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On 8 December 2020 (11am – 2 pm EST), the ABA will host an online seminar on the principles of treaty interpretation, a core skill of every international lawyer.

Leading experts will discuss the goals, principles and challenges of treaty interpretation in a plenary session. Participants will then have the opportunity in a smaller working group to tackle interpretation in one of several pressing areas:

• human rights and the challenges of diplomatic immunity;
• private international law; and
• national security exceptions in trade and investment agreements.

For more information, including registration, click here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

L’article 801 du code de procédure pénale s’applique au délai prévu par l’article 187-1 du code de procédure pénale.

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

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

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

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

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

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

Report prepared by Onyoja Momoh, Post-Doctoral Researcher at the University of Aberdeen.

On Thursday 5th of November 2020, the Nigerian Group on Private International Law (“NGPIL”) held its first committee meeting by virtual platform. In attendance at the meeting and forming the Committee of NGPIL were: Dr Onyoja Momoh (English Barrister at 5 Pump Court; Research Fellow at University of Aberdeen), Dr Pontian Okoli (Lecturer at University of Stirling), Dr Abubakri Yekini (Lecturer at Lagos State University) Dr Chukwuma Okoli (Post-Doctoral Researcher at T.M.C Asser Instituut), and Dr Chukwudi Ojiegbe (Contracts Manager at ACE Winches). This new initiative will bring together a unique group of experts with an important ethos: the promotion of private international law in Nigeria.

The NGPIL unanimously agreed that its aims are (1) to improve the law in Nigeria in matters relating to private international law (“PIL”) (2) to persuade the Nigerian government to accede to the Hague Conventions on PIL (3) to liaise with other experts, groups, and research centres on PIL on a global level (4) to nurture, guide and develop the legal mechanism and framework for PIL in Nigeria (5) to be the collective voice of PIL experts for the Nigerian government, the judiciary, lawyers and other relevant stakeholders and, (6) to improve the links and communication between PIL experts in Africa.

NGPIL’s activities will be far-reaching, from research projects to academic writings, dissemination events (conferences, seminars, workshops) and creating a platform for consultation and advisory work to the Nigerian government and other relevant stakeholders. A key aim is to build PIL recognition within the legal and judicial community, one that may lead to identifying a Hague Network Judge or Judges for Nigeria.

The Committee discussed plans for an inaugural event open to the public. There was a general consensus that the event will be hosted on a virtual platform given the uncertain climate, to take place in the Spring/Summer of 2021. Holding a virtual event would have huge benefits, especially the ease of engagement and participation for our main target audience across Nigeria and beyond. The proposal is to work in collaboration with the Nigerian Bar Association and academics at the Nigerian Institute of Advance Legal Studies, drawing together academics and practitioners alike, and extending invitations to the Nigerian government and other relevant organisations.

The next meeting of the NGPIL will take place in January 2021.

Thank you Jan Jakob Bornheim for alerting me to Hebei Huaneng v Deming Shi_B [2020] NZHC 2992, which dismissed the defendant’s application for summary judgment and discusses the notion of a ‘court’ , required to recognise its ‘judgments’ internationally. Readers will recognise the discussion ia from the CJEU case-law in judgments such as Pula Parking.

Hebei Huaneng had obtained judgment against Mr Shi at the Higher People’s Court of Hebei Province. The amount remained unsatisfied. Hebei Huaneng then found out that Mr Shi has assets in New Zealand – an inner-city apartment in Auckland and shares in a New Zealand company.  Mr Shi objects to New Zealand hearing this case on the basis that China does not have true courts and that Hebei Huaneng should first enforce its securities in China.

At 78-79 Bell J holds briefly that questions of real and substantial connection with New Zealand and appropriate forum are not much in issue. The two main arguments raised at this stage lie elsewhere.

Given the lack of treaty on the issue between NZ and PRC, he summarises the NZ common law on recognition at 16:  the common law regards a judgment of a foreign court as creating an obligation enforceable under New Zealand law if the judgment is given by a court, the judgment is final and conclusive, the judgment is for a definite sum, the parties are the same or privies, and the court had jurisdiction under New Zealand’s jurisdiction recognition rules. No merits review will be undertaken however refusal of enforcing a ‘money judgment’ is possible if obtained in breach of New Zealand standards of natural justice, enforcing the judgment would be contrary to public policy,
the judgment was obtained by fraud, the judgment was for a revenue debt, or the judgment involves the enforcement of a foreign penal law. Lack of reciprocal recognition by the other State is no objection.

On the issue of the notion of court, he notes at 29 that complaints that a foreign legal system is so defective that its courts cannot be trusted to do substantial justice may arise in two contexts: in forum non cases, where the analysis is prospective seeing as the case may not even be pending abroad; and in recognition cases, where the analysis is retrospective. At 28 Bell J already points out that style of writing etc. particularly also given the civil law background of China must not confuse. At 35 he notes to core issues viz the concept of court: (a) whether the bodies carrying out judicial functions are distinct from those with legislative and administrative function; and (b) whether the bodies carrying out judicial functions are subject to improper interference. Then follows lengthy-ish consideration of expert evidence to conclude at 60 that the good arguable case of the Chinese courts being independent, is satisfied.

The question of the ‘property security first’ principle’ which would mean satisfaction would first have to be sought against the Chinese secured assets, is discussed mostly in the context of Chinese law, against the backdrop of the common law principle of a party’s freedom to chose asset enforcement. The lex causae for that discussion I imagine will be further discussed at the merits stage.

A good case for the comparative conflicts binder.

Geert.

On the notion of 'court' and judicial independence re Chinese courts
Hebei Huaneng v Deming Shi_B [2020] NZHC 2992https://t.co/HwdiuYUnta https://t.co/wfsOjB2SLC

— Geert Van Calster (@GAVClaw) November 19, 2020

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

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

The English abstract reads:

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

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

Le 19 novembre, le Conseil d’État a eu à traiter pour la première fois des questions de la nature et de l’intensité de l’obligation de l’État d’adopter des mesures pour se conformer à temps aux objectifs de l’Accord de Paris sur le climat.

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L’intérêt de cet arrêt est de préciser les exigences de motivation à satisfaire lors du prononcé d’une amende civile. 

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In today’s Opinion delivered in the case Obala i lucice, C-307/19, Advocate General Bobek revisits the line of case law built upon the judgment in Pula Parking, C-551/15, pertaining to the enforcement of unpaid public parking tickets by means of a writ of execution issued by a Croatian notary. This time both the Brussels I bis Regulation and the Service Regulation are at stake.

A car is leased from NLB Leasing d.o.o., a company that provides financing for the use of vehicles, equipment and real estate in Slovenia and is – as it may be inferred from point 1 of the Opinion – based in that Member State.

On 30 June 2012, the car is parked on a public street in Zadar (Croatia). The street is defined parking zone with designated parking spaces. Obala i lucice d.o.o., entity based in Croatia, is charged with the management and maintenance of public areas for parking of motor vehicles. As the car does not have a parking ticket on display, that entity issues a daily parking ticket.

On 1 July 2013, Croatia joins the EU. Four years later, in 2017, the parking management entity commences enforcement proceedings for recovery of the parking ticket debt with a notary, by making an application for enforcement on the basis of an ‘authentic document’. That document is an extract from the accounts of Obala i lucice d.o.o., which recorded the debt relating to the unpaid ticket.

The notary issues a writ of execution on the basis of the ‘authentic document’, which is subsequently served to NLB Leasing d.o.o. in Slovenia. The latter challenges the writ before Croatian courts.

A commercial court in Pazin rules that it lacks jurisdiction and refers the case to the commercial court in Zadar. The latter also considers that it lacks jurisdiction and refers the case to the high commercial court, which decides to seize the Court of Justice with a series of preliminary questions.

It has to be mentioned at the outset that the Opinion is not addressing all the questions referred to the Court of Justice for a preliminary ruling. As the Opinion clarifies at its point 25, the Court asked its AG to elaborate only on some of the questions. The Opinion constitutes therefore the so-called ‘conclusions ciblées’.

At point 34, AG establishes the need to rearrange these questions and lists the legal inquiries analyzed in the Opinion, namely, firstly, whether the enforcement of a debt relating to the unpaid public parking ticket is a dispute relating to ‘civil and commercial matters’ within the meaning of the Brussels I bis and Service Regulations; secondly, whether the notaries in Croatia may themselves effect service (under the Service Regulation) of writs of execution drawn up on the basis of an ‘authentic document’ and thirdly, whether any of the special grounds of jurisdiction of the Brussels I bis Regulation confer jurisdiction on the courts of a Member State other than the domicile of the defendant.

As a consequence, the Opinion is not addressing the questions concerning, in particular, the law applicable under the Rome I and Rome II Regulations (Questions 8 and 9). It is yet to be seen how they will be answered in the judgment of the Court. It is worth noticing, however, that the facts underlying the case pending before the national courts predate the accession of Croatia to the EU.

At points 39 to 54, a reminder of the case law leads AG Bobek to distinguishing two approaches adopted by the Court in order to establish whether the Regulations on ‘civil and commercial matters’ are applicable. He defines them as ‘subject matter’ and ‘legal relationship’ approaches (‘perspectives’).

Pronouncing himself in favour of ‘legal relationship’ approach at point 59, AG Bobek concludes that:

‘The concept of “civil and commercial matters”, as laid down in Article 1(1) of [the Brussels I bis Regulation] and Article 1(1) of [the Service Regulation], must be interpreted as requiring the legal relationship which characterises the underlying dispute, assessed against the framework generally applicable to private parties in such situations, not to be characterised by a unilateral exercise of public powers by one of the parties to the dispute.

While it falls to the national court to determine whether those conditions are satisfied, the circumstances of the present case do not appear subject to such an exercise of public powers.’

At points 88 et seq., the Opinion addresses the question whether, under the Service Regulation, the notaries in Croatia may themselves effect service of writs of execution drawn up on the basis of an ‘authentic document’. At point 105, AG concludes:

‘[The Service Regulation] must be interpreted as meaning that, in order for a writ of execution based on an “authentic document” to qualify as a “judicial document” within the meaning of Article 1(1) of that regulation, the issuing entity must be a judicial body of a Member State forming part of its judicial system.

Articles 2 and 16 of [the Service Regulation] must be interpreted as meaning that, where a Member State has failed to designate notaries as “transmitting agencies” within the meaning of Article 2(1) of that regulation, those notaries cannot transmit “extrajudicial documents” for service to another Member State under the provisions of that regulation.’

At points 106 et seq., the Opinion goes on to establish whether special grounds of jurisdiction of the Brussels I bis Regulation confer jurisdiction on the courts of a Member State other than the domicile of the defendant. Three possibilities are addressed within this part of the Opinion.

Firstly, at point 109, AG Bobek excludes the applicability of Article 7(2) of the Brussels I bis Regulation. He seems to argue, in essence, that the dispute pertaining to the unpaid public parking ticket is contractual in nature.

Next, at point 111, the applicability of the ground of exclusive jurisdiction provided for in Article 24(1) of the Regulation is excluded. Here, it is argued that ‘[o]n the basis of the facts present in the court file, there is no indication that either possession or other rights ‘in rem’ in the parking space were transferred to the defendant upon parking there (or that they are, in fact, at issue). Moreover, the article’s raison d’être militates against such an interpretation.’.

Finally, at point 112, the Opinion comes to the conclusion that Article 7(1) of the Brussels I bis Regulation is applicable and contends:

‘Article 7(1) of Regulation No 1215/2012 must be interpreted as meaning that parking a car in a designated parking space on a public road can, under the legal system of a Member State in which the issuing of parking tickets and the collection of parking fees is entrusted to a private entity, constitute a “matter relating to a contract”, as referred to in that provision.’

The Opinion can be consulted here. The request for a preliminary ruling is accessible here.

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