Droit international général

The new issue of “Rabels Zeitschrift für ausländisches und internationales Privatrecht  – The Rabel Journal of Comparative and International Private Law” (RabelsZ) has just been released. It contains the following articles:

Holger Fleischer, Spezialisierte Gerichte: Eine Einführung (Specialized Courts: An Introduction)

Specialized courts are on the rise. This introduction takes a look at different patterns and types of judical specialization both nationally and internationally. It also addresses potential advantages and disadvantages of a specialized judiciary.

Anatol Dutta, Gerichtliche Spezialisierung für Familiensachen (Specialized Courts for Family Matters)

In many jurisdictions, matters of family law are dealt with by specialized family courts. After outlining the different approaches from a comparative perspective (section I.), the article argues that a specialization in the area of family law is desirable. Family matters are not only self-contained from a substantive as well as procedural law perspective and clearly distinguishable from civil and commercial matters, but they are also characterised by a considerable degree of complexity which justifies judicial specialization (section II.). Furthermore, the dangers connected with specialized courts do not materialise in this area of law (section III.). However, a sensible specialization in family matters requires certain conditions as to the organisational structure and staffing of the competent courts (sections IV.1. and IV.3.). These conditions depend upon the role substantive family law assigns to courts. The paper argues that modern family law has abandoned its therapeutic attitude – family law matters are no longer regarded as a potential indication of pathologic families – therefore necessitating a legally oriented and conflict-solving judge rather than a court with a “therapeutic atmosphere”. Moreover, the jurisdiction of family courts has to be defined carefully – for example, regarding the question of whether matters of juvenile delinquency and succession matters are to be handled by family courts (section IV.2.). Finally, the paper alludes to a tendency to remove family matters from courts by shifting them to extra-judicial institutions or even to the parties and their party autonomy (section V.).

Matteo Fornaser, Streitbeilegung im Arbeitsrecht: Eine rechtsvergleichende Skizze (Dispute Settlement in Employment Matters: A Comparative Overview)

Labour disputes are resolved through a broad array of resolution mechanisms. Interests disputes which arise when collective bargaining fails to reach an agreement on the terms of employment are generally settled through extra-judicial conciliation and arbitration procedures. State courts have no role to play in this context since interests disputes are not adjudicated on the basis of legal norms. Rather, such disputes are settled by reaching a compromise which strikes a fair balance between the competing interests of the parties involved. Rights disputes, on the other hand, are generally resolved through specialized state courts and, though more rarely, private arbitration (e.g. in the U.S.). The emergence of these mechanisms has resulted from a general dissatisfaction with the performance of ordinary state courts in resolving labour disputes: employers have taken the view that ordinary state courts are not sufficiently acquainted with the customs and usages of employment, while employees have feared that the courts are biased in favour of employers. The creation of special courts, including lay judges appointed by employers and employees, has sought to tackle these problems and to meet the needs of labour and management. One important aim of labour courts is to facilitate access to justice for employees with a view to ensuring that litigants are on an equal footing. Thus, in most jurisdictions the labour court procedure is designed to reduce litigation costs, e.g. by expediting proceedings and by limiting the right of an employer to recover attorney’s fees from the employee-plaintiff in the event the claim is dismissed. Another way to ensure that proceedings before labour courts are speedy and inexpensive is to provide assistance to the parties so as to facilitate their reaching an amicable settlement. With regard to substantive law, labour courts play a dual role. First, they facilitate the enforcement of employee rights and, thus, complement substantive employee protection rules. Second, the emergence of specialized courts for the settlement of employment matters has had a deep impact on the development of labour law as a distinct field of law both in scholarship and practice.

Wolfgang Hau, Zivilprozesse mit geringem Streitwert: small claims courts, small claims tracks, small claims procedures (Small Claims: Courts, Tracks, Procedures)

In principle, constitutional standards require courts to deal with actions irrespective of the amount in controversy. But this does not necessarily mean that it is appropriate to let ordinary courts apply the standard rules of civil procedure in small claims cases. Rather, it is commonly understood that petty litigation raises particular problems and deserves special solutions. The question of how to design such organizational and/or procedural rules seems to gain momentum perpetually and across all jurisdictions. A comparative and historical analysis reveals an amazing variety of approaches and solutions, i.e. small claims courts, small claims tracks and small claims procedures. When providing special rules for small claims disputes, law-makers normally purport to facilitate access to justice, but more often than not try to cut costs. The latter aim, however, is not to be disregarded since affordability of justice is of utmost importance; moreover, there are numerous examples illustrating that procedural rules which emerged by necessity rather than by design may stand the test of time. Yet one should accept that both goals – removing barriers to justice and relieving the burden on the justice system ? are unlikely to be simultaneously achieved: you cannot have your cake and eat it. Both aims can be reached only if one is willing to cut down on the quality in the administration of justice (in particular as regards factfinding, the legal assessment of the case and the respondent’s rights to defend). But in a system governed by the rule of law, this is no less acceptable than the converse, i.e. restricting access to justice as a means of cost-efficiently providing a high-quality system to a reduced number of lawsuits. High standards of accessible justice come at a price: a reasonably funded and elaborated judicial infrastructure available even for small claims.

Holger Fleischer, Sebastian Bong and Sofie Cools, Spezialisierte Spruchkörper im Gesellschaftsrecht (Specialized Courts in Company Law)

Specialized courts are on the advance in many locations. This development is on display also in commercial law and company law. The present article cannot address the topic in its entirety and focuses instead on those judicial bodies that adjudicate internal corporate disputes. Three historic and comparative examples illustrate the particular types of institutions that have been formed. At the outset, the venerable German Divisions for Commercial Matters (Kammern für Handelssachen) are analysed, followed by likely the two best-known special courts for company law matters: the Delaware Court of Chancery and the Companies and Business Court (Ondernemingskamer) of the Amsterdam Court of Appeals. These three case studies are followed by a number of comparative observations on specialized judicial bodies in company law.

Stefan Reuter, Das Rechtsverhältnis im Internationalen Privatrecht bei Savigny (Savigny and Legal Relationships in Private International Law)

In the legal system conceptualised by Savigny, legal relationships serve as the starting point. Savigny defines a legal relationship as a relation between two people or between one person and an object as determined by legal rules. Accordingly, a legal relationship always has two elements: a material element (the specific facts in question) and a formal element (the legal rules). For example, where the facts of a concrete case involving two people match the conditions of the contract law rules, a legal relation exists between these two people. As compared to a legal relationship, a legal institution consists only of formal elements, namely legal rules, having the same subject matter. For example, all legal provisions regarding marriage form the legal institution of marriage. Although Savigny uses legal relationships as the starting point in both substantive law as well as in private international law, he creates different categories of legal relationships for each of them. Whereas in substantive law Savigny distinguishes between four categories (law of property, law of obligations, family law and law of succession) he adds a fifth category for the sake of private international law: legal capacity. In substantive law, Savigny defines legal capacity not as a legal relationship but only as a pre-condition of a legal relationship. This seems logical given that legal capacity cannot be described as a relation either between two people or between one person and an object, with such a relation being an essential condition according to Savigny’s definition of a legal relationship. Nevertheless, in private international law it is generally accepted that legal capacity needs its own, separate conflict rule. Legal capacity was therefore one of the subjects of private international law, and for this reason Savigny re-categorised it as a legal relationship for the purpose of conflict of laws. Ultimately, no advantages follow from having legal relationships serve as the starting point in private international law – as opposed to legal institutions or legal rules. Legal relationships do not result in a greater number of connections nor in a de-politicization of private international law. Rather, difficulties result when attempting to classify legal relations unknown to the lex fori.

The FernUniversität Hagen, Germany’s leading state-maintained institution in the field of distance learning, will host an international conference dealing with the legal implications of Brexit on 8-9 November 2017. The description of the event provided by the organizers reads as follows:

„Modelled on the philosophy of Ordo-Liberalism, an offshoot of classical liberalism, the European Union strongly relies on the existence and stable operation of a legal system that can regulate free market and help achieve the expected economic, social and political outcomes. After many decades of tight economic, social and political relations regulated by a common legal system under the umbrella of the EU, the British withdrawal from the Union could represent a serious blow for the aspirations of stability in the Continent, especially against the backdrop of the current European crisis. Many fear this event could open up a Pandora’s Box of severe problems in the EU. What impact will Brexit have on the rights of EU and UK citizens? How is it going to affect the legal regulation of present and future economic relations between the EU and the UK and how will this affect such relations in turn? These and similar questions will be addressed in this conference by four panels of international legal experts and researchers from five universities from Europe, UK and USA.“

For further information and registration, please click here.

And, while we’re at it, Michael White has published a highly interesting article on „How progress in UK/EU talks has hit an impasse over the ECJ“ in the „New European“. The author in particular reports on a conference that took place on 24 July 2017 at the Institute for Government (IfG) in London and which involved Michael-James Clifton, chief of staff to the President of the Court of Justice to the European Free Trade Area – the EFTA Court – Dr. Holger Hestermeyer, a German international disputes specialist at King’s College, London, Catherine Barnard, professor of EU law at Cambridge and the IfG’s own Raphael Hogarth.
You may read the article here.

On the occasion of his eightieth birthday on 30 July 2017, colleagues and friends have dedicated a liber amicorum to Professor Dr. Reinhold Geimer (University of Munich), who, as a Bavarian notary, is not only a highly respected legal practitioner, but also one of Germany’s most prolific and influential academic writers on international civil procedure. The Festschrift is edited by Reinhold Geimer’s good friend, co-editor and colleague Professor Dr. Rolf A Schütze (Tübingen/Stuttgart) and published by C.H. Beck (Munich; ISBN: 9783406710384). It contains more than 60 contributions (in German language), mostly on European and international civil procedural law, and totals 837 pages. A must-read for anyone interested in the subject! Further details will be available soon on the publisher’s website here.

On 24 November 2017 Prof. Dr. Andreas Schwartze from the University of Innsbruck will host the final conference of the EU-project “unalex – multilingual information for the uniform interpretation of the instruments of judicial cooperation in civil matters“.

The conference will discuss best practices of Member State courts, who base their case law on the consideration of judgments given by courts of other Member States, but also “undiscovered disputes” between courts of Member States, where relevant case law from other Member States was ignored.

The conference will provide the occasion for the first meeting of the European Legal Authors Network. The Network has started to form during the unalex project with the objective of developing systematic overviews on the application of the instruments of European private international law, where the case law of the courts of the Member States is comprehensively analysed and conflicting opinions discovered.

Further information will follow within the next weeks. We’ll keep you posted!

The year 2017 marks the 30th anniversary of China’s joining of the Hague Conference on Private International Law (HCCH). During these 30 years, huge progress has been made in the area of private international law both in China and around the world, and it has greatly facilitated cross-border movement of goods and capital, as well as interactions among peoples of different nations. At the same time, there are a number of challenges emerging. Different nations should work together, jointly meet those challenges and chart the right course for solutions.
With this in mind, the Ministry of Foreign Affairs of the People’s Republic of China and China Society of Private International Law (CSPIL), with the support of the HCCH, intend to jointly host the Global Forum on Private International Law at Wuhan University in Wuhan, China from 22 to 23 September 2017. The Forum will be organized by the Institute of International Law of the University, with the working language of English.
The theme of the Forum will be: Cooperation for Common Progress- the Evolving Role of Private International Law. The Forum will focus on the following topics:
(1) Common progress through private international law over 30 years: China, HCCH and the world;
(2) The Belt and Road Initiative and international legal cooperation;
(3) A global look at recent developments of private international law;
(4) The Hague Judgments Project.

Registration is open until 5 August, 2017. Further details may be found on the website of CSPIL here.

The text of the announcement above is largely drawn from the website of CSPIL.

Thank you Francesca Petronio, Fabio Cozzi & Francesco Falco for flagging the Italian Supreme Court’s judgment no. 16601/2017 of 5 July last. I have tried to locate the judgment in relevant databases but failed – however Francesca et al’s posting gives great overview.

In what is suggested to be a Copernican revolution, the Supreme Court has dropped the Italian legal order’s fundamental objection to punitive damages, which made it near-impossible to obtain recognition and enforcement of in particular US judgments containing such damages. The judgment not surprisingly contains a number of conditions in particular on the excessive nature of such damages.

The judges seem to have been swayed by developments both in Italy (statutory law in places allowing for more than simple compensation of material loss) and US law (truly excessive punitive damages having been reigned in).

Punitive damages are the one example always identified as one of the core applications of ordre public in European recognition and enforcement law. After the Italian example surely this may now be less obvious in many jurisdictions.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.16.

A short post mostly for the sake of completeness. In its second recent judgment on insureds as ‘protected category’ under the Brussels I Regulation, the CJEU held last week in C-340/16 Kabeg. Where an employee is injured and the employer is  statutory assignee of the rights of its employee, the employer is subrograted into the rights of the victim and can directly act against the insurer of the vehicle involved.

The Court’s less cautious approach to subrogation than it generally adopts, is influenced by Directive 2009/103, which obliges Member States to put in place such direct action. Article 18: ‘Member States shall ensure that any party injured as a result of an accident caused by a vehicle covered by insurance as referred to in Article 3 enjoys a direct right of action against the insurance undertaking covering the person responsible against civil liability.’

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2.

Investment arbitration forms a part of the international litigation arena. And it is a subject which is legally demanding and politically explosive. The 23rd Würzburg Days of European Law (“23. Würzburger Europarechtstage”) at the Julius-Maximilians-Universität Würzburg in Germany aim at an academically sound, open and maybe controversial debate of this topical issue. They will take place on 10 and 11 November  2017 and are organized by Prof. Dr. Markus Ludwigs and Prof. Dr. Oliver Remien, both from the University of Würzburg. The organizers are delighted to have found distinguished speakers and chairs initiating the discussions.

The conference language will be German, but here is an English translation of the program. The conference flyer with the program in German is available here.

Friday November 10th, 2017

13.00   Welcome Addresses

• Prof. Dr. Dr. h.c. Alfred Forchel, President of the University of Würzburg
• Prof. Dr. Eckhard Pache, Dean of the Faculty of Law

13.15   Welcome and Introduction into the Subjects

• Prof. Dr. Markus Ludwigs
• Prof. Dr. Oliver Remien

13.30   Sovereignty and Investment Arbitration Prof. Dr. Axel Flessner, Humboldt University Berlin

TTIP, CETA & Co. – The Future of Free Trade Agreements in a Changed Political Environment, MdB Prof. Dr. Heribert Hirte, LL.M., Member of the Bundestag, University of Hamburg

14.30   Statement and Discussion of the Papers, Prof. Dr. Dr. Rainer Hofmann, University of Frankfurt/Main

15.15   Coffee Break

15.45   A Multilateral Investment Court as a Progress for the Rule of Law?, Prof. Dr. Isabel Feichtner, LL.M., University of Würzburg

16.15   Statement and Discussion of the Paper, Prof. Dr. Markus Krajewski, University of Erlangen-Nürnberg

16.45   Coffee Break

17.15   Compensation for Infringements and Takings of Property after the Judgment of the Bundesverfassungsgericht (German Federal Constitutional Court) concerning the Stop to Nuclear Power, Justice Fed. Const. Ct. Prof. Dr. Andreas L. Paulus, University of Göttingen

17.45   Investment Protection Arbitration and EU State Aid Law, Prof. Dr. Marc Bungenberg, LL.M., Saarland University

18.15   Statement and Discussion of the Papers, Prof. Dr. Christian Tietje, LL.M., University of Halle-Wittenberg

19.00   Reception in the Entrance Hall in front of the Neubaukirche

Saturday November 11th, 2017

9.00   “EU-only”? – The Division of Competences between the EU and the Member States for the Conclusion of Free Trade Agreements, Prof. Dr. Michael J. Hahn, LL.M., University of Bern

Are Investment Protection Agreements between EU-Member States a Relict Contrary to EU-Law?, Dr. Thomas Wiedmann, European Commission, Brussels

10.00   Statement and Discussion of the Papers, Prof. Dr. Armin Hatje, University of Hamburg

10.45   Coffee Break

11.15   Enforcement According to ICSID Convention and Setting Aside, Recognition and Enforcement According to the New York Convention, Prof. Dr. Christian Wolf, University of Hannover

Transparency and Third Person Involvement by Way of an Amicus Curiae According to UNCITRAL and ICSID Rules and Arbitration Practice, Dr. Sören Segger, University of Würzburg

12.15   Statement and Discussion of the Papers, Dr. Stephan Wilske, LL.M., GleissLutz Law Firm

13.00   Concluding Remarks by the Organizers

Everybody is cordially invited to participate. Participation is free of charge. Please register under http://www.europarechtstage.de.

In 2010, Professors Franco Ferrari and Stefan Kroell organized a seminar on “conflict of laws in international commercial arbitration”, conscious of the fact that every arbitration raises a number of ‘conflict of laws’ problems both at the pre-award and post-award stage. Unlike state court judges, arbitrators have no lex fori in the proper sense, providing the relevant conflict rules to determine the applicable law. This raises the question of which conflict of laws rules apply and, consequently, the extent of the freedom arbitrators enjoy in dealing with this and related issues. The papers presented at that conference were later published in a book co-edited by the two organizers of said conference. Professors Ferrari and Kroell are now preparing a new edition of the book, which has attracted a lot of attention over the years. Apart from updated versions of the papers published in the first edition (with the following titles: “Conflicts of law in international arbitration: an overview” by Filip De Ly, “The law applicable to the validity of the arbitration agreement: a practioner’s view” by Leonardo Graffi, “Applicable laws under the New York Convention” by Domenico Di Pietro, “Jurisdiction and applicable law in the case of so-called pathological arbitration clauses in view of the proposed reform of the Brussels I-Regulation” by Ruggiero Cafari Panico, “Arbitrability and conflict of jurisdictions: the (diminishing) relevance of lex fori and lex loci arbitri” by Stavros Brekoulakis, “Extension of arbitration agreements to third parties: a never ending legal quest through the spatial-temporal continuum” by Mohamed S. Abdel Wahab, “The effect of overriding manadatory rules on the arbitration agreement” by Karsten Thorn and Walter Grenz, “Arbitration and insolvency: selected conflict of laws problems” by Stefan Kröll, “Getting to the law applicable to the merits in international arbitration and the consequences of getting it wrong” by Franco Ferrari and Linda Silberman, “Manadatory rules of law in international arbitration” by George A. Bermann, “Conflict of overriding mandatory rules in arbitration” by Anne-Sophie Papeil, “The law applicable to the assignment of claims subject to an arbitration agreement” by Daniel Girsberger, “The laws governing interim measures in international arbitration” by Christopher Boog), the new edition seeks to include papers on new topics, such as the law governing arbitrators’ liability, the law governing issues of characterization in commercial and investment arbitration, the law governing limitation periods (including their characterization as procedural or substantive), the law governing the taking of evidence (including the characterization of evidence as procedural or substantive, its admissibility and weight), the law governing damages (including whether different laws govern heads of damages and quantification), the law governing issues fees and costs, the law governing res iudicata, the law governing privilege, the law governing ethical obligations (both of arbitrators and counsel), the role of the Hague Principles on Choice of Law in international arbitration).

The editors welcome the submission of papers on any of the aforementioned topics as well as other topics related to the relationship between conflict of laws and international commercial arbitration. If interested, please submit an abstract (2000 words) and a basic bibliography to Professors Ferrari (franco.ferrari@nyu.edu) and Kroell (stefan.kroell@law-school.de) for acceptance by 1 October 2017. If accepted, the paper will need to be submitted (in blue book format) by 1 February 2018. 

The book Treatment of Foreign Law – Dynamics towards Convergence? (Springer, 2017), edited by Professor Yuko Nishitani, has just been published. It includes one general report and 30 national reports on the treatment of foreign law in diverse jurisdictions. Additionally, the book includes a report by the Hague Conference on Private International Law on the state and progress of its envisaged project on the treatment of foreign law. The general report and most of the individual reports were prepared for the 2014 Conference of the International Academy of Comparative Law held in Vienna.

The abstract reads as follows:

This work presents a thorough investigation of existing rules and features of the treatment of foreign law in various jurisdictions. Private international law (conflict of laws) and civil procedure rules concerning the application and ascertainment of foreign law differ significantly from jurisdiction to jurisdiction. Combining general and individual national reports, this volume demonstrates when and how foreign law is applied, ascertained, interpreted and reviewed by appeal courts. Traditionally, conflicts lawyers have been faced with two contrasting approaches. Civil law jurisdictions characterize foreign law as “law” and provide for the ex officio application and ascertainment of foreign law by judges. Common law jurisdictions consider foreign law as “fact” and require that parties plead and prove foreign law. A closer look at various reports, however, reveals more differentiated features with their own nuances among civil law jurisdictions, and the difference of the treatment of foreign law from other facts in common law jurisdictions. This challenges the appropriacy of the conventional “law-fact” dichotomy. This book further examines the need for facilitating access to foreign law. After carefully analyzing the benefits and drawbacks of existing instruments, this book explores alternative methods for enhancing access to foreign law and considers practical ways of obtaining information on foreign law. It remains to be seen whether and the extent to which legal systems around the world will integrate and converge in their treatment of foreign law.

Highly recommendable!

Further information, including a table of contents, is available here.

Another one from the exam queue. I reported earlier on Szpunar AG’s Opinion in C-54/16 Vinyls Italia – readers may want to refer to that post before reading on. The case concerns the extent to which a bona fide creditor may insulate payments made to it by the insolvent debtor, to the detriment of the collectivity of the creditors, using choice of law for its contract with the debtor away from the lex concursus. The Court held on 8 June, much along the lines of its AG and earlier precedent especially Nike with respect to anti-avoidance actions. The judgment therefore is not of great novelty for this part of the insolvency Regulation. It is on the other hand of crucial importance for the interpretation of ‘international’ in European private international law.

Firstly, whether the court hearing the insolvency proceedings can or must raise the Article 13 (now 16) even if the party profiting from the insulation of its payments from the insolvency, has failed expressly to do so in its submissions: this, the CJEU held, is a matter of procedure, not harmonised in the Insolvency Regulation and lex fori therefore, subject to the usual condition that effet utile is guaranteed and that EU law is equally applied as national law.

The Court had already held in Nike that the defendant in an anti-avoidance (Pauliana) action has to prove both the facts from which the conclusion can be drawn that the act is unchallengeable and the absence of any evidence that would militate against that conclusion (at 25). The Court in Vinyls Italia qualifies that statement: the party bearing the burden of proof must show that, where the lex causae makes it possible to challenge an act regarded as being detrimental, the conditions to be met in order for that challenge to be upheld, which differ from those of the lex fori concursus, have not actually been fulfilled. However defendant does not have to show that the lex causae does not provide, in general or in the abstract, any means to challenge the act in question: such means of challenging the act almost always exist, at least in the abstract, and such strict interpretation would therefore deprive Article 13 (now 16) of its effectiveness (at 38). Of course how wide exactly the net of voidness needs to be cast, is not entirely clear from the judgment.

The final question then deals with the possibility of relying on (now) Article 16 in the situation provided for in Article 3(3) of the Rome I Regulation, that is to say, where all the elements relevant to the situation in question between the parties to a contract are located in a country other than the country whose law is chosen by those parties. Now, the Rome I Regulation does not ratione temporis apply to the facts at issue and on the similar provisions of the Rome Convention, the referring court is not entitled to ask questions. The CJEU therefore decides to simply reply to the question of thins being a purely domestic contract, by reference to Article 16 of the insolvency Regulation only. It nevertheless however uses both Regulation and Convention a contrario: both existed at the time of adoption of the Insolvency Regulation. The latter does not include an Article 3(3) type provision. That it does not, must, the Court held, mean that the Insolvency Regulation so no need at all ao limit the use of lex contractus for insulation reasons, even in the case of purely domestic contracts.

There is however one limit: Fraus (omnia corrumpit) aka abuse of (EU) law. Here, the Court refers to its findings last summer in C‑423/15 Kratzer. EU law cannot be relied on for abusive or fraudulent ends. A finding of abuse requires a combination of objective and subjective elements. First, with regard to the objective element, that finding requires that it must be apparent from a combination of objective circumstances that, despite formal observance of the conditions laid down by Community rules, the purpose of those rules has not been achieved. Second, such a finding requires a subjective element, namely that it must be apparent from a number of objective factors that the essential aim of the transactions concerned is to obtain an undue advantage.

Here, Article 16 may be disregarded only in a situation where it would appear objectively that the objective pursued by that application, in this context, of ensuring the legitimate expectation of the parties in the applicability of specific legislation, has not been achieved (a tough condition of the lex contractus is wisely chosen), and that the contract was made subject to the law of a specific Member State artificially, that is to say, with the primary aim, not of actually making that contract subject to the legislation of the chosen Member State, but of relying on the law of that Member State in order to exempt the contract, or the acts which took place in the performance of the contract, from the application of the lex fori concursus. In this respect, (at 55) choice of law of a Member State other than the Member State in which parties are established does not create any presumption regarding an intention to circumvent the rules on insolvency for abusive or fraudulent ends.

The findings on fraus amount to strong support for a wide interpretation of the concept ‘international’ in EU private international law. A development to be applauded. They also make it very difficult within the context of Article 13 (now 16) successfully to mount a challenge of payments detrimental to the collectivity. This aspect of the case is what i.a. Gilles Lindemans objects to in the judgment. However the CJEU logic I suppose lies in what the it sees firmly as the object and purpose of Article 16: it protects the legitimate expectations of the party who has benefited from an act detrimental to all the creditors. In some way it prevents contractual sclerosis for parties suspected of being close to payment issues. Securitisation is facilitated if the lex causae is fixed, independent of the lex concursus. Not just fraus (a very improbable route now) but probably more importantly the burden of proof per C-310/14 Nike, protects the collectivity.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.7.1. Chapter 3, Heading 3.2.8.1.

The revised European Small Claims Procedure entered into force on July 14 (see Regulation (EU) 2015/2421 of the European Parliament and of the Council of 16 December 2015 amending Regulation (EC) No 861/2007 establishing a European Small Claims Procedure and Regulation (EC) No 1896/2006 creating a European order for payment procedure). According to the Commission’s Fact Sheet, Small Claims Procedure becomes even simpler, faster and more user friendly. Which means:

1. The European Small Claims Procedure is more widely available. The threshold rises to €5 000 from €2 000.

2. Citizens can use online procedures to avoid unnecessary travelling to courts The new rules enhance the use of technology and will limit unnecessary travelling. In practice this means:

• kicking-off the procedure online;
• using video-conferencing for communication;
• limiting physical presence only to the cases when the court cannot make a decision based on written documents;
• accepting documents sent by email by the court.

3. Cutting court fees: Fees can be very high in small claims cases and sometimes higher than the value of the claim. With the new rules, the court fees have to be proportionate to the value of the claim.

C-433/16 BMW v Acacia follows a similar pattern as yesterday’s post on the Trademark Regulation. In Community designs, too, intellectual-property specific secondary law varies the overall jurisdictional regime of Brussels I (Recast), here: Regulation 6/2002 on Community designs. Reference is best made to the judgment itself for readers to appreciate how exactly the general regime is part-incorporated.

In general, the jurisdictional rule for Community designs incorporates less of the general regime of the Brussels I (Recast) than its Trademark Regulation. (Current) Article 24(4)’s exclusive jurisdictional rule for instance is made inapplicable for designs. So too is (now) Article 7(2)’s rule on tort.

Acacia brought a proactive action against BMW before the Tribunale di Napoli (District Court of Naples (Italy)) seeking a declaration of non-infringement of Community designs, of which BMW is the proprietor, for alloy rims for automobile wheels, as well as a declaration of abuse of a dominant market position and unfair competition by BMW. The action clearly anticipated counter action by BMW. Acacia also sought an injunction to prevent BMW from taking any action hindering the marketing of the replica rims. (Of note generally is that not all Member States allow for actions in non-infringement. See here for a review of the implications of same).

Regulation 6/2002 however provides that actions for declaration of non-infringement (Article 81(b) of that regulation) may be brought, where the defendant is domiciled in an EU Member State, before the Community design courts of that Member State alone. These courts are specifically assigned by the Member States. Article 7(2)’s rule on tort as noted does not apply and the CJEU does not take long to hold exactly that. Declaration of abuse of a dominant position and of unfair competition that are connected to actions for declaration of non-infringement of Community design, likewise cannot be based on Article 7(2) Brussels I Recast.

A declaration of non-infringement under Article 81(b) of the Community design Regulation must, when the defendant is domiciled in an EU Member State, be brought before the Community design courts of that Member State, except where there is choice of court or voluntary appearance (Article 25 cq 26 of the Recast), or within the rules of lis pendens and related actions. As for Article 26, voluntary appearance cannot be deduced from the fact that the defendant appears to contest jurisdiction, even if at the same time they also argue to the merits: this is held again by the CJEU in line with earlier case-law.

The Court’s judgment is neither shocking nor surprising. It is good however to be reminded of the jurisdictional rules on intellectual property.

Geert.

Jurisdiction in intellectual property cases is notoriously complex and frankly opaque, in the case of the EU exacerbated by the impact of secondary law. My colleague Marie-Christine Janssens has a great overview in the Belgian reports at the Congress of Washington of the International Academy of Comparative Law. Brussels: Bruylant, 611-652.

At stake in C-617/15 Hummel v Nike was Regulation 207/2009, in the meantime superseded by Regulation 2015/2424.  Article 94 of the former, entitled ‘Application of Regulation … No 44/2001’, contains rules on jurisdiction and procedure in legal actions relating to EU trade marks. It states that ‘Unless otherwise specified in this Regulation, Regulation … No 44/2001 shall apply to proceedings relating to [EU] trade marks and applications for [EU] trade marks, as well as to proceedings relating to simultaneous and successive actions on the basis of [EU] trade marks and national trade marks.’ Article 94 essentially varies, to some degree, the jurisdictional rules of the Brussels I (now Recast) Regulation.

Now, what needed specific interpretation was Article 97’s

‘1.      Subject to the provisions of this Regulation as well as to any provisions of Regulation … No 44/2001 applicable by virtue of Article 94, proceedings in respect of the actions and claims referred to in Article 96 shall be brought in the courts of the Member State in which the defendant is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment. 

2.       If the defendant is neither domiciled nor has an establishment in any of the Member States, such proceedings shall be brought in the courts of the Member State in which the plaintiff is domiciled or, if he is not domiciled in any of the Member States, in which he has an establishment.

3.      If neither the defendant nor the plaintiff is so domiciled or has such an establishment, such proceedings shall be brought in the courts of the Member State where [EUIPO] has its seat.

More specifically, the notion of ‘establishment’: Under which circumstances is a legally distinct second-tier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the EU to be considered as an “establishment” of that undertaking.

Nike, which has its seat in the US, is the ultimate holding company of the Nike Group, which sells sports goods across the world. Nike Retail, which has its seat in the Netherlands, also belongs to that group. Nike Retail operates the website on which Nike goods are advertised and offered for sale, in Germany in particular. In addition to online sales on that website, Nike goods are sold in Germany through independent dealers supplied by Nike Retail. Wholesale or retail sales in Germany are not directly conducted by the companies in the Nike Group.

Nike Deutschland GmbH, which has its seat in Frankfurt am Main and is not a party to the main proceedings, is a subsidiary of Nike Retail. Nike Deutschland does not have its own website and does not sell goods to end consumers or intermediaries. However, it negotiates contracts between intermediaries and Nike Retail, and supports Nike Retail in connection with advertising and the performance of contracts. Nike Deutschland also provides aftersales service for end consumers.  Hummel Holding claims that some Nike products, in particular basketball shorts, infringe its trade mark and that most of the infringements took place in Germany. It brought an action against Nike and Nike Retail before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany), which ruled that it had jurisdiction on the ground that Nike Deutschland was an establishment of Nike, but dismissed the action on the merits. This judgment is now being appealed.

The CJEU first of all (at 22 ff) warns for caution in the conjoined application of concepts used in both the Trademark Regulation and the Brussels I (Recast). The Trademark Regulation is, so the Court says specifically, lex specialis and one cannot therefore assume the same words mean the same thing. Readers of this blog are aware that I always give the CJEU thumbs-up when it mentions this (such as in Kainz), however the Court itself very regularly ignores its own instruction when the discussion involves the application of Brussels and Rome.

The point of Article 97, the Court notes (at 37) is to ensure that a court within the EU always has jurisdiction to hear and determine cases concerning the infringement and validity of an EU trade mark. In line with the AG’s suggestion the Court consequently opts for a broad interpretation of the concept, holding that the concept requires (1) a certain real and stable presence, from which commercial activity is pursued, as manifested by the presence of personnel and material equipment. (2) In addition, that establishment must have the appearance of permanency to the outside world, such as the extension of a parent body. However what is not required is for that establishment to have legal personality. Third parties must thus be able to rely on the appearance created by an establishment acting as an extension of the parent body. Furthermore and importantly, it is, in principle, irrelevant for the purposes of Article 97(1) of Regulation No 207/2009 whether the establishment thereby determined has participated in the alleged infringement.

A word of warning evidently: given the Court’s emphasis on the context of Article 97, with a view to its wide application, readers must not be tempted to read the judgment’s view on the concept of ‘establishment’ as applying across the board in EU conflicts law, let alone EU law as a whole.

Geert.

…

Expect a series of blog postings in the next few weeks on developments which occurred a few weeks or even months back. I have been squirreling away a series of judgments and other developments, with a view to exam season. Some of them I did use in my exam papers – some of them I did not.

Cooper v. Tokyo Electric Power [plaintiffs in the case are a group of service members in the U.S. Navy who were deployed to Operation Tomodachi, a relief effort in the immediate aftermath of the massive earthquake and tsunami; they allege they were exposed to radiation during the deployment] by the US Court of Appeals, ninth circuit, is a direct (and rare in its directness) example of how jurisdictional rules are used to help co-ordinate a country’s diplomatic efforts. In this particular case, the Court gives direct support to the State Department’s view that in order for others to be encouraged to accede to the Convention on Supplementary Compensation for Nuclear Damage (“CSC”), its main jurisdictional rule (granting exclusive jurisdiction to the country of the locus delicti commissi) must not be achievable via an application of comity in the US courts. For further background and overview see  Elina Teplinsky, and Meghan Claire Hammond here.

That plaintiffs are US citisens plays a major role in the court ruling out forum non conveniens.

In some of the corporate social responsibility /alien tort statute cases that I have reported on in the blog (particularly, Rio Tinto), foreign policy openly plays a role, too, and in Kiobel itself, in the lower courts, the impact of jurisdiction on US foreign policy was debated, too. It is always refreshing to see courts highlight the issue openly. For in many jurisdictions, such obvious impacts are brushed under the carpet.

Geert.

The European Court of Justice held last week in C‑368/16, Assens Havn. It confirmed privity of choice of court in the event of subrogation of the victim in the rights of the insured. The victim is not bound by choice of court between insurer and tortfeasor:

At 41: ‘The extension to victims of the constraints of agreements on jurisdiction based on the combined provisions of Articles 13 and 14 of Regulation No 44/2001 could compromise the objective pursued by Chapter II, Section 3, thereof, namely to protect the economically and legally weaker party.

That the CJEU confirms privity of contractual choice of court is no surprise: see most recently Leventis. In the case of insurance contracts the issue is slightly less obvious for unlike in the case of consumers and employees, the legal presumption of weakness often does not represent commercial reality.

Whether the subrogated party can make use of the choice of court clause in the underlying contract was not sub judice in the judgment.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2.

This post by Prof. Christopher Kuner was published last week at the European Law Blog. The hearing of the Schrems case at the CJEU will take place next Wednesday; for this reason (but not only: the post is worth reading) I decided to reproduce it here. 

Introduction

Much discussion of foreign law in the work of the Court of Justice of the European Union (CJEU) has focused on how it deals with the rules, principles, and traditions of the EU member states. However, in its data protection judgments a different type of situation involving foreign law is increasingly arising, namely cases where the Court needs to evaluate the law of third countries in order to answer questions of EU law.

This is illustrated by its judgment in Schrems (Case C-362/14; previously discussed on this blog, as well as here), and by Opinion 1/15 (also discussed on this blog, part I and part II), a case currently before the CJEU in which the judgment is scheduled to be issued on 26 July. While these two cases deal with data protection law, the questions they raise are also relevant for other areas of EU law where issues of third country law may arise. The way the Court deals with third country law in the context of its data protection judgments illustrates how interpretation of EU law sometimes involves the evaluation of foreign legal systems, despite the Court’s reluctance to admit this.

The Schrems judgment

The Schrems case involved the validity of the EU-US Safe Harbour arrangement, a self-regulatory mechanism that US-based companies could join to protect personal data transferred from the EU to the US. Article 25(1) of the EU Data Protection Directive 95/46/EC allows transfers of personal data from the EU to third countries only when they provide an ‘adequate level of data protection’ as determined by a formal decision of the European Commission. On 26 July 2000 the Commission issued such a decision finding that the Safe Harbour provided adequate protection.

The plaintiff Schrems brought suit in Ireland based on the data transfer practices of Facebook, which was a Safe Harbour member. Schrems claimed that the Safe Harbour did not in fact provide adequate protection, and that the Irish Data Protection Commissioner (DPC) should reach this conclusion notwithstanding the Commission adequacy decision.

On 18 June 2014 the Irish High Court referred two questions to the CJEU dealing with the issue of whether the DPC could examine the validity of the Safe Harbour. In its judgment of 6 October 2015, the CJEU invalidated the Commission’s decision and held that providing an adequate level of data protection under EU law requires that third country law and standards must be ‘essentially equivalent’ to those under EU data protection law (para. 73). A more detailed, general analysis of Schrems can be found in my article in the current issue of the German Law Journal.

Third country law under Schrems and Opinion 1/15

As far as third country law is concerned, the Schrems judgment requires an individual to be allowed to bring a claim to a data protection authority (DPA) that a Commission adequacy decision is invalid, after which he or she must be able to contest in national court the DPA’s rejection of such a claim, and the national court must make a preliminary reference to the CJEU if it finds the claim to be well-founded (para. 64). Thus, the Court practically invites individuals to bring claims to DPAs regarding the adequacy of protection in third countries, and requires national courts to refer them to the CJEU for a preliminary ruling.

Under the judgment, the standard for determining the validity of a Commission decision is whether third country law is ‘essentially equivalent’ to EU law, which by definition must involve an examination of the third country law with which EU law is compared.

The Court has stated that it does not pass judgment on the law of third countries. In the interview he gave to the Wall Street Journal in which he discussed the Schrems judgment, CJEU President Lenaerts said that ‘We are not judging the U.S. system here, we are judging the requirements of EU law in terms of the conditions to transfer data to third countries, whatever they be’. Advocate General Mengozzi also reiterated this point in para. 163 of his Opinion in Opinion 1/15.

However, it is surely disingenuous to claim that the Schrems case did not involve evaluation of US legal standards. First of all, the need to review third country law is logically inherent in the evaluation of a Commission decision finding that such law provides protection essentially equivalent to that under EU law. Secondly, the CJEU in Schrems did indeed consider US law and intelligence gathering practices and their effect on fundamental rights under EU law, as can be seen, for example, in its mention of studies by the Commission finding that US authorities were able to access data in ways that did not meet EU legal standards, in particular the requirements of purpose limitation, necessity, and proportionality (para. 90). Indeed, whether US law adequately protects against mass surveillance by the intelligence agencies was a major issue in the case, as the oral hearing before the Court indicates.

Opinions of Advocates General in data protection cases also illustrate that the CJEU sometimes examines third country law when answering questions of EU law. For example, the opinion of Advocate General Bot in Schrems contains an evaluation of the scope of the supervisory powers of the US Federal Trade Commission (paras 207-208). And in Opinion 1/15, Advocate General Mengozzi indicated that provisions of Canadian law had been brought before the CJEU (para. 320), and that some of the parties’ contentions required interpretation of issues of Canadian law (para. 156). As a reminder, Opinion 1/15 is based on a request for an opinion by the European Parliament under Article 218(11) TFEU concerning the validity of a draft agreement between the EU and Canada for the transfer of airline passenger name records, which shows the variety of situations in which questions of third country law may come before the CJEU.

Future perspectives

It is inevitable that the CJEU will increasingly be faced with data protection cases that require an evaluation of third country law. For example, the Commission indicated in a Communication of January 2017 that it will consider issuing additional adequacy decisions covering countries in East and South-East Asia, India, Latin America, and the European region. In light of the Schrems judgment, challenges to adequacy decisions brought before a DPA or a national court will often result in references for a preliminary ruling to the CJEU. Furthermore, the interconnectedness of legal orders caused by globalization and the Internet may also give rise to cases in other areas of law where evaluation of third country law is necessary to answer a question of EU law.

Since in references for a preliminary ruling the determinations of national courts will generally be accepted by the CJEU, and a request to intervene in a preliminary ruling procedure to submit observations on third country law is not possible, there is a risk that a judgment in such a case could be based on an insufficient evaluation of third country law, such as when the evidence concerning such law is uncontested and is presented only by a single party. In fact, the evidence concerning US law in the Schrems judgment of the Irish High Court that resulted in the reference for a preliminary ruling to the CJEU was in effect uncontested. By contrast, in the so-called ‘Schrems II’ case now underway in Ireland, the Irish courts have allowed oral and written submissions on US law and practice by a number of experts.

Scholarship and practice in private international law can provide valuable lessons for the CJEU when it needs to evaluate third country law. For example, situations where evidence concerning foreign law is presented by a single party and is uncontested have been criticized in private international law scholarship as a ‘false application of foreign law’, because such evidence can prove unreliable and result in unequal treatment between foreign law and the law of the forum (see the excellent 2003 lectures of Prof. Jänterä-Jareborg in volume 304 of the Collected Courses of the Hague Academy of International Law regarding this point).

If the CJEU is going to deal increasingly with third country law, then it should at least have sufficient information to evaluate it accurately. It seems that the CJEU would view third country law as an issue of fact to be proved (see in this regard the article by Judge Rodin in the current issue of the American Journal of Comparative Law), which would seem to rule out the possibility for it to order ‘measures of inquiry’ (such as the commissioning of an expert’s report concerning third country law) under Article 64(2) of its Rules of Procedure in a reference for preliminary ruling for the interpretation of Union law. However, the Court may order such measures in the scope of a preliminary ruling on the validity of a Union act, which would seem to cover the references for a preliminary ruling mandated in Schrems(see para. 64 of the judgment, where the CJEU mandates national courts to make a reference to the Court ‘for a preliminary ruling on validity’ (emphasis added)). Thus, the CJEU may have more tools to investigate issues of third country law than it is currently using.

It would also be helpful if the Commission were more transparent about the evaluations of third country law that it conducts when preparing adequacy decisions, which typically include legal studies by outside academics. These are usually not made public, although they would provide useful explanation as to why the Commission found the third country’s law to be essentially equivalent to EU law.

Conclusion

In conclusion, the CJEU should accept and be more open about the role that third country law is increasingly playing in its data protection judgments, and will likely play in other areas as well. Dealing more openly with the role of third country law and taking steps to ensure that it is accurately evaluated would also help enhance the legitimacy of the CJEU’s judgments. Its upcoming judgment in Opinion 1/15 may provide further clarification of how the CJEU deals with third country law in its work.

Over the course of the last decades the European legislature has adopted a total of 18 Regulations in the area of private international law (including civil procedure). The resulting substantial degree of legislative unification has been described as the first true Europeanisation of private international law and even as a kind of “European Choice of Law Revolution”. However, until today it is largely unclear whether the far-reaching unification of the “law on the books” has turned private international law into a truly European ”law in action”: To what extent is European private international law actually based on uniform European rules common to all Member States rather than on state treaties or instruments of enhanced cooperation? Is the way academics and practitioners analyse and interpret European private international law really different from previously existing domestic approaches to private international law? Or is the actual application and interpretation of European private international law rather still influenced or even dominated by national legal traditions, leading to a re-fragmentation of a supposedly uniform body of law?

In order to discuss these (and other) questions Jürgen Basedow (Max Planck Institute Hamburg), Jan von Hein (University of Freiburg), Eva-Maria Kieninger (University of Würzburg) and Giesela Rühl (University of Jena) will be hosting a conference in Berlin on 2/3 March 2018.

Registration will open later this year (We’ll keep you posted!). Here is the Programme:

How “European” is European Private International Law?

Friday, 2 March 2018

9.00 am  Registration

9.30 am  Welcome addresses: The Europeanisation of Private International Law

• Prof. Dr. Dr. h.c. Jürgen Basedow, Max Planck Institute Hamburg (Germany)
• Prof. Dr. Giesela Rühl, University of Jena (Germany)
• Dr. Andreas Stein, Head of Unit, DG Justice and Consumers, European Commission

1st Part: Europeanness of Legal Sources

10.00 am   The relationship between EU and international Private International Law instruments

• Speaker: Prof. Pietro Franzina, Università degli Studi di Ferrara (Italy)
• Commentator: Prof. Dr. Dr. h.c. Jürgen Basedow, Max Planck Institute Hamburg (Germany)

10.45 am   Discussion

11.15 am   Coffee break

11.45 am   The relationship between EU and Member State Private International Law

• Speaker: Prof. Johan Meeusen, Universiteit Antwerpen (Belgium)
• Commentator: Prof. Dr. Jan von Hein, University of Freiburg (Germany)

12.30 pm   Discussion

1.00 pm    Lunch break

2nd Part: Europeanness of Actual Court Practice

2.00 pm   The application of European Private International Law and the ascertainment of foreign law

• Speaker: Prof. Marta Requejo Isidro, Max Planck Institute Luxembourg (Luxembourg)
• Commentator Prof. Paul Beaumont, University of Aberdeen (United Kingdom)

2.45 pm   Discussion

3.15 pm   Coffee break

3.45 pm   The application of European Private International Law and the role of national judges

• Speaker: Prof. Agnieszka Frackowiak-Adamska, University Wroclaw (Poland)
• Commentator: Prof. Michael Hellner, Stockholms Universitet (Sweden)

4.30 pm   Discussion

5.00 pm   The application of European Private International Law and the role of national court systems

• Speaker: Prof. Xandra Kramer, Universiteit Rotterdam (Netherlands)
• Commentator: Prof. Pedro de Miguel Asensio, Universidad Complutense de Madrid (Spain)

5.45 pm   Discussion

6.15 pm   End of day 1

8.00 pm   Conference dinner 

Saturday, 3 March 2018

3rd Part: Europeanness of Academic Discourse and Legal Education

8.30 am   National styles of academic discourse and their impact on European Private International Law

• Speaker: Prof. Sabine Corneloup, Université de Paris/Sorbonne (France)
• Commentator: Prof. Dário Moura Vicente, Universidade de Lisboa (Portugal)

9.15 am   Discussion

9.45 am   Coffee break

10.15 am   Overriding mandatory laws, public policy and European Private International Law

• Speaker: Prof. Marc-Philippe Weller, University of Heidelberg (Germany)
• Commentator: Prof. Stephanie Francq, Université Catholique de Louvain (Belgium)

11.00 am   Discussion

11.30 am   Legal education and European Private International Law

• Speaker: Prof. Thomas Kadner Graziano, Université de Genève (Switzerland)
• Commentator: Prof. Gilles Cuniberti, Université de Luxembourg (Luxembourg)

12.15 pm   Discussion

12.45 pm   Lunch break

2.00 pm   Panel discussion: The future of European Private International Law in theory and practice

• Opening statement: Karen Vandekerckhove, Former Head of Unit, DG Justice and Consumers, European Commission
• Discussants: Prof. Paul Beaumont, Prof. Gilles Cuniberti, Prof. Dr. Eva-Maria Kieninger Prof. Johan Meeusen, Prof. Marta Requejo Isidro

4.00 pm   Concluding remarks

• Prof. Dr. Jan von Hein, University of Freiburg (Germany)

4.15 pm  End of conference

The EUFam’s Project’s Consortium is glad to announce that a new Report is available for download and consultation on the Project website.

The Report on Internationally-Shared Good Practices, drafted by the EUFam’s Team of the Max Planck Institute Luxembourg for Procedural Law, is based on the outcomes of the International Exchange Seminar that was held at the Institute on 11-12 May 2017.

Over 80 experts – judges, practitioners, academics, EU policymakers, and national civil servants – took part to the lively discussion by sharing their knowledge, experiences, and views on the application of the existing EU PIL Regulations in family matters in their daily practice.

This new Report further enriches the set of tools offered by the Project’s Consortium to the wider public, such as the National Case-Law Database, the Additional ECtHR Case-Law Index, the First Assessment Report on the Collected Case-Law, the Report on the Outcomes of an Online Questionnaire circulated in the past months, and several reports on national good practices.

Website: www.eufams.unimi.it

Facebook page: www.facebook.com/eufams

Readers of our blog will recall that we posted a translation of the new German choice-of-law rule for agency last week. That translation, however, was misleading because it referred to the law “applicable to a contract between principal and agent”, thus implying that the provision applies to the agency contract itself. The provision, however, is only meant to fill the gap left by Article 1(2) lit. g) of the Rome I Regulation. It is, therefore, limited to the agent’s authority (granted by contract). We thank an attentive reader for making this point and offer the following revised translation of the newly adopted Article 8 of the German Introductory Law to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch – BGB):

(1) An agent’s authority is governed by the law chosen by the principal before the agency is exercised, if the choice of law is known to both agent and third party. Principal, agent and third party are free to choose the applicable law at any time. The choice of law according to Sentence 2 of this Paragraph takes precedence over Sentence 1.

(2) In the absence of a choice under Paragraph 1 and if the agent acts in exercise of his commercial activity, a contract between principal and agent, is governed by the law of the country in which the agent has his habitual residence at the time he acted, unless this country is not identifiable by the third party.

(3) In the absence of a choice under Paragraph 1 and if the agent acts as employee of the principal, a contract between principal and agent is governed by the law of the country in which the principal has his habitual residence, unless this country is not identifiable by the third party.

(4) If the agent does not act in a way described by Paragraph 2 or 3 and in the absence of a choice under Paragraph 1, a permanent contract between principal and agent is governed by the law of the country, in which the agent usually exercises his powers, unless this country is not identifiable by the third party.

(5) If the applicable law does not result from Paragraph 1 through 4, a contract between principal and agent is governed by the law of the country in which the agent acts in exercise of his powers. If the third party and the agent must have been aware that the agency should only have been exercised in a particular country, the law of this country is applicable. If the country in which the agent acts in exercise of his powers is not identifiable by the third party, the law of the country in which the principal has his habitual residence at the time the agent exercises his powers, is applicable.

(6) The law applicable for agencies on the disposition of property or the rights on property is to be determined according to Article 43 Paragraph 1 and Article 46.

(7) This Article does not apply to agencies for exchange or auction.

(8) The habitual residence in accordance with this Article is to be determined in line with Article 19, Paragraph 1 and 2, first alternative of Regulation (EG) No. 593/2008, provided that the exercise of the agency replaces contract formation. Article 19, Paragraph 1 and 2, first alternative of Regulation (EG) No. 593/2008 does not apply, if the country according to that Article is not identifiable by the third party.