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Earlier in the year, Associate Professor Jeanne Huang reported on the Australian Information Commission’s action against Facebook Inc in the Federal Court of Australia. In particular, Huang covered Australian Information Commission v Facebook Inc [2020] FCA 531, which concerned an ex parte application for service outside of the jurisdiction and an application for substituted service.

In April, Thawley J granted the Commission leave to serve the first respondent (Facebook Inc) in the United States, and the second respondent (Facebook Ireland Ltd) in the Republic of Ireland. Through orders for substituted service, the Commission was also granted leave to serve the relevant documents by email (with respect to Facebook Inc) and by mail (with respect to Facebook Ireland Ltd).

Facebook Inc applied to set aside the orders for its service in the United States, among other things. Facebook Ireland appeared at the hearing of Facebook Inc’s application seeking equivalent orders, although it did not make submissions.

On 14 September, Thawley J refused that application: Australian Information Commissioner v Facebook Inc (No 2) [2020] FCA 1307. The foreign manifestations of Facebook are subject to the Federal Court’s long-arm jurisdiction.

The decision involves an orthodox application of Australian procedure and private international law. The policy represented by the decision is best understood by brief consideration of the context for this litigation.

The Australian Information Commission is Australia’s ‘independent national regulator for privacy and freedom of information’, which promotes and upholds Australians’ rights to access government-held information and to have their personal information protected.

Those legal rights are not as extensive as equivalent rights enjoyed in other places, like the European Union. Australian law offers minimal constitutional or statutory human rights protection at a federal level. Unlike other common law jurisdictions, Australian courts have been reluctant to recognise a right to privacy. Australians’ ‘privacy rights’, in a positivist sense, exist within a rough patchwork of various domestic sources of law.

One of the few clear protections is the Privacy Act 1988 (Cth), (‘Privacy Act’), which (among other things) requires large-ish companies to deal with personal information in certain careful ways, consistent with the ‘Australian Privacy Principles’.

In recent years, attitudes towards privacy and data protection seem to have changed within Australian society. To oversimplify: in some quarters at least, sympathies are becoming less American (ie, less concerned with ‘free speech’ above all else), and more European (ie, more concerned about privacy et al). If that description has any merit, then it would be due to events like the notorious Cambridge Analytica scandal, which is the focus of this litigation.

Various manifestations of Australian governments have responded to changing societal attitudes by initiating law reform inquiries. Notably, in 2019, the Australian Competition and Consumer Commission (‘ACCC’) delivered its final report on its Digital Platforms Inquiry, recommending that Australian law be reformed to better address ‘the implications and consequences of the business models of digital platforms for competition, consumers, and society’. The broad-ranging inquiry considered overlapping issues in data protection, competition and consumer protection—including reform of the Privacy Act. The Australian Government agreed with the ACCC that Australian privacy laws ought to be strengthened ‘to ensure they are fit for purpose in the digital age’. A theme of this report is that the foreign companies behind platforms like Facebook should be better regulated to serve the interests of Australian society.

Another important part of the context for this Facebook case is Australia’s media environment. Australia’s ‘traditional’ media companies—those that produce newspapers and television—are having a hard time. Their business models have been undercut by ‘digital platforms’ like Facebook and Google. Many such traditional media companies are owned by News Corp, the conglomerate driven by sometime-Australian Rupert Murdoch (who is responsible for Fox News. On behalf of Australia: sorry everyone). These companies enjoy tremendous power in the Australian political system. They have successfully lobbied the Australian government to force the foreign companies behind digital platforms like Google to pay Australian companies for news.

All of this is to say: now more than ever, there is regulatory appetite and political will in Australia to hold Facebook et al accountable.

Against that backdrop, in March 2020, the Commission commenced proceedings against each of the respondents in the Federal Court, alleging ‘that the personal information of Australian Facebook users was disclosed to the This is Your Digital Life app for a purpose other than the purpose for which the information was collected, in breach of the Privacy Act’.

The Commissioner alleges that:

1. Facebook disclosed the users’ personal information for a purpose other than that for which it was collected, in breach Australian Privacy Principle (‘APP’) 6;
2. Facebook failed to take reasonable steps to protect the users’ personal information from unauthorised disclosure in breach of APP 11.1(b); and
3. these breaches amounted to serious and/or repeated interferences with the privacy of the users, in contravention of s 13G of the Privacy Act.

In April, the service orders reported by Huang were made. Facebook Inc and Facebook Ireland were then served outside of the jurisdiction.

Facebook Inc contended that service should be set aside because the Court should not be satisfied that there was a prima facie case for the relief claimed by the Commissioner as required by r 10.43(4)(c) of the Federal Court Rules 2011 (Cth).

The Court summarised the principles applicable to setting aside an order as to service as follows (at [23]):

• An application for an order discharging an earlier order granting leave to serve out of the jurisdiction, or for an order setting aside such service, is in the nature of a review by way of rehearing of the original decision to grant leave to serve out of the jurisdiction.
• It is open to the party who sought and obtained an order for service out of the jurisdiction to adduce additional evidence, and make additional submissions.
• The onus remains on the applicant in the proceedings to satisfy the Court in light of the material relied upon, including any additional material relied upon, that leave ought to have been granted.

Facebook Inc accepted that although demonstrating a prima facie case is ‘not particularly onerous’, the Commissioner had failed to establish an arguable case; she had merely posited ‘inferences’ which did not reasonably arise from the material tendered: [28]-[29].

As noted above, the underlying ‘case’ that was the subject of that argument is in relation to the Cambridge Analytica scandal and alleged breaches of the Privacy Act.

The case thus turns on application of an Australian statute to seemingly cross-border circumstances. Rather than having regard to forum choice-of-law rules, the parties seemingly accepted that the case turns on statutory interpretation. The extra-territorial application of the Privacy Act depends on an organisation having an ‘Australian Link’. Section 5B(3) relevantly provides:

(3) An organisation or small business operator also has an Australian link if all of the following apply: …

(b) the organisation or operator carries on business in Australia or an external Territory;

(c) the personal information was collected or held by the organisation or operator in Australia or an external Territory, either before or at the time of the act or practice.

Facebook Inc argued that the Commissioner failed to establish a prima facie case that, at the relevant time, Facebook Inc:

• carried on business in Australia within the meaning of s 5B(3)(b) of the Privacy Act; or
• collected or held personal information in Australia within the meaning of s 5B(3)(c) of the Privacy Act.

In Tiger Yacht Management Ltd v Morris (2019) 268 FCR 548 (noted here), the Full Court of the Federal Court of Australia ‘observed that the expression “carrying on business” may have a different meaning in different contexts and that, where used to ensure jurisdictional nexus, the meaning will be informed by the requirement for there to be sufficient connection with the country asserting jurisdiction’: [40].

The Court considered the statutory context of the Commissioner’s case, being the application of Australian privacy laws to foreign entities. The Court had regard to the objects of the Privacy Act, which include promotion of the protection of privacy of individuals and responsible and transparent handling of personal information by entities: Privacy Act s 2A(b), (d). Whether Facebook Inc ‘carries on business in Australia’ for the purposes of the Privacy Act is a factual inquiry that should be determined with reference to those broader statutory purposes.

The Commissioner advanced several arguments in support of the proposition that Facebook Inc carries on business in Australia.

One argument advanced by the Commissioner was that Facebook Inc had financial control of foreign subsidiaries carrying on business in Australia, suggesting that the parent company was carrying on business in Australia. (Cf Tiger Yacht, above.) That argument was rejected: [155].

Another argument turned on agency more explicitly. Essentially, the Commissioner sought to pierce the corporate veil by arguing Facebook is ‘a single worldwide business operated by multiple entities’: [75]. Those entities contract with one another so that different aspects of the worldwide business are attributed to different entities, but the court ought to pierce the jurisdictional veil. The Commissioner submitted that ‘the performance pursuant to the contractual arrangements by Facebook Inc of functions necessary for Facebook Ireland to provide the Facebook service…, including in Australia, indicated that Facebook Ireland was a convenient entity through which Facebook Inc carried on business in Australia during the relevant period’: [115].

Facebook Inc appealed to cases like Adams v Cape Industries [1990] 1 Ch 433, where the English Court of Appeal explained that, typically, a company would not be considered to be carrying on business within the forum unless: ‘(a) it has a fixed place of business of its own in this country from which it has carried on business through servants or agents, or (b) it has had a representative here who has had the power to bind it by contract and who has carried on business at or from a fixed place of business in this country’ (at 529). (See also Lucasfilm Ltd v Ainsworth [2008] EWHC 1878 (Ch).)

Ultimately, the Court was not satisfied that Facebook Inc carried on business within Australia on the basis that Facebook Ireland conducted Facebook Inc’s business in Australia: [117]. More accurately, the Commissioner had not established a prima facie case to that effect.

But the Commissioner had established a prima facie case that Facebook Inc directly carried on business within Australia.

Facebook Inc is responsible for various ‘processing operations’ in relation to the Facebook platform, which includes responsibility for installing, operating and removing cookies on the devices of Australian users. Facebook Inc appealed to case authority to argue that this activity did not amount to carrying on business in Australia. The Court thus considered cases like Dow Jones v Gutnick (2002) 210 CLR 575 and Valve Corporation v Australian Competition and Consumer Commission (2017) 258 FCR 190, which each addressed the territorial aspects of businesses that depend on communication on the internet.

The Court rejected Facebook Inc’s argument that ‘installing’ cookies is to be regarding as equivalent to uploading and downloading a document (cf Gutnick). At the interlocutory stage of the proceeding, there was not enough evidence to accept Facebook Inc’s claim; but there was enough to draw the inference that the installation and operation of cookies within Australia involves activity in Australia.

The Court concluded: ‘the Commissioner has discharged her onus of establishing that it is arguable, and the inference is open to be drawn, that some of the data processing activities carried on by Facebook Inc can be regarded as having occurred in Australia, notwithstanding that the evidence did not establish that any employee of Facebook Inc was physically located in Australia’: [137]. It was thus concluded that the Commissioner had established a prima facie case that Facebook Inc carried on business within Australia: [156]. (Cf the reasoning of Canadian courts that led to Google Inc v Equustek Solutions Inc [2017] 1 SCR 824, noted here.)

The Court was assisted by responses provided by Facebook Inc to questions of the Commissioner  made pursuant to her statutory powers of investigation. One question concerned the location and ownership of servers used to provide the Facebook service. Although Facebook Inc’s answer was somewhat equivocal, it suggested that the platform depends on servers located in Australia (including network equipment and caching servers) to improve connection and delivery time. This was enough for the Court to make the relevant inference as to collection and holding of personal information within Australia: [170].

The Court had regard to the purposes manifested by the Explanatory Memorandum to the Privacy Act in concluding that ‘the fact that the personal information is uploaded in Australia and stored on Australian users’ devices and browser caches and on caching servers arguably owned or operated by Facebook Inc in Australia, it is arguable that Facebook Inc collected the personal information in Australia’: [185].

Combined with the findings as to carrying on business, this was enough to establish a prima facie case that the extra-territorial application of the Privacy Act was engaged. The Court’s orders as to service were not disturbed.

The interlocutory character of this decision should be emphasised. The Court’s findings on the territorial aspects of ‘carrying on business’ and data collection were each subject to the ‘prima facie case’ qualification. These are issues of fact; the Court may find differently after a thorough ventilation of evidence yet to be adduced.

This decision is not anomalous. The assertion of long-arm jurisdiction over Facebook Inc indicates Australian courts’ increasing willingness to pierce the jurisdictional veil for pragmatic ends. In my experience, most Australian lawyers do not really care about the multilateralist ideals of many private international law enthusiasts. The text of the Australian statutes that engage the case before them is paramount. Lawyers are directed to consider the text of the statute in light of its context and purpose: Australian Securities and Investments Commission v King (2020) 94 ALJR 293, [23]; Acts Interpretation Act 1901 (Cth) s 15AA. Essentially, in the case of a forum statute with putative extraterritorial operation, a form of interest analysis is mandated.

I am OK with this. If the policy of the Privacy Act is to have any chance of success, it depends on its application to internet intermediaries comprised of corporate groups with operations outside of Australia. As an island continent in a technologically interconnected world, the policy of Australian substantive law will increasingly determine the policy of Australian private international law.

Michael Douglas is Senior Lecturer at UWA Law School and Consultant at Bennett + Co, Perth.

The author of this post is Omar Vanin. He earned a Phd in Private International Law from the University of Padova and is now in private practice.

On 7 August 2020, the Italian Supreme Court (Corte di Cassazione) ruled on the non-recognition of a judgment whereby a Palestinian religious court had acknowledged the severance of the matrimonial ties between a muslim couple, on the ground that the judgment offended the public policy of Italy (the ruling is numbered as follows: No 16804/20; the text has not yet been officially published by the Court, but it’s available here through the website Cassazione.net).

Proceedings were brought by a woman of Italian and Jordanian nationality against the recording in Italy of a judgment rendered, on an application by her husband, by the Sharia court of Western Nablus (West Bank). The husband had repudiated the woman in accordance with Islamic law, and the Sharia court, taking note of the repudiation (talaq), had certified that the couple had ceased to be bound by marriage.

The woman argued that the judgment was at odds with the public policy of Italy. She submitted, first, that Islamic law, as applied in the West Bank, failed to provide equal rights to the spouses in relation to divorce, and, secondly, that the she was not given an opportunity to present her case in the proceedings which resulted in the judicial declaration.

The man, for his part, claimed that talaq merely constituted a process of revocable separation, and that the judgment was passed after an unsuccessful attempt by the Sharia court to reconcile the couple.

Islamic law sees marriage as a contract. Talaq is one of the grounds on which marriage may be terminated.

The traditional view is that only the husband is entitled to have the marital ties severed by means of repudiation.

Developments have occurred in this area in several Islamic jurisdictions. In some of them, the wife may seek to have the marriage terminated through a declaration by the competent (religious) authority, based on a breach of the husband’s obligations towards her.

Concurrently, marriage termination is losing its ‘contractual’ features, and rather represents, in some jurisdictions, the outcome of a judicial procedure.

Against this backdrop, a case-by-case analysis may prove necessary to assess whether, in the circumstances, the authorities involved merely attested a unilateral termination prompted by the husband or rather declared such termination based on their own independent assessment.

The Cassazione held that, in the case at issue, the basic procedural rights of the wife had been violated. Indeed, the woman did not take part in the proceedings instituted by her husband before the Sharia court, in the framework of which he irrevocably repudiated his wife.

In fact, the woman was notified of the procedure after the judgment was given, and only to enable the court to ascertain that no reconciliation had occurred in the three months following the decision.

In addition, the Cassazione ruled that the judgment was also incompatible with the substantive public policy of Italy, since talaq could only be exercised by the male spouse, thus violating the principle of equality of rights between husband and wife enshrined both in the Italian Constitution and in various international instruments in force for Italy, such as Protocol No. 7 to the European Convention on Human Rights.

By the described ruling, the Cassazione took a stance on a topic that lower courts in Italy have been discussing for several years. Prior to this judgment, the Court itself had relatively few opportunities to address the matter, the latest of which dates back to 1983.

The conclusion reached by the Supreme Court, namely that traditional talaq is inconsistent with public policy, accords with the Court’s own precedents and with most lower courts’ judgments. In fact, the reasoning of the Cassazione echoes, to a large extent, the reasoning of several among such lower courts.

In various respects, the views expressed by the Cassazione are in line with those expressed, often in a more nuanced way, in other European countries.

In 2014, for instance, the French Cour de Cassation denied the recognition of an Algerian judgment acknowledging the unilateral repudiation of an Algerian wife by an Algerian husband on the ground that it contravened the principe whereby the spouses enjoy equal rights as regards the termination of marriage.

The Cour de Cassation had previously granted effect to judgments rendered as a result of talaq, through the doctrine of ‘mitigated’ public policy. The latter doctrine posits that, in appropriate circumstances, foreign judgments offending as such public policy may nevertheless be granted recognition to the extent to which their authority is merely invoked as a basis for a different claim, one that is not, per se, inconsistent with public policy (e.g., a claim for spousal support based on the termination of marriage through talaq).

Eventually, the Cour de Cassation abandoned this line of thought in 2004, stressing the radical incompatibility of talaq with a paramount principle of the French legal system such as gender equality.

The question remains debated in France, among scholars, of whether a milder solution ought to be adopted where to deny recognitin would preclude the wife from enjoying some important benefits (see in general, among recent contributions available on the web, this paper by Yann Heyraud).

Note, incidentally, that the concept of ordre public atténué is not necessarily followed everywhere. The Italian Supreme Court, for example, has never explicitly endorsed the doctrine of attenuated effects in respect of talaq or other legal institutions.

Greek courts, for their part, have expressed the view that talaq judgments ought to be denied recognition on grounds of public policy. Recently, however, lower courts admitted the recognition of of such judgments in cases where an application to that effect was lodged by the wife herself (see further the chronicle and remarks by Apostolos Anthimos here).

The position taken by the Italian Supreme could hardly be criticised in itself. The Court’s reasoning, however, is unpersuasive in at least two passages.

To begin with, the Cassazione failed to take a clear stance on the nature of talaq in a situation where a foreign judicial authority is involved in the process. Arguably, the issue has repercussions on the methods through which the severance of matrimonial ties may be given effect in Italy. If the severance of those is understood to be produced by a judicial decision (i.e., one based on an assessment by the authority in question, following the husband’s declaration), its effectiveness in Italy depends on whether the conditions for the recognition of such a foreign decision are met in the circumstances. Instead, if talaq is labelled as a contractual act (i.e., as a declaration of the husband that the competent judicial authority is merely required to attest, e.g., for publicity reasons), then its effects in Italy would depend on whether the act in question was performed in accordance with the law specified under the pertinent Italian conflict-of-laws rules. Of course, public policy may prevent a talaq from producing effects in Italy in both scenarios, but the question remains of whether the issue of its should be addressed against the background of the rules on the recognition of judgments rather than those on the conflicts of laws. In some cases, the conditions required under the applicable rules may not be fulfilled, which would make any inquire into public policy useless.

In the case at issue, the Cassazione observed that the Sharia court of Western Nablus simply took note of the repudiation, without carrying out, properly speaking, any assessment. The Court, however, failed to elaborate on the implications of such a characterisation for the identification of the relevant methods and rules of private international law, and in fact contented itself with noting that the decision ought to be denied recognition on grounds of public policy.

The second questionable passage in the Supreme Court’s ruling is a general remark whereby a foreign judgment declaring the severance of matrimonial ties ought to be denied recognition on grounds of public policy unless such a judgment is based on, or at least implies, a finding that the bond of affection between the spouses has irretrievably come to an end.

Doubts may be raised as to the pertinence of the latter requirement. As a matter of fact, even Italian courts do not inquire into the reasons why the spouses may be seeking divorce, when pronouncing the dissolution of marriage under Italian law.

The Court of Justice delivered today its judgment in case C‑540/19 (WV v Landkreis Harburg) which is about Article 3 (b) of the Maintenance Regulation. The decision should have a clear practical impact: « A public body which seeks to recover, by way of an action for recovery, sums paid in place of maintenance to a maintenance creditor, and to which the claims of that maintenance creditor against the maintenance debtor have been transferred by way of subrogation, may validly invoke the jurisdiction of the court for the place where the creditor is habitually resident, as provided in Article 3(b) of Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations”.

Source: http://curia.europa.eu/juris/document/document.jsf?docid=231185&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=EN&cid=2561617

AG  Saugmandsgaard Øe delivered last week (10 September 2020) his opinion in case C‑59/19 (Wikingerhof GmbH & Co. KG contre Booking.com BV), which is about Brussels I bis. The opinion is currently available in selected EU official languages only (such as German and Spanish). It is not available in English. Here is the French version (to check whether an English translation has finally been made available, just click on the link below and change the language version):

“L’article 7, point 2, du règlement (UE) no 1215/2012 du Parlement européen et du Conseil, du 12 décembre 2012, concernant la compétence judiciaire, la reconnaissance et l’exécution des décisions en matière civile et commerciale doit être interprété en ce sens qu’une action en responsabilité civile fondée sur la violation des règles du droit de la concurrence relève de la « matière délictuelle ou quasi délictuelle », au sens de cette disposition, y compris lorsque le demandeur et le défendeur sont parties à un contrat et que les prétendus agissements anticoncurrentiels que le premier reproche au second se matérialisent dans leur relation contractuelle ».

Source : here

The new Uruguayan General Law of Private International Law has passed the Senate and will now be submitted to the House of Representatives. This means that a project that was initiated in 1994 by Didier Opertti Badán will finally come to fruition. ASADIP’s blog provides a note by Cecilia Fresnedo that lays out, in Spanish, the arduous path that the project took between 1994 and now. It is also possible to download the draft legislation.

Despite its small size, Uruguay has long been one of the leaders of private international law in Latin America, and has been highly regarded worldwide. Cecilia Fresnedo reported on the project last year at a conference on the role of academia in Latin American private international law at the Max Planck Institute; she has written on Uruguayan Private International Law – Past and Future in the Festschrift for Herbert Kronke that came out earlier this year. The 2016 draft of the law is here; an  appreciation by José Antonio Tomás Ortíz de la Torre is here.

I reported earlier on the jurisdictional issues in BNP Paribas SA v Trattamento Rifiuti Metropolitani SPA [2020] EWHC 2436 (Comm) . In current judgment the issue of interest to the blog is the possibility of res judicata /issue estoppel on  the substance of the claim as a result of arguments made in the jurisdictional challenge.

The issue is an important one given the English (potentially other States’) courts’ inclusion of a ‘serious issue to be tried’ test in which the judge has to decide to ‘much the better of the argument’ standard at the jurisdictional gateway level. While aimed at determining jurisdiction, this inevitably engages with some discussion on the merits.

Cockerill J is justifiably cautious in accepting much estoppel, given the clear separation between jurisdictional and substantial discussions. I do feel she might have pointed out the relevance of the case being heard under Brussels Ia rules as opposed to residual English rules. Under the former, a certain amount of merits engagement may be required for some jurisdictional gateways as discussed repeatedly on the blog (and in the jurisdictional rulings there was clearly a lot of engagement with the facts, to establish Article 25 consent for choice of court). But there can certainly not be a ‘serious issue to be tried’ condition for the substance of the case, in the jurisdictional gateways of BIa (summary dismissal proceedings are an entirely different matter).

Geert.

Discussion on res judicate /issue estoppel and abuse of process in relation to earlier judgments upholding jurisdiction of the English courts – which I discuss here https://t.co/mn3rGYTttG

— Geert Van Calster (@GAVClaw) September 11, 2020

Ioannis Revolidis, a lecturer at the University of Malta and a visiting lecturer at the Frederick University Cyprus, has recently published a book in Greek, based on his PhD thesis, on jurisdiction and the Internet.

The author has provided the following summary:

This monograph, which is the first of its kind to appear in Greek literature, examines the problem of allocation of jurisdiction in case of Internet-related disputes under the Brussels Ia Regulation. After an introduction into the meaning and practical ramifications of the phenomenon of international jurisdiction, it tries to identify the dogmatic depth of the Brussels Ia Regulation in order to form arguments on how Internet-related disputes can optimally be tackled in terms of international jurisdiction. In order to create an appropriate dogmatic background, the book also examines the particularities of the Internet culture.

In a more specific part, it examines the rules of international jurisdiction related to digital consumer disputes, digital contractual disputes, and digital non-contractual disputes (personality rights and intellectual property rights) under the Brussels Ia Regulation, coming to the conclusion that the existing rules can appropriately be applied within the Internet context, provided that they will be dogmatically adapted to the particular needs that are created through The Internet culture.

The publication is part of an ambitious project launched by Paris Arvanitakis (Aristotle University, Thessaloniki), and Dimitrios Kranis (former General Director at the Hellenic School of Judges) to cover a gap in domestic bibliography, by initiating a special series of studies in European Private / Procedural Law.

Is a national procedural provision determining who can act as a party to the proceedings capable of temporarily preventing the return of a child ordered within the framework of the HCCH 1980 Child Abduction Convention? This question has been recently answered in the affirmative, as illustrated by the recent developments in a case being currently under scrutiny of both the Polish Constitutional and Supreme Courts.

Context of the case…

A child is born in Poland. Soon after her birth, her mother takes her to Belgium where the child’s father lives. The couple separates when the girl is one year old. The woman and her daughter return to Poland.

A procedure conducted within the framework of the HCCH 1980 Child Abduction Convention is pending before a Polish District Court since December 2017. By its decision of January 2018, the District Court orders the return of the child. An appeal against the decision is dismissed by a Regional Court in June 2018.

After the expiration of a delay for the voluntary return of the child, the father lodges an application for a forced return. The application succeeds and the proceedings for the enforcement of the return are initialized. The return of the child, however, does not happen.

As we learn from media coverage of the case at hand, in November 2019, a Belgian court grants exclusive parental care to the father. In what can only be considered as a sudden and tragic event, the day before that ruling was delivered, the child’s mother had passed away. From then on, the girl’s grandmother takes care of her.

The child’s grandmother lodges an application to join the proceedings in which the decisions of January and June 2018 were adopted. In parallel, she lodges an application to join the proceedings on the enforcement of the return. It is being argued that the grandmother is the child’s closest known relative and her factual caretaker and as such she fulfills the requirements needed to be considered as an ‘interested person’ within the meaning of Article 510(1) of the Polish Code of Civil Procedure. According to that provision ‘[a]n interested person is anyone whose rights are affected by the outcome of proceedings; such person may join the case at any stage before it is closed at second instance. On joining the case an interested person becomes a party. An order refusing to allow an interested person to join the case may be appealed’.

The application to join the proceedings in which the decisions of January and June 2018 were handed down is dismissed in January 2020. It is decided that the grandmother lacks ‘legal interest’ to join the proceedings as the outcome of these proceedings does not concern her rights. The appeal brought against this decision is dismissed in June 2020.

… brought before the Constitutional Court …

The grandmother’s legal counsels lodge a constitutional complaint before the Polish Constitutional Court. Under Polish law, a constitutional compliant allows to challenge a provision that served as a basis for a final decision on the applicant’s freedoms, rights or obligations specified in the Constitution and to request a determination of that provision’s non-conformity with the Constitution.

In the constitution complaint in question, the grandmother’s counsels are challenging the aforementioned Article 510(1) of the Polish Code of Civil Procedure. They argue that by not allowing for the participation in the proceedings of the child’s grandmother, her relative and sole factual caretaker, this procedural provision violates, inter alia, the applicant’s dignity (Article 30 of the Polish Constitution), right to legal protection of her family life (Article 47 read in conjunction with Article 18 of the Constitution according to which ‘family’ – alongside ‘marriage’, ‘motherhood’ and ‘parenthood’ – shall be placed under the protection and care of the Republic of Poland) as well as the right to a fair trial not barring access to legal protection enshrined in Articles 45(1) and 77(2).

According to the statement of reasons for the complaint, the procedural provision in question is preventing the grandmother from initiating proceedings allowing to determine her rights and from being heard within the proceedings initiated at the request of other applicants. Against this background, while the decision of June 2018 is final, in its judgment of 22 November 2017, III CZP 78/17, the Polish Supreme Court considered that even a final decision ordering the return of a child may be amended, if the best interests of the child concerned so require. It is however unclear whether this is exactly the legal route that the child’s grandmother is intending to take.

The constitutional complaint is not directly arguing that the aforementioned procedural provision violates Article 72 of the Polish Constitution which serves as an equivalent of the ‘child’s best interest clause’ known from legal instruments (still, one should keep in mind that the grandmother is the applicant, not the child). Yet, alongside the Charter of Fundamental Rights of the EU [see its Article 24(2)] and Article 3(1) of the UN Convention on the Rights of Children, Article 72 is invoked in the statement of reasons for the complaint.

Interestingly, in the constitutional complaint, the applicant’s counsels are asking for a suspension of the execution of the decision of January 2018 by which the return of the child was ordered. According to the Act of 30 November 2016 on the Organisation of the Constitutional Court and the Mode of Proceedings Before the Constitutional Court and – more precisely – its article 79(1), ‘[the Constitutional Court] may issue a provisional decision about the suspension of the execution of a determination in the case with regard to which a constitutional complaint has been lodged with the [Court], if the execution of a judgment […] could cause irreversible consequences resulting in serious damage for the complainant, or when the said suspension is justified by an important public interest or a different important interest of the applicant’.

In the reported case, the counsels argue that the return of the child would lead to irreversible consequences for the applicant. Irrespectively of the outcome of the constitutional complaint, the return of the child would provoke a total destruction of her family life in its present form. Given the profound emotional relation with the child, the child’s return would be an intolerable damage to the applicant’s dignity and integrity as human being. Moreover, according to the counsels, an important public interest also pleads in favour of the suspension. The child is deeply integrated in her social and family environment and she does not speak the language her father uses, while the latter does not speak Polish.

By its order handed down in late August 2020, the Constitutional Court suspends the enforcement of the decision ordering the return of the child to Belgium, at least until the final ruling on the constitutional complaint is delivered in the case now enregistered under no. SK 76/20.

… as well as before the Supreme Court

While it is not the object of our main interest here, it is worth noticing that back in June 2020, an ‘extraordinary complaint’ was introduced by the General Public Prosecutor against the decision handed down by the Regional Court in June 2018.

An ‘extraordinary complaint’, introduced back in 2018, may be lodged by the selected public authorities before the Supreme Court to challenge a final judgment.

As we learn from the press release of the Prosecutor’s office, the ‘extraordinary complaint’ at hand seemingly challenges the decision of June 2018 on account of incorrect assessment of the Regional Court that the return of the child would not result in a psychological harm and not place her in an intolerable situation. That arguably incorrect assessment lead to a manifestly incorrect application of Article 13(b) of the HCCH 1980 Child Abduction Convention. Moreover, it seems that it is being argued that a child’s return can be ordered only after a thorough examination of the child’s situation and the exclusion of circumstances in which there would be a serious risk that the return of the child would expose him/her to physical or mental harm or otherwise place him/her in an intolerable situation. Failing such examination, an order violates the constitutional incarnation of ‘child’s best interest clause’ (Article 72 of the Polish Constitution).

This post has been written by Vincent Richard, Senior Research Fellow at the MPI Luxembourg, Department of European and Comparative Procedural Law.

On 14 August 2020, the Luxembourg government introduced a bill before the Parliament aiming to introduce a collective redress procedure (file 7650) into Luxembourg Law.

This objective was set out in the coalition agreement of 2018 where the Democratic Party, the Luxembourg Socialist Workers’ Party and The Greens defined the policy outline for the  following five years.

The government’s intention is firstly to set up a collective redress mechanism for violations of consumer law and secondly to extend it afterwards to other areas such as environmental law, unlawful discriminations, abuse of dominant position and unfair competition.

While inspired by the proposal for a European directive on representative actions for the protection of the collective interests of consumers, the bill had been finalised before an agreement was reached by the European Parliament and Council negotiators (reported here). The text of the bill may therefore evolve to reflect the latest progress of the EU negotiations.

The collective redress scheme proposed so far is heavily inspired by the corresponding mechanisms adopted in France and Belgium. The procedure is divided into three phases with a first judgment on admissibility, a second one assessing the professional’s liability and an enforcement phase to allocate compensation.

The whole procedure takes place before the district court of Luxembourg and it can be initiated by a single consumer or a qualified entity. The first interesting aspect of the proposal is that qualified entities are not only Luxembourg and European consumer organisations but also non-profit organisations or a sectorial regulatory authority such as the banking sector regulator or the Data Protection Commission. For the action to be declared admissible, individual consumers and qualified entities must show that they have legal expertise and sufficient financial and human resources to adequately represent several consumers. They will also need to prove that a collective redress is more efficient than a typical individual action. Time will tell how much of an obstacle these thresholds will constitute. If the action is financed by a third party, the court has to verify that this third party is not a competitor of the professional and that it may not influence decisions taken by the representative. If the claim is declared admissible, the court rules on the publicity of the judgment and the procedure enters its second phase.

The second phase starts with a mandatory meeting between the representative and the professional where parties must decide if they want to resort to mediation. The bill is quite detailed on this mediation process which may be conducted by specially approved mediators. Mediation last six months and parties may ask the court to extend this delay by another six months. If an agreement is reached, it has to be approved by the court. If there is no agreement, the procedure continues before the court for a ruling on the professional’s liability.

This judgment on liability is a two parties’ procedure between the professional and the representative where the latter may ask for injunctive and compensatory relief. The court rules on the liability of the professional and on the criteria for the constitution of the group of consumers. As is the case in Belgium, the group may be constituted via an opt-in or an opt-out procedure. The opt-out procedure may not be used to compensate bodily harm or moral damages. Opt-out is also excluded if the group involves consumers located outside of Luxembourg which may be a significant limitation in practice. In the judgment on liability, the court also rules on the publication of the judgment, on the time limit given to consumers to opt-in or out and on the time limit given to the professional to compensate the group. Finally, the court decides whether it is necessary to appoint an administrator to handle the enforcement of the judgment.

If enforcement is not handled directly by the professional, it is conducted under the supervision of an administrator who is paid by the professional. A supervising judge is appointed to handle procedural issues related to enforcement. At the end of the enforcement process, the administrator submits a report to the supervising judge who must approve it to bring the proceedings to an end. If a consumer belonging to the group has not been compensated, the supervising judge refers their individual claims to the court.

As it stands now, the bill is rather well drafted and it could have a real impact on the Luxembourg legal landscape. Although it is hard to be very optimistic when considering the relative failure of collective redress in France, Belgium and more generally in Europe, Luxembourg may have some encouraging distinctive features. The country hosts the seats of some of the biggest companies in Europe and it features a dense network of highly creative lawyers. Besides, if full contingency fees are forbidden under the ethical rules of the Luxembourg Bar Association, success fees whereby a limited part of the lawyers’ fees depends upon the result of the litigation are possible. Third party litigation funding is also allowed in Luxembourg and expressly taken into account in the collective redress bill. The main areas of concern are, on one hand, the potential length of the procedure considering that each phase gives rise to a judgment that could be appealed and, on the other hand, the overall cost of such actions.

The bill still needs to receive opinions from the Conseil d’État, professional associations and the main consumer organisation before public debate takes place in Parliament. Readers of this blog will be informed in due course of the content of the law once it becomes final.

The Law Amending the Civil Procedure Law and Certain Laws No. 7251 has entered into force on 28 July 2020 and has amended the Consumer Protection Law No. 6502. Accordingly, a mandatory mediation process has been implemented under Article 73/A of the Consumer Protection Law as a prerequisite to file a lawsuit relating to consumer disputes having a monetary claim of 10,390 Turkish Liras and above. Provisional Article 2 of the Consumer Protection Law excludes the application of this mandatory mediation rule to cases pending before the first instance and the regional courts of appeal as well as the Court of Cassation, as of the date of entry into force of this amendment.

The amendment in the Consumer Protection Law further envisages exceptions to the said mandatory mediation process. Pursuant Article 73/A/2 of the Consumer Protection Law, disputes within the competence of consumer arbitration tribunals and the objections made against the decisions of the tribunal, interim injunctions, disputes regarding the suspension of production or sales of goods or recalling of the goods from the market and disputes having a nature of a consumer transaction and arising from rights in rem in relation to a immovable property are not subjected to this mandatory mediation process. It is important to add that pursuant Consumer Protection Law certain consumer disputes are envisaged to be resolved through a mandatory consumer arbitration process.

Under Turkish law, a mandatory mediation condition has also been envisaged relating to commercial disputes and certain employment disputes. In relation to commercial disputes, Turkish Commercial Code Article 5/A is the relevant piece of legislation. It is clearly regulated under this article that as of 01.01.2019, completing the mandatory mediation process prior to court proceedings is a prerequisite for the commercial disputes relating to receivables and compensation of a sum. Relating to employment disputes, the relevant piece of legislation regarding the prerequisite of mediation is the Law on Labour Courts numbered 7036. Pursuant Article 3/1 of the said law, in relation to legal disputes relating to employee or employer receivables, compensation and reemployment based on law or individual or collective bargaining agreements, having applied to the mediation process prior to court proceedings is regulated as a prerequisite. This procedural requirement does not apply to pecuniary and non-pecuniary compensation claims arising from work accident or occupational disease and declaratory and recourse actions as well as objections related to such claims pursuant Article 3/3 of the Law on Labour Courts.

It is also important to note that pursuant Article 18/A/11 of the Law on Mediation in Civil Disputes, in the event that the mediation process is ended due to the absence of one of the parties in the first meeting without a valid excuse, that party shall be liable from the costs of litigation; whilst the attorney fees cannot be claimed from the other party even where this party eventually partially or completely succeeds in the relevant case. Nevertheless, in relation to consumer disputes, the recent amendment under the Consumer Protection Law envisages an exception under Article 73/A and provides that where the consumer does not attend the first meeting of the mediation process without a valid excuse he/she shall not be liable of the legal costs and the fees of his/her attorney can be collected from the other party where he/she receives a judgement in his/her favour.

Pursuant the lex fori principle, where a dispute involving a foreign element is brought before a Turkish court, the prerequisite of having completed the mandatory mediation process shall be fulfilled pursuant the aforementioned laws in relation to consumer, commercial and employment disputes. Where the parties fail to fulfill this prerequisite and initiate court proceedings in the absence of a pre-trial mediation process, the case will be dismissed with no further action pursuant Article 18/A/2 of the Law on Mediation in Civil Disputes.

Written by Danilo Ruggero Di Bella,
attorney-at-law (Bottega DI BELLA), member of the Madrid Bar and the Canadian Institute for International Law Expertise (CIFILE)

The USA is a Contracting Party to the 1965 Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (the “Hague Service Convention”, which it ratified in 1967. The Hague Service Convention is a multilateral treaty whose purpose is to simplify, standardize, and generally expedite the process of serving documents abroad, thus it plays a central role in international litigation. The Hague Service Convention specifies several allowed methods of service to provide due notice of a proceeding in one Contracting State to a party in another.
The primary method (and main alternative to service through diplomatic channels) — laid out in Articles 2 to 7 of the Convention — is via a designated Central Authority in each Contracting State. When a Central Authority receives a request for service, it must serve the documents or arrange for their service. This method is usually faster than service through diplomatic and consular agents (which remain available under Article 8 of the Convention), along with the possibility that two or more Contracting States may agree to permit channels of transmission of judicial documents other than those provided for in the Convention.
Further, at Article 19 the Convention clarifies that it does not preempt any internal laws of its Contracting States that permit service from abroad via methods not otherwise allowed by the Convention. Thus, it could be argued that a sort of favor summonitio (borrowed by the principle of favor contractus) permeates the entire instrument, in that the Convention strikes a fair balance between the formal notice of a proceeding and the validity of an effective summon in favor of the latter, to allow for swift international litigations. Indeed, another fast method of service expressly approved by the Convention is through postal channels, unless the receiving State objects by making a reservation to Article 10(a) of the Convention. This is considered the majority view shared by multiple jurisdictions. However, in the United States different interpretations existed on this point, because Article 10(a) of the Convention does not expressly refer to “service” of judicial documents (it instead uses the term “send”). Consequently, it was an unsettled question whether Article 10(a) encompassed sending documents by postal channels abroad for the purpose of service, until the US Supreme Court has been called to interpret this instrument.
US Supreme Court’s interpretation of Article 10(a) of the Hague Service Convention
The USA did not make any reservation objecting to service by mail under Article 10 of the Convention. In Water Splash, Inc. v. Menon, 581 U.S. ___ (2017), the US Supreme Court pronounced itself on Article 10(a) of the Hague Service Convention to resolve these conflicting views, according to some of which the Convention was to be read as prohibiting service by mail.
After a detailed contextual treaty interpretation and also a comparison of the text with the French version (equally authentic), the US Supreme Court found that that Article 10(a) unmistakably allows for service by mail. The Supreme Court further clarified that “this does not mean that the Convention affirmatively authorizes service by mail.” It held that “in cases governed by the Hague Service Convention, service by mail is permissible if two conditions are met: first, the receiving state has not objected to service by mail; and second, service by mail is authorized under otherwise-applicable law.” This means that it is not The Hague Service Convention to authorize service by mail, but it must be the lex fori to do so (the Convention simply permits service by mail). So, where the Convention applies, it is not enough to make sure that a summon effectuated abroad is valid under the Convention just because that foreign jurisdiction allows for service by international registered mail. It further must be ascertained that the jurisdiction in which the case is pending authorizes service by mail requiring a signed receipt. However, by a simple reading of the US Federal Rules of Civil Procedure, it is possible to note how this set of rules misunderstood the scope of The Hague Service Convention.

The US Federal Rules of Civil Procedure and the Hague Service Convention
In cases pending before a US federal court where the Hague Convention applies and where the foreign jurisdiction (in which the defendant resides or is registered) allows for service by mail, the plaintiff – who serves the defendant abroad – should further wonder whether US Federal law authorizes serving the defendant in a foreign country by mail.
Rule 4 of the Federal Rules of Civil Procedure (FRCP), dealing with summons, answers this question. In particular, Rule 4(h)(2) FRCP deals with serving a corporation abroad by remanding to Rule 4(f) FRCP, which in turn deals with serving an individual. So, the same rule applies to serving either an individual or a corporation abroad. Rule 4(f)(1) FRCP makes express reference to the Hague Service Convention:
“(f) Serving an Individual in a Foreign Country. Unless federal law provides otherwise, an individual—other than a minor, an incompetent person, or a person whose waiver has been filed—may be served at a place not within any judicial district of the United States:
(1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;”
However, as stated by the US Supreme Court in Water Splash, Inc. v. Menon, the fact that Article 10(a) of the Hague Service Convention encompasses service by mail does not mean that it affirmatively authorizes such service. Rather, service by mail is permissible if the receiving State has not objected to service by mail and if such service is authorized under otherwise-applicable law.
Probably, the words “[…]as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;” in Rule 4(f)(1) FRCP should be more correctly rephrased with “[…]as those allowed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;” in order to be in line with the jurisprudence of the US Supreme Court.
So, as Rule 4(f)(1) FRCP does not provide the final answer, the plaintiff needs to look at Rule 4(f)(2)(C)(ii) FRCP, which expressly authorizes the use of any form of mail that requires a signed receipt.
Hence, in cases pending before a federal US court where the Hague Service Convention applies and the receiving states permits service by mail, a plaintiff may serve a company or an individual abroad by means of international registered mail by virtue of Rule 4(f)(2)(C)(ii) FRCP (rather than Rule 4(f)(1) FRCP remanding to The Hague Service Convention). Consequently, the FRCP should be amended to avoid further misunderstandings as to the scope of application of the Hague Service Convention by replacing the word authorized with the term allowed at Rule 4(f)(1).

Article 27/A of Law on Civil Registry Services provides an exception to the recognition and enforcement regime under Turkish law. Foreign decisions that shall be subjected to the recognition process envisaged under Article 27/A of the Law on Civil Registry Services are specified as those relating to divorce, annulment or nullity of a marriage or a declaratory action to show the existence or non-existence of a marriage. In this regard, the decisions relating to custody, child maintenance, marital property or compensation shall not be given any effect pursuant this new process under Article 27/A of Law on Civil Registry Services. “Regulation on Registration of Decisions Rendered by Administrative or Judicial Authorities to Civil Registry” (Regulation) further stipulates conditions required for a divorce decision to be recognised pursuant this new process.

For the realisation of the recognition under this process, the foreign decision on the aforementioned subject matters, shall be final and rendered by a duly authorised administrative or judicial authority. Where the foreign divorce decision is manifestly contrary to Turkish public policy, it shall not be recognised. Finally, there shall not be any ongoing legal proceedings or dismissed claims relating to the decision which is subjected to recognition pursuant Article 27/A of the Law on Civil Registry. Where the conditions under Article 27/A are not fulfilled and hence the registration request at the civil registry is denied, recognition proceedings may be initiated before Turkish courts pursuant the Turkish Private International Law and International Civil Procedure Code (PIL Code).

When compared with the recognition and enforcement regime under the PIL Code, two significant differences are particularly noticed. Firstly, through this new process the foreign decision is given an affect outside of the court proceedings, though a direct amendment made at the civil registry provided that the aforementioned conditions are fulfilled. In order to be able to make the amendment regarding their civil status, the parties, their legal representors or attorneys shall apply to the civil registrar either together or separately provided that there shall not be more than 90 days between the separate applications of each party or their representatives.

Secondly, the administrative decisions may also be recognized in Turkey pursuant this process. In principle, pursuant Article 50 of the PIL Code, there needs to be a court decree as a pre-requisite for recognition of a foreign decision and thus, the administrative decisions will not be recognised in Turkey. Indeed, prior to Article 27/A being implemented, foreign divorce decisions rendered by foreign municipalities were refused to be enforced in Turkey. Non-recognition of foreign municipality decisions caused criticism amongst Turkish legal scholars. Whilst this exception regarding recognition of administrative decisions under Article 27/A of the Law on Civil Registry is considered as a positive development certain issues are open for discussion. Amongst the issues that raised doctrinal discussions are the appeal procedure regarding the registration made at the civil registry made pursuant this process and the interpretation of public policy exception by the civil registrar bearing in mind that Turkish statutory sources do not provide a definition for Turkish public policy and that interference of public policy requires a complex legal reasoning. Finally, the legal nature of the process under Article 27/A is also argued as to whether it may be considered as a recognition decision in its technical sense.

A series of webinars devoted to the Conventions of the Hague Conference on Private International Law will be offered from 16 to 18 September by the the Supreme Court of the Philippines, the Philippine Judicial Academy and the Department of Foreign Affairs of the Philippines.

Speakers include Christophe Bernasconi, Secretary General of the Hague Conference, Philippe Lortie, First Secretary of the Conference, and Ning Zhao, Senior Legal Officer at the Conference’s Permanent Bureau.

See here for more information available.

The editorial team in charge of the EAPIL blog is delighted to announce that a new editor has joined the team.

Her name is Anna Wysocka-Bar, and she teaches Private International Law at the Jagiellonian University in Kraków.

Her first post has just been published.

Welcome on board, Anna!

The Polish periodical Problemy Współczesnego Prawa Międzynarodowego, Europejskiego i Porównawczego (Review of International, European and Comparative Law – PWPM) launched an international competition for original papers in the field of international law, European law or comparative law, written in English by scholars aged 35 or less.

The deadline for submissions is 15 November 2020.

The winning papers will be published on the journal  and the authors of the two best articles will receive cash prizes of 500 and 300 Euros, respectively. 

On a more general note, the journal is currently calling for paper from any scholars to be published in  volume XVIII (2020), which will be out in Spring 2021. Here, again, the deadline is 15 November 2020. 

PWPM is one of the leading legal periodicals in Poland. It is a peer-reviewed, open-access academic journal based at the Institute of European Studies of the Jagiellonian University in Kraków. While focuses on international, European and comparative law, the journal also covers other areas of law, including private international law.

More details on the competition and the journal are available here.

An action brought between parties to a contract in a scenario where the consent to at least some of the contractual terms was allegedly expressed by the plaintiff only on account of the dominant position of the defendant is to be considered as falling within the concept of ‘matters relating to contract’ [Article 7(1) of the Brussels I bis Regulation] or within the concept of ‘matters relating to delict or quasi-delict’ [Article 7(2) of the Regulation]?

In his Opinion delivered last Thursday, 10 September 2020, Advocate General Saugmandsgaard Øe addresses that question for the purposes of the reference for a preliminary ruling in the case C-59/19, Wikingerhof.

Legal and factual context

A company established under German law and operating a hotel in this Member State, Wikingerhof GmbH & Co KG, signs a contract with Booking.com BV, a company which its registered office in the Netherlands that operates a hotel reservation platform. On the basis of the contract, the hotel is to be listed on that platform. The general terms and conditions that are supposed to apply to the contract contain a clause according to which the place of jurisdiction for all disputes arising from that contract, with the exception of payment and invoice disputes, is Amsterdam.

Wikingerhof brings and action for cessation against Booking.com before German courts and argues that it expressed its consent to at least to some of the contractual terms only on account of the dominant position of the defendant. The plaintiff views some of the practices of the defendant in connection with hotel reservation intermediation as an infringement of competition law. It seeks an order restraining the defendant from carrying on with these practices.

The defendant objects, inter alia, to the jurisdiction of the courts seised in the matter. The first instance court agrees and rules the action inadmissible. It considers that the parties have concluded an agreement conferring jurisdiction and as a consequence the action should have been brought before the courts in Amsterdam.

The second instance court dealing with an appeal brought by the plaintiff also views the action as inadmissible, yet on the different grounds.

It considers that the German courts do not have jurisdiction under Articles 7(1) and (2) of the Brussels I bis Regulation. For the second instance court, the action seeks to change the content of the contract and to alter the defendant’s practices. The action in question should therefore receive a contractual qualification, yet ‘the place of performance’ within the meaning of Article 7(1) of the Regulation is not situated in Germany. For that court, the question of whether an effective agreement conferring jurisdiction was entered into is therefore irrelevant. It seems that this court considers that under no circumstances the German courts hold jurisdiction over the action brought by the plaintiff.

Ultimately, the case comes before the Federal Court of Justice (Bundesgerichtshof). The latter considers that the parties have not entered into an effective agreement conferring jurisdiction. The requirements relating to the form of such agreement, set in Article 25(1)(a) and (2) of the Brussels I bis Regulation have not been met. However, the Federal Court of Justice refers a preliminary question relating to the characterization of the action brought by the plaintiff:

‘Is Article 7(2) of [the Brussels I bis Regulation] to be interpreted as meaning that jurisdiction for matters relating to tort or delict exists in respect of an action seeking an injunction against specific practices if it is possible that the conduct complained of is covered by contractual provisions, but the applicant asserts that those provisions are based on an abuse of a dominant position on the part of the defendant?’

Opinion of Advocate General

According to the Opinion of AG Saugmandsgaard Øe, a civil liability action based on a breach of competition law falls within the scope of ‘matters relating to delict or quasi-delict’ within the meaning of Article 7(2) of the Brussels I bis Regulation, also when the plaintiff and the defendant are parties to a contract and the alleged anticompetitive conduct materializes itself in their contractual relationship.

The analysis that precedes this conclusion begins with an observation that the action brought by the plaintiff in the main proceedings is ‘based’ on the violation of the rules of German law prohibiting, like Article 102 TFEU, abuse of dominant position (point 19).

Next, the Opinion acknowledges that while it results from the case-law that the actions on anticompetitive conducts – including those constituting an infringement under Article 102 TFEU – fall within the scope of Article 7(2) of the Regulation, the particularity of the proceedings at hand stem from the fact that the alleged anticompetitive conduct occurred within the context of a contractual relationship (point 26).

After that, a reminder of case-law on Article 7(1) and (2) of the Regulation leads the AG to the judgments in Kalfelis and Brogsitter. Concerning the latter, he considers that two interpretations of the judgment are a priori possible (point 68). First, which the AG describes as ‘maximalist’, would imply that an action based on delict falls under the concept of ‘matter relating to contract’ within the meaning of Article 7(1) if the action concerns a harmful event that could (also) constitute a breach of a contractual obligation. In other terms, a national court would have to verify whether an action could also have been brought on the basis of breach of a contractual obligation. For the AG, that interpretation would imply that the contractual characterisation of a claim prevails over its characterisation as a matter relating to delict (point 69).

The AG rejects such ‘maximalist’ interpretation. First, an analysis allowing to establish a potential breach of a contractual obligation would be too burdensome at the stage where the jurisdiction is determined and could require consideration of the substance of the case (point 76). Next, under the Regulation, no hierarchy exists between the rules on jurisdiction provided for in Articles 7(1) and (2) (point 79). In this context, the AG resorts to an argument based on the idea that the solution adopted in relation to the rules on jurisdiction would have to be followed in relation to the conflict-of-laws rules of the Rome I and Rome II Regulations: the contractual characterisation would have to prevail also under these Regulations (points 81 and 82).

As a consequence, the AG pronounces himself in favour of a second interpretation of the judgment in Brogsitter that he describes as a ‘minimalist’ one. Here, an action would fall within the scope of Article 7(1) of the Regulation where ‘the interpretation of the contract […] is indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of against the [defendant] by the [plaintiff]’ (point 70).

At points 90 et seq., the AG describes the method of characterisation that results from his ‘minimalist’ interpretation of the judgment in Brogsitter. He discusses the cases where a plaintiff invokes rules of substantive law in his submission of action and where he or she does not – according to the AG, in the latter scenario, his method does not change fundamentally. He argues that on the basis of other elements of the submission of action, a judge has to identify the ‘obligation’ relied on by the plaintiff (point 96).

At points 100 and 101, the AG furtherly explains and recaps the method: where the plaintiff invokes, in his submission of an action, rules of substantive law imposing a duty on everyone and it does not appear ‘indispensable’ to establish the content of a contract in order to assess the lawful or unlawful nature of the conduct alleged against the defendant, the action is based on a non-contractual obligation (the Opinion uses the term ‘obligation délictuelle’) and therefore falls within the scope of ‘matters relating to delict or quasi-delict’ within the meaning of Article 7(2) of the Brussels I bis Regulation. However, where, irrespective of the rules of law relied on, a judge can assess the legality of the conduct only by reference to a contract, the action is essentially based on a ‘contractual obligation’ and therefore falls within the scope of ‘matters relating to a contract’ within the meaning of Article 7(1) of the Regulation.

It is yet to be seen to what extent the importance of the rules of substantive law invoked by a plaintiff will play a role in the future judgment of the Court. In any case, on the basis of these findings, the AG concludes that the contractual characterisation of the action brought by the plaintiff before the German courts should be rejected.

The Opinion can be found here (no English version yet).

On a side note…

The lecture of the Opinion presented above raises a point that could on its own inspire an interesting discussion. It seems that, for the AG, what is true under the Brussels regime, should also stand as true under the Rome I and II Regulation. In fact, an argument relating to the consistency between the solutions adopted with regards to the Brussels I bis and Rome I/II Regulations is invoked in the Opinion in order to reject the interpretation which, for the AG, would imply the priority of contractual characterisation over non-contractual characterisation (see points 81 and 82).

Against this background, in his Opinion in Bosworth and Hurley (points 91 to 103), AG Saugmandsgaard Øe seemed to consider that the contractual characterisation of an action should be favoured over the non-contractual characterisation where an individual contract of employment is at stake. That consideration was made in relation to the rules of jurisdiction and more precisely – to Article 18 of Lugano II Convention. As it was not necessary to answer the preliminary question that inspired the aforementioned considerations of the AG, the Court did not have an opportunity to clarify in its Judgment whether such preference of contractual characterisation does indeed occur.

Yet, if that is the case and the argument on the consistency of solutions adopted under the Regulations is valid, should the Rome I and II Regulations be read as implying a priority (or even exclusivity) of a contractual characterisation also for the conflict-of-laws purposes in a situation where a harmful conduct concerns employee – employer scenario?

The Faculty of Law of the University of Zagreb will hold a conference on Applicable Law in Cross-Border Insolvency Proceedings on 18 and 19 September 2020. Those interested in attending the conference may do so either in person or online.

Speakers include Paul Omar (INSOL Europe), Ignacio Tirado (Secretary-General UNIDROIT), Miha Žebre (European Commission), Andreas Piekenbrock (University of Heidelberg), Jasnica Garašić (University ofZagreb), Francisco Garcimartín (Autonomous University of Madrid), Edward Janger (Brooklyn Law School), John Pottow (University of Michigan), Bartosz Groele (Tomasik & Pakostewicz & Groele), Zoltan Fabok (DLA Piper Posztl, Nemescsói, Györfi-Tóth & Partners), Miodrag Đorđević (Supreme Court of the Republic of Slovenia), Leif M. Clark (former US Bankruptcy Judge), Simeon Gilchrist (Edwin Coe LLP), Renato Mangano (University of Palermo), Rodrigo Rodriguez (University of Lucerne) and Gerry McCormack (University of Leeds).

The International Commercial Chamber of the Court of Appeal of Paris (France) delivered a few days ago (8 September 2020) a decision (RG 19/06635) on jurisdiction clauses.

Summary / Resumé: “This case involved a company incorporated under Belgian law and a company incorporated under Emirati law. The latter signed a letter of guarantee for its Gabonese subsidiary in favor of the Belgian company, thereby securing the performance of a telecommunications services contract signed between the Gabonese subsidiary and the Belgian company. This contract stipulated a jurisdiction clause in favor of the Paris courts. Although the Emirati company (the guarantor) did not sign the contract containing the jurisdiction clause, the International Commercial Chamber of the Court of Appeal of Paris decided that the French court had jurisdiction, considering that the said clause was enforceable against it in respect of the warranty action brought by the Belgian company.

The ICCP-CA held that the agreements, although distinct, were intimately linked, as one conditioned the second and vice versa. As a result, it found that both agreements constituted “the Agreement”, so that their existence and performance were only justified by the overall scheme of the operations. It considered that these two acts could be qualified as an indivisible contractual whole, as the parties had intended to include the two contracts in a single transaction, thus rendering the jurisdiction clause stipulated in the Agreement enforceable against the guarantor, which had, furthermore, expressly agreed to the “terms and conditions” and had therefore been aware of it ».

The decision (in French) is attached to this post. 

Saugmandsgaard AG opined yesterday in C-59/19 Wikingerhof v Booking.com (no English version of the Opinion at the time of writing). At issue is whether allegations of abuse of dominant position create a forum contractus (Article 7(1) Brussels Ia) or a forum delicti (A7(2) BIa).

I published on jurisdiction and applicable law earlier this year and I am as always genuinely humbled with the AG’s (three) references to the handbook.  Wikingerhof submits inter alia that it only ever agreed to Booking.com’s general terms and conditions (‘GTCs’) because Booking.com’s dominant position leaves it no choice. And that it had most certainly not agreed to updates to the GTCs, effected via amendments on the ‘Extranet’, which is the portal via which the hotel may update its information and retrieve reservations.

At 16 of its referral, the Bundesgerichtshof holds acte clair and therefore without reference to the CJEU that there is no durable record of the alleged consent by Wikingerhof of the amended GTCs, including choice of court. Booking.com claimed these amounted to a ‘form which accords with practices which the parties have established between themselves’ pursuant to Article 25(1)(b). This finding echoes the requirements of housekeeping which I signalled yesterday.

In my 2020 paper I point out (p.153) inter alia that in the context of Article 25’s choice of court provisions, the CJEU in C-595/17 Apple v eBizcuss suggested a fairly wide window for actions based on Article 102 TFEU’s prohibition of abuse of dominant position to be covered by the choice of court. At 28 in Apple v eBizcuss: ‘the anti-competitive conduct covered by Article 102 TFEU, namely the abuse of a dominant position, can materialise in contractual  relations that an undertaking in a dominant position establishes and by means of contractual terms’. The AG as I note below distinguished Apple on the facts and applicable rule.

In the request for preliminary ruling of the referring court, CJEU C-548/12 Brogsitter features repeatedly. The Bundesgerichtshof itself is minded to hold for forum delicti, given that (at 24 of its reference)

‘ it is not the interpretation of the contract that is the focus of the legal disputes  between the parties, but rather the question of whether the demand for specific contractual conditions or the invoking of them by a company with an — allegedly — dominant market position is to be regarded as abusive and is therefore in breach of provisions of antitrust law.

In fact on the basis of the request, the court could have held acte clair. It referred anyway which gives the AG the opportunity to write a complete if  to begin with concise précis on the notion of ‘contract’ and ‘tort’ in BIa. At 38, this leads him to conclude inter alia that despite the need strictly to interpret exceptions to the A4 actor sequitur forum rei rule, these exceptions including the special jurisdictional fori contractus ut delicti, must simply be applied with their purpose in mind.

He calls it an application ‘assouplie’, best translated perhaps as ‘accommodating’ (readers may check this against the English version when it comes out) (viz tort, too, the AG uses the term assouplie, at 45, referring eg to CJEU C-133/11 Folien Fisher).

Further, the AG notes that in deciding whether the claim is one in contract, necessarily the claimant’s cause of action has an impact, per CJEU C-274/16 Flightright (at 61 of that judgment, itself refering to C‑249/16 Kareda which in turn refers to 14/76 De Bloos). The impact of claimant’s claim form evidently is a good illustration of the possibility to engineer or at least massage fora and I am pleased the AG openly discusses the ensuing forum shopping implications, at 58 ff. He starts however with signalling at 53 ff that the substantive occurrence of concurrent liability in contract and tort is subject to the laws of the Member States and clearly differs among them, making a short comparative inroad e.g. to English law, German law and Belgian /French law. (Michiel Poesen recently wrote on the topic within the specific context of the employment section).

The AG’s discussion of CJEU authority eventually brings him to Brogsitter. He he firmly supports a minimalist interpretation.  This would mean that only if the contractual context is indispensable for the judge to rule on the legality or not of the parties’ behaviour, is forum contractus engaged. This is similar to his Opinion in Bosworth, to which he refers. He rejects the maximalist interpretation. This approach puts forward that contractual qualification trumps non-contractual (arguably, a left-over of CJEU Kalfelis; but as the AG notes at 81: there is most certainly not such a priority at the applicable law level between Rome I and II) hence the judge regardless of the claimant’s formulation of claim, must qualify the claim as contractual when on the facts a link may exist between the alleged shortcomings of the other party, and the contract.

The maximum interpretation, at 76 ff, would require the judge to engage quite intensively with the merits of the case. That would go against the instructions of the CJEU (applying the Brussels Convention (e.g. C-269/95 Benincasa)), and it would (at 77) undermine a core requirement of the Brussels regime which is legal certainty. That the minimalist approach might lead to multiplication of trials seeing as not all issues would be dealt with by the core forum contractus, is rebuked at 85 by reference to the possibility of the A4 domicile forum (an argument which the CJEU itself used in Bier /Mines de Potasse to support the Mozaik implications of its ruling there) and by highlighting the Regulation’s many instances of support for forum shopping.

The AG then discusses abusive forum shopping following creative claim formulation at 88 ff. This  is disciplined both by the fact that as his comparative review shows, the substantive law of a number of Member States eventually will not allow for dual characterisation and hence reject the claim in substance. Moreover clearly unfounded claims will be disciplined by lex fori mechanisms (such as one imagines, cost orders and the like). This section confuses me a little for I had understood the minimalist approach to lay more emphasis on the judge’s detection of the claim’s DNA (along the lines of Sharpston AG in Ergo) than on the claim’s formulation.

The AG then continues with further specification of the minimalist approach, including at 112 a rejection, correct in my view (for the opposite would deny effet utile to A7(2), of the suggestion to give the A7(1) forum contractus the ancillary power to rule of over delictual (A7(2)) issues closely related to the contractual concerns.

Applying the minimalist test to the case at issue the AG concludes that it entails forum delicti, referring in support to CDC and distinguishing Apple v eBizcuss (which entails choice of court and relies heavily on textual wording of the clause).

It will be interesting to see which of the two possible interpretations of Brogsitter the CJEU will follow and whether it will clarify the forum shopping implications of claim formulation.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9.

An online roundtable addressing the coordination between the Brussels Ia Regulation and other instruments of EU law will take place next 24 September, 3 p.m., on Teams channel.

The event is part of the EU co-financed “EN2BRIa” Project and scheduled within the PEPP Programme (Programme in European Private Law for Postgraduates). EN2BRIa mainly aims to shed light on how the relationship between the Brussels Ia Regulation and other EU law instruments is to be handled. The upcoming roundtable will showcase and discuss the preliminary results of the investigation conducted by the Partners of the Project, namely the Universities of Genoa, Nice, Valencia, and Tirana. Chaired by Chiara E. Tuo (Univ. Genoa), the roundtable features as speakers Jean-Sylvestre Bergé (Univ. Nice), Guillermo Palao Moreno (Univ. Valencia), Giulio Cesare Giorgini (Univ. Nice), Rosario Espinosa Calabuig (Univ. Valencia), Rosa Lapiedra Alcami (Univ. Valencia), Isabel Reig Fabado (Univ. Valencia), and Stefano Dominelli (Univ. Genoa).

Participation is free; more info, specially about the access to the Teams channel, may be found here.