Droit international général

What are the consequences of Brexit for Private International Law and International Civil Procedure Law? In the very first monograph in German concerning the legal ramifications of Brexit, Michael Sonnentag discusses these questions (Die Konsequenzen des Brexits für das Internationale Privat- und Zivilverfahrensrecht, Mohr Siebeck, 2017).

In the first part, the author analyses the possible options after Brexit: the Norwegian model (leaving the EU, but re-joining the EEA); the Swiss model (tailor-made solutions in all fields); the Turkish model (staying in the Customs Union); the Canadian model (free trade agreement); and finally the no-deal Brexit. It is also pointed out that with the British exit from the EU, not only will the Treaty of the European Union (TEU) and that of the Functioning of the European Union (TFEU) no longer be in force in the UK, but regulations and directives will also follow suit. Only in the exceptional case where directives have been implemented in UK Law by acts of Parliament, shall they stand after Brexit. In contrast, it is shown that, if directives have been implemented by Statutory Instruments, the SI’s will fall with Brexit, because the European Communities Act 1972 as their legal basis will cease to exist.

Concerning Private International Law, the Rome I as well as the Rome II Regulations will end in the UK after Brexit since they are EU-law irrespective of whether they are kept in force as part of British law. Sonnentag goes on to explain how, in the case of a hard Brexit, there will be an impact on the field of International Company Law: British companies will not benefit from freedom of movement anymore. Therefore, a limited company which had been founded in the UK, but moved its headquarters to Germany – whose courts traditionally apply the so-called seat theory – risks not being recognised in this Member State; consequently, the owner or shareholders could be personally liable for the debts of the company.

In the field of International Civil Procedure Law, the Brussels Ia, the Brussels IIa and the Maintenance Regulations will fall in the UK with Brexit. Sonnentag explains that the Brussels Convention will not be revived after Brexit. Furthermore, the Lugano Convention will not be applicable anymore; the UK could join it, but only as a Member State of EFTA or following an invitation by Switzerland, with support from the other Member States. In contrast, the UK could – and should – join the Hague Choice of Court Convention of 2005. Moreover, the effects on exorbitant jurisdiction, jurisdiction agreements and recognition and enforcements of judgments are described in detail. Not only does the monograph outline which rules will be applicable in Germany, but also in the UK.

Sonnentag evidences that many benefits in the fields of Private International Law and International Civil Procedure Law will end with Brexit. Furthermore, it is demonstrated that all possible Brexit scenarios will have drawbacks in comparison to a no-Brexit situation. Therefore, according to the author, the best solution for both sides would be the avoidance of Brexit altogether.

Motor insurance cases in Ireland keep on giving the CJEU opportunity to refine and re-emphasise the lack of horizontal direct effect of Directives. This time it is C-122/17 Smith v Meade.

I apologise to the readers if this sounds gobbledygook: [EU law tutorial] in short: one of the issues of the penetration of EU law into national legal orders, is whether individuals can, against other individuals (hence ‘horizontal’ relations), call upon rights given to them by EU ‘secondary’ law (as opposed to primary law, which mainly consists of the Treaties), particularly in the case of Directives, which unlike Regulations require Member States’ implementing measures.

The CJEU’s long-standing case-law answers this question in the negative (Marshall): mostly because it argues that any other conclusion would cancel out the Treaty-sanctioned difference between Regulations and Directives. The Court does do it utmost to assist individuals seeking to rely on EU law against national law: Directives can be called upon against the Member State and ’emanations from the state’ and the latter notion is stretched as much as possible (that was also the issue in Farrell); national law needs to as much as possible be interpreted to reflect the intention of the EU Directive, even if this requires setting aside long-standing interpretation of national law (Marleasing) – but this does not extend to interpretation contra legem (ex multi: Dominguez);  and if all else fails, the State owes its citisens compensation (Frankovich).  [EU law tutorial ends].

In the case at hand, the CJEU recalls all of the above succinctly, and confirms the absence of an overall possibility of relying on a directive in the sphere of relationships between private persons. EU law does not oblige a national court (question to EU institutional law experts: may a Member State ‘gold plate’ and do so anyway, even if this route might be unavailable to individuals in other Member States) to set aside in a horizontal relationship, national provisions that are incompatible with the Directive, and the contractual provisions between private individuals as a result of that national law.

The Irish Court’s referral to Luxembourg may seem odd given the established principles. Yet the Court of Justice does stretch its own case-law on these issues, ever so slowly while sticking to the Marshall principle. As a result national courts feel encouraged to ask the Court just where the boundaries lie.

Geert.

The answer of the Court in full:

EU law, in particular Article 288 TFEU, must be interpreted as meaning that a national court, hearing a dispute between private persons, which finds that it is unable to interpret the provisions of its national law that are contrary to a provision of a directive that satisfies all the conditions required for it to produce direct effect in a manner that is compatible with that provision, is not obliged, solely on the basis of EU law, to disapply those provisions of national law and a clause to be found, as a consequence of those provisions of national law, in an insurance contract.

In a situation such as that at issue in the main proceedings, a party adversely affected by the incompatibility of national law with EU law or a person subrogated to the rights of that party could however rely on the case-law arising from the judgment of 19 November 1991, Francovich and Others (C‑6/90 and C‑9/90, EU:C:1991:428), in order to obtain from the Member State, if justified, compensation for any loss sustained.

On 25 June 2015, the Insolvency Regulation Recast entered into force, though it (mostly) became applicable as of 26 June 2017. The series Short Studies on Private International Law, published by Asser Press, will publish an issue focusing on the particular features of this Regulation. Therefore, it welcomes any paper concerning the private international law aspects of the Insolvency Regulation Recast. Topics that may be addressed are possibly, but not exclusively:

– forum shopping for the most favourable insolvency regime;
– characterisation and the Insolvency Regulation Recast;
– detrimental acts and the applicable law;
– consistency of the Insolvency Regulation Recast with insolvency regimes in relation to third states.

Please note that the issue will cover private international law aspects. The editors retain the right to reject publications that predominantly cover matters not related to private international law, such as substantive law.

Please send your abstract (in UK English) of about 350 words by 30 September 2018 to v.lazic@uu.nl (subject: “Short Studies 2018 Insolvency”).

After a pre-selection, the applicants will finally receive their confirmation or rejection by 31 October 2018. When selected, papers should be submitted by 31 December 2018. A language review will not be part of the editorial process; this remains the responsibility of the applicants.

In IM Skaugen SE v MAN Diesel & Turbo SE [2018] SGHC 123, the Singapore High Court had the occasion to discuss and resolve various meaty private international law issues. The facts concerned the alleged negligent or fraudulent misrepresentation by the defendants on the fuel consumption of a specific model of engine that was sold and installed into ships owned by the plaintiffs. The issue before the court was whether the Singapore courts had jurisdiction over the misrepresentation claim. The defendants were German and Norwegian incorporated companies so the plaintiffs applied for leave to serve the writ out of Singapore. This entailed fulfilling a 3 stage process, following English common law rules: (1) a good arguable case that the case falls within one of the heads set out in the Rules of Court, Order 11, (2) a serious issue to be tried on the merits, and (3) Singapore is forum conveniens on applying the test set out in The Spiliada [1987] AC 460. Stages (1) and (3) were at issue in the case.

The judgment, by Coomaraswamy J, merits close reading. The main private international law issues can be summarised as follows:

(a) Choice of law is relevant when assessing the heads of Order 11 of the Rules of Court.

The plaintiffs had relied on Order 11 rule 1(f) and rule 1(p). Rule 1(f) deals with tortious claims and the court proceeded by ascertaining where the tort was committed. According to the court, this question was to be answered by the lex fori. If the tort was committed abroad, the court held that choice of law for tort then came into play: the court must then determine if the tort satisfied Singapore’s tort choice of law rule, ie the double actionability rule. It should be noted that the Court of Appeal in Rickshaw Investments Ltd v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 had held that the double actionability rule will apply even in relation to local torts (as the flexible exception may displace Singapore law to point to the law of a third jurisdiction). The double actionability rule thus remains relevant when assessing Order rule 1(f) whether the tort is committed abroad or in Singapore.

(b) ‘damage’ for the purposes of Order 11 rule 1(f)(ii) is not limited to direct damage.

Order 11 rule 1(f)(ii) is in these terms: ‘the claim is wholly or partly founded on, or is for the recovery of damages in respect of, damage suffered in Singapore caused by a tortious act or omission wherever occurring.’ The court held that ‘damage’ for the purposes of rule 1(f)(ii) included the increased fuel expenditure and reduction in capital value of the ships due to the fuel inefficient engines suffered not just by the original owners of the ships at the time of the misrepresentation, but also the subsequent purchasers of the ships. On the facts, the court held that the damage suffered by the subsequent purchasers arose directly from the misrepresentation as the misrepresentation was also intended to be relied upon by them. Further, the court held that, even if that had not been the case, direct damage is not required under rule 1(f)(ii). The difference in wording between Order 11 rule 1(f) and the UK CPR equivalent (CPR PD6B para 3.1(9)) makes the decision on this point less controversial than the reasoning in Four Seasons v Brownlie [2017] UKSC 80, [2018] 1 WLR 192.

(c) The test used to ascertain whether ‘the claim is founded on a cause of action arising in Singapore’ for the purposes of Order 11 rule 1(p) differs from the substance test which applies to determine the loci delicti in a multi-jurisdictional tort situation for the purposes of the double actionability rule.

The former test derives from Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458. The court observed that the Distiller’s test is more plaintiff-centric compared to the substance test used for the purposes of the double actionability rule because Order 11 rule 1(p) ‘requires the court to view the facts of the case through the cause of action which the plaintiff has sought to invoke.’ Whereas, the latter test is ‘the more general and more factual question “where in substance did the tort take place.”’ (para [166], emphasis in original). This point will likely be revisited by the Court of Appeal, not least because it had, in JIO Minerals FZC v Mineral Enterprises [2011] 1 SLR 391, cited the Distillers test as authority for the substance test.

(d) Whether Singapore is forum conveniens for the purposes of a setting aside application and whether Singapore is forum non conveniens for the purposes of a stay application should be assessed with reference to current facts.

Norway and Germany were potential alternative fora for the action. After leave had been given to serve out of jurisdiction in the ex parte hearing, the plaintiffs commenced proceedings in Norway as a protective measure. No proceedings were commenced in Germany. This meant that, under the Lugano Convention, the Norwegian courts had priority over the German courts. The court treated this as indicating that the courts of Germany ceased to be an available forum to the parties. This was significant, given that the court had earlier held that the loci delicti was Germany. The defendants argued that the commencement of Norwegian proceedings was to be ignored and the application to set aside service out of jurisdiction was to be assessed solely with reference to the facts which existed at the time when leave to serve out of jurisdiction was granted. The effect of the defendants’ argument would be that the setting aside application would be determined on the basis that Germany was an available forum, while their alternative prayer for a stay would be determined on the basis that Germany was an unavailable forum. The potential for wastage in time and costs is clear on this argument and the court rightly took a common sense and practical approach on this issue.

(e) The possibility of a transfer of the case from the Singapore High Court (excluding the SICC) to the Singapore International Commercial Court (SICC) is a relevant factor in the Spiliada analysis.

This had previously been confirmed by the Court of Appeal in Rappo, Tania v Accent Delight International Ltd [2017] 2 SLR 265. The SICC is a division of the Singapore High Court which specialises in international commercial litigation. Its rules allow for a question of foreign law to be determined on the basis of submissions instead of proof. Further, the bench includes International Judges from not only common law but also civil law jurisdictions. The court held that the specific features of the SICC and the possibility of the transfer of the case to the SICC weighed in favour of Singapore being forum conveniens compared to Norway and Germany.

(f) In a setting-aside application, where the plaintiffs have succeeded in showing that Singapore is the prima facie natural forum in the first stage of the Spiliada test, the burden of proof shifts to the defendants to show why they would suffer substantial injustice if the action were to proceed in Singapore.

In an Order 11 case, the second stage of the Spiliada test usually operates to give the plaintiffs a second bite of the cherry should they fail to establish Singapore is the natural forum under the first stage of the test. The plaintiffs are allowed to put forward reasons why they would suffer substantial injustice if trial takes place in the natural forum abroad. Very interestingly, the court held that where, as on the facts of the case, the plaintiff had already satisfied the burden of showing that Singapore is the natural forum under the first stage of the Spiliada test, the burden then shifts to the defendants to show why they would suffer substantial injustice if trial took place in Singapore.

The case is on appeal to the Court of Appeal. Its judgment is eagerly anticipated.

Michael Douglas and Nicholas Loadsman, The Impact of the Hague Principles on Choice of Law in International Commercial Contracts, Melbourne Journal of International Law, Vol. 19, No. 1, 2018. Also available at SSRN: https://ssrn.com/abstract=3230515  (see there for abstract)

The Russian Supreme Court has published the English translation of the guidelines on Russian private international law, issued in Russian on 27 June 2017 (ruling No 23 ‘On Consideration by Commercial Courts of Economic Disputes Involving Cross-Border Relations’).

The ruling is binding on all the lower courts in Russia: from time to time the Russian Supreme Court gathers in a plenary session to discuss the case law approaches to controversial matters in a particular field of law. It then adopts binding guidelines to ensure a uniform application of law in the future (this role of the Supreme Court is based on art. 126 of the Constitution and arts. 2 and 5 of the law on the Supreme Court of the Russian Federation of 2 February 2014).

The 2017 guidelines are based on more than a decade of case law, as the previous plenary session on private international law was dated 2003.

The guidelines, briefly sketched below, are divided to seven parts, dedicated to the general issues (1), the international jurisdiction of the Russian commercial courts (2), the law applicable to corporation (3), the service of documents (4), the requirements relating to the consular legalisation of foreign documents (5), the application of foreign law (6) and the provisional protective measures (7).

1. In the first part of the guidelines, the Supreme Court explains which disputes have an international character (at [1]). It also recalls the rules on absolute (international) and relative (national) jurisdiction (at [1], further detailed at [8]).

2. Part two is dedicated to the international jurisdiction of Russian commercial courts.
– The Supreme Court lists the matters within the exclusive jurisdiction of the Russian commercial courts (at [5]). If a foreign court accepts jurisdiction in violation of the rules on exclusive jurisdiction of Russian commercial courts, the foreign decision will not be recognised or enforced in Russia (at [4]).

– Several guidelines deal with the choice of court. Parties may choose a court in relation to an existing or a future dispute arising out of any relationship, be it contractual or non-contractual (at [6]). Some substantive and formal requirements relating to the choice of court agreement, including tacit submission, are discussed in detail. Two foreign parties may choose a Russian commercial court. Parties may choose to litigate at the ‘court of the defendant’ or ‘the court of the claimant’ (last four paragraphs of [6], [7]–[9], [11] and [18]). The principle of party autonomy in relation to the choice of court is also emphasised later in the guidelines (at [17]; especially in the third paragraph).

– The guidelines confirm the severability of the court choice clause (at [10]), the survival such clause after the termination of the contract and declaring contract invalid (at [10]), and touch upon the lis pendens with a foreign court (at [11]).

– The Supreme Court recalls the principle of close connection underpinning the rules on the jurisdiction of the Russian courts. It then names a number of factors
factors to be assessed in order to establish a close connection between the dispute and Russia (at [13]–[16]). For this purpose, the concept of activity in Russia is not confined to the registration of an affiliate or a registered office in the Russian trade register. Any activity in Russia should be taken into consideration. It may be, for example, the use of a website with a domain name ‘.ru’ or ‘.su’ to approach the Russian market (at [16]).

3. The third part of the guidelines is dedicated to the law applicable to corporations. After recalling that the Russian conflict of laws rules rely on the theory of incorporation (at [19], third paragraph), the Supreme Court explains which documents should be filed with the court (or consulted by the court of its own motion) to identify the country of a company’s incorporation (at [19]). Failure of the first or second instance court to establish this constitutes a ground for cassation (at [22], last paragraph). The Supreme Court also discusses the law applicable to some aspects of company’s representation (at [20]–[25]).

4. The fourth part of the guidelines deals with the service of documents (at [26]–[28]): the service of foreign documents on a Russian party, the service of Russian documents on a foreign party, and the relevant procedural terms (at [29]–[31]).
Two points are worth noting. First, if several international instruments on international legal cooperation containing requirements relating to the service of documents apply, the instrument allowing the fastest and the most informal service prevails (at [28]).
Second, the awareness of a foreign party of the proceedings is presumed, if the court publishes the information about the time and the place of the hearing on its website (at [37]; let us note, most information on the websites is in Russian). In the meantime, a broad range of evidence may be presented to prove awareness of the proceedings on the part of the foreign party (at [36]).

5. Part five discusses the requirements of apostille and consular legalisation of foreign documents (at [39]–[41]).

6. Part six deals with the application of foreign law. If a dispute is governed by a foreign law, Russian commercial courts have the duty to apply foreign law (at [42]). The parties have no obligation to inform the court on the content of foreign law. However, the court may require a party to do so. If the party does not comply, it may not invoke the court’s failure to establish the content of foreign law later in the proceedings, provided that the court takes reasonable measures to establish the content of foreign law (at [44]). The guidelines contain some general recommendations for the lower courts on the way to take such measures (at [45]–[46]).

7. Part seven is dedicated to provisional protective measures.
– A provisional protective measure can be taken by a Russian court if it has ‘effective’ jurisdiction regarding the measure. The Supreme Court describes situations in which a Russian court has ‘effective’ jurisdiction (at [49]).
– The enforcement of a provisional protective measure granted by a foreign court falls outside the scope of instruments regulating international legal cooperation (at [50]).
– A foreign antisuit injunction cannot prevent a Russian commercial court from hearing the dispute, if the Russian court finds that it has jurisdiction regarding the dispute (at [52]).

I have been posting a series of comments in recent weeks, with more on the way, on cases that caught my attention pre-exam period. They were all candidates for exam questions except much as I would want to, I can only subject my students to that many developments in conflict of laws. Another one in this series of ‘overdue’ postings: [2018] EWHC 335 (Comm) Yukos v Merinson. 

From Salter DJ’s summary of the facts: (excuse their length – this is rather necessary to appreciate the decision)

_____________The defendant was employed by the first claimant under a contract of employment governed by Dutch law. Various proceedings were commenced before the Dutch courts by the defendant and entities within the claimant group in relation to the defendant’s employment. The parties reached terms of settlement of those proceedings, which were embodied in a settlement agreement executed by the parties and subject to the exclusive jurisdiction of the Dutch courts. The settlement agreement was in turn approved by the Dutch courts, with the effect that it became a “court settlement” within the meaning of article 2 of Brussels I Recast. Subsequently, upon certain additional facts as to the defendant’s conduct being learnt by the claimants, they brought a claim against the defendant in England, where the defendant was then domiciled, seeking damages for losses allegedly suffered as a result of the defendant’s breach of duties under his employment contract (“the damages claims”) and a declaration that the settlement agreement did not bar the damages claims, alternatively an order that the settlement agreement should be annulled under Dutch law on the grounds of error and/or fraud (“the annulment claims”). The defendant applied for a declaration that the courts of England and Wales had no jurisdiction to try the claims brought and an order that the claim form be set aside, on the grounds that all of the claims fell within the settlement agreement conferring exclusive jurisdiction on the Dutch courts, which therefore had exclusive jurisdiction by operation of Article 25 Brussels I Recast, and (1) in respect of the annulment claims, Article 25 could not be overridden by Articles 20(1) and 22(1) requiring proceedings to be brought in the courts of the state of the defendant’s domicile at the time of issue of the claim form, since those claims were not “matters relating to [an] individual contract of employment” within the meaning of Article 20(1); (2) in respect of all claims, Article 23(1) allowed the rule in Articles 20(1) and 22(1) to be departed from, since the settlement agreement had been entered into after the dispute had arisen; and (3) the settlement agreement being a juridical act of the Dutch courts, the English courts were precluded by Article 52 from reviewing its substance in respect of the annulment claims and, the settlement agreement also being a court settlement, the English courts were required by Articles 58 and 59 to recognise and enforce it unless it was manifestly contrary to public policy._______________

All in all, plenty of issues here, and as Salter DJ was correctly reassured by counsel for the various parties, not any that the CJEU has had the opportunity to rule on. Four issues were considered:

1. Are the Damages Claims and/or the Annulment Claims “matters relating to [an] individual contract of employment” within the meaning of Article 20(1)?>>>Salter DJ’s Answer: 25 ff: YES. His main argument: the Settlement Agreement set out the terms on which Mr Merinson’s contract of employment came to an end. In so doing, it also varied the terms of that contract of employment. The terms of the Settlement Agreement now form part of the contractual terms on which Mr Merinson was employed, and which govern the rights and liabilities arising out of the employment relationship between him and the Yukos Group. In my view this finding should not have been made without considering the lex causae of the employment contract: Rome I in my view should have been engaged here.

2. If so, is the Settlement Agreement “an agreement .. entered into after the dispute has arisen” within the meaning of Article 23(1)?>>>Answer (on the basis of extensive reference to Brussels Convention and Regulation scholarship):  a dispute will have “arisen” for the purposes of these Articles only if two conditions are satisfied: (a) the parties must have disagreed upon a specific point; and (b) legal proceedings in relation to that disagreement must be imminent or contemplated. Salter DJ correctly emphasises the protective policy which underlies these provisions, however I am not confident he takes that to the right conclusion. Common view on the protective regime is that when parties have had the privilege of legal advice, they can be assumed to have been properly informed: the position of relative weakness falls away.

3. Further, is the English court, in any event, precluded from entertaining the Annulment Claims by Chapter IV of the Recast Judgments Regulation? >>>The issue of court settlements was specifically considered in the Brussels Convention, and the Jenard Report, given their importance in Dutch and German practice. In C-414/92 Solo Kleinmotoren the CJEU (at 17) held ‘to be classified as a “judgment” within the meaning of the Convention, the act must be that of the court belonging to a Contracting State and ruling on its own authority on points in dispute between the parties.’: considering Dutch expert evidence on the issue, the decision here is that despite the limited authority under Title III Brussels I Recast for other Courts to refuse to recognise a court settlement (ordre public in essence), it is not a ‘judgment’. Salter DJ concludes on this point that normal jurisdictional rules to challenge the settlement apply. At 81 he suggests, provisionally, that ‘it would nevertheless be open to this court in those circumstances to case manage the enforcement application and the set-aside action, so that they are dealt with together, the result of the action determining the enforcement application. Fortunately, I am not required to wrestle with those practical complexities in order to determine the present application, and I make no decision one way or another on any of these matters. There is no application before me to enforce the Dutch Court Settlement, merely an application for a declaration that the court “has no jurisdiction to try the Claimants’ claims”.‘

This insight into the case-management side of things, however, does highlight the fact that the findings on the jurisdiction /enforcement interface appear counterintuitive. Particularly in cases where the English courts would not have jurisdiction viz the settlement, but would be asked to enforce it – which they can only refuse on ordre public grounds, the solution reached would not work out at all in practice.

4. And finally what are the consequences, as regards jurisdiction, of the decisions on the first three of these issues?>>>Held: the English court, as the court of the Member State in which Mr Merinson was domiciled at the date this action was commenced, has jurisdiction in relation to all of the claims made in the present action.

There is much more to be said on each of the arguments – but I must not turn the blog into a second Handbook, I suppose.

Geert.

The prospect of Brexit has led a number of countries on the European continent to take measures designed to make their civil justice systems more attractive for international litigants: In Germany, the so-called “Justice Initiative Frankfurt”, consisting of lawyers, judges, politicians and academics, has resulted in the creation of a special chamber for commercial matters at the District Court in Frankfurt which will, if both parties agree, conduct the proceedings largely in English (see here). In France, an English-language chamber for international commercial matters was established at the Cour d’appel in Paris, adding a second instance to the English-speaking chamber of commerce at the Tribunal de commerce in Paris (see here). In the Netherlands, the Netherlands Commercial Court and the Netherlands Commercial Court of Appeal will soon begin their work as special chambers of the Rechtbank and the Gerechtshof Amsterdam (see here). And in Belgium, the government plans to establish a Brussels International Business Court (see here). Clearly: the prospect of Brexit has stirred up the European market for international litigation.

The interesting question, however, is whether the above-mentioned measures will yield much success? Will Germany, France, the Netherlands or Belgium manage to convince internationally active companies to settle their disputes on the European continent rather than in London? Doubts are in order. To begin with, the many national initiatives vary considerably in detail and, thus, send rather diffuse signals to the business community. Moreover, most of the measures that have been taken or are being planned so far, notably those in Germany and France do not go far enough. They focus too much on English as the court language and neglect other factors that contribute to the outstanding success of London as a place for settling international disputes. This includes, for example, a pronounced service mentality that goes hand in hand with a strict orientation towards the special litigation needs of international companies. In any case, it is doubtful whether the withdrawal of London from the European judicial area can be compensated through national initiatives.

So, what can the remaining Member States do to offer European and other companies an attractive post-Brexit forum to settle their disputes? In a soon to be published study for the European Parliament I suggest a package of measures, one of which envisions the establishment of a European Commercial Court. This Court would complement the courts of the Member States and offer commercial litigants one more forum for the settlement of international commercial disputes. It would come with a number of advantages that national courts are not able to offer.

To begin with, a European Commercial Court would be a truly international forum. As such it could better respond to the needs of international commercial parties than national courts which are embedded in existing national judicial structures. In particular, it could better position itself as a highly experienced and neutral forum for the settlement of international disputes: just like an international arbitral tribunal, it could be equipped with experienced commercial law judges from different states. These judges would ensure that the Court has the necessary legal expertise and experience to settle international disputes. And they would credibly signal that the Court offers neutral dispute settlement that is unlikely to favour one of the parties. A European Commercial Court could, therefore, offer commercial parties much of what they get from international commercial arbitration – without sacrificing the advantages associated with a state court.

A European Commercial Court, however, would not only enrich the European dispute settlement landscape and offer international commercial litigants an additional, an international forum for the settlement of their disputes. It could also participate more convincingly in the global competition for international disputes that has gained momentum during the past years and triggered the establishment of international commercial courts around the world: Singapore, for example, opened the Singapore International Commercial Court in 2015 to offer a special court for cases that are “of an international and commercial nature”. Qatar has been running the Qatar International Court and Dispute Resolution Centre (QICDRC) for a number of years by now. Abu Dhabi is hosting the Abu Dhabi Global Markets Courts (ADGMC) and Dubai is home to the International Financial Centre Courts (DIFC). And in 2018 China joined the bandwagon and created the China International Commercial Court (CICC) for countries along the “New Silk Road” as part of the OBOR (One Belt, One Road) initiative. The establishment of a European Commercial Court would be a good and promising response to these developments. The more difficult question, however, is whether the EU would actually be allowed to establish a new European court?

Under the principle of conferral embodied in Article 5 TEU, the EU may only act within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. With regard to the establishment of a European Commercial Code the EU could rely on Article 81 TFEU. This provision allows the EU to adopt measures to improve judicial cooperation in civil matters having cross-border implications. In particular, it allows the EU to adopt measures that improve access to justice (Article 81(2) lit. e) TFEU) and eliminate obstacles to the proper functioning of civil proceedings (Article 81(2) lit. f) TFEU). A European Commercial Court could be understood to do both: improving access to justice and eliminating obstacles to the proper functioning of civil proceedings. However, would it also fit into the overall European judicial architecture? Above all: would the CJEU accept and tolerate another European court?

Doubts are in order for at least two reasons: first, according to TEU and TFEU it is the CJEU that is entrusted with the final interpretation of EU law. And, second, the CJEU has recently – and repeatedly – emphasized that it does not want to leave the interpretation of EU law to other courts.  However, both considerations should not challenge the establishment of a European Commercial Court because that Court would not be responsible for interpreting European law, but for settling international disputes between commercial parties. It would – like any national court and any arbitral tribunal – primarily apply national law. And, as far as it is concerned with European law, the Court should be entitled and required to refer the matter to the CJEU. A European Commercial Court would, therefore, recognize and, in fact, defer to the jurisdiction the CJEU.

The establishment of a European Commercial Court would be a good response to the many challenges international commercial litigation is currently facing. In order to succeed, however, the Court would have to be accepted by the business community. To this end the Court would require staff, equipment and procedures that meet the highest standards of professional dispute resolution. In addition, the Court would have to be fully integrated into the European judicial area and benefit from all measures of judicial cooperation, in particular direct enforcement of its judgments. Ensuring all this would certainly not be easy. However, if properly established a European Commercial Court would enrich and strengthen the European dispute resolution landscape. And it would contribute to the development of a strong and globally visible European judicial sector.

What do you think?

Dear all,
We would like to inform you that an international conference on ‘International Investment and Trade Agreements: Recent Developments and Problems’ is going to be held in Istanbul, Turkey on 25 October 2018. The conference will be jointly organized by Marmara University Faculty of Law and Economic Development Foundation (IKV).
The main goal of the conference is to discuss the recent developments in the field of international investment and trade law. In this regard, it is possible to submit papers regarding various issues such as international investment agreements, international trade agreements, current legal developments regarding the World Trade Organization (WTO), trade quotas and non-tariff barriers, new generation free trade agreements, the trade policy of the European Union and its effects on national laws.
We invite our colleagues wishing to present a paper in this conference to send their abstracts to our email address ikvinvestment2018@gmail.com. We kindly request that the abstracts include the name of the study as well as the name, title, workplace and contact information of the author and consist of 300 to 500 words.
Please note that the deadline for the submission of abstracts is 1 September 2018.
For further information, please see the conference website: http://etkinlik.marmara.edu.tr/en/uluslararasiyatirim
We are looking forward to hosting you in Istanbul.

Dear all,
We would like to inform you that an international conference on ‘Contractual Issues in Private International Law’ is going to be held in Istanbul, Turkey on 11 October 2018 by Marmara University Faculty of Law.
The main goal of the conference is to study and discuss contractual matters in international legal practice within the context of private international law discipline. In this regard, it is possible to submit papers regarding various issues such as applicable law to international commercial contracts, jurisdiction agreements, international commercial arbitration, contract-related matters in international family law, contracts of carriage in private international law and party autonomy in private international law.
We invite our colleagues wishing to present a paper in this conference to send their abstracts to our email address pilcontracts2018@yahoo.com. We kindly request that the abstracts include the name of the study as well as the name, title, workplace and contact information of the author and consist of 300 to 500 words.
Please note that the deadline for the submission of abstracts is 20 August 2018.
For further information, please see the conference website: http://etkinlik.marmara.edu.tr/en/contractsinpil
We are looking forward to hosting you in Istanbul.

Thank you Brodies for flagging [2018] CSOH 25 George Docherty et al a while ago – I was not sure whether I might use the case for exam purposes. C-350/14 Lazar was among the precedents cited by  Lord Tyre to decide the application ratione temporis of the Rome II Regulation.

Article 31 Rome II states that the Regulation applies to “events giving rise to damage which occur after its entry into force”. The date of entry into force, according to article 32, was 11 January 2009. The reference in article 31 to “events giving rise to damage” is not necessarily easy to determine. Lord Tyre at 31 clarifies things by suggesting the Article is ‘clearly linked to the distinction drawn in article 4(1) between three separate concepts, namely (i) the event giving rise to the damage; (ii) the damage; and (iii) the indirect consequences of the event. In the present case, the damage consisted of the deceased’s illness and death. The indirect consequences are the losses suffered by the deceased’s relatives. The event giving rise to all of this was exposure to asbestos’: this occurred before the entry into force of the Regulation.

Had it occurred after, the Court would have applied Rome II for the UK has opted to apply the Regulation’s Article 25(2) provision for Member States with internal conflicts of laws, to apply the Regulation to these conflicts: The Law Applicable to Non-Contractual Obligations (Scotland) Regulations 2008 (SI 2008/404) provide (reg 3) that the Regulation shall apply in the case of conflicts between the laws of different parts of the UK as it applies in the case of conflicts between the laws of other countries. SI 2008/2986 contains an equivalent provision for England, Wales and Northern Ireland.

Accordingly what the applicable law would be under the Regulation is not addressed, neither is the pursuers’ submission that any choice of English law by virtue of article 4(1) should be displaced by applying article 4(3) and holding that the delict is manifestly more closely connected with Scotland.

Residual conflict of laws applies and at 17 ff the judge applies pre-1995 common law, leading to the lex loci delicti. However these rules do not provide a clear identification of the lex loci delicti where the harmful event occurs in one jurisdiction (Scotland) but the harm, consisting of physical injury, occurs in another (England). Reviewing authority, Lord Tyre eventually holds (at 23) that the presence of asbestos dust in an employee’s lungs does not of itself constitute injury, and (subject to the Scottish statutory provisions regarding pleural plaques) no cause of action arising out of negligent exposure arises until it does. At 24:  since injury is an essential ingredient of an actionable wrong, and since injury obviously cannot take place until after the breach of duty has occurred, the place of the harmful event (or locus delicti) is where the injury takes place and not, if different, where the antecedent negligent act or omission occurred.

Conclusion: lex causae is English law. The case is a good illustration of the difficulties that remain in applying what seem prima facie fairly understandable concepts to the average lawyer.

Geert

A post more meant to refer the readers to resources rather than to add much analysis myself. I have of course earlier posted on the ‘Hague Judgments Convention’. Things have not stood still since.

A first interesting resource is the April 2018 study prepared for the European Parliament. I am pleased the stellar team of colleagues who compiled the study, although overall (in my view a tad too) optimistic on the project, did not whitewash the difficulties involved in the process. The additional layer of complexity, were the EU to accede to the eventual (if any) Convention, was highlighted as a cause for concern.

Next up, the May 2018 documents published on the HCCH gateway, including a new draft Convention and a preliminary draft explanatory report. Each and every one of the articles of the Draft can be the subject of very extensive analysis indeed – one need only look at the Chapters on jurisdiction in the books on EU private international law, to appreciate the level of complexity; and of course the every so slight or not so slight differences between the ‘Brussels regime’ and the ‘Hague process’. I trust one or two of my colleagues are devoting their summer writing up just such an analysis.

The process is to be continued for we are not there just yet.

Geert.

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

A. Dickinson: Tough Assignments: the European Commission’s Proposal on the Law Applicable to the Third-Party Effects of Assignments of Claims

In March 2018, the European Commission published its long awaited Proposal on the law applicable to the third-party effects of assignments of claims. The proposal aims to fill the gap left in EU private international law following the adoption of the Rome I Regulation, when it was not possible to reach a settlement of this difficult and controversial issue. It is a welcome, and overdue, step. This article seeks to address two aspects of the Commission Proposal, which give rise to issues of some complexity. The first point involves questions of characterisation, and the second questions concerning the definition of the connecting factor. Unfortunately, neither the Proposal nor the accompanying Impact Assessment provide a clear indication as to the Commission’s drafting intentions with respect to these questions.

M. Gebauer: The German-Turkish bilateral succession treaty in the wake of developments in European private international law

The EU Succession Regulation, in terms of Art. 75 (1), afforded priority to those existing treaties concerning international succession already entered into by one or more EU member states. This provision has been particularly relevant for Germany in so far as the long-standing German-Turkish bilateral succession treaty of 1929 is concerned. The treaty’s choice of law rules differ starkly from those found in the EU Succession Regulation. The article primarily considers the interplay between the EU Succession Regulation and the German-Turkish bilateral succession treaty. Despite the treaty appearing, on the face of it, to have continuing relevance in cases with Turkish elements, the article demonstrates that the EU Succession Regulation’s choice of law rules will nonetheless often be applicable in Germany, and in important situations. The reason for this is that the scope of the German-Turkish bilateral succession treaty is limited. The problem is particularly acute in so far as the interplay between matrimonial property law and succession law is concerned, both in terms of German-Turkish couples and dual nationals. In light of this background, the article questions whether the treaty’s continued existence can be justified.

B. Hess: Abgrenzung der acta iure gestionis und acta iure imperii: Der BGH verfehlt die völkerrechtliche Dimension der Staatenimmunität

This article reviews a recent German decision on state immunity. In this judgment, the Bundesgerichtshof delineated acta iure gestionis from acta iure imperii according to the lex fori. Although the judgment follows a longlasting line of reasoning in German case law, the article demonstrates that international law has developed more sophisticated criteria. These are found in the UN Convention on State Immunity of 2004. Although the convention has not yet entered into force, it is of great importance as it has the ambition to codify and clarify the state of customary international law. Unfortunately, the Bundesgerichtshof mainly refers to a decision of the German Constitutional Court of 1963 which today seems to be outdated. Furthermore, the Bundesgerichtshof does not sufficiently consider the case-law of foreign and international courts which consider state loans as acta iure gestionis – even in the case of subsequent state intervention. All in all, a more international and comparative approach is needed to comprehensively assess the modern state of customary international law.

P. Mankowski: Orthodoxy and heresy with regard to exclusive jurisdiction for registered IP rights and ownership claims

All quiet on the Luxembourgian front: Ownership claims regarding trademarks are not subject to exclusive jurisdiction under Art. 24 No. 4 Brussels Ibis Regulation, following the footsteps of Duijnstee ./. Goderbauer of 1983 on ownership claims regarding patents. Yet closer scrutiny reveals that some parts of the underlying fundament have changed since GAT ./. LuK and its legislative offspring. Even a surprise candidate might enter the ring: namely Art. 24 No. 3 Brussels Ibis Regulation, hitherto rather not in the spotlight, but worth to be reconsidered and reconstrued heretically, taking into account Art. 1 (1) Brussels Ibis Regulation.

D. Looschelders: Jurisdiction for Actions Brought by the Injured Party Against Compensation Bodies and Green Card Bureaus Located in Foreign States

Since the ECJ judgment in the Odenbreit case, it has been acknowledged that according to the Brussels I Regulation, the injured party can assert its direct claim against the insurer of the injuring party before the court of jurisdiction of his own residence. In the event of traffic accidents that display a cross-border element, the injured party may also approach the compensation body in his country of residence established in accordance with the Motor Insurance Directive or the Bureau in the accident state according to the Green Card System. Against the background of a decision of the Regional Court of Darmstadt, the article deals with the question of whether the injured party can also sue a compensation body or a Green Card Bureau located in a foreign state at its own place of residence according to the Brussels I Regulation, answering it in the negative.

V. Pickenpack/A.-G. Zimmermann: Translation requirements for the service of judicial documents to legal entities

According to Art. 8 (1) lit. a of the Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13/11/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000, the addressee has a right to refuse the acceptance of judicial documents in case that the document is not drafted in a language which the addressee understands. However, the Regulation does not itself stipulate who the authorized addressee is. In particular, in case of service to legal entities and companies the question arises whose linguistic knowledge is decisive. It is also unregulated whether the addressee of the document is allowed to decide for himself whether he has appropriate language skills or that this has to be decided by the court on the basis of indications. The District Court of Berlin-Mitte has – in its decision of 8/3/2017 – recently dealt with the right to refuse acceptance of judicial documents under Art. 8 (1) lit. a Council Regulation (EC) No 1348/2000 in case of service to legal entities. The Court has assessed the right of the Irish-based Facebook Ireland Limited to refuse acceptance of the service on the basis of objective criteria and based on the actual language skills of its legally trained employees. The Court applied the criteria in a convincing manner. However, a more specific legal framework would nevertheless be favorable as this would avoid existing uncertainties in the application of the rules for the serving party especially in case of service to legal entities. Unnecessary translations as well as time and costs incurred would become redundant.

A. Staudinger/S. Friesen: International jurisdiction and applicable law concerning a road traffic accident abroad with debtors from several countries

The article at hand deals with the judgement of the Higher Regional Court Brandenburg of 18/2/2016 (reference number: 12 U 118/15). The ruling refers to a traffic accident abroad. Apart from the place of general jurisdiction (Art. 2 [1] Brussels I Regulation) the court discussed the option of a coherence action (Art. 6 No. 1 Brussels I Regulation) as well as of a direct claim (Art. 11 [2] in conjunction with Art. 9 [1] lit. b Brussels I Regulation). Moreover, the issue of the scope of the consumer protection jurisdiction (Art. 16 [2] in conjunction with 15 [1] lit. c Brussels I Regulation) was raised. In addition, the article illustrates the advantages of the supranational jurisdictional regime in cases where the damaged party claims directly against the liability insurer.

Even though the ruling refers to the legal situation before the unification of international tort law by the Rome II Regulation. The points made by the court of appeal can be cautiously transferred on this act of law. In particular, the case demonstrates that not all claims of a damaged party against different drivers and vehicle owners are necessarily governed by a uniform national tort law even if the damage is caused by a single accident.

Y. Diehl: Transnational Skiing Accidents in Private International Law

The present article criticizes the higher regional Court (Oberlandesgericht) Munich’s decision regarding the interpretation and use of the so-called FIS rules for conduct. The court had to deal with an accident of two German citizens in the Austrian alps. German law was applicable. Art. 17 Rome II states independently that rules of safety and conduct at the place of conduct must be taken into account. Therefore, the court based its decision on rule 3 of the FIS rules for conduct presuming local Austrian law to appeal the FIS rules. Besides the complicated methodical problems arising by the need to take the rules and norms into account, Art. 17 Rome II harbors difficulties in defining the scope of the term “rules of safety and conduct”. According to some scholars this term should be interpreted in a very broad way, including “private” or even non-binding norms. Therefore, most of the authors plead for the possibility of taking into account the FIS rules in transnational Skiing-accidents under Art. 17 Rome II. As it is debatable whether the FIS rules are binding at all, the article at hand first defines the legal nature of those rules by investigating different possibilities in national law. The author’s conclusion that there is not a binding character of the FIS rules at all subsequently raises the question whether they can fit in the scope of Art. 17 Rome II after all. According to the author, there is neither a possibility nor a need for private international law to take into account the FIS rules. Therefore, national law applies. The national tort law systems provide a general clause for judging tortfeasor’s behavior and conduct. Accordingly the FIS rules therefore function as aid in interpretation.

S.L. Gössl: A further piece in the mosaic regarding the recognition of a status acquired abroad or: under which circumstances is a name “legally acquired”?

In “Freitag” the CJEU again had to deal with the question whether and under what condition a name acquired in a Member State has to be recognised in another Member State. The decision clarifies one question in the ongoing debate: only “legally acquired” names have to be recognised. Whether a name has been “legally acquired” has to be determined via a referral en bloc to the law of the country in which the name potentially has been acquired. Furthermore, the Court hints indirectly at an exception of such an obligation to recognize, i.e. in the case of circumvention of law when there is no connection to the original Member State at all.

M. Andrae/U. Ising: Modalities of choice of law under Art. 10 (2) EGBGB

Under Art. 10 (2) EGBGB (Introductory Act to the Civil Code) the spouses may choose the law applicable to their married name. By their choice, the parties can determine 1. the law of the country which one of the spouses is a national of or 2. German law given one of them has their habitual residence in Germany. Requirements as to time and proper form of their choice are specified by law. In addition, the choice of law shall be declared to the Registrar’s Office (Standesamt). The law does not lay out any additional details. This problem led to two decisions by the Kammergericht and the Oberlandesgericht (Higher Regional Court) Nürnberg dealing with the legitimacy and the requirements for a tacit choice of law, the law applicable to its validity, contractual annulment or change ex nunc and its voidability by the spouses. This review focuses on these problems.

C. Thole: Art. 16 EIR 2017 (Art. 13 EIR 2002) between lex causae and lex fori concursus

In its judgment, the ECJ strengthens the procedural autonomy of the Member States in the context of the objection to an avoidance claim pursuant to Art. 16 EIR 2017 (Art. 13 EIR 2002). The Court decided on the applicability of Art. 3 para. 3 Rome I Regulation with respect to determining the applicable law (lex causae) and thus whether a choice of law clause may be validly relied upon if any other elements relevant to the situation in question are not located in the state whose law is chosen. Christoph Thole finds the judgment to be only partly convincing.

A. Piekenbrock: The treatment of assets situated abroad in local insolvency proceedings

The paper deals with two recent decisions delivered by the German Federal Court of Justice (BGH) regarding the treatment of assets situated abroad in insolvency proceedings opened in Germany. The Court has correctly stated that notwithstanding Art. 7 EIR 2015 the debtor’s rights in rem regarding real estate situated in another Member State are governed by the lex rei sitae. As far as pensions in Switzerland are concerned, the Court has correctly come to the conclusion that the question whether or not the claim is attachable and thus part of the debtor’s insolvency estate has to be answered in accordance with the lex fori concursus. Unfortunately, the Court has only applied German conflict law. Yet, the preliminary question to answer would have been whether or not Art. 7 EIR also applies in cases concerning third countries such as Switzerland. That question should have been referred to the E.C.J.

H. Wais: Compatibility of damages for willful litigation under Italian law with the German ordre public

Pursuant to Art. 91 (3) c.p.c. (Italy), a party who unjustifiably files a claim or unjustifiably defends himself can, under certain conditions, be ordered to pay to the other party a certain sum the amount of which is established by the court. In a case litigated before the courts of Milan the claimant was ordered to pay the defendant € 15.000 on the basis of the aforementioned provision. The defendant subsequently sought recognition and enforcement of the judgment in Germany. The claimant argued that the judgment was against the German ordre public since Art. 91 (3) c.p.c. provided for punitive damages and deterred the parties from seeking judicial relief. The Bundesgerichtshof, however, rightly held that the judgment was compatible with the German ordre public.

P. Franzina/E. Jayme: The International Protection of Reproduction Rights Claimed by Museums Over their Works of Art: Remarks on the Decision Given by the Tribunal of Florence on 26/10/2017 in the ‘David’ Case

The law of some countries, like Italy, explicitly grants museums and other cultural institutions exclusive reproduction rights over works of art exhibited or stored therein. In 2017, at the request of the Italian Ministry for Culture and Heritage, the Tribunal of Florence issued an injunction prohibiting a travel agency based in Italy from further using “in Italy and in the rest of Europe” an unauthorised reproduction of the “David”, a statue by Michelangelo, which the agency had included in its website and in advertising material distributed in Italy and abroad. The paper discusses the issues surrounding the protection of reproduction rights in cross-border cases under the Rome II Regulation. It also hints at the advantages that the adoption of harmonised substantive standards at EU level regarding the exploitation of these rights would entail for the effective protection of cultural heritage, while giving due account to competing rights, such as the so-called freedom of panorama, i.e., the right to take and reproduce pictures of works of art located in, or visible from, a public place.

O.L. Knöfel: Cross-Border Online Defamation Claims Cases in Austrian Civil Procedure: The Austrian Supreme Court on the Autocomplete Function of Search Engines

The article reviews a decision of the Supreme Court of the Republic of Austria (Case 6 Ob 26/16s), dealing with questions of cross-border litigation raised by the autocomplete function of a search engine. The mere accessibility of a website normally does not suffice for conferring international jurisdiction on any State’s courts. But in the case at hand, the Supreme Court applied domestic Austrian rules on jurisdiction, namely sec. 83c Jurisdiktionsnorm (JN). If an online statement brought about by a search engine is considered defamatory, Austrian Courts are said to gain jurisdiction to entertain lawsuits against the alleged perpetrator, simply by assuming that a tort was committed in Austria. What the Supreme Court’s decision boils down to is that Austrian procedural law opens an exorbitant head of jurisdiction. The Supreme Court also held that Austrian substantive law applied. The author analyses the relevant issues of Austrian law and explores the decision’s relation to international case-law on the autocomplete feature of search engines.

L. Hübner: Substitution in French Mortgage Law

The following article deals with the requirements of the substitution in French and German PIL. In the specific judgment, the Cour de cassation applies the method of équivalence. The ruling concerns the substitution of a French notary by an Australian notary public as regards the authorisation to create a mortgage (Hypothek) by formal act. This case offers the opportunity to sketch not only the PIL solution in the French and German legal order but also solutions provided by each substantive law.

H. Odendahl: New international regulations on conflict of law and their impact in the field of family and inheritance law in relation to Turkey

At the international level, a number of new regulations have entered into force over the past six years, relating – inter alia – to the conflicts of law provisions regarding divorce, custody, alimony, matrimonial property and inheritance law. Even to the extent Turkey is not directly bound by such regulations, they have an effect on Turkey and Turkish nationals – in particularly in the context of substantive law provisions providing for choice of law rules. Any migration event, in one direction or the other, may trigger an assessment of the effects due to such statutory changes.

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

M. Andrae: The Scope of Application of the Regulation (EU) 2016/1103

The Regulation (EU) 2016/1103 will be the central European legal instrument governing matters of matrimonial property regimes having cross-border implications. This includes any property relationships, between the spouses and in their relations with third parties resulting directly from the matrimonial relationship, or the dissolution thereof. From this it follows a broad objective scope of application. Excluded from the scope the Regulation (EU) 2016/1103 are inter alia: the succession to the estate of a deceased spouse and the nature of rights in rem relating to a property. This contribution discusses which typical legal relationships are covered by the regulation and which are precluded. Particular attention is given to: the responsibility of one spouse for liabilities and debts of the other spouse, the powers, rights and obligations of either or both spouses with regard to property, gratuitously allowance between spouses, undisclosed partnerships between spouses, employment contracts between spouses, the allocation of matrimonial home in case of separation, the distinctness of a matrimonial property agreement and a contract of inheritance as well as the relationship between the legal system of marriage property and the numerus clausus of rights in rem known in the national law of the Member States. The Regulation (EU) 650/2012 should be applied in the case, if the inheritance of the surviving spouse increases by a quarter under Art. 1371 para. 1 German Civil Code (BGB).

E. Jayme: Reform of Tort Law in Germany (2017): compensation of dependent survivors of dead persons for pain and suffering: problems of jurisdiction and conflict of laws

The German legislator has introduced, recently, the right of the surviving dependents of a person who has been killed, e.g. in a car accident, to ask for compensation for pain and suffering. The article deals with the rules concerning jurisdiction and the applicable law in international cases such as car accidents abroad, when the survivors live in a foreign country. In addition, solutions are proposed for the question, how the personal relation are to be determined, when the person killed and his or her survivors live in a foreign country.

P. Mankowski: Liability insurance, direct action, forum actoris: no deviating by jurisdiction clause in the insurance contract

Liability insurance and direct claims are everyday appearances in European private international law and international procedural law. Odenbreit has awarded the injured party with a forum actoris. Now, and consequentially, Assens Havn supplements this with protection against derogation to the injured party’s detriment: The injured party is rightly held not to be bound by a derogating urisdiction agreement in the insurance contract between the policyholder (i.e. the tortfeasor in relation to the injured party) and his insurer.

D. Coester-Waltjen: Opportunity missed: The CJEU and private divorces

This article comments on the decision of CJEU in the case of Sahyouni ./. Mamisch (C-372/16). The CJEU accepted jurisdiction because the applicability and interpretation of the Rome III-Reg. (No. 1259/2010) was at issue. However, the Court following the advice of the Advocate General decided that a private divorce does not fall within the scope of the Rome III-Reg. Consequently, the court was not concerned with the interpretation of Art. 10 Rome III-Reg. in cases where the applicable divorce law provides different rules based on gender. The Advocate General had recommended the non-application of all rules which are not gender-neutral irrespective of the fact whether the result in the case at hand was or would be discriminatory or not. This article analyses critically the reasoning of the Court and the Advocate General, especially the lack of any differentiation between the different kinds of private divorces and the emphasis put on the applicability of the Brussels IIbis-Reg. (No. 2201/2003). The author expresses regret over the interpretation of Art. 10 by the Advocate General.

M. Andrae: Petition for divorce of marriage before a sharia court in Lebanon and Germany

According to s. 109 of the German Act on Proceedings in Family Matters and in Matters of Non-contentious Jurisdiction (Familienverfahrensgesetz, FamFG) German courts will recognize a decree of divorce of marriage given by sharia courts abroad. Therefore, a pending petition for divorce before such a court will be recognized as well. The Higher Regional Court of Hamm (Oberlandesgericht Hamm) had to decide in this matter. Traditionally, lis pendens of litigation in familiy matters in a third State is an obstacle to the decision of a German court given the following premises: The parties and the subject matter of proceedings are identical, the foreign court was seized first and the foreign court is expected to give a decision capable of recognition within reasonable time. The OLG Hamm does not comply with this established body of case law. Instead, it is guided by Art. 29 (EC) Regulation No 44/2001 and Art. 27 Lugano Convention, respectively. Drawing on the ECJ’s doctrine in Gubisch (1987) it does not take into account whether the foreign decision is expected to be capable of recognition. The article critically analyzes this ruling.

S. Korch/M. Konstantin: From Freedom of Establishment to Free Choice of Corporate Form – The Implications of Polbud

The ECJ judgment in Polbud is a landmark decision in international corporate law. Summarizing, the ECJ no longer focuses on protecting the free establishment (of corporations) but instead embraces the idea of allowing European corporations to freely choose a corporate form from any EU Member State’s legislation. This switch confronts the national legal systems with a wide range of challenges, especially with regard to the protection of creditors, transformation law, and employee co-determination. The analysis in this paper reveals that the relevant German statutes do not adequately cover these challenges.

C. Thomale: The “Centre of Main Interests” in international corporate insolvency proceedings

The Landgericht Berlin has used the Niki insolvency proceedings, which have been attracting wide public attention, for a deep discussion of the criterion “Centre of main interest” as contained in the European Regulation on Insolvency Proceedings. This case note carefully evaluates the decision and tries to highlight possible venues for legal reform.

E. Jayme/C.F. Nordmeier: Greek Muslims in Thrace: dépeçage and new opt-in-requirement in family and inheritance

In the northern Greek region of Thrace, Greek citizens enjoy a special status in family and inheritance law. The Greek law 1920/1991 of 24 December 1990 regulates the jurisdiction of the Mufti and thus the application of Islamic law in the execution of international treaties after the end of the Greek-Turkish war. The provisions of Law 1920/1991 have been significantly amended by Law 4511/2018 of 15 January 2018. The focus is on the need to agree on the mufti’s jurisdiction in family matters. In the absence of an agreement, the state courts have sole competency. In matters of succession, the testator must have opted for the application of Islamic law. The present article presents the new rules in greater detail and examines their effects in European international private and procedural law. In addition, the question of what impact they have on the practice of German family and probate courts is examined.

F. Heindler: The right of direct action in international road accidents

The annotated judgement focuses on the scope of application of Art. 9 Hague Convention of 4 May 1971 on the Law Applicable to Traffic Accidents. The Austrian Surpreme Court in Civil and Criminal Matters (Oberster Gerichtshof) has ruled that the law applicable under Art. 9 does not oust the law applicable to the insurance contract in relation to the extent of the insurer’s liability. In contrast, Art. 9 merely determines whether a claim can be brought directly against the insurer. By way of obiter dictum, the Oberster Gerichtshof suggested that it would adopt the same position when applying Art. 18 Rome II which was not applicable in the current case since the Convention has priority in accordance with Art. 28 s. 1 Rome II and the EU Member States’ international law obligations.

M. Komuczky: Dogmatic Assessment of Surrogacies undertaken abroad in Austria

The article discusses the family law consequences of surrogacy conducted abroad from an Austrian perspective. This question is discussed in the light of the ECtHR’s jurisprudence. If a court order was rendered in the state where surrogacy was performed, this decision may be capable of being recognized in Austria, provided that the child obtained the citizenship of the other state. In all other cases, a conflict of law analysis according to the principle of the strongest connection is necessary, as §§ 21, 21 autIPRG only apply to naturally conceived children. It is of pivotal importance that the child maintains effective family relationships. Only in exceptional cases, Austrian public policy may be invoked.

D.B. Adler: Post Daimler: Foreign companies still run the risk to be subject to U.S. general jurisdiction throughout the US.

In Daimler AG v. Bauman, the U.S. Supreme Court overturned nearly seventy years of law on general jurisdiction. According to Daimler, the general jurisdiction inquiry is no longer whether a foreign corporation’s in-forum contacts can be said to be in some sense continuous and systematic, but rather whether that corporation’s affiliation with the forum is so continuous and systematic as to render it essentially at home in the forum. Except in rare situations, general jurisdiction henceforth should be proper over a corporation only in the corporation’s state of incorporation or principal place of business. This article proceeds in three main sections. Part one provides a brief analysis of the Daimler decision, including a critique on both its shortcomings and the court’s rationale. Part two focuses on the post-Daimler developments highlighting three points. First, the article evaluates how lower courts throughout the US have adapted to the newly developed “at home” standard. Second, it shows how litigants are more often than not successful at circumventing Daimler’s “at home” test by reviving century-old cases in order to establish general jurisdiction on a “consent-by-registration” theory. According to this theory, foreign corporations consent to general jurisdiction when they register to do business in states outside their place of incorporation or principal place of business. The author critically assesses this theory and its effects on foreign companies and banks in the context of Daimler’s rationale and questions its validity as a basis for general jurisdiction. He then evaluates a recent New York State legislative initiative, which attempts to further “clarify” Daimler and to strengthen the validity and foundation of the “consent-by-registration” theory. Part three summarizes the findings.

A. Anthimos: The application of the Rome I Regulation in Greece

The present article serves as an inventory of published and unpublished case law in regards to the application of Rome I Regulation in Greece. It focuses solely on provisions, which were examined and interpreted by domestic courts. The author’s purpose is to provide a concise report of the existing trends in the application of the EU Regulation.

Z. Csehi: New Hungarian Legislation on conflict of laws, jurisdiction and procedure in private international law matters

In Hungary, Private International Law has been changed fundamentally by Act No XXVIII, which entered into force on 1 January 2018. These legislative changes are related to the recent reform of Hungarian civil law, which made modifications in the area of Private International Law necessary. From now on, rules regarding the conflict of laws, the international procedural law as well as the recognition and enforcement of foreign judgments are codified in a single legal act. The aim of this new codification of Private International Law was also to bring Hungarian legislation in line with the relevant European regulations, which was not entirely the case with the previous provisions. The present contribution describes the legal modifications in Hungarian Private International Law and the key changes of the reform.

Does a Member State have any obligation at all, either generally or in case-specific circumstances, to provide guidance as to when a product derived from Waste lubricating oil – ‘WLO’ has or has not achieved end-of-waste status through either re-refining or reprocessing? And in the case at issue, was the UK’s Environment Agency correct in its classification of the treated WLO as still being waste, specifically: did the Agency unfairly favour waste oils recovery over material recycling?  These were the issues in [2018] EWHC 1983 (Admin) Protreat v Environment Agency in which Williams J evidently looked primarily to EU Waste law, the Waste Framework Directive 2008/98 in particular.

Among the many points of factual discussion is a review of the Member States’ duties under the Waste hierarchy: Protreat argue (at 67) that the Environment Agency, ‘as an emanation of the State, is under a duty proactively to direct its resources and use its powers to seek to ensure the result required by the Waste Directive. It is submitted, too, that the result required includes “the management of waste in accordance with the waste hierarchy set out in Article 4 of the Waste Directive”. According to the Claimant, this requires the Defendant to perform its functions, so far as possible, to ensure that waste oil treatments higher in the waste hierarchy “are more attractive than treatments lower in the hierarchy”‘.

Williams J is entirely correct at para 71 ff to hold that the hierarchy does not imply that its strict application in all circumstances is not always justified: indeed the hierarchy instruct first and foremost the best environmental outcome in specific circumstances.

That in and of itself makes regulatory guidance difficult to issue – and EU law in general does not impose any obligation to do so: at 81: ‘the terms of Article 6 and, in particular, paragraph 4 thereof, do not support the contention that the Directive imposes upon Member States a specific obligation to provide end-of-waste guidance whether in relation to the products of re-refining or the products of any other process of conversion of waste. The power to decide end-of-waste status “case by case in accordance with the case-law” would, no doubt, permit a regulator to issue guidance. I am not persuaded, however, that this language can be the vehicle for the creation of a specific obligation to issue guidance.’ (Sir Wyn also referred to Article 4 and Article 21 to support that analysis).

Reference to Luxembourg was requested but declined.

Geert.

When is a court ‘seized’ under EU civil procedure /private international law? The question is highly relevant in light of the application of the lis alibi pendens principle: the court seized second in principle has to cede to the court seized first. Williams J in [2018] EWHC 2035 (Fam) Gondrom v Gondrom notes the limited attempt at harmonisation under EU law and hence the need for the lex fori to complete the procedural jigsaw. [Please note whan I wrote the post, the judgment was up on BAILII – but when I posted it it was no longer so included – I hope it is back up by the time readers see this post].

On 8 July 2016 Mrs Gondrom issued a divorce petition out of the Bury St Edmunds Divorce Unit seeking a divorce from Mr Gondrom). On 16 August 2016 the husband issued a divorce petition against the wife out of the Munich Family Court. On the 22 August 2016 the husband filed an acknowledgement of service to the wife’s petition asserting that the German court was first seized because it was ‘not accepted England is first seized, owing to failures to comply with art. 16 and 19 of Council Regulation (EC 2201/2003) and relevant articles of the EC Service Regulation (EC 1393/2007).

At issue were two considerations: whether seizure of the English courts had been effected; and whether the wife’s issuing of the petition on 8 July 2016 an abuse of process on the basis that the wife did not at that time consider the marriage to have irretrievably broken down but was issuing a petition simply to secure the English jurisdiction in the event that a divorce was needed? This latter element amounts to disciplining a form of fraus, on which I have reported before – eg here that there is very little EU law.

In Regulation ‘Brussels IIa’ (2201/2003) – concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, as in the other Regulations, ‘seising of a Court’ is defined as:

1. A court shall be deemed to be seised: 

(a) at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the applicant has not subsequently failed to take the steps he was required to take to have service effected on the respondent;

or

(b) if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he was required to take to have the document lodged with the court.

These ‘steps required’ are not further defined under EU law and hence rest with national law. Under relevant English law, Williams J held that the husband was aware of the wife’s petition before it was validly served on him, and that this was enough for the English courts to have been validly seized.

Geert.

The University of Antwerp is seeking a PhD candidate for their research group “Personal Rights and Property Rights”. Although you might not guess so at first sight, Private International Law is part of this research group, which focuses on private law and its international aspects.

Candidates should submit a research proposal, which should fit into the research of the group (see https://www.uantwerpen.be/en/research-groups/personal-rights-and-property-rights/). The deadline is 30 september 2018.

The successful candidate will be funded for a four-year period, from 1 February 2019 to 31 January 2021.

For more information and the application procedure, see https://www.uantwerpen.be/en/jobs/vacancies/ap/2018bapfrechex262/

As Williams J notes at 5, [2018] EWFC 54 Akhter v Khan is not about

‘whether an Islamic marriage ceremony (a Nikah) should be treated as creating a valid marriage in English law. In fact, the main issue as it has emerged is almost diametrically the opposite of that question; namely whether a Nikah marriage ceremony creates an invalid or void marriage in English law. To the average non-lawyer in 2018, it may appear an easy question to answer. Surely a marriage which is not a valid marriage is a void marriage and thus can be annulled? Regrettably it is not that simple.‘

The Guardian explain here why it is not that simple, and Ralf Michaels has analysis here. In essence (the remainder of this para is largely based on Ralf’s text), many muslims in the UK only perform Nikah and not a civil ceremony. The latter is firmly required under English law (indeed under the law of many European countries; where unlike in the English example, a religious ceremony must not even double up as a civil one, and the latter must always precede the religious one). Nikah hitherto had been considered a non-marriage which the law could ignore, because it did not even purport to comply with the requirements of English law. The High Court was unwilling to presume the lived marriage as valid.

Williams J however declared the marriage at issue void under the Matrimonial Causes Act 1973. The wife was granted a decree of nullity. This has extremely relevant consequences in terms of ‘matrimonial’ property, and maintenance obligations, including those vis-a-vis the children. The Court’s analysis of human rights law is extensive, including of course with the ECHR gateway (via the Human Rights Act 1998) and the UNRC: the UN Convention on the Right of the Child. In this respect Williams J’s analysis is not unlike that of classic ordre public considerations: which are always case-specific and take into account the hardship caused to the individuals involved, were a foreign legal concept not recognised in the forum.

The Court has set an important precedent – but like all precedent of course there is case-specificity (the length of the lived marriage, the children,…

Of note is that applicable law in the case was firmly English law. Recognition of the marriage as such in the UAE did play a role in the judge’s assessment.

All in all an important case viz the discussion on multiculturality and family law in Europe.

Geert.

A talaq divorce is rarely knocking at the door of Greek courts. A court in Thessaloniki dismissed an application for the recognition of an Egyptian talaq, invoking the public policy clause, despite the fact that the application was filed by the wife. You can find more information about the case, and check my brief comment here.

What puzzles me though is whether there are more jurisdictions sharing the same view. Personally I don’t feel at ease with this ruling for a number of reasons. But prior to that, a couple of clarifications:

1. This case bears no resemblance to the Sahyouni saga. The spouses have no double nationality: The husband is an Egyptian, the wife a Greek national.
2. There was no back and forth in their lives: they got married in Cairo, and lived there until the talaq was notarized. Following that, the spouse moved to Greece, and filed the application at the place of her new residence.
3. Unlike Egypt, Greece is not a signatory of the 1970 Hague Convention on the Recognition of Divorces and Legal Separations.
4. There is no bilateral agreement between the two countries in the field.

I’m coming now to the reasons of my disagreement with the judgment’s outcome.

1. The result is not in line with the prevalent view in a number of European jurisdictions: From the research I was able to conduct, it is my understanding that Austria, Germany, France, Italy, Spain, the Netherlands, Norway, and Switzerland, do not see any public policy violation, when the wife takes the initiative to apply for recognition of the talaq.
2. The reasoning of the court is a verbatim reiteration of an Athens Court of Appeal judgement from the ‘90s. It reads as follows: Solely the recognition of such an act would cause profound disturbance to the Greek legal order, if its effects are to be extended and applied in Greece on the basis of the Egyptian applicable rules. What is actually missing is the reason why recognition will lead to profound disturbance, and to whom. Surely not to the spouse, otherwise she wouldn’t file an application to recognize the talaq.
3. It should be remembered that the public policy clause is not targeting at the foreign legislation applied in the country of origin or the judgment per se; moreover, it focuses on the repercussions caused by the extension of its effects in the country of destination. Given the consent of the spouse, I do not see who is going to feel disturbed.
4. Recognition would not grant carte blanche for talaq divorces in Greece. As in other jurisdictions, Greece remains devoted to fundamental rights. What makes a difference here is the initiative of the spouse. In other words, the rule remains the same, i.e. no recognition, unless there’s consent by the wife. Consent need not be present at the time the talaq was uttered or notarized; it may be demonstrated at a later stage, either expressly or tacitly. I guess nobody would seriously argue that consent is missing in the case at hand.
5. Talking about consent, one shouldn’t exclude an ex ante tacit agreement of the spouses for financial reasons. It has been already reported that all remaining options for a spouse in countries where Sharia is predominant are much more complicated, time-consuming, cumbersome, and detrimental to the wife. Take khul for example: It is indeed a solution, but at what cost for the spouse…
6. Last but not least, what are the actual consequences of refusal for the spouse? She will remain in limbo for a while, until she manages to get a divorce decree in Greece. But it won’t be an easy task to accomplish, and it will come at a heavy price: New claim, translations in Arabic, service in Egypt (which means all the 1965 Hague Service Convention conditions need to be met; Egypt is very strict on the matter: no alternative methods allowed!); and a very careful preparation of the pleadings, so as to avoid a possible stay of proceedings, if the court requires additional information on Egyptian law (a legal information will most probably double the cost of litigation…).

For all the reasons aforementioned, I consider that the judgment is going to the wrong direction, and a shift in Greek case law is imperative, especially in light of the thousands of refugees from Arab countries who are now living in the country.

As I mentioned in the beginning, any information on the treatment of similar cases in your jurisdictions is most welcome.

Dear readers,

Conflictoflaws.net has been around for 12 years by now. It has developed into one of the most relevant platforms for the exchange of information and the discussion of topics relating to conflict of laws in a broad sense. And while the world has changed a lot during the past 12 years the look of conflictoflaws.net has basically remained the same. Today this is going to change:

We are happy to announce that www.conflictoflaws.net has received a (slightly) new design!

As you will see, we have tried to keep the overall simple appearance of the blog while giving it a slightly more modern touch. As regards the structure, however, there is one major change. As of today, posts will come in two different categories: “views” and “news”. Under “views” posts with independent content (case notes, comments, etc.) will be displayed“. Posts under “news” will convey all sorts of information (relating to, for example, conference announcements, book releases, job vacancies, call for papers, etc.).

We hope that you will like the new design and find the new structure useful. Should you have any comments or experience problems please get in touch. Needless to say that the same holds true, if you wish to share “views” and “news”!

Best wishes and happy reading!

The editors