EU Civil Procedure Law and Third Countries: Which Way Forward? 9781509948758, 9781509948765

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Introduction Alexander Trunk and Nikitas Hatzimihail

In the timespan between 1968 and today, the European Union has created a complex and detailed web of legislation and international treaties dealing with cross-border judicial cooperation1. The centerpiece (today) is the Regulation No 1215/2012 of 12 December 2012 (“Brussels Ia [or Ibis]2 Regulation”) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). The Regulation is the successor of the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, itself a landmark in the legislative and doctrinal history of private international law3. But also the Regulation 44/2001, which “Brussels Ia/Ibis” replaced, constituted another legislative landmark: what had begun as an intergovernmental project, using public international law tools to ensure the “simplification of formalities governing the reciprocal recognition and enforcement of judgments and courts or tribunals and of arbitral awards” became an integral part of the Community/Union edifice leading to a veritable system of EU private international law. Brussels I was supplemented by the “Rome” Regulations on applicable law (conflict of laws). Similar Regulations have been passed with regard to jurisdiction and recognition/enforcement in

1 See, e.g. https://eur-lex.europa.eu/summary/chapter/justice_freedom_security/2302. html?root=2302 and https://www.europarl.europa.eu/factsheets/en/sheet/154/judici al-cooperation-in-civil-matters (last access at: 01.12.2020). Matters of civil procedure are also addressed by the EU in other contexts (usually involving approximation of laws), e.g. consumer protection, and then do not necessarily require a crossborder dimension. 2 The terms Brussels Ia and Brussels Ibis are used in this book interchangeably, following the preference of the contributors. 3 Asser, ‘De l’effet ou de l’exécution des jugements rendus à l’étranger en matière civile et commerciale’ (1869) 1 Revue de droit international et de législation comparée, 82–99. The term private international law is used in this book in a broad sense, as comprising both conflict of laws and cross-border civil procedure.

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other civil proceedings, mainly in family law and succession4. In addition, the EU has passed Regulations on other aspects of cross-border civil proceedings, e.g. on cross-border service of documents and cross-border taking of evidence, which expanded significantly the means of judicial cooperation compared to the Hague Conventions in these subjects. More recently, the EU has even started to establish specific proceedings with a cross-border orientation, such as small claims proceedings, proceedings leading to a European Enforcement Order for uncontested claims and proceedings leading to a European Payment Order5. The focus of the EU’s legislative activity in this field is mainly on innerEU cooperation, e.g. recognition and enforcement between EU Member States, even though relations with non-EU countries (“third countries” or “third States”) are sometimes touched in specific provisions of the abovementioned Regulations6. The Brussels I regime constructed “external frontiers”, primarily on the basis of the defendant’s domicile in a Member State (general jurisdiction, forum actoris) complemented by certain specific jurisdictional grounds whose reach over third-country domiciliaries was justified on the basis of public policy7, or party autonomy.8 But, outside that framework, the national laws on jurisdiction of the Member States continued to govern cases involving third-country domiciliaries, leading to a binary jurisdictional system with increased protection for EU residents under EU law and increased subjection of non-residents under national law and leading to orders and judgments whose EU-wide enforcement was facilitated by EU law. This state of affairs may have contributed to the astonishing doctrinal development of European international civil and commercial litigation

4 Some of them combine provisions on cross-border civil procedure with conflict of laws and even substantive law, e.g. the 2012 Rome IV Regulation on Matters of Succession or the 2015 (recast) European Insolvency Regulation. 5 The 2014 EU Account Preservation Order Regulation, the 2000/2015 EU Insolvency Regulation and partly also the 2006 EU Payment Order Regulation extend into the field of civil execution and insolvency. 6 The same is true for some other EU Regulations or Directives, which (also) address matters of civil procedure, e.g. the 2016 General Data Protection Regulation (cf. Art. 79 para. 2 sentence 2 – the defendant may be established outside the EU). 7 Such as the exclusive jurisdiction grounds of Article 16 of the Convention, 22 of the Brussels I Regulation and now 24 of the Brussels Ia, to which must now be added the provisions of Art. 18 para. 1 and 21 para. 1 concerning consumer and employment contracts respectively. 8 See Art. 17 of the Brussels Convention, 23 of the Brussels I Regulation and especially Article 25 of Brussels Ia.

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over the past half-century. But it has also created problems globally and complaints outside Europe, which have only partially been remedied by EU and international legislative activity. The 2007 Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters have extended the Brussels I regime – and a unitary judicial area – to some of the major Western European trading partners of the EU Member States. Conventions developed under the auspices of the Hague Conference on Private International Law have also an important role to play in this regard. New doctrines have been promoted, by courts and scholars, in order to bridge the gap, with modest success. As personal and business relations between the EU (more precisely: persons established in the EU or having EU citizenship) and third countries have considerable practical importance, there is a long-going discussion whether the EU should address relations with non-EU countries also in the field of judicial cooperation in a more complete, coherent and equitable manner9. The issue was raised, in particular, in the context of the 2012 revision of the Brussels I Regulation of 22.12.2000, but did not come to a result. However, Art. 79 of the Brussels Ia Regulation obliges the European Commission to specifically address relations with non-EU countries in its next evaluation report due on 11 January 2022. The present collection of essays intends to make a contribution to this discussion. The origins of the book lay in a Conference organized by the Institute of East European Law of Kiel University (Germany) on 2/3 February 2017, where an early version of most chapters was first presented for discussion.10 Since the time of the Kiel Conference, two major developments have taken place. The first one has been the finalization and signature of the Hague Judgments Convention on 2 July 2019, which constitutes an important step in the decades-old process of producing a global convention on civil litigation.11 The second one has been the withdrawal of the United Kingdom from the EU (“Brexit”) on 1 February 2020, which

9 See e.g. the deliberations and documents of the European Group for Private International Law, https://www.gedip-egpil.eu/gedip_documents.html (since 2007) (last access at: 01.12.2020). 10 The program of the Conference is still available at https://www.eastlaw.uni-kiel.de /en/events/program_draft_eng_with_speakers_v5a_long (last access at: 01.12.2020). The contributions of Richard Fentiman and of Iryna Izarova have been added due to the topicality of the Brexit issue and in order to add the perspective of an EU-associated country. 11 See https://www.hcch.net/en/news-archive/details/?varevent=687 (last access at: 01.12.2020).

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however, includes a transitional period ending (as of today) on 31 December 202012. During this transitional period the UK is still treated like an EU Member country, but will be a “third country” after the end of this transition. As judicial cooperation in civil matters has not been addressed specifically in the 2019 Withdrawal Treaty, the legal treatment of judicial cooperation in civil matters between the EU and the UK after the end of the transition period remains at least as much a matter of concern today as it was at the time of the Kiel Conference in 2017: if anything, the prospect of the UK being treated as a third country and foregoing, at least in the short to medium term, a privileged relationship with the EU, has increased. A very recent additional development is the publication of the final draft (26 May 2020) of the ELI/Unidroit Model European Rules of Civil Procedure which are planned to be adopted by the two organizations in September 2020. Although the general ideas underlying this project were known to the authors of this book and were taken account of in this book, only now is the full text of the planned Rules available and has, to the authors’ best possibilities, been included into their analyses in this book. The purpose of this book is to rethink and structure arguments relating to possible legislative reforms, conclusion of treaties or other steps which could – or should from the authors’ perspective – be done in order to improve judicial cooperation between the EU and non-EU countries in comparison with the status quo. For the development of legislative proposal, the status quo will have to be analysed in brief, but merely with a view to developing arguments for legislative changes. Also, more weight has been given to the development of fresh ideas than to completeness of references about the status quo. A particularity of this book is that it understands judicial cooperation in civil and commercial matters broadly, in the sense that the study is not limited to the Brussels Ia Regulation, but includes other EU Regulations on cross-border civil and commercial proceedings as well. However, family and succession matters as well as civil execution and insolvency had to be excluded from this study because of their specifics, even if some structural ideas developed in this book might also be of use for third-country relations as to those proceedings. A further particularity of this book is that it tries to establish a dialogue with authors from (or dealing with) third countries. It seems evident that a feasible concept for legislative changes with regard to judicial cooperation

12 See https://eur-lex.europa.eu/content/news/Brexit-UK-withdrawal-from-the-eu.ht ml (last access at: 01.12.2020).

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with third countries cannot be developed by the EU alone (nor only within the Hague Conference on Private International Law), but needs an exchange of views, experiences and ideas with such countries. Moreover, traditionally the most vivid discussions had been the ones between U.S. and Western European academics. In contrast, the Kiel Conference achieved not only a balanced representation of EU and non-EU participants, but also a diversity of perspectives, in terms of both legal traditions and geographical regions. As is usual in the academic milieu, not all of this diversity and vibrant discussion is represented in this collection of essays, 13 but the spirit of the Conference and ensuing discussions have helped the authors to base their views on a broader comparative ground. Should the EU decide to review its legislation on cross-border judicial cooperation with non-EU countries in a more general manner, it would certainly be helpful to create a discussion structure with several third countries on these topics. The book has been organized in a logical sequence that takes account of the major subject areas of cross-border civil procedure. It begins with two essays asking us to think about the forms that institutional/legislative organization of international judicial cooperation may take. Jürgen Basedow brings together EU governance and civil procedure in addressing the case of the European Neighbourhood Policy and the private international law aspects of the EU agreements with Ukraine, Moldova and Georgia. Elina Moustaira uses Greece as a case study in addressing the often-neglected topic of bilateral treaties on judicial assistance between Member States and third countries. The second part of the book is devoted to the fundamental question of (direct) international jurisdiction. Alexander Trunk addresses the general jurisdictional framework at the EU level. Jurisdiction under the EU Regulations works in tandem with residual jurisdiction of the Member States, and Michael Stürner and Friederike Pförtner address one of the most salient aspects of residual jurisdiction. Having established the general picture of jurisdiction, Alberto Miglio contributes a study on a case with its own particularities and present-day interest, namely, how will the operation of the Unified Patent Court impact the Brussels I jurisdictional regime, which

13 Among the speakers of the Conference who were unable to contribute a written chapter for this volume, but whose insights have helped the contributions to this book, Dr. Johannes Koepp (London, UK), Doc. Dr. Svetlana Kroupko (Moscow, Russia), Prof. Dr. Marta Pertegás (then with the Hague Conference), Dr. George Svanadze (Tbilisi State University, Georgia), Prof. Kono Toshiyuki (Fukuoka, Japan) and Prof. Dr. Dr. h.c. Fryderyk Zoll (Cracow, Poland/Osnabrück, Germany), must be especially acknowledged.

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had upheld a very strict territoriality of patent disputes. Parallel proceedings are the elephant in the room, when it comes to EU-third country litigation, and an effort made for reform under Brussels Ibis does not settle the matter. The contribution by Luboš Tichý, provides a systematic approach of international lis pendens doctrine is therefore especially important. The next part of the book focuses on the second “big” topic of international civil procedure – mutual recognition and enforcement of judicia decisions. Dieter Martiny provides a systematic overview, identifying and evaluating all possible avenues – from multilateral instruments to reforming the law on third-country judgments. Dimitrios Tsikrikas is more concerned with the effects of Member States’ judgments in third countries, as well as with the effects of provisional measures. The two chapters showcase the areas of consensus as well as the differing preferences in normative approaches, which characterize EU legal doctrine today. These general contributions are followed by several area studies in the fourth part. Richard Fentiman addresses the complex question of the future judicial cooperation between EU and post-Brexit UK. Vladimir Yarkov provides a Russian perspective, and Iryna Izarova adds the perspective of an EU-associated country in Eastern Europe, Ukraine. Michael Stöber takes us to an often neglected South American continent, with a study of Colombia. The fifth and final part of the book includes concrete subjects often neglected as compared to jurisdiction and recognition/enforcement. Henriette-Christine Boscheinen-Duursma examines international service of documents and taking evidence: these are the two vital areas of judicial assistance, where EU Regulations coexist with very successful Hague Conventions. The next two essays concern the third-country impact of the EU Regulations instituting new civil processes. Alexander Trunk gives a general evaluation of such Regulations with regard to third States, and Azar Aliyev focuses on the third-State potential of the EU Order for Payment Regulation. Finally, Nazar Panych gives an assessment of the new European Rules of Civil Procedure from the perspective of EU neighborhood countries, thus including the instrument of soft law into the book. The conclusion by Alexander Trunk and Nikitas Hatzimihail aims at summarizing and reflecting upon these contributions, and developing some tentative ideas for future action. In closing, the editors would like to thank the association Ostrecht Kiel e.V. for its generous support and the staff of the Institute of East European Law, Kiel University, for editorial support. Particular mention should be made of Mr. Vladimir Dzoubinski, part-time intern at the Institute, for his 12

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comprehensive proofreading. The editors owe their particular gratitude to Ms. Josephine Doll who had the responsibility of administering the development process of this book. Alexander Trunk and Nikitas Hatzimihail (eds.) Kiel and Nicosia, 1 December 2020

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EU Law of Civil Procedure and Third Countries: The Case of the European Neighbourhood Policy Jürgen Basedow, Hamburg

Abstract The countries outside the European Union, targeted by this collection of papers, are each of a very different nature. Some have the ambition or even the legitimate expectation to join the EU in the future; others will stay outside and may not be eligible for membership. This article focuses on three countries somewhere in between: under the European Neighbourhood Policy (ENP) Georgia, Moldova and Ukraine have concluded ‘Deep and Comprehensive Free Trade Agreements’ with the EU that promise the implementation of some of the basic freedoms and require them to approximate their legal systems to that of the EU. Recalling Art. 220 of the 1957 EEC Treaty and its call for the mutual recognition of judgments between the Member States of the EU, the author points out the lack of corresponding provisions in the three association agreements and criticizes this inconsistency. Several ways of filling the gap are examined at the end of the article.

Keywords EU law – civil procedure – European Neighbourhood Policy (ENP) – Georgia – Moldova – Ukraine – deep and comprehensive free trade agreements – recognition and enforcement of judgments – Lugano Convention.

The EU Law of Civil Procedure is a common designation for all EU enactments, mostly regulations that deal with international civil litigation, i.e. with issues of jurisdiction, lis pendens, the recognition and enforcement of foreign judgments and with forms of cooperation of the courts of different countries in civil and commercial matters. It is essentially confined to cross-border relations within the European Union. Its extension to thirdState relations, suggested inter alia by the European Group on Private In-

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ternational Law,1 has so far been rejected. It is only in the context of some international conventions such as the Lugano Convention2 and the Hague Choice of Court Convention3 that the Union has adopted provisions pertaining to international civil litigation with regard to third States; but unlike many States which have implemented national legislation, the EU has not enacted any autonomous rules in this respect. The present contribution provides an opportunity to reconsider this limitation. In the context of this inquiry, it is useful to consider the policy environment. The EU law on international civil procedure did not emerge from nothing but played a certain role in the overall composition of EU policies. After a survey of this policy context (infra A), we shall take a look at the policies pursued by the EU vis-à-vis third States. Since there is no uniform foreign policy of this kind, we will examine a selection of specific third States. Our considerations will focus on the ENP, which the EU started to conceive shortly after the turn of the millennium and has pursued in recent years. In particular, we shall inquire into the ENP vis-à-vis the eastern neighbors of the Union (infra B). This will allow for some consequences for private international law, in general, and international civil litigation, in particular, (infra C) to be highlighted and for some conclusions for the future development of EU policy, related to international civil litigation vis-à-vis the countries in question, to be drawn (infra D).

A. EU civil procedure law in the context of EU policies The core of EU Law on international civil litigation is the Brussels I-Regulation.4 Its historical root and predecessor was the Brussels Convention on

1 See in GEDIP Proposal, Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011) 792 et seq., with a proposal in both English and French of draft articles intended to amend the Brussels-I Regulation. 2 Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, done at Lugano on 30.10.2007, Official Journal of the European Union (OJ) 2009 L 147/5; the other Contracting Parties are Iceland, Norway and Switzerland. 3 Convention on choice of court agreements, done at The Hague on 30.06.2005, OJ 2009 L 133/1, 3; see the Council Decision (2014/887/EU) of 04.12.2014 on the approval, on behalf of the European Union, of the Hague Convention of 30.06.2005 on Choice of Court Agreements, OJ 2014 L 353/5; so far the Convention has taken effect for the EU, Mexico, Montenegro and Singapore. 4 Regulation (EU), No. 1215/2012, OJ 2012 L 351/1.

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Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters.5 That convention had been negotiated between the six initial Member States of the European Economic Community (EEC); they had acted in compliance with the instruction laid down in Art. 220 of the Rome Treaty of 1957 establishing the EEC. The Article provided: “Member States shall, so far as is necessary, enter into negotiations with a view to securing for the benefit of their nationals: … the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards.”6 The Brussels Convention was not Community law strictly speaking, but was agreed upon by the Member States in the framework of the Community institutions and for the implementation of its purposes. As laid down in Art. 2 of the original version of the EEC Treaty, the EEC had the prime objective of establishing a Common Market which was later renamed Internal Market; all further objectives listed in Art. 3 and other provisions of the Treaty were subordinate to this ultimate goal. Thus, the negotiations that led to the Brussels Convention and this instrument itself were considered to promote the establishment of the Common Market as well. This was a realistic assumption. The international trade relations envisaged by the founders of the Community/Union were not to be implemented by governments exclusively; there were no foreign trade monopolies in the Western European countries as there were in the socialist regimes of Eastern Europe. Consequently, legal disputes arising from cross-border trade between contracting parties were unlikely to be resolved by mechanisms such as set-off and clearance, or diplomatic protection and negotiations, at the governmental level. According to the model underlying the EEC Treaty, it was rather a matter for private undertakings to carry out their commercial activities in the future Common Market and thereby to breathe life into this central institution of the EEC. For private actors,

5 Übereinkommen über die gerichtliche Zuständigkeit und die Vollstreckung gerichtlicher Entscheidungen in Zivil- und Handelssachen, geschlossen in Brüssel am 27.09.1968, OJ 1972 L 299/32; the Brussels Convention was concluded in Dutch, French, German and Italian; an English translation is reproduced in 1262 UNTS 222. 6 The Treaty establishing the European Economic Community, done at Rome on 25.03.1957 was concluded in Dutch, French, German and Italian; for an English translation see 298 UNTS 11.

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however, the likelihood of their rights being enforced in other countries was of crucial importance for their decision to engage in cross-border trade. In the words of the Court of Justice, Art. 220 EEC was meant “to facilitate the working of the common market…”7 Thus, the mutual recognition of judgments and all consequential steps taken to promote cross-border judicial cooperation in the Union were primarily linked to the operation of the Internal Market. It is not necessary, in this context, to detail the further steps that led to the present version of the founding Treaties: The Treaty of Maastricht addressed for the first time joint activities of the Member States connected to, but outside, the framework of the EEC in respect of “judicial cooperation in civil matters”;8 the Treaty of Amsterdam transferred this policy area from the cooperation of the Member States within the European Union to the legislative competence of the Community9 which was later characterized by the Court of Justice to be of an exclusive nature,10 and finally the Treaty of Lisbon introduced the current wording of Art. 67 para. 4 and Art. 81 of the Treaty on the Functioning of the European Union (TFEU).11 The close link between the objective of judicial cooperation in civil matters and the functioning of the Internal Market has been maintained to date, as can be inferred from Art. 81 para. 2 TFEU. According to this provision, the Union “shall adopt measures, particularly when necessary for the proper functioning of the Internal Market”, aimed at ensuring judicial cooperation in civil matters in its various aspects. As compared with the early years, the Union nowadays pursues a wide array of different policies; nevertheless, judicial cooperation in civil matters is still seen as particularly relevant for the operation of the Internal Market. The special weight given to this linkage should be kept in mind when considering the Union’s ex-

7 Case C-398/92, 10.02.1994, Mund & Fester v. Hatrex International Transport, ECR 1994 I-00467, para. 11. 8 Treaty on European Union, Art. K, para. 1, subpara. 6 and Art. K, para. 3, subpara 7, OJ 1992 C 191/1, 61. 9 Treaty establishing the European Community, Art. 73, para. I, subpara. d and Art. 73 m, as amended by the Treaty of Amsterdam, Art. 2, OJ 1997 C 340/1, 28 and 30. 10 Case A-1/03, 07.02.2006, Nouvelle convention de Lugano, ECLI: EU:C:2006:81; Case A-1/13, 14.10.2014, Hague Convention on the civil aspects of international child abduction, ECLI: EU:C:2014:2303. 11 Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union (Treaty of Lisbon), Art. 67, para. 4 and Art. 81 TFEU, see OJ 2007 C 306/136 and OJ 2016 C 202/47.

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ternal relations policy, in particular the one vis-à-vis its European neighbors.

B. The European Neighbourhood Policy The 2004 enlargement round added two Mediterranean countries and eight Eastern European States as new Member States to the European Union; in 2007 two more States – Bulgaria and Romania – joined the Union, and Croatia followed in 2013. This unprecedented growth gave support to the aspirations of further States to become candidates; but it also highlighted the need to define what should be the final borders of the Union in the future. In the resulting process, the States of the Western Balkans and Turkey were promised membership provided they met certain conditions. Such a perspective was excluded for other countries, in particular, those south of the Mediterranean and in Eastern Europe.12 But developments in the countries belonging to the latter group would also affect the interests of the Union. For example, the poverty of third State neighbors risked threatening the security of the Union’s external borders, and cross-border pollution endangered its environment. Therefore, the Prodi Commission conceived of an ENP, which was meant “to offer more than partnership and less than membership, without precluding the latter”; the perspective for the neighbors which were said to be a “ring of friends” was described as “sharing everything but institutions”.13 The ENP was built upon several soft law programs and previous agreements of the Union with the States concerned.14 In the late 1990s, the EU had concluded so-called Partnership and Cooperation Agreements (PCA) with some of the successor States of the Union of Soviet Socialist Re-

12 Smith, K., ‘The Outsiders: The European Neighbourhood Policy’ (2005), 81 International Affairs, 757–773. 13 Prodi, A Wider Europe: A proximity policy as the key to stability, Speech 02/619, Brussels 5-6.12.2002, reproduced on the website of the European Commission, Press releases database. 14 For a comprehensive survey see Vooren, EU External Relations Law and the European Neighbourhood Policy (2012), 179 ff. 15 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part, done at Luxembourg on 22.04.1996, OJ 1999 L 239/3. 16 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part, done at Luxembourg on 22.04.1996, OJ 1999 L 246/3.

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publics (USSR), i.e. with Armenia,15 Azerbaijan,16 Georgia,17 Moldova,18 and Ukraine,19; it had also agreed on a roadmap for further negotiations with Russia.20 These Partnership and Cooperation Agreements enunciated numerous objectives and general cooperation intentions, but very few hard rules. At that time, trade issues were left to universal negotiations in the framework of the World Trade Organization (WTO). When the Doha Round of the WTO came to a halt after 2003, the EU turned to a bilateralization of trade relations. The focus of the ENP shifted towards trade issues and the Union started to negotiate new treaties with the Eastern partners. This aroused the opposition of Russia with well-known results: Only Georgia, Moldova and Ukraine accepted the offer of the EU and negotiated socalled Deep and Comprehensive Free Trade Agreements (DCFTAs), but they had to pay a high political price in terms of civil commotions and territorial disintegration. The three association agreements establishing DCFTAs with Georgia21, Moldova22, and Ukraine23 were concluded under the exception from universal trade principles, permitted in Art. XXIV GATT for customs unions

17 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and Georgia, of the other part, done at Luxembourg on 22.04.1996, OJ 1999 L 205/3. 18 Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Moldova, of the other part, done at Brussels on 28.11.1994, OJ 1998 L 181/3. 19 Partnership and Cooperation Agreement establishing a partnership between the European Communities and their Member States, of the one part, and Ukraine, of the other part, done at Luxembourg on 14.06.1994, OJ 1998 L 49/3. 20 See Wesselink and Boschma, ‘European Neighbourhood Policy: History, Structure, and Implemented Policy Measures’ (2017) Tijdschrift voor economische en sociale geografie 108, 6 (4–20). 21 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part, done at Brussels on 27.06.2014, OJ 2014 L 261/4. 22 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and of the Republic of Moldova, of the other part, done at Luxembourg on 16.06.2014, OJ 2014 L 260/4. 23 Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, done at Brussels on 21.03.2014, OJ 2014 L 161/3. After an initial rejection of this Agreement by a referendum in the Netherlands the European Council adopted the declaration cited below in fn. 26 which led to the eventual approval of the Agreement by the Dutch parliament, see “Abkommen der Ukraine mit der EU ratifiziert”, Frankfurter Allgemeine Zeitung 25.02.2017, p. 4.

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and free trade areas.24 The Agreements take note of the three countries’ aspiration towards membership in the European Union,25 but do not give evidence of a corresponding intention of the Union. With regard to Ukraine, the Heads of State and Government of the Member States, meeting within the European Council even agreed on a declaration to the effect that the Association Agreement “does not confer on Ukraine the status of a candidate country for accession to the Union, nor does it constitute a commitment to confer such status to Ukraine in the future”.26 The three Association Agreements come close to integrating the partner States into the Internal Market.27 In particular, they aim for the implementation of the free movement of payments and of capital, of the free trade in goods and of the freedom of establishment. However, the freedom to provide services is only liberalized in accordance with specific commitments and the free movement of workers is not even enunciated as an objective of these free trade areas. The designation of the envisaged free trade areas as “deep and comprehensive” can be explained by the commitments of the partner countries to adapt their legislation to hundreds of EU enactments listed in the Association Agreements and their Annexes. The regulatory framework of trade will thus be assimilated to the one prevailing in the Internal Market to a very large extent. The significance of non-tariff trade barriers, which have

24 For the General Agreement on Tariffs and Trade (GATT), signed at Geneva on 30.10.1947, see 55 UNTS 187; see also the Special Protocol relating to Art. XXIV of the General Agreement on Tariffs and Trade, signed at Havana on 24.03.1948, 62 UNTS 56; cf. Lowenfeld, International Economic Law (2ndedn, 2008), 42; Nowrot, in Tietje (ed), Internationales Wirtschaftsrecht (2009), § 2 para. 133 ff., 152 ff. 25 For Ukraine see § 6 of the Preamble of the Association Agreement which simply points out that the EU “acknowledges the European aspirations of Ukraine”; this is considered as a novel concept designated as “integration without membership” by van der Loo, the EU-Ukraine Association Agreement and Deep and Comprehensive Free Trade Area, Leiden and Boston, Brill Nijhoff 2016, 175 ff. 26 See the Annex to the Conclusions of the European Council Meeting of 15.12.2016, EUCO 34/16, para. A, reproduced on the website of the Council, https://www.consilium.europa.eu/en/european-council/conclusions/ (last access at: 29.10.2020). 27 See Koeth, The 'Deep and Comprehensive Free Trade Agreements': An appropriate response by the EU to the challenges in its neighbourhood?’ (2014) Eipascope. 25, see the website of the European Institute for Public Administration at Maastricht: https:// www.eipa.eu/wp-content/uploads/2017/11/EIPASCOPE_2014_WKO.pdf (last access at: 29.10.2020).

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become more and more important over the years is thereby drastically reduced. It may suffice to exemplify the extent of the envisaged assimilation with regard to financial services: Annex XVII of the EU-Ukraine Association Agreement lists almost 60 binding EU instruments, which Ukraine promises to take over, some of them comprising several hundred articles. The partner States have accepted similar obligations for almost all areas of EU law. The sheer length of the DCFTAs conveys an impression of their comprehensive nature: Each of the Agreements with Georgia and Moldova fills about 740 pages in the Official Journal, the one with Ukraine even more than 2100 pages. The only area of EU law and policy that appears to be almost a blind spot in these Agreements is the conflict of laws.

C. Mutual recognition of judgments in the association agreements The antecedent of Art. 220 EEC mentioned above28 suggests that treaties such as the Association Agreements in question, establishing not only a free trade area or a customs union but providing for a far-reaching adjustment of the legal framework of markets, should also address the question of how to increase the confidence of market actors in the enforceability of their rights and judgments obtained in the whole market area. This is all the more so as the Agreements with the post-Soviet Republics are intended to divert their trade from Russia to the European Union.29 This goal is unlikely to be achieved if market actors with bilateral relationships with EU countries are afforded less legal security than that which is ensured by the multilateral Minsk and Kiev Agreements within the Community of Independent States.30

28 See above, fn. 6. 29 This intention emerges for example from Art. 39 para. 1 of the EU-Ukraine Association Agreement which lays down the prohibition against maintaining or establishing customs unions or free trade areas with other States which are in conflict with the trade arrangements of the EU-Ukraine Agreement. Similar provisions are contained in Art. 36 of the EU-Georgia Agreement and in Art. 157 of the EUMoldova Agreement. 30 The Treaty concerning the modalities of the settlements of disputes related to the exercise of commercial activity, done at Kiev on 20.03.1992, and the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters, done at Minsk on 22.01.1993 are in force for Georgia, Moldova and Ukraine; English translations, as well as an introductory note prepared by Gerasimchuk and entitled “The relationship between the judgments project and certain regional in-

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The need for rules on judicial cooperation in civil and commercial matters is further illustrated by population statistics, as can be inferred from the example of Ukraine. Ukrainian citizens are by far the most important group of third State nationals who have been granted a first residence permit in the European Union: about 500,000 people in the year 2015.31 According to German statistics, 134,000 Ukrainian citizens lived in Germany in December 2015.32 While the Association Agreements do not grant the free movement of workers to these people as a matter of EU law, some Member States are apparently more generous. In any case, the large scale immigration gives rise to a growing number of legal disputes, for example in family matters relating to maintenance or parental responsibility, which require a functioning system of cross-border judicial cooperation. The present law governing the multiple facets of judicial cooperation cannot be analysed in this contribution. Some remarks on the mutual recognition and enforcement of judgments must suffice. At the level of the Union, there are no general rules governing the recognition and enforcement of judgments originating in Georgia, Moldova or Ukraine. The matter is entirely left to the law of the individual Member States. Some Member States have concluded bilateral recognition and enforcement treaties with Georgia, Moldova or Ukraine. In particular, 10 Member States have concluded such bilateral treaties with Ukraine.33 Outside the scope of such conventions, the national law of Member States applies to the recognition of foreign judgments. It displays a wide variety of solutions. On the liberal side, more recent statutes such as the Italian one, limit scrutiny of a foreign judgment to an assessment of its compatibility with some procedural guarstruments in the arena of the Commonwealth of Independent States” Doc. no. 27 of April 2005, reproduced on the website of the Hague Conference on Private International Law: https://www.hcch.net/en/publications-and-studies/details4/?pid= 3513&dtid=35 (last access at: 29.10.2020); see also Kurzynsky-Singer, ‘Commonwealth of Independent States (CIS)’ in: Basedow, Hopt and Zimmermann (eds) (2012), Vol. I The Max Planck Encyclopedia of European Private Law, 267–277 (271). 31 See https://ec.europa.eu/eurostat/documents/2995521/7715617/3-27102016-BP-EN .pdf (last access at: 29.10.2020). 32 Statistisches Bundesamt, Bevölkerung und Erwerbstätigkeit – Ausländische Bevölkerung. Ergebnisse des Ausländerzentralregisters 2015 (Fachserie 1, Reihe 2), Wiesbaden, Statistisches Bundesamt 2016, p. 37. 33 Cyprus, Estonia, Finland, Greece, Hungary, Italy, Latvia, Lithuania, Poland and Rumania; the author is indebted for this information to Dr. Volodymyr Korol, senior research fellow, Academician F.H. Burchak Scientific Research Institute of Private Law and Entrepreneurship of the National Academy of Law Sciences of Ukraine, Kyiv. It should be noted that the Treaty with Italy is not mentioned on the website of the Italian government.

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antees and national public policy.34 A more restrictive solution, laid down, for example, in German law posits the additional requirement of reciprocity.35 The other extreme that can be found inter alia in Swedish law is the complete rejection of enforcement in the absence of an international commitment36. The latter solution, i.e. the rejection of foreign judgments in the absence of a treaty, was also espoused by the law of the USSR.37 The three successor States in question have replaced it and require reciprocity alongside some other conditions; however, the handling of this requirement appears to be rather uncertain. While Ukrainian law is said to provide for a rebuttable presumption in favor of the existence of reciprocity38, no such clarification seems to be generally accepted in Georgia39 and Moldova.40 All in all, the mutual recognition and enforcement of judgments in civil and commercial matters is far from being ensured or, at least, predictable in the relations between the EU and its Member States on the one side and the three Eastern partners on the other. Moreover, EU creditors can avail

34 See Art. 64 of the Italian law of 31.05.1995 no. 218 on the Reform of the Italian system of private international law. 35 See for Germany § 328 para. 1 Nr. 5 ZPO. 36 See Bogdan, Private International Law in Sweden (2015), p. 117. 37 See with many references Gerasimchuk, ‘Die Urteilsanerkennung im deutsch-russischen Rechtsverkehr’ (2007), 16–22. 38 See Navrotskiy and Sykaluk, ‘Anerkennung und Vollstreckung von deutschen Urteilen in der Ukraine’, in AHK – Delegation der deutschen Wirtschaft in der Ukraine (ed), Rechtliche Rahmenbedingungen und Investitionsschutz in der Ukraine (2015), 14–16; Korol, above at fn. 33 has kindly confirmed this information. 39 See Art. 68 para. 2 (e) of the Georgian Law on Private International Law no. 1362 – II of 29.04.1998; an English translation of the provision can be found in Svanadze, Jurisdiction clauses and the recognition and enforcement of foreign judgments in Georgia (2016), in Beiträge und Informationen zum Recht im postsowjetischen Raum, see https://www.mpipriv.de/files/pdf3/2009_12_09_023.pdf (last access at: 29.10.2020), see also Svanadze, Recognition of Foreign Judgments in Georgia: Is the recognition of foreign judgments predictable? (2009), p. 14–16 on the interpretation of the reciprocity requirement in Georgia: https://www.mpipriv.de/files/ pdf3/2009_12_09_023.pdf (last access at: 29.10.2020). 40 See Art. 467 para. 1 of the Code of Civil Procedure of Moldova of 30.05.2003; a German author interprets this provision as requiring not more than a recognition, in the foreign country, of the effects of Moldovan judgments that appears appropriate in the circumstances of the case, see Aden in: Reinhold Geimer/Rolf A. Schütze, eds., Bülow/Böckstiegel, Der internationale Rechtsverkehr in Zivil- und Handelssachen, C.H.Beck, München 1973 ff., Loose leaf, Vol. VI, no. 1091, p. 6; the conclusion that Moldova basically enforces foreign judgments is, however, difficult to understand.

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themselves, in legal disputes with debtors domiciled in the East, of ‘exorbitant’ heads of jurisdiction as laid down in the national law of the respective Member State.41 The resulting judgment is enforceable in all Member States. On the other hand, the effect that a judgment originating in one of the Eastern partner countries may have in the Member States of the EU depends on where the judgment debtor disposes of assets and where the creditor therefore applies for enforcement. An enforcement decision obtained in one Member State does not entitle the creditor to enforce the third State judgment in other Member States: “exéquatur sur exéquatur ne vaut”. EU debtors are thereby encouraged to relocate their assets to Member States such as the Sweden42 which exclude the enforcement of judgments from the Eastern partner States; a situation that does not stimulate trade with EU partners. Commercial arbitration is a possible escape, since all countries involved are Contracting Parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958;43 but this instrument is of little avail for non-contractual claims and small or medium-sized claims. The Association Agreements address this problem in a single provision. The relevant provision in the Association Agreement of Georgia, is drafted as follows: “The parties agree to develop judicial cooperation in civil and commercial matters as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation and, in particular, the Conventions of the Hague Conference on Private International Law in the field of international legal cooperation and litigation as well as the protection of children.”44 As compared with Art. 220 EEC, this provision establishes no duty of subsequent negotiations on the mutual recognition of judgments. It is also noteworthy that the EU did not require the acceptance of private international law instruments such as the Rome I and II Regulations45 which would have ensured the application of the same national law in cross-border cases in the courts of both EU Member States and the partner coun-

41 See Regulation (EC), No 44/2001, Art. 6, Regulation (EU), No. 1215/2012. 42 See above at fn. 36. 43 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10.06.1958, 330 UNTS 3. 44 EU-Georgia Agreement, Art. 21, para. 1; almost identical EU-Moldova Agreement, Art. 20, para. 1; similar EU-Ukraine Agreement, Art. 24, para. 2. 45 Regulation (EC), No 593/2008; Regulation (EC) No 864/2007.

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tries. One might further question why the protection of children is given particular attention, but not e.g. the enforcement of maintenance claims. Finally, it is remarkable that the Parties did not contemplate the need for rules specifically designed for legal cooperation between the EU and the respective partner State. Instead, the appropriate tools for the development of judicial cooperation are considered to be multilateral conventions, in particular those of the Hague Conference. But those conventions, tailored for universal needs, do not have a regional purview and are not designed to support the development of economic exchange in a Deep and Comprehensive Free Trade Area. What is more, the recently adopted Hague Convention intended to secure the mutual recognition and enforcement of judgments has a doubtful future. It is a convention simple dealing purely with recognition and enforcement and clearly falls short of the double convention model reflected in the Brussels and Lugano conventions.46 All in all, the significance of international civil litigation for the development of a cross-border market appears to be much greater than that which emerges from the three Association Agreements. While the negotiators dedicated much time to quotas for the trade in honey, eggs and other agricultural products,47 they did not care for the legal framework that encourages private market actors to actually engage in cross-border trade.

D. Conclusion: What are the next steps? Private International Law, in general, and the law of international civil procedure, in particular, is often considered as a legal discipline that exclusively affects private interests: the interests of sellers and buyers, of carriers and shippers, and of plaintiffs and defendants. It therefore appears appropriate to note that, quite to the contrary, there is a wider background in international law that determines the attitude of States towards foreign judicial proceedings and judgments. In the aftermath of World War II, the countries of the West abandoned their previous nationalistic view of the world, opening their markets, their political regimes and also their judicial

46 Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters: https://www.hcch.net/en/instruments/con ventions/full-text/?cid=13; so far, the Convention has been signed but not ratified by Uruguay and Ukraine (last access at: 29.10.2020). 47 ‘Ukrainian farmers, poised for growth, stumble after E.U. deal’, New York Times, 23.12.2016.

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systems to influences from abroad. Art. 220 EEC gives clear evidence of the interdependence between judicial integration on the one side and the economic and political integration on the other. To the extent that specialists determine the course of discussions in the various fields of law, this interdependence falls into oblivion. The socialist systems of Eastern Europe were kept imprisoned in nationalistic confinement for a much longer period than the West. They started to open their markets, their politics and their cultures only after the collapse of the USSR in 1991. For the three countries treated in this paper, the Association Agreements of 2014 have created Deep and Comprehensive Free Trade Areas with the European Union which give evidence of the Contracting Parties’ intention to open their respective markets and to adjust their legal framework to European standards. In many respects, these Free Trade Areas come close to the Internal Market. With regard to judicial cooperation, the three Eastern countries appear to have made a remarkable step from the previous blanket rejection of foreign judgments to their acceptance on the basis of reciprocity. So far, the European Union has done nothing to support this tendency towards the increasing openness of national judiciaries. While the Association Agreements provide for the integration of thousands of EU provisions into the legal systems of the partner States, they are outright taciturn on the issue of judicial cooperation in civil matters. Considering the close relations between neighbors, it is surprising that the Association Agreements have done so little for the resolution of disputes which are well-known to be more frequent between neighbors than in other relations. The solution outlined in the three Agreements, i.e. constructive cooperation in the framework of the Hague Conference on Private International Law refers to global standards in circumstances where regional standards are needed. In former years and vis-à-vis some Western European neighbors, the Union created a system of mutual recognition based upon unified rules on jurisdiction, i.e. the Lugano Convention. It is not unlikely that the Contracting Parties to the Lugano Convention will approve the accession of the United Kingdom after its exit from the Union; in the alternative, a similar instrument might be negotiated. Thus, a model for a future instrument on jurisdiction and the recognition and enforcement of judgments with the Eastern partner States is already in existence. If the Contracting Parties of the Lugano Convention do not approve the accession of the Eastern countries, a separate convention could be concluded following the model of Lugano. The need for such an instrument cannot be disputed. Critics may refer to the risks inherent in corruption which is still widespread in Eastern Europe. But it should not be forgotten 27

Jürgen Basedow

that the three Association Agreements explicitly address this risk with specific anticorruption programs. If the Union really wants to offer more than partnership but less than membership, the effective promotion of judicial cooperation would be an important contribution to this main objective of the ENP.

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The Role of Bilateral Judicial Assistance Treaties in the Context of EU Civil Procedure Law and Third Countries Elina N. Moustaira, Athens

Abstract The article starts with general tendencies of judicial assistance both on the level of national, international and EU law. The European Union has not yet given much attention to the elaboration of rules on international legal cooperation with third States or on the recognition and enforcement of judgments from third States. Existing bilateral treaties of EU Member States with third States continue to apply, but new bilateral treaties of Member States and third States may only be concluded with the permission of the EU. Greece has concluded numerous bilateral treaties with third countries, some of which have led to considerable court practice. In general, Greek courts follow the “Günstigkeitsprinzip”, applying the provisions most favorable to recognition of foreign judgments. Generally speaking, the principle of favor cooperationis should be the axis of actual and future legal regimes of the EU Member States towards third countries.

Keywords International judicial cooperation – exclusive external competence of EU – bilateral judicial assistance treaties – reciprocity – favor cooperationis.

A. Introduction International judicial cooperation, an element of current private international law in its broad sense, has in recent times been seen an important change of its basis. Traditionally, international judicial cooperation was grounded mostly on the concept of “reciprocity”1 While this concept still 1 As an important example one can mention the U.S. Supreme Court decision in Hilton v. Guyot, 159 U.S. 113 (1895).

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characterizes – despite much critique2 – the legal position of several countries of the world, it has never been of general use. For example, in the U.S. the Uniform Foreign-Country Money Judgments Recognition Act (UFCMJRA) of 2005 and the states that have adopted it, do not use the reciprocity requirement3. The same is true for the Restatement (Third) Foreign Relations Law4. Several U.S. states, however, provide that their courts have the discretion to refuse to recognize or enforce a foreign judgment when reciprocity is not guaranteed, or make reciprocity even a mandatory requirement for recognition of a foreign judgment. In 2005, the American Law Institute drafted a Foreign Judgment Recognition and Enforcement Act (FJREA), which would provide for a modified reciprocity requirement5. In most European countries, the requirement of reciprocity has been replaced by the conception that international judicial cooperation is regarded as obligatory. This is the case either when there are international treaties between some countries, or when such cooperation is based on national rules of private international law or international custom. An important example of a new principle of favor cooperationis is the recent Spanish Act 29/2015 on International Legal Cooperation in Civil Matters6. According to its preamble, the Act purports to cause Spanish authorities to open-up unilaterally to international cooperation, both actively and passively, with third countries, thus assuming a “general obligation of cooperation which emanates from general International Law”. According to the Art. 3 of this Act, the requirement of reciprocity is substituted by the principle of cooperation. Thus, reciprocity is not a condition for cooperation anymore. However, if the authorities of another State repeatedly refuse to cooperate with Spanish authorities or – even worse – have (to obey) a legal mandate not to cooperate, the Spanish Government could, by a royal decree, estab-

2 See, for example, Qisheng, The Recognition and Enforcement of Foreign Judgments Between the United States and China: A Study of Sanlian v. Robinson’ (2013) 6 Tsinghua China L. Rev., 23, 30–31, 36. 3 The text of the UFCMJRA is available at https://www.uniformlaws.org (last access at: 29.10.2020). 4 See, e.g. https://iclg.com/practice-areas/enforcement-of-foreign-judgments-laws-and -regulations/usa (at 2.7) (last access at: 29.10.2020). 5 As to this ongoing project see https://www.ali.org/publications/show/recognition-a nd-enforcement-foreign-judgments-analysis-and-proposed-federal-statute/ (last access at: 29.10.2020). 6 Ley 29/2015 de 30 julio 2015, de cooperación jurídica internacional en materia civil, available at https://www.boe.es/diario_boe/txt.php?id=BOE-A-2015-8564 (last access at: 29.10.2020).

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lish that Spanish authorities would not cooperate with the authorities of that State. The Spanish legislator decided to incorporate this technique in the Act, taking into account that it is already contained in some instruments Spain is a party to7.

B. EU civil procedure law and third countries The European Union has, so far, not given much attention to rules on international legal cooperation in civil matters with third States. Thus, in these situations the internal legislation of each Member State is normally applicable. However, at the same time an interpretation of the external competence of the EU has been imposed by the CJEU, according to which the EU is seen as exclusively competent to conclude treaties with third States on judicial cooperation in civil matters and, consequently, the Member States have lost their competence to conclude new treaties with third States to a large extent8. This means that the Member States cannot conclude new treaties in most of these fields. In addition, under Art. 351 TFEU the EU Member States are obliged to make use of all appropriate measures to eliminate incompatibilities, which may exist between their existing international treaties with third countries and the law of the EU. It has been correctly pointed out that the bilateral treaties, which Member States have concluded with third States, were the result of specific necessities or specific bonds between the contracting States. Those bonds and necessities are not necessarily significant for the European Union as a whole, which is probably the main reason why the EU has not yet really negotiated bilateral treaties with third States in the field of Private International Law including judicial assistance. However, the EU has adopted two instruments, which intend to organize a coordination between the EU’s competences and specific necessities of Member States with regard to the conclusion of certain international treaties in the field of Private International Law: • the Regulation (EC) 662/2009 of 13 July 2009 establishing a procedure for the negotiation and conclusion of agreements between Member

7 See Rodríguez, ‘La ley de cooperación internacional en materia civil’ (2016) Cuadernos de Derecho Transnacional 8, 234–259 (237–238). 8 CJEU, Opinion 01/03 of 7 February 2006 on the competence of the EU to conclude the new Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

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States and third countries on particular matters concerning the law applicable to contractual and non-contractual obligations, and • the Regulation (EC) 664/2009 of 7 July 2009 establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries concerning jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters, matters of parental responsibility and matters relating to maintenance obligations, and the law applicable to matters relating to maintenance obligations. The fact that this possibility of coordination has been offered by these two Regulations is viewed positively9. In principle, application of an existing bilateral treaty between an EU Member State and a third State (as permitted under Art. 73 para. 3 of the Brussels Ia Regulation) does not create problems. However, it is worth mentioning that there may be treaty conflicts if several EU Member States have concluded such treaties with a third State and these treaties should differ in comparison to each other. This may lead to different results for citizens of that third State and at the same time could create incompatibilities between these bilateral treaties and EU law.

C. Example: Bilateral treaties of Greece During the time between the two World Wars and even more so after the Second World War, Greece concluded numerous bilateral judicial assistance treaties, a part of which included also recognition and enforcement of foreign judgments. After 2003, Greece has not signed such treaties anymore, after the European Court of Justice recognized the EU to have exclusive competence in this field10. The bilateral treaties concluded by Greece with other countries amount to 17. Of these 17 treaties, only two are purely treaties regulating the recognition and enforcement of judgments: the Hellenic-German treaty of

9 Cf. also De Miguel Asensio, ‘Convenios Internacionales y Unificación del Derecho Internacional Privado de la Unión Europea’, in Nuevas fronteras de la Unión Europea (2012), 57–77. 10 See supra fn. 9.

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04.11.196111 and the Hellenic-Yugoslavian treaty of 18.06.1959. Contrary to the second one, the first one has been applied abundantly. The other 15 treaties, which cover all issues of judicial assistance, have been concluded between Greece and Albania (17.05.1993), Armenia (21.11.2000), Bulgaria (10.04.1976), Georgia (10.5.1999), China (17.10.1994), Cyprus (05.03.1984), Lebanon (05.04.1979), Hungary (08.10.1979), Ukraine (02.07.2002), Poland (24.10.1979), Romania (19.10.1972), the USSR (21.05.1981), Syria (02.06.1981), Czechoslovakia (22.10.1980) and Tunisia (12.04.1993). Although these bilateral treaties could not be considered as parts of one and the same system, it should be mentioned that all of them present significant similarities12. It has been stated that the bilateral treaties, which Greece has concluded throughout these years, were not the consequence of a single concrete plan on Greece’s part. They were each concluded on the basis of separate plans on the occasion of distinct targeting by each successive Hellenic government. In any case, under Greek private international law, the existence of a bilateral treaty is not a necessary requirement for the recognition and enforcement of foreign judgments. It simply intensifies the cooperation between the contracting States. One of the most frequently applied bilateral Conventions Greece has concluded with other countries is the bilateral treaty on judicial assistance in civil and criminal matters, which was signed in 1981 by the Hellenic Republic and the USSR.13 It was ratified by Greece in 1982 and entered into force on 01.09.1982. With the dissolution of the USSR and according to the Alma-Ata Declaration signed on 21.12.1991 by 11 ex-Soviet Union countries14, it would seem (at least from the Greek perspective) that the Judicial Assistance Con-

11 Vertrag zwischen der Bundesrepublik Deutschland und dem Königreich Griechenland über die gegenseitige Anerkennung und Vollstreckung von gerichtlichen Entscheidungen, Vergleichen und öffentlichen Urkunden in Zivilund Handelssachen from 04.11.1961, see for the German and Greek version of the treaty BGBl. 1963 II, 110. 12 Yessiou-Faltsi, Law on Compulsory Enforcement III – International Compulsory Enforcement (in Greek) (2006), 881. 13 For the Russian and Greek version of the text and the English translation see https://treaties.un.org/doc/Publication/UNTS/Volume%201311/v1311.pdf (last access at: 29.10.2020). 14 For a general overview see Vojtovich, The Commonwealth of Independent States: An Emerging Institutional Model, http://www.ejil.org/pdfs/4/1/1211.pdf (last access at: 29.10.2020).

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vention between Greece and the USSR still applies in relation to Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan and Uzbekistan. Between Greece and Russia, this has been formally confirmed in a Protocol between the Governments of the Hellenic Republic and the Russian Federation regarding the bilateral conventional framework of the two countries signed in Athens on 13.12.1995. Greece has furthermore signed bilateral Conventions with Armenia (2000), Georgia (1999) and Ukraine (2004). A case law analysis shows the following: In some cases, Greek courts, different from what they were supposed to, did not apply the provisions of the bilateral convention, preferring to apply the respective national procedural provisions (articles 323, 780 and 905 of the Greek Code of Civil Procedure). Fortunately, this omission has not led to results that contradicted the spirit of the Convention. The preference of Greek courts to apply domestic provisions instead of the provisions of a bilateral treaty, could partly be explained by the fact that the succession of States to the USSR has caused several complications – one of them is that some regions would strive for autonomy15. In some other cases, Greek courts applied both the bilateral treaty and the national procedural provisions. Although international treaties have priority over national rules under Art. 28 par. 1 of the Hellenic Constitution, the above mentioned is not an unusual approach by the Greek courts. This cumulative application emphasizes the Greek jurisdiction acting in favor of the recognition of foreign judgments. It should be stressed that the opinion prevailing both in theory and in case law in Greece is to favor the recognition of a foreign judgment and, if case may be, to rather apply domestic provisions favorable to recognition over strict provisions of an international (bilateral or multilateral) treaty16, since at some points the requirements set by international treaties are stricter than those under domestic law. This Günstigkeitsprinzip17 is also the prevailing principle in Germany, Austria, Italy and the Netherlands. On the contrary, it seems that in the UK, Belgium and Luxemburg, the principle of the exclusivity of the application of international treaties (“Garantieprinzip”18 or “Ausschliesslichkeit-

15 Anthimos, ‘Recognition of Russian Personal Status Judgments in Greece: A Case Law Survey’ (2014) 2 Russian Law Journal, 49, 50, 52–54. 16 Anthimos, ‘Recognition of Russian Personal Status Judgments in Greece: A Case Law Survey’ (2014) 2 Russian Law Journal, 59. 17 Literally: principle of favorability. 18 Literally: guarantee principle.

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sprinzip”) prevails. Opinions in France are divided between the two principles as well19. In Greece there are also scholars supporting the opposite opinion, who believe that international treaties must be applied exclusively, independently of whether domestic law is more favorable under the concrete circumstances. The abovementioned comments about the cumulative application of both regimes or the exclusive application of the domestic procedural provisions could also be transferred to the other bilateral treaties Greece has concluded. The case law analysis also shows that the most important bilateral treaties in actual practice are the ones concluded with Albania, Georgia and the USSR. Some treaties are dormant, for example the ones with Lebanon, Syria and Tunisia. The same applies at the moment to the treaty with China, but the development of commercial relations with China could change that situation. Most of the treaties are applied exclusively or almost exclusively to cases of personal status (Albania, Armenia, Georgia, Ukraine, Poland, Rumania, Russia, Serbia, Czech Republic).

D. Conclusion All in all, research in every rule level, national and international, has proven that Greek courts keep a liberal stance and favor the free circulation of foreign judgments in Greece. 20 Summing-up the foregoing analysis, I am of the opinion that the principle of favor cooperationis should be the axis of current and future legal regimes of the EU Member States towards third countries.

19 Yessiou–Faltsi, Law on Compulsory Enforcement III – International Compulsory Enforcement (in Greek) (2006), 883, mn 37. 20 Anthimos, Foreign Judgments and Arbitral Awards, 3–4, 271, 273.

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Direct Jurisdiction – What Rules (if any) for Relations with Third Countries? Alexander Trunk, Kiel

Abstract The following general article on direct jurisdiction, first, briefly examines the status quo of existing EU provisions on jurisdiction in civil and commercial cases with particular regard to their relevance for parties domiciled in third countries and analyses the interests and values involved in this context. It is shown that the existing EU provisions do not fully correspond to justified interests of parties as well as to the general purpose of balanced cross-border judicial cooperation. From this starting point, the article tries to structure methodological approaches towards possible legislative changes and develops concrete proposals for legislative amendments (or discussion about such amendments), conclusion of international agreements or approximation of jurisdictional rules between the EU and third countries.

Keywords Direct jurisdiction in Brussels Ia Regulation – general/specific/protective/ exclusive jurisdiction – international treaties on jurisdiction – soft law instruments – coordinated amendments.

Jurisdiction1 in the sense of rules, which give the courts of a country on the basis of certain connecting factors (heads of jurisdiction) the power to decide a civil or commercial dispute (or carry-through another judicial proceeding), is one of the key issues in civil procedure, in particular also in international civil procedure2. Rules of jurisdiction, be they established un-

1 In German: “Zuständigkeit”. 2 This article does not deal with “jurisdiction” (in the larger sense) under general rules of public international law (“Gerichtsbarkeit”).

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der international law, EU law or domestic law, have a long, well-established tradition. In the context of the present study, the most important source of (international3) jurisdiction under EU law is the Brussels Ia Regulation (recast) of 12 December 2012. The general theory of jurisdiction distinguishes between direct and indirect jurisdiction, i.e. jurisdiction for deciding a dispute (direct jurisdiction) and jurisdiction as a prerequisite of recognition/enforcement of foreign judgments (indirect jurisdiction) . The focus of the present article is on direct jurisdiction, but sometimes references to indirect jurisdiction will be made as well4. Rules on jurisdiction are based, like any other legal rule, on a balance of interests and values5, and they must comply with higher-ranking law, such as human rights guarantees under EU law or constitutional law. Jurisdictional rules involve primarily the interests of the parties of a judicial proceeding, i.e. claimant(s) and defendant(s), to a more limited degree also third parties, but also public interests. If one or several parties have a close link with a country outside the forum processus, this may influence the procedural interests of such parties as well as the balancing process. Also, such foreign links may have an impact on the balancing of values and on the interpretation of higher-ranking legal provisions. EU law typically distinguishes between “inner-EU” relations and “external” relations (with third countries or international organizations). Consequentially, EU law often (though not always) draws a distinction between persons established6 in the EU or in third countries7. The following considerations will start with a short analysis of the status quo of the jurisdictional rules of EU civil procedure law with particular

3 This article is limited to international jurisdiction in the strict sense, i.e. distribution of jurisdiction between different countries. It does not address, in particular, territorial jurisdiction (venue), i.e. the distribution of jurisdiction within one country between different courts of one court system. 4 Indirect jurisdiction is covered specifically in the contribution of Dieter Martiny (in this book), at pp. 127 et seq. 5 A typical value is, e.g. the basic idea that judicial proceedings in the EU should be “fair”. This value finds its expression in numerous legal provisions on various levels. A related value is that proceedings should be “efficient“, cf. the work undertaken by the Council of Europe’s European Commission for the Efficiency of Justice (CEPEJ), https://www.coe.int/en/web/cepej (last access at: 01.12.2020). 6 The term “established” is used here in a non-technical sense; the Brussels Ia Regulation uses here mainly the term “domicile”, see e.g. Art. 4–6 and Art. 62–63 of the Regulation. 7 The criterion of citizenship (nationality) is less often used in the context of EU civil procedure law.

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reference to their relevance for third countries. Thereafter, the focus will be on possible steps in the future.

A. Present status of jurisdictional rules under EU civil procedure law including reference to third countries The Brussels Ia Regulation – the centerpiece of EU cross-border civil procedure law8 – distinguishes between four kinds of jurisdiction: general competence (Art. 4–6), special competences (Art. 7–8), protective competences (Art. 10–23), exclusive competences (Art. 24) and competence based on a prorogation agreement (Art. 25–26)9. The basic approach of the Brussels Regulation system as to the relation between jurisdiction and recognition of judgments is that rules of direct (international) jurisdiction are by and large unified within the EU, which opens the way to a very liberal regime of mutual recognition and enforcement of judgments between EU countries without (in principle10) any scrutiny of indirect jurisdiction in the recognition stage. While national legislation on jurisdiction in cross-border civil procedure defines the necessary jurisdictional link only for the respective country itself (and does not, in principle, distinguish between different categories of other countries)11, the Brussels Ia Regulation differentiates between the country of the proceeding (forum processus), other EU countries and third countries. Basically, jurisdiction is determined by the Regulation for the forum processus, but most of the jurisdictional rules (with the exception of exclusive competences under Art. 24 and prorogation under Art. 25 et seq.12), are different for defendants established within the EU or in a

8 In order to limit the scope of research, the present contribution will not deal with other EU legal instruments, such as the Brussels IIa/b Regulation (certain family matters), the Rome IV Regulation (inheritance), the EU Insolvency Regulation etc. 9 In Articles 29–34, the Brussels Ia Regulation deals in the context of jurisdiction also with the topic of lis pendens and related proceedings. This topic is dealt with in detail by Luboš Tichý (in this book), at pp. 95 et seq. 10 An exception is made for exclusive competences and some constellations of exclusive competences, see Art. 45 para. 1 (e). 11 This may, however, be different in particular situations, e.g. within the framework of an international treaty. 12 Formerly, the provision on prorogation (Art. 23 of the Brussels I Regulation of 22 December 2000) also distinguished according to the place of establishment (domicile) of the parties.

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third country. This evidently creates a question of discrimination13, but also of „values“ and „balancing of interests“. Is it, for example, „fair“ to a defendant established in a third country, to have to appear in courts of some EU country, which would not have jurisdiction to decide the dispute if the defendant were established in another EU country? Or, on the other side, is it fair to deny a claimant to use some jurisdictional rule (e.g. the forum delicti under Art. 7 no. 2 of the Brussels Ia Regulation) if the defendant is established in a third country, while the claimant (independently from its place of establishment/domicile) can use this jurisdictional rule if the defendant is established in the EU? One can also pose these questions under the perspective of procedural efficiency. If, for example, a rule of specific competence is grounded to a significant extent on considerations of procedural efficiency (e.g. typical local availability of evidence)14, would it then not be reasonable to make this forum also available for proceedings against defendants established in third countries?

B. What could or should be changed? In recent years, the European Union has started to constantly monitor and evaluate the functioning of many of its legislative acts. The Rome Ia Regulation contains in its Art. 79 a reporting provision, which even sets as a specific task to scrutinize (by 11 January 2022) whether the jurisdiction rules of the Regulation should be widened to include defendants domiciled in third countries15.

13 This aspect has been addressed, among other, e.g. in Hess, Pfeiffer and Schlosser, The Brussels I Regulation 44/2001. The Heidelberg Report on the Application of Regulation Brussels I in 25 Member States (Study JLS/C4/2005/03) (2008), 75 et seq., accessible on the Internet at http://citeseerx.ist.psu.edu/viewdoc/download?d oi=10.1.1.193.7688&rep=rep1&type=pdf (last access at: 01.12.2020); see also also Kramer, Ontanu and de Rooij, The application of Brussels I (Recast) in the legal practice of EU Member States, Synthesis Report, https://www.asser.nl/media/5018 /m-5797-ec-justice-the-application-of-brussels-1-09-outputs-synthesis-report.pdf (last access at: 01.12.2020), 9 et seq. and 18 et seq. 14 This is often said to be true for the forum delicti, but also for the forum contractus or for the forum of an agency etc., cf. e.g, Gottwald in: MüKo-ZPO, Vol. 3 (2017), Brüssel Ia VO, Art. 7 mn 45. 15 The provision shows that the Commission’s original proposal for the recast Brussels I Regulation of 14.12.2010, see https://eur-lex.europa.eu/LexUriServ/LexUriSe rv.do?uri=COM:2010:0748:FIN:EN:PDF (last access at: 01.12.2020), which had

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Trying to structure legislative steps, which might be undertaken for a further development of the EU’s jurisdiction rules taking account third country dimensions, it is certainly reasonable to take the Brussels Ia Regulation as a starting-point. However, for a well-based and effective solution, the Brussels Ia Regulation must be seen in conjunction with other EU legislation including international treaties and, if the case may, even soft law instruments. Further, it seems necessary to take into account also the views and legislative approaches of third countries, which may be affected by any changes of EU rules in this respect. Of particular relevance are countries, with which the EU has particularly close political or socio-economic relations, even if it is also instructive to have a look at some other, more loosely-related countries, in particular if they have legislative experience on this subject which may be seen as innovative.

I. Amendments of EU civil procedure legislation The focus with regard to amendments of EU civil procedure legislation should first be on the Brussels Ia Regulation as the center-piece of EU legislation in cross-border civil procedure. Here all rules of the Regulation on (direct) jurisdiction 16 must be scrutinized – general jurisdiction, special jurisdiction, protective jurisdiction, exclusive jurisdiction and choice of forum agreements. The limited length of this contribution does not permit a detailed analysis of jurisdictional provisions of the Regulation, but the following general considerations will be illustrated by examples.

1. Brussels Ia Regulation a) General jurisdiction The basic approach of the Brussels Ia Regulation as to general jurisdiction (competence) is the choice of the defendant’s domicile as the connecting factor. On a second level, a distinction is made between domicile in the

provided for a general regime of jurisdiction even as to defendants domiciled in third countries, remains on the legislative table. 16 One could also discuss the relevance of the jurisdiction rules under the perspective of the objective sphere of application of the Regulation (with regard to third countries).

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EU17 and domicile in a third country. If the defendant’s domicile is in the EU, this establishes the general competence of the courts. If the defendant’s domicile is outside the EU, national (domestic) rules of international jurisdiction of the EU Member States apply (Art. 6 of the Regulation: with some exceptions). This means that with regard to defendants established in third countries, member states are free to use competences, which are similar or even identical to the provisions of the Regulation, but they may also use weak-link jurisdictional ground, e.g. the citizenship of the claimant or (any) property of the defendant, which is situated in the forum country. Although the use of such weak-link competences is not uncommon in the international sphere, it may seem unwelcome or even unjust for some third countries, in particular when they closely cooperate with the EU in other fields. In addition, it needs to be mentioned that the concept of „domicile“ is no longer as generally accepted internationally as a basis of jurisdiction as it used to be in the past. In particular, in the field of family relations and inheritance it has been replaced by the more factual concept of „habitual residence“. In the longer term, the Brussels Ia Regulation might switch over to the residence concept as well (with particular considerations for legal entities), but this is probably not a topic for today. More questionable, perhaps, from the perspective of third countries, is the extensive definition of corporate (and other legal entities‘) domicile in Art. 63 of the Regulation. The Regulation sees the corporate domicile in the EU, if the legal entity has either its registered seat or its main administration or its main establishment in the EU. This means that corporations, which may have an equally important corporate link (e.g. registered seat) in a third country, are nevertheless covered by general jurisdiction in the EU. This may also not always seem just to third countries.

b) Specific jurisdiction The provisions of the Regulation on specific jurisdiction (Art. 7 and 8), e.g. the forum delicti or the forum contractus) apply only if the defendant has his or her domicile in the EU. The function of these competences is to ground competence on a serious link of the dispute (sometimes also of the parties) with the forum processus. This balances the interests of the claimant and of the defendant. The claimant does not have at his or her disposal only the

17 Particular rules apply to defendants with domicile in Denmark.

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defendant’s domicile, but also other fora, which are also acceptable to the defendant. In contrast, claimants may not use these competences for lawsuits against defendants established in third countries. They may be „compensated“ by national (domestic) rules of competence, but these may not be acceptable to third countries and hinder recognition of such judgments outside the EU18.

c) Protective jurisdiction Protective jurisdiction19 is a specific type of competence developed by the EU for civil or commercial disputes involving a typically strong party on one side of the proceeding and a typically weaker party on the other. The EU legislator sees such situations in disputes between entrepreneurs and consumers, insurers and insured persons, employers and employees. Protective jurisdiction under the Brussels Ia Regulation has an intermediate position between specific jurisdiction and exclusive jurisdiction. It grants the weaker party specific jurisdiction at a forum convenient to this party (and also acceptable to the stronger party) and it protects the weaker party from “negative” choice forum agreements as well as from recognition/ enforcement of judgments rendered in a forum not accepted under the provisions of the protective competence(s) rule. Somewhat similar to the provisions of the Regulation on specific competences (but with significant modifications), the provisions on protective jurisdiction apply in principle only if the defendant (weaker or stronger party) has his or her domicile in the EU. However, with a view to a protection of the weaker party, the notion of domicile of the stronger party is extended for the purposes of protective jurisdiction and includes any (broadly understood) branch or other secondary establishment (see, e.g. Art. 17 para. 2 of the Regulation). This means that in such situation the weaker party, e.g. the consumer, may sue the other side either at his (the consumer’s) domicile or at the forum of branch/secondary establishment of the stronger side. If the stronger side does not have his domicile (including branch) in the EU, he or she can nevertheless be sued in the EU by a consumer domiciled in the EU (in the

18 Inside the EU such judgments are recognized, as they are not excluded under Art. 45 para. 1 e of the Regulation. 19 This term is used here to describe the specifics of the respective provisions in the Brussels Ia Regulation, which combine elements of specific and exclusive jurisdiction mainly for the purpose of giving special protection to some persons (consumers, employees etc.).

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place of the consumer’s domicile) if the consumer-related contract has a specified link with the EU. These very complicated provisions purport to guarantee the weaker party a forum in the EU, if the contractual relationship has some relation with the EU and the weaker party is domiciled in the EU. The consequence is that EU consumer protection law applies (indirectly, through the establishment of an EU direct jurisdiction), even if the typically stronger party is domiciled in a third country with a different level of consumer protection and has only rather limited business contacts with the EU. In particular, from the perspective of countries with a strong economy and a deliberately weaker level of consumer protection than in the EU this may cause concerns20.

d) Exclusive jurisdiction In comparison with the rules on protective jurisdiction, the provisions of the Brussels Ia Regulation on exclusive jurisdiction and their impact on third countries seem in general rather straightforward. The exclusive jurisdiction rules apply independently from the place of domicile of a party, i.e. also to parties domiciled in a third country. The cases of exclusive jurisdiction under the Regulation are limited in number and more or less correspond to international standards (e.g. forum rei sitae for rights in immovables situated in the EU, forum sedis corporationis for certain internal company disputes etc.). It cannot be denied, however, that some cases of exclusive jurisdiction may cause concern on the side of third countries, e.g. disputes relating to leases of immovables or corporate disputes relating to companies with main establishment or other main focus outside the EU

e) Choice of forum (prorogation) agreements The last category of jurisdiction under the Brussels Ia Regulation are (exclusive or non-exclusive) choice of forum agreements (Art. 2521). Although the provision now applies in principle independently from the domicile(s)

20 The situation is somewhat similar to disputes under the EU General Data Protection Regulation (see infra at footnote 23). See also interests of other countries, e.g. offshore jurisdictions, emerging economies etc. 21 The following Art. 26 of the Regulation deals with consent to jurisdiction.

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of the parties, it has kept a reference to the law of the EU Member State chosen by the parties as forum, as a possible limitation to the validity of the clause. The provision of Article 25 applies by its wording only to agreements in favor of a forum within the EU. Whether it covers also the derogatory effect of clauses in favor of a forum outside the EU, is not clearly regulated. Art. 25 has no direct impact on third countries. Agreements under Art. 25 are not necessarily „recognized“ in third countries. The EU might have an interest to receive the recognition of agreements under Art. 25 by such countries, which tend to be chosen by parties as fora on a regular basis (e.g. the UK or the U.S.22). This would help to reduce risks of competing proceedings in the EU and outside. On the other side, third countries may have an interest in recognition of „their“ clauses by the EU or in the availability of a common clause.

2. Other EU legislation Provisions on jurisdiction are contained in various other legislative acts of the EU, e.g. in the Brussels IIa Regulation, the EU Maintenance Regulation, the Rome IV Regulation, the EU Insolvency Regulation, Art. 79 para. 2 of the General Data Protection Regulation23 and others. In principle, they raise the same sort of questions as the Brussels Ia Regulation, but the content of agreed or coordinated solutions with third countries depends on the specifics of each subject matter.

II. Conclusion of treaties with third country/countries Amendments to the Brussels Ia Regulation or other EU legislation alone are not sufficient to ensure a more effective cross-border civil litigation management. That often requires some cooperation with non-EU countries and may also include the topic of coordination or distribution of international jurisdiction. The classical legal tool for cooperation with other countries is an international treaty.

22 As to Switzerland, this is already guaranteed by the Lugano Convention. 23 Alternative exclusive competence of the forum of the “establishment” of a data controller or processor or at the habitual residence of the “data subject”.

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As the European Court of Justice has stated on several occasions24, the EU now disposes of an exclusive competence in the field of international civil procedure (i.e. mainly jurisdiction and recognition of judgments in civil and commercial matters). Presently, the EU has concluded one broad treaty in the field of international civil procedure, the Lugano Convention (recast) of 30 October 200725 on jurisdiction and enforcement of judgments in civil and commercial matters, members of which are presently the EU (plus Denmark), Iceland, Norway and Switzerland. The basic approach of the Lugano Convention is to extend the rules of the Brussels Ia Regulation to Iceland, Norway and Switzerland as Member States of the European Free Trade Association („parallel convention“). As to jurisdiction this means, in particular, that defendants domiciled in all Member States of the Lugano Convention are guaranteed general jurisdiction at their domicile and that the rules on specific and protective jurisdiction refer to all Member States of the Convention in the same way. Furthermore, the Convention provides for a complicated system of uniform interpretation, which gives some relevance to CJEU jurisprudence also for the nonEU Member States of the Convention. A similar, though much shorter agreement has been concluded between the EU and Denmark on 19 October 200526, which was amended by an additional agreement of (apparently) 10 July 201527. The core of this agreement consists in a general clause extending – with some exceptions – the provisions of the Brussels Ia Regulation to relations between the EU and its Member State Denmark28.

24 For example in the opinion 1/03 of 7 February 2006 on the recast Lugano Convention, https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62003C V0001:EN:HTML (last access at: 01.12.2020). 25 Accessible at https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A220 07A1221%2803%29 (last access at: 01.12.2020). 26 Official Journal L 299, 16/11/2005 P. 0062 – 0067. 27 OJ L 182, 10.7.2015, p. 1–1. The date of conclusion of this agreement is not communicated in the Official Journal (only the date of the OJ). A similar agreement was concluded in 2013 as to maintenance obligations, see https://eur-lex.europa.e u/LexUriServ/LexUriServ.do?uri=OJ:L:2013:195:0001:0001:EN:PDF (last access at: 01.12.2020). 28 Denmark, though a member of the EU, enjoys a special status within the EU, not participating (among others) in the EU’s policy of judicial cooperation. The above-mentioned agreements overcome this exception in a limited approach on the basis of an international treaty.

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It could be imagined that a similar agreement might be concluded between the EU and the UK in the future, or alternatively, that the UK accedes to the Lugano Convention29. The (nearly) only case so far30 of a multilateral treaty dealing specifically with international civil procedure, in which the EU is a party, is the Hague Convention of 30 June 2005 on Choice of Court Agreements31. Other parties to this Convention are presently Denmark32, Mexico, Montenegro and Singapore. Signatures have also made by China, North Macedonia, Ukraine and the United States. The Hague Judgments Convention of 2 July 2019, which has not yet entered into force and has so far only be signed by Uruguay and Ukraine33, does not deal with direct jurisdiction. However, its catalogue of indirect competences (Art. 5 and 6 of the Convention) may have an inspiring function for eventual future treaties between the EU and third countries, which will not be based on an extension of the rules of the Brussels Ia Regulation. Apart from broad treaties on jurisdiction and recognition of judgments, the EU is a Member of some international treaties on specific substantive topics, which also include provisions on jurisdiction and/or recognition of judgments. One example is the Montreal Convention for the Unification of Certain Rules for International Carriage by Air of 28 May 199934, which contains in its Articles 33 and 46 a rather complicated alternative list of exclusive competences (domicile or place of business of carrier, „principal

29 Cf. Rühl, ‘Judicial cooperation in civil and commercial matters after Brexit: Which way forward?’, Cambridge University Press (2018), 99–128, DOI: https://doi. org/10.1017/S0020589317000574 (last access at: 01.12.2020). 30 With the exception of the Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance of 23 November 2007, the scope of which is outside this contribution. 31 Accessible e.g. at https://www.hcch.net/en/instruments/conventions/full-text/?cid= 98 (last access at: 01.12.2020). The EU has acceded to this Convention on 11 June 2015, see https://www.hcch.net/en/instruments/conventions/status-table/notificati ons/?csid=1044&disp=resdn (last access at: 01.12.2020). In the context of Brexit, the UK has declared its accession to this Convention on 1 April 2019, but has withdrawn its accession on 31 January 2020 in view of the transition period of the Withdrawal Agreement (with the EU) of 17 October 2019, see https://www.hcch. net/en/instruments/conventions/status-table/notifications/?csid=1318&disp=resdn (last access at: 01.12.2020). 32 Specific status as EU Member State, supra fn. 28. 33 See https://www.hcch.net/en/instruments/conventions/status-table/?cid=137 (last access at: 01.12.2020). 34 Accessible e.g. at https://www.iata.org/contentassets/fb1137ff561a4819a2d38f3db7 308758/mc99-full-text.pdf (last access at: 01.12.2020).

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and permanent“ place of residence of passenger et al.) for transport-related actions for damages. The Convention applies to presently 136 Contracting States, among them e.g. China, Russia and the United States. Another treaty alternative would be the conclusion (or amendment) of treaties between individual EU Member States and third countries. Various EU Member States have concluded bilateral or multilateral treaties dealing with international civil procedure, sometimes including direct jurisdiction35. Particular mention should be made of the bilateral „judicial assistance treaties“ between (mostly) EU Member States in Central and Eastern Europe and several countries in the post-Soviet region, e.g. Russia and Ukraine. These treaties typically provide for a rather short, little differentiated list of direct competences36. The future fate of these treaties is open. In principle, they continue to apply even though the EU has in the meantime acquired an exclusive treaty-making competence in this field. On the other hand, individual EU Member States do no longer have the competence to conclude new treaties of this kind or even amend existing treaties. As this may sometime cause hardship, the EU has, however passed in 2009 a Regulation „establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries concerning jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters …“37. Under this Regulation, the Commission may authorize individual Member States to conclude or amend treaties with

35 As to this topic, cf. the contribution of Elina Moustaira (in this book) at pp. 29 et seq. See also older treaties developed by the Hague Conference on Private International Law (before regional organizations such as the EU could become members of the Hague Conference). 36 See, e.g. Norros, Judicial Cooperation in Civil Matters with Russia and Methods of Evaluation (2010), https://www.researchgate.net/publication/47745827_Judicial_C ooperation_in_Civil_Matters_with_Russia_and_Methods_of_Evaluation (last access at: 01.12.2020), Jöks, ‘Some Problems of International Judicial Assistance from an Estonian Perspective’ (1999) IV Juridica International, https://www.juridic ainternational.eu/public/pdf/ji_1999_1_80.pdf (last access at: 01.12.2020). A similar approach exists in some multilateral agreements in the Eurasian region, e.g. the Kiev, Minsk and Chisinau Agreements. Similar multilateral agreements exist also in other parts of the world and deserve consideration, in particular in case of eventual negotiation with countries from such regions (Latin America, East Asia, etc.), cf. e.g. Reyes, Recognition and Enforcement of Judgments in Civil and Commercial Matters (2019), passim. 37 Accessible at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32009R06 64 (last access at: 01.12.2020). As to private international law there is a similar Regulation of 13 July 2009, see https://eur-lex.europa.eu/legal-content/EN/TXT/?u ri=celex:32009R0662 (last access at: 01.12.2020).

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third countries in the field of civil procedure, but only in family matters. De lege ferenda it could be envisaged to open a similar possibility also to treaties in the field of civil and commercial matters in general. As under the Regulation of 2009, the authorization could be accompanied by negotiation guidelines of the Commission.

III. Use of soft law? Little explored, so far, is the use of soft law as an instrument of improving judicial cooperation or coordination with third countries, including the issue of direct jurisprudence. The ALI-Unidroit Principles of Transnational Civil Procedure of 200438, which have been developed mainly with a view of bridging differences in the approach of Common Law jurisdictions (in particular the U.S.) and the Civil Law world, might be a suitable basis for negotiation between the EU and Common Law countries, but their use is probably limited due to their rather general and selective character. The EU will probably give greater weight to the soon to be passed ELIUnidroit Model European Rules of Civil Procedure39, but the drafters of the Rules decided not to deal with matters of jurisdiction, leaving this issue to the respective EU Regulations, in particular the Brussels Ia Regulation40.

IV. Coordinated amendments of EU law and national law Finally, improvement of judicial cooperation between the EU and third countries can also be accomplished by coordinated amendments of EU law and national law, both in EU Member states and in non-EU countries. For example, if a country, with which the EU has concluded an association agreement with a view to close cooperation, approximates (even partially)

38 See https://www.unidroit.org/instruments/transnational-civil-procedure (last access at: 01.12.2020). 39 See https://www.unidroit.org/work-in-progress-eli-unidroit-european-rules (last access at: 01.12.2020). On the relevance of these Principles for third countries see Nazar Panych (in this book), infra at pp. 255 et seq. 40 See Final Draft MERCP, Preamble, at VII.2. Only in the context of provisional and protective measures, Rule 202 addresses international jurisdiction (annex jurisdiction of courts competent for the main proceeding or jurisdiction based on “a real connecting link”).

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its rules on jurisdiction to EU standards (Brussels Ia Regulation or even soft law standards), this could contribute to a trustworthy legal setting, which could open the way to a more general regulation of judicial cooperation between the EU and such a country. The third country will presumably take such an approach only if it is convinced that the respective legal amendments are justified by their contents, but there will probably also be the additional argument that by such reforms judicial and general cooperation with the EU will be strengthened. The European Union and EU Member States could answer to this by amending their own procedural legislation with a „positive“ reaction to the procedural reforms undertaken by the non-EU partner country. For example, the EU might pass legislation on recognition of judgments of third countries, if the respective country has approximated its own rules on direct jurisdiction to EU standards (and fulfils other EU procedural standards or expectations). This could be done independently of the Hague Judgments Convention, which may or not apply in relation to specific countries.

C. Summary and recommendations The foregoing short analysis has shown that the EU has realized the topicality of third country relations in the context of international civil procedure and has taken this issue, with particular reference to matters of jurisdiction, into its work schedule for a future revision of the Brussels Ia Regulation. On the other hand, a revision of the Brussels Ia Regulation can only be a partial solution, as matters of the EU‘s „external relations“ need to be addressed in a dialogue with the respective non-EU counterparts. This involves additional legal instruments such as, for example, international treaties or the use of internationally agreed soft law. The analysis has also shown that particular attention should be given in this context to a limitation of „exorbitant“ national competences in the case of defendants established in (at least some) third countries. This will probably necessitate some limitation of the residuary competences of the legislators of EU Member states with regard to direct international jurisdiction. Alternatively, a harmonization of national legislation e.g. by way of coordinated amendments of procedural laws could be preferred. Particular attention also deserve the rules of the Brussels Ia Regulation with regard to special and protective regulation, which should be reformulated, on the one hand, to open the balanced approach of such competences also in cases of defendants established in third countries and limit, on the other, the parochial aspects of such competences in the case of lawsuits against such defen50

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dants. Ideally, a similar balance should be established also in countries with which the EU cooperates in a continuous and intensive manner.

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Residual Jurisdiction: Back to the Future?* Michael Stürner and Friederike Pförtner, Konstanz

Abstract In the European judicial area, Member States retain residual jurisdiction only for very few categories of cases. Mostly, the pertinent jurisdictional provisions are fairly large in scope. This paper sheds light on the underlying interests, paying particular attention to the so-called human rights litigation. It argues against special jurisdictional provisions for such cases. In a future revision of the Brussels system, the preferable approach would be to extend the scope of application of the Brussels Regulation to third-State defendants and insert a general, but reasonably precise, provision on forum necessitatis.

Keywords Residual jurisdiction – Brussels regulation – third-State defendants – human rights litigation.

A. Introduction In an integrated area of justice like the EU, residual jurisdiction of the Member States may not be pertinent in all that many cases. Basically, the autonomous jurisdiction regime of the Member States comes into play only if the defendant is domiciled outside the EU (Art. 6 para. 1 Brussels Ia Regulation). However, there may be an interest of a State to open the forum for third State defendants even though such claims may have little or no relation to the territory of the forum state. At the outset, public international law neither requires, nor prohibits, that a State exercise jurisdiction in cross-border cases. It is not uncommon that States maintain what is

* An earlier version of this article has been published in Zeitschrift für das Privatrecht der Europäischen Union (GPR) 2019, 222–229.

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called long-arm jurisdiction, or indeed, even universal jurisdiction. However, a violation of national sovereignty could be said to occur in cases where there is no substantial connection of the facts of the case to the forum state. The principle of international comity operates as a rather soft limit. Pertinent case law of the International Court of Justice does not reveal much more than that a case is supposed to have a genuine link with the forum state.1 As it is hard to set a limit on the degree of intensity to which such a connection can be called genuine, one could argue that a genuine link may be said to exist where overarching interests of justice require that a State’s courts may be seized. Such cases may be rare, but the symbolic value of exceptional fora remains high. In fact, the proposal for a recast of the Brussels I Regulation, which aimed to do away with all residual jurisdictional powers of the Member States, contained a section on subsidiary jurisdiction and forum necessitatis. As the general enlargement of scope towards third States was dropped in the reform process, that section did not make it to the final version of the Recast Regulation. However, the issue has to be addressed again in the context of the global quest for suitable venues for private actions for violations of human rights. As the US Alien Tort Statute, in the past decades the prime jurisdictional provision for such litigation, seems to have lost much of its significance due to the restrictive interpretation of the US Supreme Court in the landmark cases of Kiobel v. Royal Dutch Petroleum and, more recently, Jesner v. Arab Bank, alternative fora are receiving more attention. Recently, the Institute of International Law has issued a Resolution on “Universal Civil Jurisdiction with regard to Reparation for International Crimes”, promoting access to courts for victims of human rights violations under certain preconditions. This paper will discuss under what circumstances such types of subsidiary jurisdiction could exist in the Member States’ laws, and whether they would indeed be desirable for a future revision of the Brussels Ia Regulation.

B. Residual jurisdiction under the Brussels Ia Regulation As clearly stated in its Recital No. 16, the Brussels Ia Regulation follows the principle of substantial connection, the main connecting factor being

1 I.C.J. Rep. 1955, 06.04.1955, Liechtenstein v. Guatemala, I.C.J. Rep 1955, p. 4; cf. on the principle Bertele, Souveränität und Verfahrensrecht (1998), 200 et seq.

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the domicile of the defendant. Its core goal is to coordinate jurisdictional power in an integrated area of justice.2 Therefore, within the scope of application of the Regulation, exorbitant jurisdictional provisions in the Member States’ laws are explicitly prohibited under Art. 5 para. 2 Brussels Ia Regulation. In principle, defendants domiciled outside the integrated area of justice are not covered so that Member States’ residual jurisdiction comes into play. However, pursuant to Art. 6 para. 1 of the Regulation, exceptions apply to certain groups of cases, namely claims of consumers against businesses, claims of workers against their employers, claims against insurance companies, and cases where exclusive jurisdiction applies (Art. 24 Brussels Ia Regulation). Moreover, the parties may agree on a forum selection clause under Art. 25 Brussels Ia Regulation even though both parties are domiciled outside the EU.3 As opposed to many other EU Regulations,4 the Brussels Ia Regulation does not contain any general rule on forum necessitatis. In the proposal for a recast of the Brussels I Regulation the EU Commission had suggested the extension of the jurisdiction rules to third State defendants. The proposal also contained rules on subsidiary jurisdiction and forum necessitatis. They were meant to compensate the removal of the existing national rules on residual jurisdiction. Subsidiary jurisdiction was to be exercised vis-à-vis third State defendants by courts of any Member State where property belonging to the defendant is located, provided that (1) the value of the property is not disproportionate to the value of the claim and (2) the dispute has a sufficient connection with the Member State of the court seized. A forum necessitatis should exist where a fair trial would not be possible in the courts of a third country to which the dispute is more closely connected. 5

2 Hau, ‘Grundlagen der internationalen Notzuständigkeit im Europäischen Zivilverfahrensrecht’ in Geimer and Schütze (eds), Festschrift für Athanassios Kaissis zum 65. Geburtstag (2012), 355. 3 On those see e.g. Stürner, ‘Gerichtsstands- und Erfüllungsortvereinbarungen im europäischen Zivilprozessrecht’ (2013), 6 Zeitschrift für das Privatrecht der Europäischen Union, 305. 4 Regulation (EC), No 4/2009, Art. 7; Regulation (EU), No 2016/1103, Art. 11; Regulation (EU), 2016/1104, Art. 11; Regulation (EU), No 650/2012, Art. 11. 5 On those rules Ereciński and Weitz, 'Internationale Notzuständigkeit im polnischen Internationalen und Europäischen Zivilverfahrensrecht', in Geimer and Schütze (eds), Festschrift für Athanassios Kaissis zum 65. Geburtstag (2012), 195 et seq; Hau, ‘Grundlagen der internationalen Notzuständigkeit im Europäischen Zivilverfahrensrecht’ in Geimer and Schütze (eds), Festschrift für Athanassios Kaissis zum 65. Geburtstag (2012), 358 et seq.; Weber, ‘Universal Jurisdiction and Third States in the Reform of the Brussels I Regulation’ (2011), 75 RabelsZ, 619, 623 et seq.

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If those jurisdictional provisions did not find their way into the final version of the Regulation, it was maybe not so much because the substantive outreach of those rules was considered to be too great,6 but because Member States did not accept the extension of the scope of application of the Regulation to third State defendants.7 Consequently, the Brussels Ia Regulation leaves the power to set up rules on jurisdiction for third State disputes to the Member States.8

C. Types of exorbitant jurisdiction For that reason, residual jurisdiction still plays a considerable role. Most of the instances, where there is a substantial connection of the facts of the case to the forum, will fall within the scope of application of the Brussels Ia Regulation. Consequently, jurisdictional provisions in the Member States’ laws will mostly cover situations where there is only a relatively loose connection to the forum, making the jurisdiction exorbitant. Broadly speaking one can distinguish three different policy goals: (I.) protecting local claimants; (II.) providing access to justice for non-local claimants, and (III.) protecting overriding substantive law principles.

I. Protecting local claimants Typically, exorbitant jurisdiction is exercised to protect local claimants from the perils of having to sue a third-State defendant abroad. Sometimes this policy goal is openly addressed, like in France, where Art. 14 Code civil basically grants every French citizen the right to sue in French courts.

6 In an amicus curiae brief concerning the Kiobel case, the EU Commission made clear that although international jurisdiction of US-American courts for ATS claims is conceivable, nevertheless a substantive link to the US territory is required, see amicus curiae brief of the European Commission on behalf of the European Union as amicus curiae in support of neither party of June 13th 2012, pp. 26 et seq. Apparently this legal opinion has to be understood against the background of Art. 26 of the Commission’s proposal of the Brussel I recast (COM[2010] 748 final) which calls for an unspecified substantive territorial link. 7 Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016), 80 RabelsZ, 804 et seq.; Domej, ‘Die Neufassung der EuGVVO’ (2014), 78 RabelsZ, 521 et seq. 8 Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016), 80 RabelsZ, 809.

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Mostly, however, nationality does not serve as a connecting factor. The protection of local claimants could come under the guise of the location of property. Under German law, § 23 German Civil Procedure Code (ZPO) establishes international jurisdiction of German courts for actions brought against non-resident persons at the location of their assets. The provision is regarded as exorbitant under Art. 5 para. 2 Brussels Ia Regulation, thus it only applies outside the scope of application of that Regulation.9 First, the notion of assets has to be defined. This can be any tangible or intangible good, or a claim, so a bank account held by the defendant at a German bank would suffice. However, even though the wording of § 23 ZPO does not say so explicitly, it is interpreted as requiring a reasonable relation to the value of the claim for which the jurisdiction is being involved.10 Consequently, a multi-million Euro claim could not be brought under § 23 ZPO if the value of the assets located in Germany was only 1000 Euro. By the same token, very petty assets do not pass the threshold at all. More generally, German courts will be reluctant to give too great a scope of application to exorbitant rules of jurisdiction. According to the case law of the Federal Court of Justice,11 in order to narrow down the scope of application of § 23 ZPO, there must be some (additional) connection of the case to Germany.12 Such a link could result from the German nationality or from the residence of the claimant but also from a close proximity of the available evidence to the forum state as may be the case when the origin of the dispute arose in Germany. 13 As the Federal Court of Justice put it, “the genesis of § 23 ZPO being focused on the creation of a subsidiary jurisdiction for local claimants as well as the practice in international treaties being more and more influenced by an exclusion or restriction of the jurisdiction of assets suggests or even commands a restrictive interpretation of the rule”.14 Although this understanding has sometimes

9 See, for example, BGH, 12.06.2007 – XI ZR 290/06, RIW 2007, 873 (claimant resident in Germany brings an action against a US based defendant: §§ 23 and 31 ZPO were applied but the conditions were not met in the material case). 10 BGH, 22.09.2005 – IX ZR 1/05, BGH-Report 2005, 1611; OLG Frankfurt, 20.04.2011 13 O 111/10, ZIP 2012, 293, 294 et seq. 11 BGH, 02.06.1991 – XI ZR 106/90, BGHZ 115, 90, 94 et seq.; BGH, 22.10.1996 – XI ZR 261/95, NJW 1997, 324. 12 Commonly called Inlandsbezug. 13 BGH, 24.04.1996 – IV ZR 263/95, NJW 1996, 2096; BGH, 13.12.2012 – III ZR 282/11, NJW 2013, 386, 387. 14 BGH, 02.06.1991 – XI ZR 106/90, BGHZ 115, 90.

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been criticized, mainly on the grounds of a lack of legal certainty, German courts and commentators alike have mostly defended it until today.15

II. Providing access to justice for non-local claimants Most States grant some access to justice for those claimants who do not dispose of such fundamental rights elsewhere. For example, in France, pertinent case law opens up a forum necessitatis. In the Netherlands, a statutory rule with that intention was introduced, while at the same time exorbitant jurisdiction based on the domicile of the plaintiff in the forum was abolished.16 This is reflected by the Brussels I recast proposal, already mentioned, which also contained a forum necessitatis. Provisions of that kind need to have an open, flexible wording, but must at the same time prevent unwelcome litigation. Swiss law for instance has found the following explicit rule on “Emergency Jurisdiction”17 in Art. 3 of the Act on Private International Law of 1987: “If this Code does not provide for jurisdiction in Switzerland and if proceedings abroad are impossible or unreasonably difficult, jurisdiction shall lie with the Swiss judicial or administrative author-

15 See e.g. Heinrich, ‘§ 23 ZPO – Besonderer Gerichtsstand des Vermögens und des Gegenstands’ in: Musielak and Voit, ZPO (17th edn, 2020), § 23 para. 3; Roth in: Stein and Jonas, ZPO Vol. 1 (23rd edn, 2014), § 23 para. 10 et seq.; Pfeiffer, ‘Falscher vorauseilender Gehorsam in eine richtige Richtung – Zur Lugano-freundlichen Auslegung des autonomen österreichischen Zuständigkeitsrechts durch den OGH’ (1996), IPRax, 205 (209); Schack, ‘Anmerkung zu BGH 2.7.1991 – XI ZR 206/90 – zum Vermögensgerichtsstand’ (1992), JZ, 54; Schack, ‘Internationale Zuständigkeit und Inlandsbeziehung’, in Heldrich and Uchida (eds), Festschrift für Hideo Nakamura zum 70. Geburtstag (1996), 491 (496); contra Vollkommer in: Zöller, ZPO, 23rd edn (2013), § 23 para. 1 (now differently: Schultzky in: Zöller, ZPO, 33rd edn (2020), § 23 ZPO para. 1). 16 Overview of forum necessitatis in EU Member States: Nuyts, Study on Residual Jurisdiction: Review of the Member States’ Rules concerning the “Residual Jurisdiction” of their courts in Civil and Commercial Matters pursuant to the Brussels I and II Regulations (2007), para. 83 et seq. (table L para. 86); on the contrary, forum necessitatis does not exist e.g. in Italy and England. In Scotland, it does not exist either but there, thanks the doctrine of forum non conveniens, denial of court in foreign jurisdictions may be taken into account, see Nuyts, Study on Residual Jurisdiction: Review of the Member States’ Rules concerning the “Residual Jurisdiction” of their courts in Civil and Commercial Matters pursuant to the Brussels I and II Regulations (2007), table L para. 86 fn. 167. 17 Notzuständigkeit.

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ities at the place with which the facts of the case are sufficiently connected.”18 By contrast, under German law there is no written provision on forum necessitatis.19 However, under customary law, German courts are competent to hear a case where there would otherwise be a denial of justice.20 Such cases are extremely rare.21 One example relates to Maltese divorces. Until 01.10.2011, Maltese substantive law did not allow for a divorce.22 If from the viewpoint of German courts Maltese courts were competent to hear petitions for divorce, as this could be the case with a German-Maltese couple residing in Malta, such jurisdiction of Maltese courts would have been pointless. Consequently, a forum necessitatis may be said to exist in Germany.23 Another example relates to the denial of justice by the courts of the former GDR.24 The international acceptance of such subsidiary fora is reflected by the ALI/UNIDROIT Principles of Transnational Civil Procedure 2004. Art. 2.2 reads: “Jurisdiction may also be exercised, when no other forum is reasonably available, on the basis of: 2.2.1 Presence or nationality of the defendant in the forum state; or 2.2.2 Presence in the forum state of the defen-

18 Translation by the authors. The German version reads: „Sieht dieses Gesetz keine Zuständigkeit in der Schweiz vor und ist ein Verfahren im Ausland nicht möglich oder unzumutbar, so sind die schweizerischen Gerichte oder Behörden am Ort zuständig, mit dem der Sachverhalt einen genügenden Zusammenhang aufweist.“ 19 Cf. Geimer, Internationales Zivilprozessrecht (7th edn, 2015), para. 1024 et seq.; Aden, ‘Internationale Notzuständigkeit’ (2007) 106 ZVglRWiss, 491. 20 Geimer, Internationales Zivilprozessrecht (7th edn, 2015), para. 1024 et seq.; Nagel and Gottwald, Internationales Zivilprozessrecht (8th edn, 2020), para. 3.597; Linke and Hau, Internationales Zivilverfahrensrecht (7th edn, 2018), para. 7.2; Aden, ‘Internationale Notzuständigkeit’ (2007) 106 ZVglRWiss, 490; very farreaching: Neuhaus, ‘Internationales Zivilprozessrecht und Internationales Privatrecht: Eine Skizze’ (1955) 20 RabelsZ, 265 („Wo sonst kein Land zuständig ist, soll jedes Land zuständig sein“ – “Where otherwise no State would be competent, every State should be competent“); the fine tuning is to be made on procedural grounds via a specific interest in bringing proceedings; for criticism on this issue see Schack, Internationales Zivilverfahrensrecht (7th edn, 2017), para. 457. 21 Examples for negative decisions are BGH, 17.01.1995 XI ZR 182/94, juris; BGH, 12.01.1987 – II ZR 203/86, juris. 22 See BGH, 20.02.2013 – XII ZR 8/11, FamRZ 2013, 687, note: Hau, ‘BGH vom 20.02.2013 (internationale Notzuständigkeit für die Ehescheidung in sog. MaltaFällen)’ (2013) FamRZ, 689. 23 For the Netherlands see Hof’s-Gravenhage, NIPR 2006, 145. 24 BGH, 03.12.1975 – IV ZB 20/75, BGHZ 65, 311.

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dant’s property, whether or not the dispute relates to the property, but the court’s authority should be limited to the property or its value.“25 To sum up, in the words of the European Court of Human Rights, “[…] in all the States which do recognize the forum of necessity, it is applied only exceptionally and subject to two cumulative conditions, namely the absence of another forum with jurisdiction, and the existence of a sufficient connection between the case and the State which assumes jurisdiction. With regard to the connecting link, […] the relevant texts do not lay down the criteria to be used, leaving this task to the domestic courts.”26

III. Protecting overriding substantive law principles It seems that a third category of exorbitant jurisdiction can be distinguished: That of a forum necessitatis, which works to enforce overriding substantive law principles on an international level. At the outset, there is nothing special about enforcing policy goals through jurisdictional provisions. One example can be found in Articles 17 and 18 para. 1 Brussels Ia Regulation: The protection of consumer interests is so important to the European Union that a consumer may sue the trader in the place of the consumer’s domicile even though the trader has their seat in a third State. However, the connecting factor, petty as it may be, consists in the trader having directed commercial or professional activity towards the Member State where the consumer is domiciled.27 By contrast, in the cases described below, it is doubtful whether there exists a genuine link in a geographical sense at all.

1. Human rights protection under the Alien Tort Statute For many decades, federal district courts of the U.S. could be seized under the Alien Tort Statute (28 U.S.C. § 1350 – ATS) for violations of human

25 For the background of the provision which is a compromise between European and US-American ways of thinking see R. Stürner, ‘The Principles of Transnational Civil Procedure: An Introduction to Their Basic Conceptions’ (2005) 69 RabelsZ, 217 et seq. 26 Application No. 51357/07, 15.03.2018, Naït-Liman v Switzerland, para. 207. 27 This follows from Art. 17 [1] lit. b Brussels I-Regulation, a rule which has given rise to much controversy, see e.g. Case C-218/12, 17.10.2013, Lokman Emrek v Vlado Sabranovic, ECLI:EU:C:2013:666.

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rights that occurred on foreign territory. The ATS provides original jurisdiction of the district courts “of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States”. It was used as a jurisdictional basis for human rights litigation in the U.S. from 1980 onwards28 until the US Supreme Court significantly reduced the outreach of the ATS in its 2013 decision in Kiobel v. Royal Dutch Petroleum.29 The Supreme Court ruled that the presumption against extraterritoriality applies to the ATS in so-called “foreign-cubed cases”.30 The presumption can only be rebutted where the claims touch and concern the territory of the United States with sufficient force.31 It follows from this decision that the overriding national interest to prosecute torture and other crimes against humanity as such does not suffice to invoke jurisdiction under the ATS.32 In addition to that, there must be some degree of geographical proximity of the case to the US territory. In the recent decision of Jesner v. Arab Bank, the Supreme Court affirmed the stand taken in Kiobel, clarifying an important point, which was left unresolved in the previous decisions: It held that, as a matter of principle, foreign corporations may not be defendants in suits brought under the ATS.33

28 First decision of this kind: Case No. 191, 630 F.2d 876 (2d Cir. 1980), 30.06.1980, Filártiga v. Peña-Irala , Docket 79-6090; see Reynolds and Zimmer, ‘Haften Unternehmen nach dem US-amerikanischen Alien Tort Statute?’ (2012) RIW, 140 et seq. 29 Judgment of 16.04.2013, Kiobel v. Royal Dutch Petroleum Co. et. al., 569 U.S. 108 (2013). 30 On this point see M. Stürner, ‘Die territorialen Grenzen der Human Rights Litigation in den USA. Zu den Auswirkungen der Entscheidung des U.S. Supreme Court vom 17.04.2013 in der Sache Kiobel et al. v. Royal Dutch Petroleum Co. et al.’ (2014) JZ, 13 (20). 31 See M. Stürner, ‘Die territorialen Grenzen der Human Rights Litigation in den USA. Zu den Auswirkungen der Entscheidung des U.S. Supreme Court vom 17.04.2013 in der Sache Kiobel et al. v. Royal Dutch Petroleum Co. et al.’ (2014) JZ, 13 (18). 32 See in that sense the vote of Justice Breyer, who concurred only in judgment: „Unlike the Court, I would not invoke the presumption against extraterritoriality. Rather, guided in part by principles and practices of foreign relations law, I would find jurisdiction under this statute where (1) the alleged tort occurs on American soil, (2) the defendant is an American national, or (3) the defendant’s conduct substantially and adversely affects an important American national interest, and that includes a distinct interest in preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.” Kiobel v. Royal Dutch Petroleum Co. et. al., 569 U.S. 108 (2013). 33 Judgment of 08.12.2015, Jesner v. Arab Bank, No. 16-499, 584 U.S. ___ (2018).

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2. Human rights protection without special jurisdictional provisions While the ATS provides for a special jurisdictional rule for tort actions consisting in the violation of international law, the existing European rules on forum necessitatis are not limited to specific types of claims.34 In fact, there is no special category of jurisdiction for human rights cases at all. By no means does this entail that there cannot be human rights actions in European countries in the first place. On the contrary: Any jurisdictional provision could be used to bring an action for violation of human rights,35 possibly even § 23 ZPO described above.36 Even the unwritten forum necessitatis under German law could eventually be used as a last resort if access to justice cannot reasonably be obtained elsewhere, and some degree of proximity to Germany may be said to exist.37 However, such connection must be geographical in nature. It will not be created by the fact that claimants allege violations of human rights, even though there may be a general political interest of Germany to take steps to prevent such conduct.

3. The 2011 UN Guiding Principles on Business and Human Rights The UN Guiding Principles on Business and Human Rights (UNGP), adopted in 2011,38 propose State-induced judicial mechanisms to better protect victims of corporate misconduct. This includes situations where “claimants face a denial of justice in a host State and cannot access home

34 Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016), 80 RabelsZ, 798. 35 Such was the case in the claim of Pakistani victims of a textile factory fire against the German corporation KiK where international jurisdiction had been based on the corporation’s statutory seat in Germany. Recently the District Court of Dortmund rejected that claims on the ground that they were time-barred under the applicable Pakistani law (Case no. 7 O 95/15, 10.01.2019, Jabir and others v. KiK Textilien und Non-Food GmbH, ECLI:DE:LGDO:2019:0110.7O95.15.00). 36 Hartmann, ‘Haftung von Unternehmen für Menschenrechtsverletzungen im Ausland aus Sicht des Internationalen Privat- und Zivilverfahrensrechts’ in Krajewski and Saage-Maaß (eds) Die Durchsetzung menschenrechtlicher Sorgfaltspflichten von Unternehmen (2018), 290 et seq. 37 Nagel and Gottwald, Internationales Zivilprozessrecht (8th edn, 2020), para. 3.597. 38 UN Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework (UN Guiding Principles on Business and Human Rights), UN Doc. A/HRC/17/31 (21.03.2011).

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State courts regardless of the merits of the claim”.39 The pertinent Principles read: “25. As part of their duty to protect against business-related human rights abuse, States must take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction, those affected have access to effective remedy. 26. States should take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy.” However, the UNGP are not likely to bring about major changes, at least in Europe. First, they are not legally binding on the States. Second, the requirements set up therein are very similar to those in Art. 6 European Convention on Human Rights (ECHR). The right to a fair trial enshrined therein does not set up an obligation for Convention States to accept cases without a genuine link to their territory, as will be explained later on. Clearly, even in cases where there is some kind of denial of justice as prescribed in Principle 26 UNGP, this doesn’t imply that States are invited to exercise jurisdiction in cases with a predominantly extraterritorial character. Despite their non-binding nature, the UNGP have inspired a number of States to take action concerning business and human rights. The recent debate on reform in Germany led to the adoption of a National Action Plan for Business and Human Rights by the Federal Government on 21.12.2016.40 The main focus of this Action Plan was on reporting duties of businesses related to their actions taken in the field of Corporate Social Responsibility. Not much attention was paid to the procedural issues such as forum necessitatis. In any case, the question of jurisdiction in these situations doesn’t usually seem problematic. For claims against parent companies or purchasers in supply chain situations residing in Germany, as shown above, German courts do have international jurisdiction.

39 See Commentary on UNGP Principle 26. 40 For the Action Plan see https://www.auswaertiges-amt.de/blob/610714/fb740510e 8c2fa83dc507afad0b2d7ad/nap-wirtschaft-menschenrechte-engl-data.pdf (last access at: 29.10.2020).

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4. The 2015 Resolution of the International Law Institute In a much more specific manner and following their Resolution on Universal Criminal Jurisdiction, 41 in 2015 the International Law Institute (ILI) adopted a Resolution on “Universal Civil Jurisdiction with regard to Reparation for International Crimes”. 42 The term “international crimes” as used by the Resolution describes “serious crimes under international law such as genocide, torture and other crimes against humanity, and war crimes”. In order to establish jurisdiction, it will be necessary to demonstrate that such a human rights violation has taken place. The Resolution’s Art. 2 para. 1 provides that a court should exercise jurisdiction over claims for reparation by victims provided that: (a) no other State has stronger connections with the claim, taking into account the connection with the victims and the defendants and the relevant facts and circumstances; or (b) even though one or more other States have such stronger connections, such victims do not have available remedies in the courts of any such other State. Thus, according to the ILI, not only the total lack of jurisdiction but already the lack of appropriate and effective redress can lead to a forum necessitatis. Pursuant to Art. 2 para. 3 of that Resolution, the court where claims for relief by victims have been brought should decline to entertain the claims or suspend the proceedings, in view of the circumstances, when the victims’ claims have also been brought before (a) an international jurisdiction, such as the International Criminal Court; (b) an authority for conciliation or indemnification established under international law; or (c) the court of another State having stronger connections and available remedies within the meaning of the foregoing paragraphs. Art. 6 of the ILI Resolution recommends that in preparation of an instrument on jurisdiction and enforcement of judgments in civil and commercial matters, in particular by the Hague Conference on Private International Law, the rights of victims as set out in these Articles be taken into account.43

41 See Cimiotta, ‘The Relevance of Erga Omnes Obligations in Prosecuting International Crimes’ (2016) ZaörV, 698. 42 See Universal Civil Jurisdiction with regard to Reparation for International Crimes, 30.08.2015, see http://www.idi-iil.org/app/uploads/2017/06/2015_Tallinn _01_en-1.pdf (last access at: 29.10.2020). 43 It must be observed that the Judgments Project of the Hague Conference did not insert specific provisions in that sense, see https://www.hcch.net/en/projects/legisl ative-projects/judgments (last access at: 29.10.2020).

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Anyhow, pursuant to Art. 2 para. 2 of the Resolution, courts shall be considered to provide an available remedy if they have jurisdiction and if they are capable of dealing with the claim in compliance with the requirements of due process and of providing remedies that afford appropriate and effective redress. In light of this definition, the requirements set forth by the Resolutions are already met by the European rules on civil procedure since there is always jurisdiction of the courts in those Member States where the defendant corporations have their seat of place of business.44 If there is no significant relationship to a certain jurisdiction, it is only established if “victims do not have available remedies in the courts of any other State” pursuant to Art. 2 para. 1 subpara. b) of the ILI Resolution.45 In any case, it is indeed unclear whether the ILI Resolution should be applicable for cases of business-related transnational human rights violations committed by corporations and not by States.46 Apart from that, the Resolution largely operates with broad und unspecific terms. It will be difficult to assess whether a foreign jurisdiction is “capable of dealing with the claim in compliance with the requirements of due process and of providing remedies that afford appropriate and effective redress”, as set forth by Art. 2 para. 2 of the Resolution. This leaves much scope for different views. This is for example reflected by the fact that even highly developed jurisdictions like the USA and the EU accuse each other of not respecting the rule of law.47

D. Ubi ius, ibi remedium? No matter how the forum necessitatis is regulated, the question arises whether only the total lack of any jurisdiction (“negative conflict of juris-

44 Wagner, ‘Haftung für Menschenrechtsverletzungen’ (2016) 80 RabelsZ, 738. 45 Wagner, ‘Haftung für Menschenrechtsverletzungen’ (2016) 80 RabelsZ, 738; Basedow, ‘Institut de droit international: Resolution Adopted by the Institute at Ist Tallinn Session, 30.08.2015: Universal Civil Jurisdiction with regard to Reparation for International Crimes (1st Commission)’ (2016) Vol. 80 RabelsZ, 154. 46 M. Stürner, ‘Zivilprozessuale Voraussetzungen für Klagen gegen transnationale Unternehmen für Menschenrechtsverletzungen’, in Krajewski, Oehm and SaageMaaß (eds), Zivil- und strafrechtlichen Haftung von Unternehmen für Menschenrechtsverletzungen (2018), 73 (88). 47 This is one of the roots of the so-called conflict of jurisdictions between Europe and the USA flaring up time and again, see Schack, Internationales Zivilverfahrensrecht (7th edn, 2017), para. 817 et seq.

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diction”) leads to a “denial of jurisdiction” or if it is sufficient that a jurisdiction can indeed be found but this jurisdiction is not effective e.g. because of problems concerning the rule of law in the procedures of a State.48 For the Bundesgerichtshof (BGH), the mere lack of trust in the courts of a State is not enough.49 On the other hand, it could be sufficient if there were concrete indications that the originally competent court would infringe the rule of law in the specific procedure.50 The crucial questions within this wider understanding will be this: What are the criteria according to which the courts find whether or not the courts of another country guarantee effective remedies and work in compliance with the basic requirements of the rule of law?51 And how can these facts be proven if

48 Geimer in: Zöller, ZPO, 33rd edn (2020), Internationales Zivilverfahrensrecht para. 47 („nicht zumutbar“ i.e. not reasonable to bring proceedings there); Patzina in: MüKo-ZPO, Vol. 1 (2020), § 12 para. 99 („aus tatsächlichen oder politischen Gründen“ i.e. for factual or political reasons, citing Kropholler, Internationales Zivilverfahrensrecht (1982) Kap. III para. 184); Schütze, ‘Die Notzuständigkeit im deutschen Recht’, in Bittner (ed), Festschrift für Walter H. Rechberger zum 60. Geburtstag (2005), 571 et seq.; Hartmann, ‘Haftung von Unternehmen für Menschenrechtsverletzungen im Ausland aus Sicht des Internationalen Privatund Zivilverfahrensrechts’, in Krajewski and Saage-Maaß (eds), Die Durchsetzung menschenrechtlicher Sorgfaltspflichten von Unternehmen (2018), 290 et seq.; for a detailed and comparative account see Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016), 80 RabelsZ, 794 et seq; cf. also the recent volume Forlati and Franzina (eds), Universal Civil Jurisdiction - Which Way Forward? (2020). 49 BGH 02.06.1991 – XI ZR 206/90, BGHZ 115, 90 = NJW, 1991, 3093, 3095 („[… erstrebt […] eine Entscheidung deutscher Gerichte nur deshalb, weil sie in die Rechtsprechung der zur Entscheidung berufenen […] Gerichte kein Vertrauen hat“ – “seises German courts only because she lacks trust in the decisions of the originally competent foreign court”). 50 Arguably, in this sense OLG München U (K) 6221/91, 07.10.1992 – IPRax 1993, 239. 51 M. Stürner, ‘Zivilprozessuale Voraussetzungen für Klagen gegen transnationale Unternehmen für Menschenrechtsverletzungen’, in Krajewski, Oehm and SaageMaaß (eds), Zivil- und strafrechtlichen Haftung von Unternehmen für Menschenrechtsverletzungen (2018), 73 (88); some rather vague ideas (“weighing of interests”): Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016), 80 RabelsZ, 785; against “the connecting factor that is exclusively claimant-oriented” Weber, ‘Universal Jurisdiction and Third States in the Reform of the Brussels I Regulation’ (2011) 75 RabelsZ, 639 et seq.

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the properly competent court has never been seized in the particular circumstances?52 Related to these questions, there is a discussion about whether the right to a fair trial enshrined in Art. 6 ECHR creates an obligation for the Convention States to provide a rule on forum necessitatis.53 Recently, the issue has been addressed by the European Court of Human Rights (ECtHR) in Naït-Liman v Switzerland dealing with the complaint of a Tunisian citizen living in Switzerland who had been subjected to torture in Tunisia. Since he had been advised not to seize the courts in his home country, he brought a civil action before the Swiss courts – without success. Swiss courts (the first instance court as well as the appellate courts) refused universal jurisdiction due to the lack of a significant connection required by Art. 3 of the Swiss Federal Act on Private International Law.54 The Strasbourg Court found that in interpreting this provision in a restrictive manner, Swiss domestic courts did not violate Art. 6 para. 1 ECHR by refusing jurisdiction according to Art. 3 of the Swiss Act (forum necessitatis) on the grounds of a missing substantive link.55 Neither is there an international custom based on general acceptance by the Convention States, nor does an international treaty oblige the States to provide a forum of necessity. Consequently, international law leaves a wide margin of appreciation to the States (in this case: to the Swiss authorities) concerning the conditions for universal jurisdiction or a forum necessitatis.56 As the Court put it, “in those States recognizing the forum of necessity, courts enjoy considerable discre-

52 Hartmann, ‘Haftung von Unternehmen für Menschenrechtsverletzungen im Ausland aus Sicht des Internationalen Privat- und Zivilverfahrensrechts‘ in Krajewski and Saage-Maaß (eds) Die Durchsetzung menschenrechtlicher Sorgfaltspflichten von Unternehmen (2018), 290 (293). 53 To the affirmative: Geimer in: Zöller, ZPO, 33 rd edn (2020), Internationales Zivilverfahrensrecht para. 47; Ereciński and Weitz 'Internationale Notzuständigkeit im polnischen Internationalen und Europäischen Zivilverfahrensrecht', in Geimer and Schütze (eds) Festschrift für Athanassios Kaissis zum 65. Geburtstag (2012), 187; Kirshner, ‘A Call for the EU to Assume Jurisdiction over Extraterritorial Corporate Human Rights Abuses’ (2015) 13 JHR (2015), 22 et seq.; more general Geimer, ‘Menschenrechte im internationalen Zivilverfahrensrecht (1994) 33 BerDGesVölkR, 225 et seq.; in his study, Nuyts (supra fn. 16) is referring to parliamentary discussions e.g. in Germany, Belgium and the Netherlands showing the same tendency (para. 83). 54 Court of Geneva, 15.09.2005; Court of Justice of the Republic and the Canton of Geneva, 15.09.2006; Federal Supreme Court, 22.05.2007. 55 See Application No. 51357/07, 15.03.2018, Naït-Liman v Switzerland. 56 Ibid., para. 201 et seq.

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tion in defining the connecting factors and applying them on a case-bycase basis”.57 Nevertheless, the ECtHR did not miss out on advising the Convention States not to take the decision as a free ticket to refuse jurisdiction in those very sensitive cases of compensation for acts of torture but to “take account in their legal orders of any developments facilitating effective implementation of the right to compensation for acts of torture, while assessing carefully any claim of this nature so as to identify, where appropriate, the elements which would oblige their courts to assume jurisdiction to examine it”.58 In support of their plea for universal jurisdiction in civil cases, some scholars maintain that an analogy should be drawn to universal jurisdiction in criminal procedural law.59 For various reasons, however, this seems not to be convincing. Pursuant to the rules of the German International Criminal Code (Völkerstrafgesetzbuch), Germany’s penal powers extend particularly to severe crimes like genocide or crimes against humanity even if they were committed outside the German territory.60 As opposed to the earlier case law of the German Federal Supreme Court, according to which the principle of universal jurisdiction in criminal law required voluntary residence in Germany of the perpetrator as an unwritten element,61 the German International Criminal Code does not require any specific link to the territory of the place of jurisdiction. In the so-called adhesion procedure (§ 403 et seq. German Criminal Procedure Code), the victim of a crime can sue the perpetrator for civil claims resulting from the crime

57 Ibid., para. 209. 58 Ibid., para. 220. 59 See Halfmeier, ‘Menschenrechte und internationales Privatrecht im Kontext der Globalisierung’ (2004), 68 RabelsZ, 657 et seq.; Wilhelmi, ‘Menschenrechtsschutz durch universale Jurisdiktion im internationalen Privat- und Strafrecht’, in von Hoffmann (ed), Universalität der Menschenrechte (2008), 207; Wilhelmi, Das Weltrechtsprinzip im internationalen Privat- und Strafrecht (2007), 423 et seq. 60 See Kreß, ‘Universal Jurisdiction over International Crimes and the Institut de Droit international’ (2006) 4 Journal of International Criminal Justice, 561; Nolte, ‘Das Weltrechtsprinzip in Zivilverfahren – Notizen zum Urteil des US Supreme Court im Fall Sosa v. Alvarez-Machain’ in Grote (ed) Die Ordnung der Freiheit, Festschrift für Christian Starck zum siebzigsten Geburtstag (2006), 847; Wilhelmi, ‘Universalität der Menschenrechte’ in von Hoffmann (ed) (2008), 229 et seq.; Weißer, ‘Das Prinzip der Weltrechtspflege in Theorie und Praxis’ in Goldtdammer’s Archiv für Strafrecht (2012) 416. 61 Residence of the victim in Germany is not sufficient, see BGH, 30.04.1999, 3 – StR 215/98, BGHSt 45, 64.

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without any additional jurisdictional requirements62 after he has been convicted in criminal proceedings. Initiating such criminal proceedings, however, requires sufficient grounds to suspect that the accused has committed a criminal offense (see § 203 German Criminal Procedure Code). Criminal investigations to that extent, however, can only be initiated if there is a predominant probability that the accused will be convicted (“überwiegende Verurteilungswahrscheinlichkeit”).63 By contrast, this threshold for a claim does not exist in civil proceedings. In general, there is no preliminary examination of the chances of success of a civil claim, the only exception existing in legal aid proceedings: Legal aid is only granted if the envisaged claim is sufficiently likely to succeed and if it does not seem frivolous (see § 114 para. 1 German Civil Procedure Code). Thus, both types of procedure are far too different to make the analogy convincing.

E. Back to the Future? Against this backdrop, how should a future revision of the Brussels system deal with the question of residual jurisdiction, and, more specifically, with the human rights cases described above? If the scope of such a revised Brussels Regulation were to extend to third State defendants, as envisaged in the 2010 proposal, a provision on subsidiary jurisdiction would indeed be advisable. However, the main challenge will be to find criteria which combine legal certainty with the necessary flexibility. Otherwise decisions based on such a forum necessitatis are likely not to be recognized, or enforceable, in other States64 because they might be regarded as inconsistent with international law.65 Moreover, it could trigger litigation even though

62 See also the special jurisdiction of adhesion procedure in Art. 7 No. 3 Brussels Ibis Regulation. 63 See e.g. BGH 19.01.2010 – StB 27/09, NJOZ 2010, 1274, 1276 para. 33; BGH 18.06.1970 – III ZR 95/68 NJW 1970, 1543, 1544. 64 Roorda and Ryngaert, ‘Business and Human Rights Litigation in Europe and Canada: The Promises of Forum of Necessity Jurisdiction’ (2016) 80 RabelsZ, 785 citing Broomhall, EJIL: Talk! (01.05.2012): Extraterritorial Civil Jurisdiction: Obstacles and Openings in Canada: http://www.ejiltalk.org/extraterritorial-civil-juris diction-obstacles-and-openings-in-canada/ (last access at: 29.10.2020). 65 Jayme, ‘Völkerrecht und Internationales Privatrecht – eine entwicklungsgeschichtliche Betrachtung’, in Leible and Ruffert (eds) Völkerrecht und IPR (2006), 38, making reference to the decision of the U.S. Supreme Court in the Maria Altmann case: Republic of Austria v. Altmann, 541 U.S. 677, 124 S.Ct. 2240 (2004).

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the requirements of the jurisdictional rule will certainly only rarely be met. As the recent history of the ATS has demonstrated, such a forum might even cause unwelcome political controversies. In fact, when it comes to human rights cases, the present system of jurisdiction may be said to cover the vast majority of pertinent cases even absent a special jurisdictional clause for such cases.66 Granting a forum necessitatis without any substantive geographical link to the State at issue is not desirable – especially when it comes to private human rights litigation. As a transnational court system is very unlikely to be set up in the near future,67 the advent of a forum of necessity for human rights violations might lead to a competition amongst Member States’ courts about which of them is the most successful human rights court. In the European judicial area, which is based on the idea of equivalence of all justice systems, this does not seem like the right approach.

66 M. Stürner, ‘Zivilprozessuale Voraussetzungen für Klagen gegen transnationale Unternehmen für Menschenrechtsverletzungen’, in Krajewski, Oehm and SaageMaaß (eds), Zivil- und strafrechtlichen Haftung von Unternehmen für Menschenrechtsverletzungen (2018), 73 (89). 67 Cf. recently Steinitz, The Case for an International Court of Civil Justice (2018).

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The Jurisdiction of the Unified Patent Court: A Model for the Application of the Brussels Ia Regulation to non-EU Disputes?* Alberto Miglio, Turin

Abstract Despite the introduction of certain heads of jurisdiction applicable erga omnes, the Brussels Ia Regulation essentially replicates the structure of its predecessor, leaving to national law the determination of jurisdiction against defendants domiciled in third States. With a view to reforming the Regulation, attention should be paid to the provisions on the jurisdiction of “courts common to several Member States” that were introduced by Regulation No 542/2014 in order to accommodate the Unified Patent Court (UPC) within the EU judicial system. The rules on the international jurisdiction of the UPC, which also apply to third-State domiciliaries, might have a lasting legacy as a model for future reforms of the scope of jurisdiction rules for civil and commercial matters generally. The question then arises: Do the new rules provide an adequate model?

Keywords Brussels Ia – Unified Patent Court – Regulation 542/2014 – erga omnes jurisdiction rules – differentiated integration – extraterritorial jurisdiction.

* The chapter partially draws from the article “La giurisdizione del Tribunale unificato dei brevetti, tra incertezze sul futuro del sistema brevettuale e prove di universalizzazione del regolamento Bruxelles I bis” (2018) in Il Diritto dell'Unione europea, pp. 657–688, for which the author was awarded the annual prize of the Italian Society of International Law in 2020.The author is grateful to Prof. Costanza Honorati and Elena D’Alessandro and to Dr. Martina Buscemi for their insightful comments on earlier drafts. The usual disclaimer applies.

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A. Introduction: overcoming the limited scope of harmonized bases of jurisdiction under the Brussels Ia Regulation? It is well-known that the Brussels Ia Regulation1 has not completely superseded national rules of jurisdiction. According to Art. 4 para. 2 of the Regulation, “persons who are not nationals of the Member State in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that Member State”. As a consequence, whereas only uniform heads of jurisdiction apply to defendants domiciled in a Member State, defendants domiciled in third countries are – as a general rule – subject to the national jurisdiction rules of the Member States. This basic distinction has been a salient feature of the EU system of jurisdiction rules for civil and commercial disputes ever since the conclusion of the 1968 Brussels Convention.2 It was later reiterated in Regulation No 44/2001,3 which replaced the Convention after the Treaty of Amsterdam had “communitarized” judicial cooperation in civil matters,4 and to a large extent preserved by the 2012 Recast Regulation. The limited scope of uniform rules is a consequence of the harmonization of jurisdiction rules being instrumental in the establishment of the internal market. At the time the Brussels Convention was concluded, the Member States were predominantly concerned with facilitating intra-Community trade and, as a result, the Convention paid little attention to the outer world.5 The ensuing system therefore differentiated between intra-EU and extra-EU situations, providing for uniform rules in the first while allowing national law to operate in the second. The attempt to draw a line between internal situations and those involving connections to third States, however, is the source of a number of shortcomings and has therefore long attracted criticism. The most evident consequence of this approach is discrimination against defendants domiciled in third countries, who may be sued on the basis of (sometimes exor1 Regulation (EU), No 1215/2012. 2 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ L 299, 31.12.1972, pp. 32–42. 3 Regulation (EC), No 44/2001. 4 See Basedow, ‘The Communitarization of the Conflict of Laws under the Treaty of Amsterdam’ (2000) 37 CMLR 687; Pocar, ‘The ‘Communitarization’ of Private International Law and its Impact on the External Relations of the European Union’, in Malatesta, Bariatti and Pocar (eds), The External Dimension of EC Private International Law in Family and Succession Matters (2008), 3. 5 Pataut, ‘International Jurisdiction and Third States: A View from the EC on Family Matters’, in Malatesta, Bariatti and Pocar (eds), supra fn. 4, 123.

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bitant) national rules of jurisdiction whereas EU-based defendants may not. This outcome could perhaps be regarded as justified in the absence of a multilateral regime for the coordination of the exercise of jurisdiction, since EU domiciliaries may equally be sued in third countries based on national rules of jurisdiction. Yet, the distinction between intra-EU and “international” cases is not clear-cut6 and the criterion of the defendant’s domicile makes the application of different legal regimes dependent on an almost random factor such as the procedural role of the parties.7 Whilst criticism has been particularly strong among American scholars, 8 this basic feature of the regulation is also widely unpopular in the European academic community.9 The discriminatory effect is further exacerbated by the asymmetry between the scope of application of uniform rules of jurisdiction and that of the provisions on the recognition and enforcement of judgments from other Member States. Judgments issued in a Member State shall be automatically recognized in any other Member State,10 irrespective of whether they were rendered on the basis of a uniform or of a national head of jurisdiction. Grounds for opposing recognition 11 or enforcement12 are limited and do not include review, by the requested court, of the jurisdiction of the court of origin, except where exclusive jurisdiction was disregarded or where the defendant was a policyholder, an insured, the beneficiary of an

6 See Heinze and Dutta, ‘Ungeschriebene Grenzen für europäische Zuständigkeiten bei Streitigkeiten mit Drittstaatenbezug’ (2005) IPRax 224; Pataut, supra fn. 5, 128. 7 Pataut, supra fn. 5, 127–128. 8 See Nadelmann, ‘Jurisdictionally Improper Fora in Treaties on Recognition and Enforcement of Judgments. The Common Market Draft’ (1967) 67 ColumbiaLR 995 (1001–1002); von Mehren, ‘Recognition and Enforcement of Foreign Judgments’ (1980) 167 RCADI 100. 9 See, ex multis, Pocar, ‘Étude comparative des règles de conflit de juridictions dans les États membres de la C.E.E.’, in L'influence des Communautés européennes sur le droit international privé des États membres (1981) 77 (79); Hartley, ‘Introduction to the Brussels Jurisdiction and Judgments Convention’ (1996) Collected Courses of the Academy of European Law, 232; Arroyo, ‘Exorbitant and Exclusive Grounds of Jurisdiction in European Private International Law: Will They Ever Survive?’, in Mansel, Pfeiffer, Kronke, Kohler and Hausmann (eds), Festschrift für Erik Jayme (2004), I, 169 (173); Meeusen, ‘The Brussels Ibis Regulation and the Prohibition of Discrimination under EU Primary Law’, in Mankowski (ed), Research Handbook on the Brussels Ibis Regulation (2020), 285 (288–304). 10 Regulation (EU), No 1215/2012 Art. 36 para. 1. 11 Ibid., Art. 45. 12 Ibid., Art. 46.

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insurance contract, an injured party, a consumer or an employee.13 Although national rules of jurisdiction fall outside the scope of the Regulation and may be exorbitant, the judgments for which they provide the basis will thus benefit from the generous harmonized regime when it comes to their recognition and enforcement. The effects of national exorbitant fora are thereby carried into the system.14 A source of further distortion is Art. 6 para. 2 of the Regulation, which allows “any person domiciled in a Member State […], whatever his nationality, [to] avail himself in that State of the rules of jurisdiction there in force […] in the same way as the nationals of that State”.15 This rule, while constituting “a positive statement of the principle of equality of treatment”16 and necessary to bring the Regulation in line with primary law, expands the scope of application of national exorbitant rules of jurisdiction. For instance, Art. 14 of the French Civil Code can be relied upon not only by French nationals, but also by French residents, regardless of their nationality. Finally, the co-existence of national and European rules of jurisdiction discriminates not only against third country defendants, but arguably also among EU plaintiffs.17 Except where either Art. 22 or Art. 23 Brussels Ia Regulation applies, whenever defendants are domiciled in a third State the fora available to plaintiffs domiciled in the EU vary from Member State to Member State. Thus, some plaintiffs benefit from much more generous conditions of access to their own forum than others. If at the time of the negotiation of the Brussels Convention this issue may have appeared of minor importance18, the concern for ensuring equal possibility of access to justice to plaintiffs from different Member States can no longer be neglected. Meanwhile, the appeal of grounds for limiting the scope of harmonized rules to disputes involving EU-based defendants has largely faded. On the one hand, the Court of Justice of the European Union (CJEU) has made

13 Ibid., Art. 45 para. 1, subpara. e. 14 See Audit and Bermann, ‘The Application of Private International Law Norms to ‘Third Countries’: The Jurisdiction and Judgments Example’, in Nuyts and Watté (eds), International Civil Litigation in Europe and Relations with Third States (2005) 55 (64). 15 Regulation (EU), No 1215/2012 Art. 6 para. 2. 16 Jenard, Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed at Brussels, 27.09.1968, OJ C 59, 05.03.1979, 21. 17 For a discussion, see Meeusen, supra fn. 9, 299–301. 18 Audit and Bermann, supra fn. 14, 69.

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clear that the scope of the Regulation is not defined by reference to territorial connection with a Member State19 and that EU competence to unify the rules on jurisdiction in civil and commercial matters is not restricted to intra-EU disputes.20 On the other hand, most legislative measures adopted in the area of judicial cooperation in civil matters, whether on jurisdiction or on choice of law, have universal application and no longer leave extraEU situations within the remit of national law.21 As a result, the dual jurisdiction regime designed by the Regulation has nowadays become an exception within the Area of Freedom, Security and Justice,22 and such an exception sits uneasily with the very objective of establishing a legal area without internal borders.23 Against this background, when it tabled a proposal for the recast of the Brussels I Regulation in 2010, the Commission planned to expand the scope of application of uniform heads of jurisdiction to defendants domiciled in third countries.24 The extension was to be supplemented by a subsidiary jurisdiction rule based on the location of the defendant’s property25 and by a forum necessitatis.26 However, the proposal could not find enough support in the Council and was amended to reflect a more conservative approach. Ultimately, the Recast Regulation only extended the application of specific rules to defendants domiciled in third countries,27 while leaving the basic distinction untouched. However, this may be regarded as a merely temporary solution. According to Art. 79 of the Brussels Ia Regulation, by January 2022 the Commission shall submit a report on the application of the Regulation, including

19 Case C-281/02, 01.03.2005, Owusu v N. B. Jackson, ECLI:EU:C:2005:120, para. 34. 20 Opinion 1/03, ECLI:EU:C:2004:798, para. 143. 21 Regulation (EC), No 2201/2003, repealing Regulation (EC), No 1347/2000; Regulation (EC), No 864/2007; Regulation (EC), No 593/2008; Regulation (EC), No 4/2009; Regulation (EU), No 1259/2010; Regulation (EU) No 650/2012; Regulation (EU), No 2016/1103; Regulation (EU), No 2016/1104. 22 See Domej, ‘Das Verhältnis nach „außen“. Europäische v. Drittstaatensachverhalte’, in von Hein and Rühl (eds), Kohärenz im Internationalen Privat- und Verfahrensrecht der Europäischen Union (2016), 90 (91). 23 Cfr. Hess, Pfeiffer and Schlosser, The Brussels I Regulation 44/2001 – Application and Enforcement in the EU (2008), 46. 24 Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, COM (2010) 748 final (“the Proposal”). 25 Art. 25 of the Proposal. 26 Art. 26 of the Proposal. 27 See Art. 18 para. 1 on consumer contracts; Art. 21 para. 2 on employment contracts; Art. 25 para. 1 on prorogation agreements.

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“an evaluation of the possible need for a further extension of the rules on jurisdiction to defendants not domiciled in a Member State”, possibly paving the way for amendments. In fact, albeit to a limited extent and only in relation to a fairly specific subject matter, this step has already been taken with the adoption of Regulation No 452/2014, which amended the Brussels Ia Regulation in order to accommodate into the Brussels system the jurisdiction of the Unified Patent Court (UPC). Two questions therefore arise. First, does the jurisdiction of the UPC, as defined in the amended Brussels Ia Regulation, provide a model for overcoming the distinction between intra-EU and extra-EU cases in general? Second, if so, is it a model that deserves to be followed?

B. The UPC as a sui generis court The need for amending the Brussels Ia Regulation arose from the peculiar nature of the UPC and the extent of its jurisdiction, which deviates from the rules set out in the Regulation. Indeed, the UPC is not only a novelty in the EU system of judicial protection, but also a strange animal in the realm of judicial bodies.28 It is established by an international agreement, but participation is limited to EU Member States. Moreover, not all Member States are parties. In this respect, the UPC Agreement looks like a classic inter se treaty between members of an international organization, a not too uncommon phenomenon in the history of European integration:29 suffice it to think of the Schengen Agreements, the Treaty of Prüm, the Treaty establishing the European Stability Mechanism or the Fiscal Compact. However, whereas those agreements either did not provide for judicial ar-

28 See Dehousse, ‘The Unified court on patents: The new oxymoron of European law’ (2013) Egmont Paper 60; Baratta, ‘The Unified Patent Court – What is the ‘common’ trait about?’, in Honorati (ed), Luci e ombre del nuovo sistema UE di tutela brevettuale – The EU Patent Protection. Lights and Shades of the New System (2014), 101; Alberti, ‘New developments in the EU system of judicial protection: the creation of the Unified Patent Court and its future relations with the CJEU’ (2017) 24 MJ 6. 29 See de Witte, ‘Old-Fashioned Flexibility: International Agreements between Member States of the European Union’, in De Burca and Scott (eds), Constitutional Change in the EU – From Uniformity to Flexibility? (2000), 31; Heesen, Interne Abkommen: völkerrechtliche Verträge zwischen den Mitgliedstaaten der Europäischen Union (2015); Miglio, ‘Differentiated Integration and the Principle of Loyalty’ (2018) 14 EuConst 475.

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rangements or entrusted jurisdiction to the CJEU,30 the very purpose of the UPC Agreement is to set up a highly specialized judicial body qualified as a “court common to the contracting Member States”.31 This unusual qualification is a contingency strategy.32 It follows from the failure of the attempt to set up a truly international patent court with the participation of third States alongside the EU and its Member States (the ECPC). After Opinion 1/09 made clear that this option would have been incompatible with the EU Treaties, possible alternatives included entrusting jurisdiction to the Court of Justice pursuant to Art. 262 TFEU,33 setting up a specialized court within it under Art. 257 TFEU, or leaving enforcement to national courts as for Community trademarks and Community designs.34 However, under strong pressure from a patent community eager to avoid the jurisdiction of the CJEU,35 the contracting Member States sought to

30 For instance, the Treaty establishing the European Stability Mechanism and the Fiscal Compact do so on the basis of Art. 273 TFEU. By contrast, one of the defining features of “Schengen law” and of measures adopted under the Treaty of Prüm was the absence of judicial oversight mechanisms. Even after the Treaty of Amsterdam incorporated the Schengen acquis into EU law, judicial review was limited for measures falling under the third pillar: see Thym, ‘The Schengen Law: A Challenge for Legal Accountability in the European Union’ (2002) 8 ELJ 218 (231–242). 31 Art. 1, second sentence, of the UPC Agreement, which adds that the UPC is “thus subject to the same obligations under Union law as any national court of the Contracting Member States”. 32 Baratta, supra fn. 28, 102. 33 However, it could have been problematic to also grant the CJEU jurisdiction over European patents under this legal basis alone. The possibility of resorting, in addition, to the flexibility clause in Art. 352 TFEU was not investigated. See de Witte and Martinelli, ‘Treaties between EU Member States as Quasi-Instruments of EU Law’, in Cremona and Kilpatrick (eds), EU Legal Acts: Challenges and Transformations (2018), 157 (184). 34 For this option, see de Visscher, ‘European Unified Patent Court: Another More Realistic and More Equitable Approach Should Be Examined’ (2012) GRUR Int 214. 35 See Ullrich, ‘Harmonizing Patent Law: The Untameable Union Patent’, in Janssens and Overwalle (eds), Harmonisation of European IP law: from European rules to Belgian law and practice – contributions in honour of Frank Gotzen (2012), No 12-03; Jaeger, ‘Shielding the Unitary Patent from the ECJ: A Rash and Futile Exercise’ (2013) 44 IIC 389; Pagenberg, ‘Unitary Patent and Unified Court – What Lies Ahead?’ (2013) 8 JIPLP 480; Norrgård, ‘Alternatives to the Court of Justice of the European Union in the Field of Intellectual Property Law’, in Micklitz and Wechsler (eds), The Transformation of Enforcement. European Economic Law in Global Perspectives (2016) 179 (189).

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preserve the basic features of the ECPC as much as possible.36 The new jurisdiction, meanwhile renamed UPC, was to be established by an agreement between Member States, without participation of either the EU or any third country, and was rebranded as a “common court”. As a result, it has a dual nature: On the one hand, it is an international court since it is established through an international agreement; on the other hand, it is equated to national courts in its relations with EU law and for the purpose of the application of EU legislation on patents.37 Instead of being an international judicial body separated from the EU legal order, it is therefore deeply embedded in the system.38 The decision to establish a unified court for patents through an international agreement between Member States made an amendment to the Brussels Ia Regulation necessary. Since the UPC was to have competence in the area where the Regulation allocates jurisdiction to national courts, the matter could not be left to the Agreement alone. Had the CJEU deemed it compatible with the Treaties and allowed for its conclusion, the ECPC Agreement, to which the EU would have been a contracting party, would have become part of the EU legal order and taken precedence over measures of secondary law, including the Brussels Ia Regulation.39 The UPC Agreement, however, is situated outside the EU legal order. Unlike EU agreements, inter se treaties of the Member States are an external source vis-à-vis the EU legal system and are subject to the primacy of EU law in much the same way as the domestic law of the Member States.40 Moreover, participation being limited to Member States, the UPC Agreement falls outside the scope of the disconnection clause provided for in Art. 71 of the Regulation.41 Therefore, the only way the UPC could be given jurisdiction currently allocated to national courts under the Brussels Ia Regulation, was to amend that piece of legislation.

36 Jaeger, ‘All back to square one? An assessment of the latest proposal for a patent and court for the internal market and possible alternatives’, Max Planck Institute for Intellectual Property and Competition Law Research Paper No 12-01, 12. 37 De Witte and Martinelli, supra fn. 33, 184. 38 Honorati, ‘Der einheitliche Patentschutz in der Europäischen Union: Gerichtsbarkeit und anwendbares Recht’ (2017) 29 Jahrbuch für italienisches Recht 3 (7–8). 39 See Case 181/73, 30.04.1974, Haegeman v Belgian State, ECLI:EU:C:1974:41. Pursuant to Art. 216 para. 2 TFEU, “Agreements concluded by the Union are binding upon the institutions of the Union and on its Member States”. 40 De Witte, supra fn. 29, 45–52; Klabbers, Treaty Conflict and the European Union (2009), 209; Heesen, supra fn. 29, 233. 41 See Mankowski, ‘Die neuen Regeln über gemeinsame Gerichte in Artt. 71a-71d Brüssel Ia-VO’ (2014) GPR 330 (331).

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The aim of Regulation No 452/2014 is precisely to accommodate the UPC into the jurisdictional architecture designed by the Brussels Ia Regulation. This objective is achieved by adding four Articles (71a–71d) to Chapter VII of the Regulation, which addresses the relationship between the Regulation and other instruments. Unlike the UPC Agreement and the Regulation on the European patent with unitary effect, Regulation No 452/2014 applies EU-wide. The UK and Ireland, which under Protocol No 21 had a general opt-out from the Area of Freedom, Security and Justice but could decide to join individual EU measures in that sector, decided to participate from the beginning. Denmark, which has similarly opted out of the AFSJ but has no opt-in under EU law, declared that it would unilaterally implement the amendments, as permitted by the 2005 agreement between the European Community and Denmark extending to that Member State the Brussels I Regulation.

C. Accommodating the UPC into the EU judicial system: Regulation No 524/2014 and the jurisdiction of “common courts” At least in principle, the new provisions introduced by Regulation No 524/2014 do not address solely the jurisdiction of the UPC but are phrased in broader terms and refer generically to courts common to several Member States. They could thus provide coverage for further judicial bodies of this kind that may be established in the future.42 Interestingly, the new rules address the jurisdiction of common courts in respect of both EU-domiciliaries and defendants domiciled in third States. However, more than out of dissatisfaction with the general scheme of the Brussels Ia Regulation, this stance arose out of necessity. By definition, a common court shall have common rules of jurisdiction. It would be hardly conceivable – and in any event utterly undesirable – for such a court to apply national jurisdiction rules. In this respect, a common court is not like a purely national court, because it cannot rely on residual juris-

42 It has been remarked, in this regard, that the UPC could provide a model for future specialized courts, especially since the reform of the CJEU (Regulation (EU, Euratom), 2015/2422 of the European Parliament and of the Council of 16.12.2015 amending Protocol No 3 on the Statute of the Court of Justice of the European Union) and the closing of the Civil Service Tribunal seem to have sounded the death knell for the prospect of establishing further specialized courts within the CJEU structure. Cf. Alberti, supra fn. 28, 20–24.

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diction based on domestic law.43 As a consequence, the jurisdiction of the UPC had to be designed with its operation in the global space in mind.

I. The different scope of the jurisdiction of national courts and the UPC jurisdiction and the ensuing need for coordination of proceedings Recital 5 clarifies that Regulation No 524/2014 only addresses the international jurisdiction of the UPC and does not deal with the internal allocation of competence between different branches of the common court. This task is left to the UPC Agreement and is dealt with in Art. 33 thereof, which lays down a complex list of criteria – not always consistent with the principles underpinning the Brussels Ia Regulation44 – for allocating disputes among divisions of the newly established judicial body. The basic rule on the jurisdiction of common courts is a rule of substitution: Pursuant to Art. 71b para. 1, the common court “shall have jurisdiction where, under [the] Regulation, the courts of a Member State party to the instrument establishing the common court would have jurisdiction”. For the common court to be competent it is therefore sufficient that a court of a contracting Member State would otherwise have jurisdiction under the Regulation.45 Importantly, this does not imply that jurisdiction needs to be allocated in the same way to the UPC or to a national court according to Chapter II of the Regulation.46 Indeed, according to the UPC Agreement, the UPC enjoys exclusive jurisdiction over a broader range of subject matters than national courts under the Brussels Ia Regulation. Most notably, whereas Art. 24 para. 4 of the Regulation grants exclusive jurisdiction to the courts of the State of registration in respect of claims on validity and registration of patents,47 the UPC is also vested with exclusive jurisdiction in respect of infringement claims.48 This discrepancy should not be problematic where actions are brought before national courts of contracting Member States, which are bound by

43 See recital 6 of Regulation (EU), No 542/2014. 44 Tilmann, ‘The UPC Agreement and the Unitary Patent Regulation—construction and application’ (2016) 11 JIPLP 545 (551–553); Honorati, supra fn. 38, 18–25. 45 Mankowski, supra fn. 41, 336; Honorati, supra fn. 38, 14. 46 Mankowski, supra fn. 41, 336. 47 For an analysis of this provision see Ubertazzi, ‘Intellectual property, Jurisdiction’, in Basedow, Rühl, Ferrari and De Miguel Asensio (eds), Max Planck Encyclopedia of Private International Law (2017), 970 (973–975). 48 See Art. 32 para. 1 subpara. a of the UPC Agreement.

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virtue of Art. 32 of the UPC Agreement to recognize the exclusive competence of the UPC and decline jurisdiction.49 By contrast, coordination is needed where parallel proceedings are brought before the UPC and a court of a non-participating Member State, which may have concurrent jurisdiction as the forum of the defendant’s domicile under Art. 4 of the Regulation. For this purpose, the Regulation provides for the application of Artt. 29 to 32 on lis pendens and related actions, albeit only as regards the coordination of proceedings brought in a common court and in a court of a Member State not party to the agreement establishing that common court.50 By contrast, no reference is made to Artt. 33 and 34 of the Regulation, which provide for flexible mechanisms of coordination between actions brought in a Member State and proceedings pending before a third State court. However, since the UPC is equated to a court of a Member State, it has been argued that Artt. 33 and 34 should be deemed applicable where the jurisdiction of the UPC is based on Chapter II of the Regulation.51 Art. 71c also does not deal with the coordination of proceedings brought before different divisions of the UPC: Since they are not separate courts, but merely branches of a unitary judicial body, this is an internal matter left to the UPC Agreement.52

II. The extension of the rules on jurisdiction contained in Chapter II of the Regulation to defendants domiciled in third States As regards the subjective scope of application of the jurisdiction rules applicable to a common court, Art. 71b para. 2 provides that the harmonized heads of jurisdiction in Chapter II of the Regulation shall apply regardless of the defendant’s domicile. This rule, which takes inspiration from the 2010 Commission proposal, has the effect of extending the rules envisaged for intra-EU disputes also to cases where the defendant is domiciled in a third country.53 The most important practical consequences relate to the

49 Marongiu Buonaiuti, ‘The Brussels I Recast Regulation and the Unified Patent Court Agreement: Towards an Enhanced Patent Litigation System?’, in Ferrari and Ragno (eds), Cross-border Litigation in Europe: The Brussels I Recast Regulation as a panacea? (2015), 264 (276–277). 50 See Art. 71c para. 1. 51 De Miguel Asensio, ‘Regulation (EU), No 542/2014 and the International Jurisdiction of the Unified Patent Court’ (2014) 45 IIC 867 (873). 52 See, for instance, Art. 33 para. 2 of the UPC Agreement. 53 Art. 3 of the Proposal.

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scope of the forum commissi delicti under Art. 7 para. 2 of the Regulation. It would be possible, for instance, to sue before the UPC a defendant domiciled in the US or in Japan for infringements of a European patent committed in the territory of a contracting Member State. Apparently, the jurisdiction of common courts is designed in even broader terms than the Commission had envisaged for the recast in general. Whereas a basic feature of the 2010 proposal was the application of heads of jurisdictions established for intra-EU disputes to defendants domiciled in third countries, no such extension was envisaged for the consolidation of proceedings.54 By contrast, since Art. 71b para. 2 does not provide for any exception, Art. 8 of the Regulation should also apply regardless of domicile. Nevertheless, although Art. 71b para. 2 refers to Chapter II without any express exception, it is obvious that some of the grounds of jurisdiction contained therein are not applicable to a common court. This is the case for Art. 6 para. 1, which refers to national law for the purpose of determining the jurisdiction of national courts vis-à-vis defendants domiciled in third States.55 In addition, Art. 4 para. 1 of the Regulation obviously cannot apply to defendants domiciled in third States, since domicile in a Member State is the very connecting factor used in that provision.56

III. The special rule of extraterritorial jurisdiction applicable to third-country domiciliaries under Art. 71b para. 3 of the Regulation Even if the defendant’s domicile in a Member State no longer determines, according to Art. 71b, the outer limits of the harmonized heads of jurisdiction, whether a defendant is domiciled in a Member State or in a third country remains relevant. In addition to grounds of jurisdiction available against defendants domiciled within or outside the EU alike, Art. 71b also

54 Curiously, Art. 6 para. 1 of the Commission proposal departed from the straightforward extension technique followed for the other heads of jurisdiction, requiring for consolidation to take place that the co-defendant be domiciled in a Member State. This would have paradoxically resulted in treating EU-domiciled defendants worse than defendants domiciled in third countries (see Gaudemet-Tallon, ‘La refonte du Règlement Bruxelles I’, in Douchoy-Oudot and Guinchard (eds), La justice civile européenne en marche (2012) 23 (26); Weber, ‘Universal Jurisdiction and Third States in the Reform of the Brussels I Regulation’ (2011) 75 RabelsZ, 623 (628)). 55 Mankowski in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/ EuIPR Vol. 1 (2015) 1282. 56 Ibid., 1283.

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provides for a special rule applicable exclusively to third-State domiciliaries. According to Art. 71b para. 3, which arguably represents the most interesting novelty introduced by Regulation No 542/2014, where the UPC has jurisdiction over a defendant domiciled in a third State in a patent infringement case, if the infringement gives rise to damage within the EU the Court may also exercise jurisdiction in relation to damage arising outside the Union from the same infringement. This extraterritorial rule of jurisdiction is subject to two further conditions. The first is the presence of property belonging to the defendant in a Member State party to the UPC Agreement. The second is the existence of a sufficient connection between the dispute and the State where the property is located. The provision pursues the objective – commendable in itself – of concentration of claims arising from the infringement of the same patent.57 Nonetheless, it goes well beyond tort jurisdiction under Art. 7 para. 2 of the Regulation. Art. 71b para. 3 amounts to the creation of a rule of extraterritorial jurisdiction and to a rejection of the “mosaic approach” established by the CJEU in Shevill,58 for the purpose of establishing the UPC as a patentee-friendly venue.59 As any rule unilaterally regulating jurisdiction over foreign domiciliaries, it entails the risk that a foreign court may refuse to recognize a judgment rendered on this basis.60 However, the presence of property within the Union appears precisely instrumental in ensuring that a judgment awarding damages for the infringement, once rendered by the UPC, can be successfully enforced.61 The wording of Art. 71b para. 3 of the Regulation gives rise to some interpretative uncertainties. First, it is not entirely clear whether this provision is intended to apply to infringements occurring within or outside the

57 Marongiu Buonaiuti, supra fn. 49, 279. 58 Case C-68/93, 07.03.1995, Fiona Shevill v Press Alliance, ECLI:EU:C:1995:61. 59 De Miguel Asensio, supra fn. 51, 879; Luginbuehl and Stauder, ’Application of Revised Rules on Jurisdiction under Brussels I Regulation to Patent Lawsuits’ (2015) 10 JIPLP 135 (138); Heinze, ‘Unitary intellectual property rights and jurisdiction’, in Basedow, Rühl, Ferrari and De Miguel Asensio (eds), supra fn. 47, 1792, 1795. 60 Mankowski, supra fn. 41, 338; Marongiu Buonaiuti, supra fn. 49, 279. 61 Honorati, supra fn. 38, 18. UPC decisions are immediately enforceable in all EU Member States. For contracting Member States, this follows from Art. 82, paras 1 and 3, of the Agreement, whereby they are equated to domestic judgments of the State of enforcement. According to Art. 71d para. 1 subpara a of the Brussels Ia Regulation, enforcement in the non-contracting EU Member States of judgments given by a common court is regulated by the general provisions on recognition and enforcement under Chapter III (Artt. 36–57).

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EU. Whereas the wording “to damage arising outside the Union from such an infringement” would seem to support the first view, the provision’s drafting history points to the opposite interpretation. In the original Commission’s proposal, it was conceived of in much broader terms – not as an ancillary, but as a self-standing ground of jurisdiction based exclusively on the location of assets and the existence of “sufficient connection” with any contracting Member State. The explanatory memorandum, where the Commission observed that this rule would grant the UPC “jurisdiction visà-vis a Turkish defendant infringing a European patent covering several Member States and Turkey”,62 suggests that its purpose was to cover infringements occurring in third countries. Whereas the provision was subsequently amended, and its scope significantly reduced, its rationale arguably remains the same.63 Secondly, the wording “the court … may exercise jurisdiction” could be seen as indicating that the UPC enjoys discretion in the application of this rule. This would be a striking novelty. It has been argued that granting the UPC discretion in deciding whether or not to adjudicate on the damage arising in a third State would come very close to introducing the principle of forum non conveniens into the Regulation, which notoriously does not otherwise permit discretion in the application of jurisdiction rules. 64 However, it is unlikely that the EU legislature intended to introduce such a high degree of flexibility. It is perhaps more appropriate to interpret this provision as merely indicating that the exercise of jurisdiction is made conditional upon certain criteria being met. It could therefore be read as a reference to the requirements set out in the second subparagraph of Art. 71b para. 3, namely the location of property in a Member State party to the agreement establishing the common court, and the existence of a sufficient connection between the dispute and the Member State where property is located. These conditions in turn require further clarification: Is any property belonging to the defendant, no matter how small, sufficient to trigger the jurisdiction of the common court? When should a connection be deemed “sufficient”? Whereas Art. 71b para. 3 of the Brussels Ia Regulation answers neither question, recital 7 of Regulation No 542/2014 offers some guid-

62 Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU), No 1215/2012, p. 7 (emphasis added). 63 Véron, ‘Le règlement (UE) n° 542/2014 modifiant le règlement Bruxelles I (refonte) concernant les règles applicables à la juridiction unifiée du brevet et à la Cour de justice Benelux’ (2016) JDI 523 (538). 64 Ibid., 539.

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ance. It states that the value of the property in question should not be insignificant and should be such as to enable at least partial enforcement of the judgment. In view of its extraterritorial character and considering the widespread skepticism towards heads of jurisdiction based on the location of property, especially in the context of intellectual property litigation,65 this rule has been criticized for not explicitly requiring proportion between the value of the property and the value of the claim,66 although perhaps it could be deemed implicit in light of the criteria set out in recital 7. Additional controversial issues arise as regards the scope of application of this new jurisdictional rule. The EU legislature seems to have overlooked that a common court is not necessarily a court common to all Member States, and that the UPC indeed is not. Therefore, the attempt to extend the scope of protection by inserting an ancillary ground of jurisdiction leads to a paradoxical result: Whereas Art. 71b para. 3 empowers the UPC to exercise extraterritorial jurisdiction over defendants domiciled in third countries, its wording makes clear that this rule does not operate visà-vis defendants domiciled in Member States which are not parties to the agreement establishing the common court.67 Moreover, since it refers to “damage arising outside the Union”, it does not grant to the UPC competence to adjudicate on damage arising in Member States not participating in the UPC, such as Spain or Poland. A further limit to the actual scope of application of the rule may derive from the lack of coordination with the Lugano Convention, where no similar rule exists.68 According to the UPC Agreement, the international jurisdiction of the UPC is determined by the Brussels Ia Regulation and by the Lugano Convention. By virtue of the latter’s Art. 64, whenever the defendant is domiciled in a non-EU Member State party to the Convention, the jurisdiction rules of the Lugano Convention apply and not those of the Regulation. This provision, which clearly reflects concerns over the possible application of exorbitant bases of jurisdiction against defendants domiciled in third countries that are contracting parties to the Convention,

65 De Miguel Asensio, supra fn. 51, 882, citing in support the rejection of location of property as an adequate ground for jurisdiction in the sets of principles drafted by the European Max Planck Group on Conflict of Laws in Intellectual Property (CLIP Principles on Conflict of Laws in Intellectual Property) and the American Law Institute (ALI Principles – Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes). 66 Marongiu Buonaiuti, supra fn. 49, 280. 67 Véron, supra fn. 63, 539. 68 De Miguel Asensio, supra fn. 51, 873–874; Véron, supra fn. 63, 543–544.

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curbs the ability of the EU legislature to unilaterally extend the jurisdiction of Member States’ courts beyond the limits commonly agreed upon in the latter instrument. Since the UPC’s jurisdiction is determined in accordance with the Lugano Convention, the rule laid down in Art. 71b para. 3 of the Regulation, which is alien to the Convention, will not apply to defendants domiciled in Iceland, Norway and Switzerland.69 It is therefore a rule of jurisdiction à géometrie variable not only within, but also outside the Union.

IV. The rules on provisional measures Lastly, it should be mentioned that the Regulation also grants the UPC jurisdiction on provisional – including protective – measures. Art. 71b para. 2, second sentence, provides that the UPC shall have jurisdiction to issue provisional measures “even if the courts of a third State have jurisdiction over the substance of the dispute”. The wording of this provision sounds familiar, since it mirrors Art. 35 of the Brussels Ia Regulation. There is, however, a fundamental difference between those provisions: Art. 35 is intended to apply to intra-EU disputes only. By contrast, Art. 71b para. 2 is meant to apply also to cases where a court of a third country has jurisdiction over the merits and is therefore exorbitant.70 It is also noteworthy that the provision does not indicate what provisional measures could be adopted and based on what conditions. Art. 35 of the Regulation refers, for that purpose, to the law of the forum Member State, but that option would obviously be precluded for common courts. Although the provision contains no reference to the agreement establishing the court, it should be deemed implicit.71

69 Véron, supra fn. 63, 543. 70 Marongiu Buonaiuti, supra fn. 49, 282–283. 71 Mankowski, supra fn. 41, 337; Marongiu Buonaiuti, supra fn. 49, 283. The UPC Agreement regulates interim measures extensively (Artt. 58–62).

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D. The UPC’s jurisdiction as a model? Universalization at the price of fragmentation In light of the analysis of the rules on the international jurisdiction of the UPC, it is worth asking whether they represent a model for the possible revision of the Brussels Ia Regulation. Compared to the original outlook of the Recast, Regulation No 542/2014 introduced some surprising innovations. The abandonment of the traditional partition between intra-EU and extra-EU cases based on the defendant’s domicile bears remarkable resemblance to the 2010 Commission proposal, which may have provided a source of inspiration to the drafters. For sure, the provisions on the jurisdiction of common courts do not fit seamlessly within the basic scheme of the Regulation.72 This deviation is not comparable with the one resulting from Artt. 24 para. 4 and 25 of the Regulation, whose universal application is justified by the purpose of protecting a weaker party in specific contractual relationships. Perhaps unwittingly, the adoption of Regulation No 542/2014 could therefore provide an incentive for further extension of the scope of harmonized heads of jurisdiction in the future. But do the new provisions on the jurisdiction of common courts offer a sensible model, one that would deserve to be followed in the review of Brussels Ia more generally?

I. Regulation No 542/2014 and the precedent of the 2010 Commission proposal: a moderately conservative approach to the universalization of jurisdiction rules From the viewpoint of the legislative technique chosen, the viability of the solutions retained in Regulation No 542/2014 for a general overhaul of jurisdictional rules in civil and commercial matters depends on what is considered the most adequate method for regulating jurisdiction in respect of situations connected with third countries. In principle, different way exist to achieve this objective. Harmonized rules may be semi-universal,73 as in the Brussels IIa Regulation, where, although the territorial scope of application of the Regulation is not limited by any connecting factor, Artt. 6 and 7 permit subsidiary recourse to national jurisdiction rules where no

72 Mankowski, supra fn. 41, 336. 73 Pataut, ‘The External Dimension of Private International Family Law’, in Cremona and Micklitz (eds), Private Law in the External Relations of the EU (2016) 119.

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other relevant connecting factor is located in a Member State. Alternatively, the harmonized heads of jurisdiction may fully apply erga omnes, as in the Maintenance and Successions Regulations, which establish a complete and close system excluding any reference to national law. Alternative methods may also be chosen as regards the way of achieving universalization.74 This may either be based on the mere extension of jurisdiction rules drafted for intra-EU cases – as Italian law does, unilaterally expanding the scope of heads of jurisdiction harmonized at EU level to defendants domiciled in third countries without providing for any additional rules75 – or be achieved by setting out an entirely different set of uniform rules designed to deal specifically with extra-EU disputes. The new Art. 71b of the Brussels Ia Regulation follows a middle way, similarly to the Commission’s 2010 recast proposal. It extends the application of Chapter II of the Regulation to defendants domiciled in third States, but also adds special rules for the operation of common courts within the global space. In particular, the choice of the location of property as a connecting factor appears partially inspired by the 2010 proposal. Yet, the rules on UPC jurisdiction also display some features which were not present in the recast proposal, most notably the addition of a special rule of jurisdiction on claims for damage arising outside the EU.

II. Variable geometry rules within the EU: the consequences of recourse to an unprecedented pattern of differentiated integration If in respect of theoretical models of universalization, the legislature has resorted to a relatively conservative approach, the high degree of differentiation allowed within the patent system is a novelty and seems to pose some fundamental problems of consistency and legal certainty. Admittedly, differentiated integration is a common feature in the context of judicial cooperation in civil matters: Not only do Denmark76 and Ireland77 – as did the UK before Brexit – enjoy an opt-out from legislation adopted in the Area of Freedom, Security and Justice, but judicial cooperation has also proven

74 Bonomi, ‘The Opportunity and Modalities of the Introduction of erga omnes Rules on Jurisdiction’, in Malatesta, Bariatti and Pocar (eds), supra fn. 4, 149 (155–160). 75 Art. 3 para. 2 of Italian Statute on Private International Law, Law No 218 of 1995. 76 Protocol (No 22) on the position on Denmark. 77 Protocol (No 21) on the position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice.

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a fruitful terrain for enhanced cooperation.78 However, the degree of complexity achieved by the architecture of the EU patent system is unprecedented.79 It results from the combination of enhanced cooperation for the adoption of the Regulations on the European patent with unitary effect80 and an international agreement for the establishment of the UPC. Those instruments are envisaged as complementary to one another, yet their subjective scopes are not fully coincident. Whereas Spain, Poland and Croatia are not signatories to the UPC Agreement, Regulation No 1257/2012 has a slightly broader scope, since Poland participates in the enhanced cooperation. The fact that part of the substantive legal regime of the unitary patent is contained in the agreement further complicates the scenario. In addition, the establishment of the UPC through an international agreement implies a renunciation to the immediate and uniform application of the relevant legal regime even among signatories. Unlike an EU regulation, which even if adopted under enhanced cooperation would apply uniformly in all participating Member States without the need for the adoption of any internal measures, the agreement requires ratification by the contracting States. In order to facilitate its entry into force, Art. 89 of the UPC Agreement does away with the requirement of unanimous ratification, providing that the agreement shall enter into force after the deposit of the thirteenth instrument of ratification, including the three Member States with the most European patents in effect in 2012. From that point in time, its geographic scope would expand over time as long as more contracting parties complete the ratification process. Finally, fragmentation is further exacerbated by a complex transitional regime including the right for patent holders to opt-out from the UPC exclusive competence during the transitional period.81 Not only would the scope of application of the agreement continue to change, for some time yet, according to the pace of ratifications, but even within the circle of contracting parties, differences would continue to exist for several years. 78 See Regulation (EU), No 1259/2010; Regulation (EU), No 2016/1103; Council Regulation (EU), No 2016/1104. 79 Honorati, supra fn. 38, 4. 80 Regulation (EU), No 1257/2012; Regulation (EU), No 1260/2012. As is well known, the reason for resorting to enhanced cooperation was disagreement over the language regime of the unitary patent. See Lamping, ‘Enhanced Cooperation – A Proper Approach to Market Integration in the Field of Unitary Patent Protection?’ (2011) 42 IIC 879 (901–902). 81 Art. 83 para. 3 of the UPC Agreement. On the interpretative uncertainties concerning the limitation of the exclusive jurisdiction of the UPC during the transitional period, see Luginbuehl and Stauder, supra fn. 59, 139–141.

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As a result, the boundaries between “internal” and “external” space are drawn differently than for most EU measures. With regard to the jurisdiction of the UPC, the “external” sphere encompasses not only third countries, but also those Member States which have not (yet) ratified the agreement establishing the new court. However, since differences still exist between the two external spheres – that of the non-contracting Member States and that of the third countries – the dichotomy between “internal” and “external” situations is replaced by three concentric circles . This distinction has important consequences on the jurisdiction of the UPC. The Court could exercise jurisdiction against defendants domiciled in non-contracting Member States based on grounds listed in Chapter II of the Regulation, such as, for instance, tort jurisdiction under Art. 7 para. 2. This follows from the straightforward substitution rule under Art. 71b para. 1, whereby the UPC is competent where a national court of a contracting Member State would otherwise have been competent under the ordinary rules.82 However, unlike for defendants domiciled in a contracting Member State, the UPC jurisdiction here would not be exclusive, but concurrent with that of the national court of the defendant’s domicile. By virtue of Art. 71b para. 2, which extends their scope of application regardless of the defendant’s domicile, jurisdiction rules under Chapter II also apply where a defendant is domiciled in a third State. However, the additional extraterritorial rule under Art. 71b para. 3 only applies to defendants domiciled in third States, and only in relation to “damage arising outside the Union”. Consequently, it grants the UPC jurisdiction neither over defendants domiciled in a non-contracting Member State in respect of damage arising in a third country, nor over defendants domiciled in third countries in relation to damage arising in a non-contracting Member State. For instance, an alleged infringer domiciled in Spain could be sued before the UPC for damage arising in a contracting Member State, but the plaintiff wishing to recover the damage allegedly suffered in Spain would have to file a separate action in a Spanish court.83 Limits to party autonomy are another case in point. Whereas exclusive fora under Art. 24 of the Regulation, including the forum of the Member State of registration in respect of actions concerning the registration or validity of patents, are not subject to derogation, Art. 33 para. 7 of the UPC Agreement provides for a broader degree of party autonomy, permitting agreements allocating the relevant competence to any UPC division.

82 Honorati, supra fn. 38, 14. 83 Véron, supra fn. 63, 539.

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Whereas this option can be justified in the context of a unitary jurisdiction,84 the consequence is that the effects of a prorogation agreement will vary depending on whether the UPC or a national court has jurisdiction. Therefore, at least as regards their geographic scope, the new rules on the jurisdiction of common courts can hardly be viewed as the embodiment of a coherent model. Regulation No 542/2014 provides for a degree of flexibility that may undermine legal certainty. Admittedly, the establishment of a unified court reduces the overall fragmentation which currently characterizes patent litigation, entrusted to a plurality of national courts dealing with national titles. Yet, this objective is achieved at the price of modulations, which highly increase the complexity of the system and may still seriously limit its ability to ensure uniform patent protection. 85 As a consequence of differentiated integration and of the intricate regime for the transitional period, the UPC will not be the sole court competent to adjudicate patent dispute in Europe. It will have to share this task not only with the domestic courts of contracting parties to the European Patent Convention (EPC) which are not EU Member States, but also with the courts of Member States not participating in the enhanced cooperation or which have not (yet) ratified the UPC Agreement.86 In this respect, the UPC experiment and Regulation No 542/2014 stand as powerful reminders that international civil procedure – and private international law more generally – may not be the ideal terrain for differentiated integration87 and that recourse to international agreements among Member States as an alternative to EU harmonization comes with considerable shortcomings.88

84 Erauw, ‘Relación entre el Acuerdo sobre el Tribunal de la patente unificada europea y el nuevo reglamento de Bruselas I sobre competencia y reconocimiento’ (2013) AEDIPr 101 (113). 85 Ullrich, ‘The European Patent and Its Courts: An Uncertain Prospect and an Unifinished Agenda’ (2015) 46 IIC 1. 86 De Miguel Asensio, supra fn. 51, 875–876. 87 For critical remarks regarding the suitability of enhanced cooperation to harmonize conflict of laws, see Kuipers, ‘The Law Applicable to Divorce as a Test Ground for Enhanced Cooperation’ (2012) 18 ELJ 201 (212–216). 88 For a comparison between those techniques see already I.E. Schwartz, ‘Voies d’uniformisation du droit dans la Communauté européenne: règlements de la Communauté ou conventions entre Etats membres?’ (1978) JDI 751; more recently, Thym, ‘Competing Models for Understanding Differentiated Integration’, in de Witte et al. (eds), Between Flexibility and Disintegration. The Trajectory of Differentiation in EU Law (2017) 28 (49–52); de Witte, ‘An undivided Union? Differentiated integration in post-Brexit times’ (2018) 55 CMLR 227 (243–244).

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III. Variable geometry rules vis-à-vis the outer world: the limits of a purely unilateral approach Besides the problems faced within the inner circle of contracting Member States (due to the transitional arrangements) or between the inner and the intermediate circle of non-contracting Member States, further difficulties arise in relation to third States. In this respect, the lack of coordination with international instruments, notably the Lugano Convention, is a source of constraints whose importance might have been underestimated. According to Art. 31 of the UPC Agreement, the international jurisdiction of the UPC is determined by the Brussels I Regulation and by the Lugano Convention. Regulation No 542/2014 has managed to accommodate the UPC within the framework of the Regulation, but no similar attempt has been made in respect of the Lugano Convention. This objective is clearly more difficult to achieve, since it obviously requires negotiation with the third countries that are contracting parties to the Convention. This lack of coordination, which adversely affects the uniform application of provisions establishing the UPC jurisdiction vis-à-vis defendants domiciled in third countries, is not the consequence of the choice of a particular type of instrument, but the inevitable effect of a purely unilateral approach in designing the scope of application of rules of jurisdiction. With a view to a future revision of the Brussels Ia Regulation, such difficulties suggest that whilst a plurality of methods may serve the purpose of defining the scope of jurisdiction rules in the global space, they should not necessarily be seen as alternative but rather, at least to a certain extent, as complementary.89

E. Conclusion The new rules concerning the jurisdiction of courts common to several Member States introduced into the Brussels Ia Regulation serve the limited purpose of accommodating the jurisdiction of the UPC within the EU judicial architecture. They are instrumental in the creation of a system of 89 Franzina, ‘L’universalisation partielle du régime européen de la compétence en matière civile et commerciale dans le règlement Bruxelles Ia: une mise en perspective’, in Guinchard (ed), Le nouveau règlement Bruxelles Ia (2014) 39 (50–51); Franzina, ‘The Interplay of EU Legislation and International Developments in Private International Law’, in Franzina (ed), The External Dimension of EU Private International Law after Opinion 1/13 (2017) 183 (190).

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patent litigation capable of overcoming the shortcomings currently ensuing from the territorially limited scope of patent rights and the fragmentation of fora for patent litigation. Although the new patent litigation system has not yet entered into force, Regulation No 542/2014 has already left an enduring legacy by incorporating into the scheme of the Brussels Ia Regulation provisions that extend the jurisdiction of common courts to defendants domiciled in third States. Unlike the provisions extending the scope of jurisdiction in relation to consumer and employment disputes or based on prorogation agreements, which are justified by specific concerns, the rules relating to the jurisdiction of common courts are inspired by a universal approach visibly at odds with the basic scheme of the Regulation. Perhaps unwittingly, the ensuing lack of harmony may provide support for revising the scope of jurisdiction rules for civil and commercial disputes on a broader scale, adding a further argument in favor of overcoming the limitation of harmonized heads of jurisdiction to defendants domiciled in the EU. However, as this analysis has demonstrated, the provisions regulating the jurisdiction of common courts do not provide a suitable model when it comes to the actual design of jurisdiction rules having a universal scope of application. Indeed, universalization has been achieved at the price of a high degree of fragmentation that hampers the uniform application of the relevant rules and jeopardizes the goal of legal certainty. Fragmentation within the EU can be avoided as long as a recast regulation does not replicate the highly creative scheme of differentiated integration implemented in the EU patent package. By contrast, a certain degree of fragmentation concerning the operation of rules on jurisdiction in respect of the outer world is the inevitable consequence of a purely unilateral approach to designing rules applicable vis-à-vis third-country domiciliaries.

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Lis Pendens in the Brussels Ia Regulation with Regard to Third Countries* Luboš Tichý, Prague

Abstract The purpose of this contribution is to provide a brief analysis of the rules on lis pendens (litispendence) under the Brussels Ia Regulation and to examine their application to third countries. It presents, in a comprehensive way, the structure of international lis pendens and its resolution under the Regulation, then deals with issues relevant to the application of the lis pendens provisions of the Brussels Ia Regulation to third countries and tries to solve some of the most pressing issues de lege lata and de lege ferenda.

Keywords Lis pendens – Brussels Ia Regulation – third country – parallel proceedings – priority principle – decline of jurisdiction – application in time – abuse of the process – identity of the proceedings – subject matter of the proceedings – legal and factual bases of the claim – the core issues doctrine – proper administration of justice.

A. Introduction: purpose and subject The purpose of this contribution is to provide a brief analysis of lis pendens, taking into account its regime under the Brussels Ia Regulation,1 and to examine the conditions for its accessibility to third countries.

* The author acknowledges with thanks not only linquistic improvements of Tobias Endrich, Munich. 1 Eg. Magnus in: Magnus and Mankowski (eds), Brussels I bis Regulation (2nd edn, 2016), 18 f.

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Interestingly, it is precisely the question of litispendence and parallel proceedings for which the Brussels Ia Regulation (Articles 33 and 34)2 has partly “opened” the system towards third countries, although the result reached in the final text of the Regulation is more modest than the original proposal for the recast Regulation of the European Commission3. As a result of Art. 33 of the Brussels Ia Regulation, a unilateral (“one-sided”) regime of lis pendens was achieved in relation to a limited number of court proceedings in the jurisdictions of non-EU Member States. To start with, it seems appropriate to give some general consideration to possible parallel proceedings in different countries, i.e. proceedings that run concurrently and deal with the same subject matter in relation to the same persons. Should such proceedings lead to separate, though identical decisions, this would mean dublicate work and extra costs for the court systems and the parties. More seriously, truly negative impact would be caused by different, irreconcilable decisions. It therefore seems reasonable to minimize such negative effects. Enabling non-EU countries (third countries) to participate in the Brussels system of lis pendens, in particular under the Brussels Ia Regulation, can take place in two ways. The first solution is the existing approach of Articles 33 and 34 of the Regulation, which takes into account parallel proceedings in third countries from the point of view of a court in a Member State. This is a ‘one-sided’ solution, as it addresses only proceedings before courts in the EU4. The second possible solution lies in the ‘equalization’ of proceedings in third countries with proceedings before the courts of EU Member States on the basis of the participation of third countries in the Brussels system. In other words, this solution assumes the transfer of the ‘one-sided’ solution of the plea of lis pendens into a bilateral regime, i.e. into Art. 29 of the Regulation, including the repeal of Art. 33. An opening of the Brussels system into a bilateral regime (even if only for lis pendens purposes) would require taking into account the risks associated with its implementation. Such risks arise from the different quality of judicial proceedings in the EU Member States and some third countries,

2 Regulation (EU), No 1215/2012, Art. 33 and 34. 3 See Articles of the Proposal COM (2010), 748 fin, see https://eur-lex.europa.eu/Lex UriServ/LexUriServ.do?uri=COM:2010:0748:FIN:EN:PDF (last access at: 29.10.2020). 4 One of the encouraging factors was CJEU Ruling Case C-281/02, 01.03.2005, Andrew Owusu v N.B. Jackson, [2005] ECR I-1383. See also similar position held by High Court of England and Wales in Case No 2011–1406, 03.04.2012, Ferrexpo AG v Gilso Investment Ltd. [2012] EWHC 721.

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and undoubtedly also from the differing quality of decision-making. Giving effect to a foreign process means treating it as conceptually and qualitatively equivalent to domestic proceedings. This generally presupposes respect for the rule of law on both sides and more specifically, the fulfillment of certain requirements of due process and qualified decision-making on the merits. Only then can I consider the achievement of inherently compatible, potentially acceptable decisions. It is therefore necessary to consider possible consequences from the use of lis pendens and to create adequate instruments, which may include the recognition of decisions, considering a further opening of the Brussels system and extending the litispendence provisions of the Brussels Ia Regulation to third countries, to whatever extent and in whatever way. However, the purpose of this paper is not the question of the opening of the Brussels system in general. I will merely try to assess possible risks in connection with an opening of the Brussels system for lis pendens purposes, trying to acquire a deeper insight into some of the key elements of the very notion of parallel proceedings, including the solution of problems linked with this issue. That is why I will aim to analyse its key elements – the subject matter of the proceedings, the identity of its participants, the time moment of lis pendens, as well as problems related to the subject matter of the proceedings, their personal and temporal scope, especially from the point of view of two categories: the abuse of the process and the right of access to justice (right to due process). Firstly, I present in a comprehensive way the structure of lis pendens and the tools of its resolution (sub B). I then deal with issues that are relevant to the opening of the Regulation in relation to third countries with regard to the phenomenon of lis pendens (sub C.). In the next section (sub D.) I analyse the notion of identity of proceedings as a basis for possible solutions to the problem of parallel proceedings in all its dimensions, both with regard to the current law in the Brussels Ia Regulation and to the further opening of the Brussels system to third countries. Finally, I try to solve some issues of lis pendens (sub E.), summarize the findings I have come up with and present proposals for possible improvements (sub F.).

B. Parallel proceedings According to the traditional concept, once an action is commenced in court, the obstacle (plea) of lis pendens arises. It excludes another proceeding on the same subject matter if the parties of both proceedings are identi-

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cal. The objective of the obstacle of lis pendens has four dimensions (scopes).

I. Material scope The definition of the material (substantive) scope of the two concerned proceedings is crucial for the obstacle of lis pendens. In order to determine which proceedings are ‘parallel’ for the purpose of litispendence, I use the concept of ‘the same or a similar effect’ of the proceedings in question. Such effects that are the same or similar are scrutinized on the basis of the essential elements of a proceeding, which are, according to the currently prevailing concept, • the claim, which is manifested above all in the petition of the action, • and the factual situation on which this claim is based. As a proceeding is initiated with a certain interest, a desire to achieve a certain result, this “interest”5 can also be considered a basic element for defining the identity of the proceeding. There are different ways of determining the standards of definition of the material of scope of a proceeding and of parallelism. This has consequences for the probability of the existence of parallel proceedings for purposes of lis pendens. The more precisely and restrictively the above-mentioned elements of the material scope of the proceeding are defined,6 the less likely is the occurrence of parallel proceedings for purposes of lis pendens. On the other hand, the smaller the number of elements, the higher is the likelihood of occurrence of parallel proceedings. In this respect, I can distinguish between a ‘proper’ obstacle of lis pendens and an ‘improper’ (enlarged) obstacle of lis pendens, as set out in Articles 30 and 347 of the Brussels Ia Regulation. According to these provisions, proceedings that are pending at the same time and are linked in content but do not fulfil the requirement of Article 29 are called ‘related proceedings’, i.e. proceedings which are interrelated but not identical. Obviously, the wider the definition of ‘parallel proceeding’ for purposes of lis pendens is, the greater are

5 See Althammer, ‘Streitgegenstand und Interesse’ (2012), 587 et seq., 704 et. seq., 759. 6 This applies also vice versa. See Schack, Internationales Zivilverfahrensrecht (7 th edn, 2017), 317, mn 849. 7 In this paper I do not deal with so-called improper lis pendens and don´t analyse Regulation (EU), No 1215/2012, Art. 30 and 34.

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the chances of conflicting, though not necessarily incompatible decisions. This depends on the relevant regulation. 8 Then there is a greater likelihood of cost saving and, at the same time, a higher probability of restricting access to justice. If, for example, the first proceeding is later terminated, or if the first action is dismissed at the outset, no costs are incurred. However, there is a risk that delays can occur in the previously initiated proceedings and, as a consequence, a delayed decision does not fully meet its purpose. Alternatively, decisions in proceedings with serious deficiencies cannot be accepted in the second jurisdiction. If this were not the case, the applicant in the suspended proceedings would not be able to obtain justice.

II. Personal scope The personal scope of lis pendens is to identify individuals as the defining features of this phenomenon. The more formalistic the approach used is, the narrower is the definition of lis pendens and, hence, the higher is the possibility of opposing or incompatible or inconsistent decisions and vice versa. If, for example, an insurer who brings an action for an insured person were considered to be a person different from the insured person (for purposes of lis pendens), and therefore such proceedings were not considered to be the same procedure as a previously initiated procedure in which the insured party acts as a party, this would entail the risk of incompatible decisions.

III. Temporal scope The temporal effect of lis pendens determines which of the parallel proceeding has priority in time. The relevant moment may be the filing of an action or the service of the action to the defendant or the court's decision to accept its jurisdiction or to decline it. Consideration can also be given to the moment of a change to the action as a decisive moment for the obstacle (plea) of lis pendens.9

8 See infra C. I. 9 See infra F.IV.

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IV. Territorial scope In national circumstances the question of lis pendens is known and its solution is part of the standard equipment of national civil procedures. In such cases it is referred to as national lis pendens. In this paper, however, I deal with international (cross-border) lis pendens which exists in the case of (at least) two parallel proceedings in courts of different countries.

C. Resolution of the parallelism of proceedings Part of the issue of lis pendens and its consequences is not only its definition but the legal issues caused by lis pendens as a whole including their resolution. Three basic possible approaches can be distinguished.

I. Basic approach Firstly, it is possible to ignore the existence of parallel proceedings. This approach has been common in the legal order of some countries.10 One can probably even say that most of the national legal orders do not acknowledge impacts of foreign lis pendens and therefore, in such countries, the case law does not deal with this question either. This is different from the well-established resolution of domestic (national) lis pendens, where the proceedings previously instituted in the same case constitute an obstacle to the continuation of proceedings, which were subsequently instituted. The second basic approach to the resolution of lis pendens is based on the principle of priority.11 This approach has been chosen by the Brussel Ia Regulation, further developing the concept already developed by the Brus-

10 This was the situation in France, see Batiffol, Traité elementaire de droit international privé (1959) 855 et seq. and Cass. Civ. of 21.03.1950 (Rev. crit. 1951, 666). Also, the national legal orders of Scandinavian countries and countries of Benelux ignore the foreign (cross-border) lis pendens. More on this see Bäumer, Die ausländische Rechtshängigkeit und ihre Auswirkungen auf das internationale Zivilverfahrensrecht’ (1999), 56 f. 11 See the recital no 22 of the Preamble and Schack, Internationales Zivilverfahrensrecht (7th edn, 2017), 316, mn 846. Cf. also See the questions posed by Gebauer, ‘Lis Pendens, Negative Declaratory-Judgment Actions and the First-in-time Principle’, in Gottschalk et al (eds), Conflict of Laws in a Globalized World (2007), 89, 93 et seq.

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sels Convention of 1968. On this basis it is possible to distinguish between two possible consequences of lis pendens; a stay of proceedings (by the secondly seized court) or the second court declining its jurisdiction. The principle of legal certainty seems at first, to favor an approach of discontinuing the second proceeding. However, the court to which a proceeding has been brought subsequently should not necessarily be deprived of the possibility to continue its proceeding depending on how the proceedings earlier initiated are progressing or on the outcome of such proceedings. The rejection of the second action (decline of jurisdiction) can also take place after the earlier proceedings have been terminated, in view of the fulfillment of certain conditions imposed on a previously initiated proceeding with a foreign court. Thirdly, the domestic court may be required to resolve certain consequences of the foreign lis pendens or be given discretion when deciding to discontinue the proceedings and dismiss the action.

II. National and international solutions From the point of view of the territorial scope of the resolutions of lis pendens, it is possible to distinguish between purely domestic approaches, which unilaterally impose upon a domestic judge obligations in relation to parallel proceedings abroad, and internationally agreed upon arrangements or supranational regimes, such as the Brussels Ia Regulation. An example of an international but unilateral solution is the solution contained in Art. 33 of the Regulation, which binds only the courts of EU Member States and does not include any coordination with courts of non-EU countries.

D. Elements and tools for resolving the consequences of lis pendens Finally, when considering lis pendens, one has to analyse different instruments or technical aspects representing elements of lis pendens.

I. Time limitation First of all, it is desirable to define the time moment of lis pendens and to set a time limit for its solution. Lis pendens arises at the moment of the

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opening of a proceeding, which can be understood as the moment of service (lodging) of the action (“document instituting the proceedings”) or the later date of service of the action by the court to the defendant. The option of choosing between different courts in different countries includes the possibility of forum shopping. Restrictions should occur exclusively on the basis of the parties' agreement on jurisdiction or exclusive jurisdiction.

II. Definition of jurisdiction Obviously, the wider the possibility of parties to exercise their right to choose the jurisdiction, the higher is the likelihood of parallel proceedings.

III. Coordination and communication To resolve the problems of lis pendens and its consequences, the possibility or obligation of communication between the courts concerned or the coordination of this activity, including registers of proceedings, should be facilitated. I will deal with these issues in more detail in section H.

IV. Refusal of recognition The option of refusal of recognition of a foreign decision contributes to the resolution of the problems of lis pendens. Non-recognition may by be based on public policy, either for fundamental procedural defects or for substantive consideration. It is a question for discussion whether the lack of respect for domestic lis pendens should be considered a ground for nonrecognition on grounds of public policy.

V. Determining the prohibition of abuse of the process Determining this principle as a prerequisite for proceedings may affect the occurrence and consequences of parallel proceedings. I deal with this problem in more detail in section G.

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E. Requirements for opening the Brussels system of litispendence to non-EU countries Regulating impacts of cross-border lis pendens is one of the forms of judicial cooperation. Since the approach to this problem depends on the level of justice in different countries,12 it is politically sensitive. Its resolution in a particular case can have consequences for a decision on the merits and would thus provide evidence of an assessment of the fundamental right of due process and the provision of justice. In order to “recognize” a proceeding first seized in a third country before the court and to consider it as res alibi pendens vis-à-vis a later proceeding before a court in an EU Member State seized later, it is necessary that basic prerequisites for judicial cooperation on the part of that third country are fulfilled. In other words, such a third country must have a certain standard of functioning of the judicial system in order to create the necessary trust that is the prerequisite for reliance on this proceeding as a proper and fair proceeding. Even in this area some form of reciprocity is at play. An EU Member State, which meets a certain level of quality of the judicial system, assumes that this level of judicial quality also exists in a third country. If a third country does not fulfil these preconditions of judicial cooperation, either it cannot generally be considered as relevant for establishing of such a judicial cooperation or an EU Member State establishes mechanisms for recognition of foreign lis pendens which may lead to non-recognition of lis pendens in a third country in specific cases. In other words, an EU Member State behaves in a similar way as states that, under their national law, are not obliged to take foreign proceedings into account. Recognition of cross-border consequences of lis pendens requires a certain higher degree of functioning of international procedural law. A certain standard (quality) of a judicial system is analogous to respecting the fundamental rights13 under the concept of rule of law. It is, of course, a matter of the independence of courts, in particular, to comply with the essential procedural rules, including timely decision-making, and to guarantee an effective remedy system. However, it is also clear that some

12 Cf. Hess, ‘Unionsrechtliche Synthese: Mindeststandards und Verfahrensgrundsätze im acquis communautaire/Schlussfolgererungen für European Principles of Civil Procedure’, in Weller and Althammer (eds), Mindeststandards im Europäischen Zivilprozessrecht (2015), 221 et seq. 13 See Althammer, ‘Mindeststandards und zentrale Verfahrensgrundsatze im deutschen Recht’, in Weller and Althammer (eds), Mindeststandard im Europäischen Zivilprozessrecht (2015), 3 f.

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fundamental values, including the rule of law, are sometimes violated even within the European Union. For some unacceptable and disproportionate interference with the status of judges or with judicial proceedings, for example, infringement proceedings against Poland and Hungary have been initiated.14 The consolation for assessing the opening of the Brussels system to third countries is not the possibility of using the public policy clause as a ground for refusal of recognition of a foreign decision. Such instruments can serve more or less as a certain deterrent signal, but this 15 is not a resolution of the problem at hand. The guarantee of a functioning16 judicial system is a certain level of judicial (judiciary) potential. It assumes a number of factors of different nature and significance. Relevant is the position of the judge in society and the tradition of this position. The financial situation of judges can also contribute to this, as it demonstrates the prestige of this profession. The basis, however, is the standard of legal education and the care of judges in a broad sense, including their further training. The concept of cross-border lis pendens is an inherent part of the conception of the fundamental human right of a fair trial and the provision of justice. However, this basic legal concept has two sides. Confidence in a previously initiated process abroad means taking this case into consideration as an obstacle to a later domestic proceeding. This may, however, result in the violation of the right to a fair trial as a result of the stay of the proceedings if, ultimately, after the end of the proceedings abroad, it turns out that the foreign court did not respect the fundamental rights just mentioned. True, there are ‘tools’, which can help mitigate possible risks. One of these instruments is the stay of proceedings, which does not relieve the plaintiff of the possibility to continue the later proceeding after a certain period of time and even after a final decision has been rendered in the previously commenced foreign proceeding. Another effective instrument is a time limit for the court establishing its jurisdiction. The court should also

14 See Commission Recommendations No 2016/1374, OS L 217, 53 and 2017/146, OS L 22, 65, infringement proceedings of the European Commission against Hungary (Case C-286/12, 06.11.2012, European Commission v Hungary, ECLI:EU: C: 2012: 687) and the resolution of the European Parliament P8 T (2015) 0227 about a systematic threat to the principle of rule of law. 15 See „proper administration of justice“, e.g. CJEU Case C-116/02, 09.12.2003, Gasser v MISAT, ECLI:EU:C:2003:657, para. 41. 16 See „EU Justice Agenda for 2020 – Strengthening Trust Mobility and Growth within the European Union“ (COM (2014) 144 final of 11.03.2014.

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have a tool to have service affected on the defendant, since service is a prerequisite for the initiation of proceedings. The applicant's interest in the outcome of the proceeding in his action brought before the court is a criterion of the fairness of his action. It enables the judge, without explicitly prescribing a prohibition of abuse of the process, to dismiss an action, which she or he considers to be abusive. This reduces the risk of so-called torpedo law suits, which are often only aimed at blocking legitimate claims and are the manifestations of a tactical strategy of one of the parties. It can be stated that the less a certain third country is a reliable partner, the lower is the level of “duty” to recognize parallel proceedings before the courts in such a State as res alibi pendens towards proceedings instituted later in the second country.

F. Basic question: identity of parallel proceedings The definition of the identity of two pending proceedings is of crucial importance for the concept of lis pendens and its consequences. The key to this is to establish criteria on the basis of which the identity of one proceeding with others must be verified. In other words, it is an identity test. As already stated,17 the concept of lis pendens has several dimensions and within each of them there are identification criteria. They consist in the object of the proceedings (factual scope), the identity of the persons concerned and, therefore, the personal scope and ultimately the decisive moment (temporal scope) for the assessment of identity. The fact that there is some kind of territorial jurisdiction need not be analysed.

I. Principles (maxims) of law relevant to lis pendens The EU legislator has been guided in the Brussels Ia Regulation by some fundamental ideas, which also relate to lis pendens and which can be described as principles or maxims. Some are explicitly mentioned in the

17 See supra B.

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Regulation,18 others arise from the purpose of international civil proceedings and yet others are evident from the purpose of the Regulation itself.19 Three of them are considered relevant here, namely the principle of procedural economy,20 the principle of harmony in decision-making21 and the principle of access to justice.22 The purpose of regulating lis pendens consists in preventing two (and possibly more) concurrent parallel proceedings and in saving costs. These represent public costs related to the proceedings itself and its administration. At the same time, however, the costs of the parties' expenses are redundant. The costs relate not only to the proceeding itself, but frequently also to the enforcement of the court’s decisions. The ideal of the functioning of justice is compliance in decision-making even on a global scale. So, the regulation of lis pendens serves to exclude irreconcilable rulings and related procedural "races" to achieve decisions in the shortest possible time. A court deciding the case should have the best opportunity to obtain and examine the evidence so that the case can be decided within a reasonable period of time, which also prevents possible abuse of procedural rights. Identity of proceedings is defined on the basis of substantive, personal and temporal criteria. On the basis of these, it is possible to achieve different scopes of identity of proceedings. Then, the wider the identity is, the wider is the scope of proceedings, and the more effective is the lis alibi pendens (obstacle/plea of lis pendens). In practice, this means that “identity” understood in this way can affect diverse procedures. Anyone who uses the principle of priority in relation to the initiating of proceedings in one court may prevent a relatively wide range of similar actions and thus proceedings. This increases the probability of possible abuse, for example by a negative declaratory relief in relation to action for performance which will be contested later, and vice versa. On the other hand, the more narrowly

18 See “the proper administration of justice”, Regulation (EU), No 1215/2012, Preamble recital 24. 19 See, for example, Fentiman in: Magnus and Mankowski (eds), Introduction to Articles 29–30, mn 11–14, or more precisely Commentary on Articles 33–34, mn 11–16. 20 See ‘Procedural efficiency’ by Fentiman in: Magnus and Mankowski (eds), Art. 29–30 (n 26), that requires cooperation of courts in question. 21 This primarily means prevention of irreconcilable judgments. See Preamble recital 21, e.g. Fentiman in: Magnus and Mankowski (eds), Comments in Introduction to Art. 29–30, mn 11, 12. 22 See Fentiman in: Magnus and Mankowski (eds), Comments on Art. 29–34, Introduction to Art. 29–30, mn 25.

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the identity (scope) of the proceedings is defined, the higher is the possibility of negative consequences arising from making contradictory rulings, which should be prevented by the regulation of lis pendens.

II. Identity of the subject matter and its outcome–material scope In this passage, I deal only with some aspects of the subject matter, especially those which appear to be controversial or deserve some reassessment.

1. Subject matter of the proceedings (claim), its definition and characteristics The subject matter of the proceeding, as one of the building blocks not only of lis pendens, but of the civil proceeding itself, is the focus of theory and jurisprudence in all legal cultures. However, the efforts to define it lie within national procedure. In German procedural theory alone there are many different attempts of its definition. Some of these attempts aim to reach a general definition; other authors seek to define the subject matter of the proceeding for individual types of proceedings or types of actions. In essence, however, from a fundamental methodological point of view, it is possible to distinguish definitions that are based on certain features or elements of proceedings from definitions, which are called “functional” in nature and are based, for example, on the substance of the decision23, or in which functional elements such as the notion of interest play an essential role.24 From my point of view, concepts of the subject of proceedings, which have been developed within the framework of the international procedural law, especially those which serve as a tool for defining lis pendens and the solution of its consequences, are of particular relevance. The most important example is the ‘Kernpunkttheorie’ (can be translated as “core issue doctrine”), a concept developed largely by the European Court of Justice, in particular in the Tatry25 and the Moersk26 decisions. The key idea is that different claims are “the same” for lis pendens purposes if the actions are based

23 24 25 26

Schwab, Der Streitgegenstand im Zivilprozeß (1954), 73. Althammer, Streitgegenstand und Interesse (2012), 217 (218). Case C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 39. Case C-39/02, 14.10.2004, Moersk Olie & Gas v. de Haan en de Boer, ECLI:EU:C: 2004:615, para. 38.

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on an identical legal basis and have the same subject matter. The proper object matter of the proceeding is, according to the CJEU, the purpose of the action.27 There are a number of indicators defining a claim or the subject matter of a proceeding. At first glance, this signals a very obvious tendency to narrow the concept of the subject matter. Such an approach results in limiting the number of potentially identical subject matters of proceedings and thus in limiting the occurrence of lis pendens, also already explained above (see in B). It is true that the more detailed and precise the definition of the subject matter is, the lower the likelihood of the same actions and the proceedings in the same case. However, this assumption is not confirmed. The individual features of the subject matter tend to be understood relatively extensively,28 flexibly, if not vaguely, which ultimately results in a somewhat different understanding of the concept of the core of proceedings in the sense of the ‘Kernpunkttheorie’ The identity of the claims, the common subject matter of the proceedings must be interpreted broadly29, meaning that the claim or object to be ‘in the core’, i.e. essentially, identical. In other words, there need not be a full identity of the subject matter of the proceedings. This view of the subject matter of the proceedings is based on the premise that the purpose of the action and thus the proceedings at issue are decisive and, second, that the substance of the action is relevant and not its form. 30 This approach means that there are no distinctions and thus identical claims in rem or under the law of obligations, actions for performance. This leads, among other things, to the fact that a negative declaratory action can be blocked, meaning res alibi pendens to proceedings subsequently instituted by the action for performance. As a result, this may cause a certain crisis of the proceedings caused by so-called torpedo actions, especially in the field of industrial property, in the form of negative declaratory actions, which are intended to block claims for performance of the other party. In their majority, however, such proceedings were guided by unfair intentions, and thus meant an abuse of process, which will be discussed below.

27 Case C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 41. 28 Schack, Internationales Zivilverfahrensrecht (7th edn, 2017), 317, mn 849. 29 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015), Art. 29, mn 13. 30 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015), Art. 29, mn 14.

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2. Subject matter of the proceedings and criticism of some of its concepts The substantive dimension of defining the identity of the proceedings by defining their subject matter is of key importance, whereas the personal and temporal dimensions are not only less significant but also less problematic. Therefore, it is necessary to briefly address the most important theories of the subject matter of the proceedings, in particular the ‘core of the proceeding theory’ developed by the CJEU. I will focus on the procedural theories of the subject matter of the proceedings, as well as on the core theory and the theory of interest. Procedural theories were developed in response to the originally substantive law theory31 of the subject matter of a proceeding. The first of these theories defines the subject matter of the proceeding by a factual basis and a statement of a claim as the essential elements of the subject matter of the proceeding.32 Unlike this ‘two-part’ theory, the one-part procedural doctrine is based on only one element, namely the statement of claim. The first of them was expanded mainly in the Germanic legal family, but not only there. The statement of the claim and the factual basis as equivalent elements of the subject matter of a proceeding are the cornerstones of the definition, which can be applied to virtually all forms, and methods of proceedings.33 In order to avoid irreconcilable court decisions in different EU Member States, the CJEU developed the core issue theory by separating the concept of identity, i.e. same proceedings or same claims, from the concrete application, or the legal protection sought by the action. According to the CJEU, actions for the same claim cover all the proposals, which concern the same dispute based on a very wide range of facts.34 Thus, so far, the action for performance and the negative declaratory action, but also the action for performance and the action for determining the legal relationship, have the same subject matter. It is evident that the subject matter of the proceedings is not determined by the respective application, but by very pragmatically defined facts, so more proceedings may be concentrated in a single court.

31 32 33 34

Schwab, Der Streitgegenstand im Zivilprozeβ (1954). Nikisch, Zivilprozessrecht (1952). Rosenberg, Schwab, Gottwald, Zivilprozessrecht (2010), 552, 553. Case C-144/86, 08.12.1987, Gubisch Maschinenfabrik v Palumbo, ECR 4861; Case C-351/96, 19.05.1998, Drouot v CMI, ECR I-3075.

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The interest-based theory is based on the concept of the ‘interconnection of performance’35. Interconnection of performance is established if satisfaction of one of the claims means that there is no interest in satisfaction of the other one.36 Thus, the interest-based theory is, to a certain extent, similar to the core theory. It emphasizes less the purpose of preventing conflicting decisions, but focuses more on the interest of the parties. 37 However, the two key concepts of this theory, i.e. the relation of performance and interest, are very difficult to define. Therefore, considerable uncertainty arises in their application. Similar to the core theory, it tends to have a very broad understanding of the subject matter of the proceedings, and thus can serve to block access to justice, since, like the core theory, it allows for a relatively wide abuse of the process. Therefore, I assume that orientation on the statement of action and its factual basis as basic elements for defining the subject matter of the proceedings and hence, their identity, continues to be the best solution. An obstacle in the form of lis pendens is therefore invoked if the same subject matter at a time after the commencement of the proceedings is brought to another court.

3. Factual and legal basis of a claim It must be pointed out that even though the constituent characters of the subject matter are understood in a relatively flexible manner, they must all be identical, at least to some extent. In other words, a situation in which two or three features of the actions are identical while the other ones differ substantially cannot occur. Let me therefore focus foremost on the legal basis (in French “cause”) of the claim and the subject matter (in French “objet”)38 of the proceedings. I am going to illustrate the problem with examples. If the mother of a minor brings an action for her child on a maintenance obligation against its father before a court of one state (the first court), and thereafter she brings the same action before a local court in another state (the second court) in

35 36 37 38

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Erfüllungskonnexität. Althammer, Streitgegenstand und Interesse (2012), 404 f. Rosenberg, Schwab, Gottwald, Zivilprozessrecht (2010), 555. In French text of the judgment Case 144/86, 08.12.1987, Gubisch Maschinenfabrik v Palumbo, ECR 4861, para. 14; and Case C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 38, stands “même cause” and “même objet”. It is an original term developed by CJEU.

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her own name, both cases are about maintenance, but the claims have a different legal basis. Another example is an action seeking the payment for a loan, which is based on contract law in the first case, but in the second case comes out of a delictual breach and therefore becomes a matter of tort law. The question is whether these cases share the identical subject matter of the proceedings, or of the claim respectively, and therefore form the plea (objection) of lis pendens. Based on the CJEU’s approach,39 which considers actions for specific performance and negative declaratory actions as identical claims, I may tend to suggest that both cases represent parallel proceedings and therefore invoke lis pendens. In order to answer the question of the legal and factual basis of the claim, another dimension of the subject matter must be taken into account – the legal force (res judicata) of decisions on the merits. In my case, this means that a final judgment on contractual performance does not form an obstacle to an action based on a tort claim. All that is slightly complicated by the fact that the CJEU also considers a relevant legal act (rule of law)40 to be another constituent character of the subject matter or the claim respectively. In the case of a claim for repayment of a loan, the problem may be even more complicated, because a contractual claim may be subject to one legal order, while a tort claim may have to be solved by a different one. With full respect to the CJEU, this is only seemingly a complication. Regarding the subject matter, the legal basis of the claim (cause) is relevant. On the contrary, it is irrelevant by which legal order the legal relationship is governed, and which legal regulation creates specific rights and obligations. This is exclusively a question of substantive law. However, I still have not fully clarified the definition of the subject matter. There remains a need to address the issue of the factual basis of the claim.41 Let me admit that the factual bases of two different actions shall be the same, even though the legal bases are different (a contractual claim on the one hand, and a tort claim on the other) and some circumstances may have different legal significance in one or the other proceedings. They can be qualified differently. The problem, here, is the procedural legal aspect of the factual basis. Certain allegations of action may in the course of the proceedings prove to be false and, consequently, the facts described in

39 See e.g. Case 144/86, 08.12.1987, Gubisch Maschinenfabrik v Palumbo, ECR 4861. 40 See C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 39. 41 See the judgment Case C-111/01, 08.05.2003, Gantner v Basch, ECR 4207.

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the action may appear differently after the taking of evidence. The question is obvious: What is the decisive point for the assessment of the identity of parallel proceedings? Is it the factual situation described at the beginning of the proceedings in the action, or factual findings described in a decision on the merits? In fact, actions are dismissed mainly because their alleged factual bases have not been proved. Another problem is the question of standard of proof that Fentiman mentions in a different context.42 It is clear that the character of the subject matter grounded on the factual basis of a claim has a ‘relative’ nature; it can change during the course of a proceeding. As a consequence, this may mean that the parallel proceedings evincing the sameness (identity) of the subject matter at the beginning, do not necessarily retain the respective feature at the conclusion, and therefore, at a later stage of the proceedings, the problem of the lis pendens issue disappears. This leads me to the advice that the court, where the proceedings have been initiated later, should approach the dismissal of action or termination of proceedings vigilantly.43 For such a conclusion, only a legal cause of action is relevant, neither the type of action nor, e.g., the amount of the claim. This is in accordance with the CJEU’s approach44 to concurrence between an action for specific performance and a negative declaratory action. The decision, which upheld the negative declaratory action and stated that there had been no breach of industrial rights, simultaneously resolved the preliminary ruling on the action for damages caused by an alleged infringement of industrial property law. The legal force of the first judgment concerns the subject matter of the later proceeding. Consequently, even a negative declaratory action makes an obstacle to a proceeding concerning an action for specific performance.

4. The issue of a proper obstacle of lis pendens and an improper obstacle of lis pendens, and related proceedings The term of ‘improper obstacle of lis pendens’ (improper parallelism of proceedings) refers to the existence of parallel proceedings that are characterized not by the same subject matter but by certain similar characteristics

42 E.g. Fentiman in: Magnus and Mankowski (eds), Commentary to Art. 30, mn 19. 43 Cf. conclusion in part IV. 44 See the judgment Gubisch Maschinenfabrik v Palumbo (1987), ECR 4861.

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and are therefore referred to by the European legislature as related proceedings (related actions). The constituent characteristics of these proceedings or of their subject matter, respectively, is thus relation. Intended results of the proceedings do not therefore threaten to be contradictory and irreconcilable45, but a certain risk of contradictory even though not necessarily irreconcilable judgments persists. An irreconcilable conflict would exist in the case of a true obstacle of the lis pendens, stated under Art. 29 of the Brussels Ia Regulation. The legal consequences of the judgments are not in direct contradiction and are therefore not mutually exclusive46 The character of the relation is normatively, albeit very vaguely, defined in Art. 30 para. 3 in the phrase “closely connected”, according to which an improper obstacle of lis pendens may be defined only on a substantive level and does not have a personal scope: the identity of involved persons is not required. As well as the notion of related proceedings or improper obstacle of lis pendens, there is a ‘soft’ analogy to solving the consequences of the lis pendens issue also dealing with this phenomenon and its solution. The Brussels I/Ia Regulation, when it came into being and transformed itself from the Brussels Convention, accepted the solution of the Belgian Civil Procedure Code and took this unique category as a tool for a further possible exclusion of contradictory decisions and as a certain contribution to strengthen the efficiency of proceedings. Its provision in Art. 30 of the Regulation has a ‘dispositive’ nature, which, unlike the regime stated in Art. 29, is in principle only a certain offer to parties and courts, which, in a situation where the proceedings share a similar factual basis, could try to bring the cases together or to stay or terminate the later initiated proceedings. It can be concluded that some procedural decisions of courts cannot be made solely on the basis of the ex officio principle, but that consent is also needed besides the initiative of the parties. It is apparent from the concept of related proceedings that the private interest, i.e. the parties' private interest in saving costs, prevails over the public interest of the institute of lis pendens and its consequences.

45 Nevertheless, the English and the Czech language versions of Regulation (EU), No. 1215/2012, Art. 30 para. 2 use that term. 46 See C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 53.

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5. The notion of interest and its importance in defining the subject matter, and the resolution of the plea and of the consequences of lis pendens Each action also pursues a certain result (objective, purpose). It is initiated in order to achieve this purpose. ‘Interest’ may be an expression of various motives. Depending on their type and stratification, it is possible to distinguish between private and public interest. Private interest is, in addition to the legal basis, a natural or “material” basis of an action, a reason for the procedural action, leading to a certain outcome. Interest is also reflected in the type of prayer for relief.47 Interest may serve, however, as a basis of conduct that goes beyond the scope of an action itself and therefore does not strictly follow the outcome of proceedings. Often, interest may be the basis for unlawful, unfair or illegal activities. The interest serves, among other things, as a certain test or criterion of the identity of the subject matter, and thus is a yardstick for detecting the consequences of lis pendens. It can help identify persons, which it was used for by the CJEU in the Drouot case48. Here, the court concluded that the problem of the consequence (impacts) of lis pendens, and thus the identity of the subject matter, includes also the case when the parties to the proceedings are not (formally) identical but the interests in the subject matter of both proceedings are to such a degree identical that the res judicata effect of a judgment in the first (earlier) dispute affects the parties to the second proceeding as well. In that case, the interest served to overcome the formal definition of the party and led to its identification on the basis of a “material” concept. The insurer and the insured person were treated as identical persons. In a certain sense, therefore, interest is a decisive character of the subject matter. It is an instrument of its ‘material’ interpretation. As Schmehl49 suggests on the different content of two parallel actions, it is precisely the interest which may tip the scale of decision-making in the absence of identity of proceedings and therefore in the absence of possible parallel proceedings.50

47 “The end that the action has in view”, C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 41. 48 Case C-351/96, 19.05.1998, Drouot v CMI, ECR I-3075, para. 19. 49 Schmehl, Parallelverfahren und Justizgewährung (2011), 214. 50 See supra B.

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III. Identity of the people concerned – personal scope of lis pendens 1. The term ‘party’ and its involvement Lis pendens is furthermore defined in the Brussels I a Regulation by using the phrase of proceedings “between the same or identical parties”, “the same parties”, etc.51 At the same time, however, it is admitted that the procedural status of a person is not essential for the identity of proceedings. Thus, a person who is in the role of plaintiff in one proceeding may be the defendant in the other one.52 This is clearly a narrow definition of the term, which does not include, for example, the intervener. The possible role of an intervener as an identifier of a proceeding is not mentioned by commentators. I assume that the presence of an intervener is not a feature of the identity of proceedings. Also, Hess53 intercedes for a narrow interpretation of this notion, because it means reducing the likelihood of occurrence of identical proceedings. On the other hand, the CJEU chose a broad interpretation in the aforementioned Drouot case54. Hess justifies his opinion by pointing to the private interest of the parties, which could – because of the broad interpretation of the term “person” – lose their legal protection. The CJEU does not indicate its attitude toward the interpretation of “the same person”.

2. Controversial cases Several types of situations deserve some analysis and suggestions for solutions. The first of these controversial cases is the so-called partial identity. This notion depicts a situation, where one suit is initiated by an action brought by certain persons, and in the second suit the plaintiffs or defendants are to some extent the same persons, but the rest of the group shares no identity. In the case of a narrow interpretation, i.e. the exclusion of the situation from the consequences of lis pendens, the risk of losing the judi-

51 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015), Art. 29, mn 10. 52 See Kropholler and von Hein, Europäisches Zivilprozessrecht (2011), Art. 27, mn 4. 53 Hess, EuZPR § 6 Rz. 158 as cited in Kropholler and von Hein, Europäisches Zivilprozessrecht (2011), Art. 27, mn 4, fn. 12. 54 Case C-351/96, 19.05.1998, Drouot v CMI, ECR I-3075, para. 19.

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cial protection, which Hess fears55, is eliminated. This solution is also used by Geimer.56 CJEU57 and other authors58, who believe that the full identity of parties is not a characteristic sign of identity of parallel proceedings. Other types of situations are cases of inappropriate or interposed (front) persons and other confusion of persons etc. Quite exceptionally, the identity of the parties can be considered even if it is a matter of unequal subjects, but the subject of the proceedings is such that a conflict of opposing decisions may occur.59 The problem lies in identifying persons who are formally different and also stand in different roles in terms of their legal status. While Stadler60 and Geimer61 criticize this approach, Fentiman62 and Leible63 find it acceptable. The question is how to judge these extreme cases. The interest of the parties may be considered an identity measure. If the parties' interest lies in achieving the same result, or at least a result which is identical in substance, for example between a parent and subsidiary company, or the insurer and the insured person, in short, between two sets of persons that overlap but are not exactly identical, even between the real and the apparent party, there is identity of the proceedings, and therefore the obstacle of lis pendens. If this is not the case and the interests are not only contradictory, but also inappropriate (even if there is an identity of other elementary dimensions of proceedings), it is impossible to speak of identity of proceedings.

55 Weller, ‘Lis pendens and Similar Proceedings’, in Hess, Pfeiffer and Schlosser (eds), The Brussels I – Regulation (EC), No 44/2001 (2008), 105. 56 Geimer in: Zöller, ZPO, 2005, Art. 27, mn 8. 57 Case C-406/92, 06.12.1994, Tatry v. Maciej Rataj, ECLI:EU:C:1994:400, para. 34. 58 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR, Kommentar Brüssel I – VO (2016), Art. 29, mn 12a; Stadler in: Musielak, ZPO (2011), Art. 27 Brussel I, mn 3. 59 Case C-351/96, 19.05.1998, Drouot v CMI, ECR I-3075, para. 19; see also Schack, Internationales Zivilverfahrensrecht (2017), 318, mn 850 and Fentiman in: Magnus and Mankowski (eds), Art. 29–34, Art. 29, mn 8, 9. 60 See Stadler in: Musielak and Voit, ZPO (2011), Art. 27 Brussels I Regulation, Art. 27 mn 3. 61 See Geimer in: Zöller, ZPO, 2005, Art. 27 mn 8. 62 Fentiman in: Magnus and Mankowski (eds), Art. 29– 34, Art. 29 mn 11. 63 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015), Art. 29, mn 7.

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IV. The decisive moment, the question of priority, the temporary scope Lis pendens, as is commonly held, begins with the initiation of a proceeding later than an earlier brought action. The court, which, under narrow circumstances, is obliged to respect the existence of a previously initiated proceeding, has to resolve the issue of lis pendens. The provision, which is now contained in Art. 32 of the Brussels Ia Regulation, should be the subject of a few brief analytical notes. These relate to two issues, namely the extent of direct application of Art. 32 by national courts, and the issue of modification of an action in the course of the proceeding. Regarding the moment of initiation of a proceeding, Art. 32 of the Brussels Ia Regulation distinguishes two cases. The first is the time at which the action was brought to the court, provided that the plaintiff subsequently takes the necessary steps to ensure due service of the document to the defendant. The second is the moment when the document is delivered to the authority which then services the document to the defendant, provided that the plaintiff takes the necessary steps to duly bring the suit before the court. Let me concentrate on the first case, from the perspective of the decision of the English Court of Appeal in the Debt Collect case64. The defendant in the said proceeding before the English court sought a stay, claiming the obstacle of a same-case action, which had been brought before a Czech court. The English court decided not to grant the stay in this case. The court concluded that the proceeding before the Czech court did not constitute lis alibi pendens, as the first case did not actually exist. It was not initiated as the action brought before the Czech court had not been serviced to the defendant as the plaintiff had not paid the court fee. Another issue is the question of the moment of the proceeding’s initiation regarding modification (change) of action. Fentiman65 reckons that the decisive moment is when an action is brought in its original version, regardless of a later modification of action, which does not affect the moment of initiation of proceedings. But such a solution is not entirely convincing. If change of action means a change in identity, for example with regard to the subject matter of proceedings, it would seem necessary to consider the moment when the modification of action is brought as the initiating moment of the proceedings.

64 SK Slavia Praha-Fotbal AS v Debt Collect London Ltd, [2010] EWCA Civ 1250, [2011] 1 WLR 866. 65 Fentiman in: Magnus and Mankowski (eds), Art. 32, mn 7.

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G. Solution of the obstacle of lis pendens and its possible consequences – tools I. Definition of jurisdiction and instruments for its limitation Similar to its predecessors, the Brussels Ia Regulation provides two procedural instruments concerning lis pendens, which are based on trust in the jurisdiction of other States, and lead in a qualified manner to the “recognition” of a previously initiated proceeding in a second court. These instruments are denial of jurisdiction and stay of proceedings. Denial of jurisdiction means the dismissal of the action in a particular jurisdiction. By this the court expresses its conviction that the proceeding in the other court should be preferred. Stay of proceedings is a procedural decision by which the court recognizes the existence of the proceeding in the first court, but does not (yet) terminate the proceeding for a relevant reason. It can continue this proceeding. Regarding the limitation of its ‘own’ jurisdiction, Art. 29 of the Brussels Ia Regulation has not achieved the best solution. It may lead to an unjustified premature termination of the proceeding of the second court. This could harm the fair applicant for a number of reasons. Primarily, the first court may later reject the action because of abuse. Plaintiffs should then be allowed to continue with the proceeding in the second court. Therefore, it is recommended to return to the previous solution under Art. 21 of the Brussels Convention of 1968, which is now used in Art. 33 and 34 of the Brussels Ia Regulation.

II. Time limits for procedural decision-making The only time limit in the case of parallel proceedings is mentioned in Art. 29 para. 2 of the Brussels Ia Regulation, referring to an obligation of the first court to provide information on the moment of initiation of the proceeding at the request of the second court. The time limit is expressed by the European legislator by the phrase “without delay”. The concept must be interpreted in such a way that the court must comply with that obligation immediately.66 Other time restrictions on the decision-making of the courts are not set, and therefore sanctions for not respecting these time obligations cannot be

66 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015), Art. 29, mn 26.

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imposed. The Commission cherishes the idea67 that “where” (as used in Art. 29 para. 3 of the Regulation) should be interpreted in the sense that the court must decide on its jurisdiction within six months from the initiation of the proceeding. However, this deadline should have been explicitly set by the Union legislator, similar to the time limits for further procedural decisions.

III. Discretion of the court, prognosis of recognition, and negative conflict According to Art. 29 para. 3 of the Regulation, a court “other than the court first seized” shall declare itself to be inadequate as soon as the jurisdiction of the court first seized has jurisdiction that is “established”. The reason why the court, at the beginning of the proceeding, should thwart or deny protection to the applicant at a later initiated proceeding, remains unknown. In my view, there is no valid reason for such an approach. As has already been indicated, there is a strong counter-argument: it is not possible to justify a rule that can only bring harm and does not aim for any benefit or satisfaction of any interest. The first court may reach (after the taking of evidence) the conclusion that it is not competent or can issue a decision on the merits which cannot be recognized in the state of the second court. For reasons unknown to me, but probably as a consequence of the automatic termination of proceedings under Art. 29 para. 3, it is assumed that the other court cannot predict the recognition of the first court’s decision. This is paradoxical because under the “open” regime of Art. 33 para. 1 of the Regulation, the second court is entitled or even obliged to make such a prognosis. In contrast, under Article 29 para. 3 the second court is simply obliged to operate automatically like a machine68. It would be preferable that the second court should wait even after the first court has established its jurisdiction, and even after the proceedings have been suspended. Nothing prevents the second court from establishing a prognosis of recognition of the first court’s decision. Terminating the proceedings (or declining jurisdiction) should only happen after the proceedings before the first court have resulted in a final decision that is recognizable in the second court’s 67 Domej, ‘Rechtshängigkeit und in Zusammenhang stehende Verfahren, Gerichtststandsvereinbarungen, einstweilige Massnahmen’, in Bonomi and Schmid (eds), Revision der Verordnung 44/2001 (Brüssel I) (2011), 105, 110, 111. 68 This may be based on a former ECJ decision of 27 June 1991, see Geimer, in Zöller, ZPO, 2005, Art. 27, mn 11.

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state. A ‘rushed’ decision to terminate the proceeding for lack of jurisdiction under Art. 29 para. 3 may also lead to a situation of a so-called negative conflict of jurisdiction (competencies) if the first court also declines its jurisdiction.

IV. Principle of prohibition of abuse of process Abuse of the right to judicial protection (abbreviated as abuse of process) has been analysed extensively in the literature on procedural law.69 Even in proceedings, abuse means wrongful conduct resulting in liability for consequences caused thereby. As documented in literature,70 even after the wide spreading of phenomena of abuse the principle of prohibition of an abuse of rights has not yet been established as a general principle of EU law. Judgments on this issue, particularly of the European Court of Justice, are relatively sparse, 71 and cases concerning abuse of process are even rarer. Therefore, it can be highly appreciated that the German case law allowed ignoring the principle of priority in situations of abuse of law by lodging an action before evidently incompetent court.72 In spite of numerous efforts trying to resolve the issue of so-called torpedo actions by imposing a prohibition of abuse of process, the proposal for anchoring this principle in the Brussels Regulation was not successful. The amendments to the Regulation have not established an explicit arrangement of prohibition of abuse of the process. However, the most striking examples of torpedo actions have been resolved.73 The new Articles 29 para. 1 and Art. 31 para. 2 of the Regulation proclaim the strict principle of priority in favor of exclusive jurisdiction on the basis of a prorogation clause. Thus, currently, a relatively large number of actions, which possibly serve unfair purposes, i.e. as torpedoes that can lead to an obstruction in justice to later brought actions, cannot be ruled out, especially because of the application of the core theory and because the subject matter of the proceedings is defined in an

69 Taruffo, Abuse of Procedural Rights. Comparative Standards of Procedural Fairness (1999) passim; Tichý, ‘Abuse of Law and its Consequences’, in Potacs and Tichý Abuse in Law (2017), 36 f. 70 Vogenauer, ‘The Prohibition of Abuse of Law: An Emerging Principle of Law’, in de la Feria and Vogenauer, Prohibition of Abuse of Law (2011), 560. 71 Perhaps the first judgment was Case 33/74, 03.12.1974, Van Binsbergen v de Metaalnijverheid, ECR 1299. 72 See BGH, 13.08.2014 – ZB 163/12, Beck RS 2014, 17429, mn 10. 73 Schack, Internationales Zivilverfahrensrecht (7th edn, 2017), 316, mn 846.

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unreasonably broad way. The defense of affected parties consists in applying a counterclaim for declaration of the proceedings already commenced in the first court. A substantive defense has a basis for compensation for damages, but unfortunately I cannot deal with its essence here. Therefore, it is necessary to place emphasis on a procedural control of abuse. This consists in examining the legal interest in protection. Not only the first court, but also the second court are authorized to do this review. Both of them should take into account the subject matter of both proceedings and the purpose of the action.74 The court may also use the public policy clause and, exceptionally, on the basis of a teleological reduction, may continue the proceedings even though it would formally decline its jurisdiction if, for example, the case was first initiated as a declaration procedure with the obvious intent of abusing that institute.

H. Conclusion: Communication and coordination as an effective tool for dealing with lis pendens The development and confirmation of trust between EU Member States 75 is linked with effective communication between courts or judicial authorities of different EU Member States to a significant degree. Such interaction is most effective if courts can communicate directly, or with the help of judicial authorities. A validity proof of this thesis is also Art. 29 para. 2 of the Brussels Ia Regulation. It sets out the preconditions and means of communication between courts regarding lis pendens. Information between courts will undoubtedly take place on the initiative of the parties, even though the accusatorial principle is not fully applicable in this area, and the court may, even ex officio, also carry out communication under this provision. One can also contemplate the introduction of a certain coordinated regime consisting of (in its “minimalist” variant) mandatory registration of proceedings initiated under the Regulation (or under other European procedural rules). It would be kind of a public register to which persons with a legal interest should be granted access.

74 See Thole, ‘Missbrauchkontrolle im Europäischen Zivilverfahrensrecht’ (2009) 4 ZZP, 423; Schmehl, ‘Parallelverfahren und Justizgewährung’ (2011), 391; Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/EuIPR Vol. 1 (2015), Art. 29, mn 36–37. 75 See the Preamble to the Brussels I a Regulation.

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I. Considerations and recommendations with particular reference to lis pendens in third countries: Solutions de lege lata et ferenda Considering the enlargement of the Brussels regime towards third countries, it is important to reconsider the basic prerequisites of these countries as participants in judicial cooperation, mainly with regard to such a sensitive issue as lis pendens and its relevance.76 The current provisions for unilateral openness concerning the obstacle of lis pendens (Art. 33 and Art. 34 of the Regulation) symbolize a very good policy reaction to deal with the consequences of the lis pendens issue under a unilateral regime. As part of its discretion, the court may, in each particular case, assess the consequences of the recognition of equal status, in the sense that it remains respected as an obstacle to the proceedings in relation to the local proceedings, including the possibility of recognizing the decision of a third country’s court. The values to be protected would not suffer damages if this unilateral system – as a manifestation or form of openness – were transformed into a bilateral one.

II. Basic aspects The provisions that are applicable within the EU according to Art. 29 or Art. 30 of the Regulation can in principle be used in relation to third countries as well. However, it is indubitable that not all of these principles have the same relevance. The emphasis should be on the access to justice in terms of fair outcomes. Similarly important is the principle of effectiveness of administration of justice. Therefore, the abandoned principle of predictability of recognition should be reintroduced in Art. 29 of the Regulation, which goes hand in hand with values of public policy, and which, as an exception, could already be applied at this procedural stage, but most importantly in the case of recognition itself. The current Regulation favors one of the instruments of limiting its own competence to a much broader extent: the stay of proceedings. On the other hand, the principle of consistency in decision-making should be softened and the principle of procedural economy should be applied less intensively. The concept of lis pendens should therefore be made more flexible compared to the current regime of Art. 29 of the Brussels Ia Regulation. Despite the case of an earlier-initiated foreign proceeding, a domestic proceeding may require the applicant’s le-

76 See supra C.

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gal protection if, for example, at the time between the denial of jurisdiction in the domestic proceeding and the subsequent removal of an obstacle in terms of a foreign proceedings, the relevant substantive and procedural time-limits would expire. So instead of denial of jurisdiction, the proceeding should better be stayed. A stay of proceedings is recommendable in view of the uncertainty of the prognosis of recognition, whenever the substantive side effects of lodging an action in the domestic court (such as tightening of liability, prescription of limitation or prescription periods etc.) arise. This must be reflected in weakening the interest of the defendant to obtain a reimbursement of the costs of the proceedings. Of key relevance in this context is Recital 24 of the Preamble of the Brussels Ia Regulation, which states that a court’s assessment of a possible veto to grant a stay in favor of a proceeding in a third country may also include considerations whether the court of the third country has exclusive jurisdiction in circumstances where the court of an EU Member State would also have exclusive jurisdiction. The stated flexibility is driven by the "dynamics" of the regime of Articles 33 and 34 of the Regulation. This is due to a relatively wide range of application of the court's discretion within decision-making with regard to the standard of similarity of proceedings in a third country. Under Art. 33 para. 3 of the Regulation courts of an EU Member State terminate their proceeding based on lis pendens in a third country only if and after the judgment of the court of the third country is eligible for recognition in a EU Member State. In other cases, the courts of EU Member States have a discretion regarding the stay of proceedings,77 or of continuing the stayed proceedings under Article 33 para. 2 (a)–(c) of the Regulation. Contrary to Article 29 of the Regulation, scrutiny of parallel proceedings in a third country is primarily done on the basis of the adversarial principle78, i.e. this procedural provision of a public-law nature is in fact non-mandatory. Even when these "flexible" characteristics are recognized, there are many uncertainties that need to be bridged de lege lata by interpretation. One question concerns the extent to which cases that are not specifically regulated in Art. 33 of the Regulation are subject to the national lex fori of the EU Member State concerned. The risk that a number of third countries

77 Regulation (EU), No. 1215/2012, Art. 33 para. 1 subpara. (a) and (b). 78 See Regulation (EU), No. 1215/2012, Art. 33 para. 4.

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do not know of cross-border lis pendens-79 should be taken into consideration. Article 33 of the Regulation may also include cases of pending proceedings in the court of a third country when these courts would have exclusive jurisdiction under Regulation if they had the status of the court of an EU Member State. Recital 24 of the Preamble of the Regulation permits in such cases the court of a Member State to consider whether the court of a third country could have exclusive jurisdiction in this case if it had decided about the stay proceedings. In fact, it is indubitable that there is a discrepancy between Articles 33 and 29 of the Regulation even though this is denied by the above-mentioned Recital of the Preamble. There are, therefore, a number of questions: Firstly, it is unclear whether Art. 33 acknowledges prorogation towards a third country, as is the case with Articles 29 and 31 of the Regulation. Also, the question arises on what legal basis a court of an EU Member State can deny its jurisdiction in favor of the exclusive competence of a third country. In my opinion, it is not necessary to invoke the national legal order in such cases, but it is more adequate to proceed analogously, according to the regime of the Regulation (see Articles 29 and 31).

III. Recommendations Our findings can be summed up in the following theses.

1. Solutions de lege lata (i)

The subject matter of proceedings must be identified on the basis of parties' interest expressed in an action’s petition for relief, in accordance with the legal and factual bases. (ii) The personal dimension of lis pendens is also determined by the parties' interest in the outcome of the proceedings. (iii) “Modification of action” means initiating proceedings with respect to the change of the subject matter and the factual basis.

79 Bäumer, ‘Die ausländische Rechtshängigkeit und ihre Auswirkungen auf das internationale Zivilverfahrensrecht’ (1999), 203.

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2. Solutions de lege ferenda (i)

It is necessary to explicitly regulate the case of the exclusive jurisdiction of the court of a third country as a ground for staying the proceeding in the second court of a Member State. (ii) It is necessary to establish a bilateral system, also for the case of a subsequently initiated proceeding in a third country. (iii) It is necessary to maintain the mechanism for limiting jurisdiction according to Art. 33. (iv) It is necessary to modify the obligation of both courts to investigate the plaintiff's intention, respectively, to introduce a prohibition of abuse of the law and its sanction by rejecting jurisdiction. (v) Art. 29 para. 3 of the Regulation should be repealed. (vi) It is necessary to lay down time limits for procedural decisions of both the first and, in particular, the second court. (vii) It is recommended to establish a public register of proceedings under the regime of the Regulation.

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The Recognition and Enforcement of Court Decisions Between the EU and Third States Dieter Martiny, Hamburg

Abstract The Brussels I Recast Regulation does not deal with the recognition of third country judgments, a topic which is instead left to national law. There are several options which could meet the goals of non-discriminatory recognition based on established standards and a Union-wide effect. An extension of the 2007 Lugano Convention does not seem realistic. However, the application of the Hague Judgments Convention of 2019 could lead to a global solution. Accession to the Convention could give both the EU and third States the chance to follow an internationally accepted minimum standard. Bilateral treaties of the EU with third States and with, particularly, Association countries do not seem to be a practical solution because their elaboration would be cumbersome and they would have only a limited effect. Another alternative would be unilateral EU legislation which could amend the Brussels I Recast Regulation and introduce a new section on the recognition and enforcement of third-country judgments. If a common position can be achieved within the EU, such special rules could be enacted. However, a multilateral solution is preferable over a solely bilateral or unilateral solution. If such an international solution cannot be achieved, the alternative of a unilateral European Regulation following the model of Brussels I Recast as far as possible seems to be a conceivable solution.

Keywords Associated countries – Brussels I Recast Regulation – Hague Judgments Convention – Lugano Convention 2007 – recognition and enforcement of court decisions – treaty, bilateral.

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A. Problem area With the issue of recognition and enforcement of court decisions between the EU and third States, one encounters several problems in respect of the legal basis, the applicable principles and the possible solutions. A foreign judgment is an expression of foreign sovereign State power. To give it effect in the EU, it is necessary to establish a link between the ‘internal world’ of the EU and the ‘outer world’. If one does not want to leave the issue in the realm of the Member States but instead wishes to give an answer on the EU level, one has to look for an ‘international’ or ‘global’ solution which should follow internationally accepted standards. There are different levels, namely the internal level with the relationship within the EU and the global or international level concerning the relationship to third States. Today there is a disharmony, in that the EU rules favour judgments from Member States whereas third country judgments are in principle excluded.1 Recognition and enforcement of judgments are only two of the issues concerning foreign judgments. There is a link also to direct and indirect international jurisdiction. Therefore, in the past, proposals for an internationalization of jurisdiction and recognition of judgments were made together.2 Lis pendens is another topic and concerns problems arising at a preliminary stage. The relationship within the EU also has repercussions for external relationships between the EU and third countries – and vice versa. The precedence of rules and judgments within the EU should be reconciled with the necessary communication with third States. Within the EU, union law rules on recognition have precedence over existing treaties, for example pursuant to the Hague Choice of Court Convention of 2005,3 the Hague

1 Cf. Carbone, ‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 et seq.; Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 408 et seq. 2 Cf. Gaudemet-Tallon, ‘L'«internationalisation» du règlement Bruxelles I’, in Essays in honour of Vrellis (2014), 297 et seq. 3 Art. 26 para. 6 Hague Convention on Choice of Court Agreements of 30.06.2005, [2009] OJ EU L 133/3.

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Maintenance Convention of 20074 and the Hague Recognition Convention of 2019.5

B. Legal Framework and competence I. Different bases Recognition needs a legal basis. And for the respective rules on recognition, a legal basis is similarly necessary. This can be an international treaty, EU law or national law.

II. EU law The EU is competent in PIL (Private International Law) matters pursuant to Art. 81 para. 2 subpara. a TFEU, which also covers recognition and enforcement of foreign judgments.6 There is also established CJEU case law concerning the Lugano Convention supporting this position.7 As regards the applicable law, the European PIL Regulations adopt an approach of universal application. Any law specified by the Regulations shall be applied whether or not it is the law of a Member State.8 However, such universal application does not exist in respect of third country judgments. Mainly due to the reluctance of the Member States, the Brussels I Recast Regulation does not deal with the recognition of third country judgments, with the exception of giving priority to earlier third country

4 Art. 51 para. 4 sentence 2 Hague Convention of 23.11.2007 on the international recovery of child support and other forms of family maintenance, [2011] OJ EU L 192/39. 5 Art. 23 para. 4 Hague Convention of 02.07.2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, text at https://www.hc ch.net/en/instruments/conventions/full-text/?cid=137 (last access at: 01.11.2020). 6 Consolidated version of the Treaty on the Functioning of the European Union, [2012] OJ EU C 326/47.– See Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 408 et seq. 7 See CJEU Opinion 1/03 of 07.02.2006 Lugano II. – Cf. Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 441 et seq. 8 Regulation (EU) 2016/1103, Art. 20; Regulation (EU) 2016/1104, Art. 20; Regulation (EC) 593/2008, Art. 2; Regulation (EC) 864/2007, Art. 3; Regulation (EU) 1259, Art. 4; Regulation (EU) 650/2012, Art. 20.

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judgments in relation to a judgment from another Member State (Art. 45 para. 1 subpara. d).9 The Green paper on the reform of the Brussels I Regulation of 200910 dealt with the development of common rules for the recognition of third country decisions; additionally, the European Group for Private International Law (GEDIP) made a detailed proposal in 2010.11 However, this proposal had no effect on the Commission proposal of 2010, which remained silent on this issue.12 There is also a much shorter proposal by Ilaria Pretelli and others.13 The Brussels I Recast Regulation concentrates on civil and commercial matters. Today there is also an extended framework of Regulations dealing with matters in family and succession law. In some fields these Regulations are given precedence over existing Hague Conventions. This is the case for maintenance obligations with the EU Regulation14 and the Hague Convention of 2007. There is also the Brussels IIa Regulation on matrimonial matters and parental responsibility.15 Other Regulations deal with matrimonial property16 and succession.17

9 Gaudemet-Tallon ‘L'«internationalisation» du règlement Bruxelles I’, in Essays in honour of Vrellis, Athēna: Nomikē Bibliothēkē (2014), 297 (303 et seq.); Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 429 et seq. 10 Green paper on the review and application of Regulation (EC) 44/2001.– See Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 427 et seq. 11 GEDIP Proposal, Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 792 et seq. 12 See Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 428 et seq. 13 Pretelli, ‘Proposed amendments to Regulation 1215/2012 in order to regulate jurisdiction over Non-EU disputes’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 45. 14 Regulation (EC) 4/2009. 15 Regulation (EU) 2201/2003.– Cf. also Council Regulation (EU) 2019/1111 of 25.6.2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast). 16 Regulation (EU) 2016/1103. 17 Regulation (EU) 650/2012.

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III. International treaties As to existing treaties, we have primarily a regional European convention in the form of the Lugano Convention of 2007.18 There are also international treaties on recognition of judgments, to which the EU is a party. One is the Hague Convention on Choice of Court Agreements of 2005.19 Another is the Hague Maintenance Convention of 2007.20 The Hague Child Protection Convention of 199621 was adopted under the old Community system. The EU accepted that the Member States ratified the Convention.22

IV. National law Apart from this, recognition exists under national rules. Recognition and enforcement of court decisions from non-EU States is a field widely left to national law. National legislators can still deal with the recognition of decisions in their respective Member States.23 National law, however, must refuse to extend recognition if a third State judgment violates the exclusive jurisdiction of a Member State under the Brussels I Recast Regulation (Art. 24).24 In principle, recognition has effects only for the second State. One has to be aware that there is basically no uniform approach for the recognition of judgments of non-Member States but a great variety of na18 Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 30.10.2007, [2009] OJ EU L 147/5. 19 Articles 8–15 Hague Convention on Choice of Court Agreements of 2005. See Council Decision of 26.02.2009 on the signing on behalf of the European Community of the Convention on Choice of Court Agreements (2009/397/EC), [2009] OJ EU L 133/1. 20 Artt. 19–31 Hague Maintenance Convention 2007. 21 Artt. 23–28 Convention of 19.10.1996 on jurisdiction, applicable law, recognition, enforcement and co-operation in respect of parental responsibility and measures for the protection of children, [2008] OJ EU L 251/39. 22 See Martiny, ‘Recognition and Enforcement of Foreign Judgments in Germany and Europe’, in Basedow, Baum and Nishitani (eds), Japanese and European Private International Law in Comparative Perspective (2008), 377 (380 et seq.). 23 Mills, ‘Private international law and EU external relations: Think local act global, or think global act local?’ (2016) 65 ICLQ, 545. 24 Geimer, in Zöller, ZPO, 2020, § 328 ZPO para. 102a.– See Coester-Waltjen, ‘Die Bedeutung des EuGVÜ und des Luganer Abkommens für Drittstaaten’, in Heldrich and Uchida (eds), Festschrift für Hideo Nakamura zum 70. Geburtstag (1996), 89 (98).

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tional approaches.25 In countries like France there is basically only a review of indirect jurisdiction.26 Some States, like Germany, require reciprocity between the State of origin and the State addressed.27 Jurisdictions like Sweden are even more restrictive.28

C. Possible solutions I. In general Within the existing legal framework several options are conceivable which should meet the goals of (i) non-discriminatory recognition based on established standards and, as far as possible, (ii) a Union-wide effect. The goal should be to develop a more favourable solution than under separate national rules, and above all to find a uniform approach. Its content should at least correspond to the accepted standards of recognition, including protection against exorbitant jurisdiction. Approaches may concentrate on multilateral solutions in the direction of multilateral or bilateral conventions.29 An international instrument 25 See national reports in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 50 et seq.; Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 122 et seq. 26 Cf. Solenik, ‘National report for France’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 64 et seq. 27 See § 328 para. 1 no. 5 ZPO and Fötschl, ‘National report for Germany with references to Austria’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 50 (80 et seq.); Martiny, ‘Recognition and Enforcement of Foreign Judgments in Germany and Europe’, in Basedow, Baum and Nishitani (eds), Japanese and European Private International Law in Comparative Perspective (2008), 377 (397); Wurmnest, ‘Recognition and Enforcement of Foreign Judgments in Germany’, in Basedow and Yassari (eds), The Iranian Family and Succession Laws and their Application in German Courts (2004), 139 (157 et seq.); Wurmnest, ‘Recognition and Enforcement of U.S. Money Judgments in Germany’ 23 Berkeley J. Int'l Law (2005), 175 (186 et seq.); Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 284 et seq. 28 Cf. Fötschl, ‘National report for Denmark with references to Austria’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 50 et seq. 29 Pretelli, ‘Proposed amendments to Regulation 1215/2012 in order to regulate jurisdiction over Non-EU disputes’, in Pretelli and Heckendorn Urscheler (eds), Pos-

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which could find global acceptance seems to be more advantageous than a purely unilateral regional solution.30 A unilateral coordination within the EU with an EU-instrument is another option.31 The alternatives comprise extending existing instruments or developing new instruments.

II. Multilateral treaties 1. More multilateral instruments Treaty-making power in the field of recognition and enforcement of foreign judgments has been ceded to the European Union. Therefore, the EU could adopt more international treaties.

2. Lugano One convention, the Lugano Convention of 2007, has to be at least mentioned. The Lugano Convention originally served to extend the Brussels recognition regime to European Free Trade Association Member States which were not eligible to sign the Brussels Convention. Today, other than the EU signatories, Iceland, Norway and Switzerland are Contracting States.32

sibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 43 et seq. 30 Gaudemet-Tallon, ‘L'«internationalisation» du règlement Bruxelles I’, in Essays in honour of Vrellis, Athēna: Nomikē Bibliothēkē (2014), 297 (304); Pretelli, ‘Proposed amendments to Regulation 1215/2012 in order to regulate jurisdiction over Non-EU disputes’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 37 et seq. 31 Pretelli, ‘Proposed amendments to Regulation 1215/2012 in order to regulate jurisdiction over Non-EU disputes’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 43. 32 See on the possible extension of the Lugano System in the field of family and succession law Bonomi, ‘Possible Extension of the Lugano System in the Area of Family and Succession Law’, in Furrer, Markus and Pretelli (eds), Die Herausforderungen des europäischen Zivilverfahrensrechts für Lugano- und Drittstaaten, Zürich: Schulthess (2016), 91 et seq.

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The concept is that of a parallel convention, particularly for the European Economic Area.33 The Convention is also open to non-EU-Countries and non-European Economic Area States. This could cover a number of States. However, access is open only after an application of the third State and on the unanimous approval of the other Contracting States.34 The applicant has to provide various items of information not only on his legal system but also on the appointment of judges and their independence. This means that in practice Lugano could be used only in very rare and special cases.35 An extension of the Lugano Convention does not seem realistic.

3. Hague Conventions A new Hague Convention on recognition and enforcement of judgments has been prepared.36 Originally there were plans to create an all-encompassing treaty covering direct jurisdiction as well as recognition and enforcement. However, this project failed and only one part of it was successful and became law, the 2005 Hague Convention on Court Agreements, which is in force now for Mexico, Montenegro, Singapore, the United Kingdom and the EU. While some considered the revived recognition project as a ‘zombie’,37 enthusiasts at The Hague continued with the development of a Recognition Convention.38 These efforts were, despite some

33 Art. 70 para. 1 lit. a, Art. 71 Lugano Convention. 34 Art. 70 para. 1 lit. c, Art. 72 Lugano Convention (with details on information required for the application of the Convention; declarations in accordance with Articles I and III of Protocol 1; and with information on, in particular (1) the judicial system, including information on the appointment and independence of judges; (2) the internal law concerning civil procedure and enforcement of judgments; and (3) the private international law relating to civil procedure). 35 Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 431 et seq., 446. 36 For the draft see https://www.hcch.net/en/instruments/conventions/full-text/?cid= 137 (last access at: 01.11.2020). 37 Schack, ‘Wiedergänger der Haager Konferenz für IPR’, ZEuP 2014, 824 et seq. 38 Beaumont,‘The Revived Judgments Project in The Hague’(2014) NIPR, 532 et seq.; Meier, ‘Neue Haager Konvention‘, in Furrer, Markus and Pretelli (eds), Die Herausforderungen des europäischen Zivilverfahrensrechts für Lugano- und Drittstaaten (2016), 191 et seq.; Wagner, ‘Ein neuer Anlauf zu einem Haager Anerkennungsund Vollstreckungsübereinkommen’ (2016) IPRax, 97 et seq.

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weaknesses of its solutions, successful in the end.39 The Convention of 2019 is, however, not yet in force.40 According to the Convention, a judgment given by a court of a Contracting State (issuing State) is to be recognized and enforced in another Contracting State (requested State).41 Recognition or enforcement may be refused only on the grounds specified in the Convention.42 The bases for recognition and enforcement are defined in an extensive catalogue of conditions.43 For this purpose a list of bases of jurisdiction – so-called jurisdictional filters – has been established.44 Cases where a refusal of recognition or enforcement may occur are defined. Non-recognition is prescribed particularly in the event of a lack of notice,45 inconsistency with another judgment46 or violation of domestic public policy,47 but it is also prescribed for disregard of domestic lis pendens.48 One can only speculate if such a global solution will ultimately meet with success.49 At any rate, the EU could become a member of the Convention.50 The Convention is an addition to the existing Hague Conventions on Child Protection, Choice of Court Agreements and Maintenance. Accession to the Convention could give both the EU and third States the chance to follow a common standard.

39 40 41 42 43 44

45 46 47 48

49 50

Schack, ‘The new Hague Judgment Convention‘ (2020) IPRax, 1 et seq. The only contracting parties are so far Ukraine and Uruguay. Art. 4 para. 1 sentence 1. Art. 4 para. 1 sentence 2. Art. 5. See Beaumont and Walker, ‘Recognition and enforcement of judgments in civil and commercial matters in the Brussels I Recast and some lessons from it and the recent Hague Conventions for the Hague Judgments Project’ (2015) 11 JPIL, 31 (43 et seq.). Art. 7 para. 1 lit. a. Art. 7 para. 1 lit. e, f. Art. 7 para. 1 lit. c. – For punitive damage judgments there is a special provision in Art. 10. Art. 7 para. 2. See Beaumont and Walker, ‘Recognition and enforcement of judgments in civil and commercial matters in the Brussels I Recast and some lessons from it and the recent Hague Conventions for the Hague Judgments Project’ (2015) 11 JPIL, 31 (44 et seq.). Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 407 et seq., 446. Mills, ‘Private international law and EU external relations: Think local act global, or think global act local?’, 65 ICLQ (2016), 541 (552).– Sceptical Schack, ‘The new Hague Judgment Convention’ (2020) IPRax, 1 (6).

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III. Bilateral treaties Sometimes bilateral treaties on recognition and enforcement of judgments between EU and third States are mentioned as another possible solution.51 There are bilateral EU treaties, but only a few. One is an agreement with Denmark on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.52 It extends the application of Union rules like the Brussels Regulation. This agreement takes into account the special situation of Denmark, which does not take part in the European judicial area and secures nevertheless similar results. It goes without saying that this cannot be a model. Recognition agreements are a traditional instrument53 and bilateral treaties with single States can be imagined. In particular, treaties with important commercial partners could be developed. However, experiences of the past show that such an approach is not especially promising. The negotiation process is generally cumbersome, and even if successful the existence of several treaties could lead to an atomization of the recognition rules. The deployment of a kind of a model agreement which could be used in several cases is also conceivable. However, even if such a treaty could be developed, its value, compared to a multilateral treaty would be doubtful. The development of abstract solutions would be worthless. An additional type of agreement could be developed particularly in the context of the Association countries of the EU. In the Association agreements with Georgia, Moldavia and Ukraine there is a provision on legal cooperation. Under these agreements the parties agree to develop judicial cooperation in civil and commercial matters as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation and, in particular, the Conventions of the Hague Conference 51 Pretelli, ‘Proposed amendments to Regulation 1215/2012 in order to regulate jurisdiction over Non-EU disputes’, in Pretelli and Heckendorn Urscheler (eds), Possibility and terms for applying Brussels I Regulation (recast) to extra-EU disputes – Study for the JURI Committee (2014), 37 (38 et seq.); Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 435 et seq., 446 et seq.– Cf. also Schack, ‘The new Hague Judgment Convention’ (2020) IPRax, 1 (7). 52 Agreement between the European Community and the Kingdom of Denmark on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters of 19.10.2005, [2005] OJ EU L 299/62. 53 For Germany see Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 317 et seq.

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on private international law in the field of international legal cooperation and litigation as well as the protection of children.54 This provision tries to favour the existing system of international treaties. It could, nevertheless be used as a stimulus to develop a specific type of agreement and international cooperation with the Association countries.55 However, the development of such a specific agreement or of a treaty could be difficult if only an individual or supplementary solution were to be developed. One could also doubt the necessity of such an instrument if the result would be similar to the Lugano Convention. The structure, content and feasibility also raise questions.

IV. Unilateral EU Regulation 1. Reforming the EU rules a) Recognition within the Brussels system Under the existing Brussels system, third country nationals may be made parties to proceedings in a Member State. If the defendant is not domiciled in the Member State, the plaintiff may nevertheless avail himself of the rules of jurisdiction in force in that Member State (Art. 6). This also includes exorbitant fora, for example jurisdiction based on the nationality of the plaintiff. This is a discrimination that often has been criticized. However, the effect of national rules granting exorbitant jurisdiction is reinforced at the stage of recognition and enforcement because a judgment based on such exorbitant jurisdiction has to be recognized in other EU Member States without questioning jurisdiction.56 Under the Brussels 54 Art. 21 para. 1 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part of 27.06.2014 ([2014] OJ EU L 261/4); Art. 20 para. 1 Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part of 27.06.2014 ([2014] OJ EU L 260/4); Art. 24 para. 1 Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part of 21.03.2014 ([2014] OJ EU L 161/3). 55 Basedow, ‘EU-Nachbarschaftspolitik und justizielle Zusammenarbeit’ (2017) EuZW, 361 et seq. 56 Takahashi, ‘Review of the Brussels I Regulation – A Comment from the Perspectives of Non-Member States (Third States)’ (2012) 8 JPIL, 1 et seq.

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Convention this effect could be excluded by a bilateral treaty between the issuing State and the requesting State (Art. 59 Brussels Convention).57 Exactly this was done in Art. 23 of the German-Norwegian Treaty of 1977.58 However, under the Brussels I Recast Regulation such an agreement is no longer possible. If there were a reform of the rules on direct jurisdiction in the Brussels Recast Regulation, this discriminatory effect would no longer occur. It is, however, not conceivable that it be deleted only for recognition purposes as there would otherwise be a dissonance between jurisdiction and recognition. b) Recognition and enforcement of non-Member States’ judgments aa) Competence Earlier doubts concerning the competence of the EU as regards the recognition and enforcement of non-Member States’ judgments – because such an issue focuses on external relations –59 are no longer justified. There is exclusive external competence.60 Therefore, an extension could be based on the well-established principles of the Brussels Regulations. bb) Extension of the Brussels Recast Regulation (1)There are several proposals to introduce into the Brussels Recast Regulation an additional section on the recognition and enforcement of nonMember State judgments.61 Pursuant to these proposals a judgment would be recognized in Member States in accordance with the provisions of the 57 Ibid., 1 (2 et seq.). 58 Treaty between Norway and the Federal Republic of Germany on the recognition and enforcement of judgments and enforceable documents, in civil and commercial matters, signed at Oslo on 17.06.1977 (Bundesgesetzblatt 1981 II p. 341, 901). 59 Magnus and Mankowski, ‘Brussels I on the verge of reform’ (2010), 109 ZvglRWiss, 1 (4).– Cf. also Martiny, in Basedow, Baum and Nishitani (eds), Japanese and European Private International Law in Comparative Perspective (2008), 377 (379 et seq.). 60 Mills, ‘Private international law and EU external relations: Think local act global, or think global act local?’, 65 ICLQ (2016) 541 (547). 61 GEDIP Proposal, supra fn. 11; new Articles 45 et seq.; Pretelli, supra fn. 13, 48 et seq. – Cf. also Schack (2020) IPRax, 1 (6).

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extended Regulation. If one chooses this option of an extension of the Brussels I Recast Regulation, one has to cope with several problems which could be solved through changes in existing provisions or by the introduction of new provisions. (2) The first issue is the existence of prerequisites for recognition and enforcement. A decision of a court of a non-Member State should be recognized and enforced if the judgment is final and no appeal or revision proceedings are pending.62 The existing proposals exclude non-final decisions. (3) An examination of indirect jurisdiction is necessary. Direct jurisdiction is a prerequisite for a court decision. Within the Brussels system there is a uniform system of jurisdiction (Articles 4–28). Therefore, at the stage of recognition the requirement of the first court’s jurisdiction could be dropped in principle. Under Brussels I Recast an examination of indirect jurisdiction is not necessary (cf. Art. 45 para. 3 sentence 1). However, neither the courts nor non-Member States are bound by these rules. A unification of direct jurisdiction does not exist. Therefore, the model of Brussels Recast would not be appropriate for recognition. The system of a convention double which governs both the assumption of jurisdiction and the recognition of the resulting judgment cannot be used. It must nevertheless be guaranteed that the standard for the exercise of jurisdiction is observed.63 One solution could be that courts of the non-Member State should have jurisdiction according to the criteria set out for direct jurisdiction in the Brussels Regulation.64 However, a simple extension of the rules on direct jurisdiction to indirect jurisdiction would not be so easy. The rules on direct jurisdiction are tailored for situations within the Brussels area. A global extension across the world should be more robust and simple. Accordingly, the GEDIP Proposal follows the French approach of a necessary ‘suf-

62 New Art. 56-1, para. 2 GEDIP Proposal, in GEDIP Proposal, Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 809 et seq.; Art. 46, lit. b, Pretelli. 63 Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (192 et seq.). 64 New Art. 46 lit. a, Pretelli.– Cf. also Carbone, ‘What About the Recognition of Third States’ Foreign Judgments?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (304).

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ficient connection’ (lien suffisant) without an explicit list of accepted bases of jurisdiction.65 This is, however, not very precise.66 In particular, protection against exorbitant bases of jurisdiction has in the past been one of the main obstacles for an internationalization of the Regulation, and it remains the case that protection against exorbitant jurisdictions has to be guaranteed. One could blacklist the various exorbitant jurisdictional bases, such as the nationality of the parties or service on the defendant. It has to be ensured that the foreign judgment is not based on such an exercise of exorbitant jurisdiction.67 However, if there is only a positive list of accepted jurisdictional bases, a special provision is not necessary.68 Additional basic issues also need a regulation. For example, service on the defendant must be proven.69 Other impediments to recognition will be irreconcilable judgments70 and disregard of lis pendens in an addressed Member State where there were prior proceedings in that State.71

65 Art. 56-3, para. 3 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011) 811 et seq.– For a combination of both approaches Laugwitz, ‘Die Anerkennung und Vollstreckung drittstaatlicher Entscheidungen in Zivil- und Handelssachen’ (2016), 403 et seq. 66 Critical also Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (193). 67 Art. 56-3, para. 3 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011) 811. 68 In favour of such a list Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (193). 69 Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (192); Art. 56-4 para. 1 lit. a GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 811 et seq. 70 Art. 56-4 para. 1 lit. b, c GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 810 et seq.– Cf. also Carbone, ‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (307 et seq.). 71 Art. 56-4 para. 2 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 811 et seq.; Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (192). – Cf. also Carbone,‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (308).

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A public policy clause has to be introduced as well.72 One could also add a specific bar of recognition in respect of overriding mandatory provisions of the lex fori of the State addressed. 73 However, this aspect is generally already treated together as a part of the public policy clause. (4) A major issue would be the effect of recognition, which raises a series of questions. Would it also mean that the rule of automatic recognition applies? If the outcome of proceedings in a court of a Member State depends on the determination of an incidental question of recognition, then that court should have jurisdiction to determine that question.74 It has to be decided whether the recognition of a third State judgment should have effect for the whole of the European judicial area or only for the State addressed.75 It is necessary that the same standard be used by the courts in all Member States. However, even under Brussels I Recast, despite the application of very liberal uniform rules, the national decision on recognition and enforcement binds only the State addressed. One should follow this approach. Forum shopping should be avoided. Under Brussels I Recast the recognition of a third country judgment has effect for the other Member States only insofar as the recognition of the third country judgment can bar recognition of a Member State judgment.76 In such cases of conflict between two foreign judgments, the temporal priority of the judgment is decisive.77 This rule could also be followed under a reform. (5) Another issue would be the enforcement procedure. Sometimes it is said that any interested party that raises the recognition of a judgment may, in accordance with the national procedures providing for exequatur, apply for a decision that the judgment be recognized and enforced in a

72 Art. 56-6 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 813 et seq.– Cf. also Carbone,‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (306 et seq.). 73 Art. 56-5 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011), 814 et seq. 74 New Art. 45, para. 3, Pretelli, see above at fn. 13. 75 Magnus and Mankowski, ‘Brussels I on the verge of reform’ (2010), 109 ZvglRWiss, 1 (4 et seq.). 76 Art. 45, para. 1 lit. d. – Critical with regard to the former Art. 34 no. 4, Brussels I Reg. Hess, Europäisches Zivilprozessrecht (2010), § 5 no. 18, § 6 no. 213. 77 Cf. Schack, Internationales Zivilprozessrecht (7thedn, 2017), no. 945.

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Member State.78 However, difficult questions as to how the national proceedings and the Brussels approach fit together should be avoided as far as possible. At least some basic uniform rules would be appropriate. The contents could be similar to the old Brussels exequatur system. The new direct enforcement system of Brussels I Recast is only possible in the context of European international civil procedure.79 If a foreign judgment is declared enforceable in the requested State, this is restricted to the requested State. According to the maxim ‘exequatur sur exequatur ne vaut’, there is no so-called double exequatur extending the effects of recognition of a foreign decision in one Member State to another. This is not accepted under EU law.80 There is a proposal in legal literature, however, to allow such recognition at least in cases where a third country decision has been recognized by way of a judgment of a Member State court dealing with the issue. It is argued that in common law countries such as Ireland, granting recognition has the nature of a new separate judgment because the foreign judgment is transformed into a domestic judgment.81 Recognizing such a decision is nevertheless unpersuasive because the effect of the decision on recognition is restricted to the recognition issue. The procedural effect cannot be extended to other Member States. If the effect of a third country judgment should be recognition within the whole of the EU, then a reform of the principle exequatur sur exequatur ne vaut would be necessary.82 However, also in this respect a more prudent solution with a restricted effect of the exequatur would be appropriate.

78 New Art. 45, para. 2, Pretelli, see above at fn. 13. 79 Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (192). 80 Mankowski in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/ EuIPR Vol. 1 (2015) Art. 39 no. 33 Brüssel Ia-VO. – See Coester-Waltjen, ‘Die Bedeutung des EuGVÜ und des Luganer Abkommens für Drittstaaten’, in Heldrich and Uchida (eds), Festschrift für Hideo Nakamura zum 70. Geburtstag (1996), 89 (99 et seq.). Contra Koll, ‘Doppelexequatur: “ne vaut” oder “no worries?” (2018), IHR 137 et seq. (inadmissible only in cases of fraudulent circumvention of the law). 81 Hay, ‘Recognition of a Recognition Judgment Within the European Union – “Double Exequatur” and the Public Policy Barrier’ (2009) I-61 EuLF = Hay et al. (eds), Liber Amicorum Tibor Várady (2009), 143 = in Rasmussen-Bonne and Khachidze (eds), Hay, Selected essays on comparative law and conflict of laws (2015), 893 (et seq.); id., ‘Notes on the European Union's Brussels-I 'Recast' Regulation – An American Perspective’ (2013) I-1 EuLF, 5 et seq. 82 Leaving the issue undecided Carbone,‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (308 et seq.).

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(6) Another problem is the so-called ‘principle of favourability’ (Günstigkeitsprinzip). In EU civil procedure this is generally not accepted, 83 whereas it is an established principle in the Hague Conventions.84 The fact that an extension solution will not cover direct jurisdiction is an argument in support of the principle of favourability.85 One consequence would be that decisions could be recognized even if based on the residual national rules of jurisdiction86 rather than a jurisdictional basis of EU law. (7) In relation to existing conventions and agreements of Member States with third States, it has been proposed that these conventions would have precedence.87 This would be in line with the approach in other European Regulations.88

2. A separate Regulation on the recognition and enforcement of third State court decisions A new, separate Regulation for recognition of third States decisions would basically raise the same difficulties as an extension of Brussels I Recast. Also in this case the EU would have to find a common position as to the essentials of the conditions for recognition and enforcement and would have to develop a separate instrument. Such a Regulation should cover at least civil and commercial matters in the traditional sense. An extension to family and succession matters would theoretically not be excluded. It is, however, hard to imagine a specific European solution due to the difficulties inherent in these matters and the competition with some existing Hague Conventions.

83 Martiny, ‘Das Günstigkeitsprinzip bei der Koordination unterschiedlicher Regeln für die Anerkennung ausländischer Entscheidungen’, in Schütze (ed), Fairness Justice Equity: Festschrift für Reinhold Geimer zum 80. Geburtstag (2017), 451 et seq. 84 See Art. 15 Preliminary Draft Convention, cf. Wagner (2016) IPRax, 97 (101 et seq.). 85 Against the principle of favor recognitionis Bonomi, ‘European Private International law and Third States’ (2017) IPRax, 184 (192). 86 Mills, ‘Private international law and EU external relations: Think local act global, or think global act local?’ 65 ICLQ (2016) 541 (545). 87 Art. 72-1 GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011) 817 et seq. 88 See Regulation (EU) 1215/2012, Art. 71 et seq.

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3. Development of common principles One can find a variety of more or less detailed proposals concerning recognition and/or enforcement under European and/or national rules, featuring different combinations. Another possibility could be the development of common principles on recognition and enforcement of court decisions between the EU and third States. Such uniform principles could be developed and then applied in national recognition legislation.89 This would leave the development and the application of the rules on recognition to the individual States, but with a uniform approach. Such common principles could be more or less comprehensive or concentrate only on certain crucial issues. It is conceivable, for example, that there could be a common position concerning punitive damages which is based on the common position in the Rome II Regulation.90 Recital 32 states that the application of a provision of the law designated by the Regulation which would have the effect of causing noncompensatory exemplary or punitive damages of an excessive nature to be awarded may, depending on the circumstances of the case and the legal order of the Member State of the court seized, be regarded as contrary to the public policy of the forum. It may be argued that this is already the common position of the Member States not only for the application of foreign law but also for recognition. However, here one would meet basically the same problems of defining a common core and common solutions.91 The common core should be the solution of Brussels I Recast on the impediments to recognition.

89 Cf. Carbone,‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 ( 302 et seq.). 90 Regulation (EC) 864/2007 – Mills, ‘Private international law and EU external relations: Think local act global, or think global act local?’, 65 ICLQ (2016) 541 (575 et seq.). There is also a special provision in Art. 56-5, lit. b GEDIP Proposal, GEDIP Proposal Text in Fallon, Kinsch and Kohler (eds), ‘Building European Private International Law - Twenty Years' Work by GEDIP’ (2011) 827. 91 See for prerequisites such as indirect jurisdiction Carbone, ‘What About the Recognition of Third States’ Foreign Judgments ?’, in Pocar, Viarengo and Villata (eds), Recasting Brussels I, Padova: CEDAM (2012), 299 (303 et seq.).

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D. Conclusion There seems to be no magic solution for the recognition and enforcement of court decisions between the EU and third States. Accession to the Hague Judgments Convention would be a chance to follow internationally accepted rules in this field. If such an international solution can not be achieved, a second alternative could be a unilateral European Regulation following the model of Brussels I Recast as far as possible. If a common position can be achieved within the EU, special rules on the recognition and enforcement of third-country judgments could be enacted. The development of new bilateral treaties could improve the situation, but the realization of such projects seems to be very unlikely. The development of common European principles which would then be applied in the framework of national provisions would lead to a mixture of different approaches and to implementation difficulties. In any event, a multilateral solution is preferable over an exclusively unilateral or bilateral approach.

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The Recognition of the Effects of Foreign Judgments Between the EU and Third States Dimitrios Tsikrikas, Athens

Abstract In the relationship between the EU and third States, the recognition of foreign judgments is related to their binding effects and especially the res judicata effect which is governed not by the European law of civil procedure but by the procedural law of the State rendering the judgment. Therefore, the res judicata effect of a judgment refusing the claim as not admissible cannot be recognized in a third State. The recognition of the effects of foreign judgments issued in the subject matter of the case is dependent on the mirror-image principle and furthermore it is limited by the public policy (“ordre public”) clause of the recognizing State. Finally, provisional measures which are granted by the court of a Member State in ex parte proceedings can be recognized and enforced in a third State only after their prior notice to the defendant.

Keywords Choice of court clause – reasons of the decision – ex parte proceedings – irreconcilability of judgments – core issue theory (Kernpunkttheorie) – theory of cumulation of applicable effects (Kumulationstheorie) – mirror-image principle of indirect jurisdiction – provisional measures – public policy – res judicata – effects doctrine.

A. In general – Recognition of the effects of foreign judgments in cross-border cases The recognition of the effects of foreign judgments in cross-border cases is very important for the effectiveness of civil justice not only in the relationship between EU Member States but furthermore in the relationship between the EU on the one hand and third States on the other hand.

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Outside the European Union and the harmonized recognition rules of the Brussels Ia Regulation (Articles 36–38) the recognition of foreign judgments concerns their binding effects and especially the effect of res judicata1 which are usually governed and determined, at least in principle, by the law of the State rendering the judgment.2 In the great majority of national laws there is a clear distinction between the recognition and the enforcement of foreign judgments. Outside the European Union, enforcement proceedings in cross-border cases may be affected by the declaration of the foreign judgment as enforceable by a domestic court’s decision in a special judicial proceeding (“exequatur”).3 On the contrary, the notion of recognition is defined as the automatic extension of the binding effects of a foreign judgment to the legal order of another State.4 If the res judicata effect of a foreign judgment is recognized in the latter, this may be affected by any court incidentally and ex officio or by the request of the interested party.5 According to the effects doctrine6 the effects of a foreign judgment, which are determined by the procedural law of the State rendering the judgment, are extended automatically to the legal order of another State. However, the effects of the foreign judgment are limited either by the procedural law of the recognizing

1 “Materielle Rechtskraft”, “autorité de la chose jugée”. 2 Geimer, Anerkennung ausländischer Entscheidungen in Deutschland (1995) 8; Nagel and Gottwald, Internationales Zivilprozessrecht (2013) § 12 Nr. 112; Linke and Hau, Internationales Zivilverfahrensrecht (2015) § 12 Nr. 12.6. 3 Gottwald, ‘Grundfragen der Anerkennung und Vollstreckung ausländischer Entscheidungen in Zivilsachen’ 103 ZZP (1990) 288; Matscher, ‘Grundfragen der Anerkennung und Vollstreckung ausländischer Entscheidungen in Zivilsachen’ ZZP 103 (1990), 302; Tsikrikas, ‘Die Anerkennung der Wirkungen ausländischer Prozesshandlungen als Grundlage für die justizielle Zusammenarbeit’, ZZPInt (2010) 165. 4 Gottwald, ‘Grundfragen der Anerkennung und Vollstreckung ausländischer Entscheidungen in Zivilsachen’ 103 ZZP (1990) 260; Geimer, supra at fn. 2, 86; Nagel and Gottwald, supra at fn. 2, § 12 Nr. 112; Thole, ‘Die Entwicklung der Anerkennung im autonomen Recht in Europa’, in Hess (ed), Die Anerkennung im internationalen Zivilprozessrecht – Europäisches Vollstreckungsrecht (2014), 25 (51); Linke and Hau, supra fn. 2, § 12 Nr. 12.6; but see further Matscher, ‘Grundfragen der Anerkennung und Vollstreckung ausländischer Entscheidungen in Zivilsachen’, 103 ZZP (1990), 307. 5 Nagel and Gottwald, supra fn. 2, § 12 Nr. 106, 107; Schack, Internationales Zivilverfahrensrecht (2014), Nr. 971. 6 “Wirkungserstreckungstheorie”, supra fn. 4.

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State7 or by public policy (“ordre public”) and especially by the procedural public policy of the latter.8 Under the doctrine of public-policy limitation, the effects of a foreign judgment are determined by the procedural law of the State rendering the judgment, but their recognition is limited by the standards of the law and the fundamental principles of the legal order of the recognizing State. Therefore, the effect of issue preclusion of a judgment under U.S. law cannot be recognized in countries of the continental legal tradition9, as continental procedural law does not know the effect of issue preclusion or a similar extension of the res judicata effect to the issues of a judgment.10

B. Recognition of the effects of judgments granted by the court of an EU Member State in a third State I. Judgments refusing the claim as not admissible If a court of an EU Member State has refused a claim as not admissible, the res judicata effect of such a judgment cannot be recognized in third States.11 The conditions of the admissibility of the claim are governed and determined by national procedural law and therefore the judgment refusing the claim as not admissible cannot have a binding effect in relationship to a foreign court which in a later proceeding examines the admissibility of the same claim12, because this court applies different standards for the examination of the claim’s admissibility, determined by its procedural law.

7 “Kumulationstheorie”, Geimer, supra fn. 2, 88; Schack, supra fn. 5, Nr. 886. 8 See further Linke and Hau, supra fn. 2, § 12 Nr. 12.7. 9 See further Murray and Stürner, German Civil Justice (2004), 541; Nagel and Gottwald, supra fn. 2, § 12 Nr. 122. 10 Murray and Stürner, supra at fn. 9, 541. 11 Geimer, supra at fn. 2, 89 (90); Geimer, ‘Europäische Urteile zur internationalen Unzuständigkeit’, in Geimer and Schütze (eds), Festschrift für Athanassios Kaissis zum 65. Geburtstag (2012), 301; Roth, in Stein and Jonas, ZPO Vol. 1, § 328 para. 54, 55; Stadler in: Musielak and Voit, ZPO (2011), § 328 Nr. 5; Nagel and Gottwald, supra at fn. 2, § 12 Nr. 143. 12 See further Tsikrikas, ‘Über die Bindungswirkung von Gerichtsstandsvereinbarungen in grenzüberschreitenden Streitigkeiten’, Festschrift für Rolf Stürner zum 70. Geburtstag (2013), 1381 (1382).

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Therefore, the opinion of the CJEU in the Gothaer case13 cannot be admitted as a general approach. In this decision the CJEU accepts that the res judicata effect of the judgment of a Member State’s court refusing the claim as not admissible, because the court would not have jurisdiction due to a choice of court clause, which is valid according to the rules of Brussels Regulation and confers international jurisdiction to the court of another Member State, covers not only the issue of the admissibility of the claim, decided by the court, but furthermore the issue of the existence and the validity of the choice of court clause.14 However, the extension of the binding effect of a judgment refusing the claim as not admissible to the issue of the validity of the choice of law clause depends on the application of the same common standards and the same criterion for the examination of the clause not only from the forum prorogatum but furthermore from the forum derogatum. This condition exists under the Brussels Ia Regulation. Art. 25 of the Regulation provides the standards of the formal validity of the choice of court agreement which are generally applicable from the courts of all Member States. Furthermore, concerning the substantive conditions of the validity of the choice of court agreement, Art. 25 of the Regulation refers to the substantive law which is applicable according to the (private international) law of the forum prorogatum.15 Therefore, only due to the common standards applicable from the courts of all Member States, can it be admitted that the judgment rendered in a Member State and refusing the claim as not admissible has a binding effect concerning the issues of the international jurisdiction of the court

13 Case C-456/11, 15.11.2012, Gothaer Allgemeine Versicherung AG u.a. v Samskip GmbH, ECR 2012, 719. 14 Ibid., Nr. 41. 15 Gebauer, ‘Das Prorogationsstatut im Europäischen Zivilprozessrecht’, in Kronke and Thorn (eds), Grenzen überwinden — Prinzipien bewahren, Festschrift für Bernd von Hoffmann zum 70. Geburtstag (2011), 557; Basedow, ‘Zuständigkeitsderogation, Eingriffsnormen und ordre public’, Festschrift für Ulrich Magnus zum 70. Geburtstag (2014) 337; Simotta, ‘Zur materiellen Nichtigkeit von Gerichtsstandsvereinbarungen (Art. 23 Abs. 1 S. 1 EuGVVO)’, in Geimer et al. (eds), Ars aequi et boni in mundo: Festschrift für Rolf A. Schütze zum 80. Geburtstag (2014) 541; Domej, ‘Die Neufassung der EuGVVO’ (2014), 78 RabelsZ 508; Pfeiffer, ‘Die Fortentwicklung des Europäischen Prozessrechts durch die neue EuGVO’ (2014) ZZP, 409; Nunner-Krautgasser, ‘Die Neuregelung der ausschließlichen Gerichtsstandsvereinbarung in der EuGVVO’(2014) ZZP, 461.

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and probably the existence and the validity of a choice of court agreement.16 On the contrary, in the relationship between EU Member States and third States common standards do not exist in the issue of the examination of the admissibility of the claim and especially of the validity of a choice of court agreement. Each court applies the standards and the conditions provided by national procedural law and therefore due to the lack of common standards, the res judicata effect of the judgment rendered in a Member State and refusing the claim as not admissible cannot be recognized in a third State.

II. Judgments issued in the subject matter of the case – Grounds for nonrecognition 1. The res judicata effect The subject matter of a foreign judgment for the purpose of the recognition of the res judicata effect should be determined by the procedural law of the State rendering the judgment. Also, the question concerning the extension of the binding effect of the res judicata to the legal grounds17 of the judgment as well as the question concerning the persons bound by the judgment (the parties to the litigation or further third parties) are governed by the procedural law of the State rendering the judgment. The res judicata effect cannot be determined by the common European standards which are based on the criterion of the identity of the essential core issues (“core issue doctrine”, “Kernpunkttheorie”). This doctrine ex-

16 However, this is only a binding effect based on the Art. 29 § 3 and 31 § 3 Brussels Ia Regulation and not a “European res judicata”. See further Bach, ‘Deine Rechtskraft? Meine Rechtskraft!’, EuZW (2013) 58; Roth, IPRax (2014) 157; Althammer and Tolani, ‘Neue Perspektiven für einen gemeineuropäischen Rechtskraftbegriff in der Rechtsprechung des EuGH zur EuGVVO?’, ZZP Int (2014) 247; Schack, ‘Europäische Rechtskraft’, in Schütze (ed), Fairness Justice Equity: Festschrift für Reinhold Geimer zum 80. Geburtstag (2017), 617; Tsikrikas, ,Grenzüberschreitende Bindungswirkung von Prozessurteilen im europäischen Justizraum‘ ZZPInt (2017), 218. 17 In German ‘Entscheidungsgründe’, in French ‘motifs’.

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pands the res judicata effect to the substantive and procedural elements of a judgment.18 The res judicata effect governed and determined by the national procedural law and especially by the procedural law of the Member State rendering the judgment19 is extended automatically to the legal order of a third State and it can be limited either by the procedural law of the recognizing State (“Kumulationstheorie”) or by the procedural public policy of the latter.

2. The recognition of the effects of a foreign judgment is dependent on any important conditions provided by the procedural law of the recognizing State a)In the relationship between EU Member States and third States we have to take into consideration the grounds for non-recognition based on the jurisdictional mirror-image principle (“Spiegelbildprinzip”), the violation of the public policy of the recognizing State and, finally, the irreconcilability of the foreign judgment with a judgment rendered in the recognizing State. In the relationship between EU Member States and third States the international jurisdiction of the Member State’s courts is based not on the harmonized rules of the Brussel Ia Regulation, but on national procedural law. According to the so-called mirror-image principle, which is commonly used in many countries, the recognition of a foreign judgment based on international jurisdiction not existing in the recognizing State and especially on an exorbitant jurisdiction is prohibited.20 Thus, a judgment based on the international jurisdiction of the defendant’s property located in the State rendering the judgment, even if the claim is not connected with that property (“forum patrimonii”)21, or based on the nationality of the claimant, also based on international jurisdiction considered as exorbitant by the standards of the recognizing State, cannot be recognized.

18 Case 145/86, 4.2.1988, Hoffmann v Krieg, ECR 1988, 645; Althammer and Tolani, ‘Neue Perspektiven für einen gemeineuropäischen Rechtskraftbegriff in der Rechtsprechung des EuGH zur EuGVVO?’, ZZP Int (2014) 236 (237). 19 Geimer, supra at fn. 2, 86; Nagel and Gottwald, supra at fn. 2, § 12 Nr. 112; Schack, Internationales Zivilverfahrensrecht (2014), Nr. 881. 20 Geimer, supra at fn. 2, 114. 21 See e.g. § 23 German ZPO and Art. 40 of the Greek Code of Civil Procedure.

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b)Another important ground for refusing the recognition of a foreign judgment is its incompatibility with public policy (ordre public).22 Public policy as a ground for refusing the recognition of the res judicata effect of a foreign judgment includes the principles and the fundamental values of the current moral, economic and legal order of the recognizing State.23 Therefore, a judgment resulting from a proceeding which violates the principle of fair judicial procedure (due process) will not be recognized due to its incompatibility with the public policy of the recognizing State including that principle.24 Finally, a foreign judgment cannot be recognized, if it is not reconcilable with another judgment rendered between the same parties in the recognizing State.25 The irreconcilability of the judgments is based on their binding effects which should be determined by the procedural law of the State rendering the judgment on the one hand and of the recognizing State on the other hand and not by the common European standards which are based on the criterion of the identity of the essential core issues (“core issue doctrine”) expanding the res judicata effect to the substantive and procedural elements of a judgment.26

C. Especially: The recognition of the effects of provisional measures Cross-border recognition of provisional measures, having as their purpose to provisionally regulate legal relationships or to secure the future enforcement of judgments on the merits, is very important for the effectiveness of justice not only on a national, but also on the international level. Provisional measures which are granted by a Member State court without prior notice to the defendant (ex parte proceedings) can be recognized in third States only if the defendant had the opportunity to contest the court decision by appellate remedies and failed this opportunity. Other22 See e.g. § 328 Nr. 4 German ZPO and Art. 323, para. 5 of the Greek Code of Civil Procedure. 23 Geimer, supra at fn. 2, 126; Roth, in Stein and Jonas, supra at fn. 11, § 328 Nr. 43; Schack, supra at fn. 5, Nr. 951. 24 Geimer, supra at fn. 2, 135; Roth, in Stein and Jonas, supra at fn. 11, § 328 Nr. 43; Schack, supra at fn. 5, Nr. 953. 25 See e.g. § 328 Nr. 3 ZPO and Art. 323 Nr. 4 of the Greek Code of Civil Procedure. 26 Case 145/86, 4.2.1988, Hoffmann v Krieg, ECR 1988, 645; Althammer and Tolani, ‘Neue Perspektiven für einen gemeineuropäischen Rechtskraftbegriff in der Rechtsprechung des EuGH zur EuGVVO?’, ZZP Int (2014) 236 (237); Schlosser and Hess, EU-Zivilprozessrecht, Art. 45 EuGVVO Nr. 31.

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wise, their recognition violates the fundamental right of the defendant to be heard and furthermore it is contradictory to the fundamental principle of fair judicial procedure. Thus, the recognition of those provisional measures is incompatible with the public policy of the recognizing State. 27 Under the precondition of prior notice to the defendant, ‘ordonnances sur requête’ (summons) rendered according to French procedural law may be recognized and declared enforceable in other Member States of the European Union or in third States.28 According to French law in exceptional and urgent circumstances, when the defendant’s summoning may produce dangerous effects for the safeguard of the plaintiff’s rights (e.g. the debtor can alienate his assets) the court may issue a decision without the defendant’s summoning (“ordonnance sur requête”)29. Furthermore, according to German law in those exceptional circumstances an ex parte prejudgment attachment can be ordered (“Arrest”).30 ‘Ordonnances sur requête’ and ex parte prejudgment attachments can be recognized in other Member States or in third States only after their prior notice to the defendant31. Provisional remedies with effects against third persons, which do not have any opportunity to defend or contest the court’s decision, cannot be recognized or declared as enforceable in other Member States or in third States against the above mentioned third persons32. Furthermore, a foreign judgment cannot be recognized or declared as enforceable, if it is irreconcilable with another judgment rendered in the State of recognition. A court decision which grants a provisional measure to secure a substantive right is irreconcilable with another court decision, if the latter refuses the application on the same or of a functionally equivalent provisional measure, because the plaintiff does not possess the above substantive right. On the contrary, if the application’s refusal is based on the lack of other preconditions (urgent necessities or imminent danger), there is no irreconcilability between the two courts’ decisions, because those preconditions are different in any State.33 27 See further Tsikrikas, ‘Preliminary Judicial Protection: Interim and Freezing Injunctions in Civil Law Countries and in England’, in Gottwald (ed) Litigation in England and Germany (2010), 131. 28 Ibid. 29 Art. 493–498 French New Code of Civil Procedure, see Chainais, Ferrand, Mayer and Guinchard, Procédure civile (Droit interne et droit de l’ Union européenne) (2018), no. 1942. 30 Murray and Stürner, supra at fn. 9, 435 n. 109. 31 See further Tsikrikas, ‘Preliminary Judicial Protection’, supra at fn. 27, 131. 32 Ibid. 33 Ibid., fn. 27, 132.

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Only if the court of a third State refuses an application for granting a provisional measure to secure money claims, which concerns not only a specific movable or immovable property located in that State, but generally any property of the debtor, that decision is irreconcilable with any other court decision issued in a Member State which grants the same or a functionally equivalent provisional measure and therefore it prohibits its recognition and enforcement in the third State. The same should be accepted, when a regulatory provisional measure related to a debtor’s conduct which is not specified in a State is refused by the courts of a third State.34 Finally, the res judicata effect of a court decision which refuses the application for granting a provisional measure related to many Member States and third States (especially regulatory remedies) produces cross-border effects and prohibits any other application for granting the same or a functionally equivalent provisional measure (“ne bis in idem”).35

D. Conclusion The effectiveness of the judicial protection in cross-border cases is based on the mutual recognition of the effects of foreign judgments not only in the relationship between EU Member States but furthermore in the relationship between EU Member States on the one hand and third States on the other. For the purpose of minimizing the obstacle of the grounds for nonrecognition of the effects of foreign judgments provided by the national procedural law and especially by the incompatibility with the procedural public policy (“ordre public”) of the recognizing State, it is important for there to be convergence between EU Member States’ and third States’ civil justice systems. Such a convergence can be based on the Transnational Principles of Civil Procedure of 2004 drafted by UNIDROIT and the American Law Institute36 and the ongoing work of UNIDROIT and the European Law Institute in the development of European Rules of Civil Procedure.

34 Ibid. 35 Ibid. 36 Murray and Stürner, supra at fn. 9, 646.

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Commercial Litigation in the UK: A Future Outside the EU Richard Fentiman, Cambridge

Abstract The article focuses on the future regulation of international commercial disputes following Brexit. It considers the intended regime governing the applicable law and focuses on issues relating to jurisdiction and enforcement, taking into account the role of national law, the 2005 Hague Convention and the Lugano Convention. Apart from outlining this possible future landscape, the article asks whether future developments will pose a threat to London’s litigation market.

Keywords International commercial disputes – Brexit – applicable law – national enforcement rules – 2005 Hague Convention – Lugano Convention – London’s litigation market.

A. Introduction1 After much anguished debate, and the election of an unequivocally proBrexit government, the UK left the EU on 31st January 2020. EU law was to

1 Treatments of the matters considered here include: Rogerson, ‘Litigation PostBrexit’ (2016) New Law Journal, see at: https://www.newlawjournal.co.uk/content/li tigation-post-brexit-0 (last access at: 29.10.2020); Gillies, ‘Private International Law in a Post-Brexit UK: The Role of Residual Jurisdiction and Forum Non Conveniens’ (February 26, 2019): https://ssrn.com/abstract=3373869 (last access at: 29.10.2020); Merrett, ‘La reconnaissance et l’exécution en Angleterre des jugements venant des États de l’Union européenne, post-Brexit’ (2019) 2 Revue Critique de Droit International Privé, 385. For a full account of the issues, see the report of the UK House of Lords EU Justice sub-committee, Brexit: justice for families, individuals and businesses? (20 March 2017), and Government Response of 14 December 2017.

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remain in force, and the UK was to retain membership of the EU Single Market and Customs Union, until the end of a transition period on 31st December 2020. After that date, EU law ceases to apply in the UK. During the transition period the UK and the EU were to negotiate a Future Relationship Agreement providing for the legal regulation of matters previously governed in the UK by EU law. If no such agreement was reached at all (the ‘no deal’ scenario), or to the extent that no agreement was reached concerning a particular matter, domestic UK law will apply by default. UK law in this sense may take the form of existing rules of national law, or new statutory provisions. Such new provisions may in turn take the form of rules derived from EU law which are domesticated as rules of UK law. There are few aspects of UK law which are unaffected by this seismic change in the legal landscape or, just as important, by the enervating uncertainty as to what that landscape will look like – uncertainty which is likely to continue beyond the end of the transition period. These remarks are concerned, however, with only one area in which that change will be profound. Their focus is on the future regulation of international commercial disputes in cases involving EU and UK elements. These matters are of general importance and concern the future of civil cooperation within Europe in civil and commercial matters. They are of as much concern to lawyers in EU States as to English lawyers. For English lawyers, however, they have particular resonance for two reasons. London’s prominence as a hub for the resolution of transnational commercial disputes, especially commercial disputes, ensures that the future legal architecture is of paramount importance. But this in turn prompts a stark question: will London’s prominence be undermined by Brexit; what is the future for commercial litigation in London? These remarks are concerned therefore with two distinct but interconnected issues. One question is legal – what legal regime will regulate commercial litigation in the UK with EU connections? The other is economic – will London’s dominance in the legal services market (especially the litigation market) survive? The following discussion is, however, narrower than it might have been. First, it is explicitly concerned with the kind of complex high-value commercial litigation which is common in the commercial courts in London. This is not to deny, however, that an important conversation is ongoing

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about the effect of Brexit on other areas, notably on family, personal injury or consumer disputes.2 Second, these remarks address only civil litigation in the courts. In this respect, what follows is incomplete as an analysis of the London market for commercial dispute resolution, just as the future of London as a dispute resolution hub does not depend entirely on the state of civil litigation. It largely ignores arbitration as an element in the equation. In a recent survey3 about the effects of Brexit on litigation practice 29% of respondents indicated that they were considering arbitration as an alternative to litigation in the light of Brexit. Arbitration was and remains untouched by the Brussels regime, and far from the uncertainties surrounding enforcement post-Brexit, the New York Convention offers the certainty of enforcement throughout the EU. The consequence may be, not an erosion of the London legal services market after Brexit, but a rebalancing in favour of arbitration. For present purposes, however, the focus is on civil litigation and the future shape of regulatory competition between the English market for legal services and its competitors in the EU and beyond.

B. The future legal landscape Adopting an English law perspective, and focusing on contractual disputes between commercial parties, several questions of particular practical importance arise concerning how commercial disputes may be regulated in future: what law will an English court apply to regulate the parties’ contractual and non-contractual obligations in cases involving persons or subject matter connected with the EU; what law will an EU national court apply to regulate those obligations in cases involving persons or subject matter connected with the UK; when will an English court accept jurisdiction in a case involving an EU defendant or EU subject matter; when will an EU national court accept jurisdiction in a case involving an English defendant or English subject matter; how will an English court treat parallel proceedings in an EU national court; how will an EU national court treat parallel proceedings in an English court; how will an English court treat a jurisdiction agreement in favour of an EU national court; how will an EU 2 Although the United Kingdom is the political unit whose relationship with the EU is relevant in this context, these remarks are concerned principally with the law of England and Wales. 3 Thompson Reuters Legal Business, The Impact of Brexit on Dispute Resolution Clauses (2018).

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national court treat a jurisdiction agreement in favour of an English court; how will an English court treat the enforcement of a judgment obtained in an EU national court; how will an EU national court treat the enforcement of a judgment obtained in an English court? Such matters were subject to EU law for as long as the UK was a Member State, and remain subject to EU law for cases arising during the transition period. The law governing contractual and non-contractual obligations was and remains subject to the Rome I4 and Rome II5 Regulations, and issues concerning jurisdiction and the enforcement of judgments were and are subject to the Recast Brussels I Regulation.6 But what rules will govern at the end of the transition period? To answer, a distinction must be drawn between matters relating to the applicable law and matters of procedure concerning jurisdiction and the enforcement of judgments.

I. The applicable law At least at the outset, the rules governing contractual and non-contractual obligations will remain the same. By Art. 66 of the UK-EU Withdrawal Agreement, the familiar rules on the applicable law in contractual and non-contractual matters will apply to contracts concluded, or events giving rise to damage, before the end of the transition period.7 Thereafter, as far as later proceedings in English courts are concerned, the rules of the Rome I and Rome II regulations will be incorporated into UK domestic law.8 This straightforward domestication of these rules of EU law is possible because their application does not require the reciprocity which follows from membership of the EU. It reflects the fact that those rules are generally regarded as satisfactory, and the need to ensure certainty, especially concerning the law applicable to contracts. This apparently clear approach is subject, however, to two qualifications. The UK may amend the rules derived from those instruments, as it is entitled to do once they become rules of

4 Regulation 593/2008 on the law applicable to contractual obligations (Rome I). 5 Regulation 864/2007 on the law applicable to non-contractual obligations (Rome II). 6 Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 7 Withdrawal Agreement concluded between the UK and the EU on 19 October 2019. 8 The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc.) (EU Exit) Regulations 2019.

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English domestic law. Moreover, no longer subject to the unifying interpretative jurisdiction of the CJEU, the English courts may interpret these new rules unilaterally in a manner which differs from the approach in EU Member States. As this suggests, the legislative strategy in relation to choice of law matters is straightforward, but the implementation and consequences of that strategy may not produce the uniformity between the UK and the EU that some might have envisaged. Importantly, however, the way forward in relation to the applicable law is clear, and in one important respect the legal position is for all practical purposes certain. It is inconceivable that the UK will deviate, by legislative amendment or incremental interpretation, from the all-important rule in the Rome I Regulation which gives primacy to an express choice of a contract’s applicable law. For that reason an English court will continue to give effect to the parties’ express choice of English law, or indeed any other law. Importantly, moreover, that rule is universal in its effect, insofar as it makes no difference which law is chosen; it makes no difference whether the law selected is that of an EU or non-EU State. But what of the position in EU national courts? What law will an EU national court apply to regulate the parties’ obligations in cases involving persons or subject matter connected with the UK? Will such a court give effect to an express choice of English law in a contractual dispute? The simple answer is that it will. The primary choice of law rule of the Rome I regulation is universal and applies whether the law of an EU State is chosen, or the law of a non-EU State such as England. More difficult questions arise concerning jurisdiction and the enforcement of judgments.

II. Jurisdiction and judgments It was no doubt unrealistic to suppose that any comprehensive new arrangement concerning the regulation of jurisdiction and enforcement as between the EU and the UK could have been negotiated before the end of the transition period. This is perhaps surprising, and in principle such an arrangement could have been arrived at easily. The current Brussels 1bis regulation is regarded in both the EU and the UK as a satisfactory, if not always, optimal instrument. Its terms are familiar and its advantages (and disadvantages) well-known. It would have been possible in theory to provide that its terms apply beyond the transition period, or that the transition period is extended for the purposes of giving effect to the regulation until such time as any permanent arrangement is concluded. It was, how161

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ever, inconceivable that such a course would have been acceptable to the UK, which is committed to leaving the EU, most especially because the EU would inevitably require that the CJEU should retain control of the regulation’s interpretation. Nor would the EU have favoured such a course, given that provisions concerning jurisdiction and enforcement are likely to be seen as aspects of the Single Market, to which the UK no longer belongs. For similar reasons it is unrealistic to propose an alternative vehicle for achieving the same result, by providing that the rules of the Regulation shall take effect in future as the rules of a new bilateral treaty between the UK and the EU. Against this background, there are two possible ways forward for future legal cooperation between the EU and the UK.9 The first route is unilateral, and is not dependent on any agreement with the EU. This has two components. As a default position, issues concerning jurisdiction and enforcement as between the EU and UK will be necessarily become subject to national law in both the UK and in EU States. For the UK, this means that the rules which apply in any cases not subject to the Brussels 1bis regime will apply universally. The second component is the 2005 Hague Convention on choice of court agreements. The UK indicated at an early stage that it would ratify the 2005 Hague Convention on choice of court agreements,10 with the result that the Convention will take effect once the transition period expires. This requires no agreement with the EU. EU States are already subject to the Convention and the UK’s ratification can be unilateral. The second way forward is that, as an alternative to reliance on national law, but in addition to ratifying the 2005 Hague Convention, the UK government is committed to acceding to the 2007 Lugano Convention.11 This

9 In future, a further option may be the Hague judgments convention: Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. This may in future form part of the UK’s legal relationship with the EU, but it would not serve as a solution to the problems that will arise at the end of the transition period. Neither the UK nor the EU has as yet indicated its intentions concerning the Convention, although ratification by the EU is likely. Bilateral treaty arrangements existed between the UK and several EU States before the coming into force of the 1968 Brussels Convention, precursor to the Brussels 1 and Brussels 1bis regulations. Despite some contrary opinion, it is generally accepted that these are no longer in force. 10 Convention of 30 June 2005 on Choice of Court Agreements. 11 See the statement at: https://www.gov.uk/government/news/support-for-the-uks-in tent-to-accede-to-the-lugano-convention-2007 (last access at: 29.10.2020).

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cannot be achieved unilaterally and requires agreement between the UK and the States signatory to the Convention, including the States of the EU.

III. Resort to national law12 In principle, when the transition period ends, the rules of national law will be applied in both the UK and the EU in cases involving a combination of UK and EU elements. An English court will apply its national rules of jurisdiction in cases involving a defendant or subject matter connected with an EU Member State. Conversely, EU national courts will apply their national law in cases involving UK elements. Similarly, an English court will apply its national rules to the enforcement of judgments obtained in EU Member States, just as EU national courts will apply their local rules to the enforcement of judgments obtained in the UK. This provides certainty, not only as to which regime applies in such cases, but also as to the content of the applicable rules (insofar as the national rules applicable in English and EU national courts are familiar). In the context of jurisdiction, resort to national law should give rise to no difficulty. As far as proceedings in English courts are concerned, English law’s national rules of jurisdiction are both familiar and highly sophisticated. They have always existed in parallel to the rules of the Brussels regime and have applied in a significant number of cases outside the regime’s scope. In relation to proceedings in EU States the rules of the Brussels regime will continue to apply, save principally in cases where the defendant is UK domiciled. Where before the Brussels regime would have applied, the defendant’s domicile in what will have become a third state will lead to the application of national law in the state concerned. As in the context of proceedings in England, however, the only consequence is that already familiar rules will apply in more cases. Moreover, in one respect the loss of the harmonized EU regime may be advantageous. The regime’s problematic rules concerning parallel proceedings, embodied in Articles 29 and 30 of the recast Regulation, have always been a cause for concern, not least because of the encouragement Art. 29 offers to tactical

12 Report of the UK House of Lords EU Justice sub-committee, Brexit: justice for families, individuals and businesses? (20 March 2017), evidence of Fentiman, Merrett.

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forum shopping. An English court will no longer be bound to decline jurisdiction in the event of pre-emptive litigation in an EU State.13 The effectiveness of jurisdiction agreements is a central issue in commercial litigation. Agreements to the jurisdiction of the English courts will be protected, both in English proceedings, and before EU courts, to the extent that the UK has ratified the 2005 Hague Convention on choice of court agreements, with effect from the end of the transition period. But even in the absence of the Convention such agreements, like all agreements to submit to the courts of third States, would be respected in EU States pursuant to Articles 33 and 34 of the recast Regulation, as glossed by Recital 24.14 Concern has been expressed, however, that the need to rely on national enforcement rules in EU States is problematic and a matter of concern for the UK, and for litigants in UK courts. The supposed problem should, however, be put in context. In many states it is likely that UK judgments will be enforceable, if less conveniently and at greater cost. In such states UK judgments will often be enforceable under the doctrine of reciprocity. Judgments obtained in England would be enforceable on this basis because judgments from the state in question would be enforceable in like circumstances in England. This is very likely in countries where the principle of reciprocity governs because English law has a notably liberal approach to the enforcement of foreign judgments.15 Subject to possible defenses, any judgment is in principle enforceable in England if for a fixed sum of money and enforceable as a debt. In countries which adopt the reciprocity principle, the likelihood is that the judgment would be subject to an exequatur procedure, whereby leave to enforce must be sought from a court, interposing a procedural layer not present in the Brussels enforcement regime. Such costs are likely to be minimal, however. Even if the scope for refusal is limited, such proceedings will incur some additional costs. Of greater potential concern, it is also the case that the enforcement of judgments in some EU States might be prevented in the absence of a bilateral enforcement treaty between that State and the UK, and that certain

13 Equivalent problems will arise, however, in the event that the UK accedes to the Lugano Convention. 14 When considering a stay in favour of proceedings in the UK and EU national court will consider ‘whether the court of the third State has exclusive jurisdiction in the particular case in circumstances where a court of a Member State would have exclusive jurisdiction’. 15 Fentiman, International Commercial Litigation (2nd edn, 2015), [18.08]–[18.70].

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types of judgment (such as default judgments) would be unenforceable in some countries. This is clearly significant, though countries where this is a difficulty may be relatively few in number.16 What is the consequence if enforcement in all EU States can no longer be guaranteed and that costs may be marginally higher where enforcement is possible? The increased cost is unlikely to be material in the case of highvalue commercial litigation, and it is unclear what effect it may have in more straightforward cases. At first sight, the possibility that English judgments may be unenforceable in some EU Member States may seem more problematic. But this should be put in context. To the extent that some judgments are unenforceable the UK would not be in a perilous or even unusual situation. It would be in the same position as any non-EU State. This might deter some litigation in cases where enforcement in a non-enforcing state would be required, but it is unclear that this would be a common occurrence. Arguably, a greater problem is that commercial parties might be deterred from writing English jurisdiction agreements into their contracts in the absence of guaranteed enforcement in the EU. On reflection, however, it is fanciful to suppose that many such parties currently choose English jurisdiction with enforcement in the EU particularly in mind. Their perspective is likely to be more international. Certainly, the suggestion that resort to national enforcement rules is problematic assumes that in most cases defendants in English proceedings will have assets, or the entirety of their assets in an EU State or States. But there is no reason to suppose that this is the case. Non-enforcement in some EU States is therefore unlikely to be an overriding consideration, except for parties whose business is entirely or mainly within the EU. Moreover, global businesses already chose English jurisdiction in the knowledge that English judgments are not enforceable in every country in the world. The nature of that risk is unchanged in the absence of the Brussels regime, even if that absence exposes a few EU States where enforcement would no longer be possible. As this suggests, there is no reason to view the need to rely on national enforcement rules in EU States as materially problematic. It may lead to some increased costs in relation to the enforcement of judgments, at least in EU States, but this is unlikely to be significant (certainly by comparison with the likely value of the judgment to be enforced). It may also deter

16 For a useful analysis of the enforcement of third-state judgments in the EU, see Baumgartner, ‘How Well Do U.S. Judgments Fare in Europe?’ (2007) 40 Geo. Wash. Int’l L. Rev., 174.

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parties whose business is within the EU from choosing to litigate in the UK, either or an ad hoc basis or by contractual agreement. Otherwise, however, the fact that judgments are sometimes unenforceable, or not automatically enforceable, where a defendant has its assets (or some of its assets) is a commonplace in cross-border litigation. As this suggests, a regime for mutual enforcement is clearly optimal; but the absence of such a regime does not place the UK in a position which is unusual or which is a significant threat to the administration of justice. Importantly, in the context of English law, default to national law will lead to the application of rules which are familiar and which have always applied in a substantial number of cases not subject to the rules of the Brussels 1bis regulation. In principle, it will also open the way, for example, to the grant of antisuit injunctions to prevent proceedings in EU courts, a possibility denied under the Brussels 1bis regulation. 17 Moreover, because the operation of national law in such cases is a matter for the UK alone, it would be possible for the UK to adapt national law if required to suit the particular circumstances of the post-Brexit situation. For example, jurisdiction agreements in favor of the English courts have always been respected, but the procedural context in which such agreements are enforced is more cumbersome than under the Brussels 1bis regulation. A party who seeks to invoke such an agreement against a party outside England must seek the court’s permission to serve the claim on the absent party. It is possible that this requirement of seeking permission might be dispensed with in future so as to approximate the position in national law with that of the Brussels 1bis regulation.

IV. The 2005 Hague Convention18 The UK has indicated early on that it would ratify the 2005 Hague Convention on choice of court agreements, with the result that the Convention will take effect once the transition period expires.19 By its Declaration of 31 January 2020, the UK Government states that it attaches importance to the seamless continuity of the Convention’s coverage, and intends to de17 Case 159/02, 27.04.2004, Turner v Grovit, ECLI:EU:C:2004:228; Case 185/07, 10.02.2009, Allianz & Anor v West Tankers Inc, ECLI:EU:C:2009:69. 18 Convention of 30.06.2005 on Choice of Court Agreements. 19 Declaration of 31.01.2020 to the Government of the Netherlands: https://www.hc ch.net/en/instruments/conventions/status-table/notifications/?csid=1318&disp=res dn (last access at: 29.10.2020).

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posit a new instrument of accession before the termination of the transition period. The Convention is to be implemented by means of the Private International Law (Implementation of Conventions) Act.20 The UK was a Contracting State under the Convention by virtue of its being an EU State but will need to ratify the Convention unilaterally if the Convention is to remain in force after the end of the transition period. All EU States are already bound by the Convention, which the UK has the power to ratify unilaterally without further negotiation with the EU. The consequence is that an English court will normally accept jurisdiction on the basis of an agreement to the exclusive jurisdiction of the English courts,21 while an EU national court will decline to exercise jurisdiction in such a case,22 and enforce any judgment obtained in English proceedings founded on such an agreement.23 Conversely, an English court will give like effect to an agreement in favour of the courts of an EU State. This approach achieves certainty in an important area by ensuring the continued effectiveness of contractual jurisdiction agreements. Not least it eases any concern that agreements to the jurisdiction of the English courts (at least, exclusive jurisdiction agreements), will be ineffective in EU States once the UK leaves the Brussels 1 regime. Implementing the Hague Convention is not, however, without difficulty in this context. First, the Convention applies only to exclusive jurisdiction agreements. It does not apply to non-exclusive agreements, nor (importantly) to the asymmetric jurisdiction agreements ubiquitous in commercial transactions.24 The omission of asymmetric agreements is of particular concern given the significant volume of commercial documentation which incorporates asymmetric agreements in favour of the English courts. Second, the status of exclusive jurisdiction agreements concluded before the accession of the UK to the Convention on 1 January 2021 is uncertain. Particular concern surrounds agreements to the jurisdiction of the English courts. Is the Convention to be treated as having been in force in the UK

20 The passage of the Bill into law has not been straightforward. The House of Lords Constitution Committee has concluded that insofar as it was intended to implement the Convention, an international agreement, by a statutory instrument rather than act of Parliament, this was an inappropriate delegation of power, and that it should be removed from the Bill. 21 Art. 5. 22 Art. 6. 23 Art. 8. 24 Hartley and Dogauchi, Explanatory Report on the 2005 Hague Choice of Court Agreements Convention (2005), para. 32.

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since the date when the EU (including the UK) acceded to the Convention, namely 1 October 2015? Or does it apply only to agreements concluded after the date of the UK’s unilateral accession, namely 1 January 2021? The matter is unresolved, although it is unclear why an agreement which was subject to the regime while the UK was an EU State should cease to have this status given that exactly the same regime will apply after 1 January 2021. The European Commission has apparently taken the opposite view,25 although its statement has no legal status.

V. The Lugano Convention26 The UK Government is committed to acceding to the 2007 Lugano Convention.27 This already applies in all EU States, as well as in Iceland, Norway and Switzerland. Accession must be requested by the UK and accepted by the EU, but has already been supported by Switzerland, Iceland and Norway. If acceptance is forthcoming the UK will accede to the 2007 Convention at a date after the transition period ends on 31 December 2020. This approach is intended to ensure that a regime very similar to that of the Brussels I regime will continue to apply between the UK and the EU. It achieves a harmonized approach by avoiding reliance on national law. It reduces the potential cost of enforcing judgments under national law, and removes any obstacle to enforcement in those EU States in which enforcement depends on the existence of a bilateral treaty with the UK. The Lugano Convention also provides protection for jurisdiction agreements in cases involving non-exclusive and asymmetric jurisdiction agreements, which are not protected by the 2005 Hague Convention. More generally, the Lugano Convention offers a comprehensive procedural regime, unlike the narrowly focused Hague Convention. It addresses matters relating to jurisdiction and enforcement, as well as protective measures. Above all, perhaps, acceding to the Convention would solve what is often seen as the principal problem following from the loss of the Brussels regime, namely

25 Statement by the European Commission, Questions and Answers Related to the United Kingdom’s Withdrawal from the European Union in the Field of Civil Justice and Private International Law, 11.04.2019. 26 Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 339, 21.12.2007, 3–41. 27 See the statement at: https://www.gov.uk/government/news/support-for-the-uks-in tent-to-accede-to-the-lugano-convention-2007 (last access at: 29.10.2020).

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the absence of a comprehensive regime for the enforcement of English judgments in EU States. It might be said, however, that to accede to the Lugano Convention is not without potentially negative consequences. These are said to stem from the fact that the Convention replicates the former Brussels I Regulation and so retains the well-documented defects in that instrument which were remedied by the 2012 recast Regulation. In particular, the Convention does not protect jurisdiction agreements from tactical torpedo actions, as does Art. 31(2) of the recast Regulation, reviving the spectre of the CJEU’s decision in Eric Gasser GmbH v MISAT.28 Nor does it contain provisions concerning parallel proceedings in third States, a matter addressed in Articles 33 and 34 of the recast, reopening the controversy surrounding Owusu v Jackson.29 Adopting the Convention also involves a concession by the UK that the CJEU should have some role after Brexit. Art. 1 of the Second Protocol to the Convention provides that the courts of Contracting States ‘shall pay due account to the principles laid down by any relevant decision’ by the courts of another such State or by the Court of Justice. It is possible, however, that these difficulties should not be regarded as decisive. First, the possibility that damages might be awarded for breach of contract in such cases offer a means to mitigate, if not to remove, the problem of torpedo actions.30 Similarly, jurisdiction agreements might be reinforced by making express provision for payment of an indemnity by a party who sues contrary to the agreement.31 Second, it is unclear to what extent the presence of Articles 33 and 34 can be said to have resolved the problems emanating from Owusu. The familiar difficulties associated with Articles 33 and 34 suggest that those provisions have exacerbated rather than solved the problem of alternative proceedings in non-EU States.32 The contrast between the Convention and the Regulation is thus less stark. 28 29 30 31

Case C-116/02, 09.12.2003, Erich Gasser GmbH v MISAT Srl.. ECLI:EU:C:2003:657. Case C-281/02, 01.03.2005, Owusu v Jackson, ECLI:EU:C:2005:120. Fentiman, International Commercial Litigation (2nd edn, 2015), [2.248]–[2.272]. Ibid., [2.73]–[2.79]. Arguably, the problem of torpedo actions may be solved by the grant antisuit injunctions. Such injunctions are illegitimate in cases subject to the Regulation because of the EU principle of mutual trust between EU States, but might be permitted in future because the UK would no longer be such a State and this consideration would not apply. The prohibition is commonly assumed, however, to apply equally to the Lugano regime: Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd [2005] 1 Lloyds Rep 67 (CA), [78]–[97]. 32 Ibid. [12.44]-[12.67].

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Third, in an important way it is possible that the position under the Lugano Convention is preferable. The English courts have endorsed the doctrine of ‘reflexive effect’ as a route to staying proceedings under national law where an English court’s jurisdiction derives from the Lugano Convention,33 which may not be true of the Regulation. Fourth, although the timing is uncertain, it is possible that the Lugano Convention will in due course be renegotiated so as to bring it into line with the Brussels 1bis regulation, just as the Convention was previously updated to approximate to the previous, un-amended Brussels I regulation. Finally, the role of the CJEU, although politically sensitive, should not be overstated. The obligation on English courts is merely to have regard to the decisions of the Court of Justice. Indeed, it might be argued that this imposes few constraints on the courts of Convention states. Such considerations lead to the conclusion that the unreformed text of the Convention may not be problematic, or not materially so, certainly not when set against the advantages in having a harmonized jurisdiction and enforcement regime. It is presently uncertain, however, that the UK will be permitted to accede to the Convention.34 More precisely, it may not be permitted to do so unless it agrees to continue as a participant in the European single market. This is because the Convention may be seen an element in facilitating the single market to which all its parties are to some extent participants, whether as EU or EFTA states. It is far from clear, however, that this position is coherent, or required to uphold the principles of EU law. It is true, as the CJEU has stated, that a uniform European private international regime has the effect of furthering the goals of economic integration.35 But it does not follow that it lacks independent value irrespective of those goals; it is not justified only to secure the benefits of economic cooperation. Nor is participation in the single market necessary to ensure that the UK benefits illegitimately from membership of the Lugano regime. There are no such benefits, or none that do not equally benefit EU States for whom a common regime governing jurisdiction and the enforcement of judgments is not mutually beneficial. Indeed, any accusation that the UK is seeking to ‘cherry pick’ only favourable aspects EU law by acceding to the Convention is misconceived given that the advantages are shared equally by the UK and all the Member States.

33 JSC Commercial Bank Privatbank v Kolomoisky [2019] EWCA Civ 1708. 34 At the time of writing, 10.08.2020. 35 Case C-281/02, 01.03.2005, Owusu v Jackson, ECLI:EU:C:2005:120.

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VI. An interim conclusion As this suggests, there are different means to ensure cooperation in civil justice between the EU and the UK following the UK’s final jettisoning of the EU’s rules on 31 December 2020. None is free from difficulty, although those difficulties stem primarily from uncertainty as to how they will function and may be seen as temporary. None entirely replicates the current EU regime, although that regime, although familiar, is not without familiar problems of its own. Indeed, even though that regime has considerable advantages, it should not be forgotten that it has always sat uneasily in the very different procedural and legal-cultural context of English law.36 Although the point should not be overstated, much of the concern expressed about the UK’s departure from the EU civil justice regime may stem from the uncertainty that lies ahead, or from the short-term difficulties of adjustment, rather than a substantive preference for the Brussels 1bis regime over the alternatives. In this regard, it is important to emphasize that the English common law rules, the 2005 Hague Convention on choice of court agreements and the Lugano Convention, are familiar regimes. This applies especially to the common law rules, which have never ceased to apply in a significant number of cases, and the Lugano Convention, which has long been in force and closely resembles the Brussels regime. It might be said that this represents an English perspective, and the concerns of English lawyers about the rules applicable in English courts; it might be said that this ignores the position in EU national courts, and in particular the future enforcement of English judgments in EU States. Insofar as the Hague or Lugano conventions apply, enforcement clearly presents no difficulty. But even if they do not, Cassandra-like warnings about the unenforceability of English judgments are, as we have seen, misplaced. Cooperation in civil justice as between the EU and UK will clearly be different in the future. But robust and viable means exist to ensure that it will continue. Objectively judged, it is hard to see what detriment would be caused to English law, but a different question nonetheless remains: will the loss of the EU regime undermine London’s status as a global litigation hub?

36 Fentiman, ‘The Harmonisation of Civil Jurisdiction’ in Arnull and Chalmers (eds), The Oxford Handbook of EU Law (2015).

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C. London’s future as a litigation hub I. A law and jurisdiction of choice37 The English courts, in particular the Business and Property Courts, and most especially the Commercial Court in London, enjoy a unique position globally in the resolution of international commercial disputes.38 London is for many corporate litigants the venue of choice for resolving their disputes, reflected most obviously in the use of English governing law and jurisdiction clauses in transnational transactions. There are few cases which do not involve foreign parties, foreign subject matter, foreign law, foreign evidence, foreign assets, or parallel foreign proceedings – or a combination of all these elements. Strikingly, of the cases heard by the Commercial Court most involve at least one foreign party and many concern disputes neither party to which is English. In 2017–2018, 40% of litigants in the Commercial Court were from the UK; 60% were from outside the UK. Only 47 (30%) of the 158 cases heard (not those started) were between two UK parties. 70% involved disputes neither party to which was from the UK. This has the consequence that commercial litigation in England is to a large extent international, while London’s Commercial Court is in character an international not domestic forum. Importantly, however, London’s role as a dispute-resolution centre is both a cause and an effect of London’s global dominance in legal services generally. The prevalence and international character of litigation in London reflects the fact that many transactions, especially financial transactions, are concluded in London, involving English law and English lawyers. This in turn reflects the prominence of the City of London as a global financial centre. For this reason, questions about the future legal regime for commercial disputes in the UK must be 37 See further, Fentiman, Ch 1; Lein, McCorquodale, McNamara, Kupelyants, del Rio, Factors Influencing International Litigants’ Decisions to Bring Commercial Claims to the London Based Courts (Ministry of Justice, 2015), see at https://assets.publishi ng.service.gov.uk/government/uploads/system/uploads/attachment_data/file/3963 43/factors-influencing-international-litigants-with-commercial-claims.pdf (last access at: 29.10.2020). 38 In 2017 a number of courts handling commercial cases, each having a different history, jurisdiction and procedure, were grouped together and designated as The Business and Property Courts of England and Wales. The relevant courts are the Commercial Court, the Admiralty Court, the Technology and Construction Court, and the courts of the Chancery Division. Despite the official title, it is common to speak of them collectively as the ‘commercial courts’.

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seen in a wider context. It is but an aspect of a wider economic phenomenon, the interconnected markets for financial and legal services in London. The interconnected world of legal and financial services in London represents a complex, and in many respects unique, ecosystem. As this implies, the economic importance of these interwoven markets, and of commercial litigation within it, is considerable. Certainly, the market for cross-border legal services in England is a significant source of invisible export earnings for the UK. What explains the UK’s prominence – indeed, London’s prominence – as a litigation hub? The popularity of litigation in the Commercial Court, and the considerable volume of international disputes there, is explained by a number of factors.39 The Commercial Court is regarded by many foreign parties as a forum which is efficient, fair, and commercially orientated. It is also seen as neutral, in the sense that non-English parties from different countries may favour selecting a law and jurisdiction different from either of their own. The attraction of the Court is further enhanced by the range of global interlocutory remedies available, principally anti-suit injunctions and worldwide asset-freezing injunctions. This centripetal pull towards litigation in London is further enhanced by four particular factors: First, many commercial transactions, especially in the areas of finance and reinsurance, are governed by English law. It is a matter of speculation whether the frequency with which commercial parties choose English jurisdiction follows from a choice of English law as the governing law or vice versa. But the preference for English governing law is nonetheless a significant element in the magnetic pull of London as a legal services hub. This preference is in turn driven by the perceived commercial orientation and relative certainty of English commercial law. Not least this is because of the limited role given in English law to such destabilizing elements as public policy and overriding mandatory rules, and the limited scope given to indeterminate considerations of good faith. Once English law has the status as a market leader it follows that parties will opt for the jurisdiction of the English courts, reflecting the truism that no court applies any law better than it applies its own. 39 Fentiman, International Commercial Litigation, end ed (2015), Ch 1; Lein, McCorquodale, McNamara, Kupelyants, del Rio, Factors Influencing International Litigants’ Decisions to Bring Commercial Claims to the London Based Courts (Ministry of Justice, 2015), see at https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/396343/factors-influencing-international-liti gants-with-commercial-claims.pdf (last access at: 29.10.2020).

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Second, the preference for English law and jurisdiction reflects the fact that in many cases this is a choice of local law and jurisdiction. The court also serves as a local forum for resolving disputes related to prominent London markets in shipping, insurance, investment, and banking, whose business is international. In addition, many commercial parties are also exposed to English jurisdiction, by having a branch in England, or because a transaction is expressly subject to English law, or to the English court’s jurisdiction. Many foreign parties may have English insurers, for whom London is their local court. Many such parties may have English lawyers, and the popularity of the Commercial Court owes much to the role of Londonbased global law firms in managing international litigation. Third, intimately tied to these factors, commercial parties may favour English law and jurisdiction, perhaps without reflection, simply because this is often the market norm. As with any market, habit, familiarity, and the fact that other market participants act in the same manner, are potent drivers of behaviour. In that sense, London’s prominence is a product of inertia. Fourth, in an important sense civil litigation in the English courts is parasitic upon London’s role as a centre for international commercial arbitration. Paradoxically, it is the parties’ preference for arbitration in London (no doubt under English law) which generates civil litigation as a by-product. This is because the English courts exercise ancillary jurisdiction over local arbitration, not least through the grant of supportive remedies such as freezing and antisuit injunctions. Matters relating to arbitration constitute approximately 30% (a ‘significant proportion’) of the cases in the London Commercial Court.40 As has been said, the court’s is ‘crucial to the success of the jurisdiction of England and Wales in arbitration’, and the importance of its supervisory role ‘cannot be overstated’.41

II. A rational answer Will this prominence in the resolution of commercial disputes be compromised in future? As we have seen, there are defensible, robust and practical means to ensure certainty, efficiency and justice in cross-border litigation once the UK leaves the EU private international law regime. There are clear answers to such important questions as whether an English govern-

40 The Commercial Court Report 2018–2019, 7. 41 The Commercial Court Guide (10th edn, 2017), 6.

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ing law clause will continue to be effective, in an English or EU national court; or whether a jurisdiction agreement in favour of the English courts will continue to be upheld, in an English or EU national court; or whether judgments obtained in the UK will be enforceable in EU Member States and vice versa. There will be no legal vacuum, which only a new treaty can fill. There will be no loss of coverage in these important areas of civil cooperation. There are, in practice, no substantial reasons why litigants or those drafting jurisdiction and governing law clauses should modify their current practices. Insofar as it is common practice for parties to commercial litigation to favour English proceedings subject to English law there are no intellectually convincing arguments for doing otherwise. These arguments relating to the viability of any future regime are reinforced by those other considerations which make London an attractive location for dispute resolution. None of these will be affected by the UK’s departure from the EU. This is reinforced by further considerations: First, the UK’s departure from the EU involves no change in the substance of English contract and commercial law. Just as this has no effect on the rules for identifying English law (or any law) as the applicable law, so it makes no difference to the content of that law. Whatever reasons contracting parties might have for choosing English law still obtain. Second, the issue of enforcing English judgments in EU States – often presented as a decisive consideration – has, as we have seen, an exaggerated significance in the debate. Third, whatever individual elements may in future detract from London’s prominence, the combination of factors which account for that prominence is distinctive, perhaps unique. In particular, the established ecosystem and embedded infrastructure of the London legal services market may be hard to replicate elsewhere. Fourth, the symbiotic relationship between litigation and arbitration will no doubt continue to promote the business of the London commercial courts. This is true in a direct sense, insofar as a significant proportion of cases in those courts relate to arbitration. But it is also true indirectly, insofar as London’s role as an arbitration hub contributes to a concentration of expertise and infrastructure in the area of dispute resolution generally. As we have seen, however, particular concern surrounds the common practice whereby commercial parties select the English courts as their sole jurisdiction of choice. Will the risk that judgments obtained in England may be unenforceable in some EU States cause potential litigants to select the courts of an EU country? Such parties must weigh the considerable advantages associated with litigation in England against a risk of non-en175

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forcement in a minority of EU States. They may conclude that those advantages outweigh a risk that arises in only a few cases. Alternatively, concerned parties might adopt a different strategy based on the fact that those states where enforcement is prevented are known. A way to reconcile the advantages of English litigation against the calculable risk of non-enforcement is to employ any one of a number of drafting techniques. Most obviously, the parties might agree to the non-exclusive jurisdiction of the English courts, thereby giving the English courts jurisdiction but permitting proceedings elsewhere (including in an EU Member State). This might be combined with an agreement that proceedings may not be commenced elsewhere once they have started in England. Or they might employ an asymmetric jurisdiction agreement, which might take one of several forms. The parties might agree to the exclusive jurisdiction of the English courts provided that one party, such as a lender, is entitled to sue in any other court of competent jurisdiction (including necessarily a court in an EU State). Or they might agree to the exclusive jurisdiction of the English courts provided that one party may sue in another named court in an EU State. As this suggests, the drafting tools are at hand to enable a potential litigant to square its preference for litigation in England with the reality that English judgments are not invariably enforceable in all EU States.

D. Two conclusions Each element in the foregoing analysis requires a separate summation.

I. The future legal landscape Consider first the future legal landscape: What will succeed the EU civil justice regime? Is the loss of that regime problematic? As we have seen, the loss of the EU private international regime is unlikely to be the rupture that might be supposed. The transplantation of the Rome I and Rome II Regulations into domestic law will leave unchanged the UK’s approach to choice of law in the area of obligations. True, the interpretation of those instruments by the English courts may lead to some divergence with the rest of Europe. But this is not itself problematic, and has no consequences in EU States. The loss of the Brussels 1bis regulation is potentially more dramatic, and there may be reasons for preferring that regime to continue

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in force, either directly or in the form of a treaty in the same terms. But whatever replaces it – the Lugano Convention or the common law, each augmented by the Hague Convention – offers a viable alternative. The law may be different, and there may be initial uncertainty, but the loss of the Brussels regime amounts to a change not a problem. Importantly, the combination of the common law and the 2005 Hague Convention will provide robust regulation in an area of key importance in commercial litigation, the protection of exclusive jurisdiction agreements. It will prevent pre-emptive litigation in EU States with the intention of evading such an agreement in favour of the jurisdiction of the English courts, and will ensure the enforcement of any judgment obtained in English proceedings founded on such an agreement. In other cases, English national law and that of each EU State will provide a stable basis for the exercise of jurisdiction, and in most cases the enforcement of English judgments in EU countries. In such cases, other advantages will follow, such as the revival of a discretionary approach to jurisdiction in English proceedings, and of the power to prevent unconscionable proceedings by means of antisuit injunctions. Against this background, the case for acceding to the Lugano Convention is not necessarily overwhelming. But the UK is committed to acceding, and the consequence would be a comprehensive jurisdiction and judgments regime in which any concerns about the potential enforceability of English judgments within the EU is removed. Importantly, however, in the event that the UK does not accede to the Lugano regime – or does not do so immediately on exiting the transition period – the consequences (objectively and realistically judged) would not be damaging.

II. London’s future as a legal hub Consider next the future of London as a litigation hub: is the loss of the EU regime an existential challenge? Given the first conclusion offered above, it might be thought that London’s role as a litigation hub is assured. On inspection, however, the position is more complex, and the challenge to London greater, for several reasons. First, the debate must be set in the context of enhanced regulatory competition between dispute-resolution centres. There is growing regulatory competition within the EU and beyond the EU as states compete in the market for legal services. New commercial courts have opened, designed in part to rival London, and in part to exploit the economic opportunities of Brexit. London’s market share has been under threat for some time, tradi177

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tionally from New York, Hong Kong and Singapore, and potentially from the Dubai International Financial Centre Courts (DIFC), the Qatar International Court (QIC), the Abu Dhabi Global Market Courts (ADGMC) and the Singapore International Commercial Court (SICC). But Brexit has sharply increased the threat level. Brexit potentially threatens the enforceability of English jurisdiction agreements in the EU, and the enforcement in the EU of English judgments. Five European cities – Paris, Dublin, Amsterdam, Brussels and Frankfurt – have announced the potential launch of, or increased funding for, English-speaking courts. In addition a proposal has been made for a European Commercial Court. As this suggests, alternatives now exist to the London litigation market. Second, the traditional preference of commercial parties for English law cannot be taken for granted. The supposed advantages of English law are familiar, notably its commercial orientation and the absence of such destabilizing elements as a doctrine of good faith in relation to contracts and a broad conception of public policy. But market practice, including how documentation is drafted, is as much a matter of habit and familiarity as science. London has benefited from the habit of choosing English law and jurisdiction, but habits may change. Third, even if the range of future legal regimes post-Brexit is clear, and even if the risk and uncertainty which they involve are defined and minimal, the mere existence of uncertainty is a driver. Anecdotal evidence suggests that the very fact that the precise scope of the future landscape is unknown (even if the alternatives are apparent) is a cause for concern. These trends are already evident in the market reaction to the loss of the EU regime, although the true message is ambiguous. 64% of respondents to a recent survey indicated that they were reconsidering the dispute resolution provisions in standard form documents previously subject to English law and jurisdiction.42 Importantly, however, such prudence is hardly surprising, and a smaller but not dissimilar number, 54%, indicated that they were considering no such change. Again, in July 2018, ISDA (International Securities and Derivatives Association) introduced new Irish and French law versions of its ISDA Master Agreement so as to allow members the opportunity to avoid any risk associated with its long-standing English law version. To make this option available is not to say that it will be used, or with what regularity, but it demonstrates that the traditional adherence of commercial parties to English law should not be taken for granted.

42 Thompson Reuters Legal Business, The Impact of Brexit on Dispute Resolution Clauses (2018).

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As this suggests, even if rationality suggests that London’s role is secure, markets (including the market for legal services) are driven by sentiment, not reason. As we have seen, commercial parties may have favoured English law and jurisdiction unreflectively for no reason other than the fact that this is the market standard. They may have done so because of habit and familiarity. They may have done so because the herding familiar in any market. Market participants behave like other market participants. Such herding is not, however, a static phenomenon. If the herd moves, and if sufficient members of the herd join that movement, it gains a momentum of its own. As this suggests, if the choice of English law and jurisdiction ceases to be the market standard for some, it may cease to be the market standard for others. This phenomenon is in turn tied to the role of inertia in explaining market preferences. Arguably, English law and jurisdiction have prevailed because market actors have seen no reason to act otherwise, and because familiarity connotes safety and permits a measured calculation of risk. It is possible, however, that Brexit has shaken that sense of security. Even if the alternatives are not risk-free the safety associated with the traditional adherence to English and jurisdiction has gone. As these considerations suggest, it is too early to predict what the economic consequences will be of the UK’s departure from the EU jurisdiction and judgments regime. Indeed, it may be some time after the UK’s final departure from the EU regime that the new normal will crystallise. Two conclusions may be offered with certainty, however: First, Brexit does not undermine English law, or present the courts and litigants with problems they cannot solve. Nor is it necessarily an existential threat, or even a significant threat, to the London market for dispute resolution. It is, however, a factor which prospective litigants will need to balance against the compelling reasons for litigating in London under English law in making their selection of forum. Second, it may not be dispassionate legal analysis, or even a scientific assessment of the risks that Brexit poses for litigants, that will decide the fate of London as a litigation hub, and preserve the choice of English law and jurisdiction as industry standards. It is market forces and the sentiment that drives them.

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Recognition and Enforcement of Judgments Between the European Union and Russia: Possible Prospects Vladimir Yarkov, Ekaterinburg

Abstract The article is devoted to the regulation of relations between the Russian Federation and the EU in the sphere of mutual circulation of judicial acts. The author identifies and analyses a number of key problems in this area, and suggests possible solutions.

Keywords Russia – the European Union – International enforcement proceedings – mutual recognition and enforcement of State courts’ decisions.

A. Introduction One of the forms of realization of the right to judicial protection and access to justice is the free circulation of judicial acts, through which the rights and legitimate interests of citizens and organizations are protected. Several differences between national laws governing the jurisdiction, recognition and execution of judicial acts make such free circulation difficult. Measures relating to legal cooperation in civil matters are necessary in order to achieve the goal of free circulation of judicial acts.

B. International greements as a measure to ensure free circulation of judicial acts One of the tools to achieve this goal is the conclusion of international agreements through which it is possible to gain multiple results. Firstly, in such agreements often the rules on international competence (juriscdiction) in civil and commercial matters are unified, which allows

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minimizing the possibility of jurisdictional conflicts between courts of different States. Branovitsky rightly draws attention to this aspect and shows the importance of the European system of direct competence in the formation and development of a single legal space within the EU1. Secondly, procedural formalities are usually simplified in such agreements in order to speed up and facilitate the procedure for mutual recognition and execution of court decisions, in particular, within the strictly defined list of grounds for refusal to recognize foreign judicial acts. Thirdly, the free circulation of judicial acts by which the rights and legitimate interests of citizens and organizations are protected is one of the forms of the right to judicial protection and access to justice2. It is rightly stated in doctrine that the right to a fair trial, which is established both by Art. 6 of the European Convention for the Protection of Human Rights and by the Constitution of Russia, includes the right to execute a judicial act in a cross-border aspect3. The conclusion of an international treaty on judicial cooperation serves to ensure the above-mentioned constitutional procedural rights and, from Russia’s perspective, considerably increases the investment attractiveness of the Russian Federation. Moreover, is ensures the proper support for cooperation between participants in international business turnover. Issues of international legal assistance are regulated today by bilateral treaties between Russia and certain EU States and by the Hague Civil Procedure Conventions of 1954, 1965 and 1970, which have been ratified by Russia and the majority of EU countries. The most difficult situation appeared, however, in the sphere of recognition and enforcement of foreign court decisions, as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 does not apply to judgments of state courts. In Russian civil procedural law, recognition and enforcement of foreign judgments generally allowed on the basis of rules, which are basically similar to those in most EU States. However, there is one fundamental distinction. According to the provisions of Art. 221 of the Russian Code of Arbi-

1 Branovitsky, Rapprochement (harmonization) of civil procedural law within the European Union and in the post-Soviet region (in Russian), Moscow, Statut (2018), 146– 149. 2 Yarkov et. al.. Some Problems of the Internationalization of the Civil Process and Civil Jurisdictions in Russia // Arbitration and Civil Procedure (2006), N 1., 3 Krief-Semitko, On recognition and execution of foreign decisions in Russia (Russian-French perspective) // Bulletin of the Federal Chamber of Lawyers of the Russian Federation (2008), N 2.

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trazh Procedure (hereinafter – APC) and Art. 409 of the Russian Code of Civil Procedure (hereinafter – CPC) it is necessary to have a treaty (dedicated to issues of recognition and execution of foreign courts’ decisions) ratified by the Russian Federation and the State of origin of the court decision, which is considered for exequatur. In addition, Art. 241 APC also provides for the possibility of recognizing and enforcing decisions of foreign courts “in accordance with federal law”. However, there is no such law in the Russian Federation as to foreign judgments in civil and commercial matters. The principle of reciprocity as a basis for recognition and execution of a foreign court decision is enshrined as a general rule only in Art. 1 of the Russian Federal Law “On Insolvency (Bankruptcy)”. Thus, in the Russian legal system, in the absence of a treaty between Russia and a particular EU State, compulsory execution of a decision rendered by a court of an EU State on the territory of the Russian Federation is impossible. Generally speaking, there is a need to resolve disputes in State courts in particular in the following areas of legal relations: • in commercial disputes without an arbitration clause, or in the presence of jurisdictional conflicts in the contract terms, • in commercial disputes of tort nature, related with an injury caused out of obligations, • when using simplified and accelerated forms of dispute resolution, including interim measures, • in cross-border insolvency cases, • in international family disputes – about children and their place of residence, alimony, the status of the spouses’ property, hereditary cases. Whenever such cases have an international dimension, the lack of international treaties may have very negative consequence for the protection of substantive right of parties linked in one way or the other with Russia.

C. Relations between the Russian Federation and the European Union I. The main stages of development of relations in the field of legal cooperation between the Russian Federation and the European Union First, it should be noted that the European Union is the main economic partner of the Russian Federation. According to statistics for 2016, EU

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countries accounted for 44.8% of total Russian trade4. According to the information on the website of the European Commission, the EU is the main trade and investment partner of Russia, while Russia is the fourth economic partner for the EU5. This illustrates the importance of resolving legal issues, which arise in the process of economic cooperation and interaction between the EU and Russia. Legal cooperation between Russia and the EU has a long history and is divided into several levels: • the level of bilateral treaties concluded between Russia and individual EU States; • the level of the general Russia-EU Agreement concluded in 1994, • the level of international conventions and treaties developed within the framework of the Hague Conference on Private International Law, the UN and its specialized organizations (UNCITRAL etc.). The current main legal bases for cooperation in civil and family matters on the side of Russia are bilateral treaties. According to my calculation, only 16 of 28 EU Member States have bilateral treaties on various aspects of legal cooperation with Russia, including the enforcement of court decisions: Bulgaria, Hungary, Greece, Spain, Italy, Cyprus, Latvia, Lithuania, Poland, Romania, the Czech Republic, Slovakia, Slovenia, Finland, Croatia and Estonia. Firstly, it should be noted that most of these treaties were concluded long ago, many of them with the USSR. Secondly, they provide different levels and forms of legal cooperation, including the sphere of mutual recognition and enforcement of court decisions. For example, such recognition has very limited possibilities of realization in the treaty between the USSR with Finland. More conditions that are favorable may be found in treaties with Cyprus, Spain and Italy. In agreements concluded with a number of States in the Soviet period (Romania, Hungary, former Yugoslavia), the range of regulated issues is quite wide. Agreements with the Baltic States (Latvia, Lithuania and Estonia) also differ in the details of regulation. However, many legal assistance treaties do not cover all types of court decisions. There are still no such agreements with such major

4 Website of the Permanent Representation of Russia in the EU, see https://russiaeu. ru/ru/torgovlya (last access at: 29.10.2020). 5 Website of the European Commission, https://ec.europa.eu/trade/policy/countriesand-regions/countries/russia/ (last access at: 29.10.2020).

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trade and legal partners of the Russian Federation such as Germany and France.

II. Negotiations: Is there light at the end of the tunnel? The development of our cooperation in civil and commercial matters has a history of over 20 years. Let us highlight the key acts and actions of the EU and Russia in this area. The Partnership and Cooperation Agreement (PCA) between the EU and Russia, which remains the basic legal source on cooperation between the two sides, was concluded on 24.06.1994 6. Hence a partnership between the Russian Federation and the European communities and their Member States was established. This partnership has created a general framework in different spheres, including the area of legal cooperation. In particular, Art. 98 of the PCA establishes the following rule: “Each Party is obliged to ensure free access to the competent courts and administrative bodies for all natural and legal persons of the other Party in order to guarantee protection of individual rights and property rights without any discrimination." The next step was the approval of a “Road Map” on a common space of freedom, security and justice on 10.05.2005. Its section III (“Justice”) reads as follows: “It is necessary to examine the possibility of concluding a treaty between Russia and the EU on judicial cooperation in civil matters”. At a number of subsequent meetings, these issues were raised in one way or another, for example, on 27 June 2008, in the Joint Statement of the Russia-EU Summit about the beginning of negotiations dedicated to the so-called new Agreement. 12 negotiation rounds were held afterwards7. Another major event was the conference “EU-Russia: Towards Full Mutual Recognition of Court Decisions” organized at the French Cour de Cassation in February 20128. The current situation may be described through the sentence presented on the website of the Permanent Mission of the Russian Federation to the

6 The agreement was ratified by Federal Law on the 25.11.1996 No. 135-FL. For the Russian Federation it entered into force on the 01.12.1997 (“Collection of the Russian Federation Legislation”, 04/20/1998, N 16). 7 https://russiaeu.ru/ru/torgovlya (last access at: 29.10.2020). 8 Zvereva, ‘EU – Russia: Towards Full Mutual Recognition of Court Decisions’ (2012) 5 Arbitration and Civil Procedure, S. 32–36, 6 Arbitration and Civil Procedure, 27–33.

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European Union: “On March 6, 2014, at an extraordinary EU summit, the leaders of the Member States decided to suspend the negotiations because of the situation in Ukraine.9” At the beginning of 2019, it was stated on the same site that “At the moment, negotiations are frozen according to the EU initiative”10. On the other side, the following information is available on the website of the Delegation of the European Union to Russia: “The EU and Russia hold informal negotiations on judicial cooperation in civil and commercial matters. Eurojust and Russia are eager to strengthen their cooperation.” At the beginning of 2019, the EU Delegation website provided us with more categorical information: The EU suspended the work of the permanent partnership councils and the senior management meetings11. The current situation indicates the actual freezing of the negotiation process in this area.

D. Possible legal models providing for mutual recognition and execution of judicial acts At least five options are possible, although other variants may be suggested. First approach: Preservation of the bilateral treaties system and conclusion of new ones. However, as I understood from the opinions of EU experts, the competence to conclude treaties for recognition and execution between separate EU States and a third country has passed to the EU. Such a treaty should determine the choice of a competent court. The second approach: Russia's accession to the Lugano Convention. Before its adoption, the VI All-Russian Congress of Judges indicated the following in the resolution of 02.12.2004: “- it is necessary to create an effective mechanism for the recognition and enforcement of foreign court decisions, as well as the provision of mutual legal assistance; - it will be preferable to join the Lugano Convention or create an independent agreement based on its model.”

9 https://russiaeu.ru/ru/torgovlya (last access at: 29.10.2020). 10 https://russiaeu.ru/ru/kratkii-obzor-otnoshenii (last access at: 29.10.2020). 11 https://eeas.europa.eu/delegations/russia/35940/ (last access at: 29.10.2020).

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The third approach: Using the mechanisms of the Hague Conference on Private International Law. As it is known, in 1971, the Convention on the recognition and enforcement of foreign judicial decisions in civil and commercial matters was concluded. Nevertheless, this convention did not become a universal mechanism for judicial acts circulation. Very recently, a new Convention on the recognition and enforcement of foreign court decisions has been finished and is open to signature by interested Parties. This could be a very welcome model for Russia and the EU, if there were a political will to improve the present situation of mutual standstill. In addition, the 1954 Hague Civil Procedure Convention provides for the enforcement of court costs recovery decisions. Also, the 2007 Hague Convention for the recovery of alimony for children and other family members establishes a system of simplified recognition and enforcement of alimony payment decisions. Another important act is the 2005 Convention on Choice of Court Agreements. But the main issue here is the degree of involvement of other States in these conventions in order to fulfill the role of universal mechanisms for cross-border judicial acts circulation. The fourth approach: Conclusion of a universal treaty on judicial cooperation in civil and commercial matters between the EU and Russia. Fifth approach: Changing the approaches of Russian procedural legislation by moving away from the principle of treaty-based exequatur, using the rules of factual reciprocity (the German approach) or introducing a regime of general recognition of foreign judicial decisions (the French approach).

E. The possible structure of the universal treaty on judicial cooperation (jurisdiction and enforcement) between EU and Russia12 If Russia and the EU, at some time, decided to conclude a bilateral treaty on judicial cooperation, such a treaty should regulate the following issues: Conditions for the recognition and enforcement of court decisions; the recognition model and degree of court’s control under exequatur issues; grounds for denial of exequatur, including provisions regarding the competing and exclusive competence of national courts; procedural issues in this context such the filing procedure, timing, etc.

12 The draft of this agreement consists of materials prepared in 2004 together with Ph.D. I.G.Medvedev and Ph.D. S.S. Trushnikov.

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The concept of such a treaty might be sketched as follows: Preamble Chapter I. Scope. • General provisions • Exclusion of certain categories of cases from the scope of action (tax, customs disputes, other cases arising from public relations, cases resolved by international commercial arbitration). • Definition of notions used in the Treaty Chapter II. International jurisdiction. Section 1. General Provisions • determination of the international competence of the courts operated in the relevant States on the basis of connecting factors (permanent residence – place of preferential stay; the issue of citizenship); Section 2. Special types of jurisdiction. • determination of connecting factors: • on contractual obligations disputes; • on alimony cases; • on tort obligations; • in cases of cross-border insolvency; • on civil lawsuits in criminal cases; • on disputes arising from the activities of legal entities divisions; • in insurance cases (if they are not excluded from the scope of the treaty); • in cases involving consumers; • in cases arising from individual labor disputes; Section 3: Exclusive international jurisdiction: • at the location of the immovable property; • at the place where the legal entities register is kept; • at the place of intellectual rights realization; • international jurisdiction on the connection of cases; • international jurisdiction of interim measures; • agreements for defining the jurisdiction; • verification of international jurisdiction by the courts of States parties to the Treaty; Chapter III. Recognition and execution of judicial acts. Section 1. General Provisions. Section 2. Recognition. • selection of the procedure for judicial acts recognition (automatic, simplified procedure for recognition);

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• grounds for refusal of judicial acts recognition (ordre public, conflict of public policy; violation of the constitutional rights of a participant in a case, in particular, the right to judicial protection; the existence of an identical decision, other grounds); • the prejudicial nature of the facts established by a judicial act recognized in the State party to the Treaty; • the ratio of the procedure for recognition and appeal of a judicial act; • the appeal of the act on the application for recognition; Section 3. Execution. • jurisdiction of the case on the execution of a foreign judicial act of a court operated in the State party to the Treaty; • the filing procedure; • notification of interested persons; • interim measures; • the appeal of the act on the application for execution; Chapter IV. Final and transitional provisions.

F. Conclusion The above provisions show that the issue of mutual recognition and enforcement of State court decisions has several aspects and solutions. In my opinion, the fourth approach would be the most effective. However, it is difficult to implement this approach now because of political reasons, as it is connected with the level of mutual political and legal trust, with requirements for the quality of judicial acts and compliance with the basic principles of a fair trial, with incentives to simplify the circulation of judicial acts in order to facilitate economic relations in business and relations between people. One can only hope for a positive resolution of the mentioned questions.

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Enhancing Judicial Cooperation in Civil Matters Between the EU and Ukraine: First Steps Ahead Iryna Izarova, Kyiv

Abstract The paper focuses on judicial cooperation between the EU and Ukraine, which a few years ago signed the EU-Ukraine Association Agreement (2014) and have established a Free and Comprehensive Trade Area (2016). Among the provisions of this Agreement were those addressed to strenghening the judicial cooperation and approaching the Ukrianian legislation to the EU law, nevertheless, years later the detailed steps still hang in the air. Given that the EU civil procedure deals mainly with relevant unilateral EU law, in particular, the Brussels Ia Regulation and related Regulations, which are unavailable for third countries like Ukraine, we focused on the international treaties1 and multi- and bilateral agreements, as well as on soft law2 as relating to judicial cooperation. Keeping all this in mind, the paper has the following structure: (1) introductionary remarks about the aim and background of judicial cooperation between the EU and Ukraine; (2) general overview of the legal policy of civil justice development in Ukraine, in particular, the study of the participation of Ukraine in international treaties and agreements, as well as the litigation in civil matters with a foreign element; (3) a part describing the main problems of the judicial cooperation between the EU and Ukraine with particular attention given to the following instruments: (3.1) international treaties, such as the Brussels and Lugano Conventions; (3.2) relevant EU law, specifically the Brussels Ia Regulation and other

1 Ukraine is a Contracting Party of many Hague conventions, meanwhile, we did not include those acts, which deal with the judicial cooperation in matters of family law and succession law on the Organizers’ request. 2 The particular attention in these papers will be devoted to the European Law Institute and the International Institute of Unification of Private Law Joint Project “From Transnational Principles to European Rules of Civil Procedure”, which has currently reached its final stage of preparation. Some of issues related to the trial with the foreign elements and third countries participants will be discussed here.

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Regulations and finally, (3.3) soft law, where the ELI-Unidroit Project “From Transnational Principles to European Rules of Civil Procedure” is analysed in detail. In conclusion some proposals or steps ahead are drafted with regard to the development of effective judicial cooperation between the EU and Ukraine.

Keywords Judicial cooperation in civil matters – EU and Ukraine Association Agreement – legal assistance and legal relationship – EU Civil Procedure – crossborder cases.

A. Introduction Ukraine became an independent State in 19913 right after the Soviet Union was destroyed, and we succeeded to a significant number of legislation, including international treaties and participation in multi- and bilateral agreements. Since that time Ukraine has joined the Council of Europe (hereinafter – CE)4 and has announced its willingness to enter the European Union (hereinafter – the EU)5. Despite that, as of today we are still on the way to a membership and do considerable efforts to achieve this goal successfully. The EU-Ukraine Association Agreement (hereinafter – the EU-Ukraine Agreement)6 was signed in 2014 and inter alia set forth the priority areas of cooperation between both parties in the field of justice, freedom and secu-

3 Declaration of State Sovereignty of Ukraine of 16.07.1990, see https://zakon.rada.g ov.ua/laws/show/55-12 (last access at: 28.10.2020), The Act of Declaration of Independence of Ukraine of 24.08.1991, see https://zakon.rada.gov.ua/laws/show/1427-1 2 (last access at: 28.10.2020). Poland, Canada, Hungary, Lithuania and Latvia were the first states, which recognized Ukrainian independence during first days. 4 See: Council of Europe (2019) Simplified Chart of Signatures and Ratifications. For reference see https://www.coe.int/en/web/conventions/search-on-treaties/-/conv entions/chartSignature/3 (last access at: 28.10.2020). 5 See more in: Partnership and Cooperation Agreement between Ukraine and the European Communities and their Member States of 10.11.1994, see https://zakon.r ada.gov.ua/laws/show/998_012 (last access at: 28.10.2020), which lost its force with the EU-Ukraine Association Agreement of 2014. 6 Access to European Union Law (2019) Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part,

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rity, including strengthening the judiciary, improving its efficiency, guaranteeing its independence, impartiality and combating corruption (Article 24). That was a necessary ground for the judiciary, proceedings and related institutions reforms; meanwhile, the necessary details of the judicial cooperation between the EU and Ukraine, however, did not receive proper attention. Economically, Ukraine is one of the largest countries in Europe by its territory and population7. Nevertheless, the significantly low rates of rule of law (6/16) and independence of the judiciary (1/4)8 are not the best prerequisites for developing of the Free and Comprehensive Trade Area (hereinafter – FCTA), which has been established for the intensification of the free movement of goods, services, capital and part of a workforce between the EU and Ukraine9. This means inter alia that international or cross-border civil and commercial cases in courts require a proper regulation of the litigation with a foreign element and the effective judicial cooperation of both Parties. During its independence Ukraine has signed ten bilateral agreements with EU Member-States related to the issues of civil procedure, legal assistance and legal relationships10. Despite this, Ukraine does not have its own bilateral agreements with a lot of EU countries, in particular, with Germany and Austria, where agreements between the Union of Soviet Socialist Republics and the particular States are still in force (five at least). For instance, the Agreement between the USSR and the Republic of Austria

see https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A22014A0529% 2801%29 (last access at: 28.10.2020). 7 European Union (2018) Statistics on European Neighbourhood Policy Countries: East. 2018 edition, see https://ec.europa.eu/eurostat/documents/3217494/9033104/ KS-02-18-351-EN-N.pdf/d7ef566c-ba67-4bf4-9b68-5adda18043c3 (last access at: 28.10.2020). 8 Freedom House (2019) Ukraine, see https://freedomhouse.org/uk/country/ukrain e/freedom-world/2019 (last access at: 28.10.2020). 9 European Commission (2019) Deep and Comprehensive Free Trade Area between Ukraine and the EU, http://ec.europa.eu/trade/policy/countries-and-regions /countries/ukraine/ (last access at: 28.10.2020). 10 For more information on bilateral international agreements of Ukraine (in Ukrainian) see: Ministry of Justice of Ukraine, “Dvostoronni mizhnarodni dohovory Ukrainy” [“Bilateral international agreements of Ukraine”], see https://mi njust.gov.ua/m/4906 (last access at: 28.10.2020), and the next part of this paper.

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on Civil Procedure of 11.03.197011 is still in force according to the Law ‘On the succession of Ukraine’12 etc. It is worth noting that the Verkhovna Rada of Ukraine has ratified the European Convention on Human Rights13 in 1997 and the decisions of the European Court of Human Rights have become a source of the national judicial practice14. This is an important point, which helps to facilitate the judicial cooperation and closer approximation of the judicial practice between the Member States of the Council of Europe (CE). The CE recommendations, resolutions and guidelines are important and influential sources for Ukrainian legislation reforms, which help us to reach the European standards of judiciary and litigation15. Despite this, Ukraine has been

11 See, for instance, the Agreement between the Union of Soviet Socialist Republics and the Republic of Austria on Civil Procedure of 11.03.1970, see https://zakon.ra da.gov.ua/laws/show/040_013 (last access at: 28.10.2020). 12 Verkhovna Rada Ukrainy (2020), The Law of Ukraine ‘On the succession of Ukraine’ of 12.09.1991 No 1543-XII see https://zakon.rada.gov.ua/laws/show/1543 -12 (last access at: 28.10.2020). In particular, according to Article 7, Ukraine shall be the successor in title to rights and obligations under international treaties of the USSR, which do not contravene the Constitution Ukraine and the interests of the Republic. 13 Verkhovna Rada Ukrainy (2019), The Law of Ukraine ‘On the Ratification of the Convention for the Protection of Human Rights and Fundamental Freedoms of 1950, the First Protocol and Protocols No. 2, 4, 7 and 11 to the Convention’ see https://zakon.rada.gov.ua/laws/show/475/97-(last access at: 28.10.2020); the Law of Ukraine ‘On the Ratification of Protocol No. 6 to the Convention for the Protection of Human Rights and Fundamental Freedoms’, concerning the abolition of the death penalty see https://zakon.rada.gov.ua/laws/show/1484-14#Text (last access at: 28.10.2020); Protocols No. 15 and 16 of the Law ‘On the Ratification of Protocols No. 15 and No. 16 to the Convention for the Protection of Human Rights and Fundamental Freedoms’ see https://zakon.rada.gov.ua/laws/show/2156 -19 (last access at: 28.10.2020) 14 See: Verkhovna Rada Ukrainy (2019), The Law of Ukraine ‘On the Enforcement of Decisions and the Application of the Case Law of the European Court of Human Rights’ see https://zakon.rada.gov.ua/laws/show/3477-15 (last access at: 28.10.2020). Also see the general case-law overview of the Ukraine at European Court of Human Rights (2019) Ukraine see https://www.echr.coe.int/Documents/ CP_Ukraine_ENG.pdf (last access at: 28.10.2020). 15 For instance, the basic document for developing the judiciary and related institutions in Ukraine, adopted right after the EU-Ukraine Agreement was signed in 2014, the Strategy of reforming the judiciary, court proceedings and related legal institutions for 2015–2020 (Zakonodavstvo Ukrainy (2015) Strategia reformuvannia sudoustrou, sudochinstva ta sumijnih pravovih institutiv na 2015–2020 rr. (2015–2020 Strategy of judiciary, litigation and related areas reforms.) see http://z akon2.rada.gov.ua/laws/show/276/2015 (last access at: 28.10.2020).

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much critisized by the European Commission for Democracy for recent legislative reforms, in particular, those related to the judiciary and its institutions16. Ukraine is one of the founding Members of the United Nations17 and currently a party to many UN instruments, including the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10.06.195818. Nonetheless, a lot of important instruments are still not available for implementation. For instance, on 07.08.2019 Ukraine signed the UN Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention), open for signature on 20.12.2018, but has not yet ratified it19. The same happened with several Hague Conference on Private International Law instruments, which are important sources of international private law20.

16 See the opinions about Ukraine: see https://www.venice.coe.int/webforms/docum ents/?country=47&year=all (last access at: 28.10.2020), and specifically CDL-AD (2019)027-e Ukraine – Opinion on the Legal framework in Ukraine governing the Supreme Court and judicial self-governing bodies, adopted by the Venice Commission at its 121st Plenary Session, Venice, 06–07.12.2019 see https://www.venice .coe.int/webforms/documents/?pdf=CDL-AD(2019)027-e (last access at: 28.10.2020). 17 See: United Nations (2019) Member State see https://www.un.org/en/member-stat es/ (last access at: 28.10.2020). 18 The Convention of the Recognition and Enforcement of Foreign Arbitral Awards, open for signature on 10.06.1958 see https://treaties.un.org/Pages/ViewD etails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (last access at: 28.10.2020). 19 The United Nations Convention on International Settlement Agreements Resulting from Mediation, open for signature on 20.12.2018 see https://treaties.un.org/P ages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-4&chapter=22&clang=_en (last access at: 28.10.2020). 20 Ukraine is a Contracting Party of the following acts: Convention of 01.03.1954 on civil procedure see https://www.hcch.net/en/instruments/conventions/full-text/?ci d=33 (last access at: 28.10.2020); Convention of 05.10.1961 Abolishing the Requirement of Legalization of Foreign Public Documents see https://www.hcch.ne t/en/instruments/conventions/full-text/?cid=41 (last access at: 28.10.2020); Convention of 15.11.1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters see https://www.hcch.net/en/instruments/c onventions/full-text/?cid=17 (last access at: 28.10.2020); Convention of 18.03.1970 on the Taking of Evidence Abroad in Civil or Commercial Matters see https://ww w.hcch.net/en/instruments/conventions/full-text/?cid=82 (last access at: 28.10.2020); Convention of 04.05.1971 on the Law Applicable to Traffic Accidents see https://www.hcch.net/en/instruments/conventions/full-text/?cid=81 (last access at: 28.10.2020); Convention of 05.10.1961 on the Conflicts of Laws Relat-

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The general overview of the Ukrainian legislation, sketched in the next part of this paper, gives us a real picture of the on-going issues of the judicial cooperation between Ukraine and the EU Member States. In addition, some remarks concerning the current Ukrainian regulation of litigation with foreign elements will be given.

B. General overview of the Ukrainian legal policy on judicial cooperation in civil matters with the EU. Litigation in civil matters with a foreign element Judicial cooperation in civil matters in Ukraine is basically grounded on the Hague Conference instruments and multi- and bilateral agreements and traditionally deals with the same circle of issues. Ukraine is a Contracting Party to the Hague Convention of 01.03.1954 on civil procedure, the Hague Convention of 05.10.1961 Abolishing the Requirement of Legalization for Foreign Public Documents, the Hague Convention of 15.11.1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (hereinafter: Convention on Service of Documents), the Hague Convention of 18.03.1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (hereinafter: Convention on Taking Evidence), the Hague Convention of 04.05.1971 on the Law Applicable to Traffic Accidents, the Hague Convention of 05.10.1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions, the Convention of 02.10.1973 on the Recognition and Enforcement of Decisions Relating to Maintenance Obligations, the Convention of 25.10.1980 on the Civil Aspects of International Child Abduction, the Convention of 19.10.1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect to Parental Responsibility and Measures for the Protection of Children and the Hague Convention of 23.11.2007 on the International Recovery of Child Support and Other Forms of Family Maintenance21.

ing to the Form of Testamentary Dispositions, Convention of 02.10.1973 on the Recognition and Enforcement of Decisions Relating to Maintenance Obligations; Convention of 25.10.1980 on the Civil Aspects of International Child Abduction; Convention of 19.10.1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children and Convention of 23.11.2007 on the International Recovery of Child Support and Other Forms of Family Maintenance. 21 HCCH, Member: Ukraine see https://www.hcch.net/en/states/hcch-members/deta ils1/?sid=134 (last access at: 28.10.2020).

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Among the multi- and bilateral agreements of Ukraine with EU Member States are the following22: The EU Member State Austria

Belgium Bulgaria

Croatia Cyprus

Czech Republic

Denmark

The agreements, signed after The agreement, succeeded after Ukraine became independent the Soviet Union in 1991 The Agreement between the Union of Soviet Socialist Republics and the Republic of Austria on Civil Procedure on 11.03.1970 https://zakon.rada.gov. ua/laws/show/040_013 https://minjust.gov.ua/m/belgi ya The Agreement between Ukraine and the Republic of Bulgaria on Legal Assistance in Civil Matters signed on 21.05.2004, ratified on 29.12.2005 http://zakon5.rada.g ov.ua/laws/show/100_056 https://minjust.gov.ua/m/horva tiya The Agreement between Ukraine and the Republic of Cyprus on Legal Assistance in Civil Matters, signed on 06.09.2004, ratified on 18.03.2006 http://zakon5.rada.g ov.ua/laws/show/196_008 The Agreement between Ukraine and Czech Republic on Legal Assistance and Legal Relationship in Civil Matters, signed on 28.05.2001, ratified on 08.11.2002 http://zakon2.ra da.gov.ua/laws/show/203_018 https://minjust.gov.ua/m/daniy a

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Iryna Izarova The EU Member State Estonia

Finland

France

Germany

The agreements, signed after The agreement, succeeded after Ukraine became independent the Soviet Union in 1991 The Agreement between Ukraine and the Republic of Estonia on Legal Assistance and Legal Relationship in Civil and Criminal Matters, signed on 15021995, ratified on 17.05.1996 http://zakon0.rada.g ov.ua/laws/show/233_659 The Agreement between the Union of Soviet Socialist Republics and the Republic of Finland on Legal Protection and Legal Assistance in Civil, Family and Criminal Matters 1978 https://zak on.rada.gov.ua/laws/show/246_00 8#Text The Agreement between the Union of Soviet Socialist Republics and France on Transfer of Court and Notary Documents and Enforcement of Court Orders in Civil and Commercial Matters 193623 https://zakon.rada.gov.ua/la ws/show/250_026 The Agreement between the Union of Soviet Socialist Republics and the Democratic Republic of Germany on Legal Assistance in Civil, Family and Crimi-

22 We should underline specifically, that the abovementioned information is only accessible through the web site of the Ministry of Justice of Ukraine (2020), Perelik Dvostoronnih ta Bagatostoronnih Mijnarodnih Dogovoriv u Sferi Pravovoi Dopomogi ta Pravovogo Spivrobitnitstva u Tsivilnih ta Kriminalnih Spravah po Krainah [List of bilateral and multilateral international agreements in the sphere of legal aid and legal cooperation in civil and criminal matters by countries]: see https://minjust.gov.ua/m/perelik-dvostoronnih-ta-bagatostoronnih-mijnarodnih-d ogovoriv-u-sferi-pravovoi-dopomogi-ta-pravovogo-spivrobitnitstva-u-tsivilnih-ta-kr iminalnih-spravah-po-krainah (last access at: 28.10.2020). 23 It is true that between Ukraine and France there is no current bilateral agreement and there were no notes exchanged later, too. Therefore, we include France in group 3.

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Enhancing Judicial Cooperation in Civil Matters Between the EU and Ukraine The EU Member State Greece

Hungary

Ireland Italy

Latvia

Lithuania

The agreements, signed after The agreement, succeeded after Ukraine became independent the Soviet Union in 1991 nal Matters of 1958 https://zakon.r ada.gov.ua/laws/show/276_400 The Agreement between Ukraine and the Republic of Greece on Legal Assistance in Civil Matters, signed on 02.07.2002, ratified on 27012007 http://zakon3.rada.g ov.ua/laws/show/300_013 The Agreement between Ukraine and the Republic of Hungary on Legal Assistance in Civil Matters, signed on 02.08.2001, ratified on 08.03.2002 http://zakon3.rada.g ov.ua/laws/show/348_026 https://minjust.gov.ua/m/irlan diya The Convention between the Union of Soviet Socialist Republics and the Republic of Italy on Legal Assistance in Civil Matters N 4210 1979 https://zakon.rad a.gov.ua/laws/show/380_10024 The Agreement between Ukraine and the Republic of Latvia on Legal Assistance and Legal Relationship in Civil, Family, Labor and Criminal Matters, signed on 23.05.1995, ratified on 12.07.1996 http://za kon2.rada.gov.ua/laws/show/42 8_627 The Agreement between Ukraine and the Republic of Lithuania on Legal Assistance and Legal Relationship in Civ-

24 We should note that the title of the document, signed between SU and Italy, suggests the word “convention” despite the fact that its content is similar to traditional agreement related to legal assistance in civil matters. It is interesting, that in this particular document only the cooperation in civil matters was dealt with, meanwhile, as usual, it covers civil, commercial and criminal matters.

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Iryna Izarova The EU Member State

Luxembourg Malta Netherlands Poland

Portugal Romania

Slovakia

Slovenia Spain Sweden

The agreements, signed after The agreement, succeeded after Ukraine became independent the Soviet Union in 1991 il, Family and Criminal Matters, signed on 07.07.1993, ratified on 20.11.1994 http://zakon 0.rada.gov.ua/laws/show/440_0 02 https://minjust.gov.ua/m/lyuks emburg https://minjust.gov.ua/m/malta https://minjust.gov.ua/m/nider landi The Agreement between Ukraine and the Republic of Poland on Legal Assistance and Legal Relationship in Civil and Criminal Matters, signed on 24.05.1993, ratified on 14.08.1994 http://zakon0.rada.g ov.ua/laws/show/616_174 https://minjust.gov.ua/m/portu galiya The Agreement between Ukraine and Romania on Legal Assistance and Legal Relationship in Civil Matters 30012002 ratified 07.09.2005 The Agreement between the Union of Soviet Socialist Republics and Czechoslovak Socialist Republic on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters of 1982 (in relations with the Slovak Republic) https://minjust.gov.ua/m/slove niya https://minjust.gov.ua/m/ispani ya https://minjust.gov.ua/m/shvets iya

As we can see, three groups of states are present here, depending on the basis of its judicial cooperation with Ukraine and the EU Member States, such as:

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1) Judicial cooperation under bilateral agreements, to which Ukraine has succeeded the Soviet Union (with Austria, Finland, Slovakia, Germany and Italy); 2) Judicial cooperation under newer bilateral agreements, concluded by the Ukrainian Republic (with Bulgaria, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Poland and Romania); 3) Judicial cooperation, in the absence of bilateral agreements, under other applicable (multilateral) instruments, such as Hague Conventions (with Belgium, Croatia, Denmark, Ireland, France, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain and Sweden). The content of the bilateral agreements is more or less similar and cover the following issues, which are mostly available for the states of groups 1 and 2: • • • • •

status of foreigners and access to courts in Contracting Parties’ courts; jurisdiction; service of documents and taking evidence; recognition and enforcement of foreign courts judgments; provisions of applicable law25.

Consequently, judicial cooperation of Ukraine and EU Member States without a bilateral agreement or from group (3) touches only issues, regulated by the Hague conventions, such as the Convention on Taking Evidence or the Convention on Service of Documents. Keeping in mind that Ukraine is not a participant of the 1968 EEC Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (Brussels Convention)26 or the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters27, we may conclude, that the very important issues of jurisdiction, recognition and enforcement of foreign decisions are

25 For more information about bilateral agreements of Ukraine, see: Haluschenko, Pytannia mizhnarodnoho pryvatnoho prava г mozhnarodnyh dogovorah Ukrainy pro pravovu dopomohu [Issues of international private law in international agreements of Ukraine on legal aid] (2005). 26 Eur-lex, 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968) see https://eur-lex.europa.eu/legal-c ontent/SL/TXT/?uri=CELEX:41968A0927 (01) (last access at: 28.10.2020). 27 Eur-lex, Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (2007) see https://eur-lex.europa.eu/le gal-content/EN/ALL/?uri=CELEX%3A22007A1221%2803%29 (last access at: 28.10.2020).

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left out. The only prerequisites of recognition and enforcement of foreign decisions for states from group (3) is the principle of reciprocity in accordance with Article 462 of the Ukrainian Code of Civil Procedure (CPC). Ukraine is making efforts to conclude bilateral treaties with countries with which it has no treaties, in particular, in 1995, a Declaration of Intent was signed on the cooperation in the reform of Ukraine's justice and in the field of legal assistance in civil and criminal matters between the Ministry of Justice of Ukraine and the Department of Justice and Police of the Swiss Confederation28, but these ideas have not been further implemented. Calls for further intensifying bilateral agreements were announced among Ukrainian scholars29, though nowadays this is a quite controversial proposal, when keeping in mind the policy of the EU and the provisions of treaties. Concerning litigation in civil matters with a foreign element we should note the following. There are special rules in Ukrainian legislation for handling civil cases involving foreigners or stateless persons or foreign legal entities. Such cases fall within the notion of a “foreign element” which is defined in the Law of Ukraine “On Private International Law” No. 2709-IV of 23.06.200530, though the respective persons have a similar status as Ukrainian citizens in litigation. The procedural rules of litigation in civil cases with foreign elements are provided in the provisions of the Civil Procedure Code of Ukraine No 1618-IV of 18.03.200431 (hereinafter – the CPC). Section ХІ of the CPC is entitled “Proceedings in cases involving foreign persons”, but the provi-

28 Declaration of Intent was signed on cooperation in the reform of Ukraine's justice and in the field of legal assistance in civil and criminal matters between the Ministry of Justice of Ukraine and the Department of Justice and Police of the Swiss Confederation 04.08.1995 see https://zakon.rada.gov.ua/laws/show/756_005 (last access at: 28.10.2020). 29 See for inst.: Tsirat, ‘Dvostoronni dohovory pro pravovu dopomohu jak pryklad unificatsii norm mizhnarodnoho tsyvilnoho kodeksy’ [Bilateral agreements on legal aid as a n example of unification of the norms of international civil process] (2012) 1 (137) Bulletin of the Supreme court of Ukraine, 46. 30 Law of Ukraine “On Private International Law” No 2709-IV of 23.06.2005, see http://zakon2.rada.gov.ua/laws/show/2709-15/print (last access at: 28.10.2020). 31 Civil Procedure Code of Ukraine No 1618-ІV of 18.03.2004 in the edition of the Law of Ukraine No 2147-VIII of 03.10.2017 with changes and amendments of 15012020, see https://zakon.rada.gov.ua/laws/show/1618-15 (last access at: 28.10.2020).

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sions touch only upon the status of foreigners (Art. 496) and specific of court orders for legal assistance (Art. 498–502). Consequently, Ukrainian courts proceed under the general provisions of procedural law of Ukraine and the consideration of cases with or without foreign elements is ruled by the CPC and other national legislation related to court fees etc. The provisions of the relevant bilateral agreement and/or Hague conventions will be applied in procedural acts, in particular, service of documents or taking of evidence, if there is a foreigner(s) in states other than Ukraine. Mostly, the specific rules refer to the recognition and enforcement of foreign court decisions in Ukraine. The CPC includes a specific section IX, with a range of issues associated with recognition and enforcement of foreign judgments, international commercial arbitration in Ukraine, granting permission to enforcement of decisions of arbitral courts: recognition and appeal to the enforcement of a foreign court decision that is subject to enforcement, recognition of a foreign court decision that is not subject to enforcement, recognition and granting of permission to execute the decision of international commercial arbitration, proceedings in cases of granting permission for the enforcement of decisions of arbitration courts. Therefore, if there is no bilateral agreement between Ukraine, where the enforcement applies and the state of the court, where the decision was issued, the principle of reciprocity is applied.

C. The main problems of the strenghening of the judicial cooperation between the EU and Ukraine The EU-Ukraine Association Agreement includes very general provisions of judicial cooperation in Article 24: “1. The Parties agree to further develop judicial cooperation in civil and criminal matters, making full use of the relevant international and bilateral instruments and based on the principles of legal certainty and the right to a fair trial. 2. The Parties agree to facilitate further EU-Ukraine judicial cooperation in civil matters on the basis of the applicable multilateral legal instruments, especially the Conventions of the Hague Conference on

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Private International Law in the field of international legal cooperation and litigation as well as the protection of children.”32 Let us sketch below some important issues of the international treaties, the EU regulations, as well as of the soft law as related to judicial cooperation in civil matters.

I. The international treaties related to judicial cooperation in civil matters International treaties are very helpful in the functioning of judicial cooperation and this has been especially true for the last centuries. As we have already noted, Ukraine is a Contracting Party of numerous Hague Conventions, in particular, on civil procedure, service of documents, taking of evidence etc. Nevertheless, we should admit, that they often duplicate regimes of the same issues passed by the EU. We should also pay attention to the fact that the 1961 Hague Convention, which abolished the requirement of the legalization of foreign official documents, came into force in Ukraine on 22.12.2003. Belgium approved Ukraine's participation only in 2004, and Germany – in 201033. Ukraine is neither a Contracting Party to the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters34 nor of the Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters35. Ukraine is, however, a Member State of UN Convention of the Recognition and Enforcement of Foreign Arbitral Awards of 10.06.195836.

32 Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part (2014), see https://eur-lex.europa.eu/le gal-content/EN/ALL/?uri=CELEX%3A22014A0529%2801%29 (last access at: 28.10.2020). 33 See: HCCH, Declaration. Reservation. Notification, see https://www.hcch.net/en/ instruments/conventions/status-table/notifications/?csid=351&disp=type (last access at: 28.10.2020). 34 Eur-lex, 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (1968), supra fn. 26. 35 Eur-lex, Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (2007), see https://eur-lex.europa.eu/le gal-content/EN/ALL/?uri=CELEX%3A22007A1221%2803%29 (last access at: 28.10.2020). 36 The Convention of the Recognition and Enforcement of Foreign Arbitral Awards, open for signature of 10.06.1958, see https://treaties.un.org/Pages/ViewD

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Therefore, the issues of jurisdiction and litispendence, which are extremely important for effective judicial cooperation, are left pending. As to the example of court competence, if there is any property or even movable property of the defendant in Ukraine, Ukrainian domestic law (Art. 76, subs. 1, nr. 2 of the Law ‘On Private International Law of Ukraine’) is still in force37 and we should pay attention to this, especially regarding the new rules of the regulation of jurisdiction, article 33. To be fair, Ukraine puts in serious efforts to resolve the problems of recognition and enforcement, in particular, by very early signing the Hague Convention of 02.07.2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters38 on 04.03.202039. Whereas this instrument will be helpful for improving the circulation of foreign judgments, up to now this Convention has been signed only by two States and the entering into force in the foreseeable future is doubtful. Nevertheless, in our view, the relations concerning the recognition and enforcement between Ukraine and the EU should be regulated by a more flexible and stable instrument. Keeping in mind that EU Member States cannot any longer individually or collectively enter into obligations with third countries in the area of judicial cooperation in civil matters, the EU had an exclusive competence to sign the Lugano Convention and became a member of the Hague Conference. Therefore, EU Member States can no longer freely engage with third countries in these matters.40 Hence, the only way to enhance judicial cooperation with third States, as was noted in the EU-Ukraine Association

37 38 39

40

etails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (last access at: 28.10.2020). Trunk, ‘EU Rules on Judicial Cooperation with Russia and Ukraine in Civil and Commercial Matters in Russia, Europe, and the Rule of Law’ (2007) 56 Serie Law in Eastern Europe, 153–163. Convention of 2.07.2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, see https://www.hcch.net/en/instruments/ conventions/full-text/?cid=137 (last access at: 28.10.2020). Ukraine has signed the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (in Ukrainian), see https://minjus t.gov.ua/news/ministry/ukraina-pidpisala-konventsiyu-pro-viznannya-ta-vikonann ya-inozemnih-sudovih-rishen-u-tsivilnih-abo-komertsiynih-spravah (last access at: 28.10.2020). See in: Kramer, ‘Judicial Cooperation in Civil Matters’, in Kuijper, Amtenbrink, Curtin, de Witte, McDonnell and van den Bogaert (eds), The Law of the European Union, Alphen aan den Rijn (2018), 721–723.

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Agreement, is working at the level of the Union, but not between the particular EU Member States and Ukraine. We should agree with the idea, that the only way to create a sustainable ground for judicial cooperation is a treaty between the EU as a Union and a third state, like Ukraine, at the same time41., and more importantly – with the same rules applying for all participants. The existing bilateral agreements show us the differences between their approaches as to recognition and enforcement of foreign decision (see provisions of the UkrainePoland Agreement, immediate enforcement of decisions in matters relating to parental rights is allowed without additional procedure of recognition42), issues of languages, service of documents etc. The above-mentioned situation is unacceptable, if we want the DCFTA to function properly and there should be no additional differences for internal and external business.

II. The EU Regulations related to cross-border civil and commercial matters EU civil procedure is mostly governed by relevant EU law, in particular, the Brussels Ia Regulation and other related Regulations43. These instru-

41 Trunk, ‘EU Rules on Judicial Cooperation with Russia and Ukraine in Civil and Commercial Matters in Russia, Europe, and the Rule of Law’ (2007) 56 Serie Law in Eastern Europe, 161–162. 42 Agreement between Ukraine and the Republic of Poland on legal assistance and legal relations in civil and criminal cases, ratified by the Resolution of Verkhovna Rada N 3941-ХІІ of 04.02.1994 (in Ukrainian), see http://zakon5.rada.gov.ua/laws/ show/616_174 (last access at: 28.03.2020). 43 In this paper we address to the following instruments: Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12.12.2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter – Regulation on Jurisdiction), see https://eur-lex.europa.e u/legal-content/EN/TXT/?uri=celex:32012R1215 (last access at: 28.03.2020), Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13.11.2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000 (hereinafter – Regulation on Service of Documents), see https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=C ELEX%3A32007R1393 (last access at: 28.03.2020), Council Regulation (EC) No 1206/2001 of 28.05.2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, see https://eur-lex.europa .eu/legal-content/EN/TXT/?uri=celex:32001R1206 (last access at: 28.03.2020), Regulation (EC) No 805/2004 of the European Parliament and of the Council of

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ments have allowed the creation of an effective and genuine European Area of Justice44, including jurisdiction, recognition and enforcement of judgments, service of documents, taking of evidence and some provisional and protective measures45. The real evolutions are in the procedures of small claims orders for payment, which help to pass through the differences of national procedural law of the EU Member States. Even though they are at present not available to third States for implementation or execution, their citizens may be involved in cross-border cases within the EU. In particular, this is made possible according to the provisions of the EOP Regulation (Art. 3) and of the ESCP Regulation (Art. 3), where if at least one of the parties is domiciled or habitually resident in an EU Member State other than the Member State of the court seized. Therefore, it does not matter where the other party is domiciled or habitually resident. It may be domiciled or habitually resident in third States, in particular, Ukraine 21.04.2004 creating a European Enforcement Order for uncontested claims (hereinafter – EEO Regulation), see https://eur-lex.europa.eu/legal-content/EN/ALL/?ur i=CELEX%3A32004R0805 (last access at: 28.03.2020), Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12.12.2006 creating a European order for payment procedure (hereinafter – EOPP Regulation), see https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32006R1896 (last access at: 28.03.2020), Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11.07.2007 establishing a European Small Claims Procedure (hereinafter – ESCP Regulation), see https://eur-lex.europa.eu/legal-conten t/EN/ALL/?uri=CELEX%3A32007R0861 (last access at: 28.03.2020), Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15.05.2014 establishing a European Account Preservation Order procedure to facilitate crossborder debt recovery in civil and commercial matters (hereinafter – EAPO Regulation), see https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A3201 4R0655 (last access at: 28.03.2020). 44 Eur-Lex, ‘The Action plan of the Council and the Commission on how best to implement the provisions of the Treaty of Amsterdam on an area of freedom, security and justice’, par. 15–16 (1999), see https://eur-lex.europa.eu/legal-content/EN/T XT/?uri=CELEX%3A31999Y0123%2801%29 (last access at: 20.03.2020), European Parliament, ‘Tampere European Council 15 and 16.10.1999 Presidency Conclusions,’ part B (1999), see http://www.europarl.europa.eu/summits/tam_en.htm#c (last access at: 20.03.2020). See more also in: Hartnell, ‘EUstitia: Institutionalizing Justice in the European Union’ (2002) 65 NW J. Int`l. Law & Bus. 45 See more in Kramer, ‘Judicial Cooperation in Civil Matters’, in Kuijper, Amtenbrink, Curtin, de Witte, McDonnell and van den Bogaert (eds), The Law of the European Union, Alphen aan den Rijn (Kluwer Law International 2018), 721–740, available at SSRN: see https://ssrn.com/abstract=3206272 (last access at: 20.03.2020); and Storscrubb, Civil Procedure and EU Law A Policy Area Uncovered (2008).

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The EAPO Regulation does not include a similar provision, the only exception touches upon debtors from third States, e.g. Ukraine, according to Art. 28 part 4 of this Regulation. An earlier judgment given in any EU Member State or in a third country may be seen as a ground for refusal of enforcement according to the EEO Regulation (Art. 21), which also creates equality between court decisions of state of enforcement and state of court46. The Brussels Ia Regulation provides for a flexible mechanism allowing the courts of the EU Member States to take into account proceedings pending before the courts of third States, considering, in particular, whether a judgment of a third State will be capable of recognition and enforcement in the EU Member State concerned under the law of that Member State and the proper administration of justice (part 23 and article 34). Unique EU Civil Procedures give the EU Member States the possibilities to avoid differences of national procedural rules, which are being slowly harmonized under its influence47. All these instruments create a proper ground for effective judicial cooperation within the EU among its Member States, due to the nature of the regulations and easier ways to change and/or amendmend, comparing agreements and conventions. Therefore, the provisions of private international law within the EU is much more unified and harmonized, compared to the rules of bilateral agreements between these states. In light of the further development of the EU civil procedure as a single area of civil justice for cross-border cases, the perspective of concluding bilateral agreements between EU Member States and third States like Ukraine is very disputable, if not impossible (see part 3.2), rather the cre-

46 See more in: Panych, ‘Scientific and Practical Commentary to the Civil Procedure Legislation of the EU’, in Izarova, Khanyk-Pospolitak, Panych and Kovtun (2018), 219–239. 47 See more in Storme (ed), Approximation of Judiciary Law in the European Union/ Rapprochement du Droit Judiciaire de l’Union européenne (1994) ; Storme, Procedural Laws in Europe: Towards harmonization ( 2003) 472, and Storme, A Single Civil Procedure for Europe: A Cathedral Builders’ Dream see http://www.ritsumei.ac.jp/acd /cg/law/lex/rlr22/STORME.pdf (last access at: 20.03.2020). About harmonization of civil procedure see also van Rhee, 'Civil Procedure Beyond National Borders' (2018) 1 (1) Access to Justice in Eastern Europe 15–34; Ervo, ‘Party Autonomy and Access to Justice’, in Ervo, Gräns and Jokela (eds), Europeanization of Procedural Law and the New Challenges to Fair Trial (2009), 21–41. About EU Civil Procedure we should mention Storskrubb, Civil Procedure and EU Law. A Policy Area Uncovered (2008) and Kramer X., Procedure Matters: Construction and Deconstructivism in European Civil Procedure Erasmus Law Lectures 33 (2013).

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ation of equal possibilities for all the participants of the DCFTA is an important issue.

III. Soft law, related to civil justice and cross-border cases. The ELI-Unidroit Project “From Transnational Principles to European Rules of Civil Procedure” will definitely play a significant role in further civil justice development in Europe. Since the Storme Project and the Florentine Report this is the most fascinating event in scholarly activities in this field. This is an evolutionary step across the differences between national civil procedures ensuring the right of a fair trial for citizens across Europe or the EU. This is the main and, in our view, the most important question. The scope and the way of the implementation of these Rules was (probably in a similar manner) formulated in the 2004 ALI-Unidroit Principles of Transnational Civil Procedure48, which were the main prerequisite for the (planned) creation of the European Rules. It should be noted that “European” in the title of the planned Rules has a double meaning, due to it being used for the EU relations as well as for the Council of Europe. Consequently, for States, which are Members of the Council of Europe and not a Member of the European Union, like Ukraine, for instance, the application of these Rules would be a challenge. Keeping in mind sources, which were used for the preparation of these Rules49, their scope shall cover states, which support European standards, have adopted the European Convention of Human Rights and recognize the jurisdiction of the ECtHR. Consequently, issues of cross-border v. foreign element arise in this context as well. The term «cross-border issues», which is used both inside the EU and outside (see all the Regulations in part 3.2 for instance), is quite controversial, due to the more recognized term «foreign element» for different law system issues, in particular of non-EU-Member States. If the scope of the planned European Rules were to cover all the CE member states, the issues of jurisdiction, recognition and enforcement could be easily solved by a very effective instrument – the decision of the

48 ALI/UNIDROIT, Principles of Transnational Civil Procedure (2006) see https://w ww.unidroit.org/instruments/transnational-civil-procedure (last access at: 28.10.2020). 49 ELI-UNIDROIT, Initial report on the ELI-UNIDROIT 1st Exploratory Workshop (2013) see https://www.europeanlawinstitute.eu/fileadmin/user_upload/p_eli/Proj ects/ELI-UNIDROIT_Workshop_initial_report.pdf (last access at: 28.10.2020).

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Parties should play a main role in its implementation by any court or tribunal50.

D. Concluding remarks and proposals The necessity of enhancing and strengthening the EU and Ukraine’s judicial cooperation in civil matters is transparent and evident. Meanwhile, the important issue is how we may reach this aim. Some of our ideas about harmonization of the civil procedure were announced already shortly after the EU-Ukraine Association Agreement was signed. In particular, the desirability of the participation of Ukraine in the Lugano Convention, harmonization of jurisdiction rules, service of documents and taking of evidence, as well as an approximation with EU directives, specifically, on alternative ways of resolving consumer disputes, on legal assistance etc.51. We agreed partly with the idea of generally adopting stronger bilateral ties with the EU,52 but in our point of view, a move-in-stages process of facilitating bilateral agreements between the EU and third countries will be more effective and productive, and will require fewer resources53. However, the EU should decide in what way an effective judicial cooperation with third States should proceed, keeping in mind its own duplicate instruments of Regulations and Hague Conventions on issues of service of documents, taking of evidence etc. Nowadays, we should try to find new and relevant instruments for creating a proper base of judicial cooperation between the EU and third

50 See more in: ALI-Unidroit Rules of Transnational Civil Procedure, P-A, in particular, courts may adapt their practice to these Principles, especially with the consent of the parties to litigation. 51 Izarova, ‘Harmonization of Civil Procedure: First Steps of Ukraine to a Genuine European Area of Justice’ (2016) 7 Civil Procedure Review 100–118, see http://www .civilprocedurereview.com/index.php?option= com_content&view=article&id=54 8%3Aharmonization-of-civil-procedure-first-steps-of-ukraine-to-a-genuine-europea n-area-of-justice-iryna-izarova-&catid=92%3Apdf-revista-n3-2016&Itemid=61&lan g=en (last access at: 28.10.2020). 52 See Weller, ‘Judicial Cooperation of the EU in Civil Matters in Its Relations with non-EU States – A Blind Spot?’ in Uzelac and van Rhee(eds), The Transformation of Civil Justice (2018), 63–68. 53 Izarova, ‘Strengthening Judicial cooperation in civil matters between the EU and neighboring countries: the example of Ukraine and the Baltic states’ (2019) 12 (2) Baltic Journal of Law &Politics, 115–133.

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States, especially, within the DCFTA. In our view, such an instrument may be a legal agreement between the EU and Ukraine with specific provisions for judicial cooperation.

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Recognition and Enforcement of Foreign Court Decisions in Colombia Michael Stöber, Kiel

Abstract The author sets out the legal status in Colombia with regard to the recognition and enforcement of judgments given by foreign law courts in civil or commercial matters pursuant to the Colombian General Code of Procedure Law of 2012. On the basis of the analysis of the current legislative situation, the article explains which changes might be desirable in the Colombian legal provisions in this field from a legal policy point of view.

Keywords Colombian General Code of Procedure Law – enforcement of foreign judgments – exequatur proceedings – ordre public – public policy – reciprocity – recognition of foreign judgments.

A. Introduction Colombian law and jurisdiction are quite restrictive with regard to the recognition and enforcement of judgments given by foreign law courts in civil or commercial matters. In principle, a foreign judgment may only be enforced in Colombia if it has been declared enforceable by the Colombian Supreme Court – the Corte Suprema de Justicia – in exequatur proceedings pursuant to Colombian procedural law. Among other requirements for exequatur, the foreign judgment may not violate the Colombian laws of ordre public. The rather strict rules on recognition and enforcement of foreign judgments have been maintained in the new Colombian General Code of Procedure Law of 2012. In this article, I will set out the legal status in Colombia and explain which measures might be desirable from a legal policy perspective in relation to Colombia.

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B. The rules on recognition and enforcement of foreign judgments in the Colombian General Code of Procedure Law The provisions on recognition and enforcement of foreign judgments were formerly part of the Colombian Civil Procedure Code of 1970, the Código de Procedimiento Civil.1 In 2012, these provisions were transferred – with only slight modifications – into the new General Code of Procedure Law, the Código General del Proceso (CGP),2 which gradually came into force between 2014 and 2016 (in the first judicial districts of Colombia on 01.01. 2014, in all judicial districts of the country on 01.01.2016).3 The rules on recognition and enforcement of foreign judgments are now established in Articles 605 to 607 CGP. Pursuant to Art. 605 CGP, judgments and other orders of the same kind issued by foreign authorities in contentious or in voluntary procedures have, in Colombia, the effects provided for in existing conventions with the respective country, and in the absence of such conventions, the effects attributed in that country to decisions passed in Colombia. With regard to arbitration decisions taken in a foreign country, Art. 605 CGP provides that the exequatur of these decisions is subject to the legal rules which regulate this area. Art. 606 CGP stipulates that a foreign judgment may only have legal effects in Colombia if it fulfills the following requirements: 1. It does not refer to rights in rem established in goods that were situated in Colombian territory at the time the proceedings were initiated. 2. It may not infringe Colombian statutes, or other regulations, of public policy (orden público), with the exception of the rules of procedure. 3. It must be declared enforceable according to the law of the State of origin and presented in a duly certified copy. 4. The cause of action it refers to may not be subject to the exclusive competence of the Colombian law courts. 5. There may not be any pending lawsuit or enforceable judgment of Colombian judges with regard to the same cause of action.

1 Decretos 1400 de 1970 y 2019 de 1970 “Por los cuales se expide el Código de Procedimiento Civil”, published in Diario Oficial no. 33.150 of 21.09.1970 and Diario Oficial no. 33.215 of 18.12.1970 respectively. 2 Ley 1564 de 2012 “Por medio de la cual se expide el Código General del Proceso y se dictan otras disposiciones”, published in Diario Oficial no. 48.489 of 12.07.2012. 3 Art. 627 para. 6 CGP.

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6. If it was passed in contentious procedures, the conditions for due summons and a fair hearing of the defendant must be fulfilled pursuant to the law of the State of origin, which is presumed to be the case if an enforceable original of the judgment exists. 7. The requirement of exequatur must be fulfilled. With regard to the exequatur proceedings referred to in Art. 606 no. 7 CGP, Art. 607 para. 1 CGP provides that the application for exequatur of a foreign judgment with the aim to give legal effects to it in Colombia has to be submitted by the claimant to the Chamber of Appeals in Civil Matters of the Supreme Court of Justice – the Corte Suprema de Justicia – unless, pursuant to international conventions, another law court is competent, and the party affected by the judgment must be summoned before that law court if the judgment was pronounced in contentious procedure. Pursuant to Art. 607 para. 2 CGP, if the judgment or any other document is not available in Spanish, a certified translation must be submitted together with a copy of the original document. Finally, Art. 607 para. 3 CGP requires that the following rules have to be observed for exequatur proceedings: 1. The application must contain the evidence deemed relevant. 2. The Chamber will reject the application if one of the requirements set out in Art. 606 no. 1 to 4 CGP is not fulfilled. 3. The application has to be delivered to the affected party together with the judgment, and to the counsel engaged with the representation on grounds of the specific nature of the matter, in the form regulated in Art. 91 CGP within a period of five days. 4. After notification of the application, the Chamber will issue an order to take evidence and set a date for the taking of evidence, the hearing of the parties and the delivery of the judgment. 5. If the Chamber grants exequatur and the foreign judgment needs enforcement, the competent court decides on enforcement in accordance with the general rules.

C. The requirement of reciprocity In order for a foreign judgment to be recognized and enforced in Colombia, two crucial conditions must be fulfilled: firstly, the requirement of reciprocity; and secondly, the requirement of compatibility with the Colombian orden público, i.e. public policy or ordre public.

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Thus, it can be stated that Colombian law is quite restrictive with regard to recognition and enforcement of foreign judgments. There are historical reasons for this restrictiveness. In the past, courts of the former motherland and colonial power Spain, but also of France which also traditionally has rather strong links with Colombia, issued judgments in litigations between Spanish, respectively French, nationals on one side and Colombian nationals on the other side which were, from the Colombian point of view, often discriminatory to the Colombian party but were nonetheless easily enforceable in Columbia at the time. For this reason, the Colombian legislator felt the need to protect Colombian nationals against an overly extensive enforcement of foreign judgments by the rules in question, which were first in the Colombian Civil Procedure Code of 1970, and now in the CGP of 2012. As far as reciprocity is concerned, Art. 605 CGP refers primarily to the rules on reciprocal recognition established in international conventions between Colombia and the foreign country whose law court passed the judgment. In this case, there is a so-called reciprocidad diplomática (diplomatic reciprocity) between Colombia and the other country.4 Colombia has only a few conventions on the recognition and enforcement of foreign judgments, though.5 In particular, Colombia entered into bilateral conventions on the recognition and enforcement of foreign judgments with Spain (Convenio sobre ejecución de sentencias civiles entre la República de Colombia y el Reino de España of 1908) and with the Holy See (Concordato entre la República de Colombia y la Santa Sede y su protocolo final of 1974). Moreover, Colombia signed a multilateral convention on the enforcement of foreign arbitral decisions, the Convención Interamericana sobre eficacia extraterritorial de las sentencias y laudos arbitrales extranjeros of 1979, ratified by Colombia in 1981. However, Colombia is not a member State

4 Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment T-716 of 1996 (16.12.1996), available online at: http://www.corteconstitucional.gov .co/relatoria/1996/T-716-96.htm (last access at: 25.10.2020); Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-893 of 2009 (02.12.2009), available online at: http://www.corteconstitucional.gov.co/relatoria/2009/C-893-09. htm (last access at: 25.10.2020); Supreme Court of Colombia (Corte Suprema de Justicia), Chamber of Appeals in Civil Matters (Sala de Casación Civil), judgment SC19856-2017 (11.11.2015), available online at: http://www.cortesuprema.gov.co/c orte/wp-content/uploads/relatorias/ci/bnov2017/SC19856-2017%20(2014-01295-00) .doc (last access at: 25.10.2020). 5 A list of the conventions concluded by Colombia is available at: http://apw.cancille ria.gov.co/tratados/SitePages/BuscadorTratados.aspx?TemaId=11&Tipo=B (last access at: 25.10.2020).

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of the Hague Conference on Private International Law and has adopted very few of the conventions of the Hague Conference. The Convention of 01.02.1971 on the Recognition and Enforcement of Foreign Judgements in Civil and Commercial Matters is not among the conventions Colombia adopted. If, as in most cases, there is no international convention and therefore no reciprocidad diplomática, Art. 605 CGP says that a foreign judgment has “the effects attributed in the foreign country in question to decisions passed in Colombia”. In other words, the Colombian law requires the foreign State to recognize Colombian judgments in accordance with its domestic law, or at least in accordance with the established jurisprudence of its law courts. This kind of reciprocity is called reciprocidad legislativa (legislative reciprocity) respectively reciprocidad judicial (judicial reciprocity). 6 In summary, a foreign judgment will only be recognized and enforced in Colombia if a Colombian judgment would also be recognized and enforced in the foreign country concerned.

D. The requirement of compatibility with Colombian public policy In addition to reciprocity, the exequatur requirements set out in Articles 606 and 607 CGP must be met. The Colombian Supreme Court (Corte Suprema de Justicia) emphasizes in its settled jurisprudence that mere reciprocity is not sufficient for the recognition and enforcement of foreign judgments. Rather, the further conditions of Articles 606 and 607 CGP must be fulfilled. The most important requirement is that the foreign judgment in question “may not violate Colombian statutes, or other regulations, of orden público”, i.e. public policy. The purpose of this ordre public requirement is to protect fundamental rules and principles of Colombian law.

6 Supreme Court of Colombia (Corte Suprema de Justicia), Chamber of Appeals in Civil Matters (Sala de Casación Civil), judgment 4150 (02.02.1994), available online at: www.cortesuprema.gov.co/corte/wp-content/uploads/subpage/exequatur/Provid encias/SE%20(02%2002%201994)%20Panama.pdf (last access at: 25.10.2020); Supreme Court of Colombia (Corte Suprema de Justicia), Chamber of Appeals in Civil Matters (Sala de Casación Civil), judgment 11001-02-03-000-2004-00696-00 (11.08.2005), available online at: http://www.cortesuprema.gov.co/corte/wp-conten t/uploads/subpage/exequatur/Providencias/1100102030002004-00696-00%20[SE-20 6-2005]Alemania.pdf (last access at: 25.10.2020).

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In practice, the ordre public test is of particular relevance in cases of family law. Due to the fact that Colombia is a predominantly catholic country, Colombian family law is based in its basic structures and principles on traditional views, for example with regard to divorce. In matters of divorce, Colombia still upholds the concept of guilt, i.e. the spouse who culpably caused the failure of the marriage will suffer disadvantages in divorce, for example in terms of maintenance. The legal basis for this can be found in Articles 154 (grounds for divorce) and 411 no. 4 (obligation to pay maintenance) of the Colombian Civil Code, the Código Civil.7 In order to give rise to an obligation of the guilty spouse to pay maintenance to the innocent spouse, the latter must invoke the subjective grounds contained in Art. 154 no. 1 to 5 and 7 of the Civil Code. These grounds lay in the non-fulfilment of marital duties, e.g. by extra-matrimonial sexual relationships or domestic violence, and may therefore be invoked only by the innocent spouse. If the innocent spouse does so within the period provided for in Art. 156 of the Civil Code, he or she is granted divorce by way of censure, i.e. a ruling that states the guilt of the other spouse. For these reasons, the divorce to which these grounds give rise is called a sanction divorce (divorcio sanción). The occurrence of these grounds must be proven before the jurisdiction and the spouse against whom these are invoked may exercise his or her right of defense and prove that the alleged facts did not occur or that he or she did not act accordingly. In addition to the dissolution of the marital bond, other consequences of this type of divorce include the possibility of (1) the judge imposing on the guilty spouse the obligation to pay maintenance to the innocent spouse (Art. 411 no. 4 of the Civil Code); and (2) the innocent spouse revoking financial contributions made to the guilty spouse in the course of the marriage (Art. 162 of the Civil Code). However, in recent years there has been a certain modernization of Colombian family law through the jurisprudence of the Colombian Constitutional Court, the Corte Constitucional. For instance, the Constitutional Court ruled in 2016 that the Colombian constitution requires same sex marriages to be admissible. 8 As early as 2015, the Constitutional Court had

7 Colombian Civil Code (Código Civil), full text available online at: http://leyes.co/co digo_civil.htm (last access at: 25.10.2020). 8 Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment SU-214 of 2016 (28.04.2016), available online at: http://www.corteconstitucional.g ov.co/relatoria/2016/su214-16.htm (last access at: 25.10.2020); see also Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-577 of

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already permitted the adoption of children by same sex couples.9 The change of attitude promoted by the progressive jurisprudence of the Colombian Constitutional Court also influences the concept of ordre public, and therefore the practice of exequatur of foreign judgments. According to the Colombian Supreme Court, the concept of ordre public must be interpreted dynamically in order to adapt its contents to changes in public opinion occurring in the course of the years. The Colombian Supreme Court repeatedly pointed out in its decisions that public policy is “a phenomenological concept which, from an empirical point of view, is based on specific, perceptible and, as a consequence, verifiable facts that objectively produce an alteration of the conditions of security and peace for the exercise of rights”.10

E. Conclusion and evaluation from the legal policy point of view In spite of the doctrine of dynamic interpretation of the concept of public policy, it must be stated that the Colombian legal system is not very open towards foreign judgments, taking into account that both the reciprocity and the ordre public requirement must be met, and complicated exequatur proceedings be completed, for a judgment to be recognized and enforced in Colombia. Although the Colombian legislator has maintained the restrictive rules in the recent amendment of the Procedure Law Code of 2012, there are

2011 (26.07.2011), available online at: http://www.corteconstitucional.gov.co/relat oria/2011/C-577-11.htm (last access at: 25.10.2020). 9 Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-071 of 2015 (18.02.2015), available online at: http://www.corteconstitucional.go v.co/relatoria/2015/C-071-15.htm (last access at: 25.10.2020); Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-683 de 2015 (04.11.2015), available online at: http://www.corteconstitucional.gov.co/relatoria/ 2015/c-683-15.htm (last access at: 25.10.2020). 10 In the original Spanish text: “un suceso del mundo fenomenológico, de un punto de partida empírico que parte de la ocurrencia de hechos concretos, perceptibles y, en consecuencia, verificables, que objetivamente generan una alteración de las condiciones de seguridad y tranquilidad requeridas para el ejercicio de los derechos”; see, among others, the decisions Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-024 of 1994 (27.01.1994), available online at: http://www.cortec onstitucional.gov.co/relatoria/1994/c-024-94.htm (last access at: 25.10.2020); Constitutional Court of Colombia (Corte Constitucional de Colombia), judgment C-252 de 2010 (16.04.2010), available online at: http://www.corteconstitucional.g ov.co/relatoria/2010/C-252-10.htm (last access at: 25.10.2020).

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critical voices among Colombian jurists who do not approve the strict requirements. On the one hand, the rigid rules on exequatur proceedings may come into conflict with the right to a due process guaranteed in the Colombian constitution. The Colombian Constitutional Court had to decide repeatedly on constitutional complaints from claimants who had unsuccessfully applied for exequatur in the Supreme Court. On the other hand, the considerable economic growth Colombia experienced in the last decade – and hopefully will experience in the next years after the end of the civil war in 2016 and after overcoming the Covid-19 crisis – entails an increase in international business and private relationships in civil and commercial matters. Therefore, it would be desirable from the point of view of foreign companies and individuals – and probably in Colombia’s own economic interest – if its legal system would become more open towards foreign jurisdiction, either by amending domestic law or by adopting international conventions on the recognition and enforcement of foreign judgments.

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The European Regulations on Service of Documents and on Taking of Evidence – An Overview Henriette-Christine Boscheinen-Duursma, Linz

Abstract The article addresses the question of European Regulations on Service of Documents and Taking of Evidence emphasizing its relation to third countries. It outlines content and scope of said regulations and before the background of non-applicability in third countries and deferring national civil procedure und civil laws in Member states the article endorses the implementation of the process of simplification and acceleration of judicial assistance between these parties. It then analyses matter of competence of the EU and Member States to conclude agreements with third States in the respective field.

Keywords Service Regulation – Evidence Regulation – Taking of Evidence – Cases Lippens and ProRail – judicial cooperation with third countries.

A. Introduction The following article will give an outline of the European Regulations on Service of Documents („Service Regulation“)1 and on Taking of Evidence („Evidence Regulation“)2 with a particular view to third countries. The article is structured in three parts. First, a guideline of the content of the regulations is given. In the second part, we will have a look at the scope of application of the Evidence Regulation according to the jurisprudence of the Court of Justice of the European Union (CJEU). The third part will

1 Regulation No 1393/2007, which has replaced the Regulation 1348/2000. 2 Regulation No 1206/2001.

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look at the potential impact of these regulations on the service of documents and taking of evidence in non-EU countries.

B. Guideline on the content of the regulations The proper functioning of the EU’s internal market entails the need to improve and expedite the transmission of judicial and extrajudicial documents in civil or commercial matters for service between the Member States3. For this purpose, cooperation between courts in the taking of evidence should also be improved, and in particular simplified and accelerated4. Failing a binding instrument between all Member States concerning the transmission of judicial and extrajudicial documents and concerning the taking of evidence abroad in civil and commercial matters the European Union adopted in 2000 the Regulation No 1348/2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters and the Regulation No 1206/2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters. The 2000 Service Regulation was repealed in 2007 by the Regulation No 1393/2007 (Service Regulation recast). Efficiency and speed in judicial procedures in civil matters require that judicial and extrajudicial documents be transmitted directly and by rapid means between local bodies designated by the Member States as well as that the transmission and execution of requests for the performance of taking of evidence is to be made directly and by the most rapid means possible between Member States‘ courts5. The Service Regulation as well as the Evidence Regulation state that they prevail over respective provisions contained in international conventions concluded between EU Member States6. Member States are also declared to be free to adopt agreements or arrangements to further facilitate cooperation in the service of document or taking evidence7.

3 See Regulation No 1348/2000, 2nd recital. 4 Council Regulation (EC) No 1206/2001, 2nd recital. 5 Council Regulation (EC) No 1348/2000, 6th recital; Council Regulation (EC) No 1206/2001, 8th recital. 6 Art. 20 subs. 1 Service Regulation (recast) of 2007, Art. 21 subs. 1 Evidence Regulation. 7 Art. 20 subs. 2 Service Regulation, Art. 21 subs. 2 Evidence Regulation.

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Both the Service and the Evidence Regulations contain in their Chapters 1 general provisions. They deals with the scope of application of the Regulation and involved institution such as a central body for their functioning. The Service Regulation determines in Chapter 1 also the transmitting and receiving agencies, while the Evidence Regulation announces at this place the principle of direct transmission between the courts. The Service Regulation then contains in its Chapter 2 detailed provisions on the service of „judicial documents“. It regulates, in particular, the transmission and service of judicial documents, translation of documents, service of documents, refusal to accept a document, date of service, certificate of service and copy of the document served, costs, direct service, postal service and service by diplomatic or consular agents, legal aid. Chapter 3 deals with service of extrajudicial documents. The Evidence Regulation deals in Chapter 2 with transmission and execution of requests for taking evidence: the transmission of requests, in particular language and special form (section 1), the receipt of requests – without delay and latest within 90 days (Section 2) and the taking of evidence by the requested court including a possible refusal to executive the request (Section 3). Section 4 addresses direct taking of evidence by the requesting court. This is only allowed, if it can be performed on a voluntary basis without need for coercive measures. Section 5 deals with costs for the execution of the request

C. The CJEU judgments in the cases of Lippens and ProRail The scope of application and the relation between the national law of the EU Member States and the Evidence Regulation were dealt with by the Court of Justice of the European Union in the Judgments Lippens and ProRail (CJEU 06.09.2012, C-170/11 and CJEU 21.02.2013, C-332/11). In the Lippens case the Court revealed that the scope of the Evidence Regulation is limited to two methods of taking evidence, namely the taking of evidence by the requested court in accordance with Articles 10 to 16 thereof following a request from the requesting court of another Member State and the taking of evidence directly by the requesting court in another Member State, the detailed rules for which are set out in Article 17 of the Regulation8.

8 See CJEU Case C-170/11, 06.09.2012, Lippens and Others, ECLI:EU:C:2012:540, para. 26.

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However, the Evidence Regulation does not contain any provision governing or excluding the possibility for the court in one Member State of summoning a party residing in another Member State to appear and make a witness statement directly before it9. It follows that the Evidence Regulation applies as a general rule only if the court of a Member State decides to take evidence according to one of the two methods provided for by that regulation, in which case it is required to follow the procedures relating to those methods10. Next, it must be recalled that the aim of the Regulation is to make the taking of evidence in a cross-border context simple, effective and rapid. The taking, by a court of one Member State, of evidence in another Member State must not lead to the lengthening of national proceedings. That is why the Regulation has established a regime binding on all Member States to remove obstacles which may arise in that field11. Furthermore, the Regulation does not restrict the options to take evidence situated in other Member States, but aims to increase those options by encouraging cooperation between the courts in that area12. Finally, the interpretation according to which the Evidence Regulation does not govern exhaustively the taking of cross-border evidence, but simply aims to facilitate it, allowing use of other instruments which have the same aim, is supported by Article 21 subs.2 of this Regulation, which expressly authorizes agreements or arrangements between Member States to further facilitate the taking of evidence, provided that they are compatible with the regulation13.

D. Scope of application The Service Regulation as well as the Evidence Regulation are not applicable to third countries. Due to the widely deferring national civil procedure und civil laws an application of the two Regulations would not be practicable in relations with third countries, regardless of whether the third

9 CJEU Case C-170/11, 06.09.2012, Lippens and Others, ECLI:EU:C:2012:540, para. 27. 10 CJEU Case C-170/11, 06.09.2012, Lippens and Others, ECLI:EU:C:2012:540, para. 28. 11 CJEU Case C-170/11, 06.09.2012, Lippens and Others, ECLI:EU:C:2012:540, para. 29. 12 CJEU Case C-332/11, 21.02.2013, ProRail, ECLI:EU:C:2013:87, para. 44. 13 CJEU Case C-332/11, 21.02.2013, ProRail, ECLI:EU:C:2013:87, para. 46.

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country would recognize the application of the European Regulations or not. For example, under the Evidence Regulation the competent court of a Member State has the power to summon as a witness a party residing in another Member State and to hear him in accordance with the law of the Member State in which that court is situated. Furthermore, if a party fails to appear as a witness without a legitimate reason that court remains free to take any measures laid down by the law of its Member State, provided that they are applied in accordance with European Union law14. Application without exceptions of the law of the requesting court would in relation with third countries frequently lead to difficulties. In particular the restrictive causes to refuse the transmission or the taking of evidence, can only be justified by the principle of mutual trust between the Member States. Obviously in relations to third countries the causes of refusal must be wider than in the European Regulations. According to the more widely differing laws between the EU and non-EU countries, any agreement in third-country relations would have to be restricted to the regulation of key questions.

E. Judicial cooperation with third countries Nevertheless, an implementation of the process of simplification and acceleration of judicial assistance, which has been achieved by the European Regulations achieved between EU Member States, is certainly desirable also in relation to third countries. The need and use of judicial cooperation in civil matters is by its nature not restricted to relations between EU Member States. Before the EU passed its Service and Evidence Regulations, the EU Member States had already signed various conventions on the transmission of documents and the taking of evidence with third countries, in particular the 1965 Hague Service Convention and the 1970 Hague Convention on the Taking of Evidence Abroad. The main question in this context presently is whether EU Member States themselves or the European Union have the competence to conclude conventions on these matters with third countries. The European Union does not have explicit external powers concerning the transmission and the taking of evidence in civil or commercial matters.

14 CJEU Case C-170/11, 06.09.2012, Lippens and Others, ECLI:EU:C:2012:540, para. 38.

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In the original EEC Treaty there were not many provisions which expressly referred to external action by the Community. There were provisions on the common commercial policy, which mentioned the conclusion of international agreements on commercial policy. According to the implied powers doctrine, which is based on the Judgment of the European Court of Justice in the AETR case15 the Treaty contained implied external powers. Where the Treaty assigns explicit powers to the Community in a particular area, it must also have according to this judgment – similar powers to conclude agreements with non-member states in the same field so far this is necessary for the proper functioning of the internal market. From this follows the principle of parallelism between internal and external powers. The implied powers doctrine remains valid also after the TEU and the TFEU entered into force. As the European Union has used its internal power concerning the transmission and the taking of evidence in civil and commercial matters by adopting the Regulations on service of documents and on taking of evidence, the external powers in these matters are also devolved to the European Union, so far it is necessary for maintaining and developing the European Union as an area of freedom, security and justice. Thus the European Union has the (exclusive) competence to conclude conventions on these matters with third countries. Whether this competence will be used in the future, is a matter of a political character. States on the external border of the European Union in particular would need comparable regulations on service of documents and on taking of evidence in relation to third countries. In this respect there is a need for international agreements in these areas. Not least because of the Covid19 crisis, the responsible institutions of the European Union are likely to have other priorities in the near future. It would therefore be very useful that the European Union, until taking action in these areas, would entrust individual Member States with the competence to conclude international agreements with third countries concerning service of documents and taking of evidence. An informal cooperation between the courts of each Member State in the areas of service of documents and taking of evidence could also be considered. Of course, this would have the disadvantage that there would be no mutual legal obligations and that ultimately a certain degree of legal uncertainty would remain. In view of the fact that both areas are suitable

15 CJEU Case 22/70, 31.03.1971, Commission v Council, ECLI:EU:C:1971:32 – AETR.

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for interfering in the realm of individual rights, this solution should be seen as the ultima ratio. Finally, it would be conceivable for the member states to seek regulation on their national international civil procedural law. For example, all or at least the most important provisions of the two regulations could be legally adopted by the individual member states in their national law for third country matters. The same could also be done by non-member states. This would not imply a mutual obligation to recognize foreign law. However, recognition could be given on a voluntary basis. The more states – Member States as well as non-member states – have followed this path and include the core of the two regulations in their national international civil procedural law, the greater the chance of mutual acceptance and recognition. In this respect, this path seems promising. Before the European Union reaches a uniform solution by concluding multilateral agreements with third countries, the Member States should take up the above proposals – possibly also in parallel – and address the problem themselves to an interim solution.

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EU Special Procedures Regulations and Third Countries – Which Perspectives for Relations with Third Countries? Alexander Trunk, Kiel

Abstract The article addresses the EU’s Special Procedures Regulations in an overview with particular respect to third country relations. The author describes the current state, legal grounds for the existing Regulations and their practical relevance. The article then focuses on the question of the relevance of these Regulations for third States, identifies mutual trust as a precondition and concludes with suggestions for possible cooperation with third countries in this field.

Keywords Special procedures regulations – European Enforcement Order – European Order for Payment Procedures – European Small Claims Procedure – perspectives of cooperation with third countries.

A. EU Special Procedures Regulations: present state Relations with non-EU countries exist not only in the context of the Brussels Ia Regulation or accompanying EU legislation such as the Service and Evidence Regulations, but also in the „2nd generation“1 EU Regulations establishing special procedures for certain sub-categories of civil and commercial proceedings or decisions. At present, there are three Regulations of this kind: the European Enforcement Order (EEO) Regulation of 21 April 2004, the European Order for Payment Procedures (EOP) Regulation of 12 December 2006 (revised in 2015) and the European Small Claims Procedure (ESCP) Regulation of 11 July 2007 (also revised in 2015).

1 Cf. Junker, Internationales Zivilprozessrecht (5th edn. 2020), 21–22.

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These Regulations are usually characterized from the perspective of their legal consequences: a particularly liberal regime of cross-border recognition and enforcement within the EU. However, it seems preferable to analyse them under a broader perspective, both from legal policy and content of these Regulations. The common ground for these Regulations lies in the legal policy consideration that the regular provisions applicable to cross-border judicial cooperation (in particular the Brussels Ia Regulation) are not fully adequate to small cases, simple cases and cases with a typically lesser need of protection to one or both parties. The European Enforcement Order (EEO) Regulation responds to this by liberalizing cross-border recognition and enforcement for judgments (and assimilated titles) in „undisputed“ cases, if the court of origin2 confirms ex-post that jurisdiction existed under the Brussels Ia Regulation and that certain minimal procedural guarantees (mainly, correct service of the claim) were observed in the proceeding3. The European Order for Payment Procedures Regulation and the European Small Claims Procedure Regulation establish directly applicable special rules for cases directed at an “European Order for Payment”, i.e. a simplified and accelerated proceeding on money-claims in expectedly clear situations, and for cases on small money-claims (up to a value of € 5.000,--). All of these three Regulations deal only with recognition and enforcement between EU Member countries4. The European Enforcement Order Regulation does not provide for any specifics of the proceeding in the court of origin with regard to non-EU countries, i.e. this proceeding is governed by general rules such as the Brussels Ia Regulation5. In contrast, the European Order for Payment Procedures Regulation and the European Small Claims Procedure Regulation apply only to cases in which at least one of the parties is domiciled6 in another EU Member country than the country of the proceeding. The other party (or parties) can be domiciled in the country of the proceeding or abroad, even in a non-EU country. Jurisdiction under these two Regulations is also governed by the Brussels Ia

2 See Art. 6 of the Regulation. 3 This is required, in principle, only in cases of default judgments, not in cases of express recognition of the claim by the defendant or of settlements, see Art. 6 subs. 1 c) of the Regulation. 4 Excluding Denmark and, soon (after the Brexit transition period), the UK. 5 The EET Regulation does not require any particular “internationality” of the case. It would apply even to purely domestic case. 6 Or has his/her habitual residence.

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Regulation7. All of these Regulations are optional in the sense that they can be used by a party at his or her will, but do not exclude conducting the proceeding under general, domestic rules (including the Brussels Ia Regulation and other EU or international law). In this case the judgment (or other title) would not be granted liberalized recognition and enforcement under the three Regulations, but could be recognized and enforced under the Brussels Ia Regulation. The dogmatic relevance of the three Regulations is considerable, not only because they open the way to an even more liberalized mode of recognition and enforcement of executory titles than under the Brussels Ia Regulation, but also because they address the specific policy issues of simple cases, small cases and undisputed (uncontested) cases by establishing – at least in the European Order for Payment Procedures Regulation and the European Small Claims Procedure Regulation – specific unified procedural rules for such cases. Such rules might be regarded as an attractive model even by non-EU countries. On the other side, the practical relevance of the three Regulations has by now remained very limited. For example, a 2015 report the European Commission on the functioning of the European Order for Payment Procedures Regulation states that this procedure was currently used all over the EU only in 12.000 – 13.000 cases per year8, a truly minimal number when compared to the overall numbers of summary procedures under national laws9. Of course this does not exclude that the practical relevance of

7 See Art. 6 EOP Regulation (with one exception relating to consumer disputes) and Art. 19 ESCP Regulation. 8 Report of 13.10.2015, COM (2015) 495 final, p. 3, see https://ec.europa.eu/transpar ency/regdoc/rep/1/2015/EN/1-2015-495-EN-F1-1.PDF (last access at: 01.12.2020). In Austria and Germany, there are more than 4000 applications annually, in other countries there are between 300 and 700 applications annually or even significantly less. About the other two Regulations there are no consolidated data available, see e.g. for the ESP Regulation the European Parliament Study of November 2014, European Small Claims Procedure: Legal analysis of the Commission's proposal to remedy weaknesses in the current system, p. 18 (most EU Member States have very low numbers of applications – 188 on the average; Spain is an exception with more than 1000 applications annually), https://www.europarl.europa.eu/RegData/etudes/ IDAN/2014/542137/EPRS_IDA(2014)542137_REV1_EN.pdf (last access at: 01.12.2020). 9 On the other side, law firms regularly mention these proceedings as a useful possibility for cross-border enforcement, i.e. a certain practical use cannot be denied.

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the three Regulation might grow in the future, in particular if they undergo some future revision10.

B. The relevance of the three Regulations for third countries: status quo and perspectives The common denominator for the three Regulations with regard to third countries is that they deal only with recognition and enforcement between EU Member States. The EOP Regulation and the ESCP Regulation share, as to their relation with third countries, the additional characteristic that they apply only to proceedings with an EU-related cross-border element: the domicile of (at least) one party must be situated in another EU country than the (EU) country of the proceeding. Parties domiciled in non-EU countries can use these proceedings in their favor. For example, a creditor domiciled in the U.S. may use the EPO proceeding in (e.g.) Germany against a debtor domiciled (e.g.) in France). Jurisdiction in such a case would have to be grounded on the Brussels Ia Regulation. On the other side, parties domiciled in third countries can also be affected by the Regulations. E.g. a debtor (defendant) domiciled in Switzerland would underlie liberalized execution within the EU under the EEO title if he or she has, for example, not contested a claim and the victorious creditor applies and receives an EEO title after the conduct of the proceeding. The Lugano Convention, arguably, does not hinder the use of the EEO Regulation between EU members11. The same would be true for the other two EU Regulations. The UK is presently, during the transition

10 Cf. e.g, (for the ESCP Regulation) already Kramer, A Major Step in the Harmonization of Procedural Law in Europe: the European Small Claims Procedure Accomplishments, New Features and Some Fundamental Questions of European Harmonization (2008), https://core.ac.uk/download/pdf/18511222.pdf (last access at: 01.12.2020) and the ECC-Net Study of September 2012, European Small Claims Procedure Reports, https://ec.europa.eu/info/sites/info/files/small_claims_i nternational_claims_2012_en.pdf (last access at: 01.12.2020), furthermore the World Bank Study (undated, probably 2016), Fast-Tracking the Resolution of Minor Disputes: Experience from EU Member States, http://documents.worldbank.o rg/curated/en/670181487131729316/pdf/Fast-tracking-the-resolution-of-minor-dis putes-experience-from-EU-Member-States.pdf (last access at: 01.12.2020). 11 It is submitted that Art. 64 subs. 2 c) Lugano Convention 2007 does not hinder the application of the application of the EEO Regulation (and the EPO and ESP Regulation), as they are only an enhancement of the Brussels Ia Regulation covered by Art. 64 subs. 1 of the Lugano Convention.

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period, still regarded as an EU Member State for the purposes of the three Regulations, but will be a third country thereafter if no other agreement is made. From the perspective of parties domiciled in third countries this may have an adverse effect, as they lose most of the protection against enforcement of foreign titles granted under the Brussels Ia Regulation or the Lugano Convention, e.g. the public policy defense. If a third country wishes to exclude such an effect, it would need to convince the EU to limit application of the three Regulations in (some) cases involving parties domiciled in the respective third country, either by a modification of the Regulations or by an international treaty. An alternative for the third country would be to be included in some manner into the sphere of application of the three Regulations. As the UK is presently a Member State of the three Regulations, it might be a reasonable (and acceptable to the EU) approach to continue this status after the Brexit transition period. For Switzerland and other Lugano Convention Member States, this might also be an option. In contrast, the policy considerations with regard to other third countries are different. The first aspect is that the three Regulations are grounded on a particularly high level of trust between EU Member States. Whether such a trust is always justified need not be discussed at this place. In any case, with regard to other countries a comparable level of trust usually does not exist. Therefore, between the EU and third countries a simple extension of the application of three Regulations (or some of them) to third countries would not, in principle, seem feasible12. However this does not necessarily exclude any kind of cooperation with third countries in the spheres of application of the three Regulations. For example, third countries might choose, autonomously or on an agreed basis, to pass similar legislation on simple and small claims cases as under the EOP and ESCP Regulations, and this could be combined with a regime of mutual recognition and enforcement with the EU. This might also include special arrangements as to the conduct of such proceedings, e.g. the use of IT or the introduction of neutral control mechanisms. A similar solution can also be imagined for undisputed claims, at least in cases of express recognition of a claim or judicial settlements. From the EU’s perspective this may be acceptable, as the risks of abuse in such cases are rather limited, and it would always be possible to keep safety valves such as the public policy defense. On the other side, this would give third countries an addi-

12 There may be exceptions in extraordinary cases of specifically high mutual trust into the judiciaries of both side.

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tional impulse for judicial reforms and protection of parties domiciled in such countries. Such a dialogue with third countries could also be useful for future amendments of the three Regulations.

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The European Order for Payment Procedure and Third Countries Azar Aliyev, Halle

Abstract The article describes the order for payment procedure under EU Regulation (EC) No 1896/2006 in intra-EU cases and discusses in what regard and to what extent the solutions created by the EU might be transferred to the extra-EU order for payment procedure. The article closes by proposing a concept of jurisdiction for extra-EU proceedings with regard to both the Hague Conventions of 2005 and 2019 and the efficacy of proceedings.

Keywords Order for payment – European Order for Payment – Scope European Order for Payment Regulation – jurisdiction Brussels Ia Regulation – Transborder enforcement order for payment – Hague Convention 2005 – Hague Convention 2019.

A. Introduction The global economy has reached small and medium-sized enterprises as well as every single consumer worldwide. E-commerce, e-payments, global logistics and the rising market in digital content and services have created a new global marketplace with a huge number of small and medium-sized transactions. This development naturally leads to a rising number of transborder disputes. Stable markets need effective tools to settle these disputes. Otherwise, the development of a unanimous global economy could be jeopardized. Effective dispute settlement is an important element for national markets as well. On a national level, the majority of jurisdictions provide simplified legal procedures for uncontested pecuniary claims. However, the regulation of trans-border cases is anything but clear. The experience of the

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European Union with its special European procedure for uncontested pecuniary claims provided for in Regulation 1896/2006 creating the European Order for Payment procedure (EOP Regulation) is unique and could be used as a model for a global system. Additionally, the 20051 and 20192 Hague Conventions strongly support the development of trans-border cooperation in civil proceedings. This paper will first outline why the EU has limited the order for payment procedure exclusively to intra-EU cases. In the next step, some details will be presented on potential frameworks for an extra-EU order for payment procedure. This will be followed by an attempt to develop a concept of jurisdiction for those procedures with regard to both the Hague Conventions and the efficacy of proceedings. In conclusion, the contributor will summarize the results and venture a forecast.

B. History Back in 2006, the European Union passed Regulation 1896/2006 creating the European Order for Payment procedure as the very first common European civil procedure.3 The purpose of the EOP, stated in Art. 1 of the Regulation, is “to simplify, speed up and reduce the costs of litigation in cross-border cases concerning uncontested pecuniary claims …” and “to permit the free circulation of European orders for payment throughout the Member States.”4 To this end, the EOP Regulation not only determines the competent courts and mutual recognition and enforcement in crossborder contexts, but genuinely provides a European civil procedure for cross-border situations as an alternative to corresponding national law. 5 While the European Commission has considered the EOP Regulation as a generally successful European Act in its report on the application of the

1 Hague Convention of 30 June 2005 on Choice of Court Agreements, see https://ass ets.hcch.net/docs/510bc238-7318-47ed-9ed5-e0972510d98b.pdf (last access at: 30.10.2020). 2 Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, see https://www.hcch.net/en/instrume nts/conventions/full-text/?cid=137 (last access at: 30.10.2020). 3 Regulation (EC) No 1896/2006. 4 Regulation (EC), No 1896/2006, Art. 1; Crifò, Cross-border enforcement of debts in the European Union (2008), 110 f. 5 Commission, ‘Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Regulation (EC) 1896/2006’ COM (2015) 495 final, 1.

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EOP Regulation roughly seven years after its implementation by the Member States,6 a few issues remain for discussion, some of which become apparent in the Commission report. On the one hand, only a small number of Europeans – namely only 6% in 2010 – actually know about the EOP Regulation.7 On the other hand, those that do know about it are questioning its geographical scope of application.8 Taking a closer look at the geographical application as determined in Article 3 of the EOP Regulation, it becomes apparent why this subject is an area of interest. According to para. 1 of that Article, a cross-border case only arises if “at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court seized”. This means that the EOP Regulation is not generally applicable to purely domestic cases.9 Also, and more pressingly, the Regulation is not generally applicable in relation to debtors or creditors from non-Member States. Strictly speaking, the EOP can only involve parties from third countries if: a) the courts of a Member State have jurisdiction in the matter according to the EOP Regulation in conjunction with the Brussels Ia Regulation and b) either the claimant or defendant is domiciled or habitually resident in a different Member State.10 This can result in the bizarre situation where the EOP Regulation is applicable if one party (creditor or debtor) is domiciled or habitually resident in

6 COM (2015) 495 final, 3. 7 COM (2015) 495 final, 3 f.; it can likely be assumed that those problems have not been tackled accordingly since no significant increase in applications for a European Order for Payment were recorded until 2017, see http://www.courts.ie/Cour ts.ie/Library3.nsf/pagecurrent/F32036C5BD738498802580100030994A?opendocu ment (last access at: 30.10.2020). 8 COM (2015) 495 final, 4. 9 COM (2015) 495 final, 3 f. 10 Gruber in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/ EuIPR Vol. 2 (2015), Art. 3 EG-MahnVO, para. 6; Crifo, Cross-border enforcement of debts in the European Union (2009), 116; Storskrubb, Civil Procedure and EU Law (2008), 207 f.; Hess and Bittmann, ‘Die Verordnungen zur Einführung eines Europäischen Mahnverfahrens und eines Europäischen Verfahrens für geringfügige Forderungen – ein substantieller Integrationsschritt im Europäischen Zivilprozessrecht‘ (2008) IPRax, 305 (306); Mayr, ‘Das europäische Mahnverfahren und Österreich‘ (2008) JBl, 503 (506); McGuire, ‘Das neue Europäische Mahnverfahren (EuMVVO): Über das (Miss-)Verhältnis zwischen Effizienz und Schuldnerschutz‘ (2007) GPR, 303 (304).

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a Member State other than the State of Jurisdiction, but is not applicable if the only party living in a Member State resides in the same state as that of the competent court.11 This situation and a comparison to other European legislation on cross-border litigation, which generally encompasses relations with non-Member States without the challenges laid down in Art. 3 of the EOP Regulation,12 raises the question as to why the EOP is not generally applied to litigation involving parties from non-Member States. The legislative history can only partially provide an answer to this question: After discussions in literature since the 1980s, the most popular being Storme’s recommendation,13 the European Union started closing in on the idea of harmonized Civil Law, urging the Commission to identify the rules that needed harmonization in order to facilitate access to justice14 and to prepare new legislation on aspects of civil procedure that would guarantee cross-border judicial cooperation.15 Based on these recommendations, the Commission published a Green Paper in 2002 prompting the Union to introduce a common European order for payment16 since courts often were not actually concerned with dispute settlement but rather with attainment of enforceable titles for undisputed claims.17 According to the Commission, the introduction of rapid ways to recover undisputed claims was necessary in order to prevent bad debtors from thriving and consequently endangering especially small and medium enterprises within the Union. 18 This issue was even more pressing for the more cost- and time-consuming

11 Gruber in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/EuIPR Vol. 2 (2015), Art. 3 EG-MahnVO, para. 8. 12 For the Rome and Brussels Regulations compare: Art. 2 Regulation (EC) No 593/2008; Art. 3 Regulation (EC) No 864/2007; Art. 4 Council Regulation (EU) No 1259/2010; Art. 20 Regulation 2016/1103. 13 Storme, Reapprochement du droit judiciaire de l’Union Européenne – Approximation of Judiciary Law in the European Union (1994). 14 Action plan of the Council and the Commission on how best to implement the provisions of the Treaty of Amsterdam on an area of Freedom, Security and Justice, 23.01.1999, OJ C 19, 1 (10), point 41 (d). 15 European Council, Tampere presidency conclusions, point 38; see https://www.eu roparl.europa.eu/summits/tam_en.htm#c (last access at: 30.10.2020). 16 Commmission, ‘Green Paper on a European order for payment procedure and on measures to simplify and speed up small claims litigation’, COM (2002) 746 final, 8 ff.; see https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52002 DC0746&from=DECOM (last access at: 30.10.2020); in summary: von Bernstoff, ‘Forderungssicherung und -einzug bei EU-weiten Unternehmensgeschäften’ (2005) RIW, 646 (647 ff.). 17 COM (2002), 746 final, 8. 18 COM (2002), 746 final, 8.

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cross-border litigation, which might even discourage claimants from entering into cross-border relations,19 thereby contradicting one of the main goals of the European Union, namely the establishment of an internal market according to Art. 3, para. 3 Maastricht Treaty. 20 In the light of these arguments, the Commission proposed the introduction of a common European payment order at least for cross-border cases in order to counteract the effects mentioned above.21 Roughly two years after the Green Paper was published, the Commission proposed a first draft of the European Order for Payment Procedure on April 25, 2004.22 Based on the premise that the exequatur procedure should be abolished, at least for uncontested claims,23 the Commission prompted the Parliament to introduce a common order for payment procedure additional to the (already presented) European Enforcement Order for uncontested claims in order to ensure facilitated litigation in these cases.24 In contrast to the actual regulation, the original proposal aimed at encompassing both purely domestic and cross-border cases while implicitly limiting cross-border scope to cases within the EU.25 The Commission ‒ after being criticized for its broad scope of application by the legal service of the EU Council,26 the European Economic and Social Committee27 and the European Parliament’s Committee on Legal

19 COM (2002), 746 final, 10. 20 Treaty on European Union, signed in Maastricht on 07.02.1992, OJ C of 26.10.2012, 326/17. 21 COM (2002), 746 final, 10 f. 22 Commission, ‘Proposal for a Regulation of the European Parliament and of the Council creating a European order for payment procedure’ COM (2004) 173 final/3. 23 To this end compare Council, ‘Draft programme of measures for implementation of the principle of mutual recognition of decisions in civil and commercial matters’, 15.01.2001, OJ C 12, 1 (5 f.); available online https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/? uri=CELEX:32001Y0115(01)&qid=1576483416834&from=DE (last access at: 30.10.2020). 24 COM (2004), 173 final/3, 4; Regulation (EC) No 805/2004. 25 COM (2004), 173 final/3, 25.4.2004, 7. 26 Council, ‘Proposal for a Regulation of the European Parliament and the Council creating a European order for payment procedure – Opinion of the Legal Service’, 10107/04, JUR 267 JustCIV 80 CODEC 800, 6 f.; available online https://data.cons ilium.europa.eu/doc/document/ST-10107-2004-INIT/en/pdf (last access at: 30.10.2020). 27 The ECS, however, did not criticize the extension to domestic litigation: European Economic and Social Committee, OJ C 221, 08.09.2005, 80 f.

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Affairs28 ‒ published an amended proposal in February 2006.29 However, this time the Commission refrained from restricting the geographical scope of application to Member States.30 Instead, it demanded that the EOP apply to all cases in which European courts have jurisdiction according to the Brussels Ia Regulation31 in order not to violate obligations under international treaties, namely GATT 1994, the GATS and the TRIPS agreement.32 This proposal was quickly rejected in a Council Note33 and in a Common Understanding of the European Council and the Parliament,34 the result of a political agreement in the Justice and Home Affairs Committee.35 Extension of the geographical scope was discarded almost as suddenly as it had been proposed, limiting the scope of application once again to disputes between parties residing in Member States.36 Despite the fact that the Parliament’s Legal Committee criticized this step and yet again pro-

28 Committee on Legal Affairs, ‘Report on the proposal of the European Parliament and of the Council creating a European order for payment procedure’ (2005), A6-0240/2005 final, 2; available online at https://www.europarl.europa.eu/sides/ge tDoc.do?pubRef=-//EP//NONSGML+REPORT+A6-2005-0240+0+DOC+PDF+V0// EN (last access at: 30.10.2020). 29 Commission, ‘Amended proposal for a Regulation of the European Parliament and of the Council creating a European order for payment procedure’ COM (2006) 57 final; available online https://www.europarl.europa.eu/registre/docs_aut res_institutions/commission_europeenne/com/2006/0057/COM_COM(2006)0057 _EN.pdf (last access: 30.10.2020). 30 COM (2006) 57 final, 4. 31 Brussels I at the time: Council Regulation No (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. 32 COM (2006) 57 final, 4. 33 Council of the European Union, ‘Note from Presidency on the proposal for a Regulation creating a European order for payment procedure’ (2006), 6164/06, 11; available online: https://data.consilium.europa.eu/doc/document/ST-6164-200 6-INIT/en/pdf (last access at: 30.10.2020). 34 Council of the European Union, ‘Note on the Common Guidelines’ (2006), 143000/06, 2; available online: https://data.consilium.europa.eu/doc/document/ST -14300-2006-INIT/en/pdf (last access at: 30.10.2020). 35 Kropholler and von Hein, Europäisches Zivilprozessrecht (2020), Einl. EuMVVO, para. 10. 36 Council of the European Union, ‘Press Release concerning the 2709th Council Meeting on Justice and Home Affairs’ (2006), C06/38, 16; available online: https:/ /ec.europa.eu/commission/presscorner/detail/en/PRES_06_38 (last access at: 30.10.2020).

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posed extension of the geographical scope to non-Member States,37 the Commission and Parliament stuck to their understanding, limiting the scope of applicability in Art. 3 of the EOP Regulation as we know it. Since none of the official documents provide any information about why the geographical scope was extended in the first place and why this proposal was so quickly rejected, one can only speculate as to the considerations behind these actions. While a number of reasons might come to mind, one in particular stands out: the close connection of the EOP to the Brussels Ia Regulation due to Art. 6 of the EOP Regulation. The scope of applicability of the Brussels Ia Regulation is rather special compared to other legislation in the area of civil litigation. While the first version was generally restricted to cases in which the defendant was domiciled or habitually resident in a Member State,38 the second revised version proposed an extension of the geographical scope to defendants from third countries.39 However, this only served the purpose of favouring plaintiffs from EU Member States but not equal treatment of defendants and plaintiffs within and outside of the EU.40 Likely due to the mindset behind it, this proposal was kept in the final EOP Regulation at least partially so that claimants who are especially in need of protection, such as consumers and employees, can file their lawsuit with the courts of a Member State, even if the defendant is located in a

37 Committee on Legal Affairs, ‘Recommendation for Second Reading, on the Council common position for adopting a regulation of the European Parliament and of the Council creating a European order for payment procedure’ (2006), A6-0316/2006, 5 f.; https://www.europarl.europa.eu/RegData/seance_pleniere/text es_deposes/rapports/2006/0316/P6_A(2006)0316_EN.pdf (last access at: 30.10.2020). 38 Regulation (EC), No 44/2001, Art. 4, para. 6. 39 Commission, ‘Proposal for a Regulation of the European Parliament and the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, Recast’ COM (2010) 748 final, 5; available online: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0748:FIN:EN: P D F (last access at: 30.10.2020); Symeonides, ‘The Brussels I Regulation and Third Countries’ (2018) SSRN Online Journal, 4. 40 Commission, ‘Impact assessment accompanying the Proposal for a Regulation of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters Recast’, SEC (2010) 1547 final, 25; available online: https://eur-lex.europa.eu/LexUriServ/LexUr iServ.do?uri=SEC:2010:1547:FIN:EN:PDF (last access at: 30.10.2020).

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third country.41 The EOP on the other hand deals with undisputed debts, rendering the ‘weakness’ or ‘strength’ of a particular involved party rather negligible. This might be why the EOP Regulation’s geographical scope does not equal that of the Brussels Ia Regulation. One question remaining is whether the European Union would even be competent to extend the geographical scope of application to non-Member States. When the Brussels I Regulation and the EOP Regulation were passed, Art. 61 TFEU was still in force, restricting the EU from creating uniform jurisdictional rules in cases involving third countries. 42 However at the time the amendments to both regulations were passed, this Article had already been replaced by Art. 81 TFEU, defining the competences of the EU differently from its predecessor. Because of this rewording, some authors argue that the scope should or could generally be extended to situations involving parties from third countries.43

C. Possible framework However, even if the competence issue was solved definitively, the crucial question remains: does the current European model fit the demands of disputes involving non-EU-parties? To deliver an answer to this question, it is crucial to identify critical points and to design concepts acceptable for all parties.

I. Extension of Applicability The European Union prefers to develop its common civil procedure within the global framework of The Hague Conference and other international organizations.44 Issues of civil procedure are addressed neither in the new

41 Symeonides, ‘The Brussels I Regulation and Third Countries’ (2018) SSRN Online Journal, 5; Linke/Hau, in: Linke/Hau, Internationales Zivilverfahrensrecht, para. 4.36. 42 Treaty on the Functioning of the European Union (TFEU), Art. 61; Symeonides, ‘The Brussels I Regulation and Third Countries’ (2018) SSRN Online Journal, 5. 43 Kropholler and von Hein, Europäisches Zivilprozessrecht (2020), EuMVVO Einl., para. 26. 44 This is due to the Union having external competence in civil procedure law, compare: Lenzing, in: Groeben/Hatje/Schwarze, AEUV Art. 81, para. 24; Leible in: Streinz, AEUV, Art. 81, para. 59.

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generation of economic cooperation agreements with major economic partners45 nor in the comprehensive association agreements with the Member States of The European Neighbourhood Policy.46 This approach is not convincing. Decades of negotiations for a common agreement on recognition and enforcement of foreign court decisions47 show that the global approach cannot keep pace with the demands of global markets. At the same time, bi- or multilateral projects are important models for global solutions. Both Hague Conventions of 2005 and 2019 are based on principles and use tools that were well established in international treaty practice. In any case, bi- and multilateral solutions in the area of civil procedure never impede global treaties because all treaties allow reference to any available remedy (for example, Art. 23 Hague Convention of 2019). Overall, the comprehensive economic agreements of the EU provide an ideal framework for developing new formats for dispute settlement in civil and commercial matters, including development of a unique international order for payment proceedings.

45 Such as CETA, the EU-Singapore Agreement and the EU-Vietnam Trade Agreement. 46 See EU – Ukraine Deep and Comprehensive Free Trade Agreement (as a part of EU – Ukraine Association Agreement from 29.05.2014, text available at https://eu r-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22014A0529(01)&from= EN (last access at: 30.10.2020), EU – Moldova Deep and Comprehensive Free Trade Agreement (as a part of EU – Moldova Association Agreement from 30.08.2014, text available at https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/? uri=CELEX:22014A0830(01)&from=EN (last access at: 30.10.2020), EU – Georgia Deep and Comprehensive Free Trade Agreement (as a part of EU – Georgia Association Agreement from 30.08.2014, text available at https://eur-lex.europa.eu/lega l-content/en/TXT/PDF/?uri=CELEX:22014A0830(02) (last access at: 30.10.2020). 47 First Draft Agreement of 1970s, for prior drafts compare among others ‘The Recommendation relating to the connection between the Convention on the Recognition and Enforcement of Foreign Judgments and the supplementary Protocol’ (1968) 34 AmJCompLaw, 601 f.

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II. Basic concept The basic idea of the EOP – a single-tiered proceeding48 based on special forms49 and limited court control – was strongly challenged by its opponents. In particular, the defendant’s supposedly very limited remedies were heavily criticized.50 Since these criticisms mainly apply to jurisdictions that are not familiar with the order for payment procedure, some of which are Member States of the European Union,51 it is remarkable that the Commission does not mention access to justice as a check deficit in the Report on application of the EOP Regulation.52 Despite the Commission’s opinion, the risks of fraud and abuse of the order for payments cannot be excluded.53 The most effective way to reduce these risks could be a limitation of claim value. Besides the examination of – at least the general outline of – the grounds of each specific claim (cf. the EOP Regulation, Art. 7, para. 2, subpara. d and 11, para. 1, subpara. b) provided for in the EOP Regulation, digital control mechanisms would allow identification of a suspiciously high number of applications and trends, such as an unusually large number of applications, or numerous applications from the same claimant. Such mechanisms are effective only in an electronic system. Numerous jurisdictions, including those in the European Union, have gathered substan-

48 Commission, ‘Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Regulation’ COM (2015) 495 final, 2. 49 See https://e-justice.europa.eu/content_european_payment_order_forms-156-en.d o (last access at: 30.10.2020). 50 McGuire‚ ‘Das neue Europäische Mahnverfahren (EuMVVO): Über das (Miss-)Verhältnis zwischen Effizienz und Schuldnerschutz‘ (2007) GPR, 303 (304). 51 Despite most jurisdictions being familiar with the order for payment procedure, some countries – namely Denmark, Finland, Great Britain, Ireland and the Netherlands – do not recognise any specific order for payment procedure. See: Kodek in: Geimer/Schütze, Internationaler Rechtsverkehr, Vol. 3, VO Nr. 1896/2006 Einleitung, para. 14. 52 Instead, it is clearly stated that “no problems have been reported on the opposition to the European payment orders”; COM (2015) 495 final, 9. 53 From 2010 to 2013, $18.5 billion was illegally transferred from Russia via Moldova abroad through using the order for payment procedure mechanism in the framework of CIS Treaties. See ‘Ottok kapitala zatopil Moldaviju’ [Capital outflow has flooded Moldova] (25.04.2014) Gazeta Kommersant 72; see https:// www.kommersant.ru/doc/2459951 (last access at: 30.10.2020).

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tial experience with the electronic order for payments procedure.54 This experience will enable development of a digital platform for a comprehensive electronic EOP system.

III. Rules on Jurisdiction The EOP Regulation solves jurisdictional issues by a general reference to the Brussels Ia Regulation. Since there are no rules on an international level comparable to those laid down in the Brussels Ia Regulation, the issue of jurisdiction could be a major challenge for the cross-border order for payment procedure with non-EU States. However, jurisdictional issues in the order for payment procedure are less critical than in other types of dispute. Firstly, experience within the European Union shows that jurisdiction provides no substantive privileges to the parties to the order for payment procedure since – despite differences in the specific concepts – the place of domicile is the default jurisdiction in the vast majority of, if not all, jurisdictions.55 Secondly, the EOP ‒ as well as many similar proceedings in other jurisdictions ‒ provides for electronic communication through special forms as the usual way of procedural interaction between the parties. This substantially reduces the access to justice problem within the EU, as the prerequisites for electronic access to the order for payment procedure are the same in all Member States.56 The experience of the EU and other jurisdictions shows that electronic access to the order for payment procedure could significantly simplify as well as speed up access to justice. The claimant just needs to fill in a special form available in their own language and submit it electronically to the competent court. The same applies to a defendant who replies to the claim with another electronic form. The only obstacle on the side of the claimant is to provide a brief description of circumstances (analogous to EOP Regulation, Art. 7, para. 3, subpara. e) in the language of the court. However, numerous jurisdictions accept statements in English or even several other

54 COM (2015) 495 final, 6. 55 Compare country reports in: Geimer/Schütze, Internationaler Rechtsverkehr, Vol. 6. 56 Kodek in: Geimer/Schütze, Internationaler Rechtsverkehr, Vol. 3, VO Nr. 1896/2006 Art. 7, para. 27.

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languages.57 Therefore, the compromise could be easier to achieve than expected.

IV. Enforcement Since jurisdiction does not provide any substantive privileges for any party in an electronic and form-based order for payment procedure, efficacy of enforcement could be the decisive criterion for jurisdiction. For the EOP, the main enforcement issues are definitively solved in Art. 19 of the EOP Regulation, according to which the EOP can be enforced in every European Member State without any additional procedure. Enforcement of the EOP in a Member State therefore does not pose a challenge for the claimant. In addition, the unique 58 framework of the Brussels Ia Regulation59 provides unified rules for enforcement of judgments in all Member States. In relation to non-Member States, however, the Brussels Ia Regulation is very narrow and provides highly fragmented regulation for recognition and enforcement of judgments.60 Therefore, foreign court decisions are generally recognized and enforced either based on bilateral or regional treaties or on the national level. Notably, recognition and enforcement of foreign court decisions is a problem even between states with substantial economic and social relations.61

57 According to the European Commission, the Czech Republic, Estonia, Cyprus and Sweden also accept English and France accepts English, German, Italian and Spanish as the submission language in terms of Regulation (EC) No 1896/2006, Art. 29, see: COM (2015) 495 final, 6. 58 This regulation’s predecessors – the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and Regulation (EC) 44/2001 – created the first unified framework on recognition and enforcement of foreign court decisions; Paulus, in: Geimer/Schütze, Internationaler Rechtsverkehr, Vol. 1, VO (EU) Nr. 1215/2012 Vor Art. 4, para. 4; Gottwald, in: MüKo-ZPO, Vol. 3 (2020), Brüssel Ia-Vo, Vorbemerkung zu Art. 1, para. 1; see also the huge number of bilateral agreements as displayed in: Geimer/Schütze, Internationaler Rechtsverkehr, Vol. 4. 59 Regulation (EU) No. 1215/2012. 60 It is generally questionable to what extent the Brussels Ia-Regulation is at all applicable in relation to third countries, Gottwald, in: MüKo-ZPO, Vol. 3, Art. 4 Brüssel Ia-VO, para. 11 ff. 61 For instance, despite developed economic and humanitarian cooperation between Russia and Germany, there is no international treaty on recognition and enforcement of court decisions between these states, and the principle of reciprocity in

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Even if a jurisdiction provides for recognition and enforcement of decisions from the jurisdiction of origin, this is always subject to specific exequatur proceedings. These proceedings are quite time-consuming and in the worst case end in denial of recognition and enforcement. All in all, this means that enforcement is by far more effective in the courts’ own jurisdictions. On the other hand, the domicile of the defendant is the most usual place to enforce a decision because the defendant’s assets are concentrated there.62 Therefore, from the enforcement perspective, the jurisdiction of the courts at the defendant’s domicile seems to be the most effective option. Even if the Hague Conventions of 2005 and 2019 providing for recognition and enforcement of foreign court decisions become effective, the situation will not change substantially. Both Conventions provide for recognition and enforcement proceedings. However, the Conventions could substantively improve recognition and enforcement of orders for payment in third jurisdictions.

V. Statement of opposition: transformation in court litigation Another important element affecting the efficacy of jurisdiction in the international order for payment procedure is continuation of the order for payment procedure in the framework of court litigation in case the defendant opposes the order for payment. According to the EOP Regulation, Art. 16, para. 1, the defendant may lodge an opposition to the EOP with the court of origin within 30 days of service. If the defendant opposes the order for payment on these terms, the procedure will continue as litigation proceedings before the competent court of the state of origin of the order for payment, Art. 17, para. 1. This approach functions perfectly within the framework of the Brussels Ia Regulation, which provides for unified rules on competence for all Member State jurisdictions indicated in Artt. 24–26 and Art. 4 ff. The experience of the EOP shows that, on average, only a very small percentage of

the recognition and enforcement of court decisions does not apply (See more comprehensively: Eliseev, Perspektivy vzaimnogo priznanija i ispolnenija sudebnyh reshenij v otnoshenijah mezhdu Rossiej i Germaniej [Perspectives of reciprocal recognition and enforcement of court decisions in relations between Russia and Germany] 12 Zakon 2016, 178–191). 62 Schack, Internationales Zivilverfahrensrecht, 89, para. 222.

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orders for payment are actually opposed by the defendant63 and order for payment procedures are therefore only exceptionally transformed into litigation proceedings. Despite the limited number of cases, effective rules for transformation of the order for payment procedure into court litigation are necessary for extra-EU order for payment procedures. Beyond the EU, there are no rules comparable to the Brussels Ia Regulation unifying rules on competence for numerous states. While some international treaties do provide for competence rules, these rules are still, however fragmentary, and gaps are filled by national regulations.64 Therefore, courts generally decide on their jurisdiction based on national legislation. Under such unclear regulation, identifying the competent court is not a trivial task and will of course be a substantial impediment to the proceedings. Specifically, the claimant will need to carry out an extensive test of rules in at least two jurisdictions in order to determine the competent court. Even if substantively worthwhile, the claimant is mostly left with substantial uncertainties due to differences in national legislation. Hence, the current European approach will not function for extra-EU order for payment procedures as long there is no regulation on jurisdiction comparable to the Brussels Ia Regulation. The idea of completely decoupling litigation proceedings ‒ after opposition by the defendant ‒ from the order for payment procedure and starting the litigation proceedings from the jurisdiction stage is also highly problematic. In this case, either a special procedure for transfer of the case from one jurisdiction to another or a complete restart of the case is needed. It would be very difficult to develop rules on transfer of cases from one jurisdiction to another. Even setting joint rules on jurisdiction seems to be an easier way to take. The recent experience of the EU illustrates numerous problems connected to the trans-

63 The numbers of opposition to orders for payment differ widely, ranking from 4% in Austria to 16% in France and Germany and finally 50% in Greece, compare: COM (2015) 495 final, 8 f. 64 Minsk Convention on Legal Aid and Legal Relations in Civil, Family and Criminal Cases, (signed 22 January 1993 in Minsk, Belarus), text in English available online, see http://cisarbitration.com/wp-content/uploads/2017/02/Minsk-Convention-on-Legal-Assistance-and-Legal-Relations-in-Civil-Family-and-Criminal-Matters-english.pdf (last access: 30.10.2020); Kiev Convention on Settling Disputes Related to Commercial Activities, (signed 20 March 1992 in Kiev, Ukraine), text in Russian available online http://www.consultant.ru/document/ cons_doc_LAW_835/11f5a8e6e30558e054dd10d3a20a623290fad292/ (last access: 30.10.2020).

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border transfer of cases.65 The second option, namely complete restart of the case, eliminates the idea of an effective order for payment procedure, because the defendant can push back the process to the very beginning simply by opposition. Therefore, in the extra-EU context the most effective solution for continuation of the order for payment procedure in the framework of litigation proceedings after a statement of opposition by the defendant would be to remain in the jurisdiction of the order for payment procedure – the defendant’s seat. Continuation of the order for payment procedure in the appropriate form of civil proceedings in the same jurisdiction is the usual consequence of the defendant’s statement of opposition. European statistics confirm this assumption so far.66 The jurisdiction in the defendant’s domicile for litigation proceedings is the default jurisdiction in the majority of states and usually provides the best chance of successful enforcement. However, numerous states provide for exceptions such as exclusive jurisdiction (e.g. proceedings on rights in rem, some corporate disputes) and alternative jurisdictions (e.g. proceedings involving a consumer, close connection to disputes in another state). These exceptions pursue different objectives. While the objectives of exclusive jurisdiction are generally a simplification of proceedings for the parties involved and a guarantee of the closest connection of the competent court to the issue concerned,67 alternative jurisdictions mostly favour the weaker party.68 In the extra-EU context, the decision of the claimant to apply for an order for payment should be qualified as the ultimate decision regarding selection of an alternative jurisdiction in favour of jurisdiction at the defendant’s domicile. This solution makes it possible to avoid numerous problems connected to choice of alternative jurisdictions and transfer of a case

65 Meller-Hannich, ‘Schnittstellen und Wechselwirkungen zwischen dem europäischen Zivilprozessrecht und dem nationalen Vollstreckungsrecht’ (2020) 119 ZVglRWiss 254-275. 66 Since Regulation (EC) No 1896/2006, Art. 6 refers to the Brussels Ia-Regulation, based on which the second most cases were decided according to Art. 4 and therefore the domicile rule. See: Kramer et al., ‘The application of Brussels I (Recast) in the legal practice of EU Member States Synthesis Report’; available online: https://www.asser.nl/media/5018/m-5797-ec-justice-the-application-of-brussels-1-09-outputs-synthesis-report.pdf (last access at: 30.10.2020); see also: Gebauer, in: Wieczorek/Schütze, Zivilprozessordnung und Nebengesetze, Art. 4 Brüssel Ia-VO, para. 15. 67 Gottwald, in: MüKo-ZPO, Vol. 3, Art. 24 Brüssel Ia-VO, para. 1. 68 Regulation (EU), No 1215/2012, Art. 14, 18.

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from one jurisdiction to another. Protection of the claimant’s procedural rights as usually envisaged by alternative jurisdictions will not be affected by such a strict link. In fact, the claimant does not lose any alternative jurisdiction. Indeed, the opposite is the case: the claimant receives an additional possibility to settle the dispute by lodging an application for an order for payment. The claimant can alternatively decide either to file a claim in any other jurisdiction ready to accept the case or file an application for an order for payment in the defendant’s domicile. The situation is different with regard to exclusive jurisdictions. The objective of exclusive jurisdiction is to provide the state with the closest link to the dispute, which the parties cannot effectively opt out of. Notably, the vast majority of disputes subject to exclusive jurisdiction concern absolute rights and entries in public registers, whereas payment orders can only be issued for pecuniary claims for a specific amount (see, for example, EOP Regulation, Art. 4) arising from contractual obligations (see, for example, EOP Regulation, Art. 2, para. 2, subpara. d). Even if the pecuniary claim is based on a dispute subject to exclusive jurisdiction, the competent court can usually interrupt the proceedings on the pecuniary claim until the court with exclusive jurisdiction decides on the right.69 Hence, the number of orders for payment procedure that need to be continued in litigation proceedings based on exclusive jurisdiction might be quite limited. Nevertheless, those cases involving both EU Member and non-Member States need to be addressed. The usual approach of numerous jurisdictions – an exhaustive list of disputes subject to exclusive jurisdiction – seems to be appropriate in this situation.70 This approach is also followed by The Hague Conventions 2005 and 2019 (Artt. 21 and 19 respectively). Contracting States can exclude matters of strong interest from the application of the Convention and establish lists of exclusive jurisdiction. These lists not only entitle the declaring state to deny recognition and enforcement of decisions made in violation of exclusive jurisdiction, but also oblige other Contracting States to

69 Cf. for patent disputes Gottwald, in: MüKo-ZPO, Vol. 3, Brüssel Ia-VO Art. 24, para. 38. 70 In this context, Art. 24 Brussels Ia-Regulation poses an additional problem concerning the reciprocity of national and third-country regulation. Here, it is questionable whether – if the circumstance establishing a court’s exclusive jurisdiction is based outside of the EU – the court is allowed to reciprocally deny its jurisdiction in an analogy to Art. 24 Brussels Ia-Regulation if a comparable norm exists in that state, compare: Kreuzer/Wagner/Reder, in: Dauses/Ludwigs, Handbuch des EU-Wirtschaftsrechts, Vol 2, para. 22.

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deny recognition and enforcement of those decisions. Hence, exclusive jurisdictions of the Contracting States are effectively protected in all Contracting States. A similar regulation could be established for an extra-EU order for payment procedure. The court at the place of the order for payment procedure would be prompted to deny its competence if the order was opposed by the defendant and the subject matter of the dispute is contained in the list of exclusive jurisdictions provided by the other Contracting State. The rules of The Hague Conventions 2005 and 2019 should be applicable to payment orders if both Contracting States become members of the Conventions. This will allow creation of a unified system of exclusive jurisdictions for extra-EU order for payment proceedings and Hague Conventions. However, the approach of the provisions in the Hague Conventions that allow Contracting States to refuse recognition and enforcement of decisions rendered within the exclusive jurisdiction of another Contracting State have a caveat. That is, if these provisions were applicable to orders for payment, the court issuing an order for payment would have to check each time whether it violates the exclusive jurisdiction of any other Contracting State. This test could be quite time-consuming and therefore eliminate the advantages of the order for payment procedure. A better way would be to limit the review for the purposes of the order for payment procedure only to a prima facie test and postpone detailed review to the proceedings after the defendant’s opposition. Since the object of the order for payment procedure can only be a pecuniary claim and no decision is made as to the rights of the parties, the decision therefore has no res judicata effect with regard to rights, which are usually reserved for specific jurisdictions. Therefore, there is no real risk that the order for payment procedure will affect the exclusive jurisdiction of any state. Recognition and enforcement of order for payments should be excluded from the exceptions of both Hague Conventions providing for a possibility to deny recognition and enforcement of a decision that violates the exclusive jurisdiction of any Contracting State.

D. Conclusions The general strategy of the European Union to exclude international civil procedure from the scope of economic treaties with third countries does not reflect the demands of the European and global economy, especially of small and medium enterprises, which are eager to expand their potential markets. The comprehensive cooperation agreements of the EU with its 251

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major economic partners and members of The European Neighbourhood Policy programmes could be an appropriate framework for developing new tools for trans-border dispute settlement. Justice remains one of the core elements of sovereignty and thus a sensitive issue for states. At the same time, private companies, in particular platforms and providers of payment services, are developing their own effective dispute settlement mechanisms, which can barely be controlled by national states. It is therefore important to develop new concepts that will allow settlement of trans-border civil and commercial disputes to be kept in the domain of state courts. The order for payment procedure could be an interesting model since the proceeding has no adjudication element, which makes it a perfect candidate for a pilot concept. The experiences of the EU concerning the application of the EOP so far can be very helpful, especially with regard to the general structure of proceedings (form-based), defence options of the defendant, grounds for rejection of the application, and the like. Some adjustments with regard to the specifics of relationships with third countries and technical developments, such as exclusively digital communication between the applicant and the court and limitation of the claim amount should nevertheless be taken into consideration. It could be appropriate to reduce the risks of abuse by limiting the amount of the claim and specific control systems against abusive applications. However, regulation of numerous specific issues, in particular the international jurisdiction of courts as well as recognition and enforcement of orders, cannot be copied from European documents. For these issues, The Hague Conventions 2005 and 2019 provide solutions, such as exclusive jurisdiction, which were consented to by the Member States. The critical issue requiring a genuine solution is jurisdiction. This paper shows that jurisdiction in the order for payment procedure as well as for possible subsequent proceedings in the case of an objection by the defendant should be established at the domicile of the respondent, which allows complicated jurisdiction tests to be avoided. The domicile of the respondent is accepted as the default jurisdiction in the majority of legal systems. It is the most convenient jurisdiction for the defendant and therefore does not affect the defendant’s interests. This jurisdiction will establish an alternative to all other jurisdictions available to the claimant. That way, the claimant would generally receive an additional option to lodge an order for payment, but by lodging an order for payment application the claimant would make an ultimate choice in favour of the defendant’s jurisdiction. The only exception should be made for exclusive jurisdictions. The list of exclusive jurisdictions should be harmonized with the respec-

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tive lists submitted by the Member States in accordance with Art. 18 Hague Convention of 2019. The global economy is constantly accelerating. In contrast, the global legal framework cannot keep pace. Unfortunately, the global political situation leaves very few hopes that any breakthrough will be achieved in the nearest future. It is therefore crucial to identify critical topics which can be addressed by rather small initiatives. To this end, a unified order for payment procedure with third countries could be a good starting point for the EU.

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Relationship of the Brussels Ia Regulation with Soft Law in the Field of International Civil Procedure: Some Notes on the Planned European Rules of Civil Procedure Nazar Panych, Kiel

Abstract For decades, the European Union has been working on the intensification of judicial cooperation between its member States. This object is pursued, for example, by the Brussels Ia Regulation as well as various other Regulations. However, modern EU civil procedure law has a somewhat isolated character in so far it contains only few provisions dealing with third States. The third-country problem has not yet been solved efficiently. Parallel to the lawmaker, science is interested in finding possible solutions as well. Since 2013 two widely-known law reform oriented institutions based in Europe – the European Law Institute in Vienna (ELI) and the International Institute for the Unification of Private Law in Rome (UNIDROIT) – have been working on the drafting of European Principles in the field of the law of civil procedure. This work has recently been completed and the Model European Principles of Civil Procedure have been passed by the two organizations. Whether and to what extent the authors have found a good balance between the requirements and reservations of the individual EU process regimes deserves a closer look in this book. This may determine both the future of the principles and future legislative work of the EU, but also the success of the Principles in non-EU member countries and their relations with the EU.

Keywords Civil Procedure – Brussels Ia Regulation – soft law – EU – third States – CIS – ALI/UNIDROIT Principles of Transnational Civil Procedure – ELI/ UNIDROIT European Rules of Civil Procedure.

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A. Introduction The process of unification of Europe has never been as successful as in the last decades. Nevertheless, local factors play a slowing effect on this process to date. Efforts aimed at unification of Europe are limited by various factors, for example, sectorial (approximation only in certain areas) or territorial (approximation only between participants of relevant interstate entities). Taking into account that not all European countries are members of the EU, the desire to create spaces such as an area of freedom, security and justice (Art. 3 TEU) is not limited to the EU. Similar goals are set by other interstate entities (unions), including those existing in non-EU Eastern Europe. However, due to the locality and inconsistency of approaches to these processes, there are risks of building a Europe of isolated spaces, in particular in the area of justice. If we take a look the EU's efforts in this field in more detail, then it should be noted that the intensification of cooperation in the field of justice between the EU Member States has long been one of the priorities of EEC, now the EU. The stated purpose is pursued, among others, by the Brussels Ia Regulation with regard to international civil procedure. At the same time, harmonization of EU civil procedure law is still somewhat isolated. It mainly takes place within the EU, but does not offer effective solutions as to relations with third countries. In particular, the Brussels Ia Regulation is applicable to claimants resident in third countries and defendants resident in one of the EU Member States.1 However, it is problematic to extend the rules of this Regulation to defendants who reside outside the EU.2 On the other hand, the development of the EU’s Area of Freedom, Security and Justice is relevant not only for the EU itself, but also for the Union's relations with third countries.3

1 CJEU Case C-412/98, 13.07.2000, Group Josi Reinsurance Company SA v Universal General Insurance Company (UGIC), ECR 2000 I-05925, para. 59 et seq.; CJEU Case C-281/02, 01.03.2005, Andrew Owusu v N.B. Jackson, ECR 2005 I-01383, para. 24 et seq. 2 Adolphsen, Europäisches Zivilverfahrensrecht (2nd edn, 2015), p. 81 et seq., Hess, Europäisches Zivilprozessrecht, § 5, para. 9 et seq., Schack, IZVR, para. 108 et seq. 3 In particular, with those States which, in treaties concluded with the EU, have undertaken to approximate their legislation with that of the EU, see, for example, Article 1, paragraph 2 (f), of the EU-Georgia Association Agreement of 01.07.2016, ABl. Nr. L 261 p. 4, part 1 of article 12 of the EU-Moldova Association Agreement of 01.07.2016, ABl. Nr. L 260 p. 4, item (d) of Article 1, paragraph 2, of the EUUkraine Association Agreement of 01.09.2017, ABl. Nr. L 161 p. 3.

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In a similar direction, a process of creating a common space of justice between the post-Soviet States of Eastern Europe was also developing in the 2000s. For example, in 1999, with the support of the Council of the Interparliamentary Assembly of Member Nations of the Commonwealth of Independent States (CIS),4 work on the preparation of a draft Model Code of Civil Procedure for CIS member States began.5 In 2003, the Assembly even approved the concept and structure of such a Model Code.6 One of the main arguments for the adoption of this Code was referred to as the impact of international agreements on national procedural law systems, and the need to bring these systems into compliance with these agreements.7 Thus, at both the EU and (for example) CIS levels, the wish to intensify cooperation in the field of justice has been declared. The EU has in the last decennia adopted a vast regulatory framework in this field, which at the same time – it is submitted – needs substantial reform in the context of relations with third countries. In contrast, on the CIS level, the process of cooperation in the field of justice has virtually stopped. Having succeeded in endorsing a Model Civil Code in 1994, the CIS was unable to achieve a similar result in civil process. The obstacles faced by European States (within and beyond the EU) in seeking to intensify their cooperation in the field of justice are not only a challenge for them. They should also be seen as a chance for further joint developments. The fact that these obstacles exist almost simultaneously and are similar gives the EU and its neighbors the opportunity to find mutually acceptable solutions in the field of justice, minimizing or neutralizing the aforementioned locality factor. After several years of coordinated work of scholars from different nations, in July-August-September 2020 the European Law Institute in Vienna (ELI) and the International Institute for the Unification of Private Law

4 Paragraph 1 of Resolution No. 39 of the Council of the Inter-Parliamentary Assembly of the CIS Member States of 15.10.1999. 5 For an attempt to approximate CIS civil procedural legislation, see Branovitskiy, Approximation (harmonization) of civil procedural law within the European Union and in the post-Soviet space (in Russian) (2018), p. 188 et seq. 6 Paragraph 1 of Resolution No. 21-6 of the CIS Inter-Parliamentary Assembly of 16.06.2003; cf. Lapin, ‘Zur Konzeption eines Modellgesetzbuches für Zivilverfahren in den Ländern der Gemeinschaft Unabhängiger Staaten’, in: Boguslawskij and Trunk (eds), Reform des Zivil- und Wirtschafsprozessrechts in den Mitgliedstaaten der GUS (2004), p. 33 et seq. 7 Paragraph 30 of the Concept, approved by Resolution No. 21–6 of the CIS InterParliamentary Assembly of 16.06.2003.

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in Rome (UNIDROIT) approved Model European Rules of Civil Procedure8, an instrument of soft law containing uniform rules of civil procedure, which can be expected influence European legislation on civil procedure within the EU and beyond its borders in the years to come. The purpose of this article is to give an introduction into these Rules with particular attention paid to their relevance for non-EU countries in Eastern Europe.

B. Marcel Storme’s project as a precursor to codification of European Civil Procedure The legislative efforts undertaken by the EU and some of its Eastern European neighbors to intensify cooperation in the justice sector were not alone in this field. The question of Europeanization of civil procedure has been and remains a traditional subject of interest for scholars and practitioners all over Europe. Therefore, if legislatures lacked the will or capacity to harmonize the relevant field of law, work in this direction is often continued by representatives of science and practice. One of the first large-scale scientific projects in the field of harmonization of European civil procedure was started in the late 1980s. The initiator and main manager of this project was Professor Marcel Storme (University of Ghent, Belgium). Under his leadership, a Commission was set up to study ways and means of harmonizing civil procedure in Europe.9 At the beginning of its activities, the Commission planned to focus its activities on such topics as opening and closing of proceedings, on out-of-court solutions, time-limits, simplified payment procedures, security for claim (interim measures) and enforcement.10 Like any other project of this magnitude, Storme's idea encountered obstacles. One obstacle were ‘differences within the Commission itself’.11 Internal discussions resulted in the project being reduced in size. In particular, the published summary did not include the Commission's proposals

8 The text of the Rules is available at https://www.unidroit.org/english/government s/councildocuments/2020session/cd-99-b/cd-99-b-10-rev-e.pdf (last access at: 01.12.2020). 9 Storme, ‘Rechtsvereinheitlichung in Europa: Ein Plädoyer für ein einheitliches europäisches Prozeßrecht’ (1992) 56 RabelsZ, 298. 10 Storme, ‘Rechtsvereinheitlichung in Europa: Ein Plädoyer für ein einheitliches europäisches Prozeßrecht’ (1992) 56 RabelsZ, 298. 11 Brandt, Das englische Disclosure-Verfahren (2015), p. 329.

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for the harmonization of individual parts of the civil process, such as the organization of courts and jurisdiction.12 In addition, even the consensus proposals adopted by the Commission were met with ambiguity by the scientific community.13 Nevertheless, the importance of Storme's project for further harmonization of Europe's civil procedure was more than obvious.14 The project demonstrated the interest of European scientists to work on harmonization of the European civil procedure and confirmed, including through active discussions on this topic, the prospect of such a harmonization

C. The ALI/UNIDROIT Principles of Transnational Civil Procedure as an attempt to harmonize civil procedure in the transatlantic dimension In the late 1990s, the idea of harmonizing civil procedure took on a new, transatlantic dimension beyond the EU. A new project was initiated by professors Geoffrey C. Hazard jr. (USA) and Michele Taruffo (Italy), and became supported by two leading international-level scientific institutions in the field of systematization and unification of law, the American Law Institute (ALI) and the International Institute for the Unification of Private Law (UNIDROIT).15 The ALI/UNIDROIT Principles of Transnational Civil Procedure, which were approved by the two organizations in 200416, demonstrate several important parallels with, but also differences from Storme's project. Participants specializing in Continental Law (Civil Law) and Common Law were involved in both Storme's project and the ALI/UNIDROIT project. On the one hand, the joint work of such participants was one of the prerequisites for finding globally effective solutions to the harmonization of civil procedure of different legal systems.17 At the same time, the mentioned diversity of participants, as well as the lack of unity between

12 13 14 15

Storme (ed.), Rapprochement, p. 185 et seq. More on this in Hess, Europäisches Zivilprozessrecht, § 13, para. 6 et seq. Koch, ‘Einführung in das europäische Zivilprozessrecht’ (2003) JuS, 109. R. Stürner, ‘The Principles of Transnational Civil Procedure, An Introduction to Their Basic Conceptions’ (2005) 69 RabelsZ, 204 et seq. 16 The text of the principles and the accompanying not formally approved Rules is available at https://www.unidroit.org/instruments/transnational-civil-procedure (last access at: 01.12.2020). 17 Kofmel Ehrenzeller, Der vorläufige Rechtsschutz im internationalen Verhältnis: Grundlagen (2005), p. 541.

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them on key issues could, and in the case of Storme's project did so, become one of the reasons for the narrowing of the scope of the respective projects. In addition, the ALI/UNIDROIT Principles differs from Storme's project in conceptual and substantive terms. If Storme's project was basically a – though not-binding - set of unified rules, the ALI/UNIDROIT Principles can be described as fundamental principles, as well as unified rules on international civil procedure added to those fundamental principles.18 Also, unlike Storme's project, the ALI/UNIDROIT Principles have, for the first time and much more extensively, addressed a number of aspects of unified civil procedure. One example of this is Principle 30 of the ALI/UNIDROIT Principles dealing with recognition and enforcement of judgments. The understanding by the ALI/UNIDROIT project participants of the challenges they faced and their willingness to find balanced solutions were the key to the successful completion of the project.19 However, compared to the reaction to Storme's project, the feedback to the ALI/UNIDROIT Principles of Transnational Civil Procedure from the professional community was significantly more optimistic.20

D. The European Rules of Civil Procedure as an impulse and outline for future cooperation with third countries I. Beginning of the project and starting positions Sometimes it seems that there are no obstacles which force a person to step back, especially when such obstacles arise on the path to a long-matured and sought-after goal. Although Marcel Storme's project was not as successful as he had hoped, Storme himself and his colleague Geoffrey C. Hazard jr. were destined to see how their initiatives would be continued by their followers. After all, Storme's project laid the foundations for discussions on the relevance and prospect of harmonization of the civil procedure in Europe, and consequently for further work in this direction. The success of

18 Pfeiffer ‘Transnationale Synthese: ALI/UNIDROIT-Principles of Civil Procedure und rechtsvergleichende Lehren’ in Althammer and Weller (eds), Mindeststandards im europäischen Zivilprozessrecht, 117. 19 Bettinger, Prozessmodelle im Zivilverfahrensrecht (2016), p. 155. 20 Schweizer, Beweiswürdigung und Beweismaß, p. 595.

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the ALI/UNIDROIT project21 in the transatlantic dimension, as well as the prospect of further work on the harmonization of civil procedure, contributed to an intensification of discussions on a harmonized civil process. The logical continuation of these discussions was the launch of a new project in this area, this time – again within Europe. It is symbolic that UNIDROIT became a co-organizer of the new project, thus giving the participants of the new project the opportunity to take into account the positive experience of the previous ALI/UNIDROIT project. 22 The European Law Institute (ELI) became a partner of UNIDROIT in the implementation of the new project. Already during the first workshop, the parties declared their intention to begin work on European Rules of Civil Procedure.. To this end, the project participants declared a transition from Transnational Principles to European Rules of Civil Procedure. Given the success of the previous project, as well as the direct experience of participating in it from the side of UNIDROIT, the starting point for the new ELI/UNIDROIT project were, among others, the ALI/UNIDROIT-Principles of Transnational Civil Procedure23 Provisions of other (legal) sources, both binding and non-binding, were also taken into account, in particular, the Storme Commission’s text, law and legislation of the EU and the Council of Europe. At the same time, the methodological basis of the project was changed. The developers tried to distance themselves from the attempt of a "Restatement" of European civil procedure law. Instead, they preferred to prepare rules in the sense of best practice. At the same time, the European Rules of Civil Procedure (to a greater extent than the Storme project) are focused on those areas of civil proceedings, which show a significant potential from the perspective of harmonization.

21 However, the literature also highlighted the chance of this project to be a breakthrough in the harmonization of the civil process, see. e.g., Branovitskiy, Approximation (harmonization) of civil procedural law within the European Union and in the post-Soviet space (2018), p. 57. 22 At the same time, ALI supported this project both initially and as an observer during the further implementation of the project. See https://www.unidroit.org/abou t-unidroit/work-programme?id=1625#a1 (last access at: 01.12.2020); see also Item 16 Report of 27–28.11.2014, UNIDROIT/ELI 2014 Study LXXVIA - Doc. 5. 23 See Report of 27–28.11.2014, UNIDROIT/ELI 2014, Study LXXVIA, page 1, PPT WORKING GROUP ON ACCESS TO INFORMATION AND EVIDENCE, UNIDROIT/ELI 2014, Study LXXVIA – Doc. 2 Add, page 4; in the literature see Izarova, Theoretical Foundations, p. 51, Uzelac, ‘Towards European Rules of Civil Procedure: Rethinking of Procedural Obligations’ (2018) 1 (106) Bulletin of the Taras Shevchenko National University of Kyiv, p. 24.

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During the drafting process, the text of the European Rules of Civil Procedure was confidential and not freely available, as long as the final version of the Rules at that time was still under discussion. However, thanks to interim reports published by UNIDROIT or scientific articles of individual participants of the project, it was possible to draw some conclusions about the preliminary content of the Rules. The structure of the project was also partly revealed by the European Parliament, which had the status of an observer in the project.24 At the same time, discussions at scientific events between project participants provided an opportunity to assess the challenges which the project faced.25 One of these was the challenge the same that was already faced by Marcel Storme and the ALI/UNIDROIT project, i.e. the need to find balanced solutions in the harmonization of different legal systems.26 Judging by reports of participants involved in the ELI/ UNIDROIT project, as well as taking into account the progress in the development of ELI/UNIDROIT Rules, the project turned-out to able to reach a consensus on the discussed aspects. This probably become possible partly due to changes in the external and internal circumstances of the work of the developers of the ELI/UNIDROIT Rules. The general approaches and visions of the further development of civil procedure in 21st century Europe differ significantly from the vision of the future of this branch of law in Europe in the 1990s. The processes of harmonization of the legislation of the EU Member States have resulted not only in the convergence of the legal systems of the member States, but also in the mentality, paradigm shift at national levels. In addition, the active involvement of representatives of science and law, the participation of European and international institutions and organizations made it possible to take into account the specifics of the legal traditions of individual EU Member States.

II. Structure of the European Rules of Civil Procedure These favorable internal and external factors are also reflected in the contents of the Rules. The ELI/UNIDROIT project “From Transnational Principles to European Rules of Civil Procedure” began with work on three

24 Mańko, Die Europäisierung des Zivilverfahrens, p. 30 et seq. 25 See e.g. items 10 Report of 27–28.11.2014, UNIDROIT/ELI 2014 Study LXXVIA– Doc. 5. 26 See speech of Kramer, Xandra at Bi-Annual Conference of the Wissenschaftliche Vereinigung für Internationales Verfahrensrecht e.V., 13–16.03.2019, Hamburg (Germany).

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parts of the civil process: “Access to Information and Evidence”, “Interim and Protective Measures”, as well as “Service of Documents”. Relevant parts of the Rules (Part VI, Part VII and Part X) were later devoted on these topics. In addition, “lis pendens” and “res judicata”, as well as “obligations of the parties and lawyers” subsequently became the subject of analysis. The above-mentioned topics “lis pendens” and “res judicata” were supplemented by separate provisions on judgment and combined in Part 8 of the Rules, and the provisions on parties and their responsibilities were enshrined in the relevant thematic parts of the Rules (in particular, Parts I–III, IV and other parts). The question of the expediency of developing the topic of “enforcement of court decisions” (“enforcement”) was a subject of debate. Initially, it was proposed to include this topic in the list of topics to be reviewed. However, this proposal was later rejected because the topic was too large and required the creation of a significant number of working groups. In the end, the developers, in contrast to the Storme project and the ALI/ UNIDROIT Principles, decided not to work on this topic.27 At the initial stage, it was planned to exclude two topics from the discussion: “funds” and “collective actions”.28 However, eventually this position was changed. The result was the creation of appropriate working groups, which prepared the relevant thematic parts of the Rules (Part XI and Part XII). In addition, working groups on “Judgment” and “Appeals” initiated and subsequently presented the results of their work.29 Finally, the developers laid-down in the Rules certain principles (maxims) of civil procedure and described more in detail the procedures for the beginning of the process (“commencement of proceedings”) and the final hearing (“proceedings preparatory to a final hearing”).

27 See items 11 and 12 UNIDROIT/ELI Report of 12–13.05.2014, Study LXXVIAUNIDROIT 2014. 28 See items 4 and 5 UNIDROIT/ELI Draft Agenda of 21–22.04.2016, Study LXXVIA-SC IV–Doc. 1, UNIDROIT Report of 05.–07.04.2017. 29 Аgenda ELI-UNIDROIT Joint Steering Committee meeting with Co-reporters, Members of the Working Groups, Advisers and Observers, 16–17 November 2017, p. 2.

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III. The relationship between the European Rules of Civil Procedure and the Brussels Ia Regulation As the areas of regulation of the ELI/UNIDROIT Rules and the Brussels I bis Regulation are related to each other in some respects, there is interest in a more detailed analysis of the relevant provisions. First of all, it is interesting to study the tools offered by ELI/UNIDROIT and the Brussels Ia Regulation to address certain issues, especially questions related to third countries. The position of the ALI/UNIDROIT Principles must also be taken into account, being of interest primarily due to its transatlantic dimension.

1. Material scope First of all, the question of the material scope of the European Rules of Civil Procedure is interesting. Attempts to resolve this issue were made in the early stages of the project. The briefly stated position of ELI/ UNIDROIT on this issue was first mentioned in the Report of 12.05.2014.30 There, the Steering Committee decided that the scope of the ELI/UNIDROIT rules should extend not only to commercial but generally to all disputes (Item 4 (b) 8). This provision was maintained in the final text of the ELI/UNIDROIT Rules. In particular, part 1 of rule 1 establishes that these Rules apply to the resolution of disputes in civil and commercial matters. Unlike the ELI/UNIDROIT Rules, the ALI/UNIDROIT Principles only apply to commercial disputes. Thus, the scope of ELI/UNIDROIT Rules is broader than that of the ALI/UNIDROIT Principles. At the same time, it should be noted that the authors of the ALI/UNIDROIT Principles have stated also that these principles might be equally appropriate for the resolution of most other kinds of civil disputes (“Scope and Implementation”). The ELI/UNIDROIT Rules define their scope of application by using the term “civil and commercial matters” within the meaning of the Brussels Ia Regulation and without taking the category of the court into account. Thus, the subject scope of the Rules and the Brussels Ia Regulation are substantially similar. At the same time, the drafters of the Rules refused to clearly distinguish civil and commercial matters from public law dis-

30 Report of 27–28.11.2014, UNIDROIT/ELI 2014 Study LXXVIAUNIDROIT 2014 Original : English SC I-Doc. 2.

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putes, followed by a selective list of cases in this category to which the Rules do not apply. Due to the withdrawal of the United Kingdom from the EU, the expediency of such a distinction, which was previously controversial31, is likely to decrease significantly. Similar to the corresponding list in Article 1 of the Brussels Ia Regulation, the Rules give only the list of cases in Rule 1 para. 2 to which these Rules do not apply. At the same time, Rule 1 para. 3 clearly states that these Rules may also apply where incidental issues arise, which fall within Rule 1 para. 2, if the principal matter in dispute is within the scope of Rule 1 para. 1. Thus, like the Brussels Ia Regulation32, the Rules provide both to the principal matter in dispute and to incidental questions.

2. Addresses of the Rules An import question is to whom the ELI/UNIDROIT Rules are addressed. This is of course linked with the question of the “objective” purpose of this instrument of soft law . The starting point according to the Report of 12.05.2014 was the thesis that the ELI/UNIDROIT Rules should be intended primarily for national courts (the target should first and foremost be national courts), while the ALI/UNIDROIT Principles may apply also to international commercial arbitration. At the same time, the developers of the ELI/UNIDROIT Rules, according to their Report of 12.05.2014, did not rule out application of these Rules in arbitration (although whether or not a solution worked for arbitration should be considered). If the relevant provision had been adopted, the scope of the Rules would have been extended further than the scope of the Brussels Ia Regulation. However, in the final version of the Rules, this opinion was abandoned and ccording to Rule 1 (2 d) the Rules are not meant to apply to arbitration. Thus, the list of addressees of the ELI/UNIDROIT Rules was narrowed-down in comparison to what had originally been planned. As a result, the ELI/UNIDROIT Rules also conceptually follow the Brussels Ia Regulation in this respect,

31 Hess, Europäisches Zivilprozessrecht, § 6, para. 5, Mankowski in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/EuIPR Vol. 1 (2016), Art. 1 Brüssel Ia-VO, para. 18. 32 Antomo in: BeckOK ZPO (2020), Brüssel Ia-VO Art. 1 para. 59.

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despite repeated calls to regulate this area or at least to clarify the relevant provision of the Brussels Ib Regulation.33

3. Territorial scope and applicability to cases with an international element Another important question is the intended territorial scope of the ELI/ UNIDROIT Rules and their application to proceedings with an international dimension. The Rules do not limit their intended application to specific groups of countries, e.g. EU countries. The second aspect, applicability only to domestic cases or also to cross-border cases, was discussed among the developers of the Rules from the beginning of their work. Attention to this issue was paid already in the ELI/UNIDROIT Report of 12.05.2014. It was envisaged that the ELI/UNIDROIT Rules should apply both to both cross-border and domestic disputes. This idea was preserved in the final text of the Rules (Rule 1 para. 1). In this context, ELI/UNIDROIT Rules governing jurisdiction and recognition of foreign judgments (including the context of relations with third countries) would be of great interest. However, as can be seen from the ELI/UNIDROIT reports, these topics were from the beginning not on the agenda of the expert groups. However, this fact at that time did not indicate a final refusal to develop this topic. Firstly, the work of the Commission shows that there were cases when certain topics were not discussed in the beginning, but were included later in the list of working topics (such as the topic of “сosts”). Also, as the ALI/UNIDROIT Principles, which were used by the drafter of the European Rules as a starting-point for their work, contain some provisions (§§ 2, 30 and 31) on issues of jurisdiction as well as on recognition and enforcement of foreign court decisions. However, in the end, the developers of the ELI/UNIDROIT Rules did not adopt this approach and abandoned the possibility of comprehensively regulating matters of international jurisdiction as well as recognition and enforcement of foreign court decisions. The mechanisms provided for in the Brussels Ia Regulation were considered as generally sufficient at this stage. However, some provisions of the ELI/UNIDROIT Rules nevertheless do affect in one way or another affect the scope of the Brussels Ia Regulation.

33 Gottwald in: MüKo-ZPO, Vol. 3 (2017), Brüssel Ia VO, Art. 1 para. 25, Mankowski in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/ EuIPR Vol. 1 (2016), Art. 1 Brüssel Ia-VO, para. 103.

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In most of these cases, the drafters of the Rules in principle follow the position that the provisions of the Brussels I bis Regulation should apply. The ELI/UNIDROIT Rules use for this purpose several tools. First of all, in some cases the Rules define certain preconditions only in general (e.g. subject matter and territorial jurisdiction) and provide for the possibility of a meaningful content of these preconditions in accordance with the Brussels Ia Regulation.34 The Rules also provide for provisions that are directly grounded or comparable to provisions of the Brussels Ia Regulation.35 In addition, in some cases the European Rules are in fact closely related to issues of (defendants from) third countries, but taking into account the principle of non-interference in the scope of the Brussels Ia Regulation they do not provide special rules of jurisdiction for such cases.36 Finally, the Rules reject those types of jurisdiction which are not provided for in the Brussels I bis Regulation. For example, the institution of voluntary joinder of parties does not provide for special rules on jurisdiction in this category of cases.37 However, in some exceptional cases do the Rules lay down provisions that deviating from the relevant provisions of the Brussels Ia Regulation. Such cases are, in particular, the following: a) Principal Intervention: Rule 39 ELI/UNIDROIT provides that anyone not a party to proceedings who claims a right in its subject matter, may bring a claim directly against one or more of the parties in the court, in which the dispute is pending at first instance or, if the Court so permits, on appeal. A similar provision on third-party proceedings is also contained in Article 8 nr.2 of the Brussels Ia Regulation. However, different language versions of this act gave rise to disputes over the status of a third party in such proceedings.38 Rule 39 responds to this dispute, taking into account, inter alia, the CJEU's view that a third party may be not only the defendant but also the plaintiff in respect of one of the parties to the case.39

34 35 36 37 38

E.g. Rule 133 (1 b). E.g. Rules 142 (1, 3), 143–145, 202. E.g. Rule 42. See Rule 36 (1 b). Stadler and Klöpfer, ‘EuGH-Rechtsprechung zur EuGVVO aus den Jahren 2015 und 2016’ (2017) ZEuP, para. 920. 39 Geimer in: Geimer and Schütze (eds), Europäisches Zivilverfahrensrecht (2020), EuGVVO Art. 8, para. 73; Dörner in: Saenger, Zivilprozessordnung (2019), EuGVVO Art. 8, para. 7; Stadler in: Musielak and Voit, ZPO, EuGVVO nF Art. 8 para. 6.

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b) Consolidation of Proceedings: Rules 142–146, in comparison with the Brussels Ia Regulation, regulate details on certain aspects of pendency and its legal consequences. In particular, in contrast to Art. 29 Brussels Ia Regulation, the ELI/UNIDROIT Rules regulate the legal status of the court first seized in more detail. In particular, Rule 142 para. 3 confers on the court first seized the power to consolidate parallel processes, and Rule 146 regulates the details of such consolidation proceedings. At the same time, the Rules retain the general direction of the legal consequences of pendency and consolidation of proceedings. Like the Brussels Ia Regulation, the ELI/UNIDROIT Rules provide for the stay of its proceedings by the second court involved until jurisdiction over the case is clarified and this court subsequently rejects the jurisdiction in this claim (the other court shall decline jurisdiction in favor of that court). c) Exceptions from the Priority Principle: Rule 143 enshrines provisions that provide for exceptions to the priority principle provided for in Rule 142 para. 1. One such exception is, first of all, the exclusive jurisdiction of the court second seized. Rule 143 para. 1 reflected the CJEU's position on the previously contentious issue of the powers of the second court in the event of exclusive jurisdiction over the case.40 The Rule stipulates that in such cases the first court must relinquish its jurisdiction in favor of that second court (the court first seized must decline jurisdiction in favor of that court). At the same time, as in the case of Article 31 para. 2 of the Brussels Ia Regulation,41 risks with so-called «torpedo actions» continue to be contained within the Rule 143 para. 3 of the ELI/UNIDROIT Rules. d) International jurisdiction: Rule 202 para. 3 contains provisions detailing the special jurisdiction over provisional, including protective, measures under Article 35 of the Brussels Ia Regulation. In particular, Rule 202 para. 3 expressly provides that one of the preconditions for such a presence is a real link between the subject-matter of the action to secure the claim and the location of the court to which the relevant application has been made. Thus, Rule 202 para. 3 embodies the relevant position of the CJEU42, despite the fact that the EU Commission in 2009

40 Leible in: Rauscher (ed), Europäisches Zivilprozess- und Kollisionsrecht: EuZPR/ EuIPR Vol. 1 (2016), Art. 29 Brüssel Ia-VO, para. 28; Stadler in: Musielak and Voit, ZPO, EuGVVO nF Art. 29 para. 8. 41 Gottwald in: MüKo-ZPO, Vol. 3 (2017), Brüssel Ia VO, Art. 37 para. 16. 42 CJEU Case C-391/95, 17.11.1998, Van Uden Maritime BV/Kommanditgesellschaft in Firma Deco-Line u.a., ECLI:EU:C:1998:543, para. 40.

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proposed to abandon this premise,43 and literature has repeatedly drawn attention to the lack of clarity of the wording of the CJEU on the real connecting link44. That is why the Rules specify this precondition, linking it to the need to protect local interests, as well as the need for local support of the main proceedings brought in another country.

IV. Quo Vadis – ELI/UNIDROIT Rules of Civil Procedure? Contrary to the ELI/UNIDROIT Rules and the ALI/UNIDROIT Principles, the rules of the Brussels Ia Regulation are imperative and the same is true, in principle, for national civil procedure legislation. In contrast, in order to be able to apply soft law such as the ELI/UNIDROIT Principles, national courts need the legal freedom to do so. It is possible that in the organization of the civil process, e.g., with regard to matters of delivery of documents or matters of proof, courts have such freedom. However, the Brussels Ia Regulation, as it stands today, does not offer discretion e.g. as to the recognition and enforcement of judgments. Given these circumstances, application by national courts either of the ALI/UNIDROIT Principles or of the ELI/UNIDROIT Rules seems rather problematic. These rules can of course be valuable for legislators, e.g. if the European legislator took them into account for reforms of European law, for example through reforms of the Brussels Ia Regulation. The Storme project, the ALI/UNIDROIT Principles, the ELI/UNIDROIT Rules as well as similar projects in other regions of the world show that harmonization of civil procedure is and remains on the agenda of European scholars. The results of discussions on this topic have already yielded a positive interim result, and in the future, most importantly, this result may be even more tangible. Thus, almost thirty years after the start of Marcel Storme's project, harmonization of civil procedure law in Europe is gaining momentum. The ELI/UNIDROIT project is now completed. Like other successful projects, the ELI/UNIDROIT Rules have made significant progress in many areas, while demonstrating the viability of further developments in others. In particular, the issue of finding comprehensive solutions in the context of third countries is still open. As, after all, is the future of the ELI/ UNIDROIT Rules in general. Will these rules remain on paper or will they

43 COM/2009/0175 final, p. 8. 44 See. e.g. Keller in: BeckOK ZPO (2020), Brüssel Ia-VO Art. 35 para. 9.

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actually contribute to the goals for which they were designed? In particular, will these rules be taken as the basis for reforms of national civil procedure laws? Not only individual EU Member States need such reforms. Judicial reform is especially acute in those countries in Europe, which border the EU but are not EU-members. First of all, it is worth thinking about those countries with which the EU either has concluded Association Agreements (Georgia, Moldova, Ukraine)45, or has updated or plans to update existing older Partnership and Cooperation Agreements (Azerbaijan46, Armenia47, Russia48, others). And it cannot be overlooked that although the ELI/UNIDROIT Rules are thematically based a transition perspective (“From the Transnational Principles to the European Rules of Civil Procedure”), they were drafted almost exclusively by scientists from the EU. This may explain in a very visible recurrence of rules established by the ALI/UNIDROIT Principles and Rules in the context of the new European Rules. This may explain why e.g. some post-Soviet states, although they showed an interest in the ALI/UNIDROIT Principles and/or Rules as a possible guideline in their own procedural reforms,49 finally did not follow this path50. In the end, the reformed Codes of Civil Procedure of some of the above-mentioned States, including Ukraine, were adopted without taking into account the ALI/UNIDROIT Principles. As a result, the opportunity offered by these principles of at least a minimal approximation between civil procedure law of EU Member States and their neighbors was lost,51 although the need for such a convergence and therefore overcoming of the locality factor are obvious.52 Moreover, requests or proposals for harmonization of the civil process on the basis of the ELI/UNIDROIT Rules can be made not only by Associate Partners of the EU, but by other countries as well.

45 46 47 48 49

See fn. 3. Council of the EU, Press release of 14.11.2016. OJEC, L 23 of 26.1.2018, pp. 4–466. OJEC, Nr. L 327 of 28/11/1997, PP. 0003–0069. Gottschalk, ‘Buchbesprechung: F. Ferrand: La Procédure’ (2006) 4 ZEuP, para. 951. 50 Drawing a parallel to substantive law, it is only in few decisions that national courts in Eastern Europe have made references to the Principles of UNIDROIT, see e.g. Supreme Court of Ukraine, Case No. 542/1405/15-c, Proceedings no. No. 61-14996sv18, 11.07.2018, Person_1 v Sokil Ltd., available at http://www.reyestr.co urt.gov.ua/Review/ 75528601 (last access at: 01.12.2020). 51 Ferrand, ‘Der ALI-UNIDROIT-Entwurf über Transnationale Prinzipien und Regeln im Zivilverfahrensrecht’ (2004) 3 ZEuP, para. 619. 52 Basedow, ‘EU-Nachbarschaftspolitik’ (2017) 10 EuZW, para. 362.

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The starting-point for this study was the well-known fact that the EU’s regulations on cross-border civil procedure deal with external (non-EU) relations only in a selective, incomplete manner. In particular, there is no uniform approach of EU law towards mutual recognition and enforcement of judicial decisions in relations with third countries. The jurisdictional regimes to which such relations are subjected are also endowed with a dual variability, depending both on the Member State and the third country involved. Beyond this, there are numerous other situations of third-country contacts, which are not or not consistently dealt with by EU law. The contributions to this book, often taking a functional approach, have sought to identify the problem areas and best practices with a view to outlining the main aspects of possible legal reform in the different fields of cross-border civil procedure, which might be undertaken by the EU if a more consequent and effective regulation of external relations in this field were included into the EU’s work program. The contributions display a relative diversity of opinion – reflecting both the authors’ provenance and personal opinions – as to the optimal way for regulating EU-third country civil litigation, but common themes nonetheless emerge. In order to bring together the findings of the different contributions to this study and develop some overall conclusions, we will, first, summarize the proposals developed by the contributors to this book (infra A.) and then move on to more general conclusions. We will begin with some general observations (infra B.–D.), continue with a few ideas relating to specific aspects of cross-border procedure (infra E.) and conclude with some remarks on legislative policy (infra F.– H.). The purpose of this book was not to develop very concrete proposals e.g. on jurisdictional rules or specific prerequisites of mutual recognition of judgments in relations with one or the other category of third States, but to help developing a general framework for future legislation in this field. As the new European Rules of Civil Procedure do not deal with this topic in a systematic manner, the legislative (and intellectual) task to develop fair and efficient approaches for cross-border procedural relations with third States still remains to be solved. The conclusions – as well as the study generally – are limited to

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proceedings in civil and commercial matters. We have not included family and succession matters, even though they have been considered by some contributors and many of our conclusions could in principle find application therein. Cross-border insolvency has also not been examined, and the same holds true with regard to civil execution, arbitration and ADR.

A. Summarizing the proposals of the contributors to this study In their contributions to this volume the authors have developed several proposals for future action in the field of EU-third country judicial cooperation. These proposals will hereinafter be briefly summarized. For a closer analysis the respective contributions should be consulted. Focusing on judicial cooperation between the EU and the three “Association Agreement” partner countries of Georgia, Moldova and Ukraine, Basedow1 pleads for a special regime of judicial cooperation beyond the mere reference made in the Association treaties to the Hague Conference on Private International Law. Such a cooperation could be modeled along the lines of the Lugano Convention. Drawing on the Greek experience gained from bilateral judicial assistance treaties with third countries, Moustaira2 gives a positive evaluation of such treaties, adding that they should be applied in a general system of favor cooperationis. This would include, in particular, mutual cooperation on the basic of domestic law if domestic law is more cooperation-friendly than e.g. the bilateral treaty. In the general contribution on direct jurisdiction, Trunk3 develops a system of legislative measures, ranging from amendments to existing EU Regulations to mutually agreed steps in the EU and third countries on the basis of soft law such as the (planned) European Rules of Civil Procedure. Taking the Brussels Ia Regulation as an example, Trunk proposes to reflect on adding habitual residence to (traditional) domicile as a connecting factor for general jurisdiction, and proposes to develop some EU rules on (general) jurisdiction in cases against defendants domiciled in third countries, which might exclude some – even if not all – domestic rules of EU Member States. The contribution further suggests to apply the Regulation’s rules on specific jurisdiction also to defendants domiciled in (at

1 Supra pp. 15 et seq. 2 Supra pp. 29 et seq. 3 Supra pp. 37 et seq.

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least some) third countries, rebalance the Regulation’s rules on protective jurisdiction (in particular consumer disputes) when defendants are domiciled in specific third countries, limit some categories of exclusive jurisdiction in case of specific links with (some) third countries on an agreed basis and proposes also some limited amendments to the provisions on choice of court agreements with a view to “mutual recognition” of such agreements in specific third countries. Looking at the issue of “residual jurisdiction” (against defendants domiciled in a third country), in particular in human rights litigation, Stürner and Pförtner4 argue for an extension of the sphere of application of the Brussels I Regulation to defendants domiciled in third countries. This should include the creation of a carefully worded forum necessitatis, which should not renounce the requirement of a substantive geographical link to the forum State. The contribution of Miglio5 gives a very careful analysis on the new provisions relating to jurisdiction of the (planned) Unified Patent Court (UPC) into the system of the Brussels Ia Regulation6 as a possible model for future amendments of the Regulation with regard to disputes against defendants domiciled in third countries. Essentially, the new provisions extend the Regulation’s rules on specific jurisdiction (forum delicti etc.) to defendants domiciled in third countries and provide for an additional specific head of jurisdiction in such cases (situs of property). The author notes that the new provisions may have an important impact on future amendments to the Brussels Ia Regulation with regard to disputes involving third country based defendants, but refrains from concrete recommendations as the example of the UPC-related amendments shows also the dangers of fragmentation of EU civil procedure law in relation to different “third” States. Tichý7 addresses the issue of litispendence (including related proceedings) under the Brussels Ia Regulation. As the recast Regulation has introduced express provisions dealing with litispendence in third countries (Art. 33 and 34 of the Regulation), Tichý develops his proposals in the framework of a general analysis of Articles 29–34 of the Regulation. He pleads for the creation of bilateral regimes on litispendence with third countries and recommends several amendments to Articles 29–34 of the

4 Supra pp. 53 et seq. 5 Supra pp. 71 et seq. 6 Art. 71a and 71b Brussels Ia Regulation. See also Art. 71c and 71d of the Regulation (on litispendence and recognition/enforcement). 7 Supra pp. 95 et seq.

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Regulation. In particular, Art. 33 should be amended (or clarified) to address also cases of exclusive jurisdiction of third countries. Another proposal is the creation of a public register of proceedings for litispendence purposes. The general contribution on recognition and enforcement by Martiny8, firstly, analyses the different methodological approaches as to recognition and enforcement of third county judgments in the EU. Martiny recommends a multilateral solution, e.g. the EU ratifying the Hague Judgments Convention 2019, subsidiarily the EU should amend the Brussels Ia Regulation (or create a separate instrument) to provide for uniform provisions on recognition and enforcement of third country judgments. For practical reasons (cumbersome negotiations etc.), Martiny is skeptical as to bilateral agreements with third countries on the EU level but regards autonomous approximation of standards (“common principles”) as a possible approach. Martiny also discusses in detail various proposals for possible uniform EU rules on recognition and enforcement of third country judgments. Such rules should, in any case, provide for a scrutiny of indirect jurisdiction (with different alternatives), observance of lis pendens and basic procedural guarantees as well as public policy. In addition, the procedure of recognition and exequatur would have to determined, as well as the effects of a recognized judgment. The contribution by Tsikrikas9 focuses on the effects of recognition of foreign judgments between the EU and third countries. Tsikrikas pleads for a convergence between the judicial systems in the EU and third countries as a precondition for mutual recognition of judgments and recommends the use of the ALI/Unidroit Principles of Transnational Civil Procedure as well as the (future) ELI/Unidroit European Rules of Civil Procedure in this context. De lege lata, Tsikrikas holds that recognition of third country judgements in the EU is governed by national standards. The common EU standards in this respect, in particular the CJEU’s “core issue doctrine” as well as the Gothaer jurisprudence of the Court are not applicable to third country judgments. Tsikrikas also pays particular attention to the recognition and enforcement of provisional measures. Several contributions are devoted to the perspective of specific third States on procedural cooperation with the EU. The first among them, by Fentiman10, deals with the effects of the Brexit upon future relations be-

8 Supra pp. 127 et seq. 9 Supra pp. 147 et seq. 10 Supra pp. 157 et seq.

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tween the EU and the UK as to cross-border commercial disputes. Being skeptical about the prospects of a bilateral agreement between the EU and the UK on cross-border civil procedure, Fentiman discusses as most realistic the perspectives of the UK applying traditional domestic rules and, in addition, ratifying the 2005 Hague Choice of Forum Convention. Further alternatives are, perhaps, a ratification of the 2019 Hague Judgments Convention and, requiring specific negotiations, of the 2007 Lugano Convention. Fentiman doubts that older bilateral treaties between the UK and individual EU Member States might be regarded as regaining applicability after the Brexit. From a policy perspective, Fentiman’s remarks on the effects of Brexit upon the UK’s position as a leading place for international commercial litigation deserves attention. Though the Brexit will not strengthen the role of London in this respect, Fentiman does not expect any serious negative consequences for the UK litigation market. Yarkov11 approaches the issue of mutual recognition and enforcement of judgments from the perspective of a third country – Russia. While remarking that the present political tensions between the EU and Russia make the conclusion of a bilateral agreement on judicial cooperation between the two sides very improbable, he underlines the interest of Russia in improving judicial cooperation with the EU. He mentions several multilateral treaties, which might be used for this purpose, e.g. the Hague Choice of Court Convention 2005 and the Hague Judgments Convention 2019. In addition, Yarkov delineates the structure of a possible EU-Russian Treaty on Jurisdiction and Mutual Recognition and Enforcement of Judgments, which is conceived as a convention double and should include (beyond typical civil and commercial cases), e.g. alimony, consumer, labor and insolvency matters. Particular mention is made, among others, of different heads of jurisdiction, of grounds for the refusal of recognition and enforcement, of procedural requirements for recognition and enforcement and of the effects of recognition. In the study, countries with which the EU has concluded Association Agreements with a significant political and economic integration dimension (most important examples: Georgia, Moldova, Ukraine), are often mentioned as particular candidates for enhanced judicial cooperation with the EU12. Izarova13 analyses judicial cooperation with the EU from the viewpoint of Ukraine. As the Association Agreement of 2014 does not con-

11 Supra pp. 181 et seq. 12 Cf. Jürgen Basedow, supra p. 15 et seq. 13 Supra pp. 191 et seq.

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tain any particular provisions on judicial cooperation in civil and commercial matters, concrete further steps would have to be agreed between both sides in the ongoing association process. Izarova describes in detail which steps Ukraine has undertaken and continues to do in order to give the agreed “Free and Comprehensive Trade Area“ with the EU a judicial component. Apart from a cooperation-friendly regulation of cross-border civil procedure in domestic law and constant work in the field of judicial reform Ukraine has been one of the first signatories of the Hague Judgments Convention 2019. Izarova speaks out in favor of a step by step approach, which could include bilateral agreements with the EU on certain aspects of judicial cooperation (including, e.g. topics covered by the EU Regulations on special proceedings: small claims, undisputed claims etc.). Particular reference is made to the current ELI/Unidroit project on (Model) European Rules of Civil Procedure, which is not limited to the EU, but involves also Member States of the Council of Europe. A contrasting example, Colombia, is described from an outside observer’s perspective by Stöber14. Colombia, similar to most Latin American countries, takes traditionally a rather restrictive position towards international judicial cooperation, but this approach might change in the future due to economic improvements in recent times15. Turning to judicial assistance, Boscheinen-Duursma16 reflects on the EU’s Service and Evidence Regulations in relations with third countries. Starting from the departure that the EU has an exclusive competence to conclude treaties with third countries in the field of judicial assistance, Boscheinen-Duursma proposes that the EU should empower Member States to conclude agreements with third countries on judicial assistance, if the EU itself does not see at present a political priority for itself to act in this field. Such agreements could be conceived for a limited duration. Another approach, which would be not binding on an international level, but could also be effective, would be parallel legislation in EU Member States and third countries to integrate provisions of the EU Service and Evidence Regulations into domestic legislation, taking into account that some provisions of the Regulations are based on an elevated level of trust between EU

14 Supra pp. 213 et seq. 15 This statement does not yet take into account the most recent impact of the Corona pandemic. However, it is worth mentioning that Colombia (and Peru) have concluded with the EU in 2012 a Free Trade Agreement (not yet in force, but provisionally applicable), see https://www.consilium.europa.eu/en/documents-public ations/treaties-agreements/agreement/?id=2011057 (last access at: 01.12.2020). 16 Supra pp. 221 et seq.

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Member States, which cannot be unilaterally extended to third countries without modifications. A relatively recent component of EU civil procedure law are Regulations on special proceedings in civil and commercial matters, i.e. presently the Regulation on the European Enforcement Order (EEO) of 2004, the Regulation on the European Order for Payment procedure (EOP) of 2006 and the Regulation on European Small Claims Procedure (ESCP) of 2007. These Regulations serve the special purpose to improve cross-border judicial cooperation in matters of small value, simple or mass character or little dispute, as otherwise such claims would probably not receive any crossborder enforcement. Judicial cooperation with third countries should not neglect these Regulations. All three above-mentioned Regulations are looked at in an overview by Trunk17 as to their potential to be applied to relations with third countries. As these Regulations have at present only very limited practical relevance, they will probably not be in the center of legal action in the near future. From a more theoretical perspective or in some “pilot scheme” they deserve, however, a closer look. As the main focus of these Regulations is presently on simplified mutual recognition and enforcement, which presupposes a high degree of trust between the participating countries, they cannot easily be extended to third countries, but only with additional tools of control against abuses. Aliyev18 addresses specifically the EOP Regulation. After giving a careful analysis of the complicated structure and limitations of the EOP Regulation with regard to cases involving third countries, Aliyev explores various issues, which would arise if the EOP Regulation were to be extended to third countries – either by bilateral agreement between the EU and a third country or in a multilateral context (e.g. in the organizational framework of the Hague Conference on Private International Law). One such aspect concerns, e.g. the question of (direct) jurisdiction for such orders, another the intended (but not unlimited) easiness of cross-border enforcement. Finally, the contribution of Panych19 is devoted to the (recently completed) Model European Rules of Civil Procedure, which have been prepared under the auspices of the European Law Institute and Unidroit. The author looks at these Rules mainly under the perspective which relevance

17 Supra pp. 229 et seq. 18 Supra pp. 235 et seq. 19 Supra pp. 255 et seq.

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they may have for non-EU States in the EU’s neighbourhood, e.g. as a stimulus for procedural reform in such countries. Comparing the ELI/Unidroit Principles in particular with the ALI/Unidroit Principles of Transnational Civil Procedure of 2004, Panych shows that the ALI/Unidroit Principles deal with matters of cross-border judicial cooperation more openly and consistently than the ELI/Unidroit Rules, the drafters of which left such questions in principle (but with some noteworthy exceptions e.g. as to provisional remedies) to future reforms of EU Regulations.

B. Which interests: EU – third countries Solution of conflicts or problems (also on the level of legislation) always requires an analysis of the interests involved. With regard to legal relations between the EU and third countries this means that both the interests of the EU and its Member States and the interests of non-EU partner countries must be taken into account. The EU, on the one side, has an interest in a very smooth, efficient “internal market” of civil procedure, with “equal” distribution of international jurisdiction within all EU territory, as few as possible impediments to mutual recognition and enforcement of judgments and common EU legislation on specific procedures. This system is based on the principle of mutual trust and is generally recognized to work without significant problems. As the same degree of trust does not necessarily exist in relation to all non-EU countries (though it may exist in some cases), the EU and its Member States will clearly not be inclined to extend their own “liberal” rules of judicial cooperation to (whatever) non-EU countries, even if such countries were ready to accept such an approach. However, there are situations in which mutual trust and general cooperation are so highly developed that the EU may be ready to agree upon a similarly liberal regime of judicial cooperation with third countries. On the other side, some non-EU countries may have a similar interest in application of a very liberal and trust-based regime of judicial cooperation with the EU. The best-known example of this approach is the Lugano Convention between the EU, Iceland, Norway and Switzerland (“EFTA”-countries). Another, though specific example, is the 2005/2013/2015 EU-Denmark Treaty on the extension of the Brussels Ia Regulation to the relations between the EU and its partic-

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ular status Member State Denmark20. Also, the EU may have an interest in having a particular regime of inner-EU judicial cooperation as an element of its own political identity, even if it “trusts” the judicial system of some third country to the same degree as the judicial system of its own Member States. On the other side, the EU also has an interest in smooth and fair judicial cooperation with non-EU countries, both for the reason that this can be an element of good neighborhood and even political relevance (e.g. in the context of political association) and for the reason that a good-working system of judicial cooperation with third countries may also contribute to the procedural protection of persons domiciled in the EU. Judicial cooperation may also be a helpful tool to contribute to judicial reforms in third countries. From the perspective of third countries, the interests may be rather complementary to the EU’s view. Some third countries may have an interest to create in their relations with the EU a similarly liberal system of judicial cooperation as under the EU Regulations, for example when they have a comparable level of trust into the judiciary of the EU Member States (and the EU itself) as the EU may have towards them. Apart from the Contracting States of the Lugano Convention this could be imagined on the side of the UK after Brexit, if there are no principal political objections against such an approach on both sides. Other third countries may have a more cautious approach in this regard, be it as the degree of mutual trust between them and the EU may be more limited or as they may want to keep a special (procedural) regime for themselves or other countries with whom they cooperate. This may be true, for example, in case of other (present or future) regional cooperation organizations. Also, some countries as well as the EU may regard their relations with the EU as so peripheral that they would not invest time and efforts into negotiations on any judicial cooperation agreements with the EU. However, both for such countries and the EU participation in negotiations on a broader scale such as the Hague Conference on Private International Law may be attractive.

20 See https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A22015A0710 %2801%29 (last access at: 01.12.2020).

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C. Which approaches to which “third countries?” The territorial scope of the EU instruments delimits, in a sense, the “external frontiers” of the European Area of Justice. This a valid perception, often shared both on the inside and outside of the EU, and it affects policy making. But it is only a starting point. To begin with, the outside is far from unitary. In abstract terms, it makes no difference, in principle, in a specific legal problem whether we are talking about the post-Soviet space, the Middle East, Eastern or Southeast Asia, countries from the British Commonwealth, Latin America, or the United States. But in a comprehensive approach we must take account of the differences in law, and in relative power. There is a prospective difference in approach between Member States dealing primarily with conflicts involving other Member States and those with strong jurisdictional connections to third countries. Different Member States may moreover be dealing with different groups of third countries, as well as different types of problems: Latin America is probably important for Spain and Portugal, whereas the post-Soviet space is very important for the Eastern and Central European Member States. The post-Soviet space is also important for Cyprus, in which case laws and language are even less mutually familiar. This brings us to a very important parameter, in terms of legal geography, which is often neglected: the interior of the European Union. Civil litigation based in (or connected with) the Union operates in a binary mode: an EU private international law regime, on the one hand, and “residual jurisdiction” regimes, on the other.21 How visible this divergence is has to do with how different, in a given Member State, the EU and residual regimes are, but also with the amount and value of cases not falling under the EU regime. The most remarkable case in that regard has to do with those Member States influenced by English procedural law.22 In those

21 On the operation of EU private international law in each of the Member States (as well as some horizontal studies see the contributions in Beaumont et al (eds), Cross-Border Litigation in Europe (2017). For a comparative study of residual jurisdiction regimes see Nuyts, General Report: Study on Residual Jurisdiction (2017), available at http://ec.europa.eu/civiljustice/news/docs/study_residual_jurisdiction _en.pdf (last access at: 01.12.2020). 22 On English law and the interaction between common-law and EU regimes see notably Collins (gen.ed.), Dicey, Morris & Collins on the Conflict of Laws (2012); Briggs, Private International Law in English Courts (2014); Fentiman, International Commercial Litigation (2015); Hartley, International Commercial Litigation (2015); on Cyprus see Hatzimihail, ‘Cyprus’, in Beaumont et al (eds), Cross-Border Litigation in Europe (2017), 273–284.

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States, from the UK (until now) and Ireland to Malta and Cyprus, we observe a truly “binary” private international law: EU and English common law, apparently competing in doctrinal terms but symbiotic in business and legal terms.23 Taking account of the large differences in the political, economic and social structures, as well as in the legal traditions, of States, it would be neither realistic nor reasonable to plead for a general common approach of the EU towards judicial cooperation with third countries. On the opposite, as one observes already today, it is possible and practicable to have a differentiated system of judicial cooperation with different third countries, following political, economic and societal rationales. The “most liberal”, most cooperation-friendly approach would be justified in relations with countries, which have very close political, economic and societal links with the EU and share a mutual trust in their judiciaries. As examples, one can mention here the contracting States of the Lugano Convention; Denmark (with its special status within the EU) and, hopefully, the UK after Brexit. Another – neglected – group of great proximity consists of the European microstates: Liechtenstein, Monaco, San Marino, the Vatican City State, or Andorra would fall into this category. These microstates are usually very closely connected to one or more Member States and their legal systems – distinct and sovereign as they may be – are generally compatible. So an agreement should be easy to reach, but in practice the political interest to start negotiations on judicial cooperation agreements with such microstates is probably low, on both sides, and the problems are few. This would still allow, however, the adoption of more flexible particular solutions with such States. Similar considerations would seem to apply to countries with solid societal structures, elevated economic relations with the EU and a high trust into the judiciary, e.g. Japan, South Korea or Singapore. Not long ago, there was some academic interest about Japan joining a version of the Lugano Convention; today most hopes lie in the work of the Hague Conference, but in the case of failure, perhaps “bilateral” agreements should

23 The discussions surrounding Brexit have brought to light the interconnection of the British services and manufacturing sector with the Continent. As to the symbiosis in legal terms, the ability to speedily enforce British judgments in the other Member States has added to the growth of London as a pivotal jurisdictional venue and brought in cases which did in their turn lead to the elaboration and refinement of several procedural tools for interim and injunctive relief, leading to a virtuous circle for the elite bar that spilled over into arbitration and even mediation.

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provide a solution. This is all the more true when the EU has concluded with such countries so-called Deep and Comprehensive Free Trade Agreements establishing a close cooperation in many economic fields. A different category are States, which are politically close to the EU, but whose judiciary is not yet in such a stable position as to justify “mutual trust” to the same degree as between EU Member States. Countries with which the EU has concluded Association Agreements with a significant political and economic integration dimension (most important examples: Georgia, Moldova, Ukraine), are often mentioned as particular candidates for enhanced judicial cooperation with the EU, but the same holds true of EU membership candidates such as Albania, North Macedonia, Montenegro, Serbia or even Turkey. The case of the three Association Agreements countries is examined by Basedow in his contribution.24 In her own study, Izarova25 analyses judicial cooperation with the EU from the viewpoint of Ukraine. As the Association Agreement of 2014 does not contain any particular provisions on judicial cooperation in civil and commercial matters, concrete further steps would have to be agreed between both sides in the ongoing association process. Izarova describes in detail which steps Ukraine has undertaken and continues to do in order to give the agreed “Free and Comprehensive Trade Area“ with the EU a judicial component. Apart from a cooperationfriendly regulation of cross-border civil procedure in domestic law and constant work in the field of judicial reform Ukraine has been one of the first signatories of the Hague Judgments Convention 2019. Izarova speaks out in favour of a step by step approach, which could include bilateral agreements with the EU on certain aspects of judicial cooperation (including, e.g. topics covered by the EU Regulations on special proceedings: small claims, undisputed claims etc.). Particular reference is made to the current ELI/Unidroit project on (Model) European Rules of Civil Procedure, which is not limited to the EU, but involves also Member States of the Council of Europe. Latin American countries represent yet another group of States: these are countries with strong cultural and economic ties with EU and its Member States. They also share with Europe a common legal culture – including regard for the rule of law – and a long history of sovereign participation in international legislative initiatives, including the Hague Conference. Participating in global institutions notwithstanding, Latin American

24 See Jürgen Basedow, supra pp. 15 et seq. 25 Supra pp. 191 et seq.

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countries can boast of their own regional institutions for cooperation in legal as well as economic matters. At the same time, Latin American countries have their own distinct interests and are very conscious about safeguarding their sovereignty. The example of Colombia, which is described from an outside observer’s perspective by Stöber26 in this book is characteristic. Colombia, similar to most Latin American countries, takes traditionally a rather restrictive position towards international judicial cooperation, but this approach might change in the future due to economic improvements in recent times27. Yet another category are States, with whom the EU and its Member States have close political, economic and societal contacts of different levels and intensity, but which might for different reasons not be interested or in a position to agree on a broad mutual regime of judicial cooperation. This does not and should not exclude, however, more limited forms of agreements on judicial cooperation with such countries. The three main countries that come to mind – U.S., China, and Russia – constitute three different cases. U.S.-E.U. relations have long preoccupied legal scholarship – and transatlantic practice: the expansion of both EU territory and EU law has somewhat leveled the playing field, leading to an ever increasing U.S. interest in reaching an agreement, probably in the context of the Hague Conference. China is now active in multilateral decision-making in this regard as well, while at the same time pursuing its own unilateral and bilateral initiatives. The Russian Federation is also party to multilateral arrangements, such as the Hague Conference. EU Member State courts are a regular venue for Russian-related civil and commercial disputes and it would appear that there is mutual interest – and scope – for exploring bilateral arrangements going further than a multilateral agreement.28 Generally speaking, it is to be remarked that the EU will have to find adequate solutions on judicial cooperation with different categories of States, reaching from a quasi-extension of EU Regulations on a reciprocal basis (examples: EU-Denmark Treaty 2005/2013/2015, similar but somewhat more limited: the Lugano Convention) to purely unilateral or pragmatic solutions.

26 Supra pp. 213 et seq. 27 This statement does not yet take into account the most recent impact of the Corona pandemic. However, it is worth mentioning that Colombia (and Peru) have concluded with the EU in 2012 a Free Trade Agreement (not yet in force, but provisionally applicable), see https://www.consilium.europa.eu/en/documents-public ations/treaties-agreements/agreement/?id=2011057 (last access at: 01.12.2020). 28 See the contribution by Vladimir Yarkov, supra pp. 181 et seq.

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D. Which instruments? Civil litigation between the EU and third countries is currently governed by a multi-layered web of proliferating international instruments, national laws and established practices. Evaluating this web invites a basic exploration of various levels of politics – from international to EU to domestic and judicial politics. It also raises questions relating to the theory of legal sources, as to both international and EU law; on the other hand, such “conflicts of treaties” or, more precisely, “conflicts of instruments” have been resolved by express provisions in EU instruments. In order to understand the normative environment, we should distinguish between at least three levels – or layers – of sources. The first level consists of international instruments, namely treaties (conventions) concluded by the EU or individual Member States: the distinction between multilateral and bilateral treaties is critical in this regard. The second level consists of the EU instruments that create a “unilateral” EU law. The third level consists of the autonomous or “residual” law of individual Member States. These levels are interconnected: many bilateral treaties are instruments of international law but operate on the ground (“national”) level and have traditionally formed part of national policies of judicial cooperation, while today they are also taken into account in the reshaping of EU policies. The future of EU private international law vis-à-vis third countries will (and should) continue to involve all these levels. At the same time, we have been witnessing an increased role for more informal components (“soft law”), which must also be considered.

I. Multilateral treaties Multilateral treaties may have a global and general orientation or be more limited – in the subject they cover or their geographic scope. The United Nations has for example provided a general international framework with regard to international commercial arbitration and the facilitation of recognition/enforcement of judgments and arbitral awards and has maintained a role in the development of uniform substantive law, via UNCITRAL.29 But matters pertaining to civil litigation have been left to

29 E.g. the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

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regional or specialized organizations outside the UN system, such as primarily the Hague Conference on Private International Law. The Hague Conference is one of the oldest international organizations of any kind and its efforts to provide a global treaty framework for civil procedure go back to its early days. Today, the Conference is the foremost venue for global engagement. It is proactive in “horizontal” collaboration with other actors in the field of international law making,30 It has been in fact becoming even more truly global, with an active Latin American contingent and increased Asian, as well as African, participation. The Hague Conference can act as an incubator for legislative initiatives and policy decisions, by fostering discussions, enabling the building of mutual trust, developing vocabulary and facilitating the alliances needed for initiatives. The Hague Conference has also been increasingly experimenting with softer legal instruments, including the Principles on Choice of Law in International Commercial Contracts, but also a variety of tools facilitating judicial cooperation and effective national implementation. For an example of relatively successful coexistence of EU and international instruments on the same subject, one need look no further than the service of documents. The respective Hague Conventions have provided a functioning global framework, on which the respective EU Regulations were able to rely upon. Today, the EU-wide framework in both respects is much more integrated than the global (“Hague”) framework, providing for closer and more immediate collaboration between national courts, use of additional technical means, and even for a direct role of parties in judicial cooperation. The EU experience may in turn help the Hague frameworks move forward with the adoption of more expedient means. Family litigation also provides examples of fruitful coexistence and collaboration, for example in matters of international abduction and maintenance obligations. Perhaps the most important role of the Hague Conference has been as the home of discussions for a global convention on jurisdictions and judgments.31 The original, ambitious project aimed to replicate the success of the then Brussels Convention by regulating the jurisdictional grounds

30 One may not disregard the role of other actors in the field of international law making, such as UNCITRAL, UNIDROIT, and non-governmental institutions such as the American Law Institute, the International Bar Association and the International Chamber of Commerce. 31 A chronology of the Hague Judgments Project, with links to the principal documents, can be found at: https://www.hcch.net/en/projects/legislative-projects/judg ments (last access at: 01.12.2020)

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available to the Contracting States. Whereas the Brussels regime established a comprehensive system of “direct jurisdiction” grounds that were to apply in cases falling within its scope, as contrasted to the so-called “exorbitant” grounds of national procedural laws, whose application was disallowed within that same space (what is called a convention double), the original Hague convention project contemplated a convention mixte with three lists: a “white list” of clearly acceptable bases (giving rise to judgments that had to be enforced); a “black list” of unacceptable bases (giving rise to judgments that could not be enforced under the convention); and a “grey list” of bases permitted under national law, with the question of recognition and enforcement of the judgments to which they gave rise left open under the convention.32 After a decade of discussions on such a convention, that project came to a halt in 2002. It was then decided to focus, for the time being, on the more easily achievable goal of a Convention on Choice of Court Agreements, which was finally concluded in 2005.33 The past decade saw the revitalization of the judgments project, with a Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters being finally concluded on 2 July 2019, which has however avoided most thorny issues regarding “direct jurisdiction” and could be regarded as a convention simple in this regard, while work on a Jurisdiction Project is expected to continue in the foreseeable future.34 Be that as it may, the Hague Judgments Convention, if ratified also by the EU, would create a potentially worldwide system of recognition and enforcement in relations with all other future Contracting States, expanding further on the topically more limited, but still universal and commercially vital Hague Choice of Court Convention. The advantage of the EU ratifying such treaties consists in the effect of having one single legal regime with potentially many other Contracting Parties: moreover, the Hague Conference provides a forum where the EU and its Member States have a long tradition of participation and considerable leverage. Of course, ratification by the EU will usually take place only if the EU deems the contents of such treaties compatible with its own legislative views or is otherwise positive. It is indicative that it took another decade for the European

32 Von Mehren, ‘Recognition and Enforcement of Foreign Judgments: A New Approach for the Hague Conference?’ (1994) 57 Law & Contemporary Problems, 271– 287. 33 https://www.hcch.net/en/instruments/conventions/full-text/?cid=98 ((last access at: 01.12.2020) 34 Cf. https://assets.hcch.net/docs/70458042-f771-4e94-9c56-df3257a1e5ff.pdf (last access at: 01.12.2020).

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Union to ratify even the Choice of Court Convention. It is even more telling that all major players had waited for the EU’s decision before acceding themselves.35 Multilateral treaty-making is not limited to the Hague Conference. Multilateral treaties, under the auspices of specialized organizations and dealing with particular subject areas of private law often contain provisions on cross-border civil procedure, in particular on jurisdiction or recognition/ enforcement36. Although they may be helpful in specific situations, they always raise questions as to their compatibility with general conventions of broader scope, or legislation. The notable normative and doctrinal successes of EU private international law over the past half century should moreover not make EU policymakers oblivious to the lessons that can be drawn from existing multilateral (or even bilateral) treaties existing in other parts of the world, e.g. in Latin America or in the post-Soviet region. This is especially important if the EU is to elaborate a strategy in pursuit of its policy of judicial cooperation with third countries. Such instruments are not only of an academic value, but also practically relevant for an understanding of the background of policy-perceptions of numerous potential contracting partners of the EU. Some of these treaties may even be closely related to bilateral treaties of some EU Member States. An interesting example of multilateral action is proposed by Basedow37 in his contribution. Focusing on judicial cooperation between the EU and the three “Association Agreement” partner countries of Georgia, Moldova and Ukraine, and noting the diversity of national approaches in the EU Member States towards these countries, In this case, regional, rather than global standards are needed. Basedow pleads for a special regime of judicial cooperation beyond the mere reference made in the Association treaties to the Hague Conference on Private International Law. Such a cooperation could be modeled along the lines of the Lugano or a quasi-Lugano Convention.

35 The U.S.A. signed the Convention on 19 January 2009 (but has not yet ratified it). Only Mexico had signed prior to that point, on 26 September 2007 but had to wait for additional members to join for the Convention to come into effect. The EU signed on 1 April 2009 but the Council only gave approval in June 2015, with the Convention finally coming into effect, between Mexico and the 28 Member States, on 1 October 2015. Singapore signed on 25 March 2015 and ratified on 2 June 2016, with China signing on 12 September 2017. 36 Cf. Montreal Convention, CMR, maritime law etc. 37 Supra pp. 15 et seq.

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II. Bilateral treaties of the EU and/or Member States Another option is the conclusion of bilateral38 treaties between the EU and/or EU Member States and one (or a limited group) of non-EU countries. This could theoretically also include a treaty between the EU and another regional organization. Bilateral treaties have been relatively neglected in discussions about EUthird country relations: a multilateral agreement is generally regarded as a more effective way of achieving international uniformity, and many would even privilege a “unilateral” reform of EU law with general application over third countries.39 But for others, bilateral treaties may allow customization as well as feasibility. In her contribution, drawing on the Greek experience gained from bilateral judicial assistance treaties with third countries, Moustaira40 gives a positive evaluation of such treaties, adding that they should be applied in a general system of favor cooperationis. This would include, in particular, mutual cooperation on the basic of domestic law if domestic law is more cooperation-friendly than e.g. the bilateral treaty. A major stumbling block for bilateral agreements is the fact that, as the EU is now (arguably) exclusively competent for international civil procedure law in general41, Member States are no longer competent to negotiate bilateral treaties on judicial cooperation with non-EU countries. True, existing treaties have been expressly kept untouched by EU Regulations42, but the EU might change this situation in the future, forcing Member States to denounce existing treaties. From a policy perspective, this would seem justified, however, only if the EU then stepped in proposing a followup treaty between the EU and the respective third country. At present, individual Member States are also prohibited to modernize existing treaties. However, the EU has passed (already in 2009) two regulations defining conditions under which Member States might get permission from the EU to modernize or even conclude new agreements with third countries in

38 The term “bilateral” is understood here to (potentially) include treaties of the EU with a limited group of countries, such as e.g. one treaty with the Association countries Georgia, Moldova, Ukraine. 39 See for example the contribution of Dieter Martiny, supra pp. 127 et seq. 40 Supra pp. 29 et seq. 41 Probably with some limited exceptions such as arbitration and civil execution. As to mediation, the EU probably has only a non-exclusive competence. 42 See, e.g. Art. 73 para. 3 of the Brussels Ia Regulation.

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matters of judicial cooperation and conflict of laws43. This approach, which is at present limited to a few specific regulations (in procedure: only family law), could be broadened and used in practice if the Commission decided not to propose a follow-up treaty between the EU itself and the third country. The advantage of bilateral treaties (whether treaties of the EU itself or of Member States), as compared with multilateral treaties, consists in that they can be tailored exactly to the needs and wishes of the Contracting Parties. As the EU is typically a “strong party” in such negotiations, it has a good chance in reaching many of its negotiating goals, presumably even more so than in the context of a multilateral agreement. On the other side, the non-EU side can possibly reach “more” than under a multilateral treaty, and the contents of the bilateral treaty can also be easily linked with other topics of the parties‘ bilateral relations. Finally, the bilateral agreement can even be used as an instrument “plus”, building upon a multilateral treaty, thereby creating a more favorable, cooperation-friendly regime than under the multilateral text. This approach has, for example, often be used by some States in the context of the older Hague civil procedure conventions and could today also be used by the EU itself. The inbuilt “weakness” of the bilateral approach lies in the fact that there may arise treaty conflicts or conflicts with other EU law, and that such bilateral treaties might be regarded as discriminatory by outsiders. A very interesting example for the use of bilateral decision-making is provided by Yarkov44 in his contribution, which approaches the issue of mutual recognition and enforcement of judgments from the perspective of a third country – Russia. While remarking that the present political tensions between the EU and Russia make the conclusion of a bilateral agreement on judicial cooperation between the two sides very improbable,

43 Council Regulation (EC) No 664/2009 of 7 July 2009 establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries concerning jurisdiction, recognition and enforcement of judgments and decisions in matrimonial matters, matters of parental responsibility and matters relating to maintenance obligations, and the law applicable to matters relating to maintenance obligations, OJ L 200, 31.07.2009, p. 46–51, https://eur-lex.eur opa.eu/legal-content/EN/TXT/?uri=CELEX%3A32009R0664 (last access at: 01.12.2020); secondly, the Regulation (EC) No 662/2009 of the European Parliament and of the Council of 13 July 2009 establishing a procedure for the negotiation and conclusion of agreements between Member States and third countries on particular matters concerning the law applicable to contractual and non-contractual obligations, OJ L 200, 31.07.2009, p. 25–30. 44 Supra pp. 181 et seq.

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Yarkov underlines the interest of Russia in improving judicial cooperation with the EU. He mentions several multilateral treaties, which might be used for this purpose, e.g. the Hague Choice of Court Convention 2005 and the Hague Judgments Convention 2019. In addition, Yarkov delineates the structure of a possible EU-Russian Treaty on Jurisdiction and Mutual Recognition and Enforcement of Judgments. Going beyond what can be achieved at the Hague, such an instrument should be conceived as a convention double and reach beyond typical civil and commercial cases, to include e.g. alimony, consumer, labor and insolvency matters. Particular mention is made, among others, of different heads of jurisdiction, of grounds for the refusal of recognition and enforcement, of procedural requirements for recognition and enforcement and of the effects of recognition.

III. Unilateral action by the EU or Member States The basic category of regulatory instrument in matters of judicial cooperation, even with regard to external relations, was formerly national civil procedure law, today EU Regulations, i.e. “unilateral” legislation. Although national legislation or unilateral EU law cannot guarantee the cooperation of other countries, they can establish standards for cooperation and solve certain procedural issues with a non-EU dimension when cooperation by the foreign country is not a necessary requirement. EU law, e.g. the Brussels Ia Regulation, could easily be revised again, including common EU rules on recognition and enforcement of judgments from non-EU countries. Whether the EU should widen the contents of its Regulations in such a direction, is a political question, as it would shift significant residuary competences from the Member States to the EU. A “uniform” approach of EU civil procedure law with regard to third countries would avoid risks of discrimination as well as of forum shopping in disputes involving non-EU countries. If the EU decided not to unify its regulatory approach beyond the level of today, the Member States would remain competent to legislate independently (within the general limits of EU law). However, unilateral action – whether by the EU or by Member States – can well be embedded in a process of coordination or cooperation with other countries. For example, the EU’s unilateral Regulations could provide, in certain contexts, for the criterion of reciprocity, and reciprocity could be a matter of mutual understanding in bilateral relations with some non-EU countries. For example, if the EU provided for recognition of nonEU judgments on the basis of reciprocity, third countries could – e.g. with290

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in their constant cooperation with the EU in association institutions – modify their own legislation in a way opening the door to mutual recognition and enforcement of judgments from EU countries. It is true that the reciprocity requirement in some national civil procedure laws has been criticized by many scholars as sacrificing the interests of private parties on the altar of mere hopes of negotiations with foreign countries45. Basically, however, it is a political question whether the EU and its Member States prefer to have a largely non-uniform approach to third country relations or a uniform approach which might not go as far as some of its proponents would wish.

IV. Which role for soft law? The so-called ”soft law”, i.e. norm-like texts or even processes leading to common or coordinated legal practice has been gaining in popularity, especially with regard to global and even EU governance. Soft law includes texts aiming at elaborating doctrinal principles and constructing an academic consensus; texts aiming at providing private parties, or arbitrators, with a set of legal norms that can be incorporated – or implied – into commercial agreements; and Model Codes or Model Treaties, which have the appearance of legislative instrument but are not aimed to be binding by themselves, but rather to be adopted (as such or with whatever modifications) by national legislators or even international organizations. Soft law has been making inroads into the fields of private international law and civil procedure. Even the Hague Conference engaged recently in an exercise with soft-law characteristics, with its Principles on Choice of Law in International Commercial Contracts, which are meant to be “applied by courts or arbitral tribunals”, or “be used to interpret, supplement and develop rules of private international law” or “be used as a model for national, regional, supranational or international instruments” 46. The

45 But see also Elbalti, ‘Reciprocity and the recognition and enforcement of foreign judgments: a lot of bark but not much bite’ (2017) 13 Journal of Private International Law, 184–218, available online at https://www.tandfonline.com/doi/abs/10. 1080/17441048.2017.1304546?journalCode=rpil20 (last access at: 01.12.2020) (stating that reciprocity is not that harmful for recognition of judgments as it usually exists). 46 https://www.hcch.net/en/instruments/conventions/full-text/?cid=135 (last access at: 01.12.2020). The Principles have been implemented in the national legislation of Paraguay.

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Hague Principles may be regarded as facilitating the approximation of more parochial legislation and global practice with the emphasis on party autonomy in commercial contracts that characterizes the European approach; as such they serve as an example of how “soft law” models can help the EU achieve global convergence in matters of private international law. The most important example of a Model Law globally has been the 1985/2006 UNCITRAL Model Law on International Commercial Arbitration, which has been adopted more or less uniformly in (today) 83 countries involving 116 jurisdictions47. But Model Treaties are also a very common tool in various legal areas, e.g. in foreign investment law, tax law etc. It would thus not seem unreasonable for the EU to develop a Model Treaty on judicial cooperation with non-EU countries. This brings us to the third type of soft law texts, namely those aiming at constructing a doctrinal consensus. The first internationally well-known text of soft law on cross-border civil procedure probably are the 2004 ALI/ Unidroit Principles (and Rules) of Transnational Civil Procedure, which try to bridge the gap between U.S. and European approaches in the field of cross-border civil and commercial dispute resolution48. Taking the ALI/ Unidroit Principles as a starting-point, the European Law Institute (ELI) and Unidroit started in 2013 another project of soft law in civil procedure, the (Model) European Rules of Civil Procedure49. According to the now available final draft of these Rules of 26 May 2020 they will apply both to domestic and cross-border disputes and specifically address some aspects of cross-border disputes50. Even if the proposed Rules do not – with very small exceptions – deal with international jurisdiction and recognition/ enforcement of foreign judgments51, they can give an important impetus – and input -- to legal reform in procedural law, including its cross-border aspects, not only for the EU and its Member States, but also beyond52.

47 See https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/ status (last access at: 01.12.2020). 48 See https://www.unidroit.org/instruments/transnational-civil-procedure (last access at: 01.12.2020). 49 Cf. https://www.europeanlawinstitute.eu/projects-publications/current-projects-fe asibility-studies-and-other-activities/current-projects/civil-procedure/ (last access at: 01.12.2020). 50 See e.g. Rules 45 and 46 (capacity of foreign parties to be a party and litigate), Rules 82–86 (issues of cross-border service of documents), Rules 128–129 (issues of cross-border taking of evidence), Rules 202–203 (international jurisdiction and recognition/enforcement relating to provisional and protective measures). 51 See Final Draft MERCP, Preamble, sub VII.2. 52 As to this aspect see Iryna Izarova (in this book), supra pp. 191 et seq.

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Finally, the contribution of Panych53 is devoted to the (by now nearly completed) Model European Rules of Civil Procedure, prepared under the auspices of the European Law Institute and Unidroit. As the draft text of these Rules has become available only recently, the author had to derive information about their proposed content from various secondary sources. However, even such partial information allowed to discuss some important aspects of these Rules, e.g. the question to which the planned Rules would be relevant for non-EU countries (third countries). Panych approaches these issues by comparison with, in particular, the ALI/Unidroit Principles of Transnational Civil Procedure of 2004, but draws also comparative lines to other developments outside the EU, e.g. the (former) endeavors in the post-Soviet region to create a Model Code of Civil Procedure. Due to the scarcity of information on the proposed Rules, the contribution was originally limited to raise (informed) questions, for example to which degree the Rules might be used to support judicial reform in nonEU countries and could be of use on the way to improve judicial cooperation between the EU and third countries. In a post-script Panych analyses the now available final draft of the Model Rules and develops some proposals for concrete legislative action based on the Rules. Yet another type of even less formal “soft law” sources – consists of tools of “soft coordination”, such as semi-authoritative Guides or Guidelines addressed to judges, litigators or public officials. The Legislative Guides drafted by UNCITRAL on certain legal areas, e.g. insolvency law54, constitute a prime example. Such Guides, by promoting common standards and identifying ex ante problems, might foster legal certainty and enable a gradual convergence of legal practice and national case law.

V. Combination of instruments? In the end, it is unrealistic and perhaps undesirable to expect that a single instrument, or even a single type of instruments, will provide all solutions. The optimization of judicial cooperation between the EU and third countries will involve a complex system consisting of instruments of varied types, yet compatible in their operation. Multilateral conventions will certainly constitute a substantial component of this system, with especially

53 Supra pp. 255 et seq. 54 Cf. https://www.uncitral.org/pdf/english/texts/insolven/05-80722_Ebook.pdf (last access at: 01.12.2020).

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the Hague Conference and its instruments being a vital pillar. But, as has been evidenced in this book, bilateral treaties should continue to perform a role in filling gaps, providing customized solutions and experimenting with new tools for judicial cooperation. Perhaps a Model Treaty will provide an effective – and efficient – solution in this regard. EU Regulations will continue to constitute the other major component of this system: a prudent reform of existing instruments with a view to a more consistent and transparent regulation of private relations with third countries is feasible and will improve things while only requiring small steps. Soft law texts, supported by an emerging scholarly consensus and a transparency in global legal practice should provide normative and practical guidance. On the one hand, as a helpful tool for the interpretation of national law, in accordance with international or global standards, but also of EU legislation and international instruments. On the other hand, as an early draft and preliminary work for future legislation, again both national and European or global.

E. What problems? From an objective point of view, the issues raised range from obtaining jurisdiction and enforcement of judgments to interim relief (primarily with regard to the preservation of assets or evidence) and, finally, judicial cooperation mechanisms (aiming at facilitating service of process, taking of evidence or protection of persons). From a subjective point of view, the principal issues concentrate around questions of establishing jurisdiction, on the one hand, and dealing with jurisdictional conflicts, on the other.

I. Direct jurisdiction It has been made clear from early on that domicile of the defendant in a Member State is the primary criterion for obtaining jurisdiction under the Brussels I instruments.55 The principal problem areas concern ensuring access to EU-based claimants even when the defendant is not EU-based and,

55 See the discussion by Alexander Trunk, supra pp. 37 et seq.

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conversely, dealing with access to justice even for non-EU based litigants in certain cases.56 In the general contribution on direct jurisdiction, Trunk57 develops a system of legislative measures, ranging from amendments to existing EU Regulations to mutually agreed steps in the EU and third countries on the basis of soft law such as the (planned) European Rules of Civil Procedure. Taking the Brussels Ia Regulation as an example, Trunk proposes to reflect on adding habitual residence to (traditional) domicile as a connecting factor for general jurisdiction, and proposes to develop some EU rules on (general) jurisdiction in cases against defendants domiciled in third countries, which might exclude some – even if not all – domestic rules of EU Member States. The contribution further suggests to apply the Regulation‘s rules on specific jurisdiction also to defendants domiciled in (at least some) third countries, rebalance the Regulation’s rules on protective jurisdiction (in particular consumer disputes) when defendants are domiciled in specific third countries, limit some categories of exclusive jurisdiction in case of specific links with (some) third countries on an agreed basis and proposes also some limited amendments to the provisions on choice of court agreements with a view to “mutual recognition” of such agreements in specific third countries. Looking at the issue of “residual jurisdiction” (against defendants domiciled in a third country), in particular in human rights litigation, Stürner and Pförtner58 argue for an extension of the sphere of application of the Brussels I Regulation to defendants domiciled in third countries. This should include the creation of a carefully worded forum necessitatis, which should not renounce the requirement of a substantive geographical link to the forum State. The contribution of Miglio59 gives a very careful analysis on the new provisions relating to jurisdiction of the (planned) Unified Patent Court (UPC) into the system of the Brussels Ia Regulation60 as a possible model

56 See e.g. Young v Anglo-American South Africa Ltd [2014] EWCA Civ 1130: the plaintiff, from Botswana, sued for negligence the defendant, a South African company, in the UK, where its holding company was based. The court considered whether UK was the place of “central administration” in order for jurisdiction to be established under the Regulation and answered in the negative. See especially the discussion by Michael Stürner and Friederike Pförtner supra pp. 53 et seq. 57 Supra pp. 37 et seq. 58 Supra pp. 53 et seq. 59 Supra pp. 71 et seq. 60 Art. 71a and 71b Brussels Ia Regulation. See also Art. 71c and 71d of the Regulation (on litispendence and recognition/enforcement).

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for future amendments of the Regulation with regard to disputes against defendants domiciled in third countries. Essentially, the new provisions extend the Regulation’s rules on specific jurisdiction (forum delicti etc.) to defendants domiciled in third countries and provide for an additional specific head of jurisdiction in such cases (situs of property). The author notes that the new provisions may have an important impact on future amendments to the Brussels Ia Regulation with regard to disputes involving third country based defendants, but refrains from concrete recommendations as the example of the UPC-related amendments shows also the dangers of fragmentation of EU civil procedure law in relation to different “third” States.

II. Parallel proceedings Most of the discussion, however, has revolved around the latter group of questions, i.e. dealing with jurisdictional conflicts that may often lead to parallel proceedings. For jurisdictional conflicts between the Contracting/ Member States, the Brussels regime established a system of lis alibi pendens, giving priority to the Member State whose courts were first seized. But no mention was made, in either Convention or the first Regulation, of thirdcountry proceedings. What about a case where a plaintiff sued in the courts of a Member State on account of the defendant’s domicile there, but the subject of the dispute had a very strong connection to a third country, as for example in a case involving real property situated there? Were such real property to be located in a Member State, the exclusive jurisdiction of its courts under Article 24 would compel any court in another Member State to decline jurisdiction. In fact, some scholars – principally from Continental jurisdictions, have advocated the so-called “reflexive effect” (effet réflexe) doctrine, which should lead to a respective result, at least with regard with grounds that would have granted exclusive jurisdiction to Member State courts.61 Even though the effet réflexe was never adopted in

61 Nuyts, ‘Les Frontières extérieures de l’espace judicaire européen: La théorie de l’effet réflexe’ in De Leval and Storme (eds), Le Droit processuel et judiciaire européen: colloque du Centre interuniversitaire de droit judiciaire (2003), 73–89 ; Briggs, Private International Law in English Courts (Oxford University Press, Oxford 2014), 322–323.

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legislation, there are sporadic, if divergent, instances of the English High Court treading in this direction.62 Whereas lis alibi pendens was the predominant approach in Continental legal systems, common-law systems had followed a different approach, which by the end of the twentieth century had led to the empowerment of judicial discretion in two directions. On the one hand, to decline the court’s jurisdiction under the forum non conveniens doctrine.63 On the other hand, to protect the exercise of the court’s jurisdiction by compelling (“enjoining”) litigants to respect its proceedings, namely by issuing an antisuit injunction.64 These doctrinal tools were made redundant for disputes falling with the scope of EU private international law, which prohibited both the exercise of any judicial discretion as to the exercise of jurisdiction, even if the alternative forum was located outside the Union,65 and the availability of injunctive relief in order to prevent parallel proceedings in a court of another Member State.66 But they have persisted, in EU countries following the common-law approach, for disputes involving third-country citizens. In fact, it could be argued that the use of both forum non conveniens and injunctions pertaining to jurisdictional conflicts has grown during the co-existence of EU and common-law private international law regimes. Even though Regulation 1215/2012 did not seek to eliminate jurisdictional conflicts, it has introduced a significant reform that takes care of the most problematic cases. Articles 33 and 34 replicate the mechanism of Articles 29 and 30, with regard to proceedings already pending before a court

62 Fentiman, International Commercial Litigation (2nd edn. Oxford 2015), 415–419 with references to Konkola Copper Mines plc v Coromin [2005] Lloyld’s Rep 555; Ferrexpo v Gilson Investments [2012] EWHC 721 (Comm). 63 The leading case is still Spiliada Maritime Corp v Consulex [1986] UKHL 10. In addition to the works mentioned above see e.g. Nuyts, L’exception de forum non conveniens (Brussels 2003). 64 The leading case is Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] UKPC 12. In addition to the works mentioned above, see e.g. Raphael, The AntiSuit Injunction (Oxford 2018). 65 C-281/02, Owusu v Jackson, ECLI:EU:C:2005:120. The English Court of Appeal had previously taken the position that the forum non conveniens doctrine could apply in a case where English courts did have jurisdiction under the Brussels Convention but the alternative forum was located in a third State. Re Harrods (Buenos Aires) Ltd [1991] 3 WLR 397. The English court had based its reasoning in a perceived lack of Community interest in such a case, but it could be argued that ensuring Community/Union protection to a claimant domiciled in the Union constitutes such a legitimate interest. 66 C-159/02, Turner v Grovit, ECLI:EU:C:2004:228.

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of a third country, identical, or related, to proceedings before the court of a Member State whose jurisdiction is grounded on either the general jurisdiction of Article 4 or the concurrent (special) jurisdiction grounds of Articles 7–9.67 The court may stay proceedings if it is “expected” that the third country court “will give judgment capable” of recognition or enforcement in that Member State, and, in addition, the court is “satisfied that a stay is necessary for the proper administration of justice.”68 Whereas in the case of identical parallel proceedings already in another Member State the court must stay its proceedings “of its own motion”,69 Article 33 simply empowers the court (“may”); moreover, the stay of proceedings will only be examined of the court’s own motion “where possible under national law.”70 Tichý71 addresses the issue of litispendence (including related proceedings) under the Brussels Ia Regulation. As the recast Regulation has introduced express provisions dealing with litispendence in third countries (Art. 33 and 34 of the Regulation), Tichý develops his proposals in the framework of a general analysis of Articles. 29–34 of the Regulation. He pleads for the creation of bilateral regimes on litispendence with third countries and recommends several amendments to Articles 29–34 of the Regulation. In particular, Art. 33 should be amended (or clarified) to address also cases of exclusive jurisdiction of third countries. Another proposal is the creation of a public register of proceedings for litispendence purposes.

III. Recognition and enforcement Traditionally, most of the emphasis has been on these two subjects – direct jurisdiction and parallel proceedings. Recognition/enforcement of judgments is nonetheless the catalyst for much of the legal discussion. As the EU moves ever closer to a speedy circulation of judgments, including even orders for interim relief, between Member States, a – variable but visible – barrier is erected vis-à-vis third country judgments.

67 68 69 70 71

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Regulation 1215/2012. Art. 331 (a) and (b); Art. 34 para. 1 (b)(c). Art. 29 para. 1. Art. 33 para. 4. Supra pp. 95 et seq.

Conclusions

The 2019 Hague Judgments Convention should constitute a significant development in this regard. Indeed, Martiny72 in his contribution, which analyses the different methodological approaches as to recognition and enforcement of third county judgments in the EU, recommends EU ratification of the Convention as the best available solution. Martiny’s subsidiary solution would be for the EU to amend the Brussels Ia Regulation (or create a separate instrument) to provide for uniform provisions on recognition and enforcement of third country judgments, excluding non-final decisions. Martiny also discusses in detail various proposals for possible uniform EU rules on recognition and enforcement of third country judgments. Such rules should, in any case, provide for a scrutiny of indirect jurisdiction (with different alternatives), observance of lis pendens and basic procedural guarantees as well as public policy. In addition, the procedure of recognition and exequatur would have to be determined, as well as the effects of a recognized judgment. Martiny is more skeptical regarding bilateral treaties, mostly for practical reasons (cumbersome negotiations etc.), but he regards autonomous approximation of standards (“common principles”) as a possible approach. In his own contribution, which focuses on the effects of recognition of foreign judgments between the EU and third countries, Tsikrikas73 pleads for a convergence between the judicial systems in the EU and third countries as a precondition for mutual recognition of judgments and recommends the use of the ALI/Unidroit Principles of Transnational Civil Procedure as well as the (future) ELI/Unidroit European Rules of Civil Procedure in this context. De lege lata, Tsikrikas holds that recognition of third country judgements in the EU is governed by national standards. The common EU standards in this respect, in particular the CJEU’s “core issue doctrine” as well as the Gothaer jurisprudence of the Court are not applicable to third country judgments. Tsikrikas also pays particular attention to the recognition and enforcement of provisional measures. Distinct questions arise with regard to the EU Regulations on special proceedings in civil and commercial matters, i.e. presently the Regulation on the European Enforcement Order (EEO) of 2004, the Regulation on the European Order for Payment procedure (EOP) of 2006 and the Regulation on European Small Claims Procedure (ESCP) of 2007. A relatively recent component of EU civil procedure law, these regulations serve the special purpose to improve cross-border judicial cooperation in matters of small

72 Supra pp. 127 et seq. 73 Supra pp. 147 et seq.

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value, simple or mass character or little dispute, as otherwise such claims would probably not receive any cross-border enforcement. Judicial cooperation with third countries should not neglect these Regulations. All three above-mentioned Regulations are looked at in an overview by Trunk74 as to their potential to be applied to relations with third countries. As these Regulations have at present only very limited practical relevance, they will probably not be in the center of legal action in the near future. From a more theoretical perspective or in some “pilot scheme” they deserve, however, a closer look. As the main focus of these Regulations is presently on simplified mutual recognition and enforcement, which presupposes a high degree of trust between the participating countries, they cannot easily be extended to third countries, but only with additional tools of control against abuses. In his contribution, Aliyev75 addresses specifically the EOP Regulation. After giving a careful analysis of the complicated structure and limitations of the EOP Regulation with regard to cases involving third countries, Aliyev explores various issues, which would arise if the EOP Regulation were to be extended to third countries – either by bilateral agreement between the EU and a third country or in a multilateral context (e.g. in the organizational framework of the Hague Conference on Private International Law). One such aspect concerns, e.g. the question of (direct) jurisdiction for such orders, another the intended (but not unlimited) easiness of cross-border enforcement.

IV. Judicial Assistance A final problem area concerns the traditional pillars of judicial assistance, service of documents and the taking of evidence abroad. In both these areas, an EU Regulation exists in parallel with a robust Hague Convention. For those cases not falling under the scope of Regulation or Convention, the residual norms provided in national laws tend to privilege more the forum’s litigants and to be defensive vis-à-vis third-country requests for service or obtaining evidence. Bilateral treaties may provide an improved framework, but not necessarily: many of them are quite old; some make provisions for a regime of judicial assistance that is too reliant on requests being handled by the central government, which may have been useful at

74 Supra pp. 229 et seq. 75 Supra pp. 235 et seq.

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the time of their conclusion but lag behind subsequent developments (including the accession of many third countries to the Hague Convention). Whereas the more common position is that, when more than one instrument on judicial assistance co-exist, their goals are best served by applying the instrument containing the method most favorable to effecting service or collecting evidence, this is not always accepted by national courts.76 In her contribution, regarding the EU’s Service and Evidence Regulations in relations with third countries, Boscheinen-Duursma77 proposes to remedy this situation. Granted that the EU has an exclusive competence to conclude treaties with third countries in these subjects, Boscheinen-Duursma proposes that the EU should empower Member States to conclude agreements with third countries on judicial assistance, if the EU itself does not see at present a political priority for itself to act in this field. Such agreements could be conceived for a limited duration. Another approach, which would be not binding on an international level, but could also be effective, would be parallel legislation in EU Member States and third countries to integrate provisions of the EU Service and Evidence Regulations into domestic legislation, taking into account that some provisions of the Regulations are based on an elevated level of trust between EU Member States, which cannot be unilaterally extended to third countries without modifications.

F. Need/usefulness for legislative action Technically, the provisions in many of the EU’s Regulations on cross-border civil procedure, which require a regular evaluation of the functioning of these Regulations (see, e.g. Art. 79 of the Brussels Ia Regulation, Art. 23 of the Evidence Regulation, Art. 32 of the EOP Regulation, Art. 28 of the ESCP Regulation), suggest that the topic of third country relations should be included in such analysis. Art. 79 of the Brussels Ia Regulation even expressly mentions the issue of jurisdiction with regard to defendants domiciled in a non-EU country as a topic of particular attention.

76 For example, the Russian Federation has acceded to the Hague Service Convention in 2001, but Cyprus courts sometimes disregard that Convention, regarding themselves as bound by a strict interpretation of the 1986 Cypro-Soviet Treaty on Judicial Assistance, as only allowing for service via. See e.g. Tanberg Investments Ltd v Adeal Import LLC, ECLI:CY:EDLEM:2018:A467. 77 Supra pp. 221 et seq.

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Besides, the existing and developing close economic and societal relations with at least some non-EU countries require that dispute settlement involving both parties domiciled in the EU and parties domiciled in nonEU countries should be governed by effective and just rules compatible with inner-EU standards. It is probably true even today that the majority of legal relationships have a purely domestic character and most legal relationships (or proceedings) with a foreign element are related to the EU. However, there are always numerous small cases (e.g. in the field of e-commerce) as well as “big” cases with links to non-EU countries, and the EU’s legislation should offer a framework to handle them, too, in a just and efficient manner. The EU alone does not have the power to guarantee such a result, as there will often be a need for an agreed, reciprocal approach, be it by way of international treaties or otherwise. The study therefore includes contributions by authors from a number of non-EU countries. Likewise, on the legislative level, the EU will have to find a format how to discuss the need for any reform in this field and possible solutions with non-EU partner countries.

G. Which fora for legislative action? In principle, the fora where legislative action for a better system of judicial cooperation with non-EU countries may be undertaken have already been mentioned. On the side of international organizations, the most important and specialized organization is the Hague Conference on Private International Law, but other international organizations such as UNCITRAL and Unidroit or perhaps the Council of Europe78 could or should also be invited to participate. The most important forum in this context is, of course, the European Union itself with its various substructures and links into the EU Member States. Particular mention deserves in this context the European Law Institute as an independent academic-practitioner organization directing its work on EU law. The European Rules of Civil Procedure, which are now close to being adopted, could be a useful basis for further, more specific work on cross-border judicial cooperation.

78 The Council of Europe is engaged in procedural law in different ways. A particular strength of the Council of Europe as to judicial reform lies in the sociological analyses given by its CEPEJ commission.

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Turning the eye to bilateral (or plurilateral) fora, different policies, which have been developed by the EU in recent years and have already found some organizational structure, could be used in this context. Example are the European Economic Area structures79, the European Neighbourhood Policy (ENP)80, the Euro-Mediterranean Partnership81, the EU Strategy on Central Asia82, the Asia Europe Meeting83 and others. More specifically bilateral are e.g. the cooperation structures within various association treaties84 between the EU and third countries, e.g. Canada, Georgia, Japan, South Korea, Turkey or Ukraine85. Similar bilateral structures existing between EU Member States and third countries could also be used, taking into account the exclusive competence of the EU to conclude treaties on judicial cooperation with non-EU countries. In view of the large number of available fora it is highly important that the EU develop an overall strategy on judicial cooperation with non-EU countries and observes, if necessary also coordinates, the different steps undertaken in this field.

H. Techniques of differentiation? Already the existing system of treaties, regulations and national legislation on judicial cooperation with non-EU countries shows that adequate solutions require various differentiations. This is also true for a future, better coordinated approach, but should be done in a rational, efficient manner. One can distinguish between general aspects of differentiation and special aspects relating to the various particular issues of judicial cooperation.

79 See https://eeas.europa.eu/diplomatic-network/european-economic-area-eea_en (last access at: 01.12.2020). 80 See https://ec.europa.eu/info/policies/european-neighbourhood-policy_de (last access at: 01.12.2020). 81 See https://ufmsecretariat.org/ (last access at: 01.12.2020). 82 See https://eeas.europa.eu/sites/eeas/files/2.factsheet_on_eu-central_asia_relations. nov_.18.pdf (last access at: 01.12.2020). 83 Cf. https://www.aseminfoboard.org/ (last access at: 01.12.2020). 84 The term is understood here in a broad sense, including, e.g. Association Agreements, Economic Partnership Agreements, Free Trade Agreements, Partnership Agreements etc. 85 For an overview see https://eeas.europa.eu/headquarters/headquarters-homepage/a rea/geo_en (last access at: 01.12.2020). Cf. also the EU Global Strategy, https://eeas .europa.eu/topics/eu-global-strategy_en (last access at: 01.12.2020).

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Generally speaking, the content and degree of cooperation may depend on the respective non-EU country or countries. Between countries which the EU cooperates very closely and where a mutual high degree of trust in the respective justice system exists, judicial cooperation can be very liberal and smooth, leaving aside some control mechanisms which may be justified in relations with other countries. This differentiated approach may find an expression in the conclusion (or not) of treaties, in the exercise of reservations within treaties or within EU Regulations themselves (e.g. a “regular” regime and different options for “favorable” regimes). Treaties can also be different in the extent of judicial application (e.g. all civil and commercial proceedings or only certain categories of cases) or in the agreed time of duration (e.g. for 5 years, thereafter possibility of prolongation). EU legislation could, for example, provide for different levels of cooperation, depending on whether some additional treaty has been concluded or the European Commission has confirmed the existence of certain circumstances. Sometimes it would seem better to start cooperation at a more cautious, limited level than merely to wait for whatever improvements in the future. Such a flexible approach can also support judicial reform in some countries and give a signal that the EU is ready to undertake concrete steps for judicial cooperation. These general aspects of differentiation will have to be implemented in the respective particular issues of judicial cooperation: (direct) jurisdiction, lis pendens, recognition/enforcement, judicial assistance, special procedure. Probably, the topic of mutual recognition/enforcement is the aspect of greatest importance, also for foreign partner countries. There should be different regimes for recognition within (different) treaties and outside treaties. Judicial assistance is also important, but particular EU rules are, arguably, somewhat less urgent as the Hague Conventions already offer a reasonable solution. “Extension” of the EU’s special procedure Regulations does not seem possible for the time being, but the EU should try to offer third countries a more limited model of mutual recognition/enforcement of decisions on small claims and, possibly also, orders for payment. Common rules of jurisdiction may be useful, too, but may be seen as less urgent in comparison to recognition/enforcement and judicial assistance, except when a liberalized system of recognition close to the model of the Brussels Ia Regulation is envisaged. Rules on direct jurisdiction, which the EU recommends to non-EU countries, could be established even outside treaties by using soft law instruments. Generally, the EU should try to develop a concept of prioritization (within a general strategy on judicial cooperation in civil and commercial matters). For example, one could start ratification of certain multilateral 304

Conclusions

treaties, begin negotiations of “smaller” agreements on judicial cooperation with some countries and at the same time start/continue the process of amendments to existing EU Regulations. Following steps could be, for example, completing and improving the net of treaties, always taking into account the practice relating to the respective instruments.

I. Summary The general outcome of this study is that time has come to overhaul the existing provisions of EU civil procedure law as far as relations with third countries are concerned. The overhaul should include all areas of EU civil procedure law, but the Brussels I a Regulation would be a good startingpoint. There is no uniform “best practice” for such changes, and it is preferable to use different methods: amendments to existing EU Regulations, conclusion or accession to international treaties (multilateral or bilateral), use of soft law such as the future Model European Rules of Civil Procedure. Although it would generally be desirable to carry-through such actions on the EU level, the EU should not exclude the possibility of action by individual Member States (e.g. bilateral EU-plus treaties with third countries on the basis of EU-approved negotiation guidelines). There should be a careful choice between general approaches (e.g. EU provisions on recognition of third country judgments in general) and specific approaches with regard to close partner countries. It is particularly important that the EU should not limit itself to unilateral legislative changes, but it should develop solutions in a constant dialogue with external partners.

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325

About the Authors

Azar Aliyev Ass. Prof. Dr. Azar Aliyev, LL.M. (Heidelberg), Chair of International Economic and Comparative Law, University of Halle-Wittenberg, Germany Jürgen Basedow Prof. em. Dr. Dr. h.c. mult. Jürgen Basedow, LL.M. (Harvard); former Director, Max Planck Institute of Comparative and International Private Law and Professor of Law, University of Hamburg, Germany; Member of the Institut de Droit international Henriette Boscheinen-Duursma Priv.-Doz. Mag. Dr. Henriette Boscheinen-Duursma, LL.M., M.A.S., University of Salzburg, Austria Josephine Doll Josephine Doll, Doctoral researcher and research assistant, Institute of East European Law, Kiel University, Germany Richard Fentiman Prof. Dr. h.c. Richard Fentiman, Queens’ College, University of Cambridge, United Kingdom Nikitas Hatzimihail Associate Prof. Dr. Nikitas Hatzimihail, Director, Laboratory for Commercial Transactions and Dispute Resolution, Department of Law, University of Cyprus, Nicosia, Cyprus Iryna Izarova Prof. Dr. Sc. (Law) Iryna Izarova, Taras Shevchenko National University of Kyiv, Law Faculty, Ukraine; European Law Institute Fellow 327

About the Authors

Dieter Martiny Prof. em. Dr. Dieter Martiny, European University Viadrina, Frankfurt (Oder); Affiliate at Max Planck Institute of Comparative and International Private Law, Hamburg, Germany Alberto Miglio Dr. Alberto Miglio, LL.M. (Bruges); Department of Law, University of Turin, Italy Elina N. Moustaira Prof. Dr. Elina N. Moustaira, School of Law, National and Kapodistrian University of Athens, Greece Nazar Panych Dr. Nazar Panych, к.ю.н. (Univ. Lemberg), LL.M. (Regensburg); Research assistant, Institute of Eastern European Law, Kiel University, Germany Friederike Pförtner Friederike Pörtner, Law Clerk at Landgericht Stuttgart, Germany Michael Stöber Prof. Dr. Michael Stöber, Director, Institute of Business and Tax Law, Chair of Civil Law, German and International Tax, Commercial and Business Law and Civil Procedure Law, Kiel University, Germany Michael Stürner Prof. Dr. Michael Stürner, M.Jur. (Oxford), Chair of Civil Law, Private International Law and International Civil Procedure, Comparative Law, University of Konstanz, Germany Luboš Tichý Prof. JUDr. Luboš Tichý, Director of the Center for Comparative Law, Charles University, Faculty of Law, Prague, Czech Republic

328

About the Authors

Alexander Trunk Prof. Prof. h.c. Dr. Dr. h.c. Alexander Trunk, Director, Institute of East European Law, Chair of Civil Law and East European Law, Kiel University, Germany Dimitrios Tsikrikas Prof. Dr. Dimitrios Tsikrikas, Law School of the National and Kapodistrian University of Athens, Director, Institute of Procedural Studies, Greece Vladimir Yarkov Prof. Dr. Vladimir Yarkov, Head of Civil Procedure Department, Ural State Law University, Yekaterinburg, Russia

329

Index

Applicable law 160 Association Agreement 21, 191, 270, 275, 282

Hague Convention on Choice of Court Agreements 131, 166

Bilateral 32, 48, 132, 136, 184, 192, 201 – bilateral treaties 288 Brexit 157 Brussels Ia (Ibis) Regulation and third countries see Brussels Ia Regulation and third countries Brussels Ia Regulation 54, 255 – Brussels Ia Regulation and soft law 255 – Brussels Ia Regulation and third countries 95 – jurisdiction under the Brussels Ia Regulation 72

Judicial assistance 31, 304 – judicial assistance treaties 48 Jurisdiction 39, 73, 81, 102, 118, 187, 245 – direct jurisdiction 38, 139 – extraterritorial jurisdiction 83 – indirect jurisdiction 38, 139 – residual jurisdiction 55

Colombia 213 Enforcement of foreign (court) judgments 15, 32, 38, 133, 148, 164, 182, 213, 214 Enforcement of foreign decisions see Enforcement of foreign (court) judgments EU membership – EU Members 282 EU Regulations on special proceedings 276, 282 European Neighbourhood Policy – EU Neighbourhood Policy ENP European Order for Payment Procedure 236, 244 European Rules of Civil Procedure 261 Greece 29

IT 233

Lis pendens 101, 121 Litispendence see lis pendens Lugano Convention 16, 46, 92, 133, 168 – Lugano Convention and Russia 186 – Lugano Convention and Ukraine 210 Multilateral 132, 243 – multilateral treaties 304 Reciprocity 30, 164, 215, 290 Recognition of foreign court decisions – recognition of foreign lis pendens 103, see recognition of foreign judgements Recognition of foreign judgments 23, 148, 274, 299 Russia 181 Soft law 49, 209, 265, 291, 293 Ukraine 191 Unidroit Principles of Transnational Civil Procedure – ALI 49, 209, 259, 274, 278, 293, 299 Unified Patent Court 71

331