EAPIL blog

Shuai Guo (China University of Political Science and Law of Beijing) authored a book titled Recognition of Foreign Bank Resolution Actions, published by Edward Elgar. The book is part of the series of Elgar monographs in private international law.

This timely book offers a comprehensive study of the mechanism that gives effect to foreign bank resolution actions. In particular, it focuses on how the legal framework for the recognition of foreign bank resolution actions should be structured and proposes detailed legal principles on which effective frameworks should be based.

Shuai Guo conducts both normative and positive law analysis to investigate the status quo of available legal instruments that are used to recognise foreign resolution actions within three representative jurisdictions: the European Union, the United States and mainland China. Building on the traditional legal doctrines of private international law, financial law and insolvency law, this book proposes ten principles that should be applied to foreign bank resolution actions, offering innovative ideas for further research and study. Additionally, it fills the gap in scholarly research on the issue of cross-border bank resolution and formulates rules that would facilitate effective resolution actions across borders to achieve a global orderly resolution for banks.

Recognition of Foreign Bank Resolution Actions will be key reading for researchers and students in the fields of private international law, finance and banking law. The technical legal issues addressed throughout the book will also appeal to insolvency and banking lawyers, as well as policy makers within the field.

The table of contents can be accessed here.

As announced a few weeks ago, the European Association of Private International Law has set up a Working Group charged with responding to a public consultation launched by the European Commission, aimed at gathering evidence on the measures that the EU may adopt to enhance the protection of vulnerable adults in Europe.

The Group consists of seven members: Pietro Franzina (Catholic University of the Sacred Heart, Milan), Estelle Gallant (Toulouse 1 Capitole University), Cristina González Beilfuss (University of Barcelona), Katja Karjalainen (University of Eastern Finland), Thalia Kruger (University of Antwerp), Tamás Szabados (Eötvös Loránd University), Jan von Hein (University of Freiburg).

A webinar will take place on 10 March 2022 from 5 pm to 7 pm CET, organised by the Working Group. The Group intends to present a preliminary draft response and receive feedback from interested experts, practitioners and stakeholders.

Attendance is free, but prior registration is required. Those interested in attending the webinar are invited to fill in the form available here by 9 March at noon.

For information, please write to the Group’s co-chair, Pietro Franzina, at pietro.franzina@unicatt.it.

In March 2022 the Court of Justice will publish three judgments and three opinions.

The decisions correspond to cases C-421/20, Acacia (3 March), C-498/20, BMA Nederland (9 March), and C-723/20, Galapagos BidCo (24 March).

Case C-421/20, Acacia, is a request for a preliminary ruling from the Oberlandesgericht Düsseldorf in a case opposing Bayerische Motoren Werke Aktiengesellschaft against an Italian company, Acacia S.R.L. The defendant manufactures rims for motor vehicles in Italy and sells them throughout the European Union. In Germany, it markets rims under the name ‘WSP Italy’, including the ‘Neptune GT’ model. The claimant considers that the distribution of the rims in Germany by the defendant constitutes an infringement of its Registered Design, whereas the defendant invokes the repair clause in Article 110 of the Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (Community Designs Regulation, CDR). The questions referred concern both the international jurisdiction and the applicable law, and require the interpretation of provisions of the CDR and of the Rome II Regulation:

1. In proceedings for an infringement of Community designs, can the national court dealing with the infringement proceedings having international jurisdiction pursuant to Article 82(5) of the CDR apply the national law of the Member State in which the court dealing with the infringement proceedings is situated (lex fori) to subsequent claims in relation to the territory of its Member State?
2. If Question 1 is answered in the negative: Can the ‘initial place of infringement’ for the purposes of the CJEU judgments in Cases C‑24/16, C‑25/16 (Nintendo v BigBen) regarding the determination of the law applicable to subsequent claims under Article 8(2) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (‘Rome II’) (‘the Rome II Regulation’) also lie in the Member State where the consumers to whom internet advertising is addressed are located and where goods infringing designs are put on the market within the meaning of Article 19 of the CDR, in so far as only the offering and the putting on the market in that Member State are challenged, even if the internet offers on which the offering and the putting on the market are based were launched in another Member State?

Advocate General M. Szpunar had published his opinion in October 2021. No English version is available so far. My translation would be the following:

‘Article 1(1) of Regulation (EC) No. 864/2007 (…) and Article 88 (2) as well as Article 89 (1) (d) of Council Regulation (EC) No. 6/2002 (…) are to be interpreted as meaning that a case in which a court of a Member State is seized pursuant to Article 82(5) of the latter Regulation of an infringement action by a right holder resident in this State against an infringer resident in another Member State, which concerns the offer for sale and the placing on the market of the goods in question in the first Member State, there is a connection to the law of different States within the meaning of Art 1(1) of Regulation No. 864/2007 and, consequently, Article 8(2) of that regulation determines the law applicable to subsequent claims relating to the territory of that Member State.

Article 8(2) of Regulation No 864/2007 must be interpreted as meaning that the term “[country] in which the act of infringement was committed” within the meaning of that provision, insofar as it relates to the determination of the infringement action subsequent claims asserted, relates to the country in which the original infringing act on which the conduct reproached is based was committed.’

The judgment will be adopted by the fifth chamber – E. Regan, K. Lenaerts, C. Lycourgos (as reporting judge), I. Jarukaitis and M. Ilešič.

Case C-498/20, BMA Nederland, was referred to the Court of Justice by the Rechtbank Midden-Nederland. The applicant in the main dispute is ZK, in his capacity as successor to JM, liquidator in the bankruptcy of BMA Nederland BV (‘BMA NL’); the defendant is BMA Braunschweigische Maschinenbauanstalt AG (‘BMA AG’). Stichting Belangbehartiging Crediteuren BMA Nederland acts as intervening party.

In the main proceedings, the liquidator seeks a declaration that BMA AG has breached its duty of care towards the general body of creditors of its sub-subsidiary – the bankrupt company BMA N L- ; that it has thereby acted unlawfully; and that it is liable for the damage suffered by the general body of creditors. In addition, he seeks a declaration that BMA AG is obliged to pay to the estate of BMA NL, for the benefit of the general body of creditors, damages equal to the non-recoverable part of the claims of the general body of creditors against BMA NL.

The Stichting seeks a declaration that BMA AG has acted unlawfully (i) towards all the creditors involved in the bankruptcy of BMA NL, (ii) towards the creditors who relied on BMA NL’s having fulfilled its obligations towards them, since BMA AG was supposed to provide BMA NL with adequate financing for that purpose, (iii) or towards the creditors who could have taken measures to prevent their claims against BMA NL from remaining unpaid had they been aware in advance of the cessation of further financing by BMA AG. The Stichting also claims that BMA AG should be ordered as a third party to pay to each of BMA NL’s creditors, at its first request, the entire amount (including interest) owed by BMA NL to that creditor.

The national court asks the following sets of questions to the Court of Justice:

Question 1

(a) Must the term ‘place where the harmful event occurred’ in Article 7, point 2, of Regulation (EU) No 1215/2012 [Brussels I bis] be interpreted as meaning that ‘the place of the event giving rise to the damage’ (Handlungsort) is the place of establishment of the company which offers no redress for the claims of its creditors, if that lack of redress is the result of a breach by that company’s grandparent company of its duty of care towards those creditors?

(b) Must the term ‘place where the harmful event occurred’ in Article 7, point 2, of the [Brussels I bis Regulation] be interpreted as meaning that ‘the place where the damage occurred’ (Erfolgsort) is the place of establishment of the company which offers no redress for claims of its creditors, if that lack of redress is the result of a breach by that company’s grandparent company of its duty of care towards those creditors?

(c) Are additional circumstances required which justify the jurisdiction of the courts of the place of establishment of the company which offers no redress and, if so, what are those circumstances?

(d) Does the fact that the Netherlands liquidator of the company which offers no redress for the claims of its creditors has, by virtue of his statutory duty to wind up the estate, made a claim for damages arising from tort/delict for the benefit of (but not on behalf of) the general body of creditors affect the determination of the competent court on the basis of Article 7, point 2, of the [Brussels I bis Regulation]? Such a claim implies that there is no room for an examination of the individual positions of the individual creditors and that the third party concerned cannot avail itself of all the defences against the liquidator which it might have been able to use in respect of certain individual creditors.

(e)     Does the fact that a portion of the creditors for whose benefit the liquidator makes the claim have their domicile outside the territory of the European Union affect the determination of the competent court on the basis of Article 7, point 2, of the [Brussels I bis Regulation]?

Question 2

Would the answer to Question 1 be different in the case of a claim made by a foundation which has as its purpose the protection of the collective interests of creditors who have suffered damage as referred to in Question 1? Such a collective claim implies that the proceedings would not determine (a) the domiciles of the creditors in question, (b) the particular circumstances giving rise to the claims of the individual creditors against the company and (c) whether a duty of care as referred to above exists in respect of the individual creditors and whether it has been breached.

Question 3

Must Article 8, point 2, of the [Brussels I bis Regulation] be interpreted as meaning that, if the court seised of the original proceedings reverses its decision that it has jurisdiction in respect of those proceedings, such a reversal also automatically excludes its jurisdiction in respect of the claims made by the intervening third party?

Question 4

(a) Must Article 4(1) of Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations [Rome II Regulation] be interpreted as meaning that ‘the place where the damage occurs’ is the place where the company which offers no redress for the damage suffered by its creditors as a result of the breach of the duty of care referred to above has its registered office?

(b) Does the fact that the claims have been made by a liquidator by virtue of his statutory duty to wind up the estate and by a representative of collective interests for the benefit of (but not on behalf of) the general body of creditors affect the determination of that place?

(c) Does the fact that some of the creditors are domiciled outside the territory of the European Union affect the determination of that place?

(d) Is the fact that there were financing agreements between the Netherlands bankrupt company and its grandparent company which nominated the German courts as the forum of choice and declared German law to be applicable a circumstance which makes the alleged tort/delict of BMA AG manifestly more closely connected with a country other than the Netherlands within the meaning of Article 4(3) of the Rome II Regulation?

The opinion of Advocate General M. Campos Sánchez-Bordona was requested only in relation to the fourth question. In order to answer it he addressed as well the exclusion of non-contractual obligations arising out of the law of companies from the scope of Regulation Rome II under its Article 1(2)(d). I provide here a non-official translation into English:

Article 1(2)(d) of the Rome II Regulation must be interpreted in the sense that it excludes from its scope of application the non-contractual obligations resulting from the infringement of the duty of diligence of partners or administrators when the law attributes the responsibility before third parties, derived from said infraction, to the partners or administrators for company law-related reasons. By contrast, liability arising from a breach of the generic duty of care is not excluded from the scope of the Regulation.

Article 4 (1), of the Rome II Regulation must be interpreted in the sense that the country where the damage occurs is the one where a company has its domicile, when the damage suffered by its creditors is the indirect consequence of economic losses initially suffered by the company itself. The circumstance that the actions are brought by a bankruptcy administrator in his capacity as insolvency liquidator, or by an entity for the defence of collective interests, in favour (but not on behalf) of all the creditors, is without incidence on the ascertainment of such a country. The domicile of some creditors outside the European Union is equally irrelevant.

Article 4(3) of the Rome II Regulation is to be interpreted as meaning that a pre-existing relationship between the tortfeasor and the direct victim (such as, for example, a financing agreement, for which the parties have chosen the applicable law) is an element to be weighed together with the rest of the circumstances, in order to establish whether there is, between the harmful event and a certain country, a manifestly closer connection than that of the same event and the country whose law would apply under Articles 4(1) and (2).

Judges N. Jääskinen, N. Piçarra and M. Safjan (reporting judge) will adjudicate.

The ruling in C-723/20, Galapagos BidCo, will be one delivered by a chamber of five judges (E. Regan, I. Jarukaitis acting as reporting judge, M. Ilešič, D. Gratsias and Z. Csehi), without a previous opinion. The case is pending before the Bundesgerichtshof (Germany), which has referred the following questions in relation to Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (the new insolvency regulation):

1. Is Article 3(1) of Regulation (EU) 2015/848 to be interpreted as meaning that a debtor company the statutory seat of which is situated in a Member State does not have the centre of its main interests in a second Member State in which the place of its central administration is situated, as can be determined on the basis of objective factors ascertainable by third parties, in the case where, in circumstances such as those in the main proceedings, the debtor company has moved that place of central administration from a third Member State to the second Member State at a time when a request to have the main insolvency proceedings opened in respect of its assets has been lodged in the third Member State and a decision on that request has not yet been delivered?
2. If Question 1 is answered in the negative: Is Article 3(1) of Regulation (EU) 2015/848 to be interpreted as meaning that:

(a)     the courts of the Member State within the territory of which the centre of the debtor’s main interests is situated at the time when the debtor lodges the request to have insolvency proceedings opened retain international jurisdiction to open those proceedings if the debtor moves the centre of its main interests to the territory of another Member State after lodging the request but before the decision opening insolvency proceedings is delivered, and

(b)     such continuing international jurisdiction of the courts of one Member State excludes the jurisdiction of the courts of another Member State in respect of further requests to have the main insolvency proceedings opened received by a court of that other Member State after the debtor has moved its centre of main interests to that other Member State?

Let’s move now to the three opinions.

The one of Advocate General P. Pikamäe in case C-7/21, LKW WALTER, is expected on Thursday 9. The  questions come from the Bezirksgericht Bleiburg (Austria), on a case involving LKW WALTER internationale Transportorganisation AG, a company registered in the Austrian commercial register which operates in the field of international carriage of goods, and several defendants. The applicant is claiming EUR 22 168.09 plus interest and costs from the defendants on the ground of lawyers’ liability, because the defendants had failed to comply with the time limit to lodge in Slovenia an objection against a Slovenian decision on enforcement served on the applicant.

It is in those proceedings that the request for a preliminary ruling is made:

1.  Are Articles 36 and 39 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union and the principles of effectiveness and equivalence (principle of sincere cooperation under Article 4(3) TEU), to be interpreted as precluding a provision of a Member State which provides for, as the sole remedy against a decision on enforcement issued by the court without prior adversarial proceedings and without an instrument permitting enforcement, and solely on the basis of the allegations of the party seeking enforcement, an objection, which must be lodged within eight days in the language of that Member State, even if the decision on enforcement is served in another Member State in a language which the addressee does not understand, and the objection is already rejected as being out of time if it is lodged within twelve days?
2.  Is Article 8 of Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service of documents, read in conjunction with the principles of effectiveness and equivalence, to be interpreted as precluding a national measure which provides that, upon service of the standard form set out in Annex II informing the addressee of his or her right to refuse to accept the document within a period of one week, the period also begins to run in respect of bringing the appeal provided for against the decision on enforcement served at the same time, for which a period of eight days is laid down?
3. Is Article 18(1) of the Treaty on the Functioning of the European Union to be interpreted as precluding a provision of a Member State which provides for, as the remedy against a decision on enforcement, an objection, which must be lodged within eight days, and that time limit also applies where the addressee of the decision on enforcement is established in another Member State and the decision on enforcement is not written either in the official language of the Member State in which the decision on enforcement is served or in a language which the addressee of the decision understands?

One week later – thus, on Thursday 17-, M. J. Richard de la Tour will deliver his opinion in C-604/20, ROI Land Investments, a request from the Bundesarbeitsgericht (Germany). In the main proceedings, the defendant is a company operating in the real estate sector; the seat of its central administration is in Canada. The applicant, domiciled in Germany , had been working for the defendant on the basis of a ‘service agreement’ since the end of September 2015. As the parties felt that there was uncertainty surrounding the applicant’s employment status, they decided ‘to transfer’ the contractual relationship to a Swiss company that was to be newly established. In mid-November 2015, they agreed to terminate the ‘service agreement’ with retroactive effect. An accompanying letter from the applicant states that he signed the agreement subject to the condition that an equivalent agreement be concluded in relation to an executive management contract in respect of the Swiss company to be established.

On January 2016, the defendant established a subsidiary, R Swiss AG, under Swiss law. On February 2016, the applicant concluded a written contract of employment with R Swiss for a position as its director; the same day the parties signed a ‘patron agreement’ (as per the terminology used by the parties, commonly referred to as a ‘letter of comfort’). The contract of employment was to be subject to Swiss law.

On July 2016, R Swiss notified the applicant that the contract of employment was to be terminated. By judgment of 2 November 2016, the Arbeitsgericht Stuttgart (Stuttgart Labour Court, Germany) found that the termination was ineffective and ordered R Swiss to pay the applicant a certain amount of money. This judgment became final, but R Swiss did not discharge its payment obligation. Later, bankruptcy proceedings were opened in respect of the assets of R Swiss under Swiss law. At the beginning of May 2017, those proceedings were discontinued owing to a lack of insolvency assets.

In the main proceedings, the applicant seeks, on the basis of the letter of comfort, payment from the defendant of the sums owed by R Swiss according to the aforementioned judgment of the Stuttgart Labour Court. The action was dismissed at first instance on the ground that the German courts lack international jurisdiction. The Berufungsgericht (Court of Appeal), on the other hand, found that the German labour courts do have jurisdiction and upheld the action. By its appeal on a point of law brought before the referring court, the defendant seeks to have the decision at first instance restored.

The success of the defendant’s appeal on a point of law depends therefore crucially on whether the German courts have international jurisdiction. That jurisdiction could arise, first, from Article 21(2) read in conjunction with Article 21(1)(b)(i) of the Brussels I Regulation (question 1), second, from Paragraph 48(1a) read in conjunction with Paragraph 3 ArbGG, although the applicability of that national rule is unclear (question 2) and, third, from Article 18(1) of the Brussels I Regulation, if the applicant can be regarded as a ‘consumer’ within the meaning of that provision (question 3). If the German courts do in fact have jurisdiction, the question also arises as to which national law is applicable to the letter of comfort (question 4). The questions referred to the Court of Justice are:

1. Is Article 6(1) read in conjunction with Article 21(2) and Article 21(1)(b) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘Brussels I Regulation’) to be interpreted as meaning that an employee can sue a legal person – which is not his employer and which is not domiciled in a Member State within the meaning of Article 63(1) of the Brussels I Regulation but which, by virtue of a letter of comfort, is directly liable to the employee for claims arising from an individual contract of employment with a third party – in the courts for the place where or from where the employee habitually carries out his work in the employment relationship with the third party or in the courts for the last place where he did so, if the contract of employment with the third party would not have come into being in the absence of the letter of comfort?
2. Is Article 6(1) of the Brussels I Regulation to be interpreted as meaning that the reservation in respect of Article 21(2) of the Brussels I Regulation precludes the application of a rule of jurisdiction existing under the national law of the Member State which allows an employee to sue a legal person, which, in circumstances such as those described in the first question, is directly liable to him for claims arising from an individual contract of employment with a third party, as the ‘successor in title’ of the employer in the courts for the place where the employee habitually carries out his work, if no such jurisdiction exists under Article 21(2) read in conjunction with Article 21(1)(b)(i) of the Brussels I Regulation?
3. If the first question is answered in the negative and the second question in the affirmative:

(a) Is Article 17(1) of the Brussels I Regulation to be interpreted as meaning that the concept of ‘professional activities’ includes paid employment in an employment relationship?

(b) If so, is Article 17(1) of the Brussels I Regulation to be interpreted as meaning that a letter of comfort on the basis of which a legal person is directly liable for claims of an employee arising from an individual contract of employment with a third party constitutes a contract concluded by the employee for a purpose which can be regarded as being within the scope of his professional activities?

4. If, in answer to the above questions, the referring court is deemed to have international jurisdiction to rule on the dispute:

(a) Is Article 6(1) of Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) to be interpreted as meaning that the concept of ‘professional activities’ includes paid employment in an employment relationship?

(b) If so, is Article 6(1) of the Rome I Regulation to be interpreted as meaning that a letter of comfort on the basis of which a legal person is directly liable to an employee for claims arising from an individual contract of employment with a third party constitutes a contract concluded by the employee for a purpose which can be regarded as being within the scope of his professional activities?

Finally, Advocate General A.M. Collins’s opinion on C-18/21, Uniqa Versicherungen should be available on the last Thursday of March. I refer to the explanation of the case I made previously, when announcing the hearing last January.

Mathilde Codazzi, who is a master student at the university Paris II Panthéon-Assas, contributed to this post.

In a judgment of 9 February 2022, the French Cour de cassation ruled that the “relationship existing between the parties” required by Article 10(1) of the Rome II Regulation in order to apply the law governing this relationship to a claim of unjust enrichment cannot be found in a contract existing between one of the parties to the non-contractual obligation and a third party, nor in the performance by a party of obligations arising from mandatory provisions of the law applicable to the said contract.

Article 10(1) of the Rome II Regulation reads:

If a non-contractual obligation arising out of unjust enrichment, including payment of amounts wrongly received, concerns a relationship existing between the parties, such as one arising out of a contract or a tort/delict, that is closely connected with that unjust enrichment, it shall be governed by the law that governs that relationship.

Pursuant to a decision of German courts, a German notary was ordered to pay damages to a French bank for failure to comply with his obligation of due diligence (‘obligation de vigilance’: the judgment does not elaborate on this point). The notary’s claim against his civil liability insurer, German company HDI Versicherung, was rejected on the ground that the insurance contract did not cover damage intentionally caused by the insured party. However, pursuant to a German federal statute which requires the insurer to compensate even such damage, HDI Versicherung still compensated the bank. HDI Versicherung then sought to recover from the notary’s professional society (Chambre des notaires) and its insurer, but its claim was rejected by German courts on the ground that it had not been brought within the contractual time period. HDI Versicherung eventually brought a claim for unjust enrichment against the bank in France to obtain restitution of the amount paid under § 812 of the German Civil Code.

In a judgment of 30 June 2020, the Court of Appeal of Metz ruled that German law applied to the action for restitution of payment wrongly received pursuant to Article 10(1) of the Rome II Regulation, on the ground that the compensation was paid by reason of the relationship existing between HDI Versicherung and the notary and of the event giving rise to the damage suffered by HDI Versicherung and the notary was governed by German law, and that the payment had occurred pursuant to mandatory provisions of German law.

The bank appealed and argued that German law cannot apply to the non-contractual obligation between the notary’s insurer and the bank as there was no existing relationship between them.

The French Supreme Court ruled that neither a contract concluded by one of the parties to the non-contractual obligation with a third party, nor the performance of obligations imposed by mandatory provisions of the lex contractus of that contract could characterize the “relationship existing between the parties” in the meaning of Article 10(1) of the Rome II Regulation. Hence the law governing the contract could not apply to the unjust enrichment claim.

It held:

the relationship existing between the parties to the non-contractual obligation cannot result from a contract concluded by one of the parties with a third party, nor from the performance by a party of obligations arising from the contract imposed by the law applicable to this contract.

The scope of the judgment is narrow. The only issue before the Court was whether the lower court had properly applied Article 10(1). The language of the provision clearly clearly limits its scope to existing relationships between the parties to the quasi-contractual claim. The lower court had applied it outside of its scope, and was wrong for this reason alone.

It would have been good to know how the Cour de cassation would have applied the other paragraphs of the Article 10, but it did not need to for the purpose of deciding the appeal, and unsurprisingly did not.

Article 10(2) provides for the application of the law of the common habitual residence of the parties, and was thus irrelevant for this case as well. Article 10(3) then provides for the application of the “law of the country in which the unjust enrichment took place“. It seems clear that this would have designated France, where the French bank had received the payment.

Finally, Article 10(4) provides for a common and general exception clause. In this context, it seems that the contract between HDI Versicherung and the notary should have been highly relevant. Article 10(4), however, provides that the exception clause should only be applied if the non-contractual obligation arising out of unjust enrichment would have been manifestly more closely connected with a country other than the country otherwise designated under Article 10. Would it be so in this case?

The European Expertise and Expert Institute (EEEI) is seeking to recruit a project assistant for a part time position to work on a European project of the EEEI, Find your Expert II (Findex II).

The Findex II project is funded by the European Commission and aims at establishing a common definition of experts and improve the identification and selection of experts at European level.

The project is based on the following statement: Although judicial experts play an indispensable role in civil and criminal justice, there is no common definition of “judicial expert” (also called “expert witness” or forensic expert) across Europe.  Court mostly rely on the result of the expertise when rendering their decision. It is of crucial importance for a fair justice in Europe that experts giving their opinion to courts meet basic professional principles such as competence, independence, impartiality, and integrity as well as a minimal level of professional standards.

Another essential aspect is the possibility for the court to select the “right” expert, i.e., the one that will be able to answer the court’s question on a given case quickly and efficiently.

In order to enhance and converge these aspects throughout Europe, EEEI and EuroExpert as both major European actors of expertise propose to work on: a common understanding of expertise and the use of experts in the judicial field; convergence of nomenclatures, i.e. the lists of expertise fields; requirements of a future IT-search tool for expert.

The job of the project assistant will consist in assisting the various actors of the project. The EEEI expects that candidates will be students at master level or higher.

More details on the job can be found here. More details on the project can be found here.

The Assas International Law Review (Revue de droit international d’Assas) is an open access online journal published once a year by the doctoral school of the University. It features articles on public and private international law written by professors and doctoral students.

The main theme of the 2021 issue is art and international law.

The issue features seven articles on this topic (including one on litigation aimed at returning cultural objects). It also includes short articles summarizing the doctoral theses recently defended at the University and four more articles on various topics.

Of particular note for private international law scholars are the following articles.

In the first article, Marie Elodie Ancel offers a French perspective on the judgment of the UK Supreme Court in Enka v. Chubb (La loi applicable à la Convention d’arbitrage au Royaume-Uni: les enseignements de l’arrêt Enka). She concludes as follows:

Par conséquent, le raisonnement conflictualiste tel qu’il est pratiqué par la Cour suprême du Royaume-Uni ne présente pas de pertinence particulière dans le contexte français. À l’inverse, il serait concevable pour la Cour suprême du Royaume-Uni de s’inspirer de la méthode française et de forger des règles matérielles que les juges anglais pourraient appliquer pour statuer, aux divers moments que le droit anglais leur ménage pour ce faire, sur la validité, l’étendue ou l’interprétation de la clause d’arbitrage. D’ailleurs, comme the validation principle, les présomptions et contre-présomptions censées permettre d’établir un éventuel choix tacite de la loi applicable à la clause d’arbitrage ont la nature de règles matérielles du for. La Cour suprême démontre d’ailleurs un indéniable talent pour créer de telles règles… En théorie, elle pourrait donc l’exercer pour définir directement le régime substantiel des clauses d’arbitrage. Cependant, puisque le Royaume-Uni a intégré la Convention de New York dans sa législation de manière stricte et sans profiter de l’article VII (1) et que la Cour suprême préconise d’appréhender la clause d’arbitrage de la même manière, quel que soit le moment où le juge anglais est amené à en vérifier la validité ou l’efficacité, il ne faut pas espérer de révolution méthodologique outre-Manche. La méthode conflictualiste y sera sans doute encore longtemps pratiquée, quitte à réviser et reconcevoir les présomptions censées établir un choix tacite de la loi applicable. Les deux rives de la Manche ne sont pas près de se réunir.

The second article is written in English by Diana Reisman and is concerned with 2019 Hague Judgments Convention (Breaking Bad: Fail-Safes to the Hague Judgement Convention).

This Note explores a contingency that is neither acknowledged nor addressed by the Judgments Convention: a marked deterioration in the judiciary of a party following the expiration of the twelve-month suspension period. When a state obligates itself, under the terms of the Judgments Convention, to enforce the civil and commercial judgments of another State Party, it does so with confidence in the quality of the judicial culture of that other state, including the degree of fairness and judicial transparency with which cases are prosecuted. However, the integrity of the judiciary is not necessarily enduring, nor is it immune to the effects of political change in the state. Suppose that a State Party whose judicial culture was judged fair and transparent at the time of ratification or accession experiences internal change, leading to a sudden or a gradual alteration in its judicial culture, which causes concerns for some of the other treaty partners. As drafted, the Judgments Convention would oblige the other States Parties to continue to perform their treaty obligations to that State Party. Herein lies the conundrum of the Judgments Convention: It relies on the assumption that its parties’ quality of justice is stable over time such that their private law judgments should be enforced on a fast track in each other’s courts. Should the quality of one state’s justice system later decline, litigants contesting enforcement of one of that state’s civil judgments would have the burden of conforming their objections to the Judgments Convention’s narrow grounds for nonrecognition. Other States Parties would find themselves in the position of recognizing and enforcing problematic civil judgments issued from the compromised State Party.

The 2021 Issue is freely available here.

The environment is on – almost – everybody’s mind.  In particular companies committed to sustainable investment are becoming an increasingly relevant economic factor. Accordingly, their business models are now also frequently the subject of court proceedings, raising  new legal questions, including those concerning private international law. The CJEU has recently had to decide on such a question.

Facts

The Swiss investment firm ShareWood had a clever idea to turn ecological concerns into money: They offered to plant trees in Brazil, harvest them after a couple of years and sell the timber for a profit. Investors were promised ownership of individual trees. They would also rent a piece of land for as long as ‘their’ trees were standing on it. The contracts were expressly submitted to Swiss law.

Soon the relations between the firm and their investors turned sour. Some Austrian residents complained that ShareWood had failed to transfer ownership of the trees to them and sued the firm in Vienna.

Proceedings

The Austrian Supreme Court (Oberster Gerichtshof) considered the law applicable to this dispute. In particular, it was unsure whether the case fell under Article 6(4)(c) of the Rome I Regulation, which makes an exception from the consumer conflicts provisions in the case of “a contract relating to a right in rem in immovable property or a tenancy of immovable property”.

Holding of the CJEU

The CJEU, in a decision dated 10 February 2022, flatly rejects the applicability of Article 6(4)(c) of the Rome I Regulation.

First, the CJEU denies that the contracts concern “a right in rem in immovable property”. Although the investors aimed to acquire property, they targeted the trees and not the immovable property. The Court admits the existence of national provisions under which the tree is considered as being part of the immovable property on which it stands, but wilfully ignores them by applying its famous principle of autonomous interpretation. The Court refers instead to the specific purpose of the contracts, which is to generate income from the sale of the timber. In its view, the trees “must be regarded as being the proceeds of the use of the land on which they are planted” (para 28), and thus not as forming part of the real estate.

Second, the CJEU also denies that the contracts relate to the “tenancy of immovable property” and hence does not fall under the second prong of Article 6(4)(c) of the Rome I Regulation,  despite the fact that the investors rented the land on which their tree stands. The Court of Justice revives here some of its case law regarding the exclusive jurisdiction for such tenancy agreements under the old Article 16(1)  of the Brussels Convention. Specifically, it cites its decision in Klein, where it had ruled that the application of this provision requires “a sufficiently close link between the contract and the property concerned”. The Court now holds that this link would not exist where the lease is intended “merely to enable the sales and services elements provided for in the contract to be carried out” (para 37).

The result is that the choice of law in the contracts could not overcome the mandatory rules in force at the consumers’ habitual residence (Article 6(2) Rome I Regulation). In the specific case, the chosen Swiss law was thus superseded by the mandatory rules of Austrian law.

Comment

The Court of Justice may have oversimplified things a bit. It neglected the fact that the investors pursued a double goal: they wanted not only to make money on the sale of the timber, but also to own the trees while they were growing as a kind of legally protected contribution to the fight against climate change. To ensure this second goal, the contracts stipulated that this ownership would not start after the trees were harvested, but long before. Moreover, the connection with the tenancy of the land was way more straightforward than in  Klein, where a membership in a club had been acquired. Here, the land served the purpose of  growing a specific tree. There was thus a much stronger connection to a particular piece of land.

Conclusion

Despite these weaknesses, the CJEU judgment may still be defended on the grounds  of consumer protection. Indeed, financial profit was a key driver of the whole contractual arrangement and not just a side-issue. In a case like this, the link to the immovable property does not outdo the need for consumer/investor protection. Article 6(4)(c) of the Rome I Regulation should be restricted to those cases that primarily are about rights in immovable property and are not also motivated by a substantial financial purpose. This is the lesson to be learned from ShareWood Switzerland.

If the financial purpose would be dominant, one could think about qualifying the contracts as financial instruments under Art. 6(4)(d) of the Rome I Regulation. Yet this characterisation is difficult given the regulatory definition of this notion (see Annex I C of the Markets in Financial Instruments Directive (MiFID II)). Contracts like the present ones thus fall between the boundaries  of Article 6(4)(c) and (d) of the Rome I Regulation, which is good news for consumers because the rules of Article 6(1) and (2) of the Rome I Regulation, favourable to them, will apply.

Many thanks to Amy Held, Felix Krysa and Verena Wodniansky-Wildenfeld for reviewing this post.

Gary Born (Wilmer Cutler Pickering Hale and Dorr LLP) and Cem Kalelioglu (Wilmer Cutler Pickering Hale and Dorr LLP) contributed an article on choice-of-law agreements in international contracts to Volume 50, Number 1, of the Georgia Journal of International and Comparative Law.

Choice-of-law agreements are widely used in international business transactions, with a substantial majority of all cross-border commercial and investment contracts containing a choice-of-law provision. Virtually all legal systems, and many treaties and other international legal instruments, recognize the presumptive validity of such agreements. Nonetheless, there are significant variations in the treatment of international choice-of-law provisions, including with respect to issues of validity, enforceability, and interpretation, which can lead to a degree of unpredictability in the application of such provisions. This uncertainty undermines the basic purposes of choice-of-law agreements and private international law more generally.

This Article examines the treatment of international choice-of-law agreements under both national and international law. In particular, the Article considers the rules governing the validity and enforceability of such agreements, the exceptions to their presumptive validity and enforceability, and the interpretation of international choice-of-law provisions.

The Article argues that the basic rule of presumptive validity of choice-of-law provisions in international commercial and investment contracts now has the status of a general principle of law and is therefore binding on states as a matter of international law and, in any event, should be adopted as a matter of national policy. This Article also argues that, although there are substantial similarities in the treatment of exceptions to the validity of international choice-of-law provisions in different national and other legal systems, important differences persist. These differences undermine the purposes of such agreements, and thereby impede international trade and investment. The Article examines these differences and proposes heightened uniformity in the rules governing the recognition of international choice-of-law agreements in commercial and investment contracts. Among other things, choice-of-law agreements (i) should not be subject to any “reasonable relationship” requirement, (ii) should be presumptively valid where a non- national legal system is selected and (iii) should be unenforceable on public policy grounds only in exceptional circumstances.

The Article also contends that similar differences exist with respect to the interpretation of international choice-of-law agreements in different legal systems, and that these differences frustrate the intentions of commercial parties. The Article proposes rules of interpretation of international choice-of-law provisions, including presumptions that choice-of-law agreements select only the “local law,” not the “whole law,” of a jurisdiction and that choice-of-law provisions be interpreted liberally, to include most issues of procedure and remedy, as well as non-contractual issues. These uniform rules of interpretation would better serve the objectives of commercial parties and purposes of private international law regimes and the international legal system than does existing treatment of international choice-of-law provisions.

The article is freely accessible here.

The Catholic University of the Sacred Heart in Milan plans to invite young scholars to present the outcome of their doctoral research on any topic within the field of private international law, transnational law or the law of international arbitration, at a dedicated seminar that will be held annually in Milan (the MECSI Seminar). Each MECSI Seminar will revolve around one scholar, selected by a jury constituted for this purpose.

Exceptionally, two MECSI Seminars will take place in 2022. The first will be held on 9 March 2022 at 5 pm. The speaker will be Augustin Gridel, who is a teaching fellow at the Université Paris II Panthéon-Assas. He will deliver a presentation titled Financial Markets and Financial Instruments in Private International Law. Professor Francesca Villata, of the University of Milan, will act as a discussant.

Those interested in presenting their doctoral research at the second MECSI Seminar of 2022, scheduled to take place in November 2022, are encouraged to send an e-mail to Pietro Franzina (pietro.franzina@unicatt.it) by 15 July 2022.

Applicants must be aged less than 35 and may come from any country. They must have already discussed their PhD dissertation at the time when the application is submitted (however, no more than two years must have passed since the dissertation was discussed). Applications must include a copy of the dissertation, an abstract of the dissertation in English and a CV of the author in English.

Applications must also include a proposal for the seminar presentation consisting of a title followed by abstract of about 1.500 words. The subject matter of the presentation must relate to, but should not necessarily coincide with, the topic of the thesis: the applicant may choose, for instance, to concentrate on one aspect of his or her research, or discuss developments occurred after the dissertation was discussed.

All documents accompanying the application must be in pdf format. The selection process involves, for those shortlisted, a Zoom interview.

The Catholic University of the Sacred Heart will cover the travel expenses of the selected scholar up to 600 Euros, and will take care of his or her accommodation at one of the guest houses of the University for up to two nights. During their stay in Milan, the selected scholar will also be invited to give a 45 minute lecture in English to the students attending the course of Private International Law on a topic unrelated to their PhD research.

The French Committee of Private International Law is looking for a part-time assistant (35 hours per year). His/her main tasks will be to transcribe the debates of the Committee meetings, organise meetings and update the website of the Committee.

The main requirements are:  Master’s degree in private international law or PhD student in private international law; Good writing skills and command of the usual computer tools.

The remuneration is 2000 EUR per year and the expected work status is self-employed (auto-entrepreneur).

The position is to be filled as soon as possible and at the latest in May 2022.

Applications should be sent to the General Secretariat of the Committee: Sabine.corneloup@u-paris2.fr and Fabienne.jault@seseke.fr.

The European Association of Private International Law learnt with great sadness the passing of Peter Mankowski. The editors of the EAPIL Blog are most grateful to Ulrich Magnus for contributing the in memoriam published earlier today.

While none of us knew Peter Mankowski as well as Ulrich Magnus, some of the Editors of this blog were on personal terms with him, while others were involved in projects he led and had planned. Peter Mankowski was a great scholar. Not only did he write a staggering amount of publications, but he was also an avid reader of everything published on private international law. in addition, he provided very useful feedback and encouraging comments to other authors.

The Editors of the Blog greatly appreciated his willingness to participate in the online symposia that they organised, often on a (very) short notice, on important decisions of the CJEU with scholars from other European jurisdictions. Peter was always enthusiastic about these online symposia.

One of the last in which he participated was about the CJEU decision in Hrvatske Šume at the start of 2022. He kicked off our online symposium on the case with a lucid analysis, perhaps one of the last works of his busy life.

Reading it again lets us remember why we loved Peter: His text is full of ideas, provides ample references, and testifies of his broad view of international law.

In retrospect, it was only logical that Peter Mankowski would be interested in sharing and debating with other European scholars.

He and Ulrich Magnus were instrumental in the development of a transeuropean dialogue on private international law. We are of course referring to the groundbreaking series of European commentaries on private international law. Magnus and Mankowski were the first to gather teams of European scholars to offer systematic commentaries of the most important European regulations on private international law.

Establishing a truly pan-European forum to discuss issues of private international law is the main goal of the European Association of Private International Law. Peter Mankowski (and Ulrich Magnus) were precursors in this respect. They blazed the trail on which we walk.

This memorial was contributed by Prof. Dr. Ulrich Magnus.

On 10 February 2022 Peter Mankowski passed away, entirely unexpected at the age of only 55. The European community of scholars of Private Law and in particular Private International Law lost one of its most brilliant and productive minds. He leaves behind the almost unbelievable number of about 1500 publications, not few of them counting 1000 and more pages. Even his annotations on court decisions were frequently longer and more intensely documented than many ordinary articles. And his footnotes! He truly used the entire legal materials (legislation, decisions, scholarly works and articles) accessible in Europe and he did not do it for ‘ornamenting’ his considerations but really delved into the sources and brought to the surface what was helpful for the solution of the concrete legal problem.

To this end, his education at the Johanneum, the renowned Hamburg Gelehrtenschule, laid the foundation with Greek and Latin. His study in at the law faculty in Hamburg, the two states exams there, a longer stay in London added to his abilities. Shortly after his habilitation at the University of Osnabrück with Prof. Dr. Christian von Bar he got his first chair: In 2001 he became professor for civil law, comparative law and private international and procedural law at the University of Hamburg. All he needed to become an outstanding scholar he brought with him: besides an excellent knowledge of law and procedure and the language skills the bright mind, the curiosity for new and complicated problems, the creativity and ability to solve them, his unbelievable spirit and endurance to work hard. And besides that, he was a wonderful colleague and friend, with wit and a very good sense of humour but also with great empathy if others faced serious problems. He himself had to undergo a heart-transplantation in 2012 and in 2014 a transplantation of a kidney which his mother sacrificed. I never heard him ever complain about his health problems. Not only in this respect he was incredibly brave and fearless. Peter leaves behind his parents. So many will miss him so much.

Rhona Schuz (Bar-Ilan University) has published an article Comparative Law and the Work of The Hague Conference on Private International Law in relation to Family Law in Ius Comparatum 2022. Ius Comparatum is an open access research series published under the auspices of the International Academy of Comparative Law (IACL).

The paper is a written version of the inaugural lecture given by Rhona Schuz during the first day of the Online Week on Comparative Family Law Methodology organized by IACL and Bucerius Law School back in October 2021. The lecture may be watched here.

The abstract reads as follows:

This lecture highlights the importance of comparative law in the work of the Hague Conference on Private International Law in the field of family law, both in the process of drafting Conventions and in monitoring the implementation of Conventions after they have come into force. Examples are given of the ways in which different types of comparative law studies have been used to inform the work of preparing Conventions and the various comparative law tools which have been adopted in post-Convention efforts to promote uniform implementation. The significance of the post-Convention comparative work is underlined by a brief discussion of the importance of uniform application of Conventions and the real risks of lack of uniformity. Finally, attention is drawn to a few methodological issues which arise in connection with the comparative law work discussed.

The first issue of the Journal du droit international for 2022 has just been released. It contains three articles and several case notes relating to private international law issues.

In the first article, Gian Paolo Romano (University of Geneva) revisits the interplay between “private” international law and “public” international law (Droit international dit « privé » et droit international dit « public » : éléments d’une théorie unitaire et humanisée du droit international).

The English abstract reads :

The doctrine of private international law and the doctrine of public international law rely on two supposedly self-standing theories whose independence is justified by the difference in their subject-matter : public international law mainly deals with relations between States and the international organizations they form, while private international law deals with relations between private individuals and corporations. However, each of these theories comes up against multiple paradoxes and unresolved problems that their specialists candidly acknowledge. The author argues that a unified and human-centered theory of international law promises to overcome such difficulties, to give a more accurate account of the contemporary law of international relations and to facilitate its further progress.

In a second article, Alejandra Blanquet (Catholic Institute of Paris) focuses on the issue of international child abductions in Japan under the 1980 Hague Convention (Le risque juridique au sein de la Convention de La Haye de 1980 : le cas des enlèvements internationaux d’enfants au Japon – À propos de l’arrêt de la première chambre civile de la Cour de cassation du 28 janvier 2021).

The English abstract reads:

When a French judge confirms that a wrongful removal or a retention of a child have taken place, he must apply The Hague Convention of 1980 and order the child’s return to the place of his habitual residence. The only exception accepted to this solution is the fulfillment of one of the situations described on the text, especially the one exposed in Article 13. Exceptional in nature, these situations also received a restrictive interpretation preventing French jurisdictions from taking legal risk into consideration. This concept may be defined, in our opinion, as the danger derived from the content of foreign law, specifically the one from the country of habitual residence of the child, and which application could lead to negative consequences for the child in the event of a return. By excluding its consideration, the Court of Cassation confirms its preference for a restrictive interpretation of Article 13.b while she closes the door to a possible adaptation of the Convention’s solutions that may be useful to face the particular problem of Japanese kidnappings.

In the third article, Élodie Kleider (PhD, Strasbourg & Bâle Universities) discusses the scope and interpretation of the Lugano Convention based on Norwegian and Swiss case law (Convention de Lugano, États tiers et CJUE : entre influence et ignorance, exemples venus de Suisse et de Norvège).

The English abstract reads:

Only a few non-Member States of the European Union benefit from the Lugano Convention of October 30th, 2007. The United Kingdom hoped to join them after the Brexit. Such a position is advantageous : thanks to the convention, the third country enjoys the benefits of the European judicial area, while keeping great flexibility. Jurisdictions of those countries tend to comply with the judgments of the ECJ, but sometimes clearly deviate. Some Swiss and Norwegian decisions will prove it.

The provisions of the Brussels I bis Regulation on insurance matters (Articles 10-16) are complex and often misunderstood. Now the CJEU has clarified their scope in an important judgment.

A British domiciliary, BT, had an accident on a Spanish property. He brought a suit in Britain against not only the Spanish insurer of the property (Seguros Catalana Occidente), but also against the insured landlord (BE). BE, being domiciled in the Republic of Ireland, objected to the jurisdiction of the British courts.

Incidentally, this was one of the last preliminary references submitted by a British court before Brexit. The County Court at Birkenhead sought clarification on the meaning of Art 13(3) Brussels Ibis, which gives parallel jurisdiction over the injured party and the insured where the applicable law allows the latter to be joined as a party (which apparently English law does).

Disputes over liability in insurance matters usually involve three parties: the victim (the “injured party” in the terminology of Section 3 of the Brussels I bis Regulation), the tortfeasor (the “insured person” in the terminology of the same section), and the tortfeasor’s insurer. Hence, the issue in the present case was whether Article 13(3) Brussels I bis allows the injured party to sue the insured party and the insurer in the same court under the special jurisdiction rules of Section 3.

The CJEU’s answer is negative. It ruled that the insured person could not be joined to the claim brought by the injured party against the insurer in the court conferred special jurisdiction in a matter relating to insurance. That meant that the County Court at Birkenhead did not have jurisdiction over BT’s claim against BE, but only over BT’s claim against Seguros Catalana Occidente.

This scission of jurisdiction between the dispute against the insured party and the insurer may seem surprising at first, as it appears inefficient and at odds with the principle of the sound administration of justice. Yet the decision of the CJEU is to be applauded.

As the CJEU correctly points out, Section 3 of the Brussels I bis Regulation only deals with “Jurisdiction in matters relating to insurance”, as indicated by its heading. The action of BT against EB is not an insurance suit, but rather a typical claim in contract or tort, which is governed by the special jurisdiction rules in Section 2 of the Regulation. This approach of the CJEU draws upon classic arguments arising from the Regulation’s text and structure.

Second, the Court also makes a teleological or purposive argument by stressing that the rules of Section 3 seek to correct a certain imbalance in power between either the injured and/or the insured as the weaker party, and the insurer as the supposedly stronger party. Such imbalance does not exist where neither party to the action is an insurer, like in the case of BT’s claim against BE.

Finally, and perhaps most importantly, the CJEU had recourse to the legislative history: According to the Jenard Report (p. 32), Article 13(3) of the Brussels I bis Regulation was enacted to give the insurer the possibility of joining the insured as a third party to proceedings between the insurer and the injured person. It was not intended to give the injured person the right to join the insured party to a suit against the insurer. The latter will usually be brought in the home jurisdiction of the injured person, which is allowed under Article 13(2) in conjunction with Article 11(1)(b) of Brussels I bis (see CJEU Case C-463/06 FBTO Schadeverzekeringen NV v. Jack Odenbreit). The CJEU is correct to stress that allowing the injured person to join the claim against the insured person would open the doors to all sorts of manipulation. For instance, the party injured by a tort could bring an action against the insurer and join the tortfeasor to the dispute instead of using the rules on general and on special jurisdiction (Articles 4, 7(2) of Brussels I bis).

In sum, injured persons cannot join insured persons to direct claims they bring against the insured person’s insurer. They have to bring the two actions separately, and possibly in different courts. BT would thus have to sue EB either in Ireland, EB’s country of domicile (Article 4(1) of the Brussels I bis Regulation), or in Spain as the place where the alleged harm occurred (Article 7(2)). This seems correct as EB is not an insurer and should thus not be subject to the special jurisdiction rules for matters relating to insurance.

— Many thanks to Amy Held, Felix Krysa and Verena Wodniansky-Wildenfeld for their comments on the draft post.

Giesela Rühl (Humboldt University of Berlin) has posted on SSRN a preview of her chapter on ‘Cross-Border Protection of Human Rights: The 2021 German Supply Chain Due Diligence Act’. The paper is forthcoming in 2022 in a German edited volume in honour of Jonathan Fitchen, who passed away last year (see here).

The abstract reads as follows:

In the summer of 2021, after long and heated debates, the German legislature has adopted the Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Global Supply Chains, also known as the Supply Chain Due Diligence Act (Lieferkettensorg-faltspflichtengesetz – LkSG). Following the footsteps of other European countries, notably France, the new law establishes mandatory human rights due diligence obligations and, hence, requires German companies – for the first time – to protect human rights in their supply chains. The Act has, therefore, rightly been described as a “milestone”.

However, in addition to praise the new law has also attracted a lot of criticism and not only by opponents of mandatory human rights due diligence obligations, but also by supporters: While they welcome the establishment of a legally binding framework to better protect human rights in global supply chains, they argue that the reach of the Act is too limited. In particular, they be-moan that the Act relies on public enforcement mechanisms only and refrains from imposing any civil liability on companies for violations of the newly established due diligence obligations.

The following chapter takes this criticism – and the adoption of the German Supply Chain Act more broadly – as an occasion to take a closer look at the newly created obligations to better protect human rights in global supply chains. In particular, it sheds light on the effects of the Act under private law and discusses whether private international law may (or may not) help to effectuate the new provisions in a cross-border context.

On 5 April 2021, the Greek Supreme Court issued a judgment relating to a dispute between two German companies. The case revolved around the interpretation of Article 14 of the Service Regulation, according to which “Each Member State shall be free to effect service of judicial documents directly by postal services on persons residing in another Member State by registered letter with acknowledgement of receipt or equivalent”. The document introducing the proceedings had been served by mail by the lawyer of the appellant. The Supreme Court ruled that a certificate of the Greek post authority is an equivalent document for the purposes of Article 14. The Court referred to the judgment of the CJEU in Andrew Marcus Henderson v Novo Banco SA. A closer look at the facts reveals however some flaws.

It is not common for litigation to occur in Greece between parties that are all based outside Greece. The following circumstances explain why this happened. The appellant was originally the defendant in proceedings  brought by a Greek company in Thessaloniki. In the course of the proceedings, the defendant – a German company – filed an action on a warranty against another German company in accordance Article 6(2) of the Brussels I Regulation (now Article 8(2) of the Brussels I bis Regulation). The latter company challenged the jurisdiction of the seised court on the ground that it had entered into a choice of court agreement with the Greek whereby jurisdiction had been conferred on the courts of Cologne. The court upheld the choice of court and dismissed the claim for lack of jurisdiction (Court of First instance Thessaloniki 2063/2010, published in: Armenopoulos 2014, pp. 785 et seq).

The case was later abandoned by the Greek company, not by the German company. An appeal on a point of law (which in Greece is known as αναίρεση, i.e., cassation) was then lodged before the Supreme Court. The appellee did not appear in the hearing.

Before entering into the examination of the grounds of cassation, the court chose to verify the propriety of notification to Germany. The court referred for this to the judgment of the CJEU in Henderson, stating the following:

The service of a document instituting proceedings by post is valid, even if the acknowledgment of receipt of the registered letter was replaced by another document, however, upon the condition that such document provides equivalent guarantees as regards information provided and evidence.

On the facts, the Supreme Court ruled that:

By virtue of the receipt of the registered letter, dated from 15-07-2019, issued by the post office (in Thessaloniki), the petition, dated from 22-11-2019, to trace the acknowledgment of receipt, and the reply of the Hellenic Post, dated from 17-12-2019, which certifies that the registered letter was delivered to the recipient on the 19 July 2019, and to which a copy of the recipient’s signature is attached, it is evidenced that a true copy of the appeal, duly translated in the German language, and to which a summons is attached, has been duly and timely served by post to the appellee.

In Henderson, the CJEU was confronted with almost the same facts; the sole difference concerned the nature of the recipient, which in the case at hand was a legal entity, not a natural person. The CJEUD was called on to interpret Article 14 of the Service Regulation, and focused on three aspects: the equivalence of the document produced; the person receiving the document, other than the recipient; the gravity of the standard form set out in Annex II of the Service Regulation.

I will attempt to juxtapose the interpretation given by the CJEU to the findings of the Supreme Court.

The Supreme Court ruled that service was good, based mainly on the confirmation letter issued by the Hellenic Post. Indeed, the latter gave clear information with respect to the document served, and the place and time it was served. However, no reference is made to the person receiving the document.

The CJEU ruled in this respect the following:

… a registered letter allows tracing of the various stages of its route to the addressee. As regards the acknowledgment of receipt, which is completed when that addressee, or, where appropriate, his representative, receives the letter, it indicates the date of delivery, the place of the delivery and the qualities and signature of the person who received that letter … (para 76).

It added:

In those circumstances, if a third party can validly accept a judicial document in the name and on behalf of the addressee, that possibility must nevertheless be reserved for clearly defined situations, to ensure that the rights of the defence of that addressee are observed as fully as possible (para 93).

Hence, an equivalent document lacking any reference to the capacity under which a person received the document on behalf of the party, is no good service. Even more, when the defendant is a legal entity, a sheer reference that the document was served to the recipient, is again no good service: it is impossible to serve directly to the company. The equivalent document must have been received by a person, whose name is stated in the document, acting as an authorized representative.

The Supreme Court ruled that service was good, without confirming that the standard form under Annex II was handed over to the recipient, or included in the file. It did mention though, that the appeal was translated in German.

The CJEU ruled in this respect the following:

As regards the scope which must be given to that standard form, the Court has already held that Regulation No 1393/2007 does not contain any exceptions to its use (para 55).

It went on to say:

From that consideration and the aim pursued by the standard form set out in Annex II to Regulation No 1393/2007…, the Court has inferred that the receiving agency is required, in all circumstances and without it having a margin of discretion in that regard, to inform the addressee of a document of his right to refuse to accept that document, by using systematically for that purpose that standard form (para 56).

It concluded:

Consequently, the lack of information resulting from that omission can only be validly remedied by the delivery, as soon as possible and in accordance with the provisions of Regulation No 1393/2007, of the standard form set out in Annex II thereto (para 65).

Hence, the non-production of the standard form by the appellant should have led to a stay of proceedings, until the Receiving Agency remedies the omission. This was not taken into account by the Supreme Court, which presumably considered that the attached translation makes the standard form redundant.

The question has popped up more than 15 years ago, again in the course of Greek proceedings involving litigants domiciled in Germany. According to the prevailing view in Germany, postal service may only be effected by a Transmitting Authority declared officially by the Member State in question. Given that Greece has declared the courts as the sole Transmitting Authorities, postal service by a private person, most of the times the lawyer representing the claimant, is deemed to be improper. In addition, by allowing this kind of service, Article 15 of the Service Regulation would be circumvented, and direct service would be introduced to Germany through the backdoor (Germany opposed to this form of service).

The question led to contradicting rulings in Trier and Cologne courts. Burkhard Hess supported a more liberal view, by allowing postal service made by private persons. The issue was finally solved by pertinent legislation. However, the new wording in Article 18 of the Service Recast Regulation nr. 2020/1784 is expected to change the scene: The reference to each Member State has been deleted.

Gilles Cuniberti (University of Luxembourg) and Sara Migliorini (University of Macau) have published a commentary in French on Regulation 655/2014 establishing a European Account Preservation Order (EAPO).

The book offers a comprehensive article per article commentary of the EAPO Regulation with a focus on its implementation and operation in the three French speaking Members States of the EU, Belgium, France and Luxembourg. Some aspects of the implementation of the Regulation are addressed by implementing legislation, which the book reproduces and discusses.

On certain issues, the implementation of the Regulation has varied a great deal in these three countries (and more widely in the EU).

An interesting example is the information gathering remedy which Article 14 of the EAPO Regulation requires all Member States to establish. Each Member State is meant to offer a procedure for finding information on bank accounts that the debtor might hold in the relevant Member State. France already had such procedure that it simply made applicable in the context of the EAPO Regulation. In contrast, no such procedure existed in Luxembourg and Belgium. Luxembourg established one for the purpose of the Regulation. So did Belgium, but it did not limit the scope of the said procedure to request made under Article 14 and has introduced a new remedy in Belgian law available outside the scope of the EAPO Regulation.

More information on the book can be found here. The table of contents is available here.

Francesco Parisi (Professor of Law at the University of Minnesota, Law School and a Professor of Economics at the University of Bologna), Daniel Pi (Assistant Professor at University of Maine School of Law) and Alice Guerra (Assistant Professor at the University of Bologna) wrote an interesting article using a law and economics approach to compare access to evidence in the US and EU. The article, entitled Access to Evidence in Private International Law, is forthcoming in 2022 in volume 23 of Theoretical Inquiries in Law.

The authors focus their analysis on how a misalignment of the burden of proof and evidentiary rules can frustrate the production of evidence and undermine care incentives when these are applied cross-border tort cases.

The abstract reads as follows:

This Article analyzes the interaction between the burden of proof and evidentiary discovery rules. Both sets of rules can affect incentives for prospective injurers to invest in evidence technology (i.e., ex ante investments that increase the quantity and quality of evidence in case an accident occurs). This interaction becomes acutely important in the private international law setting, where jurisdictions are split on the question whether the burden of proof should be treated as a substantive or procedural matter. When a tort occurs in Europe, but the case is litigated in American courts, treating the burden of proof as a procedural matter preserves the complementarity of incentives created by the burden of proof and evidentiary rules. Conversely, treating the burden of proof as a substantive matter creates a mismatch in incentives created by the burden of proof and evidentiary rules.

The article is structured in three parts. The first part of the article provides a theoretical insight into the interaction of presumptions and discovery rules using an economic approach. The second part offers a short overview of the way American and European law deal with the burden of proof and evidentiary discovery. In the third part the authors discuss how dissonant incentives can arise when tort cases are adjudicated in American courts using European legal rules. The various case law of American jurisdictions are split on the question whether the burden of proof should be regarded as substantive or procedural. The authors ultimately suggest that the US should treat presumption of negligence as a procedural rule to promote efficient incentives. They conclude that such a rule counterintuitively results in better outcomes in cases of private international law tort cases where, with a proper alignment of presumptions and discoverability rules, defendants would face incentives to invest in evidence technology even when knowing that the evidence could be used against them.

Jean-Sylvestre Bergé who is a law professor at Université Côte d’Azur (CNRS GREDEG) and a former member of the Institut Universitaire de France has recently published a new open access essay titled Rethinking Flow Beyond Control – An Outreach Legal Essay (ed. DICE, coll. Confluence des droits collection, 2021, 154 p., already announced here).

This work is the continuum of his previous legal essay titled “Situations in Motion and The Law – A Pragmatic Epistemology” (Les situations en mouvement et le droit – Essai d’une épistémologie pragmatique, Dalloz, 2021, announced here) which examines a number of legal constructs in national, international or European contexts and the way they respond each time they are faced with “situations in motion”. As explained by the author, “it was an attempt at deconstruction and reconstruction with the aim of offering a series of tools that could improve our understanding of both ordinary and complex circulation phenomena”.

Since the very inspiring work of Jean-Sylvestre Bergé is about circulation across territories, following a global approach, I have interviewed Jean-Sylvestre to know more about his new essay from a private international law perspective.

 — Can you share with us the central idea of your work? 

First of all, I would like to make it clear that this book is written for a wide audience, not just lawyers, and writing it in English allows me to capture all the exchanges I had during its preparation and now to share them as widely as possible.

The book is divided in two parts.

The first part is an epistemological analysis of circulation and law through the lens of circulation. The approach is therefore different from the one traditionally chosen, particularly by private international law scholars, who study the “law of circulation” (e.g. legal aspects of movement of goods or persons). I reverse the perspective: how does the phenomenon of circulation question the constructions of law and in particular those of private international law?

For example, when we study the cross-border circulation of judgments or civil status documents, there is a disciplinary pre-understanding. The analysis is made under the rules and methods of the subject. The book proposes to “decompartmentalize” knowledge and analysis, by taking various examples in several disciplinary fields.

The second part of the book aims at characterising circulation and pushing it to a point of paroxysm: this is the figure of “rupture” that I call the “total loss of control in circulation”. I think about flows produced by all of us in the everyday life and the loss of control of the stakeholders, such as a family, a company or even the whole world. This figure of loss of control is interesting because it is a “clash of the titans” with the law. Law is dominated by the control of situations and, for my part, I work on the loss of control of flows. This is not an unknown object of study, but lawyers find it difficult to accept! Think of the nuclear risk and its legal treatment. Control is certainly not total…

 — If we take the example of cross-border circulation of civil status documents, when do we reach a situation of “loss of control”? Can private international law regulate the situation “beyond control”?

Let’s take the specific case of children born of surrogate motherhood abroad (where it is legal), and then the request for transcription of the child’s birth certificate in the country where the parents live and which prohibits this method of procreation, such as France. In this context, the core issue could be the circulation of the child. There are mechanisms that allow for the circulation of the child; consequently, this infers all subsequent constructions, including those of private international law, which deal with and regulate the circulation of civil status records of these children born of surrogate motherhood.

In France, this circulation was liberated by the “Taubira” circular concerning travel documents allowing the child to leave his/her State of birth for France, even though surrogate motherhood is prohibited in France. If we want to fight surrogate motherhood (from the point of view of its opponents), we must attack the circulation, block it, prohibit it… Can we ban these children from circulation and how can we do it? There is a “reading template” to respect, starting with the respect of the fundamental rights of the child with regard to circulation or non-circulation.

This is another way of considering this topic, renewing the usual debate on the prohibition (or not) of this mode of procreation and the cross-border “recognition” of the parent-child relationship; it is the prism of circulation beyond control, following an epistemological approach of private international law.

 — What is the main contribution of your work to private international law theory and practice?

The book invites us to revisit the legal acquis (including private international law acquis) by using the language of an epistemology of circulation and of a total loss of control, such as internationality, extraneity, mobility or relocation (see the index of the book). There are well-known concepts in private international law that could allow the issue of circulation to be brought back to the center of the proposed analysis. For example, in France, the “Matter doctrine” according to which a contract is international if it involves the interests of international trade through the ebb and flow of financial values across borders.  In my opinion, this doctrine is not sufficient to consider that the issue of the international dimension of a situation is settled. It has not provided for a conceptual framework for circulation phenomena under private international law. It can usefully be rethought through the concept of flow in the context of situations in motion.

To this end, I propose new notions, such as a distinction between cases in which the law tackles situations in motion from a “consequential perspective” (i.e. looking at its causes and effects) or “in and of itself” (i.e. from end to end). This distinction is very interesting because it allows to study mechanisms of private international law to see whether they deal with mobility from beginning to end or, on the contrary, whether they only deal with its causes or effects. It is often the latter answer that prevails because it is the easiest way for the law in general. Let us think of the expulsion of an individual from a territory: it is a question of apprehending an incoming flow. There is a legal apparatus that deals with the issue only by its causes or effects in this case.

In contrast, the law can grasp the movement in its entirety, from start to finish: this is the case in extradition conventions, in the mechanism of the European arrest warrant, or in private international law of the legal regime for the return of illegally displaced children, in the Hague Convention on international child abduction. This text puts in place a very sophisticated mechanism based on a very high level of cooperation between public authorities, which makes it possible to apprehend the circulation and return of the child with immediate effect.

In this contrasting context, the question is which path the law chooses to take in its legal treatment of circulation? This is a legal policy choice with varying levels of construction. End-to-end mechanisms are fragile, often held in check and more complex to set up and implement because they require an understanding across territories of the complete mechanisms. The treatment of the subject by its causes or effects is easier, the law knows how to “receive” or “send” a situation in motion. It is a much more unilateral rationale and, whatever one may say, unilateralism is a key-component of private international law…

 — The book also develops a “modal analysis of circulations”, distinguishing between the forms of circulations that lead to different legal regimes.

Yes, this approach is well-known in transport law: depending on the type of transport by air, sea or road, there are adapted legal regimes. We can use this rationale to analyse some mechanisms of private international law.

For example, circulation in law is consubstantial with its subject. In private international law, is the person consubstantial with its object? People should be allowed to circulate without losing their status. This question has already been examined but the analysis can be renewed. We know that we cannot let everyone circulate freely. So as soon as we deal with movement, it is because we have the right to control it; if we deal with controlling movement, it is because movement is not free. In law, we do not talk about movement when it is free; if the law talks about it, it is because it controls it. Hence my counterpoint: loss of control!

 — The book proposes another concept, which could be very useful for international lawyers, that of the “normative space of flows”. Can you tell us more about it?

I start from the idea that it is the flow that designates the perimeter of actors in a field with cross-border implications, and brings them into contact (e.g. a buyer and a seller in an international contract). This flow is composed of a set of factual and legal data. Sometimes, this can give rise to collateral damage that is difficult to grasp and that draws new, global perspectives. In this context, my theoretical proposal is to say that the flow creates its own space and that this space is capable of producing its own law.

For example, a transatlantic air flight is a normative space of flow; it should be possible to study it as the ephemeral constitution of a legal order that federates around its object the movement of the plane from Paris to Toronto, a set of rules of private law, public law, soft law, hard law, requirements on corporate social responsibility, etc… All these rules have the flow as their object. If I put the flow back at the center of the legal order, I redraw the relationships between the legal norms at the start of the flow.

There are a large number of possible examples.

To return to the example of surrogate motherhood in an international context, the circulation of the child is a normative space of flows that disrupts the classic legal framework for understanding this phenomenon.

 — In this normative space of flows, where does control lie? Is the circulation always “beyond control”?

It depends! Circulation can be under control or beyond control for the law in a normative space of flows. In the hypothesis of a plane accident, its legal treatment can be analysed through the normative space of flows but the law will have difficulty in regaining control of the situation, given the complexity of the cross-border legal treatment of the situation (i.e. compensation for material and physical damage, search for the responsibilities of the parties involved, etc.).

The problem is that there is no “meta rule” of private international law to seize one single court with a unique applicable law at the global level. In the example of an air crash, there is inevitably a scattering of the procedure with victims who are culturally different, the evidence is spread over several territories, the area of the accident may even be a-national (on the high seas), etc.

Finally, we may wonder if the law – including private international law – is capable of dealing with the phenomenon of circulation. The answer is difficult. When it circulates, the answer is positive, but when the circulation is difficult or when there is no circulation at all, we wonder. This brings us to the limits of the legal treatment of situations in motion. Why is this so? Because the flow cannot produce its own normative space.

 — What about EU private international law? In what way does the unification of PIL rules in the European area contribute to the discourse on situations in motion and its legal treatment?

The European system of private international law is a normative space of flows. This may seem obvious, but it is no small thing to say! It is a legal system that modifies the reference system of private international law. This is huge! It was originally the (national) forum and sometimes we looked a little at the lex causae, but that remained rare. And now we have a supranational construction that anchors a space that is not a territory as a point of reference. This changes everything: it is a normative space of flows like a national forum.

In this context, the book proposes that lawyers and lawmakers take the flow as the object of normative construction. This could perhaps make it possible to overcome certain failures of the law to embrace situations in motion. But there is strong resistance because each legal order wants to keep its perimeter, its control and deal with the situation alone, even if it goes beyond its borders…

In conclusion, I would like to thank Jean-Sylvestre for this fascinating analysis of situations in motion, based on the concept of flow, and this invitation for lawyers, including experts in private international law, to rethink the “applicable law” (i.e. from its conception to its implementation).