Conflictoflaws

by Jie (Jeanne) Huang, Associate Professor of the University of Sydney Law School, Jeanne.huang@sydney.edu.au

Recently, in Australian Information Commission v Facebook Inc ([2020] FCA 531), the Federal Court of Australia (‘FCA’) addresses substituted service and the Hague Service Convention in the contexts of the COVID-19 pandemic. This case is important on whether defendants located outside of Australia in a Hague Convention state can be served by substituted service instead of following the Convention.

1. Facts:

Facebook Inc is a company incorporated in the US (‘Facebook US’), while Facebook Ireland is in Ireland. Due to the Cambridge Analytica scandal, Facebook was fined in the US and the UK. The office of the Australian Information Commission has also investigated Facebook over the scandal since April 2018 and hauled Facebook into the FCA on 9 March 2020.[1] The Commission alleged that Facebook Inc and Facebook Ireland breached s 13 G of the Privacy Act (Cth) from 12 March 2014 to 1 May 2015.

Both defendants appointed King & Wood Mallesons (‘KWM’) to respond to the Commission’s inquiries before the FCA proceeding was initiated. On 6 March 2020, the Australian Government Solicitor (‘AGS’) asked KWM whether it had instructions to accept the service of originating process. KWM replied that it acted for the respondents but was not instructed to accept the service on their behalf. They also indicated that it had instructions to discuss the substantive issues raised in the proceeding.

Consequently, the Commission sought orders under Federal Court Rules (‘FCR’) 2011 rr 10.42 and 10.43(2) for leave to serve Facebook US and Facebook Ireland (1) through the central authorities according to Article 5 of the Hague Convention and (2) by substituted service under r 10.24. With respect to the latter, the proposed substituted service was to serve the respondents by emailing the judicial documents to the named persons at KWM and the Head of Data Protection and Privacy and Associate General Counsel at Facebook Ireland.

2. Ruling

On 22 April 2020, the FCA rendered a judgment favourable to the Commission granting both leave to serve outside Australia and the order for substituted service.

Leave to serve outside Australia was granted pursuant to FCR 2011 rr 10.42, 10.43(2) and (4). The rationale for this was manifold. First, the court held that, vested by the Parliament under of the Privacy Act (Cth), it had original jurisdiction in the proceeding. Second, as the proceeding was related to the construction, effect or enforcement of the Privacy Act, it fell into pigeonhole 14 of r 10.42. Third, the Commission established a prima facie case for the reliefs claimed in the proceeding. Moreover, the proposed method of service via the central authorities in the US and Ireland complied with Article 5 of the Hague Convention. Therefore, the court granted leave for service outside Australia.

Regarding substituted service, the court invoked FCR 2011 r 10.24 in agreeance with the Commission and granted the order for substituted service for two reasons.

First, in circumstances where the pandemic was declared by the World Health Organisation and is directly affecting the US, it is not presently practicable to effect service on Facebook US pursuant to Article 5 of the Hague Convention. ABC Legal is the contractor for the US Department of Justice, Civil Division, and the Office of International Judicial Assistance. It is in charge of serving foreign processes on private individuals and companies in the US under the Hague Convention. However, due to the COVID-19 pandemic, ABC Legal has ‘suspended service of process nationwide’ across the US according to its website. Consequently, the FCA considered that it was substantially difficult for the Commission to effect service on Facebook US pursuant to Article 5 of the Hague Convention. On the other hand, despite the pandemic also affecting Ireland, the court acknowledged that Ireland’s High Court and postal services remained operative.[2] Nevertheless, the court held that ‘it is impracticable to do so in the rapidly changing and evolving environment caused by the current pandemic; the present situation may have changed by the time service in the relevant way would be sought to be effected’.[3]

Second, the proposed method of substituted service by email was likely to bring the proceeding to the attention of the respondents. This was because the respondents are aware of this proceeding. Moreover, in representing the respondents, the named individuals at KWM in Sydney and the Facebook Head of Data Protection and Privacy and the Associate General Counsel in Ireland replied to the Commissioner’s inquiries which led to this proceeding. Therefore, substituted service was ordered and the Commission was allowed to email judicial documents to these individuals.

3. Comments:

Regarding substituted service, the Facebook judgment provides that[4]

‘[t]his Court has held, in circumstances analogous to the present, that an order for substituted service may be made under either r 10.24 or r 10.49 : Commissioner of Taxation v Zeitouni (2013) 306 ALR 603 at [60] (Katzmann J); see also: Australian Competition and Consumer Commission v Kokos International Pty Ltd [2007] FCA 2035 at [18] (French J); Commissioner of Taxation v Oswal [2012] FCA 1507 at [32] (Gilmour J). Even if that position is incorrect, I would have ordered substituted service under r 10.49, with a dispensation from the implicit requirement to attempt service under r 1.34, for equivalent reasons to those for which I will order substituted service under r 10.24, explained next.’

Here, the court’s reasoning is dubious in three respects.

First, all the three cases cited above are not factually analogous to Facebook. Whilst the service of process in Facebook was subject to the Hague Convention, the cases of Zeitouni, Kokos, and Oswal were not. Specifically, this was because Zeitouni[5] and Kokos[6] were instances where the defendants’ addresses were unknown; in Oswal, the court noted that it was unaware of who might be present at the address to accept service on behalf of the defendant.[7] Article 1 of the Hague Convention explicitly indicates that these are circumstances where the Convention is not applicable.[8] Therefore, these three cases can be distinguished from Facebook. This differentiation is insurmountable due to the crucial application of the Hague Convention’s ‘non-mandatory but exclusive’ nature that informs service.[9] That is, service in Convention states must be conducted in a method permitted by the Convention. When the Convention is applicable, as in Facebook, the attempt requirement of r 10.49 should not be lightly dispensed with unless the rare instance under r 1.34 is satisfied.

Second, in Facebook, it is unclear what warrants the court to invoke the rare instance of r 1.34 in disregarding the usual attempt requirement contemplated in r 10.49 – namely, that service according to the Hague Convention should be attempted first and when it had not been successful, substituted service may be applied. There is a long-standing legal doctrine holding that substituted service should not be used to extend the court’s jurisdiction in the absence of any other power to do so. In Laurie v Carroll, the High Court of Australia held that substituted service should not be used to replace personal service if the defendant was out of the jurisdiction when a writ was issued. In Facebook, there is no real urgency for service because the claim centered on the defendants’ conducts in 2014 and 2015. Cambridge Analytica is bankrupt. The Commission did not produce any evidence substantiating that Facebook US and Facebook Ireland are currently continuing their violation of the Privacy Act (Cth) in Australia. There is also no evidence showing that the two defendants may move their assets outside of Australia or that any third party should be joined swiftly. Although COVID-19 may lead to uncertain proceeding delays, this reason alone is unlikely to justify the substitution of the Hague Convention. This is because Australia has a treaty obligation to serve foreign defendants in a Convention state according to the ‘non-mandatory but exclusive’ nature of the Convention. This obligation cannot be dispensed with in a proceeding that is not time-sensitive. Moreover, a delay of proceeding is distinct from the urgency of proceeding contemplated in r 1.34, as per Swan Brewery Co Ltd v Atlee. In this case, the defendant was in the Philippines, where service through diplomatic channels could take six months or considerably more. Evidence also demonstrated that ‘the authorities in the Philippines [would] not assist with service via the diplomatic channel’. In contrast, private service could be affected within 48 hours. The plaintiff applied for an order to serve a sequestration order by post, which was rejected by the court; while the utilisation of the diplomatic channel was impractical, it was not established on the evidence that personal service was not impractical. Similarly, in Facebook, although the ABC Legal Service in the US was not functioning, there was no evidence showing that the US postal service was not operational. The COVID-19 pandemic’s effect in delaying the proceedings cannot justify the dispense of the attempt requirement in r 10.49 alone.

Third, more evidence is necessary to demonstrate that rr 10.24 and 10.45 are satisfied in Facebook. Where Ireland’s High Court and postal services remain operative even during COVID-19 pandemic, it is still possible to serve Facebook Ireland in accordance with Hague Convention. The Facebook judgment does not specify what evidence should be provided by the plaintiff in order to prove that it is not sensible or realistic to effect service according to the Convention in Ireland. The court described how the environment is ‘rapidly changing and evolving’ due to the pandemic.[10] Yet, it seems that the court deemed that the environment would be worse off and even further aggravate service, as the court considered that the current service provided by the High Court and the post in Ireland might be changed. However, the court’s view may be inaccurate with regards to the trend of the pandemic in Ireland where the curve of confirmed COVID-19 cases has flattened, thereby indicating a realistic possibility that the environment may recover, not worsen. Further, whether the court considered the ‘rapidly changing and evolving’ environment of the pandemic is doubtful. This is a significant line of inquiry as the question of ‘being not practical’ should be determined by ‘whether at the date on which the application regarding service is made, the applicant, using reasonable effort, [was] unable to serve the respondent personally (emphasis added)’[11] Last but not least, the mere fact that Facebook was aware of the proceeding cannot suffice to satisfy the requirement of ‘not practicable’ in r 10.24.[12] Therefore, the court’s reasoning that it is not practical to serve Facebook Ireland by forecasting the future change does not seem persuasive.

In conclusion, substituted service in Facebook is granted too lightly.

 

[1] The dispute centered on the ‘This is your digital life’ App (hereinafter ‘APP’). It was a personality quiz designed by Dr Aleksandr Kogan who later established the Global Science Research Limited (GSR). The Graph API V1 developed by the respondents allowed the App to request information from the Facebook accounts of 305,000 Facebook Users globally who installed the APP, of which approximately 53 were Australian. The Graph API also allowed the App to request the personal information of approximately 86,3000,000 Facebook Users globally (approximately 311,074 of whom were Australian Facebook Users) who were friends of the installers (that is, they did not install the App themselves). Dr. Kogan and/or the GSR further disclosed the personal information it obtained from the Respondents to third parties, including the Cambridge Analytica Ltd, and/or its parent company, for profit.

[2] The Hague Service Convention website page relating to Ireland describes the prescribed methods as ‘[p]ersonal or by post.’ Ireland permits service of the court documents on individuals and entities in Ireland (e.g. Facebook Ireland) by post under the Hague Convention.

[3] Facebook [71].

[4] Facebook, [66].

[5] Zeitouni, [65]. There was no dispute that the Commissioner did not know the address(es) of the defendants. Though presumably in a position to provide information on the whereabouts of the defendants, their lawyers refrained from doing so. The Australian Federal Police had been looking for one brother who was in Indonesia for six months without success. For the other brother, the Commissioner only knew he was not in Australia but did not know where he went.

[6] Australian Competition & Consumer Commission v Kokos International Pty Ltd [2007] FCA 2035, [18]. Although ACCC knew that the defendant was likely in Japan, it had been unable to obtain an address at which he could be served. Neither the defendant nor his solicitors would provide an address for service. The Department of Foreign Affairs and Trade and Australia Embassy in Japan were unable to make inquiries on the ACCC’s behalf. Therefore, the plaintiff could not make an attempt to serve the defendant in Japan. The court held that service was not practical, and a substitute service was granted under ord 7 r 9 of FCR 1979.

[7] Oswal, [35]–[36]. Mrs. Oswal was not in Australia. Her last known address was in the UAE, but she is also an Indian national and has business interests in Singapore. Consequently, it is not possible to know with certainty her whereabouts to effect personal service.

[8] Hague Service Convention art 1.

[9] Hague Conference on Private International Law, Practical Handbook on the Operation of the Service Convention, ed Christophe Bernasconia and Laurence Thébault (Wilson & Lafleur, 2006) [24]-[41].

[10] Facebook [66].

[11] Foxe v Brown [1984] HCA 69, [547] as applied in O’Neil v Acott (1988) 59 NTR 1, 2.

[12] Morris v McConaghy Australia (No 4), [2018] FCA 1516, [16]. The second defendant MC2 was in the Cayman Islands. There was no dispute that MC2 was aware of the originating process and had notice of the relevant court documents. However, the court required that the service must be conducted under the Hague Convention because the mere fact that the document has been brought to the attention of the party being served cannot suffice to satisfy r 48(a) (i.e. the requirement of ‘not practical’).

Following successful events in Bonn and Würzburg, the third iteration of the conference for young German-speaking scholars in private international law will take place – hopefully as one of the first events post-Corona – on 18 and 19 March 2021 at the Max Planck Institute for Comparative and International Private Law in Hamburg. The conference will focus on the theme of PIL for a better world: Vision – Reality – Aberration?; it will include a keynote by Angelika Nußberger, former judge at the European Court of Human Rights, and a panel discussion between Roxana Banu, Hans van Loon, and Ralf Michaels.

The organisers are inviting contributions that explore any aspect of the conference theme, which can be submitted until 20 September 2020. The call for papers and further information can be found on the conference website.

By Anubhav Das (National University of Advanced Legal Studies, Kochi) and Aditi Jaiswal (Ram Manohar Lohia National Law University, Lucknow)

The internet brought significant changes in society, leading to a massive collection of data which necessitated legislation to regulate such data collection. The European Union enacted the General Data Protection Regulation, 2016(Hereafter GDPR), replacing the Data Protection Directive, 1995. Meanwhile, India, which currently lacks a separate data protection legislation, is in the process of enacting the Personal Data Protection Bill, 2019 (Hereafter PDP). The PDP has been introduced in the Indian parliament and is currently under the scrutiny of a parliamentary committee. The primary purpose of these legislations is the protection of informational privacy.

Even though GDPR and PDP follow the same set of data protection principles, but, there exists an inevitable conflict between the two. This conflict determines the applicability of the legislation on the data subject. The territorial scope of GDPR and the PDP makes it clear that both overlap each other and this overlap can be used by companies involved in data processing or collection, to circumvent the civil liability arising under the laws. This post analyses the conflict between both the laws and in conclusion, it will suggest a way to overcome such an issue.

Territorial Scope: GDPR and PDP   

Article 3 of the GDPR provides for the territorial applicability of the law. The Regulation applies to the processing of personal data by a controller or a processer. According to Article 3(1), any controller or processer that is established in the member state (European Union) shall fall under the scope of the GDPR. In other words, any company which has an office in the European Union shall come within the purview of the GDPR. Article 3(2) states that even if any processer or controller is not established in the European Union, but if they are offering goods or services irrespective of payment or monitoring behaviour in the European Union, then they will also fall under the scope of GDPR.

On the other hand, the PDP provides for the territorial applicability under Section 2. It applies to the processing of personal data by data fiduciary (similar to the controller under GDPR) and data processer (similar to processer under GDPR). Section 2(A) (a) states that if personal data is collected, disclosed, shared or otherwise processed within the territory of India, then it shall fall under the PDP. Section 2(A) (b), makes it applicable to the State, any Indian company, any citizen of India or any person or body of persons incorporated or created under Indian law. Section 2 (A) (c) makes it applicable to data fiduciary or data processor which are not in India but are processing in connection with any business carried on in India, or any systematic activity of offering goods or services to data principals within the territory of India or any activity concerning the profiling of data principle.

The Overlap of Jurisdiction

The internet has provided a way for companies to operate anywhere without the existence of an entity in a particular country. This also includes those companies which deal with data. In the context of Europe and India, a company doesn’t need to have an entity in Europe or India to operate and do business. Thus, an Indian company can easily do business related to data in Europe without any real existence in Europe and vice versa. Consequently, the problem that arises concerning data protection laws is complicated. An Indian company will fall under the purview of the PDP as per Section 2(A) (b) but at the same time if this Indian company also deals with ‘personal data for offering goods or services’ in the European Union, then it will also be regulated by the provisions of the GDPR.

Similarly, a European company ‘collecting data in India’ will fall under the scope of both PDP and GDPR. It is a matter of fact that judicial courts do not have jurisdiction over foreign land. Hence, no monetary damages can be imposed on companies which operate from Europe by using PDP or companies operating from India by using GDPR.

A European company or an Indian company can also claim that there is proper compliance with GDPR or PDP, respectively. In the context of Europe and India, a company only needs to follow the data protection law of the land from where it operates even though such an act violates data protection law of the other jurisdiction. This is possible as GDPR and PDP differ from each other on every key and essential aspect such as the very meaning of personal data.

The Difference and its Implications

The primary purpose of GDPR and PDP is the protection of personal data. But, the definition of personal data differs when GDPR is compared with PDP. The reason why such a description is essential is that a substantial part of both laws is based on the processing of personal data. This includes fair consent, purpose limitation, storage limitation, rights of data principle etc. Such aspects, when read with the territorial scope of both the laws, outlines the applicability of its provisions. The table below shows the difference in the definition of personal data.

 

 

GDPR PDP   Personal data means any information relating to an identified or identifiable natural person (‘data subject’).

An identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person; Personal data is data about or relating to a natural person who is directly or indirectly identifiable, having regard to any characteristic, trait, attribute or any other feature of the identity of such natural person, whether online or offline, or any combination of such features with any additional information, and shall include any inference drawn from such data for profiling.

 

Note – Underlined are the parts which show that it is not present in the other law.

Both GDPR and PDP refer to personal data as information/data relating to identified/identifiable natural person. At the same time, the nuances of what constitutes an identifiable natural person differ significantly as both use different terminology which creates a diversion in the meaning of the personal data.

Deviation 1 – PDP provides for words such as ‘any other feature of identity, a combination of such feature with other information, any inference drawn for profiling’, in the meaning of an identifiable natural person. These terms can be interpreted more liberally and will probably be explained by courts in India and shall have an evolving meaning. GDPR, on the other hand, provides for specific terms like ‘physical, physiological, genetic, mental, economic, cultural, social identity’. Hence, European Courts will have to interpret personal data by mandatorily considering such terms, making it’s scope narrower when compared to PDP in this context.

Deviation 2 – Terms such as ‘identification number’ and ‘location data’ is mentioned explicitly in GDPR and not in PDP, making PDP narrower in scope here.

This above discussion can be easily understood with the help of the following figure –

Deviation 1 – The green circle represents inference in PDP. The blue circle represents inference in GDPR. The green stripe represents personal data which is covered in PDP and not covered in GDPR.

Deviation 2 – The yellow circle represents personal data in GDPR. The red circle represents personal data in PDP. The yellow stripe represents personal data which is covered in GDPR and not covered in PDP.

In the figure above, in Deviation 1, the green strip represents that personal data, which when processed by a company shall not fall under the scope of GDPR even though it shall be under the scope of the PDP. Such a difference implies that companies falling under the territorial ambit of both the laws, can follow one and circumvent the other.

A European company can process personal data represented in the green strip from India, and for that, it doesn’t need to comply with GDPR as that data is not personal data under GDPR. Now even though, there is a violation of the provisions under PDP the company can escape liability as Indian courts do not have jurisdiction in Europe, and European Courts cannot adjudge the matter as it falls outside the material scope of GDPR. The vice versa will happen if the case of deviation two is considered.

The consequence of such inconsistencies will be faced by data subjects who won’t be able to claim damages provided under their respective data protection law. One of the ways to ensure that damages can be claimed is by harmonising the data protection laws which can only be done by international cooperation.

The Need For International Cooperation in Data Protection

The existence of such issues in the framework of GDPR and PDP is not because of the extraterritorial application. Advocating against the extraterritorial application to resolve the problem of overlap in the jurisdiction of data protection laws would only give rise to more infringement of informational privacy of data subjects by foreign companies. This, in turn, will be detrimental for the very purpose for which data protection legislation is enacted.

The requirement at present is to harmonise the key definitions such as personal data in the data protection legislation. This will ensure that a right of action lies in both GDPR and PDP. Even if a foreign company cannot be dragged to the national court, harmonisation will at least ensure that a data subject has a right to seek damages in the international court.

The aspect discussed in this article is regarding two jurisdictions. However, consider, for instance,  the complications that could arise when more than two jurisdictions are involved. To illustrate, an Indian Company having an office in Canada and that office is doing business in data from the European Union. In such cases, the best way to ensure data protection rights is by harmonisation, and this can only be achieved with the help of international cooperation. Thus, data protection in the age of internet needs multilateral international agreements.

Conclusion

The international regime of data protection is complicated in today’s world. There is no proper international agreement which governs the data protection legislation across the globe, which resulted in a difference in the critical terms of data protection when GDPR and PDP are compared. This, in – turn can be used by corporates to get away with liability. So, the aim must be not to let anyone violate the data protection principles by using this inconsistency and get away with it. To deal with this and safeguard the privacy of data subject, international cooperation in data protection is essential.

 

 

 

written by Michael Wells-Greco

(Note: publication of this book was announced earlier.)

 

La gestación por sustitución en el derecho internacional privado y comparado

Instituto de Investigaciones Jurídicas UNAM – Centro de Investigación y Docencia Económicas (CIDE)

México, 2020

 

This highly informative and timely book edited by María Mercedes Albornoz addresses the pressing challenges presented by surrogacy arrangements. With contributions from Nuria González Martín, Verónica Esparza, Ximena Medellín Urquiaga, Isabel Fulda, Rebeca Ramos, Regina Tamés, Mónica Velarde, Federico Notrica, Cristina González Beilfuss, Rosa Elvira Vargas, María Virginia Aguilar, Francisco López González, María Mercedes Albornoz and Nieve Rubaja, and a thought provoking preface by Eleonora Lamm,  this collection contains a remarkable wealth of comparative Ibero-America legal materials on surrogacy. While comparisons are made with the diverse national surrogacy approaches in other parts of the world, much of the comparative discussion centres on the experience of surrogacy in the Americas (in Mexico and Argentina, in particular). The careful analysis demonstrates the challenges for many states arising from surrogacy arrangements.

The book contains a number of contributions that provide international perspectives on surrogacy. These include, for example, a careful consideration of the impact and relevance of the case law of the European Court of Human Rights (the discussion begs the question whether the Inter-American Court of Human Rights will be seised to consider surrogacy in ways similar to its European cousin) and two reflective discussions on the work and aims of international surrogacy projects. The current situation in the Americas highlights ever more starkly the need for the international community to come together to consider whether a multilateral framework might be agreed upon which enable states to work together to uphold the human rights of all concerned. Only a holistic analysis by the global community can begin to determine whether international frameworks can achieve these aims.

Yet there are limitations with possible international approaches. There are also limits to what is considered to be morally acceptable. It is rightly posited that it is for each state to consider its national approach to surrogacy (which may include prohibition) but public policy is not an empty vessel and it cannot be deployed as a blanket defence when legal parent-child relationships are established abroad. There is an acceptance that surrogacy is not going to go away, so consideration ought to be given to the more complex and important human rights considerations it raises, which means focusing on the interests of children, as well as those of the surrogate (who in the volume is intentionally not referred to as the surrogate mother) herself.

The book returns, as it were, to Mexico and concludes with a proposed model of regulation in Mexico of cross-border surrogacy arrangements through a private international law lens.

The book is a fascinating read – it would interest anyone from lay readers with an interest in surrogacy to academics, lawyers and other professionals.

Dr. Michael Wells-Greco

In lieu of its originally scheduled programme, the Hague Academy of International Law recently announced its first online programme, the invitation to which reads as follows:

The Hague Academy of International Law is pleased to announce the launch of its very first online programme: an entirely online session of its Centre for Studies and Research. This session will take place between September 1st, 2020, and June 1st, 2021, on the theme of Epidemics and International Law.  The working language will be English.

The Directors of Research, Professor Shinya Murase (Sophia University, Tokyo) & Ms. Suzanne Zhou (McCabe Centre for Law and Cancer, Melbourne) invite applications from researchers including students in the final phase of their doctoral studies, holders of advanced degrees in law, political science, or other related disciplines, early-stage professors and legal practitioners.

Selected participants will each write an article on a sub-topic related to the overall theme of Epidemics and International Law. The research work will start in September 2020 and, following a very strict planning, the articles should be finalized in April/May 2021. Interested applicants must therefore be available to conduct their research and write their contribution in the coming months. The best articles will be included in a book to be published in August 2021 approximately.

Applications can be sent in between July 1st and September 1st, 2020. As the Academy expects to receive a large number of applications, the application deadline might already close on August 1st, 2020. Interested candidates are therefore encouraged to apply as soon as possible using the appropriate online form.

For more information on this programme, please consult the poster, as well as the web pages related to the Centre for Study and Research – Online.

German version here.  English version here.

This post introduces my case note titled ‘A Dangerous Chimera: Anti-Suit Injunctions Based on a “Right to be Sued” at the Place of Domicile under the Brussels Ia Regulation?’ which appeared in the July 2020 issue of the Law Quarterly Review at page 379. An open access version of the case note is available here.

In Gray v Hurley [2019] EWCA Civ 2222, the Court of Appeal (Patten LJ, Hickinbottom LJ and Peter Jackson LJ), handed down the judgment on the claimant’s appeal in Gray v Hurley [2019] EWHC 1972 (QB). The appellant appealed against the refusal of an anti-suit injunction.

The appellant (Ms Gray) and respondent (Mr Hurley) had been in a relationship. They acquired property in various jurisdictions using the appellant’s money, but held it in either the respondent’s name or in corporate names. The relationship ended and a dispute commenced over ownership of some of the assets and properties. The appellant was domiciled in England; the respondent lived in New Zealand after the relationship ended and was no longer domiciled in England. He initiated proceedings there for a division of the property acquired by the couple during the relationship. The appellant issued proceedings in England seeking a declaration that she was entitled absolutely to the assets. She also applied for an anti-suit injunction to restrain the defendant from continuing with proceedings in the courts of New Zealand. Lavender J held that England was the appropriate forum for the trial of the appellant’s claims but that the respondent’s New Zealand claim could not be determined in England. He rejected her argument that Article 4(1) of the Brussels Ia Regulation obliged him to grant an anti-suit injunction to prevent the respondent from litigating against her in a non-EU state.

The appellant argued that Samengo-Turner v J&H Marsh & McLennan (Services) Ltd [2007] EWCA Civ 723, [2007] 2 All E.R. (Comm) 813 and Petter v EMC Europe Ltd [2015] EWCA Civ 828, [2015] C.P. Rep. 47 were binding authority that Article 4(1) provided her with a right not to be sued outside England, where she was domiciled, obliging the court to give effect to that right by granting an anti-suit injunction.

The Court of Appeal considered that the issue was not acte claire and sent a preliminary reference to the CJEU (pursuant to Article 267 TFEU) asking whether Article 4(1) of the Brussels Ia Regulation provided someone domiciled in England with a right not to be sued outside England so as to oblige the courts to give effect to that right by granting an anti-suit injunction.

The case note examines the Court of Appeal’s decision in Gray v Hurley [2019] EWCA Civ 2222. It offers a pervasive critique of the argument that the general rule of jurisdiction under the Brussels Ia Regulation gives rise to a substantive right to be sued only in England and that this right is capable of enforcement by an anti-suit injunction. It is argued that the previous decisions of the Court of Appeal in Samengo-Turner v J&H Marsh & McLennan (Services) Ltd [2007] EWCA Civ 723 and Petter v EMC Europe Ltd [2015] EWCA Civ 828 were themselves wrongly decided. In light of this, it will be even more difficult to justify the broader application of a similar result in the present case.

Indeed, the law would take a wrong turn if the present case is allowed to build on the aberrational foundations of the developing law on anti-suit injunctions based on rights derived from the Brussels Ia Regulation. Essentially, a chimerical remedy based on a fictitious right would not only infringe comity but would also deny the respondent access to justice in the only available forum. The note also anticipates the CJEU’s potential findings in this case.

An open access version of the case note is available here.

A new book (in Spanish) on surrogacy in private international law and comparative law, edited by the indefatigable Mercedes Albornoz, and freely available online.

 

The Graduate Programm “Dynamic Integration” at the Faculty of Law of Humboldt-University Berlin offers a PhD fellowship in private (international) law. The fellowship is (generously) funded by the German Research Foundation (Deutsche Forschungsgemeinschaft). In addition, Humboldt-University offers an outstanding research environment.

For more information see here.

In 2017 drivers working under contract for Uber in Ontario launched a class action.  They alleged that under Ontario law they were employees entitled to various benefits Uber was not providing.  In response, Uber sought to stay the proceedings on the basis of an arbitration clause in the standard-form contract with each driver.  Under its terms a driver is required to resolve any dispute with Uber through mediation and arbitration in the Netherlands.  The mediation and arbitration process requires up-front administrative and filing fees of US$14,500.  In response, the drivers argued that the arbitration clause was unenforceable.

The Supreme Court of Canada has held in Uber Technologies Inc. v. Heller, 2020 SCC 16 that the arbitration clause is unenforceable, paving the way for the class action to proceed in Ontario.  A majority of seven judges held the clause was unconscionable.  One judge held that unconscionability was not the proper framework for analysis but that the clause was contrary to public policy.  One judge, in dissent, upheld the clause.

A threshold dispute was whether the motion to stay the proceedings was under the Arbitration Act, 1991, S.O. 1991, c. 17 or the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5.  Eight judges held that as the dispute was fundamentally about labour and employment, the ICAA did not apply and the AA was the relevant statute (see paras. 18-28, 104).  While s. 7(1) of the AA directs the court to stay proceedings in the face of an agreement to arbitration, s. 7(2) is an exception that applies, inter alia, if the arbitration agreement is “invalid”.  That was accordingly the framework for the analysis.  In dissent Justice Cote held that the ICAA was the applicable statute as the relationship was international and commercial in nature (paras. 210-18).

The majority (a decision written by Abella and Rowe JJ) offered two reasons for not leaving the issue of the validity of the clause to the arbitrator.  First, although the issue involved a mixed question of law and fact, the question could be resolved by the court on only a “superficial review” of the record (para. 37).  Second, the court was required to consider “whether there is a real prospect, in the circumstances, that the arbitrator may never decide the merits of the jurisdictional challenge” (para. 45).  If so, the court is to decide the issue.  This is rooted in concerns about access to justice (para. 38).  In the majority’s view, the high fees required to commence the arbitration are a “brick wall” on any pathway to resolution of the drivers’ claims.

The majority then engaged in a detailed discussion of the doctrine of unconscionability.  It requires both “an inequality of bargaining power and a resulting improvident bargain” (para. 65).  On the former, the majority noted the standard form, take-it-or-leave-it nature of the contract and the “significant gulf in sophistication” between the parties (para. 93).  On the latter, the majority stressed the high up-front costs and apparent necessity to travel to the Netherlands to raise any dispute (para. 94).  In its view, “No reasonable person who had understood and appreciated the implications of the arbitration clause would have agreed to it” (para. 95).  As a result, the clause is unconscionable and thus invalid.

Justice Brown instead relied on the public policy of favouring access to justice and precluding an ouster of the jurisdiction of the court.  An arbitration clause that has the practical effect of precluding arbitration cannot be accepted (para. 119).  Contractual stipulations that prohibit the resolution of disputes according to law, whether by express prohibition or simply by effect, are unenforceable as a matter of public policy (para. 121).

Justice Brown also set out at length his concerns about the majority’s reliance on unconscionability: “the doctrine of unconscionability is ill-suited here.  Further, their approach is likely to introduce added uncertainty in the enforcement of contracts, where predictability is paramount” (para. 147).  Indeed, he criticized the majority for significantly lowering the hurdle for unconscionability, suggesting that every standard-form contract would, on the majority’s view, meet the first element of an inequality of bargaining power and therefore open up an inquiry into the sufficiency of the bargain (paras. 162-63).  Justice Brown concluded that “my colleagues’ approach drastically expands the scope of unconscionability, provides very little guidance for the doctrine’s application, and does all of this in the context of an appeal whose just disposition requires no such change” (para. 174).

In dissent, Justice Cote was critical of the other judges’ willingness, in the circumstances, to resolve the issue rather than refer it to the arbitrator for decision: “In my view, my colleagues’ efforts to avoid the operation of the rule of systematic referral to arbitration reflects the same historical hostility to arbitration which the legislature and this Court have sought to dispel. The simple fact is that the parties in this case have agreed to settle any disputes through arbitration; this Court should not hesitate to give effect to that arrangement. The ease with which my colleagues dispense with the Arbitration Clause on the basis of the thinnest of factual records causes me to fear that the doctrines of unconscionability and public policy are being converted into a form of ad hoc judicial moralism or “palm tree justice” that will sow uncertainty and invite endless litigation over the enforceability of arbitration agreements” (para. 237).  Justice Cote also shared many of Justice Brown’s concerns about the majority’s use of unconscionability: “I am concerned that their threshold for a finding of inequality of bargaining power has been set so low as to be practically meaningless in the case of standard form contracts” (para. 257).

The decision is lengthy and several additional issues are canvassed, especially in the reasons of Justice Cote and Justice Brown.  The ultimate result, with the drivers not being bound by the arbitration clause, is not that surprising.  Perhaps the most significant questions moving forward will be the effect these reasons have on the doctrine of unconscionability more generally.

Save the date

The conference Frontiers in Civil Justice will take place at Erasmus University Rotterdam on 16 and 17 November 2020. The conference will address four key issues in civil justice, which require a deeper and renewed reflection in light of their contribution of facilitating access to justice. These are the shaping of the interaction between formal and informal justice, the digitalization of consumer dispute resolution (ODR), the collectivizing and monetizing of civil litigation and efforts of bringing justice closer to citizens. The conference will bring together academics, policymakers, practitioners and representatives of civil society to critically reflect on the opportunities and possible drawbacks ensuing from these paramount developments.

The outline of the conference, including confirmed keynote speakers, is avaible here. Further details will be made available soon.

Call for papers

For the last part of the conference we welcome abstracts on the topic ‘Innovations in Civil Justice – Bringing Justice Closer to Citizens’. Please send your abstract of max. 500 words before 31 July. Further details can be found here.

This conference is organised by Erasmus School of Law in the context of the ERC-Consolidator Research Project ‘Building EU Civil Justice: Challenges of Procedural Innovations – Bridging Access to Justice’. More information at: www.euciviljustice.eu.

Marie-Luisa Loheide is a doctoral candidate at the University of Freiburg who writes her dissertation about the relationship between the status of natural persons in public and private international law. She has kindly provided us with her thoughts on a recent ruling by the German Constitutional Court.

According to Article 116 para. 2 of the German Basic Law (Grundgesetz – GG), every descendant of former German citizens of Jewish faith who have been forcibly displaced and expatriated in a discriminatory manner by the Nazi-regime is entitled to attain German citizenship upon request. This rule has been incorporated in the Basic Law since 1949 as part of its confrontation with the systematic violations of human rights by the Nazi-regime and is therefore meant to provide reparation by restoring the status quo ante.

Descendants (“Abkömmlinge”) as referred to in Article 116 para. 2 are children, grandchildren and all future generations without any temporal constraint. Regardless of their parents’ choice of citizenship, they have a personal right to naturalisation which is exercised upon request by reactivation of the acquisition of citizenship iure sanguinis. This very wide scope is legitimated by the striking injustice done by the Nazi-regime. Yet, according to the settled case law of the Federal Administrative Court, it had been limited by a strict “but-for” test: in order to solely encompass those people affected by this specific injustice. This meant that the descendant must hypothetically have possessed German citizenship according to the applicable citizenship law at the time of its acquisition which is usually the person’s birth. To put it more clearly, one had to ask the following hypothetical question: Would the descendant be a German citizen if his or her ancestor had not been expatriated by the Nazis?

Exactly this limiting prerequisite was the crucial point of the matter decided upon by the German Constitutional Court on 17 June 2020. In the underlying case, the hypothetical question described above would have had to be answered in the negative: Until its revocation in 1993, German citizenship law stated that children of an unmarried German father and a mother of other citizenship did not acquire the German citizenship of their father but only that of their mother, contrary to today’s principle of ius sanguinis-acquisition. As in casu the daughter of a forcibly displaced and expatriated former German emigrant of Jewish faith and a US-American mother was born outside marriage in 1967, she was denied the acquisition of the German citizenship. Whereas this was not criticised by the administrative courts seised, the German Constitutional Court in its ruling classified the denial as an obvious violation of the principle of equal treatment of children born within and outside marriage underlying Article 6 para. 5 GG as well as the principle of equal treatment of women and men according to Article 3 para. 2 GG, as alleged by the plaintiff. In its reasoning, the Court emphasised that an exception from the principle of equal treatment of children born outside marriage could only be made if absolutely necessary. This corresponds to the case-law of the European Court of Human Rights on Article 14 of the ECHR that a difference in treatment requires “very weighty reasons”. The former non-recognition of the family relationship between an unmarried father and his child, however, did obviously contradict the stated constitutional notion without being justified by opposing constitutional law. Out of two possible interpretations of “descendant” as referred to in Article 116 para. 2 GG the court must have chosen the one that consorts best with the constitution. According to the Constitutional Court, the more generous interpretation of descendant also prevents a perpetuation of the outdated notion of inferiority of children born outside marriage through Article 116 para 2 GG and corresponds to its purpose of reparation.

As the notion of inferiority of children born outside marriage has fortunately vanished, a clarifying judgment was highly overdue and is therefore most welcome. It is not acceptable that outdated notions are carried to the present through a provision of the Basic Law that is meant to provide reparation of Nazi crimes. Especially in post-Brexit times, the question dealt with has become more and more urgent with respect to people reclaiming their German citizenship in order to maintain their Union citizenship and the rights pertaining to it (see here).

In regard to conflicts law, this clarification of a key question of citizenship law is relevant to the determination as a preliminary issue (incidental question or Vorfrage) when nationality is used as a connecting factor. The judgment is likely to lead to more cases of dual citizenship that are subject to the ambiguous conflicts rule of Art. 5 para. 1 sentence 2 EGBGB.

The EU has opened a Public Consultation into a possible accession to the 2019 HCCH Judgments Convention. The Consultation will run from 22 June 2020 – 05 October 2020 (midnight, Brussels time).

The Consultation is expansive and the target audience is described as follows: businesses and citizens involved or likely to get involved in international trade and investment; public authorities (including justice professionals); social partners organisations (trade unions and employers organisations), trade, business and professional associations, including consumer and business organisations, as well as professional organisations representing lawyers and members of research or academic institutions.

Importantly, the Consultation is not limited to EU Stakeholders. Rather, the EU expressly invites non-EU Stakeholders to participate and have their say.

Given the importance of being able to manage cross-border enforcement risks and validate rights through a predictable, effective and efficient international enforcement mechanism, this Consultation should attract many submissions from around the globe.

The questionnaire, which is available, and can be filled in, in any official EU language, as well as further information concerning the Consultation, can be found following this link.

 

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

E. Schollmeyer: The effect of the entry in the domestic register is governed by foreign law: Will the new rules on cross-border divisions work?

One of the most inventive conflict-of-law rules that secondary law of the European Union has come up with, can be discovered at a hidden place in the new Mobility Directive. Article 160q of the Directive assigns the determination of the effective date of a cross-border division to the law of the departure Member State. The provision appears as an attempted clearance of the complicated brushwood of the registration steps of a cross-border division of a company. This article explores whether the clearance has been successful.

F. Fuchs: Revolution of the International Exchange of Public Documents: the Electronic Apostille

The Apostille is of utmost importance for the exchange of public documents among different nations. The 118 states currently having acceded to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents issue, altogether, several millions of Apostilles per year in order to certify the authenticity of public documents emanating from their territory. Some years ago, the electronic Apostille was implemented, which allows states to issue their Apostilles as an electronic document. Interested parties may verify the authenticity of such an electronic document via electronic registers which are accessible on the internet. Whereas Germany has not yet acceded to that new system, 38 other jurisdictions already have done so.

G. Mäsch: Third Time Lucky? The ECJ decides (again) on the place of jurisdiction for cartel damages claims

In three decisions now the ECJ has dealt with the question of where the “place of the causal event” and the “place where the damage occurred” are to be located in order to determine, based on the ubiquity principle enshrined in Article 7(2) of the Brussels Ibis Regulation, the place of jurisdiction for antitrust damages (tort) claims. In this paper the overall picture resulting from the ECJ decisions in CDC Hydrogen Peroxides, flyLAL-Lithuanian Airlines and now Tibor-Trans is analysed. The place of the “conclusion” of a cartel favoured by the ECJ to determine the place of the causal event is not only unsuitable in the case of infringements of Art. 102 TFEU (abuse of a dominant market position), but also in cases of infringement of Art. 101 TFEU (prohibition of cartels). The same criticism applies to the ECJ’s localisation of the place where the damage occurred at the place where the competition is impaired and the victim of the cartel or the abuse of the dominant market position (claimant) sustained the financial loss. In this paper it is suggested to dock the place of the causal event to the actual seat(s) of the cartel offender(s) and the place where the damage occurred exclusively to the affected market.

J. Kleinschmidt: Jurisdiction of a German court to issue a national certificate of succession (‘Erbschein’) is subject to the European Succession Regulation

The European Succession Regulation provides little guidance as to the relationship between the novel European Certificate of Succession and existing national certificates. In a case concerning a German “Erbschein”, the CJEU has now clarified an important aspect of this relationship by holding that jurisdiction of a Member State court to issue a national certificate is subject to the harmonised rules contained in Art. 4 et seq. ESR. This decision deserves approval because it serves to avoid, as far as possible, the difficult problems ensuing from the existence of conflicting certificates from different Member States. It remains, however, an open question whether the decision can be extended to national certificates issued by notaries.

K. Thorn/K. Varón Romero: The Qualification of the Lump-Sum Compensation for Gains in the Event of Death Pursuant to Section 1371 (1) of the German Civil Code (BGB) in Accordance with the Regulation (EU) No. 650/2012

In “Mahnkopf” the CJEU had to decide whether the material scope of application of the Regulation (EU) No. 650/2012 of the European Parliament and of the Council of 4/7/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession also covers national provisions which, like Section 1371 (1) of the German Civil Code (BGB), grant the surviving spouse a lump-sum compensation for gains after the death of the other spouse by increasing his or her inheritance. Hence, this was a question of the qualification of Section 1371 (1) BGB, which had been discussed controversially in Germany for a long time and had only been clarified on a national level in 2015. The CJEU decided in favour of a qualification under inheritance law at the level of Union law, and thus took a view which contradicts that of the Federal Court of Justice (BGH) for national conflict of laws. The authors agree with the result of the CJEU but criticise the methodical approach to the implementation of the functional qualification. The article identifies the new questions and problems that will now have to be clarified by the German courts as a result of the CJEU decision and in this context analyses two recent decisions of Higher Regional Courts. The authors note that in the context of Section 1371 (1) BGB, the question of the (temporal) scope of application of the Regulation is likely to become more important in the future, asotherwise, in their opinion, the BGH case law will still have to be considered. Accordingly, in the opinion of the authors, for future German jurisdiction much will depend on whether the BGH adapts its previous case law to that of the CJEU.

P. Mankowski: Recognition and free circulation of names ‘unlawfully’ acquired in other Member States of the EU

The PIL of names is one of the strongholds of the recognition principle. The touchstone is whether names “unlawfully” acquired in other Member States of the EU must also be recognised. A true recognition principle implies that any kind of révision au fond is interdicted. Yet any check on the “lawfulness” or “unlawfulness” of acquiring a certain name abroad amounts to nothing else than a révision au fond.

M. Gernert: Termination of contracts of Iranian business relations due to US sanctions and a possible violation of the EU Blocking Regulation and § 7 AWV

US secondary sanctions are intended to subject European economic operators to the further tightened US sanctions regime against Iran. In contrast, the socalled Blocking Regulation of the European Union is intended to protect European companies from such extraterritorial regulations and prohibits to comply with certain sanctions. In view of the great importance of the US market and the intended uncertainty in the enforcement of US sanctions, many European companies react by terminating contracts with Iranian business partners in order to rule out any risk of high penalties by US authorities. This article examines if and to what extent the Blocking Regulation and § 7 AWV influence the effectiveness of such terminations.

B. Rentsch: Cross-border enforcement of provisional measures – lex fori as a default rule

Titles from provisional measures are automatically recognised and enforced under the Brussels I-Regulations. In consequence, different laws will apply to a title’s enforceability (country of the rendering of the provisional measure) and ist actual enforcement (country where the title is supposed to take effect). This sharp divide falls short of acknowledging that questions of enforceability and the actual conditions of enforcement are closely entangled in preliminary measure proceedings, especially the enforcement deadline under Sec. 929 para. 2 of the German Code of Civil Procedure (ZPO). The European Court of Justice, in its decision C-379/17 (Societ  Immobiliare Al Bosco Srl) refrained from creating a specific Conflicts Rule for preliminary measures and ruled that the deadline falls within the scope of actual enforcement. This entails new practical problems, especially with regard to calculating the deadline when foreign titles are involved.

A. Spickhoff: “Communication torts” and jurisdiction at the place of action

Communication torts in more recent times are mostly discussed as “internet torts”. Typically, such torts will be multi-state torts. In contrast, the current case of the Austrian Supreme Court concerns the localisation of individual communication torts. The locus delicti commissi in such cases has been concretised by the Austrian Supreme Court according to general principles of jurisdiction. The locus delicti commissi, which is characterised by a falling apart of the place of action and place of effect, is located at the place of action as well as at the place of effect. In the event of individual communication torts, the place of effect is located at the victim’s place of stay during the phone call or the message arrival. The place of action has to be located at the sending location. On the other hand, in case of claims against individual third parties, the place of effect is located at the residence of the receiver. The Austrian Supreme Court remitted the case to the lower court for establishing the relevant facts for jurisdiction in respect of the denial of the plaintiff’s claim. However, the court did not problematise the question of so-called “double-relevant facts”. The European Court of Justice, in line with the judicial practice in Austria and Germany, has accepted a judicial review of the facts on jurisdiction only with respect to their conclusiveness.

R. Rodriguez/P. Gubler: Recognition of a UK Solvent Scheme of Arrangement in Switzerland and under the Lugano Conventions

In recent years, various European companies have made use of the ability to restructure their debts using a UK solvent scheme of arrangement, even those not having their seat in the UK. The conditions and applicable jurisdictional framework under which the scheme of arrangement can be recognised in jurisdictions outside the UK are controversial. In Switzerland doctrine and jurisprudence on the issue are particularly scarce. This article aims to clarify the applicable rules of international civil procedural law as well as the requirements for recognition of a scheme of arrangement in Switzerland. It is held that recognition should be generally granted, either according to the 2007 Lugano Convention or, in a possible “no-deal Brexit” scenario, according to the national rules of private international law, or possibly even the 1988 Lugano Convention.

T. Helms: Foreign surrogate motherhood and the limits of its recognition under Art. 8 ECHR

On request of the French Court of Cassation the Grand Chamber of the European Court of Human Rights has given an advisory opinion on the recognition of the legal parent-child relationship between a child born through a gestational surrogacy arrangement abroad and its intended mother who is not genetically linked to the child. It held that Art. 8 ECHR requires that domestic law provides a possibility of recognition of a legal parent-child relationship with the intended mother. But it falls within states’ margin of appreciation to choose the means by which to permit this recognition, the possibility to adopt the child may satisfy these requirements.

On Tuesday, July 7, the Hamburg Max Planck Institute will host its second monthly virtual workshop in private international law, again in German. Eva-Maria Kieninger (Würzburg) will speak in German about climate change in private international law and procedure, followed by open discussion. All are welcome. More information and sign-up here.

According to the judgment in Blijdenstein, delivered by the Court of Justice in 2004, a public body which seeks reimbursement of sums paid under public law to the original maintenance creditor, to whose rights it is subrogated against the maintenance debtor, cannot rely on Article 5(2) of the Brussels Convention. It cannot, therefore, sue the debtor before the courts for the place of domicile/habitual residence of the original maintenance creditor.

In 2009, the EU legislator adopted the Maintenance Regulation. As it follows from Article 68 of this Regulation, it replaced the provisions of the Brussels regime relating to maintenance obligations. The Regulation contains a provision that seems to be somehow similar to Article 5(2) of the Brussels Convention. Its Article 3(b) allows to bring the proceedings in matters relating to maintenance obligations before the court for the place where the creditor is habitually resident.

Is that similarity sufficient to justify faithful application of interpretation provided in the judgment in Blijdenstein in relation to the provisions of the Maintenance Regulation? This is, in essence, the question at stake in the case WV, C-540/19. This Thursday, 18 June 2020, Advocate General Campos Sánchez-Bordona presented his Opinion in which he addresses that question.

Facts of the case and the question referred

In proceedings before a German court, a social assistance institution being a public body asserts claims for parental maintenance against the defendant who lives in Austria. The public body contends that the parental maintenance claim has been transferred to that body because it regularly granted the defendant’s mother social assistance benefits. Indeed, the defendant’s mother lives in Germany where she receives regular social assistance. The defendant submits that the German courts lack international jurisdiction.

In line with the submission of the defendant, the first instance considers that the German courts have no international jurisdiction. It argues that jurisdiction under Article 3(b) of the Maintenance Regulation is excluded because the creditor within the meaning of that provision is only the maintenance creditor itself, and not a state body asserting maintenance claims legally transferred to it by way of recovery. The second instance court disagrees and, ultimately, the German Supreme Court (Bundesgerichtshof, BGH) decides to refer a request for a preliminary ruling to the Court of Justice. It submits a following question:

Can a public body which has provided a maintenance creditor with social assistance benefits in accordance with provisions of public law invoke the place of jurisdiction at the place of habitual residence of the maintenance creditor under Article 3(b) of the Maintenance Regulation in the case where it asserts the maintenance creditor’s maintenance claim under civil law, transferred to it on the basis of the granting of social assistance by way of statutory subrogation, against the maintenance debtor by way of recourse?

Advocate General’s Opinion…

In his Opinion, Advocate General proposes to answer the preliminary question in the affirmative. In his view, Article 3(b) of the Maintenance Regulation can be relied on by a public body who contends that it has subrogated the original maintenance creditor.

At point 34, the Opinion recalls the judgment in Blijdenstein and explains that the Court held in its judgment, in essence, that a maintenance creditor is regarded as the weaker party in the proceedings in matters relating to maintenance obligations and therefore that creditor can rely on a rule of jurisdiction which derogates from this general principle of actor sequitur forum rei. The original maintenance creditor could therefore rely on Article 5(2) of the Brussels Convention. A public body which brings an action for recovery against a maintenance debtor is not in an inferior position with regard to the latter and it cannot bring its actions before the courts that would otherwise have jurisdiction under Article 5(2) of the Brussels Convention.

However, Advocate General develops a series of arguments in support of non-application of the interpretation provided for in the judgment in Blijdenstein within the framework established by the Maintenance Regulation.

First, at points 37 to 42, the Opinion lays down some arguments of systemic interpretation and stresses that the Maintenance Regulation establishes a complete system: while the Brussels regime is in principle not applicable in relation to the third-State defendants, the circumstance that the defendant is habitually resident in a third State does not entail the non-application of the Maintenance Regulation. If the public bodies could not rely on Article 3(b) of the Maintenance Regulation, the complete character of the system established by the Regulation would be affected. In all the scenarios where the debtor is a third-State defendant, a public body would most likely have to assert its claim before the courts of that third-State.

Next, at points 43 to 45, the Opinion adds that unlike in the Brussels regime, under the Maintenance Regulation the place of jurisdiction at the habitual residence of the maintenance creditor is conceptualized not as an exception, but as an alternative general place of jurisdiction.

Then, at points 46 to 47, the Opinion elaborates on the judgment in R. At paragraph 30 of this judgment, it is stated that the objective of the Maintenance Regulation consists in preserving the interest of the maintenance creditor, who is regarded as the weaker party in an action relating to maintenance obligations; Article 3 of that Regulation offers that party, when it acts as the applicant, the possibility of bringing its claim under bases of jurisdiction that do not follow the actor sequitur forum rei principle. In his Opinion, Advocate General emphasizes that the formulation of paragraph 30 of the judgment in R must have been influenced by the factual context of that case. It should not, however, be understood as preventing the public bodies from relying on some specific grounds of jurisdiction of Article 3.

After that, at point 51, the Opinion has recourse to an argument based on historical interpretation: even though a proposal endorsing a solution according to which a public body could bring action only before the courts for the place of habitual residence of the defendant was brought up during the drafting of the Maintenance Regulation, that proposal is not reflected in its final version.

Finally, at points 54 to 60, the Opinion addresses the objectives of the Maintenance Regulation. In particular, at point 59, Advocate General points out that Blijdenstein case law should be discontinued as it seems to contradict the logics of the Regulation – it does not reinforce the protection of the maintenance creditor. In fact, it favors the maintenance debtors once the maintenance of a creditor is covered by the payments of the public body: the debtor is no longer at risk of being sued before the courts of a Member State other than the Member State of his habitual residence.

… and insights on the lessons that may be learned from it:

The above presentation of the arguments developed by Advocate General in his Opinion is far from being extensive. It is best to recommend giving it an attentive lecture as there is much more to bite into. In addition to that, the Opinion raises some arguments that may be relevant in other contexts than that of the case WV, C-540/19.

continuity / adequacy of case law and its reversals

As mentioned before, the Opinion is structured around the question whether Blijdenstein case law should be still applied despite the modification of legal framework. It is interesting to note that, at point 69, the Opinion even anticipates a scenario in which the Court would decide not to follow the proposal of Advocate General. In this context, Advocate General puts forward some modifications that, according to him, should be introduced into the Blijdenstein case law.

The importance of the debate that this question may inspire extends far beyond the scope of the case reported here. When it comes to the interpretation of EU private international law instruments, what factors should be taken into account in assessing whether a pre-existing case law should be reversed? 

coordination between forum and ius

At points 61 to 66, the Opinion offers an additional argument in favor of discontinuation of Blijdenstein and allowing the public bodies to sue before the courts for the place of the creditor’s habitual residence. It argues that the interpretation proposed in the Opinion allows to ensure coordination between forum and ius – a court having jurisdiction under the Maintenance Regulation will, as far as possible, apply its own law.

In fact, since Blijdenstein times, not only the instrument containing the rules on jurisdiction in matters relating to maintenance obligations has changed. The legal landscape was profoundly altered by the common conflict of laws rules of the Hague Protocol on the Law Applicable to Maintenance Obligations. Under the general rule on applicable law of Article 3(1) of the Protocol, obligations shall be governed by the law of the State of the habitual residence of the creditor. As the Opinion notes, according to Article 64(2) of the Maintenance Regulation, a right of a public body to act in place of an individual to whom maintenance is owed or to seek reimbursement of benefits provided to the creditor in place of maintenance shall be governed by the law to which the body is subject. In most instances, a public body subrogating the original maintenance creditor is arguably established in the Member State of that creditor’s residence.

It seems that a similar point has been already tackled in the judgment in Kainz. At paragraph 20, it addresses the question relating to the necessity to ensure coordination between, on the one hand, jurisdiction to settle a dispute on the liability for damage caused by a product [under Article 5(3) of the Brussels I Regulation] and, on the other hand, law applicable to a non-contractual obligations arising to such damage [under Article 5(1) of the Rome II Regulation]. In the judgment in Kainz, that question is answered in the negative.

Yet, the Maintenance Regulation/the Hague Protocol duo seem to follow different logics than the aforementioned Regulations. There must have been a reason to extract the rules on jurisdiction in matters relating to maintenance from the Brussels regime and adopt a new Regulation.

It is true that the Protocol does not set a general rule according to which the maintenance obligation is governed by the law of the forum. As it follows from Article 3(1), it relies heavily on the law for the place of the creditor’s habitual residence.

However, one the one hand, even with its general rule on applicable law of Article 3(1), it can be argued that the Protocol does indirectly promote a coordination between ius and forum. That is the case as long as one accepts that, in practice, the application of the rules of jurisdiction of the Maintenance Regulation leads to the conferral of jurisdiction to the courts for the place of the creditor’s habitual residence (see, to that effect, paragraph 49 of the judgment in KP). On the other hand, as the Opinion remarks at its footnote 47, at least in some scenarios where it would reinforce the situation of the maintenance creditor, the Hague Protocol provides for a subsidiary application of the law of the forum. According to Articles 4(2) and (3) of the Protocol, the law of the forum applies when the creditor is ‘unable to obtain maintenance’ under the law primarily applicable to the maintenance obligation.

Moreover, striving to ensure that a court applies its own law somewhat echoes Recital 27 of the Succession Regulation. As a reminder, this Recital explains, inter alia, that the Regulation is devised so as to ensure that the authority dealing with the succession will, in most situations, be applying its own law.

At point 61 of the Opinion, Advocate General himself qualifies his argument drawn from the existence of the Maintenance Regulation/the Hague Protocol duo as being of a lesser theoretical importance, yet having practical bearing. However, the argument provokes also a more general question: to what extent the coordination of ius and forum is – and if so, in which constellations – a point of consideration in EU private international law? 

 

The Opinion is available in Spanish [original language] and, inter alia, in German and French. There is not English version yet.

 

Erasmus School of Law (Erasmus University Rotterdam) is recruiting five researchers (two postdocs, two PhDs and one parttime associate/endowed/full professor) for the research project Affordable Access to Justice: towards sustainable cost and funding mechanisms for civil litigation in Europe. 

This five year project is funded by the Netherlands Organisation for Scientific Research (NWO), and led by Prof. Xandra Kramer. This five year project will assess new pathways to civil justice funding and cost schemes, with a view to developing a balanced financing system securing access to justice in Europe. It builds onto the ongoing ERC consolidator project Building EU Civil Justice: challenges of procedural innovations – bridging access to justice.

Please contact Xandra Kramer (kramer@law.eur.nl) for more information on the project, and see Vici vacancies 2020 for for the vacancy descriptions, application requirements and procedure. You can apply here till 17 July 2020.

 

By Olivia Tambou

On 12-14 October 2020, the 2nd international Open Search Symposium (OSSYM 2020) will be hosted by the CERN (Geneva). The event is organised by the Open Search Foundation, which militates for the creation of an independent, free and self-determined access to information on the Internet.

You may participate to the Symposium in different ways: with scientific papers, sharing of practical experiences or by introducing concepts and positions during presentations and in the different interactive sessions. Full papers and abstracts presented at the OSSYM 2020 will be published in online proceedings following the event. Interested contributors should send their extended abstract (1 page) or full paper (4-6 pages) for any poster or oral presentation until 6 July 2020 at the following address: https://indico.cern.ch/e/ossym-2020.

Key legal questions to be addressed in the context on the Symposium could be: Competition law, data security/cybersecurity law, General Data Protection Regulation, ePrivacy Regulation, national vs. European law, Private international law, EU copyright legislation, liability, traceability of intellectual property rights and ownership by individuals, organisations and SMEs/corporates, data governance issues, as well as the fairness of digital platform and more globally fundamental rights issues including freedom of expression and protection against hate speech, and interaction with future rules on European digital single market, etc.

Note that the Symposium will be held either at physical meeting or as web-based conference (the final decision is to be taken in July). Registration will open on 16 July 2020 and close on 28 September 2020 (or when maximum number of participants is exceeded).

More information on this event is available here.

Today, AG Szpunar delivered his Opinion in the case of Ellmes Property Services, C-433/19, on the interpretation of Article 24(1) and Article 7(1)(a) of the Brussels I bis Regulation. This case arose from the following facts:

Both parties are co-owners of a house situated in Zell am See, Austria. The applicant, who is the owner of apartment No 10, has his home address at this location. The defendant company, which is the owner of apartment No 20, has its registered office in the United Kingdom. It uses its apartment, which was designated for residential purposes, for tourist purposes by regularly letting it out to holiday guests.

In his action brought before the Bezirksgericht Zell am See (District Court, Zell am See), Austria, the applicant seeks to prevent the use of the apartment for tourist purposes, contrary to its designated use and arbitrarily in the absence of consent of the other co-owners, which interferes with the applicant’s rights of co-ownership. He relied on the jurisdiction referred to in the first alternative in the first subparagraph of Article 24(1) of the Brussels Ia Regulation. The defendant objected on the basis of the lack of local and international jurisdiction.

The court of first instance declined local and international jurisdiction. In its view, the dispute relating to a private-law use agreement between co-owners did not directly concern their rights in rem. The court of second instance allowed the applicant’s appeal and rejected the defence of lack of local and international jurisdiction. It held that the designated use of a property subject to co-ownership was based on the private-law agreement between the co-owners (usually laid down in the co-ownership agreement). The designation for a specific use and the adherence to the use thus defined was one of the absolutely protected rights in rem of a co-owner. The defendant lodged an appeal with the Austrian Oberster Gerichtshof (Supreme Court) against that decision.

In this context, the Austrian Supreme Court referred to the ECJ the following questions:

(1) Is the first alternative in the first subparagraph of Article 24(1) 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 (‘Brussels Ia Regulation’) to be interpreted as meaning that actions brought by a co-owner seeking to prohibit another co-owner from carrying out changes to his property subject to co-ownership, in particular to its designated use, arbitrarily and without the consent of the other co-owners, concern the assertion of a right in rem?

(2) If the first question should be answered in the negative:
Is Article 7(1)(a) of the Brussels Ia Regulation to be interpreted as meaning that the actions referred to in paragraph 1 concern contractual obligations to be performed at the location of the property?

AG Szpunar, after scrutinizing the conditions, relevant case law and the purpose of Article 24(1), held that the application of that provision requires a right in rem which in turn necessitates an erga omnes effect of the underlying legal relationship of the co-owners regulating the modalities of the use of that co-ownership. Whether there was such an erga omnes effect in the concrete case at hand is to be determined by the national court according to the applicable national law. If there is no erga omnes effect, Article 7 (1) (a) will have to be applied to the applicant’s claim in question. This would mean that the national court will have to resort to the law governing that claim in order to determine its place of performance.

The Opinion is available in French [original language] and, inter alia, in German but not yet in English.

 

 

The University of Rijeka, Faculty of Law announced a call for application to the newly opened position of assistant, funded by the Croatian Science Foundation. It is a full-time position for the duration of the project (approximately 4 years) which is focused on research rather than teaching. The candidate will be expected to complete the doctoral studies conducing research on the various aspects of cross-border enforcement in EU under the mentorship of Professor Ivana Kunda, the Head of the Chair of International and European Private Law. Good command of English is required as well as certain level of Croatian. The call was announced yesterday and remains opened for 30 days.

The details of the call are available here, and questions could be addressed to ikunda@pravri.hr.