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As a practising lawyer registered to the Belgian Bar I had more than a passing interest in C‑543/14 Orde van Vlaamse Balies v Ministerraad. The case was held on 28 July. At issue is the reversal of the Belgian exemption of legal services from value-added tax (VAT). Of interest for this blog was the Bar Council’s argument that making legal services subject to VAT endangers access to court for individuals. Corporations recover said VAT from the tax their own sales incur. For them, making legal services subject to VAT has zero impact on their books.

The Bar Council sought support among others in the Aarhus Convention, particularly Article 9(4) and (5) on access to court:

‘3.       In addition and without prejudice to the review procedures referred to in paragraphs 1 and 2 above, each Party shall ensure that, where they meet the criteria, if any, laid down in its national law, members of the public have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its national law relating to the environment.

4.       In addition and without prejudice to paragraph 1 above, the procedures referred to in paragraphs 1, 2 and 3 above shall provide adequate and effective remedies, including injunctive relief as appropriate, and be fair, equitable, timely and not prohibitively expensive. Decisions under this article shall be given or recorded in writing. Decisions of courts, and whenever possible of other bodies, shall be publicly accessible.

5.       In order to further the effectiveness of the provisions of this article, each Party shall ensure that information is provided to the public on access to administrative and judicial review procedures and shall consider the establishment of appropriate assistance mechanisms to remove or reduce financial and other barriers to access to justice.’

Perhaps taking inspiration from the Grand Chamber’s approach in Vereniging Milieudefensie, and consistent with the suggestion of Sharpston AG, the five judges Chamber dismissed direct effect for Articles 9(4) and (5) of Aarhus, mostly because of the Conventions deference in Article 9(3) to ‘national law’.

Given the increasing (but as noted recently qualified; see also here) cloud the CJEU’s Grand Chamber had been given Aarhus, this finding by a five judge chamber that Aarhus Articles 9(4) and (5) do not have direct effect is a little awkward. It also puts the Grand Chamber itself in an awkward position. There are quite a number of Aarhus-related cases pending. Will this chamber’s view on 9(4) and (5) be followed by the assembled top dogs?

Geert.

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

B. Hess: The impacts of the Brexit on European private international and procedural law
This article explores the consequences of the Brexit on European private international and procedural law. Although Article 50 TEU provides for a two year transitional period, the (adverse) consequences will affect the London judicial market immediately. Following this transitional period, the Brussels Ibis Regulation and all EU instruments in their area of law will no longer apply to the United Kingdom. A substitution by the Lugano Convention will be difficult, but the United Kingdom might ratify the Hague Choice of Court Convention and the (future) Hague Judgments Convention. In the course of the two-year period, parties should carefully consider whether choice of courts agreements in favour of London will lose their validity after Brexit. In international company law, United Kingdom companies operating on the Continent should verify whether their legal status will be recognized after the Brexit. In family matters, the legal status of EU (secondary) legislation should be respected even after the Brexit. All in all, European private international law will be affected by the cultural loss of the English law. And the same will apply vice versa to English law.

R. Freitag: Explicit and Implicit Limitations of the Scope of Application of Regulations Rome I and Rome II
Almost ten years after the enactment of Regulation “Rome II” on the law applicable to non-contractual obligations and nine years after the publication in the Official Journal of Regulation “Rome I” on the law applicable to contractual obligations, the fundamental question of the material scope of application of the uniform private international law of the EU remains unanswered: Are the aforementioned regulations limited to contracts in the strict sense of voluntarily incurred obligations (governed by Regulation “Rome I”) and to torts, unjust enrichment, negotiorum gestio and culpa in contrahendo (as defined in Regulation “Rome II”) or are both regulations to be seen as an ensemble forming a comprehensive regime for the law of obligations (with the exception of the matters explicitly mentioned in art. 1 par. (2) of Regulation Rome I and Rome II respectively)? The answer is of practical importance for a significant number of institutions of national substantive law that are characterized by their hybrid nature positioning them between contracts and legal obligations which cannot be qualified as torts, unjust enrichment etc. The aim of the article is to show that despite the fact that an all-encompassing European regime of conflict of laws is highly desirable, the existing Regulations “Rome I” and “Rome II” remain eclectic. They do not allow for a uniform treatment of all relevant institutions of substantive law and namely their rules on mandatory provisions (art. 9 Regulation “Rome I”, art. 16 Regulation “Rome II”) cannot be activated to this end.

K. Thorn/C. Lasthaus: The „CAS-Ruling“ of the German Federal Court of Justice – Carte Blanche for Sports Arbitration?
In its judgement, the German Federal Court of Justice (BGH) ruled on the legal validity of an arbitration agreement in favour of the Court of Arbitration for Sport (CAS) between an athlete and an international sports federation. Even though sports federations constitute a monopoly and as a result, athletes are not free to choose between arbitration and courts of law without losing their status as a professional, the agreement is legally effective according to the BGH, thus precluding the parties from settling their dispute before courts of law. In this legal review, the authors argue that – due to the athletes’ lack of freedom – arbitration agreements in sport can only be considered effective if they lead to a court of arbitration constituting a minimum rule of law. With regards to the CAS and considering the influence of sports federations in the establishment of the CAS’ list of arbitrators, they take the view that the CAS does not fulfil such minimum legal requirements. Furthermore, they criticise the fact that an arbitrator is not required to disclose previous appointments by one of the parties involved in the current arbitration procedure. This way, the right to refuse an arbitrator suffers devaluation. Notwithstanding the fact that the international sporting system requires consistent interpretation and application of sporting rules by an international arbitration court in order to establish equal opportunities among the athletes, this must not be achieved at the expense of the athletes’ constitutional rights. Due to the aforementioned legal deficits, the BGH should have ruled the agreement void.

C. Mayer: Judicial determination of paternity with regard to embryos: characterization, private international law, substantive law
The Higher Regional Court of Düsseldorf had to decide on a motion to determine the legal paternity of a sperm donor with regard to nine embryos, who are currently deep frozen and stored in a fertility clinic in California. The hasty recourse to the German law of decent by the court overlooks the preceding issue whether assessing, as of when the judicial determination of paternity is possible, is to be qualified as a question of procedure or substantive law and is, thus, to be solved according to the lex fori or lex causae. Furthermore, the court’s considerations concerning the conflict-of-laws provisions, denying the analogous application of Art. 19 par. 1 s. 1 EGBGB (Introductory Act to the German Civil Code), are not convincing, the more so as it left the question unanswered which conflict-of-laws provision decides on the applicable law instead.

K. Siehr: Criminal Responsibility of the Father for Abduction of his own Daughter
A man of Syrian nationality and a woman married in Germany and had a daughter. The couple finally divorced and parental responsibility was given exclusively to the mother. In December 2006 the couple decided to visit the father’s relatives in Syria in order to spend Christmas vacation with them, to detract the daughter from bad influences in Germany and to change the daughter’s name. The daughter felt very uncomfortable in Syria, because she was not allowed to go to school and could not leave her relatives’ home without being accompanied by some elderly person of her relatives. She wanted to go back to Germany, but was not allowed to do so by her father. Her mother tried to enable her to leave Syria with the help of the German embassy, but this could not be realized. The daughter was beaten by her father and the mother was prohibited to have contact with her daughter. After having reached majority age, the daughter managed to go back to Germany, where the mother indicted the father for depriving a minor from the person having exclusive parental responsibility (§ 235 German Criminal Code). The County Court of Koblenz convicted the father of being guilty of dangerous bodily harm (§ 223a German Criminal Code) and of depriving a minor from her mother (§ 235 German Criminal Code). The Federal Court for Civil and Criminal Cases (Bundesgerichtshof = BGH) confirmed this decision and rejected the attorney general’s and the accused’s appeal against it. The Federal Court correctly decided that German criminal law applies, because the person, having exclusive parental responsibility, had her habitual residence in Germany, hence the result of deprivation was also felt in Germany. The Federal Court also correctly held that the private law question of parental responsibility has to be answered by German law, including German private international law.

C.F. Nordmeier: Acceptance and waiver of the succession and their avoidance according to the Introductory Act to the German Civil Code and to Regulation (EU) No. 650/2012
In matters of succession, a renvoi that results in the scission of the estate causes particular problems. The present contribution discusses acceptance and waiver of the succession and their avoidance in a case involving German and Thai law. The law applicable to the formal validity of such declarations is determined by art. 11 of the Introductory Act to the German Civil Code. It covers the question whether the declaration must be made before an authority or a court if this is provided for by the lex successionis without prescribing a review as to its content. In case of the avoidance of the acceptance of the succession based on a mistake about its over-indebtedness, the ignorance of the scission of the estate may serve as a base for voidability. The second part of the present contribution deals with Regulation (EU) No. 650/2012. Art. 13 of the Regulation applies in the case of the scission of the estate even if only a part of the estate is located in a Member State and the declaration at hand does not concern this part. Avoidance and revocation of the declarations mentioned in art. 13 and art. 28 of the Regulation are covered by these norms.

W. Wurmnest: The applicability of the German-Iranian Friendship and Settlement Treaty to inheritance disputes and the role of German public policy
Based on a judgment of the District Court Hamburg-St. Georg, the article discusses the conditions under which the applicable law in succession matters has to be determined in accordance with the German-Iranian Friendship and Settlement Treaty of 1929, which takes precedence over the German conflict rules and those of Regulation (EU) No. 650/2012. The article further elaborates on the scope of the German public policy threshold with regard to the application of Iranian succession law. It is argued that the disinheritance of an heir as a matter of law would be incompatible with German public policy if based on the heir either having a different religion than the testator or having the status of illegitimate child. However, these grounds will be upheld if the discrimination has been specifically approved by the testator.

C. Thole: Discharge under foreign law and German transaction avoidance
The judgment of the Federal Court of Justice deals with the question whether recognition of an automatic discharge obtained by the debtor in an English insolvency proceeding excludes a subsequent non-insolvency action based on German law on fraudulent transfers. The Court rightly negates this question, however, the court’s reasoning is not completely convincing. In particular, the judgment entails a bunch of follow-up questions with respect to the interdependency between a foreign insolvency or restructuring proceeding and German fraudulent transfer law (outside of insolvency proceedings).

F. Ferrari/F. Rosenfeld: Yukos revisited – A case comment on the set-aside decision in Yukos Universal Limited (Isle of Man) et al. v. Russia
In a decision of 20/4/2016, the District Court of The Hague set aside six arbitral awards that had been rendered in the proceedings Yukos Universal Limited (Isle of Man) et. al. against Russia. The arbitral tribunal had ordered Russia to pay compensation for its breach of the Energy Charta Treaty. According to the District Court of The Hague, the arbitral tribunal had erroneously found that the Energy Charta Treaty was provisionally applicable. For this reason, the arbitral tribunal could not base its jurisdiction on the arbitration clause set forth in Art. 26 Energy Charta Treaty. The present case note examines the set-aside decision of the District Court of The Hague as well as its implications for ongoing enforcement proceedings. Various approaches towards the enforceability of annulled arbitral awards will be presented.

P. Mankowski: Embargoes, Foreign Policy in PIL, Respecting Facts: Art. 9 (3) Rome I Regulation in Practice
Internationally mandatory rules of third states are a much discussed topic. But only rarely they produce court cases. Amongst the cases, foreign embargoes provide for the highlights. The USA has graced the world with their shades. Yet the Cour d’appel de Paris makes short shrift with the (then) US embargo against the Iran and simply invokes Art. 9 (3) of the Rome I Regulation – or rather the conclusio a contrario to be drawn from this rule – to such avail. It does not embark upon the intricacies of conflicting foreign policies but sticks with a technical and topical line of argument. Blocking statutes forming part of the law of the forum state explicitly adds the political dimension.

C. Thomale: On the recognition of Ukranian surrogacy-based Certificates of Paternity in Italy
The Italian Supreme Court denied recognition of a Ukrainian birth certificate stipulating intended parents of an alleged surrogacy arrangement as the legal parents of a newborn. The reasoning given by the Court covers fundamental questions regarding the notions of the public policy exception, the superior interest of the child as well as the relationship between surrogacy and adoption. The comment elaborates on those considerations and argues for adoption reform.

M. Zilinsky: The new conflict of laws in the Netherlands: The introduction of Boek 10 BW
On 1/1/2012, the 10th book of the Dutch Civil Code (Boek 10 (Internationaal Privaatrecht) Burgerlijk Wetboek) entered into force in the Netherlands. Herewith the Dutch Civil Code is supplemented by a new part by which the different Dutch Conflict of Laws Acts are replaced and are combined to form one legal instrument. The first aim of this legislative process was the consolidation of the Dutch Conflict of Laws. The second aim was the codification of certain developed in legal practice. This article is not a complete treatise on the Dutch Conflict of Laws. The article intends to give only a short explanation of the new part of the Civil Code.

La Commission européenne a enregistré, le 27 juillet 2016, deux initiatives citoyennes européennes (ICE) estimant que les conditions juridiques requises ont été remplies.

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L’article 5 du règlement du 22 décembre 2000 doit être interprété en ce sens qu’une action indemnitaire fondée sur une rupture brutale de relations commerciales établies de longue date ne relève pas de la matière délictuelle ou quasi délictuelle s’il existait, entre les parties, une relation contractuelle tacite.

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Pourvoi c/ Cour d'appel d'Aix en Provence, chambre de l'instruction, 16e A, 19 juillet 2016

Décision n° 2012-221 QPC du 17 février 2012
http://www.conseil-constitutionnel....

Le 22 juillet 2016, la Commission européenne a adressé à la France un avis motivé pour la mise en œuvre incorrecte de la directive « Électricité » (dir. 2009/72/CE).

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Pourvoi c/ Cour d'appel de Toulouse, 3e chambre, 1er juillet 2015

Tribunal de grande instance de Dieppe, 27 juillet 2016

Chambre de l'instruction de la cour d'appel de Rennes, 8 juillet 2016

Pourvoi c/ Cour d'appel de Bastia, Chambre de l'instruction, 20 juillet 2016

Irrecevabilité

La chambre criminelle choisit de privilégier les règles relatives au mandat d’arrêt européen, au détriment de celles contenues dans la Convention de Genève du 28 juillet 1951 relative au statut des réfugiés.

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La Commission européenne a commis une erreur de droit en ne démontrant pas, au moment de l’examen de l’existence d’une aide d’État, que celle-ci confère un avantage économique et sélectif vis-à-vis des concurrents. 

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Le lundi 22 août 2016 s’est tenue l’audience d’ouverture à la Cour pénale internationale (CPI) du premier procès de crime de guerre consistant en la destruction alléguée de monuments à caractère historique ou religieux à Tombouctou au Mali pendant l’été 2012. 

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À l’issue de son 33e rapport annuel relatif au contrôle de l’application du droit de l’Union publié le 15 juillet 2016, la Commission expose les principales avancées enregistrées et les statistiques pour l’année 2015, tout en incitant les États membres à redoubler d’effort pour se conformer davantage à la législation de l’Union.

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Thank you Alison Frankel at Reuters for bringing to my attention Gutierrez-Brizuela v. Lynch. An immigration case which triggered a delightfully written judgment by Gorsuch CJ on the delegation of power to agencies. In particular the founding fathers’ intention, against the background of separation of powers,  with agencies room for statutory interpretation.

Both Ms Frankel’s article and judge Gorsuch’s pieces do much more justice to the debate than I can do in a blog post so I will leave readers first of all to read both. Judge Gorsuch, referring to precedent (Chevron in particular), notes

‘There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.’

Ms Frankel notes that Chevron directed courts defer to executive-branch agencies in the interpretation of ambiguous statutes. Justice Gorsuch reviews what exactly was intended by Chevron and points to the difficulty in excessive deferring to agencies’ interpretation of statutes.

I would summarise his views as ‘Congress meant trias, not quattuor politica.’

My knowledge of US civil procedure does not stretch to understanding what impact Gorsuch CJ’s views have on current US administrative /public law. Anyone out there who can tell me please do. At any rate, the judgment is great material for comparative constitutional law classes, the CJEU’s ECB (C-270/12) case being an obvious port of call.

Geert.

Our co-editor Matthias Weller has written an article on jurisdiction clauses under the Brussels Ibis Regulation and the Hague Choice of Court Convention (Choice of Forum Agreements under the Brussels I Recast and under the Hague Convention: Coherences and Clashes). The full version is available here. The abstract reads as follows:

Choice of forum agreements are widely used. International uniform law has entered into force recently, namely the Hague Convention of 30 June 2005 on Choice of Court Agreements on 1 October 2015, the Brussels Ibis Regulation on 10 January 2015. Both instruments are formally independent but in the legislative process the drafters of the Convention took notice of the Brussels I Regulation, and the European legislator took notice of the Convention while working on the Recast of the Brussels I Regulation in order to “strengthen” choice of forum agreements and to bring about “coherence” of the Brussels regime with the Hague Convention. Against this background, the two instruments now in place are compared in respect to its most important policy decisions: the definition of the internationality of the case as a prerequisite of the applicability of the respective instrument, the understanding of the choice of law rule on the nullity of the agreement, the scope and mode of a public policy control of the agreement and, most extensively, the respective mechanisms for coordinating parallel proceedings, in particular the new mechanism under the Brussels Ibis Regulation granting priority for the designated court. This new mechanisms turns out to be too complex, leaving important points open. Therefore, de lege ferenda an alternative mechanism is suggested along the lines of the Hague Convention by making use of the recent judgment of the ECJ in Gothaer Versicherung. This alternative would not only be much easier and thus more predictable, it would also be able to coordinate each and every parallel proceedings, not only those involving a choice of court agreement.

In C-195/15 Mulhaupt, the question referred reads 

Does the term ‘right in rem’ in Article 5(1) of (…) Regulation (…) 1346/2000 (…) on insolvency proceedings include a national rule such as that contained in Paragraph 12 of the Grundsteuergesetz (Law on real property tax, ‘GrStG’) in conjunction with the first sentence of Paragraph 77(2) of the Abgabenordnung (Tax Code, ‘AO’), pursuant to which real property tax debts are by operation of law a public charge on real property and the property owner must accept enforcement against the property in that respect?

Applicant is the trustee in bankruptcy of Société civile immobilière Senior Home, a French registered company. Gemeinde Wedemark is forcing the sale of rel estate belonging to Senior home, linked to arrays in real estate tax. It is suggested by the referring court that the qualification under German law, of real property tax (also known as ‘stamp duties’ or ‘estate taxes’), owed to public authorities, as rights in rem, mean that the forced sale of the site at issue, as a result of Article 5(1) of Regulation 1346/2000, is covered by German law and is therefore not subject to French law, which in the case at issue is the lex concursus of the insolvency proceedings that have been opened. Regulation 1346/2000 in the meantime has been replaced by Regulation 2015/848 however the provisions at issue have not materially changed.

Szpunar AG Opined end May (other than a Tweet I have kept schtum about the Opinion so far, for exam reasons).The Opinion is as yet not available in English.

In terms of applicable law, Article 4 of the Regulation is the general rule: unless otherwise stated by the Regulation, the law of the State of the opening of proceedings is applicable.

The general rule of Article 4 inevitably had to be softened for quite a number of instances. As noted in the introduction, insolvency proceedings involve a wide array of interests. The expediency, efficiency and effectiveness craved inter alia by recital 2 (old; now 3) of the Regulation, has led in particular to the automatic extension of all the effects of the application of the lex concursus by the courts in the State of opening of the proceedings. That could not be done without there being exceptions to the general rule:

In certain cases, the Regulation excludes some rights over assets located abroad from the effects of the insolvency proceedings (as in Articles 5, 6 and 7). In other cases, it ensures that certain effects of the insolvency proceedings are governed not by the law of the State of the opening, but by the law of another State, defined in the abstract by Articles 8, 9, 10, 11, 14 and 15. In such cases, the effects to be given to the proceedings opened in other States are the same effects attributed to a domestic proceedings of equivalent nature (liquidation, composition, or reorganization proceedings) by the law of the State concerned. Of particular note are precisely Article 5 on third parties’ rights in rem, but also Article 10 on employment contracts, and Article 13 on ‘detrimental acts’.

The precise demarcation of rights in rem hovers between the classic interpretative rule of EU private international law, namely the principle of autonomous interpretation, and the lack of a European Ius Commune on what rights in rem are. The Advocate General completes his already extensive analysis in Lutz, with a combined reference to the recitals of the Regulation, and the Virgós/Schmit Report.

In particular, Article 5(2) does serve as something of a straightjacket, leading to the conclusion that rights in rem require restrictive interpretation: once the first hurdle of qualification using national law (of the rei sitae) is passed, the right also needs to  meet with the fundamentals of what the Virgos-Schmit report defines as rights in rem (at 41-45 of the Opinion): these are (at 103 of the Report): a right in rem basically has two characteristics

(a)its direct and immediate relationship with the asset it covers, which remains linked to its satisfaction, without depending on the asset belonging to a person’s estate or on the relationship between the holder of the right in rem and another person;

(b)the absolute nature of the allocation of the right to the holder. This means that the person who holds a right in rem can enforce it against anyone who breaches or harms his right without his assent (e.g. such rights are typically protected by actions to recover); that the right can resist the alienation of the asset to a third party (it can be claimed erga omnes, with the restrictions characteristic of the protection of the bona fide purchaser); and that the right can thus resist individual enforcement by third parties and in collective insolvency proceedings (by its separation or individual satisfaction).

The Virgos-Schmit report in this respect cross-refers to the 1968 Brussels Convention however it is noteworthy that the CJEU, in defining rights in rem under the now Brussels I recast Regulation, does not in turn refer to the Virgos-Schmit report.

In conclusion therefore the AG suggests that the right at issue is indeed a right in rem under Article 5. Finally, that it benefits a public authority (the inland revenue) rather than a private individual or legal person, does not impact upon that qualification: Szpunar AG correctly highlights that the public character of the creditor is not a determining criteria in either the recitals of the Regulation or the Virgos-Schmit report.

A prima facie straightforward question met by complete analysis of the AG which in passing solves more issues than those raised by the referring court: this Opinion may well become an important part of authoritative sources in applying the Insolvency Regulation..

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.1 ).

Project “unalex – multilingual information for the uniform interpretation of the instruments of judicial cooperation in civil matters”

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The project is conducted in cooperation with a group of universities from various EU Member States. The project work consists, inter alia, in the selection of international case law in the various areas of judicial cooperation in civil matters and its preparation with case headnotes and the development of so-called ‘compendia’ which provide systematic explanations of how the European Regulations are applied by the CJEU and the courts of the Member States in the European practice.

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