Agrégateur de flux

In Autostore Technology AS v Ocado Group Plc & Ors [2023] EWHC 716 (Pat), Claimant AutoStore is a Norwegian company, pioneer in automated warehouse technology. First defendant develops automated systems for use in large scale grocery businesses.  The second defendant is a joint venture between the first defendant and Marks & Spencer. Ocado is a former customer of AutoStore’s.

Ocado’s defences include that the patents were invalid due to prior non-confidential disclosures to two parties based in Russia, including EVS, a company based in St Petersburg, and Russia’s central bank.

‘Matter made available to the public’ is part of the ‘state of the art’ condition for patents (in the UK: s.2(2) of the 1977 Act). It may affect the novelty or obviousness of a patent: Subsections 2(1) and (2) of the Patents Act 1977 (“the 1977 Act”) provide:

“2. (1) An invention shall be taken to be new if it does not form part of the state of the art.

(2) The state of the art in the case of an invention shall be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way.”

In support of their case of lack of novelty and inventive step Ocado rely on alleged prior disclosures to the Russian entities which Autostore say were made in confidence and could not therefore be part of the state of the art.

The section of the judgment that is of relevance to the blog (other than the brief reference to the TRIPS agreement [256]), is the qualification of the obligation not to disclose matter to the public, as (non)contractual, and the subsequent application of Rome II.  Hacon J summarises the issues [263] ff

Where a party relies on an express contractual restriction on the foreign disclosure of information, the effect of the alleged contract will be assessed according to the applicable law.  The party asserting the contractual restriction is obliged to plead the existence, the circumstances of formation and the relevant terms of the contract.  An English court seised will apply Rome I to determine which foreign law governs the contract.  The court will then decide whether, according to that law, there was an express term of confidentiality as alleged and whether its effect was to restrict the use of the information in issue.

The position is not so straightforward where it is said that a party in a foreign context was restrained from using information under an obligation that was not contractual – what an English court would recognise as an equitable obligation.

Rome II does not expressly recognise equitable obligations as a separate category. Clearly however they may still qualify as ‘non-contractual’.

[270 ff] Hacon J justifiably rejects Ocado’s assertion that Rome I and II dovetail. It is beyond doubt that not all obligations that are not contractual, must necessarily be covered by Rome II and vice versa.  Likewise, the overall application of Rome II clearly may imply non-contractual obligations that are putative. Meaning for the purposes of the application of Rome II, one may have to pretend for the time being that there are non-contractual obligations at play and that these are covered by Rome II, only for the so identified substantive lex causae to decide that there are not, after all, any non-contractual obligations at play.

Re the alleged disclosures made by the Bank, [276 ff] AutoStore’s primary contention is that the hypothetical breach of the alleged equitable obligation of confidence is correctly categorised as a culpa in contrahendo within the meaning of A12 Rome II, seeking support ia in CJEU Ergo. [286] It argues the respective obligations of confidentiality arose in the context of negotiations (with the Russian companies) which ultimately led to the conclusion of the Distribution Agreement governed by Norwegian law.  Consequently, the same law applies to the obligations of confidentiality.

However upon consideration the judge holds [298] – with much support found in prof Dickinson’s Rome II volume and his contribution on Rome II in Dicey’s 16th ed – that A12 does not apply to the alleged disclosures by the Bank, seeing as in his view A12 does not apply to third parties to the contractual negotiations, even agents of the contracting parties. There were no negotiations between AutoStore and the Bank and AutoStore for its own reasons wanted to ensure that any agreement reached would be with EVS and not the Bank.

Instead, [324] ff, the lex causae is held to have arisen out of an act of unfair competition within the meaning of A6 of Rome II. That is important, for Article 6 does not have an escape clause like Article 4(3).

Here, the judge’s reasoning is under par.

Oddly for instance he holds A6(2) is not engaged ia [335] ‘because the Bank is not a competitor of AutoStore’s’ yet he nevertheless applies A6(1): ‘the law applicable to a putative obligation of confidence on the Bank was the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected.’: this is not convincing.

Reference is then made by the judge to CJEU Verein für Konsumenteninformation v Amazon EU Sàrl , CJEU Volkswagen and to Celgard, and to the Mozaikbetrachtung present in particular in the latter case. However he then [351] holds that ‘attention must be paid to the hypothesis posited in this case. It is that the Bank was about to make Bank Bot Designs public or had already done so’, subsequently linking that [353] to the procedural relief Autosore would have hypothetically sought for the potential breach, in, the judge holds, Russia. Conclusion [354]: ‘Of the laws made applicable under art.6(1) of Rome II to apply to the question of confidentiality, the one that would have mattered on the hypothesis raised would have been Russian law.’ That link to procedural relief to me comes out of nowhere.

As for the relationship with EVS, [301] the question arises as to whether AutoStore and EVS contemplated a contractual relationship at the relevant times. The judge [302] holds that a theoretical possibility of the purchase of goods or services or of some other contractual relationship does not suffice to trigger A12: commercial parties are almost constantly on the look-out for such relationships. [322] after having considered the various arguments the judge holds that A12 is engaged vis-a-vis EVS, yet that the putative law of the contract cannot be determined by A12(1), hence requiring the application of A12(2)(a). The applicable law is the law of the country in which damage would hypothetically have occurred, here, it is held, Russia.

Applicable law for both claims having been held to be Russian law, the remainder of the judgment then deals with evidence of that law and the conclusion [396] that the information was disclosed without imposing any obligation of confidence on either EVS or the Bank.

As noted the A6 analysis in my view is appealable. For both the A6 and the A12 analysis it is also a pity and concern to see, once again, the English courts (chicken and egg-wise led of course by counsels’ probable absence of presentation of same) lack of engagement on issues of both acquired and retained EU conflict of laws, with scholarship outside of the UK and /or other than written in English.

Geert.

Equitable obligations of confidence (in context of patent DNI Denial of Infringement): whether covered by retained Rome I or Rome II (or neither)
More on the blog when I find time

Autostore Technology AS v Ocado Group Plc & Ors [2023] EWHC 716 (Pat)https://t.co/ixzMwrPqJH

— Geert Van Calster (@GAVClaw) April 15, 2023

by Claudia Madrid Martínez

 

On 17 March 2023, the Civil Chamber of the Supreme Court of Justice issued a decision whereby it annulled a judgment on appeal and decided the merits of the case, which concerned a bill of exchange issued in Curaçao, binding Venezuelan citizens domiciled in Venezuela.

The interesting thing about this judgment is that the Civil Chamber set aside the reasoning of the court of appeals according to which, since there are no international treaties in force between Venezuela and Curaçao, and there are no rules on bills of exchange in the Venezuelan Act on Private International Law, the Inter-American Convention on Conflicts of Laws concerning Bills of Exchange, Promissory Notes and Invoices should be applied by analogy and, consequently, “the Law of the place where the obligation was contracted” (art. 1), i.e., the Law of Curaçao, should be applied to the bill of exchange.

It should be noted that, on the one hand, the only Conventions in force for Venezuela regarding bills of exchange are the Inter-American Convention on Conflicts of Laws regarding Bills of Exchange, Promissory Notes and Invoices, and the Bustamante Code. On the other hand, the Act on Private International Law does not establish rules on International Commercial Law, since —as stated in the Explanatory Memorandum— this matter must be developed within the Commercial Law itself in accordance with the general principles set forth in the Act on Private International Law.

In addition, Article 1 of the Act on Private International Law provides two tools to integrate the gaps in the Act and, in general, the gaps in the Venezuelan Private International Law system. This rule refers to analogy and to the generally accepted principles of Private International Law.

In the past, case law has admitted the application of treaties in force for Venezuela, but not for the other States involved in a specific case, either by analogy (Supreme Court of Justice, Political Administrative Chamber, judgment of 23 February 1981), or on the understanding that their solutions can be characterized as generally accepted principles of Private International Law (Second Court of First Instance in Commercial Matters of the Federal District and Miranda State, judgments of 29 February  1968 and 12 March 1970). Therefore, in this case, the arguments used by the court of appeal in analogically applying the Inter-American Convention were not erroneous.

The Civil Cassation Chamber, however, had another idea when it understood that the judge of appeal erred in the application of the Law of Curaçao to settle the case. Thus, the Chamber began by reaffirming the existence of “relevant foreign elements, such as the place of issuance of the bill of exchange, i.e., Curaçao, and the domicile of the parties involved in Venezuela”. The latter criterion, in fact, is not a foreign element, since it is located in the forum.

The Chamber then cites Article 1 of the Act on Private International Law, and concludes that there are no treaties in force, applicable to the case since Curaçao has not ratified any of the aforementioned treaties, and proceeds to the application of the domestic rules of Private International Law.

In particular, the Civil Chamber intends to determine, in the first place, the Law applicable to the form of the bill of exchange, which is why it resorts, rightly, to Article 37 of the Act on Private International Law, a rule that governs the form of all kinds of legal acts, which is perfectly applicable to bills of exchange, and also, as is well known, it establishes the locus regit actum principle in an alternative manner. Indeed, the rule allows the judge to choose between the Law of the place of conclusion of the act, which governs the substance of the act, and the Law of the domicile of the person doing the act, or of the common domicile of the persons doing the act.

Under Article 37, the choice of the connecting factor applicable to the specific case will depend on the favor validitatisprinciple, i.e., the judge must determine the Law applicable in order to favor the formal validity of the act. In this case, the Civil Chamber decided to apply the domicile criterion, without explaining why, although, basically, the reason can be intuited from the fact that the judge ended up applying Venezuelan law.

The Civil Chamber then begins its examination of the Law applicable to the merits and, in this regard, “finds it pertinent to bring up the provisions of Article 30 of the Act on Private International Law”, a rule that establishes the Law applicable to international contracts in cases where the parties have not chosen it. The nature of a bill of exchange can certainly be discussed, but it is not a contract.

In any case, the Civil Chamber does not justify its action, that is to say, it does not indicate the reason why a rule governing contracts should be applied to a bill of exchange. However, I do not know if this was consciously done, but it did leave out a series of points that are of great interest in the field of international contracts. Let us see.

The first thing the Chamber does is to identify, in accordance with Article 30 of the Law, the objective and subjective elements of the relationship, in order to determine with which Law the bill of exchange is more closely related and assumes for this purpose —although it does not quote it— the opinion expressed by Professor Fabiola Romero in her work “Derecho aplicable al contrato internacional” (in: Liber Amicorum, Homenaje a la Obra Científica y Académica de la profesora Tatiana B. de Maekelt, Caracas, Facultad de Ciencias Jurídicas y Políticas, UCV, Fundación Roberto Goldschmidt, 2001, Volume I, pp. 203 ss.), understanding that the subjective elements refer to the parties and the objective ones to the relationship itself.

Thus, the Civil Chamber includes in the subjective elements the nationality and domicile of the parties —all located in Venezuela—; and, within the objective elements, the place of subscription of the bill of exchange —Curaçao—, the place of payment —understanding as such the place indicated next to the name of the drawee and located in Curaçao—, and the fact that the bill is intended to be enforced and performed in Venezuela.

Then, in accordance with the last part of Article 30 of the Act on Private International Law, according to which the judge “shall also take into account the general principles of International Commercial Law recognized by international organizations”, the Civil Chamber analyzes such principles. And it does so considering their so-called conflictual function, since in this case they will be used, not to settle the merits, but to search for the Law applicable.

However, the principles sought by the Civil Chamber are contained in international treaties. Firstly, the 1980 Rome Convention on the Law Applicable to International Contracts —now absorbed by the 2008 Rome I Regulation—, which refers to the closest links, but based rather on the questioned criterion of the characteristic performance. Secondly, Article 9 of the Inter-American Convention on the Law Applicable to International Contracts, rule that inspired the solution of Article 30 of the Act on Private International Law.

After reaffirming the application of the Law with which the bill of exchange is most closely connected, the Civil Chamber refers Article 31 of the Act on Private International Law, and understands that “in the event of a dispute regarding the Law to be applied, in the case of a contract or obligation of international origin, in the absence of a choice of Law by the parties or when it is ineffective, the judge shall apply ‘…when appropriate…’, that is, according to the specific case, the Lex mercatoria, which includes the usages, customs and commercial practices of general international acceptance”.

This rule leads the Chamber to consider the UNIDROIT Principles and it decides to apply them on the basis of the so-called negative choice —a discussed solution in the world of arbitration—, admitted by the Preamble of the Principles. Indeed, the Principles may be applied “when the parties have not chosen any law to govern their contract”.

Thus, the Civil Chamber ends up understanding that, in the absence of indication by the parties, in case of a monetary obligation, the place of performance will be “at the obligee’s place of business” (art. 6.1.6[1][a]).

“Now, considering the objective and subjective elements that are directly linked to the referred bill of exchange, as well as the general principles of International Commercial Law accepted by international organizations, the customs and manners of international trade, known as Lex mercatoria, according to Articles 30 and 31 of the Act on Private International Law, it is concluded that the Law applicable to the performance of the bill of exchange shall be the Law of the place of performance, it is concluded that the Law applicable to resolve the merits of the case is Venezuelan Law, given that the parties are Venezuelans, their domicile is in the Bolivarian Republic of Venezuela and the commercial instrument, although signed in Curaçao, is intended to be enforceable in the Bolivarian Republic of Venezuela. It is hereby declared”.

The Civil Chamber applied Venezuelan Law to both the form and the substance of the bill of exchange. But there is more, when deciding on the merits, instead of following the solution of the UNIDROIT Principles and calculating interest according to the Law of the State of the currency of payment (art. 7.4.9), it did so instead “at the rate of five percent (5%) per annum, according to Article 456, ordinal 2° of the Venezuelan Commercial Code… for which the conversion into bolivars must be made at the rate established by the Central Bank of Venezuela for the day of payment, all this through a complementary expert opinion, in accordance with Article 249 of the Code of Civil Procedure and not as erroneously requested by the plaintiff, that is to say, calculated at the legal interest rates that have been fixed for each semester by the Central Bank for Curaçao and St. Martin (Centrale Bank Curaçao en Sint Maarten)” (bold in the original).

There are undoubtedly some noteworthy aspects of this decision that hopefully will be taken into account in the future in cases related to international contracting. Others, such as the characterization of a bill of exchange as a contract, the disregard of the possibility of applying international treaties by analogy or as general principles, and the calculation of interest on an international obligation, denominated in foreign currency, in accordance with Venezuelan Law, could rather be forgotten.

 

Translated by the author from her original post in Spanish.

 

Courts are often required to determine the existence or validity of jurisdiction agreements. This can raise the question of the applicable standard of proof. In common law jurisdictions, the question is not free from controversy.  In particular, Stephen Pitel has argued on this very blog that jurisdiction clauses should be assessed on the balance of probabilities, as opposed to the “good arguable case” standard that is commonly applied (see, in more detail, Stephen Pitel and Jonathan de Vries “The Standard of Proof for Jurisdiction Clauses” (2008) 46 Canadian Business Law Journal 66). That is because the court’s determination on this question will ordinarily be final – it will not be revisited at trial.

In this post, I do not wish to contribute to the general debate about whether the “good arguable case” standard is appropriate when determining the existence and validity of jurisdiction agreements. Rather, I want to draw attention to a particular feature of the English “good arguable case” standard that can cause problems when applied to jurisdiction agreements. The feature is that, in cases where the court is unable to say who has “the better argument”, it will proceed on the basis of plausibility (Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, [2019] WLR 3514 at [79]-[80]). Application of this lower standard may lead to unfairness in the treatment of jurisdiction agreements. The party who bears the burden of proof will get the benefit of the doubt that is inherent in the test. However, there is no principled way to allocate the burden. Should it be the party seeking to rely on the agreement, with the result that there is a kind of bias in favour of upholding jurisdiction agreements, or should it be the plaintiff, as was the approach taken recently by the New Zealand High Court in Kea Investments Ltd v Wikeley Family Trustee Limited [2023] NZHC 466?

The High Court in that case had granted an interim anti-enforcement injunction in relation to a default judgment from Kentucky (see Kea Investments Ltd v Wikeley Family Trustee Limited [2022] NZHC 2881, and my earlier post here). Kea Investments Ltd (Kea), a British Virgin Islands company, alleged that the US default judgment was based on fabricated claims intended to defraud Kea. It claimed that the defendants – a New Zealand company, an Australian resident with a long business history in New Zealand, and a New Zealand citizen – had committed a tortious conspiracy against it and sought a declaration that the Kentucky judgment would not be recognised or enforceable in New Zealand. Two of the defendants – Wikeley Family Trustee Limited and Mr Wikeley – protested the Court’s jurisdiction.

The Court set aside the protest to jurisdiction, dismissing an argument that Kea was bound by a US jurisdiction clause. One of the reasons for this was that the jurisdiction clause was unenforceable by virtue of Kea’s allegations of fraud and conspiracy (see here for a more extensive case note). The Court applied the “good arguable case” standard to determine the relevance of the allegations. It relied on the test in Four Seasons Holding Inc v Brownlie [2017] UKSC 80, which sets out the good arguable case standard applicable to “jurisdictional facts” that form the basis for an application to serve proceedings outside of the forum. Gault J considered that, even though the test in Four Seasons was concerned with the different scenario of a plaintiff seeking to establish jurisdictional facts to support an assumption of jurisdiction by the forum court, it was appropriate to apply the test by analogy to the defendants’ application for a stay or dismissal of the New Zealand proceeding by virtue of the US jurisdiction clause (at [44]).

However, the good arguable case test is especially difficult to apply in cases where the court is unable “to form a decided conclusion on the evidence before it and is therefore unable to say who has the better argument” (at Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, [2019] WLR 3514 at [79]). In such cases, the good arguable case inquiry is no longer a relative inquiry, and all that is needed is a plausible (albeit contested) evidential basis. It follows that the question of the burden of proof may become determinative.

Gault J considered that it was the plaintiff, Kea, that had to show a plausible evidential basis here. Thus, the Judge considered that Kea had to show “a plausible evidential basis” for its argument that there was no jurisdiction clause: “[t]he test is whether there is a plausible (albeit contested) evidential basis for the claimant’s case in relation to the jurisdiction clause (by analogy with the application of the relevant gateway). It is not whether the defendants have a plausible (albeit contested) evidential basis for their position that the Coal Agreement was executed by Kea” (at [60], see also [63]). In other words, it was Kea who was given the benefit of the doubt inherent in the test, and not the defendants.

It is likely that Gault J’s approach can at least to some extent be explained by reference to the peculiar facts of the case. However, if his approach were adopted more generally, the result would be that in cases of evidential uncertainty that cannot be resolved, the good arguable case inquiry necessarily favours plaintiffs over defendants, and New Zealand jurisdiction agreements over foreign jurisdiction agreements.  This would not be a desirable outcome.

The alternative is that the burden is on the party seeking to enforce the jurisdiction agreement. This seems to be the view adopted by Dicey, Morris and Collins on the Conflict of Laws (16th ed, at [12-093]). However, this approach is problematic too, because it introduces a bias in favour of upholding jurisdiction agreements. In Kaefer, the plaintiffs sought to rely on an English jurisdiction agreement under Art 25 of the recast Brussels Regulation. Commenting on the case, Andrew Dickinson argued that the application of the test of plausibility was not consistent with the scheme of the Regulation, which requires that “the defendant, not the claimant, … be given the benefit of the doubt” (“Lax Standards” 135 (2019) LQR 369). Dickinson pointed to the “significant unfairness to the defendant of being required to defend proceedings before a court other than that of his domicile in the absence of conclusive and relevant evidence that the court has jurisdiction under the Regulation”. I think that the concern is valid more generally. Why should any party – whether it is the defendant or the claimant – be held to a jurisdiction agreement even though there is only a plausible basis for its existence?

It follows that courts should always try to engage in a relative inquiry when determining the existence and validity of jurisdiction agreements. It is likely that this is already occurring in practice, and so perhaps the concerns raised in this post are more theoretical than real. If so, it is in the interest of legal certainty and accessibility that the test be clarified.

This post was written by Sören Segger-Piening, Julius-Maximilians-Universität Würzburg.

It is with a heavy heart that I have to announce the passing of Oliver Remien on 24 April 2023 after a short, severe illness at the age of only 66. He held the Chair of Civil Law, European Economic Law, Private International Law and Litigation as well as Comparative Law at the University of Würzburg from 2001 until his retirement on 1 April 2023. From 1982 to 2000 he had worked as an assistant and research fellow at the Max Planck Institute for Comparative and International Private Law in Hamburg under the supervision of his teacher Ulrich Drobnig. I consider myself lucky to have been Oliver Remien’s student, mentee and friend since 2007.

His work is as multi-layered as it is extensive, which is why the following can only be an incomplete coverage of some of his research priorities.

Early on he pointed out the various dimensions of European private law and benefited from his work as Secretary to the Commission on European Contract Law (Lando-Group) from 1982 to 1990. He repeatedly surveyed, illuminated and advanced the system of internal market law and its implications for private law: fundamentally in his habilitation thesis on Mandatory Law of Contract and the Fundamental Freedoms (2003), most recently in a note on the Thelen Technopark decision of the CJEU.

He made many fundamental contributions to private international law, for example on foreign trade law, overriding mandatory provisions, consumer contracts and the European Succession Regulation. Furthermore, he devoted himself to the “secret king” of conflict of laws: the application of foreign law by domestic courts.

The latter links to his work in the field of international and comparative civil procedure. His ground-breaking and widely acclaimed dissertation on Rechtsverwirklichung durch Zwangsgeld (1992) bears witness to this, as does his recent contribution in the grey area between arbitration and the international jurisdiction regime of the Brussels Ia Regulation.

Of course, he also provided a variety of important impulses in German law, for example with his contribution on the limitation of claims in rem.

During his time at the University of Würzburg, Oliver Remien organised a large number of conferences on important topics in his research areas such as: Modernisation of the Law of Obligations and European Contract Law (2006); The Law of Prescription in Europe (2009); Damages in European Private and Business Law (2010); European Unification of Conflict of Laws (2010, together with Eva-Maria Kieninger); Investment Protection, Arbitration and the Rule of Law in the EU (2017, together with Markus Ludwigs). He was also keen to cooperate with the Law Faculty in Bucharest, as evidenced by a volume on Common European Private Law in Romania (together with Liviu Zidaru), which currently is being printed.

Standing in awe before this comprehensive body of work – which I can only describe inadequately – is accompanied by at least as much admiration for Oliver Remien’s personality: his friendly and open character, his curiosity and his ever-recurring enthusiasm for novelties were outstanding. With Oliver Remien we do not only loose a great European researcher in the truest sense of the word, but also a dear person and friend. He is dearly missed.

My thoughts are with his family and loved ones.

Further to my  post on first view articles for the second issue of ICLQ 2023, the second issue for ICLQ for 2023 was just published. It contains the following conflict of laws article that was not included in the first view articles:

S Camilleri, “Sense and Separability”:

This article explores the doctrine of separability, as understood in particular in the English legal tradition. It does so by reference to the decisions in Sulamérica Cia Nacional de Seguros SA and others v Enesa Engelharia SA and others and ENKA ?n?aat ve Sanayi A.?. v OOO ‘Insurance Company Chubb’ & Ors that explore the relevance of the concept when determining the law applicable to the arbitration agreement. These decisions largely treat the doctrine as irrelevant to the determination of the law governing the arbitration agreement. They do so because of the way in which English law views separability as tied inimically to the concept of enforcement of the arbitration agreement. This is unsurprising given the content of section 7 of the Arbitration Act 1996 and the position of the doctrine of separability as a legal fiction that must be restricted to its defined purpose. Viewed against the potential reform of the Arbitration Act 1996, the author asks whether a broader view of separability can be adopted. The author’s view is that there are cogent and compelling reasons for adopting a broader view, that would promote certainty and consistency in a way that is not best served by the current approach.

 

 

 

The first issue of the Revue critique de droit international privé of 2023 is primarily dedicated to the Restatement Third of Conflict of Laws.

Restatement Third

Lea Brilmayer (Yale) starts the discussion with an article on The (Third) Restatement of Conflicts and “The Ordinary Processes of Statutory Construction”. 

One of the reporters of the Restatement, Kermitt Rooselvet III (UPenn), then offers a short response: Third Restatement and Method : A Response from Kermitt Roosevelt III.

Three articles follow on more specific topics: Maggie Mills, Statutes of limitation and the substance-procedure dichotomy: a missed opportunity; Sarah Quinn, How should a state choose when to apply foreign law? Comparing answers from the American Law Institute’s Third Restatement and Rome II in the European Union; Catherine Lee, A Cross-Border Maze: Remote Work, Employment Contracts, and the Draft Restatement (Third) of Conflict of Laws.

Other articles

The issues contains two other articles and a number of case notes.

In the first article, Christelle Chalas (University of Lille) offers a comparative analysis of protection measures of children wrongfully removed under the 1980 Hague Convention after the judgement of the U.S. Supreme Court in Golan v. Saada (Les mesures de protection de
l’enfant illicitement déplacé et le risque grave de danger : comparaison de l’office des juges américains et européens).

In the second article, Baptiste Delmas (Paris I University) discusses the emergence of exequatur actions in transnational labour law.

The full table of contents can be found here.

Written by Bill Dodge, the John D. Ayer Chair in Business Law and Martin Luther King Jr. Professor of Law at UC Davis School of Law.

In December 2022, Chinese lawmakers published a draft law on foreign state immunity, an English translation of which is now available. In a prior post, I looked at the draft law’s provisions on immunity from suit. I explained that the law would adopt the restrictive theory of foreign state immunity, bringing China’s position into alignment with most other countries.

In this post, I examine other important provisions of the draft law, including immunity from attachment and execution, service of process, default judgments, and foreign official immunity. These provisions generally follow the U.N. Convention on Jurisdictional Immunities of States and Their Property, which China signed in 2005 but has not yet ratified.

China’s draft provisions on immunity from attachment and execution, service of process, and default judgments make sense. Applying the draft law to foreign officials, however, may have the effect of limiting the immunity that such officials would otherwise enjoy under customary international law. This is probably not what China intends, and lawmakers may wish to revisit those provisions before the law is finally adopted.

Immunity from Attachment and Execution

Articles 13 and 14 of China’s draft law cover the immunity of foreign state property from “judicial compulsory measures,” which the U.N. Convention calls “measures of constraint” and the U.S. Foreign Sovereign Immunities Act (FSIA) refers to as measures of attachment and execution. They include both pre-judgment measures to preserve assets and post-judgment measures to enforce judgments. Under customary international law, immunity from attachment and execution is separate from and generally broader than immunity from suit. It protects foreign state property located in the forum state, in this case the property of foreign states located in China.

Article 13 provides that the property of a foreign state shall be immune from judicial compulsory measures with three exceptions: (1) when the foreign state has expressly waived such immunity; (2) when the foreign state has specifically designated property for the enforcement of such measures; and (3) to enforce Chinese court judgments when the property is used for commercial activities, relates to the proceedings, and is located in China. Article 13 further states that a waiver of immunity from jurisdiction shall not be deemed a waiver of immunity from judicial compulsory measures.

Article 14 goes on to identify types of property that shall not be regarded as used for commercial activities for the purpose of Article 13(3). These include the bank accounts of diplomatic missions, property of a military character, central bank assets, property that is part of the state’s cultural heritage, property of scientific, cultural, or historical value used for exhibition, and any other property that a Chinese court thinks should not be regarded as being in commercial use.

Articles 13 and 14 of China’s draft law closely parallel Articles 19-21 of the U.N. Convention. The main difference appears in Article 13(3)’s exception for enforcing court judgments, which is expressly limited to Chinese court judgments and requires that the property “relates to the proceedings.” Article 19(c) of the U.N. Convention, by contrast, is not limited to judgments of the state where enforcement is sought and does not require that the property relate to the proceedings. On first glance, China’s draft law appears to resemble more nearly § 1610(a)(2) of the U.S. FSIA, which is expressly limited to U.S. judgments and requires that the property be used for the commercial activity on which the claim was based.

Upon reflection, however, it appears that China’s limitation of draft Article 13(3) to Chinese court judgments sets it apart from the U.S. practice as well as the U.N. Convention. In the United States, a party holding a foreign judgment may seek recognition of that judgment in U.S. courts, thereby converting it into a U.S. judgment. Because the U.S. judgment recognizing the foreign judgment falls within the scope of § 1610(a), it is possible to attach the property of a foreign state in the United States to enforce a non-U.S. judgment.

It seems that the same is not true in China, which is to say that Article 13(3) cannot be used to enforce foreign judgments. Under Article 289 of China’s Civil Procedure Law (numbered Article 282 in this translation of the law prior to its 2022 amendment), the recognition of a foreign judgment results in a “ruling” (??). The text of Article 13(3), however, is limited to “judgments on the merits” (??), which appears to exclude Chinese decisions recognizing foreign judgments. (I am grateful to my students Li Jiayu and Li Yadi for explaining the distinction to me.) In short, Article 13(3) appears really to be limited to Chinese court judgments, as neither the U.N. Convention nor the U.S. FSIA are in practice.

There are other differences between the U.S. FSIA and China’s draft law. With respect to the property of a foreign state itself, the FSIA requires that the property be used for a commercial activity in the United States by the foreign state—even when the foreign state has waived its immunity—which can be a difficult set of conditions to satisfy. Articles 13(1) and (2) of China’s draft law, by contrast, impose no similar conditions. The U.S. FSIA has separate and looser rules for attaching the property of agencies or instrumentalities of foreign states in § 1610(b), rules that do not require the property to be used for a commercial activity in the United States as long as the agency or instrumentality is engaged in a commercial activity in the United States. And § 1611(b) of the FSIA singles out only central bank and military assets as exceptions to the rules allowing post-judgment attachment and execution, whereas the draft law’s Article 14 additionally mentions bank accounts of diplomatic missions, property that is part of the state’s cultural heritage, and property of scientific, cultural, or historical value used for exhibition.

Service of Process

China’s draft law also provides for service of process on a foreign state. Article 16 states that service may be made as provided in treaties between China and the foreign state or “by other means acceptable to the foreign state and not prohibited by the laws of the People’s Republic of China.” (The United States and China are both parties to the Hague Service Convention, which provides for service through the receiving state’s Central Authority.) If neither of these means is possible, then service may be made by sending a diplomatic note. A foreign state may not object to improper service after it has made a pleading on the merits. Again, this provision closely follows the U.N. Convention, specifically Article 22.

Section 1608 of the FSIA is the U.S. counterpart. It distinguishes between service on a foreign state and service on an agency or instrumentality of a foreign state. For service on a foreign state, § 1608 provides four options that, if applicable, must be attempted in order: (1) in accordance with any special arrangement between the plaintiff and the foreign state; (2) in accordance with an international convention; (3) by mail from the clerk of the court to the ministry of foreign affairs; (4) through diplomatic channels. For service on an agency or instrumentality, § 1608 provides a separate list of means.

Default Judgment

If the foreign state does not appear, Article 17 of China’s draft law requires a Chinese court to “take the initiative to ascertain whether the foreign state is immune from … jurisdiction.” The court may not enter a default judgment until at least six months after the foreign state has been served. The judgment must then be served on the foreign state, which shall have six months in which to appeal. Article 23 of the U.N. Convention is similar, except that it provides periods of four months between service and default judgment and four months in which to appeal.

U.S. federal courts must similarly ensure that a defaulting foreign state is not entitled to immunity, because the FSIA makes foreign state immunity a question of subject matter jurisdiction, and federal courts must address questions of subject matter jurisdiction even if they are not raised by the parties. Section 1608(e) goes on to state that “[n]o judgment by default shall be entered by a court of the United States or of a State against a foreign state … unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.” In other words, courts in the United States are additionally obligated to examine the substance of the claim before granting a default judgment. China’s draft law does not appear to impose any similar obligation.

Foreign Officials

Article 2 of China’s draft law defines “foreign state” to include “natural persons … authorized … to exercise sovereign powers.” Thus, unlike the U.S. FSIA, China’s draft law may cover the immunity of some foreign officials.

The impact of the draft law on foreign official immunity is mitigated by Article 19, which says that the law shall not affect diplomatic immunity, consular immunity, special missions immunity, or head of state immunity. Article 3 of the U.N. Convention similarly specifies that these immunities are not affected by the Convention. What is missing from these lists of course, is conduct-based immunity. Under customary international law, foreign officials are entitled to immunity from suit based on acts taken in their official capacities, and such immunity continues after the official leaves office.

It appears that China’s draft law would govern the conduct-based immunity of foreign officials in Chinese courts and would give them less immunity than customary international law requires. By including “natural persons” within the definition of “foreign state,” the draft law makes the exceptions to immunity for foreign states discussed in my prior post applicable to foreign officials as well. Thus, foreign officials who engage in commercial activity on behalf of a state might be subject to suit in their personal capacities and not just as representatives of the state. This does not make much sense.

Although it appears that China simply copied this quirk from the U.N. Convention, it makes no more sense in Chinese domestic law than it makes in the Convention. Chinese authorities would be wise to reconsider this issue before the law is finalized. They could address the problem by adding conduct-based immunity to Article 19’s list of immunities not affected. Or, better still, they could omit “natural persons” from the definition of “foreign state” in Article 2.

Conclusion

Adoption of China’s draft law on foreign state immunity would be a major step in the modernization of China’s laws affecting transnational litigation. As described in this post and my previous one, the draft law generally follows the provisions of the U.N. Convention and would apply those rules to all states including states that chose not to join the Convention. The provisions of the U.N. Convention are generally sensible, but they are not perfect. In those instances where the U.N. Convention rules are defective—for example, with respect to the conduct-based immunity of foreign officials—China should not follow them blindly.

[This post is cross-posted at Transnational Litigation Blog.]

Save the date

On 19-20 October 2023 a conference on ‘Sustaining Access to Justice: Developments and Views on Costs and Funding’ will be held at Erasmus University Rotterdam. The conference is organised by the project team Affordable Access to Justice, financed by the Dutch Research Council. Confirmed keynote speakers include Rachael Mulheron (Queen Mary University London) and Andreas Stein (European Commission, DG Justice and Consumers, head of unit). More information on the program and registration will follow soon.

Call for papers

For this conference we invite submissions of abstracts from early career researchers and young practitioners.

The conference’s theme: Access to civil justice is of paramount importance for enforcing citizens’ rights. At the heart access to civil justice lies litigation funding and cost management. Yet, over the past decades, access to justice has been increasingly put under pressure due to retrenching governments, high costs of procedure, and inefficiency of courts and justice systems. Within this context, the funding of litigation in Europe seems to be shifting from public to private. Private actors and innovative business models emerged to provide new solutions to the old problem of financial barriers of access to justice. With the participation of policymakers, practitioners, academics and civil society representatives from all over Europe, the conference seeks to delve deeper into the financial implications of access to justice and the different ways to achieve sustainable civil justice systems in Europe. The topics addressed will include the different methods of financing dispute adjudication, particularly in the context of group litigation (third-party funding, crowdfunding, blockchain technologies), public interest litigation, developments in ADR/ODR, and the new business models of legal professionals.

Call for Papers: During the second day of the Conference (20 October) a panel will be organised which is intended to function as a forum for young scholars and young practitioners to present their work in front of a distinguished and broad audience. We particularly invite Early Career Researchers, PhD candidates (at an advanced stage of their PhD), and young practitioners to participate and present their research on the conference’s topics and beyond. While the contributions should fall within the Conference broader topic (costs and funding of civil justice), authors are free to include matters they deem interesting to explore within this context. Proposals can be theoretical, empirical as well as policy oriented. Interdisciplinary approaches and/or a Law & Economics approach are especially encouraged.

Submissions and deadline: Please submit an extended abstract (max 1000 words) in English to dori@law.eur.nl and cordina@law.eur.nl on 7 July 2023 at the latest. Please include your name, affiliation, and a link to your research profile. Submissions will be selected based on quality, originality, interdisciplinarity and the capacity to incite fruitful debates. Accepted submissions will be notified on 30 July 2023 at the latest. The selected participants will be asked to submit their final manuscript in early 2024.

The organisers aim to include the best papers in the conference proceedings, to be published as an edited volume with a reputable publisher. Further details in this regard will be communicated in due time.

Funding for travel and accommodation is available for the selected authors.

The conference venue will be @ Erasmus University Rotterdam – Woudestein Campus. The conference is organised by Erasmus School of Law in the context of the VICI Project ‘Affordable Access to Justice’. More information at: http://www.euciviljustice.eu/.

 

M. Vittorio Di Bucci a été nommé Greffier du Tribunal par la Conférence plénière

On Monday, May 8, 2023, the Hamburg Max Planck Institute will host its 33th monthly virtual workshop Current Research in Private International Law at 3:00 p.m. – 5:00 p.m. (CEST). Deviating from the usual format there will be an online panel on

Fundamental Rights and PIL after the decision of the German Constitutional Court on the Act to Combat Child Marriages*

The panelist are Henning Radtke (Judge at the Constitutional Court),  Dagmar Coester-Waltjen (Professor emeritus for PIL at University of Göttingen), Susanne Gössl (Professor for PIL at University of Bonn) and Lars Viellechner (Professor for Constitutional Law at University of Bremen). The discussion  discussion will be in German.

After opening statements from the panelists, the discussion will be opened to the audience. All are welcome. More information and sign-up here.

If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.

* Information on the decision here.

Less than half a year after the CJEU’s decision in Case C-646/20 Senatsverwaltung für Inneres (discussed here by Krzysztof Pacula), the Court had to engage again with the question of what constitutes a “judgment” in the sense of an EU instrument in Case C-291/21 Starkinvest.

This time, the question arose in the context of Regulation 655/2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters. The regulation envisages two kinds of situation:

1. The creditor has already obtained a “judgment” (Art. 7(1)): In this case, the creditor only needs to show that there is an urgent need for a protective measure to ensure that the judgment can be effectively enforced against the debtor.
2. The creditor has not yet obtained a “judgment” (Art. 7(2)): In this case, the creditor also needs to show “that he is likely to succeed on the substance of his claim against the debtor”.

In Starkinvest, the claimant had obtained a decision from the Tribunal de commerce de Liège, Belgium, that ordered the debtor to cease seeling certain goods, subject to a penalty payment of EUR 2 500 per breach. On the basis of that decision, they later sought payment of EUR 85 000 in penalties, which they requested the referring court to secure through a European Account Preservation Order. Confronted with the question of how to characterise the initial decision in the context of the above dichotomie, the court referred the case to the CJEU.

The CJEU followed the advice of Advocate General Szpunar, holding that

Article 7(2) of [the Regulation] must be interpreted as meaning that a judgment that orders a debtor to make a penalty payment in the event of a future breach of a prohibitory order and that therefore does not definitively set the amount of that penalty payment does not constitute a judgment requiring the debtor to pay the creditor’s claim, within the meaning of that provision, such that the creditor who requests a European Account Preservation Order is not exempt from the obligation to provide sufficient evidence to satisfy the court before which an application for that order is brought that he or she is likely to succeed on the substance of his or her claim against the debtor.

In reaching that decision, the court emphasised the fact that in a case like this, the precise amount of the debt had not yet been established by a court (see paras. 51–52, 55); accordingly, there was no sufficient justification for exempting the claimant from the requirement to satisfy the court that they are likely to succeed on the merits.

Natsionalna agentsia za prihodite
Principes du droit communautaire
L’accès illicite de la part de tiers à des données à caractère personnel implique la responsabilité pour faute présumée du responsable du traitement et peut donner lieu à un dommage moral réparable

This post is also available via the EAPIL blog.

 

On 25 April 2023 the German Federal Ministry of Justice (Bundesministerium der Justiz – BMJ) has published a bill relating to the establishment of (international) commercial courts in Germany. It sets out to strengthen the German civil justice system for (international) commercial disputes and aims to offer parties an attractive package for the conduct of civil proceedings in Germany. At the same time, it is the aim of the bill to improve Germany’s position vis-à-vis recognized litigation and arbitration venues – notably London, Amsterdam, Paris and Singapore. Does this mean that foreign courts and international commercial arbitration tribunals will soon face serious competition from German courts?

English-language proceedings in all instances

Proposals to improve the settlement of international commercial disputes before German courts have been discussed for many years. In 2010, 2014, 2018 and 2021, the upper house of the German Federal Parliament (Bundesrat) introduced bills to strengthen German courts in (international) commercial disputes. However, while these bills met with little interest and were not even discussed in the lower house of Parliament (Bundestag) things look much brighter this time: The coalition agreement of the current Federal Government, in office since 2021, promises to introduce English-speaking special chambers for international commercial disputes. The now published bill of the Federal Ministry of Justice can, therefore, be seen as a first step towards realizing this promise. It heavily builds on the various draft laws of the Bundesrat including a slightly expanded version that was submitted to the Bundestag in 2022.

The bill allows the federal states (Bundesländer) to establish special commercial chambers at selected regional courts (Landgerichte) which shall, if the parties so wish, conduct the proceedings comprehensively in English. Appeals and complaints against decisions of these chambers shall be heard in English before English-language senates at the higher regional courts (Oberlandesgerichte). If the value in dispute exceeds a threshold value of 1 million Euros and if the parties so wish, these special senates may also hear cases in first instance. Finally, the Federal Supreme Court (Bundesgerichtshof) shall be allowed to conduct proceedings in English. Should the bill be adopted – which seems more likely than not in light of the coalition agreement – it will, thus, be possible to conduct English-language proceedings in at least two, maybe even three instances. Compared to the status quo, which limits the use of English to the oral hearing (cf. Section 185(2) of the Court Constitution Act) and the presentation of English-language documents (cf. Section 142(3) of the Code of Civil Procedure) this will be a huge step forward. Nonetheless, it seems unlikely that adoption of the bill will make Germany a much more popular forum for the settlement of international commercial disputes.

Remaining disadvantages vis-à-vis international commercial arbitration

To begin with, the bill – like previous draft laws – is still heavily focused on English as the language of the court. Admittedly, the bill – following the draft law of the Bundesrat of March 2022 – also proposes changes that go beyond the language of the proceedings. For example, the parties are to be given the opportunity to request a verbatim record of the oral proceedings. In addition, business secrets are to be better protected. However, these proposals cannot outweigh the numerous disadvantages of German courts vis-à-vis arbitration. For example, unlike in arbitration, the parties have no influence on the personal composition of the court. As a consequence, they have to live with the fact that their – international – legal dispute is decided exclusively by German (national) judges, who rarely have the degree of specialization that parties find before international arbitration courts. In addition, the digital communication and technical equipment of German courts is far behind what has been standard in arbitration for many years. And finally, one must not forget that there is no uniform legal framework for state judgments that would ensure their uncomplicated worldwide recognition and enforcement.

Weak reputation of German substantive law

However, the bill will also fail to be a resounding success because it ignores the fact that the attractiveness of German courts largely depends on the attractiveness of German law. To be sure, German courts may also apply foreign law. However, their real expertise – and thus their real competitive advantage especially vis-à-vis foreign courts – lies in the application of German law, which, however, enjoys only a moderate reputation in (international) practice. Among the disadvantages repeatedly cited by practitioners are, on the one hand, the numerous general clauses (e.g. §§ 138, 242 of the German Civil Code), which give the courts a great deal of room for interpretation, and, on the other hand, the strict control of general terms and conditions in B2B transactions. In addition – and irrespective of the quality of its content – German law is also not particularly accessible to foreigners. Laws, decisions and literature are only occasionally available in English (or in official English translation).

Disappointing numbers in Amsterdam, Paris and Singapore

Finally, it is also a look at other countries that have set up international commercial courts in recent years that shows that the adoption of the bill will not make German courts a blockbuster. Although some of these courts are procedurally much closer to international commercial arbitration or to the internationally leading London Commercial Court, their track record is – at least so far – rather disappointing.

This applies first and foremost to the Netherlands Commercial Court (NCC), which began its work in Amsterdam in 2019 and offers much more than German courts will after the adoption and implementation of the bill: full English proceedings both in first and second instance, special rules of procedure inspired by English law on the one hand and international commercial arbitration law on the other, a court building equipped with all technical amenities, and its own internet-based communication platform. The advertising drum has also been sufficiently beaten. And yet, the NCC has not been too popular so far: in fact, only 14 judgments have been rendered in the first four years of its existence (which is significantly less than the 50 to 100 annual cases expected when the court was set up).

The situation in Paris is similar. Here, a new chamber for international commercial matters (chambre commerciale internationale) was established at the Cour d’appel in 2018, which hears cases (at least in parts) in English and which applies procedural rules that are inspired by English law and international arbitration. To be sure, the latter cannot complain about a lack of incoming cases. In fact, more than 180 cases have been brought before the new chamber since 2018. However, the majority of these proceedings are due to the objective competence of the Chamber for international arbitration, which is independent of the intention of the parties. In contrast, it is not known in how many cases the Chamber was independently chosen by the parties. Insiders, however, assume that the numbers are “negligible” and do not exceed the single-digit range.

Finally, the Singapore International Commercial Court (SICC), which was set up in 2015 with similarly great effort and ambitions as the Netherlands Commercial Court, is equally little in demand. Since its establishment, it has been called upon only ten times by the parties themselves. In all other cases in which it has been involved, this has been at the instigation of the Singapore High Court, which can refer international cases to the SICC under certain conditions.

No leading role for German courts in the future

In the light of all this, there is little to suggest that the bill, which is rather cautious in its substance and focuses on the introduction of English as the language of proceedings, will lead to an explosion – or even only to a substantial increase – in international proceedings before German courts. While it will improve – even though only slightly – the framework conditions for the settlement of international disputes, expectations regarding the effect of the bill should not be too high.

 

Note: Together with Yip Man from Singapore Management University Giesela Rühl is the author of a comparative study on new specialized commercial courts and their role in cross-border litigation. Conducted under the auspices of the International Academy of Comparative Law (IACL) the study will be published with Intersentia in the course of 2023.

This post was written by Giesela Rühl, LL.M. (Berkeley), Humboldt-University of Berlin, and is also available via conflictoflaws.net.

On 25 April 2023 the German Federal Ministry of Justice (Bundesministerium der Justiz – BMJ) has published a bill relating to the establishment of (international) commercial courts in Germany. It sets out to strengthen the German civil justice system for (international) commercial disputes and aims to offer parties an attractive package for the conduct of civil proceedings in Germany. At the same time, it is the aim of the bill to improve Germany’s position vis-à-vis recognized litigation and arbitration venues – notably London, Amsterdam, Paris and Singapore. Does this mean that foreign courts and international commercial arbitration tribunals will soon face serious competition from German courts?

English-language Proceedings in All Instances

Proposals to improve the settlement of international commercial disputes before German courts have been discussed for many years. In 2010, 2014, 2018 and 2021, the upper house of the German Federal Parliament (Bundesrat) introduced bills to strengthen German courts in (international) commercial disputes. However, while these bills met with little interest and were not even discussed in the lower house of Parliament (Bundestag) things look much brighter this time: The coalition agreement of the current Federal Government, in office since 2021, promises to introduce English-speaking special chambers for international commercial disputes. The now published bill of the Federal Ministry of Justice can, therefore, be seen as a first step towards realizing this promise. It heavily builds on the various draft laws of the Bundesrat including a slightly expanded version that was submitted to the Bundestag in 2022.

The bill allows the federal states (Bundesländer) to establish special commercial chambers at selected regional courts (Landgerichte) which shall, if the parties so wish, conduct the proceedings comprehensively in English. Appeals and complaints against decisions of these chambers shall be heard in English before English-language senates at the higher regional courts (Oberlandesgerichte). If the value in dispute exceeds a threshold value of 1 million Euros and if the parties so wish, these special senates may also hear cases in first instance. Finally, the Federal Supreme Court (Bundesgerichtshof) shall be allowed to conduct proceedings in English. Should the bill be adopted – which seems more likely than not in light of the coalition agreement – it will, thus, be possible to conduct English-language proceedings in at least two, maybe even three instances. Compared to the status quo, which limits the use of English to the oral hearing (cf. Section 185(2) of the Court Constitution Act) and the presentation of English-language documents (cf. Section 142(3) of the Code of Civil Procedure) this will be a huge step forward. Nonetheless, it seems unlikely that adoption of the bill will make Germany a much more popular forum for the settlement of international commercial disputes.

Remaining Disadvantages vis-à-vis International Commercial Arbitration

To begin with, the bill – like previous draft laws – is still heavily focused on English as the language of the court. Admittedly, the bill – following the draft law of the Bundesrat of March 2022 – also proposes changes that go beyond the language of the proceedings. For example, the parties are to be given the opportunity to request a verbatim record of the oral proceedings. In addition, business secrets are to be better protected. However, these proposals cannot outweigh the numerous disadvantages of German courts vis-à-vis arbitration. For example, unlike in arbitration, the parties have no influence on the personal composition of the court. As a consequence, they have to live with the fact that their – international – legal dispute is decided exclusively by German (national) judges, who rarely have the degree of specialization that parties find before international arbitration courts. In addition, the digital communication and technical equipment of German courts is far behind what has been standard in arbitration for many years. And finally, one must not forget that there is no uniform legal framework for state judgments that would ensure their uncomplicated worldwide recognition and enforcement.

Weak Reputation of German Substantive Law

However, the bill will also fail to be a resounding success because it ignores the fact that the attractiveness of German courts largely depends on the attractiveness of German law. To be sure, German courts may also apply foreign law. However, their real expertise – and thus their real competitive advantage especially vis-à-vis foreign courts – lies in the application of German law, which, however, enjoys only a moderate reputation in (international) practice. Among the disadvantages repeatedly cited by practitioners are, on the one hand, the numerous general clauses (e.g. §§ 138, 242 of the German Civil Code), which give the courts a great deal of room for interpretation, and, on the other hand, the strict control of general terms and conditions in B2B transactions. In addition – and irrespective of the quality of its content – German law is also not particularly accessible to foreigners. Laws, decisions and literature are only occasionally available in English (or in official English translation).

Disappointing Numbers in Amsterdam, Paris and Singapore

Finally, it is also a look at other countries that have set up international commercial courts in recent years that shows that the adoption of the bill will not make German courts a blockbuster. Although some of these courts are procedurally much closer to international commercial arbitration or to the internationally leading London Commercial Court, their track record is – at least so far – rather disappointing.

This applies first and foremost to the Netherlands Commercial Court (NCC), which began its work in Amsterdam in 2019 and offers much more than German courts will after the adoption and implementation of the bill: full English proceedings both in first and second instance, special rules of procedure inspired by English law on the one hand and international commercial arbitration law on the other, a court building equipped with all technical amenities, and its own internet-based communication platform. The advertising drum has also been sufficiently beaten. And yet, the NCC has not been too popular so far: in fact, only 14 judgments have been rendered in the first four years of its existence (which is significantly less than the 50 to 100 annual cases expected when the court was set up).

The situation in Paris is similar. Here, a new chamber for international commercial matters (chambre commerciale internationale) was established at the Cour d’appel in 2018, which hears cases (at least in parts) in English and which applies procedural rules that are inspired by English law and international arbitration. To be sure, the latter cannot complain about a lack of incoming cases. In fact, more than 180 cases have been brought before the new chamber since 2018. However, the majority of these proceedings are due to the objective competence of the Chamber for international arbitration, which is independent of the intention of the parties. In contrast, it is not known in how many cases the Chamber was independently chosen by the parties. Insiders, however, assume that the numbers are “negligible” and do not exceed the single-digit range.

Finally, the Singapore International Commercial Court (SICC), which was set up in 2015 with similarly great effort and ambitions as the Netherlands Commercial Court, is equally little in demand. Since its establishment, it has been called upon only ten times by the parties themselves. In all other cases in which it has been involved, this has been at the instigation of the Singapore High Court, which can refer international cases to the SICC under certain conditions.

No Leading Role for German Courts in the Future

In the light of all this, there is little to suggest that the bill, which is rather cautious in its substance and focuses on the introduction of English as the language of proceedings, will lead to an explosion – or even only to a substantial increase – in international proceedings before German courts. While it will improve – even though only slightly – the framework conditions for the settlement of international disputes, expectations regarding the effect of the bill should not be too high.

— Note: Together with Yip Man from Singapore Management University Giesela Rühl is the author of a comparative study on new specialized commercial courts and their role in cross-border litigation. Conducted under the auspices of the International Academy of Comparative Law (IACL) the study will be published with Intersentia in the course of 2023.

It is with great sadness that we have learned of the untimely passing of Oliver Remien, Professor at the University of Würzburg, Germany, on Monday, 24 April 2023.

Oliver Remien, born in 1957, wrote his doctoral and habilitation theses at the Hamburg Max Planck Institute, where he worked as an assistant to Ulrich Drobnig. He joined the University of Würzburg in 2001. An area of perpetual interest for him was the comparison of European private law(s), with a particular focus on the “Four Freedoms” of primary EU law, the growing impact of secondary EU law, and the practilities of the increasingly frequent application of foreign law in the domestic courts of the Member States.

Our thoughts are with his family.

Good news for the University of Bonn|HCCH Conference on “The HCCH 2019 Judgments Convention: Cornerstones – Prospects – Outlook“, taking place in Bonn on 9 and 10 June 2023:

As of 1 April 2023, the German Federal Government as well as the local authorities have lifted all Covid-related restrictions. Therefore, registration is now possible without submitting any documents of vaccination. As it appears, there has never been a better time to register…

We are looking forward to welcoming a truly international audience at the beautiful premises of the University Club, located just a stone’s throw away from the river Rhine.

For all of you who have already registered and received a confirmation from our office, please be assured that there is nothing more to be done at the moment.

On 15 May 2023, the comparative findings of the ELI Webinar Series on the EU Succession Regulation (previously reported here) will be presented in a concluding webinar. The organizers kindly invite anyone interested into the actual practice regarding cross border succession cases to register for this final event within the series:

“Join us for the concluding webinar on the ‘Application of the EU Succession Regulation in the Member States’! 

The webinar organized within the Special Interest Group on Family and Succession Law of the European Law Institute will take place on Monday, May 15th, 3-5 pm CET and shall present important results gathered during the five webinars on the application of the EU Succession Regulation in the Member States organized in 2022.

Attendance is free of charge. A ZOOM link will be sent to those who register by sending an e-mail to zivilrecht@uni-graz.at”

The first issue for the Journal of Private International Law for 2023 was just published today. It contains the following articles:

 

D McClean, “The transfer of proceedings in international family cases”

There is general agreement that jurisdiction over issues concerning children or vulnerable adults should lie with the court of their habitual residence. There are particular circumstances in which that is not wholly satisfactory and four international instruments have provided, using rather different language, the possibility of jurisdiction being transferred to a court better placed to decide the case. They include Brussels IIb applying in EU Member States since August 2022 and the Hague Child Protection Convention of growing importance in the UK. This paper examines that transfer possibility with a detailed comparison of the relevant instruments.

 

M Lehmann, “Incremental international law-making: The Hague Jurisdiction Project in context”

The Hague Conference on Private International Law is currently working towards a new instrument on jurisdiction and parallel proceedings. But critics ask if we need another instrument, in addition to the Hague Choice of Court Convention of 2005 and the Hague Judgments Convention of 2019. This article gives reasoned arguments for a “yes” and explores possibilities for the substantive content of the new instrument. It does so by looking back and contextualising the new instrument with regard to the two preceding Conventions, and by looking forward to what is still to come, ie the interpretation and application of all three instruments. On this basis, it argues that a holistic approach is required to avoid the risk of a piecemeal result. Only such a holistic approach will avoid contradictions between the three instruments and allow for their coherent interpretation. If this advice is heeded, incremental law-making may well become a success and perhaps even a model for future negotiations.

 

B Köhler, “Blaming the middleman? Refusal of relief for mediator misconduct under the Singapore Convention”

The discussion surrounding the Singapore Convention on Mediation 2018 has gathered steam. In particular, the refusal of enforcement based on mediator misconduct as prescribed in Article 5(1)(e) and (f) has been the focus of debate and is widely perceived to be the Convention’s Achilles heel. These two provisions, already highly controversial in the drafting process, have been criticised as ill-suited to a voluntary process and likely to provoke ancillary dispute. This article defends these grounds for refusal, arguing that they play an indispensable role in guaranteeing the legitimacy of mediated settlements enforced under the Convention. It addresses some of the interpretative challenges within Article 5(1)(e) and (f) before discussing the tension between the provisions on mediator misconduct and the confidentiality of the mediation. The article then offers some guidance on how parties may limit the effects of the provisions, concluding with a brief outlook for the future.

 

A Yekini, “The effectiveness of foreign jurisdiction clauses in Nigeria: an empirical inquiry”

Business entities do not often include terms in commercial agreements unless those terms are relevant and are designed to maximise the gains of the parties to the agreement. To realise their reasonable and legitimate expectations, they expect that contractual terms and promises would be respected by the parties and courts. There is a growing body of literature suggesting that Nigerian courts are not giving maximum effects to foreign jurisdiction clauses (FJC). What is largely missing from the scholarly contributions is that no one has worked out a principled solution to overcome this conundrum. This article significantly contributes to the existing literature through an empirical analysis of Nigerian appellate court decisions on FJCs with a view to gaining deeper insights into the attitude of Nigerian courts to FJCs. Compared to the US where the national average of enforcement is 74%, a 40% rate for Nigeria does not project Nigeria as a pro-business forum. This outlook can potentially disincentivise cross-border trade and commerce between Nigeria and the rest of the world. To address this problem, the paper proceeds by presenting a normative framework, built principally on economic and contract theories, for enforcing FJCs. As most of the cases are B2B transactions, the paper invites the courts to treat FJCs and arbitration clauses equally and to replace forum non conveniens considerations with a more principled approach which limits non-enforcement to overriding policy, and a strong cause that is defined by reasonableness and foreseeability.

 

MM Kabry & A Ansari, “The enforcement of jurisdiction agreements in Iran”

Parties to a contract may designate the court or courts of a particular country to decide their disputes which have arisen or may arise from a particular legal relationship. Many countries give party autonomy its binding effect in selecting the competent court and enforcing jurisdiction agreements. There is complete silence in Iranian law regarding the enforcement of jurisdiction agreements. The current study examines the enforcement of jurisdiction agreements under Iranian law. This study investigates whether parties in international disputes can agree to confer jurisdiction to Iranian non-competent courts and whether they can agree to exclude the jurisdiction of competent Iranian courts in favour of foreign courts. The study contends that parties can agree to grant jurisdiction to Iran’s non-competent courts unless the excluded foreign court has exclusive jurisdiction to hear the dispute. On the other hand, parties may agree to exclude the jurisdiction of the competent Iranian courts in favour of foreign courts unless the Iranian courts assert exclusive jurisdiction over the dispute.

 

A A Kostin & DD Kuraksa, “International treaties on assistance in civil matters and their applicability to recognition of foreign judgments on the opening of insolvency proceedings (reflections regarding the Russian national and international experience)”

The article examines the question of admissibility of recognition of foreign judgments on commencement of bankruptcy proceedings on the basis of international treaties on legal assistance. It examines the background of these international treaties, as well as the practice of their application in respect of this category of foreign judgments. The authors conclude that foreign court decisions on opening of insolvency (bankruptcy) proceedings should be regarded as “judgments in civil matters” for the purpose of the international treaties on legal assistance. This category of foreign judgments should be recognised on the basis of international treaties in the Russian Federation, despite the existing approach of Russian courts (including the Judgment of the Arbitrazh (Commercial) Court of the Ural District of 09.10.2019 in case No. A60-29115/2019).

The Swiss Institute of Comparative Law in Lausanne will host its 34th Private International Law day on 1 June 2023, under the title Personal Identity and Status Continuity – A focus on Names and Gender in the Conflict of Laws.

The event continues a series inaugurated last year with two webinars on filiation and same-sex marriage, respectively.  The programme and materials of those webinars can be found here and here (under media & fichiers).

The three panels are co-organised with ELI special interest group on family and succession law.

The day before the conference, a special side event organized by the Institute with the collaboration of Walter Stoffel, University of Fribourg, and Lucie Bader, film and media scholar, Bern, will introduce the topic of Law and Gender.

More details here.

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Programme Galileo : le recours d’OHB System contre l’attribution du marché des satellites de transition à Thales Alenia Space Italia et à Airbus Defence & Space est rejeté