EAPIL blog

Through a comfort letter, one party promises to indemnify a creditor if the latter’s debtor does not pay. This is a means for improving the credit of another party. Particularly widespread are comfort letters issued by a parent company for its subsidiary or vice versa.

But where can the creditor sue if the comfort letter is not honoured? And which law applies to these instruments?

These questions were addressed in a decision by the Court of Appeal of Brandenburg dated 25 November 2020 (reprinted in IPRax 2022, pp. 175 et seq., with a comment by Maximilian Pika, id. pp. 159 et seq.).

Facts

A company incorporated under Danish law and headquartered in Copenhagen had provided a comfort letter for one of its subsidiaries in Germany who operated an airport there. Subsequently, insolvency proceedings over the subsidiary were opened in Germany. The insolvency administrator sued the Danish parent company in a German court on the basis of the comfort letter.

In deciding whether it has jurisdiction to hear the case, the Court of Appeal of Brandenburg first discards the insolvency exception in Art 1(2)(d) Brussels I bis Regulation. It argues – quite correctly – that this exception only covers claims that are grounded in insolvency law, but not those under general civil and commercial law. The present claim was one under general civil and commercial law, independently of the fact that it was brought by the insolvency administrator, and thus fell inside the scope of the Brussels Ibis Regulation.

How to Characterise a Comfort Letter?

The Court toys with the idea to characterise the comfort letter as a contract for the “provision of services”, which could potentially lead to the Court’s jurisdiction under Art 7(1)(b) Brussels I bis. However, the Court underlines that in this case, the place of performance would not be in its district, but in that of the debtor’s domicile, as the obligation arising from the comfort letter would have to be paid there.

The same would be true, according to the Court, if the comfort letter were to be considered as a simple contract for payment, which would fall under Art 7(1)(a) Brussels Ibis. This provision requires to determine the place of performance under the applicable law (see on its forerunner, Article 5(1) Brussels Convention, CJEU, Tessili, para. 15).

In this context, the Court takes the view that the comfort letter, regardless of whether it is seen as a unilateral declaration of the creditor or a contract, falls under the Rome I Regulation.

In the opinion of the court, the comfort letter had been submitted to German law, as clearly demonstrated by the circumstances of the case, in particular the choice of the German language, the fact that it was issued for the benefit of a German debtor, and that it was submitted to German air traffic authorities to maintain the license of the debtor. Under German substantive law (sec. 269 German Civil Code), payment obligations have to be performed at the creditor’s domicile. Hence, Danish and not German courts would have jurisdiction under Art 7(1)(a) Brussels I bis as well.

Assessment

Under an autonomous European interpretation, the notion “contracts of services” has to be defined broadly. The Court could have been courageous and just applied Art 7(1)(b) Brussels Ibis. This would have made things much simpler.

However, there is little to quarrel with the result the court has reached. Comfort letters are performed at the domicile of the issuer, or one of the three places mentioned in Art 63(1) Brussels Ibis in case of a company as an issuer, and actions based on them have to be brought there.

This result will be little comfort for those who have received a comfort letter. They should make sure that the letter states a suitable place of performance. Even better is to insist on the insertion of a choice-of-forum clause.

This is the first in a series of posts on the French draft code of private international law of March 2022.

The draft code of private international law contains one single provision on renvoi.

The Proposed Rule

Article 8 of the draft code reads:

Unless provided otherwise in this code, the designation of foreign law includes its rules of private international law. However, French courts and authorities have the obligation to apply those rules only if one party requests it.

The explanatory report explains that the working group debated whether to “maintain” renvoi. The doubts of the working group were based on “comparative law” and the facts that the Hague conventions typically exclude renvoi. Nevertheless, the report explains, it was decided to maintain renvoi, because the Cour de cassation has recently applied it, and because the doctrine has benefits when it leads to the application of a law which is easier to apply for French courts (the explanatory report then gives the example of art 34 of the Succession Regulation).

Assessment

According to the explanatory report, the working group considered that the purpose of its work was to improve accessibility and intelligibility of the law. Article 8 is not fully satisfactory in this respect.

Article 8 suggests that French courts should always apply foreign choice of law rules. It does not explain whether this should only be the case where the foreign choice of law rule refers to the law of the forum, and, when it does not, whether the law of the third state designated by the foreign choice of law rule should accept renvoi.  In other words, Article 8 does not distinguish between first degree renvoi and second degree renvoi, and does not clarify whether whether second degree is allowed even if it is third or fourth degree renvoi. In fact, a literary interpretation of Article 8 could lead to the conclusion that the provision introduces the English foreign court theory where foreign choice of law rules are applicable without any further requirement.

The explanatory report suggests that the working group conducted a comparative study which revealed that renvoi is typically excluded. It is true that some modern PIL legislations have excluded it, such as Article 15 of the Belgian Code of Private International Law. Yet, many other legislations in the civil law world allow renvoi broadly. If the working group was going to maintain renvoi, maybe it would have been useful to take a look at these other legislations and see with which precision they regulate the issue.

To only take one example, the working group could have looked at the Italian 1995 Private International Law Act, which allows renvoi, and defines its regime much more precisely.

Article 13 Renvoi

1 Whenever reference is made to a foreign law in the following articles, account shall be taken of the renvoi made by foreign private international law to the law in force in another State if:

a) renvoi is accepted under the law of that State.

b) renvoi is made to Italian law.

2 Paragraph 1 shall not apply: a) to those cases in which the provisions of this law make the foreign law applicable according to the choice of law made by the parties concerned; b) with respect to the statutory form of acts; c) as related to the provisions of Chapter XI of this Title.

3 In the cases referred to in Articles 33, 34 and 35, account shall be taken of the renvoi only if the latter refers to a law allowing filiation to be established.

4 Where this law makes an international convention applicable in any event, the solution adopted in the convention in matters of renvoi shall always apply.

Article 34 of the Succession Regulation is also much more detailed than the draft provision of the French code. Whether it was the perfect example to justify the adoption of first degree renvoi is unclear, however, since Article 34 does not require that the law of a third state refers back to the law of the forum, but to the law of another Member State, and that it will not always be easier for a French court to apply the law of another Member State (say Finland) than the law of a third state (say Switzerland).

In July 2018, the French Minister of Justice invited Jean-Pierre Ancel, a former judge of the Cour de cassation (French supreme court for private and criminal matters) to establish a working group for the purpose of reflecting on the codification of French private international law.

In March 2022, the working group handed its work to the Ministry of Justice. It includes a draft code of private international law of 207 provisions, and an explanatory report.

The working group was essentially composed of judges and academics. It included very few members of the bar, and no corporate lawyers (whether from the bar or in house).

National Codification in a Context of EU Harmonisation

As all readers will know, the private international law of EU Member States is dominated by EU legislation. EU Regulations are of universal application in the field of choice law. They occupy a large part of the field of jurisdiction and enforcement of foreign judgments.

Of course, the working group and the draft code recognise this fact, and the working group has abstained to propose rules on issues clearly regulated by EU law.

Nevertheless, one wonders whether it is really worth codifying private international law at national level, and whether it would not be more useful to promote codification at EU level (GEDIP has been reflecting on this for a while and EAPIL has also established a working group).

Interestingly, the Minister of Justice alluded to the issue in its letter inviting judge Ancel to establish the working group (reproduced in annex to the explanatory report). The Minister insisted that a French code would help promoting French law in European and international circles where, the Minister stated, more modern and accessible foreign legislations prevail. This likely explains why the explanatory report states that codification of French private international law will improve the attractiveness of French law.

Presentation of the Code

On 21 October 2022, the French Committee of Private International Law will organise a conference aimed at presenting the draft code.

In the coming weeks, the EAPIL Blog will publish presentations and commentaries of the most salient provisions of the draft code by French and European scholars. The Editors invite readers interested in contributing to this debate to contact them.

A web conference regarding the role of the internet and other technologies within the EU and the international legal order will take place on 13 May 2022, organised by the editorial team of Lex & Forum, a quarterly on Private International Law and International Civil and Commercial Litigation.

Symeon Symeonides (Willamette University) will chair the conference. He will also deliver a presentation in English on the infringement of personality rights via the internet.

The conference will be opened by Dan Svantesson (Bond University) with a presentation on Private International Law and the Internet.

The remaining presentations, in Greek, will be delivered by Ioannis Delicostopoulos (University of Athens), on Personality infringements via internet publications within
the EU legal order, Ioannis Revolidis (University of Malta), on International Jurisdiction and the Blockchain – Time for new rules on international jurisdiction?, Nikolaos Zaprianos (Solicitor) on Smart contracts: Selected issues of civil and private international law, and Konstantinos Voulgarakis (Solicitor), on ICOs: Selected issues of jurisdiction and law applicable.

For registration, click here.

As announced on this blog, the Journal of Private International Law-Singapore Management University Virtual Conference on Conflicts of Jurisdiction will be held online on 23 to 24 June 2022 (6.00 pm to 10.20 pm Singapore time, 11.00 am to 3.20 pm British Summer Time on each day). The event is supported by the Hague Conference on Private International Law (HCCH).

The conference is intended to support the ongoing work of the HCCH on Jurisdiction.

The speakers are leading private international law scholars and experts, many of whom are directly involved in the ongoing negotiations at the HCCH.

Attendance at the conference is complimentary for academics, government and international organisation officials, Journal of Private International Law Advisory Board members and students. Registration is required.

More information on the conference and the link to register can be found here.

Strategic lawsuits against public participation, commonly known as ‘SLAPPs’, are a particular form of harassment used primarily against journalists and human rights defenders to prevent or penalise speaking up on issues of public interest.

The term was coined by Professors George W. Pring and Penelope Canan in their book SLAPPs: Getting Sued for Speaking Out (Temple University Press, 1996).

The phenomenon is now well known everywhere, but anti-SLAPP legislation has so far only been enacted in a few countries, such as Australia or Canada. In the Europe Union, action was not officially taken until the assassination of Maltese journalist Daphne Caruana Galizia in 2017, who was famous in and outside Malta due to her regular reporting of misconduct by Maltese politicians and politically exposed persons. When she was murdered, more than 40 lawsuits (most for pretended libel) had been filed in Maltese courts; some of them are still pending against her heirs and her family.

The Council of Europe has acknowledged as well the need for a Recommendation on Combating SLAPPs, and is currently working on it (the picture on the right belongs actually to the website of Dunja Mijatović, the Commissioner for Human Rights).

Since February 2018, European MEPs have been calling on the EU Commission to promote anti-SLAPP EU legislation giving investigative journalists and media groups the power to request a rapid dismiss of vexatious lawsuits.

Several EP Resolutions are worth being mentioned in this regard: Resolution of 28 March 2019 on the situation of the rule of law and the fight against corruption in the EU, specifically in Malta and Slovakia (P8_TA(2019)0328); Resolution of 25 November 2020 on strengthening media freedom: the protection of journalists in Europe, hate speech, disinformation and the role of platforms (P9_TA(2020)0320); Resolution of 11 November 2021 on Strengthening democracy and media freedom and pluralism in the EU: the undue use of actions under civil and criminal law to silence journalists, NonGovernmental Organisations (NGOs) and civil society (P9_TA(2021)0451). In all three, the EP condemned the use of SLAPPs to silence or intimidate investigative journalists and other actors, and called on the Commission to present a proposal to prevent them.

Parliament’s move did not fall on deaf ears. The growing number of physical, legal and online threats to and attacks on journalists and other media professionals over the past years was reflected in the Commissions’ 2020 and 2021 Rule of Law Reports.

In September 2021, the Commission presented a Recommendation on ensuring the protection, safety and empowerment of journalists and other media professionals in the European Union.

More important from the regulatory perspective (not in terms of scope, however) is the adoption, on 27 April 2022, of a proposal on a Directive covering SLAPPs in civil matters with cross-border implications. In addition, on the same day the Commission approved a complementary Recommendation to encourage Member States to align their rules with the Directive also for domestic cases and in all proceedings, that is, not only civil matters; it also calls on Member States to take a range of other measures, such as training and awareness raising, to fight against SLAPPs. Both texts, which show a broad political ambition, can be accessed here.

The proposed Directive will have to be negotiated and adopted by the European Parliament and the Council before it can become EU law.

By contrast, the Commission Recommendation is described in the official press release as ‘directly applicable’: in the understanding of the Commission, ‘Member States will need to report on implementation to the Commission 18 months after adoption of the Recommendation’. It should be noted that recommendations are not binding acts (a different thing is that the subject of a recommendation is expected to oblige the suggestions made). Moreover, regarding this particular Recommendation the guideline in the sense of aligning national law with the Directive in domestic cases and for all types of proceedings is impossible to comply with until the Directive as such is enacted.

In this post I only intend to present the general features of the proposal and to highlight three of its rules. A couple of comments will be added as quick reactions to which more learned readers may in turn respond.

General Features of the Proposed Directive

The proposal is based on Article 81(2)(f) TFEU.

1. The Union shall develop judicial cooperation in civil matters having cross-border implications, based on the principle of mutual recognition of judgments and of decisions in extrajudicial cases. Such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States.
2. For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring …

(f) the elimination of obstacles to the proper functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States.

Resistance on the side of the Council to this legal base will not come as a surprise (by the way: it may be claimed as well that the Commission is acting outside of clear competences regarding the Recommendation: the principle of conferred competences also applies to non-binding activities of the Union).

To the best of my knowledge, the point was not addressed in any of the meetings of the Expert Group against SLAPP. The only reference to Article 81 TFUE seems to be by way of an answer from the Commission to an expert who asked ‘whether the solutions envisaged will introduce procedural schemes that are new and difficult to enact in different Member States’ in the 6th (and final meeting) of the Expert Group. The Commission replied that ‘the legal basis is linked to article 81 of TFEU which deals with civil matters having cross-border implications but as the Directive is not too prescriptive, Member States will be able to implement the provisions in a way which is consistent with their national systems’.

The proposed Directive aims at enabling judges to swiftly dismiss manifestly unfounded lawsuits against natural and legal persons (not only journalists and human rights defenders, but also academics or researchers) on account of their engagement in public participation. It also requests from the Member States that they establish several procedural safeguards and remedies, such as compensation for damages, and dissuasive penalties for launching abusive lawsuits.

The text consists of 39 recitals and 23 articles divided into six chapters. Recitals 1 to 19 provide in-depth explanations of the SLAPP phenomenon and of related notions in plain and accessible language. Recitals 20 to 34 (actually, recitals 14 and 15 too) define the cross-border setting for the purpose of the Directive, and describe the specific procedural tools and remedies at the service of defendants in SLAPP cases. Recitals 35 and 36 deal with the relationship between the proposed Directive and other EU law acts (none on private international law). Numbers 37, 38 and 39 refer to Denmark and Ireland.

Chapter I (article 1 to 4) is labelled ‘General provisions’. Chapter II (articles 5 to 8) comprises so-called common rules on procedural safeguards. Chapter III (articles 9 to 13) addresses the early dismissal of manifestly unfounded court proceedings. Chapter IV (articles 14 to 16) focuses on remedies against abusive court proceedings. Chapter V (articles 17 and 18) include two rules on protection against third-country judgments. Chapter VI is devoted to the typical final provisions.

Most of the rules of the proposed Directive are purely procedural. In this regard, the proposal appears at first sight as a direct intrusion into the procedural autonomy of the Member States. In fact, if the outcome of the negotiations is similar to the draft, Member States will enjoy most of the times a large marge of manoeuvre when transposing the Directive; actually, it is to be expected that they will be able to claim that existing rules in the domestic systems comply already with (some of) its mandates. Indeed, such rules are normally conceived for domestic litigation; however, courts in the Member States do not usually follow different procedural tracks depending on whether the dispute is purely domestic or has cross-border implications. National procedural provisions created with cross-border litigation in mind are the exception. Interestingly, should new rules be created to accommodate the Directive’s terms, they may get extended to domestic procedures as a consequence of the accompanying Recommendation.

Articles 17 and 18 – Protection Against Proceedings Outside the Union

Article 17, ‘Grounds for refusal of recognition and enforcement of a third-country judgment’, and Article 18, ‘Jurisdiction for actions against third-country judgments’, may deserve a different assessment, i.e., Member States are likely to need enacting new rules to transpose these provisions. Pursuant to Article 17

Member States shall ensure that the recognition and enforcement of a third-country judgment in court proceedings on account of public participation by natural or legal person domiciled in a Member State is refused as manifestly contrary to public policy (ordre public) if those proceedings would have been considered manifestly unfounded or abusive if they had been brought before the courts or tribunals of the Member State where recognition or enforcement is sought and those courts or tribunals would have applied their own law.

The Directive imposes not only the public policy exception as a ground for non-recognition or enforcement of a third State decision independently of whether the Member State affected is a party to a bilateral or multilateral convention: it establishes as well the conditions for its application. Although with an open-ended clause, the Directive also defines what ‘abusive’ litigation is under Article 3(3), thus limiting the freedom of the Member States to give contents to the public policy exception.

According to Article 18,

Member States shall ensure that, where abusive court proceedings on account of engagement in public participation have been brought in a court or tribunal of a third country against a natural or legal person domiciled in a Member State, that person may seek, in the courts or tribunals of the place where he is domiciled, compensation of the damages and the costs incurred in connection with the proceedings before the court or tribunal of the third country, irrespective of the domicile of the claimant in the proceedings in the third country.

The ground for jurisdiction is a forum actoris based on domicile. Many Member States have given up fora privileging the claimant except in cases of asymmetry of the parties to the litigation, capable of creating procedural imbalances between them. It is submitted that on many SLAPP occasions this will be the case, therefore the head of jurisdiction, albeit exorbitant at first sight, will be justified. However, it should be considered that publishers houses and journals are sometimes involved in these disputes supporting or sharing the side of the journalist or human rights defender. Be it as it may, and more relevant: with the current wording, the forum actoris will work also against defendants domiciled in a Member State, if they have filed a claim with a third State. Article 19 – a compatibility clause regarding the Lugano Convention- does not change this outcome; actually, it creates a (further) situation where the Convention and the Brussels Ibis Regulation will apply differently.

Article 4 – An Enlarged Definition of Cross-border Implications

The Directive includes among other a definition of ‘matters with cross-border implications’, whereby a matter is considered to have such implications unless both parties are domiciled in the same Member State as the court seised. In that case – that is to say, when both parties are domiciled in the Member State of the court seised-, the situation is still cross-border for the purposes of the Directive and the transposing legislation if

(a) the act of public participation concerning a matter of public interest against which court proceedings are initiated is relevant to more than one Member State, or

(b) the claimant or associated entities have initiated concurrent or previous court proceedings against the same or associated defendants in another Member State.

The requirements under (a) will be easy to be met in the era of the internet. As for (b), it describes a situation of lis pendens or of related actions in the sense of the Brussels Ibis Regulation, although only for the purposes of applying the Directive, i.e., without (in principle) any consequence on the rules of Articles 29 to 34 of the Regulation. A ‘without prejudice’ recital would nevertheless be advisable.

Moreover, it is submitted that neither (a) nor (b) should be limited to the involvement of Member States, and that such limitation works against the very aim of the Directive. Moreover, for reasons of consistency relating to Article 18, it would make sense to define ‘cross-border implications’ as including acts of public participation relevant to the Member State of the court seized and third States, as well as the situation of parallel or related litigation in a Member State and a third State. Of course, such extension is likely to increase the doubts as regards the basis of the EU legislative initiative. As an alternative, it can be suggested to the Member States that they adopt national rules similar to the EU ones, to be applied to the situations described above.

— Final note: an open-access paper on strategic litigation (SLAPP and beyond) authored by Prof. B. Hess, MPI Luxembourg, member of the MSI-SLP Committee of Experts on Strategic Lawsuits against Public Participation (Council of Europe), will be published in the days to come. An update will follow.

On 13 May 2022 the Faculty of Law of the Universidad Autónoma de Madrid will host a conference on the protection of transnational data transfers and the limits of the General Data Protection Regulation (Protección de las transmisiones de datos transfronterizas: los límites del RGPD).

The speakers include: Elena Rodríguez Pineau (Universidad Autónoma de Madrid), Elisa Torralba Mendiola (Universidad Autónoma de Madrid), Diana Sancho (University of Westminster), Gloria González Fuster (Vrije Universiteit Brussel), Pedro A. de Miguel Asensio (Universidad Complutense de Madrid), José I. Paredes Pérez (Universidad Autónoma de Madrid), Alexia Pato (Universitat de Girona), Mayte Echezarreta Ferrer (Universidad de Málaga), Clara I. Cordero Álvarez (Universidad Complutense de Madrid), Alfonso Ortega Giménez (Universidad Miguel Hernández de Elche), Carmen Parra Rodríguez (Universidad Abat Oliba CEU), Luis Lima-Pinheiro (Universidade de Lisboa), Eduardo Álvarez-Armas (Brunel University London).

The conference, in Spanish, can be attended either in person or remotely. Registration ends on 10 May 2022. See here for further details, and here for the full program.

The Private International Law Festival will take place on 16 and 17 May 2022 in Edinburgh.

The topics that will dealt with include: private international law and sustainable development; decolonising law and private international law; private international law in Scotland; forum conveniens annual lecture; private international law and sustainable migration governance; interdisciplinary latam perspectives; a book launch; new horizon for private international law.

This event is free, in person only and open to all but registration is required. To secure your place, please register through Eventbrite here.

Further information is available here.

As reported in a recent post, Germany has on 29 April 2022 instituted proceedings against Italy before the International Court of Justice in relation with the fact that Italy is allowing civil claims to be brought against Germany in connection with violations of international humanitarian law committed by the German Reich between 1943 and 1945, in breach of Germany’s jurisdictional immunity as a sovereign State.

A webinar in English, organised by the Department of Law of the University of Ferrara and the Institute of International Studies of the Catholic University of Milan, will take place on 11 May 2022, between 10.30 am and 12.30 pm, via GoogleMeet, to discuss the issues surrounding both the German application and the Italian decree-law of 30 April 2022, whereby the Italian Government addressed at least part of the concerns underlying the initiative of Germany.

The discussion will also revolve around the views that the two States are expected to put forward during the public hearings that are scheduled to take place on 9 and 10 May regarding the request made by Germany for the indication of provisional measures.

The following, among others, will speak at the webinar: Giorgia Berrino (University of Modena and Reggio Emilia), Serena Forlati (University of Ferrara), Karin Oellers-Frahm (Max Planck Institute for Comparative Public Law  and International Law, Heidelberg), Riccardo Pavoni (University of Siena), and Pierfrancesco Rossi (LUISS Guido Carli, Rome).

Attendance is free. See here for further details.

As announced on this blog, the VIII Congress of Private International Law of the University Carlos III of Madrid will take place in dual mode on 12 and 13 May 2022.

It will be devoted to Regulation (EU) 2019/1111 on jurisdiction, recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction.

Under the direction of Juliana Rodríguez Rodrigo, the speakers include: Esperanza Castellanos Ruiz, Javier Carrascosa González, Beatriz Campuzano Díaz, Nuria Marchal Escalona, Giacomo Biagioni, Elena Rodríguez Pineau, Celia Caamiña Domínguez, Mónica Herranz, Ilaria Pretelli, Teresa Peramato Martín, Alfonso-Luis Calvo Caravaca.

The Congress programme and information to attend it are available here.

On behalf of the European Commission (DG JUST), Milieu Consulting is conducting a study on the application of Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I bis Regulation). The aim of the study is to provide solid evidence and analysis of legal and practical issues to assist the European Commission in preparing a report on the application of the Brussels I bis Regulation. To this end, the study will analyse the application of the Brussels I bis Regulation in the Member States and identify the main legal difficulties and practical challenges encountered in practice.

As part of this study, Milieu Consulting is conducting a stakeholder consultation, which includes a series of targeted surveys with key stakeholder individuals and organisations involved in or confronted with the application of the Brussels I bis Regulation. In particular, Milieu developed a technical survey that targets legal practitioners (i.e., judges; lawyers; notaries; bailiffs), academia (i.e., scholars in private international law and relevant sectors, such as consumer protection or business and human rights), and national authorities (i.e., ministries of justice, ministries in charge with consumer protection, ministries of economy) in each Member State. Stakeholders’ views are an important source of information for gaining a concrete understanding of the difficulties in applying rules on jurisdiction, as well as the recognition and enforcement of judgments, in cross-border civil and commercial cases in the EU.

The survey is available here. For more information on the study, please refer to the accreditation letter here.

On 29 April 2022, Germany instituted proceedings before the International Court of Justice against Italy for allegedly failing to respect its jurisdictional immunity as a sovereign State by allowing civil claims to be brought against Germany based on violations of international humanitarian law committed by the German Reich between 1943 and 1945.

The First Jurisdictional Immunities Case (2008-2012)

More than ten years have passed since the International Court of Justice rendered its judgment in the case of the Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening). The Court was asked then to determine whether, in civil proceedings against Germany relating to acts committed by the Third Reich during the Second World War (such as deportation and forced labour), the Italian courts were obliged to accord Germany immunity.

In its judgment of 3 February 2012, the Court held that the action of the Italian courts in denying Germany immunity constituted a breach of Italy’s international obligations.

The International Court of Justice explained that, under customary international law as it presently stood, a State was not deprived of immunity by reason of the fact that it was accused of serious violations of international human rights law or the international law of armed conflict.

The New Proceedings

The 2022 proceedings, as stated in the application filed by Germany, arise from the fact that Italian domestic courts, notwithstanding the 2012 judgment, “have entertained a significant number of new claims against Germany in violation of Germany’s sovereign immunity”.

Germany refers in particular to Judgment No. 238/2014 of 22 October 2014 of the Italian Constitutional Court, whereby the latter acknowledged the duty of Italy to comply with the 2012 ruling of the International Court of Justice but subjected that duty to the “fundamental principle of judicial protection of fundamental rights” under Italian constitutional law (the judgment has been the object of numerous comments: among those in English, see the contributions to this book edited by Valentina Volpe, Anne Peters and Stefano Battini, the remarks by Robert Kolb, Paolo Palchetti, Pasquale De Sena and others here, this paper by Marco Longobardo, and this one by Oreste Pollicino, to name a few).

In its application, Germany argues that Judgment No. 238/2014 of the Italian Constitutional Court, “adopted in conscious violation of international law and of Italy’s duty to comply with a judgment of the principal judicial organ of the United Nations, had wide-ranging consequences”. It adds that, since the delivery of the Judgment, “at least 25 new cases have been brought against Germany [before Italian courts]” and that “in at least 15 proceedings, Italian domestic courts … have entertained and decided upon claims against Germany in relation to conduct of the German Reich during World War II” (Giorgia Berrino discusses in this article a recent judgment of the Italian Court of Cassation which illustrates the approach decried by Germany).

Germany asks the International Court of Justice to adjudge and declare that Italy has violated, and continues to violate, its obligation to respect Germany’s sovereign immunity, and its obligation to respect Germany’s sovereign immunity by taking, or threatening to take, measures of constraint against German State-owned properties situated in Italy. Germany further asks the Court to declare that Italy is required to ensure that the existing decisions of its courts and those of other judicial authorities infringing Germany’s right to sovereign immunity cease to have effect, and immediately to take effective steps to ensure that Italian courts no longer entertain civil claims brought against Germany based on violations of international humanitarian law committed by the German Reich between 1943 and 1945.

Additionally, the Court is asked to adjudge that Italy is required to make full reparation for any injury caused through violations of Germany’s right to sovereign immunity, and to offer Germany concrete and effective assurances and guarantees that violations of Germany’s sovereign immunity will not be repeated.

The application of Germany contains a request for the indication of provisional measures. In fact, Germany asks the Court to order Italy to ensure that German properties indicated in the application “are not subjected to a public auction pending a judgment by the Court on the merits” and that “no further measures of constraint are taken by [Italian] courts against German property”.

The Italian Decree-Law of 30 April 2022

On 30 April 2022, i.e., the day after Germany instituted the proceedings before the International Court of Justice, a decree-law was published in the Italian Official Journal which appears to address, at least to some extent, the concerns raised by Germany.

Article 43 of Decree-Law No 36/2022 of 30 April 2022 creates a fund, financed by Italy, for the reparation of the prejudice suffered by the victims of war crimes and crimes against humanity, as a result of the violation of fundamental rights of persons by the the Third Reich’s Army (hereinafter, the Fund).

As stated in Article 43(1) of the decree-law, the purpose of the Fund is to provide reparation for the prejudice suffered for acts perpetrated on the Italian territory or otherwise harming Italian citizens between 1 September 1939 and 8 May 1945.

Article 43(2) stipulates that the Fund is available to those who obtained a final judgment whereby their right to damages has been ascertained and assessed. Such a final judgment must have been given in the framework of proceedings instituted either before the entry into force of the decree-law (i.e., 30 April 2022) or before the 30-day time-limit, starting from the entry into force of the decree, established under Article 43(6). Later requests will be rejected.

According to Article 43(3), “no new enforcement proceedings based on titles awarding damages shall be brought or pursued”. Pending enforcement proceedings, for their part, “shall be discontinued”.

The Italian Minister of Economy and Finance, as indicated in Article 43(4) shall adopt a decree, no later than 180 days following the entry into force of the decree-law, to determine: (a) the procedure for accessing the Fund; (b) the terms and the manner whereby payments will be made to those entitled to benefit from the Fund; (c) such additional provisions as may be necessary for the implementation of the above provisions.

Pursuant to Article 43(5), “any and all rights in connection with claims for damages based on the facts referred to in Article 43(1) shall cease to exist as soon as payment pursuant to the procedures under Article 43(4) is made”.

In short, the decree-law aims to shield Germany from the institution or the continuation of new and pending proceedings (including enforcement proceedings) in connection with acts perpetrated by the German Reich’s forces during the German occupation of Italy. Those entitled to claim damages for the prejudice suffered will be provided satisfaction through the Fund, following a dedicated procedure.

Apparently, this course of action is understood by the Italian Government to be consistent, at once, with the constitutional requirement that the victims of egregious violation of human rights be given access to justice and obtain reparation, and the expectation of Germany that its jurisdictional immunity, as provided for under international customary law, is preserved.

The Impact of the Decree-Law on the Proceedings Instituted by Germany

The implications of the Italian decree-law for the proceedings brought by Germany before the International Court of Justice remain to be seen.

As observed above, Germany asks the Court to adjudge, inter alia, that Italy should make “full reparation for any injury caused through violations of Germany’s right to sovereign immunity”. This is something the decree-law is not concerned with.

Germany also insists that Italy should “offer Germany concrete and effective assurances and guarantees that violations of Germany’s sovereign immunity will not be repeated”. Whether the adoption of a decree-law amounts, as such, to an appropriate insurance can arguably be challenged. Pursuant to Article 77 of the Italian Constitution, decree-laws are temporary measures that the Government may adopt “in case of necessity and urgency”. As soon as a decree-law is adopted, the measure is submitted to the Parliament for transposition into law, with the indication that it shall lose effect from the beginning if it is not transposed into law by Parliament within sixty days of its publication.

The Court of Justice of the EU has recently handed down another judgement interpreting the Succession Regulation. The judgement in VA, ZA v TP (C-645/20) of 7 April 2022 followed the view presented earlier in the opinion of AG Sánchez-Bordona. It concerns duties of the courts of Member States in verification of their jurisdiction resulting from Article 10(1)(a) Succession Regulation.

Background

The background of the case is as follows.

A French national XA died in France leaving wife TP and children from the first marriage. XA used to live in the UK, however shortly before his death has moved to France to be taken care of by one of his children. XA was on owner of a real property located in France. XA’s children have initiated a succession proceeding (namely, applied for an administrator to be appointed) in France indicating that XA was habitually resident there at the time of his death. Such view was shared by the court of the first instance, however the court of the second instance found that XA has not changed his habitual residence and at the time of death it was still located in the UK, and therefore, France lacked jurisdiction in the case.

Preliminary Question

As the case reached the Cour de Cassation, it decided to clarify with the CJEU whether the Succession Regulation requires a court of a Member State to raise of its own motion its jurisdiction under the rule of subsidiary jurisdiction provided for in its Article 10(1)(a) where, having been seised on the basis of the rule of general jurisdiction established in its Article 4, it finds that it has no jurisdiction as the deceased was not habitually resident at the time of death in the forum.

Jurisditional Rules of the Succession Regulation

It might be reminded that jurisdictional rules of the Succession Regulation are of exclusive character, meaning that there is no space left for the residual jurisdiction resulting from domestic laws of Member States (as opposed to, for example, rule provided for in Article 6(1) Brussels I bis Regulation). Recital 30 makes it clear that ‘in relation to the succession of persons not habitually resident in a Member State at the time of death, this Regulation should list exhaustively, in a hierarchical order, the grounds on which such subsidiary jurisdiction may be exercised’. Hence, if the case is covered by the material and temporal scope of the Succession Regulation, a court of a Member State may assume jurisdiction only in accordance with it, irrespective of the nationality or habitual residence of the deceased.

In accordance with Article 4 Succession Regulation courts of the Member State of the deceased’s habitual residence have jurisdiction. If the deceased was habitually resident outside of the EU, then pursuant to Article 10 jurisdiction is based in other factors. The jurisdiction is based on nationality or previous habitual residence and location of assets (Article 10(1)(a) or (b)) or location of assets only (Article 10(2) Succession Regulation). In this last case, where the only link with the forum is the location of assets, the jurisdiction covers not ‘succession as a whole’, meaning all assets irrespective of their location, but is limited to the assets located within the forum only.

It might also be added that the Succession Regulation provides for certain mechanisms (in Articles 5-9) allowing for the transfer of jurisdiction from the Member State having jurisdiction pursuant to Article 4 or Article 10 to the Member State, whose law was chosen by the deceased as applicable.

Reasoning of the Court of Justice

As nicely underlined by the AG when juxtaposing Article 4 and Article 10

each caters for a different factual situation: either the deceased was last habitually resident in a Member State of the European Union (the assumption informing Article 4) or he or she wasn’t (the assumption informing Article 10)’ [para. 47 opinion].

Sharing this view, the Court of Justice, explained that:

there is no hierarchical relationship between the forum established in Article 4 of Regulation No 650/2012 and the forum established in Article 10 thereof (…) Likewise, the fact that the jurisdiction provided for in Article 10 of that regulation is described as ‘subsidiary’ does not mean that that provision is less binding than Article 4 of that regulation, relating to general jurisdiction [para. 33].

As a result, it concluded that a court of a Member State must raise of its own motion its jurisdiction under the rule of subsidiary jurisdiction where, having been seised on the basis of the rule of general jurisdiction, it finds that it has no jurisdiction under that latter provision.

Other comments of the Court of Justice also merit attention. For example, it admits that the application of Article 10 might lead to the frustration of the so desired ius and forum, but it must be made clear that the Succession Regulation neither requires nor guarantees this coincidence.

It also made clear that Member States which do not apply the Succession Regulation, namely Ireland, Denmark and the UK (before Brexit) should be treated as third states when applying this regulation.

Conclusion

The Court of Justice rightly concluded that jurisdictional rules of both Article 4 and Article 10 of the Succession Regulation should be applied ex officio. To that end, AG has proposed what seems to be a very reasonable solution not only when it comes to the application of the Succession Regulation, but any jurisdictional or conflict of law rule, namely that the court is not obliged

to look actively for a factual basis on which to rule on its jurisdiction in a particular dispute, but they do compel it to find, by reference exclusively to the uncontested facts, a basis for its jurisdiction which may be different from that invoked by the applicant [para. 87 opinion].

The author of this post is Jachin Van Doninck, Lecturer in civil procedure, private international law and ADR at the Vrije Universiteit Brussel.

At the final conference of the Judgtrust project in The Hague, some ten days ago, two decisions of the ECJ on the Brussels I bis Regulation took flak from more than one speaker: Wikingerhof and Toto.

Both of these decisions have already received their fair share of attention in these columns: here (by the late Peter Mankowski, including links to the other contributions dedicated to the same judgment) and here.

The writing of a recently published casenote on the Wikingerhof judgment has nonetheless left me wondering whether the criticism directed at said judgment isn’t missing the mark.

As a reminder, through Wikingerhof, the ECJ attempted to clarify its earlier Brogsitter ruling on delineating matters relating to contract and matters relating to tort for the purpose of applying the heads of jurisdiction under art. 7 point 1 and 7 point 2 of the Brussels I bis Regulation respectively.

Where Brogsitter could be interpreted as considering it sufficient for a claim made in tort under national law to be contractual for the purpose of Brussels I where the conduct complained of may be considered a breach of the terms of the contract (ECJ, para 29, my emphasis), the ECJ held in Wikingerhof that where it does not appear indispensable to examine the content of the contract in order to assess whether the conduct is lawful or unlawful, the cause of the action is a matter relating to tort within the meaning of art. 7.2 Brussels I Recast (ECJ, at para 33, again with my emphasis).

In retrospect it always seemed unlikely that the ECJ would have accepted a full and complete absorption of the forum delicti by the forum contractus in cases of concurrent causes of action, i.e. when a contracting party invokes the infringement of a general legal obligation under competition law as was the case in Wikingerhof. Through Wikingerhof, the ECJ restores the balance between forum contractus and forum delicti in the case of concurrent obligations by setting out a clear criterion, namely whether the contract is the yardstick for review (forum contractus) or merely the subject of review (forum delicti). No surprise either in seeing the potential fora being multiplied then: that has been the steady flow of the ECJ case law on art. 7.2 since the Bier-stance was adopted more than 40 years ago (E. Farnoux, ‘Delendum est Forum Delicti? Towards the jurisdictional protection of the alleged victim in cross-border torts’ in B. Hess, K. Lenaerts en V. Richard (red.), The 50th anniversary of the European law of civil procedure, Baden-Baden: Nomos 2020, (259) p. 263 et seq.).

But most interesting, and least appreciated in my opinion, is the Court’s method in reaching that result. It shouldn’t have come as a surprise though. Less than a year before, in its VKI v. TVP judgment, the ECJ had been asked whether article 1(2)(f) of the Rome I Regulation should be interpreted as excluding from the scope of that regulation contractual obligations based on a trust agreement for the purposes of administering shares in a limited partnership. Was this a corporate matter beyond the reach of Rome I?

In addressing the issue, the ECJ, following its advocate-general Saugmandsgaard Øe, focused on the cause of action of the proceedings:

The action for an injunction brought by the VKI concerns the unfairness and therefore the validity of certain terms of the trust agreements at issue. Therefore, the questions arising from the case in the main proceedings fall within the field of lex contractus and therefore of the Rome I Regulation (ECJ, at para 37).

When asked whether Brussels I Recast provides a forum delicti when the plaintiff seeks an injunction against the use of contractual terms because they are allegedly based on an abuse of a dominant position by the defendant, the ECJ and its advocate-general Saugmandsgaard Øe adopted that same reasoning.

The test again lies in the cause of action:

In particular, as the Advocate General observed in point 90 of his Opinion, the court hearing the action must decide whether a claim between contracting parties is connected to matters relating to a contract, within the meaning of point 1 of Article 7 of Regulation No 1215/2012, or to matters relating to tort or delict, within the meaning of point 2 of Article 7 of that regulation, by reference to the obligation, whether contractual or a matter relating to tort, delict or quasi-delict, which constitutes the cause of action (ECJ, at para 31).

Asked to interpret sources of European private international law, the ECJ’s answer has time and again revolved around the word ‘autonomous’. Through Wikingerhof, the ECJ has now demonstrated that such autonomous interpretation of EU instruments is no mere recipe for haphazard case by case reasoning but also involves an exercise in qualification, thereby addressing the following question: which law imposes itself through the subject matter of the claim and the legally relevant facts underlying it, i.e. the case of action? That approach warrants more credit than is currently being granted.

On 19 April 2022, the European Commission has launched a new page on the e-Justice Portal concerning children from Ukraine (available here in all EU languages).

It is an operational extension, in a dramatic context, of the work undertaken by the Commission to strengthen the protection of migrant children.

Background

According to the European Commission:

Russia’s military aggression against Ukraine raises questions about the situation of refugee children who are displaced in the European Union from Ukraine. The issue becomes even more complex when these children are separated from their families, either because they have remained in Ukraine or because they are refugees in another Member State.

It is now urgent to be able to ensure that these children are protected against the risk of violence, exploitation, illegal adoption, abduction, sale or child trafficking. For this reason, it is essential to use the instruments that protect the rights of these children.

There are instruments in European and international law to ensure the protection of children, with special provisions for the protection of and assistance to children temporarily or permanently deprived of their family environment, including in emergency situations, such as an armed conflict.

EU and International Rules on Civil Judicial Cooperation 

The new webpage contains clear and practical information on the rules applicable to judicial cooperation in cross-border cases involving Ukrainian children, including issues of jurisdiction, applicable law, recognition of decisions, and cooperation between authorities, in particular via the European Judicial Network in civil and commercial matters (EJN-civil).

It provides for many useful links to key legal instruments and information on Ukrainian law provided directly by the Ukrainian Ministry of Justice.

This page is intended for judges, lawyers, notaries, central authorities, but also for social workers in charge of child protection and staff in charge of registering minors arriving from Ukraine.

More information here.

May 2022 starts with the hearing in C-354/21 Registrų centras, on Regulation n° 650/2012, next Wednesday. In the case at hand, R.J.R., the appellant, holds Lithuanian and German nationality and is resident in Germany. Her mother died on 6 December 2015; at the time of her death, she had her place of habitual residence in Germany; her estate consisted on property owned in Germany and in Lithuania. The appellant, the sole heir of his mother, accepted her entire estate in Germany without reservation in accordance with the procedure and time limits laid down in German law.

R.J.R. filed an application for a European Certificate of Succession in accordance with Regulation (EU) No 650/2012 with the competent German court; it was issued on 24 September 2018. On 15 March 2019, the appellant submitted to the VĮ Registrų centras (State Enterprise Centre of Registers) an application for registration of his ownership rights to the immovable property registered in the name of his mother. Together with the application, the appellant submitted the Certificate of Succession and European Certificate of Succession issued on 24 September 2018, copies of translations of those documents, and copies of passports of the Republic of Lithuania issued to J.M. R., G. R. and R.J. R. On 20 March 2019, the appellant’s request was refused, on the grounds that European Certificate of Succession No 1 VI 175/18 did not contain the data provided for in the Law of the Republic of Lithuania on the Real Property Register which were necessary to identify the immovable property, that is to say, that that certificate did not indicate the property inherited by the appellant.

The decision was appealed but upheld. A further appeal was dismissed as unfounded. The case is now before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), who has referred to following question to the Court of Justice of the European Union for a preliminary ruling:

Must point (l) of Article 1(2) and Article 69(5) of Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession be interpreted as not precluding legal rules of the Member State in which the immovable property is situated under which the rights of ownership can be recorded in the Real Property Register on the basis of a European Certificate of Succession only in the case where all of the details necessary for registration are set out in that European Certificate of Succession?

The opinions on C-646/20 Senatsverwaltung für Inneres und Sport, and C-700/20 London Steam-Ship Owners’ Mutual Insurance Association, both from AG Collins, will be published on Thursday. Not surprisingly, both cases will be addressed by the Grand Chamber.

C-646/20 is a request from the German Bundesgerichtshof on Brussels II bis:

1. Is the dissolution of a marriage on the basis of Article 12 of Decreto Legge (Italian Decree-Law) No 132 of 12 September 2014 (‘DL No 132/2014’) a divorce within the meaning of the Brussels IIa Regulation?
2. If Question 1 is answered in the negative: Is the dissolution of a marriage on the basis of Article 12 of DL No 132/2014 to be treated in accordance with the rule in Article 46 of the Brussels IIa Regulation on authentic instruments and agreements?

For the record, according to the referring court, the legal situation is as follows in Italy: under Decreto Legge (Italian Decree-Law) No 132 of 12 September 2014 (‘DL No 132/2014’), converted into Law No 162 of 10 November 2014, spouses no longer need to petition the court for divorce and may opt for divorce by way of a simple agreement. Subject to specific requirements detailed in the law, spouses may either agree to divorce in the presence of their lawyers (Article 6 of DL No 132/2014) or, as in the case at hand, they may enter into a divorce agreement under Article 12 of DL No 132/2014, before the mayor with territorial jurisdiction, acting as supreme civil registrar, even without the assistance of a lawyer, provided they have no underage children or adult children who have no legal capacity or are seriously disabled or economically dependent. The civil registrar takes receipt of the spouses’ personal statements, which cannot include any asset transfers, and asks them to return before him or her no earlier than 30 days after receipt of the statements to confirm the agreement. In the period between submission of the statements and confirmation of the agreement, the civil registrar is able to verify the veracity of the spouses’ statements (e.g. that they do not have any dependent children) and the spouses have the opportunity to reflect on their decision and, if they wish, to change it. If they confirm the agreement, it applies in lieu of a judicial decision.

C-700/20 comes from the High Court of Justice Business and Property Courts of England and Wales, United Kingdom ; it was filed just a couple of days before the end of the transitional period. The question referred concerns the interpretation of the Brussels I Regulation. The main proceedings are based on a dispute between London Steam-Ship Owners’ Mutual Insurance Association Limited (‘the Insurer’), having its registered office in the United Kingdom, and the Kingdom of Spain concerning claims for damages arising from the sinking off the coast of Spain of a vessel carrying fuel oil – the Prestige. The insurance contract contained, inter alia, an arbitration agreement governed by English law.

The Kingdom of Spain asserted its rights to receive compensation from the Insurer under the insurance contract, in the context of criminal proceedings instituted in Spain in 2002. Following a first-instance decision in 2013 and several appeals, the Spanish proceedings culminated in a finding that the Insurer was liable for the loss caused by the shipping accident subject to the limitation of liability provided for in the insurance contract. The Spanish court issued an execution order on 1 March 2019. On 25 March 2019, the Kingdom of Spain applied for recognition and enforcement of that order in the United Kingdom in accordance with Article 33 of the Brussels I Regulation. That application was granted. The Insurer appealed against that decision in accordance with Article 43 of the Brussels I Regulation.

The Insurer, for its part, initiated arbitration proceedings in London in 2012. In the resulting award it was established that the Kingdom of Spain would have to initiate arbitration proceedings in London in order to assert claims under the insurance contract. The Commercial Court of the High Court of Justice of England and Wales, before which enforcement of the award was sought under section 66 of the Arbitration Act 1996, entered a judgment in the terms of the award against the Kingdom of Spain in October 2013, which was confirmed on appeal. The Kingdom of Spain took part neither in the arbitration proceedings nor in the judicial proceedings in the United Kingdom.

The referring court asks the following questions:

(1) Given the nature of the issues which the national court is required to determine in deciding whether to enter judgment in the terms of an award under Section 66 of the Arbitration Act 1996, is a judgment granted pursuant to that provision capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of EC Regulation No 44/2001?

(2) Given that a judgment entered in the terms of an award, such as a judgment under Section 66 of the Arbitration Act 1996, is a judgment falling outside the material scope of Regulation No 44/2001 by reason of the Article 1(2)(d) arbitration exception, is such a judgment capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of the Regulation?

(3) On the hypothesis that Article 34(3) of Regulation No 44/2001 does not apply, if recognition and enforcement of a judgment of another Member State would be contrary to domestic public policy on the grounds that it would violate the principle of res judicata by reason of a prior domestic arbitration award or a prior judgment entered in the terms of the award granted by the court of the Member State in which recognition is sought, is it permissible to rely on Article 34(1) of Regulation No 44/2001 as a ground of refusing recognition and enforcement or do Articles 34(3) and (4) of the Regulation provide the exhaustive grounds by which res judicata and/or irreconcilability can prevent recognition and enforcement of a Regulation judgment?

Finally, the judment on C-644/20, W.J. (Changement de résidence habituelle du créancier d’aliments), referred by the Sąd Okręgowy w Poznaniu (Regional Court in Poznań, Poland), is expected on Thursday 12th. The question for interpretation is the following :

‘Must Article 3(1) and (2) of the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, approved on behalf of the European Community by Council Decision 2009/941/EC of 30 November 2009 (OJ 2009 L 331, p. 17), be interpreted as meaning that a creditor who is a child may acquire a new habitual residence in the State in which he or she was wrongfully retained if a court orders the return of the creditor to the State in which he or she habitually resided immediately prior to the wrongful retention?’

No opinion was deemed necessary.

In 1971, the American Law Institute published the epochal Restatement of Conflict of Laws (Second). Now, a new version is in the making.

An overview of the work will be given by Kermit Roosevelt III (University of Pennsylvania) on 10 May 2022, at 5 PM CET, in the context of the Max Planck Institute (MPI) Hamburg series on “Current Research in Private International Law”.

This promises to be very interesting as the speaker is deeply involved in the drafting process.

The registration link can be found here. Participation is free of charge.

Within the activities of the Jean Monnet Module “CoRiMaR” (Consumer’s Rights and Market Regulation in the European Union), the Department of Legal Sciences of the University of Udine (Italy), together with a consortium of European universities including the University of Essex, De Montfort University, Universitatea de Vest din Timisoara, East Anglia University, University of Belgrade and University of Rijeka, organises the 15th edition of the Summer school Consumer’s Rights and Market Regulation in the European Union, to be held 13-22 July 2022 in Udine (Italy), at the Campus of Legal and Economic Sciences.

The Summer school on Consumer’s Rights and Market Regulation is an intensive course (40 hours of lectures, a workshop and a moot court), held in English by internationally renowned academics. It addresses theoretical and practical issues related to the legal protection of consumers and the market regulation in the European Union.

The call for application and the brochure is available here and here.

The application deadline is 15 June 2022.

For further info, please write an email to ip.europeanlaw.uniud@gmail.com.

On 23 February 2022, the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence was released.

In recent years, many experts have expressed their views on the Union’s ambition to regulate corporate due diligence comprehensively and in a binding manner at the EU level. The private international law (PIL) aspects have received particular attention (e.g. here and more globally here), including on our blog (e.g. here, here and here) and others (here and here).

Indeed, a first central issue is the spatial applicability of the (forthcoming) EU instrument so that it effectively covers transnational (harmful) conduct of multinational companies, incorporated in the Union or active in the EU market (see Article 2, §1 and §2). Another major issue concerns remedies for the damage caused by companies through their supply chain, to victims and to the environment. The Directive proposal provides for rules on liability for violation of the due diligence requirements laid down by the text.

In this context, what are the main solutions of the Directive proposal on the PIL aspects? Here are some brief elements of the response that experts on the matter will analyse in more detail during the negotiations of the text (see already Geert Van Calster thoughts)

Private Enforcement Scheme

One of the main objectives of the Directive proposal is to “improve access to remedies for those affected by adverse human rights and environmental impacts of corporate behaviour” (p. 3). Remedies and more globally enforcement rules are indeed a key-factor for normative effectiveness. Private parties should be empowered to report concerning behaviours of multinational companies or misconducts (see Articles 9 and 19 of the Directive proposal). As a crucial step, victims should be able to sue the company liable for any damage caused within the Union’s territory or, most frequently, outside the Union through its value chain. The Directive proposal provides for a common civil liability regime (although incomplete). This is a great improvement, in particular for foreign victims who could seek remedies within the EU (Article 22).

Against this background, the private enforcement regime remains dependent on the jurisdiction of a “European forum” (i.e. among national courts of EU Member States) and, then, on the application of EU law.

No Specific Provision on Jurisdiction in the Union

The Directive proposal provides for a private enforcement scheme but without mentioning any specific rules on jurisdiction. Hence, Brussels I bis Regulation will remain the applicable legal framework within the EU judicial area.

EU-based Companies

The jurisdictional rules of the Regulation are, in principle, applicable once the defendant is domiciled in the Union, regardless of whether there is any other connection with the EU legal order (Article 4). When the defendant is a legal person, it lays down a flexible concept of domicile; it may be the statutory seat of the company, its central administration or its principal place of business (Article 63). In the present case, it means that the mother or ordering company located in the Union may be sued by any victims before a “European forum” for compensation of losses suffered in a third country. In that respect, the solution follows the rationale of the home country control.

However, the situation would be less effective if the victims also decide to sue, as co-defendant, other companies of the value chain of the European undertaking (e.g. subsidiaries or business partners), when the former are not established in the Union. In such a case, the Brussels I bis Regulation is not applicable pursuant to its Article 8,(1). It will be for the national laws of Member States to determine the jurisdiction of their courts. This is regrettable; the discrepancies between national rules may weaken the EU provisions on remedies. Some courts will be competent, others not, in equivalent disputes.

Nonetheless, the lack of legal approximation here is not inconsistent with the European enforcement regime, since the latter is limited for now – under Article 22 of the Directive proposal – to civil liability claims against the company in charge of the due diligence requirements pursuant to Article 7 and 8 of the text. Hence, national law remains applicable to the civil liability of “subsidiaries or of any direct and indirect business partners in the value chain” (Article 22, §3 of the directive proposal). The lack of a uniform substantive liability regime in the forthcoming EU instrument, directly applicable to these potential co-defendants, mitigates or, at least, may explain, the absence of a ground jurisdiction based on EU law in such circumstances.

Non-EU-based Companies

A much more problematic situation concerns foreign companies – i.e. domiciled outside the Union – that are economically active in the internal market and, in that respect, covered by an EU due diligence obligation. The jurisdictional rules of the Brussels I bis Regulation are in principle not applicable, even if the losses were suffered on the Union’s territory. Private enforcement will depend on the national laws of EU Member States on the jurisdiction issue. European remedies are therefore likely to remain totally ineffective before certain domestic courts of the Union where no specific ground for jurisdiction, such as a forum necessitatis, exists. Victims will be treated differently in the European judicial area; some of them will not be able to benefit from remedies. It also creates a severe discrepancy between European and foreign companies. The latter may avoid private enforcement as a result of this lacuna in the European legal system.

A solution may be found in the obligation of foreign companies to have a representative in the Union pursuant to Article 16 of the Directive proposal. It could be argued that the European domicile of this representative, set up for the public enforcement of the EU due diligence regime should also apply for private enforcement, based on the civil liability regime of Article 22 (see Article 16, §4 on public enforcement, mentioning the cooperation with supervisory authorities). In that regard, the preliminary explanation of the Directive proposal describes quite broadly the role of those mandated authorised representatives; they may be addressed by a competent authority of a Member State on all issues necessary inter alia for “[the] enforcement of legal acts issued in relation to this Directive” (page 25).

In a more effective way, a specific ground of jurisdiction could be introduced. It could be the forum of the Member States “in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year” (Article 16, §3). This is the criterion laid down by the Directive proposal for the designation of the authorised representative in the Union. Therefore, it could be easily transposed to international competence, linking public and private enforcement schemes, as already suggested above.

No Specific Choice of Law Rules (either)

The extraterritoriality of the forthcoming EU substantive rules on due diligence is not enough (legally speaking) to guarantee their application before “European fora” when damage was suffered in third countries. In that respect, the Directive proposal opts for the mandatory nature of the civil liability regime laid down in Article 22: it is “of overriding mandatory application in cases where the law applicable to claims to that effect is not the law of a Member State” (Article 22, 5).

From a PIL perspective, this formulation may be seen as ambiguous. First, the mandatory nature under EU law of all the text on corporate due diligence should be made explicit (even if it may be seen as obvious). Second, regarding the civil liability regime it is about its overriding mandatory dimension, whatever law is applicable, since this technique applies ex ante, before any conflict-of-laws reasoning. At the same time, it will still be necessary for the national courts (in EU Member States) to determine the law applicable to the case. Indeed, the Directive proposal does not lay down a complete and fully uniform regime of liability. More protective regimes under national law could prevail (recital 59) and some questions are referred to national law (for instance, the burden of proof of the absence of misconduct of the company, see recital 58).

Against this background, the Rome II Regulation will remain applicable for cross-border disputes concerning non-contractual obligations. The Regulation lays down a provision on overriding mandatory provisions (Article 16). It could therefore provide for the unilateral application of the national law of the competent court (its lex fori), which contains the EU due diligence duty and its attached civil liability regime (as already proposed by Giesela Rühl). However, it remains to be expressly clarified in the proposal whether the European provisions concerned – including (where appropriate) their implementation in the national laws of the Member States – have such an international mandatory nature.

In any case, PIL issues are crucial and condition the effectiveness (and therefore the success) of EU law (including EU values) beyond the Union’s borders in this area.

On 5 and 12 May 2022 the Swiss Institute of Comparative Law will host an on-line conference titled Family Status, Identities and Private International Law – A Critical Assessment in the Light of Fundamental Rights.

The event is organised in cooperation with the European Law Institute and the University of Pisa.

The speakers include: Elena Bargelli (University of Pisa), Jens Scherpe (University of Cambridge), Yuko Nishitani (Kyoto University Graduate School of Law), Cristina Gonzales Beilfuss (University of Barcelona), Ilaria Pretelli (Swiss Institute of Comparative Law), Andrea Büchler (University of Zurich), Joaquin Bayo Delgado (Former Senior Judge at the Appellate Court of Barcelona), Susanne Gössl (University of Kiel), Lukas Heckendorn Urscheler (Swiss Institute of Comparative Law), Máire Ní Shúilleabháin (University College Dublin), Maria Caterina Baruffi (University of Bergamo) Yin Liu (Huaqiao University), Alfonso Luis Calvo Caravaca (Carlos III University of Madrid), Francisco Javier Jiménez Muñoz (Universidad Nacional de Educación a Distancia) Guillaume Kessler (Université Savoie Mont Blanc), Antonio Legerén (University of A Coruña).

The full programme may be found here, together with further details.