Droit international général

We are delighted to announce another addition to our Editorial Board: Elsabe Schoeman.

Elsabe has long been one of the leading scholars of private international law in South Africa, having authored countless publications in the areas of jurisdiction in cross-border commercial litigation and choice of law in contract, delict/tort and selected areas of family law, with a recent focus on access to justice for victims of human rights infringements and environmental torts. She has also advised a variety of law commissions and private law firms on these topics.

Elsabe has just left the office of Dean of the Faculty of Law at the University of Pretoria and will be focusing her work for the blog on legal developments in South Africa.

[If you do use the blog for research, practice submission or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.]

In  SC Commercial Bank Privatbank v Kolomoisky & Ors [2025] EWHC 1987 (Ch), Trower J covers a lot of ground (2025 paras of ground).

At the time of the events with which these proceedings are concerned, claimant Privatbank (‘the Bank’) was Ukraine’s largest bank.  It was declared insolvent by the National Bank of Ukraine on 18 December 2016 and was nationalised over the course of the following days.  These proceedings have been brought by the Bank against two of its founding shareholders, first defendant Igor Kolomoisky and second defendant Gennadiy Bogolyubov (the ‘individual defendants’) and six companies (‘the corporate defendants) said to be owned or controlled by them seeking compensation for harm caused by what the Bank alleges to have been their participation in a fraudulent scheme carried out prior to nationalisation. The Bank also claims in unjust enrichment against a number of defendants.

Of relevance to the blog is the discussion of Article 10 (assimilated) Rome II on unjust enrichment, viz a number of restitution claims, and application of Article 26 Rome II on limitation periods and public policy.

Firstly, on Article 10 Rome II: the law applicable to the claim in unjust enrichment.

The Bank contends that its claims against the Corporate Defendants in unjust enrichment are governed by Ukrainian law per A10(2) and (4) Rome II. The Corporate Defendants contend that any claims against them in unjust enrichment are governed by Cypriot law and they rely on A10(2) Rome II.

For ease of digesting this post: Article 10 Rome II reads

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

2. Where the law applicable cannot be determined on the basis of paragraph 1 and the parties have their habitual residence in the same country when the event giving rise to unjust enrichment occurs, the law of that country shall apply.

3. Where the law applicable cannot be determined on the basis of paragraphs 1 or 2, it shall be the law of the country in which the unjust enrichment took place.

4. Where it is clear from all the circumstances of the case that the non-contractual obligation arising out of unjust enrichment is manifestly more closely connected with a country other than that indicated in paragraphs 1, 2 and 3, the law of that other country shall apply.

[1581] The language of A10 requires the court first to consider whether the non-contractual obligation concerns a relationship existing between the Bank and the Corporate Defendants, which is closely connected with the unjust  enrichment.  If it does, the law that governs that relationship must be applied unless A10(4) is engaged.  The Bank submitted that its restitutionary claim against the Corporate Defendants engaged A10(1) because it concerned the relationship arising out of its tortious claim under Ukrainian law against the Corporate Defendants.

[1583] Trower J follows Tear J in Banque Cantonale de Geneve v. Polevent:  it is insufficient that, after the tort had been committed, there was a relationship between victim and tortfeasor “with legal consequences”, to engage A10(1).

Pro memoria: Article 10(1) reads

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

A relationship “existing” between the parties, it is held, must be one that existed prior to the events giving rise to the claim.

A10(2) was not argued by the parties, nor in fact was A4. This leaves the question, first, of the identification of the country in which enrichment took place, and second, whether by application of A10(4), the laws of that country might be displaced by the laws of another country that is manifestly more closely connected to the non-contractual obligation.

On the first issue [1585]: the locus of the enrichment:

… the country in which the unjust enrichment took place for the purpose of determining the effect of Article 10(3).  There is no real dispute about this. The relevant country is Cyprus, because the Bank’s allegation is that the Corporate Defendants were enriched by acquiring property in the form of prepayments under the RSAs in circumstances in which they have never complied with their purported obligations under the RSAs or returned the Unreturned Prepayments.  It is therefore the Bank’s case that the enrichment comes from the acquisition of property in the form of money which occurred with the crediting of the Corporate Defendants’ accounts at the Cyprus branch of the Bank.

Here Trower J [1593] sides with the bank, not readily it seems but firmly nevertheless.

[1586-1587] the Bank’s arguments are outlined (these have a strong Universal Music echo – of course that case was jurisdictional, not applicable law):

[the Bank argues] the only relevant factor which connects the claim in unjust enrichment to Cyprus is the location of the Corporate Defendants’ bank accounts, which adds nothing because that is no more than the justification for applying Article 10(3) in the first place.  The Bank also submitted that Cyprus as a location was of no particular significance, because the Corporate Defendants could equally have had their accounts with another non-Ukrainian subsidiary of the Bank (e.g., in Latvia).  The only point which mattered was that the destination of the funds should be outside Ukraine.

More positively, Ukraine was said to be manifestly more closely connected to the restitutionary obligation than Cyprus, because the Corporate Defendants received the Unreturned Prepayments as part of a fraudulent scheme controlled by two Ukrainian oligarchs with the purpose and effect of misappropriating funds from a Ukrainian Bank.  The Bank also relied on the fact that the scheme was actually implemented by and with the involvement of a number of individuals, including people said to be the UBOs of the Corporate Defendants, who were based in Ukraine (…).  It also relied on the fact that the Corporate Defendants knew that the Unreturned Prepayments were funded by fraudulent loans from the Bank in Ukraine and the whole structure was designed to conceal breaches of Ukrainian currency control regulations.

[1588] are the defendants’ arguments:

it  could not possibly be said that the connections to Cyprus were not real and substantial.  The Corporate Defendants were not themselves Ukrainian (they were incorporated in England and the BVI) and they were managed by Cypriot professional directors; indeed it was the Bank’s own case that the Individual Defendants’ control of and influence over the Corporate Defendants was through Primecap, a Cypriot corporate services provider established by Cypriot lawyers.  [It was also argued] that Cyprus was the country in which the money which was the subject of the Bank’s claim continued to be located when it was transferred on by the Corporate Defendants.  Another factor which counted against a manifestly closer connection to Ukraine was that the prepayments were received by the Corporate Defendants in US$ rather than UAH.

Of note in the judge’s analysis (which of course kicks off [1589] with the observation that ‘all circumstances’ and ‘manifestly’ mandate a high bar for A10(4)) are

• [1589] the comparison is between countries, not laws: “the court’s task is to ascertain whether there is a country, which has a manifestly closer connection to the restitutionary obligation – i.e., the focus is on the country not the law.  In the present case, the exercise required by Article 10(4) is a comparison of the connection between the restitutionary obligation and Cyprus on the one hand and between the restitutionary obligation and Ukraine on the other.”
• [1590] “The comparison is between connections to Cyprus and connections to Ukraine.  Connections to third countries may go to show that not every factor apart from the place of receipt points inexorably to Ukraine, but if they do not point to Cyprus, their usefulness is limited”. (Unless of course, one assumes, if they were to point to a third country hence also its applicable law altogether, but that does not seem to be the case here).

I do not think this is correct. Those wishing to show that A10(3) is to be dislodged by application of A10(4), need to show that that the obligation in unjust enrichment, is manifestly more closely connected to another country, following from all circumstances of the case. Arguably the connections to third countries undermine the A10(4) analysis and therefore are most useful: even if they do not point to the A10(3) country. Of note in this context is that A10(3) is not the result of a most closely connected analysis: it is simply a vector introduced for predictability and certainty. I imagine this may have featured in permission to appeal.

• [1591]: control over Primecap’s activities was exercised by individuals in Ukraine, both generally and for the specific transactions concerned. “The connection to Cyprus is in fact and substance more limited than the place of its establishment and operations might otherwise indicate.  The enrichment occurred in Cyprus (a factor which will always of course be present where it said that Article 10(4) should displace the prima facie rule in Article 10(3)), but the expense was sustained by the Bank in the Ukraine.  I also think that, because steps which gave rise to an unjust enrichment were component parts of a fraud practised on a Ukrainian bank, structured in the way that it was to avoid Ukrainian currency control obligations, and closely interrelated to torts governed by Ukrainian law in which the loss was sustained in Ukraine, points to a very close connection to Ukraine.”

The finding in favour of engaging A10(4) comes despite what the judge [1592] called an argument “with real substance”: the DNA of the whole scheme:

“a transfer out of Ukraine, and (more importantly for the claim in unjust enrichment) a receipt by a recipient outside Ukraine, was an essential element of what all parties accept (for different reasons) was a loan recycling scheme intended to avoid Ukraine’s currency control regulations.  I agree that the fact that it was necessary for any enrichment to occur outside Ukraine, detracts from any connection between the restitutionary obligation and Ukraine, and makes it more difficult for the Bank to say that the connection to Ukraine is manifestly closer than Cyprus.”

All in all it is the ‘control’ element it seems which swayed the judge. If that finding stands, it would be useful eg in the Dyson claims.

Next, on the application of Article 26 Rome II on limitation periods and public policy.

The findings on A26 were made obiter [1995] ff, and with reference ia to the Court of Appeal in Begum v Maran: in essence, Trower J notes the very high bar for Article 26 and would have held that that bar has not been reached in casu.

If and when I hear of an appeal, I shall update.

Geert.

EU Private International Law, 4th ed, 2024, Chapter 4.

Consideration ia of A10 Rome II: law applicable to unjust enrichmentSC Commercial Bank Privatbank v Kolomoisky & Ors [2025] EWHC 1987 (Ch) http://www.bailii.org/ew/cases/EWH…

— Geert Van Calster (@gavclaw.bsky.social) 2025-08-06T10:16:52.929Z

Vesna Lazic (Asser Institute, Utrecht University) has published an interesting case note on the complex case of CJEU Judgment C-394/22 Oilchart International NV v O.W. Bunker Nederland BV, ING Bank NV in Revue de Droit Commercial Belge. This case dealt with the interaction between the Brussels I-bis Regulation and the Insolvency Regulation. You can read it here: 2025 Note rdc_tbh2025_2p308 .

In this case, the Court held that:

Article 1(2)(b) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, must be interpreted as not applying to an action brought in a Member State against a company seeking payment for goods delivered which does not mention either the insolvency proceedings opened previously against that company in another Member State or the fact that the claim was already declared in the insolvency estate.

 

The Law Commission of England and Wales is reviewing how private international law operates in the context of electronic trade documents and digital assets. As previously reported on this blog, on 5 June 2025 the Law Commission published a consultation paper (paper; summary) proposing reform to certain rules of private international law that apply in the context […]

Annoucement prepared by Eduardo Silva de Freitas (Asser Institute and Erasmus University Rotterdam)

The T.M.C. Asser Institute is organising the conference “Adapting Private International Law in an Era of Uncertainty” as part of its 60 Years Series. The event will take place in The Hague (The Netherlands) on Friday, 24 October 2025, and will gather academics, practitioners, and early career researchers who will address current topics in Private International Law, including developments in the digital age and the protection of weaker parties.

The programme is available by clicking here: asser-institute-60-years-series_final.pdf

To register for the conference, please visit: T.M.C. Asser Instituut Registration Form

For more information you can contact the organisers at: E.Silva.de.Freitas@asser.nl or V.Lazic@asser.nl

In June the volume “Sustaining Access to Justice: New Avenues for Costs and Funding” was published in the Civil Justice Systems series of Hart Publishing (2025).  The book is edited by Xandra Kramer, Masood Ahmed, Adriani Dori and Maria Carlota Ucín. This edited volume results from a conference held at Erasmus University Rotterdam, as part of the Vici project on Affordable Access to Justice funded by the Dutch Research Council (NWO).  It contains contributions on access to justice themes, in particular costs and funding of litigation, by key experts across Europe, Latin America and Asia. More information, including the table of contents is available at the Bloomsbury website here.

The book explores the dynamic landscape of legal costs and financing from three perspectives: regulatory frameworks in public and private funding; new trends and challenges in contemporary legal financing; and the transformative potential of alternative dispute resolution (ADR) and online dispute resolution (ODR) procedures to streamline civil justice processes and expand access to justice.

By addressing the intersectionality of legal, economic, political, market and social dynamics, the book aims to provide an encompassing understanding of the inherent complexity of costs and funding of litigation, and their implications for access to justice.

A seminar on the ocassion of launching the book will take place on 5 September 2025, from 10-12.15 CET.

Program

10.00 Introduction Xandra Kramer, Masood Ahmed, Carlota Ucin, Adriani Dori

10.15 Jacek Garstka (European Commission) – EC perspective on the access to justice and the role of litigation funding

10.25 Maria Jose Azar-Baud – Trends in Funding of Collective Litigation

10.35 Alexandre Biard – Enforcing Consumer Rights: Costs and Funding

10.50 Discussion

11.10 Eduardo Silva de Freitas – Justice for a Price: Funders, Fees and the RAD

11.20 Marcel Wegmüller – ESG and Litigation Funding: A Practitioner’s View

11.35 Adrian Cordina – Regulating Litigation Funding: A Law and Economics View

11.45 Stefaan Voet/Masood Ahmed – Beyond Litigation: Cost-Effective Strategies for ADR and ODR

12.00 Discussion and Conclusion

More information and (free) registration here.

The Aberdeen Centre for Private International Law & Transnational Governance (CPILTG) will be hosting a webinar by Professor Caroline Rapatz (University of Kiel, Germany) on 20 August 2025, 11am – 12pm noon.

More information is available here.

 

On 20 August 2025, from 11 to 12 am UK time, the Aberdeen Centre for Private International Law and Transnational Governance will host a webinar featuring Caroline Rapatz (Kiel University) on Beyond State Borders, Beyond the Situs Rule? Private International Law Issues of Resource Extraction in Antarctica, the Deep Seabed, and Outer Space. The webinar […]

The first issue of the Revue critique de droit international privé for 2025 has been published. It features the proceedings of the international conference held in honour of the distinguished Austrian-American conflicts scholar Albert A. Ehrenzweig, which took place in Vienna in June 2024 under the scientific coordination of Matthias Lehmann and Florian Heindler. In addition, this […]

“The 2025 International Arbitration Survey: The Path Forward”

Luke Nottage (University of Sydney)

The 14th Queen Mary University of London Survey, again in collaboration with international law firm White & Case, was dissected at an Australian launch seminar (expertly moderated by partner Lee Carroll) at their Melbourne office on 22 July 2025. Some “early insights” had been provided during Paris Arbitration Weeks, when the Survey report was not yet public. This analysis delves deeper into the report and key findings, drawing also on the discussion with our co-panellists, including some suggestions for future research.

Survey Methodology

This latest Survey shows how the responses have become more expansive and therefore reliable over time. Although not a random survey, 2402 responses were received for the written questionnaire (the response rate is unspecified). This is significantly greater than “more than 900” respondents for the 2022 Survey focused on energy disputes, 1218 for the general 2021 Survey, and just 103 for the inaugural Survey in 2006. This study was again mixed-method, adding qualitative research through 117 follow-up interviews.

This increase in Survey participation arguably indicates the growing awareness of the research and interest in its results, as well as the proliferation and diversification of international arbitration (IA) over the last two decades. Overall respondents in 2025 (Chart 26) primarily practiced or operated in the Asia-Pacific (47%), illustrating arbitration’s shift (along with economic activity) into Asia; separately in North America (a further 10% of respondents), Central and Latin America (7%); plus Europe (10%) and Africa (6%).

Respondents’ primary roles (Chart 23) were counsel (35%), arbitrators (17%), both (14%), arbitral institution staff (9%), academics (8%) and tribunal secretaries (2%). Surprisingly, there were few in-house counsel (3%), who historically and anecdotally tend to be more concerned eg about costs and delays. Few respondents were primarily experts (1%), which may reflect the declining professional diversity within IA.

Arbitration with or without ADR

The 2025 Survey asked again about respondents’ preferred method of resolving cross-border disputes (Chart 1). IA together with ADR was most popular (48%), compared to standalone IA (39%). The Survey contrasts this with 59% versus 31% in 2021 (p5). That shift could indicate that IA has been working effectively to address eg persistent complaints about its costs and delays.

However, more work needs to be done by IA stakeholders, as in the 2015 Survey only 34% of respondents had preferred IA with ADR, versus 56% preferring just IA. This indicates that the trend over the last decade remains towards combining IA with ADR. Additionally, future research could usefully ask what is meant by IA “together with ADR”. As co-panellist Leah Ratcliff remarked from her experience (now as in-house counsel in Australia), parties are more comfortable with clauses providing for (structured) negotiations rather than (potentially still quite expensive) mediation before IA. It would also be interesting to check respondents’ preferences regarding Arb-Med (arbitrators actively promoting settlement, or engaging an Arb-Med-Arb process as in Singapore – arguably showing up in the 2022 SIDRA Survey, Exhibit 8.1).

The 2025 Survey commentary also suggests that ADR preference may be partly “influenced by cultural factors” (p6), noting European respondents favoured more standalone IA (51%) compared Asia-Pacific respondents (37%). However, recall that overall 39% favoured IA anyway.

There also remains great diversity within Asia regarding legal culture – let alone general culture. For example, first there are common law jurisdictions (eg Singapore, Hong Kong, Australia) with strong traditions now of domestic mediation for commercial disputes, due to high costs and delays in litigation initially (and sometimes still). This carries over into more willingness to agree to multi-tiered clauses mandating even mediation before arbitration. Secondly, however, there are some common law jurisdictions in Asia (notably India, despite extensive court delays) with no such tradition of privately-supplied mediation services. Relatedly, their legal advisors and parties are more reluctant to propose Med-Arb clauses in international contracts (although they may agree to them if proposed, if obtaining other benefits through negotiations). Thirdly, civil law jurisdictions (like Japan, with more efficient courts plus some Court-annexed mediation, but also mainland China) also seem less amenable to Med-Arb clauses, although long comfortable with clauses providing for good faith negotiations prior to IA. In addition, there is even greater diversity across Asia regarding Arb-Med (basically only practiced intensively in China, partly in Japan).

Preferred Seats and Rules

Earlier surveys had started to identify Singapore, Hong Kong and mainland Chinese cities within top preferred seats, along with traditional venues like London and Paris. Yet it was unclear whether this reflected the growing proportion of Asia-Pacific (essentially Asian) respondents. The 2025 Survey helpfully helps to address this question. Globally, ie among all respondents (Chart 3), the most preferred seat is London (chosen, among up to five seats, by 34%), then Singapore and Hong Kong (31% each), then Beijing and Paris (19% each). However, London and Singapore were ranked in the top four for all regional respondents, and Paris too except for Asia-Pacific respondents (Chart 2). Otherwise, the European and Asia-Pacific respondents “show strong preferences for seats in their respective regions” (2025 Survey, p7).

Quite similarly, LCIA Rules (nominated globally by 25% of all respondents, again with up to five preferences) were preferred in all regions except the Asia-Pacific, while SIAC Rules (chosen by 25%) and UNCITRAL Rules (15%) were preferred for all regions except Central and Latin America (Charts 4 and 5). By contrast, HKIAC Rules (25%) were most preferred by Asia-Pacific respondents (36%), but not selected among top 5 preferences from respondents from other regions. As co-panelist (and experienced arbitrator) Michael Pryles noted at the launch seminar, Hong Kong and HKIAC Rules still benefit as a compromise for transactions and disputes involving mainland China. He also rightly suggested, as did an audience member, that asking about “preferences” may not give the full picture. This could be usefully compared with evolving actual practice, including arbitration case filings. Over 2024, for example, HKIAC handled 352 new arbitration cases (77% international) whereas SIAC handled 625 (91% international).

Co-panellist Diana Bowman, new Secretary-General of the ACICA, remarked that the ACICA Rules did not quite make Chart 5, despite the Australian Centre’s increased case filings in recent years. As a former Rules committee member (2004-2024), I added that arbitral institutions should not just be judged by case filing statistics. Those depend for example on geography, although there may be scope for Australia to focus on niches, such as the South America – Southeast Asia or South Asia trades, or (as Pryles also observed) specialist fields such as disputes over resources. In addition, improving Rules (and seats more generally) can allow local parties more credibly to propose them but then compromise in negotiations to obtain other contractual benefits.

Pryles also shared experiences and views about the growing impact on IA from  sanctions on parties or participants. Notably, 30% of respondents noted that sanctions led to a different seat being chosen (Chart 6).

The 2025 Survey also found that 39% thought awards set aside at the seat should be enforceable in other jurisdictions (Chart 8), whereas 61% thought not. The 39% proportion is surprisingly high, as only French courts uniformly adopt this approach. Courts elsewhere will usually not enforce, unless there is some particularly egregious flaw regarding the seat court (such as proven corruption) or seat jurisdiction (such as legislation retrospectively impacting arbitration agreements or awards). Perhaps the 39% of respondents agreed with enforcement but only in such exceptional circumstances, which might then be separated out as a third possibility in future research. Meanwhile, this trend (and growing deference towards decision of seat courts instead upholding challenged awards) should reinforce the importance of carefully choosing the seat.

IA Enforcement and Efficiency

Past Surveys (and other research) typically identified enforceability of IA awards (and agreements), neutrality and expertise of arbitrators, flexibility in procedures, then privacy and confidentiality, as major advantages over cross-border litigation. The 2025 Survey innovated by focusing on the growing awareness and engagement in various public interest elements (eg environmental) even in commercial IA, including its perceived advantages instead of litigation. Arbitrator expertise (47%), avoiding local courts and laws (42%) and (broader?) neutrality (28%) were often chosen from among three options (Chart 15). Confidentiality was selected by 34% of respondents, which seems understandable given these are still commercial disputes (not ISDS arbitrations involving greater public interests and so already associated with more transparency). Enforceability of awards was only chosen by 32%, but this may reflect greater actual or anticipated problems with public policy or arbitrability exceptions to enforcement.

Then 2025 Survey also usefully drilled down into another commonly posed question: voluntary compliance with IA awards (Chart 7). Interestingly respondents said this happened similarly, almost always or often, for non-ICSID awards against states (33%) as for ICSID awards (34%), despite most of the latter involving the more delocalised ICSID Convention enforcement regime. Also surprisingly, good compliance for non-ICSID private awards was only reported by 40% of respondents. This may also indicate persistent question around “formalisation” and over-lawyering in IA, discussed more broadly under “efficiency and effectiveness” in the 2025 Survey (pp15-19).

Notably, respondents were asked to chose up to three options for processes that would most improve efficiency in IA (Chart 10). The most popular were expedited arbitration (50%, generating further questions) and early determination of unmeritorious claims or defences (49%). But there was also interest in non-binding pre-arbitral assessments by an expert (13%), mandatory settlement discussions (12%) or mediation (11%) in procedural timetables, and even “baseball arbitration” (11%). Interestingly, as this remains a hot topic for multi-tiered clauses, 7% chose “limiting grounds to challenge pre-arbitration ADR outcomes in arbitration proceedings” (rather than in court). Less surprisingly, as these impact on fees earned by counsel (the largest respondent group) and are rarely mentioned in arbitral Rules, only 1% picked “sealed offers” as a mechanism to improve efficiency.

The survey found “perhaps most surprisingly, given the respondents’ generally favourable view of combining arbitration with ADR, the option of multi-tiered dispute resolution clauses with mandatory ADR processes was included by fewer than 1% of respondents as one of their three picks. To some interviewees, ADR adds an unnecessary procedural layer. Others question the utility …” (p16). However, this low response rate arguably is due to the question’s phrasing, which asked about measures to improve efficiency in arbitration (not the overall dispute resolution process).

A final hot topic canvassed in the 2025 Survey concerns AI in IA (pp27-33). Pryles was skeptical about arbitrators delegating too much to Artificial Intelligence for their reasoning. Surprisingly, however, although 71% of respondents had never used AI for “evaluating legal arguments” in the past 5 years, for the next 5 years this was expected to drop to 31% (Chart 18). Admittedly, some of this may be done by lawyers and so less problematic than for arbitrators.

Less controversial is the existing use of AI for “document review” (never used so far by only 41%, expected to drop to 10%). However, that raises the question of whether an even more efficient approach would be for arbitrators to more pro-actively help identify the issues to be determined, and hence relevant evidence. The 2012 Survey (Chart 9) had found that to be the best means experienced to expedite arbitral proceedings, even when phrased as arbitrators doing this “as soon as possible after constitution” of the tribunal (which is more controversial than as the arbitration progresses, eg under the JCAA Interactive Arbitration Rules).

Conclusion

The 2025 Survey, especially combined with the earlier ones, provides a rich resource to understand current practices and concerns in IA. It also helps identify future opportunities and challenges, as well as promising ongoing research into this always-evolving field.

 

 

A new issue of ZEuP – Zeitschrift für Europäisches Privatrecht is now available and includes contributions on EU private law, comparative law and legal history, legal unification, private international law, and individual European private law regimes. The full table of content can be accessed here: https://rsw.beck.de/zeitschriften/zeup.

The following contributions might be of particular interest for the readers of this blog:

• Pacta Sunt Servanda’s Soliloquy Amidst Sanctions: The Impact of EU Sanctions on Contractual Performance in Arbitration Proceedings
  Helmut Ortner, Veronika Korom and Marion on the Impact of EU Sanctions on Contractual Performance in Arbitration Proceedings: EU sanctions against Russia and Russia’s countermeasures have significantly disrupted trade, supply chains, and contractual relations, sparking disputes frequently resolved through arbitration. European legal systems provide a range of mechanisms—including force majeure, impossibility, frustration, and hardship—to address sanctions-related performance impediments. Despite doctrinal divergences, these frameworks tend to converge on practical outcomes. To mitigate risks and increase legal certainty, parties are well-advised to incorporate tailored clauses in their contracts.
• Eigentumsvorbehalte in grenzüberschreitenden Warenkaufverträgen mit englischen Käufern
  Insa Stephanie Jarass on retention of title clauses in contracts with English buyers: In PST Energy 7 Shipping LLC v OW Bunker Malta Ltd (The Res Cogitans) [2016] UKSC 23, the Supreme Court held that the Sale of Goods Act 1979 no longer applies to certain con-tracts containing retention of title clauses which had previously always been categorised as contracts for the sale of goods. This article analyses the legal implications of this decision for contracts for the supply of goods to Eng-land. In addition to the legal uncertainties that have always surrounded the validity in rem of retention of title clauses under English law, the decision adds a new level of complex-ity at the contractual level that requires par-ticular attention when drafting international contracts.
• Die europäische vis attractiva concursus – Altbekanntes, Neues und Ungeklärtes zu Reichweite, Kompetenzkonflikten und materieller Sperrwirkung
  Fabian Kratzlmeier comments on the decision by the ECJ in C-394/22, addressing the law applicable in the context of insolvency proceedings.

 

by Patrick Ostendorf (HTW Berlin)

In the recent and interesting case of LLC Eurochem v Société Generale S.A. et al [2025] EWHC 1938 (Comm), the English High Court (Commercial Court) considered the extent to which economic sanctions enacted by a foreign jurisdiction (EU law in this instance) can impact the enforcement of contractual payment claims (governed by English law) in English courts. More broadly, the decision also highlights the somewhat diminishing role of the Rome I Regulation (and its interpretation by the European Court of Justice) in the English legal system, and probably that of conflict of laws rules in general.

The underlying facts

A Russian company, respectively its Swiss parent (the assignee of the claimed proceeds of the drawdown), both of which are ultimately controlled by a Russian oligarch, claimed €212 million from two banks (one French and one Dutch, the latter operating through its Italian branch) out of six on-demand bonds governed by English law, based on corresponding exclusive jurisdiction agreements in favour of English courts. The performance bonds had been issued by the defendant banks to secure the proper performance of a contract for the construction of a fertiliser plant in Russia, which was terminated as a consequence of Russia’s illegal invasion of Ukraine. When the Russian company called on the bonds to recover advance payments made under the construction contract, the banks refused to pay, arguing that doing so would violate applicable EU sanctions.

The Commercial Court agreed with the banks that payment under the bonds would indeed breach both Art. 2 of Council Regulation (EU) No 269/2014 and Art. 11 of Regulation (EU) No 833/2014. However, even though the ultimate owner of the claimant was also subject to UK sanctions, UK sanctions did not apply in this case, as payment under the bonds would not have involved any acts in the UK or by UK companies or persons.

The key question

The key question was therefore this: Could the banks rely on the EU sanctions as a defence against the payment claim in an English court, given that their contractual performance would be illegal under foreign law? According to the Ralli Brothers principle (as established by the English Court of Appeal in Ralli Brothers v Companie Naviera Sota y Aznar [1920] 2 KB 287 and also serving as a blueprint for Art. 9(3) of the Rome I Regulation), the answer would be yes if the contractual performance required an act to be carried out in a place where it would be unlawful to do so. However, was the place of performance in the EU in this case, despite the fact that, under English common law, the place of payment is generally where the creditor (here, the claimant, as the beneficiary) is located, unless otherwise agreed by the parties?

The court’s resolution

The resolution was straightforward in relation to the defendant Italian branch, as the corresponding bond incorporated the ICC Uniform Rules for Demand Guarantees (URDG) and Art. 20(c) of the URDG explicitly states that payment is to be made at the branch or office of the guarantor (para. 447). However, the Commercial Court also answered this question in the affirmative with regard to the payment claims against the French bank (the relevant five bonds had not incorporated the URDG). This was based on the general proposition that, in relation to on-demand instruments, the place of performance should generally be where the demand must be made — hence in this case in France rather than Russia or Switzerland (paras 449 ff.).

Public policy was the alternative reasoning offered by the Commercial Court

More interesting still is the alternative argument offered by the Commercial Court. The court explicitly agreed with the defendants that the bonds should not have been enforced, even if the place of performance were in Russia (in which case the Ralli Bros. principle could accordingly not apply). The court postulated that, even outside the Ralli Bros. rule, ‘a sufficiently serious breach of foreign law reflecting important policies of foreign states may be such that it would be contrary to public policy to enforce a contract’ (paras 466 et seq). According to the defendants (and as confirmed by the court), the principle of comity was engaged particularly strongly here, given that the defendants would have faced prosecution, significant fines and the risk of imprisonment for individuals acting on behalf of the banks in France and Italy if they had paid.

Comments

The alternative reasoning given by the Commercial Court for the unenforceability of the bonds based on public policy seems to have two flaws.

Firstly, the view that enforcing a contract may be contrary to public policy due to a sufficiently serious breach of foreign law even outside the Ralli Bros. rule cannot be based on a clear line of precedent. The Commercial Court only refers to two High Court decisions, the more recent of which is Haddad v Rostamani (2021) EWHC 1892, para. 88. These decisions are difficult to reconcile with the Court of Appeal’s finding in Celestial Aviation Services Limited v Unicredit Bank GmbH [2024] EWCA Civ 628, paras. 105 et seq and prior High Court precedents relied on in this judgment, in particular Banco San Juan Internacional Inc v Petróleos De Venezuela S.A. [2020] EWHC 2937 (Comm), para. 79, which states that, ‘the doctrine therefore offers a narrow gateway: the performance of the contract must necessarily involve the performance of an act illegal at the place of performance. Subject to the Foster v. Driscoll principle, […] it is no use if the illegal act has to be performed elsewhere’. In Banco San Juan, the High Court referred to the Foster v Driscoll principle as the only legitimate expansion of the Ralli Bros. rule. But this principle is not applicable in the present case: It is limited to contracts entered into by the parties with the intention of committing a criminal offence in a foreign state (Foster v Driscoll [1929] 1 KB 470, 519).

Secondly, it is somewhat ironic that, in order to give effect to EU sanctions law, the Commercial Court relies on English common law precedents that hardly align with Art. 9(3) of the Rome I Regulation. This is because the ECJ has expressly taken the view that Art. 9 contains an exhaustive list of situations in which a court may apply foreign overriding mandatory provisions not merely as a matter of fact (see ECJ, 18 Oct 2016, Case C-135/15, Nikiforidis: ‘Article 9 of the Rome I Regulation must therefore be interpreted as precluding the court of the forum from applying, as legal rules, overriding mandatory provisions other than those of the State of the forum or of the State where the obligations arising out of the contract have to be or have been performed’).

Although the Commercial Court does not mention the Rome I Regulation in this regard, it still forms part of English statutory law as ‘assimilated law’ (formerly ‘retained EU law’). The justification for ignoring the Regulation is probably the prevailing, though (against the background of the general function of private international law and the fact that Art. 9 of the Rome I Regulation explicitly and exhaustively deals with this very problem) unconvincing, view in England that the Ralli Bros principle, and consequently its potential expansion in the present case, is not a conflict of laws rule in the first place: Instead, it is considered a principle of domestic English contract law, therefore unaffected by the exhaustive nature of Art. 9(3) of the Rome I Regulation (in favour of this view, for example, Chitty on Contracts, Vol. I General Principles, 35th edition (2023), para. 34-290, Dicey, Morris & Collins, The Conflict of Laws, Vol. 2, 16th edition (2022), para. 32-257 with further references. Contrary, A. Briggs, Private International Law in English Courts (2014) para. 7.251, who rightly notes that such a characterisation ‘was only possible by being deaf to the language and tone in which the judgments were expressed, and it is a happy thing that the Rome I Regulation puts this seemly principle on a statutory footing’ and characterises the Ralli Bros principle accordingly as a ‘rule of common law conflict of laws’ (A. Briggs, The Conflict of Laws, 4th edition, 2019, p. 239). For a full discussion of the history and characterisation of the Ralli Bros rule, see W. Day (2020) 79 CLJ 64 ff.)

The need to rely both on a questionable characterisation and expansion of the Ralli Bros principle in this case may be due to English contract law (at least in its substantive core) being ill-equipped to address factual impediments caused by foreign illegality for the parties. Unlike civil law jurisdictions, which can rely on the doctrine of (temporary) impossibility to address such cases — the recent decision of the Court of Arbitration in CAS 2023/A/9669, West Ham United Football Club v PFC CSKA & FIFA (applying Swiss law), is a case in point — the doctrine of frustration is apparently too limited in scope to recognise factual impediments triggered by foreign illegality. Furthermore, the doctrine of frustration does not offer the necessary flexibility as it results in the termination of the contract rather than merely suspending it temporarily.

A recent judgment from the Swedish Supreme Court interprets the principle judgments from the Court of Justice of the EU (CJEU) holding arbitration in investment arbitration as incompatible with EU law as conservatively as possible by allowing for invalidation only for “EU internal” relations. Hence, the arbitral award is upheld in relation to a Swiss […]

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Cathay Biotech Inc v Wegochem Europe BV ECLI:NL:RBAMS:2025:3091 is a judgment of relevance to the meaning of ‘arising from’, used frequently in Rome II, Regulation 864/2007; as well as a salutary lesson in how not to apply Article 4 Rome II.

First, on the issue of ‘arising from’ in Article 8.

An alternative to ‘arising from’ used in Rome II is ‘arising out’, for instance in Article 7’s environmental claims: see e.g. Begum v Maran and see my paper on A7 here.

In China, patent infringement judgments have been issued regarding the production of nylon. PRC infringement continues by other entities that have also been held to account by Chinese courts. In current proceedings the patent holder sues a Dutch buyer of the nylon for unlawful conduct, arguing it knew or consciously accepted the significant risk that it was trading in infringing products.

In determining applicable law under Rome II, Cathay Biotech argue A4 is engaged; Wego Europe suggests A8(1) applies:

Article 8
Infringement of intellectual property rights
1. The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed.
2. In the case of a non-contractual obligation arising from an infringement of a unitary Community intellectual property right, the law applicable shall, for any question that is not governed by the relevant Community instrument, be the law of the country in which the act of infringement was committed.
3. The law applicable under this Article may not be derogated from by an agreement pursuant to Article 14.

The court sides with Cathay Biotech: [5.6]:

The court agrees with Cathay Biotech that it bases its claim on unlawful conduct by Wego Europe… Although this alleged unlawful conduct by Wego Europe originates from the theft of trade secrets by third parties and (subsequent) patent infringements committed by third parties, this does not mean that there is an obligation between Wego Europe and Cathay Biotech ‘arising from’ an infringement of an intellectual property right as referred to in [A8(1) Rome II]. After all, the focus is on the unlawful conduct of Wego Europe described above, not on the question of whether Wego Europe (itself) infringes Cathay Biotech’s Chinese patents. The invocation of a patent right is therefore not the core of the dispute. The scope of the Rome II Regulation and Article 8 means that the aforementioned article only concerns claims relating to a non-contractual infringement of these (intellectual property) rights.

I disagree. Cathay’s claim as it is summarised in 4.4 walk and talks intellectual property rights infringement:

Cathay Biotech bases its claim, in summary, on the following. Wego Europe acts unlawfully towards Cathay Biotech by importing and distributing [long chain dicarboxylic acid] LCDA from the Facility in Europe, while knowing that the production of these LCDA by Hilead and the Users infringes Cathay Biotech’s Chinese patents and that many Chinese court rulings in this regard are being systematically ignored. Wego Europe facilitates the unlawful actions of Hilead and the Users by creating a market for these parties and knowingly profits from their unlawful conduct.

Patent infringement is not a context for Cathay’s claim against Wego: it is its roots and branch. The statutory construction of both ‘arising from’ and ‘out’ (similarly, see Lliuya v RWE where no time was wasted at all on whether climate claims ‘arise out’ of environmental damage) instruct a causal link at the lower level of causal intensity.  Cathay’s claim and its formulation approaches that of conspiracy to cause or at the very least purposedly profit from patent infringement. That in my view must fall within Article 8.

Once Article 8 so dismissed, the court then goes off the rails in its Article 4 locus damni analysis. [5.7 and 5.8]

• it links A4 Rome II squarely to A7(2) Brussels Ia, recalling that Article’s split between Handlungsort and Erfolgort.
• It then squarely suggests that within the A4 Rome II analysis, claimant may chose either Handlugsort or Erfolgort as determining the applicable law (plainly wrong);
• it identifies each distribution center within the EU as a Handlungsort. This is as such an interesting proposition, echoing my suggestions for competition law; yet it is completely out off place in the A4 Rome II analysis.
• it considers Chinese law as applicable law under the Handlungsort analysis (although this would require Cathay’s economic loss (its consolidated accounts are in China) to be considered as ‘direct’ damages per A4, instead of eg the place of the loss of market share in the EU Member States as places of direct damage);
• it finally ends up [5.10] in Dutch law as applying to the claim as a whole under A4(3)’s escape clause, in essence because The Netherlands is held to be the locus delicti commissi: Wego is held to have organised its nylon distribution entirely from The Netherlands.

The judgment amounts to very poor engagement with Rome II.

Geert.

EU Private International Law, 4th ed. 2024. Chapter 4.

Applicable law, patent infringement claimInteresting judgment on (non)application of A8 Rome II viz EU-domiciled purchaser of product made following patent violationMeaning of 'arising from' IPR infringementCathay Biotech v Wegochem ECLI:NL:RBAMS:2025:3091 deeplink.rechtspraak.nl/uitspraak?id…

— Geert Van Calster (@gavclaw.bsky.social) 2025-05-27T07:00:33.048Z

A note on Sidoli v Sidoli [2025] EWHC 1425 (Ch) in which Dew DM deals with a classic issue of characterisation aka qualification,  namely whether the claim at issue is one in rem or one in succession.

[Note [15] an interesting side issue viz the ethics of having deciding a case with reference to an earlier one, Del Curto v Del Curto, with which he disagrees and in which he was on the losing side].

The Italian proceedings, recognition of which is being sought, vindicate Claimants’ rights over Davide Sidoli’s estate, including their rights to assets situated in England and Wales. This in essence begs the question whether the subject matter of the action in Italy was immoveable property not in Italy, hence engaging the Mozambique rule. Kireeva v Bedzhamov features of course.

[27] Dew DM remarks justifiably with respect to characterisation

Claims, in whatever jurisdiction, often have a multiplicity of subject-matter, even more so where the dispute relates to an entitlement to assets from an estate, where the subject-matter can variously be described as the Will, the estate generally, or the individual assets of that estate. Conflicts of law principles, however, often ask the court to decide in an overall sense what the subject matter of a dispute is before determining what system of law applies to it.

[28] it follows that the approach not to be followed is that if one can identify within the claim an asset which is both immoveable and out of the original court’s jurisdiction then any registration under the 1933 Act must be set aside. [29] The subject matter of the claim that was before the Italian Court was Davide’s succession. It was that which was at issue and it was the determination of those issues of succession which gave the Claimants, under Italian law, a right to compensation (and other orders) over the whole of Davide’s estate.

Hence the subject matter of the proceedings in Italy was not immoveable property. However he then holds, having analysed the 1933 Act in both its historical context and its statutory language, that the claim at issue falls within the meaning of the ‘administration of the estate of a deceased person’ over which as a result of the provisions of the 1933 Act, the Italian courts did not and should not have exercised jurisdiction.

Contrasting Sidoli with Del Curto, it is clear that a clarification by the Court of Appeal may be warranted seeing as the outcome of a registration process may now depend on which first instance judge one finds itself in front of.

Geert.

In conflict of laws exam season, excellent example of relevance of qualification aka characterisationWhether claim is in rem or in succession, leading to different outcomes for recognition of Italian judgment in E&WSidoli v Sidoli [2025] EWHC 1425 (Ch)www.bailii.org/ew/cases/EWH…

— Geert Van Calster (@gavclaw.bsky.social) 2025-06-11T07:06:15.153Z

The following information was kindly shared with us by Matthias Lehmann (University of Vienna).

At the University of Vienna, a Chair for Comparative Law and Private International Law will become vacant in 2026 (current holder: Professor Helmut Ofner).

The role will be to teach and research private international law and comparative law. Knowledge of the German language and the Austrian legal system is not a prerequisite; however, applicants should be willing to learn German and familiarise themselves with Austrian law. Familiarity with several legal systems is highly desirable. A specialisation in a particular area, such as international family law or international commercial law, is welcome; publications in the field of uniform law and European law are an advantage.

The successful candidate is expected to relocate to Vienna, which is consistently ranked as the most or second-most liveable city in the world (see Global Liveability Index). Initial appointments to a first professorship may be limited to six years, with the possibility of extending it to a permanent position.

More information on the position is available here. The application deadline is 17 September 2025.

The Hart Series “Studies in Private International Law – Asia” continues to deliver outstanding volumes, the latest being authored by Lemuel D. Lopez (lecturer of Law at the Royal Melbourne Institute of Technology University), and titled “Choice of Forum Clauses in Asia”.

This marks the 13th volume in the series, which was launched only a few years ago in 2019, with many more volumes expected to follow.

The topic is of great significance, and this book provides a much-needed Asian perspective, shedding light on how forum selection clauses function within the region’s unique legal environment.

 

The book’s description reads as follows:

This book compares and explains the approaches taken by Asian courts when choice of forum clauses in international commercial contracts are challenged in litigation.
It examines key common law jurisdictions (Singapore, Hong Kong and Malaysia), civil law jurisdictions (China, Japan, and Indonesia), and hybrid jurisdictions (the Philippines).
With Asia’s ascent in cross-border trade and investment, alongside a corresponding increase in cross-border litigation, understanding how Asian courts address choice of forum clauses in international commercial contracts has never been more critical. Employing a comparative law method, the book identifies and explains the relief and remedies used by Asian courts in enforcing choice of forum clauses, analysing how their classification as either contractual or procedural in nature shapes judicial approaches. It further distinguishes choice of forum clauses from arbitration agreements and explores their interaction with other contractual provisions. Party autonomy – as the parties’ freedom to determine the contents of the choice of forum clause and the freedom to control the flow of litigation – is also critically scrutinised.

Furthermore, the book investigates the factors courts consider in resolving key choice of forum clause issues (ie, enforceability; specific relief to be granted; existence, validity, interpretation of choice of forum clauses; role of mandatory rules, public policy, and international interests) and explores the prospects for future development of this area of law in Asia.

Crucially, the book highlights the unique approaches of Asian courts, while underscoring the differences and similarities among common law, civil law, and hybrid jurisdictions.

 

Table of Contents

1. Introduction
2. The Nature of Choice-of-Forum Clauses
3. Party Autonomy and Choice-of-Forum Clauses
4. The Enforcement of Choice-of-Forum Clauses: Singapore, Hong Kong, Malaysia, Philippines
5. The Factors Considered in Granting Relief: Singapore, Hong Kong, Malaysia, Philippines
6. Existence, Validity and Interpretation: Singapore, Hong Kong, Malaysia, Philippines
7. Mandatory Rules, Public Policy and International Interests: Singapore, Hong Kong, Malaysia, Philippines
8. Choice of Forum Clauses in Asian Civil Law Countries: China, Indonesia and Japan
9. Conclusions

[If you do use the blog for research, practice submission or database purposes, citation would be appreciated, to the blog as a whole and /or to specific blog posts. Many have suggested I should turn the blog into a paid for, subscription service however I have resisted doing so. Proper reference to how the blog is useful to its readers, will help keeping this so.]

The CJEU has held early July in C‑99/24 [Chmieka], on the application ratione temporis of Brussels Ia (cq Brussels I), the application of Article 24(1) [22(1)]’s rights in rem exclusive heads of jurisdiction, ‘contract’ v ‘tort’, and the anchor defendant mechanism: a whole bunch of jurisdictional issues resulting from, on the merits, a fairly straightforward case it seems.

The issue arose in an action for payment of compensation, by a Polish municipal authority against a natural person domiciled in The Netherlands, for the non-contractual use of immovable property situated in Poland. That person was one of the daughters of the original tenant. The rental agreement having been entered into by the mum in 1994, an eviction order was issued in 2007. The mum and, it seems, some of the daughters did not leave the property and in 2013 the municipality asked and obtained a compensation order for the use of the house between 2011 and 2012. That order was served on the family in 2013 (only one of the family members having signed for receipt), and objected to by one of the daughters in a procedure launched in 2023. In that procedure the daughter argues ia that the Polish courts lacked jurisdiction in the 2013 proceedings seeing as, she argued, she had herself been domiciled in The Netherlands since 2007.

Four questions were dealt with.

First, does Brussels I or Brussels IA apply? The question is academic, for the relevant jurisdictional provisions are identical in wording in BIa and BI. The CJEU decided to answer the question anyway. Per A66(1) BIa, it applies only to legal proceedings “instituted … on or after 10 January 2015”. The uncertainty concerns whether the concept of ‘institution of proceedings’ should relate to the date on which the municipality brought the action for payment against the
defendant (15 March 2013) or the date on which the defendant lodged the
statement of opposition (7 July 2023) with a request for review of the case.  The CJEU goes with the former, meaning that in the case at issue, Brussels I applies: [38] , with reference to Hanssen Beleggingen and AMS Neve:

a request for review of the case concerned, such as that at issue in the main proceedings, must be regarded as part of the continuation of the initial action, since that request made by the defendant is an application initiating proceedings which does not constitute proceedings separate from those opened by the initial action, but an extension of that action.

This finding will particularly be of relevance for proceedings where BI and BIa do materially differ.

Next, the potential role for A22 [24]’s right in rem (and tenancies) jurisdiction. In current case the CJEU very much draws the ‘need for restrictive interpretation of the exclusive jurisdictional rules’ card:

[53] (with reference to CJEU Reitbauer):

the assessment of such an action seeking compensation does not require on-site investigations, nor does it involve the assessment of facts or the application of rules and practices of the locus rei sitae in such a way as to justify conferring exclusive jurisdiction on a court of the Member State in whose territory that property is situated

[54] with reference to CJEU Lieber and Gaillard:

First, an action for payment of compensation for the non-contractual use of immovable property, after the termination of a tenancy agreement relating to it, is not covered by that expression because such an action is not based on a right in rem, having effect erga omnes, but a right in personam, which may only be relied upon against the alleged debtor from whom that compensation is sought. Second, an action such as that brought against [the daughter], who is classified as a third party in relation to the terminated tenancy agreement, cannot be included in the concept of ‘tenancies of immovable property’, within the meaning of [A22(1), because such an action does not directly relate to the rights and obligations arising from that tenancy and is therefore not based on the relationship of landlord and tenant

[55]

paragraph 163 [of the Schlosser report suggest that] actions for damages based on infringement of rights in rem do not fall within the scope of [A22] because in that context the existence and content of such rights in rem, usually rights of ownership, are only of marginal significance.

Finally, the interpretation of Article 5 [7] forum contractus v forum delicti: does residing in another person’s property without legal title following the termination of the tenancy agreement authorising the occupation of that property, constitutes tort, delict or quasi-delict?

[58-59] the Court reminds us of the need for autonomous and restrictive interpretation.

[60] with reference to CJEU Obala and Hrvatske Sume

the concept of ‘matters relating to tort, delict or quasi-delict’, within the meaning of [A5(3) BI] includes all claims which, first, do not concern ‘matters relating to a contract, within the meaning of [A5(1)(a)] and, second, seek to establish the liability of a defendant, so that it is necessary to ascertain whether those two conditions are satisfied

[61] with reference to Holterman and Hrvatske Sume

the independent concept of ‘matters relating to a contract’..covers any claim based on an obligation freely consented to by one person towards another

In the case at issue, [62] the facts suggest an A5(3) [7(2)] jurisdiction because

a claim for compensation such as that brought by the applicant in the main proceedings against [the daughter] is not covered by the concept of ‘matters relating to a contract’ because such a claim is based on the fact that a person has occupied immovable property without the free consent of the landlord expressed in the form of a tenancy agreement.

However [67] the national court must

ascertain whether, in the dispute before it, a ‘harmful event occurred’, within the meaning of [A5(3) BI], owing to [the daughter’s] conduct and, more specifically, whether [she] personally occupied the immovable property concerned during the period in question in the main proceedings, that is to say between 2011 and 2012. In the light of the order for reference, it has not been ruled out that [the daughter] resided exclusively in the Netherlands during that period. In the absence of such occupation on her part, no connecting factors making [A5(3)] applicable can be identified.

Finally, the application of A6 [8]’s anchor defendant mechanism: must the Polish court examine the action brought before it so as to decide jointly in respect of all the persons concerned by that action who have resided in the housing in question? A possibility arises from Polish law that different judgments may be delivered in respect of each of those persons, depending on whether the individual concerned did or did not occupy that housing after the termination of the tenancy agreement in question, because there is no joint and several liability between those persons.

Here [71] the CJEU first (with reference to Profit Sim Investment and Athenian Brewery] first of all recalls that the mere fact that the result of one of the proceedings concerned may have an effect on the result of the other does not suffice to characterise the judgments to be delivered in the two proceedings as ‘irreconcilable’. [72-73] The national court must also satisfy itself that the claims brought against more than one defendant are not intended artificially to satisfy the conditions for the application of the anchor defendant mechanism.

Here, [75] “it it seems unlikely that there was, on the date that the action was brought, the same situation of fact and law from which there could have been a risk that ‘irreconcilable judgments’, within the meaning of [A6(1)]”: that is precisely because [76]

[while] the claims for compensation brought by the applicant in the main proceedings against the four persons concerned by that action are, admittedly, connected by their subject matter, the purpose of those claims being identical… it is apparent from the order for reference that, under the applicable provisions of Polish law, first, those claims are severable in so far as different judgments could be delivered in respect of those persons, depending on whether each of those defendants occupied the property concerned during the relevant period, and, second, there is no joint and several liability between them, which appears to imply an individual examination of the facts alleged.

Quite a lot of ground covered.

Geert.

I. Introduction

The question of the application of Islamic law in non-Muslim countries has triggered extensive discussions and debates regarding the consistency of Islamic law rules – whether codified in modern legislation or not – with the forum’s public policy. This issue has attracted particular attention in the field of family law, where various legal Islamic institutions (such as dower, polygamy, and early marriage) have sparked considerable controversy and posed significant challenges in both court practice and academic debate. This is particularly salient in the field of dissolution of marriage, as Islamic practices such as talaq and khul have often been the subject of intense discussions concerning their recognition and validity in non-Muslim jurisdictions.

The case presented here is another example of the complexity inherent in the reception of peculiar Islamic law institutions in private international law. Recently decided by the Nagoya High Court (second-instance court) in its ruling of 12 June 2025, it concerns a type of marital dissolution based on ila (an oath of sexual abstention). To the best of my knowledge, no comparable case involving ila has been decided before in any jurisdiction, which makes this ruling particularly important both in theory and in practice. This is especially so given that resorting to ila in this case appears to have been part of a litigation strategy, anticipating an unfavourable outcome if the case had been brought before the court as a talaq case (see infra V). As such, the case provides an opportunity to consider the nature of this unusual Islamic legal institution, its specific features, and the challenges it may raise when examined by foreign courts.

 

II. The Case:

The parties in this case are a Bangladeshi Muslim couple who married in accordance with Islamic law in Bangladesh and subsequently moved to Japan, where they had their children. All parties, including the children, are permanent residents of Japan.

The case concerns a divorce action filed by the husband (X) against his wife (Y), seeking dissolution of marriage primarily under Bangladeshi law, and alternatively under Japanese law. X argued that, in his complaint, he declared his intention “in the name of Allah” to abstain from sexual relations with his wife; and since four months had passed without any sexual relations with Y, a “talaq-divorce” had been effected and thereby completed in accordance with Bangladeshi law. The divorce action was filed as a result of continuous disagreement and disputes between the parties on various issues including property rights, management of the household finance, and alleged misbehaviour and even violence on the wife’s side. At the time the action was filed, X and Y had already been living separately for some time.

One of the main issues revolved around whether the application of Bangladeshi law, which provides for this form of marital dissolution (referred to in the judgment as “talaq-divorce”), should be excluded due to inconsistency with Japanese public policy under Article 42 of the Act on the General Rules of Application of Laws (AGRAL).

The court of first instance (Nagoya Family Court, judgment of 26 November 2024) held that the “talaq-divorce” (as referred to in the judgment) was valid under Bangladeshi law and that its recognition did not contravene Japanese public policy. Notably, the court emphasized that “any assessment of whether the legal rules applicable between spouses who share the same religious and cultural background violate Japanese public policy should be approached with a certain degree of restraint”, given the strong cultural and religious elements involved in the personal status of the parties, who are both originally Bangladeshi nationals and Muslims who were married in accordance with Islamic law, even if they had been living and residing in Japan for some time.

Dissatisfied with the judgment, Y appealed before the High Court.

Y challenged the first instance judgment on various grounds. She basically argued – inter alia – that, given the strong ties the parties and their children have with Japan and their established life there, the mere fact that the parties are Bangladeshi nationals and Muslims should not justify a restrained implication of public policy, especially considering that the effects and consequences of the divorce would take place in Japan.

 

III. The Ruling

The Nagoya High Court upheld the judgment of the court of first instance, stating as follows (only a summary is provided here, with modifications and adjustments):

Under Bangladeshi law, which governs the present divorce, a husband may dissolve the marriage either through talaq (a unilateral declaration of divorce by the husband) or through other modes. There are several forms of talaq-divorce available to the husband, including ila. The latter entails the husband taking an oath in the name of Allah to abstain from sexual relations with his wife. If no intercourse occurs within four months following the oath, the divorce is considered to have taken effect.

In the present case, considering that Bangladeshi law is the applicable law, the talaq-divorce would be deemed valid, and would be recognized, since a period of four months had passed without any sexual contact between the parties after X made his declaration in the complaint.

Generally, when determining the applicability of Article 42 of the AGRAL, it is not the foreign law’s provisions themselves that should be assessed in abstracto. Rather, the application of the foreign law as the governing law may be excluded [only] where (1)its concrete application would result in a consequence that is contrary to public policy, and (2) the case has a close connection with Japan.

Regarding (1), the marital relationship between the parties had deteriorated over time, and various elements, when taken together, indicate that the parties had already reached a serious state of discord that could reasonably be seen as leading to separation or divorce. Consequently, considering all these circumstances, and taking into account the background of the case, the nature of the parties’ interactions, and the duration of their separation, it cannot be said that applying Bangladeshi law and recognizing the talaq-divorce in this case would be contrary to public policy.

With respect to (2), Y argued that, due to the strong connection between the case and Japan, the exclusion of the application of Bangladeshi in application of article 42 of the AGRAL should be admitted. However, as previously noted, the application of Bangladeshi law in this case does not result in a violation of public policy. Therefore, even considering the strong connection of the case to Japan, the application of Article 42 of the AGRAL cannot be justified.

 

IV. Comments

(*) Unless otherwise indicated, all references to Islamic law here are about classical Islamic law as developed by the orthodox Sunni schools, and not Islamic law as codified and/or practiced in modern Muslim countries.

 

1. Islamic law before Japanese Court

There are several cases in which Japanese courts have addressed the application of foreign laws influenced by or based on Islamic law. These cases have involved matters such as the establishment of filiation, annulment of marriage, parental authority, adoption, and divorce (whether based on the unilateral will of the husband or not). While in few instances the courts have applied the relevant foreign law without particular difficulties (for example, allowing a Japanese woman married to a Pakistani Muslim man to seek and obtain a divorce under Pakistani law), in most cases, the courts have refused to apply such laws on the grounds that they were contrary to Japanese public policy. The rules found incompatible with public policy include, among others, the non-recognition of out-of-wedlock filiation, the prohibition of interfaith marriage, the prohibition of adoption, the automatic attribution of parental authority to the father, and talaq-based divorce (triple talaq). The foreign laws at issue in these cases originate either from Muslim-majority countries such as Iran, Pakistan, Indonesia, and Egypt, or from non-Muslim countries with Muslim minorities who are governed by their own personal status laws, such as Myanmar and the Philippines.

The case commented on here provides a new example of a Japanese court grappling with the application of foreign law grounded in Islamic legal principles.

 

2. Ila and dissolution of marriage

Like many other traditional – and in some views, “exotic” – Islamic legal institutions (such as zihar, li’an, khul, tamlik, tafwidh, mubara’a …… definitions are intentionally omitted), ila is often difficult to apprehend correctly, both in substance and in function.

 

a) What is ila?

Generally speaking, ila can be defined as “the swearing of an oath by a man that he will not have intercourse with his wife” for a period fixed in the Quran (chapter 2, verse 226) at four months (See Ibn Rushd (I. A. Khan Nyazee, trans.), The Distinguished Jurist’s Primer – Vol. II: Bidayat Al-Mujtahid wa Nihayat Al-Muqtasid (Garnet Publishing, 2000) 121).

It worth mentioning first that ila is not an Islamic invention but was practiced in pre-Islamic society. In that context, ila allowed the husband to place considerable pressure on his wife by placing her in a state of marital limbo, which can be for an indefinite period. This left the woman in a vulnerable and uncertain position, as she was neither fully married in practice, nor legally divorced.

Islamic Sharia addressed this practice and, while it did not abolish it – unlike some other pre-Islamic institutions and practices –, it attempted to alleviate its harmful effects, by introducing a period of four months, during which the husband is invited to reconsider his decision and either resume marital life (Quran chapter 2, verse 226)  or dissolve the marriage  (Quran chapter 2, verse 227).

 

b) Ila – Different Practices

However, regarding the actual operation of ila, the schools of Islamic religio-legal jurisprudence (fiqh) diverge significantly on several points (Ibn Rushd, op. cit.). Two issues are particularly relevant here:

i. The first concerns whether :

(i-a) the four-month period stated in the Quran represents a maximum period, at the end of which the marriage is dissolved; or

(i-b) the four-month period merely marks the threshold between an oath of abstention that does not lead to marital dissolution and one that does. According to this latter view, only an oath exceeding four months, or one made for an indefinite duration, qualifies as ila that may result in the dissolution of marriage.

 

ii. The second issue concerns whether

(ii-a) the marriage is automatically dissolved once the four-month period has elapsed, if the husband does take the necessary actions to resume the marital life, that is after performing an act of expiation (kaffara) in accordance with the Quranic prescriptions (notably Chapter 5, verse 89); or

(ii-b), upon expiry of the term, the wife may petition a qadhi (Muslim judge), requesting that her husband either end the marriage by pronouncing talaq, or resume marital relations after performing an act of expiation (Chapter 5, verse 89). In such a case, the qadhi would then grant the husband a specified period to decide. If the husband fails to take either course of action, the qadhi may pronounce the dissolution of the marriage on account of his inaction. Depending on the legal opinion, this dissolution may be categorized either as a talaq issued on behalf of the husband, or as a judicial annulment (faskh).

Traditionally, the Hanafi school, prevalent in Bangladesh, follows positions (1-a) and (2-a), while the other major schools adopt views (1-b) and (2-b).

 

3. Ila and talaq – what’s the difference?

It is not uncommon for ila to be described as “a form of talaq.” This appears to be the position of the High Court, seemingly based on the arguments presented by X’s representative during the trial. It is true that both ila and talaq are prerogatives reserved exclusively for men; women do not have equivalent right (except, in the case of talaq, where the husband may contractually delegate this right to his wife at the time of the marriage). It is also true that both ila and talaq may lead to the dissolution of marriage based on the unilateral intention of the husband. However, describing ila as a “form of talaq” is not – technically speaking – entirely accurate.

i. Under the majority of schools of fiqh – except for the Hanafi –, the distinction is quite clear. This is because unlike talaq, ila, by itself, does not lead to dissolution of marriage. A judicial intervention is required upon the wife’s request for the marriage to be dissolved (which is not required for talaq).

 ii. Under the Hanafi school, however, the distinction between ila and talaq may be blurred due to their substantial and functional similarities. In both cases, a qualified verbal formula places the marriage in a suspended state(*) for a specified period (the waiting period (iddah) in the case of talaq, and the four-month period in the case of ila). If the husband fails to retract his declaration within this period, the marriage is dissolved.

(*) However, this does not apply in the case of a talaq that immediately dissolves the marriage: that is, a talaq occurring for the third time after two previous ones (whether or not those resulted in the dissolution of the marriage), or in the case of the so-called triple talaq, where the husband pronounces three talaqs in a single formula with the intention of producing the effect of three successive talaqs.

 

Nevertheless, a number of important distinctions remain between the two, even within the Hanafi doctrine.

a. The first concerns the frequency with which talaq and ila may be resorted to. Similar to ila, talaq does not necessarily lead to the dissolution of the marriage if the husband retracts during the wife’s waiting period (iddah). However, its use – even if followed by retraction – is limited to two occurrences (Chapter 2, verse 229). A third pronouncement of talaq results in immediate and irrevocable dissolution of the marriage, and creates a temporary impediment to remarriage. This impediment can only be lifted if the woman marries another man and that subsequent marriage is irrevocably dissolved (Quran, Chapter 2, verse 230). By contrast, ila, does not have such limitation and can be repeated without restriction (in terms of frequency), provided that the husband retracts by performing the act of expiation each time.

 b. The second concerns the form of retraction. In the case of talaq, the husband can resume conjugal life at will. No particular formality is required; and retraction can be explicit or implied. In the case of ila, however, retraction must take the form of an act of expiation (kaffara) in accordance with the Quranic prescriptions (Chapter 5, verse 89) before marital relations may resume.

 

4. Ila and public policy

a) Ila – some inherent aspects

As previously noted, ila has traditionally been used as a means for a husband to exert pressure or express discontent within the marriage by vowing abstinence from sexual relations. Under Islamic Sharia, this practice is preserved: husbands – even without making any formal oath of abstinence (ila) – are allowed to “discipline their wives” in cases of marital discord by abstaining from sharing the marital (hajr) as a corrective measure (Quran, Chapter 4, verse 34). Indeed, it is not uncommon that Muslim scholars justify the “rationale” behind this practice by stating that “a man may resort to ila…when he sees no other option but to abstain from sharing the marital bed as a means of disciplining and correcting his wife (italic added)…. In this case, his abstention during this period serves as a warning to deter her from repeating such behavior” (O. A. Abd Al-Hamid Lillu, ‘Mirath al-mutallaqa bi-al-‘ila – Dirasa fiqhiyya muqarana ma’a ba’dh al-tashri’at al-‘arabiyya [The Inheritance Rights of a Woman Divorced by Ila’: A Comparative Jurisprudential Study with Selected Arab Legislations]’ (2020) 4(3) Journal of the Faculty of Islamic and Arabic Studies for Women 630). It is therefore not surprising that some would view ila as “troubling” due to its perceived “sexism” and the fact that wives may find themselves at their husbands’ “mercy” with little thing to do (Raj Bhala, Understanding Islamic Law (Shar’ia) (Carolina Academic Press, 2023) 803).

These aspects, in addition with inherent gender asymmetry in the rights involved, calls into question the compatibility of ila with the public policy of the forum.

 

b) The position of the Nagoya High Court

As the Nagoya High Court rightly indicated, the exclusion of foreign law under the public policy exception does not depend on the content of the foreign law itself, assessed in abstracto. On the contrary, as it is generally accepted in Japanese private international law, public policy may be invoked based on two elements: (1) the result of applying the foreign law in a concrete case is found unacceptable in the eyes of Japanese law, and (2) there is a strong connection between the case and the forum (see K. Nishioka & Y. Nishitani, Japanese Private International Law (Hart, 2019) 22).

The Nagoya High Court’s explicit adherence to this framework, notably by engaging in an in concreto examination of the foreign law and avoiding invoking public policy solely on the ground of its content as some earlier court decisions suggest (see e.g. Tokyo Family Court judgment of 17 January 2019; see my English translation in 63 (2020) Japanese Yearbook of International Law 373), is noteworthy and should be welcomed.

That said, the Court’s overall approach raises some questions. The impression conveyed by the Court’s reasoning is that it focused primarily on the irretrievable breakdown of the marital relationship and the period of separation to conclude that there was no violation of public policy. In other words, since the marital relationship had reached a dead end, dissolving the marriage on the basis of objective grounds or on the basis of ila does not alter the outcome.

Although this approach is understandable, it would have been more convincing if the Court had carefully considered the nature of ila and its specific implications in this case, and eventually explicitly state that such elements were not established. These aspects appear to have been largely overlooked by the High Court, seemingly due to its unfamiliarity with Islamic legal institutions. It would have been advisable for the Court to address these aspects, at least to demonstrate its concerns regarding the potential abusive use of ila.

 

V. Concluding Remarks: Ila as a litigation strategy?

One may wonder why the husband in this case chose to resort to ila to end his marriage. One possible explanation is that Japanese courts have previously ruled that a talaq divorce in the form of triple talaq is inconsistent with public policy (Tokyo Family Court judgment of 17 January 2019, op. cit.). It appears that, anticipating a similar outcome, the husband in this case was advised to take a “safer approach” by relying on ila rather than resorting to triple talaq (see the comment by the law firm representing the husband in this case, available here – in Japanese only).  To be sure, associating talaq solely with its most contested form (i.e., triple talaq) is not entirely accurate. That said, considering how the case under discussion was decided, it is now open to question whether it would have been simpler for the husband to perform a single talaq and then abstain from retracting during his wife’s waiting period (iddah). At least in this way, the aspect of “disciplining the wife” inherent in ila would not be an issue that the courts would need to address

The latest issue of the Journal of Private International Law (Volume 21, Issue 1) features eight articles. Pietro Franzina, Cristina González Beilfuss, Jan von Hein, Katja Karjalainen & Thalia Kruger, Cross-border protection of adults: what could the EU do better?, 1-29 On 31 May 2023 the European Commission published two proposals on the protection of adults. […]