EAPIL blog

On 27 September 1968, the (then) six member States of the European Communities signed the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters. On the occasion of the 50th anniversary of this milestone, the European Court of Justice and the Max Planck Institute Luxembourg held an international conference on the most important developments, achievements and challenges in European civil procedural law since that date.

A book collecting most of the presentations, edited by Prof. Dr. Dres. h.c. Burkhard Hess and Prof. Dr. Koen Lenaerts, with Dr. Vincent Richard as coeditor, has just been published by Nomos Verlag, in the Studies of the Max Planck Institute for International, European and Regulatory Procedural Law series.

The book includes contributions on the Brussels regime authored by members of the European Court of Justice, established academics and young researchers, illustrating the dialogue between the Court of Justice and the national courts on the interpretation of European civil procedural law, and how it has impacted on the Europeanization of private international law. Moreover, it reflects on the future of European civil procedural law and on the suitability of the Brussels regime today.

The French Committee of Private International Law has published a book presenting portraits of 15 former presidents of the Committee since it was established in 1934.

As the goal of the Committee has been to establish a bridge between the bench, the bar and the academy, the presidents have been essentially academics (Batiffol, Goldman) and judges (Bellet, Ponsard, Dray), but also members of the bar (Decugis).

Each of the portraits attempts to assess the contribution of the president to the development of the field, but also to present his personal history.

The foreword and table of contents of the book can be accessed here. More information is available here.

It is widely known that disputes related to sports are most of the times referred to arbitration. Football is of course in the forefront. Usually cases referred to either the CAS or the FIFA Dispute Boards lead to an award. Not so in the case at hand. As a result, the creditor was left with the sole option, i.e. to return civil litigation. However, the road was not paved with roses…

1. The facts

The Appellant, a resident of the Netherlands, is a professional football player’s agent of Dutch nationality, licensed by the Royal Dutch Football Association. The Respondent is a Greek football société anonyme, which runs a professional football team participating in the Greek Super League. The Club is affiliated with the Hellenic Football Federation (the “HFF”), which in turn is a member of the Fédération Internationale de Football Association (“FIFA”). It has its seat in Thessaloniki, Greece.

In May 2012, the Appellant represented the professional football coach D. and three coach assistants as their agent in the contractual negotiations with the Respondent. In this context, the Parties signed a Private Agreement setting out, in essence, the terms and conditions on which the Respondent should pay the Appellant for his services in facilitating the signing of the contracts between the Respondent and the Coach, and the Assistant Coaches.

The Agreement stated, inter alia, the following: ‘the parties also expressly agree that the competent Committee of FIFA will have jurisdiction to decide for any and all disputes that might arise from or in relation to the present agreement and that the FIFA Regulations will apply to any such dispute’.

Owed to a negative result, the Team lost its chance to qualify for the Greek cup final. As a consequence, a clash was provoked between the Team and the Coach, which resulted in the discontinuation of their cooperation, and the non-payment of the second tranche to the Agent by the Team.

Stage A: FIFA

On September 2014, the Appellant filed his claim with FIFA, claiming the Respondent’s payment of 70.000 € in accordance with the Agreement. FIFA informed the Appellant of the following:

We would like to draw your attention again to art. 1 of the Players’ Agents Regulations, which stipulates that “These regulations govern the occupation of players’ agents who introduce players to clubs with a view to negotiating or renegotiating an employment contract or introduce two clubs to one another with a view to concluding a transfer agreement within one association or from one association to another”. Moreover, art. 1 par. 2 of the Regulations stats that “The application of the regulations is strictly limited to players’ agents activities described in the paragraph above”. In light of the aforementioned and by way of clarification, it would rather appear that your claim lacks legal basis, since the services provided by you and which are object to your claim i.e. providing services on behalf of the coaching staff are outside the scope of the abovementioned provisions’.

Stage B: CAS

On December 2014, the Appellant filed an appeal with the Court of Arbitration for Sport. He sought, inter alia, to: (1) set aside the decision issued on by the FIFA; (2) issue a (new) decision condemning Respondent to pay Appellant an amount of 70.000 € on outstanding commissions.

The Sole Arbitrator noted that Article R47 of the CAS Code states as follows: ‘An appeal against the decision of a federation, association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the Appellant has exhausted the legal remedies available to it prior to the appeal, in accordance with the statutes or regulations of that body’.

Based on the foregoing, the Sole Arbitrator stated that it is undisputed that the CAS has jurisdiction to hear appeal cases only under the condition that a ‘decision’ has been rendered, in which connection the Appellant argued that the FIFA Letter satisfies the requirement for constituting a ‘decision’, whereas the Respondent denied that this is the case.

The Appellant did not deny the accuracy of FIFA’s (alleged) decision regarding lack of jurisdiction and did not really want to have this issue verified by the CAS. As stated in the appeal that he rather sought ‘an award on the basis of the merits and essentials of the case here presented, despite the fact that the appealed decision did not entail an elaboration on the essential content of the dispute’.

The Arbitrator regarded the appeal as an attempt to circumvent FIFA’s lack of jurisdiction – which was not contested by the Parties – and, in this manner, to make the CAS, as an appeals body, hear and decide on the substantive aspects of the dispute, notwithstanding that FIFA, as the first-instance body chosen by the Appellant, did not consider itself to have jurisdiction. Since it neither is, nor should be possible to circumvent a first-instance judicial body’s undisputed lack of jurisdiction to hear and decide on a substantive issue by merely attempting to refer such a decision to the CAS through a more or less fictitious appeal, the Sole Arbitrator ruled that the CAS had no jurisdiction to hear the ‘appeal’. In addition, the Arbitrator stated that an appeal to the CAS filed under the rules governing appeal proceedings set out in the Code therefore cannot merely be ‘transformed’ into a request for arbitration.

Based on the above, the Sole Arbitrator found that the CAS did not have jurisdiction to hear and decide the present dispute.

Stage C: Swiss Supreme Court

In accordance with the CAS Statutes, the agent challenged the CAS ruling before the Swiss Supreme Court. However, the latter did not render a ruling, because the agent requested discontinuance of the proceedings. Hence, the CAS decision became final and conclusive.

Stage D: Thessaloniki Court of 1st Instance

As a consequence, the agent returned to the path of ordinary civil and commercial court jurisdiction. He filed a claim before the Thessaloniki Court of First Instance. The team challenged the jurisdiction of Greek courts, invoking the arbitration clause stipulated in the agreement. In a rather superficial fashion, the Thessaloniki court ordered the stay of proceedings, and referred the case to the FIFA Dispute Resolution Chamber. The agent lodged an appeal.

2. The Ruling of the Thessaloniki Court of Appeal of 7 May 2020

The Thessaloniki Court of Appeal quashed the first instance judgment by applying domestic rules of arbitration. It considered that, under the circumstances above, the arbitration clause has lost its validity.

In addition, it dismissed a fresh plea by the Team, by virtue of which the dispute should be tried by the Financial Dispute Resolution Committee of the Hellenic Football Federation (HFF). The court invoked Article 1 Para 3 of the HFF Football Agents Statutes, which has a similar wording to that of Art. 1 of FIFA Players’ Agents Regulations (see above under I).

As a next line of defence, the Team pleaded a set off the claim by way of defence with respect to two costs orders issued against the agent by the CAS and the Swiss Supreme Court respectively. The Thessaloniki CoA dismissed the defence, stating that a set off is not possible, because the orders were not declared enforceable in Greece. Following the above, the court examined the case on the merits, applying Greek law. It recognized that the Team ought to compensate the Agent in full satisfaction of the claim.

3. Remarks

Notwithstanding that, in light of the evidence produced, the outcome of the judgment was correct, the court started and finished its examination by omitting any reference to provisions of International Commercial Arbitration and Private International Law. This proves yet another time that courts prefer to stick to their national comfort space, defying any international rules applicable in Greece by virtue of ratification or direct application.

In particular, the court failed to refer to the rules of the 1999 Greek law on International Commercial Arbitration, i.e. the UNCITRAL Model Law on Arbitration, although the case was falling under its scope.  In addition, the reasoning concerning the costs orders is not free of doubt: Incidental recognition of foreign judgments is regulated under the Lugano Convention; hence, the Swiss Supreme Court costs order should have been taken into account. Things are a bit complicated in regards to the CAS costs order. Incidental recognition of foreign arbitral awards is not regulated in the 1958 New York Convention. However, Article III of the Convention states that ‘Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon’. Article 903 Greek Code of Civil Procedure states that a foreign arbitral award is recognized automatically, if the requirements set for recognition are met. Hence, incidental recognition of the CAS costs order was also possible.

Finally, bearing in mind the cross-border nature of the dispute, the court could have examined the issue of applicable law under the scope of the Rome I Regulation. In fact, Article 4(1)(b) provides that, in similar cases, the law applicable is the law of the country of the habitual residence of the service provider. However, it appears that both litigants referred to provisions of Greek law in their briefs. Hence, the court considered that the parties tacitly agreed for the application of domestic law.

Vesna Rijavec, Katja Drnovsek, C.H. van Rhee have edited Cross-border enforcement in Europe: national and international perspectives, published by Intersentia.

The volume addresses the enforcement of judgments and other authentic instruments in a European cross-border context, as well as enforcement in a selection of national European jurisdictions. The volume is divided into two parts. Part I on ‘Cross-border Enforcement in Europe’ opens with a contribution comparing the European approach in Brussels I Recast with the US experience of enforcement in the context of judicial federalism. This is followed by two contributions concentrating on aspects of Brussels I Recast, specifically the abolition of exequatur and the grounds for refusal of foreign judgments (public order and conflicting decisions). The two concluding texts in this part deal with the cross-border enforcement of notarial deeds and the sister regulation of Brussels I Recast, Brussels II bis (jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility). Part II is devoted to aspects of (cross-border) enforcement in a selection of European states (Poland, the Czech Republic, the Netherlands, Slovenia and the Republic of North Macedonia). The topics discussed include the authorities entrusted with enforcement, judicial assistance and the national rules relevant from the perspective of Brussels I Recast. 

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

 

Holidays are over, it is time for all the services of the Court to resume full activity.

As regards private international law, September 2020 will start with the delivery, on Thursday 3, of the 1st Chamber (Bonichot, Safjan, Bay Larsen, Toader, Jääskinen) judgment in C-186/19, Supreme Site Services e.a.: a request for a preliminary ruling from the Netherlands on the
interpretation of Article 1(1), and Article 24(5) of the Brussels I bis Regulation.

The request was made in the course of an application brought by an international organisation for the adoption of interim measures to lift an interim garnishee order levied on an escrow account by his opponent. In support of its action, the organisation had relied on immunity from execution under international law. The referring court’s doubts on Article 1(1) of Brussels I bis stem from that fact.

AG Oe’s Opinion was delivered on 2 April 2020 (see here). He was asked to address only the questions on Article 1(1) of the Regulation.

On the same day, an order is expected in C-98/20, mBank, on Article 17(1)(c) and Article 18(2) of the same Brussels I bis Regulation. The request was referred by the Obvodní soud pro Prahu 8 (Czech Republic), who had doubts about the relevant date of domicile for the consumer section to apply.

On Thursday 10, AG Oe will deliver his Opinion on C-59/19,Wikingerhof. The request, from the Bundesgerichtshof, addresses the divide between Article 7(1) and (2) of the Brussels I bis Regulation. The question reads:

‘Is Article 7(2) … to be interpreted as meaning that jurisdiction for matters relating to tort or delict exists in respect of an action seeking an injunction against specific practices if it is possible that the conduct complained of is covered by contractual provisions, but the applicant asserts that those provisions are based on an abuse of a dominant position on the part of the defendant?’

It actually looks as a follow up to Brogsitter (C-548/12), except that this time the Grand Chamber will decide (Lenaerts, Silva de Lapuerta, Bonichot, Arabadjiev, Prechal, Safjan, Rodin, Xuereb, Rossi, von Danwitz, Toader, Šváby, Jürimäe, Lycourgos, Piçarra), and an AG’s Opinion has been deemed necessary.

On the same day, a hearing will take place on case C-709/19, Vereniging van Effectenbezitters: again a preliminary reference from the Netherlands, this time in relation to Article 7(2) of Brussels I bis, going to the core of the ‘holistic approach’. The Dutch referred four (de facto, five) questions to the CJEU:

‘1.   (a)   Should Article 7(2) … be interpreted as meaning that the direct occurrence of purely financial damage to an investment account in the Netherlands or to an investment account of a bank and/or investment firm established in the Netherlands, damage which is the result of investment decisions influenced by globally distributed but incorrect, incomplete and misleading information from an international listed company, constitutes a sufficient connecting factor for the international jurisdiction of the Netherlands courts by virtue of the location of the occurrence of the damage (‘Erfolgsort’)?

(b)   If not, are additional circumstances required to justify the jurisdiction of the Netherlands courts and what are those circumstances? Are the additional circumstances referred to [in point 4.2.2. of the request for a preliminary ruling] sufficient to found the jurisdiction of the Netherlands courts?

2. Would the answer to Question 1 be different in the case of a claim brought under Article 3:305a of the BW (Burgerlijk Wetboek: Netherlands Civil Code) by an association the purpose of which is to defend, in its own right, the collective interests of investors who have suffered damage as referred to in Question 1, which means, among other things, that neither the places of domicile of the aforementioned investors, nor the special circumstances of individual purchase transactions or of individual decisions not to sell shares which were already held, have been established?
3. If courts in the Netherlands have jurisdiction on the basis of Article 7(2) of the Brussels Ia Regulation to hear the claim brought under Article 3:305a of the BW, do those courts then, on the basis of Article 7(2) of the Brussels Ia Regulation, also have international and internal territorial jurisdiction to hear all subsequent individual claims for compensation brought by investors who have suffered damage as referred to in Question 1?
4. If courts in the Netherlands as referred to in Question 3 above have international, but not internal, territorial jurisdiction to hear all individual claims for compensation brought by investors who have suffered damage as referred to in Question 1, will the internal territorial jurisdiction be determined on the basis of the place of domicile of the misled investor, the place of establishment of the bank in which that investor holds his or her personal bank account or the place of establishment of the bank in which the investment account is held, or on the basis of some other connecting factor?’

In the light of the facts of the case (summary here), some of them might be declared inadmissible, though. The reference has been assigned to the 1st Chamber (Bonichot, Safjan, Bay Larsen, Toader, Jääskinen), with Judge Safjan as reporting judge. Mr. Campos Sánchez-Bordona is the designated AG.

One week later the 1st Chamber will read the judgments in C-540/19, Landkreis Harburg (Subrogation d’un organisme public au créancier d’aliments), on the Maintenance Regulation. AG Sánchez-Bordona’s Opinion was published on 18 June 2020 (see here). The question referred reads

‘Can a public body which has provided a maintenance creditor with social assistance benefits in accordance with provisions of public law invoke the place of jurisdiction at the place of habitual residence of the maintenance creditor under Article 3(b) of the European Maintenance Regulation  in the case where it asserts the maintenance creditor’s maintenance claim under civil law, transferred to it on the basis of the granting of social assistance by way of statutory subrogation, against the maintenance debtor by way of recourse?’.

The judgment corresponds to the 3rd Chamber (Prechal, Lenaerts, Rossi, Biltgen, Wahl), with Ms. Rossi as reporting judge.

Albeit not directly on PIL issues: several hearings will take place in relation to the independence of the judiciary in Poland. AG Bobek will publish as well his Opinion on several cases regarding Romania, also connected to the independence of judges.

Recently, a (widely reported in the media) request for a PPU has been filed by the Rechtbank Amsterdam under Council Framework Decision 2002/584/JHA; thr underlying question is whether (all) Polish judges do still qualify as such for the purposes of the Framework Decision. If they don’t: should a similar conclusion apply to civil cooperation matters?

A Chinese divorce judgment delivered on 20 December 2013 by a court from Beijing was recognised by a French court in South Western France (Bergerac) in several decisions made in 2014 and 2016.

As will be explained below, the reason why the court had to rule twice on the issue is that each of its judgments was challenged before the Court of Appeal of Bordeaux and ended up before the French supreme court for civil and commercial matters (Cour de cassation).

Eventually, after the Cour de cassation set aside the second judgment of the Bordeaux Court of Appeal and sent back the parties before the Court of Appeal of Paris, the plaintiff gave up and never petitioned the Paris court. As a result, the first instance judgment now stands.

For years, the world has been following closely instances of enforcement and recognition of foreign judgments in the People’s Republic of China (China) and Chinese judgments abroad. This is because the default regime of judgments in China is based on reciprocity. A Chinese court will only enforce a foreign judgment if the state of origin enforced a Chinese judgment before. A more liberal regime applies to the recognition in China of judgments in family matters involving at least one Chinese national.

Bilateral Treaties

However, China has entered into bilateral treaties on judicial assistance in civil and commercial matters, which provide for the recognition and enforcement of foreign judgments, with 39 states, including quite a few European states (see the list here). France was one of the first to enter into such a bilateral treaty with China in 1987. The treaty applies not only to commercial matters, but also to family matters.

The main consequence of the existence of a bilateral treaty is that it fulfills (or replaces) the requirement of reciprocity. Chinesejusticeobserver has reported that there are several cases where Chinese courts have enforced French judgments in recent years, and it does not seem that the absence of prior enforcement of a Chinese judgements in France was an issue.

Parallel Divorce Proceedings

In the particular case, two spouses initiated parallel divorce proceedings in the contracting states. The wife, who was an English national, first sued in Beijing in December 2012. The husband, who was a French national, then initiated proceedings in Bergerac, France, in July 2013. The Beijing court delivered its judgment first and granted divorce in December 2013.

In the French proceedings, the lawyer for the wife first challenged the jurisdiction of the French court on the ground of lis pendens. Under the French common law of lis pendens, French courts may decline jurisdiction if they find that the foreign judgment is likely to be recognised in France. The French court applied the 1987 Bilateral Treaty with China and ruled that the Chinese judgment, once final, would be recognised. The court thus declined jurisdiction.

As will become clearer below, it is important to note that the wife had also made a subsidiary argument based on the res judicata of the Chinese judgment.

The husband appealed. Higher courts got involved. Not for the better.

Nationality Requirement in Bilateral Treaties?

Proceedings were first brought before the Court of Appeal of Bordeaux. In a judgment of 18 November 2014, the Court allowed the appeal and ruled that the French first instance court should have retained jurisdiction on the ground that the Chinese judgment did not fall within the scope of the bilateral treaty. This decision was wrong for two reasons.

The first was that the court held that the bilateral treaty only applied to disputes between Chinese and French nationals. In this case, the wife was an English national. As we shall see, the French Supreme Court would eventually rule that there is no such requirement in the relevant treaty, which applies irrespective of the nationality of the parties.

The second mistake was that the court did not care to examine whether the Chinese judgment could be recognised under the French common law of judgments. It simply concluded that the judgment could not be recognised outside of the scope of the treaty, and that no lis pendens exception could thus be raised.

The wife appealed to the Cour de cassation, arguing that the Court of Appeal had failed to apply the bilateral treaty.

Useless Appeals

Most unfortunately, the Cour de cassation dismissed the appeal on disciplinary grounds. In a judgment of 25 May 2016, the Court held that the argument of the appeal that the bilateral treaty had been violated was a pretext, and that what the appelant was really criticising was that the lower court had failed to respond to the subsidiary res judicata argument of the wife, which could be directly addressed by a request directed to the lower court.

The judgment was difficult to interpret. Was it saying anything, even implicitly, on the conditions for applying the Bilateral treaty? Probably not, but when the case was sentback to lower courts, they understood it differently.

The case came back to the first instance court in Bergerac, which was understandably puzzled. It decided that the 2016 judgment of the Cour de cassation had two consequences: 1) French courts had jurisdiction, and 2) the Bilateral Treaty did not apply.

The Bergerac judge retained jurisdiction, but then declared the claim inadmissible. It applied the French common law of judgments and recognised the Chinese divorce judgment in France, ruling that the Chinese judgment was res judicata, and made the claim of the husband inadmissible. The Court of Appeal of Bordeaux confirmed the first instance ruling in a judgment of September 2016.

The husband appealed to the Cour de cassation and argued that the conditions for the recognition of judgments under the French common law of judgments had been wrongly applied.

Astonishingly, the Cour de cassation informed the parties that it intended to raise ex officio the issue of the applicability of the Bilateral Treaty and, after hearing them on that point, allowed the appeal on the ground that the lower courts had failed to apply the 1987 Bilateral Treaty. Two year after failing itself to respond to an argument related to the proper application of the Bilateral Treaty, the Cour de cassation disciplined the lower courts for misunderstanding that the argument that it had neglected was excellent.

The case was sent back to the Court of Appeal of Paris so that it would apply properly the Bilateral Treaty. But it seems that the husband was exhausted: he never initiated the proceedings before the Paris court.

This case was handled pathetically by the Cour de cassation, which has probably eventually exhausted financially the plaintiff who gave it up. What matters is that, eventually, the Cour de cassation made clear that 1) the 1987 Bilateral Treaty should be applied, and 2) the Chinese judgment was recognised.

More details on this case can be found here.

On 10 August 2020, the European Commission launched a public consultation on Regulation 805/2004 creating a European Enforcement Order for uncontested claims (“the EEO Regulation”).

The consultation is carried out in the framework of an ongoing evaluation of the EEO Regulation.

In this context, the European Commission “seeks opinions on how the Regulation is working, also with regard to the revised Brussels I Regulation (Regulation 1215/2012). It also aims to collect practical experiences with the EEO Regulation, and attitudes towards its use in the future”.

The consultation is open until 20 November 2020 (midnight Brussels time) and can be found here.

As reported in this blog, the CJEU gave on 9 July 2020 its long-awaited judgment in VKI v Volkswagen (Case C-343/19). It ruled that the buyers of VW cars equipped with emissions test defeat devices can sue the manufacturer at the place where they had purchased the cars.

This result, which is broadly in line with the conclusions of the Advocate General, was hardly surprising. Nevertheless, a number of questions remain.

Where is the “Place of Purchase”?

The first and most urgent of these is what the CJEU means by the “place of purchase”. The Austrian court that submitted the reference for a preliminary ruling had identified three different places that could meet this description: (1) the place where the contract to purchase  the cars had been concluded, (2) the place where the purchase price had been paid, and (3) the place where the transfer or delivery of the vehicles had taken place (see para 10 of the judgment). In the dispute at hand, all three places happened to be located in the same district, but this will not be the case universally. In cases where they are different, which of these three places is the CJEU referring to?

What is the Role of the Place of Marketing?

The second question relates to the extent to which competent court will be foreseeable. The CJEU reasoned that the manufacturer must have anticipated that damage will occur at the place of purchase, as it knowingly contravened the statutory requirements imposed on it at this location (para 37). But this place of damage is foreseeable only on the assumption that VW will always market the vehicles in the country of purchase. That the place of acquisition and the place of marketing can differ is illustrated by Article 5(1)(b) Rome II Regulation.

Proximity of Tribunal or Protection of Tort Victims?

Third, one may harbour doubts about the CJEU’s argument that the tribunal at the place of purchase is best placed to carry out the assessment of damage (para 38). Proximity and the sound administration of justice would rather have suggested concentrating all cases in the court of the place of the manufacturer. The Court passed in silence over the main justification for locating jurisdiction over the tort in Austria; namely, the advantage to the tort victims in sparing them and their assignee the need to bring their claims in the home jurisdiction of the manufacturer, i.e. in Germany.

Purely Financial Loss or Not?

Fourth, it is unclear why the CJEU spent so much effort diffusing the referring court’s idea that the damage was “purely financial”. The Court of Justice was at great pains to make clear that the present case concerns material damage because the buyers received a vehicle with a defect (paras 32-35). Yet it did not draw any conclusions from this characterisation; in particular, it did not locate the damage at the place where the car had been used or registered. Instead, the Court abstracted from the vehicles and referred to the place of purchase, where the only loss incurred was…ehm…financial.

Parallel to Unfair Competition?

Fifth, it is a mystery why the CJEU – in holding that the damage occurred at the place of purchase for the purposes of Article 7 no 2 Brussels I bis Regulation – drew an analogy to the rules on unfair competition in Article 6(1) Rome II Regulation (para 39). The present case was not about unfair competition. Instead, the claimant brought a number of damages claims for defective vehicles.

Similarly, the situation was also quite different from the case of VKI v Amazon to which the Court of Justice referred. In that case, VKI had claimed in its own right when it applied for an injunction to restrain the use of unfair contract terms under the national law transposing Directive 2009/22/EC; whereas in the present case, it now brought a number of individual claims that had been assigned to it. It is true that the CJEU had ruled in VKI v Amazon that collective and individual claims must be treated under the same law. Yet this statement was made in the context of the validity of standard contract terms; it does not nearly have the same force with regard to damages claims. Even under the Court of Justice’s own standard in the new VW case, the latter will be judged under different laws and by different courts, depending on the country in which the vehicles were purchased.

An Alternative Proposal

The place of purchase that the CJEU identifies as the place where the damage occurred may be fortuitous, is subject to possible manipulation, and can hardly be determined in the case of e-commerce. It would have been more convincing to take into account other circumstances, such as the place of habitual residence of the purchasers, the place where they used the vehicle, and the place of marketing, as already suggested in this blog. Advocate General Sánchez Bordona had also suggested a combination of the place of purchase and the place of marketing. Only a holistic approach can properly balance the interests of the claimant and the defendant.

Trevor Hartley (London School of Economics) has published the 3rd edition of his textbook on International Commercial Litigation.

The book combines extensive texts presenting the topics discussed and extracts from cases and legislative materials (European regulations, international conventions, national acts). It is a mix of a textbook and a casebook.

As its title suggests, the focus of the book is on international civil procedure. It presents in depth issues of jurisdiction and foreign jugdments, but also freezing assets and the taking of evidence abroad. As its title does not suggest, the last part of the book also covers choice of law, and offers an in depth treatment of choice of law in contracts, torts and property.

The book is remarkable by the comparative stance that it takes on all the topics that the covers. It systematically presents the position in the EU, in England and in the U.S. It also sometimes includes cases and materials from other common law jurisdictions such as Canada.

Taking a fresh and modern approach to the subject, this fully revised and restructured textbook provides everything necessary to gain a good understanding of international commercial litigation. Adopting a comparative stance, it provides extensive coverage of US and Commonwealth law, in addition to the core areas of English and EU law. Extracts from key cases and legislative acts are designed to meet the practical requirements of litigators as well as explaining the ideas behind legal provisions. Significant updates include coverage of new case-law from the Court of Justice of the European Union. Of particular importance has been a set of judgments on jurisdiction in tort for pure financial loss, many of which have involved investment loss. New case law from the English courts, including the Supreme Court, and from the Supreme Court of the United States, is also covered.

Mark C. Weidemaier (University of North Carolina School Law) and G. Mitu Gulati (Duke Law School) have posted Unlawfully-Issued Sovereign Debt on SSRN.

The abstract reads:

In 2016, its economy in shambles and looking to defer payment on its debts, the Venezuelan government of Nicolás Maduro proposed a multi-billion dollar debt swap to holders of bonds issued by the government’s crown jewel, state-owned oil company Petroleós de Venezuela S.A. (“PDVSA”). A new government now challenges that bond issuance, arguing it was unlawful under Venezuelan law. Bondholders counter that this does not matter—that PDVSA freed itself of any borrowing limits by agreeing to a choice-of-law clause designating New York law.

The dispute over the PDVSA 2020 bonds implicates a common problem. Sovereign nations borrow under constraints imposed by their own laws. Loans that violate these constraints may be deemed invalid. Does an international bond—i.e., one expressly made subject to the law of a different jurisdiction—protect investors against that risk? The answer depends on the text of the loan’s choice-of-law clause, as interpreted against the backdrop of the forum’s rules for resolving conflict of laws problems.

We show that the choice-of-law clauses in many international sovereign bonds—especially when issued under New York law—use language that may expose investors to greater risk. We document the frequent use of “carve outs” that could be interpreted to require the application of the sovereign’s local law to a wide range of issues. If interpreted in this way, these clauses materially reduce the protection ostensibly offered by an international bond. We explain why we think a narrower interpretation is more appropriate.

Rebecca Legendre (University of Paris 2 Panthéon-Assas) has just published a monograph on fundamental rights and private international Law based on her doctoral thesis: Droits fondamentaux et droit international privé – Réflexion en matière personnelle et familiale, Dalloz, 2020.

The author has provided the following abstract in English:

Fundamental rights put private international law to the test. First, the context in which private international law operates has evolved. Fundamental rights have created a better, closer, intertwining of the separate state legal orders and have achieved a higher protection for  the persons as they experience international mobility. If this evolution does not threaten, as such, the existence of private international law, it must be acknowledged that fundamental rights modify its analysis. Whereas the conflicts between legal orders are transformed into conflicts between values, the hierarchy of interests protected by private international law is replaced by a balancing of these interests. The solutions of private international law are thus disrupted by the enforcement of fundamental rights through litigation.  Proportionality is at the source of this disruption. Being a case by case technique of enforcement of fundamental rights, the influence of the proportionality test on private international is uneven. If the proportionality test is found to be overall indifferent to the methods of private international law, its main impact is on the solutions of PIL. The European courts are indeed prone to favour the continuity in the legal situations of the persons, over the defence of the internal cohesion of the state legal orders. As a consequence, private international law is invited to reach liberal solutions. The enforcement of fundamental rights through litigation must hence be clarified so as to maintain a measure of authority and predictability of the solutions of the rules of conflict of laws, international jurisdiction and recognition of foreign judgements. It is, on the one hand,  by methodologically dissociating the enforcement of fundamental rights from the public policy exception and, on the other hand, through an amendment to the proportionality test, that the balance of private international may hopefully be restored.

More details are available here.

Franco Ferrari (New York University Law School) has posted A New Paradigm for International Uniform Substantive Law Conventions on SSRN.

The abstract reads:

This paper posits that a paradigm shift has taken place in respect of the way the relationship between private international law and international uniform law conventions is understood. The author shows that recent international uniform law conventions evidence that their drafters do not consider the relationship to be an antagonistic one, but rather one of symbiosis.

The paper was published in the Uniform Law Review.

Csongor István Nagy (University of Szeged), has posted on SSRN a paper titled The Reception of Collective Actions in Europe: Reconstructing the Mental Process of a Legal Transplantation, also published on the Journal of Dispute Resolution.

The European collective action is probably one of the most exciting legal transplantation comparative law has seen. Collective litigation, which U.S. law did not inherit from common law but invented with the 1966 revision of class actions, has been among the most successful export products of American legal scholarship. Today in the European Union, seventeen out of twenty–eight Member States have adopted a special regime for collective actions. At the same time, collective actions are intrinsically linked to various extraneous components of the legal system; hence, their transplantation calls for a comprehensive adaptation. The need to rethink class actions has not only generated a heated debate in Europe about whether and how to introduce collective actions, but resulted in Europe’s making collective actions in its own image, producing something truly European: a model of collective actions à l’européenne. This Article presents the process of developing the European collective action and its outcome. It represents the first attempt to give a trans-systemic account of European collective actions and to elucidate them in light of the peculiarities and idiosyncrasies of the mindset of European jurisprudence. Further, this Article gives an analytical presentation of the emerging European collective action model and demonstrates how it was shaped by Europe’s legal thinking and societal attitudes.

Pravovedenie, an academic peer-reviewed legal journal published quarterly in Russia is calling for papers to be included in a special issue of the journal.

The special issue will be about Ensuring the Best Interests of the Child in International Family Procedures. Contributions should deal with the cooperation of States in ensuring the implementation of international legal instruments regulating relations to protect the best interests of the child, as well as in evaluating the necessary efforts to be made by States parties to international treaties to remove obstacles to the implementation of international treaties in the field of international family law.

Submissions are expected by 1 June 2021 at the latest, but the editors encourage interested authors to notify their intention to contribute to the special issue in advance.

A detailed description of the topic of the special issue, together with practical information on submissions, can be found here.

The Court of Justice of the European Union has delivered its ruling in the Novo Banco case (C‑253/19) on 16 July 2020.

The issue before the Court was the determination of the center of main interests (COMI) of individuals not exercising an independent business or professional activity under the Insolvency Regulation, and thus the jurisdiction of the courts of the Member States to open insolvency proceedings against such individuals.

Article 3(1) of the Insolvency Regulation provides that the COMI of such individuals is presumed to be at their place of habitual residence. The issue was more precisely how this presumption could be rebutted.

In this case, the individuals were English residents who were employed in Norfolk. Yet, they claimed that the centre of their main interests was not their habitual residence in the United Kingdom, but rather in Portugal, the Member State where the sole immovable asset which they own was located and where all the transactions and all the contracts leading to their insolvency were conducted and concluded. Furthermore, there was no connection between their place of habitual residence and the events that led to their insolvency, which occurred entirely in Portugal.

The Court ruled:

28 Although the location of the debtor’s assets is one of the objective criteria, ascertainable by third parties, to be taken into consideration when determining the place where the debtor conducts the administration of his or her interests on a regular basis, that presumption may be reversed only following an overall assessment of all the objective criteria. It follows that the fact that the only immovable property of an individual not exercising an independent business or professional activity is located outside the Member State of his or her habitual residence is not sufficient on its own to rebut that presumption.

29 In the present case, the applicants in the main proceedings also argue before the referring court that Portugal is not only the Member State where their only immovable property is located but also the Member State where all the transactions and all the contracts leading to their insolvency were conducted and concluded.

30 In that regard, although the cause of the insolvency is not, as such, a relevant factor for determining the centre of the main interests of an individual not exercising an independent business or professional activity, it nevertheless falls to the referring court to take into consideration all objective factors, ascertainable by third parties, which are connected with that person’s financial and economic situation. In a case such as the one in the main proceedings, as was observed in paragraph 24 above, that insolvency situation is located in the place where the applicants in the main proceedings conduct the administration of their economic interests on a regular basis or the majority of their revenue is earned and spent, or the place where the greater part of their assets is located.

31 In view of all of the foregoing factors, the answer to the question is that the first and fourth subparagraphs of Article 3(1) of Regulation 2015/848 must be interpreted as meaning that the presumption established in that provision for determining international jurisdiction for the purposes of opening insolvency proceedings, according to which the centre of the main interests of an individual not exercising an independent business or professional activity is his or her habitual residence, is not rebutted solely because the only immovable property of that person is located outside the Member State of habitual residence. 

On 16 July 2020, the Government of Portugal decided to start the process whereby Portugal will, in due course, become a party to the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Today, the Convention is internationally in force for 93 States. Once in force for Portugal, it will be binding on all the current members of the European Union, with the exception of Ireland and Malta.

The French Committee for private international law will hold a conference on the codification of private international law in the afternoon of 9 October 2020, in Paris.

The first speaker will be Geraldine Gazo, who practices in Monaco, and who will present the recent law on private international law adopted by Monaco in 2017.

The second speaker will be Justice Jean-Pierre Ancel, who is a former president of the first civil Chamber of the Cour de cassation, and now presides over a working group on the codification of French private international law.

The exact time and location are to be announced on the website of the Committee.

Woo-jung Jon is the author of Cross-border Transfer and Collateralisation of Receivables – A Comparative Analysis of Multiple Legal Systems, published by Hart Publishing.

Legal systems around the world vary widely in terms of how they deal with the transfer of and security interests in receivables. The aim of this book is to help international financiers and lawyers in relevant markets in their practice of international receivables financing. Substantively, this book analyses three types of receivables financing transactions, ie outright transfer, security transfer and security interests. This book covers comprehensive comparison and analysis of the laws on the transfer of and security interests in receivables of fifteen major jurisdictions, encompassing common law jurisdictions, Roman–Germanic jurisdictions and French–Napoleonic jurisdictions, as well as relevant EU Directives. To be more specific, this book compares and analyses the relevant legal systems of the US, Canada, New Zealand, Australia, Korea, Japan, France, Belgium, England, Hong Kong, Singapore, China, Germany, Austria and the Netherlands. Furthermore, in order to analyse those legal systems from the international perspective, this book compares relevant international conventions; it also proposes to establish an international registration system for the transfer of and security interests in receivables.

More information here.

Apostolos Anthimos has posted on SSRN a paper titled Recognition and Enforcement of Foreign Judgments in the Field of Bilateral Conventions of Greece with Balkan States.

The purpose of this paper is to present the current legislative framework and the practice of Greek courts with respect to the recognition and enforcement of foreign judgments falling under the scope of bilateral conventions signed with Balkan States. Prior to presenting individual conventions and related case-law, few brief remarks are given on the role of bilateral treaties in the Greek landscape. A special chapter is dedicated to the conditions for recognition and enforcement, cutting horizontally through all conventions included in the scope of this paper. The findings of the research suggest that, on a bilateral level, judgments from the Balkan States are generally recognized in Greece.

The number of transnational couples continuously increases within the European Union. At the same time, there are still large differences between the national rules on matrimonial property regimes and on the property consequences of registered partnerships. These disparities do not only affect the property relations among such couples themselves, but also – and even more – third parties contracting with transnational couples.

Some jurisdictions provide, for instance, that contracts between one spouse and a third party are not legally effective without the consent of the other spouse, especially in case of real estate transactions. One example of such a rule is the notorious Article 215(3) of the French Code Civil.

Third parties can be surprised by such limitations because they may not be aware that the law of another jurisdiction applies. In many cases, third parties may not even know at all that their business partner belongs to a couple with a transnational background. There is thus a strong need for third party protection not only on the national level, but also in private international law.

In the future, these conflict-of-laws problems must be solved on the basis of the new Council Regulations (EU) 1103/2016 and 1104/2016, which became applicable in their entirety on 29 January 2019. The scope of the Regulations explicitly includes third-party relations. However, the Regulations only provide fragmentary rules on third party protection. A new book analyses these provisions, identifies open questions and submits proposals how the gaps in the Regulations could be filled (Stephan Gräf, Drittbeziehungen und Drittschutz in den Europäischen Güterrechtsverordnungen, Mohr Siebeck 2019).

As the title indicates, the book is written in German. It starts with a comparative analysis of the differences between the national rules on matrimonial property regimes focussing on third party effects. In a subsequent chapter, the author outlines the conflict of law rules of the Regulations and points out that the applicable law can hardly be foreseen by third parties.

On this basis, Stephan Gräf analyses the core provision of third-party protection in both Regulations, namely their respective Article 28 (protection of the good faith of third parties). Although the provision appears to be quite detailed, it is in fact merely fragmentary and partially inconsistent. For example, it does not mention the exact subject of the required good faith of the third party (the applicable law, the particular matrimonial regime within the applicable law or the particular legal effect of the applicable law?). The provision also does not clarify that it is restricted to contractual transactions.

The Regulations furthermore contain provisions for the protection of third-party rights in case of a change of the applicable law with retroactive effect. The wording of the provisions, however, is extremely short. Many questions are left to the interpretation by the courts. Stephan Gräf analyses the scope and the legal consequences of these provisions. He shows, for instance, that they also apply when the applicable law changes only with effect for the future.

The book furthermore deals with the highly controversial coordination between international property law (lex rei sitae rule) on the one hand and the international matrimonial law on the other hand. This matter also affects third parties contracting with married persons. The author argues for the primacy of the lex rei sitae in so far as immovable property is concerned. On this point, he disagrees with the Kubicka decision of the European Court of Justice, which deals with the relationship between the EU Succession Regulation and the lex rei sitae rule.

Additionally, the book addresses the Regulations’ rules on jurisdiction (Articles 4 et seq.). It focuses on the question whether these rules apply in disputes between married persons and third parties. Despite its relevance this question has rarely been discussed so far. The Regulations lack explicit provisions on this matter. Relying on the ECJ’s approach on Article 27 of the Brussels I Regulation (recast: Article 29), Stephan Gräf argues that Articles 4 et seq. of the Regulations govern where matrimonial property law is the “heart of the action”. In disputes with third parties, this is rarely the case, as matrimonial property law typically only becomes relevant on the level of preliminary questions.

Overall, this new book provides valuable insights on the relation of Regulations on matrimonial property regimes and on the property consequences of registered partnerships with the rights and obligations of third parties. Interestingly, the author not only addresses the protection of spouses, but also that of third parties that do not know about the family relation. The Regulations are still young, and is to be expected that this book will influence their interpretation and application in practice.