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This article was written by Prof. William S. Dodge (George Washington University Law School) and first published on Transnational Litigation Blog. The original version can be found at Transnational Litigation Blog. Reposted with permission.

On March 7, 2025, Judge Stephen N. Limbaugh, Jr. (Eastern District of Missouri) entered a default judgment for more than $24 billion against the People’s Republic of China and eight other Chinese defendants for hoarding personal protective equipment (PPE) during the early days of the COVID pandemic in violation of federal and state antitrust laws. The Eighth Circuit had previously held that the Foreign Sovereign Immunities Act (FSIA) barred most of Missouri’s claims but that the hoarding claim fell within the act’s commercial activity exception.

Missouri now has the judgment against China that it wanted. But Missouri may find that judgment hard to enforce. As discussed below, there appear to be significant procedural problems with the judgment that at least some defendants might raise. More broadly, the properties of foreign states and their agencies or instrumentalities are entitled to immunity from execution under the FSIA. Immunity from execution is broader than immunity from suit, and it is not clear that any of the defendants have property in the United States that can be used to satisfy the judgment.

The Defendants and the Claims

On April 21, 2020, Missouri brought four COVID-related claims against nine Chinese defendants: the People’s Republic of China, the Chinese Communist Party, the National Health Commission, the Ministry of Emergency Management, the Ministry of Civil Affairs, the People’s Government of Hubei Province, the People’s Government of Wuhan City, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. The original complaint asserted four claims under Missouri tort law: (1) public nuisance, (2) abnormally dangerous activity, (3) breach of duty by allowing the transmission of COVID, and (4) breach of duty by hoarding PPE. The district court initially held that all the claims were barred by the FSIA, but the Eighth Circuit reversed on the hoarding claim.

The FSIA governs the immunity of foreign states and their agencies and instrumentalities from suit in federal and state courts, as well as the immunity of their properties from execution to satisfy judgments. Some of the FSIA’s provisions distinguish between foreign states and their political subdivisions on the one hand and their “agencies or instrumentalities” (including “organs” and majority state-owned companies) on the other. Other provisions extend the same immunities to both categories.

Of the nine defendants, the Eighth Circuit held that seven of them were part of the Chinese state. China itself is clearly a foreign state, and its National Health Commission, Ministry of Emergency Management, and Ministry of Civil Affairs are part of the state. The People’s Government of Hubei Province and the People’s Government of Wuhan City fall into the same category because they are political subdivisions. “The Chinese Communist Party may look like a nongovernmental body at first glance,” the court of appeals wrote, but it is “in substance” the same body that governs China and therefore properly considered part of the state. The remaining two defendants, the Wuhan Institute of Virology and the Chinese Academy of Sciences, are legally separate from the Chinese government “but still closely enough connected” to qualify as “organs” and thus as “agencies or instrumentalities” of a foreign state covered by the FSIA.

Under the FSIA, all nine defendants are immune from suit in the United States unless an exception to immunity applies. The Eighth Circuit found that only one exception applies—the commercial activity exception in 28 U.S.C. § 1605(a)(2)—and that it applies only to Missouri’s claim for hoarding PPE. The court reasoned that hoarding was the kind of activity that private parties can engage in and that the complaint sufficiently alleged that the hoarding had a direct effect in the United States.

After the Eighth Circuit’s decision, I pointed out some of the difficulties that Missouri would face on remand trying to prove its tort claims, including whether Missouri law applied under Missouri choice-of-law rules, whether Missouri law established a duty of care for these defendants, whether the defendants breached any such duty of care, and whether any such breach was the actual and proximate cause of Missouri’s damages. I don’t know whether Missouri’s attorney general reads TLB, but on the eve of trial Missouri changed the legal basis for its hoarding claim from common-law tort to federal and state antitrust law. Antitrust claims are not subject to state choice-of-law rules.

The District Court’s Judgment

The Chinese defendants decided not to appear and defend against Missouri’s claims. Section 1608(e) of the FSIA provides: “No judgment by default shall be entered by a court of the United States or of a State against a foreign state, a political subdivision thereof, or an agency or instrumentality of a foreign state, unless the claimant establishes his claim or right to relief by evidence satisfactory to the court.” This provision is supposed to ensure that the U.S. court does not simply accept the plaintiff’s allegations and instead tests the evidence to make sure that judgment is warranted. Some courts have held, however, that they may accept as true a plaintiff’s “uncontroverted evidence.” That is what Judge Limbaugh did here.

Relying on the plaintiff’s evidence, the district court concluded that “China engaged in a deliberate campaign to suppress information about the COVID-19 pandemic in order to support its campaign to hoard PPE from Missouri and an unsuspecting world.” The court noted that local officials closed schools and quarantined doctors and patients in December 2019, while at the same time other officials were denying that COVID could be spread between human beings. The district court further concluded that “Defendants engaged in monopolistic actions to hoard PPE through both the nationalization of U.S. factories [in China] and the direct hoarding of PPE manufactured or for sale in the United States.” The court pointed to evidence that China stopped exporting PPE and started importing a lot of it.

The court found the evidence sufficient to establish liability for monopolization under federal antitrust law. Pursuant to 15 U.S.C. § 15c, Missouri’s attorney general was also permitted to bring a federal antitrust claim parens patriae on behalf of the citizens of Missouri. The court also found the evidence sufficient to establish liability for monopolization under Missouri antitrust law, which the court noted is to be construed “in harmony with” federal antitrust law.

Relying on an expert report on damages submitted by Missouri, the court found that between 2020 and 2051 Missouri either had lost or would lose $8.04 billion in tax revenue because of the impact of China’s hoarding of PPE on economic activity. The court further found that hoarding caused Missouri to spend an additional $122,941,819 on PPE during the pandemic. The court added these amounts and multiplied by three—because federal and state antitrust laws permitted treble damages—for a total damages award of $24,488,825,457.

Problems with the District Court’s Analysis

I see a number of problems with the district court’s analysis. First, the court treated the defendants as an undifferentiated group, seemingly following Missouri’s supplemental brief, which refers simply to the nine defendants collectively as “China.” But the individual defendants in this case knew different things and did different things (and Missouri does not appear to have argued that there was a conspiracy allowing the acts of one defendant to be attributed to the others). The fact that local officials seem to have been aware that COVID could be transmitted from human to human, for example, does not establish that the central government knew this. Indeed, a U.S. intelligence report in 2020 found that local officials hid information about the virus from Beijing. Similarly, the fact that the central government was nationalizing PPE factories, limiting exports, and buying PPE abroad does not show that the Wuhan Institute of Virology or the Chinese Academy of Sciences was doing so.

Second, the damages calculations seem fanciful. The opinion contains no discussion of causation. How can one disentangle the impact of China’s hoarding PPE on Missouri from other factors that contributed to the spread of the pandemic there, for example the fact that Missouri was among the last states to adopt a stay-at-home order? Establishing hoarding’s impact on Missouri’s economy and derivatively its impact on Missouri’s tax revenues is fraught with complications, especially when estimates are projected to the year 2051.

Third, the court failed to consider whether trebling damages is allowed under the FSIA. Section 1606 provides that “a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.” In other words, while the FSIA allows the trebling of damages against the Wuhan Institute of Virology and the Chinese Academy of Sciences, it may not allow the same against China itself or the other governmental defendants.

But China did not make any of these points, or others that it would undoubtedly have thought of, because it decided not to appear. The China Society of Private International Law did file two amicus briefs, but the district court did not mention them. I can understand China’s reluctance to submit to the authority of a U.S. court (including to the discovery of evidence) in a case that it no doubt feels is politically motivated. But the decision not to appear gave Missouri an enormous advantage.

What Happens Now?

So, what happens now? There are probably many possibilities, but I will discuss just three: (1) the possibility that some of the defendants might seek to set the judgment aside for improper service; (2) the possibility of enforcing the judgments against the defendants’ property in the United States; and (3) the possibility of similar suits in other states.

A Rule 60(b) Motion Addressing Service of Process?

China could move to set aside the judgment under Rule 60(b)(4) on the ground that the judgment is void for lack of subject matter jurisdiction. The factors that made China decide not to appear in the first place would likely dissuade it from raising all the issues that it could raise in a 60(b) motion. But it might make sense for some of the defendants to raise service of process in such a motion, particularly the Wuhan Institute of Virology and the Chinese Academy of Sciences, which, as explained below, are likely to be the most vulnerable to enforcement of the judgment.

The FSIA has rules for serving foreign states and their agencies or instrumentalities. For foreign state and their subdivisions, Section 1608(a) lists four means of service that must be tried in order. In this case, the first three were not available. (China refused to execute a request for service under the Hague Service Convention on the ground that doing so would infringe its sovereignty, as Article 13 of the Convention allows it to do.) So, the district court ordered service through diplomatic channels, which was then made on all the defendants except the Chinese Communist Party, the Wuhan Institute of Virology, and the Chinese Academy of Sciences. I see no defects in service here.

With respect to the remaining three defendants, the district court authorized service by email pursuant to Rule 4(f)(3). There are three problems with this. First, the district court treated the Chinese Communist Party as a non-governmental defendant for purposes of service, but the Eighth Circuit later held that it is instead a foreign state for purposes of the FSIA. After the Eighth Circuit’s decision, Missouri argued that its service on China through diplomatic channels should count as service on the Chinese Communist Party as China’s alter ego. Judge Limbaugh seems to have accepted this assertion without discussion, but the Communist Party could certainly raise the issue in a Rule 60(b) motion.

The second problem is that Rule 4(f)(3) allows a district court to order alternative means of service only if those means are “not prohibited by international agreement.” As Maggie Gardner and I have explained repeatedly, the Hague Service Convention prohibits service by email, at least when the receiving state has objected to service through “postal channels” as China has done. District courts are divided on this, however, and Judge Limbaugh cited a number of district court cases holding (wrongly) that email service is permitted. A Rule 60(b) motion raising this point would be unlikely to convince him, but it might succeed on appeal to the Eighth Circuit.

The third problem is that service by email in this case is inconsistent with the FSIA. For agencies and instrumentalities, like the Wuhan Institute of Virology and the Chinese Academy of Sciences, Section 1608(b)sets forth the permitted means of service. It appears that the first two were not available and that the district court relied on Section 1608(b)(3)(C), which allows service “as directed by order of the court consistent with the law of the place where service is to be made” (emphasis added). But Chinese law does not permit private parties to serve process by email.

When this issue arose after the Eighth Circuit’s decision, Missouri argued that the language of Section 1608(b)(3)(C) “is nearly identical to Federal Rule of Civil Procedure 4(f)(3), which Missouri previously invoked in its request to serve WIV and CAS by email.” This was misleading. Rule 4(f)(3) refers to means of service that are “not prohibited by international agreement,” whereas Section 1608(b)(3)(C) refers to means of service that are “consistent with the law of the place where service is to be made,” that is Chinese law. Even if service by email were permitted by the Hague Convention—which, as discussed above, it is not—that would not establish that service by email is consistent with Chinese law. Judge Limbaugh did not address this issue in his judgment and might be open to persuasion on a Rule 60(b) motion.

A Rule 60(b) motion limited to service of process issues might have some appeal for China. Although it would require becoming involved in the U.S. litigation, it would not involve arguing the merits of China’s actions during the pandemic or submitting to U.S. discovery. China would be able to make purely legal arguments that the Chinese Community Party was not properly served under Section 1608(a) and that the Wuhan Institute of Virology and the Chinese Academy of Sciences were not properly served under Section 1608(b) because email service is prohibited by both the Hague Service Convention and by Chinese law.

Alternatively, defendants could raise the service of process issues, and perhaps other procedural defects, at the enforcement stage if and when Missouri attempts to execute the judgment against any of their properties in the United States. One advantage of waiting for enforcement is that the arguments would be heard by a different judge with no psychological commitment to past decisions. Also, if defendants were to file a Rule 60(b) motion before Judge Limbaugh and lose, they might be precluded from raising the same issues again at the enforcement stage. On the other hand, a successful Rule 60(b) motion could void the judgment once and for all for some of the defendants, whereas saving these arguments for the enforcement stage could require the defendants to raise them anew in multiple enforcement proceedings.

Immunity from Execution

Defendants also have the option of asserting that any property Missouri attempts to seize is immune from execution. As a general matter, federal court judgments are enforceable against a judgment debtor’s assets anywhere in the United States. But judgments against foreign states and their agencies or instrumentalities are subject to the FSIA’s rules on immunity from execution.

Specifically, Section 1610(a)(2) provides that “[t]he property in the United States of a foreign state … used for a commercial activity in the United States, shall not be immune … from execution, upon a judgment entered by a court of the United States or of a State … if … (2) the property is or was used for the commercial activity upon which the claim is based.” This means that the properties in the United States of China, its ministries and subdivisions, and the Chinese Communist Party are immune from execution unless those properties were used to hoard PPE. I find it hard to imagine a situation in which that would be true.

The immunity for properties owned by agencies or instrumentalities is not as broad. Section 1610(b)(2) permits execution against “any property in the United States of an agency or instrumentality of a foreign state engaged in commercial activity in the United States” if the judgment was rendered under the FSIA’s commercial activities exception (as this judgment was) “regardless of whether the property is or was involved in the act upon which the claim is based.” This means that the properties in the United States of the Wuhan Institute of Virology and the Chinese Academy of Sciences would be subject to execution if those defendants are engaged in commercial activities in the United States even if the properties themselves were not used to hoard PPE. Thus, these two defendants, unless they can get the judgment set aside for improper service as discussed above, are potentially more exposed to execution than the others.

It is worth emphasizing the district court’s judgment against these nine defendants is enforceable only against properties owned by these nine defendants. Missouri cannot execute its judgment against property in the United States simply because the property is Chinese owned. This is clear from the Second Circuit’s decision in Walters v. Industrial & Commercial Bank of China (2011), another case involving a default judgment against China under the FSIA, in which the court of appeals held that plaintiffs could not use assets belonging to agencies or instrumentalities of China to satisfy a judgment against China itself.

Walters relied on the Supreme Court’s decision in First National City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec) (1983). As Ingrid Brunk has explained, Bancec stands for the proposition that U.S. courts must generally respect the corporate separateness of foreign states and their agencies or instrumentalities. Indeed, the Supreme Court in Bancec quoted the FSIA’s legislative history, which says specifically that the FSIA “will not permit execution against the property of one agency or instrumentality to satisfy a judgment against another, unrelated agency or instrumentality.”

If a judgment against an agency or instrumentality of a foreign state cannot be executed against the property of another agency or instrumentality of that foreign state, it necessarily follows that the judgment cannot be executed against property not belonging to any agency or instrumentality of that foreign state. For example, Smithfield Foods is a major pork producer operating in Missouri. Its property cannot be seized to satisfy this judgment. Smithfield Foods is owned by a private Chinese conglomerate, but Smithfield Foods was not a defendant in this action, and so its property is not subject to execution.

Copycat Cases

In addition to Missouri’s efforts to enforce this judgment, it is likely that the defendants will face copycat cases in other states. Mississippi filed a similar complaint against the same defendants in May 2020. Again, the defendants chose not to appear. On February 10, 2025, Judge Taylor B. McNeel (Southern District of Mississippi) held an evidentiary hearing. It remains to be seen whether Judge McNeel will scrutinize Mississippi’s arguments more carefully than Judge Limbaugh did.

Conclusion

$24 billion is a big number. But it seems highly unlikely that Missouri will ever see a penny of it, given the FSIA’s rules on immunity from execution. Missouri may, nevertheless, be able to harass these defendants—and potentially other Chinese parties holding property in the United States—by filing actions to execute the judgment even if those actions ultimately prove unsuccessful.

Last week, friend-of-TLB Ted Folkman had this to say about the Missouri judgment over at Letters Blogatory:

When we think about these cases, we have to think about what it would be like if the shoe were on the other foot. In 2021, the US and other western countries were accused of hoarding the COVID vaccine. Should the United States have been amenable to suit in China or elsewhere because it prioritized the public health needs of its own people? The technical term for taking seriously the question, “what if the shoe were on the other foot?” is comity. We need more of it.

Ugljesa Grusic (UCL) has kindly shared the following invitation with us.

On 24 March 2025, at 6pm UK time, Marta Pertegás (Maastricht University; University of Antwerp; a fulltime member of the Permanent Bureau of the Hague Conference on Private International Law between 2008 and 2017) and Alex Mills (UCL; a Specialist Editor of Dicey, Morris and Collins on the Conflict of Laws, with particular responsibility for, inter alia, the rules on the recognition and enforcement of foreign judgments) will give a seminar on The 2019 Hague Judgments Convention – English and EU Perspectives at the Faculty of Laws, University College London. The event will be delivered in a hybrid format and the readers of the blog are welcome to join either in person or on line.

The seminar is part of the International Law Association (British Branch) Lecture Series and will be chaired by Ugljesa Grusic.

On 1 July 2025, the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters will enter into force in England and Wales. This historic regime establishes a general treaty basis for the recognition and enforcement of civil judgments between Convention States, supplementing the existing national rules and the Hague Choice of Court Convention 2005. Perhaps most significantly, it will provide common rules for the recognition and enforcement of judgments from England and Wales in EU Member States, and conversely, for EU Member State judgments to be recognised and enforced in England and Wales, to some extent filling a ‘gap’ created by Brexit.

This seminar will address the significance of this development from both an English and EU perspective, examining the main features of the 2019 Convention and considering the opportunities and challenges it presents.

To register, please follow this link.

On 24 March 2025, at 6pm UK time, Marta Pertegás (Maastricht University; University of Antwerp; a fulltime member of the Permanent Bureau of the Hague Conference on Private International Law between 2008 and 2017) and Alex Mills (UCL; a Specialist Editor of Dicey, Morris and Collins on the Conflict of Laws, with particular responsibility for, […]

The following post was kindly provided by Hannah Buxbaum, Vice President for International Affairs, Professor of Law and John E. Schiller Chair, Indiana University, and is cross-posted on tlblog.org

As was widely reported yesterday, the Trump administration permitted two planes carrying Venezuelan deportees to continue on their way to El Salvador after receiving a judicial order to turn the flights back to the United States. A story in Axios quotes an administration official who explains that they were not in fact “actively defying” the judge—the order just came too late, since the planes were already out of U.S. airspace. This seems to be an extraterritoriality argument, suggesting that the judge lacks authority to order an action to take place outside U.S. borders.

The administration has this completely wrong. The judge is ordering the administration to take action inside the United States—that is, to instruct the planes to turn around. That instruction will in turn cause something to happen elsewhere (the pilots will change course), but that doesn’t make the order impermissibly extraterritorial. This is exactly the same the basis on which courts in garden-variety civil disputes order parties subject to their jurisdiction to procure evidence or turn over assets that are located abroad. Moreover, since the planes were reportedly over international waters at the time the order was entered, compliance would not have required any actions by a foreign actor or within the territory of another state—in other words, it wouldn’t have created a conflict of laws.

Now that the deportees are already in El Salvador, that picture is more complicated, since local authorities there might refuse to take action. Even the existence of such a conflict, though, doesn’t mean that Judge Boasberg’s order exceeds his authority. It remains to be seen whether any of the other justifications the White House offered up for ignoring that order are any more compelling, but the argument that it didn’t apply once the planes had left the United States is certainly not.

For further leading expert input on extraterritoriality see one of our previous posts here.

The decision in case C-57/24, Ławida, has been scheduled for delivery on 27 March 2025. The Sąd Okręgowy w Gliwicach (Poland) has referred to the Court of Justice the following question: Must Article 13 of Regulation (EU) No 650/2012 [on succession] be interpreted as meaning that it does not apply in a situation where, in […]

Benedikt Schmitz (University of Groningen) has kindly shared the following reminder of his Call for Participants with us.

The project concerns the interpretation of Article 6 (2) Rome I Regulation in the EU Member States and is very limited in nature. Time commitments are therefore very limited. Click here for more information.

We are still looking for scholars from Croatia, Czechia, Estonia, Finland, France, Ireland, Italy, Luxemburg, Malta, Romania, and Slovenia. Danish scholars may also participate on the basis of Article 5(2) Rome Convention.

The team currently consists of established scholars from 15 (former) EU Member States:

• Austria: Andreas Schwartze (Leopold-Franzens-Universität Innsbruck)
• Belgium: Cedric Vanleenhove (Universiteit Gent)
• Bulgaria: Ilia Lassin (Sofia University St. Kliment Ohridski)
• Cyprus: Nicholas Mouttotos (Universität Bremen)
• Germany: Benedikt Schmitz (Rijksuniversiteit Groningen)
• Greece: Kostas A. Rokas (Aristotle University of Thessaloniki)
• Hungary: Ferenc Szilágyi (Pázmány Péter Katolikus Egyetem Budapest)
• Lithuania: Katarzyna Bogdziewicz (Mykolo Romerio universitetas Vilnius)
• Netherlands: Benedikt Schmitz (Rijksuniversiteit Groningen)
• Poland: Anna Wysocka-Bar (Uniwersytet Jagiello?ski Kraków)
• Portugal: Anabela Gonçalves (Universidade do Minho)
• Slovakia: Dominika Moravcová (Trnavská univerzita v Trnave)
• Spain: Anna María Ruiz Martín (Universitat Oberta de Catalunya) & Beatriz Añoveros Terradas (Universitat de Barcelona)
• Sweden: Gunnar Bramstång (Lunds Universitet)
• UK: Ross Pey (Western University Ontario)

Interested in participating?

Contact Benedikt Schmitz through email: b.schmitz@rug.nl

At the end of each year I publish an article (in German) about the Conflict of Laws developments in Germany of the last twelve months, covering more or less the year 2024 and the last months of 2023. I thought it would be interesting for the readers of this blog to get an overview over those topics that seem to be most trending.

The article focuses on the following topics:

1. Restitution of Money lost in Illegal Gambling
2. Applicable Law in the Dieselgate litigation
3. The (Non-)Valitidy of Online Marriages
4. New German conflict-of-law rules regarding gender afiliation / identity
5. Reforms in international name law

I will start in this post with the two first areas that are mainly dealing with questions of Rome I and Rome II while in my follow-up post I will focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

This is not a resumen of the original article as it contains a very detailed analysis of sometimes very specific questions of German PIL. I do not want to bore the readers of this blog with those specificities. Those interested in knowing those details can find the article here (no free access).

I would be really curious to hear whether these or similar cases are also moving courts in other jurisdictions and how courts deal with them. So, please write me via mail or in the comments to the post if you have similar or very different experiences on those cases.

Part 1 – Illegal Gambling and “Volkswagen”

I will start with the two areas that are mainly questions of Rome I and Rome II while in my follow-up post I will focus on the three areas that are not harmonized by EU law (yet) and are mainly questions of family law.

1. Restitution of Money lost in Illegal Gambling

Cases involving the recovery of money lost to illegal online gambling are being heard in courts across Germany and probably across Europe. Usually the cases are as follows: A German consumer visits a website offering online gambling. These websites are in German and offer German support by phone or email with German phone numbers etc. However, the provider is based in Malta or – mainly before Brexit – Gibraltar. After becoming a member, the consumer has to open a bank account with the provider. He transfers money from his (German) account to the account in Malta and uses money from the latter account to buy coins to gamble. In Germany, in order to offer online gambling, you need a licence under German law. The operators in these cases are usually licensed under Maltese law but not under German law.

• In terms of applicable law, Rome I and Rome II are fairly straightforward. Since the question in this case is whether the plaintiff can claim the return of money lost on the basis of an illegal and therefore void contract, Rome I is applicable as it also governs claims arising from contracts that are ineffective or of doubtful validity. It is therefore irrelevant that German law would provide for restitution on the basis of unjust enrichment (Leistungskondiktion), which generally is a non-contractual obligation that falls within the scope of Rome II. As we have a consumer and a professional, Article 6 Rome I has to be applied. As I described the case above, there are also little doubts that the website is (also) directed to Germany and therefore German law as the country of the habitual residence of the consumer applies. To this conclusion came, e.g. the German BGH, but also the Austrian OGH.
• The application of German law leads to the invalidity of the contract pursuant to sec. 134 BGB, which declares a contract null and void if it violates a law that prohibits that contract. In order to determine whether the law prohibits this concrete gaming contract, the question arises as to the geographical scope of the prohibition on offering gambling/casino contracts without a German licence. As this prohibition is based on German public law, it is limited to gambling/casino games that take place on German territory. So far, German courts have applied the German prohibition in cases where the consumer was in Germany when playing. One court (LG Stuttgart, 11.9.2024 – 27 O 137/23, 18.09.2024 – 27 O 176/23) even considered it sufficient if the consumer was in Germany when opening the bank account with the gaming provider from which the money was then transferred to the games. The court ruled that it did not matter whether the consumer played from Germany, whether the provider was located abroad or whether the bank account from which the money was finally transferred to the game was located in another country. It appears that Austrian courts have similar cases to decide, but see this point differently, the Austrian OGH decided that the Austrian rules prohibiting unlicensed gambling are limited to providers based in Austria.
• As you probably know, the Austrian OGH made a request to the CJEU to determine the place of the damage (Article 4 para. 1 Rome II) in a case where the consumer/player transfers the money from the local bank account to the account of the Bank in Malta and then makes payments from this second bank account. So far, German courts were hesitant to take this road. The way over unjust enrichment resulting from a invalid contract has the charming effect that you do not have to apply Rome II’s general tort rule (Article 4 para. 1 Rome II) and dive into the discussion how to determine the place of economic damages. Under German law, however, Rome II may be relevant in cases where the claim is not based on unjust enrichment but on intentional damage inflicted in a manner offending common decency (vorsätzliche sittenwidrige Schädigung), a special offence which is more difficult to prove (sec. 826 BGB). In some few cases, where sec. 826 was in question, courts still did try to avoid the discussion how to locate this economic loss. One simply applied the law of the place of the habitual residence of the consumer/gamer as the play from which the transfer from the first bank account was effected (OLG Karlsruhe 22.12.2023 – 19 U 7/23; 19.12.2023 – 19 U 14/23). Other courts avoided the discussion altogether by applying Article 4 para. 3 Rome II directly – leading to an accessory connection to the law applied to the gambling contract (LG Hagen, 5.10.2023).

One footnote to the whole scenario: There is a case pending at the CJEU that might make the whole discussion superfluous (Case C-440/23). The German practice of distributing gambling licences might be classified as unlawful under EU law at least for some older cases. The question by the CJEU to be decided is whether this results in a ban on reclaiming losses from this gambling.

2. Place of Damage in Volkswagen Cases

The Volkswagen emission scandal cases, in German dubbed “Dieselgate”, are about claims for damages that end customers are asserting against Volkswagen (or other vehicle manufacturers). The damage is that they bought a car with a manipulated defeat device which, under certain conditions of the type-approval test, resulted in lower emissions than in normal operation. As a result, vehicles with higher emissions than permitted were registered and marketed. Volkswagen is currently being sued throughout Europe. Most cases are initiated by consumers who did not buy directly from the manufacturer but through a local dealer, so there is no direct contractual link. As German law is in some respects restrictive in awarding damages to final consumers, it seems to be a strategy of Volkswagen to come to German law.

• Rome I: As far as Volkswagen argued that there is an implicit contract between Volkswagen and the end consumer resulting from a warranty contract in case with a Spanish end buyer, a German court did not follow that argument or at least came to the conclusion that this is a question of Spanish law as such a warranty contract would have to be characterized as a consumer contract in the sense of Article 6 para. 1 Rome I Regulation (LG Ingolstadt 27.10.2023 – 81 O 3625/19)
• In general  German courts apply Article 4 para. 1 Rome II and determine the law of the damage following the CJEU decision in VKI  and MA v FCA Italy SpA: The place of damage is where the damaging contract is concluded or, in case the places are different, where the vehicle in question is handed over. The BGH (and lower instance courts, e.g. OLG Dresden, 07.11.2023 – 4 U 1712/22 – not free available online) followed that reasoning. One court had to consider whether, instead, Article 7 Rome II Regulation (environmental damages) would be applicable, as the increased emissions would also damage the environment. The LG Ingolstadt did not follow that line of argument, as the damage claimed in the concrete case was a pure economic loss, not an environmental damage.

What are your thoughts? How do courts treat these cases in your jurisdictions (I guess there are many cases as well)? Do you have different or similar issues in discussion?

 

Stay tuned for the second part of this article which will move to trending topics in family law…

The EAPIL’s Young Research Network has just launched its fifth research project, which is being led by Mathilde Codazzi, Paul Eichmüller and Marco Pasqua. The project will focus on the national rules governing the law applicable to non-contractual obligations arising out of privacy and personality rights. The aim of the project is to enable a […]

You are invited to the third meeting of Migration Talks organized by the Jean Monnet Chair in Legal Aspects of Migration Management in the European Union and in Türkiye.

Speaker: Prof. Dr. Laura Carballo Piñeiro, Chair of Private International Law, Dean, Faculty of International Relations, University of Vigo

Title: Migrant Workers and Social Security Rights across Borders: a Right or a Privilege?

Date and Time: Wednesday, March 19, 2024, 10.30 a.m. -11.30 a.m. (CET)

Location: via Zoom (The link shall be provided upon request: migration@bilkent.edu.tr)

Abstract

Access to social security is a human right that only a quarter of the world population enjoy. Such an access is particularly challenging for workers who cross national borders, as they may not get access to a national scheme, get access only in a limited way compared to other national or resident workers in the country, be obliged to contribute to more than one system, or not benefit from a system to which had previously contributed due to relocation to their home country or a third country. State coordination in these matters is thus of the essence, in particular to ensure that contributions are only paid to one system at a time, aggregation and maintenance of acquired rights for those workers that are in the course of acquisition, and portability of benefits. Even in a coordinated scenario, legal divergence across countries might further complicate access to benefits. For example, the funding of a benefit by taxes and not contributions might automatically exclude posted workers from their enjoyment. The EU Social Security Coordination Regulation will be used in the presentation to address these principles, the challenges faced by States and social partners in their enforcement, and tools developed to address them. Outside this privileged area, coordination relies on a complex, but insufficient network of treaties which very much focus on the role of receiving countries. As the movement of workers increases, more attention should be paid to the role of sending States by researching the interplay between social protection and migrant studies.

 

By Yuchen Li, a PhD student at Wuhan University.

A. Introduction

An asymmetric choice of court agreement is commonly used in international commercial transactions, especially in financial agreements, which usually allows one party (option holder) an optional choice about the forum in which proceedings may be brought but the other (non-option holder) an exclusive choice to sue in a designated court.[1] A typical example is as follows:

 ‘(A) The courts of England have exclusive jurisdiction to settle any disputes ….

(B) The Parties agree that the courts of England are the most appropriate and convenient courts … to settle Disputes and accordingly no Party will argue to the contrary.

(C) This Clause is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.’ [2]

In recent years, issues concerning asymmetric choice of court agreements have been controversial in cases within some jurisdictions.[3] Despite the significant amount of research on asymmetric choice of court agreements, little attention has been paid to Chinese stance on this topic. With Chinese private parties actively engaging in international transactions, Chinese attitude towards such clauses is important for commercial parties and academic researchers. This article gives a glimpse of how Chinese courts handle asymmetric choice of court agreements in international and commercial civil litigations.[4]

B. Characterization

Chinese courts have demonstrated mainly four different views in characterizing asymmetric choice of court agreements.

Firstly, some courts classify this kind of agreement as asymmetric jurisdiction agreements.[5] In Hang Seng Bank Ltd. v. Shanghai Tiancheng Storage Co., Ltd. & Lin Jianhua, Shanghai Financial Court reasoned that a jurisdiction clause which allows one party to sue in multiple jurisdictions and requires the other to only bring the dispute to a specific jurisdiction should be characterized as an asymmetric jurisdiction clause.[6]

Second, several courts characterize the agreement as non-exclusive jurisdiction clause.[7] In Hwabao Trust Co., Ltd. v. Xiao Zhiyong, Shanghai High People’s Court observed that, according to the jurisdiction clause in issue, the option holder could either choose to initiate proceedings in the designated court or other competent courts, hence the clause is non-exclusive.[8]

Thirdly, it is notable that in GOOD VANTAGE SHIPPING LIMITED v. Chen Fuxiang et al, Xiamen Maritime Court classified the disputed clause as an ‘asymmetric exclusive jurisdiction clause’. The court held that, under the disputed clause, only when the option holder chooses to take the proceedings in the designated court will that court have exclusive jurisdiction, but this does not exclude the right of the option holder to sue in other competent courts.[9]

Last, a number of cases overlook the particularity of asymmetric choice of courts agreements and broadly classify them as jurisdiction agreements.[10]

C. Choice of Law

Most Chinese courts tend to apply lex fori on the effectiveness of asymmetric choice of court agreements. Relying on Article 270 of Chinese Civil Procedure Law (hereinafter referred to as ‘CPL’) which provides that this Law applies to foreign-related civil actions within PRC,[11] Chinese courts normally take the view that the ascertainment of jurisdiction is a procedural matter and apply lex fori.[12]

D. Effectiveness

a. Validity

By far, the validity of asymmetric choice of court agreements has not been addressed by Chinese legislation. However, in 2022, the Supreme People’s Court of PRC (hereinafter referred to as ‘SPC’) issued Summary of National Symposium on Foreign-Related Commercial and Maritime Trials of Courts (hereinafter referred to as ‘the Summary’). The Summary regulates that unless an asymmetric choice of court agreement involves the rights and interests of consumers and workers or violates CPL’s provisions on exclusive jurisdiction, the people’s court should reject the parties’ claim that the agreement is invalid on the ground of unconscionability. Although the Summary is not an official source of law, it serves as an important reference and guideline for courts in the absence of legislation.

Chinese courts generally support the view that an asymmetric choice of court agreement will not be deemed invalid for its asymmetry. The validity of such an agreement is commonly upheld for three reasons. First, such an agreement itself is not contrary to Chinese law.[13] In Winwin International Strategic Investment Funds Spc v. Chen Fanglin, Fujian High People’s court held that such a clause does not violate CPL and recognized its validity. [14] Second, party autonomy in civil and commercial litigations should be protected.[15] In Sun Jichuan v. Chen Jianbao, Beijing Fourth Intermediate People’s Court pointed out that CPL allows parties to a contract the right to select the court by agreement, which reflects party autonomy in civil procedure law. The aim of protecting this right is to safeguard that both parties are treated equally by the court, but this does not mean they have to choose the exact same court. As a result, a choice of court agreement is valid so long as it does not violate mandatory rules and expresses the true intention of the parties.[16] Third, it is necessary to mention that in a domestic case where the validity of an asymmetric choice of court clause in a loan contract is in dispute, Pudong New Area People’s Court of Shanghai analyzed the positions of both the borrower (non-option holder) and the bank (option holder) and concluded that the borrower’s position under an asymmetric jurisdiction clause is no weaker than under an exclusive one.[17]

In a small number of cases, Chinese courts refuse to recognize the validity of standard asymmetric choice of court agreements for violating specific rules of standard clause under Chinese law.[18] In Picc Xiamen Branch v. A.P. Moller – Maersk A/S, Zhejiang High People’s Court ruled that the disputed standard jurisdiction clause in the Bill of Lading lacks explicit, obvious forms to distinguish from other clauses, and the carrier (option holder) failed to establish that the jurisdiction clause had been negotiated with or given full notice and explanation to the shipper (non-option holder).[19] Therefore, if the drafting party fails to prompt or explain the standard asymmetric choice of court agreement to the other party, Chinese court may consider that this clause fails to represent the true intention of the parties and determine that the clause does not constitute a part of the contract.[20]

b. Effects

An asymmetric choice of court agreement has different effects upon option holder and non-option holder. For the non-option holder, the jurisdiction clause has an exclusive effect, restricting the party to taking the proceedings to the designated court only.[21]

As for the option holder, Chinese courts have two different explanations. On the one hand, an asymmetric choice of court agreement has both exclusive and non-exclusive effects on the option holder. While the designated court has exclusive jurisdiction when the option holder brings the case to the designated court, the option holder could also choose to sue the non-option holder in other competent courts.[22] On the other hand, some courts analyze that, apart from the designated court, the option holder could also sue in other competent courts, hence the clause is non-exclusive for the option holder. [23]

E. Construction

In Bank of Communications Trustee Ltd. v. China Energy Reserve and Chemicals Group Company Ltd., whether the jurisdiction clause in a guarantee agreement is an asymmetric one is in dispute. The clause provides:

The guarantor agrees (i) for the benefit of the trustee and bondholder, the courts of Hong Kong have exclusive jurisdiction to settle any disputes arising out of or relating to this Guarantee Agreement; (ii) the courts of Hong Kong are the most appropriate and convenient courts; and (iii) as a result, the guarantor will not argue that other courts are more appropriate or more convenient to accept service of process on its behalf.[24]

The SPC established that, when determining whether the parties’ agreement constitutes an asymmetric jurisdiction clause, the people’s court should construe the parties’ intention in a strict manner. The wording of the asymmetric choice of court clause should be clear and precise. The court reasoned as follows:

In general, contractual parties share equal rights and obligations, and therefore their rights regarding jurisdiction of litigation should also be equal. For this reason, their right to select a court should be the same unless the parties specifically agree otherwise. Under the principle of disposition of procedural rights, parties are allowed to agree on an asymmetric jurisdiction clause whereby one party’s right to choose the court is restricted while the other party is not. An asymmetric jurisdiction clause constitutes a significant, exceptional restriction on one party’s procedural rights, which should be determined through the parties’ clear and explicit intention. Otherwise, unequal or unfair rights and obligations shall not be presumed.[25]

Therefore, the SPC decided that the disputed jurisdiction clause is not an asymmetric one because it only highlights the exclusive jurisdiction of Hong Kong courts and doesn’t specify that the guarantee has the right to bring the proceedings to other competent courts.

F. Conclusion

It seems that Chinese courts take a liberal stance on asymmetric choice of court agreements, showing their respect to party autonomy and freedom to contract in international civil and commercial jurisdiction. In 2024, reviewed and approved by the SPC, two cases[26] recognizing the validity of asymmetric choice of court agreements are incorporated into the People’s Court Case Database as reference cases.[27] What’s more, as has been mentioned before, the Summary recognizes the validity of asymmetric choice of court agreements based on the assumption that those agreements are compatible with CPL’s provisions on exclusive jurisdiction or do not infringe certain weaker parties’ interests. Asymmetric choice of court agreements are ubiquitous in international civil and commercial contracts, especially in international financial contracts. Chinese courts are adapting to the development trends of international commercial practice and are getting prepared to deal with complicated civil and commercial disputes.

Nonetheless, there is still a long journey to go for Chinese courts to establish a sophisticated mechanism to handle such agreements. As for now, Chinese judicial practice regarding asymmetric choice of court agreements remains inconsistent. Additionally, most cases only involve simple disputes concerning whether Chinese courts have jurisdiction under such agreements. Things may get really complicated when other mechanisms in international civil procedure like lis pendens rule apply to such agreements. A proper solution to those issues relies on a unified and nuanced standard for courts to apply. Whether there will be a judicial interpretation or legislation regarding asymmetric choice of court agreements, and how Chinese courts will handle complex disputes related to such agreements remain to be observed in the future.

For practitioners, it is noteworthy that Chinese courts tend to apply lex fori on asymmetric choice of court agreements. The asymmetric nature of the jurisdiction clause should be precisely and clearly expressed. Additionally, if the asymmetric choice of court agreement is a standard one, under the Civil Code of PRC, it is suggested that the drafting party, when concluding a contract, should prompt the jurisdiction clause through conspicuous indicators such as distinctive words, symbols, or fonts that are sufficient to bring the clause to the other party’s attention. Upon the other party’s request, the drafting party should also fully explain the jurisdiction clause to the other party.

 

[1] See Mary Keyes and Brooke Adele Marshall, ‘Jurisdiction agreements: Exclusive, Optional and Asymmetrical’ (2015) 11 Journal of Private International Law 345, 349.

[2] See Louise Merrett, ‘The Future Enforcement of Asymmetric Jurisdiction Agreements’ (2018) 67 International and Comparative Law Quarterly 37, 40-41.

[3] See e.g., Ms X v. Banque Privee Edmond de Rothschild Europe (Societe), French Cour de cassation (Supreme Court) (First Civil Chamber) September 2012, Case 11-26.022, Commerzbank Aktiengesellschaft v Pauline Shipping Limited and Liquimar Tankers Management Inc [2017] EWHC 161 (Comm).

[4] Although asymmetric choice of court agreements may take various forms, the typical example abovementioned in note 2 is the most common type in practice. Therefore, asymmetric choice of court agreements in this article only refer to agreements under which one party may bring proceedings only in the chosen court but the other party may bring proceedings in other courts as well. See Brooke Marshall, Asymmetric Jurisdiction Clauses, (Oxford University Press 2023) 17; Trevor Hartley & Masato Dogauchi, Explanatory Report on the Convention of 30 June 2005 on Choice of Court Agreements (HCCH Publications 2013) 85.

[5] See Hang Seng Bank Ltd. v. Shanghai Tiancheng Storage Co., Ltd. & Lin Jianhua, (2019) Hu 74 Min Chu 127 Hao [(2019)?74??127?]; Sun Jichuan v. Chen Jianbao, (2021) Jing Min Xia Zhong 76 Hao [(2021)????76?]; XYZ Co. v. Chen & Su, (2022) Lu Min Zhong 567 Hao [(2022)???567?].

[6] See Hang Seng Bank Ltd. v. Shanghai Tiancheng Storage Co. Ltd. & Lin Jianhua, (2019) Hu 74 Min Chu 127 Hao [(2019)?74??127?], paras. 94.

[7] See DBS Bank (Hong Kong) Limited v. Forward (Zhaoqing) Semiconductor Co., Ltd. et al, (2011) Yue Gao Fa Li Min Zhong Zi Di 82 Hao [(2011)????????82?]; Suen Kawi Kam v China Dragon Select Growth Fund, (2019) Jing Min Xia Zhong 279 Hao [(2019)????279?]; Hwabao Trust Co., Ltd. v. Xiao Zhiyong, (2021) Hu Min Xia Zhong 60 Hao [(2021)????60?].

[8] See Hwabao Trust Co., Ltd. v. Xiao Zhiyong, (2021) Hu Min Xia Zhong 60 Hao [(2021)????60?], para. 10.

[9] See GOOD VANTAGE SHIPPING LIMITED v. Chen Fuxiang et al, (2020) Min 72 Min Chu 239 Hao [(2020)?72??239?], paras. 13, 15.

[10] See Beijing Huahai Machinery Co., Ltd. v. KAMAT GmbH & Co. KG, (2017) Jing 02 Min Zhong 4019 Hao [(2017)?02??4019?]; Winwin International Strategic Investment Funds Spc v. Chen Fanglin, (2019) Min Min Xia Zhong 151 Hao [(2019)????151?]; Antwerp Diamond Bank v. Weinstock Michel, (2013) Yue Gao Fa Li Min Zhong Zi Di 467 Hao [(2013)????????467?]; Guosen Securities (Hong Kong) Financial Holdings Co., Ltd v. Yunnan Zhongyuan Industrial Group Co., Ltd. et al, (2017) Zui Gao Fa Min Xia Zhong 423 Hao [(2017)??????423?]; Picc Xiamen Branch v. A.P. Moller – Maersk A/S, (2017) Zhe Min Xia Zhong 119 Hao [(2017)????119?]; Zhu Yuquan v. AxiCorp Financial Services Pty Ltd, (2021) Jing Min Zhong 893 Hao [(2021)???893?].

[11] Article 270 of CPL provides: ‘This Part (Part 4 of CPL, Special Provisions on Foreign-Related Civil Procedures) shall apply to foreign-related civil actions within the People’s Republic of China. For issues not addressed in this Part, other provisions of this Law shall apply.’

[12] See Antwerp Diamond Bank v. Weinstock Michel, (2013) Yue Gao Fa Li Min Zhong Zi Di 467 Hao [(2013)????????467?]; Suen Kawi Kam v. China Dragon Select Growth Fund, (2019) Jing Min Xia Zhong 279 Hao [(2019)????279?]; GOOD VANTAGE SHIPPING LIMITED v. Chen Fuxiang et al, (2020) Min 72 Min Chu 239 Hao [(2020)?72??239?]; Hwabao Trust Co., Ltd. v. Xiao Zhiyong, (2021) Hu Min Xia Zhong 60 Hao [(2021)????60?]; Guosen Securities (Hong Kong) Financial Holdings Co., Ltd v. Yunnan Zhongyuan Industrial Group Co., Ltd. et al, (2017) Zui Gao Fa Min Xia Zhong 423 Hao [(2017)??????423?]; Picc Xiamen Branch v. A.P. Moller – Maersk A/S, (2017) Zhe Min Xia Zhong 119 Hao [(2017)????119?]; Zhu Yuquan v. AxiCorp Financial Services Pty Ltd, (2021) Jing Min Zhong 893 Hao [(2021)???893?].

[13] See e.g. Sun Jichuan v. Chen Jianbao, (2021) Jing Min Xia Zhong 76 Hao [(2021)????76?]; XYZ Co. v. Chen & Su, (2022) Lu Min Zhong 567 Hao [(2022)???567?]; GOOD VANTAGE SHIPPING LIMITED v. Chen Fuxiang et al, (2020) Min 72 Min Chu 239 Hao [(2020)?72??239?]; Zhu Yuquan v. AxiCorp Financial Services Pty Ltd, (2021) Jing Min Zhong 893 Hao [(2021)???893?].

[14] See Winwin International Strategic Investment Funds Spc v. Chen Fanglin, (2019) Min Min Xia Zhong 151 Hao [(2019)????151?], para. 2.

[15] See Antwerp Diamond Bank v. Weinstock Michel, (2013) Yue Gao Fa Li Min Zhong Zi Di 467 Hao [(2013)????????467?]; Sun Jichuan v. Chen Jianbao, (2021) Jing Min Xia Zhong 76 Hao [(2021)????76?].

[16] See Sun Jichuan v. Chen Jianbao, (2021) Jing Min Xia Zhong 76 Hao [(2021)????76?], para. 15.

[17] ‘On the one hand, the borrower’s exclusive choice could facilitate the enforcement of judgements. On the other hand, the bank’s right to choose the competent court could reduce commercial costs, which will eventually benefit ordinary clients (including the borrower). In this sense, the borrower’s position is no weaker than under an exclusive jurisdiction clause.’ See Bank of Tianjin CO., LTD. Shanghai Branch v. Gong Chongfang et al, (2022) Hu 0115 Min Chu 87551 Hao [(2022)?0115??87551?], para. 7.

[18] See Shaoxing Haoyi Trading Co., Ltd. v. GMA-CDMS et al, (2016) Zhe Min Xia Zhong [(2016)????294?]; Picc Xiamen Branch v. A.P. Moller – Maersk A/S, (2017) Zhe Min Xia Zhong 119 Hao [(2017)????119?].

[19] See Picc Xiamen Branch v. A.P. Moller – Maersk A/S, (2017) Zhe Min Xia Zhong 119 Hao [(2017)????119?], para. 10.

[20] Article 496, paragraph 2 of the Civil Code of PRC provides: ‘Upon concluding a contract, where a standard clause is used, the party providing the standard clause shall determine the parties’ rights and obligations in compliance with the principle of fairness, and shall, in a reasonable manner, call the other party’s attention to the clause concerning the other party’s major interests and concerns, such as a clause that exempts or alleviates the liability of the party providing the standard clause, and give explanations of such clause upon request of the other party. Where the party providing the standard clause fails to perform the aforementioned obligation of calling attention or giving explanations, thus resulting in the other party’s failure to pay attention to or understand the clause concerning its major interests and concerns, the other party may claim that such clause does not become part of the contract.’ See Civil Code of the People’s Republic of China, The State Council of the People’s Republic of China, https://english.www.gov.cn/archive/lawsregulations/202012/31/content_WS5fedad98c6d0f72576943005.html, visited on 10th March, 2025.

[21] See Sun Jichuan v. Chen Jianbao, (2021) Jing Min Xia Zhong 76 Hao [(2021)????76?].

[22] See Winwin International Strategic Investment Funds Spc v. Chen Fanglin, (2019) Min Min Xia Zhong 151 Hao [(2019)????151?]; GOOD VANTAGE SHIPPING LIMITED v. Chen Fuxiang et al, (2020) Min 72 Min Chu 239 Hao [(2020)?72??239?].

[23] See Suen Kawi Kam v. China Dragon Select Growth Fund, (2019) Jing Min Xia Zhong 279 Hao [(2019)????279?]; Hwabao Trust Co., Ltd. v. Xiao Zhiyong, (2021) Hu Min Xia Zhong 60 Hao [(2021)????60?].

[24] See Bank of Communications Trustee Ltd. v. China Energy Reserve and Chemicals Group Company Ltd., (2021) Zui Gao Fa Min Zai 277 Hao [(2021)?????277?], para. 25.

[25] See Bank of Communications Trustee Ltd. v. China Energy Reserve and Chemicals Group Company Ltd., (2021) Zui Gao Fa Min Zai 277 Hao [(2021)?????277?], para. 26.

[26] See Bank of Communications Trustee Ltd. v. China Energy Reserve and Chemicals Group Company Ltd., (2021) Zui Gao Fa Min Zai 277 Hao [(2021)?????277?]; XYZ Co. v. Chen & Su, (2022) Lu Min Zhong 567 Hao [(2022)???567?].

[27] According to Article 19 of Procedures for the Construction and Operation of the People’s Court Case Database, the people’s courts should refer to similar cases of the Database when hearing cases. However, this reference may not be used as a basis of the adjudication. See Susan Finder, Update on the People’s Court Case Database, Supreme People’s Court Monitor, https://supremepeoplescourtmonitor.com/2024/12/, visited on 26th February 2025.

Limitation period of the enforcement of a UK judgment in Greece

A judgment issued by the Division of Maritime Disputes of the Piraeus first instance court at the end of last year [nr. 3400/2024, unreported] was confronted with an issue which seldomly appears before Greek courts.

The issue raised before the Piraeus Court of First Instance, in the context of Regulation 44/01, was the following: Is it permissible to revoke the recognition of a foreign (English) judgment (order) that  was declared  enforceable in Greece, when allegedly it is no longer enforceable in the State of origin?

The court approached the case from three perspectives:

Firstly, it clarified that a decision of the Supreme Court issued five years ago [Areios Pagos nr. 767/2019], allowing the revocation of the enforceability of a foreign judgment under similar circumstances according to Greek law, cannot be considered as relevant precedent, because it concerned a US judgment, and not a decision of an EU Member State court of law.

It then examined and highlighted the relevant jurisprudence of the CJEU, which ratione materiae resembles to the dispute at issue, i.e., under the Brussels I regime. It stressed that revocation of enforceability under Reg. 44/01 is strictly allowed for specified grounds only, with the case at hand, i.e., loss of enforceability in the state of origin, not being such a ground. The party against whom enforcement is sought in the executing Member State, could raise such a ground, only in the context of enforcement proceedings in the executing state, the court clarified.

Finally, it went into a detailed analysis and reference to the defences against enforcement under English law, focusing on the provisions of the UK Civil Procedure Rules and the Limitation Act, and identifying relevant case law of the English courts. Relevantly, the Piraeus court rejected in substance the arguments raised by the applicants, noting that under English law the judgment of the English court at hand had not lost its enforceability in principle, but rather that special conditions must be met for enforcement in UK to be authorised (i.e., existence of property there, not previously found). Juxtaposing English and Greek law, the Piraeus court made the distinction of enforceability of judgments and the existence of additional modalities, procedures or preconditions that must be fulfilled for enforcement proceedings to take place.

This is one of the rare decisions published by Greek courts, which demonstrates the potential complexity of the subject matter under the Brussels I Regulation, which reappears sporadically, although it gave way to Regulation 1215/2012 some ten years ago.

The specificity of the case lies in the distinctive time of its occurrence: the ground of refusal did not occur at one of the exequatur stages [application to declare enforceability, appeal, second appeal], but much later, when the remedies under Brussels I before the courts of the state of execution have been unsuccessfully exhausted by the debtor.

The likelihood of similar situations occurring under the current regime of Regulation Brussels I bis is scarce. In this case, the judgment debtor is left with either the opposition (stay of execution) under Article 933 of the Greek Code of Civil Procedure, or the filing of a negative declaratory action, in case the enforcement procedure has not been initiated by the judgment creditor.

Finally, let us not forget that the United Kingdom has left the European Union, and, for the time being, there is no direct commencement of enforcement in Greek territory, such as the model of Regulation nr. 1215/2012, not even the previous system of exequatur under EU Regulation nr. 44/2001. A new corridor is expected to open later this year, given that the UK has ratified the Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

For further reading on the issue, see Requejo-Isidro(-Chiapponi), Brussels I bis, A Commentary on Regulation (EU) 1215/2012 (2022), Art. 41, nos. 41.22 et seq, Althammer, in: Simons/Hausmann, Brussels I Regulation – Kommentar zur VO (?G) 44/2001 und zum Übereinkommen von Lugano, Unalex Kommentar (2012), Art. 38, nos. 26 & 29); Geimer/Schütze, Europäisches Zivilverfahrensrecht (3rd ed., 2010), Art. 41, no. 44 et seq.

Hot off the press and published in the Cambridge Law Journal, the article “The Inference of Similarity,” written by Marcus Teo, delves into the intricacies of what has traditionally been referred to as the “presumption of similarity” in English legal proceedings. Teo’s work challenges the conventional understanding of this presumption, arguing that it should be seen not as a true presumption but rather as an inference that courts can draw under certain circumstances.

Teo begins by outlining the challenges litigants who wish to rely on foreign law in English courts face. They must first demonstrate that the relevant choice-of-law rule selects the foreign law as applicable and then prove that the foreign law supports their claim or defence. This task is often complicated by the patchy or vague nature of foreign law evidence, leading courts to apply what has been termed a “presumption of similarity”—the idea that foreign law is presumed similar to English law when not sufficiently proven.

However, Teo argues that this “presumption” is misleading. The paper contends that it should not be understood as a true presumption but rather as an inference that courts can draw when there is reliable evidence to suggest that English and foreign courts would render similar rulings on the same facts. This distinction is crucial because a true presumption would be unprincipled, lacking the justifications of logic, convenience, and policy that support other legal presumptions.

Teo’s paper further explores the nature of legal presumptions and inferences, providing a detailed analysis of how they function within the legal system. He explains that legal presumptions are meant to facilitate practical reasoning in situations of evidential uncertainty, allowing courts to proceed “as if” a presumed fact exists until contrary evidence is presented. In contrast, inferences are conclusions drawn from sufficient evidence, representing an actual belief that the inferred fact exists.

The paper also addresses the implications of understanding the “presumption of similarity” as an inference rather than a true presumption. Teo argues that this understanding resolves various controversies surrounding its use in civil proceedings and does not render the proof of foreign law unpredictable or inconvenient in practice. The author emphasises that courts should aim to replicate the ruling a foreign court would render on similar facts, and when English law reflects a shared tradition or universal ethos, this may be enough to infer that a foreign court would render a similar ruling.

Teo’s insights have significant doctrinal implications, particularly in cases where foreign law is partially proven. He explains that when a party has proven only part of the foreign law, the inference of similarity can still be drawn if the court can reliably conclude that the foreign court would likely render a ruling similar to English law’s. This approach prevents parties from using the presumption as a tactical move to fill gaps in their foreign law evidence.

Marcus Teo’s paper offers a fresh perspective on the “presumption of similarity” in English law, advocating for a more nuanced understanding of it as an inference. This shift in perspective not only clarifies the role of foreign law in English courts but also ensures that the application of foreign law aligns with the substantive values underlying choice-of-law rules. As legal scholars and practitioners continue to grapple with the complexities of foreign law, Teo’s work provides a valuable framework for navigating these challenges.

For those interested, the article may be found here!

The latest issue of the RabelsZ (Rabels Zeitschrift für ausländisches und internationales Privatrecht) has been published. Since 2024, RabelsZ has been an open access publication, with all articles freely available to readers online. The focal point of the first issue of 2025 is international and comparative family law, with contributions critically examining the interactions between […]

Louise Ellen Teitz (Roger Williams University School of Law) has posted Harmonizing Private International Law and International Private Law Through Softlaw on SSRN. The abstract of the article, a homage to Symeon Symeonides and set to be published in the Willamette Law Review, reads as follows: This article, prepared for a celebration of the career […]

ConflictofLaws.net is happy to announce Saloni Khanderia from Jindal Global Law School as our new General Editor. Saloni joined the blog’s Editorial Board in 2019 and has been an active contributor ever since. She takes over from Jeanne Huang (University of Sydney) and will serve as the blog’s General Editor together with Tobias Lutzi (University of Augsburg).

The Editorial Board is indebted to Jeanne for her over two years of service as General Editor. During her tenure, important changes have been implemented regarding the blog’s operation, including the redesign of our frontpage with the new calendar feature. At the same time, our community has continued to grow to more than 2,5k subscribers of our e-mail newsletter and 5k followers on LinkedIn. We’re deeply grateful for the time and energy she has dedicated to the blog and are delighted that she will stay on the Editorial Board.

On 4 March 2025, Prof. Thomas Kadner-Graziano presented publicly on line the project of research and the achievements to date of the EAPIL’s Working Group on the Feasibility of a European Private International Law Act (to which I belong). A few days earlier, the EAPIL blog had informed about an article of Prof. K. Boele-Woelki […]

The UK Supreme Court judgment in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, upholding an anti-suit injunction restraining Russian proceedings brought in violation of an arbitration agreement providing for a seat in France, has caused significant interest. We covered it on the EAPIL Blog in a post noting the judgment and in a […]

By Sophia Tang, Wuhan University

 

China’s New Civil Procedure Law adopted in 2023 and taking effect from 1 Jan 2024 introduces significant changes to the previous civil procedure law regarding cross-border litigation. One of the key changes pertains to choice of court agreements. In the past, Chinese law on choice of court agreements has been criticized for being outdated and inconsistent with international common practice, particularly because it requires choice of court clauses to be in writing and mandates that the chosen court must have “practical connections” with the dispute. After China signed the Hague Choice of Court Convention, there was hope that China might reform its domestic law to align with the Hague Convention’s terms and eventually ratify the Convention.

 

The New Civil Procedure Law retains the old provision on choice of court agreements, stating that parties can choose a court with practical connections to the dispute in writing (Article 35). This provision is included in the chapter dealing with jurisdiction in domestic cases, but traditionally, Chinese courts have applied the same requirements to choice of court clauses in cross-border cases.

 

The 2023 Amendment to the Civil Procedure Law introduces Article 277 as a new provision specifically addressing choice of court agreements in cross-border cases. It states that if parties in cross-border civil disputes choose Chinese courts in writing, Chinese courts will have jurisdiction. Notably, this provision does not require that the chosen Chinese courts have practical connections with the dispute. In other words, it may imply that when parties in cross-border disputes choose Chinese courts, Chinese courts will accept jurisdiction regardless of whether they have any connection to the dispute. The removal of the practical connection requirement is intended to encourage overseas parties to choose Chinese courts as a neutral forum for resolving disputes. This is a crucial step in enhancing the international reception of the Chinese International Commercial Court (CICC) and advancing China’s goal of becoming a dispute resolution hub for Belt and Road initiatives.

 

This change aligns with the Hague Choice of Court Convention, which respects party autonomy and reduces the requirements for making parties’ consent to the competent court effective. Additionally, the New Civil Procedure Law prevents Chinese courts from declining jurisdiction based on forum non conveniens (Art 282(2)) or lis pendens (Art 281(1)) when a choice of Chinese court clause exists, consistent with the duty of the chosen state under Article 5(2) of the Hague Choice of Court Convention.

 

However, controversy remains. Since Article 277 explicitly applies to situations where Chinese courts are chosen, it does not address the choice of foreign courts. The New Civil Procedure Law does not include a specific provision addressing the prerequisites for choosing foreign courts. It is likely that the prerequisites for choosing foreign courts will follow the general rule on prorogation jurisdiction in Article 35. Pursuant to this interpretation, if parties choose a foreign court, the choice is valid only if it is made in writing and the chosen court has practical connections with the dispute. This creates an asymmetric system in international jurisdiction, making it easier for parties to choose Chinese courts than foreign courts. It leaves room for Chinese court to compete with a chosen foreign court, which may demonstrate China’s policy to promote the international influence of Chinese courts and to protect the jurisdiction of Chinese courts in China-related disputes.

 

This asymmetric system is barely compatible with the Hague Choice of Court Convention, which is based on reciprocity. If China ratifies the Hague Convention, the asymmetric system cannot function effectively. Under Article 6 of the Convention, a non-chosen court of a Contracting State must suspend or dismiss proceedings. Even if a choice of foreign court clause is invalid under Chinese law, it would not meet any of the exceptional grounds listed in Article 6. The lack of a practical connection with the chosen court cannot be interpreted as leading to a “manifest injustice” or being “manifestly contrary to the public policy” of China.

 

Of course, because the New Civil Procedure Law does not clarify the prerequisites for choosing foreign courts, alternative interpretations are possible. Article 280 provides that if parties conclude an exclusive choice of court clause selecting a foreign court, and this choice does not violate Chinese exclusive jurisdiction or affect China’s sovereignty, security, and public interest, Chinese courts may decline jurisdiction if the same dispute has been brought before them. This suggests that China does not intend to create a significant difference between the choice of foreign and Chinese courts. If this is indeed the legislative intention, one alternative interpretation is that Article 35 should apply exclusively to choice of court clauses in domestic proceedings. In the absence of clear rules governing choice of foreign court clauses in cross-border proceedings, this situation can be analogized to the choice of Chinese courts in such proceedings. Consequently, the same conditions outlined in Article 277 should apply equally to the choice of foreign courts. This interpretation would enhance the law’s compatibility with the Hague Choice of Court Convention.

 

It is not yet clear which interpretation will ultimately be accepted. The Supreme People’s Court (SPC) should provide judicial guidance on this matter. Hopefully, bearing in mind the possibility of ratifying the Hague Choice of Court Convention, the SPC will adopt the second interpretation to pave the way for China’s ratification of the Convention

On Tuesday, 11 March 2025, 12pm CET, ConflictofLaws.net will be hosting an ad-hoc virtual roundtable on the Commission’s Rome II Report.

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Guest post by Danilo Ruggero Di Bella (Bottega Di Bella)

This post delves into the issues stemming from the exclusive jurisdiction of the Unified Patent Court (UPC) on interim relief in relation with the judicial support of the arbitrations administered by the Patent Mediation and Arbitration Centre (PMAC).

Risks of divesting State courts of competence on interim measures 

On one hand, article 32(1)(c) UPC Agreement (UPCA) provides for the exclusive jurisdiction of the UPC to issue provisional measures in disputes concerning classical European patents and European patents with unitary effect. Under article 62 UPCA and Rules 206 and 211 of the UPC Rules of Procedure (UPC RoP), the UPC may grant interim injunctions against an alleged infringer or against an intermediary whose services are used by the alleged infringer, intended to prevent any imminent infringement, to prohibit the continuation of the alleged infringement under the threat of recurring penalties, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the patent holder. The UPC may also order the provisional seizure or delivery up of the products suspected of infringing a patent so as to prevent their entry into, or movement, within the channels of commerce. Further, the UPC may order a precautionary seizure of the movable and immovable property of the defendant (such its bank accounts), if an applicant demonstrates circumstances likely to endanger the recovery of damages, as well as an interim award of costs. Additionally, under article 60 UPCA, the UPC may order provisional measures to preserve evidence in respect of the alleged infringement and to inspect premises.

On the other hand, PMAC arbitrations can be seated everywhere in the world (Rule 4 PMAC Rules of Operation) and its arbitral awards can be enforced practically everywhere around the world (under the NY Convention). This means that the competent State court for the assistance and supervision of the arbitration may not necessarily coincide with a court of a UPC Contracting Member State. Such State courts play three fundamental functions in support of the arbitral proceedings, including – for what matters here – the issuance of provisional measures (the other two functions being the judicial appointment of arbitrators and the taking of evidence). Normally, the competent State court for the issuance of the provisional measures is the State court at the place where the arbitral award will be enforced or the court at the place where the measures are to be executed (e.g., article 8 of Spain’s Arbitration law which is largely based on the UNCITRAL Model Law on International Commercial Arbitration).

Hence, it is difficult to reconcile the exclusive competence of the UPC on interim measures with the world reach of PMAC arbitrations, since a literal interpretation of article 32(1)(c) UPC Agreement would prevent any State courts from issuing any necessary interim measures. Arguably, while such exclusivity granted to the UPC would not prevent PMAC arbitral tribunals from ordering provisional measures, it does exclude the jurisdiction of other State courts for obtaining interim relief. Thus, this may leave the plaintiff with no protection at the outset of the dispute when the panel of a PMAC arbitration is not already in place to entertain the case yet.

This raises the question whether such exclusivity on provisional measures is desirable, especially, where the interim relief is meant to be executed in a jurisdiction beyond the territory of the UPC, where the UPC provisional measure may not be enforceable at all, and the defendant may object the competence of the State court seized of the application on interim relief because of the UPC exclusivity on such measure.

For instance, in case a dispute arises between two parties who had contractually agreed to solve their differences by way of a PMAC arbitration to be seated in London, it may prove difficult for the plaintiff to apply to English courts for an urgent interim relief to be enforced in the UK (for example, to seize certain products suspected of infringing its patent that have landed at Heathrow airport) pending the constitution of the arbitral tribunal. The defendant may indeed argue that English courts are excluded from ordering any interim relief because of article 32(1)(c) UPC Agreement giving the UPC an exclusive jurisdiction on provisional measures. Therefore, the plaintiff may apply to the UPC for such an interim measure. However, since the UK is not a Contracting Member to the UPCA, English courts may not be obliged to enforce the interim relief granted by the UPC. Consequently, the plaintiff seeking such an urgent interim measure may find itself in a situation without an effective legal protection.

In this respect, it is interesting to recall the so-called “long-arm jurisdiction” of the UPC established by article 71b(2) of the Regulation (EU) ? 542/2014 of 15 May 2014 amending Regulation (EU) No 1215/2012 as regards the rules to be applied with respect to the UPC and the Benelux Court of Justice. This article equips the UPC with extraterritorial jurisdiction by enabling the UPC to grant provisional measures against a third-State domiciled defendant, even if the courts of a third State have jurisdiction as to the substance of the matter. In other words, article 71b(2) shows that the UPC may attempt to retain jurisdiction with respect to provisional measures even when another court has jurisdiction on a given case. If we transpose the implications of this provision to an arbitration setting where an arbitral tribunal seated in a third State is entrusted with deciding on the merits of the case, the UPC may still seek to retain jurisdiction with respect to provisional measures pending the constitution of the arbitral panel. In essence, Article 71b(2) corroborates that in principle the UPC can grant provisional measures even when the main proceedings are taking place in a third country. The problem arises when a party seeks to enforce the UPC-ordered provisional measures in such a third country. Indeed, it remains doubtful whether the UPC provisional measure can be enforced in the relevant third State.

On this issue, some UPCA provisions on provisional measures are somehow conscious of the territorial limitations of the UPC jurisdiction. For instance, part of article 61 UPCA – dealing with on freezing orders – is expressly directed at ordering a party not to remove from the UPC jurisdiction any assets located therein (precisely, to avoid that the infringer may escape liability by moving its assets beyond the UPC jurisdiction). However, article 61.1 UPC Agreement in fine seems to intentionally neglect the territorial limits of the UPC jurisdiction by enabling the UPC to order a party not to deal in any assets, whether located within its jurisdiction or not.

Admittedly, article 32 UPCA contains a carve-out to the exclusivity of the UPC competence by providing for the residual competence of the national courts of the Contracting States for any actions which do not fall within the exclusive competence of the UPC. Nevertheless, the various provisional measures available under the UPCA as detailed in its articles 60, 61, 62 (and elaborated further in Rules 206-211 UPC RoP) do not leave much to the residual competence of the national courts of the Contracting States.

Emergency arbitration as procedural solution

To somehow downsize this procedural issue, the adoption by the PMAC of an emergency arbitrator mechanism would be a welcome amendment in line with the best modern practices of international commercial arbitration. As the need for adopting provisional measures often arises at the outset of the arbitral proceedings, an emergency arbitrator – appointed before the arbitral tribunal is constituted – is in the position to order any interim relief. Further, unlike a State court, the arbitrator would not be prevented from adopting such interim relief by the exclusive competence of the UPC on such measures, since the exclusivity is directed only at excluding other State courts. Moreover, the emergency arbitrator’s provisional measure adopted in the form of an interim award may be more likely to be enforced than UPC orders in jurisdictions beyond the territory of the UPC. For example, the Singapore High Court has confirmed in 2022 that a foreign seated emergency arbitrator award was enforceable under the Singapore International Arbitration Act 1994.

This mechanism could be implemented by the PMAC in its arbitration rules. By way of comparison, for instance, article 43 of the WIPO Expedited Arbitration Rules provides for a detailed procedural framework on “Emergency Relief Proceedings.” According to such framework a party seeking urgent interim relief prior to the establishment of the arbitral tribunal can submit a request for such emergency relief to the Arbitration Institution, which within two days appoints a sole emergency arbitrator who may in turn order any interim measure it deems necessary.

Final remarks

With the view of resizing this procedural problem – which originates from the exclusive competence of the UPC on interim relief in relation to PMAC arbitrations seated in third countries where UPC provisional measure may not be enforceable – it is important to remark that the UPCA contains already a self-correcting mechanism. Namely, by providing at article 62 UPCA for the payment of a recurring penalty in case of non-compliance with a given provisional measure, the UPCA gives the applicant for an interim relief a pecuniary alternative that the UPC can order and enforce within its jurisdiction on the assets of the non-compliant defendant. However, the problem may reemerge in case of provisional measures aimed at preserving evidence located in a third country. In this case the payment of a recurring penalty may not serve its purpose and play only a mild deterrent effect. In such cases, the UPC may draw negative inferences from the lack of cooperation of the defendant, although neither the UPCA nor the UPC RoP expressly provide so.