EAPIL blog

Jorg Sladič is an associate professor of international and European law at the European faculty of law in Ljubljana (Slovenia). He was a member of the European Commission’s expert group on modernisation of judicial cooperation in civil and commercial matters. This post is based on an article to be published shortly in the Revue des affaires européennes (L’obtention de preuves en matière civile et commerciale dans l’espace judiciaire européen : status quaestionis et la réforme envisagée, RAE 2020/1, pp. 191 – 212).

Taking of evidence abroad is hampered not only by foreign languages, distances etc. The scope of application ratione loci of a given law of civil procedure is limited by the principle of territoriality. Therefore the gathering of evidence in a pending civil proceedings before a forum is limited by the forum’s traditional inherent inability to perform judicial activities abroad. However, Europe is changing. Therefore an assessment of the principle of territoriality in the law of civil procedure is required.

1. Evidence Taking in Civil Procedure in Continental Europe as acta jure imperii

In the EU, judicial cooperation in civil and commercial matters also covers international legal assistance – comprising traditionally the service of judicial and extrajudicial documents abroad and taking of evidence abroad. European rules on cross-border taking of evidence are to be found in the Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters. The said regulation can be regarded as an update of existing traditional methods of international legal assistance and is heavily influenced by the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters. Even the direct taking of evidence by the requiring forum goes back to influences of the 1970 Hague Convention.

Traditionally a forum from one EU Member State cannot take evidence in other EU Member States. Continental European States consider evidence gathering and taking as acta jure imperii. The Latin maxim judici fit probatio explains it all (see e.g. O. L. Knöffel, Grenzüberschreitende Beweisaufnahme durch Private, in R. Geimer, R. A. Schütze, T. Garber (eds.), Europäische und internationale Dimension des Rechts, Festschrift für Daphne-Ariane Simotta, Vienne, LexisNexis, 2012, p. 333 and 334; M. Virgós Soriano, F. J. Garcimartín Alférez, Derecho procesal civil internacional : litigación internacional, 2nd ed., Madrid, Thomson Reuters, 2007, p. 486; B. Audit, L. D’avout, Droit international privé, 7th ed., Paris, Economica, 2013, par 484). Evidence is taken by the judge (forum). However, in the common law world, evidence is taken by the parties before the judge and not by the judge. Gathering of evidence is rather a private matter left to the parties. However, in all Member States the Regulation is applied under the principle of national procedural autonomy.

This difference between evidence taking as a private matter between the parties or evidence taking as a performance of public authority by a forum is in short also a major part of the of the famous Justizkonflikt between the US and Germany.

Practical aspects of evidence taking abroad were assessed in the 2017 Luxembourg Study (see B. Hess, M. Requejo Isidro, F. Gascón Inchausti, P. Oberhammer, E. Storskrubb, G. Cuniberti, C. Kern, K. Weitz, X. Kramer, An evaluation study of national procedural laws and practices in terms of their impact on the free circulation of judgments and on the equivalence and effectiveness of the procedural protection of consumers under EU consumer law, Report prepared by a Consortium of European universities led by the MPI Luxembourg for Procedural Law as commissioned by the European Commission, JUST/2014/RCON/PR/CIVI/0082, Strand 1, Mutual Trust and Free Circulation of Judgments, Brussels, Luxembourg, 2017, paras 240 – 263).

2. Principle of Territoriality of a Pending Civil Procedure

As judicial functions belong to performance of a public authority of a State, they are not supposed to be performed in an extraterritorial manner (the principle of territoriality of a pending civil procedure). Without going in the famous Lotus case law of the PCIJ the European version (Opinion of Advocate General JÄÄSKINEN, Lippens, C-170/11) of the rule reads as:

29. A court of a Member State can validly exercise its powers and make use of its ‘imperium’, that is to say, its power of enforcement, only within the limits of its geographical jurisdiction. Measures of inquiry are an exception to this rule in that they can be taken over the whole of national territory. Nevertheless, in view of the principle of territoriality in international law, which is linked to the principle of State sovereignty, the court cannot normally take action to enforce such measures in another Member State.

Fn. 44: However, a court ruling on a civil or commercial matter covered by Regulation No 1206/2001 cannot exercise public authority outside the territory of the Member State in which it is situated by carrying out substantive acts necessitating the use of State coercion such as using the State’s police force to bring a party resident in another Member State by force to appear before it.

It might also be added that the principle of territoriality prohibits in the continental legal thinking the recognition of foreign anti-suit injunctions, an issue that will become of importance if post Brexit negotiations do not produce a sufficient PIL framework between the EU and the UK.

According to the Belgian Court of Cassation, Belgian courts can condemn a third party residing in another EU Member State to produce documents in accordance with the Belgian lex fori and even apply the periodic monetary penalties (astreinte). The application of the regulation Nr 1206/200 is not mandatory (Court of Cassation, 1st Chamber, 26 April 2018, case Banque de Luxembourg, n° C.16.0192.N). The Belgian Court of Cassation also ruled quite laconically that it results clearly from the judgment of the Court of Justice in Lippens (C-170/11) that a court of a Member State may condemn a party resident in another Member State to produce a documents before it in accordance with its lex fori and even apply sanctions for non production of documents (Court of Cassation, 1st Chamber, 25 April 2013, aff. Fortis Luxembourg Vie, n° C.11.0103.F/1). However, as far as sanctioning witnesses residing abroad and having defaulted, the situation appears to be different. The Austrian Regional Court of Appeal in Linz dealt with the question of a regularly summoned German witness residing in Germany and not appearing before an Austrian forum (Oberlandesgericht Linz, 5 September 2013, case 3 R 145/13h, ECLI:AT:OLG0459:2013:RL0000147). The forum of first instance issued a heavy fine against the German witness. The appellate court ruled however that, due to the principle of territoriality of the pending civil proceedings, such a witness is not subject to jurisdiction of Austrian courts. An Austrian forum may summon him so that he can appear and testify, however, due to a non-existent duty to testify in another state, such a witness doesn’t have to comply with the summons. A foreign witness who fails to comply with the summons cannot to be sanctioned. Where the evidence is located abroad, an Austrian forum can order that this evidence be transferred to Austria as for example in the case of the summons of a witness – or may within the scope of Regulation No 1206/2001 proceed to the taking of evidence abroad, either through the requested court (Art. 10 and following of the regulation), or directly (art. 17 of the regulation). The regulation does not prevent the forum to summon a witness living abroad. However, means of constraint cannot be applied against such a witness residing abroad.

3. Methods of Taking of Evidence Abroad

It is generally recognised that evidence from abroad is to be gathered according to certain methods (A. Sengstschmid, Die europäische Beweisaufnahme, in P.G. Mayr (ed.), Handbuch des europäischen Zivilverfahrensrechts, Vienna, Manz, 2017, par. 15.1; L. Fumagalli, La disciplina comunitaira dell’assunzione delle prove all’estero in materia civile e commerciale: il regolamento (CE) n. 1206/2001 in S. M. Carbone, M. Frigo, L. Fumagalli, Diritto processuale civile e commerciale comunitario, Milano, Giuffrè, 2004, pp. 169 and 170):

1. the order of the forum before which the proceedings are pending ordering the parties to transfer themselves the evidence (or the means of evidence) which is located abroad to the forum State;
2. the active international legal assistance (the requesting court issues a letter rogatory which will be executed by the foreign requested forum according to the lex diligentiae, see Art. 10 of the Regulation Nr. 1206/2001);
3. the passive international legal assistance (the requesting court performs itself or through its agents directly the taking of evidence abroad according to its own lex fori. In principle, such an approach requires a prior consent of the requested foreign state. There is also the problem of coercive measures adopted by the requesting forum on the territory of the requested State. Such direct taking of evidence is allowed in the EU Under the conditions of Art. 17 of the Regulation Nr. 1206/2001);
4. videoconferencing or any other modern means of communication where the evidence remains abroad while the proceedings take place before the forum of origin (see Art. 10(4) of the Regulation Nr. 1206/2001);
5. the taking of evidence is performed in cooperation or dialogue between the requesting forum and the requested forum (see Art. 10(3) and (4) and Art. 12 of the Regulation Nr. 1206/2001));
6. obtaining evidence through diplomatic officers or consular agents.

Neither obtaining evidence through diplomatic officers or consular agents nor the request of the forum before which the proceedings are pending ordering the parties to transfer themselves the evidence (or the means of evidence) which is located abroad to the forum State are regulated by the Regulation Nr. 1206/2001.

In this framework the Council Statement Nr. 54/01 of 4 July 2001 on Regulation Nr. 1206/2001 shall be mentioned. According to the Council of the EU “The scope of application of this Regulation shall not cover pre-trial discovery, including the so-called “fishing expeditions”.” (Statement, p. 16).

4. Effet utile of the Regulation Nr. 1206/2001 – Is it of American origin?

However, the effet utile of the Regulation Nr. 1206/2001 has lead the Court of Justice in cases Lippens (C-170/11) and ProRail (C-332/11) to construe that text as being optional and facultative.

It would appear that the US Supreme Court’s decision in case Société Nationale Industrielle Aérospatiale et al. V. United States District Court for The Southern District of Iowa 82 U.S. 522 (1987), on the 1970 Hague Convention was a direct though not cited source of the European case-law. According to the US case law the “Convention does not provide exclusive or mandatory procedures for obtaining documents and information located in a foreign signatory’s territory”. “its purpose [is] to “facilitate” discovery and to “improve mutual judicial co-operation.”” “Although they are not mandatory, the Convention’s procedures are available whenever they will facilitate the gathering of evidence, and “apply” in the sense that they are one method of seeking evidence that a court may elect to employ”.

Documents having lead to the Lippens case, especially the opinion of Advocate General before the High Council of the Netherlands (Hoge Raad der Nederlanden, the Dutch Supreme Court) M. P. Vlas of 1st April 2011, ECLI:NL:PHR:2011:BP3048 and the preliminary reference, judgement of the High Council of the Netherlands, 1st Chamber, 1st April 2011, case 10/02071, ECLI:NL:HR:2011:BP3048, show an in-depth assessment of the US Société Nationale Industrielle Aérospatiale case.

The interpretation of facultative and facilitative nature of international instruments on taking of evidence abroad was extended by the CJEU to the Regulation Nr. 1206/2001. Such an interpretation is indeed not a forgone conclusion. If the rigour used to combat conflicts caused created between EU private international law (Brussels Ia Regulation) and national traditions in anti-suit injunctions (Turner, C-159/02, Allianz, C-185/07, Gazprom, C-536/13) and the forum non conveniens doctrine (Owusu, C-281/02) were to be extended also to the Regulation Nr. 1206/2001, then there there could be no space for facilitative nature of the Regulation Nr. 1206/2001 (C. Thole, Kein abschließender Charakter der Europäischen Beweisaufnahmeverordnung, IPrax, Nr. 3/2014, p. 255). Indeed, there are connecting points linking the Regulation on taking of evidence and the Brussels Ia regulation such as exclusion of arbitration (see on that issue B. Hess, Europäisches Zivilprozessrecht, Heidelberg, C.F. Müller, 2010, p. 465; M. Fartunova-Michel, JurisClasseur Europe Traité, fasc. 2800 : Obtention des preuves en matière civile et commerciale – Coopération entre les juridictions des États membres – Règlement (CE) n° 1206/2001 », update 27 May 2019, par. 20). However, the effet utile lead to a different conclusion.

Indeed, the CJEU ruled in Lippens:

according to recitals 2, 7, 8, 10 and 11 in the preamble to Regulation No 1206/2001, the aim of the regulation is to make the taking of evidence in a cross-border context simple, effective and rapid. The taking, by a court of one Member State, of evidence in another Member State must not lead to the lengthening of national proceedings. […]. Thus, it is clear that, in certain circumstances, in particular if the party summoned as a witness is prepared to appear voluntarily, it may be simpler, more effective and quicker for the competent court to hear him in accordance with the provisions of its national law instead of using the means of taking evidence provided for by Regulation No 1206/2001. (paras. 29 and 31)

Finally, the interpretation according to which Regulation No 1206/2001 does not govern exhaustively the taking of cross-border evidence, but simply aims to facilitate it, allowing use of other instruments having the same aim, is supported by Article 21(2) of Regulation No 1206/2001, which expressly authorises agreements or arrangements between Member States to further facilitate the taking of evidence, provided that they are compatible with the regulation. (par 33)

However, the facilitative nature of the Regulation Nr. 1206/2001 is limited by an exception of public powers of EU Member States (see e.g. C. Thole, op. cit., p. 257 ; G. Cuniberti, L’expertise judiciaire en droit judiciaire européen, Rev. crit. DIP, Nr. 3/2015, p. 535 ; M. Fartunova-Michel, op. cit., point 2 ; see in general law of international civil procedure S. Triva, M. Dika, Građansko parnično procesno pravo, Narodne novine, Zagreb, 2004, p. 57 ; A. Maganić, Pravna pomoć u građanskim stvarima između Republike Hrvatske i Republike Makedonije », Zbornik PFZ, 2/2011 p. 245).

Indeed, the CJEU has ruled in ProRail:

47. in so far as the expert designated by a court of a Member State must go to another Member State in order to carry out the investigation which has been entrusted to him, that might, in certain circumstances, affect the powers of the Member State in which it takes place, in particular where it is an investigation carried out in places connected to the exercise of such powers or in places to which access or other action is, under the law of the Member State in which the investigation is carried out, prohibited or restricted to certain persons.

48. In such circumstances, unless the court wishing to order cross-border expert investigation foregoes the taking of that evidence, and in the absence of an agreement or arrangement between Member States within the meaning of Article 21(2) of Regulation No 1206/2001, the method of taking evidence laid down in Articles 1(1)(b) and 17 thereof is the only means to enable the court of a Member State to carry out an expert investigation directly in another Member State.

Such a ruling was then interpreted e.g. by the Belgian Court of Cassation as follows. A plea entirely based on the argument that the forum of a Member State which requires the act of investigation entrusted to an expert to be performed in the territory of another Member State is always required to request a prior authorization of the other Member State in accordance with Article 17 of Regulation (EC) No 1206/2001, without distinguishing according to whether the taking of evidence may or may not have an influence on the powers of this other Member State or according to whether or not there is a convention or regulation within the meaning of the second paragraph of Article 21 of Regulation 1206/2001, is not founded (Court of Cassation, 1st Chamber, 7 November 2013, case C.10.0286.N/1)

5. Reform

The European Commission proposed a reform of the Regulation Nr. 1206/2001. The EAPIL reported extensively on that. As a consequence an indepth assessment in the article was superseded by posterior legal development. Such direct taking of evidence is allowed in the EU under conditions of Art. 17 of the Regulation Nr. 1206/2001.

On 21 July 2020 the Unidroit Secretariat released a Note on the UNIDROIT Principles of International Commercial Contracts and the COVID-19 health crisis.

As stated in the website of Unidroit, the Note is to be considered as work in progress, and the Secretariat welcomes any comments or suggestions.

The Note’s presentation reads:

In the context of the outbreak of COVID-19, UNIDROIT has prepared this note as a form of guidance as to how the Principles could help address the main contractual disruptions caused by the pandemic directly as well as by the measures adopted as a consequence thereof. The note analyses whether parties may invoke COVID-19 as an excuse for non-performance, and if so, based on which concepts and under what conditions. The analysis also covers the scenario, likely to be common in practice, where performance is still possible, but has become substantially more difficult and/or onerous under the circumstances.

The document aims to guide the reader through the process, leading her to ask appropriate questions and to consider the relevant facts and circumstances of each case. Naturally, solutions will vary according to the particular context of the pandemic in each jurisdiction and there is no one-size-fits-all approach. In particular, the document, considering the different ways the Principles have so far been used in practice, aims to: (i) help parties use the Principles when implementing and interpreting their existing contracts or when drafting new ones in the times of the pandemic and its aftermath; (ii) assist courts and arbitral tribunals or other adjudicating bodies in deciding disputes arising out of such contracts; and (iii) provide legislators with a tool to modernise their contract law regulations, wherever necessary, or possibly even to adopt special rules for the present emergency situation.

The open nature of the Principles furnishes the parties and interpreters with a much-needed flexibility in such an extreme context, constituting an efficient tool to offer a nuanced solution that can help preserve valuable contracts for the parties. Especially in mid-to-long term contracts, and in view of the – apparently – temporary nature of the impediment, mechanisms that allow for an adequate renegotiation and proportionate allocation of losses could ultimately help preserve the contract and maximise value for the jurisdiction(s) involved.

Arguably, the world of contracts has never suffered such an unforeseeable, global, and intense interference. Extraordinary situations require extraordinary solutions, and there is a global need to ensure the economic value enshrined in commercial exchanges is not destroyed. The Principles offer state-of-the-art, best-practice tools to deal with the problem; a set of rules that result from years of study and analysis, with the participation and consensus of the most prominent academics and practitioners in the field, from civil law and common law traditions.

— Many thanks to Carmen Tamara Ungureanu (Alexandru Ioan Cuza University of Iasi, Romania) for drawing the editors’ attention to this development.

Carlos Manuel Vazquez (Georgetown University Law Center) has posted Extraterritoriality as Choice of Law on SSRN.

The abstract reads:

The proper treatment of provisions that specify the extraterritorial scope of statutes has long been a matter of controversy in Conflict of Laws scholarship. This issue is a matter of considerable contemporary interest because the Third Restatement of Conflict of Laws proposes to address such provisions in a way that diverges from how they were treated in the Second Restatement. The Second Restatement treats such provisions — which I call geographic scope limitations — as choice-of-law rules, meaning, inter alia, that the courts will ordinarily disregard them when the forum’s choice-of-law rules or a contractual choice-of-law clause selects the law of a state as the governing law. The Third Restatement does not consider them to be choice-of-law rules, instead maintaining that they are indistinguishable from limitations on the statute’s internal scope, such as a provision specifying that a statute prohibiting vehicles applies only in parks. This means, according to the Third Restatement, that contractual choice-of-law clauses are presumed to select the chosen state’s law subject to their geographic scope limitations, and that the courts of other states are obligated to give effect to such limits when applying the law of the state that enacted the statute with the geographic scope limitation. Indeed, according to the Third Restatement, failure to do so would violate the obligation of U.S. states to give Full Faith and Credit to the laws of sister states.

This article defends the Second Restatement’s understanding of geographic scope limitations as choice-of-law rules. Limits on a statute’s territorial scope are fundamentally different from limits on a statute’s internal scope. When a state enacts a statute and specifies that it applies only to conduct occurring within the state’s territory, or to residents of the state, it has limited the reach of the law out of deference to the legislative authority of other states. The state does not have a different rule for conduct that occurs on the territory of other states or for persons who are not residents. The territorial scope provision tells us only that cases beyond the statute’s specified scope should be governed by the law of a different state. For this reason, such provisions are best understood as choice-of-law rules.

The Third Restatement treats geographic scope limitations as prescribing non-regulation for cases beyond the statute’s specified geographic scope. This understanding of geographic scope limitations is highly implausible and, indeed, either unconstitutionally discriminatory or unconstitutionally arbitrary. Failure to give effect to such provisions does not violate the Full Faith and Credit Clause. Rather, under the Supreme Court’s analysis in Franchise Tax Board v. Hyatt, such provisions violate the Full Faith and Credit Clause. Understood as choice-of-law rules, geographic scope limitations are binding on the courts of the enacting state, and other states may take them into account in determining whether to apply the law of the enacting state. But, if the forum’s choice-of-law rules select the law of the enacting state as the governing law, the constitutional obligation of U.S. states to respect the laws of their sister states poses no impediment to application of the statute’s substantive provisions to cases beyond the statute’s specified geographic scope.

San Marino, the independent State surrounded by Italy, is home to about 5,000 undertakings. Unsurprisingly, given the size of the country (61 km2) and its population (33,344), a significant part of the business carried out in the small Republic is related to Italy. In fact, it is not infrequent for Italian courts to be seised of disputes opposing businesses based in Italy and San Marino, respectively.

Service of Judicial Documents Between Italy and San Marino

Where this occurs, the issue arises, among others, of the (cross-border) service of the document instituting the proceedings.

San Marino is a party to the 1965 Hague Service Convention, since 2002. Italy, too, is a party to that Convention.

However, the application of the Convention between the two countries is proving problematic, at least in Italy.

The difficulties revolve around the declaration issued by San Marino under Article 21(2)(a) of the Convention, whereby San Marino made known its opposition to service by postal channels. In fact, Article 10(a) stipulates that the Convention ‘shall not interfere with … the freedom to send judicial documents, by postal channels, directly to persons abroad’, provided, however, that ‘the State of destination does not object’.

In practice, the above declaration implies that service on a Sammarinese defendant for the purposes of proceedings in Italy may not occur otherwise than in accordance with Article 3 to 6 of the Convention, i.e. by a request conforming to the model annexed to the Convention itself, forwarded to the Sammarinese Central authority.

The View of the Italian Supreme Court

In a judgment of 29 January 2019 (No. 2482), the Italian Supreme Court ruled that the above declaration could (and in fact ought to) be disregarded. It actually concluded that, in the circumstances of that case, service – made by post on a Sammarinese company – was in all respects valid and effective.

The Supreme Court noted that the Government of San Marino, when acceding to the Convention, issued two separate instruments – the instrument of accession itself, and the declarations accompanying it. But while the former was drawn up in the form of a law, the latter resulted from a mere executive act. The Supreme Court characterised the latter, on account of its form, as an act incapable of affecting the operation of the convention (‘un atto inidoneo a ridurre l’ambito di applicazione alla predetta Convenzione’).

Assessment

The ruling is unpersuasive for a number of reasons.

It is not for the courts of one State to scrutinise the appropriateness of the forms employed by another State’s authorities in their international relations.

This is all the more true for declarations issued by the latter State in respect of a multilateral international convention, such as the Hague Service Convention.

In fact, it is for the depositary of the convention concerned (here, the Ministry of Foreign Affairs of the Netherlands) to assess whether the declarations received are in such a form as to effectively serve their purpose.

It appears that the Ministry of Foreign Affairs of the Netherlands received the Sammarinese declaration, and recorded it as such. No objections and no remarks have been raised at a diplomatic level concerning that declaration.

According to Article 77(1)(d) and (e) of the Vienna Convention on the Law of Treaties, the tasks of the depositary include ‘examining whether the signature or any instrument, notification or communication relating to the treaty is in due and proper form and, if need be, bringing the matter to the attention of the State in question’, and ‘informing the parties and the States entitled to become parties to the treaty of acts, notifications and communications relating to the treaty’. If the declarations of a State were to be reviewed by the other Contracting States individually, this would likely frustrate the function of the depositary and undermine its practical advantages.

One would be tempted to label the Italian Supreme Court’s ruling as unfortunate, and to ignore it altogether.

But this is in fact the second such ruling by the Cassazione. The first one, given on 9 November 2011 (No. 23290), was criticised for the above reasons (including by the author of this post: ‘Sulla notifica degli atti giudiziari mediante la posta secondo la Convenzione dell’Aja del 1965’, Rivista di diritto internazionale privato e processuale (2012), 341-362). The fact is that the Court reiterated its views.

In fact, the stance staken by the Court appears to amount, now, to the official position of the Italian Supreme Court on the (not so firm) value of declarations issued in connection with the Service Convention (and, possibly, in connection with any other multilateral convention contemplating similar instruments).

The author of this post is not aware of any diplomatic protests by the Government of San Marino as regards the Italian Supreme Court’s rulings.

It is hoped that, for the sake of the proper functioning of the Hague Service Convention, the approach be reconsidered at the earliest occasion.

 

– Photo credit: Max_Ryazanov, Wikimedia Commons

I have reported earlier on the Commisimpex case and the various decisions of the French Supreme Court on civil and criminal matters (Cour de cassation) which have eventually excluded from the scope of the waiver of immunities of the Republic of Congo assets protected by diplomatic immunity.

On 8 June2020, Commisimpex attached a Falcon 7X business jet belonging to the presidency of Congo on the French airport of Bordeaux-Merignac where it was undergoing maintenance. Rumour has it that the markers of the aircraft were off for several years, but they were mysteriously turned on recently, allowing Congo’s creditors to track it down …

Congo immediately initiated proceedings before the Paris enforcement court to set aside the attachement on the ground that the jet was covered by diplomatic immunity.

In a judgment of 29 June 2020, the Paris Enforcement Court rejected all arguments of the Republic of Congo and confirmed the validity of the attachement.

Diplomatic Clearance

The first argument of Congo in favour of the extension of diplomatic immunity to the jet was that it was a State Aircraft in the meaning of the Chicago Convention on International Civil Aviation and could not, as such, fly over French territory without being authorised to do so. Indeed, it had received “diplomatic clearance” (DIC) from the French Ministry of Foreign Affairs to that effect.

The Paris Court found, however, that the only reason why the various authorisations that the French Ministry could grant were labelled “diplomatic” was that they were issued by the Ministry of Foreign Affairs. The label was unrelated to the use of the aircraft, and did not create any presumtion that the aircraft was used for diplomatic activities. Indeed, it did not even imply that the owner of the relevant aircaft was a state.

Sovereign Immunity, but Which One?

The Paris Court recognised that State Aircrafts must be protected by an immunity against enforcement. The crucial issue, however, was not so much whether the aircraft was covered by some sovereign immunity, but by diplomatic immunity. The Paris Court underscored that French courts have ruled that while the diplomatic immunity of Congo remains intact after its general waiver, Congo has waived all other enforcement immunities.

The Court noted that the 2016 French statute which has established a special regime for diplomatic immunity refers to “assets used (…) in the exercise of the diplomatic mission of foreign states” (French Code of Civil Enforcement Proceedings, Art L. 111-1-3). It further noted that the 1961 Vienna Convention on Diplomatic Relations also referred to the “diplomatic mission”. The Court concluded that Congo enjoyed  diplomatic immunity in France only over assets affected to the Congolese Embassy in Paris.

Congo put forward an additional argument. It argued that the aircraft was used by the presidentcy of Congo, and was thus used by President Sassou Nguesso for his diplomatic activities. The Court noted that the logbook of the aircraft showed that it had been essentially used for domestic flights within Congo. It was also used once to fly to Madagascar, in order to bring back “Covid Organics CVO”, which  was not a diplomatic activity.

In truth, the Court found, in the last two years, each time President Nguesso had travelled internationally for official visits, he had used another plane, a Boeing 787.

In the absence of any evidence of diplomatic use of the Falcon 7X business jet, the Court concluded, it is not protected by diplomatic immunity, and could thus be attached.

The general press has reported that President Nguesso is really upset. One trusts that the fight over this asset, which is worth over € 20 million, is only beginning. Congo has lodged an appeal against the judgment, but it should not suspend its enforcement, which means that a sale by auction can be immediately organised.

Following successful events in Bonn and Würzburg, the third iteration of the conference for young German-speaking scholars in private international law will take place – hopefully as one of the first events post-Corona – on 18 and 19 March 2021 at the Max Planck Institute for Comparative and International Private Law in Hamburg. The conference will focus on the theme of PIL for a better world: Vision – Reality – Aberration?

It will include a keynote by Angelika Nußberger, former judge at the European Court of Human Rights, and a panel discussion between Roxana Banu, Hans van Loon, and Ralf Michaels.

The organisers are inviting contributions that explore any aspect of the conference theme, which can be submitted until 20 September 2020. The call for papers, in German and English, together with further information, can be found on the conference website.

The author of this post is Giulio Monga, a PhD student at the Catholic University of the Sacred Heart, Milan. The editors of the EAPIL blog encourage scholars and practitioners to share their views on the Court’s judgment and its implications. Those interested in submitting guest posts are invited to get in touch with the blog editors at blog@eapil.org. 

On 16 July 2020 the Court of Justice of the European Union (CJEU) delivered its judgment on the Schrems II case (a press release is available here). The ruling is part of the judicial saga between Facebook and the Austrian data protection advocate Max Schrems relating to transfers of personal data from the EU to the US. It follows the judgment of 2015 whereby the CJEU invalidated the so-called ‘Safe Harbour’, later replaced by the ‘EU-US Privacy Shield’, the adequacy of which had been established by the European Commission by a Decision of 2016.

The facts

Max Schrems lodged a complaint against Facebook Ireland Ltd. before the Irish Supervisory Authority (the Data Protection Commissioner, DPC) over the transfer of personal data relating to him by Facebook Ireland to Facebook Inc., the latter’s parent company established in the US.

In particular, Mr Schrems claimed that the inclusion of the controller-to-processor Standard Contractual Clauses (SCC) approved by the EU Commission through Decision 2010/87 in a data transfer processing agreement between Facebook Ireland, acting as a controller with the meaning of Article 4(7) of the General Data Protection Regulation (GDPR), and Facebook Inc., acting as a processor with the meaning of Article 4(8) GDPR, did not justify the transfer of the personal data relating to him to the US. Under US law, Schrems argued, Facebook Inc. is required to make the personal data of its users available to US authorities, such as the NSA and the Federal Bureau of Investigation (FBI), in the context of surveillance programmes that preclude the exercise of the rights enshrined in Articles 7, 8 and 47 of the Charter of Fundamental Rights of the European Union (the Charter). On that basis, Mr Schrems asked that DPC suspend the transfer of data.

The DPC, as well as the referring Irish High Court, noted that it was impossible to adjudicate Mr Schrems’ complaint unless the CJEU examined the validity of the Decision 2010/87. Furthermore, the referring High Court also asked CJEU to rule on the validity of the Decision 2016/1250 establishing the ‘EU-US Privacy Shield’.

The Legal Framework

Pursuant to Articles 25-26 of the repealed Directive 95/46/EC and to Articles 44-50 of the GDPR,  transfer of personal data to a third country may, in principle, take place only if the third country in question ensures an adequate level of data protection.

According to Article 45 GDPR, the Commission may find that a third country ensures, by reason of its domestic law or its international commitments, such an adequate level of protection. With regard to the US, the EU Commission, by Decision 2000/520/EC, firstly established that adequate protection was ensured by companies joining the so-called ‘Safe Harbour’ mechanism, which was invalidated under the first Schrems ruling. Later, with the new adequacy Decision 2016/1250 the EU-US Privacy Shield has been established.

In the absence of an adequacy decision, transfers of personal data to third countries may take place only if the personal data exporter established in the EU has provided appropriate safeguards provided by for Article 46, which may arise, among others, from standard contractual clauses adopted by the EU Commission. Standard Contractual Clauses, depending on the circumstances, might be controller-to-processor SCC such as those used by Facebook Ireland or controller-to-controller SCC approved by EU Commission through Decisions 2001/497/EC and 2004/915/EC.

In addition to the adoption appropriate safeguards, Article 46 GDPR also requires that enforceable data subject rights and effective legal remedies for data subjects are available.

The Judgment

The Court began with considering that the GDPR applies to the transfer of personal data for commercial purposes by an economic operator established in a Member State to another economic operator established in a third country, even if, at the time of that transfer or thereafter, that data may be processed by the authorities of the third country in question for the purposes of public security, defence and State security. The Court added that this type of data processing by the authorities of a third country cannot preclude such a transfer from the scope of the GDPR.

As in Schrems I, the CJEU stated that, according to the relevant rules of GDPR, data subjects whose personal data are transferred to a third country pursuant to Standard Contractual Clauses must be afforded a level of protection essentially equivalent to that guaranteed within the EU by the GDPR, read in the light of the Charter. The Court specified that

[t]he assessment of the level of protection afforded in the context of such a transfer must, in particular, take into consideration both the contractual clauses agreed between the controller or processor established in the European Union and the recipient of the transfer established in the third country concerned and, as regards any access by the public authorities of that third country to the personal data transferred, the relevant aspects of the legal system of that third country. (para. 105)

The Decision on the Standard Contractual Clauses

In light of the foregoing, the CJEU Court considered that the validity of Decision 2010/78 is not called into question by the mere fact that the SCC therein approved do not bind the authorities of the third country to which data may be transferred. In fact,

[t]hat validity depends, however, on whether, in accordance with the requirement of Article 46(1) and Article 46(2)(c) of the GDPR, interpreted in the light of Articles 7, 8 and 47 of the Charter, such a standard clauses decision incorporates effective mechanisms that make it possible, in practice, to ensure compliance with the level of protection required by EU law and that transfers of personal data pursuant to the clauses of such a decision are suspended or prohibited in the event of the breach of such clauses or it being impossible to honour them. (para. 137)

The CJEU found that Decision 2010/87 establishes such mechanisms. Namely, the CJEU pointed out that the decision imposes an obligation on a data exporter and the recipient of the data to verify, prior to any transfer, whether that level of protection is respected in the third country concerned and that the decision requires the recipient to inform the data exporter of any inability to comply with the standard data protection clauses, the latter being, in turn, obliged to suspend the transfer of data and/or to terminate the contract with the former. The Court concluded that nothing affected the validity of Decision 2010/87.

The Invalidation of EU-US Privacy Shield

Lastly, the CJEU examines the validity of Decision 2016/1250 establishing the EU-US Privacy Shield.

In that regard, the CJEU notes that that Decision enshrines the position, as did Decision 2000/520, that the requirements of US national security, public interest and law enforcement have primacy, thus condoning interference with the fundamental rights of persons whose data are transferred under the Privacy Shield framework.

In the view of the Court,

[t]he limitations on the protection of personal data arising from the domestic law of the United States on the access and use by US public authorities of such data transferred from the European Union to the United States, which the Commission assessed in the Privacy Shield Decision, are not circumscribed in a way that satisfies requirements that are essentially equivalent to those required, under EU law, by the second sentence of Article 52(1) of the Charter. (para. 185)

The Court pointed out that, in respect of certain surveillance programmes, those provisions do not indicate any limitations on the power they confer to implement those programmes, or the existence of guarantees for potentially targeted non-US persons. The Court adds that, although those provisions lay down requirements with which the US authorities must comply when implementing the surveillance programmes in question, the provisions do not grant data subjects actionable rights before the courts against the US authorities.

The Ombudsperson mechanism

As regards the requirement of judicial protection, the CJEU focused its reasoning on the Ombudsperson mechanism provided for by the EU-US Privacy Shield Decision, which the EU Commission found as capable to ensure data subjects with level of protection essentially equivalent to that guaranteed by Article 47 of the Charter.

The CJEU stressed that data subjects must be given an opportunity to seise an independent and impartial court in order to have access to their personal data, or to obtain the rectification or erasure of such data.

The CJEU observed in particular that the Privacy Shield Ombudsperson,

[a]lthough described as ‘independent from the Intelligence Community’, was presented as ‘[reporting] directly to the Secretary of State who will ensure that the Ombudsperson carries out its function objectively and free from improper influence that is liable to have an effect on the response to be provided’. (para. 195)

Furthermore, the CJEU noted that nothing in Decision 2016/1250 indicates that the dismissal or revocation of the appointment of the Ombudsperson is accompanied by any particular guarantees, which is such as to undermine the Ombudsman’s independence from the executive.

Similarly, the Court, noted that

[a]lthough recital 120 of the Privacy Shield Decision refers to a commitment from the US Government that the relevant component of the intelligence services is required to correct any violation of the applicable rules detected by the Privacy Shield Ombudsperson, there is nothing in that decision to indicate that that ombudsperson has the power to adopt decisions that are binding on those intelligence services and does not mention any legal safeguards that would accompany that political commitment on which data subjects could rely.

The CJEU found that

[t]he Ombudsperson mechanism to which the Privacy Shield Decision refers does not provide any cause of action before a body which offers the persons whose data is transferred to the United States guarantees essentially equivalent to those required by Article 47 of the Charter.

In light of the foregoing, the CJEU invalidated Decision 2016/1250 on EU-US Privacy Shield.

The ruling is expected to have a very significant impact on the transfer of personal data from the EU to third countries.

Concerning the immediate effects of the judgment, the Court made the following remarks:

As to whether it is appropriate to maintain the effects of that decision for the purposes of avoiding the creation of a legal vacuum … the Court notes that, in any event, in view of Article 49 of the GDPR, the annulment of an adequacy decision such as the Privacy Shield Decision is not liable to create such a legal vacuum. That article details the conditions under which transfers of personal data to third countries may take place in the absence of an adequacy decision under Article 45(3) of the GDPR or appropriate safeguards under Article 46 of the GDPR (para. 202).

On 14 July 2020, Austria ratified the 1965 Hague Service Convention. The Convention is set to enter into force for Austria on 12 September 2020. All EU Member States will then be be bound by the Convention. In practice, the latter will apply in  the relationship between the (Members States of the) EU, one the one hand, and some fifty more States worldwide, on the other.

The Austrian ratification comes more than four years after the Council of the European Union issued a decision authorising Austria to sign and ratify, and Malta to accede to, the Convention ‘in the interest of the European Union’.

The Council decision reflects the fact that, as stated in the preamble, the Union ‘has external competence with regard to the Convention in so far as its provisions affect the rules laid down in certain provisions of Union legislation or in so far as the accession of additional Member States to the Convention alters the scope of certain provisions of Union legislation’, such as Article 28(4) of the Brussels I bis Regulation. Still, the Convention ‘does not allow for participation by regional economic integration organisations such as the Union’, meaning that, to make sure that the Convention is in force for all Member States, the Union had no other option but to authorise (and in fact request) the Member States that had not yet done so, to ratify – or accede to, depending on the circumstances – the Convention in the interest of the Union itself.

The Convention is already applicable to Malta as of 17 July 2018.

Kamalia Mehtiyeva (Paris I Panthéon-Sorbonne School of Law) has just published a monograph on the Concept of Judicial Cooperation based on her doctoral thesis (La notion de coopération judiciaire, LGDJ, coll. Droit privé, préf. L. Cadiet, vol. 597, 2020).

The author has provided the following abstract in English:

The diversity of legal orders and their multiplication have led to a growing need to articulate them. In addressing this need, mechanisms of coordination proper to private international law (rules of conflicts of laws and of jurisdictions, lis pendens), based on passive logic in which one legal order holds back in favor of another, reveal to be insufficient.

Parallel to these mechanisms emerged, in a disorganized manner, a whole heteroclite set of more active methods of interaction, both during judicial proceedings and upon their completion, such as mission rogatory, service of process, extradition, European arrest warrant, seizure of assets, Interpol red notices, enforcement of foreign judgments and arbitral awards. The doctoral thesis gathers these diverse mechanisms under the banner of judicial cooperation, not only in order to seek unity behind the apparent diversity, namely by distinguishing a common procedural foundation as well as similar, or at least consistent powers of judges mutually assisting each other, but also to suggest punctual improvements of certain instruments by analogy with features of other mechanisms.

The thesis first strives to analyze diverse mechanisms of judicial cooperation between judges of European Union member states (e.g. European arrest warrant, recognition and enforcement of civil and criminal judgments, European investigation order, obtaining evidence in the European Judicial Area), as well as outside of the European Union (e.g. letters rogatory, service of process, obtaining evidence, extradition, recognition and enforcement of judgements) and interactions between judges and arbitrators (e.g. assistance of the State judge – “juge d’appui”, recognition and enforcement of arbitral awards). The second part of the doctoral thesis is focused on unveiling the unity of the notion of judicial cooperation by defining its criteria and its essence. Thus, behind the analysis of diverse mechanisms of cooperation between national legal orders with each other and with arbitral legal order, as well as in the European order by virtue of the principle of mutual recognition, and the concrete proposals of improvement of some of them, the book reveals a profound unity of the notion of judicial cooperation.

The unity first appears in the criteria of cooperation in so far as it is defined as procedural act, freely accomplished in one legal order upon the request of another legal order for the needs of judicial proceedings with a cross-border element, pending or terminated in the latter. The thesis explains cross-border element not in a usual, geographical sense, characterized by territorial borders, but in a broader one, marked by the limits of jurisdiction of a legal order (national, European or arbitral legal order). Furthermore, the thesis allows to trace a common basis for all types of mechanisms of judicial cooperation, which is reciprocity of relations between legal orders. In that respect, the thesis shows that such reciprocity is rooted in interactions between legal orders, even if it may be stronger between national legal orders belonging to the European Judicial area, as their relations are characterized by mutual trust. Finally, the unity is found in the purpose of judicial cooperation which manifests differently for requesting and requested legal order. For requesting legal order, the purpose of judicial cooperation is obvious : it is to obtain aid from another legal order where the requesting judge is not allowed to act either because of foreign judicial sovereignty (foreign legal order) or its incompetence (arbitral order). As to the requested judge, the purpose behind its action is less clear. The thesis shows that judicial cooperation is a way for the requested judge to contribute to a better management of cross-border litigation.

The study thus reveals that judicial cooperation transforms the core of judicial powers which are no longer reduced to adjudicating cases falling into the scope of  competence of the legal order to which judges belong but is henceforth enriched to include cooperative function(“office coopératif des juges”). The requested judge’s cooperation allows the requesting judge to surpass a cross-border element in the proceedings and thus contributes to a better administration of justice of the requesting legal order.

More details are available here, including free access to the table of contents and the first few pages of the book.

Practice shows that we’re far away from a perfect world of cooperation between state authorities in the field of cross-border service of process. This post is not about a judgment dealing with the matter (yet). It is what we call a ‘true story’, and serves as a kind of case study, to understand the variety of unprecedented situations with which courts may have to deal with.

The Facts

A Greek company filed an action against a foreign company, situated in an EU Member State. The claim, its translation, and an application pursuant to Article 4 of the Service Regulation were duly sent by the Transmitting to the Receiving Agency. The latter forwarded the claim to a process server for the purpose of serving the action to its recipient. Following fruitless efforts, the bailiff returned the documents to the court of the state of destination, stating that the respondent was not found in the given address. In particular, so his report, there was no indication that the company had its office there, and no person representing the company or any employee was found in the building. In accordance with domestic law on civil procedure, a hearing took place in camera on the request for service. The court stated that, following official information received, the respondent’s registered seat and postal address was in fact the same with the one stated in the claim form. As a result, and pursuant to Article 50(2) of the Code of Civil Procedure, the documents must be attached to the file, and service shall be deemed as duly made.

On the basis of the above conclusions, the court ordered that a certificate of service in accordance with Article 10 Service Regulation be issued, which should be delivered to the Transmitting Agency, with a true copy of the process server report attached.

The Receiving Agency abided by the order, and issued the above certificate, by making use of the standardized version in Greek. The person in charge filled in the following data: The date and address of service [12.1] in the language of the State of destination, and the method of service [12.2.1.3], i.e. pursuant to Article 50(2) of the Code of Civil Procedure, again in the language of the State of destination. The above person ticked also the box under 12.3, which demonstrates that the recipient was informed in writing that he may refuse to accept the document if it is not translated in a language he understands or the official language of the place of service. Finally, the place, name and capacity under which the above person drafted and signed the document were again written in the language of the state of destination. No court stamp is visible in the certificate.

What Would You Do if You Were the Greek Judge?

As I mentioned before, the case is still pending, and the claimant’s lawyer is seriously apprehended whether the documents aforementioned suffice for proving that service has taken place in accordance with the Service Regulation.

There are a number of critical points to be discussed in this case.

1. Is the Greek court entitled to return the certificate, because it was not completed in the languages accepted by the Hellenic Republic (Greek / English / French)? It is true that the receiving Agency made use of the standardized document in its Greek version; however, the crucial data were completed in the language of the State addressed, which is different from the languages declared by Greece).

2. Is the Greek court entitled to challenge the service of process, even if the document was served by a method prescribed by the internal law of the Member State addressed for the service of documents in domestic actions upon persons who are within its territory? According to Greek law, if the process server does not find anything or anyone related to the recipient in the given address, service by publication must follow.

3. Is the Greek court entitled to ask at this stage for a particular method of service, because the one chosen by the foreign court is violating the rights of the defendant? Article 7(1) of the Service Regulation does not give a clear answer in this respect.

4. Is the Greek court entitled to ask at this stage for further scrutiny by the Receiving Agency, so that the document is actually served to the defendant or one of its representatives? I fear that this won’t be accepted by the Receiving Agency, simply because service has taken place in accordance with its domestic rules.

5. If the Greek court considers that service was proper, because it was served by a method prescribed by the internal law of the Member State addressed: was it effected in sufficient time to enable the defendant to defend? I anticipate that the Greek court will consider that service was not timely, and therefore order a stay of proceedings.

Finally, an additional and purely domestic problem comes to the surface for the claimant. According to Greek law, and with respect to cases tried in the so called ordinary proceedings, service of process abroad has to be completed within 60 calendar days following filing of the claim. Failure to do so leads to dismissal of the claim as inadmissible. Filing and service has to be repeated. In the case at hand, the claimant passed already through this ordeal, because service of the first claim was not timely completed, i.e. not within the 60-days term. Now comes the second challenge and the claimant’s lawyer is at a loss…

One consequence of the Europeanisation of private international law is the need to examine and characterise certain phenomena, which have already been classified under national law, by reference to new EU Regulations. Family law, in particular, raises the question as to whether existing characterisation under national private international law regimes can be maintained. The German Federal Court (Bundesgerichtshof, BGH) had the opportunity to consider this issue in a judgment dated 18 March 2020 (BGH XII ZB 380/19). 

Background

A mahr is a marriage gift, or dower, under Islamic law promised from the groom to the bride, which usually becomes due upon divorce. It has different functions, such as to secure the financial situation of the bride upon marriage, as well as to protect her against an arbitrary divorce. Because the institution is unknown in Western legal systems, and because the specific legal arrangements of a mahr may differ between jurisdictions, its characterisation raises difficult problems.

Facts

In 2006, a Libyan national married a German national who had converted to Islam. At an Islamic ceremony in Germany, they signed a document stating – in German –: “dower coverage: Hajj”. A Hajj is an Islamic pilgrimage to the Kaaba in Mecca. In the following year, the couple also celebrated a civil marriage in Germany, the country of their common domicile.

In 2016, the couple divorced – again in Germany, where they were still living. The former wife then asked for the Hajj she had been promised at the Islamic ceremony. As the former husband declined, she sued him in a German court.

Holding

The case ended up before the German Federal Court, which ruled that the promise should be characterised as a “general effect of marriage” and that, therefore, the conflicts rule of Article 14 of the Introductory Law to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch – EGBGB) applied. According to this provision, German law governed the mahr, given the spouses’ common domicile in Germany.

The ruling is therefore consistent with previous case law of the Federal Court, which decided that a similar gift under Iranian law (a mehir) is to be characterised as a “general effect of marriage” within the meaning of Article 14 EGBGB (BGH NJW 2010, 1528). The present case, however, warrants special attention, because the Federal Court considered a number of alternative characterisations. Throughout the comprehensive judgment, the Court made some interesting comments about important acts of European Private International Law.

Contractual Promise?

The first characterisation that the Federal Court considered was contractual promise. As the mahr agreement was made before the Rome I Regulation (Article 28 Rome I) came into force and no law had been chosen, Article 28 EGBGBG, which corresponds to Art 4 of the European Convention on the law applicable to contractual obligations 1980 (ECC), would have applied. The Court highlighted that, as the party obliged to characteristic performance had his habitual residence in Germany, German law would had applied if Art 28 EGBGB governed the case. The result would therefore have been the same as that under Article 14 EGBGB, so that the Federal Court did not need to decide whether this characterisation was correct.

Matrimonial Property?

Second, the Federal Court analysed the mahr as matrimonial property and drew attention to the scholarly debate as to whether a dower fall within the Regulation on Matrimonial Property Regimes. Yet, it did not have to decide this question, as the Regulation applies only to spouses who marry, or who specify the law applicable to the matrimonial property regime, after 29 January 2019 (Art 69(3) Regulation on Matrimonial Property Regimes). Article 15 EGBGB, which would have therefore applied, uses the same connecting factors as Art 14 EGBGB, save for the possibility of a choice of law by the parties. As the parties had not chosen the applicable law of the promise, the result would again have been the same as that under Article 14 EGBGB: German law applies.

Maintenance Obligation?

Third, the Federal Court considered the mahr being characterised as a maintenance obligation under the Maintenance Regulation. The Court cited a CJEU decision for the proposition that a provision is ‘maintenance’ if it is designed to enable one spouse to provide for himself or herself, or if the needs and resources of each of the spouses are taken into consideration when determining its amount (Case C-220/95, Boogaard, margin no 22). While the Court opined that this would rarely be the case for a mahr, it considered that it did not need to decide the question. Since the spouse potentially entitled to the dower was domiciled in Germany, characterisation of the mahr as a maintenance claim would have resulted in the application of German law.

Consequence of Divorce?

Finally, the Federal Court also considered the obligation to deliver the mahr as a legal consequence of divorce. Article 17 EGBGB submits the property effects of divorce to the law applicable under the Rome III Regulation. Again, the Federal Court ducked the question of whether this characterisation is correct. It instead relied on the fact that, because of the common domicile of the parties, German law would be applicable according to Article 8(1)(a) Rome III.

Conclusion

Ultimately, this ruling may seem much ado about nothing. However, it serves as a reminder of the complex legal problems a mahr may create under European Private International Law, and provides a glimpse of the issues that the CJEU will have to deal with in the event of a request for a preliminary ruling, which will be inevitable should the precise characterisation require determination in a specific case. One only has to tweak the facts of the case slightly, for instance, by assuming that one of the spouses is domiciled abroad, to see the uncertainty about the characterisation breaking out into the open. The simple fact that the Federal Court examined four alternative characterisations is testimony to the difficulties, as well as the fascinating and complex challenges that legal institutions unfamiliar to us pose, not only for national, but also for European international private law.

The Court has delivered its ruling in Verein für Konsumenteninformation v Volkswagen AG (Case C-343/19) yesterday.

The court rules that a motor vehicle manufacturer whose unlawfully manipulated vehicles are resold in other Member States may be sued in the courts of those States, and that the damage suffered by the purchaser occurs in the Member State in which he purchases the vehicle for a price higher than its actual value.

See the Press Release of the Court here.

 

Toni Marzal (University of Glasgow) has posted From World Actor to Local Community: Territoriality and the Scope of Application of EU Law on SSRN.

The abstract reads:

This chapter offers a reconstruction of the case law of the Court of Justice of the European Union in relation to the territorial scope of application of EU law. Thus, it will focus on the manner in which the Court approaches the question of whether EU law should apply to cases that are at least partly connected to non-EU jurisdictions. This is a topic that has attracted significant interest in recent years from EU lawyers as well as experts in public and private international law, given in particular how EU law has been said to take the role of a ‘world actor’ in tackling problems that lack a clear geographical basis, such as the protection of personal data, environmental degradation or competition law. Under the most common understanding, the question of the territorial applicability of EU law is essentially a functional one: the scope of application of EU law will be that which is required by the effective pursuit of whatever goal is at stake, which may mean that in many instances it will apply ‘extraterritorially’. It will however be argued that this leaves aside an important dimension of the territorial applicability of EU law – its contribution to the construction of the EU legal system as a ‘local community’. Indeed, the EU legal system should not only be seen as an institutional tool in the promotion of certain objectives, but should also be understood as a space of inclusion and exclusion. It will not only be argued that this is a necessary dimension to EU law’s scope of application, but also that this dimension is already present in the case law. This will be seen through a study of three different lines of cases, where the Court deduces the applicability of EU law from the location of a legal relationship, the imperativeness of the particular EU legal regime, and the integrity of the EU legal system as a whole.

The paper is forthcoming in L. Azoulai (ed), European Union Law and Forms of Life. Madness or Malaise? (Hart Publishing, 2020).

In the last decade, the French law of diplomatic immunity has changed numerous times. This is not great for legal certainty, but it can get much worse if the different rules are applied in the same case. This should not be possible in a democratic State, but this is what happened in Commisimpex v. Republic of Congo.

Background

Commisimpex is a Congolese company which conducted serious construction work in Congo in the mid 1980s. It was headed by Lebanese businessman Mohsen Hojeij who was presented by the general press as a personal friend of the President of Congo, Denis Sassou-Nguesso, although Hojeij himself denies it. Commisimpex claimed that Congo did not pay some of the work and initiated arbitral proceedings which eventually led to two arbitral awards ordering Congo to pay various sums which total today over a billion euros. Since then, Commisimpex has been trying to enforce the awards over any assets of Congo that it may find.

To resist enforcement, Congo developed two strategies. The first was to generate a contradictory judgment which might bar the enforcement of the awards. The second was to challenge the enforceability of the waiver of its sovereign immunities.

A Timely Congolese Judgment

A few months after Commisimpex initiated enforcement proceedings of the arbitral awards in France (see below), the Congolese social security institution claimed that Commisimpex had failed to pay its contributions for decades and requested that insolvency proceedings be opened against the company. Two insolvency officials were appointed. French courts would later find that the first had represented the State of Congo, and the second was employed by the Presidency of the State of Congo.

In 2014, Congolese tax authorities also started to review the tax situation of Commisimpex, to eventually fid that Commisinpex owed over a billion euros of taxes to the Congolese State. Remarkably, the amount corresponded pretty much to the amounts of the arbitral awards.

At the end of 2014, the Congolese judge in charge of the liquidation issued an order whereby he ruled that a set off occurred between the claims resulting from the awards and the tax claims, and that the latter being higher than the former, a tax claim still remained. French courts would later find that Comminsimpex was neither informed about this particular aspect of the proceedings, and even less heard.

Congo then attempted to have the 2014 Congolese order declared enforceable in France. Its enforcement was denied by the Paris first instance court in 2015, and then by the Paris Court of appeal, on the ground of lack of impartiality of the insolvency officials and violation of the right to be heard.

The Evolving Law of Diplomatic Immunity in France

In a letter of 1993, the Republic of Congo had waived all jurisdiction and enforcement immunities in this case. A critical issue became whether the waiver covered assets protected by diplomatic immunity.

A New Rule of Customary International

In two cases of 2011 and 2013, the French Supreme Court for Criminal and Civil Matters (Cour de cassation) invented a rule of customary international law, allegedly grounded in the 2004 UN Convention on the Jurisdictional Immunities of States and their Property, providing that diplomatic immunity could not be waived by a general waiver of all sovereign immunities, whether of jurisdiction or enforcement, but that it could only be waived by a declaration which was both express and “special”, i.e. specifically mentioning diplomatic immunity.

Meanwhile, in the same year 2011, Commisimpex attached the bank accounts of the diplomatic mission of Congo and its delegation to UNESCO in Paris. French lower courts applied the new 2011 precedent of the Cour de cassation and set aside the attachements, as Congo has not expressly and specifically waived its diplomatic immunity.

A New Precedent

Commisimpex appealed to the Cour de cassation which, remarkably, overruled itself in a judgment of 13 May 2015 and held that customary international law only required an express waiver of diplomatic immunity. Indeed, that is all that the 1961 Vienna Convention on Diplomatic Relations ever required. The waiver of Congo did not mention diplomatic immunity and was thus not specific, but it was express. The Court allowed the appeal.

The case was thus sent back to the Paris Court of Appeal. In June 2016, the Paris Court of Appeal applied the new doctrine of the Cour de cassation and ruled that Commisimpex could attach the bank accounts of the Diplomatic Mission and UNESCO Delegation in Paris. Congo appealed to the Cour de cassation.

A New Law

However, the French Parliament got concerned that creditors of States could enforce too easily their awards (or judgments) in France and thus intervened in December 2016 to reinstate a requirement that diplomatic (and consular) immunities may only be waived by express and specific waivers (see today Article L. 111-1-2 and L. 111-1-3 of the French Code of Civil Enforcement Procedures). Of course, the new law could only apply to enforcement proceedings initated after its entry into force.

Two years later, the case came back before the Cour de cassation, which it seems, took very seriously the message sent by the Parliament that France should be more understanding with foreign states. In a judgment of 10 January 2018, the Cour de cassation ruled that, although the Cour of Appeal of Paris had perfectly applied the 2015 ruling, the law had changed, and a waiver of diplomatic immunity could only be enforced if express and specific. Of course, the Cour de cassation noted, the new law was not applicable to enforcement proceedings initiated 7 years earlier, but it still decided to apply the new requirements in the present case, because

it was absolutly necessary, in a field touching on the sovereignty of states and the preservation of their diplomatic representation, to treat like cases alike. Thus. the objective of legal consistency and certainly requires to come back to the previous case law [the 2011-2013 precedents] conforted by the new law.

And as if it was not enough, the Cour de cassation decided to close the case and thus, instead of sending it back to a lower court, to finally rule that the diplomatic monies attached in 2011 were protected by a diplomatic immunity which had not been waived.

Is this Constitutional? A New Rule of Customary International Law

The most remarkable part of the 2018 judgment was that the Cour de cassation decided to apply retroactively new rules in a case where it had taken an entirely different position a few years earlier. At first sight, that looks contrary to the most basic principles of the rule of law.

Commisimpex lawyers decided to create a situation to allow them to bring the matter before the French constitutional council. They attached again diplomatic funds. Lower courts ruled that they could not, as per the 2018 judgment of the Court de cassation. Commisimpex appealed to the Cour de cassation, and requested that the issue of the constitutionality of the retroactive application of the new rules (whether judge made or statutory) be put to the Contitutional Council.

In a judgment of 2 October 2019, the Cour de cassation ruled that there was no issue, and thus no need to petition the Constitutional Council, on the ground that the 2018 judgments had not applied the new law, but only Articles 22 and 25 of the 1961 Vienna Convention and customary international law.

The French reconstruction of customary international law continues.

Meanwhile, Commisimpex has attached Falcon 7X business jet belonging to the presidency of Congo. Is it covered by diplomatic immunity? Stay tuned.

On 7 July 2020, the Members of the Committee on Legal Affairs will vote on the provisional agreement resulting from the interinstitutional negotiations on representative actions for the protection of the collective interests of consumers. The text is available here.

Here are some points of interest (and a few on-the-spot comments).

1. The resulting document will be a directive not intended to replace the enforcement mechanisms contained in previous legal acts listed in Annex I, among which the GDPR.

2. The Directive will cover both domestic and crossborder infringements, in particular when consumers affected by an infringement live in one or several Member States other than the Member State where the infringing trader is established.

3. As announced in the Commission’s proposal (referred to here), the Directive should not affect the application of nor establish rules on private international law regarding jurisdiction, the recognition and enforcement of judgments or applicable law (NoA: how long have academics and the CJEU, AGs included, been warning about the PIL rules being utterly inadequate for collective redress? Apparently not enough).

4. Qualified entities should be allowed to bring representatives actions in the Member State where they have been designated as well as in another Member State.

5. When a qualified entity brings a representative action in another Member State than the one of its designation, that action should be considered a cross-border action.

6. When a qualified entity brings a representative action in the Member State where it is designated, the action is considered a domestic representative action even if that action is brought against a trader domiciled in another Member State or even if consumers from several Member States are represented within that action. (NoA: if I am understanding this correctly, the action against a trader domiciled in another Member State is domestic for the purposes of the Directive, although from a PIL perspective it is definitely not domestic).

7. Principle of origin: for the purpose of cross-border representative actions, qualified entities should comply with the same criteria across the Union. It should be for the designating Member State to ensure that the qualified entity designated for the purpose of cross-border representative actions fulfils the criteria, to assess whether it continues to comply with them and, if necessary, to revoke the designation of the qualified entity.

8. Legal standing: Member States should ensure that cross-border representative actions can be brought in their courts (or administrative authorities) by qualified entities designated for the purpose of such representative actions in another Member State.

9. Qualified entities from different Member States should be able to join forces within a single representative action in front of a single forum, subject to relevant rules on competent jurisdiction (NoA: usually who the claimant is has no impact on jurisdiction, so the caveat has to refer to something different. In any event, is this a lost opportunity to reflect on extended rules for related claims?).

10. The mutual recognition of the legal standing of qualified entities designated for the purpose of cross-border representative actions should be ensured

11. When bringing a representative action, the qualified entity should provide sufficient information on the consumers concerned by the action to the court or the administrative authority. The information should allow the court (or the administrative authority) to establish its jurisdiction and the applicable law.

12. Cooperation and exchange of information between qualified entities from different Member States have proven to be useful in addressing in particular cross-border infringements (NoA: has it?). There is a need for continuing and expanding the capacity-building and cooperation measures to a larger number of qualified entities across the Union in order to increase the us representative actions with cross-border implications.

13. The Commission should draw up a report, accompanied if appropriate by a relevant proposal, assessing whether cross-border representative actions could be best addressed at Union level by establishing an European Ombudsman for collective redress (NoA: not sure what his/her role would be).

Peer Zumbansen edited The Many Lives of Transnational Law – Critical Engagements with Jessup’s Bold Proposal, published by Cambridge University Press.

The blurb reads:

In 1956, ICJ judge Philip Jessup highlighted the gaps between private and public international law and the need to adapt the law to border-crossing problems. Today, sixty years later, we still ask what role transnational law can play in a deeply divided, post-colonial world, where multinationals hold more power and more assets than many nation states. In searching for suitable answers to pressing legal problems such as climate change law, security, poverty and inequality, questions of representation, enforcement, accountability and legitimacy become newly entangled. As public and private, domestic and international actors compete for regulatory authority, spaces for political legitimacy have become fragmented and the state’s exclusivist claim to be law’s harbinger and place of origin under attack. Against this background, transnational law emerges as a conceptual framework and method laboratory for a critical reflection on the forms, fora and processes of law making and law contestation today.

The individual contributions are authored by Stephen Minas, Christopher A. Whytock, Thomas Schultz, Niccolò Ridi, Karsten Nowrot, Gregory Shaffer, Carlos Coye, Francis Snyder, Zhouke Hu, Lili Ni, Florian Grisel, Bryan Horrigan, Shahla Ali, Paul Schiff Berman, Antoine Duval, Ivana Isailovic, A. Claire Cutler, Jothie Rajah, Natasha Affolder, Larry Catá Backer, Prabhakar Singh, Ralf Michaels and Vik Kanwar.

The book’s table of contents can be found here. For further information see here.

Ilaria Viarengo and Pietro Franzina have edited The EU Regulations on the Property Regimes of International Couples – A Commentary, published by Edward Elgar in its Elgar Commentaries in Private International Law series.

The publisher’s abstract reads as follows.

This article-by-article Commentary on EU Regulations 2016/1103 and 2016/1104 critically examines the uniform rules adopted by the EU to deal with the property relations of international couples, both married and in registered partnerships. Written by experts from a variety of European countries, it offers a comprehensive side-by-side discussion of the two Regulations to provide context and a deeper understanding of the issues of jurisdiction, applicable law and recognition of judgements covered.

The authors of the commentary are Giacomo Biagioni, Andrea Bonomi, Beatriz Campuzano Díaz, Janeen Carruthers, Sabine Corneloup, Gilles Cuniberti, Elena D’Alessandro, Pietro Franzina, Martin Gebauer, Christian Kohler, Silvia Marino, Cristina M. Mariottini, Dieter Martiny, Csongor I. Nagy, Jacopo Re, Carola Ricci, Andres Rodríguez Benot, Lidia Sandrini, Ilaria Viarengo and Patrick Wautelet.

More information available here.

The Presidency of the Council of the European Union and the European Parliament reached on 30 June 2020 a provisional agreement on the modernisation of Regulation 1206/2001 on the taking of evidence abroad, and Regulation 1393/2007 on the service of judicial and extra-judicial documents (see here and here for contributions appeared on this blog regarding the reform).

The provisional agreement now needs to be submitted for endorsement by Member States’ representatives.

The purpose of the amendments under discussion is, generally, to improve the efficiency and speed of cross-border judicial proceedings by taking advantage of digitalisation and the use of modern technology, and by these means advance access to justice and fair trial for the parties.

Changes include the mandatory use of an electronic decentralised IT system, composed of interconnected national IT systems, for the transmission of documents and requests between Member States. The new regulations will also task the Commission with the creation, maintenance and future development of a reference software which Member States can choose to apply as their back end system, instead of a nationally-developed IT system.

As to the service of documents, the envisaged new rules provide that documents can be served electronically and directly on an addressee with a known address in another Member State, when his or her express consent is given in advance. The service can be performed through qualified electronic registered delivery services or, under additional conditions, by e-mail.

The new rules also aim to promote the use of videoconferencing or other distance communication technology in the taking of evidence.

Before the judicial holiday, several decisions will be delivered regarding EU instruments on private international law.

The decision of the 1st Chamber (Bonichot, Safjan, Bay Larsen, Toader, Jääskinen) in C-343/19, Verein für Konsumenteninformation, regarding Article 7.2 of the Brussels I bis Regulation, is due on 9 July 2020. M. Safjan is the reporting judge; AG Campos’s Opinion was published on 4 April.

One week later the 1st Chamber will read the judgments in C-73/19, Movic e.a., C-80/19, E.E., and C-249/19, JE. C. Toader acts as reporting judge in C-73/19, on the meaning of “civil and commercial matters” in the Brussels I bis Regulation; see here AG Szpunar’s Opinion, of 23 April 2020. Judge Toader is the reporting judge as well in C-80/19, which addresses several aspects of the Succession Regulation; the Opinion by AG Campos, of 26 March 2020, has not yet been fully translated into English (here the French version; the original is in Spanish). C-249/19 benefited from AG Tanchev’s Opinion, also of 26 March 2020; the Court was asked to rule on the Rome III Regulation on the law applicable to divorce. R. Silva de Lapuerta is the reporting judge.

The same day, the judgment in C-253/19 (9th Chamber: Rodin, Jürimäe, Piçarra, with Jürimäe as reporting judge) will be delivered, addressing the COMI under the new Insolvency Regulation. AG Szpunar’s Opinion was published on 30 April 2020.

The Court’s activity resumes on 1 September 2020. Next date for a PIL judgment is September 3 (C-186/19, Supreme Site Services e.a.; see the Opinion by AG Oe here).

Iacyr de Aguilar Vieira and Gustavo Cerqueira have edited a volume on the CISG in the Americas (La Convention de Vienne en Amerique).

From the foreword of the book:

On the occasion of the Vienna Convention on Contracts for the International Sale of Goods’ 40th anniversary, its success can be evidenced by its influence in America. In fact, 19 out of the 93 member-States are found in this vast continent.

To celebrate its 40th anniversary, the Latin American section of the Société de législation comparée sought to present the Convention’s current state of application in different American countries, as well as to measure its influence on domestic sales laws.

As court decisions and scholarly writing multiply with the ratification of the Convention by American States, this presentation seeks to offer a better understanding of how the Convention is being applied and, through that, support the efforts for its uniform application. A comparative approach concludes the book. This initiative seeks not only to oppose the attempts that can be found in domestic cases to interpreting the Convention differently, but also, and on a more positive note, to promote the Convention as a model for the regulation of sales in America and Europe.

Concerning the more specifics private international law issues, the numerous analyses related to the applicability of the Convention and to the subsidiary application of national law offer very interesting insights into the conflict of laws systems of Contracting States in this part of the world. On this point, the contributions of G. Argerich (Argentina), F. Pignatta (Brazil), D. Rojas Tamoyo (Colombia), M. Paris Cruz (Costa Rica), R. A. Williams Cruz (Honduras), E. Hernández-Bretón and C. Madrid Martinez (Venezuela) will be particularly instructive.

Thus, this book is the perfect occasion to compare the Vienna Convention’s implementation in American States and to benefit from the view of American scholars on this universal instrument for the uniformization of sales of goods.

It is meant both for scholars and lawyers in the field of international commerce.

The table of contents can be downloaded here. More details are available here.