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Case C-60/18 AS Tallinna Vesi could have been, as Advocate General Kokott noted yesterday, about much more. In particular about the exact scope of the Waste Framework Directive’s exclusion for sewage sludge and the relation between the WFD, the waste water Directive and the sewage sludge Directive. However the referring court at least for the time being sees no issue there (the AG’s comments may trigger the applicant into making it an issue, one imagines) and the AG therefore does not entertain it.

Instead the case focusses on whether waste may no longer be regarded as such only if and after it has been recovered as a product which complies with the general standards laid down as being applicable to it? And on whether, alternatively, a waste holder be permitted to request that the competent authorities decide, on a case-by-case basis and irrespective of whether any product standards are in place, whether waste is no longer to be regarded as such.

Ms Kokott emphasises the wide margin of discretion which the Member States have in implementing the Directive. End of waste criteria at the national level (in the absence of EU criteria) may not always be warranted particularly in the context of sewage sludge which is often hazardous. However precisely that need for ad hoc assessment should be mirrored by the existence of a procedure for waste operators to apply ad hoc for clarification on end of waste status.

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, 1.166 ff and 1.189 ff.

GDPR (General Data Protection Regulation) aficionados will have already seen the draft guidelines published by the EDPB – the European data protection board – on the territorial scope of the Regulation.

Of particular interest to conflicts lawyers is the Heading on the application of the ‘targeting’ criterion of GDPR’s Article 3(2). There are clear overlaps here between Brussels I, Rome I, and the GDPR and indeed the EDPB refers to relevant case-law in the ‘directed at’ criterion in Brussels and Rome.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.8.2.3, Heading 2.2.8.2.5.

 

Thank you MPI’s Veerle Van Den Eeckhout for pointing out a highly relevant reference to the CJEU by the Dutch Supreme Court /Hoge Raad. The link between the posted workers Directive and conflict of laws is clear, as I have also explained here. The most interesting part of the reference for conflicts lawyers, ae the questions relating to ‘cabotage’, particularly where a driver carries out work in a country where (s)he is not habitually employed (international trade lawyers will recognise the issue from i.a. NAFTA).

One to keep an eye on.

Geert.

(Handbook of) EU Private International Law, 2nd ed 2016, Chapter 3, Heading 3.2.5.

In [2018] EWHC 3098 (Ch) Stripes US, Smith J deals with jurisdiction for schemes of arrangement in the now well established way (see my last report on same in Algeco):

The EU’s Insolvency Regulation is clearly not engaged: the schemes fall under company law. The High Court then applies the jurisdictional test viz the Brussels I Recast Regulation arguendo: if it were to apply (which the English Courts have taken no definitive stance on), would an English court have jurisdiction? Yes, it is held: under Article 8 (anchor defendants).

The issue in fact splits in two: so far as the question of jurisdiction in relation to a foreign (non-EU or Lugano States based) company is concerned (Stripes US is incorporated in Delaware), the law is clear. It is well-established that the court has jurisdiction to sanction a Scheme in relation to a company provided that company is liable to be wound up under the Insolvency Act 1986.

Turning next to the Scheme Creditors, of the 31 Scheme Creditors, 19.4% by number (26.35% by value) of the ‘defendants’ (an odd notion perhaps in the context of a Scheme sanction) are domiciled in the UK, plenty Smith J holds to suggest enough reason for anchoring: not taking jurisdiction vis-a-vis the defendants domiciled in other Member States, would carry with it a serious risk of irreconcilable judgments.

Finally the case for forum non conveniens (and comity) is considered (vis-a-vis the US defendant), and rejection of jurisdiction summarily dismissed: in this case the relevant agreement which is the subject of the Scheme has a governing law which is (and, I understand, always has been) English law: at 63: ‘Generally speaking, that is enough to establish a sufficient connection. The view is that under generally accepted principles of private international law, a variation or discharge of contractual rights in accordance with the governing law of the contract should be done by the court of that law and will be given effect to in other third-party countries.’ US experts moreover advised any judgment would most probably have no difficulty being enforced in the US

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.

 

The University of BremenLaw School will recruit a doctoral researcher in Private International Law (‘wissenschaftlicher Mitarbeiter’ m/w/d), part time 50 per cent, starting in early 2019, for a duration of 36 months.

The researcher will work on the project ‘Rome Regulations. Commentary, 3rded. (Calliess/Renner eds.)’. In addition, there is a teaching obligation of 2 hours/week, 28 weeks/year in small groups under the supervision of Professor Calliess. Next to that candidates are expected to work on a PhD-thesis (doctor iuris), preferably in the area of private international law, international civil procedural law, or transnational private law.

Candidates shall hold a law degree comparable to the German ‘Prädikatsexamen’ (4-5 years of studies and graduation among the top 20 per cent of the year). A very good command of English is required, while a good command of German is an additional asset.

The position will provide a net income of ca. 1200-1300 €/month and includes social security. For further inquiries and to apply contact Professor Calliess at g.calliess@uni-bremen.de.

Deadline for applications with a letter of motivation, CV and certificates: 7 January 2019.

The legally binding call for applications A305/18is in German only and to be found here.

 

I am working on rather intricate conflicts issues this week (which I am enjoying) so I am turning to the blog for a little cerebral relief (equally pleasing). In [2018] EWHC 1544 (Ch) Deutsche Apotheker- und Arztebank EG v Leitzbach , reported with thanks by Ashfords, Hodge J correctly applied the COMI test of Regulation 1346/2000 to dismiss jurisdiction for the courts in England and Wales.

Dr Leitzbach had obtained a bankruptcy order after a previous attempt in which he had failed to testify to COMI in England and Wales. His, successful, second attempt, it now became clear, was obtained after misrepresentation. Dr Leitzbach’s arguments pro COMI it seems were mostly based on residence in the UK, proof for which he sought to obtain from (in fact non-existing) supermarket loyalty cards, as well as receipts of purchases made hundreds of miles apart within a short time-frame.

Note at 27 Hodge J’s in my view entirely correct sympathy for forum shopping in insolvency: as long as COMI can be correctly ascertained in the jurisdiction, this is an entirely justifiable phenomenon. Except indeed COMI was not in the UK as the High Court equally found:

at 71: ‘I simply cannot accept the evidence of Dr Leitzbach as to the fact that he was living and working …as a consultant in England and Wales at the relevant time. I simply do not accept his evidence to that effect. Secondly, however, I would in, any event, have found that, as a professional dentist who had been practising as such in Germany, Dr Leitzbach had never acquired a COMI in England and Wales…’

at 74: ‘so far as his visibility as a dentist is concerned, third parties would clearly have formed the view that he was continuing to practise with his brother in Germany until the end of 2012. He remained on the appropriate public dental register until the end of 2012. He secured a certificate that he was unfit for dental work at the end of 2011; but even that document was addressed to the former practice address in Hochheim, and it operated simply to relieve the debtor from making contributions to his official German dental pension scheme only until 30 June 2012…Dr Leitzbach accepted..that he was representing to third parties that he remained in practice as a dentist in the Hessen dental register until the end of December 2012. It was that dental practice address that was used by Dr Leitzbach to register himself on the postgraduate dental course that he undertook. He accepted that others on the course would all have assumed that he was continuing to practise as a dentist in Germany. His CV, written for the purpose of a published article in a dental journal, gave the impression that he had worked as a dentist in Germany until the end of 2012, and that, thereafter, his only professional activity was attending the postgraduate dental course.’

COMI never have been in the UK, the carpet was pulled from underneath the previous Bankruptcy order and this had to be annulled.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

Written by Anton S. Zimmermann, Institute for Comparative Law, Conflict of Laws and International Business Law (Heidelberg)

Blockchain technology and its offspring have recently attracted considerable attention in both media and scholarship. Its decentralised nature raises several legal questions. Among these are, for example, the challenges that blockchain technology poses to data protection laws and the threats it creates with regard to the effective enforcement of legal claims.

This post sheds light on issues of private international law relating to blockchain networks from a European perspective.

The concept of blockchain technology and its fields of application

Blockchain technology – put simply – involves two fundamental concepts. Firstly, data is written into so-called “blocks”. Each block of data is connected to its respective predecessor using so-called “hashes” that are calculated for each individual block. Consequently, each block does not only include its own hash but also the hash of its predecessor, thereby fixating consecutive blocks to one another. The result is a chain of blocks – hence the name blockchain. Secondly, the entire blockchain is decentrally stored by the networks’ members. Whenever a transaction concerning the blockchain is requested, it isn’t processed by just one member. On the contrary: several members check the transaction and afterwards share their result with the other members in what can best be described as a voting mechanism: From among potentially different results provided by different members, the result considered correct by the majority prevails. This mechanism bears the advantage that any attempt to tamper with data contained in a blockchain is without consequence as long as only the minority of members is affected.

The potential fields of application for blockchain technology are manifold and far from being comprehensively explored. For example, blockchain technology can replace a banking system in the context of cryptocurrencies such as Bitcoin or it can be used to de-personalize monitoring and sanctioning of non-performance within a contractual relation. In short: Blockchain technology is an option whenever data is to be stored unalterably in a certain order without a (potentially costly) centralised monitoring entity.

Applicable rules of private international law

The first issue regarding blockchain technology and private international law concerns the applicable conflict rules. Blockchain technology involves a technical voting mechanism and, hence, requires a certain degree of cooperation between the members of the network. One might, therefore, be tempted to assume that blockchain networks constitute some kind of company. If this were indeed the case, the written conflict rules, especially those of the Rome I Regulation, would not be applicable (cf. Art. 1(1) lit. f) Rome I Regulation) and the unwritten conflict rules relating to international companies would claim application instead. However, this approach presupposes that the factual cooperation within a blockchain network suffices to create a company in the sense of European private international law. This is, however, not the case. The constitution of blockchain networks is only cooperative in a technical way, not in a legal one. The network is not necessarily based on a (written or unwritten) cooperation agreement and, therefore, lacks an essential prequisite of a company. Consequently, the determination of the law applicable to blockchain technology is not necessarily a question of international company law. Parties are, however, not precluded from creating a company statute that reflects the decentral structures of blockchain technology, whereas the mere decision to engage in a blockchain network does not suffice to create such a company.

Thus, the private international law of blockchain technology must also take into account the Rome I Regulation as well as the Rome II Regulation. Unfortunately, blockchain networks per seare not suitable as connecting factors: firstly, a decentralised network naturally escapes the classical European principle of territorial proximity. Secondly, the use of blockchain technology is usually not an end in itself but functionally subordinate to the purpose of another act, e.g. a contract, a company or a tort. This factor should, however, not be seen as a problem, but as a hint at a potential solution: although a superordinate act may render a blockchain network insufficient to determine the substantive law, the superordinate act itself can serve as a connecting factor.

The following two examples illustrate the proposed method of accessory connection and show that the European legal framework relating to private international law is capable to cope with several questions raised by novel phenomena such as blockchain technology. The remaining questions have to be dealt with on the basis of the principle of proximity.

First scenario: blockchain networks within centralised contracts

Blockchain technology often serves to achieve the goal of a centralised act. In this case, legal questions regarding the use, misuse and abuse of blockchain technology, e.g. access rights and permissions to write regarding data contained in a blockchain, should be governed by the substantive law governing the superordinate act.

To give an example: The parties of a supply chain decide to implement a blockchain in order to collectively store data concerning (1) when and in what quantity products arrive at their warehouse and (2) certificates of quality checks performed by them. As a result, production routes and quality control become more transparent and cost-efficient along the supply chain. Blockchain technology can thus be used e.g. to ensure the authenticity of drugs, food safety etc. The legal questions regarding the smart contract should in this scenario be governed by the substantive law governing the respective purchase agreement between the parties in question. The choice of law rules of the Rome I Regulation, hence, also determine the substantive law regarding the question how blockchain technology may or may not be used in the context of the purchase agreement. The application of blockchain technology becomes a part of the respective contract.

If one were to apply the substantive law governing the contract only to the contract itself but not to blockchain technology, one would create unjust distinctions: The applicable law should not depend on whether the parties pay an employee to regularly check on their warehouse and issue certificates in print, or whether they employ blockchain technology, achieving the same result.

Second scenario: blockchain networks within decentralised companies

The scenario described above shows that the decentralised nature of blockchain networks does not necessarily require special connecting criteria. This is a consequence of the networks’ primarily serving function to the respective superordinate entity.

Difficulties arise when parties agree on a company statute whose content reflects the decentralisation of blockchain technology. In this scenario, there is a decentral company that utilises only decentral technology as its foundation. A much-discussed case of this kind was “The DAO”, a former company based on blockchain technology. The DAO’s establishment was financed by investors providing financial resources in exchange for so-called tokens. These tokens can be described as the digital counterpart of shares and hence as an expression of the respective investor’s voting rights. Within the resulting investment community, voting rights were exercised in order to decide on investment proposals. The results of the votes were implemented automatically. The company thus consisted only of the investors and information technology but had no management body, no administrative apparatus, and no statutory seat.

Hence, the DAO did not only lack a territorial connection on the level of information technology, but also on the level of the companies’ legal constitution: it neither had an administrative seat nor a statutory seat. The connecting factors usually applied to determine the law applicable to companies were, therefore, ineffective. Because the DAO was a company, it was also exempt from the scope of the Rome I Regulation (cf. Art. 1 (2) lit. f. Rome I Regulation).

This vacuum of traditional conflict rules necessitates the development of new ones. There is no other valid connecting factor that could result in a uniform lex societatis: Especially the habitual residence or nationality of the majority of members is arbitrary as the company is built on a concept of decentralism and territorial detachment. Moreover, possible membership changes would lead to an intertemporally fluctuating statute whose current status could hardly be determined. The lack of a uniform connecting factor raises the question whether or not the ideal of a uniform lex societatiscan be upheld. The fact that members of the DAO do not provide a feasible uniform connecting factor suggests a fragmentation of the applicable law (dépeçage).

Assuming that there is no uniform lex societatisfor the DAO and that the applicable substantive law has to be fragmented, acts by the company become conceivable connecting factors. One might, for example, assume that preliminary questions concerning the company, i.e. its legal capacity, are subject to the substantive law that would govern the act in question. If the DAO enters into a contract that – given its validity – is governed by German substantive law according to Art. 4 of the Rome I-Regulation, German law should also determine the legal capacity of the DAO with respect to this particular contract. One might object that the Rome I-Regulation exempts both companies and legal capacity from its scope of application. This, however, only means that the Regulation is not bindingwithin those fields. As the conflict rules of International company law do not lead to conceivable results, the principle of proximity has to be the guiding factor in the search for a new unwritten conflict rule. As the closest territorial connections of decentral organisations are their respective acts, e.g. contracts, the principle of proximity suggests that the respective act is what determines the closest connection of the company. The resulting conflict rule states an accessory subjection of the lex societatisto the law governing the company’s respective acts. While the proposed solution does indeed lead to an indirectapplication of the Rome I Regulation, it nonetheless constitutes a self-reliant, unwritten conflict rule which is consequently not precluded by the catalogue of exemptions contained in the Rome I Regulation.

This fragmentation of applicable laws turns a membership in the DAO into a risky und legally uncertain endeavour, as – neglecting the tremendous practical and legal problems of the enforcement of claims – different legal orders impose different requirements for legal capacity, limitation of liability and other privileges.

Concluding thoughts

Blockchain technology is a novel phenomenon, but it does – in most cases – not necessitate new connecting factors or conflict rules. If, however, the legal entity in question mirrors the decentralised structure of a blockchain network, the legal assessment becomes more complicated.

In those cases, the usually uniformlex societatishas to be fragmented which leads to a high chance of personal liability of the members. Whether or not one accepts this fragmentation largely depends on the definition of the hierarchy of technical-economic progress and the lex lata. In my opinion, technical developments may and should act as an impetus to legislatorsfor legislative amendments but should not prevail over the existing rules of law. Those who desire legal advantages – such as a limitation of liability or even a uniform statute – must in exchange fulfil and adhere to the laws’ requirements.

This post is based on A. Zimmermann, Blockchain-Netzwerke und Internationales Privatrecht – oder: der Sitz dezentraler Rechtsverhältnisse, published in IPRax 2018, 568 ff. containing references to further literature.

The University of Prishtina is hosting on November 30 the 15th Regional Private International Law Conference. This year’s edition focuses on the  1982 Yugoslav Private International Law Act [“From the 1982 PIL Act towards new PIL Acts in the region”].

The draft agenda is as follows:

Location: The Professors’ Room, Faculty of Law, University of Prishtina.

09:30- 09:45 Welcoming remarks
Prof. Haxhi Gashi, Dean of Faculty of Law and Mr. Abelard Tahiri, Minister of Justice

09:45-10:10 Prof. Asllan Bilalli
“Kosovo’s new Draft Act on Private International Law”

10:10 – 10:30 Prof. Hajredin Kuçi
“Kosovo’s New Draft Civil Code- a brief presentation of the key ideas and approximation with EU Private Law

11:15 – 11:35 Prof. Hrvoje Sikiric
“The New Croatian Act on Private International Law and developments in the region”

11:35 – 11:40 Prof. Nada Dollani, Prof. Aida Gugu Bushati and Prof. Eniana Qarri
“Property Regime under Albanian Private International Law; a comparative view”

13:30 – 13:50 Dr. Christa Jessel- Holst
“Enforcement of judgments originating from West Balkan countries in Germany”

13:50 – 14:10
Prof. Denis Salomon
“Res iudicata and conflicting decisions under the Brussels Ibis Regulation and the New York Convention”

14:30 – 14:50 Prof. Slavko Djordjevic
Topic TBD

14:50 – 15:10 Toni Deskoski and Prof. Vangel Dokovski
“Limitations of the principle of party autonomy under the Hague Principles on Choice of Law in International Contracts”

15:10 -15:30 Discussion and Closing remarks

Written by Veerle Van Den Eeckhout (http://www.mpi.lu/the-institute/senior-research-fellows/veerle-van-den-eeckhout/)

On 23 November 2018 the Dutch Supreme Court referred a question for preliminary ruling to the CJEU in a case with regard to labour conditions of Hungarian truck drivers, particularly with regard to the Posting of Workers Directive, 96/71/EC (see, in Dutch, https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:HR:2018:2174. See, moreover, the decision of the same day https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:HR:2018:2165  ).

The preliminary question will certainly attract the attention of many who have a particular interest in the specific theme of labour conditions of mobile East European workers –  a theme in which rules of Private International Law matter.

The case, and its theme, might also be significant in a broader sense: it could be seen as taking place against the backdrop of discussions about the status quo of Private International Law, about current evolutions within Private International Law and the future of Private International Law, about the so-called “neutrality” of Private International Law.

These current evolutions and discussions might be analysed from the perspective of the “instrumentalization” of Private International Law. Questions about the instrumentalization of Private International Law might, ultimately, be framed as questions about the role and potential of the discipline of Private International Law with regard to social justice and global justice. Such questions arise with regard to the regulation of themes that are often put forward as hot topics in discussions about globalization (global / transnational) and social justice. Various case studies could illustrate this, in particular the theme of Corporate Social Responsibility, the theme of labour migration/labour exploitation, the theme of migration law (in the broad sense of the word – including e.g. also social security claims) in its interaction with Private International Law. The cases might concern both the regional-European setting (where legal arguments such as European freedoms arise) and the global setting (where legal arguments such as European freedoms do not arise as such).

When carrying out such an analysis, current developments – such as: recent developments regarding employee protection (recent revision of the Posting Directive, “Ryanair”, …), recent developments regarding consumer protection (in various shapes and forms), recent attention for the interaction between migration law/refugee law and Private International Law, etc. – might be taken into account. Such an analysis could be placed in a context of current calls to the discipline of Private International Law to play a more prominent role cq to exercise the role it deserves or should exercise cq “to do its bit”. See also, on this, i.a. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3265160.

Put this way, the preliminary question of the Dutch Supreme Court interests the European road transport, but the interest for this case might also go beyond the particular characteristics and merits of this case and might even go beyond the specific theme.

On 13 December Fieke van Overbeeke will defend her phd thesis at the University of Antwerp on the exact topic of this preliminary question (under the supervision of Thalia Kruger and Herwig Verschueren). Fieke analysed the law applicable to the employment contracts of lorry drivers in the light of the Rome I Regulation and the Posting of Workers Directive.

I have an ever-updated post on Google’s efforts to pinpoint the exact territorial dimension of the EU’s data protection regime, GDPR etc. Now, Facebook are reportedly appealing a fine imposed by the UK’s data protection authority in the wake of the Cambridge Analytica scandal. Facebook’s point at least as reported is that the breach did not impact UK users.

The issue I am sure exposes Facebook in the immediate term to PR challenges. However in the longer term it highlights the need to clarify the proper territorial reach of both data protection laws and their enforcement.

One to look out for.

Geert.

 

This blog post presents a condensed version of Dr Mukarrum Ahmed’s (Lancaster University) article in the December 2018 issue of the Journal of Private International Law. The blog post includes specific references to the actual journal article to enable the reader to branch off into the detailed discussion. The journal article is a companion publication to the author’s recent book titled The Nature and Enforcement of Choice of Court Agreements: A Comparative Study (Oxford, Hart Publishing 2017).

The article examines the fundamental juridical nature, classification and enforcement of choice of law agreements in international commercial contracts. At the outset, it is observed that choice of law considerations are relegated to a secondary position in international civil and commercial litigation before the English courts as compared to international jurisdictional and procedural issues. (See pages 501-503 of the article) Significantly, the inherent dialectic between the substantive law paradigm and the internationalist paradigm of party autonomy is harnessed to provide us with the necessary analytical framework to examine the various conceptions of such agreements and aid us in determining the most appropriate classification of a choice of law agreement. (See pages 504-508 of the article and Ralf Michaels, ‘Party Autonomy in Private International Law – A New Paradigm without a Solid Foundation?’ (2013) 15 Japanese Yearbook of Private International Law 282) In binary terms, we are offered a choice between choice of law agreements as mere “factual” agreements on the one hand or as promises on the other. However, a more integrated and sophisticated understanding of the emerging transnationalist paradigm of party autonomy will guide us towards a conception of choice of law agreements as contracts, albeit contracts that do not give rise to promises inter partes. This coherent understanding of both the law of contract and choice of law has significant ramifications for the enforcement of choice of law agreements. It is argued that the agreement of the parties on choice of law will be successful in contracting out of the default choice of law norms of the forum and selecting the applicable law but cannot be enforced by an action for “breach” of contract.

It is argued that the emerging transnationalist paradigm of party autonomy supports a conception of choice of law agreements which borrows from both the internationalist and substantive law paradigms of party autonomy but cannot be comprehensively justified by either. This assimilated and coherent understanding of choice of law and the law of contract has led to the conclusion that the choice of law clause is a procedural contract but a contract nonetheless. (See Jürgen Basedow, The Law of Open Societies: Private Ordering and Public Regulation in the Conflict of Laws (Brill Nijhoff 2015) 145 and Maria Hook, The Choice of Law Contract (Oxford, Hart Publishing 2016) Chapter 2)

Professor Briggs’ promissory analysis of choice of law agreements is a seminal contribution to legal scholarship. (See Adrian Briggs, Agreements on Jurisdiction and Choice of Law (OUP 2008) Chapter 11) However, it is unlikely that the parallel existence of choice of law agreements as privately enforceable agreements will attract the attention of the CJEU and the EU legislature. The common law judicial authority coupled with the preponderance of opposing academic opinion has meant that the conventional “declaratory” classification of choice of law agreements has prevailed over the “promissory” approach. (See pages 508-517 of the article; Ace Insurance v Moose Enterprise Pty Ltd [2009] NSWSC 724 (Brereton J); Navig8 Pte Ltd v Al-Riyadh Co for Vegetable Oil Industry (The Lucky Lady) [2013] EWHC 328 (Comm), [2013] 2 Lloyd’s Rep 104, [2013] 2 CLC 461 (Andrew Smith J)) In assessing the relevance and significance of attributing an obligation to adhere to the chosen law in a choice of law agreement, the internationalist paradigm’s understanding of the fundamental nature of private international law rules and their inherent function has helped develop the counterargument.

If the choice of law regime of the forum is conceptualised as a set of secondary rules for the allocation of regulatory authority, the descriptive, normative and interpretive narrative of the promissory perspective loses its perceived dominance and coherence as it fails to yield a complete and satisfactory justification for what we really understand by those rules. In the mantle of secondary power conferring rules as opposed to primary conduct regulating rules, choice of law rules perform a very significant public function of allocating regulatory authority. From this perspective, it is misplaced and misconceived to interpret choice of law clauses as promissory in essence. The promissory justification does not adequately account for the authorisation of party autonomy by the choice of law rules of the forum, the supervening application of the laws of the forum and other states and ultimate forum control. (See pages 517-524 of the article) Moreover, the pragmatic attractiveness of anti-suit injunctions and claims for damages for breach of choice of law agreements may be unsound in principle from the standpoint of a truly multilateral conception of private international law based on mutual trust or a strong notion of comity. An international private international law will always seek to promote civil judicial cooperation between legal systems rather than encourage the clash of sovereign legal orders by interfering with the jurisdiction, judgments and choice of law apparatus of foreign courts. (See pages 524-529 of the article)

To reiterate, the more reconciled transnationalist paradigm of party autonomy strikes a balance between the competing demands of the internationalist and the substantive law paradigms. It is argued that a conception of a choice of law agreement as a contract, albeit one that does not give rise to any promises inter partes provides an appropriate solution.

On the one hand, the choice of law agreement is a legally binding contract as opposed to a mere “factual” agreement. On the other hand, the function of this agreement is not to regulate private law rights and obligations inter partes: it is to contract out of the forum’s default choice of law norms and to select the applicable law. Such a contract will not contradict the intrinsic logic of choice of law rules because the international allocative function remains paramount and is not compromised in any way by promises inter partes. The fact that the choice of law agreement is a contract which only gives rise to procedural consequences does not mean that it is not a contract per se. (See pages 530-531 of the article)

Thank you Quentin Declève and co-authors for reporting a short while back the Brussels Court of Appeal judgment in RFC Seraing and Doyen Sports v Belgian FA /FIFA /UEFA. (Judgment may be consulted here – I also have a copy). The case in substance concerns FIFA /UEFA’s TPO, Third Party Ownership rules.

Quentin first of all reports on the reasons for the Court to find the arbitration clause between the club and UEFA /FIFA not to be binding. The judgment does not contain copy of the clause (lest I have entirely missed it – but I don’t think so). The clause would not seem to have had a specific lex causae identified: the Court of Appeal uses a mix of Belgian law and New York Convention arguments to rule it invalid.

As we are on the subject of validity of arbitration clauses: please refer to Quentin’s reporting of the Belgian Court’s Supreme Court’s confirmation of validity of NATO’s arbitration clause.

For current blog however I would like to report the findings on the anchor defendant mechanism (19 ff): the Court of Appeal applies Article 6(1) Lugano (UEFA and FIFA are Swiss domiciled), which is the same anchor mechanism as Article 8(1) Brussels I Recast: the anchor defendant being the Belgian Football Association. Freeport and Reisch Montage as well as CDC feature heavily in the Court’s analysis. FIFA and UEFA’s claim is that the Belgian FA is abusively being used as an anchor defendant. The court disagrees: FIFA and the Belgian FA share regulatory powers; the FA is empowered by FIFA statute to impose additional regulations.  The FA’s presence in the proceedings is entirely justified and not artificially constructed.

Geert.

(Handbook of) European Private International Law. 2nd ed. 2016, Chapter 2, Heading 2.2.12, Heading 2.2.12.1.

Another interesting waste-case at the CJEU last week, although unfortunately one in which Wahl AG proposes inadmissibility. In C-399/17 EC v Czech Republic, the question is whether the Czech Republic has infringed the waste shipments Regulation 1013/2006 by refusing to take back a substance known as TPS-NOLO (or Geobal) that had been shipped to Poland without respecting the requisite formalities of the Waste Shipment Regulation.

Approximately 20 000 tonnes of TPS-NOLO (Geobal) and composed of tar acid, a remnant after refining oil (code 05 01 07* of the European waste catalogue), of carbon dust and of calcium oxide. Poland considered the substance to be hazardous waste classified in Annex IV to the Waste Shipment Regulation (‘Waste tarry residues (excluding asphalt cements) arising from refining, distillation and any pyrolitic treatment of organic materials’).  The Czech citizen responsible for the shipment to Poland presented the standards adopted by the company as well as proof that the substance in question was registered under the REACH Regulation and that it was used as fuel.

The case raises interesting issues therefore on the relationship between REACH and Waste, on which I have written briefly inter alia here and, more extensively and with Dr Thomas de Romph, here. At 3 already, Wahl signals that his Opinion will not however lead to findings on the merits of the case: ‘ Finding that there was no infringement in the present case could potentially weaken the effectiveness and enforceability of the Waste Shipment Regulation, whose main and predominant object and component is protection of the environment. However, courts are guided, first and foremost, by procedural principles that ensure a due process in each individual case. Those principles cannot be sacrificed in order to further a greater cause, as noble as it might be.’

The due process issues essentially relate to the European Commission’s handling of the infringement procedure, in which, the AG suggests proprio motu,  it did not formulate a proper statement of claim. Details are in the Opinion and readers are best referred to it.

Now, there is no such thing as double jeopardy when it comes to infringement proceedings hence one can only hope that the Commission services will reinitiate the proceedings (lest of course the CJEU disagree with the AG’s Opinion).

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, i.a.at para 1.201.

A short update on the Court of Justice’s ruling in C-151/17 Swedish Match, in which yesterday it upheld the legality of Directive 2014/40’s ban on ‘snus’ and generally on tobacco products for oral consumption. (Sweden is exempt: Article 15(1) of the 1994 Act of Accession).

The Court reaffirms the bite of the precautionary principle; emphasises the ‘gateway effect’ of snus for the young, including intern alia because consumption of snus can be done very discreetly and hence enforcement of an age ban (a suggested alternative) not effective; and the importance of giving precedence to public health over economic profit.

It also, yet again, shows that measures like these do not fall out of thin air because, as proponents of the precautionary principle would suggest, anti-innovation zealots dream up restrictive measures to kill enterprise. Rather, following extensive scientific advice, the ban is a sensible and proportionate measure to take.

Geert.

EU Environmental Law, with Dr Leonie Reins, 2017, Chapter 2, Heading IV.

Thanks to Daniel Chan for this post.

PAX Moot 2019 is here!

PAX Moot is a specialized moot court competition focused on private international law issues. We foster a competition in which participants will be able to learn and apply first hand the complexities and nuances of this area of law. Instead of pleading primarily on the merits of the case, PAX Moot participants will be given a case geared towards jurisdictional and choice of law disputes. Instead of trying to win the whole case, clear goals will be given to each side as to which preliminary ruling they will be striving to achieve.

Private international law, or conflict of laws, is the set of legal principles, devices, modes of reasoning and rules that leads to the application of different national laws in international cases and allocates jurisdiction. This field of law has increasingly come to the foreground of significant multinational legal disputes, where sometimes the entire case hinges on jurisdiction or applicability of certain national regulations. It now plays an important role in the area of environmental regulations, labor protections, and much more.

We thank the following institutions for their support and willingness to open the competition to their students: Sorbonne University Paris I, London School of Economics, HEC, Heidelberg University, Luxembourg University, Cambridge University, University College London (UCL), King’s College London, University of Antwerp, Erasmus University, Université Libre de Bruxelles (ULB), Sciences Po Law School, University of Heidelberg, University of Milan. Participation is also open to US exchange students from Harvard, Columbia, Duke, Northwestern, Northeastern, Duke and Penn law schools.

This year, we are proud to host the 7th edition of PAX Moot Competition: Jenard Round with our partner, Asser Institute. Asser Institute carries out research in private and public international law, European law, international commercial arbitration and all other related fields, such as international sports law and international humanitarian and criminal law. Registration is set to be open from November 15th to January 31st.

For further information please visit www.paxmoot.com. If you would like to contact us, please email info@paxmoot.com

Sincerely,
PAX Moot Team

By Prof. Dr. Peter Mankowski, University of Hamburg

The Greek State financial crisis has sent waves of political turmoil throughout the Eurozone and is certainly going to continue. It has provided much enrichment for International Procedural Law, yet not for the creditors of Greek State bonds. ‘Haircut’ has become an all too familiar notion and part of the Common Book of Prayers of State bonds. Some creditors, particularly from Germany and Austria, were not content with having their hair cut involuntarily and put it to the judicial test. Greece has thrown every hurdle in their way which she could possibly muster: service, immunity, lack of international jurisdiction. The service issue was sorted out by the CJEU in Fahnenbrock (Joined Cases C-226/13 et al., ECLI:EU:C:2015:383), already back in 2015. The German BGH and the Austrian OGH took fairly different approaches, the former granting immunity to Greece because of the haircut, the latter proceeding towards examining the heads of international jurisdiction under the Brussels Ibis Regulation. Quite consequently, the OGH referred some question concerning Art. 7 (1) Brussels Ibis Regulation to the CJEU. In its recent Kuhn decision (of 15 November 2018, Case C-308/17, ECLI:EU:C:2018:911), the CJEU answered that the entire Brussels Ibis Regulation would not be applicable by virtue of its Art. 1 (1) 2nd sentence since the CJEU believed the haircut to constitute an actum iure imperii. Rapporteur was the newly (only six days before) promoted Vice President Rosario Silva de Lapuerta from Spain. The core of the judgment is surprisingly succinct, not too say: short, comprising only some ten paragraphs:

34 Thus, the Court has held that, although certain actions between a public authority and a person governed by private law may come within the scope of that regulation, it is otherwise where the public authority is acting in the exercise of its public powers (judgment of 15 February 2007, Lechouritou and Others, C?292/05, EU:C:2007:102, paragraph 31 and the case-law cited).

35 That applies, namely, to disputes resulting from the exercise of public powers by one of the parties to the case, as it exercises powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals (judgment of 15 February 2007, Lechouritou and Others, C?292/05, EU:C:2007:102, paragraph 34).

36 As regards the dispute in the main proceedings, it must, consequently, be established whether its origin stems from the acts of the Hellenic Republic, which arise from the exercise of public authority.

37 As stated by the Advocate General in points 62 et seq. of his Opinion, the manifestation of that exercise is the result of both the nature and the modalities of the changes to the contractual relationship between the Greek State and the holders of the securities at issue in the main proceedings and the exceptional context in which those changes took place.

38 Those securities, following the adoption of Law 4050/2012 by the Greek legislator and the retroactive introduction of a CAC according to that law, were replaced by new securities with a much lower nominal value. Such a substitution of securities was not provided for in the initial borrowing terms or in the Greek law in force at the time that the securities subject to those conditions were issued.

39 Thus, that retroactive introduction of a CAC allowed the Hellenic Republic to impose on all of the holders of securities a substantial amendment to the financial terms of those securities, including on those that would have sought to oppose that amendment.

40 Furthermore, the unprecedented reliance on the retroactive inclusion of a CAC and the resulting amendment to the financial terms took place in an exceptional context, in the circumstances of a serious financial crisis. They were namely dictated by the necessity, within the framework of an intergovernmental assistance mechanism, to restructure the Greek State’s public debt and to prevent the risk of failure of the restructuring plan of that debt, to avoid that State failing to pay and to ensure the financial stability of the euro area. By declarations of 21 July and 26 October 2011, the euro area Heads of State or Government affirmed that, regarding the participation of the private sector, the situation of the Hellenic Republic called for an exceptional solution.

41 The exceptional nature of that situation also results from the fact that, according to Article 12(3) of the EMS Treaty, CACs are to be included, as of 1 January 2013, in all new euro area government securities with maturity above one year, in a way which ensures that their legal impact be identical.

42 It follows that, having regard to the exceptional character of the conditions and the circumstances surrounding the adoption of Law 4050/2012, according to which the initial borrowing terms of the sovereign bonds at issue in the main proceedings were unilaterally and retroactively amended by the introduction of a CAC, and to the public interest objective that it pursues, the origin of the dispute in the main proceeding stems from the manifestation of public authority and results from the acts of the Greek State in the exercise of that public authority, in such a way that that dispute does not fall within ‘civil and commercial matters’ within the meaning of Article 1(1) of Regulation No 1215/2012.

43 In those circumstances, the answer to the question referred is that Article 1(1) of Regulation No 1215/2012 is to be interpreted as meaning that a dispute, such as that at issue in the main proceedings, relating to an action brought by a natural person having acquired bonds issued by a Member State, against that State and seeking to contest the exchange of those bonds with bonds of a lower value, imposed on that natural person by the effect of a law adopted in exceptional circumstances by the national legislator, according to which those terms were unilaterally and retroactively amended by the introduction of a CAC allowing a majority of holders of the relevant bonds to impose that exchange on the minority, does not fall within ‘civil and commercial matters’ within the meaning of that article.

This mirrors sometimes to the letter the core of the opinion delivered by A-G Bot from France (delivered on 4 July 2018, ECLI:EU:C:2018:528 paras. 62-76). Only rarely the CJEU has argued in such an openly political manner when deciding issues of the Brussels I/Ibis regime. The underlying ratio is evident: Greece must not fall for otherwise the Eurozone in its entirety is feared to break down. The individual creditors’ particular interests are sacrificed for the common good of Greece, the Eurozone and the EU. (The so called Troika including the EU was mainly responsible for the introduction of the haircut into Greek law by demanding the reduction of Greece’s public debt.)

Yet a second, more technical thought appears necessary: Hellas might have triumphed in the concrete case. But the victory she scored might turn out to be a Pyrrhic victory. Declaring Art. 1 (2) 2nd sentence Brussels Ibis Regulation operational wipes out for instance jurisdiction under Art. 7 (1) Brussels Ibis Regulation – but it also wipes out Art. 5 Brussels Ibis Regulation. Greece as the defendant is left to the possibly tender mercy of the national jurisdiction rules of her EU partner States once one is prepared to proceed to the realm of international jurisdiction. Hence, as to the admissibility of the claims all boils down to the question whether Greece enjoys immunity for her haircut administered. Kuhn in fact reduces the number of defenses available to Greece by one.

Joined Cases C-487/C-489/17 Alfonso Verlezza et al, in which Campos Sánchez-Bordona AG opined  last week, (no version in English available) is one of those rather technical EU environmental law cases which for that reason risks being overlooked by many. This is even more the case in EU waste law. Many of its provisions are subject to criminal law sanctions, hence encouraging defendants to take its application to the most intricate of corners so as to avoid a criminal conviction.

Verlezza et al concerns the implementation by Italy of a notoriously tricky part of EU waste law: the determination of wastes as being ‘hazardous’. Clearly, these wastes are subject to a range of stricter measures than ordinary wastes. Interestingly, while these wastes are more dangerous than ordinary wastes, they are often also more attractive to waste industries: for as secondary raw materials they may have high value (one can think of cartridges, batteries, heavy metals).

Protracted to and fro at the time between the European Commission and the Member States plus Parliament (which I explain in relevant chapter of my Handbook of EU Waste law; which I am pleased to note the AG refers to), eventually led to a regime with two or if one likes three categories: wastes considered per se hazardous; and wastes which may be considered hazardous or not, depending on whether or not they display hazardous properties in the case at issue (hence three categories: hazardous per se; non-hazardous and hazardous in concreto). This latter category are the so-called ‘mirror entries’: wastes originating from the same source which depending on the specifics of the case, may be hazardous or not.

Wastes produced by households (‘domestic waste’) are not considered hazardous. However the AG emphasises correctly that this exemption from the hazardous waste regime (via Article 20 of the waste framework Directive, 2008/98) does not apply to the case at issue, given that the ‘domestic’ wastes concerned have already been mechanically sorted. It is the qualification of the waste residues following sorting that needs to be resolved.

The mirror entries are the result of heated debate between the Institutions. The EC was hesitant to provide a binding list given the need for individual assessment; Council and EP were looking for regulatory certainty. In the end, Member States may (indeed have to)  consider waste as hazardous when the material displays one or more of the hazardous properties listed in Annex to the EU list of waste. This also requires the Member States to issue a procedure which guides this assessment.  It is the specifics of the Italian procedure (producers have to classify specific streams of waste as either hazardous or not; they have to carry out the necessary scientific tests; they are bound by the precautionary principle) which have triggered the case at issue.

At 19 the AG refers to the discussion in Italian scholarship: one part among others on the basis of the precautionary principle defends a reversal of the burden of proof: waste in the mirror entries is considered hazardous unless industry proves its non-hazardous characteristics; the other part proposes that scientific analysis needs to determine hazardousness in each specific case (quoting the sustainable development of the sector in support).

The AG opines that the Italian modus operandi needs to be given the green light, among others referring to the recent April 2018 EC guidance on wastes classification and the criteria defined in the Directive, which render a waste hazardous: producers of waste are perfectly capable indeed in the Directive’s set-up have to assess the hazardous character of the waste and the Italian regulations are a capable way of ensuring this.

The defendants’ ultimate argument that the precautionary principle should allow them to consider waste as hazardous even without such assessment, also fails: scientific assessment is able to determine a substance’s hazardous characteristics.  Defendants’ approach would lead to all mirror entries being defined as hazardous. The Directive’s principle of cost benefit analysis ensures this does not lead to excessive testing-  proportionate testing for properties will do the job. (It may be surprising that the defendants make this argument; but remember: in a criminal procedure all arguments are useful to try and torpedo national law or practice upon which a prosecution is based; without a valid law,, no prosecution).

This latter part of the Opinion, related to the precautionary principle, is a useful reminder to its opponents (who came out in force following this summer’s mutagenesis ruling; for excellent review of which see KJ Garnett here), of the principle’ true meaning.

Geert.

Handbook of EU Waste law, 2nd ed. 2015, OUP, Chapter 2, Heading 2. ff (to which the AG refers).

On 4 and 5 December 2018 the following two events will take place at the University of Antwerp:

1. On 4 December 2018, Dilyara Nigmatullina, postdoctoral researcher at the University of Antwerp, invites you to the launch of her book entitled ‘Combining Mediation and Arbitration in International Commercial Dispute Resolution‘ published by Routledge earlier this year. The launch is organized with the support of the Law Enforcement research group and involves a discussion by an expert panel and is scheduled for 19:00 – 21:15. Participation is free of charge and there is a possibility to order the book with 20% discount. More information can be found here.
2. On 5 December 2018, Mr. Jeremy Lack, an ADR Neutral and Attorney-at-Law specialized in international dispute prevention and resolution processes, will give a seminar on ‘Applying neurobiology to negotiation, mediation, arbitration and mixed mode processes’. The seminar is organised with the support of the Law Enforcement research group and will take place at 10:00 -11:30. Participation is free of charge. More information can be found here.

Those who are interested in attending any of the above events are asked to confirm their participation by Monday 26 November at the latest by sending an email to dilyara.nigmatullina@uantwerpen.be.

My reporting on [2018] EWHC 965 (Comm) Republic of Angola v Perfectbit et al is a bit overdue – the case came to my attention again recently in the context of a non-EU brief and I am grateful to Allen & Overy having reported it at the time: please refer to their summary for an overview of the issues and decision (concise summary reads ‘Despite an exclusive jurisdiction clause in favour of the Angolan courts, the High Court was satisfied that England was the appropriate forum to hear a claim by the Republic of Angola and Angola’s central bank against several English and non-EU defendants.’).

In short, the EU’s anchor defendants mechanism (Brussel I Recast, Article 8(1) cannot be used to establish jurisdiction against a non-EU defendant: residual conflicts rules apply. However Bryan J at 124 re-emphasises the extended effect of Owusu in cases such as these at issue:

‘The passages I have quoted were quoted by the Court of Appeal in Lungowe v Vedanta Resources plc [2017] EWCA Civ 1528; [2017] BCC 787 at paragraphs [114] and [115] with approval. Simon LJ (with whom Jackson and Asplin LJJ agreed) at paragraph [113] also referred to the following observations made by the editors of Dicey and Morris:

“113. At paragraph 12-033, the editors of Dicey note the classic exposition of Lord Goff’s forum non conveniens test in the Spiliada case, but add: Lord Goff could not have foreseen, however, the subsequent distortion which would be brought about by the decision of the European Court in Owusu v Jackson. The direct effect of that case is that where proceedings in a civil or commercial matter are brought against a defendant who is domiciled in the United Kingdom, the court has no power to stay those proceedings on the ground of forum non conveniens. Its indirect effect is felt in a case in which there are multiple defendants, some of whom are not domiciled in a Member State and to whom the plea of forum non conveniens remains open: it is inevitable that the ability of those co-defendants to obtain a stay (or to resist service out of the jurisdiction) by pointing to the courts of a non-Member State which would otherwise represent the forum conveniens, will be reduced, for to grant jurisdictional relief to some but not to others will fragment what ought to be conducted as a single trial … There is no doubt, however, that the Owusu factor will have made things worse for a defendant who wishes to rely on the principle of forum non conveniens when a co-defendant cannot.” ‘

In short, against non-EU defendants whose case is anchored with an EU (England and Wales) defendant, forum non conveniens remains open but has become more unlikely. One issue perhaps under-considered by the English courts is Brussels Recast Article 34’s juncto recital 24 impact of exclusive choice of court in favour of a third State (neutralising Owusu for those specific circumstances) – not powerful enough perhaps in the case of a multitude of defendants.

Case goes to trial.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.4 (International impact of the Brussels I Recast Regulation), Heading 2.2.14.5.2.

The International Court of Arbitration in affiliation with the Chamber of Commerce and Industry of the Kyrgyz Republic, in association with the the Asian International Arbitration Centre & the ICC International Court of Arbitration, is hosting an international conference on the New York Convention and its interaction with domestic laws of the Central Asian countries. The conference will take place in Bishkek on November 30, 2018.

The goals of the conference are to examine the interaction between the New York Convention and domestic
legislation of the Central Asian countries, and to facilitate the exchange between experts from different jurisdictions of their experiences in Alternative Dispute Resolution.

The program of the conference and all pertinent information regarding the event may be found here.