Agrégateur de flux

Written by Giesela Rühl, University of Jena/Humboldt-University of Berlin

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. Corporate social responsibility has been the subject of lively debates in private international law for many years. These debates revolve around the question of whether companies domiciled in countries of the Global North can be held liable for human rights violations committed by foreign subsidiaries or suppliers in countries of the Global South (so-called supply chain liability).

2. According to the majority view in the public international law literature, companies are not, at least not directly bound by human rights. Although numerous international law instruments, including the UN’s 2011 Guidelines for Business and Human Rights (Ruggie Principles), also address companies, liability for human rights violations is, therefore, a matter of domestic law.

3. The domestic law applicable to liability for human rights violations must be determined in accordance with the provisions of (European) private international law. Direct recourse to the lex fori, in contrast, is not possible. The legal situation in Europe is, therefore, different from the United States where actions which are brought on the basis of the Alien Tort Claims Act (ATCA) are governed by US-American federal (common) law.

4. Claims for human rights violations committed abroad will usually be claims in tort. Under (European) private international law it is, therefore, the law of the place where the damage occurs (Article 4(1) Rome II Regulation) and, hence, foreign law which governs these claims. Exceptions apply only within narrow limits, in particular if domestic laws can be classified as overriding mandatory provisions (Article 16 Rome II Regulation) or if application of foreign law violates the ordre public (Article 26 Rome II Regulation).

5. In addition to tort law, claims for human rights violations may also be based on company law, namely when directors are directly held liable for torts committed by a foreign subsidiary. According to the relevant private international law provisions of the Member States these claims are governed by the law of the (administrative or statutory) seat of the foreign subsidiary. As a consequence, claims in company law are also subject to foreign law.

6. The fact that (European) private international law submits liability for human rights violations to foreign law is very often criticized in the private international law literature. Claiming that foreign law does not sufficiently protect the victims of human rights violations, a number of scholars, therefore, attempt to subject liability claims de lege lata to the domestic law of the (European) parent or buyer company.

7. These attempts, however, raise a number of concerns: first, under traditional (European) private international law, substantive law considerations do not inform the determination of the applicable law. Second, the wish to apply the domestic law of a European country is mostly driven by the wish to avoid poorly functioning court systems and lower regulatory standards in countries of the Global South. Neither of these aspects, however, has anything to do with the applicable tort or company law. Regulatory standards, for example, are part of public law and, therefore, excluded from the reach of private international law. Finally, the assumption that the domestic law of the (European) parent or buyer company provides more or better protection to the victims of human rights violations does not hold true de lege lata. Since parent and buyer companies are legally independent from their foreign subsidiaries and suppliers, parent and buyer companies are only in exceptional cases liable to the victims of human rights violations committed abroad by their foreign subsidiaries or suppliers (legal entity principle or principle of entity liability).

8. The difficulties to hold (European) parent and buyer companies de lege lata liable for human rights violations committed by their foreign subsidiaries or suppliers raises the question of whether domestic laws should be reformed and their application ensured via the rules of private international law? Should domestic legislatures, for example, introduce an internationally mandatory human rights due diligence obligation and hold companies liable for violations? Proposals to this end are currently discussed in Germany and in Switzerland. In France, in contrast, they are already a reality. Here, the Law on the monitoring obligations of parent and buyer companies (Loi de vigilance) of 2017 imposes human rights due diligence obligations on bigger French companies and allows victims to sue for damages under the French Civil Code. The situation is similar in England. According to a Supreme Court decision of 2019 English parent companies may, under certain conditions, be held accountable for human rights violations committed by their foreign subsidiaries.

9. The introduction of an internationally mandatory human rights due diligence obligation at the level of national law certainly holds a number of advantages. In particular, it may encourage companies to take measures to prevent human rights violations through their foreign subsidiaries and suppliers. However, it is all but clear whether, under the conditions of globalization, any such obligation will actually contribute to improving the human rights situation in the countries of the Global South. This is because it will induce at least some companies to take strategic measures to avoid the costs associated with compliance. In addition, it will give a competitive advantage to companies which are domiciled in countries that do not impose comparable obligations on their companies.

10. Any human rights due diligence obligations should, therefore, not (only) be established at the national level, but also at the European or – even better – at the international level. In addition, accompanying measures should ensure that the same rules of play apply to all companies operating in the same market. And, finally, it should be clearly communicated that all these measures will increase prices for many products sold in Europe. In an open debate it will then have to be determined how much the Global North is willing to invest in better protection of human rights in the Global South.

 

Full (German) version: Giesela Rühl, Unternehmensverantwortung und (Internationales) Privatrecht, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 89 et seq.

 

Posted at the request of Sahil Verma, Managing Editor, Trade, Law and Development

General Issue

Issue 12.2 | Winter’20

The Board of Editors of Trade, Law and Development are pleased to invite original, unpublished manuscripts for publication in the Winter ’20 Issue of the Journal (Vol. 12, No. 2) in the form of ‘Articles’, ‘Notes’, ‘Comments’ and ‘Book Reviews’.

Manuscripts received by August 15th, 2020, pertaining to any area within the purview of international economic law will be reviewed for publication in the Winter ’20 issue.

Founded in 2009, the philosophy of Trade, Law and Development has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. Towards these ends, we have published works by noted scholars such as WTO DDG Yonov F. Agah, Dr. Prof. Ernst Ulrich Petersmann, Prof. Steve Charnovitz, Prof. Petros Mavroidis, Prof. Mitsuo Matsuhita, Prof. Raj Bhala, Prof. Joel Trachtman, Gabrielle Marceau, Simon Lester, Prof. Bryan Mercurio, and Prof. M. Sornarajah among others. TL&D also has the distinction of being ranked the best journal in India across all fields of law for seven consecutive years by Washington and Lee University, School of Law.

Manuscripts may be submitted via e-mail or ExpressO. For further information about the Journal, please click here. For submission guidelines, please click here.

In case of any queries, please feel free to contact us at: editors@tradelawdevelopment.com

LAST DATE FOR SUBMISSIONS: 15 August, 2020

A quick note on (thank you, Michael Douglas, for flagging) [2020] NSWCA 82 Inghams v Hannigan, in which the New South Wales Court of Appeal had to untangle a messy alternative dispute resolution (ADR) clause in a contract. I have actually included ‘messy’ as a tag for this post.

The Headnote to the judgment summarises the contractual clauses that needed proper construction. The case is a good illustration of how ADR clauses can lead parties straight into a right pickle, when different obligations to make recourse to mediation and /or (in this case: either /and /or) arbitration and indeed ultimately litigation in the courts at ordinary apply to separate parts of the contract. It forces parties to consider what part of the contract they actually have issue with and for the courts to try and untangle what ADR obligations follow.

A definite case of less can be more and of fancy ADR clauses not always giving wings to contractual interpretation. (The case concerns supplies of chickens. Bad pun. It’s a Saturday morning. I shall keep schtum for the rest of the day).

Geert.

 

Written by Nico Krisch, Graduate Institute for International and Development Studies, Geneva

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of all contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The conceptual framework of jurisdictional boundaries in international law continues to be dominated by the principle of territoriality and its exceptions, even if calls for a reorientation have grown in recent years.

2. The principle of territoriality leads today to far wider jurisdictional claims than in the past, and its limits are being redefined through ‘territorial extensions’ in a number of areas.

3. These extensions are rarely questioned by states, and clear and consistent jurisdictional boundaries remain hard to define. Contestation arises primarily when states seek to use extraterritorial measures to counteract important policy choices of other states.

4. The result is a far-reaching overlap of different jurisdictional spheres which, if seen in conjunction with the multiple forms of transnational regulation existing today, leads to a multi-layered ‘jurisdictional assemblage’.

5. So far, there are no accepted rules governing the relationship of competing jurisdictional spheres in this assemblage. The effective exercise of jurisdiction depends, in large part, on the political and economic power of a country in a given issue area and market.

6. The wider options for action that result from this territorial extension allow for more effective responses to existing societal challenges, especially with a view to the provision of (national and global) public goods, albeit in a limited way.

7. The new jurisdictional regime accentuates hierarchies between countries, interferes with the autonomy of weaker states, and subverts the principle of sovereign equality. Yet under certain circumstances, it also allows actors in weaker states to compensate for their otherwise limited ability to hold multinational companies to account.

8. Existing procedural and substantive proposals only have limited promise for alleviating the tensions resulting from the power imbalance in the exercise of jurisdiction.

9. The territorial principle in the law of jurisdiction has always been sufficiently limited not to overly impede powerful states’ pursuit of their interests.

10. Territoriality today appears less as a principle of effective limitations than as the basis of different strategies and tactics through which states seek to hold mobile actors to account and through which they pursue their political aims in a global context.

 

Full (German) version: Nico Krisch, Entgrenzte Jurisdiktion: Die extraterritoriale Durchsetzung von Unternehmensverantwortung, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 11 et seq.

Communiqué de presse à la suite de l’arrêt de la Cour constitutionnelle allemande du 5 mai 2020

Written by Anatol Dutta, University of Munich

Note: This blogpost is part of a series on „Corporate social responsibility and international law“ that presents the main findings of the contributions published in August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020.

1. The question of the reach of courts’ jurisdiction is highly significant for claims against transnational enterprises based on human rights violations or environmental damages abroad. It does not only determine the applicable law but also the access to a particular justice system.

2. Universal jurisdiction of national courts for human rights and environmental damages claims against enterprises cannot be established, neither on the basis of existing law nor from a legal policy perspective. Rather, such claims have to be handled under the traditional jurisdictional mechanisms.

3. From a global perspective, a remarkable shift regarding jurisdiction can be noted: Whereas the courts in the United States are increasingly limiting access to their justice system in cases with foreign elements, jurisdictional limits are no significant hurdle for human rights and environmental damages claims in the European Union.

4. Domestic enterprises can be sued at their seat. Yet, the forum non conveniens doctrine allows US courts – and perhaps soon English courts as well – to decline jurisdiction, also for human rights and environmental damages claims.

5. Yet, human rights and environmental damages claims against foreign enterprises can also only be brought under certain circumstances in the EU.

6. Claims against foreign enterprises for human rights violations and environmental damages abroad can only rarely be brought before domestic courts based on special jurisdiction related to specific subject matters, for example the jurisdiction for tort claims at the place where the harmful event occurred.

7. If human rights and environmental damages claims are simultaneously directed against a domestic enterprise, for example a mother company or a buyer company in the EU, at least partially, foreign subsidiaries and suppliers can be sued on the basis of special jurisdiction over multiple defendants which can be used strategically.

a) If foreign enterprises have their seat in a third State outside the European Union, the jurisdiction of the domestic courts over the foreign co-defendant is governed by the national law of the forum Member State.

b) However, the current trend to establish a separate liability of domestic enterprises, for example, by extending human rights and environment-related duties of care for the supply chain, could endanger this special jurisdiction over multiple defendants, which, on the other hand, could lose significance.

8. Extending the general jurisdiction at the domicile of the defendant by relying on a personal criterion different to the seat of the defendant enterprise is not a viable solution.

a) Today US courts refuse to exercise jurisdiction based solely on the foreign enterprise ‘doing business’ within the territory. In some EU Member States, for claims against foreign enterprises at least with a seat in a third State, exorbitant jurisdiction can be established, for example, based on assets of the foreign defendant enterprise within the territory.

b) At the most from a policy perspective, for claims against foreign subsidiaries of a domestic enterprise the introduction of an enterprise jurisdiction could be considered.

9. For claims against foreign enterprises jurisdiction of the domestic courts can often only be based on a forum necessitatis if proceedings cannot reasonably and effectively be brought or conducted abroad; the hurdles for such an exceptional jurisdiction are, however, high.

10. To hear human rights and environmental damages claims against enterprises lies within the powers of the domestic courts.

a) Foreign enterprises do not enjoy State immunity even if they violate human rights or damage the environment abroad in collaboration with foreign States.

b) The power to adjudicate is also not limited by the fact that a decision of the court on human rights and environmental damages claims potentially has implications on the foreign policy relations of the forum State.

c) The domestic courts are often even not barred from deciding on human rights and environmental damages claims of foreign States against enterprises.

 

Full (German) version: Anatol Dutta, Internationale Zuständigkeit für privatrechtliche Klagen gegen transnational tätige Unternehmen wegen der Verletzung von Menschenrechten und von Normen zum Schutz der natürlichen Lebensgrunlagen im Ausland, in: August Reinisch, Stephan Hobe, Eva-Maria Kieninger & Anne Peters (eds), Unternehmensverantwortung und Internationales Recht, C.F. Müller, 2020, pp. 39 et seq.

Felix M. Wilke has published a well-researched, innovative and thought-provoking book titled A Conceptual Analysis of Private International Law (Intersentia, 2019). In it, he makes a strong plea for the establishment of a general notions, methodologies and principles for conflict of laws on the European level.

This book is much more than the repeated calls, mainly from Germany, for the development of “general principles” of EU PIL or a “Rome 0 Regulation“. It provides a sort of “anatomy” European Private International Law, laying bare its underlying structures.

Particularly intriguing is that Wilke is not merely looking at EU regulations. Instead, he adopts a comparative perspective, taking into account the domestic law of all EU Member States. Yes, you read that right, Malta – all Member States.

The result is a very useful overview of private international laws across the EU. Do not expect, however, detailed country reports. Wilke focuses on the functioning of the PIL system, in the sense required by functional comparative law. This functioning largely depends on concepts, such as renvoi, preliminary questions or overriding mandatory rules.

Wilke examines the operation of these concepts throughout Europe, crosscutting specialised EU regulations as well as national conflicts laws. In doing so, he distills the gist of EU Private International Law and brings much needed clarity to often squiggly debates.

Praise for the new book is also provided by Ralf Michaels‘ foreword. Here is an excerpt:

This is a thoroughly researched work that is both comparative-empirical and prescriptive in nature, a study that both surveys existing law and makes proposals on the basis of its findings. The comparison is more doctrinal than functional in nature, which seems adequate for its topic of a conceptual analysis: Wilke is interested in establishing techniques, not resolving concrete cases, so a functional approach would not have been of much use to him. He analyses not just the existing EU instruments for what they reveal regarding general issues; in addition, his study relies on a comparison of the existing domestic private international law systems, both codified and uncodified, in all EU member states. Wilke thus departs from his earlier view that only a few domestic models exist – he finds, in fact, that general issues are more thoroughly discussed and regulated in domestic legislation than in European law, and therefore finds the existing material most helpful for European concepts. He even includes the United Kingdom – despite Brexit, and despite the differences one should expect between a common law approach in England and the civil law approaches of most other member states.

The result is an impressive survey of approaches concerning these questions; and Wilke’s results are surprising and interesting. …

You heard it from the Max Planck Institute’s mouth: Highly recommended!

Personal injury cases never make for light reading and Fletcher v Estee Lauder and Clinique is not an exception to that rule. Mrs Fletcher, aged 45, claims that her lifelong  use of the Estee Lauder talc and face powder and Clinique loose face powder, starting with puffs of powder purchased by her mother in New York in 1976, followed by regular purchases in the city in later years, caused her to develop mesothelioma.

Thank you Leigh Day, who represent Mrs Fletcher, for reporting on the case. In a preliminary ruling, Justice Mendez rejected a forum non conveniens argument made by the cosmetics giants, who had argued that England is a more natural and suitable forum for the case.

The case is interesting for my readers who follow my reports in the ‘comparative’ binder, for it is not that routine for judges to list arguments against the suitability of England as a forum.

Arguments made pro forum non are on p.2, claimant’s arguments on p.3, and Mendez J’s criteria to dismiss (having earlier established per authority that the burden of proof to dismiss is necessarily high for defendants with a substantial presence in New York) on p.5. Note his reference to the absence of no win no fee (and claimant’s limited resources); absence of jury trial; limited and expensive discovery; and a general hesitation of the legal profession in bringing cases like these (non-occupational exposure claims) against manufacturers.

Most relevant and interesting.

Geert.

 

In April 2019 the German Society of International Law (Deutsche Gesellschaft für Internationales Recht) held its 36th biannual conference at the University of Vienna. Organised by August Reinisch (University of Vienna) in cooperation with Eva Maria Kieninger (University of Würzburg) and Anne Peters (Max Planck Institute Heidelberg), the conference  discussed the concept of „Corporate social responsibility“ from both a public and a private international law perspective. Presentations were given by Tanja Domej (University of Zurich), Oliver Dörr (University of Osnabrück), Anatol Dutta (University of Munich), Peter Hilpold (University of Innsbruck), Stefan Huber (University of Tübingen), Nico Krisch (Graduate Institut of Geneva), Giesela Rühl (University of Jena/Humboldt-University of Berlin) and Silja Vöneky (University of Freiburg).

Over the course of the next days conflictoflaws.net will present the main findings of the contributions in a series of blogposts. The full (German) contributions can be found in the conference proceedings that have just been published by C.F. Müller.

The Choice of Court Convention is already close to its 5th year of application. Case law is still scarce. A Greek court tackled with the question, whether to apply the Convention or not. It decided that it should apply, but at the end it considered that the agreement was asymmetric, therefore outside the scope of the Convention.

 

THE FACTS

The claimant is a ship owner company registered in Monrovia, Liberia. While the claimant’s ship was on its way to Novorossiysk, Russia, the claimant agreed with a company registered in Hong Kong [defendant], having however a branch in Piraeus, to buy a quantity of petrol, to be delivered at the port of the Russian city. A few days later, both the ship and the fuel were in Novorossiysk. During bunkering, the 1st engineer of the ship requested the interruption of the supply. He was suspicious that petrol was not of the agreed quality. A technical inspection a couple days later proved that the engineer was right. As a result, litigation ensued before the Piraeus courts. The defendant did not challenge the court’s international jurisdiction. At the same time, he filed an interpleader action against the petrol supplier. The latter, a company registered in Monaco, challenged the jurisdiction of the Greek court, by invoking a choice of forum agreement between the parties, stipulated on the invoice issued as a standard term of the deal.

 

THE RULING

The court engaged in a thorough analysis of the issue: It confirmed that the agreement was falling under the scope of the convention both ratione temporis and ratione materiae. The agreement was signed after the entry into force of the Convention (1/10/2015) and concerned a genuinely commercial dispute. It then examined the content of the choice of forum clause, and considered that the agreement was asymmetric, i.e. unilaterally in favor of the seller, and to the detriment of the buyer. As a second step, the court found that the Brussels Ia Regulation was also not applicable, because the conditions provided by Article 25, lit. a – c were not met. Following the above, the court resumed to domestic provisions of the Greek Code of Civil Procedure, in order to establish its international jurisdiction (Article 31, similar actions).

 

COMMENT

The wording of the choice of court clause reads as follows: The contract is governed by English law; the contracting parties accept the exclusive jurisdiction of English courts for the resolution of any dispute related to the present contract [translated by the author]. I don’t think I need to say anything here; there’s nothing asymmetric in this clause. I will just reproduce a passage from the Explanatory Report prepared by Professors Hartley and Dogauchi:

105 Asymmetric agreements. Sometimes a choice of court agreement is drafted to be exclusive as regards proceedings brought by one party but not as regards proceedings brought by the other party. International loan agreements are often drafted in this way. A choice of court clause in such an agreement may provide, “Proceedings by the borrower against the lender may be brought exclusively in the courts of State X; proceedings by the lender against the borrower may be brought in the courts of State X or in the courts of any other State having jurisdiction under its law.”

 

The final point I want to make is that the court shouldn’t go that far with the examination of the matter. As mentioned above, the parties in question were registered in Hong Kong and Monaco. Both countries are not signatory members to the Hague Convention. Hence, the analysis was unnecessary.

 

Conclusion: Bad publicity is still publicity. There are of course drawbacks in the court’s analysis; still, on the other side, it is very fortunate that the court examined the facts from the Hague Convention’s point of view too. The worst case scenario would have been to ignore completely the Convention’s existence, which regrettably occurs occasionally, both for Hague Conventions and sometimes for EU Regulations as well.

 

[Piraeus Court of First Instance nr. 3106/2019, available (in Greek) here]

Today, the ECJ decided in case C-641/18 –  LG and Others v. Rina SpA, Ente Registro Italiano Navale, on the concepts of ‘civil and commercial matters’ and ‘administrative matters’ under Article 1 Brussels I Regulation.

The case arose from the following facts:

14      LG and Others — relatives of the victims and survivors of the sinking of the Al Salam Boccaccio’98 vessel in the Red Sea on 2 and 3 February 2006, in which more than 1 000 people lost their lives — brought an action before the Tribunale di Genova (District Court, Genoa, Italy) against the Rina companies — ship classification and certification societies — whose seat is in Genoa.

15      LG and Others claim compensation for the pecuniary and non-pecuniary losses stemming from the Rina companies’ civil liability, arguing that the classification and certification operations for the Al Salam Boccaccio’98 vessel, carried out by the Rina companies under a contract concluded with the Republic of Panama, for the purposes of obtaining that State’s flag for that vessel, were the cause of that sinking.

16      The Rina companies contend that the referring court lacks jurisdiction, relying on the international-law principle of immunity from jurisdiction of foreign States. In particular, according to those companies, the classification and certification operations which they conducted were carried out upon delegation from the Republic of Panama and, therefore, are a manifestation of the sovereign powers of the delegating State.

17      According to LG and Others, by contrast, given that the Rina companies have their seat in Italy and the dispute at issue in the main proceedings is civil in nature, within the meaning of Article 1 of Regulation No 44/2001, the Italian courts have jurisdiction under Article 2(1) of that regulation. In addition, LG and Others submit that the plea of immunity from jurisdiction, relied on by the Rina companies, does not cover activities that are governed by non-discretionary technical rules which are, in any event, unrelated to the political decisions and prerogatives of a State.

18      The referring court raises the question of the jurisdiction of the Italian courts in so far as, while it is common ground that the Rina companies have their seat in Italy, it is claimed that they acted upon delegation from the Republic of Panama.

19      In that regard, the referring court refers, in its request for a preliminary ruling, to the case-law of the Corte costituzionale (Constitutional Court, Italy) and of the Corte Suprema di Cassazione (Supreme Court of Cassation, Italy) concerning immunity from jurisdiction. In accordance with the case-law of those supreme courts, recognition of immunity from jurisdiction is precluded only in respect of the acts of foreign States consisting in war crimes and crimes against humanity or where such recognition undermines the principle of judicial protection.

The Court held that

Article 1(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that an action for damages, brought against private-law corporations engaged in the classification and certification of ships on behalf of and upon delegation from a third State, falls within the concept of ‘civil and commercial matters’, within the meaning of that provision, and, therefore, within the scope of that regulation, provided that that classification and certification activity is not exercised under public powers, within the meaning of EU law, which it is for the referring court to determine. The principle of customary international law concerning immunity from jurisdiction does not preclude the national court seised from exercising the jurisdiction provided for by that regulation in a dispute relating to such an action, where that court finds that such corporations have not had recourse to public powers within the meaning of international law.

The full text of the judgment is here.

The CoL post on the Opinion of Advocate General Szpunar in this case is here.

Autriche / Commission
Aide d'État
L’avocat général Hogan invite la Cour à rejeter le pourvoi de l’Autriche dans une affaire d’aide d’État britannique

Rina
Espace de liberté, sécurité et justice
Les victimes du naufrage d’un navire battant pavillon panaméen peuvent saisir les juridictions italiennes d’une action en responsabilité contre les organismes italiens ayant classifié et certifié ce navire

The Organization of American States (OAS) has announced that it is launching a weekly virtual forum entitled “Inter-American law in times of pandemic”.  It begins on Monday 11 May at 11:00 am (EDT, local time in Washington, D.C.).  The first session “Challenges to Inter-American Law” will be held in Spanish, with no simultaneous interpretation. Registration is free but space is limited. The agenda is available here.

As announced, “the topics to be discussed in relation to the impact of the pandemic in the Americas will include: the challenges to Inter-American law; the importance of access to public information; protection of privacy and personal data; the fight against corruption; legal cooperation against cyber-crime; food security as a specific challenge; the difficulties for private international law; among others.”

The list of virtual fora is available here. On Monday 29 June 2020, a forum will be held on “New Challenges for Private International Law.” Apparently, the sessions will be recorded and will be available on video later on the OAS website.

In addition, the Hague Conference on Private International Law (HCCH) has published a COVID-19 Toolkit, which is available in both English and French.

My colleague Hélène Peroz has reported on this interesting judgment delivered on 4 March 4 2020 by the French Supreme Court for private and criminal matters (Cour de cassation).

The Court applied an old principle of the French law of international jurisdiction. Unfortunately, it does not seem that the applicability of EU Regulations of private international law was raised.

Background

A German company sought to enforce an arbitral award against a man domiciled in Algeria. The man jointly owned an immoveable property near Paris, France. The co-owner was his wife, who was also domiciled in Algeria. The German creditor initiated proceedings before the family division of the high court of Paris and applied for a judicial order to divide the property. The goal was to ultimately receive half of the proceeds.

Jurisdiction of French Courts in Family Matters

The Algerian spouses challenged the jurisdiction of the Paris court. They argued that, outside of the scope of international conventions and EU instruments, jurisdiction in family matters lied with the court of the residence of the family pursuant to Article 1070 of the French code of civil procedure.

In a judgment of 18 December 2018, the Paris Court of Appeal accepted the argument and declined jurisdiction on the ground that the family resided in Algeria.

Extending the Application of Domestic Rules of Jurisdiction to International Cases

The French lawmaker has adopted very few rules of international jurisdiction. French courts have thus long held that, in principle, rules of domestic jurisdiction may also be used to define the international jurisdiction of French courts. Article 1070 of the Code of Civil Procedure defines the domestic jurisdiction of French courts in family matters. So the Paris  Court of Appeal had simply applied Article 1070 to assess its international jurisdiction.

The French Supreme Court has long identified two exceptions to the principle of extension of domestic rules of jurisdiction: enforcement and actions related to real property. In both cases, the rule of international jurisdiction has typically been straightforward: French courts have jurisdiction over actions related to enforcement carried out in France and actions related to immovables situated in France. In this judgment, the Court ruled more widely that, while the principle was to extend the application of domestic rules of jurisdiction, it might be necessary to “adapt them to the particular needs of international relations”.

The Court then ruled that it would not be appropriate to apply Article 1070 (and thus grant jurisdiction to the court of the residence of the family) to define the jurisdiction of French court in this case, “both for practical reasons of proximity and pursuant to the effectivity principle”.

The reference to effectivity seems to mean that the court cared about the future enforcement of the decision which, quite clearly, was meant to take place in France, where the apartment is located. Indeed, and although the action was based on a rule of property law, the chances that the property would be attached and sold judicially for the purpose of actually implementing the rule was high.

What about EU Regulations?

It is clear that the French Supreme Court ruled on the understanding that no EU Regulation applied. Was that really the case?

Regulation 2016/1103 on Property Regimes does not apply to proceedings initiated before 29 January 2019. It is unclear, however, whether it would apply should the same case arise today.

The territorial scope of the jurisdictional rules of the Property Regimes Regulation is not limited to actions initiated against defendants domiciled within participating Member States, so the issue would not be so much that the defendants were domiciled in a third state.

Rather, the issue is whether the action was one related to matrimonial property regimes. The property was co-owned by two spouses, but their matrimonial property regime was separation of property. This means that their marriage was not relevant to the action (which was based on a general provision of property law). In fact, Regulation 2016/1103 defines ‘matrimonial property regimes’ as sets of rules ‘concerning the property relationships between the spouses and in their relations with third parties, as a result of marriage or its dissolution’ (Article 3(1)(a), emphasis added). 

So one wonders whether the action would not rather have fallen within the material scope of the Brussels I bis Regulation. Indeed, the CJEU once defined the exception to the scope of the Brussels Convention as covering “any proprietary relationships resulting directly from the matrimonial relationship or the dissolution thereof” (De Cavel, 1979). In the present case, the proprietary relationship between the spouses did not result from their marriage.

And if the case fell within the material scope of the Brussels I bis Regulation, then Article 24 of that Regulation (which applies irrespective of the domicile of the parties) would apply. It is not absolutly clear whether the relevant provision would be Article 24(1) (in rem rights over immoveables) or Article 24(5) (enforcement), but in both cases, it would have granted exclusive jurisdiction to French courts. 

Dalloz Actualité publie le projet de loi « portant diverses dispositions urgentes pour faire face aux conséquences de l’épidémie de covid-19 » qui sera débattu au Conseil des ministres aujourd’hui. L’étude à l’Assemblée, en séance, aura lieu dès le jeudi 14 mai.

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In Mastermelt v Siegfried Evionnaz [2020] EWHC 927 (QB), at issue is negative declaratory relief on contractual performance. 

Claimant Mastermelt is an English company specialising in the reclamation of precious metals. The defendant, Siegfried Evionnaz SA (“Siegfried”), is a Swiss company. There is a dispute between the parties over the quality of Mastermelt’s performance. Siegfried’s standard terms and conditions of contract (“STC”) include a clause stating that the governing law is Swiss law and that the Swiss courts have exclusive jurisdiction.

Relevant pending proceedings, are: very shortly after Siegfried had informed Mastermelt that it was going to issue proceedings against Mastermelt in Switzerland, Mastermelt issued the present claim in England on 5 February 2019. It seeks negative declaratory relief against Siegfried. Proceedings were subsequently issued by Siegfried against Mastermelt in the Zurich Commercial Court on 23 July 2019. Meanwhile, on 24 May 2019, Siegfried applied to the High Court in London for a declaration that it had no jurisdiction to try Mastermelt’s claim and so the Claim Form and service should be set aside, alternatively stayed. Further, on 29 January 2020 Mastermelt applied to the Swiss court (1) for a stay of those proceedings pending the UK decision, or (2) for the Swiss proceedings to be limited at that stage to a consideration of the court’s own jurisdiction there and nothing else, or (3) an extension of time for service of a response to Siegfried’s claim. By an order of 4 February 2020, the Swiss court rejected all three applications. On 7 February Mastermelt filed an appeal to the Federal Supreme Court of Switzerland which initially suspended enforcement of the Zurich Commercial Court’s decision pending the appeal. However, on 13 February Siegfried objected to any such suspension. The Supreme Court directed Mastermelt to file any response to that objection by 9 March. As far as the English courts know, that has been done but at the moment the Supreme Court has not given its decision on the suspension issue, let alone any substantive appeal, nor has there been any decision yet on the jurisdiction or otherwise of the Swiss court to hear the claim.

Siegfried argues, and has convinced the Swiss courts, that A27 Lugano needs to be applied ‘in harmony’ with A31(2) Brussels Ia: this now provides that regardless of which court was seised first, the court which was the subject of the putative exclusive jurisdiction clause, must decide the question of its jurisdiction first and the other proceedings must be stayed in the meantime. At 13 Waksman J refers to the Swiss court’s reasoning, where it takes an expansionist view of the Lugano Convention‘s protocol no2, that the Lugano States shall take ‘due account’ of each other’s courts decisions. The Swiss court suggests that in principle it should follow CJEU authority in Gasser (which introduced the torpedo mechanism by giving strict interpretation to the lis alibi pendens rule, even in case of choice of court) but that it has reasonable justification to deviate from Gasser given that the judgment has become ‘obsolete’ following A31(2) BIa.

Waksman J is first invited to accept the Swiss court’s reasoning as res iudicata, per CJEU C-456/11 Gothaer. (I did say at the time the CJEU may find its ruling in Gothaer would come back to haunt it). This he finds is a stretch of that authority but also not applicable given the limited findings of the Swiss court at any rate: ‘here the actual and only decision of the Swiss court thus far is simply to refuse to stay its own proceedings’.

He then discusses how A27 Lugano needs to be applied. A first reference is to the Court of Appeal’s most problematic view in Privatbank, to my mind, of applying Article 28 Lugano reflexively to third States. At 23-24 Waksman J distinguishes Privatbank (clearly he cannot hold it no relevant authority should he think so); then holds correctly that Gasser is not entirely obsolete following BIa; and finally at 30 that the harmonised regime per Lugano’s Protocol does not mean that one should now interpret Article 27 Lugano like 31.2 and (b) i Brussels Ia.

I agree most firmly. Note this has Brexit implications: one of the routes post Brexit, as readers know, is for the UK to become part of Lugano. In doing so it will surrender BIa’s forum non-light regime (Articles 33-34) in favour of Lugano which most dedinitely does not have a forum non application – as well as, as is at issue here, re-arming the Italian torpedo.

This leaves the issue of the putative choice of court agreement. England is the forum contractus per Article 5(1)a Lugano, hence will have jurisdiction less choice of court stands. Authority is well-known and recently applied in Pan Ocean, referred to here at 85. After much factual consideration it is accepted to a good arguable case standard that the parties contracted on the basis of the STC for the obligations concerned.

In conclusion therefore the action is stayed.

Quite a few relevant issues here. I for one note the cautious approach of the Court, in handling the Court of Appeal’s Privatbank authority.

Geert.

Handbook of) European Private International Law – 2nd ed. 2016, Chapter 2.

 

Application for negative declaratory relief on contractual performance.
Jurisdiction.
Lis pendens and choice of court under the Lugano Convention.
Concurrent claim by defendant in Switzerland. https://t.co/F80LoWJvps

— Geert Van Calster (@GAVClaw) April 21, 2020

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