Droit international général

I reviewed Tanchev AG’s Opinion in C‑722/17 Reitbauer here. Readers best refer to it to get insight into the complex factual matrix. The CJEU held on Wednesday last week- no English version of the judgment is as yet available.

In essence applicants are attempting to anchor their pauliana unto A24(5)’s enforcement jurisdiction. Failing that, the anchor might be A24(1)’s locus rei sitae exclusive jurisdictional rule.

The Court like the AG rejects jurisdiction on the basis of Article 24(5). They are right: A25(5) must not resurrect merits claims on much wider issues (claim for compensation of applicants’ debt, objections concerning the non-existence of a claim underlying a judicially ordered auction, and concerning the invalidity of the creation of the pledge for that claim under a loan agreement).

Court and AG are also right in rejecting Article 24(1) jurisdiction. The issues at stake are far removed from the reasons which justify exclusive jurisdiction. (The Court refers to Komu, Schmidt, Weber).

Then, surprisingly (for it was not part of the questions asked; the AG entertained it but that is what AGs do) the Court completes the analysis proprio motu with consideration of Article 7(1)’s forum contractus rule, with respect to claimants’ argument that the acknowledgement of debt by Isabel, cannot be used against them. Tanchev AG as I noted essentially suggested a limitation of Feniks to cases of fraus – arguably present here. At 59-60 the Court simply notes that all creditors were ‘contractually’ linked to Isabel C, and then applies Feniks to come to a finding of contractual relation between claimants and Mr Casamassima: without any reference to the fraus element (I had indeed suspected the Court would not so quickly vary its own case-law).

The AG did not discuss the place of performance of the contract (between Reitbauer et al and Mr Casamassima – this was exactly one of the sticky points signalled by Bobek AG in Feniks). The CJEU however does, and at 61 simply identifies that as the place where the underlying contract, between Isabel C and the building contractors, had to be performed: that is, the place of the renovation works in Austria.

That an Article 7(1) forum was answered at all, is surprising. That the place of performance of that contract is straightforwardly assimilated with the underlying contractual arrangement, is not necessarily convincing. That Feniks would not so soon be varied (if at all), was to be expected.

Forum contractus is surely stretching to forum abundantum.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1

Less than a year after its decision in Case C-337/17 Feniks (discussed here), the Court of Justice had another opportunity to consider the extent to which the Brussels Ia Regulation provides a head of special jurisdiction for an actio pauliana. In Case C-722/17 Reitbauer (decided last Wednesday but still not available in English), the Court confirmed its decision in Feniks, according to which such an action falls under Art 7(1) Brussels Ia if it is based on a contractual right. Michiel Poesen, PhD candidate at KU Leuven, has been so kind as to share his thoughts on the decision with us in the following post.

Earlier this week, the Court of Justice of the European Union found that an actio pauliana is subject to jurisdiction in matters relating to a contract, contained in Article 7(1) Brussels Ia (Case C-722/17 Reitbauer).

In general terms, the actio pauliana is a remedy that allows a creditor to have an act declared ineffective, because said act was carried out by a debtor with the purpose of diminishing its assets by passing them on to a third party (see Opinion of AG Bobek, C-337/17 Feniks, [35]). This blogpost will briefly summarise the Court’s ruling and its wider impact.

Facts

The facts leading to the ruling are quite complex. Mr Casamassima and Ms Isabel C., both resident in Rome, lived together at least until the spring of 2014. In 2010, they purchased a house in Villach, Austria. While Mr Casamassima apparently funded the transaction, Isabel C. was registered in the land register as the sole owner.

Ms Isabel C. – with the ‘participation’ of Mr Casamassima – entered into contracts for extensive renovation works of the house with Reitbauer and others (the applicants in the preliminary reference proceedings, hereinafter referred to as ‘Reitbauer’). Because the costs of the renovation far exceeded the original budget, payments to Reitbauer were suspended. From 2013 onwards, Reitbauer were therefore involved in judicial proceedings in Austria against Ms Isabel C. Early 2014, the first of a series of judgments was entered in favour of Reitbauer. Ms Isabel C. appealed against those judgments.

On 7 May 2014 before a court in Rome, Ms Isabel C. acknowledged Mr Casamassima’s claim against her with respect to a loan agreement which was granted by the latter in order to finance the acquisition of the house in Villach. Ms Isabel C. undertook to pay this amount to the latter under a court settlement. In addition, she agreed to have a mortgage registered on the house in Villach in order to secure Mr Casamassima’s claim.

On 13 June 2014 a (further) certificate of indebtedness and pledge certificate was drawn up in Vienna by a notary to guarantee the above settlement (‘the pledge’). With this certificate, the pledge on the house in Villach was created on 18 June 2014.

The judgments in favour of Reitbauer did not become enforceable until after this date. The pledges on the house of Ms Isabel C. held by Reitbauer, obtained by way of legal enforcement proceedings, therefore ranked behind the pledge in favour of Ms Casamassima.

In order to realise the pledge, Mr Casamassima applied in February 2016 to the referring court (the District Court in Villach, Austria) for an order against Ms Isabel C., requiring a compulsory auction of the house in Villach. The house was auctioned off in the autumn of 2016. The order of entries in the land register shows that the proceeds would go more or less entirely to Mr Casamassima because of the pledge.

With a view to preventing this, Reitbauer brought an action for avoidance (‘Anfechtungsklage’) in June 2016 before the Regional Court in Klagenfurt, Austria, against Mr Casamassima and Ms Isabel C. The action was dismissed by that court due to a lack of international jurisdiction, given Casamassima’s and Isabel C’s domicile outside of Austria.

At the same time, Reitbauer filed an opposition before the district court of Villach, Austria, in the course of the proceedings regarding distribution of the proceeds from the compulsory auction, and subsequently brought opposition proceedings against Mr Casamassima. In these opposition proceedings, Reitbauer sought a declaration 1) that the decision regarding the distribution to Mr Casamassima of the proceeds of the action was not legally valid for reasons of compensation between Ms Isabel C.’s claims and those of Mr Casamassima, and 2) that the pledge certificate was drawn up to frustrate Reitbauer’s enforcement proceedings with regard to the house in Villach. Essentially, the second part of Reitbauer’s action was based on the allegation that Ms Isabel C. had acted with fraudulent intent, therefore being a form of actio pauliana.

Decision

The Court of Justice had to consider first whether jurisdiction in proceedings that have as their object rights in rem in immovable property or tenancies of immovable property, provided in Article 24(1) Brussels Ia, was applicable. To trigger this ground of jurisdiction, Reitbauer and others alleged that their action was closely related to the house in Villach.

In reaching its conclusion, the Court reiterated that Article 24(1) Brussels Ia does not encompass all actions concerning rights in rem in immovable property, but only those which both come within the scope of th Regulation and are actions which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with protection for the powers which attach to their interest (Case C-722 Reitbauer, [44]; see also Case C?417/15 Schmidt, [30])

This definition implies that an action was based on rights in rem, not on rights in personam. The part of the action alleging compensation between Casamassima’s and Isabel C.’s claims does not satisfy this requirement, as it aims at contesting the existence of the Mr Casamassima’s right in personam that was the cause of the enforcement proceedings.

The second part of the action, the actio pauliana, does not fit within in rem jurisdiction either. The Court found that such an action does not involve the assessment of facts or the application of rules and practices of the locus rei sitae in such a way as to justify conferring jurisdiction on a court of the State in which the property is situated (Case C-722 Reitbauer, [48]; see also C-115/88 Reichert I, [12]).

Having come to this conclusion, the Court decided that jurisdiction over the actions brought by Reitbauer and others was not subject to Article 24(5) Brussels Ia either – which contains a special ground of jurisdiction “in proceedings concerned with the enforcement of judgments”. According to the Court, this bespoke ground of jurisdiction is to be understood as englobing proceedings that may arise from “recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments” (Case C-722 Reitbauer, [52]; see also Case C?261/90 Reichert II, [28]) .

Reitbauer and others’ actions were clearly not related to the enforcement of the judgment but to the substantive rights underlying the pledge which was being enforced. For that reason, enforcement jurisdiction was to remain inapplicable.

Having reached the conclusion that no exclusive ground of jurisdiction could apply, the Court went on to consider Art 7(1) Brussels Ia – jurisdiction in matters relating to a contract. Following a short motivation (Case C-722 Reitbauer, [56]–[62]) the Court confirmed that the part of Reitbauer and others’ action amounting to an actio pauliana was a matter relating to a contract. As in the Feniks ruling, the reason cited is that the action aims at preserving Reitbauer and others’ contractual rights by setting aside the creditor’s allegedly fraudulent acts (Case C-722 Reitbauer, [58]–[59]; Case C-337/17 Feniks, [43]–[44]).

As a consequence, Art 7(1)(b) Brussels Ia allocates jurisdiction to the place of performance of the allegedly defrauded contract, being Villach since Reitbauer and others delivered their renovation services in that location (see Case C-337/17 Feniks, [46]).

The Purpose and Role of Art 7(1) Brussels Ia

As far as the exclusive grounds of jurisdiction in Art 24(1) and 24(5) Brussels Ia are concerned, the decision can hardly be considered surprising. Reitbauer and others tried to plead their actions as relating to a matter covered by exclusive jurisdiction, with the aim of suing the Italian domiciled defendants in Austria instead of Italy (which would be the outcome of the default rule of jurisdiction of Art 4(1) Brussels Ia). This attempt was bound to fail.

More interestingly, the Court confirmed that an action pauliana can be a matter relating to a contract. This emerging line of case law is met with criticism. One of the points raised was that a defendant may be ignorant of the contract it allegedly helped to defraud. In such a situation, applying contract jurisdiction would trigger a forum that is unforeseeable for the defendant (an outcome that the Court rightly attempted to avoid in Case C-26/91 Handte, [19]). A response to this criticism would be not to apply contract jurisdiction to an actio pauliana altogether, as suggested earlier by AG Bobek (Opinion of AG Bobek, C-337/17 Feniks, [62]–[72]). There, the AG opined that an actio pauliana is too tenuously and too remotely linked to a contract to be a matter relating to a contract for the purpose of Art 7(1) Brussels Ia. Alternatively, AG Tanchev opined that the defendant’s knowledge should be taken into account (Opinion in Case C-722/17):

[84] … knowledge of a third party should act as a limiting factor: … the third party needs to know that the legal act binds the defendant to the debtor and that that causes harm to the contractual rights of another creditor of the debtor (the applicants).

[92] … the defendant’s knowledge of the existence of the contract(s) at issue is important.

Instead of realigning the Feniks ruling with the principle of foreseeability, the decision in Reitbauer confirmed that an actio pauliana fits squarely within jurisdiction in matters relating to a contract, the driving factor seemingly being the hope to offer the claimant an additional forum that presumably has a close connection to the dispute (Case C-722 Reitbauer, [60]: Case C-337/17 Feniks, [44]–[45]).

Looking beyond the actio pauliana, the case law begs the question what other types of remedies – however remotely linked to a contract – could be subject to Art 7(1) Brussels Ia. An action for wrongful interference with contract, for example, regarded to be tortious in nature (e.g. Tesam Distribution Ltd v Schuh Mode Team GmbH and Commerzbank AG [1990] I.L.Pr. 149), would be a matter relating to a contract by the standard applied in Feniks and Reitbauer. It is doubtful whether such a broad construction of jurisdiction in matters relating to a contract complies with the limited role of Art 7(1) Brussels Ia within the Regulation (Recital (15) Brussels Ia).

[2019] EWCA Crim 20 Regina v BIFFA Waste Services is a rare example of interlocutory appeal concerning jury instruction and summing up. It involves Regulation 1013/2006, the Waste shipments Regulation, particularly the EU’s enforcement of the ‘Basel Ban‘: the ban on exports of hazardous wastes destined for disposal in non-OECD countries.

The only real point arising on appeal is whether (contrary to the judge’s approach at Crown Court) the prosecution was to be required to show not just that a shipment of wastes was not ‘Green List’ wastes but rather household (domestic) wastes, but in addition, to prove that the waste was contaminated by other materials to an extent which prevented the recovery of waste in an ‘environmentally sound manner’ (the general Basel condition for exports); and whether the jury was to be instructed in the summing-up accordingly.

The containers in question were to form part of a larger consignment of containers (448 in total) destined for China. In May and early June 2015 they were the subject of interception and examination at the port of Felixstowe by officials of the Environment Agency. It is asserted that such examination revealed that these particular containers, or some of them, included significant contamination by items which were not mixed paper items at all; for example, soiled nappies and sanitary wear, sealed bags of excrement, clothing, food packaging, plastic bottles and so on. It is asserted that this was indicative of the consignments being mixed household waste rather than mixed paper waste: it being common ground that household waste, as such, could not be lawfully exported in this way to China.

Of particular specific relevance for the appeal is Recital (28)  of the Waste Shipments Regulation which provides “It is also necessary, in order to protect the environment of the countries concerned, to clarify the scope of the prohibition of exports of hazardous waste destined for recovery in a country to which the OECD Decision does not apply, also laid down in accordance with the Basel Convention. In particular, it is necessary to clarify the list of waste to which that prohibition applies and to ensure that it also includes waste listed in Annex II to the Basel Convention, namely waste collected from households and residues from the incineration of household waste.”

Davis LJ at 33 deals swiftly with the issue. Appreciating that plenty could be said about the precise application of the Regulation, he nevertheless simply points to the prosecution’s intention. They have never sought to say that these were consignments which were indeed essentially Heading B3020 waste paper but nevertheless contaminated by other materials not collected from households (for example, corrosive fluids or dangerous metals etc). so as to prevent recovery of the waste in an environmentally safe manner. They had relied solely on showing the jury that the shipment was not paper waste. If it was, then the waste in question could not be B3020 waste paper (which is within the “green” list of waste which may legitimately be exported). If it was proved that the relevant consignments were indeed heading Y46 waste (household waste) instead, then that was within Article 36(1)(b) of the Regulation and that was the end of the matter. If, on the other hand, the prosecution failed to prove that the relevant consignments were indeed Y46, then that too was the end of the matter and the defendant was entitled to be acquitted.

At 36 he ends with congratulatory remarks to judge Auerbach at Crown Court:

In a matter which is by no means the common currency of Crown Courts, he speedily produced a comprehensive reserved written ruling which set out in full detail the legislative background and authorities; fully analysed and discussed the competing arguments; and explained the reasons for his conclusion with crystal clarity. It is just because of the care and detail underpinning his ruling that this court has been able to approach matters rather more succinctly than otherwise might have been the case.’

Geert.

(Handbook of) EU Waste Law, 2nd ed 2015, Chapter 4.

Professor Matthias Lehmann, Director of the Institute for Private International and Comparative Law, University of Bonn, University of Bonn, Germany, is looking for one highly skilled and motivated PhD candidate and fellow (Wissenschaftliche/r Mitarbeiter/in) on a part-time basis (50%). The earliest starting date is 1 October 2019.

The successful candidate holds a first law degree, preferably from a jurisdiction outside of Germany. She or he is acquainted in the comparative and international dimensions of private law, and ideally also interested in questions of financial law, in particular the new problems raised by cryptocurrencies. An excellent command of English and a basic knowledge of German are required. Knowledge of another language as well as good IT skills are additional factors that may be taken into consideration.

The fellow will be given the opportunity to conduct his/her PhD project or post-doc project according to the Faculty’s regulations. The position is paid according to the German public salary scale E-13 TV-L, 50% (about 1300 Euro net per month). There will be an opportunity to increase the position and salary to 75% as of April 1, 2020 should the candidate wish to do so. The initial contract period is up to three years, with the option to have a shorter period or to renew it, according to the wishes of the candidate. Responsibilities include independent teaching obligations (2 hours per week during the semester in a subject of choice of the candidate) as supporting Professor Lehmann in his research and teaching.

If you are interested in this position, please send your application (cover letter in English; CV; and relevant documents and certificates, notably university transcripts and a copy of law degree) to lehrstuhl.lehmann@jura.uni-bonn.de by July 22, 2019. The University of Bonn is an equal opportunity employer.

Thank you Jan Jakob Bornheim for flagging Gray v Hurley [2019] EWHC 1636 (QB), in which as he puts it, ‘there is a lot going on’. Judgment is best referred to for facts of the case. On 25 March 2019 Mr Hurley commenced proceedings against Ms Gray in New Zealand. On 26 March 2019 Ms Gray issued the claim form in the present action and obtained an order for alternative service.

Of interest to the blog is first of all the matrimonial exception of Brussels Ia, nota bene recently applied by the CJEU in C-361/18 Weil. Article 1(2)(a) Brussels Ia (Lavender J using the English judges’ shorthand ‘Judgments Regulation’) provides that it does not apply to matters relating to: “…rights in property arising out of a matrimonial relationship or out of a relationship deemed by the law applicable to such relationship to have comparable effects to marriage.”

There is no EU-wide harmonisation of the conflict of law rules for matrimonial property. The UK is not party to the enhanced co-operation rules in the area and Lavender J did not consider any role these rules might play in same. Rome I and Rome II have a similar exception as Brussels Ia and at 111 Lavender J takes inspiration from Recital 10 Rome II which states that this exception “should be interpreted in accordance with the law of the Member State in which the court is seised.” Discussion ensues whether this is a reference to the substantive law of the court seized (Ms Gray’s position; English law does not deem their relationship to have comparable effects to marriage) or the private international law rules of same (Mr Hurley’s position; with in his view residual English private international law pointing to the laws of New Zealand, which does deem their relationship to have comparable effects to marriage). Lavender J does not say so expresses verbis but seems to side with the exclusion of renvoi: at 115: ‘I do not consider that the relationship between Ms Gray and Mr Hurley was a relationship deemed by the law applicable to such relationship to have comparable effects to marriage.’ Brussels Ia’s matrimonial exception therefore is not engaged.

Next, the application of the exclusive jurisdictional rule of Article 24(1) is considered. Ms Gray’s claim here essentially aims to establish her full ownership of the ‘San Martino’ property in Italy. Webb v Webb is considered, as are Weber v Weber and Komu v Komu (readers of the blog are aware that A24(1) cases often involve feuds between family members). Lavender J concludes that Ms Gray’s claim essentially is like Webb Sr’s in Webb v Webb: Ms Gray is not seeking an order for the sale of San Martino (and it does not appear that the right of pre-emption would be triggered by a judgment in her favour, as it would be by an order for sale). Nor is she seeking to give effect to her existing interest in San Martino. Rather, she claims that Mr Hurley holds his interest in San Martino on trust for her.

Application of Article 25 choice of court is summarily dismissed at 131 ff: there was choice of court and law (pro: Italy) in the preliminary sales and purchase agreement between the seller and Ms Gray. However, this clearly does not extend to the current dispute.

Next comes the application of Article 4’s domicile rule. Was Mr Hurley domiciled in England on 26 March 2019, when the court was seized?  Article 62(1) Brussels Ia refers to the internal law. Application is made by Lavender J of inter alia [2018] EWHC 160 (Ch), Shulman v Kolomoisky which I also included here; he also considers the implications of CJEU C-327/10 Lindner, and eventually decides that Mr Hurley was not domiciled in England, however that Lindner should be read as extending to the defendant’s last known domicile in a case where the Court: (1) is unable to identify the defendant’s place of domicile; and (2) has no firm evidence to support the conclusion that the defendant is in fact domiciled outside the European Union. This is a very relevant and interesting reading of Lindner, extending the reach of Brussels Ia as had been kickstarted by Owusu, with due deference to potential New Zealand jurisdiction (New Zealand domicile not having been established).

Final conclusion, therefore, is that Ms Hurley may rely on Article 4 Brussels Ia. Quite what impact this has on the New Zealand proceedings is not discussed.

Interesting judgment on many counts.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 2 practically in its entirety.

To register please click on the official Fortaleza Forum website.

The Forum is open to any interested expert. Participation is free of charge but advance registration is required. The deadline for registrations is Friday 13 September 2019.

The HCCH news item is available here.

Just a quick note for completeness’ sake on Pitruzzella AG’s Opinion in Joined cases C-349/18 to C-351/18 NMBS v Mbutuku Kanyeba et al. It engages consumer protection law, not conflict of laws. To decide whether there is a ‘contract’ between public transport providers and (alleged) fare dodgers, the AG has no choice but to refer to national law:

La directive 93/13/CEE ne réglemente pas les conditions de formation des contrats et le régime relatif aux clauses abusives qu’elle contient est en principe applicable exclusivement aux relations juridiques d’origine contractuelle, qui doivent être qualifiées par le juge national sur le fondement du droit national.

Readers of the blog will appreciate the echoes of Tessili v Dunlop and Handte /Kalfelis, Feniks etc. discussions.

Geert.

I reviewed Kokott AG’s Opinion in C-624/17 OM v Tronex here. The Court yesterday essentially confirmed her Opinion – readers may want to have a quick read of my previous posting to get an idea of the issues.

The Court distinguishes between two main categories. First, redundant articles in the product range of the retailer, wholesaler or importer that were still in their unopened original packaging. The Court at 32: ‘it may be considered that those are new products that were presumably in working condition. Such electrical equipment can be considered to be market products amenable to normal trade and which, in principle, do not represent a burden for their holder.’ However (at 33) that does not mean that these can never be considered to be ‘discarded’: the final test of same needs to be done by the national court.

The second category are electrical appliances returned under the product guarantee. At 43: goods that have undergone a return transaction carried out in accordance with a contractual term and in return for the reimbursement of the purchase price cannot be regarded as having been discarded. Where a consumer effects such a return of non-compliant goods with a view to obtaining a reimbursement of them under the guarantee associated with the sale contract of those goods, that consumer cannot be regarded as having wished to carry out a disposal or recovery operation of goods he had been intending to ‘discard’ within the meaning of the Waste Framework Directive. Moreover per C-241/12 and C-242/12 Shell, the risk that the consumer will discard those goods in a way likely to harm the environment is low.

However such a return operation under the product guarantee does not provide certainty that the electrical appliances concerned will be reused. At 35: ‘It will therefore be necessary to verify, for the purposes of determining the risk of the holder discarding them in a way likely to harm the environment, whether the electrical appliances returned under the product guarantee, where they show defects, can still be sold without being repaired to be used for their original purpose and whether it is certain that they will be reused.’

At 36: if there is no certainty that the holder will actually have it repaired, it has to be considered a waste. At 40 ff:  In order to prove that malfunctioning appliances do not constitute waste, it is therefore for the holder of the products in question to demonstrate not only that they can be reused, but that their reuse is certain, and to ensure that the prior inspections or repairs necessary to that end have been done.

The Court ends at 42 with the clear imposition of a triple duty on the holder (who is not a consumer, per above): a duty of inspection,  and, where applicable, a duty of repair and of packaging.

Geert.

(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.

The Faculty of Law at the University of Trier is looking for a research assistant (Wissenschaftliche(r) Mitarbeiter(in) (m/w/d)) at the Chair for Private Law, Private International Law and Comparative Law (Prof. Dr. Jens Kleinschmidt, LL.M. (Berkeley)) on a part-time basis (50 %).

The position will be paid according to the salary scale E 13 TV-L, and the contract will be for an initial period until 30 June 2022.

The research fellow will be given the opportunity to conduct a Ph.D. project under the chairholder’s supervision (according to the applicable regulations of the Law Faculty). His/her tasks will include supporting the chairholder in research, teaching and administrative matters, an independent teaching obligation of 2 hours/week (in German) and pursuing his/her own Ph.D. project.

The successful candidate holds a first law degree (Erste juristische Prüfung) above average and has a particular interest in private law and the willingness to work in the research areas of the chair. A very good command of German and, in addition, English or French is required. Knowledge of another language or a stay abroad will be an asset.

Candidates with disabilities will be given preference in case of equal qualification. Applications by qualified women are particularly welcome.

If you are interested, please send your application (cover letter in German, CV, all relevant documents including transcripts and copy of law degree) by 31 July 2019 to

Professor Dr. Jens Kleinschmidt
Universität Trier
FB V – Rechtswissenschaft
54286 Trier
Germany

As the application documents will not be returned, applicants are kindly requested to submit only unauthenticated copies.

The full job advert in German is available here.

The agenda of the 11th International Forum on the electronic Apostille Program (e-APP) (to be held from 16 to 18 October 2019 in Fortaleza, Brazil) has been released, click here. For more information, see my previous post here.

The HCCH news item is available here.

This spring, the first meeting of the newly established Young EU Private International Law Research Network  was held at the University of Würzburg (please find more information about this event here). The first research project and meeting in Würzburg dealt with the “Recognition/Acceptance of Legal Situations” in the EU.

The cooperation involving the young generation of private international lawyers is intended to be continued with annual conferences. The next meeting of the network will take place at ELTE Eötvös Loránd University,Budapest on  20 March 2020. The conference will focus on overriding mandatory provisionswith particular regard to national legislation and court practice outside the scope of application of the EU private international law regulations. The provisions of the EU private international law regulations, and in particular the Rome I and II Regulations, on overriding mandatory provisions and the related case law received considerable attention among commentators. However, less attention has been devoted to the treatment of overriding mandatory provisions in the law of the Member States outside the scope of application of the EU private international law regulations. The areas concerned may include property law, family law, company law, etc. A comprehensive comparative study is missing in this field. In order to map the similarities and differences of the approaches of the private international law of the Member States, national reports will be prepared. Based on these national reports, a general report will be produced.

The conference will consist of a morning session where overriding mandatory rules will be discussed in a general way (e.g., the appearance of overriding mandatory provisions in property law, family law, arbitration, their interconnection with human rights, etc.) and an afternoon workshop where participants will discuss the outcome of the national reports and the conclusions of the general report.

If you are interested in the research project or the activity of the Young EU Private International Law Research Network, please do not hesitate to contact us (youngeupil@gmail.com).

Posted on behalf of the Permanent Bureau of the Hague Conference on Private International Law (HCCH)

The full text of the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters is now available online. The HCCH released the text of the Convention on its website.

You can it find it here.

Additional information, including the final version of the Explanatory Report to the Convention will be available soon.

The representatives at the Diplomatic Conference at the Hague Convention have issued a provisional text of the Convention here. I am short of time to post a quick scan of the Convention – see some of my earlier posts on same. Also, since the Convention has taken on the format of the Brussels regime, it is of course quite an exercise even just to give a quick overview.

Of interest is that Jane Holliday posted a summary of key positive takeaways by prof Paul Beaumont, who was heavily involved in the drafting i.a. as a representative of the EU. These include the room for asymmetric choice of court (not covered by the Hague choice of court Convention and crucial for many common law jurisdictions); and the blend between the US and the EU regime for forum contractus: Article 5(g):

‘the judgment ruled on a contractual obligation and it was given by a court of the State in which performance of that obligation took place, or should have taken place, in accordance with

(i) the agreement of the parties, or (ii) the law applicable to the contract, in the absence of an agreed place of performance,

unless the activities of the defendant in relation to
the transaction clearly did not constitute a purposeful and substantial connection to that State.

Of note of course is also the carve-out for intellectual property and of ‘unilateral’ sovereign debt restructuring, but also of defamation and of privacy.

Much analysis no doubt to follow, as are complications in reaching a unified interpretation of the Convention once ratified.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016. Chapter 2.

Anna Bizer, doctoral candidate at the University of Freiburg, has kindly provided us with her thoughts on AG Szpunar’s opinion in the case of Glawischnig-Piesczek v Facebook Ireland (C-18/18).

Since the EP-proposal from 2012, the European Union has not shown any efforts to fill the gap still existing in the Rome II Regulation regarding violations of personality rights (Article 1(2)(g)). However, Advocate General Szpunar has just offered some thoughts on the issue in his opinion on the case of Eva Glawischnig-Piesczek v Facebook Ireland Limited (C-18/18) from 18 June 2019.

Eva Glawischnig-Piesczek, an Austrian politician, claimed that a Facebook user had violated her personality right by posting a defamatory comment on the social network. She sued Facebook Ireland for the removal of the publication in question as well as other identical and/or equivalent publications. The commercial court in Vienna granted a corresponding injunction and Facebook Ireland did indeed disable access to the publication – but only in Austria by means of geo-blocking. Hereafter, the Austrian Supreme Court referred various questions to the CJEU regarding the interpretation of Article 15(1) of the e-Commerce Directive (Directive 2000/31) which prohibits the imposition of a general monitoring obligation on host providers. While the details of the responsibility of host providers regarding their users’ activities are certainly interesting, this comment focuses on the territorial dimension of the provider’s obligation to delete certain online content. So, the crucial question is whether an Austrian court may oblige Facebook Ireland to make a user’s comment globally inaccessible or whether the injunction is limited to the respective state of the court.

First of all, the AG addresses the issue of jurisdiction by referring to the CJEU’s eDate decision (C-509/09, C-161/10): „the court of a Member State may, as a general rule, adjudicate on the removal of content outside the territory of that Member State, as the territorial extent of its jurisdiction is universal. A court of a Member State may be prevented from adjudicating on a removal worldwide not because of a question of jurisdiction but, possibly, because of a question of substance.” (para. 86) This statement is, in fact, convincing as the CJEU decided in Bolagsupplysningen (C-194/16, para. 48) that the removal of content is a single and indivisible application which can only be made by a court with “universal” jurisdiction (see our earlier posts here and here).

AG Szpunar further states that the territorial dimension of an injunction cannot be determined by Articles 1, 7 and 8 of the Charter of Fundamental Rights because the original claim was not based on EU law and was therefore outside the scope of the Charter (para. 89). In addition, neither did the claimant invoke the European law on data protection (para. 90) nor does the Brussels Ibis Regulation require that an injunction issued by the court of a Member State also has effects in third states (para. 91). Thus, the AG’s – convincing – result is that EU law does not regulate the question of the territorial scope of an injunction regarding the violation of personality rights (para. 93).

However – and now the interesting part begins – AG Szpunar elaborates on the question of assessing cross-border violations of personality rights in case the CJEU did not agree with the inapplicability of EU law (para. 94-103). These considerations are not based on any legal text as, according to the AG, the question is not regulated by EU law.

Generally, AG Szpunar is not comfortable with a worldwide obligation to remove an online publication, “because of the illegality of that information established under an applicable law, [such an obligation] would have the consequence that the finding of its illegality would have effects in other States. In other words, the finding of the illegal nature of the information in question would extend to the territories of those other States” (para. 80). To avoid this effect, a worldwide obligation of removal could only be justified when all potentially applicable laws agree. Of course, this leads to disadvantages: “should a claimant be required, in spite of the practical difficulties, to prove that the information characterised as illegal according to the law designated as applicable under the conflict rules of the Member State in which he brought the action is illegal according to all the potentially applicable laws?” (para. 97). AG Szpunar leaves this question unanswered and continues to focus on the freedom of information: „the legitimate public interest in having access to information will necessarily vary, depending on its geographic location, from one third State to another. Thus, as regards removal worldwide, there is a danger that its implementation will prevent persons established in States other than that of the court seised from having access to the information.” (para. 99)

To avoid this conflict between the freedom of information and personality rights, AG Szpunar recommends the following: “However, owing to the differences between, on the one hand, national laws and, on the other, the protection of the private life and personality rights provided for in those laws, and in order to respect the widely recognised fundamental rights, such a court must, rather, adopt an approach of self-limitation. Therefore, in the interest of international comity […] that court should, as far as possible, limit the extraterritorial effects of its junctions concerning harm to private life and personality rights. The implementation of a removal obligation should not go beyond what is necessary to achieve the protection of the injured person. Thus, instead of removing the content, that court might, in an appropriate case, order that access to that information be disabled with the help of geo-blocking.” (para. 100) “Those considerations cannot be called into question by the applicant’s argument that the geo-blocking of the illegal information could be easily circumvented by a proxy server or by other means.” (Rz. 101)

First, it is noteworthy that the AG strongly emphasizes the freedom of information. So far, this aspect has been rather neglected in the discussion on violations of personality rights compared to freedom of speech and freedom of the press. However, including freedom of information in the balancing of interest reflects that a publication necessarily requires to be noted by at least one other person to have defamatory effects.

Second, the AG sees the solution in geo-blocking. This solution can of course be considered worthy to be debated further as geo-blocking is already a popular means used amongst host providers. However, it is not clear from the AG’s statement why the risk of circumvention should not be considered, although any order by a court to protect personality rights ought to be effective. In any case, this approach conflicts with the efforts of the European Union to restrict geo-blocking within the internal market (Regulation (EU) 2018/302) and should thus not be supported.

Third, the AG’s approach leads to a rather unsatisfactory result for the claimant. One should not forget how the internet generally and social media especially operate: interesting content will be shared and disseminated again and again. These new publications, however, will not be restricted by geo-blocking unless the host provider actively intervenes.

Fourth, it is doubtful if the AG’s approach is fit for reality: the idea of an approach of self-limitation for the courts based on the question “What is really necessary?” appears rather vague and not helpful for the deciding judges. This question is of a fundamental nature and requires an evaluative assessment. In order to achieve legal certainty, this crucial question of necessity should be answered by the legislature or at least the CJEU and should not be decided on a case-by-case-basis.

Fifth, one has to consider the effects of this proposal in the context of conflict of laws in a technical sense: if a claimant wanted Facebook to delete a publication globally and a court had “universal” jurisdiction according to eDate and Bolagsupplysningen, the court – in accordance with the suggestion of the AG – would have to apply the laws of each state from which the publication is still accessible. To make a long story short: Adopting the AG’s proposal means resurrecting the mosaic approach in conflict of laws! This appears to be a step backwards. Not only are the disadvantages of the mosaic principle in times of the internet commonly known, but also this approach contradicts the CJEU’s rejection of the mosaic principle regarding the question of jurisdiction in actions for the removal of publications (Bolagsupplysningen).

Finally, the question of the direct consequences of this opinion remains. It is likely that the CJEU will follow the first proposal of AG Szpunar that the question of the territorial dimension of an injunction for the violation of personality rights is not regulated by EU law and can thus not be decided by the CJEU. However, the AG’s opinion offers a new and interesting perspective on the issue of cross-border violations of personality rights which might give a boost to achieve international harmonisation.

Prepared by Cara North, external consultant to the Permanent Bureau of the Hague Conference on Private International Law (HCCH). This post reflects only personal views.

Today marks a momentous occasion (in the private international law world at least): the conclusion of the Diplomatic Session on the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (“Judgments Convention”) (a link to the final text of the Convention will be available soon at www.hcch.net). A Convention that, as noted by the Secretary General of the Hague Conference on Private International Law (“HCCH”) during his opening remarks for the Session, will be a “gamechanger for cross-border dispute settlement and an apex stone for global efforts to improve real and effective access to justice.”

The origins of the Judgments Convention date back to the early 1990s with a proposal from the United States of America for a mixed convention dealing with the exercise of jurisdiction and the recognition and enforcement of foreign judgments. After many years of hard work on a draft instrument, it was decided that such an instrument was indeed too ambitious, and it was preferable for the HCCH to focus on more specific projects that fell within the remit of that work. The HCCH refocussed its energies on an instrument concerning exclusive choice of court agreements and, with the benefit of the hard work undertaken in the early 1990s, the  Convention on Choice of Court Agreements (“Choice of Court Convention”) was concluded in 2005. That Convention entered in to force in 2015 with Mexico and the European Union becoming Contracting Parties. Since then, Singapore and Montenegro have followed suit and a few other States have either signed the Convention or otherwise indicated their intention to become party to the Convention.

Following the successful conclusion of the Choice of Court Convention, the HCCH once again took stock of potential future projects. In 2012, the train was set in motion for work and negotiations on the Judgments Convention to commence. At first it was decided that the work on the recognition and enforcement of foreign judgments would be undertaken alongside work on regulating international jurisdiction in civil or commercial matters. However, it was then decided that work would first proceed on drafting an instrument on the recognition and enforcement of judgments, with work on international jurisdiction to follow thereafter.

Some seven years and many meetings later, the Judgments Convention has been concluded. Sharing in the enthusiasm for this long-standing project Uruguay signed the Convention today.

The Objectives and Architecture of the Judgments Convention

Broadly speaking, like the Choice of Court Convention, the objectives of the Judgments Convention are (i) enhancing access to justice and (ii) facilitating cross-border trade and investment by reducing the costs and risks associated with cross-border dealings.

Building on the hard work undertaken in the early 2000s to complete the Choice of Court Convention and with the intention of the Judgments Convention operating as a sister instrument to the Choice of Court Convention, the Judgments Convention took, where appropriate, the basic structure and provisions of the Choice of Court Convention as its starting point. The working method adopted was to depart from the provisions of the Choice of Court Convention only where there was good reason to do so.

With that basic structure and working method in mind, work then focussed on the circumstances in which it would be largely uncontroversial for a civil or commercial judgment rendered in the courts of one Contracting State to be recognised and enforced in the courts of another Contracting State.

A comprehensive overview of the provisions in the Judgments Convention will be found in the forthcoming Explanatory Report to the Judgments Convention. This blog post serves to highlight just some of the key provisions.

A Brief Overview of Some Key Provisions

The Convention is separated into four chapters. Chapter I concerns the scope and definitions. Articles 1 and 2 provide the scope of the Convention (i.e., civil or commercial matters) and Article 2 of the Convention provides a number of exclusions from scope. In some respects, these exclusions mirror the exclusions found in the Choice of Court Convention. There are, however, some notable differences including the exclusion of privacy matters and the exclusion of intellectual property matters (a topic which was the subject of a considerable amount of consultation and discussion), as well as some notable inclusions such as certain tort matters, judgments ruling on rights in rem in immovable property and tenancies of immovable property as well as a very limited number of anti-trust (competition) law matters (emphasis added). Article 3 provides a number of important definitions, including the definition of “judgment”. The Convention provides for the circulation of final judgments, this includes both money and non-money judgments. This is of particular importance because while some jurisdictions recognise and enforce money judgments under national law, the traditional approach under others (e.g., under the common law system) is to decline to enforce non-money judgments.

Chapter II contains several core provisions. Most importantly, it identifies the judgments that are eligible for recognition and enforcement and sets out the process for the recognition and enforcement of those judgments.  In this respect, Article 4 contains the core obligation under the Convention. It provides that “a judgment given by a court of a Contracting State shall be recognised and enforced in another Contracting State in accordance with [Chapter 2 of the Convention].” Article 5 then sets out the categories of judgments that are eligible for recognition and enforcement. It contains an exhaustive list of indirect grounds of jurisdiction. These grounds fall into three broad categories based on (i) the connection between the State of origin and the defendant (e.g., habitual residence in the State of origin), (ii) jurisdiction based on consent (e.g., express consent to the court of origin in the course of proceedings) or (iii) a connection between the claim and the State of origin (e.g., place of performance of the contract).  Some of these grounds are commonly found in regional instruments concerning the recognition and enforcement of judgments in civil or commercial matters and/or are under the national law of many jurisdictions, for other jurisdictions the provisions will significantly broaden the basis on which courts will be obliged to recognise and enforce foreign judgments. At this juncture, it should be noted that the Convention, with one exception, does not limit recognition and enforcement under national law in any way. Article 15 of the Convention provides that, subject to Article 6, the Convention does not prevent the recognition or enforcement of judgments under national law. Article 6 contains one exclusive basis of jurisdiction concerning rights in rem in immovable property. It provides that where a judgment ruled on rights in rem in immovable property, that judgment will be recognised and enforced under the Convention if and only if the State of origin is the State in which the property is situated. Article 7(1) contains the specific grounds on which recognition or enforcement may be refused.  There are two categories of grounds (i) based on the way the proceedings took place in the State of origin (e.g., improper notice); or (ii) based on the nature and content of the judgment (e.g., where the judgment is inconsistent with a judgment given by a court of the State in which enforcement is sought).

Articles 8 to 11 provide for specific issues concerning the interpretation and application of the Convention and Articles 12 to 14 concern the process for recognition and enforcement of judgments under the Convention and largely mirror the relevant Choice of Court Convention provisions. As noted above, Article 15 – the last Article in Chapter II – is an important provision in that it cements the basic premise of the Judgments Convention i.e., that it sets the minimum standards for the recognition and enforcement of judgments among Contracting States.

Chapter III deals with general clauses and importantly includes a number of permissible declarations such as (i) declarations with respect to specific matters (Article 18) which enables a State to declare that it will not apply the Convention to a specific matter where that State has a strong interest in doing so (the same provision is found in Article 21 of the Choice of Court Convention); and (ii) declarations with respect to judgments pertaining to States (Article 19). Article 19 enables a State to make a declaration excluding the application of the Convention to judgments which arose from proceedings to which a State was a party, even where the judgment relates to civil or commercial matters.

Finally, Chapter IV of the Convention deals with final clauses, which concern important matters such as the process for ratification of the Convention and the establishment of treaty relations between Contracting States.

What’s next?

With the successful conclusion of the Judgments Convention, the HCCH can once again look to future projects in the area of international civil and commercial litigation. So, what’s next for the work programme of the HCCH in this space?

First, the HCCH is set to resume work on matters relating to jurisdiction. The 2019 Conclusions and Recommendations following the meeting of the Council on General Affairs and Policy (the governing body that sets the work programme of the HCCH) provide that in February 2020 the Experts’ Group will resume its work “addressing matters relating to jurisdiction with a view to preparing an additional instrument”.

Second, as a decision was made to exclude intellectual property matters from the scope of the Convention, the Diplomatic Session invited “the Council on General Affairs and Policy to consider, at its 2020 meeting, what, if any, further work it wishes the HCCH to undertake on the intersection between private international law and intellectual property”. This decision was recorded in the Final Act of the Judgments Convention.

Decades since work commenced in this area, the conclusion of the Judgments Convention is a significant milestone for the HCCH. But more importantly, with the exponential growth in international trade since the commencement of the Judgments Project, and the consequential corresponding increase in the number of transnational commercial disputes, it is now more important than ever for parties engaged in cross-border disputes to have effective access to justice. Once widely ratified, the Convention will go a long way toward enhancing access to justice and facilitating cross-border trade and investment.

Posted for the Permanent Bureau of the Hague Conference on Private International Law (HCCH)

Today, the delegates of the 22nd Diplomatic Session of the HCCH signed the Final Act of the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters – the birth of new treaty and an important day for global justice as well as for the HCCH.

The signing of the Final Act took place during a ceremony in the Great Hall of Justice in the Peace Palace in the presence of the Minister of Foreign Affairs of the Kingdom of the Netherlands, Mr Stef Blok.

The Minister emphasised that the new Convention: “enhances the legal certainty and predictability that is so important in international legal matters…”.

This new Convention will be essential to reducing transactional and litigation costs in cross-border dealings and to promoting international access to justice. It will increase certainty and predictability, promote the better management of transaction and litigation risks, and shorten timeframes for the recognition and enforcement of a judgement in other jurisdictions, providing better, more effective, and cheaper justice for individuals and businesses alike. A true gamechanger in international dispute resolution.

The Secretary General of the HCCH, Dr Christophe Bernasconi, stressed that the 2019 Judgments Convention fills an important gap in private international law. He also reminded delegates that with the signing of the Final Act, the work of promoting the 2019 Judgments Convention has only just begun. Professor Paul Vlas, President of the 22nd Diplomatic Session, echoed this sentiment and reiterated that the fast, wide and effective uptake of the Convention by the international community is its next milestone.

After the signing of the Final Act, Uruguay signed as first State the new 2019 Judgments Convention.

The text of the 2019 Judgments Convention, the HCCH’s 40th global instrument, will be available shortly on www.hcch.net.

Thank you Stephen McConnell for flagging Mitchell v. DePuy Orthopaedics, Inc., 2019 U.S. Dist. (Missouri) and Alani Golanski for doing the same for KGS v Facebook at the Alabama Supreme Court,

Both cases have plenty of scope for comparative analysis viz EU law and non-US common law. Which is why I had pondered them for use in exam essays but in the end did not – they might come in handy at a later stage. 

Readers best refer to the reports linked above for a full picture. In short, Mitchell involves the minimum contacts rule as well as ‘directing activities towards forum residents’: both have clear echos (and differences) in EU jurisdictional rules. On neither ground was specific (what the EU would call ‘special’) jurisdiction upheld.

In the Facebook case, Facebook argument is included on p.10-11. Claimant put forward a case for jurisdiction on p.13-14. She argues i.a. effects doctrine. Bryan J discussed both extensively p.15 ff and held that doing business in Alabama is not sufficient for personal jur., and (p.39) Facebook engagement with complaints not enough for specific jurisdiction.

In both cases the US Supreme Court’s decision in Bristol-Myers Squibb is cited as highly relevant authority.

Geert.

An ordinary case for the recognition of a German order appointing a legal guardian became a sheer nightmare for the applicant. It took her twelve years in total, three decisions in Germany and another six in Greece, for finally being recognized as an appointed legal guardian of her husband…

The case is primarily interesting for German colleagues, given that it concerns the 1961 bilateral treaty on the recognition and enforcement of judgments between the two states; however, it serves as a general pattern for the selection of the proper applicable law in similar cases, irrespective of the nationality of the foreign judgment. More here.

Posted for the Permanent Bureau of the Hague Conference on Private International Law:

Today, the HCCH finalised the text for a new multilateral treaty: the 2019 HCCH Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

The 2019 HCCH Judgments Convention will be a single global framework, enabling the free circulation of judgments in civil or commercial matters across borders. It will be essential to reducing the transactional and litigation costs in cross-border dealings and to promoting international access to justice. It will provide a legal regime that further increases certainty and predictability in cross-border dealings, promotes the better management of transaction and litigation risks, and which shortens timeframes for the recognition and enforcement of a judgement in other jurisdictions.

The 2019 HCCH Judgments Convention will provide better, more effective, and cheaper justice for individuals and businesses alike – a gamechanger in international dispute resolution.

The Final Act will be signed during a ceremony which will take place tomorrow, 2 July 2019, in the Great Hall of Justice in the Peace Palace.

Follow the HCCH on this journey with #2019HCCHDS and #2019HCCHJudgments

Adding to the list of recent German publications on Private International Law, the 3rd edition of Volume VI of the German NomosKommentar BGB has just been published.

The book edited by Heinz-Peter Mansel (University of Cologne) and Rainer Hüßtege (Higher Regional Court of Munich) offers detailed commentary on the Rome I, II, and III Regulations, the Succession Regulation (650/2012), the two new Regulations on matrimonial property regimes and property consequences of registered partnerships (2016/1103 and 2016/1104), and on the 2007 Hague Maintenance Obligations Protocol. The authors include both academics and practitioners, with the book seeking to not only make a contribution to legal scholarship but to also provide guidance for legal practitioners working on cross-border cases.