Droit international général

Biset Sena Güneş, senior research fellow at the Max Planck Institute for Comparative and International Private Law, has accepted the invitation of the editors of the blog to present her recent book, titled ‘Succession Upon Death: A Comparison of European and Turkish Private International Law’, written in English, and published by Mohr Siebeck.

This book offers a comparative analysis of the European Succession Regulation, the Turkish PILA of 2007, and the Turkish–German Succession Treaty of 1929, with a particular focus on conflict-of-laws and procedural issues which may arise in Turkish–EU Successions. The aim of the analysis is to discuss to what extent decisional harmony can be achieved in Turkish–EU successions. While the European Succession Regulation has been extensively covered in the literature, non-EU or “third-state” perspectives on the regulation have not received the same degree of attention. In adopting such a perspective on the EU Succession Regulation, the book allows for in-depth analysis of possible cases between the EU Member States and Turkey, which from the perspective of succession is an important “third” state due to the significant number of Turkish nationals residing in the EU.

The first chapter of the book elaborates on the practical relevance of Turkish–EU successions and provides the historical background as well as a general overview of the European Succession Regulation, the Turkish PILA of 2007, and the Turkish–German Succession Treaty of 1929. The second chapter addresses conflicts of laws in Turkish–EU successions both in terms of intestate and testamentary succession. Chapter 2 also undertakes a comparative analysis, in particular on the following issues: the principle of unity or scission; the connecting factors (nationality, habitual residence, and thesitus); the option to enter a professio iuris; matters within the scope of the law applicable to succession; the application of renvoi; and possible examples of overriding mandatory rules and ordre public in Turkish–EU successions. Finally, the third chapter analyses procedural issues in Turkish–EU succession conflicts. First, Chapter 3 compares the respective rules on jurisdiction and discusses possible conflicts of jurisdiction in the Turkish–EU context as well as the tools for avoiding such conflicts (especially choice of court agreements, lis pendens, and limitation of proceedings). It then deals with two questions as regards the European Certificate of Succession, namely whether one can be issued for Turkish nationals in Germany within the scope of the Turkish–German Succession Treaty, and whether a European Certificate of Succession issued in a Member State can be recognised in Turkey.

Key Findings

The comparative analysis demonstrates that the provisions of the German–Turkish Succession Treaty (Art. 20(14) and (15)), now-outdated reflections of the time at which the treaty was drafted, in practice create certain problems for persons who fall under them. But the differences between the rules of this treaty and the Turkish PILA are not as significant a factor for those affected as the differences between it and the EU Succession Regulation. Like the German–Turkish treaty regime (Art. 20(14) and (15)), the Turkish PILA adopts nationality as a connecting factor and has retained its traditional understanding regarding the law applicable to and jurisdiction over succession matters involving real property, at least when situated in its territory (Art. 20 and 43). The treaty regime thus still guarantees a level of coordination for succession cases which may arise between Turkey and Germany even though its rules are inconsistent with the Succession Regulation’s unitary approach towards succession and its main connecting factor of habitual residence (especially Art. 4 and Art. 21(1)).

In Turkish–EU successions not covered by the German–Turkish treaty, on the other hand, the decisional harmony which once could have been ensured through the adoption of the connecting factors of nationality and the situs now seems distorted, because the Succession Regulation (especially Art. 21(1)) revolves around the connecting factor of habitual residence. Some level of harmony in such cases can now be provided only through renvoi (under Art. 34(1) of the Regulation) and a professio iuris made by the deceased (under Art. 22 of the Regulation), although such a choice will not be valid in Turkey.

Harmony does not seem to exist in such cases at the procedural level, either. Potential jurisdictional conflicts between Turkey and Member State courts may arise especially where the deceased was habitually resident or domiciled in Turkey at the time of death and left assets both in Turkey and in a Member State. This is because Turkish courts in such a case will be competent to hear the case pursuant to Art. 43 of the Turkish PILA because the last domicile of the deceased was in Turkey. At the same time, the courts of the Member State in which the assets of the estate are located will also be competent to rule on the succession as a whole (even on assets located in Turkey) in accordance with Art. 10(1) of the Succession Regulation. Notwithstanding this, neither jurisdiction seems to have tools for coordinating jurisdiction (e.g., a mechanism for choice of court agreements or to stay proceedings based on a lis pendens) to eliminate such conflicts in the Turkish–EU context. The only provision which may be helpful in this regard is Art. 12 of the Succession Regulation, on the limitation of proceedings. But Art. 12 only applies on motion of the parties and even then on a discretionary basis.

The long-awaited Regulation (EU) 2023/2844 of the European Parliament and of the Council of 13 December 2023 on the digitalisation of judicial cooperation and access to justice in cross-border civil, commercial and criminal matters, and amending certain acts in the field of judicial cooperation (Digitalisation Regulation or e-justice Regulation) has been published today in the Official Journal of the European Union. For more information on the EU internal procedure, click here.

The Digitalisation Regulation lays down the rules for the use of electronic communication between competent authorities in judicial cooperation procedures in civil, commercial and criminal matters, and for the use of electronic communication between natural or legal persons and competent authorities in judicial procedures in civil and commercial matters (Art. 1). This is to be accomplished, in particular, through the decentralised IT system (Art. 3) and the European electronic access point (Art. 4).

It also foresees the use of videoconferencing or other distance communication technology in civil and commercial matters, without prejudice to specific provisions regulating this topic under the Regulation No 2020/1783 (Evidence Regulation), Regulation No 861/2007 and Regulation No 655/2014 (Art. 5). In addition, it contemplates provisions on electronic signatures and electronic seals (Art. 7) and legal effects of electronic documents (Art. 8).

The Digitalisation Regulation does not apply to the Evidence Regulation and the Regulation No 2020/1784 (Service Regulation) as those regulations “already provide for specific rules on digitalisation of judicial cooperation” (recital 17). However, it does introduce some changes to the Service Regulation, some of which are the following (see Article 24):

• Article 12, paragraph 7 is amended by the following:

1. in Article 12, paragraph 7 is replaced by the following:

‘7.   For the purposes of paragraphs 1 and 2, the diplomatic agents or consular officers, in cases where service is effected in accordance with Article 17, and the authority or person, in cases where service is effected in accordance with Article 18, 19, 19a or 20, shall inform the addressee that the addressee may refuse to accept the document and that either form L in Annex I or a written declaration of refusal must be sent to those agents or officers or to that authority or person respectively.’

• A new Article 19a on Electronic service through the European electronic access point: 

 

Article 19a

Electronic service through the European electronic access point

 

1.   The service of judicial documents may be effected directly on a person who has a known address for service in another Member State through the European electronic access point established under Article 4(1) of Regulation (EU) 2023/2844 of the European Parliament and of the Council […], provided that the addressee has given prior express consent to the use of that electronic means for serving documents in the course of the legal proceedings concerned.

 

2.   The addressee shall confirm the receipt of the documents with an acknowledgment of receipt, including the date of the receipt. The date of service of documents shall be the date specified in the acknowledgment of receipt. The same rule shall apply in the case of service of refused documents which is remedied in accordance with Article 12(5).

 

(4) in Article 37, the following paragraph is added:

 

‘3.   Article 19a shall apply from the first day of the month following the period of two years from the date of entry into force of the implementing acts referred to in Article 10(3)(a) of Regulation (EU) 2023/2844.’

 

For more information about the digitalisation of the Service and Evidence Regulations, including the decentralised IT system for those Regulations, see our previous posts here and here. 

Interestingly, Recital 21 allows for the use of software in maintenance obligations – other than national IT systems – , which has not been developed by the European Commission: “For matters relating to maintenance obligations, Member States could also use software developed by the Hague Conference on Private International Law (iSupport).”

Article 10 of the Digitalisation Regulation sets out when the Implementing Acts must be  adopted by the Commission. For ease of reference, the numbers of the relevant instruments in civil and commercial matters are indicated. 

“(a) 17 January 2026 for the legal acts listed in points 3 and 4 of Annex I Legal acts in the area of judicial cooperation in civil and commercial matters] [and the legal acts listed in points 1, 10 and 11 of Annex II [Legal acts in the area of judicial cooperation in criminal matters];

• Regulation (EC) No 1896/2006
• Regulation (EC) No 861/2007

(b) 17 January 2027 for the legal acts listed in points 1, 8, 9 and 10 of Annex I and the legal acts listed in points 5 and 9 of Annex II;

• Council Directive 2003/8/EC
• Regulation (EU) No 606/2013
• Regulation (EU) No 655/2014
• Regulation (EU) 2015/848

(c) 17 January 2028 for the legal acts listed in points 6, 11 and 12 of Annex I and the legal acts listed in points 2, 3, 4 and 8 of Annex II; and

• Regulation (EU) No 650/2012
• Council Regulation (EU) 2016/1103
• Council Regulation (EU) 2016/1104

(d) 17 January 2029 for the legal acts listed in points 2, 5, 7 and 13 of Annex I and the legal acts listed in points 6 and 7 of Annex II.” 

• Regulation (EC) No 805/2004
• Council Regulation (EC) No 4/2009
• Regulation (EU) No 1215/2012
• Council Regulation (EU) 2019/1111

As per Article 26, this Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. It shall apply from 1 May 2025.

Of great importance is that Article 26(3) of this Regulation specifies the applicability of Articles 3 and 4. In particular, it provides that Articles 3 and 4 “shall apply from the first day of the month following the period of two years from the date of entry into force of the corresponding implementing acts, referred to in Article 10(3), establishing the decentralised IT system for each of the legal acts listed in Annexes I and II.” As a result, this will vary depending on the legal instrument (see above).

Very exciting times ahead!

In a post published on 8 June 2023, I introduced Zubaydah v Foreign, Development and Commonwealth Office, a case heard by the UK Supreme Court on 14 and 15 June.

Abu Zubaydah, the claimant (respondent in the appeal), has brought a tort claim against the UK government (appellants in the appeal), alleging that MI5 and MI6 officers made requests, from their London offices, to their CIA counterparts to interrogate him in circumstances where they knew or ought to have known of his rendition, unlawful imprisonment and torture by the CIA. The central issue was the law applicable to the claim, specifically focusing on the disputed application of the escape clause from section 12 of the Private International Law (Miscellaneous Provisions) Act 1995. The facts of the case, the claim, the central issue and the parties’ arguments are presented in my post of 8 June.

On 20 December 2023, the court delivered its judgment, dismissing the appeal in a four to one decision (Lord Lloyd-Jones, Lord Kitchin, Lord Burrows and Lord Stephens; Lord Sales dissenting). The court held that English law governed the claim, and not the laws of Afghanistan, Lithuania, Morrocco, Poland and Thailand and the law in force in Guantanamo Bay (“Six Countries”).

Interestingly, the court found that both the High Court and the Court of Appeal had erred in their approaches to section 12. The Court of Appeal, in particular, erred by focusing solely on the defendants’ conduct said to have occurred in England. It should have also taken into account the CIA’s conduct ([80], [81]). Hence, the Supreme Court conducted its own choice-of-law analysis.

The connections between the torts and the Six Countries were held to be weak for five reasons. First, Zubaydah was involuntarily present in the Six Countries ([75], [93]). Second, the defendants were entirely indifferent to Zubaydah’s location ([76], [94]). Third, Zubaydah was rendered to and detained in de facto black legal holes ([77], [95]). Fourth, he was held in six such facilities in six countries ([96]). Fifth, his gaolers and torturers were not agents of the Six Countries, but of a third country, ie the US ([97]).

Conversely, the connections between the torts and England were deemed strong for three reasons. First, the defendant is the UK government ([99]). Second, the relevant events occurred partly in England and for the perceived benefit of the UK ([78], [100]). Third, the defendants acted “in their official capacity in the purported exercise of powers conferred under the law of England and Wales… The defendants are all emanations of the UK Government and were at all material times subject to the criminal and public law of England and Wales.” ([101]; similarly [78])

Considering all these factors, the court held that it was substantially more appropriate for the applicable law to be English law.

In my post of 8 June, I noted that this case holds importance for private international law for two reasons.

Firstly, it highlights the role of private international law in holding the executive accountable and vindicating fundamental rights, particularly in cases involving alleged wrongs arising out of the external exercise of British executive authority. In my book on the topic, Torts in UK Foreign Relations, I argue that there are no compelling theoretical justifications for the application of foreign law in general to tort claims arising out of the external exercise of British executive authority. I further argue that the English courts should apply English law to tort claims arising out of the external exercise of British executive authority and reserve the application of foreign law only for certain issues, such as the lawfulness of the relevant conduct. The main reason for advocating the application of English tort law is that, together with English criminal and public law, it is fine-tuned for assuring the accountability of British public authorities. Foreign tort law is unlikely to be able to substitute for English tort law.

The Supreme Court essentially adopts this argument by placing decisive weight on the connections between the torts and England. It reinforces this point in relation to the misfeasance claim by noting, at ([62]), that “there is scope for suggesting, for example, that on the presumed facts of this case, it is a constitutional imperative that the applicable law in relation to the tort of misfeasance in public office in relation to the acts and omissions of the UK Services should be the law of England and Wales”.

Secondly, the parties and the court relied on reasonable/legitimate expectations as important factors in the choice-of-law process. Zubaydah’s involuntary presence in the Six Countries meant that he did not have a reasonable expectation that his situation or activities might be governed by the local laws ([75], [93]). Furthermore, the defendants’ indifference to Zubaydah’s location meant that the defendants never expected or intended their conduct to be judged by reference to the local laws ([94]). It is by partial reliance on this fundamental principle underlying the application of foreign law that the court held that foreign laws did not apply.

The Supreme Court judgment is important for two more reasons. It clarifies that an appellate court can interfere with an evaluative judgment under sections 11 and 12 of the 1995 Act if there is shown to be a clear error of law or the judge has reached a conclusion not reasonably open to them ([57]). Furthermore, it sheds light on the handling of accessory liability claims in choice of law. Such claims involve a secondary wrongdoer defendant and a primary wrongdoer third party. The court held that the “factors which connect a tort or delict” with a country, which the courts should consider when applying the escape clause from section 12, cover not only the allegedly wrongful conduct of the secondary wrongdoer (UK Services) but also that of the primary wrongdoer (the CIA) ([80], [81]). Although this judgment was made in the context of the 1995 Act, these aspects of its reasoning can easily be extrapolated to other choice of law contexts.

Among all Arab and Muslim-majority countries, Morocco stands out as the only State to have ratified seven (7) HCCH Conventions. This number of ratifications, comparable to that of other prominent countries such as United States or Japan, speaks volumes about Morocco’s commitment to being an integral part of the global network of jurisdictions benefiting from the work of the HCCH on the harmonisation of private international and fostering mutual legal cooperation. The decisions of the Moroccan Supreme Court also reflect these efforts as the Court has shown its willingness to oversight the proper application of the HCCH Conventions (on the application of the 1980 HCCH Convention, see here). The Supreme Court Ruling No. 71 of 7 February 2023 briefly commented on here is another notable example related to the application of the 1996 HCCH Child Protection Convention. The case is also particularly interesting because it concerns the establishment of a kafala under Moroccan law for the purpose of relocating the child in another Contracting State (France in casu).

 

The case  

The petitioner, a single woman living and working in France (seemingly Moroccan but it is not it is not clear whether she has dual citizenship status), submitted a petition on 31 January 2020 to the Family Division of the First Instance Court (hereafter ‘FIC’) of Taroudant, in which she expressed her intention to undertake guardianship of an abandoned child (A) – born on 13 May 2019 – by means of kafala. The FIC approved the petition by a decree issued on 12 March 2020. Subsequently, the Public Prosecutor filed an appeal against the FIC’s decree with the Court of Appeal of Agadir. On 20 January 2021, the Court of Appeal decided to overturn the FIC’s decree with remand on the ground that the FIC had failed to comply with the rules laid down in article 33 of the 1996 HCCH Child Protection Convention, in particular the obligatory consultation in case of cross-border placement of the child.

The petitioner appealed to the Supreme Court arguing that:

1) The petitioner satisfied all the stipulated requirements under Moroccan law for the kafala of an abandoned child (notably the Law No. 15.01 of 13 June 2002 on the kafala of abandoned children, in particular article 9);

2) The Public Prosecutor failed to invoke the 1996 HCCH Convention during the proceedings before the FIC;

3) While article 33 might be applicable to countries such as Belgium and Germany, where kafala is not recognized, the situation differs in France, making the application of article 33 irrelevant in this context;

4) the Moroccan legislature, through the Law of 2002, has established the procedure for monitoring the well-being of children placed under kafala abroad, along with the ensuring the fulfilment of the caregiver’s o obligations. Additionally, the 2002 Law on kafala was adopted within an international context dedicated to the protection of children, as reflected in the ratification by Morocco in 1993 of UN Child Convention of 1989.

 

The Ruling

The Supreme Court dismissed the appeal by ruling as follows:

“Pursuant to article 33 of the HCCH 1996 Child Protection Convention – ratified by Morocco on 22 January 2003 […]:

(1)  If an authority having jurisdiction under Articles 5 to 10 contemplates the placement of the child in a foster family or institutional care, or the provision of care by kafala or an analogous institution, and if such placement or such provision of care is to take place in another Contracting State, it shall first consult with the Central Authority or other competent authority of the latter State. To that effect it shall transmit a report on the child together with the reasons for the proposed placement or provision of care.

(2)  The decision on the placement or provision of care may be made in the requesting State only if the Central Authority or other competent authority of the requested State has consented to the placement or provision of care, taking into account the child’s best interests.

 

Therefore, since, according to the Constitution, the provisions of the [HCCH] Convention take precedence over the provisions of domestic law, including Law No. 15. 01 […], the Court of Appeal provided a sound justification for its decision when it relied on [Article 33] [which] mandates prior consultation with the central authority or other competent authority in France where the appellant resides and works, and considered that the failure of the FIC’s decree to comply with the requirements of [Article 33] constituted a violation of the law leading to its decision to overturn the kafala decree”.

 

Comment

The case is particularly important because, to the author’s knowledge, it is the first Supreme Court’s decision to apply the 1996 HCCH Child Protection Convention since its ratification by Morocco in 2002 (Royal Decree [Dhahir] of 22 January 2003 published in the Official Gazette of 15 May 2003). The Convention is often given as an example of successful accommodation of religious law in cross-border situations, since it not only specifically mentions kafala as a measure of protection of children, but also it “makes it possible for children from countries within the Islamic tradition to be placed in family care in Europe, for example, under controlled circumstances. (H van Loon, “The Accommodation of Religious Laws in Cross-Border Situations: The Contribution of the Hague Conference on Private International Law”, Cuadernos de Derecho Transnacional (2010) Vol. 2(1) p. 264).

In this regard, article 33 of the Convention plays a central role as it establishes a specific procedure for an obligatory prior consultation between the authorities of the State of origin and the authorities of the receiving State, the failure of which is sanctioned by refusal to recognise the kafala decree (Explanatory Report, para. 143, p. 593).  The Practical Handbook on the Operation of the HCCH 1996 Child Protection Convention qualifies the rules under article 33 as “strict rules which must be complied with before th[e] placement [of the child in a foster family or institutional care, or the provision of care by kafala or an analogous institution] can be put into effect” (para. 13.33, p. 151. Emphasis added).

In the case commented here, the Supreme Court meticulously adhered to the aforementioned guidelines. Firstly, the Court stood by its case law underscoring the primacy of international conventions, and in particular the HCCH Conventions, over domestic law (see e.g., Ruling No. 283 of 2 June 2015 (Case No. 443/2/1/2014), Ruling No. 303 of 28 July 2020 (Case No. 629/2/2/2018), both dealing with the HCCH 1980 Child Abduction Convention. On these cases, see here). Secondly, the Supreme Court upheld the Court of Appeal’s decision, asserting that the failure to use the procedure under article 33 of the 1996 HCCH Child Protection Convention warranted the overturning of the FIC’s kafala decree.

This aspect of the ruling holds particular significance as lower courts have not always consistently demonstrated sufficient awareness of Morocco’s obligations under the1996 HCCH Conventions. Indeed, some lower court decisions show that, sometimes, kafala decrees involving cross-border relocation of the child have been issued without mentioning or referring to the 1996 HCCH Convention (see e.g. Meknes Court of Appeal, Ruling No. 87 of 14 January 2013 granting kafala of a child to a Franco-Moroccan couple and allowing the couple to take the child out of Morocco. See also, the decision of Antwerp Court of Appeal of 16 May 2016 recognizing and declaring enforceable under Belgian domestic law a Moroccan kafala decree despite the fact that the procedure mandated by article 33 was not used in the State of origin). Moreover, Moroccan lower court decisions further indicate that the courts’ main concern has often centred around whether the child’s Islamic education and belief would be affected by the relocation of the child abroad (e.g. Meknes Court of Appeal, Ruling No. 87 of 14 January 2013 (ibid); idem, Ruling No. 19 of 7 January 2013 granting kafala of a Moroccan child to an American couple of Pakistani origins. On this issue in general, see Katherine E. Hoffman, “Morocco” in N. Yassari et al. (eds.), Filiation and Protection of Parentless Children (T.M.C. Asser, 2019) pp. 245ff).

Therefore, in deciding as it did, the Supreme Court emphasises the importance of respecting the procedure prescribed by article 33 before issuing a kafala decree involving cross-border placement. Compliance with this procedure ensures the recognition and enforcement of kafala decrees in all other Contracting States, thereby safeguarding the best interests of the child (The Practical Handbook, para. 13.33, p. 151).

The Spanish Association of Professors of International Law and International Relations  (AEPDIRI) is organising its VII Seminar on current issues in Private International Law on the topic “A Private International Law centred on the rights of individuals”. The seminar will take place at the Faculty of Law of the Universidad Pontificia Comillas (ICADE) in Madrid on 14 March 2024. The working language of the Seminar will be Spanish, but papers may also be presented in English or French.

The Seminar is intended to discuss topics related to the challenges posed by the rights of individuals from a broad perspective and from a Private International Law dimension, related to the following thematic lines: Current issues raised by the regulation of the capacity of persons in Private International Law; Current issues raised by the regulation of parentage in international situations; The rights of vulnerable persons from a Private International Law dimension; Challenges posed by digitisation to the rights of the individual in private cross-border situations; Due diligence obligations in value chains and Private International Law; Civil liability of multinationals for human rights violations; New challenges in Immigration Law; Migrants’ rights from a Private International Law perspective.

Researchers are welcome to submit presentations, which should cover one of the above-mentioned issues. Proposals should fit into the objectives of the Seminar and will be selected –for their oral presentation and/or publication- according to their relevance, quality and originality in respect to their contribution to the development of Private International Law studies.

Proposals should be submitted following the requirements of the Call (for more information, click here), no later than 15 January 2024, by email to: seminarioactualidad.dipr2024@aepdiri.org.

The submission of paper abstracts and participation in the Seminar is free of charge.

 

Sweet & Maxwell is offering a 15% discount on all orders of the book until January 31st 2024. To receive your discount on purchases of the hardback and ProView eBook versions of The European Private International Law of Obligations please visit Sweet & Maxwell’s estore and quote the discount code EPILOO23 at checkout OR call +44 (0)345 600 9355. Offer valid from 22nd December to 31st January 2024. 

 

The European Private International Law of Obligations is a practitioners’ work that is evidently written at a very high standard. This is perhaps unsurprising because the authors, Mr Michael Wilderspin is a legal adviser to the European Commission, and Sir Richard Plender was an English Judge in his lifetime.

In the 6th edition of this authoritative and very illuminating book, Michael Wilderspin now assumes responsibility for its writing. The first edition of the book (in 1991) was solely written by Richard Plender, but he brought in Michael Wilderspin to work on the second edition with him. They worked together on successive editions of the book for a long time. Unfortunately, Richard Plender passed away in 2020, after the 5th edition of this book which was published in 2019.

 

The book is regularly cited in English courts, and it is likely that this tradition will be maintained in the 6th edition of the book. In this new edition over 70 recently decided cases (from the UK, Court of Justice of the European Union (“CJEU”) and other Member States of the EU) have been incorporated into the analysis. The new edition also incorporates many recent secondary sources in its analysis.

 

The book contains four main parts. Part One contains what is described as “COMMON PRINCIPLES” on Rome I and Rome II Regulations. This runs from pages 3 to 91, focusing on preliminary matters such as the history and interpretative approaches of Rome I and Rome II, and a comparison of both Regulations.  Part Two contains what is described as “CONTRACT” based on Rome I. This runs from pages 95 to 488, focusing on a detailed analysis of the Articles of Rome I. Part Three contains what is described as “THE LAW APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS.” This runs from pages 491 to 860, focusing on a detailed analysis of the Articles of Rome II. Part Four contains what is described as “ROME I AND II REGULATIONS IN THE UK.” This runs from pages 863 to 868, focusing on the changes brought by Brexit to Rome I and Rome II as provided in The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019.

 

Each chapter usually commences with a very useful legislative history. There is very impressive knowledge of Rome I and Rome II from a European comparative perspective and comparisons with other international conventions. The interaction between domestic private law in Member States and England, and law applicable to contract and torts is an underlying theme that is explored well in the book. In this regard, there is impressive knowledge of the domestic private laws and conflict of laws rules of many Member States in the EU and England, making this book genuinely European. One point worth mentioning is that the authors also note the final decision of Member State Courts that refer a matter to the CJEU on the applicable law of obligations. For example, in analysing the  decision of the CJEU in Haeger  (2015) which interprets Article 4(4) of the Rome Convention on the law applicable to contract of carriage of goods, Wilderspin also notes the final decision of the French Cour de Cassation that referred the question (see paragraph 8-016, footnote 37). Similarly, in analysing the decision of the CJEU in Nikiforidis (2016) which interprets Article 9 of Rome I on overriding mandatory rules, Wilderspin also notes the final decision of the German Court that referred the question (see paragraph 12-041).

 

Wilderspin notes in the Preface that whilst Richard Plender did not challenge the accuracy of his views, he encouraged him to use a more polite language in writing. Indeed, Wilderspin is a bold writer. He fiercely engages with both primary and secondary sources. On some occasions, he is very blunt. For example, Recital 12 to the Rome I Regulation provides in interpreting Article 3 of Rome I that:

“An agreement between the parties to confer on one or more courts or tribunals of a Member State exclusive jurisdiction to determine disputes under the contract should be one of the factors to be taken into account in determining whether a choice of law has been clearly demonstrated.”

 

Many French scholars like Professor Maxi Scherer (2011) are of the view that there is a requirement of corroboration with other factors in utilising an exclusive jurisdiction agreement to imply a choice of law under Article 3 of Rome I. However, Wilderspin disagrees and regards this view as a “scarcely credible claim” and “very weak.” This tops my chart as one of the strong languages used by a conflict of laws’ academic to disagree with another academic.

 

Wilderspin now appears to have changed his view on the significance of the word “clearly demonstrated” under Article 3 of Rome I (see para 6-028 and 29-104). Wilderspin and Plender previously expressed the view that there is no significant difference between “demonstrated with reasonable certainty” under Article 3 of the Rome Convention and “clearly demonstrated” under Article 3 of Rome I, on the ground that the change was made to merely align the English and German version with the French version. This is a view that has been endorsed by English judges in Lawlor (at para 3) and Aquavita International SA v Ashapura Minecham Ltd [2014] EWHC 2806 (Comm) [20], citing inter alia, older editions of Plender and Wilderpin. Wilderspin now expresses the view that the English version of Article 3 of Rome I is “apparently stricter” than Article 3 of the Rome Convention, and notes that “although the English version was in line with the majority of the other language versions, in particular the German, those versions have become aligned with the minority, French version” (see para 6-028 and 29-104). This change of view by Wilderspin can be attributed to the influence of the outstanding work of Mr Michael McParland (2015) on Rome I Regulation, who at paras 9.37-9.72 notes the detailed legislative history that brought about the significant change in wording under Article 3 of Rome I. Indeed, he cites McParland. However, at para 11-027, footnote 48, Wilderspin notes that the difference between the wording of Article 3 of the Rome Convention and Article 3 of Rome I is “probably more apparent than real.” I think this statement might be an error that was carried over from the last edition. I also take this view because Wilderspin refers to the old paragraph 6-024 instead of the new 6-026 of the new edition of the book.

In the light of this modified view by Wilderspin, it is open to question if English judges and other courts of Member State courts will apply a stricter approach in interpreting Article 3 of Rome I. For example, Professor Pietro Franzina also notes in a book chapter (at para 3.1.1) that the Italian  Supreme Court (Cass., 10 April 2019, No. 10045, Pluris) held that while the wording of Article 3 of the Rome Convention and Rome I were not identical, “they must be understood to have, in substance, the same meaning” on tacit choice of law.

 

The book is a highly specialist work that is meticulously written. Nevertheless, I found what I consider to be only three minor typographical errors the author may correct for the next edition. These are odd references to “CHECK” at paragraph 9-061, “that1” at paragraph 9-064, and “pr” at paragraph 9-089.

 

My final verdict is that the 6th edition of this book will make an excellent Christmas and New Year’s gift in the library of any academic and/or practitioner with an interest in conflict of laws. I highly recommend it without any reservations.

 

 

 

The recently published Volume 433 of the Collected Courses of the Hague Academy of International Law includes the course by Kartsten Thorn (Bucerius Law School) on The Protection of Small and Medium-sized Enterprises in Private International Law.

Speaking about the protection of structurally weaker parties in private international law, this normally refers to non-business parties as consumers or employees. However, in many cases also entrepreneurs are protected. Well-known examples are the commercial agent under European law, the subcontractor in France and the franchisee in many US jurisdictions.

This paper systematizes these cases, looks for underlying policies and develops a proposal for future private international law rules with regard to small and medium sized enterprises (SMEs). It understands private international law in the broad French sense encompassing jurisdiction rules and even international commercial arbitration.

Methodologically, the interplay between substantive law, conflict of laws rules and jurisdiction rules for the protection of weaker parties in the context of different legal systems is shown and evaluated with special consideration of their internationally mandatory rules. Legal gaps to European Private International law are identified in comparison to foreign jurisdictions. Following an economic analysis, a new approach to the protection of SMEs is presented which also encompasses international commercial arbitration as an alternative method of dispute resolution.

The latest issue of RabelsZ has just been released. It contains the following contributions:

ESSAYS

Mareike Schmidt, Kulturalität der Rechtsanwendung und internationale Rechtsvereinheitlichung – Überlegungen am Beispiel des UN-Kaufrechts, 643–671, DOI: https://doi.org/10.1628/rabelsz-2023-0077

Cultural Dimensions in the Application of Law and International Unification of Law – The Example of the CISG. – The uniform application of law, in general, and of international uniform law, in particular, is confronted with the challenges of cultural diversity. Drawing on a meaning-based understanding of culture and using the example of the United Nations Convention on Contracts for the International Sale of Goods, the article examines the extent to which cultural conceptions of normality shape the individual steps in the application of law and illustrates this influence with concrete examples. Overall, it becomes clear that the cultural nature of the application of law goes well beyond what is usually discussed. The analysis advances an understanding of the application of international uniform law as the processing of cultural difference, in the context of which – and within an entire network of actors – foreign conceptions of normality are often interpreted with the aim of integrating them into one’s own system of meaning. The resulting depiction of interconnections within this network, which concludes the text, can serve as a starting point for a more detailed analysis of the processes involved.

Maarten Herbosch, Contracting with Artificial Intelligence – A Comparative Analysis of the Intent to Contract, 672–706, DOI: https://doi.org/10.1628/rabelsz-2023-0076

Computer systems based on artificial intelligence (AI) are an increasing presence in everyday legal practice. They may even be used to form contracts on behalf of their users. In such instances, it is not necessarily required that the system has been set up to take precise, pre-specified actions from an engineering perspective. As a result, the system may enter into contracts unforeseen by its user. This comes into friction with the requirements that contract formation depends on the contracting parties’ intent to be bound or that a contract constitutes a meeting of the minds. It is obscure how the intent to form a specific contract or a meeting of the minds can be present if one of the parties may not even know that a particular contract is being entered into. To tackle this challenge, this article thoroughly examines the intent requirement in various legal systems. It becomes clear that the intent requirement is often loosely applied and that its role is formulated too generally, unnecessarily obstructing a straightforward application to contract formation via AI systems. Supplying nuance to the role of intent in contract formation helps clarify that the intent requirement is not in fact an obstacle to contract formation via AI systems.

SYMPOSIUM: Fundamental Rights and Private International Law

Ralf Michaels: Einleitung zum Symposium: Grundrechte und IPR im Lichte der Entscheidung des Bundesverfassungsgerichts zum Kinderehenbekämpfungsgesetz, 707–713, DOI: https://doi.org/10.1628/rabelsz-2023-0084 [Open Access: CC BY-SA 4.0]

Symposium Introduction: Fundamental Rights and Private International Law after the Federal Constitutional Court Decision on the Act to Combat Child Marriages. – This issue presents the contributions to a symposium which examined the German Federal Constitutional Court’s ruling on the Act to Combat Child Marriages from the perspectives of constitutional law and the conflict of laws. This introduction summarizes the Court’s ruling and situates it in the scheme of German jurisprudence; thereafter, the symposium and the presented papers are described.

Henning Radtke, Zu den Maßstäben der verfassungsrechtlichen Beurteilung von Regelungen des deutschen Internationalen Privatrechts, 714–727, DOI: https://doi.org/10.1628/rabelsz-2023-0083 [Open Access: CC BY-SA 4.0]

On the Standards of Constitutional Review of Provisions of German Private International Law. – The German Federal Constitutional Court regularly reviews the constitutionality of domestic provisions of private international law and their application by the competent courts. In doing so, it takes into account the special features of this type of legislation that result, for example, from the cross-border dimension of the situations it is supposed to address and from the necessary respect for the validity of foreign legal systems. With regard to the protection of marriage and the family, this applies in particular when determining the scope of protection and the structural principles underlying art. 6 para. 1 and other provisions under the German Basic Law. The level of scrutiny when examining constitutionality is primarily determined on the basis of the principle of proportionality.

 

Susanne Lilian Gössl, Grundrechte und IPR – Von beidseitigem Desinteresse zu höflicher Aufmerksamkeit – und zu angeregtem Austausch?, 728–747, DOI: https://doi.org/10.1628/rabelsz-2023-0075 [Open Access: CC BY-SA 4.0]

Fundamental Rights and Private International Law: From Mutual Disinterest to Respectful Attention – and on to Animated Exchange? – The relationship between German constitutional law and the field of conflict of laws has been discussed for decades, especially when decisions of the Constitutional Court (BVerfG) addressing private international law issues have been pending or published. The most recent occasion to reflect on this relationship is the decision of the BVerfG on the Act to Combat Child Marriages. Initially, German scholars had assumed that conflict of laws, as a value-neutral and merely technical body of law, was constitutionally irrelevant. Fundamental rights could – according to a first Constitutional Court decision – at most become relevant through the ordre public clause. Foreign law was subsequently upgraded by the widow’s pension decision, with the result that foreign rules can expand the scope of German fundamental rights. Ultimately, the BVerfG has affirmed that – like private law generally – private international law is bound to the German Constitution as part of the collective legal order and, furthermore, that it shapes the expression of constitutional guarantees in the German legal order. Nevertheless, many theoretically intriguing questions remain open, such as the character of foreign law in the jurisprudence of the Constitutional Court. These questions invite further inquiry and academic exchange.

 

Lars Viellechner, Die Anwendbarkeit der Grundrechte im Internationalen Privatrecht: Zur Methodik der Entscheidung des Bundesverfassungsgerichts über die Kinderehe, 748–765, DOI: https://doi.org/10.1628/rabelsz-2023-0078 [Open Access: CC BY-SA 4.0]

The Applicability of Fundamental Rights in Private International Law: On the Methodology of the Federal Constitutional Court’s Decision Regarding Child Marriage. – In its decision on the Act to Combat Child Marriages, the Federal Constitutional Court of Germany does not explicitly address the applicability of fundamental rights in private international law. It only considers some cross-border effects of the statute in the context of the proportionality test. According to its own earlier case law, however, it should have taken a position on this question. It could also have taken the opportunity to further develop a constitutional notion of conflict of laws, which equally shines through its decisions on the relationship between the Basic Law and both international law as well as European Union law. With resort to such a method, not only could it have clarified a question of principal significance regarding the relationship between fundamental rights and private international law, it might also have reached a different result in the present case.

 

Dagmar Coester-Waltjen, Die »Kinderehen«-Entscheidung des Bundesverfassungsgerichts: Welche Schlussfolgerungen ergeben sich für das internationale Eheschließungsrecht?, 766–785, DOI: https://doi.org/10.1628/rabelsz-2023-0069 [Open Access: CC BY-SA 4.0]

The Early Marriage Decision of the Federal Constitutional Court: What Does It Mean for International Marriage Law? – The decision of the Federal Constitutional Court on art. 13 para. 3 no. 1 of the Introductory Act to the Civil Code raises many questions of private international law. Although the court ultimately held the provision unconstitutional, a welcome outcome, the decision also weakens the protection of legal statuses acquired under foreign law and allows the specifications and classifications of German internal law to apply as the standard even for marriages validly entered into under foreign law. The court roughly indicates a few possible ways to remedy the disproportionality of the provision, but it would seem difficult to implement these remedies in a way that both systematically conforms with the principles of private international law and does not create serious practical issues. As an alternative, the legislator should instead consider declaring all underage marriages, including the »earliest of the early«, to be voidable, because although the court’s ruling accepts their classification as non-marriages, it does not necessarily require such a harsh categorization. The article concludes by examining the potential of a fundamental reform of art. 13 of the Introductory Act to the Civil Code.

 

BOOK REVIEWS

As always, this issue also contains several reviews of literature in the fields of private international law, international civil procedure, transnational law, and comparative law (pp. 786–853).

The latest issue of the RabelsZ (Rabels Zeitschrift für ausländisches und internationales Privatrecht) has been published. This issue features a symposium with several articles focussing on fundamental rights and private international law, one of them in English, the others in German. The following abstracts have been kindly provided to us by the editor of the journal.

Mareike Schmidt, Kulturalität der Rechtsanwendung und internationale Rechtsvereinheitlichung – Überlegungen am Beispiel des UN-Kaufrechts (Cultural Dimensions in the Application of Law and International Unification of Law – The Example of the CISG)

The uniform application of law, in general, and of international uniform law, in particular, is confronted with the challenges of cultural diversity. Drawing on a meaning-based understanding of culture and using the example of the United Nations Convention on Contracts for the International Sale of Goods, the article examines the extent to which cultural conceptions of normality shape the individual steps in the application of law and illustrates this influence with concrete examples. Overall, it becomes clear that the cultural nature of the application of law goes well beyond what is usually discussed. The analysis advances an understanding of the application of international uniform law as the processing of cultural difference, in the context of which – and within an entire network of actors – foreign conceptions of normality are often interpreted with the aim of integrating them into one’s own system of meaning. The resulting depiction of interconnections within this network, which concludes the text, can serve as a starting point for a more detailed analysis of the processes involved.

Maarten Herbosch, Contracting with Artificial Intelligence – A Comparative Analysis of the Intent to Contract

Computer systems based on artificial intelligence (AI) are an increasing presence in everyday legal practice. They may even be used to form contracts on behalf of their users. In such instances, it is not necessarily required that the system has been set up to take precise, pre-specified actions from an engineering perspective. As a result, the system may enter into contracts unforeseen by its user. This comes into friction with the requirements that contract formation depends on the contracting parties’ intent to be bound or that a contract constitutes a meeting of the minds. It is obscure how the intent to form a specific contract or a meeting of the minds can be present if one of the parties may not even know that a particular contract is being entered into. To tackle this challenge, this article thoroughly examines the intent requirement in various legal systems. It becomes clear that the intent requirement is often loosely applied and that its role is formulated too generally, unnecessarily obstructing a straightforward application to contract formation via AI systems. Supplying nuance to the role of intent in contract formation helps clarify that the intent requirement is not in fact an obstacle to contract formation via AI systems.

Ralf Michaels, Einleitung zum Symposium: Grundrechte und IPR im Lichte der Entscheidung des Bundesverfassungsgerichts zum Kinderehenbekämpfungsgesetz ( Symposium Introduction: Fundamental Rights and Private International Law after the Federal Constitutional Court Decision on the Act to Combat Child Marriages)

This issue presents the contributions to a symposium which examined the German Federal Constitutional Court’s ruling on the Act to Combat Child Marriages from the perspectives of constitutional law and the conflict of laws. This introduction summarizes the Court’s ruling and situates it in the scheme of German jurisprudence; thereafter, the symposium and the presented papers are described.

Henning Radtke, Zu den Maßstäben der verfassungsrechtlichen Beurteilung von Regelungen des deutschen Internationalen Privatrechts (On the Standards of Constitutional Review of Provisions of German Private International Law)

The German Federal Constitutional Court regularly reviews the constitutionality of domestic provisions of private international law and their application by the competent courts. In doing so, it takes into account the special features of this type of legislation that result, for example, from the cross-border dimension of the situations it is supposed to address and from the necessary respect for the validity of foreign legal systems. With regard to the protection of marriage and the family, this applies in particular when determining the scope of protection and the structural principles underlying art. 6 para. 1 and other provisions under the German Basic Law. The level of scrutiny when examining constitutionality is primarily determined on the basis of the principle of proportionality.

Susanne Lilian Gössl, Grundrechte und IPR – Von beidseitigem Desinteresse zu höflicher Aufmerksamkeit – und zu angeregtem Austausch? (Fundamental Rights and Private International Law: From Mutual Disinterest to Respectful Attention – and on to Animated Exchange?)

The relationship between German constitutional law and the field of conflict of laws has been discussed for decades, especially when decisions of the Constitutional Court (BVerfG) addressing private international law issues have been pending or published. The most recent occasion to reflect on this relationship is the decision of the BVerfG on the Act to Combat Child Marriages. Initially, German scholars had assumed that conflict of laws, as a value-neutral and merely technical body of law, was constitutionally irrelevant. Fundamental rights could – according to a first Constitutional Court decision – at most become relevant through the ordre public clause. Foreign law was subsequently upgraded by the widow’s pension decision, with the result that foreign rules can expand the scope of German fundamental rights. Ultimately, the BVerfG has affirmed that – like private law generally – private international law is bound to the German Constitution as part of the collective legal order and, furthermore, that it shapes the expression of constitutional guarantees in the German legal order. Nevertheless, many theoretically intriguing questions remain open, such as the character of foreign law in the jurisprudence of the Constitutional Court. These questions invite further inquiry and academic exchange.

Lars Viellechner, Die Anwendbarkeit der Grundrechte im Internationalen Privatrecht: Zur Methodik der Entscheidung des Bundesverfassungsgerichts über die Kinderehe (The Applicability of Fundamental Rights in Private International Law: On the Methodology of the Federal Constitutional Court’s Decision Regarding Child Marriage)

In its decision on the Act to Combat Child Marriages, the Federal Constitutional Court of Germany does not explicitly address the applicability of fundamental rights in private international law. It only considers some cross-border effects of the statute in the context of the proportionality test. According to its own earlier case law, however, it should have taken a position on this question. It could also have taken the opportunity to further develop a constitutional notion of conflict of laws, which equally shines through its decisions on the relationship between the Basic Law and both international law as well as European Union law. With resort to such a method, not only could it have clarified a question of principal significance regarding the relationship between fundamental rights and private international law, it might also have reached a different result in the present case.

Dagmar Coester-Waltjen, Die »Kinderehen«-Entscheidung des Bundesverfassungsgerichts: Welche Schlussfolgerungen ergeben sich für das internationale Eheschließungsrecht? (The Early Marriage Decision of the Federal Constitutional Court: What Does It Mean for International Marriage Law?)

The decision of the Federal Constitutional Court on art. 13 para. 3 no. 1 of the Introductory Act to the Civil Code raises many questions of private international law. Although the court ultimately held the provision unconstitutional, a welcome outcome, the decision also weakens the protection of legal statuses acquired under foreign law and allows the specifications and classifications of German internal law to apply as the standard even for marriages validly entered into under foreign law. The court roughly indicates a few possible ways to remedy the disproportionality of the provision, but it would seem difficult to implement these remedies in a way that both systematically conforms with the principles of private international law and does not create serious practical issues. As an alternative, the legislator should instead consider declaring all underage marriages, including the »earliest of the early«, to be voidable, because although the court’s ruling accepts their classification as non-marriages, it does not necessarily require such a harsh categorization. The article concludes by examining the potential of a fundamental reform of art. 13 of the Introductory Act to the Civil Code.

The table of contents in German is available here.

On 7 December 2023, The Council presidency and European Parliament representatives reached a provisional agreement on a reform of the Statute of the Court of Justice (last version available here).

Among other things, the reform will permit the transfer of jurisdiction over preliminary rulings to the General Court in specific areas, while the Court of Justice will retain jurisdiction over questions of principle, like those that involve interpretation of the Treaties or the Charter of Fundamental Rights.

The amendment, which is meant to reduce the workload of the Court of Justice and, therefore, to help her work more efficient, represents an essential step in the history of the institution as we know it.

The possibility of the handover is formally established by Article 256 TFEU, according to which:

3. The General Court shall have jurisdiction to hear and determine questions referred for a preliminary ruling under Article 267, in specific areas laid down by the Statute.

Where the General Court considers that the case requires a decision of principle likely to affect the unity or consistency of Union law, it may refer the case to the Court of Justice for a ruling.

Decisions given by the General Court on questions referred for a preliminary ruling may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Union law being affected.

It should be noted that the provision is not a novelty in EU law; it corresponds to former Article 225 TEC. In fact, the transfer to the General Court of partial jurisdiction to give preliminary rulings had already been considered in the past: at the end of last century, first, against the background of the Treaty of Amsterdam and the foreseen enlargement of the Union; and later, around 2015, in view of the increasing number of requests for preliminary rulings. However, in 2017, in a report submitted pursuant to Article 3(2) of Regulation (EU, Euratom) 2015/2422 of the European Parliament and of the Council amending Protocol No 3 on the Statute of the Court of Justice of the European Union, the Court of Justice had denied the need of a transfer at the time. On the other hand, it  simultaneously stressed that such standpoint “should not at all be understood as a definitive position on the question of the distribution of jurisdiction to give preliminary rulings between the Court of Justice and the General Court”. And, indeed, it has not been a definitive position.

For the readers of this blog the essential question is, of course, what the impact of the competences adjustment will be on preliminary rulings conerning PIL instruments.

The simple answer would be that, in principle, none is to be expected. The specific areas in which the General Court will be competent over preliminary rulings are: the common system of value added tax; excise duties; the Customs Code; the tariff classification of goods under the Combined Nomenclature; compensation and assistance to passengers in case of delay or cancellation of transport services or denied boarding; the scheme for greenhouse gas emission allowance trading. In other words, as of today requests on the instruments for judicial cooperation in civil and commercial matters are not affected, i.e., they fall under the scope of exclusive competence of the Court of Justice.

But this, of course, can change any moment in the future. More importantly, already now it is legitimate to have doubts as to the operation of the assignments to, respectively, the Court of Justice and the General Court: one single request for a preliminary ruling may concern at the same time one of the above-mentioned areas and another one; besides, requests related to one of those matters may as well entail questions of principle or of a cross-cutting nature.

More concretely, with an example: should the request for a preliminary ruling in, let’s say, case C‑213/18, or in case C-20/21, had been referred to Luxembourg after the transfer has been accomplished, who would have taken care?

In the Council’s press release of 7 December 2023 (the same date as the agreement’s) not much is said to shed light on this and similar questions. It is explained, though, that, ‘On the procedural aspects, the reform provides for a “one-stop-shop” mechanism, under which national judges will continue to address requests for preliminary rulings to the Court of Justice, which will in turn forward to the General Court the questions under its jurisdiction’.

This possibly means that a screening will take place at the level of the Court of Justice, and that a substantiated decision will be made there on the allocation of requests not squarely corresponding to one of the categories listed above. No doubt, for the sake of transparency the criteria for such allocation will also be communicated to the public at some point, likely soon. It is also to be expected (and it is hoped) that resources of the Court will be invested in making sure that, from the very beginning, they are consistently applied.

From 15 February 2024 to 17 February 2024, an early career research workshop will be held at Freie Universität Berlin to discuss works in progress on dispute resolution mechanisms and competence-competence in multi-level systems. The workshop invites young researchers working on related topics from all fields of legal research and is open to different methodological approaches to analyse the research questions. The workshop aims to generate a constructive and friendly atmosphere to test working hypotheses and discuss findings.
You can find further information in the call for abstracts here.

Important dates

Deadline for abstracts:                19 January 2024

Information on acceptance:       26 January 2024

Workshop:                                     15–17 February 2024

Applications and questions can be addressed to maren.vogel@fu-berlin.de

My thoughts on the Court of Appeal’s finding in Zubaydah v FCO are here. I am pleased to have played a role for claimant’s lawyers, pro bono, in the proceedings before the UK Supreme Court, which held today in Zubaydah (Respondent) v Foreign, Commonwealth and Development Office and others (Appellants).

The issue in the appeal is whether the law applicable under sections 11 and 12 of the Private International Law (Miscellaneous Provisions) Act 1995 (“PILA”) to torts alleged to have been committed by two of the UK’s security agencies  is the law of England and Wales or the law of each of the six countries in which the claimant alleges he was unlawfully detained and tortured by the CIA. The High Court had held for the latter, which follows from the generally applicable lex loci damni rule. The Court of Appeal reversed, holding for the former on the basis of the small window to displace the general rule and this finding has now been confirmed by the Supreme Court.

The relevant PILA sections read as follows

“11. Choice of applicable law: the general rule.

(1) The general rule is that the applicable law is the law of the country in which the events constituting the tort or delict in question occur.

(2) Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being—

(a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury;

(b) for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged; and

(c) in any other case, the law of the country in which the most significant element or elements of those events occurred.

(3) In this section “personal injury” includes disease or any impairment of physical or mental condition.”

“12. Choice of applicable law: displacement of general rule.

(1) If it appears, in all the circumstances, from a comparison of—

(a) the significance of the factors which connect a tort or delict with the country whose law would be the applicable law under the general rule; and

(b) the significance of any factors connecting the tort or delict with another country,

that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country, the general rule is displaced and the applicable law for determining those issues or that issue (as the case may be) is the law of that other country.

(2) The factors that may be taken into account as connecting a tort or delict with a country for the purposes of this section include, in particular, factors relating to the parties, to any of the events which constitute the tort or delict in question or to any of the circumstances or consequences of those events.”

Two background documents are of particular relevance: ‘LCR’ = the Law Commission Report December 1990; and ‘JCP’ =  the Joint Consultation Paper 1984. The LCR [2.6] ff had justified its proposal for amendment to the English prior rule of double actionability for torts, by suggesting it does away with 3 main challenges of the double actionability rule:

• • • its anomalous character (it was said to give too much weight to English and Scots law as lex fori, contrary to the UK’s general happiness to apply foreign law);
    • its injustice in terms of giving an advantage to the wrongdoer (the victim’s burden of proof under the double actionability rule is particularly heavy); and
    • the uncertainty and speculative implication NOT in the rule but in a relevant exception, Boys v Chaplin [1971] AC 356.

[54] The approach to be adopted when considering whether the general rule is displaced pursuant to section 12 was considered by the Court of Appeal in VTB Capital plc v Nutritek International Corpn [2012] EWCA Civ 808 and in current case Lord Lloyd-Jones and Lord Stephens for the majority [54] ff summarise the four principles that follow from that case.

Note that [62] the Supreme Court criticises parties’ agreement that the determination of the defendants’ appeal did not require any consideration of the potential application of section 14 PILA (the ordre public correction):

We consider that there is an artificiality about deciding which law governs the liability in tort of the UK Services without considering public policy considerations under section 14 of the PILA. Although, we express no view on the matter, there is scope for suggesting, for example, that on the presumed facts of this case, it is a constitutional imperative that the applicable law in relation to the tort of misfeasance in public office in relation to the acts and omissions of the UK Services should be the law of England and Wales. However, we have been presented with a preliminary issue on sections 11 and 12 of the PILA and must seek to address it solely on that basis. We conclude this part of the judgment by observing that, depending on the outcome of the appeal, it may be necessary for a court to consider the impact, if any, of section 14 of the PILA at a later stage of these proceedings.

[73] the Court of Appel was held to have been correct in rebuking the first instance judge for focusing too much on the role of the CIA

The required focus is on the torts committed by the defendants or those for whom they are responsible. Instead, the Court of Appeal considered, the judge had focused on the overall conduct of the CIA. In our view, there is force in this criticism.

[74] ff discusses the treatment by the first instance judge of factors relevant in displacing the locus damni general rule: (1) First, the claimant had no control over his location and in all probability no knowledge of it. (2) So far as the UK Services were concerned, the claimant’s location from time to time was irrelevant and may well have been unknown. (3) The claimant had been rendered to the Six Countries precisely because this would enable him to be detained and tortured outside the laws and legal systems of those countries.  The Supreme Court agrees with the Court of Appeal’s finding that the judge had wrongly applied the relevance of these factors. Those finding fault with the Supreme Court’s approach may find this too much of a factual analysis rather than a point of law I imagine (as indeed Lord Sales does to some degree in his dissent).

[80] the Court of Appeal itself is then held to have fallen short of the proper exercise in applying s12:

It seems to us, however, that the Court of Appeal has also fallen into error in relation to the required focus under section 12 of the PILA on the torts committed by the defendants. Section 11(1) provides that the general rule is concerned with “the country in which the events constituting the tort … in question occur”. Similarly, section 12 refers to “the significance of the factors which connect a tort … with the country whose law would be the applicable law under the general rule” and with “another country”. In our view, the Court of Appeal, in approaching the section 12 exercise, interpreted the scope of the relevant torts too narrowly in that it equated the torts in question with the conduct of the UK Services which is alleged to be wrongful.

Rather than conflating the conduct of the UK Services with the torts,

The Court of Appeal should have focused on the torts alleged against the UK Services for which the defendants are said to be vicariously responsible

leading [82] ff the SC itself completing the s12 exercise.

The significance of the connection between the torts and each of the Six Countries arising from the claimant’s detention there and the infliction of his injuries there is held to be massively reduced by the factors discussed in [92] ff:

reasonable expectations and involuntary presence [93];

the security services’ indifference as to where the claimant was held and them never expecting or intending to have their conduct judged by reference to the laws of the places where he was held [94];

the insulated environments within which claimant was held and where he could be denied any access to the local law (alleged to apply in Moziak fashion by the defendants) or recourse to local courts [95], countries which in effect were insulated form the courts [97];

the sheer number of black sites in which the claimant was held diminishes the significance of the law of any one of them, and moreover it would be impossible for him to establish where he sustained which injury [96];

[98] ff conversely, the strong factors connecting the torts to the UK:

the alleged vicarious liability of the UK Government [99];

the relevant acts and omissions of the UK Services in requesting information from the CIA were more likely than not to have taken place in England, and were likely committed by the UK Services for the perceived benefit of the United Kingdom [100]; and

the actions were taken by UK executive agencies acting in their official capacity in the purported exercise of powers conferred under the law of England and Wales [101].

Lord Sales dissented, pointing also to the Court of Appeal and the High Court simply disagreeing on the weight to be given to the various factors, and in his own analysis of those factors he reaches the conclusion that the Mozaik of the 6 laws should apply.

It is rare for an applicable law issue in tort to be discussed to such extent by the Supreme Court and the judgment carries great relevance.

Geert.

Illegal rendition, applicable law, displacement of the ordinary lex loci damni rule
More soon (and background here https://t.co/dYdGJILOJ2)
Pleased to have played a small (pro bono) role in the appeal with the SC. https://t.co/szromMgIQp

— Geert Van Calster (@GAVClaw) December 20, 2023

 

 

A new special issue of the University of Brasilia Law Journal is dedicated to the topic “Private International Law and Sustainable Development: Global and Latin American Perspectives”. The issue, co-edited by Véronica Ruiz Abou-Nigm and María Mercedes Albornoz, is based on contributions to a panel at the 15th conference of ASADIP in Asunción, Paraguay (2022), and contains some articles in Spanish, some in English. The issue is available as open access.

The European Group for Private International Law (GEDIP) has recently adopted a Position paper on the Proposal for a Council Regulation in matters of Parenthood.

The Group welcomes the EU’s intention to legislate in this field, since parenthood is a status from which persons derive numerous rights and obligations.  However, the Group is of the opinion that there are important shortcomings in the Proposal due to the narrow perspective taken and an insufficient consideration of the legal complexities concerning parenthood in cross-border situations. It therefore encourages a reconsideration of the Proposal in the light of its observations.

The readers of the blog are aware of the proposal for a Directive on the protection of persons who engage in public participation from manifestly unfounded or abusive court proceedings, also known as strategic lawsuits against public participation (SLAPPs).

After the political agreement reached at Council level and the European Parliament’s negotiating position, the negotiators of the Parliament and of the Council reached on 30 November 2023 a provisional political agreement on the text to be adopted. The agreement is expected to be formally approved by the Council and the European Parliament at a later stage.

The text of the deal, made accessible here, features various innovations, including the following.

Minimum Requirements

The text resulting from the political agreement now makes clear that the Directive lays down minimum rules, thus enabling the Member States to adopt or maintain provisions that are more favourable to persons engaging in public participation, including national provisions that establish more effective procedural safeguards. The implementation of the Directive should not serve to justify any regression in relation to the level of protection that already exists in each Member State.

Public Participation

Public participation is more broadly defined.

It should mean any statement, activity or preparatory, supporting or assisting action directly linked thereto, by a natural or legal person expressed or carried out in the exercise of fundamental rights.

Future public interest is included, referring to the fact that a matter might not yet be of public interest, but could become so, once the public becomes aware of it, for example by means of a publication.

Such activities should directly concern a specific act of public participation or be based on a contractual link between the actual target of SLAPP and the person providing the preparatory, supporting or assisting activity. Bringing claims not against a journalist or a human rights defender but against the internet platform on which they publish their work or against the company that prints a text or a shop that sells the text can be an effective way of silencing public participation, as without such services opinions cannot be published and thus cannot influence public debate.

Matter of Public Interest

The notion of a matter of public interest is clarified in more detail.

It should include matters relevant to the enjoyment of fundamental rights.

Activities of a natural or legal person who is a public figure should also be considered as matters of public interest since the public may legitimately take an interest in them.

In addition, matters under consideration by a legislative, executive or judicial body or any other official proceedings can be examples of matters of public interest.

Finally, the Directive text provides under Recital 19b for many cases where a matter of public interest is at stake.

Abusive Court Proceedings

The description of when court proceedings can be considered abusive is reworked and better described.

They typically involve litigation tactics deployed by the claimant and used in bad faith including but not limited to the choice of jurisdiction, relying on one or more fully or partially unfounded claims, making excessive claims, the use of delaying strategies or discontinuing cases at a later stage of the proceedings, initiating multiple proceedings on similar matters, incurring disproportionate costs for the defendant in the proceedings. The past conduct of the claimant and, in particular, any history of legal intimidation should also be considered when determining whether the court proceedings are abusive in nature. Those litigation tactics, which are often combined with various forms of intimidation, harassment or threats before or during the proceedings, are used by the claimant for purposes other than gaining access to justice or genuinely exercising a right and aim to achieve a chilling effect on public participation in the matter at stake.

Claims made in abusive court proceedings can be either fully or partially unfounded. This means that a claim does not necessarily have to be completely unfounded for the proceedings to be considered abusive. For example, even a minor violation of personality rights that could give rise to a modest claim for compensation under the applicable law can still be abusive, if a manifestly excessive amount or remedy is claimed. On the other hand, if the claimant in court proceedings pursues claims that are founded, such proceedings should not be regarded as abusive for the purposes of the Directive.

Scope

Few express indications have been added.

The Directive shall apply to matters of a civil or commercial nature with cross-border implications entertained in civil proceedings, including interim and precautionary measures and counteractions, entertained in civil proceedings, whatever the nature of the court or tribunal.

Then, it shall not apply to criminal matters or arbitration and shall be without prejudice to criminal procedural law.

Matters with Cross-border Implications

The cross-border implications element has been revised.

According to the text, a matter is considered to have cross-border implications unless both parties are domiciled in the same Member State as the court seised and all other elements relevant to the situation are located only in that Member State. Domicile shall be determined in accordance with the Brussels I bis Regulation.

Common Rules on Procedural Safeguards

Article 5a, devoted to the accelerated treatment of applications for safeguards, has been added.

Member States shall ensure that applications for security and early dismissal of manifestly unfounded claims are treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Member States shall ensure that applications for remedies against abusive court proceedings may also be treated in an accelerated manner, where possible, in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Early Dismissal of Manifestly Unfounded Claims

In relation to the early dismissal, Member States shall ensure that courts and tribunals may dismiss, after appropriate examination, claims against public participation as manifestly unfounded at the earliest possible stage, in accordance with national law. In addition, Member States shall ensure that an application for early dismissal is treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case and the right to an effective remedy and the right to a fair trial.

The burden of proof and substantiation of claims, under Article 12, have been specified. The burden of proving that the claim is well founded rests on the claimant who brought the action. Member States shall ensure that where a defendant has applied for early dismissal, it shall be for the claimant to substantiate the claim in order to enable the court to assess whether it is not manifestly unfounded.

Finally, Member States shall ensure that a decision granting early dismissal is subject to an appeal.

Remedies Against Abusive Court Proceedings

The award of costs, under Article 14, is clarified. Member States shall ensure that a claimant who has brought abusive court proceedings against public participation can be ordered to bear all types of costs of the proceedings, available under national law including the full costs of legal representation incurred by the defendant, unless such costs are excessive. Where national law does not guarantee the award in full of the costs of legal representation beyond statutory fee tables, Member States shall ensure that such costs are fully covered, unless they are excessive, by other means available under national law.

Article 15, specifically devoted to compensation of damages, has been deleted. It provided a natural or legal person who has suffered harm as a result of a SLAPP case to be capable of claim and to obtain full compensation for that harm. The text resulting from the political agreement loses this (express) provision.

Article 16, dedicated to penalties, has been amended including other equally effective appropriate measures. Member States shall ensure that courts or tribunals seised of SLAPPs cases may impose effective, proportionate and dissuasive penalties or other equally effective appropriate measures, including the payment of compensation for damages or the publication of the court decision, where provided for in national law, on the party who brought those proceedings.

Protection against Third-country Judgments

This chapter has been affected by significant changes relevant from a private international law perspective.

In relation to grounds for refusal of recognition and enforcement of a third-country judgment, the reference to public policy, which was used in the original text version proposed by the Commission, has been deleted. According to the current text version, Member States shall ensure that the recognition and enforcement of a third-country judgment in court proceedings against public participation by a natural or legal person domiciled in a Member State is refused if those proceedings are considered manifestly unfounded or abusive according to the law of the Member State in which recognition or enforcement is sought.

Article 18, on jurisdiction for actions related to third-country proceedings, provides as follows. Member States shall ensure that, where abusive court proceedings against public participation have been brought by a claimant domiciled outside the Union in a court or tribunal of a third country against a natural or legal person domiciled in a Member State, that person may seek, in the courts or tribunals of the place where he is domiciled, compensation for the damages and the costs incurred in connection with the proceedings before the court or tribunal of the third country.

A paragraph 2 has been added, providing that Member States may limit the exercise of the jurisdiction while proceedings are still pending in the third country.

Relations with other Private International Law Instruments

In final provisions, under Article 19, the Directive shall not affect the application of bilateral and multilateral conventions and agreements between a third State and the Union or a Member State concluded before the date of entry into force of the Directive. Recital 33a refers, as example, to the 2007 Lugano Convention, in line with Article 351 of the TFEU.

Under Recital 33b it is specified that any future review of the rules under the Brussels I bis and the Rome II Regulations should assess also the SLAPP-specific aspects of the rules on jurisdiction and applicable law.

The European Court of Human Rights (ECtHR) held in a judgment of 26 October 2023 (Application no. 32662/20) that a Hungarian child abduction procedure under the 1980 Hague Child Abduction Convention (1980 Hague Convention) was not compatible with the family rights set out in Article 8 of the European Convention on Human Rights (ECHR). The Court reiterated that national return procedures should be managed in such a way as to ensure that a swift return of the child is possible, with both parents being granted contact with the child as the procedure unfolds.

Background

A couple consisting of a Spanish father and a Hungarian mother had two children. One was born in Hungary in 2013 and one was born in Spain in 2015. After a family holiday to a third country in January 2017, the father returned alone to Spain, whereas the mother and children went to Hungary. While in Hungary, the mother told the father that she had decided to settle permanently in Hungary with the children.

In February 2017, the father filed an application for the return of the children to Spain based on the 1980 Hague Convention. Courts in three instances, including the Hungarian Supreme Court, held that the father was right and that the children should return to Spain. However, in February 2018, the Hungarian Constitutional Court suspended the enforcement of the return of the children. In a decision given in November 2018, the enforcement was cancelled by the Constitutional Court, which held that the mother’s right to a fair trial had been violated, as the children’s interests had not been considered.

After the ruling of the Constitutional Court, the return order was again a matter for the Hungarian courts. This time, a psychological evaluation of the children was presented as evidence. Again, the Hungarian courts in three instances held that the children should return to Spain. The Constitutional Court was still not satisfied and quashed this return order as well. A third round of procedures for the same return was initiated in the district court in 2020. Shortly before that, Hungarian courts recognized a Spanish judgment giving the father custody of the children under Regulation (EU) No 2201/2003 (Brussels II bis).

During the almost four-year procedure, the father had applied to see his children on numerous occasions, but Hungarian authorities permitted only twelve encounters. Ultimately, during a parental visit in 2020, the father took the children back to Spain.

At the ECtHR in Strasbourg, the father complained about the Hungarian procedure. He claimed that the return procedure had violated his family rights under Article 8 of the ECHR, as the application of the Hague Convention was wrongful, both in that he had not been granted parental contact during the procedure and in the Hungarian non-enforcement of the Spanish decisions.

Judgment

The ECtHR held initially in its judgment that a State respondent to an international child abduction has family rights obligations towards the parent seeking the return of the child. That State must, inter alia, examine applications under the 1980 Hague Convention “with a view to ensuring […] prompt reunion.”

In this regard, the ECtHR held that the Hungarian procedure had been too slow, lasting nearly four years. Specifically, the Court noted that if Hungarian authorities found it necessary to consider psychological expertise in return matters, they should have organised the procedure in such a way that the expertise in question could be obtained without undue delays.

Lastly, the Court also held that the Hungarian authorities had not taken any measures to enforce the Spanish court decisions on custody rights.

Therefore, the Court held that Hungary had violated the father’s family rights under Article 8.

Comment

The judgment of the ECtHR comes as no surprise in that it emphasizes that the sturdy principle of prompt return under the 1980 Hague Convention is protected also under Article 8 of the ECHR.

One must remember that the passage of time in child abduction cases will always favor the abducting parent. Eventually, it will not be in the best interest of the child to be returned to a parent with whom it no longer has any relationship. After all, the 1980 Hague Convention is in place to avoid that an abductor is rewarded with custody. From a private international law perspective, custody rights must be dealt with separately, in “normal” custody procedures.

The New Zealand Court of Appeal has just released a judgment on the cross-border application of New Zealand consumer and fair trading legislation (Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 647). The Court held that local consumer legislation – in the form of the Consumer Guarantees Act 1993 (CGA) – applies to foreign manufacturers. It also clarified that fair trading legislation – in the form of the Fair Trading Act 1986 (FTA) – applies to representations made to recipients in New Zealand. The decision is of particular interest to New Zealand consumers and manufacturers of goods that are supplied in New Zealand, as well as traders advertising their products to New Zealanders. More generally, the judgment provides a useful analysis of the interrelationship between statutory interpretation and choice of law, and lends weight to the proposition that product liability is properly governed by the law of the place of supply (or injury).

 

 Facts

The defendant, 3A Composites GmbH (3AC), was a German manufacturer of a cladding product installed on the plaintiffs’ buildings. The plaintiffs alleged that the product was highly flammable because it contained aluminium composite panels with a polyethylene core. Panels of this kind were the main reason why the fire at Grenfell Tower in London had spread so rapidly. The plaintiffs brought proceedings against 3AC, as well as the importers and distributors of the cladding in New Zealand. They alleged negligence, breach of s 6 of the CGA and breaches of the FTA. In response, 3AC protested the New Zealand court’s jurisdiction.

 

The High Court

The High Court upheld 3AC’s protest in relation to the CGA and FTA causes of action, on the basis that they fell outside of the territorial scope of the Acts: Body Corporate Number DP 91535 v 3A Composites GmbH [2022] NZHC 985, [2022] NZCCLR 4.

In relation to the CGA, the plaintiffs claimed that 3AC’s cladding was not of acceptable quality in accordance with the statutory guarantees in the CGA. Section 6 of the CGA provides for a right of redress against a manufacturer where goods supplied to a consumer are not of acceptable quality. The Court held that the Act did not apply to 3AC because it was a foreign manufacturer.

Referring to the Supreme Court’s decision in Poynter v Commerce Commission [2010] NZSC 38, [2010] 3 NZLR 300, the Court concluded that there was “neither express language nor any necessary implication which would lead the Court to interpret the CGA as being intended to have extraterritorial reach” (at [45]). The CGA therefore did not apply to an overseas manufacturer like 3AC that did not have a presence in New Zealand (see [38]-[47]).  The Court pointed to the definition of the term “manufacturer” in s 2 of the Act, which includes “a person that imports or distributes” goods that are manufactured outside New Zealand where the foreign manufacturer does not have an ordinary place of business in New Zealand. According to the Court, the clear inference to be drawn from this definition was that the Act did not have extraterritorial effect, because otherwise there would be no need to impose the obligations of the manufacturer’s statutory guarantee upon a New Zealand-based importer of goods (at [42]-[44]).

In relation to the FTA, the plaintiffs argued that 3AC had engaged in misleading or deceptive conduct by making available promotional material on their website that was intended to have global reach and that specifically contemplated New Zealand consumers (at [107]), and by authorising publication of promotional and technical information through their exclusive distributor in New Zealand (at [108]).

The Court held that the Act did not apply to 3AC’s allegedly misleading or deceptive conduct. It referred to s 3(1), headed “application of Act to conduct outside New Zealand”. The section extends the Act to conduct outside New Zealand by any person carrying on business in New Zealand to the extent that such conduct relates to the supply of goods in New Zealand. It was clear that 3AC had never engaged in carrying on business in New Zealand (at [117]). Moreover, there was no evidence to show that 3AC had made any representations to the plaintiffs relating to supply of their product in New Zealand (at [120]).

 

The Court of Appeal

The Court of Appeal, in a judgment by Goddard J, disagreed with the High Court’s conclusion that the claims fell outside of the territorial scope of the Acts. In relation to the CGA, it held that the Act applies “to an overseas manufacturer of goods that are supplied in New Zealand” (at [61]). This interpretation was “consistent with [the] text and purpose [of the Act]”, with “broader principles of private international law” and “with the approach adopted by the Australian courts to corresponding legislation” (at [61]). The relevant “territorial connecting factor”, or “hinge”, was the supply of goods in New Zealand (at [64], [65]).

As a matter of statutory interpretation, the Court of Appeal considered that “[o]n its face the Act applies, and there is no good reason to read it more narrowly” (at [76]). The concept of extraterritoriality was irrelevant in this context (at [70]). In particular, it was inaccurate “to describe the availability of relief in respect of a supply of goods to a consumer in New Zealand against a person outside New Zealand as an ‘extraterritorial’ application of the Act” (at [64]). The Act imposed strict liability, in relation to the products supplied in New Zealand to New Zealand consumers, and did not depend on the conduct of the supplier or manufacturer in New Zealand (at [71]).

In relation to the definition of “manufacturer”, the Court accepted that its purpose was to provide a New Zealand consumer with the option of seeking redress against an importer or distributor of goods manufactured outside New Zealand, in light of the potential difficulties faced by a consumer when suing an overseas manufacturer (at [66]). However, this did not mean that the manufacturer should be excused from liability (at [67]). The Act essentially provided for concurrent liability on the part of the overseas manufacturer and the New Zealand-based importer or distributor (at [69]), which was consistent “with the focus of the legislation on providing meaningful remedies to consumers of goods supplied in New Zealand” (at [69]). This approach was consistent with Australian authority (at [72]).

The application of “established private international law choice of law principles” led to the same result (at [77]). For claims in tort in relation to goods that have caused personal injury, the relevant choice of law rules favoured application of the law of the place of injury. Applying the law of the place of manufacture “would produce the unsatisfactory result of different products on the same shelf” being governed by different liability regimes (at [77], referring to McGougan v DePuy International Ltd [2018] NZCA 91, [2018] 2 NZLR 916 at [59]). There was “broad support for a similar approach to product liability claims (at [77]). Thus, there was “a strong argument that the applicable law, where a consumer brings a product liability claim in respect of goods supplied in New Zealand, is New Zealand law” (at [78]), which included the Consumer Guarantees Act.

The Court left open the question whether a different approach might apply where an overseas manufacturer did not know its products were being sold in New Zealand, or where it had consciously chosen not to sell its products here. These concerns did not arise on the facts of the case, so the Court did not need to determine “whether such a result would go beyond the purpose of the Act, or whether private international law principles provide a solution to any apparent injustice in such a case” (at [80]).

In relation to the FTA, the Court accepted that the relevant issue was whether 3AC engaged in conduct in New Zealand that breached the Act, so the fact that s 3 (on the extraterritorial application of the Act) did not apply was not decisive (at [103]). The Act applied to false and misleading conduct in New Zealand, “regardless of where the defendant is incorporated and where it carries on business” (at [102], referring to Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754). This included communications made from outside New Zealand to recipients in New Zealand.

 

Comment

The Court of Appeal’s judgment is to be welcomed. The principle of extraterritoriality has been responsible for causing considerable confusion in the past (see Maria Hook “Does New Zealand consumer legislation apply to a claim against a foreign manufacturer?” [2022] NZLJ 201). In treating the principle as irrelevant to this case, the Court laid the path for a clear and nuanced analysis of the issues. Not only did the Court refuse to adopt the lens of extraterritoriality, it was also prepared to rely on general choice of law rules, in addition to statutory interpretation, and treated both as relevant.

Courts often approach statutory interpretation and choice of law as exclusive methodologies. At the outset of the case, they identify whether the issue is one of statutory interpretation or choice of law, and then proceed with their analysis accordingly. Here, in relation to the CGA, the Court of Appeal applied both methodologies and found that the relevant connecting factor was the place of supply, regardless of which methodology applied. The implication seemed to be that there was a shared rationale for the place of supply as the most appropriate connecting factor and that, if the two methodologies had pointed in different directions, this might have been evidence that things had gone awry.

In this way, the judgment lends support to the proposition that statutory interpretation and choice of law are not engaged in any kind of “competition”. There is a reason why product liability is typically governed by the law of the place of injury (or the place of supply, where liability is for pure economic loss). Why should this reason not also be determinative for claims under the CGA specifically? The more difficult question would be whether a statute should be given a wider scope of application than it would receive under bilateral choice of law. But here, too, it would be unhelpful to think of the conflict of laws as a kind of jilted discipline. The goal should be to identify the cross-border considerations that bear upon the scope of the particular statute, when compared to the rationale underpinning the choice of law rule that would otherwise be applicable. How else can a court decide whether a statute is intended to fall outside of general rules of choice of law? Statutory interpretation, and characterisation, are necessarily intertwined. It remains to be seen whether future courts will build on the Court of Appeal’s judgment to engage more explicitly with the interrelationship between statutory interpretation and choice of law.

On Tuesday, January 9, 2024, the Hamburg Max Planck Institute will host its 40th monthly virtual workshop Current Research in Private International Law at 11:00-12:30 (CET). Jie (Jeanne) Huang (University of Sydney Law School) will speak, in English, about the topic

 

Can Private Parties Contract out of the Hague Service Convention?

Treaties are concluded by states but often impose rights and obligations upon private parties. Can private parties contract out of a treaty including states’ oppositions without explicit permissions granted by the treaty? The complexity between private parties, states, and treaties are reflected in recent cases and unsettled debates regarding the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters of November 15, 1965 (“HSC”). The HSC contains a large number of oppositions imposed by 62 Member States including China, India, Singapore, and Germany. Combining public and private international law, this paper aims to explore the correlative relationship between party autonomy and state sovereignty in treaty applications using the HSC as an example.

The presentation will be followed by open discussion. All are welcome. More information and sign-up here.

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

Fabian Kratzlmeier (Chicago) has accepted the invitation of the editors of the blog to present his recent book, titled ‘Die Grenzüberschreitende Unternehmensrestrukturierung im Europäischen Rechtsrahmen’ (Cross-border corporate restructuring and European private international law), published by Mohr Siebeck.

Reorganizing viable firms (instead of liquidating them) has been the state of the art in U.S. bankruptcy law for decades now, and it has become increasingly popular throughout Europe in recent years. This trend is reflected in legislative activities, such as the repeated reform efforts to the German bankruptcy code aiming at rescuing profitable, but over-indebted firms within the traditional insolvency procedure. It is also evidenced by practical patterns, most notably (not only) German companies using foreign restructuring instruments, in particular the English Scheme of Arrangement, to amend their financing structure while continuing trading in the 2010s. Even then – more than a decade ago – the wide-reaching impacts of such cross-border restructurings were heavily discussed in bankruptcy and private international law scholarship by some scholars, showing the (not only political) brisance of private international law in the area of restructuring law.

Whenever the earnings of a debtor company no longer cover its financial obligations, the creditors (and the shareholders) share a common interest in maximizing the pool of distributable assets. Where the continuation of the business under the old legal entity promises a higher present value compared to the liquidation of the debtor – be it piecemeal or through a business sale – economic logic demands a legal framework to resolve the underlying collective action problem. It is therefore the task of a modern insolvency and restructuring law to provide the parties involved with an appropriate set of rules that facilitates negotiations in order to adjust the debtor’s liabilities to the prospective earnings of the company (e.g. through debt reductions, deferrals or debt-equity-swaps).

In terms of the (continental) European landscape, the Restructuring Directive 2019 (hereinafter “Directive”) has set new standards in restructuring law, requiring Member States to reform and, in many cases, modernize their insolvency and restructuring laws. It mandates all Member States to maintain preventive restructuring instruments, enabling financially distressed companies to temporarily protect their business assets against collection or enforcement actions, and providing a majority voting scheme in order to cram down (groups of) dissenting creditors. In accordance with its minimum harmonization concept, however, the Directive leaves the Member States with a large number of choices and deviation options. Thus, the national restructuring frameworks differ widely from one another in some key aspects; e.g. regarding the entry threshold (the extent of financial distress required to access), the duration and scope of the moratorium, and the conditions and limits to the cram down mechanism (in particular as to group formation and priorities), to name but a few. The legal and economic positions of the various groups of stakeholders – and, consequently, their negotiating power in the immanent struggle over the distribution of going concern value – depend to a large extent on the jurisdiction in which the reorganization takes place and what options for action the local restructuring law offers to the respective stakeholders. It is obvious, that decision makers, when looking for suitable restructuring options, will not limit themselves to their home state’s reorganization tools, but explore foreign instruments as well, as past experiences with the English Scheme of Arrangement have proven before. As long as there is legal certainty, i.e. the reorganization is likely to be recognized by the relevant (i.e. asset-intensive) jurisdictions, decision makers have in incentive to choose the restructuring location that best serves their interests, ultimately resulting in a regulatory competition between national restructuring regimes throughout the EU. Private international law, in this context, regulates this competition by limiting (or unlocking) such choice of foreign insolvency and restructuring venues (and their respective laws). Against this background, the present study undertakes to comprehensively review and, building on its findings, further develop the legal framework for cross-border corporate restructurings within Europe, presenting a solution that is both coherent with existing European legislation, and consistent with the underlying principles of European insolvency law.

There is, however, another reason why further research in this area is desperately needed: Thanks to the ever-growing integration of the internal market and, thus, the establishment of international trade relations and supply chains, purely nationally operating companies (other than micro-enterprises) have long become the exception. It does not take much to make a national restructuring case an international one, i.e. the cross-border element does not need to amount to a foreign branch or similarly consolidated business structures. A foreign creditor or a third-party debtor based abroad suffices to turn a national company into an international restructuring case. Hence, the minimum harmonization of the substantive law by the Directive alone is not going to achieve the underlying goal set by the Union legislator, that is to provide all European companies with access to effective and efficient restructuring instruments. Rather, in cases with cross-border exposure, the question inevitably arises as to whether the financial crisis can be overcome in a single procedure – hauling all (including foreign) affected parties into one procedure and having it recognized across all (relevant) jurisdictions – or whether several procedures are necessary in order to implement a sustainable restructuring of the company and thus safe the going concern value.

Unfortunately, this need for international coordination and harmonization of cross-border corporate reorganizations, arising from the very conceptual nature of collective proceedings, has been hardly taken into account by the legislator when drafting the Directive. There are only three recitals (12 to 14) dealing with these issues in the first place, and even they contain only rudimentary (and hardly expedient) considerations regarding the relationship between the Directive and existing regulations in European private international law. In particular, they reference the European Regulation on Insolvency Proceedings (EIR) as well as the center of main interest (COMI), which is of paramount importance to the current international insolvency regime, to which it serves as the central connecting factor determining both jurisdiction and applicable law. In terms of (reliable) conclusions regarding the classification of the new restructuring frameworks and their integration into the existing private international law framework, however, the recitals only provide limited guidance. The recitals make it clear, though, that at least some of the proceedings created in transposing the Directive (i.e. those that are to be publicly announced) shall be subject to the EIR and, therefore, be included in the latter’s Annex A.

The study takes this as its starting point to demonstrate that the EIR provides a tailor-made set of rules for public proceedings, providing clear and (for the most part) fitting rules on international jurisdiction and applicable law while also guaranteeing EU-wide recognition. At the same time, however, there are some drawbacks in the EIR’s application to restructuring proceedings mainly resulting in setbacks to the collectivization mechanism aimed at on a substantive level. These issues, including rights in rem and secondary proceedings, are discussed in depth, and appropriate solutions are presented both de lege lata and de lege ferenda.

Turing to confidential restructuring frameworks, to which the recitals are silent, the scholarly debate is still evolving. Due to their private nature, they are increasingly popular in practice. At least in part motivated by the onsetting regulatory competition in the field, therefore, many Member States (including Germany, the Netherlands, and Austria) opted for a dual transposition enacting both a public and a private alternative. Since confidential procedures will not be included in Annex A and, thus, will prima facie remain outside the scope of the EIR, there are considerable hurdles to overcome in order to embed such procedures into the existing European private international law framework. First and foremost, the so-called bankruptcy clause enshrined in Art. 1 (2)(b) Brussels I bis Regulation challenges the integration into the existing secondary law altogether. A closer look at the issue reveals, however, that this provision excludes only those procedures, which qualify as “insolvency proceedings” under Art. 1 EIR, regardless of whether such proceeding is included in Annex A. Turning to international jurisdiction, the study is building on the controversy and the different propositions surrounding international jurisdiction to restructure foreign companies under an English scheme of arrangement. In that context, the arguments previously put forward in support of Art. 8 (1) (jurisdiction wherever at least one affected party has her domicile) and 24 (2) Brussels I-bis Regulation (jurisdiction at the place of the registered seat) are discussed and assessed as to their validity with regard to the new restructuring instruments. After all, the Directive differs in key respects from its English blueprint, and, thanks to its EU-law origin, requires special considerations concerning the coherence of (secondary) European law. Ultimately, the study finds that neither of the international jurisdiction rules provided for in the Brussels-I-bis Regulation are well-suited (or even practicable) for collective procedures such as the preventive restructuring instruments under the Directive. Therefore, it calls for a concentration of restructurings at the debtor’s COMI, which is in line with (and, upon a detailed examination, even envisioned by) both the EIR, and the Directive itself. In this respect, the study, using state-of-the-art European Union law methodology, extracts a coherent and consistent private international law framework for confidential restructuring procedures, centered at the debtor’s COMI, and recognized throughout the EU. At the same time, it proposes legislative amendments to the current system to clarify the private international law rules on cross-border restructurings – both for parties involved and Member States experiencing competitive pressure – and to improve the (few) inadequacies under the current legal regime.

Overall, the study reveals that the applicable law concentrates – public and confidential – restructuring proceedings at the debtor’s COMI on the one hand, but on the other hand also guarantees EU-wide recognition of the restructuring results achieved. The collectivization of creditors and shareholders implemented – in substantive terms – by the Directive, thus, continues on the level of private international law, enabling the continuation of viable companies even in a cross-border context.

The European Group for Private International Law (GEDIP) has recently adopted a position paper on the proposal for a Council Regulation in matters of Parenthood.

The Group welcomes that the EU intends to legislate in this field, since parenthood is a status from which persons derive numerous rights and obligations.

However, the Group is of the opinion that there are important shortcomings in the proposal due to the narrow perspective taken and an insufficient consideration of the legal complexities concerning parenthood in cross-border situations. It therefore encourages a reconsideration of the proposal in the light of its observations.