Droit international général

The Volkswagen emissions scandal in NL – a first hearing just took place and a ruling on certain issues is expected in early March 2021, as well as recent developments in Spain and the CJEU

Conflictoflaws - mer, 02/03/2021 - 09:37

We have previously reported on this case here. This is a collective redress action to seek damages resulting from the Volkswagen emission scandal (also known as Dieselgate).  Proceedings were commenced in the Netherlands against Volkswagen (Group) and involve other related parties such as Audi, Seat, Skoda, Porsche, Robert Bosch, importer(s) and dealers in the Netherlands and abroad. This action is made pursuant to the Dutch Collective Redress of Mass Damages Act (Wet afwikkeling massaschade in collectieve actie, WAMCA).

On 18 January 2021, a case management -pre-trial- hearing (regiezitting in Dutch) was held before the Amsterdam District Court. The purpose of this meeting was for all the parties involved to exchange views on “the desired sequence of subjects to be addressed in the initial phases of the WAMCA procedure”. This includes issues such as the jurisdiction of the Dutch court over the claims, the law that would be applicable to the case, the appointment of an Exclusive Representative Party, etc. For more information, click here.

As indicated before, one of the institutes / organisations seeking to be the exclusive representative in this collective redress action is Diesel Emissions Justice Foundation (DEJF).  The DEJF has stated that: “The [Amsterdam District Court] has indicated that a decision on the order of handling of [these] points can be expected on March 3.”

See also our previous posts: Mass Litigation in Times of Corona and Developments in the Netherlands, Jurisdiction over financial damages – the A-G Opinion in the Volkswagen Case before the CJEU (CJEU) and The VW NOx Emissions Group Litigation, [2019] EWHC 783(QB), and (some aspects of) CoL (UK).

Interestingly, the DEJF has reported about a recent case where a Spanish court ordered damages against Volkswagen. I transcribe the summary of the case provided on the DEFJ website: “25 January 2021 – A Madrid court has found Volkswagen guilty of the use of manipulated software, or “cheating software”. In proceedings brought by a Spanish consumer association against Volkswagen on behalf of 5,400 affiliated consumers, the judge awarded damages totalling € 16.3million for unfair commercial practices, amounting to an average of € 3,000 per consumer. The judge used a pragmatic method to determine this amount; half to compensate for the depreciation of the affected cars and the inconvenience of use of having to have the cars repaired, and the other half for “moral damage” as breach of confidence due to the advertised “green” image of these cars, the environmental damages and the impact on society.” The judgment is available here (in Spanish).

And let us not forget the significant judgment of the Court of Justice of the European Union (CJEU) of 17 December 2020 (Second Chamber): Criminal proceedings against X, Request for a preliminary ruling from the Juge d’instruction du tribunal de grande instance de Paris Case C-693/18 (in French, which was the language of the proceedings). See also here (in other languages but not yet in English). Although this case arises in the context of criminal proceedings, it provides support to the claims above and in establishing liability.

More information is available here.

English Custody Orders Violate Greek Public Policy if the Parents Form a Same-Sex Couple

EAPIL blog - mer, 02/03/2021 - 08:00

The Court of First Instance of Thessaloniki ruled on 24 June 2020 that an application by a psychological (non biological) mother to recognize and declare enforceable a UK custody order concerning a child born by the applicant’s partner contravenes Greek public policy (Ruling No. 6175, unreported).

Facts

The applicant [A] is a woman of Greek and American nationality. Her partner was a woman of American nationality [P]. They registered their partnership in the UK on 20 August 2013. Nearly a month later, P. gave birth to a child. The partners married in January 2015.

A. filed an application for child custody and parenting arrangements order in the UK. The court granted the application, and ordered that the child stays with the psychological mother on the basis of previous decisions concerning parental responsibility rights issued in the same country. In addition, the court ordered that the child reside with A., and it issued an order to remove the child permanently to Greece. Finally, the same court arranged the contact rights of the biological mother [P]. The information given in the Greek judgment is that the UK order was issued by the High Court – Family Division in Chelmsford, and that it was final. A. filed an application for the recognition and enforcement of the UK order before the Court of First Instance in Thessaloniki.

The Ruling

The Court of Thessaloniki began by acknowledging its jurisdiction and venue for the case at hand. It then entered into an analysis of the public policy defence, culminating in the conclusion, that the forum judge is obliged to defend national public policy, while at the same time demonstrating respect towards the state’s international obligations. To that end, a proportionality test of the domestic public policy with Article 8 ECHR standards is imperative. Following the above introduction, the court rushed to declare that same-sex marriage, and any subsequent relations emanating thereof are not allowed in Greece.

Public Policy

The first point raised by the court was a contradiction of the English order with established perceptions of Greek family law. By invoking Article 33 Greek Civil Code, i.e. the public policy defence in domestic Private International Law, the court held that Greek family law grants parental responsibility rights to the mother, if the child was born out of wedlock. In addition, the court stated that in the given situation, it was the biological mother who should be granted custody rights.

The second point raised by the court referred to the fundamental choice made by the domestic legislator and the Supreme Court, i.e. the prohibition of same-sex marriage. The public policy defence is the guarantor of this premise: Hence, an ontological change of a legal relationship within the country of destination, caused by the recognition of a foreign decision, affects state sovereignty. For a domestic standpoint, it is not acceptable to grant maternity rights to two women. It is also unbearable for the court that the birth of the child is a product of a same-sex marital relationship, which does not produce any legal effects in Greece.

In addition, the court held that the best interests of the child may not guarantee the preservation of a parental relationship with the biological mother, the latter being a situation not protected under Greek law. The bond worthy of protection emanates from constitutional provisions (equality / personality rights), the Fundamental Rights Charter, EU and ECHR standards. Consequently, the court ruled that the recognition and enforcement of the UK order would distort the legal pace of the country, because it is contrary to core domestic values and perceptions.

Assessment

The judgment follows a hard line under the strong influence of the harsh position taken by the Greek Supreme Court against same-sex couples. The factual situation is obviously not shaking the court’s foundation; even the best interests of the child did not motivate the court to soften its position. Hence, the child will have two mothers in the UK, and no mother in Greece.

What is also striking is the omission of the court to approach the matter from its European point of view. Out of the abundant material of legal scholarship, European and domestic case law concerning the matter, I will focus on the Coman case, which decided as follows:

In a situation in which a Union citizen has made use of his freedom of movement by moving to and taking up genuine residence, in accordance with the conditions laid down in Article 7(1) of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC, in a Member State other than that of which he is a national, and, whilst there, has created or strengthened a family life with a third-country national of the same sex to whom he is joined by a marriage lawfully concluded in the host Member State, Article 21(1) TFEU must be interpreted as precluding the competent authorities of the Member State of which the Union citizen is a national from refusing to grant that third-country national a right of residence in the territory of that Member State on the ground that the law of that Member State does not recognise marriage between persons of the same sex.

The case, of course, was not concerned with recognition of foreign judgments, but the rationale seems to make it relevant in this respect as well.

There are two more instances available for the applicant to alter the landscape. A first sign of progress has been already reported. It will be interesting to follow the developments and to report in due time.

Grochowski and Południak-Gierz on EU PIL in Internet Related Disputes in Poland

EAPIL blog - mar, 02/02/2021 - 15:00

Mateusz Grochowski (European University Institute) and Katarzyna Południak-Gierz (Jagiellonian University) have posted EU Private International Law in Internet-Related Disputes: The Polish Case Law Approach on SSRN.

The abstract reads:

The paper examines the way Polish courts apply EU private international law (EU PIL) rules in the disputes concerning online context. The analysis seeks, in particular, to better understand the patterns recurring in the judicial reasoning and to map the typical circumstances of internet-related disputes pled before Polish courts. The paper attempts to cluster the existing case law and to trace the use made of EU PIL and CJEU decisions by Polish judges. It also aims to identify how the courts perceive specificity of internet-related disputes from the perspective of conflict of laws and how they understand specific goals of EU PIL (especially consumer protection). The text delves also into the cases where – despite encountering transnational elements – courts did not address conflict of laws issues. It attempts to indicate the most common instances of such omission and hence, to elucidate further the possible barriers to full application of EU PIL.

Szpunar AG in All in one Star ltd. The corporate mobility jigsaw continues to be laid.

GAVC - mar, 02/02/2021 - 12:12

This post has been in my draft folder a long time for First Advocate General Szpunar opined Mid-October in C-469/19 All in One Star Ltd. Still worth a flag, with the CJEU presumably soon issuing judgment. The case concerns the refusal of German authorities to enter a branch of a UK-incorporated company, in the German commercial register.  C-106/16 Polbud is the most recent major case on the issue.

The Opinion follows the (slow) progress of positive harmonisation of EU company law, with Directive 2017/1132 core to the questions. The AG opined that that Directive does not preclude a national provision under which the managing director of the company has to provide an assurance that there is no barrier to his personal appointment under national law in the form of a prohibition, ordered by a court or public authority, on practising his profession or trade. However he suggests the Treaty provisions on free movement oppose the authorities of destination requesting the director provide assurances that a notary, a representative of a comparable legal advisory profession or a consular officer has confirmed such absence of obstacle to him.

The AG was asked by the CJEU not to discuss the other question: whether a Member State may insist upon indication of the amount of share capital or a comparable capital value, for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register. Presumably because the answer is clearly ‘No’ in light of earlier case-law.

Clearly following Brexit (the TCA as far as I am aware has no straight free movement principles for corporations) the issue will be different for UK corporations however it will continue to present itself in light of the intra-EU competition in corporate law.

Geert.

EU Private international law, 3rd ed 2021, Chapter 6.

ICMY: Opinion Szpunar AG in All in One Star Ltd: Inbound free movement of corporations, further extension of Centros and Inspire Art case-law https://t.co/19bHt9w5U5 (no EN text available).
Re refusal to enter a branch of a company registered in the UK in DE commercial register.

— Geert Van Calster (@GAVClaw) October 15, 2020

Call for Papers: Challenges of Sustainable Global and Digital Development in Civil Procedural Law

EAPIL blog - mar, 02/02/2021 - 08:00

The Universidade Portucalense, based in Porto, and its Research Center, in collaboration with the Universities of Vigo, Malaga, Salamanca and Granada as well as with the Federal University of Rio de Janeiro, organise an International Congress on Civil Procedural Law titled The Challenges of Sustainable Global and Digital Development, to be held on 20 and 21 May 2021, in virtual format.

The concept is as follows:

The pandemic caused by COVID-19 exposed the world to the positive and negative aspects of globalization; it also made evident the need for States to prepare for the challenges of global development; and, well, it showed us that the application and use of new technologies are fundamental. All these phenomena, of a transversal nature, are the motto of this Congress and motivate the study of procedural matters in the global and digital era, with a view to a result process.

In this context and also in the light of the United Nations 2030 Agenda Sustainable Development Goals, in particular those for promoting the rule of law at national and international level and ensuring equal access to justice for all, it is current and it is of practical and academic interest in critical analysis and the presentation of innovative proposals for procedural solutions that are part of this orientation. Above all, pay attention to the importance of consumer relations in sustainable development and in disputes with consumers.

This Congress aims to bring together researchers and professionals who, through their scientific studies and practical experiences, can contribute to the analysis of the impact of global and digital sustainable development in matters of procedural law, especially in civil proceedings, without excluding the application of the process to various branches of law.

Those interested in presenting a paper at the conference are invited to submit their abstracts on any of the following ‘thematic lines’: Transnational and European Civil Procedure. Global development process and challenges; Civil Procedure in the Digital Age – Challenges of technological development; Sustainable Consumption and Process.

The deadline for submissions is 28 February 2021.

See here for more information.

Review of the AJIL Unbound symposium: Global Labs of International Commercial Dispute Resolution

Conflictoflaws - lun, 02/01/2021 - 21:26

By Magdalena Lagiewska, University of Gdansk

This post reviews the symposium issue of the American Journal of International Law Unbound on “Global Labs of International Commercial Dispute Resolution”. This issue includes an introduction and six essays explaining the current changes and developments in the global landscape for settling international commercial disputes. The multifarious perspectives have been discussed to show tendencies and challenges ahead.

Overall, the AJIL Unbound special issue is, without doubt, one of the most impactful contributions on changes in international commercial dispute resolution landscape. It is a successful attempt and a fascinating analysis of recent developments in this field. This is certainly a must-read for anyone interested in reshaping the landscape of dispute resolution worldwide. Beyond the theoretical context, it includes many practical aspects and provides new insight into the prospects of its development and potential challenges for the future. I highly recommend it not only to the researchers on international commercial dispute resolution, but also to legal practitioners—lawyers, arbitrators, and mediators among others. Below, I have outlined each of the symposium’s contributions.

As mentioned in the introduction by Anthea Roberts [1], instead of the previous bipolarity and centralization around New York and London, international commercial dispute resolution is facing a new process of decentralization and rebalancing. Today, we are all witnessing the adaptation to a new reality and the COVID-19 pandemic is speeding up the entire process. “New legal hubs” and “one-stop shops” for dispute resolution are springing up like mushrooms in Eurasia and beyond. Therefore, due to the competitiveness between the “old” and “new” dispute resolution institutions, these new bodies are more innovative and thus are expected to attract more and more interested parties.

The main aim of this symposium was to outline the new challenges of the international commercial dispute resolution mechanism around the world. New dispute resolution centres not only influence on the current landscape, but also they offer “fresh insight” in this field.

The first essay by Pamela K. Bookman and Matthew S. Erie, entitled “Experimenting with International Commercial Dispute Resolution” [2], pays attention to the new phenomena on emerging “new legal hubs” (NLHs), international commercial courts and arbitral courts worldwide. This new tendency has recently appeared in China, Singapore, Dubai, Kazakhstan and Hong Kong. All of these initiatives affect the international commercial dispute settlement landscape and increase the competitiveness among these centres. Those centres bravely take advantage of “lawtech” and challenge themselves. As a result, they are experimenting with legal reforms and some institutional design to attract more interested parties and to become well-known platforms providing high-quality dispute resolution services. The Authors set forth the challenges and threats that may exist in this respect. They also provide an insightful analysis of the impact of these new initiatives on the international commercial dispute resolution, international commercial law, and the geopolitics of disputes.

Further, Giesela Rühl’s contribution focuses on “The Resolution of International Commercial Disputes – What Role (if any) for Continental Europe?” [3]. The author pays attention to the Netherlands, which took the initiative to establish a new court exclusively devoted to international cases, and Germany and France, which took more skeptical efforts to establish international commercial chambers both before and after the Brexit referendum in 2016. Rühl believes that the far-reaching reform should be implemented at the European level. Therefore, she advocates the establishment of a common European Commercial Court. This seems to be an interesting approach that would certainly strengthen Europe’s position in the global dispute resolution landscape.

Julien Chaisse and Xu Qian outline the importance and key features of the recently established China International Commercial Court (CICC) [4]. Given its foundation, this court should operate as a “one-stop shop” combining litigation, arbitration, and mediation. It is dedicated to solving Belt and Road Initiative (BRI) related disputes. The Authors point out that this court is much more akin to a national court than a genuine international court. Therefore, they challenge its importance with respect to BRI-related disputes and attempt to determine whether the Court will play a significant role in the international dispute settlement landscape. These considerations are especially important given the primary sources in Chinese which bring the reader closer to Chinese legislation.

The following essay, by Wang Guiguo and Rajesh Sharma, addresses the International Commercial Dispute Prevention and Settlement Organization (ICDPASO) established in 2019 [5]. It is another global legal hub that offers “one-stop” services in China. At first glance, the ICDPASO seems to be an interesting body with an Asian flavour, however, the Authors shine a spotlight on some practical challenges ahead and its limited jurisdiction. This body differs significantly from the aforementioned CICC. Whether the ICDPASO will be a game-changer in the BRI-related disputes and will influence importantly on international dispute resolution landscape seems to be a melody of the future. It is ultimately too soon to answer those questions now, but it is certainly worthwhile to watch this institution.

Further, S.I. Strong brings attention to the actual changes in international commercial courts in the US and Australia [6]. Although Continental Europe, the Middle East, and Asia try to reshape the current international dispute resolution landscape, common law jurisdictions, such as the United States and Australia, are less inclined to changes in establishing international courts specialized in cross-border disputes. Compared to the US, Strong believes that Australia has made more advanced efforts to establish such courts. Nevertheless, aside from the traditional international commercial courts, the newly emerging international commercial mediation services are gaining popularity, most notably due to the entry into force of the UN Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention).

Last but not least, Victoria Sahani contribution’s outlines third-party funding regulation [7]. While third-party funding remains a controversial issue in litigation or arbitration, whether domestic or international, it is becoming much more popular globally. There are already over sixty countries experimenting with regulatory questions about third-party funding. In this case, we also deal with some “laboratories” that try out different methods of regulation.

The entire symposium is available here.

Issue Arbitration and PIL – NIPR 2020/4

Conflictoflaws - lun, 02/01/2021 - 16:13

The fourth issue of 2020 of the Dutch PIL journal Nederlands Internationaal Privaatrecht is dedicated to Arbitration and conflicts of laws.

Some of the papers are in English, others in Dutch.

Editorial

Peters & B. van Zelst (guest editors), Arbitration and conflicts of laws / p. 631-633

A.J. B?lohlávek, Determining the law governing obligations in arbitration and the applicability of the Rome I Regulation / p. 634-651

Factors specific to arbitration, and particularly the fact that the place of arbitration is often chosen as a neutral venue with no links to the domicile of the parties or to the subject of the dispute, also influence the procedures followed to determine the substantive law governing obligations. Even so, it is essential to employ a method for determining this law that is transparent, that excludes arbitrariness on the part of arbitrators, and that allows the parties to rely on a certain degree of predictability. Considering the growing importance of the seat of arbitration, which has seen the relevance of the theory of the anationality of arbitration decline in most cases, it is always necessary to assess the importance of the lex fori arbitri in determining the applicable substantive law. Unless the application of EU legislation, and hence also the Rome I Regulation, on the law applicable to obligations stems, as a matter of necessity, from the mandatory lex fori arbitri (which tends to be the exception), the application of the Rome I Regulation must always be kept to a minimum. There is therefore no reason why the Rome I Regulation cannot also be used in arbitral proceedings to determine the applicable law. Arguments such as the fact that this is a regulation applicable exclusively to civil litigation must be rejected.

Meški? & A. Gagula, Lex mercatoria and its limits in international arbitration / p. 652-668

This contribution aims to provide guidance on the usual steps an arbitrator undertakes when using lex mercatoria in international arbitration. The first step is the identification of rules that represent lex mercatoria and deserve such a qualification. It involves a discussion on the private international law analysis, especially absent a choice of law by the parties and its relationship to (potentially) applicable national law. The statistics presented in this paper show that parties in an overwhelming majority of cases choose national law as the applicable law and that lex mercatoria needs to co-exist with national law. Here, the joint use of national law and lex mercatoria is discussed in the context of the example of construction arbitration as the most common area of international arbitration practice. The growing popularity of certain legal solutions of lex mercatoria in procedural or substantive matters followed by a codification trend contribute to an effect of a rebuttable presumption in the fields of its application. This triggers the question as to how the right to be heard can be preserved, especially when the initiative for the use of lex mercatoria does not come from the parties, but from the arbitral panel. The lack of a strict judicial review of the applicable law used in arbitration gives the arbitrators the power to find the right balance between the guidance offered by lex mercatoria and parties’ expectations.

Shehata, Overriding mandatory rules and international commercial arbitration: the Swiss and French perspectives / p. 669-686

The treatment of overriding mandatory rules has always been the subject of multiple studies, especially in the field of international commercial arbitration. The fact that most arbitration jurists agree that arbitration does not have a lex fori is an essential reason for making this discussion a captivating one. Further, if we couple this lack of a lex fori in commercial arbitration with the arbitrators’ duty to render enforceable awards, then we face an extremely intriguing dilemma in this regard.

Instead of reviewing how arbitral tribunals deal with this conundrum, I try to explore this issue through the lens of selected national reviewing courts (i.e., Swiss and French Courts). In my opinion, the review by the national courts represents the end game and should prove critical in guiding future arbitral tribunals in how they should treat overriding mandatory rules at the earlier stage of issuing their arbitral awards.

Ernste, Het toepasselijke bewijsrecht in arbitrage / p. 687-698

This article focuses on the applicable law of evidence, including the law that is applicable to the allocation of the burden of proof in the case of (international) arbitration with the seat of arbitration being in the Netherlands. In international arbitration, the applicable arbitration law, including the applicable law of evidence, shall be determined by the lex arbitri. The Dutch Arbitration Act is applicable if the seat of arbitration is in the Netherlands. An arbitral tribunal has to decide with respect to the allocation of the burden of proof whether it applies the law of the arbitral seat (based on the theory that the burden of proof is procedural) or the law governing the underlying substantive issues (based on the theory that the burden of proof is substantive). According to Dutch Arbitration law, the allocation of the burden of proof is procedural. As a result, an arbitral tribunal is not bound by rules regarding the allocation of the burden of proof laid down in the law governing the underlying substantive issues.

Zilinsky, Toepasselijk recht op de bindende kracht en de rechtsgevolgen van arbitrale uitspraken / p. 699-714

This contribution focuses on the res judicata of arbitral awards. What is actually the purpose of the res judicata of an arbitral award? Should an arbitrator or a court verify ex officio whether an arbitral award had become res judicata or should this be invoked by the parties? As the parties are free to determine the manner in which and by whom dispute resolution takes place, the question arises as to which applicable law should determine the issue of an arbitral award becoming res judicata. Although the existing instruments, such as the 1958 New York Convention, deal with the recognition and enforcement of arbitral awards, these instruments leave this question unanswered. These instruments are based on the principle that the Contracting States recognize the arbitral awards and that a recognized arbitral decision is binding. This contribution discusses the different approaches to determining the res judicata effect of an arbitral award.

Peters, Enkele gedachten over de toepasselijkheid van het beginsel van ius curia novit in gerechtelijke procedures in verband met arbitrage en de gevolgen daarvan voor arbitrage / p. 715-730

It is often assumed that arbitrators are not obliged to apply conflict of laws rules or to add to the legal grounds ex officio, but this is not necessarily true. In this publication the author sets out that arbitrators, under specific circumstances, should have regard to the rules that the national courts should apply in annulment proceedings and should not consider themselves to be bound by the parties’ submissions. In this respect, the arbitrators should have an understanding of the scope of annulment proceedings and the application of the principle of ius curia novit in these proceedings, which are also discussed in this publication.

Van Zelst, Het recht van toepassing op de aansprakelijkheid van arbiters / p. 731-747

This article investigates and challenges existing notions of private international law aspects of the liability of arbitrators. The starting point of the inquiry is a succinct comparative analysis of how the role of the arbitrator is viewed and which standards apply to arbitrator liability in various jurisdictions. The article proceeds with an analysis of the applicability of the Rome I Convention, finding that Rome I applies to the contractual liability of an arbitrator. Subsequently, the article assesses how Rome I’s substantive provisions – Article 4 more specifically – should be applied. It concludes that the law of the habitual residence (of each) of the arbitrator(s) applies to contractual claims vis-a-vis the arbitrator(s).

In addition the issue contains a case note

X.P.A. van Heesch, Samenloopperikelen bij het aannemen van bevoegdheid o.g.v. Verordening Brussel I-bis. Hoge Raad 17 juli 2020, ECLI:NL:HR:2020:1280, NIPR 2020, 487 (V Marine Fuels/Dexhon c.s.) / p. 748-759

This article discusses the judgment of the Dutch Supreme Court dated 17 July 2020, ECLI:NL:HR:2020:1280. In this case, the Dutch Supreme Court answered the question of whether the Dutch Court had jurisdiction based on Article 5 of the Arrest Convention when the Court of Casablanca had arrested the ship in question. Even though Article 5 of the Arrest Convention does not grant explicit exclusive jurisdiction to the court of the forum arresti, exclusive jurisdiction can be assumed based on the interpretation of the Arrest Convention. The author then explains the relation between the Brussels I-bis Regulation and Conventions which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments (specialized Conventions). The general rule regarding this relation is laid down in Article 71 Brussels I-bis Regulation and entails that the Brussels I-bis Regulation does not affect any specialized Conventions to which the Member States are parties. The Court of Justice of the European Union has provided two restrictions to this rule. These two restrictions entail that Article 71 Brussel I-bis Regulation (i) only applies to aspects that the specialized Convention governs and not to aspects that the specialized Convention does not govern and (ii) can only apply if the specialized Convention does not compromise the principles which underline judicial cooperation in the European Union (such as the free movement of judgments, predictability as to the courts having jurisdiction and legal certainty for litigants). In the legal literature, ideas differ on how to interpret this last restriction, which is set out by the author as well. Finally, the author construes whether the Dutch Supreme Court should have applied the two restrictions on Article 71 Brussels I-bis Regulation before it ruled that the Dutch Court did not have jurisdiction in this case.

 

The Hague Court of Appeal holds Shell held liable for oil spills in Nigeria

Conflictoflaws - lun, 02/01/2021 - 12:26

The Hague Court of Appeal on January 29, 2021 held that Shell’s parent and subsidiary company in Nigeria were liable for oil spillage in Bayelsa State – an oil producing area in Nigeria. The Court held that Shell had failed to prove beyond reasonable doubt that the oil spillage was caused by sabotage by a third party.

The full details on the above important case can be found here

February 2021 at the Court of Justice of the European Union

EAPIL blog - lun, 02/01/2021 - 08:00

February starts with a hearing on 4 February in a PPU case. C-603/20 PPU MCP is a preliminary reference from the High Court of Justice, Family Division (United Kingdom), filed on November 2020 (that much for Brexit…), on the interpretation of Council Regulation (EC) No 2201/2003. The facts concern two Indian citizens habitually resident in the United Kingdom who share the parental responsibility for P, a British citizen aged three, born in the UK. P has been living in India since October 2018, when the mother took him there fleeing from (alleged) domestic violence. There has been no contact between the father and P since 2018.

The mother did not seise the English courts before removing P to India, nor did she obtain the consent of the father. On 26 November 2019, she seised the Family Court at Chelmsford for ‘permission to change jurisdiction of the child’. On 26 August 2020, the father filed an application in the High Court requesting in essence the return of the child to the UK. On 6 November 2020, the High Court (Family Division) addressed the issue of jurisdiction and determined that the English courts could not base jurisdiction neither on Article 8 on Article 12(3) of the Brussels IIa Regulation. Having doubts as to whether Article 10 of the Regulation applies where a child is wrongfully removed to or retained in a third country, it referred the following question for a preliminary ruling:

Does Article 10 of Brussels 2 retain jurisdiction, without limit of time, in a member state if a child habitually resident in that member state was wrongfully removed to (or retained in) a non-member state where she, following such removal (or retention), in due course became habitually resident?

The case is allocated to a chamber of five judges, with E. Regan as reporting judge. A. Rantos is the advocate general in charge.

The Opinion of AG Bobek in case C-800/19, reported in this blog some days ago, will be delivered on 23 February.

Finally, the judgment in C-804/19 Markt24 will be published on 24 February. The blog had informed about the questions referred here. The Opinion by AG Oe, of October 29, 2020, is not available in English. My tentative translation would be:

  1. A claim for payment of the remuneration agreed in an employment contract, filed by a worker domiciled in a Member State against an employer domiciled in another Member State, falls within the scope of Regulation (EU) No. 1215/2012 (…) and, more specifically, section 5 of its chapter II, even when the worker has not, in practice, performed any work in compliance with the contract in question.
  2. Regulation No. 1215/2012 precludes the application of the rules on jurisdiction established by the national law of the court seised, enabling an employee to bring an action in the place where his domicile or habitual residence is located during the employment relationship, or before the court in the place where the remuneration is to be paid.
  3. When a employee and an employer have entered into an employment contract and, for whatever reason, no performance has been made in practice in compliance with that contract, ‘the place where or from where the employee habitually carries out his work’, within the meaning of Article 21, paragraph 1, letter b), subparagraph i), of Regulation No. 1215/2012, will coincide, in principle, with the workplace agreed in the aforementioned contract.

Although not directly related to PIL, I would like to draw the readers’ attention also to case C-490/20 Stolichna obshtina, Rayon “Pancharevo”. Hearing is taking place on 9 February. The questions referred by Administrativen sad Sofia-grad (Bulgaria) are:

Must Article 20 TFEU and Article 21 TFEU and Articles 7, 24 and 45 of the Charter of Fundamental Rights of the European Union be interpreted as meaning that the Bulgarian administrative authorities to which an application for a document certifying the birth of a child of Bulgarian nationality in another Member State of the EU was submitted, which had been certified by way of a Spanish birth certificate in which two persons of the female sex are registered as mothers without specifying whether one of them, and if so, which of them, is the child’s biological mother, are not permitted to refuse to issue a Bulgarian birth certificate on the grounds that the applicant refuses to state which of them is the child’s biological mother?

Must Article 4(2) TEU and Article 9 of the Charter of Fundamental Rights of the European Union be interpreted as meaning that respect for the national identity and constitutional identity of the Member States of the European Union means that those Member States have a broad discretion as regards the rules for establishing parentage? Specifically:

–    Must Art. 4(2) TEU be interpreted as allowing Member State to request information on the biological parentage of the child?

–    Must Article 4(2) TEU in conjunction with Article 7 and Article 24(2) of the Charter be interpreted as meaning that it is essential to strike a balance of interests between, on the one hand, the national identity and constitutional identity of a Member State and, on the other hand, the best interests of the child, having regard to the fact that, at the present time, there is neither a consensus as regards values nor, in legal terms, a consensus about the possibility of registering as parents on a birth certificate persons of the same sex without providing further details of whether one of them, and if so, which of them, is the child’s biological parent? If this question is answered in the affirmative, how could that balance of interests be achieved in concrete terms?

Is the answer to Question 1 affected by the legal consequences of Brexit in that one of the mothers listed on the birth certificate issued in another Member State is a UK national whereas the other mother is a national of an EU Member State, having regard in particular to the fact that the refusal to issue a Bulgarian birth certificate for the child constitutes an obstacle to the issue of an identity document for the child by an EU Member State and, as a result, may impede the unlimited exercise of her rights as an EU citizen?

If the first question is answered in the affirmative: does EU law, in particular the principle of effectiveness, oblige the competent national authorities to derogate from the model birth certificate which forms part of the applicable national law?

This will be (not surprisingly) a Grand Chamber decision.

Milan Investment Arbitration Week: 15-20 February 2021

Conflictoflaws - dim, 01/31/2021 - 18:49

From 15 to 20 February 2021, Università degli Studi di Milano and the European Court of Arbitration, in cooperation with the Law Firms BonelliErede and DLA Piper Italy, organize the first edition of the “Milan Investment Arbitration Week” (MIAW), a series of different events (conferences, round-table debates, legal competitions), held in streaming and related to international investment law and arbitration. Renowned Italian and foreign experts from academia, legal profession and arbitral institutions will address from different angles some of the most relevant topics related to the field. In addition, MIAW will include two legal competitions: the second edition of the Milan Investment Arbitration Pre-Moot and the first edition of the Construction Arbitration Moot, with the participation of several Universities from all around the world. Detailed information available here.

Private and Public International Law

Conflictoflaws - sam, 01/30/2021 - 23:50

Michiel Posen appropriated a currently popular meme and went (almost) viral. Is his observation right? Comments very welcome.

Can China’s New “Blocking Statute” Combat Foreign Sanctions?

Conflictoflaws - sam, 01/30/2021 - 13:56

by Jingru Wang, Wuhan University Institute of International Law

  1. Background

A blocking statute is adopted by a country to hinder the extraterritorial application of foreign legislation.[1] For example, the EU adopted Council Regulation No 2271/96 (hereinafter “EU Blocking Statute”) in 1996 to protest the US’s extraterritorial sanctions legislation concerning Cuba, Iran and Libya.[2] Since Donald Trump became the US president, the US government officially defined China as its competitor.[3] Consequently, China has been increasingly targeted by US sanctions. For example, in 2018, the US imposed broad sanctions on China’s Equipment Development Department (EDD), the branch of the military responsible for weapons procurement and its director for violating the US law on sanctions against Russia.[4] In 2020, the US announced new sanctions on Chinese firms for aiding North Korea’s nuclear weapons program.[5] A number of “Belt and Road” countries are targeted by US primary sanctions, which means that Chinese entities may face a high risk of secondary sanctions for trading with these countries. In these contexts, Chinese scholars and policy makers explore the feasibility to enact blocking law to counter foreign sanctions.[6] On 9 January 2021, China’s Ministry of Commerce (hereinafter “MOFCOM”) issued “Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures” (hereinafter “Chinese Blocking Rules”), which entered into force on the date of the promulgation.[7]

 

  1. Analysis of the Main Content

Competent Authority: Chinese government will establish a “Working Mechanism” led by the MOFCOM and composed of relevant central departments, such as the National Development and Reform Commission. The Working Mechanism will take charge of counteracting unjustified extraterritorial application of foreign legislation and other measures (Art. 4).

Targeted extraterritorial measures: The Chinese Blocking Rules target foreign legislation and other measures unjustifiably prohibit or restrict Chinese parties from engaging in normal economic, trade and related activities with third state’s parties (Art. 2), which is the so-called “secondary sanction”. Namely, if China considers sanctions unilaterally imposed by the US against a third country unjustified and violating international law, it may nullify such sanctions and allow Chinese companies to continue to transact with the third country. These Rules do not impact restrictions on business activities between China and the sanctioning country.

Unlike the EU Blocking Statute, the Chinese Blocking Rules do not provide an annex listing the legislation subject to the blocking but grant the Working Mechanism discretion. To determine whether foreign legislation or other measures fall within the application scope of the Chinese Blocking Rules, the Working Mechanism shall consider (1) the international law and fundamental principle of international relations; (2) potential impact on China’s national sovereignty, security and development interests; (3) potential impact on the legitimate interest of the Chinese party and (4) all other factors (Art. 6). On the one hand, the non-exhaustive list grants the Working Mechanism broad flexibility to analyse on a case-by-case basis. China has repeatedly become the target of US secondary sanctions. An exhaustive list of foreign legislation and other measures is insufficient to deal with the changing situations. On the other hand, China is prudent in confrontation with other countries. In a press conference, the MOFCOM spokesman stated that “the working mechanism will closely follow the inappropriate extraterritorial application of relevant national laws and measures.”[8] Therefore, the response of other countries will influence the enforcement of the Chinese Blocking Rules.

It is noteworthy the Chinese Blocking Rules will not affect China’s performance of its international obligations. These Rules shall not apply to such extraterritorial application of foreign legislation and measures as provided for in treaties or international agreements to which China is a party (Art. 15).

Information reporting system: A Chinese party prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third state’s party shall report such matters to the MOFCOM within 30 days (Art. 5). Otherwise, the Chinese party may be warned, ordered to rectify or fined (Art. 13). To encourage the information report, Art. 5 of the Chinese Blocking Rules also provides that the competent authority shall keep such report confidential at the request of the Chinese party. The staff of the competent authority may undertake administrative penalties if they fail with such obligation (Art. 14).

Concerning the Information reporting system, when the report obligation is triggered is unclear. Should the Chinese party report within 30 days after the foreign legislation is published or other measures are taken or after its actual operation is restricted? Moreover, since the Chinese Blocking Rules do not list targeted foreign legislation and other measures, the Chinese party should rely on their judgment to report. Finally, who should report on behalf of the legal person remains to be answered.

Prohibition order: Once the unjustified extraterritorial application of foreign legislation and other measures is confirmed, the Working Mechanism may decide that the MOFCOM shall issue a prohibition order to ban the effect of relevant foreign legislation and other measures (Art. 7). A Chinese party that fails to observe the prohibition order will be punished (Art. 13). Therefore, Chinese parties are forced to comply with either Chinese or foreign laws. In other words, they will be punished by one or the other. To free the party from the dilemma, a Chinese party may apply for exemption from compliance with a prohibition order (Art. 8). China-based subsidiaries of foreign companies are formed under Chinese law. They are considered to be Chinese entities. Therefore, unless otherwise provided by law, they are subject to the prohibition order issued under the Chinese Blocking Rules and can apply for the exemption.

One major uncertainty is whether third state’s parties are subject to the prohibition order. These Rules do not stipulate that foreign entities will be punished by violating the prohibition order or can apply for the exemption. However, it is suggested that the prohibition order may bind the third state’s party for two reasons. Firstly, the US may issue secondary sanctions to prohibit Chinese parties from trading with third state’s parties (Iran as an example), or to prohibit third state’s parties (EU as an example) from trading with Chinese parties. According to Art. 2 of the Chinese Blocking Rules, both situations may obstruct the normal economic, trade and related activities between the Chinese party and the third state’s party. If the prohibition order merely applies to the Chinese party, it cannot protect Chinese businesses from being prejudiced by the US secondary sanctions in the latter situation. Secondly, a Chinese party can bring a lawsuit before the People’s Court against the party who infringes the legitimate interest of such Chinese party by complying with the foreign legislation and other measures covered by the prohibition order (Art. 9). This article does not limit the defendant to “a Chinese party.” Thus it shall include the third state’s party. If the prohibition order does not bind the third state’s party, it is doubtful that such third state’s party is liable for not complying with the prohibition order.

The prohibition order refrains relevant parties from complying with specific foreign legislation and other measures. A question is how should the prohibition order be observed. According to the European Commission’s Guidance Note, the purpose of the EU Blocking Statute is to ensure that business decisions on trading with third States remain free. It does not oblige EU operators to do business with Iran or Cuba. Also, the Chinese Blocking Rules cannot and should not oblige the Chinese party and the third state’s party to engage with each other. Therefore, it raises the worry that these Rules may apply better for breach of existing contract but be more difficult to “force” someone to enter into a contract or in terms of the pre-contractual obligation.

Judicial Remedy: A Chinese party can bring a lawsuit before the People’s Court of PRC against the party who infringes its legitimate interest by complying with the foreign legislation or measures covered by the prohibition order. A Chinese party may also suit the party who benefits from the judgment or ruling made under such foreign legislation or other measures before the People’s Court (Art. 9). Problems may arise if the losing party has no asset in China seized for enforcement by the Chinese court. Other countries may be reluctant to recognize and enforce such judgment.

Government support: Members of the Working Mechanism shall provide guidance and service to Chinese parties to deal with unjustified extraterritorial application of foreign legislation and other measures (Art. 10). Suppose a Chinese party that observes the prohibition suffers significant losses resulting from non-compliance with the relevant foreign legislation and measures. In that case, relevant government departments may provide necessary support based on specific circumstances (Art. 11). Which government department is responsible for these matters? Does “Necessary support” include financial compensation or support on litigation in the sanctioning country? These questions remain to be answered.

 

  1. Impact of the Blocking Statute

Considering that China has long suffered from secondary sanctions issued by the US government, promulgating the Chinese Blocking Rules is not a surprise. Overall, the Chinese Blocking Rules attempt to establish three core institutions anticipated by Chinese scholars: (1) blocking the effect and enforcement of specific foreign legislation in China; (2) prohibiting relevant parties from complying with specific foreign legislation and other measures; (3) enabling relevant parties to recover the damage from the party who complies with the foreign legislation and measures covered by the prohibition order. Therefore, a blocking statute serves as both shield and sword to fight against foreign sanctions.

But the function of blocking statute shall not be overemphasized. The same as the EU Blocking Statute, the Chinese Blocking Rules create a quandary for relevant parties.

For Chinese parties, if they comply with the Chinese prohibition order, they have to deal with US penalties. Chinese parties may invoke “foreign sovereign compulsion”[9] as a defence to insulate themselves from certain US sanctions penalties. In determining whether to buy such argument, US courts often consider whether foreign states actively enforce them.[10] The Chinese Blocking Rules can provide a legal basis for Chinese parties to exempt from the US sanctions by strategic enforcement actions. If so, Chinese parties will be relieved to transact with third state’s parties. But the Chinese government may not be willing to provide the same exemption. Out of self-interest, Chinese parties may be more likely to comply with the Chinese Blocking Rules.

These Rules have not yet stipulated the legal result if third states’ parties violate the Chinese prohibition order. In principle, prescriptive jurisdiction can be extraterritorial, but enforcement jurisdiction must be territorial. Therefore, China cannot always extend the effect of Blocking Rules to a third state’s party even if it has the will. However, it is reasonable to assume that third state’s parties may be added to the “unreliable entities list”[11] for disregarding the Chinese prohibition order. It may prompt third state’s parties to observe the Chinese prohibition order voluntarily to preserve their assets and reputation in China. But even if third state’s parties value the Chinese market, it is uneasy for them to choose China over the US.

China has become more active in exploring countermeasures against the US. On 19 September 2020, MOFCOM released provisions on establishing “unreliable entity list.”[12] Promulgation of the Chinese Blocking Rules is another proactive attempt. However, both are departmental rules, which are at a relatively low-level in the Chinese legal system. Predictably, higher-level legislation concerning the extraterritorial effect of foreign legislation and other measures will be enacted in the future. It may prompt China and the US back to the negotiating table.

[1] Menno T. Kamminga, “Extraterritoriality”, Max Planck Encyclopedia of Public International Law, November 2012, para. 26.

[2] COUNCIL REGULATION (EC) No 2271/96, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:01996R2271-20140220.

[3] White House, National Security Strategy of the United States of America, December 2017.

[4] CAATSA – Russia-related Designations, available at: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180920_33. aspx.

[5] North Korea Designations, available at: https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20201208.

[6] Ye Yan, “On the EU Blocking Statute”, Pacific Journal, Vol. 28, No. 3, Mar. 2020, pp. 50-66; Huo Zhengxin, “Extraterritoriality of Domestic Law: American Model, Jurisprudential Deconstruction and Chinese Approach”, Tribune of Political Science and Law, Vol. 38, No. 2, Mar. 2020, pp. 173-191.

[7] Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures, available at: http://www.mofcom.gov.cn/article/i/jyjl/e/202101/20210103032421.shtml.

[8] The Head of the Department of Treaty of Law of Ministry of Commerce answers press on “Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures”, available at:  http://www.mofcom.gov.cn/article/news/202101/20210103029779.shtml.

 

[9] “Foreign Sovereign Compulsion” means that if a party is obliged to do or not to do an act by a state, it may constitute a defence for not complying with the obligation specified by the US law before the US court. See American Law Institute, Restatement of the Law, Third, The Foreign Relations Law of the United States, American Law Institute Publishers, 1990, p. 341.

[10] M. J. Hoda, “The Aerospatiale Dilemma: Why U.S. Courts Ignore Blocking Statutes and What Foreign States Can Do About It”, California Law Review, Vol. 106, No. 1, 2018.

[11] The entity added to the list will be restricted on China-related trade, investment in China and travel or work permits. See “MOFCOM Order No. 4 of 2020 on Provisions on the Unreliable Entity List”, available at:

http://www.mofcom.gov.cn/article/b/fwzl/202009/20200903002593.shtml.

[12] Ibid.

 

HCCH Monthly Update: January 2021

Conflictoflaws - ven, 01/29/2021 - 20:13
Membership 

On 19 January 2021, Namibia deposited its instrument of acceptance of the Statute, becoming the 87th Member of the HCCH. More information is available here

Conventions & Instruments  

On 1 January 2021, the HCCH 2000 Protection of Adults Convention entered into force for Belgium. The Convention currently has 13 Contracting Parties. More information is available here

On 1 January 2021, the United Kingdom’s new instrument of accession to the HCCH 2005 Choice of Court Convention and new instrument of ratification to the HCCH 2007 Child Support Convention entered into force. The United Kingdom has already been bound by the Choice of Court Convention since 2015 and by the Child Support Convention since 2014, by virtue of the European Union’s approval. To ensure continuity in their application following its withdrawal from the EU, the United Kingdom deposited these new instruments of accession and ratification on 28 September 2020. More information is available here

On 18 January 2020, Singapore deposited its instrument of accession to the HCCH 1961 Apostille Convention. With the accession of Singapore, the Apostille Convention now has 120 Contracting Parties. Singapore is the third ASEAN Member State to join the Apostille Convention. It will enter into force for Singapore on 16 September 2021. More information is available here

Meetings & Events 

From 22 to 27 January, the Applicable Law Working Group on the HCCH 2007 Maintenance Obligations Protocol met via videoconference. The Group provided guidance in relation to issues of applicable law arising from certain family relationships, the law applicable to preliminary / incidental questions, as well as the interpretation and scope of certain articles of the Protocol. More information is available here

Publications & Documentation 

On 29 January, the Permanent Bureau announced the publication of translations, in all European Union languages, of the Practical Handbook for Competent Authorities on the 2007 Child Support Convention, the 2007 Maintenance Obligations Protocol, and the 2009 EU Maintenance Regulation. The translations were made possible with the support of the Directorate-General for Justice and Consumers of the European Commission. The Handbook, originally published in English, French, and Romanian, was jointly developed by the HCCH, the Ministry of Justice of Romania, and the French National School for the Judiciary (ENM). More information is available here

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website

Private International Law in Europe: Current Developments in Jurisprudence

EAPIL blog - ven, 01/29/2021 - 16:00

The Private International Law Interest Group of the Italian Society of International Law and EU Law has organised a series of webinar, most of which will be conducted in English, under the title Private International Law in Europe: Current Developments in Jurisprudence.

The programme is as follows:

29 January 2021, 4 to 6 PM (CET): Limiting European Integration through Constitutional Law? Recent Decisions of the German Bundesvarfassungsgericht and their Impact on Private International Law – Speaker: Christian Kohler (Univ. Saarbrücken); Discussant: Giulia Rossolillo (Univ. Pavia).

19 February 2021, 4 to 6 PM (CET): State Immunity and Jurisdiction in Civil and Commercial Matters in Recent Court of Justice Rulings – Speaker: Alexander Layton (King’s College London); Discussant: Lorenzo Schiano di Pepe (Univ. Genova).

12 March 2021, 4 to 6 PM (CET): La trascrizione dell’atto di nascita nella recente giurisprudenza della Corte costituzionale italiana – Speaker: Sara Tonolo (Univ. Trieste); Discussant: Elena Rodriguez Pineau (Univ. Autonóma Madrid).

9 April 2021, 4 to 6 PM (CET): Law Governing Arbitration Agreements in a Recent Judgment of the UK Supreme Court – Speaker: Adrian Briggs (Univ. Oxford); Discussant: Pietro Franzina (Catholic Univ. of the Sacred Heart, Milan).

23 April 2021, 4 to 6 PM (CET) (TBC): Jurisdiction in Matters Relating to Cross-Border Torts according to the Recent Volkswagen Judgment of the Court of Justice – Speaker: Giesela Rühl (Humboldt Univ. Berlin); Discussant: Fabrizio Marongiu Buonaiuti (Univ. Macerata).

More information available here.

Deep Ocean. A presumably last judgment confirming Brussels Ia UK jurisdiction over continental restructuring using ‘Restructuring Plans’.

GAVC - ven, 01/29/2021 - 12:12

Trower J confirmed mid-December (judgment was not published until earlier this week) jurisdiction for England and Wales courts over continental corporations using ‘Restructuring Plans’, in an echo of his earlier findings in Virgin Atlantic.  The plan has in the meantime also been sanctioned. Mother holding is a Dutch BV. Plan companies are all UK incorporated. Creditors in part UK based, largely non-UK based. However the presence of a sizeable number of them in E&W is held (36-38) to be sufficient to serve as anchor using A8(1) BIa.

As I flagged in my review of Virgin Atlantic, pre-Brexit and of course even more so post Brexit, jurisdiction for these Plans let alone their recognition and enforcement in the EU, involves additional challenges to Schemes of Arrangements. I have a paper on the issues forthcoming.

Geert.

EU private international law, 3rd ed. 2021, paras 5.35 ff

 

Convening order is now here https://t.co/ADUj1QubUO
(and sanctioning order https://t.co/8BtUzj8KMM)
Brussels Ia jurisdiction re Deep Ocean #restructuring 'Plan' addressed in two paras simply confirming indeed arguendo approach as under Schemes of Arrangement, anchor defendants. https://t.co/Qb4nH1cPQO

— Geert Van Calster (@GAVClaw) January 28, 2021

Bitcoin Trades and Consumer Jurisdiction

EAPIL blog - ven, 01/29/2021 - 08:00

On 4 November 2020, the Austrian Supreme Court (OGH) ruled on the applicability of the consumer jurisdiction under Article 18 Brussels I bis Regulation to transactions related to Bitcoin.

Facts

The facts of this case were quite peculiar. An Austrian resident offered investment opportunities on a cross-border basis, which could only be paid for in Bitcoin. After being contacted by a German resident who expressed interest in the investment opportunities, the Austrian offeror sent three agents to the German customer.

The three agents brought with them a so-called Bitcoin ATM to carry out the transaction. Since the Bitcoin ATM did not function, they used the smartphone of the Austrian offeror, which they had also brought “just in case”, to transfer six Bitcoin belonging to the Austrian offeror to an investment account in the name of the German customer. It was agreed that the German customer would reimburse six Bitcoin within a month to the Austrian offeror.

When he failed to do so, he was sued by the Austrian offeror at the latter’s domicile in Austria.

In the proceedings, the German investor contested the jurisdiction of the Austrian courts.

Legal procedure

The Austrian courts at first and second instance dismissed the claim for lack of jurisdiction. They characterised the contract as a contract for the exchange of Bitcoin for the participation in the investment. This led them to apply Article 7(1)(a) Brussels I bis Regulation, with the consequence that (i) the place of performance for each obligation must be determined according to the governing national law and (ii) the governing national law must be identified through the use of the rules of private international law of the forum (see the now classic CJEU judgments in Tessili and De Bloos). The courts took the view that under both Austrian and German law, the place of performance of contracts of exchange is the place of domicile of the debtor of the respective obligation. Since the result was the same under both laws, it did not matter which of the two was applicable to the obligation to return the Bitcoin.

According to the same courts, it was of no relevance in this case if the contract were to be characterized not as a contract for exchange, but as a loan. In the latter case, the place of performance would still be the place of domicile of the debtor under Austrian and German law. This view, however, ignores that loan contracts are governed by the uniform jurisdiction rule of Article 7(1)(b) Brussels I bis Regulation (see CJEU C-249/16, Kareda). The place of performance for a Bitcoin loan would therefore be determined uniformly and in an autonomous way. The CJEU has also previously ruled that the place of performance for long-term contracts is uniformly located at the domicile of the lender (see again Kareda).

The decision by the Austrian Supreme Court

The Supreme Court of Austria cut short the legal debate. It ruled that the German investor acted for a purpose that could not be attributed to her professional or commercial activity, and that she was therefore a consumer in the sense of Article 17 Brussels Ibis Regulation. In the absence of evidence to the contrary, the Austrian offeror was to be assumed to have acted in a professional capacity and therefore as an entrepreneur. The Austrian offeror had also directed his activities to the consumer’s country of residence, as evidenced by the fact that he had marketed the investments in Germany and had recruited numerous investors there. Therefore, the consumer jurisdiction rules of Article 18 Brussels Ibis Regulation applied. As a result, the German investor could only be sued at her place of domicile in Germany (Article 18(2) Brussels Ibis Regulation). The Austrian courts therefore lacked jurisdiction. The action was dismissed.

Assessment

The case raises a number of interesting questions about Bitcoin transactions and jurisdiction. In particular, it illustrates the importance of the question of whether or not Bitcoin can be characterised as money for the purposes of EU Private International Law. If Bitcoin were money, the applicability of the rules on sales or service contracts for performances paid with Bitcoin could be envisaged. If, on the contrary, Bitcoin lacks the legal characteristics of money, any transaction in Bitcoin can only be qualified as a contract falling under Article 7(1)(a) Brussels I bis Regulation, with the result that jurisdiction will depend on the national rules governing the transaction and their characterisation of Bitcoin.

Unfortunately, the Austrian Supreme Court was able to avoid answering the questions on the legal nature of Bitcoin by resorting to the consumer jurisdiction rules. Given the considerable and growing economic importance of Bitcoin, it would be desirable to obtain legal certainty on these questions. But at the least, the ruling underlines the need for protecting Bitcoin investors, including at the level of jurisdiction. It can hardly be doubted that the result reached by the Austrian Supreme Court was appropriate. Investors should not have to sue at a place of domicile of the counterparty simply because an investment can only be paid for in cryptocurrency and not in legal tender.

Conclusions and Recommendations of the Law Applicable to Maintenance Obligations Hague Working Group

European Civil Justice - ven, 01/29/2021 - 00:32

From 22 to 27 January 2021, the Applicable Law Working Group on the Hague Conference Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations met via videoconference. The Conclusions & Recommendations summarising the outcomes of the meeting are attached to this post.

Source: https://www.hcch.net/en/news-archive/details/?varevent=783

law-applicable-to-maintenance-obligations-hague-working-groupDownload

Personal Injury and Article 4(3) of Rome II Regulation

Conflictoflaws - jeu, 01/28/2021 - 15:37

Introduction

Cross border relations is bound to generate non-contractual disputes such as personal injury cases. In such situations, the law that applies is very important in determining the rights and obligations of the parties. The difference between two or more potentially applicable laws is of considerable significance for the parties involved in the case. For example a particular law may easily hold one party liable and/or provide a higher quantum of damages compared to another law. Thus, a preliminary decision on the applicable law could easily facilitate the settlement of the dispute between the parties without even going to trial.

Rome II Regulation[1] governs matters of non-contractual obligations. Article 4 of Rome II applies to general torts/delicts such as personal injury cases. It provides that:

  1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
  2. However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
  3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

 

In the recent case of Owen v Galgey & Ors.,[2] the English High Court was faced with the issue of applying Article 4 of Rome II to a personal injury case. This comment disagrees with the conclusion reached by the High Court Judge in displacing English law under Article 4(2) of Rome II, and applying French law under Article 4(3) of Rome II.

 

Facts

The Claimant is a British citizen domiciled and habitually resident in England who brought a claim for damages for personal injury sustained by him as result of an accident in France on the night of April 3rd 2018, when he fell into an empty swimming pool which was undergoing works at a villa in France – a holiday home owned by the First Defendant, whose wife is the Second Defendant. The First and Second Defendants are also British citizens who are domiciled and habitually resident in England. The Third Defendant is a company domiciled in France, and the insurer of the First and Second Defendants in respect of any claims brought against them in connection with the Villa. The Fourth Defendant is a contractor which was carrying out renovation works on the swimming pool at the time of the accident, and the Fifth Defendant is the insurer of the Fourth Defendant. The Fourth and Fifth Defendants are both companies which are domiciled in France.

It was common ground between the parties that French law applied to the Claimant’s claims against the Fourth and Fifth Defendants. But there was a dispute at to the applicable law in relation to his claims against the First to Third Defendants. These Defendants contended that, by operation of Article 4(2) of Rome II, English law applies because the Claimant and the First and Second Defendants are habitually resident in England. However, the Claimant contended that French law applied by operation of Article 4(3) the Rome II because, he says, it is clear that the tort in this case is manifestly more closely connected with France than it is with England.

It was common ground that French law applied under Article 4(1) of Rome II because the direct damage occurred in France in this case; and English law applied under Article 4(2) of Rome II because the Claimant and First and Second Defendants were all habitually resident in England. The legal issue to be resolved was therefore whether under Article 4(3) the tort/delict was manifestly more closely connected to France than it is with England.

 

Decision

In a nutshell, Linden J held that French law applied under Article 4(3) of Rome II. The Court considered Article 4 of Rome II as a whole and read it in conjunction with both the Explanatory Memorandum[3] and Recitals to Rome II.[4]

Linden J held that Article 4(2) created a special rule which automatically displaced Article 4(1), and Article 4(2) was intended to satisfy the legitimate expectation of the parties.[5] On this basis, he observed that Article 4(2) could only apply in two party cases (only one victim and one tortfeasor), and not multi-party situations.[6] Linden J explicitly disagreed with an earlier decision of Dingemans J in Marshall v Motor Insurers’ Bureau & Ors[7] that held that Article 4(2) applied in multi-party situations.[8]

Linden J considered the relevant circumstances that could give rise to applying Article 4(3) in this case in the following chronological order:

  1. the desire for a single law to govern the whole case involving the Claimant and the First to Fifth Defendants;[9]
  2. the circumstances relating to all the parties in the case;[10]
  3. the place of direct damage under Article 4(1);[11]
  4. the habitual residences of the parties, including where any insurer defendants are registered at the time of the tortious incident and when the damage occurs;[12]
  5. the habitual residence of the Claimant at the time of the consequences of the tort, including any consequential losses;[13]
  6. the nationalities of the parties; [14] and
  7. the fact that the parties have a pre-existing relationship in or with a particular country.[15]

Linden J held, following previous English decisions,[16] that the burden of proof was on the party that seeks to apply Article 4(3).[17] He held that Article 4(3) could only be applied as an exceptional remedy where a clear preponderance of factors supports its application.[18] However he observed that the facts of the case do not have to be unusual for Article 4(3) to apply, though Article 4(3) was intended to operate in a clear and obvious case.[19]

After considering the submission of the parties in the case, Linden J preferred the Claimant’s submission that Article 4(3) applied in this case. In his words: “France is where the centre of gravity of the situation is located and the preponderance of factors clearly points to this conclusion. This conclusion also accords with the legitimate expectations of the parties.”[20]

Linden J gave great weight to the place of direct damage. In his words:

“The tort/delict occurred in France, as I have noted. This is also where the injury or direct damage occurred. The dispute centres on a property in France and it concerns structural features of that property and how the First, Second and Fourth Defendants dealt with works on a swimming pool there. Although these defendants deny that there was fault on the part of any of them, the First and Second Defendants say that the Fourth Defendant was responsible if the pool presented a danger and the Fourth Defendant says that they were. The allegations of contributory negligence/fault also centre on the Claimant’s conduct whilst at the Villa in France.

The First and Second Defendants also had a significant and long-standing connection to France, the accident occurred on their property…

…the situation in relation to the swimming pool which is said to have been the cause of the accident was firmly rooted in France and it resulted from works which were being carried out by the Fourth Defendant as a result of it being contracted to do so by the First and Second Defendants. The liability of the First and Second Defendants, if any, will be affected by how they dealt with that situation, including by evidence about their dealings with the Fourth Defendant. That situation had no significant connections with England other than the nationality and habitual place of residence of the First and Second Defendants.”[21]

Linden J also gave great weight to the desire to apply a single law to govern the whole case against the First to Fifth Defendants.[22] In his words:

“…the works were carried out by a French company pursuant to a contract with them which is governed by French law. Their insurer, the Third Defendant, is a French company and they are insured under a contract which is governed by French law… It is also common ground that the claim against the Fourth Defendant, and therefore against the Fifth Defendant, also a French company, is entirely governed by French law and will require the court to decide whether the Fourth Defendant or, at least by implication, the First and Second Defendants were “custodians” of the property for the purposes of French law.”[23]

On the other hand Linden J did not give great weight to the common habitual residence, common nationalities and common domiciles of the Claimant and First and Second Defendants, and the place of consequential loss which pointed to England. Linden J did not consider the pre-existing relationship between the Claimant and First and Second Defendants to be a strong connecting factor in favour of English law applying in this case. He did not regard their relationship as contractual but one that appears to be “the agreement resulted from a casual conversation between social acquaintances in the context of mutual favours having been done in the past.”[24] He considered that if there was a contract between the parties, he would have held that French law applied under Article 4(3) of Rome I Regulation[25] because the parties mutually performed their obligations in France.

In the final analysis, Linden J held as follows:

“To my mind the tort/delict in this case is much more closely connected to the state of the swimming pool which, as I have said, was part of a property in France and resulted from the French law contract between the First and Second Defendants and the Fourth Defendant. If any of the Defendants is liable, that liability will be closely connected with this contract. This point, taken in combination with the other points to which I have referred, in my view clearly outweighs the existence of any contract with the Claimant relating to the Villa, even if I had found there to be a contractual relationship and even if it was governed by English law.

Similarly, although I have taken into account the nationality and habitual place of residence of the Claimant and the First and Second Defendants, these do not seem to me to alter the conclusion to which I have come. I have also taken into account the fact that the consequences of the accident have to a significant extent been suffered by the Claimant whilst he was in England, but in my view the other factors to which I have referred clearly outweigh this consideration.

I therefore propose to declare that the law applicable to the claims brought by the Claimant against the First, Second and Third Defendants is French law.”[26]

 

Comment

Owen is the second English case to utilise Article 4(3) as a displacement tool.[27] Interestingly, Owen and Marshall are both cases where Article 4(3) was used to trump Article 4(2) in order to restore the application of Article 4(1). These judicial decisions put to rest any contrary view that Article 4(3) cannot be used to restore the application of Article 4(1), when Article 4(2) automatically displaces Article 4(1). In this connection, I agree with the judges’ conclusion on the basis that Article 4(3) operates as an escape clause to both Article 4(1)&(2). Such an approach also honours the requirement of reconciling certainty and flexibility in Recital 14 to Rome II. A contrary approach will unduly circumscribe the application of Article 4(3) of Rome II.

I do not agree with Linden J that Article 4(2) of Rome II only applies in two party cases (one victim and one tortfeasor) and does not apply in multi-party cases. I prefer the contrary decision of Dingemans J in Marshall. Interpreting Article 4(2) as being only applicable to two party cases is a very narrow interpretation. Moreover, the fact that Article 4(2) is a strong exception to Article 4(1) does not mean that Article 4(2) should be unduly circumscribed. Article 4(2) should not be applied mechanically or without thought. It must be given some common sense interpretation that suits the realities of cross-border relations in torts.

Moving to the crux of the case, I disagree with the conclusion reached by Linden J that French law applied in this case. Applying the test of Article 4(3), the tort was not manifestly more closely connected with France. In other words, it was not obvious that Article 4(3) outweighed the application of Article 4(2). To my mind, the arguments between the opposing parties were evenly balanced as to whether the tort was manifestly more closely connected with France. Article 4(2) in this case, which pointed to English law, was also corroborated by the common domiciles and common nationalities of the Claimant and First and Second Defendants which should have been regarded as a strong connecting factor in this case. In addition, the non-contractual pre-existing relationship between the Claimant and First and Second Defendants, and consequential loss pointed to England, though I concede that these factors are not very strong in this case.

It is important to stress that Article 4(2) of Rome II is a fixed rule and not a presumption of closest connection as it was under Article 4(2) of the Rome Convention.[28] Once Article 4(2) of Rome II applies, it automatically displaces Article 4(1), except Article 4(3) regards the place of damage as manifestly more closely connected with another country. Linden J appeared to give decisive weight to the place of damage and the desire to apply a single law to all the parties in the case, but did not pay due regard to the fixed rule in Article 4(2) and the fact that it was corroborated by other factors such as the common nationalities and domiciles of the Claimant and First and Second Defendants involved in the case.

 

Conclusion

Owen presents another interesting case on the application of Article 4 of Rome II to personal injury cases. It is the second case an English judge would be satisfied that Article 4(3) should be utilised as a displacement tool. The use of the escape clause is by no means an easy exercise. It involves a degree of evaluation and discretion on the part of the judge. Indeed, Article 4(3) is very fact dependent. In this case, Linden J preferred the argument of the Claimant that French law applied in this case under Article 4(3). From my reading of the case, I am not convinced that this was a case where Article 4(3) manifestly outweighed Article 4(2). It remains to be seen whether the First, Second and Third Defendants will appeal the case, proceed to trial or settle out of court.

[1]Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations [2007] OJ L199/40 (“Rome II”). It takes effect in courts of Member States only for events giving rise to damage occurring after 11 January 2009, as decided by the Court of Justice of the European Union (CJEU) in Case C-412/10 Homawoo EU:C:2011:747 [37].

[2] [2020] EWHC 3546 (QB)

[3]Explanatory memorandum from the Commission, accompanying the Proposal for Rome II, COM(2003) 427final (Explanatory Memorandum).

[4] Ibid [15] – [24].

[5] Ibid [26] – [27].

[6] Ibid [27] – [29], [35]. However, the argument as to whether Article 4(2) applied only in two party situations was not put forward before Linden J.

[7] [2015] EWHC 3421 (QB) [17].

[8] Owen (n 2) [35].

[9] Ibid [36] – [38]. In this connection, Linden J considered and followed the decision in of Dingemans J in Marshall (n 7) [18].

[10]Owen (n 2) [39] – [45]. In this connection, Linden J considered and followed the decision of Cranston J in Pickard v Marshall & Ors [2017] EWCA Civ 17 [14] – [15].

[11]Owen (n 2) [46]. Linden J followed Winrow v Hemphhill & Anor. [2014] EWHC 3164 [43], and Dingemans J in Marshall (n 7) [19].

[12] Owen (n 2) [48]

[13] Ibid [49]. Linden J followed Winrow (n 11) [39]&[43] and  Stylianou v Toyoshima [2013] EWHC 2188 (QB). At paragraph 50 Linden J stated that less weight was to be given to this factor.

[14] Ibid [51]. Linden J followed Winrow (n 11) [54]&[55] and Marshall (n 7) [22].

[15] Ibid [52] – [[56]

[16] Winrow (n 11) [16] and Marshall (n 7) [20].

[17] Owen (n 2) [57].

[18]Ibid [58]

[19] Ibid [61].

[20] Ibid [74].

[21]Ibid [75]-[77]

[22] Indeed, it was common ground in this case that the contract of insurance between the First, Second and Third Defendants was governed by French law; the contract between the First Defendant and the Fourth Defendant was governed by French law; the contract of insurance between the Fourth and Fifth Defendants was governed by French law; and the Claimant’s claims against the Fourth and Fifth Defendants are governed by French law. Ibid [12]

[23]Ibid [76].

[24] Ibid [78].

[25]Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations [2008] OJ L177/6 (“Rome I”).

[26] Ibid [81] – [83].

[27] Marshall (n 7) was the first case to successfully utilise escape clause as a displacement tool.

[28][1980] OJ L266.

Overriding Mandatory Rules in the Law of the EU Member States – Publication of the Young EU PIL Research Network

EAPIL blog - jeu, 01/28/2021 - 08:00

The General Report on the second project led by the EAPIL Young EU Private International Law Research Network on Overriding Mandatory Rules in the Law of the EU Member States, under the supervision of Tamás Szabados (University of Budapest), has just been published in the ELTE Law Journal, along with the written versions of some of the contributions of the online conference on the topic, organised in November 2020.

The editorial by Tamás Szabados reads as follows:

The Young European Union Private International Law Research Network was established in 2019 in order to promote academic cooperation within the young generation of private international lawyers in the European Union. The activity of the Network centres around projects and the project theme for 2020 was the application of overriding mandatory norms.

Overriding mandatory norms are beloved subjects for private international lawyers. Most often, however, they are analysed in the context of EU private international law, and principally in contract law, without due regard to other situations where overriding mandatory provisions may equally claim application. Therefore, the primary goal of the project was to reveal whether and to what extent overring mandatory provisions are applied in the autonomous private international law of the Member States, i.e. outside the scope of application of the EU private international law regulations. Some findings have been made in the general report prepared in the framework of the project, based on the contributions of national reporters from seventeen Member States. The report, however, clearly demonstrates that the application or consideration of overriding mandatory rules is also admitted in the autonomous private international law of the Member States, and most notably they involve rules on personal status and family law, property law and company law.

This enquiry on the application of overriding mandatory provisions in autonomous private international law is supplemented by the discussion of topics related to the application of overriding mandatory rules in private international law and arbitration. Martina Melcher examines which substantive law rules of EU law may qualify as overriding mandatory provisions under the Rome I and Rome II Regulations. Katažyna Bogdzevič puts the application of overriding mandatory provisions in family law and regarding names under scrutiny. Markus Petsche addresses the application of mandatory rules in international commercial arbitration. Uglješa Grušić discusses the implications of some recent English conflict-of-laws cases concerning the application of overriding mandatory provisions, such as Lilly Icos LLC v 8PM Chemists Ltd and Les Laboratoires Servier v Apotex Inc. Finally, the approach of the new Hungarian Private International Law Act towards overriding mandatory norms is presented by Csenge Merkel and Tamás Szabados.

The recent COVID-19 pandemic sadly enlightens a further category of overriding mandatory norms: public health measures. Measures related to the prevention of the spread of the coronavirus, introduced by many states around the world, can be considered as overriding mandatory norms. They include closing borders, cities and workplaces, ordering the cancellation of large-scale events, such as theatre and cinema shows or concerts, a mandatory ban on flights or road transport and the expropriation of local face masks production and stocks.

It was planned to hold a conference at ELTE Eötvös Loránd University with the participation of the project participants in March 2020 to discuss the research outcomes. The coronavirus epidemic interfered with this plan. However, academic cooperation continued without interruption. The conference has been scheduled for a later date and moved to the online space. Moreover, the written versions of the planned conference lectures can now be published in the ELTE Law Journal. The disease could reimpose borders across Europe, but this cannot prevent scholarly exchange. This is proved in this issue of the ELTE Law Journal.

Contributors include Tamás Szabados, Melcher, Katažyna Bogdzevič, Markus Petsche, Uglješa Grušić, and Csenge Merkel.

The full issue is available here.

 

Luxembourg Passes Law on Nuclear Liability

EAPIL blog - mer, 01/27/2021 - 13:00

In July 2020, Luxembourg eventually adopted a statute on Civil Liability for Harm related to a Nuclear Accident. The statute imposes strict liability on operators of nuclear installations for any damage that a nuclear accident might cause.

There is, however, no nuclear installation in Luxembourg, and there will not be anytime soon. A constant source of disagreement and discussion between the Grand Duchy and France is the French nuclear power plant of Cattenom, which sits a few kilometers away from the border (France has the curious habit of sitting its nuclear plants on the border with neighbouring states). In other words, the new Luxembourg law is solely concerned with foreign nuclear facilities, and indeed essentially with the one in Cattenom (there are also nuclear plants in Belgium, but farther from the border with Luxembourg).

Cattenom: A view from Luxembourg (Picture: Paperjams News) 1960 Paris Convention

The first question arising from the adoption of this statute is why luxembourg did not join instead the 1960 Paris Convention on Nuclear Third Party Liability (Luxembourg signed the Convention, but did not ratify it). The Luxembourg lawmaker explained that it felt that the goal of the Convention was only to limit the liability of nuclear operators, and that it was therefore not in the interest of a country which did not have any nuclear facilities to join the Convention.

In particular, the Luxembourg lawmaker wanted to avoid the numerous limitation of the liability of nuclear operators laid down by the Convention (maximum amount for compensation, time limits, limitation to certain types of losses), but also the exclusive jurisdiction of the court of the place of the operation of the nuclear facility, which would obviously exclude the jurisdiction of Luxembourg courts.

The Luxembourg lawmaker noted that Austria had also adopted its own legislation, and that the goal was to follow this path. It also noted that major nuclear powers such as the U.S., Russia or Japan never joined the 1960 Convention anyway.

Jurisdiction

Article 5 of the statute provides that Luxembourg courts have jurisdiction to entertain

actions related to nuclear losses resulting from nuclear accidents insofar as the Luxembourg territory, Luxembourg residents or person on Luxembourg territory at the time of the torts are concerned.

Parliamentary procedure in Luxembourg includes a review of bills by an independent body, the Council of State (Conseil d’Etat). In its opinion, the Council of State remarked that the Brussels I bis Regulation applied, and therefore requested (but did not demand) that the provision clarifies that it would only apply subject to the Regulation. The opinion of the Council was not followed.

It is likely that the Regulation would grant jurisdiction to Luxembourg courts anyway on the ground of the place of the damage, but only if direct damage was suffered in Luxembourg. The first draft of the bill expressly provided that it would apply to “losses caused directly or indirectly” by nuclear accidents, but, after the Council of State pointed out that this would be hard to reconcile with the concept of causation under the Luxembourg law of torts (which would apply: see below), the referrence was eventually omitted.

This being said, it is a bit problematic that the Brussels Ibis Regulation could limit the power of a Member State to develop its nuclear policy. This was the goal of the exclusion of public matters from the scope of the Regulation, but in this context it seems quite narrow. The Rome II Regulation allows Member States to adopt overriding mandatory provisions, but who will apply them if the Member States may not grant jurisdiction to their courts to apply them?

Of course, the Regulation would not apply if the defendant was domiciled in a third state (say, Ukraine…).

Picture : Les Echos Applicable Law

Article 6 of the statute provides that “In case of nuclear accidents, actions for civil liability are governed by Luxembourg law“.

Unlike jurisdiction, the Rome II Regulation expressly excludes from its scope nuclear liability. Even if it had not, the statute could certainly have qualified as an overriding mandatory provision.

Enforcement of Luxembourg Judgments Abroad

The statute is silent on the enforcement of Luxembourg judgements abroad. Quite obvious, isn’t it? How could Luxembourg possibly think about regulating enforcement of judgments abroad?

Not as obvious in Luxembourg, it seems. The bill initially included an additional provision stating that “Any judgment from a Luxembourg court which is res judicata cannot be reviewed on the merits“. Fortunately, the Council of State explained in its opinion that it understood that the purpose of the provision was to bind foreign courts, and formally opposed its adoption on the ground that it would violate the sovereignty of foreign states and public international law.

Sovereign Immunity

The statute is silent on sovereign immunity. The initial bill was silent as well, but defined “operators” as including “international organisations” and “states or any other public authority”. The Council of State wondered what was the goal of the drafters of the bill, and whether they genuinely intended that foreign states could be sued in Luxembourg courts and their nuclear policy challenged, and if so on which basis. These express references were eventually omitted from the statute, which defines operators as any person who has a power of decision with respect to, or benefits economically from, a nuclear facility.

Irrespective of whether the final definition of operators excludes states and international organisations (the Nuclear Energy Agency?), it is easy to imagine that private operators could be closely linked to states, and thus appear as emanations of states and benefit from sovereign immunities.

Conclusion: Preparing Future Negotiations? Source: antiatomnetz-trier.de

France and Luxembourg established a Franco-Luxembourg Commission on Nuclear Safety in 1994 which has met 18 times since then. In the last meeting in February 2020, France made clear that Cattenom would not be closed before 2035. The Luxembourg government has long expressed its disagreement with the facility being further maintained in operation.

The Luxembourg press has reported that some Luxembourg politicians hope that the law will increase the costs of neighbouring states, including insurance premiums, to operate nuclear facilities near Luxembourg. Will this change the dynamics of future negotiations between France and Luxembourg?

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