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This post has been written by Anna Bleichenbacher, MLaw, University of Basel, Nievergelt & Stoehr Law and Notary Office (Switzerland).

The Swiss Federal Supreme Court (Bundesgericht) published a leading decision on recognition and public certification of foreign conversions of ancient law pay paternities (Zahlvaterschaften) into paternities with civil status effects on June 15th, 2023 (decision of Swiss Federal Supreme Court 5A_81/2022 of May 12th, 2023).

Respondent in the present case was a German citizen, living in Germany (respondent). She was born out of wedlock in 1967 and acknowledged by her father (father) in the same year, both in Germany. The acknowledgement included only a pay paternity. A pay paternity was a legal institution with an obligation to pay maintenance. The pay paternity did not include a legal child relationship recorded in the civil register.

According to the German law on the legal status of children born out of wedlock of August 19th, 1969 (law on children born out of wedlock), a father who has acknowledged his obligation to pay maintenance for a child in a public deed or an enforceable debt certificate, is seen as a legal father to child, recorded in the civil register, after the enforcement of the law on children born out of wedlock. In short, Germany knows the ipso iure conversion of the pay paternity into the paternity with civil status effects.

Switzerland also knows the legal institution of the pay paternity. However, Swiss law did not provide for ipso iure conversion of the pay paternity into a paternity with civil status effects.

The respondent’s father was a Swiss citizen, living in Switzerland. In 2016, he died, not only leaving behind the respondent, but also his wife and a common daughter (born in wedlock; appellants). In 2017, the respondent appealed to the Swiss civil status authorities, claiming the registration and public certification of the birth in Germany as well as the legal child relationship to the father. After exhaustion of the intra-cantonal appeal process, the appellants reach the Swiss Federal Supreme Court with two main arguments against the registration and public certification of the respondent’s legal child relationship to the father:

(1) Applicability of the Swiss Federal Act on Private International Law (PILA) in the present case

The PILA entered into force on January 1st, 1989. The appellants claimed that recognition and enforcement in the present case are governed by the respective law in force at the time of the respondent’s birth in 1967. This would be the Federal Act on Civil Law Relations of Settled Persons and Residents of June 25th, 1891. The Swiss Federal Supreme Court made clear that the date of the foreign decision or other legal act (i.e. the acknowledgment of the child) is irrelevant. The time at which the question of recognition and enforcement arises is decisive.

Therefore, the PILA is applicable for the present case.

(2) Violation of the Swiss Ordre Public in case of recognition and public certification

The PILA supports the recognition and enforcement of foreign decisions and other legal acts by the principle “in favorem recognitionis”. A foreign child acknowledgment is recognized in Switzerland if it is valid in form and content in one of the jurisdictions named in Art. 73 para. 1 PILA. These include the state of the child’s habitual residence, the child’s state of citizenship or the state of domicile or of citizenship of the mother or the father.

As mentioned above, the legal child relationship between the respondent and the father is based on the acknowledgment of the father in 1967 and the ipso iure conversion of the pay paternity into a paternity with civil status effects. The validity of this conversion in Germany has been proven by German civil status documents of the respondent.

Since Germany is a jurisdiction in the sense of Art. 73 para. 1 PILA, and the child acknowledgment is valid there, Switzerland will only refuse the recognition and public certification in case of violation of Swiss Ordre Public.

The Swiss Federal Supreme Court stated that, just because Swiss law does not provide for ipso iure conversion of the pay paternity, a German legal act on paternity valorization does not violate Swiss Ordre Public. This is mainly because both jurisdictions aim for a similar purpose, namely the equality of children born out of wedlock. In an obiter dictum, the Swiss Federal Supreme Court even doubts the conformity of Swiss regulation with fundamental rights.

In summary, the recognition and public certification of a German ipso iure converted pay paternity into a paternity with civil status effects does not violate the Swiss Ordre Public. In application of the PILA, Swiss civil status authorities are obliged to carry out the post-certification of such legal child relationship.

The latest issue of RabelsZ has just been released. It contains the following contributions:

OBITUARY

Eva-Maria Kieninger, Ralf Michaels: Jürgen Basedow * 29.9.1949 † 6.4.2023, pp. 229–235, DOI: 10.1628/rabelsz-2023-0051

ESSAYS

Felix Berner: Implizite Qualifikationsvorgaben im europäischen Kollisionsrecht, pp- 236–263, DOI: 10.1628/rabelsz-2023-0028

Implicit Characterization in European Conflict of Laws. – Most German scholars assume that problems of characterization in European choice of law are to be resolved by means of functional characterization. This essay challenges that assumption. Quite often, European choice-of-law rules themselves require a certain treatment of a characterization problem. This can follow from the rules or recitals of European regulations. In such cases, the required approach is more or less explicitly given. However, the required analysis can also be implicitly established, especially when it is derived from the purpose of certain choice-of-law rules. The approach towards characterization is of both practical and theoretical significance. In practice it determines the outcome of a characterization inquiry. On a theoretical level, the approach towards characterization embodies a conceptual change: The more rules on characterization there are, the more the classic problem of characterization is marginalized. Questions of characterization turn into questions of “simple statutory interpretation”.

Frederick Rieländer: Die Anknüpfung der Produkthaftung für autonome Systeme, pp. 264–305, DOI: 10.1628/rabelsz-2023-0032

The Private International Law of Product Liability and AI-related Harm. – As the EU moves ahead with extensive reform in all matters connected to artificial intelligence (AI), including measures to address liability issues regarding AI-related harm, it needs to be considered how European private international law (PIL) could contribute to the EU’s objective of becoming a global leader in the development of trust-worthy and ethical AI. To this end, the article examines the role which might be played in this context by the conflict-of-law rule concerning product liability in Article 5 of the Rome II Regulation. It shows that the complex cascade of connecting factors in matters relating to product liability, although providing legal certainty for market players, fails to consistently support the EU’s twin aim of promoting the up-take of AI, while ensuring that injured persons enjoy the same level of protection irrespective of the technology employed. Assessing several options for amending the Rome II Regulation, the article calls for the introduction of a new special rule concerning product liability which allows the claimant to elect the applicable law from among a clearly defined number of substantive laws. Arguably, this proposal offers a more balanced solution, favouring the victim as well as serving the EU’s policies.

Tim W. Dornis: Künstliche Intelligenz und internationaler Vertragsschluss, pp. 306–325, DOI: 10.1628/rabelsz-2023-0043

Artificial Intelligence and International Contracting. – Recently, the debate on the law applicable to a contract concluded by means of an AI system has begun to evolve. Until now it has been primarily suggested that the applicable law as regards the “legal capacity”, the “capacity to contract” and the “representative capacity” of AI systems should be determined separately and, thus, that these are not issues falling under the lex causae governing the contract. This approach builds upon the conception that AI systems are personally autonomous actors – akin to humans. Yet, as unveiled by a closer look at the techno-philosophical foundations of AI theory and practice, algorithmic systems are only technically autonomous. This means they can act only within the framework and the limitations set by their human users. Therefore, when it comes to concluding a contract, AI systems can fulfill only an instrumental function. They have legal capacity neither to contract nor to act as agents of their users. In terms of private international law, this implies that the utilization of an algorithmic system must be an issue of contract conclusion under art. 10 Rome I Regulation. Since AI utilization is fully subject to the lex causae, there can be no separate determination of the applicable law as regards the legal capacity, the capacity to contract or representative capacity of such systems.

Peter Kutner: Truth in the Law of Defamation, pp. 326–352, DOI: 10.1628/rabelsz-2023-0038

This article identifies and examines important aspects of truth as a defence to defamation liability in common law and “mixed” legal systems. These include the fundamental issue of what must be true to establish the defence, whether the defendant continues to have the burden of proving that a defamatory communication is true, the condition that publication must be for the public benefit or in the public interest, “contextual truth” (“incremental harm”), and the possibility of constitutional law rules on truth that are different than common law rules. The discussion includes the emergence of differences among national legal systems in the operation of the truth defence and evaluation of the positions that have been adopted.

 

BOOK REVIEWS

As always, this issue also contains several reviews of literature in the fields of private international law, international civil procedure, transnational law, and comparative law (pp. 353–427).

Diamedica Therapeutics Inc v Pharmaceutical Research Associates Group BV NCC22/018 ECLI:NL:RBAMS:2023:2540 highlights the IMHO troubled Rome I implications for property rights as opposed to contractual rights. The judgment was issued by the NCC, the Netherlands Commercial Court. (The NCC origin also explains the judgment already being available in English).

The claim is one for revindication by PRA of documents and digital data pertaining to the clinical trials regarding a medicine developed by DiaMedica. The court held that whereas the contractual relationship between the parties is governed by the laws of the State of New York as the lex voluntatis (the law parties chose to apply to the contract), Dutch law governs the question whether a property right can be created on documents and data situated in the Netherlands.

In discussing the applicable law issues, the court in my view lacks the clarity of approach required in this area, particularly seeing as a State’s approach towards digital data clearly is an important element in the attractiveness of its contract law for the sector.

[4.5] the Court holds that per Article 3(1) Rome I, the lex voluntatis, the laws of New York, covers the interpretation of the agreement. This includes the existence of a right to suspend contractual obligations, here: whether PRA may retain the Documents or suspend surrendering the Documents in order to secure payment of its final invoice. It equally holds however that the existence of a property right (footnotes omitted)

is not a matter of contract but a matter of property law. The Rome I Regulation is not applicable. As there is no treaty or regulation guiding this issue, the rules of Dutch domestic private international law apply. Under Article 10:127(1) of the Dutch Civil Code (DCC) the property law regime relating to things, as a rule, is the law of the state in whose territory the thing is situated (the lex rei sitae). The ‘thing’ in question are the Documents which are situated in the Netherlands. Therefore, Dutch law governs the manner in which rights in rem arise, whether such rights can be created, and if so, what the requirements are for a transfer or creation of rights (Article 10:127(4) DCC). Also, the question whether a revindication claim can be initiated, and if so by whom, is governed by the lex rei sitae. Hence: Dutch law.

, leading to a finding in favour of DiaMedica on the basis of Dutch law.

The merits of the case are not of interest to this blog: the identification of applicable law to the property rights, is. The NCC’s analysis shows the difficulty with the in my view unsatisfactory, if seemingly solidly rooted (see the Guiliano-Lagarde Report most succinctly p.10; Dicey 33-033 and 33-054; other standard works pay less attention to the issue) conclusion that ‘property’ rights are not caught by the Regulation, only contractual rights. See here nota bene for an Opinion of Vlas AG for the Dutch Supreme Court, flagging that in restitution cases the analysis may be more complicated than the NCC in current case suggests.

In the discussion of digital assets in particular (see eg here re UNIDROIT work on same, and here for the UK Law Commission paper), the property rights element surely is essential. This in my view gives those States with lex voluntatis also covering the property aspects (such as arguably Belgium’s residual private international law rules) an edge when it comes to regulatory competition in the area.

Nota bene just this morning, professor Lehmann posted a paper on the wider issue, calling for people to drop focus on the property analysis. Rebus sic stantibus however, the issue of relevance in the case here, remains: parties in my view would do well to identify a lex contractus which encompasses property rights in party autonomy. Unusually perhaps and most probably not by design, this makes laws such as those of Belgium, a clear winner (whether as lex contractus for the whole contract of merely, by way of dépeçage, for the property aspects only).

Geert.

May personal data be subject to property rights?
Challenging 1st instance decision A'dam

Revindication of documents and data. Ownership over digital data in clinical trials
Held despite NY law as lex contractus per Rome I to be subject to NL property law https://t.co/pC6N9sAuZ3

— Geert Van Calster (@GAVClaw) April 28, 2023

Matthias Lehmann (University of Vienna) has made available on SSRN a new paper with the title Who Owns Bitcoin? Private Law Facing the Blockchain.

The abstract reads as follows:

Blockchain, or “distributed ledger” technology, has been devised as an alternative to the law of finance. While it has become clear by now that regulation in the public interest is necessary, for example to avoid money laundering, drug dealing or tax evasion, the particularly thorny issues of private law have been less discussed. These include, for instance, the right to reverse an erroneous transfer, the ownership of stolen coins and the effects of succession or bankruptcy of a bitcoin holder. All of these questions require answers from a legal perspective because the technology ignores them.
Particular difficulties arise when one tries to apply a property analysis to the blockchain. Surprisingly, it is far from clear how virtual currencies and other crypto assets are transferred and acquired. The traditional requirements posed by private law, such as an agreement between the parties and the transfer of possession, are incompatible with the technology. Moreover, the idea of a “void” or “null” transfer is hard to reconcile with the immutability that characterizes the blockchain.
Before any such questions can be answered, it is necessary to determine the law governing blockchain transfers and assets. This is the point where conflict of laws, or “private international law”, comes into play. Conflicts lawyers are used to submitting legal relations to the law of the country with the most significant connection. But seemingly insurmountable problems occur because decentralized ledgers with no physical connecting factors do not lend themselves to this type of “localization” exercise.
The issue of this paper therefore is: How can blockchain be squared with traditional categories of private law, including private international law? The proposal made herein avoids the recourse to a newly fashioned “lex digitalis” or “lex cryptographica”. Rather, it is suggested that the problems can be solved by using existing national laws, supplemented by an international text. At the same time, the results produced by DLT should also be accepted as legally protected and corrected only where necessary under the applicable national rules. In this way, a symbiosis between private law and innovative technology can be created.

Written by Phoebe Winch, Secretary of International Law Association (ILA) Australian Branch.

 

The Australian Branch is now calling for submissions for the 2023 Brennan Essay Prize in Public International Law and the Nygh Essay Prize in Private International Law.

The prizes are awarded for essays that demonstrate outstanding scholarship and make a distinct contribution to the field of public international law and private international law (conflict of laws), respectively. Essays for the prize to be awarded in 2023 should be sent to the email address of the Secretary of the Australian Branch at secretary@ila.org.au.

Further details (including conditions of entry) are available here. The deadline for submission is: 15 July 2023.

The results will be made available on the website of the ILA (www.ila.org.au) on approximately 31 August 2023. Winners will be notified by email. 

Ligue des droits humains (Vérification du traitement des données par l’autorité de contrôle)
Selon l’avocate générale Medina, une personne concernée doit disposer d’un recours juridictionnel contre une autorité de contrôle indépendante lorsqu’elle exerce ses droits par l’intermédiaire de cette autorité

Friends of the Irish Environment (Possibilités de pêche supérieures à zéro)
Agriculture
Surpêche : l’avocate générale Ćapeta estime que le règlement de base relatif à la politique commune de la pêche impose au Conseil de fixer des limites de pêche à des niveaux durables à partir de l’année 2020

Kočner / Europol
Principes du droit communautaire
Avocat général Rantos : Europol et un État membre dans lequel s’est produit un dommage en rapport avec un traitement illicite de données peuvent être solidairement responsables

Silver e.a. / Conseil
Citoyenneté européenne
Rejet définitif des recours de citoyens britanniques contestant la perte de leurs droits de citoyens de l’Union en conséquence du Brexit

Thermalhotel Fontana
Sécurité sociale des travailleurs migrants
La libre circulation des travailleurs s’oppose à la réglementation d’un État membre conditionnant une indemnisation à l’imposition d’une mesure de confinement par ses propres autorités administratives

Bank M. (Conséquences de l’annulation du contrat)
Rapprochement des législations
Le droit de l’Union ne s’oppose pas à ce que, en cas d’annulation d’un contrat de prêt hypothécaire entaché de clauses abusives, les consommateurs demandent à la banque une compensation allant au-delà du remboursement des mensualités versées

Tobias Lutzi (University of Augsburg), Ennio Piovesani (University of Turin), Dora Zgrabljic Rotar (University of Zagreb) edited a book titled Jurisdiction Over Non-EU Defendants – Should the Brussels Ia Regulation be Extended?, with Bloomsbury.

The book is the result of the third project of the EAPIL Young Research Network.

This book looks at the question of extending the reach of the Brussels Ia Regulation to defendants not domiciled in an EU Member State. The Regulation, the centrepiece of the EU framework on civil procedure, is widely recognised as one of the most successful legal instruments on judicial cooperation. To provide a basis for the discussion of its possible extension, this volume takes a closer look at the national rules that currently govern the question of jurisdiction over non-EU defendants in each Member State through 17 national reports. The insights gained from them are summarised in a comparative report and critically discussed in further contributions, which look at the question both from a European and from a wider global perspective. Private international lawyers will be keen to read the findings and conclusions, which will also be of interest to practitioners and policy makers.

The table of contents is available here.

La reconnaissance d’un enfant issu d’une assistance médicale à la procréation (AMP) avec tiers donneur peut être contestée et annulée lorsqu’elle a été pratiquée après la cessation de la communauté de vie ou le dépôt d’une demande en divorce.

Sur la boutique Dalloz Droit de la famille 2023/24 Voir la boutique Dalloz

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The Ministry of Justice of Japan (MOJ), Civil Affairs Bureau, in cooperation with the Japan Commercial Arbitration Association (JCAA) and supported by CIArb East Asia Branch, Japan Association of Arbitration (JAA), Japan International Dispute Resolution Center (JIDRC), is organizing an international symposium (hybrid format) on the “Future Prospects of International Arbitration and Mediation: How does the Judiciary Assist?”.

This event could not have been more timely as the House of Councillors (the upper house of the Japanese Diet) unanimously passed and enacted into law on 21 April of this year the amendments to the Arbitration Act and the “Act for the Implementation of Settlement Agreements Resulting from Mediation” (the “Singapore Mediation Convention Implementation Act”). These enactments aim to promote international arbitration and mediation in Japan and to make Japan an attractive hub for international dispute resolution in competition with other leading centers in the region.

 

Date, Venue & Formats:

July 7 (Fri.), 2023, 9am-12:30 pm (JST)

Hotel New Otani Tokyo?ONSITE / Online?

Language: English

English-Japanese consecutive interpretation available

Program (see link below):

Keynote Speeches

Panel Sessions

Registration: free

Sign up on the Official Website of the Forums

by 6pm, JUNE 26 (Mon.) for ONSITE participation,

by noon, JULY 3 (Mon.) for Online participation

 

Details of registration and the program can be found here.

In Kvist v GippsAero Pty Ltd & Anor [2023] VSC 275, Dixon J refused an application for forum non conveniens in a judgment that is good material for the comparative conflict of laws binder.

On 14 July 2019, at Storsandskar near Umeå in Sweden, a small plane being used for skydiving crashed, resulting in the deaths of the pilot and all eight passengers on board. Claimants are relatives of some of the victims of the crash, and they claim damages from the defendants for negligence. None of the claimants reside in Australia. Apart from 2, who are American, all claimants are Swedish. Defendants are incorporated in Australia and carry on business in Gippsland, Victoria. The first defendant (Gippsareo) manufactured the Airvan GA8-TC 320 in 2012. Second defendant GA8 Airvan holds the ‘Type Certificates’ that certify the Airvan meets the requisite standards for airworthiness. Certificates were issued to the second defendant by the Australian Civil Aviation Safety Authority, the European Safety Authority, and the US Federal Aviation Authority in respect of the aircraft.

Gippsaero sold the Airvan to a Swedish company, GCC Capital, a financier, on 17 May 2013. The parent companies of GCC Capital AB were placed in liquidation on 2 December 2021. At the time of the crash, the Airvan was owned by a Swedish company called Skydive Umea AB (a customer of GCC Capital). Skydive Umea AB was placed in liquidation on 5 October 2022. It held, apparently, a policy of insurance in respect of the plane. The Airvan was being used by Umeå Parachute Club from Umeå airport in Sweden. The Umeå Parachute Club is a non-profit association.

An earlier Swedish claim (seemingly wrongly invoking the Montreal Convention) was withdrawn, meaning there are no competing Swedish proceedings afoot. Claimants allege the defendants were negligent in failing to include critical information in an operating manual supplied with the aircraft at the time of purchase and in failing to ensure the aircraft was suitable for parachuting operations. Passengers in the aircraft moving rearwards preparing to skydive altered the weight distribution in the aircraft in a manner that required a critical response from the pilot, a response the pilot did not adequately provide.

[11-12] the Australian proceedings are used to take advantage of common law discovery rules. Preliminary expert evidence indicates an Australian judgment might not be enforceable in Sweden (odd, I find) however could be used for evidentiary purposes in subsequent Swedish proceedings.

[19] ff the factors suggesting forum non are listed. This includes the suggestion that Victoria is a clearly inappropriate forum because the lex loci delicti indicates that the lex causae is Swedish law. This is directly contradicted by claimants [32] ff,  who argue the lex loci delicti is Victoria.

The judge discusses [42] ff, insisting ia [46] that the distinction between the English ‘more appropriate forum’ test [the away forum being a more appropriate forum, GAVC]  and the ‘clearly inappropriate forum’ test applicable in Australia [whether the home, Australian forum is clearly inappropriate, GAVC] is important. [56] ia evidentiary advantages to claimant are listed as kosher for jurisdictional purposes. [78] Swedish ‘advice’ that Swedish law will be the lex causae is dismissed, seemingly for it was utterly incomplete and without much justification. [82] the Airvan was built in Australia and intended for worldwide use. All of the manuals and certifications originated from Australia and have just been adapted where required to ensure registration was permissible in Europe or America, wherever the aircraft might be. [84] The relevant actions of the defendants were antecedent to the sale and to the characteristic of the sale on which the defendants rely for their contentions. The aircraft was designed, the manual was written, and in relevant respects, the fit out of the aircraft was set, well before the sale of the Airvan to Sweden.

[89] The judge concludes that at this point [for the purposes of the forum non analysis, GAVC] he is satisfied that the substantive law of the (Australian) forum is the lex causae.

A good illustration of the role of the likely lex causae in forum non.

Geert.

Claimants allege defendants' negligence in failing to include critical information in operating manual at time of purchase and in failing to ensure the aircraft was suitable for parachuting operations.
Lively lex causae discussions expected at trial. https://t.co/pkRAibZMNd

— Geert Van Calster (@GAVClaw) June 5, 2023

The Council of the European Union adopted on 9 June 2023 a political agreement on the proposal for a directive on the protection of persons who engage in public participation from manifestly unfounded or abusive court proceedings, also known as strategic lawsuits against public participation (SLAPPs).

Based on this common position, the Council will now start discussions with the European Parliament with a view to settling on the final text of the directive.

The text resulting from the Council’s general approach departs from the initial proposal (analysed by Marta Requejo in a previous post on this blog), in various respects. The suggested changes have been presented as underlying a concern for  more balanced solutions, and for increased discretion left to national courts, but have been criticised by some stakeholders as involving a watered-down compromise.

The most significant innovations include the following.

The Council, while agreeing that the future directive should apply only to matters with cross-border implications,  advocates the suppression of the provision in the Commission’s proposal that defined what matters should be considered to have such implications.

According to Article 4 of the proposal, a matter ought to be considered to have cross-border implications “unless both parties are domiciled in the same Member State as the court seised”. The proposal added that, where both parties are domiciled in the same Member State, the matter would still be deemed to have cross-border implications if (a) the act of public participation targeted by the SLAPP “is relevant to more than one Member State”, or (b) the claimant have initiated concurrent or previous proceedings against the same defendants in another Member State.

The rule providing early dismissal of manifestly unfounded claims should, according to the Council, be rephrased as follows: 

Member States shall ensure that courts may dismiss, after appropriate examination, claims against public participation as manifestly unfounded at the earliest possible stage, in accordance with national law.

The proposed rewording includes language that was not in the initial proposal (“after appropriate examination”, “at the earliest possible stage, in accordance with national law”). Conversely, the Council’s text fails to retain the paragraph in the initial proposal according to which “Member States may establish time limits for the exercise of the right to file an application for early dismissal”, provided that such time limits are “proportionate and not render such exercise impossible or excessively difficult”.

The Council further suggests the deletion of the provision in the proposal which asked Member States to “ensure that if the defendant applies for early dismissal, the main proceedings are stayed until a final decision on that application is taken”.

According to the Council, the provision on compensation in the Commission’s proposal should likewise be suppressed (arguably, because it was considered to be unnecessary, in light of the existing law). It read as follows:

Member States shall take the necessary measures to ensure thata natural or legal person who has suffered harm as a result of an abusive court proceedings against public participation is able to claim and to obtain full compensation for that harm.

The Council also seeks to modify the wording of the provision in the initial proposal whereby Member States should deny recognition to judgments given in a third State in the framework of a SLAPP brought against natural or legal person domiciled in the Union. The amended version of the provision no longer refers to violation of public policy as the reason for non-recognition.

As regards jurisdiction, the text agreed by the Council retains the rule whereby those targeted by a SLAPP brought in a third State should be able to seek compensation in the Member State of the courts of their domicile, for the damages and the costs incurred in connection with the proceedings in the third country, but adds that Member States “may limit the exercise of the jurisdiction while proceedings are still pending in the third country”.

Finally, according to the Council’s general approach, the Member States should be given three years, instead of two as initially contemplated, to implement the directive in their legal systems.

Dans un contexte de « course à la réglementation » de l’intelligence artificielle, la Commission européenne avait publié un projet de règlement amendé, en réaction aux intelligences artificielles génératives qui ont inondé le marché au cours des derniers mois. Le Parlement devrait arrêter sa position de négociation lors de la session plénière du 12 au 15 juin 2023, après quoi des discussions commenceront avec les pays de l’Union européenne au sein du Conseil sur la forme finale de la loi.

Sur la boutique Dalloz Code de la protection des données personnelles 2023, annoté et commenté Voir la boutique Dalloz

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While doing research on a choice of law article, I found it necessary to consult a book generally co-edited by Professors Daniel Girsberger, Thomas Graziano, Jan Neels on Choice of Law in International Commercial Contracts (‘Girsberger et al’). The book was officially published on 22 March 2021. I began reading sections of the book related to tacit choice of law sometime in December 2022 and found the work truly global and compelling. At the beginning of June this year, I decided to read the whole book and finished reading it today. It is 1376 pages long!

To cut the whole story short, the book is the bible on choice of law in international commercial contracts. It covers over 60 countries, including regional and supranational bodies’ rules on choice of law. Professor Symoen Symeonides had previously written a single authored award winning book on Codifying Choice of Law Around the World, but that work did not cover as much as Girsberger et al’s book in terms of the number of countries,  and regional and supranational instruments (or principles) covered.

The book arose from the drafting of the Hague Principles on Choice of Law in International Commercial Contracts, headed by Professor Girsberger and commissioned by Professor Marta Partegas. The central aim of the Hague Principles is to promote party autonomy, as the Hague Principles does not touch on the law applicable in the absence of choice.

The book starts with a general comparative outline of choice of law around the world and its comparison to the Hague Principles. This outline is derived from the works of many other scholars in the book. In other preliminary chapters, there are discussions devoted to party autonomy, provenance of the Hague Principles, roadmap to promoting the Hague Principles, international commercial arbitration, and perspectives from UNIDROIT and UNCITRAL.

The essential part of the book focuses on regional and national reports of countries around the world, with a focus on comparison to the Hague Principles. The format used is consistent, and easy to follow for all the reports in this order: introduction and preamble, scope of the principles, freedom of choice, rules of law, express and tacit choice of law, formal validity of the choice of law, agreement on the choice of law and battle of forms, severability, exclusion of renvoi, scope of the chosen law, assignment, overriding mandatory rules and public policy, establishment, law applicable in the absence of choice, and international commercial arbitration.

The Hague Principles has been successful so far given the regional or supranational bodies such as Asia,[1] and Latin America[2] that have endorsed it. From 31st May to 3 June 2023, the Research Centre for Private International Law in Emerging Countries in University of Johannesburg held a truly Pan-African Conference on the African Principles on Choice of Law in International Commercial Contracts.[3] Many African scholars (including myself) and some South African government officials were present and spoke in this very successful conference. The African Principles also draws some inspiration from the Hague Principles, which involved the participation of African scholars like Professors Jan Neels and Richard Frimpong Oppong.

Girsberger et al’s book and the Hague Principles success so far may be due to the more inclusive approach it took, rather than other Hague Conventions that are not fully representative of countries around the world, especially African stakeholders.

More please.

[1] Asian Principles on Private International Law 2018.

[2] Guide of the Organization of American States on the Applicable Law to International Commercial Contracts 2019

[3] See generally JL Neels and EA Fredericks, “An Introduction to the African Principles of Commercial Private International Law”(2018) 29 Stellenbosch Law Review 347; JL Neels, ‘The African Principles on the Law Applicable to International Commercial Contracts – A First Drafting Experiment’ (2021) 25 Uniform Law Review 426, 431; JL Neels and EA Fredericks, ‘The African Principles of Commercial Private International Law and the Hague Principles’ in Girsberger et al  paras 8.09-8.11.

 

This post was written by Cécile Pellegrini who is Associate Professor at Lyon Catholic University (UCLy). It summarises a contribution to Metaverse and the Law, edited by L. Di Mateo and M. Cannarsa, Edward Elgar Publishing, forthcoming.

The Metaverse Beyond Real Life

Beyond the world as we know it, often referred to by the acronym “IRL” (for “In Real Life”, stands the so-called “Metaverse”, a concept that private international lawyers are only beginning to embrace.

Coined 30 years ago in the prophetic “Snow Crash” dystopic novel by Neil Stephenson, this Janus, both fearsome and full of promises, was described as a “form of human life and communication in a virtual three-dimensional space through a digital avatar”. Since the digital twins of Second Life (i.e. a free access software allowing users to embody virtual characters in a world created by the residents themselves) Metaverse has taken many shapes. Beyond its known main use as an online multiplayer 3D game (such as Fortnite and Roblox) empowered by virtual and augmented reality (“VR” and “AR”), it has already found numerous applications evolving from being “a place” to shop, work, advertise, buy virtual land, be educated or trained, get a doctor’s appointment, get married, attend a court hearing, travel, be entertained, trade and use cryptocurrencies, sell real-world goods virtually or create and use nonfungible tokens (“NFTs”). The list could go on.

Despite its growing importance, highlighted with the recent rebranding of Meta, the Metaverse is neither defined nor  regulated. Attempts to streamline common features differ from one expert to another (for e.g., see here, here and here). However, all retain the persistence of identity and objects, a shared environment, the use of avatars, synchronization, being three-dimensional, interoperability, and a user experience that is interactive, immersive, and social. For now, the word “Metaverse” itself appears as a catchall term for advanced technologies that point to these types of immersive virtual experiences accessible from anywhere in the world. In consequence, it calls for a more precise and common definition, especially in the perspective of its regulation.

The Metaverse Beyond Borders

Considering the international intrinsic nature of Metaverse litteraly located “beyond the universe”, conflict of laws questions are necessarily in order. Especially considering that such a transnational cyberspace is destined to become the privileged place of many international transactions bringing ineluctably their lots of conflicts. In the absence of international substantial regime, conflict of laws rules are called upon to play a decisive part in the identification of the applicable legal regime to those transactions.

The Metaverse or Several Metaverses?

Yet, when trying to consider the applicable law, there is no certainty on whether to address the Metaverse as a whole, the metaverses’ operators (many metaverses’ iterations exist, such as Decentraland, Sandbox, Roblox, or Horizon World) or the various situations arising from, or in the Metaverse. Indeed, a metaverse could either be seen as an online platform or as the future generation of our internet, i.e. the forthcoming Web3, following Web1 (accessing static webpages) and Web2 (interactive social experiences). Web3, which is a work in progress, will be about digital ownership within an open, decentralized environment and orchestrated with tokens. Whether we are looking at one single Metaverse (with a capital letter like “the Internet”) or at several metaverses (with a lower case as it refers to the technology) depends essentially on the metaverses’ interoperability. Several projects are working in that direction (such as Open Metaverse Interoperability Group, the web standardization body W3C, or Metaverse Standards Forum). If the various existing metaverses become interoperable in a close future, it will inter alia  allow for any transaction taking place in a given virtual world to be transferred in another. Enabling users to switch between multiple virtual reality platforms while “carrying” online properties together will become important, as users will be able to seamlessly switch between various platforms. This will facilitate users to engage in various projects that are taking place on multiple platforms. For instance, a user buying virtual items in the form of NFTs and obtaining titles in one virtual world will technically hold the same items in another virtual world. An avatar with a digital identity in one place would be the same in the other, and he/she could go from a work meeting in one virtual place to another.

For now, the single “Metaverse”, called for by all the prophetic dystopias and the Silicon Valley behemoths has given way to many growing virtual worlds unconnected one to another. There might still be a long way to go to develop the necessary access technologies before we can affirm the existence of a global Metaverse but its future existence seems ineluctable. Hence, the applicable legal framework to Metaverse depends on whether we consider the actual various existing metaverses as online platforms or if we take a prospective view, and already consider the upcoming unique “Metaverse”.  Based on those two scenarios, the conflict of laws solutions differ.

Metaverse as a Platform: The Growing Importance of the “Directed Activity Criterion” and its Inadequacy

Most of the metaverses behave like online platforms. As such, they feature a contract-based architecture where accepting general terms and conditions (“GTCs”) is most of the time a prerequisite to access their services. Far from being an extraterritorial creation with its private own rules – as called for by proponents of Lawrence Lessig – such terms and conditions, whenever the contract is concluded with a European user-consumer, may trigger the application of EU protective rules for consumers, regardless of the defendant’s domicile outside the Union.

This scenario is increasingly frequent since the exchange of personal data is deemed equivalent to a price and constitutes consideration (in particular based on Directive (EU) 2019/770 regarding the supply of digital content and digital services, Art. 3.1). As a consequence, the contractual relationship between the services’ provider and the user answers to the European definition of a B2C contract. It will especially be the case when the activity of the platform is directed toward European consumers-users. Such rules are far from being ignored by large players.

For example, Meta’s T&C’s choice of jurisdiction clause conforms with EU consumer protection as it cares to distinguish conditions for businesses from conditions for consumers  especially when they are in the EU. The Brussels I Recast Regulation helds the protective forum of the consumers domicile competent, whenever the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, (Brussels I Recast, Art. 17 & 18). In the same time, any choice of jurisdiction clause is strictly regulated (Brussels I Recast, Art. 19). A choice of law in Metaverse’s T&C is also limited by the protective rules of Rome I Regulation and especially, Article 6 on Consumer contracts, which also resorts to the “directed activity” criterion as interpreted by the Pammer and Alpenhof case law (see Rome I Reg., Recital 24).

With this view, all the difficulties already encountered to define connecting factors regarding applicable law to online service operators are not new. As an example (outside the B2C legal sphere), we can just think of the difficulty to establish the place of performance of an immaterial service in a metaverse. The “directed activity” criterion can be criticised for its imprecision and growing inadequacy with the development of worldwide websites intended for a global audience. Pushed to the extreme, this criterion becomes completely irrelevant in the case of a unique interoperable Metaverse, that, contrary to a website which can answer to indications as to whether it addresses to a specific national audience, addresses a worldwide audience with no distinction. We can observe that the inadequacy of this “directed activity” criterion is progressively leading to a shift toward “unilateral extraterritorial European protection” (as already noticed on this blog in the context of the Digital Services Act).

EU Regulation of Metaverses’ Platforms Operators

Depending on the metaverse in question and the way it operates, the definition of platform could well be retained for the purposes of applying European Regulations. When they answer the definition, platforms operators are facing growing EU substantial-law regulations with extraterritorial effects, whether it is the P2B platform (see esp. Recital 9), the GDPR (Art. 3), the recent “European constitution for the Internet” combining the DSA (Art. 2.1) and DMA (Art. 1.2), the proposed ePrivacy Regulation (Art. 3.1) or the proposed Data Act (Art 1.2).

These EU instruments follow a strict “marketplace” approach  subjecting every service aimed at people located within EU territory to their provisions, independently of where the service operator is established or administered. This clearly reflects the will of the European legislator to ensure the primacy of EU internal market law and the protection of EU fundamental rights, underpinned by the European values in the digital space. Worldwide service providers aiming at the European market should be held under high European standards such as a high level of consumer protection and personal data protection. But in the future, metaverses’ operators could well be merged into a unique Metaverse and in that case, the question of applicable law will appear somehow differently.

Metaverse Considered as the Future Web3: A Methodology Shift?

No unique legal category applies to Internet as such. EU Private International Law rules rather approach each legal situation/relationship arising out of this “cyberterritory” (see eg here). In that view, it could be considered that determining the law applicable to online situations in the Metaverse merely bring the same difficulties already met with Internet’s situations ‘immateriality’. For example, it is difficult to resort to the “place of provision of service” connecting factor to determine the applicable law to an online contract of provision of service or the use of the “place of the harmful event” connecting factor in order to locate the law of the damage when a tortious situation is committed online that is everywhere at the same time on the globe.

These difficulties are known of PIL experts and sometimes found solutions. In order to answer these new digital situations, conflict of laws rules adapted progressively. In the absence of tangible material elements, the classic solutions have consisted in detaching localisation from material reality. Fictitious location have been favored considering that it remains possible to give a territorial account of immaterial phenomena still marked by some tangible elements. For instance, the difficulties of locating harmful situations in digital spaces has led to shift toward more personal connections as fictional localisations to identify the seat of digital situations. These connections often favor thevictim’s or plaintiff’s center of interests and such a tendency is particularly spreading in the area of cybertorts (see the Roundtable on the method of localisation in digital space). However, such adaptation is reaching its limits. With the upcoming Metaverse, even the few existing tangible connections disappear,with the new underlying use of the blockchain technology, often seen as the bedrock on which Metaverse will rest.

Blockchain as the Metaverse’s Bedrock

The question of how the different blockchains will be able to become technically interoperable is not yet settled, but blockchain technology will contribute to the interoperable development of the Metaverse and to generate a virtual economy where nonfungible tokens (NFTs) are traded. For all the new possibilities it bring, blockchain technology will be the privileged way within metaverses to make all type of transactions, using cryptocurrencies, tokens and associate the later with smart contracts.

The use of crypto-currencies has already given rise to questions about the identification of the applicable law and resulted in Europe in the recent “MICA” Regulation. For crypto assets left out of the text, and in expectation for some States to adopt the recent Unidroit Principles on Digital Assets and Private Law, it is it far from clear how they are acquired and transferred and what law governs such transactions in a transnational Metaverse. Characterisation and transfer of property still need to be addressed and raise many concerns (see the upcoming joint Project between UNIDROIT and HCCH here and the work of the EAPIL Working Group here).

Real conflict of laws difficulty lies with decentralized public blockchains (i.e. open and permissionless as opposed to consortium or private blockchains) that will mostly be in use in the Metaverse. With blockchain, the extensive degree of immateriality undermines the ability to resort to connecting factors actually in use. Seemingly insurmountable problems occur because decentralized ledgers with no physical connecting factors are reluctant to any localisation exercise. Blockchain offers few useful connection points in PIL either through traditional connecting factors or even through the use of fictitious connections. There are no first place of distribution or place of registration. There are also no intermediaries or account providers.

Although, that last affirmation could be nuanced.  Even if it is often claimed that blockchain ‘disintermediates’ the economy, this remains to be seen as, for the time being, more intermediaries (the cryptos and NFTs’ platforms are multipying) have been created by the technology than replaced. Here, one solution would maybe lie in setting obligations on the intermediary secondary platforms creating and exchanging NFTs and giving access to metaverses. However, even this would only partially bring solutions as the usual links to the territory of a State, however tenuous, do not even exist in the case of blockchain where transactions are anonymous.  This is why, behind the avatars, digital civil identity is becoming a major stake for the national sovereignty of States (on that question, see here). Hence, from known difficulties encountered to locate the seat of a situation in the Metaverse as a cyberspace, we move forward to major difficulties regarding the identification of parties to Metaverses’ transactions. With user’s anonymity in public blockchains, the lack of any grip between the situation and any national legal system, seat location becomes completely fictitious. The unseen immateriality, decentralization and anonymity characteristics of blockchain in the Metaverse are therefore calling for a change of regulatory approach.

L’utilisation d’aveux obtenus en violation des droits de la défense peut porter atteinte à l’équité du procès dans son ensemble dès lors que la condamnation de la personne placée dans une position désavantageuse dès le début de l’enquête est essentiellement fondée sur ces aveux.

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