Droit international général

Today, the ECJ decided in case C-641/18 –  LG and Others v. Rina SpA, Ente Registro Italiano Navale, on the concepts of ‘civil and commercial matters’ and ‘administrative matters’ under Article 1 Brussels I Regulation.

The case arose from the following facts:

14      LG and Others — relatives of the victims and survivors of the sinking of the Al Salam Boccaccio’98 vessel in the Red Sea on 2 and 3 February 2006, in which more than 1 000 people lost their lives — brought an action before the Tribunale di Genova (District Court, Genoa, Italy) against the Rina companies — ship classification and certification societies — whose seat is in Genoa.

15      LG and Others claim compensation for the pecuniary and non-pecuniary losses stemming from the Rina companies’ civil liability, arguing that the classification and certification operations for the Al Salam Boccaccio’98 vessel, carried out by the Rina companies under a contract concluded with the Republic of Panama, for the purposes of obtaining that State’s flag for that vessel, were the cause of that sinking.

16      The Rina companies contend that the referring court lacks jurisdiction, relying on the international-law principle of immunity from jurisdiction of foreign States. In particular, according to those companies, the classification and certification operations which they conducted were carried out upon delegation from the Republic of Panama and, therefore, are a manifestation of the sovereign powers of the delegating State.

17      According to LG and Others, by contrast, given that the Rina companies have their seat in Italy and the dispute at issue in the main proceedings is civil in nature, within the meaning of Article 1 of Regulation No 44/2001, the Italian courts have jurisdiction under Article 2(1) of that regulation. In addition, LG and Others submit that the plea of immunity from jurisdiction, relied on by the Rina companies, does not cover activities that are governed by non-discretionary technical rules which are, in any event, unrelated to the political decisions and prerogatives of a State.

18      The referring court raises the question of the jurisdiction of the Italian courts in so far as, while it is common ground that the Rina companies have their seat in Italy, it is claimed that they acted upon delegation from the Republic of Panama.

19      In that regard, the referring court refers, in its request for a preliminary ruling, to the case-law of the Corte costituzionale (Constitutional Court, Italy) and of the Corte Suprema di Cassazione (Supreme Court of Cassation, Italy) concerning immunity from jurisdiction. In accordance with the case-law of those supreme courts, recognition of immunity from jurisdiction is precluded only in respect of the acts of foreign States consisting in war crimes and crimes against humanity or where such recognition undermines the principle of judicial protection.

The Court held that

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that an action for damages, brought against private-law corporations engaged in the classification and certification of ships on behalf of and upon delegation from a third State, falls within the concept of ‘civil and commercial matters’, within the meaning of that provision, and, therefore, within the scope of that regulation, provided that that classification and certification activity is not exercised under public powers, within the meaning of EU law, which it is for the referring court to determine. The principle of customary international law concerning immunity from jurisdiction does not preclude the national court seised from exercising the jurisdiction provided for by that regulation in a dispute relating to such an action, where that court finds that such corporations have not had recourse to public powers within the meaning of international law.

The full text of the judgment is here.

The CoL post on the Opinion of Advocate General Szpunar in this case is here.

The Organization of American States (OAS) has announced that it is launching a weekly virtual forum entitled “Inter-American law in times of pandemic”.  It begins on Monday 11 May at 11:00 am (EDT, local time in Washington, D.C.).  The first session “Challenges to Inter-American Law” will be held in Spanish, with no simultaneous interpretation. Registration is free but space is limited. The agenda is available here.

As announced, “the topics to be discussed in relation to the impact of the pandemic in the Americas will include: the challenges to Inter-American law; the importance of access to public information; protection of privacy and personal data; the fight against corruption; legal cooperation against cyber-crime; food security as a specific challenge; the difficulties for private international law; among others.”

The list of virtual fora is available here. On Monday 29 June 2020, a forum will be held on “New Challenges for Private International Law.” Apparently, the sessions will be recorded and will be available on video later on the OAS website.

In addition, the Hague Conference on Private International Law (HCCH) has published a COVID-19 Toolkit, which is available in both English and French.

My colleague Hélène Peroz has reported on this interesting judgment delivered on 4 March 4 2020 by the French Supreme Court for private and criminal matters (Cour de cassation).

The Court applied an old principle of the French law of international jurisdiction. Unfortunately, it does not seem that the applicability of EU Regulations of private international law was raised.

Background

A German company sought to enforce an arbitral award against a man domiciled in Algeria. The man jointly owned an immoveable property near Paris, France. The co-owner was his wife, who was also domiciled in Algeria. The German creditor initiated proceedings before the family division of the high court of Paris and applied for a judicial order to divide the property. The goal was to ultimately receive half of the proceeds.

Jurisdiction of French Courts in Family Matters

The Algerian spouses challenged the jurisdiction of the Paris court. They argued that, outside of the scope of international conventions and EU instruments, jurisdiction in family matters lied with the court of the residence of the family pursuant to Article 1070 of the French code of civil procedure.

In a judgment of 18 December 2018, the Paris Court of Appeal accepted the argument and declined jurisdiction on the ground that the family resided in Algeria.

Extending the Application of Domestic Rules of Jurisdiction to International Cases

The French lawmaker has adopted very few rules of international jurisdiction. French courts have thus long held that, in principle, rules of domestic jurisdiction may also be used to define the international jurisdiction of French courts. Article 1070 of the Code of Civil Procedure defines the domestic jurisdiction of French courts in family matters. So the Paris  Court of Appeal had simply applied Article 1070 to assess its international jurisdiction.

The French Supreme Court has long identified two exceptions to the principle of extension of domestic rules of jurisdiction: enforcement and actions related to real property. In both cases, the rule of international jurisdiction has typically been straightforward: French courts have jurisdiction over actions related to enforcement carried out in France and actions related to immovables situated in France. In this judgment, the Court ruled more widely that, while the principle was to extend the application of domestic rules of jurisdiction, it might be necessary to “adapt them to the particular needs of international relations”.

The Court then ruled that it would not be appropriate to apply Article 1070 (and thus grant jurisdiction to the court of the residence of the family) to define the jurisdiction of French court in this case, “both for practical reasons of proximity and pursuant to the effectivity principle”.

The reference to effectivity seems to mean that the court cared about the future enforcement of the decision which, quite clearly, was meant to take place in France, where the apartment is located. Indeed, and although the action was based on a rule of property law, the chances that the property would be attached and sold judicially for the purpose of actually implementing the rule was high.

What about EU Regulations?

It is clear that the French Supreme Court ruled on the understanding that no EU Regulation applied. Was that really the case?

Regulation 2016/1103 on Property Regimes does not apply to proceedings initiated before 29 January 2019. It is unclear, however, whether it would apply should the same case arise today.

The territorial scope of the jurisdictional rules of the Property Regimes Regulation is not limited to actions initiated against defendants domiciled within participating Member States, so the issue would not be so much that the defendants were domiciled in a third state.

Rather, the issue is whether the action was one related to matrimonial property regimes. The property was co-owned by two spouses, but their matrimonial property regime was separation of property. This means that their marriage was not relevant to the action (which was based on a general provision of property law). In fact, Regulation 2016/1103 defines ‘matrimonial property regimes’ as sets of rules ‘concerning the property relationships between the spouses and in their relations with third parties, as a result of marriage or its dissolution’ (Article 3(1)(a), emphasis added). 

So one wonders whether the action would not rather have fallen within the material scope of the Brussels I bis Regulation. Indeed, the CJEU once defined the exception to the scope of the Brussels Convention as covering “any proprietary relationships resulting directly from the matrimonial relationship or the dissolution thereof” (De Cavel, 1979). In the present case, the proprietary relationship between the spouses did not result from their marriage.

And if the case fell within the material scope of the Brussels I bis Regulation, then Article 24 of that Regulation (which applies irrespective of the domicile of the parties) would apply. It is not absolutly clear whether the relevant provision would be Article 24(1) (in rem rights over immoveables) or Article 24(5) (enforcement), but in both cases, it would have granted exclusive jurisdiction to French courts. 

In Mastermelt v Siegfried Evionnaz [2020] EWHC 927 (QB), at issue is negative declaratory relief on contractual performance. 

Claimant Mastermelt is an English company specialising in the reclamation of precious metals. The defendant, Siegfried Evionnaz SA (“Siegfried”), is a Swiss company. There is a dispute between the parties over the quality of Mastermelt’s performance. Siegfried’s standard terms and conditions of contract (“STC”) include a clause stating that the governing law is Swiss law and that the Swiss courts have exclusive jurisdiction.

Relevant pending proceedings, are: very shortly after Siegfried had informed Mastermelt that it was going to issue proceedings against Mastermelt in Switzerland, Mastermelt issued the present claim in England on 5 February 2019. It seeks negative declaratory relief against Siegfried. Proceedings were subsequently issued by Siegfried against Mastermelt in the Zurich Commercial Court on 23 July 2019. Meanwhile, on 24 May 2019, Siegfried applied to the High Court in London for a declaration that it had no jurisdiction to try Mastermelt’s claim and so the Claim Form and service should be set aside, alternatively stayed. Further, on 29 January 2020 Mastermelt applied to the Swiss court (1) for a stay of those proceedings pending the UK decision, or (2) for the Swiss proceedings to be limited at that stage to a consideration of the court’s own jurisdiction there and nothing else, or (3) an extension of time for service of a response to Siegfried’s claim. By an order of 4 February 2020, the Swiss court rejected all three applications. On 7 February Mastermelt filed an appeal to the Federal Supreme Court of Switzerland which initially suspended enforcement of the Zurich Commercial Court’s decision pending the appeal. However, on 13 February Siegfried objected to any such suspension. The Supreme Court directed Mastermelt to file any response to that objection by 9 March. As far as the English courts know, that has been done but at the moment the Supreme Court has not given its decision on the suspension issue, let alone any substantive appeal, nor has there been any decision yet on the jurisdiction or otherwise of the Swiss court to hear the claim.

Siegfried argues, and has convinced the Swiss courts, that A27 Lugano needs to be applied ‘in harmony’ with A31(2) Brussels Ia: this now provides that regardless of which court was seised first, the court which was the subject of the putative exclusive jurisdiction clause, must decide the question of its jurisdiction first and the other proceedings must be stayed in the meantime. At 13 Waksman J refers to the Swiss court’s reasoning, where it takes an expansionist view of the Lugano Convention‘s protocol no2, that the Lugano States shall take ‘due account’ of each other’s courts decisions. The Swiss court suggests that in principle it should follow CJEU authority in Gasser (which introduced the torpedo mechanism by giving strict interpretation to the lis alibi pendens rule, even in case of choice of court) but that it has reasonable justification to deviate from Gasser given that the judgment has become ‘obsolete’ following A31(2) BIa.

Waksman J is first invited to accept the Swiss court’s reasoning as res iudicata, per CJEU C-456/11 Gothaer. (I did say at the time the CJEU may find its ruling in Gothaer would come back to haunt it). This he finds is a stretch of that authority but also not applicable given the limited findings of the Swiss court at any rate: ‘here the actual and only decision of the Swiss court thus far is simply to refuse to stay its own proceedings’.

He then discusses how A27 Lugano needs to be applied. A first reference is to the Court of Appeal’s most problematic view in Privatbank, to my mind, of applying Article 28 Lugano reflexively to third States. At 23-24 Waksman J distinguishes Privatbank (clearly he cannot hold it no relevant authority should he think so); then holds correctly that Gasser is not entirely obsolete following BIa; and finally at 30 that the harmonised regime per Lugano’s Protocol does not mean that one should now interpret Article 27 Lugano like 31.2 and (b) i Brussels Ia.

I agree most firmly. Note this has Brexit implications: one of the routes post Brexit, as readers know, is for the UK to become part of Lugano. In doing so it will surrender BIa’s forum non-light regime (Articles 33-34) in favour of Lugano which most dedinitely does not have a forum non application – as well as, as is at issue here, re-arming the Italian torpedo.

This leaves the issue of the putative choice of court agreement. England is the forum contractus per Article 5(1)a Lugano, hence will have jurisdiction less choice of court stands. Authority is well-known and recently applied in Pan Ocean, referred to here at 85. After much factual consideration it is accepted to a good arguable case standard that the parties contracted on the basis of the STC for the obligations concerned.

In conclusion therefore the action is stayed.

Quite a few relevant issues here. I for one note the cautious approach of the Court, in handling the Court of Appeal’s Privatbank authority.

Geert.

Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2.

 

Application for negative declaratory relief on contractual performance.
Jurisdiction.
Lis pendens and choice of court under the Lugano Convention.
Concurrent claim by defendant in Switzerland. https://t.co/F80LoWJvps

— Geert Van Calster (@GAVClaw) April 21, 2020

Giesela Rühl (Friedrich-Schiller-University Jena & Humboldt-University of Berlin) has posted Private International Law Post-Brexit: Between Plague and Cholera on SSRN.

The abstract reads:

Over the course of the last two decades, the European legislature has adopted a large number of regulations dealing with private international law. As long as the UK was a member of the EU these regulations were also applicable in the UK. However, now that Brexit has actually taken place, they only apply by virtue of the Withdrawal Agreement whereas they will cease to apply as soon as the transition period provided for in the Withdrawal Agreement expires. The following contribution takes this finding as an opportunity to take a closer look at the future relationship between the EU and the UK in private international law. It analyses the corresponding British proposals and argues that the relatively best option for both the UK and the EU would be the adoption of a new bilateral agreement that either provides for continued application of the existing EU instruments or closely replicates these instruments.

The paper is forthcoming in the Revue de Droit Commercial Belge/Tijdschrift voor Belgisch Handelsrecht.

 

In SCOR SE v Barclays [2020] EWHC 133 (Comm), claimant SCOR is a reinsurance company incorporated in France. Covéa, a shareholder of SCOR, made an unsolicited offer to acquire a controlling shareholding in SCOR. Barclays was one of Covéa’s financial advisors and prospective lenders in relation to the Offer. The English proceedings, and related French proceedings, all concern French law claims brought by SCOR against Mr Derez, who was one of its directors, Covéa, and Barclays in connection with the Offer. It is alleged by SCOR that Mr Derez disclosed to Covéa and to its advisors, including Barclays, confidential information, which he obtained in breach of duties he owed to SCOR, and that the information was misused in relation to the Offer.

SCOR has commenced three sets of proceedings: On 29 January 2019, direct criminal proceedings in France. On the same day, the proceedings in England against Barclays. On On 6 February 2019, French proceedings against Monsieur Derez and Covéa. Concealment of breach of trust is the running theme in all 3 proceedings.

An application to stay the French Commercial Court proceedings, which had been made by the Claimant, had been dismissed.

Hancock J had two issues to decide under Article 30 Brussels Ia (at 6). The first was whether the French criminal proceedings, which were first in time, were related to the English Commercial Court action. The second was whether the High Court, as the Court second seised, should stay these proceedings, it being accepted that it had the power to do so under A30. The parties were agreed that, although the civil proceedings which formed part of the criminal action were an “adjunct” to the criminal part of the proceedings, they were nonetheless civil and commercial proceedings within the meaning of the Regulation.

Authority discussed includes of course CJEU C-406/92 The Tatry, however quickly attention focussd on the issue of ‘expediency’ in Article 30. Claimant pointed out that there had been a debate in the authorities as to what was meant by “expedient, with some authorities taking the line that this meant possible or capable, and others suggesting that the relevant synonym was “desirable” ‘. The Court of Appeal in Privatbank v Kolomoisky [2019] EWCA Civ 1709, which I discuss here, settled the issue in the direction of ‘desirable’. However Hancock J then discussed counsel’s reference to Euroeco Fuels (Poland) Limited and others v Sczezin and Swinoujscie Seaports and others [2019] EWCA Civ 1932 which at the time (December 2019) I called at most a ‘lukewarm’ application of Privatbank on this issue.

Hancock J leaves the discussion hanging for in his words at 15, ‘it is uncertain whether expediency in this context is to be treated as meaning desirability, or whether it is a jurisdictional requirement of the grant of a stay that the two cases can in fact be heard together: see Privatbank and cases cited therein, on the one hand, but compare the Euroeco decision on the other. I do not need to decide this question in this case, since my decision would be the same whichever test is applied, and I propose to consider the matter by reference to the test as set out in Privatbank.’

Yet at 24-25  he holds ‘on the basis the application of the test in Sarrio, as interpreted in later cases including in particular Privatbank, that the French criminal proceedings and the English proceedings are related. I move on to consider the exercise of my discretion on this basis.’ Yet ‘Of course, if the actual test is that which may be suggested by the Euroeco case, then the proceedings would not be related, and I would have no discretion to exercise.’

Here I do not follow. No proper decision is made on the authority or not of Privatbank or Euroeco (the latter suggested by counsel for the defence (fellow Bruges Stefan Zweig alumnus) to be at most per incuriam).

At 28 ff then follows a most relevant discussion of the wide nature or not of the discretion to issue a stay, once it has been established the cases are related (Hancock J at 31 deciding at that there is no presumption for a stay in favour of the applicant) deciding at 43 that there is no compelling reason for the stay, on the basis of the factors outlined there, with which I agree.

This is again a most relevant case. The relatedness or not of cases is a most, most crucial issue, including of course in an Article 33-34 context.

Geert.

(Handbook of EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.14.

In [2020] EWHC 995 (Comm) Trafigura v Clearlake, Teare J essentially has created a forum necessitatis rule in admiralty, to accomodate the slower availability of the Singapore courts due to Covid19. At 29 ff:

In normal circumstances an Admiralty Court, faced with an application to release a valuable vessel from arrest, would determine whether the security offered was such as to allow the release of the vessel from arrest without delay. In such circumstances there would usually be no need for the court upon which the owner and charterer have conferred jurisdiction to determine disputes between them to find as a fact what security would be judged adequate by the court of the place of arrest to allow the release of the vessel from arrest. For that would in practice be determined by the court of the place of arrest.

But these are not normal circumstances. There is a worldwide Covid 19 pandemic which has disrupted normal life, including the justice system. As a result I was told that the court in Singapore is not able to hear the application to determine the adequacy of the security offered until 18 May 2020. In those circumstances the question arises, or may arise, whether this court should find as a fact whether the security which has been offered to secure the release of the vessel matches that which would be required by the court of the place of arrest or not. That is what this court would have to do, and would have jurisdiction to do, if, unusually, there was no appropriate application before the court of the place of arrest. Those are not the circumstances of this case. There is an appropriate application in Singapore but the result will not be known for almost a month.

At 31 he re-emphasises that comity would ordinarily restrain any jurisdictional temptation. However at 32 he concludes that ‘on the other hand there is a dispute between the owner and charterer. The charterer owes an obligation to the owner to provide security which will secure the release of a valuable vessel from arrest. The owner wishes to enforce that obligation and so to mitigate the losses it is suffering by reason of its inability to trade the vessel. There is therefore a powerful reason for this court, in circumstances where the court of arrest, for understandable reasons, is unable to determine the application for release until 18 May 2020, to exercise the jurisdiction the parties have conferred on it to resolve disputes between owner and charterer.’

Not a jurisdicitional claim out the blue therefore; the choice of court does give England a powerful link to the case.

Geert.

 

 

Jurisdiction and enforcement of foreign judgments are separate issues in private international law. When arising outside of the context of international conventions, they are not necessarily related.

In principle, there is no obligation to enforce foreign judgments on the ground that, if the case had been litigated in the forum, the forum would have retained jurisdiction. Many states apply the same jurisdictional rules to assess whether to retain jurisdiction or to enforce a foreign judgment, but they have no obligation to do so, and many states assess the jurisdiction of foreign courts on a different basis.

The situation might be different in the context of an international convention. This is because the convention has established obligations as between the contracting states.

Where a convention contains both rules of international jurisdiction and recognition of foreign judgments, the issue does not arise. But many conventions only include one category of rules. They provide rules of international jurisdiction but are silent on the enforcement of the resulting judgments or, conversely, only provide rules of recognition and enforcement of foreign judgments (as, for instance, the 2019 Hague Judgments Convention).

Where a convention only contains rules of international jurisdiction, should it be considered that contracting states are under no obligation to enforce a judgment rendered by another contracting state on the basis of such rules? That would be quite problematic if the relevant rules of jurisdiction were both exclusive and narrow. A contracting state which would not enforce a foreign judgment might not have jurisdiction under the relevant convention to retain jurisdiction.

There are quite a few of such conventions in the field of international carriage. They include, for instance, the 1929 Warsaw and the 1999 Montreal Conventions for the Unification of Certain Rules Relating to International Carriage by Air.

In Rothmans v. Saudi Arabian Airlines, Mustill J. (as he was then) once gave his view on the reason why these conventions do not include rules on enforcement of judgements. He held:

International conventions of this kind tend to prescribe jurisdiction in narrow terms, on the assumption that the case where the defendant has insufficient assets to satisfy the claims in any of the stipulated countries is catered for by the ready availability of enforcement in other countries which is available via the various conventions on mutual recognition of judgments.

With all due respect, however, it is unclear to which “various conventions on mutual recognition of judgments” the distinguished judge was referring to.

A major issue for interpreting jurisdictional rules contained in international conventions as entailing obligations to enforce the resulting judgments is the strict rules of interpretation of treaties under the Vienna Convention on the Law of Treaties. But many of these private law treaties contain their own provisions on interpretation, which certainly derogate from the Vienna Convention.

The issue also arises in the context of the 2001 Cape Town Convention, which contains rules of international jurisdiction, but no rule of enforcement of judgments. In a recent article on Enforcement of Court Decisions Under the Cape Town Convention, I argue that the jurisdictional rules of the Convention should be considered as entailing rules on the enforcement of foreign judgments, and explore what these implicit rules could be.

The abstract of the article reads:

The purpose of this article is to explore the influence of the Cape Town Convention on the enforcement of foreign judgments. Although the issue is not expressly addressed by the Convention, the article argues that the jurisdictional rules of the Convention should be interpreted as entailing an implicit obligation to enforce the resulting judgments. After demonstrating that such conclusion would be consistent with the rules of interpretation of the Convention, the article explains what the regime of the implicit obligation to enforce judgments made under the Convention would be.

The paper, which can freely be downloaded here, was published in the latest issue of the Cape Town Convention Journal.

By Stephen G.A. Pitel, Faculty of Law, Western University

Instrubel, N.V., a Dutch corporation, has been attempting in litigation in Quebec to garnish assets of the Republic of Iraq.  The difficult issue has been the nature of the assets sought to be garnished and where they are, as a matter of law, located.  The assets are funds in a bank account in Switzerland payable to the Republic of Iraq (through the Iraqi Civil Aviation Authority) by IATA, a Montreal-based trade association.

The judge at first instance held the assets were not a debt obligation but in effect the property of the Republic of Iraq and located in Switzerland and so could not be subject to garnishment in Quebec proceedings.  The Court of Appeal reversed, holding the assets were a debt due to the Republic of Iraq which it could enforce against the trade association at its head office in Quebec, so that the debt was located in Quebec under the basic rule for locating the situs of a debt.

Last December the Supreme Court of Canada denied the appeal for the reasons of the Quebec Court of Appeal.  One judge, Justice Cote, dissented with reasons to follow.  On May 1, 2020, she released those reasons: see International Air Transport Association v. Instrubel, N.V., 2019 SCC 61 (available here).

As a Quebec case, the decision is based on the civil law.  Justice Cote’s dissent hinges on the view that the funds in the account are the property of the Republic of Iraq, not the IATA, and are merely being held by the latter before being remitted to the former (see para. 36).  The funds are not part of the “patrimony” of the IATA.  This is because the nature of the agreement between the Republic of Iraq and the IATA is one of “mandate” (see paras. 40-41 and 45).  As Justice Cote notes (at para. 48) “there is a general principle in the law of mandate that a mandatary’s obligation towards a mandator is not a debt”.  While the payments that went into the bank account were collected and held by the IATA, they were made to the Republic of Iraq (para. 53).  Indeed, the account “is for practical purposes equivalent to a trust account” (para. 61).

As noted, the six judges in the majority simply adopted the reasons of the Quebec Court of Appeal (available here).  So they did not directly engage with Justice Cote’s reasons.  The Court of Appeal concluded (at para. 41) that “there is no ownership of or real right to the funds … Rather, there is a creditor/debtor relationship”.  It also observed that the Republic of Iraq “never owned the debts due it by various airlines in consideration of landing at Iraqi airports.  It does not now own the funds collected in satisfaction of those debts and deposited by IATA in its bank account.  IATA’s obligation is to pay a sum of money not to give the dollar bills received from third parties” (para. 43).

The Court of Appeal noted (at para. 50) a practical rationale for its conclusion: “More significantly it seems that [Instrubel, N.V.] and others in similar positions which seek to execute an unsatisfied claim would be forced into an international “shell game” of somehow discovering (or guessing) where the mandatary/garnishee (IATA), deposited the money – a virtually impossible task.  The law, correctly applied, should not lead, in my view, to such unworkable results.  As the in personam debtor of ICAA, it matters not whether IATA deposited the money it collected and giving rise to such indebtedness in a bank account in Geneva, New York or Montreal.  The situs of its bank account does not change the situs of the debt IATA owes to its creditor.  As such, that funds were initially collected in Montreal or at an IATA branch office in another country is inconsequential.”

The case is at minimum important for what it does not do, which is authorize the garnishing of assets outside Quebec.  All judges take the position that would be impermissible.

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I sincerely continue to be humbled when cited by Advocates-General at the CJEU. Even more so therefore when it happens twice (see also Movic) in one week. In his Opinion in C-253/19 Szpunar AG refers to the Handbook’s analysis of C-341/04 Eurofood. The reference to that judgment is part of his assessment of ‘centre of main interests’ in the context of natural persons not exercising an independent business or professional activity, who benefit from free movement. The CJEU has not ruled on the issue before.

The AG points out that the European Insolvency Regulation (EIR) 1346/2000 (‘EIR 2000’), unlike its successor, Regulation 2015/848 (‘EIR 2015’), did not have time limitations under which the presumptions of COMI apply (see here for my paper on the main changes introduced by EIR 2015). However the EIR 2000 did have such presumption without the time limits, for companies and legal persons, and it generally, like the current EIR, requires courts to check whether COMI for natural persons or otherwise is located on their territory. This requires the court to check against the criteria for rebuttal of any presumptions of COMI. That test runs along the criteria that have repeadtedly featured on the blog (cue search string ‘COMI’): COMI designates the place where the debtor conducts the administration of its interests on a regular basis and is therefore ascertainable by third parties.

‘Habitual residence’ is not defined by the EIR 2015 and I concur with the AG that references to its application in family European PIL are of limited value. At 45: priority should be given not to factors relating to a debtor’s social or family situation but to those relating to a debtor’s financial position. In the case of natural persons not engaged in a self-employed activity, the line separating their financial situation and their family situation is blurred (at 46). The Virgos Schmitt report already discussed the application of of the insolvency regime to natural persons and advised that COMI as applied to natural persons ought to focus on the economic interests.

At 49 the AG suggests that ‘habitual residence’ no longer reflects a natural person’s COMI if does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of its revenue is earned and spent, or as the place where the major part of its assets is located. That entails quite a broad scope for rebuttal of course. The AG refines this in the remainder of the Opinion. He refers to national case-law on the issue, and to the importance of free movement rights. He also suggests an important limitation: namely that in his view, the mere presence of a natural person’s  one immovable asset (the ‘family home’, GAVC) in another Member State than that of habitual residence, in and of itself does not suffice to rebut COMI.

As in all other scenarios of rebuttal, the ascertainability in particular by (potential) creditors is key. That is a factual consideration which the national courts are in prime position to make.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

Due to the circumstances, all oral hearings at the CJEU scheduled until 25 May 2020 are postponed to a later date.

Regarding private international law, the judgment in C-641/18, Rina, a request for a preliminary ruling referred by the District Court of Genoa (Italy), will be read on 7 May  2020. The case requires the Court to address the relationship between a customary principle of international law on international immunity and Regulation No 44/2001 (Brussels I). The Court should as well reflect on the extent the answer to that question may be influenced by the interest in ensuring access to the courts. In his opinion of 14 January 2020, AG Szpunar concluded that

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is to be interpreted as meaning that an action for damages brought against private-law bodies in respect of classification and certification activities carried out by those bodies as delegates of a third State, on behalf of that State and in its interests, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

The principle of customary international law concerning the jurisdictional immunity of States does not preclude the application of Regulation No 44/2001 in proceedings relating to such an action.

Rina will be a 1st Chamber decision (Bonichot, Silva de Lapuerta, Safjan, Bay Larsen, Toader), with judge Camelia Toader as juge rapporteur.

Ms Toader is also the reporting judge in joined cases C-267/19 PARKING – C-323/19, Interplastics, to be released on the same day. The cases correspond to identical requests for a preliminary ruling and for interpretation of the grounds of the CJUE’s judgments of 9 March 2017, Zulfikarpašić (C-484/15) and Pula Parking (C-551/15). The referring court (Commercial Court, Zagreb, Croatia) explains that

Although the Court’s position is clear and unequivocal as to the fact that, in Croatia, notaries are not entitled to issue writs of execution based on an authentic document, that practice, which is at odds with Regulation No 1215/2012, continues. Following the decision of the Court of 9 March 2017, notaries have issued more than one million writs of execution.

Then, at the courts’ level, there is a divergent application of the CJUE’s decision in Pula Parking, in that

for the most part, [the courts and tribunals of the Republic of Croatia] consider that the decision relates exclusively to enforcement proceedings conducted by notaries in which the party against whom enforcement is sought is a natural person and national of another EU Member State.

Therefore, the Zagreb court had thought it necessary to submit a request for a preliminary ruling, in order to determine “whether natural and legal persons from Croatia, as citizens of the European Union, are on an equal footing with natural and legal persons from other EU Member States, and whether foreign legal persons are on an equal footing with foreign natural persons as regards the application of EU law in the Republic of Croatia.”

The case will be decided (without AG’s Opinion) by Judges Safjan, Toader, and Jääskinen, sitting as 6th Chamber.

Finally, the Opinion of AG Saugmandsgaard Øe in C-59/19, Wikingerhof, will be known on 28 May 2020. For the record, the requests comes from the German Bundesgerichtshof, and a hearing had taken place last January. The CJEU has been asked to address (again) the boundaries between Article 7(1) and Article 7(2) of the Brussels I bis Regulation, in the context of an action to stop commercial practices considered to be contrary to competition law, covered by contractual provisions resulting from an abuse of a dominant position. The judgment will be a Grand Chamber one.

Tamás Szabados (ELTE Eötvös Loránd University, Budapest) is the author of Economic Sanctions in EU Private International Law, a book that has been recently published by Hart.

The blurb reads:

Economic sanctions are instruments of foreign policy. However, they can also affect legal relations between private parties – principally in contract. In such cases, the court or arbitration tribunal seized must decide whether to give effect to the economic sanction in question. Private international law functions as a ‘filter’, transmitting economic sanctions that originate in public law to the realm of private law. The aim of this book is to examine how private international law rules can influence the enforcement of economic sanctions and their related foreign policy objectives. A coherent EU foreign policy position – in addition to promoting legal certainty and predictability – would presuppose a uniform approach not only concerning the economic sanctions of the EU, but also with regard to the restrictive measures imposed by third countries. However, if we examine in detail the application of economic sanctions by Member States’ courts and arbitral tribunals, we find a somewhat different picture. This book argues that this can be explained in part by the divergence of private international law approaches in the Member States.

More information here.

A collection of essays titled Innovación Docente y Derecho internacional privado (Educational innovation and private international law) has recently been published by Comares. The editors are María Asunción Cebrián Salvat and Isabel Lorente Martínez (University of Murcia).

The abstract reads as follows.

Now more than ever, and particularly in an European context, private international law has a great impact on the professional life of law students, no matter the path that they choose. This book collects from a very practical perspective the contributions in educational innovation of several professors and lecturers of private international law. Through the successive chapters, the work shows some tools which are useful to face the challenge of adapting both this subject and the way of teaching it to the new demands of the 21st century law market. This market requires highly specialized professionals, capable of mastering new technologies and of applying them to the field of Law. In the different chapters of this work you can find the experiences of these professors, their proposals for adapting the content of the subject to suit the European Higher Education Area and their suggestive innovative methodologies (legal clinics, film viewing, use of the case method, use of legal dictionaries, debate, online forums…). These experiences have been tested in Spanish Law Faculties, but can be similarly applied in other European countries where private international law or international litigation are taught.

More information here.

Edward Elgar has just published Conflict of Laws and the Internet, by Pedro de Miguel Asensio has published.

The blurb reads:

The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution.

More information available here.

Pedro de Miguel Asensio from the Universidad Complutense de Madrid has published a book on Conflict of laws and the Internet. The publisher’s blurb reads as follows: . The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution. . Key features include:

• comprehensive analysis of the complex conflict of laws issues that arise in connection with Internet activities
• discussion on the jurisdiction of national courts and the determination of applicable law
• a European perspective on the relationship between Internet Law and Private International Law (PIL)
• consideration of the cross-border effects of judgments in all major fields of PIL affected by the Internet.

Conflict of Laws and the Internet will be a vital resource for practitioners and policy-makers alike with applications for IT law experts and companies active in e-commerce. Providing a strong doctrinal base for an area of ever increasing importance and attention, this book will also be a valuable reference for academics working in the fields of IT law and PIL.

Additional information plus access to its detailed table of contents are available here.

I am most grateful to Hans Baron van Houtte, my predecessor in the conflicts chair at Leuven, for alerting me to the partial award of the Iran-US claims tribunal of 10 March last (case No. A15 (II:A)). Hans is a former President of the tribunal, which was established by the ‘Algiers declarations’ following the 1979 Tehran hostage crisis.

The award (a mere 691 pages) and separate opinions can best be accessed here. In the 10 March award, the Tribunal discussed at length the issue of the applicable law for transfer of title in movable property. In doing so, however, it also gives scholars a most wonderful insight and expose on the private international law /choice of law process in arbitration.

The issue is relevant for under the Algiers Declarations, the US is obliged to transfer to Iran, ‘Iranian properties’ subject to the jurisdiction of the United States on 19 January 1981. Hence what exactly constitutes ‘Iranian properties’?

From p.67 (para 135) onwards of the main award, the Tribunal discusses the general process of choice of law in arbitration, referring to a wealth of scholarship on the issue, going back to the mixed arbitral tribunals of the early 20th century etc. For anyone interested in the issue, this is most compelling reading. Many greats of PIL are cited, including the late prof Francois Rigaux (pictured here at Leuven in 2010 with profs Weizuo Chen, Jacques Herbots, Marc Fallon, and myself).

The Tribunal’s conclusion on the issue is that under the ‘general principles of private international law’, the lex rei sitae of the movable governs the passing of title in movable property.

The Tribunal does not hide the further complexities of this rule, including of course the very determination of that situs, and the role of lex contractus.

Indeed for instance on p.272 ff (para 967 ff) the Award discusses one particular claim concerning a case where, under the default rule of the lex rei sitae —- here, the goods were manufactured by, and in the possession of, Zokor, which was situated in the State of Illinois, United States. The applicable lex rei sitae is therefore the law of Illinois  —-property is passed by delivery, and where, under the default rule of the lex contractus –– here arguably Iranian law –– title is already passed by the conclusion of the sales contract or as soon as the goods are manufactured.

At 973 the Tribunal notes the choice of law pro Iranian law, made by the parties, However, it holds ‘the situs was and remained, during all relevant points in time, Illinois. Consequently, according to the general principle of private international law, as identified earlier in this Partial Award, it was for Section 2-401(2) UCC in connection with other contract law of the situs to determine whether the parties had agreed to derogate from the fallback rule.’ (which the Tribunal found, they had not).

That is not entirely crystal clear, and indeed in his separate Opinion prof van Houtte, while generally happy with the Tribunal’s approach, points out some inadequacies:

At 13: ‘The Parties assumed for years that the determination of whether property was “Iranian” as between the seller and the buyer was a contractual issue between those parties governed, inter alia, by the proper law of the contract (lex contractus). It was only at the Hearing session on 9 October 2013 that – in response to a question from the bench – the Parties’ argumentation focused on the lex rei sitae; from that point on, the lex contractus was virtually no longer considered. (…) I regret that the contractual aspects of the transfer of property rights inter partes and the impact of the law of the contract thereupon were not further explored at the Hearing’.

at 15: ‘I observe that the Parties could also have further elaborated on the extent to which the legal situs necessarily coincides with the geographical location of assets in export sales or turn-key contracts.’

And at 18, specifically with respect to the Zokor case that I mention above, ‘One may wonder, de lege ferenda, whether in Claim G-111 (Zokor) it was necessary for the Tribunal to construe and apply its own “general principles of international private law”’ and whether it should not instead adopt the approach which Iranian courts would have applied. These would have had jurisdiction pre the 1979 agreement and the transfer of jurisdiction to the Tribunal, van Houtte argues, does not imply it should settle contractual disputes under different principles than the Iranian courts would have applied’.

A most, most interesting read.

Geert.

 

On 16 April 2020, the Hague Conference announced that the Guide to Good Practice on the Use of Video-Link under the 1970 Evidence Convention has been published. “The Guide analyses the latest developments in relation to the use of video-link in the taking of evidence under the HCCH 1970 Evidence Convention, including references to internal law and other international agreements. It also outlines good practices to be followed and reflects the information provided by Contracting Parties in their respective Country Profiles”. It may be found here

Source: here

 

Background: “At its thirty-fifth session (New York, 13–17 May 2019), the [UNCITRAL] Working Group considered a draft convention prepared by the Comité Maritime International (CMI) on the recognition of foreign judicial sales of ships, known as the “Beijing Draft” […]. The Working Group decided that the Beijing Draft provided a useful basis for its deliberations on the topic of the judicial sale of ships”.

An annotated second revision of the Beijing Draft has now been released. It may be found here along with a note by the UNCITRAL secretariat there

Relevant UNCITRAL meetings have been suspended due to coronavirus.

AG Szpunar delivered today his opinion in Case C‑253/19 (MH, NI v OJ, Novo Banco SA), which is about the concept of the ‘centre of main interests’ of the Insolvency bis Regulation.

The background and the question: “1. The concept of the ‘centre of main interests’ formed the cornerstone of the system established by Regulation (EC) No 1346/2000. That concept was set out in Article 3(1) of that regulation, and was used as a connecting factor designating the courts having jurisdiction to open insolvency proceedings against a debtor. […] the Court had not yet had the opportunity to address the interpretation of that concept in the context of natural persons not exercising an independent business or professional activity who benefit from the free movement of persons and workers.
2. Regulation No 1346/2000 was repealed by Regulation (EU) 2015/848, which also uses the concept of ‘centre of main interests’. The question in the present case is as follows: can the Court’s case-law, developed within the framework of Regulation No 1346/2000 and relating to that concept, be transposed — and if so, to what extent — to proceedings against a natural person who is in the situation referred to above? This case thus provides the Court with the opportunity to rule on jurisdiction in insolvency matters in relation to any person not pursuing an activity as a self-employed person who exercises his right of free movement, and whose assets are located in the Member State of his former habitual residence”.

The suggested response: “Article 3(1), first and fourth subparagraphs, of Regulation (EC) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings must be interpreted as meaning that the presumption that the habitual residence of a debtor who is a natural person not engaged in a self-employed activity is the centre of his main interests may be rebutted if the place of habitual residence does not fulfil its role as the place where a debtor’s economic decisions are taken, as the place where the majority of his revenue is earned and spent, or as the place where the major part of his assets is located.

However, that presumption cannot be rebutted in favour of the Member State within the territory of which a debtor’s sole immovable asset is located in the absence of any other indication that the centre of that debtor’s main interests is located in that Member State. That fact may be determined on the basis of objective factors which are ascertainable by third parties (current and potential creditors) and relate to the financial interests of that debtor”.

Source: here