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We have not yet alerted our readers to the first issue of Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ) which was published in February 2017. So, here we go:

Jürgen Basedow, Internationales Einheitsprivatrecht im Zeitalter der Globalisierung (The International Unification of Private Law in the Era of Globalization)

In unifying private law, the international community initially made use of treaties since the subjects of the early years before World War I were conceived of as affecting national sovereignty. As this tool proved functional, it was subsequently retained as the vehicle of “pure private law” unification. In more recent times an increasingly varied number of legal forms can be observed. However, whereas model laws and principles facilitate a spontaneous approximation of laws and allow for the interpretation and supplementation of conventions in legislation and practice, they do not unify the law. Both tools thus have their limits.

The institutionalization of legal unification started after World War II; it has meanwhile acquired a very comprehensive character. There is hardly any subject not capable of being treated by a specialized international agency. In many areas international organizations have also taken the political lead in the unification of laws. The task of safeguarding the consistency of private law in this multi-voiced concert is incumbent on UNIDROIT, UNCITRAL and the Hague Conference.

In recent decades, a new actor has entered the scene: the European Union. As regards the unification of laws within Europe, it has ousted other international organizations. By necessity the other organizations have relocated the centre of their activities to the extra-European, universal field. The EU has become active in that context as well: as a party to universal conventions, not as a producer of uniform law.

The interpretation of uniform law has to a large extent come to be understood as autonomous interpretation taking into account the insights provided by comparative law. With regard to gap-filling, recourse should be had to general principles governing the respective area of law at issue. In the long run, the aim of uniform law application cannot be achieved without institutional arrangements such as the referral of preliminary questions to an international tribunal.

The traditional approach of amending protocols has proven unsatisfactory for adapting aging conventions to a new environment because of the inherent uncertainty and time-consuming nature of ratification procedures. New approaches in some conventions demonstrate that simplified revision procedures are possible and promising.

Ulrich G. Schroeter, Gegenwart und Zukunft des Einheitskaufrechts (Present and Future of Uniform Sales Law)

Uniform sales law forms a part of uniform private law that comprises a number of Conventions unifying either conflict-of-laws rules for sales or substantive sales law. The Hague Convention on the Law Applicable to International Sales of Goods (1955) and the Hague Uniform Sales Laws of 1964 achieved a certain legal uniformity for international sales contracts, but both were ratified by only a few Western European States. The UN (Vienna) Sales Convention of 1980 (CISG) has, in turn, developed into one of the greatest successes of uniform law-making in private law.

The currently more than 80 Contracting States are proof of the fact that the CISG has been accepted by the global community of States. Its Contracting States include most major international trading nations and at the same time countries from all regions of the world. In the upcoming years, the Sales Convention’s ratification by further developing States should be actively encouraged.

By contrast, the extent to which the CISG has been accepted in commercial practice is very difficult to assess empirically. Much is to be said for the assumption that its contractual exclusion is significantly less common than sometimes alleged, given that the courts require a clearly expressed intention to exclude and that any exclusion needs to be agreed upon by both parties, which is often not the case. The assessment of the Sales Convention’s practical importance is further complicated by its frequent application by arbitral tribunals, because the resulting arbitral awards usually remain confidential and thus inaccessible.

In the future, the quest for a uniform interpretation of the Sales Convention is likely to be the most important challenge. Article 7(1) CISG provides some guidance by imposing three interpretative goals that in practice have mostly been observed. They have resulted in a generally uniform interpretation, although limited areas of non-uniformity exist. A general challenge arises from sales contracts’ nature as everyday contracts in international trade, resulting in the uniform sales law’s frequent application by non-specialised lawyers. It is therefore necessary to enable and assist a uniform interpretation through appropriate organisational arrangements, with a cross-border cooperation among specialised academics as the most suitable solution, designed to evaluate and assess international CISG case law and make it available to uniform law users in every country.

The Sales Convention has furthermore contributed to legal uniformity through its use as a model for other international Conventions as well as for domestic and regional law reforms. By contrast, a future revision of the Convention’s text seems neither desirable nor realistic, with its further development best being left to courts and legal academia.

Finally, the increasing number of uniform law acts for international sales calls for a better coordination between the various law-making organisations. In particular, regional uniform law (notably EU law) should respect the existing uniform sales law by explicitly granting priority to the CISG.

Stefan Huber, Transnationales Kreditsicherungsrecht (Secured Transactions Law: A Transnational Perspective)

Asset-based financing requires a secured transactions law which permits the efficient and swift enforcement of security interests. The interplay between substantive law, procedural law and insolvency law is highly complex even at the purely national level. If the object covered by a security interest moves regularly across national frontiers, an additional issue arises: the cross-border recognition of the security interest.

This issue became of particular importance in the era of industrialisation. The intercontinental exchange of goods made high-value vessels indispensable. It is thus not surprising that the first instrument of transnational secured transactions law concerned security interests in vessels. An instrument concerning aircraft followed. Both instruments, adopted in the first half of the 20th century, are based on the idea of recognition by way of harmonising the conflict of laws rules: A security interest duly created under the law of the Contracting State where the vessel or the aircraft is registered is to be recognised by the other Contracting States. Substantive law, procedure and insolvency rules were not yet harmonised, except for the priority between security interests and charges and some minor procedural questions. As a result of this lack of harmonisation, legal uncertainty remained.

From the 1970s on, UNIDROIT and UNCITRAL launched projects pursuing a functional approach. The idea was to establish uniform rules in all areas of law where the efficient cross-border enforcement of security interests required transnational harmonisation. The projects have led to international conventions concerning either certain types of transactions, such as financial leasing, or certain types of assets, such as receivables. The biggest success to date has been the Cape Town Convention on International In- terests in Mobile Equipment with its Aircraft Protocol. Both adopted in 2001, they entered into force in 2006. The combination of general rules in an umbrella convention and specific rules for certain categories of objects in additional protocols – there also exist protocols for railway rolling stock and space assets – was an efficient response to the different needs of different business sectors. 64 states and the EU are already party to the Aircraft Protocol and there are even more contracting parties to the Cape Town Convention itself. The economic impact of the instrument has been high. Having established a new international security interest with a uniform set of substantive, procedural and insolvency rules, the instrument considerably reduces the risks for secured creditors. As a result, credit costs are reduced. Savings in the amount of at least $160 billion are expected over a period of 20 years.

In addition to the conventions, a new type of instrument has more recently appeared in the area of secured transactions law: soft law in the form of model rules and a legislative guide. These instruments are designed for all categories of movable assets.

An analysis of the modern instruments shows that they are based on the following core principles: (1) Non-possessory security interests must be registered in order to be effective against other creditors; (2) the security interest is accessory to the secured obligation; (3) party autonomy is guaranteed within the limits set by third-party interests; (4) states are encouraged to adopt the optional uniform rules on self-help remedies and on interim relief; (5) the registered non-possessory security interest is effective in the event of the debtor’s insolvency; and (6) the international character of a transaction is no longer the predominant connecting factor for determining whether the transnational rules apply.

This list makes clear that the content of the transnational instruments has achieved new dimensions which were not imaginable in the early days of the harmonisation of secured transactions law. At the same time, the number of transnational instruments has risen considerably. A future challenge will be coordinating all these instruments in a way that they constitute a real system of transnational secured transactions law.

Andreas Maurer, Einheitsrecht im internationalen Warentransport (Uniform Law in the International Transport of Goods)

The roots of uniform law in the field of transport law can be traced back to antiquity. Today, a number of international conventions form a uniform law for almost all types of common carriers. Those conventions for trains, trucks and inland navigation vessels, however, must be characterized as regional, even if they encompass three continents. Yet, they are not applicable worldwide. The only uniform law with almost worldwide applicability is the regime on air travel. Whereas the uniform laws on transport with the aforementioned common carriers are mostly evaluated positively, uniform laws on international maritime law are rather fragmented and inconsistent. This situation has not been alleviated by the recent introduction of the so-called Rotterdam rules on multimodal transports. Today it is more than questionable whether in the long run a uniform international maritime law can be introduced. Attempts to implement privately-created uniform law have been unsuccessful. Despite the fact that a number of private organizations are involved in the creation of standard contracts and standard clauses in order to unify regulations on international maritime trade, these rules are not (yet) accepted as being law or equal to law.

Alexander Peukert, Vereinheitlichung des Immaterialgüterrechts: Strukturen, Akteure, Zwecke (Unification of Intellectual Property Law: Structures, Actors and Aims)

Intellectual property (IP) law is among the oldest and most comprehen- sive areas of uniform private law. Nearly all countries are members of the World Intellectual Property Organization and as such agree “to promote the protection of intellectual property throughout the world”. The problem, however, is that this legal protection is subject to the equally universally acknowledged territoriality principle. IP rights are limited to the territory of the country granting them and sometimes remain available only for nation- al citizens/local residents. The article provides an overview of the legal measures taken by different actors to address the tension between global communication and fragmented IP protection. It distinguishes between (i) the harmonization of national IP laws, (ii) the creation of supranational procedures, rights, and courts, and (iii) informal cooperations between private stakeholders and patent offices. The guiding question is whether interna- tional IP law is primarily concerned with establishing a global level playing field or whether it pursues a more tangible aim, namely the strengthening of IP protection “throughout the world”. The article concludes with a critical assessment of the narrative that considers international IP law a great success because of its indeed impressive growth.

During the last four years a group of 181 authors from 57 countries has been working very hard to make a special book project come true: the 4-volume Encyclopedia of Private International Law (published by Edward Elgar and edited by Jürgen Basedow, Franco Ferrari, Pedro de Miguel Asensio and me). Containing 247 chapters, 80 national reports and English translations of legal instruments from 80 countries, some parts of the Encyclopedia are now  available via Elgaronline (in beta version).

Access to the actual content (i.e. the entries, the national reports and the translated legal instruments) is limited to paying customers. However, some chapters including the following, are accessible free of charge:

• (American) conflict of laws revolution, by Linda Silberman
• Choice of forum and submission to jurisdiction, by Adrian Briggs
• Choice of law, by Jürgen Basedow
• Globalisation and private international law, by Horatia Muir-Watt

Publication of the Encyclopedia in print is scheduled for Summer 2017.

The European Commission has published a public consultation on the conflict of law rules for third party effects of transactions in securities and claims.

The aim of the consultation is to ‘gather stakeholders’ views on the practical problems and types of risks caused by the current state of harmonisation of the conflict of laws rules on third party effects of transactions in securities and claims and to gather views on possibilities for improving such rules’.

The public consultation will be open till 30 June 2017.

Thanks to Paulien van der Grinten (Ministry of Security and Justice, the Netherlands) for the tip-off.

On 17 March 2017  Horst Eidenmüller and John Armour, both from the University of Oxford, organised a one-day conference at St Hugh’s College, Oxford, on ‘Negotiating Brexit’. One panel focused on the effects of Brexit on the resolution of international disputes, including issues of jurisdiction, choice of law, recognition and enforcement as well as international arbitration. Two of the contributions to the conference have recently been published on the Oxford Business Law Blog:

• Giesela Rühl, The Effect of Brexit on Choice of Law and Jurisdiction in Civil and Commercial Matters, available here;
• Marco Torsello, The Impact of Brexit on International Commercial Arbitration, available here.

A third post by Tom Snelling will deal with the impact of Brexit on recognition and enforcement on foreign judgments.

By Vincent Richard, Research Fellow at the Max Planck Institute Luxembourg for International, European, and Regulatory Procedural Law

In view of the upcoming election, Jean-Jacques Urvoas, the French Minister of Justice released an “open letter” (57 pages) to his successor published by Dalloz. It details what has been done and what should be done in the field of justice in France over the next years.

The letter covers topics such as access to justice, technology in the judiciary and focuses on criminal justice and independence of the judiciary. Conditions of detention and prison policy are the most discussed issues in the current French political campaign in the field of justice.

The readers of this blog will be mostly interested in Chapter IX of the letter which deals with Justice in Europe. In this part, the Minister pleads in favour of enhanced cooperation notably regarding the future European Public Prosecutor’s office. He also advocates for the creation of international chambers within French courts and proposes to establish a European Centre for Judicial Translation (“centre européen de traduction judiciaire”) designed to alleviate the burden of translation (and its cost) on national courts.

We also wanted to underline the following quote which summarises the Minister’s views on judicial cooperation and mutual trust:

“Dans les faits, cette coopération s’est édifiée depuis vingt ans sur le principe de la reconnaissance mutuelle des décisions de justice, qui lui-même suppose la confiance réciproque entre les autorités des États membres. Or cette confiance ne se décrète pas, elle se construit. Et c’est objectivement devenu une gageure à 27 ou à 28. Il faut donc trouver le bon équilibre, ne pas céder à l’illusion de l’harmonisation des procédures judiciaires ou à une uniformisation, séduisante sur le papier, mais irréalisable en pratique. Il s’agit du penchant naturel de la Commission européenne, même si elle déploie de puis quelques années des efforts louables pour moins et mieux légiférer.”

You can find the full text (in French) here: http://www-nog.dalloz-actualite.fr/sites/dalloz-actualite.fr/files/resources/2017/04/gds_ambition_justice-global000.pdf

In Coast and Country Association of Queensland Inc v Smith & Ors [2016] QCA 242, the Queensland Court of Appeal held among others that the Land Court was correct not to include emissions from the burning of coal ex Australia, in the environmental impact assessment part of permitting decisions relating to Queensland coal mines: ‘It is outside the Land Court’s jurisdiction under s 269(4)(j) Mineral Resources Act 1989 (Qld) to consider the impact of activities beyond those carried on under the authority of the proposed mining lease, such as the impact of what the Land Court described as “scope 3 emissions.” These include environmentally harmful global greenhouse gas emissions resulting from the transportation and burning of coal after its removal from the proposed mines.’

As BakerMcKenzie note (a good summary of the issues which I happily refer to),  this does not mean that such impact may not be taken into account at all:  It can be considered when weighing up whether “the public right and interest is prejudiced”, and as to whether “any other good reason has been shown for a refusal”. However the Land Court tends not to have much sympathy for that view: contrary to eg the Dutch approach in the Urgenda case, the Land Court views the coal market as essentially demand driven: if no Australian coal is used, other coal will be – so one might as well make it Australian.

The High Court of Australia, Baker report, have now confirmed (without formally endorsing the approach), that Land Courts decisions wil not be subject to further appeal on these grounds. (So far I have only found the reference to the case on the Court’s ledger).

Not much prospect for well to wheel considerations in Queensland /Australia therefore. Interesting material for a comparative environmental law class.

Geert.

Benjamin Hayward, Conflict of Laws and Arbitral Discretion – The Closest Connection Test, Oxford University Press, 2017, ISBN 9780198787440, pp. 408, GBP 125

Arbitration is the dispute resolution method of choice in international commerce, but it rests on a complex legal foundation. In many international commercial contracts, the parties will choose the law governing any future disputes. However, where the parties do not choose a governing law, the prevailing approach in arbitration is to afford arbitrators broad and largely unfettered discretion to choose the law considered most appropriate or most applicable. The uncertainty resulting from this discretion potentially affects the parties’ rights and obligations, the performance of their contract, the presentation of their cases, and negotiations undertaken to settle their disputes. In this text, Dr Benjamin Hayward critically reviews the prevailing approach to the conflict of laws in international commercial arbitration. The text adopts a focused and detail-oriented analysis – being based on a study of more than 130 sets of arbitral laws and rules from around the world, and drawing heavily on arbitral case law. Nevertheless, it remains both practical and accessible, taking as its focus the needs and expectations of commercial parties, who are the ultimate users of international commercial arbitration. This text identifies the difficulties that result from resolving conflicts of laws through broad and unconstrained arbitral discretions. It establishes that a bright-line test would be a preferable way to resolve arbitral conflicts of laws. Specifically, it recommends a modified Art. 4 Rome Convention rule as the ideal basis for law reform in this area of arbitral procedure.

by Zoltán Fabók LL.M. (Heidelberg), visiting lecturer at ELTE University, PhD Candidate at Nottingham Trent University

The Hungarian Parliament has recently adopted a new act on private international law (see the previous post by Tamás Szabados). The legislator set ambitious goals: the new law extends, somewhat surprisingly, to the PIL aspects – jurisdiction, applicable law and recognition of foreign proceedings – of the international insolvency law.

Indeed, the previous Hungarian PIL framework was unfit to adequately address the relevant questions of the international insolvency law outside the context of the Insolvency Regulation. In cross-border situations, the existing regime did not function properly and this resulted in legal uncertainty, improper protection of the foreign debtor’s assets located in Hungary and the neglect of the principle of collective proceedings.

Admittedly, the new law appears to make some (limited) progress regarding the provisions on jurisdiction of Hungarian courts and the law applicable for insolvency proceedings. However, concerning recognition of foreign insolvency proceedings opened in non-EU states the legislator has opted for a flawed model: the extension of the effects of the foreign lex concursus to Hungary. Extending the legal effects of insolvency proceedings opened in third states to Hungary without any substantive filter (save for the public policy exception) does not appear to be realistic. The counterbalance introduced by the new law – namely that the recognition would be conditional upon reciprocity – does not really help: it will simply make the system inoperative vis-à-vis most foreign states. In effect, in most cases no foreign insolvency proceedings would be recognised in Hungary. This may cause that the foreign debtor’s assets located in Hungary would be exposed to individual enforcement actions meaning the violation of the principle of the collective proceedings.

My paper argues that the enactment of the UNCITRAL Model Law on Cross-Border Insolvency by Hungary would adequately fill the regulatory gap left open by the new PIL Act. Rather than extending the legal effects of foreign insolvency proceedings to Hungary, the Model Law attaches limited sui generis legal consequences to foreign insolvency proceedings. The Model Law would allow Hungary to keep under control the infiltration of the effects of foreign insolvency proceedings from third states in relation to which it has no full confidence while maintaining the idea of collective insolvency proceedings by protecting the assets of the foreign debtor located in Hungary and preventing individual actions. In other words, the Model Law represents a flexible approach looking for a balance between recognising the universal effects of the insolvency as provided for by the lex concursus on the one hand and the rigid territorial principle disregarding the foreign insolvency proceedings on the other.

One could question whether the PIL Act is the proper legal framework for addressing international insolvency law. Arguably, the rules on international insolvency should fall outside the scope of the PIL Act: international insolvency law is a rather complex field of law consisting of elements of conflict of laws, international procedural law and insolvency-specific norms. It would be reasonable to deal with this area of law in the Insolvency Act or in a separate piece of legislation.

The paper has been accepted by UNCITRAL for publication in the compilation to be issued after the 50th Anniversary Congress. An earlier preprint version, reflecting to the preliminary drafts of the new PIL Act, can be downloaded from http://ssrn.com/abstract=2919047.

The French Cour de Cassation promotes in 2017 a series of seven conferences on the application of foreign law, in partnership with the Société de législation comparée.

Two of them have already taken place on 20 February (“The judge’s role in establishing the content of foreign law”, by Jean-Pierre Ancel, former President of the First Civil Chamber of the Cour de cassation) and 20 March (“The application of uniform law and international conventions”, by Jean-Baptiste Racine, University of Nice).

The five remaining conferences will be held at the Grand Chambre of the Court (5 Quai de l’Horloge, Paris) between 6 pm and 8 pm on the following dates:

• April 20, 2017: International cooperation in researching the content of foreign law (Florence Hermite)

• May 29, 2017: Optional application of foreign law in situations of availability of law and the uniform application of rules of conflict of European origin (speaker: Sabine Corneloup, University of Paris II)

• September 25, 2017: Foreign law facing the hierarchy of norms (speaker: Gustavo Cerqueira, University of Reims)

• October 23, 2017: The Cour de cassation’s control in applying foreign law (speaker: Alice Meier-Bourdeau, lawyer)

• November 27, 2017: The exception of equivalence between the French law and the foreign law (speaker: Sara Godechot-Patris, University of Paris-East)

All conferences are held in French.

For more information: see Cour de Cassation.

Click here to see the whole program.

I reported on AMT V Marzillier at the High Court, failed to flag its overturn in the Court of Appeal (it’s the Easter period: I am in a confessionary mood), and now report swiftly on the Supreme Court confirming the Court of Appeal’s view early April ([2017] UKSC 13).

MMGR is a company incorporated under the laws of Germany and carries on business as a firm of lawyers in Germany. AMTF alleges that MMGR induced its former clients to issue proceedings against it in Germany and to advance causes of action under German law.  AMTF’s clients were referred to it by ‘introducing brokers’; AMTF in turn is referred to as a non-advisory, “execution only”, derivatives broker. AMTF charged its clients commission for its service and paid commission to the introducing brokers. About 70 former clients, who were dissatisfied with the financial results of their transactions, commenced legal proceedings in Germany against both the introducing brokers and AMTF seeking damages under the German law of delict. The claim against the introducing brokers was that they had given bad investment advice or had failed to warn of the risks of the investments. The claim against AMTF was based on a liability which was accessory to that of the brokers: it was alleged that AMTF had encouraged the brokers to behave as they did by paying them commission from the transaction accounts which it operated for its clients and that it owed and had breached a duty in delict (tort) to the clients to prevent any transactions being undertaken contrary to their interests. AMTF challenged the jurisdiction of the German court. Many of the former clients have recovered damages from AMTF by way of settlement.

AMTF argues that the actions in Germany were in breach of the exclusive jurisdiction and applicable law clauses in their contracts with AMTF. It commenced proceedings in the High Court in London against MMGR, based on the tort, in English law, of inducing breach of contract. It seeks both damages and injunctive relief to restrain MMGR from inducing clients to bring further claims in Germany asserting causes of action under German law. AMTF argues that the English courts have jurisdiction over its claim under article 5.3 of the Brussels I Regulation (Article 7(2) in the Brussels I Recast), which gives jurisdiction in tort claims to the courts for the place in which the harmful event occurred or may occur. MMGR challenges the jurisdiction of the English courts to entertain this action.

Popplewell J in the High Court sided with AMTF – I reviewed his judgment in 2014. He decided that the relevant harm which gives rise to jurisdiction under article 5.3 occurred in England as AMTF had in each case been deprived of the benefit of the exclusive jurisdiction clause, which, he held, created a positive obligation on a former client to bring proceedings in England.

Clarke LJ concluded upon Appeal that the English courts did not have jurisdiction as the relevant harm had occurred in Germany. At 57 he wrote ‘I do not reach this conclusion with any great enthusiasm since there is much to be said for the determination of what is in essence an ancillary claim in tort for inducement of breach of contract to be made in the court which the contract breaker agreed should have exclusive jurisdiction in respect of that contract, rather than in the courts of the country where the inducement and breach occurred. But the governing law of the relationship between the former clients and AMTF (which did not have to be that of England & Wales) is not a determining factor in the allocation of jurisdiction under the Regulation.‘ It is not entirely clear what the German courts’ view is on the matter – the unsettled claims were still pending at the time of the Supreme Court’s judgment.

Lord Hodge, after noting the CA’s reluctance, agrees with its conclusion and does so by once again, concisely yet completely, reviewing the CJEU’s case-law on Article 5(3) [7(2)]. For an even more condensed version, see Jake Hardy. At 24: ‘The task for the court is to identify where the relevant harm occurred. That is relatively straightforward in most circumstances, where there is no need for any special rule such as those which the CJEU has developed when it has not been possible readily to identify one place where that harm occurred. It is straightforward in this case.‘ : namely Germany. ‘It is clear that AMTF did not get the benefit of having any dispute with the former clients determined under English law by English courts. But the former clients were under no positive obligation to sue AMTF, which could have no objection if it was not sued.’ (at 25).

Of note is Lord Hoge’s important emphasis (at 29) that the benefits of connecting factors, which justify the ground of jurisdiction, are not in and of themselves connecting factors. Idem for his instruction at 30 that ‘the inconvenience, which the separation of the resolution of the contractual claims against the former clients from the pursuit of the claims against MMGR entails, (does not) carry much weight when one considers the aims of the Judgments Regulation‘: ‘the CJEU has recognised that the scheme of the Judgments Regulation creates the difficulty that one jurisdiction may not be able to deal with all the related points in a dispute (at 32).

Finally reference to the CJEU was refused on the grounds that the issue is acte claire (at 43, with preceding reference to CJEU precedent).

Delightful.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, 2.2.11.2.7).

The 59th edition of the Séminaire de Droit Comparé et Européen d’Urbino (Italy) will be held next summer from August 22nd to September 1st.  

The Séminaire is a common venture of Italian and French jurists taking place since 1959. The venue is ideal for developing a dialogue on Comparative,  International (both public and private) and European law with jurists from different world countries, since it largely benefits of the relaxing time of the year and of the serenity of the environment: Urbino gave birth to humanism and to the Vitruvian man.

This year’s seminar’s main topics are robotics and AI international legal problems, State immunity, the future of family law, arbitration and many others. Speaker include Prof. M.E. Ancel, S. Yansky-Ravid, A. Giussani, C. Malberti, P. Morozzo della Rocca, A. Bondi, L. Mari, I. Pretelli as well as practitioners -lawyers, mediators, arbitrators and notaries. The Seminar promotes multilingual competencies: presentations are in French, English or Italian, often followed by summarized translations in the other two languages.

The whole program as well as email addresses for further information is downloadable  here.

Thank you, Ludo Veuchelen, for alerting me to Adam Liptak’s reporting on Jesner v Arab Bank, in which certiorari was granted by the United States Supreme Court early April. The case may finally have us hear SCOTUS’ view on the question which led to certiorari in Kiobel but was subsequently ignored by the Court: whether corporations can be culpable for violation of public international law. ‘May’ is probably the keyword in the previous sentence.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.

Belgium’s Lernout & Hauspie case recently entered a further stage in its civil law chapter. The case is part of Belgium’s (and especially Flanders’) collective memory as an illustration of what can go wrong when markets and investors alike are fooled by corporate greed. Is it world-famous, in Belgium: for those outside, Wiki should help.

Of interest to this blog is the recent judgment of the Gent criminal court on the civil chapter of the case: see my colleague proximus Stefaan Voet’s analysis here. Stefaan has helpfully translated the most relevant sections of the judgment, in particular the court’s rejection of the argument that the US opt-out class action settlement were contrary to Belgium’s ordre public. The court, in my view entirely justifiably, holds that Belgium’s Private international law act does not oppose recognition and enforcement. Of note is the extensive comparative reference which the court makes not just to existing Belgian law on class actions (the Belgian legal order can hardly oppose what it tentatively has introduced itself), but also to a European Recommendation on comparative class action law in the EU (a sort of Ius Commune idea).

Recognition and enforcement rarely makes it to substantive review in Belgian case-law. This judgment is one of note.

Geert.

By Tamás Szabados, LL.M. (UCL), PhD (ELTE), Senior Lecturer at the Eötvös Loránd University (Hungary)

On 11 April 2017, the new Hungarian Private International Law Act (Act XXVIII of 2017), adopted earlier by the Hungarian Parliament, was promulgated. The new Act will enter into force on 1 January 2018 and will fully replace the decree-law of 1979 that currently regulates private international law. The adoption of the new Act was justified by the economic and social changes that occurred since then. The drafting process was based on extensive comparative research and the drafters also paid attention to recent developments in EU private international law.

The new Private International Law Act covers the determination of the applicable law, jurisdiction, recognition and enforcement of foreign decisions as well as other aspects of international civil procedure. The new Private International Law Act introduces some changes in comparison to the rules currently in force.

The General Part deals with certain questions not regulated previously: application of the law of states having more than one legal system, overriding mandatory provisions and changes in the circumstances which determine the governing law. As a novelty, the General Part also contains a general escape clause: if, based on the circumstances of the case, it is obvious that the case is substantially more strongly connected with a law other than the law designated by virtue of the Act, the court may exceptionally apply this law. In addition, a general subsidiary choice of law rule provides that, if the new Act does not contain a specific choice of law rule for a legal relationship that is otherwise covered by the Act, the law of the state will apply with which that relationship is most strongly connected.

The Special Part of the Act extends equally to certain issues which were not regulated earlier, such as the (restricted) freedom to choose the applicable law in property matters for spouses and (registered) partners or the determination of the law applicable to illegally exported cultural property.

Jurisdictional rules as well as the provisions on recognition and enforcement of decisions have been restructured and divided into general and special provisions (such as the rules on matters involving an economic interest and matters concerning family law and personal status).

The text of the New Hungarian Private International Law Act is available (in Hungarian language) here.

The Netherlands journal of private international law, Nederlands Internationaal Privaatrecht (NIPR), vol. 35-1, has just been released: click here to see the full ToC.

Access is possible to the first contribution, written in English by Prof. Dr. Matthias Weller, entitled Mutual trust within judicial cooperation in civil matters: a normative cornerstone – a factual chimera – a constitutional challenge. The abstract reads as follows:

Mutual trust has become a normative cornerstone of the EU’s area of freedom, security and justice, as is being confirmed and reinforced by recent and fundamental decisions of the ECJ. At the same time, some Member States are more than ever occupying low rankings in different surveys on the quality of their administration of justice or are being challenged as not sufficiently implementing the rule of law. Th us, a conflict appears to be currently culminating between norm and fact. Th is conflict puts in question the fundaments of judicial cooperation and contributes to centrifugal tendencies within the European Union. In order to counteract such tendencies, the text offers some deeper, including some historical, thoughts on mutual trust, as well as its facets and functions in judicial cooperation amongst the Member States in civil matters (Brussels Ia Regulation), in particular in relation to the return of abducted children (Brussels IIa Regulation), in administrative matters dealing with asylum seekers (Dublin Regulations) and criminal matters (Framework Decision on the European Arrest Warrant), i.e. in cases where there is a transfer of persons from one Member State to another. In this context mutual trust has become an element of the very identity of the European Union whereas from the perspective of (at least German) constitutional and European human rights law mutual trust has become a true challenge. On the basis of these considerations on the general framework of mutual trust, the question is posed whether there should be some rebalancing of mutual trust in the cooperation in civil matters.

It is too readily assumed by many that general Member States’ obligations under the EU’s environmental laws are context only, and not really legally binding. In my Handbook of EU Waste law however I report on a number of cases where the European Court of Justice has rebuked Member States for having failed to take measures to attain some of these general objectives. These cases relate to waste law, evidently, however in other cases the Court’s case-law extends this to EU environmental law generally.

One can now add C-153/16 EC v Slovenia to this list. Slovenia had attempted to address the continuation of waste tyres storage and processing at an abandoned quarry, in contravention of an expired environmental permit. The company dug in its heels, ia via prolonged litigation, with storage and processing continuing.

The Court of Justice found that Slovenia had infringed the general duty of care provisions, as well as enforcement obligations of the landfill Directive and the waste framework Directive. (On the related issues with respect to hazardous waste, the Court found the Commission’s infringement proceedings wanting).

Not all that glitters is gold, of course. The direct effect of these general duty of care provisions remains an issue, as does the absence, arguably, in EU law of a duty of care directly imposed upon waste holders and processors. For that, citisens need to pass via national law wich as current case shows, is not always up to scratch.

Geert.

By Stefaan Voet, Leuven University

The Belgian Lernout & Hauspie (L&H) case was one of the largest corporate scandals in European history (for an empirical case study analysis see S. Voet, ‘The L&H Case: Belgium’s Internet Bubble Story’ in D. Hensler, C. Hodges & I. Tzankova (eds.), Class Actions in Context: How Economics, Politics and Culture Shape Collective Litigation, Edward Elgar (2016)).

It was a criminal case that was brought before the Criminal Court of Appeal in Ghent. Contrary to common law jurisdictions, the victim of a Belgian criminal case is not absent from the criminal trial. He or she is a formal party to the proceedings and has standing to plead.  Regarding his or her civil claim, the victim can piggyback on the evidence brought forward by the Public Prosecutor in order to prove a civil fault.  The victim only has to prove causation and his or her damages. Based on this technique, more than 15,000 duped shareholders filed their civil claim during the L&H criminal trial.

On 20 September 2010, the Court ruled on the criminal aspect of the case. L&H’s founding fathers and most previous directors were convicted. The deep-pocket defendants Dexia Bank and KPMG, respectively L&H’s bank and statutory auditor, were acquitted.

On 23 March 2017, seven years after its criminal decision, the Court ruled its first decision on the civil claims. The decision is available in Dutch at https://www.rechtbanken-tribunaux.be/sites/default/files/public/content/lh_-_geanonimiseerd.pdf.

Because L&H also had a second headquarters in the US, some (opt-out) class action procedures, on behalf of all persons and entities who had bought L&H shares on Nasdaq, were brought there against Dexia and KPMG (In re Lernout & Hauspie Sec. Litig., 138 F. Supp. 2d 39 (D. Mass. 2001); In re Lernout & Hauspie Sec. Litig., 208 F. Supp. 2d 74 (D. Mass. 2002) and Warlop v. Lernout, 473 F. Supp. 2d 260 (D. Mass. 2007)). Ultimately, these cases were settled. In the KPMG settlement 115 million dollars were paid, while in the Dexia settlement the shareholders received 60 million dollars.

One of the issues the Belgian Court had to deal with was the impact of these US class action settlements in the Belgian procedure. More particularly, the question arose if the civil claimants in the Belgian procedure who were part of the US class action settlements and who had not opted out, still can claim damages in the Belgian procedure. In other words, does the Belgian Court has to recognize the US class action settlements?

Because the court decisions approving the class action settlements are rendered by a US court, the European rules (i.e. Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters) do not apply. Belgian international private law is applicable, and more particularly the Belgian Code of Private International Law (CPIL) (an English translation is available at http://www.ipr.be/data/B.WbIPR%5BEN%5D.pdf).

The Court first decides that the US decisions approving the class action settlements are foreign judgements that can be recognized and enforced in Belgium (Art 22, §1 CPIL). The Court rebuts the argument of one of the parties that the class actions settlements are nothing more than contractual agreements to which he is not a party (§ 66).

The central issue before the Court is whether the US court decision approving the class action settlements can be recognized in Belgium and whether the class members who did not opt out are bound by these settlements in the Belgian procedure (§ 67). If not, they can bring their civil claim. If so, they cannot bring their civil claim (at least to the amount they received in the US class action settlements).

The Court cannot assess the question whether the US District Court (approving the class action settlements) correctly applied Rule 23(a) and Rule 23(b)(3) FRCP (Federal Rules of Civil Procedure). Art 25, §2 CPIL clearly states that under no circumstances the foreign judgment will be reviewed on the merits (§§ 68-69).

Art 22, §1, 4th para CPIL states that the foreign judgment may only be recognized or declared enforceable if it does not violate the conditions of Art 25 CPIL. The latter states (in §1, 1° and 2°): “A foreign judgment shall not be recognized or declared enforceable if 1° the result of the recognition or enforceability would be manifestly incompatible with public policy; upon determining the incompatibility with the public policy special consideration is given to the extent in which the situation is connected to the Belgian legal order and the seriousness of the consequences, which will be caused thereby and 2° the rights of the defense were violated.” These are the two basic questions before the Court (§ 72).

The main criterion is the international public order. According to Belgium’s Supreme Court (i.e. Court of Cassation) a law is of international public order if the legislator wanted to lay down a principle that is vital for Belgium’s established moral, public or economic order. Any foreign rule or decision violating this international public order should be set aside (Court of Cassation 18 June 2007, C.04.030.F, www.cass.be). The criterion is subject to a marginal appreciation by the court (§§ 74-75).

The Court concludes that the US decision approving the class actions settlement does not violate Belgium’s international public order. Consequently, the Court has to recognize the US decision. The Court invokes multiple reasons.

First of all, reference is made to the existence in Belgium, since September 2014, of an opt-out class action procedure (as laid down in Title II of Book XVII of the Code of Economic Law (CEL)) (see about this Belgian class action procedure S. Voet, ‘Consumer Collective Redress in Belgium: Class Actions to the Rescue?’, European Business Organization Law Review 2015, 121-143). Moreover, the legislature emphasized that the opt-out system is compatible with Art 6 ECHM (§§ 79-80).

Secondly, the Court compares the procedural rights of class members according to US federal class action law and to Belgian class action law. The US class action settlements were subject to a fairness hearing (see Rule 23(e)(2) FRCP). A similar provision exists in Belgium (Art XVII.38 CEL). The class action settlements were notified to US and foreign L&H shareholders (see Rule 23(e)(1) FRCP). A special website was also created. Similar provisions exist in Belgium (Art XVII.43, §3 CEL). In the US, the Court assessed whether the class actions settlements were fair, reasonable, and adequate (see Rule 23(e)(2) FRCP). Similar provisions exist in Belgium (Art XVII.49, §2 FRCP). Based on this analysis, the Court concludes that the procedural rights of the class members in the US class actions settlements were protected in a similar way as they would have been protected under Belgian law. The Court adds that the procedural protection under Rule 23 FRCP is even stronger than under Belgian law (§§ 82-83).

Next, the Court examines whether the fact that non-US class members are bound by the US opt-out class action settlements violates Belgium’s international public order. Although there are arguments to be made that only under an opt-in regime foreign class members can be bound by a class action decision or settlement, the Court reiterates that nevertheless opt-out class actions are possible in Europe (see Art 21 Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms and the existing opt-out regimes in Portugal, Bulgaria, Denmark and the Netherlands (under the Dutch Collective Settlements Act)). It concludes that the desirability of an opt-in system for foreign class members does not automatically leads to the conclusion that an opt-out regime contradicts Belgium’s international public order (§§ 84-88).

Finally, the Court notes that an opt-out class action, leading to a settlement that could be binding for foreign class members, could entail a violation of the rights of defense if not everything was done to guarantee that the foreign class members were notified of the class action procedure and the opt-out possibility. The Court concludes that this was the case. It for example refers to the following facts: 82.8169 individual notice packages were sent; notification was provided in the Wall Street Journal, the Wall Street Journal Europe and a Belgian journal; a specific website (www.lernouthauspiesettlement.com) was launched; the Belgian press reported about the US class action settlements; one of the Belgian associations representing L&H shareholders informed its clients about the US class action settlements and instructed them what to do if they wanted to opt out or receive money; the US District Court decided that Rule 23(e)(1) FRCP was met and that 288 mainly Belgian shareholders had opted out correctly while 325 other opt-out requests were dismissed; etc. KPMG, one of the parties to the class action settlements, submitted an expert report to the Belgian Court stating that everything possible was done to notify all class members. In conclusion, the Court finds that there was sufficient notice and that the rights of defense of the non-US class members were not violated (§§ 89-93).

The general conclusion of the Court is that all claims brought by the civil parties who were part of the US class action settlements and who did not opt out are only admissible insofar as they claim damages above the amount they received from the US class action settlements.

The Düsseldorf Airport and Professor Stephan Hobe from the Institute of Air and Space Law at the University of Cologne, in cooperation with the international law firm Herbert Smith Freehills, have established a new series of events, which will deal with current topics of the aviation industry, involving internationally renowned experts before a selected audience.
The theme of the kick-off event could not be more up-to-date. Less than a week ago, British Ambassador Tim Barrow handed over to EU Council President Donald Tusk the first petition to trigger the application of Art. 50 TEU in the history of the European Union. The next two years will involve an unprecedented negotiating marathon in which the departure of Great Britain from the EU will be shaped.
Few areas are now as Europeanized as air transport. Air transport agreements need to be re-negotiated, the Single European Sky has to be restructured, airline ownership has to be checked – the impact of the Brexit on the aviation sector is unpredictable. The conference’s aim is to start with a first inventory. To this end, the organizers have invited distinguished experts from politics, academia, aviation associations, lawyers and international airports.
For further details and registration, please click here.

The Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law offers a limited number of PhD scholarships for foreign scholars to support their research stay at the Institute for up to twelve months.

Eligibility
Scholarships are offered to PhD students who plan to undertake research at the Institute within the Institute’s areas of research, i.e. international dispute resolution and comparative procedural law.

Application
A complete application file must include the following documents (in English):
.- cover letter (max. 1 page), indicating the motivation and also the link of your research with the research of the Institute;
.- curriculum vitae (indicating grades of the university degrees);
.- summary of the PhD project (max. 2 pages), including subject, description and working plan;
.- two (2) letters of recommendation (including one from the PhD supervisor, with his/her contact details).

Grant and benefits
The scholarship is paid in monthly installments of 1500 €.
Selected scholars will be offered a working place in the library reading room of the Institute and will have the opportunity to participate in the regular scientific events and other activities of the Institute.

Deadline for applications
30 April 2017

Application details
Please follow this link and apply online.

Contact
Viktoria Drumm: scholarship@mpi.lu

Don’t it always seem to go, you don’t know what you’ve got till it’s gone. Recognition and enforcement intra-EU is now so smooth in civil and commercial matters, the European Commission wanted to abolish potential for refusal altogether in the Brussels I Recast (regular readers are aware I reported on it at the time of negotiation).

Thank you Clyde & Co for alerting me to the case: In [2017] EWHC 519 (Comm) Midtown Acquisitions v Essar Global parties settled their dispute in an agreement, under which the defendant accepted liability and “confessed to judgment”. The New York courts then entered a Judgment by Confession (similar to an English consent judgment). Recognition and enforcement was sought in England.

In the Brussels system, discussion is still possible on the very notion of ‘judgment’ as I have recently reported (see my postings on Pula Parking and Zulfikarpašić). Refusal of recognition is possible on very narrow grounds. Famously, under the Brussels regime, recognition does not require res judicata of the foreign (intra-EU) judgment. (A misleadingly simple statement made in all Reports. But I’ll leave the detail for another time (see eg Gothaer for earlier analysis).

Outside the Brussels regime however (lest the Brexit negotiations yield a continuing bridge between civil procedure in the UK and EU this will also apply to judgment issued by UK courts), discussion on these two points re-emerges: when can a ruling be considered a ‘judgment’, and does it have res judicata? Defendant in Midtown argues that the New York judgment was not a “judgment” as that expression is used in English law because (i) there was no lis between the parties in New York, (ii) the New York judgment was not final and conclusive and (iii) the New York judgment was not on the merits.

Teare J rejected all three arguments on the basis of relevant precedent. The judgment merits reading for it is a good reminder of the extent of argument ensuing when one is not covered by the umbrella of EU or international harmonisation of recognition and enforcement.  Complications which are not likely to assist the London legal market in maintaining its attraction post Brexit.

Geert.

(Handbook of) European Private International Law, Chapter 2, Heading 2.2.16.