Flux des sites DIP

Many thanks to Gustavo Cerqueira for this post:

The Société de législation comparée and the International Commission on Civil Status organize in partnership with the universities of Strasbourg and Reims an international symposium dedicated to the establishment of the content of foreign law and the need to consider appropriate instruments for cooperation.
The importance of the subject is major. On the one hand, the place nowadays given to foreign law in the settlement of disputes is growing. On the other hand, the intensified role of the various legal professions in the application of foreign law is indisputable. While judges and civil registrars were more traditionally exposed to such an office, nowadays it is notaries and lawyers in their dual role of advising and drafting documents who are called upon to take into account or implement foreign law.
In this context, while European Union law is often at the root of the involvement of these various actors in the application of foreign law, another, more recent phenomenon further increases the occurrences of how the law is handled: the extensive jurisdictional competition between European States as a result of Brexit. Indeed, Paris, Amsterdam, Brussels and other capitals establish courts and chambers specializing in international litigation and the application of foreign law.
The stakes are high. The search for appropriate cooperation instruments for a good knowledge of foreign law is necessary in the face of rapidly evolving national laws and case law. These changes, which are specific to each system, therefore reinforce the need for access to reliable foreign law content in order to guarantee legal certainty for litigants, as well as to avoid the civil liability of legal service providers and even fraud in the manipulation of foreign solutions.
The research envisaged takes place in an environment in which there are formal and informal cooperation mechanisms whose effectiveness is only partial in view of the complexity of the phenomena that covers the application of foreign law. Indeed, they were designed to deal with a foreign law that is supposed to be stable and not plural in its sources. These mechanisms, which are not very visible, are also unknown by the practitioners themselves. The current discussions at European (EU) and international level (Hague Conference) attest to the urgent need to consider responses in this area through one or more relevant and effective instruments.
This is the purpose of the symposium. After having established a large inventory, it will be necessary to discuss solutions adapted to the different requirements revealed by both the type of situation to be dealt with and the type of professional involved.
The symposium will be held on 28 November 2019 at the French Court of Cassation (Chambre Criminelle, 5, Quai de l’Horloge, 75001 – Paris).

Registration: emmanuelle.bouvier@legiscompare.com

Conference Directors:
Dr. Gustavo Cerqueira, Agrégé des Facultés de droit, University of Reims (France)
Dr. Nicolas Nord, Deputy Secretary General of the ICCS, Senior Lecturer at the University of Strasbourg (France)

On 12 September 2019, the University of Silesia in Katowice (Poland) will host a  conference on Regulation 650/2012 – the Succession Regulation and on the various issues relating to the succession matters within the European area of freedom, security and justice.

The conference is organized at the occasion of the annual session of the European Group for Private International Law (EGPIL/GEDIP) that will be held at the premises of the University of Silesia in Katowice at the invitation of a member of the Group and a Professor at Silesia – First CJEU Advocate General Maciej Szpunar. Readers of the blog will know that Szpunar AG regularly opines on matters of PIL.

The opening session of the conference will be devoted to the review of Member States’ first experiences with the application of the Succession Regulation. Practitioners undoubtedly are aware that experience with and questions re the application of the Regulation are now coming thick and fast.

This session will be followed by two panel discussions.

Scholars and practitioners speaking include Professor Stefania Bariatti (University of Milan), Professor Andrea Bonomi (University of Lausanne; with prof Patrick Wauthelet author of the standard work on the Regulation), Professor Jürgen Basedow (Max-Planck-Institut), Professor Christian Kohler (University of Saarbrücken), Professor Cristina González Beilfuss (University of Barcelona) Michael Wilderspin (European Commission; a regular agent for the EC in PIL cases at the CJEU); and Professor Paul Lagarde (University of Paris 1 – Panthéon-Sorbonne, Professor emeritus.

Upon the conclusion of the conference, on 13 September, the University of Silesia will award prof Lagarde a Doctorate Honoris Causa and he will deliver a commemorative lecture at this occasion: a good reason to stick around an extra day, I think.

Of note may be the most, most affordable fee of just under Euro 60 for such a stellar conference.

Draft programme of the conference is here. More details are available at the website of the University hosting the conference (scroll down for the English version).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 6.

 

The last issue of the Revue Critique de Droit International Privé will shortly be released. This is a special edition composed of four articles on Brexit. It also contains several case notes, inter alia, a commentary by Horatia Muir Watt on Vedanta v Lungowe, major decision on the parent company’s duty of care and private international law, rendered by the Supreme Court of the United Kingdom on 10 April 2019 (see also here).

The first article is authored by Paul James Cardwell (“Naviguer en eaux inconnues. Les défis rencontrés par la recherche juridique au Royaume-Uni à l’heure du Brexit”). The abstract reads as follows: “The consequences of the United Kingdom’s decision to leave the European Union (Brexit) remain uncertain still. For legal scholars, Brexit has posed a series of complex legal questions, some of which have not been considered for over 40 years, if at all. This article aims to consider some of the main questions that have arisen during the Brexit process, and some of the potential responses. The article also evaluates the challenges that Brexit represents for researchers and teachers in the various sub-disciplines within legal scholarship, including the fast-paced, ever changing legal landscape. Although only a small number of the questions and challenges can be considered here, it goes without say that Brexit will undoubtedly have significant consequences for the UK, the EU and its Member States as well as for the systems of global governance, in which private international lawyers are inherently linked”.

The second article (“Le Brexit et les conventions de La Haye”) is written by Hans van Loon. The abstract reads as follows: “There are two possible scenarios at present for the immediate future of private international law in the relationship between the United Kingdom and the European Union of Twenty-seven in the event of Brexit. Under the first, the “Withdrawal Agreement” approved by the European Council on 25th November 2018 enters into force; under the second (the “no-deal” scenario) the status quo will end abruptly on 31st October 2019. Both of these hypotheses have important and complex implications. Under the Withdrawal agreement, a transition period is organised and when this period ends, specific transitory provisions take over. In such a regime, the law issuing from the conventions has a significant role to play. But in the event of a no-deal Brexit, all the treaties establishing, and concluded by, the European Union, and, as a result, European Union secondary law, including the regulations on private international law cease immediately to apply to the United Kingdom. The Hague conventions, including the new convention of 2 July 2019 on the recognition and enforcement of foreign judgments in civil or commercial matters will fill this gap to a large extent. However, the consequences may nevertheless be brutal for citizens, and in order to mitigate these, the transitory provisions of the Withdrawal agreement should be applied here by analogy”.

The third article, written by Uglješa Grušic (“L’effet du Brexit sur le droit international privé du travail”), describes the likely effect of the withdrawal of the United Kingdom from the European Union on the private international law of employment. “More specifically, it deals with the likely effect of Brexit on employment law, the law of international jurisdiction in employment matters and the law on choice of law for employment matters in the United Kingdom and the European Union, with particular emphasis on private international law in England”.

The fourth article is authored by Louise Merrett (“La reconnaissance et l’exécution en Angleterre des jugements venant des États de l’Union européenne, post-Brexit”). It describes the likely effect of the withdrawal of the United Kingdom from the European Union on the recognition and enforcement of judgments from EU Members States: “If the UK leaves the European Union without any new agreement in place allowing for mutual recognition and enforcement, the recognition and enforcement of judgments from EU Members States will prima facie only be possible under the existing common law rules. This article will describe the common law rules and draw attention to the key differences between them and the rules which currently apply to the enforcement of judgments under the Brussels I Regulation recast”.

A full table of contents is available here.

On 24 July 2019 Nicaragua joined the HCCH Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Service Convention). For more information, click here.

In accordance with Article 28 of the Service Convention, there is a six-month objecting period which will end for Nicaragua on 25 January 2020. If a Contracting State objects, then the Convention will not enter into force at all for Nicaragua. However, an objection has never been made under this Article in practice.

In the absence of any objection, the Service Convention will enter into force for Nicaragua on 1 February 2020.

The latest State to join was Brazil (EIF: 1 June 2019), which signals a growing interest in this Convention in the Latin American region.

As we have reported earlier, the final conference for the EU-funded IC2BE project will take place in Antwerp on 21 and 22 November 2019.

We are happy to anounce that registration is now open. See here for the programme and free registration (only the dinner is to be paid by attendees). Antwerp is close to Brussels and Amsterdam and can easily be reached by train from either of those cities. There are many hotels providing affordable accommodation.

The conference will discuss the application of the European Enforcement Order (805/2004), European Payment Order (1896/2006), the European Small Claims Procedure (861/2007) and Account Preservation Order (655/2014) in Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Poland, and Spain, as well as by the Court of Justice of the EU.

The case law database of the IC2BE project is available here (not yet complete).

National seminars will also take place in the participating countries. See here for the dates.

The American Association of Private International Law (ASADIP) and the Regional Office for Latin America and the Caribbean (ROLAC) of the Hague Conference on Private International Law (HCCH) are seeking an intern to assist them in the academic work of the region’s network and to conduct legal research. An important focus of the internship will be the Hague Service and Evidence Conventions. Further information is available here (in Spanish only).

The candidate must either be an advanced student (having already taken Private International Law credits) or have graduated from a Bacherlor of Laws in a University of Latin American or the Caribbean region. For graduated candidates to be able to apply, no more than 3 years should have elapsed from their graduation.

Very good written and communications skills in both Spanish and English are required. This is a non-remunerated internship. The selected candidate is expected to work part-time (3 or 4 hours per day) from a distance. However, it is possible to do the internship at the ROLAC office in Buenos Aires, Argentina, or combined the internship with the possibility to work at a distance and on site.

The duration of the internship is 4 months to a year.

The deadline for applications is 20 August 2019.

The HCCH and the Department of Justice of the Government of the Hong Kong Special Administrative Region of the People’s Republic of China jointly organise the Inaugural Global Conference on the 2019 HCCH Judgments Convention:

The 2019 HCCH Judgments Convention:
Global Enforcement of Civil and Commercial Judgments

• Date: 9 September 2019
• Where: Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wan Chai, Hong Kong.

This Conference will provide an international forum for experts and interested parties to exchange their views concerning various aspects of 2019 HCCH Judgments Convention. Issues may include the instrument’s salient features; its benefits to parties; and its implications for cross-border trade and dispute resolution. It is envisaged that the event will promote the international community’s deeper understanding of, and ultimately greater participation in, the Convention.

The Conference will be conducted in English. Participation is free but the number of participants will be limited. Advance registration is required. For the advance registration, and all further information, go to: www.hcchjudgmentshk.org.

The event is supported by the Asian Academy of International Law.

I reported earlier on the decision at first instance in Arica Victims v Boliden Mineral. The Court of Appeal has now reversed the finding of Chilean law as lex causae, opting instead for Swedish law. Lindahl has good review here and I rely on it quite heavily for I do no speak Swedish.

Boliden Mineral exported toxic waste to Chile in the ’80s, prior to either Basel or EU or OECD restraints (or indeed bans) kicking in. A first issue for consideration was determination of lex causae. Rome II does not apply ratione temporis (it only applies to tortious events occurring after its date of entry into force) – residual Swedish private international law applies. My understanding at first instance was that the applicable law rule referred to lex loci damni, Chile. The Court of Appeal has gone for lex loci delicti commissi: whether this was by use of an exception or whether the court at first instance had simply misunderstood Swedish PIL, I do not know.

Having opted for lex loci delicti commissi, the Court of Appeal then considered where this was. Readers of the blog will know that this is relevant for CSR /business and human /environmental rights discussions. Lindahl’s Linda Hallberg and Tor Pöpke summarise the court’s approach:

In order to determine which country’s law applied to the case, the court examined a sequence of events that had influenced, to varying degrees, what had led to the alleged damage. According to the court, the decisive factor in the choice of law were acts and omissions that could be attributed to the Swedish mining company, as the case concerned this company’s liability for damages.

Instead of determining the principal location of the causative events using quantitative criteria, the court considered it to be where the qualitatively important elements had their centre of gravity. Further, in contrast with the district court’s conclusion, it held that the Swedish mining company’s alleged negligence had its centre in Sweden and therefore Swedish tort law should be applied in this case (the law of the place in which a delict is committed).

Unlike more ‘modern’ CSR cases the fact do not concern mother /daughter company relations yet the considerations of locus delicti commissi are nonetheless interesting.

The Court of first instance had employed Chilean’s longer statute of limitation. The Court of Appeal tried to stretch Sweden’s shorter one of 10 years (the case concerns a potentially tortious act which occurred more than 30 years ago): any subsequent damage that had been caused by the mining company’s failure to act during the period after the toxic waste had been shipped to Chile would advance the starting point for the limitation period. However this was at the latest 1999 and the 2013 action therefore had been taken too late.

On 25 June last the Supreme Court rejected further consideration, the Court of Appeal’s finding therefore stands.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 4, Heading 4.6.3, Chapter 8.

 

 

Profesor Dr. Francisco Javier Zamora Cabot and Dr. Maria Chiara Marullo (Chair of Private International Law at the Universitat Jaume I de Castellón) have recently published an article on International Sanctions and Human Rights.

Professor Zamora Cabot has kindly provided us with a short introduction to this topic:

The fight for the international protection of human rights is currently being developed on multiple fronts and through a diverse set of instruments and mechanisms. Thus, at the state level we can highlight, for instance, on the one hand, the use of powerful norms of an imperative nature, such as, in the United States, those that deal with serious problems such as torture or human trafficking, along with the emergence of an increasingly important regulation at a comparative level regarding the control of supply chains or the repression of the so-called modern slavery. Also at the state level, it should be noted, on the other hand, the trend that is becoming generalized in favor of facilitating access to justice for victims of human rights violations, being the ambit of the relations of companies with the latter a clear field of choice for it.

For its part, the international community, although it is not living a particularly brilliant time as regards the protection of the aforementioned rights, persists in the application of the body of laws generated in it, especially through the various institutionalized systems, and in the search for new instruments, such as those already adopted or in the process of being adopted in the area of the relations between companies and human rights, key in our days, with the inescapable reference of the role of the United Nations.

In addition, international sanctions have long been playing a relevant role in relation to the two levels we have been managing. The examples are countless, and so is the discussion that often arises, even when they have been conveyed through the international instances. For example, although they are defined and specified with technical accuracy, they often have a negative impact on those sectors of the population they should actually protect.

Trying to minimize these impacts, and opening up new ways in the international protection of human rights, a number of texts have appeared in recent times, with the pioneering impulse of the United States, along with other countries, which, through well-defined sanctions, combine the fight against the corruption with the fight against the serious violations of the rights above mentioned. This is a very timely approach, insofar as corruption and violations are often intimately related, as, for example, the Committee on Economic, Social and Cultural Rights of the United Nations Economic and Social Council emphasized through its General Comment No. 24,E/C.12/GC/24, in the context of business activities, urging States to take action against such corruption, providing them with the appropriate mechanisms and ensuring their independence and sufficient level of resources.

In short, the paradigm of the aforementioned approach would be the Global Magnitski Act of the United States, Public Law 114-328., 130 Stat. 2533, which covers also legal persons and is already resulting in a practice of prominence, and even reflections in other countries at the regulatory level. A norm that deserves an in-depth analysis and follow-up in its application, herald as it is of a new horizon in the struggle for human rights to which we alluded initially, without losing sight of the rigor and caution with which we must act. And this is due to the intrinsic character of international sanctions as instruments of restricted and exceptional application, complementary, but never substitutable in this order, of those already existing and of which there is evidence in these brief reflections.

The article (in Spanish) is available here.

I was thinking of using [2019] EWHC 946 (Comm) Idemia v Decatur for exam purposes hence beyond an initial Tweet, I am a bit late with reporting. However the judgment consists of 144 paras of pure jurisdictional argument – hence making it useful for oral exam but not for a written one: for where does one start? This is a typical case of reverse engineering: Decatur (which is an English company) and Tiger (which is incorporated in Bangladesh) have brought an action for the Discount Sums against Idemia in the courts of Bangladesh. Idemia (which is a French company) claims that that action (“the Bangladesh Action”) has been brought in breach of the jurisdiction provisions in the underlying contracts, which confer exclusive jurisdiction upon the competent courts of Geneva, Switzerland. Decatur and Tiger disagree, claiming that the subject matter of the Bangladesh Action is not covered by the jurisdiction provisions on which Idemia relies. Idemia says that its contractual right to be sued in Switzerland (and nowhere else) means that it cannot be forced to litigate in Bangladesh. As for the courts of Switzerland, Idemia says that the Swiss courts do not have power to issue the anti-suit injunction which it needs to restrain the further prosecution of the Bangladesh Action. Idemia claims to be entitled indirectly to enforce the jurisdiction provisions on which it relies by enforcing guarantees which Idemia claims that Decatur and Tiger have each given for the other’s obligations under the relevant contracts, and which contain English law and jurisdiction clauses. At 143 Salter DJ helpfully summarises the lengthy discussions in the judgment: 1 Decatur’s challenge to the jurisdiction succeeds. Idemia’s claim to found jurisdiction upon Decatur’s domicile in England fails, because Decatur has the better of the argument that jurisdiction on that basis (in relation both to the contractual and the tortious claims asserted in the present action) has been prorogued to the courts of Geneva by the jurisdiction provisions of the Decatur Agreement. Idemia has failed to establish a good arguable case that it can found jurisdiction against Decatur on the jurisdiction provisions of the Schedule 6 Document annexed to the Tiger Agreement. 2 Tiger’s challenge to the jurisdiction succeeds. Idemia has failed to establish a good arguable case that it can found jurisdiction against Tiger on the jurisdiction provisions of the Schedule 6 Document annexed to the Decatur Agreement. Idemia has also failed to establish a good arguable case that it can rely upon Decatur as an “anchor defendant”, so as to establish jurisdiction over Tiger as a necessary or proper party. 3 Mr Rahman’s challenge to the purported service on him at York Way succeeds. York Way was not his “last known residence” within the meaning of CPR 6.9 at the material time, since Idemia had been told that he no longer lived there. 4 Mr Rahman’s challenge to the service on him at Morris Place fails. He was validly and effectively served there at his registered “service address”, pursuant to the Companies Act 2006 s 1140, even though he was not at the material time present, domiciled or resident within the jurisdiction. Idemia has therefore succeeded in establishing that the English court has jurisdiction over Mr Rahman on the basis of that service. 5 Mr Rahman’s application for a stay of this action against him on forum non conveniens grounds succeeds. No sufficient factors link the claims made against Mr Rahman in the present action to England. There are, however, substantial connections with Bangladesh. Bangladesh is therefore the forum in which Idemia’s claims against Mr Rahman can most suitably be tried for the interests of all the parties and for the ends of justice. Geert. (Handbook of) European private international law, 2nd ed. 2016, much of Chapter 2.

Entries for the St. Petersburg International Legal Forum Private Law Prize 2020 will close on 15 October 2019. The first prize of 10 million rubles will be awarded to the author of the best academic work (monograph or article) published in the field of private law, private international law or comparative law since 1 January 2015. Textbooks and commentaries are not eligible for the prize. The prize expert committee consists of world renowned academics.

The prize will be awarded at the X St. Petersburg International Legal Forum in May 2020.

Further details on the conditions, eligibility and the prize expert committee may be accessed here.

The new Practice Guide and User Guide for the European Small Claims Procedure, prepared by Xandra Kramer (ESL, Erasmus University Rotterdam, Utrecht University) in collaboration with the European Commission and the European Judicial Network, have been published. These updates were necessitated by the amendments to the European Small Claims Regulation, resulting from Regulation No 2015/2421 as applicable since 14 July 2017. The European Small Claims Regulation provides a uniform, low threshold procedure for consumers to claim their rights in cross-border cases in the EU.

‘The most significant amendment is the raising of the monetary limit of the procedure from €2,000 to €5,000 (Article 2). Most other amendments aim at strengthening the use of distance communication technology, including to conduct oral hearings (Article 8), and the taking of evidence (Article 9) and enabling the e-service of documents (Article 13) and distant payment of court fees (Article 15a). Other amendments are that the primacy of the written procedure is underlined (Article 5), the practical assistance of parties is strengthened (Article 11) and the rule on minimum standard for review is clarified (Article 18). New provisions are inserted regarding the requirement that court fees should be proportionate (Article 15a), the language of the enforcement certificate (Article 21a) and the enforcement of court settlements (Article 23a). In addition, Regulation No 2015/2421 amended one provision of the Order for Payment Procedure (15). Article 17 of that Regulation now envisages a transfer to the European Small Claims Procedure in cases where a statement of opposition is lodged against the payment order, where the European Small Claims Procedure is applicable.’ (p. 12 Practice Guide).

One of the novelties in the User Guide and the Practice Guide is the link to available ADR mechanisms and the reference to the ODR platform, which informs consumers and practitioners about the existing alternatives and secure a more integrated approach to consumer dispute resolution. The publication of the new guides are part of a European consumer campaign launched in July. The Guides as well as other tools on and information about the Small Claims Procedure – including an infographic for consumers, a leaflet for legal professionals, a leaflet for businesses and a web toolkit – are available in the Small Claims Section of the e-Justice Portal.

The first Commentary on the Small Claims Regulation (861/2007) in Greece has just been published. The volume sheds light on all aspects of cross border small claims litigation within the EU, approaching the topic both from a domestic and an EU-case law viewpoint.

The authors are the following:

Prof. Arvanitakis (Aristotle University, Thessaloniki): Introduction, Articles 1-3 & 17-19

Ass. Professor Yiannopoulos (Democritus University, Thrace): Articles 4-8 & 13-15

Kalli Chronopoulou (Judge): Articles 9-12 & 15a-16

Dr. Karameros (Visiting Lecturer, Neapolis University, Paphos): Articles 20-29

 

This book is part of an ambitious project, inspired by Prof. Arvanitakis & Prof. Vassilakakis, which aims at publishing a full set of Commentaries on Private International Law EU – Regulations in Greek. The project kickstarted with the publication of the Commentary on the Brussels II bis Regulation (2016). Commentaries on the Brussels I a Regulation and at a later stage the Succession Regulation will follow.

Since the entry into force of the Treaty of Amsterdam in 1999, the European Union has adopted an impressive number of regulations in the field of Private International Law. As a result, Private International Law has gradually become a truly European discipline. However, a truly pan-European forum to discuss issues of European Private International Law is still missing. Following a conference in Berlin in 2018, a group of Private International Law scholars from all over Europe[*], therefore, felt that it was time for a European Association of Private International Law (EAPIL).

The Association will be established in late 2019 and its establishment celebrated at a conference to  be held at Aarhus University, Denmark, from 14 to 16 May 2020. The conference will bring together academics and practitioners from all over Europe and provide a unique opportunity to talk and think about European Private International Law in a pan-European fashion. Topics to be discussed will include the effects and the challenges of digitalization, the problems of fragmentation as well as other challenges the discipline is currently facing.

Confirmed speakers are:

• Marie-Élodie Ancel (Université Paris-Est Créteil)
• Francisco Garcimartín-Alférez (Autonomous University of Madrid)
• Burkhard Hess (Max Planck Institute Luxemburg)
• Thalia Kruger (University of Antwerp)
• Matthias Lehmann (University of Bonn)
• Ralf Michaels (Max Planck Institute Hamburg)
• Peter Arnt Nielsen (Copenhagen Business School)
• Haris Pamboukis (University of Athens)
• Gian Paolo Romano (University of Geneva)
• Marta Pertegás Sender (University of Maastricht)
• Maciej Szpunar (Court of Justice of the European Union)
• Andreas Stein (European Commission)
• Christiane Wendehorst (University of Vienna)

If you are interested in attending, please register via the conference website. For any other questions, please get in touch with the local organizer, Morten M. Fogt (mmf@law.au.dk).

Information about the European Association of Private International Law (EAPIL) including information about how to join will soon be made available on this blog!

[*]Apostolos Anthimos, Sabine Corneloup, Gilles Cuniberti, Morten M. Fogt, Pietro Franzina, Agnieszka Frackowiak-Adamska, Jan von Hein, Thomas Kadner Graziano, Eva-Maria Kieninger, Johan Meeusen, Pedro de Miguel Asensio, Marta Requejo Isidro, and Giesela Rühl.

 

Cem Veziroglu, doctoral candidate at the University of Istanbul and research assistant at Koc University Law School has provided us with an abstract of his paper forthcoming in the European Company and Financial Law Review.  <!–more–>

Arbitrating Corporate Law Disputes:

A Comparative Analysis of Turkish, Swiss and German Law

Cem Veziroglu

The resolution of corporate law disputes by arbitration rather than litigation in national courts has been frequently favoured due to several advantages of arbitration, as well as the risks related to the lack of judicial independence, particularly in emerging markets. While the availability of arbitration appears to be a major factor influencing investment decisions, and there is a strong commercial interest in arbitrating corporate law disputes, the issue is unsurprisingly debated in respect of certain characteristics of the joint stock company as a legal entity. Hence the issue comprises a series of legal challenges related to both corporate law and arbitration law.

In a paper forthcoming in the European Company and Financial Law Review, I tackle the arbitrability of corporate law disputes and the validity of arbitration clauses stipulated in the articles of association (“AoA”) of joint stock companies. The study compares Turkish law with that of Germany and Switzerland and in particular tries to shed light on the current position of Turkish law with respect to (i) arbitrability of corporate law disputes, such as validity of general assembly resolutions and requests for corporate dissolution, (ii) validity and binding nature of an arbitration clause provided in the AoA. The paper also suggests practicable legislative recommendations as well as a model arbitration clause.

Arbitrability of Corporate Law Disputes

Under Turkish law corporate law disputes are, in principle, considered to be arbitrable, whereas disputes concerning the validity of general assembly resolutions and corporate dissolution are still heavily debated. I argue that both types of disputes are arbitrable, albeit judicial dissolution requests accommodate practical hurdles due to the magnitude of remedial power granted to judges by law. Moreover, I suggest that arbitral awards should be granted an erga omnes effect (the effects exceeding the parties to the dispute), as long as the interested third parties are provided with the necessary procedural protection. These procedural mechanisms may include the pending and consolidation of all actions filed before the arbitral tribunal and collective – or impartial – selection of arbitrators in multy-party arbitral proceedings.

It seems that the case law has thus far followed the distinction adopted by the orthodox doctrine in general terms; namely disputes concerning the validity of general assembly resolutions and corporate dissolution are deemed inarbitrable. However, considering the ever-growing pro-arbitration tendency in Turkey –in parallel with many other jurisdictions– it would not be surprising if a more flexible approach is eventually adopted in case law as well.

Place of the Arbitration Clause: Articles of Association or Shareholders Agreement?

It is necessary to provide an arbitration clause in the AoA of the company, rather than a shareholders’ agreement (“SHA”), in order to (i) prevent contradicting judgments handed down in parallel proceedings, (ii) be able to request claims peculiar to corporate law and (iii) ensure the binding effect vis-à-vis the company, board members and new shareholders as well as the current shareholders.

Validity of an Arbitration Clause Provided in the AoA

There is no rule under Turkish corporate law that restricts contractual freedom within the AoA of privately held joint stock companies that has the effect of restraining arbitration clauses. An arbitration clause can, therefore, be validly provided either in the original AoA or by way of an amendment thereof by way of a unanimous vote. However, the binding effect of the arbitration clause in question depends on its legal nature, namely, ‘corporative’ or ‘formal’ (contractual).

Addressing this issue, the paper proposes to adopt a two-step test and concludes that if an arbitration clause stipulated in the AoA is deemed corporative in nature, the company, the board members, the new shareholders, and the current shareholders are bound by such an arbitration clause. In the event that the arbitration clause in question is deemed to be a formal provision, it may still remain effective only among the parties as a purely contractual term.

Policy Recommendations

The arbitrability of corporate law disputes, the validity of arbitration clauses stipulated in the AoAs and the procedural standards to protect third parties’ interests should be clarified by an explicit legal provision. In fact, Article 697n of the Swiss Draft Code of Obligations dated 23 November 2016[1] and Italian Legislative Decree of 17 January 2003 No. 5 Articles 34-37 may offer motivating examples in this respect.

According to German Federal Court’s decision in 2009[2], an arbitration clause in the AoA is valid, provided that the protections and the opportunity of shareholders to participate in the proceedings comparable to those in national court proceedings are respected. Therefore Turkish courts should examine the arbitration clause in question in terms of the protection provided to shareholders, rather than applying an outright ban on such clauses in the AoA.

The leading arbitration institutions should draft and publish rules for corporate law disputes as annexes to their existing rules of arbitration. These should consider the issues peculiar to corporate law disputes. Hence, they should provide such mechanisms as the pending and consolidation of actions filed before the arbitral tribunal; collective -or impartial- selection of arbitrators so as to provide the minimum legal procedural protection granted to shareholders. A comprehensive example is the German Arbitration Institution’s ‘DIS-Supplementary Rules for Corporate Law Disputes 09’[3].

With a view to facilitating the incorporation of applicable and valid arbitration clauses into the AoA, a model arbitration clause for corporate law disputes should be published by leading arbitration institutions. Such a model clause may be inspired by the draft model clause found in the paper referenced above.

[1]     https://www.admin.ch/opc/fr/federal-gazette/2017/625.pdf.

[2]     BGH, 6 April 2009, II ZR 255/08, BGHZ 180, 221.

[3]     The said rules can be found at: http://www.disarb.org/en/16/rules/dis-supplementary-rules-for-corporate-law-disputes-09-srcold-id15.

On 12 September 2019, the University of Silesia in Katowice (Poland) will host an international conference on the Regulation (EU) No 650/2012 of the European Parliament and of the Council – the Succession Regulation and on the various issues relating to the succession matters within the European area of freedom, security and justice.

The conference is organized at the occasion of the annual session of the European Group for Private International Law (EGPIL/GEDIP) that will be held at the premises of the University of Silesia in Katowice at the invitation of a member of the Group and a Professor of this University – First Advocate General at the CJEU Maciej Szpunar.

The opening session of the conference will be devoted to the review of Member States’ first experiences with the application of the Succession Regulation. This session will be followed by two panel discussions.

The opening session and both panels will be attended by renowned scholars and practitioners, including but not limited to: Professor Stefania Bariatti (University of Milan), Professor Andrea Bonomi (University of Lausanne), Professor Jürgen Basedow (Max-Planck-Institut für ausländisches und internationales Privatrecht), Professor Christian Kohler (University of Saarbrücken), Professor Paul Lagarde (University of Paris 1 – Panthéon-Sorbonne, Professor emeritus), Professor Cristina González Beilfuss (University of Barcelona) and Michael Wilderspin (European Commission).

The working language of the conference is English, no translation is foreseen.

The fee covering participation in the conference, additional materials and meals including attendance at the reception held after the closing of the deliberations equals to less than 60 EUR.

The draft programme of the conference is available here. More details are available at the website of the University hosting the conference.

Upon the conclusion of the conference, on 13 September 2019, the University of Silesia will award a Doctorate Honoris Causa to the renowned scholar, Professor Paul Lagarde who will deliver a commemorative lecture at this occasion. This ceremony will start at 11:00 AM.

For any inquires that you may have relating to these events, please contact monika.jagielska@us.edu.pl or krzysztof.pacula@curia.europa.eu.

In [2019] EWHC 1747 (Comm) LIC Telecommunications et al v VTB Capital et al Moulder J suggests an unorthodox interpretations of Article 25 of the Brussels Ia Regulation. (Note also her very critical view at 22 of one of the experts, whom she found having confused his role as expert with a role as advocate). Much of the lengthy judgment is devoted to intricate discussions of Luxembourgish corporate law (hence the need for expert evidence) and the jurisdictional issues are, somewhat illogically, discussed towards the end of the judgment, at 245 ff.

Maze, one of the defendants, acts as a manager of V2 pursuant to a directorship agreement dated 26 May 2015 (the “Directorship Agreement”). It relies on the effect of clause 19 of the Directorship Agreement and submitted that claims against it are subject to the exclusive jurisdiction of the courts of Luxembourg pursuant to Article 25 Brussels Ia. Clause 19 provides: 

“for the benefit of the Manager, the Shareholder and the Company hereby irrevocably, specially and expressly agree that the courts of Luxembourg city have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the courts of Luxembourg city. Nothing in this clause limits however the rights of the Manager to bring proceedings against the Company in connection with this Agreement in any other court of competent jurisdiction or concurrently in more than one jurisdiction.”

The clause is asymmetric aka hybrid aka unilateral. (See e.g. my discussion of Rothschild etc.). These clauses as I have noted elsewhere highlight the clear insufficiency of Brussels Ia’s new lex fori prorogati (including renvoi) rule for choice of court. Which court has been prorogated, hence also lex fori prorogati, is not clear when the clause is asymmetric.

Moulder J discusses [2017] EWHC 161 (Comm) Commerzbank v Liquimar Tankers as precedent: I reviewed it here and signalled at the time that it would not be the last we would hear of the issue. In that case Cranston J held ‘There is nothing in Article 25 that a valid jurisdiction agreement has to exclude any courts, in particular non EU Courts. Article 17, penultimate paragraph, of the Brussels Convention recognised asymmetric jurisdiction clauses. To my mind it would need a strong indication that Brussels 1 Recast somehow renders what is a regular feature of financial documentation in the EU ineffective.‘ I was never taken by that conclusion viz the Brussels Convention: its Article 17 reference to a party having ‘benefit’ from choice of court does not relate entirely to the same discussion on asymmetric clauses (Peralla v Codere [2016] EWHC 1182 (Comm) which I discussed here illustrates that difference).

At any rate I disagree with Moulder J’s statement at 254 that

It is now common ground that it is a question of autonomous EU law and not a question of national law. (It was I believe accepted that the proviso “unless the agreement is null and void as to its substantive validity” refers to issues such as capacity, fraud and mistake, not whether particular kinds of “choice of court” agreements are permitted under the Regulation).

Asymmetric clauses are the first example often given when highlighting the limited cover of Article 25 Brussels I a (and the need for certainty on the lex causae for choice of court). There is no autonomous interpretation there at all. I do agree however with the conclusion at 261: that Luxembourg courts, applying EU law, would not uphold such clauses was not made out on the evidence. Luxembourgish courts at least when they apply Luxembourgish law, generally uphold the validity of asymmetric choice of court.

At 263 ff then follows discussion of Article 7(1) and 7(2). Much of the authority discussed has been reviewed on this blog. (Including Bosworth (Arcadia) which is currently before the CJEU). Moulder J holds that Article 7(2) is engaged, not 7(1), and on the former discusses locus delicti commissi with reference to JSC BTA Bank v Khrapunov. At 295: it is not sufficient that there are meetings in England to implement the conspiracy, it is the making of the agreement in England which is to be regarded as the harmful event.  Claimants have not supplied a plausible evidential basis that the agreement was made in England. Their evidence is consistent with a case that the conspiracy was implemented in England but that is not sufficient.

As for locus damni, at 298: Even though the share purchase agreement was under English law, it is the loss of the shares in the Luxembourg company which is the pleaded damage not the agreement to sell or the auction. The Vivacom group consists of Bulgarian telecommunications companies which were held by InterV through Viva Luxembourg Bulgaria EOOD (paragraph 3 of the Agreed List of Agreed Issues). Locus damni is Bulgaria, perhaps Luxembourg. But not England.

Finally, abuse of process considerations are linked to English procedural law (whether claims should have been brought sooner).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.9, Heading 2.2.11.1, Heading 2.2.11.2 .

 

 

The Permanent Bureau of the Hague Conference on Private International (HCCH) seeks high-achieving interns for January to July 2020.

An internship with the HCCH offers a unique opportunity to deepen the knowledge of private international law, better understand how the HCCH functions, and contribute to the work of the Organisation.

Interested? Then lodge your application by Monday 30 September 2019.

For more information, including the application requirements, check out the HCCH website at: https://www.hcch.net/en/recruitment/internships#legal.

I reviewed Tanchev AG’s Opinion in C‑722/17 Reitbauer here. Readers best refer to it to get insight into the complex factual matrix. The CJEU held on Wednesday last week- no English version of the judgment is as yet available.

In essence applicants are attempting to anchor their pauliana unto A24(5)’s enforcement jurisdiction. Failing that, the anchor might be A24(1)’s locus rei sitae exclusive jurisdictional rule.

The Court like the AG rejects jurisdiction on the basis of Article 24(5). They are right: A25(5) must not resurrect merits claims on much wider issues (claim for compensation of applicants’ debt, objections concerning the non-existence of a claim underlying a judicially ordered auction, and concerning the invalidity of the creation of the pledge for that claim under a loan agreement).

Court and AG are also right in rejecting Article 24(1) jurisdiction. The issues at stake are far removed from the reasons which justify exclusive jurisdiction. (The Court refers to Komu, Schmidt, Weber).

Then, surprisingly (for it was not part of the questions asked; the AG entertained it but that is what AGs do) the Court completes the analysis proprio motu with consideration of Article 7(1)’s forum contractus rule, with respect to claimants’ argument that the acknowledgement of debt by Isabel, cannot be used against them. Tanchev AG as I noted essentially suggested a limitation of Feniks to cases of fraus – arguably present here. At 59-60 the Court simply notes that all creditors were ‘contractually’ linked to Isabel C, and then applies Feniks to come to a finding of contractual relation between claimants and Mr Casamassima: without any reference to the fraus element (I had indeed suspected the Court would not so quickly vary its own case-law).

The AG did not discuss the place of performance of the contract (between Reitbauer et al and Mr Casamassima – this was exactly one of the sticky points signalled by Bobek AG in Feniks). The CJEU however does, and at 61 simply identifies that as the place where the underlying contract, between Isabel C and the building contractors, had to be performed: that is, the place of the renovation works in Austria.

That an Article 7(1) forum was answered at all, is surprising. That the place of performance of that contract is straightforwardly assimilated with the underlying contractual arrangement, is not necessarily convincing. That Feniks would not so soon be varied (if at all), was to be expected.

Forum contractus is surely stretching to forum abundantum.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.1

Less than a year after its decision in Case C-337/17 Feniks (discussed here), the Court of Justice had another opportunity to consider the extent to which the Brussels Ia Regulation provides a head of special jurisdiction for an actio pauliana. In Case C-722/17 Reitbauer (decided last Wednesday but still not available in English), the Court confirmed its decision in Feniks, according to which such an action falls under Art 7(1) Brussels Ia if it is based on a contractual right. Michiel Poesen, PhD candidate at KU Leuven, has been so kind as to share his thoughts on the decision with us in the following post.

Earlier this week, the Court of Justice of the European Union found that an actio pauliana is subject to jurisdiction in matters relating to a contract, contained in Article 7(1) Brussels Ia (Case C-722/17 Reitbauer).

In general terms, the actio pauliana is a remedy that allows a creditor to have an act declared ineffective, because said act was carried out by a debtor with the purpose of diminishing its assets by passing them on to a third party (see Opinion of AG Bobek, C-337/17 Feniks, [35]). This blogpost will briefly summarise the Court’s ruling and its wider impact.

Facts

The facts leading to the ruling are quite complex. Mr Casamassima and Ms Isabel C., both resident in Rome, lived together at least until the spring of 2014. In 2010, they purchased a house in Villach, Austria. While Mr Casamassima apparently funded the transaction, Isabel C. was registered in the land register as the sole owner.

Ms Isabel C. – with the ‘participation’ of Mr Casamassima – entered into contracts for extensive renovation works of the house with Reitbauer and others (the applicants in the preliminary reference proceedings, hereinafter referred to as ‘Reitbauer’). Because the costs of the renovation far exceeded the original budget, payments to Reitbauer were suspended. From 2013 onwards, Reitbauer were therefore involved in judicial proceedings in Austria against Ms Isabel C. Early 2014, the first of a series of judgments was entered in favour of Reitbauer. Ms Isabel C. appealed against those judgments.

On 7 May 2014 before a court in Rome, Ms Isabel C. acknowledged Mr Casamassima’s claim against her with respect to a loan agreement which was granted by the latter in order to finance the acquisition of the house in Villach. Ms Isabel C. undertook to pay this amount to the latter under a court settlement. In addition, she agreed to have a mortgage registered on the house in Villach in order to secure Mr Casamassima’s claim.

On 13 June 2014 a (further) certificate of indebtedness and pledge certificate was drawn up in Vienna by a notary to guarantee the above settlement (‘the pledge’). With this certificate, the pledge on the house in Villach was created on 18 June 2014.

The judgments in favour of Reitbauer did not become enforceable until after this date. The pledges on the house of Ms Isabel C. held by Reitbauer, obtained by way of legal enforcement proceedings, therefore ranked behind the pledge in favour of Ms Casamassima.

In order to realise the pledge, Mr Casamassima applied in February 2016 to the referring court (the District Court in Villach, Austria) for an order against Ms Isabel C., requiring a compulsory auction of the house in Villach. The house was auctioned off in the autumn of 2016. The order of entries in the land register shows that the proceeds would go more or less entirely to Mr Casamassima because of the pledge.

With a view to preventing this, Reitbauer brought an action for avoidance (‘Anfechtungsklage’) in June 2016 before the Regional Court in Klagenfurt, Austria, against Mr Casamassima and Ms Isabel C. The action was dismissed by that court due to a lack of international jurisdiction, given Casamassima’s and Isabel C’s domicile outside of Austria.

At the same time, Reitbauer filed an opposition before the district court of Villach, Austria, in the course of the proceedings regarding distribution of the proceeds from the compulsory auction, and subsequently brought opposition proceedings against Mr Casamassima. In these opposition proceedings, Reitbauer sought a declaration 1) that the decision regarding the distribution to Mr Casamassima of the proceeds of the action was not legally valid for reasons of compensation between Ms Isabel C.’s claims and those of Mr Casamassima, and 2) that the pledge certificate was drawn up to frustrate Reitbauer’s enforcement proceedings with regard to the house in Villach. Essentially, the second part of Reitbauer’s action was based on the allegation that Ms Isabel C. had acted with fraudulent intent, therefore being a form of actio pauliana.

Decision

The Court of Justice had to consider first whether jurisdiction in proceedings that have as their object rights in rem in immovable property or tenancies of immovable property, provided in Article 24(1) Brussels Ia, was applicable. To trigger this ground of jurisdiction, Reitbauer and others alleged that their action was closely related to the house in Villach.

In reaching its conclusion, the Court reiterated that Article 24(1) Brussels Ia does not encompass all actions concerning rights in rem in immovable property, but only those which both come within the scope of th Regulation and are actions which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with protection for the powers which attach to their interest (Case C-722 Reitbauer, [44]; see also Case C?417/15 Schmidt, [30])

This definition implies that an action was based on rights in rem, not on rights in personam. The part of the action alleging compensation between Casamassima’s and Isabel C.’s claims does not satisfy this requirement, as it aims at contesting the existence of the Mr Casamassima’s right in personam that was the cause of the enforcement proceedings.

The second part of the action, the actio pauliana, does not fit within in rem jurisdiction either. The Court found that such an action does not involve the assessment of facts or the application of rules and practices of the locus rei sitae in such a way as to justify conferring jurisdiction on a court of the State in which the property is situated (Case C-722 Reitbauer, [48]; see also C-115/88 Reichert I, [12]).

Having come to this conclusion, the Court decided that jurisdiction over the actions brought by Reitbauer and others was not subject to Article 24(5) Brussels Ia either – which contains a special ground of jurisdiction “in proceedings concerned with the enforcement of judgments”. According to the Court, this bespoke ground of jurisdiction is to be understood as englobing proceedings that may arise from “recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments” (Case C-722 Reitbauer, [52]; see also Case C?261/90 Reichert II, [28]) .

Reitbauer and others’ actions were clearly not related to the enforcement of the judgment but to the substantive rights underlying the pledge which was being enforced. For that reason, enforcement jurisdiction was to remain inapplicable.

Having reached the conclusion that no exclusive ground of jurisdiction could apply, the Court went on to consider Art 7(1) Brussels Ia – jurisdiction in matters relating to a contract. Following a short motivation (Case C-722 Reitbauer, [56]–[62]) the Court confirmed that the part of Reitbauer and others’ action amounting to an actio pauliana was a matter relating to a contract. As in the Feniks ruling, the reason cited is that the action aims at preserving Reitbauer and others’ contractual rights by setting aside the creditor’s allegedly fraudulent acts (Case C-722 Reitbauer, [58]–[59]; Case C-337/17 Feniks, [43]–[44]).

As a consequence, Art 7(1)(b) Brussels Ia allocates jurisdiction to the place of performance of the allegedly defrauded contract, being Villach since Reitbauer and others delivered their renovation services in that location (see Case C-337/17 Feniks, [46]).

The Purpose and Role of Art 7(1) Brussels Ia

As far as the exclusive grounds of jurisdiction in Art 24(1) and 24(5) Brussels Ia are concerned, the decision can hardly be considered surprising. Reitbauer and others tried to plead their actions as relating to a matter covered by exclusive jurisdiction, with the aim of suing the Italian domiciled defendants in Austria instead of Italy (which would be the outcome of the default rule of jurisdiction of Art 4(1) Brussels Ia). This attempt was bound to fail.

More interestingly, the Court confirmed that an action pauliana can be a matter relating to a contract. This emerging line of case law is met with criticism. One of the points raised was that a defendant may be ignorant of the contract it allegedly helped to defraud. In such a situation, applying contract jurisdiction would trigger a forum that is unforeseeable for the defendant (an outcome that the Court rightly attempted to avoid in Case C-26/91 Handte, [19]). A response to this criticism would be not to apply contract jurisdiction to an actio pauliana altogether, as suggested earlier by AG Bobek (Opinion of AG Bobek, C-337/17 Feniks, [62]–[72]). There, the AG opined that an actio pauliana is too tenuously and too remotely linked to a contract to be a matter relating to a contract for the purpose of Art 7(1) Brussels Ia. Alternatively, AG Tanchev opined that the defendant’s knowledge should be taken into account (Opinion in Case C-722/17):

[84] … knowledge of a third party should act as a limiting factor: … the third party needs to know that the legal act binds the defendant to the debtor and that that causes harm to the contractual rights of another creditor of the debtor (the applicants).

[92] … the defendant’s knowledge of the existence of the contract(s) at issue is important.

Instead of realigning the Feniks ruling with the principle of foreseeability, the decision in Reitbauer confirmed that an actio pauliana fits squarely within jurisdiction in matters relating to a contract, the driving factor seemingly being the hope to offer the claimant an additional forum that presumably has a close connection to the dispute (Case C-722 Reitbauer, [60]: Case C-337/17 Feniks, [44]–[45]).

Looking beyond the actio pauliana, the case law begs the question what other types of remedies – however remotely linked to a contract – could be subject to Art 7(1) Brussels Ia. An action for wrongful interference with contract, for example, regarded to be tortious in nature (e.g. Tesam Distribution Ltd v Schuh Mode Team GmbH and Commerzbank AG [1990] I.L.Pr. 149), would be a matter relating to a contract by the standard applied in Feniks and Reitbauer. It is doubtful whether such a broad construction of jurisdiction in matters relating to a contract complies with the limited role of Art 7(1) Brussels Ia within the Regulation (Recital (15) Brussels Ia).