EAPIL blog

This is the fourth post of an online symposium on the recent judgment of the CJEU in Vereniging van Effectenbezitters v. BP after the posts of Matthias Lehmann, Laura van Bochove and Matthias Haentjens and Geert van Calster.

The author of this post is Enrique Vallines, who is Professor of Procedural Law at the Complutense University of Madrid and a Senior Research Fellow at the Max Planck Institute Luxembourg.

Just a few days after Vereniging van Effectenbezitters v BP (C-709/19) was made public, I had the opportunity to express my views on the decision on an EU Law Live Op-Ed. After the three stimulating EAPIL blogposts referred above, Prof. Gilles Cuniberti has kindly invited me to expand a bit on my critique to the reasoning of the judgment, probably because I seem to be a bit of an outlier here. My sincere gratitude to him and to all the board of Editors of the EAPIL Blog.

On the Judgment Itself

Effectenbezitters is about establishing jurisdiction under Article 7(2) of the Brussels I bis Regulation on the basis of the determination of the place where the harm occurred (the so-called, in German, Erfolgsort) in a case of purely financial damage, i.e. any loss of money with no connection with a tangible object (VKI v Volkswagen, C‑343/19, paras 32-35).

In previous judgments, the CJEU had used the fiction that financial damage occurs where the (bank or investment) account reflecting the damage is held. However, the Court added that the said fiction is not enough to establish jurisdiction under Article 7(2); in addition, looking at Recitals 15 and 16, the Court requires that ‘other specific circumstances’ confirm that the case is sufficiently connected to the place in question (principle of proximity) and that the forum in question was foreseeable for the defendant (principle of predictability).

In my opinion, Effectenbezitters is no exception to this jurisprudence. Firstly, in para 32, the CJEU clearly suggests that the courts in the Netherlands might have jurisdiction under Article 7(2), ‘on the basis of the place where the damage occurred’, because jurisdiction may be allocated to the courts where the bank (or investment institution) holding that account is established. This is reflected in the operative part of the judgment, where the Court acknowledges that the case concerned the ‘direct occurrence in an investment account of purely financial loss resulting from investment decisions’.

Secondly, in paragraphs 33-35 of Effectenbezitters, the Court moves on to consider the other specific circumstances, beginning with those relating to the predictability of the forum. At this point – the assessment of the predictability of the forum -, I believe that – contrary to what Prof. Lehman, Prof. van Bochove and Prof. Haentjens seem to indicate in their EAPIL blogposts – the Court does not put the direct focus on the place where BP shares were listed or admitted to trading; nor did the Court even consider the place where the shares had been acquired or sold (an approach that, by the way, would have been similar to the approach in VKI v Volkswagen, where jurisdiction under Article 7(2) was attributed to the courts where the diesel vehicles had been purchased). Instead, the direct focus of the Court when assessing the predictability of the forum was the place where BP had reporting obligations, ie, the place where BP was subject to the obligation to disclose the information whose lack or inaccuracy was at the basis of the cause of action of the plaintiff. This conclusion is also confirmed by the operative part of the judgment, where only the ‘statutory reporting obligations’ are mentioned, without any reference to the place of listing, trading, acquisition or sale.

Against this background, to my mind, the reasoning of the Court may be summarized as follows: (i) since the claim is based on the lack or the inaccuracy of specific information that BP was obliged to provide in the UK and in Germany, BP could have reasonably foreseen lawsuits related to the said information in the UK or in Germany, but not in the Netherlands nor in any other EU forum; and (ii), for this reason, despite accepting the fiction that the purely financial damage inflicted to the Dutch investors occurred in the Netherlands, finally, the Dutch courts were not predictable for the defendant and, hence, they do not qualify as a competent court under Article 7(2) and Recitals 15 and 16.

On the Precedents Used

To support this reasoning, the CJEU turns to Kolassa (C-375/13, paras 54-57, to be interpreted as indicated in Universal, C-12/15, para 37, and the Opinion of AG Szpunar in this latter case, para 45) and Löber (C‑304/17, paras 26-36).

In both cases, similarly to the case of Effectenbezitters, an investor had also claimed compensation for purely financial damages based on the inaccuracy of financial information – the information contained in a prospectus required for securities to be admitted to trading in a specific State. In these two cases, the Court argued (i) that the place where the investors held their accounts might indeed qualify as the place where the harm occurred for the purposes of establishing jurisdiction under Article 7(2); and (ii) that the forum for that place was predictable because the information whose inaccuracy was at the basis of the cause of action had been specifically distributed at that place as a result of the legal obligation to submit a prospectus. Thus, in Kolassa and Löber, the Court took the fact that reporting obligations were due in a specific Member State as an indication of the predictability of the jurisdiction of the courts of that Member State. Shortly put, the equation of the Court was: reporting obligations = predictability.

In Effectenbezitters, the Court tried to apply the same logic, but the other way around. It certainly looked at the place of reporting obligations and, since it found none in the Netherlands, it concluded that the Dutch courts were not a predictable forum. Thus, it took the fact that BP had no reporting obligations in the Netherlands as an indication that the Netherlandish courts were not a predictable forum. In short, the equation of the Court was, now, the following: no reporting obligations = no predictability.

On my Critique

My main criticism of Effectenbezitters is that this second equation (no reporting obligations = no predictability) is not at all convincing in the current EU regulatory context. In my opinion, the logic applied in Kolassa and Löber does not work the other way around within the EU. I find it acceptable to conclude that the fact that there exist reporting obligations in a Member State may be taken as an indication that this Member State is a predictable forum for any litigation relating to such obligations. Yet, I challenge the argument whereby the lack of reporting obligations in a Member State necessarily entails that that Member State is not a predictable forum. The way I see things, a person may have to report information in a specific Member State and, nevertheless, it may still predict litigation related to that information in another Member State so long as the citizens and companies of the other Member State were also legal addressees of the information in question.

This is exactly what, in my view, happened in Effectenbezitters. BP was subject to reporting obligations in the UK and Germany only, but the legal addressees of the information were all the investors in all the EU Member States. Within the regulatory context under the Transparency Directive 2004/109 and the Market Abuse Directive 2003/6 (today, replaced by the Market Abuse Regulation 596/2014), BP had to make available periodical information (eg, annual financial reports), as well as any particular piece of information that was likely to have a significant effect on the prices of its shares. Even though the information had to be published via a ‘mechanism’ which had been ‘officially appointed’ by the British and the German authorities, the truth is that this mechanism had to ensure that the information was made available in a manner that guaranteed the ‘effective dissemination to the public throughout the Community’. See, in this regard, Article 21(1) Directive 2004/109, in relation to Article 2(1)(k) of the said Directive and Articles 1(1) and 6 of the Market Abuse Directive 2003/6 (today, Articles 7 and 17 of the Market Abuse Regulation 596/2014); also, in the same vein, the current wording of Article 22 of Directive 2004/109 emphasizes that the information must be accessible ‘at Union level’.

Thus, when BP provided – or failed to provide – information in the UK and in Germany under the EU rules on transparency and market abuse, the company knew that the information due had to reach all EU investors – ‘all the public throughout the Community’, as Article 21(1) of Directive 2004/109 puts it. Consequently, BP could have perfectly foreseen that any of the legal addressees of the information could have made investment decisions from their home Member States on the basis of that information. And this, in my view, entails that BP could have also perfectly predicted that information-related litigation could have taken place in any of the EU Member States from where those investment decisions were made.

To sum up, contrary to Court’s reasoning in Effectenbezitters, I find that, within the EU, it is inaccurate to say that an issuer of securities cannot predict the forum where it does not have reporting obligations in that forum. Such an issuer is aware – or, at least, must be aware –  of the fact that EU law requires that the reported information reaches all the citizens and companies across all Member States, irrespective of where and how the information is provided. As a result, the issuer must count on the possibility that the information is used in any Member State, as well as on the possibility of damages – and subsequent lawsuits – arising out of such a use in any Member State.

Looking Ahead

That said, I should add that I understand the concerns about the need to limit jurisdiction under Article 7(2) and to avoid an EU-wide jurisdiction to hear cases relating to purely financial damage at the place where the plaintiff holds her bank account. But I believe that a flawed argument – such as the one used in Effectenbezitters – should not be the means to achieve such a goal. Instead, other avenues could be explored, preferably by the EU law-maker, with a view to an amendment of Brussels I-bis that may provide more certainty on the rule of special jurisdiction applying to matters relating to tort, delict or quasi-delict.

July is a short month at the Court of Justice, but a busy one.

Already on 1 July 2021 the judgment on C-301/20, Succession de VJ, was published. The questions, on the European certificate  of succession and copies of it, had been referred by the Austrian Supreme Court:

(1) Is Article 70(3) of Regulation No 650/2012 to be interpreted as meaning that a copy of the certificate issued, in disregard of that provision, without indicating an expiry date, for an unlimited period,
–        is valid and effective indefinitely, or
–        is valid only for a period of six months from the date of issue of the certified copy, or
–        is valid only for a period of six months from another date, or
–        is invalid and unsuitable for use within the meaning of Article 63 of Regulation No 650/2012?

(2) Is Article 65(1) read in conjunction with Article 69(3) of that regulation to be interpreted as meaning that the certificate produces effects in favour of all persons who are mentioned on the certificate by name as heirs, legatees, executors of wills or administrators of the estate, with the result that even those who have not applied for the issue of the certificate themselves can use that certificate pursuant to Article 63 of regulation No 650/2012?

(3) Must Article 69 read in conjunction with Article 70(3) of that regulation be interpreted as meaning that the legitimising effect of the certified copy of a certificate of succession must be recognised if it was still valid when it was first submitted but expired before the requested decision of the authority, or does that provision not preclude national law if the latter requires the certificate to be valid even at the time of the decision?’

AG Campos Sánchez-Bordona’s opinion, focused on the third question, had been released on 29 April 2021. The Court (6th Chamber: L Bay Larsen, N. Jääskinen and C. Toader as reporting judge) has ruled as follows:

(1) Article 70(3) of Regulation (EU) No 650/2012 [on] matters of succession … must be interpreted as meaning that a certified copy of the European Certificate of Succession, bearing the words ‘unlimited duration’, is valid for a period of six months from the date of issue and produces its effects, within the meaning of Article 69 of that regulation, if it was valid when it was presented to the competent authority;

(2) Article 65(1) of Regulation No 650/2012, read in conjunction with Article 69(3) of that regulation, must be interpreted as meaning that the effects of the European Certificate of Succession are produced with respect to all persons who are named therein, even if they have not themselves requested that it be issued.

AG Richard de la Tour’s opinion on C-277/20, UM (contrat translatif de propriété mortis causa), a request from the same court (i.e., the Austrian Supreme Court), was published as well on 1 July 2021. The main  question concerns a donation mortis causa and whether it falls under the scope of the Regulation:

(1) Is Article 3(1)(b) of Regulation (EU) No 650/2012 [on] matters of succession … to be interpreted as meaning that a contract of donation mortis causa entered into between two German nationals habitually resident in Germany in respect of real estate located in Austria, granting the donee a right having the character of an obligation against the estate to registration of his title after the donor’s death pursuant to that contract and the donor’s death certificate, that is without the intervention of the probate court, is an agreement as to succession within the meaning of that provision?

(2) If the answer to the above question is in the affirmative: Is Article 83(2) of Regulation No 650/2012 to be interpreted as meaning that it also regulates the effect of a choice of applicable law made before 17 August 2015 for a contract of donation mortis causa that is to be qualified as an agreement as to succession within the meaning of Article 3(1)(b) of Regulation No 650/2012?

According to Richard de la Tour, it does (the translation is mine):

Article 3(1)(b) of Regulation (EU) No 650/2012 … must be interpreted as meaning that the concept of “pact of succession” includes deeds of inter vivos gift in by virtue of which the transfer, in favor of the donee, of the ownership of a good or of goods which even partially constitute the inheritance of the donor takes place only on his death.

Two opinions of direct PIL interest are scheduled for 8 July 2021, starting with AG Campos Sánchez-Bordonas’ in case C-289/20, IB. The question was referred from the Cour d’appel de Paris. It reads as follows:

Where, as in the present case, it is apparent from the factual circumstances that one of the spouses divides his time between two Member States, is it permissible to conclude, in accordance with and for the purposes of the application of Article 3 of Regulation (EC) No 2201/2003, that he or she is habitually resident in two Member States, such that, if the conditions listed in that article are met in two Member States, the courts of those two States have equal jurisdiction to rule on the divorce?

The decision will be taken by a chamber of five judges: S. Prechal, N. Wahl, F. Biltgen, J. Passer, and L.S. Rossi as reporting judge.

The same day AG M. Szpunar will present his opinion on C-422/20, RK, on the successions regulation. The requests comes from the Oberlandesgericht Köln (Germany) :

Is it necessary, for a declaration of lack of jurisdiction by the court previously seised, as provided for in Article 7(a) of Regulation No 650/2012, that that court should expressly decline jurisdiction, or may even a non-express declaration suffice if it supports the inference, through interpretation, that that court has declined jurisdiction?

Is the court of the Member State whose jurisdiction is intended to follow from a declaration of lack of jurisdiction by the court previously seised in the other Member State competent to examine whether the conditions governing a decision by the court previously seised, as provided for in Articles 6(a) and 7(a) of Regulation No 650/2012, were met? To what extent is the decision of the court previously seised binding? In particular: (a) Is the court of the Member State whose jurisdiction is intended to follow from a declaration of lack of jurisdiction by the court previously seised in the other Member State competent to examine whether the deceased validly chose the law of the Member State in accordance with Article 22 of Regulation No 650/2012? (b) Is the court of the Member State whose jurisdiction is intended to follow from a declaration of lack of jurisdiction by the court first seised in the other Member State competent to examine whether a request for a declaration of lack of jurisdiction, as provided for in Article 6(a) of Regulation No 650/2012, has been brought by one of the parties to the proceedings before the court previously seised? (c) Is the court of the Member State whose jurisdiction is intended to follow from a declaration of lack of jurisdiction by the court first seised in the other Member State competent to examine whether the court previously seised rightly assumed that the courts of the Member State of the chosen law are better placed to rule on the succession?

Are Articles 6(a) and 7(a) of Regulation No 650/2012, which presuppose a choice of law ‘pursuant to Article 22’, applicable even where the deceased has made no express or implied choice of law in a testamentary disposition made before 17 August 2015, but the law applicable to the succession is capable of being inferred only from Article 83(4) of Regulation No 650/2012?

Judges Bay Larsen, Toader and Jääskinen will be in charge, with C. Toader acting as reporting judge.

A hearing will take place the same day on C-421/20, Acacia, from the Oberlandesgericht Düsseldorf (Germany). The case has been allocated to judges E. Regan, K. Lenaerts, M. Ilešič, I. Jarukaitis and C. Lycourgos (reporting judge):

In proceedings for an infringement of Community designs, can the national court dealing with the infringement proceedings having international jurisdiction pursuant to Article 82(5) of the Community Designs Regulation apply the national law of the Member State in which the court dealing with the infringement proceedings is situated (lex fori) to subsequent claims in relation to the territory of its Member State?

If Question 1 is answered in the negative: Can the ‘initial place of infringement’ for the purposes of the CJEU judgments in Cases C-24/16, C-25/16, Nintendo, regarding the determination of the law applicable to subsequent claims under Article 8(2) of Regulation (EC) No 864/2007 … on the law applicable to non-contractual obligations (‘Rome II’) also lie in the Member State where the consumers to whom internet advertising is addressed are located and where goods infringing designs are put on the market within the meaning of Article 19 of the Community Designs Regulation, in so far as only the offering and the putting on the market in that Member State are challenged, even if the internet offers on which the offering and the putting on the market are based were launched in another Member State?

AG P. Pikamäe’s opinion on C-262/21 PPU, A, is expected on 14 July 2021. The case, from the Korkein oikeus (Finland), requires the interpretation of Regulation 2201/2003 in relation to the Dublin III Regulation. The 1980 Hague Convention is also at stake:

Must Article 2(11) of Regulation (EC) No 2201/2003 [on] matrimonial matters and the matters of parental responsibility … (‘the Brussels II bis Regulation’), relating to the wrongful removal of a child, be interpreted as meaning that a situation in which one of the parents, without the other parent’s consent, removes the child from his or her place of residence to another Member State, which is the Member State responsible under a transfer decision taken by an authority in application of Regulation (EU) No 604/2013 of the European Parliament and of the Council (‘the Dublin III Regulation’), must be classified as wrongful removal?

If the answer to the first question is in the negative, must Article 2(11) of the Brussels II bis Regulation, relating to wrongful retention, be interpreted as meaning that a situation in which a court of the child’s State of residence has annulled the decision taken by an authority to transfer examination of the file, but in which the child whose return is ordered no longer has a currently valid residence document in his or her State of residence, or the right to enter or to remain in the State in question, must be classified as wrongful retention?

If, in the light of the answer to the first or the second question, the Brussels II bis Regulation must be interpreted as meaning that there is a wrongful removal or retention of the child, and that he or she should therefore be returned to his or her State of residence, must Article 13(b) of the 1980 Hague Convention be interpreted as precluding the child’s return, either (i) on the ground that there is grave risk, within the meaning of that provision, that the return of an unaccompanied infant whose mother has personally taken care of him or her would expose that child to physical or psychological harm or otherwise place the child in an intolerable situation; or (ii) on the ground that the child, in his or her State of residence, would be taken into care and placed in a hostel either alone or with his or her mother, which would indicate that there is a grave risk, within the meaning of that provision, that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation: or (iii) on the ground that, without a currently valid residence document, the child would be placed in an intolerable situation within the meaning of that provision?

If, in the light of the answer to the third question, it is possible to interpret the grounds of refusal in Article 13(b) of the 1980 Hague Convention as meaning that there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation, must Article 11(4) of the Brussels II bis Regulation, in conjunction with the concept of the child’s best interests, referred to in Article 24 of the Charter of Fundamental Rights of the European Union and in that regulation, be interpreted as meaning that, in a situation in which neither the child nor the mother has a currently valid residence document in the child’s State of residence, and in which therefore have neither the right to enter nor the right to remain in that State, the child’s State of residence must make adequate arrangements to secure that the child and his or her mother can lawfully remain in the Member State in question? If the child’s State of residence has such an obligation, must the principle of mutual trust between Member States be interpreted as meaning that the State which returns the child may, in accordance with that principle, presume that the child’s State of residence will fulfil those obligations, or do the child’s interests make it necessary to obtain from the authorities of the State of residence details of the specific measures that have been or will be taken for the child’s protection, so that the Member State which surrenders the child may assess, in particular, the adequacy of those measures in the light of the child’s interests?

If the child’s State of residence does not have the obligation, referred to above in the fourth question, to take adequate measures, is it necessary, in the light of Article 24 of the Charter of Fundamental Rights, to interpret Article 20 of the 1980 Hague Convention, in the situations referred to in the third question, points (i) to (iii), as meaning that that provision precludes the return of the child because the return of the child might be considered to be contrary, within the meaning of that provision, to the fundamental principles relating to the protection of human rights and fundamental freedoms?

Judges J.C. Bonichot (as reporting judge), L. Bay Larsen, C. Toader, M. Safjan and N. Jääskinen have been appointed to this preliminary ruling.

The judgement on C-30/20, Volvo, a request from the Juzgado de lo Mercantil nº 2 de Madrid (Spain) will be published the following day:

Should Article 7(2) of Regulation (EU) No 1215/2012 … on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which establishes that a person domiciled in a Member State may be sued in another Member State: ‘… in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur’, be interpreted as establishing only the international jurisdiction of the courts of the Member State for the aforesaid place, meaning that the national court with territorial jurisdiction within that State is to be determined by reference to domestic rules of procedure, or should it be interpreted as a combined rule which, therefore, directly determines both international jurisdiction and national territorial jurisdiction, without any need to refer to domestic regulation?

AG Richard de la Tour’s opinion  was delivered on 22 April 2021. The chamber is composed by judges J.C. Bonichot, L. Bay Larsen, C. Toader, M. Safjan (as reporting judge) and N. Jääskinen.

The decision of the same chamber on joined cases C-152/20 SC Gruber Logistics – C-218/20 Sindicatul Lucrătorilor din Transporturi, both from the Tribunalul Mureș (Romania), will be published on the same day. The questions referred are quite similar.

The questions in C-152/20 were phrased as follows:

Is Article 8 of Regulation (EC) No 593/2008 [on the law applicable to contractual obligations, ‘Rome I’] to be interpreted as meaning that the choice of law applicable to an individual employment contract excludes the application of the law of the country in which the employee has habitually carried out his or her work or as meaning that the fact that a choice of law has been made excludes the application of the second sentence of Article 8(1) of that regulation?

Is Article 8 of [the Rome I Regulation] to be interpreted as meaning that the minimum wage applicable in the country in which the employee has habitually carried out his or her work is a right that falls within the scope of ‘provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable’, within the meaning of the second sentence of Article 8(1) of the regulation?

Is Article 3 of [the Rome I Regulation] to be interpreted as meaning that the specification, in an individual employment contract, of the provisions of the Romanian Labour Code does not equate to a choice of Romanian law, in so far as, in Romania, it is well-known that there is a legal obligation to include such a choice-of-law clause in individual employment contracts? In other words, is Article 3 of Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 to be interpreted as precluding national rules and practices pursuant to which a clause specifying the choice of Romanian law must necessarily be included in individual employment contracts?

And here are the questions raised in C-218/20:

Interpretation of Article 8 of [the Rome I Regulation]: does the choice of law applicable to an individual employment contract exclude the application of the law of the country in which the employee has habitually carried out his or her work or does the fact that a choice of law has been made exclude the application of the second sentence of Article 8(1) of that regulation?

Interpretation of Article 8 of [the Rome I Regulation]: is the minimum wage applicable in the country in which the employee has habitually carried out his or her work a right that falls within the scope of ‘provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable’, within the meaning of the second sentence of Article 8(1) of the regulation?

Interpretation of Article 3 of [the Rome I Regulation]: does the specification, in an individual employment contract, of the provisions of the Romanian Labour Code equate to a choice of Romanian law, in so far as, in Romania, it is well-known that the employer predetermines the content of the individual employment contract?

AG Campos Sánchez-Bordona’s opinion, of 22 April 2021, is not available in English yet.

The same day, a hearing is foreseen on case C-581/20, TOTO, on provisional measures under Regulation 1215/2012, among other:

Is Article 1 of Regulation (EU) No 1215/12 … to be interpreted as meaning that a case such as that described in this order for reference must be regarded in whole or in part as a civil or commercial matter within the meaning of Article 1(1) of that regulation?

After the right to make an application for provisional/protective measures has been exercised and the court having jurisdiction as to the substance of the matter has already ruled on that application, is the court seised of an application for interim relief on the same basis and under Article 35 of Regulation (EU) No 1215/12 … to be regarded as not having jurisdiction from the point at which evidence is produced that the court having jurisdiction as to the substance of the matter has given a ruling on that application?

If it follows from the answers to the first two questions referred that the court seised of an application under Article 35 of Regulation (EU) No 1215/12 … has jurisdiction, must the conditions for the ordering of protective measures under Article 35 of Regulation (EU) No 1215/12 of the European Parliament and of the Council be interpreted independently? Should a provision which does not allow a protective measure to be ordered against a public body in a case such as the present one be disapplied?

Once again, judges J.C. Bonichot, L. Bay Larsen, M. Safjan, N. Jääskinen and C. Toader have been appointed, this time with C. Toader acting as reporting judged.

Summer holiday starts on 16 July 2021.

(NoA: worth reading as well is AG M. Szpunar’s opinion on the cassation appeal C-638/19 P, regarding investment arbitration and state aid, published on 1 July 2021; a press release in French is available here).

The new issue of the Revue Critique de Droit International Privé (2/2021) is out.

It contains eight articles and numerous case notes.

The editorial by Horatia Muir Watt (Sciences Po), Dominique Bureau (University of Paris II) and Sabine Corneloup (University of Paris II) will soon be available in English on the Dalloz website (Devoir de réserve ?), as well as the first four articles which all deal with the reserved share in successions (réserve héréditaire) from an international perspective*.

*This subject is highly topical at this moment in France since a draft bill on the compliance with the Republican principles (projet de loi confortant le respect des principes de la République) is being debating by members of the National Assembly as well as senators. It contains a provision (see article 13) aiming at protecting French heirs regarding assets located in France, against any foreign law applicable to the succession which would not provide for a reserved shared for children (see article 912 of the French Civil Code). During its first reading in April the Senate deleted the provision (see here and here). A new reading has started in July before the National Assembly. To be continued!

The articles in the special issue are as follows:

• Une ultime (?) bataille de la réserve héréditaire, by Paul Lagarde
• Quelques observations relatives à la réserve héréditaire dans le projet de loi confortant le respect des principes de la République, by Cécile Pérès
• Contre le retour du droit de prélèvement en droit français : une vue de la pratique du droit international, by Diane Le Grand de Belleroche
• Le prélèvement compensatoire du projet d’article 913 du code civil à l’épreuve des exigences européennes et constitutionnelles, by Suzel Ramaciotti
• Droit de prélèvement, réserve héréditaire, protection des héritiers contre les discriminations, quelle méthode ?, by Natalie Joubert

The last three articles are dealing with various PIL issues.

In the first article, Christelle Chalas and Horatia Muir Watt discusse the corporate environmental responsibility from the perspective of international jurisdiction (Vers un régime de compétence adapté à la responsabilité environnementale des entreprises multinationales ? Point d’étape post-Brexit – Affaires Municipio de Mariana v. BHP plc & BHP group Ltd ; Okpabi and others v Royal Dutch Shell Plc and another).

The second article written by Vincent Richard presents the Recast Service Regulation (La refonte du règlement sur la notification des actes judiciaires et extrajudiciaires).

Regulation (EU) no 2020/1784, adopted on 25 november 2020, recasts Regulation (EC) no 1393/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters. Under the recast, transmitting agencies shall transfer documents to receiving agencies through a decentralised IT system such as e-CODEX. The recast also encourages electronic service to the addressee where the latter agrees. The reform creates new responsibilities for receiving agencies without correcting some of the Regulation’s shortcomings.

Finally, in the third article, Christine Budzikiewicz introduces the reform of international adoption law in Germany (La réforme du droit de l’adoption internationale en Allemagne).

The full table of contents is available here.

This post was drafted by Paul Lorenz Eichmüller, Vienna.

This year’s third issue of the German journal “Praxis des Internationalen Privat- und Verfahrensrechts” (IPRax) contains two articles and several other case discussions of interest for European private international law. 

In the first article, Andrew Dickinson (University of Oxford) discusses the applicable national and international rules of private international law that have been in force in the UK since the end of the transition period on 1 January 2021. He focuses primarily on jurisdiction matters and the recognition of foreign judgements, as well as choice of law for contract and tort claims. 

The abstract reads: 

At 11pm (GMT) on 31 December 2020, the United Kingdom moved out of its orbit of the European Union’s legal system, with the end of the transition period in its Withdrawal Agreement and the conclusion of the new Trade and Cooperation Agreement. This article examines the impact of this realignment on private international law, for civil and commercial matters, within the legal systems of the UK, the EU and third countries with whom the UK and the EU had established relationships before their separation. It approaches that subject from three perspectives. First, in describing the rules that will now be applied by UK courts to situations connected to the remaining EU Member States. Secondly, by examining more briefly the significance for the EU and its Member States of the change in the UK’s status from Member State to third country. Thirdly, by considering the impact on the UK’s and the EU’s relationships with third countries, with particular reference to the 2007 Lugano Convention and Hague Choice of Court Convention. The principal focus will be on questions of jurisdiction, the recognition and enforcement of judgments and choice of law for contract and tort.  

The second article by Susanne Zwirlein-Forschner (Ludwig-Maximilians-Universität Munich) concerns itself with the issue of foreign road charge claims brought in front of German courts. Particular emphasis is placed on questions of private international law.  

The abstract reads (translated from German): 

Tolling of public roads has experienced a renaissance in Europe for reasons of equivalence and climate protection. In some Member States, the modern toll systems are designed in such a way that the recovery of unpaid fees is carried out before civil courts. If such an action for payment of a foreign toll is brought before a German court, complex problems of PIL and international civil procedure arise, which will be examined in this article. 

Among the case discussions, two judgments by the CJEU shall be pointed out: firstly, the contribution by Wiebke Voß (Max Planck Institute Luxembourg for Procedural Law) on the decision C-215/18, Primera Air Scandinavia, which dealt with the delineation of contract and tort claims; and secondly, the case note by Chris Thomale (University of Vienna) on the decision C-433/19, Ellmes Property Services, which has already been discussed on this blog. 

A full table of contents can be found here. 

Jens M. Scherpe and Elena Bargelli are the editors of a collection of essays titled The Interaction between Family Law, Succession Law and Private International Law, recently published by Intersentia.

The blurb reads:

There can be no doubt that both substantive family and succession law engage in significant interaction with private international law, and, in particular, the European Union instruments in the field. While it is to be expected that substantive law heavily influences private international law instruments, it is increasingly evident that this influence can also be exerted in the reverse direction. Given that the European Union has no legislative competence in the fields of family and succession law beyond cross-border issues, this influence is indirect and, as a consequence of this indirect nature, difficult to trace.

This book brings together a range of views on the reciprocal influences of substantive and private international law in the fields of family and succession law. It outlines some key elements of this interplay in selected jurisdictions and provides a basis for discussion and future work on the reciprocal influences of domestic and European law. It is essential that the choices for and within certain European instruments are made consciously and knowingly. This book therefore aims to raise awareness that these reciprocal influences exist, to stimulate academic debate and to facilitate a more open debate between European institutions and national stakeholders.

The authors of the contributions are Elena Bargelli (Univ. Pisa), Anne Barlow (Univ. Exeter), Elena D’Alessandro (Univ. Turin), Elise Goossens (KU Leuven), Nigel Lowe (Cardiff Univ.), Robert Magnus (Univ. Bayreuth), Maire Ni Shuilleabhain (Univ. College Dublin), Walter Pintens (KU Leuven), Pablo Quinza Redondo (Univ. Valencia), Lukas Rass-Masson (Univ. Toulouse), Anne Sanders (Univ. Bielefeld), Jens M. Scherpe (Univ. Cambridge), Wendy Schrama (Utrecht Univ.) and Denise Wiedemann (MPI Hamburg).

Further information, including the table of contents can be found here.

On 25 June 2021, the Supreme Court of the United Kingdom issued a ruling in General Dynamics United Kingdom Ltd (Respondent) v State of Libya (Appellant) [2021] UKSC 22 on the right of the claimant to dispense service to a foreign State, by invoking exceptional circumstances. The court ruled that in proceedings to enforce an arbitration award against a foreign State under the 1996 Arbitration Act, the State Immunity Act (SIA) requires the arbitration claim form or the enforcement order to be served through the Foreign, Commonwealth (and Development) Office (“FCO”) to the State’s Ministry of Foreign Affairs, thus excluding the application of pertinent CPR rules.

Background

General Dynamics United Kingdom Ltd (“GD”) is part of the General Dynamics group, a global defense conglomerate. Libya is a sovereign state which, at the time of these proceedings, had two competing governments. A dispute arose between the parties over a contract for the supply of communications systems. In January 2016, an arbitral tribunal in Geneva made an award of approximately £16 million (plus interest and costs) in favor of GD. The Award remains unsatisfied, but GD wishes, and has attempted, to enforce it in England and Wales. In July 2018, the High Court made an order which, amongst other things, allowed GD to enforce the Award, dispense with the requirement on it to serve a claim form or any associated documents on Libya and provided for Libya to be notified of the order (as the initial hearing had been held without notice).

Subsequently, Libya applied to the High Court to set aside those parts of the initial order dispensing with service. It referred to section 12(1) of the SIA, which requires service of ‘any writ or other document required to be served for instituting proceedings against a State’ to be transmitted to that state’s Ministry of Foreign Affairs by the FCO. It asserted that, as no service in this manner either of the arbitration claim form or of the High Court’s order giving permission to enforce the Award had occurred, the order had to be set aside and the Award could not be enforced. Accordingly, it argued, any assets of Libya in the jurisdiction could not be used to satisfy the Award. The High Court’s initial order was therefore overturned. However, the Court of Appeal restored the High Court’s initial order finding that it was not mandatory for the arbitration claim form or order permitting enforcement to be served through the FCO ([2019] EWCA Civ 1110). The State of Libya appealed.

Ruling

The Supreme Court was called to address the following issues:

Issue 1: In proceedings to enforce an arbitration award against a foreign State under section 101 of the 1996 Act, does section 12(1) of the SIA require the arbitration claim form or the enforcement order to be served through the FCDO to the State’s Ministry of Foreign Affairs?

Issue 2: Even if section 12(1) applies, in exceptional circumstances, can the court dispense with service of the enforcement order under rules 6.16 and/or 6.28 of the CPR?

Issue 3: Must section 12(1) be construed as allowing the court to make alternative directions as to service in exceptional circumstances where the claimant’s right of access to the court would otherwise be infringed?

The court summarised the judgment as follows.

Issue 1

The majority of the Court allowed Libya’s appeal on the first issue. They considered that a broad reading of section 12(1) of the SIA is appropriate, on account of the considerations of international law and comity which are in play. The words “other document required to be served for instituting proceedings against a State” in section 12(1) are wide enough to apply to all documents by which notice of proceedings in this jurisdiction is given to a defendant State. In the particular context of enforcement of arbitration awards against a State, the relevant document will be the arbitration claim form where the court requires one to be served, or otherwise will be the order granting permission to enforce the award. In cases to which section 12(1) applies, the procedure which it establishes for service on a defendant State through the FCO is mandatory and exclusive, subject only to the possibility of service in accordance with section 12(6) in a manner agreed by the defendant State.

The minority would have dismissed Libya’s appeal on the first issue. They considered that that Parliament intended the applicability of section 12(1) of the SIA to depend on what was required by the relevant court rules. If, as in this case, the operation of the relevant rules does not require service of the document instituting proceedings, then that document will fall outside section 12(1) of the SIA. Documents which do not institute proceedings, such as the enforcement order, fall outside the scope of section 12(1) of the SIA entirely. Where section 12(1) of the SIA does not apply, the status quo of State immunity provided for in section 1 of the SIA must prevail.

Issue 2

The majority’s answer to this question is “No”. Lord Lloyd-Jones explained that section 12(1) of the SIA does not require the court to refer to the CPR to determine whether a document is one which is required to be served. Rule 6.1(a) of the CPR also makes clear that in this instance the CPR do not purport to oust the requirements of section 12(1) of the SIA. The CPR cannot give the court a discretion to dispense with a statutory requirement in any event.

The minority’s answer to this question is “Yes”. Lord Stephens considered that, if the court exercises a discretion to dispense with service in exceptional circumstances, then the relevant document is no longer a document that is “required to be served” for the purposes of section 12(1) of the SIA. In his view, this interpretation gives effect to the underlying purpose of the legislation because it facilitates the restrictive doctrine of State immunity.

Issue 3

General Dynamics argued that the service requirements in section 12(1) of the SIA may prevent a claimant from pursuing its claim, which would infringe article 6 of the European Convention on Human Rights (“ECHR”) as well as the constitutional right of access to the court. It therefore contended that section 12(1) should be construed, pursuant to section 3 of the Human Rights Act 1998 (“HRA”) and/or common law principles, as allowing the court to make alternative directions as to service in exceptional circumstances.

The majority of the Court rejected this argument. They held that the procedure prescribed by section 12(1) of the SIA is a proportionate means of pursuing the legitimate objective of providing a workable means of service which conforms with the requirements of international law and comity, in circumstances of considerable international sensitivity. The procedure cannot therefore be considered to infringe article 6 of the ECHR, or to engage the common law principle of legality. The court cannot therefore interpret section 12 of the SIA as (for example) permitting substituted service, given that a fundamental feature of the provisions is their mandatory and exclusive nature.

The minority would interpret section 12(1) of the SIA as allowing the court to make alternative directions as to service if the claimant’s right of access to the court would otherwise be infringed. They considered that denying access to a court in circumstances where diplomatic service is impossible or unduly difficult would not be proportionate to the legitimate aim of complying with international law to promote comity and good relations between States.

Assessment

The case concerns the application of internal rules of the UK. We will therefore refrain from any comment on the domestic landscape, and approach the issue from a broader perspective.

Some clarifications first:

1. The case falls outside the scope of the EU Service Regulation: Service of process was supposed to take place outside the boundaries of the European Union.
2. The case falls outside the scope of the 1965 Hague Service Convention: The State of Libya is not a signatory of the convention aforementioned.
3. There is no bilateral convention between the UK and the State of Libya in the field of judicial cooperation in civil matters.

Efforts to notify the defendant

As evidenced from the text of the Court of Appeal judgment, the Claimant had permission to dispense with service of the Arbitration Claim Form dated 21 June 2018, any Order made by the Court and other associated documents, pursuant to Civil Procedure Rules 6.16 and 6.28. The Claimant was allowed to courier the Arbitration Claim Form, the Order and the associated documents to the following addresses:

1. Interim General Committee for Defence, Ghaser Bin Gashour, Tripoli, Libya;
2. The Ministry of Foreign Affairs, Ash Shatt St, Tripoli, Libya; and
3. Sefrioui Law Firm, 72 Boulevard de Courcelles, 75017 Paris, France.

All three addresses were associated with the Government of National Accord, the recognised government of Libya. The Defendant could, within two months of the date of this order, apply to set aside this Order and the Award could not be enforced until after the expiration of that period, or, if the Defendant applied to set aside this order within two months of the date of this Order, until after the application has been finally disposed of.

The proceedings did come to the attention of Libya which has applied (within the specified two-month period) to set aside paragraphs 4 and 5 of the order and to vary paragraphs 6 and 7 so that the period for any application to set aside paragraphs 1 to 3 will run from the date of service of the order pursuant to section 12 of the State Immunity Act.

Hence, the question was not whether the State of Libya was aware of the proceedings; it was rather whether the notification met with the requirements of UK law, i.e. with section 12 of the State Immunity Act.

European and global good practices

In the EU context, we could refer to Article 19(1)b of the Service Regulation, which reads as follows:

1. Where a writ of summons or an equivalent document has had to be transmitted to another Member State for the purpose of service under the provisions of this Regulation and the defendant has not appeared, judgment shall not be given until it is established that:

 b the document was actually delivered to the defendant or to his residence by another method provided for by this Regulation;

and that in either of these cases the service or the delivery was effected in sufficient time to enable the defendant to defend.

The same rule applies in the field of the 1965 Hague Service Convention. Article 15(1)b states that,

Where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention, and the defendant has not appeared, judgment shall not be given until it is established that –

1. b)  the document was actually delivered to the defendant or to his residence by another method provided for by this Convention,

and that in either of these cases the service or the delivery was effected in sufficient time to enable the defendant to defend.

Violation of the defendant’s procedural rights?

In light of the factual situation, it is substantially improbable that the procedural breach has caused an essential injury to the appellant’s defense rights. The State of Libya filed timely an application to set aside the arbitral award, apparently because it received the courier in one of the addresses aforementioned.

Formal service prevails over actual knowledge of the proceedings?

As a conclusion, we wish to underline that the State of Libya was not deprived of its rights to challenge the award. Admittedly, GD could have attempted to serve the documents pursuant to the SIA, before opting for notification by courier. It did so, because it was given the right by the High Court order. In addition, GD attempted subsequently to serve the documents, by following the requirements of section 12 of the SIA, however to no avail.

And now what?

GD is obliged to follow the conditions stipulated in Section 12 SIA. According to the most favorable estimates, evidenced in the judgment of the Court of Appeal, service will be effected no sooner than a year following transmission. Of course, it may not be excluded that service will not take place at all. This will be the moment when article 6 of the European Convention on Human Rights comes into play.

 

In a series of posts published at the Kluwer Arbitration Blog, Gary Born argues that States Should Not Ratify, and Should Instead Denounce, the Hague Choice-Of-Court Agreements Convention.

At the invitation of the Editors of the EAPIL Blog, Trevor Hartley, Professor emeritus at the London School of Economics, replies.

Gary Born starts by saying that the 2005 Hague Choice-of-Court Convention gives choice-of-court agreements the same enforceability and effect as arbitration agreements. This, he argues, is wrong because, while the parties to an arbitration agreement can choose the individual arbitrators, the parties to a choice-of-court agreement can only choose the country, or the court, from which the judges will be drawn: they cannot choose the individual judges. The reason he finds this objectionable is that the judges in many countries are corrupt or incompetent. He cites various statistics to show this. He names a number of countries which he says are especially bad: Russia, China, Venezuela, Iran, the Congo and Nicaragua. However, none of these countries is a Party to the Hague Convention; so choice-of-court agreements designating their courts would not be covered.

There can be no doubt that corrupt, biased or incompetent judges do exist, as do corrupt, biased or incompetent arbitrators. However, even though the parties to a choice-of-court agreement cannot choose the individual judges who will hear their case, they can choose the country the courts of which will hear it. They can even choose the particular court: Article 3(a) of the Convention. And since there are many countries where the judges are not corrupt, biased or incompetent—several EU countries, as well as the United Kingdom, spring to mind—the parties can, if they choose, ensure that the judges hearing their case are unbiased, competent and impartial. If the parties insist on choosing the courts of a country where judicial corruption is a problem, they have only themselves to blame.

Moreover, it cannot be said that the Convention does not deal with this problem. Article 6(c) provides that the obligation of a court of a Contracting State other than that of the chosen court to suspend or dismiss proceedings covered by an exclusive choice-of-court agreement does not apply  if giving effect to the agreement ‘would lead to a manifest injustice or would be manifestly contrary to the public policy of the State of the court seised.’ While Article 9(e) provides that recognition and enforcement of  a judgment given by a court of a Contracting State designated in an exclusive choice-of-court agreement may be refused if it would be ‘manifestly incompatible with the public policy of the requested State, including situations where the specific proceedings leading to the judgment were incompatible with fundamental principles of procedural fairness of that State.’

Born tries to argue that the grounds for refusing to recognize a judgment under the Hague Convention are insufficient compared with those applicable to arbitration awards under the New York Convention. Little would be gained by a detailed analysis of the two sets of provisions. However, it can be said that the grounds in the Hague Convention are wide ranging—Article 9 has seven paragraphs, each setting out a different ground—and they provide ample opportunities for any court willing to use them to refuse recognition. The same courts will decide on recognition of judgments under the Hague Convention as on the recognition of arbitration awards under the New York Convention. There is no reason to believe that they will be less willing to refuse recognition in the former case than in the latter. In any event, if parties think that their rights will be better protected under an arbitration agreement than under a choice-of-court agreement, there is nothing to stop them from opting for the former. To deprive them of that choice by denouncing the Hague Convention would not enhance party autonomy: it would seriously limit it.

It should finally be said that the provisions on recognition and enforcement in the Hague Convention are very similar to those of the Brussels Regulation and the common law. The Brussels Regulation, rather than the New York Convention, was in fact the model for the Hague Convention. The most important difference between the two is that the grounds for non-recognition are considerably more extensive under the Hague Convention than under the Brussels Regulation. Both the Brussels Regulation and the common law seem to have operated satisfactorily for many years now.

This post was written by Edyta Figura-Góralczyk, University of Economics in Kraków (Poland).

On 17 June 2021 the Court of Justice of the EU pronounced a judgment in case C‑800/19 Mittelbayerischer Verlag KG v. SM. At the time of writing this post, the text of the judgment was available only in Polish and French.

The preliminary question originates from a Court of Appeal in Warsaw and concerns jurisdictional rules for online infringements of personality rights according to Article 7(2) of the Brussels I bis Regulation. The opinion in this case was prepared by AG Bobek.

Comments concerning this judgments have already been posted by Tobias Lutzi and Geert van Calster. The case was also discussed on this blog by Marta Requejo Isidro.

Background

The plaintiff (SM) based the lawsuit on Polish material law – Article 23 and 24 of Polish Civil Code. The broad understanding of personality rights under those articles of Polish law causes qualification of the national identity and national dignity to be protected by such rights.

SM is a Polish national, lives in Poland and is a former prisoner of Auschwitz extermination camp during World War II. The online article was published by Mittelbayerischer Verlag KG, having the title: “Ein Kämpfer und sein zweites Leben” (The Warrior and His Second Life) in Germany on the website that was accessible in Poland. This article presented in German language the pre- and post-war life of Israel Offman, a Jew who survived the Holocaust. The online article included the statement  that Israel Offman’s sister ‘was murdered in the Polish extermination camp Treblinka [(im polnischen Vernichtungslager Treblinka ermordet worden war)]’ instead of informing that she ‘was murdered in Nazi German extermination camp Treblinka’. SM belongs to group of former prisoners of Nazi German extermination camps. SM claims that the words ‘Polish extermination camp Treblinka’ that were used in online article instead of ‘Nazi German extermination camp’  infringed national identity and dignity of SM what according to Polish material law causes the infringement of personality rights.

Polish courts have already issued judgments in similar cases without having doubts about the basis for jurisdiction (here and here). However this time Court of Appeal in Warsaw raised the question, if Polish courts have jurisdiction in such cases on the basis of Article 7 (2) Brussels I bis Regulation.

Limits to ‘Centre of Life Interests’ – Article 7(2) of the Brussels I bis Regulation

The CJEU ruled in this case that Article 7(2) of the Brussels I bis Regulation:

should be interpreted in this way that the court in which jurisdiction is the centre of life interests of the person alleging infringement of its personality rights by the content published on the website, has jurisdiction to hear – with regard to all harm suffered and damages suffered – an action for damages brought by that person, only if the content contains objective and possible elements to be verified allowing for the direct or indirect individual identification of that person.

As already mentioned above, the case concerns the jurisdiction of the court of Member State based on ‘centre of life interests’ of the person that personality rights were infringed by the online publication (Article 7(2) of the Brussels I bis Regulation).

The CJEU already ruled the similar case – in eDate judgment and confirmed this judgment in Bolagsupplysningen. However, the specificity of the case C-800/19 is that the plaintiff (SM) is not addressed in person (name or surname) in the online article. On the contrary, in this case the plaintiff belongs to the group addressed in the article (the group of prisoners of Nazi German extermination camps). SM also has habitual residence in Poland. SM filed the lawsuit with claims that are ‘indivisible’ (e.g. the claim for publishing apology of the plaintiff for the false statement). In order to judge such claims the Polish court should have the jurisdiction based on the ‘centre of life interests’ according to Article 7 (2) Brussels I bis Regulation as it was introduced in eDate case.

According to the opinion of AG Bobek, the jurisdiction of the  courts in such cases based on the ‘centre of life interests’ doesn’t require that the allegedly harmful online content names a particular person.  However there should occur a close connection between that court and the action at issue, thus ensuring the sound administration of justice. On the contrary the Commission argued, in essence, that a person whose personal rights, according to its claim, would be infringed, should be able to bring an action before the court having jurisdiction in the centre of life interests, if this person was mentioned by name in the publication in question.

Moreover AG Bobek has proposed after AG Cruz Villalón in eDate opinion, the  proportionality test that should clarify the jurisdiction in online infringements of personality rights.

The ‘centre of gravity’ test [should] to be composed of two cumulative elements, one focusing on the claimant and the other on the nature of the information at issue. The courts of a Member State would have jurisdiction only if that were the place of the claimant’s centre of interests and if ‘the information at issue [was] expressed in such a way that it may reasonably be predicted that that information is objectively relevant in [that Member State]’. (para 64 of AG Bobek opinion).

As a result of this test AG Bobek arrives at the following assessment:

indeed [it is] difficult to suggest that it would have been wholly unforeseeable to a publisher in Germany, posting online the phrase ‘the Polish extermination camp of Treblinka’, that somebody in Poland could take issues with such a statement. It was thus perhaps not inconceivable that ‘the place where the damage occurred’ as a result of that statement could be located within that territory, especially in view of the fact that that statement was published in a language that is widely understood beyond its national territory. Within that logic, while it is ultimately for the national court to examine all those issues, it is difficult to see how jurisdiction under Article 7(2) of Regulation No 1215/2012 could be axiomatically excluded. (para. 74 of AG Bobek opinion)

However CJEU in the discussed judgment didn’t follow the proposed centre of gravity test. The Court stated that the sound administration of justice requires such interpretation of basis of jurisdiction in Article 7(2) Brussels I bis Regulation that the centre of life interests is located in the country foreseeable for the defendant. This requires the clarification of the previous judgments of CJEU (e.g. eDate).

The CJEU introduced this clarification in such a way that the connection of the plaintiff with the alleged online material should be based on objective and verifiable elements that allow the person to be identified, directly or indirectly, individually. The CJEU stated in the analysed case that SM (plaintiff) was clearly not directly or indirectly identified individually in the content published on the Mittelbayerischer Verlag website. The plaintiff bases the claim of an infringement of its personal rights due to the fact that SM belongs to the Polish nation and was the prisoner of extermination camp. The CJEU states that in such a situation, there is no particularly close connection between the court in which area of jurisdiction lies the centre of the life interests of the person claiming infringement of the personality rights and the dispute in question (para 45). Therefore, that court does not have jurisdiction to hear all ‘indivisible’  dispute claims on the basis of Article 7(2) Brussels I bis Regulation.

Assessment

The CJEU limited the interpretation of ‘centre of life interests’ in Article 7(2) of the Brussels I bis Regulation by invoking that the online content should contain objective and possible elements to be verified allowing for the direct or indirect individual identification of the person infringed.  However the CJEU didn’t limit the possibility to sue on the basis of jurisdiction from Article 7(2) in case of claims that may be ‘divided’ between the territories of the counties (mosaic principle) – e.g. the claim for compensation.

Generally, this judgment is a step forward to clarification of the broad basis for jurisdiction of ‘centre of life interests’ in case of online personality rights infringements. However the CJEU didn’t conduct the overall analysis but pronounced the sentence of the judgment based on the specificity of the analysed case.

The future will show how this criteria (the online content should contain objective and possible elements to be verified allowing for the direct or indirect individual identification of the person infringed) is to be applied further (e.g. in the pending Gtflix case).

On 1 July 2021, the ERC Building EU Civil Justice team at Erasmus University will be organising an online seminar (the fourth in a series of seminars dedicated to EU Civil Justice) that will be discussing the private law aspects of climate litigation touching upon the recent case law such as milieudefensie/Shell case. This case marks a turn in climate change litigation by targeting mainly the responsibilities of governments in curtailing the effects of climate change to suing corporations.

The seminar moderated by Jos Hoevenaars will bring together renown speakers on the topic Prof. Chantal Mak, Prof. Geert van Calster and Sanne Biesmans. They will discuss the implications of recent climate litigation in the context of private international law, fundamental rights and corporate liability.

Click here to register. More information on the coming two seminars can be found here.

In a judgment of 22 June 2021, the Paris Court of Appeal ruled that that liability claims against arbitrators fall within the arbitration exception of the Brussels Ibis Regulation and retained jurisdiction on the basis of French national rules of jurisdiction. It allowed the appeal loged against the judgment of 31 March 2021 which had ruled otherwise and declined jurisdiction.

Background

In this case, a Qatari company had entered into a distributorship agreement with the Emirati subsidiary of the Volkswagen group (VW). The contract provided for ICC arbitration in Paris and the application of German law. After the VW subsidiary terminated the contract, the Qatari company initiated arbitration proceedings before the ICC.

The Qatari company was advised to appoint as an arbitrator a German lawyer from a Stuttgart law firm. The German arbitrator did not disclose that his firm had worked previously for a bank of the VW group. The German arbitator did not disclose either that, after the arbitration started, his firm accepted work from another subsidiary of the VW Group, Porsche.

The parties and the arbitrators agreed that the hearing would be held in Frankfurt. The arbitators met in Germany.

After the Qatari company lost the arbitration on all accounts, including the fees of the arbitrators and of the VW company party to the arbitration, the Qatari company initiated annulment proceedings in Paris courts. It eventually prevailed, when the French supreme court for civil and criminal matters (Cour de cassation) found in a judgment of 3 October 2019 that the German arbitrator had violated his duty of disclosure when he failed to disclose the new work that his firm had accepted from Porsche (the previous work was considered by the court to be notorious in German legal circles).

The Qatari company sued the arbitrator in Paris for reimbursement of the fees of the arbitral tribunal that the plaintiff was ordered to pay by the award (€ 270 000), the fees incurred (by both parties it seems) in the arbitration (€ 2.6 million) and the balance of the fees incurred in the proceedings before French courts to set aside the award (€ 100 000).

Arbitration Exception

Contrary to the first instance court, the Paris Court of Appeal finds that liability claims against arbitrators fall within the arbitration exception of the Brussels I bis Regulation.

The Court explains that a liability claim based on a violation of the disclosure duty of an arbitrator is closely related to the constitution of the arbitral tribunal and to the arbitration, as it aims at assessing whether the arbitrator performed properly his “mission”, in accordance with the obligations resulting from the arbitration contract.

As I had already underlined in my previous post, I was not convinced by the idea that, because of the existence of a contract between the parties and the arbitrators, a liability claim based on this contract is unrelated to the arbitration proceedings. The duty to disclose is provided by the lex arbitri, and the arbitration contract, which will typically be implied, will not define the regime of this duty (in this case, the terms of reference are essentially silent on the duty to disclose).

More importantly, the Paris Court rightly points to Recital 12 of the Brussels I bis Regulation, which states that

This Regulation should not apply to any action or ancillary proceedings relating to, in particular, the establishment of an arbitral tribunal, the powers of arbitrators, the conduct of an arbitration procedure or any other aspects of such a procedure, nor to any action or judgment concerning the annulment, review, appeal, recognition or enforcement of an arbitral award.

It is beyond doubt that an action to dismiss an arbitrator for violating his duty to disclose would fall within the arbitration exception. Why then wouldn’t an action aimed at sanctioning such violation by the award of damages? All actions sanctioning the (improper) “establishment” of an arbitral tribunal should fall within the arbitration exception.

French National Rules of Jurisdiction

After finding that the Brussels I bis Regulation does not apply, the court logically applies its national rules of jurisdiction. It finds that the claim is contractual in nature, which is uncontroversial under French law, as the existence of a contract excludes tort claims (principe de non-cumul).

Remarkably, the French rule is pretty much the same as Article 7(1)(b) of the Brussels Ibis Regulation. Article 46 of the French Code of Civil Procedure provides for the jurisdiction of the courts of the domicile of the defendant or the courts of the place where the services were provided. But the French court had no reason to follow the interpretation of the CJEU in this context, and to rely on a factual assessment of where the services were actually provided.

Instead, the court rules that the service provided by arbitrators is not merely contractual, but is also partly adjudicatory. As a consequence, the court finds that the services were provided at the place of the seat of the arbitration, and that the place where the hearings were held, or the arbitrators might have reflected on the case, is irrelevant.

What’s in a Seat?

Beyond the technicalities and the details of the applicable rules, the outcome of the case is that the propriety of the actions of the German arbitrator will be assessed by a French court, and not by the home court of both the respondent in the arbitration and the arbitrator. This is critical.

The promise of international commercial arbitration is to offer neutrality of adjudication. This is achieved by 1) appointing neutral and independent arbitrators and 2) by choosing a neutral seat for the arbitration. One of the most important consequences of the choice of the seat is to grant jurisdiction to supervise the arbitration proceedings. A neutral seat means, inter alia, neutral courts to decide about the fairness of the arbitration proceedings.

In this case, the German arbitrators, the German lawyers, and the respondent wanted that the arbitration physically take place in Germany. That was fine as long as this choice was only about convenience, and did not have any legal consequence.

The dramatic consequence of the first instance decision was that the choice of the venue triggered legal consequences: it could change the jurisdiction to supervise the arbitration, which the French court was happy to transfer to a German court, i.e. the home court of the arbitrator, of Porsche, of VW.

The bargain of the Qatari party was that it would not litigate against the largest German company before an arbitral tribunal seated in Germany, and even less in a German court.

The case exemplifies why the courts of the seat of the arbitration should retain jurisdiction on the sole ground that they are the courts of the seat of the arbitration.

Andrew Dickinson and Edwin Peel are the editors of A Conflict of Laws Companion – Essays in Honour of Adrian Briggs, which was just published by Oxford University Press.

The book is a collection of 13 essays written by scholars and practionners, including three members of the highest courts of common law jurisdictions, who all did either the BCL or a DPhil at Oxford with or under guidance from Adrian Briggs.

The book is a tribute to a teacher and scholar that one of the contributors presents as Oxford’s third giant in the conflicts field in succession to A V Dicey (to 1922) and J H C Morris (to 1984). In the foreword of the book, Lord Mance notes that, “on the top of all this (…) Adrian Briggs has managed a busy Temple practice (including at the highest levels cases such as Rubin v Eurofinance, The Alexandros T and Enka v OOO Chubb, all discussed in the book) as well as featuring in and contributing valuably to the work of Parliamentary and other committees.”

The list of the contributions and their authors can be found here. They examine, inter alia, again in the words of Lord Mance:

– how far conflicts principles serve private interests of consent and obligation and how far statist interests;
– the proper understanding of comity, which Briggs roots in territoriality;
– the concept of the natural forum, to the development of which the young Briggs contributed so significantly (as recorded by Lord Goff in The Spiliada in 1986);
– the extent to which jurisdiction needs to be defined in England or in overseas jurisdictions both by gateways for service out and within these by discretion;
– the scope and operation of the EU rule regarding joinder of co- defendants (Art 8(1) of Brussels 1) in the light of the ‘sorry mess’ made by the Court of Justice in this area in and after Owusu v Jackson;
– the extent to which the anti- suit injunction can really be justified as directed purely in personam;
– the extent to which recognition of a foreign decision may, consistently with principles of comity and territoriality, be refused where it was in English eyes clearly obtained in breach of an English choice of jurisdiction clause; and
– as a final example close to Adrian Briggs’ heart, the extent to which such a breach may, where necessary as a fall- back, be redressed by the tool of a damages claim, a course recently sanctioned at highest judicial levels in The Alexandros T.

On a personal note, I should add that Adrian Briggs also supervised the work of numerous doctoral students visiting Oxford to delve into the intricacies of the common law. I was fortunate to be one of them 25 years ago (and to learn that, yes, it was necessary to read Australian scholars to understand equitable remedies). He was also ready to participate to the defence of doctoral theses in Paris and Luxembourg.

In a memorable post that he wrote for this blog on the recent case of the CJEU in Wikingerhof, he concluded: “Brexit, Covid, and now Wikingerhof. What a wretched year. We are only one horse short of an Apocalypse.” One hopes that this horse is not his retirement from Oxford, and that, to avoid any Apocalypse, he will continue to write, including on this blog.

This post has been drafted by Dr. Felix M. Wilke, University of Bayreuth, Germany.

A new contestant has entered the ongoing debate about the law applicable to Electronic Securities and/or in the blockchain context. On 10 June 2021, the new German Act on e-Securities (Gesetz zur Einführung von elektronischen Wertpapieren, eWpG) entered into force. Its § 32 contains a special conflict-of-laws rule.

The following is a sketch of my first impressions and potential implications of the new rule. Any input is very much welcome!

The German E-Securities Act in General

The substantive scope of the eWpG somewhat belies its broad title. Far from being about all types of e-securities one can imagine, it only concerns bearer bonds (§ 1 eWpG). The act introducing the eWpG, however, also contains changes to the Capital Investment Code (Kapitalanlagegesetzbuch, KAGB), providing for the possibility of issuing electronic shares in investment funds.

It should also be noted that the e-Securities Act is no genuine piece of blockchain legislation. The word “blockchain” does not appear in it. The Act is not limited to securities recorded in a blockchain, nor would all blockchains necessarily meet the requirements of the Act.

Indeed, parts of the act merely concern centralized registers for e-securities to be maintained, e.g., by central securities depositories. Here, the main difference to current practice seems to consist in dispensing with the need for the depository to safekeep even only one paper (global) certificate.

Yet when other parts of the eWpG mention registers which are supposed to be decentralized as well as forgery-proof (sic) and to offer protection against any subsequent modification of recorded information (§§ 16(1), 4(11) eWpG), it becomes obvious that blockchain/distributed ledger technology can play an important role for so-called “crypto securities”. If one looks closely at the changes to the KAGB, one comes across an opening for distributed ledger technology for shares in investment funds, as well: § 95(5) KAGB.

Core aspects of the Act are the publicity, the contents, and the conditions for changes of registers for e-securities. A litany of (technical) details are delegated to the German Federal Ministry of Justice and Consumer Protection and the German Federal Ministry of Finance. One provision that will certainly raise an eyebrow or two is § 2(3) eWpG: It sets forth that e-securities are to be considered “things” within the meaning of the German Civil Code (Bürgerliches Gesetzbuch, BGB). Thus, in principle, the rules for corporeal objects will apply to an incorporeal asset.

The New Conflict-of-Laws Rule

32 eWpG concerns the applicable law. I would tentatively translate it as follows, sticking closely to the structure and word order of the German original:

(1) To the extent that § 17a Securities Account Act does not apply, rights regarding an e-security and dispositions about an e-security are governed by the law of the State under whose supervision the register office is in whose e-securities register the e-security is recorded.

(2) If the register office is not under supervision, its seat is decisive. If the seat of the register authority cannot be determined, the seat of the issuer of the e-security is decisive.

The Subject Matter

32 eWpG applies to rights regarding and dispositions about e-securities. Due to the limitation of the entire Act, one might assume that the conflict-of-laws rule will only apply to electronic bearer bonds (under German law). Yet as the provision has clearly been designed as an omnilateral provision, and considering that the definition of an e-security is much broader (§ 2 eWpG), it is conceivable that the conflict-of-laws rule encompasses more securities than that the Act in which it is found. This, of course, would be a phenomenon well-known to private international law scholars, but perhaps not-so-well-known in other circles.

In any case, the express reference to § 17a Security Account Act (Gesetz über die Verwahrung und Anschaffung von Wertpapieren, DepotG) has a limiting effect – whose impact is not obvious. The bill had not included this proviso.

§ 17a DepotG is Germany’s transposition of Article 9(2) of the Settlement Finality Directive (SFD). If the rule(s) of SFD were to be interpreted broadly to encompass modern digital assets (not an easy task: see Matthias Lehmann’s thoughts on this blog), a rule like Germany’s would likely have to be interpreted in conformity with the SFD. Not that we did not already have enough discussions about § 17a DepotG, including about its conformity with the SFD, in the first place…

What is more, the Security Account Act itself was changed along with the introduction of the eWpG, extending the meaning of securities for the purposes of the former to e-securities under the latter. This should affect the scope of § 17a DepotG, shaping the understanding of § 32 eWpG in turn.

My first idea is that § 17a DepotG will be the relevant conflict-of-laws provision for e-securities in a collective deposit, and that § 32 eWpG will apply to the rest.

The Connecting Factors

The law of the State with supervision over the respective e-securities register office governs rights in and dispositions about an e-security under paragraph 1.

At first sight, this might seem to be a rather easy rule. I would submit, however, that it actually implicates a tricky analysis. In order to correctly apply the rule, one seems to have to look for (typically unilateral) rules of competence for financial supervision authorities.

First, it will not always be easy even to ascertain the respective rules (at least for foreign States).

Second, their connecting factors are likely to differ from State to State: e.g. seat of an institution to be supervised vs. place where it carries out business activities. This could lead to an accumulation of applicable laws that somehow would have to be resolved.

And what if a foreign register without State supervision is at issue? Under the bill, this was an open question. The final version now has a second paragraph, making the seat of the register office a subordinate connecting factor. But why does the provision not again refer to “State” supervision?

If the seat of the register office cannot be determined, either (also in cases where there is no register office?), the second clause of the second paragraph employs the seat of the issuer of the e-security as the connecting factor. The substantive part of the eWpG contains a similar approach, in that the issuer of an e-security will be treated as the register office if the issuer does not designate such an office in relation to the bearer (§ 16(2) cl. 2 eWpG).

Outlook

The new Act and its conflict-of-laws rule offer plenty of food for thought. Expect the first articles and even rule-for-rule commentaries to pop up in the near future. Because of the obvious connections between the conflict-of-laws rule to the substantive provisions of the Act, it will not always be easy to tell apart where private international law is supposed to be limited and where it can strike out on its own.

In spite of the numerous studies and decades of analysis, the interface between private international law and human rights keeps scholars busy.

No surprise, thus, that the (current) 4th Commission of the Institut de Droit International is presenting a new Draft Resolution next August, on the occasion of the IDI biannual meeting, held on line.

The Resolution, whose reporter is Fausto Pocar, will be based on the preparatory documents – including the
Report of Jürgen Basedow, Rapporteur until The Hague session in 2019 -, the previous draft resolutions, the written proposals of amendments submitted at The Hague that could not be discussed, and the plenary discussions as they result from the minutes of the Hague session.

The text in its version of 27 January 2021, is available on line. It is preceded by a thorough introduction to the work done until that date and to the general and specific issues dealt with. For a proper understanding of the Draft Resolution, it is worth noting that it addresses, without necessarily espousing, the two main points of criticism at the Hague session: “the Draft Resolution then discussed did not capture sufficiently the relationship between private international law and the public international law dimension of human rights protection, sometimes indulging in technical descriptions of private international law issues that had no or a too limited human rights component”; and “it was observed that the consideration of human rights in that Draft Resolution might appear to the reader exceedingly influenced by western values rather than focused on a global vision which would better suit an Institute’s Resolution” (NoA: Having read the documents available online regarding the first draft resolution I personally fail to understand the first reproach, but I am probably too much familiar with PIL technicalities myself. No opinion on the second ground for criticism).

The current Draft Resolution consists of 20 provisions. In a nutshell, like the former one it addresses the impact of human rights on international jurisdiction, applicable law and recognition: the tripartite division typical to cross-border settings underlies indeed the narrative of the Resolution – although not in the unsophisticated way I am describing it. Also like the former text, the present one includes provisions devoted to specific heterogeneous areas (name, identity, marriage, parentage, property, corporate social responsibility…), to explicitly tackle human rights concerns germane to each area. By way of example: under the heading “Marriage” the following is written:

(1) Child marriage and marriage agreed upon in the absence of the free and full consent of the two spouses infringe upon human rights and shall not be recognized

Or, under the heading “Protection of property”:

(2) Where a change of the applicable law resulting from private international law is conducive to the loss of such right, the forum State shall grant the holder an equivalent right to the extent possible.

The Resolution is short; so are its articles, separately taken. The wording is clear, attention is paid to stay in the realm of PIL and, I believe, to avoid assertions that may not be palatable to the IDI majority of Public International Law members. The scholarly distinction still exists (not only at the IDI), whether one likes it or not, and the gap does not seem to be without consequences.

I fear human rights activists will feel a little bit deceived by the Draft Resolution, should it be adopted as it stands. It may indeed be in the nature of this kind of document not to be too ambitious. This one remains to a large extent programmatic; it defers to other instruments or fora; it openly prefers to promote the accession to, and the respect of existing international conventions instead of coming up with detailed, statutory-like proposals. It is soft in the proper sense of the word. However, to my mind, it is no less relevant because of this character, which is obviously a conscious choice following in-depth analysis and reflections. It may be the only one possible to date.

– Picture: Session of The Hague 2019. ©Marieke Wijntjes)

This is the third post of an online symposium on the recent judgment of the CJEU in Vereniging van Effectenbezitters v. BP after the posts of Matthias Lehmann and of Laura van Bochove and Matthias Haentjens.

The author of this post is Prof. Geert van Calster, who teaches at and is Head of the department of European and International Law of the University of Leuven (Belgium), and an independent legal practitioner at the Brussels Bar.

Leiden University’s Round Table on the consequences of CJEU Vereniging van Effectenbezitters v BP (VvE) provided me with an opportunity not just to talk on the consequences of the ruling for applicable law, but also to discuss those views with an excellent group of scholars. That afternoon’s discussion no doubt has had an impact on some of what I write below, however clearly this post is my own responsibility.

Contractual or non-contractual obligations?

Clearly a first element of note is that the applicable law picture looks entirely different depending on whether one is looking at a contractual (triggering application of the Rome I-Regulation) or non-contractual (meaning Rome II will apply) relationship. The general assumption is that in a case like VvE, Rome II is engaged.

This results firstly from parties claiming jurisdiction on the basis of Brussels IA’s tort gateway, Article 7(2). The suggested parallel between the Brussels Ia and Rome Regulations then indicates that where jurisdiction goes, applicable law needs to follow (below I talk more about that parallel).

Further, there is CJEU case-law making a contractual jurisdictional basis unlikely. In CJEU C-366/13 Profit Investment Sim, the Court held that a choice of court contained in a prospectus produced by the bond issuer concerning the issue of bonds may be relied on against a third party who acquired those bonds from a financial intermediary under quite narrow circumstances only. These circumstances include considerations of applicable national law. In CJEU C-375/13 Kolassa the Court held that, on the facts of the case, there were no indications that there was a contract under either the consumer title or the general Article 7(1) gateway, between the holder of a securities account and Barclays, the issuer of certificates held in that account.

On the other hand, following the CJEU’s much stretched notion of ‘contract’ in C-337/17 Feniks and follow-up case-law, I do not think that the existence of a ‘contract’ between the issuer of the financial instruments and the (very) downstream investor can be entirely ruled out.

In the remainder of this post however I shall assume the majority’s intuition that the applicable law analysis be pursued under the Rome II Regulation.

A reminder: the general rule of Article 4(1) Rome II

The standard applicable law rule to purely economic loss, is included in Article 4(1) Rome II and holds that the applicable law is the

‘law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur’

There is no specific rule for purely economic loss as such. However, there may be circumstances in which purely economic loss may be covered by one or two of the specific categories included in Rome II. I am thinking in particular of the product liability rules (with discussions on whether financial instruments may be qualified as a ‘product’ under same), and the rules on unfair competition and infringement of competition law.

Further variations to the rule exist in Article 4 itself, and via the scope of applications, which excepts a number of non-contractual obligations hence giving space for residual, national private international law to take over.

Need for absolute parallel between Rome II and Brussels Ia?

To the degree one assumes that Article 7(2) Brussels Ia’s tort jurisdictional gateway, and Rome II’s rules on applicable law for non-contractual obligations need to be applied in synchronicity, clearly a judgment like VvE will have an important impact on the application of Article 4 Rome II’s general rule.

However the CJEU itself is ambivalent on the need for such parallel. In Kainz, the CJEU specifically rejected the need for consistency between Brussels Ia and Rome II, while in other cases the recital’s encouragement of consistency has had an impact on the court’s rulings.

Once must tread with caution therefore in extending the VvE findings to the applicable law discussion. Those with an interest in doing so will find support in the authorities to talk down the impact of VvE on applicable law.

Echoes of an exception, and a tailor-made lex causae not achieved

First the Finnish and then the UK delegation to the Rome II Committee, actually (unsuccessfully) suggested an exclusion from the scope of application for financial instruments. The UK proposal to that effect would have added to Rome II’s exclusions from the scope of application

“Non-contractual obligations arising out of transactions, such as issuing, admission to trading, offering or marketing, relating to financial instruments, including transferable securities, moneymarket instruments, units in collective investment undertakings, options, futures and other derivatives instruments“

In that discussion reference was also made to the fall-back lex contractus rule for certain financial instruments in Article (4)(1)h of the Rome I Regulation.

When it transpired that the proposal for this exception had the support of neither the EC nor enough Member States, the UK suggested singularity of lex causae by introducing a specific heading for financial instruments in which either the lex loci incorporationis (of the issuer) or the law of the place where the issuer has its primary listing, would be applicable to non-contractual loss.

The former suggestion echoed somewhat the difficulties in establishing the exact scope of Rome II’s corporate law exception (Article 1(2)d Rome II). CJEU Kolassa (a 1980 Rome Convention case) unfortunately failed to bring much clarity on this point.

 National case-law: Petrobas

In Petrobas Rotterdam, the Dutch court identified the locus damni in an investor suit as

the location of the market(s) where the financial instruments are listed and traded.

It emphasised predictability and it conceded a Mozaik effect, including of course application of non-EU laws (in the case at issue, viz the Brazilian and Argentinian investors). This finding might in fact chime with the CJEU in VvE where as other posts on this blog clarify, the

place of statutory duties of information

was upheld as locus damni. This synergy between the finding at the applicable law level in Petrobas, and the jurisdictional criterion in VvE, only applies of course provided all places of listing and trading are subject to such duties.

If one were to apply the ‘law of the place of statutory duties of information’, however, rather like at the jurisdictional level, this would raise the mental twister that this criterion is more akin to locus delicti commissi than locus damni, as Matthias Lehmann has pointed out.

Moreover, like in VvE, such criterion does not help us for unlisted financial instruments.

Finally, Article 4(3)’s ‘manifestly more closely connected’ variation to the lex loci damni rule clearly will give a judge some (but not much: the Article needs to be applied restrictively) room for manoeuvre to identify a different law with more, and intense, affinity to the case.

Help on the horizon? Pending case before the CJEU

As was helpfully pointed out by Tomas Arons at the aforementioned Round Table, in the pending case C-498/20 ZK , in his capacity as liquidator in the bankruptcy of BMA Nederland BV v BMA Braunschweigische Maschinenbauanstalt AG, locus damni considerations in Rome II in a case of purely economic loss (alleged breach of duty of care by a mother holding for allegedly failing to provide its daughter company with adequate financing) are currently sub judice before the CJEU. The judgment in that case will undoubtedly feature VvE and will hopefully clarify the application of Rome II to cases of purely economic loss.

This is the second post of an online symposium on the recent judgment of the CJEU in Vereniging van Effectenbezitters v. BP after the post of Matthias Lehmann. 

The authors of this post are Dr. Laura van Bochove (Assistant Professor at Leiden University) and Prof Dr Matthias Haentjens (Professor of Private Law at Leiden University)

On 3 June 2021, Leiden University hosted a seminar with international experts from the judiciary, law firms, civil service and academia to discuss the recent CJEU judgement in Vereniging van Effectenbezitters v. BP. The discussion clearly showed that the judgment may be interpreted differently. Some experts, including Matthias Lehmann (see here), argued that in VEB/BP, the CJEU refused to localise the Erfolgsort at the place of an investment account and, instead, localised damage at the place of listing. We see some merit in attributing jurisdiction to the court of the place of listing, but we do not think the CJEU has chosen such a radical departure from existing case law. Rather, we believe the CJEU continues to (try to) localize the Erfolgsort, also in cases of financial loss, and may continue to consider as connecting factors in that context the investment account, possibly next to the place of listing.

We believe VEB/BP represents another change in direction. We see that the CJEU introduced ‘foreseeability’ as a relevant consideration when having to determine the place where losses have materialized. This clearly derogates from previous CJEU case law and raises new questions.

Connecting factor #1: bank account

One of the participants to our seminar, Dorine Verheij, once said that when a Dutchman rides his bike on the Champs-Elysees and gets hit by a 2CV, it is clear in which jurisdiction the damage was caused and also where it materialized. This is not so for financial loss. Financial loss, by its very nature, is immaterial and therefore as a matter of logic, not localizable. However, the CJEU has continued to (try to) localize the Erfolgsort in several financial loss cases, including Kronhofer, Kolassa, Universal Music and Löber. This case law has been fiercely criticized in legal literature. In his Opinion in VEB/BP, Advocate General Campos Sánchez-Bordona sided with this critique and suggested to abandon the Erfolgsort in financial loss cases. The CJEU did not follow suit, and we believe this is a strong indication the Court continues to (try to) localize the Erfolgsort, also in cases of financial loss. Moreover, the Court did not explicitly depart from the case law just referred to (ie Kronhofer, Kolassa, Universal Music and Löber). In these cases, the court considered as relevant connecting factors the applicant’s “bank account” (Kolassa, Löber, Universal) as well as “other specific circumstances of that situation” (Löber). In VEB/BP, the Court specifically considered the “investment account” as a possible connecting factor, whilst that it held that this factor was insufficient to attribute jurisdiction in this case.

As one of us has written elsewhere, we believe that when securities have lost value or have become worthless, possibly as a result of misleading information from the issuer of the securities, any losses suffered by the owner of the securities concern those securities specifically. Thus, it is the relevant securities account in which those securities are credited, that is the ‘place’ where the financial loss materializes (wherever that may be), rather than in any bank account from out of which these securities were initially purchased. We therefore believe it is welcome that the Court has now clarified that it is the ‘investment account’ (rather than the bank account) that may be of relevance as a connecting factor when having to determine where to localize financial loss. However, and as we have also argued elsewhere, the localization of an investment account (which we thus understand to be the relevant securities account) is dogmatically and logically impossible, since securities accounts have no physical location. This fact makes a securities account or ‘investment account’ unsuitable for any attribution of jurisdiction.

In the VEB/BP case, however, the Court concluded for other reasons that the ‘investment account’ was not adequate as a connecting factor to attribute jurisdiction to the court of the Member State where the account is held, as it held that as a connecting factor, an investment account could not ‘ensure’ the ‘objective of foreseeability’. Before we turn to discuss foreseeability as a connecting factor, first we will pay attention to the ‘place of listing’, which the Court introduced in VEB/BP as a possible connecting factor.

Connecting factor #2: the place of listing

Which factors should be considered relevant or decisive so as to attribute jurisdiction in a specific case, remains elusive. In Kronhofer, the Court held that the place of the applicant’s domicile may not be sufficient if the relevant investment account is located in another jurisdiction. This judgment did not say, however, which connecting factor would suffice to attribute jurisdiction. When the place of the applicant’s domicile coincides with the relevant investment account, this may suffice, the Court held in Kolassa and Löber. But in Universal Music, the Court dismissed this combination of connecting factors on the ground that the other case law concerned a “specific context” (yet without explaining what the element of distinction was), so that “the ‘place where the harmful event occurred’ may not be construed as being, failing any other connecting factors, the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage which materialises directly in the bank account of the applicant and is the direct result of an unlawful act committed in another Member State.” Arguably, in VEB/BP, the Court found such ‘other connecting factor’ in the place of listing.

More specifically, in paragraph 35 the CJEU held:

“It follows that, in the case of a listed company such as that at issue in the main proceedings, only the jurisdiction of the courts of the Member States in which that company has complied, for the purposes of its listing on the stock exchange, with the statutory reporting obligations can be established on the basis of the place where the damage occurred. It is only in those Member States that such a company can reasonably foresee the existence of an investment market and incur liability.”

In isolation, this paragraph appears to provide for a clear jurisdiction rule, attributing jurisdiction on the basis of the place where the damage occurred to the courts of the Member State in which the listed company has complied, for the purposes of its listing on the stock exchange, with the statutory reporting obligations (the place of listing). However, this paragraph [35] must not be considered in isolation, as indicated by the introductory words “[i]t follows that”. These words refer to the previous paragraph [34], where the CJEU held that in the present case, the applicant’s domicile and the place of its investment account would not ensure the objective of foreseeability. In other words, the CJEU held in paragraph [34] that the combination of connecting factors that were considered sufficient for attribution of jurisdiction in Löber and Kolassa, proved inadequate in the present case, as it would not guarantee that the defendant would be able to reasonably foresee where it could be sued.

We think the Court has been most persuasive where it held that in financial loss cases such as VEB/BP, the location of the applicant’s investment account is arbitrary and not reasonably foreseeable for the defendant, ie the issuer of the relevant securities. However, this does not mean that the place of listing can logically be considered as a ‘place where the damage occurred’, as the Court seems to suggest. Neither should this be interpreted to mean that the place of listing suffices, in and by itself, as a connecting factor that can attribute jurisdiction, because the Court gives no indication that it departed from earlier case law.

First, the place of listing is a place where securities are traded. This place has no, if only indirect relevance for the localization of the place “where the alleged damage actually manifests itself” (Löber, cited in VEB/BP, para. 31), ie the place “where the applicant has suffered financial consequences” (VEB/BP, para. 29). An investor commonly orders his investment firm (ie bank or broker), to acquire or sell certain financial instruments. The investment firm may proceed to acquire those instruments, for that investor, on a regulated exchange, but these can also be acquired on other official trading venues such as multilateral trading facilities, organized trading facilities, or even internally settled on the books of the investment firm. This practical reality shows, we think, that the investor does not “suffer financial consequences” on the place of listing (possibly with the exception of the rare instance where the investor itself is an admitted member of an exchange). We therefore think the place of listing may be a relevant connecting factor, but logically in most cases it cannot qualify as an Erfolgsort.

Second, the Court introduced the place of listing only in the context of foreseeability of damage. It did not explicitly (or implicitly) depart from its earlier case law, where other connecting factors were considered adequate as discussed above. Therefore, we consider it likely (but the Court does not make this explicit), that the Court may continue to consider the investment account as the place where financial damage ‘actually manifests itself’, but that this connecting factor was not deemed sufficient in the present case for reasons of foreseeability only. Rather, the Court seemed to imply that the place of the investment account may be considered foreseeable for the defendant only if that defendant’s securities are listed in the same Member State. If anything, this interpretation would accord (better) with Kolassa and Löber.

Relevant circumstance: foreseeability

Whilst we welcome the Court’s dismissal of the investment account as a sole connecting factor in the present case, the CJEU’s introduction of and reliance on ‘reasonable foreseeability’ as a relevant circumstance is not unproblematic, as the CJEU’s interpretation of ‘reasonable foreseeability’ in VEB/BP seems to deviate from its previous case law. In that earlier case law, the threshold for foreseeability is often low, as illustrated in the ‘Dieselgate’ case VKI/Volkswagen. In that case, the CJEU attributed jurisdiction to the courts of the place where the applicants bought their cars from a third party. This third party virtually never was the same as the defendant that equipped the cars with manipulative software. Here, the CJEU held that that the manufacturer ‘by knowingly contravening the statutory requirements imposed on it’ may reasonably expect to be sued in the courts of the place where the car was purchased by the final purchaser, even though this could potentially lead to the jurisdiction of the courts of all EU member states, since the purchases of second-hand or imported cars were not excluded. Similarly, in eDate Advertising, the CJEU readily assumed the foreseeability of the place of damage in case of online infringement of personality rights, which could be anywhere where the content on the website was accessible.

Thus, in VEB/BP the CJEU seemed to have interpreted ‘reasonable foreseeability’ more restrictively and as a ground to deny jurisdiction, whilst in VKI/Volkswagen and eDate Advertising the Court used reasonable foreseeability more liberally and as a ground to attribute jurisdiction. Put differently, on the basis of VKI/Volkswagen and eDate Advertising, one could have expected the CJEU to attribute jurisdiction in VEB/BP to the courts of the Netherlands, as BP directs its activities and communications to investors worldwide. But we would think that the Court’s relatively strict interpretation of ‘foreseeability’ in VEB/BP accords better with the objectives of Brussels Ibis, ie ensuring legal certainty by preventing a multiplicity of courts having jurisdiction. Whether the CJEU will use a similar, strict interpretation of reasonable foreseeability in future cases remains to be seen.

VEB/BP and future case law

The VEB/BP case was eagerly awaited, especially by Dutch investors, multinationals and their lawyers. Should the CJEU have attributed jurisdiction to the Netherlands, this would have allowed other collective actions for investment losses to be opened in the Netherlands, making the Dutch courts an attractive go-to jurisdiction for the recovery of investment losses. This now seems to have been limited to cases where the financial losses were ‘reasonably foreseeable’ to have materialised in the Netherlands. Consequently, the CJEU’s judgment in VEB/BP will also have implications for other pending cases, including VEB’s pending collective action in the Amsterdam court against Volkswagen for misleading information in relation to ‘Dieselgate’.

We believe VEB/BP is to be applauded in view of the objectives of the Brussel Ibis Regulation, as the Court has dismissed the investment account which has always been highly unreliable a connecting factor. However, the Court’s reasoning gives rise to several new questions which does not seem helpful for applicants or defendants, including: has the investment account been permanently dismissed as a connecting factor? (we think not); is the place of listing to be considered as the sole connecting factor in cases concerning listed securities? (we think not); is reasonable foreseeability now to be interpreted strictly? (we are doubtful). It is to be hoped that the CJEU answers these questions in future cases, which will be as eagerly awaited as VEB/BP.

This post was contributed by Thomas Mastrullo, who is a lecturer at the Sorbonne Law School (Paris 1)

On 31 March 2021, the Legal High Committee for Financial Markets of Paris (“Haut Comité juridique de la Place Financière de Paris” – HCJP) has published a report on the applicable law to companies  (Rapport sur le rattachement des sociétés – see here). This report is of great interest for those who are interested in the evolution of international company law.

Context

For several years, there has been a reflection in France about the conflict-of-law rule in corporate matters.

We know that two theories coexist in international company law: the theory of incorporation, which consists in applying to the company the law of the State where it was incorporated and where its registered office, or statutory seat, is located; the real-seat theory, which submits the company to the law of the State where its head office, or central administration, is localised.

In French law, the conflict-of-law rule in corporate matters is laid down in unilateralist terms, with almost the same drafting, in Article 1837 of the Civil Code (see here) and in Article L. 210-3 of the Commercial Code (see here).

The doctrine is divided on the interpretation of these texts, which have been bilateralized by French Cour de cassation (e.g. Com. 9 mars 1993, n° 91-11.003, Bull. civ. IV, n° 94 ; see here). The traditional view among French writers is that the connecting factor is in principle the real seat, because the statutory seat is not enforceable against third parties in case of dissociation of the registered office and the head office. But the modern view is that the connecting factor is in principle the statutory seat, considering that third parties have an option between the registered office and the head office in case of dissociation.

In this context, by letter dated 18 February 2020, the HCJP was jointly seized by the Ministry of Justice and the Ministry of the Economy with a request for a study on the “Opportunity, feasibility and conditions of turning to the theory of incorporation”. This initiative takes place in an environment of increased economic and legal competition: the adoption of the theory of incorporation might strengthen the legal attractiveness and economic influence of France. But the referral letter does not ignore that such a liberal conflict-of-law rule might also encourage opportunistic behaviors by economic actors and departure of French companies abroad.

Several questions were therefore raised in the referral letter: Consequences of adopting the theory of incorporation in terms of attractiveness? Experience of other EU Member States? Compatibility with EU law? Risks of forum and law shopping? Consequences for matters related to company law?

Finally, the letter requested that “the necessary legislative and regulatory changes” be proposed.To meet this demand, a working group was set up under the chairmanship of Professor Hervé Synvet, composed of academics and legal practitioners.

The result of the working group’s reflection is the report under consideration, which is divided into two parts.

Impact of a New Conflict-of-law Rule in Corporate Matters on Other Matters

In the first part, the HCJP studies the impact that the evolution of the French connecting factor in corporate matters would have on other branches of law. Several matters are taken into consideration: tax law, insolvency law, social law, capital market law, regulation of foreign investments, banking and financial law. The conclusion is that the adoption of the theory of incorporation would have little impact on these different branches of the law, and in any case no negative effects likely to prevent a reform. Indeed, these different disciplines have their own conflict-of-law rules and the connecting categories are quite clearly defined in French private international law. In addition, each of these matters has a specific approach to the company seat.

Proposed Reform

In the second part, the working group argues in favor of an evolution of the French conflict-of-law rule. More precisely, it proposes to adopt a new connecting factor relying exclusively on the statutory seat – or registered office, and to abandon any reference to the real seat.

Arguments in favor of the adoption of the connecting criterion by the statutory seat

Several arguments are advanced in support of this proposition.

Firstly, this conflict-of-law rule would be simpler and, as a consequence, more favorable to legal certainty. Indeed, on the one hand, it would eliminate the touchy question of the place of the real seat and, on the other hand, it would guarantee respect for the operators’ choice of the law to rule their company or even their group of companies. Thus, France’s attractiveness might be reinforced. Secondly, the solution is inspired by the comparative private international law (German, Irish, Luxembourg, Dutch, British, Swiss and Delaware law are studied) which reveals a strong tendency towards the generalization of the theory of incorporation or connecting criterion by the registered office. Thirdly, the solution is presented as more suited to the development of EU law which, through the jurisprudence of the CJEU – and in particular the Centros, Uberseering, Inspire Art and Polbud judgments – and some regulations – such as European Regulation n° 2157/2001 on SE (see here), tends to favor the registered office as a connecting factor.

Although it is not unaware of the risk of law shopping, the HCJP considers that this risk should not be overestimated since the laws of the EU’s Member States have “a common base” because of the European directives adopted on corporate matters, which is likely to prevent a “race to the bottom”. Moreover, the transfer of registered office from one Member State to another is still difficult, which is an obstacle to law shopping.

Proposed new texts

The HCJP recommends amending the Civil Code, and in particular Article 1837, and repealing Article L. 210-3 of the Commercial Code.

The new bilateral conflict-of-law rule, applicable to all companies with legal personality, is set out in Article 1837, paragraph 1, of the Civil Code. It provides that the company would be governed by the law of the State in which it has its statutory seat – or registered office. Rather than a reference to the company’s incorporation, this formulation is chosen because it would ensure terminological continuity with the current Article 1837 and would model the French conflict-of-law rule on that of the European Regulation on the SE.

Besides, the HCJP devotes paragraph 2 of Article 1837 to companies without statutory seat. For these companies, the conflict-of-law rule would be inspired from the solutions provided by the Rome 1 Regulation: the applicable law would be the law chosen by the partners or, in the absence of choice, the law of the country with which the company is most closely connected.

The proposed Article 1837 reads:

Article 1837 du Code civil

La société est régie par la loi de l’État dans lequel elle a son siège statutaire.

À défaut de siège statutaire, la société est régie par la loi choisie par ses associés ou, à défaut de choix, par la loi de l’État avec lequel elle présente les liens les plus étroits.  

The HCJP proposes also to introduce a new article 1837-1 of Civil Code devoted to the lex societatis’ scope of application, inspired from Swiss law. The aim is to increase the readability and, as a result, the attractiveness of French law. A list of questions falling within the scope of lex societatis would be drawn, this list being non-exhaustive as suggested by the use of the French adverb “notamment” (which can be translated by “in particular”).

The proposed Article 1837-1 reads:

Article 1837-1 du Code civil

La loi applicable à la société en vertu de l’article précédent régit notamment : a) la nature juridique de la société ; b) la capacité juridique de la société ; c) la dénomination ou la raison sociale ; d) la constitution de la société ; e) la nullité de la société, ainsi que celle des délibérations sociales ; f) la dissolution et la liquidation de la société ; g) les opérations emportant transmission universelle de patrimoine et le transfert du siège statutaire ; h) l’interprétation et la force obligatoire des statuts ; i) la modification des statuts, en particulier la transformation de la société ; j) l’organisation et le fonctionnement de la société, ainsi que sa représentation ; k) les droits et obligations des associés ; l) la preuve, l’acquisition et la perte de la qualité d’associé ; m) la détermination des titres susceptibles d’être émis par la société ; n) la détermination des personnes responsables des dettes sociales et l’étendue de leur responsabilité ; o) la responsabilité civile encourue en cas de violation des règles gouvernant la constitution, le fonctionnement ou la liquidation des sociétés, ou d’obligations statutaires. 

In addition, the HCJP considers the introduction of an Article 1837-2 which includes a substantive rule aiming at protecting “French” contracting parties of foreign companies. More precisely, the legal or statutory restrictions on the capacity or the powers of the representatives of a company under foreign law, which would produce effect in external relations according to the foreign law, would be unenforceable against “French” co-contractors, as long as they are of good faith. This rule aims mainly to protect the co-contractors of companies incorporated outside EU – such as American companies which apply the ultra vires doctrine ; the risk is indeed lower in EU, thanks to the protective regime of directive 2017/1132/UE (see here).

The proposed Article 1837-2 reads:

Article 1837-2 du Code civil  

Les restrictions légales ou statutaires à la capacité juridique ou aux pouvoirs des représentants d’une société de droit étranger concluant un acte juridique en France qui, selon la loi régissant la société, produiraient effet dans ses relations externes, sont inopposables au cocontractant ayant légitimement ignoré ces restrictions. 

In conclusion, the HCJP’s “Report on the connecting factor of companies” appears to be a stimulating contribution for the modernisation of French international company law.

The EAPIL’s Young Research Network has just launched its latest research project, which is being led by Tobias Lutzi, Ennio Piovesani, and Dora Rotar. The project will focus on the national rules on jurisdiction in civil and commercial matters over non-EU defendants, in light of the report envisioned in Article 79 Brussels Ia Regulation.

As the project will primarily be based on national reports describing the situation in each Member State (structured by a detailed questionnaire), the organizers are currently looking for participants who would be interested in providing a national report for one of the following Member States: Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, and Sweden.

The full Call for Participants can be found here.

If you are a junior researcher (below full professor) or practitioner under the age of 45 and would like to receive information about similar projects before they are posted publicly, you can join the EAPIL Young Research Network by simply filling out this form.

The first issue of 2021 of the Netherlands Journal of Private International Law (Nederlands Internationaal Privaatrecht – NIPR) has been published. More information about the review is available here.

The following articles are included in the issue:

R. Vriesendorp, W. van Kesteren, E. Vilarin-Seivane and Sebastian Hinse on Automatic recognition of the Dutch undisclosed WHOA procedure in the European Union

On 1 January 2021, the Act on Court Confirmation of Extrajudicial Restructuring Plans (‘WHOA’) was introduced into the Dutch legal framework. It allows for extrajudicial debt restructuring outside of insolvency proceedings, a novelty in the Netherlands. If certain requirements – mostly relating to due process and voting – are met, court confirmation of the restructuring plan can be requested. A court-confirmed restructuring plan is binding on all creditors and shareholders whose claims are part of that plan, regardless of their approval of the plan. WHOA is available in two distinct versions: one public and the other undisclosed. This article assesses on what basis a Dutch court may assume jurisdiction and if there is a basis for automatic recognition within the EU of a court order handed down in either a public or an undisclosed WHOA procedure.

T. Arons, Vaststelling van de internationale bevoegdheid en het toepasselijk recht in collectieve geschilbeslechting. In het bijzonder de ipr-aspecten van de Richtlijn representatieve vorderingen (in English, Determination of international jurisdiction and applicable law in collective dispute resolution. In particular, the PIL aspects of the Representative Actions Directive)

The application of international jurisdiction and applicable law rules in collective proceedings are topics of debate in legal literature and in case law. Collective proceedings distinguish in form between multiple individual claims brought in a single procedure and a collective claim instigated by a representative entity for the benefit of individual claimants. The ‘normal’ rules of private international law regarding jurisdiction (Brussel Ibis Regulation) and the applicable law (Rome I and Rome II Regulations) apply in collective proceedings. The recently adopted injunctions directive (2020/1828) does not affect this application. Nonetheless, the particularities of collective proceedings require an application that differs from its application in individual two-party adversarial proceedings. This article focuses on collective redress proceedings in which an entity seeks to enforce the rights to compensation of a group of individual claimants. Collective proceedings have different models. In the assignment model the individual rights of the damaged parties are transferred to a single entity. Courts have to establish its jurisdiction and the applicable law in regard of each assigned right individually. In the case of a collective claim brought by an entity (under Dutch law, claims based on Art. 3:305a BW) the courts cannot judge on the legal relationships of the individual parties whose rights are affected towards the defendant. The legal questions common to the group are central. This requires jurisdiction and the applicable law to be judged at an abstract level.

C. Bright, M.C. Marullo and F. J. Zamora Cabot, Private international law aspects of the Second Revised Draft of the legally binding instrument on business and human rights

Claimants filing civil claims on the basis of alleged business-related human rights harms are often unable to access justice and remedy in a prompt, adequate and effective way, in accordance with the rule of law. In their current form, private international law rules on jurisdiction and applicable law often constitute significant barriers which prevent access to effective remedy in concrete cases. Against this backdrop, the Second Revised Draft of the legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises has adopted a number of provisions on private international law issues which seek to take into account the specificities of such claims and the need to redress the frequent imbalances of power between the parties. This article analyses the provisions on jurisdiction and applicable law and evaluate their potential to ensure effective access to remedy for the claimants.

B. Van Houtert, Jurisdiction in cross-border copyright infringement cases. Rethinking the approach of the Court of Justice of the European Union (dissertation, Maastricht University, 2020): A summary

The starting point of this research are the three rulings in the Pinckney, Hi Hotel, and Pez Hejduk in which the CJEU particularly focused on the interpretation of ‘the place where the damage occurred or may occur’ – the Erfolgsort – for determining jurisdiction according to Article 7(2) Brussels Ibis. The Court developed three criteria for jurisdiction in cross-border copyright infringements cases: (1) the state of the court seised should protect the copyright relied on, the so-called locus protectionis criterion, (2) the ‘likelihood of damage’ criterion which means that it should be likely that the damage may occur in the state where the court is located, and (3) court’s jurisdiction will be territorially limited to assess the damage caused within the forum state. The dissertation proceeds to demonstrate the need to rethink the CJEU’s approach to jurisdiction in cross-border copyright infringement cases. Based on common methods of interpretation, the author examines the leeway that the CJEU has regarding the interpretation of Article 7(2) Brussels Ibis in cross-border copyright infringement cases. She also examines alternative approaches to jurisdiction in cross-border copyright infringement cases adopted by scholars and courts of EU Member States and states of the United States of America distilling three main approaches: the ‘copyright holder’s centre of interests’ approach; the ‘substantial damage’ approach; and the ‘directed activities’ approach. The last part of the dissertation suggests that a combined approach to jurisdiction can be adopted in the recast of the Brussels Ibis Regulation or a future EU Copyright Regulation. Van Houtert considers that the proposals can also be adopted at the international level as they satisfy common principles of private international law and copyright law. Additionally, several global issues are considered in the analysis carried out such as copyright havens, online piracy, the cross-border flow of information, international trade, and the trend of competing jurisdictional claims.

N. Touw, The Netherlands: a forum conveniens for collective redress? (Conference Report)

On the 5th of February 2021, the seminar ‘The Netherlands: a Forum Conveniens for Collective Redress?’ took place. The starting point of the seminar is a trend in which mass claims are finding their way into the Dutch judicial system. To what extent is the (changing) Dutch legal framework, i.e. the applicable European instruments on private international law and the adoption of the new Dutch law on collective redress, sufficiently equipped to handle these cases? And also, to what extent will the Dutch position change in light of international and European developments, i.e. the adoption of the European directive on collective redress for consumer matters, and Brexit? In the discussions that took place during the seminar, a consensus became apparent that the Netherlands will most likely remain a ‘soft power’ in collective redress, but that the developments do raise some thorny issues. Conclusive answers as to how the current situation will evolve are hard to provide, but a common ground to which the discussions seemed to return does shed light on the relevant considerations. When legal and policy decisions need to be made, only in the case of a fair balance, and a structural assessment thereof, between the prevention of abuse and sufficient access to justice, can the Netherlands indeed be a forum conveniens for collective redress.

On 14 June 2021, the Research Service of the European Parliament released a briefing paper related to the proposal for a regulation on a computerised system for communication in cross-border civil and criminal proceedings (e-CODEX system), authored by Rafał Mańko (EP Research Service).

The abstract reads:

The e-CODEX system is the digital backbone of EU judicial cooperation in civil and criminal matters. e-CODEX comprises a package of software products that allow the setting up of a network of access points for secure digital communication between courts and between citizens and the courts, while also enabling the secure exchange of judicial documents.

The project, which was launched in 2010 with EU grant funding, is managed by a consortium of Member States and other organisations and is coordinated by the Ministry of Justice of the German Land of North Rhine-Westphalia. Even though it is currently used by 21 Member States, e-CODEX lacks a clear, uniform and EU-wide legal basis. To remedy this situation, on 2 December 2020 the Commission put forward a proposal for an e-CODEX legal instrument (a regulation) to formally establish the e-CODEX system at EU level. The management of the project would be entrusted to eu-LISA (the EU Agency for the Operational Management of Large-Scale IT Systems in the Area of Freedom, Security and Justice).

Within the European Parliament, the LIBE and JURI committees are jointly in charge of the file, and the draft report is expected shortly.

The Briefing can be freely downloaded here.

Thanks to Jorg Sladic for the tip-off.

Professor Jürgen Basedow does not need any introduction.

A volume published by Intersentia, titled EU Private Law. Anatomy of a Growing Legal Order, summarises, updates and completes studies he has published since the late 1980s. It exists as e-book (although this is not a book to read on the screen, but to hold in the hands).

EU law covers numerous sectors of private law and is still expanding. Due to its fragmentary nature, most legal literature addresses specific areas such as EU labour law, EU company law, EU private international law, EU consumer law, etc. In contrast, this book presents an innovative approach in its analysis of EU private law, considering its continuous expansion as an ongoing process and interrogating some central questions: What is private law in the framework of the EU? How does EU private law relate to traditional concepts of private law? What is the impact on horizontal relations of the law of the Union which was established with a view to the integration of peoples in Europe? Is the frequent reference to the policy orientation of EU law sufficient to overcome the differences between public and private law?

Like the growth rings of a tree the numerous acts and judgments of EU private law feed from the trunk and the roots, which developed in the vertical relations between the Union and the Member States. The foundations of EU law, which often have a background in legal history, comparative experience and public international law, impact upon horizontal relations in a manner previously unknown in national systems of private law.

Across ten parts grouped in four books devoted to foundations, principles, enforcement and implementation, respectively, as well as the external dimension, the author elaborates on the peculiarities of EU private law as compared to the traditional analysis of private law in any given national legal system. The author traces throughout the book the origins of legal principles and rules in comparative law, legal history and public international law and their application and development in EU private law instruments and the judgments of the CJEU. This comparison helps to strengthen our understanding of those peculiarities and paves the way for a comprehensive critical assessment of the state of EU private law today.

The table of contents is accessible at the website of Intersentia.

A book like this one is good news for academia.