EAPIL blog

In accordance with its goal to be a pan-European forum for reflection on issues of private international law, the European Association of Private International Law is seeking to establish working groups which will reflect on selected topics of private international law and submit their conclusions for endorsement by the Association.

EAPIL Working Groups might be constituted to reflect on any topic of private international law, whether broad or specific, theoretical or practical. The goal of Working Groups is to publish their conclusions in a document which could take various forms (reports, draft legislation, principles, recommendations, position papers, etc.).

All EAPIL members are entitled either to join any established Working Group, or to follow the work of the Working Group by joining its Members Consultative Committee.

Finally, the Association invites all members to propose the constitution of Working Groups on any topic of interest. More information on the procedure for establishing Working Groups can be found here.

Project on the Feasibility of a European Private International Law Act

The first Working Group established by EAPIL will refect on the feasibility of a European PIL Act and is chaired by Professor T. Kadner Gaziano. A full description of the project is available on the Group’s page.

Other Contemplated Working Groups

The establishment of several other working groups is currently contemplated. Proposals will be submitted for approval to the Scientific Committee once an appropriate number of members has expressed interest to join them. Any interested member is invited to contact the responsible person for the relevant group.

Project on a future European Regulation on International Property Law

So far, International Property Law has not been a subject matter in the ongoing process of Europeanisation of Private International Law through Regulations. This does not mean that the European legislator has not yet touched property law. The Regulations on matrimonial property and on succession have certain overlaps with international property law which the CJEU is in the process of clarifying (see e.g. the famous Kubicka case). Rights in rem also play a role for the rules on exclusive jurisdiction (Article 24 nr. 1 Brussels I bis Regulation). Furthermore, numerous directives, especially in the realm of finance law, use the lex rei sitae as a connecting factor.

This fragmented picture and the fact that Member States’ autonomous rules on international property law are by far not uniform although most, if not all, still use the lex rei sitae principle as a starting point, call for a European Regulation on the law applicable to proprietary rights. The project is meant to be limited to tangible movable and immovable property, leaving out rights in intangibles (claims, intellectual property rights) and securities whether incorporated or unincorporated.

The group is still under formation. EAPIL Members who like to join it are invited to signal their interest to Prof. Dr. Eva-Maria Kieninger (Kieninger@jura.uni-wuerzburg.de).

Project on Interests in European Private International Law

The issue of interests is a topic of the highest practical importance, which is raised by the award of any sums of money. In cross-border relations, it is necessary to assess which law applies to them, whether at the adjudicatory stage when a court rules on a financial claim, or at the enforcement stage, when an enforcement authority is requested to enforce a foreign judgment. Yet, European Regulations of PIL are largely silent on the topic. The working group will aim at proposing either amendments to existing legislation or interpretations addressing these issues.

Members interested to join the working group or follow its work in the Members Consultative Committee are invited to contact Prof. Dr. Caroline Kleiner (caroline.kleiner@parisdescartres.fr).

Project on the Evidence Regulation

The Evidence Regulation is currently being recast. Unfortunately, the contemplated reform neglects the most important of its flaws, the need for liberalization of the cross-border taking of evidence in the European Union. The CJEU has underscored the backwardness of the Evidence Regulation by allowing courts of the Member States to ignore it and use directly their national procedures. The working group will aim at proposing a new ambitious framework liberalizing cross-border taking of evidence in the European Union.

Members interested to join the working group or follow its work in the Members Consultative Committee are invited to contact Prof. Dr. Gilles Cuniberti (gilles.cuniberti@uni.lu).

Gisela Rühl (Friedrich-Schiller-University Jena and Humboldt-University of Berlin) has posted Settlement of International Commercial Disputes Post-Brexit, or: United We Stand Taller on SSRN.

The abstract reads:

The European market for the settlement of international commercial disputes is currently dominated by London. According to official statistics, about 80% of the cases brought before the London Commercial Court involve at least one foreign party. And in about 50% of the cases both parties are foreign. Obviously, the London Commercial Court is a popular forum for the settlement of international commercial disputes. And, obviously, it has an international appeal that is – at least in Europe and at least thus far – second to none.The remaining EU Member States, however, are not sleeping. In fact, over the course of the last years the prospect of Brexit has induced some of them to take measures designed to make their civil justice systems more attractive for international commercial parties: Germany, for example, established two first instance, international commercial chambers at the Regional Courts in Frankfurt and Hamburg in 2018 which offer to conduct proceedings in English. France created an English language chambre internationale at the Paris Court of Appeal in March 2018 which complements and adds a second instance to the English language chamber at the Paris Commercial Court that has been operating since November 2010. The Netherlands inaugurated the English language Netherlands Commercial Court and the Netherlands Commercial Court of Appeal in January 2019. And other countries, notably Belgium and Switzerland are contemplating the establishment of one or more specialized courts to deal with international disputes. Quite clearly: the European market for international commercial litigation is on the move. And while some of the above mentioned chambers and courts were in the making before the UK decided to leave the EU in 2016, there can be little doubt that the prospect of Brexit has fuelled the development. The interesting question, however, is whether the recent trend to establish international commercial chambers and courts will actually yield any success? Will companies decide to come to the continent – rather than to London – to settle their disputes after Brexit? As a matter of principle, the odds are not too bad: After all the UK will lose its access to the European Judicial Area once Brexit becomes fully effective, namely when the transition period provided for in the Withdrawal Agreement expires. English court proceedings will then no longer benefit from the many European Regulations that ease the settlement of international disputes and judicial cooperation in cross-border civil matters. At least for companies which seek access to the European Judicial Area, Brexit will, therefore, make it less attractive to settle a dispute in London.The following chapter takes this observation as an occasion to explore the consequences of Brexit for the settlement of international commercial disputes in more detail. It argues that no court in the remaining Member State seems in a position to present itself as a serious alternative to the London Commercial Court. It is, therefore, suggested that the EU should step in and create a European Commercial Court. This Court would provide European companies with an international forum in the European Judicial Area after Brexit and would also attract disputes that would otherwise be settled before other international commercial courts or international arbitration tribunals.

The paper is forthcoming in Jörn Axel Kämmerer, Hans-Bernd Schäfer (eds), Brexit and the Law. An Interdisciplinary Study, Edward Elgar.

The European Parliament’s Legal Affairs Committee issued on 22 April 2020 a draft report with recommendations to the Commission on a Digital Services Act which, we believe, is of particular interest for private international law (PIL) specialists.

While the document mainly focuses on the approximation of Member States’ substantive laws in the field of digital services, it also includes interesting considerations on PIL.

Background 

In the context of its follow-up to the Digital Single Market (DSM) Strategy, the European Union’s main objective is to ensure the best possible access to the online world for Union citizens and businesses. It requires to adopt rules promoting free provision of digital services while, at the same time, safeguarding fair competition between economic operators and the highest standard of consumer protection as well as personal data protection. Numerous rules covering different aspects of digitalisation, including private-law issues (see for instance, Directive 2019/770 on B2C contracts for the supply of digital content and services and Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services), have already been adopted.

A quick look at the DSM Strategy acquis shows that the EU legislator has so far followed a sectorial approach. The e-commerce directive, pioneer in its time to enhance the emerging digitalisation in the field of services, has not been updated since its adoption in 2000. The text creates a common legal framework to ensure the free movement of “information society services”, i.e. economic activities which take place on-line, between Member States. It lays down an “internal market clause” in favour of service providers (also known as country of origin principle), as well as rules on electronic contracts, commercial communications and limited liability of intermediaries.

Today, a majority of experts agree that the liberal regime established by the directive appears outdated in the context of new digital services providers, such as social networks, collaborative economy platforms or online marketplaces (see the Google France case and the Glawischnig-Piesczek case decided by the Court of Justice). The scope of application of the directive, which rests inter alia on the notion of “provider of information society services”, is also widely questioned (see Elite Taxi Case and Airbnb).

Against this backdrop, the European Commission announced the future adoption of a Digital Services Act (DSA) to update the current horizontal regulatory framework. The proposal aims at strengthening the responsibility of online platforms and clarifying rules for the provision of online services.

Private International Law Issues

The treatment of PIL issues within the DSM Strategy is, until now, at best marginal. The European legislator has not said much on cross-border regulation of private-law relationships within the DSM acquis. In most cases, the secondary law limits itself to laying down that it “should be without prejudice to Union law concerning judicial cooperation in civil matters” (see Regulation 2018/302 on addressing unjustified geo-blocking, Article 1(6); Regulation 2019/1150, Article 1(5); Directive 2019/770, Recital 80).

We see this as a major oversight as the digital world is international by nature. First, the implementation of EU PIL instruments in the digital area is far from obvious. PIL is traditionally based on geographical location and connecting factors but online relationships are intrinsically “aterritorial”. Reconsidering EU PIL acquis – without necessarily reviewing it extensively – is essential (see recently Pedro de Miguel Asensio, Conflict of Laws and the Internet, Edward Elgar, 2020, announced here). Second, a coordinated implementation of EU substantive rules and PIL instruments is, in most cases, a prerequisite for the efficiency of the former.

Against this backdrop, the European Parliament draft recommendations provide for a meaningful set of considerations.

European Parliament Draft Recommendations

While the European Commission’s proposal is only expected in the last semester of 2020, the European Parliament (EP) has already started working on the future Digital Services Act (DSA). The EP’s Legal Affairs Committee released  draft recommendations aiming at “adapting commercial and civil law rules for commercial entities operating online” (2020/2019 (INL)). By doing so, the EP wishes to influence the content of the future DSA proposal but also ancillary regulation.

The draft report addresses different issues related to PIL including: (i) the role of EU PIL in ensuring an effective access for Union citizens and businesses to justice, (ii) the status of access rights to data under PIL, and (iii) the coordination between the scope of the future European digital services set of rules and PIL.

Assessment (i) Access to justice and PIL

The EP proceeds from the fact that contracts concluded by individuals or businesses with online service providers are generally pre-formulated standard contracts, which include exclusive choice of law and forum provisions. This contractual imbalance is likely to affect access to European justice for the co-contracting party, in particular when the service provider is established in a third country. The EP’s position on this issue is welcomed and coherent with the EU fundamental right to an effective judicial remedy (EU Charter of fundamental rights, Article 47; see also for a recent application under the GDPR, Article 78(1) and (2), and Article 79(1)).

It remains to be seen what concrete measures can be promoted in this field. Would it require to create a European forum necessitatis in digital services litigation? Would local courts be allowed, under certain conditions, to remove a jurisdiction clause in favour of a third country “imposed” by a digital services provider. These questions have to be read in connection with the mandatory nature of the forthcoming regulation (see infra (iii)) and perhaps also with the debate on the (non-)validity of a choice-of-court agreement, which aims at circumventing overriding mandatory provisions (from a French perspective, see Cass. Civ. 1re, 22 october 2008, Monster Cable, n°07-15.823).

(ii) Access rights to data and PIL

The second issue deals with PIL implications in the context of cross-border flows of data, closely linked to the provision of digital services. The draft report focuses on access rights to data, probably by reference to Article 15 of the GDPR. The main objective of this provision is to help individuals to understand why and how an operator is using their data. As, most of the time, the processing of data, as well as their transfer, are cross-border, PIL must be implemented. However, it is not always clear which PIL rules, among EU and national set of rules, are applicable, depending on the characterisation of the legal relationship concerned (see on this blog, Martina Mantovani, “Contractual Obligations as a Tool for International Transfers of Personal Data”). Moreover, due to the room for manoeuvre given to Member States by the GDPR for specific processing situations, the European data protection regime may lead to divergent solutions pursuant national laws. This may be detrimental to European individuals and can lead to regulatory competition and law shopping.

Against this backdrop, the EP asks for “clarification” but what does it mean?  The next step should be to increase legal certainty in the designation of the competent jurisdiction as well as of the applicable law in data protection litigation. This requires to review the weaknesses of the GDPR in this respect and start thinking about clear uniform PIL rules in the field. It will be a full-part legislative work, next to the future DSA.

(iii) Geographical scope of EU digital services law and PIL

Regarding the scope of the forthcoming DSA, the EP underlines the “importance of ensuring that the use of digital services in the Union is fully governed by Union law under the jurisdiction of Union courts”. Reference is made here to the mandatory nature of EU secondary provisions vis-à-visthird countries’ law.

This position, supporting the efficiency of EU law, is consistent with the approach taken by the European Court of Justice in the well-known Ingmar case. A similar statement is laid down in secondary law, for instance in the field consumer protection, in order to ensure a mandatory application of EU substantive rules (see Directive 2011/83 on consumer rights, Article 25). The same approach is now followed in some DSM instruments. They “should apply irrespective of the law otherwise applicable to a contract” – by definition, the law of a third country – (see Regulation 2019/1150, Recital 9 in fine; Regulation 2017/1128 on cross-border portability of online content services, Article 7(2) and Recital 25).

By contrast, the e-commerce directive is limited to the European market and does not apply to service providers established in third countries. This is the direct consequence of the internal market clause (Article 3), which can only benefit to European economic operators. However, this geographical limitation is outdated; many digital services providers are now established outside of the EU.

The efficiency of EU DSM substantive law depends on its ability to encompass the global dimension of trade, in particular when it comes to protect European values such as fair competition or the protection of the weaker party. To this end, EU PIL is a key ally.

Catherine Kessedjian (Emeritus Paris II University) and Valérie Pironon (University of Nantes) have published the second edition of Catherine Kessedjian’s manual on international commercial law.

The authors have provided the following abstract in English:

The book aims at speaking not only to students, but also to practitioners and specialists in the field. Therefore, the authors have been careful at keeping a balance between basic information and some cutting edge developments in areas where the law is evolving fast.

First, the book addresses sources of the law and how applicable law is determined. It makes clear that international commercial activities are regulated at all levels (multilateral, regional and national) but also by a-national norms that have taken an ever increasing role in the field, thereby recognizing that Non-State actors do have a role in establishing norms for their own activities (and perhaps even further). As far as conflict-of-laws is concerned, the book starts with the study of mandatory norms because they are the ones that really matter in a field where party autonomy is the centerpiece. Any practitioner negotiating a deal needs to ascertain the extend of the freedom her client enjoys so that to craft the contract in the most efficient way.

The second part of the book is devoted to the actors of international commercial activities. Companies are the first and foremost actors in a world where the States have withdrawn from many fields. Now this was true before the covid-19 disease suddenly broke into our lives. States are now back and it will be for the third edition to appraise how much they will stay as the main player in the future. Two topics are covered when dealing with State activities: investment (when States are on the receiving hand) and immunity (when States as an actor ask for some sort of special treatment).

The third part deals with activities themselves and cover not only the access to markets but also some of the most classic international business activities (sales, distribution, transport). It also deals with the most common contract provisions (confidentiality, bona fide and cooperation, force majeure, CSR etc.) and takes into consideration trade practices. A section is also devoted to the guarantees put in place for the proper accomplishment of the activities.

The fourth part is devoted to dispute resolution. The first chapter is the most original. It gives a roadmap to negotiators as to how to choose the best dispute resolution mechanism for the contract. The rest is more classic and deals with mediation, arbitration and dispute before national courts (essentially French and European Law).

Finally it must be noted that emphasis is placed on contemporary debates such as globalization, electronic commerce, ecological challenges, CSR, transnational group actions, etc.) without avoiding the most controversial ones.

More details, including a full table of contents, can be found here.

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

Beyond triggering global health crisis, the extremely rapid growth of COVID-19 pandemic has exacerbated significant disruptions for global order, as well as brought drastic effects on international commerce and trade. Interruptions in business transactions have become inevitable due to challenges in meeting contractual obligations, terminations and reliance on frustration or force majeure clauses. All these have given rise to considerable cross-border disputes and necessitated reasonable case management strategies.

Like other states the UK government has also taken several steps for fighting the spread of coronavirus and among other legislative measures recently adopted the Coronavirus Act 2020. The Act justifies giving extraordinary powers to the government in a broad spectrum of areas including the work of the courts and tribunals for navigating uncertainties and minimising potential risks for the judiciary. In the light of substantial significance of access to fair trial and administration of justice amid increasing coronavirus-related claims this post focusses on the implications of the outbreak for civil proceedings. While English courts would maintain ongoing or potential cases parties should expect the recent changes in procedural law and adapt new practices regarding filing the documents and attending the hearings.

Emergency Legislative Measures

On 19 March 2020, Lord Chief Justice delivered a message to the Civil and Family Courts about continuation of their work as a vital public service with a particular note that this would not be ‘business as usual’.  Following the nationwide lockdown that was officially declared across the UK on 23 March 2020 the Coronavirus Bill received Royal Assent on 25 March 2020 and became a Parliamentary Act. The key provisions affecting judicial proceedings are laid down in Sections 53-57 on expansion of video and audio technology by criminal and magistrates’ courts and public participation in live civil as well as criminal proceedings. As the Department of Health and Social Care has addressed these measures aim at keeping the courts open to the public, continuation of the proceedings without the need for the participants to attend in person and refraining delays in the administration of justice.

On the same day the HMCTS published an operational summary on avoiding physical hearings and arranging remote trials wherever possible, introduction of social distancing measures in courts and tribunals upon continuation of the ongoing proceedings. Since then there has been a daily summary of HMCTS operational position provided during the pandemic. With the purpose of consolidating the work of courts and tribunals into fewer buildings since 30 March 2020 there have been priority courts and tribunal buildings open to the public for essential face-to-face hearings, some staffed courts without being open to the public and temporarily suspended courts. The work of the courts and tribunals has been prioritised and divided into categories.

To further promote the use of technology by judiciary several pandemic-related updates were made to the Civil Procedure Rules. Practice Direction 51Y promotes audio and video hearings and open justice. It differentiates private hearings which can be recorded and accessed only in a manner directed by the court and public trials which are accessible by public and media representatives. It further states that the Direction ceases to have effect on the date on which the Coronavirus Act 2020 ceases to have effect according to Section 75 of that Act. Indeed, Section 89 determines the expiry date as the end of the 2 years’ period beginning with the day on which it is passed provided no alteration is made in this regard. Expecting audio and video hearings will still remain part of the procedure post-pandemic similar rules should be provided.

Practice Directions 51Z and 51ZA related to stay of possession proceedings and extension of time limits have been inserted into the CPR. Aiming at delaying possession proceedings, PD 51Z provides that they are stayed for a period of 90 days from 27 March 2020. The rules will cease to apply on 30 October 2020 which might not be reasonable taking into account the start date of the stay and its duration. If the rules apply only to those possession proceedings that have already been brought under CPR Part 55 and seeking to enforce an order for possession, would it be reasonable to set the expiry date of the PD as 30 October 2020? Put differently would the rules cover those claims that are brought between 27 March 2020 and 30 October 2020? Presumably yes, in spite of the current text of the direction lacks a clear indication.

PD 51ZA on the other hand enables the parties to agree an extension up to 56 days without formally notifying the court (rather than the current 28 days). Given that it has been agreed by the court any extension of more than 56 days is also possible. Similar to PD 51Z this Direction also ceases to have effect on 30 October 2020. Even if the Coronavirus Act is still in force for the initially determined two years’ period any extension between 30 October 2020 and 25 March 2022 would not be permitted which might bring controversies.

It should be emphasized that remote hearings and use of technology at trial is not entirely novel. Long before the pandemic and emergency act, English judges have already had wide discretion to hold the hearings and receive evidence by phone or other means of direct oral communication in civil proceedings. Video conferencing and telephone hearings in civil proceedings were introduced by the Access to Justice Act 1999 on the basis of Lord Woolf’s report reviewing civil justice system and discretionary powers of the judges to provide flexible, effective, less costly and less time-consuming litigation. Section 3.1(2) of the CPR determines case management powers of the judges and relevant procedure for telephone hearings and video conferencing is presented in Sections 6 and 7 of Practice Direction 23. The CPR also contains judicial guidance on the use of video conferencing in the civil courts (Annex 3 to the Practice Direction 29.1, which was referred by Barling J in Haider v Syed [2013] EWHC 4079 (Ch)).

It is also worth to recall Practice Direction 51V here which has established “the Video Hearings Pilot Scheme” running between 2 March 2020 and 30 November 2020. Regardless of its limited application only to the procedure setting aside default judgments by the court via an internet-enabled video link (“a video hearing”), together with the outcomes of the recent changes and gained experience they can contribute building a solid basis and practice for future proceedings.

Thus, notwithstanding familiarity with the use of technology in civil proceedings prior to the pandemic and Coronavirus Act, it was applied only to partial extent in relation to the receipt of the evidence from witnesses abroad and in person hearings have been encouraged as a traditional mode of conduct. Upon a sudden reversal of the circumstances face-to-face hearings are neither safe nor practically possible which endorses fully remote hearings. In his message on 19 March, Lord Chief Justice delivered that the procedural rules have already enabled flexible use of the telephone and video hearings by the civil and family courts, however, there might still be legal impediments. Therefore, the HMCTS is expanding availability of diverse technological means including phones, video facilities and Skype. As of the latest updates, besides Skype, Cloud Video Platform (CVP) and BT MeetMe have started to be used in some civil and family hearings.

In response to the COVID-19, the English Commercial Court had its very first fully remote hearing in the case National Bank of Kazakhstan the Republic of Kazakhstan v The Bank of New York Mellon SA/NV London & Ors [2020] EWHC 916 (Comm) on 19 March 2020. The virtual trial involving participants and witnesses from different jurisdictions lasted for four days, publicly accessible livestreaming and daily transcripts were provided in line with the legislation. Mr Justice Teare confirmed that the default position is to avoid adjournments where it is possible and in this regard parties’ cooperation and flexibility are extremely valuable.

As stated, “The courts exist to resolve disputes and, as I noted this morning, the guidance given by the Lord Chief Justice is very clear. The default position now, in all jurisdictions, must be that hearings should be conducted with one, more than one, or all participants attending remotely…” Such a policy aims at prevention of uncertainties arising out of the cases adjourned together with the filed ones which would have been waiting for the trials and getting hardly manageable.

The same approach was followed by the High Court in the case Re One Blackfriars Ltd, Hyde v. Nygate [2020] EWHC 845(Ch) where Mr John Kimbell QC refused the application of the claimants to adjourn, instead ordered the parties to prepare for trial. As commented, “The message is that as many hearings as possible should continue and they should do so remotely as long as that can be done safely”.

Impacts on the Procedural Landscape

Advantages of technological development are evident owing to cost-effectiveness and time friendliness of the remote hearings.  It not only enables participation of the parties or witnesses who are not able to travel within or outside places of their residence but also avoids delays and unnecessary costs except those resulting from the use of technology.

Nevertheless, there are still many issues that might arise and become hurdles for the operation of the proceedings. One issue is related to the fact that not everybody would be able to apply software and cope with the technological means. Although different guidance notes on how to join telephone and video hearings have been provided this does not prevent issues arising from impossibility of using technology by some users due to their unawareness, incapacities or physical conditions. That necessitates sensitivity and presumably creativity for seeking further options. Mr Justice MacDonald highlighted the “Press Here Stupid” guidance as known in the IT circles and asserted that, besides the parties the judiciary also contains a cohort of judges who may not use the software or lack necessary equipment for the operation of a remote hearing.

The HMCTS has provided a local helpline for technical support to join an audio or video hearing. In this regard probably the SIAC or LMAA experience could also be applied and trainings of the remote technology specialists and staff could be designated.

Unpresented parties such as homeless, chaotic due to alcohol or drug use or having mental health issues may also have similar difficulties to attend proceedings remotely by video or telephone. Likewise, not all the participants might have suitable facilities, hard or software utilities.

Another issue arising out of the remote hearings is related to the potential risks for privacy of the parties, as well as judges. The Protocol dated to 20 March 2020 (slightly revised on 26 March 2020) regarding remote hearings considered the communication platforms as non-exhaustive which would enable parties and the court to negotiate in this regard. Yet, confidentiality and privacy of the hearings remain under the risk of detriment. Likewise, backlogs, loss of network and cut-offs in connection are irresistible obstacles for the process. These necessitate extra expenses on technology platform licencing, data protection and more effective equipments for remote hearings.

Different jurisdictions might have varying approaches towards the matter. Section 53 the Coronavirus Act 2020 determines that recording a broadcast from the court or transmission of the proceeding materials by the participants of the live hearings shall count for an offence. By Schedule 25, the Act further inserted special provisions on the use of live video or audio links, public participation and offences of recording to the Courts Act 2003 (Section 85A-85D) and Tribunals, Courts and Enforcement Act 2007 (Section 29ZA-29ZD).

As it had already been presented in section 32 of the Crime and Courts Act 2013, private hearings shall be recorded in a manner directed by the court and the court may decide the hearing to be broadcasted and recorded in a wholly audio or video manner. The recordings might be accessed by the application of any person with the consent of the court, otherwise making or attempting to make any unauthorised recording or transmission of an image or sound during in relation to the broadcast might bring an offence of a person. Except making or use of sound recordings for purposes of official transcripts of proceedings, such unauthorised recordings might bring a contempt of a court in accordance with Section 9 of the Contempt of Court Act 1981.

Regardless of these provisions nothing can guarantee that there will not be any unauthorized recording of the parties or judges or social media posts. Relevant to this, copyright status of the live stream is not entirely clear. This was also raised in National Bank of Kazakhstan case and can be found in the transcript of the second day of the remote hearings. Presumably the court owns copyright since any operation regarding the recordings or streaming needs to get authorization by that court. It would be necessary to get parties’ consent prior to the actual hearings potentially by a particular protocol while filing documents electronically.

Some Thoughts on the Future Perspective

The new way of the hearings will hardly remove the traditional charisma of the courts and in person trials. On the other hand, remote hearings might hardly be possible in complex cases containing mass documentations, third parties and cross-examination of many witnesses. Still, digitisation will presumably continue even after the crisis ends.

In this regard, encompassing actions and a solid strategy are crucial for fixing the discussed problems and achieving constant benefits of technology. Even though implementation of a new initiative would most probably take longer amid timely urgency of the matter lessons could be learned from the status quo as a testing stage, a reasonable action plan could be established and applied post-crisis to achieve long-term effectiveness.

The intense use of technology at trials will advance the already existing fundamental principle of open justice in judiciary even after the crisis. While taking new initiatives judiciary might consider benefits that have already been offered by the ODR procedures for facilitating settlement and resolution of the disputes. Besides creative use of technology, cooperation of the parties with the court and compromise to narrow the disputes would be encouraged.

Along with the legislative measures taken within the borders, a global mechanism providing guidelines on remote hearings and accessible by the states would be useful for certainty and uniform standards at an international level. In this regard, the arbitration community (e.g. ICC, SIAC, ICSID) has been quite rapid in drafting case management updates and guidance documents for minimizing the impact of the COVID-19.

Apart from coronavirus guidelines prepared by various arbitration organizations (e.g. ICC, SIAC), another step in this regard has been the recent Seoul Protocol on Video Conferencing in International Arbitration achieved by Korean Commercial Arbitration Board (KCAB). While looking for innovations particular attention should be placed on the European practice. Videoconferencing has been a widely used tool in Europe both at national and regional levels on the basis of different legal frameworks including the EU regulations and protocols. “Videoconferencing” project has become an integral part of the European e-Justice action plan and the Council and Commission regularly collect and publish good practice and examples of the Member States. These might be helpful while preparing a long-term action plan notwithstanding withdrawal of the United Kingdom from the Union.

Last but not least, the quote of the ancient Greek poet, Euripides is worth to recall here: “Nothing has more strength than dire necessity”. Although the pandemic has brought enormous impacts on the justice systems and resulted in significant uncertainties in the proceedings every cloud has a silver lining. As many others the UK government has also taken serious measures to combat the crisis and reduce its negative effects on judiciary. However, numerous challenges at the testing stage have been eye-openers for the government to gain more insight of the national, regional or international systems, generate more innovative and creative solutions and develop a strategic action plan for the advanced use of technology at trials. These will most likely lead to inevitable revisions of the CPR rules and related statutes in the near future.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Article 46 of the Italian Decree-Law of 17 March 2020

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

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

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

A mandatory rule providing a minimum standard of protection for employees

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

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

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

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

An overriding mandatory provision?

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

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

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

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

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

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

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

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

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

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

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

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

An overriding mandatory rule of the State of performance of the obligations?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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. 

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.

 

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.

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.

Tiago Andreotti is the author of Dispute Resolution in Transnational Securities Transactions, a monograph published by Hart.

The Blurb reads:

This book explores the transnational legal infrastructure for dispute resolution in transnational securities transactions. It discusses the role of law and dispute resolution in securities transactions, the types of disputes arising from them, and the institutional and legal aspects of dispute resolution, both generally and regarding aggregate litigation. It illustrates different dispute resolution systems and aggregate litigation methods, and examines the legal issues of dispute resolution arising from transnational securities transactions. In addition, the book proposes two systems of dispute resolution for transnational securities transactions depending on the type of dispute: collective redress through arbitration and a network of alternative dispute resolution systems.

More information can be found here.

On 6 April 2020, the High Court of England and Wales handed down its judgment in the VW NOx Emissions Group Litigation. Besides many points of interest for owners of VW cars, it contains a new and rather unexpected development of EU private international law. In effect, the judgment significantly increases the role of administrative rulings in civil cross-border cases.

Background

The German Federal Motor Vehicle Authority (Kraftfahrzeugbundesamt) had written letters in 2015 regarding “defeat software”, by which VW vehicles recognised when they were being tested for compliance with emissions standards and consequently lowered performance. The letters were addressed to VW and demanded the removal of the software.

Although these administrative measures have prima facie no connection to the private law dispute pending before the High Court, Waksman J considered that he was bound by them (margin Nos 303-418). His main argument was by reference to the Framework Directive, which harmonises car type-approval in the EU (margin No 379). The German Federal Motor Vehicle Authority is the competent authority under the Directive for VW.

Binding Nature of Administrative Fact-Findings in Civil Proceedings

A critical point is that the letters did not contain any approval, but merely demanded the removal of certain software. Moreover, any determination that the software was illegal would be a matter of fact, and would not affect any order itself. It remains therefore questionable whether a court would be bound by this statement. Indeed, even German courts continue to disagree as to the statements’ effect in civil litigation.

Waksman J nevertheless thought to be bound by the letters for the following reasons (margin No 377):

No other approval authority [than the German authority] could make such an order [to remove the defeat software]. It would be very odd if Member States other than that in which the measures were ordered were not bound, so that authorities in those other Member States were left to decide what to do about it. This negates the objective of total harmonisation set out in Article 1 of the Framework Directive. It would enable a manufacturer in private proceedings in another Member State to argue that it was not in fact bound to take the measures ordered by the relevant approval authority because that authority got it wrong. But the manufacturer could only be prevented from making that argument if the order of the relevant approval authority was in fact binding throughout the EU.

Applicable Law to Binding Nature

In Waksman J’s view, the question regarding which orders are binding fell to be determined under local law which, in the case before him, was German law (margin No 380). As such, the orders were to be final and subject to appeal (id.). Their challenge would also be governed by German law according to the “local remedies rule” (margin No 383).

Duty of Sincere Cooperation

To buttress his position, Waksman J pointed to the duty of sincere cooperation under Article 4(3) of the Treaty on European Union (margin no 384). This would oblige the UK to follow this principle and grant mutual recognition to decisions under the harmonised approval regime until the end of the transition period, which is set to expire on 31 December 2020 (margin no 386). In his view, the duty of sincere cooperation implies a “principle of deference”, which would inhibit courts from second-guess the findings of another Member State’s authorities (margin nos 387-388). If it were open to courts to challenge the statements of the competent authority, this would run contrary the principle of full effectiveness (effet utile) of EU law (margin No 389).

Competition Law Analogy

Waksman J further drew an analogy with EU competition law (margin Nos 397-409), under which regulatory decisions by the Commission are binding on courts in civil proceedings (see Art 16(1) Regulation 1/2003). The fact that the letters in question were issued by a national authority and not by the Commission did not matter, because the German authority would have exclusive jurisdiction under the harmonised Framework (margin No 397).

Conflict-of-Laws Principles

Finally, Waksman J pointed out that, even if his analysis of EU law were incorrect, he would still be bound by the German authority’s findings under conflict-of-laws principles. The reason he gave for this view is extremely terse (margin No 419):

… even if the KBA decision did not bind directly as a matter of EU law, then, either as a matter of EU conflicts principles, or as a matter of English law, the question of its binding effect here must be decided by reference to German law being the local law of the KBA.

Assessment

The judgment is a bold and audacious leap forward. The CJEU has so far ruled that courts must take administrative decisions from other Member States into account (see CJEU, Land Oberösterreich v Čez). Furthermore, the Court has decided that courts cannot ignore legal situations created in other Member States  (see CJEU, Garcia Avello). But it has not considered fact-findings in administrative decisions to be binding in cross-border civil litigation. The position under competition law is different, as there is no provision comparable to Article 16(1) of Regulation 1/2003 in the Framework Directive for car type approvals.

There are strong reasons to give administrative rulings a more prominent role in civil law proceedings (see Lehmann, Regulation, Global Governance and Private International Law: Squaring the Triangle). The judgment goes very far in recognising administrative fact-findings as conclusive for private disputes. This raises a number of questions, Which findings are binding – only those that are relevant for the order, or also others? What if the authority had found that VW had not installed “defeat” software; would that also be binding on a foreign court? What happens if the administrative decision is withdrawn or annulled in court?

Irrespective of these doubts, one must welcome the High Court’s decision. If it were followed across the EU, contradictory rulings on civil liability for the violation of regulatory law could largely be avoided. In this sense, the judgment could help deeper harmonisation in the Single Market. It forcefully demonstrates that British courts still can make a signification contribution to European law despite Brexit.

— Many thanks to Marion Ho-Dac and Amy Held for their contributions to this post.

The author of this post is Eduardo Álvarez-Armas, Brunel University London and Université Catholique de Louvain.

As announced in this blog, Anne Peters, Sabine Gless, Chris Thomale, and Marc-Philippe Weller have recently published an interesting and topical paper entitled Business and Human Rights: Making the Legally Binding Instrument Work in Public, Private and Criminal Law.

The paper, a must-read for anyone interested in the Business & Human Rights field, is an enlightening assessment of several issues and recent developments in the area, and very valuable in its transversal approach to its themes, from the standpoint of several different branches of law.

However, the point the paper makes on the determination of the law applicable to torts arising from human rights violations before EU Member-State courts is open for discussion.

In this respect, the position sustained in the paper basically interprets Articles 4(1) and (3) of the Rome II Regulation in a manner that “replicates”, in respect of torts stemming out of a violation of human rights, what has been legislatively enacted in respect of environmental torts in Article 7 of the same Regulation: the enshrinement of the theory of ubiquity (with differences/different rationale with respect to Article 7(2) of the Brussels I bis Regulation, but still the theory of ubiquity, nevertheless), assorted with victim’s choice.

The following are some difficulties encountered by the said interpretative proposal.

The effet utile of Article 7

If Articles 4(1) and (3) could be interpreted the way suggested in the paper, what would be the effet utile of Article 7 then? Surely, the arguments put forward in respect of the interpretation of Articles 4(1) and (3) as regards human-rights violations also cover environmental torts, and therefore, there would have been no need to enact Article 7 to begin with (a provision which was very controversial during the Rome II legislative process).

The structure of Article 4 Rome II

As Article 4(3) is an escape clause, Articles 4(1) and (3) are not placed in an alternative/elective position, but are exclusive from each other. If Article 4(3) applies, then Article 4(1) does not (see notably Recital 18 of the Rome II Regulation). Human-rights-violation victims may try to plead Article 4(3) (a closer connection to another legal system) as a “getaway” from Article 4(1) if they believe that their circumstances allow them to do so. However, they cannot plead that they have a choice as such in choice-of-law terms between Articles 4(1) and (3). Having a free choice of applicable law in one´s hands (as environmental victims do in Article 7) is not the same as having to contend and prove a manifestly closer connection, as Article 4(3) would require.

The points put forward on legal arbitrage and race to the bottom in Prof. Weller’s blog reply to my first brief comment are sensible, and they sustain conceiving human-rights violations in supply chains as “complex torts” (“délits complexes”, “distantdeliktze”) where the action/omission takes place in the parent company’s headquarters and the result materializes in the “host country”. Therefore, as suggested, they may potentially sustain attempting to resort to Article 4(3) to plead for the closer connection to the law of the headquarters of the parent company (provided that evidence allows for it), but they do not seem to sustain an “ubiquity + choice by the victim” construction.

Indeed, I largely share Prof. Weller’s arguments on legal arbitrage and race to the bottom in respect of environmental torts (as a preview of an English monograph coming in 2021 in Hart’s Studies in Private International Law, see E. Álvarez Armas, “Contentieux du droit international privé pour responsabilité environnementale devant le juge européen : la détermination du droit applicable comme outil de gouvernance globale environnementale”, Annales de Droit de Louvain, Vol. 77-1/2017, pp. 63-87; and E. Álvarez Armas, “Daños al medioambiente y Derecho Internacional Privado Europeo: ¿Quid de la determinación de la ley aplicable como herramienta de gobernanza global medioambiental?”, Anuario Español de Derecho Internacional Privado, t. XVIII/2018, pp. 193–225). However, the core difference is that Art. 7, as it stands nowadays, structurally allows for these ideas, while Articles 4(1) and (3) do not.

The ratio legis of Article 4 Rome II

If the rationale of Article 4 of the Rome II Regulation was the protection of victims, then, as Articles 4(1) and (3) are general provisions, nothing would hinder any other victim of torts not specifically covered by “special” provisions(Articles 5 and following) from benefiting from the same construction. This would significantly hinder the foreseeability of the applicable law.

However, the policy rationale of Article 4, as the main provision in the Regulation, is not the protection of victims, but “a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage” and “the foreseeability of court decisions”, as explained by Recital 16 of the Rome II Regulation. More specifically:

[a] connection with the country where the direct damage occurred (lex loci damni) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability.

These ideas can be tracked back to the explanatory memorandum to the Rome II Proposal, where the EU Commission repeatedly refers to “foreseeability” and “certainty” in the determination of the applicable law, explicitly rejects the theory of ubiquity as a potential general solution to be enshrined in the Regulation’s main rule (p. 11 – penultimate paragraph) and concludes (pp. 11-12) that

[t]he rule also reflects the need to strike a reasonable balance between the various interests at stake. The Commission has not adopted the principle of favouring the victim as a basic rule, which would give the victim the option of choosing the law most favourable to him. It considers that this solution would go beyond the victim’s legitimate expectations and would reintroduce uncertainty in the law, contrary to the general objective of the proposed Regulation. The solution in Article [4] is therefore a compromise between the two extreme solutions of applying the law of the place where the event giving rise to the damage occurs and giving the victim the option.

Precisely, as an exception, the explicit ratio legis of Article 7 Rome II (per Recital 25) is not to protect, but even to favour the victim (favor laesi) by allowing her the prerogative of choosing the applicable law.

Overall, the arguments put forward in the paper may sustain de lege ferenda that an Art. 7 bis be added to Rome II, enshrining the theory of ubiquity and victim’s choice in respect of torts arising from the violation of human rights. However, the current text of the Regulation does not seem to comfort the paper´s interpretative proposal.

Anatol Dutta and Wolfgang Wurmnest edited a book on European Private International Law and its ramifications with treaties signed by EU-Member States with third countries. The publication focuses on inheritance matters, i.e. Regulation (EU) No 650/2012 on matters of succession.

The national reports prepared feature Austria, Belgium, Croatia, The Czech Republic, Finland, Sweden, France, Germany and Italy from the EU. Reports from Bosnia and Herzegovina, Serbia, North Macedonia and Montenegro, Iran, Switzerland and Turkey, cover some non-EU jurisdictions. The third and last part of the publication features articles from the editors: Prof. Dutta approaches the issue from the perspective of the European Union, whereas Prof. Wurmnest offers a Comparative Report and Policy Perspectives.

The compilation of treaties listed in the Annex, presented in English translation, is undoubtedly giving added value to the book.

The work done by editors and authors, and the future plans of the endeavor, namely to cover wider aspects of European Private International Law, deserves our gratitude for providing us with very interesting material in the field.

More information on the publication is available here.