EAPIL blog

The post below was written by Bernard Haftel, who is Professor of Private International Law at the University of Sorbonne Paris Nord.

This is the third contribution to the EAPIL online symposium on the ruling of the Court of Justice in the case Hrvatske Sume d.o.o. Zagreb v BP Europa SE. The previous posts were authored by Peter Mankowski and Adrian Briggs. 

Readers are encouraged to share their views by making comments to the posts. Those wishing to submit longer contributions for publication are invited to get in touch with the managing editor of the blog, Pietro Franzina, at pietro.franzina@unicatt.it.

It is not my habit to say good things about the decisions of the Court of Justice, but for this New Year, let’s say that this will count as a good resolution.

So let’s be clear : the decision in Hrvatske Sume d.o.o. Zagreb v BP Europa SE on 9 December 2020 seems to be not only a good decision on the very issue at hand, but also indicative of a return to some general orthodoxy, or so we hope (but perhaps this is again the optimism of the beginning of the year speaking).

The solution – which consists in treating claims based on unjust enrichment as being, in principle, neither contractual nor tortious, and therefore subject only to the forum of the defendant’s domicile – seems to us to be in line with the concepts of contractual and tortious matters provided for by the Regulation, with the aims pursued by its rules and with the general logic of the Brussels “system”.

I/ On a conceptual level

On a conceptual level, the question was whether the claim for unjust enrichment corresponded to the central concepts of “matters relating to a contract” or “matters relating to tort, delict or quasi-delict”. In accordance with the Kalfélis case law[1], the Court of Justice recalls that matters relating to tort, delict or quasi-delict are subsidiary, covering “any claim which seeks to establish the liability of a defendant and which is not related to contractual matters”. The result was that it was necessary to consider the contractual characterisation beforehand. Does unjust enrichment imply a ‘legal obligation freely entered into by one person in relation to another and on which the claimant’s action is based’? (ECJ 20 janv. 2005, Engler, Case C-27/02, ECJ 14 mai 2009, Ilsinger, Case C-180/06) The Court answers in the negative. More precisely, the Court answers that this is not in principle the case. Unjust enrichment does not in principle imply a contractual basis. In the case under review, the unjust enrichment resulted from the execution of a court decision that was subsequently declared invalid. However, the Court rightly adds, quoting Advocate General Saugmandsgaard Oe, that in some cases enrichment may well have a strong link with a contract. The idea of unjust enrichment is indeed broad and can cover unjust enrichment in the strict sense, but also what french law calls répétition de l’indu (restitution of undue payment) or restitutions following the annulment of a contract. However, it is clear that when unjust enrichment is closely linked to a contract, and typically when it is the consequence of an annulment, the action is contractual in nature (The judgment cites the Profit Investment SIM judgment of 20 April 2016 (Case C 366/13) on pt. 40 in this regard).

The fact remains that unjust enrichment is not, as a matter of principle, contractual in nature outside these cases.

Does this mean that it is a tort, delict or quasi-delict ? This is to question the second criterion laid down by the Kalfélis judgment: for a non-contractual action to fall within the scope of delictual or quasidelictual matters, it must still be an action for liability. In the French version, the term “responsabilité” is used. Coming from the Latin “respondere”, it implies that a person is called upon to answer for the harmful consequences of his actions, whether intentional (delict) or unintentional (quasi-delict). The English word “liability”, coming from the French “lier”, ie bind, goes in the same direction. It involves establishing that a person is bound by his or her actions and must repair the harmful consequences. All the language versions point in the same direction: matters relating to tort, delict or quasi-delict presuppose an act that has caused damage, which the purpose of the liability action is to repair.

The Court rightly points out that none of these elements are present in the case of an action for unjust enrichment. It is almost the opposite.The act which gives rise to unjust enrichment is generally not an act of the defendant, but of the plaintiff.  In principle, it is not the defendant who is at the origin of the unjust enrichment, but the plaintiff who has enriched him. This fact, then, has not caused damage but, on the contrary, an advantage to the defendant who is then sued for unjust enrichment. Finally, and logically as a consequence of the above, the object of the action is not to call the defendant to account for his actions but to invite him to return the advantage he has received without cause.

Conceptually, and regardless of the language version, unjust enrichment is therefore logically not part of the concept of “tort, delict or quasi-delict”.

II/ On a teleological level

As we know, it is often less conceptual rigour than functional appropriateness that guides the Court of Justice, especially when it is called upon to clarify its qualifications.

The uniform interpretation praised by the Court of Justice is based not so much on conceptual rigour – which in any case would have no real basis in the absence of a sufficiently developed uniform substantive law – as on the aims and objectives of the regulation whose interpretation is at issue.

From this point of view, the solution adopted also appears satisfactory, in two respects.

Firstly, because the criterion applied to torts, delicts and quasi-delicts is simply not applicable to unjust enrichment. Under the terms of Article 5§3, now 7§2, the criterion of jurisdiction is the place where the harmful event occurred. In a case of unjust enrichment, there is no harmful event. There is no event causing damage, but only an event causing enrichment, which will usually be the act of the plaintiff. There is no damage either, but an enrichment, which is not only conceptually the opposite of damage but, moreover, is not materially locatable. Since the criterion is thus inapplicable, the corresponding qualification is for this reason alone manifestly inadequate.

Secondly, the solution here is at odds with that adopted in matters of conflict of laws. In this area, unjust enrichment, like quasi-contracts in general, is a matter for extra-contractual matters and the Rome II Regulation. The idea of consistent interpretation set out in point 7 of the preamble to the Rome I and Rome II Regulations could thus have led to unjust enrichment being placed in the field of Article 7§2. However, on the one hand, the terminology is different, the Rome II Regulation speaking of “non-contractual obligations” while the Brussels Regulations speak of “tort, delict or quasi-delict”. On the other hand, and above all, the consequences of the qualification are not the same. In matters of conflict of laws, the Rome II Regulation provides for specifically appropriate criteria (or at least specifically designed for such cases), which is not the case in matters of jurisdiction. Above all, in matters of jurisdiction, as the judgment under review illustrates, it is quite possible not to qualify at all, because of the general ground of jurisdiction constituted by the defendant’s domicile. Obviously, nothing similar is possible in matters of conflict of laws.

III/ On a systemic level

Finally, the solution also appears satisfactory on a more general level. Not only does the solution highlight the autonomy of the qualifications adopted in the field of conflict of laws and jurisdiction (CJEU 16 Jan. 2014, Kainz, Case C-45/13, CJEU, 28 July 2016, Case C-191/15, VKI c/ Amazon EU), which is an excellent point, but, above all, it restores to its rightful place the principle ground of jurisdiction : the defendant’s domicile.

The Court of Justice systematically repeats that the forum of the defendant’s domicile is the principle, to which the other grounds of jurisdiction, in particular those of Article 7, are only exceptions, which are by nature subject to strict interpretation. This is what led the Court, initially at least, to leave the actio Pauliana unqualified (ECJ, 26 march 1992, Case C-261/90, Reichert II. In a contractual context, the Court now decides that the actio Pauliana falls within the scope af article 7§1, see CJEU, 4 oct. 2018, Feniks, Case C-337/17). However, in recent years, although it has continued to repeat like a mantra that the alternative grounds of jurisdiction in Article 7 are merely derogations from the principle of the forum of the defendant’s domicile, implying a particularly close link, the Court of Justice has tended to extend the scope of these derogations, in particular to matters relating to tort, delict or quasi-delict. For instance, it has ruled that an action seeking to deny liability falls within the scope of Article 7§2 (CJEU, 25 oct. 2012, Case C-133/11, Fischer), as does an action for an injunction in which a consumer protection association sought to prohibit a trader’s use of unfair terms in contracts with consumers (ECJ, 1st oct. 2002, Case C-167/00, Henkel). However, strictly speaking, none of these actions “sought to bring into play the liability of the defendant”.

It is therefore a return to a certain orthodoxy that the judgment under review implies. A return to the idea that the defendant’s forum is a principle; a principle from which the alternative grounds of jurisdiction in Article 7 derogate only if there is a sufficiently close link between the alternative forum and the dispute, which is clearly not the case in matters of unjust enrichment. On a systemic level, the solution appears equally justified.

So how did we get a decision of the CJEU satisfactory in all respects? In Luxembourg, Santa Claus was obviously two weeks early.

 

[1] ECJ 27 Sept. 1988, Case 189/87, Kalfélis, ECR 1988, p. 5565, the decision already seemed to find that unjust enrichment was excluded from Article 5§3. The principle is regularly recalled, see recently, e.g., CJEU, 28 Jan. 2015, Kolassa, Case C-375/13, CJEU, 24 Nov. 2020, Wikingerhof, C 59/19.

The post below was written by Adrian Briggs QC, who is Professor of Private International Law Emeritus at the University of Oxford. It is the second contribution to the EAPIL online symposium, announced by an earlier post, regarding the ruling of the Court of Justice in the case of Hrvatske Šume. The previous post of Peter Mankowski can be found here. 

The arrival of the decision in C-242/20 Hrvatske Šume in December 2021 was as predictable as it was depressing. So was the omicron variant of covid-19: early December 2021 will not go down as the high point of anyone’s year. Those who have already contributed to this commentary have highlighted the technical shortcomings in the apology for a judgment, and there is no need to repeat their criticisms which are, in my view and in any rational world, unanswerable. Their careful work allows others to paint a more impressionistic picture.

The claimant in the case sustained damage: any consequence arising out of … unjust enrichment, as this is explained in the Rome II Regulation. The reason why the claim was not within Article 7(2) of the Brussels I Regulation will therefore have been that there was no harmful event when the defendant refused to repay a sum which it had no legal basis to retain. Although English is only one of twenty-odd languages, each of which is equally authentic, in what sense is that refusal, assuming it is unjustified in law, not a harmful event ? Consider the child who, sent on a shopping errand, refuses to hand over to her mother the change from the original £10 which the shopkeeper had given her. This refusal is, it seems, not to be understood as a harmful event. That will come as news to many. If while out walking I find a wallet which someone has evidently dropped, and decide to pick it up and keep it, does the claim later brought against me by the owner fall within Article 7(2) ? One would think so; and it makes no difference whether the claim is for the leather folder or the banknotes which it contains. Or take the case in which I attempt to make an electronic transfer of funds to my favourite nephew’s bank account but which, as a result of my incompetent typing, I manage to transfer to a complete stranger (it happens; don’t ask). When I discover my mistake, and the bank, in the modern way of banks, refuses point blank to do anything to help, I am left to sue the intransigent recipient for repayment. Does the claim fall within Article 7(2) ? The answer should be yes, and the proposition that the refusal to repay that which one should not have received and certainly should never have kept is not a harmful event rejected as the nonsense which it certainly is.

In what sense is the refusal to pay over not a harmful event ? The only illumination has to come from bare and conclusory paragraph 55 of the judgment, which says that ‘a claim for restitution based on unjust enrichment is based on an obligation which does not originate in a harmful event. That obligation arises irrespective of the defendant’s conduct, with the result that there is no causal link that can be established between the damage and any unlawful act or omission committed by the defendant’. The proposition that there is no causal link between the damage (which seems to be admitted) and anything the defendant did or didn’t do is apparent only to those who value belief above observation. The damage of which the claimant now complains would not have occurred if the defendant had behaved otherwise: how is that relationship not a causal one ? The Court may say that it depends on the meaning of ‘causal’, which it may do. That, however, is not elaborated by the judgment. So we must try to do it ourselves.

One possible explanation might be that the recipient does me no harm; that I harmed myself and everything which follows is an immaterial consequence of that self-harm. If that is so, it would reflect developments within the judicial exegesis of ‘damage occurring’ as this relates to Article 7(2). Maybe so, but it makes cases of transfer or property as a result of fraud or misrepresentation hard to deal with. If it is suggested that the delayed-refusal to deliver or redeliver is not a harmful event, what of the case in which the person to whom I have lent my bicycle (gratuitously, not for reward) refuses to return it to me ? He did no wrong when I handed it over and he borrowed it, but it would make one rub one’s eyes in disbelief if it were said that his refusal to return it on my demand hand it over was not a wrongful act because I had self-harmed by voluntarily parting with it in the first place.

And so one could continue unto length of days. Not everyone will see the lines as needing to be drawn in the same place as I would locate them, which is, no doubt, exactly as it should be. One should instead ask why the Court has decided to turn its back on Kalfelis and thirty-odd years of general (granted, not universal) assumption that ‘all actions which seek to establish the liability’ of a defendant does not mean what it said, in favour of some abstract and doctrinaire distinction-drawing, which serves no useful purpose at all. It will now require a judge at first instance, perhaps in the remoter regions of the Union where theories of unjust enrichment and waiver of tort are not part of daily discourse, to figure out whether a non-contractual obligation giving rise to a pleaded claim is – as a matter of general European law, rather than within his or her own legal system, as paragraph 40 makes perfectly clear – based on a harmful event. What on earth was the sense of that ?

This is the first contribution to the on-line symposium regarding the ruling of the Court of Justice in the case of Hrvatske Šume. The author is Peter Mankowski, who is Professor of Private International Law at the University of Hamburg. It is based on the author’s case note in German, forthcoming in Recht der Internationalen Wirtschaft. The publication of this version is permitted by courtesy of Deutscher Fachverlag, Frankfurt/Main. 

Article 7 of the Brussels I bis Regulation provides for special jurisdiction for contractual claims (point 1) and for tort claims (point 2).

On the other hand, it does not mention any claims for unjust enrichment (alternatively called: restitution). Does this mean that there is no special jurisdiction for claims or unjust enrichment under Article 7 of the Brussels I bis Regulation if point 5 does not apply)?

However, even if the answer was ‘yes’, this would not amount to a denial of justice for creditors in unjust enrichment since they could always avail temselves of the general jurisdiction in the State where the defendant is domiciled under Article 4 (1) of the Brussels I bis Regulation as kind of ‘residual jurisdiction’ (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, para. 80). Actor sequitur forum rei might save the last remains of the day for claimants, thus. It is ‘only’ about additional options for the claimant through special jurisdictional grounds.

The CJEU has so far avoided rendering a fundamental opinion where to place unjust enrichment (in particular in Case C-102/15, Gazdasági Versenyhivatal v Siemens AG Österreich; see, as contrast to A-G Wahl, Opinion of 7 April 2016 in Case C-102/15, paras. 54 to 75) and only occasionally decided on bits pieces (CJEU Case C-611/45, Land Berlin v Ellen Mirjam Sapir, paras. 35 et seq.; CJEU Case C-366/13, Profit Investment SIM SpA v Stefano Ossi, para. 55; CJEU Case C-185/15, Marjan Kostanjevec v F&S Leasing GmbH, paras. 34-40).

Decision of the CJEU in Hrvatske Šume

However, in Hrvatske Šume (Case C-242/20) the CJEU can no longer avoid a more principled approach. A-G Saugmandsgaard Øe had categorically denied, on detailed grounds, that an action for recovery of the property gave rise to liability for damage and therefore ruled out the possibility that it could constitute a tort for the purposes of Article 7(2) of the Brussels I bis Regulation (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, paras. 56-79). In other words, the CJEU accepts this as key argument (paras. 53-59). That is, however, taking things way to litteral. It does not fit with the concept of ‘damage’ in Article 2(1) of the Rome II Regulation, which is very broad and, in particular, must be broad enough to also cover ‘damage’ in the case of other non-contractual obligations beyond the actual law of tort (see only Mankowski, in: Ulrich Magnus v Mankowski, Rome II Regulation [2019] Article 2 Rome II Regulation note 8), further to the fact that claims for injunctive relief under tort law fall within point 2, too. Oh, and on top of it, it tends to disregard purposive interpretation and hails litteral interpretation instead (Layton, Cuniberti, EAPIL Blog 9 December 2021; Cuniberti [Comment], EAPIL Blog 9 December 2021).

In any event, actions for the recovery of ineffective contractual relationships must be characterised differently (to the same avail van Calster, gavclaw.com 9 December 2021). In their case, the assessment of Article 12(1)(d) of the Rome I Regulation is correct. They must be characterised as contractual, and special jurisdiction at the place of performance of Article 7(1) of the Brussels I bis Regulation is therefore open to them (Court of Justice, 20 April 2016, Case C-366/13, para. 55 — Profit Investment SIM SpA v Stefano Ossi; A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20,  points 48-52; Mankowski, RIW 2017, 322, 324-326; Grušić, [2019] 68 ICLQ 837, 854-859). The CJEU does not hesitate to confirm this (paras. 47-50). Profit Investement is still good law on this point. In so far as the void or ineffective contract is a consumer, insurance or individual employment contract, what is at issue would be the grounds of jurisdiction under the relevant protective regime (A-G Kokott, Opinion of 2 June 2016 in Case C-195/15, points 54 et seq.; OLG Dresden IPRspr. 2007 No 140, p. 394; LG Darmstadt ZIP 2004, 1924, 1925), in accordance with the generalisable principle underpinning Articles 12(1)(e) of the Rome I Regulation and 10(1) of the Rome II Regulation. Moreover, the rules on jurisdiction for other kinds of actions where the recovery of sums paid, i.e. the way back, should be the same as the ones governing the way forward, e.g. those of the Maintenance Regulation in the event of recovery of maintenance overpaid (Mankowski, RIW 2017, 322, 326).

The CJEU had to rule on another specific issue: Do actions for recovery based on unjust enrichment in respect of something obtained in enforcement fall within the scope of (now) Article 24(5) of the Brussels I bis Regulation and fall within exclusive jurisdiction at the place of enforcement? It could be argued that this would result in a substantive revision of enforcement and therefore a sort of extraordinary remedy exists. On the other hand, these are not formally attacks or even appeals against individual enforcement measures. Its success does not create the foreclosure measure as such, but merely revises its economic result. This is rightly not sufficient for the Court of Justice (paras. 31-36). Irrespective of the legal basis used, it is not sufficient if this unjust enrichment (para. 36), a general offence or a specific offence such as § 717(2) of the German ZPO (in more detail Mankowski, in: Rauscher, EuZPR/EuIPR, vol. 1 [5th ed. 2021] Article 24 Brussels I bis Regulation notes 220-223; Philip Schwarz, Enforcement shopping in the European judicial area [2019] pp. 227-245; see also OLG Saarbrücken EuZW 2017, 347 paras. 18-23).

Practical Consequences

The Rome II Regulation recognises unjust enrichment as a separate non-contractual obligation besides and on equal footing with tort; it consequently allocates an own and separate conflict-of-law rule to unjust enrichment in Article 10 of the Rome II Regulation. The Brussels I bis Regulation, on the other hand, makes no mention of unjust enrichment. This leads to a discrepancy (Mankowski, RIW 2017, 322 [322]; van Calster, gavclaw.com 14 September 2021). It can be inferred from the 2007 Rome II Regulation that unjust enrichment is not a tort for its purposes. It is precisely for that reason that it sets up its own system of unjust enrichment, almost in return for compensation. The more recent Brussels I bis Regulation of 2012 does not reflect this either in positive or negative terms, but requires a characterisation for every claim based on unjust enrichment, whether it can be characterised — more or less badly — as contractual or delicate for the purposes of the Brussels I bis Regulation. Its grid has therefore remained rougher and less sophisticated than that of the Rome II Regulation. ‘Non contractual’ does not automatically equate to the narrower ‘tort, delict, or quasi-delict’ of Article 7 point 2 of the Brussels I bis Regulation (A-G Saugmandsgaard Øe, Opinion of 9 September 2021 in Case C-242/20, paras. 76-79; Briggs, EAPIL Blog 10 December 2021; Pacula, conflictoflaws.net, 17 December 2021). In that regard, unjust enrichment continues to be an unfamiliar concept for the law of jurisdiction, as it has ever been since the days of the original 1968 Brussels Convention. However, this is no longer fully in line with the state of play since the Rome II Regulation at the latest. Unfortunately, the CJEU does not correct this judicially. The CJEU in effect treats creditors in unjust enrichment (beyond ineffective contracts) less favourably than creditors in tort by denying them the benefit of a special head of jurisdiction which would be encroachable on them.

The CJEU is focused on the premissae maiores, i.e. on the individual grounds of jurisdiction, the limits of which the CJEU feels bound to examine. Unfortunately, the premissa minor does not get like attention. In particular, it is not possible to see any recourse to the assistance which the doctrine on condictiones would offer (see Mankowski, RIW 2017, 322, 323 et seq.), which in turn already has its roots in Roman law — and thus in a central source of European and Community law. The term ‘interference’ or ‘infringement’, Eingriffskondiktion, or a functional equivalent, does not appear anywhere in the CJEU. In that regard, already the A-G’s Opinion scored less than possible. The A-G and, following, the CJEU celebrate a ‘chracterisation festival’, a Qualifikationsfest (van Calster, gavclaw.com 14 September 2021), without employing the full array of methodological tools. The contention that unjust enrichment could never be attributable to an event harmful in the broad sense and to the conduct of the person liable for the condiction (para. 55), is wrong for it disregards the cases of interference and infringement of another’s rights. Hence, other cases in the future might prompt more distinguishing answers (cf. Miguel de Asensio, pedromiguelasensio.blogspot.com, 13 December 2021). While not all claims in unjust enrichment automatically qualify for Article 7 point (2) of the Brussel I bis Regulation, there might be some instances that do individually (cf. Cuniberti, EAPIL Blog 9 December 2021; Miguel de Asensio, pedromiguelasensio.blogspot.com, 13 December 2021). One future day, a notion of ‘restitution in wrong’ should prevail, properly re-transferring interference and infringement into the realm of Article 7 point 2 of the Brussels I bis Regulation even de regulatione lata (Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 245). Predictability would not be overly impinged by that (to calm the concerns raised by (cf. Sisák, EAPIL Blog 10 December 2021).

However, neither the unconvincing reasoning nor the conclusion raising severe doubts for cases of interference or infringement (see Mankowski, RIW 2017, 322, 326 et seq.) can erase the fact that the CJEU establishes a seemingly clear orientation mark for practical purposes (to the same avail Miguel de Asensio, pedromiguelasensio.blogspot.com 13 December 2021). It would be ill-advised to implement any specific restriction on actions for recovery in natura. This is because such recovery is the primary legal consequence of any claim for enrichment, and a subsidiary shift to compensation for value must not have the effect of changing the jurisdiction of the court, as the primary legal consequence is also the ground for the subsidiary one. Hrvatske Šume conveys the practical message, for the time being: Beyond the realm of ineffective contracts, claims in unjust enrichment can avail them only of general jurisdiction and the special grounds of jurisdiction derived from Article 7 point 5; 8 points 1 and 3 of the Brussels I bis Regulation, but not of the special grounds of jurisdiction derived from Article 7 points 1 and 2 Brussels I bis Regulation. The Kalfelis formula (Athanassios Kalfelis v Bankhaus Schröder Münchmeyer Hengst & Cie) has always been deceptive, and there have always been tertia to contract and tort even in liability cases. Liability is not a binary world. Any perceived suggestion that Article 7 (2) Brussels I bis Regulation, or previously Article 5 point 3 Brussels Convention or Brussels I Regulation, was a residual rule within the realm of special jurisdiction (cf. Cuniberti, EAPIL Blog 9 December 2021; Okoli, EAPIL Blog 9 December 2021) has always been wrong. Sloppy and inaccurate drafting must prompt such important consequences.

Choice of court agreements pursuant to Article 25 of the Brussels I bis Regulation remain possible, ex ante as well as post eventum (Mankowski, RIW 2017, 322, 330). However, ex ante choice of court agreements (also) on claims for enrichment are unlikely to exist outside a contractual environment; they score their highest probality in framework agreements covering all legal relationships between the respective parties.

The reform agenda of the European legislature for a future Brussels Ib Regulation ought to reflect whether unjust enrichment should be blessed with a separate rule on special jurisdiction (Grušić, [2019] 68 ICLQ 837, 854-859; Mankowski, in: Ulrich Magnus/Mankowski, Brussels Ibis Regulation [2nd ed. 2022] Article 7 Brussels Ibis Regulation note 63a). The same applies to claims in negotiorum gestio (see in detail Dornis, in: Mankowski [ed.], Research Handbook on the Brussels Ibis Regulation [2020], p. 64). If these categories of non contractual obligations, well within the realm of the Rome II Regulation, were expressly addressed this would placate the principal questions.

On 9 December 2021, the CJEU ruled in HRVATSKE ŠUME d.o.o., Zagreb v. BP EUROPA SE (Case C-242/20) that the distinction between contracts and torts under Article 7 of the Brussels I bis Regulation is not exclusive, and that claims for unjust enrichment need not be characterised either as contractual or tortious (see the comments by Geert van Calster here and Krzysztof Pacula here).

The Court had established until this case a clear bright line rule. Cases which did not fall within the jurisdictional rule for contracts (Article 7(1)) fell within the jurisdictional rule for torts (Article 7(2)). The ‘tort’ category was thus a residual category which included all liability actions which were not contractual in nature.

Hrvatske Sume changes this, and may have far reaching consequences.

First, as Article 7(2) only applies to ‘torts’ as such, it will now be necessary to positively define the concept of tort in the meaning of that provision. Will it include strict liability rules? Will it include torts which do not require the existence of a damage? Will it include torts which do not strictly require causation between the act of the defendant and the damage suffered by the victim?

Secondly, it will be necessary to identify those concepts which must be distinguished from torts and contracts. One of them is unjust enrichment. What are the others? Other quasi-contracts such as negotiorum gestio? Certain statutory rights? Certain other remedies?

Starting from tomorrow morning, the EAPIL blog will host an online symposium to discuss the above issues. Peter Mankowski will kick off the discussion. More contributions are scheduled for publication later on Monday and on Tuesday.

Readers are encouraged to contribute to the discussion by commenting on the posts. Those wishing to submit longer analyses are invited to do so by writing an e-mail to Pietro Franzina (pietro.franzina@unicatt.it).

Daria Levina (European University Institute) posted on SSRN a paper titled The Law Governing Enforceability of Forum Selection Agreements. The paper was completed to fulfill the requirements for a master of laws degree at Harvard Law School and received the 2018 Addison Brown Prize in conflict of laws.

The abstract reads as follows:

The paper examines approaches to determining the law governing forum selection agreements (“FSA”) in the US, the EU, Germany, and on international level (on example of the 2005 Hague Convention on Choice of Court Agreements). It analyses the historical treatment of FSA, as well as its legal features, and shows how they influenced the approaches adopted by the above jurisdictions. It looks at all potentially applicable laws (lex fori, lex causae, lex fori prorogati) and discusses the arguments in favor and against each of them, testing them against the principles of predictability, procedural economy, legal certainty, and regulatory interests of states. The paper adopts comparative approach in order to familiarize with the solutions adopted by different legal systems draw conclusions which might benefit them.

On 17 November 2021, the French Supreme Court for private and criminal matters (Cour de cassation) issued an interesting decision in the field of family law (Cass. Civ. 1re, 17 November 2021, n°20-19.420). The Court held that a bigamous marriage is not automatically void under French law when the spouses are foreign nationals. Indeed, the French choice of law rule on the validity of marriage provides for the application of the law of the spouses’ common nationality (article 202-1 of the Civil Code). Therefore, the lower court is required to designate on its own motion the applicable law to the marriage to assess its validity.

Facts and Issue at Stake

A couple, both Libyan nationals, married in 2000 in Libya. On November 2017, the wife filed a petition for divorce before French court. The lower court ruled that the request for divorce was inadmissible, because the husband was already married in Libya before this marriage. French law prohibits bigamy pursuant to article 147 of the Civil Code. As a result, the lower court had held that the second marriage “has no legal existence” and thus cannot be dissolved by a French court.

The wife appealed to the French Supreme Court based on a traditional conflict-of-law reasoning. She argued that the lower court should have checked whether the personal law of the spouses (as applicable law to marriage pursuant to article 202-1, op. cit.) did authorise bigamy. If so, the second marriage, celebrated abroad, could produce effects in France and thus be dissolved by a French court.

Legal Background

Under French domestic family law, article 147 of the French Civil Code lays down the principle of monogamy. French criminal law punishes a spouse guilty of bigamy (article 433-20 of the Penal Code). At the same time, comparative law reveals that some foreign legal systems allow polygamy. Even if this institution is in sharp contrasts to Western socio-cultural values, the global mobility of persons requires to pay attention to a possible acceptance of such marriages in the French forum.

Remarkably, the French legal system has traditionally adopted a nuanced position, depending on the proximity that the situation of bigamy or polygamy has with the forum. In France, no bigamous or, a fortiori, polygamous marriage can be validly celebrated, even if the second marriage is concluded between the same persons, already married abroad (Civ. 1re, 3 February 2004, n°00-19.838). The situation is different when the bigamy is not “created” in France, but was legally established abroad. The second marriage may then, in certain circumstances, be recognised in France and produce certain effects (e.g. in the field of social security rights or succession). In these latter circumstances, two hypotheses must be distinguished.

Either the national law of one of the spouses (pursuant to article 202-1 of the Civil Code) does not allow bigamy. French law will consider this prohibition as constituting an absolute impediment to marriage prevailing over the more liberal content of the national law of the other spouse. French authorities will therefore refuse to give effect to this marriage in France. For instance, a second marriage, validly celebrated abroad, of a foreign spouse whose personal status admits polygamy, with a French woman, cannot be recognised in France (Civ. 1re, 28 January 2002, n°00-15789).

Or the personal status of the spouses, i.e. their common or own national law, authorises polygamy. The French court may, to a certain extent, recognise the second marriage (and make it produce effects) by attenuating the “eviction” impact of the French fundamental values (effet atténué de l’ordre public). This has been held by the French Supreme Court on several occasions (Civ. 1re, 28 January 1958, Chemouni and more recently Civ. 2e, 14 February 2007, n°05-21.816).

Solution and Legal Reasoning

In the present case, the lower court ruled on a domestic law basis. The case, however, was international and required a conflict-of-law analysis since the parties may not dispose of their rights. It is worth recalling that French PIL does not provide for a systematic mandatory application of choice of law rules. But French courts are required to apply conflict-of-law rules in non-patrimonial matters, such as personal status issues, since the parties may not dispose of their rights. They even have to determine the applicable law ex officio (comp. recently on the context of EU PIL, Civ. 1re, 26 May 2021, n°19-15.102, commented on the blog here and here).

In the absence of French written rules of PIL, the French Supreme Court has traditionally based this solution on article 3 of the French Civil Code. It was the only “international” provision in the Code Napoleon at the time of the judicial development of PIL rules in the French legal system. Unfortunately, it may be confusing for the reader, since article 3 makes no mention whatsoever of the court’s role in conflict-of-law matters. This is a strong point in favour of a (forthcoming?) French PIL codification.

This is the ground on which the French Supreme Court annulled the judgment of the Court of appeal in this case: in the field of marriage, conflict-of-law rules are mandatory. The lower court should have verified, in accordance with the personal law of the spouses pursuant to article 202-1 of the Civil Code, whether the foreign bigamous marriage was valid (so that, in the affirmative, it could be dissolved). At that stage of the reasonning, the French prohibition of bigamy pursuant to article 147 of the Civil Code did not matter.

Assessment

We could maybe regret that the Supreme Court does not provide for the full PIL reasoning in order to be more informative. It will be indeed for the lower court to proceed to the second step of the choice of law analysis. The validity of the foreign marriage could be denied, despite its validity under the applicable law, on the basis of public policy. If the content of  foreign law infringes the fundamental values of French society, a French court may displace it and apply French law instead.

There is, however, a limit mentioned above: in order to protect rights acquired abroad and the permanence of the status of individuals across borders, the effect of public policy may be limited (effet atténué de l’ordre public). This has traditionally been the case in the field of polygamy when it is allowed under the personal status of the spouses (see above). The lower court should thus exclude the eviction of the foreign law despite its sharp cultural difference with French substantive family law and consider the foreign marriage as valid.

In this case, the bigamous marriage should be recognised so that the second wife is allowed to divorce. In other words, as a matter of policy, the private interests of the second wife should prevail. Whether this view would be shared by all Member States in the implementation of the EU PIL instruments on family matters is another matter.

The fifth edition of the treatise of Horatia Muir Watt (Sciences Po Law School) and Dominique Bureau (Paris II University) on French private international law has recently been published.

The treatise, which is one of the leading texts on private international law in France, is divided into two volumes (over 800 p. each). The first volume focuses on the general theory of private international law, and distinguishes between conflits de juridictions (jurisdiction and judgments), conflits de lois (choice of law) and conflits d’autorités (international regime of the action of non judicial authorities and recognition of the acts that they issue).

The second volume is concerned with special rules applicable in the different fields of private law (persons, property, family, obligations, businesses). It ends with a long conclusion which discusses two innovative topics. The first is an attempt to build a general theory of special European law on jurisdiction, judgments and choice of law. The second is an enquiry into whether new forces will lead to a complete reorganisation of the field: environment, digitalisation and the impact of new forms of organisation of business on traditional conceptual categories.

The latest issue of the IPRax (Praxis des Internationalen Privat- und Verfahrensrechts) has been published.

It contains a number of insightful articles and case comments, whose abstracts are provided below.

 

E.-M. Kieninger, Climate Change Litigation and Private International Law

The recent Shell ruling by the District Court of The Hague raises the question whether Carbon Majors could also be sued outside the state of their corporate home and which law would be applicable to claims for damages or injunctive relief. In particular, the article discusses possible restrictions of the right to choose between the law of the state in which the damage occurred and the law of the state in which the event giving rise to the damage took place (Art. 7 No. 2 Brussels Ia Regulation and Art. 7 Rome II Regulation). It also considers the effects of plant permits and the role that emissions trading should play under Art. 17 Rome II Regulation.

 

S. Arnold, Artificial intelligence and party autonomy – legal capacity and capacity for choice of law in private international law

Artificial intelligence is already fundamentally shaping our lives. It also presents challenges for private international law. This essay aims to advance the debate about these challenges. The regulative advantages of party autonomy, i.e. efficiency, legal certainty and conflict of laws justice, can be productive in choice of law contracts involving artificial intelligence. In the case of merely automated systems, problems are relatively limited: the declarations of such systems can simply be attributed to their users. Existence, validity or voidability of choice of law clauses are determined by the chosen law in accordance with Art. 3(5), 10(1) Rome I Regulation. If, however, the choice of law is the result of an artificial “black box” decision, tricky problems arise: The attribution to the persons behind the machines might reach its limit, for such artificial decisions can neither be predicted nor explained causally in retrospect. This problem can be solved in different ways by the substantive law. Clearly, national contract laws will differ substantially in their solutions. Thus, it becomes a vital task for private international law to determine the law that is decisive for the question of attribution. According to one thesis of this article, two sub-questions arise: First, the question of legal capacity for artificial intelligence and second, its capacity for choice of law. The article discusses possible connecting factors for both sub-questions de lege lata and de lege ferenda. Furthermore, it considers the role of ordre public in the context of artificial choice of law decisions. The article argues that the ordre public is not necessarily violated if the applicable law answers the essential sub-questions (legal capacity and capacity for choice of law) differently than German law.

 

M. Sonnentag and J. Haselbeck, Divorce without the involvement of a court in Member States of the EU and the Brussels IIbis- and the Rome III-Regulation

In recent years some Member States of the European Union such as Italy, Spain, France, and Greece introduced the possibility of a divorce without the involvement of a court. The following article discusses the questions whether such divorces can be recognised according to Art. 21 Regulation No 2201/2003 (Brussels-IIbis), Art. 30 Regulation No 2019/1111 (Brussels-IIbis recast) and if they fall within the scope of the Regulation No 1259/2010 (Rome III).

 

W. Hau, Personal involvement as a prerequisite for European tort jurisdiction at the centre of the plaintiff’s interests

The case Mittelbayerischer Verlag KG v. SM gave the ECJ the opportunity to further develop its case law on the European forum delicti under Art. 7 No. 2 Brussels Ibis Regulation for actions for alleged infringements of personality rights on the internet. The starting point was the publication of an article on the homepage of a Bavarian newspaper, which misleadingly referred to “Polish extermination camps” (instead of “German extermination camps in occupied Poland”). Strangely enough, Polish law entitles every Polish citizen in such a case to invoke the “good reputation of Poland” as if it were his or her personal right. The ECJ draws a line here by requiring, as a precondition of Art. 7 No. 2, that the publication contains objective and verifiable elements which make it possible to individually identify, directly or indirectly, the person who wants to bring proceedings at the place of his or her centre of interest. While this approach allows for an appropriate solution to the case at hand, it leaves several follow-up questions open.

 

A. Hemler, Which point in time is relevant regarding the selection of a foreign forum by non-merchants according to § 38(2) German Code of Civil Procedure (ZPO)?

38(2) German Code of Civil Procedure (ZPO) permits the selection of a foreign forum only if at least one party does not have a place of general jurisdiction in Germany. In the case discussed, the defendant had general jurisdiction in Germany only when the claim was filed. However, there was no general jurisdiction in Germany when the choice of forum clause was agreed upon. The Landgericht (district court) Frankfurt a.M. therefore had to decide on the relevant point in time regarding § 38(2) ZPO. Given the systematic structure of § 38 ZPO and the law’s purpose of advancing international legal relations, the court argued in favour of the point in time in which the choice of forum clause was agreed upon. The author of the paper rejects the court’s view: He argues that the systematic concerns are less stringent on closer inspection. More important, however, is the fact that the law also calls for the protection of non-merchants. This can only be sufficiently achieved if the point in time in which the claim was filed is regarded as the crucial one.

 

D. Henrich, News on private divorces in and outside the EU

In two decisions the German Federal Court of Justice (“BGH”) had to deal with the recognition of private divorces (divorces without involvement of a state authority). In the first case (XII ZB 158/18) a couple of both Syrian and German nationality had been divorced in Syria by repudiation. While recognition of foreign public divorces (divorces by a state court or other state authority) is a question of procedure, private divorces are recognized if they are effective according to the applicable law, here the Rules of the Rome III Regulation (Article 17(1) Introductory Act to the Civil Code). Because the couple had no common ordinary residence, the Court applied Article 8 lit. c Rome III Regulation. German Law dominating, the Court denied recognition.

In the second case (XII ZB 187/20) the BGH made a reference for a preliminary ruling of the European Court of Justice regarding the recognition of a divorce in Italy in the register office in front of the registrar. The BGH follows the opinion that in such cases it is the consent of the parties that dissolves the marriage, the divorce being a private one. The BGH questions whether in spite of that the divorce could be recognized according to Sec. 21 Council Regulation (EC) No. 2201/2003 or, if not, according to Sec. 46 of the Council Regulation.

 

C. Budzikiewicz, On the classification of dowry agreements

Agreements on the payment of a bride’s dowry are a recurring topic in German courts. It usually becomes the subject of a legal dispute in connection with or after a divorce. This was also the case in the decision to be discussed here, in which the applicant demands that her divorced husband pay for the costs of a pilgrimage to Mecca. Since the case has an international connection due to the husband’s Libyan nationality, the Federal Supreme Court first addresses the controversial question of the characterization of dowry. However, since all connection options lead to German law in the present case, the Court ultimately refrains from deciding the question of characterization. It explains that the agreement on the payment of dowry is to be classified under German law as a sui generis family law contract, which requires notarization in order to be effective. The article critically examines the decision. In doing so, it addresses both the question of characterization of dowry and the need for form of agreements on the payment of dowry under German law.

 

E. Jayme and G. Liberati Buccianti, Private Divorces under Italian Law: Conflict of Laws

Divorce, under German law, is only permitted by a decision of a judge, even in cases where a foreign law is applicable which would allow a private divorce based on the agreement of the spouses. Italy, however, has introduced, in 2014, a divorce by private agreement in two procedures: the agreement of the spouses can be submitted to the public prosecutor who, in case he agrees, will send it to the civil registrar, or, secondly, by a direct application of the spouses to the civil registrar of the place where the marriage had been registered.

The article discusses the problems of private international law and international civil procedure, particularly in cases where Italian spouses living in Germany intend to reach a private divorce in Italy. The discussion includes same-sex-marriages of Italian spouses concluded in Germany which are permitted under German law, but not under Italian law, according to which only a “civil union” is possible. The Italian legislator has enacted (2017) a statute according to which the same-sex-marriage concluded by Italian citizens abroad will have the effects of a civil union under Italian law. The question arises of whether the Italian rules on terminating a civil union will have an effect on the spouses marriage concluded in Germany.

The article also discusses the validity of private divorces obtained in Third States which are not members of the European Union, particularly with regard to religious divorces by talaq expressed by the husband, and the problem whether such divorces are compatible with the principles of public policy. The authors mention also the specific problems of Italian law with regard to religious (catholic) marriages concluded and registered in Italy, where a divorce by Italian law is possible which, however, may be in conflict with a nullity judgment of the catholic church.

 

G. Mäsch and C. Wittebol, None of Our Concern? – A Group of Companies‘ Cross-border Environmental Liability Before Dutch Courts

The issue of cross-border corporate responsibility has been in the limelight of legal debate for some time. In its decision of 29 January 2021, the Court of Appeal of The Hague (partially) granted a liability claim against the parent company Royal Dutch Shell plc with central administration in The Hague for environmental damages caused by its Nigerian subsidiary. In particular, the Dutch court had to address the much-discussed question to what extent domestic parent companies are liable before domestic courts for environmental damage committed by their subsidiaries abroad, and whether domestic courts have international jurisdiction over the subsidiary. With this precedent, the number of cross-border human rights and environmental claims is likely to rise in the near future.

 

H. Jacobs, Article 4(2) and (3) Rome II Regulation in a case involving multiple potential tortfeasors

In Owen v Galgey, the High Court of England and Wales engaged in a choice of law analysis in a case involving multiple potential tortfeasors. The claimant, a British citizen habitually resident in England, was injured in France when he fell into an empty swimming pool. In the proceedings before the High Court, he claimed damages from, inter alia, the owner of the holiday home and his wife, both British citizens habitually resident in England, and from a French contractor who was carrying out renovation works on the swimming pool at the material time. The judgment is concerned with the applicability of Article 4(2) Rome II Regulation in multi-party tort cases and the operation of the escape clause in Article 4(3) Rome II Regulation. While the High Court’s view that Article 4(2) requires a separate consideration of each pair of claimants and defendants is convincing, it is submitted that the court should have given greater weight to the parties’ common habitual residence when applying Article 4(3).

 

The table of contents of the issue is available here.

Antonio Leandro (University of Bari) has posted Asset Tracing and Recovery in European Cross-border Insolvency Proceedings on SSRN.

Tracing and recovering assets amount to crucial means to preserve the estate in insolvency proceedings. The proceedings’ outcome may depend on a successful liquidation, which, in turn, can succeed insofar as the concerned assets are traced and recovered smoothly. Besides, insolvency-related disputes, such as the avoidance disputes, may benefit from instruments that help find debtor’ assets or recover payments.

Cross-border insolvency proceedings exhibit peculiar features in this respect because of the debtor’s assets and affairs being in touch with different States. Multiple laws and jurisdictions, with differing or even divergent underlying legal traditions, may in fact be concerned with tracing and recovery.

Moreover, tracing and recovery may affect individuals (e.g., debtors, directors, shareholders, secured creditors, third parties) whose interests clash with those of insolvency proceedings, especially that of satisfying creditors through the proceeds of liquidated assets. If such persons have connections (e.g., citizenship, seat, habitual residence, domicile, as well as affairs, rights, obligations, etc.) with different States, including other States than that in which the assets are located, the cross-border context gets wider.

Against this backdrop, intermingled problems of private international law arise, including assessing the courts having jurisdiction to issue tracing or recovering measures, the authorities that may apply and take action, the law governing the measures and the enforcement thereof, the recognition of foreign tools aimed at detecting and recovering the assets. All these problems lie on a terrain where issues of characterization, state sovereignty and cooperation between foreign authorities are interwoven.
The paper intends to explain how to melt this skein within the EU civil judicial space.

After the Christmas break the Court of Justice takes up again its public activity. Regarding judicial cooperation on civil matters, the first event in January 2022 is the hearing in case C-18/21, Uniqa Versicherungen, scheduled for Wednesday 19.

The request for a preliminary ruling comes from the Oberster Gerichtshof (Austria). It focuses on the impact of COVID-19 on procedural periods in civil proceedings in the context of Regulation (EC) No 1896/2006 creating a European order for payment procedure (here the consolidated text).

In the case at hand, the District Court for Commercial Matters of Vienna had issued a European order for payment on 6 March 2020, which was served on the defendant, a resident in the Federal Republic of Germany, on 4 April 2020. The latter lodged a statement of opposition thereto in a written submission posted on 18 May 2020. The court of first instance rejected the opposition on the ground that the objection had not been filed within the 30-day period foreseen in Article 16(2) of Regulation (EC) No 1896/2006.

The Commercial Court of Vienna, ruling on the appeal on the merits, set that order aside holding that the period for lodging a statement of opposition under Article 16(2) had been interrupted pursuant to the Federal Law on accompanying measures for COVID-19 in the administration of justice. According to that law, all procedural periods in judicial proceedings that had started to run on 22 March 2020 or thereafter, up until the end of 30 April 2020, are to be interrupted and are to begin to run anew on 1 May 2020. The applicant’s appeal on a point of law is directed against that decision, and seeks to have the order of the court of first instance restored.

The Austrian Supreme Court has referred the following question to the Court of justice:

Are Articles 20 and 26 of Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure to be interpreted as meaning that those provisions preclude an interruption of the 30-day period for lodging a statement of opposition to a European order for payment, as provided for in Article 16(2) of that regulation, by Paragraph 1(1) of the Austrian Bundesgesetz betreffend Begleitmaßnahmen zu COVID-19 in der Justiz (Federal Law on accompanying measures for COVID-19 in the administration of justice), pursuant to which all procedural periods in proceedings in civil cases for which the event triggering the period occurs after 21 March 2020 or which have not yet expired by that date are to be interrupted until the end of 30 April 2020 and are to begin to run anew from 1 May 2020?

K. Jürimäe is the reporting judge in a chamber composed, in addition, by N. Jääskinen, M. Safjan, N. Piçarra and M. Gavalec. Advocate General A. Collins will announce the date of his opinion after the hearing. For the record: the Court has interpreted Articles 16, 20 and 26 of the Regulation already several times, see case C-324/12, joined cases C‑119/13 and C‑120/13, C-94/14, C-245/14, C-21/17.

Advocate General Szpunar‘s Opinion in case C-617/20, T.N. and N.N., will be published the next day (that is, on Thursday 20). The questions have been referred by the Hanseatisches Oberlandesgericht in Bremen (Germany), in the context of an intestate succession, and relate to the interpretation of Articles 13 and 28 of the EU Succession Regulation:

(1) Does a declaration concerning the waiver of succession by an heir before the court of a Member State that has jurisdiction for the place of his or her habitual residence, which complies with the formal requirements applicable there, replace the declaration concerning the waiver of succession to be made before the court of another Member State that has jurisdiction to rule on the succession, in such a way that when that declaration is made, it is deemed to have been validly made (substitution)?

(2) If Question 1 is to be answered in the negative:

In addition to making a declaration before the court that has jurisdiction for the place of habitual residence of the party waiving succession which complies with all formal requirements, is it necessary, in order for the declaration concerning the waiver of succession to be valid, that the latter inform the court that has jurisdiction to rule on the succession that the declaration concerning the waiver of succession has been made?

(3) If Question 1 is to be answered in the negative and Question 2 in the affirmative:

a. Is it necessary that the court that has jurisdiction to rule on the succession be addressed in the official language of the location of that court in order for the declaration concerning the waiver of succession to be valid and, in particular, in order to comply with the time limits applicable for making such declarations before that court?

b. Is it necessary that the court that has jurisdiction to rule on the succession receive the original documents drawn up in relation to the waiver by the court that has jurisdiction for the place of habitual residence of the party waiving succession and a translation thereof in order for the declaration concerning the waiver of succession to be valid and, in particular, in order to comply with the time limits applicable for making such declarations before the court that has jurisdiction to rule on the succession?

The judgment will be handed down by judges E. Regan, I. Jarukaitis, M. Ilešič (reporting), D. Gratsias, and Z. Csehi.

Finally, another hearing of interest will be taking place at the very end of the month, on Monday 31. C-700/20, London Steam-Ship Owners’ Mutual Insurance Association, is a Grand Chamber case (K. Lenaerts, L. Bay Larsen, K. Jürimäe, C. Lycourgos, E. Regan, I. Jarukaitis, N. Jääskinen, M. Ilešič, J.C. Bonichot, A. Kumin, L. Arastey Sahún, M. Gavalec, Z. Csehi, O. Spineau-Matei, and M. Safjan as reporting judge), to be decided with the benefit of Advocate General A. Collin’s opinion. The request, from the High Court – Business and Property Courts of England and Wales Commercial Court, was lodged on 22 December 2020. The questions referred arose in the context of an appeal by The London Steam-Ship Owners’ Mutual Insurance Association Limited (the “Club”), pursuant to Article 43 of Regulation (EC) No 44/2001, against a registration order made by the Queen’s Bench Division of the High Court of Justice of England and Wales pursuant to Article 33 of the same regulation. The registered judgment that is the subject of the registration order is an auto de ejecución (execution order) of the Provincial Court of La Coruña, Spain, delivered following the proceedings related to the sinking of the Prestige (the “Vessel”) at the coast of Spain in November 2002. The Vessel was carrying 70,000 MT of fuel oil at the time she sank causing significant pollution damage to the Spanish and French coastlines. The execution order declares the Club liable in respect of 265 claimants, including the Kingdom of Spain in the sum of € 2.355 billion. Spain applied to register the Spanish judgment against the Club in England. The Club was the Protection & Indemnity (“P&I”) insurer of the Vessel and its owners (the “Owners”) at the time the Vessel sank, pursuant to a contract of insurance where an arbitration clause was included.

The background of the dispute can be summarized as follows:

In late 2002, criminal proceedings relating to the loss of the Vessel were commenced in Spain; civil claims were brought in those proceeding. On 13 November 2013, the Provincial Court of La Coruña handed down a judgment which was confirmed after first and second appeals. On 15 November 2017, the Provincial Court delivered a judgment on quantum concluding that the Club (and others) was liable to over 200 separate parties, including the Kingdom of Spain, in sums in excess of € 1.6 billion as a result of the casualty, subject in the case of the Club to the global US$ 1 billion limit of liability. On 1 March 2019, the Provincial Court issued an execution order (the Spanish judgment referred to above) setting out the amounts that each of the claimants were entitled to enforce against the respective defendants.

In January 2012, the Club had commenced London arbitration proceedings seeking declarations that, pursuant to the arbitration agreement in the contract of insurance, Spain was bound to pursue its claims under Article 117 of the Spanish Penal Code in London arbitration. The arbitral tribunal found that, as a matter of English law, although Spain was not a contractual party to the arbitration agreement in the Contract of Insurance, according to English equitable principles Spain could not be a “beneficiary” of the Owners’ contractual rights without respecting the “burden” of the arbitration agreement. The award declared as well that the Club was not liable to Spain.

In March 2013, the Club applied to the Commercial Court of the High Court of Justice of England and Wales for “leave” (permission) to enforce the Award in the jurisdiction. The application was granted on October 2013.

On 25 March 2019, Spain applied to the High Court of Justice in England and Wales for the registration of the Spanish judgment as a judgment of the High Court pursuant to Article 33 of Regulation Brussels I. The application was successful. One month later the Club lodged an appeal under Article 43 of Regulation No. 44/2001 against the Registration Order based on Article 34(3) and Article 34(4) of the same instrument.

In this context, the High Court is referring the following questions to the Court of Justice:

(1) Given the nature of the issues which the national court is required to determine in deciding whether to enter judgment in the terms of an award under Section 66 of the Arbitration Act 1996, is a judgment granted pursuant to that provision capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of EC Regulation No 44/2001?

(2) Given that a judgment entered in the terms of an award, such as a judgment under Section 66 of the Arbitration Act 1996, is a judgment falling outside the material scope of Regulation No 44/2001 by reason of the Article l(2)(d) arbitration exception, is such a judgment capable of constituting a relevant “judgment” of the Member State in which recognition is sought for the purposes of Article 34(3) of the Regulation?

(3) On the hypothesis that Article 34(3) of Regulation No 44/2001 does not apply, if recognition and enforcement of a judgment of another Member State would be contrary to domestic public policy on the grounds that it would violate the principle of res judicata by reason of a prior domestic arbitration award or a prior judgment entered in the terms of the award granted by the court of the Member State in which recognition is sought, is it permissible to rely on Article 34(1) of Regulation No 44/2001 as a ground of refusing recognition or enforcement or do Articles 34(3) and (4) of the Regulation provide the exhaustive grounds by which res judicata and/or irreconcilability can prevent recognition and enforcement of a Regulation judgment?

It’s been another busy year for the EAPIL blog. The 310 posts we have published in 2021 have attracted about 180.000 visits and some 190 comments.

Interactions on social media have been on the rise, too. We witnessed an increase in the number of followers on LinkedIn (they are more than 900 now), and in the intensity of their reactions. Meanwhile, the number of those following our Twitter account (@eapilorg) has reached 400: we are glad to see that our tweets are often retweeted and quote tweeted. Thank you!

Unsurprisingly, the impact of Brexit on existing instruments in the field of private international law ranked among the key topics of the year. Actually, one post of out ten, among those published in 2021 on the EAPIL blog, referred to Brexit in one way or another.

The case law of the Court of Justice relating to judicial cooperation in civil matters also attracted a consistent flow of visits, and so did Marta Requejo’s monthly posts on the upcoming Court’s judgments and the scheduled conclusions of the AGs.

The developments in domestic case law also proved to be of particular interest to our readers. Gilles Cuniberti’s post on a ruling of the French Supreme Court redefining territoriality of enforcement was the single most commented post of the year, with Gilles’ later post on the judgment of the UK Supreme Court in FS Cairo v Brownlie, on tort jurisdiction, ranking second in terms of comments.

Here are the blog’s five posts of the year, based on the number of visits received:

1. Brexit and the Brussels Convention: It’s All Over Now, Baby Blue? by Matthias Lehmann, published on 12 February 2021, part of an on-line symposium on the Fate of the 1968 Brussels Convention which attracted contributions from a number of scholars, including guest posts by Andrew Dickinson, Serena Forlati and Alex Layton
2. French Parliament Adopts Mandatory Law to Enforce Reserved Share in Succession Matters, a guest post by Christelle Chalas, published on 17 August 2021
3. Swiss Court Refuses Post-Brexit Application of the Lugano Convention – Even Good Cases Can Make Bad (Case) Law, a guest post by Rodrigo Rodriguez, published on 10 March 2021
4. Is the 2005 Hague Choice-of-Court Convention Really a Threat to Justice and Fair Play? A Reply to Gary Born, a guest post by Trevor Hartley, published on 30 June 2021
5. The Principle of Mutual Trust in EU law in the Face of a Crisis of Values, a guest post by Cecilia Rizcallah, published on 22 February 2021

The above ranking tells one thing the editors are well aware of: guest posts represent a crucial contribution to this blog.

So, here’s a message to both old and new guest bloggers out there: your submissions are welcome in 2022 as they have been in the past year. So don’t hesitate to get in touch with us: we are eager to read you!

With this post, the EAPIL blog takes a short Winter break. Blogging will resume on 3 January 2022.

All the best for the new year!

On 20 December 2021, the Supreme Court of the UK delivered its judgment in Maduro Board of the Central Bank of Venezuela v Guaidó Board of the Central Bank of Venezuela ([2021] UKSC 57).

The case was concerned with the conflicting instructions over reserves held in England issued by the boards of the Central Bank of Venezuela appointed respectively by Mr Maduro, who was reelected president of Venezuela in 2018, and by Mr Guaido, who is the president of the National Assembly of the country and claims to be its interim president because the 2018 elections were flawed.

The Supreme Court had to decide whether the UK Government has recognised Interim President Guaido as Head of State of Venezuela and, if so, whether any challenge to the validity of Mr Guaido’s appointments to the Board of the Central Bank of Venezuela is justiciable in an English court.

From the Press Summary issued by the Court:

Background

In May 2018, a Presidential election took place in Venezuela, which the incumbent, Mr Nicolás Maduro Moros, claimed to have won. Her Majesty’s Government in the United Kingdom (“HMG”) considered that this election was deeply flawed. On 15 January 2019, the Venezuelan National Assembly announced that Mr Juan Gerardo Guaidó Márquez was the interim President of Venezuela. On 4 February 2019, the then UK Foreign Secretary declared that the United Kingdom recognises Mr Guaidó “as the constitutional interim President of Venezuela, until credible presidential elections can be held”. That statement was reiterated by HMG in a subsequent letter and in statements made to the Court on behalf of the Foreign Secretary in these proceedings.

The Maduro Board and the Guaidó Board both claim to act on behalf of the Central Bank of Venezuela (the “BCV”). The Maduro Board claims to have been appointed to represent the BCV by Mr Maduro as President of Venezuela. The Guaidó Board claims to be an ad hoc board of the BCV, appointed by Mr Guaidó as interim President of Venezuela under a ‘transition statute’ passed by the Venezuelan National Assembly. The Venezuelan Supreme Tribunal of Justice (the “STJ”) has issued several judgments holding that the transition statute is null and void. The Maduro Board and the Guaidó Board both claim to be exclusively authorised to act on behalf of the BCV, including in arbitration proceedings in the London Court of International Arbitration and in respect of gold reserves of about US$1.95 billion held by the Bank of England for the BCV. The central issue in this appeal is which of these two parties is entitled to give instructions on behalf of the BCV.

The Commercial Court ordered a trial of two preliminary issues. The first (the “recognition issue”) is whether HMG recognises Mr Maduro or Mr Guaidó and, if so, in what capacity and on what basis. The second (the “act of state issue”) is whether courts in this jurisdiction may consider the validity under Venezuelan law of (among other things) the appointments to the BCV board made by Mr Guaidó and the transition statute passed by the Venezuelan National Assembly.

At first instance, Teare J held, in respect of the recognition issue, that HMG had conclusively recognised Mr Guaidó as Venezuela’s head of state. The judge further held that the validity of the transition statute and the appointments of Mr Guaidó engaged the act of state doctrine and were thus non–justiciable. The Maduro Board appealed successfully to the Court of Appeal on both issues. On the recognition issue, the Court of Appeal considered that HMG had recognised Mr Guaidó as the person entitled to be head of state (de jure) but had left open the possibility that it impliedly recognised Mr Maduro as in fact exercising some or all of the powers of head of state (de facto). It considered that this issue was best determined by posing further questions of the Foreign Commonwealth and Development Office and remitted the matter to the Commercial Court for this purpose. The Court of Appeal held that the act of state issue could not be answered at that stage without considering both whether HMG recognises Mr Guaidó as Venezuela’s head of state for all purposes and whether the STJ judgments should be recognised by courts in this jurisdiction.

Judgment The Recognition Issue

Under the United Kingdom’s constitutional arrangements, the recognition of foreign states, governments and heads of states is a matter for the executive [64]. Courts in this jurisdiction thus accept statements made by the executive as conclusive as to whether an individual is to be regarded as a head of state [69], [79]. This rule is called the ‘one voice principle’. Its rationale is that certain matters are peculiarly within the executive’s cognisance [78]. Historically, courts have drawn a distinction between the recognition of a government de jure and de facto [83]-[85]. This distinction is now unlikely to have any useful role to play before courts in this jurisdiction [99].

HMG’s statement was a clear and unequivocal recognition of Mr Guaidó as President of Venezuela, which necessarily entailed that Mr Maduro was not recognised as the President of Venezuela [92]. Under the one voice principle, it is therefore unnecessary to look beyond the terms of HMG’s statement [93]. No question of implied recognition thus arises, and the Court of Appeal was wrong to think it did [98]. The Court of Appeal’s reliance on the outdated concepts of de jure and de facto recognition was also misplaced [99]. The question of recognition in this case has also been unnecessarily complicated by the distinction between whom HMG recognises as Venezuela’s head of state and whom it recognises as head of government [106]. The relevant matter in these proceedings is the identity of Venezuela’s head of state, not its head of government [109].

It follows that courts in this jurisdiction are bound to accept HMG’s statements which establish that Mr Guaidó is recognised by HMG as the constitutional interim President of Venezuela and that Mr Maduro is not recognised by HMG as President of Venezuela for any purpose [110], [181(1)].

The Act of State Issue

There are two aspects of the act of state doctrine with which this appeal is concerned. The first (“Rule 1”) is that the courts of this country will recognise and will not question the effect of a foreign state’s legislation or other laws in relation to any acts which take place or take effect within the territory of that state. The second (“Rule 2”) is that the courts of this country will recognise, and will not question, the effect of an act of a foreign state’s executive in relation to any acts which take place or take effect within the territory of that state [113]. Although Rule 2 has been doubted, in light of the substantial body of authority in its support its existence should now be acknowledged [135]. Furthermore, there is no basis for limiting Rule 2 to cases of unlawful executive acts concerning property, such as expropriation or seizures [139]-[142].

Rule 2 thus applies to an exercise of executive power such as Mr Guaidó’s appointments to the BCV’s board [146]. However, there are several exceptions to the act of state doctrine, including for acts which take place outside a state’s territory, for challenges to acts which arise incidentally, and for judicial acts [136]. The extra–territorial exception does not apply in this case because the relevant acts of appointment were made within Venezuela and were not in excess of the jurisdiction of Venezuela in international law [149]. The incidental exception does not apply either, because these proceedings involve a direct attack upon the validity of Mr Guaidó’s appointments to the BCV’s board [152]. However, judicial rulings of a foreign state are not subject to the act of state doctrine [157]-[161]. For a court in this jurisdiction to decide whether to recognise or to give effect to the STJ judgments would therefore not engage the act of state doctrine. This is a matter which falls outside the preliminary issues and must therefore be remitted to the Commercial Court for further consideration. However, courts in this jurisdiction will refuse to recognise or give effect to foreign judgments such as those of the STJ if to do so would conflict with domestic public policy. The public policy of the United Kingdom will necessarily include the one voice principle which is a fundamental rule of UK constitutional law. As a result, if and to the extent that the reasoning of the STJ leading to its decisions that acts of Mr Guaidó are unlawful and nullities depends on the view that he is not the President of Venezuela, those judicial decisions cannot be recognised or given effect by courts in this jurisdiction because to do so would conflict with the view of the United Kingdom executive [170].

The transition statute is foreign legislation. Its validity may thus fall within Rule 1. There is no doubt about the existence of Rule 1, which would ordinarily prohibit challenges to the transition statute [172], [174]. However, the validity of the STJ judgments impugning the transition statute is not subject to the act of state doctrine [177]. In any event, Rule 1 is not necessary to the analysis because, subject to the effect to be given to STJ judgments, Rule 2 precludes questioning Mr Guaidó’s appointments to the BCV’s board [180].

Courts in this jurisdiction will therefore (subject to the effect to be given to the STJ judgments) not question the lawfulness or validity of the appointments to the BCV board made by Mr Guaidó [181(2)]. However, it remains necessary to consider whether the STJ judgments should be recognised or given effect in this jurisdiction. The proceedings are remitted to the Commercial Court for it to do so [181(3)].

The periodical Polski Proces Cywilny [Polish Civil Procedure] devoted a whole issue (2021/4) to the Brussels II ter Regulation. The issue is published in open access. Below are the abstracts of (and the links to) the various contributions.

D. Martiny, New efforts in judicial cooperation in European child abduction cases

Council Regulation (EU) 2019/1111 of 25 June 2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (Recast) contains new and extensive provisions on international child abduction. The 1980 Hague Convention on International Child Abduction is complemented mainly by chapter III (Arts. 22 to 29). The paper examines the interplay of these two legal sources in the closer intra-EU cooperation that is intended. The author analyses jurisdiction and the procedure for the return of a child in the case of wrongful removal or retention. Amendments in recognition and enforcement of ‘privileged’ decisions ordering the return of a child are also addressed.

B. Hess, Towards a Uniform Concept of Habitual Residence in European Procedural and Private International Law?

In the private international and procedural laws of the European Union, habitual residence has become an often-used concept to determine jurisdiction and applicable law. However, its broad usage does not entail that the concept is based on a uniform understanding. The paper explores the different areas where the principle is being applied. It concludes that a uniform concept of habitual residence does not exist in European law although the concept is primarily based on objective factors. Furthermore, from a regulatory perspective, it does not seem desirable to develop this concept in a uniform way. In this regard, the case law of the European Court of Justice, distinguishing different applications of the concept, appears to be balanced.

M.A. Lupoi, Between parties’ consent and judicial discretion: joinder of claims and transfer of cases in Regulation (EU) 2019/1111

Regulation no. 2019/1111 has introduced new rules and mechanisms in order to ensure that a parental responsibility case is decided by the court more conveniently placed to protect the best interest of the child. Thus, while no general provision on the joinder of related claims is provided for, the recast regulation grants the interested parties a limited possibility to choose the competent forum. More significantly, the judge is granted discretionary powers as concerns the exercise of its jurisdicton and the decision to transfer the case to a more appropriate forum. These new powers and procedural mechanisms enforce the European space of justice and implement cooperation and collaboration between the Courts of different Member States.

M. Szpunar, K. Pacuła, Forum of necessity in family law matters within the framework of EU and international law

The forum of necessity revolves around the idea that a court may be called upon to hear a case, though it lacks jurisdiction under the normally applicable rules. The justification of its jurisdiction lies in the fact that the claimant cannot bring the proceedings before another forum or cannot be reasonably required to do so in a given situation. The present paper constitutes an attempt to contextualize and to position the forum of necessity within the framework in which it operates in the Member States, namely the framework of EU and international law. It juxtapositions three legal concepts (forum of necessity, forum non conveniens and universal civil jurisdiction) in order to determine the boundaries of necessity jurisdiction as it is known under EU law. It also benchmarks the necessity jurisdiction against international law and takes into account the influences of human and/or fundamental rights in an attempt to determine whether international law places on the Member States any constraints or obligations as to ensuring a forum of necessity. Taking into account those findings, the paper presents the spectrum of influences that the doctrine of forum of necessity may produce across various instruments of EU private international law, in particular those pertaining to family law matters.

O. Bobrzyńska, Brussels II ter Regulation and the 1996 Hague Convention on Child Protection – the interplay of the European and Hague regimes in the matters of parental responsibility

The article discusses the issue of the application of the conflict-of-laws rules contained in the 1996 Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children in matters of parental responsibility heard by the courts of EU Member States when jurisdiction is based on the provisions of EU Regulations. This issue is discussed in the context of the relationship between the 1996 Hague Convention and the new Brussels II ter Regulation (Council Regulation (EU) 2019/1111 of 25 June 2019 on Jurisdiction, the Recognition and Enforcement of Decisions in Matrimonial Matters and the Matters of Parental Responsibility, and on International Child Abduction), including the demarcation of the application of the jurisdictional norms of the Convention and the Regulation. The new Regulation seeks to address the problems that arose in this regard under the Brussels II bis Regulation.

F. Gascón Inchausti, P. Peiteado Mariscal, International child abduction in the case law of the Court of Justice of the European Union: learning from the past and looking to the future 

Council Regulation (EU) 2019/1111 of 25 June 2019 on Jurisdiction, the Recognition and Enforcement of Decisions in Matrimonial Matters and the Matters of Parental Responsibility, and on International Child Abduction (Recast) sets up the basis for the treatment of international child abduction among Member States and, for the last fifteen years, some of its most complex elements have been interpreted and developed by the Court of Justice of the European Union. This paper aims to explain this approach and the case law, focusing on the changes and on the challenges that the forthcoming entry into force of Council Regulation (EU) 2019/1111 brings to this delicate issue. 

Z. Kubicka-Grupa, A review of the Polish Supreme Court case law in international family law matters (from January 2015 to April 2021)

 The powers of the Polish Supreme Court include, inter alia, hearing cassation appeals and issuing resolutions. However, in matrimonial matters and matters regarding parental responsibility the jurisdiction of the Supreme Court is strongly limited by law. This also applies to cases with a cross-border element. In the period from January 2015 to April 2021, the Supreme Court issued eleven decisions concerning jurisdiction in matters of parental responsibility under the Brussels II bis Regulation, the civil aspects of international child abduction as well as the recognition and enforcement of judgments in family law matters. The article provides a review of this case law. It contains a concise description of the facts of the cases, the legal assessment expressed by the Supreme Court and a brief commentary by the author.

The Journal of Private International Law and the Singapore Management University will hold a virtual conference on 23 to 24 June 2022, divided into four sessions, on the conflicts of jurisdiction issue. The conference is aimed at assisting with the ongoing work of the Hague Conference on Private International Law (HCCH) on jurisdiction.

The speakers are leading private international law scholars and experts, many of whom are directly involved in the ongoing negotiations at the HCCH. Specifically, the first session, devoted to the common law approaches to conflicts of jurisdiction, chaired by Jonathan Harris, will include an opening by the dean of Yong Pung How School of Law from Singapore Management University and presentations by Campbell McLachlan, Ardavan Arzandeh, Ronald Brand and Mary Keyes; the second one, on the other, focused on civilian approaches to conflicts of jurisdiction, chaired by Kei Takeshita, will involve Tanja Domej, Geert Van Calster, Nadia De Araujo, Marcelo De Nardi and Zheng Sophia Tang; the third will follow, which, based on the work at the Hague Conference on Private International Law and chaired by Paul Beaumont, will be dealt with by Fausto Pocar, David McClean, João Ribeiro-Bidaoui and Matthias Lehmann; finally, continuing on the same topic, the forth chaired by Adeline Chong, including Trevor Hartley, Yeo Tiong Min, Franco Ferrari and Anselmo Reyes, concluded by closing remarks. Each session, with a break in between, will feature a dedicated Q&A moment.

Registration to attend the conference will open nearer the time. The programme for the conference is available here.

Furthermore, the biennial Journal of Private International Law Conference has been delayed until 2023 in order to enable it to take place in person at the Singapore Management University. This conference will be based on a call for papers. Similarly, further details will be announced in due course.

John F. Coyle from the University of North Carolina has published on SSRN an article titled The Mystery of the Missing Choice-of-Law Clause.

The abstract reads as follows:

There is widespread agreement among experienced contract drafters that every commercial contract should contain a choice-of-law clause. Among their many virtues, choice-of-law clauses facilitate settlement and reduce litigation costs. While most modern contracts contain these provisions, some do not. In many instances, the absence of these clauses may be attributed to outdated forms, careless drafting, inattentive lawyers, or some combination of the three. In a few instances, however, it appears that sophisticated contract drafters purposely omit choice-of-law clauses from their agreements. If these clauses add value to a contract—and there is near-universal agreement that they do—then this decision raises a perplexing question. Why would any experienced contract drafter ever consciously choose not to write a choice-of-law clause into an agreement?
This Article seeks to answer this question with respect to one type of agreement where choice-of-law clauses are routinely omitted—insurance contracts. All of the available evidence suggests that most insurance contracts lack choice-of-law clauses. This is surprising because insurance companies are the epitome of the sophisticated contract drafter. To unravel the mystery of why so many insurance contracts do not contain choice-of-law clauses, the Article draws upon more than thirty interviews and email exchanges with industry experts. It argues that the absence of these provisions is attributable to a complex amalgam of legislative and regulatory hostility, judicial skepticism, standard forms, and strategic maneuvering on the part of insurers. The Article argues further that manuscript policies—which are negotiated between insurers and policyholders—sometimes lack choice-of-law clauses due to a perceived first-mover disadvantage and the absence of any body of truly neutral insurance law within the United States.
Solving the mystery of the missing choice-of-law clause in insurance contracts unlocks three important insights. First, it informs the efforts of state legislators and insurance commissioners called upon regulate the terms of insurance policies. Second, it suggests that insurance companies should adopt a differentiated approach to drafting choice-of-law clauses that accounts for the relative favorability of the law in the policyholder’s state. Third, and most importantly for contract scholars, solving the mystery sheds light on the nature of the contract production process, the drafting acumen of insurance companies, and the stickiness of absent contract terms.

This post was contributed by Olivera Boskovic, who is a Professor at the Université de Paris.

The situation of victims of environmental damages or human rights violations caused in non-EU countries by subsidiaries or subcontractors of companies established in the EU (but the issue can be extended to companies merely operating in the EU) trying to bring actions before the courts of EU Member States is well known. The Shell case, in which victims of serious environmental damage in Nigeria sued the Dutch parent company and its Nigerian subsidiary before the Dutch court, is quite emblematic in this respect. (The last decision in this case has been issued on 29th of January 2021 by the Hague Court of Appeal. See Shell Nigeria liable for oil spills in Nigeria). The need to modify certain rules of private international law in order to address these actions in a satisfactory manner has been debated for some time now. The purpose of this post is to provide an update and examine the current state of the debate. Difficult questions may arise both concerning jurisdiction and concerning the determination of applicable law.

Jurisdiction

Jurisdiction, first of all, remains problematic although the situation has somewhat improved in recent years. From a European perspective, as the law stands today, a first fundamental distinction is between cases in which the defendant is domiciled in an EU Member State and those in which the defendant is domiciled in a third country.

Where the action is brought against a defendant domiciled in an EU Member State (i.e, in our context, actions brought directly against the parent company or the ordering company), jurisdiction is based on the Brussels Ia Regulation. This regulation always allows a defendant to be sued in the court of his domicile, so that jurisdiction should not be a problem in this case. (For example, in the Shell case the jurisdiction of the Dutch court to hear the action against the Dutch company did not pose any problem). Instead, the obstacles are of a substantive nature and relate to the difficulty of holding companies liable for the actions of their subsidiaries or subcontractors.

The situation is more problematic when the defendant is domiciled outside the EU, (i.e. in our context when the action is brought against subsidiaries or subcontractors who are direct perpetrators of the damage or simply against companies domiciled outside the EU). These actions are excluded from the scope of the Brussels Ia Regulation. They are subject to the national laws of the Member States, and the rules may therefore differ considerably from one country to another. Generally speaking, it is quite difficult to establish the jurisdiction of a Member State court in this type of case. One can therefore consider that there is a problem of access to justice, in so far as the rules of jurisdiction do not take account of economic links, or even the economic unity of groups of companies. Nevertheless, there are avenues available and in particular two worth mentioning: the co-defendants’ rule and the forum necessitatis (or jurisdiction based on the risk of denial of justice) Indeed, several Member States have rules based on one or other of these mechanisms, or even both. As a reminder, the co-defendants’ rule makes it possible, when an action is brought against several defendants, one of whom is domiciled in the forum State and the other outside the EU, to sue all the defendants before the court of the domicile of the one domiciled in the forum State, provided of course that the claims are related. The forum necessitatis, on the other hand, allows the court of the forum to be seized when no foreign court can be seized by the claimant, who therefore risks a denial of justice. More than the issues raised by the application of each of these rules what is noteworthy is the lack of unification at the European level. As regards the forum necessitatis, its introduction into the Brussels I Regulation was proposed in 2010 and again recently in 2020, but without success. As for the co-defendants rule (involving a defendant domiciled outside the EU), its introduction in the Regulation has never been proposed.

New Grounds of Jurisdiction in the Brussels Ibis Regulation

Nevertheless, it appears that the introduction of these two rules into the Regulation would be a real improvement. Of course, this opinion is not shared by all writers. There are divergent views among scholars. Some are hostile to the introduction of the forum necessitatis. (see Ch. Tomale, On the EP draft report on corporate due diligence) They consider there is no need for such a rule, especially at a time when the Supreme court of the United States is moving in the opposite direction and has adopted a very strict position. However, contrary to what can sometimes be read, the idea is not to allow member state courts to hear cases with no connection whatsoever to the EU. A minimum link with the legal order of the court seized is required by all proposals (see the GEDIP proposal concerning the private international law aspects of the future European instrument on corporate due diligence and corporate accountability, October 2021; draft treaty on business and human rights, August 2020; Sofia guidelines for international civil litigation for human rights violation, 2012 adopted by the ILA). Of course, the question is then whether this minimum link should be defined by the rule or left for the court to decide. Taking into account the diversity of situations that may occur, it is preferable to leave the definition of the minimum link to the courts. This seems to be the approach adopted by recent initiatives. On the contrary, other scholars consider that situations where a real risk of denial of justice can be characterised are the only situations in which European courts should rule on this type of dispute. The concern that home state courts should not consider that it is always better for them to decide this type of case and that they should assert jurisdiction only when it is really necessary because the host state courts cannot handle the litigation in a satisfactory way has been voiced by many commentators during debates. Even the Court of Appeal in the famous Vedanta case decided in the UK commented that ‘there must come a time when access to justice in this type of case will not be achieved by exporting cases, but by the availability of local lawyers, experts, and sufficient funding to enable the cases to be tried locally”. Scholars who hold this position are implicitly hostile to the co-defendants rule. These differences raise the question of relations between these two grounds of jurisdiction and whether one should be preferred. In the opinion of the present writer the answer is no. These rules are complementary. (The opinion according to which the forum necessitates rule is a second-best solution and an activity-based rule could be imagined is also worth mentioning. This question was discussed during the interesting webinar on “The recommendation of GEDIP concerning the private international aspects of the future EU instrument on corporate due diligence and corporate accountability” organised by the Italian Interest group on Private international law on December 10 2021 featuring as speakers H. Van Loon and Giulia Vallar.)

Therefore, the minimum solution would be to introduce into the Brussels Ia Regulation the forum necessitatis which allows victims to bring an action in front of the court of a EU Member State, irrespective of the existence of a co-defendant domiciled in an EU Member State, but on condition that they can show that it is impossible to bring the case before another court. The rule is devised as an exceptional rule. If the European legislator wanted to go further, (it is the present writer’s opinion that this is desirable), they should introduce, in addition, the co-defendants rule, which makes it easier to bring an action, without the need to show the impossibility of seizing another court, but provided that a European defendant is also involved in the proceedings and that the claims are related. This approach has been adopted by several recent initiatives. The latest version (August 2020) of the draft binding treaty on business and human rights negotiated within the UN framework contains both rules. The same is true of the GEDIP recommendation to the European Commission. Considering the fact that England has often been described as a magnet forum for this type of litigation, it is interesting to note that in all these proposals, contrary to the English system, the two grounds of jurisdiction (presence of a forum-based co-defendant and the risk of denial of justice) are two separate grounds of jurisdiction. This indeed seems to be a better solution. Another difference lies in the fact that the English system takes into account the risk of substantial denial of justice whereas the forum necessitatis focuses on the impossibility to seize another court. However, the two systems might be closer than they seem at first sight. The impossibility to seize another court can be characterized if the claimant can not “reasonably” seize another court. This is an open door for consideration of a risk of substantial denial of justice. In a nutshell, it appears that the attractivity of the English forum does not lie in rules on jurisdiction.

Parallel Litigation

Another important question relating to jurisdiction is the question of parallel proceedings. The Mariana Dam case recently brought in front of the English courts shed light upon this question. In the aftermath of the worst environmental disaster in the history of Brazil, an action was brought in the UK against the Anglo-Australian mining multinational BHP. It was initially rejected, but has been reopened in July 2021 under exceptional appeals legislations (CPR 52.30) in order to “avoid real injustice”. The way lis pendens and the related actions exceptions are treated is very important. In addition to the problem of parallel litigation brought by victims both in the host and in the home country, It is vital to make sure that they are not transformed into weapons by potential defendants seeking declarations of non-liability in non-member States and then invoking the lis pendens or related actions exception. However, one may consider that the tools that already exist in the Bia regulation are satisfactory and that no legislative reform is needed on this point. Although relying on the conditions of recognition and the concept of “good administration of justice” can seem a bit vague, it is submitted that a certain degree of judicial discretion is inevitable.

Applicable Law

After jurisdiction, the second question concerns the determination of the law applicable to these actions. As the law stands today, a difficulty arises from the fact that choice of law rules often designate the law of the place of the damage, which in these cases is frequently the law of a country outside the EU with a less developed legal system. In reality, to understand the current situation, a twofold distinction must be made, firstly according to whether or not the defendant is domiciled in the EU, and secondly according to whether it is a question of environmental damage or a human rights violation. With regard to actions against defendants domiciled outside the EU, (i.e. in current litigation, actions against subsidiaries and subcontractors), they will always be governed by the law of the place where the damage occurred, which corresponds to the law of their activity. (It is important to note that this does not necessarily mean impunity for these defendants. For example, in the Shell case the Dutch court held the Nigerian subsidiary liable by virtue of Nigerian law). On the other hand, with regard to actions against parent companies or ordering companies established in the EU, as the law stands today, a distinction must be made between cases involving environmental damage and cases involving a violation of human rights. The former are covered by Article 7 of the Rome II Regulation, which allows the claimant to choose between the law of the place of the event giving rise to the damage and the law of the place where the damage occurred. The latter are covered by Article 4, which designates exclusively the law of the place of the damage. This last rule, in our context, is problematic. This problem is at the origin of the proposal by the European Parliament’s Committee on Legal Affairs to insert an Article 6a on “Actions for breach of human rights in commercial matters” which would have allowed the victim to choose between several laws.

The first question that arose upon publication of the proposal was: do we need a new choice of law rule? Some scholars consider that we do not and that it is sufficient to classify the rules of the future European instrument as overriding mandatory provisions (see. the post of G. Rühl here). However, a different view is possible. It is the opinion of the present writer that a choice of law rule would indeed be useful. Indeed, by definition, only a limited number of provisions can be characterised as overriding mandatory provisions. The rules on limitation, for example, will not be considered as such. However, they can be quite decisive in litigation. The action may be dismissed because, for example, the law of the place of the damage, which is a law of a non-EU country, contains a very short limitation period. Therefore, a choice of law rule would protect the victims more than the overriding mandatory rules method and consequently contribute to the public interest objective of making companies more responsible. In any event, the two methods can be combined. The adoption of a new choice of law rule for human right abuses, would not make the overriding mandatory rules approach irrelevant. This is also the position of the GEDIP. In its recommendation it combines the two approaches.

Extending the Scope of Article 7 Rome II

Going back to the European Parliament’s Committee on Legal Affairs’ proposal, although it is the opinion of the present writer that a special choice of law rule is indeed desirable, the provision as proposed was not immune from criticism (See. O. Boskovic, « La loi applicable aux « actions pour violations des droits de l’homme en matière commerciale », Recueil Dalloz 11 fév. 2021, p. 252). Firstly, having two provisions, one applicable to environmental damage and the other applicable to human rights violations would cause very difficult boundary problems (bearing in mind, for example, that according to some estimates one third of human rights violations involve environmental offences). Secondly, the connecting factors used in the proposed article 6a raised many questions. For this reason, it appears more appropriate to have a single choice of law rule for human rights violations and for environmental damage. Article 7 should therefore be rewritten to include human rights violations. The victim would then be able to choose between the law of the place of the damage and the law of the place where the event giving rise to the damage occurred, which would increase their chances of success. (This is also the position of the GEDIP proposal. However, one should note that the scope of the GEDIP proposal is wider and applies, just like the future European instrument, not only to human rights and environmental damages but also to good governance. The precise definition of this last concept is difficult and the desirability of having the same rule is debatable. This very interesting question was discussed during the above-mentioned webinar organised by the Italian interest group on private international law.) However, this idea then gives rise to another question: How should the “event giving rise to the damage” be interpreted in this context? Obviously, for the text to achieve its objective, it must be accepted that the event giving rise to the damage can, at least if the factual circumstances are appropriate, be located at the place where the decisions were or were not taken, i.e. at the domicile of the parent company (a recital could be inserted to encourage such an interpretation) (I have developed these ideas in O. Boskovic, « La loi applicable aux « actions pour violations des droits de l’homme en matière commerciale », Recueil Dalloz 11 fév. 2021, p. 252.). The Hague Tribunal in the Shell case ruled along these lines in its decision issued on May 26th 2021, which has already been characterised as historical. It is interesting to note that a similar question arose in the Arica v. Boliden case decided by the Swedish courts in 2019. In this case under Swedish choice of law rules, applicable rationae temporis, the lex loci delicti commissi applied. In determining the locus delicti commissi, the court held that the center of gravity should be found and that ‘This center may be established with regard to where the qualitatively important elements have their focus rather than according to quantitative criteria’. Therefore, in this case concerning the export of toxic waste from Sweden to Chile, contrary to the first instance decision, the court of appeal held that the event giving rise to the damage was localized in Sweden. It is certain that agreeing on an adequate choice of law rule is not enough. The localization of the connecting factors is of paramount importance. (A similar question arose in the Nestlé v. Doe case. The Supreme Court explained that, because the ATS does not apply extraterritorially, in order for the court to have jurisdiction “plaintiffs must establish that conduct relevant to the statute’s focus occurred in the United States”. This was not the case because the only relevant alleged domestic conduct by the defendants consisted of general corporate activity-like decisionmaking- which  is insufficient to establish domestic application of the ATS. Contrary to the emerging trend in the EU, the Supreme Court of the US has shown continuous caution on this matter, apparently considering that it is not a matter for judicial lawmaking)

Revising Article 17 Rome II

Another important question concerns situations where poor performance of contractual obligations causes damage to third parties. The Kik case in Germany or Begun v. Maran case in the UK come to mind. A very important step in the fight for corporate accountability would be to facilitate actions brought by these third parties The aim is to ensure that the ethical and environmental clauses contained in international contracts do not remain a dead letter. Indeed, as the Court of Appeal observed in Begun v. Maran, often all protagonists know that theses clauses will be totally ignored. A revision of Article 17 of the Rome II Regulation could thus be envisaged in the form of the addition of a sentence: “Account shall also be taken of the ethical clauses contained in the contracts whose breach has caused the damage.” (on this problem see our forthcoming article « Contrats internationaux et protection de l’environnement », in actes du colloque du 15 juin 2021, Le droit économique, levier de la transition écologique ?)

Finally, it appears that the possibility of applying more widely foreign overriding mandatory provisions would contribute to the pursuit of these global governance goals. A modification of Rome I and Rome II along these lines would be welcome.

As these few remarks show, the debate on private international law aspects of corporate social accountability is far from over.

The jugdment on C-251/20, Gtflix, will be published on Tuesday 21. The request for a preliminary reference of the French Cour de Cassation, focused on Article 7(2) of the Brussels I bis Regulation, had triggered a long opinion by M. Hogan (the Irish Advocate General at that point in time). Although he favoured the characterization of the act at stake as a form of malicious falsehood – thus falling under the scope of unfair competition rules-  and indicated expressly that “the present case is not the right one for the Court to take a position on whether or not the mosaic approach should be maintained” (point 95), the actual relevance of the case lies precisely there. He himself devoted his opinion to it, providing the Grand Chamber (K. Lenaerts, L. Bay Larsen, A. Arabadjiev, A. Prechal, I. Jarukaitis, N. Jääskinen, T. von Danwitz, L.S. Rossi, A. Kumin, N. Wahl, and M. Safjan as reporting judge) with arguments and counterarguments. It would be disappointing if the Court does not take a stance.

Eagerly waiting.

Quick reminder:

The question was:

‘Must Article 7(2) of Regulation (EU) No 1215/2012 be interpreted as meaning that a person who, considering  that his or her rights have been infringed by the dissemination of derogatory comments on the internet, brings proceedings not only for the rectification of information and the removal of content but also for compensation for the resulting non-material and material damage, may claim, before the courts of each Member State in the territory of which content published online is or was accessible, compensation for the damage caused in the territory of that Member State, in accordance with the judgment in eDate Advertising (paragraphs 51 and 52), or whether, pursuant to the judgment in Svensk Handel (paragraph 48), that person must make the application for compensation before the court with jurisdiction to order rectification of the information and removal of the derogatory comments?’

Advocate General Hogan proposed the following answer:

“Article 7(2) of Regulation 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 must be interpreted as meaning that a claimant who relies on an act of unfair competition consisting in the dissemination of disparaging statements on the internet and who seeks both the rectification of the data and the deletion of certain content and compensation for the non-material and economic damage resulting therefrom, may bring an action or claim before the courts of each Member State in the territory of which content published online is or was accessible, for compensation only for the damage caused in the territory of that Member State. In order, however, for those courts to have the requisite jurisdiction it is necessary that the claimant can demonstrate that it has an appreciable number of consumers in that jurisdiction who are likely to have access to and have understood the publication in question.”

Ilaria Queirolo (University of Genova), Salvatore Patti (University of Rome La Sapienza), Carlos Esplugues Mota (University of Valencia), Boriana Musseva (Sofia University), Dana Rone (Turiba University, Riga), Laura Carpaneto (University of Genova) and Francesca Maoli (University of Genova) have edited Children’s Right to Information in EU Civil Actions, published by the Italian publisher Pacini.

The volume collects the results of the EU co-funded Project Minor’s Right to Information in EU civil actions – Improving children’s right to information in cross-border civil cases – MiRI, European Union Justice Programme 2014-2020, JUST-JCOO-AG-2018-831608. It critically addresses the fundamental right of the child to receive information during the course of civil proceedings affecting him or her, with particular reference to the peculiarities characterizing cross-border proceedings in family matters. In this context, the right to information is coinceived not only as a corollary of the right of the child to be heard during the course of the proceedings, but also in the light of the possible developments as an autonomous procedural right. The volume rationalizes the main criticalities emerging from the current practice in several EU Member States and offers a set of Guidelines, aimed at improving the situation of children involved in cross-border family proceedings, in order to enhance and protect their fundamental rights.

The contributors include Roberta Bendinelli, Leontine Bruijnen, Laura Carpaneto, Carlos Esplugues Mota, Samuel Fulli-Lemaire, Maria González Marimón, Sara Lembrechts, Francesca Maoli, Boriana Musseva, Vasil Pandov, Francesco Pesce, Ilaria Queirolo, Pablo Quinzá Redondo, Geraldo Rocha Ribeiro, Dana Rone, Tine Van Hof, Daja Wenke.

The book is fully accessible here.

On 25 November 2021, the Court of Justice handed out its judgement in IB (C-289/20), in which it followed the earlier Opinion of AG Sánchez-Bordona. The preliminary question referred to the Court in this case concerned the jurisdictional rules of Article 3(1)(a) of the Brussels II bis Regulation and was aimed at clarifying whether a spouse might have his or her ‘habitual residence’ in more than one country, which could result in courts of both Member States having jurisdiction in proceedings relating to matrimonial matters. This post was published previously on EU Law Live.

Background

The background to the case concerns the applicant IB, who wanted to institute divorce proceedings at forum actoris pursuant to the sixth indent of Article 3(1)(a) of the Brussels II bis Regulation, having strong ties to two countries, Ireland due to family and social interests and France due to professional and patrimonial interests.

CJEU’s Analysis

Referring to Mikołajczyk (C-294/15), the Court of Justice recalled that Article 3 of the Brussels II bis Regulation provides for very generous grounds of jurisdiction, which are alternative, but exclusive. The rules of the fifth and sixth indents of Article 3(1)(a) were designed considering interests of the spouse who, after the breakdown of the marriage, decides to move back to his or her home country nad wants to institute proceeding there (paragraph 35). The concept of ‘habitual residence’ is not defined in the Brussels II bis Regulation; however, it is consistently used in a singular form. The use of the adjective ‘habitual’ suggests that on the one hand the residence should have a stable and regular character and on the other the transfer of habitual residence to another country should reflect the willingness of remaining there with the intention of establishing there the stable center of one’s life interests. The assimilation of the habitual residence of a person, in this case a spouse, to the permanent or habitual centre of his or her interests does not militate in favour of accepting that a number of residences may simultaneously have such a character (paragraphs 40-44).

The objective of Article (3)(1)(a) of the Brussels II bis Regulation is to reconcile legal certainty with the reality of the mobility of persons within the EU. Assuming that one might have multiple habitual residences would definitely undermine this legal certainty and predictability as to which court might hear the case. It would also create a risk that the concept of ‘habitual residence’ would be equated with simple residence. Additionally, such interpretation of the concept of habitual residence under the Brussels II bis Regulation would have repercussions for other EU instruments, namely the Maintenance Regulation and the Matrimonial Property Regulation, which provide for jurisdictional basis dependent on the jurisdiction in matrimonial matters (paragraph 48).

CJEU’s Conclusion

As a result, a person might have only one habitual residence within the meaning of Article 3(1)(a) of the Brussels II bis Regulation (paragraph 51). Having concluded the above, the Court of Justice clarified the meaning of the concept of ‘habitual residence’. Its judgements concerning habitual residence of a child, in HR (C-512/17) for example, were used as a starting point. Then the Court underlined the specificities of the situation of an adult, namely the will of returning to the home country after the marriage breakdown, as well as the more diverse nature of the environment, which is composed of different activities and diversified interests – professional, sociocultural, patrimonial, and familial (paragraph 56). Habitual residence is characterized by two elements, namely the willingness of fixing one’s center of interests in a given place and the presence of sufficiently stable character (paragraph 57). The Court of Justice thus seemed to suggest that IB might have indeed changed his place of habitual residence (paragraphs 59-61) but noted that it is for the referring court to ascertain.

Overall, the judgement is not a surprising one, as it stands in line with previous jurisprudence of Court of Justice, for example in EE (C-80/19), when it states that the habitual residence of the deceased must be established in a single Member State (paragraph 40).