Droit international général

« From 5 to 9 July 2021, the Experts’ Group on Parentage / Surrogacy met for the ninth time. […] The Experts’ Group discussed the scope of the possible draft Convention on legal parentage (draft Convention) and the scope of the possible draft Protocol on legal parentage established as a result of an (international) surrogacy arrangement (draft Protocol). The Group discussed in particular the desirability and feasibility of including domestic adoptions in the scope of the draft Convention; legal parentage established as a result of a domestic surrogacy arrangement in the draft Convention or draft Protocol; and domestic adoptions in the context of a (domestic / international) surrogacy arrangement in the draft Convention or draft Protocol.

The Experts’ Group will meet again in November 2021 and in 2022, before submitting its final report for the 2023 CGAP meeting ».

The report of the ninth meeting is available at https://assets.hcch.net/docs/a29ca035-f4d9-469f-9ff9-cd9fca1918c8.pdf. One finds in it the Aide-mémoire of the meeting.

Windhorst v Levy [2021] EWHC 1168 (QB) has been in my in-tray a little while. The court was asked to consider whether registration of a German judgment under Brussels Ia should be set aside when the judgment debt in question was subsequently included within a binding insolvency plan, which is to be recognized in E&W pursuant to the European Insolvency Regulation  – EIR 1346/2000 (not materially different on this point to the EIR 2015). Precedent referred to includes Percival v Moto Novu LLC.

Appellant argues the registration order should be set aside as the initial 2003  judgment is no longer enforceable, having been waived as part of a binding insolvency plan, which came into effect by order of a German court on 31 August 2007 (“the Insolvency Plan”), and which this court is bound to recognize under the Insolvency Regulation.

In CJEU C-267/97 Coursier v Fortis Bank SA (held before the adoption of the EIR) it was held that enforceability of a judgment in the state of origin is a precondition for its enforcement in the state in which enforcement is sought. However that judgment then at length discussed what ‘enforceability’ means, leading to the Court holding that it refers solely to the enforceability, in formal terms, of foreign decisions and not to the circumstances in which such decisions may in practice be executed in the State of origin. This does not require proof of practical enforceability. The CJEU left  it to ‘the court of the State in which enforcement is sought, in appeal proceedings brought under [(now) Brussels Ia], to determine, in accordance with its domestic law including the rules of private international law, the legal effects of a decision given in the State of origin in relation to a court-supervised liquidation.’

The respondent contends that, applying the test laid down in Coursier v Fortis, the 2003 Judgment plainly remains enforceable in formal terms under German law.

The judge, at 52 ff, refers ia to CJEU Prism Investments and Salzgitter to emphasise the very narrow window for refusal of recognition, and holds [56] that the German judgment clearly is still formally enforceable in Germany (where enforcement is nota bene only temporarily stayed pending appeal proceedings). The effects of the German insolvency plan, under German law, are not such that the 2003 judgment has become unenforceable [58].

The request for a stay of execution is also denied, seeing as the appellant chose not to pursue a means available to it under German law and before the German courts, to seek a stay (it would have required it to put down the equivalent sum as court security).

Geert.

EU Private International Law, 3rd ed. 2021, 2.560 ff, 5.141 ff.

Brussels I (not Ia; no material difference), Insolvency Regulation EIR
Whether registration of DE judment should be set aside when debt subsequently included in #insolvency plan, to be recognized under EIR
Windhorst v Levy [2021] EWHC 1168 (QB) (6 05 2021)https://t.co/B23rsMDykA

— Geert van Calster (@GAVClaw) May 7, 2021

Winslet & Ors v Gisel, The Estate of [2021] EWHC 1308 (Comm) is a brilliant example to teach the ‘looking over the fence’ method for determining forum contractus under Article 7(1), for contracts that do not fall within the default categories and whence the CJEU De Bloos place of performance bumps into the limits of harmonisation following CJEU Tessili v Dunlop. Confused?: the judgment certainly helps.

Claimants, domiciled at England, seek to recover from the estate of a late friend, a considerable sum by way of repayment of principal in respect of a number of interest-free loans between friends (the borrower domiciled at France).

At [16] Butcher J holds (despite considering the broad interpretation of ‘services’ by the AG in Corman-Collins /Maison du Whiskey) ‘In my judgment, the simple provision of money to a friend, which is not undertaken as part of a business of lending money, probably does not qualify as the provision of a service’ (per A7(2), GAVC – reference is made to C-533/07 Falco Privatstiftung v Weller-Lindhorst [29]: “The concept of services implies, at the least, that the party who provides the service carries out a particular activity in return for remuneration.”

The answer to the question ‘what is the place of performance of the obligation to repay’ therefore leads to Rome I per CJEU Tessili v Dunlop and to Article 4(2) Rome I. [26]

‘In the context of banking services, it is, at least ordinarily, the lender that renders characteristic performance of a loan agreement in providing the principal sum to the borrower’ (reference to CJEU Kareda). [27] ‘The question of which party renders the characteristic performance of a loan agreement outside the sphere of financial services has been viewed as rather less clear cut.’ [32] ‘pursuant to the contracts of loan which are in issue, claimants loaned money in return for a promise to repay.’ They, it is held, rendered characteristic performance under the Loans.

As a result, the Loans are governed by English law, as England is the place where each claimant has his or its habitual residence, and English law therefore determines the place of performance, which it does at the creditor’s place of residence or business (contrary it would seem to the position under French law.

Superbly clear analysis.

Geert.

EU private international law, 3rd ed. 2021, 2.401 ff.

A classic De Bloos, Tessili v Dunlop looking over the fence quagmire.
A7(1) forum contractus 'goods', 'services', 'neither' issue.
Winslet & Ors v Gisel, The Estate of [2021] EWHC 1308 (Comm)https://t.co/LlwbfpJaWR

— Geert van Calster (@GAVClaw) July 7, 2021

Dr. João Ribeiro-Bidaoui (First Secretary at the Hague Conference on Private International Law) has posted a compelling answer on the Kluwer Arbitration Blog to the debate sparked by Prof. Gary Born’s criticism in a series of posts published on the same Blog (see Part I, Part II, and Part III). First Secretary Ribeiro-Bidaoui’s response is masterfully crafted in drawing the boundaries between equally valuable and essential instruments, and certainly constitutes a most welcome contribution.

For further commentary on these exchanges, see also on the EAPIL Blog, here.

In ID v LU & Anor [2021] EWHC 1851 (Comm) Pelling J discusses a challenge to jurisdiction in which each of the parties are Ukrainian nationals. Brussels Ia applies but is only engaged viz one of the defendants. Claimant and second defendant are both domiciled and resident in Ukraine. The first defendant is a Ukrainian national who is and was at all material times domiciled in an otherwise unidentified EU Member State.

Claimant alleges that the second defendant approached him requesting that he move his corporate banking business to the second defendant, a Bank. Following discussions, the claimant agreed to do so and considerable funds  were placed with The Bank. The claimant’s case is that he agreed to do so only after the second defendant agreed that he would undertake personal responsibility for all monies that the companies placed with The Bank. The claimant alleges that it was expressly agreed by the claimant and second defendant that this oral agreement was governed by English law.

There was more tro and fro however I focus here on the jurisdictional challenge. With reference to Article 4 BIa and the most recent authority of Vedanta, the judge holds that in principle the defendant with EU domicile has a right to refuse to be sued other than in his place of domicile. However that defendant acknowledged service, indicating an intention to defend the claim but not to contest jurisdiction. This leads the judge to conclude, after some discussion, that there is A26 BIa submission (aka voluntary appearance).

Next follows an important discussion on the circumstances in which a defendant who voluntarily submits, may serve as an anchor defendant under the English residual rules.  It would certainly not be possible under Brussels Ia. The relevant rule in the practice directions (this is ‘Gateway 3’) reads

“3.1 The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where –… 3) A claim is made against a person (‘the defendant’) on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and  – a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.

Second defendant argues claimant is not entitled to rely on Gateway 3 because the first defendant is not a defendant who is to be treated as being a person on whom the claim form has been or will be served because the court has jurisdiction over the first defendant only because he has voluntarily submitted to the jurisdiction of the English Court. The overall nature of the discussions on this issue essentially discuss the need to avoid abuse. Of note in this respect is the judge finding [41] that there is ‘no evidence that suggests that there was any agreement reached between the claimant and the first defendant by which the first defendant agreed to submit to the jurisdiction of the court prior to the issue of the Claim Form in these proceedings or for that matter afterwards.’

Nevertheless the judge holds that the current authorities in particular the Court of Appeal in the Benarty [1983] 1 Lloyds Rep 361, continue to not permit a claimant to rely on an anchor defendant who has voluntarily submitted to the jurisdiction when he could not otherwise have been served in accordance with the CPR. Obiter he holds that while there is a real issue to be tried against the second defendant, the contract gateway for jurisdiction (which would require English law to be the lex contractus) is not engaged. No clearly demonstrated will exists for English law to be lex voluntatis per Rome I [76] and [80]

There is no plausible evidential basis to submit that that the governing law identified by either Article 4(2), 4(3), or 4(4) [of Rome 1] would be English law. The Tripartite Agreement was, if made: (a) agreed between three Ukrainians who reside (or resided) in Ukraine and/or [The EU Member State]; (b) agreed in, variously, [The EU Member State], Ukraine, and France; (c) premised on a further agreement said to have been agreed in Ukraine, between two Ukrainians, in respect of deposits made by Ukrainians into a Ukrainian bank; (d) to be performed outside England. No party has provided any evidence of any connection between themselves, or the Tripartite Agreement, and England”

Neither does the tort gateway help [83]:

There is no evidence that at any stage any of the contact that took place leading to what the claimant contends to be the inducement of a breach by the first defendant of the Tripartite Agreement took place otherwise than in either Ukraine or The EU Member State.

At [86] ff England is, equally obiter, held to be forum non conveniens.

Lack of jurisdiction against the second defendant is confirmed. One imagines there might be ground of appeal given the change to the practice directions’ formulation after the Benarty and the need to clear up this principled issue.

Geert.

The Centre for Socio-Legal Studies at the University of Oxford will host a webinar on 27 July 2021 (12.00-14.00 British Summer Time (GMT+1)) dedicated to Commercial Courts in a Global Context.

The event is co-sponsored by the University of Oxford (China, Law & Development), Faisalabad Industrial Estate Development & Management Company, Ease of Doing Business in Pakistan, Pakistan-China Joint Chamber of Commerce & Industry, and Center for International Investment and Commercial Arbitration.

This webinar and research is related to developments in recent years. A number of States and municipalities have established new commercial courts which are perceived by some to be the building blocks of economic development and global commerce. These new commercial courts include those that are designed primarily for domestic disputes and others geared toward international disputes. The new international courts share a common aspiration: to provide forums for the resolution of commercial conflicts that are cheap, quick, and whose judgments are enforceable.

As part of its Ease of Doing Business Reforms Agenda, Pakistan has recently established commercial courts at the district level. The new commercial courts dovetail with a number of macro-economic and geostrategic trends, including the rise of Asia, and China in particular, as a supplier of both outbound capital and dispute resolution, and the increasing diversification of forums across the world.

This webinar will provide an in-depth discussion of the new domestic and international commercial courts with a focus on topics including jurisdiction and legislative basis, regulatory framework, relationship to the domestic court system, staffing and personnel issues, the courts-arbitration nexus, and cross-border disputes and associated enforcement issues.

The speakers, including judges and lawyers from Pakistan, the UK, Singapore, and China, will share insights with the launch and evolution of these new courts in the context of both dynamic domestic and global legal transformations.

More information about the webinar and the ERC Research project are available here. See here for registering for the event.

The opinion of the European Economic and Social Committee on ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Digitalisation of justice in the European Union. A toolbox of opportunities (COM(2020) 710 final) (EESC 2021/00048) has been published at the OJEU, C 286, 16.7.2021, p. 88, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.286.01.0088.01.ENG&toc=OJ%3AC%3A2021%3A286%3ATOC

The opinion of the European Economic and Social Committee on ‘Proposal for a Regulation of the European Parliament and of the Council on a computerised system for communication in cross-border civil and criminal proceedings (e-CODEX system), and amending Regulation (EU) 2018/1726’ (COM(2020) 712 final — 2020/0345 (COD)) (EESC 2020/05898) has been published at the OJEU, C 286, 16.7.2021, p. 82, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.286.01.0082.01.ENG&toc=OJ%3AC%3A2021%3A286%3ATOC

The opinion of the European Economic and Social Committee on ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions “Ensuring justice in the EU — A European judicial training strategy for 2021-2024”’ (COM(2020) 713 final) (EESC 2021/00976) has been published at the OJEU, C 286, 16.7.2021, p. 141, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.286.01.0141.01.ENG&toc=OJ%3AC%3A2021%3A286%3ATOC

The latest issue of RabelsZ is out. It contains the following articles:

Kai-Oliver Knops: Die unionsrechtlichen Voraussetzungen des Rechtsmissbrauchseinwands – am Beispiel des Widerrufs von Verbraucherdarlehens- und Versicherungsverträgen (The Requirements of EU Law on Abuse of Law and Abuse of Rights – the Example of the Right to Withdraw from Credit Agreements and Insurance Contract), Volume 85 (2021) / Issue 3, pp. 505-543 (39), https://doi.org/10.1628/rabelsz-2021-0023

In the European Union, it is apparently only in Germany that withdrawals by consumers and policy-holders are often rejected as invalid and abusive. Mostly it is argued that an objection of abuse is subject to national law and that application of the principle of good faith is a matter for the judge alone. In fact, the jurisprudence of the Court of Justice of the European Union sets strict limits on the objection of abuse and requires special justification, which the national legal system must comply with in accordance with the primacy of European Union law. Under EU law, withdrawal from consumer loans and insurance contracts will be vulnerable to an objection of legal abuse only in very exceptional cases and by no means as a rule.

Bettina Rentsch: Grenzüberschreitender kollektiver Rechtsschutz in der Europäischen Union: No New Deal for Consumers (Cross-Border Collective Redress: No New Deal for Consumers), Volume 85 (2021) / Issue 3, pp. 544-578 (35), https://doi.org/10.1628/rabelsz-2021-0024

The recently adopted Directive on representative actions marks the beginning of a new era for collective redress in the European Union. However, applying the Brussels Ia and Rome Regulations for questions regarding jurisdiction, recognition, enforcement and the applicable law entails jurisdictional and choice-of-law-related problems inherent in cross-border aggregate litigation as such: European private international law, including its rules on jurisdiction and enforcement, is designed for bipartisan proceedings and thus shows a variety of inconsistencies, deficits and contradictions when faced with collective redress. Moreover, applying a multitude of laws to a single collective proceeding generates prohibitive costs for the plaintiff side, while generating economies of scale on the defendant side. It is unlikely that the parties to collective proceedings will enter a subsequent choice of law agreement to reduce the number of applicable laws.

Frederick Rieländer: Der »Vertragsabschlussschaden« im europäischen Deliktskollisions- und Zuständigkeitsrecht (Locating “Unfavourable Contracts” in European Private International Law), Volume 85 (2021) / Issue 3, pp. 579-619 (41), https://doi.org/10.1628/rabelsz-2021-0025

The inconsistent case law of the ECJ concerning the task of locating pure economic loss, for the purposes of Art. 7 No. 2 Brussels Ibis Regulation and Art. 4 para. 1 Rome II Regulation, is characterisedby the absence of a careful theoretical analysis of the protective purposes of the relevant liability rules. In this article, it is submitted that in the voluminous category of cases where a party has been induced into entering an unfavourable contract with a third party, “damage” for the purposes of Art. 7 No. 2 Brussels Ibis Regulation and Art. 4 para. 1 Rome II Regulation generally occurs at the moment when the victim is irreversibly bound to perform its obligation to the third party, whilst it is immaterial whether and, if so, where the contract is performed. Although the locus contractus appears to be the most appropriate connecting factor in the majority of the relevant cases of misrepresentation – particularly for the purpose of tying prospectus liability to the market affected – it needs to be displaced, for instance, in those cases where consumers are lured into purchasing faulty products abroad by fraudulent misrepresentations on the part of the manufacturer.

Raphael de Barros Fritz: Die kollisionsrechtliche Behandlung von trusts im Zusammenhang mit der EuErbVO (The Treatment of Trusts under the European Succession Regulation), Volume 85 (2021) / Issue 3, pp. 620-652 (33), https://doi.org/10.1628/rabelsz-2021-0026

Few legal institutions cause more difficulties in the context of the European Succession Regulation (ESR) than trusts. There is, for instance, hardly any agreement on the scope of the exception created for trusts in Art. 1 para. 2 lit. j ESR. There is also widespread support in academic literature for the application of Art. 31 ESR to trusts, although neither the precise contours of this enigmatic provision nor its exact functioning in connection with trusts has yet been established. The present article addresses, therefore, the question of how trusts are to be treated within the ESR. In particular, it will be shown how Art. 1 para. 2 lit. j ESR is to be understood against the background of Recital 13. In addition, the question will be raised as to what extent Art. 31 ESR has any importance at all in connection with trusts.

Written by Jingru Wang, Wuhan University Institute of International Law

1.Background

Three days after its low-key listing in the US on 30 June 2021, Didi Chuxing (hereinafter “Didi”) was investigated by the Cyberspace Administration of China (hereinafter “CAC”) based on the Chinese National Security Law and Measures for Cybersecurity Review.[1] Didi Chuxing as well as 25 Didi-related APPs were then banned for seriously violating laws around collecting and using personal information,[2] leading to the plummet of Didi’s share. On 16 July 2021, the CAC, along with other six government authorities, began an on-site cybersecurity inspection of Didi.[3] The CAC swiftly issued the draft rules of Measures for Cybersecurity Review and opened for public consultation.[4] It proposed that any company with data of more than one million users must seek the Office of Cybersecurity Review’s approval before listing its shares overseas. It also proposed companies must submit IPO materials to the Office of Cybersecurity Review for review ahead of listing.

It is a touchy subject. Didi Chuxing is a Beijing-based vehicle for hire company. Its core business bases on the accumulation of mass data which include personal and traffic information. The accumulated data not only forms Didi’s unique advantage but also is the focus of supervision. The real concern lays in the possible disclosure of relevant operational and financial information at the request of US securities laws and regulations, which may cause data leakage and threaten national security. Therefore, China is much alert to information-based companies trying to list overseas.

The overseas listing of China-related companies has triggered regulatory conflicts long ago. The Didi event only shows the tip of an iceberg. This note will focus on two issues: (1) China’s supervision of red-chip companies’ overseas listing; (2) the conflicts between the US’s demand for disclosure and China’s refusal against the US’s extraterritorial jurisdiction.

2. Chinese supervision on red-chip companies’ overseas listing

A red-chip company does most of its business in China, while it is incorporated outside mainland China and listed on the foreign stock exchange (such as New York Stock Exchange). Therefore, it is expected to maintain the filing and reporting requirements of the foreign exchange. This makes them an important outlet for foreign investors who wish to participate in the rapid growth of the Chinese economy. When asking Chinese supervision on red-chip companies listed overseas, such as Didi, the foremost question is whether the Chinese regulatory authority’s approval is required for them to launch their shares overseas. It is uneasy to conclude.

One reference is the Chinese Securities Law. Article 238 of the original version of the Chinese Securities Law provides that “domestic enterprises issuing securities overseas directly or indirectly or listing their securities overseas shall obtain approval from the securities regulatory authority of the State Council following the relevant provisions of the State Council.” This provision was amended in 2019. The current version (Art. 224 of the Chinese Securities Law) only requires the domestic enterprises to comply with the relevant provisions of the State Council. The amendment indicated that China has adopted a more flexible approach to addressing overseas listing. Literally, the securities regulatory authority’s approval is no longer a prerequisite for domestic enterprises to issue securities overseas.

When it comes to Didi’s listing in the US, a preliminary question is the applicability of such provision. Art. 224 is applied to “domestic enterprise” only. China adopts the doctrine of incorporation to ascertain company’s nationality.[5] According to Article 191 of the Chinese Company Law, companies established outside China under the provisions of foreign law are regarded as foreign companies. Didi Global Inc. is incorporated in the state of Cayman Islands, and a foreign company under the Chinese law. In analogy, Alibaba Group Holding Ltd., another representative red-chip enterprise, had not obtained and not been required to apply for approval of the Chinese competent authority before its overseas listing in 2014. A Report published by the Chinese State Administration of Foreign Exchange specifically pointed out that “domestic enterprises” were limited to legal persons registered in mainland China, which excluded Alibaba Group Holding Ltd., a Cayman Islands-based company with a Chinese background.[6]

In summary, it is fair to say that preliminary control over red-chip enterprise’s overseas listing leaves a loophole, which is partly due to China’s changing policy. That’s the reason why Didi has not been accused of violating the Chinese Securities Law but was banned for illegal accumulation of personal information, a circumvent strategy to avoid the possible information leakage brought by Didi’s public listing. Theoretically, depends on the interpretation of the aforementioned rules, the Chinese regulatory authority may have the jurisdiction to demand preliminary approval. Based on the current situation, China intends to fill the gap and is more likely to strengthen the control especially in the field concerning data security.

3. The conflict between the US’s demand for audit and China’s refusal against the US’s extraterritorial jurisdiction

Another problem is the conflict of supervision. In 2002, the US promulgated the Sarbanes-Oxley Act, under which the Public Company Accounting Oversight Board (hereinafter “PCAOB”) was established to oversee the audit of public companies. Under the Sarbanes-Oxley Act, wherever its place of registration is, a public accounting firm preparing or issuing, or participating in the preparation or issuance of, any audit report concerning any issuer, shall register in the PCAOB and accept the periodic inspection.[7] The PCAOB is empowered to investigate, penalize and sanction the accounting firm and individual that violate the Sarbanes-Oxley Act, the rules of the PCAOB, the provisions of the securities laws relating to the preparation and issuance of audit reports and the obligations and liabilities of accountants. Opposed to this provision (although not intentionally), Article 177 of the Chinese Securities Law forbids foreign securities regulatory authorities directly taking evidence in China. It further stipulates that no organization or individual may arbitrarily provide documents and materials relating to securities business activities to overseas parties without the consent of the securities regulatory authority of the State Council and the relevant State Council departments. Therefore, the conflict appears as the US requests an audit while China refused the jurisdiction of PCAOB over Chinese accountant companies.

It is suspected that despite the PCAOB’s inofficial characteristic, information (including the sensitive one) gathered by the PCAOB may be made available to government agencies, which may threaten the national security of China.[8] Consequently, China prevents the PCAOB’s inspection and some of Chinese public accounting firm’s application for registration in the PCAOB has been suspended.[9] In 2013, the PCAOB signed a Memorandum of Understanding with Chinese securities regulators that would enable the PCAOB under certain circumstances to obtain audit work papers of China-based audit firms. However, the Memorandum seems to be insufficient to satisfy the PCAOB’s requirement for supervision. The PCAOB complained that “we remain concerned about our lack of access in China and will continue to pursue available options to support the interests of investors and the public interest through the preparation of informative, accurate, and independent audit reports.”[10] After the exposure of Luckin Coffee’s accounting fraud scandal, the US promulgated the Holding Foreign Companies Accountable Act in 2020. This act requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the PCAOB. If the PCAOB is unable to inspect the issuer’s public accounting firm for three consecutive years, the issuer’s securities are banned from trade on a national exchange or through other methods.

China has made “national security” its core interest and is very prudent in opening audit for foreign supervisors. From the perspective of the US, however, it is necessary to strengthen financial supervision over the public listing. As a result, Chinese enterprises have to make a choice between disappointing the PCAOB and undertaking domestic penalties. Under dual pressure of China and the US, sometimes Chinese companies involuntarily resort to delisting. This may not be a result China or the US long to see. In this situation, cooperation is a better way out.

4. Conclusion

China’s upgrading of its cybersecurity review regulation is not aimed at burning down the whole house. Overseas listing serves China’s interest by opening up channels for Chinese companies to raise funds from the international capital market, and thus contribute to the Chinese economy. The current event may be read as a sign that China is making provisions to strengthen supervision on red-chip companies’ overseas listing. It was suggested that the regulatory authority may establish a classified negative list. Enterprises concerning restricted matters must obtain the consent of the competent authority and securities regulatory authority before listing.[11] It is not bad news for foreign investors because the listed companies will undertake more stringent screening, which helps to build up an orderly securities market.

[1] http://www.cac.gov.cn/2021-07/02/c_1626811521011934.htm

[2] http://www.cac.gov.cn/2021-07/04/c_1627016782176163.htm; http://www.cac.gov.cn/2021-07/09/c_1627415870012872.htm.

[3] http://www.cac.gov.cn/2021-07/16/c_1628023601191804.htm.

[4] Notice of Cyberspace Administration of China on Seeking Public Comments on the Cybersecurity Review Measures (Draft Revision for Comment), available at: http://www.cac.gov.cn/2021-07/10/c_1627503724456684.htm

[5] The real seat theory is recommended by commentators, but not accepted by law. Lengjing, Going beyond audit disputes: What is the solution to the crisis of China Concept Stocks?, Strategies, Volume 1, 2021, p. 193.

[6] 2014 Cross-border capital flow monitoring report of the People’s Republic of China, available at: http://www.gov.cn/xinwen/site1/20150216/43231424054959763.pdf

[7] Sarbanes-Oxley Act, §102(a), §104 (a) & (b).

[8] Sarbanes-Oxley Act, §105 (b)(5)(B).

[9] https://pcaobus.org/Registration/Firms/Documents/Applicants.pdf

[10] China-Related Access Challenges, available at: https://pcaobus.org/oversight/international/china-related-access-challenges.

[11] https://opinion.caixin.com/2021-07-09/101737896.html.

Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm)  discusses i.a. [840 ff; this is a lengthy judgment] the applicable law in the case of conspiracy. Lakatamia advance two claims against the Defendants, the first re dissipation of two assets (net sale proceeds of two Monegasque villas – the Monaco conspiracy and a private jet – the Aeroplane conspiracy)  in breach of a World Wide Freezing Order (“WFO”)  and secondly re intentional violation of rights in a judgment debt.

Lakatamia’s case as claimants is that English law applies to the claims regarding both conspiracies, whilst Madam Su’s case is that Monaco law applies to the claim regarding the Monaco Sale Proceeds and that an unspecified law (but not English law) applies to the Aeroplane Conspiracy.

None of the specific categories of torts in the Rome II Regulation are said to apply, bringing the focus therefore on the general rule of Article 4(1), with firstly its insistence that only direct damage determines lex causae, not indirect damage.

At 843 Bryan J, like claimants, focuses on the judgment:

the focus being on the freezing order and judgment, with the damage to Lakatamia being suffered in England as that is the situs of the Judgment Debt arising out of the Underlying Proceeding in England, policed by the… Freezing Order, and that is where the Judgment Debt stands to be paid, and where Lakatamia suffers damage if it is not paid or the ability for it to be paid is impaired – put another way England is the country where the Judgment Debt should have been paid, and the damage has accordingly occurred here.

To support the point, at 845 ff English and CJEU authority (much of it also reviewed on this blog) under A7(2)BIa is discussed albeit the judge correctly cautions ‘Authorities on the Brussels Regulation are “likely to be useful” but are not of direct application’. Core reference is Pan Oceanic,

(6)  There is a difference between a case in which the claimant complains that he has lost his money or goods (as in the Marinari case [1996] QB 217 or the Domicrest case [1999] QB 548 ) and a case in which the claimant complains that he has not received money or goods which he should have received. In the former case the harm may be regarded as occurring in the place where the money or goods were lost, although the loss may be said to have been consequentially felt in the claimant’s domicile. In the latter case the harm lies in the non-receipt of the money or goods at the place where they ought to have been received, and the damage to him is likely to have occurred in the place where he should have received them: the Dolphin case [2010] 1 All ER (Comm) 473 , para 60 and the Réunion Européenne case [2000] QB 690 , paras 35-36. (emphasis in the original).

I am not entirely convinced. While it is true that the conspiracy clearly impacts on the receipts, this is the consequence of actual behaviour by defendants elsewhere, with actual impact of that behaviour in that same place abroad. I do not think it is inconceivable to qualify the damage in England as ricochet hence indirect damage. The discussion here leads to CJEU Lazar which, it would seem, was not discussed in the proceedings.

At 860 at any rate, the judge lists his reasons for picking English law as the ‘proper law of the tort’ per A4(3) Rome II. This may be a more solid decision than the A4(1) decision.

Geert.

EU Private International Law, 3rd ed. 2021, para 4.30, para 4.39 ff.

Distinguishing (in)direct damage per Rome II in a case of conspiracy [840ff]
Eventually A4(3) Rome II applied: manifestly closer connection to England
Lakatamia Shipping Co Ltd v Su & Ors [2021] EWHC 1907 (Comm)https://t.co/pO1BRphvyB

— Geert van Calster (@GAVClaw) July 12, 2021

The second issue of 2021 of Dutch PIL journal, including both English and Dutch language papers, has just been published.

It includes these papers:

K.C. Henckel, Rechtskeuze in het ipr-arbeidsrecht: enkele gedachten over het begunstigingsbeginsel / p. 251-273

This article discusses the preferential law approach that is enshrined in Article 8(1) Rome I Regulation. This provision limits the effects of a choice of law in the sense that the choice may not deprive the employee of the protection afforded to him by the mandatory provisions of the law that would have applied in the absence of a choice. It is generally accepted that the law that is most favourable to the employee merits application. The determination of this preferential law requires a comparison between the chosen law and the law that would have applied in the absence of such a choice. The article examines the method of comparison used throughout Dutch case law which shows that a preferential law approach is rarely applied. Instead, the majority of judgments apply the mandatory provisions of the objectively applicable, Dutch, law without further explanation. Since the application of the preferential law approach seems to be plagued by ambiguity, this article questions the desirability and practical feasibility of the comparison between the chosen law and the mandatory provisions of the law that would have applied in the absence of such a choice.

L.C.J. van Apeldoorn, Erkenning van internationale rechtspersonen in het Nederlandse privaatrecht / p. 274-291

This article examines the grounds for the recognition of the legal personality of international legal persons in Dutch private law, focussing in particular on foreign states and international organizations. Based on an analysis of the decision of the Dutch Hoge Raad (Supreme Court) in UNRRA/Daan, it is argued that the legal personality of international organizations is recognised by means of the (analogous) application of a rule, codified in Article 10:119 of the Dutch Civil Code, according to which the legal personality of a corporation depends on its personal law. When considering the personal law of international organisations, which is public international law including the terms of the founding treaty, decisive is not whether the organisation is an international legal person, but whether it is granted, on the basis of public international law, legal personality in the legal orders of its member states. The rule governing the recognition of the legal personality of international organisations is not applicable to foreign states because public international law does not imply or require that states are afforded legal personality in municipal law. Rather, it is argued, the legal personality of foreign states is recognised on the basis of an unwritten rule of Dutch private international law, originating in international comity, that attributes legal personality to foreign states. The application of this rule coincides in practice with the application of another rule also originating in comity, requiring as a matter of public international law that foreign states are granted standing to be party to legal proceedings before municipal courts.

Okoli, An analysis of the Nigerian Court of Appeal’s decisions on foreign choice of court agreements in the year 2020 / p. 292-305

In Nigeria valid commercial contracts between parties are treated as sacrosanct and binding by Nigerian courts. It is however uncertain (unlike in the European Union) whether a valid foreign choice of court agreement, which is a term of the parties’ contract, will be enforced by Nigerian courts. In this connection, the decisions of Nigerian courts are not consistent. Nigerian courts have applied three approaches to the enforcement of foreign choice of court agreements – ouster clauses, the Brandon test, and the contractual approach. This article analyses the approach of Nigerian appellate courts to the enforcement of foreign choice of court agreements in light of three Court of Appeal decisions delivered in the year 2020.

latest phds, summary: Stuij, Iura novit curia en buitenlands recht. Een rechtsvergelijkend en Europees perspectief (dissertatie Erasmus Universiteit Rotterdam, 2021) (samenvatting proefschrift) / p. 306-311

This contribution is a short summary of a PhD thesis defended at Erasmus School of Law on April 29th, 2021, on the legal maxim iura novit curia in relation to the application of foreign law in civil proceedings. The thesis is a result of a comparative research into Dutch, German and English law, as well as European law. It analyses, evaluates and recommends several approaches to the problem of foreign law in civil litigation. This contribution discusses, inter alia, the method of the thesis including its comparative approac

A conference for a forthcoming Elgar Research Handbook on Extraterritoriality and International Law. The conference
will consist of a series of workshop panels, with the public being able to watch the discussions through a live webinar.
Opportunities will exist for audience Q&A.

Further information and registration can be found here: https://law.indiana.edu/news-events/lectures-events/extra.html

Hosted by:
Cedric Ryngaert
Utrecht University (Utrecht Centre for Accountability and Liability Law)

Austen Parrish
Indiana University Maurer School of Law

Day One
Wednesday, September 15

Welcome and Opening Remarks (8:15-8:30 am ET; 2:15-2:30 pm CET
Cedric Ryngaert, Professor of Public International Law, Utrecht University School of Law, Utrecht Centre for Accountability and Liability Law
Austen Parrish, Dean and James H. Rudy Professor of Law, Indiana University Maurer School of Law

Workshop #1 (8:30 am-10:00 am ET; 2:30-4:00 pm CET)
Moderator: Luca Pasquet, Assistant Professor, Utrecht University School of Law
1. Cedric Ryngaert, Professor of Public International Law, Utrecht University School of Law
International Jurisdictional Law
2. Michael Wood, Barrister, Twenty Essex Chambers & UN International Law Commission
Omri Sender, Advisor and Litigator in Public International Law
Extraterritorial Jurisdiction and Customary International Law
2. Tonya Putnam, Research Scholar, Arnold A. Salzman Institute of War and Peace Studies, Columbia
University
Political Science and Extraterritoriality
3. Maia Pal, Senior Lecturer in International Relations, Oxford Brookes University
Extraterritoriality and International Relations
4. Branislav Hock, Senior Lecturer in Economic Crime, Institute of Criminal Justice Studies, University of Portsmouth
Extraterritorial Corporate Crime Policing: Between Contestation and Cooperation

Workshop #2 (10:15-11:45 am ET; 4:15-5:45 pm CET)
Moderator: Francois Kristen, Professor, Utrecht University School of Law
1. Ellen Gutterman, Associate Professor, York University
Extraterritoriality in the Global Governance of Corruption: Legal and Political Perspectives
2. Anthony Colangelo, Robert G. Storey Distinguished Faculty Fellow and Professor of Law, SMU Dedman School of Law
Criminal Extraterritoriality
3. Christian Tietje, Professor of Law, Martin-Luther University of Halle-Wittenberg
Cristina Lloyd, Lecturer and Senior Researcher, Martin-Luther University of Halle-Wittenberg
Sanctions
4. Matthias Lehmann, Professor of Law, University of Vienna
Extraterritoriality in Financial Law
5. Magnus Killander, Professor of Human Rights Law, University of Pretoria
Africa and Extraterritoriality

Day Two
Thursday, September 16

Workshop #3 (8:30 am-10:00 am ET; 2:30-4:00 pm CET)
Moderator: Hannah Buxbaum, Vice President for International Affairs, Indiana University; John E. Schiller
Chair in Legal Ethics and Professor of Law, Indiana University Maurer School of Law
1. Dan Jerker B. Svantesson, Professor, Bond University
Global Speech Regulation
2. Asaf Lubin, Associate Professor of Law, Indiana University Maurer School of Law
Cybersecurity
3. Christopher Kuner, Professor of Law and Co-chair of the Brussels Privacy Hub, Free University of Brussels
Data and Extraterritoriality
4. Timothy Holbrook, Vice Provost for Faculty Affairs and Asa Griggs Candler Professor of Law, Emory Law
Intellectual Property
5. Marek Martyniszyn, Interim Head of School, Senior Lecturer in Law, Queen’s University Belfast Law School
Antitrust and Competition Law

Workshop #4 (10:15-11:45 am ET; 4:15-5:45 pm CET)
Moderator: Kish Parella, Professor of Law, Washington and Lee University School of Law
1. William S. Dodge, John D. Ayer Chair in Business Law and Martin Luther King Jr. Professor of Law, UC Davis School of Law
Extraterritoriality in Statutes and Regulations
2. Yanbai Andrea Wang, Assistant Professor, University of Pennsylvania Carey Law School
Judicial Extraterritoriality
3. Matthew Garrod, Senior Lecturer in Law and Associate Tutor, University of Sussex
The Expansion of Treaty-Based Extraterritorial Criminal Jurisdiction
4. Ioanna Hadjiyianni, Lecturer in Law, University of Cyprus
Environmental Law
5. Peer Zumbansen, Professor of Business Law, McGill Law
Law’s Multiple Geographies

Day Three
Friday, September 17

Workshop #5 (8:30 am-10:00 am ET; 2:30-4:00 pm CET)
Moderator: Shruti Rana, Assistant Dean for Curricular and Undergraduate Affairs and Professor of International Law Practice, Indiana University, Hamilton Lugar School of Global and International Studies
1. Régis Bismuth, Professor, SciencesPo Law School
The European Experience
2. Danielle Ireland-Piper, Associate Professor, Bond University
Extraterritoriality in Commonwealth Nations: Common Law Perspectives from Australia, India, the United Kingdom, and New Zealand
3. Mari Takeuchi, Professor, Kobe University
Asian Experience
4. Alejandro Chehtman, Professor, University Torcuato Di Tella Law School
Extraterritoriality and Latin America
5. Cassandra Burke Robertson, John Deaver Drinko – BakerHostetler Professor of Law and Director of the Center for Professional Ethics, Case Western Reserve University School of Law
The United States Experience

Workshop #6 (10:15-11:45 am ET; 4:15-5:45 pm CET)
Moderator: Kushtrim Istrefi, Assistant Professor, Utrecht University School of Law
1. Samantha Besson, Professor, Collège de France
The Extraterritoriality of Human Rights
2. Chimène Keitner, Alfred and Hanna Fromm Professor of International Law, UC Hastings Law
The Extraterritorial Rights of Refugees
3. Sara L Seck, Associate Professor of Law, Yogis and Keddy Chair in Human Rights Law, and Associate Dean for Research, Dalhousie University
Emerging Issues and Practices
4. Ralf Michaels, Director Max Planck Institute for Comparative and International Private Law
Domestic Courts, Global Challenges
5. Austen Parrish, Dean & James H. Rudy Professor of Law, Indiana University Maurer School of Law
Sovereignty, Self-Determination, and Non-Intervention

Conference/Workshop Closing (11:45-noon ET; 5:45-6:00 pm CET)

Registration:
The Conference will be held in a workshop format and streamed as a Webinar. To register please use this link: https://iu.zoom.us/webinar/register/WN_Dbe536vPRdCQMgjCJTco6w

University of Rijeka, Faculty of Law is announcing this year’s call for applications to the Rijeka Doctoral Conference: RIDOC 2021. Open to any legal or related topic od doctoral research, the conference traditionally hosts at least one session in private international law. Applications should be sent to ridoc@pravri.hr before the end of August. The conference is planned to take place on 10 December 2021 in the hybrid format, while the abstracts will be published in an e-book.

The series of seminars are organised by the Ambrosio L. Gioja Research Institute of the University of Buenos Aires, the Center for Legal and Social Research of the National University of Córdoba (Argentina) and the National Council for Scientific and Technical Research (CONICET). The seminars will take place each Friday from 16 July to 27 August 2021 at 17:00 (Buenos Aires time) / 22:00 CEST time (Central European Summer Time).

The topics that will be discussed are very diverse, ranging from vaccination contracts to migration and Private International Law. The series of seminars will end on 27 August 2021 with a summary of the findings, coordinated by Candela Villegas and Luciana Scotti.

I am proud to announce that several AMEDIP members will be speaking at these seminars.

The seminars are free of charge but registration is required. Please click here to register.

Certificates of participation will be issued and certifications of approval will also be issued but only to those who prepare a final paper.

For more information, click here (Facebook page). The platform that will be used is Zoom. Any questions may be directed to seminario.gioja.cijs@gmail.com.

In Emerald Pasture Designated Activity Company & Ors v Cassini SAS & Anor [2021] EWHC 2010 (Ch) there is an interesting split between pre and post Brexit applicable EU rules, with BIa not engaged yet the EU insolvency rules firmly in the picture.

Claimants Emerald are lenders, and first defendant Cassini is the borrower, under a senior facilities agreement dated 28 March 2019 (the SFA). The SFA is governed by English law and has an exclusive jurisdiction clause in favour of the English courts. Cassini is subject a French ‘Sauvegarde’) opened on 22 September 2020. This is a form of debtor-in-possession safeguard proceeding for a company in financial difficulties that wishes to propose a restructuring plan to its creditors. Sauvegarde is included in the proceedings that are subject to the Recast European Insolvency Regulation 2015/848. Parties are seemingly in agreement that the EIR 2015 continues to apply in the UK in respect of the Sauvegarde, because it was commenced prior to 31 December 2020, Brexit date.

Cassini contest jurisdiction, arguing that the claim derives from and is closely linked to the Sauvegarde and thus falls within A6(1) EIR, the so-called vis attractiva concursus which reads

“The courts of the Member State within the territory of which insolvency proceedings have been opened in accordance with Article 3 shall have jurisdiction for any action which derives directly from the insolvency proceedings and is closely linked with them, such as avoidance actions.”

This Article is the result of CJEU case-law such as Gourdain , Seagon , German Graphics , F -Tex.

Zacaroli J unfortunately repeats the suggested dovetail between BIa and the EIR, referring to CJEU Nickel & Goeldner.

As the judge notes [24] the application of A6(1) has not been made easier by the CJEU blurring the distinction between the conditions – with reference to Bobek AG in NK v BNP Paribas Fortis NV (on the Peeters /Gatzen suit).

Emerald argue that the question is whether the action itself derives from the insolvency proceeding. They contend that since the action is for declaratory relief in respect of a contract, its source is the common rules of civil and commercial law. Cassini focus on the issue raised by the action. They contend that since the only matter in issue in the action is whether the rights to information under the SFA are overridden by the Sauvegarde – and the principles of French insolvency law that govern the Sauvegarde – the real matter in issue concerns the effects of the insolvency proceedings so that the action falls within A6(1).

The judge [45] after discussion and assessment of the authorities (incl   ING Bank NV v Banco Santander SA ) discussed by both parties, decides against vis attractiva concursus. He holds that the legal basis for the declarations sought remains the SFA, and thus the rules of civil and commercial law, notwithstanding that the only issue which the court would be required to determine is the impact of French insolvency law on the obligations under the SFA. The question which the declarations are designed to answer, it is held, is the enforceability of the contractual rights.

On that basis, the exclusive choice of court clause grants E&W courts jurisdiction, under English common law (as it would have done under BIa, given the judge’s finding on vis attractiva).

If the claim goes ahead (one images appeal may be sought), the French insolvency proceedings will not have lost their relevance. Cassini argue on that issue [12 ff] that since the characteristic performance of the SFA is the loan of funds, which has already occurred, the SFA is not a “current contract” and as a result of French law, is no longer enforceable. Only the underlying debt subsists, they argue, which must be paid by way of dividends in the French insolvency proceedings. That argument, one assumes, will bump into further obstacles.

Geert.

EU Private International Law, 3rd ed, 2021, para 5.76 ff.

Interesting judgment where Brussels Ia due to claim date doesn't apply, EU EIR does: earlier opening of French #insolvency
CJEU Gourdain, related actions
Held E&W courts have jurisdiction per choice of court
Emerald Pasture v Cassini [2021] EWHC 2010 (Ch)https://t.co/RBcRzbVn98

— Geert van Calster (@GAVClaw) July 17, 2021

On 16 July 2021, the EU Commission has issued a Proposal for a Council Decision on the accession by the European Union to the Hague Convention of 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

Under the Proposal, the EU would make two declarations.

The European Union declares, in accordance with Article 27(1) of the Convention, that it exercises competence over all the matters governed by this Convention. Its Member States will not sign, ratify, accept or approve the Convention, but shall be bound by the Convention by virtue of its conclusion by the European Union. 

For the purpose of this declaration, the term “European Union” does not include the Kingdom of Denmark by virtue of Articles 1 and 2 of the Protocol (No 22) on the position of Denmark annexed to the Treaty on the Functioning of the European Union.

The European Union hereby declares under Article 18 of the Convention that it will not apply the Convention to commercial leases (tenancies) of immovable property situated in the European Union.

The declaration is explained as follows:

a declaration is needed in order to ensure that the achievement of the policy objectives of the Brussels Ia Regulation is not affected by the accession to the Convention. More specifically, in cases involving commercial tenancies, the Brussels Ia Regulation affords exclusive jurisdiction to courts in a Member State where the immovable property is located. The Judgments Convention does not include such exclusive jurisdictional rules for commercial tenancies. Therefore, under the Convention, Member States would be obliged to recognise and enforce third-country judgments on commercial leases of immovable property that is situated on their territory. This would be in contradiction to the policy objective behind the Brussels Ia Regulation to attribute exclusive jurisdiction to courts in the EU for disputes related to immovable property situated in the EU.

The Commission will not make declarations pursuant to Articles 18 and 19 of the Convention.

On the possibility to make declarations, Member States opposed a declaration based on Article 19 of the Convention and did not express clear views on declarations under Article 18. Only a small number of stakeholders favoured accession with a declaration under Article 19 while there was no clear tendency detected for Article 18 declarations.

Summer has come! The blog will remain open, but blogging will be lighter in the coming weeks.

We will resume our usual 5-post-a-week pace at the end of August.

We wish our readers and all EAPIL Members all the best for their holidays.

Stay safe, and enjoy the break!

Since 2016, the European General Data Protection Regulation has been one of the most popular topics of discussion, academic and otherwise. While the PIL discussion has mostly focused on the unilateral conflicts rule in Article 3 of the Regulation, which defines its “external” scope of application, some scholars – like Martina Mantovani on this blog – have pointed out that despite providing a unified regime that applies across the Union, the Regulation’s repeated deference of specific questions to the laws of the Member States still requires a certain degree of “internal” coordination. On this aspect of the Regulation, Merlin Gömann has just published an impressive volume of over 800 pages (in German), offering what easily constitutes the most comprehensive treatment of the problem to date.

In essence, Gömann tries to work out how (and by whom) this coordination can (and must) be achieved according to primary EU law. He comes to the conclusion that the respective scopes of the national laws implementing the Regulation cannot be determined by unilateral conflict rules of the Member States but need to be derived from the Regulation itself. Accordingly, the conflict rules contained in many national laws implementing the Regulation are in violation of primary EU law (also explained in some more detail here).

According to the author, the necessary coordination between national laws must instead be achieved by applying Art. 3 GDPR by analogy. Gömann carefully explains the consequences of his proposition on more than 200 pages – including the somewhat surprising fact that national data-protection authorities might be required to apply the substantive data-protection laws of another Member State. And if this weren’t enough of an academic achievement already, Gömann concludes his book by also developing specific propositions on how the GDPR could be reformed in order to provide a proper system of coordination between the residual national laws.