Flux des sites DIP

I have reported before on the relevance of lex curia /curial law and other lex causae decisions to be made in the arbitration context. I have also reported on the qualification of ‘international‘ for conflict of law /private international law purposes. And finally of course privity of choice of court and -law is no stranger in my postings either. All these considerations apply in the arbitration context, too.

Thank you Herbert Smith for flagging CS(COMM) 447/2017 GMR Energy, in which all these issues featured in the arbitration context. The judgment would not seem to add anything new (mostly applying precedent) however it is a usual reminder of the principles. As reported by HS (and with further factual background there), GMR Energy argued

• on the plain reading of the arbitration clauses, Singapore was not the seat of arbitration but only the chosen place or venue for hearings; Not so, the High Court found: reference to SIAC rules and to Singapore  points to Singapore as the curial seat;
• the parties being Indian, choice of a foreign seat for arbitration would be in contravention of Section 28 of the Indian Contract Act 1872 which provides that agreements which restrain parties’ rights to commence legal proceedings are void (save for those which do so by way of an arbitration agreement) – GMR Energy contended that an agreement between Indian parties to arbitrate offshore would fall foul of this provision. This, too, the High Court rejected: per precedent, offshore arbitration is compatible with the Act. (It is also particularly useful for Indian subsidiaries of foreign companies); and
• for two Indian parties to choose an overseas seat for their arbitration (thereby disapplying Part I of the Arbitration Act) would amount to a derogation from Indian substantive law, and therefore would not be permissible. This, the High Court ruled, is not a decision to make at the stage of jurisdictional disputes between the parties.

Further, on  the issue of privity, Doosan India ‘contended that GMR Energy should be party to the SIAC Arbitration proceedings by virtue of common family ownership and governance, lack of corporate formalities between the companies, common directorships, logos and letterheads, and GMR Energy’s past conduct in making payments towards GCEL’s debts’ (I am quoting HS’s briefing here). This is referred to as the alter ego doctrine and the High Court upheld it. Liability for affiliated undertakings’ actions is to be discussed on the merits (here: by the arbitral tribunal). But a the level of jurisdiction (including reference to arbitration), Doosan India’s arguments were upheld: the common ownership between the entities; the non-observance of separate corporate formalities and co-mingling of corporate funds; and GMR Energy’s undertaking to discharge liabilities of GCEL (and the fact that it had made part payments towards the same) all conspire to the conclusion that GMR Energy is bound by the arbitration agreement.

An interesting confirmation of precedent and ditto application of the alter ego doctrine.

Geert.

by Lukas Schmidt, Research Fellow at the Center for Transnational Commercial Dispute Resolution (TCDR) of the EBS Law School, Wiesbaden, Germany.

With International Insolvency Law Part II having been published, Bob Wessels’ 10 volume series ‘Insolventierecht’ (Insolvency Law) is now completed in its 4th edition. The publication comprehensively deals with the European Insolvency Regulation Recast as entered into force on 26 June 2017, while International Insolvency Law: Part I Global Perspectives on Cross-Border Insolvency Law, already published at the end of 2015, covers the core concepts of Cross-Border Insolvency Law, other regional frameworks than the EIR and relevant instruments of soft law. Thus, both books collectively provide a comprehensive overview of the current state on Cross-Border Insolvency Law. The book is ‘user supported’ as it was possible to send useful information or comments to the author on drafts of texts of the book which were available online in early 2017. International Insolvency Law Part II comes in form of a commentary, which makes its structure more or less self-explaining. Besides the commentary itself, it offers an introduction to the EIR, a bibliography, table of cases and legislation, as well as five appendices and a consolidated index for Part I and Part II.

The commentary itself is up to date, as it includes all recent case-law and literature so that you can find profound information on all questions relevant in the context of the EIR. Highly recommended is the part on Cross-Border Cooperation and Communication, which sheds some light into this area of cross-border insolvency law that is shaped by practitioners and courts more than by the legislator. Then again, one might have wished to see some more thoughts on the new instrument of the undertaking in Art. 36 EIR, e. g. on the question of applicable law, especially the interplay between the undertaking and the rules governing rights in rem and acts detrimental to creditors.

Not only the commentary itself, but also its exhaustive bibliography and table of cases covering presumably every source relevant in cross-border insolvency law today make International Insolvency Law Part II a standard reference for practitioners as well as academics.

International Insolvency Law: Part II European Insolvency Law, 4th edition 2017 is available here.

Thank you Bob Wessels for again alerting us timely to two recent decisions by the Dutch courts, applying the Insolvency Regulation 2015, on the determination of COMI – Centre of Main Interests. Bob’s review is excellent per usual hence I am happy to refer for complete background. In short, the decisions are

• in Powerstorm: textbook applications on the public expression (hence ascertainability by third parties, to use the CJEU’s phrase of words) of COMI, which third parties have to rely on. Here: to displace the presumption of COMI in the United States (place of incorporation; in re Powerstorm) in favour of Amsterdam.
• in Bezuijen BV against X, a natural person: with extensive reference to the recitals of the EIR 2015, that the Dutch courts have to consider jurisdiction proprio motu, evidently, and that they need serious evidence to uphold jurisdiction against a natural person who, both parties agree, no longer has his residence in The Netherlands (where it is, is in dispute but it is probably somewhere in the vicinity of Paris).

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 5, Heading 5.6.1.

By Ana Koprivica, Research Fellow MPI Luxembourg.

On 20th and 21st November 2017 in Brussels, the Academy of European Law (ERA) hosted the seminar: “Access to Documents in the EU and Beyond: Regulation 1049/2001 in Practice”, bringing together national and EU civil servants, lawyers, active members of the NGOs and civil society, and academics. The seminar aimed at providing participants with answers to practical questions on access to information and documents in the European Union. The focus in particular was on the practical implementation of Regulation 1049/2001 on access to documents by the EU institutions, on one hand, and by the relevant institutions in Member States, on the other. The seminar further provided for an overview of recent relevant case law of the Court of Justice of the European Union and the opportunity to deliberate about how best to implement those judgments in practice. Lastly, it offered a platform for a discussion of the future development of access to information. This post provides a brief overview of the presentations. For a full report on the presentations and of the discussions on the issues raised, see Full Report.

Following the introductory remarks by the organisers, Prof. Päivi Leino-Sandberg (University of Eastern Finland) provided the audience with a comprehensive overview of the diverse European Union legal landscape in which the right to information operates: namely, the EU Treaties, the Charter of Fundamental Rights and the European Convention of Human Rights.

This set the scene for the discussion about the challenges of practical implementation of the Regulation by the representatives of the European Commission (Martine Fouwels), the European Parliament (Chiara Malasomma) and the Council of the EU (Emanuele Rebasti). The audience was next given a valuable insight into the best practices of several Member States, namely Sweden (Sara Johanesson), Finland (Anna Pohjalainen), and Poland (Ewa Gromnicka), in the application of Regulation 1049/2001 as well as the insight into the common challenges they are confronted with in this context.

Katarzyna Szychowska (General Court of the European Union) provided the audience with a comprehensive overview of the recent case law of the CJEU in matters relating to access to documents under Regulation 1049/2001. In this respect, a distinction was made between the different types of documents to which access has been requested and on which the Court has built its case law.

Day One closed with a stimulating workshop, which was prepared and conducted by Emanuele Rebasti. The participants were presented with a hypothetical problem of handling a request for access to documents and asked to apply the information gained during the seminar.

The next morning Vitor Teixeira from Transparency International Brussels presented the activities of his organisation, oriented towards creating a new system of EU lobby transparency. The focus in particular was on the idea of a mandatory EU lobby register.

The conference closed with a round table discussion on new ideas with regard to access to documents. Nick Aiossa (Transparency International Brussels), Helen Darbishire (Access Info Europe), Graham Smith (European Ombudsman Cabinet), exchanged their views on the ways in which to improve the dialogue between the citizens and the authorities in the area of access to information. This prompted a lively discussion amongst the participants.

The overall conclusion of the conference was that the debate on transparency and access to documents has become much more sophisticated since the adoption of the Regulation 1049/2001 and that a lot has been done in order to improve its implementation. The importance was stressed of the dialogue among all the stakeholders in order to better the situation.

At the end of October the Rechtbank Amsterdam held that ‘booze bikes’ can be kept from parts of Amsterdam. The municipality had resorted to the ban both to address congestion (the bikes are slow and chunky; the roads in the part of Amsterdam concerned, narrow) and rowdiness (the bikes are often used for stag parties and let’s just say that the ‘bike’ part of the trip is not the one that attracts its users). In my experience (from a resident’s point of view) these bikes are a bit like Brexit: attractive for five minutes to some; a right nuisance for the remainder of the journey.

In 2009 I wrote a short piece reflecting on use restrictions from an EU point of view. In it I refer ia to C-142/05 Mickelsson and to C-110/05 Commission v Italy (motorcyle trailers) – my analysis and that of Peter Oliver may be applied here mutatis mutandis. The degree to which lawfully marketed products may be restricted in their use has so far not entertained the Court of Justice in great numbers. Yet the use of such restrictions is bound to increase, with local authorities in particular imposing restrictions for environmental, public health and other ‘sustainable development’ purposes. Witness e.g. Venice banning wheeled suitcases, historic city centres banning diesel cars etc.

In the booze bike case the Court at Amsterdam (at 2.9) simply said that applicants should have provided detail of their argument as to why the ban might contravene EU law. Expect a second round on similar cases at some point.

Geert.

The vacancy for the position of Diplomat Lawyer at the Permanent Bureau of the Hague Conference on Private International Law (HCCH) has been reopened. The deadline for applications is 22 January 2018. For more information, click here.

As announced, the responsibilities of the selected candidate will be as follows:

“The selected candidate will oversee the completion of the “Judgments Project” and subsequent efforts to promote the Convention. His or her portfolio will also include work relating to the 2005 Choice of Court Convention and the Hague Principles, and any other legal work of the Permanent Bureau as required. He or she will be part of the senior management team and assure a good, co-operative working atmosphere, conducive to team work and efficient communications, both within the Permanent Bureau and in relations with representatives of States and Organisations (respect of the Permanent Bureau’s core values is essential). The selected candidate will represent the HCCH in dealings with Members as well as other stakeholders and interested parties. He or she will also be expected to assist with the administration of the Permanent Bureau.”

Others have studied the EU’s legal basis for energy policy much better than I have. Chiefly among them prof Leonie Reins. e.g.  for RECIEL here and in her Phd here. The impact of this discussion is high: since the introduction of an energy Title in the EU Treaties (following Lisbon) whether so designed or not, the prospect of that Title’s requirement on unanimity for measures which ‘have a significant effect on a Member State’s choice between different energy sources’ looms heavily over the EU’s environment policy. The EU’s emissions trading system – ETS is the prime candidate for falling victim to an extensive interpretation of Article 192(2)c TFEU, which harbours the unanimity requirement.

In C-5/16 Poland v EP and Council Mengozzi AG Opined last week. At issue is Poland’s opposition to a MSR – a market stability reserve for the Union greenhouse gas emission trading scheme, essentially a long-term parking for surplus allowances to enable the ETS to safeguard collapse of prices in the event of excess supply. The resulting increase in the price of allowances was inter alia intended to encourage fuel switching and to discourage investments in coal-fired power stations (hence of course Poland’s interest).

Relevant to future reference is especially the AG’s view at 25, which I include in full: ‘as a derogation, Article 192(2)(c) TFEU is to be interpreted strictly, especially since an efficient modern environment policy cannot ignore energy questions. I share the fears expressed by the defendants and the interveners that the applicant’s proposed interpretation of Article 192(2)(c) TFEU and the conclusions which it draws from that interpretation for the examination of the legal basis of the contested decision would effectively block any legislative initiative by recognising a right of veto for Member States, as the Union would adopt measures inviting them only to rationalise their CO2-consuming activities. Furthermore, such an interpretation would doom the ETS to failure as it would prevent the EU legislature from correcting its structural deficiencies. In addition, although I would point out that the goal of introducing the MSR is not to form the price of allowances but simply to ensure the efficiency of the ETS, in any event, an operator’s choice of a certain energy source or production technology cannot depend on that price alone, which does not in itself define the production costs, which are determined by a variety of factors. Even with the introduction of the MSR, the choice of technology still remains in the hands of operators and is not dictated by the European Union.’

I am not sure to what degree the Court’s judgment will enable us to draw criteria with wider impact than just the current case – but it would certainly be helpful. Mengozzi AG firstly emphasises strict interpretation of the ‘energy mix’ exception. Further, in the paras preceeding the aforecited one, links amendments to existing laws largely to the latter’s legal basis. Supports the Institutions and Spain, France and Sweden (intervening; the position of Germany, also intervening, was not made clear) in their warning against veto power in the energy /climate change context; and finally further dilutes the exception by looking at policies as they work in practice, not just in theory. On this point, the AG looks at the ETS specifically however his view has broader appeal: it would essentially mean that when Member States’ and individuals’ /undertakings’ behaviour is determined by regulatory intervention, some of which clearly based on a legal basis other than Article 192(2)c TFEU, the latter is not determinant in deciding proper legal basis.

This is an important case for the future of EU environment and energy policy.

Geert.

A meeting of the Working Group on the Authentication of Documents Generated by Supranational and Intergovernmental Organisations took place on 1 December 2017 and its Report has just been made available on the Hague Conference (HCCH) website (click here). This is both the first and the last meeting of the Working Group.

A couple of Information Documents were drawn up for the meeting, in particular a summary of proposals for consideration and a comparative summary of documents generated by supranational and intergovernmental organisations and their authentication practices. As is evident from the findings of the latter, it would appear that some documents generated by intellectual property organisations (such as patents, trademarks and designs) may experience difficulties when it comes to authentication. However, this does not mean that these are the only documents generated by supranational and intergovernmental organisations that may need to be authenticated and the Report is thus drafted in general terms.

The Report indicates:

“Having reviewed the different practices across Contracting Parties with respect to authenticating documents generated by supranational and intergovernmental organisations in their territory, the Group recommended the following options, if and when a need to authenticate such documents for use in another Contracting Party arises:

1. the relevant Competent Authority of the host State, in possession of the required sample signatures and seals of the officials that issue such documents for the organisation in question, may directly apostillise the documents;

2. a notary of the host State may first authenticate the document or a copy of the document and this notarial authentication is subsequently apostillised by the relevant Competent Authority;

3. a government office or authority may be designated by the host State, and which holds the required sample signatures and seals of the officials that execute such documents for the organisation in question, to act as an intermediary for the purposes of authenticating such documents and this authentication is subsequently apostillised by the relevant Competent Authority.”

In [2017] EWHC 2932 (Fam) Radseresht v Radsheresht-Spain Cohen J is asked to recognise a divorce (and ensuing financial arrangements) granted under Dubai law.

I will not discuss the merits of the case (Justice Cohen does so proficiently, not just to my lay eye but I am assuming also the expert eye; he decides there was an intention to continue to stay married). Rather, the case is an interesting example to show those having to get used to conflict of laws. The High Court has no hesitation to apply Dubai law with all its in and outs (part of the judgment queries whether there were continued sexual relationships between the (ex?) spouses), in a court in London.

Of note is also that the High Court suggests that but for the very late raising of the issue, it could have queried whether the courts at Dubai had jurisdiction in the first place, habitual residence of the parties not having been at the UAE (the suggestion seems to have been made by counsel of the husband that the relevant criterion would have been nationality anyway).

Geert.

On the initiative of Tobias Asser, the First Diplomatic Session of the Hague Conference on Private International Law (HCCH) was convoked on 12 September 1893. In 2018, the HCCH is celebrating this joyous occasion with several events throughout the year.

On the anniversary date, 12 September 2018, the official ceremony will take place in The Hague. The event will feature selected speeches as well as an official photo opportunity and will be followed by a reception.

On 18-20 April 2018, the global conference “The HCCH 125 – Ways Forward: Challenges and Opportunities in an Increasingly Connected World” will be held in Hong Kong SAR. This event will gather leading experts to discuss the opportunities for, and challenges to, private international law.
On 10 September 2018, the Embassy of Hungary in The Hague will host a half-day colloquium to discuss the determinant role and impact of the HCCH’s work, and its instruments, on national private international law legislation.

In October/November 2018, the Embassy of Austria in The Hague plans to organise a discussion event relating to the work of the HCCH and its relationship with the EU, as part of Austria’s Presidency of the Council of the European Union.

Please follow the Facebook page HCCH 125 to receive updates on the events to be held in relation to the anniversary.

The Max Planck Institute Luxembourg is currently recruiting new members for its team. Two  positions are open, one for a Research Fellow (PhD candidate) for the Department of European and Comparative Procedural Law, and one for a Senior Research Fellow for the same Department. In both cases the offer is for a fixed-term contract for at least 18 month – contract extension is possible.

Applications are to be made on line until 15th December 2017. Details of the offer and documents required are indicated there as well.

Task

For a period of at least 18 months, the Research Fellow/Senior Research Fellow will conduct legal research and cooperate at the Max Planck Institute Luxembourg within the project ‘Informed Choices in Cross-Border Enforcement’ which aims at analyzing the application of the 2nd generation Regulations (the EEO, the EPO, the ESCP and the EAPO) by European Courts, in order to determine why these instruments have so far failed to realize their full potential, and how to improve such situation.

The successful candidate will be in charge of compiling data in terms of the case law of the European Court of Justice but also the French and Luxemburgish courts regarding the application of the following EU regulations:

– EEO, Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims (European Enforcement Order)
– EPO, Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure
– ESCP, Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure
– EAPO, Regulation 655/2014 establishing a European Account Preservation Order procedure (“EAPO”) establishes a new uniform European procedure for the preserving of bank accounts,
– Regulation (EU) 2015/2421 of the European Parliament and of the Council of 16 December 2015 amending Regulation (EC) No 861/2007 establishing a European Small Claims Procedure and Regulation (EC) No 1896/2006 creating a European order for payment procedure

Additionally, the Research Fellow is expected to assist in the achievement of the objectives of the Project, namely by interviewing relevant stakeholders (judges, lawyers etc.) on the same instruments. Furthermore he/she will assist in all project related activities such as uploading data to the pertinent data base, drafting minutes of meetings, contributing to interim and final reports as well as to the final book, helping in the organization of conferences and the communication with the partners.

Profile- Research Fellow

Regarding the Research fellow, the Institute is looking for a highly motivated candidate who would be interested in writing a PhD thesis under the supervision of Prof. Dr. dres Hess leading the Department of European and Comparative Procedural Law (or in a co-tutelle) in a topic connected to the project. For the purposes of the project she /he would work under the instructions of senior research fellow Prof. Dr. Marta Requejo Isidro.

Applicants must have earned a degree in law and be PhD candidates working or intending to work on a thesis related to the project’s topic or, alternatively, on a topic falling within the scope of European Procedural Law in civil and commercial matters . According to the academic grades already received, candidates must rank within the top 10 %.

The successful candidate shall demonstrate a strong interest and aptitude for legal research and have a high potential to develop excellence in academic research. Prior publications in this field of the law shall be highly regarded in the selection process.

Full proficiency in English and French is compulsory (written and oral).

Profile- Senior Research Fellow

The Institute is looking for a highly motivated candidate who would join the Department of European and Comparative Procedural Law led by Prof. Dr. dres Hess and composed by a team of five senior research fellows and 15 research fellows. For the purposes of the project she /he would work under the instructions of senior research fellow Prof. Dr. Marta Requejo Isidro.

Applicants must have earned a degree in law and hold a PhD degree by the time the join the MPI, preferably in a subject matter related to the project’s topic or, alternatively, in a topic falling within the scope of European Procedural Law in civil and commercial matters.

The successful candidate shall posses a strong interest and aptitude for legal research and have a high potential to develop excellence in academic research.

Her/his CV must portray a consolidated background in EU private international and procedural law in civil and commercial matters: prior publications in this field of the law shall be highly regarded in the selection process.

Full proficiency in English and French is compulsory (written and oral).

(I am grateful to Prof. Francesca Villata – University of Milan – for the following presentation of the latest issue of the RDIPP)

The third issue of 2017 of the Rivista di diritto internazionale privato e processuale (RDIPP, published by CEDAM) was just released.

It features two articles and three comments.

Manlio Frigo, Professor at the University of Milan, ‘Methods and Techniques of Dispute Settlement in the International Practice of the Restitution and Return of Cultural Property’ (in English)

This article focuses on the international practice in the field of cultural property disputes and examines the most effective and reliable dispute resolution methods in restitution and return of cultural property. Particularly in cases of disputes between Governmental authorities and foreign museums concerning the return or restitution of cultural property, one of the privileged solutions may consist in negotiating contractual agreements. The recent international and Italian practice have proved that these agreements may either prevent any judicial steps, or lead to a conclusion of pending administrative or judicial proceedings and have been successfully tested in recent years, more frequently within a wider frame of agreements of cultural cooperation. These agreements provide new forms of cooperation between the parties involved in such disputes and represent a mutually beneficial way out with a view to a future of collaboration.

Paolo Bertoli, Associate Professor at the University of Insubria, ‘La «Brexit» e il diritto internazionale privato e processuale’ (‘“Brexit” and Private International and Procedural Law’; in Italian)

This article discusses the implications of the forthcoming withdrawal of the United Kingdom from the European Union on the private international law rules applicable in the relationships between the EU Member States and the UK. Traditionally, the UK has been skeptic vis-à-vis the EU policy in the area of judicial cooperation in civil matters, as demonstrated, inter alia, by the opt-in regime provided for by the EU Treaties in respect of the UK’s participation to such policy and by the hostile reactions against the ECJ case law holding certain procedural norms eradicated in the UK tradition as conflicting with EU law. In the absence of any agreement between the EU and the UK, “Brexit” will imply that virtually all of the EU acquis in the field of private international law will cease to apply in the relationships between the EU Member States and the UK. Notwithstanding its historical skepticism vis-à-vis the EU policy in the field of private international law, the UK seems to be the party more interested in maintaining such rules to the greatest possible extent, in order not to jeopardize the attractiveness of its Courts and to protect its businesses.

In addition to the foregoing, the following comments are featured:

Zeno Crespi Reghizzi, Associate Professor at the University of Milan, ‘Succession and Property Rights in EU Regulation No 650/2012’ (in English)

In modern systems of private international law, “succession” and “property rights” form the subject matter of distinct conflict-of-laws provisions, with different connecting factors. Drawing the line between these two categories implies a delicate characterisation problem, which now has to be solved in a uniform manner in all the Member States, by interpreting the scope of Regulation No 650/2012. Compared to the solutions traditionally adopted by the national systems of private international law, Regulation No 650/ 2012 has increased the role of the lex successionis, which now governs not only the determination of the heirs and their shares in the estate, but also the transfer of the assets forming part of the succession estate. This solution gives rise to several coordination issues which are examined in the present paper.

Federica Falconi, Researcher at the University of Pavia, ‘Il trasferimento di competenza nell’interesse del minore alla luce dell’interpretazione della Corte di giustizia (‘Transfer of Jurisdiction in the Child’s Best Interests in Light of the Interpretation by the Court of Justice’; in Italian)

By way of exception, Article 15 of Regulation (EC) No 2201/2003 allows the court having jurisdiction to transfer the case, or a specific part thereof, to a court of another Member State, with which the child has a particular connection, provided that this latter is better placed to hear the case in the light of the best interests of the child. Based on the forum non conveniens doctrine, such a provision confers judges with significant discretion, with a view to ensure the best interests of the child in line with Article 24 of the EU Charter of Fundamental Rights. The aim of this paper is to illustrate the main features of this original mechanism, by looking firstly to its effects on the general grounds of jurisdiction established by the Regulation and then focusing on the strict conditions set out for its application. Particular attention is paid to the assessment of the child’s best interests, which appears most problematic as the relevant factors will in fact vary depending on the circumstances of the case. In this regard, some guidance has been recently provided by the Court of Justice, that has pointed out that the court having jurisdiction may take into account, among other factors, the rules of procedure in the other Member State, such as those applicable to the taking of evidence required for dealing with the case, while the court should not take into consideration the substantive law of that other Member State, which might be applicable if the case were transferred to it. The Court of Justice has further clarified that the court must be satisfied, having regard to the specific circumstances of the case, that the envisaged transfer of the case is not liable to be detrimental to the situation of the child concerned.

Sondra Faccio, Doctor of Law, ‘Trattati internazionali in materia di investimenti e condizione di reciprocità’ (‘International Investment Treaties and the Reciprocity Requirement’; in Italian)

This paper discusses the interaction between international investment agreements and the condition of reciprocity set forth by Article 16 of the Preliminary provisions to the Italian civil code. It aims to assess whether investment agreements in force for the Italian State prevail over the application of the condition of reciprocity, in relation to the governance of the investment established in Italy by a foreign investor coming from a country outside the European Union. The analysis highlights that the fair and equitable treatment, the most favored nation treatment and the national treatment standards, included in most of the Italian investment agreements, protect foreign investors against unreasonable or discriminatory measures which could affect the management of their investments and therefore their application should prevail over the application of the condition of reciprocity in relation to the governance of the investment. This interpretation reflects the object and purpose of investment agreements, which is to promote and protect foreign direct investments and to develop international economic relations between States.

Indexes and archives of RDIPP since its establishment (1965) are available on the website of the Rivista di diritto internazionale privato e processuale.

In [2017] EWHC 2928 (Comm) Dana Gas v Deutsche Bank et al., Leggatt J treats his readers to a concise insight into islamic finance (particularly in para 10) which he needs to inform readers of the essence of the case. The operation essentially involves raising investment (with a view to restructuring), organised by the main agreement (of the ‘Mudarabah’ type), subject to UAE law, and supported by a purchase undertaking of the same date, subject to English law. The set-up therefore evidently is not one of dépeçage per se (this would require one and the same agreement being subject to different laws) however it comes close.

Inevitably following unfavourable market conditions, an anti-suit injunction was sought and obtained in the UAE, followed however by English proceedings which required the aint-suit to be lifted – something which Dana Gas did not succeed in as a result of shareholder opposition. The English proceedings were effectively saved from collapse by the involvement of a third party, BlackRock, who as a non-party to the UAE sharia proceedings, were not bound by the anti-suit injunction. The somewhat complicated result is that the English proceedings really can only limp along.

Dana Gas seek confirmation that the transaction is unlawful and all the relevant contractual obligations are unenforceable as a matter of UAE law. Leggatt J with neither emotion nor hesitation refers essentially to Rome I’s universal application: the Mudarabah agreement is subject to UAE law and he is happy to assume it is invalid under UAE law – hence not enforceable by an English court. See in this respect Article 10(1) Rome I.

That however leaves the viability of the purchase undertaking. (at 46) The fact that the contract or its performance would be regarded as invalid or unlawful under the law of some other country than England (for example, a country where one of the parties is domiciled or carries on business) is generally speaking irrelevant (reference is made to Kleinwort, Sons & Co v Ungarische Baumwolle Industrie AG [1939] 2 KB 678.

At 48, Dana Gas sets out its case for unenforceability of the purchase agreement under English law. This includes reference to ordre public but also inevitably an attempt to ‘contaminate’ the purchase agreement with the Mudarabah agreement. Leggatt J justifiably turns this around: at 54: it is apparent from the purchase agreement’s terms that the risks against which the Purchase Undertaking is intended to protect the Certificateholders include the risk that the mudarabah and the transaction documents governed by UAE law will turn out to be invalid. That is why they needed to be separated. (In that respect merging the two agreements into one and applying dépeçage might give even stronger force to this argument: however I do not know whether under UAE law such constriction would be acceptable).

Further arguments swept aside, the Court turns to ordre public: Dana Gas nb employs both ordre public and, earlier Article 9(3) Rome I: overriding mandatory law: a rare treat indeed. Relevant English precedent is Ralli Brothers: Ralli Brothers v Cia Naviera Sota y Aznar [1920] 1 KB 614: an English court will not enforce an obligation which requires a party to do something which is unlawful by the law of the country in which the act has to be done. However Dana Gas later abandoned that claim for (at 80) those rules of law are only applicable if and in so far as the obligations in question have to be performed in the UAE – quod non. A switch was then made to ordre public, now with Foster v Driscoll [1929] 1 KB 470 as leading precedent. However, here too, it is only if a contract has as its object and intention the performance in a friendly foreign country of an act which is illegal under the law of that country that the contract will be considered (at 82 in fine) contrary to English public policy.

Conclusion:  the Purchase Undertaking is valid and enforceable.

Without claiming anything near proper competence in Islamic finance law, it would seem that Dana Gas does not introduce new principles. However in diligently applying conflicts analysis, Leggatt J in my view does practice a great service: he re-emphasises the need for parties clearly to identify locus implementi: the place of performance of an obligation.

Geert.

(Handbook) of Private International Law, 2nd ed. 2016: essentially, almost every section of Chapters 2 and 3.

Alongside the intensifying global efforts (the Judgments Project, HCCH) devoted to inter-country recognition and enforcement of judgments in civil and commercial matters, a new stage has been witnessed of China’s positive treatment of foreign judgments ie China starts to reciprocate, following foreign courts’ initiative of recognizing and enforcing Chinese judgments. Dr. Wenliang Zhang, from the Law School of Renmin U, reflects on this new encouraging development and has just published a timely article in the latest issue of Chinese Journal of International Law (OUP) titled “Sino–Foreign Recognition and Enforcement of Judgments: A Promising “Follow-Suit” Model?”.

“Abstract: Due to the upsurge in cross-border transaction, the movement of judgments between jurisdictions has become a hot topic. Unfortunately, China’s legislation and practice in this area has long lagged behind that of other countries, though China is not the only party to blame for the lack of a favourable Sino–foreign recognition mechanism. Encouragingly, in recent years some foreign courts have taken the initiative to recognize Chinese judgments, which Chinese courts have then responded to positively, forming a “follow-suit” circle in practice. A new opportunity has thus arrived for promoting Sino–foreign judgment recognition, and both Chinese and foreign courts should seize it, as it appears to be the most efficient and practical among possible solutions, including future domestic legislation or international treaties”.

The article is accessible at: Chinese Journal of International Law, Volume 16, Issue 3, 1 September 2017, Pages 515–545, https://doi.org/10.1093/chinesejil/jmx024 or it can be downloaded at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3077702.

The Brazilian and Portuguese Branches of the International Law Association are organising a conference to be held in Belo Horizonte, Brazil, 23 to 25 May 2018.

Those interested in participating may submit abstracts until 15 December 2017. More information here.

And I would be very happy to supervise. Thank you Nicolas Contis for flagging  Stockholm National Museum v X at the French Supreme Court /Cour de Cassation. Nul ne peut se contredire au détriment d’autrui: aka (here: procedural) estoppel. (The newly out Encyclopedia of Private international law, edited by Basedow, Ruhl, Ferrari and de Miguel Asensio, has a very good entry on it, discussing both public and private international law).

On the eve of a hearing on the ownership of an ancient artefact, a cup, defendants changed their stance and argued that the cup had belonged to their mother, for whom they were acting as representatives only. Previously, they had always presented themselves as owners. They suggested therefore that the suit was misdirected, hoping to sink it. The Court of Appeal dismissed the defendants’ motion on account of procedural estoppel. The Supreme Court disagreed: its stance means, as Nicolas summarises, that ‘to face the procedural penalty of dismissal, not only must the change of stance happen throughout the judicial proceedings (ie, notably, that a contradiction including a repeated allegation made before the launching of a suit could not pass the estoppel test), but the party at fault must also have changed its ‘pretentions’ – that is, its legal claims (meaning that changing the factual allegations presented to the courts could not pass the test either)’.

I do not see entirely clear in French civil procedure law but as I saw the case reported, the thought struck me: this would be a good topic for a PhD: a comparative study in procedural estoppel, specifically in a private international law context (especially if one were also to throw a comparison with arbitration in the mix).

Happy to discuss. Geert.

(per Mathias Goldmann)

The German Law Journal has a successful tradition of publishing timely and innovative special issues. Some of these have become standard works in their respective areas of research. While some of the special issues are curated by the Editorial Board, the German Law Journal has often worked with guest editors. To ensure both the highest quality for our readers and the best possible experience for our guest editors, the German Law Journal has launched its third call for special issues and invites prospective guest editors to submit their proposals. The deadline is 31 January 2018. For more information, please visit http://www.germanlawjournal.com/call-for-special-issue-proposals

This is effectively my second posting today on Article 24(2) Brussels I Recast.

In C-560/16 Dědouch, Wathelet AG Opined last week, on the scope of the exclusive jurisdictional rule of (now) Article 24(2) of Regulation 1215/2012. The issue arose in proceedings between Michael Dědouch et al, a group of minority shareholders on the one hand, and Jihočeská plynárenská a.s. (established in the Czech Republic) and E.ON Czech Holding AG (‘E.ON’) [established in Germany] on  the other, concerning the reasonableness of the sum which, in a procedure for removing minority shareholders (‘squeeze-out’), E.ON was required to pay Mr Dědouch et al following the compulsory transfer of their shares in Jihočeská plynárenská.

Mr Dědouch et al are suing both companies and are asking the Regional Court, České Budějovice, Czech Republic to review the reasonableness of the sum. In those proceedings E.ON raised an objection that the Czech courts lacked jurisdiction. E.ON argue that, in view of the location of its seat /domicile, only the German courts had international jurisdiction per (now) Article 4.

The regional court initially accepted jurisdiction on the basis of (now) Article 8(1): the anchor defendant mechanism (one of the two defendant companies being a Czech company). Eventually the High Court, Prague found that the Czech courts had jurisdiction under (old) Article 5(1)(a) of the Brussels I Regulation: the special jurisdictional rules for contracts.

Wathelet AG suggests the case raises the complex issue of litigation in intra-company disputes. At 21 he writes that the facts highlight a structural problem in the Regulation, namely ‘the absence of a basis of jurisdiction dedicated to the resolution of internal disputes within companies, such as disputes between shareholders or between shareholders and directors or between the company and its directors.’ That is not quite correct: it is not because the Regulation has no tailor-made regime for this type of dispute that is has no jurisdictional basis for it. That a subject-matter is not verbatim included in the Regulation does not mean it is not regulated by it.

The AG then (at 23) considers that the issue under consideration is complicated by the difficulty of applying (now) Articles 7(1) and (2), ‘since the removal of the minority shareholders and the consideration decided by a resolution of the general meeting are neither a contract nor a tort, delict or quasi-delict.’ I am not so sure. Is there no ‘obligation freely assumed’ between minority and other shareholders of the same company? Are they not bound by some kind of ‘contract’ (in the broad, Jakob Handte sense) when becoming shareholders of one and the same company? That (at 24) ‘The principle of a procedure for squeezing out the minority shareholders is that the principal shareholder can start it without their consent‘ I do not find convincing in this respect. Plenty of contractual arrangements do not limit contracting parties’ freedom to act: except, their actions may have contractual consequences. The AG in my view focuses too much on the squeeze out being one-sided. An alternative view may see a wrongful deployment of squeeze-out a breach of an earlier contractual, indeed fiduciary duty between /among shareholders.

Unlike the AG (at 26), neither do I see great obstacle in the difficulty in determination of a specific place of performance of such contractual duties between shareholders in the company law context. They may not fit within the default categories of Article 7(1), however I can see many a national judge not finding it impossible to determine a place of performance.

On the basis of these perceived difficulties the AG dismisses application of Articles 7(1) and (2) and then considers, and rejects, a strict application of Article 24(2). In other words in the AG’s view Article 24(2) is engaged here.

This is a tricky call. Justified reference is made by the AG to C‑372/07 Hassett, in which (then) Article 22(2) was held no to apply to a decision made by the Board of the Health Organisation not to indemnify two of their members in cases of medical negligence: this was found by the CJEU to be an action relating to the way in which a company organ exercises its functions – not covered by Article 24(2). In Dědouch, the action relates to the amount which the General Meeting of the company fixed as the compensation E.ON was required to pay the minority shareholders following the transfer of the shares. Notwithstanding Czech company law being the lex causae in assisting the GM in that decision, I am not convinced this engages Article 24(2) (hence reserving jurisdiction to the Czech courts).

In summary, I believe the Court should reject application of Article 24(2), and instruct the national courts to get on with the determination of jurisdiction per Article 7, or indeed 8.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.5, Heading 2.2.11.1, Heading 2.2.12.1.

I reported on submission to jurisdiction in the English legal context in re Golden Endurance, and on the issue of the application of (now) Brussel I Recast’s Article 24’s exclusive jurisdictional rules in Dal Al Arkan. In Dennis v TAG Group [2017] EWHC 919 (Ch) the High Court first of all revisits the issue of submission to jurisdiction in the context of injunction proceedings, and also held that permission for service out of jurisdiction is not required since the (now) Article 24 rules apply regardless of domicile of the parties. Clyde & Co have summary of the facts here.

Mr Dennis was the CEO of the England and Wales incorporated McLaren Technology Group Ltd. He claims he has suffered unfair prejudice as a result of suggested Board resolutions to be passed (and now passed) and relies on purported breaches of the Companies Act 2006, articles of association, shareholder agreement and service agreement to support his petition: this arguably engages Article 24(2) of the Brussels I Recast.

Application for injunctive relief sought to restrain Respondents from placing Plaintiff on garden leave and delegating the authority of the board to an interim committee. At issue first is whether Respondents’ engagement with the injunctive proceedings amounted to submission of jurisdiction. Briggs CR held that it so did: language in isolated correspondence reserving rights as to jurisdiction amounts to nothing if parties keep schtum about it when it really matters: at the injunctive hearings and forms relating to same.

Briggs held that even in the alternative, had there not been submission, Article 24 (I assume what is meant is Article 24(2) given the subject of the claim) applies regardless of the domicile of the parties hence submission is irrelevant (and indeed permission for service out of jurisdiction not required  – one assumed to the (insurance) relief of Respindents’ counsel. On that point Dal Arkan had already been confirmed Deutsche Bank AG v Sebastian Holdings Inc & Alexander Vik [2017] EWHC 459 .

A good and attractively concise ruling.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6.

Bettina Rentsch, Humboldt-University Berlin, has authored book about the concept of “habitual residence” in European private international law (Der gewöhnliche Aufenthalt im System des Europäischen Kollisionsrechts, ISBN 978-3-16-155172-7). Published by Mohr Siebeck, she sheds light on the concept as such and re-frames the ongoing academic debate with a focus on the relationship between habitual residence and party autonomy.

The book is in German, but the author has kindly provided us with the following English language summary:

European PIL has become increasingly heterogeneous in its legal foundations, shape and principles. Still, all so-called “Rome” regulations are homogeneous if not even uniform in their connecting factors: In the absence of Choice, the law applicable will determined by virtue of Habitual Residence. As a general baseline, the pairing of Party Autonomy and Habitual Residence is a common feature of all Rome regulations. While the recent rise of the former anhas given rise to widespread academic discussion, little has been said on why the EU legislator ever came to choose Habitual Residence as its primary “objective” connecting factor. Neither is there clarity on the political backgrounds nor on the secondary question of whether the former is identical in all contexts Habitual Residence is employed in.

In light of the increase of transnational migration in the EU, the present conceptual vagueness of Habitual Residence cannot be tolerated. In fact, there is both a need for reliable proxies in determining Habitual Residence and an urge to assess whether it can and must be understood and applied different in respective areas of EU Private International Law.

This publication undertakes a first, though definitely not final attempt to shape the blurry and vague notion of Habitual Residence in European Private International Law . Its objective is to, first, find overarching and general means and then to determine approproate criteria to previsibly determine the conditions for a cross-referencing between respective fields of application. Within this framework, the book presents two core arguments:

First, the threshold criteria for Habitual Residence are identical no matter its “purpose” and systematic environment. As a result, drawing the line between different instances of Habitual Residence is a question of degree.

Second, Habitual Residence must be interpreted in light of its respective neighboring choice of law-provisions. In other words, the the extent of choice of law possibilities must be understood as a proxy for interpreting Habitual Residence. Hence, the more leeway the European legislator confers to individuals and the more self-regulation through party autonomy he allows for, the less control by authorities can be required. In practical terms, the mere presence and superficial social interaction of a human being can be sufficient to determine Habitual Residence in contractual relations, the visible limitations of choice in areas like successions law indicate legislative intent.