Droit international général

Gilles Cuniberti reviewed the CJEU’s judgment in C‑264/22 FGTI v Victoria Seguros here, and I agree the judgment in convoluted terms replies to a fairly obvious question. Obvious, for with Giles, I would suggest the

‘result of the subrogation is clearly to transfer to the Fund the rights of the victims. Subrogation does not establish new rights. It merely transfers existing rights from one person (the victim) to another (here the Fund).’ (The Fund is the French public body compensating the victims of certain torts, whereupon it is subrogated in the victim’s rights).

The CJEU much more verbosely comes to the same conclusion, without making reference to the potential complication signalled by Giles, with respect to a likely or at the least potential French judgment eg confirming a relevant settlement, which could lead to novatio arguments.

Geert.

#CJEU C‑264/22 FGTI v Victoria Seguros
Rome II
Lex causae (incl for rules on limitation) for action of third party subrogated to rights of injured party, v person who caused the damage is, in principle, that of the country in which that damage occurshttps://t.co/YYFUSlutB9

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

On 31 May 2023, the European Commission presented a proposal for a Regulation on jurisdiction, applicable law, recognition and enforcement of measures and cooperation in matters relating to the protection of adults (in the following: EU Adult Protection Regulation – EUAPR). This proposal is a response to significant demographic and social changes in the EU: Many Member States face enormous challenges posed by an increasingly aging population. Due to considerable improvements in medical care in recent decades, people grow much older than they used to, and this lengthening of the average lifespan in turn leads to an increase in age-related illnesses such as Alzheimer’s disease. This demographic change creates problems for private international law, because the mobility of natural persons has increased within the EU where borders may, in principle, be crossed without restrictions. Many people who have left their state of origin in search for work elsewhere in their youth or middle age do not return to their home state after retirement, but rather spend the last part of their lives where they have established a new habitual residence. Besides, more and more people decide to leave their home state once they have reached the age of retirement. Such processes of migration at a late stage in life may have different reasons: Some old-age movers may want to avoid a heavy taxation of their estates that would put a burden on their heirs, some may wish to circumvent other restrictions of domestic inheritance laws (e.g. the right to a compulsory portion), others may simply wish to spend the remaining parts of their lives in milder climates, e.g. the Mediterranean, or look for a place to stay where the cost of living is lower, e.g. in some parts of Eastern Europe. When these persons begin to suffer from an impairment or an insufficiency of their personal faculties which no longer allows them to protect their interests themselves, however, intricate conflict of laws problems may arise: The authorities or courts of which state shall have jurisdiction to take protective measures concerning vulnerable adults or their property? Which law is to be applied to such measures? Under which conditions may protective measures taken in one state be recognised and enforced in other states?

The EUAPR is meant to solve these problems. It is in many parts based on proposals made by two working groups set up by the European Law Institute and the European Association of Private International Law, respectively. The Regulation will partially supersede and complement the Hague Convention on the International Protection of Adults (in the following: Hague Adult Protection Convention – HAPC), a derogation which is permitted by Art. 49(2) and (3) HAPC. The Hague Convention was concluded on 13 January 2000 and entered into force on 1 January 2009 between France, Germany and the United Kingdom (restricted to Scotland, however). Today, the Convention is in force as well in Switzerland, Finland, Estonia, the Czech Republic, Austria, Monaco, Latvia, Portugal, Cyprus, Belgium, Greece, and Malta. The Netherlands, Ireland, Italy, Luxembourg, and Poland have signed the Convention, but have not ratified it yet. In the Netherlands, however, the Convention is already applied by the courts as a part of Dutch autonomous law (see Hoge Raad 2 February 2018, ECLI:NL:HR:2018:147). Thus, more than 23 years after the HAPC was concluded, the status of ratifications is rather unsatisfactory, as only 12 EU Member States have ratified the Convention so far. In order to speed up this process, the Regulation shall be accompanied by a Council Decision authorising Member States to become or remain parties, in the interest of the EU, to the HAPC.

For a long time, it was controversial whether the EUAPR could be based on the EU’s general competence in PIL matters (Art. 81(2) TFEU) or whether such a measure ought to be classified as concerning family law within the meaning of Art. 81(3) TFEU. On the one hand, adult protection is traditionally codified in the family law sections of many Member States’ civil codes (e.g. in Germany), and people will frequently benefit from the protection of family members (see COM(2023) 280 final, p. 4). On the other hand, a guardian, curator or a person endowed with a power of representation does not necessarily have to be a relative of the vulnerable adult. Following the example set by the EU Succession Regulation, the Commission eschews the cumbersome special procedure envisioned for family law matters and bases its proposal on Art. 81(2) TFEU instead.

As far as the spatial scope of the EUAPR is concerned, Art. 59 EUAPR contains detailed rules on the relation between the Regulation and the HAPC. The basic factor that triggers the application of the EUAPR is the vulnerable adult’s habitual residence in the territory of a Member State (Art. 59(1)(a) EUAPR).  There are some exceptions to this rule, however, in order to ensure a smooth coordination with the Contracting States of the HAPC which are not Member States of the EUAPR (see Art. 59(1)(b) and (2) EUAPR). The substantive scope of the EUAPR is broadly similar to that of the HAPC, although it should be noted that Art. 2(2) EUAPR speaks of “matters” to which the Regulation shall apply, whereas Art. 3 HAPC uses the narrower term “measures”. This may allow the inclusion of ex-lege powers of representation which are not directly covered by the HAPC. The Regulation’s personal scope is defined in Art. 3(1), which states that, for the purposes of the EUAPR, an adult is a person who has reached the age of 18 years. Although the Regulation is largely a response to problems created by an aging population, it must be borne in mind that its scope is not restricted to elderly people, but encompasses all adults above the age of 18, and, if the exceptional condition of Art. 2(2) EUAPR is met, even younger people.

With regard to the rules on jurisdiction, the Regulation largely refers to the HAPC, with one significant divergence, though. The Convention does not permit a direct prorogation of jurisdiction, because it was feared that an uncontrolled freedom of prorogating the authorities of another state could be abused to the detriment of the adult concerned. Art. 8(2)(d) HAPC merely gives the authorities of a Contracting State having jurisdiction under Art. 5 or 6 HAPC the possibility of requesting the authorities of another Contracting State designated by the adult concerned to take protective measures. Contrary to this restrictive approach, Art. 6(1) EUAPR provides that the authorities of a Member State other than the Member State in which the adult is habitually resident shall have jurisdiction where all of the following conditions are met:

• the adult chose the authorities of that Member State, when he or she was still in a position to protect his or her interest;
• the exercise of jurisdiction is in the interest of the adult;
• the authorities of a Member State having jurisdiction under Art. 5 to 8 HAPC have not exercised their jurisdiction.

The following paragraphs 2 to 3 of Art. 6 EUAPR concern formal requirements and the integration of the adult’s choice of court into the HAPC’s jurisdictional framework. The possibility of choosing the competent authorities is a welcome addition to the choice-of-law provision on powers of representation in Art. 15 HAPC.

In order to determine the applicable law, Art. 8 EUAPR refers to Chapter III of the HAPC. As in the HAPC, there are no specific conflicts rules for ex-lege powers of representation. Moreover, advance medical directives that are not combined with a power of representation (Art. 15 HAPC) are neither covered by the HAPC nor the EUAPR. Since the authorities exercising their jurisdiction under the HAPC usually apply their own law pursuant to Art. 13(1) HAPC, the spatial scope of the Convention’s jurisdictional rules also indirectly determines the reach of its conflicts rules. This will lead to a new round of the debate that we are familiar with in the context of the relationship between the Hague Child Protection Convention and the Brussels IIb Regulation, i.e. whether the intended parallelism only works if at least a hypothetical jurisdiction under the respective Convention’s rules can be established, or whether it suffices that jurisdiction is established according to a provision that is only found in the respective Regulation. Within the framework of the EUAPR, this problem will arise with regard to a choice of court pursuant to Art. 6 EUAPR, an option that is not provided for by the HAPC. Applying Art. 13(1) HAPC in this context as well seems to be the preferable solution, which leads to an indirect choice of law by the vulnerable adult even in cases where no voluntary power of representation is established under Art. 15 HAPC.

The recognition of measures taken in other Member States is governed by Art. 9 and 10 EUAPR. Notwithstanding mutual trust – and, in this particular area of law, with good reason – , the Regulation still contains a public policy clause (Art. 10(b) EUAPR). For the purpose of enforcement, Art. 11 EUAPR abolishes the declaration of enforceability (exequatur) that is still required under Art. 25 HAPC, thus allowing for simplified enforcement procedures within the EU.

A major innovation is found in Chapter VII. The Regulation will introduce a European Certificate of Representation (Art. 34 EUAPR) which will supersede the certificate under Art. 38 HAPC. The Certificate shall be issued for use by representatives, who, in another Member State, need to invoke their powers to represent a vulnerable adult (Art. 35(1) EUAPR). The Certificate may be used to demonstrate that the representative is authorised, on the basis of a measure or confirmed power of representation, to represent the adult in various matters defined in Art. 35(2) EUAPR.

Apart from those substantive achievements, the Regulation contains necessary rules on rather procedural and technical subjects, such as the cooperation between the competent authorities (Chapter VI EUAPR), the establishment and interconnection of protection registers (Chapter VIII EUAPR), digital communication (Chapter IX EUAPR), and data protection (Chapter X EUAPR). These rules will also lead to a major modernisation compared with the older rules of the HAPC.

In sum, the proposal of the EUAPR will considerably strengthen the international protection of vulnerable adults within the EU.

A book by Alexander DJ Critchley, titled The Application of Foreign Law in the British and German Courts, has been published by Hart in its Studies in Private International Law Series.

This book explores the application of foreign law in civil proceedings in the British and German courts. It focuses on how domestic procedural law impacts on the application of choice of law rules in domestic courts. It engages with questions involved in the investigation and determination of foreign law as they affect the law of England and Wales, Scotland, and Germany. Although the relevant jurisdictions are the focus, the comparative analysis extends to explore examples from other jurisdictions, including relevant international and European conventions. Ambitious in scope, it expertly tracks the development of the law and looks at possible future reforms.

More information is available here.

The Legal High Committee for Financial Markets of Paris issued a report on the work of the international commercial chambers of Paris courts (Bilan du fonctionnement des chambres internationales du tribunal de commerce et de la cour d’appel de Paris) in March 2023.

The report discusses the competitive environment of the Paris international commercial courts, the resources of the courts, how they can be seized, and their procedural rules.

It concludes with 15 propositions for reform. They include:

• Offering to the parties the power to agree on specialised judges assigned to other chambers (than the international commercial chamber) of the commercial court of Paris,
• Reflecting on the possibility to appoint French and foreign lawyers to supplement the international chambers,
• Introducing the possibility to hear private experts retained by the parties
• Allowing the parties to agree on confidential proceedings in cases which could have gone to arbitration.

“Recognition” and “enforcement” are fundamental concepts when dealing with the international circulation of foreign judgments. Although they are often used interchangeably, it is generally agreed that these two notions have different purposes and, ultimately, different procedures (depending on whether the principle of de plano recognition is accepted or not. See Béligh Elbalti, “Spontaneous Harmonization and the Liberalization of the Recognition and Enforcement of Foreign Judgments, Japanese Yearbook of Private International Law, Vol. 16, 2014, p. 269).

However, in legal systems where this fundamental distinction is not well established, the amalgamation of the two notions may give rise to unnecessary complications that are likely to jeopardize the legitimate rights of the parties. The following case, very recently decided by the Dubai Supreme Court, is nothing but one of many examples which show how misconceptions and confusion regarding the notion of “recognition” would lead to unpredictable results (cf. e.g., Béligh Elbalti, “Perspective of Arab Countries”, in M. Weller et al. (eds.), The 2019 HCCH Judgments Convention – Cornerstones, Prospects, Outlook (Hart, 2023) pp. 1983-184ff).

The case

The parties, in this case, are (1) A British Virgin Islands company (hereinafter ‘X1’) and its judicial liquidator (hereinafter ‘X2’, collectively “Xs”) and (2) four companies having considerable estates in Dubai (hereinafter ‘Y’).

In 2021, Xs brought an action before the Dubai Court of First Instance (hereinafter “DCFI”) seeking a ‘declaration of validity’ of a decision of the British Virgin Islands Supreme Court declaring the dissolution of X1 and appointing X2 as its judicial liquidator (hereinafter “the foreign judgment”). Xs justified their action by stating that they intended to bring legal actions against Y for the recovery of due sums of money that they were entitled to and, eventually, would avoid their actions being dismissed for lack of standing.

The DCFI dismissed the action on the ground that Xs had failed to show that service had been duly effected and that the foreign judgment had become final according to the law of the state of origin (DCFI, Case No. 338/2021 of 27 October 2021). Xs appealed to the Dubai Court of Appeal (hereinafter “DCA”) arguing, inter alia, that legal notification to the X1’s creditors had been duly served through two newspapers and that, therefore, the foreign judgment should be given effect. However, without addressing the issue of the recognizability of the foreign judgment, the DCA dismissed the appeal holding that Xs had failed to prove their case (DCA, Appeal No. 3174/2021 of 27 January 2022).

Instead of appealing to the Supreme Court, Xs returned to the DCFI to try again to have the foreign judgment be given effect. Having learned from their first unsuccessful attempt, Xs this time ensured that they had all the necessary evidence to show that service had been duly effected, that the foreign judgment had been rendered following regular procedure, and that it had become final and no longer subject to appeal. The DCFI, however, dismissed the action considering that its subject matter concerned, in fact, the “enforcement” of the foreign judgment and, therefore, applications for enforcement should be made by filing a petition to the Execution Court and not by initiating an ordinary action before the DCFI (DCFI, Case No. 329/2022 of 14 November 2022).

Xs appealed to the DCA before which they argued that the foreign judgment did not order Y to perform any obligation but simply declared the dissolution of X1 and appointed X2 as judicial liquidator. Xs also argued that the DCFI had erred in characterizing their claim as a request for “enforcement” as they were not seeking to enforce the foreign judgment. Therefore, it would have been inappropriate to pursue their claim following the prescribed procedure for enforcement where the main purpose of their action is to “recognize” the foreign judgment. The DCA dismissed the appeal holding that the Xs’ action lacked legal basis. According to the DCA, Xs’ request for the foreign judgment to be “declared valid” was not within the jurisdiction of the UAE courts, which was limited to “enforcing” foreign judgments and not declaring them “valid”. As for the enforcement procedure, the DCA considered that it was subject to the jurisdiction of the Execution Court in accordance with the procedure prescribed to that effect (DCA, Appeal No. 2684 of 25 January 2023). Dissatisfied with the outcome, Xs appealed to the Supreme Court (hereinafter “DSC”).

Before the DSC, Xs made the same argument as before the DCA, insisting that the purpose of their action was not to “enforce” the foreign judgment but to “recognize” it so that they could rely on it in subsequent actions against Y. The DSC rejected this argument and dismissed the appeal on the basis that the UAE courts’ jurisdiction was limited only to “enforce” foreign judgments in accordance with the prescribed rules of procedure, which were of a public policy nature. The DSC also held that the lower courts were not bound by the legal characterization made by the litigants but should independently give the correct legal characterization to the actions brought before them in accordance with the rules of law in force in the State (DSC, Appeal No. 375 of 23 May 2023).

 

Comments 

The case reported here is particularly interesting. It illustrates the difficulty that Dubai courts (and UAE courts in general) have in dealing with some fundamental concepts of private international law.

Unlike the international conventions ratified by the UAE, which generally distinguish between “recognition” and “enforcement” of foreign judgments”, UAE domestic law refers mainly to “enforcement” but not “recognition”. Moreover, as mentioned in a previous post, the procedure for enforcement has recently undergone an important change, as the former procedure based on bringing an ordinary action before the DCFI has been replaced by a more another procedure consisting of filing a petition for an “order on motion” before the Execution Court (new Art. 222 of the New Federal Civil Procedure Act [FCPA]). However, the current legislation in force says nothing about the “recognition” of foreign judgments.

If one looks at the practice of the courts, one can observe two different tendencies. One tendency, which seems to be prevailing, consists in denying effect (notably res judicata effect) to foreign judgments that were not declared enforceable. In some cases, UAE courts considered that foreign judgments could not be relied upon because there was no proof that they had been declared enforceable (See, e.g., Federal Supreme Court, Appeal No 320/16 of 18 April 1995; Appeal No. 326/28 of 27 June 2006) or that foreign judgments could only have legal authority (hujjia) after being declared enforceable and consistent with public policy (Abu Dhabi Supreme Court, Appeal No. 31/2016 of 7 December 2016).

Another tendency consist in admitting that foreign judgment could be granted effect. Some cases, indeed, suggest that recognition can be incidentally admitted if certain conditions are met. These include, in particular, the following: (1) that the foreign judgment is final and conclusive according to the law of the rendering state, and (2) the foreign judgment was rendered between the same parties on the same subject matter and cause of action (see, e.g., Federal Supreme Court, Appeal No. 208/2015 of 7 October 2015; DSC, Appeal No. 276/2008 of 7 April 2009; Abu Dhabi Supreme Court, Appeal No. 106/2016 of 11 May 2016; Appeal No. 536/2019 of 11 December 2019. In all these cases, recognition was not granted). Only in a few cases have the UAE courts (in particular Dubai courts) exceptionally recognized foreign judgments (DSC, Appeal No. 16/2009 of 14 April 2009; Appeal No. 415/2021 of 30 December 2021 upholding the conclusions of DCFI accepting the res judicata effect of a foreign judgment.)

 

Unlike the cases cited above, the case reported here is one of the rare cases in which the parties sought to recognize a foreign judgment by way of action. The arguments of the Xs, in this case, were particularly convincing. According to Xs, since the foreign judgment did not order the defendants to perform any obligation and since Xs merely sought formal recognition of the foreign judgment, there was no need to have the foreign judgment declared “enforceable” in accordance with the enforcement procedure provided for in Art. 222 FCPA.

However, the decisions of the Dubai courts that UAE courts are only entitled to “enforce” foreign judgments are particularly problematic. First, it demonstrates a serious confusion of basic fundamental notions of private international law. The fact that Xs sought to have the foreign judgment “declared valid” does not mean that Dubai courts were required to consider the foreign judgment’s validity as such but rather to consider whether the foreign judgment could be given effect in the UAE, and this is a matter of “recognition”. Secondly, the courts seem to have forgotten that – as indicated above – they did consider whether a foreign judgment could be given effect in the UAE, albeit incidentally. The fact that such an examination is brought before the court by way of action does not change in anything the nature of the problem in any way. Finally, in the absence of any specific provision on the recognition of foreign judgments, particularly where a party seeks to do so by way of action, there would appear to be nothing to prevent the courts from allowing an interested party to proceed by way of an ordinary action before the court of first instance since the ultimate purpose is not to declare the foreign judgment “enforceable”, as this, indeed, would require compliance with the special procedure set out in Art. 222 FCPA. (For a discussion of the issue from the 2019 HCCH Judgments Conventions, see Béligh Elbalti, “Perspective of Arab Countries”, op.cit., pp. 183, 202, 205).

June 2023 begins at the Court of Justice with the decision in case C-567/21, BNP Parisbas, which will be read on 8 June. The request from the Social Chamber of the Cour de Cassation (France) had been lodged on September 15, 2021. It concerns the interpretation of Regulation 44/2001. The national court referred the following questions:

1. Must Articles 33 and 36 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 1 be interpreted as meaning that, where the legislation of the Member State of origin of the judgment confers on that judgment authority such as to preclude a new action being brought by the same parties for determining the claims that could have been raised in the initial proceedings, the effects which that judgment has in the Member State in which enforcement is sought preclude a court of that latter State, whose legislation, as applicable ratione temporis, provided in employment law for a similar obligation of concentration of claims, from adjudicating on such claims?

2. If the first question is answered in the negative, must Articles 33 and 36 of Council Regulation No 44/2001 be interpreted as meaning that an action such as a claim of unfair dismissal in the United Kingdom has the same cause of action and the same subject matter as an action such as a claim of dismissal without actual and serious cause in French law, so that the employee’s claims for damages for dismissal without actual and serious cause, compensation in lieu of notice, and compensation for dismissal before the French courts are inadmissible after the employee has obtained a decision in the United Kingdom declaring that there has been an unfair dismissal and making a compensatory award in that respect? Is it necessary in that regard to distinguish between, on the one hand, the damages for dismissal without actual and serious cause that might have the same cause of action and the same subject matter as the compensatory award and, on the other, the compensation for dismissal and compensation in lieu of notice which, in French law, are payable where the dismissal is based on an actual and serious cause, but are not payable in the event of dismissal based on serious misconduct?

3. Likewise, must Articles 33 and 36 of Council Regulation No 44/2001 be interpreted as meaning that an action such as a claim of unfair dismissal in the United Kingdom and an action for payment of bonuses or allowances provided for in the contract of employment have the same cause of action and the same subject matter when those actions are based on the same contractual relationship between the parties?

Advocate General P. Pikamäe had delivered his opinion on 16 February 2023. As of today, no official English translation is available. My own one reads:

1. Articles 33 and 36 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters should be interpreted in the sense that the recognition of a court decision rendered in a Member State, the law of which provides for a rule of concentration of claims prohibiting the same parties from initiating a new action relating to claims which could have been made at the initial instance, does not preclude the court of that second State ruling on such claims, even in circumstances where the law of the Member State in which recognition is invoked provides for a similar obligation of concentration of claims.

2. Articles 33 and 36 of Regulation 44/2001 should be interpreted as meaning that, in the event that the recognition of a decision given in a first Member State is invoked incidentally before a court of a second Member State, claims based on the same employment contract relating to some of the obligations arising from the execution of this contract, and claims based on the obligations arising from the breach of this contract have the same cause but do not have the same object.

A comment by Fabienne Jault-Seseke appeared on this blog.

The case was allocated to the Third Chamber, presided by K. Jürimäe; N. Jääskinen was reporting judge.

On 22 June, Advocate General J. Richard de la Tour will publish his opinion on case C-497/22, Roompot Service. The request comes from the Landgericht Düsseldorf (Germany), and was lodged on 22 July 2022. In a nutshell, the question relates to the relevant criteria to be taken into consideration in order to classify a contract relating to the transfer of short-term use of a bungalow in a holiday park as a lease contract within the meaning of Article 24(1), first sentence, of Regulation 1215/2012, or as a contract relating to the provision of services.

Must the first sentence of Article 24(1) of Regulation (EU) No 1215/2012 be interpreted as meaning that a contract which is concluded between a private individual and a commercial lessor of holiday homes in relation to the short-term letting of a bungalow in a holiday park operated by the lessor, and which provides for cleaning at the end of the stay and the provision of bed linen as further services in addition to the mere letting of the bungalow, is subject to the exclusive jurisdiction of the State in which the rented property is situated, irrespective of whether the holiday bungalow is owned by the lessor or by a third party?

The Fourth Chamber will decide, with C. Lycourgos presiding and O. Spineau-Matei reporting.

On the same day, a hearing is taking place on case C-339/22, BSH Hausgeräte. The request for a preliminary ruling has been sent by the Svea hovrätt, Patent- och marknadsöverdomstolen (Sweden), and lodged on May 24th, 2022. It comprises three questions on Regulation 1215/2012:

1. Is Article 24(4) of Regulation (EU) 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters to be interpreted as meaning that the expression ‘proceedings concerned with the registration or validity of patents … irrespective of whether the issue is raised by way of an action or as a defence’ implies that a national court, which, pursuant to Article 4(1) of that regulation, has declared that it has jurisdiction to hear a patent infringement dispute, no longer has jurisdiction to consider the issue of infringement if a defence is raised that alleges that the patent at issue is invalid, or is the provision to be interpreted as meaning that the national court only lacks jurisdiction to hear the defence of invalidity?

2. Is the answer to Question 1 affected by whether national law contains provisions, similar to those laid down in the second subparagraph of Paragraph 61 of the Patentlagen (Patents Law; ‘the Patentlagen’), which means that, for a defence of invalidity raised in an infringement case to be heard, the defendant must bring a separate action for a declaration of invalidity?

3. Is Article 24(4) of the Brussels I Regulation to be interpreted as being applicable to a court of a third country, that is to say, in the present case, as also conferring exclusive jurisdiction on a court in Turkey in respect of the part of the European patent which has been validated there?

In the case at hand, the parties to the main proceedings litigate on a European patent relating to a vacuum cleaner, validated in Austria, Germany, Spain, France, the United Kingdom, Greece, Italy, the Netherlands, Sweden and Turkey. BSH brought an action for infringement of this patent against Electrolux before a Swedish court, who raised an objection of invalidity of the patents in question. The court of first instance has dismissed BSH’s action on the basis of Article 24(4) read together with Article 27 of the Brussles I bis Regulation, insofar as it concerned patents validated in States other than Sweden – with the added element that one of them is a third State. BSH appealed to the referring court.

The case has been allocated to the Fourth Chamber (C. Lycourgos presiding, O. Spineanu-Matei reporting). An opinion will be delivered in due time by Advocate General N. Emiliou.

On 31 May 2023, the European Commission has proposed new rules aimed to ensure that the protection of adults is maintained in cross-border cases, and that their right to individual autonomy, including the freedom to make their own choices as regards their person and future arrangements is respected when they move within the EU.

The proposals, based on Article 81(2) TFEU, cover adults who, by reason of an impairment or insufficiency of their personal faculties, are not in a position to protect their own interests (e.g., due to an age-related disease).

Specifically, In the context of a growing cross-border mobility of people in the EU, this gives rise to numerous challenges. For instance, individuals concerned or their representatives may need to manage assets or real estate in another country, seek medical care abroad, or relocate to a different EU-country. In such cross-border situations, they often face complex and sometimes conflicting laws of Member States, leading to legal uncertainty and lengthy proceedings.

The proposed Regulation, which is meant to apply 18 months after its adoption, introduces a streamlined set of rules that will apply within the EU, in particular to establish which court has jurisdiction, which law is applicable, under what conditions a foreign measure or foreign powers of representation should be given effect and how authorities can cooperate. It also proposes a set of practical tools, including the introduction of a European Certificate of Representation, which will make it easier for representatives to prove their powers in another Member State.

The proposal for a Council Decision provides for a uniform legal framework for protecting adults involving non-EU countries. It obliges all Member States to become or remain parties to the 2000 Protection of Adults Convention in the interest of the Unione. Once the Decision is adopted, the Member States that are not yet party to the Convention will have 2 years to join it. Actually, some Member States have already launched their own ratification process, with the latest to announce (or re-announce) such a move being Italy, just a few days ago.

The approach underlying the package – in short, ensuring that the Hague Adults Convention enters into force for all Member States, and adopting a Regulation aimed to strengthen the operation of the Convention in the relations between Member States – reflects the suggestions that were put forward, inter alia, by the European Law Institute and the European Association of Private International Law, notably through a position paper issued in April last year.

Further analysis of the two proposals will be provided through this blog in the coming weeks.

This post merely to cross-refer to my thoughts on Pikamäe AG’s Opinion in Joined Cases C 73/22P and C 77/22 P Grupa Azoty S.A. et al v European Commission, over at prof Peers’ EU Law Analysis blog.

Geert.

 

On 10 May 2023, UNIDROIT adopted the Principles on Digital Assets and Private Law. The Principles contain recommendations to national legislators on how to deal with the private law issues raised by digital assets, such as cryptocurrencies or tokens. The final text can be found here.

Principle 5 concerns the conflict of laws. A previous draft and online consultation by UNIDROIT (see this blogpost) led the European Association of Private International Law to create a Working Group on the Law Applicable to Digital Assets, which has provided special input on this provision. Some of the Working Group’s suggestions are reflected in the final version, which reads:

Principle 5: Applicable law

(1) Subject to paragraph (2), proprietary issues in respect of a digital asset are governed by:

(a) the domestic law of the State expressly specified in the digital asset, and those Principles (if any) expressly specified in the digital asset; or, failing that,

(b) the domestic law of the State expressly specified in the system on which the digital asset is recorded, and those Principles (if any) expressly specified in the system on which the digital asset is recorded; or, failing that,

(c) in relation to a digital asset of which there is an issuer, including digital assets of the same description of which there is an issuer, the domestic law of the State where the issuer has its statutory seat, provided that its statutory seat is readily ascertainable by the public; or

(d) if none of the above sub-paragraphs applies:

OPTION A:

(i) those aspects or provisions of the law of the forum State as specified by that State;

(ii) to the extent not addressed by sub-paragraph (d)(i), those Principles as specified by the forum State;

(iii) to the extent not addressed by sub-paragraphs (d)(i) or (d)(ii), the law applicable by virtue of the rules of private international law of the forum State.

OPTION B:

(i) those Principles as specified by the forum State;

(ii) to the extent not addressed by sub-paragraph (d)(i), the law applicable by virtue of the rules of private international law of the forum State.

(2) In the interpretation and application of paragraph (1), regard is to be had to the following:

(a) proprietary issues in respect of digital assets, and in particular their acquisition and disposition, are always a matter of law;

(b) in determining whether the applicable law is specified in a digital asset, or in a system on which the digital asset is recorded, consideration should be given to records attached to, or associated with, the digital asset, or the system, if such records are readily available for review by persons dealing with the relevant digital asset;

(c) by transferring, acquiring, or otherwise dealing with a digital asset a person consents to the law applicable under paragraph (1)(a), (1)(b) or (1)(c);

(d) the law applicable under paragraph (1) applies to all digital assets of the same description;

(e) if, after a digital asset is first issued or created, the applicable law changes by operation of paragraph (1)(a), (1)(b) or (1)(c), proprietary rights in the digital asset that have been established before that change are not affected by it;

(f) the ‘issuer’ referred to in paragraph (1)(c) means a legal person:

(i) who put the digital asset, or digital assets of the same description, in the stream of commerce for value; and

(ii) who, in a way that is readily ascertainable by the public,

(A) identifies itself as a named person;

(B) identifies its statutory seat; and

(C) identifies itself as the person who put the digital asset, or digital assets of the same description, into the stream of commerce for value.

(3) The law applicable to the issues addressed in Principles 10 to 13, including whether an agreement is a custody agreement, is the domestic law of the State expressly specified in that agreement as the law that governs the agreement, or if the agreement expressly provides that another law is applicable to all such issues, that other law.

(4) Paragraphs (1) and (2) are subject to paragraph (3).

(5) Other law applies to determine:

(a) the law applicable to the third-party effectiveness of a security right in a digital asset made effective against third parties by a method other than control;

(b) the law applicable to determine the priority between conflicting security rights made effective against third parties by a method other than control.

(6) Notwithstanding the opening of an insolvency-related proceeding and subject to paragraph (7), the law applicable in accordance with this Principle governs all proprietary issues in respect of digital assets with regard to any event that has occurred before the opening of that insolvency related proceeding.

(7) Paragraph (6) does not affect the application of any substantive or procedural rule of law applicable by virtue of an insolvency-related proceeding, such as any rule relating to:

(a) the ranking of categories of claims;

(b) the avoidance of a transaction as a preference or a transfer in fraud of creditors;

(c) the enforcement of rights to an asset that is under the control or supervision of the insolvency representative.

As one can see, the Principle is quite long and complex.

The starting point is that the law applicable to a digital asset may be chosen either in the digital asset itself (Principle 5(1)(a)) or in the system in which the digital asset is recorded (Principle 5(1)(b)). Thus, precedence is given to the principle of party autonomy. This remarkably resembles the recently adopted sec. 12-107 US Uniform Commercial Code (UCC).

In the absence of a choice of law, the law of the statutory seat of the issuer of the digital asset shall apply, provided that this seat is readily ascertainable to the public (Principle 5(1)(c)). This was one of the key proposals of the EA PIL Working Group. Yet the Principles define the issuer as the person who has put the asset “in the stream of commerce for value” and has identified itself as such as well as its statutory seat (Principle 5(2)(f)). This considerably reduces the provision’s significance. It would, for instance, not apply to those who distribute their assets via airdrop or those who choose not to identify their statutory seat.

If none of these rules apply, the Principles give the national legislator two options: Under Option A, it can submit digital assets to special rules of its national law, to be supplemented by the UNIDROIT Principles. Under Option B, it can directly refer to the UNIDROIT Principles as governing law. In both cases, any remaining gaps will be filled by the law that is applicable according to the conflict-of-laws rules of the forum state.

This latter technique, which effectively substitutes the law of the forum for the search for an applicable law, is known in French law as a substantive rule of PIL (règle materielle de droit international privé). It provides a simple solution to the conflict-of-laws conundrum. That the Principles suggest themselves as applicable law is novel, but well understandable given their goal of legal harmonisation.

Less harmonisation is the default rule, which refers to the conflict-of-laws rules of the forum. No indication whatsoever is given what these conflicts rules should look like. One might fear that this will lead to divergence between national laws. It is to be hoped that they can be overcome by the Joint Project of the Hague Conference on Private International Law and UNIDROIT on Digital Assets and Token, which was recently announced.

— Thanks to Felix Krysa and Amy Held for contributing to this post.

Conventions & Instruments

On 12 May 2023, Canada deposited its instrument of accession to the 1961 Apostille Convention. This accession marked a historical milestone: the 1000th treaty action relating to an HCCH Convention or Protocol. The 1961 Apostille Convention, which now has 125 Contracting Parties, will enter into force for Canada on 11 January 2024. More information is available here.

On 16 May 2023, North Macedonia signed the 2019 Judgments Convention. The Convention, which currently has 28 Contracting Parties, will enter into force in September 2023, and for North Macedonia only after the deposit of an instrument of ratification (pursuant to Art. 28(2) of the Convention). More information is available here.

On 16 May 2023, Singapore deposited its instrument of accession to the 1965 Service Convention. The Convention, which now has 81 Contracting Parties, will enter into force for Singapore on 1 December 2023 subject to the Article 28 procedure. More information is available here.

On 25 May 2023, Georgia signed the 2007 Child Support Convention and the 2007 Maintenance Obligations Protocol. The Convention and the Protocol will enter into force for Georgia further to the deposit of instruments of ratification. More information is available here.

Meetings & Events

On 15 and 16 May 2023, the seminar “Recognition and Enforcement of Foreign Judgments in the Western Balkan Region: HCCH 2019 Judgments Convention”, co-organised by the Center for International Legal Cooperation (CILC) and the HCCH, was held in The Hague. More information is available here.

On 31 May 2023, the Permanent Bureau of the HCCH organised an online event on the occasion of the 30th anniversary of the 1993 Adoption Convention. More information is available here.

Upcoming Events

Registrations are open for the conference “The HCCH 2019 Judgments Convention: Cornerstones – Prospects – Outlook”, organised by the HCCH and the University of Bonn. The conference will be held in person on 9 and 10 June 2023 in Bonn, Germany. More information is available here.

Registrations are open for the webinar “Cross-border Commercial Dispute Resolution – HCCH 1965 Service Convention”, organised by the HCCH and the Asian Business Law Institute. The webinar will be held on 27 June 2023, 10:00 a.m. to 11:10 CEST. More information is available here.

Other

On 11 May 2023, the Permanent Bureau of the HCCH announced the formal approval of the HCCH-UNIDROIT Joint Project on Law Applicable to Cross-Border Holdings and Transfers of Digital Assets and Tokens. More information is available here.

 

These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.

In June 2022, this blog posted about a joint webinar between the Singapore-based Asian Business Law Institute (ABLI) and the Permanent Bureau of the Hague Conference on Private International Law (HCCH) on the Choice-of-Court and Judgments Conventions. The two organizations return this year with their third joint session, this time on the 1965 Service Convention. ABLI has been engaging in work related to judgments recognition and enforcement in Asia for some time.

Titled Cross-border Commercial Dispute Resolution – HCCH 1965 Service Convention, the webinar will take place on 27 June 2023 between 4 to 5:10pm (Singapore time) or 10 to 11:10am (CEST), and is expected to discuss, among others, the actual operation of the Service Convention in practice, how the Service Convention works with the other HCCH Conventions for cross-border dispute resolution, and Singapore’s accession to and upcoming implementation of the Service Convention.

Invited speakers include Sara Chisholm-Batten (Partner, Michelmores LLP), Melissa Ford (Secretary, HCCH), Delphia Lim (2Director, International Legal Division, Ministry of Law, Singapore), Professor Yeo Tiong Min (Singapore Management University), and Professor Yun Zhao (University of Hong Kong and Representative of Regional Office for Asia and the Pacific, HCCH).

For more information or to register, click here. Queries about the webinar can be directed to ABLI at info@abli.asia.

On 17 May 2023, the CJEU delivered its judgment in Fonds de Garantie des Victimes des Actes de Terrorisme et d’Autres Infractions (FGTI) v. Victoria Seguros SA (Case C‑264/22).

This is a case on the delineation of the respective scopes of the law governing torts and the law governing subrogation. The answer given by the Court seems obvious, and one wonders why the question was asked in the first place, at least in such terms.

One interesting issue (possibly the only one) is whether the existence of a French judgment could have changed the answer of the Court, but the question was not asked.

Background

On 4 August 2010, while swimming and snorkelling in the sea off the beach at Alvor (Portugal), a person of French nationality was struck by the propeller of a boat registered in Portugal and suffered serious physical injuries.

The victim brought a claim for compensation in France against Fonds de garantie des victimes des actes de terrorisme et d’autres infractions (FGTI), a public fund which can compensate victims of certain torts. After compensating victims, FGTI is subrogated in their rights that it can exercise against tortfeasors.

FGTI settled in 2014. The settlement was approved by a French court, and FGTI paid the victim in April 2014, which triggered the subrogation.

At the end of November 2016, FGTI brought proceedings against Victoria Seguros, the insurance company of the alleged tortfeasor, in Portuguese courts.

Victoria Seguros argued that the claim brought by FGTI was governed by Portuguese law and thus time-barred. FGTI replied that French law applied and that the claim was not time-barred.

Lex loci delicti or lex subrogationis?

The issue before the court was whether the time limit was governed by the law of the tort or the law governing the subrogation.

Victoria Seguros argued that the law of the tort applied. As the damage was suffered in Portugal, it was thus Portuguese law (Rome II Regulation, Article 4), and the starting point of the limitation period was the day of the accident, i.e. 10 August 2010. Under Portuguese law, the applicable time limit was 3 years.

FGTI argued that the law of the subrogation applied (Rome II Regulation, art. 19). As the duty of the Fund arose under French law, this was French law, which provides for a 10 year limitation period starting in 2014.

Article 19 of the Rome II Regulation reads:

Where a person (the creditor) has a non-contractual claim upon another (the debtor), and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether, and the extent to which, the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.

This provision establishes in complex terms a pretty simple distinction. The law governing the obligation of a person (here, the Fund) to compensate a victim determines whether this person is subrogated in the rights of this victim, and to which extent (for instance, only to the extent of the actual payment made to that victim). But the result of the subrogation is clearly to transfer to the Fund the rights of the victims. Subrogation does not establish new rights. It merely transfers existing rights from one person (the victim) to another (here the Fund).

Thus, the answer to the question referred to the CJEU seemed pretty obvious, and one can understand that no opinion of an Advocate General was requested. FGTI was exercising the victim’s rights against the (alleged) tortfeasor. These rights were governed by the lex loci delicti, and as clarified by Article 15, this included the limitation period for exercising those rights.

This is what the CJEU rules:

Article 4(1), Article 15(h) and Article 19 of Regulation No 864/2007 must be interpreted as meaning that the law which governs the action of a third party subrogated to the rights of an injured party against the person who caused the damage and which determines, in particular, the rules on limitation in respect of that action is, in principle, that of the country in which that damage occurs.

The Court offers quite an impressive number of reasons to justify such an obvious solution.

The French Judgment

In Portuguese courts, FGTI argued that French law provides “for a limitation period of 10 years from the date of the judicial decision at issue, which, in the present case, was made in March 2014“.

It is difficult to assess this argument without any further information.

There is no doubt that there is no special time limit for subrogation under French law. The French supreme court rules regularly that subrogation does not trigger any new time limit, and that it is always the time limit applicable to the right of the victim which applies, which is of 10 years for personal injury cases, starting on the date of the damage. Maybe this is the rule FGTI relied upon (though the starting point should not have been the 2014 judgment then).

There is, however, a special time limit of 10 years applicable to the enforcement of judgments.  In this case, FGTI referred to a time limit starting on the day of the French judgment approving the settlement, i.e. March 2014.

From a PIL perspective, this raises the issue of whether this judgment could have been the basis for an action in Portugal. Clearly, the insurer of the alleged tortfeasor was not a party to the French proceedings, and the French judgment had not ruled on whether the alleged tortfeasor was liable. But maybe an argument could have been made that the judgment could be recognised in Portugal to the extent that it might have declared that FGTI was subrogated (I do not know that it did). From the perspective of Portugal, it could then have raised the issue of whether a new right was created by the judgment (novatio), or whether Portugal would still have recognised the pre-existing right of the victim.

Infrastructure Services Luxembourg SARL ea v Kingdom of Spain [2023] EWHC 1226 (Comm) adds to the Smorgasbord of ECT ICSID (and other) award enforcement issues which I also signalled here, and links of course to CJEU Achmea, Komstroy and the like. (Note this point does not discuss the disclosure issues raised).

The Spanish Government is of course duty bound to fight all these awards (around 60 cases have been brought against it), and it is fighting the awards on many fronts (first by advocating for a different interpretation of the FET – Fair and Equitable Treatment standard in the ECT, further by trying internal ICSID or other review processes; subsequently by trying to have the awards annulled on a variety of grounds in the courts in ordinary of the curial seat; finally by resisting enforcement in the many jurisdictions where investors try to have the awards enforced.

The case at issue, in which Spain argues against registration of the relevant ICSID award, [56] deals with adjudicative jurisdiction: not jurisdiction for enforcement (compare the Australian decision in [2023] HCA 11, were recognition and enforcement were granted, but not execution). Fraser J first discusses Spain’s sovereign immunity argument, aptly summaring [57] ff the CJEU authority in Achmea and Komstroy. [67] he holds

Spain argued before me the questions of EU law set out above in a manner that elevated the status of these decisions of the CJEU, almost as though they were decisions of an over-arching international court that must bind all nations. For example, Spain referred to what it called “the international law aspects of the EU legal order” and also stated in its supporting documents for the application that “EU law is an inextricable part of international law.” There is no doubt that the law of the EU is correctly described as being international law, as self-evidently it governs relations between Member States which have collectively entered into international treaty obligations under the EU Treaties including the TFEU. Those treaty obligations have international effect and the institutions of the EU have primacy over domestic organs in certain important respects. However, as the claimants point out, this argument ignores the other aspects of international law that requires observance of existing express treaty obligations, and it also ignores the effect of Spain having pre-existing treaty obligations under other treaties such as the ICSID Convention and the ECT. The EU treaties do not trump these, nor do they override the relevant domestic law mechanism in the United Kingdom.

That is different for the UKSC authority in Micula. The judge here [79] concludes his recollection of the Micula principle with the observation that

The availability of defences to a foreign state faced with an application to register an arbitral award under the ICSID Convention is far narrower than those that would be available if an award were being enforced under the New York Convention.

[89] ff he further explains that the narrow set of grounds for refusal (immunity and, although he does not think these actually qualify as exception, lack of a written agreement to arbitrate and the validity of the Award itself) of an ICSID award, left open by the Supreme Court in Micula, and rejects them all. He does in my view considers this set too narrowly.

His conclusion [80]:

with the greatest of respect to the CJEU, it is not the ultimate arbiter under the ICSID Convention, nor under the ECT, and the difficulties in which Spain finds itself does not assist it here, given the United Kingdom’s own treaty obligations under the ICSID Convention, which are owed to all signatories of the ICSID Convention. The domestic mechanism established under the 1966 Act was enacted specifically in order to comply with these.

Obiter [81] ff he suggests the VCLT would lead to the same result, concluding on that point [87]

I consider that there is a clear conflict between the EU Treaties, as their application to international arbitration involving Member States has been decided by the CJEU and explained by Mr Baloch, and each (or more accurately both) of the ECT or the ICSID Convention. If intra-EU arbitration is contrary to EU law principles governing either primacy of the CJEU or EU principles generally, then this must (and can only) arise from the EU Treaties themselves. I cannot see how it can arise in any other way. Therefore, if that is the case, there must be a conflict. That conflict does not mean that the latter EU law principles as enunciated by the CJEU remove Spain from the ambit and scope of the ECT, or from the ICSID Convention. Spain’s arguments, as either amplified or further explained in submissions (including a letter to the court after distribution of the draft judgment) was that there was a conflict between articles 267 and 344 of the TFEU on the one hand, and article 26 of the ECT on the other. In those circumstances, Spain maintained that this conflict should be resolved in favour of the articles of the TFEU by what it called “the treaty conflict rule of EU primacy”. However, in my judgment that is simply a different way of Spain maintaining that both the ECT and the ICSID Convention – both of which clearly have signatories who are not Member States of the EU – should be interpreted by ignoring their clear terms regarding dispute resolution, in preference to granting the decisions of the CJEU complete primacy over those pre-existing treaty obligations of all states. I do not accept that is the correct approach, and I do not consider that such a result can be achieved by applying international law principles to conflicting treaty provisions.

His ‘overall conclusions’ on the EU law questions, are [88]

Question 1. Achmea arose out of the BIT between the Slovak Republic and Netherlands. Does Achmea‘s reasoning also apply to the ECT?

Answer: The reasoning in Achmea probably does also apply to the ECT, in terms of the applicability of EU law, as considered by the CJEU. This means that the CJEU would be most likely to reach the same conclusion on any EU law question referred to it under the ECT as it did under the BIT in the Achmea case. However, these are matters of EU law only. The conclusion does not “apply to the ECT” in the sense contended for by Spain. That conclusion is a purely EU law issue.

Question 2. Do TFEU Articles 267 and 344, as interpreted by the CJEU, have primacy over Article 26 of the ECT as a matter of international law?

Answer: No, they do not. Even if they did, this would go to the jurisdiction of the ICSID arbitral tribunal, and the ICSID Convention makes clear that this is a matter that is reserved to, and can only be resolved by, the procedure set down in the Convention, and not domestic law. This is helpfully stated in the commentary by Professor Schreuer on Article 54 which stated that “A domestic court or authority before which recognition and enforcement is sought is restricted to ascertaining the award’s authenticity. It may not re-examine the ICSID tribunal’s jurisdiction. It may not re-examine the award on the merits. Nor may it examine the fairness and propriety of the proceedings before the ICSID tribunal.” This passage was expressly approved by the Supreme Court in Micula at [68] which definitively states the approach under English law to this issue.

The answers to the series of questions that followed at sub-issues 2(a) to (e) are therefore of academic interest only and need not be addressed on this application.

[111] ff upon claimant’s appeal to these cases, the judge considers many of the cases I refer to here, and finds them largely to plea in claimant’s favour.

A stinging rebuke follows [122-123]

What Spain’s main EU law argument amounts to is this, at its heart. Spain accepts that it is a party to the ICSID Convention; it accepts that it is a party to the ECT. It freely acceded to both of those treaties. There is no doubt that the ECT expressly incorporates the ICSID arbitration provisions within it, adopting international arbitration to resolve disputes between Contracting Parties (which includes Spain) and private international investors, who are resident or domiciled in other countries. Yet Spain relies upon its membership of the EU, the EU Treaties that created that union, and the strictures imposed on those Member States by the CJEU’s rulings on the EU Treaties. These rulings have determined – again, outlined here only in summary – that there can be no valid arbitration provision adopted by Member States which grants jurisdiction to any arbitral tribunal that may touch upon matters of EU law. This is due to the primacy of the CJEU to determine all such EU law matters. Therefore Spain argues that there can be no jurisdiction, even for a properly constituted ICSID arbitral tribunal, to determine any dispute under the ECT between Spain and an investor from any other state. This is the case regardless of whether that investor is within, or without, another Member State, although it runs both lines of argument in the alternative. It also argues that any ICSID award, such as the Award in this case, must therefore have been reached without jurisdiction and so cannot be a valid award; and/or that it has immunity from recognition in the courts of the United Kingdom for what may broadly be described as the same, or similar, reasons.

The logical consequence (or extension) of this argument for it to be correct is that these decisions of the CJEU must be taken as binding all the parties to the ECT and to the ICSID Convention – whether Member States of the EU or otherwise – and take priority over all other treaty obligations entered into by any other state, even those obligations assumed by treaty prior to the creation of the EU. What this would mean, were Spain to be correct (and I am confident that it is not correct) is that by reason of the terms of the EU Treaties, and by reason of the rulings of the CJEU and its supremacy over EU law matters, the EU and the CJEU would have unilaterally changed – if not removed – all the existing treaty obligations of all the Contracting Parties to the ICSID Convention. I know of no framework of international law in which such a position could be correct. I would go further and observe that it simply cannot be correct. It would mean that the existing treaty obligations of any Contracting Party to the ICSID Convention would have been changed, without any intention or involvement on the part of that Contracting Party, a sovereign nation, as a result of rulings by the CJEU. That is not a conventional analysis of how international obligations work, and I reject Spain’s arguments. This completes my consideration of what I consider is the longer route.

I myself have argued, based on the ECT’s travaux, that the applicable law clause of Article 26 ECT includes the application of EU (State Aid) law and must be so applied by arbitration Panels applying the ECT. However we are yet to hear from the Panel in that particular case.  I would suggest that is a neater way to go about the issue.

Geert.

1/2 Unsuccessful application to set aside registration of #ICSID Energy Charter Treaty #ECT award

Foreign Sovereign Immunity (and impact on jurisdiction) per CJEU Achmea; non disclosure

Infrastructure Services Luxembourg SARL ea v Kingdom of Spain [2023] EWHC 1226 (Comm)

— Geert Van Calster (@GAVClaw) May 25, 2023

Just a quick note to assure you that last minute registration is welcome. All information is available here.

Written by Veerle Van Den Eeckhout, working at the Research and Documentation Directorate of the CJEU

On 29 April 2023, Veerle Van Den Eeckhout gave a presentation on recent case law of the Court of Justice of the European Union. The presentation, now available online, was entitled “CJEU case-law. A Few Observations on Recent CJEU Case Law with Attention for Some Aspects of Logic and Argumentation Theory.” The presentation was given during the Dialog Internationales Familienrecht 2023 at the University of Münster. This presentation builds upon a previous presentation of the Author, “Harmonized interpretation of regimes of judicial cooperation in civil matters?”, which is now also available online.

 

CJEU case-law. A Few Observations on Recent CJEU Case Law with Attention for Some Aspects of Logic and Argumentation Theory

The presentation focuses on case law of the CJEU regarding international family law, but adopts a broad view, particularly by taking into account also case law outside the field of international family law – especially when issues arise both in the context of international family law and in the context of PIL outside the field of international family law – , and by paying attention to case law of the CJEU outside the pure interpretation of PIL regulations – where a national court  is not asking in its question referred for a preliminary ruling, as such, for an interpretation of a PIL regulation, but the case might, possibly, affect PIL or interrelate with PIL; thus, for example, a recent judgment such as Belgische Staat (Réfugiée mineure mariée), Case C-230/21, regarding a right to family reunification based on Directive 2003/86 was also considered in the analysis.

While presenting case law of the CJEU in PIL matters, the presentation  particularly aimed to explore some aspects of methodology, reasoning, deductions and “consistency”. The research thus presents some aspects of methodology of interpretation of European law by the CJEU – regarding methods the CJEU is using to interpret European law -, as well as some issues of analysis of case law of the CJEU – whereby a case of the CJEU subsequently raises questions regarding its content and reasoning -, and some questions regarding possible further deductions based on the case law of the CJEU. The presentation does not pretend any exhaustiveness in this regard, but rather explores and presents some of these aspects, looking at recent cases of the CJEU.

The PowerPoint of the presentation is available here. A version of this PowerPoint including also an extended version thereof is available here.

 

Harmonized interpretation of regimes of judicial cooperation in civil matters?

The presentation of 29 April 2023 continued on some aspects that were presented in a discussion of case law of the CJEU at the “Lugano Experts Meeting” in June 2022. The  Lugano Experts Meeting 2022 was organised in Bern. The previous Lugano Experts Meeting had taken place in 2017.

The presentation at the Lugano Experts Meeting 2022, on 1 June 2022, essentially concerns case law of the CJEU between 2017 and 2022. It discusses issues of harmonised interpretation of regimes of judicial cooperation in civil matters. It includes some notes on case law of the CJEU regarding the Lugano convention 2007, the Brussels 1 bis regulation, and several second generation regulations such as the European Enforcement Order Regulation, the European Order for Payment Procedure Regulation, and the European Small Claims Procedure Regulation.

As a matter of fact, one may observe a wide range of instruments that are indicated as instruments of “Judicial cooperation in civil matters” (Chapter 3 of Title V of the Treaty on the Functioning on the European Union), interpreted in a continuous stream of decisions (judgments and orders) by the CJEU. The presentation of case law of the CJEU at the Lugano experts meeting offers, inter alia, a discussion of issues of (in)consistency and influence/interaction between regimes, of giving or not a harmonised interpretation, of making possible deductions from a judgment in one context to another context. The relevance thereof is presented particularly in light of preliminary questions to the CJEU, with attention for article 53, paragraph 2, and article 99 of the Rules of Procedure of the Court. Issues and questions arising thereby include, inter alia, the following: what are national judges “supposed to know already” when reflecting about asking a preliminary question to the CJEU; how wide should the CJEU’s field of vision be when assessing whether a question should be answered by order of by judgment, and when deciding about the content of the judgment – taking thereby or not into account the interpretation that has already been given in the context of another instrument.

The PowerPoint of this presentation is available here.

 

*Any view expressed in these presentations is the personal opinion of the author.

This is a friendly reminder to our co-organised event on next Thursday, free admissions can be registered here.

Online event

When making decisions, adults should think about how their decisions will affect children. Recent years have witnessed, in private international law cases and legislation, the protection of children is increasingly mingled with gender, indigenous issues, refugees, violence, war, surrogacy technology, etc. This is evidenced by the US Supreme Court 2022 judgment Golan v. Saada, the Australian case Secretary, Department of Communities & Justice v Bamfield, the 2023 German Constitutional Court decision, the Chinese Civil Code, the Australia Family Law (Child Abduction Convention) Amendment (Family Violence) Regulations 2022, and developments at the Hague Conference on Private International Law (HCCH Children Conventions) and the United Nations (Convention on the Rights of the Child and its additional Protocols).

On this International Children’s Day, let us join this CAPLUS webinar in cooperation with conflictoflaws.net and American Society of International Law Private International Law Interest Group to hear voices of children in private international law.

Speakers

• Ms. Anna Mary Coburn

After 22-years of public service as a U.S. Department of State Attorney-Advisor for Children’s Issues as well as a USAID Regional Legal Advisor/Senior Advisor for Children/Youth in Conflict, Anna has transitioned to practicing international family law with a focus on child rights cases and issues.

• Mr. Philippe Lortie

Philippe is co-head of the International Family and Child Protection Law Division at the Hague Conference on Private International Law Permanent Bureau and has more than 30 years’ experience in the field of child protection.

• Dr. Miranda Kaye

Dr Miranda Kaye is an academic at the Faculty of Law in the University of Technology Sydney in Australia and a member of Hague Mothers, a project aiming to end the injustices created by the Hague Child Abduction Convention. She also has experience in the public service (Law Commission of England and Wales) and as a practicing solicitor (family law in the UK).

• Professor Lukas Rademacher

Lukas is a Professor of Private Law, Private International Law, and Comparative Law in Kiel, Germany. He studied law at the Universities of Düsseldorf and Oxford, and received his PhD at the University of Münster. He wrote his postdoctoral thesis at the University of Cologne.

• Ms. Haitao Ye

Haitao is a lawyer at the Shanghai Office of the Beijing Dacheng Law LLP specializing in marriage and family dispute resolution, family wealth inheritance and management. She is a former experienced judge in civil and commercial trials at the Shanghai Pudong New District People’s Court in China.

Moderators/commentators

• Dr. Jie (Jeanne) Huang (Associate Professor at Sydney Law School, University of Sydney)

 

Thursday 1 June, 6-7.30pm AEST

(4-5.30am Washington D.C./9-10:30am London/10-11.30am the Hague/4-5.30pm Beijing)

RSVP now your free ticket here.

 

This event is proudly co-presented by the Centre for Asian and Pacific Law at the University of Sydney, conflictoflaws.net and the American Society of International Law Private International Law Interest Group.

In Boettcher v Xio (UK) LLP & Ors [2023] EWHC 801 (Comm)  Eggers DJ ultimately rejected ia a forum non conveniens challenge viz a claim for damages for misrepresentations allegedly made to induce claimant to enter into a contract of employment with the First Defendant. In his decision he considered ia the role to play for the application of the (retained) Rome II Regulation.

[109] There was substantial dispute between the parties as to whether the applicable law was English law in accordance with A12(1) Rome II (culpa in contrahendo), alternatively A4(1) Rome II  (on claimant’s case), or German law in accordance with A(1) (on defendants’ case).

[110] The judge holds there is a good arguable case (with final judgment on lex causae to be discussed at trial [110](4)) that English law is the applicable law, however I do not find his arguments very convincing. [110](1)

the damages claimed by Dr Boettcher for the alleged misrepresentations arose as a result of his entering into the contract of employment with Xio UK, in particular his claims for loss of earnings and damages for mental distress and/or disappointment and/or reputational damage. It was therefore his entry into the contract of employment with Xio UK, and his subsequent employment with Xio UK, in reliance on the alleged misrepresentations which constituted the relevant damage.

This, I would suggest, is plainly wrong. The alleged misrepresentations are the delictus committi; the formation of the contract (held with reference to Dicey 35-026 to have taken place in England) is the fallout of the delict. Yet it does not constitute its ‘direct damage’. The damage, as also seemingly formulated in the claim, are loss of earnings and damages for mental distress and/or disappointment and/or reputational damage. Seeing as claimant’s earlier employment for which he left currently litigated one, was overwhelmingly connected to Germany, where he also seems to have the core of his financial interests (the location of claimant’s bank account is too readily dismissed [110](2) as not being relevant), Germany would seem to have a lot going for it in terms of the lex causae, or at the very least a Mozaik of German (for loss of earnings) and English law (for mental distress), which I do not see readily displaced by English law as one applicable law under Article 4(3) Rome II.

Article 12’s culpa in contrahendo rule is correctly held [110](3) not to apply to relevant parties.

There are other factors that led to the forum non challenge not succeeding, however I do indeed think that the applicable law issue requires further consideration at trial.

Geert.

Failed jurisdictional challenge ia on forum non conveniens grounds, with consideration ia of Rome II applicable law

Boettcher v (Xio (UK) LLP & Ors [2023] EWHC 801 (Comm)https://t.co/dE6jE9mJfV

— Geert Van Calster (@GAVClaw) May 3, 2023

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In a recent decision, the Dubai Supreme Court (DSC) confirmed that enforcing foreign judgments in the Emirate could be particularly challenging. In this case, the DSC ruled against the enforcement of an English judgment on the ground that the case had already been decided by Dubai courts by a judgment that became final and conclusive (DSC, Appeal No. 419/2023 of 17 May 2023). The case presents many peculiarities and deserves a closer look as it reinforces the general sentiment that enforcing foreign judgments – especially those rendered in non-treaty jurisdictions – is fraught with many challenges that render the enforcement process very long … and uncertain. One needs also to consider whether some of the recent legal developments are likely to have an impact on the enforcement practice in Dubai and the UAE in general.

 

The case

 1) Facts 

The case’s underlying facts show that a dispute arose out of a contractual relationship concerning the investment and subscription of shares in the purchase of a site located in London for development and resale. The original English decision shows that the parties were, on the one hand, two Saudi nationals (defendants in the UAE proceedings; hereinafter, “Y1 and 2”), and, on the other hand, six companies incorporated in Saudi Arabia, Anguilla, and England (plaintiffs in the UAE proceedings, hereinafter “X et al.”). The English decision also indicates that it was Y1 and 2 who brought the action against X et al. but lost the case. According to the Emirati records, in 2013, X et al. were successful in obtaining (1) a judgment from the English High Court ordering Y1 and 2 to pay a certain amount of money, including interests and litigation costs, and, in 2015, (2) an order from the same court ordering the payment of the some additional accumulated interests (hereinafter collectively “English judgment”). In 2017, X et al. sought the enforcement of the English judgment in Dubai.

 

2) The Enforcement Odyssey…

a) First Failed Attempt

i) Dubai Court of First Instance (DCFI)

First, X et al. brought an action to enforce the English judgment before the DCFI in accordance with the applicable rules in force at the time of the action (former art. 235 of the 1992 Federal Civil Procedure Act [“1992 FCPA”]). Based on well-established case law, the DCFI rules as follows: (i) in the absence of an applicable treaty, reciprocity should be established (interestingly, in casu, the DCFI considered that the UAE-UK bilateral convention on judicial assistance could not serve as a basis for enforcement since it lacked provisions on mutual recognition and enforcement); (ii) reciprocity can be established by showing that the enforcement requirements in the rendering State are “the same (identical) or less restrictive” compared to those found in the UAE; (iii) it was incumbent on the party seeking enforcement to submit proof of the content of the foreign law pursuant to the methods of proof admitted in the UAE so that the court addressed could compare the enforcement requirements in both countries. Considering that X et al. had failed to establish reciprocity with the United Kingdom (UK), the DCFI refused the enforcement of the English judgment (DCFI, Case No. 574/2017 of 28 November 2017).

X et al. appealed to the Dubai Court of Appeal.

 

ii) Dubai Court of Appeal (DCA)

Before the DCA, X et al. sought to establish reciprocity with the UK by submitting evidence on the procedural rules applicable in England. However, the DCA dismissed the appeal on the ground that the English court did not have jurisdiction. The DCA started first by confirming a longstanding position of Dubai courts, according to which the foreign court’s jurisdiction should be denied if it is established that the UAE courts had international jurisdiction, even when the jurisdiction of the rendering court could be justified based on its own rules; and that any agreement to the contrary should be declared null and void. Applying these principles to the case, the DCA found that Y1 and 2 were domiciled in Dubai. Therefore, since the international jurisdiction of Dubai courts was established, the DCA found that the English court lacked indirect jurisdiction (DCA, Appeal No. 10/2018 of 27 November 2018).

Dissatisfied with the result, X et al. appealed to the Supreme Court.

 

iii) Dubai Supreme Court (DSC)

Before the DSC, X et al. argued that English courts had jurisdiction since the contractual relationship originated in England; the case concerned contracts entered into and performed in England; the parties had agreed on the exclusive jurisdiction of English court and that it was Y1 and 2 who initially brought the action against them in England. However, the DSC, particularly insensitive to the arguments put forward by X et al., reiterated its longstanding position that the rendering court’s indirect jurisdiction would be denied whenever the direct jurisdiction of UAE courts could be justified on any ground admitted under UAE law (DSC, Appeal No. 52/2019 of 18 April 2019).

 

b) Second Failed Attempt

The disappointing outcome of the case did not discourage X et al. from trying their luck again, knowing that the enforcement regime had since been (slightly) amended. Indeed, in 2018, the applicable rules – originally found in the 1992 FCPA – were moved to the 2018 Executive Regulation No. 57 of the 1992 FCPA (as subsequently amended notably by the 2021 Cabinet Decision No. 75. Later, the enforcement rules were reintroduced in the new FCPA enacted in 2022 and entered into effect in January 2023 [“2022 FCPA”]). The new rules did not fundamentally modify the existing enforcement regime but introduced two important changes.

The first concerns the enforcement procedure. According to old rules (former Art. 235 of the 1992 FCPA), the party seeking to enforce a foreign judgment needed to bring an ordinary action before the DCFI.  This procedure was replaced by a more expeditious one consisting in filing a petition for an “order on motion” to the newly created Execution Court (Art. 85(2) of the 2018 Executive Regulation, now the new Art. 222(2) of the 2022 FCPA).

The second concerns indirect jurisdiction. According to the old rules (former Art. 235 of the 1992 FCPA), the enforcement of a foreign judgment should be denied if (1) UAE courts had international jurisdiction over the dispute; and (2) the rendering court did not have jurisdiction according to (a) its own rules of international jurisdiction and (b) its rules on domestic/internal jurisdiction. Now, Art. 85(2)(a) of the 2018 Executive Regulation (new Art. 222(2)(a) of the 2022 FCPA) explicitly provides that the enforcement of the foreign judgment will be refused if the UAE courts have “exclusive” jurisdiction.

Based on these new rules, X et al. applied in 2022 to the Execution Court for an order to enforce the English judgment, but the application was rejected. X et al. appealed before the DCA. However, unexpectedly, the DCA ruled in their favour and declared the English judgment enforceable. Eventually, Y1 and 2 appealed to DSC. They argued, inter alia, that X et al. had already brought an enforcement action that was dismissed by a judgment that is no longer subject to any form of appeal. The DSC agreed. It considered that X et al. had already brought the same action against the same parties and having the same object and that the said action was dismissed by an irrevocable judgment. Therefore, X et al. should be prevented from bringing a new action, the purpose of which was the re-examination of what had already been decided (DSC, Appeal No. 419/2023 of 17 May 2023).

 

Comments

1) The case is interesting in many regards. First, it demonstrates the difficulty of enforcing foreign judgments in the UAE in general and Dubai in particular. Indeed, UAE courts (notably Dubai courts) have often refused to enforce foreign judgments, in particular those rendered in non-treaty jurisdictions, based on the following grounds:

i) Reciprocity (see, e.g., DSC, Appeal No. 269/2005 of 26 February 2006 [English judgment]; DSC, Appeal No. 92/2015 of 9 July 2015 [Dutch judgment (custody)]; DSC, Appeal No. 279/2015 of 25 February 2016 [English judgment (dissolution of marriage)]; DSC, Appeal No. 517/2015 of 28 August 2016 [US. Californian judgment]);

ii) Indirect jurisdiction (see, e.g., DSC, Appeal No. 114/1993 of 26 September 1993 [Hong Kong judgment]; DSC, Appeal No. 240/2017 of 27 July 2017 [Congo judgment]); and

iii) Public policy, especially in the field of family law, and usually based on the incompatibility of the foreign judgment with Sharia principles (see, e.g., DSC, Appeal No. 131/2020 of 13 August 2020 [English judgment ordering the distribution of matrimonial property based on the principle of community of property]. See also, Federal Supreme Court, Appeal No. 193/24 of 10 April 2004 [English judgment conferring the custody of a Muslim child to a non-Muslim mother]; Abu Dhabi Supreme Court, Appeal No. 764/2011 of 14 December 2011 [English judgment order the payment of life maintenance after divorce]). Outside the field of family law, the issue of public policy was raised in particular with respect to the consistency of interests with Sharia principles, especially in the context of arbitration (see, e.g., DSC, Appeal No. 132/2012 of 18 September 2012 finding that compound and simple interests awarded by an LCIA arbitral award did not violate Sharia. But, c.f. Federal Supreme Court, Appeal No. 57/24 of 21 March 2006, allowing the payment of simple interests only, but not compound interests.).

 

Second, the case shows that the enforcement process in the UAE, in general, and in Dubai, in particular, is challenging, and the outcome is unpredictable. This can be confirmed by comparing this case with some other similar cases. For example, in one case, the party seeking enforcement (hereinafter “X”) unsuccessfully sought the enforcement of an American (Nevada) judgment against the judgment debtor (hereinafter “Y”). The DCFI first refused to enforce the American judgment for lack of jurisdiction (Y’s domicile was in Dubai). The decision was confirmed on appeal, but on the ground that X failed to establish reciprocity. Instead of appealing to the DSC, X decided to bring a new action on the merits based on the foreign judgment. The lower courts (DCFI and DCA) dismissed the action on the ground that it was, in fact, an action for the enforcement of a foreign judgment that had already been rejected by an irrevocable judgment. However, DSC quashed the appealed decision with remand, considering that the object of the two actions was different. Insisting on its position, the DCA (as a court of remand) dismissed the action again. However, on a second appeal, the DSC overturned the contested decision, holding that the foreign judgment was sufficient proof of the existence of Y’s debt. The DSC finally ordered Y to pay the full amount indicated in the foreign judgment with interests (DSC, Appeal No. 125/2017 of 27 April 2017).

However, such an approach is not always easy to pursue, as another case concerning the enforcement of a Singaporean judgment clearly shows. In this case, X (judgment creditor) applied for an enforcement order of a Singaporean judgment. The judgment was rendered in X’s favour in a counterclaim to an action brought in Singapore by Y (the judgment debtor). The Execution Court, however, refused to issue the enforcement order on the ground that there was no treaty between Singapore and the UAE. Instead of filing an appeal, X brought a new action on the merits before the DCFI, using the Singaporean judgment as evidence. Not without surprise, DCFI dismissed the action accepting Y’s argument that the case had already been decided by a competent court in Singapore and, therefore, the foreign judgment was conclusive (DCFI, Case No. 968/2020 of 7 April 2021). Steadfastly determined to obtain satisfaction, X filed a new petition to enforce the Singaporean judgment before the Execution Court, which – this time – was accepted and later upheld on appeal. Y decided to appeal to the DSC. Before the DSC, Y changed strategy and argued that the enforcement of the Singaporean judgment should be refused on the ground that the rendering foreign court lacked jurisdiction! According to Y, Dubai courts had “exclusive” jurisdiction over the subject matter of X’s counterclaim because its domicile (place of business) was in Dubai. However, the DSC rejected this argument and ruled in favour of the enforcement of the Singaporean judgment (DSC, Appeal No. 415/2021 of 30 December 2021).

 

2) From a different perspective, one would wonder whether the recent developments observed in the UAE could alleviate the rigor of the existing practice. These developments concern, in particular, (i) the standard based on which the jurisdiction of the foreign should be examined and (ii) reciprocity.

(i) Regarding the jurisdiction of the foreign court, the new article 222(2)(a) of the 2022 FCPA (which reproduces the formulation of article 85(2)(a) of the 2018 Executive Regulation introduced in 2018) explicitly states that foreign judgments should be refused enforcement if UAE courts “have exclusive jurisdiction over the dispute in which the foreign judgment was rendered” (emphasis added). The new wording suggests that the foreign court’s indirect jurisdiction would be denied only if UAE courts claim “exclusive” jurisdiction over the dispute. Whether this change would have any impact on the enforcement practice remains to be seen. But one can be quite sceptical since, traditionally, UAE law ignores the distinction between “exclusive” and “concurrent” jurisdiction. In addition, UAE courts have traditionally considered the jurisdiction conferred to them as “mandatory”, thus rendering virtually all grounds of international jurisdiction “exclusive” in nature. (See, e.g., the decision of the Abu Dhabi Supreme Court, Appeal No. 71/2019 of 15 April 2019, in which the Court interpreted the word “exclusive” in a traditional fashion and rejected the recognition of a foreign judgment despite the fact that the rendering court’s jurisdiction was justified based on the treaty applicable to the case. But see contra. DCFI, Case No. 968/2020 of 7 April 2021 op. cit. which announces that a change can be expected in the future).

(ii) Regarding reciprocity, it has been widely reported that on 13 September 2022, the UAE Ministry of Justice (MOJ) sent a letter to Dubai Courts (i.e. the department responsible for the judiciary in the Emirate of Dubai) concerning the application of the reciprocity rule. According to this letter, the MOJ considered that reciprocity with the UK could be admitted since English courts had accepted to enforce UAE judgments (de facto reciprocity). Although this letter – which lacks legal force – has been widely hailed as announcing a turning point for the enforcement of foreign judgments in general and English judgments in particular, its practical values remain to be seen. Indeed, one should not lose sight that, according to the traditional position of Dubai courts, reciprocity can be established if the party seeking enforcement shows that the rendering State’s enforcement rules are identical to those found in the UAE or less restrictive (see DSC, Appeal No. 517/2015 of 28 August 2016, op. cit.). For this, the party seeking enforcement needs to prove the content of the rendering Stat’s law on the enforcement of foreign judgments so that the court can compare the enforcement requirement in the state of origin and in the UAE. Dubai courts usually require the submission of a complete copy of the foreign provisions applicable in the State of origin duly certified and authenticated. The submission of expert opinions (e.g., King’s Counsel opinion) or other documents showing that the enforcement of UAE judgments is possible was considered insufficient to establish reciprocity (see DSC, Appeal No. 269/2005 of 26 February 2006, op. cit.). The fact that the courts of the rendering State accepted to enforce a UAE judgment does not seem to be relevant as the courts usually do not mention it as a possible way to establish reciprocity. Future developments will show whether Dubai courts will admit de facto reciprocity and under which conditions.

 

Finally, the complexity of the enforcement of foreign judgments in Dubai has led to the emergence of an original practice whereby foreign judgment holders are tempted to commence enforcement proceedings before the DIFC (Dubai International Financial Center) courts (AKA Dubai offshore courts) and then proceed with the execution of that judgment in Dubai (AKA onshore courts). However, this is a different aspect of the problem of enforcing foreign judgments in Dubai, which needs to be addressed in a separate post or paper. (On this issue, see, e.g., Harris Bor, “Conduit Enforcement”, in Rupert Reed & Tom Montagu-Smith, DIFC Courts Practice (Edward Elgar, 2020), pp. 30 ff; Joseph Chedrawe, “Enforcing Foreign Judgments in the UAE: The Uncertain Future of the DIFC Courts as a Conduit Jurisdiction”, Dispute Resolution International, Vol. 11(2), 2017, pp. 133 ff.)

In FX Claims v Natwest Markets ECLI:NL:RBAMS:2023:1789, the first instance court at Amsterdam has rejected jurisdiction against the non-Dutch incorporated defendants (from the UK, the US, and Switserland) in a follow-on cartel damages case triggered by the European Commission’s decisions re manipulation of Forex Trading (known as Three Way Banana Split, Essex Express, and Sterling Lads, after the chatrooms in which the rigging was organised).

Stichting FX Claims was established by the US law firm that acts as third party litigation funder.

[6.3] the jurisdictional analysis takes place under Brussels IA for the Dutch-incorporated anchor defendant, Lugano II (referred to by the court as EVEXII) for the Swiss-incorporated defendant, and residual Dutch rules for all the others. However other than for the anchor defendant, the test is always the same (Dutch residual PIL instructs (see the Dutch Supreme Court in ‘Moldavia’) the courts to assess the claims using EU rules and CJEU authority): whether the claims against all defendants are so closely connected so that the sound administration of justice suggests it is expedient to hear them together, unless the claim is solely brought for the purpose of taking the defendant concerned away from their natural, domicile jurisdiction. Claimant resorts ia to the economic unit theory from EU competition law (see eg CJEU ENI) to support its anchoring unto a Dutch corporate vehicle of Natwest.

However [6.19] the Dutch Natwest SPV at the time of the infringements was not a direct daughter of the Natwest vehicle to whom the EC Decisions were addressed, and the claimant’s attention to the anchor defendant’s activities in their claim, is far underdeveloped [6.20]. With both the legal and the factual circumstances of anchor defndant being so radically different to those of the other defendants, the court finds [6.23] that the claims against it or not ‘closely related’ let alone so closely related so as to trigger expediency of joinder.

[6.31] Claimant’s argument that the cartelists’ activities concerned the whole of the EEA, including The Netherlands, is found not to suffice to identify Handlungsort (locus delicti commissi) in The Netherlands, neither [6.36] to locate locus damni Erfolgort in The Netherlands (here the court referred to CJEU CDC, flyLAL, and Volvo Trucks: damage needs to be shown for each individual claimant) other than for 3 of the parties represented in the claim, who have their corporate domicile in The Netherlands.

[6.37] a call upon the effet utile of the Damages Directive 2014/104 is rejected for that Directive is held not to include jurisdictional rules.

Finally the Stichting [6.43] attempts to establish jurisdiction under the Dutch forum necessitatis rule, referring to the practical challenges in suing outside the EU, the impossibility for non-EU, including UK courts to refer if need be to the CJEU (compare, in subsidiary fashion, Butcher J in Mercedez-Benz), the high costs involved in claiming in the UK, and, again, the effet utile of the Damages Directive. None of these impress the court which, referring to the need to apply forum necessitatis strictly, referring to there not being a serious suggestion that no fair trial will be guaranteed in the UK, and to the absence in EU statutory law or CJEU authority of a rule that EU competition law claims ought to always be judged by a court in the EU.

The judgment illustrates that much as the anchor defendant mechanism offers interesting opportunities, it cannot be used opportunistically.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.13.1.

1st instance Amsterdam rejects jurisdiction viz most defendants in financial services follow-on cartel damages claim
Claims v anchor defendant found not to be 'related'
Handlungsort, Erfolgort not in NL
No forum necessitatis

FX Claims v Natwest Markets eahttps://t.co/9dwpjVnRzG

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