Conflictoflaws

A book edited by Catherine Kessedjian & Humberto Cantú Rivera and titled “Private International Law Aspects of Corporate Social Responsibility” has just been released electronically and in hard copy. As said in the abstract of the book, “This book addresses one of the core challenges in the corporate social responsibility (or business and human rights) debate: how to ensure adequate access to remedy for victims of corporate abuses that infringe upon their human rights. However, ensuring access to remedy depends on a series of normative and judicial elements that become highly complex when disputes are transnational. In such cases, courts need to consider and apply different laws that relate to company governance, to determine the competent forum, to define which bodies of law to apply, and to ensure the adequate execution of judgments. The book also discusses how alternative methods of dispute settlement can relate to this topic, and the important role that private international law plays in access to remedy for corporate-related human rights abuses…”

Readers of this blog might be interested in having one to be stored for your own use. If this is the case, please visit the homepage of this book to know more:https://www.springer.com/gp/book/9783030351861?wt_mc=Internal.Event.1.SEM.ChapterAuthorCongrat

Many thanks for your attention and take care in this globally difficult time!

It is undeniable that there is an increasing interaction between human rights and private international law (and other areas of law). This of course adds an additional layer of complexity in private international law cases, whether we like it or not. Indeed, States can be sanctioned if they do not fulfill specific criteria specified by the European Court of Human Rights (ECtHR). Importantly, the European Convention on Human Rights has been considered to be an instrument of European public order (ordre public), to which 47 States are currently parties.

I have recently published an article entitled “The controversial role of the ECtHR in the interpretation of the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction, with special reference to Neulinger and Shuruk v. Switzerland and X v. Latvia” (in Spanish only but with abstracts in English and Portuguese in the Anuario Colombiano de Derecho Internacional). To view it, click on “Ver artículo” and then click on “Descargar el archivo PDF”, currently pre-print version, published online in March 2020.

Below I include briefly a few highlights and comments.

As its name suggests, this article explores the controversial role of the ECtHR in the interpretation of the HCCH Child Abduction Convention. It analyses two judgments rendered by the Grand Chamber: Neulinger and Shuruk v. Switzerland (Application no. 41615/07) and X v. Latvia (Application no. 27853/09). And then it goes on to analyse three more recent judgments and in particular, whether or not they are in line with X v Latvia.

The article seeks to clarify the applicable standard that should be applied in child abduction cases as there has been some confusion as to the extent to which Neulinger applies and the impact of X v. Latvia. Indeed Neulinger seemed to suggest that courts should conduct a full examination of the best interests of the child during child abduction proceedings, which is blatantly wrong. X v. Latvia clarifies Neulinger and provides a detailed and thoughtful standard to avoid conducting “an in-depth examination of the entire family situation and of a whole series of factors…” but at the same time upholds the human rights of the persons involved and strikes, in my view and as noted by the Court, a fair balance between the competing interests at stake – those of the child, of the two parents, and of public order.

The article then examines three recent judgments rendered by several chambers of the ECtHR (not the Grand Chamber): K.J. v. Poland (Application no. 30813/14), Vladimir Ushakov v. Russia (Application no. 15122/17), and M.K. v. Grèce (Requête n° 51312/16). M.K. v. Grèce, which was rendered in 2018, has put the ECtHR in the spotlight again. Surprisingly, this precedent has ignored the standard established in X v. Latvia and has followed only Neulinger. The precedents of the Grand Chamber of the ECtHR are binding on the chambers so it is stupefying that this could happen. Nevertheless, I have concluded that the outcome of the case is correct.

By way of conclusion, the legal community seems to be divided as to whether or not X v Latvia sets a good precedent. Human rights lawyers seem to regard this precedent favourably, whereas private international law lawyers seem to be more cautious. This article concludes that X v. Latvia was correctly decided for several reasons based on Article 13(1)(b), Article 3 of the HCCH Child Abduction Convention and the need to provide for measures of protection. Both human rights and private international law can interact harmoniously and complement each other. The efforts of the human rights community to understand the Child Abduction Convention are evident in the change of direction in X v. Latvia. Both human rights lawyers and private international law lawyers should make an effort to understand each other as we have a common goal and objective: the protection of the rights of the child.

While the Corona Crisis is still alarmingly growing globally, first movers are apparently preparing for mass litigation of ski tourists from all over Europe and beyond against the Austrian Federal State of Tyrol and local businesses. The Austrian Consumer Protection Association (Österreichischer Verbraucherschutzverein, VSV, https://www.verbraucherschutzverein.at/) is inviting tourists damaged from infections with the Corona virus after passing their ski holidays in Tyrol, in particular in and around the Corona super-hotspot of Bad Ischgl, to enrol for collective redress against Tyrol, its Governor, local authorities as well as against private operators of ski lifts, hotels, bars etc., see https://www.verbraucherschutzverein.at/Corona-Virus-Tirol/.

In Austria, no real “class action” is available. Rather, the individual claimants need to assign their claims to a lead claimant, often a special purpose vehicle (in this case the Association) which then institutes joint proceedings for all the claims. For foreign claimants who consider assigning their claims to the Association, the Rome I Regulation will be of relevance.

According to Article 14 (1) Rome I Regulation the relationship between assignor and assignee shall be governed by the law that applies to the contract between the assignor and assignee under the Regulation. So far, however, there seem to be only pre-contractual relationships between the Austrian Association inviting “European Citizens only” (see website) to register for updates by newsletters. These pre-contractual relationships will be governed by Article 12 (1) Rome II Regulation. “[T]he contract” in the sense of that provision will be the one between the Association and the claimant on the latter’s participation in the collective action which may, but does not necessarily, include the contract on the assignment of the claim and its modalities. It is the Association that is the “service provider” in the sense of Article 4 (1) lit. b Rome I Regulation. Its habitual residence is obviously in Austria, therefore the prospective contract as well as the pre-contractual relations to this contract will be governed (all but surprisingly) by Austrian law. Art. 6 does not come into play, since the service is to be supplied to the consumer exclusively in Austria, Article 6 (4) lit. a Rome I Regulation.

According to Article 14 (2) Rome I Regulation, the law governing the assigned claim shall determine its assignability, the relationship between the assignee and the debtor, the conditions under which the assignment can be invoked against the debtor and whether the debtor’s obligations have been discharged. As far as the Rome II Regulation is applicable ratione materiae, i.e. for claims against the businesses, its Article 4 will select (again all but surprisingly) Austrian law – no “distance delict” as the potentially delictual act and its harmful effects on the claimant’s health both took place in Austria. Follow-up damages in other states are irrelevant for the law-selecting process.

In respect to delictual claims against Tyrol and its public entities and authorities, Recital 9 of the Rome II Regulation reminds us that, with a view to Article 1 (1) Sentence 2 of the Regulation (no applicability to “acta iure imperii”), “[c]laims arising out of acta iure imperii should include claims against officials who act on behalf of the State and liability for acts of public authorities, including liability of publicly appointed office-holders. Therefore, these matters should be excluded from the scope of this Regulation.” Rather, an autonomous rule of choice of law for liability of Austrian public entities will apply, and this rule will certainly select Austrian law.

There are certain advantages in bundling a multitude of claims in the “Austrian” way: First, the high amount of damages from the collection of claims allows seeking third-party funding. Second, costs for both the court and the lawyers are structured on a diminishing scale. While the collective proceedings are pending, prescription periods do not proceed in respect to claims participating in the joint action. And of course, the “class” of these active claimants has much more weight for negiations than an individual would have.

On the other hand, the jurisdiction at the consumer’s domicile under Art. 18 Brussels Ibis Regulation will no longer be available, once the consumer has assigned his or her claim to another, e.g. a lead claimant. However, this is only relevant in respect to the contractual claims of consumers and only as long as the conditions for directing one’s business at the consumer’s domicile under Article 17 (1) lit. c Brussels Ibis Regulation are fulfilled. The claims in question here mainly ground in non-contractual claims against public entities and private businesses, and they seem to be envisaged as independent civil follow-on proceeding after successful criminal proceedings – if these should ever result in convictions.

The allegation is that the respective public agencies and officers did not shut down the area immediately despite having gained knowledge about first Corona infections in the region, in order to let the tourism businesses go on undisturbed. These allegations are extended to local businesses such as ski lifts, hotels and bars etc., once they gained knowledge about the Corona risk. It will be an interesting question (of the applicable Austrian law of public and private liability for torts) amongst many others (such as those on causality) in this setting to what extent there is a responsibility of the tourist to independently react adequately to the risk, of course depending on the time of getting him/herself knowledge about the Corona risk. If there is such responsibility on the part of the damaged, the next question will be whether this could affect or reduce any tortious liability on the part of the potential defendants. Overall, all of that appears to be an uphill battle for the claimants.

Speaking of responsibilities, a more pressing concern these days is certainly how the European states, in particular the EU Member States and the EU itself, might organise a more effective mutual support and solidarity for those regions and states that are most strongly affected by the Corona Pandemic, in particular in Italy, Spain and France, these days. Humanitarian and moral reasons compel us to help, both medically and financially. Some EU Member States have started taking over patients from neighbouring countries while they are still disposing of capacities in their hospitals, but there could perhaps be more support (and there could have perhaps been quicker support). The EU has a number of tools and has already taken some measures such as the Pandemic Epidemic Purchase Programme (PEPP) by the European Central Bank (ECB). The European Stability Mechanism (ESM) could make (better?) use of its precautionary financial assistance via a Precautionary Conditioned Credit Line (PCCL) or via an Enhanced Conditions Credit Line (ECCL). Further, the means of Article 122 TFEU should be explored, likewise the possibilities for ad hoc-funds under Article 175 (3) TFEU. The European Commission should think about loosening restrictions for state aids.

All of these considerations go beyond Conflict of Laws, and this is why they are not mine but were kindly provided (all mistakes and misunderstandings remain my own) in a quick email by my colleague and expert on European monetary law, Associate Professor Dr. René Repasi, Erasmus University of Rotterdam, https://www.eur.nl/people/rene-repasi (thanks!).

However, cross-border solidarity is a concern for all of us, perhaps in particular for CoL experts and readers. Otherwise, a “European Union” does not make sense and will have no future.

The Hague Academy has canceled its summer courses for 2020 and will hold them in the summer of 2021. The announcement, including a video message from the Secretary-General, is here. Moving the program online was rejected because students would not get the special experience of being in the Hague. The promise of other videos to posted on a new website will be only insufficient comfort.

The only prior time that the courses were canceled was World War II. It is sad news for countless students who were looking forward to the courses, for the (excellent) scholars who have prepared their courses, and for the discipline of private international law, which benefits from this regular event. The decision against bringing together students from all the world to one physical space seems eminently rational, and has been made with enough time for participants to adapt plans. The decision against holding the courses online may raise more mixed responses.

In his today’s Opinion, Advocate General Saugmandsgaard Øe addresses the question that has recently inspired much debate, already reported to our readers this January by Rishi Gulati.

At point 5, the Opinion clarifies that – at the request of the Court of Justice – its scope is limited to analysis of the issues related to Article 1(1) of the Brussels I bis Regulation. Therefore, no considerations concerning Article 24(5) of this Regulation, also invoked in the request for a preliminary ruling, were to be expected in the Opinion.

The question at stake concerns, therefore, the applicability and/or the scope of application of the Brussels I bis Regulation in the context of a case where an international organisation brings an action to, firstly, lift an interim garnishee levied in another Member State by the opposing party, and, secondly, prohibit the opposing party from levying, on the same grounds, an interim garnishee in the future and all that on the basis of on immunity of execution that this international organisation allegedly enjoys.

In essence, at point 90, the Opinion concludes the inclusion of such action within the scope of the Brussels I bis Regulation is determined by nature of the right that the interim garnishee served to protect and the inclusion of that right in the scope of the Regulation.

Moreover, according to point 102 of the Opinion, the fact that an international organization invokes the immunity it allegedly enjoys under international law does not prevent a court of a Member State from establishing its jurisdiction under the Brussels I bis Regulation.

The Opinion is not yet available in English. Some other linguistic versions can be consulted here.

A non-profit consumer protection association established in Austria is bringing an action before the Austrian courts against a motor vehicle manufacturer with its registered office in Germany. The association asserts claims for damages, assigned to it by the purchasers of motor vehicles, and seeks the payment of a fixed amount and a declaration establishing the liability of the defendant for all future damage. These claims are related to an alleged emission manipulation: had the purchasers been aware of the manipulation, they would have not purchased the vehicles or would have purchased them at a reduced price.

To establish the international jurisdiction of the Austrian court, the associations relies on  Article 7(2) of the Brussels I big Regulation. It argues, in particular, that the damage materialised in the form of a reduction in the value of the purchasers’ assets, at the earliest upon the purchase and transfer of the vehicles within the Austrian territory.

In those circumstances, the national court refers the matter to the Court of Justice and asks whether the ‘place where the harmful event occurred’ within the meaning of Article 7(2) of the Brussels I bis Regulation may be construed as the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage that is the direct result of an unlawful act committed in another Member State.

This issue is thoroughly analyzed in today’s Opinion of Advocate General Campos Sánchez-Bordona. At point 81, the Opinion concludes:

Article 7(2) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, where an unlawful act committed in a Member States consists of the manipulation of a product, the existence of which is concealed and only becomes apparent after the product is purchased in another Member State for a price that is higher than its actual value:

• a purchaser of that product, who retains the product as part of his or her assets when the defect is made public, is a direct victim;
• the place where the event giving rise to the damage occurred is the place where the event which created the defect in the product took place; and
• the damage occurred in the place, situated in a Member State, where the victim purchased the product from a third party, provided that the other circumstances confirm the attribution of jurisdiction to the courts of that State. Those circumstances must include, at all events, one or more factors which enabled the defendant reasonably to foresee that an action to establish civil liability as a result of his or her actions might be brought against him or her by future purchasers who acquire the product in that place.

Interestingly, in particular at points 65 et seq., the Opinion addresses the doubts raised by the referring court and relating to the question whether, in the present case, the German courts are not better placed to examine the association’s action. If anything, that would be tantamount to the implantation of some variation of the forum non conveniens doctrine within Article 7(2) of the Brussels I bis Regulation in order to give preference either to ‘Handlungsort’ or ‘Erfolgsort’. However, according to the final point of the Opinion:

Article 7(2) of [the Brussels I bis Regulation] must be interpreted as meaning that it does not authorise the court for the place where the damage occurred to determine that it does or does not have jurisdiction based on an appraisal of the other circumstances of the case, aimed at identifying which court — itself or the court for the place of the event giving rise to the damage — is best placed, in terms of proximity and foreseeability, to decide on the dispute.’

Instead of presenting a synthesis of the Opinion (press release can be found here), it is best to recommend giving it an attentive lecture. Definitely a must-read.

Professor Susanne Lilian Gössl, Professor for Civil Law and Digitalization in Private Law, Comparative Law and Private International Law at Kiel University is looking for a highly skilled and motivated PhD candidate and fellow (Wissenschaftliche*r Mitarbeiter*in, 50% or 25%) to work in the areas of Civil Law and Digitalization in Private Law, Comparative Law and Private International Law.

For a detailed job description (in German) see https://www.goessl.jura.uni-kiel.de/de/aktuelles or as pdf .

Dear editors,

the blog is currently under maintenance as it is being transferred to the new server. Because of technical difficulties, submissions are disabled while we are working on it. Sorry for the inconvenience, I am looking forward to finish the transfer as soon as possible.

Damien

Professor Susanne Lilian Gössl, Professor for Civil Law and Digitalization in Private Law, Comparative Law and Private International Law at Kiel University is looking for a highly skilled and motivated PhD candidate and fellow (Wissenschaftliche*r Mitarbeiter*in, 50% or 25%) to work in the areas of Civil Law and Digitalization in Private Law, Comparative Law and Private International Law.

For a detailed job description (in German) see https://www.goessl.jura.uni-kiel.de/de/aktuelles or as pdf .

The POAM project (Protection of Abducting Mothers in Return Proceedings) is co-funded by the European Commission. It would have held an Experts’ Workshop in Milan today, but this event has of course been cancelled.

The project partners (the Universities of Aberdeen, Ludwig-Maximilians Munich, JJ Strossmayer Osijek and Milan-Bicocca) wanted to in any event share the project’s reports with the readers of this blog.

POAM explores the intersection between domestic violence and international parental child abduction within the European Union. The project is concerned with the protection of abducting mothers who have been involved in return proceedings under the 1980 Hague Abduction Convention and the Brussels IIa Regulation, in circumstances where the child abduction had been motivated by acts of domestic violence from the left-behind father.  POAM examines the usefulness of the Protection Measures Regulation and the European Protection Order Directive in the context of such return proceedings.

The POAM project (Protection of Abducting Mothers in Return Proceedings) is co-funded by the European Commission. It would have held an Experts’ Workshop in Milan today, but this event has of course been cancelled.

The project partners (the Universities of Aberdeen, Ludwig-Maximilians Munich, JJ Strossmayer Osijek and Milan-Bicocca) wanted to in any event share the project’s reports with the readers of this blog.

POAM explores the intersection between domestic violence and international parental child abduction within the European Union. The project is concerned with the protection of abducting mothers who have been involved in return proceedings under the 1980 Hague Abduction Convention and the Brussels IIa Regulation, in circumstances where the child abduction had been motivated by acts of domestic violence from the left-behind father.  POAM examines the usefulness of the Protection Measures Regulation and the European Protection Order Directive in the context of such return proceedings.

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

If a defendant is not present in Australia, Uniform Civil Procedure Rules (“UCPR”) of New South Wales provides that service outside of Australia is permitted if the plaintiff’s claim falls within UCPR Schedule 6 or if a leave is granted under UCPR rule 11.5. If a defendant does not respond within 42 days after being served successfully (rule 11.8), the plaintiff must apply for leave to proceed (rule 11.8AA). A defendant can challenge the jurisdiction of the court and apply to set aside service (rule 12.11). The court has discretion to decide whether to assume jurisdiction (rule 11.6).

AGC Capital Securities v Jaijaifu Modern Agriculture (HK) Limited [2019] NSWSC 62, a case decided by NSW Supreme Court in 2019 provides a test to determine a plaintiff’s application for leave to proceed when no appearance by defendant. The test includes four components: 

1. Whether the defendant has been properly served;
2. Whether the claim in the originating process falls within UCPR Schedule 6;
3. Whether it be demonstrated that there is a real issue to be determined (this requirement as being that the plaintiff has an arguable case being one that would be sufficient to survive an application for summary judgment); and
4. Whether this Court is not a clearly inappropriate forum.

The same test is adopted by Yoon v Lee [2017] NSWSC 1338 and Rossiter v. Core Mining [2015] NSWSC 360.

The application for leave in AGC Capital Securities, Yoon, and Rossiter is not related to UCPR r 11.5.  r 11.5 is to determine whether a leave to serve outside of Australia should be granted. However, these three cases are cases where service outside of Australia has been completed. They are concerned with leaves under r 11.8AA, which provides:

UCPR 11.8AA   Leave to proceed where no appearance by person

(1)  If an originating process is served on a person outside Australia and the person does not enter an appearance, the party serving the document may not proceed against the person served except by leave of the court.

(2)  An application for leave under subrule (1) may be made without serving notice of the application on the person served with the originating process.

R11.8AA does not specify a test. In Australia, the leading case for leave to proceed where no appearance by defendant is Agar v Hyde [2000] HCA 41. In Agar, two rugby players at the NSW brought a personal injury claim against the International Rugby Football Board and several national representatives at the Board, alleging that the Board and its representatives own a duty of care for the plaintiffs. The defendants were served outside of Australia and applied to set aside the service. Agar holds that different tests should be adopted for the plaintiff’s application for leave to proceed where no appearance by defendant and for the defendant’s application to set aside the service.

According to Agar, the test for the plaintiff’s application for leave to proceed when no appearance by defendant should focus on the jurisdictional nexus between the plaintiff’s pleading and the forum and should not consider the merits of the case. The High Court considers:

“is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations, is a cause of action arising in the State? The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff’s claim.” (Agar, para 50)

The Court of Appeal required the plaintiff to establish a good arguable case. However, the High Court held that “[t]he Court of Appeal was wrong to make such an assessment in deciding whether the Rules permitted service out.” (Agar, para 51) Instead, the High Court only requires the plaintiff to establish a prima facie case, saying

“[t]he application of these paragraphs of r1A depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial. Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs of PT 10 r 1A, service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.” (Agar, para 51)

PT 10 r 1A is functionally equivalent to the current UCPR Sch 6 although their contents differ to some extent. In contrast, the test of “real issue to be determined” held in AGC Capital Securities, Yoon, and Rossiter is on the merits of the case, which is excluded by Agar.

Regarding the defendant’s application to set aside the service, Agar adopts three common grounds:

• Service is not authorized by the rules (ie, does not fall within UCPR Sch 6 and not otherwise authorised),
• The Court is an inappropriate forum,
• The claim has “insufficient prospects of the success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims.” This requires the Court to assess the strength of the claim and the test is the same for summary judgment lodged by a defendant served locally.

These grounds are not exhaustive. For example, the defendant can apply to set aside the service based on an exclusive jurisdiction clause favouring a foreign court.

However, AGC Capital Securities, Yoon, and Rossiter do not concernthe defendant’s application to set aside the service. Further, the test of “real issue to be determined” in AGC Capital Securities, Yoon, and Rossiter is not the same as the “insufficient prospects of the success” in Agar. The test of “insufficient prospects of the success” has been embedded in UCPR 11.6(2)(c), while AGC Capital Securities, Yoon, and Rossiter are not concerned with this provision. They are brought on r11.8AA.

Comparing Agar on one hand and AGC Capital Securities, Yoon, and Rossiter on the other, the latter cases consider forum non conveniens when determining the plaintiff’s application to proceed where no appearance by defendant. Is this consistent with Agar? This issue should be discussed from two aspects. First, Agar did not consider forum non conveniens under a clearly inappropriate forum doctrine because parties did not raise this issue. Therefore, it may argue that this issue was not considered by High Court in Agar. Second, Agar limits courts’ consideration to jurisdictional nexus with the forum when determining the plaintiff’s application to proceed where no appearance by defendant. Jurisdictional nexus refers to whether the service is authorized by the UCPR. However, broadly, jurisdictional nexus may cover forum non conveniens considerations.

Further, AGC Capital Securities, Yoon, and Rossiter seem to confuse the test for the plaintiff’s application for leave to proceed where no appearance by defendant with the test for the defendant’s application to set aside the service. The test of “real issue to be determined” requires the court to examine the merits of the plaintiff’s claim. This is permitted when determining the defendant’s application to set aside the service. However, when determining the plaintiff’s application for leave to proceed where no appearance by defendant, Agar says the court should not assess the strength of the plaintiff’s claim. Further, the test of “real issue to be determined” is not equivalent to the test of “insufficient prospects of the success” decided by Agar and embedded in UCPR r 11.6.

Could AGC Capital Securities, Yoon, and Rossiter be justified on policy grounds? A proposed argument is that leave to proceed involves leave, which requires an exercise of discretion; and providing leave to proceed in circumstances where there is “no real issue” would be a waste of limited court resources. However, the difficulty of this argument is that it conflates the leave to proceed with the motion for a summary judgment. If the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider the test of “no real issue” sua sponte.

Could AGC Capital Securities, Yoon, and Rossiter be distinguished from Agar? In both Yoon and Rossiter, the court issued a summary judgment for the plaintiff. In AGC Capital Securities, the court directed the plaintiff to apply for a default judgment. AGC Capital Securities, Yoon, and Rossiter are proceedings where the defendants make no appearance. However, Agar is a proceeding where the defendant applied to set aside the service. Although Agar considered the test for the plaintiff’s application to proceed where no appearance by defendant, it did so for the purpose of distinguishing this test from the test for the defendant’s application to set aside the service. Therefore, in this aspect, it may argue that AGC Capital Securities, Yoon, and Rossiter are distinguishable from Agar, because they are the cases where the plaintiff applied for both a leave and a summary judgment. Therefore, the real issue for AGC Capital Securities, Yoon, and Rossiter is that the court conflated the test for the plaintiff’s application to proceed where no appearance by defendant and the test for summary judgment.

AGC Capital Securities, Yoon, Rossiter, and Agar also bring up another question: why is the test for a plaintiff’s application for leave when no appearance by defendant and the test for a defendant’s application to set aside the service are different? Or should the tests be the same? In the plaintiff’s application for leave to proceed, is the court supposed to take care of the non-responding defendant? The answer is negative partly because the common-law court is not an inquisitorial court in civil-law countries. More important, if the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider whether there is real issue to be determined in the plaintiff’s claim.  

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

If a defendant is not present in Australia, Uniform Civil Procedure Rules (“UCPR”) of New South Wales provides that service outside of Australia is permitted if the plaintiff’s claim falls within UCPR Schedule 6 or if a leave is granted under UCPR rule 11.5. If a defendant does not respond within 42 days after being served successfully (rule 11.8), the plaintiff must apply for leave to proceed (rule 11.8AA). A defendant can challenge the jurisdiction of the court and apply to set aside service (rule 12.11). The court has discretion to decide whether to assume jurisdiction (rule 11.6).

AGC Capital Securities v Jaijaifu Modern Agriculture (HK) Limited [2019] NSWSC 62, a case decided by NSW Supreme Court in 2019 provides a test to determine a plaintiff’s application for leave to proceed when no appearance by defendant. The test includes four components: 

1. Whether the defendant has been properly served;
2. Whether the claim in the originating process falls within UCPR Schedule 6;
3. Whether it be demonstrated that there is a real issue to be determined (this requirement as being that the plaintiff has an arguable case being one that would be sufficient to survive an application for summary judgment); and
4. Whether this Court is not a clearly inappropriate forum.

The same test is adopted by Yoon v Lee [2017] NSWSC 1338 and Rossiter v. Core Mining [2015] NSWSC 360.

The application for leave in AGC Capital Securities, Yoon, and Rossiter is not related to UCPR r 11.5.  r 11.5 is to determine whether a leave to serve outside of Australia should be granted. However, these three cases are cases where service outside of Australia has been completed. They are concerned with leaves under r 11.8AA, which provides:

UCPR 11.8AA   Leave to proceed where no appearance by person

(1)  If an originating process is served on a person outside Australia and the person does not enter an appearance, the party serving the document may not proceed against the person served except by leave of the court.

(2)  An application for leave under subrule (1) may be made without serving notice of the application on the person served with the originating process.

R11.8AA does not specify a test. In Australia, the leading case for leave to proceed where no appearance by defendant is Agar v Hyde [2000] HCA 41. In Agar, two rugby players at the NSW brought a personal injury claim against the International Rugby Football Board and several national representatives at the Board, alleging that the Board and its representatives own a duty of care for the plaintiffs. The defendants were served outside of Australia and applied to set aside the service. Agar holds that different tests should be adopted for the plaintiff’s application for leave to proceed where no appearance by defendant and for the defendant’s application to set aside the service.

According to Agar, the test for the plaintiff’s application for leave to proceed when no appearance by defendant should focus on the jurisdictional nexus between the plaintiff’s pleading and the forum and should not consider the merits of the case. The High Court considers:

“is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations, is a cause of action arising in the State? The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff’s claim.” (Agar, para 50)

The Court of Appeal required the plaintiff to establish a good arguable case. However, the High Court held that “[t]he Court of Appeal was wrong to make such an assessment in deciding whether the Rules permitted service out.” (Agar, para 51) Instead, the High Court only requires the plaintiff to establish a prima facie case, saying

“[t]he application of these paragraphs of r1A depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial. Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs of PT 10 r 1A, service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.” (Agar, para 51)

PT 10 r 1A is functionally equivalent to the current UCPR Sch 6 although their contents differ to some extent. In contrast, the test of “real issue to be determined” held in AGC Capital Securities, Yoon, and Rossiter is on the merits of the case, which is excluded by Agar.

Regarding the defendant’s application to set aside the service, Agar adopts three common grounds:

• Service is not authorized by the rules (ie, does not fall within UCPR Sch 6 and not otherwise authorised),
• The Court is an inappropriate forum,
• The claim has “insufficient prospects of the success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims.” This requires the Court to assess the strength of the claim and the test is the same for summary judgment lodged by a defendant served locally.

These grounds are not exhaustive. For example, the defendant can apply to set aside the service based on an exclusive jurisdiction clause favouring a foreign court.

However, AGC Capital Securities, Yoon, and Rossiter do not concern the defendant’s application to set aside the service. Further, the test of “real issue to be determined” in AGC Capital Securities, Yoon, and Rossiter is not the same as the “insufficient prospects of the success” in Agar. The test of “insufficient prospects of the success” has been embedded in UCPR 11.6(2)(c), while AGC Capital Securities, Yoon, and Rossiter are not concerned with this provision. They are brought on r11.8AA.

Comparing Agar on one hand and AGC Capital Securities, Yoon, and Rossiter on the other, the latter cases consider forum non conveniens when determining the plaintiff’s application to proceed where no appearance by defendant. Is this consistent with Agar? This issue should be discussed from two aspects. First, Agar did not consider forum non conveniens under a clearly inappropriate forum doctrine because parties did not raise this issue. Therefore, it may argue that this issue was not considered by High Court in Agar. Second, Agar limits courts’ consideration to jurisdictional nexus with the forum when determining the plaintiff’s application to proceed where no appearance by defendant. Jurisdictional nexus refers to whether the service is authorized by the UCPR. However, broadly, jurisdictional nexus may cover forum non conveniens considerations.

Further, AGC Capital Securities, Yoon, and Rossiter seem to confuse the test for the plaintiff’s application for leave to proceed where no appearance by defendant with the test for the defendant’s application to set aside the service. The test of “real issue to be determined” requires the court to examine the merits of the plaintiff’s claim. This is permitted when determining the defendant’s application to set aside the service. However, when determining the plaintiff’s application for leave to proceed where no appearance by defendant, Agar says the court should not assess the strength of the plaintiff’s claim. Further, the test of “real issue to be determined” is not equivalent to the test of “insufficient prospects of the success” decided by Agar and embedded in UCPR r 11.6.

Could AGC Capital Securities, Yoon, and Rossiter be justified on policy grounds? A proposed argument is that leave to proceed involves leave, which requires an exercise of discretion; and providing leave to proceed in circumstances where there is “no real issue” would be a waste of limited court resources. However, the difficulty of this argument is that it conflates the leave to proceed with the motion for a summary judgment. If the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider the test of “no real issue” sua sponte.

Could AGC Capital Securities, Yoon, and Rossiter be distinguished from Agar? In both Yoon and Rossiter, the court issued a summary judgment for the plaintiff. In AGC Capital Securities, the court directed the plaintiff to apply for a default judgment. AGC Capital Securities, Yoon, and Rossiter are proceedings where the defendants make no appearance. However, Agar is a proceeding where the defendant applied to set aside the service. Although Agar considered the test for the plaintiff’s application to proceed where no appearance by defendant, it did so for the purpose of distinguishing this test from the test for the defendant’s application to set aside the service. Therefore, in this aspect, it may argue that AGC Capital Securities, Yoon, and Rossiter are distinguishable from Agar, because they are the cases where the plaintiff applied for both a leave and a summary judgment. Therefore, the real issue for AGC Capital Securities, Yoon, and Rossiter is that the court conflated the test for the plaintiff’s application to proceed where no appearance by defendant and the test for summary judgment.

AGC Capital Securities, Yoon, Rossiter, and Agar also bring up another question: why is the test for a plaintiff’s application for leave when no appearance by defendant and the test for a defendant’s application to set aside the service are different? Or should the tests be the same? In the plaintiff’s application for leave to proceed, is the court supposed to take care of the non-responding defendant? The answer is negative partly because the common-law court is not an inquisitorial court in civil-law countries. More important, if the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider whether there is real issue to be determined in the plaintiff’s claim.  

In his Opinion delivered today, Advocate General Tanchev presents his take on Article 10 of the Regulation No 1259/2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation (commonly referred to as Rome III Regulation), under which ‘[w]here the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply’.

More specifically, the Opinion deals with the question lodged before the Court of Justice by a Romanian court, concerning the interpretation of the expression ‘the law applicable pursuant to Article 5 or Article 8 [the Rome III Regulation] makes no provision for divorce’.

By its question, the referring court is, in essence, asking whether Article 10 of the Rome III Regulation must be interpreted in a strict sense, meaning that the recourse to the law of the forum can be made only where the foreign law designed as applicable does not recognize any form of divorce, or more broadly – the law of the forum should be applied when the foreign law designed as applicable under the Regulation permits a divorce, but does so in ‘extremely limited circumstances involving an obligatory legal separation procedure prior to divorce, in respect of which the law of the forum contains no equivalent procedural provision’.

Even though the requests for a preliminary ruling concerning Article 10 of the Regulation were already presented in the cases C-281/15, Sahyouni and C-372/16, Sahyouni II (yet, in a different context, relating to the second limb of Article 10 – discrimination through lack of equal access to divorce), ultimately this provision has not been yet interpreted by the Court of Justice. Therefore, alongside the Opinion of AG Saugmandsgaard Øe delivered in the case C-372/16, Sahyouni II, which also addresses this provision, Opinion of AG Tanchev is certainly worthy of attention. While the very question referred to the Court did not seem to pose a particular difficulty, these are the supplementary considerations on the consequences of the proposed interpretation of Article 10 that certainly make this Opinion an interesting read.

Legal and factual context

Seized of a petition for divorce, the first instance court established the jurisdiction of the Romanian courts under Article 3(1)(b) of the Brussels II Regulation due to the common nationality of both spouses.

Since the parties seemingly had not chosen the law applicable to divorce and had been habitually resident in Italy, the first instance court considered that, pursuant to Article 8(a) of the Rome III Regulation, it is the Italian law that governs the grounds of divorce.

Yet, this court observed that, according to the Italian law, the dissolution of marriage can be pronounced only where there had been a legal separation of the spouses and at least three years have passed between this separation and the time at which the court have been seized by the applicant. It seems that in this regard the first instance court referred itself to Article 3(2)(b)of the Law No 898 of 1 December 1970 (Disciplina dei casi di scioglimento del matrimonio), mentioned in the Opinion presented by AG Bot in case C-386/17, Liberato (for multiple linguistic versions of this provision see point 20 of this Opinion).

However, the first instance court considered that since no provision is made for legal separation proceedings under Romanian law, those proceedings must be conducted before the Italian courts and therefore any application to that effect made before the Romanian courts is inadmissible.

The applicant lodged an appeal against the decision of the first instance court. In those circumstances, the second instance court presents its request for a preliminary ruling.

Opinion of Advocate General

According to the Opinion of AG Tanchev, it is manifest that Article 10 of the Rome III Regulation calls for a strict interpretation in the sense that the expression ‘where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce’ relates only to situations in which the applicable foreign law does not recognise the institution of divorce (see, most notably, point 19 of the Opinion). In order to reach this conclusion, the Opinion delves into literal, systemic, historical and teleological interpretation of the provision in question.

At point 37, the Opinion indicates that ‘[the] Italian law, as the applicable law, does not prohibit divorce; it merely subjects it to certain requirements, which is within its competence regarding its substantive family law’. Therefore, in the present case, there is no room for Article 10 of the Rome III Regulation to apply.

Yet, as mentioned in the introduction, the analysis does not stop here. At points 59 et seq. the Opinion addresses the consequences of the advocated interpretation of Article 10.

At points 62 and 63 the Opinion argues in following terms that the national courts seized of a petition for divorce could have recourse to ‘adaptation’ (see also point 68) :

62.      First of all, pursuant to Section 1 of Chapter II of [the Brussels II bis Regulation], where the court of a Member State is seized of an application for divorce, it cannot decline jurisdiction (contrary to a court seized in the area of parental responsibility, which has discretion to address the courts of another Member State, under Article 15 of that regulation) and it is obliged to rule on that application for divorce.

63.      I agree with the view of the German Government that the Member States participating in the enhanced cooperation implemented by [the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts. Therefore, instead of considering that legal separation must first be established or ordered before the Italian courts, the Romanian courts should, to my mind, allow for such a procedure and apply, by analogy, national procedural rules relating to divorces or even adapt foreign (Italian) procedural rules relating to legal separation (in conjunction with Romanian national rules). Otherwise, the provisions of [the Rome III Regulation] would be partially ineffective.

Against this background, at points 65 and 66 the Opinion refers to the solution proposed by the Commission and favoured also by Advocate General:

65.      By way of a concrete solution in the present case, the Commission proposed that the court seized apply the substantive conditions foreseen by the applicable law and forgo the application of any procedural conditions foreseen by that law, in circumstances where the procedural law of the forum does not allow for those procedural conditions to be met. Therefore, if, in a particular case, the substantive conditions for a legal separation order are fulfilled, the forum court may remedy the fact that that court itself cannot grant such an order by waiving that foreign procedural condition.

66.      I concur. In my view, such a solution would be balanced and would correspond to the implicit intention of the Union legislature. First, it would not unduly encourage forum shopping, because it would require the substantive conditions of the applicable law to be fulfilled. The applicant would not be able to avoid those conditions by seizing another court under the very generous rules of [the Brussels II Regulation] and by asking for his or her own law to be applied (parties can avoid those conditions quite easily if they agree on the choice of the law of the forum).

On a side note…

It is although distant from the context of the present request for a preliminary ruling but nonetheless interesting to notice some points that may be inspirational in others contexts and in relation to the issues not covered by this request:

• At point 69, while expressing itself in favour of ‘adaptation’, the Opinion states ‘while [the Rome III Regulation] does not provide specifically for such an adaptation, neither does it expressly prohibit it’. In this regard, the Opinion draws inspiration from the Succession Regulation and from the twin Regulations Nos 2016/1103 and 2016/1104. It is yet to be seen whether these considerations herald the recognition of adaptation as a general (and non-codified) instrument of EU private international law and, therefore, such ‘adaptation’ could occur also in relation to, i.e., the Rome I and II Regulations.

• It is worth mentioning that it can be argued that, at points 62 and 63, the Opinion acknowledges the existence of a link between, on the one hand, the obligation to exercise jurisdiction established under the Brussels II Regulation and, on the other hand, a substantive effect that should be (at least potentially) achievable under the law designed as applicable under Rome III Regulation. It states ‘pursuant to [the Brussels II Regulation], where the court of a Member State is seized of an application for divorce, it cannot decline jurisdiction […] and it is obliged to rule on that application for divorce […]’. Then ‘[the Member States bound by the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts’. If anything, it will be interesting to follow the discussion on the implications of such interpretation of these Regulations.

• Before delving into the consequences of the proposed interpretation of Article 10 of the Rome III Regulation, at points 59 to 61, the Opinion clarifies that the considerations relating to that issue are necessary ‘in order to provide the national court with an appropriate [and useful] answer for the purpose of the application of [EU] law in the dispute before it’.
  
  Even though these considerations do not seem vital to answer the preliminary question (what makes them even more worthy of attention –  if this is the case, they do not have to be necessarily addressed in the upcoming judgment), they may also be relevant in this as well as in other contexts for a very specific reason.
  
  Before the first instance court, the applicant seeking divorce invoked Article 12 of the Rome III Regulation. The applicant claimed that the application of Italian law is manifestly incompatible with the public policy of the forum, thus making it necessary to exclude the application of the foreign law (point 15 of the Opinion).
  
  If Article 10 of the Rome III Regulation must be considered lex specialis that overrides Article 12, the fact that the former provision is not relevant in the present case could make space for the latter to apply. One could wonder – as the appellant seemingly did – whether a requirement provided for in by a foreign law could be disapplied as contravening the public policy of the forum.
  
  The Opinion seems to provide some guidance relating to that issue. In fact, it addresses the public policy exception, yet in a different context.
  
  At point 63, the Opinion provides that ‘the Member States participating in the enhanced cooperation implemented by [the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts’. At point 64 it argues that ‘the referring court cannot refuse to rule on the application in the main proceedings on the basis of Article 12 of the above regulation (which is reserved for exceptional cases) on the ground that its national law does not provide for legal separation or for procedural rules for legal separation’.
  
  Leaving aside the question whether it could be inferred from the lack of procedural scheme to pronounce legal separation that granting a divorce without the separation itself being pronounced is (or could be) contrary to the public policy of the forum (this is, of course, a distinct issue relating to the law of the forum and to the limits of the concept of public policy under the Rome III Regulation), the Opinion seems to recognize the aforementioned lex specialis relation. However, it also seeks to prevent the excessive reliance on the public policy exception with reference to a simple maladjustment of the law of the forum.

• It seems that the doubts of the referring court result from the fact that the Italian law imposes a requirement that cannot be fulfilled under the Romanian law.
  
  Indeed, on the one hand, according to the information provided by the database managed by European Judicial Network, ‘[i]n Romanian law there is no concept of ‘legal separation’ but only of ‘de facto separation’ and the judicial division of property. This is a situation that must be proven before the court. In the event of the de facto separation having lasted for at least two years, this is a reason for judicially issuing a divorce.’
  
  On the other hand, the Italian law requires a judicial separation to be declared by a judgment that has acquired the force of law or a consensual separation that has been judicially confirmed (Article 3(2)(b)of the Law No 898 of 1 December 1970 read in the light of Article 150 of the Italian Civil Code).

• At point 64, the Opinion seems to take the view that the requirement provided for in the Italian law according to which a separation has to be declared by a judgment or judicially confirmed is a ‘procedural condition’.  It will be interesting to see the evolution of case law and literature as to the classification of similar requirements in different contexts than that of Article 3(2)(b)of the Law No 898 of 1 December 1970 read in the light of Article 150 of the Italian Civil Code.
  
  The question remains open whether such other requirements are also of procedural nature (or, alternatively, even though it might ultimately boil down to the question of terminology: of formal nature or of substantive nature, yet they can be fulfilled only via the procedural framework of the State that imposes them and of the other States that provide for a judicially-pronounced separation, if one takes into account the recognition of a judgment on separation within the divorce proceedings) and, if they are truly of procedural nature, do they fall within the scope of the law designed as applicable under the Rome III Regulation.

In his Opinion delivered today, Advocate General Tanchev presents his take on Article 10 of the Regulation No 1259/2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation (commonly referred to as Rome III Regulation), under which ‘[w]here the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply’.

More specifically, the Opinion deals with the question lodged before the Court of Justice by a Romanian court, concerning the interpretation of the expression ‘the law applicable pursuant to Article 5 or Article 8 [the Rome III Regulation] makes no provision for divorce’.

By its question, the referring court is, in essence, asking whether Article 10 of the Rome III Regulation must be interpreted in a strict sense, meaning that the recourse to the law of the forum can be made only where the foreign law designed as applicable does not recognize any form of divorce, or more broadly – the law of the forum should be applied when the foreign law designed as applicable under the Regulation permits a divorce, but does so in ‘extremely limited circumstances involving an obligatory legal separation procedure prior to divorce, in respect of which the law of the forum contains no equivalent procedural provision’.

Even though the requests for a preliminary ruling concerning Article 10 of the Regulation were already presented in the cases C-281/15, Sahyouni and C-372/16, Sahyouni II (yet, in a different context, relating to the second limb of Article 10 – discrimination through lack of equal access to divorce), ultimately this provision has not been yet interpreted by the Court of Justice. Therefore, alongside the Opinion of AG Saugmandsgaard Øe delivered in the case C-372/16, Sahyouni II, which also addresses this provision, Opinion of AG Tanchev is certainly worthy of attention. While the very question referred to the Court did not seem to pose a particular difficulty, these are the supplementary considerations on the consequences of the proposed interpretation of Article 10 that certainly make this Opinion an interesting read.

Legal and factual context

Seized of a petition for divorce, the first instance court established the jurisdiction of the Romanian courts under Article 3(1)(b) of the Brussels II Regulation due to the common nationality of both spouses.

Since the parties seemingly had not chosen the law applicable to divorce and had been habitually resident in Italy, the first instance court considered that, pursuant to Article 8(a) of the Rome III Regulation, it is the Italian law that governs the grounds of divorce.

Yet, this court observed that, according to the Italian law, the dissolution of marriage can be pronounced only where there had been a legal separation of the spouses and at least three years have passed between this separation and the time at which the court have been seized by the applicant. It seems that in this regard the first instance court referred itself to Article 3(2)(b)of the Law No 898 of 1 December 1970 (Disciplina dei casi di scioglimento del matrimonio), mentioned in the Opinion presented by AG Bot in case C-386/17, Liberato (for multiple linguistic versions of this provision see point 20 of this Opinion).

However, the first instance court considered that since no provision is made for legal separation proceedings under Romanian law, those proceedings must be conducted before the Italian courts and therefore any application to that effect made before the Romanian courts is inadmissible.

The applicant lodged an appeal against the decision of the first instance court. In those circumstances, the second instance court presents its request for a preliminary ruling.

Opinion of Advocate General

According to the Opinion of AG Tanchev, it is manifest that Article 10 of the Rome III Regulation calls for a strict interpretation in the sense that the expression ‘where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce’ relates only to situations in which the applicable foreign law does not recognise the institution of divorce (see, most notably, point 19 of the Opinion). In order to reach this conclusion, the Opinion delves into literal, systemic, historical and teleological interpretation of the provision in question.

At point 37, the Opinion indicates that ‘[the] Italian law, as the applicable law, does not prohibit divorce; it merely subjects it to certain requirements, which is within its competence regarding its substantive family law’. Therefore, in the present case, there is no room for Article 10 of the Rome III Regulation to apply.

Yet, as mentioned in the introduction, the analysis does not stop here. At points 59 et seq. the Opinion addresses the consequences of the advocated interpretation of Article 10.

At points 62 and 63 the Opinion argues in following terms that the national courts seized of a petition for divorce could have recourse to ‘adaptation’ (see also point 68) :

62.      First of all, pursuant to Section 1 of Chapter II of [the Brussels II bis Regulation], where the court of a Member State is seized of an application for divorce, it cannot decline jurisdiction (contrary to a court seized in the area of parental responsibility, which has discretion to address the courts of another Member State, under Article 15 of that regulation) and it is obliged to rule on that application for divorce.

63.      I agree with the view of the German Government that the Member States participating in the enhanced cooperation implemented by [the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts. Therefore, instead of considering that legal separation must first be established or ordered before the Italian courts, the Romanian courts should, to my mind, allow for such a procedure and apply, by analogy, national procedural rules relating to divorces or even adapt foreign (Italian) procedural rules relating to legal separation (in conjunction with Romanian national rules). Otherwise, the provisions of [the Rome III Regulation] would be partially ineffective.

Against this background, at points 65 and 66 the Opinion refers to the solution proposed by the Commission and favoured also by Advocate General:

65.      By way of a concrete solution in the present case, the Commission proposed that the court seized apply the substantive conditions foreseen by the applicable law and forgo the application of any procedural conditions foreseen by that law, in circumstances where the procedural law of the forum does not allow for those procedural conditions to be met. Therefore, if, in a particular case, the substantive conditions for a legal separation order are fulfilled, the forum court may remedy the fact that that court itself cannot grant such an order by waiving that foreign procedural condition.

66.      I concur. In my view, such a solution would be balanced and would correspond to the implicit intention of the Union legislature. First, it would not unduly encourage forum shopping, because it would require the substantive conditions of the applicable law to be fulfilled. The applicant would not be able to avoid those conditions by seizing another court under the very generous rules of [the Brussels II Regulation] and by asking for his or her own law to be applied (parties can avoid those conditions quite easily if they agree on the choice of the law of the forum).

On a side note…

It is although distant from the context of the present request for a preliminary ruling but nonetheless interesting to notice some points that may be inspirational in others contexts and in relation to the issues not covered by this request:

• At point 69, while expressing itself in favour of ‘adaptation’, the Opinion states ‘while [the Rome III Regulation] does not provide specifically for such an adaptation, neither does it expressly prohibit it’. In this regard, the Opinion draws inspiration from the Succession Regulation and from the twin Regulations Nos 2016/1103 and 2016/1104. It is yet to be seen whether these considerations herald the recognition of adaptation as a general (and non-codified) instrument of EU private international law and, therefore, such ‘adaptation’ could occur also in relation to, i.e., the Rome I and II Regulations.
• It is worth mentioning that it can be argued that, at points 62 and 63, the Opinion acknowledges the existence of a link between, on the one hand, the obligation to exercise jurisdiction established under the Brussels II Regulation and, on the other hand, a substantive effect that should be (at least potentially) achievable under the law designed as applicable under Rome III Regulation. It states ‘pursuant to [the Brussels II Regulation], where the court of a Member State is seized of an application for divorce, it cannot decline jurisdiction […] and it is obliged to rule on that application for divorce […]’. Then ‘[the Member States bound by the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts’. If anything, it will be interesting to follow the discussion on the implications of such interpretation of these Regulations.
• Before delving into the consequences of the proposed interpretation of Article 10 of the Rome III Regulation, at points 59 to 61, the Opinion clarifies that the considerations relating to that issue are necessary ‘in order to provide the national court with an appropriate [and useful] answer for the purpose of the application of [EU] law in the dispute before it’.

  Even though these considerations do not seem vital to answer the preliminary question (what makes them even more worthy of attention –  if this is the case, they do not have to be necessarily addressed in the upcoming judgment), they may also be relevant in this as well as in other contexts for a very specific reason.

  Before the first instance court, the applicant seeking divorce invoked Article 12 of the Rome III Regulation. The applicant claimed that the application of Italian law is manifestly incompatible with the public policy of the forum, thus making it necessary to exclude the application of the foreign law (point 15 of the Opinion).

  If Article 10 of the Rome III Regulation must be considered lex specialis that overrides Article 12, the fact that the former provision is not relevant in the present case could make space for the latter to apply. One could wonder – as the appellant seemingly did – whether a requirement provided for in by a foreign law could be disapplied as contravening the public policy of the forum.

  The Opinion seems to provide some guidance relating to that issue. In fact, it addresses the public policy exception, yet in a different context.

  At point 63, the Opinion provides that ‘the Member States participating in the enhanced cooperation implemented by [the Rome III Regulation] must ensure that both divorce and legal separation may be granted by their courts’. At point 64 it argues that ‘the referring court cannot refuse to rule on the application in the main proceedings on the basis of Article 12 of the above regulation (which is reserved for exceptional cases) on the ground that its national law does not provide for legal separation or for procedural rules for legal separation’.

  Leaving aside the question whether it could be inferred from the lack of procedural scheme to pronounce legal separation that granting a divorce without the separation itself being pronounced is (or could be) contrary to the public policy of the forum (this is, of course, a distinct issue relating to the law of the forum and to the limits of the concept of public policy under the Rome III Regulation), the Opinion seems to recognize the aforementioned lex specialis relation. However, it also seeks to prevent the excessive reliance on the public policy exception with reference to a simple maladjustment of the law of the forum.

• It seems that the doubts of the referring court result from the fact that the Italian law imposes a requirement that cannot be fulfilled under the Romanian law.

  Indeed, on the one hand, according to the information provided by the database managed by European Judicial Network, ‘[i]n Romanian law there is no concept of ‘legal separation’ but only of ‘de facto separation’ and the judicial division of property. This is a situation that must be proven before the court. In the event of the de facto separation having lasted for at least two years, this is a reason for judicially issuing a divorce.’

  On the other hand, the Italian law requires a judicial separation to be declared by a judgment that has acquired the force of law or a consensual separation that has been judicially confirmed (Article 3(2)(b)of the Law No 898 of 1 December 1970 read in the light of Article 150 of the Italian Civil Code).

• At point 64, the Opinion seems to take the view that the requirement provided for in the Italian law according to which a separation has to be declared by a judgment or judicially confirmed is a ‘procedural condition’.  It will be interesting to see the evolution of case law and literature as to the classification of similar requirements in different contexts than that of Article 3(2)(b)of the Law No 898 of 1 December 1970 read in the light of Article 150 of the Italian Civil Code.

  The question remains open whether such other requirements are also of procedural nature (or, alternatively, even though it might ultimately boil down to the question of terminology: of formal nature or of substantive nature, yet they can be fulfilled only via the procedural framework of the State that imposes them and of the other States that provide for a judicially-pronounced separation, if one takes into account the recognition of a judgment on separation within the divorce proceedings) and, if they are truly of procedural nature, do they fall within the scope of the law designed as applicable under the Rome III Regulation.

 

If a defendant is not present in Australia, Uniform Civil Procedure Rules (“UCPR”) of New South Wales provides that service outside of Australia is permitted if the plaintiff’s claim falls within UCPR Schedule 6 or if a leave is granted under UCPR rule 11.5. If a defendant does not respond within 42 days after being served successfully (rule 11.8), the plaintiff must apply for leave to proceed (rule 11.8AA). A defendant can challenge the jurisdiction of the court and apply to set aside service (rule 12.11). The court has discretion to decide whether to assume jurisdiction (rule 11.6).

AGC Capital Securities v Jaijaifu Modern Agriculture (HK) Limited [2019] NSWSC 62, a case decided by NSW Supreme Court in 2019 provides a test to determine a plaintiff’s application for leave to proceed when no appearance by defendant. The test includes four components:

1.      Whether the defendant has been properly served;

2.      Whether the claim in the originating process falls within UCPR Schedule 6;

3.      Whether it be demonstrated that there is a real issue to be determined (this requirement as being that the plaintiff has an arguable case being one that would be sufficient to survive an application for summary judgment); and

4.      Whether this Court is not a clearly inappropriate forum.

The same test is adopted by Yoon v Lee [2017] NSWSC 1338 and Rossiter v. Core Mining [2015] NSWSC 360.

The application for leave in AGC Capital Securities, Yoon, and Rossiter is not related to UCPR r 11.5.  r 11.5 is to determine whether a leave to serve outside of Australia should be granted. However, these three cases are cases where service outside of Australia has been completed. They are concerned with leaves under r 11.8AA, which provides:

UCPR 11.8AA   Leave to proceed where no appearance by person

(1)  If an originating process is served on a person outside Australia and the person does not enter an appearance, the party serving the document may not proceed against the person served except by leave of the court.

(2)  An application for leave under subrule (1) may be made without serving notice of the application on the person served with the originating process.

R11.8AA does not specify a test. In Australia, the leading case for leave to proceed where no appearance by defendant is Agar v Hyde [2000] HCA 41. In Agar, two rugby players at the NSW brought a personal injury claim against the International Rugby Football Board and several national representatives at the Board, alleging that the Board and its representatives own a duty of care for the plaintiffs. The defendants were served outside of Australia and applied to set aside the service. Agar holds that different tests should be adopted for the plaintiff’s application for leave to proceed where no appearance by defendant and for the defendant’s application to set aside the service.

According to Agar, the test for the plaintiff’s application for leave to proceed when no appearance by defendant should focus on the jurisdictional nexus between the plaintiff’s pleading and the forum and should not consider the merits of the case. The High Court considers:

“is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations, is a cause of action arising in the State? The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff’s claim.” (Agar, para 50)

The Court of Appeal required the plaintiff to establish a good arguable case. However, the High Court held that “[t]he Court of Appeal was wrong to make such an assessment in deciding whether the Rules permitted service out.” (Agar, para 51) Instead, the High Court only requires the plaintiff to establish a prima facie case, saying

“[t]he application of these paragraphs of r1A depends on the nature of the allegations which the plaintiff makes, not on whether those allegations will be made good at trial. Once a claim is seen to be of the requisite kind, the proceeding falls within the relevant paragraph or paragraphs of PT 10 r 1A, service outside Australia is permitted, and prima facie the plaintiff should have leave to proceed.” (Agar, para 51)

PT 10 r 1A is functionally equivalent to the current UCPR Sch 6 although their contents differ to some extent. In contrast, the test of “real issue to be determined” held in AGC Capital Securities, Yoon, and Rossiter is on the merits of the case, which is excluded by Agar.

Regarding the defendant’s application to set aside the service, Agar adopts three common grounds:

• Service is not authorized by the rules (ie, does not fall within UCPR Sch 6 and not otherwise authorised),
• The Court is an inappropriate forum,
• The claim has “insufficient prospects of the success to warrant putting an overseas defendant to the time, expense and trouble of defending the claims.” This requires the Court to assess the strength of the claim and the test is the same for summary judgment lodged by a defendant served locally.

These grounds are not exhaustive. For example, the defendant can apply to set aside the service based on an exclusive jurisdiction clause favouring a foreign court.

However, AGC Capital Securities, Yoon, and Rossiter do not concern the defendant’s application to set aside the service. Further, the test of “real issue to be determined” in AGC Capital Securities, Yoon, and Rossiter is not the same as the “insufficient prospects of the success” in Agar. The test of “insufficient prospects of the success” has been embedded in UCPR 11.6(2)(c), while AGC Capital Securities, Yoon, and Rossiter are not concerned with this provision. They are brought on r11.8AA.

Comparing Agar on one hand and AGC Capital Securities, Yoon, and Rossiter on the other, the latter cases consider forum non conveniens when determining the plaintiff’s application to proceed where no appearance by defendant. Is this consistent with Agar? This issue should be discussed from two aspects. First, Agar did not consider forum non conveniens under a clearly inappropriate forum doctrine because parties did not raise this issue. Therefore, it may argue that this issue was not considered by High Court in Agar. Second, Agar limits courts’ consideration to jurisdictional nexus with the forum when determining the plaintiff’s application to proceed where no appearance by defendant. Jurisdictional nexus refers to whether the service is authorized by the UCPR. However, broadly, jurisdictional nexus may cover forum non conveniens considerations.

Further, AGC Capital Securities, Yoon, and Rossiter seem to confuse the test for the plaintiff’s application for leave to proceed where no appearance by defendant with the test for the defendant’s application to set aside the service. The test of “real issue to be determined” requires the court to examine the merits of the plaintiff’s claim. This is permitted when determining the defendant’s application to set aside the service. However, when determining the plaintiff’s application for leave to proceed where no appearance by defendant, Agar says the court should not assess the strength of the plaintiff’s claim. Further, the test of “real issue to be determined” is not equivalent to the test of “insufficient prospects of the success” decided by Agar and embedded in UCPR r 11.6.

Could AGC Capital Securities, Yoon, and Rossiter be justified on policy grounds? A proposed argument is that leave to proceed involves leave, which requires an exercise of discretion; and providing leave to proceed in circumstances where there is “no real issue” would be a waste of limited court resources. However, the difficulty of this argument is that it conflates the leave to proceed with the motion for a summary judgment. If the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider the test of “no real issue” sua sponte.

Could AGC Capital Securities, Yoon, and Rossiter be distinguished from Agar? In both Yoon and Rossiter, the court issued a summary judgment for the plaintiff. In AGC Capital Securities, the court directed the plaintiff to apply for a default judgment. AGC Capital Securities, Yoon, and Rossiter are proceedings where the defendants make no appearance. However, Agar is a proceeding where the defendant applied to set aside the service. Although Agar considered the test for the plaintiff’s application to proceed where no appearance by defendant, it did so for the purpose of distinguishing this test from the test for the defendant’s application to set aside the service. Therefore, in this aspect, it may argue that AGC Capital Securities, Yoon, and Rossiter are distinguishable from Agar, because they are the cases where the plaintiff applied for both a leave and a summary judgment. Therefore, the real issue for AGC Capital Securities, Yoon, and Rossiter is that the court conflated the test for the plaintiff’s application to proceed where no appearance by defendant and the test for summary judgment.

AGC Capital Securities, Yoon, Rossiter, and Agar also bring up another question: why is the test for a plaintiff’s application for leave when no appearance by defendant and the test for a defendant’s application to set aside the service are different? Or should the tests be the same? In the plaintiff’s application for leave to proceed, is the court supposed to take care of the non-responding defendant? The answer is negative partly because the common-law court is not an inquisitorial court in civil-law countries. More important, if the plaintiff only asks a leave to proceed without applying for a summary judgment, there is no ground for the court to consider whether there is real issue to be determined in the plaintiff’s claim.

The European Law Institute‘s (ELI) members on 21 March 2020 approved the Report on the Protection of Adults in International Situations.

This report is the outcome of the work of a team of academics and professionals chaired by Pietro Franzina and Richard Frimston. It sets out the current legal framework on the protection of persons above 18 years old who are not in a position to protect their own insterests (due to an impairment or incapacity).

The Report acknowledges the importance in this field of the Hague Convention of 13 January 2000 on the International Protection of Adults and encourages further ratification of it. The Convention has been ratified by only nine EU Member States (and signed by an additional seven).

After investigating the institutional possiblities of EU action on this topic, the Report also calls for action, both legislative and non-legislative, to complement the Convention. Possible measures include providing a (limited) choice of juridisdiction and securing the effective circulation of private mandates.

The European Law Institute‘s (ELI) members on 21 March 2020 approved the Report on the Protection of Adults in International Situations.

This report is the outcome of the work of a team of academics and professionals chaired by Pietro Franzina and Richard Frimston. It sets out the current legal framework on the protection of persons above 18 years old who are not in a position to protect their own insterests (due to an impairment or incapacity).

The Report acknowledges the importance in this field of the Hague Convention of 13 January 2000 on the International Protection of Adults and encourages further ratification of it. The Convention has been ratified by only nine EU Member States (and signed by an additional seven).

After investigating the institutional possiblities of EU action on this topic, the Report also calls for action, both legislative and non-legislative, to complement the Convention. Possible measures include providing a (limited) choice of juridisdiction and securing the effective circulation of private mandates.

In case you are looking for something to read while many parts of the world are under some form of lockdown, you may be pleased to learn that the conference volume of the 2nd German Conference for Young Scholars in PIL, which took place at University of Würzburg in 2019, has recently been published. It includes nine contributions by young researchers, including two English papers, on the conference theme of PIL between Tradition and Innovation as well as a keynote address by Professor Jürgen Basedow. Further information can be found on the publisher’s website.

What is more, the date and theme for the next iteration of the conference have just been announced. The conference will take place on 18 and 19 March 2021 (when Corona lockdowns will hopefully be no more than a distant memory) at the Max Planck Institute for Comparative and International Private Law in Hamburg and explore the theme of PIL for a better world: Vision – Reality – Aberration?. Further information can be found in the German and English Save-the-Date announcements as well as on the conference website.

In case you are looking for something to read while many parts of the world are under some form of lockdown, you may be pleased to learn that the conference volume of the 2nd German Conference for Young Scholars in PIL, which took place at University of Würzburg in 2019, has recently been published. It includes nine contributions by young researchers, including two English papers, on the conference theme of PIL between Tradition and Innovation as well as a keynote address by Professor Jürgen Basedow. Further information can be found on the publisher’s website.

What is more, the date and theme for the next iteration of the conference have just been announced. The conference will take place on 18 and 19 March 2021 (when Corona lockdowns will hopefully be no more than a distant memory) at the Max Planck Institute for Comparative and International Private Law in Hamburg and explore the theme of PIL for a better world: Vision – Reality – Aberration?. Further information can be found in the German and English Save-the-Date announcements as well as on the conference website.