Droit international général

X v Y (*grumbles his usual grumble about anonymisation*) ECLI:NL:GHDHA:2023:1759  is an interesting judgment discussing, yet not determining, the extent of Rome I’s Article 18’s ‘burden of proof’ provision. Clearly the discussion has echoes for the similar provision in Article 22 Rome II.

Article 18 Rome I

Burden of proof

1.   The law governing a contractual obligation under this Regulation shall apply to the extent that, in matters of contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   A contract or an act intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 11 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.

Article 22 Rome II

Burden of proof

1.   The law governing a non-contractual obligation under this Regulation shall apply to the extent that, in matters of non-contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

2.   Acts intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in Article 21 under which that act is formally valid, provided that such mode of proof can be administered by the forum.

The court first of all [5.6] justifiably confirms that A24(1) BIa does not stand in the way of its jurisdiction, which parties agreed to in a choice of court clause per A25 BIa: the claim concerns monies allegedly still owed on the transfer of a share of ownership in German real estate. It does not have rights in rem in that property as the object of the proceedings.

Choice of law was made for German law. The A18 Rome I issue is triggered by a declaration made by the claimant in the main proceedings, in front of a German notary. Claimant argues that statement was made to speed up the entry of the sale in the German land register, not to discharge the defendant in the main proceedings of the monies owed. The court [5.9] holds that German law as a result of A18 only determines the burden of proof and evidentiary value of that statement, to the degree German law has specific rules relating to the law of obligations generally or for the specific contract at issue.

On the facts, the court [5.16] holds that it need not determine the lex causae issue for evidentiary value under the Dutch ‘antikiesregel’ ―meaning the court being absolved of the proprio motu obligation to determine applicable law if the alternatives lead to the same result― for under neither laws the notarial statement has discharging effect. I for one am not convinced that the antikiesregel complies with the effet utile of EU private international law, but that is a different matter.

Geert.

Extent of A18 Rome I's burden of proof being subject to lex causae, v procedure being subject to lex fori (here: sale of ownership of German real estate, subject to German law as lex voluntatis)

Den Haag court in appeal, X v Y ECLI:NL:GHDHA:2023:1759 https://t.co/SXDUgdORYB

— Geert Van Calster (@GAVClaw) September 19, 2023

The Working Group charged by the Hague Conference on Private International Law with advancing the Jurisdiction Project met in Buenos Aires from 18 to 22 September 2023. This was the fifth meeting of the Working Group since its establishment, in 2021.

The Jurisdiction Project builds on the conclusion of the 2019 Judgments Convention and explore the possibility of drafting a harmonised set of rules dealing with jurisdiction and parallel proceedings.

In establishing the Group, the Council on General Affairs and Policy of the Conference tasked it to proceed, in an inclusive and holistic manner, with an initial focus on developing binding rules for parallel proceedings and related actions, while acknowledging the primary role of both jurisdictional rules and the doctrine of forum non conveniens, notwithstanding other possible factors, in developing such rules.

No detailed report of the recent Buenos Aires meeting was publicly available at this stage at the time of writing this post. As stated in the news section of the website of the Hague Conference, the Working Group “made further progress on the development of draft provisions on parallel proceedings and related actions or claims”.

The detailed reports of previous meetings, with the draft texts resulting therefrom, can be found here (February 2022) and here (February 2023).

The sixth meeting of the Working Group will take place in January 2024. The Group will then report on the progress of its work to the Council on General Affairs and Policy. The Council is expected to address the topic (and decide about the next steps) at its next meeting, in March 2024.

Those interested in the Project may refer to the scholarly works listed in the useful bibliography prepared by the Permanent Bureau of the Conference.

On 2 August 2023, Gerard Quinn, the UN Special Rapporteur on the rights of persons with disabilities, and Claudia Mahler, the Independent Expert on the enjoyment of all human rights by older persons, issued a joint statement regarding the European Commission’s proposals of 31 May 2023 on the protection of adults in cross-border situations.

As explained in a post on this blog, the latter proposals consist of a proposal for a Council Decision whereby all Member States would become (or remain) parties to the Hague Convention of 2000 on the International Protection of Adults Convention “in the interest of the Union”, and a proposal for a Regulation of the Parliament and the Council that would complement the Hague Convention in the relations between Member States, including by the creation of a European Certificate of Representation which would make it easier for the representatives of an adult to prove their powers in a Member State other than the Member State where those powers were conferred or confirmed.

Scope and Purpose of the Submission

The joint submission examines the above proposals against the background of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). While acknowledging that private international law “has a profoundly important role to play in giving effect to the object and purpose, substance and interpretation of the UNCRPD”, the authors express serious reservations regarding the solutions envisaged by the Commission, and reiterate the idea – voiced in a previous joint statement, of 2021 – whereby the Hague Convention should “be re-purposed” in light of the UNCRPD “to subserve higher and newer goal of protecting human autonomy”.

According to the document, ratification of the Hague Convention and its implementation (including regionally, through the proposed EU measures) “must selfconsciously steer toward higher substantive norms and trends”, notably as regards the preservation of the autonomy of persons with disabilities.

There is “a real risk”, the submission warns, that, “if enacted as proposed”, the Regulation and the Decision

will only be used to freeze into place an outdated policy response to disability and the needs of older persons [and] only attract needless legal liability in the international legal order for the EU and its Member States.

Hence the call to

think through how the Hague Convention might be selfconsciously moulded to underpin and not undermine the UN CRPD and also create breathing space for the drafting and eventual adoption of a universal (UN) treaty on the rights of older persons.

Main Concerns Expressed in the Submission

The authors of the submission note that the Commission did recall the UNCRPD in its proposals, notably in Recitals 10 and 15 of the proposed Regulation, but consider that is largely insufficient. They just “do not see any consistent follow-through from these Recitals in the substantive provisions of the proposed Regulation”, and rather see “many contradictions”.

According to Recital 10, the interpretation of the Regulation “should be guided by its objectives that are to enhance the protection of fundamental rights and freedoms and other rights of adults in cross-border situations, including their right to autonomy, access to justice, right to property, right to be heard, right to free movement and equality”, since the rights enshrined in this regard in both the UNCRPD and the Charter of Fundamental Rights of the European Union “are to be protected both in national and cross-border cases”. Measures taken in relation to persons with disabilities, the Recital goes on, are to be in line with the UNCRPD in order to benefit from recognition under the Regulation.

For its part, Recital 15 of the proposed Regulation observes that, regardless of the terminology used in each Member State, “measures directed to the protection of adults and taken in compliance with the fundamental rights of the adults concerned should circulate without obstacles in the Union”, adding that, to this end, the Regulation “should be interpreted in accordance with the Charter and the UNCRPD”, where assessing whether a measure taken by the authorities of another Member State is not manifestly contrary to public policy (and should accordingly be refused recognition), “the authorities of a Member State where the recognition is sought should assess whether that measure ensures the fundamental rights of the adult, in light of Articles 3, 9 12 and 19 of the UNCRPD”.

All this being regarded as insufficient, the authors of the submission reiterate the view, expressed in the joint statement of 2021, mentioned above, that States, when joining the Hague Convention, should adopt an interpretive declaration whereby they would commit to interpret and apply the Hague Convention in accordance with obligations arising out of or relating to their participation in the UNCRPD and other relevant human rights obligations, “or as a result of participation in future human rights treaties” on the same matter.

The move, the submission explains, “would make clear (not only within the EU but also vis-à-vis third States) that the CRPD is given lexical priority”.

The authors of the joint submission further suggest, for the same purpose, that States joining the Hague Convention should make a reservation to that Convention, aimed at excluding (to the effect that the Convention does allow for it) “institutionalisation” (i.e., measures whereby an adult would be placed or kept in a residential institution against or regardless of their will), from the scope of protective measures that would benefit from the Convention (and the Regulation).

This would play a significant role, they say, in ensuring that institutionalisation “is no longer seen as an appropriate response to the needs of persons with disabilities or older persons”.

According to the submission, the proposed Regulation should even go further than that, and “explicitly” prohibit institutionalisation “as a form of ‘protection’ … as between EU Member States”, as this would be “manifestly at odds” with Articles 5 and 19 of the UNCRPD.

The submission is also concerned with “representation agreements”, a term used in the document to refer to private mandates or “powers of representation”, to use the language of the Convention. The authors argue, first, that the arrangements in question “should be re-framed to only mean ‘supported decision making agreements’”. Arrangements “that only kick into place upon the occurrence of a contingency like ‘incapacity’”, it is added, should be “avoided at all costs”.

Some General Remarks

Gerard Quinn and Claudia Mahler address in their submission a range of delicate and complex issues. These cannot be discussed in detail here. I will limit myself to two rather general remarks.

Do the Hague Convention (and the Proposed EU Regulation) Really Need “Re-purposing”?

The joint submission appears to build on the premise that the rules of private international law (PIL) laid down in the Hague Convention (and in the Proposed Regulation) are designed to serve goals that differ from (and couldin fact be incompatible view) the objects of the UNCRPD. The general orientation, the submission seems to argue, not just their practical operation, should accordingly be reconsidered.

This assumption is, in my view, questionable. In a contribution to the Guide to Global Private International Law edited by Paul Beaumont and Jayne Halliday (Hart Publishing 2022), I argued that the Hague Convention was designed in such a way as to advance precisely the goals that the UNCRPD (which was adopted a few years later) is meant to promote.

The Convention, for example, sets out some rather elaborate rules regarding the allocation of jurisdiction among Contracting States and the mutual communication and cooperation between the authorities of the States concerned. These rules depart significantly from those found in other texts (the Brussels I bis Regulation for instance). This is so because they are inspired by policy considerations that reflect the peculiar concerns that surround the protection of adults, including the preservation and enhancement of their autonomy. In fact, the Convention is not guided by “value-neutral” policies such as legal certainty, nor it purports to ensure that Contracting States “blindly” open their legal systems to measures of protection taken elsewhere, or private mandates governed by foreign law. Rather, the Hague Convention aims to ensure that the fundamental rights of the adults concerned may be properly realised in cross-border situations; the same can be said, generally speaking, of the proposed EU Regulation.

The question, then, in my view, is not so much whether the purpose of the Convention or the proposed Regulation should be “corrected”. The issue is rather whether the technical solutions in the Convention and in the Regulation are such that they effectively and efficiently ensure the realisation of the UNCRPD in all circumstances.

Thus, the matter is not one of orientation, but one of legal engineering. I believe the Convention and the proposed Regulation already go in the same direction as the UNCRPD. One might wonder whether the interpretation of the Convention and the wording of the proposed Regulation can be improved in a way that is more conducive to the objectives of the UNCRPD being fully met.

Should References to the UNCRPD be Featured More Prominently in PIL Rules in this Area?

The joint submission seems to underlie a concern for the visibility of the UNCRPD. This is entirely understandable. The UNCRPD brought about a real paradigm shift in disability law. Tremendous efforts are needed at the national, regional and international law to make sure that the rights enshrined in the UNCRPD turn into policy and normative changes that can actually improve the life of those concerned. In this sense, recalling the achievements of the UNCRPD and the challenges posed by its implementation is no doubt helpful.

That said, various elements indicate that PIL scholars and practitioners are already generally aware, notably in Europe, of the need to take human rights seriously in their day-by-day work.

For instance, more than twenty years have passed since the European Court of Human Rights ruled, in Pellegrini, that foreign judgments simply cannot be recognised if they were given in breach of the fundamental rights of the parties. And while it’s true that EU legislation has made the (intra-EU) movement of judgments easier, but – as the Court of Justice itself consistently repeated (starting from Debaecker) – this goal cannot be attained by undermining in any way the fundamental rights of those concerned. The two-decade long experience with EU texts dealing with the cross-border protection of children further attest that it is perfectly possible to embody human rights considerations in PIL instruments. Additionally, as the Court made clear in Krombach, the public policy defence – if no other tools are available – can always be triggered to avoid that fundamental rights are infringed through a “mechanical” application of PIL rules.

The question, accordingly, is not whether practitioners should be directed at taking the UNCRPD into account (they obviously should, and this should occur in respect of any rule, in the field of PIL or elsewhere). The issue is, again, technical rather than political in nature. It is uncontroversial that PIL rules must be crafted and applied in a manner that is entirely consistent with the UNCRPD: the question is, rather, whether this entails that safeguards other than those arising from the Convention and the Regulation must be adopted.

The joint submission suggests that States should issue a declarative interpretation when ratifying the Hague Convention that the latter must be read and applied in light of the UNCRPD, and even make a reservation regarding institutionalisation.

I’m not entirely certain this would be strictly necessary (the Vienna Convention on the Law of Treaties already provides various tools aimed to guarantee the kind of inter-textual coordination advocated by the submission), and sense that a similar initiative may have some unintended adverse effects.

I consider, however, that such a move would hardly be sufficient in itself. It is the task of those applying PIL rules (and, of course, the task of the Union’s legislature, for its part) to ensure, creatively as the case may be, the proper articulation of PIL rules and human rights instruments relating to the protection (including the self-determination) of adults. It’s a complex and certainly unfinished task, but one that should reasonably be approached with optimism.

The joint submission of Gerard Quinn and Claudia Mahler is a powerful reminder that the topic requires further discussion, and that efforts aimed at ensure mutual understanding between experts in different fields (human rights law and PIL, in this case) remain crucially necessary.

In C-632/21 JF and NS v Diamond Resorts Europe Limited (Sucursal en España) (‘Diamond Resorts Europe) the CJEU has held that Article 6(2) Rome I on consumer contracts is exhaustive, preventing a consumer to shop for more favourable laws different from those of their habitual residence.

Applicants are British consumers resident in the UK who concluded, on 14 April 2008 and 28 June 2010 respectively, two timeshare contracts with Diamond Resorts Europe, an English company operating as a branch in Spain of the Diamond Resorts group. The accommodation subject to the timeshare is spread across the EU with focus on Spain. Applicants request invalidity of the contracts on the basis of the Spanish timeshare laws, which implement the relevant EU law at issue. They seize a Spanish court, claiming the proceedings have as their object a right in rem in immovable property (the jurisdictional echo of C-73/04 Klein v Rhodos Management already should have made them think otherwise imho). Defendants argue the claim concerns a right in personam which in consequence of Rome Convention’s and /or the Rome I Regulation’s provisions on consumer contracts, are subject to the laws of the habitual residence of the consumers, i.e. English law.

The CJEU first of all holds (para 55) that as a consequence of Articles 66(a) and 126 of the UK-EU Withdrawal Agreement, the Rome Regulation applies to one of the contracts only, the other one being subject to the Rome Convention. It also confirms (para 52) that despite the contracts having been concluded between UK parties, the contract is clearly ‘international’ given the presence of foreign elements.

Next, it confirms without much ado (para 70 ff) the contracts as consumer contracts, notes lex voluntatis as being English law, and in consequence of the consumer title, that lex voluntatis being the same lex contractus as would have applied in the absence of choice.

Importantly, with reference mutatis mutandis to CJEU Schlecker, and a clear hint as to the future reply in VK v N1,

“An interpretation whereby it would be possible to derogate from the conflict-of-law rules laid down by the Rome I Regulation for determining the law applicable to consumer contracts, on the ground that another law would be more favourable to the consumer, would necessarily seriously undermine the general requirement of predictability of the applicable law and, therefore, the principle of legal certainty in contractual relationships involving consumers” (para 75)

A further question on Article 9 overriding mandatory provisions is declared inadmissible for lack of any detail on the nature of the national laws, given by the referring court.

Geert.

New #CJEU judgment applicable law Rome I, re timeshare agreements and consumer law
C-632/21 Diamond Resorts Europehttps://t.co/IBmyg43pzM

— Geert Van Calster (@GAVClaw) September 14, 2023

This post was written by Nadia Rusinova (Hague University of Applied Sciences).

On 12 September 2023 a draft law to amend and supplement other statutes regarding the proceedings in civil cases under the application of the law of the European Union was submitted for consideration to the Bulgarian Parliament.

The adoption of legislative changes in the Civil Procedure Code, Child Protection Act and Private International Law Code is explained in the proposal as necessitated by the need to ensure the smooth and proper functioning of the common European area of justice while respecting the different legal systems and traditions of the Member States. The draft law is currently under discussion.

Civil Procedure Code

The draft law refers to the special rules regarding civil proceedings under the application of EU law. It provides conditions for implementing the provisions of three instruments: the Taking of Evidence Regulation, the Service Regulation and the Brussels II ter Regulation.

The amendments regarding the Taking of Evidence Regulation concern: the participation of representatives of the requesting court in evidence collection by the requested court, and the rights of the parties, their representatives, and experts to participate in evidence collection in another Member State as permitted by Bulgarian law (Article 615 of the Civil Procedure Code); possibility for direct collection of evidence in another Member State by the court, a delegated member of the court, or an expert appointed by the court (Article 614); implementation of Article 3(1) of the Regulation specifying that requests for evidence collection in Bulgaria are directed to the district court within whose jurisdiction the collection will occur (Article 617); and designation of the district court in Bulgaria, within whose jurisdiction the direct evidence collection will take place, as competent to authorize and provide practical assistance for evidence collection under Article 19 of the Regulation (Article 617).

The amendments relating to the Service Regulation are as follows: the indication of bailiffs as ‘transmitting authorities’ under Article 3(1) of the Regulation, in addition to district courts (Article 611 of the Code); a new rule for service in the event of an unsuccessful attempt to serve the specified address – the receiving authority makes an official check on the recipient’s address and, if necessary, forwards the request to the district court in whose district the service must be carried out (Article 611, para. 3); the indication of competent authorities under Article 7(1)(a) of the Regulation – the district court for whose district the address data is provided is competent. When no address information is provided, the Sofia District Court is competent (Article 612).

The amendments in respect of the Brussels II ter Regulation include the introduction of domestic procedures for issuing, correcting, and revoking certificates required by the Regulation (Articles 620a and 620b). A new Article 622c is envisaged, governing the direct enforcement of decisions from another member state in Bulgaria. It adheres to regulation principles, including the right to defense for the party against whom enforcement is sought, the ability to request refusal, and the right of the plaintiff to swift enforcement with the use of coercive measures, without harming the child. Provisions are made for suspention of the enforcement if it endangers the child, as well as measures in cases of long-term risk.

Child Protection Act

Changes stemming from the Brussels II ter Regulation affect as well the Child Protection Act regarding legal proceedings before Bulgarian courts concerning child return. They include hearing the child’s opinion based on age and maturity, evidence collection, decision deadlines, and issuing certificates for decision implementation. New rules cover measures for the child’s contact with the left behind parent, child protection during and after legal proceedings, ensuring the child’s safety upon return. The participation of a prosecutor in proceedings for child return under the 1980 Hague Convention is eliminated, aligning Bulgarian procedures with those of European countries. Prosecutors’ involvement is only maintained when the prosecutor initiates the return request, whereas in cases initiated by a parent through the Ministry of Justice, the Ministry represents the applicant, and the case is considered civil.

Private International Law Code

The proposed amendments to the Private International Law Code include a rule whereby international jurisdiction should be verified ex officio by the seised court, with the court ruling at an earlier stage on its own jurisdiction, including when the choice of court is made in the course of the proceedings. This would enable the court to take a stance on jurisdiction at the time of drawing up the preliminary report and notify the parties thereof.

Such early indication on the grounds of international jurisdiction and the applicable law, as well as the reflection of the choice of court and applicable law in the minutes of the hearing, create clarity and legal certainty and provide the parties with an opportunity to conduct the process in view of the applicable legal framework. The choice of court affects the issue of parallel proceedings in other Member States so it must be documented at the time of its execution.

Article II(3) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) provides:

The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

What is the meaning of a “matter” in this provision? This is the question that the UK Supreme Court addressed in its judgment of 20 September 2023 in Republic of Mozambique v Privinvest Shipbuilding SAL (Holding) [2023] UKSC 32.

Facts

In 2013 and 2014, three special purpose vehicles wholly owned by the Republic of Mozambique entered into supply contracts with three of the respondents in this case for the development of Mozambique’s exclusive economic zone. The contracts are governed by Swiss law and contain broad arbitration clauses. The arbitration clauses in two contracts cover “all disputes arising in connection with” the contracts and the arbitration clause in the third contract covers “any dispute, controversy or claim arising out of, or in relation to” to the contract.

The SPVs borrowed money from various banks and Mozambique granted sovereign guarantees for the borrowing. The guarantees are governed by English law and provide for dispute resolution in English courts.

Mozambique accuses the three respondent companies and some other persons of bribing its officials and exposing it to a potential liability under the guarantees. It brought a claim for damages against the respondents in England in 2019.

The Respondents argue that Mozambique is bound by the arbitration clauses and seek a stay of proceedings under section 9 of the Arbitration Act 1996, which implements Article II(3) of the New York Convention into English law.

Was the matter in dispute in the English proceedings a “matter” within the meaning of section 9 of the 1996 Act/Article II(3) of the NYC? This is the preliminary question that the court addressed in its judgment. For the purposes of the preliminary question, it was assumed that Mozambique was bound by the arbitration clauses.

Judgment

Lord Hodge gave the judgment, with which Lord Lloyd-Jones, Lord Hamblen, Lord Leggatt and Lord Richards agreed.

The UKSC provided an interpretation of the concept of a “matter” in this context that is based on five principles. In doing so, it considered other countries’ (HK, Singapore, Australia, and Cayman Islands) jurisprudence on this issue.

First, in applying section 9 of the 1996 Act, the court adopts a two-stage process: first, the court must identify the matter or matters which the parties have raised or foreseeably will raise in the court proceedings, and, secondly, the court must determine in relation to each such matter whether it falls within the scope of the arbitration agreement. The court must ascertain the substance of the dispute(s) between the parties, without being overly respectful to the formulations in the claimant’s pleadings, and have regard to the defences raised or reasonably foreseeable.

Secondly, the “matter” need not encompass the whole of the dispute between the parties. Partial stays of court proceedings are possible.

Thirdly, a “matter” is a substantial issue that is legally relevant to a claim or a defence which is susceptible to determination by an arbitrator as a discrete dispute, rather than an issue which is peripheral or tangential to the subject matter of the proceedings. If the “matter” is not an essential element of the claim or of a relevant defence to that claim, it is not a “matter” in respect of which the legal proceedings are brought.

Fourthly, the process entails a matter of judgment and the application of common sense rather than a mechanical exercise.

Fifthly, when turning to the second stage of the analysis, the court must have regard to the context in which the “matter” arises in the legal proceedings.

The substance of the dispute in the English proceedings was whether the contracts and the guarantees were obtained through bribery, and whether the respondents had knowledge of this at the relevant times. The court found that it was not necessary to examine the validity of the contracts and that a defence that the contracts were valid and on commercial terms would not be relevant to the question of the respondents’ liability. This defence would only be relevant in relation to the quantification of the loss suffered by Mozambique. As the validity and commerciality of the contracts were not essential to any relevant defence, the court held that they were not “matters” within the meaning of section 9 of the 1996 Act in relation to the question of the respondents’ liability. The court further found that there was no case law in which section 9 had been invoked to obtain a stay only in relation to a dispute about the quantification of a claim.

The court also dealt with the issue of scope of the arbitration clauses. It held that there was no question of the arbitration clauses extending to cover Mozambique’s allegations on which it relied to establish the respondents’ liability. With respect to the dispute over the partial defence to the quantification of Mozambique’s claim, rational businesspeople would not seek to send such a subordinate factual issue to arbitration. In other words, this partial defence fell outside the scope of the arbitration clauses and the court did not have to decide whether it was a “matter” within the meaning of section 9 of the 1996 Act.

Importance of the Judgment

English law adopts a pro-arbitration approach. But the judgment in Mozambique v Privinvest Shipbuilding SAL (Holding) shows that there are limits to this approach.

The judgment is also important because it offers an authoritative interpretation of the concept of a “matter” within the meaning of Article II(3) NYC. This is one of the ways in which English law (see also the recent proposed changes to the 1996 Act) makes an important contribution to the comparative law of international commercial arbitration.

In a recent article, Pedro de Miguel Asensio points to a seeming contradiction at the heart of EU consumer law (see La Ley – Unión Europea, issue 116/2023, soon available here). This contradiction concerns the notion of consumer in the rules of substantive consumer law and in EU Private International Law (PIL). The CJEU has constructed in both areas differently.

The Notion ‘Consumer’ in Substantive EU Law

For substantive consumer law, the Court adopts a very wide notion of the consumer, in principle also covering contracts concluded for a dual private and commercial purpose. Consumer protection is excluded only where the commercial purpose predominates the private one (see e.g. in the context of the Unfair Terms Directive CJEU Case C-570/21 I.S. and K.S. v YYY. S.A., para 53).

The Notion ‘Consumer’ in EU PIL

In the context of PIL, in contrast, the CJEU defines ‘consumer’ much more narrowly. Regarding the special provisions of the Brussels I Regulation for the protection of consumers, it has held that they must be interpreted strictly and, in principle, do not apply in case of dual use (see CJEU Case C-464/01 Gruber v Bay Wa, para 39). It would be otherwise only where the link between the contract and the trade or profession of the person concerned was ‘so slight as to be marginal’ (ibid). One must follow Pedro de Miguel when he submits that this narrow interpretation needs to be extended to the Rome I Regulation as another instrument of EU PIL as well (see Recital 7 Rome I).

Divergences Cause Distortions

As a result of these divergences, a contract may be a consumer contract for the purposes of substantive law and a professional or commercial contract for the purposes of PIL. Pedro de Miguel frets that this may give rise to certain ‘distortions’. For instance, in the Lyoness case (commented here), it was questionable whether terms in a cross-border contract were abusive in the sense of the Unfair Terms Directive. Even if this were the case and EU substantive law applied, one could not be sure that the consumer could vindicate the protections of the Directive in a Member State court. After all, the special protective heads of jurisdiction for consumer actions under the Brussels Ibis Regulation are to be interpreted more narrowly than those of the Unfair Terms Directive (see also for the possibility of a waiver of the consumer status under the Brussels Ibis Regulation the comment by Marion Ho-Dac here).

The Impact of Choice-of-Court Clauses

Pedro de Miguel brings the problem to a head with the hypothetical example of a contract with an unfair term that also contains a choice-of-court clause in favour of a non-Member State court, e.g. a Swiss court. In this case, the Member States’ courts would have to decline jurisdiction if the EU resident had pursued more than a marginal professional or commercial purpose with the contract. This evidently undermines the goals of the Unfair Terms Directive, which most certainly would not be given effect by third country courts where their general PIL rules do not lead to a Member State law. Pedro de Miguel denounces this as a hole in the EU consumer protection rules.

Attempting an Explanation

The seeming incoherence between EU substantive and Private International Law may have quite a simple reason. In its substantive law, the EU is free to take consumer protection to an extreme level, covering also contracts that serve up to 49 % a professional or commercial purpose. However, on the international plane, the EU policy clashes with that of other regions or states that follow a much more restricted concept of the consumer. In light of these divergences, it may be advisable to not fully follow the EU consumer protection policy through in order to avoid quarrels with third country courts over jurisdiction or the non-recognition and/or enforcement of Member State judgments.

Comparison with Convention Law

However, the wider notion of the consumer of EU substantive law is seemingly in line with the Hague Choice-of-Court Convention and the Hague Judgments Convention. Both contain special rules for contracts concluded by a consumer (see Art 2(1)(a) Hague Choice-of-Court Convention and Art 5(2) Hague Judgments Convention), and define the consumer as a person acting ‘primarily’ for personal, household or family purposes. This wording of ‘primarily’ seems to be more in line with the extensive definition of the consumer in EU substantive law than with the restrictive of EU PIL.

However, one must also pay attention to the notion ‘for personal, household or family purposes’, which is in fact much more restrictive than both EU notions. The latter apply whenever a contract is concluded outside a trade or profession, never mind whether it is for personal, household or family or for other purposes, e.g. a speculative investment or saving for retirement. One may thus say that the convention strikes a middle ground between the wide and the narrow consumer notion. Without venturing into an analysis of the compatibility of the Brussels Ibis Regulation’s rules with the Hague Conventions, one can say that the latter do not support an extreme version of consumer protection.

Conclusion

The definition of the ‘consumer’ in EU substantive law differs from that in EU PIL. This may mean that EU citizens and residents do not get the full benefit of the Union’s substantive law when they go abroad. But this may be a price worth paying for international harmony and avoiding quarrels with other states.

— Thanks to Paul Eichmüller for reviewing this post.

The international seminar “Vulnerability: a Matter of Perspective(s)”, is scheduled to be held online on Friday, 29 September 2023, starting at 10 a.m. CET on Microsoft Teams.

The seminar is centered around Private International Law (PIL). Specifically, various sessions of the seminar will delve into the diverse and interdisciplinary perspectives of PIL in the context of ‘Vulnerability.’ Many presentations will scrutinize the role of PIL, as well as international conventions and treaties, in relation to vulnerable communities, territories, and individuals. Additionally, the seminar will emphasize the importance of PIL in devising viable solutions. These solutions aim to ensure that present and future generations can remain in their homelands and achieve sustainable human development. This encompasses a broad range of societal aspects, including food, housing, artificial intelligence, and finance.

The teams link to access the seminar is: https://tinyurl.com/25knxwa8

The conference is a collaborative effort between EuriConv (www.euriconv.eu) and Omninext (www.omninext.it).

The seminar’s format comprises three sessions:

English session at 10 a.m. CET
Italian session at 4 p.m. CET
Spanish and Portuguese session at 6 p.m. CET

Each session will be coordinated by Ivan Allegranti, Ph.D. Candidate in Civil Law at the University of Camerino, while the coordination of the entire seminar is curated by Allegranti himself together with Jorge Gracia Ibáñez and Míriam Villamil Balestro. The panels will feature insights from distinguished academics and researchers across Italy, Germany, Spain, Argentina, India, Portugal, and Brazil.

Introductory Context of the Seminar: The concept of ‘Vulnerability’ has recently gained paramount importance across various disciplines – from philosophy, politics, and law to the socio-economic domain. Today, this term encompasses broader themes like environmental conservation, formulation of policies at various levels, and an array of nuanced meanings when linked with individual experiences. It provokes profound deliberations on human interactions, societal unity, and sustainable advancement. As researchers, understanding and articulating this multifaceted notion becomes essential.

The scientific committee includes: Patricia Branco, Lucia Briamonte, Piermichele La Sala, Mariana N. Sánchez, Gerald G. Sander, and Antonio Sàrcina.

The technical secretariat of the event is composed by: Grazia Sàrcina and Ilaria Tonti.

Subsequent to the seminar, the proceedings will be published in a collective work which will be released in the weeks following the event.

Furthermore, this seminar will set the stage for EuriConv’s upcoming initiative on Disaster Risk Management and the Right to Remain in Your Own Homeland, laying the groundwork for a series of future scientific initiatives.

For general information or inquiries about the seminar please contact EuriConv at: connect@euriconv.eu.

The Permanent Bureau is pleased to announce that a colloquium on Central Bank Digital Currencies (CBDCs), titled “CODIFI Edition 2023 – CBDCs”, will be held online on Thursday 5 October 2023, following the mandate of the Council on General Affairs and Policy (CGAP) at its 2023 meeting (C&D No 17).

CODIFI Edition 2023 – CBDCs will cover selected topics related to the HCCH’s CBDCs Project, established by CGAP in March 2023 with the mandate to study the private international law implications of CBDCs. The colloquium will feature a series of pre-recorded video discussions, led by subject-matter experts of the CBDCs Project and other specialists of academia, government, and industry. Live discussion sessions will also take place on the same day to summarise the proceedings and provide more insights and some ideas on the way forward.

The colloquium will be streamed on the HCCH LinkedIn page from 9.30 a.m. (CEST) on Thursday 5 October 2023. The opening session, starting at 9.30 a.m. (CEST), will be followed by the release of the pre-recorded video discussions. In addition to being streamed on the HCCH LinkedIn page throughout the morning, the pre-recorded video discussions will also be available for on-demand viewing on the HCCH website and the HCCH YouTube channel. The live panel and the live interview will be streamed on the HCCH LinkedIn page from 12.30 p.m. and 2.30 p.m. (CEST), respectively.

To register for updates on the colloquium, please indicate your interest here.

For more information, please consult the HCCH’s website and the colloquium’s draft agenda.

 

Description

This important book systematically analyses the private international law issues regarding private antitrust damages claims which arise out of transnational competition law infringements. It identifies those problems that need to be considered by injured parties, defendants, judges and policy-makers when dealing with cross-border private antitrust damages claims in a global context. It considers the post-Brexit landscape and the implications in cross border private proceedings before the English courts and suggests how the legal landscape should be developed. It also sets out how private international law techniques could play an increasingly important role in private antitrust enforcement.

Comprehensive and rigorous, this is required reading for scholars of both competition litigation and private international law.

Reposted from Thought Leaders 4 Fire

Commercial Disputes and anti-suit relief in Anglophone Africa – a panel discussion
06 Oct 2023

Location: 12:00-1:00 pm UK Time Virtual Event (Zoom)
Members: FREE to attend – Book by 06 Oct
Non Members: Register above as a member and attend for FREE – Book by 06 Oct

Highlights

The anti-suit injunction or interdict is a powerful tool in the court’s weaponry when dealing with both domestic and cross-border commercial disputes. Courts in Anglophone Africa, and especially those in Nigeria and the Republic of South Africa, have recently given guidance to litigants on the requirements which have to be satisfied in order to obtain anti-suit relief.

In this panel discussion, chaired by Andrew Moran KC, the various speakers will discuss the jurisprudence of the Nigerian and South African courts, with a view to identifying what litigants and those who advise them will need to keep in mind when applying for anti-suit relief.

Andrew Moran KC and Anthony Kennedy are the authors of Commercial Litigation in Anglophone Africa (2nd Ed Juta), an authoritative work which details the broad framework of the private international law rules in operation in each of the sixteen Anglophone jurisdictions considered; Botswana, Gambia, Ghana, Eswatini, Kenya, Lesotho, Liberia, Malawi, Namibia, Nigeria, Sierra Leone, South Africa,  Tanzania, Uganda, Zambia and Zimbabwe.

The second edition, published in March 2023, provides a refined explanation of the law to be applied as it relates to, (i) civil jurisdiction over commercial disputes involving a foreign element; (ii) the enforcement of foreign judgments; and (iii) the availability and nature of the interim remedies in each of the sixteen jurisdictions addressed.

The authors also provide coverage of the potential availability of an anti-suit injunction (in common law jurisdictions) or anti-suit interdict (in Roman-Dutch law jurisdictions). The second edition details the further entrenchment of the principle of forum non conveniens into the civil law of jurisdiction in the Republic of South Africa.  The text is available to order from Juta and Amazon.

 

Written by Ugljesa Grusic, Associate Professor at University College London, Faculty of Laws

 

Jacco Bomhoff (LSE), Ugljesa Grusic and Manuel Penades (KCL) are pleased to announce that the LSE Law School will host a symposium to celebrate the scholarly work of emeritus professor Trevor C Hartley.

Trevor has long been one of the world’s most distinguished scholars of Conflict of Laws (Private International Law), continuing a tradition started at the LSE by Professor Otto Kahn-Freund. For many decades, he has been at the forefront of developments in the field. As a prominent critic, notably of the Court of Justice’s efforts to unify European private international law. But also as an active participant in projects of legislation and modernization. And as author of authoritative treatises and clear and accessible student textbooks.

His publications include the Hartley & Dogauchi Explanatory Report on the 2005 Hague Convention on Choice of Court Agreements, Hague lectures on ‘Mandatory Rules in International Contracts: the Common Law Approach’ and ‘The Modern Approach to Private International Law – International Litigation and Transactions from a Common-Law Perspective’, student textbook on International Commercial Litigation (CUP, now in its third edition from 2020), and monographs on Civil Jurisdiction and Judgments in Europe (OUP, now in its second edition from 2023) and Choice-of-Court Agreements under the European and International Instruments (OUP, 2013).

This Symposium will bring together colleagues and friends, from the UK and abroad, to celebrate and discuss Trevor’s many contributions. It is organised around some of the main themes of Trevor’s private international law scholarship.

The first panel will focus on global and comparative private international law. Paul Beaumont, Alex Mills, Veronica Ruiz Abou-Nigm, and Koji Takahashi (chair Roxana Banu) will discuss the 2019 and 2005 Hague Conventions, common law and civil law traditions in private international law, and the role of private international law in protecting global commons.

The second panel will examine contemporary English conflict of laws, through the lens of Trevor’s famous ICLQ article on the systematic dismantling of the common law of conflict of laws. Eva Lein, Andrew Dickinson, Jonathan Harris, and Adrian Briggs (chair Pippa Rogerson) will discuss the ‘Italian torpedo’, anti-suit injunctions, forum non conveniens, and the residual influence (if any) of the Brussels I Regulation in English law.

The third panel will focus on dispute resolution. Alexander Layton, Richard Fentiman, Jan Kleinheisterkamp, and Linda Silberman (chair Yvonne Baatz) will explore the reflexive effect of EU private international law and dispute resolution clauses, the interplay between EU (private international) law and arbitration, and the comparison between the 2005 Hague Convention and the New York Convention.

In addition, Lawrence Collins, Hans van Loon, Damian Chalmers, and Carol Harlow will give keynote speeches, reflecting on Trevor’s influence on private international law, the work of the Hague Conference, EU law, and LSE.

This is an in-person event. It is open to all, subject to capacity, but registration is required. Please follow this link for more information about the event, including programme and registration.

Jacco Bomhoff (LSE), Ugljesa Grusic and Manuel Penades (KCL) are pleased to announce that the LSE Law School will host a symposium to celebrate the scholarly work of emeritus professor Trevor C Hartley.

Trevor has long been one of the world’s most distinguished scholars of Conflict of Laws (Private International Law), continuing a tradition started at the LSE by Professor Otto Kahn-Freund. For many decades, he has been at the forefront of developments in the field. As a prominent critic, notably of the Court of Justice’s efforts to unify European private international law. But also as an active participant in projects of legislation and modernization. And as author of authoritative treatises and clear and accessible student textbooks.

His publications include the Hartley & Dogauchi Explanatory Report on the 2005 Hague Convention on Choice of Court Agreements, Hague lectures on ‘Mandatory Rules in International Contracts: the Common Law Approach’ and ‘The Modern Approach to Private International Law – International Litigation and Transactions from a Common-Law Perspective’, student textbook on International Commercial Litigation (CUP, now in its third edition from 2020), and monographs on Civil Jurisdiction and Judgments in Europe (OUP, now in its second edition from 2023) and Choice-of-Court Agreements under the European and International Instruments (OUP, 2013).

This Symposium will bring together colleagues and friends, from the UK and abroad, to celebrate and discuss Trevor’s many contributions. It is organised around some of the main themes of Trevor’s private international law scholarship.

The first panel will focus on global and comparative private international law. Paul Beaumont, Alex Mills, Veronica Ruiz Abou-Nigm, and Koji Takahashi (chair Roxana Banu) will discuss the 2019 and 2005 Hague Conventions, common law and civil law traditions in private international law, and the role of private international law in protecting global commons.

The second panel will examine contemporary English conflict of laws, through the lens of Trevor’s famous ICLQ article on the systematic dismantling of the common law of conflict of laws. Eva Lein, Andrew Dickinson, Jonathan Harris, and Adrian Briggs (chair Pippa Rogerson) will discuss the ‘Italian torpedo’, anti-suit injunctions, forum non conveniens, and the residual influence (if any) of the Brussels I Regulation in English law.

The third panel will focus on dispute resolution. Alexander Layton, Richard Fentiman, Jan Kleinheisterkamp, and Linda Silberman (chair Yvonne Baatz) will explore the reflexive effect of EU private international law and dispute resolution clauses, the interplay between EU (private international) law and arbitration, and the comparison between the 2005 Hague Convention and the New York Convention.

In addition, Lawrence Collins, Hans van Loon, Damian Chalmers, and Carol Harlow will give keynote speeches, reflecting on Trevor’s influence on private international law, the work of the Hague Conference, EU law, and LSE.

This is an in-person event. It is open to all, subject to capacity, but registration is required. Please follow this link for more information about the event, including programme and registration.

Jacco Bomhoff (LSE), Manuel Penades (KCL), and I are pleased to announce that the LSE Law School will host a symposium to celebrate the scholarly work of emeritus professor Trevor C. Hartley.

Trevor has long been one of the world’s most distinguished scholars of Conflict of Laws (Private International Law), continuing a tradition started at the LSE by Professor Otto Kahn-Freund. For many decades, he has been at the forefront of developments in the field. As a prominent critic, notably of the Court of Justice’s efforts to unify European private international law. But also as an active participant in projects of legislation and modernization. And as author of authoritative treatises and clear and accessible student textbooks.

His publications include the Hartley & Dogauchi Explanatory Report on the 2005 Hague Convention on Choice of Court Agreements, Hague lectures on ‘Mandatory Rules in International Contracts: the Common Law Approach’ and ‘The Modern Approach to Private International Law – International Litigation and Transactions from a Common-Law Perspective’, student textbook on International Commercial Litigation (CUP, now in its third edition from 2020), and monographs on Civil Jurisdiction and Judgments in Europe (OUP, now in its second edition from 2023) and Choice-of-Court Agreements under the European and International Instruments (OUP, 2013).

This Symposium will bring together colleagues and friends, from the UK and abroad, to celebrate and discuss Trevor’s many contributions. It is organised around some of the main themes of Trevor’s private international law scholarship.

The first panel will focus on global and comparative private international law. Paul Beaumont, Alex Mills, Veronica Ruiz Abou-Nigm, and Koji Takahashi (chair Roxana Banu) will discuss the 2019 and 2005 Hague Conventions, common law and civil law traditions in private international law, and the role of private international law in protecting global commons.

The second panel will examine contemporary English conflict of laws, through the lens of Trevor’s famous ICLQ article on the systematic dismantling of the common law of conflict of laws. Eva Lein, Andrew Dickinson, Jonathan Harris, and Adrian Briggs (chair Pippa Rogerson) will discuss the ‘Italian torpedo’, anti-suit injunctions, forum non conveniens, and the residual influence (if any) of the Brussels I Regulation in English law.

The third panel will focus on dispute resolution. Alexander Layton, Richard Fentiman, Jan Kleinheisterkamp, and Linda Silberman (chair Yvonne Baatz) will explore the reflexive effect of EU private international law and dispute resolution clauses, the interplay between EU (private international) law and arbitration, and the comparison between the 2005 Hague Convention and the New York Convention.

In addition, Lawrence Collins, Hans van Loon, Damian Chalmers, and Carol Harlow will give keynote speeches, reflecting on Trevor’s influence on private international law, the work of the Hague Conference, EU law, and LSE.

This event is open to all, subject to capacity, but registration is required. Please follow this link for more information about the event, including programme and registration.

Written by NIE Yuxin, Wuhan University Institute of International Law

 

1. Background

China’s Civil Procedure Law was enacted in April 1991 by the Fourth Session of the Seventh National People’s Congress. Since then, it had undergone four revisions in 2007, 2012, 2017, and 2021. However, no substantial revisions were made to the provisions concerning foreign-related civil litigation. The latest amendments to the Civil Procedure Law in 2023, referred to as the new CPL, involve 26 amendments, including 14 modified articles and 15 new additions. Notably, 19 changes deal with the special provisions on cross-border procedures.

2. Jurisdiction

2.1 Jurisdiction grounds
Special jurisdiction: The new CPL expands the scope of jurisdiction by introducing additional connecting factors and fall-back provisions. The new law widens the category of disputes previously covered from “contractual disputes or other property rights disputes” to “litigation other than disputes involving personal relationships” (Art. 276, para. 1). Compared to the previous CPL, this expansion encompasses non-property rights disputes involving personal relationships, such as foreign-related marriage, adoption, maintenance, and guardianship disputes, thereby addressing the previous omission of non-property rights disputes. Further, the new CPL introduces “the place of torts committed within the territory of China” as a new connecting factor for jurisdiction. Additionally, a new fall-back provision of “other appropriate connections” is included, granting Chinese courts greater flexibility over foreign-related cases. Article 276 stipulates that the Chinese court may have jurisdiction if the dispute is of other appropriate connections with China (Art. 276, para. 2).

It is worth noting that the “other appropriate connections” provision has a certain degree of openness. What constitutes an appropriate connection is ambiguous. Previously, the Supreme People’s Court established judicial guidance on this issue regarding standard-essential patents cases. For instance, in Godo Kaisha IP Bridge 1 v. Huawei, the Supreme People’s Court found an appropriate connection between the city of Dongguan and the dispute, citing evidence that Huawei Terminal Co., Ltd. – being primarily responsible for manufacturing and selling Huawei’s smart terminal products – was domiciled there. Dongguan would also be a key location for implementing the essential patents at issue following any agreement between the parties. On this basis, the Supreme People’s Court deemed Dongguan to have an appropriate connection to the case. By incorporating the principle of appropriate connection into the new CPL, its application scope expands beyond intellectual property cases to other foreign-related cases. However, determining the standards for appropriate connection in practice will undoubtedly pose a significant challenge going forward.
To some extent, this provision allows Chinese courts the flexibility to exercise jurisdiction in appropriate circumstances, providing a channel for Chinese enterprises and citizens to seek remedies from domestic courts when their interests are harmed abroad. In practice, courts should take caution when assessing jurisdiction based on the appropriate connection. From a systematic perspective, the appropriate connection should bear some resemblance to the jurisdictional connecting factors listed in this article, such as the place of contract, place of performance, location of the subject matter of the litigation, location of attachable assets, place of the tort, and the domicile of the defendant’s representative. In addition, China could consider deriving insights from the indirect jurisdiction grounds established in the Hague Judgement Convention 2019. These grounds represent a consensus and are accepted by the majority of countries. If China were to refer to the Convention’s standards when considering appropriate connection, it would gain greater predictability and reciprocity. This could facilitate the recognition and enforcement of Chinese judgments abroad, especially among Convention contracting states.

Choice of court agreement: Prior to this amendment, except for disputes related to foreign maritime matters, choice of court agreements designating Chinese court were subject to the prerequisite that the case has a practical connection with China. While China established two international commercial courts to specially hear international commercial cases, the cases they can accept are still limited by the requirement of actual connection under the legal framework of previous CPL. This overly conservative jurisdiction regime hampered the international commercial courts from taking jurisdiction over offshore cases without connection to China.
The newly introduced Article 277 of the CPL breaks this constraint. It allows the parties to choose Chinese courts by writing even if Chinese courts do not have any connection with the dispute. This legislative change provides a clear legal basis for Chinese courts to exercise jurisdiction over offshore cases, expands both the types of cases they can accept and their geographical reach. Moving forward, this change will benefit Chinese courts by enabling them to actively exercise jurisdiction and provide judicial support for the Belt and Road Initiative, positioning China as a preferred location for international litigation. Ultimately, it will enhance the international competitiveness and influence of Chinese judiciary.
However, the amendment does not specify whether parties can choose foreign courts without any connections with the dispute. To align with international common practice and promote reciprocity, it is recommended to clearly state that parties have the freedom to choose any courts, Chinese or foreign, to hear cross-border disputes even if the courts lack practical connections with the dispute.
The amendment does not address some matters that remain unclear in Chinese law. For example, which law applies to determine the substantive validity of jurisdiction agreements? In practice, courts may apply either the law of the forum or the law governing the main contract to this matter, leading to uncertainty.

Responding jurisdiction: Article 278 of the new CPL introduces the rule of responding jurisdiction. It stipulates that if a party does not raise an objection to the jurisdiction and participates in the proceedings by submitting a defence or filing a counterclaim, the Chinese court shall be deemed to have jurisdiction (Art. 278). Further, in contrast to the previous draft amendment, the new CPL expands the scope of jurisdiction by appearance from the defendant to all parties involved.

Exclusive jurisdiction: Under the previous CPL, exclusive jurisdiction covered l disputes related to immovable property, port operations, succession, and contracts involving Sino-foreign joint ventures, Sino-foreign cooperative business enterprises, and Sino-foreign cooperative exploration and development of natural resources. The new CPL adds two additional categories of cases under exclusive jurisdiction: disputes arising from the establishment, dissolution, liquidation of legal persons or other organizations established within China’s territory, and disputes related to the validity of intellectual property rights granted through examination within China’s territory (Art. 279). These amendments are consistent with international common practice.

2.2 Conflict of jurisdiction, Lis pendens and Forum Non Conveniens
Parallel proceedings: The new CPL formally adopts the rule for parallel proceedings. First of all, the law accepts parallel proceedings. Article 280 explicitly provides that: “For the same dispute arises between the parties involved, if one party initiates a lawsuit in a foreign court and the other party initiates a lawsuit in a Chinese court, or if one party files lawsuits in both a foreign court and a Chinese court, the Chinese court may accept the case if it has jurisdiction according to this law.” However, if the parties have entered into an exclusive jurisdiction agreement selecting a foreign court, provided it does not violate the provisions of the CPL regarding exclusive jurisdiction and does not involve China’s sovereignty, security, or public interests, the Chinese court may decide not to accept the case; if the case has already been accepted, the court shall dismiss the lawsuit (Art. 280). This amendment reflects the respect for the parties’ autonomy in cases where it does not violate the principle of exclusive jurisdiction and demonstrates China’s active implementation of international judicial cooperation through legislation.

First-in-time rule: Article 281 of the new CPL adopts the first-in-time rule to address jurisdictional conflicts arising from international parallel litigation. After a Chinese court accepts a case under Article 280, Article 281 then permits the Chinese court to suspend its proceedings if a party applies in writing on the grounds that proceedings involving the same parties and subject matter have already commenced earlier before a foreign court. However, if the first-seized court fails to exercise jurisdiction, the Chinese court may resume the proceedings to protect the parties’ legitimate right to litigation. According to this provision, the parties have significant discretion in requesting the suspension or resumption of litigation.
The first-in-time rule includes two exceptions: (1) when the parties agree to the jurisdiction of the Chinese courts, or the dispute falls under the exclusive jurisdiction of the Chinese courts, and (2) when it is clearly more convenient for the case to be heard by the Chinese courts. The issue here is that it is not clear whether the choice of Chinese courts by the parties includes non-exclusive selection. In addition, the determination of whether the Chinese courts are clearly more convenient requires the court to exercise discretionary judgment, which introduces uncertainty.

Forum Non Conveniens: The 2023 amendments formally accept forum non conveniens and relaxed the conditions for its application in compared to previous judicial interpretation. In order to apply forum non conveniens the defendant must raise an objection to jurisdiction, and the court will not assess forum non conveniens by its own motion. Article 282 listed five factors for the court to exercise discretion: (1) The underlying facts of the dispute did not occur within China’s territory, and it is significantly inconvenient for the Chinese court to hear the case and for the parties to participate in the proceedings; (2) There is no agreement between the parties to submit to the jurisdiction of the Chinese court; (3) The case does not fall under the exclusive jurisdiction of the Chinese court; (4) The case does not involve China’s sovereignty, security, or public interests; (5) It is more convenient for a foreign court to hear the case. The standard to apply forum non conveniens is thus more relaxed than China’s previous practice. The difference between the CPL 2023 and the Judicial Interpretation of CPL 2022 can be found in this table.

 

Article 530 of the Judicial Interpretation of CPL 2022 Article 282(1) of the CPL 2023 When a foreign-related civil case meets the following conditions simultaneously, the Chinese court may render a ruling to dismiss the plaintiff’s lawsuit and inform them to file a lawsuit with a more convenient foreign court: For foreign-related civil case accepted by the Chinese court, where the defendant raises an objection to jurisdiction, and simultaneously meets the following conditions, the court may render a ruling to dismiss the lawsuit and inform the plaintiff to file a lawsuit with a more convenient foreign court: (1) The underlying facts of the dispute did not occur within China’s territory, and it is significantly inconvenient for the Chinese court to hear the case and for the parties to participate in the proceedings; (“added”) (1) The defendant requests that a more convenient foreign court has jurisdiction over the case or raises an objection to jurisdiction; “deleted” (2) There is no agreement between the parties to submit to the jurisdiction of the Chinese court; (2) There is no agreement between the parties to submit to the jurisdiction of the Chinese court; (3) The case does not fall under the exclusive jurisdiction of the Chinese court; (3) The case does not fall under the exclusive jurisdiction of the Chinese court; (4) The case does not involve the interests of China, its citizens, legal persons or other organizations; (4) The case does not involve China’s sovereignty, security, or public interests; (5) The main facts in dispute did not occur within China’s territory and Chinese law does not apply to the case, creating significant difficulties for the Chinese court in ascertaining facts and applying the law; “deleted” (6) The foreign court has jurisdiction over the case and it is more convenient for it to hear the case. (5) It is more convenient for a foreign court to hear the case.

 

In practice, Chinese courts often refuse to apply the doctrine of forum non conveniens due to the criterion that the case does not involve the interests of China, its citizens, legal persons, or other organizations. Courts often assess whether a case involves Chinese interests or parties based on nationality or habitual residence. The removal of this criterion reduces the obstacles to the judicial application of the forum non conveniens doctrine.
Finally, to better safeguard parties’ interests, Art. 282 (2) provides: if the foreign court refuses jurisdiction after the plaintiff’s claim is dismissed, or fails to take necessary actions or render judgement within a reasonable period, and the plaintiff sues again in China, the Chinese court shall accept it. It aims to protect the claimant’s effective access to justice.

 

3. Judicial assistance

Service of process abroad: Compared to domestic service of process, the process of serving documents in cross-border cases involves more complex procedures, longer duration and lower efficiency. This significantly affects the progress of cross-border judicial procedures. The new CPL enriches the means of cross-border service of process. While retaining the existing methods of service through treaties, diplomatic channels, and embassy channels, the CPL 2023 improves other methods of services and add additional modes of services. See the table below.

Article 274 of the CPL 2022 Article 283 of the CPL 2023 A court may serve process on a party which has no domicile within China’s territory in the following manners: A court may serve process on a party which has no domicile within China’s territory in the following manners: (1) in accordance with the provisions of an international treaty concluded or acceded to by the home country of the party to be served and China; (1) in accordance with the provisions of an international treaty concluded or acceded to by the home country of the party to be served and China; (2) through diplomatic channels; (2) through diplomatic channels; (3) by entrusting the service to Chinese embassy or consulate in the country where the party is domiciled, if the party is a Chinese national; (3) by entrusting the service to Chinese embassy or consulate in the country where the party is domiciled, if the party is a Chinese national; (4) by entrusting the service to the litigation agent authorized by the party to be served to receive service of process; (4) by entrusting the service to the litigation agent appointed by the party in this case; (5) by delivering the document to the representative office or a branch office or business agent authorized to receive service of process established by the party to be served within China’s territory; (5) by delivering the documents to the solely funded enterprise, representative office, branch office or authorized business agent established by the party to be served within China’s territory; (6) where the party is a foreigner or stateless person who acts as the legal representative or main person in charge of a legal person or any other organization established within China’s territory, and is a co-defendant with such legal person or other organization, by delivering the documents to such legal person or other organization; (“added”) (7) where the legal representative or main person in charge of a foreign legal person or any other organization is within China’s territory, by delivering the documents to such legal representative or main person in charge; (“added”) (6) by mail, if the law of the country where the party is domiciled permits service of process by mail and a receipt showing the date of delivery has not been returned within three months after the date of mailing, provided that other circumstances sufficiently show the document has been served; (8) by mail, if the law of the country where the party is domiciled permits service of process by mail and a receipt showing the date of delivery has not been returned within three months after the date of mailing, provided that other circumstances sufficiently show the document has been served; (7) by fax, email or any other means capable of confirming receipt by the party to be served; (9) by electronic means capable of confirming the receipt of the documents by the recipient, unless prohibited by the law of the country where the party is domiciled; (10) by any other means agreed by the party, unless prohibited by the law of the country where the party is domiciled. (“added”) (8) by public announcement if none of the above means is feasible, in which case the document shall be deemed to have been served after six months from the date of the public announcement. If none of the above means is feasible, public announcement shall be made, and the documents shall be deemed to have been served after 60 days from the date of announcement.

Obtaining evidence abroad: Article 284 of the new CPL introduces provisions for obtaining evidence from abroad. In addition to the traditional methods of obtaining evidence through treaties or bilateral agreements with the country where the evidence is located, as well as through diplomatic channels, the new provision authorises other means to take evidence abroad, including entrusting Chinese embassy or consulate in the country where the party or witness is located to obtain evidence, obtaining evidence through real-time communication tools with the consent of both parties, and by other means agreed upon by both parties.

 

4. Recognition and enforcement of foreign judgments and arbitral awards

Requirement for the recognition and enforcement of foreign judgments: Articles 297 and 298 of the new CPL retain the principle of reciprocity as a prerequisite of recognition and enforcement of foreign judgement. They state that foreign judgments should be recognized and enforced in accordance with international treaties that China has concluded or based on the principle of reciprocity. However, the reciprocity principle raises the following issues.
Firstly, the term “reciprocity” is ambiguous, and China’s judicial practice of using the de facto reciprocity has made it difficult for many foreign court judgments to be recognized and enforced in Chinese courts. Secondly, although the “presumed reciprocity” standard has been suggested in the “Opinions of the Supreme People’s Court on Providing Judicial Services and Safeguards for the Belt and Road Initiative” and the “Nanning Declaration” adopted at the Second China-ASEAN Chief Justices’ Roundtable, these documents are not binding and this new standard has limited impact on judicial practice. Further, even if presumed reciprocity is adopted, there may still be arbitrary situations. For example, a foreign court may refuse to recognize a Chinese judgment because that the domestic judgment has already become res judicata, but this does not mean that the foreign court will not recognize the Chinese judgment. Nevertheless, the existence of negative precedence may be enough to deny presumed reciprocity.
Notably, Article 49 of the Minutes of the National Symposium on the Foreign-related Commercial and Maritime Trials 2021 establishes a reporting and notification mechanism for recognizing and enforcing foreign court judgments. It requires that in cases where the court needs to examine the application of the reciprocity principle, it should submit the proposed decision to the higher court in its jurisdiction for review. If the higher court agrees with the proposed handling, it should submit its review opinion to the Supreme People’s Court for verification. Only after receiving a response from the Supreme People’s Court can a ruling be made. In March 2022, the Shanghai Maritime Court, after seeking instructions from the Supreme People’s Court, applied the standard of de jure reciprocity to determine the existence of reciprocity between China and the United Kingdom in the recognition and enforcement of civil and commercial judgments in the case of SPAR Shipping Co., Ltd. v. Dalian Xin Hua Logistics Holdings (Group) Co., Ltd. (2018) Hu 72 Xie Wai Ren 1. This was the first precedent case of reciprocity recognition by Chinese courts. Subsequently, on December 19, 2022, the High Court of England and Wales issued a summary judgment in the case of Hangzhou J Asset Management Co Ltd & Anor v Kei [2022] EWHC 3265 (Comm), recognizing and enforcing two Chinese judgments. This was the first time that Chinese court judgments were recognized and enforced in the UK. It opens up new possibilities for mutual recognition and enforcement of civil and commercial judgments between China and the UK.

Grounds for refusing to recognize and enforce foreign court judgments: Article 300 of the new CPL stipulates five grounds for refusing to recognize and enforce foreign court judgments. These include: (1) When the foreign court lacks jurisdiction over the case pursuant to Article 301 of the CPL; (2) When the defendant has not been properly served or, even if properly served, has not had a reasonable opportunity to present its case, or when a party lacking litigation capacity has not been adequately represented; (3) When the judgment or ruling was obtained through fraudulent means; (4) When a Chinese court has already rendered a judgment or ruling on the same dispute, or has recognized a judgment or ruling on the same dispute rendered by a court of a third country; (5) When it violates the basic principles of Chinese laws or undermines China’s national sovereignty, security, or public interests. The prerequisite for recognizing and enforcing foreign court judgments is that the court rendering the judgment must have jurisdiction over the case.
Article 301 clarifies the three circumstances for determining foreign courts’ lack of jurisdiction over a case, namely: (1) the foreign court has no jurisdiction over the case according to its laws, or has jurisdiction according to its laws but lacks an appropriate connection to the dispute; (2) violation of the provisions of the CPL on exclusive jurisdiction; (3) violation of the parties’ exclusive choice of court agreement. Among them, the “appropriate connection” requirement in the first provision also echoes the rules for determining special jurisdiction over foreign-related cases under Article 276. Determining appropriate connection will likely be a focus in future foreign civil and commercial litigation disputes.
Article 302 further elucidates the fourth ground for refusing to recognize and enforce judgments. This ground mainly applies to parallel proceedings. According to this provision, the court should review the previously rendered effective foreign court judgment and suspend domestic proceedings. If the foreign judgment meets the requirements for recognition and enforcement, it should be recognized and enforced, and the domestic proceedings should be dismissed. If it does not meet the requirements for recognition and enforcement, the domestic proceedings should resume. This provision aligns with Article 7(1)(5) and (6) of the HCCH Judgment Convention 2019, which China signed and joined on 2019, but has not yet ratified.

Recognition and enforcement of foreign arbitral awards: A significant change pertaining to arbitration decisions in the new law is that it clearly establishes the “place of arbitration” as the standard for determining the nationality of an arbitration decision. See the table below.

Article 287(2) of the CPL 2022 Article 297(2) of the CPL 2023 Where a party applies for enforcement of an effective arbitration award of an international arbitral institution of China, if the party against whom enforcement is sought or the property thereof is not within China’s territory, the applicant shall apply directly to the foreign court having jurisdiction for recognition and enforcement. Where a party applies for enforcement of an effective arbitration award which is made within China’s territory, if the party against whom enforcement is requested or its property is not within China’s territory, the applicant may apply directly to the foreign court having jurisdiction for recognition and enforcement. Article 290 of the CPL 2022 Article 304 of the CPL 2023 Where an arbitration award of a foreign arbitral institution requires recognition and enforcement by a Chinese court, a party shall apply directly to China’s intermediate court at the place of domicile of the party against whom enforcement is sought or at the place where the property thereof is located, and the Chinese court shall process the application in accordance with an international treaty concluded or acceded to by China or under the principle of reciprocity. Where a legally effective arbitral award which is made outside China’s territory requires recognition and enforcement by a Chinese court, a party may apply directly to China’s intermediate court at the place of domicile of the party against whom enforcement is sought or at the place where the property thereof is located. If the domicile of the party against whom the application is made or its property is not within China’s territory, the party may apply to the intermediate court of the place where the applicant is domiciled or that has appropriate connection with the dispute adjudicated in the award. (“added”) The Chinese court shall process the application in accordance with an international treaty concluded or acceded to by China or under the principle of reciprocity.

 

Chinese judicial practice on the nationality of arbitral awards has shifted from the “the location of the arbitral institution” standard to the “place of arbitration” standard. Several landmark cases reflect this change. The new CPL further cements the seat of arbitration standard, aligning with international practices. When parties apply to Chinese courts for recognition and enforcement of arbitration rulings made by foreign arbitration institutions within China, it facilitates their recognition and enforcement. This change not only encourages foreign arbitration institutions to conduct arbitration within China, but is also better enables Chinese courts to exercise judicial supervision.

 

5. Foreign immunity

In this revision of the CPL, a specific provision is added to clarify that in civil litigation involving foreign states, the relevant laws on immunity of foreign states in China shall apply; if no provisions are specified, the CPL shall apply (Art. 305). It is worth noting that the Law on Immunity of Foreign States was promulgated on September 1, 2023, and will be implemented from January 1, 2024. The Law on Immunity of Foreign States primarily stipulates the conditions under which a foreign state can become a defendant in a legal proceeding in China, hence providing a legal basis for when a foreign state cannot claim immunity from the jurisdiction of Chinese courts. On the other hand, the CPL provides the general procedural framework for all civil cases, and determines jurisdictional rules. This includes when and which court in China has the power to hear a case. So, essentially, the CPL determines which specific court has jurisdiction over the case, while the Law on Immunity of Foreign States regulates the separate substantive issue of whether the foreign state defendant is immune from such jurisdiction.

 

6. Conclusion

The 2023 amendments to the CPL have brought about significant improvements to the special provisions governing procedures for foreign-related civil litigation. The new amendment not only takes into account China’s domestic situations but also keeps up with the latest international legislative developments in the field, drawing on the latest achievements in international legislation. Some provisions have learnt from the latest international framework, such as the HCCH Choice of Court Convention 2005 and HCCH Judgment Convention 2019.
Of course, some new challenges emerge. First, how to define the concept of appropriate connection as a new jurisdiction ground. Second, the asymmetric approach that allows the parties to choose unrelated Chinese courts but requires the chosen foreign court to have practical connection is controversial. Thirdly, the principle of reciprocity as a prerequisite remains a barrier to enforce foreign judgments in China. When the refusal grounds are adopted, which are enough to protect Chinese interests, the requirement of reciprocity becomes unnecessary and redundant. Nonetheless, more clarification will be introduced in practice which hopefully will address some of the above problems.

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 5 October 2023 at 2:30 pm (Mexico City time), 10:30 pm (Europe, CEST time) to launch the book entitled:

International Child Abduction: jurisprudential, doctrinal and critical study of the 1980 Child Abduction Convention. Key concepts and solutions to application problems (Madrid: Dykinson, 2023) 604 pp.

For more information about the book, see our previous post here.

The book will be presented by the author and the following AMEDIP members: Professors Jorge Alberto Silva Silva and Nuria González Martín, as well as the family law attorney María Virginia Aguilar.

The webinar will be held in Spanish and the details are:

Link: https://us02web.zoom.us/j/89498755044?pwd=NmFjQjAxZ2pSTW9tNVlqTC81NnM1dz09

Meeting ID: 894 9875 5044

Password: AMEDIP

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

Written by Dr. Delphine Porcheron, Associate Professor at the University of Strasbourg Law Faculty

On October 19 and 20, the University of Strasbourg is organizing a symposium on Reparation for “Crimes of the Past”.

Mass crimes, deportations, spoliations, colonial exploitation, slavery… The “crimes of the past” are first known to us as historical facts. Their protagonists have mostly disappeared; they have been documented by historians; almost all of them are mentioned in school textbooks. They have become part of our collective memory as disastrous episodes of a bygone past.

And yet, decades later, claims for reparation are initiated. Individuals and groups who have been materially, socially or psychologically affected by these events are turning to justice. They expect not just symbolic recognition, but genuine reparation for their losses, compensation for their suffering, and restoration of their social status.

But are State courts capable of responding appropriately to these claims? Are the law and litigation practice capable of delivering justice? What other institutional mechanisms can be implemented to this end?

These are the questions that the speakers at this symposium will attempt to answer, combining legal, historical and philosophical approaches by looking successively at “Jurisdictional avenues of reparation” and “Alternative avenues of reparation”.

The list of speakers and chairpersons includes: Magali Bessone, Jean-Sébastien Borghetti, Nicolas Chifflot, Marc Del Grande, Peggy Ducoulombier, Gabriel Eckert, Michel Erpelding, Etienne Farnoux, Samuel Fulli-Lemaire, Antoine Garapon, Bénédicte Girard, Patrick Kinsch, Marc Mignot, Horatia Muir-Watt, Etienne Muller, Dorothée Perrouin-Verbe,, Delphine Porcheron, Thibault de Ravel d’Esclapon, Mathieu Soula, Jeanne-Marie Tufféry-Andrieu, Patrick Wachsmann

For registration and more information, see here.

In a judgment of 28 June 2023, the French Supreme Court for Private and Criminal Matters (Cour de cassation) ruled that foreign states may rely on their immunity from suit in exequatur proceedings.

As a result, the court confirmed that French courts could dismiss proceedings to declare enforceable a US judgment which had retained jurisdiction over and ruled against Iran on the ground that Iran benefited from an immunity from suit in France.

Background

In Flatow v. the Islamic Republic of Iran et alii (999 F. Supp. 1 (D.D.C. 1999), see also this report of the NY Times), the US District Court for the District of Columbia ordered the Republic of Iran and other Iranian defendants to pay various members of the family of Alisa Flatow over USD 40 Million in compensatory damages and over USD 225 Million in punitive damages.

Alisa Michelle Flatow was a twenty-year-old Brandeis University student. For the 1995 spring semester, she arranged for and participated in an independent foreign study program in Israel.

While in Israel, she communicated with her father (picture), to ask whether she could travel to a community on the Mediterranean Sea with friends. He reviewed their itinerary with her, and as he believed that the Israeli government would not provide civilian passenger bus service unless it were safe to do so and he gave her permission to travel in Gaza.  On April 9, 1995, she took the number 36 Egged bus, which was traveling from Ashkelon, Israel to a Mediterranean resort in the Gush Katif community. At or about 12:05 p.m. local time, near Kfar Darom in the Gaza Strip, a suicide bomber drove a van loaded with explosives into the number 36 Egged bus, causing an explosion that destroyed the bus. Alisa Flatow died at an Israeli hospital the next day.

The Israeli government informed the father of Alisa Flatow that the Shaqaqi faction of Palestine Islamic Jihad had claimed responsibility for the bombing, and that their investigation had confirmed that claim.

In July 1996, the US Department of State’s Coordinator for Counterterrorism informed the father that the Department of State was satisfied that the group which had claimed responsibility for the bombing had in fact perpetrated the bombing, and that the Islamic Republic of Iran provided approximately two million dollars to Palestine Islamic Jihad annually in support of its terrorist activities.

Exception to Immunity from Suit under US Law

In the Antiterrorism and Effective Death Penalty Act of 1996, the US Congress lifted the immunity of foreign states for a certain category of sovereign acts which are repugnant to the United States and the international community. That Act created an exception to the immunity of those foreign states officially designated by the Department of State as terrorist states if the foreign state commits a terrorist act, or provides material support and resources to an individual or entity which commits such an act, which results in the death or personal injury of a United States citizen.

Of note is the fact that an amendment was adopted in 1996 to clarify that punitive damages were available in actions brought under the state sponsored terrorism exception to immunity. This provision of law is commonly referred to as the “Flatow Amendment.” It was applied retroactively by the US court in that case.

The US Court thus ruled that Iran did not benefit from an immunity from suit in this case.

Immunity from Suit in Exequatur Proceedings?

When the Flatows sought to declare the US judgment enforceable in France (it is unclear whether they had limited the scope of their claim to compensatory damages), the issue arose as to whether the issue of the immunity from suit could be raised by Iran in the French proceedings.

The Cour de cassation holds that the issue of immunity from suit is a procedural issue which must be addressed before ruling on whether the foreign judgment meets the requirements for being granted exequatur and thus declared enforceable. The court further rules that the findings of the US Court on the immunity of Iran under US law are irrelevant for that purpose.

The characterisation of the issue as procedural allows, in the particular context of exequatur, to avoid the critique that this might amount to reviewing the foreign judgment on the merits.

The most interesting contribution of the judgment is that Iran could invoke its immunity from suit in exequatur proceedings. The court does not explain why, but there are likely two rationales for it.

The first is that the court has ruled several times that States may not raise their immunity from enforcement to dismiss exequatur proceedings. The reason is, it seems, that exequatur is not enforcement per se, insofar as it does not attach any asset or constrain otherwise the (state) debtor. This is abstractly convincing, but, in practice, the essential reason for seeking exequatur is to allow enforcement of the judgment.

The second reason is likely that exequatur proceedings are judicial proceedings. It can seem only logical, then, to apply the immunity from suit in that context. But the subject matter of the suit is not the liability of the debtor. It is the foreign judgment, which has finally ruled on this issue. Should the foreign State be able to raise an immunity from suit in this context? Also, judgments can produce effects irrespective of exequatur and any judicial proceedings. They can be recognised. The result is that state immunity will block certain effects of the judgment only. Is it satisfactory to prevent certain effects, but allow others?

Maybe the initial decision of the Cour de cassation to exclude exequatur from the scope of immunity from enforcement was based on too abstract considerations.

No Exception under French State Immunity Law

Because it finds that Iran may invoke its immunity from suit, the Court then assesses whether the relevant acts were covered by state immunity.

Unsurprisingly, the Court finds that they were.

The Court starts with the case law of the European Court of Human Rights (citing Al-Adsani and J.C. v. Belgium) and rules that there can be no violation of the right to a fair trial and the right to access to court if the limitation is based on customary international law.

The Court then relies on the case law of the International Court of Justice (Germany v. Italy) and the ruling that, in the present state of customary international law, violations of jus cogens have no direct impact on state immunity.

Finally, the Court recalls that, in any case, it has ruled in 2011 that States which are only morally responsible for violations of jus cogens (i.e. sponsors as opposed to direct perpetrators) could not conceivably lose their immunity (one may add that the ECtHR has also ruled so in J.C. v. Belgium).

Iran could thus invoke its immunity from suit in exequatur proceedings. The exequatur proceedings are declared inadmissible.

On 19 and 20 October 2023, the Academic Research Federation “Europe in Change” (University of Strasbourg) is organising a Symposium on Reparation for “Crimes of the Past” (Réparer les “crimes du passé) under the scientific coordination of Bénédicte Girard, Etienne Muller and Delphine Porcheron. The event will be held in French.

A number of presentations will focus on private international law issues, in particular international litigation on public and private liability (e.g., State immunity and private compensation).

Mass crimes, deportations, spoliations, colonial exploitation, slavery… The “crimes of the past” are first known as historical facts. Their protagonists have mostly disappeared; they have been documented by historians; almost all of them are mentioned in school textbooks. They have become part of our collective memory as disastrous episodes of a bygone past.

And yet, decades later, claims for reparation are initiated. Individuals and groups who have been materially, socially or psychologically affected by these events are turning to justice. They expect not just symbolic recognition, but genuine reparation for their losses, compensation for their suffering, and restoration of their social status.

But are State courts capable of responding appropriately to these claims? Are the law and litigation practice capable of delivering justice? What other institutional mechanisms can be implemented to this end?

These are the questions that the speakers at this symposium will attempt to answer, combining legal, historical and philosophical approaches by looking successively at “Jurisdictional avenues of reparation” (Part I) and “Alternative avenues of reparation” (Part II).

The list of speakers and chairpersons includes : Magalie Bessone, Jean-Sébastien Borghetti, Nicolas Chifflot, Marc Del Grande, Peggy Ducoulombier, Gabriel Eckert, Michel Erpelding, Etienne Farnoux, Samuel Fulli-Lemaire, Antoine Garapon, Bénédicte Girard, Patrick Kinsch, Marc Mignot, Horatia Muir-Watt, Etienne Muller, Dorothée Perrouin-Verbe, Delphine Porcheron, Thibault de Ravel d’Esclapon, Mathieu Soula, Jeanne-Marie Tufféry-Andrieu, Patrick Wachsmann.

For registration and more information, see here. The full programme is available here.

The Ineradicable Special Consumer Conflicts Rule

This post is not about Article 6 Rome I, but about Article 6 of the Unfair Terms Directive (UTD). Paragraph 2 of this provision invalidates any choice of law of a non-EU Member State that would result in the consumer losing the protection afforded by the UTD, provided there is a ‘close connection with the territory of the Member States’.

There have been similar conflict-of-laws provisions hidden in secondary EU legislation outside the Rome I Regulation. They have however been increasingly eliminated from EU law, leading Felix Wilke to speak about their ‘silent death’.  Not so Article 6(2) UTD, which has neither died nor been amended since the Directive’s adoption in 1993.

A Question of Substantive Scope

What is the precise scope and operation of this provision? This issue became relevant in a recent decision by the CJEU in the Lyoness case (8 June 2023, Case C-455/21). A Romanian resident had entered over the internet into a membership contract with a Swiss company, providing him with certain benefits such as refunds when shopping with companies associated to the scheme. The contract was not connected to his profession as a mechanical engineer.

In the end, the contract turned out to be not so favourable after all. The Romanian resident therefore brought an action in a court in his home country, seeking a declaration that some of its terms are ‘unfair’ within the meaning of the Romanian law transposing the UTD. The Romanian court referred a request for a preliminary ruling to the CJEU concerning the substantive scope of the Directive, in particular the notion of the ‘consumer’.

Everywhere You Go, Always Take Consumer Protection With You?

Before answering the question referred, the CJEU discusses as a ‘preliminary point’ whether the case falls within the geographical scope of the Directive (paras 37–45). This was not self-evident because the membership contract contained a choice of Swiss law. Yet the CJEU overcomes these doubts by referring to Article 6(2) UTD (and also to Article 6(2) Rome I, which however does not play any role in the rest of the decision) (para 39).

Then, the CJEU derives a most remarkable conclusion from Article 6(2) UTD: where a contractual clause designates the law of a third country as applicable and the consumer has his or her habitual residence in a Member State, the national court must apply the provisions transposing the UTD into the legal order of that Member State (para 45). Taken literally, this would mean that the provision on unfair terms of their country of residence protects EU consumers everywhere. It would cover them like a shield they carry, even when they become ‘active consumers’ and go to a third country to acquire products and services there.

Making Sense of It All

Evidently, this goes too far. The CJEU neglects that Article 6(2) UTD is conditioned on ‘a close connection with the territory of the Member States’. This may be a slip of the hand. Yet this condition is itself problematic because its formulated very vaguely, especially in comparison to the much more precise criteria provided later by the Rome I Regulation.

The rather obvious solution to this problem would be to interpret this connection in line with Article 6 Rome I, especially its para 1 and 4(a). The CJEU and the European Commission, however, think otherwise. They suggest Article 6(2) UTD would grant consumers extra protection because the conditions of its application would be broader than that of Article 6 Rome I or its forerunner, Article 5 of the Rome Convention (see CJEU, Commission v Spain, Case C-70/03, para 33; European Commission, Guidance on the Interpretation and Application of the UTD, para 1.2.5). But just how broad is this protection?

Member States have identified additional cases in which unfair terms control could apply beyond those mentioned in the Rome I Regulation, e.g. where the contract was concluded on their territory (see Article L231-1 French Code de la consommation), or where the contract concerns domestic immovable property (Article 78(4) Italian Codice del consumo; Article 3 Spanish Ley 7/1998, de 13 de abril, sobre condiciones generales de la contratación). Some Member States require a comparison with the law that would be applicable in the absence of a choice of law (§ 13a Austrian Konsumentenschutzgesetz), while still others presume a close connection would exist in the cases mentioned in Article 6 Rome I, yet leave open the application to other cases (see Article 46b German EGBGB).

This situation is messy. EU consumers will not be protected in the same way, but depending on the court in which they sue. This creates divergences in the level of consumer protection, opens up opportunities for forum shopping, and makes the applicable law unforeseeable.

Conclusion

A specific conflict-of-laws rule in the UTD is unnecessary. The main protective purpose of Article 6(2) UTD was achieved by introducing the EU-wide uniform Article 6(2) Rome I. A further protection may even do more harm than good because it makes the international scope of the UTD dependent on Member States’ implementation. The gain in consumer protection is negligible when weighed against the legal uncertainty caused. Article 6(2) UTD has outlived its usefulness and should be abolished. In the meantime, it should be interpreted in line with the criteria laid down for the international application of EU consumer law in Article 6 Rome I to avoid divergences between national laws as far as possible.

One more general remark: mandatory rules on the scope as well as overriding mandatory rules in special EU acts risk undermining the uniformity of conflicts rules and the foreseeability of the applicable law. A further important drawback of such rules is that they only protect EU-residents and not those of third states, which fuels ‘EU unilateralism’ and breaks with the universalism of EU PIL. If the conflict rules are insufficient, the way to go is to amend them and not to add unilateral conflicts provisions hidden in substantive rules.

— Many thanks to Emeric Prévost, Felix Wilke, Verena Wodniansky-Wildenfeld, Felix Krysa and Paul Eichmüller for helpful comments.

The Court of Justice delivered a few days ago (14 September 2023) its judgment in case C‑632/21 (JF, NS v Diamond Resorts Europe Limited (Sucursal en España), Diamond Resorts Spanish Sales SL, Sunterra Tenerife Sales SL), which is about the applicability of Rome I and its Article 6:

“1. The provisions of [Rome I] are applicable, in the context of a dispute before a court of a Member State, to contracts the two parties of which are United Kingdom nationals, to the extent that those contracts have a foreign element.

2. Article 6(2) of Regulation No 593/2008 must be interpreted as meaning that:

–        where a consumer contract fulfils the requirements laid down in Article 6(1) of that regulation, the parties to that contract may, in accordance with Article 3 of that same regulation, choose the law applicable to that contract, provided, however, that that choice does not result in depriving the consumer concerned of the protection afforded to him or her by provisions that cannot be derogated from by agreement by virtue of the law which, in the absence of choice, would have been applicable on the basis of Article 6(1), which provides that such a contract is to be governed by the law of the country where the consumer has his or her habitual residence;

–        in view of the mandatory and exhaustive nature of that same Article 6(2), it is not possible to derogate from that provision for the benefit of legislation allegedly more favourable to the consumer”.

Source: https://curia.europa.eu/juris/document/document.jsf?mode=DOC&pageIndex=0&docid=277406&part=1&doclang=EN&text=&dir=&occ=first&cid=94681