Conflictoflaws

By Dr Lukas Schmidt (PhD EBS Law School), law clerk (Rechtsreferendar) at the Regional Court of Wiesbaden, Germany

In cross-border insolvencies questions of international jurisdiction might arise either in relation to the opening of an insolvency proceeding as such, or – further down the road – in relation to proceedings deriving from already opened insolvency proceedings. In both cases the European Insolvency Regulation Recast (Regulation 2015/848) provides for answers: According to Article 3 of the Regulation the courts of the Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings. Article 6 of the Regulation provides that the courts in such Member States shall have jurisdiction as well for actions deriving directly from insolvency proceedings and closely linked with them. Both kind of decisions are to be automatically recognized in all other member states, either through Art. 19 (judgments opening insolvency proceedings) or through Art. 32 (other judgments).

Whereas Article 3 is also to be found in the old EIR (Regulation 1346/2000) as is Article 19 (Article 16) and Article 32 (Article 25), Article 6 is a new provision, however based without any doubt on the ECJ´s settled case law (Seagon, C-339/07 and Schmid, C-382/12) on the old EIR. Still on the old regulation, but with effect also for Art. 6 and 32 EIR, the ECJ has now specified in the case UB v. VA and others (C-493-18) the scope and the exclusive nature of the vis attractiva concursus as (now) laid down in Art. 6 of the EIR.

Some facts are necessary to understand the case:

The insolvent debtor UB, a Dutch citizen, owned an apartment and a property complex in France. Although his assets had been frozen by an English court he and his sister VA signed an acknowledgement of debt by which UB acknowledged owing VA the sum of EUR 500 000 in respect of various loans. UB undertook to repay that sum by 22 August 2017 and subsequently mortgaged, in favour of VA, the apartment and the property complex which he owned in France. In March 2010 he had sold the apartment to Tiger, a company founded by VA. On 10 May 2011 insolvency proceedings were opened against UB in the United Kingdom by the Croydon County Court. The Croydon County Court authorised the insolvency administrator, to bring an action before the courts in France in order to obtain a ruling that the sale of the properties and the mortgages granted over those properties were avoidable under the relevant United Kingdom bankruptcy law provisions. The insolvency administrator made use of this authorisation and succeeded before the French Regional Court and the Court of Appeal. However, the Court of Cassation referred the question of international jurisdiction of the French courts (and its recognition) to the ECJ for a preliminary ruling.

By answering the first two referred questions the ECJ has made clear – rather not surprising – that an action brought by the trustee in bankruptcy appointed by a court of the Member State within the territory of which the insolvency proceedings were opened seeking a declaration that the sale of immovable property situated in another Member State and the mortgage granted over it are ineffective as against the general body of creditors falls within the exclusive jurisdiction of the courts of the first Member State.

The ECJ has pointed out that for determining whether actions derive directly from insolvency proceedings not the procedural context of the action is decisive, but its legal basis (the trustee asked the French courts to rule on a declaration of ineffectiveness rather than on an action to set the transactions aside).

Equally insignificant for international jurisdiction to hear an action for the restitution of immovable property to the bankruptcy estate is where those assets are located. The court underlines that the objective of improving the efficiency and speed of cross-border insolvency proceedings is only consistent with concentrating all the actions directly related to the insolvency proceedings before the courts of the Member State within the territory of which those proceedings were opened.

More intriguing and not yet subject to the ECJ’s case law is the question whether a court can confer its international jurisdiction according to Art. 6 EIR. Eventually, this is what the Croydon Country Court did by authorizing the administrator to bring an action before the French courts in order to obtain a ruling that UB´s deals regarding the French properties were avoidable transactions under the relevant United Kingdom bankruptcy law provisions. The referring Court of Cassation therefore asked in his third question if the UK court’s decision authorizing the insolvency administrator to bring an action before the French courts could be classified as a judgment concerning the course of insolvency proceedings within the meaning of Article 25 (now Article 32), which may, on that basis, be recognised with no further formalities, pursuant to that article.

The court’s answer to this question is in line with its decision in Wiemer & Trachte v. Tadzher (C-296/17) in which it already confirmed the exclusive jurisdiction of the courts of the Member State within the territory of which insolvency proceedings have been opened for set aside actions. Hence, the ECJ refused the UK court’s approach quite quickly stating that Article 25 (now 32) EIR cannot be interpreted in such a way as to call into question the said exclusive nature of the international jurisdiction of the courts of the Member State within the territory of which the insolvency proceedings were opened to hear actions which derive directly from those proceedings and which are closely connected with them. According to the ECJ Article 25 EIR merely allows for the possibility that the courts of a Member State within the territory of which insolvency proceedings have been opened may also hear and determine an action which derives directly from those proceedings and is closely connected with them, whether that be the court which opened the insolvency proceedings under Article 3(1), or another court of that same Member State having territorial and substantive jurisdiction.

The Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters will form the object of a conference (in English) scheduled to take place on 23 April 2020 at the Catholic University of Milan.

Speakers include Gilles Cuniberti (University of Luxembourg), Elena D’Alessandro (University of Turin), Francisco Garcimartín Alférez (Autonomous University of Madrid), Marko Jovanovic (University of Belgrade), Antonio Leandro (University of Bari) and Matthias Weller (University of Bonn). Fausto Pocar (University of Milan) will chair the conference while Luca Radicati di Brozolo (Catholic University of Milan) will offer some concluding remarks.

The event benefits from the support of EAPIL, the European Association of Private International Law, and of the Interest Group on Private International Law of SIDI, the Italian Society of International and EU Law.

Attendance is free, but those wishing to attend are required to register by 10 April 2020 through the conference website. In view of the limited seating capacity of the room where the conference will take place, early registration is recommended.

For more information: pietro.franzina@unicatt.it.

Speaker: Professor Alex Mills (Faculty of Laws, UCL)

Chair: Professor Campbell McLachlan QC (Victoria University Wellington)

Date and time: 06 February 2020, 6:00 pm to 7:00 pm

Location: Bentham House, UCL Laws, London, WC1H 0EG, United Kingdom

Abstract

The boundary between public and private legal relations at the international level has become increasingly fluid. State actors engage internationally in private commercial activity, while the privatisation of traditional governmental functions has led to private actors exercising ostensibly public authority, and accelerated the development of a hybridised public-private international investment law. Privatisation as a general phenomenon is much debated, although there has been relatively little focus on the governmental functions which are perhaps of most interest to lawyers – law making, law enforcement, and dispute resolution. This lecture will argue that modern legal developments in the context of private law and cross-border private legal relations can be usefully analysed as two distinct forms of privatisation. First, privatisation of the allocative functions of public and private international law, in respect of both institutional and substantive aspects of regulation. Second, privatisation of the institutional and substantive regulation of private legal relationships themselves, through arbitration and the recognition of non-state law. Analysing these developments through the lens of privatisation highlights a number of important critical questions which deserve greater consideration.

About the Speaker

Alex Mills is Professor of Public and Private International Law in the Faculty of Laws, University College London. His research encompasses a range of foundational issues across public and private international law, as well as international investment law and commercial arbitration. He has degrees in Philosophy and Law from the University of Sydney, and an LLM and PhD (awarded the Yorke Prize) from the University of Cambridge, where he also taught before joining UCL. His publications include ‘Party Autonomy in Private International Law’ (CUP, 2018), ‘The Confluence of Public and Private International Law’ (CUP, 2009), and (co-authored) ‘Cheshire North and Fawcett’s Private International Law’ (OUP, 2017). He was awarded the American Society of International Law’s Private International Law Prize in 2010, has Directed Studies in Private International Law at the Hague Academy of International Law, and is a member of Blackstone Chambers Academic Advisory Panel and the Editorial Board of the International and Comparative Law Quarterly.

The organisors request you to consult for more information and to register for the event here.

The event is free to attend. The following URL provides full information and registration details: https://www.eventbrite.com/e/the-development-of-private-international-law-in-the-uk-post-brexit-tickets-89779245139

Date: Friday 28th February 2020, 9am-5pm.

Location: Queen Mary University of London, 67-69 Lincoln’s Inn Fields, Room 3.1, London, WC2A 3JB

This is the first of four public AHRC workshops on Private International Law after Brexit from global, European, Commonwealth and intra-UK perspectives.

About the event

With Brexit having taken place on 31 January 2020 this workshop comes at an ideal time to focus on how private international law in the UK should develop once the implementation period for the UK leaving the EU has finished (which under UK law should be on 31 December 2020). Several eminent speakers will address the issue from four key perspectives:

• Global – Professor Trevor Hartley LSE
• Commonwealth – Professor David McClean, University of Sheffield
• EU/EEA – Michael Wilderspin – Commission Legal Service
• Intra-UK – Dr Kirsty Hood QC, Faculty of Advocates, Scotland

There will be a discussant for each perspective and then plenty of time for questions and comments after each main speaker.

The workshop will also hear from the organisers of this AHRC Research Network:

• Professor Paul Beaumont, University of Stirling
• Dr Mihail Danov, University of Exeter (who will report on his English pilot study)

Furthermore some empirical research findings will be shared by:

• Professor Sophia Tang, University of Newcastle
• Dr Jayne Holliday, University of Stirling

Those interested in advising on the development of this Research Network are welcome to stay for an informal meeting to be held at the end of the workshop between 5.10 and 6pm.

This event is free and open to all but registration is required because spaces are limited.

Professor Paul Beaumont and Dr Mihail Danov would like to thank Queen Mary University of London for their wonderful support by hosting the first three workshops and also AHRC for funding the Research Network.

Future Events

The second and third workshop of this series will be held on Wednesday 1st and Thursday 2nd April 2020 in the same location, Queen Mary University of London, Room 3.1, 67-69 Lincoln’s Inn Field, London and will focus on the future development of private international law in the UK in relation to commercial law (April 1) and family law (April 2).

The final workshop will be held on Thursday 2nd July 2020. This will be held as a joint venture with the Journal of Private International Law and will be held at Reed Smith, Broadgate Tower, 20 Primrose Street, EC2A 2RS

Tickets for these events will be available shortly.

by Matthias Lehmann

Smart contracts and the conflict of laws is a widely discussed topic today (see for instance the post by Giesela Rühl). A new contribution to this debate comes from ISDA, the International Swaps and Derivatives, in collaboration with the Singapore Academy of Law and leading law firms. Also involved is the provider of an existing smart contract platform (Corda), which guarantees the paper’s practical relevance. The analysis focuses on a potential smart derivative contract to be implemented on Corda. 

The authors of the paper take the view that a court in Singapore and the UK would have little difficulties in determining the law governing such a contract – it would simply be the one chosen in the derivatives master agreement. The same goes for the choice of the competent court. In this context, it is important to note that only B2B transactions are considered, with no consumer contracts being involved. The authors also see little risk for the intervention of public policy rules.

Collateralised derivative transactions, which are of utmost practical importance, are more problematic to the extent that the collateral is governed by the lex rei sitae. But the paper also sees a way out here: The collateral could be represented by a token (through so-called tokenisation). Given that tokens have no real geographic location, the law applicable to the token could be determined again by a choice of the parties. 

The paper even suggests an innovative way to avoid the need for enforcement: The parties could agree that the “notary” of the platform must implement any judgment rendered by the chosen court. In this way, the need to apply for cross-border recognition and enforcement in the country in which the platform is established would fall away. 

Whether this proposal works in practice remains to be seen. One may reasonably fret that the platform will not enjoy complete immunity from the country in which it is established. As long as the courts of this country are liberal, there is however little reason for fear. The Singapore High Court has already shown its readiness to extending property protection to the holders of cryptocurrencies. The country could thus provide a safe haven for the operation of a smart derivatives platform, but that does not exclude the continuing power of its courts to intervene and the possible application of national law, e.g. in case of an insolvency of the platform provider.

By Tasha Joseph

Teams are invited to register for the PAX Moot, Asser Round 2020. Registration will be possible until March 30th. However we do advise teams to register as soon as possible. The registration fee is 100 Euros per team.

The moot court competition comprises a written round and oral round. For the written round each team will be required to submit a written assignment as requested by the case (for details, see Rules and Procedures). The oral round will be scheduled as a 2 full-day event on 28-29 May 2020, preceded by a welcoming event for all teams on 27 May (evening). The first day of the competition (general rounds) will be held at the University of Antwerp. On the second day, the participating teams will be invited to the EU Commission in Brussels, where the semi-finals and final rounds will be held.

This year, we have invited Alex Layton QC, a leading specialist in private international law, to draft the case and be a member of the final panel of the oral round.

The organising team hopes that this year’s competition will attract many teams from EU Member States and beyond! Besides the collective prizes for best team and best written submission, one member of the final winning team will be given the “Best Speaker Award” of the moot, and our partner, Herbert Smith Freehills, has graciously invited the next recipient of that award for an internship in its Paris office!

For further information please visit www.paxmoot.com, or email us at info@paxmoot.com.

Sincerely,

PAX Moot Team

The Conference represents the final event of the JUDGTRUST Project (2018-2020), funded by the Justice Programme of the European Union (2014-2020). The objective of the Project is to identify best practices and to provide guidelines in the interpretation and application of Regulation 1215/2012 (BI-bis). The JUDGTRUST Project is coordinated by the T.M.C. Asser Instituut and carried out in partnership with the University of Hamburg, the University of Antwerp and the Internationaal Juridisch Instituut.

The Conference will host panels on, inter alia, the scope of application, relationship with other instruments, rules on jurisdiction, provisional measures, as well as enforcement and recognition of foreign judgments. Additionally, the key findings from the National Reports of the EU Member States will be presented. It aims to bring together academics, policy makers and legal practitioners. It will take place on Thursday 24 September 2020 at the T.M.C. Asser Instituut, The Hague. 

More information will be provided on the Project website (https://www.asser.nl/judgtrust) shortly.

Written by Prof. Dr. Stefan Arnold, University of Münster

Digitization, Artificial Intelligence and the blockchain technology are core elements of a historic transformation of modern society. Such transformations necessarily challenge traditional legal concepts. Hitherto, the academic discourse is much more intense in the area of substantial private law than it is in the area of Private International Law. Thus, a conference on the specific challenges of Artificial Intelligence and Digitization for Private International Law was long overdue. Stefan Arnold and Gerald Mäsch of the Institute of International Business Law (WWU Münster) organized a conference with that specific focus on November 8th at Münster University. The title of the conference was »Conflict of laws 4.0: Artificial Intelligence, smart contracts and bitcoins as challenges for Private International Law«. Around a hundred legal scholars, practitioners, doctoral candidates and students attended the conference.

The first speaker, Wolfgang Prinz of Fraunhofer Institute and Aachen University, provided insight into the necessary technical background. His presentation made clear that blockchain technology is already a key factor in international contracting, as e.g. in agricultural crop insurance policies. This introduction into complex digital processes to a largely non-tech-expert audience helped kick off the first round of vivid discussion. 

Michael Stürner of Konstanz University devoted his presentation to smart contracts and their role in applying the Rome I Regulation. After raising the question of a specific lex digitalis, he focused on the scope of the Regulation with regard to qualification, choice of law and the objective connecting factors. While he concluded that the respective contracts can mainly be treated on the basis of the Rome I Regulation, he also took a quick glance on subsequent questions in terms of virtual securities and the statute of form.

In the third presentation, Stefan Arnold of Münster University explored the issues Artificial Intelligence raises concerning party autonomy and choice of law. At the beginning of his presentation, he emphasized that these questions are closely related to the different levels of AI and their (lack of) legal capacity: As long as machines act as simple executors of human will, one should establish a normative attribution to the human being in question. For the cases in which the AI exceeds this dependency, Arnold claimed there was no answer in the Rome I Regulation, leaving the way open for the national rules, primarily Art. 5 II EGBGB. Finally, he discussed possibilities de lege ferenda such as applying the law of the country of effect and future gateways for the ordre public.

Jan Lüttringhaus of Hannover University presented about questions of insurance and liability in the context of Private International Law. In order to underline the importance of this topic, he referred to a provision in the usual insurance conditions presupposing the application of German national law. In a first step, he examined the international civil procedure law of the Brussels I bis Regulation as well as potential difficulties with state immunity. The second part of his lecture was dedicated to the problem of determining the applicable law in situations that feature a decentralization of injury and damage.

In the following presentation, Gerald Mäsch of Münster University proposed a solution for finding the applicable law to Decentralized Autonomous Organizations (DAOs). When legal practitioners try to determine which law applies, they usually resort to the traditional rules of domicile and establishment. Since DAOs have neither of the two, it cannot be subjected to the law of a specific nation by these two approaches. Leaving the international corporate law behind, Mäsch called for a return to the basics: If there is no primary choice of law, one should plainly refer back to the most significant relationship as stated by Savigny. Acknowledging the regular lack of publicity, he nonetheless insisted that this solution answered the parties’ needs at the best possible rate.

Bettina Heiderhoff of Münster University presented on how questions of liability can be solved in the context of autonomous systems. She started her presentation by raising the question whether autonomous systems could simply fall into the scope of the Product Liability Directive. Following up, the speaker focused on new fund and insurance systems and the deriving problems with regard to conflict of laws. She expanded upon Art. 5 of the Rome II Regulation and its applicability on autonomous systems, emphasizing the legislator’s intention behind the respective rules. 

In the following presentation, Matthias Lehmann of Bonn University examined the interaction between blockchain, bitcoin and international financial market law. After a short introduction into the basics of Distributed Ledger Technology (DLT), he shed light onto problems in international banking supervision and how they could be solved by implementing DLT-based solutions. He closed with a plea for common international regulations regarding cryptocurrencies.

Concluding remarks from a practitioners’ point of view were made by Ruth-Maria Bousonville and Marc Salevic from Pinsent Masons LLP. The speakers shared their perspective on the topics that had been raised by their predecessors and how practitioners deal with these questions in creating solutions for their clients. 

The Graduate Programm “Dynamic Integration” at the Faculty of Law of Humboldt-University Berlin wishes to fill two PhD positions (fellowships), funded by the German Research Foundation (Deutsche Forschungsgemeinschaft). Applications from private (international) lawyers are especially welcomed.

For more information see here.

Advocate General Szpunar proposes that the Court should rule that the victims of the sinking of a ship flying the Panamanian flag can bring an action for damages under the Brussels I Regulation as a “civil and commercial matter” in the sense of Article 1 before the Italian courts against the Italian bodies which classified and certified that ship.

At para. 47, the Opinion deals with the effect of customary international law on the scope ratione materiae of the Brussels I Regulation and holds:

[t]he EU legislature might have drawn inspiration from customary international law and taken general guidance from it in so far as concerns the distinction between acta iure imperii and acta iure gestionis. However, I am of the opinion that it did not have recourse to the concept of immunity from jurisdiction in order to define precisely the reach of EU rules in the area of judicial cooperation in civil matters having cross-border implications or, in particular, the material scope of Regulation No 44/2001.

At para. 59, the Opinion explains the concept of “civil and commercial matters” abstractly with a view to previous case law and holds:

[t]he Court has repeatedly held that it is the exercise of public powers by one of the parties to the case, inasmuch as it exercises powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals, that excludes such a case from civil and commercial matters within the meaning of Article 1(1) of that regulation. On that basis the Court has already held that an action whereby a tax authority of one Member State claims damages for loss caused by a tortious conspiracy to commit value added tax (VAT) fraud in that Member State falls within the concept of ‘civil and commercial matters’, provided that the tax authority is in the same position as a person governed by private law in the action in question. I infer from this that, in order to determine whether or not Regulation No 44/2001 is applicable in a case, it is not necessary to focus upon the field or area to which belongs the act in respect of which liability is alleged; it is necessary to consider whether that act proceeds from the exercise of public powers

As an interim conclusion, the Opinion states, at paras. 99 et seq.:

99. …[t]he mere fact that the defendants carried out the acts at issue upon delegation from a State does not in itself mean that the dispute in which liability for those acts is alleged falls outside the scope ratione materiae of Regulation No 44/2001. Secondly, the fact that those acts were carried out on behalf of, and in the interests of the delegating State does not have that effect either. Thirdly and last, the fact that those operations were carried out in performance of international obligations of the delegating State in no way calls the foregoing conclusions into question.

100. Nevertheless, whenever recourse is had to public powers when carrying out acts, Regulation No 44/2001 will not as a result apply ratione materiae in a dispute in which liability for those acts is alleged. Given the range of powers exercised by the defendants in carrying out the classification and certification of the Al Salam Boccaccio ’98, those operations cannot be regarded as proceeding from the exercise of public powers.

101.  In light of the foregoing, it should be held that Article 1(1) of Regulation No 44/2001 is to be interpreted as meaning that an action for damages brought against private-law bodies concerning classification and certification activities carried out by those bodies upon delegation from a third State, on behalf of and in the interests of that State, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

After rejecting jurisdictional immunity for the defendants, the Advocate General concluded, at para. 155:

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is to be interpreted as meaning that an action for damages brought against private-law bodies in respect of classification and certification activities carried out by those bodies as delegates of a third State, on behalf of that State and in its interests, falls within the concept of ‘civil and commercial matters’ within the meaning of that provision.

The principle of customary international law concerning the jurisdictional immunity of States does not preclude the application of Regulation No 44/2001 in proceedings relating to such an action.

The Opinion can be found here.

Written by Frédéric Breger, Legal Officer at the Permanent Bureau of the Hague Conference on Private International Law (HCCH)

Volume 24 of the Judges’ Newsletter, the HCCH publication on international child protection, is now available on the HCCH website! This Volume features a Special Focus on “Urgent Measures of Protection” as provided for under Article 11 of the HCCH 1996 Child Protection Convention. Article 11 gives jurisdiction to the authorities of a Contracting Party where the child is found present – albeit not habitually resident – to take measures of protection for that child in cases of urgency. You will find in particular contributions from judges on case law rendered under Article 11 of the 1996 HCCH Child Protection Convention in various jurisdictions. This Volume is available in English only at the moment; the French version will be published in due course.

The HCCH news item is available here.

Written by Dr Rishi Gulati, Barrister, Victorian Bar, Australia; LSE Fellow in Law, London School of Economics

The interaction between public and private international law is becoming more and more manifest. There is no better example of this interaction than the Shape v Supreme litigation ongoing before Dutch courts, with the most recent decision in this dispute rendered in December 2019 in Supreme Headquarters Allied Powers Europe (“SHAPE”) et al v Supreme Site Service GmbH et al (Supreme), COURT OF APPEAL OF ‘s-HERTOGENBOSCH, Case No. 200/216/570/01, Ruling of 10 December 2019 (the ‘CoA Decision’). I first provide a summary of the relevant facts. Second, a brief outline of the current status of the litigation is provided. Third, I make some observations on how public and private international law interact in this dispute. 

1 Background to the litigation

In 2015, the Supreme group of entities (a private actor) brought proceedings (the ‘Main Proceedings’) against two entities belonging to the North Atlantic Treaty Organisation (‘NATO’) (a public international organisation) before a Dutch district court for alleged non-payments under certain contracts entered into between the parties for the supply of fuel (CoA Decision, para 6.1.12). The NATO entities against whom the claims were brought in question were Shape (headquartered in Belgium) and Allied Joint Force Command Headquarters Brunssum (JFCB) (having its registered office in the Netherlands). JFCB was acting on behalf of Shape and concluded certain contracts (called BOAs) with Supreme regarding the supply of fuel to SHAPE for NATO’s mission in Afghanistan carried out for the International Security Assistance Force (ISAF) created pursuant to a Chapter VII Security Council Resolution following the September 11 terrorist attacks in the United States (CoA Decision, para 6.1.8). While the payment for the fuels supplied by Supreme on the basis of the BOAs was made subsequently by the individual states involved in the operations in Afghanistan, ‘JFCB itself also purchased from Supreme. JFCB paid Supreme from a joint NATO budget. The prices of fuel were variable. Monitoring by JFCB took place…’ (CoA Decision, para 6.1.9. The applicable law of the BOAs was Dutch law but no choice of forum clause was included (CoA Decision, para 6.1.9). There was no provision for arbitration made in the BoAs (CoA Decision, para 6.1.14.1). However, pursuant to a later Escrow Agreement concluded between the parties, upon the expiry of the BoAs, Supreme could submit any residual claim it had on the basis of the BOAs to a mechanism known as the Release of Funds Working Group (‘RFWG’). Pursuant to that agreement, an escro account was also created in Belgium. The RFWG comprises of persons affiliated with JFCB and SHAPE, in other words, NATO’s representatives (CoA Decision, para 6.1.10). Supreme invoked the jurisdiction of Dutch courts for alleged non-payment under the BOAs. The NATO entities asserted immunities based on their status as international organisations (‘IOs’) and succeeded  before the CoA meaning that the merits of Supreme’s claims has not been tested before an independent arbiter yet (more on this at 2). 

In a second procedure, presumably to protect its interests, Supreme also levied an interim garnishee order targeting Shape’s escrow account in Belgium (the ‘Attachment Proceedings’) against which Shape appealed (see here for a comment on this issue). The Attachment Proceedings are presently before the Dutch Supreme Court where Shape argued amongst other things, that Dutch courts did not possess the jurisdiction to determine the Attachment Proceedings asserting immunities from execution as an IO (see an automated translation of the Supreme Court’s decision here (of course, no guarantees of accuracy of translation can be made)). The Dutch Supreme Court made a reference for a preliminary ruling to the European Court of Justice (‘CJEU’) (case C-186/19). It is this case where questions of European private international law have become immediately relevant. Amongst other issues referred, the threshold question before the CJEU is:

Must 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 (recast) (OJ 2012 L 351, p. 1 [Brussels Recast] be interpreted as meaning that a matter such as that at issue in the present case, in which an international organisation brings an action to (i) lift an interim garnishee order levied in another Member State by the opposing party, and (ii) prohibit the opposing party from levying, on the same grounds, an interim garnishee order in the future and from basing those actions on immunity of execution, must be wholly or partially considered to be a civil or commercial matter as referred to in Article 1(1) of the Brussels I Regulation (recast)? 

Whether the claims pertinent to the Attachment Proceedings constitute civil and commercial matters within the meaning of Article 1 of the Brussels Recast is a question of much importance. If it cannot be characterised as civil and commercial, then the Brussels regime cannot be applied and civil jurisdiction will not exist.  If jurisdiction under the Brussels Recast does not exist, then questions of IO immunities from enforcement become irrelevant at least in an EU member state. The CJEU has not yet ruled on this reference. 

2 The outcome so far 

Thus far, the dispute has focused on questions of jurisdiction and IO immunities. These issues arise in somewhat different senses in both sets of proceedings. 

The Main Proceedings

Shape and JFCB argue that Dutch courts lack the jurisdiction in public international law to determine the claims brought by Supreme as NATO possesses immunities given its status as an IO (CoA Decision, para 6.1.13). The rules and problems with the law on IO immunities have been much discussed, including by this author in this very forum. Two things need noting. First, in theory at least, the immunities of IOs such as NATO are delimited by the concept of ‘functionalism’ – IOs can only possess those immunities that are necessary to protect its functional independence. And second, if an IO does not provide for a ‘reasonable alternative means’ of dispute resolution, then national courts can breach IO immunities to ensure access to justice. According to the district court, as the NATO entities had not provided a reasonable alternative means of dispute resolution to Supreme, the former’s immunities could be breached. The CoA summarised the district court’s decision on this point as follows (CoA Decision, para 6.1.14): 

[T]he lack of a dispute settlement mechanism in the BOAs, while a petition to the International Chamber of Commerce was agreed in a similar BOA agreed with another supplier, makes the claim of an impermissible violation of the right to a fair trial justified. The above applies unless it must be ruled that the alternatives available to Supreme comply with the standard in the Waite and Kennedy judgments: there must be “reasonable means to protest effectively rights”. The District Court concludes that on the basis of the arguments put forward by the parties and on the basis of the documents submitted, it cannot be ruled that a reasonable alternative judicial process is available.

The CoA disagreed with the district court. It said that this was not the type of case where Shape and JFCB’s immunities could be breached even if there was a complete lack of a ‘reasonable alternative means’ available to Supreme (CoA Decision, para 6.7.8 and 6.7.9.1). This aspect of the CoA’s Decision was made possible because of the convoluted jurisprudence of the European Court of Human rights where that court has failed to provide precise guidance as to when exactly IO immunities can be breached for the lack of a ‘reasonable alternative means’, thereby giving national courts considerable leeway. The CoA went on to further find that in any event, Supreme had alternative remedies: it could bring suit against the individual states part of the ISAF action to recover its alleged outstanding payments (CoA Decision, para 6.8.1); and could have recourse to the RFWG (CoA Decision, para 6.8.4). This can hardly be said to  constitute a ‘reasonable alternative means’ for Supreme would have to raise claims before the courts of multiple states in question creating a risk of parallel and inconsistent judgments; the claims against a key defendant (the NATO entities) remain unaddressed; and the RFWG comprises representatives of the defendant completely lacking in objective independence. Perhaps the CoA’s decision was driven by the fact that Supreme is a sophisticated commercial party who had voluntarily entered into the BOAs where the standards of a fair trial in the circumstances can be arguably less exacting (CoA Decision, para 6.8.3).

On the scope of Shape’s and JFCB’s functional immunities, the CoA said that ‘if immunity is claimed by SHAPE and JFCB in respect of (their) official activities, that immunity must be granted to them in absolute terms’ (CoA Decision, para 6.7.9.1). It went on to find:

The purchase of fuels in relation to the ISAF activities, to be supplied in the relevant area of operations in Afghanistan and elsewhere, is directly related to the fulfilment of the task of SHAPE and JFCB within the framework of ISAF, so full functional immunity exists. The fact that Supreme had and has a commercial contract does not change the context of the supplies. The same applies to the position that individual countries could not invoke immunity from jurisdiction in the context of purchasing fuel. What’s more, even if individual countries – as the Court of Appeal understands for the time being before their own national courts – could not invoke immunity, this does not prevent the adoption of immunity from jurisdiction by SHAPE and JFCB as international organisations that, in concrete terms, are carrying out an operation on the basis of a resolution of the United Nations Security Council CoA Decision, para 6.7.9.2).

Acknowledging that determining the scope of an IO’s functional immunity is no easy task, the CoA’s reasoning is somewhat surprising. The dispute at hand is a contractual dispute pertaining to alleged non-payment under the BOAs. One may ask the question as to why a classical commercial transaction should attract functional immunity? Indeed, other IOs (international financial institutions) have included express waiver provisions in their treaty arrangements where no immunities exist in respect of business relationships between an IO and third parties (see comments on the Jam v IFC litigation ongoing in United States courts by this author here). While NATO is not a financial institution, it should nevertheless be closely inquired as to why NATO should possess immunities in respect of purely commercial contracts it enters into. This is especially the case as the CoA found that the NATO entities in question did not possess any treaty based immunities (CoA Decision, para 6.6.7), and upheld its functional immunities based on customary international law only (CoA Decision, para  6.7.1), a highly contested issue (see M Wood, ‘Do International Organizations Enjoy Immunity Under Customary International Law?’ (2013) 10 IOLR 2). It is likely that the CoA Decision would be appealed to the Dutch Supreme Court and any further analysis must await a final outcome.

The Attachment Proceedings

The threshold question in the Attachment Proceedings is whether Dutch courts possess civil jurisdiction under the Brussels Recast to determine the issues in that particular case. If the claim is not considered civil and commercial within the meaning of Article 1 of the Brussels Recast, then no jurisdiction exists under the rules of private international law and the claim comes to an end, with the issue of immunities against enforcement raised by the NATO entities becoming superfluous. This is because if a power to adjudicate does not exist, then the question on the limitations to its exercise due to any immunities obviously becomes irrelevant. Perhaps more crucially, after the CoA Decision, the ongoing relevance of the Attachment Proceedings has been questioned. As has been noted here:

At the public hearing in C-186/19 held in Luxembourg on 12 December, the CJEU could not hide its surprise when told by the parties that the Dutch Appellate Court had granted immunity of jurisdiction to Shape and JCFB. The judges and AG wondered whether a reply to the preliminary reference would still be of any use. One should take into account that the main point at the hearing was whether the “civil or commercial” nature of the proceedings for interim measures should be assessed in the light of the proceedings on the merits (to which interim measures are ancillary, or whether the analysis should solely address the interim relief measures themselves.

Given that a Supreme Court appeal may still be filed in the Main Proceeding potentially reversing the CoA Decision, the CJEU’s preliminary ruling could still be of practical relevance.  In any event, in light of the conceptual importance of the central question regarding the scope of the Brussels Recast being considered in the Attachment Proceeding, any future preliminary ruling by the CJEU is of much significance for European private international law. Summarising the CJEU’s approach to the question at hand, the Dutch Supreme Court said:

The concept of civil and commercial matters is an autonomous concept of European Union law, which must be interpreted in the light of the purpose and system of the Brussels I-bis Regulation and the general principles arising from the national legal systems of the Member States.  In order to determine whether a case is a civil or commercial matter, the nature of the legal relationship between the parties to the dispute or the subject of the dispute must be examined.  Disputes between a public authority and a person governed by private law may also fall under the concept of civil and commercial matters, but this is not the case when the public authority acts in the exercise of public authority.  In order to determine whether the latter is the case, the basis of the claim brought and the rules for enforcing that claim must be examined.  For the above, see, inter alia, ECJ 12 September 2013, Case C-49/12, ECLI: EU: C: 2013: 545 (Sunico), points 33-35, ECJ 23 October 2014, Case C ? 302/13, ECLI: EU: C: 2014: 2319 (flyLal), points 26 and 30, and CJEU 9 March 2017, case C-551/15, ECLI: EU: C: 2017: 193 (Pula Parking), points 33-34 (see the automated translation of the Supreme Court’s decision cited earlier, para 4.2.1). 

There is not the space here to explore the case law mentioned above in any detail. Briefly, if the litigation was taken as a whole with the analysis taking into account the nature of the Main Proceedings as informing the characterisation of the Attachment Proceedings , there would be a close interaction between the scope of functional immunity and the concept of civil and commercial. If an excessively broad view of functional immunity is taken (as the CoA has done), then it becomes more likely that the matter will not be considered civil and commercial for the purposes of the Brussels system as the relevant claim/s can said to arise from the exercise of public authority by the defendants. However, as I said earlier, it is somewhat puzzling as to why the CoA decided to uphold the immunity of the defendants in respect of a purely commercial claim. 

However, it is worth noting that in some earlier cases, while the CJEU seem to take a relatively narrow approach to the scope of the Brussels system (CJEU Case C-29/76, Eurocontrol). More recent case law has taken a broader view.  For example, in Pula Parking, para. 39, the CJEU said ‘Article 1(1) of Regulation No 1215/2012 must be interpreted as meaning that enforcement proceedings brought by a company owned by a local authority…for the purposes of recovering an unpaid debt for parking in a public car park the operation of which has been delegated to that company by that authority, which are not in any way punitive but merely constitute consideration for a service provided, fall within the scope of that regulation’. If the true nature and subject of Supreme’s claims are considered,  it is difficult to see how they can constitute anything but civil and commercial within the meaning of the Brussels system in light of recent case law, with the issue of IO immunities a distraction from the real issues. It will be interesting to see if the CJEU consolidates its recent jurisprudence or prefers to take a narrower approach.

3 The interaction between public and private international law?

In the Main Proceedings, in so far as civil jurisdiction is concerned, already, the applicable law to the BOAs is Dutch law and Dutch national courts are perfectly suited to take jurisdiction over the underlying substantive dispute given the prevailing connecting factors. As the CoA determined that the NATO entities tacitly accepted the jurisdiction of the Dutch courts the existence of civil jurisdiction does not seem to be at issue (CoA Decision, para 6.5.3.4). Clearly, in a private international law sense, Dutch courts are manifestly the suitable forum to determine this claim. 

However, on its face, the norms on IO immunities and access to justice require balancing (being issues relevant to both public and private international law). As the district court found, if an independent mechanism to resolve a purely commercial dispute (such as an arbitration) is not offered to the claimant,    IO immunities can give way to ensure access to justice. Indeed, developments in general international law require the adoption of a reinvigorated notion of jurisdiction where access to justice concerns should militate towards the exercise of jurisdiction where not doing so would result in a denial of justice. Mills has said:

The effect of the development of principles of access to justice in international law also has implications when it comes to prohibitive rules on jurisdiction in the form of the immunities recognised in international law…Traditionally these immunities have been understood as ‘minimal’ standards for when a state may not assert jurisdiction — because the exercise of jurisdiction was understood to be a discretionary matter of state right, there was no reason why a state might not give more immunity than required under the rules of international law. The development of principles of access to justice, however, requires a state to exercise its jurisdictional powers, and perhaps to expand those jurisdictional powers as a matter of domestic law to encompass internationally permitted grounds for jurisdiction, or even to go beyond traditional territorial or nationality-based jurisdiction (A Mills, ‘Rethinking Jurisdiction in International Law’ (2014) British Yearbook of International Law, p. 219).

The Main Proceedings provide an ideal case where civil jurisdiction under private international law should latch on to public international law developments that encourage the exercise of national jurisdiction to ensure access to justice. Not only private international law should be informed by public international law developments, the latter can benefit from private international law as well. I have argued elsewhere that private international law techniques are perfectly capable of slicing regulatory authority with precision so that different values (IO independence v access to justice) can both be protected and maintained at the same time (see here). Similarly, in the Attachment Proceedings, a reinvigorated notion of adjudicative jurisdiction also demands that the private and public properly inform each other. Here, it is of importance that the mere identity of the defendant as an international public authority or the mere invocation of the pursuit of public goals (such as military action) does not detract from properly characterising the nature of a claim as civil and commercial. More specifically, any ancillary proceeding to protect a party’s rights where the underlying dispute is purely of a commercial nature ought to constitute a civil and commercial matter within the meaning of the Brussels system. Once civil jurisdiction in a private international law sense exists, then any immunities from enforcement asserted under public international law ought to give way to ensure that the judicial process cannot be frustrated by lack of enforcement at the end. It remains to be seen what approach the CJEU takes to these significant and difficult questions where the public and private converge.  

To conclude, only a decision on the merits after a full consideration of the evidence can help determine whether Supreme’s (which itself is accused of fraud) claims against Shape et al can be in fact substantiated. In the absence of an alternative remedy offered by the NATO entities, if the Dutch courts do not exercise jurisdiction, we may never know whether its claims are in fact meritorious. 

written by Claudia Madrid Martínez

On 28 April 2017, the government of Nicolás Maduro deposited with the General Secretariat of the Organization of American States (OAS), a document whereby he expressed his “irrevocable decision to denounce the Charter of the Organization of American States (OAS) pursuant to Article 143 thereof, thereby initiating Venezuela’s permanent withdrawal from the Organization.”

Before the two years of the transition regime that the OAS Charter provides for cases of retirement from the Organization (art. 143), on 8 February 2019, Juan Guaidó, president of the National Assembly and interim president of the Republic, wrote to the OAS to “reiterate and formally express the decision of the Venezuelan State to annul the supposed denunciation of the OAS Charter, for Venezuela to be able to remain a member state of the Organization.”

In its session of 9 April 2019, the OAS Permanent Council accepted the representation appointed by the National Assembly of Venezuela. However, on 27 April of the same year, the Foreign Ministry, representing Nicolás Maduro, issued a statement informing that “With the denunciation of the OAS Charter made by the government of the Bolivarian Republic of Venezuela on 27 April 2017, within the framework of what is contemplated in article 143; as of this date, no instrument signed and / or issued by the OAS will have a political or legal effect on the Venezuelan State and its institutions”.

This political situation has impacted the practical application of the Inter-American Conventions issued by the Specialized Conferences on Private International Law (CIDIP, by its acronym in Spanish). Remember that within the framework of CIDIP, Venezuela has ratified fourteen instruments on bills of exchange, promissory notes and bills, international commercial arbitration, letters rogatory, taking of evidence abroad, powers of attorney to be used abroad, checks, commercial companies, extraterritorial enforcement of foreign judgments and arbitral awards, information on foreign law, general rules, international child abduction, and international contracts.

For Venezuela these conventions entered into force once the requirements for their validity established in the Constitution and the Vienna Convention on the Law of Treaties had been met. The rules of this convention are considered customary, since Venezuela has not ratified this instrument.

We must consider that the Inter-American Conventions are open conventions, which allow the accession of States not party to the OAS. Spain, for example, has accessed to conventions on letters rogatory and on information on foreign law.

Besides that, none of the Conventions has been denounced or incurred in causes of nullity or suspension, nor has there been an impossibility for performance, nor has therebeen a fundamental change in the circumstances, in the terms of articles 53, 57, 58, 60, 61, 62 of the Vienna Convention.

Although Venezuela has broken diplomatic relations with some States parties of the OAS, such relations are not indispensable for the application of Inter-American Conventions, even though in some cases cooperation is regulated through central authorities.

Another important issue is the independence of the Inter-American Conventions. Since the OAS is not an integration system, its treaties must pass the approval and ratification or accession process, because they are not covered by the characteristics of supranationality or its equivalent, such as occurs in the Andean Community or the European Union.

In any case, the situation is not clear. Article 143 of the OAS Charter provides that when “the General Secretariat receives a notice of denunciation, the present Charter shall cease to be in force with respect to the denouncing State, which shall cease to belong to the Organization after it has fulfilled the obligations arising from the present Charter”. There is no reference to the treaties approved within it.

Unfortunately, this situation has been reflected in the decisions of our courts. So far there have been two decisions of the highest court in which the Inter-American codification is set aside. In both, exequatur decisions, the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards was not applied.

The Civil Chamber of the Supreme Court of Justice issued the first one, under number 0187 on 30 May 2019 (see also here). This decided the exequatur of an Ecuadorian divorce judgment and stated:

“Although, our Republic has signed the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards with the Republic of Ecuador, it is no less true that, the Bolivarian Republic of Venezuela formalized its final retirement from the OAS, by letter of 27 April 2019, as a result, the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, approved in Montevideo, Uruguay in 1979, endorsed by the Department of International Law of the Organization of American States, ceased to have its effects in our country.

Therefore, this exequatur will be reviewed in the light of the Private International Law Act, according to the requirements set forth in article 53 as this is the rule of Private International Law applicable in the specific case”.

In this case, the Chamber bases its decision on the fact that in the preamble of the Inter-American Convention, the States parties to the OAS are indicated as participants and that the deposit of the instrument of ratification was made before the OAS. It should be noted that neither this nor any other Inter-American Convention has been denounced by Venezuela.

In the second decision, issued by the Social Chamber of the Supreme Court under number 0416, on 5 December 2019 (see also here) on the occasion of the exequatur of a Mexican divorce judgment, there is not even an argument as to why not apply the Inter-American Convention. In it, the Social Chamber only asserted:

“In this case, it is requested that a judgment issued by a court in the United Mexican States, a country with which the Bolivarian Republic of Venezuela has not signed international treaties on the recognition and enforcement of judgments, be declared enforceable in the Bolivarian Republic of Venezuela through the exequatur procedure; for this reason, and following the priority order of the sources in the matter, the rules of Venezuelan Private International Law must be applied”.

The fundamental role of Venezuela in Inter-American codification through the work of Gonzalo Parra-Aranguren and Tatiana B. de Maekelt is not a secret to anyone. It is unfortunate that a political decision attempts to weaken the Venezuelan system of Private International Law. We insist that ignoring the Inter-American Conventions not only constitutes a breach of the obligation of the State to comply with existing treaties, but also of the internal rules that, like article 1 of the Venezuelan Private International Law Act, require the preferential application of the Public International Law rules, in particular those established in international treaties.

The Annual Survey of American Choice-of-Law Cases for 2019, now in its 33rd year, has been posted on SSRN. A summary of the contents is reproduced below. If you are interested in the Survey, you can download it here

Here is the abstract:

This is the Thirty-Third Survey of American Choice-of-Law Cases. It was written at the request of the Association of American Law Schools Section on Conflict of Laws. It is intended as a service to fellow teachers and to students of conflicts law, both inside and outside of the United States. Its purpose remains the same as it has been in the previous 32 years: to inform, rather than to advocate.

This Survey covers cases decided by American state and federal appellate courts during 2019 and posted on Westlaw by December 31, 2019. Of the 1,404 appellate cases that meet these parameters, the Survey focuses on those cases that may contribute something new to the development or understanding of conflicts law—and in particular choice of law.

The Survey proceeds in four parts. The first describes fourteen cases decided by the United States Supreme Court. The second part discusses judgments delineating the reach of federal law in cases with foreign elements (extraterritoriality). The third part focuses on the choice-of-law part of conflicts law, in both interstate and international cases. The fourth part deals with the recognition of sister state and foreign country judgments, as well as domestic and international arbitral awards.

Professor Ronald A. Brand of the University of Pittsburgh School of Law has posted three new articles with private international law content:

Online Dispute Resolution

This chapter was prepared from a presentation given by the author at the 2019 Summer School in Transnational Commercial Law & Technology, jointly sponsored by the University of Verona School of Law and the Center for International Legal Education (CILE) of the University of Pittsburgh School of Law. The paper reviews the domestic and international progress of online dispute resolution with a particular focus on the negotiations that led to the 2017 UNCITRAL Technical Notes on Online Dispute Resolution

Of Magnets and Centrifuges: The US and EU Federal Systems and Private International Law

This chapter is part of a tribute to Professor Alberta Sbragia upon her retirement at the University of Pittsburgh, and considers federal systems in the United States and the European Union as viewed through the lens of private international law. While some may be hesitant to refer to the European Union as a “federal” system, when viewed in the context of private international law, the author presents the EU system is both more centralized and more predictably developed than is its counterpart in the United States. By tracing his personal experience over 25 years at the Hague Conference on Private International Law, the author reviews the developments which have led to centralization of private international law within the European Union, considers how the federal system in each of the United States and the European Union has influenced this area of the law, and draws conclusions about how each has used its own federal approach in this area of the law to influence global development of the law.

Jurisdiction and Judgments Recognition at the Hague Conference: Choices Made, Treaties Completed, and the Path Ahead

This article will be published as part of a special issue of the Netherlands International Law Review dedicated to the 2019 HCCH Judgments Convention. The article begins with the context in which a Hague Convention on Jurisdiction and the Recognition and Enforcement of Foreign Judgments was first proposed in 1992. It then traces the history of the Hague negotiations, both from within those negotiations and in regard to important developments outside the negotiations, through the completion of the 2005 Convention on Choice of Court Agreements and the 2019 Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The article ends with comments on whether it is advisable to now resume discussion of a separate convention on direct jurisdiction.

Pontian N. Okoli has provided the following extensive summary of the findings of his book, which is a revised version of his PhD thesis, completed at the University of Dundee.

In 2019, the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial matters came into being. It is a clear reflection of determined efforts to produce a global legal framework that can support the free movement of foreign judgments. One index of success concerning the 2019 Convention would be whether it promotes the free movement of foreign judgments in different parts of the world including Africa. Time will tell. For now, it is necessary to reduce the impediments to the free movement of foreign judgments on at least two levels: first, between African and non-African jurisdictions; and second, between African jurisdictions. The legal frameworks that concern both levels are essentially the same in most African jurisdictions. There is no African legal framework that is equivalent to the Brussels legal regime on the recognition and enforcement of foreign judgments in the European Union.  Thus, litigants need to consider relevant legal frameworks in each country. Foreign judgment creditors must be conversant with appropriate laws to ensure recognition and enforcement of foreign judgments. Nigeria and South Africa are two major examples of African jurisdictions where such awareness is required. 

Nigeria and South Africa are important for several reasons including their big economies and the fact that they are major political players in their respective regions and have significant influence on the African continent. They also make for interesting comparative study –Nigerian jurisprudence is based on the English common law while South African jurisprudence is mixed – based on Roman Dutch law with a significant influence of English law. Also, Nigeria is not a member of the Hague Conference on Private International Law, but South Africa has been a member since 2002. Understanding why these two jurisdictions adopt their individual approaches to the recognition and enforcement of foreign judgments is critical to unlocking the potential to have rewarding relations with Africa in this regard. It is important to understand what brings both jurisdictions together and what separates both, with a view to determining how common perspectives to foreign judgments enforcement may be attained.

There are several bases for legal convergence. Both jurisdictions have two major legal frameworks on foreign judgments – statutory law and the common law. This two-track system is common in Africa and many parts of the Commonwealth including the United Kingdom which has more than one statute (and the common law) on foreign judgments. In Nigeria, there is still significant uncertainty as to which legal framework should apply to relevant cases. Nigerian case law clearly shows that statutory law remains the most important guide for litigants. Essentially, Nigeria relies on a statute of nearly a century old (the Reciprocal Enforcement of Judgments Act 1922 — Chapter 175, Laws of the Federation and Lagos 158). Conversely, statutory law is of less practical importance in South Africa where the Enforcement of Foreign Judgments Act 32 of 1988 has been extended to Namibia only. 

The comparative study finds that it is generally easier for judgment creditors to enforce foreign judgments in South Africa than in Nigeria. Although there is much to discuss concerning legal uncertainties considering the confusing legal framework in Nigeria, case law demonstrates that the South African attitude to recognition and enforcement foreign judgments is instructive. A liberal legal framework that promotes the recognition and enforcement of foreign judgments should be founded in judicial and legislative attitudes that promote the free movement of foreign judgments. In this context, the theories that underpin the recognition and enforcement of foreign judgments are critical. The theories form the common foundation to which jurisdictions around the world can relate. 

The statutory frameworks on foreign judgments are relatively recent. For example, the main Nigerian statute on the subject was patterned on the 1920 UK on the Administration of Justice Act. However, foreign judgments were already being enforced in other jurisdictions as long ago as the nineteenth century through case law (such as Schibsby v Westenholz [1870] LR QB 155 and Hilton v Guyot 159 US 118 [1895]) which reflected the theories that underpin the recognition and enforcement of foreign judgments. The theories of reciprocity, obligation and comity have been applied with varying degrees of success in different jurisdictions. These theories either clearly apply to Nigerian and South African contexts (for example, through specific legislative provisions in Nigeria) or they have been discussed by the courts in both jurisdictions. The first step should be an agreement on what should drive the recognition and enforcement of foreign judgments. Each of these theories has been criticised rather substantially, and it may be difficult to build on any ‘pure theory’.  It would be helpful to adopt an approach that encourages the free movement of foreign judgments subject to a consideration of State interests. Such an approach would attach some degree of obligation in the recognition and enforcement of foreign judgments subject to narrow gaps for defence. This can be illustrated through the application of public policy to frustrate the recognition and enforcement of foreign judgments. Such an obligation should be qualified. Apart from drawing on an analysis of the major theories on the subject, adopting this qualified obligation approach has the benefit of a universal standpoint that is shaped by practical and political realities. This is more pragmatic than strictly applying any traditional theory that is entirely constructed within a legal culture or legal system.

Litigants should expect the enforcement of foreign judgments to be the rule rather than an exception. Fairness requires a consideration of litigant and State interests. Any approach that considers only one (or one at the expense of the other) is unlikely to be fair or acceptable to many jurisdictions including those in Africa. Already, the jurisprudence in both countries suggests that it would be fair to recover debts and there is scope to presume that foreign judgments should be enforced. This perspective of fairness has greatly influenced South African jurisprudence, and this may also partly account for why there is greater success in attempts to enforce foreign judgments even when the law is contested or may at first seem unclear. An example is Richman v Ben-Tovim 2007 (2) SA 203 where the respondent did not dispute the debt but argued that his mere presence in England was an insufficient basis for the English court to exercise jurisdiction. The South African Court of Appeal, however, considered that a ‘realistic approach’ was necessary and enforced the foreign judgment.  Although some scholars may criticise this judgment for endorsing ‘mere presence’ jurisdiction as it divides common law and civil law systems, the rationale behind the decision is instructive. If a ‘realistic approach’ is to be found, then there is a need to reflect on how to reduce the technicalities that impede the free movement of foreign judgments. Efforts to attain an effective global legal framework that African countries will find useful requires a realistic approach that factors in contextual realities. This realistic approach permeates other aspects of the process that leads to the recognition and enforcement of foreign judgments in Nigeria and South Africa.

An important contextual reality is the characterisation process. How the Nigerian or South African courts characterise a foreign judgment can make a great difference in terms of recognition and enforcement. The way forward is not to create more categories, but to focus on how the foreign judgment may be enforced subject to considerations of fairness to both the litigants and the State. This perspective of ‘cosmopolitan fairness’ also facilitates the attainment of practical solutions in issues that concern jurisdictional grounds. To ensure a realistic approach, and in considering a fair approach for litigants and the State, it is critical to reflect on what ultimate end should be attained. If that end is promoting the free movement of foreign judgments, then it is reasonable to put the onus on the judgment debtor. This does not mean that foreign judgments would be enforced regardless of potential injustice or unfairness to the judgment debtor. However, placing the onus on the judgment debtor implies that the application of jurisdictional grounds should be based on promoting the free movement of foreign judgments. At least four traditional bases of jurisdiction are common to Nigeria and South Africa: mere presence, residence, domicile and submission. A new perspective to this subject may consider what purpose each jurisdictional ground should serve and the aims that should be achieved. The Nigerian legal framework, in principle, reflects this approach of considering jurisdictional grounds in a progressive and purposive manner. In Nigeria, doing business or carrying on business is a common thread that runs through all the jurisdictional grounds. There is also a patchwork of jurisprudence concerning individual grounds of jurisdiction. In South Africa, residence needs to be ascertained on a case-by-case basis as neither Nigerian nor South African statutory laws define residence. 

In the context of jurisdictional grounds, the lack of interpretational certainty in both countries suggests that there is considerable scope to adopt any approach or combination of approaches that helps to solve problems in a practical way. In dealing with impediments to enforcing foreign judgments in a manner that ensures sustainable progress, there should be a clear consideration of systematic flexibility. In other words, fine demarcations in the context of traditional jurisdictional grounds may not be of practical help in efforts to facilitate the recognition and enforcement of foreign judgments. Any bias against a jurisdictional ground should be re-evaluated in a manner that factors in contextual realities. There should be a consideration of international commercial realities and in a fast-evolving global order that is driven by increasingly complex international commercial transactions. Any approach that focuses on territorial considerations vis-à-vis jurisdictional grounds does not reflect this global order in which increased movement, complex international commercial transactions and the borderless nature of the Internet are important features. This global order requires a result-oriented approach rather than a recourse to any traditional approach that is driven by technicalities. For example, the question should not be whether a judgment debtor was ‘present’ in the foreign country but what would amount to presence that is effective for the purposes of enforcing foreign judgments. This reasoning may be replicated for residence or domicile as well. 

The need for a ‘realistic approach’ also extends to public policy. There are clear foundations in Nigerian and South African law that support a narrow application of public policy during legal proceedings to recognise and enforce foreign judgments. This is so although there have been significant interpretational difficulties in both jurisdictions and judgment debtors try to frustrate the enforcement of foreign judgments by relying on defences that are anchored to public policy. For example, characterising damages awarded by the foreign court as compensatory rather than punitive could help to ensure judgment creditors do not go away empty-handed. This is especially so where such judgment creditors are entitled to realising their foreign judgments. 

Legal certainty and predictability cannot be driven by a purely circumstantial application of legal principles or consideration of legal issues. But it is also true that the law should not stand still. In this regard, it is instructive that Nigeria and South Africa have areas of possible legal convergence even though they operate considerably different legal cultures. However, the domestic jurisprudence of their different legal cultures does not undermine their common perceptions of fairness and the need to enforce foreign judgments. What is lacking considerably is the right attitude to ensure that the laws already in existence are interpreted progressively and purposively. This requires a robust institutional approach that is driven by the courts. Of course, clear and certain statutory laws should be in place to promote the free movement of foreign judgments. However, legal comparative analysis concerning Nigeria and South Africa demonstrates that the use of statutory laws does not necessarily guarantee legal certainty. The relative success of South Africa in enforcing foreign judgments has been driven by the courts considering the common law. Statutory law has been extended to only one African country. Any foreign legal instrument or convention (at the global or regional level) cannot function effectively without courts that are inclined to recognise and enforce foreign judgments. For example, article 10 of the 2019 Judgments Convention provides that the court addressed may refuse the recognition or enforcement of a foreign judgment if the damages do not actually compensate a judgment debtor for actual loss suffered. The role of the courts is critical to the success of such legal provisions.

The possibility of African countries such as Nigeria (that are not members of the Hague Conference) ratifying the 2019 Convention cannot be discounted. There is a growing trend of countries signing up to Hague Conventions even though they are not members of the Conference. However, both African and non-African countries require robust legal and institutional frameworks that will support the free movement of foreign judgments. Such legal frameworks should be anchored to an appropriate paradigm shift where necessary.

The Editorial Team of CoL wishes all of you a Happy New Year! We will continue trying our best to keep you posted on conflict of law views and news from around the world.

A first moment of interest might be on Tuesday 14/01/2020, 09:30 CET. According to the Judicial Calendar of the European Court of Justice, Advocate General Maciej Szpunar will deliver his Opinion on the Request for a preliminary ruling from the Tribunale di Genova (Italy) lodged on 12 October 2018 — LG and Others v Rina S.p.A. and Ente Registro Italiano Navale (Case C-641/18).

The question referred to the ECJ relates to the application of the Brussels I Regulation and it reads (OJ C-25/18 of 21 January 2019):

Should Articles 1(1) and 2(1) of Regulation (EC) No 44/2001 (1) of 22 December 2000 be interpreted — particularly in the light of Article 47 of the Charter of Fundamental Rights of the European Union, Article 6(1) of the European Convention on Human Rights and recital 16 of Directive 2009/15/EC (2) — as preventing a court of a Member State from waiving its jurisdiction by granting jurisdictional immunity to private entities and legal persons carrying out classification and/or certification activities, established in that Member State, in respect of the performance of those classification and/or certification activities on behalf of a non-EU State, in a dispute concerning compensation for death and personal injury caused by the sinking of a passenger ferry and liability for negligent conduct?

As is explained in the Request for the Preliminary Ruling

[T]he applicants — relatives of the victims and survivors of the sinking of the Al Salam Boccaccio ’98 ferry in the Red Sea on 2 and 3 February 2006, in which more than 1 000 people lost their lives — filed a lawsuit against the defendants seeking a judgment on their collective and/or joint and several civil liability for all pecuniary and non-pecuniary losses suffered as a result of the disaster in jure proprio or jure successionis and, as a result, the award of compensation in respect of those losses. The applicants submit that the defendants acted negligently when carrying out their classification and certification activities and when adopting decisions and guidelines, thereby rendering the vessel unstable and unsafe and causing it to sink.

The defendants entered an appearance […], challenging the applicants’ claims on various grounds, including in particular — with regard to the present proceedings — the defendants’ immunity from Italian jurisdiction. Briefly, that plea is based on the fact that RINA S.p.A. and RINA ENTE were summonsed in relation to activities carried out as delegates of a foreign sovereign State, the Republic of Panama. Those activities were an expression of the sovereign prerogatives of that delegating foreign State, in whose name and in whose interest the defendants acted.

We will keep you posted…

International Business Courts: A European and Global Perspective  (eds. Xandra Kramer & John Sorabji), Eleven International Publishing 2019.

Following our previous post announcing the publication of a special issues of Erasmus Law Review on International Business Courts (ELR 2019/1) as well as a book expanding on the topic, we bring to the attention of the readers that the book is open access available here. A paper copy can be ordered here (order form) .

Happy New Year’s reading!

Both publications result from and are financed by the ERC Consolidator project Building EU Civil Justice at the Erasmus School of Law in Rotterdam.

The blurb reads:

In recent years there has been significant growth in international business courts in Europe and across the world. They have been established as expert dispute resolution forums offering procedures in English for international commercial parties. Governments have promoted their development as an integral aspect of broader public policy agendas with the aim to enhance the rule of law and the attractiveness of their jurisdictions as legal and economic hubs. While these courts can be lauded for facilitating international commercial dispute resolution and boosting justice innovation, the development of competition in the international litigation market is a remarkable trend that merits discussion.

International Business Courts provides a comprehensive critical evaluation of the institutional design and procedural rules of established and emerging international business courts. It focuses on major European and global centres. It assesses to what extent these courts, the competition between them and their inter relationship with arbitration, contribute to justice innovation. It considers their impact on access to justice and the global litigation market, as well as their effect on the rule of law.

This book is of interest to legal practitioners, academics and policy makers in the area of civil justice and international business litigation.

By Nicolás Zambrana-Tévar, LLM, PhD, KIMEP University

A first instance court in Barbastro (Aragón) has ruled that a great number of valuable works of art presently on display at the museum of the Catholic diocese of Lleida (Catalonia) are the property of parishes of the diocese of Barbastro-Monzón and must be immediately returned. In its reasoning, the court has given a lot of weight to the fact that, in the decades long dispute between the two Spanish ecclesiastical entities, the diocese of Lleida had agreed to comply with a 2007 ruling of the Vatican’s Supreme Tribunal of the Apostolic Signatura, the highest administrative court in the Catholic Church, whose decisions may only be overturned by the Pope himself. This case does not only rise the issue of the recognition of “foreign” ecclesiastical decisions or, alternatively, their relevance for state courts but also how indistinguishable is the science of private international law from the study of legal pluralism, i.e. the interaction of various legal systems over the same territory, subjects and subject-matters.

Since the middle ages, a small stripe of land in the Spanish region of Aragón (La Franja de Aragón) was under the religious jurisdiction of the bishop of Lleida. Article IX of the 1953 concordat between Spain and the Holy See already manifested the intention of both parties to the treaty to revise the existing territorial ecclesiastical constituencies to avoid dioceses which did not correspond to existing state provinces. In 1995, following a decision of the Spanish bishops’ conference, the Holy See decided to transfer all the parishes in La Franja to the diocese of Barbastro. Further to this reassignment, the diocese of Barbastro requested that all the works of art which were on display at the diocesan museum of Lleida be returned to the parishes of La Franja, to which they allegedly belonged.

At the beginning of the 20th century, those works of art had been taken to Lleida from the abovementioned parishes, partly due to their state of decay. The basic legal question here was whether the long deceased bishop of Lleida, who had brokered the deal, had bought those works of art a century ago or whether they were only on deposit at the Catalan diocesan museum.

The return of those pieces of art has been a matter of regional – or national – pride for more than twenty five years. For many, this basically ecclesiastical dispute over religious property must be put in the context of recent nationalist aspirations of the Catalan government because many inhabitants of La Franja speak Catalan and this territory is sometimes perceived to be part of Catalonia in much the same way as nationalists refer to other territories in Spain, France or Italy as països catalans. What began as a bitter dispute among bishops has ended as a much bitter dispute between neighbouring regions after their autonomous governments espoused the respective claims, including street demonstrations and endless litigation before Church tribunals and state courts, both civil and administrative. The court records by now have more than 30.000 pages.

The dispute should have ended in 2007 when the Supreme Tribunal of the Apostolic Signatura heard the last possible ecclesiastical appeal against previous rulings of lower canon law courts. The text of this decisions is, of course, in Latin. Thus, the Vatican court ordered the immediate return of the art pieces. Further to this decision and probably compelled by it, the two dioceses signed an agreement in 2008, where the Catalan diocese acknowledged that the legitimate owners of the works of art were the abovementioned parishes of Aragón. Soon afterwards, however, the Lleida bishop went back on his word, apparently when more than 300 letters from the beginning of the 20th century resurfaced, allegedly showing that amounts of money had been paid by the former bishop of Lleida to the parishes of La Franja, following the removal of the art pieces to the diocesan museum of Lleida. This money was allegedly the price paid for them, so the Catalan diocese owned them.

The diocese of Barbastro nevertheless sought to have the 2007 Vatican decision recognised but, in 2010, a Spanish court ruled that the only ecclesiastical decisions which could be recognised and enforced in Spain under the new 1979 concordat were those concerning the nullity of marriages (pp. 6-8). The diocese of Barbastro and the Spanish prosecutor present at the proceedings understood that, nevertheless, the 2007 decision may be recognised under those Spanish domestic law provisions for the recognition of foreign court decisions in the absence of a treaty. The “country” of origin of the 2007 decision was, of course, the Holy See.

The Spanish court did refer to the Holy See as a subject of international law at the level of states. Furthermore, the Catholic Church’s jurisdiction and autonomy within the Spanish territory and over Spanish Catholics was recognised by the Spanish state by means of an international treaty (i.e. the concordat). Part of this autonomy was – in the eyes of the court – the jurisdiction of ecclesiastical tribunals in religious property matters. Ecclesiastical tribunals had therefore jurisdiction to adjudicate in property disputes and to enforce the ensuing decisions internally. Such jurisdiction was acknowledged and respected by the Spanish state, which should not interfere with it and, therefore, an ecclesiastical entity could not request state courts to enforce ecclesiastical decisions because this would represent such an act of interference. Ecclesiastical entities may alternatively bring their property claims before Spanish state courts in the first place, which have in the past decided similar cases applying canon law but, if the dispute had been heard and decided by a Church tribunal, state courts had to remain aloof.

However, last week, the same court which in 2010 had refused to recognise the 2007 Vatican decision has now ruled in favour of the return of the works of art to the parishes of Aragón. The Barbastro court explains (p. 17) that the ecclesiastical rulings were not enough in themselves, as evidence of the property rights of the Aragonese parishes. However, such rulings may in fact be evidence of the testimony provided by the parties to the dispute. Additionally, the settlement agreement made by the two dioceses, further to the Vatican ruling of 2007, should indeed be taken as an admission by the diocese of Lleida that the works of art belong in Aragón. Thus, indirectly, the Vatican decision was being respected.

This use made of a “foreign” ecclesiastical court ruling presents some similarities to the theory of vested rights and estoppel per res iudicattam in a common law context, whereby foreign court decisions may not be recognised as such but their content may be evidence of a new cause of action in new proceedings commenced in the country where recognition is sought. Even though the Spanish court in 2010 and 2019 was equally unwilling to recognise the effects of the ecclesiastical decision because it had been issued by an ecclesiastical tribunal whose autonomy and jurisdiction would be jeopardised if the Spanish court enforced its contents, the first instance court of Barbastro was now in a position to give a lot of weight at least to the declarations that the parties had made during the proceedings at the Vatican, as well as to the settlement agreement that the Vatican decision had brought about.

The Spanish court also made direct use of canon law as evidence of property rights when it found that, for the transfer of ecclesiastical property to have been valid, a special permit from the Holy See would have been needed, which was never sought nor obtained. That Spanish state courts apply canon law is relatively common in, for instance, employment cases – as a way of demonstrating that the relationship between a priest and a bishop is not of an employment nature – or in clergy sex abuse litigation – in order to demonstrate the degree of organizational or supervisory authority of bishops over priests and parishes.