Conflictoflaws

The 9th Journal of Private International Law Conference was due to be hosted by the Singapore Management University in 2021. Due to the ongoing pandemic, the Editors of the Journal (Professor Jonathan Harris QC of King’s College, London and Professor Paul Beaumont FRSE of the University of Stirling) and the conference organiser (Associate Professor Adeline Chong, Singapore Management University) have decided to postpone the conference to 2022 (tentatively June 2022). We will announce further details in due course.

Rome I and Rome II in Practice, a volume edited by Emmanuel Guinchard focusing on the application of the theoretically uniform rules of Rome I and Rome II by the national courts of the Member States, has recently been published by Intersentia. A true treasure trove for scholars of comparative private international law, the book features national reports from 20 Member States and the UK drafted by specialist authors as well as a review of the case law of the CJEU and extensive conclusions by the editor. Each national report contains both general remarks on the jurisprudence of the national courts as well as a structured review of the application of the two Regulations to a wide range of specific questions.

Several of the national reports have been provided by current or former editors of this blog, including Apostolos Anthimos (Greece), Matthias Weller (Austria & Germany), and Pietro Franzina (Italy).

Further information and the table of contents can be found here.

This brief note considers aspects of the recent litigation over the identification of an unspecified applicable law of an arbitration agreement having an English seat. Though the UK Supreme Court concluded that the applicable law of the arbitration agreement itself was, if unspecified, usually to be the same as that of the contract to which the arbitration agreement refers, there was an interesting division between the judges on the method of determining the applicable law of the arbitration agreement from either the law of the arbitral seat (the view favoured by the majority) or from the applicable law of the underlying contract (the view favoured by the minority). As will become clear, the author of this note finds the views of the minority to be more compelling than those of the majority.

In a simplified form the facts were that, in February 2016, a Russian power station was damaged by an internal fire. ‘Chubb’, insurer of the owners of the power station, faced a claim on its policy. In May 2019, Chubb sought to sue ‘Enka’ (a Turkish subcontractor) in Russia to recover subrogated losses. Enka objected to these Russian proceedings claiming that under the terms of its contract of engagement any such dispute was to be arbitrated via the ICC in England: in September 2019, it sought declaratory orders from the English High Court that the matter should be arbitrated in England, that the applicable law of the arbitration agreement was English, and requested an English anti-suit injunction to restrain Chubb from continuing the Russian litigation.

Neither the arbitration agreement nor the contract by which Chubb had originally engaged Enka contained a clear provision specifically and unambiguously selecting an applicable law. Though it was plain that the applicable law of the underlying contract would, by the application of the provisions of the Rome I Regulation, eventually be determined to be Russian, the applicable law of the arbitration agreement itself could not be determined as directly in this manner because Art. 1(2)(e) of the Regulation excludes arbitration agreements from its scope and leaves the matter to the default applicable law rules of the forum.

After an unsuccessful interim application in September 2019, Enka’s case came before Baker J in December 2019 in the High Court. It seems from Baker J’s judgment that Enka appeared to him to be somewhat reticent in proceeding to resolve the dispute by seeking to commence an arbitration; this, coupled with the important finding that the material facts were opposite to those that had justified judicial intervention in The Angelic Grace [1995] 1 Lloyd’s Rep 87, may explain Enka’s lack of success before the High Court which concluded that the correct forum was Russia and that there was no basis upon which it should grant an anti-suit injunction in this case.

In January 2020, Enka notified Chubb of a dispute and, by March 2020, had filed a request for an ICC arbitration in London. Enka also however appealed the decision of Baker J to the Court of Appeal and duly received its requested declaratory relief plus an anti-suit injunction. The Court of Appeal sought to clarify the means by which the applicable law of an arbitration agreement should be determined if an applicable law was not identified expressly to govern the arbitration agreement itself. The means to resolve this matter, according to the court, was that without an express choice of an applicable law for the arbitration agreement itself, the curial law of the arbitral seat should be presumed to be the applicable law of the arbitration agreement. Thus, though the applicable law of the underlying contract was seemingly Russian, the applicable law of the arbitration agreement was to be presumed to be English due to the lack of an express choice of Russian law and due to the fact of the English arbitral seat. Hence English law (seemingly wider than the Russian law on a number of important issues) would determine the scope of the matters and claims encompassed by the arbitration agreement and the extent to which they were defensible with the assistance of an English court.

In May 2020, Chubb made a final appeal to the UK Supreme Court seeking the discharge of the anti-suit injunction and opposing the conclusion that the applicable law of the arbitration agreement should be English (due to the seat of the arbitration) rather than Russian law as per the deduced applicable law of the contract to which the arbitration agreement related. The UK Supreme Court was thus presented with an opportunity to resolve the thorny question of whether in such circumstances the curial law of the arbitral seat or the applicable law of the agreement being arbitrated should be determinative of the applicable law of the arbitration agreement. Though the Supreme Court was united on the point that an express or implied choice of applicable law for the underlying contract usually determines the applicable law of the arbitration agreement, it was split three to two on the issue of how to proceed in the absence of such an express choice.

The majority of three (Lords Kerr, Hamblen and Leggatt) favoured the location of the seat as determinative in this case. This reasoning did not proceed from the strong presumption approach of the Court of Appeal (which was rejected) but rather from the conclusion that since there had been no choice of applicable law for either the contract or for the arbitration agreement, the law with the closest connection to the arbitration agreement was the curial law of the arbitral seat. As will be seen, the minority (Lords Burrows and Sales) regarded there to have been a choice of applicable law for the contract to be arbitrated and proceeded from this to determine the applicable law of the arbitration agreement.

The majority (for the benefit of non-UK readers, when there is a majority the law is to be understood to be stated on this matter by  that majority in a manner as authoritative as if there had been unanimity across all five judges) considered that there was no choice of an applicable law pertinent to Art.3 of Rome I in the underlying contract by which Enka’s services had been engaged. It is true that this contract did not contain a helpful statement drawn from drafting precedents that the contract was to be governed by any given applicable law; it did however make many references to Russian law and to specific Russian legal provisions in a manner that had disposed both Baker J and the minority in the Supreme Court to conclude that there was indeed an Art.3 choice, albeit of an implied form. This minority view was based on a different interpretation of the facts and on the Giuliano and Lagarde Report on the Convention on the law applicable to contractual obligations (OJ EU No C 282-1). The majority took the view that the absence of an express choice of applicable law for the contract must mean that the parties were unable to agree on the identity of such a law and hence ‘chose’ not to make one. The minority took the view that such a conclusion was not clear from the facts and that the terms of the contract and its references to Russian law did indicate an implied choice of Russian law. As the majority was however unconvinced on this point, they proceeded from Art.3 to Art.4 of Rome I and concluded that, in what they regarded as the absence of an express or implied choice of applicable law for the contract, Russian law was the applicable law for the contract.

For the applicable law of the arbitration agreement itself, the majority resisted the idea that on these facts their conclusion re the applicable law of the contract should also be determinative for the applicable law of the arbitration agreement. Instead, due to the Art.1(2)(e) exclusion of arbitration agreements from the scope of the Regulation, the applicable law of the arbitration agreement fell to be determined by the English common law. This required the identification of the law with which the arbitration agreement was ‘most closely connected’. Possibly reading too much into abstract notions of international arbitral practice, the majority concluded that, in this case, the applicable law of the arbitration agreement should be regarded as most closely connected to the curial law of the arbitral seat. Hence English law was the applicable law of the arbitration agreement despite the earlier conclusion that the applicable law of the contract at issue was Russian.

As indicated, the minority disagreed on the fundamental issue of whether or not there had been an Art.3 implied choice of an applicable law in the underlying contract. In a masterful dissenting judgment that is a model of logic, law and clarity, Lord Burrows, with whom Lord Sales agreed, concluded that this contract contained what for Art.3 of Rome I could be regarded as an implied choice of Russian law as ‘… clearly demonstrated by the terms of the contract or the circumstances of the case’. This determination led to the conclusion that the parties’ implied intentions as to the applicable law of the arbitration agreement were aligned determinatively with the other factors that implied Russian law as the applicable law for the contract. Russian law was (for the minority) thus the applicable law of the underlying contract and the applicable law of the ICC arbitration (that, by March, 2020 Enka had acted to commence) was to take place within the English arbitral seat in accordance its English curial law. Lord Burrows also made plain that if had he concluded that there was no implied choice of Russian law for the contract, he would still have concluded that the law of the arbitration agreement itself was Russian as he considered that the closest and most substantial connection of the arbitration agreement was with Russian law.

Though the views of the minority are of no direct legal significance at present, it is suggested that the minority’s approach to Art.3 of the Rome I Regulation was more accurate than that of the majority and, further, that the approach set out by Lord Burrows at paras 257-8 offers a more logical and pragmatic means of settling any such controversies between the law of the seat and the law of the associated contract. It is further suggested that the minority views may become relevant in later cases in which parties seek a supposed advantage connected with the identity of the applicable law of the arbitration. When such a matter will re-occur is unclear, however, though the Rome I Regulation ceases to be directly applicable in the UK on 31 December 2020, the UK plans to introduce a domestic analogue of this Regulation thereafter. It may be that a future applicant with different facts will seek to re-adjust the majority view that in the case of an unexpressed applicable law for the contract and arbitration agreement that the law of the seat of the arbitration determines the applicable law of the arbitration agreement.

As for the anti-suit injunction, it will surprise few that the attitude of the Court of Appeal was broadly echoed by the Supreme Court albeit in a more nuanced form. The Supreme Court clarified that there was no compelling reason to refuse to consider issuing an anti-suit injunction to any arbitral party who an English judge (or his successors on any appeal) has concluded can benefit from such relief. They clarified further that the issuance of an anti-suit injunction in such circumstances does not require that the selected arbitral seat is English. The anti-suit injunction was re-instated to restrain Chubb’s involvement in the Russian litigation proceedings and to protect the belatedly commenced ICC arbitration.

 

You are kindly invited to the webinar “HOPINEU Lecture Series: Covid-19 & Business Interruption (BI) Insurance” on 27 November 2020 at 4:00pm (GMT+3).

This event is supported by the Erasmus+ Programme of the European Union and organised as part of the Jean Monnet Module project “Harmonisation of the Principles of Insurance Law in Europe” (HOPINEU) run at Koç University.

For updates on this Jean Monnet Module, please follow @hopineu1 #HOPINEU on Twitter.

 

 

Recent Developments in Turkish Family Law, edited by Prof. dr. Fatih Ibili and Prof. dr. Zeynep Derya Tarman is now available.

This book gives an overview of recent developments in Turkish family law for legal practitioners in Europe. Both the private international law and the substantive law aspects of Turkish family law is explained, with a special focus on the recognition and enforcement of foreign divorce decisions, the role of fault in divorce proceedings, the dissolution of the matrimonial regime of participation in the acquisition, the surname of women and children and joint custody after divorce. It contains up-to-date information based on recent amendments in legislation and recent case law of the Court of Cassation and the Constitutional Court.

 

You are kindly invited for the conference on “Towards a global cooperation framework for temporary and circular migration” by Hans van Loon (Former Secretary General of the Hague Conference on Private International Law) on November 18, 2020, Wednesday between 12.30-13.30 (GMT+3). The conference is organised by Bilkent University as a part of the Talks on Migration Series within the Jean Monnet Module on European and International Migration Law. It will be held via zoom, free of charge.

Click here to view the event poster

Join Zoom Meeting
https://zoom.us/j/96734230354
Meeting ID: 967 3423 0354

You are kindly invited to a series of six online expert seminars on the Brussels II ter Regulation (EU Regulation 2019/1111). This new Regulation on jurisdiction, recognition and enforcement in matrimonial matters and in matters of parental responsibility will only become fully applicable on 1 August 2022. Time enough, it would seem, but with its 105 articles, 98 recitals and ten annexes, the organisers considered it not too early to start preparing. Cristina González Beilfuss (University of Barcelona), Laura Carpaneto (University of Genoa), Thalia Kruger (University of Antwerp), Ilaria Pretelli (Swiss Institute of Comparative Law) and Mirela Župan (University of Osijek) will be presenting their first thoughts on the Regulation, its new enforcement regime, international parental child abduction, child protection, judicial and administrative cooperation, provisional measures and parallel proceedings. They have invited academics and practitioners to react to their thoughts and provided time for discussion. 

The seminars will be conducted on Zoom, free of charge. They are aimed at practitioners, civil servants and academics alike. Each will last 1 hour and 15 minutes.  

Please enrol if you wish to join. You will notice that the form allows you to enrol for each of the seminars separately. Only persons enrolled will be provided with the Zoom link for the event.  

Programme:

Session I: 25 November 2020

12.30 – 13.45  New Challenges under Brussels IIter

Prof. Cristina González Beilfuss, University of Barcelona

Dr. Máire Ní Shúilleabháin, University College Dublin

Mr. Michael Wilderspin, legal service of the European Commission

 

Session II: 25 November 2020

14.00 – 15.15  Enforcement

Dr. Ilaria Pretelli, Swiss Institute of Comparative Law Lausanne

Prof. Vesna Lazic, T.M.C. Asser Institute Den Haag

Advocate Véronique Chauveau, Véronique Chauveau & Associés, Paris

 

Session III: 26 November 2020

 12.30 – 13.45 Child Abduction

Prof. Thalia Kruger, University of Antwerp

Dr. Katarina Trimmings, University of Aberdeen

Advocate Kamila Zagorska, NWS-MCB Prawo Rodzinne, Warsaw

 

Session IV: 26 November 2020

14.00 – 15.15 Children under Brussels IIter

Prof. Laura Carpaneto, University of Genova

Prof. Giacomo Biagioni, University of Cagliari

Mr. Robert Fucik, Central Authority Austria

 

Session V: 3 December 2020

12.30 – 14.00  Cooperation between central authorities and between judges

Prof. Mirela Župan, J. J. University Strossmayer of Osijek

Dr. Gian Paolo Romano, University of Genève

Mr. Christian Hohn, Federal Office of Justice – Central Authority Germany

Stephan Auerbach, Médiateur FSM/SDM, assermenté par l’Etat de Genève

 

Session VI: 17 December 2020

12.30 – 13.45  Provisional measures, transfer, lis pendens 

Dr. Ilaria Pretelli, Swiss Institute of Comparative Law Lausanne & Prof. Mirela Župan, J. J. University Strossmayer of Osijek

Prof. Costanza Honorati, University of Milano-Bicocca

Judge Myriam de Hemptinne, Family Judge at the Court of Appeal of Brussels, seconded to the Permanent Bureau of the Hague Conference on Private International Law and Belgian Network judge in family matters (EJN and IHNJ)

 

Two recent rulings of the Supreme Court of the Hashemite Kingdom of Jordan refused recognition and enforcement of  German and Swiss judgments on maintenance on grounds of no reciprocity.

I. First case: No reciprocity with Germany

1. The facts

The applicant was the wife of the respondent, both Jordanian nationals. She filed several applications before German courts in Stuttgart, and obtained a number of final judgments ordering payments for alimony to her benefit. Due to non payment by the husband, she filed an application for the recognition and enforcement of the German judgments in Jordan.  The Court of first instance declared the judgments enforceable in Jordan in 2009. The husband appealed. The Amman Court of Appeal issued its decision January 2015, revoking the appealed decision. The wife filed a second appeal (cassation).

2. The ruling of the Supreme Court of Cassation

Initially, the Supreme Court underlined the lack of a judicial cooperation agreement between the Hashemite Kingdom of Jordan and Germany, which leads to the application of the Jordan law on the recognition and enforcement of foreign judgments. The Supreme Court stressed out that for the purposes of a foreign judgment being executed in Jordan, the conditions stipulated in the Law on Execution of Foreign Judgments No. (8) of 1952 must be met. It then referred to the provisions of Article (7/2) of the law, which states that the court may reject the application requesting the execution of a judgment issued by a court of any country whose law does not allow the recognition of judgments issued by the courts of the Hashemite Kingdom of Jordan.

The Supreme Court refers then to the order of the Amman Court of Appeal to the applicant, by virtue of which the latter was invited to provide evidence whether German laws allow the recognition of judgments issued by Jordanian courts. Based on the letter received by the Ministry of Justice in December 2014, the Court of Appeal concluded that there is no reciprocity between Jordan and Germany to recognize judgments issued by their courts.

On the grounds aforementioned, the Supreme Court dismissed the cassation and confirmed the ruling of the Amman Court of Appeal [Jordan Court of Cassation, the Hashemite Kingdom of Jordan, Ruling issued at 9/2 /2020].

II. Second case – No reciprocity with Switzerland

1. The facts

The parties were a Romanian wife (applicant in Jordan and claimant in Switzerland) and a Jordanian husband (defendant in Switzerland and appellant in Jordan). The applicant obtained a set of decisions against the respondent, including the right of guardianship over the child resulting from their marriage, and maintenance. In 2019, the wife filed an application for the recognition and enforcement of a number of judgments issued by Zurich courts. Both the North Amman Court of First Instance and the Amman Court of Appeal allowed the recognition of the Swiss judgments. The husband lodged a second appeal in March 2020, invoking a number of grounds for cassation. The focus is on the 9th and 10th ground, namely the following:

a.       The instance courts erred and violated the text of Article 7/2 of the Foreign Judgment Execution Law by not responding to his request, that Swiss courts do not recognize judgments issued by Jordanian courts.

b.      The Court of Appeal was mistaken by not allowing evidence to be presented, demonstrating that Swiss courts do not accept rulings issued by Jordanian courts

2. The ruling of the Supreme Court of Cassation

In response to the above, the Supreme Court stated that for the purposes of the foreign judgment being executed within the Kingdom, it is imperative that the recognition meets the conditions stipulated in the Law on Execution of Foreign Judgments No. (8) of 1952. By referring to the provisions of Article (7/2) of the same law, the Supreme Court reproduced the wording of the provision, namely, that the court may also reject the application requesting the execution of a judgment issued by one of the courts of any country whose law does not permit the recognition of judgments issued by the courts of the Hashemite Kingdom of Jordan. What is learned from this text, the Supreme Court continues, is that reciprocity must be available, and the ruling does not violate public order.

The Supreme Court granted the appeal with the following reasoning:

• the Court of Appeal omitted to examine whether there was reciprocity between Jordan and Switzerland to mutually recognize judgments issued by their courts;
• it also failed to address the Ministry of Justice to clarify whether there was reciprocity, and that the judgments issued by the Jordanian courts are recognized by the courts of Switzerland, and then to evaluate the respective evidence.

Based on the above, the Supreme Court decided to refuse recognition of the Swiss judgments [Jordan Court of Cassation, the Hashemite Kingdom of Jordan, Ruling issued at 21/9/2020].

By Stephen G.A. Pitel, Western University

The Supreme Court of Canada has granted leave in H.M.B. Holdings Limited v Attorney General of Antigua and Barbuda.  Information about the appeal is available here. The decision being appealed, rendered by the Court of Appeal for Ontario, is available here.  In the usual course the appeal will be heard in the late spring or early fall of 2021.  The grant of leave is notable because Canada’s top court only hears a small handful of conflict of laws cases in any given year.

In 2014 the Privy Council rendered a judgment in favour of HMB against Antigua and Barbuda for over US$35 million including interest.  In 2016 HMB sued at common law to have the Privy Council judgment recognized and enforced in British Columbia.  Antigua and Barbuda did not defend and default judgment was granted in 2017.  HMB then sought to register the British Columbia decision (not the Privy Council decision) under Ontario’s statutory scheme for the registration of judgments of other Canadian common law provinces.  This required the Ontario courts to engage in a process of statutory interpretation, with one of the central issues being whether the scheme applied to the recognition and enforcement judgment or only to what have been called “original judgments”.

The procedure used by HMB for getting the Privy Council decision enforced in Ontario might seem odd.  The Ontario application judge referred to the process as involving a “ricochet judgment”.  As to why HMB did not bring a common law action on the Privy Council judgment in Ontario, as it had done in British Columbia, there appears to be some issue that such an action could be outside the applicable limitation period.  British Columbia (10 years) has a longer limitation period than Ontario (2 years) for common law actions to enforce foreign judgments.

The Ontario courts held that the scheme did not apply to the British Columbia judgment or, in the alternative, if it did, Antigua and Barbuda were entitled to resist the registration on the basis that it was not “carrying on business” in British Columbia (which is a defence to registration under the Ontario scheme).  The majority of the Court of Appeal for Ontario, perhaps proceeding in an inverted analytical order, held that because Antigua and Barbuda was not carrying on business in British Columbia it did not need to address the (more fundamental) issue of the scope of the scheme.  The dissenting judge held Antigua and Barbuda was carrying on business in British Columbia and so did address the scope of the scheme, finding it did apply to a recognition and enforcement judgment.

In my view, it is unfortunate that all of the Ontario judges focused quite particularly on the language of various provisions of the statutory scheme without greater consideration of the underlying policy question of whether the scheme, as a whole, truly was meant to allow knock-on or ricochet enforcement.  Ontario’s scheme is explicitly limited to allowing registration of judgments of other Canadian common law provinces.  It strikes me as fundamentally wrong to interpret this as covering all foreign judgments those other provinces themselves choose to enforce.  Nevertheless, it will be interesting to see whether the Supreme Court of Canada resolves the appeal solely on the basis of the intended scope of the registration scheme or instead devotes significant attention to addressing the meaning of “carrying on business”.

By Jack Wass (Stout Street Chambers, Wellington, New Zealand)

 

In the recent decision of Hebei Huaneng Industrial Development Co Ltd v Shi,[1] the High Court of New Zealand was faced with an argument that a money judgment of the Higher People’s Court of Hebei should not be enforced because the courts of China are not independent of the political arms of government and therefore do not qualify as “courts” for the purpose of New Zealand’s rules on the enforcement of foreign judgments.

The High Court rejected that argument: complaints of political interference may be relevant  if a judgment debtor can demonstrate a failure to accord natural justice in the individual case, or another recognized defence to enforcement, but there was no basis for concluding that Chinese courts were not courts at all.

As the court noted, complaints about the independence or impartiality of foreign courts might arise in two circumstances. Where the court was deciding whether to decline jurisdiction in favour of a foreign court, it would treat allegations that justice could not be obtained in the foreign jurisdiction with great wariness and caution.[2] Where the issue arose on an application to enforce a foreign judgment, the enforcement court has the benefit of seeing what actually happened in the foreign proceeding, and can assess whether the standards of natural justice in particular were met. Simply refusing to recognize an entire foreign court system would give rise to serious practical problems,[3] as well as risk violating Cardozo J’s famous dictum that courts “are not so provincial as to say that every solution of a problem is wrong because we deal with it otherwise at home.”[4]

The judge found that Chinese courts were distinct from the legislative and administrative bodies of the state, and that although there was evidence to suggest that Chinese judges sometimes felt the need to meet the expectations of the local people’s congress or branch of the Communist Party, this did not justify refusing to recognize the court system as a whole. In a commercial case resolved according to recognizably judicial processes, where there was no suggestion of actual political interference, the judgment could be recognized.

[1] Hebei Huaneng Industrial Development Co Ltd v Shi [2020] NZHC 2992. The decision arose on an application to stay or dismiss the enforcement proceeding at the jurisdictional stage.

[2] Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804.

[3] The judge noted that the House of Lords had rejected the argument that it should not recognize the courts of the German Democratic Republic (Carl Zeiss Stiftung v Rayner &  Keeler Ltd (No 2) [1967] 1 AC 853), and the Second Circuit Court of Appeals was not persuaded that justice could not be done in Venezuela (Blanco v Banco Industrial de Venezuela 997 F 2d 974 (2nd Cir 1993)). By contrast, a Liberian judgment was refused recognition in Bridgeway Corp v Citibank 45 F Supp 2d 276 (SDNY 1999), 201 F 3d 134 (2nd Cir 2000) where there was effectively no functioning court system.

[4] Loucks v Standard Oil Co 224 NY 99 (1918).

On 11 November 2020, the ECJ decided in the case of Ellmes Property Services, C-433/19, on Article 24(1) and Article 7(1)(a) of the Brussels I bis Regulation (for our post on AG Szpunar’s Opinion on the case see here). The Court held that:

“1.      Point 1 of Article 24 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that an action by which a co-owner of immovable property seeks to prohibit another co-owner of that property from carrying out changes, arbitrarily and without the consent of the other co-owners, to the designated use of his or her property subject to co-ownership, as provided for in a co-ownership agreement, must be regarded as constituting an action ‘which has as its object rights in rem in immovable property’ within the meaning of that provision, provided that that designated use may be relied on not only against the co-owners of that property, but also erga omnes, which it is for the referring court to verify.

2.      Point 1(a) of Article 7 of Regulation No 1215/2012 must be interpreted as meaning that, where the designated use of immovable property subject to co-ownership provided for by a co-ownership agreement cannot be relied upon erga omnes, an action by which a co-owner of immovable property seeks to prohibit another co-owner of that property from carrying out changes, arbitrarily and without the consent of the other co-owners, to that designated use must be regarded as constituting an action ‘in matters relating to a contract’, within the meaning of that provision. Subject to verification by the referring court, the place of performance of the obligation on which that action is based is the place where the property is situated.”

The full text of the judgment is here.

The case

In a recent decision deposited 5 November 2020 (ordinanza 24632/20), the Italian Supreme Court has returned on the competent court in actions by passengers against air carriers following cancellation of flights.

The case is quite straightforward and can be summarized as follows: (i) passengers used a travel agency in Castello (province of Perugia) to buy EasyJet flight tickets; (ii) the Rome(Fiumicino)-Copenhagen fight was cancelled without any prior information being given in advance; (iii) passengers had to buy a different flight from another air carrier to Hamburg, and travel by taxi to their final destination – thus sustaining additional sensitive costs.

Before the Tribunal (Tribunale) in Perugia, the passengers started proceedings against the air carrier asking for both the standardized lump-sum compensation they were entitled under the Air Passenger Rights Regulation following the cancellation of the flight (art. 5 and art. 7), and for the additional damages sustained due to the cancellation.

 

 

The relevant legal framework: an overview

Passengers requested Italian courts to adjudicate two different set of claims, each of which has its own specific legal basis.

One the one side, the specific right for standardized lump-sum compensation in case of cancellation of flight is established by the EU Air Passenger Rights Regulation; on the other side, the additional damage for which they sought compensation did fall within the scope of application of the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air.

As it has already been clarified by the Court of Justice of the European Union (see ex multis Case C-464/18, para. 24), the Air Passenger Rights Regulation entails no rule on jurisdiction – with the consequence that this is entirely governed by the Brussels I bis Regulation. On the contrary, to the extent the Brussels I bis Regulation and the 1999 Montreal Convention overlap in their respective scope of application, the latter is to be granted primacy due to its lex special character (under the lex specialis principle). Hence, the questions of jurisdiction for the two claims have to be addressed separately and autonomously one from the other – each in light of the respective relevant instrument (see CJEU Case C-213/18, para. 44).

 

 

The decision of the Italian court

Focusing on international civil procedure aspects of the decision, claimants did start one single proceedings against the air carrier before the Tribunale in Perugia, the place where the flight ticket was bought though a travel agency.

The air carrier contested this jurisdiction and competence (as the value of individual claims rather than the value of aggregated claims pointed to the competence rationae valoris of the Giudice di pace – Justice of the peace – of Castello in the province of Perugia) up to the Supreme court invoking the Brussels I bis Regulation.

The air carrier supported the view that the competent courts where either those having territorial competence over the airport of departure (i.e. the court in Civitavecchia, under art. 7, Brussels I bis) or arrival (in Copenhagen, always under art. 7 Brussels I bis; cf CJEU Case C-204/08), or courts in London (under art. 4 Brussels I bis).

The passengers insisted on their position invoking the 1999 Montreal Convention assuming that proceedings were brought at the “place of business through which the contract has been made”, one of the heads of jurisdiction under art. 33 of the Convention. Moreover, the passengers argued that the Convention only contained rules on international jurisdiction and not on territorial competence, this aspect being entirely governed by internal civil procedure.

 

a. On UK Companies

As a preliminary matter, the Italian Supreme court acknowledges ‘Brexit’ and the Withdrawal Agreement, yet proceeds without sensitive problems in the evaluation and application of EU law as the transition period has not expired at the time of the decision according to artt. 126 and 127 of the agreement (point 1, reasoning in law).

 

b. Autonomous actions: the proper place for starting proceedings

Consistently with previous case law (CJEU Case C-213/18, para. 44), the Italian Supreme court concludes for the autonomy of the legal actions brought before the courts, arguing that jurisdiction has to be autonomously addressed (point 3, reasoning in law).

Actions based on lump-sum standardized compensation in cases of cancellation of flights deriving from the Air Passenger Rights Regulation do entirely and exclusively fall under the scope of application of the Brussels I bis Regulation – art. 7 being applicable. In this case, the Italian territorial competent court is the one having territorial jurisdiction over the airport of departure – (Rome Fiumicino), i.e. the Giudice di pace of Civitavecchia.

Actions for additional damages connected to long delays or cancellation of flights, the right for compensation deriving from the Montreal Convention, remain possible before the courts identified under art. 33 of the 1999 Montreal Convention (point 3, reasoning in law).

Here, two elements are of particular interests.

In the first place, the Italian Supreme court apparently changes its previous understanding of the Convention as it concedes that rules on jurisdiction therein enshrined are not merely rules on international jurisdiction, but are also rules on territorial competence (point 6, reasoning in law; consistent with Case C-213/18; overrules Cassazione 3561/2020 where territorial competence was determined according to domestic law).

In the second place, the court dwells – in light of domestic law – on the notion of “place of business through which the contract has been made” ex art. 33 of the Convention, which grounds a territorial competence (point 6.3, reasoning in law). Distinguishing its decision from cases where passengers directly buy online tickets from the air carriers, it is the court’s belief that a travel agency operates under IATA Sales Agency Agreements, hence as an authorized “representative” of the air carrier business for the purposes of the provision at hand. According to the court, the fact that a travel agency may be considered as a ticket office of the air carrier for the purposes of art. 33 of the 1999 Montreal Convention is nothing more than a praesumptio hominis; yet such a circumstance was not challenged by the air carrier and thus, under Italian law, considered proven and final. This, with the consequence that competence for damages related to the cancellation of the flight, other than the payment of compensation under the Air Passenger Rights Regulation, is reserved to the Justice of the peace (giudice di pace) competent rationae valoris of the place where the travel agency (in Castello, near Perugia) is located, as this place is the “place of business through which the contract has been made”.

 

c. Connected actions

The Italian Supreme court acknowledges the impracticalities that may follow from the severability of closely related actions grounded on same facts (point 6.3, reasoning in law), in particular where compensation for damages granted from one court under the 1999 Montreal Convention must deduct compensation already granted by another court under the Air Passenger Rights Regulation. In this sense, in fine the court mentions the possibility to refer to art. 30 Brussels I bis Regulation, presumably having in mind also art. 30(2).

 

 

Open questions

Whereas the decision of the Italian Supreme court largely follows indications of the Court of Justice of the European Union, some passages appear to leave room for discussion.

Firstly, even though correctly primacy to the 1999 Montreal Convention over the Brussels I bis Regulation is granted, the proper disconnection clause is not analyzed at all in the decision. In a number of previous decisions, the court did address the disconnection clause, arguing in favor of the lex specialis invoking art. 71 Brussels I bis Regulation – a provision that grants priority to international conventions in specific matters to which Member States are party to (cf Cass 18257/2019, and Cass 3561/2020). However, given that the EU has become part to the 1999 Montreal Convention by way of a Council Decision in 2001, other courts have invoked art. 67 to solve the coordination issue – as this provision is destined to govern the relationship between Brussels I bis and rules on jurisdiction contained in other “EU instruments” (cf LG Bremen, 05.06.2015 – 3 S 315/14). A position, the latter, that appears consistent with art. 216(2) TFEU, according to which “Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States”. In this sense, the Italian Supreme court could have dwelled more on the proper non-affect clause to be applied when it comes to the relationships between the Brussels I bis Regulation and the 1999 Montreal Convention.

Secondly, the final remarks of the Italian Supreme court on related actions in the Brussels I bis also should impose a moment of reflection. In the case at hand there were no parallel proceedings, so the “indications” of the court were nothing more than that.

However, recourse to the rules on related actions of the Brussels I bis Regulation should be allowed only so far no specific rule is contained in the lex specialis. Again, an evaluation on the existence of such rules is completely missing in the decision.

More importantly, even though it is generally accepted that Brussels I bis rules on coordination on proceedings can be subject to a somewhat “extensive” interpretation (as current art. 30 on related actions has been deemed applicable regardless of whether courts ground their jurisdiction on domestic law or on the regulation itself – cf Case C-351/89, para. 14), it remains that art. 30 refers to parallel proceedings pending “in the courts of different Member States”. A circumstance that would not occur where proceedings are pending before two courts of the same Member State, as the one dealt with by the Italian supreme court in the case at hand.

 

 

The present research is conducted in the framework of the En2Bria project (Enhancing Enforcement under Brussels Ia – EN2BRIa, Project funded by the European Union Justice Programme 2014-2020, JUST-JCOO-AG-2018 JUST 831598). The content of the Brussels Ia – EN2BRIa, Project, and its deliverables, amongst which this webpage, represents the views of the author only and is his/her sole responsibility. The European Commission does not accept any responsibility for use that may be made of the information it contains.

 

On Friday, November 13, at 11:oo Brasilia time (i.e. 15:00 in Hamburg and 9:oo a.m. in New York)  this book will be launched via zoom. The book emerges from a 2019 conference in Brasilia, which brought together scholars from several countries, and in several languages (Portuguese, Spanish, English). It demonstrates the vibrancy of private international law in Latin America.
Sign up for the event here.

This Thursday 12 and Friday 13 November, the 2020 International Conference of the Korean Judicial Policy Research Institute (JPRI) will take place. The conference is co-organised by the JPRI, the Hague Conference on Private International Law (HCCH), the International Institute for the Unification of Private Law (UNIDROIT), and the United Nations Commission on International Trade Law (UNCITRAL).

This year’s conference theme is “International Commercial Litigation: Recent Developments and Future Challenges”, with sessions spanning a variety of topics, including international commercial contracts, secured transactions and insolvency, recognition and enforcement of foreign judgments, e-litigation and e-service, and the enforcement of arbitral awards and mediation settlement agreements. The full programme is available here.

The sessions will be streamed on the JPRI YouTube Channel.

This post is published by the Permanent Bureau of the Hague Conference of Private International Law (HCCH).

 

I. Introduction

In my last blog post, I made mention of a Nigerian Court of Appeal decision that applied the principle of contract law exclusively to a foreign jurisdiction clause.[1] In that case, applying the principles of Nigerian contract law, the Nigerian Court of Appeal held that the alleged choice of court agreement in favour of Benin Republic was unenforceable because the terms were not clear and unambiguous in conferring jurisdiction on a foreign forum.[2]

The purpose of this blog post is to analyse a more recent Nigerian Court of Appeal decision where the court gave full contractual effect to the parties’ choice of court agreement by strictly enforcing a Dubai choice of court agreement.[3]

II. Facts

Damac Star Properties LLC v Profitel Limited (“Damac”)[4] was the fall out of an investment introduced to the 1st plaintiff/respondent by the 2nd respondent allegedly on behalf of the defendant/appellant wherein the 1st plaintiff/respondent paid a deposit of 350,000.00 US Dollars for 9 apartments in Dubai and being 20% of the total cost of the apartments. The contract between the 1st plaintiff/respondent and defendant/appellant contained an exclusive choice of court clause in favour of Dubai. There was a dispute between the parties as to some of the terms of the contract. This resulted in the defendant/appellant selling the apartments to another buyer. The 1st plaintiff/respondent requested for a refund of the deposit that was paid to the defendant/appellant, but its request was declined. As a result of this, the 1st plaintiff/respondent initiated a suit for summary judgment in High Court, Federal Capital Territory, Nigeria, against the defendant/appellant, and got an order to serve the defendant/appellant through the 2nd respondent, its alleged agent in Nigeria. At this stage, the defendant/appellant did not appear and was unrepresented in proceedings at the High Court. The High Court proceeded to hear the suit and entered judgment against the defendant/appellant with an order to refund the sum of 350,000.00 US Dollars with 10% interest from date of judgment till the judgment sum was fully liquidated. The defendant/appellant applied to the High Court to set aside the judgment, but the court dismissed the application.

III. Decision

The defendant/appellant appealed to the Court of Appeal. The Court of Appeal unanimously allowed the appeal. The Court of Appeal held on the basis of the exclusive choice of court agreement in favour of Dubai – which it regarded as valid – the lower court should not have assumed jurisdiction.

IV. Judicial Statements in support of Damac

As stated in my last blog post, there is now a trend among appellate Courts in Nigeria (Court of Appeal and Supreme Court) to give choice of court agreements a contractual function. Damac Star Properties LLC (supra) is one of the cases where the Court of Appeal simply gives a choice of court agreement a contractual function without considering whether the choice of court agreement ousted the jurisdiction of the Nigerian courts, or whether Nigeria was the forum conveneins for the action.[5] This point is important, as it appears that there is now some movement in Nigerian jurisprudence towards giving choice of court agreements a contractual function. Given that Nigeria is a common law jurisdiction, it is worth quoting statements from some Nigerian Supreme Court and Court of Appeal judges that have given a choice of court agreements a contractual function.

Nnamani JSC opined that: “I think that in the interest of international commercial relations courts have to be wary about departing from fora chosen by parties in their contract. There ought to be very compelling circumstances to justify such a departure.”[6]

Tobi JSC observed: “The bill of lading contains the contractual terms [foreign jurisdiction clause] between the parties and therefore binding on the parties. Parties are bound by the conditions and terms in a contract they freely enter into… The meaning to be placed on a contract is that which is the plain, clear and obvious result of the terms used… When construing documents in dispute between two parties, the proper course is to discover the intention or contemplation of the parties and not to import into the contract ideas not potent on the face of the document… Where there is a contract regulating any arrangement between the parties, the main duty of the court is to interpret that contract and to give effect to the wishes of the parties as expressed in the contract document… The question is not what the parties to the documents may have intended to do by entering into that document, but what is the meaning of the word used in the document… While a contract must be strictly construed in accordance with the well-known rules of construction, such strict construction cannot be aground for departing from the terms which had been agreed by both parties to the contract… It is the law that parties to an agreement retain the commercial freedom to determine their own terms. No other person. Not even the court, can determine the terms of contract between parties thereto. The duty of the court is to strictly interpret the terms of the agreement on its clear wordings… Finally, it is not the function of a court of law either to make agreements for the parties or to change their agreements as made.”[7]

In Conoil Plc v Vitol SA,[8] the Supreme Court Justices were unanimous on the contractual effect of a choice of court agreement. Nweze JSC in his leading judgment stated that: “In all, the truth remains that if parties, enter into an agreement, they are bound by its terms.”[9] Okoro JSC concurred that: “The law is quite’ settled that parties are bound by the contract they voluntarily enter into and cannot act outside the terms and conditions contained in the said contract. When parties enter into a contract, they should be careful about the terms they incorporate into the contract because the law will hold them bound by those terms. No party will be allowed to read into the contract terms on which there has been no agreement. Any of the parties who does so violates the terms of that contract…. Having agreed that any dispute arising from the contract should be settled at the English court, the appellant was bound by the terms of the contract.”[10] Eko JSC also concurred that: “Where parties, fully cognizant of their rights, voluntarily elect and nominate the forum for the resolution of any dispute arising from their contract, with international flavour as the instant, the courts always respect and defer to their mutual wishes and intention. The courts only need to be satisfied that, in their freedom of contract, the parties negotiated and agreed freely to subject their dispute to the laws and country of their choice.”[11]

Owoade JCA held that: “…it is pertinent to observe that as a general rule in the relationship between national law and international Agreements, freely negotiated private international agreement, unsullied by fraud, undue influence or overwhelming bargaining power would be given full effect. This means that, where such contract provides for a choice of forum, such clause would be upheld unless upholding it would be contrary to statute or public policy of the forum in which the suit is brought.”[12]

In Beaumont Resources Ltd v DWC Drilling Ltd,[13] the Court of Appeal Justices were unanimous on the contractual effect of a choice of court agreement. Otisi JCA held that: “…it is settled that, in the absence of fraud, misrepresentation and illegality, parties to an agreement or contract are bound by the terms and conditions of the contract they signed… It is also well established that the Court cannot make contracts for the parties, rewrite the contract or go outside the express terms of the contract to enforce it…”[14] Sankey JCA concurred that: “The Court of law, on the other hand, must always respect the sanctity of the agreement of the parties – the role of the Court is to pronounce on the wishes of the parties and not to make a contract for them or to rewrite the one they have already made for themselves. The judicial attitude or disposition of the Court to terms of agreement freely entered into by parties to contract is that the Court will implement fully the intention of the contracting parties. This is anchored on the reasoning that where the terms of a contract are clear and unambiguous, the duty of the Court is to give effect to them and on no account should it re-write the contract for the parties. In the absence of fraud, duress or misrepresentation, the parties are bound to the contract they freely entered into.”[15]

The above judicial statements are replete with applying the principles of Nigerian contract law to the terms of a choice of court agreement. In essence, parties are bound by the clear and unambiguous terms of a choice of court agreement, which the Nigerian court will strictly enforce.  On this score, Damac is on strong footing and unassailable.

 V. Judicial decisions that might be against Damac

Some of the above stated judicial cases, though giving a choice of court agreement a contractual function also considered whether such agreements oust the jurisdiction of the Nigerian court, and whether Nigeria was the more appropriate forum to resolve such disputes despite the presence of a choice of court agreement. Damac is one of the few Court of Appeal cases that exclusively give a choice of court agreement a contractual function without a consideration of whether it is an ouster clause or the Nigerian Court is the forum conveniens.[16]

           A. Ouster Clause

In the early case of Ventujol v Compagnie Francaise De L ’ Afrique Occidentale,[17] Ames J held that in a contract of employment which was entered into in France to be performed in Nigeria, where the defendant also had agents (in Nigeria), the clause for submission of disputes to a Tribunal de Commerce de Marseilles (a French Court at that time) was an agreement to oust the jurisdiction of the court and of no effect. Similarly, in Allied Trading Company Ltd v China Ocean Shipping Line,[18] the plaintiff sought to recover damages for non-delivery of goods. The defendant entered an unconditional appearance, admitted the goods were lost, and denied liability on the grounds, inter alia, that the court had no jurisdiction since the parties had agreed that all disputes arising under or in connection with the bill of lading should be determined in the People’s Republic of China. It was held, inter alia, that this provision purported to oust the jurisdiction of the Nigerian court entirely and was therefore contrary to public policy. In Sonnar (Nig) Ltd v Partenreedri MS Norwind[19]  Oputa JSC opined  that as a matter of public policy Nigerian Courts “should not be too eager to divest themselves of jurisdiction conferred on them by the Constitution and by other laws simply because parties in their private contracts chose a foreign forum … Courts guard rather jealously their jurisdiction and even where there is an ouster clause of that jurisdiction by Statute it should be by clear and unequivocal words. If that is so, as is indeed it is, how much less can parties by their private acts remove the jurisdiction properly and legally vested in our Courts? Our courts should be in charge of their own proceedings. When it is said that parties make their own contracts and that the courts will only give effect to their intention as expressed in and by the contract, that should generally be understood to mean and imply a contract which does not rob the Court of its jurisdiction in favour of another foreign forum.”[20]

If the above judicial postulations were given literal effect by the Court of Appeal in Damac the exclusive choice of court agreement in favour of Dubai would be regarded as null and void. In effect, treating a choice of court agreement as an ouster clause has the effect of making a choice of court agreement illegal, unlawful or at best unenforceable. Recently, Nweze JSC has interpreted the concept of ouster clause to the effect “that our courts will only interrogate contracts which are designed to rob Nigerian courts of their jurisdiction in favour of foreign fora or where, by their acts, they are minded to remove the jurisdiction, properly and legally, vested in Nigerian courts.”[21] I will interpret Nweze JSC’s statement to mean that where a Nigerian court as a matter of state interest is exclusively vested by statute, the constitution or common law with a subject matter, then no foreign court can have jurisdiction in such matters.[22] Under common law, a clear example of this is a matter relating to immovable property, where the Nigerian court has exclusive jurisdiction. So the implication of this is that the concept of ouster clause has very limited effect in Nigerian jurisprudence. In effect, the choice of court agreement in Damac will likely not be regarded as an ouster clause by the Nigerian Supreme Court.

        B. Brandon Tests

Damac did not consider the application of the Brandon tests in Nigerian jurisprudence. The Brandon test is a form of application of forum non conveniens to choice of court agreements.

Brandon J, in The Eleftheria,[23] delivered a brilliant decision on this subject. The decision provided comprehensive guidelines that the English court should take into account in deciding whether to give effect to a foreign jurisdiction clause. This is often referred to as “the Brandon test” in Nigerian jurisprudence. Nigerian courts have regularly referred to the Brandon test and utilised it with approval in decided cases.[24] The test is stated hereunder as follows (as it has been referred to and applied) in the Nigerian context: 1. Where plaintiffs sue in Nigeria in breach of an agreement to refer disputes to a foreign court, and the defendants apply for a stay, the Nigerian court, assuming the claim to be otherwise within the jurisdiction is not bound to grant a stay but has a discretion whether to do so or not. 2. The discretion should be exercised by granting a stay unless strong cause for not doing it is shown. 3. The burden of proving such strong cause is on the plaintiffs. 4. In exercising its discretion the court should take account of all the circumstances of the particular case. 5. In particular, but without prejudice to (4), the following matters where they arise, may be properly regarded: (a) In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the Nigerian and foreign courts. (b) Whether the law of the foreign court applies and, if so, whether it differs from Nigerian law in any material respects. (c) With what country either party is connected and how closely (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiff s would be prejudiced by having to sue in the foreign country because they would (i) be deprived of security for that claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in Nigeria; or (iv) for political, racial, religious, or other reasons be unlikely to get a fair trial (v) the grant of a stay would amount to permanently denying the plaintiff any redress.

The only reported cases where the plaintiff(s) have successfully relied on the Brandon test is where their claim is statute barred in the forum chosen by the parties.[25] Indeed, the burden is on the plaintiff to show strong cause why Nigerian proceedings should be stayed in breach of a choice of court agreement; if not Nigerian courts will give effect to the choice of court agreement.[26]

In Damac, the plaintiff did not demonstrate strong reasons why the choice of court agreement should not be enforced. So even if the Brandon test was considered by the Court of Appeal, the claimant will not have succeeded.

VI. Some Reservations

There are three reservations I have about the Court of Appeal’s decision in Damac. First, the Court of Appeal should have ordered a stay of proceedings rather than holding that the lower court did not have jurisdiction. This is what is done in other common law countries. There is wisdom in this approach. If it turns out that the claimant cannot institute its claims in Dubai, the Nigerian forum should remain available to promptly institute its actions against the defendant in this case.

Second the Court of Appeal held that jurisdiction can be raised for the first time on appeal. This statement only applies to substantive jurisdiction. Procedural jurisdiction cannot be raised on appeal for the first time. Thus, if it is established that the defendant/appellant did not promptly raise the issue of choice of court in favour of Dubai at the High court, this might be a ground upon which the defendant/appellant can successfully challenge the decision of the Court of Appeal. This is because the issue of choice of court is a procedural matter and a claimant that wants to raise the issue of choice of court agreement must do so promptly, or it will be deemed to have waived its right by submitting to the jurisdiction of the Nigerian court.

Finally, the Court of Appeal made wrong reference to choice of venue rules[27] as applicable, assuming the choice of court agreement in this case is invalid. Choices of venue rules are only applicable to determine the judicial division to institute a matter for geographic convenience. For example, Lagos State has four judicial divisions: Lagos, Ikeja, Epe and Ikorodu. In the event there is a dispute as to which of the judicial divisions should hear a matter, the rules of court are to be relied on.[28] Choice of venue rules do not apply to determine private international law matters as in this case.

VII. Conclusion

Damac is a recent trend among Nigerian courts to give a choice of court agreement a contractual function. Indeed, Damac is one of the few cases where issues of ouster clause and forum non conveniens no longer feature in the judgment of the court. There are good reasons why a choice of court agreement should be strictly enforced contractually. It promotes certainty and enhances the efficacy of international commercial transactions. However, giving contractual enforcement to a choice of court agreement should only be regarded as a general rule and not an absolute rule. Nigerian courts should retain its discretion not to enforce choice of court agreements in deserving cases such as in the interest of justice and the protection of economically weaker parties.

[1]Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90.

[2] Ibid  114-6.

[3] Damac Star Properties LLC v Profitel Limited (2020) LPELR-50699(CA).

[4] Ibid.

[5]For an extended analysis see generally CSA Okoli and RF Oppong, Private International Law in Nigeria (Hart, 2020) 107 – 125.

[6]Sonnar (Nig) Ltd v Partenreedri MS Norwind (1987) 4 NWLR 520, 541.

[7] Nika Fishing Company Ltd v Lavina Corporation (2008 ) 16 NWLR 509, 542-3.

[8] ( 2018 ) 9 NWLR 463, 489.

[9] Ibid

[10]Ibid 500-1.

[11]Ibid 502.

[12] Captain Tony Nso v Seacor Marine ( Bahamas) Inc ( 2008 ) LPELR-8320 (CA) 12-3.

[13]( 2017 ) LPELR-42814.

[14] Ibid 30.

[15]Ibid 49-50.

[16] See also Megatech Engineering Limited v Sky Vision Global Networks Llc (2014) LPELR-22539 (CA); Kashamu v UBN Plc (2020) 15 NWLR (Pt. 1746) 90; Unipetrol Nigeria Ltd v Prima Alfa Enterprises (Nig) Ltd ( 1986 ) 5 NWLR 532.

[17] (1949) 19 NLR 32.

[18] (1980) (1) ALR Comm 146.

[19](1987) 4 NWLR 520.

[20] Ibid 544-5.

[21] Conoil Plc v Vitol SA ( 2018 ) 9 NWLR 463, 489

[22]See generally CSA Okoli and RF Oppong, Private International Law in Nigeria (Hart, 2020) 117 – 124.

[23]The Owners of Cargo Lately Laden on Board the Ship or Vessel ‘ Elftheria ’ v ‘ The Elftheria ’ (Owners), ‘ Th e Elft heria ’ [1969] 1 Lloyd ’ s Rep 237.

[24] See generally GBN Line v Allied Trading Limited ( 1985 ) 2 NWLR (Pt. 5) 74 ; Sonnar (Nig) Ltd v Norwind (1987) 4 NWLR 520 ; Nika Fishing Company Ltd v Lavina Corporation ( 2008 ) 16 NWLR 509 ; Captain Tony Nso v Seacor Marine ( Bahamas ) Inc ( 2008 ) LPELR-8320 (CA) ; Beaumont Resources Ltd v DWC Drilling Ltd ( 2017 ) LPELR-42814 (CA) .

[25] Sonnar (Nig) Ltd v Norwind (1987) 4 NWLR 520.

[26] Nika Fishing Company Ltd v Lavina Corporation (2008) 16 NWLR 509.

[27] In applying the choice of venue rules of Abuja on matters of contract, it considered where the contract was made, place of performance and residence of the parties as prescribed in the rules of court.

[28] Order 4 of the High Court of Lagos (Civil Procedure) Rules 2019 (formerly Order 2 of the High Court of Lagos (Civil Procedure) Rules 2012).

Jie (Jeanne) Huang, University of Sydney Law School, Australia

 

Changzhou Sinotype Technology Co, Ltd. v. Rockefeller Technology Investments (Asia) VII is a recent case decided by the Supreme Court of California on April 2, 2020. The certiorari to the Supreme Court of the US was denied on 5 October 2020. It is a controversial case concerning the interpretation of the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters of November 15, 1965 (the “Hague Service Convention”) for service of process in China.

1. Facts:

Changzhou SinoType Technology Co. (SinoType) is based in China. Rockefeller Technology Investments (Asia) VII (Rockefeller) is an American investment firm. In February 2008, they signed a memorandum of understanding (MOU) which provided that:

“6. The parties shall provide notice in the English language to each other at the addresses set forth in the Agreement via Federal Express or similar courier, with copies via facsimile or email, and shall be deemed received 3 business days after deposit with the courier.

7. The Parties hereby submit to the jurisdiction of the Federal and State courts in California and consent to service of process in accord with the notice provisions above.

8. In the event of any disputes arising between the Parties to this Agreement, either Party may submit the dispute to the Judicial Arbitration & Mediation Service in Los Angeles for exclusive and final resolution pursuant to according to [sic] its streamlined procedures before a single arbitrator who shall have ten years judicial service at the appellate level, pursuant to California law, and who shall issue a written, reasoned award. The Parties shall share equally the cost of the arbitration. Disputes shall include failure of the Parties to come to Agreement as required by this Agreement in a timely fashion.”

Due to disputes between the parties, in February 2012, Rockefeller brought an arbitration against SinoType. SinoType was defaulted in the arbitration proceeding. According to the arbitrator, SinoType was served by email and Federal Express to the Chinese address listed for it in the MOU. In November 2013, the arbitrator found favorably for Rockefeller.

Instead of enforcing the award in China according to the New York Convention,[1] Rockefeller petitioned to confirm the award in State courts in California. Cal. Civ. Proc. Code § 1290.4(a) provides that a petition to confirm an arbitral award “shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.” Therefore, Rockefeller transmitted the summons and its petition to SinoType again through FedEx and email according to paragraph 7 of the MOU. SinoType did not appear and the award was confirmed in October 2014. SinoType then appeared specially and applied to set aside the judgment. It argued that the service of the Californian court proceeding did not comply with the Hague Service Convention; therefore, it had not been duly served and the judgment was void.

2. Decision

The California Supreme Court rejected SinoType’s argument.

The Court discerned three principles for the application of the Hague Service Convention. First, the Convention applies only to “service of process in the technical sense” involving “a formal delivery of documents”. The Court distinguished “service” and “notice” by referring to the Practical Handbook on the Operation of the Service Convention, published by the Permanent Bureau of the Hague Conference on Private International Law (‘Handbook’). The Court cited that

“the Convention cannot—and does not—determine which documents need to be served. It is a matter for the lex fori to decide if a document needs to be served and which document needs to be served. Thus, if the law of the forum states that a notice is to be somehow directed to one or several addressee(s), without requiring service, the Convention does not have to be applied.”[2]

Second, the law of the sending forum (i.e. the law of California) should be applied to determine whether “there is occasion to transmit a judicial or extrajudicial document for service abroad.”

Third, if formal service of process is required under the law of the sending forum, the Hague Convention must be complied for international transmission of service documents.

The court held that the parties have waived the formal service of process, so the Hague Service Convention was not applicable in this case.[3]

3. Comments

The Changzhou Sinotype Technology Co, Ltd has a number of interesting aspects and has been commented such as here, here and here.

First, the Hague Service Convention is widely considered as ‘non-mandatory’ but ‘exclusive’.[4]  Addressing the non-mandatory nature of the Convention, the Handbook states that “the Convention can not—and does not—determine which documents need to be served. It is a matter for the lex fori to decide if a document needs to be served and which document needs to be served.”[5] However, this statement does not necessarily mean, when judicial documents are indeed transmitted from a member state to another to charge a defendant with notice of a pending lawsuit, a member state can opt out of the Convention by unilaterally excluding the transmission from the concept of service. Volkswagen Aktiengesellschaft v Schlunk decided by the Supreme Court of the US and Segers and Rufa BV v. Mabanaft GmbH decided by the Supreme Court of the Netherlands (Hoge Raad) are the two most important cases on the non-mandatory nature of the Convention. Both cases concentrate on which law should be applied to whether a document needed to be transmitted abroad for service.[6] However, Rockefeller is different because it is about which law should be applied to determine the concept of service when the transmission of judicial documents takes place in the soil of another member state. The Handbook provides that the basic criterion for the Convention to apply is “transmission abroad” and “place of service is determining factor”.[7] When judicial documents are physically transmitted in the soil of a member state, allowing another member state to unilaterally determine the concept of service in order to exclude the application of the Convention will inappropriately expand the non-mandatory character of the Convention. This will inevitably narrow the scope of the application of the Convention and damage the principle of reciprocity as the foundation of the Convention. The Hague Convention should be applied to Rockefeller because the summons and petitions were transmitted across border for service in China.

Second, as part of its accession to the Hague Convention, China expressly stated that it does not agree to service by mail.  Indeed, the official PRC declarations and reservations to the Hague Convention make it clear that, with the limited exception of voluntary service on a foreign national living in China by his country’s own embassy or consulate, the only acceptable method of service on China is through the Chinese Central Authority. Therefore, although China has recognized monetary judgments issued in the US according to the principle of reciprocity, the judgment of Changzhou Sinotype Technology Co, Ltd probably cannot be recognized and enforced in China.

The California Supreme Court decision has important implications. For Chinese parties who have assets outside of China, they should be more careful in drafting their contracts because Changzhou Sinotype Technology Co, Ltd shows that a US court may consider their agreement on service by post is a waiver of China’s reservation under the Hague Service Convention. For US parties, if Chinese defendants only have assets in China for enforcement, Changzhou Sinotype Technology Co, Ltd is not a good case to follow because the judgment probably cannot be enforced in China.

 

 

[1] China is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Jun. 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 (“New York Convention”).

[2] Practical Handbook on the Operation of the Service Convention (4th ed. 2016) par. 54, p. 23, fn. Omitted.

[3] The Court emphasized that their conclusions should be limited to Section 1290.4, subdivision (a): “Our conclusions as to California law are narrow. When parties agree to California arbitration, they consent to submit to the personal jurisdiction of California courts to enforce the agreement and any judgment under section 1293. When the agreement also specifies the manner in which the parties “shall be served,” consistent with section 1290.4, subdivision (a), that agreement supplants statutory service requirements and constitutes a waiver of formal service in favor of the agreed-upon method of notification. If an arbitration agreement fails to specify a method of service, the statutory service requirements of section 1290.4, subdivisions (b) or (c) would apply, and those statutory requirements would constitute formal service of process. We express no view with respect to service of process in other contexts.”

[4] Martin Davies et al., Nygh’s Conflict of Laws in Australia 36 (10th ed. 2020).

[5] Paragraph 54 of the Handbook.

[6] Ibid., paragraphs 31-45, and 47.

[7] Ibid., paragraph 16.

The third issue of 2020 of the Rivista di diritto internazionale privato e processuale (RDIPP, published by CEDAM) was just released. It features:

Ilaria Viarengo, Professor at the University of Milan, Planning Cross-Border Successions: The Professio Juris in the Succession Regulation (in English)

• This article addresses the role of party autonomy in Regulation (EU) No 650/2012 in the context of estate planning, Against this backdrop, the interface between the law governing the succession and property aspects of marriage or of a registered partnership, as provided in the Regulations (EU) No 2016/1103 and 2016/1104, is also analysed. This article also proceeds to examine the optio juris functioning and, in particular, it focuses on, respectively, the object of the choice, the determination of the nationality, whose law may be chosen, and the formal and substantial validity of the agreement. Finally, the protection of close family members in connection with the freedom of choice is taken into account, as the choice of law could be in contrast with the legitimate expectations of family members on the applicability of certain provisions on forced heirship and lead to a law that actually undermines their position.

The following comment is also featured:

Edoardo Benvenuti, PhD Candidate at the University of Milan, La tutela collettiva risarcitoria dei consumatori nelle controversie transfrontaliere: diritto interno e prospettive di armonizzazione (‘Cross-Border Consumer Collective Redress: Domestic Law and Prospects for Harmonisation’; in Italian)

• This article examines some developments in the area of consumer collective redress in the EU, especially in the light of the recent proposal for a Directive on representative actions. In Italy, Law No 31 of 12 April 2019 introduces a new type of class action which triggers some reflections and, in particular, doubts about its congruence with the Directive. The Author examines whether the principles set forth in the proposed Directive are consistent with the protection of consumer collective interests and whether, in matters with cross-border implications, Regulation (EU) No 1215/2012 is an efficient instrument. Even though some CJEU decisions seem to promote a flexible interpretation of this latter Regulation, its provisions do not encompass collective redress; therefore, a reform is desirable.

In addition to the foregoing, this issue features the following book review by Francesca C. Villata, Professor at the University of Milan: Chris Brummer (ed.), Cryptoassets: Legal, Regulatory and Monetary Perspectives, Oxford University Press, New York, 2019, pp. XIII-441.

 

Today (9 November 2020) ASADIP and UNCITRAL are organising a preparatory conference to the first edition of UNCITRAL Day in Latin America and the Caribbean region (UNCITRAL LAC DAY 2020 – la primera edición del Día de UNCITRAL en América Latina y el Caribe). For more information see here. Free registration here. For other events on UNCITRAL Day click here.

The programme of the XLIII Seminar of the Mexican Academy of Private International and Comparative Law (AMEDIP) is now available here. As previously announced, the XLIII Seminar will take place on 19-20 November 2020 for the first time online.

Among the topics to be discussed are the 1996 HCCH Child Protection Convention, the 1980 HCCH Child Abduction Convention, the 2019 HCCH Judgments Convention, the 2005 HCCH Choice of Court Convention, the HCCH Guide to Good Practice on the Use of Video-link, Human rights and PIL, the brand new T-MEC / US-Mexico-Canada Agreement (USMCA), digital justice, COVID-19, and alternative dispute resolution.

The meeting will be held via Zoom.

Access details:

https://us02web.zoom.us/j/5554563931?pwd=WE9uemJpeWpXQUo1elRPVjRMV0tvdz09
ID: 555 456 3931
Password:  00000

It will also be transmitted live via AMEDIP’s Facebook page.

Participation is free of charge. The language of the seminar will be Spanish.

For more information, see AMEDIP’s website.

 

Professor Paul Beaumont (University of Stirling), Dr Mihail Danov (University of Exeter) and Dr Jayne Holliday (University of Stirling) are delighted to be able to host the final AHRC funded Research Network workshop in partnership with the Journal of Private International Law.

• Online Workshop via Microsoft teams
• The Link to the event will be provided shortly.
• The workshop is over two days, Thursday 26th November and Friday 27th November

Please note that you are welcome to attend as much or as little of the workshop as you are able.

Programme for Thursday 26 November 2020

Chair – Professor Paul Beaumont (University of Stirling and co-editor of the Journal of Private International Law)

10.00-10.30 The Opportunities of Brexit for the development of Private International Law in the Commonwealth

Speaker – Professor Reid Mortensen (University of South Queensland)

10.30-10.45 Questions and discussion

10.45-11.15 Some Reflections to be drawn from the Pilot Study and Future Research Project/s

Speaker – Dr Mihail Danov (University of Exeter)

11.15-11.30 Questions and Discussion

11.30-11.45 Coffee Break

Chair – Dr Jayne Holliday (University of Stirling)

11.45-12.15 Connecting Factors in Private International Law – a global perspective

Speakers – Professor Susanne Goessl (University of Kiel) and Dr Ruth Lamont (University of Manchester)

12.15-12.30 Questions and Discussion

12.30-14.00 Lunch break

Chair – Dr Mihail Danov

14.00-14.45 Pluses and minuses of the UK being a party to the Lugano Convention after Brexit

Speaker – Professor Fausto Pocar (University of Milan)

14.45-15.00 Questions and discussion

Programme for Friday 27 November 2020

Chair – Professor Jonathan Harris QC (King’s College London, co-editor of the Journal of Private International Law and Serle Court)

10.30-10.50 Keynote speech by Lord Mance former UK Supreme Court Judge

10.50-11.15 Questions and Discussion and Comments by the Chair

11.15-11.45 Resolving Conflicts of Jurisdiction after Brexit at a global level

Speaker – Dr Ardavan Arzandeh (University of Bristol and soon to be National University of Singapore)

11.45-12.00 Questions and Discussion

Chair – Dr Jayne Holliday

12.00-12.30 The Hague Adults Convention 2000 and the role of the UK and the EU in the Hague Conference after Brexit

Speaker – Professor Pietro Franzina (Catholic University, Milan)

12.30-12.45 Questions and Discussion

Lunch Break

Chair – Dr Mihail Danov

15.00-15.30 Private International Law of Arbitration – a global perspective and the impact of Brexit on arbitration in the UK

Speaker – Professor Giuditta Cordero-Moss (University of Oslo)

15.30-15.45 Questions and Discussion

15.45-16.15 The AHRC Research Network on Private International Law: Some reflections on the way ahead for global private international law.

Speaker – Professor Paul Beaumont

16.15-16.30 Questions and Discussion