Droit international général

I reported earlier on complex enforcement issues concerning SAS Institute v World Programming. In [2020] EWCA Civ 599 SAS Institute Inc v World Programming Ltd Flaux J gives an overview of the various proceedings at 4:

The dispute between the parties has a long history. It includes an action brought by SAS against WPL in this country in which SAS’s claims were dismissed; a decision by WPL, following an unsuccessful challenge on forum non conveniens grounds, to submit to the jurisdiction of the North Carolina court and to fight the action there on the merits; a judgment in favour of SAS from the North Carolina court for some US $79 million; an attempt by SAS to enforce the North Carolina judgment in this jurisdiction which failed on the grounds that enforcement here would be (a) an abuse of process, (b) contrary to public policy and (c) prohibited by section 5 of the Protection of Trading Interests Act 1980 (“the PTIA”); and a judgment from the English court in favour of WPL for over US $5.4 million, which SAS has chosen to ignore.’

A good case to use therefore at the start of a conflicts course to show students the spaghetti bowl of litigation that may occur in civil litigation. There are in essence English liability proceedings, decided in the end following referral to the CJEU (Case C-406/10); North Carolina liability proceedings, in which WPL submitted to jurisdiction after an earlier win on forum non grounds was reversed on appeal and the NC courts came to the same conclusions as the English ones despite a finding they were not (clearly) under an obligation to apply EU law; next, an SAS enforcement attempt in England which failed (with permission to appeal refused): my earlier post reviews it; next, enforcement proceedings of the NC judgment in California. That CAL procedure includes an assignment order and WPL sought an anti-suit injunction to restrain SAS from seeking assignment orders as regards “customers, licensees, bank accounts, financial information, receivables and dealings in England”: it was not given the injunction for there was at the time no CAL assignment order pending which could be covered by anti-suit. Currently, it seems, there is, and it is an anti-suit against these new assignment orders which is the object of the current proceedings.

At 59 ff follows a discussion of the situs of a debt; at 64 ff the same for jurisdiction re enforcement judgments, holding at 72

Applying these internationally recognised principles to the present case, the North Carolina and California courts have personal jurisdiction over WPL but do not have subject matter jurisdiction over debts owed to WPL which are situated in England. That is so notwithstanding that the losses for which the North Carolina court has given judgment were incurred by SAS in the United States. Nevertheless the effect of the proposed Assignment Order would be to require WPL to assign debts situated in England to SAS which would at least purport to discharge its customers from any obligation owed to WPL, while the effect of the proposed Turnover Order would be to require WPL to give instructions to its banks in England which would discharge the debts situated in England currently owed by the banks to WPL. In substance, therefore, the proposed orders are exorbitant in that they affect property situated in this country over which the California court does not have subject matter jurisdiction, thereby infringing the sovereignty of the United Kingdom.

Which is later confirmed at 83. Consequently the earlier order is overturned: at 89: ‘it follows also that the judge’s conclusion that the Assignment and Turnover Orders were not “markedly exorbitant” was based upon a mistaken premise.’

The anti-suit and anti-enforcement applications are dealt with in particular with reference to comity, and largely granted with some collateral notices of intention by SAS not to seek a particular kind of enforcement.

Someone somewhere must have made partner on this litigation.

Geert.

Professor (and co-editor of this blog) Gilles Cuniberti has published a new article on SSRN, entitled Signalling the Enforceability of the Forum’s Judgments Abroad, where he addresses the already well documented issue of the rise of international commercial courts (and chambers), from a very specific point of view – that of the recognition of the local judgments abroad.

The long, already substantial introduction starts with what may look like a banal recollection

Private international law has traditionally been concerned with the recognition and enforcement of foreign judgments in the forum. In contrast, private international law does not address the recognition and enforcement of the judgments rendered by the courts of the forum in other jurisdictions.

But proves to be the perfect way to open the rich elaboration of thoughts. Indeed, as the author goes on saying, the customary lack of PIL rules dealing with the export of local decisions does not mean that States do not care for the fate of their judgments in other jurisdictions; they do. And while the assertion may surprise if one looks only at the limited success of all efforts to get to a multilateral convention on the enforcement of judgements, the broader view proves it is right. This wider picture points to what the author calls “a shift of paradigm”, where the new international commercial courts feature as main actors:

(i)n many parts of the world, adjudication began to be perceived as a business; a number of states established new courts, or new divisions in their courts, for the purpose of attracting judicial business (…) While these courts have different aims and goals, they all have in common the need to market themselves to potential users. And many have concluded that the enforceability of their judgments abroad is an essential dimension of their marketability.

From this point on, after some paragraphs on the New York Convention on the enforcement of arbitral awards, rightly recalling that the Convention does not guarantee enforcement of such awards, the article proceeds to document and assess the efforts made by international commercial courts to signal the enforceability of their judgments abroad. In a nutshell, three strategies have been developed to that effect:

The first and most obvious one has been to try to enter into agreements providing for the mutual enforcement of judgments of contracting states, which could serve the same function as the 1958 New York Convention for arbitral awards.

Secondly, in light of the limited scope of the 2005 Hague Convention, and with the 2019 Hague Convention not yet in force, alternative strategies have been developed. In this context, several international commercial courts are actively pursuing the conclusion of non binding documents with other courts suggesting that the judgments of the own forum would be enforced by the courts of other states. The aim of these bilateral or even multilateral memoranda, which clearly declare they do not constitute any kind of legislation, is basically to promote the mutual understanding of the law of the participating courts on enforcement of foreign judgments.

In addition, documents suggesting enforceability of judgments abroad are sometimes sought from private actors knowledgeable in the law of foreign judgments, such as academics or law firms. However, as Professor Cuniberti correctly points out, what such guides can bring in terms of signalling the enforceability of one’s courts decisions abroad may be disputed, and a little bit more is required if documents authored by private actors are to be accorded any signalling power.

The third strategy, so far limited to the courts on the Dubai International Financial Center, consist of converting judgments into arbitral awards.

The article ends up with a reflection on remedies in case of deceptive practice: if international commercial adjudication has become a business, with a number of courts acting as service providers – and as such, marketing their services- it would not be acceptable that they adopt strategies misleading potential customers. The article leaves quite open what the remedies should be. There may be, thus, a follow up.

The final version of this publication is included in the next issue of the Rivista di Diritto Internazionale Privato e Processuale.

Written by Oliver Dörr, University of Osnabrück

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of the contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

I. Companies – responsibility

1. As for commercial entities, international law is concerned, above all, with transnational or multinational companies. The term basically describes the conglomerate of commercial entities that are acting separately in at least two different countries and which are tied together by a regime of hierarchical coordination.

2. In times of „global governance“ the international legal concept of responsibility is undergoing a process of de-formalization and, thus, encompasses the violation of social behavioural expectations, which for companies may result from international standards that are not legally binding. The resulting responsibility is a legal one insofar as the law adopts those standards and attaches negative consequences to their violation.

II. Private persons and the law of international responsibility

3. Private companies may be held responsible under international law to the extent that they are either themselves bound by primary legal obligations (direct responsibility), or their business activities are regulated by States which, in doing so, are fulfilling their own international legal obligations (indirect responsibility). A State may just as well impose such regulation without actually being under an obligation to do so (e.g. the US Alien Tort Statute).

Private persons as subjects of international legal obligations

4. Private persons being themselves bound by international legal obligations pertain to the process of de-medatization, which established the legal personality of the individual under international law.

5. Sovereign States can, by concluding international treaties, create legal obligations for private persons, including private companies, directly under international law. The personal scope of this comprehensive law-creating power of States is delimitated by their personal jurisdiction under international law. Whether an individual treaty itself gives rise to legal obligations for private persons, is, just as the creation of individual rights, a matter of treaty interpretation.

6. Genuine legal obligations have evolved for private persons under international criminal law: Here, detailed primary obligations of private persons have developed that are linked to a specific regime of individual responsibility, in particular under the Statute of the International Criminal Court.

7. In contrast, the extension of international human rights obligations to apply directly between private persons is not yet part of the international lex lata. Individual texts pointing in that direction (such as art. 29 para. 1 of the Universal Declaration of Human Rights) are merely of a programmatic nature.

8. Genuine international legal obligations of companies can today be found in the rules regulating deep sea-bed activities (arts. 137, 153 para. 2 UN Convention on the Law of the Sea) and in various treaties establishing regimes of civil liability.

9. Obligations of private persons under international law, including those having direct effect within UN Member States, may also be created by the UN Security Council through resolutions under arts. 39, 41 of the UN Charter.

10. It is fairly uncertain whether the initiative, currently being undertaken within the UN Human Rights Council, to adopt a „legally binding instrument“ encompassing direct human rights liability of private companies, will ever have a chance of becoming binding law.

11. To the extent that there actually are primary obligations of private persons under international law, a general principle of law requires their violation to result in a duty to make reparation. Only in exceptional circumstances could the rules of State responsibility be transferred to private persons.

Obligations to establish the responsibility of private persons

12. An indirect responsibility under international law applies to undertakings via the international legal obligation of States to criminalize certain activities, e.g. in respect of waste disposal, bribery in foreign countries, organized crime and corruption.

Responsibility of private persons under autonomous national law

13. Provisions in national law that autonomously sanction private acts for international law violations bridge with their own binding effect the fact that the private person is not itself bound by the international legal norm.

14. The French Law No. 399-2017 on the plan de vigilance is far too general and vague to serve as an example for an (indirect) international legal reporting responsibility. The same applies to the CSR directive of the European Union of 2014.

III. Responsibility on the basis of non-binding rules of conduct

Behavioural governance without legally binding effects

15. The values contained in certain international law principles shape some social behavioural expectations that are summarized today in concepts of corporate social responsibility (CSR). As a matter of substance, those expectations relate to human rights, the environment, conditions of labour and fighting corruption.

Processes of rule-making

16. The discussion is mainly focused on certain international, cross-sector corporate codes of conduct, such as the OECD Guidelines for Multinational Enterprises (1976), die ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (1977), the UN Global Compact (2000) and the UN Guiding Principles on Business and Human Rights (2011).

17. In particular, with regard to human rights and environment, those rules are extremely unspecific, which means that here, law merely serves as a backdrop in order to endow social behavioural expectations with moral authority.

Responsibility by reception

18. In order to adopt and implement those business-related standards, basically all instruments of law-making and application can be used, as long as they impose normative requirements on companies and their activities. Legal certainty standards under the rule of law, as well as the rules of international law on the jurisdiction of States, can limit the reception.

19. Non-binding standards could be implemented, for example, via the legal regimes of State aid (in particular with respect to export finance), public procurement, investment protection and the rules on civil liability. So far, however, the international standards on business conduct are rarely being implemented in a legally binding manner.

IV. Conclusion

20. If the distinction of law and non-law is to be maintained, responsibility of companies in international law is a theoretical possibility, but of little practical relevance: Only in very specific circumstances are private companies themselves subjected to international legal obligations; moreover, it is similarly rare that „soft“ international standards of conduct are being adopted by „hard“ law and thereby made into specific legal duties of companies.

21. Behavioural standards that determine the international debate on CSR assign a mere „backdrop function“ to the law, as they neither identify concretely the international legal norms referred to, nor differentiate them properly. In that context, companies are simply required to publicly declare their commitment to „the good cause“, which results in duties to take precautionary measures, to exercise transparency and to publish reports.

22. That is why environmental protection, human rights etc. in relation to the activities of private companies is still mainly the responsibility of States. Tools that exist in international law in this respect, such as the rules of attribution or protective duties, must be adapted and enhanced, in order to achieve adequate solutions for detrimental business conduct on the basis of State responsibility.

Full (German) version: Oliver Dörr, Unternehmensverantwortlichkeit im Völkerrecht, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 133 et seq.

Gathering (or rather e-gathering) professors and researchers from Brazil, Argentina, Uruguay, Mexico, Spain, and Portugal, a series of webinars is taking place from today until 22 May, under the general topic of PIL and Covid-19: Mobility, Commerce and Challenges in the Global Order.

Subtopics are:

I – PIL, International Institutions and Global Governance in times of Covid-19

II – Protecting persons in mobility and Covid-19: Human Rights, Families, Migrants, and Consumers

III – International Commerce and Covid-19: Global Supply Chains, Civil Aviation, Technologies & Labor

Full programme and more information: here.

The latest edition of the Brussels Agenda, published by the Joint Brussels Office of the Law Societies, features three interesting contributions concerning the impact of Brexit on Private International Law: Will the UK rely more on private international law in the future?, by Michael Clancy; Cross Border Mediation in a Post Brexit World, by Peter Causton; and Recognition and Enforcement of judgments in Civil and Commercial Matters, a note on the UK accession to the Lugano Convention and on further possible developments, namely with respect to the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgements in Civil and Commercial Matters.

The three papers are a very reliable source for the upcoming developments in the UK, given that they’re coming straight from the horse’s mouth.

With respect to the developments on a future access of the UK to the Lugano Convention, Matthias Lehmann has posted recently a piece on this blog (UK Applies for Accession to Lugano Convention). In addition, Giesela Rühl has uploaded an article on Private International Law Post-Brexit on SSRN, which was reported by Marion Ho Dac here.

The first issue of 2020 of the Rivista di diritto internazionale privato e processuale (RDIPP, published by CEDAM) was just released. It features:

Antonietta Di Blase, Professor at the University of Roma Tre, Sull’interpretazione delle convenzioni e delle norme dell’Unione europea in materia di diritto internazionale privato (‘On the Interpretation of the European Private International Law Conventions and Provisions’; in Italian)

• The paper provides an overview of the practice of international and national Courts relating to the interpretation of private international law conventions and EU rules, where uniform approach and autonomy from the national legal orders of Member States are construed as fundamental criteria. Some elements, especially drawn from the Court and the Italian practice, makes it evident that the national judicial organs have substantially endorsed the interpretation by the Court of Justice of the EU of the acts adopted within the framework of the judicial cooperation in civil matters. Possible gaps in EU rules could be overcome through interpretation – in keeping with the main human rights principles – taking into account that sometimes the legislation in force in the Member States follow a different approach, as in the case of family law. Finally, the paper addresses problems connected to the interpretation of conventions with Third States, also taking into account the consequences of the UK’s exit from the European Union.

Gilles Cuniberti, Professor at the University of Luxembourg, Signalling the Enforceability of the Forum’s Judgments Abroad (in English)

• The aim of this article is to document and assess the efforts made by international commercial courts to signal the enforceability of their judgments abroad. To that effect, three strategies were developed. The first and most obvious one was to enter into agreements providing for the mutual enforcement of judgments of contracting States which could serve the same function as the 1958 New York Convention for arbitral awards. Yet, as the 2005 Hague Convention has a limited scope and the 2019 Hague Convention is not yet in force, alternative strategies were identified. Several international commercial courts are actively pursuing the conclusion of non-binding documents with other courts or even law firms suggesting that the judgments of the forum would be enforced by the courts of other States. Finally, one international court has also explored how it could convert its judgments into arbitral awards.

Laura Baccaglini, Associate Professor at the University of Trento, L’esecuzione transfrontaliera delle decisioni nel regolamento (UE) 2015/848 (‘Cross-Border Enforcement of Decisions Pursuant to (EU) Regulation 2015/848’; in Italian)

• This paper addresses the cross-border enforcement of insolvency decisions in Europe. Notably, it examines how the claims brought in the interest of an insolvency proceeding opened in one Member State can be pursued in other Member States. The topic refers to EU Regulation 848/2015 that, as of 26 June 2017, replaced EC Regulation No 1346/2000 without introducing any significant new features as regards the circulation of such judgments, which remain subject to a system of automatic recognition. The reference made by such Regulation to Regulation No 1215/2012 makes the enforcement of those judgments equally automatic, without the need for prior exequatur by the court of the State addressed but only requiring the delivery of a certificate of enforceability by the court of the State of origin. The problem is examined by taking the liquidation procedure as a model, assuming that it was opened in a Member State other than Italy, where the insolvency practitioner needs to recover assets that have been disposed of by the debtor, after the opening of the procedure. The question is addressed as to how the insolvency practitioner can prevent the continuation of individual enforcement proceedings still pending and whether he can intervene to have the assets liquidated, withholding the proceeds. More generally, the problem arises as to which rules govern the liquidation of assets located in Italy and belonging to the debtor. In all these cases, the issue is whether the foreign judgment should be enforced and, if so, how it should be enforced.

The following comment is also featured:

Giovanna Adinolfi, Professor at the University of Milan, L’accordo di libero scambio tra l’Unione europea e la Repubblica di Singapore tra tradizione e innovazione (‘The Free Trade Agreement between the European Union and the Republic of Singapore between Tradition and Innovation’; in Italian)

• The Free Trade Agreement (FTA) with Singapore entered into force on 21 December 2019. It is one of the so-called new generation treaties negotiated and concluded by the European Union within the framework of the trade policy strategy launched in 2006. The FTA is complemented by the Investment Protection Agreement (IPA), signed in 2018 and whose entry into force requires the ratification by all EU Member States, in addition to the EU and Singapore. The overall purpose of the contribution is to assess to what extent the parties to the two agreements have not overlooked the dense network of other treaties and conventions that already govern their cooperation in economic matters. Indeed, the substantive provisions and the dispute settlement mechanisms established under the FTA and IPA have been inspired by these external sources and by their relevant case law. The analysis focuses, first, on the FTA provisions on trade in goods and services, establishment, subsidies, government procurement and intellectual property rights (para 2-6). Thereafter, the IPA is taken into consideration for the purposes of identifying possible overlaps with the FTA rules on establishment (para 7). Finally, focus is placed on the envisaged dispute settlement mechanisms, in view of the role they may play for a proper safeguard of the businesses’ interests (para 7). This issue arises because of the provisions included in both the FTA and the IPA excluding the direct effects of the two agreements in the parties’ legal order. Against this framework, the investor-State dispute settlement mechanism established under the IPA is called on to play a crucial role, also in the light of the detailed provisions on the enforcement of awards under art. 3.22 IPA.

In addition to the foregoing, this issue features the following book review by Angela Lupone, Professor at the University of Milan: Nora Louisa Hesse, Die Vereinbarkeit des EU-Grenzbeschlagnahmeverfahres mit dem TRIPS Abkommen, Mohr Siebeck, Tübingen, 2018, pp. XI-274.

The extensive ruling by Foster J in Roberts (a minor) v Soldiers, Sailors, Airmen and Families Association & Ors [2020] EWHC 994 (QB) is clearly related to Soole J’s 2019 ruling which I reviewed here. Yet exactly how is not clear to me. No reference at all is made to the 2019 ruling (there is reference to an earlier Yoxall M 2018 ruling) in current judgment. Current ruling treats partially related issues of limitation and applicable law, Rome II is not engaged ratione temporis. The English rules’ general lex causae provision (pointing to locus delicti commissi), summarised at 112-113, Foster J finds, should not be displaced with a ‘substantially more appropriate’ rule in the circumstances. However she does find that the implications of the German statute of limitation should be set aside on ordre public grounds, for they would otherwise cause ‘undue hardship’.

Elijah Granet has extensive review here and I am happy to refer.

Geert.

The most recent issue of the Zeitschrift für Vergleichende Rechtswissenschaft (German Journal of Comparative Law; Vol. 119 [2020], No.1) contains the following articles:

Ahmad Natour, Hebrew University, and Talia Einhorn, Ariel University (Israel): The Application of Islamic Law in Israel – Issues of Filiation between Secular and Religious Law, ZVglRWiss 119 (2020) 1–40

This article (in English) presents a critical study of the application of Islamic law in Israel with respect to the establishment of filiation and its effects on Muslim families in Israel considering in particular the interplay between religious and secular law.

Sebastian Omlor, University of Marburg (Germany): Digitales Eigentum an Blockchain-Token – rechtsvergleichende Entwicklungslinien, ZVglRWiss 119 (2020) 41–58

The process of digitalization involves classical and analogue fields of law like property law and object-related legal institutions like property. The paper analyses the openness and flexibility of different jurisdictions concerning the absolute (inter omnes) status of blockchain tokens by a legal comparison of, inter alia, England, California, Germany, and Liechtenstein.

Chris Thomale, University of Vienna (Austria): Herstellerhaftungsklagen – Internationaler Deliktsgerichtsstand und anwendbares Recht bei reinen Vermögensschäden wegen versteckter Produktmängel, ZVglRWiss 119 (2020) 59–110

Product liability has evolved to become an important building block of modern consumer protection. Recent lawsuits, notably surrounding the Dieselgate scandal of German car manufacturers, show that such liability claims typically involve crossborder elements. This paper explores the international procedural and conflict of laws aspects of such lawsuits. It is aimed at raising awareness for victim protection as the overarching principle of both special jurisdiction for tort claims and the conflict of tort laws rule.

In addition, this issue – ZVglRWiss 119 (2020) 111–119 – contains a very elaborate essay of Felix M. Wilke, University of Bayreuth, who reviews “How European is European Private International Law?”, edited by Jan von Hein, Giesela Rühl and Eva-Maria Kieninger (2019). On this book, see also our previous post here.

I had already reported in March on the first application of the CJEU C-18/18 Eva Glawischnig-Piesczek v Facebook ruling in an update to my post on the latter. I thought I’ld add a separate post on the ruling for it, well, deserves it: the court held that orders based on Austrian copyright are limited to Austria (given copyright’s territorial limitations), but if they are based on personal rights, the claimant has to specify the requested territorial reach (so potentially global).

IPKat have further analysis here. As one or two of us discussed at the time of the CJEU ruling: the infringement of personality rights angle is an important one.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2, Heading 2.2.8.2.5.

The author of this post is Caterina Benini, a PhD student at the Catholic University of the Sacred Heart in Milan. This is the fourth in a series of posts aimed to explore the impact of the coronavirus crisis on the phenomena of mobility and exchange that form the constituent elements of private international law, and to discuss the responses that private international law rules provide to the challenges posed by the crisis itself (see the previous contributions by Giovanni Chiapponi, Matthias Lehmann and Tomaso Ferando). The EAPIL blog welcomes further contributions on these topics, either in the form of comments to the published posts or in the form of guest posts. Those interested in proposing a guest post for publication are encouraged to contact the blog’s editorial team at blog@eapil.org.  

The Italian government enacted on 17 March 2020 a Decree-Law, i.e. a piece of urgent legislation, in an effort to mitigate the economic and social consequences of the Covid-19 pandemic. The Italian Parliament later endorsed the Decree-Law and converted it into Law.

The Decree-Law sets forth a broad range of measures, some of which relate to employment contracts. In particular, Article 46 of the Decree-Law provides, among other things, that, for a period of 60 days after its entry into force (that is, between 17 March 2020 and 18 May 2020), no employment contract may be terminated on grounds of a failure by the employee to perform his or her obligations, or on objective grounds such as a drop in the demand for the employer’s goods or services.

From the standpoint of private international law, Article 46 gives rise to a set of interpretative problems whenever employment contracts featuring a cross-border element are concerned.

Article 46 of the Decree-Law applies in principle to all employment relationships governed by Italian law, regardless of whether Italian law is the law chosen by the parties or rather applies to the contract objectively.

In the Member States of the European Union, Article 46 may also come into play, by virtue of Article 8(1) of the Rome I Regulation, in contracts that the parties agreed to submit to a law other than Italian law.

In fact, if the contract would have been governed by Italian law pursuant to Article 8(2), (3) or (4) of the Regulation, the choice of a different law by the parties may not have the result of depriving the employee of the protection afforded to him or her by Article 46. This means, for example, that if an employee who habitually carries out his work in Italy is dismissed during the above stated period, he or she will be able to rely on Article 46, regardless of whether the employer is entitled, under the law chosen by the parties, to terminate the contract.

Given that Article 46 finds hardly any equivalent in other legal systems, Article 8(1) of the Rome I Regulation will almost invariably interfere with the chosen law whenever the issue arises, in a Member State, of an employment contract connected with Italy in the way described in Article 8(2), (3) or (4).

Article 46 of the Decree-Law, it is submitted, further qualifies as an overriding mandatory provision of the Italian legal order within the meaning of Article 9(1) of the Rome I Regulation.

The characterisation of Article 46 as an overriding mandatory provision stems from the fact that it satisfies the two requirements mandated under Article 9(1) of the Regulation: (i) it aims to protect a public interest, and (ii) it is meant to apply to any situation within its own scope, irrespective of the law otherwise applicable to the contract.

As to the first requirement, it is argued that, through the prohibition set out in Article 46, the Italian government aims to protect the stability of social and economic relationships of Italy. Indeed, as mentioned in a press release of 16 March 2020, by adopting a set of measures in support of employment, the government intended to prevent businesses from reacting to the pandemic and any related restriction by suddenly terminating a large number of employment contracts, as this might result, in turn, in social unrest. The fact that in the draft of the new Decree-Law Article 46 is extended for three further months, appears to confirm that the ban on dismissals is part of a broader strategy aimed at preventing conflicts which could possibly arise throughout the coronavirus crisis.

Turning to the second requirement, it is submitted that Article 46 implicitly provides its own scope of application, within which it intends to be applied irrespective of the law otherwise applicable under the relevant conflict-of-law rules.

Lacking any geographical limitation in Article 46 itself, regard should be given to other provisions of the Decree-Law which suggest that the various measures adopted therein are in principle meant to apply only territorially.

The preamble, for instance, makes it clear that the Decree-Law addresses the impact of Covid-19 on the “national social-economic reality”, meaning business, workers and households located in Italy. Furthermore, the scope of some provisions is explicitly limited to the territory of Italy. This holds true for provisions on social security, featured in Chapter I of Title II (“Measures in support of employment”). Article 46, though included in a different chapter of the same title, presents itself as part of the overall strategy adopted to support workers. Arguably, its scope should be geographically limited to situations connected with Italy in the same way as the other measures pursuing that goal.

The qualification of Article 46 as an overriding mandatory rule entails that, pursuant to Article 9(2) of the Rome I Regulation, Article 46 of the Decree-Law will be applied by Italian courts, no matter the law specified by the Regulation itself, to any cross-border employment relationship centred in Italy. In such a scenario, any dismissal justified by the employer’s financial difficulties or by the employee’s impossibility to perform his or her activity would be considered invalid and without effect.

What if the cross-border employment relationship brought before the Italian court is governed by a foreign law and is not connected with Italy? Should Article 46 be applied as an overriding mandatory provision of the forum?

It is argued that in such scenario an Italian court should not apply Article 46 of the Decree-Law, since relationships entirely disconnected from Italy do not fall among the cases to which this provision is meant to apply. Indeed, being Article 46 addressed to situations immediately and directly affected by the Covid-19 crisis and the measures adopted by the Italian government to face it, only cross-border relationships having a genuine connection with Italy – such as when the employee is asked to predominantly perform his or her activity in Italy, or when the employer’s establishment in charge of managing the relationship is situated in Italy – qualify to fall within its scope of application.

Another question of greater complexity is whether an Italian court ought to apply Article 46 of the Decree-Law when the employment relationship displays only a minimum connection with Italy, for instance because the employee was hired in Italy although in fact he or she never worked there.

To solve this issue, it is necessary to understand how intense the connection with the territory of Italy must be for Article 46 to be triggered. Considering the above analysis on the rationale of Article 46, it is argued that cases presenting a minimal connection with Italy fall outside the scope of application of Article 46.

Indeed, if the rationale of Article 46 is to protect the social and economic relations of Italy, there is no reason to apply such rule to employment relationships whose real seat – identified by the place of the employee’s predominant performance or the employer’s establishment – is not located in Italy, so that their termination does not jeopardise the Italian social order.

A different issue is whether, and subject to which conditions, Article 46 may be given effect in a Member State other than Italy pursuant to Article 9(3) of the Rome I Regulation, that is, as an overriding mandatory rule of a country than is neither the forum nor the country whose law applies to the contract.

Article 9(3) provides that “[e]ffect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful”.

Three requirements must be met by a rule of a third State in order to fall within Article 9(3): (i) it must be an overriding mandatory rule pursuant to Article 9(1); (ii) it must be a rule of the country where the contractual obligations have to be or have been performed and (iii) it must render the contractual performance unlawful.

Having already explained why Article 46 is an overriding mandatory rule pursuant to Article 9(1), this section will focus on whether Article 46 can satisfy the remaining requirements.

With respect to the second requirement, for Article 46 to qualify as a rule of the country of the contractual performance, there are two interrelated questions that must be answered: (i) is an act of dismissal an act of performance of a contractual obligation? (ii) If so, where does it take place?

Adhering to the restrictive interpretation given to Article 9 by the ECJ in Nikiforidis, the answer to the first question should be negative: an act of dismissal cannot be strictly defined as an act of performance of whatever obligation arising out of the employment contract. Rather, the dismissal is the act by which the employer exercises the right to unilaterally terminate the contract, precluding the employee from performing his or her obligations towards the employer. As a result of this, Article 46 of the Decree-Law should be denied the effect prescribed by Article 9(3) of the Rome I Regulation.

This conclusion, although aligned with the case-law of the ECJ, does not seem fully satisfactory.

If the main goal of giving effect to the overriding mandatory rules of a third State is to render a decision which is fair because it takes into account the rules of the legal order with which the situation is most closely connected, by interpreting narrowly the notion of “performance of contractual obligations”, such goal cannot be pursued in all those cases where the dispute does not concern the performance of an obligation, but rather the exercise of a right.

It is argued that, if contractual rights and obligations are the two sides of the same coin, it would be unreasonable to consider the place of performance of the contractual obligations as the only place relevant for the purposes of Article 9(3) of the Rome I Regulation, to the detriment of the place of exercise of a contractual right. According to the circumstances of the case, both these places may share a close connection with the relationship at stake so to justify the consideration of their overriding mandatory rules pursuant to Article 9(3) of the Rome I Regulation.

However, as things currently stand, in a dispute concerning the validity of the employer’s exercise of its right to terminate the contract, the court of a Member State, seized of the matter, may give effect, pursuant to Article 9(3) of the Rome I Regulation, to the overriding mandatory rules of the State where the employee performs his or her contractual obligations – which in a cross-border employment relationship is likely not to coincide with the State where the right of dismissal was exercised – with which the issue of the dismissal is not strictly connected.

To avoid such a short circuit, a flexible interpretation of the concept “performance of contractual obligations” should be adopted for the purposes of Article 9(3) of the Rome I Regulation.

An overture to this effect can be seen in the AG Szpunar’s Opinion in the Nikiforidis case. Leveraging on the genuine meaning of the mechanism of overriding mandatory rules of third States – i.e. preserving the connection with the legal order to which the relationship is more strictly connected – AG Szpunar favoured a broad interpretation of the notion “performance of contractual obligations”, as to encompass not only the obligation consisting in characteristic performance, but any obligation arising from the contract (§ 93), irrespective of whether directly defined by the parties in the contract or imposed by law (§ 94).

The step forward to AG Szpunar’s interpretation would be to endorse a contextualized interpretation of the entire notion of “performance of contractual obligations”, so that when the dispute concerns only the credit side of the relationship – which by definition does not encompass the performance of an obligation – the exercise of a right should be understood as equivalent to the performance of an obligation for the purposes of Article 9(3). Along the lines of what AG Szpunar argued, this should hold true both for the exercise of rights conferred by the contract and the exercise of rights conferred directly by the governing law.

As to the place where the creditor’s right is exercised, it is reasonable to localize it at the same place where the creditor is established. This means that in case of an act of dismissal, said place will coincide with the place of establishment of the employer.

Building on such interpretation, Article 46 appears to fulfil the second requirement provided for under Article 9(3) of the Rome I Regulation, being a rule of the country where the statutory right of termination has been or is to be exercised by the employer based in Italy.

The compliance of Article 46 with the unlawfulness requirement set out above is more straightforward. As Article 46 renders unlawful the dismissals of employees on the grounds of the Covid-19 financial difficulties encountered by their employers, also the third requirement set out above is satisfied.

The above is without prejudice to the fact that the decision of whether to give effect to Article 46 of the Decree-Law will be taken by the court seized on the basis of its own discretionary assessment of the nature, purpose and consequences deriving from the application or non-application of such provision.

When performing such assessment, which is political in nature, the court will evaluate whether the rationale underpinning Article 46 can be welcomed as convergent with the values of the forum. In essence, the court will assess whether, on the basis of the policies of its own legal order – including solidarity with other EU Member States – the rule of conduct prescribed by Article 46 of the Italian Decree-Law can be considered justified by the protection of interests that the forum wants to safeguard with the same or a similar degree of intensity adopted by the Italian legislator in Article 46 of the Decree-Law.

This ultimately shows that the application of overriding mandatory rules of third States falling within the category of Article 9(3) of the Rome I Regulation, to put it with AG Szpunar, “creates for the [seized] court the possibility of giving a decision which is fair and at the same time has regard to the need to balance the competing interests of the States involved” (§ 74).

Seen from this perspective, the consideration of the overriding mandatory rules of a third State is an opportunity for the judge to give a decision which is considered fair because aligned with its own values not only by the State enacting the overriding mandatory provision but also by the forum itself. Hence, the broad interpretation of Article 9(3) of the Rome I Regulation above proposed should be welcomed as increasing the cases where such possibility can be granted.

Written by Tobias Lutzi, University of Cologne

One of the biggest winners of the current pandemic (other than toilet paper producers, conspiracy theorists, and the climate) seems to be the former Silicon Valley startup Zoom, whose videoconferencing solutions have seen its number of daily users increase about thirtyfold since the end of 2019. While the company’s success in a market otherwise dominated by some of the world’s wealthiest corporations has taken many people – including investors – by surprise, it can be attributed to a number of factors – arguably including its software’s highly popular virtual-background feature.

With more and more people using the cockpit of the Millennium Falcon, the couch from The Simpsons, and other iconic stills from movies or TV series as virtual backgrounds in their private and professional Zoom meetings and webinars, the question arises as to whether this may not constitute an infringement of copyright.

Unsurprisingly, this depends on the applicable law. Whereas using a single frame from a movie as a virtual background may often qualify as ‘fair use’ under US copyright law even in a professional setting (and thus require no permission from the copyright holder), no such limitation to copyright will be available in many European legal systems, with any ‘communication to the public’ in the sense of Art 3 of the Information Society Directive 2001/29/EC potentially constituting a copyright infringement under the domestic copyright laws of an EU Member State.

As far as copyright infringements are concerned, the rules of private international law differ significantly less than the rules of substantive law. Under the influence of the Berne Convention, the so-called lex loci protectionis principle has long become the leading approach in most legal systems, allowing copyright holders to seek protection under any domestic law under which they can establish a copyright infringement. For infringements committed through the internet, national courts have given the principle a notoriously wide application, under which the mere accessibility of content from a given country constitutes a sufficient basis for a copyright holder to seek protection under its domestic law. Accordingly, using an image on Zoom without the copyright holder’s permission in a webinar that is streamed to users in numerous countries exposes the user to just as many copyright laws – regardless of whether the image is used by the host or by someone else sharing their video with the other participants.

Interestingly, the fact that the image is only displayed to other users of the same software is unlikely to mitigate this risk. While Zoom’s (confusingly numbered) terms & conditions unsurprisingly prohibit infringements of intellectual property (clause 2.d.(vi)) and – equally unsurprisingly – subject the company’s legal relationship with its users to the laws of California (clause 22/20.1), courts have so far been slow to attach significance to such platform choices of law as with regard to the relationship between individual users. In fact, the EU Court of Justice held in Case C-191/15 Verein für Konsumenteninformation v Amazon (paras. 46–47) that even with regard to a platform hosts own liability in tort,

the fact that [the platform host] provides in its general terms and conditions that the law of the country in which it is established is to apply to the contracts it concludes cannot legitimately constitute […] a manifestly closer connection [in the sense of Art. 4(3) Rome II].

If it were otherwise, a professional […] would de facto be able, by means of such a term, to choose the law to which a non-contractual obligation is subject, and could thereby evade the conditions set out in that respect in Article 14(1)(a) of the Rome II Regulation.

While the escape clause of Art. 4(3) Rome is not directly applicable to copyright infringements anyway, the decision illustrates how courts will be hesitant to give effect to a platform host’s choice of law as far as the relationship between users – let alone between users and third parties – is concerned. This arguably also applies to other avenues such as Art. 17 Rome II and the concept of ‘local data’.

The liability risks described above are, of course, likely to remain purely theoretic. But they are also easily avoidable by not using images without permission from the copyright holder in any Zoom meeting or webinar that cannot safely be described as private under the copyright laws of all countries from where the meeting can be joined.

The issue 38/1 2020 of the Netherlands Journal of Private International Law (NIPR – Nederlands Internationaal Privaatrecht) has just been published. This issue of the NIPR is available here. It includes an Editorial and the following three articles (with abstracts) devoted to the new Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, concluded on 2 July 2019 (not yet in force see here):

1. Towards a global Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, by Hans van Loon

“This article describes the background and context of the ‘Hague Judgments Project’. Apart from earlier attempts, three stages may be distinguished in the history of this project: a first stage, dominated by the dynamics of the early European integration process, with the result that the 1965 and 1971 Hague Conventions on choice of court and recognition and enforcement of judgments, although providing inspiration for the 1968 Brussels Convention, remained unsuccessful; a second stage, very much determined by the transatlantic dimension, with differing strategic objectives of the EU and the USA notably regarding judicial jurisdiction, resulting in the lack of success of the ‘mixed’ convention proposal; and a third stage, where negotiations took on a more global character, resulting in the 2015 Choice of Court Convention and the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

“The article discusses the interaction between the global Hague and the regional EU negotiations on jurisdiction and enforcement of judgments, the impact of domestic judicial jurisdiction rules (the claim/forum relationship versus the defendant/forum link) on the Hague negotiations and other (in some cases: recurrent) core issues characterizing each of the aforementioned three stages, and their influence on the type (single, double, ‘mixed’) and form of convention that resulted from the negotiations.”

2. Comment on the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. Is the Hague Convention of 2 July 2019 a useful tool for companies who are conducting international activities? By Catherine Kessedjian

“The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, adopted on 2 July 2019, gives some certainty to worldwide trade relations outside regional systems such as the EU, when disputes are submitted to national courts instead of arbitration or mediation. The Convention avoids the difficult issue of ‘direct’ jurisdictional bases and limits itself to ‘indirect’ jurisdictional bases. This choice of policy was one of the keys to its adoption. Another one was the exclusion of many problematic areas of the law where differences in legal systems are too deep to allow consensus. A third one was to allow States becoming Parties to the Convention to make a number of declarations including some to protect their own acts, which may have been considered as acta jure gestionis under international law. Consequently, the Convention has a fairly narrow scope of application. This may induce more States to become a Party, without which the Convention would not have any more success than the old Hague Convention of 1971 which is still on the books, particularly because it still includes a bilateralisation system, albeit an easier one than that included in the 1971 Convention.”

3. The 2019 Hague Judgments Convention through European lenses, by Michael Wilderspin and Lenka Vysoka

“The European Union is an important actor in the field of international judicial cooperation and in the Hague Conference on Private International Law. It is itself a member of the Conference, and at the same time represents 27 States that are also members. Because of the EU’s own internal rules, where the matters being negotiated at international level are already the subject of EU rules, the EU speaks on behalf of its Member States. Furthermore, if the EU accedes to an international convention in such circumstances, the all or nothing principle applies. Either the EU accedes as a bloc or not at all.

“The 2019 Judgments Convention has the potential to facilitate the worldwide recognition and enforcement of judgments in civil and commercial matters. The approach taken by the negotiators has, particularly in the light of the failure of earlier, more ambitious projects, been to aim for a more modest convention, with the objective of encouraging as many States as possible to become Contracting Parties to the Convention.”

Moreover, the issue contains an article written in Dutch on preliminary questions submitted to the CJEU by the Supreme Court of the Netherlands in SHAPE/Supreme: on garnishment and immunity (HR 21 December 2018, ECLI:NL:HR:2018:2361 and HR 22 February 2019, ECLI:NL:HR:2019:292, NIPR 2019, 64), by A. F. Veldhuis

“The Supreme Group initiated proceedings in the Netherlands against two NATO bodies (SHAPE and JFCB) with regard to the alleged non-fulfilment of payment obligations under a contract relating to the supply of fuel to SHAPE for NATO’s mission in Afghanistan. On the basis of a Dutch order for garnishment, Supreme levied a garnishment on an escrow account in Belgium. SHAPE then initiated proceedings for interim relief before the Dutch courts, invoked immunity from enforcement and sought (i) to lift the garnishment and (ii) to prohibit Supreme from attaching the escrow account in the future. Both the court at first instance and the appellate court ruled that the seizure could be lifted. However, the Supreme Court questioned whether the Dutch courts had jurisdiction to adjudicate this dispute. Article 24(5) Brussels I-bis provides that the courts of the Member State in which the judgment has been or is to be enforced have exclusive jurisdiction regarding procedures concerning the enforcement of that judgment. As the garnishment was levied on the basis of an order for garnishment by a Dutch court on an account in Belgium, the question here is whether Article 24(5) Brussel I-bis also covers SHAPE’s application to the Dutch court to have the attachment lifted. Since there may be reasonable doubt as to the interpretation of Article 24(5) Brussels I-bis, the Supreme Court decided to refer the matter to the Court of Justice for a preliminary ruling. Before going into this question, the Supreme Court must first examine whether the claims fall within the material scope of Brussels Ibis. The fact that SHAPE has based its requests on immunity from enforcement raises the question of whether, and if so to what extent, this case is a civil or commercial matter within the meaning of Article 1(1) Brussels Ibis. In this respect, too, the Supreme Court saw sufficient grounds for submitting preliminary questions. This case has raised thought-provoking questions which navigate along the thin line between private international law and public international law.”

Written by Giesela Rühl, University of Jena/Humboldt-University of Berlin

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. Corporate social responsibility has been the subject of lively debates in private international law for many years. These debates revolve around the question of whether companies domiciled in countries of the Global North can be held liable for human rights violations committed by foreign subsidiaries or suppliers in countries of the Global South (so-called supply chain liability).

2. According to the majority view in the public international law literature, companies are not, at least not directly bound by human rights. Although numerous international law instruments, including the UN’s 2011 Guidelines for Business and Human Rights (Ruggie Principles), also address companies, liability for human rights violations is, therefore, a matter of domestic law.

3. The domestic law applicable to liability for human rights violations must be determined in accordance with the provisions of (European) private international law. Direct recourse to the lex fori, in contrast, is not possible. The legal situation in Europe is, therefore, different from the United States where actions which are brought on the basis of the Alien Tort Claims Act (ATCA) are governed by US-American federal (common) law.

4. Claims for human rights violations committed abroad will usually be claims in tort. Under (European) private international law it is, therefore, the law of the place where the damage occurs (Article 4(1) Rome II Regulation) and, hence, foreign law which governs these claims. Exceptions apply only within narrow limits, in particular if domestic laws can be classified as overriding mandatory provisions (Article 16 Rome II Regulation) or if application of foreign law violates the ordre public (Article 26 Rome II Regulation).

5. In addition to tort law, claims for human rights violations may also be based on company law, namely when directors are directly held liable for torts committed by a foreign subsidiary. According to the relevant private international law provisions of the Member States these claims are governed by the law of the (administrative or statutory) seat of the foreign subsidiary. As a consequence, claims in company law are also subject to foreign law.

6. The fact that (European) private international law submits liability for human rights violations to foreign law is very often criticized in the private international law literature. Claiming that foreign law does not sufficiently protect the victims of human rights violations, a number of scholars, therefore, attempt to subject liability claims de lege lata to the domestic law of the (European) parent or buyer company.

7. These attempts, however, raise a number of concerns: first, under traditional (European) private international law, substantive law considerations do not inform the determination of the applicable law. Second, the wish to apply the domestic law of a European country is mostly driven by the wish to avoid poorly functioning court systems and lower regulatory standards in countries of the Global South. Neither of these aspects, however, has anything to do with the applicable tort or company law. Regulatory standards, for example, are part of public law and, therefore, excluded from the reach of private international law. Finally, the assumption that the domestic law of the (European) parent or buyer company provides more or better protection to the victims of human rights violations does not hold true de lege lata. Since parent and buyer companies are legally independent from their foreign subsidiaries and suppliers, parent and buyer companies are only in exceptional cases liable to the victims of human rights violations committed abroad by their foreign subsidiaries or suppliers (legal entity principle or principle of entity liability).

8. The difficulties to hold (European) parent and buyer companies de lege lata liable for human rights violations committed by their foreign subsidiaries or suppliers raises the question of whether domestic laws should be reformed and their application ensured via the rules of private international law? Should domestic legislatures, for example, introduce an internationally mandatory human rights due diligence obligation and hold companies liable for violations? Proposals to this end are currently discussed in Germany and in Switzerland. In France, in contrast, they are already a reality. Here, the Law on the monitoring obligations of parent and buyer companies (Loi de vigilance) of 2017 imposes human rights due diligence obligations on bigger French companies and allows victims to sue for damages under the French Civil Code. The situation is similar in England. According to a Supreme Court decision of 2019 English parent companies may, under certain conditions, be held accountable for human rights violations committed by their foreign subsidiaries.

9. The introduction of an internationally mandatory human rights due diligence obligation at the level of national law certainly holds a number of advantages. In particular, it may encourage companies to take measures to prevent human rights violations through their foreign subsidiaries and suppliers. However, it is all but clear whether, under the conditions of globalization, any such obligation will actually contribute to improving the human rights situation in the countries of the Global South. This is because it will induce at least some companies to take strategic measures to avoid the costs associated with compliance. In addition, it will give a competitive advantage to companies which are domiciled in countries that do not impose comparable obligations on their companies.

10. Any human rights due diligence obligations should, therefore, not (only) be established at the national level, but also at the European or – even better – at the international level. In addition, accompanying measures should ensure that the same rules of play apply to all companies operating in the same market. And, finally, it should be clearly communicated that all these measures will increase prices for many products sold in Europe. In an open debate it will then have to be determined how much the Global North is willing to invest in better protection of human rights in the Global South.

Full (German) version: Giesela Rühl, Unternehmensverantwortung und (Internationales) Privatrecht, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 89 et seq.

Posted at the request of Sahil Verma, Managing Editor, Trade, Law and Development

General Issue

Issue 12.2 | Winter’20

The Board of Editors of Trade, Law and Development are pleased to invite original, unpublished manuscripts for publication in the Winter ’20 Issue of the Journal (Vol. 12, No. 2) in the form of ‘Articles’, ‘Notes’, ‘Comments’ and ‘Book Reviews’.

Manuscripts received by August 15th, 2020, pertaining to any area within the purview of international economic law will be reviewed for publication in the Winter ’20 issue.

Founded in 2009, the philosophy of Trade, Law and Development has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. Towards these ends, we have published works by noted scholars such as WTO DDG Yonov F. Agah, Dr. Prof. Ernst Ulrich Petersmann, Prof. Steve Charnovitz, Prof. Petros Mavroidis, Prof. Mitsuo Matsuhita, Prof. Raj Bhala, Prof. Joel Trachtman, Gabrielle Marceau, Simon Lester, Prof. Bryan Mercurio, and Prof. M. Sornarajah among others. TL&D also has the distinction of being ranked the best journal in India across all fields of law for seven consecutive years by Washington and Lee University, School of Law.

Manuscripts may be submitted via e-mail or ExpressO. For further information about the Journal, please click here. For submission guidelines, please click here.

In case of any queries, please feel free to contact us at: editors@tradelawdevelopment.com

LAST DATE FOR SUBMISSIONS: 15 August, 2020

A quick note on (thank you, Michael Douglas, for flagging) [2020] NSWCA 82 Inghams v Hannigan, in which the New South Wales Court of Appeal had to untangle a messy alternative dispute resolution (ADR) clause in a contract. I have actually included ‘messy’ as a tag for this post.

The Headnote to the judgment summarises the contractual clauses that needed proper construction. The case is a good illustration of how ADR clauses can lead parties straight into a right pickle, when different obligations to make recourse to mediation and /or (in this case: either /and /or) arbitration and indeed ultimately litigation in the courts at ordinary apply to separate parts of the contract. It forces parties to consider what part of the contract they actually have issue with and for the courts to try and untangle what ADR obligations follow.

A definite case of less can be more and of fancy ADR clauses not always giving wings to contractual interpretation. (The case concerns supplies of chickens. Bad pun. It’s a Saturday morning. I shall keep schtum for the rest of the day).

Geert.

Written by Nico Krisch, Graduate Institute for International and Development Studies, Geneva

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The conceptual framework of jurisdictional boundaries in international law continues to be dominated by the principle of territoriality and its exceptions, even if calls for a reorientation have grown in recent years.

2. The principle of territoriality leads today to far wider jurisdictional claims than in the past, and its limits are being redefined through ‘territorial extensions’ in a number of areas.

3. These extensions are rarely questioned by states, and clear and consistent jurisdictional boundaries remain hard to define. Contestation arises primarily when states seek to use extraterritorial measures to counteract important policy choices of other states.

4. The result is a far-reaching overlap of different jurisdictional spheres which, if seen in conjunction with the multiple forms of transnational regulation existing today, leads to a multi-layered ‘jurisdictional assemblage’.

5. So far, there are no accepted rules governing the relationship of competing jurisdictional spheres in this assemblage. The effective exercise of jurisdiction depends, in large part, on the political and economic power of a country in a given issue area and market.

6. The wider options for action that result from this territorial extension allow for more effective responses to existing societal challenges, especially with a view to the provision of (national and global) public goods, albeit in a limited way.

7. The new jurisdictional regime accentuates hierarchies between countries, interferes with the autonomy of weaker states, and subverts the principle of sovereign equality. Yet under certain circumstances, it also allows actors in weaker states to compensate for their otherwise limited ability to hold multinational companies to account.

8. Existing procedural and substantive proposals only have limited promise for alleviating the tensions resulting from the power imbalance in the exercise of jurisdiction.

9. The territorial principle in the law of jurisdiction has always been sufficiently limited not to overly impede powerful states’ pursuit of their interests.

10. Territoriality today appears less as a principle of effective limitations than as the basis of different strategies and tactics through which states seek to hold mobile actors to account and through which they pursue their political aims in a global context.

Full (German) version: Nico Krisch, Entgrenzte Jurisdiktion: Die extraterritoriale Durchsetzung von Unternehmensverantwortung, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 11 et seq.

Written by Anatol Dutta, University of Munich

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of the contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The question of the reach of courts’ jurisdiction is highly significant for claims against transnational enterprises based on human rights violations or environmental damages abroad. It does not only determine the applicable law but also the access to a particular justice system.

2. Universal jurisdiction of national courts for human rights and environmental damages claims against enterprises cannot be established, neither on the basis of existing law nor from a legal policy perspective. Rather, such claims have to be handled under the traditional jurisdictional mechanisms.

3. From a global perspective, a remarkable shift regarding jurisdiction can be noted: Whereas the courts in the United States are increasingly limiting access to their justice system in cases with foreign elements, jurisdictional limits are no significant hurdle for human rights and environmental damages claims in the European Union.

4. Domestic enterprises can be sued at their seat. Yet, the forum non conveniens doctrine allows US courts – and perhaps soon English courts as well – to decline jurisdiction, also for human rights and environmental damages claims.

5. Yet, human rights and environmental damages claims against foreign enterprises can also only be brought under certain circumstances in the EU.

6. Claims against foreign enterprises for human rights violations and environmental damages abroad can only rarely be brought before domestic courts based on special jurisdiction related to specific subject matters, for example the jurisdiction for tort claims at the place where the harmful event occurred.

7. If human rights and environmental damages claims are simultaneously directed against a domestic enterprise, for example a mother company or a buyer company in the EU, at least partially, foreign subsidiaries and suppliers can be sued on the basis of special jurisdiction over multiple defendants which can be used strategically.

a) If foreign enterprises have their seat in a third State outside the European Union, the jurisdiction of the domestic courts over the foreign co-defendant is governed by the national law of the forum Member State.

b) However, the current trend to establish a separate liability of domestic enterprises, for example, by extending human rights and environment-related duties of care for the supply chain, could endanger this special jurisdiction over multiple defendants, which, on the other hand, could lose significance.

8. Extending the general jurisdiction at the domicile of the defendant by relying on a personal criterion different to the seat of the defendant enterprise is not a viable solution.

a) Today US courts refuse to exercise jurisdiction based solely on the foreign enterprise ‘doing business’ within the territory. In some EU Member States, for claims against foreign enterprises at least with a seat in a third State, exorbitant jurisdiction can be established, for example, based on assets of the foreign defendant enterprise within the territory.

b) At the most from a policy perspective, for claims against foreign subsidiaries of a domestic enterprise the introduction of an enterprise jurisdiction could be considered.

9. For claims against foreign enterprises jurisdiction of the domestic courts can often only be based on a forum necessitatis if proceedings cannot reasonably and effectively be brought or conducted abroad; the hurdles for such an exceptional jurisdiction are, however, high.

10. To hear human rights and environmental damages claims against enterprises lies within the powers of the domestic courts.

a) Foreign enterprises do not enjoy State immunity even if they violate human rights or damage the environment abroad in collaboration with foreign States.

b) The power to adjudicate is also not limited by the fact that a decision of the court on human rights and environmental damages claims potentially has implications on the foreign policy relations of the forum State.

c) The domestic courts are often even not barred from deciding on human rights and environmental damages claims of foreign States against enterprises.

Full (German) version: Anatol Dutta, Internationale Zuständigkeit für privatrechtliche Klagen gegen transnational tätige Unternehmen wegen der Verletzung von Menschenrechten und von Normen zum Schutz der natürlichen Lebensgrunlagen im Ausland, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 39 et seq.

Felix M. Wilke has published a well-researched, innovative and thought-provoking book titled A Conceptual Analysis of Private International Law (Intersentia, 2019). In it, he makes a strong plea for the establishment of a general notions, methodologies and principles for conflict of laws on the European level.

This book is much more than the repeated calls, mainly from Germany, for the development of “general principles” of EU PIL or a “Rome 0 Regulation“. It provides a sort of “anatomy” European Private International Law, laying bare its underlying structures.

Particularly intriguing is that Wilke is not merely looking at EU regulations. Instead, he adopts a comparative perspective, taking into account the domestic law of all EU Member States. Yes, you read that right, Malta – all Member States.

The result is a very useful overview of private international laws across the EU. Do not expect, however, detailed country reports. Wilke focuses on the functioning of the PIL system, in the sense required by functional comparative law. This functioning largely depends on concepts, such as renvoi, preliminary questions or overriding mandatory rules.

Wilke examines the operation of these concepts throughout Europe, crosscutting specialised EU regulations as well as national conflicts laws. In doing so, he distills the gist of EU Private International Law and brings much needed clarity to often squiggly debates.

Praise for the new book is also provided by Ralf Michaels‘ foreword. Here is an excerpt:

This is a thoroughly researched work that is both comparative-empirical and prescriptive in nature, a study that both surveys existing law and makes proposals on the basis of its findings. The comparison is more doctrinal than functional in nature, which seems adequate for its topic of a conceptual analysis: Wilke is interested in establishing techniques, not resolving concrete cases, so a functional approach would not have been of much use to him. He analyses not just the existing EU instruments for what they reveal regarding general issues; in addition, his study relies on a comparison of the existing domestic private international law systems, both codified and uncodified, in all EU member states. Wilke thus departs from his earlier view that only a few domestic models exist – he finds, in fact, that general issues are more thoroughly discussed and regulated in domestic legislation than in European law, and therefore finds the existing material most helpful for European concepts. He even includes the United Kingdom – despite Brexit, and despite the differences one should expect between a common law approach in England and the civil law approaches of most other member states.

The result is an impressive survey of approaches concerning these questions; and Wilke’s results are surprising and interesting. …

You heard it from the Max Planck Institute’s mouth: Highly recommended!

Personal injury cases never make for light reading and Fletcher v Estee Lauder and Clinique is not an exception to that rule. Mrs Fletcher, aged 45, claims that her lifelong  use of the Estee Lauder talc and face powder and Clinique loose face powder, starting with puffs of powder purchased by her mother in New York in 1976, followed by regular purchases in the city in later years, caused her to develop mesothelioma.

Thank you Leigh Day, who represent Mrs Fletcher, for reporting on the case. In a preliminary ruling, Justice Mendez rejected a forum non conveniens argument made by the cosmetics giants, who had argued that England is a more natural and suitable forum for the case.

The case is interesting for my readers who follow my reports in the ‘comparative’ binder, for it is not that routine for judges to list arguments against the suitability of England as a forum.

Arguments made pro forum non are on p.2, claimant’s arguments on p.3, and Mendez J’s criteria to dismiss (having earlier established per authority that the burden of proof to dismiss is necessarily high for defendants with a substantial presence in New York) on p.5. Note his reference to the absence of no win no fee (and claimant’s limited resources); absence of jury trial; limited and expensive discovery; and a general hesitation of the legal profession in bringing cases like these (non-occupational exposure claims) against manufacturers.

Most relevant and interesting.

Geert.

In April 2019 the German Society of International Law (Deutsche Gesellschaft für Internationales Recht) held its 36th biannual conference at the University of Vienna. Organised by August Reinisch (University of Vienna) in cooperation with Eva Maria Kieninger (University of Würzburg) and Anne Peters (Max Planck Institute Heidelberg), the conference  discussed the concept of „Corporate social responsibility“ from both a public and a private international law perspective. Presentations were given by Tanja Domej (University of Zurich), Oliver Dörr (University of Osnabrück), Anatol Dutta (University of Munich), Peter Hilpold (University of Innsbruck), Stefan Huber (University of Tübingen), Nico Krisch (Graduate Institut of Geneva), Giesela Rühl (University of Jena/Humboldt-University of Berlin) and Silja Vöneky (University of Freiburg).

Over the course of the next days conflictoflaws.net will present the main findings of the contributions in a series of blogposts. The full (German) contributions can be found in the conference proceedings that have just been published by C.F. Müller.