Agrégateur de flux

International Skating Union / Commission
Concurrence

Les règles de l'International Skating Union sur l’autorisation préalable des compétitions de patinage de vitesse sur glace violent le droit de l'Union

BMW Bank
Environnement et consommateurs
Un consommateur qui conclut un contrat de leasing automobile sans obligation d’achat ne dispose pas d’un droit de rétractation

On 7 December 2023, The Council presidency and European Parliament representatives reached a provisional agreement on a reform of the Statute of the Court of Justice (last version available here).

Among other things, the reform will permit the transfer of jurisdiction over preliminary rulings to the General Court in specific areas, while the Court of Justice will retain jurisdiction over questions of principle, like those that involve interpretation of the Treaties or the Charter of Fundamental Rights.

The amendment, which is meant to reduce the workload of the Court of Justice and, therefore, to help her work more efficient, represents an essential step in the history of the institution as we know it.

The possibility of the handover is formally established by Article 256 TFEU, according to which:

3. The General Court shall have jurisdiction to hear and determine questions referred for a preliminary ruling under Article 267, in specific areas laid down by the Statute.

Where the General Court considers that the case requires a decision of principle likely to affect the unity or consistency of Union law, it may refer the case to the Court of Justice for a ruling.

Decisions given by the General Court on questions referred for a preliminary ruling may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Union law being affected.

It should be noted that the provision is not a novelty in EU law; it corresponds to former Article 225 TEC. In fact, the transfer to the General Court of partial jurisdiction to give preliminary rulings had already been considered in the past: at the end of last century, first, against the background of the Treaty of Amsterdam and the foreseen enlargement of the Union; and later, around 2015, in view of the increasing number of requests for preliminary rulings. However, in 2017, in a report submitted pursuant to Article 3(2) of Regulation (EU, Euratom) 2015/2422 of the European Parliament and of the Council amending Protocol No 3 on the Statute of the Court of Justice of the European Union, the Court of Justice had denied the need of a transfer at the time. On the other hand, it  simultaneously stressed that such standpoint “should not at all be understood as a definitive position on the question of the distribution of jurisdiction to give preliminary rulings between the Court of Justice and the General Court”. And, indeed, it has not been a definitive position.

For the readers of this blog the essential question is, of course, what the impact of the competences adjustment will be on preliminary rulings conerning PIL instruments.

The simple answer would be that, in principle, none is to be expected. The specific areas in which the General Court will be competent over preliminary rulings are: the common system of value added tax; excise duties; the Customs Code; the tariff classification of goods under the Combined Nomenclature; compensation and assistance to passengers in case of delay or cancellation of transport services or denied boarding; the scheme for greenhouse gas emission allowance trading. In other words, as of today requests on the instruments for judicial cooperation in civil and commercial matters are not affected, i.e., they fall under the scope of exclusive competence of the Court of Justice.

But this, of course, can change any moment in the future. More importantly, already now it is legitimate to have doubts as to the operation of the assignments to, respectively, the Court of Justice and the General Court: one single request for a preliminary ruling may concern at the same time one of the above-mentioned areas and another one; besides, requests related to one of those matters may as well entail questions of principle or of a cross-cutting nature.

More concretely, with an example: should the request for a preliminary ruling in, let’s say, case C‑213/18, or in case C-20/21, had been referred to Luxembourg after the transfer has been accomplished, who would have taken care?

In the Council’s press release of 7 December 2023 (the same date as the agreement’s) not much is said to shed light on this and similar questions. It is explained, though, that, ‘On the procedural aspects, the reform provides for a “one-stop-shop” mechanism, under which national judges will continue to address requests for preliminary rulings to the Court of Justice, which will in turn forward to the General Court the questions under its jurisdiction’.

This possibly means that a screening will take place at the level of the Court of Justice, and that a substantiated decision will be made there on the allocation of requests not squarely corresponding to one of the categories listed above. No doubt, for the sake of transparency the criteria for such allocation will also be communicated to the public at some point, likely soon. It is also to be expected (and it is hoped) that resources of the Court will be invested in making sure that, from the very beginning, they are consistently applied.

La rédaction de Dalloz actualité prend ses quartiers d’hiver, le temps des fêtes de fin d’année bien méritées !

Nous serons de retour dès le mardi 9 janvier 2023.

Merci de votre fidélité et joyeuses fêtes !

en lire plus

From 15 February 2024 to 17 February 2024, an early career research workshop will be held at Freie Universität Berlin to discuss works in progress on dispute resolution mechanisms and competence-competence in multi-level systems. The workshop invites young researchers working on related topics from all fields of legal research and is open to different methodological approaches to analyse the research questions. The workshop aims to generate a constructive and friendly atmosphere to test working hypotheses and discuss findings.
You can find further information in the call for abstracts here.

Important dates

Deadline for abstracts:                19 January 2024

Information on acceptance:       26 January 2024

Workshop:                                     15–17 February 2024

Applications and questions can be addressed to maren.vogel@fu-berlin.de

My thoughts on the Court of Appeal’s finding in Zubaydah v FCO are here. I am pleased to have played a role for claimant’s lawyers, pro bono, in the proceedings before the UK Supreme Court, which held today in Zubaydah (Respondent) v Foreign, Commonwealth and Development Office and others (Appellants).

The issue in the appeal is whether the law applicable under sections 11 and 12 of the Private International Law (Miscellaneous Provisions) Act 1995 (“PILA”) to torts alleged to have been committed by two of the UK’s security agencies  is the law of England and Wales or the law of each of the six countries in which the claimant alleges he was unlawfully detained and tortured by the CIA. The High Court had held for the latter, which follows from the generally applicable lex loci damni rule. The Court of Appeal reversed, holding for the former on the basis of the small window to displace the general rule and this finding has now been confirmed by the Supreme Court.

The relevant PILA sections read as follows

“11. Choice of applicable law: the general rule.

(1) The general rule is that the applicable law is the law of the country in which the events constituting the tort or delict in question occur.

(2) Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being—

(a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury;

(b) for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged; and

(c) in any other case, the law of the country in which the most significant element or elements of those events occurred.

(3) In this section “personal injury” includes disease or any impairment of physical or mental condition.”

“12. Choice of applicable law: displacement of general rule.

(1) If it appears, in all the circumstances, from a comparison of—

(a) the significance of the factors which connect a tort or delict with the country whose law would be the applicable law under the general rule; and

(b) the significance of any factors connecting the tort or delict with another country,

that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country, the general rule is displaced and the applicable law for determining those issues or that issue (as the case may be) is the law of that other country.

(2) The factors that may be taken into account as connecting a tort or delict with a country for the purposes of this section include, in particular, factors relating to the parties, to any of the events which constitute the tort or delict in question or to any of the circumstances or consequences of those events.”

Two background documents are of particular relevance: ‘LCR’ = the Law Commission Report December 1990; and ‘JCP’ =  the Joint Consultation Paper 1984. The LCR [2.6] ff had justified its proposal for amendment to the English prior rule of double actionability for torts, by suggesting it does away with 3 main challenges of the double actionability rule:

• • • its anomalous character (it was said to give too much weight to English and Scots law as lex fori, contrary to the UK’s general happiness to apply foreign law);
    • its injustice in terms of giving an advantage to the wrongdoer (the victim’s burden of proof under the double actionability rule is particularly heavy); and
    • the uncertainty and speculative implication NOT in the rule but in a relevant exception, Boys v Chaplin [1971] AC 356.

[54] The approach to be adopted when considering whether the general rule is displaced pursuant to section 12 was considered by the Court of Appeal in VTB Capital plc v Nutritek International Corpn [2012] EWCA Civ 808 and in current case Lord Lloyd-Jones and Lord Stephens for the majority [54] ff summarise the four principles that follow from that case.

Note that [62] the Supreme Court criticises parties’ agreement that the determination of the defendants’ appeal did not require any consideration of the potential application of section 14 PILA (the ordre public correction):

We consider that there is an artificiality about deciding which law governs the liability in tort of the UK Services without considering public policy considerations under section 14 of the PILA. Although, we express no view on the matter, there is scope for suggesting, for example, that on the presumed facts of this case, it is a constitutional imperative that the applicable law in relation to the tort of misfeasance in public office in relation to the acts and omissions of the UK Services should be the law of England and Wales. However, we have been presented with a preliminary issue on sections 11 and 12 of the PILA and must seek to address it solely on that basis. We conclude this part of the judgment by observing that, depending on the outcome of the appeal, it may be necessary for a court to consider the impact, if any, of section 14 of the PILA at a later stage of these proceedings.

[73] the Court of Appel was held to have been correct in rebuking the first instance judge for focusing too much on the role of the CIA

The required focus is on the torts committed by the defendants or those for whom they are responsible. Instead, the Court of Appeal considered, the judge had focused on the overall conduct of the CIA. In our view, there is force in this criticism.

[74] ff discusses the treatment by the first instance judge of factors relevant in displacing the locus damni general rule: (1) First, the claimant had no control over his location and in all probability no knowledge of it. (2) So far as the UK Services were concerned, the claimant’s location from time to time was irrelevant and may well have been unknown. (3) The claimant had been rendered to the Six Countries precisely because this would enable him to be detained and tortured outside the laws and legal systems of those countries.  The Supreme Court agrees with the Court of Appeal’s finding that the judge had wrongly applied the relevance of these factors. Those finding fault with the Supreme Court’s approach may find this too much of a factual analysis rather than a point of law I imagine (as indeed Lord Sales does to some degree in his dissent).

[80] the Court of Appeal itself is then held to have fallen short of the proper exercise in applying s12:

It seems to us, however, that the Court of Appeal has also fallen into error in relation to the required focus under section 12 of the PILA on the torts committed by the defendants. Section 11(1) provides that the general rule is concerned with “the country in which the events constituting the tort … in question occur”. Similarly, section 12 refers to “the significance of the factors which connect a tort … with the country whose law would be the applicable law under the general rule” and with “another country”. In our view, the Court of Appeal, in approaching the section 12 exercise, interpreted the scope of the relevant torts too narrowly in that it equated the torts in question with the conduct of the UK Services which is alleged to be wrongful.

Rather than conflating the conduct of the UK Services with the torts,

The Court of Appeal should have focused on the torts alleged against the UK Services for which the defendants are said to be vicariously responsible

leading [82] ff the SC itself completing the s12 exercise.

The significance of the connection between the torts and each of the Six Countries arising from the claimant’s detention there and the infliction of his injuries there is held to be massively reduced by the factors discussed in [92] ff:

reasonable expectations and involuntary presence [93];

the security services’ indifference as to where the claimant was held and them never expecting or intending to have their conduct judged by reference to the laws of the places where he was held [94];

the insulated environments within which claimant was held and where he could be denied any access to the local law (alleged to apply in Moziak fashion by the defendants) or recourse to local courts [95], countries which in effect were insulated form the courts [97];

the sheer number of black sites in which the claimant was held diminishes the significance of the law of any one of them, and moreover it would be impossible for him to establish where he sustained which injury [96];

[98] ff conversely, the strong factors connecting the torts to the UK:

the alleged vicarious liability of the UK Government [99];

the relevant acts and omissions of the UK Services in requesting information from the CIA were more likely than not to have taken place in England, and were likely committed by the UK Services for the perceived benefit of the United Kingdom [100]; and

the actions were taken by UK executive agencies acting in their official capacity in the purported exercise of powers conferred under the law of England and Wales [101].

Lord Sales dissented, pointing also to the Court of Appeal and the High Court simply disagreeing on the weight to be given to the various factors, and in his own analysis of those factors he reaches the conclusion that the Mozaik of the 6 laws should apply.

It is rare for an applicable law issue in tort to be discussed to such extent by the Supreme Court and the judgment carries great relevance.

Geert.

Illegal rendition, applicable law, displacement of the ordinary lex loci damni rule
More soon (and background here https://t.co/dYdGJILOJ2)
Pleased to have played a small (pro bono) role in the appeal with the SC. https://t.co/szromMgIQp

— Geert Van Calster (@GAVClaw) December 20, 2023

 

 

A new special issue of the University of Brasilia Law Journal is dedicated to the topic “Private International Law and Sustainable Development: Global and Latin American Perspectives”. The issue, co-edited by Véronica Ruiz Abou-Nigm and María Mercedes Albornoz, is based on contributions to a panel at the 15th conference of ASADIP in Asunción, Paraguay (2022), and contains some articles in Spanish, some in English. The issue is available as open access.

The European Group for Private International Law (GEDIP) has recently adopted a Position paper on the Proposal for a Council Regulation in matters of Parenthood.

The Group welcomes the EU’s intention to legislate in this field, since parenthood is a status from which persons derive numerous rights and obligations.  However, the Group is of the opinion that there are important shortcomings in the Proposal due to the narrow perspective taken and an insufficient consideration of the legal complexities concerning parenthood in cross-border situations. It therefore encourages a reconsideration of the Proposal in the light of its observations.

The readers of the blog are aware of the proposal for a Directive on the protection of persons who engage in public participation from manifestly unfounded or abusive court proceedings, also known as strategic lawsuits against public participation (SLAPPs).

After the political agreement reached at Council level and the European Parliament’s negotiating position, the negotiators of the Parliament and of the Council reached on 30 November 2023 a provisional political agreement on the text to be adopted. The agreement is expected to be formally approved by the Council and the European Parliament at a later stage.

The text of the deal, made accessible here, features various innovations, including the following.

Minimum Requirements

The text resulting from the political agreement now makes clear that the Directive lays down minimum rules, thus enabling the Member States to adopt or maintain provisions that are more favourable to persons engaging in public participation, including national provisions that establish more effective procedural safeguards. The implementation of the Directive should not serve to justify any regression in relation to the level of protection that already exists in each Member State.

Public Participation

Public participation is more broadly defined.

It should mean any statement, activity or preparatory, supporting or assisting action directly linked thereto, by a natural or legal person expressed or carried out in the exercise of fundamental rights.

Future public interest is included, referring to the fact that a matter might not yet be of public interest, but could become so, once the public becomes aware of it, for example by means of a publication.

Such activities should directly concern a specific act of public participation or be based on a contractual link between the actual target of SLAPP and the person providing the preparatory, supporting or assisting activity. Bringing claims not against a journalist or a human rights defender but against the internet platform on which they publish their work or against the company that prints a text or a shop that sells the text can be an effective way of silencing public participation, as without such services opinions cannot be published and thus cannot influence public debate.

Matter of Public Interest

The notion of a matter of public interest is clarified in more detail.

It should include matters relevant to the enjoyment of fundamental rights.

Activities of a natural or legal person who is a public figure should also be considered as matters of public interest since the public may legitimately take an interest in them.

In addition, matters under consideration by a legislative, executive or judicial body or any other official proceedings can be examples of matters of public interest.

Finally, the Directive text provides under Recital 19b for many cases where a matter of public interest is at stake.

Abusive Court Proceedings

The description of when court proceedings can be considered abusive is reworked and better described.

They typically involve litigation tactics deployed by the claimant and used in bad faith including but not limited to the choice of jurisdiction, relying on one or more fully or partially unfounded claims, making excessive claims, the use of delaying strategies or discontinuing cases at a later stage of the proceedings, initiating multiple proceedings on similar matters, incurring disproportionate costs for the defendant in the proceedings. The past conduct of the claimant and, in particular, any history of legal intimidation should also be considered when determining whether the court proceedings are abusive in nature. Those litigation tactics, which are often combined with various forms of intimidation, harassment or threats before or during the proceedings, are used by the claimant for purposes other than gaining access to justice or genuinely exercising a right and aim to achieve a chilling effect on public participation in the matter at stake.

Claims made in abusive court proceedings can be either fully or partially unfounded. This means that a claim does not necessarily have to be completely unfounded for the proceedings to be considered abusive. For example, even a minor violation of personality rights that could give rise to a modest claim for compensation under the applicable law can still be abusive, if a manifestly excessive amount or remedy is claimed. On the other hand, if the claimant in court proceedings pursues claims that are founded, such proceedings should not be regarded as abusive for the purposes of the Directive.

Scope

Few express indications have been added.

The Directive shall apply to matters of a civil or commercial nature with cross-border implications entertained in civil proceedings, including interim and precautionary measures and counteractions, entertained in civil proceedings, whatever the nature of the court or tribunal.

Then, it shall not apply to criminal matters or arbitration and shall be without prejudice to criminal procedural law.

Matters with Cross-border Implications

The cross-border implications element has been revised.

According to the text, a matter is considered to have cross-border implications unless both parties are domiciled in the same Member State as the court seised and all other elements relevant to the situation are located only in that Member State. Domicile shall be determined in accordance with the Brussels I bis Regulation.

Common Rules on Procedural Safeguards

Article 5a, devoted to the accelerated treatment of applications for safeguards, has been added.

Member States shall ensure that applications for security and early dismissal of manifestly unfounded claims are treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Member States shall ensure that applications for remedies against abusive court proceedings may also be treated in an accelerated manner, where possible, in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Early Dismissal of Manifestly Unfounded Claims

In relation to the early dismissal, Member States shall ensure that courts and tribunals may dismiss, after appropriate examination, claims against public participation as manifestly unfounded at the earliest possible stage, in accordance with national law. In addition, Member States shall ensure that an application for early dismissal is treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case and the right to an effective remedy and the right to a fair trial.

The burden of proof and substantiation of claims, under Article 12, have been specified. The burden of proving that the claim is well founded rests on the claimant who brought the action. Member States shall ensure that where a defendant has applied for early dismissal, it shall be for the claimant to substantiate the claim in order to enable the court to assess whether it is not manifestly unfounded.

Finally, Member States shall ensure that a decision granting early dismissal is subject to an appeal.

Remedies Against Abusive Court Proceedings

The award of costs, under Article 14, is clarified. Member States shall ensure that a claimant who has brought abusive court proceedings against public participation can be ordered to bear all types of costs of the proceedings, available under national law including the full costs of legal representation incurred by the defendant, unless such costs are excessive. Where national law does not guarantee the award in full of the costs of legal representation beyond statutory fee tables, Member States shall ensure that such costs are fully covered, unless they are excessive, by other means available under national law.

Article 15, specifically devoted to compensation of damages, has been deleted. It provided a natural or legal person who has suffered harm as a result of a SLAPP case to be capable of claim and to obtain full compensation for that harm. The text resulting from the political agreement loses this (express) provision.

Article 16, dedicated to penalties, has been amended including other equally effective appropriate measures. Member States shall ensure that courts or tribunals seised of SLAPPs cases may impose effective, proportionate and dissuasive penalties or other equally effective appropriate measures, including the payment of compensation for damages or the publication of the court decision, where provided for in national law, on the party who brought those proceedings.

Protection against Third-country Judgments

This chapter has been affected by significant changes relevant from a private international law perspective.

In relation to grounds for refusal of recognition and enforcement of a third-country judgment, the reference to public policy, which was used in the original text version proposed by the Commission, has been deleted. According to the current text version, Member States shall ensure that the recognition and enforcement of a third-country judgment in court proceedings against public participation by a natural or legal person domiciled in a Member State is refused if those proceedings are considered manifestly unfounded or abusive according to the law of the Member State in which recognition or enforcement is sought.

Article 18, on jurisdiction for actions related to third-country proceedings, provides as follows. Member States shall ensure that, where abusive court proceedings against public participation have been brought by a claimant domiciled outside the Union in a court or tribunal of a third country against a natural or legal person domiciled in a Member State, that person may seek, in the courts or tribunals of the place where he is domiciled, compensation for the damages and the costs incurred in connection with the proceedings before the court or tribunal of the third country.

A paragraph 2 has been added, providing that Member States may limit the exercise of the jurisdiction while proceedings are still pending in the third country.

Relations with other Private International Law Instruments

In final provisions, under Article 19, the Directive shall not affect the application of bilateral and multilateral conventions and agreements between a third State and the Union or a Member State concluded before the date of entry into force of the Directive. Recital 33a refers, as example, to the 2007 Lugano Convention, in line with Article 351 of the TFEU.

Under Recital 33b it is specified that any future review of the rules under the Brussels I bis and the Rome II Regulations should assess also the SLAPP-specific aspects of the rules on jurisdiction and applicable law.

JPMorgan Chase e.a. / Commission
Concurrence
Concurrence en matière de produits dérivés de taux d’intérêt libellés en euros : le Tribunal rejette en grand partie les recours de JPMorgan Chase et de Crédit agricole

Banque postale / CRU
Politique économique
Calcul des contributions ex ante au Fonds de résolution unique pour 2021 : le Tribunal annule la décision du Conseil de résolution unique visant certaines banques françaises et allemande pour insuffisance de motivation

Ryanair et Malta Air / Commission
Aide d'État
Aides d’État dans le contexte de la pandémie de Covid-19 : le Tribunal annule les décisions de la Commission approuvant les aides financières de la France en faveur d’Air France et d’Air France-KLM

EVH / Commission
Concurrence
Les recours de onze régies municipales allemandes contre le feu vert de la Commission pour l’acquisition des activités de distribution et de commerce de détail d’énergie ainsi que de certains actifs de production d’innogy par E.ON sont rejetés

Banca Popolare di Bari / Commission
L’Union ne doit pas réparer le préjudice prétendument subi par Banca Popolare di Bari du fait d’une décision de la Commission sur la mesure d’aide italienne en faveur de Banca Tercas

Abramovich / Conseil
Relations extérieures
Guerre en Ukraine : le Tribunal de l’Union européenne rejette le recours de M. Roman Arkadyevich Abramovich et confirme ainsi les mesures restrictives prises à son égard

Islentyeva / Conseil
Relations extérieures
Les mesures restrictives contre la Russie n’interdisent en principe pas à un citoyen russe détenteur d’une licence privée de piloter un avion dans l’Union européenne

The European Court of Human Rights (ECtHR) held in a judgment of 26 October 2023 (Application no. 32662/20) that a Hungarian child abduction procedure under the 1980 Hague Child Abduction Convention (1980 Hague Convention) was not compatible with the family rights set out in Article 8 of the European Convention on Human Rights (ECHR). The Court reiterated that national return procedures should be managed in such a way as to ensure that a swift return of the child is possible, with both parents being granted contact with the child as the procedure unfolds.

Background

A couple consisting of a Spanish father and a Hungarian mother had two children. One was born in Hungary in 2013 and one was born in Spain in 2015. After a family holiday to a third country in January 2017, the father returned alone to Spain, whereas the mother and children went to Hungary. While in Hungary, the mother told the father that she had decided to settle permanently in Hungary with the children.

In February 2017, the father filed an application for the return of the children to Spain based on the 1980 Hague Convention. Courts in three instances, including the Hungarian Supreme Court, held that the father was right and that the children should return to Spain. However, in February 2018, the Hungarian Constitutional Court suspended the enforcement of the return of the children. In a decision given in November 2018, the enforcement was cancelled by the Constitutional Court, which held that the mother’s right to a fair trial had been violated, as the children’s interests had not been considered.

After the ruling of the Constitutional Court, the return order was again a matter for the Hungarian courts. This time, a psychological evaluation of the children was presented as evidence. Again, the Hungarian courts in three instances held that the children should return to Spain. The Constitutional Court was still not satisfied and quashed this return order as well. A third round of procedures for the same return was initiated in the district court in 2020. Shortly before that, Hungarian courts recognized a Spanish judgment giving the father custody of the children under Regulation (EU) No 2201/2003 (Brussels II bis).

During the almost four-year procedure, the father had applied to see his children on numerous occasions, but Hungarian authorities permitted only twelve encounters. Ultimately, during a parental visit in 2020, the father took the children back to Spain.

At the ECtHR in Strasbourg, the father complained about the Hungarian procedure. He claimed that the return procedure had violated his family rights under Article 8 of the ECHR, as the application of the Hague Convention was wrongful, both in that he had not been granted parental contact during the procedure and in the Hungarian non-enforcement of the Spanish decisions.

Judgment

The ECtHR held initially in its judgment that a State respondent to an international child abduction has family rights obligations towards the parent seeking the return of the child. That State must, inter alia, examine applications under the 1980 Hague Convention “with a view to ensuring […] prompt reunion.”

In this regard, the ECtHR held that the Hungarian procedure had been too slow, lasting nearly four years. Specifically, the Court noted that if Hungarian authorities found it necessary to consider psychological expertise in return matters, they should have organised the procedure in such a way that the expertise in question could be obtained without undue delays.

Lastly, the Court also held that the Hungarian authorities had not taken any measures to enforce the Spanish court decisions on custody rights.

Therefore, the Court held that Hungary had violated the father’s family rights under Article 8.

Comment

The judgment of the ECtHR comes as no surprise in that it emphasizes that the sturdy principle of prompt return under the 1980 Hague Convention is protected also under Article 8 of the ECHR.

One must remember that the passage of time in child abduction cases will always favor the abducting parent. Eventually, it will not be in the best interest of the child to be returned to a parent with whom it no longer has any relationship. After all, the 1980 Hague Convention is in place to avoid that an abductor is rewarded with custody. From a private international law perspective, custody rights must be dealt with separately, in “normal” custody procedures.

The New Zealand Court of Appeal has just released a judgment on the cross-border application of New Zealand consumer and fair trading legislation (Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 647). The Court held that local consumer legislation – in the form of the Consumer Guarantees Act 1993 (CGA) – applies to foreign manufacturers. It also clarified that fair trading legislation – in the form of the Fair Trading Act 1986 (FTA) – applies to representations made to recipients in New Zealand. The decision is of particular interest to New Zealand consumers and manufacturers of goods that are supplied in New Zealand, as well as traders advertising their products to New Zealanders. More generally, the judgment provides a useful analysis of the interrelationship between statutory interpretation and choice of law, and lends weight to the proposition that product liability is properly governed by the law of the place of supply (or injury).

 

 Facts

The defendant, 3A Composites GmbH (3AC), was a German manufacturer of a cladding product installed on the plaintiffs’ buildings. The plaintiffs alleged that the product was highly flammable because it contained aluminium composite panels with a polyethylene core. Panels of this kind were the main reason why the fire at Grenfell Tower in London had spread so rapidly. The plaintiffs brought proceedings against 3AC, as well as the importers and distributors of the cladding in New Zealand. They alleged negligence, breach of s 6 of the CGA and breaches of the FTA. In response, 3AC protested the New Zealand court’s jurisdiction.

 

The High Court

The High Court upheld 3AC’s protest in relation to the CGA and FTA causes of action, on the basis that they fell outside of the territorial scope of the Acts: Body Corporate Number DP 91535 v 3A Composites GmbH [2022] NZHC 985, [2022] NZCCLR 4.

In relation to the CGA, the plaintiffs claimed that 3AC’s cladding was not of acceptable quality in accordance with the statutory guarantees in the CGA. Section 6 of the CGA provides for a right of redress against a manufacturer where goods supplied to a consumer are not of acceptable quality. The Court held that the Act did not apply to 3AC because it was a foreign manufacturer.

Referring to the Supreme Court’s decision in Poynter v Commerce Commission [2010] NZSC 38, [2010] 3 NZLR 300, the Court concluded that there was “neither express language nor any necessary implication which would lead the Court to interpret the CGA as being intended to have extraterritorial reach” (at [45]). The CGA therefore did not apply to an overseas manufacturer like 3AC that did not have a presence in New Zealand (see [38]-[47]).  The Court pointed to the definition of the term “manufacturer” in s 2 of the Act, which includes “a person that imports or distributes” goods that are manufactured outside New Zealand where the foreign manufacturer does not have an ordinary place of business in New Zealand. According to the Court, the clear inference to be drawn from this definition was that the Act did not have extraterritorial effect, because otherwise there would be no need to impose the obligations of the manufacturer’s statutory guarantee upon a New Zealand-based importer of goods (at [42]-[44]).

In relation to the FTA, the plaintiffs argued that 3AC had engaged in misleading or deceptive conduct by making available promotional material on their website that was intended to have global reach and that specifically contemplated New Zealand consumers (at [107]), and by authorising publication of promotional and technical information through their exclusive distributor in New Zealand (at [108]).

The Court held that the Act did not apply to 3AC’s allegedly misleading or deceptive conduct. It referred to s 3(1), headed “application of Act to conduct outside New Zealand”. The section extends the Act to conduct outside New Zealand by any person carrying on business in New Zealand to the extent that such conduct relates to the supply of goods in New Zealand. It was clear that 3AC had never engaged in carrying on business in New Zealand (at [117]). Moreover, there was no evidence to show that 3AC had made any representations to the plaintiffs relating to supply of their product in New Zealand (at [120]).

 

The Court of Appeal

The Court of Appeal, in a judgment by Goddard J, disagreed with the High Court’s conclusion that the claims fell outside of the territorial scope of the Acts. In relation to the CGA, it held that the Act applies “to an overseas manufacturer of goods that are supplied in New Zealand” (at [61]). This interpretation was “consistent with [the] text and purpose [of the Act]”, with “broader principles of private international law” and “with the approach adopted by the Australian courts to corresponding legislation” (at [61]). The relevant “territorial connecting factor”, or “hinge”, was the supply of goods in New Zealand (at [64], [65]).

As a matter of statutory interpretation, the Court of Appeal considered that “[o]n its face the Act applies, and there is no good reason to read it more narrowly” (at [76]). The concept of extraterritoriality was irrelevant in this context (at [70]). In particular, it was inaccurate “to describe the availability of relief in respect of a supply of goods to a consumer in New Zealand against a person outside New Zealand as an ‘extraterritorial’ application of the Act” (at [64]). The Act imposed strict liability, in relation to the products supplied in New Zealand to New Zealand consumers, and did not depend on the conduct of the supplier or manufacturer in New Zealand (at [71]).

In relation to the definition of “manufacturer”, the Court accepted that its purpose was to provide a New Zealand consumer with the option of seeking redress against an importer or distributor of goods manufactured outside New Zealand, in light of the potential difficulties faced by a consumer when suing an overseas manufacturer (at [66]). However, this did not mean that the manufacturer should be excused from liability (at [67]). The Act essentially provided for concurrent liability on the part of the overseas manufacturer and the New Zealand-based importer or distributor (at [69]), which was consistent “with the focus of the legislation on providing meaningful remedies to consumers of goods supplied in New Zealand” (at [69]). This approach was consistent with Australian authority (at [72]).

The application of “established private international law choice of law principles” led to the same result (at [77]). For claims in tort in relation to goods that have caused personal injury, the relevant choice of law rules favoured application of the law of the place of injury. Applying the law of the place of manufacture “would produce the unsatisfactory result of different products on the same shelf” being governed by different liability regimes (at [77], referring to McGougan v DePuy International Ltd [2018] NZCA 91, [2018] 2 NZLR 916 at [59]). There was “broad support for a similar approach to product liability claims (at [77]). Thus, there was “a strong argument that the applicable law, where a consumer brings a product liability claim in respect of goods supplied in New Zealand, is New Zealand law” (at [78]), which included the Consumer Guarantees Act.

The Court left open the question whether a different approach might apply where an overseas manufacturer did not know its products were being sold in New Zealand, or where it had consciously chosen not to sell its products here. These concerns did not arise on the facts of the case, so the Court did not need to determine “whether such a result would go beyond the purpose of the Act, or whether private international law principles provide a solution to any apparent injustice in such a case” (at [80]).

In relation to the FTA, the Court accepted that the relevant issue was whether 3AC engaged in conduct in New Zealand that breached the Act, so the fact that s 3 (on the extraterritorial application of the Act) did not apply was not decisive (at [103]). The Act applied to false and misleading conduct in New Zealand, “regardless of where the defendant is incorporated and where it carries on business” (at [102], referring to Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754). This included communications made from outside New Zealand to recipients in New Zealand.

 

Comment

The Court of Appeal’s judgment is to be welcomed. The principle of extraterritoriality has been responsible for causing considerable confusion in the past (see Maria Hook “Does New Zealand consumer legislation apply to a claim against a foreign manufacturer?” [2022] NZLJ 201). In treating the principle as irrelevant to this case, the Court laid the path for a clear and nuanced analysis of the issues. Not only did the Court refuse to adopt the lens of extraterritoriality, it was also prepared to rely on general choice of law rules, in addition to statutory interpretation, and treated both as relevant.

Courts often approach statutory interpretation and choice of law as exclusive methodologies. At the outset of the case, they identify whether the issue is one of statutory interpretation or choice of law, and then proceed with their analysis accordingly. Here, in relation to the CGA, the Court of Appeal applied both methodologies and found that the relevant connecting factor was the place of supply, regardless of which methodology applied. The implication seemed to be that there was a shared rationale for the place of supply as the most appropriate connecting factor and that, if the two methodologies had pointed in different directions, this might have been evidence that things had gone awry.

In this way, the judgment lends support to the proposition that statutory interpretation and choice of law are not engaged in any kind of “competition”. There is a reason why product liability is typically governed by the law of the place of injury (or the place of supply, where liability is for pure economic loss). Why should this reason not also be determinative for claims under the CGA specifically? The more difficult question would be whether a statute should be given a wider scope of application than it would receive under bilateral choice of law. But here, too, it would be unhelpful to think of the conflict of laws as a kind of jilted discipline. The goal should be to identify the cross-border considerations that bear upon the scope of the particular statute, when compared to the rationale underpinning the choice of law rule that would otherwise be applicable. How else can a court decide whether a statute is intended to fall outside of general rules of choice of law? Statutory interpretation, and characterisation, are necessarily intertwined. It remains to be seen whether future courts will build on the Court of Appeal’s judgment to engage more explicitly with the interrelationship between statutory interpretation and choice of law.

On Tuesday, January 9, 2024, the Hamburg Max Planck Institute will host its 40th monthly virtual workshop Current Research in Private International Law at 11:00-12:30 (CET). Jie (Jeanne) Huang (University of Sydney Law School) will speak, in English, about the topic

 

Can Private Parties Contract out of the Hague Service Convention?

Treaties are concluded by states but often impose rights and obligations upon private parties. Can private parties contract out of a treaty including states’ oppositions without explicit permissions granted by the treaty? The complexity between private parties, states, and treaties are reflected in recent cases and unsettled debates regarding the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters of November 15, 1965 (“HSC”). The HSC contains a large number of oppositions imposed by 62 Member States including China, India, Singapore, and Germany. Combining public and private international law, this paper aims to explore the correlative relationship between party autonomy and state sovereignty in treaty applications using the HSC as an example.

The presentation will be followed by open discussion. All are welcome. More information and sign-up here.

If you want to be invited to these events in the future, please write to veranstaltungen@mpipriv.de.

Fabian Kratzlmeier (Chicago) has accepted the invitation of the editors of the blog to present his recent book, titled ‘Die Grenzüberschreitende Unternehmensrestrukturierung im Europäischen Rechtsrahmen’ (Cross-border corporate restructuring and European private international law), published by Mohr Siebeck.

Reorganizing viable firms (instead of liquidating them) has been the state of the art in U.S. bankruptcy law for decades now, and it has become increasingly popular throughout Europe in recent years. This trend is reflected in legislative activities, such as the repeated reform efforts to the German bankruptcy code aiming at rescuing profitable, but over-indebted firms within the traditional insolvency procedure. It is also evidenced by practical patterns, most notably (not only) German companies using foreign restructuring instruments, in particular the English Scheme of Arrangement, to amend their financing structure while continuing trading in the 2010s. Even then – more than a decade ago – the wide-reaching impacts of such cross-border restructurings were heavily discussed in bankruptcy and private international law scholarship by some scholars, showing the (not only political) brisance of private international law in the area of restructuring law.

Whenever the earnings of a debtor company no longer cover its financial obligations, the creditors (and the shareholders) share a common interest in maximizing the pool of distributable assets. Where the continuation of the business under the old legal entity promises a higher present value compared to the liquidation of the debtor – be it piecemeal or through a business sale – economic logic demands a legal framework to resolve the underlying collective action problem. It is therefore the task of a modern insolvency and restructuring law to provide the parties involved with an appropriate set of rules that facilitates negotiations in order to adjust the debtor’s liabilities to the prospective earnings of the company (e.g. through debt reductions, deferrals or debt-equity-swaps).

In terms of the (continental) European landscape, the Restructuring Directive 2019 (hereinafter “Directive”) has set new standards in restructuring law, requiring Member States to reform and, in many cases, modernize their insolvency and restructuring laws. It mandates all Member States to maintain preventive restructuring instruments, enabling financially distressed companies to temporarily protect their business assets against collection or enforcement actions, and providing a majority voting scheme in order to cram down (groups of) dissenting creditors. In accordance with its minimum harmonization concept, however, the Directive leaves the Member States with a large number of choices and deviation options. Thus, the national restructuring frameworks differ widely from one another in some key aspects; e.g. regarding the entry threshold (the extent of financial distress required to access), the duration and scope of the moratorium, and the conditions and limits to the cram down mechanism (in particular as to group formation and priorities), to name but a few. The legal and economic positions of the various groups of stakeholders – and, consequently, their negotiating power in the immanent struggle over the distribution of going concern value – depend to a large extent on the jurisdiction in which the reorganization takes place and what options for action the local restructuring law offers to the respective stakeholders. It is obvious, that decision makers, when looking for suitable restructuring options, will not limit themselves to their home state’s reorganization tools, but explore foreign instruments as well, as past experiences with the English Scheme of Arrangement have proven before. As long as there is legal certainty, i.e. the reorganization is likely to be recognized by the relevant (i.e. asset-intensive) jurisdictions, decision makers have in incentive to choose the restructuring location that best serves their interests, ultimately resulting in a regulatory competition between national restructuring regimes throughout the EU. Private international law, in this context, regulates this competition by limiting (or unlocking) such choice of foreign insolvency and restructuring venues (and their respective laws). Against this background, the present study undertakes to comprehensively review and, building on its findings, further develop the legal framework for cross-border corporate restructurings within Europe, presenting a solution that is both coherent with existing European legislation, and consistent with the underlying principles of European insolvency law.

There is, however, another reason why further research in this area is desperately needed: Thanks to the ever-growing integration of the internal market and, thus, the establishment of international trade relations and supply chains, purely nationally operating companies (other than micro-enterprises) have long become the exception. It does not take much to make a national restructuring case an international one, i.e. the cross-border element does not need to amount to a foreign branch or similarly consolidated business structures. A foreign creditor or a third-party debtor based abroad suffices to turn a national company into an international restructuring case. Hence, the minimum harmonization of the substantive law by the Directive alone is not going to achieve the underlying goal set by the Union legislator, that is to provide all European companies with access to effective and efficient restructuring instruments. Rather, in cases with cross-border exposure, the question inevitably arises as to whether the financial crisis can be overcome in a single procedure – hauling all (including foreign) affected parties into one procedure and having it recognized across all (relevant) jurisdictions – or whether several procedures are necessary in order to implement a sustainable restructuring of the company and thus safe the going concern value.

Unfortunately, this need for international coordination and harmonization of cross-border corporate reorganizations, arising from the very conceptual nature of collective proceedings, has been hardly taken into account by the legislator when drafting the Directive. There are only three recitals (12 to 14) dealing with these issues in the first place, and even they contain only rudimentary (and hardly expedient) considerations regarding the relationship between the Directive and existing regulations in European private international law. In particular, they reference the European Regulation on Insolvency Proceedings (EIR) as well as the center of main interest (COMI), which is of paramount importance to the current international insolvency regime, to which it serves as the central connecting factor determining both jurisdiction and applicable law. In terms of (reliable) conclusions regarding the classification of the new restructuring frameworks and their integration into the existing private international law framework, however, the recitals only provide limited guidance. The recitals make it clear, though, that at least some of the proceedings created in transposing the Directive (i.e. those that are to be publicly announced) shall be subject to the EIR and, therefore, be included in the latter’s Annex A.

The study takes this as its starting point to demonstrate that the EIR provides a tailor-made set of rules for public proceedings, providing clear and (for the most part) fitting rules on international jurisdiction and applicable law while also guaranteeing EU-wide recognition. At the same time, however, there are some drawbacks in the EIR’s application to restructuring proceedings mainly resulting in setbacks to the collectivization mechanism aimed at on a substantive level. These issues, including rights in rem and secondary proceedings, are discussed in depth, and appropriate solutions are presented both de lege lata and de lege ferenda.

Turing to confidential restructuring frameworks, to which the recitals are silent, the scholarly debate is still evolving. Due to their private nature, they are increasingly popular in practice. At least in part motivated by the onsetting regulatory competition in the field, therefore, many Member States (including Germany, the Netherlands, and Austria) opted for a dual transposition enacting both a public and a private alternative. Since confidential procedures will not be included in Annex A and, thus, will prima facie remain outside the scope of the EIR, there are considerable hurdles to overcome in order to embed such procedures into the existing European private international law framework. First and foremost, the so-called bankruptcy clause enshrined in Art. 1 (2)(b) Brussels I bis Regulation challenges the integration into the existing secondary law altogether. A closer look at the issue reveals, however, that this provision excludes only those procedures, which qualify as “insolvency proceedings” under Art. 1 EIR, regardless of whether such proceeding is included in Annex A. Turning to international jurisdiction, the study is building on the controversy and the different propositions surrounding international jurisdiction to restructure foreign companies under an English scheme of arrangement. In that context, the arguments previously put forward in support of Art. 8 (1) (jurisdiction wherever at least one affected party has her domicile) and 24 (2) Brussels I-bis Regulation (jurisdiction at the place of the registered seat) are discussed and assessed as to their validity with regard to the new restructuring instruments. After all, the Directive differs in key respects from its English blueprint, and, thanks to its EU-law origin, requires special considerations concerning the coherence of (secondary) European law. Ultimately, the study finds that neither of the international jurisdiction rules provided for in the Brussels-I-bis Regulation are well-suited (or even practicable) for collective procedures such as the preventive restructuring instruments under the Directive. Therefore, it calls for a concentration of restructurings at the debtor’s COMI, which is in line with (and, upon a detailed examination, even envisioned by) both the EIR, and the Directive itself. In this respect, the study, using state-of-the-art European Union law methodology, extracts a coherent and consistent private international law framework for confidential restructuring procedures, centered at the debtor’s COMI, and recognized throughout the EU. At the same time, it proposes legislative amendments to the current system to clarify the private international law rules on cross-border restructurings – both for parties involved and Member States experiencing competitive pressure – and to improve the (few) inadequacies under the current legal regime.

Overall, the study reveals that the applicable law concentrates – public and confidential – restructuring proceedings at the debtor’s COMI on the one hand, but on the other hand also guarantees EU-wide recognition of the restructuring results achieved. The collectivization of creditors and shareholders implemented – in substantive terms – by the Directive, thus, continues on the level of private international law, enabling the continuation of viable companies even in a cross-border context.