Conflictoflaws

The latest issue of the „Praxis des Internationalen Privat- und Verfahrensrechts (IPRax)“ features the following articles:

B. Heiderhoff: International Product Liability 4.0

While the discussion on how liability for damages caused by autonomous systems, or “artificial intelligence”, should be integrated into the substantive law is well advanced, the private international law aspect has, so far, been neglected. In this contribution, it is shown that unilateral approaches – such as the EU Parliament has suggested (P9_TA-PROV(2020)0276) – are unnecessary and detrimental. It is preferable to develop a classical conflict of laws rule with connecting factors, which mirror the assessments of the substantive law. It is shown that a mere reinterpretation of the existing Article 5 Rome II Regulation might lead to legal insecurity, and that an addition of the provision is preferable. In particular, the notion of marketing, and its importance as a connecting factor, should be revised.

 

K. Vollmöller: The determination of the law applicable on claims for infringement of trade secrets in contractual relationships

Subject of the article is the determination of the applicable law in cross-border situations when a lawsuit is based on the violation of trade secrets within a contractual relationship. According to German Law, claims for infringement of trade secrets are regulated in the German Trade Secrets Act (Geschäftsgeheimnisgesetz – GeschGehG) that has implemented the European Directive 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The focus is on the question how tort claims are connected if the contracting partners have agreed on confidentiality terms, in particular under a non-disclosure agreement. In case the agreement of the parties is ruled by the laws of a Non-European state, it is doubtful whether the harmonized European trade secret law is applicable. The author comes to the conclusion that a secondary connection to the jurisdiction governing the agreement according to Art. 4 Paragraph 3 Rome II Regulation should be limited to relationships where the parties have assumed further contractual obligations beyond confidentiality. In this case, the law applicable on the contract overrides the harmonized European trade secret law regulations which cannot be considered as mandatory rules either.

 

T. Lutzi: Ruth Bader Ginsburg – Internationalist by Conviction

In Ruth Bader Ginsburg, the Supreme Court has not only lost an icon of gender equality and towering figure, but also a great internationalist. Ginsburg’s jurisprudence was characterised by her own academic background as a proceduralist and comparativist, a decidedly international perspective, and a firm belief in a respectful and cooperative coexistence of legal systems. An English version of this text can be found at www.iprax.de/de/dokumente/online-veroeffentlichungen/

 

C. Kohler: Dismantling the „mosaic principle“: defining jurisdiction for violations of personality rights through the internet

In case C-194/16, Bolagsupplysningen, the ECJ ruled that, according to Article 7(2) of Regulation (EU) No 1215/2012, a legal person claiming that its personality rights have been infringed by the publication of incorrect information on the internet and by a failure to remove comments relating to it can bring an action for rectification of that information, removal of those comments and compensation in respect of all the damage sustained before the courts of the Member State in which its centre of interests is located. On the other hand, an action for rectification of that information and removal of those comments cannot be brought before the courts of each Member State in which the information published on the internet is or was accessible. Thus, the ECJ’s decision in case C-509/09 and C-161/10, eDate Advertising a.o., also applies where the aggrieved party is a legal person. However, the “mosaic principle” defined in that judgment is inapplicable because an action for rectification and removal of information on the internet is “single and indivisible” and can, consequently, only be brought before a court with jurisdiction to rule on the entire damage. The author welcomes this limitation and advocates that the mosaic principle be given up entirely, particularly as it does not find resonance on the international level.

 

P. Mankowski: Consumer protection under the Brussels Ibis Regulation and company agreements

Company agreements pose a challenge to Arts. 17–19 Brussels Ibis Regulation; Arts. 15–17 Lugano Convention 2007 since these rules are designed for bipolar contracts whereas the formers typically are multi-party contracts. This generates major problems, amongst them identifying the “other party” or answering how far a quest for equal treatment of shareholders might possibly carry. Arguments from the lack of a full-fledged forum societatis might weigh in, as do arguments from the realm of European private law or possible consequences for jurisdiction clauses in company statutes. The picture is threefold as to scenarios: founding and establishing a company; accession to an already established company; and derivative acquisition of a share in an already established company.

 

W. Wurmnest/C. Grandel: Enforcement of consumer protection rules by public authorities as a „civil and commercial matter“

In case C-73/19 (Belgische Staat ./. Movic) the European Court of Justice once again dealt with the delineation of “civil and commercial matters” (Art. 1(1) of the Brussels Ibis Regulation) when public authorities are involved. The Court correctly classified an action brought by Belgian authorities against Dutch companies seeking a declaration as to the unlawfulness of the defendants’ business practices (selling tickets for events at prices above their original price) and an injunction of these practices as a “civil and commercial matter”, as the position of the authorities was comparable to that of a consumer protection association. Furthermore, the Court clarified its case law on the thorny issue as to what extent evidence obtained by public authorities based on their powers may turn the litigation into a public law dispute. Finally, the judgment dealt with the classification of various ancillary measures requested by the Belgian authorities. Most notably, a request by the authorities to be granted the power to determine future violations of the law simply by means of a report “under oath” issued by an official of the authorities was not a “civil- and commercial matter” as private litigants could not be granted similar powers under Belgian law.

 

R. Wagner: Jurisdiction in a dispute with defendants in different member states of the European Union

The article discusses a court ruling of the Higher Regional Court of Hamm on jurisdiction concerning the “Diesel emission scandal”. The plaintiff had his domicile in Bielefeld (Germany). He bought a car in Cologne (Germany) where the seller had his domicile. Later on, the plaintiff brought an action for damages and for a declaratory judgment against the seller, the importer of the car (domicile: Darmstadt, Germany) and the producer of the car (domicile: in the Czech Republic) before the District Court of Bielefeld. The plaintiff argued that the producer of the car had used illegal software to manipulate the results of the emissions tests. He based his claim on tort. Against the first defendant he also claimed his warranty rights. In order to sue all three defendants in one trial the plaintiff requested the District Court of Bielefeld to ask the Higher Regional Court of Hamm to determine jurisdiction. In its decision the Court in Hamm took into account Article 8 No. 1 of the Brussels Ibis Regulation and § 36 I No. 3, II of the German Code of Civil Procedure.

 

J. Wolber: Jurisdiction for an Application opposing Enforcement in cross-border Enforcement of a Maintenance Decision

The question, whether the maintenance debtor should be entitled to raise the objection that he has predominantly discharged his debt in the Member State of enforcement is highly relevant in practice and disputed in the scientific literature. The European Court of Justice (ECJ) has decided on this question – upon a request for a preliminary ruling by a German court – in the case FX ./. GZ with judgment of 4th June 2020. The ECJ confirms the jurisdiction of the German court based on Article 41 of Regulation No 4/2009. This judgment has effects beyond the enforcement of maintenance decisions on other instruments of European Law of Civil Procedure. While this judgment deserves approval in the result, the reasoning of the court is not convincing. The ECJ judgment does not cover the question of the territorial scope of such a judgment.

 

P. Schlosser: Clarification of the service of documents abroad

In extending the term “demnächst” (“soon”) the judgment of the Bundesgerichtshof ruled that a person interested in serving a document to somebody (in particular the initial claim) must only request the court to care for the translation and pay immediately thereafter the estimated costs of the translation for correctly initiating the litigation and thus meeting the term of limitation. The rest of time needed for the translation is irrelevant. The author is developing the impact of this decision for the three variants of serving a document to someone abroad in the European Union:

(1) Serving the document spontaneously in time together with the translation,

(2) Serving the document belated together with the translation after

the court has asked whether the respective person wants a translation,

(3) Serving initially without a translation but serving the document again together with a translation after the addressee has refused to accept service without any translation.

 

A. Dutta: European Certificate of Succession for administrators of insolvent estates?

German law provides for a special insolvency procedure for insolvent estates (Nachlassinsolvenzverfahren) which is subject to the European Insolvency Regulation. The Oberlandesgericht Frankfurt am Main came to the conclusion that nevertheless the liquidator of such an insolvency procedure can apply for a European Certificate of Succession under the Succession Regulation being an “administrator of the estate”. The case note argues that the German Nachlassinsolvenzverfahren falls within the scope of the Insolvency and the Succession Regulation (section II & III) and that issuing a Certificate causes only indirect frictions between both instruments which are not grave enough to invoke the conflict rule in Article 76 of the Succession Regulation (section IV). The case shows that the model of the Certificate could be extended to other areas (section V).

 

E. Jayme: The restitution of the „Welfenschatz“ before the U.S. Supreme Court

The US Supreme Court, in a case involving the restitution of the treasure of the Guelphs and the question of state immunity of the Federal Republic of Germany, decides that the FSIA’s exception concerning property taken in violation of the international law of expropriation does not refer to property owned by German nationals (“domestic takings rule”). The heirs of German Jewish Art dealers who had acquired a large part of the art treasure of the Guelphs from the Ducal family of Braunschweig asked for the restitution of such parts of the treasure which they had sold to Prussia in 1935 alleging that they had been unlawfully coerced to sell the pieces for a third of its value. The defendants were the Federal Republic of Germany and the Stiftung Preußischer Kulturbesitz. The plaintiffs argued inter alia that the forced purchase of the treasure had been an act of genocide in violation of international law and, therefore, justified an exception to State immunity. The District Court denied Germany’s motion to dismiss, and the D.C. Circuit Court affirmed. The Supreme Court held that the phrase “rights in property taken in violation of international law” refers to violations of the international law of expropriation and thereby incorporates the domestic takings rule. The case was remanded to the D.C. Circuit Court of Appeals for further proceedings which inter alia will concern the question whether the Jewish art dealers were German nationals at the time of the sale of the treasure (1935).

 

On Tuesday, July 6, 2021 at 11:00-12:30 CEST, the Hamburg Max Planck Institute will host its thirteenth monthly virtual workshop in the series  Current Research  in private international law. Yuko Nishitani (Kyoto University) will speak, in English, on the topic Global Governance and Corporate Social Responsibility The presentation will be followed by open discussion. All are welcome. More information and sign-up here. If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de

On August 19, 2021, the U.S. Court of Appeals for the Eleventh Circuit issued its latest decision on foreign forum selection clauses and cruise ship contracts.  The case was Turner v. Costa Crociere S.P.A.  The plaintiff was an American cruise ship passenger, Paul Turner, who brought a class action in federal district court in Florida alleging that the cruise line’s “negligence contributed to an outbreak of COVID-19 aboard the Costa Luminosa during his transatlantic voyage beginning on March 5, 2020.”

The cruise line moved to dismiss the case on the basis of a forum selection clause in the ticket mandating that all disputes be resolved by a court in Genoa, Italy. The contract also contained a choice-of-law clause selecting Italian law. By way of background, it is important to note that (1) the parent company for the cruise line was headquartered in Italy, (2) its operating subsidiary was headquartered in Florida, (3) the cruise was to begin in Fort Lauderdale, Florida, and (4) the cruise was to terminate in the Canary Islands.

The Eleventh Circuit never reached the merits of the plaintiffs’ claims.  Instead, it sided with the cruise line, enforced the Italian forum selection clause, and dismissed the cases on the basis of forum non conveniens.  A critique of the Eleventh Circuit’s reasoning in Turner is set forth below.

Years ago, the U.S. Congress enacted a law imposing limits on the ability of cruise lines to dictate terms to their passengers.  46 U.S.C. § 30509 provides in relevant part:

The owner . . . of a vessel transporting passengers . . . between a port in the United States and a port in a foreign country, may not include in a . . . contract a provision limiting . . . the liability of the owner . . . for personal injury or death caused by the negligence or fault of the owner or the owner’s employees or agents . . . . A provision described in paragraph (1) is void.

Boiled down to its essence, the statute provides that any provision in a cruise ship contract that caps the damages in a personal injury case is void.  If the cruise ship were to write an express provision into its passenger contracts capping the damages recoverable by plaintiffs such as Paul Turner at $500,000, that provision would be void as contrary to U.S. public policy.

The cruise lines are sharp enough, however, to know not to write express limitations directly into their contracts.  Instead, they have sought to achieve the same end via a choice-of-law clause.  The contract in Turner had a choice-of-law clause selecting Italian law.  Italy is a party to an international treaty known as the Athens Convention.  The Athens Convention, which is part of Italian law, caps the liability of cruise lines at roughly $568,000 in personal injury cases.  If a U.S. court were to give effect to the Italian choice-of-law clause and apply Italian law on these facts, therefore, it would be required to apply the liability cap set forth in the Athens Convention.  It seems highly unlikely that any U.S. court would enforce an Italian choice-of-law clause on these facts given the language in Section 30509.

Enter the forum selection clause.  If the forum selection clause is enforced, then the case must be brought before an Italian court.  An Italian court is likely to enforce an Italian choice-of-law clause and apply the Athens Convention.  If the Athens Convention is applied, the plaintiff’s damages will be capped at roughly $568,000.  To enforce the Italian forum selection clause, therefore, is to take the first step down a path that will ultimately result in the imposition of liability caps in contravention of Section 30509.  The question at hand, therefore, is whether the Eleventh Circuit was correct to enforce the forum selection clause knowing that this would be the result.

While the court clearly believed that it reached the right outcome, its analysis leaves much to be desired.  In support of its decision, the court offered the following reasoning:

[B]oth we and the Supreme Court have directly rejected the proposition that a routine cruise ship forum selection clause is a limitation on liability that contravenes § 30509(a), even when it points to a forum that is inconvenient for the plaintiff. Shute, 499 U.S. at 596–97 (“[R]espondents cite no authority for their contention that Congress’ intent in enacting § [30509(a)] was to avoid having a plaintiff travel to a distant forum in order to litigate. The legislative history of § [30509(a)] suggests instead that this provision was enacted in response to passenger-ticket conditions purporting to limit the shipowner’s liability for negligence or to remove the issue of liability from the scrutiny of any court by means of a clause providing that ‘the question of liability and the measure of damages shall be determined by arbitration.’ There was no prohibition of a forum-selection clause.”)

The problem with this argument is that there was no evidence in Shute­—none—suggesting that the enforcement of the forum selection clause in that case would lead to the imposition of a liability cap.  Indeed, the very next sentence in the passage from Shute quoted above states that “[b]ecause the clause before us . . . does not purport to limit petitioner’s liability for negligence, it does not violate [Section 30509].”  This language suggests that if enforcement of a forum selection clause would operate to limit the cruise line’s liability for negligence, it would not be enforceable.  The Eleventh Circuit’s decision makes no mention of this language.

The Turner court also cites to a prior Eleventh Circuit decision, Estate of Myhra v. Royal Caribbean Cruises, for the proposition that “46 U.S.C. § 30509(a) does not bar a ship owner from including a forum selection clause in a passage contract, even if the chosen forum might apply substantive law that would impose a limitation on liability.”  I explain the many, many problems with the Eleventh Circuit’s decision in Myhra here.  At a minimum, however, the Myhra decision is inconsistent with the Supreme Court’s admonition in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc that “in the event the choice-of-forum and choice-of-law clauses operated in tandem as a prospective waiver of a party’s right to pursue statutory remedies . . . we would have little hesitation in condemning the agreement as against public policy.” There is no serious question that the cruise line is here attempting to use an Italian choice-of-law clause and an Italian forum selection clause “in tandem” to deprive the plaintiffs in Turner of their statutory right to be free of a damages cap.  This attempt would seem to be foreclosed by the language in Mitsubishi.  The Eleventh Circuit does not, however, cite Mitsubishi in its decision.

At the end of the day, the question before the Eleventh Circuit in Turner was whether a cruise company may deprive a U.S. passenger of rights guaranteed by a federal statute by writing an Italian choice-of-law clause and an Italian forum selection clause into a contract of adhesion. The Eleventh Circuit concluded the answer is yes.  I have my doubts.

Carlos Santaló Goris, Researcher at the Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law and Ph.D. candidate at the University of Luxembourg, offers a summary and a compelling analysis of the Luxemburgish domestic legislation regarding the EPO and EAPO Regulations.

On 23 July 2021, a new legislative reform of the Luxembourgish Code of Civil Procedure (“NCPC”), entered into force amending, among other articles, those concerning Regulation No 1896/2006, establishing a European Payment Order (“EPO Regulation”) and Regulation No 655/2014, establishing a European Account Preservation Order (“EAPO Regulation”).

The EPO and the EAPO Regulations embody, respectively, the first and third European uniform civil procedures. While the EPO, as its name indicates, is a payment order, the EAPO is a provisional measure that allows temporary freezing of the funds in the debtor’s bank accounts. Although they are often referred to as uniform procedures, both leave numerous elements to the discretion of the Member States’ national laws.

With this strong reliance on the Member State’s national laws, it is not surprising that most Member States have enacted domestic legislation to embed these Regulations within their national civil procedural systems. Luxembourg is one of them. The EPO Regulation brought two amendments to the NCPC. The first one was introduced in 2009, four months after the EPO Regulation entered into force. In broad terms, the 2009 reform integrated the EPO procedure in the Luxembourgish civil judicial system, identifying the authorities involved in its application. The second legislative amendment  stemmed from the 2015 reform of Regulation No 861/2007, establishing a European Small Claims Procedure (“ESCP Regulation”) and of the EPO Regulation. Among other changes, this reform introduced the possibility, once the debtor opposes the EPO, of continuing the procedure “in accordance with the rules of the European Small Claims Procedure” (Article 17(1)(a) EPO Regulation). The change brought to the NCPC pursued the objective to facilitate the swift conversion from an EPO into an ESCP (Articles 49(5) and 49(8) NCPC).

Before the reform of 23 July 2021, the Luxembourgish legislator had already twice modified the NCPC to incorporate the EAPO Regulation. The first EAPO implementing act was approved in 2017 (Article 685(5) NCPC). It mainly served to identify the domestic authorities involved in the EAPO procedure: from the competent courts to issue the EAPO to the competent authority to search for information about the debtor’s bank accounts (Article 14 EAPO Regulation). The second reform, introduced in 2018, aimed at facilitating the transition of the EAPO’s temporary attachment of accounts into an enforcement measure (Article 718(1) NCPC). In brief, it allowed the transfer of the debtor’s funds attached by the EAPO into the creditor’s account.

The 2021 legislative reform of the NCPC was not introduced specifically bearing in mind the EPO and the EAPO Regulations: rather, it was meant as a general update of the Luxembourgish civil procedural system. Among the several changes it introduced, it increased the value of the claim that may be brought before the Justice of the Peace (Justice de paix). Before the reform, the Justice of the Peace could only be seized for EPOs and EAPOs in claims up to 10.000 euros, while District Courts (Tribunal d’arrondissement) were competent for any claims above that amount. As a result of the reform, the Luxembourgish Justice of the Peace will now be competent to issue EPOs and EAPOs for claims up to 15.000 euros in value.

Witten by Orji A Uka (Senior Associate at ALP NG & Co) and Damilola Alabi (Associate at ALP NG & Co)

Introduction

The issuance and service of an originating process are fundamental issues that afford or rob a court of jurisdiction to adjudicate over a matter. This is because it is settled law that the proceedings and judgment of a court which lacks jurisdiction result in a nullity[1]. Yet, despite the necessity of ensuring that the issuance and service of an originating process comply with the various State High Court Civil Procedure Rules or Federal High Court Civil Procedure Rules (“the relevant court rules”) or the Sheriffs and Civil Process Act, legal practitioners and sometimes judges commonly conflate the issuance and service of court process on defendants outside jurisdiction with the concept of service of court process by substituted means on defendants within the jurisdiction[2]. This paper set outs the differences between both commonly confused principles with the aim of providing clarity to its readers and contributing to the body of knowledge on this fundamental aspect of the Nigerian adjectival law.

 

Territorial Jurisdiction of Courts in Nigeria

Historically, Nigerian courts have always exercised jurisdiction over a defined subject matter within a clearly specified territory as provided for under the Constitution of the Federal Republic of Nigeria 1999 (as amended) (the “Constitution”). As an illustrative example, a High Court of a State in Nigeria or that of the Federal Capital Territory, Abuja has jurisdiction over the subject matter of a simple contract. However, the jurisdiction of each High Court is, as a general rule, confined to persons within the territorial boundaries of the State or the Federal Capital Territory, as the case may be. As highlighted below, there are three established bases under which a High Court in Nigeria can validly exercise jurisdiction in an action in personam.[3]

Firstly, a court in Nigeria is donated with jurisdiction in an action in personam where the defendant is present or resides or carries on business within the territorial jurisdiction of the court and the defendant has been served with the originating process.[4]In the oft-cited case of British Bata Shoe Co. Ltd v. Melikan[5], the Federal Supreme Court held that the High Court of Lagos State, rightly exercised its jurisdiction in an action in personam for specific performance of a contract because the defendant resided in Lagos State even though the land in respect of which the subject matter of the dispute arose, was situated at Aba, outside the territorial jurisdiction of the court.

Thus, jurisdiction can be invoked either by residence[6] or simply by presence within jurisdiction.[7] Upon a finding that the defendant is present or resident within the jurisdiction of the court, and the originating process has been duly served on the defendant within jurisdiction, the court automatically assumes jurisdiction over such defendant, subject to the provisions of the Constitution or statutes that confer exclusive jurisdiction on other courts e.g. the Federal High Court or the National Industrial Court in respect of such subject matter.

Secondly, a court can validly exercise jurisdiction over a defendant in an action in personam where such defendant submits to the court’s jurisdiction or waives his right to raise a jurisdictional challenge. Submission may be express, where the defendant signed a jurisdiction agreement or forum selection clause agreeing to submit all disputes to the courts of a particular legal system for adjudication either or an exclusive or non-exclusive basis. Submission may also be implied where the defendant is served with a court process issued by a court other than where he resides or carries on business and the defendant enters an unconditional appearance and/or defends the case on the merit.[8]

A third basis for the valid exercise of the jurisdiction of a High Court in Nigeria is where the court grants leave for the issuance and service of the originating process on a defendant outside the court’s territorial boundaries. As noted above, historically, Nigerian courts could only validly exercise jurisdiction over a defined subject matter within its specified territory. With time, the powers of the court have now extended to the exercise of judicial power over a foreigner who owes no allegiance to the court’s territorial jurisdiction or who is resident or domiciled out of its jurisdiction but is called to appear before the court in the jurisdiction[9]. It is important to note that as an attribute of the concept of sovereignty, the exercise of jurisdiction by a court of one State over persons in another State is prima facie an infringement of the sovereignty of the other State. In Nwabueze v. Okoye,[10] the Supreme Court highlighted the fundamental rule of Nigerian conflict of laws on exercise of jurisdiction over a foreign defendant by stating as follows:

“Generally, courts exercise jurisdiction only over persons who are within the territorial limits of their jurisdiction … It should be noted that except where there is submission to the jurisdiction of the court it has no jurisdiction over a person who has not been served with the writ of summons. The court has no power to order service out of the area of its jurisdiction except where so authorised by statute or other rule having force of statute.”[11]

 

Thus, a court may only stretch its jurisdictional arm outside its territory in certain limited circumstances.[12]Where such circumstances apply, the claimant is not entitled as of right to have the originating process issued by the court for service on a defendant who is resident or present outside the jurisdiction and must seek and obtain leave to this effect.[13]

 

The Issuance and Service of Originating Process Outside Jurisdiction

The power of courts to exercise jurisdiction beyond their territorial boundaries has been variously described as “long-arm jurisdiction”, “assumed jurisdiction” or even “exorbitant jurisdiction”. However, the power is only activated using the instrumentality of the grant of leave for the issuance and service of such originating process outside jurisdiction. While applying for leave, the claimant must convince the court that there exists a special reason for it to exercise its long arm to reach a defendant outside its jurisdiction. The special reasons which must be established by a claimant are contained in the relevant rules of courts.[14] Where none of the conditions outlined in the Rules are met, the courts must refuse the application for leave. This is because – in the language commonly employed in private international law -there would be no real and substantial connection between the cause of action and the jurisdiction of Nigeria and therefore no special reason to justify the exercise of the court’s long arm jurisdiction. Further, even where it is established that the claimant’s case falls within one or more of those jurisdictional pathways contained in the Rules, the claimant is nevertheless not entitled as of right to be granted leave and the courts are not automatically bound to grant leave as a matter of course. The claimant must still demonstrate to the court that it is the forum conveniens to hear and determine the claim.[15] Unfortunately, in practice, apart from a few instances, which are exceptions rather than the general rule, Nigerian courts hardly give this serious consideration during the ex-parte hearing stage for the application for leave.

The failure of a claimant to seek leave to issue and serve an originating process on a defendant outside jurisdiction, is not a rule of mere technicality. As the learned authors of “Private International Law in Nigeria” brilliantly summarised,[16] there are at least three reasons for this conclusion. First, courts are wary of putting a defendant who is outside jurisdiction through the trouble and expense of answering a claim that can be more conveniently tried elsewhere. Two, a court has to satisfy itself before granting leave that the proceedings are not frivolous, vexatious, or oppressive to the defendant who is ordinarily resident outside jurisdiction. Three, Nigerian courts, on grounds of comity, are wary of exercising jurisdiction over a foreign defendant who is ordinarily subject to the judicial powers of a sovereign foreign state. These also explain why the grant of leave is a judicial act – that can only be done by a Judge in chambers or the court; but not by the Deputy Chief Registrar or other court official, even if such leave is subsequently ratified or endorsed by the court. Thus, there is a long line of authorities by appellate courts in Nigeria (including the Supreme Court)to the effect that where leave was not obtained before the Writ of summons was issued and served, such writ is void and must be aside.[17]

 

Substituted Service

Substituted service on the other hand is resorted to when personal service of an originating process on a defendant within jurisdiction is not possible due to reasons such as evasion of service by the defendant or the inability to locate the defendant. A claimant seeking to serve a defendant within jurisdiction by substituted means must seek and obtain an order of court to serve the defendant by a specific means as stated in the relevant court rules. For example, Order 9 Rule 5 of the Lagos State High Court Civil Procedure Rules provides that upon an application by a claimant, a judge may grant an order for substituted service as it may seem just. Some of the popular modes of effecting substituted service include by pasting the originating process at the last known address of the defendant, by newspaper publication, or especially more recently, by sending same to the defendant by email. Since the defendant is otherwise within the court’s territorial reach, and the court has jurisdiction over him, there is no need to comply with real and substantial connection test set out in Order 10 Rule 1 of the Lagos State High Court Civil Procedure Rules.

 

Leave to Issue and Serve Versus Substituted Service

As simple as these concepts are, legal practitioners repeatedly confuse an application for leave for the issuance and service of originating process outside Nigeria with an application for substituted service within Nigeria.

In Kida v. Ogunmola[18]the appellant commenced an action for specific performance against five defendants. The court bailiff however was not able to serve the respondent, who was resident outside the jurisdiction of Borno State. It was known to the appellant that the 2ndrespondent was resident in Ibadan. The appellant then applied for leave to serve the originating process on the 2ndrespondent out of jurisdiction. Curiously, the appellant also applied for leave to serve the originating process on the 2nd, 3rd& 4threspondentsby substituted means by pasting same at their last known address in Maiduguri, Borno State and the court granted same. When the respondent failed to file a defence, the High Court entered default judgment against him. When the appellant initiated enforcement proceedings against the respondent, the respondent brought an application to set aside the judgment on grounds that leave of court was not obtained to issue the originating process outside jurisdiction. The High Court refused the application but upon an appeal to the Court of Appeal, the appellate court overturned the trial court’s decision.  The Appellant ultimately appealed to the Supreme Court which upheld the decision of the Court of Appeal.

The Supreme Court reasoned that the respondent was outside the jurisdiction of the court at the material time and could not be served by substituted means, and that substituted service can only be employed in situations where a defendant is within jurisdiction but cannot be served personally. The Supreme Court further held per Musdapher JSC (as he then was), at page 411 as follows:

“For a defendant to be legally bound to respond to the order for him to appear in Court to answer a claim of the plaintiff, he must be resident within jurisdiction, see National Bank (Nig.) Ltd. v. John Akinkunmi Shoyoye and Anor. (1977) 5 SC 181. Substituted service can only be employed when for any reason, a defendant cannot be served personally with the processes within the jurisdiction of the Court for example when the defendant cannot be traced or when it is known that the defendant is evading service. Also, where at the time of the issuance of the writ, personal service could not in law be effected on a defendant, who is outside the jurisdiction of the Court, substituted service should not be ordered, see Fry vs. Moore (1889) 23 QBD 395. If the defendant is outside the jurisdiction of the Court at the time of the issue of the writ and consequently could not have been personally served in law, not being amenable to that writ, an order for substituted service cannot be made, see Wilding vs. Bean (1981) 2 QB 100.”

In the same vein the Court of Appeal stated as follows in Abacha v. Kurastic Nigeria Ltd[19]

“Courts exercise jurisdiction over persons who are within its territorial jurisdiction: Nwabueze vs. Obi-Okoye (1988) 10-11 SCNJ 60 at 73; Onyema vs. Oputa (1987) 18 NSCC (Pt. 2) 900; Ndaeyo vs. Ogunnaya (1977) 1 SC 11. Since the respondent was fully aware that before the issuance of the writ the appellant’s abode or residence for the past one year was no longer at No.189, Off R.B. Dikko Road, Asokoro, Abuja within jurisdiction, substituted service of the processes should not have been ordered by the learned trial Judge.”

The above cases emphasise that a writ issued in the ordinary form cannot be served by substituted means on a defendant who is not present or resident in the jurisdiction of the court, except the leave of court was sought and obtained in accordance with the relevant rules of court. As Okoli and Oppong lucidly put it, where a writ cannot be served on a person directly, it cannot be served indirectly by means of substituted service.[20]

One area of law where parties commonly make the mistake of conflating an application for leave to issue and serve out of jurisdiction with an application for substituted service is in maritime claims. This, in our experience, stems from a historically commonplace mischaracterisation of actions as actions in rem instead of actions in personam.[21] In Agip (Nig) Ltd v Agip Petroli International[22]the Supreme Court held where an action is not solely an action in rem but also an action in personam, the plaintiff is bound to comply with the procedural rules, such as obtaining leave of the court.

Further, there is a common practice – particularly in cases with multiple defendants, with one defendant residing within jurisdiction and another outside jurisdiction – where parties apply to the courts to serve the originating process on the party outside jurisdiction through substituted service on the party within jurisdiction. It is pertinent to state that the above practice does not cure the defect and that the only circumstance where it is acceptable is where the party within jurisdiction is the agent of the party outside jurisdiction, and that is not the end of the story. The position of the law is that where a foreign company carries on business through an agent or servant company resident within a court’s jurisdiction, the principal company is deemed to also be carrying on business within the same jurisdiction.[23] However, the courts have also held that where the agent company has no hand in the management of the company and receives only the customary agent’s commission, the agent’s place of business in Nigeria is not the company’s place of business. Thus, the company has no established place of business in Nigeria and is not resident in Nigeria,[24] therefore leave of court is still required for the issuance and service of the writ.

 

Conclusion

The power vested in an appellate court to set aside a judgment of a lower court on the grounds of improper issuance or service of the originating process which is for service out of jurisdiction is symbolic of the imperativeness for claimants and their legal practitioners to ensure that the issuance and service of the originating process are done in conformity with the law and relevant court rules. It is respectfully submitted that the confusion between the service of an originating process outside the jurisdiction of a court and the service of an originating process by substituted means is unnecessary. The principles are clear and distinct and should not be mixed up.

[1]See. Boko v. Nungwa (2019) 1 NWLR (Pt. 1654) 395. In CRUTECH v. Obeten (2011) 15 NWLR (Pt. 1271) 588 the Court of Appeal reemphasised the importance of jurisdiction when it stated that “the lack of jurisdiction is detrimental, disastrous, devastating and without leverage for salvaging the situation, regardless of desirability of such a course of action.”

[2] See Nwabueze v. Okoye (1988) 4 NWLR (Pt. 91) 644; Bimonure v. Erinosho (1966) 1 All NLR 250; Mbadinuju v. Ezuka (1994) 8 NWLR (Pt. 364) 535; and Khatoun v. Hans Mehr (Nigeria) and Anor. (1961) NRNLR 27.

[3] According to the 10th Edition of the Black Law Dictionary, an action is said to be in personam when its object is to determine the rights and obligation of the parties in the subject matter of the action, however, the action may arise, and the effect of the judgment may bind the other. A common example is a breach of contract claim.

[4]Ogunsola v. All Nigeria People’s Party (2003) 9 NWLR (Pt. 826) 462.

[5]British Bata Shoe Co. Ltd v Melikan (1956) 1 FSC 100.

[6]United Bank of Africa v. Odimayo (2005) 2 NWLR (Pt. 909) 21.

[7]Ayinule v. Abimbola (1957) LLR 41.

[8]See Barzani v Visinoni (1973) NCLR 383; Ezomo v Oyakhire (1985) 1 NWLR (Pt. 2) 195;Adegoke Motors Ltd v Adesanya (1989) 3 NWLR (Pt. 107) 250.

[9]Caribbean Trading & Fidelity v. Nigerian National Petroleum Corporation (2002) LPELR- 831 (SC).

[10](1988) 4 NWLR (Pt 91) 664.

[11]See also United Bank for Africa Plc v Odimayo (2005) 2 NWLR (Pt. 909) 21, 40

[12] Bamodu, G. (1995) ‘Jurisdiction and Applicable Law in Transnational Dispute Resolution before the Nigerian Courts’ 29 Int’l L 555 available at https://scholar.smu.edu/til/vol29/iss3/6.

[13] Broad Bank of Nigeria v. Olayiwola (2005) LPELR-806 (SC).

[14]For instance, Order 10 Rule 1 of the Lagos State High Court Civil Procedure Rules 2019 provides that a judge may allow its originating process to be served on a defendant outside Nigeria where, inter alia, the whole subject matter of the dispute is land which located within jurisdiction; the claim is for the administration of the personal estate of any deceased person who was domiciled within jurisdiction at the time of his death; the action is brought in respect of a contract that is made within the jurisdiction, made by an agent residing or carrying on business within jurisdiction, or governed by Lagos State laws; the claim is in respect of a contract breached within jurisdiction regardless of where it was executed; the claim is founded on a tort committed within the jurisdiction; etc.

[15]While it is beyond the purview of this paper to undertake a comprehensive exposition on the concept of forum conveniens, it is pertinent for the present purposes to note that another commonly mistaken belief among lawyers is to equate the rule of forum non conveniens with the convenience of the parties or their legal practitioners. The word, conveniens is a Latin word for convenient or appropriate. The rule simply means that that there is another forum in which the case may most suitably be tried in the interests of all the parties and the ends of justice.

[16]Okoli, C. S. A. and Oppong, R. (2020) Private International Law in Nigeria Hart Publishers p. 75.

[17] An illustrative example is the case of Owners of the MV Arabella v. Nigeria Agricultural Insurance Corporation (2008) LPELR- 2848 (SC).Some later authorities have however held that such writ is not void but voidable and is capable of being waived by the defendant if not timeously raised. Whether a writ which is issued without leave is void or voidable is not within the purview of this paper. Either way, such writ is capable of being set aside.

[18]Mohammed Kida v. A. D. Ogunmola (2006) All FWLR (Pt. 327) 402.

[19](2014) LPELR-22703(CA).

[20]Okoli, C. S. A. and Oppong, R. (2020) Private International Law in Nigeria Hart Publishers p. 59.

[21]For a detailed treatment of the distinction between actions in rem and actions in personam please see Okoli, C. S. A. and Oppong, R. n. (16) above.

[22](2010) 5 NWLR (Pt. 1187) 348, 416.

[23]Spiropoulos and Co Ltd v. Nigerian Rubber Co Ltd (1970) NCLR 94; Eimskip Ltd v. Exquisite Industries (Nig) Ltd (2003) 14 WRN 77.

[24]See In re Gresham Life Assurance Society (Nig) Ltd (1973) (1) ALR Comm 215, (1973) 1 All NLR (Pt. I) 617, (1973) NCLR 215.

 

By Neerav Srivastava

 

The Rule in Antony Gibbs[1] (‘the Rule’) provides that if the proper law of a contract is Australian, then a discharge of the debt by a foreign jurisdiction will not be a discharge in Australia unless the creditor submitted to the foreign jurisdiction.[2] The Rule is much maligned, especially in insolvency circles, and has been described as “Victorian”.[3] In ‘Heritage and Vitality: Whether Antony Gibbs is a Presumption’[4] I seek to defend the Rule.

Presumption

The article begins by arguing that, in the modern context, that the Rule should be recognised as a Presumption as to party intentions.

Briefly, Gibbs was decided in the 1890s. At the time, the prevailing view was that the proper law of a contract was either the law of the place of the contract or its performance.[5] This approach was based on apportioning regulatory authority between sovereign States rather than party intentions. To apply a foreign proper law in a territory was regarded as contrary to territorial sovereignty. Freedom of contract and party intentions were becoming relevant to proper law but only to a limited extent.[6]

As for Gibbs, Lord Esher’s language is consistent with the ‘Regulatory Approach’:

It is clear that these were English contracts according to two rules of law; first, because they were made in England; secondly, because they were to be performed in England. The general rule as to the law which governs a contract is that the law of the country, either where the contract is made, or where it is to be so performed that it must be considered to be a contract of that country, is the law which governs such contract …[7]

Notice that the passage makes no reference to party intentions.

By the early 20th century, the position had evolved in that it was generally accepted that party intentions determined the proper law.[8] Even so, it was not until the late 1930s that the Privy Council stated that the position was “well-settled”.[9] Party intentions has evolved into being the test for proper law universally.[10]

Under the modern approach, party intentions as to proper law are a question of fact and not territorial. Parties are free to choose a proper law of a jurisdiction with which they have no connection.[11] As a question of fact, party intentions are better understood as a ‘Presumption’. Further, the Presumption might be displaced. The same conclusion can be reached via an implied term analysis.

The parties can also agree that there is more than one proper law for a contract. That, too, is consistent with party autonomy. Under depeçage, one law can govern a contract’s implementation and another its discharge.[12] Likewise, the Second Restatement in the US[13] and the International Hague Principles allow a contract to have multiple proper laws.[14]

Cross-border Insolvency

The second part of the article addresses criticisms of Gibbs by cross-border insolvency practitioners. In insolvency, issues are no longer merely between the two contracting parties. The body of creditors are competing for a share of a company’s remaining assets. Under pari passu all creditors are to be treated equally. If a company is in a foreign liquidation, and its discharge of Australian debt is not recognised by an Australian court, Gibbs appears inconsistent with pari passu. Specifically, it appears that the creditor can sue in Australia and secure a disproportionate return.

That is an incomplete picture. While the foreign insolvency does not discharge the debt in Australia, when it comes to enforcement comity applies. Comity is agitated by a universal distribution process in a foreign insolvency. Having regard to comity, the Australian court will treat local and international creditors equally.[15] If creditors are recovering 50% in a foreign insolvency, an Australian court will not allow an Australian creditor to recover more than 50% at the enforcement stage. Criticisms of the Presumption do not give due weight to enforcement.

Gibbs has been described as irreconcilable with the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency 1997 (the 1997 Model Law),[16] which is generally[17] regarded as embodying ‘modified universalism’. That, it is submitted, reflects a misunderstanding.

Historically, in a cross-border insolvency “territorialism” applied.[18] Each country collected assets in its territory and distributed them to creditors claiming in those insolvency proceedings. In the past 200 years, universalism has been applied.[19] Under ‘pure universalism’, there is only one process for collecting assets globally and distributing to all creditors. Modified universalism:

accepts the central premise of [pure] universalism, that assets should be collected and distributed on a worldwide basis, but reserves to local courts discretion to evaluate the fairness of the home-country procedures and to protect the interests of local creditors …[20]

Modified universalism can be understood as a structured form of comity.[21] It asks that all creditors be treated equally but is a tent in that it allows States to choose how to protect the interest of creditors. A State may choose to couple recognition of the foreign insolvency – and the collection of assets in its jurisdiction – with the discharge of creditors’ debts. However, the 1997 Model Law does not require a State to follow this mechanism.[22] Under the Anglo-Australian mechanism (a) a debt may not be discharged pursuant to Gibbs (b), but creditors are treated equally at the enforcement stage. It is a legitimate approach under the tent that is modified universalism.

 

[1] Antony Gibbs & Sons v Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399.

[2] Albert Venn Dicey, A Digest of the Law of England With Reference To The Conflict of Laws (Stevens, 1896) rule 113.

[3] Varoon Sachdev, “Choice of Law in Insolvency Proceedings: How English Courts’ Continued Reliance on the Gibbs Principle Threatens Universalism” (2019) 93 American Bankruptcy Law Journal 343.

[4] (2021) 29 Insolvency Law Journal 61. Available at Westlaw Australia.

[5] Alex Mills, Party Autonomy in Private International Law (CUP, 2018) 53, citing Peninsular and Oriental Steam Navigation Co v Shand (1865) 16 ER 103.

[6] Alex Mills, The Confluence of Public and Private International Law (CUP, 2009), 53.

[7] Antony Gibbs & Sons v Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399, 405 (Gibbs).

[8] Alex Mills, Party Autonomy in Private International Law (CUP, 2018) 56, Lord Collins et al, Dicey, Morris & Collins, The Conflict of Laws (Sweet & Maxwell, 15th ed, 2017), [32-004]–[32-005].

[9] Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277.

[10] Martin Davis et al, Nygh’s Conflict of Laws in Australia (Lexis Nexis, 2019), [19.6]; Lord Collins et al, Dicey, Morris & Collins, The Conflict of Laws (Sweet & Maxwell, 15th ed, 2017), [32-004]–[32-005], [32-042]; and Principles on Choice of Law in International Commercial Contracts promulgated by the Hague Conference on Private International Law in 2015.

[11] Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277, Martin Davis et al, Nygh’s Conflict of Laws in Australia (Lexis Nexis, 2019), [19.15].

[12] Club Mediterranee New Zealand v Wendell [1989] 1 NZLR 216, Olex Focas Pty Ltd v Skodaexport Co Ltd [1998] 3 VR 380.

[13] Restatement (Second) of Contracts § 188.

[14] Principles on Choice of Law in International Commercial Contracts promulgated by the Hague Conference on Private International Law in 2015.

[15] Galbraith v Grimshaw [1910] AC 508, Chapman v Travelstead (1998) 86 FCR 460, Re HIH Casualty & General Insurance Ltd (2005) 190 FLR 398.

[16] In Australia the 1997 Model Law was extended to Australia by the Cross-Border Insolvency Act 2008 (Cth).

[17] Adrian Walters, “Modified Universalisms & the Role of Local Legal Culture in the Making of Cross-border Insolvency Law” (2019) 93 American Bankruptcy Law Journal 47, 64.

[18] Although Rares J has pointed out, “centuries earlier, maritime lawyers had developed a sophisticated and generally harmonious system of dealing with cross-border insolvencies”: Steven Rares, “Consistency and Conflict – Cross-Border Insolvency” (Paper presented at the 32nd Annual Conference of the Banking & Financial Services Law Association, Brisbane, 4 September 2015).

[19] Re HIH Casualty & General Insurance Ltd [2008] 1 WLR 852, [30]; [2008] UKHL 21.

[20] Jay Lawrence Westbrook, “Choice of Avoidance Law in Global Insolvencies” (1991) 17 Brooklyn Journal of International Law 499, 517.

[21] UNCITRAL, Guide to Enactment and Interpretation of the UNCITRAL Model Law on Cross-border Insolvency (2014) [8].

[22] Akers v Deputy Commissioner of Taxation (2014) 223 FCR 8; [2014] FCAFC 57. See too Re Bakhshiyeva v Sberbank of Russia [2019] Bus LR 1130 (CA); [2018] EWCA 2802.

The third issue of 2021 Lloyds’s Maritime and Commercial Law Quarterly was published today. It features one article and a book review on private international law.

M Teo,  “A Negotiation-Based Choice of Law Rule for Contractual Formation”

A Briggs, “Book Review – The Private International Law of Authentic Instruments”

 

The Faculty of Law, Brawijaya University, Indonesia is organizing a one-day international online seminar on Private International Law in Islamic Countries – Developments and Challenges. The main purpose of the seminar is to examine and discuss the current situation of private international law in Islamic countries especially from the point of view of the influence of religion (Sharia/Islamic law) on the regulation of private international relationships.

Participation is free but online registration (here)  is kindly requested to receive the link to the conference, which will be emailed shortly before the event.

After registering, attendees will receive a confirmation email containing information about joining the webinar. The event will also be live streamed via YouTube (here). E-certificate for attendance will also be issued for attendees to prove that they joined the online seminar.

Details about the forthcoming seminar are as follows:

Date: 24 August 2021

Time: 13:00 (Western Indonesia Time); 14:00 (Brunei & Hong Kong Time); 15:00 (Japan Time)

Program (details can be found here):

1. Admittance for Key-note Speaker, Invited Speakers, and Seminar
2. Opening Ceremony by the Dean of the Faculty of Law, Brawijaya
3. Keynote Speech by Professor Yun Zhao, Representative of the HCCH Regional Office for Asia and the Pacific
4. Seminar Presentation (Moderator: Cyndiarnis, SH. MKn)

• • a. Associate Professor Béligh Elbalti, Ph.D., Graduate School of Law and Politics, Osaka University (The Influence of Islamic Law Principles on the Treatment of International Private Relationships – Family Law as Example)
  • b. Nobumichi Teramura, Assistant Professor of the Institute of Asian Studies, and University of Brunei Darussalam (Shariah as the Law Applicable to an International Commercial Contract: Challenges and Opportunities in Australia and Brunei)
  • c. Afifah Kusumadara, SH. LL.M. SJD., Faculty of Law, Brawijaya University (The connecting factors to determine the applicable law and the court jurisdiction in Indonesia: The interference of religion)

5. Question and Answer
6. Photo Session and Closing
7. Announcement by the M.C. concerning:

• • Certificates of Participation
  • Seminar materials

Any enquiries should be directed to seminar_pil@ub.ac.id. The organisers are looking forward to having fruitful discussion with and exchange of ideas among all participants.

 

 

A foreign judgment that cannot be enforced is useless no matter how well it is/was written. The fact that a foreign judgment can be readily enforced aids the prompt settlement of disputes and makes international commercial transactions more effective.  The importance of the enforcement of foreign judgments cannot be over-emhpasised because international commercial parties are likely to lose confidence in a system that does not protect their interests in the form of recognising and enforcing a foreign judgment.

Today Hart published a new private international law monograph focused on the recognition and enforcement of foreign judgments. Its title is “The Hague Judgments Convention and Commonwealth Model Law: A Pragmatic Perspective.” The author of this monograph is Dr Abubakri Yekini of the Lagos State University. The monograph is based on his PhD thesis at the University of Aberdeen titled “A Critical Analysis of the Hague Judgments Convention and Commonwealth Model Law from a Pragmatic Perspective.”

The abstract of the book reads as follows:

“This book undertakes a systematic analysis of the 2019 Hague Judgments Convention, the 2005 Hague Choice of Court Convention 2005, and the 2017 Commonwealth Model Law on recognition and Enforcement of Foreign Judgments from a pragmatic perspective.

The book builds on the concept of pragmatism in private international law within the context of recognition and enforcement of judgments. It demonstrates the practical application of legal pragmatism by setting up a toolbox (pragmatic goals and methods) that will assist courts and policymakers in developing an effective and efficient judgments’ enforcement scheme at national, bilateral and multilateral levels.

Practitioners, national courts, policymakers, academics, students and litigants will benefit from the book’s comparative approach using case law from the United Kingdom and other leading Commonwealth States, the United States, and the Court of Justice of the European Union. The book also provides interesting findings from the empirical research on the refusal of recognition and enforcement in the UK and the Commonwealth statutory registration schemes respectively.”

I have had the benefit of reading this piece once and can confidently recommend it to anyone interested in the important topic of recognition and enforcement of foreign judgments. The pragmatic approach utilised in the book makes the work an interesting read. My prediction is that this book will endure for a long time, and will likely be utilised in adjudication.

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 12 August 2021 at 5:00 pm (Mexico City time – CDT), 12:00 am (CEST time). The topic of the webinar is two thesis on private international law and will be presented by Professor Leonel Pereznieto Castro (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/84229739402?pwd=bXlib3IzQnkvUjlzS0VTbVQvcEpLQT09

Meeting ID: 842 2973 9402

Password: BMAAMEDIP

Participation is free of charge. This event will also be streamed live: https://www.facebook.com/AmedipMX

 

 

AMEDIP is also giving a series of lectures in a course addressed to judges and judicial officers, among others. This course consists of 100 hours of lectures on Private International Law and is being organized by the Federal Judicial School of Mexico. The program is available here.

As this course deals with a broad range of topics, it will have an impact on the better understanding of Private International Law in the Mexican judicial branch and may lead to better decision making in international cases. For more information, click here.

 

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

 

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal).

 

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/

Online Event on 11 and 12 August

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal). This online event involves lawyers from Brazil, Mexico, and Portugal.

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/“

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

 

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal).

 

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/

Tort Choice of Law Rules in Cross-border Multi-party Litigation under European and Chinese Private International Law

By Zhen Chen, PhD Researcher, University of Groningen

This blog post is part of the article ‘Tort Conflicts Rules in Cross-border Multi-party Litigation: Which Law Has a Closer or the Closest Connection?’ published by the Maastricht Journal of European and Comparative Law with open access, available at https://doi.org/10.1177/1023263X211034103. A related previous post is ‘Personal Injury and Article 4(3) of Rome II Regulation’, available here https://conflictoflaws.net/2021/personal-injury-and-article-43-of-rome-ii-regulation/

This article compares Owen v. Galgey under Article 4 Rome II Regulation and YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act in the context of cross-border multi-party litigation on tort liability. As to the interpretation of tort conflicts rules, such as lex loci delicti, the notion of ‘damage’, lex domicilii communis and the closer/closest connection test, these two cases demonstrate different approaches adopted in European and Chinese private international law. This article does not intend to reach a conclusion which law is better between Rome II Regulation and Chinese Conflicts Act, but rather highlights on a common challenge faced by both Chinese courts and English courts in international tort litigation and how to tackle such challenge in an efficient way.

I. Tort conflicts rules in China and the EU
It is widely accepted rule that lex loci delicti will be the applicable law for cross-border tort liability in private international law. This is also the case in China and the EU. The application of lex loci delicti, as a general rule, is stipulated in Article 44 Chinese Conflicts Act and Article 4(1) Rome II Regulation. However, Article 4(1) Rome II Regulation explicitly refers to the place of damage, namely ‘the law of the country in which the damage occurs’ (lex loci damni), and expressly excludes the place of wrong (‘the country in which the event giving rise to the damage occurred’) and the place of consequential loss (‘the country or countries in which the indirect consequences of that event occur’). By contrast, it remains unclear whether lex loci delicti in Article 44 Chinese Conflicts Act merely refers to lex loci damni, as such provision does not expressly state so.

The application of lex loci delicti in China and the EU is subject to several exceptions. Specifically, lex loci delicti is superseded by the law chosen by the parties under Article 44 Chinese Conflicts Act and Article 14 Rome II Regulation, while lex domicilii communis takes precedence over lex loci delicti under Article 44 Chinese Conflicts Act and Article 4(2) Rome II Regulation. Moreover, the escape clause enshrined in Article 4(3) Rome II Regulation gives priority to the law of the country which has a ‘manifestly closer connection’ with the tort/delict, of which the pre-existing relationship between the parties might be a contract. By contrast, Article 44 Chinese Conflicts Act does not provide an escape clause, but the closest connection principle, which is comparable to the closer connection test in Article 4(3) Rome II, is stipulated in several other provisions.

The questions raised in YANG Shuying v. British Carnival Cruise and Owen v. Galgey were how to determine the applicable law to tort liability in multiparty litigation under Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation and what are the criteria for the closer/closest connection test.

II. Owen v. Galgey under Article 4 Rome II Regulation
In case Owen v. Galgey , a British citizen Gary Owen domiciled in England, fell into an empty swimming pool which was undergoing renovation works at a villa in France owned by the Galgey Couple, domiciled in England, as a holiday home. The British victim sued the British couple, their French public liability insurer, the French contractor carrying out renovation works on the swimming pool and its French public liability insurer for personal injury compensation. As regards which law is applicable, the British victim contended that French law should be applied by virtue of Article 4(3) Rome II Regulation, since the tort was manifestly more closely connected with France than it was with England. The British defendants held that English law should be applicable law under Article 4(2) Rome II Regulation, because the claimant and the defendants were habitually resident in England. The English High Court held the case was manifestly more closely connected with France, because France was the country where the centre of gravity of the situation was located.

III. YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act

In case YANG Shuying v. British Carnival Cruise, a Chinese tourist domiciled in China, sued the British Carnival Cruise Company, incorporated in the UK, for personal injury sustained in a swimming pool accident happened in the cruise when it was located on the high seas. The plaintiff signed an outbound travel contract with Zhejiang China Travel Agency for such cruise tour. The plaintiff held that English law, as the lex loci delicti, should be applicable since the parties did not share common habitual residence in China and the accident occurred on the cruise, which can be regarded as the territory of the UK according to the floating territory theory. The place of wrong and the place of damage were both on the cruise under Article 44 Chinese Conflicts Act. The defendant and the third party argued that Chinese law should be applied since the parties had common habitual residence in China, the floating territory theory was inapplicable and the (indirect) damage of the tort took place in China.

The Shanghai Maritime Court adopted a strict interpretation of the term ‘the parties’ by excluding the third party and denied the application of floating territory theory in this case. The court held that the application of the lex loci delicti leads to neither English law nor Chinese law. Instead, it is advisable to apply the closest connection principle to determine the applicable law. Based on a quantitative and qualitative analysis ofTort Choice of Law Rules in Cross-border Multi-party Litigation under European and Chinese Private International Law

Zhen Chen

This blog post is part of the article ‘Tort Conflicts Rules in Cross-border Multi-party Litigation: Which Law Has a Closer or the Closest Connection?’ published by the Maastricht Journal of European and Comparative Law with open access, available at https://doi.org/10.1177/1023263X211034103. A related previous post is ‘Personal Injury and Article 4(3) of Rome II Regulation’, available here https://conflictoflaws.net/2021/personal-injury-and-article-43-of-rome-ii-regulation/

This article compares Owen v. Galgey under Article 4 Rome II Regulation and YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act in the context of cross-border multi-party litigation on tort liability. As to the interpretation of tort conflicts rules, such as lex loci delicti, the notion of ‘damage’, lex domicilii communis and the closer/closest connection test, these two cases demonstrate different approaches adopted in European and Chinese private international law. This article does not intend to reach a conclusion which law is better between Rome II Regulation and Chinese Conflicts Act, but rather highlights on a common challenge faced by both Chinese courts and English courts in international tort litigation and how to tackle such challenge in an efficient way.

I. Tort conflicts rules in China and the EU
It is widely accepted rule that lex loci delicti will be the applicable law for cross-border tort liability in private international law. This is also the case in China and the EU. The application of lex loci delicti, as a general rule, is stipulated in Article 44 Chinese Conflicts Act and Article 4(1) Rome II Regulation. However, Article 4(1) Rome II Regulation explicitly refers to the place of damage, namely ‘the law of the country in which the damage occurs’ (lex loci damni), and expressly excludes the place of wrong (‘the country in which the event giving rise to the damage occurred’) and the place of consequential loss (‘the country or countries in which the indirect consequences of that event occur’). By contrast, it remains unclear whether lex loci delicti in Article 44 Chinese Conflicts Act merely refers to lex loci damni, as such provision does not expressly state so.

The application of lex loci delicti in China and the EU is subject to several exceptions. Specifically, lex loci delicti is superseded by the law chosen by the parties under Article 44 Chinese Conflicts Act and Article 14 Rome II Regulation, while lex domicilii communis takes precedence over lex loci delicti under Article 44 Chinese Conflicts Act and Article 4(2) Rome II Regulation. Moreover, the escape clause enshrined in Article 4(3) Rome II Regulation gives priority to the law of the country which has a ‘manifestly closer connection’ with the tort/delict, of which the pre-existing relationship between the parties might be a contract. By contrast, Article 44 Chinese Conflicts Act does not provide an escape clause, but the closest connection principle, which is comparable to the closer connection test in Article 4(3) Rome II, is stipulated in several other provisions.

The questions raised in YANG Shuying v. British Carnival Cruise and Owen v. Galgey were how to determine the applicable law to tort liability in multiparty litigation under Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation and what are the criteria for the closer/closest connection test.

II. Owen v. Galgey under Article 4 Rome II Regulation
In case Owen v. Galgey , a British citizen Gary Owen domiciled in England, fell into an empty swimming pool which was undergoing renovation works at a villa in France owned by the Galgey Couple, domiciled in England, as a holiday home. The British victim sued the British couple, their French public liability insurer, the French contractor carrying out renovation works on the swimming pool and its French public liability insurer for personal injury compensation. As regards which law is applicable, the British victim contended that French law should be applied by virtue of Article 4(3) Rome II Regulation, since the tort was manifestly more closely connected with France than it was with England. The British defendants held that English law should be applicable law under Article 4(2) Rome II Regulation, because the claimant and the defendants were habitually resident in England. The English High Court held the case was manifestly more closely connected with France, because France was the country where the centre of gravity of the situation was located.

III. YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act

In case YANG Shuying v. British Carnival Cruise, a Chinese tourist domiciled in China, sued the British Carnival Cruise Company, incorporated in the UK, for personal injury sustained in a swimming pool accident happened in the cruise when it was located on the high seas. The plaintiff signed an outbound travel contract with Zhejiang China Travel Agency for such cruise tour. The plaintiff held that English law, as the lex loci delicti, should be applicable since the parties did not share common habitual residence in China and the accident occurred on the cruise, which can be regarded as the territory of the UK according to the floating territory theory. The place of wrong and the place of damage were both on the cruise under Article 44 Chinese Conflicts Act. The defendant and the third party argued that Chinese law should be applied since the parties had common habitual residence in China, the floating territory theory was inapplicable and the (indirect) damage of the tort took place in China.

The Shanghai Maritime Court adopted a strict interpretation of the term ‘the parties’ by excluding the third party and denied the application of floating territory theory in this case. The court held that the application of the lex loci delicti leads to neither English law nor Chinese law. Instead, it is advisable to apply the closest connection principle to determine the applicable law. Based on a quantitative and qualitative analysis of all connecting factors, the court concluded that China had the closest connection with the case and Chinese law applied accordingly.

IV. Comments

Both Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation apply to multi-party litigation on tort liability. Article 4(1) Rome II merely refers to lex loci damni and limits the concept ‘damage’ to direct damage, whilst Article 44 Chinese Conflicts Act can be interpreted broadly to cover the law of the place of wrong and the term ‘damage’ include both direct damage and indirect damage or consequential loss. As to lex domicilii communis, the law of the country of the common habitual residence of some of the parties, instead of all parties, should not be applicable in accordance with Article 4(2) Rome II and Article 44 Chinese Conflicts Act. The exercise of the closest connection principle or the manifestly closer connection test under 44 Chinese Conflicts Act and Article 4(3) Rome II Regulation requires the the consideration of all relevant factors or all the circumstances in the case. When conducting a balancing test, the factor of the place of direct damage should not be given too much weight to the extent that all other relevant factors are disregarded. A quantitive and qualitative analysis should be conducted to elaborate the relevance or weight of each factor to determine the centre of gravity of a legal relationship.
all connecting factors, the court concluded that China had the closest connection with the case and Chinese law applied accordingly.

IV. Comments

Both Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation apply to multi-party litigation on tort liability. Article 4(1) Rome II merely refers to lex loci damni and limits the concept ‘damage’ to direct damage, whilst Article 44 Chinese Conflicts Act can be interpreted broadly to cover the law of the place of wrong and the term ‘damage’ include both direct damage and indirect damage or consequential loss. As to lex domicilii communis, the law of the country of the common habitual residence of some of the parties, instead of all parties, should not be applicable in accordance with Article 4(2) Rome II and Article 44 Chinese Conflicts Act. The exercise of the closest connection principle or the manifestly closer connection test under 44 Chinese Conflicts Act and Article 4(3) Rome II Regulation requires the the consideration of all relevant factors or all the circumstances in the case. When conducting a balancing test, the factor of the place of direct damage should not be given too much weight to the extent that all other relevant factors are disregarded. A quantitive and qualitative analysis should be conducted to elaborate the relevance or weight of each factor to determine the centre of gravity of a legal relationship.

The Jean Monnet Network – BRIDGE project, cofunded by EU Erasmus+ Programme, and the Latin American Center of European Studies invite the academic community to submit scientific papers to the Workshop event of the II Jean Monnet Network Seminar on “Migration and Citizenship in the European Union and Latin America”, which will be held virtually on the 9 November 2021, hosted by the Federal University of Santa Catarina (Brazil).

The selected articles will be invited to publish in the Latin American Journal of European Studies or in the Collection of the Workshop.  The top two articles will also receive an award of EUR 250 each.

Those who are interested must submit the article by 15 October 2021 to the email: network@eurolatinstudies.com.

Call for papers – English

Call for papers – Spanish

Call for Paper – Portuguese

More information here.

The first issue of the Latin American Journal of European Studies (ISSN 2763-8685) has just been published. It is an open access publication of the Latin American Center of European Studies, created by the BRIDGE Project of Jean Monnet Network with funding from the Erasmus + Program of the European Commission.

The main purpose of the Journal is to publish research related to the European Union Law and Policies and International Relations of the European Union with third countries and Latin America to create new knowledge, build bridges of dialogue, as well exchange good practices between these regions.

The second issue of the Journal is open to submission until November 1st, 2021 and contains a thematic dossier on Migration and Citizenship in the EU and Latin America.

The 2021-1 edition includes the following articles:

 

Dossier: EU-Latin America trade and investment relations

Las relaciones Eurolatinoamericanas en el marco de la nueva política comercial de la Unión Europea, p. 14-37

Carlos Francisco Molina del Pozo

 

Environmental conditionality in Eu-Latin America trade relations, p. 38-63

Giulia D’Agnone

 

El derecho de los tratados en el arbitraje de inversión intra-Unión Europea, p. 64-108

Rafael Tamayo-Álvarez

 

Sistema de solución de controversias en materia de inversiones en los tratados negociados por la Unión Europea con México y el Mercosur (2019/2020): Un estúdio comparativo, p. 109-138

Gabriela Teresita Mastaglia

 

Uma década de política europeia de investimento estrangeiro: balanço e perspectivas futuras, p. 139-156

Maria João Palma

 

Unión Europea-América Latina y el Caribe: comercio e inversión y el acuerdo de asociación Unión Europea-Mercosur en su pilar comercial y sus potenciales efectos em el sector agroindustrial, p. 157-199

Silvia Simonit

 

La integración Centroamericana y el acuerdo de asociación entre esa región y la Unión Europea, p. 200-230

Nancy Eunice Alas Moreno

 

A cooperação jurídica dentro da União Europeia e do Mercosul: a agilização do processo civil internacional no âmbito da regionalização, p. 231-253

Marcel Zernikow

 

A abertura ao comércio internacional da contratação pública no Brasil: entre o Acordo sobre Compras Governamentais (GPA) e o acordo EU/Mercosul, p. 254-296

Nuno Cunha Rodrigues

 

Articles

Data protection implications through an inner-connected world: European Union’s contributions towards the brazilian legislative scenario, p. 297-318

Beatriz Graziano Chow; Clarisse Laupman Ferraz Lima

 

A União Europeia e a questão Turco-Cipriota: aspectos normativos, geopolíticos e migratórios, p. 319-354

Clarice Rangel Schreiner; Eveline Vieira Brigido; Roberto Rodolfo Georg Uebel

 

Interview

Por uma aliança estratégica Mercosul e União Europeia: O papel da Europa para o fortalecimento da Sustentabilidade – Entrevista com Ignacio Ybañez, Embaixador da União Europeia no Brasil

Jamile Bergamaschine Mata Diz

 

The full edition is available here.

 

 

This event is organised by CANACO and the Chamber of Commerce of Mexico. Registration is free of charge. To register send a message to the following email address: arbitrajecanaco@arbitrajecanaco.com.mx.

Gary Born’s approach has been controversial. See our previous post here. The EAPIL blog has also been very active on this topic, see the recent post: The 2005 Hague Convention on Choice-of-Court Agreements: A Further Reply to Gary Born. Thus this event promises to be extremely interesting and will allow the further exchange of views.

Dear Friends and Colleagues,

 

even though the pandemic situation seems to decrease in our part of the world, the University of Bonn remains very careful and will still not allow on-site events of a larger scale for the next months. We have therefore once again made the decision to reschedule the Conference (originally planned for the 25/26 September 2020, and already postponed to 13/14 September 2021) on Friday and Saturday, 9 and 10 September 2022. However, as there are reasonable expectations for the HCCH 2019 Judgments Convention to enter into force around that time, we are confident – especially with a view to the latest recommendations of the European Commission – that we will experience an even more focused and rewarding discussion on the topic.

Please, find below the preliminary programme of the Conference.

 

***

Brexit has become reality – one more reason to think about the EU’s Judicial Cooperation with third states:

The largest proportion of EU economic growth in the 21st century is expected to arise in trade with third countries. This is why the EU is building up trade relations with many states and other regional integration communities in all parts of the world. The latest example is the EU-MERCOSUR Association Agreement concluded on 28 June 2019. With the United Kingdom’s exit of the Union on 31 January 2020, extra-EU trade with neighboring countries will further increase in importance. Another challenge for the EU is China’s “Belt and Road Initiative”, a powerful global development strategy that includes overland as well as sea routes in more than 100 states around the globe.

The increasing volume of trade with third states will inevitably lead to a rise in the number and importance of commercial disputes. This makes mechanisms for their orderly and efficient resolution indispensable. China is already setting up infrastructures for commercial dispute resolution alongside its belts and roads. In contrast, there seems to be no elaborate EU strategy on judicial cooperation in civil matters with countries outside of the Union, despite the DG Trade’s realisation that “trade is no longer just about trade”. Especially, there is no coherent plan for establishing mechanisms for the coordination of cross-border dispute resolution and the mutual recognition and enforcement of judgments. This is a glaring gap in the EU’s policy making in external trade relations.

This is why the Bonn group of PIL colleagues – Moritz Brinkmann, Nina Dethloff, Philipp Reuss, and Matthias Weller – will host a conference on Friday and Saturday, 9 and 10 September 2022, at the University of Bonn that seeks to explore ways in which judicial cooperation in civil matters between the EU and third countries can be improved by the HCCH 2019 Judgments Convention as an important driver, if not game changer, of legal certainty in cross-border commercial relations.

The list of speakers includes internationally leading scholars, practitioners and experts from the Hague Conference on Private International Law (HCCH), the United Nations Commission on International Trade Law (UNCITRAL), and the European Commission (DG Trade, DG Justice).

The Conference is co-hosted by the HCCH as one of the first European events for discussing the HCCH 2019 Judgments Convention. The Conference will be further supported by the Zentrum für europäisches Wirtschaftsrecht at the University of Bonn and The International Litigation Exchange (ILEX).

The Organizers will kindly ask participants to contribute with € 100.- to the costs of the event (includes conference dinner).

 

Dates:

Friday, 9 September 2022, and Saturday, 10 September 2022.

 

Venue:

Universitätsclub Bonn, Konviktstraße 9, D – 53113 Bonn

 

Registration: sekretariat.weller@jura.uni-bonn.de

 

Registration Fee: € 100.-

To be transferred to the following account (you will receive confirmation of your registration only after payment was booked on this account):

Bonn Conference 2020

IBAN: DE71 5001 0517 0092 1751 07

BIC:   INGDDEFF (ING-Diba Bank)

 

Programme

Friday, 9 September 2022

 

1.30 p.m.     Registration

2 p.m.          Welcome note

Prof Dr Wulf-Henning Roth, University of Bonn, Director of the Zentrum für Europäisches Wirtschaftsrecht (ZEW)

Dr Christophe Bernasconi, Secretary General of the HCCH (video message)

2.10 p.m.      Part I: Cornerstones

Chair of Part 1: Prof Dr Matthias Weller

Keynote: Hague Conference’s Perspective and Experiences

Hans van Loon, Former Secretary General of the Hague Conference on Private International Law, The Hague

1. Scope of application

Prof Dr Xandra Kramer, Erasmus Universiteit Rotterdam, Netherlands

2. Judgments, Recognition, Enforcement

Prof Dr Wolfgang Hau, Ludwig-Maximilians-Universität Munich, Germany

Discussion

 

3.30 p.m.     Coffee Break

 

4.00 p.m.      Part II: Cornerstones (Cont.)

Chairs of Part 2: Prof Dr Nina Dethloff / Prof Dr Moritz Brinkmann

3. Jurisdictional filters

Prof Dr Pietro Franzina, Università Cattolica del Sacro Cuore Milano, Italy

4. Grounds for refusal

Prof. Dr. Marcos Dotta, Universidad de la República, Uruguay; Sub Director de Asuntos de Derecho Internacional del Ministerio de Relaciones Exteriores de Uruguay

Discussion

5. Trust management: Establishment of relations between Contracting States

João Ribeiro-Bidaoui, First Secretary of the HCCH, Netherlands

6. “The Hague System”: Relation to the HCCH 2005 Convention on Choice of Court Agreements

Prof Paul Beaumont, University of Stirling, United Kingdom

7. “The Hague System” and “the Brussels System”: Relations to the Brussels and Lugano Regime

Prof Marie-Élodie Ancel, Université Paris-Est Créteil, France

Discussion

 

7.30 p.m.               Conference Dinner

 

 

Saturday, 10 September 2022

9.00 a.m.     Part III: Prospects for the World

Chairs of Part 3: Prof Dr Moritz Brinkmann / Prof Dr Philipp Reuss

1. European Union (EU)

Andreas Stein, Head of Unit, DG JUST – A1 “Civil Justice”, European Commission

2. South European Neighbouring and EU Candidate Countries

Ass. Prof Dr Ilija Rumenov, Ss. Cyril and Methodius University, Skopje, Macedonia

3. Africa (Commonwealth / common law)

Dr. Abubakri Yekini, Lagos State University, Nigeria
Dr. Chukwuma Okoli, Postdoctoral Researcher in Private International Law at the T.M.C. Asser Institute, Netherlands

4. MERCOSUR

Dr Veronica Ruiz Abou-Nigm, Director of Internationalisation, Senior Lecturer in International Private Law, School of Law, University of Edinburgh, United Kingdom

Discussion

 

11:00 a.m.    Coffee Break

 

11:30 a.m.    Part IV: Prospects for the World (Cont.)

Chair of Part 4: Prof Dr Nina Dethloff

5. ASEAN

Adeline Chong, Associate Professor of Law, Singapore Management University, Singapore

6. China (OBOR)

Prof Zheng (Sophia) Tang, University of Newcastle, United Kingdom

Discussion

 

12:30 p.m.   Part V: Outlook

Chair of Part 5: Prof Dr Matthias Weller

7. International Commercial Arbitration

Jose Angelo Estrella-Faria, Senior Legal Officer UNCITRAL Secretariat, International Trade Law Division Office of Legal Affairs, United Nations, Former Secretary General of UNIDROIT

8. Lessons from the Genesis of the Judgments Project

Dr Ning Zhao, Senior Legal Officer, HCCH

Discussion

 

1.30 p.m.     Closing Remarks

Dr João Ribeiro-Bidaoui, First Secretary, HCCH

This post was contributed by Eirini Tsikrika, Master 2 Paris 1 Panthéon-Sorbonne, Ph.D candidate at the National and Kapodistrian University of Athens 

 

On the 25th of June the Supreme Court of Greece has rendered a provisional judgment to request preliminary ruling of the CJEU on the question of compatibility of the right to damages for breach of a choice-of-court agreement with the European ordre public. The judgment forms part of the group of decisions related to the Alexandros T case [Starlight Shipping Company v Allianz Marine & Aviation Versicherungs AG ([2014] EWCA Civ 1010)]. The case has also been reported by Apostolos Anthimos, who had already stressed out the importance of an EU level solution, see his blog posts concerning Decisions Nr. 371/2019 and Nr. 89/2020 of the Piraeus Court of Appeal respectively. Also, the procedural history of the case in England is meticulously exposed in the post of Dr. Martin Ilmer.

 

The facts of the case

The dispute arose out of a marine insurance contract, which contained a choice-of-court agreement designating the courts of London as competent. After the shipwreck of the ship, the ship owners brought proceedings against the insurers before the High Court of Justice, which were finally ended with the parties reaching an out-of-court settlement. The settlement agreement itself contained also a prorogation clause in favor of the English courts.

At a later stage, the ship owners brought action before the courts of Piraeus, alleging damages suffered due to the conduct of the other party in the English proceedings. This conduct consisted of the systematic discrediting of the seaworthiness of the ship by using false evidence.

As a response, the insurers contested the jurisdiction of the Greek courts, by invoking the prorogation clauses contained in both the insurance contract and the settlement agreement. Furthermore and while proceedings before the court of Piraeus were still pending, the insurers filed a damages claim before the High Court of Justice for breach of the choice-of-court agreements, seeking recovery for the legal costs and expenses incurred in the Greek proceedings.

Their action was fully accepted by virtue of the [2014] EWHC 3028 (Comm) decision of the High Court of Justice, as the latter acknowledged the existence of a valid, exclusive choice-of-court agreement in favor of the English jurisdiction. Subsequently, the courts of Piraeus declined jurisdiction and dismissed the claim of the ship owners on the grounds of the res judicata effect of the English judgment, while refusing the existence of grounds for non recognition of the English judgment in Greece (Dec. Nr. 899/2016, 28.3.2016, Piraeus Court of First Instance).

 

The decision of the Court of Appeal

The ship owners formed an appeal against the decision of the Court of First Instance, alleging that the latter was wrong to recognize a decision granting compensation for breach of a choice-of-court agreement, on the grounds of violation of the principle of mutual trust and of the European ordre public.  Therefore, the decision of the Court of Appeal (Dec. Nr. 465/2020, 07.03.2019, Piraeus Court of Appeal) was focused on two points:

1. The affinity of a decision recognizing the right to damages for breach of a choice-of-court agreement with the anti-suit injunctions.
2. The violation of the procedural ordre public as ground for non recognition and enforcement of such decisions, under the Articles 34 (1) and 45 (1) of the EU Regulation 44/2001 (Brussels I Regulation).

As far as it concerns the first point, the Court of Appeal refused to draw a parallel between the right to damages for breach of a choice-of-court agreement and the anti-suit injunctions, which have been explicitly banned from the system of the Brussels I Regulation by virtue of the CJEU’s Turner v. Grovit and West Tankers v. Allianz decisions (although West Tankers concerned an arbitration agreement, dealing primarily with the question of the Regulation’s scope of application). According to the Greek courts, such decisions do not aim at the international jurisdiction of a foreign court but they refer exclusively to the non-execution of the prorogation agreement-as it would be with the failure to comply with any other contractual obligations- and consequently to the existence or non-existence of contractual liability lying with the violating party. (For a different view on the question of compatibility with the principle of mutual trust, see the analysis included in the doctoral thesis of Dr. Mukarrum Ahmed).

Proceeding with the second point, the court stresses that each decision admitting violation of a choice-of-court agreement and consequently international jurisdiction of the forum prorogatum cannot but correlatively refuse international jurisdiction of the forum yet seized. Hence, that is perfectly tolerated by the European ordre public, since it doesn’t constitute an illegitimate interference in the adjudicatory jurisdiction of a foreign court but results from the mere application of the rules of the Brussels I Regulation. And the Court went on, to point out that even a false application of the rules of the Regulation could not justify the non recognition of the decision of a Member State, since a violation of the rules on international jurisdiction does not establish a violation of the procedural public order. It is clear-the court continues- that the misinterpretation or false application of the rules on international jurisdiction is overridden by the objective of the free circulation of judgments within the European judicial area.

Based on these assertions, the Court of Appeal declared lack of       jurisdiction of the Greek courts to rule on the merits of the case, confirming the decision of the Court of First Instance.

The exequatur procedure and the preliminary reference to the CJEU

In the meantime, a parallel exequatur procedure has been initiated at the insurers’ initiative, who sought to execute the English judgment in Greece. The relevant exequatur request was fully accepted, while the application for refusal of enforcement filed by the ship owners, was rejected. Finally, the ship owners seized the Supreme Court pursuant to Article 44 and Annex IV of the Regulation, so that the question shall be resolved by means of a final and irrevocable decision. The Supreme Court, requesting a preliminary ruling, addressed to the CJEU -almost verbatim- the following questions (Dec. Nr. 820/2021, 25.6.2021, Supreme Court of Greece):

1. In addition to the conventional anti-suit injunctions, are there any other decisions or orders which, even implicitly, impede the applicant’s right to judicial protection by the courts of a Member State and therefore fall under the scope of the Articles 34 (1) and 45 (1) of the Brussels I Regulation? And more specifically, can a decision granting compensation for breach of a choice-of-court agreement, be considered as being against the European public order?

 

1. In case of a negative answer to the first question, do such decisions still fall under the scope of the Articles 34 (1) and 45 (1) of the EU Regulation 44/2001, once they are considered as being against the national public policy of Greece, so that the objective of the free movement of civil judgments within the European Union c?uld be overridden in that case?

It needs to be noted that the English, Spanish courts and recently the German BGH have already acknowledged the right to damages for breach of a jurisdiction clause. Yet the CJEU had not the chance to take position on such question, since the forum derogatum was in the previous cases a non EU member-state, where the principle of mutual trust does not apply. It remains to be seen whether the solution adopted by the national courts, will be expanded to the European judicial area. A highly anticipated decision with secondary implications also on the key issue of the nature of a choice-of-court agreement.

The Hague Conference on Private International Law has engaged in a series of projects that, if successful, could provide the framework for critical aspects of trans-national litigation in the Twenty-first Century. Thus far, the work has resulted in the 2005 Hague Convention on Choice of Court Agreements and the 2019 Hague Convention on the Recognition and Enforcement of Judgments in Civil or Commercial Matters. Work now has begun to examine the need, desirability and feasibility of additional instruments in the area, with discussions of an instrument that would either require or prohibit the exercise of jurisdiction by national courts, and of an instrument that would channel parallel proceedings to a “better’ forum.

The authors of this brief article advance the view that a convention regulating jurisdiction is not a good approach, but that an instrument finding a “better” forum in parallel proceedings, constructed on an open-minded and non-dogmatic basis, is needed, desirable, and feasible.

The piece is located here.