Droit international général

On 26 July 2019, the Greek Supreme Court gave a ruling involving the interpretation of the Brussels II bis Regulation in a matter of parental responsibility (Ruling No 927 of 2019).

The facts

A. and B., of Greek and German nationality, respectively, an unmarried couple, had two children. They all lived in Greece.

The mother, B., seised the Court of First Instance of Rhodes seeking the exclusive custody of the children as well as an interim measure to the same effect. In the resulting summary proceedings, A., the father, declared that he would not object, as long as the court ordered that the children keep their habitual residence in Rhodes. B. stated that she did not intend to relocate the children.

The Court provisionally granted exclusive custody to B., without issuing any order regarding the habitual residence of the children. A hearing on the merits was scheduled to take place a few months later.

Shortly after the above prrovisional order was issued, B. informed A. that she planned to spend Christmas with the children at her parents’ house in Germany.

A. formally notified B. that he disagreed. Nevertheless, B. travelled to Germany with the children. Although she had bought return tickets, she eventually decided to stay in Germany with the children.

As a reaction, A. sought the revocation of the provisional measures on custody, as well as the return of the children to Greece and an order granting him exclusive custody rights. A.’s efforts were initially successful. The provisional measures were revoked, and custody was provisionally granted to him.

B., however, challenged the jurisdiction of the Greek courts over A.’s action for custody.

The Rhodes Court of First Instance considered the challenge to be founded and accordingly declined jurisdiction. A.’s appeal against this decision was dismissed by the Dodecanese Court of Appeal.

The Supreme Court’s ruling

The case reached the Supreme Court. The latter began by considering Article 8 of the Brussels II bis Regulation, whereby, as a general rule, jurisdiction over matters of parental responsibility lies with the courts of the Member State where the child habitually resides. The Supreme Court held that relocation while proceedings are pending does not affect the jurisdiction of the court seised.

The Supreme Court agreed with the Court of Appeal that the practical difficulties that relocation may entail in particular for the parent not exercising custody rights have no bearing as such on the issue of jurisdiction, which depends solely on the habitual residence of the children at the time the court is seised. Thus, once the habitual residence of a child has been transferred from one Member State to another, the courts of the latter State come to have jurisdiction, unless the transfer amounts to a wrongful removal or retention, as defined in Article 2(11) of the Regulation.

Based on the foregoing, the Supreme Court confirmed the ruling of the Court of Appeal. Specifically, it held that when A. filed his action (in February 2015), the children were already habitually resident in Germany. Actually, the names of the children had been entered in the register of the population of the town of Kevelaer in February 2014; they benefited from a health insurance there since April 2014; they attended a kindergarten there; they had developed strong relations with B.’s relatives living nearby. The Court also noted that the children, who were also German nationals, spoke German, whereas they barely spoke any Greek.

The Supreme Court held that no wrongful removal had taken place in the circumstances, stressing that, at the time when the transfer took place, B. had temporary exclusive custody rights. Against this backdrop, relocation was lawful, and A. should have rather pursued a re-arrangement of his contact rights with the children.

The statement made by B. in the course of the summary proceedings that she did not intend to relocate the children was not considered to be decisive. Given that B. had exclusive custody rights over children, she was entitled, pursuant to Article 2(9) of the Regulation, to determine the children’s place of residence.

With respect to Article 10, on jurisdiction in case of child abduction, the Supreme Court found that no wrongful retention had taken place after the revocation of the provisional measure, which granted A. exclusive custody rights. The Court noted that A. had not sought to have the new provisional measures recognised and enforced in Germany, and held that A.’s assertion that the latter measures are enforceable without any procedure being required is erroneous. The revocation of a provisional measure, the Court held, is not a judgment for the purposes of Article 11(8) of the Brussels II bis Regulation. Actually, at that time, the children had already an established place of residence in Germany.

The final line of defence for A. was Article 12(3) of the Brussels II bis Regulation. This provides that the courts of a Member State have jurisdiction over parental responsibility in proceedings unrelated to a matrimonial matter where: (a) the child has a substantial connection with that Member State, namely by virtue of the fact that one of the holders of parental responsibility is habitually resident in that Member State, (b) their jurisdiction ‘has been accepted expressly or otherwise in an unequivocal manner by all the parties to the proceedings at the time the court is seised and is in the best interests of the child’.

In particular, A. argued that B. had implicitly accepted the jurisdiction of Greek courts by initially filing an action before the Court of First Instance of Rhodes.

The Supreme Court dismissed the argument. First, it stated that, by filing her initial petition, B. could not be deemed to have tacitly accepted the jurisdiction of Greek courts for any ensuing proceedings. Secondly, the Court noted that the initial action had been brought prior to the relocation of B. and the children in Germany, adding that B. had then asked for her action in Greece to be discontinued. Finally, the Court observed that no tacit acceptance could be deemed to exist, since B. expressly challenged the jurisdiction of Greek courts as a result of A.’s action.

In Bournemouth, Christchurch and Poole Council v KC et al [2020] EWFC 20, Dancey J at  62 ff is the first UK judge to my knowledge to discuss the implications of the UK’s separation from the EU’s civil procedure /justice and home affairs agenda, particularly in the transition period. It includes a discussion of the UK’s Brexit (EU Exit) Regulations 2019/2003, reg 3, and the European Commission notice on transition provisions.

The care proceedings concern W, a girl aged 9, nearly 10. W’s parents, who were married, are Polish nationals and W was born there. Following the separation of the parents in Poland in April 2016, contested contact proceedings there resulted in an order providing that W live with the mother with contact to the father. The father’s parental responsibility was limited to decisions about medical treatment and education. Following the breakdown of the father’s contact with W, the mother brought her to the UK in June 2018 where they have remained since. That was done without the father’s agreement, although he was aware the mother planned to relocate and acquiesced once the move had taken place. The mother did not tell the father of her and W’s location within the UK.

The legal framework therefore is Brussels IIa, Regulation 2201/2003. Dancey J at 63 concedes that by reg 8 of 2019/2003, dealing with saving/transitional provisions, the UK’s revocation from Brussels IIa does not apply to proceedings before a court in a Member State seised before 31 December 2020. However he then refers to the EC Notice to Stakeholders: Withdrawal of the United Kingdom and EU Rules in the Field of Civil Justice and Private International Law: 18/1/2019, and suggests it means that EU rules on recognition and enforcement will not apply to a UK judgment, even if the judgment was given, or enforcement proceedings started, before 1 January 2021 unless the judgment has been exequatured (declared enforceable by the courts of the Member State where recognition or enforcement is required) before 1 January 2021. Support for his opinion is found I suspect mostly in Heading 2.2 of that Notice.

At 66 Dancey J suggests in practice the consequence should not be too dramatic in the case at issue for ‘one or other of the parents should apply promptly in Poland for a declaration recognising this judgment and the order that will follow (exequaturing the judgment).’ That absence of real delay in the case at issue may well be true (it is confirmed by a letter from the Polish consulate) however the  implications are already clear and no surprise. Enforcement of UK judgments will be a lot less smooth post Brexit.

Geert.

Bru IIA Regulation
Incl 1st (?)) application of Jurisdiction, Judgments (Family) part of the #Brexit (EU Exit) Regulations 2019/2003, reg 3.
EC notice on transition provisions
Exequatur needed even if judgment was given, or enforcement proceedings started, before 1 January 2021. https://t.co/Ve8MKYzMdd

— Geert Van Calster (@GAVClaw) March 20, 2020

The European Law Institute‘s (ELI) members on 21 March 2020 approved the Report on the Protection of Adults in International Situations.

This report is the outcome of the work of a team of academics and professionals chaired by Pietro Franzina and Richard Frimston. It sets out the current legal framework on the protection of persons above 18 years old who are not in a position to protect their own insterests (due to an impairment or incapacity).

The Report acknowledges the importance in this field of the Hague Convention of 13 January 2000 on the International Protection of Adults and encourages further ratification of it. The Convention has been ratified by only nine EU Member States (and signed by an additional seven).

After investigating the institutional possiblities of EU action on this topic, the Report also calls for action, both legislative and non-legislative, to complement the Convention. Possible measures include providing a (limited) choice of juridisdiction and securing the effective circulation of private mandates.

The European Law Institute‘s (ELI) members on 21 March 2020 approved the Report on the Protection of Adults in International Situations.

This report is the outcome of the work of a team of academics and professionals chaired by Pietro Franzina and Richard Frimston. It sets out the current legal framework on the protection of persons above 18 years old who are not in a position to protect their own insterests (due to an impairment or incapacity).

The Report acknowledges the importance in this field of the Hague Convention of 13 January 2000 on the International Protection of Adults and encourages further ratification of it. The Convention has been ratified by only nine EU Member States (and signed by an additional seven).

After investigating the institutional possiblities of EU action on this topic, the Report also calls for action, both legislative and non-legislative, to complement the Convention. Possible measures include providing a (limited) choice of juridisdiction and securing the effective circulation of private mandates.

On 3 March 2020, the international chamber of the Paris Court of Appeal confirmed that French courts may issue an anti anti suit injunction against two US corporations which had obtained an anti suit injunction from a US court in a patent case.

When the Paris court of appeal delivered its judgment, the French anti anti suit injunction had already proven successful, as the motion for the anti suit injunction filed before the US court had been withdrawn in the meantime. The French higher court nevertheless addressed the issue and confirmed that the Paris first instance court had the power to grant the remedy.

Background

The dispute arose between, on the one hand, various companies of the Lenovo and Motorola groups and, on the other hand IPCom, a German company.  IPCom claims it owns various patents that Lenovo and Motorola use for manufacturing their devices. Lenovo and Motorola claim that IPCom did not offer them a license on appropriate terms and conditions (fair, reasonable and non discriminatory, or FRAND), and in particular that IPCom royalty demands violate these terms.

Initial Proceedings in California

In March 2019, Lenovo Inc. (‘Lenovo US’) and Motorola Mobility LLC (‘Motorola US’) sued IPCom before a US District in San Jose, California, for breach of contract, declaratory judgment, antitrust monopolization and declaratory judgment of non violation of certain U.S. patents. The suit was predicated on the allegation that IPCom failed to offer Lenovo and Motorola a license to its alleged standards essential patents (SEPs) relevant to the 2G, 3G and 4G cellular standards on FRAND terms and conditions.

IPCom challenged the jurisdiction of the U.S. court. It explained that it is a small company, employing six people only in Germany, and it argued that its contacts with the USA were not significant enough to justify the jurisdiction of a U.S. court under the Due Process jurisprudence of the U.S. Supreme Court.

In December 2019, the U.S. court accepted that the plaintiffs had failed to make a prima facie showing of personal jurisdiction over IPCom and thus limited discovery to the issue of personal jurisdiction.

Subsequent Proceedings in England

IPCom counterattacked in England, where it initiated proceedings against Lenovo UK and Motorola UK in July 2019. I understand that IPCom claims revolve around the allegation that it owns certain patents, and that these patents were infringed by the two UK defendants.

In September 2019, Lenovo US and Motorola US sought an anti suit injunction from the US court against IPCom and requested that the California court :

(1) enjoin IPCom from prosecuting the patent infringement action IPCom filed in the United Kingdom against Plaintiffs’ U.K. affiliates; and

(2) enjoin IPCom from instituting against Plaintiffs, Plaintiffs’ affiliates, or any of their customers any action alleging infringement of IPCom’s claimed 2G, 3G and/or 4G SEPs during the pendency of this action.

In November 2019, the London High Court issued an anti anti suit injunction against Lenovo UK and Motorola UK enjoining them from preventing the continuation of the English proceedings.

The French Injunctions

In October 2019, IPCom had also initiated proceedings in Paris, but this time against the Lenovo and Motorola US and French entities.

IPCom first initiated interim proceedings and sought injunctions against all the defendants. In November 2019, IPCom also initiated proceedings on the merits against the French subsidiaries only.

On November 8th, 2019, the Paris first instance court issued two anti anti suit injunctions.

The first was concerned with the existing US application. The French court ordered Lenovo US and Motorola US to withdraw their motion for an anti suit injunction in the California proceedings, insofar as such motion related to any judicial proceedings initiated by IPCom and alleging infringements of the French part of the European patent owned by IPCom, materialising by acts on French territory.

The second was a prospective anti anti suit injunction, whereby the court enjoined Lenovo US and Motorola US from initiating any such new proceedings (i.e. seeking an anti suit injunction), before any foreign court.

Both injunctions were to be sanctioned by a civil penalty (astreinte) of € 200 000 per day of non compliance (first injunction) or per instance of violation (second injunction).

Lenovo US and Motorola US moved to give notice of partial withdrawal of their motion in the U.S., in accordance with the French injunctions.

By a judgment of 3 March 2020, the Paris Court of Appeal confirmed the power to issue the first injunction. It held, however, that the second injunction was too broad (no limitation of either its temporal or territorial scope), and did not meet the requirements for issuing interim remedies, as the goal was neither to stop actual harm, nor to prevent imminent harm.

The judgment focused on whether the general requirements for granting interim relief were met. French courts have general power under the Code of civil procedure (Article 835) to issue interim measures for the purpose of stopping manifestly illegal harm. The court found that the harm was to be enjoined by the U.S. court from initiating proceedings alleging infringement of the patent in France, and that the harm was manifestly illegal, because it violated the exclusive jurisdiction of French courts and two fundamental rights of IPCom: its right to (intellectual) property and its right to a fair trial.

The Power of French Courts to Issue Anti Anti Suit Injunctions

French courts were long hostile to anti suit injunctions. In 2004, the French supreme court for private and criminal matters (Cour de cassation) had ruled in an obiter dictum that anti suit injunctions violate French public policy as the affect the jurisdiction of French courts. However, in 2009, the Cour de cassation qualified this ruling, by holding that foreign anti suit injunctions would not violate French public policy where their aim was solely to sanction a pre-existing contractual obligation, i.e. a jurisdiction clause (in favour of a foreign court).

After the 2009 decision, they were some attempts to go one step further and seek anti-suit injunctions from French courts. As far as I know, they all failed (see, e.g., the Vivendi case in 2010).

In Lenovo, the issue was obviously different, as the parties sought a remedy against anti suit injunctions. While the court’s decision is quite remarkable, the judgment did not attempt to lay down general principles. It is a narrow decision, focused on the general requirements for granting interim measures.

Yet, two series of reasons should be more specifically underlined.

First, the court insisted that French courts had exclusive jurisdiction to rule on the infringements to a French patent (here, the French part of a European patent). This suggests that it would be more difficult to obtain a similar remedy in a contractual or tort case, where no court could seriously claim exclusive jurisdiction (except in presence of a jurisdiction clause).

Secondly, the court ruled that the U.S. anti suit injunction would violate several fundamental rights of the German plaintiff. The first was the right to property under Protocol 1 of the European Convention of Human Rights.  The second was the right to a fair trial under Article 6 ECHR, and more precisely, it seems, the right of access to court. The court explained that, because the patent of the plaintiff was to expire shortly, the anti suit injunction would, in effect, deprive IPCom from its IP right. The court added that the plaintiff could not be protected in the meantime by the U.S. court, since the French court had exclusive jurisdiction. This last proposition is not fully convincing. It is not because French courts consider their jurisdiction as exclusive that a U.S. court would necessarily decline jurisdiction.

Ultimately, Lenovo was probably a good case for issuing such an injunction. The  jurisdiction of the French court was strong, while there were already signs that the foreign court might decline jurisdiction.

In case you are looking for something to read while many parts of the world are under some form of lockdown, you may be pleased to learn that the conference volume of the 2nd German Conference for Young Scholars in PIL, which took place at University of Würzburg in 2019, has recently been published. It includes nine contributions by young researchers, including two English papers, on the conference theme of PIL between Tradition and Innovation as well as a keynote address by Professor Jürgen Basedow. Further information can be found on the publisher’s website.

What is more, the date and theme for the next iteration of the conference have just been announced. The conference will take place on 18 and 19 March 2021 (when Corona lockdowns will hopefully be no more than a distant memory) at the Max Planck Institute for Comparative and International Private Law in Hamburg and explore the theme of PIL for a better world: Vision – Reality – Aberration?. Further information can be found in the German and English Save-the-Date announcements as well as on the conference website.

Christoph Schmon is the author of The Interconnection of the EU Regulations Brussels I Recast and Rome I – Jurisdiction and Law, published by Springer.

The publisher’s blurb reads as follows.

This book deals with the interconnection between the Brussels I Recast and Rome I Regulations and addresses the question of uniform interpretation. A consistent understanding of scope and provisions is suggested by the preamble of the Rome I Regulation. Without doubt, it is fair to presume that the same terms bear the same meaning throughout the Regulations. The author takes a closer look at the Regulations’ systems, guiding principles, and their balance of flexibility and legal certainty. He starts from the premise that such analysis should prove particularly rewarding as both legal acts have their specific DNA: The Brussels I Recast Regulation has a procedural focus when it governs the allocation of jurisdiction and the free circulation of judgments. The multilateral rules under the Rome I Regulation, by contrast, are animated by conflict of laws methods and focus on the delimitation of legal systems.

See here for further information.

In case you are looking for something to read while many parts of the world are under some form of lockdown, you may be pleased to learn that the conference volume of the 2nd German Conference for Young Scholars in PIL, which took place at University of Würzburg in 2019, has recently been published. It includes nine contributions by young researchers, including two English papers, on the conference theme of PIL between Tradition and Innovation as well as a keynote address by Professor Jürgen Basedow. Further information can be found on the publisher’s website.

What is more, the date and theme for the next iteration of the conference have just been announced. The conference will take place on 18 and 19 March 2021 (when Corona lockdowns will hopefully be no more than a distant memory) at the Max Planck Institute for Comparative and International Private Law in Hamburg and explore the theme of PIL for a better world: Vision – Reality – Aberration?. Further information can be found in the German and English Save-the-Date announcements as well as on the conference website.

On 27 February 2020 the Court of Justice of the European Union (CJEU) gave its ruling in BALTA, a case concerning the enforceability of choice-of-court clauses in insurance contracts (an English translation of the judgment was not available at the time of publishing this post).

The Court had addressed a similar issue in 2005, in the case of Société financière et industrielle du Peloux. It held then that a jurisdiction clause in an insurance contract cannot be relied upon against an insured who has not expressly subscribed to that clause and is domiciled in a State other than that of the policy-holder and the insurer.

BALTA concerned an insurance contract covering ‘large risks’ within the meaning of the Solvency II Directive. In principle, the provisions in the Brussels I bis Regulation aimed to protect the weaker party, including the provisions that restrict the enforceability of choice-of-court agreements, do not apply to such disputes as relate to those contracts (see Article 15(5) and Article 16(5) of the Regulation).

The Court of Justice ruled that this leeway shall not be permitted where the insured is not the policyholder and is not a qualified professional in the insurance sector.

Facts

The case concerned a dispute between a Latvian insurance company and a Lithuanian security company. The latter had sued the insurance company in Lithuania for compensation under a ‘large risks’ insurance contract that the defendant had concluded with a Latvian company holding the shares of the security company. The insurance company challenged the jurisdiction of the seised court on the basis of a clause in the insurance contract which conferred jurisdiction on the courts of Latvia.

As regards matters of insurance, the Brussels I bis Regulation provides for a special exception for disputes concerning contracts covering ‘large risks’. It is assumed that the parties to a ‘large risks’ insurance contract have significant and equivalent economic power and do not need the protection that is normally afforded by the Regulation to the weaker parties, including the insured. Prorogation of jurisdiction agreed upon by the parties to settle disputes is, accordingly, then fully allowed. However, in the present case, the insured was not the policyholder and had not expressly subscribed to the clause (which the Court reworded as not having agreed with the clause: see para. 25).

The Issue at stake and the Court’s answer

The Lithuanian court asked the Court whether, in the described circumstances, the insured is entitled to claim the protection provided for under the Brussels I bis Regulation. The Court answered in the affirmative, on the ground that the insured was not a qualified insurance professional. Accordingly, the choice of court was not enforceable against him.

The court’s Reasoning

The Court elaborated in its reasoning on the specific protection granted to insured parties, beside that of policyholders, under the Brussels I bis Regulation, especially pursuant to Article 11(1)(b). The Court observed that derogation for ‘large risks’ insurance contracts should be limited to policyholders, when the insured has not expressly subscribed to the clause. Although the latter statement had already emerged in the Court’s case law (notably in Société financière et industrielle du Peloux), the exact scope of the ‘large risks’ derogation remained uncertain. How should the significance of a third party insured bargaining power be evaluated? The question is critical as it is on that single basis that Article 16(5) of Brussels I bis Regulation may be set aside.

According to the Court, the ‘large risks’ derogation only apply to contracting parties and shall not be extended, in principle, to any insured third party (para. 41 of the judgment). While refusing a case-by-case analysis, the Court stated that the protective provisions in matters relating to insurance should be restricted to parties in need of protection. This would not be the case, in particular, of professionals in the insurance sector.

It is however not clear what other situations could be relevant. According to the Court, the security company may benefit from the protective provisions of the Brussels I bis Regulation in matters relating to insurance. Surprisingly, the Court does not take into consideration the legal relationship between the policyholder (i.e., the mother company in the case at issue) and the insured (i.e., its subsidiary) to assess the applicability of the ‘large risks’ derogation. This will not be without operational implications for European undertakings with activities in multiple markets.

Marion Ho-Dac, of the Polytechnic University of Hauts-de-France, has joined the team of editors of this blog. Check her first post here!

Thank you Ennio Piovesani for signalling and reviewing one of the first conflicts-specific developments on the Corona /Covid 19 landscape.

In an effort to safeguard the economic position of the travel sector, the Italian Government by decree has essentially frozen the travel sector’s statutory duty to reimburse travellers whose package travel has become impossible due to the pandemic. Ennio reports that the decree refers specifically to Article 9 Rome I’s overriding mandatory law provisions (earlier applied in Unamar), (in his translation): ‘“The provisions of the present article constitute overriding mandatory provisions within the meaning of Article 17 of Law of 31 May 1995, No. 218 [“Italian PIL Act”] [5, 6] and of Article 9 of Regulation (EU) No. 593/2008 of the European Parliament and of the Council, of 17 June 2008 [“Rome 1 Regulation”]”.

Ennio signals and important issue: how much leeway may be given to Member States to push their own definition of the concept of ‘lois de police’ /overriding mandatory law in light of the CJEU definition in Joined Cases C-369/96 and C-376/96 Arblade. In Brussels Ia of course the CJEU has pushed the concept of ordre public in a limited direction. Lois de police however are different from ordre public and Rome I is not Brussels Ia, and I am therefore not so pessimistic as Ennio when it comes to leaving a lot of discretion to Member States. What to me looks a touch more problematic is the relation with the package travel Directive 2015/2302 which applies to many of the travel arrangements concerned and which is the source of many of the protections for travellers.

No doubt to be continued.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8.3.

 

A quick note on Kenyon v Secretary of State for Housing Communities & Local Government et al [2020] EWCA Civ 302 in which Coulson J checks planning consent ia against the requirements of the EU Environmental Impact Assessment- EIA Directive 2011/92. Of particular interest is his application of the Wednesbury judicial review test.

At 12: ‘A decision as to whether a proposed development is or is not likely to have significant effects on the environment can only be struck down on Wednesbury grounds’. ‘Wednesbury unreasonableness‘ is akin to CJEU standard of judicial review. Diplock J formulate it later as an administrative decision being annulled only if it was ‘So outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.’ The grounds in Wednesbury are very akin to the CJEU grounds: annulment will follow only if (well summarised by Wiki):

• in making the decision, the defendant took into account factors that ought not to have been taken into account, or
• the defendant failed to take into account factors that ought to have been taken into account, or
• the decision was so unreasonable that no reasonable authority would ever consider imposing it.

Applied at issue at 63 ff to the precautionary principle, applicant’s argument that ‘inevitable air pollution caused by the development’ must be taken into account, fails. at 67: ‘In circumstances where there was no doubt in the mind of the relevant decision-maker, there is no room for the precautionary principle to operate.’ (Clearly and in applying all Wednesbury principles, that absence of doubt must have followed from the right information having been taken into account).

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff.

 

Environmental Impact Assessment #EIA, consideration ia of Directive 2011/92.
Argument based on the precautionary principle fails: 'inevitable air pollution' caused by a planned development does not suffice to trigger the principle.
(Wednesbury judicial review principles). https://t.co/jCa8r4FLJA

— Geert Van Calster (@GAVClaw) March 5, 2020

The readers of this blog may have noticed that very little has been published by the Court of Justice lately. Actually, a message was posted on 19 March 2020 on the website of the Court, reading as follows:

Owing to the unprecedented health crisis that we are currently experiencing, the Court of Justice is obliged temporarily to change its working arrangements.

Judicial activity continues, but priority is of course given to those cases that are particularly urgent (urgent proceedings, expedited proceedings and interim proceedings).

Procedural time limits for instituting proceedings and lodging appeals continue to run and parties are required to comply with those time limits, without prejudice to the possible application of the second paragraph of Article 45 of the Protocol on the Statute of the Court of Justice of the European Union.

By contrast, the time limits prescribed in on-going proceedings – with the exception of the abovementioned proceedings that are particularly urgent – are extended by one month with effect from today. (…)

Hearings that are listed between now and 3 April 2020 are adjourned until a later date (…).

It has also been decided the judgments and conclusions fixed during the week from 23 to 27 March 2020 will be the subject of a hearing on 26 March 2020. In both cases, the judgments will be read by the President, and the conclusions by the Chief Advocate General.

The AG’s Opinion in C-249/19, JE, which was scheduled for 24 March 2020, will therefore be published two days later.

Saugmandsgaard Øe’s Opinion in C-186/19 , Supreme, will wait until April.

The remaining Court activity in matters relating to private international law remains as foreseen.

State immunity in global COVID-19 pandemic: Alters, et. al. v People’s Republic of China, et. al.

By Zheng Sophia Tang and Zhengxin Huo

1. Background

Four American citizens and a company filed the class-action against Chinese government for damages suffered as the result of the COVID-19 pandemic. None of the named plaintiffs were infected by the COVID-19 but they suffered financial loss due to the outbreak. The defendants include the People’s Republic of China, National Health Commission of PRC, Ministry of Emergency Management of PRC, Ministry of Civil Affairs of PRC, Government of Hubei Province and Government of the City of Wuhan. The plaintiff argued that Chinese government knew COVID-19 was dangerous and capable of causing a pandemic yet covered it up for their economic self-interest and caused injury and incalculable harm to the plaintiffs. (here)

2. State Immunity and US Courts’ Jurisdiction

The Defendant is a sovereign state and enjoys immunity from jurisdiction of other countries. Most countries, like the U.S., adopt the restrictive immunity approach, and apply exception to the immunity of a state when the disputed state’s act, for example, relates to commercial activities or commercial assets, or constitutes tort. The Foreign Sovereign Immunities Act (FSIA) of 1976 provides the sole basis for obtaining jurisdiction on an action against a foreign state. (Argentine Republic v Amerada Hess Shipping Corp, 488 US 428) Plaintiffs relied on the Foreign Sovereign Immunities Act (FSIA) of 1976, 28 U.S.C. §§1602 et seq. §1605 states:
“(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
…
(5) …money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—
(A) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or
(B)any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights;”

This is not the first time for China to be sued in the US court under §1605(a)(5) of the FSIA (for example, see Youming Jin et al., v Ministry of State Security et al., 475 F.Supp. 2d 54 (2007); Jin v Ministry of State Security, 557 F.Supp. 2d 131 (2008); Walters v Industrial and Commercial Bank of China, 651 F.2d 280 (2011)), but given the impact of COVID-19 this case probably is the most influential one. The purpose of this provision is to provide the victim the right to claim damages against a foreign state for tortious activities that may be legalised by the foreign law. The U.S. court thus will apply the local law to interpret this provision. Some crucial concepts, such as “tortious act” and “discretionary function”, are interpreted by the relevant US law. (Doe v Federal Democratic Republic of Ethiopia, 189 F.Supp. 3d 6 (2016)) However, since the FSIA is a unilateral domestic statute with clear impact in the foreign sovereign and international comity, it is inappropriate to apply the U.S. law, as the national law of a state of equal status, to determine if the foreign state has committed tort. This approach impliedly grants the U.S. and U.S. law the superior position over foreign states and foreign law. If the FSIA aims to protect humanity and basic rights of individuals that are universally recognised and protected, an international law standard instead of U.S. one should be more appropriate.

Anyway, although the U.S. has adopted the restrictive immunity approach and the U.S. standard to protect the tort victim against foreign government, this exception is applied with a high threshold, making the jurisdiction hurdle difficult to cross. Firstly, the alleged tort or omission must occur in the U.S. The Supreme Court in Argentine Republic v Amerada Hess Shipping, 488 US 428 (1989) articulated the “entire tort” rule, holding that the non-commercial tort exception “covers only torts occurring within the territorial jurisdiction of the United States” (Argentine v Amerada, 441) “Entire tort” means only when both tort action and damage occur in the US, jurisdiction may be asserted. (Cabiri v Government of Ghana, 165 F.3d 193 (2d Cir. 1999) Even if the damage caused by COVID-19 occurred in the U.S., the alleged tort conduct of Chinese government were conducted exclusively out of the territory of the U.S. Arguably, the Supreme Court did not consider the situation where tort actions abroad may causing damages in the US in its 1989 judgment. However, there is no authority support extension of jurisdiction to cross-border tort.

Secondly, pursuant to the common law on tort, the plaintiffs should prove the defendants had a duty of care, breached this duty, and the breach caused the foreseeable harm. Chinese government undoubtedly owes the duty of care to Chinese citizens and residents. Does Chinese government owe any duty to non-residents? Such a duty cannot be found in Chinese domestic law. Relevant duties may be found in international conventions. Art 12 of the International Covenant on Economic, Social and Cultural Rights states a state member should recognise the right of everyone to enjoy the highest standard of health and should take steps necessary for “(t)he prevention, treatment and control of epidemic, endemic, occupational and other diseases”. (Art 12(2)(c)) This duty applies to nationals and non-nationals alike. (Art 2(2)) However, none of the named plaintiffs in this suit were infected by COVID-19. The damage is sought for the damage to their commercial and business activities instead of physical or mental health. Furthermore, the International Health Regulation 2005 provides the state parties international obligations to prevent spreading of disease, such as thee duty to notify WHO of all events which may constitute a public health emergency of international concern within its territory within 24 hours of assessment of public health information (Art 6(1)) and sharing information (Art 8), but these obligations are not directly owed to individuals and cannot be directly enforced by individuals in ordinary courts. It is thus hard to argue Chinese government owes the plaintiff a duty of care.

Even if the plaintiffs seek damages for personal injury. It is difficult to prove China has breached the duty and the breach “caused” the COVID-19 outbreak in the US or other part of the world. Since COVID-19 is a new virus with many details remaining unknown, it takes time to truly understand the virus and be able to contain the spread of the disease. Therefore, when the first case of “a mysterious pneumonia” was discovered in Wuhan in December 2019, there was no enough knowledge and information to piece together an accurate picture of a yet-to-be-identified new virus, let alone to predict its risk of quick spreading and the later global pandemic. After the first case was identified on 31 December 2019, Wuhan airport started to screen passengers from 3 Jan 2020, WHO issued travel restriction instruction on 5 Jan, and COVID-19 was only identified on 7 Jan. On 8 Jan, the first suspected case was reported in Thailand. It shows that the Chinese government responded quickly and the virus spread out of China before enough information was collected to understand it. After the seriousness of COVID-19 was confirmed, China has adopted the most restrictive measures, including lockdown the City of Wuhan and put the whole country under full or partial quarantine to contain the disease, which was a critical move to slow the spread of the virus to the rest of the world by two or three weeks. It is hard to argue that Chinese government has breached the duty. It is even harder to claim that the conduct of Chinese government caused the outbreak in the US. US confirmed the first case on 21 Jan, evacuated citizens out of Wuhan on 26 Jan and started visa travel ban on Chinese travellers on 8 Feb. Only 10 cases were confirmed in the US by 10 Feb. It suggests that the later outbreak in the US was not caused by the Chinese government. As of now, China is the only country in the whole world which has brought the COVID-19 pandemic back under control.

Finally, a foreign state does no loss immunity under §1605(a)(5) of the FSIA for discretionary conducts. The discretion shield aims to “prevent judicial ‘second-guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort. The exception … protects only governmental actions and decisions based on considerations of public policy.” (Berkovitz v US, 486 U.S. 531, 546-37) Discretion is assessed by a two-limb test. Firstly, if the defendant followed any statute, regulation, or policy specifically prescribing a course of action, the conduct was non-discretionary. Secondly, if, in the absence of regulatory guide, the defendant’s decision was grounded in social, economic, or political goals, such an action is deemed the exercise of discretion. (Berkovitz, 531) An exercise of power contrary to regulatory guidance is not shielded by the discretion exemption. (Doe v Ethiopia, 26) Measures adopted to prevent epidemic are largely discretion-based, which closely related to the local economy and culture.

3. Likely Response from China

As mentioned above, it is not the first case that China was sued before an American court; therefore, the likely response from China can be predicted. A general judgment is that the Chinese government will reiterate its position in case of need that it will accept no suit against it at a domestic American court, and China will not enter into appearance before the American court.

Unlike the U.S., China is one of the few countries that insist on absolute immunity approach. This has been clearly affirmed by the continuous assertion of absolute immunity by its central government in various occasions. (Russell Jackson et al. v People’s Republic of China, 794 F.2d 1490, 1494 (11th Cir. 1986); Memorandum sent by the Chinese Embassy in Washington, DC, in Morris v. People’s Republic of China, 478 F. Supp. 2d 561 (S.D.N.Y. 2007). It is worth mentioning that on 14 September2005, the then Chinese Foreign Minister signed the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property (not yet in force), which is understood by some observers to be a signal that China is switching to endorse the restrictive approach in relation to the application of the principle of state immunity. Nonetheless, it is still too early to conclude that China has abandoned the absolute doctrine, and has chosen to embrace the restrictive doctrine, insofar as the Standing Committee of the NPC has not ratified the United Nations Convention on Jurisdictional Immunities of States and Their Property so far, and there is no signal to suggest the NPC should do so in the foreseeable future.

In this light, it can be predicted that China will argue that it enjoys immunity from jurisdiction of domestic American court. To be more specific, if the U.S. District Court for the District of Southern Florida authorized the summons directed to the Defendant, China’s possible response may be analysed as follows, depending on specific means of the service of process.

Firstly, if counsel to the Plaintiffs submitted the summons to the Chinese government by mail, a common practice of American lawyers, the Chinese government may choose to ignore it. Service in United States federal and state courts on foreign sovereigns and their agencies and instrumentalities is governed primarily by the FSIA. Since there is no special agreement for service of process between China and the U.S., pursuant to the FSIA, the Hague Service Convention to which both countries are party is the applicable instrument in this case. It is worth noticing that upon accession and ratification of the Hague Service Convention, China notified the Hague Conference on Private International Law of its objection, in accordance with Article 10, sub-paragraph (a) of the Convention, to service of process via postal channels; therefore, service by counsel to the Plaintiffs of a summons on the Defendant via mail will not be effective. Hence, ignoring the request advanced by counsel to the Plaintiffs is the most reasonable option for China.

Second, if the summons is served on the Chinese government through diplomatic channels, China will choose to turn it down by resorting to the Hague Service Convention. Pursuant to Article 13 of the Hague Service Convention, where a request for service complies with the terms of the present Convention, the State addressed may refuse to comply therewith only if it deems that compliance would infringe its sovereignty or security. As China insists on absolute immunity approach, it is logic that China will refuse the request advanced by counsel to the Plaintiffs and returned the documents by Article 13 of the Hague Service Convention.

Last, but not least, as the present development suggests that the U.S. government is blaming China for the spread ofthe COVID-19, accusing China of delaying America’s response, China would probably deem the lawsuit as a part of the American smear campaign to blame it. The possibility that China responds to this case via legal measures is further reduced. Therefore, we submit that there is a big chance that China may not enter into appearance before the court in Florida and would raise diplomatic protest.

State immunity in global COVID-19 pandemic: Alters, et. al. v People’s Republic of China, et. al.

By Zheng Tang and Zhengxin Huo

1. Background

Four American citizens and a company filed the class-action against Chinese government for damages suffered as the result of the COVID-19 pandemic. None of the named plaintiffs were infected by the COVID-19 but they suffered financial loss due to the outbreak. The defendants include the People’s Republic of China, National Health Commission of PRC, Ministry of Emergency Management of PRC, Ministry of Civil Affairs of PRC, Government of Hubei Province and Government of the City of Wuhan. The plaintiff argued that Chinese government knew COVID-19 was dangerous and capable of causing a pandemic yet covered it up for their economic self-interest and caused injury and incalculable harm to the plaintiffs (here)

2. State Immunity and US Courts’ Jurisdiction

The Defendant is a sovereign state and enjoys immunity from jurisdiction of other countries. Most countries, like the U.S., adopts the restrictive immunity approach, and applies exception to the immunity of a state when the disputed state act, for example, relates to commercial activities or commercial assets, or constitutes tort. The Foreign Sovereign Immunities Act (FSIA) of 1976 provides the sole basis for obtaining jurisdiction on an action against a foreign state. (Argentine Republic v Amerada Hess Shipping Corp, 488 US 428) Plaintiffs relied on the Foreign Sovereign Immunities Act (FSIA) of 1976, 28 U.S.C. §§1602 et seq. §1605 states:
“(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
…
(5) …money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—
(A)any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or
(B)any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights;”

This is not the first time for China to be sued in the US court under §1605(a)(5) of the FSIA (for example, see Youming Jin et al., v Ministry of State Security et al., 475 F.Supp. 2d 54 (2007); Jin v Ministry of State Security, 557 F.Supp. 2d 131 (2008); Walters v Industrial and Commercial Bank of China, 651 F.2d 280 (2011)), but given the impact of COVID-19 this case probably is the most influential one. The purpose of this provision is to provide the victim the right to claim damages against a foreign state for tortuous activities that may be legalised by the foreign law. The U.S. court thus will apply the local law to interpret this provision. Some crucial concepts, such as “tortuous act” and “discretionary function”, are interpreted by the relevant US law. (Doe v Federal Democratic Republic of Ethiopia, 189 F.Supp. 3d 6 (2016)) However, since the FSIA is a unilateral domestic statute with clear impact in the foreign sovereign, it is inappropriate to applying the U.S. law, as the national law of a state of equal status, to determine if the foreign state has committed tort. This approach impliedly grants the U.S. and U.S. law the superior position over foreign states and foreign law. If the FSIA aims to protect humanity and basic rights of individuals that are universally recognised and protected, an international law standard instead of U.S. one should be more appropriate.

Anyway, although the U.S. has adopted the restrictive immunity approach and the U.S. standard to protect the tort victim against foreign government, this exception is applied with the high threshold, making the jurisdiction hurdle difficult to cross. Firstly, the alleged tort or omission must occur in the U.S. The Supreme Court in Argentine Republic v Amerada Hess Shipping, 488 US 428 (1989) articulated the “entire tort” rule, holding that the non-commercial tort exception “covers only torts occurring within the territorial jurisdiction of the United States” (Argentine v Amerada, 441) “Entire tort” means only when both tort action and damage occur in the US, jurisdiction may be asserted. (Cabiri v Government of Ghana, 165 F.3d 193 (2d Cir. 1999) Even if the damage caused by COVID-19 occurred in the U.S., the alleged tort conduct of Chinese government were conducted exclusively out of the territory of the U.S.

Secondly, pursuant to the common law on tort, the plaintiffs should prove the defendants own a duty of care, have breached this duty, and the breach caused the foreseeable harm. Chinese government undoubtedly owes the duty of care to Chinese citizens and residents. Does Chinese government owe any duty to non-residents? Relevant duties can be found in international conventions. Art 12 of the International Covenant on Economic, Social and Cultural Rights states a state member should recognise the right of everyone to enjoy the highest standard of health and should take steps necessary for “(t)he prevention, treatment and control of epidemic, endemic, occupational and other diseases”. (Art 12(2)(c)) This duty applies to nationals and non-nationals alike. (Art 2(2)) However, none of the named plaintiffs in this suit were infected by COVID-19. The damage is sought for the damage to their commercial and business activities instead of physical or mental health. Furthermore, the International Health Regulation 2005 provides the state parties the obligation to notify WHO of all events which may constitute a public health emergency of international concern within its territory within 24 hours of assessment of public health information (Art 6(1)), sharing information (Art 8), etc., but these obligations are not directly owed to individuals and cannot be directly enforced by individuals in ordinary courts. It is thus hard to argue Chinese government owes the plaintiff a duty of care.

Even if the plaintiffs seek damages for personal injury. It is difficult to prove China has breached the duty and the breach “caused” the COVID-19 outbreak in the US or other part of the world. Since COVID-19 is a new virus with many details remaining unknown, it takes time to truly understand the virus and be able to contain the spread of the disease. Therefore, when the first case of “a mysterious pneumonia” was discovered in Wuhan in December 2019, there was no enough knowledge and information to piece together an accurate picture of a yet-to-be-identified new virus, let alone to predict its risk of quick spreading and the later global pandemic. After the first case was identified on 31 December 2019, Wuhan airport started to screen passengers from 3 Jan 2020, WHO issued travel restriction instruction on 5 Jan, and COVID-19 was only identified on 7 Jan. On 8 Jan, the first suspected case was reported in Thailand. It shows that the Chinese government responded quickly and the virus spread out of China before enough information was collected to understand it. After the seriousness of COVID-19 was confirmed, China has adopted the most restrictive measures, including lockdown the City of Wuhan and put the whole country under full or partial quarantine to contain the disease, which was a critical move to slow the spread of the virus to the rest of the world by two or three weeks. It is hard to argue that Chinese government has breached the duty. It is even harder to claim that the conduct of Chinese government caused the outbreak in the US. US confirmed the first case on 21 Jan, evacuated citizens out of Wuhan on 26 Jan and started visa travel ban on Chinese travellers on 8 Feb. Only 10 cases were confirmed in the US by 10 Feb. It suggests that the later outbreak in the US was not caused by the Chinese government. As of now, China is the only country in the whole world which has brought the COVID-19 pandemic back under control.

Finally, a foreign state is not liable for tort for discretionary conducts.The discretion shield aims to “prevent judicial ‘second-guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort. The exception … protects only governmental actions and decisions based on considerations of public policy.” (Berkovitz v US, 486 U.S. 531, 546-37) Discretion is assessed by a two-limb test. Firstly, if the defendant followed any statute, regulation, or policy specifically prescribing a course of action, the conduct was non-discretionary. Secondly, if, in the absence of regulatory guide, the defendant’s decision was grounded in social, economic, or political goals, such an action is deemed the exercise of discretion. (Berkovitz, 531) An exercise of power contrary to regulatory guidance is not shielded by the discretion exemption. (Doe v Ethiopia, 26) Measures adopted to prevent epidemic are largely discretion-based, which closely related to the local economy and culture.

3. Likely Response from China

As mentioned above, it is not the first case that China was sued before an American court; therefore, the likely response from China can be predicted. A general judgment is that the Chinese government will reiterate its position in case of need that it will accept no suit against it at a domestic American court, and China will not enter into appearance before the American court.

Unlike the U.S., China is one of the few countries that insist on absolute immunity approach. This has been clearly affirmed by the continuous assertion of absolute immunity by its central government in various occasions. (Russell Jackson et al. v People’s Republic of China, 794 F.2d 1490, 1494 (11th Cir. 1986); Memorandum sent by the Chinese Embassy in Washington, DC, in Morris v. People’s Republic of China, 478 F. Supp. 2d 561 (S.D.N.Y. 2007). A more strong, and persuasive, evidence is a legislative interpretation promulgated by the Standing Committee of the National People’s Congress (NPC). In the case of FG Hemisphere Associates v Democratic Republic of Congo([2009] 1 HKLRD 410; [2010] 2 HKLRD 66; (2011) 14 HKCFAR 95), the Court of Final Appeal of Hong Kong (CFA) decided that before deciding on the issue of state immunity, a reference had to be made to the Standing Committee of the NPC pursuant to Article 158 of the Basic Law of Hong Kong. The Standing Committee of NPC gave its answer by issuing a legislative interpretation on 26 August, clarifying that “state immunity concerns whether the courts of a state have jurisdiction over foreign states and their properties”, and “directly relates to the state’s foreign relations and international rights and obligations”. Thus, as the issue of sovereign immunity falls within the realm of foreign affairs, the Chinese central government has the power to decide on this issue, and Hong Kong courts are bound to follow the PRC’s practice in adopting the absolute approach. Consequently, the CFA formally disposed of the case by allowing the appeal by Congo on 8 September 2011. As the Standing Committee of the NPC is China’s national legislature, its legislative decision, therefore, has the legal status of national law.

It is worth mentioning that on 14 September 2005, the then Chinese Foreign Minister signed the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which is understood by some observers to be a signal that China is switching to endorse the restrictive approach in relation to the application of the principle of state immunity. Nonetheless, it is still too early to conclude that China has abandoned the absolute doctrine, and has chosen to embrace the restrictive doctrine, insofar as the Standing Committee of the NPC has not ratified the United Nations Convention on Jurisdictional Immunities of States and Their Property so far, and there is no signal to suggest the NPC should do so in the foreseeable future.

In this light, it can be predicted that China will argue that it enjoys immunity from jurisdiction of domestic American court. To be more specific, if the U.S. District Court for the District of Southern Florida authorized the summons directed to the Defendant, China’s possible response may be analysed as follows, depending on specific means of the service of process.

Firstly, if counsel to the Plaintiffs submitted the summons to the Chinese government by mail, a common practice of American lawyers, the Chinese government may choose to ignore it. Service in United States federal and state courts on foreign sovereigns and their agencies and instrumentalities is governed primarily by the FSIA. Since there is no special agreement for service of process between China and the U.S., pursuant to the FSIA, the Hague Service Convention to which both countries are party is the applicable instrument in this case. It is worth noticing that upon accession and ratification of the Hague Service Convention, China notified the Hague Conference on Private International Law of its objection, in accordance with Article 10, sub-paragraph (a) of the Convention, to service of process via postal channels; therefore, service by counsel to the Plaintiffs of a summons on the Defendant via mail will not be effective. Hence, ignoring the request advanced by counsel to the Plaintiffs is the most reasonable option for China.

Second, if the summons is served on the Chinese government through diplomatic channels, China will choose to turn it down by resorting to the Hague Service Convention. Pursuant to Article 13 of the Hague Service Convention, where a request for service complies with the terms of the present Convention, the State addressed may refuse to comply therewith only if it deems that compliance would infringe its sovereignty or security. As China insists on absolute immunity approach, it is logic that China will refuse the request advanced by counsel to the Plaintiffs and returned the documents by Article 13 of the Hague Service Convention.

Last, but not least, as the present development suggests that the U.S. government is blaming China for the spread of the COVID-19, accusing China of delaying America’s response, China would probably deem the lawsuit as a part of the American smear campaign to blame it. The possibility that China responds to this case via legal measures is further reduced. Therefore, we submit that there is a big chance that China may not enter into appearance before the court in Florida and would raise diplomatic protest.

State immunity in global COVID-19 pandemic: Alters, et. al. v People’s Republic of China, et. al.

By Zheng Sophia Tang and Zhengxin Huo

1. Background

Four American citizens and a company filed the class-action against Chinese government for damages suffered as the result of the COVID-19 pandemic. None of the named plaintiffs were infected by the COVID-19 but they suffered financial loss due to the outbreak. The defendants include the People’s Republic of China, National Health Commission of PRC, Ministry of Emergency Management of PRC, Ministry of Civil Affairs of PRC, Government of Hubei Province and Government of the City of Wuhan. The plaintiff argued that Chinese government knew COVID-19 was dangerous and capable of causing a pandemic yet covered it up for their economic self-interest and caused injury and incalculable harm to the plaintiffs. (here)

2. State Immunity and US Courts’ Jurisdiction

The Defendant is a sovereign state and enjoys immunity from jurisdiction of other countries. Most countries, like the U.S., adopt the restrictive immunity approach, and apply exception to the immunity of a state when the disputed state’s act, for example, relates to commercial activities or commercial assets, or constitutes tort. The Foreign Sovereign Immunities Act (FSIA) of 1976 provides the sole basis for obtaining jurisdiction on an action against a foreign state. (Argentine Republic v Amerada Hess Shipping Corp, 488 US 428) Plaintiffs relied on the Foreign Sovereign Immunities Act (FSIA) of 1976, 28 U.S.C. §§1602 et seq. §1605 states:
“(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
…
(5) …money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state or of any official or employee of that foreign state while acting within the scope of his office or employment; except this paragraph shall not apply to—
(A) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused, or
(B)any claim arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights;”

This is not the first time for China to be sued in the US court under §1605(a)(5) of the FSIA (for example, see Youming Jin et al., v Ministry of State Security et al., 475 F.Supp. 2d 54 (2007); Jin v Ministry of State Security, 557 F.Supp. 2d 131 (2008); Walters v Industrial and Commercial Bank of China, 651 F.2d 280 (2011)), but given the impact of COVID-19 this case probably is the most influential one. The purpose of this provision is to provide the victim the right to claim damages against a foreign state for tortious activities that may be legalised by the foreign law. The U.S. court thus will apply the local law to interpret this provision. Some crucial concepts, such as “tortious act” and “discretionary function”, are interpreted by the relevant US law. (Doe v Federal Democratic Republic of Ethiopia, 189 F.Supp. 3d 6 (2016)) However, since the FSIA is a unilateral domestic statute with clear impact in the foreign sovereign and international comity, it is inappropriate to apply the U.S. law, as the national law of a state of equal status, to determine if the foreign state has committed tort. This approach impliedly grants the U.S. and U.S. law the superior position over foreign states and foreign law. If the FSIA aims to protect humanity and basic rights of individuals that are universally recognised and protected, an international law standard instead of U.S. one should be more appropriate.

Anyway, although the U.S. has adopted the restrictive immunity approach and the U.S. standard to protect the tort victim against foreign government, this exception is applied with a high threshold, making the jurisdiction hurdle difficult to cross. Firstly, the alleged tort or omission must occur in the U.S. The Supreme Court in Argentine Republic v Amerada Hess Shipping, 488 US 428 (1989) articulated the “entire tort” rule, holding that the non-commercial tort exception “covers only torts occurring within the territorial jurisdiction of the United States” (Argentine v Amerada, 441) “Entire tort” means only when both tort action and damage occur in the US, jurisdiction may be asserted. (Cabiri v Government of Ghana, 165 F.3d 193 (2d Cir. 1999) Even if the damage caused by COVID-19 occurred in the U.S., the alleged tort conduct of Chinese government were conducted exclusively out of the territory of the U.S. Arguably, the Supreme Court did not consider the situation where tort actions abroad may causing damages in the US in its 1989 judgment. However, there is no authority support extension of jurisdiction to cross-border tort.

Secondly, pursuant to the common law on tort, the plaintiffs should prove the defendants had a duty of care, breached this duty, and the breach caused the foreseeable harm. Chinese government undoubtedly owes the duty of care to Chinese citizens and residents. Does Chinese government owe any duty to non-residents? Such a duty cannot be found in Chinese domestic law. Relevant duties may be found in international conventions. Art 12 of the International Covenant on Economic, Social and Cultural Rights states a state member should recognise the right of everyone to enjoy the highest standard of health and should take steps necessary for “(t)he prevention, treatment and control of epidemic, endemic, occupational and other diseases”. (Art 12(2)(c)) This duty applies to nationals and non-nationals alike. (Art 2(2)) However, none of the named plaintiffs in this suit were infected by COVID-19. The damage is sought for the damage to their commercial and business activities instead of physical or mental health. Furthermore, the International Health Regulation 2005 provides the state parties international obligations to prevent spreading of disease, such as thee duty to notify WHO of all events which may constitute a public health emergency of international concern within its territory within 24 hours of assessment of public health information (Art 6(1)) and sharing information (Art 8), but these obligations are not directly owed to individuals and cannot be directly enforced by individuals in ordinary courts. It is thus hard to argue Chinese government owes the plaintiff a duty of care.

Even if the plaintiffs seek damages for personal injury. It is difficult to prove China has breached the duty and the breach “caused” the COVID-19 outbreak in the US or other part of the world. Since COVID-19 is a new virus with many details remaining unknown, it takes time to truly understand the virus and be able to contain the spread of the disease. Therefore, when the first case of “a mysterious pneumonia” was discovered in Wuhan in December 2019, there was no enough knowledge and information to piece together an accurate picture of a yet-to-be-identified new virus, let alone to predict its risk of quick spreading and the later global pandemic. After the first case was identified on 31 December 2019, Wuhan airport started to screen passengers from 3 Jan 2020, WHO issued travel restriction instruction on 5 Jan, and COVID-19 was only identified on 7 Jan. On 8 Jan, the first suspected case was reported in Thailand. It shows that the Chinese government responded quickly and the virus spread out of China before enough information was collected to understand it. After the seriousness of COVID-19 was confirmed, China has adopted the most restrictive measures, including lockdown the City of Wuhan and put the whole country under full or partial quarantine to contain the disease, which was a critical move to slow the spread of the virus to the rest of the world by two or three weeks. It is hard to argue that Chinese government has breached the duty. It is even harder to claim that the conduct of Chinese government caused the outbreak in the US. US confirmed the first case on 21 Jan, evacuated citizens out of Wuhan on 26 Jan and started visa travel ban on Chinese travellers on 8 Feb. Only 10 cases were confirmed in the US by 10 Feb. It suggests that the later outbreak in the US was not caused by the Chinese government. As of now, China is the only country in the whole world which has brought the COVID-19 pandemic back under control.

Finally, a foreign state does no loss immunity under §1605(a)(5) of the FSIA for discretionary conducts. The discretion shield aims to “prevent judicial ‘second-guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort. The exception … protects only governmental actions and decisions based on considerations of public policy.” (Berkovitz v US, 486 U.S. 531, 546-37) Discretion is assessed by a two-limb test. Firstly, if the defendant followed any statute, regulation, or policy specifically prescribing a course of action, the conduct was non-discretionary. Secondly, if, in the absence of regulatory guide, the defendant’s decision was grounded in social, economic, or political goals, such an action is deemed the exercise of discretion. (Berkovitz, 531) An exercise of power contrary to regulatory guidance is not shielded by the discretion exemption. (Doe v Ethiopia, 26) Measures adopted to prevent epidemic are largely discretion-based, which closely related to the local economy and culture.

3. Likely Response from China

As mentioned above, it is not the first case that China was sued before an American court; therefore, the likely response from China can be predicted. A general judgment is that the Chinese government will reiterate its position in case of need that it will accept no suit against it at a domestic American court, and China will not enter into appearance before the American court.

Unlike the U.S., China is one of the few countries that insist on absolute immunity approach. This has been clearly affirmed by the continuous assertion of absolute immunity by its central government in various occasions. (Russell Jackson et al. v People’s Republic of China, 794 F.2d 1490, 1494 (11th Cir. 1986); Memorandum sent by the Chinese Embassy in Washington, DC, in Morris v. People’s Republic of China, 478 F. Supp. 2d 561 (S.D.N.Y. 2007). It is worth mentioning that on 14 September2005, the then Chinese Foreign Minister signed the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property (not yet in force), which is understood by some observers to be a signal that China is switching to endorse the restrictive approach in relation to the application of the principle of state immunity. Nonetheless, it is still too early to conclude that China has abandoned the absolute doctrine, and has chosen to embrace the restrictive doctrine, insofar as the Standing Committee of the NPC has not ratified the United Nations Convention on Jurisdictional Immunities of States and Their Property so far, and there is no signal to suggest the NPC should do so in the foreseeable future.

In this light, it can be predicted that China will argue that it enjoys immunity from jurisdiction of domestic American court. To be more specific, if the U.S. District Court for the District of Southern Florida authorized the summons directed to the Defendant, China’s possible response may be analysed as follows, depending on specific means of the service of process.

Firstly, if counsel to the Plaintiffs submitted the summons to the Chinese government by mail, a common practice of American lawyers, the Chinese government may choose to ignore it. Service in United States federal and state courts on foreign sovereigns and their agencies and instrumentalities is governed primarily by the FSIA. Since there is no special agreement for service of process between China and the U.S., pursuant to the FSIA, the Hague Service Convention to which both countries are party is the applicable instrument in this case. It is worth noticing that upon accession and ratification of the Hague Service Convention, China notified the Hague Conference on Private International Law of its objection, in accordance with Article 10, sub-paragraph (a) of the Convention, to service of process via postal channels; therefore, service by counsel to the Plaintiffs of a summons on the Defendant via mail will not be effective. Hence, ignoring the request advanced by counsel to the Plaintiffs is the most reasonable option for China.

Second, if the summons is served on the Chinese government through diplomatic channels, China will choose to turn it down by resorting to the Hague Service Convention. Pursuant to Article 13 of the Hague Service Convention, where a request for service complies with the terms of the present Convention, the State addressed may refuse to comply therewith only if it deems that compliance would infringe its sovereignty or security. As China insists on absolute immunity approach, it is logic that China will refuse the request advanced by counsel to the Plaintiffs and returned the documents by Article 13 of the Hague Service Convention.

Last, but not least, as the present development suggests that the U.S. government is blaming China for the spread ofthe COVID-19, accusing China of delaying America’s response, China would probably deem the lawsuit as a part of the American smear campaign to blame it. The possibility that China responds to this case via legal measures is further reduced. Therefore, we submit that there is a big chance that China may not enter into appearance before the court in Florida and would raise diplomatic protest.

The author of this post is Tomaso Ferando, Research Professor at the University of Antwerp. This is the third in a series of posts aimed to explore the impact of the coronavirus crisis on the phenomena of mobility and exchange that form the constituent elements of private international law, and to discuss the responses that private international law rules provide to the challenges posed by the crisis itself (see the previous contributions by Giovanni Chiapponi and Matthias Lehmann). The EAPIL blog welcomes further contributions on these topics, either in the form of comments to the published posts or in the form of guest posts. Those interested in proposing a guest post for publication are encouraged to contact the blog’s editorial team at blog@eapil.org.   

If we leave aside for a second the worrisome death toll that the covid-19 virus is claiming, there is no doubt that the spread of the virus from one wet market in Wuhan to more than 162 countries sheds light on interesting aspects of the contemporary world such as the existence of privileged patterns of human mobility that can facilitate the diffusion of diseases, the impact of aviation and daily commuting on greenhouse gases emissions, and the porosity of national borders (and people’s minds) when the threat is hidden in the lungs of businesspeople and tourists rather than in the lives of refugees and economic migrants.

Among economists, the ongoing pandemic has also triggered concerns with regards to the slowdown in production and consumption and the consequences that it is having on global growth’s projection, international trade and the performances of specific sectors such as manufacturing, energy, aviation and tourism. In the words of Japanese Finance Minister Taro Aso: “The spread of the new coronavirus is a public health crisis that could pose a serious risk to the macro economy through the halt in production activities, interruptions of people’s movement and cut-off of supply chains.”

The reliability of supply chains, i.e. the complex network of people, materials and logistic that makes the continuous provision of goods and services possible, is under the spotlight. In few weeks, the alleged efficiency of global networks of production has been compromised by the lockdowns of the Hubei province imposed by the Chinese Government, by the emergency measures adopted by countries all over the planet and by the change in patterns of consumption, with some goods that experienced unexpected high demand and other that lost any traction.

In a global scenario characterized by hyper-reliance on China as the factory of the world, the isolation of 15 Chinese provinces that was ordered at the end of January did not really matter because it concerned more than 57 million people, which is less than 1% of the global population. It mattered because that corner of the world is responsible for almost 90% of the Chinese GDP and 80% of the Chinese export: despite the global nature of the supply chains, it didn’t take long for such geographically defined measures to generate enormous repercussions on the global economy.

In the last weeks, Global Value Chains’ experts, governments, workers and citizens have been increasingly reflecting on the high level of risk and fragility that is intrinsic to overly integrated and interdependent value chains that rely on just-on-time worldwide logistic, depend on the supply of components provided by hundreds of intermediary producers located in different corners of the planet (although mainly in China) and are based on the uninterrupted coordination among all the parties involved – regulators, producers, traders, retailers and consumers alike. After the Japanese earthquake that suspended numerous production line, covid-19 seems to be the ultimate stress test for the global economic system: one that may leave the world economy – and global health – significantly changed.

For lawyers interested in the relationship between law, global capitalism and the production and allocation of value across jurisdictions and among people, there is no doubt that the speed of the economic contagion and the content of the regulatory responses aimed at mitigating or preventing the economic contagion provide a new opportunity to discuss the central role that law plays in constructing, weakening, preserving, oiling and – in some cases – destroying,  the multi-layered, multi-territorial, inter-dependent and extremely fragile expression of contemporary financial capitalism that is often described with the less controversial notion of Global Value Chains.

Why does law matter for Global Value Chains?

Although it may not be evident, law is central to the existence, functioning and distributive processes that are related to global value chains. This is certainly the case of contract law, which is often represented as the backbone of a complex system of horizontal interaction between suppliers and purchasers, the glue that keeps them together and that guarantees, through a system of standards, requirements, alternative dispute resolution mechanisms and public enforcement (and along with reputation and the possibility of long-term commercial relationships), that goods and services of the right kind are delivered on time – normally by the global brand company that consumers recognize. But this is not all. As we discuss in the Manifesto on The Role of Law in Global Value Chains, the link between law and supply chains go beyond the organization and management of their complexity and concerns the creation and allocation of value itself: property law, labor law, trade and investment law, intellectual property law, health and safety law, tort law, etc. not only determine commercial choices on where to source, the logistic routes to follow and the overall geographical footprint of the chain, but also who will be appropriating the value generated by the combination of labor, nature and capital.

When we think at the impact that the lockdown in the Hubei province had on a car manufacturer like Toyota, that relies on 2,192 distinct firms (both direct and indirect suppliers) to source and assemble the circa 30,000 pieces needed to produce a car, we can certainly think at the contractual implications of delays and breaches or, as suggested by the Digital Supply Chain Institute, at the way global brands may use contract to “develop an ecosystem of suppliers that have a commitment to meeting your requirements, even in the face of challenges,” an advice that we may interpret as the construction of legal obligations that overcome the economic and logistic difficulties of lockdowns. But this is not everything.

Another way of thinking about law, coronavirus and global value chains is to ask what legal structures have contributed to the construction of chains, like automotive, precision instruments and communication equipment, that are strongly dependent on the inputs originating from one country. Then, we would not talk about contracts, but about trade liberalization, the adoption of the TRIPs, labor and fiscal requirements, the non-internalization of environmental externalities in China or in the market of destination, the use of legislation to provide public subsidies to oil, and the whole set of legislative and regulatory forces that pushed production away from Europe and the United States and pulled it into China. From this perspective, law in its widest and most diverse meaning is one of the main reasons why the global economy is structured around supply chains and the health crisis has triggered a rapid economic contagion.

Moreover, law is central to the responses offered by governments across the world in their attempt to limit the impact of the economic contagion or improve their position in the supply chain by seizing a larger share of the – future and possible – pie (what is generally known as ‘upgrading’). For example, governments around the world may perceive the slowdown in Chinese production as an opportunity to provide financial and regulatory support the production sites capable of filling the current gap or to attract future investments by companies interested in diversifying their sourcing or in delocalizing away from a region where production is particularly exposed to health risks. Similarly, governments of countries strongly dependent on oil and commodity export (like Saudi Arabia, Chile, Brazil, Norway, etc.) may use their regulatory and legislative powers to reduce the cost of production and extraction – with the consequent implications on society and the environment – or try to create the conditions to diversify their economies and reduce their exposure to the systemic risk of a highly interconnected economy.

Independently on the regulatory or legislative interventions that will be adopted, there is no doubt that law will be central to designing the future geographies of global supply capitalism. More importantly, law already has a core role in redefining the way in which value is extracted and distributed and on the allocation of power between workers, capital and nature. With the help of one concrete example, the next section shows the importance of adopting a systemic approach to the interaction between supply chains and law, specifically through the lenses of value, coercion and redistribution.

Law and State of Necessity at the Service of Global Value Chains

We all know too well that masks and hand sanitizers may significantly reduce the risk of contagion. We also know that they are in high demand, extremely hard to find and that stocks cannot be produced at the speed that is needed by hospitals, let alone the totality of the world population. What may be less known is that before the outbreak of the virus China – yes, China – was producing more than a half of the N95 sanitary masks used by medical personnel around the planet, and that in the last month the number has multiplied by ten thanks to the financial support of the government and the conversion of factories from iPod assemblers into masks producers.

Given the dependence on Chinese provisions and the limited national production, individual European countries and the European Union stepped into the supply chain: public procurement, legally determined maximum prices and export bans have been three of the measures adopted to redesign the shape and reach of the chains. In particular, Italy, Czech Republic, Germany and France used their regulatory powers to ban or require ad hoc administrative authorization to the export of any protective equipment, directly redefining the extension and distributive effects of the global supply chain. In this context, the European Commission represents an illustrative example of the multiple ways in which law and regulatory power can shape the geography and content of supply chains. On 14 March, the Commission threatened to open an infraction procedure against Germany to favor the conclusion of a deal with Italy for the purchase of 1 million masks: the fear of a sanction opened a new route for the global supply chain of masks that would have otherwise not being in place. On 15 March, it published the so-called implementing act requiring that any export of face masks and medical to non-EU countries be subject to authorization by member states, thus limiting the possibility of the supply chains to reach third countries and their people. On 16 March, it launched a joined public procurement with member states for testing kits and respiratory ventilators. And the lockdowns have only started.

However, the story of the global supply of masks and hand sanitizers is not only one of public incentives, trade dependence on China and the strategic use of the state of health necessity to justify restrictions to trade or interventions in the global supply chain with significant impact on the availability of crucial medical equipment across Europe and in countries outside the EU potentially less prepared than the European Union in avoiding the contagion. The sudden surge in the demand for medical equipment is also the story of the women and men who in the production lines across the planet and the competition between countries and producers to guarantee a cheap and quick supply.

In Taiwan, Czech Republic, Kerala, Israel and Hong Kong alike, hundreds of thousands of prisoners have been organized in production lines to supply their ‘unfree’ labor to the global demand for masks and sanitary products, a situation that border on paradox if we consider the recent strikes in Italian prisons due to the poor hygienic conditions and the draconian confinement measures introduced to prevent the spread of the virus among prisoners. In Hong Kong, women inmates at the Lo Wu prison have volunteered – or been asked, according to other sources – to work night shifts to make 2.5m face masks a month for a monthly compensation of HK$800 (£80), a sum that is significantly under Hong Kong’s minimum wage. In Israel, inmates in the Ayalon and Rimonim prisons – two of the complexes where Palestinian prisoners have recently been on hunger strike – have been producing  face masks will serve police officers, firefighters and health inspectors. In the State of New York, the governor has promised that 100 gallons a week of “NYS Clean” will be distributed for free to residents, schools and the Metropolitan Transportation Authority: behind them, there is the work of nearly 100 inmates in the State’s prisons who perceive an average hourly salary of $0.65 cents, significantly lowered than the $15 an hour in New York and $11.10 in the rest of the state.

Yet, poorly paid and exploited labor is not only a prerogative of newly established supply chains aimed at providing cheap and abundant emergency medical equipment. In these weeks more than ever, factory and logistic workers who cannot operate from remote are fighting an even harder battle against emergency decrees that often abide by the imperatives of competitiveness, productivity and the need to keep the global supply chain running. Because, even in the state of necessity and the risk for the workers’ health, there are supply chains that have not been halted or – tin the case of logistic workers and couriers – there has been an increase in demand. Excluded from the lockdown, factory workers and operators in the logistic sector depend on the decisions of their employers and on the implementation of safety measures that are often incompatible with the production line and the security procedures.

In Italy, for example, FCA Fiat Auto decided not to close the factories producing intermediate components for international supply chains and the National Association of the Automotive Industrial Chain (Antia) released a manifesto on behalf of the Italian automotive sector asking “workers to resist and continue in the effort to maintain the international competitiveness of one of the leaders of the Italian economy.” The fear of losing its place in the global supply chain and the absence of a strong regulatory intervention converge in requiring workers to leave the safety of their houses and assume a higher risk than most of the national workforce. In the logistic sector, Amazon has announced 100,000 new jobs to increase its emergency delivery capacity both in Europe and the United States. The positive moment for the company and the need to keep the business going have their repercussions on workers and working conditions. In Italy, the Amazon workers in Torrazza, Piedmont, organized a protest against the company’s decision not to close the operations after one of the employees tested positive to covid-19 and to just quarantine part of the workforce and sanitize the warehouse. In Piacenza, near Milan, Amazon warehouse workers are on strike to denounce the company’s lack of appropriate response to the multiple coronavirus cases across Europe and the incompatibility between the company’s procedures and the health and safety requirements imposed to the whole country with the Decree on 10 March. Not to talk about the truck drivers, farm workers and the deliverers whose work is essential to making everyone else’s isolation possible and is legally excluded from the lockdown but have not received any specific form of guidance, protection and support in the legal construction of the state of emergency.

Law and Global Value Chains after covid-19

The coronavirus pandemic is already leaving an indelible mark on both global health and global economy. In this context, the role of law as one of the main tools the construction of interdependent world and interconnected supply chains cannot be overlooked. Similarly, a systemic and critical approach to law can help better understanding the rationale and distributive effects of national and regional interventions at the time of the global state of emergency. Yet, it is also important to focus on the space that law will play in shaping lives, interactions and commercial interconnections once the biological threat is over. As a matter of fact, there are at least three main lessons that we can learn from what is happening.

1. First of all, it is clear that states, national economies and citizens (above all non-skilled workers, consumers, and the most vulnerable) are exposed to highly volatile and fragile global supply chains. Law was central to the construction of the present complexity and could be a passive observer of the continuous delocalization of production away from Europe into the neighbor countries or in the loss of works without any form of public support. However, it can also intervene to subordinate market dynamics to the needs and interests of the public. Financial and regulatory incentives, bans, public procurement, universal basic income, fiscal coordination and other measures can be adopted to shape and redesign the geographies and distributive implications of global commodity capitalism. Why, therefore, not using this opportunity to rethink the relationship between states, supply chains and citizens? Why not recognizing the precariousness of supply chains and recognize the inevitability of legislative measures aimed at redistributing wealth and income? Why not using public prerogatives to build resilient, affordable, sustainable and reliable chains – for example for food and medical equipment – that guarantee citizens’ rights and essential needs and are spared from the uncertainties and profit-driven prerogatives of global competitiveness?

2. Secondly, the pandemic is revealing what jobs (factory and logistic workers) are truly essential to global supply capitalism and how their indispensability is often twisted against them to ask for more without providing enough (for example, going to work even if they are exposed to high risk of contagion). Yet, the actions of resistance undertaken in Piacenza, Torrazza and in other logistic and production sites across the world reveal the disruptive potential of strikes and protests in the context of just-on-time and transnationally coordinated supply chains. In the absence of adequate responses from the state and their employers, warehouse, automotive and manufacturing workers in Italy – and soon elsewhere in the world – are leveraging their power as potential choke points of transnational supply chains, bottlenecks of disruption in a system that depends on their labor but does not recognize it with salaries and precautions. In light of, national labor law will territorialize the transnational character of supply chains and co-define their pace and the distributional implications: will future labor law continue to be conceived as an opportunity to smoothen global production and circulation of goods/services? Will it favor automation and the replacement of humans with machines in order not to lose investments and growth opportunities? Or will it recognize the centrality of workers in the continuation of global supply capitalism and strike a new balance?

3. Finally, the health-economic crisis is highlighting the socio-environmental risks behind the mantra of competitiveness and the continuous search for cheap inputs (labor, nature, animals, etc.). The economic downturn is closely linked with the hyper-dependence on China as the (cheap) global factory. Some of the last epidemics (covid-19, swine flu, avian flu and the ‘mad cow’) were all triggered by lack of consideration for animals and the dire exploitation of their flesh and environment. On the other hand, the reduction in greenhouse gases, the rediscovery of social interactions, the abandonment of unnecessary consumerism and the rebirth of solidarity are proving that human and non-human beings can – and must – go slower. This is not an invitation of a perennial state of exception, but an invitation to assessing the compatibility of global supply capitalism with the objectives and limits of people and planet. Are we going to get more or the same or take advantage of this situation to pause and reflect? So far, the use of underpaid inmates to address the urgent need for increased production of masks and hand sanitizers and the reduction in the price of oil to stimulate the economy demonstrate that both private and public solutions to the crises have been looked for within the same unsustainable framework. Without a shift away from cheapness and competitiveness, the interlinked future of supply chains, health and global economy can only be bound to more crises, more contagions, more deaths and more precariousness. Is it too ambitious to join Capra and Mattei and hope that lawyers will be in the front line of a radical move away from social and environmental self-destruction and in the adoption of new a new paradigm that does not see law as an enabler of value accumulation through global supply chains but as a tool to build a new ecological order informed by principles of environmental and social justice?

By Ennio Piovesani. The author is a PhD Student at the Università degli Studi di Torino and at the Universität zu Köln.

1. Summary

The Italian Government has adopted a series of Decree-Laws [1] introducing measures to fight the emergency caused by the “new” Coronavirus.

These measures include “self-proclaimed” overriding mandatory provisions on the reimbursement of prices paid under transport, package travel and accommodation contracts by specified persons affected by the Coronavirus.

2. Arts. 28 of Decree-Law No. 9/2020 and 88 of Decree-Law No. 18/2020

In particular, on 2.4.3020, the Italian Government adopted Decree-Law No. 9, titled “Urgent measures to support families, workers and businesses, in connection with the epidemiological emergency by COVID-19” [2].

Article 28 of Decree-Law No. 9/2020 provides for “Reimbursement of Travel Tickets and Travel Packages”.

The first paragraph of Article 28 stipulates that, obligations arising from transport and package travel contracts, concluded by specified persons affected by the Coronavirus [3], are to be considered as impossible under Article 1463 of the Italian Civil Code [4].

Paragraphs 2 to 7 of Article 28 establish a specific procedure for obtaining and making the reimbursement of the price paid under the transport or package travel contract covered by the same Article.

The following paragraph 8 “proclaims”:

“The provisions of the present article constitute overriding mandatory provisions within the meaning of Article 17 of Law of 31 May 1995, No. 218 [“Italian PIL Act”] [5, 6] and of Article 9 of Regulation (EU) No. 593/2008 of the European Parliament and of the Council, of 17 June 2008 [“Rome 1 Regulation”]”.

On 17.3.2020, the Italian Government has adopted a new Decree-Law (dubbed “Heal Italy”), introducing new measures to fight the emergency caused by the Coronavirus [7].

Art. 88(1) of new Decree-Law No. 18/2020 extends the provisions of Art. 28 of Decree-Law No. 9/2020 to accommodation contracts.

3. Short Comment

As a short comment to the above, I note that it is not the first time that the Italian legislator enacts “self-proclaimed” overriding mandatory provisions [8].

However, as known, it is questionable whether, EU Member States can freely enact similar provisions when they fall within the material scope of Union private international law instruments, such as the Rome 1 Regulation.

In fact, this practice appears to be particularly questionable in cases such as that at issue, where the self-proclaimed overriding mandatory provisions do not appear to be “crucial” for safeguarding public interests within the meaning of Article 9(1) of the Rome 1 Regulation, but rather appear to be exclusively purported to protect private interests (for however widespread they may be).

Notes

[1] In the Italian legal order, a Decree-Law is a provisional act having force of law, adopted in extraordinary cases of necessity and urgency by the Government. A Decree-Law must be “converted” into a Law within a period of 60 days from its publication, or otherwise it loses its effects. See, in particular, Art. 77 of the Costituzione della Repubblica Italiana, Gazzetta Ufficiale No. 298 of 27.12.1947, www.gazzettaufficiale.it/eli/id/1947/12/27/047U0001/sg.

[2] Decree-Law of 2.3.2020, No. 9, Misure urgenti di sostegno per famiglie, lavoratori e imprese connesse all’emergenza epidemiologica da COVID-19, Gazzetta Ufficiale, Serie Generale No. 53 of 2.3.2020, www.gazzettaufficiale.it/eli/id/2020/03/02/20G00026/sg.

[3] See Art. 28(1)(a) to (f) of Decree-Law No. 9/2020.

[4] Article 1463 of the Italian Civil Code, headed “Total Impossibility”, can be translated as follows: “In [case of] contracts with reciprocal performances, the party that is freed due to supervening impossibility of the performance owed cannot demand counter-performance, and must return that which he has already received, in accordance with the rules on undue payment”. See, Royal Decree of 16.3.1942, No. 262, Approvazione del testo del Codice civile, Gazzetta Ufficiale, Serie Generale No. 79 of 4.4.1942, www.gazzettaufficiale.it/eli/id/1942/04/04/042U0262/sg.

[5] Law of 31.5.1995, No. 218, Riforma del sistema italiano di diritto internazionale privato, Gazzetta Ufficiale, Serie Generale No. 128 of 3.6.1995, Supplemento Ordinario No. 68, https://www.gazzettaufficiale.it/eli/id/1995/06/03/095G0256/sg.

[6] Article 17 of the Italian PIL Act, is the Italian (autonomous) private international law provision governing overriding mandatory provisions. Article 17, headed “Norms of necessary application”, can be translated as follows: “Norms of necessary application. 1. Italian norms which, considering their object and their objective, must be applied notwithstanding reference to foreign law, prevail over the following provisions”.

[7] Decree-Law of 17.3.2020, No. 18, Misure di potenziamento del Servizio sanitario nazionale e di sostegno economico per famiglie, lavoratori e imprese connesse all’emergenza epidemiologica da COVID-19, Gazzetta Ufficiale, Serie Generale No. 70 del 17.3.2020, https://www.gazzettaufficiale.it/eli/id/2020/03/17/20G00034/sg.

[8] See, e.g., Article 32-ter of the Italian PIL Act.

Ilaria Pretelli (Swiss Institute of Comparative Law) has posted Provisional Measures in Family Law and the Brussels II Ter Regulation on SSRN.

Provisional and Protective Measures in family matters need special consideration because they are not limited to economic matters and significantly interfere with the self-determination of persons and often of vulnerable persons, namely children. This circumstance explains the exceptional regime of the Brussels II ter Regulation as compared to the general regime of the Brussels I and Lugano systems. The article also deals with the problem of the law applicable to provisional measures, in the absence of a specific European rule on this matter. We argue that, whenever a provisional or protective measure is taken by the judge who will not rule on the substance of the matter and especially in cases where the measure is provisional and anticipates the merits, judges should avoid the application of the law of their forum and apply the law applicable to the substance to the provisional measure they are required to issue.

The paper is forthcoming in the Yearbook of Private International Law.

By Ennio Piovesani. The author is a PhD Student at the Università degli Studi di Torino and at the Universität zu Köln.

1. Summary

The Italian Government has adopted a series of Decree-Laws [1] introducing measures to fight the emergency caused by the “new” Coronavirus.

These measures include “self-proclaimed” overriding mandatory provisions on the reimbursement of prices paid under transport, package travel and accommodation contracts by specified persons affected by the Coronavirus.

2. Arts. 28 of Decree-Law No. 9/2020 and 88 of Decree-Law No. 18/2020

In particular, on 2.4.3020, the Italian Government adopted Decree-Law No. 9, titled “Urgent measures to support families, workers and businesses, in connection with the epidemiological emergency by COVID-19” [2].

Article 28 of Decree-Law No. 9/2020 provides for “Reimbursement of Travel Tickets and Travel Packages”.

The first paragraph of Article 28 stipulates that, obligations arising from transport and package travel contracts, concluded by specified persons affected by the Coronavirus [3], are to be considered as impossible under Article 1463 of the Italian Civil Code [4].

Paragraphs 2 to 7 of Article 28 establish a specific procedure for obtaining and making the reimbursement of the price paid under the transport or package travel contract covered by the same Article.

The following paragraph 8 “proclaims”:

“The provisions of the present article constitute overriding mandatory provisions within the meaning of Article 17 of Law of 31 May 1995, No. 218 [“Italian PIL Act”] [5, 6] and of Article 9 of Regulation (EU) No. 593/2008 of the European Parliament and of the Council, of 17 June 2008 [“Rome 1 Regulation”]”.

On 17.3.2020, the Italian Government has adopted a new Decree-Law (dubbed “Heal Italy”), introducing new measures to fight the emergency caused by the Coronavirus [7].

Art. 88(1) of new Decree-Law No. 18/2020 extends the provisions of Art. 28 of Decree-Law No. 9/2020 to accommodation contracts.

3. Short Comment

As a short comment to the above, I note that it is not the first time that the Italian legislator enacts “self-proclaimed” overriding mandatory provisions [8].

However, as known, it is questionable whether, EU Member States can freely enact similar provisions when they fall within the material scope of Union private international law instruments, such as the Rome 1 Regulation.

In fact, this practice appears to be particularly questionable in cases such as that at issue, where the self-proclaimed overriding mandatory provisions do not appear to be “crucial” for safeguarding public interests within the meaning of Article 9(1) of the Rome 1 Regulation, but rather appear to be exclusively purported to protect private interests (for however widespread they may be).

Notes

[1] In the Italian legal order, a Decree-Law is a provisional act having force of law, adopted in extraordinary cases of necessity and urgency by the Government. A Decree-Law must be “converted” into a Law within a period of 60 days from its publication, or otherwise it loses its effects. See, in particular, Art. 77 of the Costituzione della Repubblica Italiana, Gazzetta Ufficiale No. 298 of 27.12.1947, www.gazzettaufficiale.it/eli/id/1947/12/27/047U0001/sg.

[2] Decree-Law of 2.3.2020, No. 9, Misure urgenti di sostegno per famiglie, lavoratori e imprese connesse all’emergenza epidemiologica da COVID-19, Gazzetta Ufficiale, Serie Generale No. 53 of 2.3.2020, www.gazzettaufficiale.it/eli/id/2020/03/02/20G00026/sg.

[3] See Art. 28(1)(a) to (f) of Decree-Law No. 9/2020.

[4] Article 1463 of the Italian Civil Code, headed “Total Impossibility”, can be translated as follows: “In [case of] contracts with reciprocal performances, the party that is freed due to supervening impossibility of the performance owed cannot demand counter-performance, and must return that which he has already received, in accordance with the rules on undue payment”. See, Royal Decree of 16.3.1942, No. 262, Approvazione del testo del Codice civile, Gazzetta Ufficiale, Serie Generale No. 79 of 4.4.1942, www.gazzettaufficiale.it/eli/id/1942/04/04/042U0262/sg.

[5] Law of 31.5.1995, No. 218, Riforma del sistema italiano di diritto internazionale privato, Gazzetta Ufficiale, Serie Generale No. 128 of 3.6.1995, Supplemento Ordinario No. 68, https://www.gazzettaufficiale.it/eli/id/1995/06/03/095G0256/sg.

[6] Article 17 of the Italian PIL Act, is the Italian (autonomous) private international law provision governing overriding mandatory provisions. Article 17, headed “Norms of necessary application”, can be translated as follows: “Norms of necessary application. 1. Italian norms which, considering their object and their objective, must be applied notwithstanding reference to foreign law, prevail over the following provisions”.

[7] Decree-Law of 17.3.2020, No. 18, Misure di potenziamento del Servizio sanitario nazionale e di sostegno economico per famiglie, lavoratori e imprese connesse all’emergenza epidemiologica da COVID-19, Gazzetta Ufficiale, Serie Generale No. 70 del 17.3.2020, https://www.gazzettaufficiale.it/eli/id/2020/03/17/20G00034/sg.

[8] See, e.g., Article 32-ter of the Italian PIL Act.