EAPIL blog

Matthias Weller (University of Bonn) has posted The HCCH 2019 Judgments Convention: New Trends in Trust Management on SSRN.

The abstract reads:

On its 22nd Diplomatic Session on 2 July 2019, the Hague Conference on Private International Law concluded its Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. The adoption of this Convention completes intense efforts of the HCC and the participating State Parties since 1992. One of the controversial issues in the last steps before the adoption was what has been called, in other contexts, “trust management”. This concept refers to the question how to embark on meaningful judicial cooperation in civil matters with participating states whose administration of justice is perceived as not sufficiently trust-worthy by other participating states – the “real elephant in the room”. At the same time, judicial integration in civil matters is an indispensable part of regulating transnational trade relations. Undoubtedly, international commercial arbitration should have the fullest possible freedom and support. However, without any effective alternative, there is no “alternative” dispute resolution and no “freedom of choice”. Rather, nations and regions, particularly those trading within frameworks of economic integration and thus on an intensified scale, should strive for an “integrated approach”. Against this background, the text explores new trends of trust management of the new HCCH instrument.

The article was published in the Festschrift für Herbert Kronke zum 70. Geburtstag.

The EAPIL Blog hosts today two posts on the ruling of the Court of Justice in E.E., a case regarding the Succession Regulation decided on 16 July 2020. The firs post, by Matthias Lehmann, appeared this morning. The second post, by Carlos Santaló Goris, a research fellow at the MPI Luxembourg and a Ph.D. candidate at the University of Luxembourg, is featured below.

On 16 July 2020, the Court of Justice of the European Union (“CJEU”) delivered its sixth judgment on Regulation No 650/2012 (the Succession Regulation): C-80/19, E. E.

The preliminary reference allowed the CJEU to address several questions about the
Succession Regulation’s rules on jurisdiction, applicable law, and recognition and enforcement. It also gave the CJEU the opportunity to clarify certain elements of the Succession Regulation: some of them new (such as the determination of the habitual residence), others already familiar to the Court (e.g. are notaries ‘courts’ for the purposes of the Succession Regulation?).

E.E.’s mother – the deceased – was a Lithuanian national who, in 2013, got married to a German national and moved to Germany. The same year she made a will before a Lithuanian notary. In 2017, she passed away in Germany. E.E., also of Lithuanian nationality, requested a notary in Kaunas (Lithuania) to open the succession and issue a certificate of succession rights. The notary rejected the requests arguing the deceased was habitually resident in Germany: therefore, according to the jurisdictional rules of the Succession Regulation, it was up to German authorities to open the succession. E.E. challenged the notary’s refusal. The case ended up before the Supreme Court of Lithuania, which referred the following questions to the CJEU:

(1) Is a situation such as that in the case under examination — in which a Lithuanian national whose habitual place of residence on the day of her death was possibly in another Member State, but who in any event had never severed her links with her homeland, and who, inter alia, had drawn up, prior to her death, a will in Lithuania and left all of her assets to her heir, a Lithuanian national, and at the time of the opening of the succession it was established that the entire estate comprised immovable property located solely in Lithuania, and a national of that other Member State surviving his spouse expressed in clear terms his intention to waive all claims to the estate of the deceased, did not take part in the court proceedings brought in Lithuania, and consented to the jurisdiction of the Lithuanian courts and the application of Lithuanian law — to be regarded as a succession with cross-border implications within the meaning of [the Succession Regulation]?

(2) Is a Lithuanian notary who opens a succession case, issues a certificate of succession rights and carries out other actions necessary for the heir to assert his or her rights to be regarded as a ‘court’ within the meaning of Article 3(2) of [the Regulation]?

(3) If the second question is answered in the affirmative, are certificates of succession rights issued by Lithuanian notaries to be regarded as being decisions within the meaning of Article 3(1)(g) of [the Succession Regulation] and must jurisdiction for that reason be established for the purpose of issuing them?

(4) If the second question is answered in the negative, should the provisions of Articles 4 and 59 of [the Succession Regulation] be construed as meaning that Lithuanian notaries are entitled to issue certificates of succession rights without following general rules on jurisdiction and that such certificates will be held to be authentic instruments which also give rise to legal consequences in other Member States?

(5) Must Article 4 of [the Succession Regulation] (or other provisions thereof) be construed as meaning that the habitual place of residence of the deceased can be established in only one specific Member State?

Should the provisions of Articles 4, 5, 7 and 22 of [the Regulation] be construed and applied in such a way that, in the present case, in accordance with the facts as set out in the first question, it must be concluded that the parties concerned agreed that the courts in Lithuania should have jurisdiction and that Lithuanian law should be applied?

The CJEU addressed first whether a deceased may have more than one habitual residence for the purposes of the Succession Regulation. Indeed, in the case at hand, there were data suggesting that the habitual residence of the de cujus could have been located in two Member States: she had lived for a while in Germany when she passed away, but she held Lithuanian nationality and all her assets were in Lithuania. However, the CJEU made it clear that there can be only one habitual residence. A different answer would lead to a fragmented succession, something that the Succession Regulation aims at avoiding (para. 41).

Was the habitual residence of the deceased in Germany, or rather in Lithuania? The Regulation itself acknowledges that determining the place of habitual residence is not always easy. Some domestic courts have already struggled with this issue. The CJEU relies on the guidance offered by the Regulation’s Preamble, Recitals 23 and 24, inviting the referring court to consider both in order to establish the habitual residence of the deceased in the case at hand.

It is here submitted that by relying on the recitals, the CJEU has vested them with some kind of normative value. From now on, domestic authorities shall consider recitals 23 and 24 of the Succession Regulation when confronted with the need to determine the habitual residence of a deceased. Moreover, the Court’s reasoning indicates how to apply the recitals. First, the national authorities shall rely on Recital 23 to try and establish a close and stable connection with a Member State, taking into account both subjective factors (e.g., why the deceased lived in that Member State) and objective factors (e.g., how long the deceased spent in that Member State). Only if they fail can domestic authorities rely on Recital 24 and consider other data, such as the nationality or the location of the assets.

The CJEU was asked as well whether the succession of E.E.’s mother qualified as one with cross-border implications. Indeed, as the CJEU recalls, the Succession Regulation only applies to such successions (paras. 34 – 35). However, there is no definition of what the European legislator meant by ‘cross-border implications.’ In this sense, the CJEU states: “it must be assessed whether the succession has a cross-border nature due to the location of another element of it in a State other than that of the deceased’s last habitual residence” (para. 42). But what are these other elements? In a non-exhaustive manner, the CJEU referred to the location of the deceased’s assets in a Member State other than the one of habitual residence of the deceased (para. 43). Therefore, in the present case, the succession of E.E.’s mother would fall under the scope of the Regulation if Germany prevails as “habitual residence”, for the estate assets (an apartment) are located in Lithuania.

By contrast, if ultimately (very unlikely, though) the national court prefers Lithuania as place of habitual residence, both the assets and habitual residence would be located in the same Member State. Would the succession be a purely internal one, then? The question arises whether other factors confer a cross-border dimension to a succession; the E.E. judgment is of little help here. Instead, one should look at the AG Opinion, where reference is made as well to the heirs’ habitual residence as a significant element to determine the succession’s cross-border implications (para. 65). In the present case, both potential heirs (E.E. and his stepfather) had their habitual residence in Germany. Therefore, should the deceased’s habitual residence be deemed to be Lithuania, the succession would still be one of interest for the Regulation.

The referring court also asks whether Lithuanian notaries are “courts” within the meaning of the Succession Regulation. A positive answer would have meant that they are subject to the Succession Regulation’s jurisdictional rules. The question is not new for the CJEU. In C-658/17, WB, a similar one had been referred concerning Polish notaries. The CJEU answered in the negative: the Polish notaries lack “judicial functions” (para. 61), i.e., “the power to rule of [their] own motion on possible points of contention between the parties concerned“(para. 55).

The CJEU applied the same logic in E.E. It appears from its reasoning that Lithuanian notaries in functions like the one deployed in the case at stake are not courts within the meaning of Article 3 of the Succession Regulation (para. 53). However, the CJEU does not say it so in so many words, but leaves it to the referring court to decide (para. 54).

Since the CJEU follows WB, the same critical remarks the judgment has met within scholarly circles will probably apply to E.E.. The CJEU did not fully elaborate on the notion of court, but simply referred to one of the characteristics mentioned in Article 3(2). Additionally, the notion of “jurisdictional functions” retained appears to be inconsistent with C-20/17, Oberle, where the CJEU ruled that the issuance of a domestic certificate of succession by a German court was subject to the Succession Regulation’s jurisdictional rules, in spite of the fact that the proceeding were not “judicial” in the sense of WB (and, now, E.E.). Several scholars have expressed their surprise that a certificate of succession rendered by a German court fall within the Succession Regulation’s jurisdictional scheme, but one rendered by a Lithuanian or a Polish notary does not.

One may wonder whether E.E. was actually a suitable occasion to work out a comprehensive notion of “court”. True, in E.E., the question was formulated in slightly broader terms than in WB. In the latter, the referring court asked whether a Polish notary issuing a certificate of succession is a ‘court’. Conversely, in the latter, the referring court asked whether a Lithuanian notary was a court when it “issues a certificate of succession rights and carries out other actions necessary for the heir to assert his or her rights.” This notwithstanding, it seems that Lithuanian and Polish notaries are quite similar. Thus, it is not surprising that the CJEU followed the same approach. There might be better occasions to address the issue again.

The CJEU was also requested to determine whether a Lithuanian domestic certificate of succession was a judgment (if notaries are regarded as courts), or an authentic instrument (if notaries are not regarded as courts). The Court explored both possibilities:

Should the notaries be “courts” in the sense of the Regulation, they would be subject to its jurisdictional rules (para. 62), and the national certificate of succession would be a judgment within the meaning of Article (para. 63).

Conversely, if notaries are not ‘courts’, the certificate of succession would be an ‘authentic instrument,’ as long as it fulfils the characteristics imposed by the Succession Regulation on this type of instruments (paras. 72 – 73).

The CJEU’s outcome is hardly surprising considering that it had already explored this point in WB, on the Polish domestic certificate of succession.

In principle, under the Succession Regulation, the courts’ jurisdiction and the applicable law corresponds to the Member State of the deceased’s habitual residence. However, the Regulation grants a certain degree of autonomy to the deceased and to the heirs to opt for a different applicable law and another jurisdiction, respectively. This freedom is nonetheless limited: the deceased can only choose the law of the State his/her nationality (Article 22); the heirs can only opt for the courts of a Member State whose law had been chosen by the deceased (Article 5, Article 7). In E.E., the referring court was uncertain as to whether the deceased had actually opted for the law of her nationality, and the heirs for the jurisdiction of the Lithuanian courts.

Concerning the applicable law, E.E.’s mother had not expressly chosen the law of her nationality. Nonetheless, Article 83(4) of the Regulation creates a fiction according to which “if a disposition of property upon death was made prior to 17 August 2015 in accordance with the law which the deceased could have chosen in accordance with this Regulation, that law shall be deemed to have been chosen as the law applicable to the succession”. Since E.E.’s mother drew up her will before a Lithuanian notary in 2013 according to Lithuanian law, the fiction applies (para. 26) .

Lithuanian law being applicable, the referring court wondered if the potential heirs (E.E. and the deceased’s husband) had chosen the jurisdiction of Lithuanian courts. According to the Succession Regulation they could have done it through a choice-of-court agreement (Article 5); or through express declarations in which they accepted the jurisdiction of the court seized (Article 7). In the present case, unilateral declarations had been made by the deceased’s husband in Germany waiving any claim to the estate, consenting to the jurisdiction of the Lithuanian court and refusing to enter an appearance before it in the proceedings under way in that State. It is clear that these declarations do not amount to an Article 5 choice-of-agreement (para. 85); could they be an “express declaration” in the sense of Article 7? One more time, the CJEU leaves the question open, to be decided by the referring court. AG Campos Sánchez-Bordona went a step further, suggesting a flexible reading of the party’s autonomy. In his words, “it is appropriate to recall that the Regulation must not be read in such a way as to prevent parties from settling a succession out of court in a Member State which they have chosen, if that is possible under the law of that Member State” (para. 122).

E.E. will hardly be seen as a landmark case on the Succession Regulation. The main contribution/output of this judgment is the elaboration on an autonomous concept of “habitual residence”, based on the Preamble of the Regulation; and the characterization of Article 83(4) as a fiction, and not a presumption. Beyond that, the answer to the other questions is relatively basic, sometimes even disappointing . The CJEU either relies on what it had already said in previous cases without moving forward (e.g., Oberle; WB); or it paraphrases the text of the Succession Regulation. The referring court may find the AG’s Opinion more instructive than the judgment: something not unusual, and – even if not aimed at by the CJUE’s procedural and estructural rules- a good example of teamwork.

At any rate, E.E. remains an interesting case in that it reflects common difficulties faced by the domestic authorities when dealing with the Succession Regulation.

The EAPIL Blog hosts today two posts on the ruling of the Court of Justice in E.E., a case regarding the Succession Regulation decided on 16 July 2020. Matthias Lehmann and Carlos Santaló Goris, the authors of the two contributions, approach the judgment from different angles and express different views (the post by Carlos Santaló Goris will be out later today). Readers are encouraged to join the discussion!

Sometimes the Directorates for Legal Translations of the Court can take forever to translate a judgment into the other official languages. The bottleneck is increasingly the English language, as there seems to be a draught of English interpreters. An illustration of the phenomenon is the judgment in E.E. (Case C-80/19), which was rendered on 16 July 2020, and for which, to this day, no English translation is yet available.

This should not stop us from taking a closer look at the judgment. In fact, it is the first one to deal with several fundamental issues of the Succession Regulation. Let’s take them one by one after having recapitulated the facts.

A Lithuanian national had married a German national and lived with him in Germany. In 2013 she made a will before a notary in Lithuania, designating her son E.E. as her only heir. When she died, her estate basically consisted of a piece of real estate in Lithuania.

After the death of his mother, E.E. applied to a Lithuanian notary for a certificate of succession. The notary refused to deliver it on the ground that the deceased’s habitual residence had been in Germany. E.E. brought a claim against the notary before the Lithuanian tribunals. During the proceedings, the German spouse of the deceased declared to have no interest in the succession and agreed to the jurisdiction of the Lithuanian tribunals.

Based on these facts, the Lithuanian Supreme Court decided to refer a number of preliminary questions to the CJEU.

The first question raised related to the applicability of the Succession Regulation. The Lithuanian Supreme Court asked whether a succession like the one underlying the reference for preliminary ruling could be considered as having cross-border implications. The notion “succession with cross-border implications” is not used in the rules of the Regulation, but rather in its Preamble (Recitals 1, 7 and 67) as well as in the legal basis on which the Regulation was enacted (Art. 81 TFEU).

To ask whether a case like the present one has cross-border implications may seem factitious, given that the deceased had lived in Germany and owned an asset in Lithuania.

But the Lithuanian Supreme Court highlighted that despite having her last habitual residence in Germany, the deceased had never broken her links with her country of origin, where she had drawn up a will and were almost all her estate was located. The referring court therefore also raised the (fifth) question whether the habitual residence of the deceased can only be located in a specific Member State.

This implied the possibility of multiple habitual residences under the Regulation, which would have been ground-breaking indeed.

The CJEU takes the opportunity to underline that the Regulation is built on the concept of a single habitual residence of the deceased (para 40). Any other interpretation would lead to a fragmentation of the succession (para 41).

Unsurprisingly, the Court of Justice found that a succession has cross-border implications where the habitual residence of the deceased and her major assets were located in different Member States (para 45). One might even say that this is a paradigm case falling within the scope of the Regulation. Thus, the first and the fifth questions were essentially smokescreens which were easily dealt with by the court.

The next set of questions (2 to 4) concerned the jurisdiction of the notary to issue an authentic instrument of succession.

The CJEU first clarified helpfully that a Lithuanian notary is not to be regarded as a “court” within the meaning of Art. 3(2) of the Regulation because it does not have the right to exercise judicial functions (para 54). The only exception is where it acted pursuant to a delegation of power by a judicial authority or under the control of such an authority (para 55). The CJEU left it to the national court to ascertain whether this is the case.

If the notary is not to be regarded as a court – which seems highly likely –, she would not be bound by the rules on jurisdiction enshrined in Art. 4 to 19 of the Regulation (paras 66 and 80). In particular, she can issue a national succession certificate regardless of the habitual residence of the deceased (para 80).

The Court rightly emphasises in this context that the principle of unity of succession is not absolute (para 69). Nothing therefore stops authorities from different Member States to issue certificates regarding the same succession. Article 64 of the Regulation is an outlier because it concerns the European Certificate Succession, which indeed can only be issued by the authorities of one Member State (para 70).

Although the notary issuing a national certificate of succession is not bound by the rules on jurisdiction of the Regulation, the authentic instrument she issues under national law will have the same evidentiary effects in other Member States as it has in the Member State of origin (paras 75 to 77). This is clearly set out in Art. 59 of the Regulation, which has no link whatsoever to the provisions regarding jurisdiction in Art. 4 to 19 of the Regulation. National authentic instruments will therefore freely circulate within the Union independently of the Member State in which they are made.

 Perhaps the most interesting part of the decision (question 6) concerns the conditions of a choice of law in a will. The deceased had drawn up the will in Lithuania before the entry into force of the Regulation in 2015. The Court concludes that this disposition is deemed to be a choice of law under Art. 83(4) of the Regulation given that the will was made in accordance with Lithuanian law.

Interestingly, the Court bases the conclusion that the will was made “in accordance with Lithuanian law” on the simple fact that the will was made in Lithuania. No other conditions, such as an expression of the testator’s intent or an allusion or reference to the law of Lithuania in the text of the will, seem to be required.

This generous interpretation by the Court greatly facilitates the determination of a choice of law before the entry into force of the Regulation. In future cases, it will be sufficient to prove that the will has been made before a notary of a certain Member State in order to show that the deceased chose the law of this Member State.

Even bad references can make good law. The CJEU has used the opportunity of the somewhat confused reference for preliminary ruling by the Lithuanian Supreme Court to clarify some important issues regarding the Succession Regulation. In particular, it is now clear that a single habitual residence of the deceased has to be identified, that notaries issuing national certificates of succession are not bound by the rules on jurisdiction of the Regulation, and that wills made before a notary prior to the entry into force of the Regulation amount to a choice of the law of the notary’s Member State. If we could finally get this decision in English, the situation would be even clearer. 

A free webinar on Access to Justice in cross-border Litigation: Lugano v. the Hague will take place on 27 October 2020, at 12.00 CET, organised by the UK Law Societies Joint Brussels Office.

The webinar aims at exploring the implications of the UK leaving the EU system of enforcement and recognition of judgments in civil and commercial matters on access to justice for citizens.

In particular, the speakers will examine what the future relationship of the UK and EU regarding the enforcement of judgments in civil and commercial matters will look like under both the Lugano Convention and alternatively, The Hague Judgments Convention. The panel will discuss the consequences of both scenarios on citizens and businesses.

The panellists are Philip Thorsen (Partner at Mazanti-Andersen Korso Jensen, Copenhagen), Christopher Deacon (Partner at Stewart & Stewart, London) and Guido Callegari (Partner at De Berti Jacchia Franchini Forlani, Milan).

The discussion will be moderated by Diana Wallis (University of Hull, former President of the European Law Institute and former Vice-president of the European Parliament).

More details and advance registration here.

Joseph William Singer (Harvard Law School) has published a new casebook on the American Conflict of Laws (Choice of Law – Patterns, Arguments, Practices). As its titles makes clear, its focus is on choice of law, but the book also includes two chapters on Procedure and Constitutional Law which present issues related to jurisdiction and foreign judgments.

The book is different from other American casebooks on conflict of laws in many respects. For foreign scholars, the most important will probably be that it is far more readable and accessible. US casebooks typically offer extracts of cases followed by questions. This might be good to teach American students to think like a lawyer, but for those who will not attend the class, it is not easy to know what American law actually is. Singer summarises the cases instead, and offers comments and his own views on the development of the law.

In particular, the book is a great source on the trends of the emerging Third Restatement, that Singer presents and assesses. The Restatement is still very much a work in progress, but some chapters have now been approved by the council of the American Law Institute, in particular on choice of law and torts, and the drafts are not freely available. The book offers an excellent insight in the most recent version of December 2019, in particular the new choice of law rules on torts.

The book also promotes a different type of learning. More specifically, it promotes experiential learning through persuasion, and includes for that purpose 11 moot courts exercises.

This book provides a new way to learn about the topic of conflicts of law through experiential learning. Most books describe the approaches that have been adopted over time to decide conflicts of laws. This book describes those approaches and includes the emerging Third Restatement. To promote experiential learning, it does more: First, it explains patterns of cases so that students can fit new cases into established frames of reference. Second, it distinguishes between easy cases and hard cases so students can determine when a case cannot be easily resolved. Third, it provides detailed arguments that are typically made on both sides of hard cases that fit the typical patterns. Fourth, it concludes with moot court exercises that students could perform in class to practice advocacy in this field and judging.

With new requirements to provide students with experiential learning opportunities, this text enables any teacher to give students the tools they need to understand the issues in the field, the reasons why cases are hard, the arguments that are available on both sides, and justifications that judges can give for resolving cases one way or the other.

Finally, the book ends with a chapter addressing the issues arising out of the existence of Indian nations and tribal sovereignty in the US, which add 573 governments in the conflicts equation, and are typically neglected in US conflicts books.

A new commentary on the Brussels I bis Regulation, in Greek, has recently been published.

The book is edited by Paris S. Arvanitakis and Evangelos Vassilakakis, and forms part of a series devoted to the ‘Interpretation of European Regulations on Private and Procedural International Law’. The previous volumes in the series cover the Brussels II bis Regulation (2016), the Service Regulation (2018), and the Small Claims Regulation (2019) Regulations. Commentaries on the Succession and Maintenance Regulations are scheduled for publication in the near future.

Academics, judges and other practitioners contributed to the commentary to the Brussels I bis Regulation, including Eyangelos Vasilakakis, Paris S. Arvanitakis, Apostolos M. Anthimos, Panagiotis S. Giannopoulos, Ioannis S. Delikostopoulos, Stefania Kapaktsi, Vasileios Kourtis, Dimitrios Kranis, Salomi Mouzoura, Kyriakos Oikonomou, Ioannis Revolidis, Konstantinos Ir. Rigas, Christos Triantafyllidis, Antonios D. Tsavdaridis, Sofia Fourlari and Christina Chatzidandi.

More info available here (in Greek).

As announced earlier on this blog, the Working Group on International Property Law will hold a webinar on the suitability and feasibility of a European Regulation on International Property Law via Zoom on Tuesday, 20 October 2020 at 12:30 CEST.

The current members of the Working Group will shortly discuss the various facets of the topic. A discussion will follow, open to participants.

The programme of the webinar is as follwos:

• Teun Struycken (Amsterdam/Utrecht): The Significance of International Property Law (case study)
• Teemu Juutilainen (Turku): The Impact of Free Movement of Goods and Services on International Property Law
• Gilles Cuniberti (Luxembourg): The Impact of the Acquis Communautaire on International Property Law
• Janeen M Carruthers (Glasgow): Global Measures for the Unification of Private International Rules pertaining to Property
• Eva-Maria Kieninger (Würzburg): The Way Ahead: Topics and Goals of the Working Group

Use this link to attend the webinar (meeting ID: 722 581 7358; password is 493028).

Ilaria Viarengo and Francesca Villata (both University of Milan) have edited Planning the Future of Cross Border Families – A Path Through Coordination, which has just been published by Hart.

This book is built upon the outcomes of the EUFam’s Project, financially supported by the EU Civil Justice Programme and led by the University of Milan. Also involved are the Universities of Heidelberg, Osijek, Valencia and Verona, the MPI in Luxembourg, the Italian and Spanish Family Lawyers Associations and training academies for judges in Italy and Croatia. The book seeks to offer an exhaustive overview of the regulatory framework of private international law in family and succession matters. The book addresses current features of the Brussels IIa, Rome III, Maintenance and Succession Regulations, the 2007 Hague Protocol, the 2007 Hague Recovery Convention and new Regulations on Property Regimes. The contributions are authored by more than 30 experts in cross-border family and succession matters. They introduce social and cultural issues of cross-border families, set up the scope of all EU family and succession regulations, examine rules on jurisdiction, applicable law and recognition and enforcement regimes and focus on the current problems of EU family and succession law (lis pendens in third States, forum necessitatis, Brexit and interactions with other legal instruments). The book also contains national reports from 6 Member States and annexes of interest for both legal scholars and practitioners (policy guidelines, model clauses and protocols).

Authors include Christian Kohler, Thomas Pfeiffer, Rosario Espinosa Calabuig, Diletta Danieli, Mirela Župan, Martina Drventic, Carmen Azcárraga Monzonís, Pablo Quinzá Redondo, Guillermo Palao Moreno, Thalia Kruger, Jacopo Re, Stefania Bariatti, Elena D’Alessandro, Cristina González Beilfuss, Maria Caterina Baruffi, Paul Beaumont, Patrick Kinsch, Laura Carballo Pineiro, Andrea Schulz, Hrvoje Grubišic, Cinzia Peraro, and Marta Requejo Isidro.

More information here.

On 2 September 2020, the French Supreme Court for private and criminal matters (Cour de cassation) issued an interesting decision on both service of judicial documents and international jurisdiction (Cass., First Civil Chamber, 2 September 2020, no. 19-15.337, unreported).

Although elementary at first view, the case provides a good opportunity to discuss the global understanding and acceptance of European private international law rules by French courts.

Private investors living in France suffered financial losses following financial services contracts concluded with a company governed by English law, established in London. They sued the company before French courts. Despite an agreement conferring jurisdiction in favour of English courts provided for in the general conditions, the Parisian tribunal accepted its jurisdiction. The Parisian Court of appeal confirmed the judgement. The company appealed to the French Supreme Court.

First, the company disputed, on the basis of (inter alia) the Service of documents Regulation, the validity of the writ of summons which was served to the branch manager of the company in France, pursuant domestic procedural rules and not at its head office in London. Second, the company challenged the French jurisdiction by virtue of the jurisdiction clause, pursuant Brussels I bis Regulation, while the first judges had applied the French jurisdictional rules to invalidate the clause.

Were these two EU regulations the relevant legal basis in this case, instead of the domestic PIL rules?

Responding to the first litigious item, the French Supreme Court precludes the application of the Service of documents Regulation and confirms the decision of the Court of appeal. The presence in France of a representative of the foreign company eliminates the cross-border dimension of the transmission of documents. Therefore, the transmission of the writ of summons to the branch manager of the company in France was valid since it complied with French domestic procedural law. Then, regarding the competent jurisdiction, the validity of the agreement conferring jurisdiction shall be assessed pursuant Brussels I bis Regulation and not pursuant to national PIL. EU law prevails on national rules. The French Supreme Court invalidates the decision of the Parisian Court of appeal on that latter ground.

Behind these two legal issues, the case deals with the articulation between EU and national PIL rules. Despite the well-known principle of primacy of EU law, French judges still have difficulties to implement EU PIL. More globally, they are maybe not fully aware of the multilevel sources in the field and, in particular, how their articulation works

But why? How could we explain this “judicial malfunction” regarding EU PIL? Without being dramatic, nor prophetic, I would like to suggest two possible lines of thought.

The non-application of the Service of documents Regulation is not surprising regarding the case law of the French Supreme Court. The Commercial Chamber of the Court ruled exactly the same in 2012, regarding another London-based company having a representative in France (Comm. Chamber, 20 November 2012, no. 11-17.653). Domestic procedural rules on service of documents regain the upper hand thanks to the legal representation ad agendumin France. But the French Supreme Court does not give any explicit grounds for its ruling regarding EU law. The European Regulation is set aside without consistent legal explanations. It surely contributes to the lack of awareness of French judges regarding EU PIL instruments in procedural and cooperation matters.

Some scholars have mentioned an implicit reference to recital 8 of the Regulation, which lays down that it “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”. Recital 8 should provide for a kind of subsidiarity of the European regime on cross-border transmission of documents, vis-à-vis national rules.

However, the European Court of Justice had the opportunity to clarify the scope of this recital in Adler (C-325/11). The ECJ ruled that

from a systematic interpretation of the regulation […] [it] provides for only two circumstances in which the service of a judicial document between Member States falls outside its scope, namely (i) where the permanent or habitual residence of the addressee is unknown and (ii) where that person has appointed an authorised representative in the Member State where the judicial proceedings are taking place (para 24).

In order to support a uniform application of the regulation, the circumstances in which a judicial document has to be served in another Member State should not be conducted by reference to the national law of the Member State in which the proceedings take place (see paras 26-27). This is, however, the core reasoning of the French Supreme Court.

When should it be considered that the litigant (here the London-based company) has appointed an “authorised representative”? Should the manager of the branch of the company be considered a “representative” within the meaning of the Service of documents Regulation? In the end, the French Supreme Court could have referred a question to the Court of Justice. Its ruling takes the opposite direction.

At least, it shows that a legal explanation from the French Supreme Court of its solution would have not been superfluous.

On the contrary, when explaining why French PIL rules are not the relevant legal basis to control the validity of the prorogation, the French Supreme Court  takes a true educational approach towards  the lower courts (see already Civ. First Chamber, 23 January 2008, no. 06-21.898 under Article 23 of Brussels I regulation). The validity of the agreement conferring jurisdiction had to be assessed under Article 25 of the Brussels I bis Regulation, applicable to prorogations of jurisdiction in favour of the national Court of an EU Member State (including the UK at the time of the dispute) in civil and commercial matters.

Why did the lower courts did not apply EU PIL? Quite ironically, the absence of French PIL codification can be an explanation for the faulty reasoning of the lower courts. It should be recalled that the French rules of international jurisdiction do not formally exist. They are the result of an extension of the domestic territorial jurisdiction rules into international disputes (see Civ. First Civil Chamber, 30 October 1962, Scheffel). This could explain why the lower courts applied the French Civil Procedural Code, mixing up domestic and international disputes, and the related applicable procedural rules.

Such a basic legal mistake grounded on the oversight of EU PIL requires all the attention of the French expert group on French PIL codification recently created by the French Ministry of Justice. A future Code should probably recall that the validity of an agreement conferring jurisdiction in a cross-border relationship has to be assessed pursuant supra-national sources, in particular the 2005 Hague Convention and the Brussels I bis Regulation and, by default only, pursuant national PIL rules. Clarity regarding multilevel sources in PIL (and their articulation) is crucial for operational legal practice.

Last but not least, Brexit will add more complexity in such a case as it will require applying the 2005 Hague Convention instead of the Brussels I bis Regulation. The London-based company will have to be regarded as located in a third State which is a Contracting Party to the Convention (Article 26(6) of the 2005 Hague Convention).

French courts, get ready!

In a judgment of 3 June 2020, the Paris Court of Appeal ruled that sanctions issued by the Security Council of the United Nations (UN) or by the European Union (EU) are international mandatory rules which define French public policy. As a result, the court ruled that, in principle, an arbitral award violating such sanctions could be set aside by a French court.

In contrast, the court ruled that unilateral sanctions issued by the United States of America do not constitute French public policy. As French authorities have expressed their hostility against them, US sanctions obviously cannot be regarded as defining the most important values of the French state. An arbitral award failing to take them into consideration might not, therefore, be challenged before French courts.

The case was concerned with a gas storage contract to be performed in Yort-E-Shah, Iran. The initial contract was concluded in 2002 between an Iranian and a French company.  A number of letters of credit had been issued by various banks to guarantee the  performance of the contract. In 2008, a dispute arose between the parties. The Iranian party alleged various contractual breaches, terminated the contract and called the guarantees. The French party initiated proceedings before French courts to enjoin the banks from paying under the letters of credit, which were eventually dismissed (see the judgment of the French Supreme Court here).

The French party then initiated arbitration proceedings before an ICC tribunal in Paris arguing that the termination of the contract was illegal. The Iranian party made counterclaims. The tribunal allowed claims from both parties and, after setting them off, ultimately found in favour of the Iranian company.

The French company then initiated proceedings before French courts, arguing inter alia that the award was contrary to French public policy for failing to take into account applicable sanctions and should thus be set aside.

The first argument was that the arbitral tribunal had failed to apply UN Resolutions no 1737 of 23 December 2006, no 1747 of 24 March 2007 and no 1803 du 3 mars 2008. The Iranian party challenged the relevance of the UN resolutions for defining French public policy, arguing that UN resolutions are not directly applicable in France, were not implemented in the French legal order, and thus could not be considered as defining French public policy.

The court recognised that the UN resolutions were not directly applicable in France, and that they could not be characterised as French international mandatory rules. However, the court held that they were either foreign international mandatory rules, or  “genuinely international mandatory rules”. The court concluded by adding that, in any case, the objectives pursued by the UN, peace and international security, were essential values to the French state. In principle, therefore, arbitral awards violating UN sanctions would not comport with French public policy and could be set aside on this ground.

This wealth of reasons might reveal that none of them was particularly convincing.

The most unconvincing argument was certainly to distinguish between foreign international mandatory rules and mandatory rules of the forum. The purpose of the distinction is to grant discretion to courts to apply mandatory rules protecting the interests of foreign states. It seems hard, and pretty artifical, to establish a link between UN sanctions and certain states, but not others. A formalistic way of doing this would be to argue that UN sanctions would be non foreign mandatory rules only in the states which have not implemented them. Is that what the court means? If so, it should tell which foreign implementing legislation it is actually considering. And what if UN sanctions are not directly applicable in the vast majority of states? Are they foreign to everybody?

The concept of “genuinely international” mandatory rules (lois de police réellement internationales) is a reference to the idea that while arbitrators have no forum, and cannot be considered as more specifically bound by the mandatory rules of any given state, they should consider that they are the guardians of a genuinely international public policy composed of norms recognised as being of the utmost importance at a global level. The doctrine of “genuinely international public policy” (ordre public réellement international), or “genuinely international mandatory rules”, is a correction of the consequences of the delocalisation of arbitration promoted by the French law of arbitration. The reference to this doctrine in the context of court proceedings, however, raises a number of issues. First, the court implies that arbitral tribunals should be compelled to apply a rule which is not a French international mandatory rule, and that French courts would thus have no obligation to apply if the case was litigated in France. Second, while one can conceive that arbitrators do not have a forum and are thus not bound by the international mandatory rules of the seat of the arbitration, a French court does have a forum, and should thus care about French public policy.

Finally, the court explained that UN resolutions should be considered as defining French public policy because of the importance of the purpose that they served. The court ruled:

the aforementioned resolutions, in so far as they are intended to contribute to the maintenance or restoration of international peace and security, embody rules and values whose disregard must be considered to be incompatible with the French legal system and which therefore fall within the French concept of international public policy

International mandatory rules are defined by the importance of the purpose that they serve, so establishing the purpose of UN Resolutions in this context was no doubt important. Yet, one wonders whether the sole purpose of norms could make them international mandatory provisions irrespective of their enforceability in the relevant legal order.

The characterisation of EU sanctions contained in Regulations (EC) no 423/2007, (EU) no 961/2010 (EU) no 267/2012 was much simpler. EU regulations are directly applicable in all Member states. The court thus found that these regulations are French international mandatory rules and, because they contribute to the maintenance or restoration of international peace and security, also define French international public policy. In this context, the reference to the purpose of EU Regulations was aimed at distinguishing those EU regulations which would qualify as international mandatory provisions and those which would not.

Finally, the court turned to US sanctions and ruled that they did not define French public policy. The court insisted that its role was to assess French public policy. For this purpose, it was highly relevant that the French state had repeatedly expressed through members of its government its opposition to the policy of the US to use unilateral sanctions, calling them unjustifiable and violations of international law. French authorities were working with other Member States to reinforce the economic sovereignty of the EU, in particular by reflecting on extending the scope of the EU blocking regulation (and possibly the French blocking statute). Thus, US sanctions clearly did not define French public policy

After elaborating quite extensively on the characterization of international sanctions as international mandatory rules, the court found that neither the UN Resolutions, nor the EU Regulations applied in the particular case, and that there had not been any actual violation of French public policy. It seems clear, therefore, that the court wanted to signal its doctrine and clarify that, while it would expect arbitrators to take into account UN and EU sanctions, it would participate in the effort of the French state to resist US unilateralism in this respect.

Serena Forlati (University of Ferrara) and Pietro Franzina (Catholic University of the Sacred Heart, Milan) are the editors of a collection of essays titled Universal Civil Jurisdiction – Which Way Forward? which has been just published by Brill.

Enabling the victims of international crimes to obtain reparation is crucial to fighting impunity. In Universal Civil Jurisdiction – Which Way Forward? experts of public and private international law discuss one of the key challenges that victims face, namely access to justice. Civil courts in the country where the crime was committed may be biased, or otherwise unwilling or unable to hear the case. Are the courts of other countries permitted, or required, to rule on the victim’s claim? Trends at the international and the domestic level after the Naït-Liman judgment of the European Court of Human Rights offer a nuanced answer, suggesting that civil jurisdiction is not only concerned with sovereignty, but is also a tool for the governance of global problems.

Opened by a foreword by Giorgio Gaja (University of Florence, Judge at the International Court of Justice), the book features contributions by the editors themselves as well as by Beatrice I. Bonafè (University of Rome La Sapienza), Malgosia Fitzmaurice (Queen Mary University), Patrick Kinsch (University of Luxembourg), Mariangela La Manna (Catholic University of the Sacred Heart, Milan), Fabrizio Marongiu Buonaiuti (University of Macerata), Lucas Roorda and Cedric Ryngaert (both University of Utrecht), and Andrea Saccucci (University of Campania).

See here for more information, including the full table of contents.

Stephen Park (University of Connecticut School of Business) and Tim Samples (University of Georgia School of Business) have posted Distrust, Disorder, and the New Governance of Sovereign Debt on SSRN.

The unique characteristics of sovereign debt finance provide fertile ground for opportunistic behavior and intractable disputes. Lacking reliable contractual enforcement mechanisms and formal bankruptcy procedures, the sovereign debt restructuring process is hampered by fragmentation, costly standoffs, and unpredictable outcomes. The result is a non-system of ad hoc, decentralized negotiations and litigation that some fear is perpetually at risk of falling apart. To address these concerns, recent years have seen renewed efforts to fix sovereign debt through soft law, public-private collaboration, and informal governance mechanisms, which this Article collectively refers to as sovereign debt governance. This Article focuses on one of the most prominent proposed reforms in sovereign debt governance: the use of creditor committees to facilitate engagement between a sovereign debtor and its private external creditors. Notwithstanding the uniqueness of sovereign debt in international law and financial regulation, we explain how the debtor-creditor relationship reflects a fundamental governance challenge amidst individual distrust and collective disorder. This suggests that the sovereign debt restructuring process can be improved by reforming the procedural rules and institutional frameworks that govern debtor-creditor engagement. To assess this proposition, we examine the use of creditor committees in the current era of sovereign debt, focusing on factors that influence the conduct of debtors and their creditors vis-à-vis each other. Drawing on our observations, we consider the potential value and limitations of creditor committees in the context of sovereign debt governance.

The paper is forthcoming in the Harvard International Law Journal.

The third issue of the Journal du Droit International for 2020 includes three articles concerned with private international law and several case notes.

In the first article, Caroline Devaux (University of Nantes) offers an analysis of the 2018 Singapore Convention on International Settlement Agreements Resulting from Mediation (Entrée en vigueur de la Convention de Singapour : de nouveaux horizons pour la médiation commerciale internationale). The English abstract reads:

The United Nations Convention on International Settlement Agreements Resulting from Mediation was adopted on 20 December 2018 under the auspices of the United Nations Commission on International Trade Law (UNCITRAL) and will enter into force on 12 September 2020. By establishing an international mechanism for the recognition and enforcement of mediated settlement agreements, the Singapore Convention aims to encourage the use of international commercial mediation in the same way that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards had facilitated the growth of international commercial arbitration. If successful, the Singapore Convention could transform dispute settlement in the field of international trade.

In the second article, Etienne Thomas discusses the procedure for the return of the child under the Brussels 2 ter Regulation (La procédure de retour de l’enfant à l’aune du règlement Bruxelles 2 ter).

On the 25th of June 2019, the Council of the European Union adopted the regulation Brussels 2 ter, amending substantially the regulation Brussels 2 bis. Like its predecessor, regulation Brussels 2 ter complements, within the European Union, the regime of The Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction. It also rectifies some dysfunctions attributed to regulation Brussels 2 bis while restoring balance in the relations between the judge of the Member state of origin of the child and the judge of the Member state of execution of the return decision. Since the end of the 1990s, the Council used its best endeavours to deepen the cooperation between Member states in child abduction cases. However, the number of cases is still high. In this regard, the central issue remains, i.e. the end of judicial imbroglios, in the obvious interest of the child.

Finally, Elodie Kleider explores certain issues related to the divorce of French residents working in Switzerland (Travailler en Suisse et divorcer en France : le partage du deuxième pilier, compétence exclusive des juridictions suisses).

Since the revision of 19 June 2015 came into force, Swiss courts have exclusive jurisdiction in divorce cases, to rule upon claims for the allocation of occupational pension against Swiss pension funds (2E pillar) and will apply Swiss law. As a result, French decrees that resolved the issue by taking those assets into account when calculating the compensatory allowance will not be recognized in Switzerland anymore.

The full table of contents is available here.

This post was written by Giesela Rühl, LL.M. (Berkeley), Humboldt-University of Berlin.

The protection of human rights in global supply chains has been high on the agenda of national legislatures for a number of years. Most recently, also the European Union has joined the bandwagon. After Commissioner for Justice Didier Reynders announced plans to prepare a European human rights to due diligence instrument in April 2020, the JURI Committee of the European Parliament has now published a Draft Report on corporate due diligence and corporate accountability. The Report contains a motion for a European Parliament Resolution and a Proposal for a Directive which will, if adopted, require European companies – and companies operating in Europe – to undertake broad mandatory human rights due diligence along the entire supply chain. Violations will result, among others, in a right of victims to claim damages.

The proposed Directive is remarkable because it amounts to the first attempt of the European legislature to establish cross-sectoral mandatory human rights due diligence obligations coupled with a mandatory civil liability regime. However, from a private international law perspective the Draft Report attracts attention because it also contains proposals to change the Brussels I bis Regulation and the Rome II Regulation. In this post I will briefly discuss – and criticize – the proposed changes to the Rome II Regulation. For a discussion of the changes to the Brussels I bis Regulation I refer to Geert Van Calster’s thoughts on GAVC.

The proposed change to the Rome II Regulation envisions the introduction of a new Article 6a entitled “Business-related human rights claims”. Clearly modelled on Article 7 Rome II Regulation relating to environmental damage the proposal allows victims of human rights violations to choose the applicable law. However, unlike Article 7 Rome II Regulation, which limits the choice to the law of the place of injury and the law of the place of action, the proposed Article 6a allows victims of human rights violations to choose between potentially four different laws, namely

1) the law of the country in which the damage occurred, i.e. the law of the place of injury,

2) the law of the country in which the event giving rise to damage occurred, i.e. the law of the place of action,

3) the law of the country in which the parent company has its domicile or, where the parent company does not have a domicile in a Member State,

4) the law of the country where the parent company operates.

The rationale behind the proposed Article 6a Rome II Regulation is clear: The JURI Committee tries to make sure that the substantive provisions of the proposed Directive will actually apply – and not fall prey to Article 4(1) Rome II Regulation which, in typical supply chain cases, leads to application of the law of the host state in the Global South and, hence, non-EU law. By allowing victims to choose the applicable law, notably the law of the (European) parent company the JURI Committee takes up recommendations that have been made in the literature over the past years.

However, a right to choose the applicable law ex post – while certainly good for victims – is conceptually ill-conceived because it results in legal uncertainty for all companies that try to find out ex ante what their obligations are. Provisions like the proposed Article 6a Rome II Regulation, therefore, fundamentally impair the deterrence function of tort law and increase compliance costs for companies because they have to adjust their behaviour to four – potentially – different laws to avoid liability. It is for this reason that choice of law rules that allow one party to unilaterally choose the applicable law ex post have largely (even though not completely) fallen out of favour.

The proposed Article 6a Rome II Regulation, however, does not only fail to convince conceptually. It also fails to convince as regards to the purpose that it seeks to achieve. In fact, there are much better ways to ensure that European standards apply in supply chain cases. The most obvious way is to simply adopt the envisioned European instrument in the form of a Regulation. Its provisions would then have to be applied as international uniform law by all Member State courts – irrespective of the provisions of the Rome II Regulation. However, even if the European legislature prefers to adopt a European instrument in the form of a Directive – for political or competence reasons –, no change of the Rome II Regulation is necessary to ensure that it is applied throughout Europe. In fact, its provisions can simply be classified as overriding mandatory provisions in the meaning of Article 16 Rome II Regulation. The national provisions implementing the Directive will then apply irrespective of the otherwise applicable law.

In the light of the above, application of European human rights due diligence standards can be ensured without amending the Rome II Regulation. It is, therefore, recommended that the JURI Committee rethinks – and then abandons – the proposed Article 6a Rome II Regulation.

The members of the European Association of Private International Law have recently received, by e-mail, the first issue of the Association’s Newsletter.

The issue can now be accessed by all readers of this blog here.

It comes with updates on the EAPIL conference in Aarhus, which is scheduled to take place on 27, 28 and 29 May 2020, and with news on the activities of the Association, notably the creation of a Working Group on the Feasibility of a European Private International Law Act, chaired by Thomas Kadner Graziano, and the establishment of the Young EU Private International Law Research Network, co-chaired by Martina Melcher and Tamás Szabados.

The Newsletter also provides a presentation of four more Working Groups whose creation has recently been proposed: a Working Group on Interests in European private international law, led by Caroline Kleiner; one on The law applicable to the validity of choice of court agreements, coordinated by Laurence Usunier and Eva Lein; one on Liberalizing the cross-border taking of evidence within the EU, proposed by Gilles Cuniberti; and one on A future European Regulation on international property law, headed by Eva-Maria Kieninger.

The members of the Association are warmly encouraged to contribute to the above activities, or launch new ones!

One of the articles in the Newsletter is about this blog. The blog is seeking new permanent editors and a social media manager. Interested EAPIL members are invited to get in touch with Pietro Franzina at pietro.franzina@unicatt.it.

Finally, the Newsletter provides an account of the current status of the EAPIL membership, less than one year after its creation. The Association has now 216 members, coming from 40 countries around the world.

This issue’s guest editorial is by Patrick Kinsch, Secretary General of GEDIP (Groupe européen de droit international privé), and is titled Fraternal greetings from a fellow association of European private international law.

On few occasions Polish tax authorities made references to the EU Succession Regulation and applied foreign law designated by its provisions, even though revenue and other administrative matters are explicitly excluded from its scope. This post presents shortly the inheritance taxation rules in Poland, explains why tax authorities felt the need to look into foreign succession laws for tax purposes and how the content of foreign law was ascertained.

The EU Succession Regulations states in its Article 1(1) that it does not apply to revenue, customs or administrative matters. Recital 10 makes reference to taxes in particular. It explains that it is for national law to determine how taxes are calculated and paid. The question is how to proceed if national tax law makes a direct reference to succession law concepts.

It might be reminded that inheritance taxes in Member States were once subject to an EU-sponsored study (which might be consulted here).

Inheritance taxation in Poland is regulated by a separate statute (available here – in Polish only). It provides that the acquisition of goods located in Poland and rights exercised in Poland by an individual as a result of inter alia succession is subject to taxation. Acquisition of goods located abroad or rights exercised abroad is subject to taxation, provided that at the moment of opening of the succession the beneficiary was a Polish national or had habitual residence in Poland. The acquisition of ownership of movable property located in Poland or rights exercised in Poland is not subject to taxation, provided that neither the beneficiary, nor deceased were Polish nationals and had habitual residence in Poland.

There are numerous exemptions from inheritance tax, including the one for the closest family members. The beneficiary is the taxpayer. The tax point arises at the moment of the acceptance of the succession. If the acquisition was not reported to tax authorities the tax point (re)arises at the moment when a document in writing is produced. If it is a court decision the tax point arises at the moment the decision becomes final. The tax base is the net worth of the estate calculated in the prescribed manner. The tax due depends on the degree of affinity or kinship between the deceased and beneficiary and varies between 3% to 20% of the tax base exceeding certain thresholds. Taxpayers are obliged to file a tax return, based on which tax authorities issue a decision indicating tax to be paid.

As mentioned above, the tax point with respect to succession arises at the moment of its acceptance. This clearly refers to the acceptance of the succession, an institution known in the substantive succession law regulated by the Polish Civil Code (here). It states that an heir acquires the estate at the moment of the opening of the succession. Nevertheless, the heir may accept the estate without limitation of liability for debts, with limitation of that liability or may renounce the succession. The time limit for such statement is six months counting from the moment when an hair have learned about his/her title of acquisition.

It is simple to indicate a tax point for inheritance taxation in a purely domestic case. However, inheritance taxation comes into play also in cases which are less intensively connected to Poland. For example, acquisition of an immovable property located in Poland is taxed, even if both the deceased and the beneficiary are foreign nationals with habitual residence abroad. In those cases, in accordance with the EU Succession Regulation, succession is governed by foreign law. The doubt as to the tax point might occur in instances when lex successionis does not know the concept of an acceptance of succession.

While assessing the tax point tax authorities stated that the concept of an acceptance of succession used for tax purposes must take into account the law applicable to civil law aspects of the particular case. This law should be designated in accordance with the EU Succession Regulation.

In the recent tax ruling of 27 August 2020 (signature: 0111-KDIB2-3.4015.112.2020.1.AD) the tax authority analysed English law (as the deceased was habitually resident in the UK). It was explained that in the UK succession case is dealt with differently than in Poland. It is an appointed executor, who is responsible for assessing the value of the estate, payment of debts and payment of inheritance taxes in the UK. The executor is responsible also for sending documents to the probate court. Once the decision of the probate court is delivered, the estate might be transferred to heirs. As a result a final decision of the probate court may be perceived as an equivalent to the acceptance of succession. In an earlier tax ruling of 31 December 2019 (signature: 0111-KDIB4.4015.114.2019.2.MD) the tax authority analysed US succession procedure and also stated that the decision of the court is conclusive for tax purposes in Poland.

Please note that the above are not decisions in particular tax proceedings, but tax rulings, which only interpret the law on the taxpayer’s application and are issued based on information and explanations provided by the taxpayer. Hence, while issuing a tax rulings tax authorities are not establishing the content of foreign law. Tax rulings may be found by their signatures in the public database (accessible here – in Polish only).

In the tax proceeding concerning succession governed by Australian law tax authorities went even further and lined the tax point to the actual transfer of funds from Australia to Poland. The taxpayer was arguing that the tax point have arisen earlier, at the moment of the opening of succession (as the foreign exchange rate used for calculating tax due was more favourable at that time). The decision resulted in a dispute and the tax decision was appealed to the administrative court. The court in its judgement of 26 June 2018 (signature: I SA/Wr 164/18; it may be found by its signature in the public database here – in Polish) set aside the tax decision due to procedural faults, in particular when it comes to ascertainment of the content of foreign law.

The court stated that it is not enough that the tax authorities have asked Polish Consulate in Sidney for information on Australian law and that the decision has indicated provisions of the South Australia Administration and Probate Act 1919 as the basis for conclusions. The court suggested that indeed the tax point arose earlier than at the moment of the bank transfer, but in order to indicate this moment a careful analysis of Australian succession law must be made. For this purpose tax authorities should ask Ministry of Finance for guidance, which might in turn, within the framework of legal aid procedure, contact Australian tax authorities. Australian succession law should be applied as it would be applied by Australian tax authorities in similar cases. Also an expert witness may be appointed.

The above shows the relevance of private international law for the work of administrative authorities, influence of lex successions designated by the EU Succession Regulation on tax matters, but also reveals that tax authorities are not necessarily competent to proceed with the ascertainment of the content of foreign law.

Hélène Péroz (University of Nantes) has edited a commentary of Regulation (EU) 2016/1191 of 6 July 2016 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union, published by Bruylant (La circulation européenne des actes publics – Premier commentaire du Règlement 2016/1191 du 6 juillet 2016).

More generally, the book addresses the different issues arising from the international circulation of public documents in Europe, both from a practical and an academic perspective.

The book’s table of contents can be found here. See here for further information.

No decisions on PIL matters will be taken this month. However, a couple of opinions will be published, and a hearing will be held.

AG’s Spuznar opinion on C–469/19, All in One Star, will be delivered on 14 October 2020. The request from the German Bundesgerichtshof was lodged on 19 June 2019.

The questions submitted are as follows:

1. Does Article 30 of Directive (EU) 2017/1132 [relating to certain aspects of company law] preclude a national provision under which the indication of the amount of share capital or a comparable capital value is required for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register?

2.a Does Article 30 of Directive (EU) 2017/1132 preclude a national provision under which, when applying for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register, the managing director of the company has to provide an assurance that there is no barrier to his personal appointment under national law in the form of a prohibition, ordered by a court or public authority, on practising his profession or trade, corresponding in whole or in part with the object of the company, or in the form of a final conviction for certain criminal offences and that, in this respect, he has been instructed of his unrestricted duty to provide information to the court by a notary, a representative of a comparable legal advisory profession or a consular officer?

2.b If Question 2.a is answered in the negative: Do Articles 49 and 54 TFEU preclude a national provision under which the managing director of the company has to provide such an assurance when applying for a branch of a limited liability company with registered office in another Member State to be entered in the commercial register?

On the same day, the hearing in C-729/19 Department of Justice for Northern Ireland will take place. The issue relates the registration and enforcement in Northern Ireland of a maintenance order made by a Polish court before Poland’s accession to the EU pursuant to Council Regulation (EC) No 4/2009 of 18 December 2008. The case has been allocated to the 3rd Chamber (the one who determined as well C-41/19 and C-540/19, with Ms. Rossi as reporting judge), and to AG Hogan.

On 29 October, AG Saugmandsgaard Øe will deliver his opinion in C-804/19 , Markt24. Here, the questions come from the Landesgericht Salzburg (Austria), and are not short:

1. Is Article 21 of Regulation (EU) No 1215/2012 applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work?

In the event that the first question is answered in the affirmative:

2. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the Arbeits- und Sozialgerichtsgesetz (Law on the labour and social courts; ‘the ASGG’)?
3. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of his employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?

In the event that Questions 2 and 3 are answered in the negative:

4.1. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that, in the case of an employment relationship in which the female employee has not performed any work, the action must be brought in the Member State in which the employee remained prepared to work?

4.2. Is Article 21 of Regulation (EU) No 1215/2012 to be interpreted as meaning that, in the case of an employment relationship in which the female employee has not performed any work, the action must be brought in the Member State in which the employment contract was initiated and entered into, even if the performance of work in another Member State had been agreed or envisaged in that employment contract?

In the event that the first question is answered in the negative:

5. Is Article 7(1) of Regulation (EU) No 1215/2012 applicable to an employment relationship in which, although an employment contract was entered into in Austria for the performance of work in Germany, the female employee, who remained in Austria and was prepared for several months to work, did not perform any work, if it is possible to apply a national provision which enables an employee to bring an action in the place where she was resident during the employment relationship or at the time when the employment relationship ended (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(a) of the ASGG, or if it is possible to apply a national provision which enables an employee to bring an action in the place where the remuneration is to be paid or was to be paid upon termination of the employment relationship (thus facilitating the process of bringing an action), as is the case with Paragraph 4(1)(d) of the ASGG?
6. The proceedings are stayed pending the ruling the Court of Justice (Paragraph 90a of the Gerichtsorganisationsgesetz (Law on the organisation of the courts; ‘the GOG’).

The chamber in charge is the 5th, (Bonichot, Bay Larsen, Toader, Safjan, Jääskinen), with Mr. Safjan as reporting judge.

The members of the proposed EAPIL Working Group on International Property Law will host a webinar 20 October 2020, from 12:30 to 2 pm.

The webinar will illustrate the goals and agenda of the Working Group and provide EAPIL members with the possibility to join the discussion on a future European Regulation on International Property Law.

The webinar’s programme is as follows:

• Prof. Dr. Teun Struycken (Amsterdam/Utrecht): The Significance of International Property Law (case study)
• Ass. Prof. Dr. Teemu Juutilainen (Turku): The Impact of Free Movement of Goods and Services on International Property Law
• Prof. Dr. Gilles Cuniberti (Luxemburg): The Impact of the Acquis Communautaire on International Property Law
• Prof. Dr. Janeen M Carruthers (Glasgow): Global Measures for the Unification of Private International Rules pertaining to Property
• Prof. Dr. Eva-Maria Kieninger (Würzburg): The Way Ahead: Topics and Goals of the Working Group

The practical details for attending the webinar will be communicated soon on this blog.

Situations exist where a judicial document addressed to a person based abroad may be communicated to a lawyer representing that person in the forum State, instead of being served abroad on the addressee himself or herself. This usually applies to service occurring after the act instituting the proceedings has been served on the defendant in conformity with either the Service Regulation or the Hague Service Convention.

In fact, the described situation may also arise in the framework of proceedings brought by a foreign claimant against a defendant based in the forum. In this case, the defendant may reasonably presume that the lawyer signing the claim on behalf of the foreign litigant is eligible for receiving documents related to the case.

While the latter assumption would generally seem to be accurate, the admissibility of service on the lawyer  depends on the kind of documents that the latter is in fact allowed to receive on behalf of the client.

In 2019, the Greek Supreme Court issued an interesting ruling on the matter.

After longstanding business collaboration between a Greek company and a Finnish telecommunications giant, a decade of confrontation began in 2010. In a series of proceedings, the parties fought through all court instances.

The first stage was a successful application for a freezing order filed by the Finnish company. An actio pauliana was filed in parallel by the same company, which was dismissed by the Athens Court of First Instance. The appeal lodged by the Finnish company, instead was successful. The losing party filed cassation against the Athens Court of Appeal ruling.

Almost at the same time, the Greek company lodged an application to reverse the freezing order, which was filed to the Supreme Court, in accordance with domestic Civil Procedure Rules (Article 698 of the Code of Civil Procedure).

As in previous stages of the litigation, the document was served on the lawyer representing the Finnish company. The latter did not appear in the hearing.

The Supreme Court ruled that the application was inadmissible because it was not served on a lawyer instructed by the foreign company to accept service on its behalf at a business address within the jurisdiction [Supreme Court Nr. 470/2019, unreported]. The reasoning of the court may be summarised as follows:

• Proper indirect service (in the case at hand, service to a lawyer representing a party), must be demonstrated by the party instructing the process server to deliver the document in this fashion.
• Pursuant to Greek law, a foreign party may appoint a representative ad litem in the following ways: by a declaration addressed to the clerks of the Athens Court of First Instance; by a specific clause in a contract; by appointing a lawyer as a representative ad litem pursuant to Article 96 of the Greek Code of Civil Procedure [i.e. orally before the court and prior to the hearing, or in written by means of a private power of attorney, upon the condition that the signature has been certified by a public authority or another attorney at law].
• Pursuant to Article 143(4) of the Code of Civil Procedure, all documents addressed to a foreign party must be served on the representative ad litem, if properly appointed, provided they fall within the set of cases covered by the power of attorney for the purpose of service.
• The Supreme Court found, however, that the application by the appellant to reverse the freezing order before the Court itself was not related to the set of cases for which the lawyer of the Finnish company was appointed. In particular, the lawyer’s appointment concerned the main dispute (which reached the Supreme Court), not the provisional measures (freezing order).
• Therefore, service of the application to reverse the freezing order to the lawyer who received the writ on behalf of the Finnish company was inadmissible.
• The above result is free of doubt, notwithstanding the same lawyer acted and received documents on behalf of the Finnish company in a number of occasions, such as: representation before the Athens Court of First Instance and Court of Appeal; representation before the court which issued the freezing order; filing on behalf of the Finnish company of an application for declaring the Greek company insolvent, and representing the same party before court in the bankruptcy proceedings.

Almost ten years after the start of litigation, and following a number of hearings where the Finnish company was represented by the same lawyer, the Supreme Court considered that the latter had no powers of representation in a case initiated by his own application, followed by his appearance before the court, and his instruction to serve the freezing order to the losing party.

The ruling of the Supreme Court rests upon a formalistic construction of the law; contradicts to the factual situation of the dispute; causes additional costs to the applicant with no apparent reason; endangers the right to judicial protection, given that service from Greece to Finland is not business as usual.

Last but not least, the Supreme Court did not utter a word about the actual applicable rules, i.e those in the Service Regulation. It failed to take into account Recital 8 of the Preamble and the pertinent case law of the CJEU. Finally, it missed the chance to address the matter to the European Court of Justice, by filing a preliminary request for an issue which continues to puzzle academia and practice alike.