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The readers of this blog are already aware that the University of Bonn plans to host a two-day conference on the Hague Convention of 2 July 2019 on the recognition and enforcement of judgments in civil and commercial matters, in cooperation with the Permanent Bureau of the Hague Conference on Private International Law. The event, which was expected to take place on 9 and 10 September 2022, has now been rescheduled and will eventually take place on 9 and 10 June 2023.

As explained by the organisers, the new date will likely be closer to the likely date of accession of the European Union to the Convention. Actually, on 23 June 2022, the European Parliament, based on a report by the JURI Committee, gave its consent to the accession.

The list of speakers of the Bonn conference includes scholars and practitioners, as well as representatives of UNCITRAL and the European Commission.

More information available here.

Si le transporteur aérien est tenu d’assurer le réacheminement d’un étranger non admis en France, le comportement de ce dernier rendant ainsi impossible son réacheminement constitue une circonstance exonératoire.

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La France préside le Conseil de l’Union européenne pour six mois. À cette occasion, la Délégation des barreaux de France et Lefebvre Dalloz s’associent pour vous proposer ce podcast dont la vocation est de sensibiliser sur les travaux et les actions conduites dans le domaine de la justice au plan européen.

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by Ilija Rumenov Assistant Professor at Ss. Cyril and Methodius University, Skopje, Macedonia

The Regional Forum “HCCH 2019 Judgments Convention: Prospects for the Western Balkans” will take place on 30th of June and 1st of July in Skopje, North Macedonia. This event is co-organized by the “Balkans Enforcement Strengthening Project (BESP)” funded by the Dutch Ministry of Foreign Affairs and implemented by the Center for International Legal Cooperation (CILC) and the project “Legal Reform for Economic Development in the Western Balkans” financed by the German Federal Ministry for Economic Development and Cooperation (BMZ) and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). The event is organized in cooperation with the Hague Conference on Private International Law (HCCH) and the International Union of Judicial Officers (UIHJ).

The aim of the Regional Forum is to exchange and debate on the prospects and benefits of the HCCH 2019 Judgments Convention for the Western Balkans in the presence of representatives from the Ministries of Justice, Ministries of Foreign Affairs, Judicial Training Institutions, Chambers of Enforcement Agents, and legal experts. The forum is structured in six thematic sessions with contributions from different stakeholders.

The Regional Forum will be officially opened by Dr. Nikola Tupancheski, Minister of Justice of the Republic of North Macedonia, Dr. Christophe Bernasconi, Secretary General at The Hague Conference of Private International Law (HCCH) and Mr. Jos Uitdehaag, Vice-President of the International Union of Judicial Officers (UIHJ).

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

(These abstracts can also be found at the IPRax-website under the following link: https://www.iprax.de/en/contents/)

 

R. Wolfram: Achmea – neglecting of international public law – some afterthoughts

This contribution is not meant to assess the Achmea judgment of the European Court of Justice. It intends instead to throw some light on the rules of public international law on the termination of international treaties, which have not fully been taken into account by those who attempted to implement the Achmea judgment. At the core of is the question whether the incompatibility of a treaty under international law with another international law treaty leads to the automatic non-applicability of the former. The contribution concludes this is not generally the case under the Vienna Convention on the Law of Treaties.

 

P. Schlosser: Jurisdiction Agreements and other Agreements integrally Covered by European Law

1. Certain contracts are particularly close to the law of the European Union. They include international jurisdiction agreements, contracts creating an exception in European law, to generally prohibited contracts, and contracts providing the use of European Trademarks and other European rights valid even against third persons.
2. The fundamental proposal of the author is, that the legal effects of the violation of rights, provided by such contracts, must be found in European, rather than in national law. That law is particularly concerned about its effectiveness, if needed by a creative approach.
3. In German law the legal consequences of such a violation must include, inspired by French law, an indemnification of a lost chance and a more liberal approach to moral (immaterial) damage.

 

S. Schwemmer: A conflict of laws doctrine for the transfer of bitcoin, crypto securities and other crypto assets

Cryptoassets like Bitcoin are entries in a distributed ledger. As such, they do not fall within any of the traditional categories of property. However, most jurisdictions are slowly working their way to recognize them as property. Even German law now allows for tokenized bearer bonds and defines special transfer requirements. On the level of conflict of laws, this results in a growing need to define the applicable law relating to the assignment of cryptoassets. These questions are not regulated by the written general conflict of laws rules under German law. While § 32 eWpG now provides a special conflict of laws rule for electronic securities, there is still a regulatory gap for other types of tokens. The article discusses possible solutions for the different types of cryptoassets.

 

B. Heiderhoff/E. Yalcin: International jurisdiction in cases, where services are provided in several Member States

The determination of international jurisdiction under Article 7(1)(b), second indent, of the Brussels Ia Regulation is highly difficult in cases where services are provided in different Member States. The decision of the OLG München (Higher Regional Court of Munich) regarding a brokerage contract shows that it is not always possible to determine the place of main performance. This article discusses if, in such cases, the place where the service provider is domiciled should be considered as the place of performance. The authors conclude that this approach only fits if at least a part of the service was provided at the service provider’s domicile.

 

W. Hau: International jurisdiction based on nationality in European family law

For almost a quarter of a century, there has been an intensive debate on whether the European legislator is allowed to open international jurisdiction in matrimonial matters for nationals of the forum state earlier than for nationals of other Member States. Now the CJEU has taken the view that such a rule is in line with the prohibition of discrimination provided for in Article 18 TFEU. The reasoning given for this is not particularly profound and leaves some questions unanswered, but it may at least contribute to a welcome reassurance in the area of European family law, in which very deep differences between the legal policy positions of the Member States have become apparent in recent years.

 

C. González Beilfuss: Forum non conveniens in a European way: a failed dialogue

In the decision commented on here, the CJEU decided for the first time on the interaction of Article 6(a) and Article 7(a) of the Succession Regulation and emphasized the binding effect of the decision to decline jurisdiction for the court later seized. The second court is not permitted to review the decision to decline jurisdiction by the first court. This article analyzes the decision in particular with regard to the lack of communication between the courts, which would have facilitated the smooth interplay between both jurisdiction rules.

 

B. Hess: Exequatur sur exequatur vaut? The CJEU enlarges the free movement of decisions coming from third states under the Brussels Ibis Regulation

In the judgment C-568/20, the CJEU held that a decision of a court of an EU Member State which merges a judgment of a third state is enforceable under Articles 39 ss of the Brussels Ibis Regulation. The Third Chamber argued that the concept of “judgment” in Articles 2(a) and 39 of the Brussels Ibis Regulation refers to the different procedural laws of EU Member States. Burkhard Hess criticizes this deviation from the uniform and autonomous interpretation of the Brussels Ibis Regulation. The solution of the Third Chamber is not compatible with the principle “exequatur sur exequatur ne vaut”.

 

C. Thole: The law applicable to voidable payments by third parties under Article 16 EIR

In its judgment of 22 April 2021 the ECJ decided that Article 16 EIR must be interpreted as meaning that the law applicable to the contract also governs the payment made by a third party in performance of a contracting party’s contractual payment obligation, where, in insolvency proceedings, that payment is challenged as an act detrimental to all the creditors. The following article explains the decision and its consequences for cross-border avoidance claims.

 

D. Wiedemann: Lex successionis or lex fori: on the classification of judicial measures in the event of uncertain inheritance relationships

The decision concerns a classical question of classification: the delimitation of succession law from procedural law. The classification of judicial measures in the event of uncertain inheritance relationships, e.g. the appointment of a curator, decides whether such measures are to be assessed according to the procedural law of the lex fori or according to the lex successionis. That a classification is not predetermined can be inferred from different locations: While Germany regulates judicial measures regarding uncertain inheritance relationships in its substantive law (Sections 1960–1962 German Civil Code), other EU Member States and Brazil mainly address this problem in their procedural laws. In the EU, the Succession Regulation No. 650/2012 defines the boundary between succession law and procedure. It will be argued that measures only securing the estate are to be classified as procedural aspects. Measures that also involve the administration of the estate are governed by the Regulation’s choice of law rules.

 

R. de Barros Fritz: The characterization of gifts causa mortis under the ESR

One of the most debated questions since the enactment of the ESR has been the question of the proper characterization of gifts causa mortis. The UM case presented the first opportunity for the CJEU to address this issue. The following case note will discuss the court’s decision and show that, even after the court’s ruling, many open questions remain as to the characterization of gifts causa mortis.

 

C. Thomale: Circumventing Member State co-determination rules with the Societas Europaea

Since its introduction, the supranational legal form of the SE, provided by EU law, has been widely used to circumvent national co-determination law. The case note dicusses two German decisions, which highlight the specific arbitrage potential lying in the national component of the company law and co-determination law of the SE as well as in its autonomous co-determination rules.

 

D. Looschelders: Characterization of German joint wills under the EU Succession Regulation – the Austrian perspective

Whether the binding effects of a joint will underlie German or Austrian law is of great practical importance when successions are connected to both jurisdictions. While under German law the revocation right of an interrelated disposition lapses upon death of the other spouse, Austrian law enables the surviving spouse to revoke his interrelated disposition even after death of the other spouse. Against this background, the subsequently discussed ruling by the Austrian Supreme Court (OGH) deals with the crucial question regarding the connecting factor for binding effects, namely whether joint wills under German law have to be characterized as “dispositions of property upon death other than agreements as to succession” (Article 24 EU Succession Reg.) or as “agreements as to succession” (Article 25 EU Succession Reg.). The OGH declared itself in favour of applying Article 25 EU Succession Regulation.

 

F. Eichel: International enforcement of judgments subject to a condition – exequatur proceedings and international jurisdiction

The article deals with the international enforcement of judgments which are subject to a condition. Against the background of the exequatur proceedings, it sheds light on the question in which proceedings and in which state it is examined whether the condition has occurred. German, Austrian and Swiss procedural law is taken into account. Furthermore, the article examines the scope of the enforcement jurisdiction (Article 24(5) Brussels Ibis Regulation/Article 22(5) Lugano Convention) for these kinds of proceedings and agrees with the decision of the Austrian Supreme Court (OGH, 7.6.2017 – 3 Ob 89/17k). The OGH held that the Austrian claim to examine the occurence of the condition falls within the scope of the enforcement jurisdiction. However, the article criticises that the OGH did not take into account the limited res iudicata-effect of the Austrian claim which should be decisive in determining whether the enforcement jurisdiction is applicable or not.

 

A. Kirchhefer-Lauber: On the interreligious division of law and the significance of the culture-bound nature of law – illustrated by the Lebanese distinction between constitutive religious marriages and civil registration acts

Private law systems with an interpersonal division of law always pose special challenges for conflict of laws. The article deals with the interplay between autonomous German IPR and the internal conflict of laws of a multi-jurisdictional state using the example of Lebanon, which is home to a total of 18 partial religious legal systems in addition to a “civil legal system”. The author analyses, among other things, court decisions in which the distinction between constitutive religious marriage and civil documentation of marriage in Lebanon plays a central role. She also addresses the fact that the possibility of an ordre public violation in legal systems with a division of laws exists on two levels. Firstly, regarding the internal conflict of laws of the multi-jurisdictional state itself and secondly, with regard to the results through the application of a partial legal system. Finally, she highlights that the interpretative method of comparative law between civil and religious partial legal orders requires a special awareness of the importance of the culture-bound nature of law.

 

Material:

Recommendation of the European Group for Private International Law (GEDIP/EGPIL) to the European Commission concerning the Private international law aspects of the future Instrument of the European Union on [Corporate Due Diligence and Corporate Accountability]

 

The law applicable to rights in rem in tangible assets – GEDIP – document adopted at the virtual meeting 2021

 

Notifications:

H. Kronke: Ulrich Drobnig (1928–2022)

 

M. Petersen Weiner/M.L. Tran: The Private Side of Transforming our World – UN Sustainable Development Goals 2030 and the Role of Private International Law – Conference, September 9-11th, 2021 in Hamburg

 

C. Kohler: Private international law aspects of Corporate Social Responsibility – Conference of the European Group for Private International Law (GEDIP/EGPIL) 2021

 

 

On Tuesday, July 5, 2022, the Hamburg Max Planck Institute will host its 24th monthly virtual workshop Current Research in Private International Law at 11:00-12:30 (CEST). Univ.-Prof. Mag. Dr. Brigitta Lurger (University of Graz) will speak, in German, about the topic

 

International law enforcement in social networks

The presentation will be followed by open discussion. All are welcome. More information and sign-up here.

If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.

The new website of the Rivista di diritto internazionale privato e processuale (RDIPP) has just been launched and is available at rdipp.unimi.it.

Giving access to the complete collection of the journal’s Indexes (available both in Italian and in English), a set of useful databases to browse the journal’s content, and the Table of Content of the volumes published in the Book Series Studi e pubblicazioni della Rivista di diritto internazionale privato e processuale, this new online resource is designed to disseminate the wealth of knowledge accrued with more than fifty years of Italian and European scholarship and case-law in the field of private international and procedural law.

A weekly newsletter is expected to be launched in the upcoming months to keep our community updated on the latest developments in this area of the law. You can already subscribe to it in the RDIPP network section of the website.

From the Directors and the Editorial Board of RDIPP, a very warm welcome to our pages!

The RDIPP team

With thanks to Professor Francesca C. Villata for the tip-off.

 

A new member has joined the editorial team of the EAPIL blog: Erik Sinander.

Erik is a senior lecturer in private international law at the Stockholm University. Being specialized also in labour law, he hopes to contribute to the blog with posts about e.g. private international labour law as well as general developments in the field of private international law from the Nordic countries.

His first post has just been published.

Welcome, Erik!

The Swedish Supreme Court held in a decision of 8 April 2022 (case Ö 4651-21) that a defendant domiciled in Denmark can be ordered to produce documents to a Swedish court without assistance or allowance from Danish authorities.

The issue arose in the framework of proceedings for maintenance brought by a daughter in Sweden against her father, based in Denmark. The former asked the court to order that the latter produce such Danish annual tax assessment notices he could access through the Danish tax authority’s web page. When the father refused to produce the notices in question, the district court declined the subpoena on producing documents and ruled on the matter. The court of appeal changed the district court’s decision and held that the father should produce the documents. Against this background, the Swedish Supreme Court granted a review permit for the issue regarding the production of digital documents when the defendant is domiciled abroad.

The Supreme Court explained that, on the basis of sovereignty, the starting point is that a court can only take evidence abroad if the foreign state has approved for it. Hence, a Swedish court is limited to the taking of evidence that can be made in Sweden. In international situations, a Swedish court can ask foreign authorities for assistance in the taking of evidence abroad. Sweden is bound both by the 1970 Hague Evidence Convention and by the 1974 Nordic Evidence Convention. In addition to these conventions, there is also Regulation 1206/2001 on cooperation between the courts of the Member States (except Denmark) in the taking of evidence in civil or commercial matter, which will be replaced by Regulation 2020/1783. According to the Swedish Supreme Court, it is not necessary to apply the international conventions or the EU regulation when the production of documents concern documents available online.

Pursuant to Swedish procedural law, a party possessing a document that supposedly may have importance as evidence must produce the document to the court. The obligation to produce a document is, according to the preparatory works, intended to be of the same extent as the obligation to testify orally before the court. In assessing whether the Danish father could be considered to have possession of the tax assessment notices, the Supreme Court stated that possession for the taking of evidence should be interpreted broadly. In addition to referring to Swedish literature on the procedural code, the Swedish Supreme Court also referred to the requirement for possession as stated in Article 3 of the International Bar Association’s Rules on the Taking of Evidence in International Arbitration (2020) for a broad interpretation of the possession requirement for taking of evidence. The Swedish Supreme Court held that the possession requirement is met for digital documents stored on the internet when a person has an unconditional access to the document.

Even if the order to produce documents available online in fact is extraterritorial, the extraterritorial effect is not judicial, the Supreme Court continued. Therefore, it is irrelevant where the digital information is stored. If the person ordered to produce documents is domiciled abroad and the document is stored abroad, the legal possibility for the Swedish court is limited. Still, in such situations a Swedish court may order someone to produce documents under penalty of a fine just like in domestic situations unless the order forces the obliged person to act contrary to the laws of another country.

With Case C?265/21, the CJEU is bound to add another chapter to the never-ending story of accurately describing the scope of the head of special jurisdiction for contracts in what is today Art. 7(1) Brussels Ia. The Opinion by AG Szpunar, which was published last week, might give readers an indication of what to expect.

The case arises out of an action for a declaration that the claimants are the owners of 20 works of art, which are currently in their possession. While the claimants argue that they have bought the pieces from their (step)mother, who had bought them from their two creators (the parents of the defendant), the defendant, a German domiciliary, claims that her parents had only temporarily stored the works in the gallery of the claimants’ (step)mother in Liège, Belgium. The case was dismissed in the first instance for lack of international jurisdiction as the Belgian court found itself unable to establish a contractual connection linking the claimants to the defendant.

On the claimants’ appeal, who argue that the claim should nonetheless be qualified as contractual in light of the two sales contracts (between the defendant’s parents and the claimants’ (step)mother and between their (step)mother and themselves), with both relevant places of performance being located in Belgium, the Cour d’appel de Bruxelles referred the following questions to the CJEU:

1. Must the concept of ‘matters relating to a contract’, within the meaning of Article 5(1) of Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘the Brussels I Regulation’):

a. be interpreted as requiring the establishment of a legal obligation freely assumed by one person towards another, which forms the basis of the applicant’s action, and is that the position even if the obligation was not freely assumed by the defendant and/or towards the applicant?

b. If the answer is in the affirmative, what must the degree of connection between the legal obligation freely assumed and the applicant and/or the defendant be?

2. Does the concept of ‘action’ on which the applicant ‘relies’, like the criterion used to distinguish whether an action comes under the concept of matters relating to a contract, within the meaning of Article 5(1) of the Brussels I Regulation, or under ‘matters relating to tort, delict or quasi-delict’, within the meaning of Article 5(3) of that regulation (C-59/19, paragraph 32), entail verification of whether the interpretation of the legal obligation freely assumed seems to be indispensable for the purpose of assessing the basis of the action?

3. Does the legal action whereby an applicant seeks a declaration that he or she is the owner of an asset in his or her possession in reliance on a double contract of sale, the first entered into by the original joint owner of that asset (the spouse of the defendant, who is also an original joint owner) with the person who sold the asset to the applicant, and the second between the latter two parties, come within the concept of matters relating to a contract within the meaning of Article 5(1) of the Brussels I Regulation?

a. Is the answer different if the defendant relies on the fact that the first contract was not a contract of sale but a contract of deposit?

b. If one of those situations comes within the concept of matters relating to a contract, which contract must be taken into consideration for the purpose of determining the place of the obligation which serves as the basis of the claim?

4. Must Article 4 of Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) be interpreted as applying to the situation referred to by the third question referred for a preliminary ruling and, if so, which contract must be taken into consideration?

After quickly dismissing the fourth question (which the Cour d’appel might indeed have referred somewhat prematurely at this stage), the Opinion (which is not available in English), starts with a comprehensive review of the Court’s case law on the interpretation of what is now Art. 7(1) Brussels Ia. It culminates in the following summary (references ommitted; own emphasis):

65. Eu égard aux considérations qui précédent, il y a lieu de constater, en premier lieu, que la jurisprudence de la Cour relative à l’interprétation de la notion de « matière contractuelle », au sens de l’article 5, point 1, du règlement nº 44/2001, ne saurait être considérée comme uniforme, ce qui
explique les difficultés rencontrées par les juridictions nationales pour déterminer, encore aujourd’hui, si les litiges relèvent ou non de cette matière.

66. En effet, initialement, la Cour s’est orientée vers une interprétation restrictive de la notion de « matière contractuelle », en considérant que seuls les litiges trouvant leur origine dans un contrat entre les parties au litige relevaient de cette matière. Dans le cadre de cette interprétation, la Cour s’est référée, essentiellement, à l’objectif de prévisibilité et de sécurité juridique de la convention de Bruxelles ou du règlement nº 44/2001.

67. La Cour s’est ensuite orientée vers une interprétation plus large de la notion de « matière contractuelle », en considérant qu’un litige relève de cette notion lorsque le demandeur fonde l’action qu’il dirige contre le défendeur sur une obligation juridique librement consentie par une personne envers une autre. C’est dans l’arrêt Engler que la Cour a, pour la première fois, indiqué clairement qu’elle n’interprète « pas [l’article 5, point 1, du règlement nº 44/2001] de manière étroite ». C’est ensuite dans les arrêts Kareda et flightright, confirmés dans la jurisprudence ultérieure, qu’elle a abandonné définitivement l’interprétation restrictive de cette disposition fondée sur l’approche « personnaliste » de la matière contractuelle, issue de l’arrêt Handte, pour adopter une interprétation plus large.

68. En second lieu, il ressort de cette interprétation plus large que l’action d’un demandeur, même introduite contre un tiers, doit être qualifiée de « contractuelle », au sens de l’article 5, point 1, du règlement no 44/2001, dès lors qu’elle se fonde sur une obligation juridique consentie par une personne à l’égard d’une autre. Par conséquent, la circonstance que, en l’espèce, les deux parties au litige ne sont pas directement liées par un contrat ne saurait remettre en cause la qualification de cette action comme relevant de la « matière contractuelle ». En effet, seul importe le fait que l’obligation juridique dont se prévalent les requérants au principal soit née d’un contrat, entendu comme un accord entre deux personnes, ou d’une relation juridique qui peut être assimilée à un contrat dans la mesure où elle crée des « liens étroits de même type que ceux qui s’établissent entre les parties à un contrat ».

69. Dans le cadre de cette interprétation plus large, il ressort des arrêts Kareda et flightright que la Cour s’est référée non seulement à l’objectif de prévisibilité et de sécurité juridique mais également à celui de proximité et de bonne administration de la justice.

70. Ainsi, lorsque l’obligation contractuelle sur laquelle est fondée l’action du demandeur a été identifiée, il y a lieu de déterminer s’il existe un lien de rattachement particulièrement étroit entre la demande et la juridiction qui peut être appelée à en connaître, ou si l’application de l’article 5, point 1, du règlement nº 44/2001 permet de faciliter la bonne administration de la justice. À mon sens, il y a donc lieu de veiller au respect de l’équilibre entre l’objectif de prévisibilité et de sécurité juridique et celui de proximité et de bonne administration de la justice de ce règlement.

…

75. Eu égard aux considérations qui précèdent, je propose de répondre à la première question préjudicielle que l’article 5, point 1, du règlement nº 44/2001 doit être interprété en ce sens que son application présuppose la détermination d’une obligation juridique librement consentie par une personne à l’égard d’une autre et sur laquelle se fonde l’action du demandeur, même lorsque cette obligation ne lie pas directement les parties au litige. Dans l’interprétation de cette disposition, la juridiction nationale doit veiller au respect de l’équilibre entre l’objectif de prévisibilité et de sécurité juridique et celui de proximité et de bonne administration de la justice.

On this basis, AG Szpunar proceeds to point out, in response to the second question (which he reformulates for that purpose), that nothing in the Court’s decision in Wikingerhof requires the national court to examine the contractual obligation in question or the content of the contract (paras. 76–80).

As to the third question, AG Szpunar reiterates that he understands the claim to be contractual in nature as it is ultimately based on an obligation freely entered into, even though the particular contract does not bind the two parties to the dispute (para. 83). Out of the two contracts, the AG deems the first one (the contract between the defendant’s parents and the claimants’ (step)mother) to be decisive for jurisdictional purposes “la source originale des droits et obligations litigieux.” (para. 84).

 

The first issue of the Rivista di diritto internazionale privato e processuale of 2022 is out. It features two essays and two shorter papers.

Stefania Bariatti, Sul riconoscimento in Italia dei restructuring plans inglesi (On the Recognition in Italy of English Restructuring Plans)

An English court order sanctioning a restructuring plan is likely to be recognized by an Italian court as a judgment in civil and commercial matters or in insolvency matters both under the 1964 convention between Italy and the United Kingdom for the reciprocal recognition and enforcement of judgments in civil and commercial matters and under Law No 218/1995, since all the relevant requirements envisaged therein appear to be met. Indeed, (i) the requirement that the English court is vested with indirect jurisdiction is satisfied when the debtor’s COMI is located in England and (ii) restructuring plans do not appear to be contrary to Italian public policy, since the effects of the restructuring plan procedure, the procedural aspects and the substance of the provision envisaged in Part 26A of the Companies Act 2006 are common to the concordato preventivo procedure and the accordi di ristrutturazione del debito procedure that Italian Bankruptcy Law provides for companies encountering financial difficulties.

Sara Tonolo, Criticità e incertezze derivanti dall’applicazione del rinvio di qualificazione (Qualifikationsverweisung) (Critical Issues and Doubts in the Application of the Two-Fold Characterisation Theory (Qualifikationsverweisung))

In the context of academic literature on renvoi, and its various functions, for a century now a special role has been attributed in many legal systems to the Qualifikationsverweinsung (Renvoi de qualification). The relevance of this mechanism, founded on the complete reconstruction of the content of foreign private international law, has now been investigated by the Italian Supreme Court as an instrument for coordination within contemporary private international law. In the absence of any rules concerning characterization under Italian Law No. 218/1995, the original process of characterization by the court seised, which is referred to as primary, and the secondary characterization subsequently performed after the forum has decided to apply the law of another jurisdiction, can lead to a Qualifikationsverweisung to the lex fori. However, this result opens up a broad debate on the limits to the operability of the mechanism in question, especially with regard to other general principles, such as the principle of unity of succession.

Chiara Ragni, Riconoscimento in Italia di adozioni omoparentali e ordine pubblico internazionale (Recognition in Italy of Adoptions by Same-Sex Couples and International Public Policy)

This article aims to provide a critical analysis of judgment No 9006 of 2021 rendered by the Italian Court of cassation in plenary session, regarding the recognition in Italy of the legal effects of a foreign full adoption granted by the Surrogate Court of New York in favor of a same-sex couple. In particular, the investigation focuses on the contribution made by the Court with regards to: the question of identifying the regime applicable to the recognition of foreign adoption orders; the definition of the notion of public policy; and, finally, the reconstruction of the material content of public policy in the context under consideration, having regard to the importance of the child’s interest in preserving his or her family status for the purposes of that assessment.

Carlotta Maresca, La qualificazione della responsabilita` derivante da rottura brusca di relazioni commerciali stabili: gli effetti delle sentenze della Corte di giustizia sulla giurisprudenza francese (Characterisation of Liability Arising from Abrupt Termination of a Long-Standing Business Relationship: The Impact of the Judgments of the Court of Justice on French Case-Law)

The French provision governing the abrupt termination of long-standing business relationships (Art. L. 442-1, II code de commerce) raises in the context of private international law some issues that are still debated: notably, the question of the characterization of the nature of the liability under this provision. The French Court of Cassation has classified this liability in terms of its nature as both contractual and non-contractual. In particular, the latter characterization (délictuelle) appeared to have prevailed in the French case-law, the majority of which identified French courts as having jurisdiction over, and French law as applicable to, the present case (following the underlying logic of protection of the French victim and market). This trend has been partially changed following the intervention of the Court of Justice of the European Union (“CJEU”). In fact, in the presence of certain circumstances (in particular, in the presence of a silent contract), in Granarolo the CJEU characterized the liability in question as contractual. This article analyzes how this decision can foster the unity of private international law solutions at the European level.

The journal has just launched its new website. It comes with a “News” section and gives access to the table of contents (in Italian and English) of current and past issues, as well as to dedicated databases of articles, case notes, judgments and book reviews which appeared on the journal ever since its foundation.

The website also covers the series of books associated with the journal, which now consists of more than 80 volumes.

I have a bit of catching up to do with the blog and I shall start with the case that is currently also being discussed over at the EAPIL blog. The CJEU has held in C-700/20 London Steam-Ship Owners’ Mutual Insurance Association Limited v Spain (re: the Prestige oil spill). I have further background and links to the English judgments that preceded the reference in my review of the AG Opinion. In that review, I predicted the Court would probably not follow its Advocate General and I should have betted on it for the Court, in Grand Chamber no less, did indeed largely not follow its Advocate General.

Had it been up to the Court of Appeal, the case should have not been referred at all, and given the consequences of the CJEU’s judgment, the referral may come to be regretted.

Essentially, the question at issue is whether an English ‘Section 66’ (Arbitration Act) judgment, which confirms an arbitral award is enforceable in the same way as a judgment in ordinary, qualify as a judgment under the recognition and enforcement Title of Brussels Ia (the case is formally subject to its predecessor, the Brussels I Regulation – see here for a BI- BIa table of equivalence which will make reading of the judgment easier)? If it does, the Spanish judgment contradicting the award is unlikely to be recognised.

Of note is that the 1958 New York Convention does not come into play in the proceedings for the reason that those proceedings do not involve, as Article I(1) of that convention requires, the recognition and enforcement of an arbitral award in a State other than that in which that award was made: the award was made in the UK.

The AG, despite his broad interpretation of the arbitration exclusion in the case at issue, suggests the proceedings are not caught by the arbitration exception, for reasons I discuss in my earlier post. The Court disagrees all in all in succinct terms.

It is worth relisting the 3 issues which the High Court is unsure about, followed by the CJEU’s answer to each:

First, whether a judgment such as its judgment given under Section 66 of the Arbitration Act 1996 qualifies as a ‘judgment’, within the meaning of Article 34(3) of Brussels I, where that court has not itself heard all the substantive merits of the dispute which had been heard by the arbitration tribunal.  Secondly, it has doubts whether a judgment falling outside the material scope of BI  by reason of the arbitration exception may nevertheless be relied on to prevent recognition and enforcement of a judgment from another Member State pursuant to Article 34(3).

Answering these together, the Court [44] kicks off with a curt reference to a fairly unqualified statement in CJEU Rich [18]: ‘the Contracting Parties [to the Brussels Convention, GAVC] intended to exclude arbitration in its entirety, including proceedings brought before national court’.  Further support is found in the 4th (!) para of recital 12 of Brussels Ia, referring specifically to recognition and enforcement proceedings as being excluded from Brussels Ia: [the Regulation does not apply] ‘nor to any action or judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral award.’

With reference to CJEU Gazprom, the Court [45] notes that the lex causae for recognition and enforcement of arbitral awards is national law, including the international law obligations the Member State may have adhered to. As noted however, the New York Convention does not apply to the recognition of the award at issue.

[48] ff the CJEU however concedes, partially with reference to earlier case-law, that judgments on issues carved out from the Regulation, may nevertheless qualify as a ‘judgment’ as meant in Article 34(3) [‘a judgment shall not be recognised’ ‘3. if it is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought’]. This is mostly meant to protect Member State’s internal legal order and ensure that its rule of law is not disturbed by the obligation to recognise a judgment from another Member State which is inconsistent with a decision given, in a dispute between the same parties, by its own court.

This recycling of a carved-out subject-matter, via the enforcement title remains awkward to me, and is a similar back-door entry into BIa as for ex-EU judgments in C-568/20 J v H Limited.

[54] the Court then makes a leap which is reminiscent of its effet utile (safeguarding the overall objectives of the Brussels regime) approach viz anti-suit and arbitration in CJEU West Tankers : ‘the position is different where the award in the terms of which that judgment was entered was made in circumstances which would not have permitted the adoption, in compliance with the provisions and fundamental objectives of that regulation, of a judicial decision falling within the scope of that regulation.’

[59] it lists the two cardinal sins under Brussels I which the award, had it been a judgment covered by the Regulation (but surely it is not!), would have committed: it would have infringed ‘two fundamental rules of that regulation concerning, first, the relative effect of an arbitration clause included in an insurance contract [here the CJEU refers to Assens Havn, GAVC] and, secondly, lis pendens [here, [64] ff, the Court finds the lis pendens conditions would have been met had the two sets of proceedings both been included in the Regulation, GAVC].’

This whole construction requires a parallel universe being built next to BIa (or it is effectively nonsense, as prof Briggs puts it).

[71] the CJEU formulates an instruction for courts faced with request for arbitral awards:

It is for the court seised with a view to entering a judgment in the terms of an arbitral award to verify that the provisions and fundamental objectives of Regulation No 44/2001 have been complied with, in order to prevent a circumvention of those provisions and objectives, such as a circumvention consisting in the completion of arbitration proceedings in disregard of both the relative effect of an arbitration clause included in an insurance contract and the rules on lis pendens laid down in Article 27 of that regulation

The UK courts not having so verified, [72] ‘a judgment entered in the terms of an arbitral award, such as that at issue in the main proceedings, cannot prevent, under Article 34(3) of Regulation No 44/2001, the recognition of a judgment from another Member State.’ As Gilles Cuniberti notes, this instruction, effectively to arbitral tribunals (for if they ignore them, their award risks becoming unenforceable) to verify lis pendens requirements  is at odds with CJEU Liberato, and an extraordinary extension of the BIa rules to arbitral tribunals.

Thirdly, is it permissible to rely on Article 34(1)’s orde public exception as a ground for refusing recognition or enforcement of a judgment from another Member State, on the basis that such recognition or enforcement (of the Spanish judgment) would disregard the force of res judicata acquired by a domestic arbitral award or a judgment entered in the terms of such an award. Here, the CJEU [74] ff answers that the issue of the force of res judicata acquired by a judgment given previously is already exhaustively dealt with under Articles 34(3) and (4) of Brussels Ia and cannot therefore be resurrected under the ordre public exception.

The judgment is concocted reality, but not one which surprises me as I already indicated in my post on the AG’s Opinion. It is time the EU have a fundamental reflection on its relation with commercial arbitration. Treated with odd deference in the discussions on investor-state dispute settlement (think: CJEU Achmea, Komstroy etc) yet seriously obstructed in the case-law on the Brussels regime.

Geert.

EU Private International Law, 3rd ed. 2021, ia 2.120.

As I suspected when I reviwed the Opinion AG https://t.co/PphA3zHY0j the #CJEU seems less forgoving of the #arbitration exception in Brussels Ia. More soon. https://t.co/ROQO2oM9Kh

— Geert Van Calster (@GAVClaw) June 20, 2022

The Interest Group on Private International Law of the Italian Society of International Law (SIDI) will host two webinars – one in English, the other in Italian – in the framework of its recurring webinar series, titled Private International Law in Europe: Current Developments in Jurisprudence.

On 28 June 2022, from 5 to 7 pm (CET), Andrea Bonomi (University of Lausanne) will speak of Habitual Residence of an Abducted Child for the Purposes of the Law Applicable to Maintenance. Francesco Pesce (University of Genova) will serve as discussant.

On 8 July 2022, from 5 to 7 pm (CET), Javier Carrascosa González (University of Murcia) will deal with the recent case law of the Court of Justice relating to the citizenship of the Union and its implications for private international law. The discussant will be Bruno Barel (University of Padova).

The webinars will be chaired by Stefania Bariatti (University of Milan), convenor of the Interest Group.

Those wishing to attend the webinars are are invited to write an email to sidigdipp@gmail.com. Further information available here.

Dear Friends and Colleagues,

Due to a conflicting conference on the previously planned date (9 and 10 September 2022) and with a view to ongoing developments on the subject-matter in the EU, we have made the decision to reschedule our Conference to Friday and Saturday, 9 and 10 June 2023. This new date should bring us closer to the expected date of accession of the EU and will thus give the topic extra momentum. Stay tuned and register in time (registration remains open)!

On 23 June 2022, the European Parliament by adopting JURI Committee Report A9-0177/2022 gave its consent to the accession of the European Union to the HCCH 2019 Judgments Convention. The Explanatory Statement describes the convention with a view to the “growth in international trade and investment flows” as an “instrument […] of outmost importance for European citizenz ans businesses” and expressed the hope that the EU’s signature will set “an example for other countries to join”. However, the Rapporteur, Ms. Sabrina Pignedoli, also expresses the view that the European Parliament should maintain a strong role when considering objections under the bilateralisation mechanism provided for in Art. 29 of the Convention. Additionally, some concerns were raised regardings the protection of employees and consumers under the instrument. For those interested in the (remarkably fast) adoption process, the European Parliament’s vote can be rewatched here. Given these important steps towards accession, June 2023 should be a perfect time to delve deeper into the subject-matter, and the Conference is certainly a perfect opportunity for doing so:

The list of speakers of our conference includes internationally leading scholars, practitioners and experts from the most excellent Universities, the Hague Conference on Private International Law (HCCH), the United Nations Commission on International Trade Law (UNCITRAL), and the European Commission (DG Trade, DG Justice). The Conference is co-hosted by the Permanent Bureau of the HCCH.

The Organizers kindly ask participants to contribute with EUR 200.- to the costs of the event and with EUR 50.- to the conference dinner, should they wish to participate. There is a limited capacity for young scholars to contribute with EUR 100.- to the conference (the costs for the dinner remain unchanged).

Please register with sekretariat.weller@jura.uni-bonn.de. Clearly indicate whether you want to benefit from the young scholars’ reduction of the conference fees and whether you want to participate in the conference dinner. You will receive an invoice for the respective conference fee and, if applicable, for the conference dinner. Please make sure that we receive your payment at least two weeks in advance. After receiving your payment we will send out a confirmation of your registration. This confirmation will allow you to access the conference hall and the conference dinner.

Please note: Access will only be granted if you are fully vaccinated against Covid-19. Please confirm in your registration that you are, and attach an e-copy of your vaccination document. Please follow further instructions on site, e.g. prepare for producing a current negative test, if required by University or State regulation at that moment. We will keep you updated. Thank you for your cooperation.

Dates and Times:

Friday, 9 June 2023, and Saturday, 10 September 2023, 9 a.m. to 7 p.m.

Venue:

Universitätsclub Bonn, Konviktstraße 9, D – 53113 Bonn

Registration:

sekretariat.weller@jura.uni-bonn.de

Registration fee: EUR 200.-

Programme

Friday, 9 June 2023

8.30 a.m. Registration

9.00 a.m. Welcome notes

Prof Dr Wulf-Henning Roth, Director of the Zentrum für Europäisches Wirtschaftsrecht, Rheinische Friedrich-Wilhelms-Universität Bonn, Germany

Dr Christophe Bernasconi, Secretary General of the HCCH

Part I: Cornerstones

1. Scope of application

Prof Dr Xandra Kramer, Erasmus University Rotterdam, Netherlands

2. Judgments, Recognition, Enforcement

Prof Dr Wolfgang Hau, Ludwig-Maximilians-Universität Munich, Germany

3. Indirect jurisdiction

Prof Dr Pietro Franzina, Catholic University of Milan, Italy

4. Grounds for refusal

Dr Marcos Dotta Salgueiro, Adj. Professor of Private International Law, Law Faculty, UR, Uruguay; Director of International Law Affairs, Ministry of Foreign Affairs, Uruguay

5. Trust management: Establishment of relations between Contracting States

Dr João Ribeiro-Bidaoui, First Secretary, HCCH / Dr Cristina Mariottini, Senior Research Fellow at the Max Planck Institute for International, European and Regulatory Law Luxemburg

1.00 p.m. Lunch Break

Part II: Prospects for the World

1. The HCCH System for choice of court agreements: Relationship of the HCCH Judgments Convention 2019 to the HCCH 2005 Convention on Choice of Court Agreements

Prof Dr Paul Beaumont, University of Stirling, United Kingdom

2. European Union

Dr Andreas Stein, Head of Unit, DG JUST – A1 “Civil Justice”, European Commission

3. Canada, USA

Prof Linda J. Silberman, Clarence D. Ashley Professor of Law, Co-Director, Center for Transnational Litigation, Arbitration, and Commercial Law, New York University School of Law, USA

Prof Geneviève Saumier, Peter M. Laing Q.C. Professor of Law, McGill Faculty of Law, Canada

4. Southeast European Neighbouring and EU Candidate Countries

Ass. Prof. Dr.sc Ilija Rumenov, Assistant Professor at Ss. Cyril and Methodius University, Skopje, Macedonia

8.00 p.m. Conference Dinner (EUR 50.-)

Saturday, 10 June 2023

9.00 a.m. Part II continued: Prospects for the World

5. Middle East and North Africa (including Gulf Cooperation Council)

Prof Dr Béligh Elbalti, Associate Professor at the Graduate School of Law and Politics at Osaka University, Japan

6. Sub-Saharan Africa (including Commonwealth of Nations)

Prof Dr Abubakri Yekini, University of Manchester, United Kingdom

Prof Dr Chukwuma Okoli, University of Birmingham, United Kingdom

7. Southern Common Market (MERCOSUR)

Prof Dr Verónica Ruiz Abou-Nigm, Director of Internationalisation, Senior Lecturer in International Private Law, School of Law, University of Edinburgh, United Kingdom

8. Association of Southeast Asian Nations (ASEAN)

Prof Dr Adeline Chong, Associate Professor of Law, Yong Pung How School of Law, Singapore Management University, Singapore

9. China (including Belt and Road Initiative)

Prof Dr Zheng (Sophia) Tang, University of Newcastle, United Kingdom

1.00 p.m. Lunch Break

Part III: Outlook

1. Lessons from the Genesis of the Judgments Project

Dr Ning Zhao, Senior Legal Officer, HCCH

2. International Commercial Arbitration and Judicial Cooperation in civil matters: Towards an Integrated Approach

José Angelo Estrella-Faria, Principal Legal Officer and Head, Legislative Branch, International Trade Law Division, Office of Legal Affairs, United Nations; Former Secretary General of UNIDROIT

3. General Synthesis and Future Perspectives

Hans van Loon, Former Secretary General of the HCCH

The author of this post is Lydia Lundstedt, Senior lecturer at the Stockholm University.

Jurisdiction over foreign patent disputes is again the subject of two new requests for preliminary rulings by the Swedish Patent and Market Court of Appeals. The latest referral, BSH Hausgeräte (C-339/22), concerns the scope of Article 24(4) of Regulation No 1215/2012 (Brussels I bis Regulation) with respect to infringement disputes when the invalidity of a foreign patent is raised as a defence. It also concerns the potential “reflexive effect” of Article 24(4) in relation to patents registered in third countries.

The first question reads as follows (my translation):

Is Article 24(4) of Regulation (EU) 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to be interpreted so that the words ‘proceedings concerned with the registration or validity of patents . . .irrespective of whether the issue is raised by way of an action or as a defence,’ mean that a national court which, in accordance with Article 4(1) of that regulation, has established its jurisdiction to hear an infringement action no longer has such jurisdiction to determine the infringement action if an objection is raised that the patent in question is invalid, or is that provision to be interpreted as meaning that the national court only lacks jurisdiction to determine the invalidity objection?

The second (related) question is (my translation):

Is the answer to question 1 affected by the existence of provisions in national law, similar to those in the second paragraph of Section 61 of the [Swedish] Patent Act, which stipulate that an invalidity objection raised in an infringement action requires the defendant to bring a separate action for a declaration of invalidity in order to be admissible?

The third question concerning the potential “reflexive effect” of Article 24(4) reads (my translation):

Is Article 24(4) of the Regulation to be interpreted as applying in relation to a court in a third country, that is to say, in the present case so that it also confers exclusive jurisdiction on the courts of Turkey for the part of the European patent validated there?

The background is that the German company BSH Hausgeräte GmbH brought proceedings before the Swedish Patent and Market Court against the Swedish company Aktiebolaget Electrolux for the infringement of its European patents validated in Austria, Germany, Spain, France, UK, Greece, Italy, Netherlands, Sweden, and Turkey. Electrolux responded by alleging that the foreign patents were invalid and that the Swedish court therefore lacked jurisdiction to hear the infringement actions concerning the foreign patents.

Electrolux argued that the wording of Article 24(4) of Brussels I Regulation, which codifies the CJEU ruling in GAT (C-4/03), clearly covers infringement actions in which invalidity objections have been raised. It argued further that infringement and invalidity cannot be separated because a valid patent is a prerequisite for an infringement. In addition, Electrolux argued that there was nothing to prevent it from raising invalidity objections before the Swedish court and that the second paragraph of Section 61 of the Swedish Patent Act, which requires an invalidity objection to be raised as an independent action and not merely as an objection in an infringement action, only concerns Swedish patents. In addition, Electrolux argued that pursuant to Article 8 of Regulation (EC) No 864/2007 (Rome II), Swedish law was not applicable and that Swedish law could not either be applied by analogy.

BSH argued that the Swedish court had jurisdiction over the infringement actions pursuant to Article 4 of the Brussels I bis Regulation based on Electrolux’s domicile and the Swedish court did not lose this jurisdiction because Electrolux contested the patents’ validity. It argued further that its action principally concerned infringement, not invalidity so Article 24 and 27 of the Brussels I bis Regulation were not engaged. In addition, BSH argued that pursuant to the second paragraph of Article 61 of the Swedish Patent Act, the court should disregard Electrolux’s invalidity objections unless Electrolux brought separate invalidity actions in the countries where the patents are validated. In such case, BSH argued that the Swedish court could stay the infringement proceedings until the invalidity proceedings became final. Lastly, BSH argued that Article 24(4) of the Brussels I bis Regulation did not apply in relation to third countries.

The Swedish Patent and Market Court held that it lacked jurisdiction over the foreign patents. In short, it held that Article 24(4) applied when invalidity objections were raised in an infringement action concerning foreign patents and that the fact that Electrolux had yet to bring invalidity actions in the countries of registration was not relevant. In addition, the court held that it must also decline jurisdiction over the Turkish part of the European patent because Article 24(4) of the Brussels I bis Regulation was an internationally accepted principle.

BSH appealed to the Patent and Market Court of Appeals. The Court found that the wording of Article 24(4) did not clearly indicate whether it covered infringement actions once invalidity had been raised in objection and that this question was not answered by the GAT decision or the CJEU’s subsequent case law. Concerning the application of Article 24(4) to third country patents, the Court observed that it was not clear from the wording of Article 24(4) of the Brussels I Regulation whether it applied, in contrast to Articles 33 and 34 of the Brussels I Regulation on lis pendens and related actions, which clearly state that that they apply in relation to third countries. The Court also noted that this question had not been answered in Owusu (C-281/02), where the CJEU held that Article 2 of the Brussels Convention (now Article 4 Brussels I bis Regulation) on jurisdiction of the basis of domicile applied to disputes involving relations between the courts of a Contracting State and a non-Contracting State.

An earlier referral, IRnova (C-399/21) also concerns the scope of Article 24(4) of the Brussels I Regulation, but this time in the context of a patent entitlement action when the basis for the action is that the claimant is the true inventor.

The question reads as follows:

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

The background is that the Swedish company IRnova AB brought proceedings before the Swedish Patent and Market Court against the Swedish company FLIR Systems AB for entitlement to patent applications and patents that FLIR Systems AB had applied for and registered in third countries (USA and China) by FLIR Systems AB. The companies had previously had a business relationship. IRnova alleged that one of its employees had developed the inventions, or at least, had made such a substantial contribution to the inventions that he was to be regarded as a co-inventor and that IRnova was therefore the rightful owner. FLIR Systems AB objected to the Swedish court’s jurisdiction and the Patent and Market Court dismissed IRnova’s action. The court held that Article 24(4) of the Brussels I bis Regulation was an internationally accepted principle and therefore should apply in relation to third countries. The court held further that an entitlement action based on inventorship was so closely related to the registration and invalidity of patents that Article 24(4) was engaged.

IRnova AB appealed to the Patent and Market Court of Appeal. The Court noted that the answer to this question was not clear from the CJEU’s previous case law including Duijnstee (288/82), where the CJEU held that Article 16 of the Brussels Convention (now Article 24(4) Brussels I bis Regulation) does not apply to a dispute between an employee for whose invention a patent has been applied for or obtained and his employer, where the dispute relates to their respective rights in that patent arising out of the contract of employment.

Today, the European Parliament by adopting JURI Committee Report A9-0177/2022 gave it consent to the accession of the European Union to the HCCH 2019 Judgments Convention.

The Explanatory Statement describes the convention with a view to the “growth in international trade and investment flows” as an “instrument […] of outmost importance for European citizenz ans businesses” and expressed the hope that the EU’s signature will set “an example for other countries to join”. However, the Rapporteur, Ms. Sabrina Pignedoli, also expresses the view that the European Parliament should maintain a strong role when considering objections under the bilateralisation mechanism provided for in Art. 29 of the Convention. Additionally, some concerns were raised regardings the protection of employees and consumers under the instrument.

For those interested in the (remarkably fast) adoption process, the European Parliament’s vote can be rewatched here.

This is the second post an online symposium on the ruling of the European Court of Justice, of 20 June 2022, in London Steam-Ship Owners’ Mutual Assistance Association Ltd v Spain. The first post was contributed by Adrian Briggs. 

The most significant consequence of the judgment of the CJEU in London Steam-Ship Owners might be the holding that the courts of the Member States requested to declare enforceable arbitral awards should verify whether the relevant arbitral tribunal respected the rule on lis pendens of the Brussels I bis Regulation.

According to the CJEU, the minimisation of the risk of concurrent proceedings, which that provision is intended to achieve, is one of the objectives and principles underlying judicial cooperation in civil matters in the European Union. Thus, a judgment on an arbitral award rendered in violation of lis pendens does not deserve deference, and should not qualify as a judgment in the meaning of Article 34(3) of the Brussels I Regulation.

Is the Objective of Avoiding Concurrent Proceedings so Essential in the EU?

As pointed out by Adrian Briggs, the CJEU rules that the rule of lis pendens should be applied by the courts of Member States in courts proceedings on arbitral awards. The CJEU suggests, it seems, that those courts should dismiss request to declare enforceable arbitral awards in case the rule on lis pendens would have been violated.

The proposition that the rule of lis pendens is so important that it should be applied by courts in exequatur proceedings of arbitral awards is very hard to reconcile with previous cases of the CJEU where the Court held that the doctrine of lis pendens is not important enough to become a ground for denying enforcement to judgments under the Brussels Regulations (I or II).

In Liberato, the CJEU held that

the rules of lis pendens in Article 27 of Regulation No 44/2001 and Article 19 of Regulation No 2201/2003 must be interpreted as meaning that where, (…) the court second seised, in breach of those rules, delivers a judgment which becomes final, those articles preclude the courts of the Member State in which the court first seised is situated from refusing to recognise that judgment solely for that reason. 

So, the doctrine of lis pendens is not important enough to exclude that a judgment which violated it be enforced in other Member States. Why does the same doctrine suddenly become so much more important in the context of arbitration?

Lis pendens and Jurisdiction Clauses: The New Rules

For the purpose of assessing the consequences of this case, it must be underscored that it was governed by the Brussels 44/2001. At the time, thanks to the (in)famous Gasser case, the rules of lis pendens fully applied to cases involving jurisdiction clauses.

As many readers will know, the rules on lis pendens were amended by the Brussels I Recast to overturn Gasser. Under Article 31(2) of the Brussels I Recast:

Without prejudice to Article 26, where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seised, any court of another Member State shall stay the proceedings until such time as the court seised on the basis of the agreement declares that it has no jurisdiction under the agreement.

So, if the judgment in London Steam-Ship Owners is to be understood as extending to arbitration agreements the mandatory rules of the Brussels regime on jurisdiction clauses and lis pendens, then Article 31(2) should give a priority to arbitral tribunals over the courts of Member States which were not chosen by the parties.

The CJEU has opened the Pandora box. Does it contain an obligation for the courts of the Member States to stay proceedings once an arbitral tribunal seated in a Member State is seised?

Pour l’application des dispositions du I de l’article L. 511-1 du code de l’entrée et du séjour des étrangers et du droit d’asile (CESEDA), désormais reprises à l’article L. 611-1 du même code, le préfet de département compétent pour prendre la mesure d’éloignement est-il, exclusivement, soit le préfet du lieu de domicile de l’étranger, soit le préfet du lieu de l’interpellation, ou y a-t-il lieu de faire varier la compétence selon le fondement retenu pour prononcer l’obligation de quitter le territoire français ?

en lire plus

The post below was written by Adrian Briggs QC, who is Professor of Private International Law Emeritus at the University of Oxford. It is the first contribution to an online symposium on the ruling of the European Court of Justice, of 20 June 2022, in the case of London Steam-Ship Owners’ Mutual Assistance Association Ltd v Spain.

The clearing up of the oil which in 2002 splurged out of the wretched MT Prestige (the ownership and operation of which was a worthless stew of Greek, Bahamian and Liberian entities) and into the Atlantic onto the coast of Galicia was an astonishing, miraculous, environmental triumph. It is even reported that a year after the catastrophe, the beaches of Galicia were cleaner than ever before, this thanks, no doubt, to the army of volunteers who laboured to rid the coast of all traces of the filthy effluent when the Spanish state failed to demonstrate the necessary vigour. By contrast, the clearing up of legal liability has proved to be the polar opposite. The account which follows has been pared to its barest essentials, for life is just too short for the full story to be set out.

The Spanish state sued various entities to recoup what it claimed as losses resulting from the cleaning operation. Among other targets it identified the (London) insurer of the vessel, and fancied that it had a direct claim against the insurer for the sums payable under that policy. The policy of insurance provided for arbitration in London, but the Spanish state preferred to sue in its own courts, taking the position that it had no obligation to proceed by arbitration: as one might say in England, it claimed to take the benefit, but not the burden, of the policy on which it relied; it picked out the plums and left the duff.

The English insurer, having issued a policy which provided for arbitration, took objection to its liability to anyone claiming through or under that policy being determined outside the arbitral tribunal foreseen by the policy. It was doubtless aware that it could not defend the attack on the integrity of the arbitration agreement by asking for an injunction from the English courts, so convened the tribunal. The tribunal decided that the Spanish claim for the sums due under the policy, which claim was manifestly contractual in nature and in quantum, was enforceable only by arbitration; its award, determining also that the insurer was not liable on the policy, followed. The insurer then obtained a judgment from the High Court declaring the award, in accordance with the Arbitration Act 1996, to be enforceable as a judgment. Meanwhile, the Spanish courts proceeded to order the insurer to pay $ 1 billion, which represented the cap on insurer liability under the policy of insurance. Thus the scene was set.

Seised of the question whether the Spanish judgment should be registered for enforcement in England under Chapter III of Regulation 44/2001, and perceiving this to be a question which he could not answer, an English judge made a reference to the European Court, nine days before the Brexit divorce was to be made absolute. In it he asked, in effect, what the Regulation required him to do with a Spanish judgment which was radically inconsistent with the London award and English judgment. While the cogs and wheels of the CJEU were starting to turn, the insurer appealed against the decision to make reference to the European Court, relying on orthodox grounds of European law to justify it. The Court of Appeal allowed the appeal, but concluded it was bound to remit the matter to the High Court judge who alone might recall the reference. The Spanish state appealed to the Supreme Court against the decision of the Court of Appeal. The Supreme Court arranged an early date for the appeal which would finally clarify the need or otherwise for the reference. Three days before the published date for the hearing before the Supreme Court, the European Court put out its ruling, trashing the Opinion of its Advocate-General, scuttling the appeal and preventing the English court from considering, in accordance with European law, whether a reference and ruling was required, and doing its level best to make the insurer liable in law to the Spanish state.

No doubt the timing, and the outcome, is the purest coincidence, and the fish-like smell is just an incident of coastal life. But the ruling, and the justification offered for it, is truly, madly, deeply weird.

One starts with the proposition, freely accepted by the court, that the Regulation 44/2001 does not apply to arbitration, because Article 1 says as much. The logical and legal consequence of that, in a decision to which the Court made reference, was that the English court was entitled to apply its law of arbitration, even to the point of refusing to recognise a judgment in a civil or commercial matter given by the courts of another Member State. In 145/86 Hoffmann v Krieg, the court had, at [18], deduced that

the answer to be given to the national court is that a foreign judgment whose enforcement has been ordered in a contracting state pursuant to article 31 of the [Brussels] convention and which remains enforceable in the state in which it was given must not continue to be enforced in the state where enforcement is sought when, under the law of the latter state, it ceases to be enforceable for reasons which lie outside the scope of the convention.

The judgment in Hoffmann was indeed referred to (at [52]), though this was not the paragraph there mentioned. It appears to give a complete answer to the question, as the English judge who set this all in motion should have realised. Instead, the Court used another part of the judgment in Hoffmann for its conclusion that the English judgment on the award was irreconcilable with the Spanish judgment. One may accept that that was so, but still shrug: for this question, framed by Article 34(3) of Regulation 44/2001, would be void of content if the entire subject matter of the English court order lay outside the scope of the Regulation, ratione materiae, in the first place. The Court reasoned that the English order was a judgment within the meaning of Article 34(3), even though it was one on a matter to which the Regulation has no application in the first place. This is very odd (though not a novelty: see C-568/20 J v H Ltd EU:C:2022:264), but in the court’s defence one might claim that it provides a ramshackle means for dealing with a structural problem. The problem has been noticed before; indeed, the writer has written elsewhere that it offers a feasible, if untidy, solution. So be it, then.

So did it follow that the English court could and should refuse recognition of the irreconcilable Spanish judgment? According to the Court, it did not. The reasons given were, it is submitted, as perverse as they are incredible. The gist of paragraphs 54 to 72 goes something like this. If the London tribunal had been a court, and the arbitration clause had been a jurisdiction clause, the jurisdiction clause would not have been enforceable against the Spanish state, which was a third party to the policy of insurance under which it was claiming. If the London tribunal had been an English court, it could not have taken jurisdiction in any event, as the Spanish state had already seised the Spanish courts with the same cause of action. It followed that to allow the actual English judgment to count as a judgment for the purposes of Article 34(3) would undermine or conflict with the objectives of the Regulation; the English order was not a judgment after all. The English courts had been at fault for not realising this nonsense was law:

It is for the court seised with a view to entering a judgment in the terms of an arbitral award to verify that the provisions and fundamental objectives of Regulation No 44/2001 have been complied with, in order to prevent a circumvention of those provisions and objectives, such as a circumvention consisting in the completion of arbitration proceedings in disregard of both the relative effect of an arbitration clause included in an insurance contract and the rules on lis pendens laid down in Article 27 of that regulation. In the present case, it is apparent from the documents before the Court and from the hearing that no such verification took place either before the High Court of Justice (England & Wales), Queen’s Bench Division (Commercial Court), or before the Court of Appeal (England & Wales) (Civil Division) and, moreover, that neither of those two courts made a reference to the Court for a preliminary ruling under Article 267 TFEU.

So here it is. The arbitral tribunal in London was entitled – at least, it has not yet been said that it wasn’t – to proceed to determine the claim to the proceeds of the policy of insurance, but the English court, called upon to approve enforcement of the award, was required to go through the looking glass and play its part in the pantomime just described. The fact that it has not done so meant that it had committed a jurisdictional error. In consequence, its judgment – as the court said that it was – failed to qualify as a judgment, for those reasons of jurisdictional error, to count as a judgment for the purposes of Article 34(3). There is, of course, absolutely nothing in the jurisprudence to suggest that the home court’s ‘judgment’ in Article 34(3) means ‘judgment free of all taint of jurisdictional error’, though there is the collateral instruction in Article 35 that the jurisdiction of the court that gave the foreign judgment shall not be reviewed. No wonder the English court failed to see what it should have done: the words directing it have yet to be written, never mind enacted. The result is that European law requires the English court to construct a parallel reality to enable and require it to ignore its law on arbitration. But of course, it meant that the European Court was able to order the transfer of $1 billion from London to Madrid.

We have been here before. Lewis Carroll, also writing from Oxford, reported the dialogue between Alice and Humpty-Dumpty, in the following terms

‘When I use a word’, Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less’. ‘The question is’, said Alice, ‘whether you can make words mean so many different things’. ‘The question is’, said Humpty Dumpty, ‘which is to be master — that’s all’.

And that question is the one that counts. An English court may, and surely will, say that if the answer summarised above is the answer resulting from one international instrument by which it is bound, the answer required by another one, the New York Convention, by which is it is also bound, is the one which counts, for the latter is master. And in spite of this output from the European Court, the Brussels lawmaker would seem to agree: along with Article 1, one will find confirmation in the second sentence of the third paragraph of Recital 12 to Regulation 1215/2012. That will mean that the decision of the European Court is, for the United Kingdom, a letter whose deadness has nothing to do with Brexit. It will be for those working in legal systems which remain tied by the jurisprudence of the European Court to explain to their colleagues working in the field of international arbitration how the principle that the Brussels regime does not apply to and does not prejudice the law of arbitration has had such a dramatic effect on their business: good luck with that. For those in the United Kingdom who lamented our separation from the Brussels and Lugano regime, it will be a real struggle to look at the judgment in Case C-700/20 not to regard it as a stunt which shames those who set their hand to it. Others will not need to struggle.

The Singapore-based Asian Business Law Institute (ABLI) has been engaging in work related to judgments recognition and enforcement in Asia for some time. This blog reported about the Institute’s publication of 2020 on the Asian Principles for the Recognition and Enforcement of Foreign Judgments.

ABLI is now joining hands with the Permanent Bureau of the Hague Conference on Private International Law for a joint webinar that will take place on on 27 July 2022 between 3 to 6pm (Singapore time).

Titled Cross-border Commercial Dispute Resolution – HCCH 2005 Choice of Court and 2019 Judgments Conventions, the webinar will comprise two sessions to take a holistic look at the Choice of Court and Judgments Conventions.

Attendees have the option of attending one or both sessions.

Invited speakers Sara Chisholm-Batten (Partner, Michelmores LLP), the David Goddard (Court of Appeal, New Zealand), Anselmo Reyes (International Judge, Singapore International Commercial Court), Nish Shetty (Partner, Clifford Chance LLP) and Dr Ning Zhao (Senior Legal Officer, HCCH) are expected to talk about the practical operations of the two Conventions, how they complement each other and whether the recent debate of the Choice of Court Convention is justified.

For more information or to register, click here. Early bird discount is available till 26 June. Queries about the webinar should be addressed to info@abli.asia.