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Vanessa Barbé (University of Valenciennes) and Christina Koumpli (University of Avignon) are inviting abstracts on The Impact of Brexit on Fundamental Rights and Freedoms for a Virtual Symposium on 27 and 28 May 2021, followed by a publication funded by the Centre for Interdisciplinary Research in Social Sciences and Humanities (CRISS, University of Valenciennes).

Some aspects of the call for papers dealing with rights resulting from the European Civil Justice and the rights of British litigants may be of particular interest for the readers of our blog.

Brexit is a political and legal earthquake with multiple consequences: on the European institutions, on the Member States and their budgets, on international trade, on British administrations and companies, but also on individuals, British or European nationals. The exit of the United Kingdom from the European Union has got a major impact on the fundamental rights and freedoms of individuals. The aim of this symposium is to identify the rights and freedoms which are called into question and to understand the potential and proven upheavals affecting their protection.

The impact of Brexit on rights and freedoms of European originis obvious: theoretically, the United Kingdom isn’t supposed to respect European citizens’ rights, workers’ rights, social rights, European environmental rights…. any longer. Admittedly, the country was already benefiting from an adaptation of its European obligations thanks to the policy selection mechanism (opt-out). But still the United Kingdom was a full member of the Union, applying the free movement of goods, persons, services and capital, and taking part in the Union’s founding policies on the environment or education, for instance. To some extent, the UK has pledged not to wipe out all the rights and freedoms formerly created, but their upholding cannot be total, as this would mean denying Brexit itself. Therefore, it would seem that several categories of rights and freedoms may be identified: those that risk to disappear completely (in relation to citizenship, for example), those that could be maintained because they are protected by other sources (international sources, regional sources such as the European Convention on Human Rights, or British legal sources such as common law), and those the future of which is uncertain, but which might be preserved by virtue of a ‘ratchet effect’ or of the principle of non-regression of rights.

The impact of Brexit on each of the four freedoms of movement might be considered, as well as on the categories of rights resulting from the implementation of the Union’s major policies in the fields of labour law, environmental law, health, education, justice and security in particular. Proposals are expected on the right to security related to the European arrest warrant, the right to privacy with regard to the protection of personal data, the right to non-discrimination in labour law, the right to a healthy environment, the right to asylum, etc… Cross-cutting categories of rights may be identified too, such as the rights of litigants, which can be considered by studying the remedies available to British litigants before domestic courts and European institutions after Brexit. The application of the Charter of Fundamental Rights in the United Kingdom’s legal order after Brexit is also a potential source of litigation, as the Court of Justice of the Union has recognised its applicability to a certain extent despite the opt-out declaration issued by the country.

In addition to rights and freedoms of European origin, British rights and freedoms are going to be affected too. Brexit, as a victory for the opponents of Europe in the broadest sense, might be, to some extent, a new opportunity to challenge the Human Rights Act 1998, the Act transposing the European Convention on Human Rights into British law. The future of that Act is uncertain after Brexit, since its repeal is being thought about, and the United Kingdom’s participation in the Council of Europe is being deeply questioned as well.

The political rights of the British citizens are also at the heart of the exit process. It took more than three and a half years after the referendum of June 23rd, 2016 for Brexit to be legally implemented by the British Parliament. Several ad hoc laws have been passed to delimit the powers of the Government and Parliament. The Supreme Court has been asked twice to rule on constitutional disputes arising from clashes between public authorities, and has been able consequently to assert itself as the third constitutional actor in Brexit. The powers and role of the British citizen/litigant may be usefully studied.

Finally, the territorial structure of the Kingdom is under threat. The border between Northern Ireland and the Republic of Ireland is at the heart of tensions between Europe and the United Kingdom, and with it, the question of the protection of the rights and freedoms of nationals of both States. In the same way, due to Scotland’s opposition to the exit procedure, the issue of the region’s independence is once again on the agenda. The Scottish First Minister Nicola Sturgeon is strongly advocating a new referendum on the independence of the region, which Boris Johnson formally ruled out in a letter of January 14th, 2020, since any (national or local) referendum must be authorised by Westminster. Furthermore, the political rights of the Scots, and their other constitutional rights could be disrupted as well, if the relationship between the region and the rest of the Kingdom was changed.

In conclusion, the symposium aims at exploring the multiple legal consequences, for the British and for European nationals, arising from the exit of the United Kingdom from the European Union.

Proposals for contribution (qualities of the author and short CV, summary of the communication of about one page) may relate to European law, British law, but also Private/ Public International law or the national laws of the Member States of the Union, as far as their relationships with the United Kingdom are considered.

The deadline for submissions is 15 January 2021.

Proposals are expected at the following address: Vanessa.Barbe@uphf.fr.

The new Evidence and Services Regulations were published at the OJEU of 2 December 2020:

__ Regulation (EU) 2020/1783 of the European Parliament and of the Council of 25 November 2020 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters (taking of evidence) (recast)

__ Regulation (EU) 2020/1784 of the European Parliament and of the Council of 25 November 2020 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents) (recast)

They are attached to this post.

evidence-regulation-bisDownload service-regulation-terDownload

The European Commission adopted yesterday (2 December) “a package of initiatives to modernise the EU justice systems. The two main pillars of the new package are the Communication on the digitalisation of justice in the EU, and the new Strategy on European judicial training. This digital justice toolbox aims at further supporting Member States to move ahead their national justice systems towards the digital era and at improving EU cross-border judicial cooperation between competent authorities. As regards European judicial training, the Commission equips judges, prosecutors and justice professionals for the challenges of the 21st century, such as digitalisation. It further aims at promoting a common European judicial culture, based on the rule of law, fundamental rights and mutual trust”.

Extracts of the press release:

__ “Communication on the Digitalisation of Justice in the EU provides a toolbox to promote the use of digital tools by Member States […]:

Making digital the default option in cross-border judicial cooperation: To date, many judicial proceedings, including those that transcend borders, still take place with paper and by post. The European Commission will work on a legislative proposal to digitalise cross-border judicial cooperation procedures in civil, commercial and criminal matters. Adoption is planned for the end of 2021.

[…]

Better access to information: Electronic databases are easy to consult, they minimise costs for users and are resilient to crises. Therefore, Member States should strive to digitalise their registers and work towards their interconnections.

IT tools for cross-border cooperation: e-CODEX (e-Justice Communication via Online Data Exchange) is the main tool for secure cooperation in civil, commercial and criminal law proceedings across borders. To date, only some Member States use e-CODEX. With the adoption of today’s legislative proposal, the Commission aims to make e-CODEX the gold standard for secure digital communication in cross-border judicial proceedings in all Member States. As of 1 July 2023, the Commission entrusts this system to the Agency eu-LISA. Another digital tool is eEDES (e-evidence digital exchange system), which some Member States use to swiftly and securely exchange European Investigation Orders, mutual legal assistance requests and associated evidence in digital format instead of by post. With the legislative proposal adopted today, the Commission encourages all Member States to connect to eEDES. These IT tools will modernise EU justice systems and generate real European added-value”.

__ “EU Strategy on Judicial Training […]: by 2024, 65% of judges and prosecutors and 15% of lawyers shall be trained yearly on EU law. The strategy also supports justice professionals in the Western Balkans and in other EU partner countries, in Africa and Latin America. In addition, justice professionals will be able to look for training courses on EU law via the European Training Platform, launched today for a first test phase and planned to be fully operational in the course of 2021”.

Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_2246

(with further documents)

On 2 December 2020, following a lengthy procedure, the Recast Service Regulation (Regulation (EU) 2020/1784 of 25 November 2020 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters) was finally published in the Official Journal of the European Union (the Position of the Council at first reading in view of the adoption of the Recast had appeared a few days earlier: see it here).

The contents of the Regulation were known, in substance, since an agreement was reached, in June 2020, between the Council and the European Parliament as a result of the trilogue consultations.

Previous posts in this blog illustrated the envisaged innovations and the challenges posed by the recast, and discussed some of the issues raised by the current rules.

The Recast will apply from 1 July 2022.

A book titled International Commercial Arbitration in the European Union, by Chukwudi Ojiegbe, has recently been published by Edward Elgar.

The blurb reads as follows:

This illuminating book contributes to knowledge on the impact of Brexit on international commercial arbitration in the EU. Entering the fray at a critical watershed in the EU’s history, Chukwudi Ojiegbe turns to the interaction of court litigation and international commercial arbitration, offering crucial insights into the future of EU law in these fields. Ojiegbe reviews a plethora of key aspects of the law that will encounter the aftermath Brexit, focusing on the implications of the mutual trust principle and the consequences for the EU exclusive competence in aspects of international commercial arbitration. He explores the principles of anti-suit injunction and other mechanisms that may be deployed by national courts and arbitral tribunals to prevent parallel court and arbitration proceedings. Advancing academic debate on the EU arbitration/litigation interface, this book suggests innovative solutions to alleviate this longstanding and seemingly intractable issue. Arriving at a time of legal uncertainty, this book offers crucial guidance for policymakers and lawyers dealing with the interaction of court litigation and international commercial arbitration in the EU, as well as academics and researchers studying contemporary EU and commercial law.

More information available here.

By Dr Sarah McKibbin

In the recent decision of RCD Holdings Ltd v LT Game International (Australia) Ltd,[1] Davis J of the Supreme Court of Queensland dismissed proceedings brought in breach of an exclusive jurisdiction clause that had been expressed in ‘an arm’s length agreement reached between commercial entities’.[2] In deciding whether to exercise his discretion not to stay or dismiss proceedings, Davis J examined whether procedural disadvantages and ‘inconvenience’ in the jurisdiction nominated in the clause were relevant considerations.

In 2013, the parties entered a contract setting up a scheme to promote a computer betting game at casinos in Melbourne, Nevada and Melbourne.[3] The contract, which was signed and to be partially performed in Australia, included a clause entitled ‘Governing Law’ by which the parties agreed that:[4]

any dispute or issue arising hereunder, including an alleged breach by any party, shall be heard, determined and resolved by an action commenced in Macau. The English language will be used in all documents.

A dispute arose and, notwithstanding the clause, the plaintiffs commenced proceedings in Queensland alleging breaches of the contract in connection with the scheme’s implementation at Crown Casino in Melbourne. The defendant, LT, entered a conditional appearance seeking to strike out the claim or, alternatively, have it stayed based on the exclusive jurisdiction clause. The plaintiffs’ submissions focused on the inconvenience of having to litigate in Macau and the perceived procedural advantages secured by LT in doing so.[5] The plaintiffs further submitted that the COVID-19 pandemic prevented them from commencing proceedings in Macau.[6]

The decision reinforces that ‘strong reasons’[7] are required to enliven the court’s discretion not to grant a stay of proceedings brought in breach of an exclusive jurisdiction clause. This reflects a fundamental policy consideration that ‘“parties who have made a contract should be kept to it”’.[8] Here, the parties differed on the circumstances relevant to the exercise of this discretion.[9] The plaintiffs relied upon the list of circumstances identified by Brandon J in The Eleftheria, which included ‘the relative convenience and expense of the trial’ and ‘[w]hether the plaintiffs would be prejudiced by having to sue in the foreign court’.[10]  As Davis J marked, subsequent English and Australian decisions have questioned the role of procedural disadvantages and inconvenience in the nominated jurisdiction, ‘at least when they are factors which should have been known at the time the exclusive jurisdiction clause was agreed.’[11]

In that respect, Davis J followed the judgment of Bell P in the recent New South Wales Court of Appeal decision of Australian Health & Nutrition Association Ltd v Hive Marketing Group,[12] which endorsed the critical observations of Allsop J in Incitec Ltd v Alkimos Shipping Corp[13] and Waller J in British Aerospace plc v Dee Howard Co.[14] In Incitec, Allsop J perceived ‘financial and forensic inconvenience’ to the party bound by the clause to be the direct consequence of the bargain entered.[15] In a similar vein, Waller J in British Aerospace considered that these factors ‘would have been eminently foreseeable at the time that [the parties] entered into the contract’.[16]

Setting issues of ‘inconvenience’ to one side, however, Davis J attached greater significance to the fact that the parties upon contracting presumably ‘considered the commercial wisdom of agreeing’ to the inclusion of the clause.[17] The factors relied upon by the plaintiffs were in existence and could have been taken into account by the parties at the time of contracting.[18] Indeed, evidence demonstrated that the courts of Macau: (1) could deal with the claim; (2) could provide the remedy sought by the plaintiffs; and (3) would accept court documents in the English language.[19] Issues of inconvenience ‘can hardly be weighty in the exercise of discretion where one party seeks to deny the other the benefit of the covenant.’[20] Finally, Davis J observed that ‘there is little, if any, evidence at all as to the impact of the pandemic upon any litigation in Macau’.[21] Yet, ‘if the pandemic developed so as to effectively prevent, or unduly frustrate’ litigation in Macau, this discretionary consideration would be taken into account together with ‘any other relevant considerations’ in a subsequent application.[22]

[1] [2020] QSC 318.

[2] Ibid, [56].

[3] Davis J observes that ‘[t]he scheme is clearly to be targeted at casinos throughout the world’: at para [7].

[4] RCD Holdings (n 1) [8].

[5] Ibid, [54].

[6] Ibid, [33].

[7] Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 259 (Gaudron J). Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418, 429 (Dawson and McHugh JJ), 445 (Toohey, Gaudron and Gummow JJ).

[8] Ibid, quoted in RCD Holdings (n 1) [57].

[9] Ibid, [58].

[10] Ibid.

[11] See, eg, British Aerospace plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368; Incitec Ltd v Alkimos Shipping Corp (2004) 138 FCR 496, 506; Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419.

[12] Australian Health & Nutrition (n 7).

[13] (2004) 138 FCR 496, 506 [49].

[14] [1993] 1 Lloyd’s Rep 368, 376.

[15] Incitec Ltd v Alkimos Shipping Corp (n 11) 506 [49].

[16] British Aerospace plc v Dee Howard Co (n 12) 376.

[17] RCD Holdings (n 1), [65].

[18] Ibid.

[19] Ibid, [32].

[20] Ibid, [65].

[21] Ibid, [70].

[22] Ibid.

Guest post by Ulla Liukkunen, Professor of Labour Law and Private International Law at the University of Helsinki and Director of the Finnish Center of Chinese Law and Chinese Legal Culture

The International Academy of Comparative Law launched a new open access publication in November 2020. Volume no 1 on the use of comparative law methodology in international arbitration contains articles by Emmanuel Gaillard, Sebastián Partida, Charles-Maurice Mazuy, S.I. Strong, Johannes Landbrecht, Morad El Kadmiri, Marco Torsello, Ulla Liukkunen, Alyssa King, Alexander Ferguson, Dorothée Goertz and Luis Bergolla as well as introductory remarks on the topic by the Secretary-General of the Academy, Diego P. Fernández Arroyo.

The volume no 1 is available on aidc-iacl.org/journal.

 

The article “Chinese context and complexities — comparative law and private international law facing new normativities in international commercial arbitration” was written by Ulla Liukkunen, Professor of Labour Law and Private International Law at the University of Helsinki and Director of the Finnish Center of Chinese Law and Chinese Legal Culture.

 

Professor Liukkunen examines international commercial arbitration from the perspective of Chinese developments, noting that, in global terms, the organization of cross-border dispute resolution is changing as a part of the Belt and Road Initiative (BRI) development. With the BRI, Chinese interest in international commercial arbitration has gained a new dimension as BRI promotes the expansion of Chinese dispute resolution institutions and their international competitiveness.

 

According to Liukkunen, these developments challenge the current narrative of international arbitration. She explores private international law as a framework for unfolding noteworthy characteristics of the Chinese legal system and legal culture that are present in international commercial arbitration and can be linked to an assessment of the role of the BRI in shaping the arbitration regime. A rethink of comparative methodology is proposed in order to promote an understanding of Chinese law in the arbitration process.

 

Moreover, Liukkunen argues that considerations of the Chinese private international law and arbitration regime speak for a broader comparative research perspective towards international commercial arbitration. In the international commercial arbitration frame under scrutiny, we can see the conception of party autonomy placed in a Chinese context where the state is shaping the still relatively young private international law frame for exercise of that freedom and certain institutional structures are advocated where party autonomy is placed. Chinese development underlines the connection between the legal regime of arbitration and endeavours by the state, thereby requiring assessment of party autonomy from the perspective of the regulatory framework of private international law that expresses the complex dichotomy between private and public interests.

 

 

 

 

After the successful first four online seminars on Brussels IIter last week (see previous post on Brussels IIter seminars), we have decided to add a seventh seminar to our series: Child Participation: past research results and the new rules of Brussels IIter, 17 December 2020, 14.00 – 15.15 (after the seminar on provisional measures, transfer and lis pendens, which will end at 13.45). Chair person: Laura Carpaneto, University of Genoa Francesca Maoli, University of Genoa, in collaboration with Tine Van Hof, University of Antwerp Robert Fucik, Austrian Central Authority. Please enrol if you are interested and then we will send the link for the zoom meeting. Persons who have already enrolled for any of the other six sessions can join without having to enrol again.

The facts of the 2021 Pax Moot is available (see https://paxmoot.com/the-case/)! Teams can start registering.

The 2021 Round is named after Arthur von Mehren, a giant of international procedure across the Atlantic.  2021 will mark the 15th year after his passing away. After the adoption of the 2019 Hague Convention (which might prove relevant for the case ;-)) the organisers thought it appropriate to celebrate him in this way.

The pleadings will take pace in April 2021 (the timeline and further information are available on the Pax webpage).

Following a lecture delivered in September 2020 at the Max Planck Institute for Comparative and Private International Law in Hamburg, Giesela Rühl (Humboldt University of Berlin) published a paper on SSRN – Towards a German Supply Chain Act? Comments from a Choice of Law and Comparative Perspective – analysing the project for a legislative proposal expected to shape Germany’s legislation in the field of corporate responsibility.

The project for a Supply Chain Act (Lieferkettengesetz) comes as a response to a second national survey published in July which analysed the implementation of the National Action Plan on Business and Human Rights (NAP). According to the results presented by the Federal Labour Minister Hubertus Heil and Federal International Development Minister Gerd Müller only a few companies are voluntarily taking responsibility to ensure that human rights are respected in their supply chain. Consequently, the coalition considered that the idea of a national supply chain law needs to be pursued. A hearing by the Committee for Human Rights and Humanitarian Aid of the German Bundestag that took place on 28 October 2020 under the leadership of Gyde Jensen (FDP) showed that many experts in Germany are in favour of a Supply Chain Law. Experts from business, politics and society predominantly supported the federal government’s plan for such a law, which is intended to improve compliance with human rights and environmental standards in the global environment.

As the subject remains a hot topic for the German legislator and it will have consequences beyond the German territory, Prof. Rühl’s addresses some of these relevant aspects from a private international law and comparative perspective. The abstract of the paper reads as follow:

The protection of human rights in global supply chains has become one of the most hotly debated issues in public and private (international) law. In a number of countries, including the United Kingdom, France and the Netherlands, these debates have led to the introduction of domestic human rights legislation. In other countries reform plans are under way. In Germany, for example, the federal government recently announced plans to adopt a German Supply Chain Act, which, if passed as suggested, will introduce both mandatory human rights due diligence obligations and mandatory corporate liability pro-visions. The following article takes this announcement as an opportunity to look at the idea of a German Supply Chain Act from both a choice of law and from a comparative perspective. It argues that that any such Act will necessarily be limited in both its spatial and in its substantive reach and, therefore, recommends that Germany refrains from passing national legislation – and supports the adoption of a European instrument instead.

Probably precisely because it would have been obvious, Bobek AG did not refer in the opening lines of his Opinion in C-307/19 Obala v NLB to Groundhog Day, which, following Pula Parking, this case certainly is. He did at 2 summarise why the issue, essentially on the notion of ‘civil and commercial’ under Brussels Ia and the Service Regulation 1393/2007 keeps on coming before the CJEU (this time in no less than 9 long questions):

The crux of the problem appears to be a certain double privatisation carried out by the Croatian legislature at both management and enforcement level. A matter commonly perceived in other Member States to be administrative in nature is entrusted to private entities. The subsequent enforcement of such a claim is also not designed to be a matter for the courts, but rather, at least at first instance, for notaries.

The EC had objected to quite a few questions on the basis that they engaged too much the substance of the case, which the AG disagrees with: at 31 he suggest that inevitably in conflict of laws jurisdictional advice, ‘telescopic analysis of the substance’ is needed.

On the issue of ‘civil and commercial’, Germany and Slovenia submit the origin of the power under which the contract was concluded and which is enforced in this respect that is determinant.  The applicant, the Croatian Government and the Commission take the opposite view: to them, it is not the origin of the power but rather the modalities of its exercise which represent the determinative element for identifying ‘civil and commercial matters’. It is quite extraordinary that we should still not have consensus on this after to many cases, however as I noted in my review of Buak, the divergent emphasis by different chambers of  the Court has not helped.

At 42 ff Bobek summarily revisits the case-law under BIa (he concedes at 53-54 that case-law on other instruments does not add much), concluding at 52 that the CJEU has used both the ‘subject matter’ approach and the ‘legal relationship’ approach, without expressing a preference for either.

At 59 the Advocate-General opts for the ‘legal relationship’ approach, arguing that path ‘most reliably performs the function of the figurative railroad switch point guiding the dispute from one procedural track to another in search of the ‘right’ institutional path in a Member State at the preliminary stage of jurisdiction’. That path is also the one which as I point out in my review of Buak, was followed by the Second (which includes President Lenaerts, the chair of conflict of laws at Leuven prior to my immediate predecessor, Hans van Houtte) and not the First Chamber:

The Second chamber (K. Lenaerts, A. Prechal, Toader, Rosas and Ilešič in Buak, focus on Sapir which was issued by the third Chamber, comprising at the time Toader (Rapporteur), Ilešič, Jarašiūnas, Ó Caoimh,  Fernlund. Toader and Ilešič are the common denominator with judment in BUAK. Sapir has focus also firstly on the legal relationship between the parties to the dispute, but secondly the basis and the detailed rules governing the bringing of the action (not: the to my knowledge never applied Eurocontrol criterion of ‘subject matter’ of the action).

At 66 the AG offers ‘pointers’ within the ‘nature of the legal relationship’ approach which he believes may be of assistance to any public power assessment:

‘(i) start with the legal relationship which characterises the dispute; (ii) assess it against the framework generally applicable to private parties; and (iii) establish whether the dispute arises from a unilateral exercise of public powers outside that normal private ‘reference framework’.’

which applied to the case at issue, he concludes at 87, leads to a finding of there not appearing to be an exercise of public powers.

I conclude my overview of ‘civil and commercial’ at para 2.65 of the third ed of the Handbook (forthcoming February 2021) with

the acte clair doctrine (meaning that national courts need not refer to the CJEU when the interpretation of EU law is sufficiently clear either by virtue of that law itself or following CJEU interpretation in case-law) implies that national courts by now ought to have been given plenty of markers when applying this condition of application of the Brussels I and Recast Regulation. Except of course the acte might not be that clair at all, as the above overview shows.

Bobek AG seems to have a similar end in mind: at 65: there is no unicorn, a truly autonomous interpretation of ‘civil and commercial’.

The Opinion continues with the classic themes of whether notaries are courts, and a firm opinion that leaving your car in a public parking space provokes contractual relations.

Geert.

European Private International Law, 3rd ed. 2021, paras 2.28 ff concluding at 2.65.

Groundhog day? Bobek AG this morning seems to think so: on the notion of 'civil and commercial' (and 'contract') in Brussels Ia, jurisdictional matters relating to a parking ticket enforced by notaries in Croatia. Again.
Obala v NLB https://t.co/N5aDJgTWfs pic.twitter.com/tEHROvHr4V

— Geert Van Calster (@GAVClaw) November 26, 2020

The author of this post is Franz Kaps, Lawyer at DL Piper, Frankfurt am Main.

To stop the spread of the COVID-19 (Coronavirus) pandemic governments closed ports and “non-essential businesses”, restricted travel and imposed “lockdowns” or “stay-at-home” orders. In cases where the COVID-19 pandemic or government measures disrupt commercial contracts, it is necessary to carefully analyze the state of affairs to determine the appropriate remedy. A considerable number of articles have already been written on contracts affected by the COVID-19 pandemic, and now it is time to summarize the legal situation for commercial contracts in the most important jurisdictions in a nutshell. This post therefore presents remedies for commercial contracts affected by COVID-19, under the laws of the countries whose systems are most commonly chosen to be applied to commercial contracts, and the CISG.

UK, Hong Kong, Singapore Force Majeure

Force majeure is principally a matter of contract law in the common law jurisdictions England, Hong Kong and Singapore. Whether a force majeure clause is applicable in a particular situation and its consequences depends primarily on the wording of the force majeure clause. A clause modelled, for example, on the 2020 ICC force majeure clause (long form), presumes that an epidemic is a force majeure event; pandemics such as COVID-19 are not expressly mentioned, therefore it will be for the arbitral tribunals and courts to interpret the term “epidemic” under no. 3 (e) ICC to encompass pandemics.

The burden of proof is on the party invoking the force majeure clause as defense. Such a party has to demonstrate that a force majeure event occurred and that it had the stipulated effect on the contractual performance. If a party invokes a force majeure clause in a commercial contract, it releases the party from its contractual obligations when circumstances beyond its control have prevented, hindered or delayed its performance.

In case the COVID-19 pandemic falls within the scope of the force majeure clause, parties should carefully examine whether there are other relevant contractual terms affecting the application of the clause – in particular, whether there are any requirements to notify the other party before invoking the clause.

Frustration

Besides force majeure clauses, the main common law doctrine with potential relevance to the discharge of obligations in the light of unforeseen events – like the COVID-19 pandemic – is frustration. According to it, a contract may be discharged upon the occurrence of an unforeseeable event that either renders the contractual obligation impossible or radically changes the basis upon which the contract was reached. However, it should be noted that the doctrine of frustration has a very limited scope.

Germany Impossibility

Pursuant to Section 275 German Civil Code (BGB) a party is not required to perform its obligations to the extent that performance is impossible. Section 275 German Civil Code applies not only if performance of the obligation is technically or legally impossible, but also in cases where performance is still technically and legally possible, but would require expenses and efforts which, considering the subject matter of the obligation and the requirements of good faith, would be grossly disproportionate to the creditor’s interest of performance. In addition, Section 275 German Civil Code governs temporary impediments, i. e. a claim for performance is excluded as long as performance is impossible. However, German courts respect the legal principle pacta sunt servanda and hence apply Section 275 German Civil Code narrowly, in order not to undermine the agreed contractual obligations.

Frustration of Purpose

The doctrine of “frustration of purpose” (German Störung der Geschäftsgrundlage) can be invoked in cases affected by the COVID-19 pandemic. Frustration of purpose under Section 313 German Civil Code will apply where the balance between performance and counter-performance of a contract is significantly changed in a way that was not foreseeable by the parties when the contract was concluded. Such a “frustrated contract” entitles the disadvantaged party to request the amendment of the contract. If an amendment of the contract is not possible or unreasonable, the disadvantaged party may rescind or terminate the contract. According to case law the principle of “contractual loyalty” requires a strict interpretation of Section 313 German Civil Code.

France Force Majeure

Article 1218 French Civil Code addresses the concept of force majeure. According to its Article 1218 , the debtor’s performance is prevented by a force majeure event if three cumulative criteria are met:

1. The event must be beyond the control of the debtor;
2. It must be an event which could not reasonably have been foreseen at the time of the conclusion of the contract; and
3. The effects of the event could not be avoided by appropriate measures.

The legal consequence of Article 1218 French Civil Code is that if performance of the obligation is temporarily prevented, it is suspended unless the delay justifies termination of the contract. In the event of permanent prevention, the contract is terminated by operation of law and the parties are discharged from their obligations.

Hardship

The recently introduced Article 1195 French Civil Code requires renegotiation of a contract if circumstances which were unforeseeable at the time of conclusion of the contract render performance excessively onerous for a party which had not accepted to bear that risk. If renegotiations fail, the parties may agree to terminate the contract, or request a court to revise or terminate the contract.

Switzerland

Swiss law has no statutory provision for force majeure events. In the absence of a force majeure clause in a contract, the applicable legal regime depends on whether the performance of the contract is impossible.

Pursuant to Article 119, 62 Swiss Code of Obligations, the impossibility to perform a contract – due to circumstances not attributable to the debtor – releases both parties from their obligations to perform and leads to the unwinding of the contract according to the rules of unjust enrichment.

In case the impossibility to perform the obligation lasts only for a limited time, the default provisions of Article 107 to 109 Swiss Code of Obligations apply. They provide that if one party is in default, the other party may set an appropriate time limit for the performance. If no performance is rendered during such a time limit, the other party may terminate the contract.

When the performance of a contract is not entirely impossible, but has become extremely onerous, a party may rely on the legal doctrine clausula rebus sic stantibus. It must be a situation which is not only extremely onerous but was also unforeseeable when the contract was concluded. In such circumstances, the parties may agree to amend or terminate the contract. Should one party insist that the contract remains unchanged, the other party may refer the matter before a court. If the requirement of clausula rebus sic stantibus are fulfilled, the court may order an amendment or the termination of the contract.

United States

U.S. contract law is ordinarily a matter of state law. I will focus on New York law, as it is the most commonly chosen by commercial parties to govern their contracts.

Contractual Force Majeure Clauses

Force majeure clauses are contractual provisions that may excuse a party’s non-performance when circumstances beyond the control of a party prevent performance. New York courts have held that force majeure clauses are to be interpreted in a narrow sense and that performance under a contract is ordinarily excused only if the event preventing performance is explicitly mentioned in the force majeure clause.

Subsidiary Solutions

In the absence of a force majeure clause, the common law doctrines of impossibility, impracticability and “frustration of purpose” may excuse performance.

The doctrine of impossibility excuses a party’s performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible. The impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract. Impossibility is therefore a narrow legal doctrine.

The doctrine of impracticability is similar to the doctrine of impossibility, but it is more flexible in its application. According to the doctrine of impracticability, a failure to perform contractual obligations is excused, if a party’s performance is made impracticable without its fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made. Courts have generally applied the doctrine of impracticability conservatively.

Frustration of purpose is a common law doctrine that excuses a party’s performance under a contract when an unforeseen event renders the contract “virtually worthless” to the affected party. Although a literal performance under the contract is still technically possible, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense. The threshold of the doctrine of frustration of purpose is high, because performance of the contract must be economically impossible.

United Nations Convention on Contracts for the International Sale of Goods (CISG)

The CISG is applicable to contracts for the sale of goods between parties who have their place of business in different states, if these states are contracting states or if the rules of private international law lead to the application of the law of a contracting state and the CISG was not expressly excluded in the contract.

Strict Liability

Contracts for the supply of goods under the CISG are governed by the strict liability of the debtor. It is therefore irrelevant for the liability of the debtor whether they are responsible for the improper performance or the non-performance of their contractual obligation.

Exemption of Liability

In order to mitigate the strict liability of the debtor, Article 79 CISG provides for an exemption from the debtor’s liability if the failure to perform any of their obligations is due to an impediment beyond their control. It is additionally required that they could not reasonably be expected to have taken the impediment into account at the time of conclusion of the contract or to have avoided or overcome the impediment or its consequences. Article 79 CISG is advantageous to the seller. If the non-performance of an obligation to deliver is based on a force majeure event, the seller is released from the obligation to perform the contract for the period of the impediment. Also, the seller is not obliged to pay damages, because the performance is prevented by the force majeure event. However, pursuant to Article 79 para. 4 CISG the seller must inform the buyer of the impediment and its effects on their ability to perform within a reasonable period of time after they have or should have become aware of the impediment. Otherwise, they are liable for damages resulting from such non-receipt. The burden of proof that a contractual obligation was not performed or was delayed as a result of the COVID-19 pandemic lies with the debtor.

International practice accepts epidemics as being beyond the debtor’s typical sphere of control. Consequently, the COVID-19 pandemic could constitute a minore ad maius an impediment beyond control according to Article 79 CISG. Whether the COVID-19 virus exempts debtors from their obligation to perform the commercial contract depends on the individual case, since it requires a causal link between the impediment and non-performance.

Takeaway

The impact the COVID-19 pandemic will have on the parties’ commercial contracts depends primary on the wording of their force majeure clause. In case of a force majeure event, the arbitral tribunals and the courts grant the terms of a commercial contract precedence over the applicable law. If a commercial contract does not contain a force majeure clause, or if does not cover pandemics, the applicable laws determine the available remedies. The remedies and requirements under the applicable law for commercial contracts affected by the COVID-19 pandemic differ. National laws have in common that legal doctrines which amend or terminate contractual agreements are narrowly construed. The underlying consideration is that arbitral tribunals and courts are only exceptionally authorized to “rewrite” the contractual obligations of the parties. It is therefore decisive whether the contractual provisions comprise a force majeure clause covering the COVID-19 pandemic. Against this backdrop parties should commercial evaluate – based on the facts of each case – their options to invoke a force majeure defense or to perform, amend, or terminate their commercial contracts.

In light of the high thresholds for a force majeure defense under the applicable law, it is essential to ensure legal certainty by including a force majeure clause in commercial contracts which clearly encompasses epidemics and pandemics. In particular, the party that would be affected by an epidemic or pandemic in the performance of its contractual obligations should assure that such events are expressly referred to in their force majeure clause, to ensure a balanced distribution of risks. Whether the situation is one of an epidemic or a pandemic should be determine by an objective criterion: a declaration by the World Health Organization would be useful to decide when the events under examination trigger the force majeure consequences.

Good starting point for future “tailor-made” force majeure clauses in commercial contracts is the balanced 2020 ICC force majeure proposal. Moreover, as in our globalized world, the next epidemic or pandemic will spread sooner or later, a lege artis force majeure clause must cover epidemics and pandemics.

Conventions & Instruments

On 2 November 2020, Jamaica deposited its instrument of accession to the HCCH 1961 Apostille Convention. It now has 119 Contracting Parties and will enter into force for Jamaica on 3 July 2021. More information is available here.

On 4 November, the Permanent Bureau was informed that on 26 October 2020, Saint Kitts & Nevis deposited its instrument of accession to the HCCH 1993 Adoption Convention. It now has 103 Contracting Parties and will enter into force for Saint Kitts & Nevis on 1 February 2021. More information is available here.

Meetings & Events

From 12 to 13 November 2020, the HCCH, together with the UNIDROIT and UNCITRAL, co-hosted the 2020 International Conference of the Judicial Policy Research Institute (Rep. of Korea) on International Commercial Litigation. A full recording of the event is available here.

From 16 to 19 November 2020, the Experts’ Group on Jurisdiction met for the fourth time, via videoconference. The meeting focused on the elements to be included on a possible future instrument on direct jurisdiction and parallel proceedings. More information is available here.

Following last month’s Roundtable on the 2019 Judgments Convention co-hosted by the HCCH and the University of Bonn (a pre-cursor to the September 2021 Conference), a full recording of the event is available here.

Publications & Documentation

On 24 November 2020, the Permanent Bureau launched the post-event publication of the inaugural edition of HCCH a|Bridged, of which the focus was the Service Convention in the Era of Electronic and Information Technology. The publication is now available for download in English only. 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.

On 29 October 2o20, the University of Bonn and the HCCH co-hosted a video roundtable on the HCCH 2019 Judgments Convention.This video roundtable explored the prospects of the Convention from a particular perspective, and this was the perspective of the relations between the EU and third states: neighbouring states, trade partners in particular, but also other states. The organisors were very happy to have received a large number of registrations from all over the world and from all areas of interest. The event was also meant to prepare the “main conference” of the organisors on the Convention, which is planned to be taking place at the University of Bonn on site on 13 and 14 September 2021. The recording of the pre-conference video roundtable is now available on the HCCH’s youtube channel as well as here.

For those of us who read German: Jayme and Hausmann have just published the 20th edition of their collection of PIL norms on German national, EU and international level. The book has grown considerably in volume over the decades and has particularly done so for its latest edition – from 1441 to now 1537 pages. An indispensable working tool – even in times of the internet.

This book is devoted to the applicable law to contractual and non-contractual obligations in the European Union as applied before the Courts. It should be a valuable resource for practitioners, the judiciary, and academics who are interested in understanding how EU law is applied on national level. The Rome I and II Regulations are meant to provide for uniform conflict-of-laws rules. In theory, all national courts of EU Member States (excluding Denmark) apply the same rules determining the applicable law. Rome I and Rome II in Practice examines whether the theory has been put into practice and assesses the difficulties that may have arisen in the interpretation and application of these Regulations. The book contains a general report by the editor and a number of national reports.

 

This book is an article-by-article ‘German-style’ commentary on the Rome I, II and III Regulations on European Union (EU) conflict of laws. It describes and systematically explains black letter law as applied by the Court of Justice of the EU (CJEU) and the Member State courts.

Access to justice is not a new topic. Since Mauro Cappelletti and Bryant Garth’s survey of different methods to promote access to justice was published (Access to Justice. A World Survey (Giueffre SIJTHOFF 1978), making access to justice cheaper and effective has become a legal policy (see for instance The Right Honourable the Lord Woolf report on Access to Justice, 1996). One of Cappelletti and Garth’s ideas was that there were three waves of access to justice. The third wave, called ‘The Access to Justice Approach’, stated that arbitration would play a significant role in fomenting access to justice. The idea was that people would seek alternatives to the regular court system.  Arbitration has grown exponentially since the publication of Cappelletti and Garth’s work, reaching disputes that were traditionally only decided by courts. The guarantee of adequate access to justice is now generating questions about the impact of this expansion. For purely commercial arbitration, such as one between two multinational companies represented by multinational law firms, waiving some rights of access to justice might not create a problem to the fairness in the arbitral procedure. However, in a dispute in which the inequality of bargaining power is evident, for arbitration to be fair and a trustworthy sustainable dispute resolution method, waiving rights to access to justice might not be the best way forward.

With the above ideas in mind, this book aims at presenting a collection of studies about access to justice in arbitration to present, for the first time, in one single title, an analysis of the role access to justice plays in arbitration. The book makes a unique contribution to the current international research and practice of arbitration as it looks at the conceptual contribution to the notion of access to justice in arbitration; and it provides a picture of how access to justice works in various types of arbitration. In five parts, the book will show the concerns about access to justice in arbitration, how they are materialised in a practical scenario and finally, how it is applied in arbitral institutions.

The book’s first part brings a conceptual contribution to the notion of access to justice in arbitration and deals with theoretical and conceptual gaps in this area. Leonardo V.P. de Oliveira starts with a conceptual analysis of access to justice and how it should be applied in arbitration. Clotilde Fortier looks at consent as the central part of arbitration and how it relates to access to justice. Joao Ilhão Moreira examines if arbitration can provide a fair, independent and accessible dispute resolution mechanism outside large contractual disputes and Ramona Elisabeta Cirlig assesses the interaction between courts and arbitral tribunals as a guarantor of access to justice.

The second part of the book discusses two specific points in investment disputes. Berk Dermikol looks at the possibility of bringing an autonomous claim based on the NYC in investment treaty arbitration as a form of access to justice. Crina Baltag evaluates the issue of access to justice and non-disputing parties – amici curiae– in investment law and arbitration.

In the third part, access to justice in specific types of disputes submitted to arbitration is scrutinised. Carolina Morandi presents a case study of access to justice in labour and employment arbitration in light of the Brazilian and the US experiences. Ian Blackshaw looks at how sports disputes submitted to CAS have been dealing with the question of access to justice. Johanna Hoekstra and Aysem Diker Vanberg examine access to justice with regards to competition law in the EU with a view to determine whether arbitration can lower barriers. Lastly, Youseph Farah addresses the use of unilaterally binding arbitration as a mechanism to improve access to justice in business-related human rights violations.

Part four reports on two aspects of technology and access to justice. Mirèze Philippe looks at ODR as a method to guarantee access to justice whilst Sara Hourani investigates how Blockchain-based arbitration can be used to improve access to justice.

Lastly, the book presents the view of how two arbitral institutions deal with the question of costs and access to justice, and how the rules of one arbitral institution provide access to justice guarantees. Aislinn O’Connell assesses access to justice under WIPO’s Arbitration Rules whilst Christine Sim examines costs at SIAC and Duarte Henriques and Avani Agarwal do the same in relation to ICSID.

The University of Lyon (EDIEC-CREDIP) hosted a webinar (in French) under the title Situations in Motion : Debate on the Method, now available for online viewing.

Jean-Sylvestre Bergé (University of Côte d’Azur and French University Institute, IUF) presented his research project on Situations in motion and the Law, soon to be published in Q1 2021 (Dalloz). The webinar was co-chaired by Ludovic Pailler (University of Lyon) and Cyril Nourissat (University of Lyon) and organised by Marie Brossard and Véronique Gervasoni.

More details here.

I am a bit late with a post as a follow-up to my Tweet, below, re the Supreme Court’s judgment in Highbury Poultry Farm Produce Ltd, R (on the application of) v Crown Prosecution Service [2020] UKSC 39. Thankfully, the judgment is of more than fleeting relevance. It is also a good example of the structured approach to legal argument, its discussion in scholarship and its engagement with the parties’ legal arguments which will be missed post Brexit.

A poultry slaughterhouse was being accused of breaching Regulation 1099/2009 on the protection of animals at the time of killing – the same Regulation at stake in the CJEU Shechita proceedings.

Core issue in the case is whether the EU law at issue implies a requirement for mens rea (criminal intent) in the ability for Member States to discipline its breach. If no means rea is required, the law is one of strict liability.

At 14 Lord Burrows makes the point that the Regulation at issue left it to the Member States to determine the sanctions rolled-out by national law to ensure compliance with the Regulation. Had a Member State decided to deploy civil sanctions only, that would have been fine: criminal law enforcement was not necessary. What follows is a good summary of the authority on means of UK and EU statutory interpretation, with in the case at issue particular emphasis on the impact of recitals: at 51: an unclear recital does not override a clear article.

Conclusion after consideration of the Regulation (the only stain on the analysis being the lack of linguistic input (a fleeting reference at 32 only), given the CILFIT authority on equal authenticity)): that all animals which have been stunned must be bled by incising at least one of the carotid arteries or the vessels from which they arise, is formulated by the Regulation as an obligation of strict liability under EU law. Hence its effet utile requires that Member States that opt for enforcing it via criminal law, employ strict liability in that enforcement.

Reference to the CJEU was neither sought nor seriously contemplated.

Geert.

 

UKSC upholds strict liability
No means rea required, for infringement of EU animal welfare provision Reg 1099/2009, a classic in cases involving stunning of animals
Important observations on requirement of effet utile when imposing criminal sanctions
No CJEU reference: acte clair https://t.co/zydLZUeYop

— Geert Van Calster (@GAVClaw) October 16, 2020