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A French Décret, allows, for the time of the state of emergency, notarization by a French notary without a need for parties to be physically present. Explanation and analysis is here and (briefly) here. Importantly, the possibility is also open to non-residents of France.  Notaries in France had, unsurprisingly, warned of the risk of fraud, but the Conseil d’Etat approved of the decret.

Austria has a similar rule in sec. 90a of its Notary Act. In Germany, this is not (yet?)possible: Art. 40(1) of the German Notarisation Act requires physical presence of the parties; the greatest distance allowed is, apparently, the way to the parking lot. Estonia has introduced an e-notary for notarisation from abroad, but this is available only in Estonian embassies.

The French and Austrian rules raise interesting private international law questions. Usually, notarization requires physical presence – which is why so many lawyers fly from Germany to France to have contracts notarized. Can they now stay at home? If two French domiciliaries sign a contract electronically while in Switzerland, and notarization happens in France, is this a case of Art. 11(1) Rome I Regulation? That would lead to the odd result that the formal requirements would follow from either Swiss law or from the law applicable to the contract (which need not be French law) and not necessarily the law of the place where the French notary sits. And yet, Art. 11(2) seems inapplicable because the notary is not an agent of the parties. Should it be applicable by analogy? Should there be a special rule for notaries that used to be unnecessary because notarization always requires physical notaries? Or is this another reason to rethink the principle of locus regit actum for internet contracts?

DIFC Courts, the Dubai International Financial Centre’s Courts, is one of the new generation of international commercial courts. Its rulings piggyback unto recognition and enforcement treaties which the UAE concludes with third countries (India being a recent example).

In GFH Capital Ltd v Haigh & Ors [2020] EWHC 1269 (Comm) Henshaw J first of all notes that there is no such treaty between the UK and the UAE hence he considers recognition of the July 2018 DIFC judgment by Sir Jeremy Cooke under common law principles. Helpfully, these principles have been summarised in a January 2013 Memorandum of Guidance as to Enforcement between the DIFC Courts and the Commercial Court, Queen’s Bench Division, England and Wales. Under discussion in the case is mostly the condition that the foreign court be a court of competent jurisdiction; that the foreign judgment be not obtained fraudulently; and that its recognition be not incompatible with English ordre public.

The judgment is an extensive treatment of the relevant principles and therefore suited to comparative materials.

Geert.

 

Enforcement of @DIFCCourts judgment
Application of common law principles (no releant Treaty with the UAE). https://t.co/VHgkTw7DHG

— Geert Van Calster (@GAVClaw) May 20, 2020

Fernando Gascón Inchausti (Complutense University of Madrid) and Burkhard Hess (MPI Luxembourg) have edited The Future of the European Law of Civil Procedure, a book published by Intersentia.

The publisher’s blurb reads:

The European lawmaker is currently overseeing what appears to be a paradigm shift in the way that cross-border litigation is conducted within the European Union. This matter was initially conceptualised from the perspective of international judicial cooperation, based on the notion of mutual trust and mutual recognition. Recent developments, however, have introduced the option of harmonisation as a new regulatory approach.

The first part of the book is focused on the possible methodological approaches at hand. Special emphasis is placed on the role of the Court of Justice of the European Union as a “promoter” of a European Procedural Law (principle of effectiveness and principle of equivalence). The second part assesses to what extend harmonisation is already used: “vertically”, through the regulations on international judicial cooperation, for example the European Account Preservation Order; and “horizontally”, through the promotion of harmonised standards promoted by the directives on intellectual property rights and competition damages (access to information and evidence), or in the directive on trade secrets and in the field of data protection (protection of confidential information). With a view to the future, the final part examines two more recent initiatives: ELI-UNIDROIT and the proposal for a directive on common minimum standards of civil procedure in the EU.

The Future of the European Law of Civil Procedure: Coordination or Harmonisation? clearly outlines the motivations of the various national and institutional players in the regulation of civil procedural law and identifies potential obstacles likely to be encountered along the way that will be useful for every lawyer in the field.

The authors include Dominik Düsterhaus (Court of Justice of the European Union), Stefan Huber (University of Tübingen), Christoph A. Kern (University of Heidelberg), Stephanie Law (MPI Luxembourg), Patricia Llopis Nadal (University of Valencia), Janek T. Nowak (MPI Luxembourg), Marta Requejo Isidro (MPI Luxembourg), Vincent Richard (MPI Luxembourg), Elisabetta Silvestri (University of Pavia), Michael Stürner (University of Konstanz), María Luisa Villamarín López (Complutense University of Madrid), Enrique Vallines García (MPI Luxembourg).

See here for more information, including the table of contents.

William S. Dodge has posted Jurisdiction, State Immunity, and Judgments in the Restatement (Fourth) of US Foreign Relation Law on SSRN. The paper features in the latest issue (vol. 19, issue 1) of the Chinese Journal of International Law.

The abstract reads:

In 2018, the American Law Institute published the Restatement (Fourth) of Foreign Relations Law, which restates the law of the United States governing jurisdiction, state immunity, and judgments. These issues arise with great frequency in international cases brought in US courts, including cases involving Chinese parties. This article provides an overview of many of the key provisions of the Restatement (Fourth). The article describes the Restatement (Fourth)’s treatment of the customary international law of jurisdiction, as well the rules of US domestic law based on international comity that US courts apply when deciding international cases.

In response to the COVID-19 pandemic and following a video message of the Secretary General, the Permanent Bureau (PB) of the Hague Conference on Private International Law has developed a COVID-19 Toolkit.

The COVID-19 Toolkit spots situations covered by Hague instruments on which the pandemia may have a particular impact, and compiles references to specific HCCH resources and publications thereto relevant in light of the current global situation. It is designed to assist users of the HCCH Conventions and other instruments in these challenging times and beyond.

The HCCH COVID-19 Toolkit is divided into two main categories: International Child Protection and Family Matters, covering, inter alia, child abduction, family maintenance and intercountry adoption, and International Legal Cooperation, Litigation and Dispute Resolution, concerning, among other things, service of documents and the taking of evidence abroad.

Within each category, a short description is made on the presumable effect of the pandemia, followed by a quick access to the most pertinent instruments or guides connected, such as the Guide to good practice on the “grave risk exception” to prompt return under Article 13(1)(b) of the 1980 Child Abduction Convention.

The PB has expressed its hope that “the Toolkit will continue to encourage the effective operation of the HCCH instruments, ultimately ensuring better access to justice for individuals, families and companies across the globe, as well as facilitating cross-border trade, investment and dispute resolution, even in these uncertain times”.

It is indeed a worthy initiative with a helpful, user-friendly outcome (which, when it comes to putting legal rules into practice, is more than welcome).

Assurance

Indemnisation des victimes d'attentat

Avocat

Nord Stream 2 / Parlement et Conseil
Énergie
Le Tribunal de l’UE déclare irrecevables les recours introduits par Nord Stream AG et Nord Stream 2 AG contre la directive 2019/692 qui étend certaines règles du marché intérieur du gaz naturel aux gazoducs en provenance de pays tiers

Preliminary question and its context

In its Judgment of 7 May 2020, delivered in the joined cases C-267/19 and C-323/19 without Advocate General’s Opinion, the Court of Justice provides some further guidance on the implications of its previous case law and most notably of the Judgment in the case C-551/15, Pula Parking (‘Judgment in Pula Parking’).

Just as in the case that led to Judgment in Pula Parking, the requests for a preliminary ruling in the cases in question were lodged in the context of the proceedings on the oppositions to the writs of execution. Put succinctly: under the Croatian law, a notary issues a writ of execution based on an ‘authentic document’. The party against whom enforcement is sought may lodge an opposition to that writ. The court to which the opposition is transferred has jurisdiction to set aside the writ and to annul the measures taken so far. The procedure continues according to the rules applicable to cases of opposition to a payment order.

By way of background, in Judgment in Pula Parking, the Court held, inter alia, that ‘[the Brussels I bis Regulation] must be interpreted as meaning that, in Croatia, notaries, acting within the framework of the powers conferred on them by national law in enforcement proceedings based on an “authentic document”, do not fall within the concept of “court” within the meaning of that [Regulation]’.

The referring court in the present cases indicates that Judgment in Pula Parking receives various interpretation on the national level. It seems that the reading of this Judgment according to which it relates exclusively to enforcement proceedings conducted against a party being a natural person and national of another EU Member State prevails in the Croatian case law.

However, for the referring court, that reading of Judgment in Pula Parking establishes a discriminatory difference in the way in which the Brussels I bis Regulation is applied in Croatia. The referring court seems to understand that Judgment as implying that, in its Member State, notaries are not entitled to issue writs of execution based on an ‘authentic document’ and therefore, the fact that they continue to do so, is at odds with the Regulation.

In view of those explanations, at paragraph 42 the Court clarifies that it understands the request for a preliminary ruling as concerning the question whether Article 18 of the Treaty on the Functioning of the European Union and Article 47 of the Charter preclude national legislation entitling the Croatian notaries to issue the writs of execution on the basis of the ‘authentic documents’, which, in light of Judgment in Pula Parking, will not be recognized and/or enforced in other Member States under the scheme of the Brussels I bis Regulation.

 

Consideration of the question referred and what can be learned from it

At paragraph 43 the Court reaffirms that the writs of execution issued by the Croatian notaries would not benefit from the scheme of the Regulation when it comes to their recognition and/or enforcement. At paragraph 44, the Court reminds that Judgment in Pula Parking does not imply, however, that the Brussels I bis Regulation prevents the notaries from issuing the writs of execution. The references to Judgment in Pula Parking pave the way for the conclusion that neither Article 18 of the TFUE (paragraph 45), nor Article 47 of the Charter (paragraph 53) preclude national legislation entitling the notaries to issue the writs of execution which do not benefit from the recognition/enforcement scheme of the Regulation.

Incidentally, given that according to Judgment in Pula Parking the notaries do not fall within the concept of ‘court’ within the meaning of the Brussels I bis Regulation, paragraph 43 seems to imply that a writ of execution based on a ‘authentic document’ would not be recognized and/or enforced as ‘judgment’ within the meaning of Article 2(a) of the Regulation.

Neither the joined cases in question, nor the case that led to Judgment in Pula Parking offered an opportunity to address the question whether a writ of execution issued by a notary could be enforced under the scheme of the Brussels I bis Regulation as an ‘authentic instrument’ in the sense of Article 2(c) of the Regulation. In any case, an ‘authentic document’ on which a writ of execution is based cannot, in my view, be automatically placed on the same footing as such ‘authentic instrument’. Therefore, a writ of execution would not necessarily have to be an ‘authentic instrument’ based on an ‘authentic instrument’.

For the sake of completeness, AG Bot touched upon a somehow similar question in the context of the Regulation No 805/2004 (Regulation on European Enforcement Order for uncontested claims) in his Opinion in the case C-484/15, Zulfikarpaši. At points 45 to 49, he considered that a writ of execution is not an ‘authentic instrument’ within the meaning of Article 3(1) of that Regulation because the writ does not concern an uncontested claim. That argumentation is in line with the interpretation that the Court presented in its Judgment in that case and in particular at its paragraph 55. However, such argumentation could most probably not be directly transposed to the Brussels I bis Regulation as this Regulation does not confine its scope solely to uncontested claims.

It is also worth noticing that the Judgment of 7 May 2020 makes a point that exceeds the scope of the inquiry on the implications of Judgment in Pula Parking for the Croatian legal system. At paragraphs 33 et seq., in the part of the Judgment of 7 May 2020 relating to the jurisdiction of the Court, the criteria set in Article 3(1) of the Regulation no 1896/2006 (Regulation on European Order for Payment) in order to define a ‘cross-border case’ within the meaning of that Regulation are referred to in order to establish the existence of an international element that is necessary for the Brussels I bis Regulation to become applicable to a specific case.

The requests for a preliminary ruling in the cases in question can be consulted here and here. For numerous linguistic versions of the Judgment see here (no English version yet).

by Jie (Jeanne) Huang, Sydney Law School

 

On 19 May 2020, the Supreme Court of New South Wales rendered the judgment in Bao v Qu; Tian (No 2) and decided to enforce a monetary judgment issued by the Qingdao Intermediate People’s Court of Shanghai Province, China. This is the first case at the state of NSW in Australia where a Chinese monetary judgment got enforced.

The Chinese judgment-rendering proceedings

Both plaintiff and the defendants are citizens of China. The two defendants were a couple. The defendants allegedly did not pay loans borrowed from the plaintiff. In 2014, the People’s Court of Laoshan District Qingdao handed down the first-instance judgment for the plaintiff. One defendant appealed. Both defendants were represented in the second-instance trial at the Qingdao Intermediate People’s Court of Shangdong Province (‘Qingdao Court’). The Qingdao Court rendered the final judgment (‘Chinese judgment’) ordering the defendants to pay RMB 2,050,000 plus interest to the plaintiff in 2015. The Chinese judgment was partly enforced in China but largely remained outstanding.

The NSW judgment-enforcement proceedings

The plaintiff applied to enforce the Chinese judgment at the Supreme Court of NSW in 2019 under the common law. The defendants are resident in NSW and were personally served with the court proceedings.

The defendants conceded that the Qingdao Court had jurisdiction, the Chinese judgment was final and conclusive, and they were judgment debtors. However, they alleged that a substantial amount of money had been returned to the plaintiff before the Chinese judgment was rendered. The plaintiff rejected this argument alleging that the defense went to the merits of the Chinese judgment that should not be reviewed by the NSW court at the judgment recognition and enforcement (‘JRE’) proceedings.

The NSW court holds that defendants submitted to the jurisdiction of Chinese court by their procedural conducts. There is no evidence of any step taken to challenge the Chinese judgment in China. The first issue at the NSW proceeding is whether the Chinese judgment is obtained by fraud. Namely, whether the Chinese court was intentionally or recklessly misled into determining the incorrect value of the debt by not being made aware of the alleged repayments. The NSW court held that one of the alleged repayments seemed to have been raised in the Chinese proceedings but ultimately rejected by the Chinese Court. No evidence showed that Chinese Court denied the defendants the opportunity to presenting their case before an impartial tribunal or that the defendants were otherwise not given due notice. There was also no evidence showing that the alleged repayments were not reasonably discoverable at the time of the Chinese proceedings. Further, nothing proved that the alleged repayments had ever occurred or were related to the loans decided in the Chinese judgment. In conclusion, NSW court rejected the alleged repayments and refused to review the merits of Chinese judgment.

The second issue focuses on the legal nature of the punitive interest awarded in the Chinese judgment. The Chinese judgment included two types of interests. The first is the general interest calculated at the ‘benchmark interest rate for the loans in the same type as issued by the People’s Bank of China for the same period’. The second is the punitive interest awarded according to Article 253 of Chinese Civil Procedural Law, being that ‘if the judgment debt was not satisfied by 20 September 2015, then “the interest on the debt during the period of delay in fulfillment shall be paid at the double amount”.’ The court held that no submissions were made that the imposition of Article 253 interest was penal in nature, so it should be awarded.

Comments

1. Reciprocity

China is not listed in the Foreign Judgments Act 1991 (cth), so Chinese judgments cannot benefit from the ex parte registration process. Nevertheless, Chinese judgments can be recognized and enforced under the common law in Australia. However, China requires de facto reciprocity. This is demonstrated by a reply issued by the Chinese Supreme People’s Court in 2006, which provides that judgments issued in Australia cannot be recognized and enforced in China because Australia has not offered reciprocity to Chinese judgments.[1] Liu v Ma & anor [2017] VSC 810 is the first Chinese monetary judgment recognized and enforced in the state of Victoria. By Bao, the NSW court also enforced a Chinese monetary judgment. Considering the recent JRE development in Australia, Chinese Supreme People’s Court should review the 2006 reply. De facto reciprocity should have been established between China and Australia (or at least the states of Victoria and NSW). Judgments issued in Australia should be recognized and enforced in China if they do not violate the basic principles of Chinese law and the sovereignty, security and public interest of China according to Article 282 of Chinese Civil Procedure Law.

2. The alleged repayment

According to the NSW court, the Chinese judgment indicates that the Chinese court ‘refuse[d] to consider this request [to reduce the judgment debt as a result of the alleged repayment of RMB 200,000]’ because this claim ‘exceeded the scope of the Appellant’s claim’. The Chinese court’s rejection does not violate natural justice. This is because according to Chinese Civil Procedure Law, an appeal should be brought within 15 days after the first-instance judgment is served. If a party fails to bring a claim within this time period, the party loses its right to appeal. In practice, some appellants may bring an appeal within the time limit without clearly listing the claims and later try to add new claims. This practice goes against the seriousness of appeal. It is also inconsistent with the fairness and efficiency of litigation because the respondent should be served with the new claim and given a reasonable time to prepare the defence. Therefore, as a general principle, Chinese courts do not consider a new claim if it is not raised in the appeal petition.[2]

3. Double interest

Australian courts do not enforce foreign punitive damages that aim to ‘penalise the [ ] defendant and to deter others from failing to comply with the Court’s orders’ (Schnabel v Lui [2002] NSWSC 15 at [176]). However, the courts can enforce punitive damages that were to compensate the plaintiff’s private right due to the defendant’s deliberate and callous conduct and involved no public connotation in the remedy (Benefit Strategies Group v Prider [2004] SASC 365 at [72]).

Article 253 of the Chinese Civil Procedure Law provides that ‘if the party against whom enforcement is sought fails to pay money within the period specified in the judgment, he or she shall pay double interest for the debt for the period of delayed performance.’

The double interest imposed by this provision intends to punish the defendant for the delay of executing the judgment and remedy the plaintiff’s private right. It is not for the public interest of Chinese state. Therefore, the court correctly decided that the double interest should be enforced at the NSW.

 

[1] Letter of Reply of the Supreme People’s Court on Request for Instructions Re Application of DNT France Power Engine Co., Ltd. for Recognition and Enforcement of Australian Court Judgment [2006] Min Si Ta Zi No 45.

[2] There are few exceptions to this general principle. For example, the respondent agrees to add the new claim to the trial, or the new claim involves a fact which must be investigated by the court rather than the parties and without the finding of this fact, the case cannot be correctly decided.

The most recent issue of the Revue Critique de Droit International Privé is out. It contains three articles and numerous case notes.

In the first article, Roxana Banu (Western Law, Canada) discusses the scholarship of J. Jitta  (L’idéalisme pragmatique de Josephus Jitta (1854-1925)).

 Jitta occupied a very specific intellectual space between universalism and particularism and between state-centric and individualistic theoretical perspectives. His scholarship formed a different, quite radical alternative to the dominant private international law theory and methodology of his time. He rejected the conventional understanding of Savigny’s method of localizing transnational legal matters, fundamentally contested the premise that one could choose a law in disregard of its content, and refused to center private international law’s theory on the concept of state sovereignty. Yet his initially radical ideas evolved in a more pragmatic direction on contact with the great socio-political transformations following the First World War. This progression of his thought provides us with much to learn, while calling at the same time for a critical approach.

In the second article, Vincent Heuzé (University of Paris I) challenges the soundness of the doctrine of overriding mandatory provisions and argues that it is illogical and useless (Un avatar du pragmatisme juridique : la théorie des lois de police).

Pragmatism, as a legal theory, revolves around the refusal “to let itself be enclosed” in any given “system”. Such theory refutes giving in to a model of logical thinking. The triumph of legal pragmatism is best illustrated in private international law by the theory of the overriding mandatory provisions. The latter concept –to the extent its outcome was held as a genuine method– in fact only served as to legitimate a pragmatic legal vision. Indeed, such legal pragmatism theory is necessarily false, not to say useless, to that extent that it is incapable of upholding the solutions she inspired.

Finally, in the third article, Ilaria Pretelli (Swiss Institute of Comparative Law) explores some of the consequences of the Feniks case of the CJEU (case C-337/17).

Four CJEU judgements have up to now clarified the applicability of the Uniform European jurisdiction rules – the Brussels I system – to the modern versions of actio pauliana: the two Reichert cases (cases C-115/88 and C-261/90) had said what the pauliana is not; the recent obiter dictum in Reitbauer (case C-722/17) and, more substantially, Feniks (case C-337/17) have said what it is. In essence, the CJEU confirms that actio pauliana is a claim related to a contract with the consequence that the defendant may be sued both at his domicile – under art. 4-1 Brussels I a – and, alternatively, at the forum of the “obligation in question” – – under art. 7-1 Brussels I a. These two decisions have been discussed and mainly criticized by legal scholars (see for instance these posts here and here). who have voiced the inherent dangers of accepting the risk for the defendant of being attracted in an unpredictable forum. The 2018 decision on Feniks has seemed to open the path to an even greater uncertainty since, of the two contractual relations giving the cause of action to the claimant, the CJEU seem to have given relevance to the one between the creditor and the debtor, thus a relation to which the defendant is formally excluded.

The need to scrutinise the substantial – instead of the purely formal – relation between the defendant and the claimant is at the core of an analysis of Feniks appeared in the first issue of this year’s Revue critique de droit international privé. The circumstances of the case show in an unequivocal manner how involved the defendant appeared to be in the tactical sale operated by the debtor. In this respect, the Spanish forum of the domicile of the defendant might have well created complications suitable for the fraud against the creditor to succeed. The particular structure of the pauliana, constructed to unmask apparently legitimate operations, justifies a departure from a strict and formal interpretation of “predictability”.

The first consequence drawn by the author of the comment concerns the potential comprehensiveness of the alternative fora described in art. 7 Brussels Ia.

The author sees no reasons to discriminate claimants because of the subject of their claim. If an alternative is given in most of civil and commercial matters, why shouldn’t it be given to one or two of these. What is essential, and what the CJEU constantly underlines, is the existence of a narrow connection between the claim and the forum. In Feniks, many elements testified of the narrowness of the connection (the identity of the parties, the language of their pacts etc.).

The second topic of the comment addresses the core problem of trilateral situations that arise from two distinct legal (bilateral) relations: the difficulty of choosing ex ante the “obligation in question” for the effects of art. 7-1 Brussels I a.

As the majority of scholars has rightly pointed out, whenever the defendant is in good faith, it is absolutely unfair to give to the claimant the possibility of suing him or her in front of an unpredictable judge, such as the judge of the unperformed contract to which the defendant has never been part.

Since the pauliana consists in the reaction to a fraudulent, albeit apparently legitimate, contract, its transposition in private international law commands to avoid an aprioristical choice and suggests to give to the judge in question the power to decide which “obligation in question” needs to be taken into account in order to avoid, on the one hand, to manipulate the system in order to uphold the fraud and, on the other hand, that the defendant is sued in a forum for him truly unpredictable.

This solution promotes “good faith” to a connecting factor in line with the existing series of content-oriented and result-selective conflicts rules.

In sum, despite the laconicism of the decisions and the understandable reticence of scholars to accept them, Feniks and Reitbauer have eventually opened the right path for a uniform European jurisdictional rule for the national versions of actio pauliana.

The full table of contents is available here.