Droit international général

Andrea Bonomi and Patrick Wautelet have authored an article-by-article commentary, in French, of Regulations 2016/1103 and 2016/1104 on the property regimes of international couples, with the assistance of Ilaria Pretelli, Eva Lein, Guillaume Kessler, Sara Migliorini and Konstantinos Rokas.

The book has just been published by Larcier under the title Le droit européen des relations patrimoniales de couple – Commentaire des Règlements (UE) 2016/1103 et 2016/1104.

The authors have kindly provided the following presentation in English.

Professionals in the area of family law and estate planning are increasingly confronted with cross-border couples and families whose assets may be scattered in different countries. The determination of the law governing the family assets has often become an indispensable step in order to advise spouses or partners about the financial implications of their union, the consequences of a change of residence, or to share out their property in the case of divorce or death. In all these scenarios, it is often necessary to assess the validity and effects of a property agreement entered into in a foreign jurisdiction. And in the case of disputes, the determination of the competent court and of the cross-border effects of a court decision will be crucial. All these questions are made more complex by the fact that most relationships extend over several years, if not decades, by the possible involvement of third parties, and by the connection with other areas of the law.

The European regulations on matrimonial property and on the property consequences of registered partnerships intend to provide answers to some of these problems and to ensure more legal certainty. However, the interpretation of these complex instruments also raises a great number of new and intriguing questions.

This new commentary provides for a very detailed and fine-tuned analysis of the two regulations. The textual and systematic interpretation rests on a solid comparative law background and is enriched by numerous practical examples. Drafted by an international team of experts, it offers a genuinely European reading of the new instruments, taking into account their multiple connections with the other EU regulations in the area of civil justice, notably the Succession Regulation and the Brussels II-terRegulation, as well as the guidance provided by the Court of Justice of the European Union.

This book intends to serve as reference for researchers dealing with two major regulations adopted by the EU. It also aims to stir up the conversation among researchers and policy makers interested in private international law and the economic aspects of family law by pointing to the advantages of the European instruments, while not ignoring the shortcomings and imperfections of two regulations which will guide cross-border activity in family law in the years to come.

For more information, see here.

The Permanent Bureau of the Hague Conference on Private International Law (HCCH) is seeking a(n) (Assistant) Legal Officer. The successful candidate will begin work in the field of international commercial and financial law and will gradually also be expected to carry out work in other areas, including family law.

Applications should be submitted by Sunday 2 May 2021 (00:00 CEST). For more information, please visit the Recruitment section of the HCCH website.

This post is published by the Permanent Bureau of the Hague Conference of Private International Law (HCCH). 

I was unaware of a fashion blogosphere war of words and more between Dolce & Gabbana and the founders of Diet Prada until I was asked to comment (in Dutch) on the pending lawsuit in Italy. The suit has an echo of SLAPP – Strategic Lawsuit Against Public Participation.

Among others this post on The Fashion Law gives readers the necessary background and also links to the defendants’ lawyers reply at the jurisdictional level. It is this element of course that triggered the interview request, rather than my admittedly admirable sense of style (with sentences like these, I think I may be in need of a break).

Readers might be surprised to find the legal team discussing A7(2) Brussels Ia’s forum delicti, and CJEU authority such as Bolagsupplysningen seeing as per A6 BIa the Regulation does not apply, rather the Italian residual rules. However as Andrea Bonomi and Tito Ballarino review in the Encyclopedia of Private International Law, Italy has extended the scope of application of BIa to its internal sphere. Hence an interesting discussion of the CJEU case-law on locus damni, centre of interests etc. As well as a probably ill-fated attempt to encourage the Italian courts, in subsidiary fashion, to exercise forum non should the A7(2) arguments fall on deaf ears. Probably futile seeing as the Italian regime does not know a foum non rule, however if BIa is extended, would that not also extend to forum non-light in A33-34? As far as I could tell from the submission, however, no reference was made  to an 33-34 challenge.

Enfin, lots of interesting things to ponder at a different occasion. Happy Easter all.

Geert.

EU Private International Law 3rd ed. 2021, para 2.437 ff.

There is much to be said about the refusal of the courts at Zurich at the end of February, to recognise a September 2020 High Court judgment under the 2007 Lugano Convention. Rodrigo Rodriguez says it all here and I am happy to refer. The guillotine fashion in which the courts rejected application of Lugano 2007 even for a procedure that was initiated before Brexit date 1 January 2021 leaves much to be discussed. As does the question whether the demise of Lugano 2007 might not resurrect Lugano 1988 (Rodrigo points ia to the dualist nature of the UK in his discussion of same).

Whether correct or not in the specific case at issue, the judgment does show the clear bumpy ride ahead for UK judgments across the continent, following the Hard Brexit in judicial co-operation.

Geert.

EU Private International Law, 3rd ed., 2021, Chapter 1, Heading 1.7.

This ruling might, as Rodrigo Rodriguez argues, wrongly apply Lugano A63 'legal proceedings instituted'. Even then it is a clear sign of the bumpy ride ahead for UK courts to maintain their position in international litigation. https://t.co/99xLg0jDTH

— Geert Van Calster (@GAVClaw) March 10, 2021

 

A quick note on the suit in The Netherlands against “Norsk Hydro” of Norway, for alleged pollution caused by aluminium production in Brasil. No court decisions or orders are available as yet hence I write simply to log the case. I have put Norsk Hydro in inverted commas for the suit really is against Norsk Hydro subsidiaries incorporated in The Netherlands, who are said to control the Brazilian entities. The jurisdictional basis therefore is A4 BIa. As far as the reporting on the case  indicates, there seems little likelihood of A33-34 BIa’s forum non conveniens light making an appearance seeing as no Brazilian proceedings are reported to be underway which could sink the Dutch proceedings like the High Court did in Municipio de Mariana. That is not to say of course that the defendants might not discover some.

Geert.

EU Private International Law., 3rd ed. 2021, Heading 7.3.1.

1/2 Jurisdictional basis for #NorskHydro suit is A4 BIa: Netherlands is where subsidiaries controlling the local (BRA) entities at issue are headquartered. (Pulling the mother into the bath would require A6 Lugano) https://t.co/JdBWdGWOXM @financialtimes #CSR #bizhumanrights

— Geert Van Calster (@GAVClaw) March 1, 2021

Which conflict-of-laws rule is the most appropriate for the blockchain? This fundamental question is part of two parallel targeted consultation papers issued as recently by the European Commission.

One of the consultations covers the Settlement Finality Directive (SFD), while the other concerns the Financial Collateral Directive (FCD). Both regulate the “plumbing” of financial markets (the so-called market infrastructures) and contain conflict-of-laws provisions (see Article 9(2) SFD and Article 9 FCD). Yet, the infrastructures and transactions they target are conventional ones. The Settlement Finality Directive deals with payment and securities settlement systems, in which traditional cash (e.g. euros) and conventional financial instruments (e.g. shares and bonds) are traded. The Financial Collateral Directive concerns collateral provided in either cash or financial instruments.

The question posed by the European Commission is whether these texts also can (and must) be applied to modern digital assets, like cryptocurrencies (e.g. Bitcoin) and tokens, and whether they need to be adapted to them through reform.  Since both directives also contain conflict-of-laws provisions, the relationship of crypto-assets to these regulations raises typical conflict-of-laws questions as well.

Take for example Article 9(2) SFD. Its text speaks about securities “legally recorded on a register, account or centralised deposit system” and submits them to the law of the Member State where this register, account or system is “located”. This raises the following issues: 1. whether a blockchain network is a “register” in this sense; 2. whether crypto assets can be said to be “legally” recorded, despite the lacking legal protections of such assets under most private laws; and 3. where blockchains, which may be distributed potentially on a planetary scale, are located.

Even more doubts are caused by Article 9 FCD. It submits financial collateral arrangements to the law of the country “in which the relevant account is maintained”. Blockchain networks basically operate without any intermediaries and do not feature “accounts” in the proper sense of the word. Even if they would, it would be hard to say where the account is “maintained” given the distributed nature of a blockchain network.

These issues have a certain sense of urgency due to the fact that some EU and EEA Member States have already pressed ahead and created specific rules for crypto assets.

France for instance allows for securities (such as bonds and shares) traded over the counter (OTC) to be issued on blockchain networks (described as “distributed electronic registers” (dispositif d’enregistrement électronique partagé – DEEP)). The condition is that the securities are issued in the French territory and governed by French law, see Art. L211-3 French Code monétaire et financier. The transfer and pledge of such crypto financial instruments is equally governed by French law.

Germany has drafted a bill to allow the issuance of bonds (including covered bonds) and investment participations on the blockchain. Section 32 of the bill provides for the applicability of the law of the country in which the administrator of the register is supervised.

Liechtenstein, an EEA member and as such also bound by the SFD and the FCD, has adopted an Act on Token and TT (Trustworthy Technology) Services Providers, which, by any standard, is one of the most comprehensive and innovative blockchain regulations in the world. The Act is appliable where: 1. the TT provider is headquartered or residing in the Principality; or 2. where the parties expressly chose its provisions, see its Art. 3(2).

These are three different approaches to the conflict-of-laws issues raised with regard to different types of crypto assets. But are those national laws compatible with the SFD and the FCD? Do the SFD and FCD apply at all to crypto assets? If so, are their provisions, including those on the conflict of laws, compatible with the nature of the blockchain? And if they do not apply, should they be extended to them? Some legal consistency and harmony would surely be welcome. The question is if and when the EU legislator will provide it.

A petition for a writ of certiorari has been filed before the US Supreme Court in a case concerning the HCCH Child Abduction Convention and the grave risk exception (art. 13(1)(b)). The issue at stake is: Whether, upon finding that there is a grave risk that a return would expose a child to physical or psychological harm (or intolerable situation), a district court is required to consider ameliorative measures (in other words, undertakings) to facilitate the (safe) return of the child. For the exact wording of the petition, see below. 

Please note that US courts often use the terms “ameliorative measures” and “undertakings” interchangeably (as stated in the petition).This petition has been docketed as Golan v. Saada, No. 20-1034. This petition and other documents relating to this case have been distributed for the Conference of today – 1 April 2021.

“QUESTION PRESENTED

The Hague Convention on the Civil Aspects of International Child Abduction requires return of a child to his or her country of habitual residence unless, inter alia, there is a grave risk that his or her return would expose the child to physical or psychological harm. The question presented is:

Whether, upon finding that return to the country of habitual residence places a child at grave risk, a district court is required to consider ameliorative measures that would facilitate the return of the child notwithstanding the grave risk finding.”

With regard to this issue, there is indeed a split in the US circuits (as well as state courts). 

According to the petition “The First, Eighth, and Eleventh Circuits have indicated that, once a district court determines that there is a  grave  risk  that  the  child  will  be  exposed  to  harm,  the  court need not consider any ameliorative measures,” whereas  “the Second, Third, and Ninth Circuits require a district court to consider a full range of ameliorative  measures  that  would  permit  return  of  the  child,  even when the court finds that there is a grave risk that a child’s return would expose that child to physical or psychological harm.” This case originated in the Second Circuit.

The split in the US circuits has been acknowledged by practitioners, see for example, James D. Garbolino, Federal Judicial Center, The 1980 Hague Convention on the Civil Aspects of International Child Abduction: A Guide for Judges, Second Edition (2015), 137-147 (see in particular p. 143. – but a few different circuits are mentioned, which attest to the confusion of practitioners). Accordingly, in my personal opinion, there is definitely merit in raising this issue before the US Supreme Court.

We will keep you informed as to whether this petition is granted or refused.

(published by Oxford University Press, 2020)

The authors kindly provided the following summary: 

The book marries two fields of law: negotiable instruments and choice-of-law. Bills of exchange, cheques and promissory notes are the main classical negotiable instruments. For centuries, these instruments have played a vital role in the smooth operation of domestic and international commerce, including in transactions between distantly located parties. Through their evolution, fusion, and sophistication, they have remained one of the primary tools for everyday commercial activity, serving as one of the primary methods of payment and credit and one of the cornerstones of the contemporary bank-centred system. The rapid technological progress of payment mechanisms has embraced the traditional institution of negotiable instruments leading to their further adaptation and sophistication in order to meet the challenges of the contemporary reality of frequent mobility of people, goods, and high daily volumes of cross-border transactions and international commerce.

The cross-disciplinary partnership between the authors, one specializing in negotiable instruments and the other in choice-of-law, aims to offer a comprehensive and thorough analysis of the choice-of-law rules applicable to negotiable instruments. The internal structure of negotiable instruments’ law is complex, which has given rise to a popular view favouring the mythological ‘law merchant’,[1] the exclusion of negotiable instruments from the scope of general contract and property law doctrines, and their subsequent exclusion from ordinary choice-of-law analysis.

The central thesis of the book is to challenge this common view. Indeed, the complex structure of negotiable instruments creates a significant challenge for traditional contract and property doctrine and the choice-of-law analysis applicable to them. Yet, in contrast to the common view, the authors argue that the complex case of international negotiable instruments should be analyzed through the lens of traditional contract & property choice-of-law doctrines rather than by crafting new specially designed rules for negotiable instruments.

In order to illustrate this point, consider the – well-known in choice-of-law literature – Giuliano & Lagarde Report (‘The Report’),[2] which has served as a basis for contemporary European Rome Regulations[3] on the question of applicable law. The Report excludes negotiable instruments law from the scope of ordinary choice-of-law analysis.[4]However, one can reassess the three rationales mentioned in the Report to justify negotiable instruments’ law exclusion. First, it makes a point that a negotiable instrument is not a contract.[5] In this book, the authors argue the opposite – from their very origin to their present-day doctrinal analysis, negotiable instruments are very much contracts and carefully follow the essentials of contract law doctrine, alongside the basic elements of tangible property law.[6]

 Second, the Report characterizes a negotiable instrument as a ‘complex contract’.[7] Indeed, in their study the authors provide a precise demarcation of the special nature of the negotiable instrument as a ‘special’ contract to delineate its divergence from the ‘ordinary’ contract; its relation to basic elements of tangible property transfer; and how this divergence affects (if at all) the choice- of- law rules of negotiable instruments, comparatively to choice-of-law rules of ‘ordinary’ contracts and tangible property. While throughout their book the authors show that negotiable instruments present ‘complicated special rules’ that should be analyzed, modified and distinguished from ‘ordinary’ contract law/property law rules, they are very much based on them.

Finally, the Report makes a reference to the existing harmonization processes.[8] In this book, the authors provide a detailed comparative analysis of the various rules in diverse legal systems and they show that they are far from uniform.[9] The authors discuss the various harmonization processes of negotiable instruments,[10] and make some suggestions for possible reforms within the process of international harmonization of the choice-of-law rules,[11] which would capture the challenges of the digital age.[12]  In contrast to the Report, the authors argue that the traditional choice-of-law rules in the areas of contract law and tangible property can serve as a model for such reform of choice-of-law rules of negotiable instruments.

In effect, authors’ call for a redesign of the present choice-of-law rules relating to negotiable instruments finds traces in contemporary literature.  The commentators of one of the leading textbooks in the field have framed the need for a reconsideration of the choice-of-law rules of negotiable instruments in the following terms:

…it must be noted that the Bills of Exchange Act 1882 and much of the case referred to in the following paragraphs is now more than a century old. In that time, the role and significance of bills of exchange in commercial intercourse and the approach of the conflict of laws to freely incurred obligations such as these has changed radically. As the following commentary makes clear, the rules contained in the 1882 Act are neither comprehensive nor easy to understand and apply. A radical overhaul of the law in this area, whether by legislation or international convention, seems long overdue.[13]

In this book, the authors are indeed willing to take up the challenge of a ‘radical overhaul’.  In line with the above-stated quotation, they suggest a radical reorientation of choice-of-law rules. They argue that choice-of-law rules in the area of international negotiable instruments need to be dramatically amended and harmonized.

The contemporary choice-of-law rules within this area of law have originated from flawed premises about the nature of the subject. Further, contemporary rules have left behind the modern development of choice-of-law doctrine. Relying on the foundation of negotiable instruments’ law within the traditional ordinary doctrines of contract and movable property and invoking developments within modern choice-of-law thought, the authors endeavour to challenge the traditional orthodoxy and offer a complete re-examination of the choice-of-law rules of negotiable instruments.

 

[1] See Chapter II.

[2] Report on the Convention on the law applicable to contractual obligations by Mario Giuliano, Professor, University of Milan, and Paul Lagarde, Professor, University of Paris I, Official Journal C 282, 31/10/1980 P. 0001 – 0050.

[3] Commission Regulation (EC) 593/2008 of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contractual Obligations (Rome I), 2008 O.J. (L 177) 6 (EU);  Commission Regulation 864/2007, on the Law Applicable to Non-Contractual Obligations (Rome II), 2007 O.J. (L 199) 40 (EC)

[4] Giuliano & Lagarde Report, sec. 4.

[5] Ibid.

[6] See Chapter I & Chapter II.

[7] Report, sec. 4.

[8] Ibid.

[9] See Chapter I.

[10] See Chapter I & Chapter III.

[11] See Chapters V-VII.

[12] See Chapter VIII.

[13] Lawrence Collins (ed) Dicey, Morris and Collins on the Conflict of Laws (15th edn Sweet & Maxwell 2012) 2077.

 

 

On 24 March 2021 the Court of Justice issued a judgement in the case of SS v MCP, C-603/20 PPU, which concerns interpretation of the jurisdictional rules of Brussels II bis Regulation. The request for a preliminary ruling originated from the High Court of Justice (England & Wales), Family Division.

The Court decided that a court of a Member State seized of an action relating to parental responsibility cannot base its jurisdiction on Article 10 of the Brussels II bis Regulation in a case of abduction of a child to a third State.

Interestingly, the opinion (commented here by Geert Van Calster from the perspective of the principle of mutual trust) suggested the opposite conclusion, in spite of the fact that both the CJEU and the advocate general relied on the wording of the relevant provisions, their context and objectives, legislative history and relation with international instruments.

Factual Background

SS and MCP are two Indian citizens residing in the UK, where their child P was born in 2017. The couple is not legally married. SS is indicated as the father on the birth certificate, and consequently he has parental responsibility. In October 2018, the mother went to India with the child, where the child stayed with her grandmother. In August 2020 P submitted an application to the referring court, seeking an order for the return of the child to the UK and a ruling on rights of access.

The mother has challenged the jurisdiction of the court, since the child is not habitually resident in the UK. In the opinion of the referring court, the conduct of the mother probably amounts to the child’s wrongful removal (retention) in India. India is not a contracting party to the 1980 Hague Child Abduction Convention.

Preliminary Question

The referring court considers that it is necessary to determine whether it has jurisdiction on the basis of Brussels II bis (for its application in the UK for proceedings initiated before the end of transition period see: Note to Stakeholers on Brexit and PIL). Because the child does not have habitual residence in the UK and there is no consent of both parents as to jurisdiction of UK courts, the court has doubts whether it might base its jurisdiction on Article 10 Brussels II bis.

In accordance with this provision in case of a wrongful removal (retention), the courts of the Member State where the child was habitually resident immediately before the wrongful removal (retention) retain their jurisdiction until the child has acquired habitual residence in another Member State and one of alternative additional requirements is met. As the child was wrongfully retained in a third State, the referring court wonders whether Article 10 provides that UK courts retain their jurisdiction … indefinitely.

The Judgement

The CJEU answered strongly in the negative and underlined that:

(…) there is no justification for an interpretation of Article 10 [Brussels II bis] that would result in indefinite retention of jurisdiction in the Member State of origin in a case of child abduction to a third State, neither in the wording of that article, nor in its context, nor in the travaux préparatoires, nor in the objectives of that regulation. Such an interpretation would also deprive of effect the provisions of the 1996 Hague Convention in a case of child abduction to a third State which is a contracting party to that convention and would be contrary to the logic of the 1980 Hague Convention (paragraph 62).

As a result, the jurisdiction of the referring court might be determined in accordance with the applicable international conventions or, in the absence of any such international convention, in accordance with Article 14 Brussels II bis (which requires the presence of the child within the forum).

The Reasoning of the Court

First, the wording of Article 10 Brussels II bis clearly indicates that it applies to intra-EU abductions only (points 38-41), as it talks about “a Member State” and “another Member State”.

Second, as regards the context of Article 10 Brussels II bis, CJEU pointed that it constitutes a special ground of jurisdiction with respect to the general one in matters of parental responsibility laid down in Article 8(1), which provides for the jurisdiction of the Member State, where the child is habitually resident (paragraph 43). This ground of jurisdiction “defeats what would otherwise be the effect of the application of the general ground of jurisdiction (…), in a case of child abduction, namely the transfer of jurisdiction to the Member State where the child may have acquired a new habitual residence, following his or her abduction. Since that transfer of jurisdiction might secure a procedural advantage for the perpetrator of the wrongful act, Article 10 of that regulation provides (…) that the courts of the Member State where the child was habitually resident before the wrongful removal or retention are, nonetheless, to retain their jurisdiction unless certain conditions are met” (paragraph 45).

As a result, if the child has acquired new habitual residence outside the EU, after being wrongfully removed (retained) in a third State, there is no room for the application of the general rule. Hence,  in such case also the rule laid down in Article 10 “loses its raison d’être, and there is not, therefore, any reason to apply it” (paragraph 46). Additionally, as it is a special ground of jurisdiction, it must be interpreted restrictively (paragraph 47).

By the way, it is striking to see absolutely different conclusions drawn from this juxtaposition of Articles 8 and 10 Brussels II bis in the opinion:

Where a child was habitually resident in a Member State, as is the case with the child here, the courts of that Member State are to retain their jurisdiction until that child acquires his or her habitual residence in ‘another Member State’. Since reference is made only to another Member State, it can be inferred from this, in my view, that, where a child is wrongfully removed to, or retained in, a non-Member State, the courts of the Member State in which that child was habitually resident continue to have jurisdiction (paragraph 53 of the opinion)

Third, the CJEU refers to the legislative history of Brussels II bis and reminds that the EU legislature wanted to establish strict rules with respect to child abductions within the EU, whereas abductions to third states are supposed to be covered by international conventions, such as the 1980 Hague Child Abduction Convention and 1996 Hague Parental Responsibility Convention. It might be noted that 1980 Hague Convention is not referred to in the opinion.

The CJEU points out also that the interpretation of Article 10 Brussels II bis as proposed by the referring court “would have the consequence that, where the child has acquired a habitual residence in a third State which is a contracting party to the 1996 Hague Convention, following an abduction, Article 7(1) and Article 52(3) of that convention would be deprived of any effect” (paragraph 53). It should be noted that Article 7(1) 1996 Hague Convention makes provision (like Article 10 Brussel II bis) “for a transfer of jurisdiction to the courts of the State where the child has acquired a new habitual residence, if certain conditions are satisfied. Those conditions are connected, in particular, to the passage of time together with acquiescence or inaction on the part of the person concerned who holds a right of custody, the child having become settled in his or her new environment” (paragraph 54). This possibility would be precluded if Brussels II bis would allow the courts of a Member State to retain indefinitely their jurisdiction (paragraph 55).

Such retention of jurisdiction, in view of the CJEU, would also be “contrary to Article 52(3) of the 1996 Hague Convention, which prohibits rules agreed between one or more contracting States (…) from affecting, in the relationships of those States with the other contracting States, the application of the provisions of that convention. To the extent that jurisdiction in matters of parental responsibility could not be transferred to those courts of contracting States, those relations would necessarily be affected” (paragraph 55).

Additionally, indefinite retention of jurisdiction would be incompatible with one of the fundamental objectives pursued by the regulation, namely the best interests of the child, which gives priority to the criterion of proximity (paragraph 58). This objective requires setting balance between “the need to prevent the perpetrator of the abduction from reaping the benefit of his or her wrongful act” and “the value of allowing the court that is closest to the child to hear actions relating to parental responsibility” (paragraph 59). Interestingly, in the opinion, while referring to the best interest of the child, the objective of “deterring child abductions” seems to be given priority (paragraph 70 of the opinion).

Finally, indefinite retention of jurisdiction, according to the CJEU, would also disregard the logic of the mechanisms established by the 1980 Hague Convention.

If, in accordance with Article 16 of that convention, it is established that the conditions laid down by that convention for return of the child are not satisfied, or if an application under that convention has not been made within a reasonable time, the authorities of the State to which the child has been removed (…) become the authorities of the State of habitual residence of the child, and should, as the courts that are geographically closest to that place of habitual residence, have the power to exercise their jurisdiction in matters of parental responsibility. That convention remains applicable, in particular, in relations between the Member States and the other contracting parties (paragraph 61).

Meeting of the Council on General Affairs and Policy

The Council on General Affairs and Policy (CGAP) of the HCCH met online from 1 to 5 March 2021, with over 350 participants. Over the course of five days, HCCH Members reviewed progress made to date and agreed on the work programme for the year ahead. More information is available here.

Several important developments relating to Membership and HCCH Conventions occurred during the meeting:

• Thailand deposited its instrument of acceptance of the Statute, becoming the 88thMember of the HCCH.
• El Salvador applied to become a Member of the HCCH. Following a six-month voting period and provided a majority of votes have been cast in its favour, El Salvador will be invited to become a Member by accepting the Statute of the HCCH.
• Israel signed the HCCH 2005 Choice of Court Convention and the HCCH 2019 Judgments Convention. The 2005 Choice of Court Convention, which currently binds 31 States and the EU, will enter into force for Israel only after it deposits an instrument of accession or ratification. Although the 2019 Judgments Convention is not yet in force, Israel is the third signatory to the Convention.

More information on these developments is available here.

Finally, as customary the meeting coincided with the publication of the Annual Report of the HCCH. The 2020 Annual Report can be downloaded or ordered here.

Other Meetings & Events

On 15 and 18 March, the HCCH and the International Union of Judicial Officers co-hosted a webinar on the application of the 1965 Service Convention and the 2019 Judgments Convention aimed at judicial officers and other legal professionals. Recordings of the webinar are available here in English and here in French.

On 18 March, the HCCH and the Ministry of Foreign Affairs of Japan co-hosted a webinar on the HCCH 1980 Child Abduction Convention in the Asia Pacific, attended by judges and officials of Central Authorities from 12 countries and regions in the Asia Pacific. More information is available here.

On 30 March, the HCCH participated in the virtual High Level Conference “Protecting Vulnerable Adults across Europe – the Way Forward”, organised by the Ministry of Justice of Portugal, the European Commission and the European Union Agency for Fundamental Rights under the auspices of the Portuguese Presidency of the Council of the European Union. The recording of the conference is available here.

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

I am not especially keen on celebrating anniversaries. However, as things stand now in the European Union I thought it worth a short post on the seminal decision of the Court of Justice in case 22/70, AETR (EU:C:1971:32), of 31 March 1971. My attention has been drawn to its fiftieth anniversary.

Let’s celebrate what it meant legally (no political stance here), in terms of strengthening the competences of the (nowadays) Union and, as a consequence, for the uniformity of the legal systems of the Member States.

Background

The case is named after the European Agreement concerning the work of crews of vehicles engaged in international road transport (AETR), done at Geneva on 19 January 1962. The agreement had been signed by five of the six Member States of the EEC and other European States, but could not enter into force, absent the necessary ratifications. Negotiations for the revision of the agreement were resumed in 1967. Similar work undertaken at Community level with regard to standardizing driving and rest periods of drivers of road transport vehicles resulted in Regulation No 543/69 of the Council of 25 March 1969 on the harmonization of certain social legislation relating to road transport. In the course of its meeting on 20 March 1970 the Council, in view of the meeting of the sub-committee on Road Transport of the Economic Commission for Europe of  April 1970 at Geneva, discussed the attitude to be taken by the six Member States of the EEC in the negotiations for the conclusion of a new AETR.

The Member States conducted and concluded the negotiations in accordance with the proceedings of 20 March 1970. The AETR was made available by the secretariat of the Economic Commission for Europe from 1 July 1970 for signature by the Member States. On 19 May 1970 the Commission of the European Communities lodged an application for the annulment of the proceedings of the Council of 20 March 1970 regarding the negotiation and conclusion of the AETR by the Member States of the EEC.

In essence, the Commission disputed the validity of said proceedings on the ground that they involved infringements of the Treaty, more particularly of Articles 75, 228 and 235 concerning the distribution of powers between the Council and the Commission, and consequently the rights which it was the Commission’s duty to exercise in the negotiations on the AETR.

Ruling

The Court ruled actually against the application. This notwithstanding, it also made substantial assertions on the extent of the external competence of the Community:

The Community enjoys the capacity to establish contractual links with third countries over the whole field of objectives defined by the Treaty. This authority arises not only from an express conferment by the Treaty, but may equally flow from other provisions of the Treaty and from measures adopted, within the framework of those provisions, by the Community institutions. In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form they may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules or alter their scope. With regard to the implementation of the provisions of the Treaty, the system of internal Community measures may not be separated from that of external relations.

Consequences in the Domain of PIL

The consequences of the AERT decision on PIL conventions have been profusely analyzed by scholars (see, for instance, The External Dimension of EU Private International Law after Opinion 1/13, edited by P. Franzina). Two Opinions have been rendered directly focusing on the field. In the first one, Opinion 1/03 (EU:C:2006:81), delivered on February 7, 2006, the Court was requested by the Council to answer whether the conclusion of the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters falls entirely within the sphere of exclusive competence of the Community, or within the sphere of shared competence of the Community and the Member States. The second Opinion is Opinion 1/13 (EU:C:2014:2303), of 14 October 2014; the European Commission asked the Court whether the exclusive competence of the European Union encompasses the acceptance of the accession of a non-Union country to the Convention on the civil aspects of international child abduction concluded in the Hague on 25 October 1980.

In both cases the Court’s ruling supports the exclusive competence of the Union. This should be enough to proceed without a further Opinion in regard to the HCCH 2019 Judgments Convention, or, for that matter, to the accession of the UK to the 2007 Lugano Convention. A trickier question may be, though, whether the Member States are free to update bilateral conventions preexisting the Brussels regime, just as Norway has done (see, implicitly in favor of negative answer, Alex Layton here. I concur).

Written by Marcus Teo (Sheridan Fellow (Incoming), National University of Singapore)

Since Foster v Driscoll [1929] 1 KB 470, common law courts have recognised that contracts made with the intention to commit a criminal offence in a foreign state are unenforceable, even if the contract contemplated an alternative mode or place of performance. However, recent developments in domestic law illegality have sparked debate on whether foreign law illegality too should be reformed in a similar light (see Ryder Industries Ltd v Chan Shui Woo [2016] 1 HKC 323, [36], [52]-[55]; cf Magdeev v Tsvetkov [2020] EWHC 887 (Comm), [331]-[332]). The debate, however, has thus far not considered whether foreign law illegality should expand to bar certain non-contractual claims – a question which the Singapore Court of Appeal’s recent decision in Jonathan Ang v Lyu Yan [2021] SGCA 12 raises.

Lyu Yan wanted to transfer money from China to Singapore. Her bank in Singapore introduced her to Joseph Lim for assistance. Joseph proposed that Lyu transfer Renminbi from Lyu’s Chinese bank account to the Chinese bank accounts of two other individuals, Jonathan Ang and Derek Lim. Jonathan and Derek would then transfer an equivalent sum in Singapore Dollars from their Singapore bank accounts to Lyu’s Singapore bank account. Lyu performed the transfer in China, but received no money in Singapore. She then sued Joseph for breach of contract; and sued Joseph, Jonathan and Derek in tort and unjust enrichment. At first instance, the Singapore High Court ruled against all three defendants. Joseph did not appeal, but Jonathan and Derek did, arguing, inter alia, that Foster barred Lyu’s non-contractual claims against them because Chinese law prohibited their transaction.

Andrew Phang JCA, who delivered the Court’s judgment, dismissed Jonathan and Derek’s appeal. It was undisputed that the transaction, if performed, would have violated Chinese law (See Lyu Yan v Lim Tien Chiang [2020] SGHC 145, [15]-[16]). However, Lyu did not intend to break Chinese law – the facts at their “highest” showed that she thought the transaction contravened Singapore law rather than Chinese law (Jonathan Ang, [18], [20]). Thus, since Foster does not apply if the claimant does not intend to contravene a specific foreign law, it was inapplicable.

Of interest, though, were Phang JCA’s obiter comments: if Lyu had known the transaction contravened Chinese law, would her non-contractual claims be barred? Foster, he noted, was “not applicable in relation to non-contractual claims” ([26]). This was contrasted with the position in domestic law illegality, where an illegality affecting a contract could sometimes also bar other non-contractual claims arising from the contractual relationship ([27]-[28]). Here, Phang JCA referenced Ochroid Trading Ltd v Chua Siok Lui [2018] 1 SLR 363, where the Court of Appeal had held that claims in unjust enrichment (and, potentially, tort) arising from a contractual relationship would be barred if it stultified the policy underlying the law which rendered the contract unenforceable (Ochroid Trading [145]-[159], [168])

Phang JCA then considered whether Foster and Ochroid Trading could be “read together” (Jonathan Ang, [30]) – i.e., whether foreign and domestic law illegality, as separate doctrines, could apply on the same facts. This could only happen when Singapore law was the lex contractus, because, while Foster barred contract claims “regardless of their governing laws”, Ochroid Trading barred only claims governed by Singapore law. If indeed Foster and Ochroid Trading were “read together”, however, “possible difficulties” arose, because it would put a plaintiff with a Singapore law contract in a worse position than a plaintiff with a foreign law contract: the former would potentially have both his contractual and non-contractual claims barred, while the latter would have only his contractual claim barred ([33]). To Phang JCA, this was undesirable, because there was “no principled reason” for this distinction ([34]). While Phang JCA did not attempt to resolve these “difficulties”, he concluded by noting that for both foreign law and domestic law illegality “the concept of policy serves as a limiting factor to ensure that the illegality involved does not inflexibly defeat recovery where such recovery is justified” ([34]) – presumably, then, Phang JCA was noting tentatively that recourse to public policy arguments might help ameliorate the differences between the two classes of plaintiffs he identified.

Phang JCA’s comments in Jonathan Ang raise more questions than answers; this was of course by design, given their tentative and exploratory nature. However, with respect, the correctness of some of the assumptions Phang JCA relied on may be doubted. First, one may only conclude that there is no “principled reason” for treating plaintiffs with Singapore law contracts differently from plaintiffs with foreign law contracts if one accepts that domestic and foreign law illegality share the same “principled” basis. However, Foster’s principled basis remains shrouded in uncertainty: courts and commentators have variously called it a doctrine of public policy, comity and international jurisdiction, but only the first conception of Foster aligns it with domestic law illegality. Second, while it is true that the public policies of the forum limit both domestic and foreign law illegality, those public policies perform that function in different ways in those two contexts. In domestic law illegality, courts ask whether barring the plaintiff’s claim would give effect to the forum’s public policies; but in foreign law illegality, courts ask whether denying recognition of the relevant foreign law, and thus allowing the plaintiff’s claim, would give effect to the forum’s public policies. It follows that public policy arguments may not consistently resolve differences between the two classes of plaintiffs identified by Phang JCA.

At base, the questions posed in Jonathan Ang (and the assumptions they relied on) were only relevant because of Phang JCA’s continued acceptance of one central proposition: that foreign law illegality bars only contractual claims. Yet, this proposition is doubtful; in Brooks Exim Pte Ltd v Bhagwandas Naraindas [1995] 1 SLR(R) 543, Singapore’s Court of Appeal considered Foster in relation to a claim for “money had and received”, and found it inapplicable only because parties there did not intend to breach foreign law (Brooks Exim, [1], [14]). Moreover, the justification for limiting Foster’s rule to contractual claims remains unclear: in Jonathan Ang Phang JCA cited the English High Court’s decision in Lilly Icos LLC v 8PM Chemists Ltd [2010] FSR 4 for it, but there that proposition was simply accepted without argument (Lilly Icos, [266]). A possible justification might be that only in contract claims may parties, by virtue of their ability to choose the governing law, avoid the applicability of the (criminal) law of a foreign state objectively connected to their relationship. This, however, would be a poor justification, since parties have the autonomy to choose the governing law for various non-contractual claims as well. An expressly chosen law, for example, may govern not just parties’ contract, but also claims in unjust enrichment arising from that contractual relationship by virtue of a characterization sub-rule, and potentially also tort claims under an exception to the lex loci delicti rule (or, in Singapore’s context, the double actionability rule). If foreign law illegality exists to prevent parties from avoiding the law of a state objectively connected to their contractual relationship, it should bar all claims arising from that contractual relationship governed by parties’ chosen law, regardless of whether those claims are “contractual” or “non-contractual”.

 

The European Commission (EC) is preparing a legislative initiative on the recognition of parenthood between the EU Member States. The EC is now in the process of setting up an Experts’ Group on the topic and has issued a call for Experts which, together with more information, can be found here.

On Tuesday, April 6, 2021, the Hamburg Max Planck Institute will host its ninth monthly virtual workshop in private international law at 11:00-12:30. Since January of this year, we are alternating between English and German language. Burkhard Hess (Max Planck Institute Luxemburg for Procedural Law)  will speak, in German, about the topic

„Comparative Procedural Law and Justice – neue Wege in der Prozessrechtsvergleichung
(“Comparative Procedural Law and Justice – New Avenues for Comparative Civil Procedure”

The presentation will be followed by open discussion. All are welcome. More information and sign-up here. This is the ninth such lecture in the series, after those by Mathias Lehmann in June, Eva-Maria Kieninger in July, Giesela Rühl in September, Anatol Dutta in October, Susanne Gössl in November, Marc-Philippe Weller in December, Macjiej Szpunar in January,  Dagmar Coester-Waltjen in February, and Horatia Muir Watt in March. In May we will again have an English language event – stay tuned! If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de

Information and text provided by Niklaus Meier, co-head of the Private International Law Unit at the Swiss Federal Office of Justice

The Swiss Federal Act on Private International Law (FAPIL), adopted in 1987, has had – and still has – a huge influence throughout the world. It is “possibly the most complete codification of private international law worldwide” (Kadner Graziano, Journal of Private International Law. 2015, vol. 11, no. 3, p. 585: “Codifying European Private International Law: The Swiss Private International Law Act – A Model for a Comprehensive European Private International Law Regulation?”) and has influenced PIL codifications in many countries (Kadner Graziano, p. 589-90).

The global relevance of the Swiss Federal Act on PIL led to numerous translations, testament of its international character. Complete translations have been published by Prof. Andreas Bucher (last updated 2021): www.andreasbucher-law.ch; Umbricht attorneys (2017): www.umbricht.ch/de/schweizerisches-internationales-privatrecht-iprg; Gehri/Walther (2010): www.schulthess.com/verlag/detail/ISBN-9783280072509/Gehri-Myriam-A.-Walther-Fridolin/Swiss-Laws-on-Civil-Procedure; the Swiss-American Chamber of Commerce (2nd edition 2004, 1st edition 1989); and Karrer/Arnold/Patocchi (1994): Switzerland’s Private International Law (Schulthess/Kluwer). In addition, chapter 12 on arbitration has been translated by actors active in the field, such as the Swiss Arbitration Association (www.arbitration-ch.org/en/arbitration-in-switzerland/index.html).

Translation is a difficult task: “Mastery of the languages involved is necessary, but not sufficient, particularly where the user of a translation expects a literal translation, the legal systems of the starting languages and target language differ fundamentally and the subject matter is highly abstract.” (Walter König, 11 Mich. J. Int’. L. 1294 (1990), 1295, “Translation of Legal Texts: Three English Versions of the Swiss Federal Statute on Private International Law”). Indeed, a civil law codification usually “contains many legal terms which either do not exist in common law jurisdictions or have different connotations in the case of literal translations”.

In recent years, the importance of English versions of the Swiss legal texts has grown. To give just one example: Article 4.4 of the Swiss-Chinese Free Trade Agreement (page 23) explicitly states (under the heading “transparency”) that “Each Party shall promptly publish on the Internet, and as far as practicable in English, all laws, regulations and rules of general application relevant to trade in goods between China and Switzerland.” It goes without saying that the FAPIL is relevant for international trade.

Against this background, and in view of the growing demand for the availability of Swiss legal texts in English, the official publication platform for Swiss law (Fedlex) has now released the “official non-official” translation of the FAPIL: www.fedlex.admin.ch/eli/cc/1988/1776_1776_1776/en. It is up to date as per February 2021 and includes the most recent DLT-related PIL amendments.

The character of the translation is “official” because it’s published on the official publication platform for Swiss law, which speaks for itself; but it nevertheless is of “non-official” nature only because “English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.” In can perhaps best be described as “officially non-official, but unofficially official”.

The translation is in large parts based on the translation published by Prof. Andreas Bucher, with the kind permission of the author. The translation does not aim to be (and is not) better than the various existing private translations of the FAPIL, which have provided useful guidance during the past decades. The translation simply wants to render the FAPIL more accessible to the international public, and in order to do so and in order to get approval for publication on the official publication platform for Swiss law, certain adaptations were necessary:

Where several choices of wording were possible, preference was given to expressions that are already in use in other translations of Swiss legislation (e.g. translations of the Swiss Civil Procedure Code, the Swiss Civil Code, or the Swiss Code of Obligations), in order to ensure coherence and consistency.

Due account was also given to the wording used in international conventions ratified by Switzerland (such as the numerous Hague Conventions).

In addition, the translation takes into account language requirements applicable to texts published by the Swiss federal administration, such as the use of gender-neutral language where appropriate and where possible; this led to the use of the “singular-they”, applicable to both female and male persons.

People who work in different languages and who have compared the different language versions of the FAPIL will have noted some differences between the French, German and Italian versions of the texts. For example, art. 151 para. 3 in the German version, translated with deepl, states that “This jurisdiction cannot be excluded by a choice of court agreement.”, whereas the French version starts the paragraph (again according to deepl) with “Notwithstanding a choice of court, …” In such circumstances, preference was given to the wording that seemed clearer and more in line with the interpretation given to the text by the Federal Supreme Court.

Traduire c’est trahir – translation is treason. Those who coordinated the translation (the Private International Law Unit at the Swiss Federal Office of Justice) are fully aware that critics will find areas for improvement. Feedback can be sent to ipr [at] bj.admin.ch. The translation will continue to be improved and updated in the years to come, in order to respond to new developments such as the upcoming revision of the chapter on succession law.

In September 2020, the First President of the French supreme court for private and criminal matters (Cour de Cassation), Ms Chantal Arens, presented the main aspects of the Court’s international strategy for 2020-2022.

The report of this presentation (available here, in French) may be of interest to practitioners and academics dealing with private international law (PIL) issues connected to France.

Here are the key elements of the report and some personal comments.

This “international action plan” of the Cour de Cassation is the result of discussion within the Court and exchanges with institutional partners worldwide. It is based on three main objectives: international reputation, promotion of fundamental values and judicial cooperation.

International Reputation

The first objective is for the Cour de Cassation to gain an international recognition of its qualities as a judicial institution, in particular regarding its working methods (see here) and caselaw. This ambition is also part of a broader goal of promoting the civil law tradition and the French-speaking community worldwide.

Against this backdrop, the website of the Court will be accessible in foreign languages and its landmark judgements will be translated into various languages and accessible online (see, for now, the very few documents available in English). It will be a great advantage for non-French-speaking PIL experts to be able to access the French “living law” in civil and commercial matters. In this respect, the international commercial chamber at the Paris Court of Appeal (ICCP-CA) established in 2018 may surely be seen as a pioneer within the French legal landscape, since its judgements are translated into English (see here).

Fundamental Values

The second objective is the promotion of the fundamental values and principles of the French judicial system (i.e. independence of justice, legal certainty, “dialogue” between judges, fundamental freedoms). However, these are not specific to France since they are inherent to the European legal order, within the Council of Europe and the European Union.

Regarding transnational judicial dialogue, it can be noticed that the Cour de Cassation is more and more likely to refer to European case law in its own decisions (for a recent example reported on this blog, see here). It may also be noted that the Court submitted to the ECtHR, in October 2018, the first request under Protocol No. 16 in the field of international family law. A PIL issue was at stake, namely the compliance with article 8 of the ECHR of the non-recognition of a foreign birth certificate of a child born abroad as the result of a surrogacy – prohibited in France – (for the request see here and for the advisory opinion see here).

Within the EU legal order, however, one could expect the Cour de Cassation to reinforce its involvement by referring to the CJEU requests of interpretation of EU law (and EU PIL in particular). With respect to judicial Cooperation in civil matters, only two cases submitted by the French Court are currently pending before the Court of justice (and three altogether for France in this field; two were reported here and here), whereas, at the same time, around fifteen preliminary questions from German Courts are pending (following a quick research via the curia case-law search form). A recent judgment of the Cour de Cassation on the scopes of Brussels II bis Regulation and 1996 Hague Convention (reported here) may be seen as an illustration of the reluctance of the French Supreme Court to submit preliminary questions to the CJEU, despite the existence of serious doubts on the interpretation of EU (PIL) law (and its duty to do so pursuant to article 267, §3, TFEU).

International Judicial Cooperation

The third objective is to learn from other legal systems in order to enrich French law. It implies, in particular, the development of transnational exchanges on common legal issues. In this context, international judicial cooperation is crucial.

The Cour de Cassation is a member of various European and international networks such as the Association of the French-speaking Supreme Courts (AHJUCAF) and the network of The Presidents of the Supreme Judicial Courts of the Member States of the European Union.

The latter network serves as a forum for exchanges between the European institutions and the national Supreme Courts.

A common portal of case law is also accessible to facilitate the search (and the translation) of national case law within the legal orders of the EU Member States. It should not be confused with the Judicial Network of the European Union (Réseau judiciaire de l’Union européenne, “RJUE”) created more recently on the initiative of the President of the CJUE and the Presidents of the Constitutional and Supreme Courts of the Member States in 2017.

It also provides for a collection of decisions delivered by national courts and tribunals, which are of particular interest for EU law. The creation of such online compendiums of transnational case law is surely of great interest for PIL experts and more efforts (and funds) should be put in their developments (see, by comparison, the unalex and the Lynxlex databases).

 

*Thanks to my colleague Lukas Rass-Masson (University of Toulouse), a recorded conference on the international strategy of the French Court of Cassation, with Ms First President Chantal Arens, is available here.

Judgment in C-307/19 Obala starts in earnest at 59 for the CJEU like the AG (see my review of his Opinion here) holds many of the questions to be inadmissible. The Court focuses its references to selected case-law, and its concluding assessment (72), on the review of the legal relationship between the parties at issue (this was the preferred route of Bobek AG) and on the foundation and modalities of the action in brought before the courts. Both have the hallmark of relationships which might as well have occurred in purely private transactions without any public law indications at all. Hence a conclusion of a ‘civil and commercial’ matter.

The Court’s selective reference to the legal relationship side of the authorities should not however in my view mean that the AG’s ‘subject-matter’ alternative should now be considered as having been rejected for all cases on the scope of Brussels Ia (and many other related PIL instruments).

Geert.

European Private International Law, 3rd ed. 2021, paras 2.28 ff concluding at 2.65.

 

 

 

 

Ilaria Pretelli (Swiss Institute of Comparative Law, University of Urbino) has posted Protecting Digital Platform Users by Means of Private International Law on SSRN.

The present article offers perspectives on the possible adaptation of traditional connecting factors to the digital space. It analyses cases that pit platform users against each other and cases that pit platform users against the digital platform itself. For the first set of cases, reliable guidance is offered by the principle of effectiveness. The enforcement of court decisions in cyberspace is often necessary and also plainly sufficient to render justice. Enhanced protection of weaker parties is advocated, both in tortious (favor laesi) and contractual liability (protection of the weaker party), in line with the most recent achievements in human rights due diligence. Protection clauses leading to destination-based labour standards would be a welcome step forward. Protection of users also offers guidance for the shaping of private international law rules governing disputes between users and the platform.

The paper is forthcoming in Cuadernos de Derecho Transnacional.

26 March 2021, in response to the UK’s sanctions on relevant Chinese individuals and entity about human rights issues in Xinjiang, China announces on nigh individuals and four entities in the UK, including a top barrister chamber, the Essex Court Chambers. The sanctions measures include prohibiting individuals and their immediate family members from entering into China, freezing their property in China and prohibiting Chinese citizens and institutions from doing business with them. China reserves the right to take further measures.
This is the first time that international sanctions are imposed on an entire set of a legal services organisation. The reason is that four barristers at Essex Court Chambers published a legal opinion about the Xinjiang human rights matters. However, barristers are self-employed, solo practitioners. They cannot become partners of chambers, do not represent the opinion of chambers and are not supervised or guided by chambers for their professional work. It is unusual to sanction chambers for the opinions of its members. The sanctions also cannot force the chambers to supervise the work of barristers. It, however, may generate a chilling effect in the legal sector, especially for firms with close Chinese business connections.
The immediate consequence of the sanctions is that Chinese clients and business partners will have to end business or working relationships with members of the Chambers. The sanctions at the moment only apply to Chinese individuals and institutions, excluding foreign entities. However, it is unclear if “Chinese” refers to mainland or includes Hong Kong and Macau. Furthermore, although the sanctions do not affect foreign entities, if the member of the Chambers represents a foreign entity in litigation or arbitration and the judgment or award needs to be recognised and enforced in China, it may cause problems. The Chambers members cannot enter China, including mainland, Hong Kong and Macau, including appearing as counsels in arbitration. It is unclear whether the sanctions may affect the Chambers Singapore Group Practice. Finally, many members at the Chambers also act as arbitrators. It is unclear if arbitral awards made by the Chambers members can be recognised and enforced in China. Anyway, according to the sanctions, Chinese parties would not be able to engage with the Chambers members and would likely reject them acting as arbitrators.

Written by Mayela Celis

On 25 March 2021, the US Supreme Court rendered its opinion on the consolidated Ford Motor cases, which deals with personal jurisdiction (in particular, specific jurisdiction) over Ford Motor Company. These cases deal with a malfunctioning 1996 Ford Explorer and a defective 1994 Crown Victoria vehicles, which caused the death of a passenger in Montana and the injury of another passenger in Minnesota, respectively. The consolidated cases are: Ford Motor Co. v. Montana Eighth Judicial District Court et al. and Ford Motor Co. v. Bandemer.

The opinion is available here. We have previously reported on this case here.

The question presented was:

The Due Process Clause permits a state court to exercise specific personal jurisdiction over a non­resident defendant only when the plaintiff’s claims “arise out of or relate to” the defendant’s forum activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (internal quotation marks omitted). The question presented is: Whether the “arise out of or relate to” requirement is met when none of the defendant’s forum contacts caused the plaintiff’s claims, such that the plaintiff’s claims would be the same even if the defendant had no forum contacts.

As noted in our previous post, it can be argued that besides jurisdictional matters relating to the defendant, these cases deal with fundamental notions of access to justice for consumers. Fortunately, the US Supreme Court sided with the victims of the car accidents. As a result, buyers of Ford vehicles are able to sue in their home State (instead of chasing up the defendant). Undoubtedly, this promotes access to justice as it decreases the litigation costs of suing a giant company elsewhere, as well as it avoids the hardship of suing in a remote place.

For a summary of the facts, see the syllabus of the opinion. We also include the facts here:

“Ford Motor Company is a global auto company, incorporated in Delaware and headquartered in Michigan. Ford markets, sells, and services its products across the United States and overseas. The company also encourages a resale market for its vehicles. In each of these two cases, a state court exercised jurisdiction over Ford in a products-liability suit stemming from a car accident that injured a resident in the State. The first suit alleged that a 1996 Ford Explorer had malfunctioned, killing Markkaya Gullett near her home in Montana. In the second suit, Adam Bandemer claimed that he was injured in a collision on a Minnesota road involving a defective 1994 Crown Victoria. Ford moved to dismiss both suits for lack of personal jurisdiction. It argued that each state court had jurisdiction only if the company’s conduct in the State had given rise to the plaintiff’s claims. And that causal link existed, according to Ford, only if the company had designed, manufactured, or sold in the State the particular vehicle involved in the accident. In neither suit could the plaintiff make that showing. The vehicles were designed and manufactured elsewhere, and the company had originally sold the cars at issue outside the forum States. Only later resales and relocations by consumers had brought the vehicles to Montana and Minnesota. Both States’ supreme courts rejected Ford’s argument. Each held that the company’s activities in the State had the needed connection to the plaintiff’s allegations that a defective Ford caused instate injury” (Our emphasis).

Ford alleged that the Court should follow a causation-only approach. That means that as stated in the syllabus of the opinion that “In Ford’s view, due process requires a causal link locating jurisdiction only in the State where Ford sold the car in question, or the States where Ford designed and manufactured the vehicle. And because none of these things occurred in Montana or Minnesota, those States’ courts have no power over these cases.”

Fortunately, the Court did not follow that interpretation and stated that:

“To see why Ford is subject to jurisdiction in these cases (as Audi, Volkswagen, and Daimler were in their analogues), consider first the business that the company regularly conducts in Montana and Minnesota. See generally 395 Mont., at 488, 443 P. 3d, at 414; 931 N. W. 2d, at 748; supra, at 3?4. Small wonder that Ford has here conceded “purposeful availment” of the two States’ markets. See supra, at 7-8. By every means imaginable—among them, billboards, TV and radio spots, print ads, and direct mail— Ford urges Montanans and Minnesotans to buy its vehicles, including (at all relevant times) Explorers and Crown Victorias. Ford cars—again including those two models—are available for sale, whether new or used, throughout the States, at 36 dealerships in Montana and 84 in Minnesota. And apart from sales, Ford works hard to foster ongoing connections to its cars’ owners. The company’s dealers in Montana and Minnesota (as elsewhere) regularly maintain and repair Ford cars, including those whose warranties have long since expired. And the company distributes replacement parts both to its own dealers and to independent auto shops in the two States. Those activities, too, make Ford money. And by making it easier to own a Ford, they encourage Montanans and Minnesotans to become lifelong Ford drivers” (our emphasis).

[…]

“Here, resident-plaintiffs allege that they suffered in-state injury because of defective products that Ford extensively promoted, sold, and serviced in Montana and Minnesota. For all the reasons we have given, the connection between the plaintiffs’ claims and Ford’s activities in those States— or otherwise said, the “relationship among the defendant, the forum[s], and the litigation”—is close enough to support specific jurisdiction. Walden, 571 U. S., at 284 (internal quotation marks omitted). The judgments of the Montana and Minnesota Supreme Courts are therefore affirmed.”

In sum, in this David and Goliath scenario, the US Supreme Court sided with the consumers and promoted access to justice.