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Ilaria Viarengo and Francesca Villata (both University of Milan) have edited Planning the Future of Cross Border Families – A Path Through Coordination, which has just been published by Hart.

This book is built upon the outcomes of the EUFam’s Project, financially supported by the EU Civil Justice Programme and led by the University of Milan. Also involved are the Universities of Heidelberg, Osijek, Valencia and Verona, the MPI in Luxembourg, the Italian and Spanish Family Lawyers Associations and training academies for judges in Italy and Croatia. The book seeks to offer an exhaustive overview of the regulatory framework of private international law in family and succession matters. The book addresses current features of the Brussels IIa, Rome III, Maintenance and Succession Regulations, the 2007 Hague Protocol, the 2007 Hague Recovery Convention and new Regulations on Property Regimes. The contributions are authored by more than 30 experts in cross-border family and succession matters. They introduce social and cultural issues of cross-border families, set up the scope of all EU family and succession regulations, examine rules on jurisdiction, applicable law and recognition and enforcement regimes and focus on the current problems of EU family and succession law (lis pendens in third States, forum necessitatis, Brexit and interactions with other legal instruments). The book also contains national reports from 6 Member States and annexes of interest for both legal scholars and practitioners (policy guidelines, model clauses and protocols).

Authors include Christian Kohler, Thomas Pfeiffer, Rosario Espinosa Calabuig, Diletta Danieli, Mirela Župan, Martina Drventic, Carmen Azcárraga Monzonís, Pablo Quinzá Redondo, Guillermo Palao Moreno, Thalia Kruger, Jacopo Re, Stefania Bariatti, Elena D’Alessandro, Cristina González Beilfuss, Maria Caterina Baruffi, Paul Beaumont, Patrick Kinsch, Laura Carballo Pineiro, Andrea Schulz, Hrvoje Grubišic, Cinzia Peraro, and Marta Requejo Isidro.

More information here.

Case C‑629/19 Sappi Austria Produktions-GmbH & Co. KG and Wasserverband ‘Region Gratkorn-Gratwein’ v Landeshauptmann von Steiermark in which the CJEU held on Wednesday is in my off the cuff view (I did not research it in the recent case-law) the first case where the CJEU specifically mentions the objectives of the circular economy to support its interpretation of the core definition of ‘waste’ in the Waste Framework Directive 2008/98.

Sappi operate a large industrial paper and pulp production plant in Gratkorn (Austria). On that site is also a sewage treatment plant, operated jointly by Sappi and the Wasserverband, which treats waste water from paper and pulp production as well as municipal waste water. During the treatment of that waste water, which is required by national law, the sewage sludge in question in the main proceedings arises. That sludge is therefore made up of both substances from industrial waste water and substances from municipal waste water. Sewage sludge which is produced in the sewage treatment plant is then incinerated in a boiler of Sappi and in a waste incineration plant operated by the Wasserverband, and the steam reclaimed for the purposes of energy recovery is used in the production of paper and pulp.  hat authority found that, admittedly, the majority of the sewage sludge used for incineration, namely 97%, originated from a paper production process and that this proportion could be regarded as having ‘by-product’ status within the meaning of Paragraph 2(3a) of the AWG 2002. However, that does not apply to the proportion of sewage sludge arising from municipal waste water treatment. That sewage sludge remains waste. Since there is no de minimis limit for the classification of a substance as ‘waste’, the authority assumed that all the sewage sludge incinerated in the industrial plants of Sappi and of the Wasserverband must be classified as ‘waste’.

The CJEU first of all holds that there is no relevant secondary law which provides the kinds of qualitative criteria for sewage sludge to meet with the objectives of the WFD. If there were such laws, and the sludge meets their requirements, it would be exempt form the WFD. It then reminds the referring court, of course, of the extensive authority on the notion of waste (most recently C-624/17 Tronex) yet is happy to provide the national Court with input into the application in casu.

In principle, the sludge is waste, the Court holds: it is a residue from waste water treatment and it is being discarded.

However, the referring judge suggests that the sludge may meet the requirements of A6(1) WFD as being fully ‘recovered’ before it is used in the incineration process. It is there that the CJEU refers to the circular economy: at 68:

it is particularly relevant that the heat generated during the incineration of the sewage sludge is re-used in a paper and pulp production process and that such a process provides a significant benefit to the environment because of the use of recovered material in order to preserve natural resources and to enable the development of a circular economy.

Per C‑60/18 Tallinna Vesi, the recovery of sewage sludge entails certain risks for the environment and human health, particularly linked to the potential presence of hazardous substances. For the sludge at issue here not to be waste, presupposes that the treatment carried out for the purposes of recovery makes it possible to obtain sewage sludge with a high level of protection of the environment and human health, such as required by the WFD, which is, in particular, free from any dangerous substance. For that purpose, it is necessary to ensure that the sewage sludge in question in the main proceedings is harmless (at 66). The CJEU concludes, at 67

It is for the referring court to determine whether the conditions laid down in Article 6(1) of Directive 2008/98 are already met before the sewage sludge is incinerated. It must in particular be determined, as appropriate, on the basis of a scientific and technical analysis, that the sewage sludge meets the statutory limit values for pollutants and that its incineration does not lead to overall adverse environmental or human health impacts.

There are as yet no EU standards for the full recovery of sewage sludge, hence the ball of end of waste status is once again in the Member States’ court.

Geert.

(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.

On 2 September 2020, the French Supreme Court for private and criminal matters (Cour de cassation) issued an interesting decision on both service of judicial documents and international jurisdiction (Cass., First Civil Chamber, 2 September 2020, no. 19-15.337, unreported).

Although elementary at first view, the case provides a good opportunity to discuss the global understanding and acceptance of European private international law rules by French courts.

Facts and Legal Issues at Stake

Private investors living in France suffered financial losses following financial services contracts concluded with a company governed by English law, established in London. They sued the company before French courts. Despite an agreement conferring jurisdiction in favour of English courts provided for in the general conditions, the Parisian tribunal accepted its jurisdiction. The Parisian Court of appeal confirmed the judgement. The company appealed to the French Supreme Court.

First, the company disputed, on the basis of (inter alia) the Service of documents Regulation, the validity of the writ of summons which was served to the branch manager of the company in France, pursuant domestic procedural rules and not at its head office in London. Second, the company challenged the French jurisdiction by virtue of the jurisdiction clause, pursuant Brussels I bis Regulation, while the first judges had applied the French jurisdictional rules to invalidate the clause.

Were these two EU regulations the relevant legal basis in this case, instead of the domestic PIL rules?

Response of the French Supreme Court

Responding to the first litigious item, the French Supreme Court precludes the application of the Service of documents Regulation and confirms the decision of the Court of appeal. The presence in France of a representative of the foreign company eliminates the cross-border dimension of the transmission of documents. Therefore, the transmission of the writ of summons to the branch manager of the company in France was valid since it complied with French domestic procedural law. Then, regarding the competent jurisdiction, the validity of the agreement conferring jurisdiction shall be assessed pursuant Brussels I bis Regulation and not pursuant to national PIL. EU law prevails on national rules. The French Supreme Court invalidates the decision of the Parisian Court of appeal on that latter ground.

Assessment

Behind these two legal issues, the case deals with the articulation between EU and national PIL rules. Despite the well-known principle of primacy of EU law, French judges still have difficulties to implement EU PIL. More globally, they are maybe not fully aware of the multilevel sources in the field and, in particular, how their articulation works

But why? How could we explain this “judicial malfunction” regarding EU PIL? Without being dramatic, nor prophetic, I would like to suggest two possible lines of thought.

 On the Service of Documents Regulation

The non-application of the Service of documents Regulation is not surprising regarding the case law of the French Supreme Court. The Commercial Chamber of the Court ruled exactly the same in 2012, regarding another London-based company having a representative in France (Comm. Chamber, 20 November 2012, no. 11-17.653). Domestic procedural rules on service of documents regain the upper hand thanks to the legal representation ad agendumin France. But the French Supreme Court does not give any explicit grounds for its ruling regarding EU law. The European Regulation is set aside without consistent legal explanations. It surely contributes to the lack of awareness of French judges regarding EU PIL instruments in procedural and cooperation matters.

Some scholars have mentioned an implicit reference to recital 8 of the Regulation, which lays down that it “should not apply to service of a document on the party’s authorised representative in the Member State where the proceedings are taking place regardless of the place of residence of that party”. Recital 8 should provide for a kind of subsidiarity of the European regime on cross-border transmission of documents, vis-à-vis national rules.

However, the European Court of Justice had the opportunity to clarify the scope of this recital in Adler (C-325/11). The ECJ ruled that

from a systematic interpretation of the regulation […] [it] provides for only two circumstances in which the service of a judicial document between Member States falls outside its scope, namely (i) where the permanent or habitual residence of the addressee is unknown and (ii) where that person has appointed an authorised representative in the Member State where the judicial proceedings are taking place (para 24).

In order to support a uniform application of the regulation, the circumstances in which a judicial document has to be served in another Member State should not be conducted by reference to the national law of the Member State in which the proceedings take place (see paras 26-27). This is, however, the core reasoning of the French Supreme Court.

When should it be considered that the litigant (here the London-based company) has appointed an “authorised representative”? Should the manager of the branch of the company be considered a “representative” within the meaning of the Service of documents Regulation? In the end, the French Supreme Court could have referred a question to the Court of Justice. Its ruling takes the opposite direction.

At least, it shows that a legal explanation from the French Supreme Court of its solution would have not been superfluous.

On the Brussels I bis Regulation

On the contrary, when explaining why French PIL rules are not the relevant legal basis to control the validity of the prorogation, the French Supreme Court  takes a true educational approach towards  the lower courts (see already Civ. First Chamber, 23 January 2008, no. 06-21.898 under Article 23 of Brussels I regulation). The validity of the agreement conferring jurisdiction had to be assessed under Article 25 of the Brussels I bis Regulation, applicable to prorogations of jurisdiction in favour of the national Court of an EU Member State (including the UK at the time of the dispute) in civil and commercial matters.

Why did the lower courts did not apply EU PIL? Quite ironically, the absence of French PIL codification can be an explanation for the faulty reasoning of the lower courts. It should be recalled that the French rules of international jurisdiction do not formally exist. They are the result of an extension of the domestic territorial jurisdiction rules into international disputes (see Civ. First Civil Chamber, 30 October 1962, Scheffel). This could explain why the lower courts applied the French Civil Procedural Code, mixing up domestic and international disputes, and the related applicable procedural rules.

Such a basic legal mistake grounded on the oversight of EU PIL requires all the attention of the French expert group on French PIL codification recently created by the French Ministry of Justice. A future Code should probably recall that the validity of an agreement conferring jurisdiction in a cross-border relationship has to be assessed pursuant supra-national sources, in particular the 2005 Hague Convention and the Brussels I bis Regulation and, by default only, pursuant national PIL rules. Clarity regarding multilevel sources in PIL (and their articulation) is crucial for operational legal practice.

Last but not least, Brexit will add more complexity in such a case as it will require applying the 2005 Hague Convention instead of the Brussels I bis Regulation. The London-based company will have to be regarded as located in a third State which is a Contracting Party to the Convention (Article 26(6) of the 2005 Hague Convention).

French courts, get ready!

Toute personne ayant droit à ce que sa cause soit entendue par un tribunal impartial, un juge aux affaires familiales qui a rendu la décision contestée ne saurait figurer dans la composition de la cour d’appel saisi du recours à l’encontre de cette même décision.

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Le gouvernement a annoncé le 5 octobre un projet de « loi visant à renforcer la laïcité et confronter les principes républicains ». Il prévoit le durcissement du traitement réservé aux polygames en droit des étrangers et réintroduit un droit de prélèvement sur les biens situés en France lorsque la loi étrangère applicable à la succession conduit à exhéréder les femmes. 

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Pour marquer solennellement le début officiel de ses activités, le Parquet européen a tenu à Luxembourg le 28 septembre dernier une séance d’installation de la première cheffe du Parquet, Laura Codruţa Kövesi, nommée en octobre 2019, ainsi que des premiers procureurs nommés en juillet dernier, parmi lesquels le Français Frédéric Baab. Le Parquet, dont la langue de travail sera l’anglais, est désormais prêt à débuter ses travaux. 

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Saisie d’une double question prioritaire de constitutionnalité (QPC) sur la prolongation de la détention provisoire, la Cour de cassation a conclu qu’il n’y avait pas lieu de la renvoyer au Conseil constitutionnel.

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Commission / Pologne
Selon l’avocate générale Kokott, l’impôt polonais dans le secteur de la vente au détail et la taxe hongroise sur la publicité ne violent pas le droit de l’Union en matière d’aides d’État

In Selecta Finance UK Ltd, Re [2020] EWHC 2689 (Ch) Johnson J considered the jurisdictional issues for schemes of arrangement in a touch more detail than recently has been the regular method in both convening and sanctioning hearings.

Selecta Finance UK Limited is a most recent addition to the ‘Selecta’ group , having been established only on 13 August 2020. (Selecta is said to be the leading provider of unattended self-service coffee and convenience food in Europe).  The Scheme concerns three series of senior secured Notes (“the Existing SSNs“), which have an aggregate principal amount of €1.24 billion plus CHF 250 million. The Existing SSNs were issued originally not by the Company but by Selecta Group BV, its parent company incorporated in the Netherlands. They were issued pursuant to a Trust Deed dated 2 February 2018 , and were originally governed by New York law and subject to a provision for the New York Courts to have exclusive jurisdiction.

With reference to authority, Johnson J accepts that the relevant parties in interest who qualify as the Scheme Creditors are the ultimate beneficial owners of the Existing SSNs. By 14 September 2020, the Existing SSN Holders holding a majority by value of the Existing SSNs had provided their consent to (among others) the following key changes to the terms of the SSNs:  i) Amendment of the governing law provisions of the Trust Deed so that the Existing SSNs are governed by English rather than New York law. ii) Amendment of the jurisdiction provisions of the Trust Deed so that the Existing SSNs are subject to the exclusive jurisdiction of the English Court in relation to any proceedings commenced by an obligor of the Existing SSNs, and the non-exclusive jurisdiction of the English Court in relation to other proceedings; iii) Accession of the Company to the Trust Deed as a co-issuer of the Existing SSNs.

At 18 it is said that an expert report on US and New York law confirms that the amendments to the governing law and jurisdiction clauses of the Trust Deed are valid under New York law and would be regarded as effective in any United States court applying that law.

The relevance of that finding for unwilling SSNs beneficiaries, I would argue, is not undisputedly established under Article 10 and Article 3(2) Rome I.

 

The Company then entered into a Supplemental Trust Deed on 14 September 2020 and thereby became a co-issuer of the Existing SSNs under the Trust Deed. As Johnson J notes at 44: it is only by means of the Supplemental Trust Deed that the Company became co-issuer of the Existing SSNs, and that the governing law and jurisdiction provisions were changed so as to refer to English law and jurisdiction.

It is clear that a jurisdictional link with England & Wales has been established specifically for the purpose of a company taking advantage of the scheme provisions in English law. With reference to Newey J in Re Codere Finance (UK) Ltd [2015] EWHC 3778 (Ch) which I reviewed here, this is held to be ‘good forum shopping’.

Article 25 Brussels Ia jurisdiction is only possible by means of the amendments to the Trust Deed effected via the Supplemental Trust Deed, as I also noted above. As I suggest there, had there been recalcitrant minority Note holders objecting to the change in court and law clause, I think the Scheme would not have been jurisdictionally home and dry on A25 choice of court grounds.

The next classic consideration is under Article 8(1)’s anchor defendant mechanism seeing as jurisdiction against the company is established per Article 4.

At 53 reference is made to Snowden J. who in Van Gansewinkel has suggested that in determining whether A8(1) applies, the Court is required to consider whether the “numbers and size of the scheme creditors domiciled in [the UK]” are “sufficiently large“: the result of that instruction is that applicants tend to point out the (debt) size of the creditors so domiciled, even if in DTEK Newey J held that size and number are irrelevant, ditto in Lecta Paper and Swissport Fuelling.

At 54 comes Johnson J’s obiter, useful finding:

Speaking for myself, I incline to the view that the presence of a single creditor is a necessary, but not of itself a sufficient, condition to the operation of Art. 8. I say that because in terms the power conferred by Art. 8 is engaged where “any one of” a number of defendants is domiciled in England & Wales, but even then the power is to be exercised only in cases where the language of the proviso in Art. 8 is satisfied – i.e., where the claims against the various defendants are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. I did not hear detailed argument on the meaning of this language, and in any event the application before me was uncontested, and so I express my view on it somewhat tentatively; but tentatively it seems to me that the question of expediency posed by the proviso is rather less about the geographical distribution in terms of number and size of the prospective defendants, and is rather more about the expediency in case management terms of connected claims being resolved in one place, even if only one anchor defendant is domiciled there. The argument in this case is that it is expedient for the claims against all EU domiciled Scheme Creditors to be resolved in one place, i.e. in England & Wales, because such claims all relate to the reorganisation of their indebtedness vis-à-vis the Company, and these Courts are best placed to resolve such questions given the separate jurisdiction they exercise over the Company under CA Part 26. Indeed, they may be uniquely placed to do so.

Opposition to the Scheme’s jurisdiction tends to evaporate once it gets to the convening and hearing stage. This is typically because the opposing creditors tend to by that stage be converted to the necessity of restructuring and the unattractiveness of having to pursue debt collection against a corporation in serious financial difficulty. As a result nearly all precedent is first instance only.

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 2, Chapter 5. Third edition forthcoming February 2021.

Scheme of arrangement. Rare more detailed consideration of A8(1) BIA jurisdiction (upheld) by Johnson J.
Conclusions on A25 'good forum shopping' remain shaky in my view given change of choice of court and law provisions from New York to English law and court. https://t.co/yL2edW1tMc

— Geert Van Calster (@GAVClaw) October 14, 2020

In a judgment of 3 June 2020, the Paris Court of Appeal ruled that sanctions issued by the Security Council of the United Nations (UN) or by the European Union (EU) are international mandatory rules which define French public policy. As a result, the court ruled that, in principle, an arbitral award violating such sanctions could be set aside by a French court.

In contrast, the court ruled that unilateral sanctions issued by the United States of America do not constitute French public policy. As French authorities have expressed their hostility against them, US sanctions obviously cannot be regarded as defining the most important values of the French state. An arbitral award failing to take them into consideration might not, therefore, be challenged before French courts.

Background

The case was concerned with a gas storage contract to be performed in Yort-E-Shah, Iran. The initial contract was concluded in 2002 between an Iranian and a French company.  A number of letters of credit had been issued by various banks to guarantee the  performance of the contract. In 2008, a dispute arose between the parties. The Iranian party alleged various contractual breaches, terminated the contract and called the guarantees. The French party initiated proceedings before French courts to enjoin the banks from paying under the letters of credit, which were eventually dismissed (see the judgment of the French Supreme Court here).

The French party then initiated arbitration proceedings before an ICC tribunal in Paris arguing that the termination of the contract was illegal. The Iranian party made counterclaims. The tribunal allowed claims from both parties and, after setting them off, ultimately found in favour of the Iranian company.

The French company then initiated proceedings before French courts, arguing inter alia that the award was contrary to French public policy for failing to take into account applicable sanctions and should thus be set aside.

UN Sanctions

The first argument was that the arbitral tribunal had failed to apply UN Resolutions no 1737 of 23 December 2006, no 1747 of 24 March 2007 and no 1803 du 3 mars 2008. The Iranian party challenged the relevance of the UN resolutions for defining French public policy, arguing that UN resolutions are not directly applicable in France, were not implemented in the French legal order, and thus could not be considered as defining French public policy.

The court recognised that the UN resolutions were not directly applicable in France, and that they could not be characterised as French international mandatory rules. However, the court held that they were either foreign international mandatory rules, or  “genuinely international mandatory rules”. The court concluded by adding that, in any case, the objectives pursued by the UN, peace and international security, were essential values to the French state. In principle, therefore, arbitral awards violating UN sanctions would not comport with French public policy and could be set aside on this ground.

This wealth of reasons might reveal that none of them was particularly convincing.

The most unconvincing argument was certainly to distinguish between foreign international mandatory rules and mandatory rules of the forum. The purpose of the distinction is to grant discretion to courts to apply mandatory rules protecting the interests of foreign states. It seems hard, and pretty artifical, to establish a link between UN sanctions and certain states, but not others. A formalistic way of doing this would be to argue that UN sanctions would be non foreign mandatory rules only in the states which have not implemented them. Is that what the court means? If so, it should tell which foreign implementing legislation it is actually considering. And what if UN sanctions are not directly applicable in the vast majority of states? Are they foreign to everybody?

The concept of “genuinely international” mandatory rules (lois de police réellement internationales) is a reference to the idea that while arbitrators have no forum, and cannot be considered as more specifically bound by the mandatory rules of any given state, they should consider that they are the guardians of a genuinely international public policy composed of norms recognised as being of the utmost importance at a global level. The doctrine of “genuinely international public policy” (ordre public réellement international), or “genuinely international mandatory rules”, is a correction of the consequences of the delocalisation of arbitration promoted by the French law of arbitration. The reference to this doctrine in the context of court proceedings, however, raises a number of issues. First, the court implies that arbitral tribunals should be compelled to apply a rule which is not a French international mandatory rule, and that French courts would thus have no obligation to apply if the case was litigated in France. Second, while one can conceive that arbitrators do not have a forum and are thus not bound by the international mandatory rules of the seat of the arbitration, a French court does have a forum, and should thus care about French public policy.

Finally, the court explained that UN resolutions should be considered as defining French public policy because of the importance of the purpose that they served. The court ruled:

the aforementioned resolutions, in so far as they are intended to contribute to the maintenance or restoration of international peace and security, embody rules and values whose disregard must be considered to be incompatible with the French legal system and which therefore fall within the French concept of international public policy

International mandatory rules are defined by the importance of the purpose that they serve, so establishing the purpose of UN Resolutions in this context was no doubt important. Yet, one wonders whether the sole purpose of norms could make them international mandatory provisions irrespective of their enforceability in the relevant legal order.

EU Sanctions

The characterisation of EU sanctions contained in Regulations (EC) no 423/2007, (EU) no 961/2010 (EU) no 267/2012 was much simpler. EU regulations are directly applicable in all Member states. The court thus found that these regulations are French international mandatory rules and, because they contribute to the maintenance or restoration of international peace and security, also define French international public policy. In this context, the reference to the purpose of EU Regulations was aimed at distinguishing those EU regulations which would qualify as international mandatory provisions and those which would not.

US Sanctions

Finally, the court turned to US sanctions and ruled that they did not define French public policy. The court insisted that its role was to assess French public policy. For this purpose, it was highly relevant that the French state had repeatedly expressed through members of its government its opposition to the policy of the US to use unilateral sanctions, calling them unjustifiable and violations of international law. French authorities were working with other Member States to reinforce the economic sovereignty of the EU, in particular by reflecting on extending the scope of the EU blocking regulation (and possibly the French blocking statute). Thus, US sanctions clearly did not define French public policy

Conclusion

After elaborating quite extensively on the characterization of international sanctions as international mandatory rules, the court found that neither the UN Resolutions, nor the EU Regulations applied in the particular case, and that there had not been any actual violation of French public policy. It seems clear, therefore, that the court wanted to signal its doctrine and clarify that, while it would expect arbitrators to take into account UN and EU sanctions, it would participate in the effort of the French state to resist US unilateralism in this respect.

Comment le juge administratif doit-il apprécier le caractère manifeste de la violation du droit de l’Union européenne par une décision juridictionnelle susceptible d’engager la responsabilité pour faute de l’État ?

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Droit international privé

Mineur

Détention provisoire

Détention provisoire