Agrégateur de flux

Applications are now open for three- to six-month legal internships at our Permanent Bureau in The Hague, for the period from July to December 2021.

Interns work with our legal teams in the areas of Family and Child Protection Law, Legal Cooperation, Dispute Resolution, Commercial and Financial Law. It’s a great way to gain practical experience, deepen your knowledge of private international law, and to understand how the HCCH functions.

Due to the current global situation and the associated travel limitations and restrictions, the Permanent Bureau of the HCCH may consider the possibility that internships be carried out remotely. Interns may also be eligible for a monthly stipend.

We encourage you to share this opportunity with law students and graduates within your networks.

Applications should be submitted by 2 April 2021. For more information, please visit the Internships section of the HCCH website.

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

The transdisciplinary research project on  gender and private international law, which held its kickoff meeting in November 2019 followed by a reading group in Hamburg, will now hold its (postponed) big workshop on May 6-7, 2021. Over the past two years we have worked to create a transdisciplinary field of study at the intersection of feminist and gender studies and private international law. The workshop will establish cross-teaching between disciplines. It will consist of discussion groups covering the pressing topics of transnational surrogacy, the interaction between Western and Islamic family law, and the transnational regulation of queer families. Cyra Choudhury (Florida International University), Susanne Gössl (Kiel), Vanja Hamzi? (SOAS London), Elisabeth Holzleithner (Vienna), and Nadjma Yassari (MPI Hamburg) have agreed to be the convenors.

If you are interested in joining us in May, please send your application by April 2, 2021 at gender@mpipriv.de. You can find the full Call for Applications here:.  For more information about the project, please visithttps://www.mpipriv.de/gender.https://www.mpipriv.de/michaels

Please don’t hesitate to contact us at gender@mpipriv.de if you have any further questions.

We look forward to seeing you at the workshop!

Ivana Isailovi? (University of Amsterdam) & Ralf Michaels (MPI Hamburg)

L’avocat général Hogan propose à la Cour de déclarer que, même si l’Union a signé la convention d’Istanbul, le Conseil peut attendre, sans toutefois y être obligé, le commun accord de tous les États membres à être liés par cette convention avant de décider si l’Union conclura la convention et quelle sera la portée de cette conclusion

On 5 February 2021, a seminar entitled ‘The Netherlands, a forum conveniens for collective redress?’ was organised by the Amsterdam, Maastricht and Tilburg Universities, together with the Open University. A brief account of the seminar will appear in the Dutch Journal on PIL, NIPR. Experts addressed procedural and private international law features in European and particularly Dutch mass claims.

One panel discussed PIL instruments needing rules on collective actions and settlements as featured in an earlier post on this blog. Another panel reviewed legal standing under the Directive on representative actions in the cross-border context (Directive 2020/1828) and was moderated by Ianika Tzankova (hereinafter, IT).

Paulien van den Grinten (PG) from the Dutch Ministry of Security and Justice, Axel Halfmeier (AH) from Leuphana University and Vincent Smith (VS) from BIICL participated in the panel discussion. Below follows a shortened record of their exchange.

Introduction

IT: The Dutch approach to certification or admissibility in collective redress comprises two distinct questions:

1. Who has standing to sue? The answer is: In general, designated and ad hoc entities that meet strict criteria (stricter perhaps than some of the criteria that the designated entities need to meet under the Directive in terms of governance, conflict of interest and financial capabilities); and
2. Is the entity admissible? Note that both ad hoc established and designated entities are subject to the test that relates to their ‘admissibility’ in relation to the particular matter.

Since ad hoc entities play an important role in collective redress in the Netherlands also in the international context the question is, how the new Directive will impact the activities of these entities. One could think of several points that arise:

– When could Dutch ad hoc established and certified organisations be acknowledged before the courts of other Member State (MS)?

– The Dutch admissibility test seems to be more onerous than the Directive’s requirements. Will that impact the admissibility of foreign designated entities in the Netherlands?

– Will judgments in collective redress obtained by Dutch ad hoc established and court approved entities be recognised abroad?

Ad hoc Entities

IT: A central role in the Directive is given to so-called ‘qualified entities’. Perhaps we should first explain what ‘cross border’ and ‘designated entities’ mean in the context of the Directive…What is a ‘cross border action’ under the Directive? And what is a ‘designated entity’?

PG: Designated entity in the Directive refers both to entities designated in advance to be placed on the list and to the entities designated via acceptance by the court in a specific collective action.

AH: Cross-border action is defined in Article 3(7) Directive 2020/1828 and has nothing to do with other facts of the case. It is defined as a situation where a qualified entity sues in a MS that is not the MS in which that entity has been designated. For example, if a German entity files in the Netherlands against a Dutch company in the interest of Dutch consumers, this is a ‘cross-border action’.

IT: Apparently there was little support at EU level to incorporate the Dutch model of collective redress, where ad hoc entities play an important role, including in collective matters with an international dimension (Trafigura, Petrobras, VW, Salesforce, Shell, Fortis, Converium etc). The philosophy was to follow in that respect the Injunctions Directive, where only ‘designated entities’ placed on a list were given a role in cross border matters. What do you think of that approach?

VS: One of the major issues with this would be under the Brussels Ibis Regulation. If a national court (e.g. in Amsterdam) appoints an ad hoc entity then, under Brussels Ibis, although the judgment of the Dutch court is supposed to be recognised in all other MSs (and if there is no equivalent procedure, a MS has to provide one), judgments can be refused recognition on public policy grounds. So, a foreign judge could refuse to give full effect to the Dutch judgment, because the ad hoc entity (stichting) was not properly representative of the (international) class, and thus limit recognition (for example), for only Dutch residents were bound by the action, and not those in his forum State. The Directive avoids this by requiring recognition, but only for prequalified entities and only (outside the entity’s home State) on an opt-in basis.

PG: If the concept of recognition and enforcement under Brussels Ibis would be changed and become stricter due to the concept of a cross-border action under the Directive, that would have wide implications. This was surely not envisaged by the European legislator. The aim of limiting cross-border representative actions to actions started by entities placed on a list designated in advance was to prevent so-called ad hoc entities starting a representative action in another MS. The majority in the Council saw this as a way of protecting their courts. It had, however, nothing to do with a rejection of the Dutch national system with ad hoc entities as such. On the contrary, recital 28 of the Directive makes it clear that at a national level ad hoc organisations for a specific representative action designated by way of acceptance are allowed under Article 4 of the Directive. I do not see that courts in another MS could refuse the recognition and enforcement of a judgment resulting from such action based on public policy.

IT: How often (to your knowledge) have the ‘designated entities’ under the Injunction directive in your respective jurisdictions made use of their powers to file actions in cross-border matters? And do you think we should be optimistic about the role of these entities under the Directive?

PG: Not aware of any. We do not know whether claiming monetary damages in a representative action under the Directive will lead to more cross-border cases.

 VS: (1) Not aware. In UK there are few designated entities; most consumer associations are campaigning bodies not equipped to litigate. The competition collective actions regime was amended in 2015 so that representative bodies no longer had to be pre-approved by the Minister before they could bring collective competition claims. Before then, only one organization (Which) had applied for designation under the previous (2002) regime, and had only brought one claim (unsuccessfully).

(2) One issue is the body’s objects (purpose). The likely candidates are mostly charities, the UK charities regulator requires them to adhere to their objects and many of them are limited to UK actions. In UK competition ‘class actions’ so far all the representatives have been individuals (with litigation funding). In contrast to other common law ‘class action’ jurisdictions, however, they have generally been individuals with significant practical/professional experience related to consumer protection. For example, the current Mastercard collective action is headed by a Chief Financial Services ombudsman.

AH: Cross-border actions are rare in Germany. A remarkable recent exception was the action brought by an Italian consumer association (Verbraucherzentrale Südtirol) against Volkswagen in the interest of Italian buyers of cars in the Diesel emissions scandal. However, this is not an injunctions action, but one brought under the German ‘model declaratory action.’ The German consumer association (VZBV) had used this instrument in their own action on behalf of German consumers but had explicitly refused to represent foreign consumers.

Pre-approved (Designated) Entities

IT: So, what you are all saying is that there is no reason to believe that the designated entities will be active in practice. That is not a cheerful news for consumers. However, there must be good reasons why the EU has done this. Let us explore the advantages and disadvantages of granting standing in collective redress in cross-border actions only to pre-approved (designated) entities.

Advantages:

PG: MS courts know that every entity from another MS starting a procedure before its courts meets the harmonised requirements for designated entities, thus making mutual recognition of such entities less problematic.

PG: MS of origin is best placed to test whether an entity meets the harmonized requirements.

Disadvantages:

PG: Some requirements are difficult to test in theory without a collective claim.

PG: It might lead to circumvention of national requirements, as they are stricter.

VS: Many such entities will need to amend their objects.

IT: The Dutch experiences with collective actions (25 years) show that there may not always be such pre-existing entities, when needed, willing to fund such actions in which case the ad hoc established ones fill in that gap. Absent such entities there might be an access to justice deficit.

Funding

IT: And what about funding of designated entities and of collective redress? Articles 10 and 20 of the Directive deal with that, the first one dealing with TPF and the second one with lifting financial restrictions for designated entities.

IT @ PG: You assisted the Dutch government with the Directive and must have some insight. Why are there two separate articles on a related topic? How are non-profit organisations supposed to file this type of (costly) action in their jurisdictions?

PG: The original Commission proposal contained an Article 7 on funding and an Article 15 on assistance of qualified entities. Even though Article 7 was deleted and Article 15 was redrafted, a new provision on funding was reinstated as Article 7, but became Article 10 (and Article 15 became Article 20) in the final text. The importance of Article 10 is twofold: for those in favour of allowing third party litigation funding for representative actions, Article 10 makes it clear that funding is allowed under the Directive on strict conditions. For those against allowing third party litigation funding for representative actions, the wording of Article 7 serves to restrict the conditions under which such funding is allowed. Still, the wording is opaque for those who did not participated in the negotiations. Especially the reference made to in Article 10(2)(b) that a third party funder may not fund a representative action against a defendant which is a competitor of the funder or against a defendant on whom the funder is dependent, gives rise to interpretation questions. What is the rationale behind these provisions? Recital 52 gives clues about the rule prohibiting the funding against a competitor. A trader acting in the same market is considered to have a conflict of interest “since the competitor could have an economic interest in the outcome of the representative action, which would not be the same as the consumers’ interest”. The concern of the European legislator was that the representative action might become an instrument to harm a competitor rather than serve the interests of the consumers. As regards the funder, who is dependent on the defendant the concern of the European legislator is the reverse: such funder might be so dependent on the defendant that its actions are based on the interests of the defendant rather than the interest of the affected consumers.

IT @ AH: what is the view and position on funding of designated entities in Germany?

AH: In Germany, the “Verbraucherzentralen” are maybe the most active designated entities, including their federal association, the VZBV. These are mainly government-funded. In particular, the VZBV received extra money and extra funding of staff to specifically bring the new ‘model declaratory actions.’ So, we are looking at entities that are formally private law associations, which are more like outsourced parts of the government administration. We will see whether this will create future conflicts of interests. Hitherto government financing has not stopped them from bringing cases against (partly) State-owned companies such as VW, but this action was politically supported. There are close ties between the VZBV and the German government.

IT: This is interesting, but this potential issue was apparently not addressed in the Directive. It looks like the focus on potential conflicts of interest in the Directive is entirely on actions that are TPF-ed. Correct?

PG: yes, this seems to be the case. The Directive is limited to actions by consumers for infringements of EU-instruments placed on the list of Annex 1. Representative actions under the Directive will be between a qualified entity as claimant and a trader as the defendant. With the exception of the GDPR, the government is not a likely party in such actions. Conflicts of interest regarding the government were not seen as a point of concern in the negotiations for most MS or the Commission/EP. However, for the Netherlands it was in fact, a point of concern both regarding the designation of qualified entities and financial support to qualified entities. This concerned the broad scope of the Dutch mechanism for collective redress which is not limited to consumer actions. In the Netherlands around 40 % of all representative actions are against the Dutch government as defendant.

Insight into the Negotiations

IT @ PG: What considerations brought us to where we are and what were the most controversial issues during these negotiations? I am puzzled by the fact that actual experience does not seem to count for much in such negotiations: the MS have on the one hand no or disappointing experiences with the system of ‘designated entities’ under the Injunctions Directive and there are better experiences under the Dutch regime, that allows both type of entities (for over 25 years). Did this play any role in the negotiations? What evidence was produced?

PG: At the start of the negotiations in 2018, some MS had a collective redress system in place, others were working on it and some MS did not have any mechanism for collective redress. Throughout the negotiations more MS started legislative projects on collective redress in various shapes and forms. The Netherlands had pending legislation when the negotiations started. In the preparation for Parliamentary process we unearthed many issues relevant to the Directive. Real experience was largely irrelevant in the negotiations – it was easier for us with a collective redress mechanism to indicate difficulties in the Directive. By the late 2019, the Dutch WAMCA had become law. The result of this was that the Directive and the Dutch WAMCA are compatible. The Directive leaves enough room to accommodate MS’s national systems, e.g. designating ad hoc entities as qualified entities and the possibility for both opt out and opt in mechanisms. For some other aspects the provisions of the Directive match those of the WAMCA perfectly, e.g. the court can reject a claim at inception if it is manifestly unfounded, can be found both in Article 7(7), of the Directive and in Article 1018c, par. 5 (c). Therefore, the WAMCA will be the Dutch collective redress mechanism under the Directive without having to change. However, we do have to provide for a procedure for entities to be placed on the list predesignated for cross border actions. The Article 10 funding provisions seem to be more detailed than the WAMCA. We may have to exclude competitors or someone dependent on the defendant to acts as funder.

 AH:  Little of the discussion about collective actions is evidence-based. ‘Abusive’ litigation seems unlikely. On the contrary, the experience in Germany shows that almost all such actions are well-founded and not frivolous. Even if we look at the empirical data in the U.S., we clearly do not find the ‘abuse’ scenario that is often painted on the wall.

IT @ PG: What were you most proud of in the negotiations? What were you most frustrated by, also in view of the fact that Dutch ad hoc spv’s seem to need to meet much stricter criteria than the EU ‘designated entities’ in terms of governance, conflict of interest and funding capabilities and yet they are being perceived as somehow of a ‘lower rank’ in cross-border matters? Who will be in charge in the Netherlands in appointing designated entities?

PG: The biggest achievement was European legislative result on collective redress at all, obliging every MS in Europe to have a collective redress mechanism for consumers. Making a distinction between national collective and cross-border collective redress brought a breakthrough in the negotiations. Accepting that for cross border cases we have to work with a list of entities designated in advance with harmonised criteria, meant that the Netherlands – and others, like Germany – could preserve their national system. Even though the harmonised criteria may look different or less strict than the criteria under the WAMCA, the rationale behind the criteria are very similar. There are practically no criteria in the WAMCA which do not meet one of the criteria in Article 4 of the Directive. E.g. the obligation in Article 3:305a (2) of the WAMCA to have a governance structure with a supervisory board can be seen as the implementation of the obligation in Article 4, par. 3, (e) to be independent and to prevent a conflict of interest. We intend to make the Dutch ministry of Justice and Security responsible for the list of entities designated in advance for cross border actions. One of the more difficult issues in the negotiations in the Council was that of the concept of standing of a qualified entity on the one hand and the civil procedural concept of the admissibility of a specific representative action on the other. To underline that distinction the Directive contains several references to the procedural autonomy of MS and the room for courts to perform an admissibility test in accordance with their national law, e.g. in Recital 12 and Article 7(3).

Non-Dutch Perspectives on the Directive – And on Dutch Collective Redress

IT: Apparently one can speak of ‘Dutch exceptionalism’ in the context of EU collective redress. Let us hear non-Dutch perspectives on the EU Directive and on Dutch collective redress.

IT @ AH and VS: What is your take on the issues? In view of the sectoral approach in your respective countries versus the Dutch horizontal one? Are there any other issues that you identify in that context?

AH: I think there are some open issues regarding the EU Directive’s rules on standing on the one hand and individual Member States’ rules on admissibility of collective actions on the other. For example, if Dutch law would be restrictive in allowing foreign designated entities to sue, this could possibly violate Article 6(1) of the Directive that basically requires Member States to accept cases brought by designated entities from other Member States. For example, if a designated entity from EU Member State X sues a Dutch company before a Dutch court, but with respect to that company’s activities in Member State X and in the interest of consumers in Member State X, I think that the Dutch court would have to hear the case. It is also interesting that the Directive in its Article 5(4) allows the defendant trader to raise objections against the legitimacy of the designated entity with regard to the Directive’s criteria. But the Directive is silent on the procedure in such a case: Should the action be stayed until the home Member State of the designated entity has decided about such concerns? With regard to Germany, the German government worked hard to avoid ad hoc entities in the Directive and has succeeded in this regard. But there may be some more room now for foreign entities to sue in Germany under the Directive.

PG: As regards AH’s example, I think a Dutch court would accept that this foreign entity has standing. Accordingly the new Directive is no different from the current one for actions to obtain injunctions, be it that the foreign authorities at least have had to apply the harmonised criteria in order to place this entity on the list. In that respect it offers a better safeguard than now. Furthermore, accepting legal standing does not mean that the admissibility of the specific claim cannot be tested by the court. E.g. the Dutch court may still check whether the claim brought by the designated entity sufficiently safeguards the interests of the claimants and whether the entity has means to finance the claim.

VS: UK experience with the sectoral regime for collective competition (anti-trust) claims is still young, but developing. However, there are some clearly emerging issues which will also likely arise when implementing and applying the Directive:

It is modelled on the (horizontally applicable) Canadian regime, so we have a model to follow for the tricky questions. Even though there are differences between the EU and Dutch regimes, the Dutch experience will still be valuable for MS courts wanting to find an answer to issues not expressly dealt with in the Directive or national implementing legislation. The Dutch regime has many similarities with what is required under the Directive and, I think is likely to be used as a model by others.

A ‘class’ action doesn’t work so well for non-economic loss (eg injury due to clinical negligence etc) due to widely differing circumstances, whereas the Dutch settlement element was set up to deal with exactly that situation.

A sectoral approach could lead to borderline cases — e.g. claims pretending to be about consumer law, when they are in reality competition law cases, which are not covered by the Directive.

Also, it may be difficult to tell in many cases whether a case is about breach of EU law or national law. For example, in the consumer protection and environmental protection fields, EU law is mostly contained in Directives which are then implemented by the MS. So, the ‘consumer’ (claimant) will only immediately see a breach of legal norms in his national legislation. For many, working out whether their claim is in fact based on EU law may be unnecessarily difficult.

PG: Yes, to me this is a key observation and is why we want the Dutch WAMCA to be our system under the Directive, meaning that there will still be only one system in the Netherlands.

Is the Directive a Threat to Dutch Cross-Border (Consumer) Actions?

IT @ all: To circle back at the beginning of our discussion, do you think that the limitation on standing to pre-approved entities in the new EU Directive is a threat to Dutch cross border (consumer) actions, what is your final word on that?

VS: In my view the ‘threats’ to cross-border actions by qualified entities are mainly that they do not have the experience in doing this and that their purpose may be national rather than international. The EU level umbrella bodies might be better placed (e.g. BEUC) but they would have to be recognized by a national authority (lots of applications for designation to the Belgian authorities in Brussels?). So, the most important aspects I think are willingness of national authorities to recognize the few international ‘entities’ who might want to do this – not specific to the Dutch situation, I think, and a willingness/expertise in acting cross-border.

PG: I agree. Let’s not forget that since the entering into force of the Injunctions Directive not a single cross border action was ever started in the Netherlands or elsewhere until last year’s action against VW. It is cumbersome and might be very expensive having to start a case in another jurisdiction, working with foreign lawyers etc.

AH: One of the areas in which the Directive is really a step forward is third-party funding of litigation. In Germany, there is considerable uncertainty after some court decisions that prohibited this as being immoral in relation to a certain type of consumer associations’ actions. We now have the language in Article 4(3) e of the Directive, which certainly is a compromise, but at least shows that TPF cannot be completely prohibited, but needs to be regulated and looked at in more detail. In general, I think that the Dutch courts will remain an attractive forum for cross-border collective actions, and I expect that the Netherlands will remain the innovation leader in this field.

IT: Thank you very much for sharing your views and insights on this fascinating and challenging topic.

Plusieurs projets législatifs relatifs à la responsabilité sociale des entreprises sont actuellement à l’agenda de la Commission européenne. Éclairage.

en lire plus

Droit de la défense

This post was written by Rodrigo Rodriguez who is Professor on Insolvency Law at the University of Lucerne.

Since 1 January 2021, as a result of the UK’s “hard Brexit” in respect of the field of cooperation in civil matters, the UK has not been a formal member of the 2007 Lugano Convention anymore. Much has been written and zoomed on this issue.

On 22 February 2021, the district court of Zurich issued an – as far as I know – first decision (courtesy of arrestpraxis.ch) regarding the (non-)recognition of the UK judgement in Switzerland post-Brexit.

The decision refuses to apply the 2007 Lugano Convention rationae temporis to a UK decision of the High Court of London made in September 2020 (while the Lugano Convention was still applicable by virtue of the Withdrawal Agreement).

Upon request for recognition filed on 18 February 2021, the Zurich court concludes, in a short reasoning, that since 1 January 2021, the 2007 Lugano Convention is not applicable anymore to situations involving Switzerland and the UK and must therefore be disregarded as a basis for recognition. As the provisional measure requested in the claim was ultimately granted on a different legal basis, the decision was not challenged.

It is respectfully submitted that the decision is ill-founded. The intertemporal provisions in the Convention are way more complex than the district court’s reasoning acknowledges.

The relevant Article 63(1) of the Convention (transitional provisions) reads as follows:

This Convention shall apply only to legal proceedings instituted and to documents formally drawn up or registered as authentic instruments after its entry into force in the State of origin and, where recognition or enforcement of a judgment or authentic instruments is sought, in the State addressed.

The district court’s decision makes no reference to that article or to doctrine but refers to different views expressed by Swiss governmental bodies: one by the Federal Office of Justice (FOJ), and one by the Federal Office of Foreign Affairs (FOFA). While the first clearly (and accurately…) states that “[t]he recognition and declaration of enforceability of judgments made before the withdrawal date shall continue to be governed by the Lugano Convention even after the date of withdrawal”, the latter states that “the Lugano Convention will cease to form the legal basis for Swiss–UK relations, at least temporarily. As a result, matters of jurisdiction and declarations of the enforceability of judgments between Switzerland and the UK will, in principle, once again be governed by national legislation”. While the term “in principle” would seem to leave some room for nuance, the district court of Zurich opted to openly dismiss the FOJ opinion and embrace the “no legal basis”-assertion of the FOFA.

Under Article 63(1), the relevant elements are that (1) the Convention was in force in the State where the decision to be recognized was issued (or even already when the proceedings were instituted? see below), and (2) the Convention was in force in the State of the recognition at the time recognition was sought. This was clearly the case in the situation at hand. The district court of Zurich erred in not applying this provision.

From a strictly grammatical point of view, one could read Article 63(1) as covering only the situation where the Convention is applicable in both States at the time of recognition. However, such hypothesis would not even raise an intertemporal question and Article 63(1) would be completely pointless. This cannot be assumed as the drafter’s will. It would also contravene general principles on acquired rights and favorem recognitionis.

Missing the Really Tricky Questions

It is submitted that this first decision is a bad start into a true marathon of (really) tricky issues around Brexit and the Lugano Convention.

One of those questions is whether Article 63(1) requires the proceedings in the UK to be final (in order to be recognized in Switzerland later), or if it is sufficient that the proceedings have been “initiated” – opening the way for enforcing decisions issued even after 1 January 2021. In my opinion, this is consistent with the purpose of Article 63(2), which is to enforce decision under transitional rules once it is clear that the originating court has applied the Lugano provisions on direct competence. Views are also split on this (see Fn 3 of the FOJ decision here), but at least this would be the right debate to have.

The Return of the Undead: Applicability of the 1988 Lugano Convention?

The second question is whether, assuming the 2007 Lugano Convention were not to be applicable, its predecessor, the Lugano Convention of 1988, would apply.

The 1988 Lugano Convention was “superseded” by the 2007 Lugano Convention (no further acts of rescission were agreed between the parties) by virtue of article 65 of that Convention. As the latter would cease to be applicable, that could automatically lead to the 1998 Lugano Convention being applicable again. The 1988 Lugano Convention is not cited in Annex VII of the 2007 Lugano Convention (Agreements “superseded” by the 2007 Lugano Convention under its article 65). And the 1988 Lugano Convention has been and is still applied to the French and Netherlands overseas territories (not being EU territories).

However, this view is contested. In Switzerland, which follows the monist approach to treaties, courts should, in my opinion, apply the 1988 Lugano Convention again. However, since the UK follows the dualist approach, one must also consider its national law and the fact that Article 3A of the Civil Jurisdiction and Judgments Act 1982, giving force to the 1988 Lugano Convention, has since been repealed. Whether this outweighs the principles of the Vienna Convention the law of treaties (see on this argument in respect of the Brussels Convention the post by Serena Forlati) will be up to the courts – if asked. Unfortunately, also that opportunity was missed.

Surprisingly, I have not come across any view of UK lawyers (or lawmakers) defending the potential applicability of the 1988 Lugano Convention, although it would provide the UK with a far better “fallback position” than national laws in the case of a non-accession to the 2007 Lugano Convention. As this possibility seems more and more plausible (no agreement of the EU yet on the UK’s accession), it is a case worth making in the next recognition proceeding.

 

I am co-coordinating together with other African private international law experts (Richard Frimpong Oppong, Anthony Kennedy, and Pontian Okoli) an extended and in-depth version of this blog post and more topics, titled “Investing in English-speaking Africa: A private international law toolkit”, which will be the topic of an online Master Class at TMC Asser Institute on June 24-25, 2021.

 

Introduction

In  the year 2020, the Nigerian Court of Appeal delivered at least three decisions on choice of court agreements.[1] I discussed two of those cases in this blog here and here. In the first two decisions delivered this year, the Nigerian Court of Appeal gave full contractual effect to the parties’ choice of court agreement.[2] In other words, the Nigerian Court of Appeal interpreted the parties’ choice of court agreement strictly according to is terms as it would do to a contractual document between commercial parties.

In November 30 2020, the Nigerian Court of Appeal delivered a third decision where it declined to enforce a Commonwealth of Virginia (in USA) Choice of Court Agreement.[3] In this connection, the author is of the view that the Court of Appeal’s decision was delivered per incuriam. This is the focus of this comment.

 

Facts

In this case, the claimant/respondent commenced action at the Kaduna High Court with a writ of summons and statement of claim dated the 18th December, 2018 wherein it claimed against the defendant/appellant, the sum of $18,103.00 (USD) being due and unpaid software licensing fee owed by them by virtue of the agreement between the parties dated 12th day of June, 2013.

The defendant/appellant filed a conditional appearance along with a Statement of defence and counter affidavit. Its argument, inter alia, was that by virtue of Article 12 and 13 of their agreement, the Nigerian court had no jurisdiction in this case. The relevant portion of their agreement reads as follows:

“ARTICLE 12
GOVERNING LAW: The Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, USA without regard to the principle of conflicts of any jurisdiction.”
“ARTICLE 13
With the exception of an action or suit for the Licensee’s failure to make any payment required hereunder when there was no suit or action arising under this Agreement may be brought more than one (1) year following the occurrence giving rise thereto. All suits and actions arising under this Agreement shall be brought in the Commonwealth of Virginia, USA and License hereby submits to the jurisdiction of the Courts of the Commonwealth of Virginia and the United States District Courts Sitting in Virginia.”

By a ruling delivered on the 11th December, 2019, the trial High Court entered judgment in favour of the claimant/respondent. The defendant/appellant appealed to the Nigerian Court of Appeal.

 

Decision

Though the Court of Appeal (Hussaini JCA) was of the view that the choice of court agreement in favour of the Commonwealth of Virginia (in USA) was clear and unambiguous and did not have any vitiating circumstances surrounding it (such as fraud), it unanimously held that it would not apply the principle of pacta sunt servanda (agreements between parties should be respected) in this case. It followed the obiter dictum of Oputa JSC which reads as follows:

“[Nigerian] Courts should not be too eager to divest themselves of jurisdiction conferred on them by the Constitution and by other laws simply because parties in their private contracts chose a foreign forum … Courts guard rather jealously their jurisdiction and even where there is an ouster clause of that jurisdiction by Statute it should be by clear and unequivocal words. If that is so, as is indeed it is, how much less can parties by their private acts remove the jurisdiction properly and legally vested in our Courts ? Our courts should be in charge of their own proceedings. When it is said that parties make their own contracts and that the courts will only give effect to their intention as expressed in and by the contract, that should generally be understood to mean and imply a contract which does not rob the Court of its jurisdiction in favour of another foreign forum.”[4]

In applying this obiter dictum to the facts of the case, Hussaini JCA held as follows:

“By reason of Section 6(1)(2)(6)(b) of the Constitution of FRN, 1999 (as amended)  the judicial powers vested in the Courts “extend to all matters between persons or between Government or authority and to any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person”. Consequently, no person or group of persons by their own private treaty or arrangements can agree to oust the jurisdiction and provisions vested in the Courts by the Constitution. Even where such clauses are put in place in or as a contract with international flavour to rob the Courts of the land of jurisdiction in favour of another foreign forum, the Courts of the land are obliged to apply the blue pencil rule to severe those clauses from the contract or ignore same by virtue of the Constitutional provision which confer on the Court, the jurisdiction and power to entertain those cases.
Talking about the jurisdiction of the Courts, the Court below, by virtue of Section 272 of the Constitution of Federal Republic of Nigeria, 1999 (as amended) has jurisdiction to entertain cases such as recovery of debts, as in the instant case on appeal. It is for this reason that clauses in the likes of Articles 12 and 13 in the Article of the Agreement should be ignored when determining the rights and liabilities between the parties herein in matters such as this and the trial Court took the right approach when it discountenanced same to reach the conclusion that it did.
In any case, is it for the recovery of the sum of $18,103, (USD) only claimed by the Respondents, that parties herein are required, by that contract or agreement to submit themselves to a foreign forum in Virginia, USA for adjudication of their case, without consideration of the concomitant procedural difficulties attendant thereto, as for instance, of having to return the case to Nigeria, the place where the contract was concluded initially, to register the judgment obtained at that foreign forum, in Virginia, USA, to be enforced in Nigeria? I think the Courts in Nigeria, fully seized of the case, will in the exercise of its discretion refuse the request to refer the case to a foreign forum for adjudication. It is for all the reasons already expressed in this discourse that I hold the firm view that the trial Court was competent or is competent when it entertained and adjudicated over the recovery suit or action filed by the Respondent against the Appellant.”[5]

 

Comments

There are five comments that could be made about the Court of Appeal’s decision (Hussaini JCA) in A.B.U. v VTLS.[6] First, the Court of Appeal (Hussaini JCA) in A.B.U. v VTLS[7] followed Oputa JSC’s obiter dictum in Sonnar (Nig) Ltd v Partenreedri MS Norwind.[8] It should be stressed that Oputa JSC’s obiter dictum is not binding on lower courts according to the Nigerian common law doctrine of stare decisis. In addition, Oputa JSC’s obiter dictum was a concurring judgment. Indeed, the Supreme Court in Sonnar (supra) had unanimously given preference to the enforcement of a foreign jurisdiction clause except where strong cause is advanced to the contrary.[9] The majority of the Supreme Court did not treat it as an ouster clause. It is incongruous to hold, on the one hand, that the Nigerian court would hold parties to their bargain in enforcing a foreign jurisdiction clause except where strong cause is shown to the contrary, and on the other hand, treat a foreign jurisdiction clause as if it were an ouster clause. In Sonnar, the choice of court agreement was not enforced because strong cause was shown to the contrary – the proceedings would be time-barred in a foreign forum, and the claimant would not have access to justice.

Furthermore, the Nigerian Supreme Court in another case held that where a plaintiff sues in Nigeria in breach of a foreign jurisdiction clause, Nigerian law “requires such discretion to be exercised by granting a stay unless strong cause for not doing so is shown. The burden of showing such strong cause for not granting the application lies on the doorsteps of…the plaintiff.”[10] The Supreme Court in this case enforced the choice of court agreement and stayed the proceedings in Nigeria because the plaintiff did not file a counter affidavit to demonstrate strong reasons why the proceedings should not be heard in a foreign forum chosen by the parties.[11]

If the ratio decidendi in the Supreme Court cases in Sonar and Nika are applied to the recent Court of Appeal’s decision in A.B.U. v VTLS (supra), it is clear that the Court of Appeal (Hussaini JCA) reached its decision per incuriam. There was nothing in the judgment to demonstrate that the plaintiff provided strong reasons (such as time bar in a foreign forum) why the choice of court agreement in favour of the Commonwealth of Virginia (in USA) should not be enforced. The argument that the choice of court agreement is an ouster clause without more is not a strong reason not to enforce the choice of court agreement.

Second, a choice of court agreement in favour of another court does not mean the Nigerian court’s jurisdiction no longer exists (without jurisdiction) under the Nigerian constitution, as the Court of Appeal (Hussaini JCA) held in this case. Such jurisdiction exists, but it is up to the Nigerian court in exercise of its jurisdiction to decide whether or not to stay proceedings. This view is consistent with the Nigerian Supreme Court’s decisions in Sonar and Nika. The fact that such proceedings are stayed and not dismissed means that a Nigerian court’s jurisdiction is not ousted.

Third, some Nigerian judges confuse choice of court with choice of law. The Court of Appeal (Hussaini JCA) also fell into this error. The choice of the law of the Commonwealth of Virginia is not the same thing as choosing the courts of the Commonwealth of Virginia. For example, the Nigerian courts could assume jurisdiction and apply the law of the Commonwealth of Virginia.

Fourth, looking at the bigger picture, I generally acknowledge that the principle of pacta sunt servanda in enforcing choice of court agreements are aimed at enhancing the efficacy of business transactions and, legal certainty and predictability in international commercial litigation. However, I must point out that despite the Nigerian Supreme Court decisions on the point that hold that choice of court agreements should be enforced except there are strong reasons to the contrary, I am generally not in favour of Nigerian courts declining jurisdiction in international commercial litigation. It ultimate hurts the Nigerian economy (e.g. less job for Nigerian lawyers), hampers access to Nigerian justice, and does not help Nigerian judges in strengthening our legal system. What is the solution? I suggest that in the future the Nigerian Supreme Court should apply the test of “interest of justice” in determining whether or not it will enforce a choice of court agreement. Thus, all the circumstances of the case should be considered as to whether the interest of justice will be served if the choice of court agreement is enforced. I also suggest that in such cases where a choice of court agreement is enforced in Nigeria, a stay for a maximum of six months should be granted. If the claimant does not institute the case in the chosen foreign court within six months, Nigerian courts should assume jurisdiction. In addition, if it is sufficiently demonstrated that the chosen foreign forum later becomes inaccessible or impracticable for the claimant to sue, the Nigerian court should retain jurisdiction to handle such claims.

Sixth, Nigeria should consider ratifying the Hague Choice of Court Convention, 2005. This Convention will work better in Nigerian courts if litigation is made attractive for international commercial actors, so they can designate Nigerian courts as the chosen forum. Speed, efficiency, legal aid for poor and weaker parties, and integrity of the Nigeria’s system are some of the issues that can be taken into account in enhancing Nigeria’s status as an attractive forum for international commercial litigation.

 

Conclusion

The Nigerian Court of Appeal has delivered three reported decisions on choice of court agreements in the year 2020. The recent Court of Appeal’s decision in A.B.U. v VTLS (supra) was reached per incuriam because it is inconsistent with Nigerian Supreme Court decisions that hold that a choice of court agreement should be enforced except there are strong reasons to the contrary.

The Nigerian Supreme Court in the future should rise to the occasion to create new tests for determining if a choice of court agreement should be enforced in Nigeria. These tests should reconcile the needs of access to Nigerian justice on the one hand, and respecting the contractual agreements of parties to designate a foreign forum.

The Nigerian government should create the necessary infrastructure and requirements that will enable Nigeria effectively ratify and implement the Hague Convention on Choice of Court agreements, 2005.

[1] Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90; Damac Star Properties LLC v Profitel Limited (2020) LPELR-50699(CA); A.B.U. v VTLS (2020) LPELR-52142 (CA).

[2] Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90; Damac Star Properties LLC v Profitel Limited (2020) LPELR-50699(CA).

[3] A.B.U. v VTLS (2020) LPELR-52142 (CA).

[4](1987) 4 NWLR 520, 544 – 45, approving Lord Denning’s statement in The Fehmarn [ 1958 ] 1 All ER 333 , 335 . Cf. Conoil Plc v Vitol SA (2018) 9 NWLR 463, 489 (Nweze JSC) – “our courts will only interrogate contracts which are designed to rob Nigerian courts of their jurisdiction in favour of foreign fora or where, by their acts, they are minded to remove the jurisdiction, properly and legally, vested in Nigerian courts.” See also LAC v AAN Ltd (2006) 2 NWLR 49, 81 (Ogunbiyi JCA as she then was).

[5]A.B.U. v VTLS (2020) LPELR-52142 (CA) 15 – 18.

[6] (2020) LPELR-52142 (CA),

[7] (2020) LPELR-52142 (CA),

[8](1987) 4 NWLR 520, 544 – 45

[9] Even Oputa JSC held thus: ‘Where a domestic forum is asked to stay proceedings because parties in their contract chose a foreign Court … it should be very clearly understood by our courts that the power to stay proceedings on that score is not mandatory. Rather it is discretionary which in the ordinary way, and in the absence of strong reasons to the contrary will be exercised both judiciously and judicially bearing in mind each parties right to justice ’ –Sonnar (supra) at 545 (emphasis added).

[10] Nika Fishing Company Ltd v Lavina Corporation (2008) 16 NWLR 509, 535 (Mohammed JSC, as he then was).

[11] Conoil Plc v Vitol SA (2018) 9 NWLR 463, 489 (Nweze JSC), 500-1 (Okoro JSC), 502 (Eko JSC).

Comparative Procedural Law and Justice (CPLJ) is a global project of the Max Planck Institute Luxembourg for Procedural Law, with the support of the Luxembourg National Research Fund (O19/13946847), involving more than one hundred scholars from all over the world.

CPLJ is envisioned as a comprehensive study of comparative civil procedural law and civil dispute resolution schemes in the contemporary world. It aims at understanding procedural rules in their cultural context, as well as at highlighting workable approaches to the resolution of civil disputes.

In this framework, the Max Planck Institute Luxembourg for Procedural Law will host its 3rd CPLJ Webinar on 16 April 2021, 3:00 – 5:15 pm (CET).

The programme reads as follows:

Chair:  Burkhard Hess (Director of the Max Planck Institute Luxembourg and CPLJ Editor)

3:00 pm  Oscar Chase (New York University)

Comparative Procedural Law and Culture

3:30 pm Discussion

4:00 pm Intermission

4:15 pm  Fausto Pocar (University of Milan)

Comparative Procedural Law: A View from Practice

4:45 pm Discussion

5:15 pm End of conference

The full programme is available here.

Participation is free of charge, but registration is required by 9 April 2021 via a short e-mail to events@mpi.lu.

(Image credits:  Rijksmuseum, Amsterdam)

Melissa Durkee (University of Georgia School of Law) has posted Interpretive Entrepreneurs on SSRN.

The abstract reads:

Private actors interpret legal norms, a phenomenon I call “interpretive entrepreneurship.” The phenomenon is particularly significant in the international context, where many disputes are not subject to judicial resolution, and there is no official system of precedent. Interpretation can affect the meaning of laws over time. For this reason, it can be a form of “post hoc” international lawmaking, worth studying alongside other forms of international lobbying and norm entrepreneurship by private actors. The Article identifies and describes the phenomenon through a series of case studies that show how, why, and by whom it unfolds. The examples focus on entrepreneurial activity by business actors and cast a wide net, examining aircraft finance, space mining, modern slavery, and investment law. As a matter of theory, this process-based account suggests that international legal interpretation involves contests for meaning among diverse groups of actors, giving credence to critical and constructivist views of international legal interpretation. As a practical matter, the case studies show that interpretive entrepreneurship is an influence tool and a driver of legal change.

The paper is forthcoming in the Virginia Law Review.

La possibilité d’imposer la visioconférence devant les juridictions pénales et la prolongation de plein droit des délais maximaux de détention provisoire sont contraires à la Convention européenne des droits de l’homme.

en lire plus

by Fabrizio Marrella

Event: Brexit and International Business Law/ Brexit e diritto del commercio internazionale

When: 26 March 2021, at 14.30 CET

How: Free access upon enrolment by sending an email at  fondazione@ordineavvocatifirenze.eu  the contact person is: Ms. Giovanna Tello.

Working languages: English and Italian with no simultaneous translation.

Short description: Webinar on the most relevant legal profiles following the process following the Referendum of 23 June 2016, which led to BREXIT on 31 January 2020. The end of the transitional period on 31 December 2020 led to the Trade and Cooperation Agreement (“TCA”) of 24 December 2020 which avoided the “No Deal”. Since January 1st, 2021, the United Kingdom is no longer part of the EU’s customs and tax territory. The TCA creates a free trade area for goods without extra duties or quotas for products, but introduces new rules on rules of origin and labelling of Italian products exported to the United Kingdom as well as new rules for online international sales contracts. The TCA does not clearly regulate the area of financial services, nor it provides detailed regulation for automatic mutual recognition of professional qualifications. All in all, Brexit and TCA require an assessment of current and future international commercial contracts between EU and British companies as well as an evaluation of civil and commercial dispute resolution tools, including arbitration.

Here is the link : https://www.unive.it/data/agenda/3/47520

Prof. Fabrizio Marrella

Prorettore alle Relazioni internazionali e alla Cooperazione internazionale/ Vice Rector for International Relations and International Cooperation

Ordinario di Diritto Internazionale / Chair of International Law

Secret professionnel

Chasse

Juridiction correctionnelle

The author of this post is Priskila P. Penasthika, Ph.D. Researcher, Erasmus School of Law, and Lecturer in Private International Law at Universitas Indonesia.

For almost ten years I have been closely observing the discussions taking place between Indonesia and The Hague Conference on Private International Law (HCCH) on the matter of Indonesia becoming a contracting state to the 1961 Hague Apostille Convention. This endeavor has finally materialized at the beginning of 2021 when Indonesia decided to accede to The Hague Apostille Convention. The instrument of accession – Presidential Regulation Number 2 of 2021 – was signed by President Joko Widodo on 4 January 2021, and issued on 5 January 2021.

Entrance into Application of the Hague Apostille Convention

Although the Presidential Regulation required at national level to seal the accession has been signed and published, this good news will not lead to an immediate application of the Hague Apostille Convention in Indonesia. It will take some more months before this Convention enters into force for Indonesia. The latest update informs that the instrument of accession is at the moment being recorded in the Indonesian state gazette to comply with the enactment and publication requirement of a presidential regulation according to the Indonesian law. After the completion of this process, according to Articles 12 and 15 of the Convention, the instrument of accession needs to be deposited with the Ministry of Foreign Affairs of the Netherlands. Subsequently, there will be six months period for the other contracting states to the Convention to raise any objection to the Indonesian accession to the Convention. The 1961 Hague Apostille Convention will enter into force between Indonesia and the contracting states which have raised no objection to its accession on the sixtieth day after the expiry of the six months period. Even if this last part of the process is expected to run smoothly, it is likely that the interested parties will have to wait until the end of 2021 for the Convention to become applicable for Indonesia.

Present Process of Legalization of Indonesian Documents to Be Used Abroad

The accession to this Convention brings good news for many interested parties because the current legalization process for public documents in Indonesia is a lengthy, complicated, time-consuming, and a costly procedure.

As an illustration and based on my personal experience, there are at least four different institutions in Indonesia involved in the legalization process. We can take the example of an Indonesian birth certificate that would need to be used before a foreign authority. The first step in this process would be the legalization by the Indonesian Civil Registry Office that issues the document. Then, a second legalization is performed by the Ministry of Law and Human Rights of the Republic of Indonesia. This is to be followed by a subsequent legalization by the Ministry of Foreign Affairs of the Republic of Indonesia. Lastly, the birth certificate should also be legalized by the Embassy or the Representative Office in Indonesia of the foreign country in which the birth certificate is to be used. After all these steps, the birth certificate can finally be used in the designated foreign jurisdiction.

Changes the Convention Will Bring in the Process of Legalization of Documents

By the accession of the 1961 Hague Apostille Convention, the above lengthy procedure will be limited to one step and will involve only one institution – the designated Competent Authority in Indonesia. Although, there is not yet an official announcement about which institution will be appointed as the Indonesian Competent Authority, it is very likely that the Ministry of Law and Human Rights of the Republic of Indonesia will be entrusted with the task.

Limitations Made to the Application of the Hague Apostille Convention

When it comes to its accession to the Hague Apostille Convention, Indonesia made a reserve declaration to exclude from the definition of public documents (Article 1(a) of the Convention) the documents issued by the Prosecutor Office of Indonesia.

Additional Significance of the Accession to the Hague Apostille Convention

Beyond facilitating and speeding up the process of recognition of documents, the decision to join the 1961 Hague Apostille Convention represents an important step for Indonesia.

The 1961 Hague Apostille Convention is the first HCCH’s convention that Indonesia accedes to. Given the fact that Indonesia is not yet a member to the HCCH, the accession to the Hague Apostille Convention will mark the first official connection Indonesia has with the organization. It is anticipated that this will lead to more accessions to the HCCH’s conventions by Indonesia in the coming future.

The other significance of this accession is related to the Visi Indonesia 2045 (Vision of Indonesia 2045). The Government of Indonesia has launched this Vision to commemorate the centenary of the Indonesian independence which will take place in 2045. This Vision aims to portray Indonesia as a strong sovereign, developed, fair, and prosperous country. To achieve this, one of the targets is to simplify procedures in order to boost public service, international cooperation and investment. A simplified legalisation procedure for public documents is thus a strategy that would contribute to an easiness of doing business, and eventually for the accomplishment of the Vision of Indonesia 2045’s targets.

A more in-depth analysis (in Indonesian) explaining the current legalization process in Indonesia and the urgency to accede to The Hague Apostille Convention 1961 can be accessed here.