EAPIL blog

In a post published on 8 June 2023, I introduced Zubaydah v Foreign, Development and Commonwealth Office, a case heard by the UK Supreme Court on 14 and 15 June.

Abu Zubaydah, the claimant (respondent in the appeal), has brought a tort claim against the UK government (appellants in the appeal), alleging that MI5 and MI6 officers made requests, from their London offices, to their CIA counterparts to interrogate him in circumstances where they knew or ought to have known of his rendition, unlawful imprisonment and torture by the CIA. The central issue was the law applicable to the claim, specifically focusing on the disputed application of the escape clause from section 12 of the Private International Law (Miscellaneous Provisions) Act 1995. The facts of the case, the claim, the central issue and the parties’ arguments are presented in my post of 8 June.

On 20 December 2023, the court delivered its judgment, dismissing the appeal in a four to one decision (Lord Lloyd-Jones, Lord Kitchin, Lord Burrows and Lord Stephens; Lord Sales dissenting). The court held that English law governed the claim, and not the laws of Afghanistan, Lithuania, Morrocco, Poland and Thailand and the law in force in Guantanamo Bay (“Six Countries”).

Interestingly, the court found that both the High Court and the Court of Appeal had erred in their approaches to section 12. The Court of Appeal, in particular, erred by focusing solely on the defendants’ conduct said to have occurred in England. It should have also taken into account the CIA’s conduct ([80], [81]). Hence, the Supreme Court conducted its own choice-of-law analysis.

The connections between the torts and the Six Countries were held to be weak for five reasons. First, Zubaydah was involuntarily present in the Six Countries ([75], [93]). Second, the defendants were entirely indifferent to Zubaydah’s location ([76], [94]). Third, Zubaydah was rendered to and detained in de facto black legal holes ([77], [95]). Fourth, he was held in six such facilities in six countries ([96]). Fifth, his gaolers and torturers were not agents of the Six Countries, but of a third country, ie the US ([97]).

Conversely, the connections between the torts and England were deemed strong for three reasons. First, the defendant is the UK government ([99]). Second, the relevant events occurred partly in England and for the perceived benefit of the UK ([78], [100]). Third, the defendants acted “in their official capacity in the purported exercise of powers conferred under the law of England and Wales… The defendants are all emanations of the UK Government and were at all material times subject to the criminal and public law of England and Wales.” ([101]; similarly [78])

Considering all these factors, the court held that it was substantially more appropriate for the applicable law to be English law.

In my post of 8 June, I noted that this case holds importance for private international law for two reasons.

Firstly, it highlights the role of private international law in holding the executive accountable and vindicating fundamental rights, particularly in cases involving alleged wrongs arising out of the external exercise of British executive authority. In my book on the topic, Torts in UK Foreign Relations, I argue that there are no compelling theoretical justifications for the application of foreign law in general to tort claims arising out of the external exercise of British executive authority. I further argue that the English courts should apply English law to tort claims arising out of the external exercise of British executive authority and reserve the application of foreign law only for certain issues, such as the lawfulness of the relevant conduct. The main reason for advocating the application of English tort law is that, together with English criminal and public law, it is fine-tuned for assuring the accountability of British public authorities. Foreign tort law is unlikely to be able to substitute for English tort law.

The Supreme Court essentially adopts this argument by placing decisive weight on the connections between the torts and England. It reinforces this point in relation to the misfeasance claim by noting, at ([62]), that “there is scope for suggesting, for example, that on the presumed facts of this case, it is a constitutional imperative that the applicable law in relation to the tort of misfeasance in public office in relation to the acts and omissions of the UK Services should be the law of England and Wales”.

Secondly, the parties and the court relied on reasonable/legitimate expectations as important factors in the choice-of-law process. Zubaydah’s involuntary presence in the Six Countries meant that he did not have a reasonable expectation that his situation or activities might be governed by the local laws ([75], [93]). Furthermore, the defendants’ indifference to Zubaydah’s location meant that the defendants never expected or intended their conduct to be judged by reference to the local laws ([94]). It is by partial reliance on this fundamental principle underlying the application of foreign law that the court held that foreign laws did not apply.

The Supreme Court judgment is important for two more reasons. It clarifies that an appellate court can interfere with an evaluative judgment under sections 11 and 12 of the 1995 Act if there is shown to be a clear error of law or the judge has reached a conclusion not reasonably open to them ([57]). Furthermore, it sheds light on the handling of accessory liability claims in choice of law. Such claims involve a secondary wrongdoer defendant and a primary wrongdoer third party. The court held that the “factors which connect a tort or delict” with a country, which the courts should consider when applying the escape clause from section 12, cover not only the allegedly wrongful conduct of the secondary wrongdoer (UK Services) but also that of the primary wrongdoer (the CIA) ([80], [81]). Although this judgment was made in the context of the 1995 Act, these aspects of its reasoning can easily be extrapolated to other choice of law contexts.

The recently published Volume 433 of the Collected Courses of the Hague Academy of International Law includes the course by Kartsten Thorn (Bucerius Law School) on The Protection of Small and Medium-sized Enterprises in Private International Law.

Speaking about the protection of structurally weaker parties in private international law, this normally refers to non-business parties as consumers or employees. However, in many cases also entrepreneurs are protected. Well-known examples are the commercial agent under European law, the subcontractor in France and the franchisee in many US jurisdictions.

This paper systematizes these cases, looks for underlying policies and develops a proposal for future private international law rules with regard to small and medium sized enterprises (SMEs). It understands private international law in the broad French sense encompassing jurisdiction rules and even international commercial arbitration.

Methodologically, the interplay between substantive law, conflict of laws rules and jurisdiction rules for the protection of weaker parties in the context of different legal systems is shown and evaluated with special consideration of their internationally mandatory rules. Legal gaps to European Private International law are identified in comparison to foreign jurisdictions. Following an economic analysis, a new approach to the protection of SMEs is presented which also encompasses international commercial arbitration as an alternative method of dispute resolution.

The latest issue of the RabelsZ (Rabels Zeitschrift für ausländisches und internationales Privatrecht) has been published. This issue features a symposium with several articles focussing on fundamental rights and private international law, one of them in English, the others in German. The following abstracts have been kindly provided to us by the editor of the journal.

Mareike Schmidt, Kulturalität der Rechtsanwendung und internationale Rechtsvereinheitlichung – Überlegungen am Beispiel des UN-Kaufrechts (Cultural Dimensions in the Application of Law and International Unification of Law – The Example of the CISG)

The uniform application of law, in general, and of international uniform law, in particular, is confronted with the challenges of cultural diversity. Drawing on a meaning-based understanding of culture and using the example of the United Nations Convention on Contracts for the International Sale of Goods, the article examines the extent to which cultural conceptions of normality shape the individual steps in the application of law and illustrates this influence with concrete examples. Overall, it becomes clear that the cultural nature of the application of law goes well beyond what is usually discussed. The analysis advances an understanding of the application of international uniform law as the processing of cultural difference, in the context of which – and within an entire network of actors – foreign conceptions of normality are often interpreted with the aim of integrating them into one’s own system of meaning. The resulting depiction of interconnections within this network, which concludes the text, can serve as a starting point for a more detailed analysis of the processes involved.

Maarten Herbosch, Contracting with Artificial Intelligence – A Comparative Analysis of the Intent to Contract

Computer systems based on artificial intelligence (AI) are an increasing presence in everyday legal practice. They may even be used to form contracts on behalf of their users. In such instances, it is not necessarily required that the system has been set up to take precise, pre-specified actions from an engineering perspective. As a result, the system may enter into contracts unforeseen by its user. This comes into friction with the requirements that contract formation depends on the contracting parties’ intent to be bound or that a contract constitutes a meeting of the minds. It is obscure how the intent to form a specific contract or a meeting of the minds can be present if one of the parties may not even know that a particular contract is being entered into. To tackle this challenge, this article thoroughly examines the intent requirement in various legal systems. It becomes clear that the intent requirement is often loosely applied and that its role is formulated too generally, unnecessarily obstructing a straightforward application to contract formation via AI systems. Supplying nuance to the role of intent in contract formation helps clarify that the intent requirement is not in fact an obstacle to contract formation via AI systems.

Ralf Michaels, Einleitung zum Symposium: Grundrechte und IPR im Lichte der Entscheidung des Bundesverfassungsgerichts zum Kinderehenbekämpfungsgesetz ( Symposium Introduction: Fundamental Rights and Private International Law after the Federal Constitutional Court Decision on the Act to Combat Child Marriages)

This issue presents the contributions to a symposium which examined the German Federal Constitutional Court’s ruling on the Act to Combat Child Marriages from the perspectives of constitutional law and the conflict of laws. This introduction summarizes the Court’s ruling and situates it in the scheme of German jurisprudence; thereafter, the symposium and the presented papers are described.

Henning Radtke, Zu den Maßstäben der verfassungsrechtlichen Beurteilung von Regelungen des deutschen Internationalen Privatrechts (On the Standards of Constitutional Review of Provisions of German Private International Law)

The German Federal Constitutional Court regularly reviews the constitutionality of domestic provisions of private international law and their application by the competent courts. In doing so, it takes into account the special features of this type of legislation that result, for example, from the cross-border dimension of the situations it is supposed to address and from the necessary respect for the validity of foreign legal systems. With regard to the protection of marriage and the family, this applies in particular when determining the scope of protection and the structural principles underlying art. 6 para. 1 and other provisions under the German Basic Law. The level of scrutiny when examining constitutionality is primarily determined on the basis of the principle of proportionality.

Susanne Lilian Gössl, Grundrechte und IPR – Von beidseitigem Desinteresse zu höflicher Aufmerksamkeit – und zu angeregtem Austausch? (Fundamental Rights and Private International Law: From Mutual Disinterest to Respectful Attention – and on to Animated Exchange?)

The relationship between German constitutional law and the field of conflict of laws has been discussed for decades, especially when decisions of the Constitutional Court (BVerfG) addressing private international law issues have been pending or published. The most recent occasion to reflect on this relationship is the decision of the BVerfG on the Act to Combat Child Marriages. Initially, German scholars had assumed that conflict of laws, as a value-neutral and merely technical body of law, was constitutionally irrelevant. Fundamental rights could – according to a first Constitutional Court decision – at most become relevant through the ordre public clause. Foreign law was subsequently upgraded by the widow’s pension decision, with the result that foreign rules can expand the scope of German fundamental rights. Ultimately, the BVerfG has affirmed that – like private law generally – private international law is bound to the German Constitution as part of the collective legal order and, furthermore, that it shapes the expression of constitutional guarantees in the German legal order. Nevertheless, many theoretically intriguing questions remain open, such as the character of foreign law in the jurisprudence of the Constitutional Court. These questions invite further inquiry and academic exchange.

Lars Viellechner, Die Anwendbarkeit der Grundrechte im Internationalen Privatrecht: Zur Methodik der Entscheidung des Bundesverfassungsgerichts über die Kinderehe (The Applicability of Fundamental Rights in Private International Law: On the Methodology of the Federal Constitutional Court’s Decision Regarding Child Marriage)

In its decision on the Act to Combat Child Marriages, the Federal Constitutional Court of Germany does not explicitly address the applicability of fundamental rights in private international law. It only considers some cross-border effects of the statute in the context of the proportionality test. According to its own earlier case law, however, it should have taken a position on this question. It could also have taken the opportunity to further develop a constitutional notion of conflict of laws, which equally shines through its decisions on the relationship between the Basic Law and both international law as well as European Union law. With resort to such a method, not only could it have clarified a question of principal significance regarding the relationship between fundamental rights and private international law, it might also have reached a different result in the present case.

Dagmar Coester-Waltjen, Die »Kinderehen«-Entscheidung des Bundesverfassungsgerichts: Welche Schlussfolgerungen ergeben sich für das internationale Eheschließungsrecht? (The Early Marriage Decision of the Federal Constitutional Court: What Does It Mean for International Marriage Law?)

The decision of the Federal Constitutional Court on art. 13 para. 3 no. 1 of the Introductory Act to the Civil Code raises many questions of private international law. Although the court ultimately held the provision unconstitutional, a welcome outcome, the decision also weakens the protection of legal statuses acquired under foreign law and allows the specifications and classifications of German internal law to apply as the standard even for marriages validly entered into under foreign law. The court roughly indicates a few possible ways to remedy the disproportionality of the provision, but it would seem difficult to implement these remedies in a way that both systematically conforms with the principles of private international law and does not create serious practical issues. As an alternative, the legislator should instead consider declaring all underage marriages, including the »earliest of the early«, to be voidable, because although the court’s ruling accepts their classification as non-marriages, it does not necessarily require such a harsh categorization. The article concludes by examining the potential of a fundamental reform of art. 13 of the Introductory Act to the Civil Code.

The table of contents in German is available here.

On 7 December 2023, The Council presidency and European Parliament representatives reached a provisional agreement on a reform of the Statute of the Court of Justice (last version available here).

Among other things, the reform will permit the transfer of jurisdiction over preliminary rulings to the General Court in specific areas, while the Court of Justice will retain jurisdiction over questions of principle, like those that involve interpretation of the Treaties or the Charter of Fundamental Rights.

The amendment, which is meant to reduce the workload of the Court of Justice and, therefore, to help her work more efficient, represents an essential step in the history of the institution as we know it.

The possibility of the handover is formally established by Article 256 TFEU, according to which:

3. The General Court shall have jurisdiction to hear and determine questions referred for a preliminary ruling under Article 267, in specific areas laid down by the Statute.

Where the General Court considers that the case requires a decision of principle likely to affect the unity or consistency of Union law, it may refer the case to the Court of Justice for a ruling.

Decisions given by the General Court on questions referred for a preliminary ruling may exceptionally be subject to review by the Court of Justice, under the conditions and within the limits laid down by the Statute, where there is a serious risk of the unity or consistency of Union law being affected.

It should be noted that the provision is not a novelty in EU law; it corresponds to former Article 225 TEC. In fact, the transfer to the General Court of partial jurisdiction to give preliminary rulings had already been considered in the past: at the end of last century, first, against the background of the Treaty of Amsterdam and the foreseen enlargement of the Union; and later, around 2015, in view of the increasing number of requests for preliminary rulings. However, in 2017, in a report submitted pursuant to Article 3(2) of Regulation (EU, Euratom) 2015/2422 of the European Parliament and of the Council amending Protocol No 3 on the Statute of the Court of Justice of the European Union, the Court of Justice had denied the need of a transfer at the time. On the other hand, it  simultaneously stressed that such standpoint “should not at all be understood as a definitive position on the question of the distribution of jurisdiction to give preliminary rulings between the Court of Justice and the General Court”. And, indeed, it has not been a definitive position.

For the readers of this blog the essential question is, of course, what the impact of the competences adjustment will be on preliminary rulings conerning PIL instruments.

The simple answer would be that, in principle, none is to be expected. The specific areas in which the General Court will be competent over preliminary rulings are: the common system of value added tax; excise duties; the Customs Code; the tariff classification of goods under the Combined Nomenclature; compensation and assistance to passengers in case of delay or cancellation of transport services or denied boarding; the scheme for greenhouse gas emission allowance trading. In other words, as of today requests on the instruments for judicial cooperation in civil and commercial matters are not affected, i.e., they fall under the scope of exclusive competence of the Court of Justice.

But this, of course, can change any moment in the future. More importantly, already now it is legitimate to have doubts as to the operation of the assignments to, respectively, the Court of Justice and the General Court: one single request for a preliminary ruling may concern at the same time one of the above-mentioned areas and another one; besides, requests related to one of those matters may as well entail questions of principle or of a cross-cutting nature.

More concretely, with an example: should the request for a preliminary ruling in, let’s say, case C‑213/18, or in case C-20/21, had been referred to Luxembourg after the transfer has been accomplished, who would have taken care?

In the Council’s press release of 7 December 2023 (the same date as the agreement’s) not much is said to shed light on this and similar questions. It is explained, though, that, ‘On the procedural aspects, the reform provides for a “one-stop-shop” mechanism, under which national judges will continue to address requests for preliminary rulings to the Court of Justice, which will in turn forward to the General Court the questions under its jurisdiction’.

This possibly means that a screening will take place at the level of the Court of Justice, and that a substantiated decision will be made there on the allocation of requests not squarely corresponding to one of the categories listed above. No doubt, for the sake of transparency the criteria for such allocation will also be communicated to the public at some point, likely soon. It is also to be expected (and it is hoped) that resources of the Court will be invested in making sure that, from the very beginning, they are consistently applied.

The readers of the blog are aware of the proposal for a Directive on the protection of persons who engage in public participation from manifestly unfounded or abusive court proceedings, also known as strategic lawsuits against public participation (SLAPPs).

After the political agreement reached at Council level and the European Parliament’s negotiating position, the negotiators of the Parliament and of the Council reached on 30 November 2023 a provisional political agreement on the text to be adopted. The agreement is expected to be formally approved by the Council and the European Parliament at a later stage.

The text of the deal, made accessible here, features various innovations, including the following.

Minimum Requirements

The text resulting from the political agreement now makes clear that the Directive lays down minimum rules, thus enabling the Member States to adopt or maintain provisions that are more favourable to persons engaging in public participation, including national provisions that establish more effective procedural safeguards. The implementation of the Directive should not serve to justify any regression in relation to the level of protection that already exists in each Member State.

Public Participation

Public participation is more broadly defined.

It should mean any statement, activity or preparatory, supporting or assisting action directly linked thereto, by a natural or legal person expressed or carried out in the exercise of fundamental rights.

Future public interest is included, referring to the fact that a matter might not yet be of public interest, but could become so, once the public becomes aware of it, for example by means of a publication.

Such activities should directly concern a specific act of public participation or be based on a contractual link between the actual target of SLAPP and the person providing the preparatory, supporting or assisting activity. Bringing claims not against a journalist or a human rights defender but against the internet platform on which they publish their work or against the company that prints a text or a shop that sells the text can be an effective way of silencing public participation, as without such services opinions cannot be published and thus cannot influence public debate.

Matter of Public Interest

The notion of a matter of public interest is clarified in more detail.

It should include matters relevant to the enjoyment of fundamental rights.

Activities of a natural or legal person who is a public figure should also be considered as matters of public interest since the public may legitimately take an interest in them.

In addition, matters under consideration by a legislative, executive or judicial body or any other official proceedings can be examples of matters of public interest.

Finally, the Directive text provides under Recital 19b for many cases where a matter of public interest is at stake.

Abusive Court Proceedings

The description of when court proceedings can be considered abusive is reworked and better described.

They typically involve litigation tactics deployed by the claimant and used in bad faith including but not limited to the choice of jurisdiction, relying on one or more fully or partially unfounded claims, making excessive claims, the use of delaying strategies or discontinuing cases at a later stage of the proceedings, initiating multiple proceedings on similar matters, incurring disproportionate costs for the defendant in the proceedings. The past conduct of the claimant and, in particular, any history of legal intimidation should also be considered when determining whether the court proceedings are abusive in nature. Those litigation tactics, which are often combined with various forms of intimidation, harassment or threats before or during the proceedings, are used by the claimant for purposes other than gaining access to justice or genuinely exercising a right and aim to achieve a chilling effect on public participation in the matter at stake.

Claims made in abusive court proceedings can be either fully or partially unfounded. This means that a claim does not necessarily have to be completely unfounded for the proceedings to be considered abusive. For example, even a minor violation of personality rights that could give rise to a modest claim for compensation under the applicable law can still be abusive, if a manifestly excessive amount or remedy is claimed. On the other hand, if the claimant in court proceedings pursues claims that are founded, such proceedings should not be regarded as abusive for the purposes of the Directive.

Scope

Few express indications have been added.

The Directive shall apply to matters of a civil or commercial nature with cross-border implications entertained in civil proceedings, including interim and precautionary measures and counteractions, entertained in civil proceedings, whatever the nature of the court or tribunal.

Then, it shall not apply to criminal matters or arbitration and shall be without prejudice to criminal procedural law.

Matters with Cross-border Implications

The cross-border implications element has been revised.

According to the text, a matter is considered to have cross-border implications unless both parties are domiciled in the same Member State as the court seised and all other elements relevant to the situation are located only in that Member State. Domicile shall be determined in accordance with the Brussels I bis Regulation.

Common Rules on Procedural Safeguards

Article 5a, devoted to the accelerated treatment of applications for safeguards, has been added.

Member States shall ensure that applications for security and early dismissal of manifestly unfounded claims are treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Member States shall ensure that applications for remedies against abusive court proceedings may also be treated in an accelerated manner, where possible, in accordance with national law, taking into account the circumstances of the case, the right to an effective remedy and the right to a fair trial.

Early Dismissal of Manifestly Unfounded Claims

In relation to the early dismissal, Member States shall ensure that courts and tribunals may dismiss, after appropriate examination, claims against public participation as manifestly unfounded at the earliest possible stage, in accordance with national law. In addition, Member States shall ensure that an application for early dismissal is treated in an accelerated manner in accordance with national law, taking into account the circumstances of the case and the right to an effective remedy and the right to a fair trial.

The burden of proof and substantiation of claims, under Article 12, have been specified. The burden of proving that the claim is well founded rests on the claimant who brought the action. Member States shall ensure that where a defendant has applied for early dismissal, it shall be for the claimant to substantiate the claim in order to enable the court to assess whether it is not manifestly unfounded.

Finally, Member States shall ensure that a decision granting early dismissal is subject to an appeal.

Remedies Against Abusive Court Proceedings

The award of costs, under Article 14, is clarified. Member States shall ensure that a claimant who has brought abusive court proceedings against public participation can be ordered to bear all types of costs of the proceedings, available under national law including the full costs of legal representation incurred by the defendant, unless such costs are excessive. Where national law does not guarantee the award in full of the costs of legal representation beyond statutory fee tables, Member States shall ensure that such costs are fully covered, unless they are excessive, by other means available under national law.

Article 15, specifically devoted to compensation of damages, has been deleted. It provided a natural or legal person who has suffered harm as a result of a SLAPP case to be capable of claim and to obtain full compensation for that harm. The text resulting from the political agreement loses this (express) provision.

Article 16, dedicated to penalties, has been amended including other equally effective appropriate measures. Member States shall ensure that courts or tribunals seised of SLAPPs cases may impose effective, proportionate and dissuasive penalties or other equally effective appropriate measures, including the payment of compensation for damages or the publication of the court decision, where provided for in national law, on the party who brought those proceedings.

Protection against Third-country Judgments

This chapter has been affected by significant changes relevant from a private international law perspective.

In relation to grounds for refusal of recognition and enforcement of a third-country judgment, the reference to public policy, which was used in the original text version proposed by the Commission, has been deleted. According to the current text version, Member States shall ensure that the recognition and enforcement of a third-country judgment in court proceedings against public participation by a natural or legal person domiciled in a Member State is refused if those proceedings are considered manifestly unfounded or abusive according to the law of the Member State in which recognition or enforcement is sought.

Article 18, on jurisdiction for actions related to third-country proceedings, provides as follows. Member States shall ensure that, where abusive court proceedings against public participation have been brought by a claimant domiciled outside the Union in a court or tribunal of a third country against a natural or legal person domiciled in a Member State, that person may seek, in the courts or tribunals of the place where he is domiciled, compensation for the damages and the costs incurred in connection with the proceedings before the court or tribunal of the third country.

A paragraph 2 has been added, providing that Member States may limit the exercise of the jurisdiction while proceedings are still pending in the third country.

Relations with other Private International Law Instruments

In final provisions, under Article 19, the Directive shall not affect the application of bilateral and multilateral conventions and agreements between a third State and the Union or a Member State concluded before the date of entry into force of the Directive. Recital 33a refers, as example, to the 2007 Lugano Convention, in line with Article 351 of the TFEU.

Under Recital 33b it is specified that any future review of the rules under the Brussels I bis and the Rome II Regulations should assess also the SLAPP-specific aspects of the rules on jurisdiction and applicable law.

The European Court of Human Rights (ECtHR) held in a judgment of 26 October 2023 (Application no. 32662/20) that a Hungarian child abduction procedure under the 1980 Hague Child Abduction Convention (1980 Hague Convention) was not compatible with the family rights set out in Article 8 of the European Convention on Human Rights (ECHR). The Court reiterated that national return procedures should be managed in such a way as to ensure that a swift return of the child is possible, with both parents being granted contact with the child as the procedure unfolds.

Background

A couple consisting of a Spanish father and a Hungarian mother had two children. One was born in Hungary in 2013 and one was born in Spain in 2015. After a family holiday to a third country in January 2017, the father returned alone to Spain, whereas the mother and children went to Hungary. While in Hungary, the mother told the father that she had decided to settle permanently in Hungary with the children.

In February 2017, the father filed an application for the return of the children to Spain based on the 1980 Hague Convention. Courts in three instances, including the Hungarian Supreme Court, held that the father was right and that the children should return to Spain. However, in February 2018, the Hungarian Constitutional Court suspended the enforcement of the return of the children. In a decision given in November 2018, the enforcement was cancelled by the Constitutional Court, which held that the mother’s right to a fair trial had been violated, as the children’s interests had not been considered.

After the ruling of the Constitutional Court, the return order was again a matter for the Hungarian courts. This time, a psychological evaluation of the children was presented as evidence. Again, the Hungarian courts in three instances held that the children should return to Spain. The Constitutional Court was still not satisfied and quashed this return order as well. A third round of procedures for the same return was initiated in the district court in 2020. Shortly before that, Hungarian courts recognized a Spanish judgment giving the father custody of the children under Regulation (EU) No 2201/2003 (Brussels II bis).

During the almost four-year procedure, the father had applied to see his children on numerous occasions, but Hungarian authorities permitted only twelve encounters. Ultimately, during a parental visit in 2020, the father took the children back to Spain.

At the ECtHR in Strasbourg, the father complained about the Hungarian procedure. He claimed that the return procedure had violated his family rights under Article 8 of the ECHR, as the application of the Hague Convention was wrongful, both in that he had not been granted parental contact during the procedure and in the Hungarian non-enforcement of the Spanish decisions.

Judgment

The ECtHR held initially in its judgment that a State respondent to an international child abduction has family rights obligations towards the parent seeking the return of the child. That State must, inter alia, examine applications under the 1980 Hague Convention “with a view to ensuring […] prompt reunion.”

In this regard, the ECtHR held that the Hungarian procedure had been too slow, lasting nearly four years. Specifically, the Court noted that if Hungarian authorities found it necessary to consider psychological expertise in return matters, they should have organised the procedure in such a way that the expertise in question could be obtained without undue delays.

Lastly, the Court also held that the Hungarian authorities had not taken any measures to enforce the Spanish court decisions on custody rights.

Therefore, the Court held that Hungary had violated the father’s family rights under Article 8.

Comment

The judgment of the ECtHR comes as no surprise in that it emphasizes that the sturdy principle of prompt return under the 1980 Hague Convention is protected also under Article 8 of the ECHR.

One must remember that the passage of time in child abduction cases will always favor the abducting parent. Eventually, it will not be in the best interest of the child to be returned to a parent with whom it no longer has any relationship. After all, the 1980 Hague Convention is in place to avoid that an abductor is rewarded with custody. From a private international law perspective, custody rights must be dealt with separately, in “normal” custody procedures.

Fabian Kratzlmeier (Chicago) has accepted the invitation of the editors of the blog to present his recent book, titled ‘Die Grenzüberschreitende Unternehmensrestrukturierung im Europäischen Rechtsrahmen’ (Cross-border corporate restructuring and European private international law), published by Mohr Siebeck.

Reorganizing viable firms (instead of liquidating them) has been the state of the art in U.S. bankruptcy law for decades now, and it has become increasingly popular throughout Europe in recent years. This trend is reflected in legislative activities, such as the repeated reform efforts to the German bankruptcy code aiming at rescuing profitable, but over-indebted firms within the traditional insolvency procedure. It is also evidenced by practical patterns, most notably (not only) German companies using foreign restructuring instruments, in particular the English Scheme of Arrangement, to amend their financing structure while continuing trading in the 2010s. Even then – more than a decade ago – the wide-reaching impacts of such cross-border restructurings were heavily discussed in bankruptcy and private international law scholarship by some scholars, showing the (not only political) brisance of private international law in the area of restructuring law.

Whenever the earnings of a debtor company no longer cover its financial obligations, the creditors (and the shareholders) share a common interest in maximizing the pool of distributable assets. Where the continuation of the business under the old legal entity promises a higher present value compared to the liquidation of the debtor – be it piecemeal or through a business sale – economic logic demands a legal framework to resolve the underlying collective action problem. It is therefore the task of a modern insolvency and restructuring law to provide the parties involved with an appropriate set of rules that facilitates negotiations in order to adjust the debtor’s liabilities to the prospective earnings of the company (e.g. through debt reductions, deferrals or debt-equity-swaps).

In terms of the (continental) European landscape, the Restructuring Directive 2019 (hereinafter “Directive”) has set new standards in restructuring law, requiring Member States to reform and, in many cases, modernize their insolvency and restructuring laws. It mandates all Member States to maintain preventive restructuring instruments, enabling financially distressed companies to temporarily protect their business assets against collection or enforcement actions, and providing a majority voting scheme in order to cram down (groups of) dissenting creditors. In accordance with its minimum harmonization concept, however, the Directive leaves the Member States with a large number of choices and deviation options. Thus, the national restructuring frameworks differ widely from one another in some key aspects; e.g. regarding the entry threshold (the extent of financial distress required to access), the duration and scope of the moratorium, and the conditions and limits to the cram down mechanism (in particular as to group formation and priorities), to name but a few. The legal and economic positions of the various groups of stakeholders – and, consequently, their negotiating power in the immanent struggle over the distribution of going concern value – depend to a large extent on the jurisdiction in which the reorganization takes place and what options for action the local restructuring law offers to the respective stakeholders. It is obvious, that decision makers, when looking for suitable restructuring options, will not limit themselves to their home state’s reorganization tools, but explore foreign instruments as well, as past experiences with the English Scheme of Arrangement have proven before. As long as there is legal certainty, i.e. the reorganization is likely to be recognized by the relevant (i.e. asset-intensive) jurisdictions, decision makers have in incentive to choose the restructuring location that best serves their interests, ultimately resulting in a regulatory competition between national restructuring regimes throughout the EU. Private international law, in this context, regulates this competition by limiting (or unlocking) such choice of foreign insolvency and restructuring venues (and their respective laws). Against this background, the present study undertakes to comprehensively review and, building on its findings, further develop the legal framework for cross-border corporate restructurings within Europe, presenting a solution that is both coherent with existing European legislation, and consistent with the underlying principles of European insolvency law.

There is, however, another reason why further research in this area is desperately needed: Thanks to the ever-growing integration of the internal market and, thus, the establishment of international trade relations and supply chains, purely nationally operating companies (other than micro-enterprises) have long become the exception. It does not take much to make a national restructuring case an international one, i.e. the cross-border element does not need to amount to a foreign branch or similarly consolidated business structures. A foreign creditor or a third-party debtor based abroad suffices to turn a national company into an international restructuring case. Hence, the minimum harmonization of the substantive law by the Directive alone is not going to achieve the underlying goal set by the Union legislator, that is to provide all European companies with access to effective and efficient restructuring instruments. Rather, in cases with cross-border exposure, the question inevitably arises as to whether the financial crisis can be overcome in a single procedure – hauling all (including foreign) affected parties into one procedure and having it recognized across all (relevant) jurisdictions – or whether several procedures are necessary in order to implement a sustainable restructuring of the company and thus safe the going concern value.

Unfortunately, this need for international coordination and harmonization of cross-border corporate reorganizations, arising from the very conceptual nature of collective proceedings, has been hardly taken into account by the legislator when drafting the Directive. There are only three recitals (12 to 14) dealing with these issues in the first place, and even they contain only rudimentary (and hardly expedient) considerations regarding the relationship between the Directive and existing regulations in European private international law. In particular, they reference the European Regulation on Insolvency Proceedings (EIR) as well as the center of main interest (COMI), which is of paramount importance to the current international insolvency regime, to which it serves as the central connecting factor determining both jurisdiction and applicable law. In terms of (reliable) conclusions regarding the classification of the new restructuring frameworks and their integration into the existing private international law framework, however, the recitals only provide limited guidance. The recitals make it clear, though, that at least some of the proceedings created in transposing the Directive (i.e. those that are to be publicly announced) shall be subject to the EIR and, therefore, be included in the latter’s Annex A.

The study takes this as its starting point to demonstrate that the EIR provides a tailor-made set of rules for public proceedings, providing clear and (for the most part) fitting rules on international jurisdiction and applicable law while also guaranteeing EU-wide recognition. At the same time, however, there are some drawbacks in the EIR’s application to restructuring proceedings mainly resulting in setbacks to the collectivization mechanism aimed at on a substantive level. These issues, including rights in rem and secondary proceedings, are discussed in depth, and appropriate solutions are presented both de lege lata and de lege ferenda.

Turing to confidential restructuring frameworks, to which the recitals are silent, the scholarly debate is still evolving. Due to their private nature, they are increasingly popular in practice. At least in part motivated by the onsetting regulatory competition in the field, therefore, many Member States (including Germany, the Netherlands, and Austria) opted for a dual transposition enacting both a public and a private alternative. Since confidential procedures will not be included in Annex A and, thus, will prima facie remain outside the scope of the EIR, there are considerable hurdles to overcome in order to embed such procedures into the existing European private international law framework. First and foremost, the so-called bankruptcy clause enshrined in Art. 1 (2)(b) Brussels I bis Regulation challenges the integration into the existing secondary law altogether. A closer look at the issue reveals, however, that this provision excludes only those procedures, which qualify as “insolvency proceedings” under Art. 1 EIR, regardless of whether such proceeding is included in Annex A. Turning to international jurisdiction, the study is building on the controversy and the different propositions surrounding international jurisdiction to restructure foreign companies under an English scheme of arrangement. In that context, the arguments previously put forward in support of Art. 8 (1) (jurisdiction wherever at least one affected party has her domicile) and 24 (2) Brussels I-bis Regulation (jurisdiction at the place of the registered seat) are discussed and assessed as to their validity with regard to the new restructuring instruments. After all, the Directive differs in key respects from its English blueprint, and, thanks to its EU-law origin, requires special considerations concerning the coherence of (secondary) European law. Ultimately, the study finds that neither of the international jurisdiction rules provided for in the Brussels-I-bis Regulation are well-suited (or even practicable) for collective procedures such as the preventive restructuring instruments under the Directive. Therefore, it calls for a concentration of restructurings at the debtor’s COMI, which is in line with (and, upon a detailed examination, even envisioned by) both the EIR, and the Directive itself. In this respect, the study, using state-of-the-art European Union law methodology, extracts a coherent and consistent private international law framework for confidential restructuring procedures, centered at the debtor’s COMI, and recognized throughout the EU. At the same time, it proposes legislative amendments to the current system to clarify the private international law rules on cross-border restructurings – both for parties involved and Member States experiencing competitive pressure – and to improve the (few) inadequacies under the current legal regime.

Overall, the study reveals that the applicable law concentrates – public and confidential – restructuring proceedings at the debtor’s COMI on the one hand, but on the other hand also guarantees EU-wide recognition of the restructuring results achieved. The collectivization of creditors and shareholders implemented – in substantive terms – by the Directive, thus, continues on the level of private international law, enabling the continuation of viable companies even in a cross-border context.

The European Group for Private International Law (GEDIP) has recently adopted a position paper on the proposal for a Council Regulation in matters of Parenthood.

The Group welcomes that the EU intends to legislate in this field, since parenthood is a status from which persons derive numerous rights and obligations.

However, the Group is of the opinion that there are important shortcomings in the proposal due to the narrow perspective taken and an insufficient consideration of the legal complexities concerning parenthood in cross-border situations. It therefore encourages a reconsideration of the proposal in the light of its observations.

The Vrije Universiteit Brussel (VUB) and the Small Claims Analysis Net 2 (SCAN2) Project consortium partners and are organising a final conference regarding Small Claims Dispute Resolution on 22-23 February 2024.

The SCAN2 final conference will be organised around two main pillars: first, present the acquired research results of the SCAN2 project to the public, and second, bringing together international academics, practitioners, PhDs, and stakeholders in a supranational forum aiming to discuss the latest legal developments on the existing legal remedies for the small claims models of dispute resolutions for consumers within the European Union.

The call for papers concerns the second pillar of the conference focused on the latest developments and sharing of knowledge in relation to the European models of small claims dispute resolution and online dispute resolution (ODR).

Special consideration will be made for the topics discussing the European Small Claims Procedure Regulation (EU) 861/2007 (as amended by Regulation (EU) 2015/2421), but the organisers encourage submissions also on the following topics: small claims remedies for consumers; online dispute resolution for small claims; cross-border justice for consumers; small claims judgment and enforcement challenges; consumer privacy and data protection in using technology for resolving small claims; the connection between the Brussels Ia Regulation and the Regulations on the European Enforcement Order, the European Small Claims Procedure, the European Payment Order and the European Account Preservation Order and their implementation in national procedural law; best national and supranational practices of national small claims proceedings; digitalisation of small claims proceedings; different fora for the initiation of the small claims proceedings; relationship between the Digital Service Act and ODR for consumers; the future of consumer ODR; and the revision of the new ADR directive and small claims.

Additional information can be found here. Enquiries concerning the academic aspects of the event and the call for papers should be directed to the Conference Chair, Marco Giacalone, at marco.giacalone@vub.be. All other enquiries should be addressed to seyedeh.sajedeh.salehi@vub.be or paola.giacalone@vub.be.

The Spanish Association of Professors of International Law and International Relations (AEPDIRI) is organizing its VII Seminar on current issues in Private International Law on the topic A Private International Law centred on the rights of individuals. The seminar will take place at the Faculty of Law of the Universidad Pontificia Comillas (ICADE) in Madrid (https://www.comillas.edu) on 14 March 2024.

The Seminar is intended to discuss topics related to the challenges posed by the rights of individuals from a broad perspective and from a Private International Law dimension, related to the following thematic lines: Current issues raised by the regulation of the capacity of persons in Private International Law; Current issues raised by the regulation of parentage in international situations; The rights of vulnerable persons from a Private International Law dimension; Challenges posed by digitisation to the rights of the individual in private cross-border situations; Due diligence obligations in value chains and Private International Law; Civil liability of multinationals for human rights violations; New challenges in Immigration Law; Migrants’ rights from a Private International Law perspective.

Researchers are welcome to propose presentations which should cover one of the above-mentioned questions. Proposals should fit into the objectives of the Seminar and will be selected –for their oral presentation and/or publication- according to their relevance, quality and originality in respect to their contribution to the development of Private International Law studies.

Proposals should be submitted, following the requirements of the call, no later than 15 January 2024, by e-mail to: seminarioactualidad.dipr2024@aepdiri.org.

The working language of the Seminar will be Spanish, but papers may be also presented in English or French.

The submission of abstracts for selection as well as the participation to the Seminar are free of charge.

A new book entitled Blockchain and Private International Law has been published by Brill. It is available in open access and may be downloaded here. A book launch will take place on 20 December 2023 at 18:15 CET online and at the University of Lausanne (here is the link to the livestream).

The authors of the books are experts from various jurisdictions. The editors are Andrea Bonomi, Matthias Lehmann, and Shaheeza Lalani. It comprises five parts with overall 26 chapters.

The first part focuses on fundamental issues. It addresses the foundations of Distributed Ledger Technology (Tetsuo Morishita), the principle of technological neutrality  (Bruno Mathis), the general significance of private international law for crypto assets (David Sindres), property law issues associated with them (Christiane Wendehorst), as well as the problem of blockchain pseudonymity as an obstacle for the determination of the applicable law (Anne-Grace Kleczewski).

The second part addresses general conflict-of-laws problems raised by the blockchain. A taxonomy of crypto assets is given (Felix Krysa), the (in)significance of the situs is analysed (Amy Held), policy decisions are examined (Burcu Yüksel Ripley and Florian Heindler), and the law governing digital representations of off-chain assets is discussed (Emeric Prévost).

The third part examines specific crypto assets and legal relationships. It deals with central bank digital currencies (Caroline Kleiner), stablecoins (Matthias Lehmann and Hannes Meyle), blockchain torts  (Tobias Lutzi), insolvency issues (Giovanni Maria Nori and Matteo Girolametti), the law applicable to secured transactions on the blockchain (Matthias Haentjens and Matthias Lehmann), smart contracts (Mehdi El Harrak), blockchain-based negotiable instruments (Koji Takahashi), and crypto derivatives (Gregory Chartier).

The fourth part focuses on blockchain dispute resolution. In particular, the importance of the DAO for dispute resolution is investigated (Florence Guillaume and Sven Riva), and the recognition and enforcement blockchain-based decisions is analysed (Pietro Ortolani).

The fifth part of the book contains country reports. Represented are the legal systems of Switzerland (Pascal Favrod-Coune and Kévin Belet), the United States (Frank Emmert), Germany (Felix M. Wilke), in Liechtenstein (Francesco A. Schurr and Angelika Layr) and Japan (Tetsuo Morishita).

On 7 November 2023, less than three weeks after the judgment in Limbu v Dyson Technology Ltd (reported here), where the High Court of England and Wales applied the forum non conveniens doctrine to a business and human rights claim, the Inner House of the Scottish Court of Session (Scotland’s supreme civil court) directed around 5,000 Kenyan tea pickers in Campbell v James Finlay (Kenya) Ltd to pursue their claims for occupational injuries in Kenya (previous judgments in this case included [2022] CSIH 29, which addressed the certification of group proceedings, and [2022] CSOH 57, which concerned a motion for anti-suit interdict).

The case and the Inner House’s judgment are notably unusual for several reasons.

Let’s begin with the facts. The claimants, Kenyan tea pickers, brought proceedings against James Finlay (Kenya) Ltd, a Scottish company, in Scotland. Unusually for a transnational business and human rights dispute, the defendant directly employed the claimants in Kenya. No Kenyan subsidiary or supplier was involved in the alleged wrongs. This enabled the claimants to advance relatively straightforward negligence claims for breach of employer’s duty of care.

Everyone agreed that prima facie the court had jurisdiction under rule 1 in Schedule 8 to the Civil Jurisdiction and Judgments Act 1982, which is a rule of general jurisdiction based on the defendant’s domicile. The defendant challenged the court’s jurisdiction on two grounds: the existence of an exclusive Kenyan choice-of-court agreement and forum non conveniens.

The defendant relied on rule 6 in Schedule 8 to the 1982 Act to argue that the Scottish courts had no jurisdiction due to an exclusive Kenyan choice-of-court agreement. This is an unusual argument as this provision deals with the prorogation, not derogation, of jurisdiction of the Scottish courts, and a foreign jurisdiction agreement does not take away jurisdiction from an otherwise competent Scottish court but serves as a significant factor when deciding whether jurisdiction should be exercised. The court did not engage with these subtleties of Scottish private international law. It promptly dismissed this jurisdictional challenge by concluding, quite rightly, that the contract clause in question (“9. Industrial Sickness: The terms of the relevant national legislation shall apply.”) was not a choice-of-court agreement.

A glaring omission in the judgment is the court’s failure to acknowledge that in employment disputes the jurisdiction of the UK courts depends on sections 15A and C-E of the 1982 Act. These provisions transpose the jurisdictional rules for employment matters from the Brussels I bis Regulation into UK law. Consequently, the Scottish courts had jurisdiction over the Scottish-domiciled defendant (section 15C(2)(a)) and a choice-of-court clause in the employment contract could not deprive the claimants of this forum. The protective jurisdictional rules may be departed from only by an agreement made ex post or expanding the available forums for the employee (section 15C(6)). In other words, there was no need to even look at the dispute resolution clause for the purposes of addressing the first jurisdictional challenge.

The court then proceeded to consider forum non conveniens. The defendant contended that a no-fault compensation scheme established by the Work Injury Benefits Act 2007 in Kenya barred claims for damages, insisting that the claimants should pursue compensation under this scheme.

A preliminary question remained unaddressed: is forum non conveniens available when a UK court has jurisdiction over an employment dispute under section 15C?

The primary aim of sections 15A and C-E was, as articulated in the Explanatory Memorandum accompanying a statutory instrument which was used to transpose the jurisdictional rules for employment matters from Brussels I bis into UK law, “to ensure employees are not disadvantaged by EU exit”. Prior to Brexit, jurisdiction under Brussels I bis was mandatory (Owusu). There are other reasons against the availability of forum non conveniens in this context. It may be inconsistent with the objective of employee protection (for the strength of this objective under sections 15A and C-E, see, for example, Gagliari v Evolution Capital Management). If a foreign choice-of-court agreement can only be effective if made ex post or if it expands the available forums for the employee, allowing forum non conveniens, which is normally a less strong reason for staying proceedings, might seem contradictory. Sections 15A and C-E allow the employee to serve the claim form on the employer as of right in England, eliminating the need to seek permission to serve the claim form out of the jurisdiction. It appears inconsistent not to require the claimant to show that the forum is forum conveniens in service out cases, but to allow the defendant to plead forum non conveniens. Consequently, it is unsurprising that leading scholars (A Briggs, Private International Law in English Courts (2nd edn, OUP 2022) 194 and L Merrett, Employment Contracts and Private International Law (2nd edn), OUP 2022) 165) suggest that forum non conveniens might not be available in this context.

On the other hand, section 49 of the 1982 Act unequivocally provides that “Nothing in this Act shall prevent any court in the United Kingdom from staying, sisting, striking out or dismissing any proceedings before it, on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 2005 Hague Convention.” Additionally, there is the authority of Dicey, Morris and Collins, who, in para 12-012, adopt a tentative view that forum non conveniens is available when a UK court has jurisdiction over an employment dispute under section 15C.

It is a shame that the court did not address this preliminary question of the availability of forum non conveniens.

The Lord Ordinary (first instance judge) decided, relying on expert evidence, that the Kenyan Work Injury Benefits Act 2007 did not apply to the claimants because it did not list back injury as a condition for the no-fault compensation scheme. Although the Act did allow for the possibility of the responsible official listing new conditions, no such decision had been made. He further rejected the plea of forum non conveniens because he decided that the claimants would not obtain justice in the Kenyan courts.

The Inner House disagreed. It found that the Act applied to the claimant’s occupational injuries. It further noted that the no-fault compensation scheme “is said to work well and is cost and lawyer free” ([67]). On the basis of all of this, the court held, at [69], that:

Having regard to the court’s construction of the WIBA, the appropriate manner of proceeding is to sist these proceedings pending resolution of the claims under the WIBA, including any appeals to the [Employment and Labour Relations Court], in Kenya. If the court’s construction, or its understanding of the practical operation of the WIBA, turn out to be ill-founded, or if the WIBA claims were not determined in accordance with the scheme, or if there were to be excessive delay, the court may have to revisit the question of substantial justice and consider whether the sist should be recalled. However, the court cannot determine, as matters presently stand, that the WIBA, if it operates as its terms suggest, is not capable of providing substantial justice. The concept of such justice applies to both parties and envelops the general public interest.

Leaving aside the point that the court invoked here a public interest factor, which sits uneasily with the House of Lords decision in Lubbe v Cape Plc, one gains the impression from this paragraph that the court applied a kind of conditional forum non conveniens doctrine.

But then one reads the next paragraph, where the court said that it was not applying forum non conveniens:

The court will recall the interlocutor of the Lord Ordinary dated 11 July 2023 in so far as it repels the defenders’ second plea-in-law (on forum non conveniens). It will allow the reclaiming motion and sist the group proceedings (GP1/22) pending resolution of the group members’ claims in Kenya under the WIBA scheme. It will not determine the plea of forum non conveniens at present.

One is at a loss what to make of this. The court evidently exercised a form of inherent power to sist the proceedings. But there is no attempt to explain the origin or nature of this power or its interaction with forum non conveniens.

All of this amounts to a very confusing (and confused) judgment. Hopefully, the case will find its way to the Supreme Court. The case is just too important to be decided in this way.

 

— I am grateful to Professor Adrian Briggs and Professor Louise Merrett for sharing their insights regarding the availability of forum non conveniens when a UK court has jurisdiction over an employment dispute under section 15C of the 1982 Act. Additionally, I extend my gratitude to Dr Bobby Lindsay for explaining specific points of Scottish law and for sharing a case note on the first instance judgment in this case, which will be published in the January edition of the Edinburgh Law Review. Finally, I thank Andrew Smith KC and Cameron Smith, who clarified some aspects of this litigation and offered thoughts on the likelihood of obtaining permission to appeal to the UK Supreme Court. Any mistakes or omissions in this post are solely mine.

The virtual book launch of The Elgar Companion to UNCITRAL will take place on 14 December 2023 at 1:00 pm (CET) as a video conference via Zoom under the aegis of the Max Planck Institute for Comparative and Private International Law.

Co-edited by Rishi Gulati (University of East Anglia and Barrister, Victorian Bar, Australia), Thomas John (MCIArb, Independent Mediator, Arbitrator and Legal Consultant, the Netherlands) and Ben Köhler (Max Planck Institute for Comparative and International Private Law), this comprehensive Companion delineates the range of issues considered at UNCITRAL, as well as assessing the potential for future work and reforms.

The book will be virtually launched by the Secretary of UNCITRAL Anna Joubin-Bret followed by an informative panel discussion will be included.

See here for registration to the book launch.

The Official Journal of the European Union of 9 June 2023 reports anout the following request for a preliminary ruling from the Sofiyski rayonen sad (Sofia District Court – case C-222/23):

Is Article 62(1) of [the Brussels I bis Regulation], read in conjunction with Articles 18(1) and 21 TFEU, to be interpreted as precluding the concept of a natural person’s ‘domicile’ from being derived from national legislation which provides that the permanent address of nationals of the forum State is always situated in that State and cannot be transferred to another place in the European Union?

Is Article 5(1) of [the Brussels I bis Regulation], read in conjunction with Articles 18(1) and 21 TFEU, to be interpreted as permitting national legislation and national case-law under which a court of a State may not refuse to issue an order for payment against a debtor who is a national of that State and in respect of whom there is a reasonable presumption that the court lacks international jurisdiction because the debtor is likely to be domiciled in another EU State, which is apparent from the debtor’s declaration to the competent authority that he has a registered address in that State? In such a case, is the date on which that declaration was made relevant?

Where the international jurisdiction of the court seised is derived from a provision other than Article 5(1) of [the Brussels I bis Regulation], must Article 18(1) TFEU, read in conjunction with Article 47(2) of the Charter of Fundamental Rights, be interpreted as precluding national legislation and national case-law under which an order for payment may be issued only against a natural person who is habitually resident in the forum State, but a finding that the debtor, if a national of that State, has established that he is resident in another State cannot be based solely on the fact that he has given the first State a registered address (‘current’ address) that is in another State of the European Union, if the debtor is unable to demonstrate that he has entirely moved to that other State and has no address in the territory of the forum State? In this case, is the date on which the declaration concerning the current address was made relevant?

If the answer to the first part of the third question is that the issue of an order for payment is permissible, is it permissible under Article 4(1) of [the Brussels I bis Regulation], read in conjunction with Article 22(1) and (2) of Regulation (EU) 2020/1784 of the European Parliament and of the Council of 25 November 2020 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters, as interpreted in the judgment in Case C-325/11, Alder, and in conjunction with the principle of effective application of EU law in the exercise of national procedural autonomy, for a national court of a State in which nationals cannot give up their registered addresses in the territory of that State and cannot transfer them to another State, when it receives an application for an order for payment in proceedings in which the debtor is not involved, to obtain information in accordance with Article 7 of Regulation (EU) 2020/1784 from the authorities of the State in which the debtor has a registered address about the debtor’s address in that State and the date of registration there, in order to determine the debtor’s actual habitual residence before the final decision is given in the case?

In the case at hand, ‘Toplofikatsia Sofia’ EAD, a company registered under Bulgarian law, applied to the Sofia District Court for an order for payment against V.Z.A., the debtor, for a pecuniary claim. V.Z.A. is not yet a party to the proceedings, because the order has not yet been issued. The claim arose from the fact that V.Z.A., who owns an apartment heated by the district heating network, had not paid for energy supplied between 15 September 2020 and 22 February 2023. In order to determine its international jurisdiction, the Sofia court requested of its own motion information on the address of the debtor from the population register in March 2023. According to this information, V.Z.A. has a permanent address registered in 2000 in Sofia (Bulgaria) and, since 6 March 2010, has had a current address registered with the Bulgarian authorities that is in another Member State of the European Union. Bulgarian law does not provide for the possibility of registering a particular current address abroad but merely for indicating the other State in which it is located.

In a nutshell, the legal issues at stake are two: first, the compatibility with Union Law of the assimilation, as per national law, of the permanent address to the notion of domicile, independently of the existence of a current address in another Member State; second, the possibility of resorting to the provisions of Regulation No. 2020/1784 in order to identify the current address of a debtor.

The request is remarkable in that, to the best of my knowledge, it will be the first one on the new Service Regulation, which applies as of 1 July 2022.

If the fourth question is taken up by the Court of Justice in its exact terms, the ruling will involve Article 7 on assistance on address enquiries, i.e., a provision non-existing under the previous Service Regulation, and the only one applicable where the address of the person to be served with a document is not known (see Article 1, paragraph 2 of the Regulation). As noted by B. Hess in his commentary to Article 7 in A. Anthimos, M. Requejo (eds), The European Service Regulation. A Commentary, Edward Elgar Publishing, 2023, the rule introduces a new mechanism aiming at facilitating address research in other EU Member States, without, nevertheless, establishing a self-standing European procedure, unlike Articles 51 (2), 61 – 63 of the Maintenance Regulation, or (for the purposes of obtaining information on accounts of the debtor) under Article 14 of the European Bank Account Preservation Order Regulation. The assistance given in the framework of Article 7 remains a matter of the national law of the requested EU Member State – some information thereto related can be found at the e-justice portal.

Updates will follow.

The Paris Court of Appeal will celebrate the fifth anniversary of the establishment of its chamber dedicated to international disputes in a symposium on December 13th, 2023 (4-7 pm).

This will be an opportunity to take stock of its achievements by reviewing progress made since 2018, the modus operandi, the perception of the Chamber’s users, its strengths and areas for improvement, and to consider the future.

Four round tables will discuss the specific procedural framework established for handling international disputes, whether the international chamber has developed a specific caselaw, the international attractiveness of French commercial justice and future reforms.

The programme can be found here.

Speakers will include judges from the court, academics, lawyers practising in Paris and abroad and officials from the French Ministry of Justice.

The symposium will be held in French with simultaneous translation.

Attendance is free, but registration is required at colloque.ca-paris@justice.fr

The third issue of the Revue critique de droit international privé of 2023 will be released shortly. It focuses on notarial practice in international family property law in the Ukrainian context, but contains also numerous case notes on private international law.

In the first article, Pierre Boisseau (University of Tours) examines the contours of the legal framework applied to receive and protect Ukrainians fleeing the fighting in their country of origin (Du droit d’asile classique à l’accueil des déplacés ukrainiens: réflexion sur la complémentarité des dispositifs de protection des réfugiés).

The abstract reads:

In Europe in general, and in France in particular, the reception of refugees is based on three complementary systems. In addition to the traditional right of asylum and subsidiary protection, there is now temporary protection. In very simplified terms, political asylum concerns those fighting for freedom; subsidiary protection protects people who have been victims of abuse by nonstate groups; and temporary protection, which stems from the geopolitical context in Europe, is currently used to receive and protect Ukrainians fleeing the fighting. Many have benefited from this, although part of them have now returned to Ukraine. But this surge of generosity towards Europeans does not seem to inspire the draft Pact on Asylum and Immigration of Thursday 8 June 2023 concerning refugees from other continents.

In the second article, Ambra Marignani (University of Tours) and Svitlana Yaroslavovna Fursa (Honored Lawyer of Ukraine & Center for Legal Research of Kyiv) study the question of property rights for couples displaced from Ukraine, under a conflict-of-laws perspective (Les pouvoirs des époux sur leurs biens : quelles problématiques pour les déplacés d’Ukraine ? Regards issus d’une comparaison franco-ukrainienne).

The abstract reads:

Displaced spouses from Ukraine may not imagine that, in some cases, French law is applicable to their rights to own, manage, enjoy and dispose of property. Notaries will be in the front line in containing this risk by informing and advising them. This work will be essential, particularly with regard to the rights that differ in content between French and Ukrainian law, which has been highlighted by the comparison of laws.

In the third article, Audrey Damiens (University of Tours) and Svitlana Yaroslavovna Fursa (Center for Legal Research of Kyiv) explore the role of notaries in dealing with the sensitive issue of cross-border separation of couples between France and Ukraine (La pratique notariale et les divorces en droit international privé : réflexion entre la France et l’Ukraine en temps de guerre).

The abstract reads:

The situation in Ukraine has led to population movements, particularly towards France. Married couples or one of their members now find themselves in a situation that comes under private international law. In their practice, French notaries are and will be faced with an increasing number of international situations relating to Ukraine, including divorce. This article looks at the practical difficulties that French notaries may encounter in divorce cases in Ukraine, and suggests some possible solutions. On the one hand, it looks at divorces in Ukraine that would come before a French notary. Secondly, it is proposed to consider divorce by mutual consent in France in an international situation linked to Ukraine.

In a fourth article, Alina Goncharova (State University of Soumy, Ukraine & Invited Fellow, University of Tours) and Fabienne Labelle (University of Tours) examine the law applicable to inheritance from a French-Ukrainian comparative perspective (Dévolution successorale et réserve héréditaire: comparaison entre la France et l’Ukraine).

The abstract reads:

The purpose of this study is to compare French and Ukrainian inheritance law. This study is particularly interesting in the event that Ukrainian law is applicable to the succession submitted to the French notary, as it provides some useful benchmarks in Ukrainian law. By studying the hypotheses of shares reserved for certain heirs, it also highlights significant differences in the internal public policy of each country. These differences could give rise to practical difficulties and discussions in both doctrine and case law.

Finally, a fifth article from the same authors, Alina Goncharova & Fabienne Labelle, deals with the question of drawing up wills in international French-Ukrainian context (Le testament, outil de planification de la succession internationale Le cas des Ukrainiens protégés temporairement en France).

The full table of contents is available here.

Under Article 8 of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), a court shall refer the parties to arbitration “if a party so requests not later than when submitting his first statement in the substance of the dispute.” This Model Law rule, upon which the equivalent provision of the Norwegian Arbitration Act is based, was the subject of a recent Norwegian Supreme Court decision over a dispute between a Danish and a Norwegian company regarding a distribution contract containing an arbitration clause referring disputes to arbitration in Denmark.

Before the dispute was initiated, the Danish company claimed for preservation of evidence in Norwegian courts, in accordance with the Norwegian Procedural Code. In connection to the claim for preservation of evidence, the Norwegian company stated that the matter was subject to arbitration and the court procedure should therefore be dismissed. This issue – whether the arbitration clause was a procedural impediment to the preservation of evidence – was rejected by the court of first instance. When this decision was appealed, both the court of second instance and the Supreme Court joined the conclusion of the court of first instance.

When evidence had been preserved, the Danish company initiated a procedure for a Norwegian conciliation council. Under Norwegian procedural law, a conciliation council serves as a court of first instance in civil matters but with a limited adjudicative competence. As its name implies, the idea behind the conciliation council is to settle civil disputes through conciliation. However, a conciliation council shall refer complicated matters to the ordinary courts. The conciliation council in the case in question referred the matter to the ordinary district court. Only then, in the procedure at the district court, did the Norwegian defendant state that the matter should be subject to arbitration. The district court dismissed this objection, referring to the decision by the Supreme Court, which had held that the arbitration clause did not impede the preservation of evidence. The court of appeal also came to the conclusion that the arbitration clause was not an impediment for the procedure, albeit with a completely different legal analysis underlying this conclusion. The court of appeal argued that the defendant had based its objection on the substance of the matter before the conciliation council, without invoking the arbitration clause. Hence, the right to invoke the arbitration clause as a procedural impediment was precluded under the Norwegian Arbitration Act.

As this decision was also appealed, the issue for the Norwegian Supreme Court was whether the right to invoke the arbitration clause was precluded. In its decision, the Supreme Court first held that a Norwegian conciliation council, despite its limited competence, is a national court for the purposes of the Norwegian Arbitration Act. Consequently, the next issue for the court to ponder was whether the defendant had requested the conciliation council to refer the parties to arbitration in the way that Article 8 of the Model Law requires. Under this article, a request shall be made “not later than when submitting [the] first statement on the substance of the dispute.” Holding that the wording of Article 8 is ambiguous and that there seems to be no clear international case law on the issue, the Supreme Court made its own interpretation of the critical point in Article 8. Here, the Court held that the Norwegian Procedural Act requires that a defendant party in a dispute before a conciliation council gives notice on whether it accepts or contests the claim. Norwegian law does not require the defendant to justify its position on the plaintiff’s claim. Taking a stance on whether a claim is accepted or contested is, regardless of whether this is justified, a statement on the substance of the dispute, according to the Supreme Court’s decision. Further, the court held that the opposite interpretation would risk creating unnecessary procedural delays. The right of the defendant to invoke the arbitration agreement was therefore precluded.

In summary, a party that wants to invoke an arbitration agreement as a procedural impediment must do so no later than at the first occasion when the party has a chance to submit a statement on the substance of the dispute.

Caroline Sophie Rapatz, Professor at the Christian-Albrecht University of Kiel, has accepted the invitation of the editors of the blog to present her recent book, titled ‘Das Internationale Privatrecht der EU – Vorbild oder Vormacht? Abgrenzungen und Wirkungen im Verhältnis zum nationalen und völkerrechtlichen Kollisionsrecht’ (European Union Private International Law – Role Model or Hegemony? Delimitations and Effects in Relation to National and International Conflict of Laws), published by Mohr Siebeck.

The relationship between the EU Regulations on private international law and the conflict-of-laws rules and instruments of other regulatory levels – national traditions and codifications on the one hand, bilateral treaties and multilateral conventions on the other – is at first glance a straightforward one. Within their scope of application, European rules take precedence with regard to national ones; the continued application of pre-existing treaties is guaranteed by exceptions in the EU Regulations. In fact, however, the interplay between the different regulatory levels is much more complicated.

This is evidenced by the increasing number of ECJ decisions which have to deal with the exact scope of application the EU Regulations and their delineation vis-à-vis national and international PIL rules. At the borderline between European and Member States’ PIL, characterisation issues are frequently solved in favour of the EU Regulations’ far-reaching application, displacing national conflicts rules (e.g. ECJ 12 October 2017 – C-218/16 (Kubicka); ECJ 1 March 2018 – C-558/16 (Mahnkopf)). However, when it comes to politically sensitive issues – for example, non-judicial divorces or non-heterosexual marriages – there is a remarkable tendency to leave more or less clearly defined gaps in the European instruments (e.g. ECJ 20 December 2017 – C-372/16 (Sahyouni)) and require the Member States to provide their own solutions. As a recent ECJ decision has demonstrated, questions of the EU Regulations’ scope of application are becoming virulent also with regard to treaty PIL (ECJ 12 October 2023 – C-21/22 (OP)). Naturally, such decisions on the scope of the European instruments can only be taken on the European level – but they leave the other regulatory level with the burden of adapting to them and solving the resulting coordination problems.

Furthermore, the influence of European PIL is not limited to the European instruments’ actual – and often broadly interpreted – scope of application. Although formally unaffected, national and international PIL rules increasingly have to adjust to the ever-growing domination of European regulatory concepts and values. Apart from the practical need for the Member States to adapt their remaining national PIL rules to their new European context in order to keep them functional, the demands of EU primary law put further pressure on the Member States. Again, the ECJ plays a central role, especially when questions of cross-border (status) recognition are at stake and national values are confronted with the fundamental freedoms (e.g. ECJ 2 June 2016 – C-438/14 (Bogendorff von Wolfersdorff); ECJ 5 June 2018 – C-673/16 (Coman)). In the interaction of treaty and convention conflict-of-laws rules with the EU Regulations, deviations from the European model prove to be practically and conceptually detrimental; combined with the political power of the EU, the development of treaty PIL is threatening to become dangerously dysbalanced.

As a German Habilitationsschrift, the monograph provides an in-depth analysis of the current state of the European harmonisation of PIL and shows that the approach to Europeanisation by individual EU Regulations has failed. EU PIL needs to reorient itself – either through self-constraint in a continued multi-level system, or through the courageous step towards a complete European Conflict-of-Laws Code.

The last month of 2023 will be a quiet one at the Court of Justice (in PIL terms). As of today, just a hearing and the delivery of an opinion are scheduled.

The hearing in the German case C-35/23, Greislzel, will take place on Thursday 7 December at 9.30 am. The request for a preliminary ruling, lodged in January 2023, addresses the interpretation of Articles 10 and 11 of Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility (Brussels IIa). The Oberlandesgericht Frankfurt am Main (Higher Regional Court, Frankfurt am Main, Germany) is asking:

To what extent is the regulatory mechanism provided for in Article 10 and Article 11 of the Brussels IIa Regulation limited to proceedings conducted in the context of relations between EU Member States? More specifically:

1. 1. Does Article 10 of the Brussels IIa Regulation apply, with the effect that the jurisdiction of the courts in the former State of residence is retained, if the child had his or her habitual residence in an EU Member State (Germany) before his or her removal and the return proceedings under the Hague Convention on the Civil Aspects of International Child Abduction (‘the HCAC’) were conducted between an EU Member State (Poland) and a third State (Switzerland) and, in those proceedings, the return of the child was refused?

If question 1 is answered in the affirmative:

1. 2. In the context of Article 10(b)(i) of the Brussels IIa Regulation, what requirements are to be imposed for the purposes of establishing continuing jurisdiction?
   3. Does Article 11 (6) to (8) of the Brussels IIa Regulation also apply in the case of return proceedings implemented under the HCAC in the context of relations between a third State and an EU Member State, as a State of refuge, in so far as the child had his or her habitual residence in another EU member state before the removal?

In the case at hand, a child, born to a German-Polish couple in Switzerland, had been living in Germany with her mother since she was some months old before the two moved to Poland. The father, who remained in Switzerland, had consented to the relocation, but (so he claims) only for some time. Afterwards he applied via the Swiss Central Authority (Federal Office of Justice in Bern) for the return of the child to Switzerland under the 1980 Hague Convention. The District Court for Krakow-Nowa Huta in Krakow, Poland, rejected the application. At a later stage, he lodged a new claim for the return of the child to Switzerland with the German Federal Office of Justice in Bonn, although he did not continue to pursue it. Finally, he applied in Germany for the transfer of sole parental custody of the child and, in the alternative, for the right to determine the place of residence. He also requested that the mother be ordered to return the child to him in Switzerland as of the effective date of the decision.

The request has been allocated to a chamber of five judges, with Mme L.S. Rossi reporting. AG M. Campos Sánchez-Bordona will deliver an opinion beginning of next year.

In addition, AG N. Emilou’s opinion in C-90/22, Gjensidige, expected some time ago, will most probably be published on 14 December.

On 17 October 2023, the European Commission adopted its 2024 work programme. As explained in a press release, the programme aims at simplifying the rules for citizens and businesses across the Union.

The initiatives that the Commission plans to take, or pursue with particular interest, in the course of 2024 are listed in three annexes.

Annex I is concerned with new policy and legislative initiatives. None of the initiatives in question relates to judicial cooperation in civil matters.

Annex II, on REFIT initiatives (i.e., initiatives aimed at making EU law simpler, less costly and future proof), contemplates, among other things, a revision of online dispute resolution for consumer disputes.

The repeal of the online dispute resolution for consumer disputes Regulation (Regulation (EU) No 524/2013) will remove associated reporting requirements, which are no considered to be longer needed. In addition, a proposal for a directive amending Directive 2013/11 on alternative dispute resolution for consumer disputes is addressed. The goal is, generally, to simplify and reduce current reporting requirements.

Various procedures with possible implications for private international law are featured in Annex III, which lists the pending procedures that the Commission regards as a priority. Although they are based on Article 114 TFEU rather than Article 81 TFEU, they are also relevant to private international law, notably insofar as they lay down provisions which are meant to apply whatever the applicable law, as determined under conflict-of-law rules, and accordingly interfere with the latter.

The list features the proposed Regulation on combating late payment in commercial transactions. The text is meant to address the inadequacy of the current legal framework, as shaped by Directive 2011/7 (the Late Payment Directive).

The proposed Directive on liability for defective products, repealing Directive 85/374 (Product Liability Directive) is also among the listed priorities, as is the proposed Directive on adapting non-contractual civil liability rules to artificial intelligence (AI Liability Directive). The objective of the latter is to promote the rollout of trustworthy AI to harvest its full benefits for the internal market. It does so by ensuring victims of damage caused by AI obtain equivalent protection to victims of damage caused by products in general. It also reduces legal uncertainty of businesses developing or using AI regarding their possible exposure to liability and prevents the emergence of fragmented AI-specific adaptations of national civil liability rules.

The proposed Directive on improving working conditions in platform work is equally on the list. Its rules may have a bearing on the operation of the rules of Rome I on the law applicable to employment contracts.

Annex III goes on by mentioning the proposed Directive on European cross-border associations, and the connected proposed Regulation as regards the use of the Internal Market Information System and the Single Digital Gateway, which aim at facilitating the effective exercise of freedom of movement of non-profit associations operating in the internal market.

The list further includes the proposals on the digital euro (see further this post) and the proposed Directive harmonising certain aspects of insolvency law. According to the Commission, action at EU level is needed in the field of insolvency to substantially reduce the fragmentation of insolvency regimes. The future instrument would support the convergence of targeted elements of Member States’ insolvency rules and create common standards across all Member States, thus facilitating cross-border investment. Measures at EU level would ensure a level playing field and avoid distortions of cross-border investment decisions caused by lack of information about and differences in the designs of insolvency regimes. This would help to facilitate cross-border investments and competition while protecting the orderly functioning of the single market. Since divergences in insolvency regimes are a key obstacle to cross-border investment, addressing this obstacle is crucial to realising a single market for capital in the EU.