Agrégateur de flux

The author of this post is Christelle Chalas, who is an Associate Professor at the University of Lille. 

The French law on the compliance with the Republican Principles (projet de loi confortant le respect des principes de la République) introduces a new paragraph in Article 913 of the French Civil Code aiming at re-establishing a right of ‘compensatory levy’ (droit de prélèvement compensatoire) on property situated in France for the benefit of children who would not benefit from a reserved share of inheritance.

Its scope is limited to cases where either the deceased or one of his or her children is a national of a Member State of the European Union or a person whose habitual residence is in such a State.

The new text reads:

Lorsque le défunt ou au moins l’un de ses enfants est, au moment du décès, ressortissant d’un État membre de l’Union européenne ou y réside habituellement et lorsque la loi étrangère applicable à la succession ne permet aucun mécanisme réservataire protecteur des enfants, chaque enfant ou ses héritiers ou ses ayants cause peuvent effectuer un prélèvement compensatoire sur les biens existants situés en France au jour du décès, de façon à être rétablis dans les droits réservataires que leur octroie la loi française, dans la limite de ceux-ci.

The law was eventually adopted by the National Assembly on 23 July 2021. The bill had been rejected twice by the Senate in April 2021 (see here) and then on 20 July 2021, but the National Assembly had voted twice in favour of its adoption (in February and July 2021, see here). Under the French legislative system, the Assembly’s deliberations ultimately prevail. The constitutionality of the bill was immediately challenged before the Constitutional Council (Conseil constitutionnel) (see below).

A compensatory levy was instituted in French inheritance law by the law of the 14 July 1819 but it was found to be unconstitutional by the Constitutional Council in 2011 (see here) on the ground that it disregarded the principle of equality by establishing an inequal treatment based on nationality between the heirs designated by the foreign inheritance law.

Although the new text avoids this obvious violation of the principle of equality by granting this right to all heirs whatever their nationality or residence, it raises several problems that threaten its validity.

These problems are interesting because they illustrate the small margin of freedom that national legislators still enjoy in particular with regard to European law. From a domestic perspective, issues of constitutionality also arose.

Regarding the conformity of Article 913 with the French Constitution, it is submitted that the main concern is the appropriateness of the “droit de prélèvement” with regard to the purpose of the law. It was said during the discussion in the Senate, and shown in French doctrine (Revue critique de DIP 2021, issue 2, announced here) that there is a high risk that the provision misses its target.

The purpose of Article 913 is to steer against the effects of an applicable foreign inheritance law that would discriminate between heirs according to their sex or religion. More specifically, the government did not hide that the provision aims at protecting female heirs from the inheritance laws of Muslim countries. But, since Article 913 does not limit its application to discriminatory foreign laws, but is concerned with foreign laws which “do not permit any reserved share mechanism”, the provision could reach situations that in no way threaten “Republican Principles” (here, equality) and, conversely, Article 913 could miss situations that do threaten these principles. Indeed, the laws of common law countries could be concerned as they do not provide for reserved shares, while, on the contrary, Article 913 could possibly not apply to Muslim laws since they might provide for a reserved share.

One can also be very critical about the weakness of the required connection with France: by rendering the mechanism available to all children heirs as long as only one of them, or the deceased, is a national of a Member State of the EU or is resident in one of theses states, it is very easy to imagine situations in which the protection of the French law will appear inappropriate, if not illegitimate. The real object of the law remains unclear and this raises concerns about the adequacy of the compensatory system set in place. This could be a reason for unconstitutionality.

Furthermore, if the only purpose of Article 913 is to fight against discriminatory foreign laws, the public policy exception should be efficient enough. The French Supreme Court for civil and criminal matters (Cour de cassation) could transpose its own jurisprudence on repudiation to the context of reserved share in inheritance law.

The other advantage of the public policy exception is that it allows a concrete and factual assessment of the result produced by the application of the foreign law.  For example, the family provisions of English law would be spared by the public policy exception while it is not sure that the new text would not receive application in this case.

Unfortunately, it does not seem that any of the parties who participated in the challenge of the constitutionality of the law raised any argument with respect to the new provision. On August, 13th, 2021, the Constitutional Council delivered its decision without addressing the issue.

The conformity of Article 913 with the European Succession Regulation could also be questioned on several grounds.

Article 23 of the Regulation provides that “the law determined pursuant to Article 21 and Article 22 shall govern the succession as a whole. That law shall govern in particular, … the disposable part of the estate, the reserved shares and other restrictions on the disposal of property upon death as well as claims which persons close to the deceased may have against the estate or the heirs”. By putting in place a right of compensatory levy on property situated in France, Article 13 sets a new exemption on the applicable law designated by the Regulation.

The European Court of justice might not accept this type of circumvention of the applicable law, in particular when the deceased person has chosen its national law in accordance with Article 22. Recital 38 of the Preamble to the Regulation specifies that the choice of law is limited to the national law of the deceased precisely with the objective “to avoid a law being chosen with the intention of frustrating the legitimate expectations of persons entitled to a reserved share”. A limited and voluntary infringement to the reserved share is thus admitted by the Succession Regulation.

Article 913 would also possibly run against Recital 37 that states that the succession should be govern by a predictable law with which it is closely connected. Predictability and necessity of a close connection between the applicable law and the succession are clearly challenged by the French draft provision. Recital 37 also recommends that “for reasons of legal certainty and in order to avoid the frag­mentation of the succession, that law should govern the succession as a whole”. On the contrary, the compensatory levy instituted by French law results in the application of several inheritance laws.

The only solution would be to consider that the French compensatory levy right falls under the public policy exception set out in Article 35 of the Regulation. But neither here can there be certainty. As is well known, the Court of Justice supports a very restrictive application of the public policy exception, which is reinforced by the requirement in Article 35 that the application of a provision of the law specified by the Regulation should be “manifestly incompatible” with the public policy of the relevant State. Through its control, The European Court of Justice limits any misuse of the concept of public policy that would have the effect of impeding the effectiveness of European regulations.

In this respect, it seems that the nuanced jurisprudence of the French Supreme Court, which limits the exclusion of foreign law to cases where a child heir is in a situation of economic insecurity or need, is more in line with the requirement of Article 35.

Non lieu à renvoi

Irrecevabilité

The third issue of 2021 Lloyds’s Maritime and Commercial Law Quarterly was published today. It features one article and a book review on private international law.

M Teo,  “A Negotiation-Based Choice of Law Rule for Contractual Formation”

A Briggs, “Book Review – The Private International Law of Authentic Instruments”

Non lieu à renvoi

Contrôle judiciaire

Séquestration

Tribunal judiciaire d'Evry

Pourvoi c. déc. Cour d'appel de Rouen du 17 juin 2021

Pourvoi c. déc. Cour d'appel de Rouen du 17 juin 2021

The Faculty of Law, Brawijaya University, Indonesia is organizing a one-day international online seminar on Private International Law in Islamic Countries – Developments and Challenges. The main purpose of the seminar is to examine and discuss the current situation of private international law in Islamic countries especially from the point of view of the influence of religion (Sharia/Islamic law) on the regulation of private international relationships.

Participation is free but online registration (here)  is kindly requested to receive the link to the conference, which will be emailed shortly before the event.

After registering, attendees will receive a confirmation email containing information about joining the webinar. The event will also be live streamed via YouTube (here). E-certificate for attendance will also be issued for attendees to prove that they joined the online seminar.

Details about the forthcoming seminar are as follows:

Date: 24 August 2021

Time: 13:00 (Western Indonesia Time); 14:00 (Brunei & Hong Kong Time); 15:00 (Japan Time)

Program (details can be found here):

1. Admittance for Key-note Speaker, Invited Speakers, and Seminar
2. Opening Ceremony by the Dean of the Faculty of Law, Brawijaya
3. Keynote Speech by Professor Yun Zhao, Representative of the HCCH Regional Office for Asia and the Pacific
4. Seminar Presentation (Moderator: Cyndiarnis, SH. MKn)

• • a. Associate Professor Béligh Elbalti, Ph.D., Graduate School of Law and Politics, Osaka University (The Influence of Islamic Law Principles on the Treatment of International Private Relationships – Family Law as Example)
  • b. Nobumichi Teramura, Assistant Professor of the Institute of Asian Studies, and University of Brunei Darussalam (Shariah as the Law Applicable to an International Commercial Contract: Challenges and Opportunities in Australia and Brunei)
  • c. Afifah Kusumadara, SH. LL.M. SJD., Faculty of Law, Brawijaya University (The connecting factors to determine the applicable law and the court jurisdiction in Indonesia: The interference of religion)

5. Question and Answer
6. Photo Session and Closing
7. Announcement by the M.C. concerning:

• • Certificates of Participation
  • Seminar materials

Any enquiries should be directed to seminar_pil@ub.ac.id. The organisers are looking forward to having fruitful discussion with and exchange of ideas among all participants.

A foreign judgment that cannot be enforced is useless no matter how well it is/was written. The fact that a foreign judgment can be readily enforced aids the prompt settlement of disputes and makes international commercial transactions more effective.  The importance of the enforcement of foreign judgments cannot be over-emhpasised because international commercial parties are likely to lose confidence in a system that does not protect their interests in the form of recognising and enforcing a foreign judgment.

Today Hart published a new private international law monograph focused on the recognition and enforcement of foreign judgments. Its title is “The Hague Judgments Convention and Commonwealth Model Law: A Pragmatic Perspective.” The author of this monograph is Dr Abubakri Yekini of the Lagos State University. The monograph is based on his PhD thesis at the University of Aberdeen titled “A Critical Analysis of the Hague Judgments Convention and Commonwealth Model Law from a Pragmatic Perspective.”

The abstract of the book reads as follows:

“This book undertakes a systematic analysis of the 2019 Hague Judgments Convention, the 2005 Hague Choice of Court Convention 2005, and the 2017 Commonwealth Model Law on recognition and Enforcement of Foreign Judgments from a pragmatic perspective.

The book builds on the concept of pragmatism in private international law within the context of recognition and enforcement of judgments. It demonstrates the practical application of legal pragmatism by setting up a toolbox (pragmatic goals and methods) that will assist courts and policymakers in developing an effective and efficient judgments’ enforcement scheme at national, bilateral and multilateral levels.

Practitioners, national courts, policymakers, academics, students and litigants will benefit from the book’s comparative approach using case law from the United Kingdom and other leading Commonwealth States, the United States, and the Court of Justice of the European Union. The book also provides interesting findings from the empirical research on the refusal of recognition and enforcement in the UK and the Commonwealth statutory registration schemes respectively.”

I have had the benefit of reading this piece once and can confidently recommend it to anyone interested in the important topic of recognition and enforcement of foreign judgments. The pragmatic approach utilised in the book makes the work an interesting read. My prediction is that this book will endure for a long time, and will likely be utilised in adjudication.

Mandat d'arrêt européen

In the judgment in TeamBank dated 19 January 2019, the CJEU ruled that Article 14 of the Rome I Regulation does nothing to identify the law governing the effects of assignment in relation to third parties. The court referred, inter alia, to Article 27(2) of the Rome I Regulation, which tasked the Commission to report on this issue and propose an amendment to the Regulation. In the meantime, the question will be governed by national conflict-of-laws rules.

But by which one? This interesting point was subsequently decided in a judgment by the Court of Appeal (Oberlandesgericht) Saarbrücken (Germany), which had requested the preliminary ruling from the CJEU.

The legal situation in Germany in this respect is somewhat unclear. Until 2009, the Introductory Act to the German Civil Code (EGBGB) featured a rule on the law applicable to assignment in its former Article 33. Although this provision did not explicitly address third-party effects, it was interpreted by the courts and most authors as submitting them to the law of the assigned claim. Yet Article 33 EGBGB was repealed in 2009 by the German legislator because it considered the rule as no longer necessary due to entry into force of the Rome I Regulation.

Thus, the important gap of the Rome I Regulation regarding third-party effects of assignment, which the CJEU had correctly identified in TeamBank, became all the more significant. To close it, the Court of Appeal Saarbrücken refers to the old EGBGB rule and its long-standing interpretation. In the eyes of the court, the repeal of the provision does not matter, given the advantages of applying the law of the assigned claim to third-party effects. Specifically, the court highlights the rule’s contribution to the goal of legal certainty, which could not be achieved by other connecting factors. Moreover, it explicitly rejects the habitual residence of the assignor in this context, as it would not allow the same degree of predictability in the case of sequential assignments.

Applying this conflicts rule, the court determines the law of Luxembourg as governing the third-party effects in the present litigation. To recall: In the underlying case, a Luxembourgish civil servant habitually resident in Germany had twice assigned her salary claims against her employer, first to a bank in Germany and thereafter to a bank in Luxembourg, before becoming bankrupt. The debtor was only informed of the second assignment. Afterwards, the two banks had a dispute about the rights to the salary.

The Court of Appeal starts by considering the validity of the first assignment from the point of view of German substantive law, which governs the assignment under Art 14(2) Rome I Regulation. However, these considerations were ultimately futile. Only thereafter did the court address the real issue, i.e. the law applicable to the third-party effects of the assignment.

Since the claim assigned was governed by Luxembourgish law, the court held the same to be applicable to the dispute between the banks before it. Based on an expert opinion, the court considers only the second assignment, which had been notified to the debtor, as valid under Luxembourg law. The fact that the previous assignment is valid under German law without any notice to the debtor would not matter as Luxembourgish law governs the third-party effects of both assignments.

The Court of Appeal does not fail to acknowledge that under the European Commission’s Proposal for a Regulation on the law applicable to the third-party effects of assignment of claims, the connecting factor will be different because the habitual residence of the assignor takes centre stage (see Article 4(1) of the Proposal). However, the court also points to the various exceptions to this rule in Article 4(2) and (3) of the Proposal. Moreover, it points to the rule for priority conflicts in Article 4(4) of the Proposal. The court takes the view that the latter rule would have yielded the same result it had reached in the present case, i.e. the applicability of the law of Luxembourg.

It is respectfully submitted that the court erred on this last point. Article 4(4) of the Proposal contains a rule for priority conflicts that may arise where two assignments are covered by Article 4(1) and Article 4(2) or (3) of the Proposal. It therefore presupposes the applicability of two diverging connecting factors – habitual residence on the one hand, and the law governing the claim on the other. This, however, was not the case in the situation faced by the Court of Appeal, in which the one and the same rule and connecting factor – that of the habitual residence under Article 4(1) of the Proposal – would have been applicable. Had the Proposal already been adopted, it would thus have resulted in the applicability of German law and, consequently, the validity of the first assignment.

The case offers two take-aways: First, there is still considerable support in national courts for the law of the assigned claim as the relevant connecting factor for third-party effects of assignment. The long-awaited Regulation of the Commission will thus have to entail significant changes in the attitudes.

Second, the case illustrates that the complex Commission’s Proposal lends itself to misunderstandings, even in its – easier – original form. One of the major challenges will be to educate lawyers about its meaning and secure its correct application by courts throughout the Union.

Many thanks to Verena Wodniansky-Wildenfeld and Amy Held for their contribution to this post.

Yesterday (10 August 2021), the Hague Conference issued a press release according to which, on 23 July 2021, New Zealand ratified the Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, which will enter into force for it on 1 November 2021.

Source : https://www.hcch.net/en/news-archive/details/?varevent=814

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on 12 August 2021 at 5:00 pm (Mexico City time – CDT), 12:00 am (CEST time). The topic of the webinar is two thesis on private international law and will be presented by Professor Leonel Pereznieto Castro (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/84229739402?pwd=bXlib3IzQnkvUjlzS0VTbVQvcEpLQT09

Meeting ID: 842 2973 9402

Password: BMAAMEDIP

Participation is free of charge. This event will also be streamed live: https://www.facebook.com/AmedipMX

AMEDIP is also giving a series of lectures in a course addressed to judges and judicial officers, among others. This course consists of 100 hours of lectures on Private International Law and is being organized by the Federal Judicial School of Mexico. The program is available here.

As this course deals with a broad range of topics, it will have an impact on the better understanding of Private International Law in the Mexican judicial branch and may lead to better decision making in international cases. For more information, click here.

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal).

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/

Online Event on 11 and 12 August

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal). This online event involves lawyers from Brazil, Mexico, and Portugal.

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/“

The Brazilian Association of Internationalist Lawyers (ABRINTER) will hold on August 11 and 12 its 1st Cycle of Lectures with the theme “Perspectives and Challenges of the New Borderless Law Practice” (in Portuguese).

The event brings 27 lectures on various topics involving law and international private law practice, and celebrates the cooperation protocols signed by the Brazilian association and the Federation of Young Lawyers from Mexico (Mexico) and the Algarve Law Association (Portugal).

Registration is free of charge. To register access the ABRINTER’s website: https://www.abrinter.adv.br/

Tort Choice of Law Rules in Cross-border Multi-party Litigation under European and Chinese Private International Law

By Zhen Chen, PhD Researcher, University of Groningen

This blog post is part of the article ‘Tort Conflicts Rules in Cross-border Multi-party Litigation: Which Law Has a Closer or the Closest Connection?’ published by the Maastricht Journal of European and Comparative Law with open access, available at https://doi.org/10.1177/1023263X211034103. A related previous post is ‘Personal Injury and Article 4(3) of Rome II Regulation’, available here https://conflictoflaws.net/2021/personal-injury-and-article-43-of-rome-ii-regulation/

This article compares Owen v. Galgey under Article 4 Rome II Regulation and YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act in the context of cross-border multi-party litigation on tort liability. As to the interpretation of tort conflicts rules, such as lex loci delicti, the notion of ‘damage’, lex domicilii communis and the closer/closest connection test, these two cases demonstrate different approaches adopted in European and Chinese private international law. This article does not intend to reach a conclusion which law is better between Rome II Regulation and Chinese Conflicts Act, but rather highlights on a common challenge faced by both Chinese courts and English courts in international tort litigation and how to tackle such challenge in an efficient way.

I. Tort conflicts rules in China and the EU
It is widely accepted rule that lex loci delicti will be the applicable law for cross-border tort liability in private international law. This is also the case in China and the EU. The application of lex loci delicti, as a general rule, is stipulated in Article 44 Chinese Conflicts Act and Article 4(1) Rome II Regulation. However, Article 4(1) Rome II Regulation explicitly refers to the place of damage, namely ‘the law of the country in which the damage occurs’ (lex loci damni), and expressly excludes the place of wrong (‘the country in which the event giving rise to the damage occurred’) and the place of consequential loss (‘the country or countries in which the indirect consequences of that event occur’). By contrast, it remains unclear whether lex loci delicti in Article 44 Chinese Conflicts Act merely refers to lex loci damni, as such provision does not expressly state so.

The application of lex loci delicti in China and the EU is subject to several exceptions. Specifically, lex loci delicti is superseded by the law chosen by the parties under Article 44 Chinese Conflicts Act and Article 14 Rome II Regulation, while lex domicilii communis takes precedence over lex loci delicti under Article 44 Chinese Conflicts Act and Article 4(2) Rome II Regulation. Moreover, the escape clause enshrined in Article 4(3) Rome II Regulation gives priority to the law of the country which has a ‘manifestly closer connection’ with the tort/delict, of which the pre-existing relationship between the parties might be a contract. By contrast, Article 44 Chinese Conflicts Act does not provide an escape clause, but the closest connection principle, which is comparable to the closer connection test in Article 4(3) Rome II, is stipulated in several other provisions.

The questions raised in YANG Shuying v. British Carnival Cruise and Owen v. Galgey were how to determine the applicable law to tort liability in multiparty litigation under Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation and what are the criteria for the closer/closest connection test.

II. Owen v. Galgey under Article 4 Rome II Regulation
In case Owen v. Galgey , a British citizen Gary Owen domiciled in England, fell into an empty swimming pool which was undergoing renovation works at a villa in France owned by the Galgey Couple, domiciled in England, as a holiday home. The British victim sued the British couple, their French public liability insurer, the French contractor carrying out renovation works on the swimming pool and its French public liability insurer for personal injury compensation. As regards which law is applicable, the British victim contended that French law should be applied by virtue of Article 4(3) Rome II Regulation, since the tort was manifestly more closely connected with France than it was with England. The British defendants held that English law should be applicable law under Article 4(2) Rome II Regulation, because the claimant and the defendants were habitually resident in England. The English High Court held the case was manifestly more closely connected with France, because France was the country where the centre of gravity of the situation was located.

III. YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act

In case YANG Shuying v. British Carnival Cruise, a Chinese tourist domiciled in China, sued the British Carnival Cruise Company, incorporated in the UK, for personal injury sustained in a swimming pool accident happened in the cruise when it was located on the high seas. The plaintiff signed an outbound travel contract with Zhejiang China Travel Agency for such cruise tour. The plaintiff held that English law, as the lex loci delicti, should be applicable since the parties did not share common habitual residence in China and the accident occurred on the cruise, which can be regarded as the territory of the UK according to the floating territory theory. The place of wrong and the place of damage were both on the cruise under Article 44 Chinese Conflicts Act. The defendant and the third party argued that Chinese law should be applied since the parties had common habitual residence in China, the floating territory theory was inapplicable and the (indirect) damage of the tort took place in China.

The Shanghai Maritime Court adopted a strict interpretation of the term ‘the parties’ by excluding the third party and denied the application of floating territory theory in this case. The court held that the application of the lex loci delicti leads to neither English law nor Chinese law. Instead, it is advisable to apply the closest connection principle to determine the applicable law. Based on a quantitative and qualitative analysis ofTort Choice of Law Rules in Cross-border Multi-party Litigation under European and Chinese Private International Law

Zhen Chen

This blog post is part of the article ‘Tort Conflicts Rules in Cross-border Multi-party Litigation: Which Law Has a Closer or the Closest Connection?’ published by the Maastricht Journal of European and Comparative Law with open access, available at https://doi.org/10.1177/1023263X211034103. A related previous post is ‘Personal Injury and Article 4(3) of Rome II Regulation’, available here https://conflictoflaws.net/2021/personal-injury-and-article-43-of-rome-ii-regulation/

This article compares Owen v. Galgey under Article 4 Rome II Regulation and YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act in the context of cross-border multi-party litigation on tort liability. As to the interpretation of tort conflicts rules, such as lex loci delicti, the notion of ‘damage’, lex domicilii communis and the closer/closest connection test, these two cases demonstrate different approaches adopted in European and Chinese private international law. This article does not intend to reach a conclusion which law is better between Rome II Regulation and Chinese Conflicts Act, but rather highlights on a common challenge faced by both Chinese courts and English courts in international tort litigation and how to tackle such challenge in an efficient way.

I. Tort conflicts rules in China and the EU
It is widely accepted rule that lex loci delicti will be the applicable law for cross-border tort liability in private international law. This is also the case in China and the EU. The application of lex loci delicti, as a general rule, is stipulated in Article 44 Chinese Conflicts Act and Article 4(1) Rome II Regulation. However, Article 4(1) Rome II Regulation explicitly refers to the place of damage, namely ‘the law of the country in which the damage occurs’ (lex loci damni), and expressly excludes the place of wrong (‘the country in which the event giving rise to the damage occurred’) and the place of consequential loss (‘the country or countries in which the indirect consequences of that event occur’). By contrast, it remains unclear whether lex loci delicti in Article 44 Chinese Conflicts Act merely refers to lex loci damni, as such provision does not expressly state so.

The application of lex loci delicti in China and the EU is subject to several exceptions. Specifically, lex loci delicti is superseded by the law chosen by the parties under Article 44 Chinese Conflicts Act and Article 14 Rome II Regulation, while lex domicilii communis takes precedence over lex loci delicti under Article 44 Chinese Conflicts Act and Article 4(2) Rome II Regulation. Moreover, the escape clause enshrined in Article 4(3) Rome II Regulation gives priority to the law of the country which has a ‘manifestly closer connection’ with the tort/delict, of which the pre-existing relationship between the parties might be a contract. By contrast, Article 44 Chinese Conflicts Act does not provide an escape clause, but the closest connection principle, which is comparable to the closer connection test in Article 4(3) Rome II, is stipulated in several other provisions.

The questions raised in YANG Shuying v. British Carnival Cruise and Owen v. Galgey were how to determine the applicable law to tort liability in multiparty litigation under Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation and what are the criteria for the closer/closest connection test.

II. Owen v. Galgey under Article 4 Rome II Regulation
In case Owen v. Galgey , a British citizen Gary Owen domiciled in England, fell into an empty swimming pool which was undergoing renovation works at a villa in France owned by the Galgey Couple, domiciled in England, as a holiday home. The British victim sued the British couple, their French public liability insurer, the French contractor carrying out renovation works on the swimming pool and its French public liability insurer for personal injury compensation. As regards which law is applicable, the British victim contended that French law should be applied by virtue of Article 4(3) Rome II Regulation, since the tort was manifestly more closely connected with France than it was with England. The British defendants held that English law should be applicable law under Article 4(2) Rome II Regulation, because the claimant and the defendants were habitually resident in England. The English High Court held the case was manifestly more closely connected with France, because France was the country where the centre of gravity of the situation was located.

III. YANG Shuying v. British Carnival Cruise under Article 44 Chinese Conflicts Act

In case YANG Shuying v. British Carnival Cruise, a Chinese tourist domiciled in China, sued the British Carnival Cruise Company, incorporated in the UK, for personal injury sustained in a swimming pool accident happened in the cruise when it was located on the high seas. The plaintiff signed an outbound travel contract with Zhejiang China Travel Agency for such cruise tour. The plaintiff held that English law, as the lex loci delicti, should be applicable since the parties did not share common habitual residence in China and the accident occurred on the cruise, which can be regarded as the territory of the UK according to the floating territory theory. The place of wrong and the place of damage were both on the cruise under Article 44 Chinese Conflicts Act. The defendant and the third party argued that Chinese law should be applied since the parties had common habitual residence in China, the floating territory theory was inapplicable and the (indirect) damage of the tort took place in China.

The Shanghai Maritime Court adopted a strict interpretation of the term ‘the parties’ by excluding the third party and denied the application of floating territory theory in this case. The court held that the application of the lex loci delicti leads to neither English law nor Chinese law. Instead, it is advisable to apply the closest connection principle to determine the applicable law. Based on a quantitative and qualitative analysis of all connecting factors, the court concluded that China had the closest connection with the case and Chinese law applied accordingly.

IV. Comments

Both Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation apply to multi-party litigation on tort liability. Article 4(1) Rome II merely refers to lex loci damni and limits the concept ‘damage’ to direct damage, whilst Article 44 Chinese Conflicts Act can be interpreted broadly to cover the law of the place of wrong and the term ‘damage’ include both direct damage and indirect damage or consequential loss. As to lex domicilii communis, the law of the country of the common habitual residence of some of the parties, instead of all parties, should not be applicable in accordance with Article 4(2) Rome II and Article 44 Chinese Conflicts Act. The exercise of the closest connection principle or the manifestly closer connection test under 44 Chinese Conflicts Act and Article 4(3) Rome II Regulation requires the the consideration of all relevant factors or all the circumstances in the case. When conducting a balancing test, the factor of the place of direct damage should not be given too much weight to the extent that all other relevant factors are disregarded. A quantitive and qualitative analysis should be conducted to elaborate the relevance or weight of each factor to determine the centre of gravity of a legal relationship.
all connecting factors, the court concluded that China had the closest connection with the case and Chinese law applied accordingly.

IV. Comments

Both Article 44 Chinese Conflicts Act and Article 4 Rome II Regulation apply to multi-party litigation on tort liability. Article 4(1) Rome II merely refers to lex loci damni and limits the concept ‘damage’ to direct damage, whilst Article 44 Chinese Conflicts Act can be interpreted broadly to cover the law of the place of wrong and the term ‘damage’ include both direct damage and indirect damage or consequential loss. As to lex domicilii communis, the law of the country of the common habitual residence of some of the parties, instead of all parties, should not be applicable in accordance with Article 4(2) Rome II and Article 44 Chinese Conflicts Act. The exercise of the closest connection principle or the manifestly closer connection test under 44 Chinese Conflicts Act and Article 4(3) Rome II Regulation requires the the consideration of all relevant factors or all the circumstances in the case. When conducting a balancing test, the factor of the place of direct damage should not be given too much weight to the extent that all other relevant factors are disregarded. A quantitive and qualitative analysis should be conducted to elaborate the relevance or weight of each factor to determine the centre of gravity of a legal relationship.