Agrégateur de flux

This CEPEJ report, published on 22nd October 2020, contains data on the functioning of the judicial systems of 45 European States and 3 Observer States (Morocco, Israel and Kazakhstan). The findings are the following:

“Budget

– In 2018, European States spent on average more than 1 billion Euros for their judicial systems, equal to 72 € per inhabitant (8 € more than in 2016) and 0,33% of GDP. On average, member States allocated 65% of judicial system budget to courts, 24% to prosecution services and 11% to legal aid. Switzerland and Monaco are the countries that spend the most significant amount per inhabitant (220 € and 197 €), while Montenegro and Bosnia and Herzegovina dedicate to judicial system the highest percentage of their GDP (0.88% and 0.72%).

– Countries with a higher GDP per capita invest more per inhabitant in judicial systems, while less wealthy countries allocate more budget as a percentage of GDP, showing a greater budgetary effort for their judicial systems.

– Between 2010 and 2018, the member States and entities have slightly increased the average budget allocated to the judicial system. In 2018, all States and entities have increased the budget allocated to their judicial systems (+8%). The most significant increase (between 2016 and 2018), equal to 13% on average, has been recorded for courts’ budget and it concerns, in particular, investments in new buildings and computerisation.

– Less wealthy countries invest proportionally more on prosecution services (32% on average), while States and entities with higher GDP per capita spend relatively more in legal aid (19% on average).

– The budget allocated to courts seems to be related not only to the wealth of the country, but also to the number of courts. This may seem logical given that 65% of the court budget is spent on salaries.

– In order to rationalise budgetary resources of courts and, at the same time, reinforce specialisation and expertise, an increasing trend to outsource certain services is confirmed.

– Generally speaking, all the countries have implemented a legal aid system in criminal and other than criminal matters (representation by a lawyer before the court or legal advice), in compliance with the requirements of the European Convention on Human Rights and the case-law of the European Court which advocates an appropriate legal aid system to ensure access to justice for everyone.

– Some countries tend to have a low cost per legal aid case and a high number of cases granted legal aid, while others choose to provide a higher amount for a smaller number of cases.

Professionals

– While the number of professional judges remains globally stable, 21 judges per 100 000 inhabitants on average, significant differences are still noticed between States and entities (from 3.1 in UK-England and Wales to 101.8 in Monaco per 100 000 inhabitants). The latter can be partly explained by the diversity of judicial organisations, use of occasional professional judges and/or lay judges. Variations over the years have not led towards harmonisation.

– The number of prosecutors is tending to increase, on average 12 prosecutors per 100 000 inhabitants (in 2018, the number varies from 2.2 in Ireland to 25.1 in Ukraine).

– 31 Member States of 47 declared that public prosecutors are statutorily independent.

– While the number of prosecutors increased, their workload decreased since 2010 from 4.2 to 3.1 cases per 100 inhabitants.

– The trend towards the feminisation of judges and prosecutors is confirmed but the glass ceiling remains a reality: in 2018, at the level of all instances, there was 46% of men and 54% of women judges but 66 % male court presidents as opposed to 34 % of female court presidents; for the prosecutors : 48% of men and 52% of women but 64% of male and 36 % of female head of public prosecution offices. More and more States and entities seem to be focusing on the topic of specific provisions in favour of

– gender parity in the procedures for the recruitment and promotion of judges and prosecutors. Taking measures to promote gender balance in the higher and highest justice functions should be encouraged.

– The ratio between non-judge staff and professional judges is about 4 in 2018, this figure being quite stable through the years, the minimum being 1 in Luxembourg and the maximum 10 in UK – Northern Ireland.16 European States set up Rechtspfleger.

–  Salaries of judges vary widely between States and entities, but also between instances. The changes in salaries in recent years are not uniform and do not lead to harmonisation. The ratio between salaries of judges and national average salary shows significant disparities in Europe: from 0.9/1.6 in Germany (at the beginning /the end of career) to 4.8/31.5 in Ukraine (at the beginning /the end of career).

– Meaningful disparities also persisted in the salaries of prosecutors. The ratio between salaries of prosecutors and national average salary shows significant disparities in Europe: from 0.8 in Ireland and 4.0 in Romania (at the beginning of the career); 1.6 in Germany and 6.4 in Italy (at the end of the career). 

– Prosecutors’ salaries are, on average, lower than those of judges.

– The number of lawyers is also continuing to increase in Europe, with an average of 164 lawyers per 100 000 inhabitants, with important disparities between States (in 2018, from 16 per 100 000 inhabitants in Azerbaijan to 488 per 100 000 inhabitants in Luxembourg). This constant increase between 2010 and 2018 (27%) is mainly due to economic growth.

– Recent developments suggest that the topic of gender balance with regard to lawyers is being taken into account by an increasing number of States and entities. Currently, however, European lawyers are still predominantly male.

Courts

– Between 2010 and 2018 there was a reduction in the number of courts in Europe, both in terms of legal entities (-19% on average for the first instance courts of general jurisdiction) and geographical locations (-10 % on average).

–  For the same period, we can also notice an increase in the specialization of courts (the average share of specialized courts increased from 21% to 26,7% from 2010 to 2018).

– Small claims were only slightly affected by the above-mentioned developments. Only the average amount of what constitutes a small claim has increased (from 4 029 € in 2016 to 4 836 € in 2018).

Court users

– More and more member States provide specific information to users, both on the judicial system in general and on individual court proceedings.

– States address more and more specific information and arrangements to vulnerable categories of users (the complaints procedures regarding functioning of justice exist in 43 States, implementation of compensation systems (the average amount of compensation is 6 353 € in 2018), user satisfaction surveys, establishment of monitoring mechanisms in respect of violations of the European Convention on Human Rights).

– In order to improve further social responsibility and trust in the judicial system, member States should devote additional resources and staff to improvecommunication with the users of justice.

– The analyses and use of data, gathered through quantitative and qualitative research into the satisfaction of court users, increases the legitimacy of judicial systems and helps court leaders and administrations provide a better and more efficient service of justice.

– The use of information systems to support such activities is crucial. However, it is “interactional justice “- the human touch, the treatment of all involved in judicial proceedings with dignity and respect, that substantially helps to provide just decisions and consequently build trust in justice.

Information and communication technology (ICT)

–  ICT has become a constitutive part of justice service provision. States have focused their efforts on court and case management tools, more then on decision support and communication tools. The general ICT index (court and case management, decision support and communication with courts) varies from 1.52 in Cyprus to 9.79 in Latvia.

– European judicial systems are increasingly moving from paper-based procedures to electronic ones. This is true for the activities carried out within the courts, as well as for the communication exchanges between courts and all parties.

– The economic cost of this innovation should be considered with caution as the ICT budget may vary considerably during the development, deployment and maintenance phases.

– Court systems with comparatively higher resources generally tend to invest a higher percentage of the court budget in ICT.

– ICT are an integral component of the judicial systems, which is reflected both in the regulatory and governance choices implemented by the member States.

– Member States and entities have set up various solutions regarding leadership in ICT governance: most States tend to consider both of them equally relevant, with a slight prevalence of the judicial one.

– As basic technologies are now generally fully deployed in member States and entities, this analysis has focused on court and case management tools, decision support tools and tools for communication between courts, professionals and/or court users, showing very high levels of deployment.

– The high levels achieved in the areas of decision support, e-communication and remote proceedings increase the need to monitor the impact of these tools on principles such as fairness, impartiality and judicial independence.

Justice in the context of the Covid-19 crisis

– ICTs have proven to be valuable and even indispensable tools for the continued work of judicial systems during the COVID-19 crisis in Europe.

– In many cases, their use has required not only changes in legislation but also technical improvements, as has been observed in member States and entities.

– Concerns have been expressed about the use of certain ICT tools in court proceedings, but it is still too early to assess their actual impact on the parties’ rights.

– To address these issues, the CEPEJ has adopted on 10 June 2020 a  Declaration on lessons learnt and challenges faced by the judiciary during and after the Covid-19 Pandemic.

Efficiency

– The clearance rates give a generally positive balance sheet (stable and close to 100%) and conclusions can be more usefully drawn from the disposition time analysis. Criminal justice is the most effective at all three levels of court (disposition time at first instance: 122 days; second instance: 104 days ; third instance: 114 days) and the second instance courts appear as the most efficient in all areas (disposition time in civil and commercial cases: 141 days; administrative cases: 209 days; criminal cases: 104 days). It should be noted that although the results are unquestionably positive, they have deteriorated over time in several States and entities analysed.

– Conversely, it is at first instance and in the field of administrative law that the courts have proven to be the least efficient. Administrative cases tend to record the highest DT (241 days at 1st instance, 209 days at 2nd instance, 228 days at 3rd instance) with, however, considerable disparities between States and entities.

– Cases concerning asylum seekers and the right to entry and stay for aliens continue to have a strong impact on European jurisdictions. Many States and entities reported productivity problems related to these case types. In 2018, States received 291 443 cases concerning asylum seekers or 8 % fewer than in 2016. 183 920 incoming cases pertaining to the right to entry and stay for aliens represent an increase of 84 %. The highest number of incoming cases concerning asylum seekers was recorded in Germany, 149 593 cases. The second highest inflow is in France which received 58 671 asylum seekers cases and 79 807 right of entry and stay for aliens cases. Italy, then, received 48 891 asylum seekers cases and 2 224 right of entry and stay for aliens cases.

– The share of cases older than two years is available for a limited set of States and entities. Within these, the shares of cases older than two years do not vary over time.

– A number of States and entities have undergone or are currently undergoing significant justice sector reforms which have influenced the performance of their systems. The results of these States and entities need to be monitored cautiously and with an understanding of the context”.

Source: https://rm.coe.int/link-to-the-presentation-note-en/16809fdc75

For further information, see https://www.coe.int/en/web/cepej/special-file-publication-of-the-report-european-judicial-systems-cepej-evaluation-report-2020-evaluation-cycle-2018-data-

The ANNUAL MEETING OF THE ROYAL NETHERLANDS SOCIETY OF INTERNATIONAL LAW (ILA Dutch Branch) is online accessible on Friday 6 NOVEMBER 2020 (13:30 – 16:30 CET).  

 Over the decades, international law adapted in many ways to the quickly evolving, multi-facetted digital reality, and one of the central questions now is whether or not concepts and ideas developed in the ‘predigital era’ still fit the digitalised world. Is international law, both public and private, ready for the digital era or has it rather been a ‘fragmented follower of developments’ and should it fundamentally rethink a number of notions and approaches? 

Four speakers will present their papers on the adaptability of (private) international law to the digital environment. Two officials of the Dutch Ministry of Foreign Affairs (M. BUSSTRA and W. THEEUWEN) will give an overview on “International Law in the Context of Cyber Operations”. Y. BURUMA, a Justice of the Supreme Court of The Netherlands, will present his views on “International Law and Cyberspace – Issues of Sovereignty and the Common Good”, while D. SVANTESSON, Professor at the University of Bond (Australia) will consider whether “International Law [Is] Ready for the (Already Ongoing) Digital Age: Perspectives from Private and Public International Law”. 

There is ample room for debate after these presentations. Given the topical theme and the open debate with public and private international lawyers, this event may be of interest to some readers of this blog. Should you be interested, please register no later than 3 November 2020 by sending an email to info@knvir.org.

Thanks to Marta Pertegás Sender for providing the text

In the very recent case of Yankey v Austin (2020) LPELR-49540(CA)  the Nigerian Court of Appeal was faced with the issue of whether a court in the United State has jurisdiction to make an order affecting immovable property in Lagos, Nigeria.

The facts of the case was that the claimant/respondent previously sued the defendant/appellant before the Family Court Division, of the District of the Fourth Judicial District, County of Hennepin, State of Minnesota (“US Court”) – where they resided at the time, for dissolution of their marriage that was celebrated in Nigeria. The defendant/appellant as respondent before the US Court did not contest the dissolution of the marriage. They entered into a Mutual Termination Agreement, which is called Terms of Settlement in the Nigerian legal system. There was no trial and no evidence was adduced. Their homestead at 4104 Lakeside Avenue, Brooklyn Center, Minesota was awarded exclusively to the claimant/respondent as petitioner before the US Court. It did not end there.

The claimant/respondent subsequently instituted proceedings before the Lagos State High Court, Nigeria, and claimed joint ownership of the defendant/appellant’s property situated in Lagos, by relying on the US judgment. The lower court granted the claim.

The defendant/appellant appealed to the Court of Appeal, which unanimously allowed the appeal by overturning the decision of the lower court. The Court of Appeal (Ogakwu JCA) thoroughly analysed the documents which were in issue: (1) Mutual Termination Agreement, (2) Judgment of the US Court, and (3) petition for the dissolution of the parties marriage in the US Court. The Court of Appeal reached the conclusion that there was nothing in the documents in issue which suggests that the US judge granted joint ownership of the defendant/appellant’s landed property with the plaintiff/respondent. It also held that based on the principle of lex situs the US Court cannot make an order affecting immovable property in Nigeria.

The decision in Yankey  is an important decision from the perspective of public and private international law. Based on the principle of territorial sovereignty, a foreign court cannot make an order affecting immovable property in another country.  This rule as applied in Nigeria  –  often referred to as the  Mocambique  rule  –  is derived from the English case of British South Africa Company v Companhia de Mocambique [1893] AC 602. In that case, the plaintiff s’   statement of claim alleged that they were rightful owners of large tracts of land in South Africa, yet agents of the defendants unlawfully took possession of the lands and displaced the plaintiff  company and its servants, agents, and tenants. The plaintiffs also alleged that the defendants not only stole the plaintiff s’  personal property, but also assaulted and imprisoned some of them. It was held that an English court would not entertain an action to recover damages for a trespass to land situated abroad.

It is worth mentioning that in Nigeria, an  exception to the Mozambique rule exists where the action between the parties is founded on some personal obligation arising out of a contract or implied contract, a fiduciary relationship, fraud or other unconscionable conduct, and does not depend on the law of the  locus  of the immovable property to exist (British Bata Shoe Co Ltd v Melikian   ( 1956 )  1 FSC 100;     Aluminium Industries Aktien Gesellschaft  v Federal Board of Inland Revenue   ( 1971 )  2 ALR Comm 121   , (1971) 2 NCLR 1)

The Mozambique rule has been applied  by the Nigerian  Supreme Court only in inter-state matters such as in Lanleyin v Rufai  ( 1959 )  4 FSC 184. Yankey is the first case where it was applied in a case with truly international dimensions. Admittedly, the Court of Appeal did not explicitly mention the Mozambique rule or the Nigerian Supreme Court cases that have applied it in inter-state matters. The truth is that there was no need for the Court of Appeal to do so. Based on the facts of the case, the US Court never made an order for joint ownership of landed property in Lagos.

Yankey is a most welcome decision. If the lower court’s decision was allowed to stand, it would mean that any foreign court can generally make an order affecting landed property in Nigeria. The Court of Appeal was therefore right to hold that the US Court never made an order for joint ownership of landed property for the parties in this case. It was also right to hold that a foreign court cannot make an order of joint ownership of immovable property in Nigeria.

Written by Bastian Brunk, research assistant at the Humboldt University of Berlin and doctoral candidate at the Institute for Comparative and Private International Law at the University of Freiburg.

 

In April of 2020, EU Commissioner Didier Reynders announced plans for a legislative initiative that would introduce EU-wide mandatory human rights due diligence requirements for businesses. Only recently, Reynders reiterated his intentions during a conference regarding “Human Rights and Decent Work in Global Supply Chains” which was hosted by the German Federal Ministry of Labour and Social Affairs on the 6. October, and asseverated the launch of public consultations within the next few weeks. A draft report, which was prepared by MEP Lara Wolters (S&D) for the European Parliament Committee on Legal Affairs, illustrates what the prospective EU legal framework for corporate due diligence could potentially look like. The draft aims to facilitate access to legal remedies in cases of corporate human rights abuses by amending the Brussels Ibis Regulation as well as the Rome II Regulation. However, as these amendments have already inspired a comments by Geert van Calster, Giesela Rühl, and Jan von Hein, I won’t delve into them once more. Instead, I will focus on the centre piece of the draft report – a proposal for a Directive that would establish mandatory human rights due diligence obligations for businesses. If adopted, the Directive would embody a milestone for the international protection of human rights. As is, the timing could simply not be better, since the UN Guiding Principles (UNGPs) celebrate their 10th anniversary in 2021. The EU should take this opportunity to present John Ruggie, the author of the UNGPs, with a special legislative gift. However, I’m not entirely sure if Ruggie would actually enjoy this particular present, as the Directive has obvious flaws. The following passages aim to accentuate possible improvements, that would lead to the release of an appropriate legal framework next year. I will not address every detail but will rather focus on the issues I consider the most controversial – namely the scope of application and the question of effective enforcement.

 

General Comments

 

To begin with a disclaimer, I believe the task of drafting a legal document on the issue of business and human rights to be a huge challenge. Not only does one have to reconcile the many conflicting interests of business, politics, and civil society, moreover, it is an impossible task to find the correct degree of regulation for every company and situation. If the regulation is too weak, it does not help protect human rights, but only generates higher costs. If it is too strict, it runs the risk of companies withdrawing from developing and emerging markets, and – because free trade and investment ensure worldwide freedom, growth, and prosperity – of possibly inducing an even worse human rights situation. This being said, the current regulatory approach should first and foremost be recognised as a first step in the right direction.

 

I would also like to praise the idea of including environmental and governance risks in the due diligence standard (see Article 4(1)) because these issues are closely related to each other. Practically speaking, the conduct of companies is not only judged based on their human rights performance but rather holistically using ESG or PPP criteria. All the same, I am not sure whether or not this holistic approach will be accepted in the regulatory process: Putting human rights due diligence requirements into law is difficult enough, so maybe it would just be easier to limit the proposal to human rights. Nonetheless, it is certainly worth a try.

 

Moving on to my criticism.

 

Firstly, the draft is supposed to be a Directive, not a Regulation. As such, it cannot impose any direct obligations on companies but must first be transposed into national law. However, the proposal contains a colourful mix of provisions, some of which are addressed to the Member States, while others impose direct obligations on companies. For example, Article 4(1) calls upon Member States to introduce due diligence obligations, whereas all other provisions of the same article directly address companies. In my eyes, this is inconsistent.

 

Secondly, the Directive uses definitions that diverge from those of the UNGPs. For example, the UNGPs define “due diligence” as a process whereby companies “identify, prevent, mitigate and account for” adverse human rights impacts. This seems very comprehensive, doesn’t it? Due diligence, as stipulated in the Directive, goes beyond that by asking companies to identify, cease, prevent, mitigate, monitor, disclose, account for, address, and remediate human rights risks. Of course, one could argue that the UNGP is incomplete and the Directive fills its gaps, but I believe some of these “tasks” simply redundant. Of course, this is not a big deal by itself. But in my opinion, one should try to align the prospective mechanism with the UNGPs as much as possible, since the latter are the recognised international standard and its due diligence concept has already been adopted in various frameworks, such as the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the ISO 26000. An alignment with the UNGP, therefore, allows and promotes coherence within international policies.

 

Before turning to more specific issues, I would like to make one last general remark that goes in the same direction as the previous one. While the UNGP ask companies to respect “at minimum” the “international recognized human rights”, meaning the international bill of rights (UDHR, ICCPR, ICESCR) and the ILO Core Labour Standards, the Directive requires companies to respect literally every human rights catalogue in existence. These include not only international human rights documents of the UN and the ILO, but also instruments that are not applicable in the EU, such as the African Charter of Human and People’s Rights, the American Convention of Human Rights, and (all?) “national constitutions and laws recognising or implementing human rights”. This benchmark neither guides companies nor can it be monitored effectively by the authorities. It is just too ill-defined to serve as a proper basis for civil liability claims or criminal sanctions and it will probably lower the political acceptance of the proposal.

 

Scope of Application

 

The scope of application is delineated in Article 2 of the Directive. It states that the Directive shall apply to all undertakings governed by the law of a Member State or established in the territory of the EU. It shall also apply to limited liability undertakings governed by the law of a non-Member State and not established within EU-territory if they operate in the internal market by selling goods or providing services. As one can see, the scope is conceivably broad, which gives rise to a number of questions.

 

First off, the Directive does not define the term “undertaking”. Given the factual connection, we could understand it in the same way as the Non-Financial Reporting Directive (2014/95/EU) does. However, an “undertaking” within the scope of the Non-Financial Reporting Directive refers to the provisions of the Accounting Directive (2013/34/EU), which has another purpose, i.e. investor and creditor protection, and is, therefore, restricted to certain types of limited liability companies. Such a narrow understanding would run counter to the purpose of the proposed Directive because it excludes partnerships and foreign companies. On the other hand, “undertaking” probably does mean something different than in EU competition law. There, the concept covers “any entity engaged in an economic activity, regardless of its legal status” and must be understood as “designating an economic unit even if in law that economic unit consists of several persons, natural or legal” (see e.g. CJEU, Akzo Nobel, C-97/08 P, para 54 ff.). Under EU competition law, the concept is, therefore, not limited to legal entities, but also encompasses groups of companies (as “single economic units”). This concept of “undertaking”, if applied to the Directive, would correspond with the term “business enterprises” as used in the UNGP (see the Interpretive Guide, Q. 17). However, it would ignore the fact that the parent company and its subsidiaries are distinct legal entities, and that the parent company’s legal power to influence the activities of its subsidiaries may be limited under the applicable corporate law. It would also lead to follow-up questions regarding the precise legal requirements under which a corporate group would have to be included. Finally, non-economic activities and, hence, non-profit organisations would be excluded from the scope, which possibly leads to significant protection gaps (just think about FIFA, Oxfam, or WWF). In order to not jeopardise the objective – ensuring “harmonization, legal certainty and the securing of a level playing field” (see Recital 9 of the Directive) – the Directive should not leave the term “undertaking” open to interpretation by the Member States. A clear and comprehensive definition should definitely be included in the Directive, clarifying that “undertaking” refers to any legal entity (natural or legal person), that provide goods or services on the market, including non-profit services.

 

Secondly, the scope of application is not coherent for several reasons. One being that the chosen form of the proposal is a Directive, rather than a Regulation, thus providing for minimum harmonisation only. It is left to the Member States to lay down the specific rules that ensure companies carrying out proper human rights due diligence (Article 4(1)). This approach can lead to slightly diverging due diligence requirements within the EU. Hence, the question of which requirements a company must comply with arises. From a regulatory law’s perspective alone, this question is not satisfactorily answered. According to Article 2(1), “the Directive” (i.e. the respective Member States’ implementation acts) applies to any company which has its registered office in a Member State or is established in the EU. However, the two different connecting factors of Article 2(1) have no hierarchy, so a company must probably comply with the due diligence requirements of any Member State where it has an establishment (agency, branch, or office). Making matters worse (at least from the company’s perspective), in the event of a human rights lawsuit, due diligence would have to be characterised as a matter relating to non-contractual obligations and thus fall within the scope of the new Art. 6a Rome II. The provisions of this Article potentially require a company to comply with the due diligence obligations of three additional jurisdictions, namely lex loci damni, lex loci delicti commissi, and either the law of the country in which the parent company has its domicile (in this regard, I agree with Jan von Hein who proposes the use not of the company’s domicile but its habitual residence as a connecting factor according to Article 23 Rome II) or, where it does not have a domicile (or habitual residence) in a Member State, the law of the country where it operates.

 

That leads us to the next set of questions: When does a company “operate” in a country? According to Article 2(2), the Directive applies to non-EU companies which are not established in the EU if they “operate” in the internal market by selling goods or providing services. But does that mean, for example, that a Chinese company selling goods to European customers over Amazon must comply fully with European due diligence requirements? And is Amazon, therefore, obliged to conduct a comprehensive human rights impact assessment for every retailer on its marketplace? Finally, are states obliged to impose fines and criminal sanctions (see Article 19) on Amazon or the Chinese seller if they do not meet the due diligence requirements, and if so, how? I believe that all this could potentially strain international trade relations and result in serious foreign policy conflicts.

 

Finally, and perhaps most controversially in regard to the scope, the requirements shall apply to all companies regardless of their size. While Article 2(3) allows the exemption of micro-enterprises, small companies with at least ten employees and a net turnover of EUR 700,000 or a balance sheet total of EUR 350,000 would have to comply fully with the new requirements. In contrast, the French duty of vigilance only applies to large stock corporations which, including their French subsidiaries and sub-subsidiaries, employ at least 5,000 employees, or including their worldwide subsidiaries and sub-subsidiaries, employ at least 10,000 employees. The Non-Financial Reporting Directive only applies to companies with at least 500 employees. And the due diligence law currently being discussed in Germany, will with utmost certainty exempt companies with fewer than 500 employees from its scope and could perhaps even align itself with the French law’s scope. Therefore, I doubt that the Member States will accept any direct legal obligations for their SMEs. Nonetheless, because the Directive requires companies to conduct value chain due diligence, SMEs will still be indirectly affected by the law.

 

Value Chain Due Diligence

 

Value chain due diligence, another controversial issue, is considered to be anything but an easy task by the Directive. To illustrate the dimensions: BMW has more than 12,000 suppliers, BASF even 70,000. And these are all just Tier 1 suppliers. Many, if not all, multinational companies probably do not even know how long and broad their value chain actually is. The Directive targets this problem by requiring companies to “make all reasonable efforts to identify subcontractors and suppliers in their entire value chain” (Article 4(5)). This task cannot be completed overnight but should not be impossible either. For example, VF Corporation, a multinational apparel and footwear company, with brands such as Eastpack, Napapijri, or The North Face in its portfolio, has already disclosed the (sub?)suppliers for some of its products and has announced their attempt to map the complete supply chain of its 140 products by 2021. BASF and BMW will probably need more time, but that shouldn’t deter them from trying in the first place.

 

Mapping the complete supply chain is one thing; conducting extensive human rights impact assessments is another. Even if a company knows its chain, this does not yet mean that it comprehends every potential human rights risk linked to its remote business operations. And even if a potential human rights risk comes to its attention, the tasks of “ceasing, preventing, mitigating, monitoring, disclosing, accounting for, addressing, and remediating” (see Article 3) it is not yet fulfilled. These difficulties call up to consider limiting the obligation to conduct supply chain due diligence to Tier 1 suppliers. However, this would not only be a divergence from the UNGP (see Principle 13) but would also run counter to the Directive’s objective. In fact, limiting due diligence to Tier 1 suppliers makes it ridiculously easy to circumvent the requirements of the Directive by simply outsourcing procurement to a third party. Hence, the Directive takes a different approach by including the entire supply chain in the due diligence obligations while adjusting the required due diligence processes to the circumstances of the individual case. Accordingly, Article 2(8) states that “[u]ndertakings shall carry out value chain due diligence which is proportionate and commensurate to their specific circumstances, particularly their sector of activity, the size and length of their supply chain, the size of the undertaking, its capacity, resources and leverage”. I consider this an adequate provision because it balances the interests of both companies and human rights subjects. However, as soon as it comes to enforcing it, it burdens the judge with a lot of responsibility.

 

Enforcement

 

The question of enforcement is of paramount importance. Without effective enforcement mechanisms, the law will be nothing more than a bureaucratic and toothless monster. We should, therefore, expect the Directive – being a political appeal to the EU Commission after all – to contain ambitious proposals for the effective implementation of human rights due diligence. Unfortunately, we were disappointed.

 

The Directive provides for three different ways to enforce its due diligence obligations. Firstly, the Directive requires companies to establish grievance mechanisms as low-threshold access to remedy (Articles 9 and 10). Secondly, the Directive introduces transparency and disclosure requirements. For example, companies should publish a due diligence strategy (Article 6(1)) which, inter alia, specifies identified human rights risks and indicates the policies and measures that the company intends to adopt in order to cease, prevent, or mitigate those risks (see Article 4(4)). Companies shall also publish concerns raised through their grievance mechanisms as well as remediation efforts, and regularly report on progress made in those instances (Article 9(4)). With these disclosure requirements, the Directive aims to enable the civil society (customers, investors and activist shareholders, NGOs etc.) to enforce it. Thirdly, the Directive postulates public enforcement mechanisms. Each Member State shall designate one or more competent national authorities that will be responsible for the supervision of the application of the Directive (Article 14). The competent authorities shall have the power to investigate any concerns, making sure that companies comply with the due diligence obligations (Article 15). If the authority identifies shortcomings, it shall set the respective company a time limit to take remedial action. It may then, in case the company does not fulfil the respective order, impose penalties (especially penalty payments and fines, but also criminal sanctions, see Article 19). Where immediate action is necessary to prevent the occurrence of irreparable harm, the competent authorities may also order the adoption of interim measures, including the temporary suspension of business activities.

 

At first glance, public enforcement through inspections, interim measures, and penalties appear as quite convincing. However, the effectiveness of these mechanisms may be questioned, as demonstrated by the Wirecard scandal in Germany. Wirecard was Germany’s largest payment service provider and part of the DAX stock market index from September 2018 to August 2020. In June of 2020, Wirecard filed for insolvency after it was revealed that the company had cooked its books and that EUR 1.9 billion were “missing”. In 2015 and 2019, the Financial Times already reported on irregularities in the company’s accounting practices. Until February 2019, the competent supervisory authority BaFin did not intervene, but only commissioned the FREP to review the falsified balance sheet, assigning only a single employee to do so. This took more than 16 months and did not yield any results before the insolvency application. While it is true that the Wirecard scandal is unique, it showcased that investigating malpractices of large multinational companies through a single employee is a crappy idea. Public enforcement mechanisms only work if the competent authority has sufficient financial and human resources to monitor all the enterprises covered by the Directive. So how much manpower does it need? Even if the Directive were to apply to companies with more than 500 employees, in Germany alone one would have to monitor more than 7.000 entities and their respective value chains. We would, therefore, need a whole division of public inspectors in a gigantic public agency. In my opinion, that sounds daunting. That does not mean that public enforcement mechanisms are completely dispensable. As Ruggie used to say, there is no single silver bullet solution to business and human rights challenges. But it is also important to consider decentralised enforcement mechanisms such as civil liability. In contrast to public enforcement mechanisms, civil liability offers victims of human rights violations “access to effective remedy”, which, according to Principle 25, is one of the main concerns of the UNGP.

 

So, what does the Directive say about civil liability? Just about nothing. Article 20 only states that “[t]he fact that an undertaking has carried out due diligence in compliance with the requirements set out in this Directive shall not absolve the undertaking of any civil liability which it may incur pursuant to national law.” Alright, so there shouldn’t be a safe harbour for companies. But that does not yet mean that companies are liable for human rights violations at all. And even if it were so, the conditions for asserting a civil claim can differ considerably between the jurisdictions of the Member States. The Directive fails to achieve EU-wide harmonisation on the issue of liability. That’s not a level playing field. This problem could be avoided by passing an inclusive Regulation containing both rules concerning human rights due diligence and a uniform liability regime in case of violations of said rules. However, such an attempt would probably encounter political resistance from the Member States and result in an undesirable delay of the legislative process. A possible solution could be to only lay down minimum requirements for civil liability but to leave the ultimate drafting and implementation of liability rules to the Member States. Alternatively, the Directive could stipulate that the obligations set out in Articles 4 to 12 are intended to determine the due care without regard to the law applicable to non-contractual obligations. At least, both options would ensure that companies are liable for any violation of their human rights due diligence obligations. Is that too much to ask?

Published in the BRICS Law Journal by Dr Saloni Khanderia, Associate Professor – OP Jindal Global University, India; and Visiting Associate Professor, Faculty of Law, University of Johannesburg.

 

The outbreak of the COVID-19 or the coronavirus disease 2019 has severely impacted the performance of several contracts across the globe. In some situations, the outbreak may render the performance of contracts impossible as a result of governmental restrictions in the form of national lockdowns to curb its spread. Likewise, the pandemic may adversely impact the execution of the contractual obligations by dramatically affecting the price of the performance and, thus, resulting in hardship or commercial impracticability. At other times, the pandemic will be legally construed to not affect the performance of a contract. In domestic contracts, the consequences of such non-performance would depend on the principles of national law.

In comparison, agreements with a foreign element (international contracts) are likely to increase the complexity of deciding claims arising from the non-performance of contracts due to the COVID-19 outbreak. The rights and liability of the parties would chiefly depend on the law that will govern the agreement – which differs across the globe. Several contracts would include a force majeure clause to exonerate the parties from performance on the occurrence of an event such as a pandemic. The courts’ interpretation of such force majeure clauses similarly differs across the globe. The laws of some countries would excuse the parties from performing their contractual obligations even if the pandemic resulted in hardship. Others would strictly construe the terms of such clauses and would invalidate them if the occurrence of the pandemic did not make the performance impossible. The purpose of this paper is to examine the non-performance of transnational contracts due to the COVID-19 outbreak when they are governed by Indian law. It highlights the situations when an international contract for the sale of goods or services whose performance has been allegedly hindered due to COVID-19 would a) frustrate and b) breach the agreement under Indian law. The paper provides a comparative analysis of Indian law with several jurisdictions such as France, Germany, Austria, China, the United Kingdom [UK], Australia and the United States [US] to demonstrate that the law of the former is not well-equipped to deal with complex lawsuits arising due to the non-performance of contracts as a result of the pandemic.

The article may be accessed here.

A collection of essays edited by Florian Heindler (Sigmund Freud University, Vienna) has recently been published by Jan Sramek Verlag, in its Interdisciplinary Studies of Comparative and Private International Law series. The book celebrates the 40th birthday of the Austrian Private International Law Act.

The essays collected are authored by scholars for various countries and focus on the possible reform of the Act and its current value.

Authors include Andrea Bonomi, Axel Flessner, Fabienne Jault-Seseke, Thomas John, Caroline Sophie Rupp, Thomas Bachner, Ena-Marlis Bajons, Wolfgang Faber, Edwin Gitschthaler, Florian Heindler, Helmut Heiss, Brigitta Lurger, Martina Melcher, Andreas Schwartze, and Bea Verschraegen.

More details available here.

The Russian Legal Information Agency has announced that Russia’s Justice Ministry, acting jointly with the Foreign Ministry and the Supreme Court of the Russian Federation, proposed that the Government pass a recommendation to sign the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the ‘Convention’).

Although there were previously fake news circulating on the internet in this respect, it seems that Russia may well ratify the Convention or, at the very least, that Russian elites are contemplating doing so.

But why would Russia do that?

According to the Russian Agency, the answer seems to be that Russia would want to “create conditions for the recognition and enforcement of decisions taken by Russian courts in all [contracting States] of the new Convention.”

So, Russia hopes to improve the enforcement of Russian judgments abroad. This seems quite logical. Improving the enforcement of the forum’s judgments abroad is a common rationale for entering into bilateral treaties on the enforcement of foreign judgments and for having a reciprocity requirement in the forum’s law of foreign judgments.

There is, however, a downside: by entering into a treaty on the enforcement of foreign judgments, the contracting States also commit themselves to enforcing judgments rendered by other contracting States. In other words, if Russia ratifies the 2019 Convention, it will also promise to enforce in Russia judgments rendered by the courts of other contracting States.

The Russian law of foreign judgments is not liberal. The basic rule is that Russia only enforces judgments on the basis of a treaty. While Russian courts have sometimes accepted to enforce foreign judgments in the absence of treaty under the principle of comity, Russian law remains conservative in this respect.

In contrast, many other States have a very liberal law of foreign judgments, and have enforced Russian judgements on the basis of their common law of foreign judgments, without caring for any form of reciprocity. These liberal States include, among many others, the United States and France. In the US, in particular, courts have enforced Russian judgments on numerous occasions (in 2018, Russian judgments were enforced by New York and California courts, for instance). The 2019 Convention will not improve the prospects of enforcement of Russian judgments in those states.

So the main effect of entering into the 2019 Convention may well be that Russia will commit to enforce judgments that it would not enforce today. In other words, the 2019 Convention would certainly liberalize the Russian law of foreign judgments, but it is unclear to which extent it would improve the enforcement of Russian judgments abroad.

Surely, there are other States with a conservative law of foreign judgments. If these other States ratify the Convention, Russia will have improved the prospects of enforcing its judgments in these states. But who are these states and are they planning to sign the 2019 Convention? And are these states Significant trading partners of Russia? Otherwise, why should Russia care?

Germany is no doubt one of the biggest trading partners of Russia, and there is a reciprocity requirement under the German law of foreign judgments. Maybe German courts have denied enforcement to Russian judgments, but maybe they have considered that the prospects of enforcement of German judgments in Russia were such that German courts should enforce Russian judgments. Our German readers will tell.

A major judicial partner of Russia has been, lately, England. The English common law of judgments is pretty conservative, in particular with respect to the assessment of the jurisdiction of foreign courts. Because of Brexit, England is likely to sign the 2019 Convention. By entering into the Convention as well, the enforcement of Russian judgments in England would then improve. This might be enough of an incentive for Russia to enter into the Convention.

It would be great news for the rest of the world if Russia ratified the 2019 Judgments Convention. Whether it would be good news for Russia remains to be seen.

Today (25 October 2020) is the 40th Anniversary of the HCCH Child Abduction Convention. With more than 100 Contracting Parties, the HCCH Child Abduction Convention is one of the most successful Conventions of the Hague Conference on Private International Law (HCCH). As indicated in the title, this is a time for celebration but also a time for reflection. The Child Abduction Convention faces several challenges, some of which have been highlighted in this blog. The most salient one is that primary carers (usually mothers) are now the main abductors, which many argue was not the primary focus of the deliberations in the late 70s and that the drafters assumed that primarily (non-custodial) fathers were the abductors. See the most recent statistical analysis by Nigel Lowe and Victoria Stephens (year: 2015 applications), where it shows that 73% of the abductors were mothers (most primary or joint-primary carers) and 24% were fathers.

A related issue is that custody laws continue to change and are granting custody rights to non-primary carers (e.g. unmarried fathers, ne exeat clauses, etc.), which expands the scope of the Child Abduction Convention. There is also a growing trend of joint parenting.

Another challenge is the increasing importance of human rights law and its interaction with the Child Abduction Convention (see our previous post Opening Pandora’s Box); in addition, the implementation and application of article 13(1)(b) of the Child Abduction Convention also poses challenges (see our previous posts on the HCCH Guide to Good Practice on the grave-risk exception under article 13(1)(b) of the Child Abduction Convention through the lens of human rights: Part I and Part II).

Moreover, other challenges have arisen in these difficult times of pandemic. In this regard, Nadia Rusinova wrote a post on the “Child Abduction in times of Corona” and another one on “Remote Child-Related Proceedings in Times of Pandemic – Crisis Measures or Justice Reform Trigger?”

Last but not least, there is much uncertainty surrounding Brexit and the new legal framework of the UK. How about all the UK case law regarding Brussels II bis and the related issues regarding the Child Abduction Convention?

Such obstacles are not insurmountable (at least, I hope). Nevertheless, much reflection is needed to continue improving the operation of the Child Abduction Convention in this ever-changing world. Undoubtedly, the Child Abduction Convention is a must-have tool for States to combat internationally removal and retention of children by their parents or someone from the inner family circle in accordance with the UN Convention on the Rights of the Child.

For those of you who are interested in getting more information about this Convention: In addition to the Guides to Good Practice published by the HCCH (open access), some of the leading works in this area are (I will concentrate on books as there are countless articles, see also bibliography of the HCCH here. Some of the books are from Hart, click on the link on the top of the banner for more info):

Monographic works:

Schuz, Rhona. The Hague Child Abduction Convention: A Critical Analysis. Studies in Private International Law; Volume 13. Oxford: Hart Publishing, 2013.  Former Secretary General of the HCCH, Hans van Loon, wrote a very helpful book review. See Van Loon, Hans, “R. Schuz, the Hague Child Abduction Convention: A Critical Analysis.” Netherlands International Law Review, 62, no. 1 (April, 2015): 201–206.

Beaumont, Paul R. and Peter E. McEleavy. The Hague Convention on International Child Abduction. Oxford Monographs in Private International Law. Oxford: Oxford University Press, 1999.

Garbolino, James D. and Federal Judicial Center. The 1980 Hague Convention on the Civil Aspects of International Child Abduction: A Guide for Judges, 2015 (open access).

More specific topic:

Written by Conflictoflaws.net’s General Editor: Thalia Kruger.

Kruger, Thalia. International Child Abduction: The Inadequacies of the Law. Studies in Private International Law; Vol. 6. Oxford: Hart Publishing, 2011.

Works in Spanish:

Child abduction and mediation

Chéliz Inglés, María del Carmen. La sustracción internacional de menores y la mediación: Retos y vías prácticas de solución. Monografías. Valencia: Tirant lo Blanch, 2019.

Forcada Miranda, Francisco Javier. Sustracción internacional de menores y mediación familiar. Madrid: Sepín, 2015.

Within the Latin-American region

Tenorio Godínez, Lázaro, Nieve Rubaja, Florencia Castro, ed. Cuestiones complejas en los procesos de restitución internacional de niños en Latinoamérica. México: Porrúa, 2017.

Tenorio Godínez, Lázaro, Graciela Tagle de Ferreyra, ed. La Restitución Internacional de la niñez: Enfoque Iberoamericano doctrinario y jurisprudencial. México: Porrúa, 2011.

This is just a short list; please feel free to add other books that you may be aware of.

The HCCH news item is available here. The HCCH Access to Justice Convention is also celebrating its 40th anniversary. Unfortunately, this Convention is less used in practice.

Yesterday, 23 October 2020, the Republic of Serbia ratified the HCCH Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, which will enter into force for Serbia on 1 February 2021.

Source: https://www.hcch.net/en/news-archive/details/?varevent=757