EAPIL blog

On few occasions Polish tax authorities made references to the EU Succession Regulation and applied foreign law designated by its provisions, even though revenue and other administrative matters are explicitly excluded from its scope. This post presents shortly the inheritance taxation rules in Poland, explains why tax authorities felt the need to look into foreign succession laws for tax purposes and how the content of foreign law was ascertained.

The EU Succession Regulations states in its Article 1(1) that it does not apply to revenue, customs or administrative matters. Recital 10 makes reference to taxes in particular. It explains that it is for national law to determine how taxes are calculated and paid. The question is how to proceed if national tax law makes a direct reference to succession law concepts.

It might be reminded that inheritance taxes in Member States were once subject to an EU-sponsored study (which might be consulted here).

Inheritance taxation in Poland is regulated by a separate statute (available here – in Polish only). It provides that the acquisition of goods located in Poland and rights exercised in Poland by an individual as a result of inter alia succession is subject to taxation. Acquisition of goods located abroad or rights exercised abroad is subject to taxation, provided that at the moment of opening of the succession the beneficiary was a Polish national or had habitual residence in Poland. The acquisition of ownership of movable property located in Poland or rights exercised in Poland is not subject to taxation, provided that neither the beneficiary, nor deceased were Polish nationals and had habitual residence in Poland.

There are numerous exemptions from inheritance tax, including the one for the closest family members. The beneficiary is the taxpayer. The tax point arises at the moment of the acceptance of the succession. If the acquisition was not reported to tax authorities the tax point (re)arises at the moment when a document in writing is produced. If it is a court decision the tax point arises at the moment the decision becomes final. The tax base is the net worth of the estate calculated in the prescribed manner. The tax due depends on the degree of affinity or kinship between the deceased and beneficiary and varies between 3% to 20% of the tax base exceeding certain thresholds. Taxpayers are obliged to file a tax return, based on which tax authorities issue a decision indicating tax to be paid.

As mentioned above, the tax point with respect to succession arises at the moment of its acceptance. This clearly refers to the acceptance of the succession, an institution known in the substantive succession law regulated by the Polish Civil Code (here). It states that an heir acquires the estate at the moment of the opening of the succession. Nevertheless, the heir may accept the estate without limitation of liability for debts, with limitation of that liability or may renounce the succession. The time limit for such statement is six months counting from the moment when an hair have learned about his/her title of acquisition.

It is simple to indicate a tax point for inheritance taxation in a purely domestic case. However, inheritance taxation comes into play also in cases which are less intensively connected to Poland. For example, acquisition of an immovable property located in Poland is taxed, even if both the deceased and the beneficiary are foreign nationals with habitual residence abroad. In those cases, in accordance with the EU Succession Regulation, succession is governed by foreign law. The doubt as to the tax point might occur in instances when lex successionis does not know the concept of an acceptance of succession.

While assessing the tax point tax authorities stated that the concept of an acceptance of succession used for tax purposes must take into account the law applicable to civil law aspects of the particular case. This law should be designated in accordance with the EU Succession Regulation.

In the recent tax ruling of 27 August 2020 (signature: 0111-KDIB2-3.4015.112.2020.1.AD) the tax authority analysed English law (as the deceased was habitually resident in the UK). It was explained that in the UK succession case is dealt with differently than in Poland. It is an appointed executor, who is responsible for assessing the value of the estate, payment of debts and payment of inheritance taxes in the UK. The executor is responsible also for sending documents to the probate court. Once the decision of the probate court is delivered, the estate might be transferred to heirs. As a result a final decision of the probate court may be perceived as an equivalent to the acceptance of succession. In an earlier tax ruling of 31 December 2019 (signature: 0111-KDIB4.4015.114.2019.2.MD) the tax authority analysed US succession procedure and also stated that the decision of the court is conclusive for tax purposes in Poland.

Please note that the above are not decisions in particular tax proceedings, but tax rulings, which only interpret the law on the taxpayer’s application and are issued based on information and explanations provided by the taxpayer. Hence, while issuing a tax rulings tax authorities are not establishing the content of foreign law. Tax rulings may be found by their signatures in the public database (accessible here – in Polish only).

In the tax proceeding concerning succession governed by Australian law tax authorities went even further and lined the tax point to the actual transfer of funds from Australia to Poland. The taxpayer was arguing that the tax point have arisen earlier, at the moment of the opening of succession (as the foreign exchange rate used for calculating tax due was more favourable at that time). The decision resulted in a dispute and the tax decision was appealed to the administrative court. The court in its judgement of 26 June 2018 (signature: I SA/Wr 164/18; it may be found by its signature in the public database here – in Polish) set aside the tax decision due to procedural faults, in particular when it comes to ascertainment of the content of foreign law.

The court stated that it is not enough that the tax authorities have asked Polish Consulate in Sidney for information on Australian law and that the decision has indicated provisions of the South Australia Administration and Probate Act 1919 as the basis for conclusions. The court suggested that indeed the tax point arose earlier than at the moment of the bank transfer, but in order to indicate this moment a careful analysis of Australian succession law must be made. For this purpose tax authorities should ask Ministry of Finance for guidance, which might in turn, within the framework of legal aid procedure, contact Australian tax authorities. Australian succession law should be applied as it would be applied by Australian tax authorities in similar cases. Also an expert witness may be appointed.

The above shows the relevance of private international law for the work of administrative authorities, influence of lex successions designated by the EU Succession Regulation on tax matters, but also reveals that tax authorities are not necessarily competent to proceed with the ascertainment of the content of foreign law.

Hélène Péroz (University of Nantes) has edited a commentary of Regulation (EU) 2016/1191 of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union, published by Bruylant (La circulation européenne des actes publics – Premier commentaire du Règlement 2016/1191 du 6 juillet 2016).

More generally, the book addresses the different issues arising from the international circulation of public documents in Europe, both from a practical and an academic perspective.

The book’s table of contents can be found here. See here for further information.

No decisions on PIL matters will be taken this month. However, a couple of opinions will be published, and a hearing will be held.

AG’s Spuznar opinion on C–469/19, All in One Star, will be delivered on 14 October 2020. The request from the German Bundesgerichtshof was lodged on 19 June 2019.

The questions submitted are as follows:

1. Does Article 30 of Directive (EU) 2017/1132 [relating to certain aspects of company law] preclude a national provision under which the indication of the amount of share capital or a comparable capital value is required for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register?

2.a Does Article 30 of Directive (EU) 2017/1132 preclude a national provision under which, when applying for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register, the managing director of the company has to provide an assurance that there is no barrier to his personal appointment under national law in the form of a prohibition, ordered by a court or public authority, on practising his profession or trade, corresponding in whole or in part with the object of the company, or in the form of a final conviction for certain criminal offences and that, in this respect, he has been instructed of his unrestricted duty to provide information to the court by a notary, a representative of a comparable legal advisory profession or a consular officer?

2.b If Question 2.a is answered in the negative: Do Articles 49 and 54 TFEU preclude a national provision under which the managing director of the company has to provide such an assurance when applying for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register?

On the same day, the hearing in C-729/19 Department of Justice for Northern Ireland will take place. The issue relates the registration and enforcement in Northern Ireland of a maintenance order made by a Polish court before Poland’s accession to the EU pursuant to Council Regulation (EC) No 4/2009 of 18 December 2008. The case has been allocated to the 3rd Chamber (the one who determined as well C-41/19 and C-540/19, with Ms. Rossi as reporting judge), and to AG Hogan.

On 29 October, AG Saugmandsgaard Øe will deliver his opinion in C-804/19 , Markt24. Here, the questions come from the Landesgericht Salzburg (Austria), and are not short:

1. Is Article 21 of Regulation (EU) No 1215/2012 applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work?

In the event that the first question is answered in the affirmative:

2. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the Arbeits- und Sozialgerichtsgesetz (Law on the labour and social courts; ‘the ASGG’)?
3. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of his employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?

In the event that Questions 2 and 3 are answered in the negative:

4.1. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that, in the case of an employment relationship in which the female employee has not performed any work, the action must be brought in the Member State in which the employee remained prepared to work?

4.2. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that, in the case of an employment relationship in which the female employee has not performed any work, the action must be brought in the Member State in which the employment contract was initiated and entered into, even if the performance of work in another Member State had been agreed or envisaged in that employment contract?

In the event that the first question is answered in the negative:

5. Is Article 7(1) of Regulation (EU) No 1215/2012 applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work, if it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the ASGG, or if it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of the employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?
6. The proceedings are stayed pending the ruling the Court of Justice (Paragraph 90a of the Gerichtsorganisationsgesetz (Law on the organisation of the courts; ‘the GOG’).

The chamber in charge is the 5th, (Bonichot, Bay Larsen, Toader, Safjan, Jääskinen), with Mr. Safjan as reporting judge.

The members of the proposed EAPIL Working Group on International Property Law will host a webinar 20 October 2020, from 12:30 to 2 pm.

The webinar will illustrate the goals and agenda of the Working Group and provide EAPIL members with the possibility to join the discussion on a future European Regulation on International Property Law.

The webinar’s programme is as follows:

• Prof. Dr. Teun Struycken (Amsterdam/Utrecht): The Significance of International Property Law (case study)
• Ass. Prof. Dr. Teemu Juutilainen (Turku): The Impact of Free Movement of Goods and Services on International Property Law
• Prof. Dr. Gilles Cuniberti (Luxemburg): The Impact of the Acquis Communautaire on International Property Law
• Prof. Dr. Janeen M Carruthers (Glasgow): Global Measures for the Unification of Private International Rules pertaining to Property
• Prof. Dr. Eva-Maria Kieninger (Würzburg): The Way Ahead: Topics and Goals of the Working Group

The practical details for attending the webinar will be communicated soon on this blog.

Situations exist where a judicial document addressed to a person based abroad may be communicated to a lawyer representing that person in the forum State, instead of being served abroad on the addressee himself or herself. This usually applies to service occurring after the act instituting the proceedings has been served on the defendant in conformity with either the Service Regulation or the Hague Service Convention.

In fact, the described situation may also arise in the framework of proceedings brought by a foreign claimant against a defendant based in the forum. In this case, the defendant may reasonably presume that the lawyer signing the claim on behalf of the foreign litigant is eligible for receiving documents related to the case.

While the latter assumption would generally seem to be accurate, the admissibility of service on the lawyer  depends on the kind of documents that the latter is in fact allowed to receive on behalf of the client.

In 2019, the Greek Supreme Court issued an interesting ruling on the matter.

After longstanding business collaboration between a Greek company and a Finnish telecommunications giant, a decade of confrontation began in 2010. In a series of proceedings, the parties fought through all court instances.

The first stage was a successful application for a freezing order filed by the Finnish company. An actio pauliana was filed in parallel by the same company, which was dismissed by the Athens Court of First Instance. The appeal lodged by the Finnish company, instead was successful. The losing party filed cassation against the Athens Court of Appeal ruling.

Almost at the same time, the Greek company lodged an application to reverse the freezing order, which was filed to the Supreme Court, in accordance with domestic Civil Procedure Rules (Article 698 of the Code of Civil Procedure).

As in previous stages of the litigation, the document was served on the lawyer representing the Finnish company. The latter did not appear in the hearing.

The Supreme Court ruled that the application was inadmissible because it was not served on a lawyer instructed by the foreign company to accept service on its behalf at a business address within the jurisdiction [Supreme Court Nr. 470/2019, unreported]. The reasoning of the court may be summarised as follows:

• Proper indirect service (in the case at hand, service to a lawyer representing a party), must be demonstrated by the party instructing the process server to deliver the document in this fashion.
• Pursuant to Greek law, a foreign party may appoint a representative ad litem in the following ways: by a declaration addressed to the clerks of the Athens Court of First Instance; by a specific clause in a contract; by appointing a lawyer as a representative ad litem pursuant to Article 96 of the Greek Code of Civil Procedure [i.e. orally before the court and prior to the hearing, or in written by means of a private power of attorney, upon the condition that the signature has been certified by a public authority or another attorney at law].
• Pursuant to Article 143(4) of the Code of Civil Procedure, all documents addressed to a foreign party must be served on the representative ad litem, if properly appointed, provided they fall within the set of cases covered by the power of attorney for the purpose of service.
• The Supreme Court found, however, that the application by the appellant to reverse the freezing order before the Court itself was not related to the set of cases for which the lawyer of the Finnish company was appointed. In particular, the lawyer’s appointment concerned the main dispute (which reached the Supreme Court), not the provisional measures (freezing order).
• Therefore, service of the application to reverse the freezing order to the lawyer who received the writ on behalf of the Finnish company was inadmissible.
• The above result is free of doubt, notwithstanding the same lawyer acted and received documents on behalf of the Finnish company in a number of occasions, such as: representation before the Athens Court of First Instance and Court of Appeal; representation before the court which issued the freezing order; filing on behalf of the Finnish company of an application for declaring the Greek company insolvent, and representing the same party before court in the bankruptcy proceedings.

Almost ten years after the start of litigation, and following a number of hearings where the Finnish company was represented by the same lawyer, the Supreme Court considered that the latter had no powers of representation in a case initiated by his own application, followed by his appearance before the court, and his instruction to serve the freezing order to the losing party.

The ruling of the Supreme Court rests upon a formalistic construction of the law; contradicts to the factual situation of the dispute; causes additional costs to the applicant with no apparent reason; endangers the right to judicial protection, given that service from Greece to Finland is not business as usual.

Last but not least, the Supreme Court did not utter a word about the actual applicable rules, i.e those in the Service Regulation. It failed to take into account Recital 8 of the Preamble and the pertinent case law of the CJEU. Finally, it missed the chance to address the matter to the European Court of Justice, by filing a preliminary request for an issue which continues to puzzle academia and practice alike.

The 2021 winter course of the Hague Academy of International Law will be held online from 11 to 29 January 2021.

One remarkable feature of the Academy’s winter courses is that they jointly cover topics belonging (or traditionally labelled as belonging) to both public and private international law.

The General Course will be delivered by Maurice Kamto under the title International Law and Normative Polycentrism.

Special courses include: Evidence in International Adjudication by Chester Brown, The Protection of Religious Cultural Property in Public and Private International Law by José Angelo Estrella Faria, and The Regulation of the Internet by Inger Österdahl.

The winter course’s full programme is available here.

Registration will open on 8 October 2020. Further information is available on the Academy website.

On 14 August 2020, the Department of European and Comparative Procedural Law of the MPI Luxembourg met online with a special invitee, Steven Gee QC, joining actually from Hong Kong, where he was staying at the time.

Mr. Gee is the author of a treatise on, and entitled, Commercial Injunctions (Sweet & Maxwell, last edition 2016, a new updated one in the making). The book is mainly about UK law but at the end it addresses as well other jurisdictions. This is why Mr. Gee got in touch with the MPI (Prof. Burkhard Hess and Dr. Vincent Richard will contribute to the European part of the next edition of Commercial Injunctions), and how he ended up sharing with the researchers and MPI guests a two-hours talk on injunctions.

I thought his presentation and the following debate had been recorded but, unfortunately, it had not. Therefore, I cannot accurately report on the contents. What I can do, though, is to explain here an idea I had already in mind and was, to some extent, confirmed by Mr. Gee during the discussion.

It has to do with antisuit injunctions and the preliminary reference sent to the Court of Justice last December by the Court of Appeal (England & Wales), on the interpretation of Article 4(1) of the Brussels I bis Regulation (C-946/19). At the time I am writing these lines a settlement has been reached between the litigants in the main proceedings, and the request consequently withdrawn. A fact which strengthens my dismayed suspicion that the whole thing was a practical joke on the Court of Justice (but not only). Of course, I know I am exaggerating and, regarding the intentions of the referring court, wrong. This notwithstanding: a request relating to antisuit injunctions, i.e., to one of the most distinctive institutions of the common law tradition, already firmly rejected by the Court of Justice in ad intra situations; asking whether the injunction could (rather: had to) be mandatorily (no discretion!) granted on the basis of a crucial provision of a pivotal EU instrument [article 4(1) of the Brussels I bis Regulation], in ad extra situations (an invitation to indulge in “eurocentrism”?); sent to the Court of Justice barely one month before Brexit (and twelve months away from the end of the transitional period)? Some eyebrows have surely gone up.

The doubts of the national court regarding Article 4(1) of the Regulation read as follow:

whether the true effect of the Article is to give a right to every defendant who is domiciled in a Member State to be sued exclusively in the State of their domicile in all but the slender circumstances where that outcome is specifically excluded or some other outcome is permitted by the Judgments Regulation itself.

As a matter of fact, the Court of Appeal looked rather keen on answering in the affirmative [at 50]: ‘we acknowledge that [the antisuit injunction applicant’s] interpretation of the meaning and effect of Article 4(1) is a possible interpretation’.

The actual ground for referring the question to the Court of Justice had rather to do with the consequences of spousing such view [id. loc.]: ‘[…] but it is not one [interpretation] that we would wish to adopt in the present case unless required to do so’. Should Article 4(1) create a directly enforceable right, the Court of Appeal feared its breach would automatically lead to an antisuit injunction [id. loc.]: ‘[an]  extreme result[s] that would not be contemplated by an application of domestic law’.

In the case at hand, the Court of Appeal had already confirmed the first instance determinations in the sense that previous national case law on employment contracts, according to which Article 20(1) of the Brussels I Regulation and Article 22(1) of the Brussel I bis Regulation create a right protecting the employee against being sued in a third State by his employer, was not binding on it.

My experience with English practitioners and academics is that they do have a good knowledge and understanding of EU law. That Article 4(1) of the Brussels I bis Regulation is not meant to confer an individual right is something the referring court could have easily concluded itself, without asking Luxembourg.

We – scholars- tend to be thorough and go to the bottom of the arguments: legislative intention based on history (not just the very illustrative Jenard and Schlosser Reports, but, here, also the rich publication of GAL Droz on the Brussels Convention, and all those he quotes); text; system; object and purpose of the provision; legal comparison. But for the sitting judges to decide on the dispute at stake, a look at Article 4(1) in a language other than English, coupled with a comparison between the rationale of the provisions on employment contracts and of Article 4(1), should have been enough if they wanted to move forward keeping the reasoning sober.

On the occasion of the MPI’s meeting mentioned above, Mr. Gee’s stressed a factor of the proceedings before the Court of Appeal that may help understanding the situation; he highlighted the asymmetry between the parties to the dispute. Throughout the proceedings before the Judge, both parties had been represented by solicitors and by leading and junior counsel. Before the Court of Appeal it remained so regarding the antisuit injunction’s applicant, but not the defendant, who did neither attend nor was represented, due to, allegedly, financial inability. The Court had only the written submissions previously made by his legal team to resist the antisuit injunction. They may have been enough to convince the first instance Judge not to grant the injunction; but before the Court of Appeal, and against the (slightly) more sophisticated (and, by all means, radical) submissions of Mr Cohen QC on behalf of the applicant at the hearing, he probably needed to do better.

As indicated, the case will no longer keep the Court of Justice busy. My (strictly) personal view remains that the preliminary reference was a practical joke: on the Court of Justice, and on second thought also on the Court of Appeal. Both seem to have been strategically used by one of the litigants.

In any event, I expect academics to study further the questions referred in C-946/19. For sure, I do not see any individual right “hidden” in Article 4(1) of the Brussels I bis Regulation. But, contrary to some scholars’ views (A. Dickinson, C.M. Clarkson and J. Hill, following A. Briggs) I believe other provisions in the Regulation may be interpreted in that way: not because they were conceived with the purpose of conferring directly enforceable rights upon persons domiciled in a Member State, but because such understanding of the jurisdictional grounds would help ensuring that specific substantive EU law is effective also extraterritorially, where needed.

(NoA: MPI Department I “Referentenrunde” have been resumed on the usual weekly basis every Wednesday via Zoom. A series of lectures is foreseen for the fall; specific dates will be announced in due time through the MPI website. Events are open to all having an interest. Contact person: michalis.spyropoulos@mpi.lu)

What is ‘habitual residence’ for the purposes of the EU regulations on family matters (succession included)? The questions, coupled with the one on how many habitual residences a person may have for the same purposes, is a known source of headaches for the national courts. In the last months, several requests for a preliminary ruling on the issue have been filed with the CJEU originating from different Member States, as if the judges had got into an agreement to ‘corner’ the Court in Luxembourg to try and
get once and for all (?) a helpful answer.

In the E.E. case (C-80/19, judgment of 16 July 2020), the Lietuvos Aukščiausiasis Teismas (Supreme Court of Lithuania) asked the CJEU whether, for the purposes of Regulation No 650/2012 (the Succession Regulation), the habitual residence of the deceased can only be one or, on the contrary, a number of places of habitual residence in different States would be admissible. The referring court acknowledged the former to be the likely correct answer, but added ‘that position is not, however, expressly prescribed and there is [therefore] a need for greater clarity and explanation from the Court of Justice in that context’. It was indeed correct. Like the AG, the CJEU elaborated on how to the ‘one and only’ deceased’s habitual residence is to be determined, finding support in the recitals of the Regulation. The decision is reported and commented by Carlos Santaló in this blog.

Some days before the E.E. decision, on 30 June 2020, a request on the meaning of ‘habitual residence’ was lodged (C-289/20, IB), this time in relation to Regulation No 2201/2003 (Brussels II bis) . The question, from the Paris Court of Appeal, reads as follows: ‘Where, as in the present case, it is apparent from the factual circumstances that one of the spouses divides his time between two Member States, is it permissible to conclude, in accordance with and for the purposes of the application of Article 3 of Regulation No 2201/2003, that he or she is habitually resident in two Member States, such that, if the conditions listed in that article are met in two Member States, the courts of those two States have equal jurisdiction to rule on the divorce?’

The request is not yet available at curia.eu in a language other than French. A short summary would be that the spouses have different views on whether France is the habitual residence of IB (the husband); much of the discussion revolves around his intention to reside there. In this regard, IB explains that he has been carrying out his professional activities in France since 2010 and in a stable and sustainable manner since 15 May 2017; that he moved to Paris, in an apartment belonging to his father; that he leads a social life there, and that it is his wife’s refusal to come and live in France, although she stays there regularly, in the Parisian apartment or in a vacation home acquired in 2017, which led them to lead a parallel daily life. The wife (FA) replies that it was never agreed or envisaged that the family would settle in France; the family’s habitual residence was in Ireland, where the children were brought up; the husband never changed his residence in Ireland but only the address of his place of work. FA argues that the fact that IB has worked and received his income in France for more than six months is insufficient to characterize his habitual residence within the meaning of Article 3 of Regulation No 2201/2003, whereas he has continued to come to Ireland, to the family home, until the end of 2018; he continued to lead the same life there; he previously lived there and he consulted a lawyer in Ireland when the spouses considered, from September 2018, to divorce.

On 15 September 15 2020, the Audiencia Provincial (Court of Appeal) of Barcelona sent a request for a preliminary reference to the CJEU, also on the notion of ‘habitual residence’ of adults in Regulation No 2201/2003; the request is nonetheless broader, encompassing as well the Maintenance Regulation, and further aspects of both EU instruments. The Spanish order was reported in Prof. José Carlos Fernández Rozas’s blog on 25 September 2020, with a link to the official document in Spanish. I found it of big interest and have summarized the factual situation and the questions in English for the EAPIL, while waiting for the case to be given a file number and properly translated.

The litigants were married on 25 August 2010 at the Spanish Embassy in Guinea Bissau (Africa); the wife is a Spanish national, while the husband has Portuguese nationality. Their children have both Spanish and Portuguese nationality. The family resided in Guinea-Bissau from August 2010 until February 2015; they moved then to the Republic of Togo. They separated de facto in July 2018. Mother and children continue to reside in the matrimonial home; the husband moved to a bungalow, in the same country.

Both spouses work for the European Commission at the Delegation in Togo, as contractual agents. According to the evidence submitted contractual agents are granted diplomatic status in the country of destination, whereas in the EU Member States they are considered as EU officials only (NoA: this point seems to be nonetheless contested).

On 6 March 2019, the legal representative of the wife lodged an application for divorce with the Spanish courts. She asked as well for the dissolution of the matrimonial property regime, for the adoption of measures regarding the custody of the children, for maintenance for the children, and for the exclusive use of the family home in Togo. The Spanish Court of First Instance dismissed the application for divorce on the basis of lack of jurisdiction.

The wife appealed against the order before the Audiencia Provincial in Barcelona. The following questions (freely translated by myself) are now before the CJEU:

1)          How should the concept of ‘habitual residence’ in Article 3 of Regulation No 2201/2003 and on Article 3 of Regulation 4/2009 (the Maintenance Regulation) be interpreted in relation to nationals of Member States who remain in a third State by reason of the functions they are entrusted with as contractual agents of the EU, and who, in that third State, are accorded the status of diplomatic agents of the EU due to the fact that their presence there is linked to the exercise of the functions they perform for the Union?

2)          Is the determination of the habitual residence of the minor children of the couple under Article 8 of Regulation No 2201/2003 affected in any way where, for the purposes of Article 3 of Regulation No 2001/2003 and Article 3 of Regulation No 4/2009, the determination of the spouses’ habitual residence is dependent on their status as contractual agents of the European Union in a third State?

3)          Should the minor children be deemed not to have their habitual residence in the third State, can account be taken of the link between the nationality of the mother, her residence in Spain prior to the celebration of the marriage, the Spanish nationality of the minor children and their birth in Spain for the purposes of determining habitual residence under Article 8 of Regulation No 2201/2003?

4)          If it is established that neither the habitual residence of the parents nor that of the children is in a Member State, and given that under Regulation No 2201/2003 no other Member State would be competent to settle the claims, does the fact that the defendant is a national of a Member State preclude the application of the residual rules of jurisdiction under Articles 7 and 14 of Regulation No 2201/2003?

5)          Should it be established that neither the habitual residence of the parents nor that of the minors is in a Member State, for the purposes of determining the maintenance of the children, how is the forum necessitatis rule of Article 7 of Regulation No 4/2009 to be interpreted and, in particular, which elements are needed to establish that proceedings cannot reasonably be filed or carried out in a third country with which the dispute has a close relationship (in this case, Togo)? Is it compulsory, on the other hand, to demonstrate that an attempt at bringing proceedings in that State has been made, with a negative outcome? Moreover, would the nationality of any of the litigants be considered a ‘sufficient connection’ to the Member State (for the purposes of Article 7 of the Maintenance Regulation)?

6)          In a situation like the one at stake, where the spouses have strong ties with Member States (nationality, former residence) would it be contrary to Article 47 of the European Charter of Fundamental Rights to conclude, in application of the rules of the Regulations, that no Member States has jurisdiction to adjudicate?

Clearly the CJEU has a chance to elaborate; good that the national authorities keep on asking.

Guillaume Payan (University of Toulon, France) edited a Compendium of the Hague Conventions and Protocols enriched by case law from Belgian, French, Luxembourg and Swiss jurisdictions, as well as European jurisdictions (CJUE and ECtHR), published by Bruylant (Conventions et Protocoles de La Haye annotés : Recueil annoté avec les jurisprudences des juridictions belges, françaises, luxembourgeoises et suisses ainsi que des juridictions européennes).

The author has provided the following abstract in English:

Established 125 years ago, the main goal of the Hague Conference on Private International Law (HCCH) is to work for the progressive unification of the private international law rules. Against that background, international conventions are negotiated and, by now, 40 conventions have already been adopted. The most recent is the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

This book brings together all of these Conventions and Protocols, enriched by numerous doctrinal references and more than 600 case law references from Belgian, French, Luxembourg and Swiss jurisdictions.

Are also included judgments of the Court of Justice of the European Union and the European Court of Human Rights. The European Courts also have to integrate the Hague Conventions into their reasoning.

Finally, the book contains practical information on the Contracting Parties to the various conventions and on any declarations formulated by the Contracting Parties, as well as on the Central Authorities designated for the proper application of the conventions.

This work is prefaced by Christophe Bernasconi (Secretary General of the Hague Conference).

Contributors to the book include : Lora Arnould (Lawyer in Brussels, Belgium), Aude Berthe (Judge in Liège, Belgium), Prof. François Bohnet (University of Neuchâtel, Switzerland), Catalina Constantina (University of Neuchâtel, Switzerland), Carmela -Milena Liccardo (Lawyer in Brussels, Belgium) and Prof. Séverine Menetrey (University of Luxembourg, Luxembourg)

The book’s table of contents can be found here. For further information see here.

Haris Meidanis’ new article on international mediation has just appeared at the current issue (2020/2) of the Journal of Private International Law under the title Enforcement of mediation settlement agreements in the EU and the need for reform.

In this article he discusses the current status of EU law on cross-border enforcement of Mediated Settlement Agreements (MSAs) focusing mainly on non-family law matters. Directive 2008/52 states the form an MSA may take under the national legislation, as the basis of cross-border enforcement. Given (a) the polyphony of national legislation as to the form an MSA may take for enforcement purposes and (b) the meaning of “judgment” under EU private international law and the Solo Kleinmotoren case, it is suggested that a level playing field as to cross-border enforcement of MSAs in the EU is not guaranteed. Further, it is suggested that MSAs constitute the outcome of a third distinct dispute resolution category, next to judgments and awards, and are also distinct to contracts. It is concluded that a reform of EU law seems necessary in order to mitigate the above lack of an equal level playing field and to take into account the special character of MSAs.

This is the third recent article on international mediation by the same writer, following the one published with Arbitration (the law review of CIArb) on Vol 85-Feb 2019, pp. 49-64, under the title International Enforcement of Mediated Settlement Agreements – Two and a half models, and the one published with ICC’s Dispute Resolution Bulletin (Issue 1, 2020, pp. 41-52) under the title International Mediation and Private International Law.

The CIArb article presents the various models regarding international enforcement of Mediated Settlement Agreements (namely the ones of the Singapore Convention of 2019 of the EU and of the New York Convention of 1958 (the “half model”) and makes the related comparison, while the ICC article presents the basic issues that may appear in an international mediation, from a PIL perspective.

The Organisation for the Harmonisation of Business Law in Africa (OHADA) has selected a team to prepare a draft Uniform Act of Private International Law. After a 10 month selection process, it has chosen a team led by the Paris office of Shearman & Sterling (see the announcement of the firm here).

The  mandate consists of drafting a Uniform Act on conflict of laws, conflicts of jurisdictions and the circulation of judicial and extrajudicial documents. The Act should contain an exhaustive set of PIL rules, which will be directly applicable in the 17 OHADA States and replace any local PIL rules currently applicable in those States. This would be the tenth Uniform Act adopted by OHADA.

OHADA was established in 1993 with the goal of harmonizing the business laws of its member States in order to foster economic development in the region. It comprises States mostly from francophone Central and Western Africa.

The team is composed of attorneys from the Paris office of the firm, but also several academics and practitioners from France and OHADA states (Cameroon and Ivory Coast, in particular).

One is hopeful that the team will want to identify the best solutions for Africa not only by considering the recent codifications of PIL drafted in French (Belgium Code of PIL, Swiss PIL Act, Quebec legislations, in particular), but also the PIL of other legal traditions, including those of neighbouring states such as Nigeria and Ghana.

The author of this post is Lorenzo Acconciamessa, a PhD candidate at the University of Palermo and a teaching assistant at the Catholic University of the Sacred Heart in Milan.

By an order of 29 April 2020 the First Chamber of the Italian Supreme Court asked the Italian Constitutional Court to review the constitutional legitimacy of the combined operation of the various Italian rules of private international law governing the (non-)recognition of a foreign birth certificate attesting the existence of a parent-child relationship between a child born abroad by resorting to gestational surrogacy and his intended parent. In 2019, the Joint Chambers of the Supreme Court ruled that, on a proper interpretation of the Italian provisions of private international, such recognition ought to be denied on the ground that it would offend public policy. Put shortly, by its order of April 2020, the First Chamber of the Supreme Court asked the Constitutional Court to assess whether the above provisions, as interpreted by the Joint Chambers in the ruling of 2019, are consistent with the Italian Constitution.

One of the key issues that the Constitutional Court will need to address is whether, and to what extent, international human rights law – notably as expressed in the European Convention on Human Rights (ECHR) and the UN 1989 Convention on the Rights of the Child (CRC) – affects the ability of State’s authorities to refuse the recognition of personal statuses and family relationships on grounds of public policy, thereby precluding the cross-border continuity of the concerned persons’ family status validly and effectively created abroad. Indeed, pursuant to Article 117, paragraph 1, of the Italian Constitution, legislation cannot infringe the international obligations of Italy. In this regard, the Constitutional Court made clear that in the event of a conflict between a piece of domestic legislation and the obligations arising from an international treaty in force for Italy, the former must be considered to be unconstitutional and accordingly declared void.

The case concerned a same-sex couple of Italian men who got married in Canada. Their marriage was recognised in Italy as a registered partnership, pursuant to Article 32-bis of the Italian Statute on Private International Law. They subsequently had a child in Canada by resorting to surrogate motherhood. Surrogacy is permitted in Canada, provided that the surrogate mother acts freely and altruistically. The child’s birth certificate had been recognised and recorded in Italy following a decision of the Registrar of the Municipality of Verona. However, the certificate merely mentioned the spouse having a biological bond with the child. The couple seised the Supreme Court of British Columbia to have the birth certificate rectified: they wished that both – the biological and the intended fathers – be referred to as the parents of the child. Their application was successful. The couple then requested that such rectification be recognised in Italy. The Registrar, however, dismissed the request, arguing that recognition would be at variance with the Italian public policy.

On several occasions, in the past, the Italian Supreme Court restricted public policy to such fundamental values as are shared by the international community. On those grounds, the First Chamber ruled in 2016 that the public policy defence could not be raised to prevent the recognition of a foreign birth certificate attesting the family relationship between a child and his two mothers (the biological one, who carried on the pregnancy, and the genetical one, who had donated the ovum). Public policy, the Court argued, encompasses fundamental principles enshrined in the Italian Constitution as well as in supranational and international human rights instruments by which Italy is bound. The best interests of the child, and his right to personal and social identity, are then to be considered as public policy principles.

According to this view, the mere incompatibility between foreign judgments or public acts and domestic mandatory provisions is not enough to trigger the public policy defence. The same approach was followed by the Court of Appeal of Venice in the case that the Italian Constitutional Court is now called upon to consider. In particular, the Court of Appeal submitted that the fact that Italian law fails to make provision for same-sex marriage and for the attribution, to both the parties of a same-sex couple, of the parental status over a child born through medically assisted procreation, is not, in itself, evidence of the existence of a corresponding public policy principle. The statutes providing for such rules, indeed, are mere expression of the legislature’s political discretion.

However, the State Attorney was not satisfied by the judgment of the Court of Appeal and moved to have the ruling reviewed by the Supreme Court. He argued that the recognition of the Canadian judgment would be in clear breach of the Italian legislation on filiation and medically assisted procreation and, as a consequence, at odds with the public order of Italy. The State Attorney, in particular, invoked a different conception of the public policy, as adopted by the Joint Chambers of the Supreme Court.

And indeed, in 2019 the Joint Chambers remarked that other principles of the forum must be taken into account when determining the scope of public policy, in addition to the principles arising from the Constitution and international instruments. Domestic ordinary legislation may be seen as providing evidence of the fundamental policies of the Italian legal order as well, namely where it implements the principles enshrined in the Constitution.

According to that approach, while the recognition of the family relationship between the child born under a surrogacy arrangement and the intended biological father – through the recording of the birth certificate – is justified by the existence of a biological relationship, the recording of the part of the certificate mentioning as parent the merely intended (non-biological nor genetic) father would be at odds with the Italian (criminal) prohibition of gestational surrogacy arrangements, provided for in Article 12, paragraph 6, of the Italian Statute on Medically Assisted Procreation. Such regulation is deemed by the Joint Chambers to implement constitutional principles concerning the protection of the dignity of the woman and, consequently, to express a public policy principle. In the Joint Sections’ view, such a statement is imposed by an incontestable appreciation of the legislator and by the Constitutional Court’s case-law. As a consequence, judges would be precluded from substituting their own assessment on this matter.

The Joint Chambers added that the protection of the (best) interests of the child, in any case, would be guaranteed by the possibility, for the intended, non biological parent, to resort to the “adoption in particular cases”, pursuant to Article 44, paragraph 1, of the Italian Statute on Adoption. It is a sort of last resort clause allowing for recognition of the emotional bond between the child and the intended parent, when he/she is also the biological parent’s spouse, or, in any case, provided that the relationship has been established as a social reality. The Joint Chambers tried to frame their approach within the European Court of Human Rights’ (ECtHR) doctrine of the margin of appreciation. In particular, they considered that Italy had already complied with ECHR standards by providing full recognition of the child’s relationship with the biological parent. By contrast, in the absence of a biological link with the intended parent, State’s authorities would retain a wide margin of appreciation in choosing the appropriate mechanism for assuring the establishment of a legal relationship comparable (not identical) to natural filiation.

The Joint Chambers’ approach is not in itself at odds with the ECHR standards, at least as they were standing at the moment of the 2019 ruling. In the Strasbourg judges’ opinion, the right to personal identity, enshrined in Article 8 ECHR, may imply a right to the cross-border continuity of personal statuses and family relationships created abroad (see Marongiu Buonaiuti and Baratta). And indeed, non-recognition of family statuses validly and effectively created abroad interferes with the right to private and family life. The case at hand fulfils the conditions required under Article 8 ECHR to be entitled to that right: (1) from a formal point of view, the family tie has been validly and legally created before seeking its recognition; (2) from a substantial point of view, the family relationship has been established a social reality, having the child lived with the biological and the intended father since he was born. Moreover, the case involves essential interests of a child, which should be a primary consideration of the State (Neuliger and Shuruck, para. 135).

According to the Court’s well-established case-law, however, if the interference is prescribed in accordance with the law, pursues a legitimate aim and is “necessary in a democratic society” for achieving it, it can be defined as legitimate. Such right might be limited by applying the public policy clause, which is a rule of law aimed at protecting the essential interests (and values) of the State. States enjoy a margin of appreciation in striking such a fair balance between States’ interests and individuals’ rights, that, nevertheless, has been progressively restricted by the ECtHR.

In Negrepontis-Giannisis the Court ruled that the refusal on public policy grounds to recognize an adoption pronounced (in 1984) by a Court in the U.S. between an adult and his uncle, a bishop of the Orthodox Church, violated Article 8. A few years later, the Court asserted in Paradiso and Campanelli that the public policy defence cannot be resorted to as a sort of “charte blanche for any measure, since the State ha[s] an obligation to take the child’s best interests into account irrespective of the nature of the parental link, genetic or otherwise” (para. 80). The Grand Chamber reversed the judgment because it considered that no family relationship existed in the considered case. Therefore, it was unnecessary to determine whether the interference produced by the public policy defence was legitimate, given that there was no right to interfere with.

In two well-known cases concerning the recognition of the family relationship between the child born under a surrogacy arrangement and the biological parent, the ECtHR considered that, even when a State is invoking the international public policy exception, the Court “must, however, verify whether in applying that mechanism … the domestic courts duly took account of the need to strike a fair balance between the interest of the community in ensuring that its members conform to the choice made democratically within that community [prohibiting gestational surrogacy arrangements] and the interest of the applicants – the children’s best interests being paramount – in fully enjoying their rights to respect for their private and family rights” (Labassee, para. 63 and Mennesson, para. 84). It then concluded that the children’s right to personal identity– which involves the right to have their family relationship with the (intended) biological or genetic parent recognized – trumped the State’s interests in protecting those it considers as fundamental values of the fore. According to the Court, the State had to grant the recording of the birth certificate for, at that time, no valid alternatives existed, according to the case-law of the French Court of Cassation, for establishing such a family relationship.

As for the family relationship between the child born under a gestational arrangement and the (merely) intended (non biological nor genetic) parent, the ECtHR expressed its views in the first advisory opinion, delivered, pursuant to Protocol No. 16 to the ECHR, on 10th April 2019. Indeed, following the 2014 judgment in the Mennesson case, the French Cour de Cassation asked the Grand Chamber whether the State had, under the ECHR, an obligation to recognize the family relationship also with respect to the intended parent and whether, in this case, allowing the adoption of the child sufficed. As for the first question, the Court considered that «the general and absolute impossibility of obtaining recognition of the relationship … is incompatible with the child’s best interests» (para. 42). The Court did not distinguish between the fact of the intended mother being or not also the genetic or biological mother As for the second question, the Court stipulated that the case required a fair and appropriate balancing of interests. The invocation of the public policy clause – with the aim of denying direct recognition of the foreign birth certificate or judgment – would be legitimate, in the light of the State’s margin of appreciation, provided that, in any case, adoption or other available proceedings constitute “an effective [alternative] mechanism […], enabling the relationship to be recognized” (para. 54). Such a mechanism, in the Court’s opinion, should be appropriate (guaranteeing an effective recognition of parent-child relationship), rapid, and should allow for “an assessment by the courts of the child’s best interests in the light of the circumstances of the case” (ibidem). Moreover, recognition, whatever the legal instrument resorted to, must intervene not after its effective instauration as a social reality.

Although the ECtHR’s advisory opinion is not legally binding, the First Chamber of the Supreme Court in the 2020 Order considered it had to uphold its findings. It then questioned the Joint Chambers arguments concerning the public policy defence by highlighting, inter alia, that it is at odds with the developments in the ECtHR’s case law, at least for two reasons. On the one hand, the Court considered it is illegitimate to qualify the prohibition of surrogacy as public policy, and to make it automatically prevail over the best interests of the child, without an appropriate case-by-case evaluation. For this end, it should be assessed whether effective alternatives exist for upholding the best interests of the child. On the other hand (and consequently), the Italian legal system is currently at odds with the ECHR for the “adoption in particular cases” do not qualify as an effective alternative mechanism, in the abovementioned meaning.

The First Chamber relied on a combination of domestic and international human rights sources to shape the extent of public policy and concluded that the principle of the best interests of the child is part of the Italian international public policy. The application of the public policy exception then requires a balancing of interests between, on one hand, the child’s interest in having his/her relationship with the intended parent recognized and, on the other hand, the State’s interests in avoiding recognition of acts which are perceived as incompatible with domestic fundamental values. According to the First Chamber, such a balancing assessment might lead to the application of a foreign law or the recognition of foreign judgments (or public document) even in violation of domestic (ordinary) rules, provided that the supreme principles of the legal order – in particular, those concerning the fundamental rights and human dignity – are not violated.

The “adoption in particular cases” would not entail such a fair balance, for it does not create a full parent-child relationship, it requires a time-consuming and complex proceeding, exposing the child’s to a period of incertitude, and is conditioned upon the parties’ will. As for the content of the established relationship, it is not comparable to natural filiation, given that it does not involve family bonds between the child and the adopter’s relatives nor succession rights. And while the State’s margin of appreciation under the ECHR, the Supreme Court argued, is wide as regards the means by which family relationships are recognised, it is not as wide as regards the “intensity” and content of such relationships.

For all the above reasons, the First Chamber of the Italian Supreme Court asked the Constitutional Court whether the Joint Sections’ approach is constitutionally legitimate, also, and in particular, in the light of the State’s obligations arising from the ECHR and the CRC.

One should also consider that the “downgrading” of the family relationship through the “adoption in particular cases”, beyond being illegitimate in light of the constitutional principle of the unity of the status filiationis irrespective of the modality and circumstances of the child’s conception and birth, would also infringe the standards that have been recently clarified by the ECtHR.

Indeed, two months after the order of the First Chamber the ECtHR delivered its judgment in D. v. France. The Court implicitly confirmed the necessity of a full legal recognition of the intended parent-child relationship, although it admitted that the methods for achieving that aim can be determined by the State in the exercise of its margin of appreciation. It means that such recognition must not necessarily be achieved through the recording of the birth certificate, provided that the State guarantees and effective and rapid recognition. The ECtHR indeed concluded that the refusal to record the birth certificate of a child born in Ukraine through a gestational arrangement as long as it mentioned the intended mother – who was also the genetic mother – as the legal mother, did not violate Article 8 ECHR. In the Court’s reasoning, the French Cour de Cassation had already confirmed possibility for the (intended) mother to adopt her spouse’s child – for the birth certificate had been recorded in respect of the intended biological father – by way of full adoption. In the Court’s view, that possibility sufficed in order to establish an effective legal parent-child relationship. And indeed, full adoption is pronounced through a rapid proceeding (para. 67) and produces « des effets de même nature que la transcription de l’acte de naissance étranger s’agissant de la reconnaissance du lien de filiation entre l’enfant et la mère d’intention » (para. 66). The case seems then to confirm, a contrario, the Italian First Chamber’s argument: the denial to record the birth certificate is legitimate as long as an alternative mechanism enabling the establishment of a full parent-child relationship exist. Therefore, in Italy, where full adoption is not allowed in the same circumstances, the recording of the birth certificate seems the last valid alternative.

The approach of the First Chamber is commendable from an inter-systemic point of view, for it gives due relevance to the ECtHR approach. In this regard, one should also consider that France already complied with the ECtHR recommendation, given that the intended parent can resort to full adoption. Moreover, in the Mennesson case the Court de Cassation finally allowed the recognition of the parent-child relationship through the recording the foreign birth certificate which mentioned the intended mother as the legal mother (see Arrêt n. 648 P+B+R+I). Given the circumstances of the case, in fact, the Court considered that, following 15 years of judicial proceedings, the best interests of the child required an immediate recognition of the relationship, without imposing to the intended mother the institution of an adoption proceeding.

However, it is unlikely that the Italian Constitutional Court will conclude that non-recognition amounts to a violation of the Constitution. In fact, the Court itself ruled in the past that gestational arrangements violate the woman’s dignity and that, in any case, the adoption in particular cases is an adequate alternative to the (full) recognition of the parent-child relationship (Judgment No. 272 of 2017). It has also ruled against same-sex filiation through medically assisted procreation (Judgment No. 221 of 2019).

The relevant issue will thus concern the parameter of constitutionality arising from Article 117 of the Italian Constitution. Pursuant to that provision, as interpreted by the Constitutional Court since the twin Judgments Nos 348 and 349 of 2007, the legitimacy of ordinary legislation is also assessed against such international treaties as are in force for Italy. The Constitutional Court is then, first of all, called to assess whether the developments in the ECtHR’s case-law have already restricted the State’s margin of appreciation in respect of the recognition of the family relationship between the child born abroad under a surrogacy arrangement and the intended parent.

However, the late approach of the Constitutional Court has mitigated to idea of the prevalence of international principles over national ones (Judgment No. 269 of 2017) and has considerably impacted the extent of the binding nature of ECtHR’s judgments for national judges (Judgment No. 49 of 2015). It is then possible that the Constitutional Court will stipulate that the Constitution prevails over those international obligations. In fact, should the Constitutional Court conclude that the absence of suitable alternatives actually precludes Italian authorities, in the light of the ECHR, from invoking the public policy clause, it is also possible that the constitutional judges will invoke the doctrine of the “counter-limits”, although that doctrine, as for now, has been invoked only in relation to customary international law and European Union law. In particular, it has been invoked by the Constitutional Court (Judgment No. 238 of 2014), with respect to the dispute between Italy and Germany which arose when the Italian Supreme Court ruled that Germany was not entitled to immunity from Italian jurisdiction in civil proceedings where the claimants pleaded redress for serious human rights violations perpetrated by the Third Reich in Italy during World War II. The Constitutional Court concluded that respect for international obligations of the State – namely, the customary rule on State immunity as well as the judgment of the International Court of Justice which had condemned Italy to uphold such rule – could not extent to the point of infringing the “supreme” principles enshrined in the Constitution.

In the present case, there is the possibility that the Constitutional Court will conclude that the prohibition of surrogacy arrangements actually implements fundamental constitutional principles that cannot be trumped by ECHR obligations. And given that treaty provision, by definition, must respect constitutional provisions, the Court could also come to the same conclusion without invoking the counter-limits doctrine.

Should the Constitutional Court reject, for that or other reasons, the referral, the First Chamber would be obliged to apply the current interpretation of the public order defence, as stipulated by the Joint Chambers. In this case, the couple might then apply to the ECtHR, seeking a declaration that Italy violated Article 8 ECHR.

In conclusion, while the First Chamber is trying to engage in a dialogue with the ECtHR and to uphold its findings in the Italian legal order, the case also prospects the possibility of a direct clash between the European Court of Human Rights and the Italian Constitutional Court, concerning a very sensitive and ethical issue. Given that it is quite unlikely that the Parliament would opt for a reform of the legislation to comply with the ECHR standards, the Constitutional judgement will decide whether Italy will be in a systemic and persistent situation of breaching the ECHR.

The new issue of the Revue Critique de Droit International Privé (3/2020) is out. It contains three articles and numerous case notes.

In the first article, Horatia Muir Watt (Sciences Po) addresses the challenges raised by the new Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, under a geopolitical perspective (Le droit international privé au service de la géopolitique : les enjeux de la nouvelle Convention de la Haye du 2 juillet 2019 sur la reconnaissance et l’exécution des jugements étrangers en matière civile ou commerciale)

The political stakes of the apparently innocuous legal regime governing the cross-border movement of judgments may be more complex and less rational than it might appear on reading the text of the new international convention, which has succeeded unexpectedly in coming into being twenty years after the failure of the previous great millennium project. The key to understanding these stakes lies in four different directions : the new place of the European Union at the negotiating table, exclusive of its Member States ; the awakening of China to the potential of private international law in terms of soft power to be wielded in support of the rebirth of the imperial Silk Route ; the post Brexit reintroduction of the markets of the Commonwealth into the wider game ; the weakening of the position of the United States in the era of “post-shame”. However, a further factor may be that the rules for the recognition and enforcement of foreign judgements are caught up in an additional race between competing models of international commercial dispute resolution.

In the second article, Dominique Foussard (Avocat au Conseil d’Etat et à la Cour de Cassation, French Bar) offers the opportunity to (re)discover the great figure of Jean-Jacques Gaspard Foelix (1791-1853) and its contribution to Private international Law (Le droit international privé de Foelix ou l’art périlleux de la transition, 1840-1847).

In the third article, Christiane Lenz (Rechtsanwältin, Qivive Avocats & Rechtsanwälte, German Bar) discusses the issue of provisional measures, pursuant article 35 of the Brussels I Regulation, in a Franco-German perspective (L’exploitation du rapport d’expertise français par le juge allemand : la toute-puissance de l’article 35 du règlement Bruxelles I bis).

Pursuant to Article 35 of Regulation 1215/2012, French Courts can order provisional measures according to Article 145 of the French Code of Civil Procedure despite a jurisdiction clause in favor of German courts if it is necessary to preserve evidence and if the means of evidence are located in France. French expert reports can be used in front of German Courts on the basis of the principle of substitution. In light of Article 35 of Regulation 1215/2012, Article 145 of the French Code of Civil Procedure must be interpreted in a way which does not require the application of the condition « before any legal process ». In addition, Article 35 of Regulation 1215/2012 may prevent the effects of Articles 29 and 31 (2) of Regulation 1215/2012 and the res iudicata effect.

It is worth noting that the editorial by Horatia Muir Watt (Sciences Po), Dominique Bureau (University of Paris II) and Sabine Corneloup (University of Paris II) will soon be available in English on Dalloz website (Slow savoir et transition périlleuse).

The full table of contents is available here.

On the occasion of the 70th birthday of Herbert Kronke, pupils, friends, companions and colleagues got together to honor him with this commemorative publication.

As director of the Institute for Foreign and International Private and Business Law at the University of Heidelberg, as Secretary General of UNIDROIT, as a member of the German Council for International Private Law, as a judge at the Iran-United States Claims Tribunal and as chairman of the German Institution for Arbitration, Prof. Kronke has contributed to the development of cross-border private law in a very special way, creating like no other brigdes among national, international and transnational law

The contents of the book reflect the diverse areas of Prof. Kronke’s academic activity: international private and procedural law as well as international law; comparative law; commercial arbitration and investor-state dispute resolution; foreign and German private and commercial law.

Click here to access the table of contents.

The Hague Lectures of Lauro Gama (Pontifical Catholic University of Rio de Janeiro) on the Unidroit Principles and the Law Governing International Commercial Contracts (Les principes UNIDROIT et la loi régissant les contrats de commerce international) were published in volume 406 of the Collected Course of the Hague Academy of International Law.

The book is written in French, but the author has kindly provided the following abstract in English:

This course outlines the challenges related to the application of the UPICC as the law governing international commercial contracts. It examines the UPICC both in the context of disputes submitted to State courts and arbitration, and how and why the UPICC differ from domestic law and international conventions in the role of governing law. It also analyses cases in which the UPICC apply as primary or subsidiary governing law. In addition, the course highlights the limits of the current rules of private international law to deal with the new kind of normativity represented by the UPICC. Traditional conflict rules tend to prevent both the choice and application of a non-state law such as the UPICC, as well as the concomitant use of multiple normative instruments as law applicable to the merits of a dispute. As a substantive non-state law in motion, a “work in progress” in permanent dialogue with domestic law and international conventions, the UPICC remains a challenge from the point of view of private international law.

The Supreme Administrative Court in Poland (Naczelny Sąd Administracyjny – NSA) issued on 10 September 2020 two judgments concerning the legal status in Poland of a child born by a surrogate mother in the US.

A US birth certificate indicated a Polish national as the father and also contained information that the child was born through surrogacy (without mentioning the surrogate mother’s name).

Two judgments were issued as a result of two separate administrative proceedings instituted by the father. One concerned the application for the transcription of the US birth certificate into Polish civil status registry. The other was resulted from the application for a confirmation that the child acquired Polish nationality by birth.

In both cases administrative authorities had rejected the requests based on grounds of public policy, stating that surrogacy arrangements are against fundamental principles of the legal order in Poland. One of these fundamental principles is that the mother is always a woman, who gave birth to the child, whereas paternity results from a scheme of legal presumptions. This argument is not new, as similar cases were dealt with before by administrative authorities and administrative courts.

This argument was also upheld by the NSA in the first judgement (signature: II OSK 1390/18) where it underlined that a foreign birth certificate, which does not indicate the mother, but only the father may not be transcribed into Polish civil status registry.

What shows a slight evolution in the Court’s attitude is the second judgment (signature: II OSK 3362/17), where the NSA stated that a foreign birth certificate is the only proof of an occurrence mentioned in it and its probative force may not be questioned in the course of an administrative proceeding concerning acquisition of the nationality. For a confirmation to be produced, it suffices that the foreign birth certificate indicates a Polish national as a parent.

Here it might be reminded that an opposite view of the NSA with respect to nationality of children born by a surrogate mother resulted in a claim filed to the European Court of Human Rights against Poland in 2015 (communicated in 2019 – see cases nos. 56846/15 and 56849/15: here).

The two commented cases show that in NSA’s view surrogacy arrangements are against public order in Poland, but at the same time the fact of being born by a surrogate mother should not impact the legal status in every respect and consequently quality of life of the child in Poland. In the first mentioned judgement, the NSA underlined that even without Polish birth certificate the child should be able to obtain a PESEL number (explained below), a national ID card and a passport. The practical question is whether the above is a wishful thinking of the NSA or this will happen in practice.

It must be explained that for an everyday life and functioning in Poland one should have a PESEL number (which name comes from the first letters of the Powszechny Elektroniczny System Ewidencji Ludności – the General Electronic System of Population Registration).

A PESEL must be provided when one applies for ID card, passport, files a tax return or wants to get a drug prescription. Similarly, a child’s PESEL must be indicated if parents/legal representatives apply for child’s ID card, want the child to be covered by the national social security system or want the child to go to a kindergarten. For children born in Poland (no matter if to Polish parents or foreigners) PESEL is issued in connection with the drafting of a birth certificate. If a Polish child is born abroad, the PESEL is issued in connection with the application for an ID card or a passport.

Hence, if a child does not have a Polish birth certificate or a foreign birth certificate which might be transcribed into Polish civil status registry (and additionally is not perceived as a Polish national), administrative authorities do not have an adequate legal basis for allocating a PESEL to the child and … everyday life might get complicated.

The judgments issued by the NSA are binding on the administrative authorities concerned and with respect to the particular cases at issue, but not on other authorities in other proceedings.

Hence, it remains to be seen whether a PESEL number and ID documents will be issued based on a foreign birth certificate as suggested by the NSA or whether another time-consuming proceeding will commence. As one can imagine the commented proceedings lasted for few years counting from the first application to the judgement of the NSA.

The information about the above two cases was published by Polish Ombudsman (Rzecznik Praw Obywatelskich) on its official website (see: here). The ombudsman joined both cases to support the applicant. Usually NSA’s judgements are published in the freely available official database once the justification part of the judgement is prepared (here). The justification is written after the judgement was issued. Hence, it is not yet available.

Tilman Imm has written a thesis on the mechanism of equivalence in Financial and Capital Markets Law (Der finanz- und kapitalmarktrechtliche Gleichwertigkeitsmechanismus – Zur Methode der Substitution in Theorie und Praxis).

The author has kindly provided the following summary:

The concept of equivalence or substituted compliance is of considerable importance in today’s financial and capital market law. This is a regulatory mechanism which, roughly speaking, works as follows: A rule provides for favourable legal consequences – such as the registration of a company for the provision of investment services – in the event that its object of regulation is already achieved in an equivalent manner by the regulations of another standard-setting body. Numerous implementations of this mechanism are to be found in the European Union’s regulations on third countries, which have recently gained considerable relevance against the backdrop of Brexit. So far, however, there has been a lack of clarity in practice and science about various aspects of equivalence.

This dissertation shows that the widespread equivalence rules are cases of legally provided substitution and demonstrates the practical consequences of this finding. For this purpose, first of all, the current state of knowledge in private international law regarding the instrument of substitution is examined. This includes the term, object and autonomy of substitution as well as its preconditions in order to define a conceptual understanding for the further course of the analysis. Especially the substitution requirement of equivalence is analysed more closely, which entails an examination of the criterion of functional equivalence and the occasional criticism of the requirement of equivalence.

The second part of the thesis turns to the equivalence mechanism in financial and capital market law. At the beginning, the so-called third country regime of European financial and capital market law is presented in an overview to illustrate to what extent and under which conditions third country companies can become active in this area of the internal market. This is followed by an analysis of the equivalence mechanism, which includes not only the history and functions of this regulatory technique, but also the determination of equivalence by the European Commission or national authorities. In this context, the main thesis of the treatise, namely that equivalence rules are cases of legally provided substitution, is reviewed and the widespread criticism of the mechanism is presented and acknowledged.

Finally, the third part of the dissertation features the exemption options for third-country companies within the framework of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) to show how the equivalence mechanism works in practice and to what extent its potential can be limited by regulatory deficits, starting with an analysis of the equivalence of US law in terms of Section 46 WpHG. This is followed by an examination of Section 91 WpHG, which has recently been added to the WpHG, and includes a critical examination of the status quo with regard to the equivalence requirement of this provision.

The author of this post is Carlos Santaló Goris, research fellow at the MPI Luxembourg and PhD candidate at the University of Luxembourg.

On 3 August 2020, a Polish notary referred a request for a preliminary ruling to the Court of Justice of the European Union (“CJEU”).

The facts are simple: a Ukrainian citizen living in Poland asked a Polish notary to draft her will. She wanted Ukrainian law to apply to the succession. The notary refused, arguing that the law applicable to the succession cannot be chosen under the 1992 Ukrainian-Polish bilateral treaty on civil and criminal matters.

The applicant complained against the refusal; she claimed that the Succession Regulation, which allows the de cujus to choose the law of her nationality to rule the succession (Article 22), should apply instead. According to Polish law, the complaint procedure is to be brought before a notary.

The CJEU is asked to interpret the Succession Regulation, as follows:

1. Must Article 22 of [the Succession Regulation] also be interpreted as meaning that a person who is not a citizen of the Union is also entitled to choose his maternal law as the law applicable to the succession as a whole?
2. Is Article 75 in conjunction with Article 22 of [the Succession Regulation] to be interpreted as meaning that, where a bilateral convention binding a Member State to a non-member country does not govern the choice of law on succession but designates the law applicable in matters of succession, a national of that non-member country who resides in a Member State bound by that bilateral agreement may choose the law?
3. In particular: must a bilateral agreement with a non-member State expressly preclude the choice of a particular law, and not only the status of succession by means of objective criteria, in order for its provisions to prevail over Article 22 of [the Succession Regulation]? does the freedom to choose the succession law and to standardize the applicable law by choosing the law — at least to the extent defined by the EU legislature in Article 22 of [the Succession Regulation] — fall within the principles underlying judicial cooperation in civil and commercial matters within the European Union and cannot be affected even in the event of the application of bilateral conventions with third countries which prevail over Regulation No 650/2012?

In my view, the CJEU will not struggle to provide an answer to the first question of the request. The Succession Regulation applies to the wills drafted by authorities of the Member States; Article 20 declares its “universal application”; Article 22 does not make any difference between “States” and “Member State”; like EU nationals, third-State citizens can choose their national law.

The second question is trickier. It starts with the interpretation of the last sentence of Article 75(1) of the Regulation (“this Regulation shall not affect the application of international conventions to which one or more Member States are party at the time of adoption of this Regulation and which concern matters covered by this Regulation”). Since the bilateral convention has no provision on the choice of law in relation to successions, it could be argued that this particular aspect is not foreseen, hence the Succession Regulation applies.

However, the convention does rule on the law applicable to movable and immovable estate, just like the Regulation, and therefore it should prevail. Should this be the case, the second part of the question would come into play. The CJEU is asked here to produce a declaration on values, likely to end up with the need to strike a balance – or not, for there is no doubt the negotiators knew about the contents of the conventions Article 75 intends to preserve, and about the fact that choice of law is not a widely accepted rule in succession matters. Should the principle of choice of law always prevail, Article 75 would be deprived of much of its sense.

Rather than the actual questions of the preliminary reference, what is more intriguing is whether Polish notaries deciding on complaints against the refusal to carry out a notarial act can address themselves directly to the CJEU via the preliminary reference. According to Article 267 of the TFEU, only courts can make preliminary references. In C-658/17, W.B., the CJEU determined that Polish notaries issuing a certificate of succession are not “courts” for the purpose of the Succession Regulation. Nonetheless, whether a notary reviewing a decision taken by another notary fits with the Article 267 of the TFEU is something different.

With a view to provide an autonomous notion, the CJEU has elaborated a list of prerequisites a domestic authority needs to comply with to be considered a court under Article 267: the body under examination must have been established by law, be permanent, have compulsory jurisdiction, adjudicate in an inter partes procedure, apply the rules of law, and be independent (C-54/96, Dorsch Consult, para. 23).

The analysis of the admissibility of the preliminary reference, focused on whether a notary fulfils the conditions just mentioned, will surely be the first step of the CJEU in the case at hand. In this regard, it is worth mentioning that the Polish Supreme Court and the Polish Constitutional Court have already explored whether, under Polish law, notaries acting in complaint procedures like the one at stake have the status of courts, and concluded that they may be considered first instance courts, performing ancillary functions of the administration of justice.

At any rate, the CJEU is not bound by the determinations of the national courts. It will decide on the basis of its own findings. And it will do so at a moment when the whole Polish judicial system is under suspicion (see C 354/20 PPU, and soon, C-412/20 PPU,  both widely reported in the press), and the future of judicial cooperation, also in civil matters, is an issue of legitimate concern.

An online event titled Coordinating Brussels Ia with other Instruments of EU Law: A Roundtable on Theoretical and Practical Issues will take place on 24 September 2020, at 3 pm (CET).

The purpose of the event, organised by the Universities of Genoa, Nice, Valencia, and Tirana, is to present the first results of the investigation conducted under the EU co-funded research project En2Bria – Enhancing Enforcement under Brussels Ia, which aims to shed light on the terms whereby the relationship between the Brussels I bis Regulation and other EU law instruments is to be handled.

The conference will be chaired by Chiara E. Tuo (Univ. Genoa). Speakers include Jean-Sylvestre Bergé (Univ. Nice), Guillermo Palao Moreno (Univ. Valencia), Giulio Cesare Giorgini (Univ. Nice), Rosario Espinosa Calabuig (Univ. Valencia), Rosa Lapiedra Alcami (Univ. Valencia), Isabel Reig Fabado (Univ. Valencia), and Stefano Dominelli (Univ. Genoa).

See here for further information.

Those interested in attending the conference are invited to write an e-mail to Stefano Dominelli at stefano.dominelli@unige.it.

The author of this post is Omar Vanin. He earned a Phd in Private International Law from the University of Padova and is now in private practice.

On 7 August 2020, the Italian Supreme Court (Corte di Cassazione) ruled on the non-recognition of a judgment whereby a Palestinian religious court had acknowledged the severance of the matrimonial ties between a muslim couple, on the ground that the judgment offended the public policy of Italy (the ruling is numbered as follows: No 16804/20; the text has not yet been officially published by the Court, but it’s available here through the website Cassazione.net).

Proceedings were brought by a woman of Italian and Jordanian nationality against the recording in Italy of a judgment rendered, on an application by her husband, by the Sharia court of Western Nablus (West Bank). The husband had repudiated the woman in accordance with Islamic law, and the Sharia court, taking note of the repudiation (talaq), had certified that the couple had ceased to be bound by marriage.

The woman argued that the judgment was at odds with the public policy of Italy. She submitted, first, that Islamic law, as applied in the West Bank, failed to provide equal rights to the spouses in relation to divorce, and, secondly, that the she was not given an opportunity to present her case in the proceedings which resulted in the judicial declaration.

The man, for his part, claimed that talaq merely constituted a process of revocable separation, and that the judgment was passed after an unsuccessful attempt by the Sharia court to reconcile the couple.

Islamic law sees marriage as a contract. Talaq is one of the grounds on which marriage may be terminated.

The traditional view is that only the husband is entitled to have the marital ties severed by means of repudiation.

Developments have occurred in this area in several Islamic jurisdictions. In some of them, the wife may seek to have the marriage terminated through a declaration by the competent (religious) authority, based on a breach of the husband’s obligations towards her.

Concurrently, marriage termination is losing its ‘contractual’ features, and rather represents, in some jurisdictions, the outcome of a judicial procedure.

Against this backdrop, a case-by-case analysis may prove necessary to assess whether, in the circumstances, the authorities involved merely attested a unilateral termination prompted by the husband or rather declared such termination based on their own independent assessment.

The Cassazione held that, in the case at issue, the basic procedural rights of the wife had been violated. Indeed, the woman did not take part in the proceedings instituted by her husband before the Sharia court, in the framework of which he irrevocably repudiated his wife.

In fact, the woman was notified of the procedure after the judgment was given, and only to enable the court to ascertain that no reconciliation had occurred in the three months following the decision.

In addition, the Cassazione ruled that the judgment was also incompatible with the substantive public policy of Italy, since talaq could only be exercised by the male spouse, thus violating the principle of equality of rights between husband and wife enshrined both in the Italian Constitution and in various international instruments in force for Italy, such as Protocol No. 7 to the European Convention on Human Rights.

By the described ruling, the Cassazione took a stance on a topic that lower courts in Italy have been discussing for several years. Prior to this judgment, the Court itself had relatively few opportunities to address the matter, the latest of which dates back to 1983.

The conclusion reached by the Supreme Court, namely that traditional talaq is inconsistent with public policy, accords with the Court’s own precedents and with most lower courts’ judgments. In fact, the reasoning of the Cassazione echoes, to a large extent, the reasoning of several among such lower courts.

In various respects, the views expressed by the Cassazione are in line with those expressed, often in a more nuanced way, in other European countries.

In 2014, for instance, the French Cour de Cassation denied the recognition of an Algerian judgment acknowledging the unilateral repudiation of an Algerian wife by an Algerian husband on the ground that it contravened the principe whereby the spouses enjoy equal rights as regards the termination of marriage.

The Cour de Cassation had previously granted effect to judgments rendered as a result of talaq, through the doctrine of ‘mitigated’ public policy. The latter doctrine posits that, in appropriate circumstances, foreign judgments offending as such public policy may nevertheless be granted recognition to the extent to which their authority is merely invoked as a basis for a different claim, one that is not, per se, inconsistent with public policy (e.g., a claim for spousal support based on the termination of marriage through talaq).

Eventually, the Cour de Cassation abandoned this line of thought in 2004, stressing the radical incompatibility of talaq with a paramount principle of the French legal system such as gender equality.

The question remains debated in France, among scholars, of whether a milder solution ought to be adopted where to deny recognitin would preclude the wife from enjoying some important benefits (see in general, among recent contributions available on the web, this paper by Yann Heyraud).

Note, incidentally, that the concept of ordre public atténué is not necessarily followed everywhere. The Italian Supreme Court, for example, has never explicitly endorsed the doctrine of attenuated effects in respect of talaq or other legal institutions.

Greek courts, for their part, have expressed the view that talaq judgments ought to be denied recognition on grounds of public policy. Recently, however, lower courts admitted the recognition of of such judgments in cases where an application to that effect was lodged by the wife herself (see further the chronicle and remarks by Apostolos Anthimos here).

The position taken by the Italian Supreme could hardly be criticised in itself. The Court’s reasoning, however, is unpersuasive in at least two passages.

To begin with, the Cassazione failed to take a clear stance on the nature of talaq in a situation where a foreign judicial authority is involved in the process. Arguably, the issue has repercussions on the methods through which the severance of matrimonial ties may be given effect in Italy. If the severance of those is understood to be produced by a judicial decision (i.e., one based on an assessment by the authority in question, following the husband’s declaration), its effectiveness in Italy depends on whether the conditions for the recognition of such a foreign decision are met in the circumstances. Instead, if talaq is labelled as a contractual act (i.e., as a declaration of the husband that the competent judicial authority is merely required to attest, e.g., for publicity reasons), then its effects in Italy would depend on whether the act in question was performed in accordance with the law specified under the pertinent Italian conflict-of-laws rules. Of course, public policy may prevent a talaq from producing effects in Italy in both scenarios, but the question remains of whether the issue of its should be addressed against the background of the rules on the recognition of judgments rather than those on the conflicts of laws. In some cases, the conditions required under the applicable rules may not be fulfilled, which would make any inquire into public policy useless.

In the case at issue, the Cassazione observed that the Sharia court of Western Nablus simply took note of the repudiation, without carrying out, properly speaking, any assessment. The Court, however, failed to elaborate on the implications of such a characterisation for the identification of the relevant methods and rules of private international law, and in fact contented itself with noting that the decision ought to be denied recognition on grounds of public policy.

The second questionable passage in the Supreme Court’s ruling is a general remark whereby a foreign judgment declaring the severance of matrimonial ties ought to be denied recognition on grounds of public policy unless such a judgment is based on, or at least implies, a finding that the bond of affection between the spouses has irretrievably come to an end.

Doubts may be raised as to the pertinence of the latter requirement. As a matter of fact, even Italian courts do not inquire into the reasons why the spouses may be seeking divorce, when pronouncing the dissolution of marriage under Italian law.