Droit international général

The appeal in The Public Institution for Social Security v Banque Pictet & Cie SA & Ors [2022] EWCA Civ 29 has been dismissed. I reviewed the first instance judgment here. I conclude that review writing ‘Those criticising the intensity of jurisdiction squabbles will find ammunition in this 497 para judgment.’ The Court of Appeal judgment is another 152 paras and as Andrew Dickinson also notes, Carr LJ, too, is critical: [12]

There will of course be cases where a novel and/or complex point of law needs to be debated fully and decided and, as foreshadowed above, this litigation raises some new, albeit relatively short, legal issues. Further, the sums involved are substantial and the allegations made are serious. However, these features did not create a licence to turn a jurisdictional dispute into an extensive and essentially self-standing piece of litigation. The costs incurred below ran to many, many millions of pounds: the interim payment orders in respect of the Respondents’ costs amounted to £6.88 million against a claimed total of some £13.5 million.

The issues on appeal are listed [41] ff and they of course reflect the discussion I summarised in my post on the first instance findings. I list them below and summarise the Court’s findings.

Article 23 formal requirements (involving Banque Pictet and Mr Bertherat only):

i) For the purposes of the requirement in Article 23(1)(a) that a jurisdiction agreement must be in or evidenced in writing, was the Judge right to conclude that it was unnecessary for the GBCs containing the EJCs (‘exclusive jurisdiction clauses, GAVC) actually to have been communicated to PIFSS?

ii) If so, was the Judge right to find that Banque Pictet did not have the better of the argument that the GBCs were communicated to PIFSS prior to 2012?

Lady Justice Carr is right in my view e.g. [67] that CJEU authority does not require material communication of GTCs etc which contain EJCs. Rather, the judge needs to establish ‘real consent’,  in the spirit of the Raport Jenard with a rejection of excessive formality.

Article 23 material validity (involving all Pictet and Mirabaud Respondents (save for Pictet Asia, Pictet Bahamas and, for the avoidance of doubt, also Mr Amouzegar and Mr Argand)):

i) Was the Judge right to conclude that the “particular legal relationship(s)” in connection with which the EJCs were entered into for the purpose of Article 23 was the totality of the legal relationships between the parties forming part of the banker/customer relationship between them?

ii) Was the Judge right to conclude that the relevant Respondents had the better of the argument that the disputes relating to (a) the Pictet/Mirabaud bribery claims; (b) the Pictet/Mirabaud accessory claims “ar[o]se out of” those “particular legal relationship(s)”?

The term ‘material validity’ is employed both in first instance and at the Court of Appeal although it is not quite correct; what is really meant is what Henshaw J called the ‘proximity’ requirement: which ‘disputes’ ‘relate to’ the matters covered by the EJCs? Here, Carr LJ sides eventually [98] with the judge mostly as a matter of factual analysis: neither CJEU Apple nor CDC require a restrictive approach where parties have formulated the EJC very widely. The judge carefully considered the wording of the clause and on contractual construction was right to find that the disputes at issue fell within it.

Scope of EJCs (as a matter of the relevant domestic law) (involving all Pictet and Mirabaud Respondents (save for Pictet Asia and Pictet Bahamas and again, for the avoidance of doubt, Mr Amouzegar and Mr Argand)):

i) Was the Judge right to find that PIFSS had the better of the argument that, on the true construction of the relevant EJCs, the disputes relating to the wider accessory claims fell outside the scope of the applicable EJCs?

ii) (Mr Mirabaud only): Was the Judge right to conclude that PIFSS had the better of the argument that claims against Mr Mirabaud relating to events after 1 January 2010 fell outside the scope of the relevant EJCs?

This issue relates to whether the EJCs, as a matter of construction under Swiss (or Luxembourg) law – which the judge had discussed obiter, did not extend to cover the wider accessory claims. [101]: in summary the relevant parties suggest that, having correctly recognised that what was alleged by PIFSS were unitary schemes arising out of continuing courses of conduct, the Judge was then wrong to conclude that they did not have the better of the argument that the wider accessory claims also fell within the EJCs.

Carr LJ deals rather swiftly with these discussions, again I feel finding mostly that the judge’s analysis was mostly factual (albeit seen from the viewpoint of Swiss and /or Luxembourg law) and not incorrect.

Article 6: (the number of Respondents to whom the Article 6 challenge is relevant will depend on the outcome of the appeals on the issues above, but on any view the issue of principle arises in relation to Mr Amouzegar and Mr Argand):

i) Was the Judge right to conclude that, for the purpose of Article 6, the Court was not required to consider solely the risk of irreconcilable judgments between the claim against the anchor defendant and the claim(s) against the proposed Article 6 defendant(s) but rather was permitted to consider other relevant circumstances including, in particular, the risk of irreconcilable judgments between the claims sought to be made against the proposed defendant and other claims in other member states?

ii) Did the Judge apply the test correctly in relation to each relevant Respondent?

This I find is the most important part of the judgment for it is in my view the one which most intensely deals with a point of law. Readers may want to refer to my earlier post for a summary of the A6 (Lugano) issues. The judge had found against A6 jurisdiction, also following Privatbank‘s ‘desirability’ approach. Parties upon appeal argue [110] that the Judge’s interpretation results in exclusive jurisdiction clauses having practical effects well beyond the scope of their application, with the collateral effect of conferring on them a “gravitational pull” which is inconsistent with the proper interpretation of A23 Lugano. PIFSS submits that it undermines the drive for legal certainty that motivates the strict approach to A6 identified in the authorities. They also suggested (in oral submission) that for A6 purposes only actual, and not merely potential, proceedings are properly to be taken into account. 

The CA however [112] confirms the relevance of future as well as extant claims and generally supports the flexible approach to A6. Carr J concedes [131] that this approach can be said to give “gravitational pull” to A23 and suggests ‘(t)here is nothing objectionable about that, given the respect to be accorded to party autonomy.’

I do not think this is correct. Including broadly construed ‘related’ claims in choice of court would seem to deny, rather than protect party autonomy: for if parties had really wanted to see them litigated in the choice of court venue, they ought to have contractually include them.

The issue of desirability per Privatbank is not discussed and therefore remains open (compare EuroEco Fuels).

Forum non conveniens: Pictet Asia and Pictet Bahamas:

i) Depending on the outcome of the issues above, was the Judge right to conclude that PIFSS had not shown that England was clearly the appropriate forum for the resolution of the claims against Pictet Asia and Pictet Bahamas?

Here the swift conclusion [143] is that the judge’s finding that PIFSS had not shown that England was clearly the proper forum is unimpeachable.

A lot is riding on this jurisdictional disagreement.  Permission to appeal to the Supreme Court was refused by the CA but may still be sought with the SC itself.

Geert.

EU Private International Law, 3rd ed. 2021, big chunks of Chapter 2.

 

Choice of court and anchor defendants, Lugano Convention, Brussels Ia.
Appeal dismissed. For the 1st instance judgment see https://t.co/7d1LGpleY4
Public Institution for Social Security v Banque Pictet & Ors [2022] EWCA Civ 29 (26 January 2022)https://t.co/WvbXbk1o59

— Geert Van Calster (@GAVClaw) January 26, 2022

The new issue of International & Comparative Law Quarterly (Volume 71, Issue 1) is out. Some of articles concern directly or indirectly questions of private international law. Their abstracts are provided below.

The whole issue is available here. Some of articles are published in open access.

F. Rielaender, Aligning the Brussels Regime with the Representative Actions Directive

European private international law has long been recognised as improperly set up to deal with cross-border collective redress. In light of this shortcoming, it seems unfortunate that the private international law implications of the Representative Actions Directive (Directive (EU) No 2020/1828) have not yet been addressed coherently by the European legislator. This article examines to what extent the policy of promoting collective redress can be supported, even if only partially, through a reinterpretation of the jurisdictional rules of the Brussels Ia Regulation. Furthermore, it discusses which legislative measures need to be adopted to better accommodate collective redress mechanisms within the Brussels regime.

M. Risvas, International Law as the Basis for Extending Arbitration Agreements Concluded by States or State Entities to Non-Signatories

This article explores the role of international law in relation to the extension of arbitration agreements contained in contracts concluded by States (or State entities) with non-signatory State entities (or States). As contract-based arbitrations involving States or State entities are on the rise, identifying the legal framework governing which parties are covered by the relevant arbitration agreements is of practical importance. The analysis demonstrates that international law forms part of the relevant law, alongside other applicable laws including law of contract, law of the seat and transnational law, concerning the extension of arbitration agreements concluded by States or State entities to non-signatories. Previous analyses have neglected the role of international law by not distinguishing contract-based arbitrations involving private parties from contract-based arbitrations involving States or State entities. Public international law recognises that arbitration agreements can be extended to non-signatories on the basis of implied consent, or abuse of separate legal personality and estoppel. Therefore, foreign investors can rely on international law to extend arbitration agreements to non-signatories in arbitrations conducted under investment contracts concluded by States or State entities, even if the relevant domestic law is agnostic or hostile to this. This has significant legal, and practical, importance.

T. Hartley, Basic Principles of Jurisdiction in Private International Law: The European Union, the United States and England

This article consists of a comparative study of the basic principles underlying the rules of jurisdiction in private international law in commercial cases in the law of the European Union, the United States and England. It considers the objectives which these rules seek to achieve (protection of the rights of the parties and respect for the interests of foreign States) and the extent to which these objectives are attained. It takes tort claims, especially in the field of products-liability, as an example and considers which system has the most exorbitant rules. It suggests explanations for the differences found.

Giovanni Zarra (University of Naples) authored a book titled Imperativeness in Private International Law – A View from Europe, with Springer/T.M.C. Asser Press.

This book centres on the ways in which the concept of imperativeness has found expression in private international law (PIL) and discusses “imperative norms”, and “imperativeness” as their intrinsic quality, examining the rules or principles that protect fundamental interests and/or the values of a state so as to require their application at any cost and without exceptions.

Discussing imperative norms in PIL means referring to international public policy and overriding mandatory rules: in this book the origins, content, scope and effects of both these forms of imperativeness are analyzed in depth. This is a subject deserving further study, considering that very divergent opinions are still emerging within academia and case law regarding the differences between international public policy and overriding mandatory rules as well as with regard to their way of functioning.

By using an approach mainly based on an analysis of the case law of the CJEU and of the courts of the various European countries, the book delves into the origin of imperativeness since Roman law, explains how imperative norms have evolved in the different conceptions of private international law, and clarifies the foundation of the differences between international public policy and overriding mandatory rules and how these concepts are used in EU Regulations on PIL (and in the practice related to these sources of law).

Finally, the work discusses the influence of EU and public international law sources on the concept of imperativeness within the legal systems of European countries and whether a minimum content of imperativeness – mainly aimed at ensuring the protection of fundamental human rights in transnational relationships – between these countries has emerged.

The book will prove an essential tool for academics with an interest in the analysis of these general concepts and practitioners having to deal with the functioning of imperative norms in litigation cases and in the drafting of international contracts.

The table of contents can be accessed here.

Annexes A and B to the insolvency Regulation list, respectively, the national insolvency proceedings and national insolvency practitioners (as notified by Member States) to which that Regulation applies. They have been replaced by Regulation (EU) 2021/2260 of 15 December 2021.

The new Annexes are operative as of 9 January 2022

The reasons for the amendment are explained given in Recital 2 of the Regulation:

In October 2020, the Netherlands notified the Commission of recent changes in its national insolvency law which introduced a new preventive insolvency scheme, as well as new types of insolvency practitioners. That notification was followed in December 2020 by notifications from Italy, Lithuania, Cyprus and Poland relating to recent changes in their national law which introduced new types of insolvency proceedings or insolvency practitioners. Following the submission by the Commission of its proposal for an amending Regulation, further notifications were received from Germany, Hungary and Austria relating to recent changes in their national law which introduced new types of insolvency proceedings or insolvency practitioners. Subsequently, Italy clarified the date of entry into force of its new provisions on insolvency and restructuring which it had notified to the Commission in December 2020, and notified an amendment to a previous notification. Those new types of insolvency proceedings and insolvency practitioners comply with.

Neither Ireland nor Denmark are taking part in the adoption of the Regulation. Accordingly, they are not bound by it or subject to its application.

The second issue of 2021 of Giustizia Consensuale (published by Editoriale Scientifica) has just been released and it features:

Silvia Barona Vilar (Professor at the University of València) Sfide e pericoli delle ADR nella società digitale e algoritmica del secolo XXI (Challenges and Pitfalls of ADR in the Digital and Algorithmic Society of the XXI Century; in Italian)

In the XX century, dispute resolution was characterized by the leading role played by State courts: however, this situation has begun to change. With modernity and globalization has come the search of ways to ensure the ‘deconflictualisation’ of social and economic relations and solve conflicts arising out of them. In this context, ADR – and now ODR – have had a decisive impulse in the last decades and are now enshrined in the digital society of the XXI century. ADR mechanisms are, in fact, approached as means to ensure access to justice, favouring at the same time social peace and citizens’ satisfaction. Nevertheless, some uncertainties remain and may affect ADR’s impulse and future consolidation: among such uncertainties are the to-date scarce negotiation culture for conflict resolution, the need for training in negotiation tools, the need for State involvement in these new scenarios, as well as the attentive look at artificial intelligence, both in its ‘soft’ version (welfare) and its ‘hard’ version (replacement of human beings with machine intelligence).

Amy J. Schmitz (Professor at the Ohio State University), Lola Akin Ojelabi (Associate Professor at La Trobe University, Melbourne) and John Zeleznikow (Professor at La Trobe University, Melbourne), Researching Online Dispute Resolution to Expand Access to Justice

In this paper, the authors argue that Online Dispute Resolution (ODR) may expand Access to Justice (A2J) if properly designed, implemented, and continually improved. The article sets the stage for this argument by providing background on ODR research, as well as theory, to date. However, the authors note how the empirical research has been lacking and argue for more robust and expansion of studies. Moreover, they propose that research must include consideration of culture, as well as measures to address the needs of self-represented litigants and the most vulnerable. It is one thing to argue that ODR should be accessible, appropriate, equitable, efficient, and effective. However, ongoing research is necessary to ensure that these ideals remain core to ODR design and implementation.

Marco Gradi (Associate Professor at the University of Messina), Teoria dell’accertamento consensuale: storia di un’incomprensione (The Doctrine of ‘Negotiation of Ascertainment’: Story of a Misunderstanding; in Italian)

This article examines the Italian doctrine of ‘negotiation of ascertainment’ (negozio di accertamento), by means of which the parties put an end to a legal dispute by determining the content of their relationship by mutual consent. Notably, by characterizing legal ascertainment as a binding judgment vis-à-vis the parties’ pre-existing legal relationship, the author contributes to overcoming the misunderstandings that have always denoted the debate in legal scholarship, thus laying down the foundations towards a complete theory on consensual ascertainment.

Cristina M. Mariottini (Senior Research Fellow at the Max Planck Institute Luxembourg for Procedural Law), The Singapore Convention on International Mediated Settlement Agreements: A New Status for Party Autonomy in the Non-Adjudicative Process

The United Nations Convention on International Settlement Agreements Resulting from Mediation (the ‘Singapore Convention’), adopted in 2018 and entered into force in 2020, is designed to facilitate cross-border trade and commerce, in particular by enabling disputing parties to enforce and invoke settlement agreements in the cross-border setting without going through the cumbersome and potentially uncertain conversion of the settlement into a court judgment or an arbitral award. Against this background, the Convention frames a new status for mediated settlements: namely, on the one hand it converts agreements that would otherwise amount to a private contractual act into an instrument eligible for cross-border circulation in Contracting States and, on the other hand, it sets up an international, legally binding and partly harmonized system for such circulation. After providing an overview of the defining features of this new international treaty, this article contextualizes the Singapore Convention in the realm of international consent-based dispute resolution mechanisms.

 

Observatory on Legislation and Regulations

Ivan Cardillo (Senior Lecturer at the Zhongnan University of Economics and Law in Wuhan), Recenti sviluppi della mediazione in Cina (Recent developments in mediation in China; in Italian)

This article examines the most recent developments on mediation in China. The analysis revolves around, in particular, two prominent documents: namely, the ‘14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035’ and the ‘Guiding Opinions of the Supreme People’s Court on Accelerating Steps to Motivate the Mediation Platforms of the People’s Courts to Enter Villages, Residential Communities and Community Grids.’ In particular, the so-called ‘Fengqiao experience’ ? which developed as of the 1960s in the Fengqiao community and has become a model of proximity justice ? remains the benchmark practice for the development of a model based on the three principles of self-government, government by law, and government by virtue. In this framework, mediation is increasingly identified as the main echanism for dispute resolution and social management: in this respect, the increasing use of technology proves to be crucial for the development of mediation platforms and the efficiency of the entire judicial system. Against this background, the complex relationship becomes apparent between popular and judicial mediation, their coordination and their importance for governance and social stability: arguably, such a relationship will carry with it in the future the need to balance the swift dispute resolution with the protection of fundamental rights.

Angela D’Errico (Fellow at the University of Macerata), Le Alternative Dispute Resolution nelle controversie pubblicistiche: verso una minore indisponibilità degli interessi legittimi? (Alternative Dispute Resolution in Public Sector Disputes: Towards an Abridged Non-Availability of Legitimate Interests?; in Italian)

This work analyzes the theme of ADR in publicity disputes and, in particular, it’s understood to deepen the concepts of the availability of administrative power and legitimate interests that hinder the current applicability of ADRs in public matters. After having taken into consideration the different types of ADR in the Italian legal system with related peculiarities and criticalities, it’s understood, in the final part of the work, to propose a new opening to the recognition of these alternative instruments to litigation for a better optimization of justice.

 

Observatory on Jurisprudence

Domenico Dalfino (Professor at the University ‘Aldo Moro’ in Bari), Mediazione e opposizione a decreto ingiuntivo, tra vizi di fondo e ipocrisia del legislatore (Mediation and Opposition to an Injunction: Between Underlying Flaws and Hypocrisy of the Legislator; in Italian)

In 2020, the plenary session of the Italian Court of Cassation, deciding a question of particular significance, ruled that the burden of initiating the mandatory mediation procedure in proceedings opposing an injunction lies with the creditor. This principle sheds the light on further pending questions surrounding mandatory mediation.

 

Observatory on Practices

Andrea Marighetto (Visiting Lecturer at the Federal University of Rio Grande do Sul) and Luca Dal Pubel (Lecturer at the San Diego State University), Consumer Protection and Online Dispute Resolution in Brazil

With the advent of the 4th Industrial Revolution (4IR), Information and Communication Technology (ICT) including the internet, computers, digital technology, and electronic services have become absolute protagonists of our lives, without which even the exercise of basic rights can be harmed. The Covid-19 pandemic has increased and further emphasized the demand to boost the use of ICT to ensure access to basic services including access to justice. Specifically, at a time when consumer relations represent the majority of mass legal relations, the demand for a system of speedy access to justice has become necessary. Since the early ’90s, Brazil has been at the forefront of consumer protection. In the last decade, it has taken additional steps to enhance consumer protection by adopting Consumidor.gov, a public Online Dispute Resolution (ODR) platform for consumer disputes. This article looks at consumer protection in Brazil in the context of the 4IR and examines the role that ODR and specifically the Consumidor.gov platform play in improving consumer protection and providing consumers with an additional instrument to access justice.

In addition to the foregoing, this issue features the following book review by Maria Rosaria Ferrarese (Professor at the University of Cagliari): Antoine Garapon and Jean Lassègue, Giustizia digitale. Determinismo tecnologico e libertà (Italian version, edited by M.R. Ferrarese), Bologna, Il Mulino, 2021, 1-264.

The new issue of the Revue Critique de Droit International Privé (4/2021) is out. It contains four articles and numerous case notes.

The editorial by Horatia Muir Watt (Sciences Po), Dominique Bureau (University of Paris II) and Sabine Corneloup (University of Paris II) will soon be available in English on Dalloz website (Autour de l’enfant. Interpréter les signes : retour au calme ou déraison du monde ?).

In the first article, Etienne Pataut (University of Paris 1, Sorbonne Law School) discusses the (changing) role of effectiveness in nationality matter (Contrôle de l’État ou protection de l’individu ? Remarques sur l’effectivité de la nationalité).

Effectiveness of nationality seems to be changing. Its traditional role, in the matter of conflicts of nationalities and the international opposability of nationality, seems indeed contested and effectiveness does not seem in a position to oppose the more attentive consideration of the subjective rights of individuals. Conversely, this concern could reinforce the consideration of effectiveness when it makes it possible to demonstrate the existence of a link between the individual and the State which could lead to a challenge to a measure of deprivation of nationality. This development could bear witness to a profound change in the nationality itself.

In the second article, Sabine Corneloup (University of Paris II) analyses the parallel application of the 1980 Hague Child Abduction Convention and the 1951 Geneva Refugee Convention in the context of a recent decision of the UK Supreme Court (Demande de retour d’un enfant enlevé et principe de non-refoulement des réfugiés : lorsque la Convention de La Haye de 1980 rencontre la Convention de Genève de 1951).

Over the past years, there has been an increase in the number of applications for a return of abducted children within families applying for asylum. The parallel application of the 1980 Hague Child Abduction Convention and the 1951 Geneva Refugee Convention may prove to be problematic. Whereas the objective of the former is to ensure the child’s prompt return, the latter establishes the fundamental principle of non-refoulement to the State from which the refugee fled. In France, no case law has emerged so far, making the decision rendered by the UK Supreme Court on 19 March 2021 in G v. G even more interesting, not only as a source of inspiration, but also for the parts raising strong concern. In summary, the Supreme Court ruled that a child named as a dependant on her parent’s asylum request has protection from refoulement pending the determination of that application so that until then a return order in the 1980 Hague Convention proceedings cannot be implemented. In the relationships between two EU Member States, the conflict of the rationales underpinning the regulations Brussels II and Dublin III appears less acute as, in principle, the asylum applicant has no fear of persecution in any of these countries, but difficulties of articulation exist nevertheless, as the recent decision of the Court of Justice of 2 August 2021 in A v. B demonstrates.

In the third article, Rachel Pougnet (Bristol & Manchester Universities) examines a recent decision of the UK Supreme Court in the field of deprivation of nationality (La déchéance de nationalité devant la Cour suprême du Royaume-Uni : déférence judiciaire et sécurité nationale).

For the third time in ten years, the UK Supreme Court has been confronted with a deprivation of nationality order issued by the UK government. In this “Begum” decision of February 2021, the Supreme Court decided that Shamima Begum should not be allowed back into the country to conduct her appeal against the deprivation of her citizenship. The Court enshrined wide deference to the executive on national security grounds. Indeed, the court granted a wide margin of appreciation to the government when exercising its discretion to implement a deprivation order, due to the proximity of the measure with national security interests. In “Begum”, the Supreme Court also put the right to a fair trial on balance with security arguments.

In the fourth article, Christelle Chalas (University of Lille) analyses several rulings of the French Cour de Cassation in the specific context of international child abductions within Franco-Japanese families (La convention de La Haye du 25 octobre 1980 à l’épreuve de l’enlèvement international d’enfants franco-japonais).

This post was contributed by François Mailhé, who is Professor at the University of Picardy – Jules Verne.

On 17 November 2021, the French Cour de cassation rendered a decision making a reference for a preliminary ruling to the European Court of Justice on the regime of res judicata under the Brussels Ibis Regulation. Readers of the blog will recall that the Cour de cassation had already made a reference on the same issue a few months ago (see the report of this decision of 8 September 2021 of Fabienne Jault Seseke here). The purpose of this post is to share some views on the various methods the Court may follow in its answer, as illustrated by but not limited to this November reference (and possibly for a joined cases decision), and what is at stake behind them.

Background

The case is simple. A decade ago already, a Luxembourger company, Recamier, sued for tort a former member of the board, Mr “Z”, based on an alleged misappropriation of assets. The claim was eventually rejected on appeal, in January 2012. Whatever the reality of the facts, Luxembourg law knows the principle of non additionality and this claim could only be based on contractual liability, not on tort.

One month later, Recamier followed up with the suit by seizing a French court, where Mr Z was domiciled. It was based, in line with that Luxembourger decision, on a contract claim. Still, before that court and in a long series of five decisions afterwards (the Cour de cassation was first seized after the first appeal decision for a problem of motivation), the dispute focused on the preclusive effect, the res judicata of that Luxembourger decision. For the defendant, claimant was barred to act in France for the same claim, even changing the legal basis. This is what this 17 November 2021 Cour de cassation decision was concerned with.

How come res judicata could be opposed to the contractual claim, when only an action in tort was decided in Luxembourg? This has to do with the Cesareo decision of the Cour de cassation (Plenary Assembly) of 7 July 2006. Under French law, the res judicata effect is indeed conditioned to the identity of the claims, an identity verified in the three classical elements : parties, cause and subject-matter, with the “cause” being understood as the arguments raised by the claimant in support of his claim. But, where before 2006 these arguments were both arguments of facts and law, the Cesareo decision restricted them to factual arguments only. In other words, a claimant may not bring a new suit on the same facts for the same purpose even if he changes the legal basis for it. Recamier was therefore, under this case-law, barred from claiming liability from Mr Z on the basis of contract law if it had already tried it before, even if only in tort.

The problem now unfolds : why applying French law, the law of the State where recognition is sought, to the effect of a Luxembourger decision? Should not one apply Luxembourg law, the law of the State of origin? Or, as its effect is here based on Article 33 Brussels I (Article 36 Brussels I bis), a European notion of res judicata? This is what the Cour de cassation wondered, and what it forwarded to the ECJ.

But the preliminary question could not be avoided : the precedents on the issue are not conclusive, and the issue actually begs for more than one, or rather more than one layer of questions, because before choosing the solution, the ECJ will have first to choose the method for finding it: conflict rule, autonomous notion or something else?

Precedents

This is not the first time the ECJ will have to characterize the elements of res judicata.

We should start by excluding as precedents those cases dealing with the identity of the claims in lis pendens situations. This case-law has been made to anticipate conflicts of decisions precisely in a context of diversity of national res judicata regimes. Its understanding of an identity of claims therefore embraces more than it specifies.

Instead, it seems more fruitful to turn towards those case where the Court had to handle the regime of the foreign judgment. It was the issue in Hoffmann (ECJ, 4 February 1988, Case 145/86), Apostolides (ECJ, 28 April 2009, Case C-420/07) and Gothaer (15 November 2012, Case C-456/11) with different perspectives.

In Hoffman and Apostolides, the Court quoted the Jenard Report, considering judgments must be acknowledged the “authority and effectiveness accorded to them in the state in which they were given”. But both decisions also added to that quote by allowing the law of the State of enforcement to reframe or even refuse these effects according to its own standards. The solution is even less certain that the two decisions did not exactly phrase any general solution, but rather specific exceptions. What is more, or rather less helpful for Recamier is that those decisions were concerned with the substance of a foreign judgment, an issue quite different from res judicata which deals with a procedural effect of the judgment, independently from its substance.

Gothaer is more interesting, since it precisely intends to create such an effect. Asked whether a Belgian judgment on competence (more exactly on the effect of the validity of a forum selection clause) could prevent the issue to be discussed anew in Germany, the Court answered it should, considering that “[the] requirement of the uniform application of European Union law means that the specific scope of that restriction must be defined at European Union level rather than vary according to different national rules on res judicata”. The Court even went further than AG Bot’s opinion in providing a regime for such an effect, aligning it to that of the decisions of the General Court of the ECJ. It justified the solution by considering it defines the “concept of res judicata under European Union law”. But the scope of that case may limit its interest, as it seems related to competence decisions alone.

Overall, those precedents do not definitely choose between conflict rules and autonomous notions of substantive rules. It will be one of the issues the ECJ will therefore have to decide upon.

First Method: A Conflict of Laws Rule

It must be noticed that the Cour de cassation actually asks the ECJ if it wants to create an ad hoc European conflict of laws rule. This is, by itself, an interesting opportunity. Seldom has the ECJ taken the chance to forge a new conflict rule (see e.g., though, and very implicitly, CJEU, Civil service tribunal, 14 oct. 2010, Mandt), since most conflict of laws issues it has encountered were submitted to conflict rules of the forum (now generally covered by a European rule, Rome I and II especially). Creating such an ad hoc conflict rule would be a very interesting move by the ECJ, both as it would be a sound solution and as it would give another dimension to the court’s case-law (in line with the EU favour for this kind of legislation those two last decades).

But, as often, the problem would lie in the choice of the connecting factor. Both those proposed by the Cour de cassation have serious claims to be applied. The law of the country of origin is probably the law the claimant (who is the one primarily concerned by res judicata) contemplated during the proceedings there since the possibility to restart proceedings in another country later on was simply not in his interest. Reciprocally, it is as true to say that res judicata is an effect that concerns the legal system, more than individual decisions. This is actually the usual solution given in common PIL by French case-law. The legislation on res judicata aims at preventing litigation to restart before a new court, so that it is this second court, and second judicial system, which is most concerned with it (it actually only mirrors the variety of rationale for the recognition of a foreign judgment, see Cuniberti, Le fondement de l’effet des jugements étrangers, Collected Courses of the Hague Academy of International Law, vol. 394). Some even offer to distinguish the issues within the res judicata regime to have each governed by one of those laws or by the law of the claim (in French again, see Peroz, La réception des jugements étrangers dans l’ordre juridique français, LGDJ 2005).

The exact analysis could therefore be that, somehow, the effect should be governed by both law of origin and law of recognition (by analogy, this is the approach followed by both Hoffman and Apostolides).

As a consequence, accepting the idea that both laws should have a say in the matter, the question differs. It is not so much about defining a correct conflict rule than, quite simply, a matter of deciding on the relevance of the limits imposed upon the effects of a foreign decision. Here, the obvious question is whether the very specific French solution may be applied to a Luxembourger decision. This is where uniform European substantive rules have more relevance.

Second Method: An Autonomous Notion of res judicata

The general phrasing of the decision in Gothaer, together with the generality of the regime of the General Court decisions it is referring to, could be considered as offering all national court decisions a res judicata effect similar to that of the decisions of the General Court of the ECJ.

This would clearly be disastrous. As developed elsewhere (“Entre Icare et Minotaure. Les notions autonomes de droit international privé de l’Union », in Le droit à l’épreuve des siècles et des frontières, Mélanges en l’honneur du professeur Bertrand Ancel, LGDJ/Iprolex 2018, p. 1137), creating European autonomous notions is not innocuous. Words in European texts may refer to situations of facts which definition can be given autonomously at the European level, but it is an entirely different thing when such a word actually relates to a notion which is itself governed by a whole regime. A good example is the Coman case (ECJ, 5 June 2018, C-673/16). In this famous case on the notion of “spouse”, it was proposed that the Court develop an autonomous notion of “marriage” to have all spouses (same-sex or not) benefit the same rights of free movement within the EU despite prohibiting national laws. But such a “autonomous” notion would have actually been very fragile, since it would not have masked that the validity and otherwise general effects of marriages must be verified according to national laws, and that any such notion of “autonomous marriages” would risk offering dual situations to the spouses: they could be married “autonomously” and unmarried nationally. Marriage is a national notion because it covers national regimes ; creating an autonomous “marriage” would be like tailoring a jacket for a ghost.

Instead, in Coman, the ECJ wisely decided to refrain from doing so, and only refused to member State the possibility to prevent recognizing foreign marriages on the basis of gender of the spouses. It is therefore not the notion of marriage itself which is autonomous, but only, for purposes of EU law, that part of its regime relating to the condition of gender. The Court decided to limit the freedom of the States to impose their views for the necessities of free movement ; the same, actually, that is done for public policy or overriding mandatory provisions exceptions.

Res judicata, while it is not as sensitive as a person status, poses the same problem : it is not limited to characterizing a situation but also opens legal effects. Behind the universally admitted principle, it meets practice with a variety of regimes adapting to different situations and (national) political choices : the origin, type, content, wording, status of the decision may vary its effect, not even mentioning, of course, its procedural status as means of defence (Barnett, Res judicata, estoppel, and foreign judgments : the preclusive effects of foreign judgments in private international law, OUP 2001).

If the court doesn’t want to engage into tailoring a conflict of laws rule, it is therefore safer in this Recamier case to keep to a minimalist approach such as in Coman (and actually, also such as in Hoffman again): deciding whether, under Article 33, the French Cesareo case-law may be attached to a foreign judgment which law does not know any equivalent.

Third Method: Evaluating the Conformity of the French Cesareo Case-law with the objectives of Article 33 of the Regulation

It is customary for the Court to rephrase questions for them to be more abstract, so let’s try it : may a State consider inadmissible claims already brought before another member State court when those claims would be admissible in that other State because they were based on another legal ground?

To that very specific question, no overarching EU principle seems, prima facie, at stake. It may therefore be of help to understand the aim of that case-law. Its very purpose, according to a common opinion in France, is to reduce the influx of cases brought before the French courts, already struggling with a very heavy caseload. It could therefore be considered a legitimate objective for a country regularly sanctioned for the length of its procedures.

But the argument brought forth by the decisions themselves is, on a free translation, that “it is incumbent on the claimant to present, at the time of the first application, all the pleas in law which he considers to be relevant to the claim”. This stresses out that, according to French law, the claimant has some kind of a duty to gather all the legal grounds for his claim in the first instance. How may such an obligation be justified when the law of that first instance didn’t provide it? This is especially true of a situation where that first decision may also have an impact on competence, forbidding to go back to this first State to pursue an otherwise perfectly legitimate claim and pushing claimant in a catch 22 situation.

In the case the Court of Justice would decide to narrow the issue down to that very specific point, it should probably lean, therefore, towards a negative answer.

Conclusion

As a conclusion, one may say a stable conflict of laws rule would be preferable for predictability (and from the perspective of the policy of the Court). Perhaps a bold Court could pose a conflict rule (probably in favour of the law of origin, as the Jenard report seems to call for) with some limitations (in favour of the law of the country of recognition, as Hoffman had already announced on another issue). It calls for longer discussions elsewhere, but the ECJ’s decision is its own and the core issue may be dealt with at lower cost. At least Gothaer seems a precedent not to follow on this issue.

This has been a long post, with more issues than answers probably. I confess this is work in progress and here were only some thoughts about it, but I hope they will provide food for those of the readers of the blog.

Samuel P. Baumgartner (University of Zürich) and Christopher A. Whytock (University of Irvine) have posted Enforcement of Judgments, Systematic Calibration, and the Global Law Market on SSRN.

The abstract reads:

There are important reasons for states to recognize and enforce the judgments of other states’ courts. There are also reasons that may militate against recognition or enforcement of certain foreign judgments, making it appropriate to calibrate or “fine tune” the presumption favoring recognition and enforcement so it is not applied too broadly. Most calibration principles, such as the principle that a judgment from a court lacking jurisdiction should not be recognized, are case-specific. However, one calibration principle that is, to our knowledge, unique to the law of the United States stands out: the principle of systemic calibration, according to which U.S. courts must not recognize or enforce foreign judgments “rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law.”

In this Article, we aim to shed empirical light on how U.S.-style systemic calibration operates in practice. We find that state-of-origin indicator scores related to systemic adequacy are on average higher when U.S. courts recognize or enforce foreign judgments than when they refuse to do so. Moreover, the probability of recognition and enforcement increases as these indicator scores increase. However, in only six of the 587 opinions in our dataset did a court refuse recognition or enforcement based explicitly on the systemic inadequacy ground. Thus, while the level of systemic calibration in U.S. courts is high, it is mostly achieved implicitly. Finally, even judgments from states with low systemic adequacy scores are sometimes recognized or enforced by U.S. courts. These findings lead us to question the need for the systemic inadequacy ground for refusal and conclude that the time is ripe for reconsidering it.

The paper is forthcoming in Theoretical Inquiries in Law, Vol. 23, No.1, 2022.

In Easygroup Ltd v Beauty Perfectionists Ltd & Ors [2021] EWHC 3385 (Ch) defendants argue that even though the proceedings were initiated prior to IP completion day (31 December 2020), the English courts no longer have jurisdiction to grant a pan-EU injunction or other remedies in respect of alleged infringement of EU trade marks (“EUTMs”).  The suggestion is that lack of such jurisdiction post 1 January 2021 is a consequence of the relevant statutory UK instrument, the Trade Marks Amendment etc (EU Exit) Regulations 2019.

The jurisdictional impact  of the EU Trademark Regulation 2017/1001 was previously considered i.a. in another Easygroup case which I discuss here. In current case, defendants argue that as a result of (potentially an omission in) the 2019 UK Statute, the High Court no longer is an ‘EU Trade Mark Court’ and, that EU Regulation 2017/1001 was not part of EU retained law under section 2(1) of the EU Withdrawal Act 2018. Their submission is based entirely on statutory construction, involving ia reading of the EU Withdrawal Agreement Act 2020 and its alleged impact on Withdrawal Agreement rights.

[48] ff Flaux C takes a much shorter approach to siding with claimants, holding [50] that the clear intention of Article 67 of the Withdrawal Agreement, which has full legal effect, is that the High Court should retain the same jurisdiction under EU Regulation 2017/1001 as it had before IP completion day. He finds support in a more common sense reading of the various Statutes in the context of Brexit with arrangements (as opposed to the potential of a no-deal Brexit).

The application for strike-out was therefore dismissed.

I do not know whether appeal has been sought. The case is a good illustration of the many layers of complexity provoked by the presence of the Withdrawal Agreement (with UK commitment to provide direct effect in the same circumstances as would apply under EU law), the Trade and Co-operation Agreement, and all the statutory provisions designed to cater for both a deal and a no-deal Brexit.

Geert.

 

Easygroup v Beauty Perfectionists [2021] EWHC 3385 (Ch) (17 December 2021)
Status of retained EU law post #Brexit
Held E&W courts continue to have jurisdiction to grant pan-EU injunction or other remedies viz alleged infringement of EU #trademark https://t.co/NmaoqaGfjC

— Geert Van Calster (@GAVClaw) December 17, 2021

The most recent issue of the German Journal of Comparative Law (Zeitschrift für Vergleichende Rechtswissenschaft) features the following articles on private international and comparative law:

 

Jürgen Samtleben: Internationales Privatrecht in Guatemala

Guatemala’s rules on private international law of Guatemala are found in the Law of Judicial Organization of 1989. But conflict-of-law questions are also regulated in other laws. All these legislative texts are based on older laws, since Guatemala has a rich legal tradition on this subject. It is only against the background of this tradition that one can understand the meaning of the laws actually in force. The article discusses the different aspects of Guatemalan private international law, which today is generally based on the principle of domicile. The law of 1989 introduces two innovations which are worth emphasizing: the application of foreign law ex officio and the principle of party autonomy for international contracts.

 

Christoph Wendelstein: Eigenes und Fremdes im Kollisionsrecht

The article sheds light on the relationship between the conflict of laws and the substantive laws (potentially) called upon to apply. In doing so, the question is addressed whether the substantive law influences the conflict of laws. The focus is on the question of characterisation, which traditionally represents a kind of crystallization point between conflict of laws and substantive law. If the conflict of laws rules apply to foreign substantive law, the question may arise as to whether this completely displaces the own domestic substantive law or whether it is still relevant in some way. This refers to the ordre public and the overriding mandatory provisions (Eingriffsnormen), which are also object of the study. The focus lies on their functioning.

 

Jean Mohamed: Die aktienrechtliche actio pro socio im globalen Kontext – Zur Abgrenzung von materiellem Recht und Verfahrensrecht im anglo-amerikanischen Rechtskreis am Beispiel der derivative action in New York

The German procedure for the admission of corporate claims (derivative claims), a special institution based on stock corporation law for the so-called actio pro socio, has taken a long journey all the way to New York at present. In keeping with the verse by Frank Sinatra: “If I can make it here, I’ll make it anywhere”, the subject is whether an international movement of the shareholder action – i. e. claims of the corporation asserted in the shareholder’s own name – may be imminent. In the New York proceeding Zahava Rosenfeld, derivatively as a shareholder of Deutsche Bank AG and on behalf of Deutsche Bank AG v. Paul Achleitner et al., the conflict of laws matches the German system known in § 148 of the German Stock Corporation Act with the New York’s (and the US) concept of the related derivative suit, also known as derivative action or derivative claim. Given the potential risks involved, it seems highly relevant from a legal, academic, and political point of view to discuss and model this quite complex but so far barely studied issue. In the following, the global procedural rules of derivative actions will therefore be discussed.

 

David B. Adler: Extraterritoriale US-Discovery für Schieds- und Gerichtsverfahren im Ausland

For decades, 28 U.S.C. § 1782(a) has offered a powerful tool for parties to obtain discovery through U.S. courts for use in foreign proceedings. Referring to the statute’s twin goals to provide “efficient assistance to participants in international litigation and encourag[e] foreign countries by example to provide similar assistance to our courts”, U.S. courts have time and again demonstrated that they are willing to readily grant respective discovery requests from foreign applicants. While the U.S. Supreme Court has answered various questions regarding the applicability and scope of § 1782(a) in its Intel Corp. v. Advanced Micro Devices, Inc. decision, two key issues remained undecided. The first issue U.S. courts have been grappling with, and which has been an ongoing topic of interest among international arbitration practitioners and scholars for several decades, is whether the statute allows parties of foreign private arbitration proceedings to seek discovery via § 1782(a), or if § 1782(a) is limited to parties that seek support for a foreign court or administrative proceedings. The second issue concerns the extraterritorial reach of § 1782(a). Courts have issued diverging rulings on whether Section 1782 allows an applicant to seek the production of documents that are located outside the U.S. and on whether § 1782(a) contains a per se bar to its extraterritorial application. This article analyzes the recent appellate decisions of the United States Court of Appeals for the Second, Fourth and Sixth Circuit – which are the first appellate rulings since Intel to weigh in on these issues in detail. This article further discusses whether there should be a per se bar to the extraterritorial application of Section 1782 and explains the broad implications that the recent appellate courts’ decisions on both issues have for foreign litigants and entities that are subject to the United States’ jurisdiction.

The author of this post is Zhen Chen, PhD researcher of Private International Law at the University of Groningen.

Consumer contracts are subject to protective choice of law rules both in China and in the EU.

Under Article 6(1) of the Rome I Regulation, such consumer protective rules apply under the condition that the business pursues commercial or professional activities in, or directs such activities to the consumer’s home country. The same targeting test is adopted in Article 17(1)(c) of the Brussels I bis Regulation on jurisdiction rules over consumer contracts.

By contrast, in Chinese private international law, there is no specific jurisdiction rule over consumer contracts, consumers are subject to general jurisdiction rules. However, consumers are protected with favorable choice of law rules in China. Under Article 42 of the Chinese Conflicts Act, the law of the consumer’s habitual residence applies unless the business operator does not engage in relevant commercial or soliciting activities in the consumer’s home country.

The European approach focuses on the positive criterion by examining what constitutes a targeting activity (targeting test), whereas the Chinese approach puts more weight on the negative criterion of not applying consumer choice of law rules by examining what does not constitute a targeting activity (dis-targeting test).

Criteria of Targeting and Dis-targeting Tests

The targeting test is crucial to determining whether a business is an active business, whilst the dis-targeting test allows to determine whether a business is a passive business. From the consumer’s perspective, the targeting test ensures that only passive consumers targeted by the active business is protected. By contrast, the dis-targeting test makes sure that active consumers not targeted by passive businesses are not protected by favorable consumer choice of law rule. The targeting and dis-targeting tests are two sides of a coin. Essentially, the targeting and dis-targeting tests are examined to decide whether a business’ commercial activities have a close connection with the consumer’s country of habitual residence. In the context of globalization and digitalization, it is insufficient to rely on merely targeting test or dis-targeting test in order to protect electronic consumers. Rather, the targeting test in Article 6(1) of the Rome I Regulation should be supplemented by dis-targeting test, while the dis-targeting test in Article 42 of the Chinese Conflicts Act should be complemented by the targeting test.

A non-exhaustive list of indicative factors that may be relevant to the targeting test and dis-targeting test is provided by the CJEU in Pammer and Hotel Alpenhof judgment (paras 83, 93). It does not mean that all criteria have to be fulfilled nor each factor is decisive or conditional. The absence of one factor can be substituted by another factor. A business should have expected to sue and being sued in a State it directs to unless it expressly declares that it will not conclude contracts with consumers domiciled in that State (Pammer and Hotel Alpenhof, EU:C:2010:273, opinion of advocate general, para. 25).

For instance, in Lokman Emrek v. Vlado Sabranovic (paras 10-12), a German consumer who was looking for a second-hand motor vehicle learned from his acquaintances, instead of the Internet site, of a French business and went to the business premises France. The German consumer concluded a written sale contract with the French business at the premises in France. Although the business claimed that the consumer was an active consumer and thus should be deprived of the protection of consumer jurisdiction rules, the CJEU held that the geological factor acts as a strong evidence to indicate that the French business has not taken measures to dis-target German consumers living near the borders. The risk of being sued in the courts of the neighbouring State does not seem to be an excessive burden which might act as a disincentive to the defendant’s commercial activity (para. 37). Rather, the trader or service provider must be fully aware that a significant proportion, or even the majority, of his clientele will have their domicile in the neighbouring State. Since the French trader did not take any measures to exclude consumers from Germany, the exercise of jurisdiction by German courts should be entirely foreseeable for the French trader. This means that even of the consumer is an active consumer, the business should be subject to consumer jurisdiction and choice of law rules if the business is an active business.

Given that an indicative factor may act as a facilitating or inhibiting factor in different circumstances, it is not accurate to state that ‘the language or currency which a website uses does not constitute a relevant factor’ in Recital 24 of the Rome I Regulation. For instance, the Washington-based American e-commerce company Amazon has a country-neutral domain name ‘amazon.com’ and many country-specific domain names, such as ‘amazon.nl’, ‘amazon.it’, ‘amazon.de’ and  ‘amazon.fr’. These domain names, together with the languages used on the website (Dutch, Italian, German, French), indicate that Amazon has directed its commercial activities to European countries such as the Netherlands, Italy, Germany and France. If an Italian consumer buys products via any of these websites, the targeting test is fulfilled. In this context, the commercial activities of Amazon have directed to several counties including the consumer’s home country, and it is not necessary that the website targets only or specifically to the consumer’s home country (GP Calliess and M Renner, Rome Regulations, Wolters Kluwer, 2020, 124, para.51). Therefore, the inaccurate statement in Recital 24 of the Rome I Regulation needs to be rephrased, since the language or currency may act as a relevant factor in certain circumstances.

Geo-location and Geo-blocking Technologies

Moreover, with the development of the geo-location and geo-blocking technologies, the weight has shifted partly from the targeting test to the dis-targeting test. Geolocation technologies allow the identification of the geographical location of a user accessing the Internet, whereas geo-blocking technologies disallow a user’s access to certain internet applications. Such technologies re-territorialize the internet by creating border lines in global internet applications such as websites, social media platforms, search engines and other applications(J Hörnle, Internet Jurisdiction Law and Practice, OUP, 2021, 448). Although these technologies represent a threat to the Internet’s borderlessness, it also means that it is possible for a business advertising via websites to restrict its products and services to consumers from particular countries. Nevertheless, if the consumer misrepresent himself or herself about the domicile deliberately, and the business is in good faith, jurisdiction and choice of law rules over consumer contracts in Articles 17-19 of the Brussels I bis Regulation and in Article 6 of the Rome I Regulation cannot be invoked to protect the consumer. It is noticeable that traveling in cyberspace, or cyber-travel, allows Internet users to view the Internet as if they were in a location other than where they are physically present. Many cyber-travel tools for the evasion of geo-location have become sufficiently user-friendly to allow even average Internet users to utilize them(M Trimble, ‘The Future of Cyber-travel: Legal Implications of the Evasion of Geolocation’, 22 Fordham Intellectual Property, Media and Entertainment Law Journal 2012, 569.). If a consumer domiciled in one country claims living in another country, and deliberately covers its whereabouts by using anti-geolocation tools, in particular VPNs, or by giving a false address, such proactive consumers should not be protected by the favorable jurisdiction and choice of law rules, as the protection of the businesses’ reasonable expectation should also be taken into consideration.     

To sum up, the dis-targeting test focuses on whether a business has taken active measures to dis-target consumers from a particular country and avoid concluding contracts with unsolicited or unintended consumers from that country. This means that instead of asking the difficult question of whether a business has targeted a particular jurisdiction, it may rather examine whether the business has taken steps to dis-target consumers (D Svantesson, ‘Time for the Law to Take Internet Geolocation Technologies Seriously’, 8 JPIL 2012, 485). The adoption of a combination of the targeting test and dis-targeting test may enhance legal certainty, while allowing space for legal flexibility to adapt to fast-changing technology and marketing strategies.

For a more elaborate discussion of the criteria employed in the framework of the targeting and dis-targeting tests, see ‘Internet, Consumer Contracts and Private International Law: What Constitutes Targeting Activity Test?’, by the author of this post, published on Information and Communications Technology Law, freely accessible here. 

Dr Johannes Ungerer (Lecturer, University of Oxford)

Cross-border disputes are particularly complex due to the challenges involved in understanding and deciding on the applicable law and international jurisdiction. Contrary to this reality, it is commonly assumed that all private parties are capable of rational choices in pursuit of efficiency, which however disregards the fact that humans are not always guided by rationality but can be affected by psychological biases. Acknowledging ‘bounded rationality’ in cross-border cases calls for reconsidering the way private international law determines which law shall apply and which court may hear the case. In particular, it requires analysing connecting factors from this new perspective, thus appreciating the significance of how bounded rationality affects private parties in choosing a law or court or abstaining from choice.

In an English paper published in RabelsZ volume 1/2022 of mine, such a new approach is pursued based on the insights of behavioural economics, which have been neglected in private international law to date. Looking at the existing EU instruments, the paper investigates how the connecting factors of the Rome and Brussels Regulations are designed to ‘nudge’ private parties towards a particular jurisdiction, both with regard to subjective and objective connecting factors. Special consideration is given to the requirements of nudging to justify its libertarian paternalism. Particularly illustrative is the application of behavioural insights to the paradigmatic area of consumer protection.

The paper finds that, amending the traditional economic analysis and its assumption of rational decision-making in pursuit of efficiency, behavioural economics contributes a more realistic understanding of private international law and its connecting factors. Objective connecting factors in the Rome and Brussels Regulations, such as the habitual residence or domicile of a particular party to the case in addition to more specific factors, are relied upon in the absence of a valid choice of law or court by the parties. These objective connecting factors can be understood as the lawmaker’s nudges towards a predetermined jurisdiction for the benefit of the parties, and not merely for the sake of individual efficiency. Behavioural economics appreciates that objective connecting factors are majoritarian default rules, but unlike the traditional economic understanding of this term and its hypothetical consensus explanation, the new perspective can openly acknowledge that default rules are set by the lawmaker, who is legitimised by the majority, as a form of libertarian paternalism. Yet, because of their characteristic as a safety net, which still allows the parties to make deviating arrangements, the objective connecting factors are defaults which serve as both choice-preserving and debiasing decisions without being coercive.

Subjective connecting factors, which enable and regulate party autonomy with regard to choice of law and court, are to be conceived as choice architecture from the perspective of behavioural economics. This understanding is to be preferred to previous explanations which draw on a naturalist or positivist reasoning in analogy to substantive private autonomy or which solely proclaim individualist freedom striving for efficiency. By ensuring a choice-preserving design which complements the default rules, the lawmaker can be understood to pursue nudging by providing for a suitable and legitimised choice architecture that steers the choice of law and court. From this perspective, the regulation and limitations of party autonomy are to be seen as measures of libertarian paternalism which intend to protect private parties from their own fallibility and from exploitation by others when making choices.

In response to existing criticism against nudging as a form of libertarian paternalism, the requirements of transparency and a choice-preserving design have proved particularly important. They are met by providing for specific and general defaults (sector-specific and residual objective connecting factors) alongside a choice architecture with clear validity

Carlos Santaló Goris, Research Fellow at the Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law and Ph.D. candidate at the University of Luxembourg, offers an analysis on the recently approved reform of the French Manual on Tax Procedures (“Livre des procédures fiscales”) influenced by Regulation No 655/2014, establishing a European Account Preservation Order (“EAPO Regulation”). The EAPO Regulation and other EU civil procedural instruments are the object of study in the ongoing EFFORTS project, with the financial support of the European Commission. 

FICOBA (“Fichier national des comptes bancaires et assimilés”) is the French national register containing information about all the bank accounts in France. French bailiffs (“huissiers”) can rely on FICOBA to to facilitate the enforcement of an enforceable title or upon a request for information in the context of an EAPO proceeding (Article L151 A of the French Manual on Tax Procedures). In January 2021, the Paris Court of Appeal found discriminatory the fact that creditors could obtain FICOBA information in the context of an EAPO proceeding but not in the context of the equivalent French domestic provisional attachment order, the “saisie conservatoire” (for a more extended analysis of the judgment, see here). While an enforceable title is not a necessary precondition to access FICOBA in the context of an EAPO, under French domestic law it is. Against this background, the French court found that creditors who could apply for an EAPO were in a more advantageous position than those who could not. Consequently, it decided to extend access to FICOBA to creditors without an enforceable title who apply for a saisie conservatoire.

In December 2021, the judgment rendered by the Paris Court of Appeals was transposed into French law. In fact, the French legislator introduced an amendment to the French Manual on Tax Procedures, allowing bailiffs to collect information about the debtors’ bank accounts from FICOBA based on a saisie conservatoire (Art. 58 LOI n° 2021-1729 du 22 décembre 2021 pour la confiance dans l’institution judiciaire).

In is nevertheless noteworthy that the judgment of the Paris Court of Appeal that inspired such reform is based on a misinterpretation of the EAPO Regulation. Access to the EAPO Regulation’s information mechanism is limited to creditors with a title (either enforceable or not enforceable). Creditors without a title are barred from accessing the EAPO’s information mechanism. From the reasoning of the Paris Court of Appeal, it appears that the Court interpreted the EAPO Regulation as granting access to the EAPO’s information mechanism to all creditors, even to those without a title. Such an interpretation would have been in accordance with the EAPO Commission Proposal, which gave all creditors access to the information mechanism regardless of whether they had a title or not. However, the Commission’s open approach was received with scepticism by the Council and some Member States. Notably, France was the most vocal advocate of limiting the possibilities of relying on the EAPO information mechanism. It considered that only creditors with an enforceable title should have access to it. In particular, the French delegation argued that, under French law, only creditors with an enforceable title could access such sensitive data about the debtor. Eventually the European legislator decided to adopt a mid-way solution between the French position and the EAPO Commission Proposal: namely, in accordance with the Regulation creditors are required to have a title, though this does not have to be enforceable.

The following is an interesting paradox. Whereas France tried to adjust the EAPO’s information mechanism to the standards of French law, it was ultimately French law that was amended due to the influence of the EAPO Regulation. An additional paradox is that the imbalance between creditors who can access the EAPO Regulation and those who cannot (as emphasized and criticised by the Paris Court of Appeal) will continue to exist but with the order reversed. Once the French reform enters into force, creditors without a title who apply for a French saisie conservatoire of a bank account will be given access to FICOBA. Conversely, creditors who apply for an EAPO will continue to be required to have a title in order to access FICOBA. Only an amendment of the EAPO Regulation can change this.

The moment for considering a reform of the EAPO Regulation is approaching. In accordance with Article 53 of the EAPO Regulation, the European Commission should have sent to the European Parliament and the European Economic and Social Committee “a report on the application of this Regulation” by 18 January 2022. These reports should serve as a foundation to decide whether amendments to the EAPO Regulation are desirable. Perhaps, as a result of the experience offered with the judgment of the Paris Court of Appeal, the European legislator may consider extending the EAPO’s information mechanism beyond creditors with a title.

 

The editors of the European Yearbook for International Economic Law (EYIEL) welcome abstracts from scholars and practitioners at all stages of their career for the focus section of the EYIEL 2022. This year’s focus will be on the impact of climate change on international economic law.

Abstracts may cover any topic relating to dispute settlement in the field of international economic law, though preference is given to topics focusing on the perspective from public and private international or EU law. Contributions addressing the following aspects are particularly welcome:

• Climate change in WTO and international trade law
• Impact of investment protection treaties on energy transformation
• Reform of the Energy Charter Treaty
• Financial and monetary law aspects of climate change
• Relationship between UNFCCC and Glasgow Climate Pact and international economic law
• Climate change litigation in domestic and international courts
• Liability for climate change in private (international) law

Abstracts should not exceed 500 words. They should be concise and clearly outline the significance of the proposed contribution. Abstracts may be submitted until 28 February 2022 via e-mail to eyiel@leuphana.de.

Successful applicants will be notified by 1 April 2022 that their proposal has been accepted. They are expected to send in their final contribution by 30 June 2021.

Final submissions will undergo peer review prior to publication. Given that submissions are to be developed on the basis of the proposal, that review will focus on the development of the paper’s central argument.

Submissions addressing particular regional and institutional developments should be analytical and not descriptive. Due to its character as a yearbook, EYIEL will not publish articles which will lose their relevance quickly. Submissions should not exceed 12,000 words (including footnotes and references), though preference may be given to shorter submissions. They should include an abstract and a biographical note. Submissions need to be in conformity with the EYIEL style guidelines.

The editors of the EYIEL welcome informal enquiries about any other relevant topic in the field of international and European economic law. In case you have an idea or proposal, please submit your enquiry via e-mail to eyiel@leuphana.de.

AG Szpunar delivered yesterday his opinion in case C‑617/20 (T. N., N.N. v E.G.), which is about the Succession Regulation. The opinion is currently available in all EU official languages (save Irish), albeit not in English. Here is the French version (to check whether an English translation has finally been made available, just click on the link below and change the language version).

« Les dispositions des articles 13 et 28 du règlement (UE) no 650/2012 […] doivent être interprétées en ce sens que l’exigence, prévue par la loi applicable à la succession, consistant à faire une déclaration concernant la renonciation au tribunal de la succession, c’est-à-dire à la juridiction du lieu de résidence habituelle du défunt au moment de son décès, est une condition de validité quant à la forme de cette déclaration. Partant, lorsque la validité quant à la forme de la déclaration faite est appréciée au regard de la loi visée à l’article 28, sous b), de ce règlement, le non‑respect de cette exigence n’entraîne pas l’invalidité de la déclaration faite devant la juridiction compétente en vertu de l’article 13 dudit règlement ».

Source : https://curia.europa.eu/juris/document/document.jsf?text=&docid=252466&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=351236

AG Collins delivered yesterday his opinion in Case C‑430/21 (RS), which is about the Rule of Law in Romania.

Suggested decision : « The principle of the independence of the judiciary, enshrined in the second subparagraph of Article 19(1) TEU, read in conjunction with Article 2 TEU and Article 47 of the Charter of Fundamental Rights of the European Union, precludes a provision or a practice of national law of a Member State according to which national courts have no jurisdiction to examine the conformity with EU law of a provision of national law that has been found to be constitutional by a decision of the constitutional court of that Member State. That same principle precludes the initiation of disciplinary proceedings and the application of disciplinary penalties in respect of a judge arising from such an examination ».

Source : https://curia.europa.eu/juris/document/document.jsf?docid=252467&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang=EN&cid=350416

Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) is the second High Court judgment in the space of a few weeks to involve Lebanese Banks and the application of the protective regime for consumers in EU private international law. (See earlier Bitar v Banque Libano-Francaise).

Foxton J explains why there is such activity: difficult financial conditions faced by Lebanese banks and their customers at the current time, and the practical impossibility of transferring foreign currency out of Lebanon, caused acute anguish for those with foreign currency accounts in Lebanese banks. Understandably they have explored every avenue open to them in an effort to access their hard-won savings.

Jurisdiction would seem not to be in dispute (presumably given the presence of non-exclusive choice of court in a general agreement), applicable law is. Even in consumer contracts, Article 6 Rome I allows parties to the contract to chose applicable law – except such choice must not deprive the consumer of the protection of the mandatory elements of the law that would apply had no choice been made: that ‘default law’, per Article 6(1) Rome I, is the law of the consumer’s habitual residence.

Whether choice of law has been made is to be determined in accordance with Article 3, which proscribes that choice of law must be  either nominatim, or ‘clearly demonstrated’ by the circumstances of the case. The latter is often referred to as ‘implicit’ choice of law although there is nothing truly implicit about it: choice of law cannot be made happenstance, it must have been made clearly (even if not in so many words). [47] ff the judge considers whether ‘implicit’ choice has been made, referring to Avonwick,  and holds [66] that there was, namely in favour of Lebanese law. He concludes this as a combined effect of

a jurisdiction clause in a related, general agreement which he found to be exclusive [63] in favour of Beirut; I have to say I do not think the judgment engages satisfactorily with the argument that this hybrid clause itself is questionable under the lex causae (including consumer law) that would have to apply to it;

the express reference to an agreement to comply with and facilitate the enforcement of identified provisions of Lebanese law; and

the express choice of Lebanese law in a closely related and interwoven contract.

Clearly some of this analysis is fact-specific and subjective however in my view the lex causae element of hybrid choice of court has more beef to the bone.

As for the issue of ‘activities directed at’ the UK, this is discussed [68] ff. First up is an interesting discussion on the relevant time at which the habitual residence of the consumer has to be considered. In light ia of CJEU Commerzbank, which presumably was not available at the time of the discussion, I would suggest the conclusion [73] that the temporal element needs to be fixed at the very beginning, to avoid see-sawing and dépeçage, may need revisiting.

In terms of the actual directing of activities, Pammer /Alpenhof of course is discussed as is Emrek. Having discussed the evidence, the conclusion [105] ff is that there was no direction of activities.

As a result, the remainder of the judgment deals with the substantive issues under Lebanese law.

I do not know whether permission to appeal has been sought. There are sections in the judgment that in my view would merit it.

Geert.

EU private international law, 3rd ed. 2021, Heading 2.2.9.2.7, 2.270 ff; Heading 3.2.4, Heading 3.2.5.

 

Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) (17 December 2021)
'Implied' choice of (Lebanese) law under A3 Rome I, held no consumer contract under A6 Rome I (contrast with https://t.co/cCLpRV7EGphttps://t.co/3pGSujhBYQ

— Geert Van Calster (@GAVClaw) December 17, 2021

Many thanks Haco van der Houven van Oordt for flagging an (anonymised) judgment by the Den Bosch Court of Appeal, in which it refused to recognise the punitive damages element of a US (Tennessee) judgment. Damages had been awarded after a horse trainer based in The Netherlands, who had been tasked to look after and train the horse of the US based claimant, had subsequently been tasked to sell the horse and in doing so hid part of the sale price from the owner. Half a million dollar was awarded, of which exactly half in punitive damages.

The judge follows the Gazprom criteria for recognition and enforcement in The Netherlands and only objected to the punitive damages element. A bid by claimants (heirs of the meanwhile deceased owner) to argue recoverability of a chunk of the punitive damages slice, arguing that it was compensation for lawyers’ fees in the US proceedings, failed: the Dutch held that costs compensation are not ordinarily part of the punitive element of the damages and that transcripts of the US judgment and proceedings certainly did not reveal any trace of that argument.

Not an extraordinary judgment. But an instructional one.

Geert.

 

Yesterday, AG Maciej Szpunar delivered an Opinion (a French version is available, a German as well, not yet, however, an English one) that is of high relevance both to the practical application of the European Succession Regulation (ESR) as well as to issues  of European choice of law methodology in relation to substitution and characterisation.

The case emerged from a preliminary reference by the German Higher Regional Court (Oberlandesgericht) Bremen of 11 November 2020 and involved the following facts:

The deceased person, a Dutch national, died in Bremen (habitual residence) on 21 May 2018. He left behind his widow (E.G.) and two descendants (T.N. and N.N.) of his formerly deceased brother. His widow applied by notarial deed of 21 January 2019 for the issuance of a joint certificate of inheritance to the Local Court of Bremen, attributing to her ¾ of the estate and 1/8 to each of T.N. and N.N. The two descendants, however, having their habitual residence in the Netherlands, declared their waiver of succession before the Rechtbank Den Haag on 30 September 2019. In the proceedings before the Local Court of Bremen, T.N. and N.N. were heard, and by letter of 13 December 2019 in Dutch language they submitted copies of their declarations of waiver (as well in Dutch). The German court answered that it would not be able to take notice of these documents as long as it would not receive a translation into German. The two descendants thereupon declared in German to the court by letter of 15 January 2020 that they had waived, properly registered with the Dutch court, and that under European law there would be no need for translation. By decision of 27 February 2020, the Local issued the certificate as applied for by the applicant, i.e. certifying T.N. and N.N. as co-heirs. The latters appealed against this decision and, on 30 June 2020 submitted colour copies of the deeds they had used in the Netherlands as well as German translations, on 17 August 2020 they submitted the original deeds. The Local Court referred the case to the Higher Regional Court Bremen and stated that it considers the time limit for waiver under section 1944 (1) German Civil Code of six weeks after gaining knowledge about the inheritance elapsed, as a declaration of waiver would have required timely submission of the original deeds.

Thereupon, the Higher Regional Court of Bremen, in essence, referred the question to the ECJ whether a waiver in the Member State of habitual residence of the heir other than the Member State of habitual residence of the deceased would be capable of replacing the waiver required by the applicable succession law by way of substitution or whether additional requirements exist, such as that the waiving heir informs, with a view to Recital 32 Sentence 2, the competent court in the Member State of habitual residence of the deceased and if so whether the official language of that court must be used and whether the original deeds must be used in order to comply with time limits under the applicable law.

AG Maciej Szpunar reframed this question (para. 34): According to his subtle analysis, the question should be whether Articles 13 and 28 ESR are, of course autonomously (see para. 50), to be interpreted to the effect that the requirement to declare a waiver before the competent court („Nachlassgericht“) must be characterised as a question of form rather than substance which would lead to the application of the law of the Member State of the waiving heirs on this point of form under Article 28 lit. b ESR. Whereas only if this question were to be characterised as a matter of substance, the question of substitution could at all be posed. It will not come as a surprise that with this point made, the result of the – careful and comprehensive – analysis of this issue of characterisation (paras. 45 – 69), including considerations on the effet utile of the ESR (para. 64), was that indeed the point must be considered as one of form. The consequence is that since the local form was complied with in the Netherlands, the waiver must be held valid as of 30 September 2019 and as such still in time under the applicable succession law – a result that indeed facilitates cross-border succession cases in an important aspect as it is the overall objective of the ESR.

Remains the problem of how to ensure that the competent court takes notice of such a waiver (paras. 70 et seq.). This is the issue of Recital 32 Sentence 2: „Persons choosing to avail themselves of the possibility to make declarations in the Member State of their habitual residence should themselves inform the court or authority which is or will be dealing with the succession of the existence of such declarations within any time limit set by the law applicable to the succession.“ However, as in the concrete case at hand the court definitively had knowledge about the waiver, the question was not relevant and thus remained expressly left open (para. 77). As it was expressly left open as irrelevant in the concrete case we may at least conclude that any kind of gaining knowledge must suffice. Then the only remaining question is what happens if the court did not gain any knowledge. From a practical point of view a party interested in bringing its waiver to the attention of the competent court, it seems that a letter (or even an email) to that court should suffice.

One last question. Could we not say: either it is “substance”, then Article 13 refers to the lex causae (German law) or it is “form”, then Article 28 refers to the same law (German law) under lit. a and then substitution comes up, or, alternatively, under lit. b, to the law for formal issues (Dutch law). And when further proceeding sub lit. a of Article 28, could not substitution provide for the same result, at least in this concrete case, than applying lit. b? If so, we might be tempted to add that two parallel avenues to the same result indicate quite reliably that the result must be the right one. It might have been for reasons of simplifying things that AG Maciej Szpunar did not fully map out these two avenues, all the more because substitution is a technique that is little explored on the level of the EU’s PIL. However, if even the referring national court directly asks about substitution, the ECJ should take the opportunity to give us a bit more insights on this classical concept of the general part of any PIL from the perspective of the EU’s conflicts of law methodology.

Let’s hope that the ECJ takes up the ball and discusses the theoretical connotations of this case on methodical questions of characterisation and substitution as precisely and subtly as it was done in the Opinion. The CoL community will certainly await the judgment with excitement.

 

Relevant provisions of the ESR

Article 13: Acceptance or waiver of the succession, of a legacy or of a reserved share

In addition to the court having jurisdiction to rule on the succession pursuant to this Regulation, the courts of the Member State of the habitual residence of any person who, under the law applicable to the succession, may make, before a court, a declaration concerning the acceptance or waiver of the succession, of a legacy or of a reserved share, or a declaration designed to limit the liability of the person concerned in respect of the liabilities under the succession, shall have jurisdiction to receive such declarations where, under the law of that Member State, such declarations may be made before a court.

Article 28: Validity as to form of a declaration concerning acceptance or waiver

A declaration concerning the acceptance or waiver of the succession, of a legacy or of a reserved share, or a declaration designed to limit the liability of the person making the declaration, shall be valid as to form where it meets the requirements of: (a) the law applicable to the succession pursuant to Article 21 or Article 22; or (b) the law of the State in which the person making the declaration has his habitual residence.

Recital 32:

In order to simplify the lives of heirs and legatees habitually resident in a Member State other than that in which the succession is being or will be dealt with, this Regulation should allow any person entitled under the law applicable to the succession to make declarations concerning the acceptance or waiver of the succession, of a legacy or of a reserved share, or concerning the limitation of his liability for the debts under the succession, to make such declarations in the form provided for by the law of the Member State of his habitual residence before the courts of that Member State. This should not preclude such declarations being made before other authorities in that Member State which are competent to receive declarations under national law. Persons choosing to avail themselves of the possibility to make declarations in the Member State of their habitual residence should themselves inform the court or authority which is or will be dealing with the succession of the existence of such declarations within any time limit set by the law applicable to the succession

 

The Radboud University in the Netherlands is organising a two-day symposium on 9-10 June 2022 dedicated to The role of courts in the digital era and access to justice.

As underlined by the organisers:

Digitalisation is often viewed as a key condition to ensuring effective justice in the modern era, enhancing “resilience” of justice systems. It presumably helps tackle delays, enhance legal certainty, and make justice cheaper and more accessible for all. At the same time, challenges associated with digitalisation are highlighted, such as ensuring access for disadvantaged groups to digital technologies, the impact of digital technologies on fundamental rights and procedural justice, and ensuring security and privacy of digital solutions. The emergence of new technology brings with it the need for ongoing assessment of its impact.

For this reason the event seeks to provide a forum for researchers and practitioners to critically assess the process of digitalisation of justice systems and the evolving role of courts in the digital era in Europe and beyond.

A call for abstracts is ongoing until 1 February. The organisers are looking for submission of conference papers related to the following questions:

1. How does digitalisation of justice, and particularly, an increased use of remote justice and AI affect the role of courts as institutions upholding the rule of law?
2. To what extent do the different elements of ‘digital justice’, such as remote justice and AI, comply with fundamental rights and procedural justice values?
3. How and to what extent does digitalisation of justice affect individuals’ access to justice? How does it affect the role of the court as an institution providing a public service of ensuring access to justice (‘having a day in court’)?
4. How does digitalisation impact the legitimacy of the court and its symbolic role as an arena for public participation? What are the obstacles and opportunities created by the (different elements of) digitalisation of justice towards democratisation of justice and increased public participation in legal processes?
5. How does digitalisation affect the working processes and professional autonomy of judges and other court professionals?
6. Which judicial interpretation techniques are used when facing the phenomenon of digitalisation? For instance, do they also rely on soft law instruments in addition to hard law; do they use examples from international, European and foreign case-law; and how much do they rely on technical experts or amicus curiae?
7. How, if at all, does digitalisation affect the distribution of competences between the different courts and other (non-judicial) conflict-solving bodies within the judicial system? Does digitalization open new opportunities for non-judicial dispute resolution, or for enriching the toolbox available to prevent disputes from happening at all?
8. How, if at all, does digitalization facilitate (non-judicial) dispute resolution in a transnational context?
9. What is the current status of digitalisation of justice systems in practice in the various EU Member States, and how does it compare with the underlying goals and assumptions behind EU/national policies on the digitalisation of justice?
10. Do the priority areas for the digitalisation of EU justice systems identified by the European Commission in its Communication on Digitalisation of Justice in the EU, namely: digitalising public justice services; promoting the use of videoconferencing; facilitating the interconnection of national databases and registers; and promoting the use of secure digital transmission between authorities, reflect the actual priorities or needs for (further) digitalisation of justice systems?
11. What is the exact scope of challenges to the ‘digitalisation of justice’ in Europe identified by the Commission, namely: equal access to disadvantage groups; digital security concerns; ensuring respect for fundamental rights? Is the list of challenges identified by the Commission adequate and comprehensive?

Together with paper abstracts the organisers are interested to receive proposals for interactive panels or workshops on the above themes as well as proposals for pitches (‘Soapbox’) on relevant topics for the symposium.

More information on the submission and selection procedure is available here.