sovereignty etc. They want the world to be guided by reference to these concepts. Yet it should perhaps be the other way round – the concepts we use should be guided by how the world in fact is. While we of course ought to make use of those concepts that truly remain useful, we must also be prepared to develop new concepts if reality so requires. In other words, the inadequacy of the tools may cause regulatory challenges preventing, or at least limiting, progress.

It seems to me that the Internet jurisdiction debate these days is focused on tackling the most imminent day-to-day issues (some of the ‘genuine regulatory challenges’), at the expense of attention being directed at the underlying conceptual mess (the ‘artificial regulatory challenges’). This is of course natural given the very real impact these challenges have for society. However, real progress can only be made where we also tackle the ‘artificial regulatory challenges’.

Examples of proposals I have advanced to address these artificial regulatory challenges include:

1. A new jurisprudential framework for the concept of jurisdiction (see here);
2. The categorisation of types of jurisdiction under public international law, introducing the concept of ‘investigative jurisdiction’ (see here);
3. The introduction of the concept of ‘scope of jurisdiction’ (discussed above); and
4. A clarification of the status of ‘sovereignty’ (see here).

The International Law Community and the Internet

In 2019, online retailer Amazon surpassed Walmart to become the world’s largest retailer, and tech companies feature prominently on lists ranking the world’s most powerful companies. The world’s most populous states – China and India – have an estimated 1.39 and 1.35 billion citizens respectively; but Facebook has a ‘population’ of 2.45 billion active users. Thus, a rule introduced in the laws of China directly affects just over half as many people as does a rule introduced in Facebook’s Terms of Service!

In addition, there is a clear ongoing trend of borders between the online data-driven world and the physical world are eroding. In the Internet of Things (IoT) era, however, the speed with which these borders erode is increasing dramatically, with effects for all aspects of society. Put simply, the offline world is no longer offline.

To all this may be added the changes in the world due to the, at the time of writing, ongoing pandemic. With large parts of the physical world currently in lockdown, it may be said that the online world is now working better than does its offline counterpart.

Our currently increased reliance on online at the expense of the offline may well affect behaviour patterns long-term, meaning that we will continue to live an even greater segment of our lives online in the future also after the world has overcome the pandemic. This is an aspect of a broader phenomenon that may be termed ‘COVID-19 driven trend acceleration’; that is, already existing trends are significantly accelerated due to the COVID-19 pandemic and how society adjusts to it.

The message stemming from the above is clear, loud and beyond intelligent dispute – cross-border Internet-related legal issues are central matters in society and need to be treated as such also private and public international law.

Yet, law in general, but public and private international law in particular, treats Internet issues as an exotic side dish to the main course taken for granted as being the offline – physical – world. Anyone doubting this claim need only take a glance at the tables of content of textbooks and journals in those respective fields: Internet issues do feature but typically only to a very limited, subsidiary, extent. Approaching Internet-related legal issues in this manner is unsustainable in today’s world where cyber is such a big part of our lives.

Thus, it seems to me that an important task that remains to be completed is to recalibrate the debate from one of a clash between (international) law and the Internet, to one focused on how international law can better help facilitate a desirable online environment.

Final Remarks

As it turns out, the Internet is not a fad after all. It is not just here to stay; it is here to dominate our lives. Looking at news reports, and indeed society in general, this is obvious. Yet looking at legal literature in general, and international law in particular, it is not adequately reflected. This is unsustainable and those who take pride in proclaiming that they do not deal with Internet issues are escapists at risk of irrelevance. What is worse, much could have been achieved to create better Internet regulation – and ultimately a better world – had more experts from non-technology fields been more willing to engage with these novel legal issues as they became apparent. I hope the 2020 Royal Netherlands Society of International Law’s debate on a current issue in the domain of international law can help create real awareness and greater discussions of these issues, at least for the Netherlands – a longstanding leader in progressive, constructive, and creative thinking in international law – but hopefully more broadly.

But as noted by Juenger: “[T]urmoil is bound to happen whenever old principles clash with new realities” (see here), and in few other areas has this so clearly proven to be the case as it has when applying private and public international law principles to the online environment. Much remains to be done to improve the relationship between international law and the Internet, and the tasks that lie ahead – tasks for us all – are huge indeed. But they are neither unsurmountable, nor are they optional.

The topic of international commercial courts or chambers was a trendy one a couple of years ago. It has been dropped to a large extent in academia – although, if I am not wrong, it will come up again in the form of a course at The Hague Academy in the next future. It remains important in practice.

On 1 November 2020, two Commercial Courts were inaugurated in Baden-Württemberg: one in Stuttgart, the other one in Mannheim. A dedicated website in German, English and French, provides information about their main features which, to the extent it is possible under German law, are cut to fit the specificities of cross-border disputes in the following commercial matters: disputes in connection with the acquisition of companies or shares of companies (both courts); disputes resulting from mutual commercial transactions with a value in dispute of at least € 2 million (both courts); corporate disputes (both courts); and disputes resulting from bank and financial transactions (Mannheim).

The website has definitely been designed with care and with the purpose to attract litigants; it may therefore be looked at as an example to be followed in other Länder. Hessen, where a Chamber for International Commercial Disputes at the Landgericht Frankfurt am Main was established already in 2018, opted for a much more sober model: no pictures, no colours, no links, most basic information in one sheet in German and English; possibly not the best-selling strategy. The same applies to Hamburg. This being said, relevant information is still lacking in the Baden-Wüttemberg site in comparison, for instance, with the NCC in Amsterdam.

Among the interesting features of the new courts, I would like to highlight that they are staffed with German judges: the system would not allow hiring foreigners as it happens in other courts for international commercial litigation, such as the DIFC Courts. However, all the judges in the Stuttgart and Mannheim commercial courts have been appointed in light of their expertise in commercial matters, and because (so the website) they will be able to conduct the proceedings in English if the litigants choose the option. Their academic background, former positions, command of a foreign language, excerpts of their cv regarding academic publications, as well as their age, have been made public on the website: a novelty in Germany, by all means. It is worth noticing that not all other international commercial courts provide information regarding their judges. A curiosity: those who make it include even personal data like whether married or not, and number of children; difficult not to wonder why.

On the language of the proceedings, in spite of the reference to a choice of English by the parties I am not sure it is possible to have the whole process, nor the decision, in English. In any event, documents in English can be used so that it is not necessary to obtain extensive translations of contractual documents or engage the services of interpreters.

It looks as if the new courts are better suited than the average German ones (at least, in pre-covid19 times) regarding the IT equipment in the courtrooms and the support staff: ‘Hearings can be held using state-of-the-art technology in both Stuttgart and Mannheim. The technical equipment includes modern video-conference technology and the latest presentation technology’.

On the conduct of the proceedings, the commercial courts of Bade-Württemberg will follow the common rules, but are willing to reinvent already existing faculties under German procedural law: regarding the length of the proceedings, it is acknowledged that speedy determination is of the essence, therefore a ‘case management conference’ is possible in order to structure the later stages of the proceedings. In addition, the parties may agree to limit the opportunities to file appeals by a mutual agreement not to seek legal remedies, even at the start of the proceedings; in this way, the dispute is to be decided quickly and conclusively in just one court. This possibility is highlighted in the website together with other features bringing to mind immediately the traditional disadvantages of arbitration: easy involvement of third parties, effective coercive measures and efficient enforcement. As it happens, the comparison is even explicit at some point: ‘Additionally, unlike arbitration tribunals, the courts can administer oaths or declarations in lieu of an oath’. In a similar vein, the indication to the court fees being moderate and capped when the value in dispute reaches € 30 million can be read as an indirect hint to the expensive costs of litigation in other countries (EU and non EU) with similar judicial bodies.

Should the parties not agree on excluding appeals, specialised appeal panels have been set up at the Stuttgart and Karlsruhe Higher Regional Courts, which are responsible for appeals and complaints against the decisions of the Stuttgart and Mannheim Chambers and also offer comparable advantages.

Finally, the Baden-Württemberg commercial court’s website refers to relevant systemic features of the German judiciary and legal system, in particular to compliance with the rule of law, the impartiality and independence of the judges: an added value not to be taken for granted any longer (let me refer you to this shocking, but also saddening editorial in Verfassungsblog).

NoA: Because of the federal order of the Federal Republic of Germany, the court system is also structured federally. Jurisdiction is exercised by federal courts and by the courts of the 16 federal states (Länder). The main workload of the administration of justice lies with the Länder. The decision to have specialized chambers or divisions devoted to cross-border commercial litigation lies with the Ministry of the respective Land.

As announced earlier on this blog, EAPIL will hold its first Virtual Seminar on 11 December 2020, from 11 a.m. to 1 p.m. (MET).

Devoted to the impact of Brexit on Private International Law, the seminar will feature speakers from the United Kingdom and the European Continent.

They will analyze the legal framework that will apply to cross-border cases in the short-term, i.e. as of 1 January 2021 when the transition period provided for in the Withdrawal Agreement expires. Speakers will also discuss what the future relationship between the EU and the UK could and should look like.

Special emphasis will be placed on the question of whether the EU and the UK should strive to adopt a new – bespoke – bilateral agreement (or whether it should simply join existing international conventions).

The speakers of the first session, on civil and commercial matters, will be Alexander Layton (Twenty Essex Street Chambers, London), Eva Lein (University of Lausanne) and Michiel Poesen (KU Leuven).

In the second session, Sir Andrew Moylan (Court of Appeal of England and Wales), Pietro Franzina (Catholic University of the Sacred Heart, Milan) and Anatol Dutta (Ludwig Maximilian University Munich), will focus, instead, on family matters.

Register here if you wish to discuss with us. Registered participants will receive the details to join the seminar on 10 December 2020.

On 23 November 2020, at 9 am MET, the Université Côte d’Azur will host, via Zoom, the final conference of the EU co-funded research project called En2Bria – Enhancing Enforcement under Brussels Ia.

The topics addressed include: transport matters and Article 67 of the Brussels I bis Regulation (Rosario Espinosa Calabuig); Article 67 of the Brussels I bis Regulation and Directives in special matters (Laura Carpaneto); GDPR, International Treaties Concluded by the EU, and “Optional Regulations” (Stefano Dominelli); Connections, disconnections and fragmentation in international civil procedure (Paula-Carmel Ettori, Jessica Sanchez and Chirouette Elmasry).

The full programme, together with further details, can be found here.

Attendance is free. Those interested may write to Giulio Cesare Giorgini at giulio-cesare.giorgini@univ-cotedazur.fr to obtain a link to access the platform.

The fourth online public workshop on Private International Law after Brexit from global, European, Commonwealth and intra-UK perspectives, organised by Paul Beaumont (University of Stirling), Mihail Danov (University of Exeter) and Jayne Holliday (University of Stirling), will be held on 26 and 27 November 2020.

Speakers include Reid Mortensen (University of South Queensland), Mihail Danov, Susanne Goessl, Ruth Lamont (University of Manchester), Fausto Pocar (University of Milan), Jonathan Harris QC (King’s College London), Lord Mance (former UK Supreme Court Judge), Ardavan Arzandeh (University of Bristol), Giuditta Cordero-Moss, and Paul Beaumont.

The following topics, among others, will be discussed: The opportunities of Brexit for the development of Private International Law in the Commonwealth; Connecting factors in Private International Law – A global perspective; Pluses and minuses of the UK being a party to the Lugano Convention after Brexit; Resolving Conflicts of Jurisdiction after Brexit at a global level; The Hague Adults Convention 2000 and the role of the UK and the EU in the Hague Conference after Brexit; Private International Law of Arbitration – A global perspective and the impact of Brexit on arbitration in the UK.

Further information available here.

The Multiple Uses of the Unidroit Principles of International Commercial Contracts: Theory and Practice is the title of a book edited by Pietro Galizzi, Giacomo Rojas Elgueta and Anna Veneziano, which has just been published by Giuffrè.

The publication of this Volume comes at a time when Governments are still struggling to get ahead of the COVID-19 pandemic and firms are still figuring out what will be the economic impact of the coronavirus outbreak and how to adjust to changing business conditions. In this evolving scenario, the UNIDROIT Principles of International Commercial Contracts («UPICC»), being the only global instrument offering a set of comprehensive general rules applicable to different types of commercial contracts, represent an ideal answer to the impact of the pandemic on the performance of contractual obligations. While the essays of this Volume have been written before the coronavirus outbreak and do not specifically address the application of the UPICC to the contractual disruption caused by the pandemic, they are extremely timely, offering an in-depth analysis of (i) the different ways in which the UPICC can be used in practice, (ii) how the UPICC regulate (and can help preserve) long-term contracts, (iii) how, in practice, in-house counsel of multinational companies avail themselves of the UPICC (particularly using them as an instrument for negotiating, drafting, interpreting and supplementing commercial contracts). The idea behind this Volume (which includes among its Authors scholars, practitioners and in-house counsel) is to strengthen the bridge between the theory and practice of the UPICC and to favor a greater diffusion of their knowledge among the business community.

The table of contents can be found here. See here for more information.

The European Order for Payment (EOP, Regulation (EC) No 1896/2006), the European Small Claims Procedure (ESCP, Regulation (EC) No 861/2007) and the European Account Preservation Order (EAPO, Regulation (EU) No 655/2014) applied for several years in Romania without any specific implementation legislation being adopted to coordinate their interaction with the national procedural rules.

As generally regulations do not require any specific additional legislative action from the Member States to be applied at national level, Romanian authorities relied on the principle of direct application of the three instruments. However, the referral to national procedural rules in several articles of the regulations (e.g. existence of an appeal mechanisms, costs of proceedings, assistance) as well as reliance on national rules when no specific provisions are contained in the European legislation (Article 26 EOP, Article 19 ESCP, and Article 46 EAPO) can create disparities and give rise to variations in the application of these instruments even within one Member State.

Recently, this direct application approach changed. In December 2019 the Romanian Government and, subsequently, the Parliament initiated acts to amend national laws. These legislative amendments were aimed at facilitating the application of these regulations and clarifying particular procedural aspects in order to ease judicial cooperation between Member States for the EOP, ESCP, and EAPO procedures. The new national rules dedicated to the EOP, ESCP, and EAPO focus mainly on issues of jurisdiction of Romanian courts, identifying the national authorities involved in the application of the Regulations, and establishing the applicable procedural fees.

EAPO: A Guided Implementation Process to Avoid an Infringement Procedure

The amendment of national legislation regarding the EAPO has been triggered by the initiation of an infringement procedure by the European Commission. A letter of formal notice (letter C(2019) 6729 final) was sent to the Romanian authorities in 2019 – more than two years since the regulation became applicable – because the Government failed to communicate relevant information for the application of the regulation as required by Article 50 EAPO Regulation.

Following this formal notice, the Romanian Government acted expediently to avoid a possible referral to the Court of Justice of the European Union in an infringement procedure. The Government’s Note proposing the legislative amendment as well as in the Statement of Reasons for the law approving the Government Emergency Ordinance containing implementation provisions refer to this risk as well as that of hefty fines for the national budget due to non-compliance with EU law. Based on these reasons the Government moved quickly in December 2019 to adopt an Emergency Ordinance – Ordonaţa de urgenţă nr. 75 din 13 decembrie 2019 pentru completarea Ordonanţei de urgenţă a Guvernului nr. 119/2006 privind unele măsuri necesare pentru aplicarea unor regulamente comunitare de la data aderării României la Uniunea Europeană, precum şi pentru modificarea Ordonanţei de urgenţă a Guvernului nr. 80/2013 privind taxele judiciare de timbre.

Based on the Government’s Note, the Emergency Ordinance No. 75/2019 was meant to address information that had not been clearly provided for the application of the EAPO in Romania. This concerned:

• the methods that could be used to obtain account information regarding a debtor holding a bank account in Romania (Article 50(1)(c) EAPO Regulation) and
• which courts were competent to handle EAPO requests, the available means of appeal, the national authority competent to receive requests for obtaining account information about bank accounts and to provide such information, and the methods applicable to receive this information (by Romanian and authorities in other Member States).

The new article Article I8 of the Government Emergency Ordinance No 119/2006 regarding certain measures necessary for the application of some Community Regulations after the date of accession of Romania to the European Union explicitly addresses the information requirements contained in Article 50(1) letters (a)-(d), (l) and (m) EAPO Regulation.

Based on this legislative amendment, the courts competent to issue Preservation Orders in Romania based on an authentic instrument would be the ones having jurisdiction to handle the claim at first instance (Article 1(1) Government Emergency Ordinance No 119/2006 in conjunction with Articles 6(4) EAPO Regulation). Further, any appeal against a decision to reject in whole or in part an application for a Preservation Order would be handle by the hierarchical higher court to the one that issued the initial decision (Article 1(2) Government Emergency Ordinance No 119/2006 in conjunction with Articles 21 EAPO Regulation). This means that different type of courts can have jurisdiction to receive an application for an EAPO based on the threshold of the claim. These would be either the district courts (judecătorii) for requests of up to 200.000 RON (approx. 42.000 euros) or the general courts (tribunale) for applications above this threshold. Similarly, any request to revoke or modify a Preservation Order based on Article 31(1) EAPO Regulation will be handled by the hierarchical higher court to the one that issued it (Article 1(3) Government Emergency Ordinance No 119/2006).

The remedies available to the debtor against the enforcement of a Preservation Order according to Article 34 EAPO Regulation will rest with the enforcement court (Article 1(4) Government Emergency Ordinance No 119/2006). Again any appeal against the remedies available to the creditor and the debtor based on the provisions of Articles 33-35 EAPO will lie with the hierarchical higher courts to the courts that issued the Preservation Order (Article 1(3)-(4) Government Emergency Ordinance No 119/2006 in conjunction with Articles 33(1), 34 and 35 EAPO Regulation). In such circumstances, the appeal would have to be introduced within a period of 30 days from the date of communication of the decision challenged, unless the law establishes otherwise. This last part gives rise to some uncertainty, especially for foreign parties which are presumed not to be familiar with the Romanian legal system and its particularities. Hence, relying on a local practitioner would remain necessary although representation is not mandatory in the EAPO procedure (Article 41 EAPO Regulation).

Any request to obtain information and identify a debtor’s potential bank accounts in Romania according to Article 14 EAPO Regulation will be dealt with by the National Union of Judicial Enforcement Officers (Uniunea Naţională a Executorilor Judecătoreşti, UNEJ). The National Union of Judicial Enforcement Officers is the designated information authority competent to provide this information upon request. For this purpose, the Union has been granted direct and free of charge access to the Ministry of Public Finance IT system – PatrimVen (Article 2 Government Emergency Ordinance No 119/2006).

With regard to procedural costs related to the issuance of a European Account Preservation Order, the court fees are fixed at 100 RON (approx. 21 euros) (Article 11(1) Government Emergency Ordinance No 80/2013 regarding the judiciary stamp fees). The EAPO court fee is similar to fees applicable in other national procedures concerning protective measures. Its low value is certainly convenient, especially for high-value EAPOs.

EOP and ESCP: Implementation Legislation A Decade into their Application

The EOP and ESCP have been the testing ground for direct application of ‘second-generation’ European regulations into national procedure. This has led to interpretation difficulties (e.g. amount of court fees to be paid, appeal and review mechanisms, lack of legal assistance) and mixed results according to previously published research findings (e.g. further Luxembourg Report on Mutual Trust and Free Circulation of Judgments and Cross-Border Debt Recovery in the EU). During this initial period, the only legislative provision implicitly referring to these instruments was Article 636 New Code of Civil Procedure. The article states that European enforceable titles for which the exequatur procedure is not required are immediately enforceable in Romania without any preliminary formality.

The legislative change for these two European procedures came in July 2020. A law – Law No 132 of 15 July 2020 – was adopted by the Parliament. The law amended one more time the Government Emergency Ordinance No 119/2006 regarding certain measures necessary for the application of some Community Regulation after the date of accession of Romania to the European Union and the Government Emergency Ordinance No 80/2013 regarding the judiciary stamp fees. Two new articles were added to facilitate the application of the EOP and ESCP Regulation in Romania – Articles I9 and I10 (see Statement of Reasons). As for the EAPO Regulation, these articles address only some of the elements that require coordination between the European rules and national legislation, namely: the requirements of Article 29(1)(a)-(b) EOP Regulation and Article 25(1)(a), (c) and (g) ESCP Regulation

For the EOP, the jurisdiction will rest with the courts that would be competent to handle the claims on the merits at first instance (Article 1 Government Emergency Ordinance No 119/2006). These would be either the district courts (judecătorii) or the general courts (tribunale). The district courts have competence for claims up to 200.000 RON (approx. 42.000 euros). The claims above this threshold will be handled by the general court as first instance court.

Any review request in the framework of the EOP Regulation will be examined by the same court that issued the EOP but in a panel of two judges (Article 2 Government Emergency Ordinance No 119/2006). Although this legislative step clarifies some organisational aspects of the review proceeding, it does not solve how the review should be handled based on various national means (see here also). The national procedures according to which the review should be handled are broader in scope than the provisions of Article 20 EOP Regulation and require some legal knowledge. This keeps the proceeding rather complex for a first-time user with little legal training.

With regard to the ESCP, the Romanian courts competent to issue the ESCP judgment are the district courts (judecătoriile) according to Article 2(1) Government Emergency Ordinance No 119/2006. The ESCP judgment will be subject only to appeal before the competent general court (tribunal) and will have to be filed within 30 days from the moment the judgment was communicated to the party (Article 2(2) Government Emergency Ordinance No 119/2006 in conjunction with Article 17 ESCP Regulation).

A request for review – as for the EOP procedure – will rest with the court that issued the ESCP judgment. However, unlike for the EOP, the provisions related to the ESCP do not expressly indicate that the review will be handled by a panel of judges. This difference in the drafting of the legal text is regrettable as it gives rise to potential confusions and interpretations per a contrario given the special nature of the rules.

Both EOP and ESCP provisions related to the competent courts to receive the application forms do not change the practice of the Romanian courts but confirm the already existing interpretation followed by practitioners.

For court fees, the Romanian legislator opted for a fixed court fee as for similar national procedures (ordonanţa de plată and procedura cu privire la cererile de valoare redusă). Hence, an application for an EOP will cost the applicant 200 RON (approx. 41 euros) (Article 6(2) Government Emergency Ordinance No 80/2013 regarding the judiciary stamp fees). While the ESCP claims will vary between 50 RON (approx. 10,5 euros) for claims below 2.000 RON (or their equivalent) and 200 RON (approx. 41 euros) for claims above this threshold (Article 6(2) Government Emergency Ordinance No 80/2013). The procedure following opposition to an EOP and review requests will involve an additional fixed fee of 100 RON (approx. 21 euros) (Article 6(21) Government Emergency Ordinance No 80/2013 regarding the judiciary stamp fees. This legislative action is welcomed as it puts an end to the different approaches followed by Romania courts. These varied between a fixed cost identical to the equivalent national procedures and a court fee based on the value of the claim submitted.

The most important legislative development related to the application of the ESCP concerns the implementation of specific provisions regarding the assistance to the provided to the parties (Article 11 ESCP Regulation).

According to Article 1 Government Emergency Ordinance No 119/2006, practical assistance for filling in the Claim Form (Form A) will be provided by the lawyers designated for this purpose by each local Bar Association for periods of three months (on a rotation basis). The list of lawyers to provide legal assistance and their contact details will be published online by the Union of National Bar Associations in Romania and each local Bar Association. This list is also to be communicated to each district court for publication at its premises as well as online on the website of the Romanian Courts. Finding the necessary details will remain certainly more challenging for foreign users as the information on the websites is generally available only in Romanian.

The costs for this assistance will be fixed based on a protocol of understanding establishing the representation fees for ex officio legal representation. No fee will have to be paid by the party receiving assistance in accordance with Article 11 ESCP Regulation. Although a welcomed legislative clarification such lists do not appear to have been published for the time being with the indicated national websites or their whereabouts are not easy to spot (even for a legally trained subject). Given that the legislative changes were only introduced four months ago, practical application and technical adjustments may take some time to be calibrated by the local Bar Associations and district courts.

These legislative steps undertaken by the Romanian authorities are certainly a good development for facilitating the interaction between the European and national procedural rules and the application of the EOP, ESCP, and EAPO. Domestic rules have an important influence on the manner in which the European procedures are applied and represent a key prerequisite for certainty, visibility of the procedures, and their subsequent success.