Droit international général

The LSE Law and Financial Markets Project will host a workshop on “International Finance, Party
Autonomy and Public Interest” on 18 May 2017. Speakers include Philipp Paech (LSE), Stéphanie Francq (Louvain-la-Neuve), Jan Kleinheisterkamp (LSE)  and Matthias Lehmann (University of Bonn).

Details are available here.

L’11 e il 12 maggio 2017 il Dipartimento di Giurisprudenza dell’Università Roma Tre ospita la nuova edizione dell’annuale incontro fra i giovani cultori del diritto internazionale. Il tema di quest’anno è Frontiere, spazi giuridici e territorio.

Le relazioni toccano, fra gli altri, anche temi di diritto internazionale privato.

Il programma completo dell’incontro è disponibile a questo indirizzo.

On 19 April 2017, Professor Cyril Nourissat and the lawyers Alexandre Boiché, Delphine Eskenazi, Alice Meier-Bourdeau and Gregory Thuan filed a complaint with the European Commission against France for a violation of several obligations arising from the European Rome III and Brussels IIbis Regulations, as a result of the divorce legislation reform entered into force on 1 January this year. The following summary has been kindly provided by Dr. Boiché.

“Indeed, since January the 1st, in the event of a global settlement between the spouses, the divorce agreement is no longer reviewed and approved in Court by a French judge. The agreement is merely recorded in a private contract, signed by the spouses and their respective lawyers. Such agreement is subsequently registered by a French notaire, which allows the divorce agreement to be an enforceable document under French law. From a judicial divorce, the French divorce, in the event of an agreement between the spouses, has become a purely administrative divorce. The judge only intervenes if a minor child requests to be heard.

The implications and consequences of this reform in an international environment were deliberately ignored by the French legislator, with a blatant disregard for the high proportion of divorce with an international component in France. The main violations arising from this reform are the following.

First of all, as there will be no control of the jurisdiction, anyone will be able to get a divorce by mutual consent in France, even though they have absolutely no connection with France whatsoever. For instance, a couple of German spouses living in Spain will now be able to use this new method of divorce, in breach of the provisions of the Brussels IIbis Regulation. The new divorce legislation is also problematic in so far as it remains silent on the law applicable to the divorce.

Moreover, the Brussels IIbis Regulation states that the judge, when he grants the divorce (and therefore rules on the visitation rights upon the children, or issues a support order, for instance) provides the spouses with certificates, that grant direct enforceability to his decision in the other member states. Yet, the new divorce legislation only authorizes the notary to deliver the certificate granting enforceability to the dissolution of the marriage itself, but not the certificate related to the visitation rights, nor the support order. This omission is problematic insofar as it will force the spouses who seek to enforce their agreement in another member state to seize the local Courts.

Last but not least, article 24 of the Charter of Fundamental Rights of the European Union makes it imperative for the child’s best interests to be taken into consideration above all else, and article 41 of the Brussels IIbis Regulation provides that the child must be heard every time a decision is taken regarding his residency and/or visitation rights, unless a neutral third party deems it unnecessary. Yet, under the new legislation, it is only the parents of the child who are supposed to inform him that he can be heard, which hardly meets the European requirements. Moreover, article 12 of the Brussels IIbis Regulation provides that, when a Court is seized whereas it isn’t the Court of the child’s habitual residence, it can only accept its jurisdiction if it matches the child’s best interests. Once again, the absence of any judicial control will allow divorces to be granted in France about children who never lived there, without any consideration for their interests. This might be the main violation of the European legislation issued by this reform.

For all those reasons, the plaintiffs recommend that the Union invites France to undertake the necessary changes, in order for this new legislation to fit harmoniously in the European legal space. In particular, they suggest a mandatory reviewal by the judge in the presence of an international component, such as the foreign citizenship of one of the spouses, or a foreign habitual residence. They would also like this new divorce to be prohibited in the presence of a minor child, an opinion shared by the French ‘Défenseur des Droits’“

The full text of the complaint (in French) is available here.

Saugmandsgaard ØE this morning Opined in Joined Cases C‑168/16 and C‑169/16, Nogueira et al and Osacar v Ryanair. Reference in the case was made by the Court of Appeal at Mons /Bergen in the Ryanair case I reported on in first instance. The weakest part of that judgment, I noted, was that it looked to the employer’s organisation as the most relevant criterion when deciding upon place of habitual employment. That clearly went against the favor laboris inherent in Article 19 of the Brussels I Recast Regulation.

The Advocate General at 100 in particular agrees with that view. Regular readers will know that I do not tend to paraphrase for the sake of it hence reference is best made to the AG’s Opinion as a whole. In summary:  Saugmandsgaard ØE recalls that CJEU case-law on the matter essentially requires the courts to either identify the ‘place where’ the employee principally carries out his obligations vis-à-vis his employer, or the ‘place from which’ he principally carries out those obligations. The workers at issue were employed as cabin crew on aircraft operated by Ryanair. Those employees performed their work in more than one Member State, namely in Belgium, where the airport of departure (Charleroi) was situated, the Member State of the airport of arrival and any other Member States crossed during the flight.  The AG suggests (at 92) that it is not possible, in such circumstances, to identify a ‘place where’ those employees principally carried out their obligations vis-à-vis their employers, for it is difficult to attach greater weight to the tasks carried out by those employees in the airport of departure, on board the aircraft or in the airport of arrival.

A ‘place from which’ those employees principally carried out their obligations vis-à-vis their employers, however, can be identified.  The referring court had listed a number of factual considerations among which the AG suggests the following as being highly relevant: (97 ff)

First, appellants started and ended their working day at Charleroi Airport. To the AG’s mind, that fact is of overriding importance, which he suggests is confirmed by the Court’s consistent case-law in particular Koelzch and Voogsgeerd.

Second, appellants received the instructions relating to their tasks and organised their work at Charleroi Airport, by consulting their employers’ intranet. (It is on this point that the AG rejects any relevance of the location of organisation of the work schedule by the employer).

Third, the aircraft operated by Ryanair, and on board which appellants worked as cabin staff, were based at Charleroi. Here the AG refers to CJEU case-law that, in the international transport sector, the place where the work tools are located constitutes a relevant indicium for the purposes of determining the place from which the worker principally fulfils his obligations vis-à-vis his employer.

Fourth, appellants were contractually required to live less than one hour from Charleroi Airport. It is noteworthy that this indication refers not to the worker’s actual place of residence but rather to the place of work near which he lives, namely Charleroi Airport in the main proceedings (at 103).

Fifth, the referring court noted that Ryanair and Crewlink jointly had a ‘crew room’ at Charleroi Airport. The existence of an office made available by the employer is another factor the relevance of which has been emphasised in the Court’s case-law. That this is not formally a ‘branch’ of either company, is irrelevant.

Finally, appellants were required to attend Charleroi Airport if they were unfit for work and in the event of disciplinary problems.

The AG points out that on the basis of the criteria, the Court at Mons formally will have to complete the analysis, however he concludes (at 107) that on the basis of the findings of fact communicated by that court in its request for a preliminary ruling, those six indicia unequivocally designate the courts of the place where Charleroi Airport is situated.

A few other issues are worth mentioning. Firstly (at 108) whether the worker is directly employed by Ryanair (Case C‑169/16) or assigned to Ryanair by Crewlink (Case C‑168/16) is irrelevant for the purposes of identifying the place where the work is habitually carried out, within the meaning of Article 19(2)(a) of Regulation No 44/2001. That place, the AG suggests, is independent of the legal link between the worker and the person who benefits from the work done.

Further, the AG suggests not to have the concept of ‘home base’ infiltrate the analysis: this is a term used in relevant EU civil aviation law. At 109 ff: ‘place where the employee habitually carries out his work’, used in Article 19(2) of Regulation No 44/2001, should not have to depend on a concept in an act of Union law which belongs to a quite different area, namely that of the harmonisation of rules in the civil aviation sector. At 116: the relevance of the home base, for the purposes of identifying the place where the contract of employment is habitually carried out, is only indirect. Indeed, it should be taken into account only in so far as it supports the indicia mentioned above as relevant for the purposes of identifying that place.

Further and convincingly, the AG emphatically suggests that the nationality of the aircraft is entirely irrelevant for the discussion (118 ff).

Finally, at 73 ff the AG suggests that there ought to be parallel interpretation of the findings on jurisdiction, and the rules on applicable law, among others in the Rome I Regulation. Those rules were not included in the referring court’s request for preliminary ruling.

We have to await the Court’s judgment, of course. However all in al this is a convincing Opinion which, as specifically flagged by the AG (at 101), is instrumental in addressing forum shopping by employers and consequently will be extremely helpful in addressing social dumping in the EU.

Geert.

Handbook of) EU Private International Law, 2nd ed 2016, Chapter 2, Heading , Chapter 3, Heading 3.2.5.

The first issue of a new periodical, called Freedom, Security & Justice: European Legal Studies, is now on-line.

In addition to the inaugural editorial by Angela Di Stasi, the issue hosts contributions (some written in Italian, others in English) by Maria Caterina Baruffi (on international child abduction), Dominik Düsterhaus (on mutual trust), Caterina Fratea (on the labour mobility), Angela Maria Romito (on cross-border debt recovery), Valentina Faggiani (on fundamental guarantees in criminal proceedings), Maria Font i Mas (on the movement of public documents across borders), Sílvia Morgades-Gil (on forced migration) and Alfredo Rizzo (on the external dimension of the European area of freedom, security and justice).

The University of Ferrara will host on 5 May 2017 a seminar titled ‘Universal Civil Jurisdiction – Which Way Forward?‘, in cooperation with the Interest Groups on International and European Human Rights Law and Private International Law of the Italian Society of International and EU Law (ISIL).

The seminar will be chaired by Judge Giorgio Gaja (International Court of Justice). Speakers and discussants include Beatrice Bonafè (University of Rome ‘La Sapienza’), Francesco Costamagna (University of Turin), Malgosia Fitzmaurice (Queen Mary University of London), Serena Forlati (University of Ferrara), Pietro Franzina (University of Ferrara), Patrick Kinsch (University of Luxembourg), Fabrizio Marongiu Buonaiuti (University of Macerata), Makane Moïse Mbengue (University of Geneva), Cesare Pitea (University of Parma), Chiara Ragni (University of Milan), Cedric Ryngaert (University of Utrecht), Andrea Saccucci (University of Campania ‘Luigi Vanvitelli’). 

Si svolgerà a Ferrara, il 5 maggio 2017, un seminario intitolato “Universal Civil Jurisdiction – Which Way Forward?”, organizzato in cooperazione con i Gruppi di interesse sul Diritto internazionale ed europeo dei diritti umani e sul Diritto internazionale privato e processuale della Società italiana di diritto internazionale e diritto dell’Unione europea (SIDI).

I lavori saranno coordinati dal Giudice Giorgio Gaja (Corte internazionale di giustizia). Interverranno: Beatrice Bonafè (Università di Roma‘La Sapienza’), Francesco Costamagna (Università di Torino), Malgosia Fitzmaurice (Queen Mary University di Londra), Serena Forlati (Università di Ferrara), Pietro Franzina (University di Ferrara), Patrick Kinsch (Università di Lussemburgo), Fabrizio Marongiu Buonaiuti (Università di Macerata), Makane Moïse Mbengue (Università di Ginevra), Cesare Pitea (Università di Parma), Chiara Ragni (Università di Milano), Cedric Ryngaert (Università di Utrecht), Andrea Saccucci (Università della Campania ‘Luigi Vanvitelli’).

Charles Oellermann has excellent analysis of Spizz v. Goldfarb Seligman & Co. (In re Ampal-Am. Israel Corp. 562 B.R. 601 (Bankr. S.D.N.Y. 2017). The U.S. Bankruptcy Court for the Southern District of New York ruled that the avoidance provisions of the Bankruptcy Code do not apply outside the U.S. because, on the basis of the language and context of the provisions, Congress did not intend for them to apply extraterritorially. In so holding, it applied the Morrison test which was central to the United States’ Supreme Court ruling in Kiobel, which of course has been the subject of repeated analysis on this blog.

Whether an avoidance action (which in civil law jurisdictions would be tackled by an actio pauliana) is extraterritorial in and of itself, is not easily ascertained. In his review, Charles has superb overview of case-law applying a centre of gravity test: depending on the facts of the case, parties’ action does or does not take place outside the US in relation to the parties’ domicile, the subject of the transaction, etc.  He also rightfully highlights that courts are aware that even if one were to apply the provisions extraterritorially, a US judgment might not be easily enforced against foreign debtors.

Case-law is evidently not settled and one imagines that the extraterritoriality of bankruptcy laws will in some form further end up at the USSC.

Geert.

Silvia Pfeiff,  La portabilité du statut personnel dans l’espace européen, Bruylant, 2017, ISBN 9782802757429, pp. 718, EUR 150

Opposer un refus de reconnaissance au statut personnel d’un individu revient à renier une partie de son identité. Le fait que des citoyens européens puissent subir les inconvénients liés, par exemple, à un refus de reconnaissance de leur mariage, de leur partenariat ou de leur filiation lors de l’exercice de leur liberté de circulation est-il compatible avec les droits et libertés garantis par la Convention européenne des droits de l’homme et les traités européens ? Cette question a mené l’auteur à s’interroger sur l’étendue des droits et libertés européens, tels qu’ils découlent de la jurisprudence de la Cour européenne des droits de l’homme et de la Cour de justice de l’Union européenne, et à explorer les pistes de solutions que recèle aujourd’hui le droit européen en tant que cadre supranational pour l’ensemble des États membres. Sur base de cet acquis européen est élaborée une méthode européenne de la reconnaissance. Celle-ci impose aux autorités nationales d’intégrer la logique européenne dans leur raisonnement lorsqu’elles sont saisies de la question de la reconnaissance d’un élément du statut personnel cristallisé par l’intervention d’une autorité publique d’un État membre. Ce faisant, elle ambitionne de réduire la survenance de statuts personnels boiteux et de contribuer ainsi à faciliter la circulation des citoyens. Cet ouvrage s’inscrit dès lors à la croisée du droit de la famille, du droit international privé, du droit européen et des droits fondamentaux.

Koray Söğüt and Suha Yılmaz reported recently on Turkish Supreme Court case-law in the area of choice of court. The report is very much worth a read. On choice of court agreements, what the Supreme Court seems to say is that when choice of court is made away from Turkey,  Turkish law will make that choice subject to a de facto forum conveniens assessment: if Turkey is a suitable forum especially when the eventual judgment will be easily enforced against Turkish assets, a defendant’s insistence on exercising the clause must be seen as violating Turkey’s general provision on bad faith (a form of fraus omnia corrumpit).

It is also reported that the Supreme Court accepted a unilateral /asymmetric jurisdiction clause – the issues surrounding these clauses are a regular feature on this blog.

More cases for the comparative law class! (At least if and when I get hold of an English translation).

Geert.

Many of the issues in [2017] EWHC 161 (Comm) Commerzbank v Liquimar Tankers were also raised in Perella v Codere,  albeit there, as I reported, obiter. In current case, they were very much dicta, and they amount to the English courts viewing (properly constructed) asymmetric clauses as being exclusive. As such they fall under the new anti-torpedo provisions of Article 31(2).

Applications of defendants Liquimar Tankers (registered in Liberia but with head office in Athens) are being made in the course of proceedings in London by Commerzbank  in two separate actions in relation to the repayment of loans which the Bank extended for the building of a number of ships. There are ongoing proceedings taken by the defendants against the Bank in Piraeus, Greece concerning the same and/or related issues.

The Liquimar guarantee contained a governing law and an asymmetric jurisdiction clause, which was essentially similar in the other loan agreements. It provided:

“16 Law and Jurisdiction

16.1 This Guarantee and Indemnity shall in all respects be governed by and interpreted in accordance with English law.

16.2 For the exclusive benefit of the Lender, the Guarantor irrevocably agrees that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Guarantee and Indemnity and that any proceedings may be brought in those courts.

16.3 Nothing contained in this Clause shall limit the right of the Lender to commence any proceedings against the Guarantor in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Guarantor in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

16.4 The Guarantor irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause and any claim that those proceedings have been brought in an inconvenient or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any jurisdiction …”.

Article 31(2) of the Brussels I Recast reads:

‘where a court of a Member State on which an agreement as referred to in Article 25 confers exclusive jurisdiction is seized, any court of another Member State shall stay the proceedings until such time as the court seized on the basis of the agreement declares that it has no jurisdiction under the agreement.’

Cranston J held that the concept of ‘exclusivity’ should be autonomously interpreted under the Brussels I (Recast) regime. He did not however refer for preliminary reference to the CJEU: as such, the High Court’s finding continues to be vulnerable until we have precedent from Luxembourg. The judgment as a whole is worth a read – readers in for concise summary, please refer to Herbert Smith’s analysis.

Summing up is done in para 70, with justifiable emphasis on parties’ and the Regulation’s intentions (but as noted with considerable reference to precedent and principles of statutory interpretation): Thus with the asymmetric jurisdiction clauses in the present case, the defendants agreed to sue only in the courts of one EU Member State, England. Instead, they have enabled another court, the Greek court, to be seized of the matter. It would undermine the agreements of the parties, and foster abusive tactics, if the jurisdiction clauses in these agreements were to be treated not as exclusive, but as non-exclusive.’ 

Of note is also the discussion on the role of recitals (eg. at 69; also at 77 ff). Justice Cranston’s arguments are supported by reference to a number of recitals. Defendant in my view has a valid point in principle where they argue at 77 that ‘a recital cannot constitute a rule when it is not reflected in the words of Article 31(2).‘ (Although they were wrong on substance).

A subsidiary argument in the case also merits further attention. Defendants argue that Article 25 requires the parties to have designated the courts of a Member State to enable the law applicable to the substantive validity of a jurisdiction clause to be identified and to provide certainty as to the forum in which a putative defendant can expect to be sued. That, they submit, is not achieved by a clause which designates the courts of all other competent states, including those of non-Member States, outside the territorial competence of the EU, which could mean suits in multiple jurisdictions. Although the argument could be phrased more precisely, I do agree with it: in the absence of a nominatim lex contractus for the choice of court clause specifically, the new lex fori prorogati rule in Article 25 Brussels I Recast, combined with recital 20 (yet again the troublesome habit of EU private international law to include substantive rules in recitals only) does create a vacuum in the case of hybrid, asymmetric or even non-exclusive choice of court.

An important case. Not the last we have heard of the issues.

Geert.

(Handbook of) European Private international law, 2nd ed. 2016, Ch.2, Heading 2.2.9, Heading 2.2.9.4.1, Heading 2.2.9.5.

We have not yet alerted our readers to the first issue of Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ) which was published in February 2017. So, here we go:

Jürgen Basedow, Internationales Einheitsprivatrecht im Zeitalter der Globalisierung (The International Unification of Private Law in the Era of Globalization)

In unifying private law, the international community initially made use of treaties since the subjects of the early years before World War I were conceived of as affecting national sovereignty. As this tool proved functional, it was subsequently retained as the vehicle of “pure private law” unification. In more recent times an increasingly varied number of legal forms can be observed. However, whereas model laws and principles facilitate a spontaneous approximation of laws and allow for the interpretation and supplementation of conventions in legislation and practice, they do not unify the law. Both tools thus have their limits.

The institutionalization of legal unification started after World War II; it has meanwhile acquired a very comprehensive character. There is hardly any subject not capable of being treated by a specialized international agency. In many areas international organizations have also taken the political lead in the unification of laws. The task of safeguarding the consistency of private law in this multi-voiced concert is incumbent on UNIDROIT, UNCITRAL and the Hague Conference.

In recent decades, a new actor has entered the scene: the European Union. As regards the unification of laws within Europe, it has ousted other international organizations. By necessity the other organizations have relocated the centre of their activities to the extra-European, universal field. The EU has become active in that context as well: as a party to universal conventions, not as a producer of uniform law.

The interpretation of uniform law has to a large extent come to be understood as autonomous interpretation taking into account the insights provided by comparative law. With regard to gap-filling, recourse should be had to general principles governing the respective area of law at issue. In the long run, the aim of uniform law application cannot be achieved without institutional arrangements such as the referral of preliminary questions to an international tribunal.

The traditional approach of amending protocols has proven unsatisfactory for adapting aging conventions to a new environment because of the inherent uncertainty and time-consuming nature of ratification procedures. New approaches in some conventions demonstrate that simplified revision procedures are possible and promising.

Ulrich G. Schroeter, Gegenwart und Zukunft des Einheitskaufrechts (Present and Future of Uniform Sales Law)

Uniform sales law forms a part of uniform private law that comprises a number of Conventions unifying either conflict-of-laws rules for sales or substantive sales law. The Hague Convention on the Law Applicable to International Sales of Goods (1955) and the Hague Uniform Sales Laws of 1964 achieved a certain legal uniformity for international sales contracts, but both were ratified by only a few Western European States. The UN (Vienna) Sales Convention of 1980 (CISG) has, in turn, developed into one of the greatest successes of uniform law-making in private law.

The currently more than 80 Contracting States are proof of the fact that the CISG has been accepted by the global community of States. Its Contracting States include most major international trading nations and at the same time countries from all regions of the world. In the upcoming years, the Sales Convention’s ratification by further developing States should be actively encouraged.

By contrast, the extent to which the CISG has been accepted in commercial practice is very difficult to assess empirically. Much is to be said for the assumption that its contractual exclusion is significantly less common than sometimes alleged, given that the courts require a clearly expressed intention to exclude and that any exclusion needs to be agreed upon by both parties, which is often not the case. The assessment of the Sales Convention’s practical importance is further complicated by its frequent application by arbitral tribunals, because the resulting arbitral awards usually remain confidential and thus inaccessible.

In the future, the quest for a uniform interpretation of the Sales Convention is likely to be the most important challenge. Article 7(1) CISG provides some guidance by imposing three interpretative goals that in practice have mostly been observed. They have resulted in a generally uniform interpretation, although limited areas of non-uniformity exist. A general challenge arises from sales contracts’ nature as everyday contracts in international trade, resulting in the uniform sales law’s frequent application by non-specialised lawyers. It is therefore necessary to enable and assist a uniform interpretation through appropriate organisational arrangements, with a cross-border cooperation among specialised academics as the most suitable solution, designed to evaluate and assess international CISG case law and make it available to uniform law users in every country.

The Sales Convention has furthermore contributed to legal uniformity through its use as a model for other international Conventions as well as for domestic and regional law reforms. By contrast, a future revision of the Convention’s text seems neither desirable nor realistic, with its further development best being left to courts and legal academia.

Finally, the increasing number of uniform law acts for international sales calls for a better coordination between the various law-making organisations. In particular, regional uniform law (notably EU law) should respect the existing uniform sales law by explicitly granting priority to the CISG.

Stefan Huber, Transnationales Kreditsicherungsrecht (Secured Transactions Law: A Transnational Perspective)

Asset-based financing requires a secured transactions law which permits the efficient and swift enforcement of security interests. The interplay between substantive law, procedural law and insolvency law is highly complex even at the purely national level. If the object covered by a security interest moves regularly across national frontiers, an additional issue arises: the cross-border recognition of the security interest.

This issue became of particular importance in the era of industrialisation. The intercontinental exchange of goods made high-value vessels indispensable. It is thus not surprising that the first instrument of transnational secured transactions law concerned security interests in vessels. An instrument concerning aircraft followed. Both instruments, adopted in the first half of the 20th century, are based on the idea of recognition by way of harmonising the conflict of laws rules: A security interest duly created under the law of the Contracting State where the vessel or the aircraft is registered is to be recognised by the other Contracting States. Substantive law, procedure and insolvency rules were not yet harmonised, except for the priority between security interests and charges and some minor procedural questions. As a result of this lack of harmonisation, legal uncertainty remained.

From the 1970s on, UNIDROIT and UNCITRAL launched projects pursuing a functional approach. The idea was to establish uniform rules in all areas of law where the efficient cross-border enforcement of security interests required transnational harmonisation. The projects have led to international conventions concerning either certain types of transactions, such as financial leasing, or certain types of assets, such as receivables. The biggest success to date has been the Cape Town Convention on International In- terests in Mobile Equipment with its Aircraft Protocol. Both adopted in 2001, they entered into force in 2006. The combination of general rules in an umbrella convention and specific rules for certain categories of objects in additional protocols – there also exist protocols for railway rolling stock and space assets – was an efficient response to the different needs of different business sectors. 64 states and the EU are already party to the Aircraft Protocol and there are even more contracting parties to the Cape Town Convention itself. The economic impact of the instrument has been high. Having established a new international security interest with a uniform set of substantive, procedural and insolvency rules, the instrument considerably reduces the risks for secured creditors. As a result, credit costs are reduced. Savings in the amount of at least $160 billion are expected over a period of 20 years.

In addition to the conventions, a new type of instrument has more recently appeared in the area of secured transactions law: soft law in the form of model rules and a legislative guide. These instruments are designed for all categories of movable assets.

An analysis of the modern instruments shows that they are based on the following core principles: (1) Non-possessory security interests must be registered in order to be effective against other creditors; (2) the security interest is accessory to the secured obligation; (3) party autonomy is guaranteed within the limits set by third-party interests; (4) states are encouraged to adopt the optional uniform rules on self-help remedies and on interim relief; (5) the registered non-possessory security interest is effective in the event of the debtor’s insolvency; and (6) the international character of a transaction is no longer the predominant connecting factor for determining whether the transnational rules apply.

This list makes clear that the content of the transnational instruments has achieved new dimensions which were not imaginable in the early days of the harmonisation of secured transactions law. At the same time, the number of transnational instruments has risen considerably. A future challenge will be coordinating all these instruments in a way that they constitute a real system of transnational secured transactions law.

Andreas Maurer, Einheitsrecht im internationalen Warentransport (Uniform Law in the International Transport of Goods)

The roots of uniform law in the field of transport law can be traced back to antiquity. Today, a number of international conventions form a uniform law for almost all types of common carriers. Those conventions for trains, trucks and inland navigation vessels, however, must be characterized as regional, even if they encompass three continents. Yet, they are not applicable worldwide. The only uniform law with almost worldwide applicability is the regime on air travel. Whereas the uniform laws on transport with the aforementioned common carriers are mostly evaluated positively, uniform laws on international maritime law are rather fragmented and inconsistent. This situation has not been alleviated by the recent introduction of the so-called Rotterdam rules on multimodal transports. Today it is more than questionable whether in the long run a uniform international maritime law can be introduced. Attempts to implement privately-created uniform law have been unsuccessful. Despite the fact that a number of private organizations are involved in the creation of standard contracts and standard clauses in order to unify regulations on international maritime trade, these rules are not (yet) accepted as being law or equal to law.

Alexander Peukert, Vereinheitlichung des Immaterialgüterrechts: Strukturen, Akteure, Zwecke (Unification of Intellectual Property Law: Structures, Actors and Aims)

Intellectual property (IP) law is among the oldest and most comprehen- sive areas of uniform private law. Nearly all countries are members of the World Intellectual Property Organization and as such agree “to promote the protection of intellectual property throughout the world”. The problem, however, is that this legal protection is subject to the equally universally acknowledged territoriality principle. IP rights are limited to the territory of the country granting them and sometimes remain available only for nation- al citizens/local residents. The article provides an overview of the legal measures taken by different actors to address the tension between global communication and fragmented IP protection. It distinguishes between (i) the harmonization of national IP laws, (ii) the creation of supranational procedures, rights, and courts, and (iii) informal cooperations between private stakeholders and patent offices. The guiding question is whether interna- tional IP law is primarily concerned with establishing a global level playing field or whether it pursues a more tangible aim, namely the strengthening of IP protection “throughout the world”. The article concludes with a critical assessment of the narrative that considers international IP law a great success because of its indeed impressive growth.

During the last four years a group of 181 authors from 57 countries has been working very hard to make a special book project come true: the 4-volume Encyclopedia of Private International Law (published by Edward Elgar and edited by Jürgen Basedow, Franco Ferrari, Pedro de Miguel Asensio and me). Containing 247 chapters, 80 national reports and English translations of legal instruments from 80 countries, some parts of the Encyclopedia are now  available via Elgaronline (in beta version).

Access to the actual content (i.e. the entries, the national reports and the translated legal instruments) is limited to paying customers. However, some chapters including the following, are accessible free of charge:

• (American) conflict of laws revolution, by Linda Silberman
• Choice of forum and submission to jurisdiction, by Adrian Briggs
• Choice of law, by Jürgen Basedow
• Globalisation and private international law, by Horatia Muir-Watt

Publication of the Encyclopedia in print is scheduled for Summer 2017.

The European Commission has published a public consultation on the conflict of law rules for third party effects of transactions in securities and claims.

The aim of the consultation is to ‘gather stakeholders’ views on the practical problems and types of risks caused by the current state of harmonisation of the conflict of laws rules on third party effects of transactions in securities and claims and to gather views on possibilities for improving such rules’.

The public consultation will be open till 30 June 2017.

Thanks to Paulien van der Grinten (Ministry of Security and Justice, the Netherlands) for the tip-off.

On 17 March 2017  Horst Eidenmüller and John Armour, both from the University of Oxford, organised a one-day conference at St Hugh’s College, Oxford, on ‘Negotiating Brexit’. One panel focused on the effects of Brexit on the resolution of international disputes, including issues of jurisdiction, choice of law, recognition and enforcement as well as international arbitration. Two of the contributions to the conference have recently been published on the Oxford Business Law Blog:

• Giesela Rühl, The Effect of Brexit on Choice of Law and Jurisdiction in Civil and Commercial Matters, available here;
• Marco Torsello, The Impact of Brexit on International Commercial Arbitration, available here.

A third post by Tom Snelling will deal with the impact of Brexit on recognition and enforcement on foreign judgments.

By Vincent Richard, Research Fellow at the Max Planck Institute Luxembourg for International, European, and Regulatory Procedural Law

In view of the upcoming election, Jean-Jacques Urvoas, the French Minister of Justice released an “open letter” (57 pages) to his successor published by Dalloz. It details what has been done and what should be done in the field of justice in France over the next years.

The letter covers topics such as access to justice, technology in the judiciary and focuses on criminal justice and independence of the judiciary. Conditions of detention and prison policy are the most discussed issues in the current French political campaign in the field of justice.

The readers of this blog will be mostly interested in Chapter IX of the letter which deals with Justice in Europe. In this part, the Minister pleads in favour of enhanced cooperation notably regarding the future European Public Prosecutor’s office. He also advocates for the creation of international chambers within French courts and proposes to establish a European Centre for Judicial Translation (“centre européen de traduction judiciaire”) designed to alleviate the burden of translation (and its cost) on national courts.

We also wanted to underline the following quote which summarises the Minister’s views on judicial cooperation and mutual trust:

“Dans les faits, cette coopération s’est édifiée depuis vingt ans sur le principe de la reconnaissance mutuelle des décisions de justice, qui lui-même suppose la confiance réciproque entre les autorités des États membres. Or cette confiance ne se décrète pas, elle se construit. Et c’est objectivement devenu une gageure à 27 ou à 28. Il faut donc trouver le bon équilibre, ne pas céder à l’illusion de l’harmonisation des procédures judiciaires ou à une uniformisation, séduisante sur le papier, mais irréalisable en pratique. Il s’agit du penchant naturel de la Commission européenne, même si elle déploie de puis quelques années des efforts louables pour moins et mieux légiférer.”

You can find the full text (in French) here: http://www-nog.dalloz-actualite.fr/sites/dalloz-actualite.fr/files/resources/2017/04/gds_ambition_justice-global000.pdf

In Coast and Country Association of Queensland Inc v Smith & Ors [2016] QCA 242, the Queensland Court of Appeal held among others that the Land Court was correct not to include emissions from the burning of coal ex Australia, in the environmental impact assessment part of permitting decisions relating to Queensland coal mines: ‘It is outside the Land Court’s jurisdiction under s 269(4)(j) Mineral Resources Act 1989 (Qld) to consider the impact of activities beyond those carried on under the authority of the proposed mining lease, such as the impact of what the Land Court described as “scope 3 emissions.” These include environmentally harmful global greenhouse gas emissions resulting from the transportation and burning of coal after its removal from the proposed mines.’

As BakerMcKenzie note (a good summary of the issues which I happily refer to),  this does not mean that such impact may not be taken into account at all:  It can be considered when weighing up whether “the public right and interest is prejudiced”, and as to whether “any other good reason has been shown for a refusal”. However the Land Court tends not to have much sympathy for that view: contrary to eg the Dutch approach in the Urgenda case, the Land Court views the coal market as essentially demand driven: if no Australian coal is used, other coal will be – so one might as well make it Australian.

The High Court of Australia, Baker report, have now confirmed (without formally endorsing the approach), that Land Courts decisions wil not be subject to further appeal on these grounds. (So far I have only found the reference to the case on the Court’s ledger).

Not much prospect for well to wheel considerations in Queensland /Australia therefore. Interesting material for a comparative environmental law class.

Geert.

Benjamin Hayward, Conflict of Laws and Arbitral Discretion – The Closest Connection Test, Oxford University Press, 2017, ISBN 9780198787440, pp. 408, GBP 125

Arbitration is the dispute resolution method of choice in international commerce, but it rests on a complex legal foundation. In many international commercial contracts, the parties will choose the law governing any future disputes. However, where the parties do not choose a governing law, the prevailing approach in arbitration is to afford arbitrators broad and largely unfettered discretion to choose the law considered most appropriate or most applicable. The uncertainty resulting from this discretion potentially affects the parties’ rights and obligations, the performance of their contract, the presentation of their cases, and negotiations undertaken to settle their disputes. In this text, Dr Benjamin Hayward critically reviews the prevailing approach to the conflict of laws in international commercial arbitration. The text adopts a focused and detail-oriented analysis – being based on a study of more than 130 sets of arbitral laws and rules from around the world, and drawing heavily on arbitral case law. Nevertheless, it remains both practical and accessible, taking as its focus the needs and expectations of commercial parties, who are the ultimate users of international commercial arbitration. This text identifies the difficulties that result from resolving conflicts of laws through broad and unconstrained arbitral discretions. It establishes that a bright-line test would be a preferable way to resolve arbitral conflicts of laws. Specifically, it recommends a modified Art. 4 Rome Convention rule as the ideal basis for law reform in this area of arbitral procedure.

by Zoltán Fabók LL.M. (Heidelberg), visiting lecturer at ELTE University, PhD Candidate at Nottingham Trent University

The Hungarian Parliament has recently adopted a new act on private international law (see the previous post by Tamás Szabados). The legislator set ambitious goals: the new law extends, somewhat surprisingly, to the PIL aspects – jurisdiction, applicable law and recognition of foreign proceedings – of the international insolvency law.

Indeed, the previous Hungarian PIL framework was unfit to adequately address the relevant questions of the international insolvency law outside the context of the Insolvency Regulation. In cross-border situations, the existing regime did not function properly and this resulted in legal uncertainty, improper protection of the foreign debtor’s assets located in Hungary and the neglect of the principle of collective proceedings.

Admittedly, the new law appears to make some (limited) progress regarding the provisions on jurisdiction of Hungarian courts and the law applicable for insolvency proceedings. However, concerning recognition of foreign insolvency proceedings opened in non-EU states the legislator has opted for a flawed model: the extension of the effects of the foreign lex concursus to Hungary. Extending the legal effects of insolvency proceedings opened in third states to Hungary without any substantive filter (save for the public policy exception) does not appear to be realistic. The counterbalance introduced by the new law – namely that the recognition would be conditional upon reciprocity – does not really help: it will simply make the system inoperative vis-à-vis most foreign states. In effect, in most cases no foreign insolvency proceedings would be recognised in Hungary. This may cause that the foreign debtor’s assets located in Hungary would be exposed to individual enforcement actions meaning the violation of the principle of the collective proceedings.

My paper argues that the enactment of the UNCITRAL Model Law on Cross-Border Insolvency by Hungary would adequately fill the regulatory gap left open by the new PIL Act. Rather than extending the legal effects of foreign insolvency proceedings to Hungary, the Model Law attaches limited sui generis legal consequences to foreign insolvency proceedings. The Model Law would allow Hungary to keep under control the infiltration of the effects of foreign insolvency proceedings from third states in relation to which it has no full confidence while maintaining the idea of collective insolvency proceedings by protecting the assets of the foreign debtor located in Hungary and preventing individual actions. In other words, the Model Law represents a flexible approach looking for a balance between recognising the universal effects of the insolvency as provided for by the lex concursus on the one hand and the rigid territorial principle disregarding the foreign insolvency proceedings on the other.

One could question whether the PIL Act is the proper legal framework for addressing international insolvency law. Arguably, the rules on international insolvency should fall outside the scope of the PIL Act: international insolvency law is a rather complex field of law consisting of elements of conflict of laws, international procedural law and insolvency-specific norms. It would be reasonable to deal with this area of law in the Insolvency Act or in a separate piece of legislation.

The paper has been accepted by UNCITRAL for publication in the compilation to be issued after the 50th Anniversary Congress. An earlier preprint version, reflecting to the preliminary drafts of the new PIL Act, can be downloaded from http://ssrn.com/abstract=2919047.

The French Cour de Cassation promotes in 2017 a series of seven conferences on the application of foreign law, in partnership with the Société de législation comparée.

Two of them have already taken place on 20 February (“The judge’s role in establishing the content of foreign law”, by Jean-Pierre Ancel, former President of the First Civil Chamber of the Cour de cassation) and 20 March (“The application of uniform law and international conventions”, by Jean-Baptiste Racine, University of Nice).

The five remaining conferences will be held at the Grand Chambre of the Court (5 Quai de l’Horloge, Paris) between 6 pm and 8 pm on the following dates:

• April 20, 2017: International cooperation in researching the content of foreign law (Florence Hermite)

• May 29, 2017: Optional application of foreign law in situations of availability of law and the uniform application of rules of conflict of European origin (speaker: Sabine Corneloup, University of Paris II)

• September 25, 2017: Foreign law facing the hierarchy of norms (speaker: Gustavo Cerqueira, University of Reims)

• October 23, 2017: The Cour de cassation’s control in applying foreign law (speaker: Alice Meier-Bourdeau, lawyer)

• November 27, 2017: The exception of equivalence between the French law and the foreign law (speaker: Sara Godechot-Patris, University of Paris-East)

All conferences are held in French.

For more information: see Cour de Cassation.

Click here to see the whole program.

I reported on AMT V Marzillier at the High Court, failed to flag its overturn in the Court of Appeal (it’s the Easter period: I am in a confessionary mood), and now report swiftly on the Supreme Court confirming the Court of Appeal’s view early April ([2017] UKSC 13).

MMGR is a company incorporated under the laws of Germany and carries on business as a firm of lawyers in Germany. AMTF alleges that MMGR induced its former clients to issue proceedings against it in Germany and to advance causes of action under German law.  AMTF’s clients were referred to it by ‘introducing brokers’; AMTF in turn is referred to as a non-advisory, “execution only”, derivatives broker. AMTF charged its clients commission for its service and paid commission to the introducing brokers. About 70 former clients, who were dissatisfied with the financial results of their transactions, commenced legal proceedings in Germany against both the introducing brokers and AMTF seeking damages under the German law of delict. The claim against the introducing brokers was that they had given bad investment advice or had failed to warn of the risks of the investments. The claim against AMTF was based on a liability which was accessory to that of the brokers: it was alleged that AMTF had encouraged the brokers to behave as they did by paying them commission from the transaction accounts which it operated for its clients and that it owed and had breached a duty in delict (tort) to the clients to prevent any transactions being undertaken contrary to their interests. AMTF challenged the jurisdiction of the German court. Many of the former clients have recovered damages from AMTF by way of settlement.

AMTF argues that the actions in Germany were in breach of the exclusive jurisdiction and applicable law clauses in their contracts with AMTF. It commenced proceedings in the High Court in London against MMGR, based on the tort, in English law, of inducing breach of contract. It seeks both damages and injunctive relief to restrain MMGR from inducing clients to bring further claims in Germany asserting causes of action under German law. AMTF argues that the English courts have jurisdiction over its claim under article 5.3 of the Brussels I Regulation (Article 7(2) in the Brussels I Recast), which gives jurisdiction in tort claims to the courts for the place in which the harmful event occurred or may occur. MMGR challenges the jurisdiction of the English courts to entertain this action.

Popplewell J in the High Court sided with AMTF – I reviewed his judgment in 2014. He decided that the relevant harm which gives rise to jurisdiction under article 5.3 occurred in England as AMTF had in each case been deprived of the benefit of the exclusive jurisdiction clause, which, he held, created a positive obligation on a former client to bring proceedings in England.

Clarke LJ concluded upon Appeal that the English courts did not have jurisdiction as the relevant harm had occurred in Germany. At 57 he wrote ‘I do not reach this conclusion with any great enthusiasm since there is much to be said for the determination of what is in essence an ancillary claim in tort for inducement of breach of contract to be made in the court which the contract breaker agreed should have exclusive jurisdiction in respect of that contract, rather than in the courts of the country where the inducement and breach occurred. But the governing law of the relationship between the former clients and AMTF (which did not have to be that of England & Wales) is not a determining factor in the allocation of jurisdiction under the Regulation.‘ It is not entirely clear what the German courts’ view is on the matter – the unsettled claims were still pending at the time of the Supreme Court’s judgment.

Lord Hodge, after noting the CA’s reluctance, agrees with its conclusion and does so by once again, concisely yet completely, reviewing the CJEU’s case-law on Article 5(3) [7(2)]. For an even more condensed version, see Jake Hardy. At 24: ‘The task for the court is to identify where the relevant harm occurred. That is relatively straightforward in most circumstances, where there is no need for any special rule such as those which the CJEU has developed when it has not been possible readily to identify one place where that harm occurred. It is straightforward in this case.‘ : namely Germany. ‘It is clear that AMTF did not get the benefit of having any dispute with the former clients determined under English law by English courts. But the former clients were under no positive obligation to sue AMTF, which could have no objection if it was not sued.’ (at 25).

Of note is Lord Hoge’s important emphasis (at 29) that the benefits of connecting factors, which justify the ground of jurisdiction, are not in and of themselves connecting factors. Idem for his instruction at 30 that ‘the inconvenience, which the separation of the resolution of the contractual claims against the former clients from the pursuit of the claims against MMGR entails, (does not) carry much weight when one considers the aims of the Judgments Regulation‘: ‘the CJEU has recognised that the scheme of the Judgments Regulation creates the difficulty that one jurisdiction may not be able to deal with all the related points in a dispute (at 32).

Finally reference to the CJEU was refused on the grounds that the issue is acte claire (at 43, with preceding reference to CJEU precedent).

Delightful.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, 2.2.11.2.7).