Droit international général

Rincon ((2017) 8 Cal. App 5th 1) is another case suited to comparative conflicts classes. It applies California’s restrictive regime on waiver of jury trial to a contract governed by New York law and with choice of court for New York.

‘Lois de police‘, also known as lois d’application immédiate or lois d’application nécessaire,  are included in the EU’s Rome I Regulation (on applicable law for contracts) in Article 9. (I reported earlier on their application in Unamar).

Jason Grinell has background to the case. Parties had made choice of law and choice of court in favour of New York. The link with New York was real (in EU terms: this was not a ‘purely domestic’ situation), inter alia because of the involvement of New York-based banks, parties being sophisticated commercial undertakings, and the contract having been negotiated in NY. However the real estate development is located at San Francisco, giving CAL a strong link to the case. Under CAL law,  parties generally cannot waive a jury trial before the commencement of a lawsuit unless they use one of two methods approved by the legislature. New York law does not have the same provision and choice of court clauses in favour of New York do not include reference to the only options available under CAL law.

In the case at issue, the boilerplate choice of court clause was set aside by the Court of Appeal. The lower court had denied a substantial enough Californian interest in the case – the CA disagreed. The relevant part of the judgment runs until p.22.

That comparative conflicts binder is filling out nicely.

Geert.

This is no April fool’s prank: The Hague Convention of 5 July 2006 on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary will enter into force today. It will apply in the United States, Mauritius and Switzerland. More states will hopefully soon follow.

by Prof. Dr. Dres. h.c. Burkhard Hess, Executive Director Max Planck Institute Luxembourg for Procedural Law

Against the backdrop of Brexit, an initiative has been launched to strengthen Frankfurt as a hot spot for commercial litigation in the European Judicial Area. On March 30, 2017, the Minister of Justice of the Federal State Hessen, Ms Kühne-Hörmann, organized a conference at which the Justice Initiative was presented. More  than 120 stakeholders (lawyers, judges, businesses) attended the conference. The original paper was elaborated by Professors Burkhard Hess (Luxembourg), Thomas Pfeiffer (Heidelberg), Christian Duve (Heidelberg) and Roman Poseck (President of the Frankfurt Court of Appeal). Here, we are pleased to provide an English translation of the position paper with some additional information on German procedural law for an international audience. The proposal has, as a matter of principle, been endorsed by the Minister of Justice. Its proposals are now being discussed and shall be implemented in the next months to come. The paper reads as follows:

1. Background Information

In the European Judicial Area, London has positioned itself as the most important hub for cross-border disputes arising from the European internal market. According to statistics, in around 80% of all commercial cases at least one party is foreign, while almost 50% of all claims issued in the London court concern only foreigners. The value of disputes before the London Commercial Court is regularly in the 6 – 7-digit range. The court hears approximately 1,000 procedures per year, of which almost 200 concern parties from the continent (see here). A key focus is on financial disputes. Often, the jurisdiction of the High Court of London is based on jurisdiction agreements (Article 25 Brussels Ibis Regulation).

The upcoming Brexit will change this situation in relation to parties from the continent. In the future, the United Kingdom as a state will no longer benefit from the benefits of the European Judicial Area; the UK will rather be a third country. Parties to civil disputes must already consider whether they prefer to choose other courts within the European Judicial Area. The liberal rules of jurisdiction laid down in Article 25 of the Brussels Ibis Regulation and the special jurisdiction rules established in Articles 7 and 8 of the Brussels Ibis Regulation promote appropriate strategies. In financial contracts, jurisdiction clauses do not only provide for London, but also for other courts in the European Judicial Area, such as Frankfurt. Therefore, Germany can become a competing judicial hub. With the expected relocation of the financial center from London to Frankfurt (and indeed, likely to other European locations) a relocation of the judicial hub is also to be expected. It is submitted that one should strive for a shift of financial disputes to Frankfurt; even today, the Frankfurt judiciary is characterized by the existence of its special expertise in commercial areas. Indeed, the Frankfurt civil courts already have a high degree of specialization to hear financial and banking disputes.

Attracting high-profile, commercial disputes entails positive effects with regard to the legal services sector, in particular the legal profession, but also the courts of ordinary jurisdiction. Corresponding developments can be observed with regard to patent litigation. In this highly-specialized area of law, the courts of Düsseldorf, Mannheim and Munich have already established themselves as sought-after throughout Europe.

For these reasons, the Justice Initiative proposes that the attractiveness of the civil and commercial courts of Frankfurt should be strengthened through some targeted (mainly organizational) measures. A simultaneous information campaign would also increase Frankfurt’s visibility as an attractive place for the solution of international commercial disputes. Our considerations are linked to and continue to advance earlier initiatives (“Law Made in Germany”) that aim to strengthen Germany as a compelling place for dispute resolution.

In particular, the authors propose the following measures:

 A. A comprehensive strategy to strengthen Frankfurt as a hub for international dispute settlement

I. The core concern relates to the further specialization of the dispute resolution bodies within the state courts in order to promote the efficient resolution of cross-border commercial disputes. A combination of targeted measures, including the provision of a well-equipped court and experienced judges with good language skills as well as a modern process design shall enable a practical, user-friendly framework for the settlement of international commercial disputes

II. The initiative shall be accompanied by the comprehensive involvement of the judiciary, of the business sector (the Chamber of Industry and Commerce) as well as of the legal profession (including lawyers’ associations and lawyers’ chambers).

III. Simultaneous strengthening of arbitration in Frankfurt (via the creation of a Center for International Dispute Resolution).

B. Establishment of Chambers for International Commercial Matters at LG Frankfurt as well as of appropriately specialized senates at OLG Frankfurt

I. Composition of the Chamber for International Commercial Disputes with judges who have:

1. In-depth experience of business law (and, if possible also experience as lawyers) as well as;
2.  Good English language skills.

II. Occupation of the commercial lay judges in consultation with the Chamber for Commerce with experts from the fields:

1. Finance and banking;
2. International commercial matters;
3. Auditing.

Here again, adequate language skills must be ensured.

III. Sufficient equipment of the Chamber for International Commercial Disputes:

1. Comprehensive use of the electronic support system, for example by providing an IT tool in order to enable an “electronic process and case file management”;
2. Adequate equipment of the registrar of the Chamber / Senate with a staff, which also disposes of a sufficient knowledge of foreign languages and is able to manage (partially or partly) foreign-language files;
3. Borrowing best practices from arbitration with regard to the secretary/registry who adopts active support functions (as a case manager).

C. Process design

I. In respect of its own procedural practice, the Kammer für international Handelssachen should borrow “best practices” from patent litigation and international commercial arbitration:

1. The court should establish a “road map” with the parties at the start of the process; this would structure the course of the procedure. In this respect, it would seem to be a good idea to use the first hearing as a “Case Management Conference” with the parties:
2. Intensive use of the obligation of the court to provide information on open legal and factual issues under section 139 ZPO (German Code of Civil Procedure – the text is reproduced at the end of the document), in order to facilitate a speedy and transparent procedure;
3. Written preparation statements of witnesses shall generally be permitted (see § 377 (3) ZPO);
4. Increased use of sections 142 to 144 ZPO to enable a (structured) exchange of evidence between the parties under the control of the court (“German disclosure”);
5. Recording of the hearing and preparation of a textual record (sections 160 to 164 ZPO) – as an electronic document.

II. Extensive use of the English language within the existing framework of sections 184 and 185 (2) of the Court Organisation Act (but no English-speaking hearings per se). The court should decide at its own discretion whether and to what extent the hearing is held in English. The proposals of the parties must be respected as far as possible.

1. No translation of documents which are drafted in the English language (as already foreseen by section 142 (3) ZPO):
2. Witness will be heard in their original tongue or in English;
3. Extensive use of video conferencing:
4. Elaboration of judgments in a way which allows for their speedy translation into foreign languages.

D. The implementation of the initiative

I. Obtaining the support of lawyers, the judiciary and politicians in Hesse (Fall 2016)

II. Opening symposium on the 30th of March 2017;

III. Establishment of a working group with the aim of defining the necessary measures to be taken;

IV. Development and implementation of an accompanying communication strategy;

V. Establishment of a chamber for international trading at Regional Court of Frankfurt and a parallel specialization at the the Heigher Regional Court preferably on January 1, 2018 (within the business distribution plan of 2018).

All in all, the undertaking of the necessary organizational endeavor as well as the timetable for the implementation of the initiative both appears to be feasible. The implementation requires, in particular, the establishment of the Chamber for International Commercial Disputes (Kammer für international Handelssachen) within the District Court of Frankfurt. The following disputes could be assigned to the Chamber from the date of its establishment: international disputes, where the jurisdiction of the Landgericht Frankfurt (District Court of Frankfurt) is based on the Brussels Ibis Regulation or the Lugano Convention. Within the District Court, the respective disputes would be allocated to the specialized chamber via the business distribution plan of the court.

Annex: The pertinent provisions of the German Code of Civil Procedure and the Court Organisation Act

Code of Civil Procedure (Zivilprozessordnung – ZPO)

Section 139 Direction in substance of the course of proceedings

(1) To the extent required, the court is to discuss with the parties the circumstances and facts as well as the relationship of the parties to the dispute, both in terms of the factual aspects of the matter and of its legal ramifications, and it is to ask questions. The court is to work towards ensuring that the parties to the dispute make declarations in due time and completely, regarding all significant facts, and in particular is to ensure that the parties amend by further information those facts that they have asserted only incompletely, that they designate the evidence, and that they file the relevant petitions.

(2) The court may base its decision on an aspect that a party has recognisably overlooked or has deemed to be insignificant, provided that this does not merely concern an ancillary claim, only if it has given corresponding notice of this fact and has allowed the opportunity to address the matter. The same shall apply for any aspect that the court assesses differently than both parties do.

(3) The court is to draw the parties’ attention to its concerns regarding any items it is to take into account ex officio.

(4) Notice by the court as provided for by this rule is to be given at the earliest possible time, and a written record is to be prepared. The fact of such notice having been given may be proven only by the content of the files. The content of the files may be challenged exclusively by submitting proof that they have been forged.

(5) If it is not possible for a party to immediately make a declaration regarding a notice from the court, then the court is to determine a period, upon the party having filed a corresponding application, within which this party may supplement its declaration in a written pleading.

Section 142 Order to produce records or documents

(1) The court may direct one of the parties or a third party to produce records or documents, as well as any other material, that are in its possession and to which one of the parties has made reference. The court may set a deadline in this regard and may direct that the material so produced remain with the court registry for a period to be determined by the court.

(2) Third parties shall not be under obligation to produce such material unless this can be reasonably expected of them, or to the extent they are entitled to refuse to testify (…).

(3) The court may direct that records or documents prepared in a foreign language be translated by a translator who has been authorised or publicly appointed by the authorities of a Land, under the stipulations of Land law, for the preparation of translations of the nature required, or who is deemed to have equivalent qualifications. The translation shall be deemed to be true and complete where this is confirmed by the translator. The confirmation is to be set out on the translation, as are the place and date of the translation and the translator’s authorisation/appointment/equivalency, and the translated document is to be signed by the translator. It is admissible to prove that the translation is incorrect or incomplete. The order provided for in the first sentence hereof may not be issued to the third party.

Section 143 Order to transmit files

The court may direct the parties to the dispute to produce the files in their possession to the extent they consist of documents concerning the hearing on the matter and the decision by the court.

 Section 144 Visual evidence taken on site; experts

(1) The court may direct that visual evidence is to be taken on site, and may also direct that experts are to prepare a report. For this purpose, it may direct that a party to the proceedings or a third party produce an object in its possession, and may set a corresponding deadline therefor. The court may also direct that a party is to tolerate a measure taken under the first sentence hereof, unless this measure concerns a residence.

(2) Third parties are not under obligation to so produce objects or to tolerate a measure unless this can be reasonably expected of them, or to the extent they are entitled to refuse to testify pursuant to sections 383 to 385. Sections 386 to 390 shall apply mutatis mutandis.

(3) The proceedings shall be governed by the rules applying to visual evidence taken on site as ordered upon corresponding application having been made, or by those applying to the preparation of reports by experts as ordered by the court upon corresponding application having been made.

Section 377 Summons of a witness

(3) The court may instruct that the question regarding which evidence is to be taken may be answered in writing should it believe that, in light of the content of the question regarding which evidence is to be taken and taking into consideration the person of the witness, it suffices to proceed in this manner. The attention of the witness is to be drawn to the fact that he may be summoned to be examined as a witness. The court shall direct the witness to be summoned if it believes that this is necessary in order to further clear up the question regarding which evidence is to be taken.

Court Organisation Act

Section 184

The language of the court shall be German. The right of the Sorbs to speak Sorbian before the courts in the home districts of the Sorbian population shall be guaranteed.

 Section 185

(1) If persons are participating in the hearing who do not have a command of the German language, an interpreter shall be called in. No additional record shall be made in the foreign language; however, testimony and declarations given in the foreign language should also be included in the record or appended thereto in the foreign language if and to the extent that the judge deems this necessary in view of the importance of the case.(…)

(2) An interpreter may be dispensed with if all the persons involved have a command of the foreign language.

The House of Commons’ report on ‘negotiating priorities for the justice system’ reviews more than conflict of laws, indeed it is a tour d’horizon of most (if not all) issues relevant to Justice and Home Affairs in the EU. Martha Requejo makes a number of valid points on the report and indeed plenty of these, and others, have been made by a number of conflicts commentators: I will not review all here. There is a scholarly cottage industry on post-Brexit issues and the area of private international law is no exception.

The report mentions among others that a role for the CJEU in respect of essentially procedural legislation concerning jurisdiction, applicable law, and the recognition and enforcement of judgments, is a price worth paying to maintain the effective cross-border tools of justice discussed throughout our earlier recommendations. That is a very sensible approach, not just within the overall context of UK /continent judicial co-operation: it is also an obvious lifeline for London’s legal services market. Without proper integration into the EU’s civil procedure corpus, judgments from UK courts will immediately lose a lot of their appeal. The Government however have manoeuvred itself into a cul-de-sac by rejecting a role for the European Court of Justice post Brexit. The report’s call, and many with it, therefore is likely to fall upon deaf ears. Both for the UK and for EU conflicts rules, this will be a great loss. Few continental courts live up to the same standards as their UK counterparts when it comes to applying the intricate detail of conflict of laws, whether EU based or not.

Geert.

Il Dipartimento di Giurisprudenza dell’Università di Roma Tre ospita una serie di incontri su temi di diritto internazionale privato.

Interverranno: Pietro Franzina (il 10 Aprile 2017, La tutela internazionale dell’adulto vulnerabile), Caroline Adolphsen (2 maggio 2017, Children seeking asylum in Europe: a Scandinavian approach), Francesco Salerno (2 maggio 2017, “Bruxelles I-bis” e titolo esecutivo europeo: l’efficacia delle decisioni straniere nelle discipline uniformi europee), Javier Carrascosa González (8 maggio 2017, Il nome nel diritto internazionale privato e Matrimonio tra persone dello stesso sesso e unioni registrate in Europa), Maria Asunción Cebrián Salvat (8 maggio 2017, Il regime patrimoniale nel matrimonio e nelle unioni registrate), Javier Carrascosa González e Maria Asunción Cebrián Salvat (9 maggio 2017, Il divorzio nel diritto dell’Unione europea: giurisdizione e legge applicabile e Il regolamento dell’Unione europea sulle successioni) e Francesca Pietrangeli (15 maggio 2017, La clausola di individuazione della legge applicabile al contratto).

Gli incontri si collocano nel quadro delle attività della Cattedra di Diritto internazionale della prof.ssa Antonietta Di Blase.

Maggiori informazioni nella locandina reperibile a questo indirizzo.

Since Wednesday it is official: The UK will leave the EU. What this means for judicial cooperation in cross-border matters has been the subject of an intense debate over the last months. The UK government, however, has thus far not indicated how it plans to proceed. A White Paper that was released yesterday now gives some basis for speculation:

• The UK will adopt a Great Repeal Bill that will convert the current body of EU law, notably directly applicable EU Regulations, into UK domestic law (para. 2.4).

• When applying the EU-derived body of law UK courts will be required to give “historic” CJEU decisions, i.e. decisions that the CJEU will render up until the day of Brexit, the same binding, or precendent status as decisions of the UK Supreme Court (para. 2.14).

• To the extent that EU law cannot simply be converted into domestic law, because it is based on reciprocity, the UK will seek to secure reciprocal arrangements as a part of the new relationship with the EU (para. 3.3).

Applied to conflict of laws this suggests that the UK will most likely convert the non-reciprocal regulations, notably the Rome I and the Rome II Regulations, into domestic law and apply them unilaterally. UK courts will then be required to follow and apply relevant CJEU decisions that have been and will be rendered up to the date of Brexit. As regards regulations that rest on the principle of reciprocity, notably the Brussels Ia Regulation but also the Service and Evidence Regulation, the UK will mostly seek to secure their continued reciprocal application.

Of course, this leaves a lot of questions open. What will, for example, happen to post-Brexit CJEU decisions relating to the Rome I and the Rome II Regulation? Will they have any meaning for UK courts? And what happens to the Brussels Ia Regulation if the UK and the EU do manage to reach agreenement on its continued reciprocal application?

So, stay tuned.

On Friday, 12 May 2017, Professor Sabine Corneloup and Alexandre Boiché will organize a symposium on the recast of the Brussels IIbis Regulation in Paris. The following announcement has been kindly provided by Professor Corneloup:

“On June 30th 2016, the European Commission submitted a proposal for the revision of Regulation n° 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility. While the overall operation of the Regulation is considered to be satisfactory, the Regulation has shortcomings and lacks clarity on some points, in particular with regard to questions of parental responsibility. Problems encountered include excessive delays, caused by imprecisions in the Regulation on the length of proceedings, or by the necessity to obtain the exequatur. Cross-border recognition and enforcement of decisions are still too often hampered by divergent national practices, may it be the hearing of the child or the enforcement measures that may be taken. Furthermore, the role of the central authorities has not been defined with sufficient precision, possibly leading to dysfunctional cross-border cooperation, thus jeopardizing mutual trust between Member States and the protection of the fundamental rights of children. Regarding matrimonial matters, on the other hand, the Commission proposes the status quo: choice of court agreements are not among the innovations selected.
The symposium brings together experts from the academic and institutional worlds as well as from the bar, who share their experience in order to work together to reach solutions to the problems and shortcomings observed.”

The full programme is available here.

The event will take place at:

University Paris II, Panthéon-Assas
Centre Vaugirard 1
391 rue de Vaugirard
75015 Paris
France

The conference will be held in French.

For further information and registration, please contact Ms Laurence Tacquard:
+ 33 1 44 41 56 01
laurence.tacquard@u-paris2.fr

Closely linked to my post this morning re Chiquita and CSR, here’s a review of the French CSR corporate vigilance /duty of care Act. I had planned to do my own review but hey, why re-invent the wheel when Ms Bergkamp’s is ticking over nicely.
See also a follow up post here http://bit.ly/2ofirlK on the French Constitutional court seeing little issue with the civil liability side of the Act.

Corporate Finance Lab

On 21 February 2017, the French Parliament adopted a law (the “Corporate Duty of Vigilance Law” or “Law”) that creates novel corporate supply chain liability. Specifically, the Corporate Duty of Vigilance Law imposes a duty of vigilance on large companies to prevent serious violations of human rights and fundamental freedoms and serious environmental damage in their supply chain. In a previous post, I discussed the concept of supply chain liability. As I pointed out there, the concept had not been defined by law makers yet. The French legislature has now attempted to operationalize the concept through new legislation.

View original post 1,588 more words

The title of this post is a result of my confusion on the state of various suits against Chiquita, on alleged collusion in or perpetration of human rights abuses in Columbia. I had reported earlier (scroll down to ‘update on linked development’; this hyperlinks to all relevant links) that the US Supreme Court had denied certiorari in a ruling of the 11th U.S. Circuit Court of Appeals in Miami. This left that ruling standing (a strict application of SCOTUS’ view in Kiobel).

End November (I had tweeted it at the time; my ledger has not left me an opportunity to post on it since) the Southern District court of Florida dismissed an application on forum non conveniens grounds in what must be related litigation. Except my limited knowledge of jurisdictional levels in the US leaves me in doubt where the link is between these two developments (US readers please assist if you can).

At any rate, the ruling reviewed here is a textbook example of forum non conveniens (motion dismissed, nota bene) and a great source for a comparative conflicts class. Such as I teach at Monash :-).

Geert.

(Handbook of) European Private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.14.5.

The year 2016 did not only mark 30 years since the great reform of German private international law in 1986, but it was also the 35th anniversary of the foundation of the Praxis des Internationalen Privat- und Verfahrensrechts (IPRax). Therefore, Professor Heinz-Peter Mansel, President of the German Council for Private International Law and editor-in-chief of IPRax, and Professor Jan von Hein, chairman of the Council’s 2nd Commission, organized a celebratory conference on 23-24 September 2016 at the University of Cologne (Germany) under the title: “Codification of Private International Law: German Experience and European Perspectives Thirty Years After the PIL-Reform of 1986” (see our previous post here). The conference was (mostly) held in German and generously supported by Gieseking, the publisher of IPRax. After being welcomed by Dr. Johannes C. Wichard (Federal Ministry of Justice and for Consumer Protection), the speakers – members of the German Council and a guest from Switzerland – both analyzed how private international law has evolved in the past and provided an outlook on current and future challenges of the field, particularly in the European context. The conference proceedings have now been published in IPRax 2/2017. The abstracts (kindly provided by the publisher) read as follows:

D. Henrich: The Deutsche Rat für Internationales Privatrecht and the genesis of the Rearrangement Act of International Private Law

The article shows the different stages on the way to the so-called IPR-Neuregelungsgesetz (Rearrangement Act of International Private Law) 1986. Starting point was Art. 3(2) of the German Grundgesetz: Men and women having equal rights. Consequently, the rules of applicable law could no longer prefer husband or father over wife or mother. Above all, the article describes the role of the Deutscher Rat für Internationales Privatrecht constituted in 1953 in developing proposals not only to fill the gaps opened by Art. 3(2) GG but also for the formulation of a modern Act of Private International Law.

J. Pirrung: International and European Influence on the 1986 Reform of Private International Law

The 1986 reform of German Private International Law did not neglect international solutions, essentially such as proposed by the Hague Conference on PIL. But, in the main issues, determination of the law to be applied concerning the person, family relationships and succession, as well as in international procedural questions with regard to these matters, the reform largely followed the proposals of the German Council on PIL, namely application of the law of the nationality of the persons concerned, with some attenuations by applying the law of the State of habitual residence and admitting, to a certain extent, party autonomy. The relatively short provisions on these matters are in contrast to the rather detailed Articles of the 1980 Rome Convention on contractual obligations. Nevertheless, the incorporation of the rules of the Convention into the Introductory Provisions to the Civil Code (EGBGB) followed strong practical interests. This solution, though criticized by the EEC Commission and the Max-Planck-Institute on PIL, convinced the Law Committee of the Parliament. After 30 years, some important parts of the reform have, up to now, survived – Art. 4–7, 9, 11–16 EGBGB; but PIL on divorce, childhood, succession and obligations has undergone many changes, mainly because of the influence of the EU.

P. Mankowski: The principle of nationality – in the past and today

Since 1986, when the EGBGB was promulgated, the principle of nationality has lost ground in PIL. European PIL has switched over to the principle of habitual residence. The most recent examples are the PIL of successions and the PIL of matrimonial property. The principle of nationality can be based on the links between a State and its citizens, in particular the right to vote. Furthermore, nationality appears to be a pragmatic and practical connecting factor for nationality can be evidenced by ID documents like passports or ID cards. Yet, factual developments challenge this assumption: allegedly lost or burnt ID documents, forgery, States not issuing ID documents. All these challenges demand subsidiary answers or solutions.

A. Dutta: Habitual residence – Success and future of a connecting factor

The battle over the appropriate personal connecting factor in private international law appears to be over, at least on the continent where nationality has been increasingly ousted by habitual residence. The paper shows that, from a German perspective, this development did not start with the activities of the European legislature in the area of private international law. Rather, the Hague Conventions and also national law had already laid the basis for a shift from a purely legal to a more factually oriented connecting factor in order to identify the law which is most closely connected to a natural person. The article sketches the advantages of habitual residence from the perspective of the European Union before addressing some future challenges, in particular the danger of a domicilisation of habitual residence and the limits of personal connecting factors in general, especially as to “new” family status relations.

S. Corneloup: On the loss of significance of renvoi

The moderately “renvoi-friendly” attitude of the German legislator of 1986 contrasts with the evolutions having taken place on the European level, where principle and exception are clearly reversed. Today the question whether renvoi is to be observed has become rather negligible. Several reasons may explain this reality. Significant changes in PIL over the last decades have rarefied the practical need for renvoi, as the latter presupposes a specific constellation of the case, which has become less frequent in today’s practice. Moreover, the objectives of renvoi are increasingly implemented through functional equivalents, which stem mainly from the field of international and European civil procedure, resulting in a further loss of significance of renvoi. In addition, the aim of international uniformity of decision, which is the main rationale behind renvoi, no longer expresses the overall priority of legislators and courts, as considerations based on substantive law increasingly take precedence over the uniformity of decision. This frequently results in an exclusion of renvoi.

T. Helms: Public policy – The influence of basic and human rights on private international law

On the occasion of the 30th anniversary of the extensive German private international law reform of 1986, this article seeks to determine the influence of basic and human rights on public policy. It demonstrates how the national public policy exception in Art. 6 of the Introductory Act to the Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch/EGBGB) is, by and large, substantially identical to the specific public policy exceptions that are enshrined in the European regulations on private international law. Impetus in favor of a European public policy has been provided by the jurisprudence of the European Court of Human Rights in particular. Recent decisions of the ECtHR which have had especially wide-ranging consequences for German law include the Mennesson and Labassee cases, which determined to whom a child born to a surrogate abroad is related under parentage law.

B. Heiderhoff: The autonomous German Private International Law in family matters

Following the order of provisions contained in the EGBGB, from Art. 13 to Art. 24, the essay gives an overview over the most important changes of German international family law since 1986. Some topical issues, such as the validity of marriages with minor refugees and the application of the Rome III-Regulation to the recognition of private divorces are discussed. It is demonstrated that the existing legal framework does not solve all issues in a satisfactory, contemporary manner. Some newer subjects, such as the treatment of same-sex marriages or of children born by surrogate mothers, require further reforms of international family law. In summary, it can be observed that the importance of the nationality of the parties for the determination of the applicable law is diminishing, while the habitual residence has gained substantially in importance. At the same time, party autonomy has been strengthened. While this may partly raise concerns about the protection of the weaker party, it is clearly a necessary complement to the habitual residence as connecting factor. It is the only way to reach stability for legal relationships. These changes have been caused mainly by EU-law and the principle of free movement of persons. However, the reforms, both those already implemented and those yet to come, are not simply triggered by Europeanisation, but have been and will be reactions to modifications in the material family law and to changes in human behavior in familial contexts.

M.-P. Weller: The German autonomous International Company Law

The following article presents the state of the art of German autonomous International Company Law. It discusses the real seat theory, which is applied in cases concerning third state companies. In consequence of this approach, companies from third states (e.g. from Switzerland) are converted into domestic partnerships. In addition, the article shows that the applicable company law is superposed by international mandatory rules. Furthermore, it has to be delimited from company insolvency law by the method of classification. Finally, the article highlights mechanisms to impose creditor protection and domestic public interests vis-à-vis foreign companies.

E. Jayme: The future relevance of national codifications of private international law

The European Union has enacted many regulations concerning conflict of laws and international civil procedure. In addition, there are many international conventions which contain conflicts rules. National codifications of private international law, however, retain their relevance for many questions which have not been regulated by European Acts and international conventions. We may mention the whole area of property, the law concerning the conclusion of marriage as well as some parts of the law of parents and children such as the establishment of paternity. The European conflicts rules, sometimes, state expressly not being applicable to certain questions such as invasion of privacy or agency. Here, national codifications remain in force. In addition, also methods and instruments of national conflicts law such as “characterization” will still be of some relevance, particularly with regard to the borderline between private international law and international civil procedure.

A. Bonomi: European Private International Law and Third States

Articulated in a number of sectorial regulations, the European private international law system has not always grown in a very systematic way. After years of swift development towards a more extensive coverage of different civil law areas and an increased integration of the national systems, the time has probably come to improve the coordination among the single instruments. The regulation of third-country relationships is undoubtedly one of those issues that call for a more consistent approach. While the universal application of choice-of-law rules is a constant feature of all adopted regulations, unjustified disparities persist with respect to jurisdiction and lis pendens. The national rules of the Member States have been entirely replaced by uniform European rules in certain areas, whereas they are still very relevant in others. Parallel proceedings pending in a third country are dealt with under one regulation, but ignored by the others. And while the recognition and enforcement of third-country judgments is consistently left to national law, this might seem at odds with the far-reaching European coverage of jurisdiction and choice-of-law issues. Hopefully, the Hague Judgments Project will result in a successful convention in the near future. But the external relations of the EU in the area of private international law should not depend entirely on the prospects for a Hague instrument. Whether this prospect materializes or not, the EU institutions should take advantage of the negotiation process in order to elaborate on a coherent set of unilateral European law rules for disputes involving parties of third countries

(This contribution is published in English.)

J. Basedow: EU Conflicts Legislation and the Hague Conference – A Difficult Relationship

The transfer of legislative competence for the conflict of laws to the EU by the Treaty of Amsterdam has compelled the Hague Conference to aim at new goals. It was necessary to strengthen the universal character of this organization. As shown by the institutional development of EU and Hague Conference this goal has come closer. However, the legislative activities throughout the last 15 years indicate that the Europeans still exercise a controlling influence on the projects of the Hague Conference; this emerges from the judgements project, the maintenance project and the Principles on Choice of Law. For the future, the author advocates the adoption of more non-binding texts such as principles or model laws, that it cares more for the functioning of existing conventions and that it commits itself more to the dissemination of knowledge on the conflict of laws.

E.-M. Kieninger: Towards a Codification of European Private International Law?

In the first part, the article focuses on those areas of commercially relevant private international law which so far have not been touched by the European legislator, i.e. the law applicable to companies and to property law issues. In the second part, the author argues that an overall codification of European Private International Law, although perhaps desirable, might not be feasible and suggests a more moderate approach

In [2017] EWHC 25 (Ch) the Frogmore Group,  there are three relevant companies: FREP (Knowle) Limited. FREP (Ellesmere Port) Limited and FREP (Belle Vale) Limited all of which were incorporated in and have their registered office in Jersey. The Companies form part of Frogmore group (of which the ultimate parent is Frogmore Property Company Limited). The Frogmore group specialises in real estate investment and management in the UK and each of the Companies owns a shopping centre located at Ellesmere Port in Cheshire, Belle Vale in Liverpool and Knowle in Bristol respectively. Each of these shopping centres is managed by Frogmore Real Estate Investment Managers Limited (“FREPIM”), a company formed in England and Wales with its registered office and base for operations at London.

The Nationwide seeking enforcement of security, the group sought a declaration that COMI was at Jersey.

Marshall DJ held with reference to the familiar precedents of Eurofood and Interedil, both featuring heavily in my earlier postings on COMI, but also to Northsea Base Investments in which Birss J paid particular attention to the largest shareholders. Of note is that this reference to the largest shareholders does not entail (and indeed is not so constructed in either Northsea Base or Frogmore) that these get the pick of what COMI might entail. Rather, that the dealings with and experience of one place as being the place where the company’s interest are being managed from, is of particular interest for the Interedil emphasis on ascertainability by third parties. Marshall DJ also rekindles the discussion on whether Interedil’s emphasis is on identifying the ‘Head office’ of the companies: a conclusion which one needs to treat with caution for even in Interedil’s tacit support for the head office approach, the emphasis continues to lie with the combination of factors, all leading to transparency and publicity.

The High Court in the end held with reference to the following: (at 39; all wording as  the judgment but with one or two words left out)

(1) Day- to-day conduct of the business and activities of the Companies has been in the hands of an agent appointed in England, namely FREPIM. Under the Advisory Agreement (which was itself governed by English law and had an English exclusive jurisdiction clause) FREPIM was to take on full responsibility for providing a very large range of services to the Companies, including day-to-day management of the Shopping Centres and dealing with their financing, accounting, marketing and formulation of their business strategy. FREPIM  itself acknowledged that it worked on investment strategy and business plans for the Companies; instructed lawyers, surveyors and consultants for them; negotiated the purchase and sale of properties on their behalf; dealt with their borrowing requirements; and attended to the provision of accounting systems and the preparation of management and annual accounts. These actions were not just limited commercial activities but included the types of function that one would expect a head office to discharge.

(2) Day-to-day dealings with third parties are carried out from the offices of FREPIM at London. This is confirmed by the evidence of the activity of FREPIM described above but it is also supported by, for example, the Companies’ VAT returns where their business address is stated to be those offices. In their day-to-day dealings with third parties regarding expenditure these offices are given as the address for invoices.

(3) If one has regard to the point of view of the largest creditor, Nationwide, the Facility Agreement and the Nationwide Debentures are governed by English law and have an English jurisdiction clause. Under the Facility Agreement the Shareholder is the service agent for the Companies. In the case of the Nationwide Debentures, they have express reference to the power to appoint administrators under the 1986 Act. FREPIM took over the day-to-day contact with Nationwide as well as providing Nationwide with various pieces of information (such as quarterly compliance packs and accounts for borrowers) and did so from London. FREPIM also accepted that the management of the relationship between the Companies and Nationwide had been carried out by [the group treasurer] and the Chairman of the Frogmore group, who was also based in London.

(4) I also note that under the terms of the debentures securing the advances made by the Shareholder that the governing law is English, there is an English exclusive jurisdiction clause, that FREPIM is appointed the service agent of the Companies and there is express provision for the appointment of administrators under the 1986 Act.

The case is a good reminder that even intricate SPV structures should not detract from COMI finding on well-established principles. And that COMI determination always depends on a basket of criteria.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.2., Heading 5.6.1.2.4.

I reported earlier on the November 2015 draft ‘Judgments project’ of the Hague Conference on private international law, otherwise known as the draft convention on the recognition and enforcement of judgments relating to civil and commercial matters. The working group now has a February 2017 draft out. (The project nota bene has even increased in relevance given Brexit).

I could have titled this post ‘spot the differences’ for of course there are changes in formulation between current and previous version. However my main point of concern remains: the absence of Wally: some type of institutional redress which will assist courts in the interpretation of the Convention. Article 23 now calls for uniform interpretation, and there will, one assumes, be a report accompanying its adoption. (Judging by the size of commentaries on the EU mirror, Brussels I Recast, this could turn out to be a very sizeable report indeed). However without a court system ensuring uniformity of application, the Convention in my view will risk being a dead duck in the water.

Geert. (Not by nature pessimistic. But probably realistic).

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

On 17 February 2017, the German government presented a legislative draft on child marriage that represents a significant departure from current court practice (the text of the draft is available here). The legal status quo envisages a case-by-case examination whether a marriage was lawfully concluded outside of Germany. Such a determination considers both whether the marriage was consistent with German public policy and whether the surrounding circumstances of the individual situation of the minor spouse were taken into account. Particularly in cases where the marriage was concluded already some time ago and the spouses have since then voluntarily stayed together and established a family life, German courts have in the past upheld foreign marriages that would have been regarded as offensive at the time of their conclusion. Contrary to this case-by-case approach, the centerpiece of the recent draft is the automatic and strict non-recognition of marriages concluded outside of Germany by persons under the age of sixteen. Furthermore, marriages concluded by persons between the ages of sixteen and eighteen shall only be recognized if severe negative consequences were to occur otherwise.

In a recently published interview, Professor Jürgen Basedow, Director of the Max-Planck-Institute for Comparative and Private International Law in Hamburg, criticizes the rigid setting of a minimum age and the underlying assumption of the draft that a strict non-recognition of an under-age marriage would always be beneficial to the person concerned: “This overlooks many realities: In many instances the under-aged wife does not desire such assistance; for many young women marriage represents a recognition of their adulthood within their particular social setting.“ Basedow states further that there is no sensible way to avoid a meticulous case-by-case analysis of the particular circumstances of the individual case. The proposed draft, however, would lead to inflexibility and offer only little leeway to take the cultural identity of the spouses and their personal decisions into account.

The full interview with Jürgen Basedow is accessible here.

The abandonment of the EU by the UK is at the root of many doubts concerning the legal regime of cross-border private relationships. Little by little the panorama begins to clear up as the expectations and objectives of the UK are made public. Regarding cross-border civil and commercial matters, several Evidence Sessions have been held from December to January at the House of Lords before the Select Committee on the European Union, Justice Sub-committee (transcripts are available here); the Final Report was published yesterday.

At the end of January, the Minister of State for Courts and Justice gave the Committee details as to the hopes on the side of the UK of the post-Brexit best case scenario, which in a nutshell would rely on two main pillars: a set of common rules -either the regulations themselves, incorporated into the Great Repeal Act; or new agreements with the EU taking up the contents of the European rules- to ensure mutuality and reciprocity; and the absence of any post-Brexit role for the Court of Justice.

To what extent is this workable?

Taking the risk of repeating what other colleagues have already said let me share some basic thoughts on the issue from the continental point of view. The ideas are complemented and developed further in a piece that will be published in a collective book – Diversity & Integration: Exploring Ways Forward, to be edited by Dr. Veronica Ruiz Abou-Nigm and Prof. Maria Blanca Noodt Taquela.

It is indeed sensible to have solutions on cross-border jurisdiction and recognition and enforcement of decisions which enhance certainty for the continental citizens with interests in third States; this is a general truth. The British negotiators would have to prove (with qualitative and quantitative arguments) what is so particular about the UK that an EU/UK convention is of the essence for the post-Brexit time. Moreover, and more important, the UK will have to convince the EU that the particular solutions to be agreed are those currently contained in the European regulations; and also, about the CJEU not being part of the agreement. For the endeavor to succeed fundamental obstacles must be overcome, all related to the systemic nature of the EU. Among the most obvious ones I would like to point to the following:

.- The inadequacy of the solutions. Certain mechanisms and technical solutions of the EU civil procedural law instruments, such as the abolition of the exequatur, have been endorsed only for integration. There are reasons to be skeptical about the “exportability” of the far-reaching solutions – in terms of removal of obstacles to the circulation of judgments- of the current EU procedural regulations to a context not presided by the philosophy of integration. Within the EU, the sacrifices imposed by mutual trust to the right to due process  of individuals are endurable in the name of integration as a greater, common good. In the absence of any integration goal there is no apparent reason for an all-embracing blind reciprocal trust (neither of the EU MS in the UK nor vice versa).

.- The systemic character of the acquis communautaire. The EU legal instruments complement and reinforce one another: any proposal to reproduce single, isolated elements of the system in a bilateral convention EU/UK ignores this fact. Ties and links among the components of legal systems may be stronger or looser. When confronted with a proposal such as the UK, one of the unavoidable questions to be answered is to what extent the EU instruments can have a separate, independent life one from each other.

.- In a similar vein: the EU PIL system does not start, nor does it end, in a few regulations – those which typically come to mind. Many PIL and procedural rules for cross-border cases are set in EU acts with a broader content and purpose. What about them?

.- MS are actors in the system: they must keep loyal to it; they cannot escape from it. When applying their laws and when legislating they are subject to the overarching obligation of making it in a way that preserves the effet utile of the EU rules. This creates from the outset a structural imbalance to any international agreement between the MS (the EU) and third countries: the MS enjoy very little -if at all- leeway to deviate from the constraint of keeping EU-consistent. Indeed, a similar situation would arise in connection to any other international agreement, but it is likely to be more problematic in the case of conventions which replicate the contents of the EU regulations but not their (EU) inspiration, nor their objectives.

.- International agreements concluded by the European Union (as opposed to those signed by the MS) form an integral part of its legal order and can therefore be the subject of a request for a preliminary ruling by the MS. De iure, once the UK is no longer an EU MS the CJEU findings will not be binding on it. The fact remains that diverging interpretations -one for the MS, another from the side of the UK- of the same bilateral instrument will jeopardize its very purpose (and I am glad to read in the Final Report above mentioned: The end of the substantive part of the CJEU’s jurisdiction in the UK is an inevitable consequence of Brexit. If the UK and the EU could continue their mutually-beneficial cooperation in the ways we outline earlier without placing any binding authority at all on that Court’s rulings, that could be ideal. However, a role for the CJEU in respect of essentially procedural legislation concerning jurisdiction, applicable law, and the recognition and enforcement of judgments, is a price worth paying to maintain the effective cross-border tools of justice discussed throughout our earlier recommendations. (Paragraph 35).

On 8-9 June 2017, the Academy of European Law (ERA) will host a conference on European Insolvency Law under the title:

“Insolvency Proceedings within the EU: Latest Developments”

at the ERA conference center in Trier (Germany).

The conference will give an in-depth analysis of the recast EU Regulation No 2015/848 on insolvency proceedings which will become applicable from 26 June 2017, in particular

• scope of the Regulation, pre-insolvency and hybrid proceedings
• main, secondary and synthetic proceedings
• groups of companies and the new group coordination proceeding
• Furthermore it will discuss the
• new Commission proposal for a Directive on insolvency, restructuring and second chance, published late 2016, and
• post-Brexit implications for insolvency and restructuring

This conference aims to meet the requirements of insolvency lawyers to stay informed on the latest developments in jurisprudence and legislation in insolvency matters at EU level. It will examine practical problems in applying the recast Insolvency Regulation, consequences of Brexit and the recent EU proposal on business insolvency.

The confirmed Speakers are:

• Stefania Bariatti, Professor at the University of Milan; Of Counsel, Chiomenti Studio Legale, Milan
• Alexander Bornemann, Head of Division, Federal Ministry of Justice and Consumer Protection, Berlin
• Florian Bruder, Rechtsanwalt, Counsel, DLA Piper, Munich
• Jenny Clift, Senior Legal Officer, International Trade Law Division, UNCITRAL Secretariat, Vienna
• Reinhard Dammann, Avocat à la Cour; Partner, Clifford Chance Europe LLP, Paris
• Francisco Garcimartín, Professor of Private International Law at the Autonomous University of Madrid
• Gabriel Moss QC, Barrister, 3-4 South Square, Gray’s Inn, London; Visiting Professor at Oxford University
• Andreas Stein, Head of Unit, Civil Justice Policy, DG Justice and Consumers, European Commission, Brussels
• Nico Tollenaar, RESOR, Amsterdam
• Michael Veder, Adviser at RESOR, Amsterdam; Professor of Insolvency Law at Radboud University Nijmegen; Chair of INSOL Europe Academic Forum
• Bob Wessels, Independent Legal Counsel, Adviser and Arbitrator; Professor emeritus at the University of Leiden

The conference language will be English. The event is organized by Dr Angelika Fuchs (ERA). The programme of the conference, together with a registration form, can be found here.

After  Shell/Okpabi, the High Court has now for the second time in 2017 rejected jurisdiction to be established against the foreign subsidiary (here: in Kenya) using the mother company as an anchor. In [2017] EWHC 371 (QB) AAA et al v Unilever and Unilever Tea Kenya ltd, Unilever is the ultimate holding company and registered in the UK. Its subsidiary is a company registered in Kenya. It operates a tea plantation there. Plaintiffs were employed, or lived there, and were the victims of ethnic violence carried out by armed criminals on the Plantation after the Presidential election in Kenya in 2007. They claim that the risk of such violence was foreseeable by both defendants, that these owed a duty of care to protect them from the risks of such violence, and that they had breached that duty.

Laing J unusually first of (at 63 ff) all declines to reject the case on ‘case management’ grounds. Unlike many of her colleagues she is more inclined to see such stay as ignoring ‘through the back door’ Owusu‘s rejection of forum non conveniens.  I believe she is right. Instead the High Court threw out the case on the basis that the claims, prima facie (on deciding jurisdiction, the Court does not review the substantial merits of the case; a thin line to cross) had no merit. Three issues had to be decided:

i) By reference to what law should the claim be decided? This was agreed as being Kenyan law.

ii) Are the criteria in Caparo v Dickman [1990] 2 AC 605 satisfied? (A leading English law case on the test for the duty of care). The relevance of English law on this issues comes about as a result of Kenyan law following the same Caparo test: as I have noted elsewhere, it is not without discussion that lex fori should apply to this test of attributability. Laing J held that the Caparo criteria were not fulfilled. The events were not as such foreseeable (in particular: a general breakdown in law and order). Importantly, with respect to the holding company and as helpfully summarised by Herbert Smith:

• the pleaded duty effectively required the holding to ensure that the claimants did not suffer the damage that they suffered, and not merely to take reasonable steps to ensure their safety;
• the pleaded duty also effectively imposed liability on that holding for the criminal acts of third parties, and required it to act as a “surrogate police force to maintain law and order”; and
• such a duty would be wider than the duty imposed on the daughter, as the actual occupier of the Plantation, under the Kenyan Occupiers’ Liability Act

At 103, Laing J discussed and dismissed plaintiff’s attempts at distinguishing Okpabi. In her view, like in Shell /Okpabi, the mother’s control is formal control exercised at a high level of abstraction, and over the content and auditing of general policies and procedures. Not  the sort of control and superior knowledge which would meet the Chandler test.

iii) Are the claims barred by limitation? This became somewhat irrelevant but the High Court ruled they were not. (This, under the common law of conflicts, was a matter of lex causae: Kenyan law, and requiring Kenyan expert input. Not English law, as the lex fori).

The case, like Okpabi, is subject to appeal however it is clear that the English courts are not willing to pick up the baton of court of prefered resort for CSR type cases against mother companies.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

On 20 March 2017 the European Union Committee of the House of Lords on Judicial hast published its Report on Judicial cooperation post-Brexit (“Brexit: Justice for families, individuals and Businesses?”). The full Report is available here. The summary reads as follows (emphasis added):

“The Brussels I Regulation (recast)

1. We acknowledge and welcome the UK’s influence over the content of these three EU Regulations which are crucial to judicial cooperation in civil matters and reflect the UK’s influence and British legal culture. We urge the Government to keep as close to these rules as possible when negotiating their post-Brexit application. (Paragraph 23)

2. The predictability and certainty of the BIR’s reciprocal rules are important to UK citizens who travel and do business within the EU. We endorse the outcome of the Government’s consultations, that an effective system of cross-border judicial cooperation with common rules is essential post-Brexit. (Paragraph 37)

3. We also note the Minister’s confirmation, in evidence to us, that the important principles contained in the Brussels I Regulation (recast) will form part of the forthcoming negotiations with the remaining EU Member States. (Paragraph 38)

4. While academic and legal witnesses differed on the post-Brexit enforceability of UK judgments, it is clear that significant problems will arise for UK citizens and businesses if the UK leaves the EU without agreement on the post-Brexit application of the BIR. (Paragraph 52)

5. The evidence provided to us suggests that the loss of certainty and predictability resulting from the loss of the BIR and the reciprocal rules it engenders will lead to an inevitable increase in cross-border litigation for UK based citizens and businesses as they continue to trade and interact with the remaining 27 EU Member States. (Paragraph 53)

6. We are concerned by the Law Society of England and Wales’ evidence that the current uncertainty surrounding Brexit is already having an impact on the UK’s market for legal services and commercial litigation, and on the choices businesses are making as to whether or not to select English contract law as the law governing their commercial relationships. (Paragraph 54)

7. The Government urgently needs to address this uncertainty and take steps to mitigate it. We therefore urge the Government to consider whether any interim measures could be adopted to address this problem, while the new UK-EU relationship is being negotiated in the two year period under Article 50. (Paragraph 55)

8. The evidence we received is clear and conclusive: there is no means by which the reciprocal rules that are central to the functioning of the BIR can be replicated in the Great Repeal Bill, or any other national legislation. It is therefore apparent that an agreement between the EU and the UK on the post-Brexit application of this legislation will be required, whether as part of a withdrawal agreement or under transitional arrangements. (Paragraph 60)

9. The Minister suggested that the Great Repeal Bill will address the need for certainty in the transitional period, but evidence we received called this into question. We are in no doubt that legal uncertainty, with its inherent costs to litigants, will follow Brexit unless there are provisions in a withdrawal or transitional agreement specifically addressing the BIR. (Paragraph 61)

10. The evidence suggests that jurisdictions in other EU Member States, and arbitrators in the UK, stand to gain from the current uncertainty over the post-Brexit application of the BIR, as may other areas of dispute resolution. (Paragraph 69)

11. With regard to arbitration, we acknowledge that the evidence points to a gain for London. But, we are also conscious of the evidence we heard on the importance of the principles of justice, in particular openness and fairness, underpinned by the publication of judgments and authorities, which are fundamental to open law. It is our view that greater recourse to arbitration does not offer a viable solution to the potential loss of the BIR. (Paragraph 70)

The Brussels IIa Regulation and the Maintenance Regulation

12. In dealing with the personal lives of adults and children, both the Brussels IIa Regulation and the Maintenance Regulation operate in a very different context from the more commercially focused Brussels I Regulation (recast). (Paragraph 81)

13. These Regulations may appear technical and complex, but the practitioners we heard from were clear that in the era of modern, mobile populations they bring much-needed clarity and certainty to the intricacies of cross-border family relations (Paragraph 82)

14. We were pleased to hear the Minister recognise the important role fulfilled by the Brussels IIa Regulation and confirm that the content of both these Regulations will form part of the forthcoming Brexit negotiations. (Paragraph 83)

15. We have significant concerns over the impact of the loss of the Brussels IIa and Maintenance Regulations post-Brexit, if no alternative arrangements are put in place. We are particularly concerned by David Williams QC’s evidence on the loss of the provisions dealing with international child abduction. (Paragraph 92)

16. To walk away from these Regulations without putting alternatives in place would seriously undermine the family law rights of UK citizens and would, ultimately, be an act of self-harm. (Paragraph 93)

17. It is clear that the Government’s promised Great Repeal Bill will be insufficient to ensure the continuing application of the Brussels II and Maintenance Regulations in the UK post-Brexit: we are unaware of any domestic legal mechanism that can replicate the reciprocal effect of the rules in these two Regulations. We are concerned that, when this point was put to him, the Minister did not acknowledge the fact that the Great Repeal Bill would not provide for the reciprocal nature of the rules contained in these Regulations. (Paragraph 97)

18. We are not convinced that the Government has, as yet, a coherent or workable plan to address the significant problems that will arise in the UK’s family law legal system post-Brexit, if alternative arrangements are not put in place. It is therefore imperative that the Government secures adequate alternative arrangements, whether as part of a withdrawal agreement or under transitional arrangements (Paragraph 98)

Options for the future

19. The balance of the evidence was overwhelmingly against returning to the common law rules, which have not been applied in the European context for over 30 years, as a means of addressing the loss of the Brussels I Regulation (recast). We note that a return to the common law would also not be the Government’s choice. (Paragraph 114)

20. A return to the common law rules would, according to most witnesses, be a recipe for confusion, expense and uncertainty. In our view, therefore, the common law is not a viable alternative to an agreement between the EU and the UK on the post-Brexit application of the Brussels I Regulation (recast). (Paragraph 115)

21. Nonetheless, in contrast to key aspects of the two Regulations dealing with family law, Professor Fentiman was of the opinion that in the event that the Government is unable to secure a post-Brexit agreement on the operation of the Brussels I Regulation (recast), a return to the common law rules would at least provide a minimum ‘safety net’. (Paragraph 116)

22. The combination of UK membership of the Lugano Convention, implementation of the Rome I and II Regulations through the Great Repeal Bill, and ratification of the Hague Convention on choice-of-court agreements, appears to offer at least a workable solution to the post-Brexit loss of the BIR. (Paragraph 126)

23. The inclusion in the Lugano Convention of a requirement for national courts to “pay due account” to each other’s decisions on the content of the Brussels I Regulation, without accepting the direct jurisdiction of the CJEU, could be compatible with the Government’s stance on the CJEU’s status post-Brexit, as long as the Government does not take too rigid a position. (Paragraph 127)

24. This approach will come at a cost. In particular, it will involve a return to the Brussels I Regulation, with all its inherent faults, which the UK as an EU Member State succeeded, after much time and effort, in reforming. (Paragraph 128)

25. In contrast to the civil and commercial field, we are particularly concerned that, save for the provisions of the Lugano Convention on cases involving maintenance, there is no satisfactory fall-back position in respect of family law. (Paragraph 135)

26. Our witnesses were unanimous that a return to common law rules for UK- EU cases would be particularly detrimental for those engaged in family law litigation. The Bar Council also suggested that an already stretched family court system would not be able to cope with the expected increase in litigation. (Paragraph 136)

27. The Bar Council specifically called for the EU framework in this field to be sustained post-Brexit. But while this may be the optimal solution in legal terms we cannot see how such an outcome can be achieved without the CJEU’s oversight. (Paragraph 137)

28. Other witnesses suggested the UK rely on the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in respect of Parental Responsibility and Measures for the Protection of Children. But the evidence suggests that this Convention offers substantially less clarity and protection for those individual engaged in family law based litigation. (Paragraph 138)

29. The Minister held fast to the Government’s policy that the Court of Justice of the European Union will have no jurisdiction in the UK post-Brexit. We remain concerned, however, that if the Government adheres rigidly to this policy it will severely constrain its choice of adequate alternative arrangements. (Paragraph 142)

30. Clearly, if the Government wishes to maintain these Regulations post-Brexit, it will have to negotiate alternative arrangements with the remaining 27 Member States to provide appropriate judicial oversight. But the Minister was unable to offer us any clear detail on the Government’s plans. When pressed on alternatives, he mentioned the Lugano Convention and “other arrangements”. We were left unable to discern a clear policy. (Paragraph 143)

31. The other examples the Minister drew on, Free Trade Agreements with Canada and South Korea, do not deal with the intricate reciprocal regime encompassed by these three Regulations. We do not see them as offering a viable alternative. (Paragraph 144)

32. We believe that the Government has not taken account of the full implications of the impact of Brexit on the areas of EU law covered by the three civil justice Regulations dealt with in this report. In the area of family law, we are very concerned that leaving the EU without an alternative system in place will have a profound and damaging impact on the UK’s family justice system and those individuals seeking redress within it. (Paragraph 145)

33. In the civil and commercial field there is the unsatisfactory safety net of the common law. But, at this time, it is unclear whether membership of the Lugano Convention, which is in itself imperfect, will be sought, offered or available. (Paragraph 146)

34. We call on the Government to publish a coherent plan for addressing the post-Brexit application of these three Regulations, and to do so as a matter of urgency. Without alternative adequate replacements, we are in no doubt that there will be great uncertainty affecting many UK and EU citizens. (Paragraph 147)”

On 16 and 17 March 2017 the Wissenschaftliche Vereinigung für Internationales Verfahrensrecht (Scientific Association of International Procedural Law) held its biennial conference, this time hosted by the Law Faculty of the University of Vienna at the Ceremony Hall of the Austrian Supreme Court of Justice (Oberster Gerichtshof).

After opening and welcoming remarks by the Chairman of the Association, Prof. Burkhard Hess, Luxemburg, the Vice President of the Supreme Court Dr. Elisabeth Lovrek, and Prof. Paul Oberhammer, speaking both as Dean of the Law Faculty of the University of Vienna and chair of the first day, the first session of the conference dealt with international insolvency law:

Prof. Reinhard Bork, Hamburg, compared the European Insolvency Recast Regulation 2015/848 and the 1997 UNCITRAL Model Law on Cross-Border Insolvency Law in respect to key issues such as the scope of application, international jurisdiction and the coordination of main and secondary proceedings. Bork made clear that both instruments, albeit one is binding, one soft law, have far-reaching commonalities on the level of guiding principles (e.g. universality, mutual trust, cooperation, efficiency, transparency, legal certainty etc.) as well as many similar rules whereas in certain other points differences occur, such as e.g. the lack of rules on international jurisdiction and applicable law as well as on groups of companies and data protection in the Model Law. In particular in respect to the rules on the concept of COMI Bork suggested updating the Model Law given a widespread reception of this concept and its interpretation by the European Court of Justice far beyond the territorial reach of the European Insolvency Regulation.

Prof. Christian Koller, Vienna, then focused on communication and protocols between insolvency representatives and courts in group insolvencies. Koller explained the difficulties in regulating these forms of cooperation that mainly depend of course on the good-will of those involved but nevertheless should be and indeed are put under obligation to cooperate. In this context, Koller, inter alia, posed the question if choice of court-agreements or arbitration agreements in protocols are possible but remained skeptical with a view to Article 6 of the Regulation and objective arbitrability. In principle, however, Koller suggested using and, as the case may be, broadening the exercise of party autonomy in cross-border group insolvencies.

In contrast to the harmonizing efforts of the EU and UNCITRAL Prof. Franco Lorandi, St. Gallen, described the Swiss legal system as a rather isolationist “island” in cross-border insolvency matters, yet an island “in motion” since certain steps for reform of Chapter 11 on cross-border insolvency within the Federal Law on Private International Law of 1987 (Bundesgesetz über das Internationale Privatrecht, IPRG) are being currently undertaken (see the Federal Governments Proposal; see the Explanatory Report).

In the following Pál Szirányi, DG Justice and Consumers, Unit A1 – Civil Justice, reported on accompanying implementation steps under e.g. Article 87 (establishment of the interconnection of registers) and Article 88 (establishment and subsequent amendment of standard forms) of the European Insolvency Recast Regulation to be undertaken by the European Commission as well as on the envisaged harmonization of certain aspects of national insolvency laws within the EU (see Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures and amending Directive 2012/30/EU, see also post by Lukas Schmidt on conflictoflaws.net) and finally on the EU’s participation in the UNCITRAL Working Group V on cross-border insolvency. Szirány further explained that it is of interest to the EU to align and coordinate the insolvency exception in the future Hague Judgments Convention with EU legislation, see Article 2 No. 1 lit. e covering “insolvency, composition and analogous matters” of the 2016 Preliminary Draft Convention.

Prof. Christiane Wendehorst, Vienna, reported on the latest works of the European Law Institute, in particular on the ELI Unidroit Project on Transnational Principles of Civil Procedure, but also on the project on “Rescue of Business in Insolvency Law”, that is drawing to its close, potentially by the ELI conference in Vienna on 27 and 28 April 2017 as well as on the project on “The Principled Relationship of Formal and Informal Justice through the Courts and Alternative Dispute Resolution”.

Finally, Dr Thomas Laut, German Federal Ministry of Justice (Bundesministerium der Justiz) reported on current legislative developments in Germany including works in connection with the Brussels IIbis Recast Regulation, human rights litigation in Germany and the Government Proposal for legislative amendments in the area of conflict of laws and international procedural law (Referentenentwurf des Bundesministeriums der Justiz und für Verbraucherschutz, Entwurf eines Gesetzes zur Änderung von Vorschriften im Bereich des Internationalen Privat- und Zivilverfahrensrechts). This Proposal aims at, inter alia, codifying choice of law rules on agency by inserting a new Article 8 into the Introductory Law of the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch, EGBGB) and enhancing judicial cooperation with non-EU states, in particular in respect to service of process.

On the second day, Prof. Hess, Luxemburg, introduced the audience to the second session’s focus on methodology in comparative procedural law and drew attention to the growing demand and relevance – reminding the audience, inter alia, of the influence of the Austrian law of appeal on the civil procedure reforms in Germany – but also to certain unique factors of the comparison of procedural law.

Prof. Stefan Huber, Hannover, took up the ball and presented on current developments of comparative legal research and methodology in general as well as possible particularities of comparing procedural law such as e.g. a strong lex fori-principle, the supplementing character of procedural law supporting the realization of private rights, a typically compact character of a procedural legal system, areas of discretion for the judge and the central role of the state – features which might make necessary a more “contextual” approach and a stronger focus on “legal concepts” as a layer between macro and micro perspectives. Huber also argued for a more substantive approach in regard to the latest efforts of the EU to compare the quality of justice systems of the Member States by its annual Justice Scoreboards since 2013. Indeed, the mere collection of economic and financial figures and other “juridical” data leaves unanswered questions of legal backgrounds and concepts in the various legal orders that might very well explain certain particularities in the data. Yet, it must be welcomed that the EU has started to embark on the delicate and methodically demanding but inevitable task of comparing the justice systems linked together under a principle of mutual trust.

Prof. Fernando Gascón Inchausti, Complutense de Madrid, continued the deep reflections on comparative procedural law with a view to the EU and illustrated the relevance in case law both of the European Court of Justice as well as the European Court of Human Rights and in the EU’s law-making and evaluations of existing instruments, see recently e.g. Max-Planck-Institute Luxemburg, “An evaluation study of national procedural laws and practices in terms of their impact on the free circulation of judgments and on the equivalence and effectiveness of the procedural protection of consumer law, JUST/2014/RCON/PR/CIVI/0082, to be published soon.

Prof. Margaret Woo, Northeastern University Boston, closed the session with a global perspective on comparative procedural law from a US and Chinese perspective and particularly drew attention to portectionist tendencies in the US such as e.g. the recent (not entirely new) “foreign law bans” (for a general report from 2013 see here) to be observed in more and more state legislations that put the application of foreign law under the condition that the foreign law in its entirety, i.e. its “system”, does not conflict in any point of law with US guarantees and state fundamental rights. Obviously, this overly broad type of public policy clause is directed against Sharia laws and the like but goes far beyond in that it compares the entire legal system rather than the result of the point of law relevant to the case at hand. In the EU, Article 10 Rome III Regulation might have introduced a “mini” foreign law ban in case of abstract discrimination: “Where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply”. It remains of course to be seen whether the ECJ interprets this provision in the sense of an ordinary public policy clause requiring a concrete discrimination with effect on the result in the particular case at hand.

In the closing discussion, the audience strongly confirmed the need and benefits of comparative research and studies in particular in times of doubts and counter-tendencies against further cooperation and integration amongst states, their economies and judicial systems. The event ended with warm words of thanks and respect to the organizers and speakers for another splendid conference. If everything goes well, interested readers will be able to study the contributions in the forthcoming conference publication before the international procedural community will meet again in two year’s time – the last conference’s volume has just been published, see Burkhard Hess (ed.), Band 22: Der europäische Gerichtsverbund – Gegenwartsfragen der internationalen Schiedsgerichtsbarkeit – Die internationale Dimension des europäischen Zivilverfahrensrechts, € 68,00, ISBN: 978-3-7694-1172-0, 2017/03, pp. 236.

This post has been written by Nicolò Nisi, Research Assistant at Martin Luther University Halle-Wittenberg

On 10 March 2017, the German Bundestag finally voted the bill to facilitate the handling of domestic group insolvencies (Gesetzes zur Erleichterung der Bewältigung von Konzerninsolvenzen), which was initially presented in early 2013.

It is a much-awaited development, which follows the introduction in the new EU Insolvency Regulation (Regulation (EU) 2015/848) of specific provisions addressing the insolvency of EU groups of companies, i.e., groups where the parent company and the subsidiaries have their centre of main interests in at least two Member States.

Under current German law, each legal entity is subject to its own insolvency proceeding and the decision to open the proceedings is determined separately and independently for each entity (‘one company, one insolvency, one proceeding’). It means that different insolvency courts open separate proceedings for each insolvent group member, with the appointment – in many cases – of several insolvency practitioners. This approach has its benefits in terms of legal certainty, but it overlooks the wider picture of the group. It is, in fact, not suitable for the group restructuring or the sale of the group business as a going concern.

Although the principle that separate proceedings are to be opened in respect of different group members remains unchanged, the new provisions introduce four main innovations to the German Insolvency Code (Insolvenzordnung).

To begin with, they establish the possibility for a group company – not necessarily the (ultimate) parent – to apply for the opening of insolvency proceedings over the other insolvent group entities (so-called procedural consolidation), provided that such concentration of jurisdiction is justified by the common interests of the group’s creditors and the requesting company is not manifestly of minor importance for the group as a whole (§ 3a).

A ‘group venue’ is then established for all the group companies. In the case of more applications, a priority rule applies or, when not possible, the application made by the company with the highest number of employees in the previous financial year prevails. If a request to open insolvency proceeding against a group member is submitted afterward to a different court, the latter may transfer the proceeding to the group court (§ 3d).

Secondly, when insolvency proceedings in respect of various group members are opened in different courts, it is possible to appoint the same person as insolvency practitioner for all group companies concerned, insofar it is in the creditors’ interests and possible conflicts of interest may be covered by the appointment of a special practitioner (§ 56b). This should avoid the occurrence of frictions, inefficiencies and information asymmetries, which could endanger an optimal result.

Thirdly, the insolvency practitioners appointed in the proceedings opened in relation to different members of the same group are obliged to cooperate and share all relevant information, insofar as the interests of the creditors of the respective group company would not be prejudiced (§ 269a). Similar duties are also provided concerning insolvency courts (§ 269b) and creditors’ committees (§ 269c). Under the last provision, however, cooperation shall only take place by request of one of the creditors’ committees and through the appointment of a group creditors’ committee, which should assist the insolvency practitioners and the creditors’ committee within the individual proceedings.

Finally, each group company in whose respect an insolvency proceeding has been requested or already opened – alternatively the (preliminary) creditors’ committee of a group company – may request before the court of the group venue the opening of a ‘coordination proceeding’, which should further facilitate the coordinated liquidation or restructuring of insolvent groups (§ 269d). The coordination court shall then appoint an independent coordinator (§ 269e), who oversees the execution of the proceeding in the interest of creditors, in particular by submitting a coordination plan (§ 269f).

Such plan should describe in detail all the relevant measures to be implemented within the individual insolvency proceedings, including the proposals concerning (i) the restoration of economic performances of the group members; (ii) the settlement of intra-group disputes; and (iii) the contractual arrangements among insolvency practitioners (§ 269h).

It is worth stressing that the group coordination proceeding does not have a binding effect on the individual proceedings, in that the insolvency practitioners may decide not to follow the recommendations of the coordinator, only subject to the duty to explain to the creditors the reasons for doing so (‘comply or explain’) (§ 269i). However, if the creditors are not persuaded and vote in favour of the arrangements contained in the group plan, but the practitioner does not adapt accordingly the insolvency plan at the level of individual proceeding, he may risk to be held liable for damages.

Except for the first point on procedural consolidation, which is positively considered by the prevailing literature in the case of an integrated group as a tool to simplify the going-concern sale of the business or the global group-wide restructuring, the new German rules resemble closely the ones recently adopted in the Recast Insolvency Regulation. The latter, in fact, were proposed by the German delegations within the European Parliament and the Council. Also at the European level, a group coordination proceeding has been introduced in order to facilitate the group restructuring, even though the participation of various practitioners is not binding and rests on a voluntary basis (see Articles 61 et seq.).

This solution has been the object of different evaluations, mostly skeptical. Indeed, it seems that the introduction of a coordination proceeding will not make a significant difference in the practice of group insolvencies. Even overlooking the problems arising from non-compliance with the coordinator’s recommendations, one should pay attention to limiting the costs (including the coordinator’s remuneration under § 269g) and the duration of the proceeding, in order to preserve its efficiency and to ensure its success in the interest of creditors, thus avoiding it may result in additional complexity.

The one sorry outcome of [2017] EWHC 374 (Ch) Microsoft (Nokia) v Sony is that by rejecting jurisdiction, the Commercial Court did not have an opportunity to review the application of Rome II’s provisions on applicable law in the case of infringement of competition law.

The following background is by Kirsty Wright, who also alerted me to the case: the claim centred on allegations by Microsoft (who had acquired Nokia of Finland) that the Defendants had caused loss by engaging in anti-competitive conduct relating to the sale of Li-ion Batteries over a period of 12 years. In 2001 Nokia and the Sony Corporation (the mother corporation: with seat outside of the EU) concluded a Product Purchase Agreement for Li-ion Batteries. This agreement contained an English choice of law clause and required any dispute to be resolved by way of arbitration in the International Chamber of Commerce (ICC). Microsoft became the assignee of these rights following its purchase of parts of Nokia in 2013 and therefore could bring claims in contract against Sony Corporation and claims in tort against the other three Defendants. Sony Corporation is a subsidiary of Sony Europe Limited: it is the anchor defendant in this case: none of the corporations other than Sony Europe are domiciled in the EU.

Smith J in a lengthy judgment determined that the agreement between Microsoft and Sony Corporation to arbitrate in the ICC also extended to the parent company Sony Europe. Therefore proceedings against all defendants were stayed in favour of ICC arbitration subject to English law. This required him first of all to hold that under English law, the arbitration agreement (as opposed to, under EU law, for the issue of choice of court: see CDC) extends to non-contractual obligations (infringement of competition law evidently not being part of one’s contractual rights and obligations; see here for a review of the issues; in Dutch I’m afraid: must find time for an EN version) but also that the clause extended to the mother company: hence releasing the jurisdictional anchor.

Microsoft had anticipated such finding by suggesting such finding may be incompatible with EU law: its contention was that the operation of the Brussels I Regulation (Recast) must permit the effective protection of rights derived from competition law, including private law rights of action for infringement, these being rights accorded by EU law, and that an arbitration clause which caused the fragmentation of such rights of action was, for that reason, in breach of EU law (at 76). It made extensive reference to Jaaskinen AG’s call in CDC for the Brussels I Recast to be aligned with Rome II’s ambition to have one single law apply to the ensuing tort. (The jurisdictional regime as noted leads to a need to sue in various jurisdictions).

As I have noted in my review of the CJEU’s judgment, on this point the Court however disagreed with its AG. Indeed while the AG reviews and argues the issue at length (Smith J recalls it in the same length), the Court summarily sticks to its familiar view on the application of (now) Article 7(2) in competition cases; it is the CJEU’s view which the Commercial Court of course upholds.

A great case, extensively argued.

Geert.

(Handbook of) EU Private International Law, Chapter 2, Heading 2.2.9.1; Heading 2.2.9; Chapter 4, Heading 4.6.2).