EAPIL blog

Giesela Rühl (Friedrich-Schiller-University Jena & Humboldt-University of Berlin) has posted Private International Law Post-Brexit: Between Plague and Cholera on SSRN.

The abstract reads:

Over the course of the last two decades, the European legislature has adopted a large number of regulations dealing with private international law. As long as the UK was a member of the EU these regulations were also applicable in the UK. However, now that Brexit has actually taken place, they only apply by virtue of the Withdrawal Agreement whereas they will cease to apply as soon as the transition period provided for in the Withdrawal Agreement expires. The following contribution takes this finding as an opportunity to take a closer look at the future relationship between the EU and the UK in private international law. It analyses the corresponding British proposals and argues that the relatively best option for both the UK and the EU would be the adoption of a new bilateral agreement that either provides for continued application of the existing EU instruments or closely replicates these instruments.

The paper is forthcoming in the Revue de Droit Commercial Belge/Tijdschrift voor Belgisch Handelsrecht.

 

Jurisdiction and enforcement of foreign judgments are separate issues in private international law. When arising outside of the context of international conventions, they are not necessarily related.

In principle, there is no obligation to enforce foreign judgments on the ground that, if the case had been litigated in the forum, the forum would have retained jurisdiction. Many states apply the same jurisdictional rules to assess whether to retain jurisdiction or to enforce a foreign judgment, but they have no obligation to do so, and many states assess the jurisdiction of foreign courts on a different basis.

The situation might be different in the context of an international convention. This is because the convention has established obligations as between the contracting states.

Where a convention contains both rules of international jurisdiction and recognition of foreign judgments, the issue does not arise. But many conventions only include one category of rules. They provide rules of international jurisdiction but are silent on the enforcement of the resulting judgments or, conversely, only provide rules of recognition and enforcement of foreign judgments (as, for instance, the 2019 Hague Judgments Convention).

Where a convention only contains rules of international jurisdiction, should it be considered that contracting states are under no obligation to enforce a judgment rendered by another contracting state on the basis of such rules? That would be quite problematic if the relevant rules of jurisdiction were both exclusive and narrow. A contracting state which would not enforce a foreign judgment might not have jurisdiction under the relevant convention to retain jurisdiction.

There are quite a few of such conventions in the field of international carriage. They include, for instance, the 1929 Warsaw and the 1999 Montreal Conventions for the Unification of Certain Rules Relating to International Carriage by Air.

In Rothmans v. Saudi Arabian Airlines, Mustill J. (as he was then) once gave his view on the reason why these conventions do not include rules on enforcement of judgements. He held:

International conventions of this kind tend to prescribe jurisdiction in narrow terms, on the assumption that the case where the defendant has insufficient assets to satisfy the claims in any of the stipulated countries is catered for by the ready availability of enforcement in other countries which is available via the various conventions on mutual recognition of judgments.

With all due respect, however, it is unclear to which “various conventions on mutual recognition of judgments” the distinguished judge was referring to.

A major issue for interpreting jurisdictional rules contained in international conventions as entailing obligations to enforce the resulting judgments is the strict rules of interpretation of treaties under the Vienna Convention on the Law of Treaties. But many of these private law treaties contain their own provisions on interpretation, which certainly derogate from the Vienna Convention.

The issue also arises in the context of the 2001 Cape Town Convention, which contains rules of international jurisdiction, but no rule of enforcement of judgments. In a recent article on Enforcement of Court Decisions Under the Cape Town Convention, I argue that the jurisdictional rules of the Convention should be considered as entailing rules on the enforcement of foreign judgments, and explore what these implicit rules could be.

The abstract of the article reads:

The purpose of this article is to explore the influence of the Cape Town Convention on the enforcement of foreign judgments. Although the issue is not expressly addressed by the Convention, the article argues that the jurisdictional rules of the Convention should be interpreted as entailing an implicit obligation to enforce the resulting judgments. After demonstrating that such conclusion would be consistent with the rules of interpretation of the Convention, the article explains what the regime of the implicit obligation to enforce judgments made under the Convention would be.

The paper, which can freely be downloaded here, was published in the latest issue of the Cape Town Convention Journal.

Due to the circumstances, all oral hearings at the CJEU scheduled until 25 May 2020 are postponed to a later date.

Regarding private international law, the judgment in C-641/18, Rina, a request for a preliminary ruling referred by the District Court of Genoa (Italy), will be read on 7 May  2020. The case requires the Court to address the relationship between a customary principle of international law on international immunity and Regulation No 44/2001 (Brussels I). The Court should as well reflect on the extent the answer to that question may be influenced by the interest in ensuring access to the courts. In his opinion of 14 January 2020, AG Szpunar concluded that

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

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

Rina will be a 1st Chamber decision (Bonichot, Silva de Lapuerta, Safjan, Bay Larsen, Toader), with judge Camelia Toader as juge rapporteur.

Ms Toader is also the reporting judge in joined cases C-267/19 PARKING – C-323/19, Interplastics, to be released on the same day. The cases correspond to identical requests for a preliminary ruling and for interpretation of the grounds of the CJUE’s judgments of 9 March 2017, Zulfikarpašić (C-484/15) and Pula Parking (C-551/15). The referring court (Commercial Court, Zagreb, Croatia) explains that

Although the Court’s position is clear and unequivocal as to the fact that, in Croatia, notaries are not entitled to issue writs of execution based on an authentic document, that practice, which is at odds with Regulation No 1215/2012, continues. Following the decision of the Court of 9 March 2017, notaries have issued more than one million writs of execution.

Then, at the courts’ level, there is a divergent application of the CJUE’s decision in Pula Parking, in that

for the most part, [the courts and tribunals of the Republic of Croatia] consider that the decision relates exclusively to enforcement proceedings conducted by notaries in which the party against whom enforcement is sought is a natural person and national of another EU Member State.

Therefore, the Zagreb court had thought it necessary to submit a request for a preliminary ruling, in order to determine “whether natural and legal persons from Croatia, as citizens of the European Union, are on an equal footing with natural and legal persons from other EU Member States, and whether foreign legal persons are on an equal footing with foreign natural persons as regards the application of EU law in the Republic of Croatia.”

The case will be decided (without AG’s Opinion) by Judges Safjan, Toader, and Jääskinen, sitting as 6th Chamber.

Finally, the Opinion of AG Saugmandsgaard Øe in C-59/19, Wikingerhof, will be known on 28 May 2020. For the record, the requests comes from the German Bundesgerichtshof, and a hearing had taken place last January. The CJEU has been asked to address (again) the boundaries between Article 7(1) and Article 7(2) of the Brussels I bis Regulation, in the context of an action to stop commercial practices considered to be contrary to competition law, covered by contractual provisions resulting from an abuse of a dominant position. The judgment will be a Grand Chamber one.

Tamás Szabados (ELTE Eötvös Loránd University, Budapest) is the author of Economic Sanctions in EU Private International Law, a book that has been recently published by Hart.

The blurb reads:

Economic sanctions are instruments of foreign policy. However, they can also affect legal relations between private parties – principally in contract. In such cases, the court or arbitration tribunal seized must decide whether to give effect to the economic sanction in question. Private international law functions as a ‘filter’, transmitting economic sanctions that originate in public law to the realm of private law. The aim of this book is to examine how private international law rules can influence the enforcement of economic sanctions and their related foreign policy objectives. A coherent EU foreign policy position – in addition to promoting legal certainty and predictability – would presuppose a uniform approach not only concerning the economic sanctions of the EU, but also with regard to the restrictive measures imposed by third countries. However, if we examine in detail the application of economic sanctions by Member States’ courts and arbitral tribunals, we find a somewhat different picture. This book argues that this can be explained in part by the divergence of private international law approaches in the Member States.

More information here.

A collection of essays titled Innovación Docente y Derecho internacional privado (Educational innovation and private international law) has recently been published by Comares. The editors are María Asunción Cebrián Salvat and Isabel Lorente Martínez (University of Murcia).

The abstract reads as follows.

Now more than ever, and particularly in an European context, private international law has a great impact on the professional life of law students, no matter the path that they choose. This book collects from a very practical perspective the contributions in educational innovation of several professors and lecturers of private international law. Through the successive chapters, the work shows some tools which are useful to face the challenge of adapting both this subject and the way of teaching it to the new demands of the 21st century law market. This market requires highly specialized professionals, capable of mastering new technologies and of applying them to the field of Law. In the different chapters of this work you can find the experiences of these professors, their proposals for adapting the content of the subject to suit the European Higher Education Area and their suggestive innovative methodologies (legal clinics, film viewing, use of the case method, use of legal dictionaries, debate, online forums…). These experiences have been tested in Spanish Law Faculties, but can be similarly applied in other European countries where private international law or international litigation are taught.

More information here.

Edward Elgar has just published Conflict of Laws and the Internet, by Pedro de Miguel Asensio has published.

The blurb reads:

The ubiquity of the Internet contrasts with the territorial nature of national legal orders. This book offers a comprehensive analysis of jurisdiction, choice of law and enforcement of judgments issues concerning online activities in the areas in which private legal relationships are most affected by the Internet. It provides an in-depth study of EU Law in this particularly dynamic field, with references to major developments in other jurisdictions. Topics comprise information society services, data protection, defamation, copyright, trademarks, unfair competition and contracts, including consumer protection and alternative dispute resolution.

More information available here.

Tiago Andreotti is the author of Dispute Resolution in Transnational Securities Transactions, a monograph published by Hart.

The Blurb reads:

This book explores the transnational legal infrastructure for dispute resolution in transnational securities transactions. It discusses the role of law and dispute resolution in securities transactions, the types of disputes arising from them, and the institutional and legal aspects of dispute resolution, both generally and regarding aggregate litigation. It illustrates different dispute resolution systems and aggregate litigation methods, and examines the legal issues of dispute resolution arising from transnational securities transactions. In addition, the book proposes two systems of dispute resolution for transnational securities transactions depending on the type of dispute: collective redress through arbitration and a network of alternative dispute resolution systems.

More information can be found here.

On 6 April 2020, the High Court of England and Wales handed down its judgment in the VW NOx Emissions Group Litigation. Besides many points of interest for owners of VW cars, it contains a new and rather unexpected development of EU private international law. In effect, the judgment significantly increases the role of administrative rulings in civil cross-border cases.

Background

The German Federal Motor Vehicle Authority (Kraftfahrzeugbundesamt) had written letters in 2015 regarding “defeat software”, by which VW vehicles recognised when they were being tested for compliance with emissions standards and consequently lowered performance. The letters were addressed to VW and demanded the removal of the software.

Although these administrative measures have prima facie no connection to the private law dispute pending before the High Court, Waksman J considered that he was bound by them (margin Nos 303-418). His main argument was by reference to the Framework Directive, which harmonises car type-approval in the EU (margin No 379). The German Federal Motor Vehicle Authority is the competent authority under the Directive for VW.

Binding Nature of Administrative Fact-Findings in Civil Proceedings

A critical point is that the letters did not contain any approval, but merely demanded the removal of certain software. Moreover, any determination that the software was illegal would be a matter of fact, and would not affect any order itself. It remains therefore questionable whether a court would be bound by this statement. Indeed, even German courts continue to disagree as to the statements’ effect in civil litigation.

Waksman J nevertheless thought to be bound by the letters for the following reasons (margin No 377):

No other approval authority [than the German authority] could make such an order [to remove the defeat software]. It would be very odd if Member States other than that in which the measures were ordered were not bound, so that authorities in those other Member States were left to decide what to do about it. This negates the objective of total harmonisation set out in Article 1 of the Framework Directive. It would enable a manufacturer in private proceedings in another Member State to argue that it was not in fact bound to take the measures ordered by the relevant approval authority because that authority got it wrong. But the manufacturer could only be prevented from making that argument if the order of the relevant approval authority was in fact binding throughout the EU.

Applicable Law to Binding Nature

In Waksman J’s view, the question regarding which orders are binding fell to be determined under local law which, in the case before him, was German law (margin No 380). As such, the orders were to be final and subject to appeal (id.). Their challenge would also be governed by German law according to the “local remedies rule” (margin No 383).

Duty of Sincere Cooperation

To buttress his position, Waksman J pointed to the duty of sincere cooperation under Article 4(3) of the Treaty on European Union (margin no 384). This would oblige the UK to follow this principle and grant mutual recognition to decisions under the harmonised approval regime until the end of the transition period, which is set to expire on 31 December 2020 (margin no 386). In his view, the duty of sincere cooperation implies a “principle of deference”, which would inhibit courts from second-guess the findings of another Member State’s authorities (margin nos 387-388). If it were open to courts to challenge the statements of the competent authority, this would run contrary the principle of full effectiveness (effet utile) of EU law (margin No 389).

Competition Law Analogy

Waksman J further drew an analogy with EU competition law (margin Nos 397-409), under which regulatory decisions by the Commission are binding on courts in civil proceedings (see Art 16(1) Regulation 1/2003). The fact that the letters in question were issued by a national authority and not by the Commission did not matter, because the German authority would have exclusive jurisdiction under the harmonised Framework (margin No 397).

Conflict-of-Laws Principles

Finally, Waksman J pointed out that, even if his analysis of EU law were incorrect, he would still be bound by the German authority’s findings under conflict-of-laws principles. The reason he gave for this view is extremely terse (margin No 419):

… even if the KBA decision did not bind directly as a matter of EU law, then, either as a matter of EU conflicts principles, or as a matter of English law, the question of its binding effect here must be decided by reference to German law being the local law of the KBA.

Assessment

The judgment is a bold and audacious leap forward. The CJEU has so far ruled that courts must take administrative decisions from other Member States into account (see CJEU, Land Oberösterreich v Čez). Furthermore, the Court has decided that courts cannot ignore legal situations created in other Member States  (see CJEU, Garcia Avello). But it has not considered fact-findings in administrative decisions to be binding in cross-border civil litigation. The position under competition law is different, as there is no provision comparable to Article 16(1) of Regulation 1/2003 in the Framework Directive for car type approvals.

There are strong reasons to give administrative rulings a more prominent role in civil law proceedings (see Lehmann, Regulation, Global Governance and Private International Law: Squaring the Triangle). The judgment goes very far in recognising administrative fact-findings as conclusive for private disputes. This raises a number of questions, Which findings are binding – only those that are relevant for the order, or also others? What if the authority had found that VW had not installed “defeat” software; would that also be binding on a foreign court? What happens if the administrative decision is withdrawn or annulled in court?

Irrespective of these doubts, one must welcome the High Court’s decision. If it were followed across the EU, contradictory rulings on civil liability for the violation of regulatory law could largely be avoided. In this sense, the judgment could help deeper harmonisation in the Single Market. It forcefully demonstrates that British courts still can make a signification contribution to European law despite Brexit.

— Many thanks to Marion Ho-Dac and Amy Held for their contributions to this post.

The author of this post is Eduardo Álvarez-Armas, Brunel University London and Université Catholique de Louvain.

As announced in this blog, Anne Peters, Sabine Gless, Chris Thomale, and Marc-Philippe Weller have recently published an interesting and topical paper entitled Business and Human Rights: Making the Legally Binding Instrument Work in Public, Private and Criminal Law.

The paper, a must-read for anyone interested in the Business & Human Rights field, is an enlightening assessment of several issues and recent developments in the area, and very valuable in its transversal approach to its themes, from the standpoint of several different branches of law.

However, the point the paper makes on the determination of the law applicable to torts arising from human rights violations before EU Member-State courts is open for discussion.

In this respect, the position sustained in the paper basically interprets Articles 4(1) and (3) of the Rome II Regulation in a manner that “replicates”, in respect of torts stemming out of a violation of human rights, what has been legislatively enacted in respect of environmental torts in Article 7 of the same Regulation: the enshrinement of the theory of ubiquity (with differences/different rationale with respect to Article 7(2) of the Brussels I bis Regulation, but still the theory of ubiquity, nevertheless), assorted with victim’s choice.

The following are some difficulties encountered by the said interpretative proposal.

The effet utile of Article 7

If Articles 4(1) and (3) could be interpreted the way suggested in the paper, what would be the effet utile of Article 7 then? Surely, the arguments put forward in respect of the interpretation of Articles 4(1) and (3) as regards human-rights violations also cover environmental torts, and therefore, there would have been no need to enact Article 7 to begin with (a provision which was very controversial during the Rome II legislative process).

The structure of Article 4 Rome II

As Article 4(3) is an escape clause, Articles 4(1) and (3) are not placed in an alternative/elective position, but are exclusive from each other. If Article 4(3) applies, then Article 4(1) does not (see notably Recital 18 of the Rome II Regulation). Human-rights-violation victims may try to plead Article 4(3) (a closer connection to another legal system) as a “getaway” from Article 4(1) if they believe that their circumstances allow them to do so. However, they cannot plead that they have a choice as such in choice-of-law terms between Articles 4(1) and (3). Having a free choice of applicable law in one´s hands (as environmental victims do in Article 7) is not the same as having to contend and prove a manifestly closer connection, as Article 4(3) would require.

The points put forward on legal arbitrage and race to the bottom in Prof. Weller’s blog reply to my first brief comment are sensible, and they sustain conceiving human-rights violations in supply chains as “complex torts” (“délits complexes”, “distantdeliktze”) where the action/omission takes place in the parent company’s headquarters and the result materializes in the “host country”. Therefore, as suggested, they may potentially sustain attempting to resort to Article 4(3) to plead for the closer connection to the law of the headquarters of the parent company (provided that evidence allows for it), but they do not seem to sustain an “ubiquity + choice by the victim” construction.

Indeed, I largely share Prof. Weller’s arguments on legal arbitrage and race to the bottom in respect of environmental torts (as a preview of an English monograph coming in 2021 in Hart’s Studies in Private International Law, see E. Álvarez Armas, “Contentieux du droit international privé pour responsabilité environnementale devant le juge européen : la détermination du droit applicable comme outil de gouvernance globale environnementale”, Annales de Droit de Louvain, Vol. 77-1/2017, pp. 63-87; and E. Álvarez Armas, “Daños al medioambiente y Derecho Internacional Privado Europeo: ¿Quid de la determinación de la ley aplicable como herramienta de gobernanza global medioambiental?”, Anuario Español de Derecho Internacional Privado, t. XVIII/2018, pp. 193–225). However, the core difference is that Art. 7, as it stands nowadays, structurally allows for these ideas, while Articles 4(1) and (3) do not.

The ratio legis of Article 4 Rome II

If the rationale of Article 4 of the Rome II Regulation was the protection of victims, then, as Articles 4(1) and (3) are general provisions, nothing would hinder any other victim of torts not specifically covered by “special” provisions(Articles 5 and following) from benefiting from the same construction. This would significantly hinder the foreseeability of the applicable law.

However, the policy rationale of Article 4, as the main provision in the Regulation, is not the protection of victims, but “a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage” and “the foreseeability of court decisions”, as explained by Recital 16 of the Rome II Regulation. More specifically:

[a] connection with the country where the direct damage occurred (lex loci damni) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability.

These ideas can be tracked back to the explanatory memorandum to the Rome II Proposal, where the EU Commission repeatedly refers to “foreseeability” and “certainty” in the determination of the applicable law, explicitly rejects the theory of ubiquity as a potential general solution to be enshrined in the Regulation’s main rule (p. 11 – penultimate paragraph) and concludes (pp. 11-12) that

[t]he rule also reflects the need to strike a reasonable balance between the various interests at stake. The Commission has not adopted the principle of favouring the victim as a basic rule, which would give the victim the option of choosing the law most favourable to him. It considers that this solution would go beyond the victim’s legitimate expectations and would reintroduce uncertainty in the law, contrary to the general objective of the proposed Regulation. The solution in Article [4] is therefore a compromise between the two extreme solutions of applying the law of the place where the event giving rise to the damage occurs and giving the victim the option.

Precisely, as an exception, the explicit ratio legis of Article 7 Rome II (per Recital 25) is not to protect, but even to favour the victim (favor laesi) by allowing her the prerogative of choosing the applicable law.

Overall, the arguments put forward in the paper may sustain de lege ferenda that an Art. 7 bis be added to Rome II, enshrining the theory of ubiquity and victim’s choice in respect of torts arising from the violation of human rights. However, the current text of the Regulation does not seem to comfort the paper´s interpretative proposal.

Anatol Dutta and Wolfgang Wurmnest edited a book on European Private International Law and its ramifications with treaties signed by EU-Member States with third countries. The publication focuses on inheritance matters, i.e. Regulation (EU) No 650/2012 on matters of succession.

The national reports prepared feature Austria, Belgium, Croatia, The Czech Republic, Finland, Sweden, France, Germany and Italy from the EU. Reports from Bosnia and Herzegovina, Serbia, North Macedonia and Montenegro, Iran, Switzerland and Turkey, cover some non-EU jurisdictions. The third and last part of the publication features articles from the editors: Prof. Dutta approaches the issue from the perspective of the European Union, whereas Prof. Wurmnest offers a Comparative Report and Policy Perspectives.

The compilation of treaties listed in the Annex, presented in English translation, is undoubtedly giving added value to the book.

The work done by editors and authors, and the future plans of the endeavor, namely to cover wider aspects of European Private International Law, deserves our gratitude for providing us with very interesting material in the field.

More information on the publication is available here.

The sixth edition of Derecho de los Negocios Internacionales, a treatise on international business law authored by José Carlos Fernández Rozas, Rafael Arenas García and Pedro Alberto De Miguel Asensio, was published in March 2020 by the Spanish publisher Iustel.

The new edition is arranged into the following sections: Regulating Cross-Border Business Activities; Intellectual Property, Unfair Competition and Antitrust; Company Law; International Commercial Contracts; Sale of Goods and Transport; Means of Payment, Guarantees and Financing; Distribution Contracts, Transfer of Technology and E-Commerce; Insolvency Proceedings and International Commercial Arbitration.

See here for more information, and here to access the extended table of contents.

Brexit and its legal consequences was the topic of an earlier post in this blog, suggesting the United Kingdom should join the Lugano Convention. The British government has now taken the first step in this direction.18

The UK’s Application for Accession

On 8 April 2020, the UK deposited an application to accede to the Lugano Convention with the Swiss Federal Council as the depositary of the Convention (Article 69(2) Lugano Convention). In accordance with Article 72(2) of the Lugano Convention, the information was transmitted to the Contracting Parties. Enclosed as Annex A was the information required under Article 72(1) of the Convention, amounting to 41 pages. The necessary French translation (Article 70(2) Lugano Convention) is still missing.

Switzerland requested to convene a meeting of the Standing Committee in accordance with Article 4(2) of Protocol 2 to the Convention. The Signatories of the Convention (the EU, Denmark, Iceland, Norway and Switzerland) now have to decide whether to grant the application. According to Article 72(3) Lugano Convention, they shall endeavour to give their consent at the latest within one year.

The Situation During the Transition Period

Already on 30 January 2020, the Swiss Federal Council informed the Signatories of a document it had received titled Annex to the Note Verbale on the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community. The objective of this Annex is to secure the UK’s continued treatment as a party to the Lugano Convention during the transition period, which runs from 1 February 2020 to at least 31 December 2020, subject to a further extension for up to one or two years.

The Annex to the Note Verbale first sets out some principles of the Withdrawal Agreement concluded between the EU and the UK. In particular, it recalls that the “Withdrawal Agreement encompasses international agreements concluded by the Union” (point 4 Annex). In relation to the EU and Euratom, the UK is bound by these international agreements during the transition period (Art 129(1) Withdrawal Agreement). Furthermore, the Withdrawal Agreement provides that the EU notifies parties to international agreements that the UK is treated by the Union as a Member State for the purposes of these international agreements (point 5 Annex).

After recalling these principles, the Annex to the Note Verbale adds the following sentence (point 6 Annex):

It is understood that the principles set out in this Annex also extend to international instruments and arrangements without legally binding force entered into by the Union or Euratom and to international agreements referred to in point 4 above which are provisionally applied.

The Swiss Federal Council has asked the Signatories to consent to the Note Verbale, which the EU has already done. If the other Signatories agree as well, the Lugano Convention could remain binding on all parties during the transition period. Unfortunately, the outcome of the process is unknown, which creates unnecessary uncertainty.

Back to the Past?

The UK’s application to accede to the Lugano Convention is the strongest indication yet that the UK wishes to continue participating in judicial cooperation in Europe. There are important voices against the UK’s accession to the Convention. Without it, though, those seeking legal protection will encounter obstacles in the enforcement of British judgments on the European continent, and vice versa. It therefore seems better the UK’s request would be granted.

On 25 and 26 September 2020, the University of Bonn will host a conference titled The 2019 Hague Judgments Convention: Prospects for Judicial Cooperation in Civil Matters between the EU and Third Countries.

The conference focuses on the Hague Convention of 2 July 2019 on the recognition and enforcement of foreign judgments in civil and commercial matters, and is organised by Moritz Brinkmann, Nina Dethloff, Matthias Lehmann, Philipp Reuss and Matthias Weller.

The event is organised in cooperation with the Permanent Bureau of the Hague Conference on Private International Law (HCCH), the Zentrum für europäisches Wirtschaftsrecht at the University of Bonn and The International Litigation Exchange (ILEX). Dr Christophe Bernasconi, Secretary General of the HCCH, will give a welcome note (via video message), while Dr Ning Zhao, Senior Legal Officer, HCCH, will provide an overview of the genesis of the Convention, and Dr João Ribeiro-Bidaoui, First Secretary, HCCH, will conclude the event with summary remarks.

Speakers include Hans van Loon (Former Secretary General of the Hague Conference on Private International Law), Pietro Franzina (Catholic University of Milan), Xandra Kramer (Erasmus Universiteit Rotterdam), Wolfgang Hau (Ludwig-Maximilians-Universität Munich), Francisco Garcimartín Alférez (Autonomous University of Madrid), Colin Brown (to be confirmed) and Andreas Stein (both European Commission), Jan Teubel (German Ministry of Justice), Heiko Heppner (ILEX), Paul Beaumont (University of Stirling), Marie-Elodie Ancel (University of Paris-Est Créteil), Pippa Rogerson (University of Cambridge), Ilija Rumenov (Ss. Cyril and Methodius University), Veronica Ruiz Abou-Nigm (University of Edinburgh), José Angelo Estrella-Faria (Former Secretary General of UNIDROIT, Senior Legal Officer UNCITRAL Secretariat, International Trade Law Division Office of Legal Affairs, United Nations).

The programme of the event can be found here. Looking forward to meeting as many as possible of you in Bonn!

Giesela Rühl (University of Jena) has posted Smart (Legal) Contracts, or: Which (Contract) Law for Smart Contracts? on SSRN.

The abtract reads:

The law applicable to smart contracts is a neglected topic. At times it is even discarded as irrelevant or unnecessary. In fact, many authors claim that smart contracts especially when stored and executed with the help of blockchain technology make contract law and, in fact, the entire legal system obsolete. “Code is law” is the frequently (mis-) cited catchphrase. In the following chapter I will challenge this view and argue, first, that smart contracts need contract law just as other, traditional contracts, and, second, that the applicable contract law can – at least in most cases – be determined with the help of the traditional rules of private international law.

The paper is forthcoming in Benedetta Cappiello & Gherardo Carullo (eds.), Blockchain, Law and Governance, Springer.

The latest issue of the International and Comparative Law Quaterly was just released.

It includes an article written by Matteo Winkler (HEC Paris) on Understanding Claim Proximity in the EU Regime of Jurisdiction Agreements. The abstract reads:

The Brussels I Recast Regulation entitles business actors to agree on which court(s) will have jurisdiction but restricts the effectiveness of such jurisdiction agreements to disputes ‘which have arisen, or which may arise, in connection with a particular legal relationship’. This article fills a gap in the academic literature by examining the content and implications of this necessary connection (proximity) between the claim and the legal relationship between the parties. First, it characterises claim proximity as a question of party autonomy by distinguishing it from the subject matter of the jurisdiction agreement, which is an issue of contract interpretation. Second, it scrutinises the foreseeability test which has been frequently used by the CJEU in order to determine claim proximity, highlighting its main operational aspects. Building on both theoretical considerations and some cases where the foreseeability test has been used by domestic courts, this article provides clarifications about the scope, the proper functioning and the limits of such a test in order to raise awareness regarding the difficulties that may arise in its use in court to determine claim proximity and therefore assess jurisdiction.

On 27 February 2020 the Court of Justice rendered its ruling in Corporis (case C-25/19), a case regarding the interpretation of Solvency II Directive and the Service Regulation.

The Court held that Article 152(1) of the Directive, read in conjunction with Article 151 of the same text and Recital 8 of the Service Regulation (pursuant to which the Regulation ‘should not apply to service of a document on the party’s authorised representative in the Member State where the proceedings are taking place regardless of the place of residence of that party’), must be interpreted as meaning that the appointment by a non-life insurance undertaking of a representative in the host Member State also includes the authorisation for that representative to receive a document initiating court proceedings for damages in respect of a road traffic accident.

Stefano Dominelli provided an account of the ruling in Conflictoflaws. By this post, I would like to add some comments on the issues discussed by the Court.

The ‘novelty’ of the judgment

In general terms, Corporis brings owls to Athens. The Court had already made its point in 2013, in the ruling concerning the Spedition Welter case. It stated then that Article 21(5) of the Motor Insurance Directive must be interpreted as meaning that the claims representative’s sufficient powers must include authority validly to accept service of judicial documents necessary for proceedings for settlement of a claim to be brought before the court having jurisdiction.

The difference between the two cases lies in the content of the preliminary request: unlike the German court in the former case, the Polish court that made the request in the latter case additionally brought the Service Regulation into the picture.

The Court’s findings however remain basically the same. This is somehow evidenced by the fact that the Court considered it could proceed to judgment without the Advocate General’s opinion.

Actually, some domestic courts have already issued judgments going in the same direction. See in particular the ruling of the Portuguese Supremo Tribunal de Justiça of 4 July 2019, and the ruling of the Tribunal da Relação de Guimarães of 17 November 2016 ( which are available through this database), and the ruling of the Landgericht Saarbrücken of 11 May 2015, reproduced in IPRax, 2015, 567. I’m sure there are more, but for the time being I managed to trace the above. Any feedback from other jurisdictions is more than welcome.

The notion of the ‘authorized representative’

Hence, in Corporis the Court reiterates its original views. It does not shed light to the overall question, i.e. what constitutes an authorized representative: first, because it had not been asked to do so, and second, because this seems to be an issue for the national courts to decide.

At least this is the common understanding among courts and scholars.

The fact is, however, that this situation comes, potentially, at a cost for the proper application of the Service Regulation. Burkhard Hess warned about the pitfalls nearly 20 years ago (Die Zustellung von Schriftstücken im europäischen Justizraum, NJW, 2001, 22).

Neither the predecessor of the current Service Regulation (Regulation No 1348/2000) nor the Service Convention drawn up by the Council of the European Union in 1997 (and never entered into force) referred to ‘authorized representatives’. The notion was also missing in the original 2005 Commission’s proposal to amend Regulation No 1348/2000.

The term only appeared in 2006, in the Commission’s proposal that replaced the latter proposal, without any further information. Thomas Rauscher indicates that it was added to solve a problem which appeared in the Dutch legal order. I understand that the introduction came as one of the 35 proposed amendments by the Rapporteur of the European Parliament. To sum up, there’s no clear indication of the rationale which led to the inclusion of the notion into the preamble.

What is noteworthy however, is that the term nay not be treated as equivalent to that of a representative ad litem, as referred to in Article 40(2) of Regulation No 44/2001 (Brussels I). The language employed to in the Service Regulation and in the Brussels I Regulation are not the same: the German version of the two texts refers, respectively, to ‘Bevollmächtigter’ and ‘Zustellungsbevollmächtigter’; the Spanish version refers to ‘representante autorizado’ and ‘mandatario ad litem’; the French version employs ‘représentant mandaté’ and ‘mandataire ad litem’, etc.

The issue under the forthcoming amended Service Regulation

On 31 May 2018, the Commission presented a proposal for a Regulation amending the Service Regulation, which is currently under discussion.

In this framework, the Commission suggested, inter alia, to move the text that is currently included in Recital 8 to Article 1. This change reflects the importance given to the matter, in light of the Alder case, where the CJEU held that the Service Regulation precludes Member States form providing in their legislation that judicial documents addressed to a party whose place of residence is in another Member State are placed in the case file, and deemed to have been effectively served, if that party has failed to appoint a representative who is authorised to accept service and is resident in the State where the judicial proceedings are taking place.

Although the proposal was accepted by the Council, the European Parliament refused to abide. Hence, the second exception to the application of the Regulation will most probably remain ‘hiding in the bushes’…

Extending the boundaries of the judgment

Notwithstanding the above, the judgment of the CJEU in Corporis paves the path to an extensive protection of other parties.

In paragraphs 41-44, the Court accentuates the difficulties faced by the victims of road traffic accidents. For those (insured) persons, the Brussels I Regulation has granted a forum actoris. Now the Court provides them with yet another benefit, i.e. the possibility to serve proceedings within the forum, and without attaching a costly translation.

De lege ferenda, the same level of protection could be granted to other recognized categories of weak(er) parties, such as consumers and employees, in their capacity as claimants against sellers, service providers, or employers.

Beyond insurance companies, one could think of foreign pharmaceutical companies, air carriers, car industries, social network giants, and the like. The fact that the above enterprises did not grant explicit powers to their representatives to receive judicial documents on their behalf shouldn’t be an impediment anymore. This is at least the implication of the CJEU in the Corporis case.

María Asunción Cebrián Salvat and Isabel Lorente Martínez (both from the University of Murcia) have edited a collection of essays in Spanish titled Protección de menores y Derecho internacional privado (Child Protection and Private International Law), published by Comares.

The abstract, kindly provided by the editors, reads as follows.

More and more frequently, families live a highly international life. Children move with their parents, travel and live in different States. Consequently, there has been an exponential growth of international legal disputes in which minors are involved. Legal operators shall be prepared to provide legal solutions to the private international law challenges of these cases and thus, to satisfy the best interest of the child in the specific case. This work brings together a collection of essays dealing with the hot spot areas of private international law in which minors play the major role. Some of these studies address the latest developments of institutions like the protection of unaccompanied minors, adoption, child abduction, rights of custody and rights of access, kafala, surrogacy, online contracts, sports, child workers, fatherhood recognition, family reagrupation… Others deal with the principles underlying the protection of minors in private international law (the “habitual residence of the child” connection, the need of urgent procedures, State cooperation…). Topics are addressed from an European and Spanish Private International Law perspective and written by a renowned team of private international law scholars and practitioners.

For more information, see here.

Confinement has severely curtailed our freedom of movement, but it has certainly not put an end to disagrements and disputes.

Citizens and businesses needing to take procedural action in a cross-border case may be unable to do so due to emergency measures taken in an EU Member State in order to counter the spread of the COVID-19 virus.

These measures may result in the complete or partial suspension of the work of courts and authorities; the temporary inability to obtain legal aid; difficulty to access information normally provided by the competent authorities; other practical issues, for instance delays in enforcing a decision in a cross-border context or in serving a judicial document; temporary adjustments in terms of communication with the public (by email, by phone or by postal mail).

With this is mind, the e-Justice Portal has opened a page aiming to provide an overview of temporary measures taken within the European Union in relation to the COVID-19 virus. The page gives access to a table (pdf document) with information provided by the EJN contact points – and the usual disclaimer: ‘If you need additional information, please consult the webpages of the Ministry of Justice of the Member State for which you need information’

As the situation is changing rapidly and information on this topic is still evolving, the page is updated regularly to reflect new developments.

The EAPIL blog hosts an ongoing on-line symposium aimed to explore the impact of the coronavirus crisis on the phenomena of mobility and exchange that form the constituent elements of private international law, and to discuss the responses that private international law rules provide to the challenges posed by the crisis itself. Contributions on this topic have been proposed so far by Giovanni Chiapponi, Matthias Lehmann and Tomaso Ferando. Those interested in proposing a guest post for publication on these issues are encouraged to contact the blog’s editorial team at blog@eapil.org. 

On 2 April 2020, the conclusions of Advocate General Sánchez-Bordona in Verein für Konsumenteninformation v Volkswagen (Case C-343/19) were published. They add a new piece to the puzzle of locating purely economic loss – a much-discussed issue which was recently considered in this blog.

Facts

The case concerned a request by the Landesgericht Klagenfurt (Regional Court in Austria) for a preliminary ruling.  Austrian residents had purchased VW cars in their home country. Thereafter, it became known that the manufacturer had fitted the vehicles with illicit software which enabled them to flout emissions tests. Cars fitted with the software consequently dropped in market value. The buyers assigned their rights arising out of their losses to the Verein für Konsumenteninformation (VKI), an Austrian consumer protection association. VKI subsequently sued VW in Austria for damages. VW contested the jurisdiction of the Landesgericht Klagenfurt.

Legal issue

The request by the Landesgericht Klagenfurt for a preliminary ruling concerns the question of whether the Austrian courts have jurisdiction over VKI’s claim under Article 7(2) of the Brussels I bis Regulation. In cases of tort or delict, Article 7(2) confers special (meaning optional) jurisdiction on  the courts of the place where the harmful event occurred. The CJEU interprets “the place where the harmful event occurred“ as giving the tort victim a choice to sue either: (i) at the place of the event giving rise to the damage; or (ii) at the place where the damage occured. In the present case, the Austrian courts could only have jurisdiction under the second option.   Therefore, the crucial question was: where, on the present facts, did the damage ‘occur’ within the meaning of under Article 7(2) of the Brussels I bis Regulation.

Opinion of the Advocate General

Advocate General Sánchez-Bordona took the view that the damage occurred in Austria and that, consequently, the courts there had jurisdiction over the case under Article 7(2) of the Brussels I bis Regulation.

Legal standard

The Advocate General pointed to three well known precedents for determining the location of purely financial loss: Kolassa, Universal Music and Löber. In his view, these three CJEU judgments establish that the actual place where the damage occurred is only the starting point for determining the competent court. Thereafter, other specific circumstances of the dispute, taken as a whole would have to be considered (paragraph 56).

The Advocate General considered that such ‘other specific circumstances’ could include “1. factors relevant to the proper administration of justice and the effective conduct of proceedings; and 2. factors which may have served to form the parties’ views about where to bring proceedings or where they might be sued as a result of their actions.” (paragraph 67).

Further, the Advocate General pointed to the dual principles of proximity and foreseeability of the competent court, between which a reasonable balance must be struck (paragraphs 63-64).

Application to the present case

Applying these standards to the present case, the Advocate General opined that, in general, the location of the cars as tangible objects was irrelevant because it is unforeseeable (paragraphs 71-73). He instead considered the correct starting point for locating the loss to be the act through which the product became part of the victims’ patrimony, thereby causing the damage (paragraph 74). Hence, he identified the place of loss to be the place where the transaction for the purchase of the car was concluded (id.).

The Advocate General further viewed this location to be unaffected by the other specific circumstances of the case. In particular, the jurisdiction of the Austrian courts would have been foreseeable for the Defendant (paragraph 80).

Assessment

The result reached by the Advocate General is certainly agreeable. The purchasers of rigged cars should not be forced to start legal proceedings at the seat of the manufacturer. Rather, they should have the ability to sue the tortfeasor closer to their homes. The same place should also be used to identify the applicable law to their claims under Article 4 of the Rome II Regulation.

It may, however, be a little too simplistic to identify the place of loss as the place of the relevant sales transactions. This place is notoriously uncertain, fortuitous, and vulnerable to manipulation. The purchasers could, for instance, have met the vendor at a car fair, or they could have bought the cars in another country for tax reasons. Should this really determine the location of their loss? Moreover, ‘locating’ a sales transaction can be very tricky; for instance, in the case of purchases on the internet. For these reasons, the law of the place where the contract was concluded (lex loci solucionis) was largely ousted from the conflicts rules for contractual obligations. It would be paradoxical if it made a comeback through non-contractual obligations.

The other circumstances of the case should be taken more seriously. These other factors could, for instance, include the purchasers’ domicile and the place where they mostly use the cars. It is indeed a combination of factors that must be used in cases like the present one to determine the place where the damage occurred.

William S. Dodge (University of California, Davis) has published The New Presumption against Extraterritoriality in the Harvard Law Review.

Canons of statutory interpretation are sometimes said to promote continuity and stability in the law. Yet it is widely acknowledged that canons themselves often change. The presumption against extraterritoriality is a prime example. It evolved from a rule based on international law, to a canon of comity, to a tool for finding legislative intent. The presumption then fell into disuse for nearly forty years until it was reborn in EEOC v. Arabian American Oil Co. (Aramco) and substantially revised in Morrison v. National Australia Bank Ltd.

This Article makes three contributions. First, it describes the evolution of the presumption against extraterritoriality over two centuries, providing a detailed account of change in an important canon of interpretation. Second, the Article describes the new, post-2010 presumption, arguing — contrary to the conventional wisdom — that the current version of the presumption is superior to previous ones. Third, the Article addresses the problem of changing canons. It argues changing canons constitute a form of dynamic statutory interpretation, which imposes certain responsibilities: to justify the changed canon in normative terms, to explain the need for change, and to mitigate the transition costs.

The article can be freely accessed here.