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The Centre for Private International Law (CPIL) of the University of Aberdeen is announcing its 2nd Postgraduate Law Conference of the Centre for Private International Law, which will take place online on 6 May 2024. Researchers are invited to submit abstracts by 29 February.

The Conference aims to provide young scholars with the opportunity to present their research before panels with relevant expertise and receive valuable feedback for further development of their work.

It has four panels, respectively on international family law, civil and commercial law, artificial intelligence and human rights linked to private international law.

For more information, please see the Centre’s website.

The post below was written by Pedro De Miguel Asensio, who is Professor of Private International Law at the Complutense University of Madrid. This is the third contribution to the EAPIL’s online symposium on Inkreal, after the posts of Sergi Gimenez and Gilles Cuniberti.

The main contribution of the Inkreal judgment is to establish that Article 25 of the Brussels I bis Regulation allows the parties to a contract, even if they are domiciled in the same Member State and all the elements of the contract are located in that State, to confer jurisdiction to settle the disputes arising from the contract on the courts of another Member State. In fact, this case has provided the Court of Justice with the opportunity to address a question which had been referred to it previously, but which it was unable to rule on at the time because the request for a preliminary ruling was withdrawn by the Portuguese Supremo Tribunal de Justiça and the case removed from the register (EU:C:2017:237).

In particular, among the questions already referred to the Court of Justice in case C-136/16, Sociedade Metropolitana de Desenvolvimento, in connection with the practice relating to the conclusion contracts under the terms of the ISDA Master Agreement, was whether, in a dispute between two national companies of a Member State concerning swap contracts, the existence therein of clauses conferring jurisdiction in favour of another Member State constitutes a sufficient international element to give rise to the application of the Brussels I bis Regulation. Now, the Inkreal judgment in the framework of case C-566/22 answers a similar question in the affirmative and clarifies that the mere agreement of the parties to a contract designating the courts of a Member State other than that of their common domicile as having jurisdiction is sufficient for the legal situation to have an international element for the purposes of the jurisdiction rules of the Brussels I bis Regulation.

Although it is a criterion that could give rise to misgivings insofar as it could leave it to the parties to circumvent, within the limited framework of Article 25 of the Brussels I bis Regulation, the jurisdiction of the courts of the only Member State with which the contract is connected (as the Advocate General emphasised in his Opinion in Inkreal, EU:C:2023:768) and may sometimes cause serious inconvenience to one of the parties (as raised in the second of the questions referred for a preliminary ruling in case C-136/16), the approach adopted by the Court seems the better view. Its position reinforces: (a) consistency between the Brussels I bis Regulation and other Union instruments on judicial cooperation in civil matters (see I, infra); (b) the objectives of predictability and legal certainty in the application of the Brussels I bis Regulation (II, infra); and (c) the particular significance of the Union’s private international law instruments as an element of integration (III, infra).

I. Consistency between the Brussels I bis Regulation and Other Union Instruments on Judicial Cooperation in Civil Matters

The judgment confirms previous case law according to which the application of the rules of jurisdiction of the Brussels I bis Regulation is in any case subject to the existence of an international element, which corresponds to the fact that it is an instrument relating to judicial cooperation in civil matters having cross-border implications, in the terms of Article 81(1) TFEU. However, the judgment not only confirms that for such international element to be present it is sufficient that the situation raises “questions relating to the determination of the jurisdiction of the courts in the international sphere” (para. 22 referring to the IRnova judgmen, EU:C:2022:648), but also adds as a novelty the clarification that such a circumstance is present whenever the parties to a contract are established in a Member State other than the court seised on the basis of the relevant jurisdiction agreement, insofar as in such situations the question arises of determining the courts of which of those Member States has international jurisdiction to hear the dispute in question (paras. 23-25).

In order to reach that conclusion, the judgment attributes a particular relevance to the definition of “cross-border cases” in Article 3(1) of Regulation (EC) No 1896/2006 creating a European order for payment procedure, which provides that “a cross-border case is one in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court seised”. Apart from the relevance given in the judgment to the coordination between the Brussels I bis Regulation and Regulation (EC) No 1896/2006, the approach taken by the Court of Justice also seems to be supported by the content of Regulation (EC 593/2008 on the law applicable to contractual obligations (Rome I Regulation).

Recital 15 to the Rome I Regulation states:

Where a choice of law is made and all other elements relevant to the situation are located in a country other than the country whose law has been chosen, the choice of law should not prejudice the application of provisions of the law of that country which cannot be derogated from by agreement. This rule should apply whether or not the choice of law was accompanied by a choice of court or tribunal.

Consequently, Recital 15 and Article 3(3) of the Rome I Regulation seem to be based on the assumption that the parties to a contract may choose a court of a Member State as having jurisdiction, even if all the relevant elements of the situation prior to their choice of forum (and law) are located in another Member State (regarding the interpretation of Article 3.3 Rome I Regulation in the context of insolvency proceedings, see CJEU Judgment of 8 June 2017, Vynils, C-54/16, EU:C:2017:433, concerning an apparently domestic Italian contract that conteined “a clause stating that English law is the chosen law and a clause choosing the jurisdiction of the London Maritime Arbitrators Association”, para. 20).

In so far as the judgment in Inkreal holds that the rules of jurisdiction in the Brussels I bis Regulation apply only where there is an element of internationality, for which it is sufficient that a purely domestic contract designates a court of another Member State as having jurisdiction, since such a situation “raises a question relating to the determination of international jurisdiction” (para. 24), it is also consistent with the approach underlying the Rome I Regulation. A sort of parallel may be drawn mutatis mutandis between that category and that of a situation “involving a conflict of laws” as regards the field of applicable law. Also, under the Rome I Regulation, in the different context of the applicable law, it is necessary to determine in which situations a foreign element is present, since the rules of the Rome I Regulation only apply “in situations involving a conflict of laws” (as stated in Article 1(1) and recently examined by the Court of Justice in its judgment of 14 September 2023, Diamond Resorts Europe and Others, C‑632/21, EU:C:2023:671, para. 51).

II. Objectives of Predictability and Legal Certainty in the Application of the Brussels I bis Regulation

The judgment highlights that making the application of Article 25 of the Brussels I bis Regulation subject to a finding that the contract has additional links (beyond the agreement conferring jurisdiction) with the Member State of the chosen court would undermine the objective of legal certainty and predictability. It would make it difficult for the designated court before which the action is brought to determine its jurisdiction and increase the risk of parallel proceedings and irreconcilable judgments (paras. 27 to 31).

Although the lis pendens rules of the Brussels I bis Regulation would significantly reduce the risk of parallel proceedings, there is no doubt that the requirement to identify additional elements capable of demonstrating the cross-border impact of the dispute would constitute a significant factor of uncertainty. Illustrative in that respect was the list of potential international elements in addition to the jurisdiction agreement contained in the third of the questions referred for a preliminary ruling in case C-136/16 in relation to the swap contracts at issue. Such elements included the fact that foreign companies were invited to submit proposals to participate in the contracts, that one of the parties is owned by a foreign entity, that under the terms of the contract the parties may transfer their rights and obligations to subsidiaries in other countries, that the contracts at issue had certain connections to contracts concluded with foreign entities, etc.

Moreover, hypothetically, it should be noted that if it had been decided that Article 25 of the Brussels I bis Regulation requires additional factors of internationality to be applied, a particularly broad interpretation in the context of the Union would have been justified. The outcome in practice might not be very different from that resulting from the new judgment.

For example, why would the following not be sufficient connections. First, the mere fact that for one of the parties the contract in question has connections to a different international contract which are relevant to that party. Second, the fact that one of the contracting parties belongs to a group of companies with connections to the Member State in which the designated court is located (for instance, this seemed to be the situation -perhaps with some additional elements- in the notorious El Majdoub judgment, concerning a contract between parties domiciled in Germany with a jurisdiction clause in favour of a court in Leuven (Belgium), see paras 10, 13 and 16 of CJEU Judgment of 21 May 2015, El Majdoub, C‑322/14, EU:C:2015:334).

III. Significance of EU Private International Law rules as an Instrument of Integration 

The broad scope of Article 25 Brussels I bis Regulation is also justified by the Court of Justice as reflecting mutual trust in the administration of justice within the Union and contributing to the development of an area of freedom, security and justice (para. 35). Indeed, the development of civil judicial cooperation within the Union, based on the principle of mutual recognition of judgments, has led to the creation of a judicial area, many elements of which are closer to the treatment of purely internal situations than to strictly international ones. This is reflected, for example, in the contrast between the treatment of situations in which lis pendens arises between Member States of the Union and those concerning parallel litigation in a Member State and a third State.

The criterion adopted in Inkreal is a further step in this direction of overcoming state borders, which is projected onto areas where party autonomy prevails and the choice of the courts of a Member State without any apparent connection with the dispute will typically respond to the legitimate interests of the parties. In practice, moreover, the choice of a court of that other Member State will normally go hand in hand with the choice of its law as the law applicable to the contract. As regards the position of the Member State in which all other elements of the contract are located, Article 3(3) of the Rome I Regulation will be relevant. According to that provision, the choice of law (and court) by the parties does not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement. Consequently, the mandatory rules applicable to the contract will be those of the Member State where all the other elements relevant to the contract are located and not those of the Member State whose courts adjudicate the case and whose law has been chosen by the parties (without prejudice, of course, to the effectiveness of the mandatory rules under Article 9 of the Rome I Regulation).

Given the specificity of the Union’s integration framework, and the particular scope of judicial cooperation in civil matters, the Court is justified in expressly rejecting that the provisions of the 2005 Hague Convention on Choice of Court Agreements should constitute a point of reference in the interpretation of Article 25 of the Brussels I bis Regulation. Pursuant to Article 1(1) of the Convention, its jurisdiction rules only apply either if the parties are not resident in the same State, or if some element relevant to the dispute other than the location of the chosen court has a connection with some other State (see “Explanatory Report” by T. Hartley and M. Dogauchi, paras. 41-43).

Hence, the broad interpretation of Article 25 of the Brussels I a Regulation and its application to purely domestic contracts does not apply to jurisdiction agreements designating the courts of a third State, even if it is a State with which the Union and its Member States are bound by the 2005 Hague Convention on Choice of Court Agreements. Nor does it apply directly in situations where the effectiveness of jurisdiction agreements in favour of a third State is governed by the domestic law of the Member State seised.

Concluding remarks

Unlike in case C-136/16, Sociedade Metropolitana de Desenvolvimento, the Court was not requested in Inkreal to clarify if the application of such a jurisdiction agreement may be waived where the choice of the courts of a Member State other than that of the nationality of the parties causes serious inconvenience for one of those parties and the other party has no good reason to justify such choice. However, the reasoning by the Court seems to support the view that within the specific framework of the Brussels I bis Regulation (and its interplay with the Rome I Regulation) such a concern is of limited significance. This is without prejudice that the possible review of the regulatory framework in order to provide certain protection to small or medium-sized enterprises in a position of contractual imbalance against choice of forum agreements unilaterally imposed on them, is an issue that merits special attention. In any event, such protection would be especially necessary with regard to jurisdiction agreements in favour of the courts of a third State, which in principle fall outside the scope of the Brussels I Regulation.

— This post is based on the post published in Spanish by the author on 8 February 2024, and a short case comment to be published in the journal La Ley Unión Europea.

This is the second contribution to the EAPIL Online Symposium on Inkreal. The first contribution was written by Sergi Gimenez.

As reported earlier on this blog, the CJEU ruled in Inkreal s.r.o. v. Dúha reality s.r.o. (Case C‑566/22) that Article 25 of the Brussels I bis Regulation applies to clauses stipulated in domestic contracts if such clauses provide for the jurisdiction of the court of another Member State.

The CJEU held that domestic contracts providing for the jurisdiction of the court of another Member State have, for that reason alone, an international element which suffices to trigger the application of the Brussels I bis Regulation in general and Article 25 in particular. The clause is thus validated and effective.

Geert van Calster is delighted about this excellent judgment, that Pedro de Miguel Asensio and Matthias Weller also welcome. I disagree.

International Element Required?

The judgment recalls that an international element is required to trigger the application of the Brussels I bis Regulation. The Brussels I bis Regulation was adopted on the basis of Article 81 of the Treaty on the Functioning of the European Union, which gives competence “in civil matters having cross-border implications”. As a result, the court ruled in Owusu that there should be an international element to trigger the application of the Regulation.

The CJEU finds that an international element exists in this case for two reasons. The first is that the proceedings were initiated in a another Member State. The second is the jurisdiction clause itself, which designates a foreign court.

Both of these elements are purely subjective, insofar as they are the result of the will of the parties. Party autonomy suffices to create the international element. And, indeed, the will of a single party, the plaintiff, seems to suffice, as the initiation of the proceedings in another State is deemed sufficient. In this respect, the court relies on the definition of cross border litigation in the European Order of Payment Regulation which refers to the initiation of the proceedings in another Member State. But in the context of the Brussels I Bis Regulation, what really matters is party autonomy and the provision of a jurisdiction clause. In the absence of such a clause, the application of the objective rules of jurisdiction will always grant jurisdiction to the only Member State connected with the dispute, irrespective of where the proceedings were initiated. In contrast, enforcing jurisdiction clauses could be a real game changer.

Adopting subjective criteria such as the inclusion of a jurisdiction clause suggests that, although it cannot rule that the Regulation applies to domestic disputes, the court is ready to interpret the cross border implications test as broadly as possible, so that it can, in effect, extend the reach of the Regulation to domestic disputes.

So what will come next? What will be the other subjective criteria justifying the application of the Regulation and Article 25? Will it be enough for the parties to provide “this is an international contract” in the preamble of their contract? And what about remote objective criteria? For instance, what about the foreign grand parent of one of the local parties to the contract?

The End of the National Rules governing Jurisdiction Clauses?

Many member States have national rules limiting the enforceability of jurisdiction clauses in domestic disputes. In France, for instance, such clauses are only enforceable among certain categories of professional parties (‘commercial people’), and they need to be stipulated in “very apparent characters”.

After Inkreal, it will be possible to bypass those rules by providing, in domestic contracts, the jurisdiction of a Belgian or Luxembourg court. What is the legitimacy of the EU to disapply those rules? One could debate whether party autonomy should be promoted and local parties should always be allowed to choose their preferred court. But certain Member States have made the policy decision that choosing the competent court can have far reaching consequences, and party autonomy should only be allowed between sophisticated actors where it can be established that the parties made an informed choice. What is the legitimacy of the CJEU to cancel this policy decision?

Of course, one could think that national rules will remain applicable and prevent the same parties from including a similar clause providing for another city within the same Member State. But will they? Maybe not, if the parties insisted in their contract that they strongly feel that it is, or want it to be, an international contract.

Coherence with Hague Convention irrelevant

Interestingly, the 2005 Hague Convention on Choice of Court Agreements provides that it only applies to international cases, which are defined objectively:

Art. 1 (2) For the purposes of Chapter II, a case is international unless the parties are resident in the same Contracting State and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that State.

The Court, however, rules that the same definition is not found in the Brussels I bis Regulation, and that there is no reason to seek a coherent interpretation. Instead, as already mentioned, the court prefers to seek coherence with the European Order for Payment Regulation, because it relates to judicial cooperation in civil matters. But is it really convincing, given that this regulation does not include any rule validating party autonomy?

Irrespective of these poor contextual arguments, the result is disastrous. For parties and lawyers providing for jurisdiction clauses (and choice of law clauses) in international contracts, it is critical to avoid developing different legal regimes and to interpret the relevant instruments (Brussels I bis, Rome I, 2005 Hague Convention) coherently whenever it is possible. Most practitioners have a hard time understanding some of the most basic concepts of private international law. They do not need these extra subtleties.

An invitation to participate in the Summer School on Consumer and Market Law in the European Circular Economy has been opened for all interested candidates.

The following topics are particularly addressed: Consumer protection and empowerment; Private international law; Dispute resolution and redress issues; and Market regulation. The goals of the summer school are:
• To offer a blended and intensive training, focusing on transnational developments at the EU level;
• To promote the sharing of knowledge, experiences and practices between participants from different countries;
• To help participants in developing incisive reasoning skills and other soft skills such as team working, problem solving and argumentative reasoning.

The school is taking place in a picturesque Italian setting at the premises of the University of Udine from 11 to 19 July 2024. Additional details are available at the Call for applications and the School Brochure.

This summer school has a long tradition since 2008 and is organised by University of Udine, along with its partners: University of Essex, University of East Anglia, De Montfort University of Leicester, University of Belgrade, University of Rijeka, University of Szeged, University of West Timisoara.

Author: Martina Ticic, assistant at the University of Rijeka, Faculty of Law and doctoral student funded by the Croatian Science Foundation (Hrvatska zaklada za znanost – HRZZ)

On 13 December 2023, two years after the first legislative proposal has been published, the new Regulation (EU) 2023/2844 of the European
Parliament and of the Council of 13 December 2023 on the digitalisation of judicial cooperation and access to justice in cross-border civil, commercial and criminal matters, and amending certain acts in the field of judicial cooperation (Digitalisation Regulation) has been adopted. While the process of digitalisation of judicial cooperation and cross-border procedures in the EU has been ongoing for some time already, the new Digitalisation Regulation represents a major step for advancing digitalisation practices in the EU.

Main features
The Digitalisation Regulation establishes a uniform legal framework for the use of electronic communication and digital tools in cross-border legal proceedings. Particularly, it lays down rules on:
– communication between competent authorities/natural or legal persons and competent authorities
– the use of videoconferencing or other distance communication technology
– the application of electronic signatures and electronic seals
-the legal effects of electronic documents
– electronic payment of fees.
The Regulation establishes that communication between competent authorities of different EU Member States, as well as communication between competent authorities of different Member States and between a national competent authority and EU body or agency, shall be carried out through a decentralised IT system whenever possible. On the other hand, for communication between natural or legal persons and competent authorities in civil and commercial matters, a European electronic access point shall be established on the European e-Justice Portal. The Regulation also provides for the possibility of participating in a hearing through videoconference or other distance communication technology, depending on certain circumstances, e.g., the availability of such technology, parties’ opinion on the use of such technology, or appropriateness of the use of technology. Moreover, the Regulation makes a reference to the eIDAS Regulation in terms of electronic signatures and electronic seals, equates the legal effects of electronic documents with effects of non-electronic ones, and provides for the possibility of electronic payment of fees. Finally, it also amends relevant provisions of other legal instruments, including European Enforcement Order Regulation, European Order for Payment Regulation, European Small Claims Procedure Regulation, European Account Preservation Order Regulation, Regulation on mutual recognition of protection measures in civil matters, Insolvency Regulation, Service of Documents Regulation, and Regulation on the mutual recognition of freezing orders and confiscation orders.

Entry into force
The entire legal framework set by the Regulation, however, will not be fully operational until quite some time. The Regulation will apply from 1 May 2025 – with some exceptions. The Regulation requires the adoption of certain implementing acts by the European Commission, which would mainly set out various technical specifications and requirements. Article 10(3) of the Regulation sets out a timetable for the adoption of different implementing acts, ranging from January 2026 to January 2029.
Articles 3 and 4 of the Digitalisation Regulation, which regulate electronic communication (both between competent authorities and between natural or legal persons and competent authorities in civil and commercial matters) will only apply after two-year period has passed from entry into force of the corresponding implementing acts. These Articles will also only apply to proceedings initiated from that same day. It could be concluded that the Regulation will not be applicable in its entirety for the next seven years, until 2031. However, this only holds true in relation to the provisions on electronic communication. The other regulated aspects, i.e., the provisions on the use of videoconferencing, electronic signatures and seals, legal effects of electronic documents and electronic payment of fees, will all be applicable from May 2025.

Remaining challenges
While certainly a big step forward for the e-Justice developments in the EU, some challenges still remain even after the Digitalisation Regulation becomes fully applicable. Perhaps the biggest issue is fragmentation – both at the EU level and at the national level.
At the EU level, fragmentation is reflected in a complex EU framework and a number of different regulatory sources on different aspects of digitalisation of justice. There are multiple legal acts that address various aspects relevant for the process of digitalisation in the EU, including eIDAS Regulation, e-CODEX Regulation, Directive on Digitalisation of Judicial Cooperation, General Data Protection Regulation, Regulation on processing of data by EU institutions, etc. Moreover, a number of regulations offer specific provisions on digitalisation aspects in a particular procedure, such as European Order for Payment Procedure Regulation, Service Regulation, Evidence Regulation, etc. It is therefore expected that the new Digitalisation Regulation will add to already existing legal framework as an ‘umbrella regulation’, given that it covers a wide range of issues in various steps of legal proceedings in civil, commercial and criminal matters. It should, however, be noted that it will not apply to two crucial procedural aspects of the intra-EU cross-border relations: the service of documents pursuant to the Service Regulation (despite introducing certain amendments to it) nor to the taking of evidence pursuant to the Evidence Regulation, as highlighted in the Recital 17 of the Preamble.
At the national level, while COVID-19 pandemic certainly urged all of the EU Member States to accelerate the usage of digital tools in all aspects of society, there are still varying levels of digital developments in different jurisdictions. This can clearly be seen from the EU Justice Scoreboard, which includes a specific section on digitalisation developments in the Member States. It must be highlighted, however, that a significant improvement over the years is visible when comparing the yearly reports. With the new Digitalisation Regulation, in addition to all the other work that the EU is currently doing to promote digitalisation, the digital tools and digitalisation practices of the Member States will surely only be getting more advanced.
This having been said, diversity of national procedural rules, different e-justice domestic solutions and different levels of the development and usage of digital tools in the proceedings all may still pose problems. It can be expected that the period of the next few years will be especially difficult, as EU Member States will have a lot of work to do – national access points to the e-CODEX will have to be established; harmonised technical standards adopted; and all participants will have to get accustomed to the functionalities of new digital tools and practices. The Digitalisation Regulation partly touches upon this problem by providing that EU Member States must also offer necessary training to competent authorities and professionals concerned in order to ensure efficient use of the IT system and distance communication technology.
In order to ensure that adequate information on national particularities is available for all potential parties, the EU Member States are bound to communicate relevant information to the European Commission, including details of national IT portals, description of national laws and procedure on videoconferencing, information on fees, details on electronic payment methods, etc. Such information will be made available on the e-Justice Portal. On the assumption that the relevant information is regularly updated, the e-Justice Portal will be of great help with the smooth functioning of digital legal framework set by the Digitalisation Regulation.
Thus, while challenging period may be ahead, the result will surely be worthwhile.

What about the parties outside of the EU?
While the Digitalisation Regulation definitely brings important changes to the justice system of the EU and its Member States, potential implications for parties and countries outside of the EU should not be overlooked. Member States are now obliged to work on their national IT portals and digital tools, to train legal staff, and to generally provide for the usage of digital tools in the course of the procedure. Such national developments may then also assist in all cross-border cases, including those with countries outside of the EU. This means that the obligations that the Digitalisation Regulation sets for the Member States can also indirectly allow for better usage of IT tools in the course of cross-border procedures with all of the other countries that make use of such tools as well. On the other hand, for those countries that still lack in the department of digitalisation in law and legal system, this may serve as an incentive for further development in order to make cross-border procedure easier for all. After all, promotion of best practices and cooperation with international partners is one of the EU’s aims, as highlighted in the 2020 Communication from the Commission on the Digitalisation of Justice in the EU.

 

On 11 and 12 April 2024, an international conference on the current topic of the appropriate approach to digital assets in PIL cases will take place at the University of Vienna in a hybrid format. For the impressive speakers list, including internationally renowned academics as well as representatives from UNIDROIT and the HCCH, please refer to the conference announcement below, which was kindly provided by the organizers:

Digital Assets and Private International Law Conference 11 and 12 April 2024 in Vienna

 

Outline

Digital assets, such as cryptocurrencies, stablecoins and other tokens, have become important as objects of investment and trade. They are recorded on the blockchain, an electronic ledger held in identical form on servers (nodes) all over the world. Therefore, the determination of the governing law presents particular challenges. This conference will explore whether Private International Law methodology can be successfully applied to digital assets or whether it needs to be changed in light of the ‘blockchain revolution’.

Date      11 and 12 April 2024

Place     Juridicum, Schottenbastei 10-16, A-1010 Vienna, roof top floor

Format

The conference will take place in a hybrid format. Speakers and participants will meet in the Juridicum. The proceedings will be streamed simultaneously online. Registration (both for physical attendance and online participation) can be made until 6 April 2024 by email at the following address: service.rechtsvergleichung@univie.ac.at. Participation is free but registration compulsory.

 

Programme

 Thursday, 11 April 2024

Time Topic Speaker 13.00 Registration and Coffee 14.00 Inauguration Prof. Brigitta Zöchling-Jud,

Dean of the Law School of the University of Vienna 14.10 Welcome Address Dr. Thomas Gstädtner, President of Supervisory Board, EBI 14.15 Introduction Prof. Matthias Lehmann,
University of Vienna and Radboud University of Nijmegen  

Part 1 – Overarching Issues 14.30 Do We Need a ‘Blockchain Revolution’ in Private International Law? Prof. Andrea Bonomi, University of Lausanne 14.45 Proprietary Rights in Digital and Other Assets and the Conflict of Laws Prof. Christiane Wendehorst, University of Vienna 15.00 The Law Applicable to Payments, Tokenisation and Contracting on Cross-border Digital Platforms Prof. Dr. Gérardine Goh Escolar, Hague Conference on Private International Law 15.15 Which Role for Consumer Law in Blockchain Transactions? Prof. Teresa Rodriguez de las Herras Ballell, UNIDROIT/University Carlos III Madrid 15.30 Discussion 16.00 Coffee Break  

Part 2 – Law Applicable to Digital Assets 16.30 Money or Securities as the Paradigm for Digital Assets? Dr. Burku Yüksel, University of Aberdeen 16.45 A Single Law for the Blockchain vs.  Layer-, Protocol- or Asset-Specific Law Dr. Augustin Gridel, University of Lorraine 17.00 Choice of Law for Digital Assets –Technical Possibilities and Legal Conditions Prof. Florian Heindler, Sigmund Freud University Vienna 17.15 Discussion 17.45 Summary and Conclusion of the First Day Prof. Matthias Lehmann, University of Vienna and Radboud University of Nijmegen 19.00 Speakers’ Dinner

  

Friday, 12 April 2024

Time Topic Speaker 08.30 Coffee Part 3 – Law Governing Blockchain Transactions 09.00 The Determination of the Law of Custody and Its Importance for Digital Assets Prof. Matthias Haentjens, University of Leiden 09.15 Secured Transactions in Digital Assets Prof. Spiridon Bazinas, Sigmund Freud University Vienna (online) 09.30 The Law Applicable to Staking Dr. Fabio Andreotti, Bitcoin Suisse AG 09.45 Decentralized Finance (DeFi) –  Which Law is Governing the Entities, which the Transactions? Dr. Pascal Favrod-Coune, Aegis Partners 10.00 Discussion 10.30 Coffee Break Part 4 – Law Governing Particular Issues 11.00 The Law Governing Private Relations and Liability on the Network Prof. Tobias Lutzi, University of Augsburg 11.15 The Law Governing Trade Finance Tokens Prof. Koji Takahashi, Doshisha University (online) 11.30 Determining the Law Governing Smart Contracts Dr. Jasper Verstappen, University of Groningen 11.45 Discussion

  12.15 Summary and Conclusion Prof. Matthias Lehmann, University of Vienna and Radboud University of Nijmegen

 

About the Interdisciplinary Association of Comparative and Private International Law (IACPIL)

IACPIL is a platform for discussing issues in comparative law and private international law. The association is based in Vienna, where it organises events on current topics, fundamental issues, and methodological questions. Its members reflect a broad professional base rooted in the academic, judicial, and administrative fields, and are also joined by translators and specialists from international organisations.

The association is a critically scrutinising forum. Interdisciplinary topics with legal, political, historical, social, economic, and cultural dimensions are frequently considered. In this way, IACPIL endeavours to promote a modern, humane, and social regulation of cross-border conflicts.

 

About the European Banking Institute (EBI)

The EBI is an international centre based in Frankfurt for banking studies resulting from the joint venture of Europe’s preeminent academic institutions which have decided to share and coordinate their commitments and structure their research activities in order to provide the highest quality legal, economic and accounting studies in the field of banking regulation, banking supervision and banking resolution in Europe.

EBI aims to become a point of reference in the research of banking regulation research in Europe. By promoting the dialogue between scholars, regulators, supervisors, industry representatives and advisors in relation to issues concerning the regulation and supervision of financial institutions and financial markets from a legal, economic and any other related viewpoint, the close relationship with regulators, supervisors, and private sector is expected to guarantee a one-of-its-kind academic research production.

This is the first contribution to the EAPIL’s Online Symposium on Inkreal. It is authored by Sergi Gimenez, who is an Associate Lecturer of Private International Law at the Universitat Pompeu Fabra in Barcelona and a partner in the law firm Augusta Abogados.

In its judgment of 8 February 2024 in Inkreal (Case C-566/22), the Court of Justice of the European Union (“CJEU”) has concluded that there is no impediment for parties to a contract established in the same EU Member State (e.g. Spain) to agree on the jurisdiction of the courts of another Member State (e.g. Germany) to settle their contractual disputes, even if the contract in question has no other connection with the designated Member State. The doctrine established by the CJEU, perhaps questionable in some respects, opens up interesting prospects for companies to choose the dispute resolution mechanism that suits them best, even in purely domestic contractual relations.

Background

Between June 2016 and March 2017, an individual (“FD”) residing in Slovakia lent money to the Slovak company Dúha reality s.r.o. (“Dúha”). The two loan agreements signed between the parties contained a clause whereby the parties agreed that any disputes arising from the loans would be settled “by a court of the Czech Republic having substantive and territorial jurisdiction”.

In early December 2021 FD transferred the claims under the loan agreements in favour of Inkreal s.r.o. (“Inkreal”), a company also incorporated under Slovak law and established in Slovakia.

Since Dúha did not repay the loans, Inkreal sued Dúha before the Supreme Civil and Criminal Court of the Czech Republic at the end of the same month of December, as foreseen in the above mentioned clause.

Doubts then arose as to the possible invalidity of the above-mentioned attribution agreement. Since the dispute concerned a contract governed by Slovak law and was between two Slovak companies, with no connection to the Czech Republic, the Court questioned its possible lack of international jurisdiction. In view of the doubts that arose, the Czech Supreme Court turned to the CJEU for clarification.

The Question

The Czech Supreme Court’s doubts arose from the fact that neither the loan agreements nor the disputing parties have any connection with the Czech Republic. However, the case-law of the CJEU has consistently required that there be an “international element” in the disputes in order for the Brussels I bis Regulation to apply. Thus, the referring court wondered whether the mere will of the parties, by including a clause submitting to the courts of another State, was sufficient to confer an international character on their contractual relationship. If that is not the case, the situation would be purely internal and the EU regulation would not be applicable. In such a case, the possible jurisdiction or lack of jurisdiction of the Czech courts would have to be examined in the light of the internal rules of the Czech Republic itself.

Judgment

In addition to hearing the arguments submitted by the parties involved and analysing the Opinion of the Advocate General (who expressed a view contrary to that reflected in the judgment), the CJEU also took into account the observations submitted by the European Commission and some States that wished to participate. The CJEU concluded that a jurisdiction agreement by which the parties to a contract established in the same Member State agree that the courts of another Member State shall have jurisdiction to hear disputes arising out of that contract falls within the scope of Article 25(1) of the Brussels I bis Regulation even if that contract has no connection with that other Member State.

Reasoning of the CJEU

The CJEU reaches the above conclusion using reasoning that is questionable in some cases but imbued with an undoubtedly practical sense. Although the CJEU insists on its settled case law to the effect that the application of the jurisdiction rules of the Brussels I bis Regulation requires the existence of an “international element”, the truth is that the final decision greatly relativises this requirement.

According to the CJEU, the dispute between Inkreal and Dúha falls within the definition of the concept of a “cross-border case” since the parties are established in a Member State other than that to which the Czech court seised on the basis of the agreement conferring jurisdiction in question belongs (para 23). The CJEU adds that the fact that the main dispute raises a question concerning the determination of international jurisdiction (that of the Czech Supreme Court) reinforces the idea of the existence of a cross-border element (Recital 24).

Paragraph 25 of the judgment contains the key to the CJEU’s decision in determining that

the existence of an agreement conferring jurisdiction on the courts of a Member State other than that in which the parties are established in itself demonstrates the cross-border implications of the dispute in the main proceedings.

In this way, the CJEU opens the way for the parties to a contract to decide, solely by their own free will, to “internationalise” a situation that from any other point of view would be considered purely internal.

To justify its view, the CJEU relies on eminently practical reasons: maintaining that the clause on submission to foreign courts is covered by the Brussels I bis  Regulation allows the plaintiff and the defendant to easily determine the court before which they can sue and be sued, and it also allows the court seised to easily rule on its own jurisdiction. According to the CJEU, the alternative of the court having jurisdiction being determined in accordance with the national rules of private international law of the Member States concerned would lead to greater legal uncertainty, since the application of different national rules could lead to divergent solutions.

Commentary and Possible Implications

Until now, in contractual matters, individuals could “internationalise” a domestic situation with regard to the law applicable to their contract. Indeed, Article 3(1) of Regulation (EC) No 593/2008 (Rome I ) gives a wide freedom of choice of the law applicable to contracts by stating that “the contract shall be governed by the law chosen by the parties“. Thus, in principle, even the parties to a purely domestic contract can choose a foreign law. Notwithstanding this freedom of choice of law, Article 3(3) of the same Rome I Regulation provides for a corrective mechanism to prevent possible abuses or excessively opportunistic choices: if all the relevant elements of the contract (e.g. the place of establishment of the parties, the place of performance of the services or delivery of the goods, etc.) are located in a country other than the country whose law is chosen, the mandatory rules of the first country will continue to apply. Thus, in purely domestic contracts the foreign law chosen by the parties will only apply in those respects in which the law to which the contract is objectively linked does not contain mandatory rules. Article 3(4) of the Rome I Regulation provides for an identical limitation for purely intra-EU cases: if all the elements of the situation are located in two or more EU Member States and the parties choose the law of a third State, such a choice does not prejudice the application of mandatory rules of Community law.

The restrictions provided for in the Rome I Regulation on the law applicable to the contract are not transferable to forum selection clauses. In fact, in its decision, the CJEU has not imposed any kind of limitation on the choice of the courts of another Member State (beyond the restrictions on exclusive and protective forums or those relating to public policy provided for in Article 45). Thus, two or more companies located in the same Member State and concluding a purely internal contract can now decide that any disputes between them will be settled by the courts of a different Member State. And it should be remembered that, by submitting a case to the courts of another Member State, the latter acquire exclusive jurisdiction to hear the case, unless the parties have agreed otherwise.

Until now, in order to transfer a purely domestic dispute to another State, the parties had the mechanism of arbitration at their disposal, agreeing that the seat of the arbitration tribunal would be in another country. With the new doctrine set by the CJEU, the parties may also opt for the ordinary courts of another EU Member State if they consider it appropriate, whether for reasons of speed, efficiency, cost, specialisation or any other reason. Obviously, before making a decision, other aspects must be taken into account, including possible adverse elements such as language difficulties, the added complexity involved in making notifications or taking evidence abroad or even the problems arising from the need to prove to the foreign judge the content of the substantive rules chosen by the parties if these rules are not those of the designated judge.

As the 118th American Society of International Law (ASIL) Annual Meeting approaches, the ASIL Private International Law Interest Group will organize a fireside chat on Thursday, April 4 from 3:30 PM to 4:30 PM ET in Washington D.C.

During this fireside chat, our esteemed speakers will discuss recent developments in private international law in the US and beyond. Professor Ronald A. Brand will analyze the developments at the Hague Working Group, which is currently pursuing a convention on parallel proceedings and related actions or claims. Ms. Sarah Prosser will provide an overview of recent developments in the private international law efforts of the U.S. Department of State in 2023, with insights into initiatives planned for 2024. Professor Carlos M. Vázquez will focus on developments in the United States, including such recent decisions as Mallory v. Norfolk Southern Railway Co, Cassirer v. TBM, and the Mexican Gun Litigation. The fireside chat will adopt a relaxed format, ensuring a casual and enjoyable experience for both speakers and the audience.

Speakers (alphabetized by surname):

Ronald A. Brand
Chancellor Mark A. Nordenberg University Professor
Academic Director, Center for International Legal Education
University of Pittsburgh School of Law

Sarah Prosser
Assistant Legal Adviser for
Private International Law (L/PIL)
Office of the Legal Adviser
U.S. Department of State

Carlos M. Vázquez
Associate Dean for Graduate and International Programs
Scott K. Ginsburg Professor of Law
Georgetown University Law Center

Chair: Dr. Jie (Jeanne) Huang, Co-Chair of the ASIL Private International Law Interest Group and Associate Professor at the University of Sydney Law School

Time: Thursday, April 4 at 3:30 PM – 4:30 PM ET
Venue: TBD at the Washington Hilton

• Happy Hour
We invite Private International Law Interest Group members, newsletter editors, and friends to join us for a casual happy hour gathering at McClellan’s Sports Bar located at the Washington Hilton. Please find event details below:

4:30 PM- 5:30 PM ET, Thursday April 4, 2024
Social & Networking Event
McClellan’s Sports Bar
No Host Bar
We look forward to learning any PIL (and non-PIL) inspirations from you for the more exciting years to come. Everyone is welcome to stop by.

On 8 February 2024, the CJEU ruled in Inkreal s.r.o. v. Dúha reality s.r.o. (Case C‑566/22) that Article 25 of the Brussels I bis Regulation applies to clauses stipulated in domestic contracts if such clauses provide for the jurisdiction of the court of another Member State.

Most early commentators have welcomed this judgment, including Geert van Calster, Pedro de Miguel Asensio and Matthias Weller.

The Advocate General, however, had opined differently. Should Inkreal be praised for promoting party autonomy? Should it be criticised, instead, for extending the reach of EU law beyond its competence?

In the coming days, the EAPIL Blog will host an online symposium on Inkreal. Readers interested in participating should contact the editors of the blog (blog@eapil.org), or directly comment on the posts in the symposium.

The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 29 February 2024 at 14:30 (Mexico City time – CST), 21:30 (CET time). The topic of the webinar is the role of Private International Law in the development and deployment of digital currencies and will be presented by Dr. Israel Cedillo Lazcano (in Spanish).

The details of the webinar are:

Link: https://us02web.zoom.us/j/83223220677?pwd=ejcyTysxbUFwLzRIMFhYRGkzV2VpQT09

Meeting ID: 832 2322 0677

Password: AMEDIP

Participation is free of charge.

This event will also be streamed live: https://www.facebook.com/AmedipMX

Emiliou AG opined the day before yesterday in C‑339/22 BSH Hausgeräte GmbH v Electrolux AB. I flagged the case and discussed its context here.

The case in essence concerns two issues: the extent of the exclusive jurisdiction of the Article 24(4) court in infringement (as opposed to direct invalidity actions); and the question whether A24 works reflexively: ie whether the surrender of jurisdiction should also be applied in cases where the A24(4) court is not in an EU Member State.

The AG’s extensive contextualisation has the merit of summarising established authority on Article 24(4). This allows the AG for instance to reflect on the oddity of GAT v Luk. Despite the ‘object of the proceedings’ often being infringement of intellectual property rights, the CJEU held in that case that the moment the validity of the patent (or other relevant intellectual property rights) is at issue, exclusive jurisdiction of the A24(4) court is triggered. The CJEU rather unsuccessfully attempted to justify the distinction with its approach on the remainder of A24 eg in CJEU BVG.

The AG justifiably signals his disapproval with the fall-out of the GAT v Luk authority, seeing ia that (54)

the judgment in GAT makes the consolidation of infringement claims concerning the different ‘parts’ of a European patent before those courts an unattractive option. It encourages patent holders to start separate proceedings in the various States of registration of those ‘parts’ instead, since, at least, it is certain that the courts of those States are competent to rule on both the infringement and validity of ‘their part’ (as explained in points 26, 28 and 29 above). This creates, in turn, a risk that different courts take contradictory views on the same infringement dispute.

Also note (59) the strong rebuke of the GAT v LUK line in terms of the very nature of private international law

…such considerations do not reveal why, with respect to proceedings concerned with the registration or validity of patents, those courts should have jurisdiction to the exclusion of all others. In particular, the patent law of the State of registration is not so unique that only the courts of that State would have the ability to comprehend it. While it may be harder for them to do so, the courts of another Member State are perfectly capable of applying such a foreign law. To imply the contrary would be tantamount to questioning the very foundations of the Brussels regime (and the entire field of private international law). …

Ia (64) the AG however points out that unfortunately any call for the CJEU to reverse is futile seeing as Brussels Ia has codified it.

The extent of the exclusive jurisdiction of the Article 24(4) court in infringement proceedings.

Ia (37) the remaining unclarity therefore lies in the GAT v Luk consequences. National practice varies. Some courts practice a stay of the infringement proceedings until the A24(4) court holds on validity, and then insist on a return to the ‘infringement’ court: the “narrow reading” of GAT v LUK. Others carry out a complete referral of the case, including infringement, to the A24(4) court: the “broad” reading”.

In both of these scenarios the stay or referral decision is precarious (73) for there is no procedure under EU law for such referral or mutually respected temporary stay: there is no guarantee the court referred to will act as the first seized court might prefer.

The AG is in favour of the narrow reading: (69) this fits with the exceptional nature of A24; (71) it serves predictability (an echo of A24(2) in BVG): in the broad reading the reach of the jurisdiction of the court seized would depend on the invalidity  raised or not raised as a defence; (73) the possibility under national civil procedure rules to raise an invalidity defence even for the first time upon appeal would lead to a constant threat of torpedoing and once the proceedings stayed, the court first seized loses all grip on the claim and (74) by the time the case returns at all, claimant’s case in infringement proceedings started afresh may meet with statutes of limitation.

(77) ff bifurcation or as the AG calls it the ‘split’ in the proceedings is far from ideal, as (78) is the general implication of GAT v LUK that it forms an exception to the principle that points of defence ought not to impact on jurisdiction, or the reliance on national CPR, the delays etc. Yet the AG calls this route even if ‘less than ideal’, the ‘lesser of two evils’.

He then offers practical guidelines, seeking to give these a foundation in (88) the TRIPS Agreement, the finding in CJEU C‑365/88 Hagen that national CPR must not impact the effet utile of EU law, the TRIPS Agreement, Directive 2004/48, on the patent holder side the right to an effective remedy and, on the alleged infringer’s side, the rights of defence, both protected under Article 47 of the Charter.

(92) the AG suggests in particular that courts should only consider granting a stay where that challenge has a genuine prospect of success (taking into account the presumption of validity following the patent office’s assessment).

In general I have much sympathy for the AG’s narrow reading of GAT v LUK (and one would have hoped the review of Brussels Ia might trigger a proposal to solidify it in the Regulation). I am also genuinely curious to see how far the CJEU will go in picking up some of the guidelines.

The reflexivity issue.

The CJEU 3 judge chamber in IRNova f FLIR was very brief on this question and answered it promptly in the negative. The AG (97) agrees the answer is obvious in the sense that BIa cannot instruct third States courts to hear specific cases.

Unlike the AG however in my view the answer to the question that ‘in essence’ (98) is implied (whether A24(4) deprives Member State courts of the power to adjudicate the validity of third-State patents in the same way that those courts are deprived with respect to patents registered in other Member States) is, rebus sic stantibus, also obvious. Namely that unless the conditions of Articles 33-34 (the forum non conveniens “light” regime) are fulfilled, Article 4 domicile jurisdiction simply stands. Or as the Commission puts it (113), the Courts are “bound” to exercise A4 jurisdiction save in a narrow set of circumstances (i.e. the A33-34 set).

The AG (108) refers to IRNova to suggest A24-25 BIa cannot apply, as such, to dispute having connections of the kind envisioned therein with third States.

The AG posits ia that (117) BIa was not designed to take into account circumstances such as these and that the CJEU therefore should fill the gap. First of all I believe this is incorrect. A4 BIa arguably is a well documented express policy choice to accept EU courts jurisdiction in principle even over matters prima facie strongly linked with territory etc out off the EU. Further, that only A33-34 (and then only in the recital of the Regulation) entertain the possibility to take into account exclusive non-EU courts jurisdiction is a very strong a contrario statutory argument against CJEU freewheeling. The suggestion (118) borrowed from Briggs and Mills that “nothing in the wording of those provisions or in the related recitals indicates that they are meant to regulate exhaustively the possibility for Member State courts to decline jurisdiction in favour of the courts of third States”, echoes Ferrexpo and  imho is simply wrong, and neither Coreck Maritime (121) nor Mahamdia (122) have displaced Owusu.

The AG’s link (128) to public international law and the general appeal of the Moçambique rule are interesting but really just to remote in my view from Brussels Ia’s travaux and statutory provisions and the AG does not I believe properly present A33-34’s travaux or intention (139) ff.

The “implicit derogation from the mandatory effect of Article 4(1)” BIa which the AG posits (147) ff for both A24 and A25 (choice of court) jurisdiction, even construed as a “narrow discretion” (159) ff, is a most optimistic view on inviting the CJEU to rewrite Brussels Ia.

In conclusion, while the CJEU is likely to follow the AG on the narrow reading of A24(4), I would wager it will succinctly reject the arguably contra legem reflexive effect construction. But then as I have said before, I am not a betting man.

Geert.

EU Private International Law, 4th ed. 2024, 2.217 ff.

1/2 ! Emiliou AG on 'reflexive effect' of exclusive jurisdictional rule (EU courts declining jurisdiction where third States would have had exclusive jurisdiction, had they been in the EU)https://t.co/naD1t51NQb
C‑339/22 BSH Hausgeräte

— Geert Van Calster (@GAVClaw) February 22, 2024

We are happy to share the following announcement from the organisers.

On 12 April 2024, a hybrid conference will take place at the Skylounge of the University of Vienna to discuss the reform of the Brussels Ibis Regulation; the fundamental reference-instrument of cross-border judicial cooperation in civil matters within the European Union. The reform is expected to begin this year under the new European Commission. The conference is organised by the Institute for Civil Procedure and continues the work already done within the European Association for Private International Law (EAPIL) and the former Max Planck Institute (MPI) Luxembourg.

In 2021, Burkhard Hess wrote a Working Paper on a possible reform of the Brussels Ibis Regulation, identifying problems and suggesting solutions. In the same year, a Working Group was set up within the network of the EAPIL. The members of the Working Group provided information on the application and possible shortcomings of the Brussels Ibis Regulation in their jurisdictions by means of a questionnaire. The results of the questionnaire provided the basis for the conference on the Brussels Ibis reform held at the former MPI Luxembourg on 9 September 2022, where more than 80 participants discussed reform proposals in five panels (report).

Following the 2022 Luxembourg conference, Burkhard Hess and a team of researchers of the MPI prepared a second Working Paper, which put forward 32 proposals for the reforms of the Brussels Ibis Regulation. Members of the EAPIL Working Group were invited to express again their opinion and to vote on these proposals in an online poll. The poll was later opened to the public, as announced on the EAPIL-blog and ConflictofLaws.net. The purpose of this poll was to give the academic public as well as other stakeholders an opportunity to express their view on the proposals. An extensive documentation and analysis of the poll will be published soon, which serves as a basis for discussion at the upcoming conference.

The 2024 Vienna conference features speakers from various parts of the European Union. In the morning, the prospects of the reform process and overarching issues of the Brussels Ibis Regulation are addressed by Andreas Stein (EU Commission), Astrid Stadler (Konstanz), Cristina González Beilfuss (Barcelona), Gilles Cuniberti (Luxembourg), as well as Karol Weitz and Bartosz Wo?odkiewicz (Warsaw). The various proposals for the reform of the Brussels Ibis Regulation will be addressed from a practical perspective in the afternoon during a roundtable featuring, inter alia, Anthony Collins (EU Court of Justice), Georg Kodek (Austrian Supreme Court), Petra Leupold (VKI), Sabine Leupold (Freshfields Bruckhaus Deringer) and Andreas Stein (EU Commission). The full program can be found on the flyer.

Burkhard Hess, Christian Koller and Paul Oberhammer of the Institute of Civil Procedure look forward to your participation in the Vienna conference. Please send your registration to reformingbrussels-Ibis.zvr@univie.ac.at and indicate whether you will participate in person or online.

The question which law applies to the blockchain and assets recorded thereon, such as cryptocurrencies, stablecoins or other token, is one of the most hotly debated issues in the conflict of laws (see e.g. the recent book ‘Blockchain and Private International Law‘).

A conference on this topic will take place on 11 and 12 April 2024 in Vienna and remotely. It is organised by the University of Vienna, in cooperation with the Interdisciplinary Association of Comparative and Private International Law (IACPIL) and the European Banking Institute (EBI).

The conference will bring together academics, technology experts, and lawyers, from various EU member states, the UK, Switzerland, and Japan. Two of the international organisations active in this field – the HCCH and UNIDROIT – will also be represented.

Topics include the law governing crypto-custody, secured transactions in digital assets, and the law applicable to Decentralized Finance (DeFi). Fundamental issues such as the need for a ‘blockchain revolution’ in Private International Law or the role of consumer law will also be discussed.

The full programme can be downloaded here. Participation is free of charge. Please register for either physical attendance or online participation by 6 April 2024 at service.rechtsvergleichung@univie.ac.at.

I. Introduction

It is widely recognized that choice of court and choice of law agreements are powerful tools for structuring and planning international dispute resolution. These agreements play an important role in “increasing legal certainty for the parties in cross-border transactions and reducing incentives for (the harmful version of) forum shopping.” (Alex Mills, Party Autonomy in Private International Law (CUP, 2018) p. 75). However, the realization of these objectives depends on the enforcement of the parties’ choice. Unfortunately, general practice in the MENA (North Africa and the Middle East) region shows that, with a few exceptions, the status quo is far from satisfactory. Choice-of-court agreements conferring jurisdiction on foreign courts are often disregarded or declared null and void. Similarly, the foreign law chosen as the governing law of a contract is often not applied because of the procedural status of foreign law as a matter of fact, the content of which must be ascertained by the party invoking its application. The recent judgment of the High Court of Bahrain (a first instance court in the Bahraini judicial system) in the Case No. 2/13276/2023/02 of 17 January 2024 is nothing but another example of this entrenched practice that can be observed in the vast majority of countries in the region.

 

II. Facts

X (plaintiff, an English company) entered into a pharmaceutical distribution and sales agreement with Y1 (defendant, a Bahraini company), in 2017 in Bahrain. The agreement provided that disputes arising out of or in connection with the agreement would be subject to the exclusive jurisdiction of the courts of England and Wales. The parties also agreed that English law should be the governing law.

Following Y1’s failure to make due payments as agreed, X initiated legal proceedings against Y1, Y2 and Y3 (both Bahraini nationals and partners in Y1) in the High Court of Bahrain, seeking payment and some other related costs under Bahraini law. The defendants challenged the jurisdiction of the Bahraini court based on the forum selection clause, but did not present any claim as to the merits of the case.

 

III. The Ruling

The High Court ruled as follow to affirm its jurisdiction and the application of Bahraini law:

[Regarding international jurisdiction]

“[The defendants] challenge the jurisdiction of the Bahraini courts to hear the dispute on the basis that the contract contains a jurisdiction clause which confers exclusive jurisdiction on the English courts to hear any dispute arising out of or relating to the contract. However, according to Articles 14 and 15 of the Code of Civil Procedure, the Bahraini courts have jurisdiction over actions brought against Bahraini nationals, regardless of the nature of the dispute, as long as they have Bahraini nationality at the time the action is brought, without any further conditions, except for in rem actions relating to immovable property located outside Bahrain. Thus, the jurisdiction of the Bahraini courts is based on personal nexus, i.e. the nationality of the defendant, and any agreement to deviate from this jurisdiction is inadmissible because of its connection with public policy. This is because it is the State that determines the jurisdiction of its courts in order to serve the public interest, i.e. to ensure justice, which is one of its primary functions, and to maintain order and peace within its territory. (Underline added).

[Since Y1 is a Bahraini limited liability company and Y2 and Y3, who are partners in Y1, are Bahraini nationals,] it is not permissible to waive the jurisdiction of the Bahraini courts, which retain jurisdiction over the [present] dispute.

[Regarding the applicable law]

It is clear from the contract that the parties agreed that any disputes arising out of the contract should be governed by the laws of England and Wales. Pursuant to Article 4 of Law No. 6 of 2015 on Conflict of Laws in Civil and Commercial Matters with Foreign Elements, the parties may choose the applicable law. [However], Article 6(a) of the same law requires the parties to the dispute to submit the text of the applicable law, failing which Bahraini law shall be deemed applicable. [In the present case], neither party has submitted the agreed law governing the dispute, and X, which [as the foreign party] , requested the application of Bahraini law and relied on the provisions of the Bahraini Commercial Companies Law in its statement of claim. Since the court is not required to ask the parties [to provide the content] the applicable law, as this obligation rests with the parties themselves, Bahraini law shall be applied to the [present] dispute”.

 

IV. Comments:

1. Sources of Law

It should be indicated from the outset that in Bahrain, rules governing international jurisdiction are primarily found in the Code of Civil and Commercial Procedure of 1971  (hereafter referred to as “CCCP,” articles 14-20). Regarding choice of law rules, those concerning family law and successions (i.e., personal status) are included in the CCCP (articles 21 and 22), while those concerning civil and commercial matters, including rules pertaining to general theory, are laid down in a special Law on Conflict of Laws in Civil and Commercial Matters with Foreign Elements (Law No. 6 of 2015).(*)

(*) One may wonder about the reasons behind keeping the choice of law rules in matters of family law and successions within a law dealing with civil and commercial procedure, especially since the Bahraini legislator codified the conflict of law rules in an autonomous act dealing with conflicts of laws (choice of law). There have been some calls to consolidate all private international law rules (including choice of law, international jurisdiction) in a single act dealing with legal relationships involving foreign elements (see eg., Awadallah Shaiba Al-Hamad Al-Sayed, “An Analytical and Critical Study of the Law No. 6 of 2015 on the Conflict of Laws in Civil and Commercial Matters – Kingdom of Bahrain”, Legal Studies, Vol. 2, 2019, pp. 224 ff (in Arabic)), however, no actions have been taken so far to implement this proposal.

 

2. International Jurisdiction

Interestingly, the rules of international jurisdiction contained in the CCCP deal mainly with actions brought against non-Bahraini nationals, either on the basis of their domicile/residence in Bahrain (general jurisdiction, Article 14 of the CCCP) or in certain other matters depending on the category of dispute (special jurisdiction, Article 15 of the CCCP). The fact that the rules on international jurisdiction refer only to foreign defendants raised the question of whether Bahraini courts could assume jurisdiction based on the nationality of the defendant (Cf. Hosam Osama Shaaban, Treatises on Bahraini Private International Law (Al-Bayan Media, 2016), p. 277 [in Arabic]).

In a number of cases, the Supreme Court has ruled in the affirmative. For example, in a decision issued in 2014, the Bahraini Supreme Court held that “even if the Bahraini legislator did not establish the rules of international jurisdiction of the Bahraini courts in the CCCP with regard to lawsuits filed against Bahraini nationals, it is understood that the jurisdiction of the national courts over [such lawsuits] stems from the consideration of [judicial jurisdiction] as a manifestation of the sovereignty of the State, which extends to what falls under this sovereignty” (Supreme Court, Appeal No. 531/2013 of 15 April 2014). In another case, the Supreme Court confirmed its ruling by considering that “persons holding Bahraini nationality are subject to the jurisdiction of Bahraini courts as a manifestation of the state’s sovereignty over its citizens”, thus recognizing the jurisdiction of Bahraini courts over Bahraini nationals even if they hold a second nationality and are not resident in Bahrain (Supreme Court, Appeal No. 77/2017 of 11 April 2018).

In this regard, it can be said that the High Court’s decision commented here is fully consistent with the well-established case law of the Supreme Court.

 

3. Choice of Court Agreements

With respect to the admissibility of choice of court agreements, it should be noted that agreements with prorogative effect, i.e., choice of court agreements that confer jurisdiction on Bahraini courts that are not otherwise competent, are generally admitted (see article 17 of the CCCP [dealing with explicit or tacit submission to the jurisdiction of Bahraini courts]; article 19 of Legislative Decree No. 30 for the year 2009 with respect to the Bahrain Chamber for Economic, Financial and Investment Dispute Resolution (BCDR) [on the jurisdiction of the BCDR based on the agreement of the parties]. See also, eg, Supreme Court, Appeals Nos. 154 and 165/2017 of 20 May 2017 [tacit submission to the jurisdiction of Bahraini courts]).

However, with respect to agreements with derogative effect, although the law is silent on the matter, the Supreme Court has ruled against their admissibility. This is particularly the case of the Supreme Court ruling in a decision rendered in 2006 (Supreme Court, Appeal No. 231/2005 of 27 February 2006). The case concerned a lawsuit filed by a former foreign employee against his Bahraini employer, claiming overdue employment rights. The employer relied on a choice of forum clause in favor of the English court, arguing that Bahrain’s rules on international jurisdiction (articles 14 and 15 of the CCCP) apply only in the absence of a written agreement between the parties when one of them is a foreigner, and that rules on international jurisdiction do not concern public policy; therefore, nothing should prevent the parties from displacing the jurisdiction of Bahraini courts in favor of a foreign court. The Supreme Court disagreed. However, instead of framing its decision in the particular context of the employment relationship, where the employee – as the weaker party – deserves special protection, the Court proclaimed the principle that any agreement by which the parties derogate from the jurisdiction Bahraini courts conferred under Bahraini law “shall be deemed null and void and shall not be invoked” to challenge the jurisdiction of courts in Bahraini (Supreme Court, Appeal No. 231/2005 of 27 February 2006).

The High Court’s decision commented here is consistent with this ruling. In fact, the underlying part of the first paragraph of the High Court’s decision quoted above is almost a verbatim copy from the Supreme Court’s decision of 27 February 2007 mentioned above.

Finally, it should be indicated that the position of the Bahraini courts on this issue is broadly similar to that of other countries in the region, as noted in the Introduction. (For a brief overview of some relevant Supreme Court decisions from various MENA Arab countries and the implications of this position for the enforcement of foreign judgments in the region, see Béligh Elbalti, “Perspective of Arab Countries,” in M. Weller et al. (eds.), The 2019 HCCH Judgments Convention – Cornerstones, Prospects, Outlook (Hart, 2023), p. 188.)

 

4. Party Autonomy – Principle

The principle of party autonomy is enshrined in Article 4 of Law No. 6 of 2015, which states that the “[p]arties may agree to choose the applicable law […]”. Bahraini courts have recognized the principle of freedom of parties to choose the applicable law (eg, Supreme Court, Appeal No. 641/2011 of 27 May 2011). The courts did so even in the absence of legislative guidance prior to the adoption of the current applicable rules (see eg, Supreme Court Appeal No. 143/1994 of 4 December 1994). The High Court in the present case did not deviate from this “well-established” principle, which is rooted in both Bahraini statutes and case law. (For a detailed study based on Bahraini case law, see Béligh Elbalti & Hosam Osama Shabaan, “Bahrain – Bahraini Perspectives on the Hague Principles”, in D. Girsberger et al. (eds.), Choice of Law in International Commercial Contracts – Global Perspective on the Hague Principles (OUP, 2021), pp. 414 ff).

 

5. Party Autonomy – Practice

In practice, however, as demonstrated by the High Court decision, there is a gap between the affirmation of the principle of party autonomy on the one hand and the actual application of the chosen law to a concrete case on the other. This gap arises from the fact that, under Bahraini  law as regularly confirmed by case law,  foreign law is treated as a fact, the content of which must be determined by the party requesting its application (see eg, Article 6 of Law No. 6 of 2015. For further details and examples, see Elbalti & Shaaban, op cit., at 420-421). Consequently, failure to ascertain the content of the foreign law would normally result in the application of Bahraini law. The same principle applies even in cases where the parties have made a choice of law agreement. For example, in the aforementioned Supreme Court decision in the Appeal No. 143/1994 of December 4, 1994, although the Court recognized that the parties had (implicitly) agreed on Pakistani law as the applicable law, it ultimately excluded the application of the chosen law because its content had not been established. (For further details and examples, see Elbalti & Shaaban, op cit.). The High Court did not deviate from this general approach showing by this some degree of consistency in the Bahraini courts’ practice.

 

6. Epilogue

In the case commented here, the court justified the application of Bahraini law on the grounds that the content of the law chosen by the parties had not been submitted to the court. To some extent, it may be questioned whether such a justification is acceptable, as it could be argued that there was a tacit agreement to apply Bahraini law instead of the chosen law (on the issue of tacit choice of law under Bahraini law and the relevant Supreme Court cases, see Elbalti & Shaaban, op cit., pp. 423-425). However, as evidenced by the facts of the case, the defendants in this case did not present any arguments on the merits, but merely challenged the jurisdiction of the Bahraini court. The mere fact that the plaintiff based its claim on Bahraini law by relying on the relevant provisions of the Bahraini Commercial Companies Law does not in itself constitute an “implied” agreement to apply Bahraini law.

On this particular point, it is interesting to compare the decision of the High Court discussed here with another decision issued by the same court just thirteen days earlier in a case involving similar legal issues, namely the admissibility of a choice of court agreement in favor of the Cayman Islands courts and the application of Cayman Islands law as the law chosen by the parties (High Court, Case No. 5/11341/2023/02 of 4 January 2024). In this case, the High Court ruled in exactly the same way as in the present case with regard to the admissibility of the choice of court agreement. However, with respect to the application of Cayman Islands law, the court held that there was an implied agreement to apply Bahraini law in lieu of the chosen law because both parties based their claim on the provisions of Bahraini law and relied on relevant Supreme Court decisions.

On February 21, 2024, the U.S. Supreme Court handed down its decision in Great Lakes Insurance SE v. Raiders Retreat Realty Company, LLC.

The question presented was whether, under federal admiralty law, a choice-of-law clause in a maritime contract can be rendered unenforceable if enforcement is contrary to the “strong public policy” of the U.S. state whose law is displaced. In a unanimous opinion authored by Justice Kavanaugh, the Court concluded that the answer to this question was no. It held that choice-of-law provisions in maritime contracts are presumptively enforceable as a matter of federal maritime law. It further held that while there are narrow exceptions to this rule, state public policy is not one of them.

Facts

Great Lakes Insurance SE (GLI) is a corporation organized under the laws of the Germany that is headquartered in the United Kingdom. Raiders Retreat Realty Co., LLC (Raiders) is a company organized under the laws of Pennsylvania. GLI insured a yacht owned by Raiders. The marine insurance contract signed by the parties contained the following choice-of-law clause:

It is hereby agreed that any dispute arising hereunder shall be adjudicated according to well established, entrenched principles and precedents of substantive United States Federal Admiralty law and practice but where no such well-established, entrenched precedent exists, this insuring agreement is subject to the substantive laws of the State of New York.

After the yacht ran aground in Florida and sustained significant damage, Raiders filed a claim. GLI denied the claim on the ground that the yacht’s fire-extinguishing equipment had not been recertified or inspected. Although the damage to the yacht was not caused by fire, GLI took the position that Raiders had misrepresented the vessel’s fire suppression system’s operating ability, thereby making the policy void from inception.

After denying the claim, GLI filed an action for a declaratory judgment in the U.S. District Court for the Eastern District of Pennsylvania. It asked the court to hold that the policy was void due to the alleged misrepresentations by Raiders with respect to the fire extinguishers. In response, Raiders asserted five counterclaims against GLI: (1) breach of contract, (2) breach of implied covenant of good faith and fair dealing, (3) breach of fiduciary duty, (4) bad faith liability under 42 Pa. Const. Stat. §8371, and (5) violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.

GLI moved for judgment on the pleadings with respect to the fourth and fifth counterclaims. It argued that these claims were not viable because the policy’s choice-of-law provision had designated New York as the governing law in the absence of applicable federal maritime law. Because the claims were based on Pennsylvania statutes, it argued, they were barred by the choice-of-law clause. Raiders opposed this motion. It argued that the choice-of-law clause was unenforceable because it was contrary to Pennsylvania’s strong public policy of punishing insurers who deny coverage in bad faith.

The trial court ruled in favor of GLI. The Third Circuit ruled in favor of Raiders. The Supreme Court granted GLI’s cert petition and heard oral arguments on October 10, 2023.

Decision

The Court held that the issue of whether a choice-of-law clause in a maritime contract is enforceable is governed by federal law. In support of this conclusion, the Court noted that it had previously held that the enforceability of forum selection clauses in these contracts is governed by federal law. It would be strange, the Court reasoned, to adopt a different rule with respect to choice-of-law clauses. The Court further held that choice-of-law clauses in maritime contracts were “presumptively enforceable.” Again, this conclusion logically followed from the fact that the Court had previously held that forum selection clauses in maritime contracts are “prima facie valid.”

After discussing why the Court’s decision in Wilburn Boat Company v. Fireman’s Fund Insurance Company (1955) did not dictate a different outcome, the Court turned its attention to the question of when a choice-of-law clause in a maritime contract should not be enforced. It held that courts should disregard these clauses in situations where applying the chosen law would “contravene a controlling federal statute” or “conflict with an established federal maritime policy.” It also held that these clauses should not be given effect when there was no “reasonable basis” for selecting the law of the chosen jurisdiction. However, the Court expressly rejected the argument advanced by Raiders that a choice-of-law clause in a maritime contract was unenforceable if applying the law of the chosen state would be contrary to a fundamental policy of a state with a greater interest in the dispute.

In rejecting this argument, the Court explained that a federal presumption of enforceability “would not be much of a presumption if it could be routinely swept aside based on 50 States’ public policy determinations.” It reasoned that the “ensuing disuniformity and uncertainty caused by such an approach would undermine the fundamental purpose of choice-of-law clauses in maritime contracts: uniform and stable rules for maritime actors.” The Court also noted that nothing in its previous decisions relating to the enforceability of forum selection clauses in maritime contracts suggested that state public policy was relevant to whether these clauses should be given effect.

Finally, the Court declined to adopt the argument—advanced by me and Kim Roosevelt in an amicus brief prepared with the assistance of the North Carolina School of Law Supreme Court Program—that it should resolve the question of enforceability by looking to Section 187(2) of the Restatement (Second) of Conflict of Laws. The Court reasoned that the rule laid down in Section 187 “arose out of interstate cases and does not deal directly with federal-state conflicts, including those that arise in federal enclaves like maritime law.” The Court also pointed out that Section 187 was a “poor fit” for maritime cases in part because it would “prevent maritime actors from prospectively identifying the law to govern future disputes.”

Analysis

I had two great fears going into this case. Thankfully, neither was realized.

First, I was concerned that the Court might take the test it had previously articulated for determining whether a forum selection clause should be given effect as a matter of federal maritime law and apply that test to choice-of-law clauses. This is, in essence, what the Third Circuit did in its decision below. Such an approach would, in my view, have generated a great deal of mischief. Although choice-of-law clauses and forum selection clauses are often invoked in the same breath, they are not the same and the courts should utilize different tests to evaluate whether they should be enforced. I was relieved that the Court chose not to go down this path. The test laid down in Great Lakes for determining whether a choice-of-law clause in a maritime contract is enforceable is distinct and different from the test for determining whether a forum selection clause laid down in The Bremen and Carnival Cruise.

Second, I was concerned that the Court’s test for enforcing choice-of-law clauses might be couched in such broad language that it would eventually supplant Section 187 in non-maritime cases. This is essentially what happened when the Court decided The Bremen in 1972. Although that decision only applied to forum selection clauses in maritime contracts, the sweeping language utilized by the Court ultimately brought about a significant change in practice in non-maritime cases. The language in Great Lakes, by comparison, is much more carefully drawn. Throughout the opinion, Justice Kavanaugh consistently frames the issue as whether a choice-of-law clause is enforceable in a maritime contract rather than in a more general sense. The rationales articulated by the Court for declining to adopt the rule laid down in Section 187 are similarly encouraging. The Court stated that Section 187 was not the right rule because it “arose out of interstate cases and does not deal directly with federal-state conflicts.” This language suggests that Section 187 should provide the relevant rule of decision in cases relating to the enforceability of choice-of-law clauses when the conflict of laws is between two states—or between a state and foreign country—rather than between state and federal law.

[This post is cross-posted at Transnational Litigation Blog]

This post was written by Prof. Dr. Bea Verschraegen, Verena Wodniansky-Wildenfeld and Laurenz Faber.

On 28 November 2023, the Interdisciplinary Association of Comparative and Private International Law (IACPIL) held a conference on the legal protection of vulnerable adults in Central and Eastern Europe.

Against the backdrop of demographic and scientific developments impacting this field of the law, the event was attended with great interest by internationally renowned academics and practitioners.

The conference, held in the historic premises of the University of Vienna, commenced with a welcome address by Professor Matthias Lehmann (University of Vienna, Raboud Universiteit Nijmegen). Professor Bea Verschraegen (University of Vienna) then led through the first half of the event, which focused on a comparative analysis of vulnerable adults’ protection in Central and Eastern Europe.

Professor Masha Antokolskaia (Vrije Universiteit Amsterdam) presented first results of a comparative examination by FL-EUR (Family Law in Europe: Academic Network), a research platform consisting of experts from 31 jurisdictions. Professor Antokolskaia explained that FL-EUR conducted a detailed assessment of the protection of vulnerable adults in European countries with the aim of promoting cooperation “in books and in action”. Pointing to the adoption of the UN Convention on the Rights of Persons with Disabilities (UN CRPD), she outlined the need for substantial reform in the overwhelming majority of European countries. Professor Antokolskaia explained that the status of these reforms was assessed based on extensive country reports received from 31 jurisdictions. Providing an insight into the work of FL-EUR, she highlighted the methodological difficulties that arise in the comparative examination of vulnerable adult protection, inter alia due to the lack of a historic ius commune in this area.
While the project is still in progress, FL-EUR was already able to identify trends among the European countries: while some have undergone major reforms either before or after the adoption of the UN CRPD, many have only passed “patchwork” reforms or no sufficient reforms at all. Professor Antokolskaia underlined these differences by examining specific examples of vulnerable adult protection, such as the transition towards “support before representation”. In the bigger picture, the presentation observes that many Eastern European countries have not yet undergone the necessary “paradigm shift” but a minority are already far along or have completed this process.

After a spirited discussion on the implications of the comparative analysis presented by Professor Antokolskaia, the second part of the conference, led through by Professor Matthias Lehmann, was dedicated to cross-border issues.

Professor Bea Verschraegen examined current conflict of laws issues relating to the protection of vulnerable adults. She drew attention to the Hague Convention on the Protection of Adults, which focuses on adults who, because of an impairment or insufficiency of their personal faculties, are unable to protect their interests in cross-border situations.

Professor Verschraegen highlighted the increasing number of adults in need of protection and the variety of protective measures prescribed by the national law of their place of residence. These measures range from court-ordered protection to the assistance of pre-arranged third parties.
She expressed concern about the limited regional scope of the Hague Convention, as only 11 EU Member States are parties, and its complexity, which poses challenges to its effective application. In practice, it is not entirely clear what kind of ex ante and ex post measures are covered by the Convention. The same may apply to private mandates.

She pointed out that there is no EU instrument governing judicial cooperation in the field of adult protection. The proposed regulation aims to change this. In this context, Professor Verschraegen argued for a broader perspective beyond the dominant narrative of an ageing society, advocating the inclusion of all adults from the age of eighteen. Citing alarming statistics predicting a significant increase in new cancer cases by 2040, she stressed the urgency of implementing comprehensive policies that address both age-related diseases such as dementia and the unforeseen challenges faced by young adults.

The ongoing debate about the possible reorientation of the Convention and the proposal in line with the UN Convention on Disability or its effectiveness in its own right was also the focus of the presentation. While acknowledging the complexities, Professor Verschraegen suggested that a robust articulation of private international law rules and human rights instruments might suffice, underlining the need for careful consideration.

The discussion went on to explore issues arising from the Convention on the Rights of Persons with Disabilities, including private autonomy, self-determination and dignity. Professor Verschraegen questioned the fact that both Conventions monitor fundamental rights from a bird’s eye view, without a feasibility test. In societies that define individuals as worthy members of society if they work and earn enough money, individuals tend to define themselves in this way. Employment is therefore the test of worth in society and for individuals. This may be one of the reasons why the ageing population and the vulnerable and disabled are seen as a burden. However, younger adults face enormous problems, they too may be unable to work, impaired and vulnerable.

She highlighted that private autonomy, self-determination, and dignity are driving principles used in many countries, more specifically in the context of living and dying wills. However, their qualification shows a wide variety. As the EU Proposal aims at guaranteeing EU-wide recognition, clarification of what exactly ought or ought not to be recognized would be most useful.

Professor Verschraegen’s presentation was followed by a lively discourse on the complexities of the protection of vulnerable adults in cross-border settings. The event was concluded with closing remarks by Professor Florian Heindler (Sigmund Freud University, Vienna).

Over the course of the conference, the consensus emerged that the legal protection of vulnerable adults, specifically in Central and Eastern Europe, remains a highly topical issue with meaningful developments to be expected both on a substantive and a conflict-of-laws level. In this context, new questions raised during the discussions may have already foreshadowed future publications and conferences.

 

The organisers of the 2024 edition of the INSOL Europe Academic Forum kindly shared with us the following call for papers. Please note the deadline for submission is 1 March 2024:

 

The INSOL Europe Academic Forum (IEAF) is inviting submission for its 20th annual conference, taking place from Wednesday 2 – Thursday 3 October 2024 in Sorrento (Italy). Expressions of interest are invited for the delivery of research papers within the overall theme of the academic conference: ‘The Evolution or Revolution of European Insolvency Law’.

The conference is intended to focus on, inter alia, the following overall topics:

• Asset tracing (including crypto assets)
• Cross-border issues (recognition, coordination)
• Public and social policy and the impact on corporate rescue, and vice versa
• Sustainability and corporate restructuring
• Environmental claims in insolvency
• Transaction avoidance
• Pre-packs
• Modern issues surrounding directors’ duties to file for insolvency
• The impact and benefit (or not) of creditors’ committees
• EU Preventive Restructuring Directive implementation progress and challenges
• EU Harmonising Insolvency Directive
• Competition for cases as a driving force for legislative reform
• International organisations update

The IEAF board also invites submissions on other topics that fall with in the scope of the overall theme of the conference.

 

Conference methodology

In line with the practice established in our past academic conferences, the intention for the Autumn conference is to have research papers that challenge existing approaches, stimulate debate and ask, and attempt to answer, comparative and interdisciplinary questions within the above broadly defined theme. Accordingly, proposals are invited that do more than just outline a topic of interest in respect of any given jurisdiction, but seek to understand, analyse and critique the fundamentals of insolvency and restructuring systems in ways that are relevant across jurisdictions and across fields of academic inquiry. Contributions must be in English.

 

Presenting at the IEAF conference

Expressions of interest in delivering a paper should be sent by email on or before 1 March 2024 to the IEAF’s Deputy Chair, Dr. Jennifer Gant.

Authors of papers selected for presentation will benefit from a waiver of the participation fee (one per paper) for the academic conference, however, they will be responsible for their own travel and accommodation costs. A limited number of travel grants are available for junior scholars invited to present.

 

For further information, see: www.insol-europe.org/academic-forum-events

 

 

 

Justin Borg-Barthet, Katarina Trimmings, Burcu Yüksel Ripley and Patricia Živković, from the University of Aberdeen, have accepted the invitation of the editors of the blog to present their co-edited book, titled ‘From Theory to Practice in Private International Law: Gedächtnisschrift for Professor Jonathan Fitchen’, published by Bloomsbury Publishing. The text below is cross-posted on Conflictoflaws.net.

When our colleague and friend Prof Jonathan Fitchen passed away on 22 January 2021, we were comforted in our grief by an outpouring of messages of condolence from private international lawyers around the world. We had known, of course, of the impact and importance of Jonathan’s work to the world of private international law scholarship. His monograph on authentic instruments, for example, will remain an essential reference on that subject for many years to come. Jonathan’s impact on the world of private international law scholars was, to a degree, less obvious. He was an unassuming man. He did not seek to command the attention of every gathering he attended, and he might have been surprised to realise how often he did just that. He was tremendously well-liked and well-respected for his wit, his self-deprecating sense of humour, and his empathy.

This book seeks to capture in it some of the immense esteem in which Jonathan was held. That much will of course be of interest to the many scholars and practitioners who had the privilege of Jonathan’s acquaintance. The intellectual generosity of the contributing authors will ensure, however, that this volume will also be of great value to those who encounter Jonathan for the first time in these pages. Taken together, the chapters in this book address the major conceptual and practical challenges of our time: from stubborn definitional dilemmas, such as the deployment of key terms in international child abduction cases, to contemporary concerns about disruptive technologies like cryptocurrencies, to core conceptual challenges regarding the unintended consequences of our discipline’s professed neutrality.

The collection is divided into three main parts. Following a preface in which Prof Xandra Kramer paints a vivid picture of Jonathan’s humanity, humour and wit, and an introduction by ourselves as the editors, Part I includes four chapters which address conceptual matters relating to the nature and scope of private international law. Part II is made up of seven chapters concerning civil and commercial matters in private international law. Part III includes two chapters on family matters in private international law.

Part I: The Evolving Nature and Scope of Private International Law

The first substantive chapter is a tour de force by Alex Mills in which he explores the unsettled relationship between private international law and legal pluralism. Mills observes that private international law is both a product and producer of pluralism, in addition to being internally pluralist in its self-conception. Mills’ analysis will be of great interest to readers seeking to discern private international law’s place in the taxonomy of the study of law, whether they are observing that taxonomy from the perspective of a comparatist, a conflicts scholar, or a public international lawyer.

The following chapter also engages with the problem of pluralism in private international law. Thalia Kruger focuses specifically on mediated settlements with a view to illuminating their meaning for the purposes of transnational law. Kruger does a wonderful job of building on Jonathan Fitchen’s work by providing technical and normative analysis of the public faith to be accorded to private agreements. Ultimately, she welcomes a movement towards the upholding of settlement agreements but cautions against potential abuse of vulnerable parties.

The problem of vulnerability is the central focus of the next chapter, by Lorna Gillies. Gillies provides robust, systematic analysis of the theory and practice of our discipline’s treatment of vulnerable parties. This is, of course, one of the central problems in a discipline whose professed neutrality is capable of furthering and entrenching inequalities. Gillies argues persuasively that the application of Fredman’s four pillars of asymmetrical substantive equality would equip private international law better to address inherent risks of vulnerability.

Asymmetries of private power remain the focus of discussion in the following chapter on the under-explored relationship between our discipline and feminist scholarship, authored by two of the editors. Justin Borg-Barthet and Katarina Trimmings set out to contribute to a nascent discussion about sex-based vulnerability and how this is (un)seen by much of the literature and law. It is argued, ultimately, that private international law requires more sustained engagement with feminist scholarship if it is to avoid acting as an instrument for the entrenchment of substantive inequalities.

Part II: Civil and Commercial Matters in Private International Law

Unsurprisingly, given the focus of much of Jonathan Fitchen’s written work, Part II on civil and commercial matters makes up around half of the volume. It begins with Andrew Dickinson’s meticulous analysis of the meaning of “damage” in EU private international law. Dickinson notes that, despite the central importance of the term to the operation of much of EU private international law, there is little clarity as to its meaning. His chapter sets out to remedy this shortcoming through the articulation of a hitherto undeveloped taxonomy of “damage” which promises to become an essential tool in the arsenal of students, teachers, practitioners, and adjudicators of private international law.

Another editor, Burcu Yüksel Ripley, authored the next chapter, which addresses cryptocurrencies. Our discipline’s continued preoccupation with definitional clarity remains very much in evidence in this discussion of challenges posed by disruptive technologies. Yüksel Ripley notes that attempts to characterise cryptocurrencies as a thing/property are unsatisfactory in principle, and that they therefore lead to conceptually unsound outcomes. She proposes instead that analogies with electronic fund transfers provide more promise for the determination of the applicable law.

In the next chapter, by Laura Carballo Piñeiro, the volume returns to another major theme of Jonathan Fitchen’s scholarly output, namely the effectiveness of collective redress mechanisms. Carballo Piñeiro observes that access to justice remains restricted in most jurisdictions, and that a common EU approach remains lacking. Although the courts have provided some routes to collective redress, Carballo Piñeiro argues that a robust legislative response is paramount if corporate accountability for environmental harm is to be realised in Europe.

Private international law’s ability to engage with concerns regarding environmental sustainability remains a key focus of analysis in Carmen Otero García-Castrillón’s chapter concerning the discipline’s place in international trade agreements. The chapter advocates the bridging of an artificial systemic separation between the private and the public in the international system. It is argued that the extent of private power in the international system merits attention in trade agreements if sustainable development goals are to be attained.

Giesela Rühl also addresses concerns regarding private international law’s ability to be deployed in matters which are traditionally reserved to public and public international law. Her chapter considers innovations introduced through the German Supply Chain Due Diligence Act (Lieferkettensorg-faltspflichtengesetz – LkSG) which establishes mandatory human rights due diligence obligations in German companies’ international supply chains. Rühl laments the lack of attention paid to private international law in German law. She makes an especially compelling case for any future EU interventions to recognise the need to engage with private international law if legislation is to be effective.

The uneasy public-private divide in transnational law remains in evidence in Patricia Živković’s chapter concerning what she describes as “creeping substantive review” in international arbitration. Živković decries a lack of conceptual clarity in courts’ treatment of arbitral determinations, particularly insofar as public policy is deployed as an instrument of substantive review of private adjudication. She argues that international legislative intervention is needed if prevailing inconsistencies of treatment are to be resolved.

Fittingly, Part II is rounded off with a discussion of that part of private international law to which Jonathan Fitchen made his most enduring scholarly contribution, namely authentic instruments. Zheng Tang and Xu Huang discuss authentic instruments in Chinese private international law. Like Jonathan’s work, this chapter provides readers of English language scholarship with a rare example of in-depth analysis of concepts which are unfamiliar in the Anglo-American tradition. The chapter’s compelling arguments for legal refinements will also be of use, however, to readers who wish to identify possible improvements to Chinese law.

Part III: Family Matters in Private International Law

The final part of the book turns to family law, an area in which Jonathan provided ample instruction to students, but which was not especially in evidence in his written work. In keeping with the previous parts of the book, our discipline’s need for definitional clarity and consistency are very much apparent in the chapters in this part, as is the somewhat existential concern regarding the proper delineation of the public and the private. As the authors in this part observe, each of these matters has far-reaching effects on the apportioning of rights and obligations in circumstances which are deeply meaningful to the lives of litigants.

Aude Fiorini’s chapter considers flawed reasoning in the US Court of Appeals judgment in Pope v Lunday. Fiorini illustrates the substantive flaws in the Court’s treatment of the habitual residence of neonates, but also highlights a broader concern regarding the potential for unconscious bias in judicial decision-making. Through the judgment in Pope, Fiorini raises alarms regarding inconsistent judicial treatment of similar situations which turn on appreciation of circumstances establishing the habitual residence of a child. She argues, particularly compellingly in our view, that the interests of justice require greater conceptual clarity and consistency.

In the final chapter, by Anatol Dutta, the interactions of the public and the private return to the fore. Taking his cue from Jonathan Fitchen’s work on authentic instruments, Dutta explores the concept of private divorce under the Brussels IIter Regulation. Concerns regarding decisional autonomy are very much in evidence in this chapter, which considers the meaning of private divorces and the extent to which they enjoy recognition in the EU private international law system. Ultimately, Dutta welcomes measures which restrict private divorce tourism in the EU.

Conclusions

This book was born of a collective wish to remember and honour a much-loved scholar of private international law. In that, we trust that it has already fulfilled its purpose. However, each chapter individually and the book taken as a whole also capture the state of the art of private international law. Ours remains a discipline in search of systemic normative clarity and in episodic need of technical refinement. This collection provides tantalising glimpses of possible answers to both the essential question of the treatment of the private in the attainment of public goods, and in relation to longstanding vexing technical questions.

To preserve and further Jonathan Fitchen’s legacy as an educator of private international lawyers, editorial royalties from the sale of the book will be donated to the Jonathan Fitchen Fund of the Development Trust at the University of Aberdeen. Direct individual donations to the fund are also welcome and appreciated.

Written by Justin Borg-Barthet, Katarina Trimmings, Burcu Yüksel Ripley and Patricia Živkovic

Note: This post is also available via the blog of the European Association of Private International Law.

When our colleague and friend Prof Jonathan Fitchen passed away on 22nd January 2021, we were comforted in our grief by an outpouring of messages of condolence from private international lawyers around the world. We had known, of course, of the impact and importance of Jonathan’s work to the world of private international law scholarship. His monograph on authentic instruments, for example, will remain an essential reference on that subject for many years to come. Jonathan’s impact on the world of private international law scholars was, to a degree, less obvious. He was an unassuming man. He did not seek to command the attention of every gathering he attended, and he might have been surprised to realise how often he did just that. He was tremendously well-liked and well-respected for his wit, his self-deprecating sense of humour, and his empathy.

This book seeks to capture in it some of the immense esteem in which Jonathan was held. That much will of course be of interest to the many scholars and practitioners who had the privilege of Jonathan’s acquaintance. The intellectual generosity of the contributing authors will ensure, however, that this volume will also be of great value to those who encounter Jonathan for the first time in these pages. Taken together, the chapters in this book address the major conceptual and practical challenges of our time: from stubborn definitional dilemmas, such as the deployment of key terms in international child abduction cases, to contemporary concerns about disruptive technologies like cryptocurrencies, to core conceptual challenges regarding the unintended consequences of our discipline’s professed neutrality.

The collection is divided into three main parts. Following a preface in which Prof Xandra Kramer paints a vivid picture of Jonathan’s humanity, humour and wit, and an introduction by ourselves as the editors, Part I includes four chapters which address conceptual matters relating to the nature and scope of private international law. Part II is made up of seven chapters concerning civil and commercial matters in private international law. Part III includes two chapters on family matters in private international law.

 

Part I: The Evolving Nature and Scope of Private International Law

The first substantive chapter is a tour de force by Alex Mills in which he explores the unsettled relationship between private international law and legal pluralism. Mills observes that private international law is both a product and producer of pluralism, in addition to being internally pluralist in its self-conception. Mills’ analysis will be of great interest to readers seeking to discern private international law’s place in the taxonomy of the study of law, whether they are observing that taxonomy from the perspective of a comparatist, a conflicts scholar, or a public international lawyer.

The following chapter also engages with the problem of pluralism in private international law. Thalia Kruger focuses specifically on mediated settlements with a view to illuminating their meaning for the purposes of transnational law. Kruger does a wonderful job of building on Jonathan Fitchen’s work by providing technical and normative analysis of the public faith to be accorded to private agreements. Ultimately, she welcomes a movement towards the upholding of settlement agreements but cautions against potential abuse of vulnerable parties.

The problem of vulnerability is the central focus of the next chapter, by Lorna Gillies. Gillies provides robust, systematic analysis of the theory and practice of our discipline’s treatment of vulnerable parties. This is, of course, one of the central problems in a discipline whose professed neutrality is capable of furthering and entrenching inequalities. Gillies argues persuasively that the application of Fredman’s four pillars of asymmetrical substantive equality would equip private international law better to address inherent risks of vulnerability.

Asymmetries of private power remain the focus of discussion in the following chapter on the under-explored relationship between our discipline and feminist scholarship, authored by two of the editors. Justin Borg-Barthet and Katarina Trimmings set out to contribute to a nascent discussion about sex-based vulnerability and how this is (un)seen by much of the literature and law. It is argued, ultimately, that private international law requires more sustained engagement with feminist scholarship if it is to avoid acting as an instrument for the entrenchment of substantive inequalities.

 

Part II: Civil and Commercial Matters in Private International Law

Unsurprisingly, given the focus of much of Jonathan Fitchen’s written work, Part II on civil and commercial matters makes up around half of the volume. It begins with Andrew Dickinson’s meticulous analysis of the meaning of “damage” in EU private international law. Dickinson notes that, despite the central importance of the term to the operation of much of EU private international law, there is little clarity as to its meaning. His chapter sets out to remedy this shortcoming through the articulation of a hitherto undeveloped taxonomy of “damage” which promises to become an essential tool in the arsenal of students, teachers, practitioners, and adjudicators of private international law.

Another editor, Burcu Yüksel Ripley, authored the next chapter, which addresses cryptocurrencies. Our discipline’s continued preoccupation with definitional clarity remains very much in evidence in this discussion of challenges posed by disruptive technologies. Yüksel Ripley notes that attempts to characterise cryptocurrencies as a thing/property are unsatisfactory in principle, and that they therefore lead to conceptually unsound outcomes. She proposes instead that analogies with electronic fund transfers provide more promise for the determination of the applicable law.

In the next chapter, by Laura Carballo Piñeiro, the volume returns to another major theme of Jonathan Fitchen’s scholarly output, namely the effectiveness of collective redress mechanisms. Carballo Piñeiro observes that access to justice remains restricted in most jurisdictions, and that a common EU approach remains lacking. Although the courts have provided some routes to collective redress, Carballo Piñeiro argues that a robust legislative response is paramount if corporate accountability for environmental harm is to be realised in Europe.

Private international law’s ability to engage with concerns regarding environmental sustainability remains a key focus of analysis in Carmen Otero García-Castrillón’s chapter concerning the discipline’s place in international trade agreements. The chapter advocates the bridging of an artificial systemic separation between the private and the public in the international system. It is argued that the extent of private power in the international system merits attention in trade agreements if sustainable development goals are to be attained.

Giesela Rühl also addresses concerns regarding private international law’s ability to be deployed in matters which are traditionally reserved to public and public international law. Her chapter considers innovations introduced through the German Supply Chain Due Diligence Act (Lieferkettensorg-faltspflichtengesetz – LkSG) which establishes mandatory human rights due diligence obligations in German companies’ international supply chains. Rühl laments the lack of attention paid to private international law in German law. She makes an especially compelling case for any future EU interventions to recognise the need to engage with private international law if legislation is to be effective.

The uneasy public-private divide in transnational law remains in evidence in Patricia Živkovi?’s chapter concerning what she describes as “creeping substantive review” in international arbitration. Živkovi? decries a lack of conceptual clarity in courts’ treatment of arbitral determinations, particularly insofar as public policy is deployed as an instrument of substantive review of private adjudication. She argues that international legislative intervention is needed if prevailing inconsistencies of treatment are to be resolved.

Fittingly, Part II is rounded off with a discussion of that part of private international law to which Jonathan Fitchen made his most enduring scholarly contribution, namely authentic instruments. Zheng Tang and Xu Huang discuss authentic instruments in Chinese private international law. Like Jonathan’s work, this chapter provides readers of English language scholarship with a rare example of in-depth analysis of concepts which are unfamiliar in the Anglo-American tradition. The chapter’s compelling arguments for legal refinements will also be of use, however, to readers who wish to identify possible improvements to Chinese law.

 

Part III: Family Matters in Private International Law

The final part of the book turns to family law, an area in which Jonathan provided ample instruction to students, but which was not especially in evidence in his written work. In keeping with the previous parts of the book, our discipline’s need for definitional clarity and consistency are very much apparent in the chapters in this part, as is the somewhat existential concern regarding the proper delineation of the public and the private. As the authors in this part observe, each of these matters has far-reaching effects on the apportioning of rights and obligations in circumstances which are deeply meaningful to the lives of litigants.

Aude Fiorini’s chapter considers flawed reasoning in the US Court of Appeals judgment in Pope v Lunday. Fiorini illustrates the substantive flaws in the Court’s treatment of the habitual residence of neonates, but also highlights a broader concern regarding the potential for unconscious bias in judicial decision-making. Through the judgment in Pope, Fiorini raises alarms regarding inconsistent judicial treatment of similar situations which turn on appreciation of circumstances establishing the habitual residence of a child. She argues, particularly compellingly in our view, that the interests of justice require greater conceptual clarity and consistency.

In the final chapter, by Anatol Dutta, the interactions of the public and the private return to the fore. Taking his cue from Jonathan Fitchen’s work on authentic instruments, Dutta explores the concept of private divorce under the Brussels IIter Regulation. Concerns regarding decisional autonomy are very much in evidence in this chapter, which considers the meaning of private divorces and the extent to which they enjoy recognition in the EU private international law system. Ultimately, Dutta welcomes measures which restrict private divorce tourism in the EU.

 

Conclusions

This book was born of a collective wish to remember and honour a much-loved scholar of private international law. In that, we trust that it has already fulfilled its purpose. However, each chapter individually and the book taken as a whole also capture the state of the art of private international law. Ours remains a discipline in search of systemic normative clarity and in episodic need of technical refinement. This collection provides tantalising glimpses of possible answers to both the essential question of the treatment of the private in the attainment of public goods, and in relation to longstanding vexing technical questions.

To preserve and further Jonathan Fitchen’s legacy as an educator of private international lawyers, editorial royalties from the sale of the book will be donated to the Jonathan Fitchen Fund of the Development Trust at the University of Aberdeen. Direct individual donations to the fund are also welcome and appreciated.

On Tuesday, March 5, 2024, the Hamburg Max Planck Institute will host its 42nd monthly virtual workshop Current Research in Private International Law at 11:00-12:30 (CET). Marta Pertegás Sender (Maastricht University and University of Antwerp) will speak, in English, about the topic

Current Developments in Cross-Border Enforcement of Patent Rights: Revisiting Territoriality and Reflexive Effect?

The CJEU preliminary ruling in BSH Hausgeräte Case C-339/22 is eagerly awaited by those involved or interested in cross-border enforcement of patent rights. The forthcoming judgment may have broader repercussions for the position of territoriality in international litigation on intellectual property rights or for the private international law of property more generally.

On the basis of AG Emiliou’s Opinion expected on 22 February 2023, this paper revisits some of the positions defended in my doctoral research almost 25 years ago (on still controversial issues such as the articulation of exclusive jurisdiction rules when validity is contested in infringement cases, or the ‘reflexive effect’ (effet réflexe) of such exclusive jurisdiction rules in favour of courts in non-EU States).

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

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