Yearbook of Private International Law: Volume XX Yearbook of Private International Law Vol. XX - 2018/2019 9783504386528

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YEARBOOK OF PRIVATE INTERNATIONAL LAW

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sellier european law publishers

YEARBOOK OF PRIVATE INTERNATIONAL LAW VOLUME XX – 2018 / 2019

Founding Editors PETAR ŠARČEVIĆ † PAUL VOLKEN Editors ANDREA BONOMI Professor at the University of Lausanne

GIAN PAOLO ROMANO Professor at the University of Geneva

Associate Editor ILARIA PRETELLI Legal Adviser at the Swiss Institute of Comparative Law

Published in Association with SWISS INSTITUTE OF COMPARATIVE LAW LAUSANNE, SWITZERLAND

The Deutsche Nationalbibliothek lists this publication in the Deut­sche Na­tio­nalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.dnb.de. Verlag Dr. Otto Schmidt KG Gustav-Heinemann-Ufer 58, 50968 Köln Tel. +49 221 / 9 37  38-01, Fax +49 221 / 9 37  38-943 [email protected], www.otto-schmidt.de ISBN (print)  978-3-504-08014-3 ISBN (eBook)  978-3-504-38652-8

© 2020 by Verlag Dr. Otto Schmidt KG, Köln and Swiss Institute of Comparative Law, Lausanne All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior per­mis­sion of the publisher. The paper used is made from chlorine-free bleached materials, wood and acid free, age resistant and environmentally friendly. Printing and binding: Kösel, Krugzell Printed in Germany.

Advisory Board JÜRGEN BASEDOW Hamburg

HUANG JIN Beijing/Wuhan

GENEVIÈVE BASTID-BURDEAU Paris

THOMAS KADNER GRAZIANO Geneva

MICHAEL BOGDAN Lund

EVA LEIN Lausanne/London

SIR LAWRENCE COLLINS London

HANS VAN LOON The Hague

RUI MANUEL GENS DE MOURA RAMOS Lisbon/Coimbra

YASUHlRO OKUDA Tokyo

DIEGO P. FERNÁNDEZ ARROYO Paris

LINDA J. SILBERMAN New York

RICHARD FRIMPONG OPPONG Kamloops (British Columbia)

SYMEON C. SYMEONIDES Salem (Oregon)

LUKAS HECKENDORN URSCHELER Lausanne

Assistant Editors ALEXANDRA BECHEIKH Research Assistant, University of Lausanne

CORINNE MAMMINO Research Assistant, University of Lausanne

CHRISTINA BLANCHET Research Assistant, University of Lausann

RACHEL NGO NTOMP Research Assistant, University of Geneva

VITO BUMBACA Research Assistant, University of Geneva

Production Assistant FRANÇOISE HINNI Swiss Institute of Comparative Law

English Revision CHRISTOPHER BOOTH Research Assistant, University of Geneva

SHAHEEZA LALANI University of Paris

VICTORIA GARRINGTON Attorney-at-Law, Fribourg

HELEN SWALLOW Former Head of Editing Unit, DG TRAD, European Parliament

TABLE OF CONTENTS ________________

Foreword ......................................................................................................... xi Abbreviations ................................................................................................. xv Doctrine Jürgen BASEDOW Non-Recognised States in Private International Law ................................. 1 George BERMANN Rescuing the Federal Arbitration Act: The New Restatement on International Arbitration ........................................................................... 15 Diego P. FERNÁNDEZ ARROYO Denationalising Private International Law – A Law with Multiple Adjudicators and Enforcers ...................................................................... 31 Patrick KINSCH European Courts and the Obligation (Partially) to Recognise Foreign Same-Sex Marriages – On Orlandi and Coman ....................................... 47 Yasuhiro OKUDA New Rules on International Jurisdiction over Divorce in Japanese Courts......................................................................................................... 61 Hans VAN LOON Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work ......................................................................................................... 73 Ádám FUGLINSZKY Mandatory Direct Remedies against the Producer for Repair or Replacement in Private International Law ................................................ 95 Ilaria PRETELLI Provisional Measures in Family Law and the Brussels IIter Regulation 113 Brazilian Private International Law – Selected Issues Nadia DE ARAUJO / Daniela VARGAS / Marcelo DE NARDI The Procedural Hague Conventions and their Implementation in Brazil 149 Inez LOPES An Assessment of Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective .......................................................................... 171 Fabricio B. PASQUOT POLIDO Jurisdiction, International Legal Cooperation and Cross-Border Internet Disputes in Brazil ................................................................................... 189

Lidia SPITZ Recognition and Enforcement of Foreign Judgments in Brazil – A Current Overview ................................................................................ 221 Marcos Vinícius TORRES International Adoption in Brazilian Private International Law ............... 243 National Reports Alexander ABYSHKO The Recognition and Enforcement of Foreign Judgments in Russia in the Absence of Treaties – Current Practice ............................................. 265 Jerca KRAMBERGER ŠKERL The Recognition and Enforcement of Foreign Judgments in Slovenia – National Law and the Brussels I (Recast) Regulation ............................. 281 Julio César RIVERA JR. The Salient Features of the New International Commercial Arbitration Act in Argentina ..................................................................................... 315 Wenliang ZHANG Interim Reliefs in Chinese Private International Law ............................. 327 Court Decisions Adi CHEN Secularisation of Private International Family Law in Israel via Remarkable Supreme Court Judgments .................................................. 353 Florian HEINDLER Public Policy and Islamic Intestate Succession Law – On Case no. 2 ob 170/18s of the Austrian Supreme Court of Justice .................................. 377 Issey PARK Tidings from Korea – Developments in Private International Law during the 2010s ..................................................................................... 395 Forum Claudia CAVICCHIOLI Forum Shopping in International Litigation ........................................... 413 Katja KARJALAINEN Fragility of Cross-Border Adult Protection – The Difficult Interplay of Private International Law with Substantive Law ................................ 439 Patrick KEINERT Ipso Facto Clauses in International Contracts ........................................ 467

viii

Adeline MICHOUD The Exercise by U.S. Courts of their Extraterritorial Jurisdiction over Corporate Wrongs Claims – Overview and Perspectives ....................... 497 Lukas RASS-MASSON The Foundations of European Private International Family Law ........... 521 (Breaking) News from The Hague Andrea BONOMI / Cristina MARIOTTINI A Game Changer in International Litigation? – Roadmap to the 2019 Hague Judgments Convention ................................................................ 537 Index ............................................................................................................. 569

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FOREWORD _____________ Dear Readers of the Yearbook, We are proud to emphasize that twenty years have passed since the publication of the first volume of the Yearbook of Private International Law – twenty passionate years of unflagging commitment to the values of international coordination and multilateralism, to disseminating information across State lines, and to unfettered academic debate. Created in 1999, at the enlightened initiative of the late Petar Sarcevic, who was able to convince the Swiss Institute of Comparative Law and his coeditor Paul Volken to join him on this bold new venture, the Yearbook was then the first English-language periodical devoted exclusively to private international law. Other publications have blossomed since, confirming the importance and need to share research findings on a global scale in an area of law that does not tolerate national boundaries nor purely internal advancements. Sure, twenty years is a short spell if measured against the long history of our discipline and the centennial life of some of the most prestigious periodicals in our field: it is nevertheless notable, in this era of rapid and often breath-taking change. Indeed, the context of private international law has evolved significantly since 1999. Two hints make that abundantly clear: 1999 saw the adoption of the Treaty of Amsterdam, the first spark of what has been referred to as the “European conflict-of-laws revolution”. Two decades of unprecedented, sometimes frenzied, rush towards the regional unification of private international law rules followed, defying the initial scepticism and reluctance of some national observers. While the pace of the European lawmaking process may have recently experienced some hesitation, the long-lasting effects of this upheaval have nevertheless durably changed the face of our discipline, within as well as outside Europe. 1999 also marked the first draft of a global Hague Judgments Convention. Certainly, that attempt was met with suspicion in certain circles and countries, which precipitated its 2001 failure. However, the project regenerated from its ashes and produced two texts with a great potential: the Hague Choice of Court Convention of 2005 and, very recently, the Hague Judgments Convention, just adopted on 2 July 2019. A “last minute” contribution presenting this instrument has been included at the end of the volume, in our section “News from The Hague”, that has been exceptionally renamed to celebrate this achievement. Since its creation, the Yearbook has always been there to accompany and report on these important developments, as well as on other challenges that private international law is facing both on factual and methodological reasons: the growing awareness of the centrality of human rights, the blurring of

territorial boundaries in the era of new technologies, the globalization of exchanges, the struggle between the advances of party autonomy and the preservation of collective and state interests, the revival of the vested-rights theory under cover of the so-called “méthode de la reconnaissance”, and many more. Coming to the volume you hold in your hands, the Doctrine section is particularly rich for it has been conceived and set up as a sort of “birthday party”. Several “friends” of the Yearbook, including members of the Advisory Board and some of our most faithful contributors, offer their reflections on current and future challenges of conflict of laws. The result confirms, if needed, the irreducibility of our discipline to a purely national branch of law, in spite of an old-fashioned conception still prevailing in certain private international law handbooks. The centrality of the State belongs to the past. Thus, as Jürgen Basedow reports, the laws and judgments of entities that are not recognised as independent States under public international law are nonetheless often applied, and recognised, in other countries, although they may encounter insurmountable obstacles in certain sensitive areas. On a different note, Diego Fernández Arroyo shows that legal certainty and practical application in cross-border cases no longer hinge exclusively on States, but are rather largely ensured by a variety of “adjudicators and enforcers”, including private arbitrators and supranational organizations. The vitality of international arbitration is also evidenced through the recent adoption by the American Law Institute of a new Restatement focussed on the treatment of arbitration by U.S. courts, as reported by its main inspirer, George Bermann. The warning call by Hans Van Loon about the present difficulties confronting the International Commission of Civil Status (CIEC) and the need to preserve its acquis serves as a welcome reminder of the crucial role played by international cooperation, including in the area of personal and family law. In this same field, the growing influence of European principles, and in particular of human rights and European freedoms, is at the core of the Orlandi and Coman decisions, commentated by Patrick Kinsch. Other recent developments at the European and national level are discussed by Ádám Fuglinsky (mandatory direct remedies against the producer for repair or replacement), Yasuhiro Okuda (the new Japanese legislation on transnational divorces) and Ilaria Pretelli (interim measures and the Brussels II-ter Regulation). A special section is devoted to recent developments of private international law in Brazil. Some papers report on the significant progress brought about by the ratification and implementation in Brazil of several Hague Conventions, in both procedural and family law, including inter-country adoption. Other contributions discuss the controversial case-law of Brazilian courts, and the Brazilian legislation, on adjudicatory and prescriptive jurisdiction in crossborder internet disputes as well as the developments in the area of recognition and enforcement of decisions. No less profuse and diversified are the additional sections you are accustomed to finding in the Yearbook: the “National Reports” section echoes topics already mentioned, with a paper on international arbitration in Argentina, one on

provisional measures in China, and two papers on recognition and enforcement of judgments in Russia and Slovenia which, jointly read, show how important supranational legislation is to ensure legal certainty and create a common safety net for businesses and individuals. Recognition and enforcement are also at the core of the “Court Decisions” section, where a dyscrasia between the attitude of the Israeli Supreme Court and that of the Knesset allows Israeli residents to bypass religious obstacles to their non-orthodox family choices when it comes to marriage and divorce. On the other hand, national social cohesion, embodied by public policy, has hindered the application of Islamic inheritance law in Austria as well as the recognition in South Korea of a Japanese judgment having dismissed as time-barred an action for compensation by the families of victims of human rights violations perpetrated during the Japanese occupation. The “Forum” presents essays by young scholars on forum shopping in international litigation, including some ideas on how best to mitigate its evil ramifications, on the foundations of European Private International Family Law, where emphasis is rightly placed on the “unity” of family status across the EU, and on ipso facto clauses in cross-border insolvency, which lead the reader through a rare tour de force across the still little explored realm of comparative insolvency law. Andrea Bonomi

Ilaria Pretelli

Gian Paolo Romano

ABBREVIATIONS ________________

Am. J. Comp. L. Am. J. Int’l L. Arb. Clunet Comm. Comp. ECR I.C.L.Q. I.L.M. ibid. id. Int’l IPRax J. L. OJ PIL Q. RabelsZ Recueil des Cours

REDI Rev. Rev. crit. dr. int. pr. Riv. dir. int. priv. proc. Riv. dir. int. RIW RSDIE

Tech. this Yearbook Un.

American Journal of Comparative Law American Journal of International Law Arbitration Journal de droit international Commerce Comparative European Court Reports International and Comparative Law Quarterly International Legal Materials ibidem idem International Praxis des internationalen Privat- und Verfahrensrechts Journal Law Official Journal Private International Law Quarterly Rabels Zeitschrift für ausländisches und internationales Privatrecht Recueil des Cours de l'Académie de la Haye de droit international = Collected Courses of The Hague Academy of International Law Revista española de derecho internacional Review Revue critique de droit international privé Rivista di diritto internazionale privato e processuale Rivista di diritto internazionale Recht internationaler Wirtschaft Revue suisse de droit international et européen = Schweizerische Zeitschrift für internationales und europäisches Recht Technology Yearbook of Private International Law University

DOCTRINE ________________

NON-RECOGNISED STATES IN PRIVATE INTERNATIONAL LAW Jürgen BASEDOW*

I. II.

IV.

Introduction: Irregular Relations between States Non-Recognised State Power in Private International Law A. The Normative Approach B. The Factual Approach C. Comparative Assessment Inter-German Conflict-of-Laws A. The Legal Situation of Germany Prior to 1990 B. Choice of Law 1. Localisation 2. Citizenship C. Recognition and Enforcement of Judgments 1. Conditions for Recognition 2. Currency Issues D. Forum necessitatis Conclusion

I.

Introduction: Irregular Relations between States

III.

Private international law is about the coordination of different legal systems. Its tools are rules on jurisdiction of domestic courts, on the law to be applied by them, on the recognition and enforcement of foreign judicial decisions, and on the cooperation between judicial authorities of the various States. These issues arise between jurisdictions of different States. The existence of such States appears to be a foundation of private international law. * Professor Dr. Dr. h. c. mult., LL.M. (Harvard Univ.); Former Director of the Max Planck Institute for Comparative and International Private Law; Member of the Institut de droit international. This article is based on a lecture given on 13 July 2018 at the Conference on “The Legal Position of Non-Recognized (or Little-Recognized) States in the Post-Soviet Space Under International Trade Law and in Private International Law and International Civil Litigation” which was organised at Bordesholm, Schleswig-Holstein, by the Institute of East European Law of the University of Kiel.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 1-14 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Jürgen Basedow If we look around in the world we can, however, discern a number of political entities whose quality as States is doubtful. Some are considered by neighbouring States as forming part of their territory in accordance with their constitutions. Consequently, these entities, usually full-fledged States and members of the international community, recognise such entities as renegade provinces and not as States. The relations between both entities are somehow irregular. This irregularity often affects the relations between the separatist entities and third States as well. Examples of entities with such irregular relations are numerous. In Africa we refer to Somaliland, considered part of Somalia by other countries. Other similar examples include Taiwan, Palestine and North Korea. In Europe, Northern Cyprus, Kosovo, the districts (“People’s Republics”) of Donetsk and Luhansk in eastern Ukraine, Nagorno-Karabakh in Azerbaijan, Transnistria in the Republic of Moldova, or Southern Ossetia and Abkhazia in the Republic of Georgia belong to this group. If we look back in history, similar situations existed for the entire Soviet Union from the October Revolution until the 1930s1 and in East Germany from the foundation of the German Democratic Republic in 1949 until 1973. Many of the territorial entities on this list are or were equipped with State territory, a State population and State power, i.e. the prerequisites of statehood under public international law. They are usually designated as de facto regimes but they are not recognised as States for reasons resulting partly from constitutional law and partly from public international law. Irregular situations have also arisen where a State has failed or fallen apart, giving rise to new entities that create their own legal systems, such as the Islamic State in Iraq and Syria.2 One should moreover think of annexed territory that under public international law is part of another State; recall the case of East Jerusalem annexed by Israel in 1980, or the Western Sahara occupied and claimed since 1957 by Morocco. The incorporation of the Crimean Peninsula into the Russian Federation in 2014 is equally considered as an annexation in many countries, although it was prepared by a referendum allegedly based on the principle of self-determination. In these territories as well, the exercise of sovereign power by the annexing State is considered illegal under public international law. What are the consequences of such irregular relations for private international law? The following remarks will first tackle the question of whether irregularity under public international law or constitutional law is relevant for private international law at all. I shall thereafter look at the matter from a German perspective and report on the situation between the two German States as reflected by case law and legal literature in the years between 1949 and 1990. This article sheds light on the multi-faceted legal problems that emerge in this context. Moreover, it conveys an impression of how private rights can be served in a situation that is characterised by non-recognition under public international law and intoxicated by stark political tensions. 1 On the successive recognition of the USSR by various countries see A.N. MAKAROV, Die Anerkennung der Sowjetregierung durch die Vereinigten Staaten, Zeitschrift für öffentliches Recht und Völkerrecht (ZaöRV), Vol. 4, 1934, p. 4 et seq. 2 See the recent article by N. YASSARI, Staatszerfall und Internationales Privatrecht, RabelsZ, Vol. 82, 2018, p. 944 et seq., with further references.

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Non-Recognised States in Private International Law

I.

Non-Recognised State Power in Private International Law

Can rules and decisions emanating from a political entity that is not recognised as a State be given effect? Or is the classification as “law” confined to rules enacted by a State recognised as such by the government of the forum? An analogous question can be asked with regards to traditional and administrative decisions originating in a non-recognised political entity. In other words: is the authority of foreign rules and decisions dependent on the nature of the emanating entity as a State? A comparative survey reveals two basic approaches to this question, one normative and the other factual. A.

The Normative Approach

An illustrative example for the normative approach is provided by a 1986 decision of a lower court in Neumünster, in northern Germany. The court had to decide on an application to appoint a guardian for a twenty-year old man, allegedly of Palestinian nationality. According to the application, the young man was still underage, according to Palestinian law. According to the German conflict rule of Article 7 of the Introductory Law of the Civil Code (EGBGB), it was indeed the national law that would have governed the appointment of a guardian and other aspects of guardianship in this case. But the court pointed out that Palestinian citizenship was not recognised in Germany, because Palestine was not recognised as a State at the time in question. Therefore, the court considered the young man as a stateless person. In accordance with the conflict rule of Article 5 para. 2 of the EGBGB, the Court consequently applied the law of the young man’s habitual residence, i.e. German law, and found that under this law he was already of age and therefore no longer a recognisable subject of guardianship. The application was thus dismissed.3 The normative approach suggests itself where under private international law the nationality of a foreigner is the relevant connecting factor for issues of personal status. Since nationality is always determined by the law of the country whose citizenship is at issue4 one might in fact conclude that a country not recognised by the forum State cannot bestow its citizenship on people. Another and more general argument in favour of the normative approach is of a constitutional kind and has often been voiced by English courts. They have usually considered certificates issued by the Foreign Office on the position of the British government, Amtsgericht Neumünster, 16 December 1986, in Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts (IPRspr), 1986, No. 108; for a French translation see Rev. crit. dr. int. pr., Vol. 77, 1988, p. 675, with annotations by J. VERHOEVEN. 4 This principle has been stated as flowing from international law by the Court of Justice of the European Union, see ECJ, 7 July 1992, C-369/90, Micheletti v. Gobierno de Cantabria, ECLI:EU:C:1992:295, para. 10; ECJ, 2 March 2010, C-135/08, Rottmann v. Bayern, ECLI:EU:C:2010:104, paras. 39, 48. 3

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Jürgen Basedow vis-à-vis foreign States, as conclusive. Thus, it was held in the 1920s by the House of Lords that: “if our sovereign recognises and expresses the recognition through the mouth of his minister that another person is a sovereign, how could it be right for the Courts of our sovereign to proceed upon an examination of that person’s supposed attributes to examine his claim and, refusing that claim, to deny to him the comity which their own sovereign had conceded.”5 The normative approach establishes constitutional harmony as between the various institutions of a country, in particular, between the executive and the judiciary. But it does not take account of the differences in motivation which determine the positions taken by the government, on the one side, and the views and rights of the private parties to the case pending in court, on the other. The government’s view will usually result from considerations of political expedience. On the contrary, courts dealing with cross-border private relations have to balance private rights and interests; in private international law, in particular, they aim for the application of the law that is most closely related to the pending case and therefore in some way foreseeable for the parties. The refusal to apply the law of a non-recognised State may amount to serious injustice and has compelled English courts to accommodate the peculiar factual situation in the non-recognised State with rather artificial legal constructions. In the Zeiss case, the English courts took the view that East Germany, even after the German Democratic Republic had been established, was still considered as the Soviet Zone and that the Soviet government had simply delegated its authority to the East German State. Thus, the laws of East Germany were given effect, but as pseudo-Soviet laws and not as East German laws.6 Similar arguments are contrived and, moreover, not available everywhere although the situation of the private parties subject to the law of the non-recognised entity is similar. B.

The Factual Approach

A more realistic approach that considers the private interests involved has gained more and more ground. From a comparative perspective, it appears to prevail nowadays. This factual approach can be traced back to the 19th century when the US Supreme Court made a general statement on the matter. During the US Civil War, the state of Texas, under a rebel government, had joined the alliance of the Southern Confederate States. In order to raise funds for the conduct of war, the state had House of Lords, per LORD DUNEDIN, Duff Development Company Ltd. v. Government of Kelantan, 1924, AC 797 (HL), p. 820; for a broader analysis see Z. NEDJATI, Acts of unrecognized governments, I.C.L.Q., Vol. 30, 1981, p. 388-415, para. 9, p. 391 et seq. 6 See in particular House of Lords, Carl Zeiss-Stiftung v. Rayner & Keeler Ltd., 1966, 2 All ER 536, 548 (HL): “We recognize [the East German legal acts] not because they are acts of a sovereign state but because they are acts done by a subordinate body which the USSR set up to act on its behalf.” 5

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Non-Recognised States in Private International Law intended to sell land. For that purpose, it had enacted a statute repealing certain restrictions on the alienation of state property. After the end of the Civil War, the state of Texas, then under a loyal government again, had repealed that statute and claimed restitution of such property from a purchaser. The US Supreme Court had to decide on the validity of the repealed statute. The court stated that: “the legislature of Texas, at the time of the repeal, constituted one of the departments of a state government, established in hostility to the constitution of the United States. It cannot be regarded, therefore, in the courts of the United States, as a lawful legislature, or its acts as lawful acts. And yet, it is a historical fact that the government of Texas, then in full control of the State, was its only actual government; and certainly if Texas had been a separate state, and not one of the United States, … its acts, during the period of its existence as such would be effectual, and in almost all respects, valid. … It may be said, perhaps with sufficient accuracy, that acts necessary to peace and good order among citizens, such for example, as acts sanctioning and protecting marriage and the domestic relations, governing the course of descents, regulating the conveyance and transfer of property, real and personal, and providing remedies for injuries to person and estate, and other similar acts, which would be valid if emanating from a lawful government, must be regarded in general as valid when proceeding from an actual, though unlawful government …”.7 What matters, according to the US Supreme Court, is that the act in question proceeds from an “actual government” and that it belongs to a category of acts which are “necessary to peace and good order among citizens”. The first criterion – the actuality of the government – grants a certain discretion to the judge. While there can hardly be any doubts about the actual governmental capacity of North Korea or Taiwan, doubts may arise with regard to the Peoples’ Republics of Donetsk and Luhansk in eastern Ukraine, and even more so in respect of the so-called Islamic State. The appreciation of the “actual” governmental power also allows for a distinction between the recognition of decisions taken by the administration or the judiciary in the territory at issue, and the application of its laws in the forum State. The existence of a court or authority that is able to make a decision in itself indicates the existence of actual government while the enactment by a would-be government in the foreign entity does not necessarily prove its ability to enforce those laws. The second criterion employed by the Supreme Court, i.e. a necessity of certain acts for peace and good order among citizens, allows for effect to be given to the private law enacted by the foreign entity in question. At the same time, it would exclude those acts of the foreign government which tend to strengthen its own unlawful power or which are directed against the forum State.

7

United States Supreme Court, State of Texas v. White, 74 US 700, p. 732 et seq.,

1868.

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Jürgen Basedow This distinction has received further support by the International Court of Justice in its advisory opinion on Namibia. The country, a former German colony, had been mandated, after World War I, to the United Kingdom, under administration by South Africa. In 1966, the United Nations assumed direct responsibility, but South Africa maintained a de facto rule. It was challenged in the International Court of Justice. While the court declared the administration of Namibia by the government of South Africa as illegal and invalid, it also pointed out that “this invalidity cannot be extended to those acts, such as, for instance, the registration of births, deaths and marriages, the effects of which can be ignored only to the detriment of the inhabitants of the territory.”8 In a course taught at the Hague Academy of International Law, the Belgian Professor Joe VERHOEVEN has explained on the basis of a thorough comparative analysis of national case law that the first reflex of judges confronted with the law of irregular States has often been the non-recognition of foreign law emanating from the non-recognised foreign State, but that most courts have ultimately embraced the application of an effective law, irrespective of the recognition by the forum State.9 Over time, the factual approach has been approved by more and more jurisdictions. Swiss courts were the forerunners in this respect. In 1924, the Federal Court of Switzerland held that the non-recognition of the Soviet government had only the effect of bereaving that government from representing Russia in Switzerland in matters of both public and private law, but that this pact did not deprive Russian (or Soviet) law from otherwise producing its effects.10 In France as well, the factual approach was accepted in a case arising from the Russian October Revolution. Many years later, in 1973, the French Cour de Cassation was asked to apply decrees on the nationalisation of private property issued by the Soviet government in 1918, a time when France had not yet recognised the Soviet Union. The Cour de Cassation held that the lack of recognition of a foreign government does not permit the French judge to ignore private law regulations adopted by that government.11 Legal consequences for States of the continued presence of South Africa in Namibia (South West Africa) notwithstanding Security Council Resolution 276, 1970, advisory opinion, International Court of Justice (ICJ) Reports, Vol. 16, 1971, para. 125, p. 56. 9 J. VERHOEVEN, Relations internationales de droit privé en l’absence de reconnaissance d’un état, d’un gouvernement ou d’une situation, Recueil des Cours, Vol. 192, 1985, p. 9-232, p. 134. 10 Bundesgericht (BG), 10 December 1924, Entscheidungen des Bundesgerichts (BGE) 50 II 507, p. 512; see J. VERHOEVEN, ibidem, p. 111; see also in the present literature A. SCHNYDER / M. LIATOWITSCH, Internationales Privat- und Zivilverfahrensrecht, 3rd ed. Zürich, 2011, p. 87, para. 242. 11 Cour de Cassation, 3rd May 1973, Georges Stroganoff-Scherbatoff v. Société Bensimon et Cie et Maurice Bensimon, Rev. crit. dr. int. pr., Vol. 64, 1975, p. 426 with annotations by Y.L. LOUSSOUARN, approving that as the only realistic outcome. 8

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Non-Recognised States in Private International Law In Germany, the Federal Court had to decide on issues concerning a limited partnership established in Alsace during the German occupation of that part of France in World War II. The German occupational power had introduced German company law in Alsace which, according to the allegations of one party, violated the Hague Convention of 1899 on the law of war.12 Therefore, the party asserted that the claims and dispute should be governed by French company law which had been reintroduced in Alsace after World War II. The Federal Court, however, referred to the basic principle governing the conflict of laws which is the search for the centre of gravity, proximity or the closest relation. This principle should govern not only a conflict between two legitimate legal orders, but also a conflict between a legitimate but ineffective legal order and another legal order that is illegitimate under international law but effectively governs legal transactions.13 The court considered that the contrary view, i.e. the normative approach, would lead to a rigid application of the law enacted by the legitimate legislature which would inevitably entail the need to retroactively adjust legal relations which have essentially been completed or terminated, to legal principles which were not contemplated at the time of the transaction. In Germany, the factual approach can nowadays be considered as generally accepted.14 C.

Comparative Assessment

When assessing the two approaches, we should take account of the growing significance of human rights in all areas of the law.15 The constitutional harmony ensured by the normative approach is a State-centred argument. It values the State and the consistency of its operation more than the fundamental rights of the individual. 70 years after the Universal Declaration of Human Rights which has prompted the development of several binding instruments and a huge body of case See articles 42 et seq. of the Annex to the Convention (II) with respect to the laws and customs of war on land, done at the Hague on 29 July 1899, text as amended available at on the website of the International Committee of the Red Cross. 13 Bundesgerichtshof (BGH), 26 September 1966, Neue Juristische Wochenschrift (NJW) 1967, p. 36; also in Die deutsche Rechtsprechung auf dem Gebiet des Internationalen Privatrechts (IPRspr.) 1966/1967, No. 14, p. 51; for a broader discussion and further references see H.-J. SONNENBERGER, Anerkennung der Staatsangehörigkeit und effektive Staatsangehörigkeit natürlicher Personen im Völkerrecht und im internationalen Privatrecht, Berichte der Deutschen Gesellschaft für Völkerrecht (BerDtGesVR), Vol. 29, 1988, p. 9-36, p. 22 et seq. 14 For numerous decisions to this effect see G. KEGEL, Art. 7, para. 140, in H. TH. SOERGEL/ W. SIEBERT (eds), Bürgerliches Gesetzbuch, vol. 8 - Einführungsgesetz, 11th ed. Stuttgart 1983; G. BEITZKE, Internationales und interlokales Privatrecht, in Festschrift für Nipperdey zum 60. Geburtstag, München 1955, p. 41-57, at 48; for the present literature see J. VON HEIN, Art. 5 EGBGB, para. 17, Münchener Kommentar zum Bürgerlichen Gesetzbuch, Vol. 11, 7th ed. München 2018. 15 With regard to private law see A. NUSSBERGER, Die Europäische Menschenrechtskonvention und das Privatrecht, RabelsZ, Vol. 80, 2016, p. 817 et seq. 12

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Jürgen Basedow law drawing limits to State power, the Hegelian priority of the State over the individual’s fundamental rights can no longer be approved in an unqualified way. All in all, the factual approach appears to be superior as long as only private interests are involved. This is the case in many private law disputes. It would be different where the non-recognised political entity itself initiates a lawsuit in the forum State, seeking legal remedies in its own favour. However, as long as only private parties, who are subject to the factual rule of the non-recognised entity and its law, are involved, that law should be applied in the courts of the forum State.

III. Inter-German Conflict-of-Laws The factual approach does not solve all problems, neither for the choice of the applicable law nor for the recognition of decisions of the foreign entity and for the jurisdiction of domestic courts. This can be explained against the backdrop of the legal situation in Germany prior to the re-unification of the country in 1990. A.

The Legal Situation of Germany Prior to 1990

After the unconditional surrender of the German Empire in 1945 the country was divided into four occupation zones. In 1949, the American, British and French zones were merged into the Federal Republic of Germany while shortly afterwards the Soviet zone was converted into the German Democratic Republic. Over time, both German States developed their own legal systems. Until 1973, i.e. over a period of almost 25 years, West Germany and the Western allies did not recognise East Germany as a State. This situation ended when East and West concluded the Treaty on the foundations of their mutual relations, the Grundlagenvertrag, in 1973.16 The Treaty referred to the existence of “two German States”, but explicitly kept open the “national question”. The West German government declared that the Treaty did not deal with citizenship, while the East German government declared that the Treaty would facilitate the regulation of citizenship issues. From then on, the West German position that was clearly spelt out in the proceedings before, and in the judgment of, the Constitutional Court,17 was as follows. First, the German Reich had not perished in 1945 but existed until a future peace treaty was concluded. Second, two States were in existence on German territory which, third, were not foreign countries to each other. What were the consequences of this Treaty for private international law? Very few issues were

16 Vertrag über die Grundlagen der Beziehungen zwischen der Bundesrepublik Deutschland und der Deutschen Demokratischen Republik, of 21 December 1972, Bundesgesetzblatt (BGBl.), 1973-II, p. 421. 17 Bundesverfassungsgericht (BVerfG), 31 July 1973 in Entscheidungen des Bundesverfassungsgerichts (BVerfGE) 36, 1.

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Non-Recognised States in Private International Law decided by specific legislation;18 most problems were left to the courts. Their answers were rather clear for choice of law, but less so for procedural issues. B.

Choice of Law

1.

Localisation

Since the factual approach allows for the application of the law of a nonrecognised entity, there is no fundamental objection to the application of the forum’s choice of law rules when they designate the law of the non-recognised entity. This is true in particular where the conflict rules employ connecting factors which refer to a certain local connection between a fact situation and a territory, for example habitual residence, the place of wrong in tort law, the place of performance in contract law or the location of an asset for the assessment of proprietary rights. After 1945, West German courts accordingly developed what was called “inter-zonal private law” or “inter-local private law” for inter-German private law relations, adapting the conflict rules of German private international law.19 An example is provided by a dispute between two West German residents concerning the repayment of a loan secured by a mortgage on a property located in the Soviet Sector of Berlin. The loan had been awarded in 1940 when Germany still had a unified legal system. In the absence of an explicit or tacit choice of law contained in the loan agreement, the court held that the contract was governed by the law designated by the hypothetical intention of the parties which the court considered, in accordance with settled case law, to be the centre of gravity of the obligation at the time when the divergence of the laws emerged. For a loan secured by a mortgage, the court identified the location of the property as the centre of gravity of the loan agreement and consequently decided that the law of the Soviet Sector of Berlin was applicable.20 Of course the application of a law other than the law of the forum is always subject to the public policy exception. 2.

Citizenship

Things are more complicated with regard to personal status, to family law and to the law of succession. In these areas, citizenship played a significant role as a connecting factor in Germany; this is still the case to the extent that German

On those specific laws see U. DROBNIG, Interzonale Kollisionsnormen in der Gesetzgebung Deutschlands, RabelsZ, Vol. 19, 1954, p. 463 et seq. 19 See F. KORKISCH, Einleitung – EGBGB, in Staudingers Kommentar zum Bürgerlichen Gesetzbuch, 10./11.ed., Berlin, 1970, para. 109, with many references. Cases dealing with the “inter-zonal” private law and collected by U. DROBNIG, have been published in Sammlung der deutschen Entscheidungen zum Interzonalen Privatrecht, Tübingen 19561971. 20 Bundesgerichtshof (BGH), 13 March 1955, NJW, 1955, p. 827 et seq. 18

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Jürgen Basedow conflict rules have not been superseded by conflict rules of the European Union.21 The difficulties arising in this area are due to the fact that the Law on German Citizenship kept its legal force in both parts of Germany.22 Even when East Germany, years later, promulgated a law on the citizenship of the German Democratic Republic, West Germany considered the residents of East Germany as its own citizens. Therefore, the connecting factor of nationality did not distinguish the inhabitants of the German Democratic Republic from those of the Federal Republic of Germany; due to the declaration made by the West German government in the context of the Grundlagenvertrag of 1973, this did not change until German reunification. Thus, an additional connecting factor was needed to dissolve the stalemate. But which one? One possibility would have been to consider the persons in question as having a double nationality, i.e. the one of the Federal Republic of Germany and the one of the German Democratic Republic which had enacted a statute on citizenship of its own. As a consequence, the citizenship of the West would have prevailed in West German courts, in accordance with Article 5 para. 2 of the EGBGB. In the alternative, nationality could have been disregarded altogether since it was common to all Germans and non-distinctive. This was the approach preferred in West Germany; as a substitute connecting factor, some courts initially referred to domicile while the subsequent legal development turned to habitual residence.23 The outcome of the two approaches is the same in most cases; it differs, however, where the person at issue is habitually resident in a third State. The proposal made by DROBNIG after the 1973 Grundlagenvertrag to refer to the social affiliation of a person to East Germany as a “de facto” citizenship would have solved this problem.24 The leading German case involved the marital property regime of a couple married in East Germany that later relocated to the West. The marital property regime of the original German Civil Code, which was clearly discriminatory against women, had been substituted in East Germany by the legal regime of the separation of assets. West Germany, for its part, had introduced the community of acquisitions as the default legal regime. Under German private international law, the national law of the spouses at the time of marriage determined their marital property regime, the lex causae, which thus became immutable for the whole time of their marriage. The immutability concerns the lex causae as compared with other national laws but does not exclude the application of subsequent amendments of that law. The Federal Court decided that for refugees from East Germany the 21 As amended in 1986 the German private international law still referred to the law of a person’s citizenship in many situations; in the meantime, the legislative competence for private international law has been transferred to the European Union which has issued conflict rules based upon habitual residence for divorce and personal separation, for marital property regimes and for succession. 22 See H.G. FICKER, Grundfragen des deutschen interlokalen Rechts, Berlin and Tübingen, 1952, p. 26 et seq. 23 See F. KORKISCH, (note 19), Einleitung, para. 112, with many references. 24 For this proposal see U. DROBNIG, Der “Grundvertrag” und die innerdeutschen Zivilrechtsbeziehungen, RabelsZ, Vol. 37, 1973, p. 485 et seq.

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Non-Recognised States in Private International Law same principle of immutability applied, however with regards to the regime of the territory where the spouses had had their habitual residence at the time of the celebration of marriage.25 Apparently, no cases have come to the courts where a habitual residence could not be ascertained. In such a situation the simple residence would probably have been applied by German courts in those days. At present, a stark tendency towards the admission of party autonomy is perceptible in many areas covered by regulations of the European Union on private international law. This tendency might also support a solution that enables the person at issue to select an affiliation and thereby choose between the two legal systems existing in his or her home country. C.

Recognition and Enforcement of Judgments

The constitutional claim of national unity has little weight when it comes to the effects of judgments from the other part of the country. As a matter of logic, such judgments should have the same effect in all parts of the nation. However, one cannot disregard the lack of a central judicial authority that prevents the two jurisdictions from drifting apart. Nor is it possible to turn a blind eye to the different function of the judiciary and to the lack of independence of the courts that may be perceptible in the other part of the country. But should their judgments then be put on par with foreign judgments? 1.

Conditions for Recognition

The development of the West German case law vis-à-vis East German judgments was not very clear and oscillated between the two extremes.26 In the early years, the private law including the law of civil procedure in East and West still the same; new codifications were enacted in the East only from the mid-1970s onwards. Thus, West German courts usually had no difficulty in giving effect to East German judgments; they were basically considered as German decisions. The special enforcement procedure for foreign decisions (Exequatur) under § 722 et seq. of the Code of Civil Procedure was not applied to East German judgments.27 While the courts usually referred to the need for recognition of an East German judgment, they did not strictly apply the pertinent rule of § 328 of the Code of Civil Procedure that sets forth the conditions for such recognition. Among the requirements listed in that provision, the Federal Court highlighted the significance of the public policy reservation while explicitly excluding 25 Bundesgerichtshof (BGH), 21 June 1963, Entscheidungen des Bundesgerichtshof in Zivilsachen (BGHZ), Volume 40, 32, p. 35 et seq. 26 For a succinct report in hindsight see D. MARTINY, in Handbuch des Internationalen Zivilverfahrensrechts, Volume III/1, Tübingen 1984, para. I/59-62. 27 See for example Oberlandesgericht (OLG) Hamm, 28 October 1954, NJW, 1955, p. 67 with further references.

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Jürgen Basedow a review of the jurisdiction of the East German courts and a check of reciprocity.28 Put another way, the West German courts employed the recognition requirement only as “a safety valve” that allowed the rejection of East German decisions which were grossly unfair either in terms of their substance or the proceedings from which they resulted. Thus, West German Courts refused to recognize East German decisions in family matters where such decisions were exclusively based on political considerations. For example, an East German decision awarding the custody of a child to the father residing in the East was rejected since it was exclusively motivated by the mother’s illegal escape to the West: conduct threatened with criminal punishment in East Germany under the heading of “desertion from the Republic” (Republikflucht).29 2.

Currency Issues

The enforcement of money judgments, although in general easily available, was often ineffective because of currency regulations. East German courts generally provided for payment in the currency of the German Democratic Republic, the eastern mark. West German courts were basically prepared to enforce such decisions.30 However, the importation of eastern marks into East Germany was prohibited by East German regulations. In the field of maintenance obligations, many debtors would therefore pay the instalments in eastern marks into blocked or frozen bank accounts which were of no avail to the creditor in the East. Where the judicial authorities had to proceed with the execution of the East German judgment, the West German courts, for practical reasons, allowed for the enforcement of maintenance awards in West German currency on the basis of the market exchange rate which was approximately 1 DM (West) for 4 eastern marks, while the official exchange rate as applied by East German authorities was 1:1. Thus, a West German debtor was discharged by payment in accordance with the market exchange rate (1:4) under § 244 of the Civil Code (BGB).31 Since the West German execution authorities would transfer only the amount paid in DM (West), the East German creditor would receive this amount converted on a 1:1 basis into eastern marks. This was only ¼ of what he or she was entitled to receive under the East German judgment. 28 Bundesgerichtshof (BGH), 9 May 1956, NJW, 1956, p. 1436, 1437; see also D. MARTINY (note 26), para. I/1293. 29 Oberlandesgericht (OLG) Hamm, 6 July 1960, Recht in Ost und West, 1961, p. 258; D. MARTINY, (note 26), para. I/1112. 30 See e.g. Oberlandesgericht (OLG) Hamm, 28 October 1954, NJW, 1955, Vol. 67, p. 68. 31 After the introduction of the Euro, § 244 BGB has the following wording in English: “(1) If a money debt stated in a currency other than the euro is payable within the country, then payment may be made in euros unless payment in the other currency has been expressly agreed. (2) Conversion occurs at the rate of exchange in effect in the place of payment at the time of payment.”

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Non-Recognised States in Private International Law Where, conversely, a maintenance creditor was resident in West Germany and the debtor was in the East, a West German maintenance judgment was often refused recognition in the East because of the creditor’s prior illegal escape from East Germany. Thus, over the years, a large number of unenforceable money awards accumulated, especially in maintenance disputes. It was only after the 1973 Grundlagenvertrag that both German States could agree upon a clearing procedure in accordance with a protocol supplementing that Treaty.32 D.

Forum necessitatis

The non-recognition of a judgment from the other part of the country may deprive the persons involved of the judicial protection they are entitled to receive. In such cases, it is therefore necessary to allow proceedings to be conducted in a domestic court even where the rules on jurisdiction would not otherwise permit such a lawsuit. This is a case of a forum necessitatis that is not different from private international law in general. Some statutes specifically provide for such a forum,33 but regardless of a pertinent provision in positive law it flows from the human right to legal protection and is a requirement of justice.34

IV. Conclusion Several relations between States and other political entities in Asia, Africa and Europe may be designated as irregular. While the non-recognition of an entity by another State is certainly relevant for political relations and also for public international law, it is not a categorical impediment to the application of the private law of the non-recognised entity in the courts of a State whose government does not recognise that entity. This appears to be the prevailing, although not uncontested, view worldwide. It should also govern the numerous extant relations referred to above. In several respects, these relationships are similar to the one between the German Democratic Republic and the Federal Republic of Germany prior to the German reunification in 1990. From the development of the West German case law, it follows that the rules on private international law provide guidance for the relationship between two States belonging to the same nation. It is, in particular, the connecting factor of citizenship that may provide problems; it should be

Cf. U. DROBNIG, (note 24), p. 496 et seq. Such provisions are contained in the acts on private international law of Belgium and Switzerland, as well as in various regulations of the European Union, see the references in J. BASEDOW, Droits de l’homme et droit international privé – Human rights and private international Law, in INSTITUT DE DROIT INTERNATIONAL, Annuaire, Vol. 77-I, 2016-2017, p. 391-453, p. 415 et seq. with further references. 34 See J. BASEDOW (note 33), p. 415 et seq. with further references. 32 33

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Jürgen Basedow substituted by habitual residence or by a social affiliation as a kind of de facto citizenship. When it comes to the recognition and enforcement of judgments from the other part of the country, the situation is less unambiguous. While the West German courts tended to give effect to East German decisions under conditions that were more generous than those established for the recognition of foreign judgments, there is no central state authority for both parts of the country and the views on the role of courts sometimes differ widely. Thus, particular attention has to be given by the recognising court to the respect of fundamental procedural rights of the parties in the court of the other jurisdiction and to the substantive values applied by that court. Respect for the laws and decisions, originating in the other part of the country, becomes a much more delicate question where deviating regulatory policies are pursued, for example in the field of expropriation, market regulation and competition, or currency. In these areas, the political dimension of the antagonism of the systems may become much more relevant and will often compel domestic courts to disregard legal provisions and decisions originating in the other part of the country.

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RESCUING THE FEDERAL ARBITRATION ACT THE NEW RESTATEMENT ON INTERNATIONAL ARBITRATION George A. BERMANN*

I. II. III.

VII.

Introduction Preemption of State Law Enforcement of the Agreement to Arbitrate A. Grounds for Defeating Enforcement of an Arbitration Agreement and Authority to Address Them 1. Gateway v. Non-Gateway Issues 2. Kompetenz-Kompetenz 3. Separability 4. Delegation of Gateway Issues B. Means of Enforcing Agreements to Arbitrate C. Procedural Aspects of an Action to Enforce an Agreement to Arbitrate Judicial Involvement in an Ongoing Arbitration Post-Award Relief in National Court A. The Recognition and Enforcement of Awards 1. Recognition and Enforcement of Foreign Convention Awards 2. Recognition and Enforcement of U.S. Convention Awards 3. Recognition and Enforcement of Non-Convention Awards B. The Annulment of Awards C. The Preclusive Effect of Prior Determinations D. Procedural Aspects of an Action to Enforce an Arbitral Award Investor-State Arbitration A. Non-ICSID Convention Arbitration B. ICSID Convention Arbitration Conclusion

I.

Introduction

IV. V.

VI.

The American Law Institute (ALI), which will celebrate its centenary in 2023, has for decades been publishing Restatements of the Law in fields in which the law is Professor, Columbia University, New York; Director, Center for International Commercial and Investment Arbitration; Reporter of the Restatement of the U.S. Law of International Commercial and Investor–State Arbitration. *

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 15-30 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

George A. Bermann uncertain, inconsistent, and on occasion even incoherent. With that in mind, it is unsurprising that the principal fields of law that have historically been the subject of a Restatement are those dominated by state common law. The law in state law fields is apt to differ from one state to another, necessarily producing discrepancies that may or may not be justified. At the same time, the law in common law fields – which by definition is judge-made – is not codified, making it difficult to ascertain, especially since judicial decisions in the common law tend to be narrowly factbased. That is why the paradigmatic subjects of U.S. Restatements have been state common law fields like contracts, tort, property, and even conflict of laws, none of which is governed at the federal level or by statute. Against this background, it is actually remarkable that the ALI decided to commission a Restatement on international arbitration, which is principally governed at the federal level and is, at least nominally, based on federal legislation. In fact, however, the U.S. law of international arbitration, notwithstanding these features, is uncertain, inconsistent, and on occasion even incoherent. Much of the blame lies not with the courts, but rather with Congress, which has not meaningfully updated the Federal Arbitration Act (FAA) since its enactment in 1925, close to a century ago. In fact the main purpose of the FAA back then was not to regulate arbitration in the United States in any meaningful way, but simply to overcome traditional judicial hostility to arbitration by guaranteeing that arbitration agreements, unless invalid as a matter of contract law, will be enforced. Apart from setting out the means by which courts may enforce agreements to arbitrate and establishing the grounds on which they may set aside awards, the FAA is largely silent. The only substantial amendments that have been made to the FAA since its enactment are the additions of a Chapter Two and Three, implementing the New York and Panama Conventions, respectively, leaving FAA Chapter One to govern domestic arbitration and awards. Despite the urgent need for new federal legislation, it is unlikely that the FAA will be seriously amended anytime soon, much less replaced by a new statute. Reform of the U.S. law of international arbitration is far from a priority for the U.S. Congress, and it is unlikely to become one. That circumstance makes a Restatement all the more opportune. Fortunately, the Restatement, having been unanimously approved by the full membership of the ALI in May 2019, is now final and official. The principal audience of a Restatement is the judiciary itself, the objective being to provide courts with rules of decision on matters in which the law is unclear, inconsistent or unsettled. Restatements also fill gaps in the law. Restatement provisions may be cited by courts when taking a position that a Restatement reflects, as well as by counsel if they are advantageous to client’s position. That said, Restatements are not in themselves law, much less binding on the courts. They do not even remotely purport to override legislation. Indeed, nothing in a Restatement may contradict a clear provision of federal legislation or an unambiguous ruling of the U.S. Supreme Court. It would not be inaccurate to characterize Restatements as forms of “soft law,” albeit powerful ones. The fact remains that the drafters of a Restatement enjoy considerable freedom. They are not required to adopt the prevailing view on any legal issue; they may adopt a distinctly minority opinion among the courts and even, in extreme circumstances, take 16

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The New Restatement on International Arbitration a position that has little if any case law support. To that extent, the term “Restatement” is something of a misnomer. Because principally addressed to courts, the Restatement of the U.S. Law of International Commercial and Investor-State Arbitration, which is its official title, focuses exclusively on those circumstances in which an arbitration agreement, an arbitral proceeding or an arbitral award may, for any reason, find itself before a U.S. court. For that reason, the Restatement does not address arbitral procedure as such, doing so only insofar as arbitral procedure may become an issue in U.S. litigation as, for example, when an award is challenged for denial of due process or failure to abide by the parties’ agreement on material matters or the mandatory law of the arbitral situs. As a result, it does not seek to codify rules of arbitral procedure; that task is left primarily to the lex arbitri of the seat, the institutional rules the parties may have adopted, and any procedural provisions the parties may have included in their agreement to arbitrate. The fact that the Restatement restricts itself to scenarios in which a court may become involved in international arbitration does not mean that it covers modest territory. Whether a court is asked to enforce an arbitration agreement, intervene in an arbitral proceeding, or annul or enforce an arbitral award, an enormous number of issues may arise, and it is the ambition of the Restatement indeed to identify as many questions as may arise on those occasions. The fact that a particular question has not yet arisen does not mean that the Restatement will not address it, since the Restatement seeks to be as serviceable as possible to the courts and to counsel who appear before them. The Restatement of the U.S. Law of International Commercial and Investor-State Arbitration, like all Restatements, consists of three parts. It consists of a code-like presentation of the law, popularly known as “Blackletter,” drafted as clearly and concisely as reasonably possible. The Blackletter of each section of the Restatement is followed by “Comments,” designed to explain the basic rationale or rationales for the positions taken. The Comments are in turn followed by “Reporters’ notes,” which present, sometimes at considerable length and in considerable detail, the case law and, in some instances, the legal scholarship upon which the Restatement drafter relied. Even authority contrary to the position taken by the Restatement will be acknowledged and cited. In this article, I identify the issues arising in the Restatement that either have the greatest significance or aroused the greatest controversy. They are here arranged according to the occasion over the life cycle of an arbitration in which those issues arise. These occasions are three: judicial enforcement of an arbitration agreement, judicial involvement in an arbitral proceeding, and judicial actions to set aside or enforce an award.

II.

Preemption of State Law

Before examining the issues that arise in court on these three occasions, a word must be said about federal preemption of state law in the field of international arbitration. Yearbook of Private International Law, Volume 20 (2018/2019)

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George A. Bermann The Supreme Court has ruled, somewhat unfortunately, that the FAA does not preempt state law, which means that the U.S. states may also regulate international arbitration. However, state law of international arbitration, to the extent it exists, is preempted insofar as it conflicts with the FAA and with federal arbitration law more generally. The Restatement adopts the prevailing view that state law does not conflict with federal law, and is not preempted, unless it substantially impairs the parties’ agreement to arbitrate or substantially interferes with the fundamental attributes of arbitration. A state that subjects the validity and enforcement of agreements to arbitrate to limitations or constraints to which it does not subject contracts generally is apt to be deemed preempted and unenforceable. Some U.S. states have enacted the UNCITRAL Model Law of International Commercial Arbitration. In doing so, they are unlikely to run afoul of federal law, but that possibility cannot be excluded. There is an abundant jurisprudence on the question whether a particular provision of state law of international arbitration is in fact subject to preemption. The Restatement canvasses that case law and demonstrates how general principles of preemption may limit the states’ freedom of action in the international arbitration field.

III. Enforcement of the Agreement to Arbitrate The earliest moment at which courts become involved in international arbitration is enforcement of the agreement to arbitrate. If a plaintiff brings to court a claim arguably subject to arbitration, the defendant is likely to invoke the agreement to contest the court’s jurisdiction and to seek dismissal of the action on that basis. If the claimant, as is typically the case, prefers its claim to remain in court, it will contest the arbitration agreement’s enforceability. The court then will have no choice but to address the enforceability of the arbitration agreement because the court’s own jurisdiction will depend on the outcome of that inquiry. If the court concludes that the agreement is enforceable, the court will dismiss the case for lack of jurisdiction; if it concludes that the agreement is unenforceable, the court will retain jurisdiction and adjudicate the dispute, unless of course there is some other ground for dismissal. Although enforcement of an arbitration agreement is commonly sought by a defendant in U.S. court seeking to have a claim dismissed due to its coverage by a valid and applicable arbitration agreement, it is also possible for a party to initiate a self-standing action in court to enforce an arbitration agreement. In this circumstance, the party invoking the agreement will be the plaintiff in the court action rather than the defendant. The means by which, and the procedures according to which this is done, is determined by the procedural rules of the court where enforcement of the agreement is sought. These matters are dealt with below. A great many more issues can arise in connection with challenges to enforcement of an arbitration agreement than is commonly appreciated. The Restatement attempts to confront and address them all.

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The New Restatement on International Arbitration A.

Grounds for Defeating Enforcement of an Arbitration Agreement and Authority to Address Them.

One of the first challenges facing the drafters of the Restatement was to identify more or less systematically the legal bases on which the enforceability of an arbitration agreement may be contested. Doing so required examining a vast number of cases in which a party maintained that a putative arbitration agreement was, for one reason or another, unworthy of enforcement, and making sense of those cases. 1.

Gateway v. Non-Gateway Issues

Reading this exceptionally large universe of cases, the drafters of the Restatement ultimately found it essential to divide challenges to arbitration agreements into two categories, depending on whether the challenge is one that a court is willing to address if asked to do so, or rather is one that is left exclusively to the arbitral tribunal to decide in its exercise of Kompetenz-Kompetenz. The first category, which the Restatement, like recent literature, terms “gateway issues” represents challenges that essentially implicate a party’s consent to arbitration. Thus, a party may maintain that no arbitration was ever formed in the sense that an offer to arbitrate was made but never accepted or that, as alleged in one case, the proffered agreement was in fact a forgery. This is called an “existence” challenge to the arbitration agreement. A party resisting arbitration may also maintain that it is not a signatory to the agreement and cannot, under law, be treated as if it were a party to it, so that the agreement essentially does not exist for it. Even if an agreement to arbitrate was formed, and is applicable to the party sought to be bound, it may be invalid under the applicable law. An arbitration agreement may be found to be invalid either on the basis of one or more contract defenses, such as fraud, duress, unconscionability, or on the basis of the underlying claim’s non-arbitrability. Still further, even while admitting that an arbitration agreement was formed and is valid, the party resisting arbitration may claim that the dispute at hand does not fall within the arbitration agreement’s scope. All of these objections to an arbitration agreement call into question, one way or another, either the consent to arbitrate or the validity of that consent. Because consent lies at the foundation of arbitration, and because these challenges implicate that consent, the Restatement considers U.S. courts as entitled, indeed obligated, to entertain them prior to arbitration if they are asked to do so. It is because courts may be asked to rule on these questions before referring the parties to arbitration that they have acquired the name “gateway issues.” For each of these consent-based objections, a series of questions arise. By reference to what law is the existence or validity of the arbitration agreement to be determined? What law governs the application of the agreement to a non-signatory or the arbitrability of the dispute, and what law governs its scope? Although the New York Convention in Article II requires a court before which an agreement to arbitrate is invoked to determine whether the agreement is “null and void, inoperative or incapable of being performed,” it does not prescribe the law applicable to those questions. In that respect, Article II of the Convention differs from Article V which, in identifying the exclusive grounds on which an award may be refused Yearbook of Private International Law, Volume 20 (2018/2019)

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George A. Bermann recognition or enforcement, prescribes, at least with respect to some of those grounds, the law applicable to the question whether they are established. Though not all U.S. courts have rallied to this position, the Restatement holds that a defense to enforcement of an arbitration agreement should be governed by whatever law governs the analogous ground at the award enforcement stage. Where there is no analogous ground under Article V, the Restatement identifies an applicable law. The Restatement also inquires into and determines whether any such defense to enforcement of an arbitration agreement may be waived by a party or whether a court may raise the ground sua sponte. Only some defenses will be subject to waiver and only some will be raised by a court on its own initiative. A party resisting arbitration may also invoke a number of other defenses that do not implicate the consent of the parties. For example, it may assert that the party invoking the agreement has, by word or deed, waived its right to arbitrate. It may assert that the arbitration agreement imposed a condition precedent to arbitration (such as a requirement to mediate or litigate in court for a period of time prior to initiating arbitration) which the party invoking arbitration failed to do. The resisting party may claim that the statute of limitations applicable to the claim has lapsed or that the claim has previously been adjudicated and the resulting decision has res judicata effect. None of these defenses implicates the consent of the parties; indeed they all assume that an arbitration agreement was formed, is valid and is applicable to the dispute. To distinguish such issues from “gateway issues,” they are described as “non-gateway issues.” These are not issues as to which a party can seek a judicial determination prior to arbitration. In distinguishing nongateway issues from gateway issues, the Supreme Court has on occasion termed them issues of procedural arbitrability rather than issues of substantive arbitrability. Of course, it is regrettable that the Court has used the term “arbitrability” in this connection. Such usage diverges from what is the practically universal practice of reserving the term “arbitrability” for the question whether a given claim is legally capable, under the applicable law, of being arbitrated. Persons outside the U.S. may find it more useful to assimilate gateway issues to issues of “jurisdiction” and non-gateway issues to issues of “admissibility.” In principle, courts will decline to address non-gateway issues prior to arbitration, even if asked to do so. They will refer such issues to the arbitral tribunal for decision pursuant to the tribunal’s Kompetenz-Kompetenz. It is the tribunal that will determine the law applicable to the question whether the right to arbitrate was waived, the question whether a condition precedent has been satisfied and, if not, whether the failure is to be excused, the question whether the limitations period applicable to the claim has lapsed, and the question whether the dispute has previously been adjudicated in an award entitled to res judicata effect. This is the analytic framework adopted by the Restatement. 2.

Kompetenz-Kompetenz

From what has just been said it follows that, while U.S. law most certainly adheres to the notion of “positive” Kompetenz-Kompetenz, it does not fully subscribe to the

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The New Restatement on International Arbitration principle of “negative” Kompetenz-Kompetenz. If it did, the courts would have no meaningful opportunity to address gateway issues prior to enforcing the agreement to arbitrate. This is also the position that the Restatement takes. The important virtue of “positive” Kompetenz-Kompetenz is that a tribunal is not bound to suspend proceedings merely because its jurisdiction is challenged and await a court ruling on the matter. Accordingly, tribunals may determine their own jurisdiction if it is called into question. Thus Kompetenz-Kompetenz, having a positive but no negative dimension under U.S. law, does not operate to bar courts from resolving gateway issues if they are asked to do so. The basic idea, again subscribed to by the Restatement, is that if a party genuinely maintains that it did not consent to arbitrate the dispute at hand, or that its consent is vitiated, or that the claim is non-arbitrable, it should not have to make its case on that issue before a tribunal whose jurisdiction flows from an agreement to arbitrate to which that party is a “stranger.” The Restatement, heavily supported by the case law, considers that adoption of “positive” Kompetenz-Kompetenz, coupled with rejection of “negative” Kompetenz-Kompetenz in the case of gateway issues, strikes an appropriate balance between the needs for legitimacy and efficacy in international arbitration. 3.

Separability

The Restatement adopts the principle of separability as widely understood. Like most jurisdictions, it posits the separateness of an arbitration agreement from the contract in which it is found, essentially in order to ensure that a tribunal may, on the merits, invalidate a contract without invalidating the arbitration clause and thereby invalidating its very authority to make that determination. To this extent, there is nothing unusual about separability as understood in U.S. law. However, separability performs an additional function in U.S. law. It is established in U.S. law and under the Restatement that any challenge to the enforceability of an agreement to arbitrate must be directed specifically – indeed uniquely – to that agreement and cannot apply equally to the main contract. A party that challenges the enforceability of an arbitration agreement on a basis that is equally applicable to the contract as a whole is in effect making a merits argument, namely that the underlying contract is invalid, will not be enforced and may even be rescinded; for a court to entertain that challenge would be to usurp the tribunal’s authority to address the substantive claim that the parties submitted to it. The challenge mounted against an arbitration agreement must be one that is applicable to the arbitration clause and it alone. To that extent, the arbitration clause and the main contract are “separable.” The Restatement recognizes one exception to separability as understood in the latter sense. If a party maintains that a contract was never formed, it may obtain a judicial ruling on that question, even if the existence challenge applies equally to the arbitration clause and the contract as a whole. If no contract ever came into existence, there is no arbitration clause to be severed from the rest of the contract.

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George A. Bermann 4.

Delegation of Gateway Issues

As an aspect of party autonomy, parties have a right under U.S. law to agree that matters that are ordinarily treated as gateway issues, and within the jurisdiction of a court to decide, shall be decided exclusively by the arbitral tribunal. This is referred to in the case law, and thus in the Restatement, as the “delegation” of gateway issues. In the leading case, the Supreme Court ruled that the parties may only be deemed to have made such a delegation if they manifested that intention “clearly and unmistakably.” If the parties provided in their agreement that the tribunal shall have “exclusive” authority to make what would otherwise be gateway determinations, they will have made a clear and unmistakable delegation. But, beyond that there is much debate. The majority of courts have ruled that the parties manifest a clear and unmistakable intention to delegate to a tribunal authority over gateway issues when they incorporate into their arbitration agreement institutional rules that contain a standard Kompetenz-Kompetenz clause. The Restatement disagrees, and for several reasons. First, it is questionable whether the parties can be said to have clearly and unmistakably made a delegation through the mere incorporation by reference of institutional rules. But even if they could give a clear and unmistakable indication through those means, those means are insufficient to meet the “clear and unmistakable” standard. First, when the Court laid down that standard, it plainly viewed a delegation as exceptional, precisely because it displaces the assumption that consent-based objections to arbitration may be heard and decided by a court. The Court thus established a presumption that courts retain the authority to entertain such objections if requested to do so, and required a special showing for that presumption to be overcome. But virtually all modern sets of institutional rules contain a Kompetenz-Kompetenz provision. That being the case, if incorporation of such rules amounts to a delegation, delegation necessarily ceases to be the exception and becomes in effect the rule. Finally, Kompetenz-Kompetenz in U.S. law entails, as noted above, “positive” Kompetenz-Kompetenz only, and not “negative” Kompetenz-Kompetenz. It therefore, by definition, cannot operate to divest courts of their authority to determine gateway issues if asked to do so. This is one of the matters on which the Restatement diverges from the prevailing view among U.S. courts. B.

Means of Enforcing Agreements to Arbitrate

While the New York Convention requires courts to refer parties to arbitration, assuming their arbitration agreement is not “null and void, inoperative or incapable of being performed,” it does not prescribe the means by which they are to do so. Parties seeking enforcement of an arbitration agreement are thus procedurally relegated to the law of the Contracting State. When it comes to actually enforcing an agreement to arbitrate, the Restatement builds upon the FAA, by providing as means of enforcement an order staying the litigation and/or referring the parties to arbitration. The latter is commonly, though somewhat misleadingly, referred to as “compelling” arbitration, even though arbitration is not literally compelled. Increasingly, however, courts are employing a means of enforcement that is not contemplated by the FAA, namely issuance of a so-called anti-suit injunction, 22

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The New Restatement on International Arbitration and the Restatement approves of that practice – though whether to issue such an injunction lies within the discretion of the court from which it is requested. An anti-suit injunction effectively bars a party, who is within the personal jurisdiction of the enjoining court, from initiating or pursuing in national court a claim that is in fact subject to arbitration. Violation of any such order is punishable by contempt. C.

Procedural Aspects of an Action to Enforce an Agreement to Arbitrate

The Restatement takes the position that actions to enforce an arbitration agreement are conducted according to the usual civil procedure rules of the forum. There is little reason to deviate from those rules merely because the purpose of the action in court happens to be an arbitration agreement’s enforcement. Thus, for example, the usual criteria of subject matter and personal jurisdiction are applicable, as are the usual rules governing sovereign immunity to suit, statutes of limitation, and the availability of stay or dismissal on forum non conveniens grounds. Such actions are similarly subject to the usual rules governing appeals from a judgment of a court of first instance.

IV. Judicial Involvement in an Ongoing Arbitration Once arbitration is initiated, the role of a U.S. court in connection with international arbitration is diminished. The Restatement adopts the view that, under certain circumstances and subject to certain limitations, a court may appoint or remove members of an arbitral tribunal, order consolidation of arbitral proceedings, allow joinder or intervention to such a proceeding, and determine whether an arbitration agreement does or does not contemplate class arbitration. More commonly, a party may request interim measures from a court in aid of arbitration. There is in fact no obstacle to their so requesting, though the decision to grant or deny any such request is a discretionary one. If a tribunal has issued a subpoena to a non-party, and the non-party has declined to comply, a court before which that non-party is present may enforce the subpoena, if necessary by means of contempt. The only form of judicial intervention that has raised objections in principle is the availability of access to a U.S. court for an order compelling the production of documents or testimony for use in an arbitral proceeding. A specific provision of U.S. law (28 U.S.C. § 1782) gives parties to a proceeding in a foreign or international court or tribunal to request such an order from a U.S. court, though again the decision by the court to grant or deny such a request is a discretionary one. Some maintain that unilateral resort to a U.S. court for the production of evidence represents an intrusion in a proceeding that is meant to be governed procedurally, insofar as such matters as discovery are concerned, by the arbitral tribunal itself. The Restatement nevertheless provides that this particular provision of U.S. law is applicable to arbitral as well as foreign court proceedings, though it specifically Yearbook of Private International Law, Volume 20 (2018/2019)

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George A. Bermann makes the receptivity of the arbitral tribunal to such discovery an important consideration in deciding whether or not to order such discovery.

V.

Post-Award Relief in National Court

As in virtually all jurisdictions, courts have a substantial role to play following issuance of an international arbitral award. Much of the Restatement is devoted to this phase of international arbitration. A distinction must be drawn in this connection between the recognition and enforcement of a foreign award, on the one hand, and annulment of a local award, on the other. A.

The Recognition and Enforcement of Awards

1.

Recognition and Enforcement of Foreign Convention Awards

The recognition and enforcement of foreign awards are in principle governed in the U.S. by the New York and Panama Conventions. Those awards may be denied recognition and enforcement only if one or more of the grounds set out in the applicable Convention is established. The function of the Restatement, with regard to the Convention grounds, is to indicate how U.S. courts do – or should – interpret each of these grounds. For some of them, the Conventions themselves identify the applicable law, while for other grounds, the Conventions are silent on applicable law, leaving the Restatement to identify the law that is most appropriately applied to them. The Restatement also identifies which grounds may be waived and which may be raised by a court sua sponte. The Restatement takes the view that courts exercise independent judgment in determining whether a ground for denying recognition or enforcement of a Convention award is present; thus, they make this determination de novo. In principle, in determining whether a ground for denying recognition or enforcement is established, courts are neither bound by the findings that an arbitral tribunal may have made nor required to show those findings any particular deference. In applying the Convention grounds, the court is not in principle addressing the merits of the underlying dispute, but rather limiting itself to ensuring that the agreement pursuant to which the award was made was valid and respected, that the right to be heard was honored, that the tribunal did not exceed its authority, and that the award offends neither principles of non-arbitrability nor public policy. It may also have occasion to determine whether the award was set aside by a competent court of the seat and thus subject to a denial of recognition or enforcement. In the Restatement’s view, since these issues implicate the regularity and legitimacy of the arbitration, rather than the merits of the dispute, full and independent review is warranted. The Restatement takes the view that these grounds are in principle permissive rather than mandatory. A court may choose to recognize or enforce an award even though a ground for denying recognition or enforcement is present. More 24

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The New Restatement on International Arbitration particularly, the Restatement view is that, in highly exceptional circumstances implicating U.S. public policy, a foreign award may be recognized and enforced even though it has been set aside by a competent authority at the arbitral seat. 2.

Recognition and Enforcement of U.S. Convention Awards

It is a peculiarity of U.S. law that Congress, in implementing the New York and Panama Conventions, decided to subject to the Conventions not only awards rendered abroad (or under the arbitration law of a foreign country), but also awards rendered in the United States, provided they have an international element. Thus, such awards, though rendered on U.S. territory rather than abroad, are recognized and enforced in accordance with the Conventions; they may be denied recognition or enforcement only if one or more of the grounds in Article V of the Convention is established. The Restatement terms these awards “Convention awards made in the U.S.,” or simply “U.S. Convention awards.” In short, such awards are treated, so far as recognition and enforcement is concerned, no differently than foreign Convention awards. 3.

Recognition and Enforcement of Non-Convention Awards

Because the U.S. has made both the “commercial” and “reciprocity” reservations that the New York and Panama Conventions allow, there may exist foreign awards that are not governed by the Convention, either because they do not have a commercial character or because the State where they were issued is not a Convention State. Clearly, neither the New York nor the Panama Convention can govern the recognition and enforcement of these awards. The Restatement provides that their recognition and enforcement is governed, by default, in the manner in which domestic U.S. awards are recognized and enforced, i.e., under FAA Chapter One. In fact, non-Convention awards are relatively rare. The vast majority of awards brought to the U.S. for recognition or enforcement are commercial in character and were rendered in the territory of a New York Convention State, and so are governed, for recognition or enforcement purposes, by the Conventions. But some foreign awards may be non-commercial or rendered in a non-Convention State, such as Taiwan. These are the only cases in which recognition and enforcement of a foreign award are governed not by the Conventions, but rather by FAA Chapter One. B.

The Annulment of Awards

In principle, awards made in the U.S. (or under the law of the U.S.) are subject to annulment in the competent U.S. court. The proper term for annulment under the FAA is “vacatur.” The grounds for vacatur of domestic awards are set out in Chapter One of the FAA. An award may be vacated if it was procured by corruption, fraud, or undue means; if there was evident partiality on the part of an arbitrator; if the arbitrators committed misconduct in the arbitration; or if the Yearbook of Private International Law, Volume 20 (2018/2019)

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George A. Bermann arbitrators exceeded their authority. As in the case of the Convention grounds for denying recognition or enforcement of awards, the Restatement indicates how U.S. courts do – or should – interpret each of the grounds for vacatur, which grounds may be waived, and which may be raised by a court sua sponte. FAA Chapter One provides that, unless a ground for vacatur is established, an award is entitled to enforcement. In other words, the enforcement and vacatur of domestic awards are essentially “two sides of the same coin.” As noted above, if an award made in the U.S. has an international character, its recognition and enforcement are governed by the New York and Panama Convention, as appropriate. These “Convention awards made in the U.S.” (or “U.S. Convention awards”) may not be denied recognition or enforcement unless one or more of the grounds under the New York or Panama Convention is established. One might have thought that if such awards are recognized or enforced under the Convention, their vacatur would also be governed by the Convention. However, the Restatement, like the majority of U.S. courts, takes the view that the annulment of such awards is not governed by the Conventions, but rather is governed by Chapter One of the FAA, which is ordinarily applicable to awards made in the U.S. This admittedly creates the awkward situation in which the same award may be annulled under one set of grounds (those set out in FAA Chapter One), but enforced under another set of grounds (the Convention grounds). It would certainly be desirable, as a policy matter, for U.S. Convention awards to be subject to the same grounds for vacatur as they are for recognition or enforcement. Such is the rule under the UNCITRAL Model Law, which prescribes the same grounds for annulment of domestic awards as for the recognition and enforcement of foreign awards. There is unfortunately, however, no textual or legislative history basis for holding that Congress, in implementing the Conventions, intended to have the Convention grounds apply to the vacatur of U.S. Convention awards. The Restatement finds that the FAA, as drafted, cannot reasonably be so interpreted. An amendment to the FAA would be required to achieve that result. In fact there is not a vast difference between the FAA grounds for vacatur and the Convention grounds for denial of recognition and enforcement. They are worded differently, but have much the same meaning. The one exception is that, according to the Supreme Court, domestic awards may be annulled not only on the grounds set out in FAA Chapter One, but also on the basis of “manifest disregard of the law,” which invites at least some measure of merits review. The manifest disregard doctrine is heavily criticized and there are some indications that the Supreme Court is poised to abandon it. For this reason, the Restatement takes the view that the ground should be understood as nothing more than an “umbrella” term for the FAA Chapter One grounds taken collectively, and not as establishing an independent vacatur ground. Although the federal courts were once divided over the matter, the Restatement reflects the position taken by the Supreme Court that parties do not have contractual freedom to alter the grounds for vacatur of awards; they may neither add to nor detract from the vacatur grounds as set out in FAA Chapter One. By the same token, parties may not validly waive in advance their right to seek vacatur of an award. In the Restatement view, the availability of the grounds for vacatur (and 26

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The New Restatement on International Arbitration only those grounds) is the condition upon which parties’ right to opt for arbitration over national court litigations depends. C.

The Preclusive Effect of Prior Determinations

The drafters of the Restatement were acutely conscious of the role of claim and issue preclusion in the recognition and enforcement of awards, and devotes considerable attention to it. Claim preclusion essentially signifies res judicata. A party cannot relitigate a claim that has previously been finally adjudicated, even in another forum, provided there is not only an identity of claim, but also an identity of parties. By contrast, issue preclusion (or collateral estoppel as it is more commonly known in U.S. law) is more far-reaching. It provides that, even if the claims are not the same, specific findings or determinations made in the first case are also binding in the second case, again assuming an identity of parties. Some of the Convention grounds for non-recognition or non-enforcement of awards will have previously been addressed by a court, whether foreign or U.S., at the time the arbitration agreement was enforced or at the time annulment of the award was sought. The question that inevitably arises is whether the recognition or enforcement court is bound by those prior determinations. The Restatement concludes that, subject to certain conditions, the prior determination is entitled to issue preclusion, and so is binding on, and cannot be reexamined by, the recognition or enforcement court. The result is otherwise when the prior determination was made not by an annulment court at the seat of arbitration (the “primary” jurisdiction), but rather by the court of some other jurisdiction where the award may have previously been brought for recognition or enforcement (a “secondary” jurisdiction). A decision by a court of secondary jurisdiction to grant or deny recognition or enforcement is a strictly territorial one, without impact on enforcement actions elsewhere. A preclusion question also arises when a claim that is brought to court on the merits has already been adjudicated in a prior arbitration. The prior award is in principle entitled to claim preclusion, provided again there is an identity of parties, in which case the claim may not be reexamined. Moreover, although the prior arbitration may have concerned a different claim, a determination made in the prior proceeding may also enjoy issue preclusive effect in the subsequent court action. Finally, if an award is rendered in disregard of the principle of res judicata, it may be denied recognition or enforcement on grounds of public policy. In short, problems of preclusion, whether of the claim or issue preclusion variety, pervade international arbitration, and the Restatement seeks to analyze them systematically. D.

Procedural Aspects of an Action to Enforce an Arbitral Award

The Restatement takes the position that actions to enforce an arbitral award – be it a foreign Convention award, a U.S. Convention award, or a non-Convention award – are conducted according to the usual civil procedure rules of the forum. Such actions are subject to the usual requirements of subject matter and personal Yearbook of Private International Law, Volume 20 (2018/2019)

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George A. Bermann jurisdiction. The Restatement specifically takes the view that the mere presence of assets belonging to an award debtor is sufficient to supply personal jurisdiction. Sovereign immunity is not in principle an obstacle to enforcement due to the fact that the Foreign Sovereign Immunities Act of the U.S. provides both a “waiver” and an “arbitration” exception to immunity, both of which should in principle be applicable in an award enforcement action. One matter in which the Restatement innovates is the possibility of a court staying or dismissing an enforcement action on the basis of forum non conveniens. The Restatement takes the view, which only a distinct minority of courts have taken, that forum non conveniens stay or dismissal is unavailable in enforcement action under the New York or Panama Conventions. There are two reasons for which the Restatement takes this position. First, the Conventions enumerate the exclusive grounds on which enforcement of a Convention award may be refused, and inconvenience is not among them. Second, and more basic, the U.S., in ratifying the Conventions, undertook an international law obligation to entertain actions to enforce Convention awards, and rejection of an enforcement action on forum non conveniens is inconsistent with that obligation.

VI. Investor-State Arbitration The Restatement devotes a separate chapter to investor-State arbitration because a court’s role in enforcing an agreement to arbitrate an investor-State dispute, in becoming involved in an investor-State arbitration, and in conducting post-award review of an investor-State award may differ from its role in connection with commercial arbitrations generally. While recognizing that investor-State arbitration can be conducted pursuant both to contract and host state legislation, the Restatement focuses its attention on investor-State arbitration pursuant to treaty, be it a bilateral or multilateral investment agreement. Courts seldom perform, in the context of investor-State arbitration, their usual function of enforcing arbitration agreements, whether by compelling arbitration or otherwise. This is because claimants can trigger an investor-State arbitration merely by unilaterally filing a petition for arbitration. They do not ordinarily need judicial assistance. The respondent State may have jurisdictional defenses, but they will be entertained by the tribunal rather than by a court. However, courts do retain a potentially important role in intervening in an arbitral proceeding and in entertaining post-award actions. However, even on those occasions, the extent of judicial involvement is significantly different depending on whether the arbitration is conducted on an ICSID or a non-ICSID basis. A.

Non-ICSID Convention Arbitration

As a general matter, the role of courts in connection with non-ICSID arbitration is no different than their role in connection with commercial arbitration. Like com-

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The New Restatement on International Arbitration mercial arbitration, non-ICSID investor-State arbitration is subject to the lex arbitri of the arbitral seat and the New York and Panama Conventions, as applicable. However, one particularity of non-ICSID arbitration as compared to commercial arbitration concerns the determination of whether the claimant is an investor of the right nationality and made what qualifies as an investment under the investment treaty. Generally speaking, these are regarded as jurisdictional issues, and jurisdictional issues are generally subject to independent judicial determination, whether at the stage of enforcing an arbitration agreement or reviewing an award. However, the Restatement takes the position that, while the “investor” and “investment” requirements are generally thought of as jurisdictional, they should not be subject to independent judicial determination, either at the stage of enforcing an arbitration agreement or reviewing an award. The question whether the claimant is an investor and has made a qualifying investment entails a highly factintensive inquiry, and one that is ordinarily heavily intertwined with the merits. It is also subject to a vast international arbitral jurisprudence with which courts are unlikely to be familiar. The inaptness of de novo judicial review of these matters is particularly obvious in the context of annulment or enforcement actions, in which a court would have to immerse itself in a vast arbitral record in order to determine whether the claimant really was an investor and really made an investment within the meaning of the underlying treaty. This is a matter on which the existing case law is sparse and therefore on which the Restatement may be expected to have some influence. With this exception, there is no substantial difference between the judicial role in connection with non-ICSID arbitration and in connection with commercial arbitration generally. B.

ICSID Convention Arbitration

By contrast, the role of courts in connection with ICSID arbitration is much reduced. This is due to the broad notion that ICSID arbitration is meant to be “selfcontained,” i.e. largely insulated from involvement by national courts. ICSID Convention arbitrations do not have a seat of arbitration and are not subject to any jurisdiction’s lex arbitri or to the New York or Panama Conventions. The courts accordingly play a reduced role during the pendency of an ICSID Convention, as distinct from a non-ICSID Convention, proceeding. Thus, under the Restatement, courts will not entertain requests for the appointment or removal of arbitrators in an ICSID Convention case, leaving that authority entirely to ICSID itself. Under the ICSID Rules, courts may not entertain an application for provisional relief unless the parties have expressly so agreed. Courts certainly are not to consider issuing an order enjoining an ICSID Convention arbitration. Finally, under the Convention, arbitrators, parties, party representatives, witnesses and experts, as well as ICSID itself, are immune from litigation or liability for acts or omissions within the scope of their functions. All of these are jurisdictional and procedural manifestations of ICSID Convention arbitration’s self-contained character.

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George A. Bermann Most importantly, ICSID Convention awards are not subject to annulment by a national court. Annulment may be sought only within ICSID’s internal annulment process, namely through a proceeding before a so-called ad hoc committee constituted for that purpose. Unlike non-ICSID Convention awards, whose enforcement is governed by the New York or Panama Convention, ICSID Convention awards are necessarily binding on the courts of Contracting States, which are required both by the Convention and the U.S. implementing statute to enforce them in the same manner as if they were final judgments of a court of the enforcing State. Execution of ICSID awards is categorically governed by national law. The procedures for enforcement of ICSID Convention awards in national courts are also somewhat different from those applicable to the enforcement of non-ICSID Convention awards and commercial awards more generally.

VII. Conclusion The Restatement of the U.S. Law of International Commercial and Investment Arbitration has been an ambitious exercise, taking no fewer than twelve years from beginning to end. It undertakes to present U.S. law on the subject in the comprehensive and systematic manner generally associated with a code. Although the Restatement largely reflects the prevailing law, it does not always do so. It adopts a minority view among the courts, if that view seems manifestly sounder, and on very rare occasions it takes a position that no court thus far has taken. It also does not hesitate to address questions that have not yet arisen, if it is entirely plausible that they will in the future. A Restatement is meant to have a lengthy shelf life. However, International arbitration is a fast-changing field, with new questions arising to which the present Restatement of the U.S. Law of International Commercial and Investment Arbitration will not supply an answer. Sometime well in the future this Restatement, like others, will be superseded by a Second Restatement on the subject. Moreover, the Restatement, legally speaking, is an imperfect substitute for a proper Federal Arbitration Act, since it is not, and cannot be treated as, binding law. Even so, the Restatement provides answers to courts, and indirectly to counsel, that otherwise could be obtained, if at all, only by painstaking research into a multitude of court decisions that are likely to address the matter at hand in an inconsistent or uncertain manner. To the extent it does so, the Restatement provides a strong dose of the certainty and predictability upon which international arbitration heavily depends.

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DENATIONALISING PRIVATE INTERNATIONAL LAW – A LAW WITH MULTIPLE ADJUDICATORS AND ENFORCERS Diego P. FERNÁNDEZ ARROYO*

I. II.

III.

IV.

I.

The Erosion of State-Centrism in PrIL Current Significance of Non-State Adjudication and Enforcement A. Adjudication in Public Settings 1. International Courts 2. Human Rights Courts 3. REIO Courts B. Private Adjudication and Private Enforcement 1. Arbitration 2. Private Enforcement Impact of Denationalisation of Adjudicative Power A. Insufficiency of State Adjudication 1. The Shift of Jurisdictional Rationale in PrIL 2. The Attempt to Replicate Private Adjudication in State Courts B. Dependence on Heteronomous Courts 1. State Courts within a Complex Jurisdictional Framework 2. Different Degrees of Dependence C. State Adjudicators as Simple “Controllers” 1. Concerning Foreign and International Courts’ Decisions 2. Concerning Arbitral Awards and Private Agreements A Word in Conclusion – Content and Teaching of PrIL

The Erosion of State-Centrism in Private International Law

Quite evidently, and as powerful as it still may be, the State is nowadays no longer what it used to be. This finding can be confirmed from multiple perspectives. In the realm of Private International Law (PrIL), the central role once played by the State has progressively been eroded. Nevertheless, at first sight State-centrism may still appear as quite solid; repeated manifestations of exacerbated nationalism continue to stress its influence. First, the State remains the “master of the game,” as it establishes the ultimate objective of PrIL, through its policy-makers. For *

Professor at Sciences Po Law School, Paris. Yearbook of Private International Law, Volume 20 (2018/2019), pp. 31-45 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Diego P. Fernández Arroyo instance, it decides whether to establish a dualist or monist legal order, a conservative or advanced system of PrIL, to adopt an open or closed attitude vis-à-vis foreign law and foreign decisions, among other aspects. Second, the State implements its policy objectives through its law-making power, embodied in the legislators. For instance, it creates PrIL rules, or decides whether to compile those rules in a comprehensive body (like the civil code) or a standalone act. Third, the State appears also as the “referee of the game,” as it adjudicates PrIL disputes, through its courts, in order to ensure that its rules and underlying policies are duly respected. Fourth, government officials, normally from justice or foreign affairs departments, play the role of central authorities in a myriad of international conventions organizing cooperation in matters of PrIL, such as issues of procedure, family and protection of children. The influence of the State in this regard cannot be denied. Law journals are publishing plenty of news and comments about new State codifications or State-court decisions on PrIL. Accordingly, any discourse on PrIL “beyond” or “after” the State cannot look down upon these manifestations. However, neither can any such discourse be built exclusively around the State. Indeed, the State coexists with other – public and private – actors in all of the aforementioned activities. This coexistence is for instance quite evident within the framework of the making of PrIL rules. In the last decades, there has been a notable increase in the creation of non-national rules or soft law codification (which can be characterised as “sets of principles” or, shortly, “principles”), that has given rise to a normative pluralism which, in some cases, has taken the form of truly parallel non-national legal orders.1 A dense network of non-binding private and public rules is progressively gaining space.2 Certainly, States retain their lawmaking power as a notable expression of sovereignty; they use this power on a daily basis. Equally evident is, however, the network of non-national rules applicable to trans-boundary legal relationships, set up in the last decades. So far, the experience of principle-making has been positive from several points of view. On the one hand, the principles have confirmed the denationalisation of law. More precisely, they stress the end of the State monopoly on normative production (assuming such a monopoly ever existed). Overcoming the unjustified distinction between State law and non-State law, the principles permit law to evolve in different ways, particularly in relation to the emergence of a post-post-modern private international law. On the other hand, the principles may bring court and arbitral practices closer, once the former are persuaded that there is no reason to leave the monopoly of application of non-State law to arbitrators.

1 D.P. FERNÁNDEZ ARROYO, The Growing Significance of Sets of Principles to Govern Trans-boundary Private Relationships, in The Age of Uniform Law – Essays in honour of Michael Joachim Bonell, Rome 2016, p. 272 et seq.; J. BASEDOW, The Multiple Facets of Law Enforcement, in N. ETCHEVERRY ESTRÁZULAS/ D.P. FERNÁNDEZ ARROYO (eds), Enforcement and Effectiveness of the Law, Cham 2018, p. 3 et seq. 2 See E. LOQUIN, Les règles matérielles internationales, Recueil des cours, vol. 322, 2006, p. 9 et seq.; G. KAUFMANN-KOHLER, La codificación y la normatividad del soft law en el arbitraje internacional, in J. BASEDOW et al. (eds), ¿Cómo se codifica hoy el derecho comercial internacional?, Asunción 2010, p. 107 et seq.

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Denationalising PrIL

II.

Current Significance of Non-State Adjudication and Enforcement

When it comes to the adjudication of PrIL disputes, the erosion of State power is evident. More precisely, what has been eroded is the “centrality” of State power in that regard. It is obvious that domestic courts are not the exclusive PrIL adjudicators. However, for quite a while they played a central adjudicative role. In fact, the enforcement of substantive rights in international cases was, for a long time, perceived as being inseparable from the activity of State courts. Evidently, such a perception could not ignore that international courts and tribunals have been dealing with PrIL issues ever since they existed. This obvious finding needs no demonstration. Nonetheless, I believe that drawing attention to certain aspects of non-State adjudication and enforcement may be useful in order to better understand the current situation of PrIL, as well as to predict its possible evolution. A.

Adjudication in Public Settings

1.

International Courts

It is well known that the International Court of Justice (ICJ) – as well as its predecessor the Permanent Court of International Justice3 – has had to cope with PrIL issues in a variety of scenarios typically related to Public International Law (PIL).4 It has been suggested that the Court has been required to examine issues of PrIL in order to properly discharge its PIL function.5 In other words, the Court has encountered and still encounters PrIL issues mixed with its PIL ordinary matters. Something similar may be said on the PrIL dispute-settlement activity of other international courts of “universal” scope. States are not alone as international actors; international adjudicators are also “a means to develop the law.”6

Together mentioned hereinafter as the “Court.” The Court has always been taken as a PIL institution, basically pursuant to Article 34 of the ICJ Statute, which states that only States may be parties in cases before the Court. See The Corfu Channel Case [1949] ICJ Rep, p. 35: “But to ensure respect for international law, of which it is the organ, the Court must declare that the action of the British Navy constituted a violation of Albanian sovereignty”; Certain German Interests in Polish Upper Silesia (Germany v Poland) (Merits) (1926) PCIJ Ser A No 7, p. 19: “[f]rom the standpoint of International Law and of the Court which is its organ…”; LaGrand (Germany v United States) [2010] ICJ Rep, p. 466, 486; Nottebohm (Liechtenstein v Guatemala) (Second Phase) [1955] ICJ Rep, p. 420 et seq. See also R. KOLB, The International Court of Justice, Oxford 2013, p. 57; A. ZIMMERMAN et al, The Statute of the International Court of Justice, 2nd ed., Oxford 2012, p. 731. 5 T.M. DE BOER, Living Apart Together: the relationship between public and private international law, Netherlands International Law Review 2001, p. 83. 6 P. SANDS, Reflections on International Judicialization, European Journal of International Law 2017, p. 885-889 (citing H. LAUTERPATCH). 3 4

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Diego P. Fernández Arroyo Concretely, the Court has dealt with PrIL in the following situations:7 a) There is a lacuna in PIL, capable of being filled by reference to PrIL. In these types of cases, the court borrows PrIL rules to resolve analogous PIL issues; b) The Court is required, as a prerequisite to resolving a PIL issue, to interpret a PrIL treaty or construe a PrIL concept; c) PIL rights and obligations flow directly from States’ domestic laws regarding private international disputes; d) The enforcement of the State’s domestic laws regarding private international disputes is challenged as infringing PIL. Although the Court’s authoritative power is remarkable, its practical significance as well as its influence is rather limited given the reduced number of cases decided by the Court.8 Of course, it can be argued that most of these cases are not examples of denationalisation because, by their very nature, the problems involved therein could not be discussed before national courts. However, such an assertion precisely confirms the existence of PrIL issues which fall outside the scope of domestic courts’ jurisdiction. 2.

Human Rights Courts

The situation has proven to be remarkably different at the regional level. The decisions of courts specialised in human rights have become both frequent and significant in matter of PrIL. The activity of the European Court of Human Rights (ECHR) has been, in this respect, particularly impressive. The role played by human rights courts on PrIL matters has impressively grown in the last decades. This is particularly visible within the European context although it is clearly a universal phenomenon that affects all the aspects of PrIL.9 The case law before the ECHR offers a variety of discussions of PrIL issues. These arise in particular with regard to Articles 6 (right to a fair trial) and 8 (respect of private and family life) of the Convention. In assessing a possible violation of

On this, see H. VAN LOON/ S. DE DYCKER, The Role of the International Court of Justice in the Development of Private International Law, Mededelingen van de Koninklijke Nederlandse Vereniging voor Internationaal Recht, Vol. 140 (One Century Peace Palace, from Past to Present), The Hague 2013, p. 73-119; D.P. FERNÁNDEZ ARROYO/ M.M. MBENGUE, Public and Private International Law in International Courts and Tribunals – Evidences of an Inescapable Interaction, Columbia Journal of Transnational Law 2018, p. 797-854. 8 The activity of other international courts affecting PrIL issues may be also mentioned, for example, The “ARA Libertad” Case (Argentina v. Ghana), brought before the International Tribunal for the Law of the Sea, available at . 9 The reading of the Institute of International Law (IDI) Draft Resolution on Human Rights and Private International Law is conclusive in this regard. Ann. IDI, Séssion de Hyderabad 2017, Vol. 78, p. 215 et seq., available at . 7

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Denationalising PrIL these articles, the ECHR has considered a vast range of PrIL issues and a variety of PrIL instruments, notably the 1980 Hague Child Abduction Convention.10 The role of the ECHR when addressing PrIL matters has been sometimes controversial. It has explained many times that its role is not to solve PrIL cases but just to evaluate the compatibility of national courts’ decisions with human rights requirements. In the ECHR’s own words: “It is not the Court’s task to take the place of the competent authorities in examining whether there would be a grave risk that the child would be exposed to psychological harm, within the meaning of Article 13 of the Hague Convention, if he returned to Israel. However, the Court is competent to ascertain whether the domestic courts, in applying and interpreting the provisions of that Convention, secured the guarantees set forth in Article 8 of the Convention, particularly taking into account the child’s best interests.11”. The activity regarding PrIL issues developed by the Inter-American Court of Human Rights (IACtHR) has perhaps not been as impressive but appears equally significant. To prove this assertion it may suffice to refer to the Advisory Opinion concerning the obligations of States Parties to the American Convention on Human Rights (American Convention, ACHR) in respect of infrastructure creating a risk of significant environmental damage to the marine environment of the Wider Caribbean Region, in which, among many other interesting findings, the IACtHR affirms that the States have the duty to grant non-discriminatory access to justice to persons located outside their territory who are potentially affected by transboundary damages originating in their territory.12 3.

REIO Courts

Even more conspicuous than the impact of the human rights courts on PrIL, has been the outcome of the Europeanisation of PrIL originating in the transfer of competencies from Member States to the regional structure within the European Union (EU). As a consequence of this process, the role of EU Member-State courts is, as far as PrIL is concerned, largely “dependant”13 on the content of the decisions of the EU Court of Justice (EUCJ). It is true that in the European jurisdictional system, the more commonly used mechanism is the request for preliminary ruling pursuant to Article 267 of the 10 See P. BEAUMONT/ L. WALKER, Post Neulinger Case Law of the European Court of Human Rights on the Hague Child Abduction Convention, in A Commitment to private international law, Essays in honour of Hans van Loon, Cambridge 2013, p. 17-30. 11 ECHR, 6 July 2010, Case of Neulinger and Shuruk v. Switzerland, App. No. 41615/07, para. 141, available at . 12 Inter-American Court of Human Rights (IACtHR), Consultative Opinion OC23/17, 15 November 2017, available in Spanish at , (see, especially para. 238 et seq.). 13 On the precision of the notion of “dependence” within this context, see infra III.B.

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Diego P. Fernández Arroyo TFEU, according to which a court of a Member State refers to the EUCJ in order to get the authentic interpretation of a provision of EU law. Under this mechanism, the national court formally renders the concrete ultimate decision. However, the State courts (all of them, in fact) are obliged to follow the decision given by the EUCJ. The remaining issues for the State courts are the factual findings and, in given cases, the application of proportionality criteria, which do not seem so important in comparison with the power of the regional court. Additionally, the EUCJ is also key beyond preliminary rulings, as demonstrated by the reinforcement of the exclusive external competence of the EU (and previously of the EC) on PrIL matters.14 According to the EUCJ, the exclusive competence is necessary in order to avoid the risk of undermining the uniform and consistent application of EU rules and the proper functioning of the system which they establish.15 Furthermore, the EU is now a party to several conventions on PrIL matters. At the same time, EU member States have ratified several conventions “in the interest of the Union.”16 B.

Private Adjudication and Private Enforcement

1.

Arbitration

Coming back to the realm of what could be labelled as the “universal” arena, arbitral tribunals are much more active in terms of PrIL adjudication than international courts. The significance of arbitration in PrIL is not diminished by the fact that it is mostly used for commercial disputes. What really matters is not only that the material scope of arbitration has gone far beyond what can be strictly considered to be commercial, but also that arbitration has become in practice the exclusive, quasi-exclusive or, at least, preferred jurisdiction for several types of international disputes. Furthermore, the enforcement of arbitral agreements and awards is largely made without the intervention of domestic courts. That is to say, there has been a shift in adjudicative power and in the way in which the final product of the exercise of that power is enforced. Additionally, we are going to see that arbitration is not the sole kind of private enforcement. PrIL has reached the peak of private adjudication through the use of arbitration as the primary dispute resolution method for international commerce. A 14 See ECJ Opinion 1/03 of 7 February 2006 (on the EC competence for concluding the new Lugano Convention on jurisdiction and the recognition and enforcement of resolutions in civil and commercial matters) and Opinion 1/13 of 14 October 2014 (on the EU competence for accepting the accession of third States to the Hague Convention on the civil aspects of international child abduction). 15 P. FRANZINA, The External Dimension of EU Private International Law After Opinion 1/13, Cambridge 2017. 16 Although they are not comparable to the EU process, experiences in other continents are worth being cited. Within the MERCOSUR, see Advisory Opinion 1/2007, 3 April 2007, available in Spanish at , dealing with the application of the 1994 Buenos Aires Protocol on International Jurisdiction on Contractual Matters.

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Denationalising PrIL large part of the volume of international private disputes has moved to the realm of arbitral tribunals, where the influence and control of the State is rather weak. In a vast myriad of economic matters, the rise of international arbitration has confined State courts in the role of default courts. And, if we believe in certain audacious proposals, even that role should not be guaranteed in the future.17 When an arbitral tribunal is constituted, its jurisdiction is decided by applying the universally recognised principle of competence-competence.18 If it is properly applied, either party can challenge the jurisdiction and ultimately it is a court that decides the jurisdiction of the arbitral tribunal. More precisely, the court has the last word because the principle of competence-competence is based on the priority given to the arbitral tribunal in order to avoid undue delays in arbitration. Remarkably, in the overwhelming majority of cases, the courts do not get to pronounce the last word. Therefore, the decision of the arbitral tribunal on its own jurisdiction is final and binding – i.e. there are no challenges, there is nothing for the court to decide. Consequently, State courts and classical PrIL are maybe relevant, but only marginally so.19 Concerning the applicable law, arbitral tribunals may have the freedom to determine which rules of law are more appropriate to a specific case and may, in particular, directly apply non-State rules which are equally or better suited to resolve an international issue. The law that the arbitral tribunal applies to the dispute may depend on the parties’ agreement. In the absence of such agreement, the current predominant trend in arbitration rules and acts is to allow the arbitral tribunal to apply the rules of law (and not the (national) law) which it finds more appropriate.20 This evidences a mature PrIL, which created a system to carve out undesirable results of the random choice of law rules roulette. 2.

Private Enforcement

Quite paradoxically, States’ pro-active policies and initiatives have been the key to reaching the current stage of arbitration autonomy. The word “State” not only refers here to any independent State acting individually by means of all its branches of power but also and notably refers to the collective action of States within international organisations. Actually, the success of modern arbitration is difficult to explain without the universal impact of United Nations instruments,

17 See G. BORN, BITS, BATS and buts: reflections on international dispute resolution, available at ; G. CUNIBERTI, Rethinking International Commercial Arbitration. Towards Default Arbitration, Cheltenham 2017. 18 UNCITRAL Model Law on International Commercial Arbitration, Article 16. 19 This paragraph is taken – with some modifications – from a debate with G. CORDERO-MOSS, published in V. RUIZ ABOU-NIGM/ M.B. NOODT TAQUELA (eds), Diversity and Integration in Private International Law, Edinburgh 2019 (forthcoming). 20 For example, 2017 ICC Arbitration Rules, Article 21(1); 2018 Argentinian Act on International Commercial Arbitration, Article. 80.

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Diego P. Fernández Arroyo elaborated in close collaboration with private institutions.21 Without a doubt, this has helped private institutions to flourish in all corners of the globe, offering all kinds of dispute-settlement mechanisms often coupled with sets of private regulations. Similarly, several initiatives have been developed or are currently ongoing within public settings dealing with different ways of private enforcement. Thus, with the adoption of the (Singapore) Convention and the Model Law on international settlement agreements resulting from mediation, UNCITRAL is trying to foster international mediation clearly inspired by its success with international arbitration.22 It is true that both the New York Convention and the Singapore Convention provide for a mechanism of public enforcement of private agreements and decisions. However, it seems clear that parties know the general rule in application of the New York Convention pursuant to which their arbitration agreements and the resulting awards rendered should be enforced. This forces them to comply with the obligations arising from such agreements and awards. Drafters of the Singapore Convention are probably expecting a similar outcome.23 Not less interesting is the effort of the Hague Conference on Private International Law to set up a framework to promote the effectiveness of family agreements.24 In fact, family law is an ideal field for the progress of ADR and private/public co-operation. All in all, enforcement outside public realm or in cooperation therewith is becoming increasingly important in many areas.25

III. Impact of Denationalisation of Adjudicative Power The consequences and avenues for reflection offered by the foregoing description are manifold. Some of them demonstrate the impact of denationalisation of jurisdictional power on the current configuration of PrIL. I will focus in particular on three aspects which are certainly intertwined: the insufficiency of State

21 Namely, with the International Court of Arbitration of the International Chamber of Commerce. See C. LEMERCIER/ J. SGARD, Arbitrage privé international et globalisation(s), [Rapport de recherche 11.11, Mission de Recherche Droit et Justice; CRNS; Sciences Po], Paris 2015. (halshs-01158980). 22 See T. SCHNABEL, The Singapore Convention on Mediation: A Framework for the Cross-Border Recognition and Enforcement of Mediated Settlements, Pepperdine Dispute Resolution Law Journal, Vol. 19-I, 2019, p. 1 et seq. 23 Ibid., p. 3. 24 See Revised draft Practical Guide: Cross-border recognition and enforcement of agreements reached in the course of family matters involving children, 4 January 2019, available at . 25 See the contributions by J. BASEDOW on the Multiple Facets of Law Enforcement and G.A. BERMANN on the Enforcement of Legal Norms Through Private Means, in N. ETCHEVERRY ESTRÁZULAS/ D.P. FERNÁNDEZ ARROYO (eds), Enforcement and Effectiveness of the Law, Cham, 2018, p. 3 et seq. and p. 33 et seq., respectively.

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Denationalising PrIL adjudication, the dependence of State courts on heteronomous bodies, and the role of State adjudicators as simple “controllers.” A.

Insufficiency of State Adjudication

1.

The Shift of Jurisdictional Rationale in PrIL

Historically, in the era of State centrality, PrIL was an expression of sovereignty; it was a prerogative of the States to regulate situations having a connection with their territory or their nationals. That was particularly noticeable in matters of jurisdiction.26 Today, the approach is (or, rather, should be) different; jurisdiction is not (exclusively) seen as a State prerogative, but rather as a function to ensure an effective access to justice. A part of this assumption is all but new: already the old institution of forum non conveniens and – more clearly – not so old institution of forum necessitatis are (or, again, should be) similarly based on this rationale. Constructions on civil universal jurisdiction also tend to pursue this direction.27 Thus, the fundamental character of the right to access to justice becomes the main jurisdictional basis,28 with an obvious extension to the right to enforcement.29 As a result of this rationale, it becomes evident that State courts cannot fully solve all PrIL disputes. Even in disputes for which State-court jurisdiction is generally available, only a different court, with a recognised supranational authority, can properly decide if a State has violated human rights in adjudicating PrIL disputes. Arguably, in certain cases, even the primary jurisdiction should be allocated to international courts. In fact, whenever the disputes in a particular field yield unsatisfactory answers in domestic courts (and, in some cases, also in international arbitration), proposals aiming to create international courts arise.30 26 In this respect, the expression “sovereignty principle” has been used. E. PATAUT, Principe de souveraineté et conflits de juridictions (Étude de droit international privé), Paris 1999. But see A. MILLS, Rethinking Jurisdiction in International Law, The British Yearbook of International Law 2014, p. 1 et seq. 27 Among many other examples, see the multitude of comments on US Supreme Court, Kiobel v. Royal Dutch Petroleum, No 10-1491 (17 April 2013). See also A. BUCHER, La compétence universelle civile, Recueil des Cours, vol. 372, 2014, p. 9 et seq. 28 This is rationale underlying, for instance, the Asociación Americana de Derecho International Privado (ASADIP) Principles on Transnational Access to Justice (TRANSJUS), available at . 29 See infra III.C.1. 30 See, for instance, looking for the “missing forum” in issues related to corporate social responsibility, M. STEINITZ, The Case for an International Court of Civil Justice, Cambridge, 2019. The interest in this matter is out of doubt. The Draft International Convention on Business and Human Rights, adopted within the framework of the UN Human Rights Council is among many other complementary initiatives. See also H. VAN LOON, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, Uniform Law Review 2018, Vol. 23-II, p. 298-318 (proposing to develop the PrIL component of the United Nations 2030 Agenda: Transforming Our World).

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Diego P. Fernández Arroyo No less significant are matters for which State courts have appeared to be – from a general point of view – ill-equipped in comparison with private adjudicators. Such a statement must not be interpreted as confirming the erroneous view according to which the peak of international arbitration is mainly due to the flaws of State jurisdictions. The reason for the success of arbitration is simply that the actors of international commerce perceive arbitration, because of its very nature, as more fitted to efficiently settle their disputes. But this is not an inference regarding the qualities of State courts. As a matter of fact, an observation of the practice of the last forty years offers evidence that arbitration works better in States whose courts are deemed – generally speaking – to be reliable. Surveys and the general impression seem to demonstrate that arbitration has become the real natural forum for a vast range of disputes, namely of a commercial nature. This is confirmed by the creation of arbitral institutions specialised in a variety of fields such as sports, finance, maritime law, art, etc. Even in relation to the much criticised investor-State dispute settlement (ISDS), a return to the “original” jurisdiction of State courts does not appear to be a real option. Indeed, taking as a starting point, the institutionalisation of this mechanism within the framework of the World Bank more than half a century ago, it is hard to sustain that State courts would remain the best fora to solve investment disputes involving States. Now, after the so-called backlash against ISDS, the proposals to overcome its detected flaws include: the creation of (one or several) multilateral courts, a mix between arbitration and an appellate body, and the correction and improvement of the current arbitration system.31 There are many attractive avenues for research on arbitration as a mechanism to settle PrIL disputes. Even the much-visited topics of relations between arbitral tribunals and State courts still offer many points of interest.32 Perhaps more useful in terms of contribution to the improvement of PrIL dispute-settlement is research about the feasibility and limits of promoting some features of arbitration in State adjudication (e.g. procedural flexibility and substantial openness) and the other way around (e.g. development of jurisprudence). 2.

The Attempt to Replicate Private Adjudication in State Courts

The current trend – it is perhaps exaggerated to call it “proliferation” – to create State courts with specific competencies in international commercial matters, confirms the previous statements. States have seen that without specific courts operating under international-arbitration-like rules and mechanisms it is very hard to have cases submitted to their national courts. The national experiences present many differences, although some common features may be identified.33 See the documents of the UNCITRAL Working Group III, available at . 32 See A.S. RAU, The Allocation of Power Between Arbitral Tribunals and State Courts, Recueil des cours, Vol. 390, 2018, p. 9 et seq. 33 P. BOOKMAN, The Adjudication Business, Temple University Legal Studies Research Paper, No 2019-08, 19 February 2019. Available at SSRN: . 31

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Denationalising PrIL These State courts are unlikely to eliminate the option of arbitration.34 In the best scenario, commercial courts will act as concurrent fora, which, depending on the specific characteristics laid down by local regulation, might be especially appropriate for some type of disputes. For instance, they might be attractive for the settlement of disputes based on small claims, for which arbitration may appear too costly. Of course, the challenge for these courts is to become attractive for potential or actual disputing parties, not in comparison with arbitration but in general terms.35 The activity of international commercial courts is still incipient. More development is needed in order to draw firm conclusions regarding their effectiveness. Further research might be conducted concerning the phenomenon. In this respect, different perspectives have been suggested: historical, sociological and geopolitical, on a trans-disciplinary note, and, of a more specific legal character, issues related to “procedural culture” and to the potential incentive to forum shopping.36 Perhaps it might also be interesting to research the conditions, the pros and cons, to propose national courts on other (non-commercial) international matters. B.

Dependence on Heteronomous Courts

1.

State Courts within a Complex Jurisdictional Framework

On many occasions, the decisions taken by State courts are nothing but the application of the adjudicative principles established by international courts. I have referred to this situation as one of “dependence,” although, in some cases there is technically no such thing. It might be more appropriate to label this phenomenon: the integration of the State court in a supranational jurisdictional structure. It is the typical case of the EU, in which Member-State courts are courts of the EU or, in other words, the first courts of EU law. Beyond any technicality, as a matter of fact, it is worth highlighting that, in a number of States, domestic courts cannot adjudicate PrIL cases without applying the legal notions construed by the supranational courts. From the opposite perspective, one might say that there are many decisions of the latter which are binding on the former. The justifications for that situation vary. Thus, human rights courts can be seen as the answer to the conundrum of a State acting simultaneously as a judge and a disputing party. In order to ensure the respect for human rights in civil proceedings and namely to grant international access to justice, a supplementary look from outside is often necessary. Similarly, supranational REIO courts are best suited to grant the application of the principles 34 J. WALKER, Specialised international courts: keeping arbitration on top of its game, Arbitration, Vol. 85-I, 2019, p. 2 et seq. Actually, taking London and New York experiences as precedents of the current trend, no risk for arbitration could be found. 35 The paradigmatic Singapore International Commercial Court has already heard a number of cases (available at ) but most of them have been transferred from the High Court. 36 P. BOOKMAN (note 33), p. 52-54.

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Diego P. Fernández Arroyo of the community of States given the obvious – and often understandable – contradictions of member States. REIO courts are also best placed to uniformly interpret REIO law, which is an essential goal for the proper functioning of the integration system. From a prospective view, it is worth recalling the proposal to entrust the ICJ with an active role to interpret international instruments on PrIL matters. A concrete idea is to include an optional clause in PrIL conventions, on the basis of Article 36 of the ICJ’s Statute, “providing that any State party to the convention recognises as compulsory, in relation to any other State party accepting the same obligation, the jurisdiction of the ICJ regarding the interpretation and application of the convention.”37 2.

Different Degrees of Dependence

As clear as the dependence of national courts from international ones may be, such dependence materialises in different ways and degrees. Thus, in some cases, the dependence appears as a de jure, mandatory requirement. Domestic courts cannot but defer to the “mandate” of the “superior” court. Within the framework of EU PrIL, such dependence has been emphasised in relation to certain English procedural tools,38 sometimes bitterly.39 Nevertheless, the impact of “superior” court’s decisions on the State courts is sometimes moderated by a recognised margin of appreciation for the latter and the incrementalism developed by the former (as it is the case within the European System of Human Rights);40 more generally, the balance between general mandates and concrete decisions is sought by the admission of the use of some proportional criteria.41 In other words, the “mandate” may be one of principle that State courts accommodate to the particular facts of the concrete case. In other situations, the dependence may affect the conduct of parties in legal disputes in the sense that something which was taken for granted is ultimately excluded because of a sudden change in the criteria followed so far by the “superior” court. The now infamous Achmea decision of the EUCJ42 is illustrative See H. VAN LOON/ S. DE DYCKER (note 7), chap. III. ECJ, 1 March 2005, C-281/02, Andrew Owusu v. N. B. Jackson, ECLI:EU:C:2005:120, on forum non conveniens and ECJ, 10 February 2009, C-185/07, Allianz SpA et Generali Assicurazioni Generali SpA v. West Tankers Inc., ECLI:EU:C:2009:69, on anti-suit injunction, have been particularly notorious in this respect. 39 T.C. HARTLEY, The European Union and the Systematic Dismantling of the Common Law of Conflict of Laws, I.C.L.Q. 2005, Vol. 54-IV, p. 813-828. 40 See J. GERARDS, Margin of Appreciation and Incrementalism in the Case Law of the European Court of Human Rights, Human Rights Law Review 2018, Vol. 18-III, p. 495515. 41 For a general critical assesment, see A. MARZAL YETANO, La dynamique du principe de proportionalité, Paris 2014. 42 ECJ, 6 March 2018, C-284/16, Slowakische Republik v. Achmea BV, ECLI: EU:C:2018:158. 37 38

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Denationalising PrIL in this regard: while the Courts’ finding concerns the incompatibility with EU law of ISDS in the particular intra-EU investment treaty context, the decision has raised some serious concerns for the future of commercial arbitration. The different ways in which such dependence manifests itself concerning PrIL issues, the concrete impact of the dependence (which may include the necessity of legal reform), and the means for moderating that impact, are among the research topics that could be developed as regards the intervention of heteronomous courts in PrIL adjudication. Topics related to different aspects of the potential role of international courts (and namely the Court) in the “authentic” interpretation of the notion contained in PrIL conventions, could further be envisaged. C.

State Adjudicators as Simple “Controllers”

1.

Concerning Foreign and International Courts’ Decisions

If the recognition and enforcement of foreign decisions were understood as the culmination of the exercise of the human right to effective access to justice, rather than as a mere courtesy of the State of enforcement, the power of the courts of this State “to control” those decisions would be somehow diminished.43 This situation does not imply an “automaticity” of the enforcement of foreign decisions but a less strict scrutiny thereof. It goes without saying that I am referring to situations where no international instrument in matters of recognition applies. Conversely, several relevant instruments enable different kinds of “automatic” recognition, which makes the control of the foreign decision a superficial activity. The long road walked by the Hague Conference on PrIL in order to design a general instrument regulating the recognition and enforcement of foreign judgments in civil and commercial matters, as well as the very content of the Convention,44 shows how tough the traditional view on this issue remains to this day. Similarly, in some countries it is still difficult, if not impossible, to enforce a foreign judgment.45 In others, the door to enforcement may only be opened thanks to an international instrument. All these features are well known. I however argue that, as resistant as the traditional view may be, it is incompatible with a notion of jurisdiction based on the fundamental right to effective access to justice. 43 See TRANSJUS, Article 7(1) “The extraterritorial effect of decisions is a fundamental right, closely related to the right to access to justice and fundamental due process rights. Therefore, judges and other State authorities shall always endeavor to favor the effect of foreign decisions when interpreting and applying the requirements those decisions are submitted to.” See, in a similar vein though within the European context, P. KINSCH, Enforcement as a Fundamental Right, Nederlands Internationaal Privaatrecht (NIPR) 2014, p. 540-544. 44 At the conclusion of this contribution, the Diplomatic Session for the adoption of the Convention has not yet been held. I hence refer to the Draft Convention which is likely to be adopted without any significant changes. 45 G. CUNIBERTI, Le fondement de l’effet des jugements étrangers, Recueil des cours, Vol. 394, 2018, p. 87 et seq.

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Diego P. Fernández Arroyo In addition, the enforcement of international courts’ decisions further impacts the role of courts of the State of enforcement. As mentioned above, in some cases the “mandate” of the “superior” court is not susceptible to any control by “dependant” State courts. 2.

Concerning Arbitral Awards and Private Agreements

Firstly it is crystal clear that the New York Convention has transformed international arbitration from a mere option for the settlement of international disputes into the prevalent option. More than that: the mere existence of the Convention – in force in 159 States – is sufficient to ensure compliance on a voluntary basis with an overwhelming majority of existing arbitral awards all over the world; that is, without any necessity of court intervention. Secondly, whenever a party seeks enforcement before a domestic court, the award is enforced in the vast majority of cases. That is to say that we have, in fact, a reduced number of cases in which parties go to courts to ask for the enforcement of an award. And the number of cases in which – maybe – “classic” private international law issues will arise are even fewer. Thirdly, one must mention the grounds for the refusal of enforcement or the challenge of an award, which are quite standardised due to the strong impact of the New York Convention. Lastly, the references of the Convention to traditional conflict of laws are explained by the historical context in which the Convention was adopted. Indeed, sixty years ago the State-centric conflicts paradigm was still prevalent in international arbitration (which had not yet entered into its modern era). Although the specific requirements are different, the very structure adopted by Article V of the New York Convention is replicated in Article 5 of the 2019 Singapore Convention on International Settlement Agreements Resulting from Mediation. Concretely, a request for relief may only be refused by the competent authority if the opposing party demonstrates that one of the grounds included in Article 5(1) is present. Similarly, the competent authority may refuse to grant relief on its own motion on public policy grounds or where the subject matter of the dispute cannot be settled by mediation. As regards ISDS awards rendered within the framework of ICSID, it is well known that Art. 54(1) of the ICSID Convention orders a direct enforcement of the pecuniary obligations imposed by the award within the territory of each contracting State “as if it were a final judgment of a court in that State.” This provision may seem a minor annoyance in a discourse on the denationalisation of PrIL but it is not. Firstly, many ICSID awards involve PrIL aspects. Secondly, there is a de facto exclusive arbitral jurisdiction on this matter. Thirdly, ICSID arbitration represents roughly more than 60% of the settlement of disputes between investors and States. And fourthly, the ICSID Convention has been signed by 163 States and is in force in 154 of them.46 Furthermore, letting aside some initiatives to eliminate any kind of dispute settlement mechanism between investors and States, the 46 Available at .

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Denationalising PrIL proposals for the reform of ISDS, as well as the majority of the instruments recently concluded – even those relying on the creation of international courts – include the direct enforcement of international decisions in the contracting States.47 All this shows that the national character of enforcement, as far as arbitration is at stake, is rather formal. In reality, the enforcers are mostly the private parties involved in the arbitration. Within this context, a topic for further analysis would be to consider the extent to which private enforcers must comply with public requirements, such as the conformity with international public policy.

IV. A Word in Conclusion – Content and Teaching of PrIL The era of a PrIL built on the exclusive foundations of the State is irremediably over. More than that: it can hardly be argued that the State is always the centre of the entire PrIL structure. That may be the case for some specific issues but regarding others the role of the State is at most peripheral. The fabrication and the enforcement, as well as, ultimately, the effectiveness of PrIL considerably depend on different kinds of non-State actors. Specifically, notwithstanding the harsh criticism vis-à-vis arbitration and its legitimacy, arbitration is likely to keep its prominent role in PrIL for long time. As obvious as the impact of the foregoing is, PrIL scholarship – both in books and in university courses – remains largely attached to the State-centric paradigm. In this way, a considerable part of real PrIL is kept out of specialists’ discussions and far from newcomers’ access. This is a regrettable source of misunderstandings. The application of soft law to international relationships and non-State adjudication are both parts of PrIL with an ever growing significance. There is no valid justification for neglecting the latter and considering it as a mere external element which may only eventually have an impact on PrIL. Accordingly, proposals to approach the future evolution of PrIL as a tool to foster global governance (as the efforts for linking PrIL with the UN 2030 Agenda) should not ignore the fundamental role of private adjudication and private enforcement.

47 Available at .

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EUROPEAN COURTS AND THE OBLIGATION (PARTIALLY) TO RECOGNISE FOREIGN SAMESEX MARRIAGES ON ORLANDI AND COMAN Patrick KINSCH*

I. II.

III.

I.

Same-Sex Marriage as a New Form of Limping Marriage The Two Judgments A. Orlandi B. Coman Two Aspects (One Legal, the Other Political) of the Obligation Partially to Recognise Foreign Same-Sex Marriages A. Private International Law Technique B. A Political Aspect

Same-Sex Marriage as a New Form of Limping Marriage

Italy and Romania do not allow for same-sex marriage under their laws. In the case of Romania, this is reflected in Article 277 of the Civil Code, the first two paragraphs of which provide that: “1. Marriage between persons of the same sex shall be prohibited. – 2. Marriages between persons of the same sex entered into or contracted abroad by Romanian citizens or by foreigners shall not be recognised in Romania”.1 In Italy, too, the law for a long time provided neither for same-sex marriage nor even for same-sex civil unions. The Italian Constitutional Court decided in 2010 that it was constitutionally admissible not to allow same-sex partners to marry, but not admissible to leave them without any legal protection.2 The same result was Member of the Luxembourg Bar; Professor, University of Luxembourg. These provisions have the support of Parliament, but a referendum that took place on 6 and 7 October 2018 on the definition of marriage under the Romanian Constitution, and that would have constitutionalised the prohibition of same-sex marriage, failed on the grounds of insufficient turnout. 2 Judgment of 15 April 2010, No. 138. A series of later judgments would confirm that orientation in case law. * 1

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 47-59 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Patrick Kinsch arrived at by the European Court of Human Rights in Oliari and Others v. Italy,3 which held that Italian law in its then form violated the applicants’ right to protection of their private and family life guaranteed under Article 8 of the ECHR. This was not because Italy would have been obliged to introduce same-sex marriage into its legislation (that was not the case: the ECtHR considered that this question remained within the “margin of appreciation” that the Convention leaves its contracting States),4 but because Italy had failed to comply with its positive obligation to provide a legal framework allowing the applicants to have their relationship recognised and protected under domestic law. In 2016, Italian law was changed – but not by the introduction of same-sex marriage. The law now provides for same-sex civil unions, a legal regime that extends the incidents (but not the name) of marriage to couples of the same sex applying for registration of their union.5 The laws of other States disagree, and permit persons of the same sex to marry, typically extending that possibility to people whose personal law does not provide for same-sex marriage.6 The resulting marriage may sometimes be recognised by the national law, or the law of the domicile or habitual residence, of same-sex spouses married abroad despite the fact that their personal law does not allow for same-sex marriages at home.7 Nonetheless, in all probability the recognition of same-sex marriages entered into abroad will be refused, either for reasons ECHR, 21 July 2015, Oliari and Others v. Italy, App. Nos 18766/11 and 36030/11. See, in earlier ECHR case law, ECHR, 24 June 2010, Schalk and Kopf v. Austria, App. No. 30141/04. 4 §§ 189-194. 5 Law No. 76 of 20 May 2016 on the Regulation of civil unions between people of the same sex and the rules relating to cohabitation. 6 In the Netherlands and in Luxembourg, that possibility exists under the Hague Convention of 14 March 1978 on the Celebration and Recognition of the Validity of Marriages, which these States have ratified (together with Australia). Article 3 of the Convention (a provision of general application that can also be applied to same-sex marriages – and will be in contracting States whose law recognises the possibility of such marriages) provides that a marriage can be celebrated, inter alia, “where the future spouses meet the substantive requirements of the internal law of the State of celebration and one of them has the nationality of that State or habitually resides there”. This provision does not require the marriage to be valid under the substantive requirements of each spouse’s personal law. Similar provisions, but specifically drafted for same-sex marriages, exist under the national rules of private international law of most of the States permitting those marriages; on the constitutionality of Article 202-1, para. 2 of the French Civil Code, a special (and more favourable) choice of law rule for same-sex marriages, see Conseil constitutionnel, decision of 17 May 2013, no. 2013-669 DC, para. 29: held that there was no violation of the constitutional principle of equality, since the situation of persons of foreign nationality involved in same-sex marriages which may not be permissible under their national law differs fundamentally from the situation of heterosexuals seeking to marry. 7 This is the solution adopted by the Hague Convention of 1978. Under Article 9, “[a] marriage validly entered into under the law of the State of celebration or which subsequently becomes valid under that law shall be considered as such in all Contracting States”, subject to a limited number of exceptions which reflect public policy considerations. 3

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European Courts and Foreign Same-Sex Marriages of incompatibility with the (frequently followed) rule subjecting the capacity to marry, even abroad, to the personal law of the spouses, or, as an ultima ratio, on grounds of public policy. The reason why anyone would wish to enter into a limping marriage such as this can vary. First situation: the spouses have their habitual residence, say, in the Netherlands and have entered into a marriage there in accordance with Dutch private international law. They may be Italian or Romanian, but their concern was not with the attitude of the law of their national States, it was with the law of the Netherlands, where they lived. Much later, they have decided to return to their country of origin, and the question of recognition of their marriage arises at that stage only. Second situation: the spouses take advantage of the liberal rule on same-sex marriage of a foreign State (and of a liberal rule on the possibility for temporary residents to marry), and immediately return to their home State and request recognition of their marriage there. There are a variety of possible reasons for this kind of matrimonial tourism.8 The spouses may simply be ignorant of the absence of effects of their marriage in their home country (unlikely). Or, they may intend to marry for essentially symbolic reasons, accepting that the marriage may have no effect, or perhaps only reduced effects, under their home laws. Or, finally, their intention may be more militant; they may wish to marry and to fight for recognition of their marriage in their home country, with the fight going all the way up to the highest courts in the land, or perhaps to the European courts. In Romania and in Italy, same-sex marriages entered into abroad by nationals of those States cannot be recognised as such.9 What is provided for in Italy, since the introduction of same-sex civil unions into Italian law in 2016, is recognition of the effects of a foreign same-sex marriage to which an Italian citizen is a party, not as a marriage but as a civil union within the meaning of Italian law.10 The positions of Italian law (as it was prior to the 2016 legislative change) and of Romanian law were put to the test of the right to private life and to family life within the meaning of the ECHR and of freedom of movement in combination with those two rights within the meaning of EU law, respectively, by two cases decided within six months of each other: Orlandi and Others v. Italy in the 8 The term is not intended to be deprecatory, as will be apparent from the text. Matrimonial tourism is, incidentally, an old phenomenon: “Gretna Green” marriages, taking advantage of the difference between the marriage laws of England and of Scotland, have been recorded at least since the 18th century. 9 In Romania, this follows from the wording of Article 277(2) of the Civil Code (note 1). In Italy, an extremely complicated judgment of the Corte di cassazione of 15 March 2012, no. 4184, Riv. dir. int. priv. proc. 2012, p. 747, decided that such foreign marriages, without being against public policy, can produce no “legal effect” within the Italian legal system in the absence of a statutory basis for their existence. 10 Article 32-bis of the Italian law on private international law (law no. 218 of 1995), as amended in 2016. For commentaries on the private international aspects of the law on civil unions, see C. CAMPIGLIO, La disciplina delle unioni transnazionali e dei matrimoni esteri tra persone delle stesso sesso, Riv. dir. int. priv. proc. 2017, p. 33 et seq.; S. BARIATTI, Les nouvelles dispositions de droit international privé italien sur les unions civiles, in B. HESS, E. JAYME, H.-P. MANSEL (eds), Europa als Rechts und Lebensraum: Liber Amicorum für Christian Kohler, Bielefeld 2018, p. 1 et seq.

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Patrick Kinsch European Court of Human Rights11 and Relu Adrian Coman and Others v. Inspectoratul General pentru Imigrări and Ministerul Afacerilor Interne, a judgment of the Grand Chamber of the European Court of Justice.12

II.

The Two Judgments

A.

Orlandi

The case of Orlandi and Others v. Italy arose out of the refusal of the Italian courts to recognise same-sex marriages entered into abroad (in the Netherlands or in Canada) by Italian citizens, who in some cases were permanent residents of the State of celebration of their marriage and in others were Italian residents who had taken advantage of a brief stay in the country of celebration to get married and had then returned immediately to Italy, presumably without any firm conviction that the marriage would necessarily be recognised. The Court did not go into that distinction, which was irrelevant given that it approached the applications on the basis of the violation of the applicants’ right to protection of their private life and family life (Article 8 of the Convention). The Court’s approach consisted in essence in repeating its holding in Oliari.13 There is no obligation for Italy to create same-sex marriages in its legislation, nor is Italy required to recognise same-sex marriages entered into by its nationals abroad.14 In particular, Italy is not obliged to accept the circumvention of its laws by its citizens: “As to the interests of the State and the community at large, in respect of the failure to register such marriages, the Court can accept that to prevent disorder Italy may wish to deter its nationals from having recourse in other States to particular institutions which are not accepted domestically (such as same-sex marriage) and which the State is not obliged to recognise from a Convention perspective. Indeed the refusals in the present case are the result of the legislator’s choice not to allow same-sex marriage – a choice not 11 ECHR, 14 December 2017, Orlandi and Others v. Italy, App. Nos. 26431/12, 26742/12, 44057/12 and 60088/12. 12 ECJ, 5 June 2018, C-673/16, Relu Adrian Coman and Others v. Inspectoratul General pentru Imigrări and Ministerul Afacerilor Interne, ECLI:EU:C:2018:385. 13 See note 3. 14 § 200: “Article 8 does not enlist the notion of ‘public order’ as one of the legitimate aims in the interests of which a State may interfere with an individual’s rights. However, bearing in mind that it is primarily for the national legislation to lay down the rules regarding validity of marriages and to draw the legal consequences […], the Court has previously accepted that national regulation of the registration of marriage may serve the legitimate aim of the prevention of disorder […]. Thus, the Court can accept for the purposes of the present case that the impugned measures were taken for the prevention of disorder, in so far as the applicants’ position was not provided for in domestic law.”

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European Courts and Foreign Same-Sex Marriages condemnable under the Convention. Thus, the Court considers that there is also a State’s legitimate interest in ensuring that its legislative prerogatives are respected and therefore that the choices of democratically elected governments do not go circumvented”.15 It was because no protection at all existed for same-sex couples in Italy that the Convention had been violated, not because a status acquired abroad had not been recognised in Italy: “The Court notes that the refusal to register the applicants’ marriage did not deprive them of any rights previously recognised in Italy (had there been any), and that the applicants could still benefit, in the State where they contracted marriage, from any rights and obligations acquired through such marriage. However, the decisions refusing to register their marriage under any form, thus leaving the applicants in a legal vacuum (prior to the new laws), failed to take account of the social reality of the situation. Indeed, as the law stood before the introduction of Law no. 76/2016 and subsequent decrees, the authorities could not formally acknowledge the legal existence of the applicants’ union (be it de facto or de jure as it was recognised under the law of a foreign state). The applicants thus encountered obstacles in their daily life and their relationship was not afforded any legal protection. No prevailing community interests have been put forward to justify the situation where the applicants’ relationship was devoid of any recognition and protection.”16 The specific reference to the “legal vacuum” in which the applicants were left prior to the new laws (on civil unions) shows that, for the court, recognition of the marriages under the guise of civil unions within the meaning of Italian law would have been sufficient – but at the time in question there was no civil union in Italy. Hence the legal vacuum deplored by the court, and hence the judgment against Italy.17 15 § 207. The last sentence of the paragraph is closely inspired by the Court’s holding in ECHR, 26 April 2014, Labassée v. France and Mennesson v. France, App. nos. 65041/11 and 65192/11, §§ 63 and 84, respectively; the cases concerned the refusal by the French courts to recognise parentage resulting from foreign surrogacy (see G. KESSLER, Recognition of International Surrogacy in France – The Bypass Strategy, this Yearbook 2017/2018, Vol. 19, p. 487 et seq.). But it should be noted that the circumvention argument applies with less force (and sometimes, depending on the circumstances, with no force at all) to marriages entered into by Italians who are long-term residents of the country of celebration of the marriage. 16 §§ 208 and 209. 17 An otherwise valuable critical commentary on the Orlandi judgment by H. FULCHIRON, La CEDH et la reconnaissance des mariages entre personnes de même sexe célébrés à l’étranger: avis de tempête ou signal brouillé?, Dalloz 2018, p. 446 et seq., considers that the Court’s judgment left Italy (and other contracting States which do not recognise same-sex marriages) in a state of confusion over the measures that could be taken

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Patrick Kinsch B.

Coman

A Romanian national, Mr Coman, had lived together with an American citizen, Mr Hamilton, in the United States for four years before getting married in Brussels in 2010. In 2012, Mr Coman and his husband contacted the Romanian authorities to request information on the procedure and conditions under which Mr Hamilton, in his capacity as a member of Mr Coman’s family, could obtain the right to reside lawfully in Romania for more than three months. The Romanian authorities replied that Mr Hamilton only had a right of residence for three months, on the grounds, in particular, that he could not be considered in Romania to be the “spouse” of an EU citizen, as Romania does not recognise marriage between persons of the same sex. Mr Coman and Mr Hamilton therefore brought an action before the Romanian courts seeking a declaration of discrimination on grounds of sexual orientation as regards the exercise of the right of freedom of movement within the EU. In order to be able to rule on an objection of unconstitutionality raised in those proceedings, the Constitutional Court asked the ECJ whether, under Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, Mr Hamilton might be regarded as the “spouse” of an EU citizen who had exercised his right to freedom of movement, and whether he must therefore be granted a permanent right of residence in Romania. In its judgment, the ECJ stated that the case was to be decided by reference to the rules on European citizenship and on the right to freedom of movement of EU citizens,18 which implies a right for EU citizens who have exercised their right to freedom of movement in the Union to return to their home State accompanied by their spouse. A derived right of residence may therefore be granted to the spouses of EU citizens. Directive 2004/38/EC must be applied, by analogy, to that situation. According to the Court, the term “spouse”, which refers to a person joined to another person by the bonds of marriage, is “gender-neutral and may therefore cover the same-sex spouse of the Union citizen concerned.” Nevertheless, the Court stated that a person’s status, which is relevant to the rules on marriage, is a matter that falls within the competence of the Member States, and that EU law does not detract from that competence, the Member States being free to decide whether or not to allow same-sex marriage. Freedom of movement for persons may be subject to restrictions independently of the nationality of the persons concerned, if the restrictions are based on objective public-interest to avoid similar violations in the future. But in reality § 209 is quite clear and shows that by creating a mechanism similar to the new Italian civil unions and by providing for the possibility of recognising foreign same-sex marriages as civil unions, States can avoid violating the Convention. 18 And not directly by reference to the directive that had been the subject of the preliminary reference by the Romanian Constitutional Court. The reason given was that Directive 2004/38/EC governs only the conditions determining whether EU citizens can enter and reside in Member States other than that of which they are nationals and does not confer a derived right of residence on nationals of a non-EU State who are family members of an EU citizen in the Member State of which that citizen is a national.

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European Courts and Foreign Same-Sex Marriages considerations and are proportionate to a legitimate objective pursued by national law. Public policy, which was put forward as the justification for restricting the right to freedom of movement, must be interpreted strictly, with the result that its scope cannot be determined unilaterally by each Member State without any control by the EU institutions. The obligation for a Member State to recognise a same-sex marriage concluded in another Member State in accordance with the law of that State, “for the sole purpose of granting a derived right of residence to a national of a non-EU state”,19 does not undermine the institution of marriage in the first Member State. Here is how the Court dealt with the public policy argument drawing on “national identities” and the definition of marriage (a difficult argument because it is essentially an ideological one, but one based on a provision of the Treaty on European Union, Article 4(2)): “As regards public-interest considerations, a number of Governments that have submitted observations to the Court have referred in that regard to the fundamental nature of the institution of marriage and the intention of a number of Member States to maintain a conception of that institution as a union between a man and a woman, which is protected in some Member States by laws having constitutional status. […] In that regard, it must be noted that the European Union is required, under Article 4(2) TEU, to respect the national identity of the Member States, inherent in their fundamental structures, both political and constitutional (see also, to that effect, judgment of 2 June 2016, Bogendorff von Wolffersdorff, C-438/14, EU:C: 2016:401, paragraph 73 and the case-law cited). […] The Court finds, in that regard, that the obligation for a Member State to recognise a marriage between persons of the same sex concluded in another Member State in accordance with the law of that state, for the sole purpose of granting a derived right of residence to a third-country national, does not undermine the institution of marriage in the first Member State, which is defined by national law and […] falls within the competence of the Member States. Such recognition does not require that Member State to provide, in its national law, for the institution of marriage between persons of the same sex. It is confined to the obligation to recognise such marriages, concluded in another Member State in accordance with the law of that state, for the sole purpose of enabling such persons to exercise the rights they enjoy under EU law. Accordingly, an obligation to recognise such marriages for the sole purpose of granting a derived right of residence to a third-country 19 The reference to that “sole purpose” is formulated not once, but five times, in the grounds for the judgment (paras. 36, 40, 45 [twice], 46).

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Patrick Kinsch national does not undermine the national identity or pose a threat to the public policy of the Member State concerned.”20 The Court clearly considered it preferable to take precautions against being accused of disregarding national identities. But it also showed its continuing adherence to liberal principles – not only the specific EU principles of freedom of movement, but also the fundamental rights enshrined in the EU Charter of Fundamental Rights. Article 7 of the Charter, on the protection of private life and of family life, is modelled on Article 8 of the ECHR and is construed by reference to the jurisprudence of the ECtHR.21 The ECJ notes that it is apparent from the case-law of the European Court of Human Rights that the relationship of a homosexual couple may fall within the notion of “private life” and that of “family life” in the same way as does the relationship of a heterosexual couple in the same situation.22

III. Two Aspects (One Legal, the Other Political) of the Obligation Partially to Recognise Foreign SameSex Marriages A.

Private International Law Technique

The application of the techniques of private international law to the recognition, and effects, of foreign marriages is, of course, of interest to the readers of this contribution. Yet readers should be aware that those techniques are most definitely not at the centre of either case. The ECtHR administers only human rights law and, while it may take account of the solutions offered by national law such as those of private international law, it does not consider itself bound to formulate its holdings in terms of private international law, and does not in fact do so.23 And even the ECJ, which does sometimes render judgments on proper questions of private international law (as will be the case for preliminary references on the construction of one of the EU regulations on private international law), will not, or at least not normally, formulate its decisions on citizenship of the Union and on freedom of movement (any more than on any of the other fundamental freedoms of EU law) by referring to the technical categories of private international law.24 It did not do

Paras. 42-43 and 45-46. Para. 49, referring to the Explanations relating to the Charter of Fundamental Rights (OJ 2007 C 303, p. 17), and to Article 52(3) of the Charter. 22 Para. 50, referring inter alia to Oliari v. Italy (note 3). 23 For details, see P. KINSCH, Private International Law Topics Before the European Court of Human Rights, this Yearbook 2011, Vol. 13, p. 37-39. 24 This has even been true where justifications in private international terms were relied on by national governments for interferences with fundamental freedoms. See, for 20 21

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European Courts and Foreign Same-Sex Marriages so in Coman. This explains the fact – irritating, perhaps, for private international lawyers, but entirely proper in view of the subject matters that the Courts had to deal with – that both cases reason in substantive terms, in terms of the fundamental rights that were at stake rather than in terms of the correct categorisation in private international law. This does not mean that it is impossible to analyse the judgments in private international law terms. That merely involves a change of perspective. In terms of private international law, both cases can be considered with a view to determining the extent to which European law (ECHR law and/or EU law) creates an obligation to recognise foreign marriages independently of the operation of the recognising (contracting or Member) State’s own choice of law rules. That method may be part of the positive private international law of the relevant State,25 or it may correspond to doctrinal suggestions tending to generalise its use.26 There are European cases which can be cited as creating an obligation to recognise foreign-created rights,27 but Orlandi and even Coman are not truly among them. Orlandi does not create an obligation to “recognise” foreign marriages, in the private international sense, at all. It confirms that Italy was not obliged to register the same-sex marriages of the applicants. What Italy was obliged to do was to example, ECJ, 23 November 1999, Arblade, C-369/96 and C-376/96, ECLI:EU:C:1999:575, para. 31: “The fact that national rules are categorised as public-order legislation [in the original French text of the judgment: lois de police et de sûreté – “overriding mandatory provisions”] does not mean that they are exempt from compliance with the provisions of the Treaty; if it did, the primacy and uniform application of Community law would be undermined. The considerations underlying such national legislation can be taken into account by Community law only in terms of the exceptions to Community freedoms expressly provided for by the Treaty and, where appropriate, on the ground that they constitute overriding reasons relating to the public interest.” 25 In the field of recognition of marriages, this is true of the States that have ratified the Hague Convention of 1978 (see above, note 7) or of other States that have incorporated the “recognition method” into their autonomous private international law, see, for example, (with reference to Israeli law), T. EINHORN, Israeli International Family Law – the Liberalization of Israeli Substantive Family Law, in H.-E. RASMUSSEN-BONNE/ R. FREER/ W. LÜKE/W. WEITNAUER (eds), Balancing of Interests: Liber Amicorum Peter Hay, Frankfurt 2005, p. 141; Y. COHEN, Recognition and Non-Recognition of Foreign Civil Marriages in Israel, this Yearbook, Vol. 18, 2016-2017, p. 321-340. 26 See P. LAGARDE, La méthode de la reconnaissance est-elle l’avenir du droit international privé?, Recueil des Cours, Vol. 371, 2014, p. 9 et seq. 27 Under EU law, the Centros case (ECJ, 9 March 1999, Centros, C-212/97, ECLI:EU:C:1999:126) has clearly been seminal in a liberal (or neoliberal) spirit, as is shown by the citation of that case relating to the obligation to recognise companies incorporated abroad in a later case that concerned the obligation – save where public policy justifies a different solution – to recognise family names acquired in another Member State: ECJ, 2 June 2016, Bogendorff von Wolffersdorff, C-438/14, ECLI:EU:C:2016:401, para. 57. Under the ECHR, 28 June 2007, Wagner and J.M.L.W. v. Luxembourg, App. No. 76240/01 has proved similarly seminal, but in a different spirit, much more oriented towards the protection of justified expectations.

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Patrick Kinsch provide “any form” of registration of the union between the applicants, “be it de facto or de jure as it was recognised under the law of a foreign state”.28 In other words, under Orlandi the only requirement of the Convention, with respect to same-sex marriages entered into abroad, is to extend to them exactly the same kind of substantive recognition that has to be granted to same-sex unions under domestic law: Orlandi creates nothing more, in terms of obligations for Italy, than the earlier case of Oliari and Others v. Italy.29 The solution later provided by Italian law is therefore satisfactory, although it does not involve recognition of the right to marry in Italy, or to have a foreign marriage recognised there as such: it is sufficient for Italian law to offer same-sex civil unions and to offer the registration of same-sex marriages entered into abroad, not as marriages but as civil unions within the meaning of Italian law. Technically, the obligation that exists under the ECHR is either to proceed to a full recognition of those marriages as marriages or, failing that, to allow for a recharacterisation30 of foreign marriages as civil unions within the meaning of Italian law. The latter solution, equally acceptable under the ECHR, is equivalent to a “transposition” of a foreign legal institution,31 or (using different terminology) to an “assimilation” of the foreign institution of same-sex marriage to an institution known to forum law, in this case a civil union.32 In sum, the obligation under the ECHR is an obligation partially to recognise foreign same-sex marriages: they do not need to be recognised as marriages, but to be recognised, at least, as civil unions. Also, the obligation is not specific to the situation of same-sex couples who have been married abroad: it is a mere corollary of the obligation to create a legal status for same-sex couples under the law of the contracting State concerned. Coman, it is true, is expressed in terms of “the obligation for a Member State to recognise a marriage between persons of the same sex concluded in another Member State in accordance with the law of that state”,33 but “for the sole purpose of granting a derived right of residence to a third-country national”. That the Member State (Romania, in this case) is not obliged to recognise the marriage for all purposes is at the centre of the Court’s reasoning, based on a compromise between the individual rights of European citizens exercising their right to freedom of movement and the “national identity” of a State that intends to restrict marriage § 209. See note 3. 30 Within the meaning of substantive law; the issue of “characterisation” in terms of choice of law rules is not involved. 31 See H. LEWALD, Règles générales des conflits de lois. Contribution à la technique du droit international privé, Recueil des Cours, Vol. 69, 1939, para. 54 ; based on LEWALD’s classical contribution, D. HOLLEAUX/ J. FOYER/ G. DE GEOUFFRE DE LA PRADELLE, Droit international privé, Paris 1987, para. 623 ; D. BUREAU/ H. MUIR WATT, Droit international privé, 4th ed., Paris 2017, Vol. I, para. 483. 32 Cf., commenting on the rule (similar to the present rule of Italian law) of Article 45(3) of the Swiss PIL Statute of 1987 as amended: A. BUCHER in Commentaire romand, LDIP-CL, Basle 2011, Art. 45, para 30 (the author of that commentary also refers to “transformation” of the foreign marriage into a registered partnership, ibid., para 31). 33 Para. 45. 28 29

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European Courts and Foreign Same-Sex Marriages as such to opposite-sex couples. As the commentators on the Coman judgment have pointed out, it is unlikely that the obligation to recognise same-sex marriages will remain entirely confined to the right of a third-country national to reside in the EU; in particular, some types of social rights are necessarily linked to the right of residence.34 Beyond that, the true question is whether the obligation to recognise marriages extends to private law35 – on the model of the obligation, likewise based on European citizenship and the right to freedom of movement, for a Member State to recognise the acquisition of a family name in another Member State.36 But it is clearly impossible to draw that inference from Coman itself, given the pains that the Court took to limit its holding specifically to the “sole purpose” of granting a derived right of residence to a third-country national married to an EU national. It is possible, of course, that future cases in the ECJ will decide to generalise the obligation to recognise same-sex marriages, including as to their private law effects. It is also quite possible, however, that the ECJ will not go beyond the position taken by the ECtHR in Orlandi and will consider it sufficient that a Member State extends limited recognition to such marriages by assimilating them to civil unions. After all, in matters of European citizenship and freedom of movement the ECJ’s powers are limited to the elimination of unjustified restrictions on the right to freedom of movement for persons; it will be difficult to hold, in a future case, that the assimilation of a foreign marriage to a civil union, with all the incidents of a marriage except for its name, is an unjustifiable restriction of the right to freedom of movement. The Italian solution, of partial recognition by assimilation to civil unions, is a minimum under the case law of the ECtHR. It will probably also be deemed sufficient by the ECJ – at least for the time being. Whether the jurisprudence of either court will at some stage go beyond that and require full recognition of the right to marry for same-sex couples or, in the case of the ECJ, full recognition of the civil effects of these marriages if they have been entered into abroad by EU citizens exercising their right to freedom of movement, is likely to depend on elements that go beyond the purely legal and include political developments. To these we now turn.

34 E. PATAUT, Rev. trim. dr. eur. 2018, p. 673; P. HAMMJE, Rev. crit. dr. int. pr. 2018, p. 816; J.-Y. CARLIER, Rev. trim. dr. h. 2019, p. 203. 35 M. FALLON, Cahiers de l’EDEM June 2018; G. KESSLER, Clunet 2019, p. 27, tend towards that view. 36 See ECJ, 2 October 2003, Garcia Avello, C-148/02, ECLI:EU:C:2003:539; ECJ, 14 October 2008, Grunkin and Paul, C-353/06, ECLI:EU:C:2008:559; ECJ, 8 June 2017, Freitag, C-541/15, ECLI:EU:C:2017:432. The ECJ judgments of 22 December 2010, Sayn-Wittgenstein, C-208/09, ECLI:EU:C:2010:806 and of 2 June 2016, Bogendorff von Wolffersdorff, C-438/14, ECLI:EU:C:2016:401, state the same principle but reserve the possibility that recognition of a newly acquired (pseudo-)aristocratic name may be denied in Austria and in Germany by reference to their constitutional egalitarian values. See also S. PFEIFF, La portabilité du statut personnel dans l’espace européen, Brussels 2017.

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Patrick Kinsch B.

A Political Aspect

“The nature of injustice is that we may not always see it in our own times.”37 That statement, which in the light of human experience is all too true, is part of the majority opinion in Obergefell v. Hodges, the United States Supreme Court case that declared unconstitutional all American State laws not providing for the possibility for same-sex couples to marry (and which also declared, incidentally, that there is no lawful basis, including in the federal “Defense of Marriage Act”, for a State to refuse to recognise a lawful same-sex marriage performed in another State on the grounds of its same-sex character).38 It is obvious that neither the ECtHR nor the ECJ have had, up to now, their Obergefell v. Hodges moment. On the contrary, they have adopted an attitude of great prudence in handling the issue of same-sex marriages, both in its domestic law aspects and in its private international law aspects. Both European Courts have shown a great measure of judicial restraint, of regard for subsidiarity or “national identity” (in EU terms) or the national margin of appreciation (in ECHR terms) – and, correspondingly, a willingness to prefer practical measures, such as the Italian civil union solution, over symbolism in defence of the idea of equal access to marriage regardless of sexual orientation.39 This is not to say that the present European compromise between the demands of respect for fundamental rights and the demands of respect for what the ECtHR termed, in Orlandi, the “choices of democratically elected governments”40 is a bad one. It is probably the best solution in the present political climate, realistically assessed. We live in times where it is claimed, including by the representatives of some European governments, that “illiberal democracy” is preferable to “liberal non-democracy”; where this view becomes that of the majority, its effects on the law41 will be much more alarming than the Orlandi and Coman compromises. Let us finish by mentioning a dissenting opinion by two judges of the ECtHR, added to the Orlandi judgment. Some readers may be unhappy with the holding of the Court for having insufficiently protected the interests of same-sex Obergefell v. Hodges, 135 S.Ct. 2584, 2598 (2015) (Kennedy J.). At p. 2608. 39 By contrast, the symbolic aspect of opening up “marriage” to all couples has been very much at the centre of the American cases, not only Obergefell v. Hodges, but also the earlier cases in the Supreme Courts of, for instance, Massachusetts (Opinions of the Justices to the Senate, 440 Mass. 1201 (2004): “[Creating] a new legal status, ‘civil union’, that is purportedly equal to ‘marriage’, yet separate from it” and thereby “[m]aintaining a secondclass citizen status for same-sex couples by excluding them from the institution of civil marriage is the constitutional infirmity at issue.”) or California (In re Marriage Cases, 43 Cal. 4th 757, 830-831 (2008)). 40 See above, text at note 15. 41 Possibly even on private international law (and certainly on areas of the law on the periphery of private international law, such as the law of immigration). Cf., by the present author, Le rôle du politique en droit international privé, to be published in the Recueil des cours, paras. 160 seq., on a populist or “illiberal” orientation as one hypothesis for the future of private international law (although, the author hastens to make clear, not his preferred one). 37 38

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European Courts and Foreign Same-Sex Marriages couples; the dissenting judges thought that the majority of the Court had gone too far: “To sum up: in our view the majority have departed from the applicable rules of Convention interpretation and have imposed positive obligations which do not stem from this treaty. Such an adaptation of the Convention comes within the exclusive powers of the High Contracting Parties. We can only agree with the principle: ‘no social transformation without representation’.”42

42 Orlandi and Others v. Italy, dissenting opinion by Judges PEJCHAL and WOJTYCZEK, para. 14.

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NEW RULES ON INTERNATIONAL JURISDICTION OVER DIVORCE IN JAPANESE COURTS Yasuhiro OKUDA*

I. II. III.

IV.

Introduction Outline of the New Rules Critical Analysis A. Domicile of Defendant: Principal Element or Only One of Many? B. Matrimonial Domicile C. Common Nationality D. Emergency Cases and Forum Non Conveniens E. Impact on Recognition of Foreign Judgments Final Remarks

I.

Introduction

Under Japanese law, as well known, spouses can divorce by mutual agreement (Kyôgi Rikon, Art. 763 Civil Code).1 They need not appear in court; rather, they may appear before the family registration official to file for divorce by mutual agreement (Kyôgi Rikon Todoke, Art. 739, 764 Civil Code).2 Even if one of the spouses is not Japanese, divorce by mutual agreement is permitted in many cases because Japanese law is applicable if the other spouse is a Japanese national with habitual residence in Japan (Art. 27 Act on the General Rules of Application of Laws).3 Professor at Chuo University, Law School. The author thanks Trevor Ryan (Associate Professor at University of Canberra, School of Law & Justice) for revising the English text. Abbreviations of the Japanese law reports: Minshû [Official journal on the Supreme Court decisions in civil and commercial matters]; Shûmin [Journal on the Supreme Court decisions in civil and commercial matters]; Katei Saiban Geppô, [Official journal on the decisions in family matters]; Hanrei Jihô [Journal on court decisions]; Hanrei Taimuzu [Journal on court decisions]. 1 Civil Code (Minpô), Law No. 89 of 1896, last amended by Law No. 72 of 2018. 2 The filing for divorce by mutual agreement is similar to the one for marriage. Thus, Article 739 on the filing for marriage applies mutatis mutandis to divorce according to Article 764. 3 Act on the General Rules of Application of Laws (Hô no Tekiyô ni kansuru Tsûsoku Hô), Law No. 78 of 2006. For an English translation by K. ANDERSON/ Y. OKUDA, see this Yearbook, vol. 8 (2006), p. 427-441. Art. 25 on the law applicable to the effect of *

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Printed in Germany

Yasuhiro Okuda However, if the spouses do not reach a mutual agreement, divorce is complicated in Japan. They should in principle file for mediation to the family court (Art. 244, 257 Act on Procedure in Family Matters).4 The certificate indicating that they have reached a divorce agreement after mediation is afforded the same force as a judgment of the court (Art. 268 para. 1 the same Act). A divorce by mediation (Chôtei Rikon) is similar to a divorce by mutual agreement before the family registration official, though the latter does not have the same force as a judgment. 5 Even if the spouses do not reach an agreement for divorce after mediation, the judge of the family court can make a decision as an alternative to mediation considering all circumstances of the spouses (Chôtei ni kawaru Shinpan, Art. 284, para. 1 the same Act). However, if one or both of the spouses files a formal objection within two weeks, the decision loses its effect (Art. 279 para. 2, Art. 286 para. 1 to 5 the same Act). If neither of the spouses files such an objection, the decision is afforded the same force as a judgment of the court (Art. 287 the same Act). The divorce by decision (Shinpan Rikon) is to be distinguished from the divorce by mutual agreement or by mediation. It is easily blocked by objection of the spouses. If none of these three divorce options is available, the spouse who wants to divorce must file a suit against the other spouse in family court. The divorce by judgment (Hanketsu Rikon) is not regulated by the Act on Procedure in Family Matters but the Act on Litigation in Personal Matters (Art. 2 no. 1).6

marriage applies in principle mutatis mutandis to divorce – that is, the same national law of the spouses, or where the national law is not the same, the law of the same habitual residence, or where none of these is applicable, the law of the place with which the spouses are most closely connected. However, there is a proviso in case of divorce; namely, where one of the spouses is a Japanese national with his or her habitual residence in Japan, the divorce is always governed by Japanese law. This exception aims to facilitate the task of the family registration official to determine whether the filing for divorce by mutual agreement is acceptable or not. See Y. OKUDA, Divorce, Protection of Minors, and Child Abduction in Japan's Private International Law, in J. BASEDOW/ H. BAUM/ Y. NISHITANI (ed.), Japanese and European Private International Law in Comparative Perspective, Tübingen 2008, p. 302-304. 4 Act on Procedure in Family Matters (Kaji Jiken Tetsuzuki Hô), Law No. 52 of 2011, last amended by Law No. 72 of 2018. The law is similar to the German, Swiss and Austrian laws regarding voluntary jurisdiction (freiwillige Gerichtsbarkeit). It regulates the procedure in non-contentious family matters such as guardianship, adoption (as a child), parental authority, and maintenance, as well as mediation before family courts in contentious family matters. 5 As a result, one of the spouses can file for the annulment of divorce by mutual agreement due to fraud or intimidation (Art. 747, 764 Civil Code). 6 Act on Litigation in Personal Matters (Jinji Soshô Hô), Law No. 109 of 2003, last amended by Law No. 20 of 2018. The law supplements the CCP with special rules for cases in personal matters. Within the meaning of this law, the cases in personal matters are those involving matrimonial relations such as divorce and marriage annulment, parent-child relations, such as denial of legitimacy, acknowledgment of a child and annulment of acknowledgment, as well as adoptive parent-child relations such as dissolution or annulment of adoption.

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Jurisdiction in Divorce Cases in Japan There was, for a long time, no written rule on international jurisdiction over divorce by mediation, decision and judgment, though the laws mentioned above provided for domestic jurisdiction, that is, the Japanese family court’s jurisdiction over divorce (Art. 245, 246 Act on Procedure in Family Matters, Art. 4 to 8 Act on Litigation in Personal Matters).7 Law No. 20 of 2018, which introduced new rules on the international jurisdiction of Japanese courts, came into force on 1 April 2019. As usual in Japan, the drafters declared that the new rules are based on the former case law of the Japanese courts.8 However, the former case law on international jurisdiction was ambiguous and contradictory, and some of the cases are questionable in their conclusions. This paper will provide first an outline of the new rules, and then a critical analysis considering the former case law, in which the domicile of the defendant, the matrimonial domicile and the common nationality, as well as the emergency cases and forum non conveniens are discussed. The impact of the new rules on recognition of foreign judgments will be examined, and the paper will finally comment on future Japanese practice and differences between Japanese law and European laws.

II.

Outline of the New Rules

Though the new rules on international jurisdiction of Japanese courts concern the whole family and their personal matters, 9 this paper focuses on divorce. As mentioned above, divorce is permitted in Japan not only by judgment but also by mediation or decision of the family court.10 However, when one spouse objects to 7 In contrast, the rules on international jurisdiction in civil and commercial matters are provided since 2012 in the CCP. See Y. OKUDA, New Provisions on International Jurisdiction of Japanese Courts, in this Yearbook, vol. 13 (2011), p. 367-380 with further references. 8 Legal System Investigation Commission, Working Group on Law of International Jurisdiction in Personal and Family Matters (Hôsei Shingikai Kokusai Saiban Kankatsu Hôsei (Jinji Soshô Jiken oyobi Kaji Jiken Kankei) Bukai), Minutes of the 18th Meeting, 18 September 2015, p. 1 et seq., available at . 9 As of the date of this publication, comments on the new rules are only published in Japanese: M. NAITÔ (ed.), Ichimon Ittô Heisei 30-nen Jinji Soshô Hô Kaji Jiken Tetusduki Hô tô Kaisei [Q&A on Reform of Act on Litigation in Personal Matters, Act on Procedure in Family Matters and Others in 30th Year of Heisei Era], Tokyo 2019; Tokushû 1 Jinji Soshô Hô tô no Kokusai Saiban Kankatsu Hôsei no Kaisei [Special Feature 1: Reform of Law of International Jurisdiction for Litigation in Personal Matters and Others], in Ronkyû Jurisuto, No. 27 (2018), p. 4-54. 10 The Japanese courts have jurisdiction over divorce by mediation, where they have jurisdiction over divorce by judgment (according to the Act on Litigation in Personal Matters), where the party other than the one who filed the mediation is domiciled in Japan, or if the domicile is not found or unknown, that party resides in Japan, or where the parties agreed to file the mediation in Japan (Art. 3-13, para.1, Act on Procedure in Family

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Yasuhiro Okuda the divorce, the other spouse has no choice other than to file suit for a judgment under the Act on Litigation in Personal Matters (hereinafter cited as ALPM). The following outlines the rules on jurisdiction of the Japanese courts over divorce by judgment. For matters of divorce, Japanese courts have jurisdiction in the following cases: where the defendant is domiciled in Japan (Art. 3-2 no. 1 ALPM);11 where both of the spouses are Japanese nationals (Art. 3-2 no. 5 ALPM);12 where both of the spouses were last domiciled in Japan and the applicant is still domiciled there (Art. 3-2 no. 6 ALPM);13 where the applicant is domiciled in Japan and there is a special circumstance requiring the trial and judgment to be in Japan for reasons of fairness between the parties or due and prompt administration of justice, as is the case where the defendant is missing or where the final judgment of divorce rendered in a country of the defendant’s domicile is not recognised in Japan (Art. 3-2 no. 7 ALPM).14 However, the Japanese courts with jurisdiction according to Article 3-2 may dismiss the suit in exceptional cases where the trial or judgment in Japan causes prejudice or unfairness to one of the parties or hinders the due and prompt administration of justice (Art. 3-5 ALPM).15 These rules are in some ways different from those provided in the Brussels II bis Regulation and under Swiss PIL Act.16 The domicile of the defendMatters). The decision alternative to mediation is made by the judge who was one of the mediators. 11 Literally Article 3-2, No. 1 ALPM: where the case concerns a suit against one party to the personal matter and the party is domiciled in Japan, or if the domicile is not found or unknown, the party resides in Japan. In a divorce case the party to the personal matter means the defendant spouse. 12 Literally Article 3-2, No. 5 ALPM: where both of the parties to the personal matter have Japanese nationality. In a divorce case the parties to the personal matters mean the spouses who are parties in lawsuit. 13 Literally Article 3-2, No. 6 ALPM: where the case involves a suit by one party to the personal matter domiciled in Japan and the parties to the personal matter had their last common domicile in Japan. 14 Literally Article 3-2, No. 7 ALPM: where the case involves a suit by one party to the personal matter domiciled in Japan and it is found that there is a special circumstance for which a trial and judgment by a Japanese court are required for fairness between the parties or due and prompt administration of justice, for example where the other party is missing, or where the final judgment regarding a suit, involving the same personal matter rendered in a country in which the party is domiciled, has no force in Japan. 15 Literally Article 3-5 ALPM: Even where the Japanese courts have jurisdiction over a suit, the court may dismiss the suit in whole or in part if the court finds that there is a special circumstance based on which the trial and judgment in Japan compromise fairness between the parties or due and prompt administration of justice, considering the nature of the case, the burden of the defendant to appear, the location of the evidence, the interests of any minor children born to the parties to the personal matter, and any other circumstances. 16 Brussels II bis Regulation: Council Regulation (EC) No. 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No.1347/2000. Swiss PIL Act: Switzerland's Federal Act on Private International Law of 18 December 1987.

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Jurisdiction in Divorce Cases in Japan ant is a well-established connecting factor for international jurisdiction over divorce (Art. 3 para. 1 (a) Brussels II bis Regulation, Art. 59 (a) Swiss PIL Act). The last common domicile, as a connecting factor, is set out at Article 3 paragraph 1 (a) of the Brussels II bis Regulation and under the new Japanese legislation. Through this connecting factor, the country of the plaintiff’s domicile also has jurisdiction in Brussels II bis Regulation, where the plaintiff resides there for a certain period.17 The jurisdiction at the plaintiff’s domicile is also provided for at Article 59 (b) of the Swiss PIL Act after a certain period of residence or where the plaintiff is a Swiss citizen.18 By contrast, the plaintiff’s domicile in Japan can only be invoked as grounds for jurisdiction in emergency cases. The common nationality of the spouses is also provided for at Article 3 paragraph 1 (6) of the Brussels II bis Regulation. Furthermore, Article 60 of the Swiss PIL Act provides for jurisdiction over Swiss citizens domiciled abroad (Auslandschweizer) if divorce is impossible or unreasonably difficult in the country where the Swiss citizens are domiciled. Article 3 paragraph 1 (a) of the Brussels II bis Regulation provides for jurisdiction in case of a joint application in the country where either of the spouses is domiciled. In such a case, both spouses agree to the divorce. As such, in Japan, they can file for divorce by mutual agreement before the family registration official, as long as one of the spouses is a Japanese national with his or her habitual residence in Japan. Neither the Brussels II bis Regulation, nor the Swiss PIL Act provides for the dismissal of the suit in exceptional cases in a manner that resembles forum non conveniens in Anglo-American laws.19

III. Critical Analysis A.

Domicile of Defendant: Principal Element or Only One of Many?

Most spouses married in Japan are Japanese; some couples are mixed: Japanese and non-Japanese20 such that it can be assumed that Japanese law is applicable to divorce in most cases. It is reported that divorce in Japan is mostly by mutual

The jurisdiction is granted to the country of the plaintiff’s domicile where the plaintiff resided there for one year, or if either of the spouses is a national of the forum, for six months immediately before the suit. 18 Unless the plaintiff is a Swiss citizen, the jurisdiction is granted to the court at the plaintiff’s domicile only if the plaintiff resides in Switzerland for one year. 19 However, the Japanese courts do not determine whether the trial and decision in a foreign country are better than those in Japan. On this point, Article 3-5 ALPM is a little different from forum non conveniens of Anglo-American laws. 20 According to the statistical report for 2013, marriage was celebrated in Japan by 639’125 Japanese couples, 21’488 Japanese and non-Japanese couples, and 3’127 nonJapanese couples. See Ministry of Health, Labour and Welfare (Kôsei Rôdô-shô), Heisei 26nen Jinkô Dôtai Tôkei [Vital Statistics for 26th Year of Heisei Era]. 17

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Yasuhiro Okuda agreement and sometimes by mediation, decision or judgment.21 Under Japanese law, divorce by judgment is more difficult than in Europe. A breakdown of the marriage or a factual separation of the spouses is not enough to justify the divorce in case one spouse objects to the divorce.22 According to Japanese case law, where the spouse responsible for the breakdown of the marriage files for divorce by judgment, the suit, which was previously always rejected, is now admitted but only in exceptional cases.23 This was arguably reflected in previous case law regarding international jurisdiction over divorce. In 1964, the Supreme Court en banc held that from the rule of reason, international jurisdiction over divorce should, in principle, be granted to the country where the defendant is domiciled. 24 However, the Court has exceptionally recognised the jurisdiction of the court at the plaintiff’s domicile in cases where the defendant was missing or had abandoned the plaintiff or in similar cases. In one such case, a Korean woman, who was born a Japanese national and had lost Japanese nationality after marriage with a Korean before the Second World War, returned from Korea to Japan and filed for divorce against her Korean husband with whom she had lived in Korea but who was now missing. Accordingly, Japanese jurisdiction was affirmed. Some days later, the Supreme Court denied jurisdiction in a case where an American husband filed for divorce against his According to the statistical report for 2016, there were 188’960 divorces by mutual agreement before the family registration official, 21’651 divorces by mediation, 547 divorces by decision as an alternative to mediation, and 3’474 divorces by judgment. See the statistics between 1948 and 2016 available in Japanese language at . 22 By contrast, divorce without consent of the other spouse is broadly permitted in European countries, for example based on a breakdown of the marriage or solely on a factual separation. See D. MARTINY, Divorce, in J. BASEDOW et al (eds), The Max Planck Encyclopedia of European Private Law, Oxford 2012, p. 495. 23 Previously, the Supreme Court of Japan always rejected suits by the responsible spouse. See Supreme Court of 19 February 1952, Minshû, vol. 6, No. 2, p. 110; Supreme Court of 5 November 1954, Minshû, vol. 8, No. 11, p. 2023; Supreme Court of 14 December 1954, Minshû, vol. 8, No. 12, p. 2143; Supreme Court of 7 June 1963, Katei Saiban Geppô, vol. 15, No. 8, p. 55; Supreme Court of 15 October 1963, Katei Saiban Geppô, vol. 16, No. 2, p. 31; Supreme Court of 23 February 1965, Shûmin, No. 77, p. 573; Supreme Court of 13 December 1979, Shûmin, No. 128, p. 183. The turning point was the Supreme Court en banc of 2 September 1987, Minshû, vol. 41, No. 6, p. 1423. However, it allowed a suit by the responsible spouse only in exceptional cases such as where the spouses lived separately much longer than they lived in common and had no minor children, and where the defendant spouse was neither psychologically nor sociologically or economically in hardship. After that, the Supreme Court often allowed suits filed by responsible spouses: see Supreme Court of 24 November 1987, Katei Saiban Geppô, vol. 40, No. 3, p. 27; Supreme Court of 8 December 1988, Katei Saiban Geppô, vol. 41, No. 3, p. 145; Supreme Court of 8 November 1990, Katei Saiban Geppô, vol. 43, No. 3, p. 72; Supreme Court of 2 November 1993, Katei Saiban Geppô, vol. 46, No. 9, p. 40; Supreme Court of 8 February 1994, Katei Saiban Geppô, vol. 46, No. 9, p. 59. For the rejected cases, see Supreme Court of 28 March 1989, Katei Saiban Geppô, vol. 41, No. 7, p. 67; Supreme Court of 18 November 2004, Katei Saiban Geppô, vol. 57, No. 5, p. 40. 24 Supreme Court en banc of 25 March 1964, Minshû, vol. 18, No. 3, p. 486. 21

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Jurisdiction in Divorce Cases in Japan American wife who lived in the United States and had never visited Japan.25 In these cases, the divorce was governed by a foreign law, but the Supreme Court considered the interests of the defendant who could object to the divorce. However, in 1996 the Supreme Court made a decision that was nuanced a little differently as compared to the 1964 rulings. 26 In that case, a Japanese husband, who returned from Germany to Japan with his child, filed for divorce and requested parental authority over the child. His German wife had already obtained a German judgment for divorce and parental authority. However, the German judgment was not in force in Japan because the suit had begun with service of process by publicity and without the husband’s appearance (Art. 200 no. 2 old Code of Civil Procedure).27 The Supreme Court held that international jurisdiction should be granted to a Japanese court, even in the absence of the defendant’s domicile in Japan, where the case is otherwise connected with Japan in light of the circumstances. These circumstances include the plaintiff’s domicile, as long as Japanese jurisdiction is justified by fairness between the parties or by due and prompt administration of justice. Thus, though the interests of the defendant who is summoned to appear in court should be taken into account, the interests of the plaintiff who seeks divorce should also be respected considering the legal or factual difficulty for the plaintiff to file for divorce in the country of the defendant’s domicile. In that case, the plaintiff could not file a suit in Germany where the defendant was domiciled, because the judgment obtained by the wife was in force there. Yet the German judgment had no force in Japan because it did not satisfy the condition of Article 200 number 2 of the old Code of Civil Procedure. Accordingly, Japanese jurisdiction was affirmed. As mentioned below, the conclusion of the 1996 decision is reasonable, but the reasoning is questionable because the Supreme Court treated the defendant’s domicile as one of several elements affirming jurisdiction, not as the principal element. The new rules provided in the ALPM follow the 1996 rulings rather than those of 1964. That is, Article 3-2 ALPM now lists the defendant’s domicile equally to other elements affirming jurisdiction, such as the matrimonial domicile and the common nationality of the spouses. However, under Japanese substantive law the interests of the spouse, who objects to divorce, continue to be protected. This should be a basic concept of Japanese law to be respected for international jurisdiction as well. In most cases, the spouses who agreed to divorce can simply file with the family registration official, and most suits before the court involve cases where one spouse objects to divorce. In those cases, often Japanese law is applicable such that the court must examine which spouse is responsible for the Supreme Court of 9 April 1964, Katei Saiban Geppô, vol. 16, No. 8, p. 78; The Japanese Annual of International Law, No. 10 (1966), p. 148. 26 Supreme Court of 24 June 1996, Minshû, vol. 50, No. 7, p. 1451; The Japanese Annual of International Law, No. 40 (1997), p. 132. 27 Old Code of Civil Procedure (Minji Soshô Hô), Law No. 29 of 1890, as amended by Law No. 61 of 1926. This provision was replaced with a slight modification by Article 118 number 2 of the current CCP, Law No. 109 of 1996, last amended by Law No. 45 of 2017. For details regarding the current provision, see Y. OKUDA, Recognition and Enforcement of Foreign Judgments in Japan, in this Yearbook, vol. 15 (2013/2014), p. 414416. 25

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Yasuhiro Okuda breakdown of the marriage and whether the divorce should be exceptionally permitted even if the responsible spouse filed the suit. For such an examination, the court of the defendant’s domicile should, in principle, have jurisdiction, while the court of the plaintiff’s domicile should have jurisdiction only in exceptional cases. The new rules of the ALPM seem to contradict the basic concept of Japanese law. B.

Matrimonial Domicile

In 1999, the Nagoya District Court declared a new rule that the jurisdiction of Japanese courts should be affirmed if the spouses were last domiciled in common, and the plaintiff is still domiciled in Japan. 28 According to the Court, this is justified by the principle of due and prompt administration of justice because much of the evidence for a divorce is located at the last common domicile of the spouses, and by the principle of fairness between the parties because the spouses decided to live together in Japan normally by mutual agreement. Accordingly, jurisdiction should be granted to the court at the last common domicile of the spouses, excluding cases where there are special circumstances such as the plaintiff having forced the defendant to leave Japan. In that case, a Japanese husband domiciled in Japan filed suit against his American wife, who returned from Japan to Oregon with their children because of the husband’s domestic violence. However, the Court held that the defendant had voluntarily left Japan: though the defendant was reluctant to appear in a Japanese court because of the plaintiff’s violence, this reason was not decisive. Normally, it would be her representative lawyer appearing; she needed only to appear once for deposition, and even at that time, the plaintiff’s violence could have been avoided by due diligence. The new rule was adopted in Article 3-2 number 6 ALPM because much of the evidence for a divorce is generally located at the last common domicile of the spouses.29 However, the most important evidence for a divorce is the testimony of the spouses. The Nagoya District Court underestimated the plaintiff’s violence toward the defendant. For the wife, a victim of domestic violence, it may be intolerable to meet her husband even once in court. Furthermore, it is assumed that the wife had to leave Japan because of the husband’s violence. This is equivalent to the case where the husband forced the wife to leave Japan. Accordingly, as the Supreme Court held in 1964, jurisdiction at the plaintiff’s domicile should be affirmed only in exceptional cases, for instance where the defendant is missing or has abandoned the plaintiff.

Nagoya District Court of 24 November 1999, Hanrei Jihô, No. 1728, p. 58; The Japanese Annual of International Law, No. 45 (2002), p. 159. 29 See M. NAITÔ (note 9), at 33. 28

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Jurisdiction in Divorce Cases in Japan C.

Common Nationality

The common nationality as provided in Article 3-2 number 5 ALPM was adopted for affirming jurisdiction by the Tokyo District Court in 1999.30 In that case, the Japanese spouses were last domiciled in common in the United States of America and, after residence there for 13 years, the husband returned to Japan with their child. The Court held that the trial in Japan does not prejudice fairness between the parties because they were both Japanese, and the defendant sometimes visited her mother domiciled in Japan; for reasons of due and prompt administration of justice, the Japanese court was required to decide the question of parental authority because the child lived for a long time in Japan. Moreover, the divorce of the spouses, both Japanese nationals whose marriage was celebrated in Japan, was closely connected with Japan. However, the reasoning of the Court was not persuasive for affirming jurisdiction based on the common nationality of the spouses. The wife was domiciled abroad and had her principal residence there. Thus, the trial in Japan was very burdensome for her. The parental authority should have been decided in Japan after the question of divorce was decided at the defendant’s domicile.31 That is, the questions of divorce and parental authority should not always be decided in the same country. According to a comment on Article 3-2 number 5 ALPM, the jurisdiction of Japanese courts are required to register the divorce of Japanese spouses in the family book (Koseki). 32 However, the comment disregards the Japanese rule on family registration that the divorce between a Japanese and a nonJapanese also should be registered in the family book of the Japanese national. That is, the divorce of a Japanese national, regardless of whether the other spouse is Japanese or not, should be reported in the family book within ten days of the entry into force of the judgment of a Japanese or non-Japanese court (Art. 63, 77 Family Registration Act).33 Japanese nationality is not always the closest connection with Japan. For example, ALBERTO FUJIMORI, former president of Peru, acquired Peruvian

Tokyo District Court of 4 November 1999, Hanrei Taimuzu, No. 1023, p. 267. Since, according to European laws, the parental authority is often attributed to both father and mother even after their divorce, European courts do not always decide the divorce and parental authority issues at the same time. Even if foreign courts decided both of them, the part of the decision on the parental authority will not be recognised in Japan if the child lived in Japan at the time the suit was filed in the foreign country. See Kyoto Family Court of 31 March 1994, Hanrei Jihô, No. 1545, p. 81; The Japanese Annual of International Law, No. 39 (1996), p. 275 (non-recognition of a French Court decision affirming visitation rights for the father). 32 Comment of M. DOGAUCHI in the talk on the new rules, Shôgai tekina Jinji Soshô Kaji Jiken ni kakaru Tetsuzuki Hôsei (Procedural Law on Cases in Personal and Family Matters with foreign Elements), Ronkyû Jurisuto, No. 27 (2018), p. 15. 33 Family Registration Act (Koseki Hô), Law No. 224 of 1947, last amended by Law No. 51 of 2016. The report is accepted even after ten days, but a non-criminal fine of not more than 50’000 yen may be imposed (Art. 135 the same Act). 30 31

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Yasuhiro Okuda nationality by birth in Peru and also Japanese nationality from his parents.34 His former wife also is likely to have Peruvian and Japanese nationality. Though the spouses divorced in Peru, according to the new Japanese rules, they could divorce by judgment of the Japanese courts. However, they were born and educated in Peru with little contact to Japan and are scarcely able to understand the Japanese language. Accordingly, the nationality of the spouses should be taken into account only in exceptional cases where the divorce in the country of their domicile is impossible or unreasonably difficult, as the Swiss PIL Act provides. D.

Emergency Cases and Forum Non Conveniens

As mentioned above, Article 3-2 number 7 ALPM provides for jurisdiction at the plaintiff’s domicile in emergency cases. The examples cited as emergency cases are: the unknown whereabouts of the defendant, as was the case in the 1964 decision of the Supreme Court; and, the non-recognition of a foreign divorce judgment at the defendant’s domicile, as was the case of the 1996 decision of the Supreme Court.35 In similar cases, where the trial and judgment in Japan are required for fairness between the parties or due and prompt administration of justice, the jurisdiction at the plaintiff’s domicile is also affirmed. Such is the case where the defendant has abandoned the plaintiff and left Japan, as the 1964 rulings suggest. Another example is given by the 2004 decision of the Tokyo District Court.36 In that case, a Japanese wife returned from France to Japan with her child as her French husband was violent towards her. The Court affirmed international jurisdiction for the suit filed by the wife, even though the last common domicile of the spouses was in France. The jurisdiction was justified on grounds that the wife could not file a suit in France because of her husband’s violence. The dismissal of a suit provided at Article 3-5 ALPM is also justified by fairness between the parties or due and prompt administration of justice, even where the jurisdiction of Japanese courts is affirmed by Article 3-2 ALPM. Contrary to Article 3-2 number 7 ALPM, concrete examples are not given in Article 3-5 ALPM. In my opinion, a suit in Japan should be dismissed where the defendant had to leave Japan because of the plaintiff’s violence, even though the spouses were last domiciled in common in Japan, as well as where the defendant is tenuously connected with Japan, and both of the spouses are Japanese nationals. If a suit in Japan is often dismissed in such cases, Article 3-2 numbers 5 and 6 should, in future, be repealed. Fujimori, born in 1938 in Peru, did not lose his Japanese nationality because his father registered his birth with the Japanese embassy in Lima within 14 days; namely, he satisfied the requirement for retention of Japanese nationality according to Article 20-2 of the old Nationality Act (Kokuseki Hô), Law No. 66 of 1899, as amended by Law No. 19 of 1924. See K. ANDERSON, An Asian Pinochet - Not Likely: The Unfulfilled International Law Promise in Japan's Treatment of Former Peruvian President Alberto Fujimori, Stanford Journal of International Law, vol. 38 (2002), p. 187. 35 See above (notes 24 and 26). 36 Tokyo District Court of 30 January 2004, Hanrei Jihô, No. 1854, p. 51; The Japanese Annual of International Law, No. 48 (2005), p. 186. 34

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Jurisdiction in Divorce Cases in Japan E.

Impact on Recognition of Foreign Judgments

Though the ALPM supplements the Code of Civil Procedure (CCP) with special rules (Art. 1 ALPM), it has no provision regarding the recognition of a foreign judgment, such that Article 118 CCP is applicable also to foreign divorce judgments.37 Thus, the foreign court must have jurisdiction according to Japanese laws or conventions in force in Japan (Art. 118 No. 1 CCP). The jurisdiction of foreign courts for recognition of their judgments is called “indirect jurisdiction”. Though there is neither written law nor convention concerning such indirect jurisdiction over divorce, it is assumed that indirect jurisdiction is, in principle, identical to the direct jurisdiction of Japanese courts, as provided in the ALPM. As Section II above mentions, the new rules of the ALPM are in some parts different from the Brussels II bis Regulation and the Swiss PIL Act. Thus, it is assumed that the indirect jurisdiction of European courts will not always be affirmed by Japanese courts. Above all, though the jurisdiction at the plaintiff’s domicile is broadly affirmed in Brussels II bis Regulation and the Swiss PIL Act, it is restricted in Japan to cases where the spouses were last domiciled in common in that country, or to emergency cases. Furthermore, indirect jurisdiction will be denied where the rendering country is deemed forum non conveniens, as provided at Article 3-5 ALPM. For example, a judgment of the European courts will not be recognised where a Japanese spouse and a European spouse lived together in the rendering country, but the Japanese spouse returned to Japan because of the other spouse’s violence. Like in the 1996 rulings of the Supreme Court, a judgment of European courts will not be recognised where the suit began with a service of process by publicity, even though the court determined that the defendant was missing. This is because service by publicity is excluded for recognition of foreign judgments (Art. 118 No. 2 CCP). It should also be noted that a judgment of the European courts may be held contrary to Japanese public policy (Art. 118 No. 3 CCP) where the judgment was simply based on the breakdown of the marriage and the plaintiff was responsible for the breakdown. For example, the 2007 decision of the Tokyo Family Court denied recognition of the divorce judgment of an Australian court, among others, because the Australian husband who filed the suit was responsible for the breakdown of the marriage, and the judgment for the suit against the Japanese wife was contrary to Japanese public policy.38 Finally, lack of reciprocity is a reason for non-recognition of a foreign judgment (Art. 118 No. 4 CCP). If Japanese judgments for divorce are not recognised in the rendering country due to the absence of a treaty for mutual recognition of judgments, the judgment of that country will not be recognised in Japan for lack of reciprocity.39

For the details of Article 118 CCP, see Y. OKUDA (note 27), at 412 et seq. Tokyo Family Court of 11 September 2007, Katei Saiban Geppô, vol. 60, No. 1, p. 108; Japanese Yearbook of International Law, vol. 52 (2009), p. 697. 39 For example, Article 52 of the execution order (Exekutionsordnung) of Liechtenstein requires a treaty for recognition of foreign judgments. The official text in German language is available at . 37 38

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IV. Final Remarks Normally, the enactment of rules on international jurisdiction is welcome because it promotes the predictability of decisions on jurisdiction. However, the new rules provided in the ALPM are likely to result in ambiguity and confusion in future Japanese practice. Jurisdiction based on matrimonial domicile and common nationality is questionable, though it was affirmed by the decisions of some inferior courts made before the entry into force of the new rules. Since the 1964 rulings of the Supreme Court en banc declared the principle of the defendant’s domicile, the jurisdiction at the plaintiff’s domicile should be restricted to exceptional cases, as provided at Article 3-2 number 7 ALPM. It should also be noted that most cases of divorce in Japan will be governed by Japanese law, according to which divorce by judgment is restricted to exceptional cases if the spouse responsible for the marriage breakdown files the suit. By contrast, European laws tend to allow divorce simply as a result of the breakdown of the marriage or the factual separation of the spouses. From the European view, the jurisdiction is broadly affirmed at the plaintiff’s domicile thus helping him or her to restart a new life, while in Japan the interests of the spouse who may object to the divorce should be protected. In general, the harmonisation of the rules on jurisdiction, as well as the mutual recognition of judgments is desirable, but the differences between the basic concepts of divorce in Japan and European countries cannot be easily bridged.

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REQUIEM OR TRANSFORMATION? PERSPECTIVES FOR THE CIEC/ICCS AND ITS WORK Hans VAN LOON* **

I. II.

III.

Introduction: Global Significance of Civil Status Registration and Circulation of Civil Status Records and Documents A Dwindling Organisation with an Undiminished Mission A. A Dying Organisation? B. The Work of the International Commission on Civil Status (ICCS) C. Victim of its Success? D. Mission Unaccomplished 1. Continuing Relevance of Existing ICCS Conventions in the Relations among Current States Parties a) Among European Union Member States Parties to ICCS Conventions b) Between Each of the EU Member States Parties to the Conventions and Non-EU Member States Parties to the Conventions, and c) Among Non-EU Member States Parties to the Conventions 2. Potential Relevance in Relations among Current States Parties and Other States 3. Potential of the Platform for the International Communication of Civil-Status Data by Electronic Means A Possible Way Forward A. Regarding the Conventions 1. Enabling Approval by the EU

* Member of the Institut de Droit International. Former Secretary General of the Hague Conference on Private International Law. ** The author is grateful to Eric Gubbels (EVS), Dorothée van Iterson (Former Principal Legal Adviser Ministry of Justice The Hague), Christian Kohler (Em. Prof University Saarbrücken), Philippe Lortie (First Secretary, Hague Conference on PIL), Nicolas Nord (Dep. SG ICCS), Walter Pintens (Former SG ICCS), Teun Struycken (Former President Standing Government Committee on PIL, Netherlands), Rob van der Velde (EVS), Maria Vilar-Badia (Legislative Officer EU Commission), and Patrick Wautelet (Prof. University Liège), for their comments on an earlier version. The views expressed here, as well as any inaccuracies and mistakes, are, of course, the sole responsibility of the author.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 73-93 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Hans van Loon 2.

IV.

I.

Adding English (and Preferably also Spanish) as an Authentic Language 3. How Could this Be Done? B. Regarding the Organisation 1. Reforming the Existing ICCS Organisation? 2. Gradual Transfer of ICCS Functions to the Hague Conference on Private International Law? a) Include Relevant ICCS Conventions on the Hague Conference Website b) Include Relevant ICCS Conventions when Reviewing the Practical Operation of Hague Conventions c) Resume the Development of the ICCS Platform Conclusion

Introduction: Global Significance of Civil Status Registration and Circulation of Civil Status Records and Documents

1. “Everyone shall have the right to recognition everywhere as a person before the law.”1 As a corollary of this right, the basic facts of everyone’s life – birth, being alive, death, name, nationality, marriage and partnership and their dissolution, parenthood, adoption, domicile or residence – should be properly registered, starting with “the immediate registration of a child after birth”.2 Without such registration and identification documents, as evidence of the recorded data, a human being may not, or not fully, be recognised as “a person before the law”. 2. The need to safeguard continuity of personhood across international borders keeps growing as a result of increasing regional and global mobility of individuals and families. This need has two components: persons must be able to present evidence in foreign jurisdictions of their civil status through public documents – where possible in electronic form – and the legal status or relationship recorded in the document must be recognised abroad. The first objective is, in principle, easier to achieve than the second.3 Public documents may be considered authentic and have evidentiary value if surrounded by certain guarantees, in particular concerning the capacity of the authority issuing them. According to the prevailing view, however, the fact that the authority was competent to issue the public Art. 6 of the Universal Declaration of Human Rights. Art. 7(1) of the UN Convention on the Rights of the Child. The implementation of this right on a global scale leaves much to be desired: See § 29. 3 As appeared in the genesis of Regulation 2016/1191, to be discussed in more detail below. The original purpose of the EU Commission’s “green paper” COM(2010) 747 final was to deal with both aspects in the Regulation. 1 2

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work document (instrumentum) is, by itself, not sufficient for recognition of its content (negotium).4 So, efforts continue at the global and regional levels to harmonise rules on jurisdiction of authorities, applicable law, recognition and enforcement of judgments and authentic acts as well as on judicial and administrative cooperation, to ensure that legal status and relationships are portable across borders. 3. Yet, the aim of ensuring recognition of public documents abroad and interoperability of civil registry systems among different jurisdictions remains of undiminished, even crucial importance. Therefore, in addition to proper registration of a person’s legal status in the country of origin, international cooperation is critical to ensure that civil status records5 and public documents are understood and correctly interpreted abroad, to promote their international circulation, where possible by electronic means, and to foster exchange of information in the field of civil status between competent authorities across borders on a daily basis. Moreover, records and documents may get lost as a result of war and other disturbances in a country, which may make it difficult or impossible to prove the relevant circumstances, in particular for persons fleeing to safe countries and applying for international protection there. The legal issues resulting from the absence of, or deficiencies in, civil registry records and documents, and cooperation among competent authorities, are manifold and often complex.6

Cf. P. LAGARDE, The movement of civil-status records in Europe, and the European Commission’s Proposal of 24 April 2013, this Yearbook 2013-2014, p. 1-12, at 3; C. KOHLER, Towards the recognition of civil status in the European Union, ibid. p. 13-29, at p.16-18. 5 “The meaning of the word «record» (acte), when used in matters of civil status, is known to vary from State to State: in some States it means the original record entered in the registers, which elsewhere is called an entry (inscription); in others, a record (acte) is a copy of or even an extract from the original”, Expl. Report ICCS Convention No. 17 available at . 6 Cf. the JURI studies prepared for the European Parliament in 2017, Private International Law in the Context of Increasing International Mobility: Challenges and Potential, in particular Chapter 1, available at ; Children On the Move: A Private International Law Perspective, Chapter 3, available at . 4

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II.

A Dwindling Organisation with an Undiminished Mission

A.

A Dying Organisation?

4. During the past nearly 70 years the International Commission on Civil Status (ICCS), officially the Commission Internationale de l’État Civil (CIEC)7 has contributed to the circulation of civil status documents and the cooperation between competent authorities, as well as the harmonisation of private international law and substantive law related to civil status. The need for international cooperation in this area had been felt in Europe since the 1920s among civil registries. After the Second World War, two civil registry officials, Dr STAMPA from Switzerland and Mr VAN PRAAG from the Netherlands, took the initiative for the creation of an intergovernmental organisation.8 5. The ICCS was established in 1950 by Belgium, France, Luxembourg, the Netherlands and Switzerland. At the height of its existence, in 2008, it comprised 17 Member States (hereinafter: “MSs”): in addition to the 5 founding Members, Austria, Croatia, Germany, Greece, Hungary, Italy, Mexico, Poland, Portugal, Spain, Turkey, and the United Kingdom. However, since 2008, 10 MSs have left the organisation: Austria (in 2008), Hungary (in 2012), the UK and Italy (in 2014), Croatia, Germany and Portugal (in 2015), Mexico and Poland (in 2017), and founding Member the Netherlands (in 2018). The conclusion seems obvious: the ICCS is dying. B.

The Work of the ICCS

6. Before drawing this conclusion, however, it should be considered that ICCS has been a productive law-making and law-servicing organisation.9 It has produced 34 (binding) Conventions, and 9 (non-binding) Recommendations. These deal with a variety of civil status topics: births, being alive,10 names and forenames,11 7 French is the ICCS’s official language, but English has been admitted as a second working language. See art.5 of the Rules of the ICCS of 16 September 2015, available at . 8 The organisation has four organs: a General Assembly, a Bureau, a President, and a Secretary General, see arts. 8-26 of the Rules of the ICCS. 9 See J. MASSIP/ F. HONDIUS/ C. NAST, International Commission on Civil Status, in W. PINTENS (ed.) International Encyclopedia of Family and Succession Law, The Hague 2014; W. PINTENS, The Impact of the International Commission on Civil Status (ICCS) on European Family Law, in J. SCHERPE, European Family Law, Vol 1, Cambridge 2016, p. 124-142; in French, J. MASSIP/ F. HONDIUS/ C. NAST/ F. GRANET, Commission Internationale de l’État Civil (CIEC) 2018, available at . 10 Convention No. 27. 11 Conventions Nos. 4, 14, 19, 21,31.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work nationality,12 statelessness,13 change of sex,14 marriage,15 partnerships,16 parent-child relationships,17 refugees,18 death,19 as well as with civil registry issues affecting some or all these various matters. Regarding their technique, they may be categorised according to whether their (primary) aim is the harmonisation of private international family law20 or of substantive family law,21 or the promotion of international communication and cooperation between competent authorities, including by furthering the understanding of public documents through uniform international multilingual models or coding systems, or the use of electronic transmissions.22 7. The Conventions aimed at harmonising private international law and substantive law have been ratified by few States. A few Conventions never entered into force, and some are outdated. But several of the Conventions promoting the communication and cooperation between competent authorities, and the comprehension and circulation of civil-status documents, have been very successful, have attracted accessions by States that are not Members of the ICCS, and have rendered great services – generally taken for granted – to citizens. 8. In addition to its legislative work, ICCS has published a Practical Guide to Civil Status and undertaken major studies, for example, on human rights and civil status, transsexualism, sham marriages, and persons deprived of identity and civil status documents. ICCS has also organised important colloquia, including one on the device of a Platform for the international communication of civil-status data by electronic means. More generally, it has been a unique, valuable platform for communication and cooperation in matters of civil status in Europe. 9. MSs that have left the organisation remain Parties to the 28 ICCS Conventions in force: membership is separate from being a Party to a Convention.23 Moreover, Conventions are living instruments, subject to notifications, declarations, reservations, that may change or be withdrawn. They may attract new Contracting States, need to be revised, be denounced, give rise to practical issues that must addressed; in short: they have to be properly – not just administered, but also – monitored.

Convention Nos. 8, 28. Convention No. 13. 14 Convention No. 29. 15 Convention Nos. 7, 11, 20. 16 Convention No. 32. 17 Convention Nos. 5, 6, 12, 18. 18 Convention No. 22. 19 Convention No. 10. 20 Conventions Nos. 7, 11, 12, 18, 19, 29, 31, 32. 21 Conventions Nos. 4-6, 10, 13-15, 19, 21, 24. 22 Conventions Nos. 1-3, 8, 9, 12, 14, 16-18, 20, 22-28, 30-34. Exceptionally, this cooperation may lead to delegation of competences to an authority of another State Party: Conventions Nos. 7,9.15, 24. 23 Austria is a Party to 13, Croatia to 2, Germany to 13, Italy to 17, Netherlands to 22, and Poland to 3 Conventions. 12 13

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Hans van Loon 10. While the basic official treaty data will continue to be administered and shared with States Parties by the depositary, the Swiss government, such information, as well as additional data on the practical operation of the Conventions, should also be easily accessible to the public. As a result of the exodus of Member States, ICCS is now insufficiently furnished to perform that task. Its website is not up to date, and has gaps. ICCS is even less equipped to proactively seek participation of additional States Parties in the Conventions, or promote its Recommendations and other work. 11. Yet, as noted, easy proof of civil status records and circulation of documents, and cooperation between competent authorities in the field of civil registry, is crucial to the proper functioning of global as well as regional instruments dealing with the private international law aspects of personal status and family relations. The four modern Hague Children’s Conventions on International Child Abduction (1980), Adoption (1993), Child Protection (1996), and Child Support (2007) often depend for their operation on proper documentation regarding personal data of children, parents and other persons involved. That also applies to its less widely ratified instruments relating to families and persons.24 ICCS Conventions may also be relevant in the context of the 1965 Service, the 1970 Evidence and the 1980 Access to Justice Conventions. The ongoing work of the Hague Conference (hereinafter also: “HCCH”) on an instrument, or instruments, on parent-child relationships and surrogacy is bound to benefit from these ICCS Conventions. The same goes for European, Latin American and other regional instruments on private international law. Public documents play a role in relation to the EU Regulations 2201/2003 (“Brussels II A”) on divorce and parental responsibility, 4/2009 on maintenance, 650/2012 on succession, and 2016/1103 and 2016/1104 on property relations in matrimonial and registered partnerships. C.

Victim of its Success?

12. Paradoxically, at least part of the explanation of ICCS’s decay is the success of its instruments in the technical field of communication and cooperation in civil registry matters. Decades of work on the promotion of the circulation of civil status documents and information culminated in the 1976 Convention No. 16 on the issue of multilingual extracts from civil-status records.25 This instrument has attracted 24 States Parties, half of which are non-Members of the ICCS. It imposes an obligation on States Parties to issue multilingual extracts from records concerning birth, marriage or death, where an interested party so requests or when the use of an extract in a single language necessitates a translation, free of legalisation or any other formality (including the apostille). Attached to the Convention are 24 Such as the 1970 Divorce or 1978 Marriage or 2000 Protection of Adults Conventions. 25 Convention No. 16 builds on the Conventions of 1956 (No. 1) on the issue of certain extracts from civil-status records for use abroad, 1957 (No. 2) on the issue free of charge and the exemption from legalisation of copies of civil-status records, 1974 (No. 15) introducing an international family record book, and 1977 (No. 17) on the exemption from legalisation of certain records and documents.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work mandatory model forms in 10 languages, so that information in one language can be easily and unequivocally understood by speakers of other languages. The 1976 Convention was recently modernised and enlarged, with forms for recognition of children and registered partnerships, through the 2014 Convention No. 34 on the issue of multilingual and coded extracts and certificates from civil-status records.26 13. No wonder that the EU found in these 1976 and 2014 Conventions ready-made models for its Regulation (EU) 2016/1191 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union (“the Regulation”). The EU borrowed from the multilingual standard forms established by these ICCS Conventions, and, with its much greater resources, had no difficulty expanding the number of authentic languages of these standard forms to 24. And because the Regulation did not depend on ratification by EU MSs, it took immediate effect in all of them from the date of its application (16 February 2019).27 14. The Regulation establishes, for certain public documents issued by the authorities of an EU MS, which have to be presented to the authorities of another EU MS, a system of exemption from legalisation or similar formalities, including apostille, as well as of a simplification of other formalities, notably to translations through the introduction of multilingual standard forms. Contrary to the technique used in ICCS Conventions, however, the multilingual standard forms established by the Regulation are simply translation aids; they “have no autonomous legal value” (art. 8 (1)), in contrast to the ICCS forms, which do have legal value and can be presented autonomously. In other words, whereas under the ICCS Conventions citizens can simply present an ICCS form, under the Regulation they cannot just rely on the EU form, but must always present the EU form together with the original, or a certified copy, of the public document (including extracts from or verbatim copies of civil status records or civil status certificates). The Regulation exempts those public documents from translation under certain conditions (art. 6 (1)), and, in any event, imposes an obligation on EU MSs to “accept” a certified translation “carried out by a person qualified to do so under the law of a [MS]” (art. 6 (2)). That means that the certified translation has evidentiary value in the MS where it is presented, but may still need verification as to whether the translator was “qualified… under the law of a [MS]”. The strength, and added value, of the Regulation is its system of administrative cooperation, including through Central Authorities, under the Internal Market Information System (Chapter IV, arts. 13-16). 15. While the Regulation’s scope of application is wide in terms of the matters it covers (art. 2), the fact that its multilingual standard forms have no autonomous legal value, implies a significant limitation of its use. An informal survey carried out in the spring of 2019 among a dozen civil registry offices in Following the ratification by Belgium in 2017, a second ratification by a CIEC MS will bring the Convention into force. Germany, one of the signatories, took the steps necessary to join the Convention, but since it is no longer an ICCS Member, it can only accede to the Convention following the entry into force as a result of one more ratification by a current MS! See also §35 and §41 below. 27 A few articles are applicable since 2017 and 2018 already (art.27). 26

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Hans van Loon Belgium, France, Germany, Italy and Luxembourg showed that extracts based on CIEC Conventions continue invariably to be used in practice by these offices, and requested by citizens who have become familiar with them. Current practice in the Netherlands confirms that presentation of extracts from civil status records suffices in nearly all cases.28 That suggests that where an ICCS Convention is applicable, and covers such extracts, it is, in principle, that Convention that will be used and not the Regulation. 16. The Regulation does not expressly highlight its complementary role in relation to the ICCS Conventions; it implicitly deals with its formal relationship to the ICCS Conventions in its art. 8: “1. The multilingual standard forms referred to in Article 7(1) shall be attached to the public documents referred to in that paragraph, shall be used as a translation aid and shall have no autonomous legal value. 2. The multilingual standard forms shall not constitute any of the following: (a) extracts from civil status records; (b) verbatim copies of civil status records; (c) multilingual extracts from civil status records; (d) multilingual and coded extracts from civil status records; or (e) multilingual and coded civil status certificates…” The Recitals spell out this formal relationship in more detail. According to Recital 11: “This Regulation, and in particular the mechanism for administrative cooperation set out therein, should not apply to civil status documents issued on the basis of the relevant International Commission on Civil Status (‘ICCS’) Conventions”. Recital 22 explains: “The sole purpose of the multilingual standard forms should be to facilitate the translation of the public documents to which they are attached. Accordingly, such forms should not be circulated as autonomous documents between the Member States. They should not have the same purpose… as extracts from or verbatim copies of, civil status records established by ICCS Convention[s Nos 2, 16 and 34]”; And Recital 49 adds: “Since the multilingual standard forms under this Regulation do not have legal value and do not overlap with the multilingual standard forms provided for in ICCS Conventions No 16, No 33 and No 34 or with the life certificates provided for in ICCS Convention No 27, this Regulation should not affect the application of those 28 In exceptional cases, when the information contained in the extract appears insufficient to the foreign authority, e.g. in certain international adoption cases, presentation of a copy of an original is required.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work Conventions as between Member States or between a Member State and a third country” (emphasis added). 17. It is true that art. 19 (2) claims priority of the Regulation in relation to matters to which it applies and to the extent provided for therein over provisions of other instruments, but this refers to possible bilateral or multilateral agreements between MSs that may have provided for an exemption from the apostille or simplifications of formalities concerning certified copies and translations other than ICCS Conventions, since in the light of the provisions of art. 8 and the Recitals, no conflict is intended between the Regulation and ICCS Conventions29. 18. Despite all this, even before its entry into force, the Regulation cast a shadow over ICCS instruments, and brought the growth of States Parties to ICCS Conventions to a halt. Although the Regulation leaves them intact from a formal legal point of view, it does not specify how it relates functionally to the ICCS Conventions mentioned in the Recitals. And the ICCS, itself becomes a “parent pauvre”30 reduced to 7 Members only, 5 of which are EU MSs, and has not been in a position to establish an authoritative course of action concerning the continuing use of its Conventions in parallel with the Regulation. D.

Mission Unaccomplished

19. Yet, this does not mean that ICCS’s mission is over. 1.

Continuing Relevance of Existing ICCS Conventions in the Relations among Current States Parties

20. First, ICCS Conventions remain relevant in the relations (a) among EU MSs, including former ICCS Members, that are Parties to the Conventions; (b) between each of the EU MSs Parties to the Conventions and Non-EU MSs Parties to the Conventions, and (c) among Non-EU MSs Parties to the Conventions. a)

Among European Union Member States Parties to ICCS Conventions

21. The Regulation only applies in situation (a), because it only applies to certain public documents issued by the authorities of an EU MS and which have to be presented to the authorities of another MS.31 Both EU nationals and residents may 29 Cf. also A. VETTOREL, EU Regulation No. 2016/1191 and the circulation of public documents between EU Member States and Third Countries, available at . 30 Cf. CH. PAMBOUKIS, Les actes publics et la méthode de reconnaissance, in P. LAGARDE (ed.), La Reconnaissance des situations en droit international privé, Paris 2013, p. 133 et seq. 31 Art 2 (1) “This Regulation applies to public documents issued by the authorities of a Member State in accordance with its national law which have to be presented to the authorities of another Member State (3). This Regulation does not apply to: (a) public

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Hans van Loon benefit from the Regulation.32 In this situation, the Regulation coexists with ICCS Conventions, and the extracts provided for by ICCS Conventions will remain extremely useful to citizens. Indeed, multilingual extracts covered by ICCS Conventions present four major advantages: (1) current administrative systems in States Parties to ICCS Conventions are fully adapted to issuing such extracts; (2) the fee for extracts is limited to their production costs, whereas under the Regulation, a person requesting a multilingual standard form must pay the production costs both of the original public document and the standard form; (3) ICCS extracts have evidentiary value, and, last but not least, (4) ICCS extracts carry great authority, due to their long-standing, proven, effectiveness and reliability.33 Indeed, ICCS extracts are currently readily accepted also by authorities in States that are not Parties to the Convention in question, even beyond Europe, including in the United States. 22. Therefore, it is in the clear interest of citizens, both EU nationals and residents,34 to promote the synergetic operation of the Regulation and ICCS Conventions. Indeed, many more persons would benefit from these Conventions if they were in force throughout the EU. b)

Between Each of the EU Member States Parties to the Conventions and Non-EU Member States Parties to the Conventions, and

c)

Among Non-EU Member States Parties to the Conventions

23. The Regulation, by definition, does not apply in the situations (b) and (c). In those situations ICCS Conventions may offer benefits to both EU nationals and residents if they apply between States Parties to the Convention in question. Of the 28 ICCS Conventions entered into force,35 23 apply not only between the EU MSs that are Parties to it, but also in the relations between one or more EU MSs on the one hand, and one or more non-EU States on the other (situation (b)), as well as between those non-EU States (situation (c)):

documents issued by the authorities of a third country; or (b) certified copies of documents referred to in point (a) made by the authorities of a Member State”. 32 However, for the purpose of voting or standing as candidates in certain elections only EU citizens may use the Regulation, see Art. 2 (2). 33 This has allowed, for example, their informal adaptation to new legal developments (e.g., registered partnerships, same sex marriages) by the authorities of some ICCS State Parties, which has not met with any objection. 34 Including non-EU nationals domiciled, habitually resident, or in some cases, simply present in the EU. 35 I.e., Conventions Nos. 1-17 and 19-30. By contrast, Conventions Nos. 18 and 3034 have not entered into force.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work  20 Conventions also apply in the relations between one or more EU MSs, and Switzerland and/or Turkey,36 8 of which also apply between Switzerland and Turkey;  Convention No. 16 (replacing Conventions No.1 also applies between 10 EU MSs and 8 non-EU States: Switzerland, Turkey, Bosnia-Herzegovina, North Macedonia, Montenegro and Serbia, Moldova and Cabo Verde, as well as between those 8 non-EU States;  Convention No. 20 also applies between 8 EU MSs and 3 non-EU MSs: Switzerland, Turkey and Moldova, and between the latter 3 States; So, an Austrian citizen in need of a multilingual extract from civil status records in Austria regarding his or her birth, for the purpose of producing it in France or Switzerland may benefit from Convention No. 16. The same goes for a Cape Verdean citizen in need of such an extract issued by the authorities of Cabo Verde for its production in Portugal.37 A German citizen of Turkish origin who wishes to marry in Italy may benefit from a certificate of legal capacity to marry issued in Turkey under ICCS Convention No. 20,38 just as a Chilean refugee living in Switzerland may benefit from such a certificate issued by the Swiss authorities39 when s(he) wishes to marry in Spain. In fact, there are countless situations in which these Conventions may apply. 24. In all three situations (a.), (b.) and (c.) it is in the common interest of States Parties, civil registries, other administrative authorities, judges, and the public that the text, explanatory report and status of these Conventions are easily accessible and that they are properly monitored. 2.

Potential Relevance in Relations between Current States Parties and other States

25. Secondly, many ICCS Conventions, including Nos. 16 and 20, being open to accession by non-ICCS MSs, have the potential of attracting accessions from additional States, which would make them even more useful. This applies, as noted, to European States, in particular within the EU. Despite their proven usefulness, a number of ICCS Conventions apply only in a limited number of EU MSs. Therefore, the EU and its MSs would have every interest to examine which of these Conventions would be of EU-wide relevance. 26. But Europe is not only the only region in which civil status records and documents matter. Issues of civil status are, for example, also important to LatinAmerica and the Caribbean. The Organisation of American States (OAS) has

Conventions Nos. 1-7, 9-17, 20-21, 24-28. Art. 1 (2) of Convention No. 16. 38 Art. 1 of Convention No. 20. 39 Idem, Art. 2. See also Art. 25 of the 1951 UN Convention Relating to the Status of Refugees (as amended by its 1967 Protocol), and the 1985 ICCS Convention No. 22 on international cooperation in the matter of administrative assistance to refugees, in force in Austria, Belgium, Spain, France, Greece, Italy, and the Netherlands. 36 37

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Hans van Loon established the Universal Civil Identity Program in the Americas (PUICA).40 Since 2010, PUICA supports Member States of the OAS in their efforts to eradicate under-registration, and promotes international and regional cooperation, through the Latin American and Caribbean Council for civil registration, identity and vital statistics, established in 2005 (CLARCIEV – 21 Member States).41 But CLARCIEV, contrary to ICCS, is not a law-making organisation. In fact, the work of the ICCS has attracted interest from Latin America: Mexico was a Member from 2010-2017. Peru still has an observing status with the ICCS. There may well be a real potential for ICCS Conventions to be embraced in Latin America and the Caribbean, both in their relations with current States Parties, and in their mutual relations. This potential is worth further exploration.42 27. Obviously, ICCS Conventions could be very useful also in the relations between current States Parties and States in the Middle East and Africa (in addition to Cabo Verde), such as Morocco, Algeria, Tunisia, Egypt, etc., with growing cross-border movements and family relationships involving both groups of States. Already in 1980, when many refugees from Vietnam, Laos and Cambodia fled to Europe, ICCS adopted a useful Recommendation on the identification of refugees from South-East Asia.43 28. From a global perspective, and looking further ahead, ICCS instruments, and ICCS expertise have an even greater potential. International migration is bound to increase, and requires international cooperation, including legal cooperation, “to ensure safe, orderly and regular migration, involving full respect for human rights and the humane treatment of migrants regardless of migration status, of refugees and of displaced persons…[including] the right of migrants to return to their country of citizenship”.44 If ICCS Conventions were in force on a global scale, they would support the respect of the right to identity of migrants, and the interoperability of civil registry systems between States of origin (and return), transit States and States of destination.45 29. Finally, ICCS expertise would be most useful to assist in resolving the serious global problem of lack of birth registration. According to UNICEF, “the Available at . Available at < http://clarciev.com/en/>. 42 ICCS Conventions ratified by France and the Netherlands may already apply to their overseas territories including in Latin America and the Caribbean. 43 Available at . 44 UN General Assembly Resolution A/Res/70/1, Transforming our world: the UN 2030 Agenda for Sustainable development, Declaration, par. 29, and Sustainable Development Goals 8.8, 10.7. 45 See also UN General Assembly Resolution A/Res/73/195 of 19 December 2018, endorsing the Global Compact for Safe, Orderly and Regular Migration, Objective 4 “… (a) Improve civil registry systems, with a particular focus on reaching unregistered persons and our nationals residing in other countries, including by providing relevant identity and civil registry documents, strengthening capacities, and investing in information and communications technology solutions…”. And see the parallel provision in UNGA Resolution A/Res/73/151 of 17 December 2018, affirming the Global Compact on Refugees, par.82.  40 41

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work births of around one fourth of children under the age of five worldwide have never been recorded”.46 These children are unable to obtain a birth certificate, which may result in statelessness, denial of health care and education, and later on, of social assistance, jobs in the public sector, and the right to buy or inherit property, to vote, or to obtain a passport. They also run the risk of entering into marriage or the labour market, or being conscripted into the army, before the legal age. Birth registration of children “is the first step in securing their recognition before the law, safeguarding their rights, and ensuring that any violation of these rights does not go unnoticed”.47 3.

Potential of the Platform for the International Communication of CivilStatus Data by Electronic Means

30. Thirdly, the ICCS, with generous support of the EU, has already invested great efforts in the development of a Platform for the international transmission of civil status data by electronic means under ICCS Conventions. This electronic Platform will replace the sending of public paper documents through postal channels by the electronic transmission of electronic documents, thereby providing States with a secure tool for the implementation of their obligations arising from ICCS Conventions: “It will have a major impact on its numerous potential beneficiaries: the general public (whether nationals of participating States or residents), States, ministerial departments, municipalities, civil registrars, jurisdictions and lawyers. Providing a multilingual interface and forms established according to ICCS Conventions (for instance, birth, marriage and death record extracts and the certificate of legal capacity to marry) will simplify the sending and delivery of documents for civil registrars, who will be able to fill out forms easily, in their own language, also having access to a virtual keyboard providing letters specific to other languages. It will make it easier for citizens to prove their personal and family status and, thus, circulate freely, as well as making international requests for civil-status data simpler to carry out and accelerating the exchange of information. It will considerably shorten the time frame for issuing civil-status documents to individuals and for registering foreign events and deci46 See UNICEF Birth registration, available at , published in December 2017, with data per area and country, and notes on the data. 47 Ibid. See also the UNICEF Digest Birth Registration: Right from the Start 2002. UNICEF has developed programmes to ensure birth registration in various countries around the world. See also UN 2030 Agenda, note 44, SDG 16.9: “By 2030, provide legal identity for all, including birth registration”.

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Hans van Loon sions in civil-status registers (shortening the time frame to days rather than months). By enabling documents to circulate in a secure manner, the Platform will also help to combat the increasingly common problem of civilstatus document fraud”.48 34. Co-funded by the European Commission, the work on the ICCS Platform started in 2010, and a pilot project was launched in 2013. However, the Platform has not yet been put into operation. The work was suspended in 2017 in particular because of the expected entry into force of Regulation 2016/1191. Yet, as noted, this Regulation will not make ICCS Conventions redundant, and further study and development of the Platform is highly desirable. It is true that currently, participation in the Platform by a State requires it to be a Party to Convention No. 33, which of course delays its coming into operation. However, it is worth examining whether a lighter procedure might be found to bring this very useful system into operation.

III. A Possible Way Forward A.

Regarding the Conventions

35. Notwithstanding the continuing relevance of ICCS Conventions, de facto the Regulation, together with the decrease in ICCS’s membership, resources, and attraction, has impeded new signatures, ratifications, and accessions, both by EU MSs and other States.49 Obviously, this has also blocked the entry into force of Convention No. 34, meant to replace Convention No.16, and has suppressed any further appetite for, and work on, the ICCS Platform. It has paralysed ICCS monitoring, support and promotion activities regarding its Conventions, its Recommendations, its scientific comparative work, and, in fact, has frustrated its potential. 36. In the light of the global need for coordination, communication and cooperation in matters of civil status, this state of affairs is not acceptable. But what to do? ICCS, in its present form, is helpless. A reform, one way or another, of the organisational structure is inevitable (see below, under 2.). But, apart from the

48 Available at in English, available at in French. 49 Latest ratification by Belgium (Convention 34), on 26 June 2017. Germany’s ratification of this instrument on 31 October 2017 has remained without effect (see note 26, and § 41 below).

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work organisation, the existing conventions also have their limitations, notably in terms of Parties that may join them, and languages. 1.

Enable Approval by the EU

37. Contrary, for example, to the Hague Conventions on private international law adopted since 2002,50 none of the ICCS Conventions makes it possible for a concerned “Regional Economic Integration Organisation which is constituted solely by sovereign States and has competence over some or all of the matters governed by [the] Convention” to join that Convention. Therefore, the EU – for which this definition was created – is prevented from becoming a Party to any ICCS Convention even those regarding matters over which the EU has, or may acquire, competence.51 38. EU competence to adopt measures in civil matters having cross-border implications is generally to be found in art. 81 TFEU. Any exercise of EU competence in respect of the matters listed in art. 81 (2) relating to family law requires unanimity of the Council (art.81 (3)). However, for its adoption of Regulation 2016/1191, the EU found a basis, not in art. 81, but “in particular” in art. 21(2) TFEU, which is subject to the ordinary legislative procedure.52 If art. 21 (2) justifies a regulation aiming at “promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union”, then the EU should likewise be deemed competent to join international instruments with similar objectives, and open to approval by the EU. 39. Whilst a number of ICCS Conventions have a larger purpose than “simplifying the requirements for presenting certain public documents” – not limiting themselves to the instrumentum, but also dealing with the negotium – the most successful ICCS Conventions just seek to simplify the circulation of public documents and information. Some Conventions of this category would usefully supplement the Regulation, if only they were open for approval by the EU. 40. The EU, its MSs and its nationals and residents would, for example, benefit from Convention No. 16, if all EU MSs53 were bound by it: – the Convention would then apply between all EU MSs instead of the mere 16 MSs currently bound by it: 50 Hague 2006 Securities Convention (Art. 18 et seq.), 2005 Choice of Court Convention (Art. 29 et seq.), 2007 Child Support Convention (Art. 59 et seq.), 2007 Maintenance Applicable Law Protocol (Art. 24 et seq.), 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Art. 26 et seq.). 51 Alternatively, the EU could “authorise” its MSs that are not yet bound by the ICCS Convention to join the instrument. But experience with certain Hague Conventions shows that may be a time-consuming process. 52 For a critical comment, see H.-P. MANZEL/ K. THORN/ R. WAGNER, Europäisches Kollisionsrecht 2013: Atempause im status quo, IPRax 2014, p. 1-27, at 5. 53 If the procedure of art. 81 TFEU rather than art. 21 – the basis for Regulation 2016/1191 – were followed, with the exception of Denmark, and, perhaps, the UK and Ireland.

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Hans van Loon – all EU MSs, and not just 16, would be linked with the 8 other non-EU MSs Parties to the Convention, and, – this might well give a boost to the accession by more non-EU MSs to the Convention (particularly if English – and Spanish – were added as authentic languages). 41. To enable the EU to join this Convention, an amendment of its final clauses would be needed. Examples for such clauses are readily available in post-2000 Hague Conventions,54 and – as explained below – amending the Convention would be easy. A similar amendment of Convention No. 34, intended to enlarge the scope of, and replace, Convention No. 16, would re-animate that Convention. Since this instrument is not yet in force, one or more of the other current ICCS Members would need join the Convention in addition to Belgium which has already ratified the Convention.55 France, Spain and Switzerland, which have already signed the instrument, might consider proceeding to the next step of ratifying the Convention, thus bringing it into force. 42. It would be best, perhaps, to start with these two Conventions, and consider subsequently which other ICCS Conventions – in particular those providing for the issue of public documents and those providing for the exchange of information between authorities – would lend themselves to be opened to the EU. 2.

Add English (and Preferably also Spanish) as an Authentic Language

43. Presently, only the French text of ICCS Conventions is authentic. ICCS, having noticed the limited accessibility which this causes, has helpfully prepared unofficial English translations. However, it would be even more helpful if the Conventions would be authentic in both French and English. Even better, given the importance of civil status matters to Latin America where Spanish is the dominant language and knowledge of French and English is limited, Spanish might be added as the third authentic language. Spain has ratified most ICCS Conventions, and as a result Spanish translations are already available. Again, it might be best to start with Conventions Nos. 16 and 34. 3.

How Could this Be Done?

44. Amending these Conventions, in order to energise them, would not be a big deal. Formally, it would require a meeting of the General Assembly.56 France (State of the seat of ICCS), Spain (with its manifold links with other Spanish speaking States) or Switzerland (depositary of the Conventions) might have a particular interest in triggering such a meeting. In accordance with Art. 40 of the See note 50. See note 26. 56 See Art. 27 of the 2015 Rules of the ICCS, available at . 54 55

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work 1969 Vienna Convention on the Law of Treaties, all of the States Parties to these Conventions, including non-ICCS Members, should be invited to take part in the negotiations on the amendments, with the right to co-decide on the modifications.57 Obviously, the EU would have to take part in the process, and it would be highly desirable if other interested intergovernmental organisations, such as the PUIA (and CLARCIEV), the HCCH, the UNHCR, UNICEF, and NGOs such as the European Association of Civil Registry Officials58 would participate in it. 45. Such a meeting, whilst concentrating on Conventions Nos.16 and 34, could also take a preliminary look at other ICCS Conventions that might attract wider interest, such as Nos. 20 and 27, as well as at the ICCS Platform. B.

Regarding the Organisation

46. While a meeting of the ICCS General Assembly to amend ICCS Conventions, would be a useful step, the fact remains that ICCS, as an organisation, currently is at its last gasp. What can be done to (re-)establish the necessary organisational structure and support for its useful work, and to develop its potential? 1.

Reforming the Existing ICCS Organisation?

47. As noted, the ICCS reached its height around 2008, when it was comprised of 17 Member States, before the exodus of 10 Members began. To convince these Members to return to the organisation, to which they just recently gave the cold shoulder, would seem an almost impossible task. In theory, there is a good argument for them to retrace their steps: they remain linked by Conventions, the operation of which requires continuing monitoring and support. But given the insufficient resources of what is left of the ICCS, the organisation cannot deliver such “after sales care” anymore. Unless the EU is willing to join the organisation as a full Member, these departures must be considered irreversible. 48. Enabling the EU to join the organisation would require a formal amendment of the ICCS’s Statute.59 This is feasible: the amendments inserted in the Statute of the HCCH in 2005, effective in 2007, and the preceding procedural and organisational steps to enable the EU to join the Conference, could serve as a model.60

The invitation suffices; invited States remain free to accept the invitation or not, and the modification procedure does not depend on their participation. 58 EVS, Europäischer Verband der Standesbeamtinnen und Beamten e.V. available at . 59 I.e., the 1950 Bern Protocol, available at ; the 1950 Additional Protocol available at . 60 See H. VAN LOON/ A. SCHULZ, The European Community and the Hague Conference on Private International Law, in B. MARTENCZUK/ S. VAN THIEL (eds) Justice, 57

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Hans van Loon 49. However, are the conditions fulfilled, and is there enough of an incentive for the EU to join the ICCS? The EU would find itself with 5 EU MSs only: Belgium, France, Greece, Luxemburg, Spain, and 2 non-EU States: Switzerland and Turkey. Joining would probably be possible and interesting only if the EU were envisaging this as a step in a comprehensive plan aimed both at (1) ensuring the application of certain existing and future ICCS instruments throughout the EU, and (2) developing cooperation between the EU and third States in matters of (electronic) civil status documents. But that could hardly be done without ICCS membership of the currently missing EU MSs – since States would remain in the lead for essential matters61 –, and without a special commitment or sponsorship by the EU. 2.

Gradual Transfer of ICCS Functions to the Hague Conference on Private International Law?

50. However, there is another option. The work of the ICCS is also complementary to that of the Hague Conference. The HCCH has both a more specialised mission focussed on cross-border cooperation in civil law matters, and a broader Membership than the EU, indeed as it includes the EU as a Member. The ICCS and the HCCH have cooperated for many decades on the basis of an agreement concluded in 1969.62 The ICCS has been particularly helpful in the preparation of several Hague Conventions, and, most recently, in the ongoing work on parentage and international surrogacy arrangements. Moreover, the ICCS has been associated with the work of HCCH Special Commission meetings on the practical operation of the Hague Apostille, Service and Evidence Conventions and the follow-up to the 1993 Intercountry Adoption Convention for which it provided its expert advice in the drafting of forms for consents and for the certificate of conformity of adoptions with the Convention. 51. Back in 1969, the ICCS had 10 Member States and the HCCH had 24 (including all ICCS MSs). Current numbers are very different: the ICCS has 7 vs. the HCCH, which has 82 plus the EU. Today the HCCH’s membership includes all 7 ICCS MSs (and all 10 former MSs), all other States Parties to the ICCS Conventions, with the sole exception of Cabo Verde (which, however, is Party to the 1961 Hague Apostille, and the 1993 Hague Adoption Conventions), plus all ICCS Observer States (with one exception).63 Liberty and Security: New Challenges for EU external relations, Brussels 2008, p. 257-299, in particular at 279-298. 61 For example, regarding the admission of new MSs, and budgetary matters. 62 The Agreement not only provided that the organisations would keep each other mutually informed but also that if one of them considered that a matter treated by the other was also interested in it, it would “be up to it to suggest the meeting of a mixed commission, whose composition, functioning and attributions would then be determined by mutual agreement”. No such mixed commission was ever established however. 63 The Holy See. However, the Holy See is a Party to the 1954 Hague Convention on Civil Procedure, and has been associated, as an Observer, with other activities of the HCCH.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work 52. The expansion of States Parties to ICCS Conventions has not kept pace with that of the Hague Conventions. A further growth of States Parties to ICCS Convention No. 16, and the entry into force and wide ratification of Convention No. 34, would serve both the operation of Hague Conventions and its ongoing work. ICCS Conventions, if widely ratified, would not conflict with, but serve the very purpose of the 1961 Hague Apostille Convention, namely to make life easier for citizens all over the world. a)

Include Relevant ICCS Conventions in the Hague Conference Website

53. As a first step to ensure both the availability of updated information on, and broader access to, globally relevant work of the ICCS, some of the ICCS texts could be posted on the website of the Hague Conference. It would not be the first time for the HCCH to support the use of the legislative products of another intergovernmental organisation that is unable to do so itself, and, indeed, to further develop the practical operation of those products. In 1996 the Conference decided to examine the practical operation of the 1956 UN New York Convention on the Recovery Abroad of Maintenance jointly with that of its own Conventions on maintenance obligations. It also decided to keep an up-to-date list of the authorities provided for under the 1956 UN Convention, and to communicate this list, once or twice a year, to all those authorities in its Member States. Moreover, the Conference convened a working group to draft model forms to accompany requests under the 1956 UN Convention, and to ensure the acknowledgement of receipt of such requests.64 Following the meeting of a Special Commission in March 2000, these models were published,65 including on the HCCH website.66 54. Clearly, a choice would have to be made, and only such ICCS information should be published that is relevant to the operation of Hague Conventions or its ongoing work. Obvious candidates are the above-mentioned ICCS Conventions Nos. 16, and 34. Given the operation in parallel with Regulation 2016/1191, a link may well be provided on the HCCH website to the EU Justice Portal page.67

64 See Final Act of the Eighteenth Session, under B.7, Hague Conference on Private International Law, Proceedings of the Eighteenth Session (1996), Tome I, Miscellaneous Matters, 1999, p. 47. 65 See Report on and Conclusions of the Special Commission on Maintenance Obligations of April 1999, Hague Conference on Private International Law, Proceedings of the Nineteenth Session 2002, Tome I, Miscellaneous Matters, 2008, p. 217-235, at 221, under E, and p. 220-235. 66 Available at . 67 Available at .

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Hans van Loon b)

Include Relevant ICCS Conventions when Reviewing the Practical Operation of Hague Conventions

55. Given their complementary role in relation to the Hague Children’s Conventions, relevant ICCS Conventions could usefully be included in the agendas of Special Commission meetings on the practical operation of these instruments. That could be the start of a gradual increase of interest for ICCS Conventions, and, in combination with the EU becoming a Party to them and their availability in English and Spanish, might well attract many additional States Parties. c)

Resume the Development of the ICCS Platform

56. The important HCCH work in relation to the electronic transfer of documents – e.g. the electronic Apostille Programme (e-APP),68 and the electronic case management and secure communication system (iSupport) developed for the 2007 Hague Child Support Convention, with important financial support by the EU69 – puts the HCCH in an ideal position to cooperate with the ICCS and the EU in the further development of the ICCS Platform, which, as noted, has already benefitted from EU support, and to examine (possible alternatives to) ICCS Convention No. 33. 57. The upshot of such initiatives would be that the Hague Conference would, step by step, enlarge its expertise and services in a field which is really an extension of its current domain, to the benefit of its Members, including the EU, and their citizens and residents, all over the world. ICCS and its work would be embedded in a wider, global, receptive environment which would prevent the collapse of its nearly 70 years of expert work and, on the contrary, ensure the continuation and expansion of its mission. 58. A formal basis for a joint examination of these possibilities may be found in the above mentioned 1969 ICCS-HCCH Agreement, which provides for the creation of a “mixed commission” to study matters treated by one or both organisations in which the other was also interested. Naturally, such a commission should benefit from close cooperation with other organisations mentioned above, including – in addition to the EU, itself an HCCH Member – UNICEF, UNHCR and PUICA/CLARCIEV, as well as NGOs such as the European Association of Civil Registry Officials. Indeed, it should be remembered that the initiative for the creation of the ICCS was taken, bottom-up, by two prominent civil registry officials. The support of those who, on a daily basis are involved in civil registry issues is crucial.

68

Available at . Available

69

at

.

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Requiem or Transformation? Perspectives for the CIEC/ICCS and its Work

IV. Conclusion 59. In our mobile world, ensuring recognition of public documents abroad and of interoperability of civil registry systems among different jurisdictions is indispensable. This requires intergovernmental cooperation, for which initiatives have been taken both in Europe and in Latin America. The most important intergovernmental agency in terms of law-making and law-servicing is the ICCS, which has drawn up 34 Conventions, and undertaken many other important activities in this field. However, the ICCS currently finds itself in a situation of paralysis, following a recent exodus of Member States. The same goes for its Conventions, in part also due to a lack of synergy with the work of the EU, despite the complementarity of these Conventions with EU legislation, in particular EU Regulation 2016/1191, applicable since 16 February 2019. 60. The article sketches a way forward, in relation to both the ICCS Conventions, and the ICCS as an organisation. Regarding the Conventions, it is suggested that a beginning should be made to open some of them for accession by the EU, and to amend them to add English and Spanish as authentic languages. This would not be a major operation. Regarding the organisation itself, the possibilities for its reform seem doubtful. Therefore, it is suggested that the ICCS functions might gradually be transferred to the Hague Conference, whose work is also complementary to that of the ICCS. Relevant texts of, and data concerning, the ICCS Conventions could be included in the HCCH website, ICCS Conventions could be included in the agendas of Special Commission review meetings of Hague Conventions; and, the Hague Conference would be well-equipped to resume the development of the potentially useful ICCS Platform, in which much resources, including funding by the EU, have already been invested. In this way, the work and potential of the ICCS could be preserved and developed, in the interest of States, civil registries, administrations, judges, and, indeed, individuals and families all over the world.

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MANDATORY DIRECT REMEDIES AGAINST THE PRODUCER FOR REPAIR OR REPLACEMENT IN PRIVATE INTERNATIONAL LAW Ádám FUGLINSZKY*

I.

II.

III.

IV.

Lack of Harmonised Substantive Law and the Significance of Conflict of Law Rules A. Lack of Harmonised Substantive Law at EU Level B. Models and Variations among the Member States Having a Kind of Direct Remedy C. Consequences and the Aim of this Study The Classification of this Kind of Remedy A. Variations and Possibilities B. Duty Assumed Voluntarily? Rome I or Rome II? C. Case C-26/91 (Handte) and its Aftermath D. Does the Rome II Regulation Cover Direct Claims for Repair or Replacement? E. Interim Conclusion: Analogous Application of Art. 5 Rome II Regulation Guideline on Finding the Applicable Law: the Five-Stage Cascade of Art 5 Rome II A. Step One: the Same Habitual Residence B. Step Two: the Product Was Marketed in the Country where the Consumer Has his/her Habitual Residence C. Step Three: Law of the Country of the Product’s Acquisition D. Step Four: the Law of the Country in which the “Damage” Occurred E. Step Five: Foreseeability and Closer Connection Summary and Conclusions

Ádám Fuglinszky, LL.M. (Heidelberg), PhD (Hamburg), Professor of civil law at Eötvös Loránd University (ELTE), Budapest, Hungary, [email protected]. This paper is the 2nd part of the presentation delivered at the conference “Product Safety, Consumers’ Health and Liability Law – Challenges Posed by Science, Policy Reasons and Contemporary Markets” that took place on 8-9th June 2017 at Laval University, Quebec City, Canada. For the first part on substantive matters and on the chances of further harmonisation cf. Á. FUGLINSZKY, The Conceivable Ways and Means of the Further Harmonization of European Product Liability Law – Mandatory Direct Claim against the Producer for Repair or Replacement? Zeitschrift für Europäisches Privatrecht 2018/3, p. 590 et seq. *

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 95-111 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Ádám Fuglinszky

I.

Lack of Harmonised Substantive Law and the Significance of Conflict of Law Rules

A.

Lack of Harmonised Substantive Law at EU Level

Although it was considered and proposed in the Commission Green Paper of 15 November 1993 on guarantees for consumer goods and after-sales services (the Green paper) and in the first draft,1 the Consumer Sales Directive2 did not ultimately provide the consumer with mandatory direct remedies of repair and/or replacement against the producer and/or upstream seller/s3 despite this solution being emphasised in recital No. 23 of the directive as a possible further step in harmonizing European law.4 The same is true of the 2017 proposal for a Directive “on certain aspects concerning contracts for the online and other distance sales of goods”, which is intended to repeal the Consumer Sales Directive.5 In the European Commission proposal, there is no such direct remedy contained, either. Consequently, while uniformity prevails in the EU member States concerning warranty or guarantee claims of the consumer both against the immediate – or final – seller based on the Consumer Sales Directive and with regard to the claim for damages against the producer – or upstream seller – caused by defective products based on the Product Liability Directive;6 no such uniformity exists for 1 Commission Green Paper of 15 November 1993 on guarantees for consumer goods and after-sales services, COM(93) 509 final, O J C 338, 15.12.1993, available here: last download April 22 2017. Cf. pages 86-93. See M. EBERS/ A. JANSSEN/ O. MEYER, Comparative Report, in M. EBERS/ A. JANSSEN/ O. MEYER (eds), European Perspectives on Producers’ Liability, Direct Producers’ Liability for Non-conformity and the Sellers’ Right of Redress, Munich 2009, p. 4. 2 Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees. 3 An “upstream seller” is a seller occupying a higher level in the contractual chain. 4 Recital No. 23 reads “Whereas legislation and case-law in this area in the various Member States show that there is growing concern to ensure a high level of consumer protection; whereas, in the light of this trend and the experience acquired in implementing this Directive, it may be necessary to envisage more far-reaching harmonisation, notably by providing for the producer's direct liability for defects for which he is responsible” Since the Product Liability Directive already existed by that time, nothing else can be referred to here, but the extension of direct liability to specific performance remedies against the producer and/or upstream seller/s. 5 Amended proposal for a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other distance sales of goods, amending Regulation (EC) No 2006/2004 of the European Parliament and of the Council and Directive 2009/22/EC of the European Parliament and of the Council and repealing Directive 1999/44/EC of the European Parliament and of the Council; COM/2017/0637 final - 2015/0288 (COD). 6 Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for

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Classification of Direct Remedies for Repair/Replacement against the Producer mandatory direct remedies against the producer and/or upstream seller/s for repair or replacement of the defective product itself.7 Some member States provide for such a mandatory direct claim while others do not, and there are even significant differences between national solutions. Some member States follow the derivative-contractual model and others the sui generis-extracontractual approach. B.

Models and Variations among the Member States Having a Kind of Direct Remedy

The derivative-contractual approach means that “direct claims are derived from the chain of contracts”, i.e. if the product does not conform with the requirements set by law or provided for in the original contract between the producer and first seller, who is not the same as the producer (i.e. wholesaler) then the contractual claim of the first seller who is different from the producer (i.e. of the contracting party who buys the product immediately from the producer) is automatically transferred by every transaction as an accessory of the product along the contractual chain, so that the contractual claim finally reaches the consumer; the latter being the final or remote buyer from the producer’s point of view. There are two subtypes within this approach. The so-called “double limitation model” means that, beyond the precondition mentioned above, the consumer only has a direct claim against the producer if the performance of the contract concluded between the consumer and his or her seller is also defective and, therefore, the consumer has also a direct and founded warranty or guarantee claim against the final seller. As far as the other subtype is concerned, which we call the “as it is” model, it is irrelevant whether the consumer has a claim against his or her own contracting party or not. The only fact that matters is whether the first buyer of the product has a valid claim in warranty against the producer. According to the sui generis-extra-contractual approach, the consumer’s direct claim against the producer and/or upstream seller is an independent, sui generis, mandatory and extracontractual remedy by law, which cannot and should not be traced back to any contractual claim or any element of the contractual chain. There are two subtypes here as well. Either there can be no defence at all; if the product is defective, the producer is strictly liable, whatever the reason for the defect, and it shall repair the product or provide the consumer with a new one. If the defect did not emerge while the product was within their control or can be traced back to a specific statement made by the final seller, the producer still has to vouch for it; however, it can enforce a recourse claim against the party in the contractual chain who is in fact responsible for the defect. As far as the second subtype is concerned, the responsibility is a strict one but not an absolute one, i.e. the producer and/or upstream seller is obliged to provide the consumer with a new product or to repair the defect regardless of the fault, but there are defences – defective products. For example if the consumer or a bystander suffers personal injury or the kitchen furniture gets destroyed by the fire. 7 See the critics for a lack of uniformity in the Green Paper (note 1), at 87.

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Ádám Fuglinszky frequently “borrowed” from the harmonised European product liability law – to which the producer and/or wholesaler can refer in order to be released from their obligation to repair and replace the product. Besides this taxonomy, there are some further differences in the solutions of the member States already providing mandatory direct claims. There are legal systems where only consumers are entitled to use this remedy, while in other countries all natural and legal persons can enforce such a claim. In some member States, the claimant can choose freely whether he or she sues the producer and/or one of the upstream sellers in the contractual chain, while in other countries the remedy applies only against the producer of the goods, their importer into the territory of the EU or the “quasi producer” (who puts their name, trademark or another distinguishing feature on the product). A further question is precisely which remedies apply, in other words whether price reduction and/or rescission are available for the claimant; or, only repair or replacement; or whether the “all in” principle applies, where the claimant can opt for any of these remedies. In the majority of member States – where a mandatory direct claim against the producer exists – the final seller and the producer – and other sellers upwards in the contractual chain – are “jointly liable”. In Sweden the consumer can only opt for the direct producer’s liability – including repair and replacement – if the final seller is insolvent, has ceased to trade or cannot be found.8 C.

Consequences and the Aim of this Study

Since this field is not (yet) harmonised, conflict of law rules play an important role in solving cross-border cases. For example, a tourist having his or her habitual residence in Germany buys a defective product in Portugal that is marketed in Germany, or vice versa: the visitor having its habitual residence in Portugal acquires the product in Germany; or to make it more complicated, the tourist having their habitual residence in Hungary buys a pharmaceutical product in Austria, which has been manufactured in Canada. Which law is applicable? The diversity among the legal systems of member States makes direct claims similar to a lottery; depending on the applicable law, the visitor has a mandatory direct remedy or not. The significance of private international law – and thereby the lottery effect – could be reduced by further uniformisation of the substantive law at the European level. After having raised the issue here (I), the classification of this kind of remedy will be analysed, with special regard to whether the Rome I or the Rome II regulation applies to the classification of this kind of claim, since the remedy in question is not a damage claim (covered by the Product Liability Directive) and therefore it is not explicitly covered by Art 5 of the Rome II regulation or by any For a more detailed analysis and further references see M. EBERS/ A. JANSSEN/ O. MEYER (note 1), 18 et seq. and 35 et seq. (served also as the base of this summary here) and (also with references to Quebec and US law) Á. FUGLINSZKY, The Conceivable Ways and Means of the Further Harmonization of European Product Liability Law – Mandatory Direct Claim against the Producer for Repair or Replacement? Zeitschrift für Europäisches Privatrecht 2018/3, p. 596 et seq. 8

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Classification of Direct Remedies for Repair/Replacement against the Producer other particular provision of those regulations. It will be considered whether the two Rome regulations indeed cover all obligations without a gap, and whether the Handte judgment of the CJEU can be referred to by analogy regarding the applicable law. It will be argued for the extracontractual classification and, hence, for the analogous application of Art. 5 of the Rome II regulation (II). This is followed by a simulation, testing the five-stage cascade of Art 5 of the Rome II regulation, projected to the classification of the respective mandatory direct remedy for repair or replacement; also having regard to the escape clause in Art. 5.2 (III). Finally, the impact of the status quo (i.e. the lack of harmonised remedies at the European level resulting in diversity among member States) on cross-border cases is highlighted from the point of view of conflict of laws rules (IV), leading to the conclusion that further harmonisation of substantive law should at least be considered within the EU.

II.

The Classification of this Kind of Remedy

A.

Variations and Possibilities

There have been a couple of attempts to classify direct claims in the relevant legal literature. Although these attempts tended to focus on the redress of the last seller against the producer or any upstream sellers to whom the defect could be attributed (after the last seller fulfilled the request of his contracting party, the consumer); the conclusions can be transferred to the classification of the consumer’s direct remedy as well. With reference to French and Belgian law, this obligation was (and is) classified as contractual, since the remedies for non-conformity adhere to the ownership of the contractual goods and are transferred to the new owner along the contractual chain. Either the concept of a fictitious assignment or that of a contract which grants rights to a third party was referred to. On the bases of other legal systems, such as the German, the redress of the last seller was classified as extracontractual, since there is no contractual relationship between the last seller and the producer.9 The common denominator among these views seems to be that the classification shall be accomplished on the basis of the law of obligations, though also other connecting factors can be considered, for example that of property law (lex rei sitae), even because the remedy is seen as an accessory to the property in some legal systems. In our view, the classification of this kind of remedy as a matter of law of obligations is a convincing starting point. First of all, the remedies are far from being classified as accessory to the property in every country, but in all legal systems of the member States – as far as information thereon is accessible – they S. SENDMEYER, Direct Producer’s Liability and Seller’s Right of Redress in Private International Law, in M. EBERS/ A. JANSSEN/ O. MEYER (eds), (note 1), p.162. A. DUTTA, Der Europäische Letzverkäuferregress bei grenzüberschreitenden Absatzketten im Binnenmarkt, Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht 2007/1, p. 94. 9

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Ádám Fuglinszky have a strong connection to defective performance, defective products, sales contracts, contractual chains and warranty claims, which all are parts of the law of obligations of the member States. The aim and content of the direct remedies in question (i.e. the consumer can claim repair and/or replacement) fits into the overarching concept of obligations. Even if the direct remedies are seen as accessories of the property in some legal systems, not even in these jurisdictions do they classify as in rem rights and actions. The summaries, analyses and debates on the legal nature of them and the appropriate connecting factors in private international law stay within the law of obligations, and they are about whether the applicable connecting factors should be of a contractual or extracontractual nature. However, since the private international law of obligations is harmonised at the European level, the answer can and should be found in European law in this respect. B.

Duty Assumed Voluntarily? Rome I or Rome II?

If the claim is based on an extracontractual legal relationship, it will fall within the scope of Rome II regulation,10 while regulation Rome I11 applies to the identification of the governing law if the direct claim is classified as a contractual remedy. As the Court of Justice of the European Union (CJEU) clarified and academic scholarship confirmed, the classification in the particular cross-border case shall never be based on preconceptions of the lex fori; the decisive factor is that a particular duty was assumed voluntarily by the addressee or, to the contrary, the duty has been imposed on him by (mandatory) law.12 The CJEU seems to insist on a rather narrow concept of contract and contractual claims.13 Hence, from the point of view of classification, it does not matter whether the direct claim is seen as a contractual or extracontractual claim by the substantive lex fori. C.

Case C-26/91 (Handte) and its Aftermath

The CJEU faced a similar question related to jurisdiction (and not to the applicable law) in the Handte case (C-26/91), referred to the CJEU by the French Cour de Cassation for preliminary ruling, that touched upon the legal nature and autono10 Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007on the law applicable to non-contractual obligations (Rome II). 11 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I). 12 H. UNBERATH/ J. CZIUPKA, Einl Rom II-VO, in T. RAUSCHER (ed), Europäisches Zivilprozess- und Kollisionsrecht, EuZPR/EuIPR, Kommentar, Munich 2011, marginal No. 6–7, and Art. 1 Rom II-VO, marginal No. 19–20, 22. Cf. ECJ, 17 September 2002, Fonderie Officine Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik GmbH (HWS), ECLI:EU:C:2002:499. This judgment is referred to in all handbooks and study books, cf. among others B. LURGER/ M. MELCHER, Handbuch Internationales Privatrecht mint Hinweisen auf das Internationale Zivilverfahrensrecht, Wien 2017, marginal No. 5/11. With regard to the last seller’s redress cf. A. DUTTA (note 9), at 95. 13 A. DUTTA (note 9), at 95.

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Classification of Direct Remedies for Repair/Replacement against the Producer mous classification of the French action directe.14 A limited liability company having its registered seat in France bought a suction system to be fitted to its two metal polishing machines from another French company (Handte France) that was the subsidiary of a third company having its registered seat in Germany (Handte Germany). The German parent company was the manufacturer of the suction system. The buyer claimed compensation in a French court for damages incurred because the equipment manufactured and sold did not comply with the rules on hygiene and safety at work and was unfit for its intended purpose. The question referred to by the Cour de Cassation touched upon Article 5(1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Brussels Convention),15 which allowed a person in another Contracting State to be sued (different from the contracting state in which that particular person is domiciled), namely “in matters relating to a contract, in the courts for the place of performance of the obligation in question.” There was a contractual relationship between the plaintiff and Handte France but Handte Germany was not a party to that contract. The French derivative concept of action directe entitled the buyer to proceed against the manufacturer directly. The CJEU came to the conclusion that the phrase “matters relating to a contract” does not cover a situation “in which there is no obligation freely assumed by one party towards another.” Handte Germany did not assume any duty voluntarily towards the (subsequent) buyer.16 The CJEU’s statement and classification of the direct claim against the producer as of having an extracontractual character is mainly confirmed in the relevant literature. First, the manufacturer did not assume any liability or duty towards the subsequent buyer voluntarily and this is what matters (autonomous interpretation and application of the Rome regulations).17 Second, the manufacturer’s duties based on the action directe are provided by law;18 i.e. the (French) 14 ECJ, 17 June 1992, Jakob Handte & Co. GmbH v Traitements Mécano-chimiques des Surfaces SA, ECLI:EU:C:1992:268. 15 Succeeded first by Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I regulation) which has been replaced recently by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels Ia regulation). 16 Cf. marginal No. 15-16. The CJEU added further arguments to justify the decision. In the case of a chain of international contracts, “the parties' contractual obligations may vary from contract to contract, so that the contractual rights which the subbuyer can enforce against his immediate seller will not necessarily be the same as those which the manufacturer will have accepted in his relationship with the first buyer.” (Marginal No. 17). 17 H. UNBERATH/ J. CZIUPKA, Art 5 Rom II-VO (note 12), at marginal No. 34–36. M. LEHMANN, Rom II. Art. 5, in R. HÜßTEGE/ H-P. MANSEL (eds), BGB, RomVerordnungen – EuErbVO – HUP. 2nd ed., München 2015, marginal No. 34. 18 D. MARTINY, Zur Einordnung und Anknüpfung der Ansprüche und der Haftung Dritter im Internationalen Schuldrecht, in P. MANKOWSKI/ W. WURMNEST (eds), Festschrift für Ulrich Magnus zum 70. Geburtstag, Köln 2014, p. 496. According to a minority opinion,

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Ádám Fuglinszky concept of (fictitious) assignment or the reference to contracts granting rights to a third person are thus artificial, in the sense that there is no real voluntary assumption of duties and so they do not represent and/or replace the voluntary assumption of (contractual) obligations that matters in the CJEU case law. Third, in case of doubt, i.e. if the legal nature of a claim cannot be clarified unequivocally it is presumed to have an extracontractual claim.19 Finally, fourth, one of the fundamental reasons of the CJEU’s narrow approach on contract – restricted to voluntarily assumption of duties – elaborated on with regard to jurisdiction, namely predictability from the producer’s perspective, has the same significance regarding the applicable law. As it is pointed out in Handte: if another approach were followed, it would not be predictable for the manufacturer whether or not they could possibly be sued in another contracting State where a subsequent sales contract was performed, and the identity and domicile of the final buyer is unknown to the manufacturer in most of the cases.20 Transposed to the applicable law, the manufacturer would not be able to predict whether they can possibly be sued on the basis of the substantive law of another State wherein a subsequent sales contract was performed, and the identity and domicile of the final buyer is unknown to the manufacturer. Consequently, a direct claim against the producer (and/or the suppliers further up the chain) for repair or replacement is classified as an extracontractual claim from the point of view of both international civil procedure law and European private international law, since the reasons of the CJEU and the scholarly reflections can be transferred accordingly to the issue of the applicable law.21 As such, the Rome II regulation prevails.22 D.

Does the Rome II Regulation Cover Direct Claims for Repair or Replacement?

Art. 1.1 of Rome II declares the regulation’s applicability to “non-contractual obligations in civil and commercial matters.” The regulation’s chapters however cover only tort/delict, unjust enrichment, negotiorum gestio and culpa in contrahendo explicitly. In fact, the direct claim against the producer for repair or replacement can be fitted in neither of them. Although the manufacture and/or sale of defective products can be seen as tortious (i.e. wrongful) conduct depending on the dogmatics and methodology of the legal system in question, the legal consequence of a tort/delict is to provide compensation (i.e. damages) for the losses suffered, in the form of money in most cases, the mandatory direct remedy analysed here is however aimed at specific performance (in kind). This is a characthe legal basis of the claim is still contractual, despite the defendant was not party to that particular contract, cf. O. KNÖFEL, Rom II. Art. 1, in R. HÜßTEGE/ H-P. MANSEL (eds), BGB, Rom-Verordnungen – EuErbVO – HUP. 2nd ed., München 2015, marginal No. 4. 19 D. MARTINY (note 18), at 500. 20 Handte, marginal No. 18-20. 21 A.o. cf. I. SCHWENZER/ M. SCHMIDT, Extending the CISG to Non-Privity Parties, Vindobona Journal of International Commercial Law & Arbitration 2009/1, p. 117. 22 With reference to the action directe in general S. SENDMEYER (note 9), at 163.

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Classification of Direct Remedies for Repair/Replacement against the Producer teristic difference to the harmonised product liability law (covered by Art. 5 of the Rome II regulation), which covers consequential losses caused by defective products through personal injuries and damage to items other than the defective product and that is intended for private use. The direct application of Art 5 is also excluded because, according to the prevailing view, losses in the defective product itself are not covered by it.23 Although specific performance is not a damage claim, but from the functional aspect, repair or replacement on the one hand and damage claim for losses on the other hand, which can be traced back to the loss of utility and value of the product itself due to the defect cover in fact the same inferiority of the product and are, therefore, to some extent functionally interchangeable. Regarding the mandatory direct claim elaborated on here, we can certainly exclude – beyond tort/delict – the applicability of unjust enrichment, negotiorum gestio and culpa in contrahendo. It is controversial in the scholarship whether the two Rome regulations on the applicable law regarding obligations cover all legal relationships in this field and provide a comprehensive set of rules, without any “black holes” or, on the contrary, concerning those obligations that cannot be subsumed under either of the regulations, there is room left for the application of the national conflict of laws rules of the member States. The former view seems to have attracted more support.24 Therefore, if such an obligation which is not explicitly covered by either of the Rome regulations exists, the classification and the identification of the applicable law must nevertheless take place with reference to any rules of either regulation: if there is no other possibility, then it must be done by analogy, i.e. one should lean to that particular rule which is the closest to that particular legal institution, obligation to which neither of the rules (chapters) of the regulation applies explicitly and directly. E.

Interim Conclusion: Analogous Application of Art. 5 Rome II Regulation

We agree with the view presented above: the two Rome regulations cover the whole area of the law of obligations and therefore the conflict of law rule applicable to extracontractual direct claims against the producer and upstream sellers for

B. LURGER/ M. MELCHER (note 12), marginal No. 5/50. For example, the German-speaking scholars H. UNBERATH/ J. CZIUPKA, Art. 1 Rom II-VO (note 12), marginal No. 16, drew the conclusion expressed in the text referring to the travaux préparatoires albeit with a focus on the particular chapters of the Rome II regulation and attributing an effect to their titles that limit the scope of Rome II. See also Art. 1 Rom II-VO (note 12), marginal No. 24; Art.4 Rom II-VO (note 12), marginal No. 18. In favour of the opposite view, i.e. for a comprehensive coverage of all obligations by the Rome I and II regulations is A. JUNKER, Rom II-VO Art.1, in Münchener Kommentar zum BGB, 6. Auflage, München 2015, marginal No. 5. A different view is represented by O. KNÖFEL, Rom II. Art. 1 (note 18), marginal No. 2, 5. 23 24

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Ádám Fuglinszky repair or replacement shall be found by analogy with reference to its closest “relative” in the Rome II regulation.25 We plead for and take a stand on the analogous application of Art. 5 of Rome II regulation – product liability – for the following reasons.26 First, despite there being several differences between the mandatory direct remedy analysed here and the well-known harmonised product liability claim for damages, there are also some remarkable similarities (though the solutions of the member states are diverse regarding the conditions of the remedies). The direct claim for specific performance is a mandatory claim against the producer and/or upstream seller that encroaches on the contractual chain and thereby the privity of contract, it is classified – at least from the standpoint of private international law – as an extracontractual claim, just like the “classic” product liability claim. In some member states, there are defences, too, again with some overlaps with the defences made known by product liability law with special regard to the Product Liability Directive. Second, the policy considerations explained in recital 20 of Rome II (on Art. 5) seek application also regarding the mandatory direct claims analysed here; in other words, their justification is convincing beyond the damage claims, concerning repair and replacement. Recital 20 reads as follows: “The conflict-oflaw rule in matters of product liability should meet the objectives of fairly spreading the risks inherent in a modern high-technology society, protecting consumers' health, stimulating innovation, securing undistorted competition and facilitating trade. Creation of a cascade system of connecting factors, together with a foreseeability clause, is a balanced solution in regard to these objectives.” The foreseeability and predictability from the producer’s point of view is one of the core elements of the product liability “cascade” provided for in Art. 5. The producer shall be subject to a legal system as applicable law only if he was able to expect and take into account that – since their products are marketed in the respective country – the remedies of the given legal system can be applied against him. If this is the case, the producer can take this into account when it comes to pricing: in The analysis of the present paper does not touch upon Art. 28.1 Rome II regulation, wherein it is stated that the regulation “shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-law rules relating to noncontractual obligations.” In line with this provision, the Hague Convention of 2 October 1973 on the Law Applicable to Product Liability prevails over the Rome II regulation in cross-border product liability cases, if such a court has jurisdiction and proceeds to establish the applicable law, which is acting in and for a member state being member to this Hague convention. Cf. B. LURGER/ M. MELCHER (note 12), marginal No. 5/19, 5/59. The following EU member States are party to the convention as of February, 6th, 2018: Croatia, Finland, France, Luxembourg, the Netherlands, Slovenia, and Spain. Cf. last download: 6. February 2018. It goes beyond the goal of this paper to analyse how the applicable law could or should be identified, if not the Rome II regulation but the Hague convention applied (by analogy). 26 See the prevailing view regarding the final seller’s redress, cf. S. SENDMEYER (note 9), 164; A. DUTTA (note 9), 99 and for all direct remedies against the producer: A. STAUDINGER, Rechtsvereinheitlichung innerhalb Europas: Rom I und Rom II, Anwaltsblatt 2018/1, p. 13. 25

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Classification of Direct Remedies for Repair/Replacement against the Producer other words, allowing for the additional costs generated by the direct remedies against him. In this way the costs of the remedies are reflected in the price of the product and therefore the consumer – from an economic point of view – buys the remedy together with the product.27 Finally, third, since Art. 5 goes beyond the producer’s liability and it applies to the liability for defective products of the upstream sellers, too,28 this is one more sign that the direct claim for repair and replacement fits into the rationale of Art. 5. In most of the member states that allow for such a direct claim, the consumer can raise it also against the upstream seller.29

III. Guideline on Finding the Applicable Law: the Five-Stage Cascade of Art 5 Rome II A.

Step One: the Same Habitual Residence

Provided that the parties did not agree to submit their non-contractual obligations to the law of their choice, according to Art 14 Rome II regulation, mandatory direct claims for repair or replacement against the producer will be governed per analogiam by Art. 4.2 of Rome II, since Art. 5 is without prejudice to its application. Art. 4.2. states that “where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply”.30 If a tourist having his habitual residence in Germany buys a product (that has been manufactured in Germany) in Hungary, in Portugal, etc. and the producer’s “habitual residence” is in Germany, too, German law applies, according to which there is no mandatory direct claim against the producer for repair or replacement. If the tourist wishes to sue the Hungarian distributor different from the final seller, Art. 4.2 does not help to identify the applicable law since the claimant and the defendant do not have their habitual residences in the same country. Vice versa, if the Portuguese H. UNBERATH/ J. CZIUPKA, Art. 5 Rom II-VO (note 12), marginal No. 14. M. LEHMANN, Rom II. Art. 5 (note 17), marginal No. 39. 29 Cf. M. EBERS/ A. JANSSEN/ O. MEYER (note 1), 18. 35. As examples, Belgium, Finland, France, Luxembourg, Norway and Sweden are mentioned. 30 The notion of “habitual residence” of companies, other bodies and natural persons acting in the course of their business activities is defined in Art. 23 of Rome II: “1. For the purposes of this Regulation, the habitual residence of companies and other bodies, corporate or unincorporated, shall be the place of central administration. Where the event giving rise to the damage occurs, or the damage arises, in the course of operation of a branch, agency or any other establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence. 2. For the purposes of this Regulation, the habitual residence of a natural person acting in the course of his or her business activity shall be his or her principal place of business.” 27 28

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Ádám Fuglinszky visitor (i.e. having his habitual residence in Portugal) buys a product in Germany and the producer also has its habitual residence in Portugal then Portuguese law applies and provides the Portuguese mandatory direct claim.31 B.

Step Two: the Product Was Marketed in the Country where the Consumer Has his/her Habitual Residence

If the applicable law cannot be identified through Art. 4.2 of Rome II, the next step is to check the following Art. 5.1 a), according to which the law of the country “in which the person sustaining the damage had his or her habitual residence when the damage occurred, if the product was marketed in that country” applies. According to the prevailing view, what matters is not the marketing of the specific (defective) product but that of the type of product.32 The product is deemed 31 The Portuguese law follows the so-called sui generis-extracontractual approach, but the producer is released from liability (i.e. from the duty to repair or replace the defective product), if they can prove that the defect did not exist at the moment when the product was put into circulation by them. Cf. Art. 6 para 2 lit c) of the Portuguese Consumer Sales Act as cited below and P. MOTA PINTO, Direct Producers’ Liability and the Seller’s Right of Redress in Portugal, in M. EBERS/ A. JANSSEN/ O. MEYER (eds), (note 1), at p. 491503. DL n.º 67/2003, de 08 de Abril Venda De Bens De Consumo E Das Garantias A Ela Relativas, “Artigo 6.º Responsabilidade directa do produtor (para 2): 2 - O produtor pode opor-se ao exercício dos direitos pelo consumidor verificando-se qualquer dos seguintes factos: a) Resultar o defeito exclusivamente de declarações do vendedor sobre a coisa e sua utilização, ou de má utilização; b) Não ter colocado a coisa em circulação; c) Poder considerar-se, tendo em conta as circunstâncias, que o defeito não existia no momento em que colocou a coisa em circulação; d) Não ter fabricado a coisa nem para venda nem para qualquer outra forma de distribuição com fins lucrativos, ou não a ter fabricado ou distribuído no quadro da sua actividade profissional; e) Terem decorrido mais de 10 anos sobre a colocação da coisa em circulação.” The other defences are: a) non-conformity can be traced back solely to the (final) seller’s declarations about the product or the usage of the product; or to the wrong usage by the consumer; b) the producer did not put the product into circulation; d) the product was neither manufactured by him for sale or any form of distribution for economic purpose, nor manufactured or distributed by him in the course of his business; e) more than 10 years have passed since he put the product into circulation. According to the Portuguese solution on direct claim, only a consumer can require repair or replacement (i.e. there is no price reduction claim or rescission) and only from the producer, or from the importer of the goods into the territory of the EU or from the “quasi producer” (who puts their name, trademark or other distinguishing feature on the product), but not from the upstream seller/s. Cf. M. EBERS/ A. JANSSEN/ O. MEYER (note 1), 35-36. 32 B. LURGER/ M. MELCHER (note 12), marginal No. 5/54; M. LEHMANN, Rom II. Art. 5 (note 17), marginal No. 78–82. H. UNBERATH/ J. CZIUPKA, Art 5 Rom II-VO (note 12), marginal No. 62, 82–85, 88–89. A. JUNKER, Rom II-VO Art.5 (note 24), marginal No. 28 points out that it is not the same type of product if there is a significant difference between similar products whose safety differs significantly as in the case of two cars, one sold with ABS and the other without it. This view is confirmed by H. UNBERATH/ J. CZIUPKA, Art 5 Rom II-VO (note 12), marginal No. 89 and explained by a similar example: it is not the same type of product if put into circulation with ABS and airbag in one country and without these safety features in another one. However, the product is of the same sort if marketed with 50kW power in one country and with 60kW in another. We have

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Classification of Direct Remedies for Repair/Replacement against the Producer to be marketed in the respective countries even if it is distributed under different names. This is, for example, quite frequently the case with drugs. The core question is whether it has been manufactured by the same group or not.33 The product is “marketed” if it is launched on the market, i.e. it is publicly offered in a ready-for-use condition on the initiative or at least with the permission of the producer.34 For example, if the visitor having his or her habitual residence in Germany buys a (defective) product in Portugal and this type of product is also marketed in Germany then German law applies, i.e. there is no mandatory direct claim for repair or replacement against the producer. If the product is not marketed in Germany, we have to move forward to the next conflict of law rule within Art. 5. Vice versa, if the visitor having their habitual residence in Portugal buys a (defective) product in Germany, but that particular type of product is also marketed in Portugal, then Portuguese law applies, meaning that there is a mandatory direct claim, since such a claim does exist in Portuguese law. To give another example, if a tourist having their habitual residence in Hungary (where a mandatory direct claim exists)35 buys a defective product in Austria, which has been manufactured in Canada but has also been distributed in Hungary, then Hungarian law provides the relevant mandatory direct claim. to add that while safety and security are core elements in the “classical” product liability law, this does not necessarily apply to the direct claims for repair and/or replacement. Therefore, the similarities and differences in safety features are not likely to play the same dominant role regarding repair and/or replacement claims. 33 M. LEHMANN, Rom II. Art. 5 (note 17), marginal No. 84. 34 B. LURGER/ M. MELCHER (note 12), marginal No. 5/54. 35 The Hungarian legislator joined the second subtype of the sui generisextracontractual model just like the Portuguese law. It means that the direct claim, i.e. remedy for specific performance against the producer, etc. is an independent extracontractual remedy provided for in the Hungarian civil code; however, there are defences, whereby the producer (et al) can be released from the duty to repair or replace the product. See the defences in Section 6:168 Para 3 of Act No. V/2013 on the Civil Code: “(3) The manufacturer shall be relieved of warranty obligation if able to prove that: a) he manufactured or placed the product on the market in the course of operations other than in the course of its business activity or for purposes relating to his profession; b) the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of a defect to be discovered; or c) the defect in the product was caused by the application of a regulation or a regulatory provision prescribed by the authorities.” Only consumers can request repair or replacement but, unlike the Portuguese law, the Hungarian civil code explicitly allows the consumer to request specific performance not only from the producer or quasi producer, but also from (all) upstream sellers in the contractual chain. It is, however, not allowed to request a price reduction or to exercise rescission (within the frame of the mandatory direct claim). Cf. S. 6:168 Para 1 of Act No. V/2013 on the Civil Code: “(1) In the case of lack of conformity of any movable property sold by a business party to a consumer (hereinafter referred to as “product”) the consumer shall have the right to demand from the manufacturer to have the product repaired or - if repair is not possible within a reasonable period of time and without harming the consumer’s interest - to provide a replacement. A product shall be deemed defective if it does not meet the requirements related to conformity in effect at the time of placing on the market, or it does not meet the specifications provided by the manufacturer.”

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Ádám Fuglinszky C.

Step Three: Law of the Country of the Product’s Acquisition

If the product was not marketed in the country where the consumer has his or her habitual residence, the law of the country “in which the product was acquired, if the product was marketed in that country” (art. 5.1. b) applies.36 If a visitor having their habitual residence in Germany buys a (defective) product in Finland that is not marketed in Germany then Finnish law applies, which again entitles the consumer to claim repair or replacement by the producer.37 Vice versa if the buyer has his habitual residence in Finland and buys a defective product in Germany, but which is not marketed in Finland. In this case, German law applies because Germany was the place of buying the product. As a result, there is no mandatory direct claim for repair or replacement against the producer. 36 As far as distance sales contracts are concerned, not the country of dispatch but that of the receipt is deemed to be the place of acquiring the product. A. JUNKER, Rom IIVO Art.5 (note 24), marginal No. 35; LURGER/ M. MELCHER (note 12), marginal No. 5/53. H. UNBERATH/ J. CZIUPKA, Art 5 Rom II-VO (note 12), marginal No. 82 demonstrate the importance of which country is to be considered as the place of acquisition: the country where the particular defective product was bought or the availability of the same sort of product. According to the prevailing opinion that they present, if for example a type of car is manufactured in South Korea and marketed in all member States of the EU through a network of independent distributors; and a resident of Belgium buys the car in France, the applicable law will not be the French one. In principle, if the place of acquisition of the particular product matters, French law should apply according to Art. 5.1 b) Rome II; however since the same sort of car is distributed in Belgium, where the buyer has his habitual residence, the laws of Belgium prevail according to Art. 5.1 a) Rome II. Thus, it depends on the availability of the same sort of product in the respective country. 37 The Finnish law can be assigned to the first subtype of the derivative-contractual approach (cf. “double limitation” above, at I.B.). Only consumers have this kind of direct claim, but they can request all remedies (i.e. specific performance – repair or replacement –, price reduction and rescission, too) both from the producer and from all upstream seller(s). For the details cf. O. NORROS, Finnish Perspective on Producers’ Liability, in M. EBERS/ A. JANSSEN/ O. MEYER (eds), (note 1), at p. 295-310. See Section 31 Para 1 and 2 of the Finnish Consumer Protection Act: last download: 25 April 2018. “Section 31 — Liability for defects of the previous level of the supply chain (16/1994) (1) The buyer shall have the right to direct his/her claims based on a defect in the goods, in accordance with the provisions of this chapter, also at a business who at an earlier level of the supply chain has supplied the goods for resale. (2) However, the buyer shall not have the right under paragraph (1): (1) if the defect has arisen from a reason not attributable to the business in question after it delivered the goods; (2) to the extent that the claim is based on a promise which has been given by someone else than the business and which places the buyer in a better position than he/she would be in under the provisions of this chapter in the absence of the said promise; nor (3) to the extent that the claim relates to a price reduction or a refund of the purchase price and exceeds the amount that the contracting party vis-à-vis the said business could have claimed on the same grounds, disregarding any restrictive terms in their contract between the businesses.” Thus, the producer or the upstream seller(s) are released from the duty to remedy if the product was not defective when put into circulation by them.

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Step Four: the Law of the Country in which the “Damage” Occurred

Finally, in the unlikely case that the applicable law cannot be identified by any of the tools specified above at III. A-C, the law of the country “in which the damage occurred, if the product was marketed in that country” applies according to Art. 5.1.c) Rome II. This rule – as Art 5 Rome II in general – can apply per analogiam to the direct remedy for repair and/or replacement only, since damages (restitution in terms of money) are different from specific performance (restitution in kind). Therefore the question arises, how the analogous equivalent of element where “the damage occurred” can be identified regarding the latter. It has not yet been clarified whether it is the country where the defect has been detected by the consumer and/or the first “symptoms” of the defect have appeared, or the route is redirected further to the country where the product was bought, because the “damage” was already present when the consumer bought a defective product instead of a faultless one. E.

Step Five: Foreseeability and Closer Connection

The cascade described above is complemented by two fine-tuning mechanisms. The first is the so-called foreseeability exception, according to which “the law applicable shall be the law of the country in which the person claimed to be liable is habitually resident if he or she could not reasonably foresee the marketing of the product, or a product of the same type, in the country the law of which is applicable” under the cascade of Art. 5.1. Rome II. The burden of proof lies with the person “claimed to be liable” regarding the lack of reasonable foreseeability.38 Finally, the so called general escape clause in Art. 5.2 Rome II shall be highlighted, according to which “[w]here it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraph 1, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.” The general escape clause can take on greater significance in particular if there was no mandatory direct claim for repair and/or replacement against the producer according to the applicable law identified by Art. 5.1 Rome II. For example, a visitor having his or her habitual residence in Germany buys a defective product in Hungary, which is marketed also in Germany. There is no such direct claim in German law. However, if the buyer wishes to sue the final seller on a contractual basis and the distributor on the basis of the mandatory direct claim, and both the final seller and the distributor have their habitual residence in Hungary, it might be sound to reroute to the uniform application of that particular legal system to both claims, which is either established by the Rome I regulation; or through the direct application of Art. 5.2. of Rome II immediately to Hungarian law – irrespective of the Rome I regulation – provided that the case has a 38

B. LURGER/ M. MELCHER (note 12), marginal No. 5/54.

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Ádám Fuglinszky “manifestly” closer connection to Hungary (since both defendants have their habitual residence in Hungary).39 According to the prevailing view, the escape clause is, however, an exemption from the rule; therefore, it cannot be interpreted broadly and applies only if the case obviously (“manifestly” as it is stated in the text) has a closer connection to the law of a country different from the one identified by Art. 5.1 Rome II. The exemption shall not erode the compromise reflected by the rule in order to keep predictability as one of the most important principles that shape the conflict of law rules of Art. 5 Rome II.40 If the applicability of the escape clause is at stake, the circumstances of the case, in particular the facts of and relationships between the parties, shall be considered. Neither of the facts shall be highlighted arbitrarily in order to apply the escape clause legitimately.41 “Hometown justice” shall be avoided too, i.e. applying the escape clause only to put the claimant into a more advantageous position,42 thereby pushing him or her and the case under a jurisdiction where there a mandatory direct claim exists.

The analysis of the issues raised by the general escape clause according to Art. 5.2 of Rome II goes far beyond the goal of this paper. Starting with the problem that the 2nd sentence cannot apply here (“A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”). Though there is a contract in the background of the mandatory direct claims, too, this contract was not entered into by the claimant and the addressee of the claim. According to the prevailing view, the contract must be concluded by and between the claimant and the defendant. Cf. H. UNBERATH/ J. CZIUPKA, Art 5 Rom II-VO (note 12), marginal No. 105–106., Art. 4 Rom II-VO, marginal No. 82. M. LEHMANN, Rom II. Art. 4 (note 17), marginal No. 158, A. JUNKER, Rom II-VO Art.5 (note 24), marginal No. 53. The case is a different one if the buyer buys the product directly from the manufacturer, since then Rome I regulation applies accordingly. Cf. B. LURGER/ M. MELCHER (note 12), marginal No. 5/53, M. LEHMANN, Rom II. Art. 5 (note 17), marginal No. 41. Interestingly, LEHMANN, Rom II. Art. 5 (note 17), marginal No. 113 denies the application of the general escape clause if the claim is based on a guarantee, where the guarantee refers to specific performance and not to damage claims. We do not agree with the latter statement because the starting point of this whole chapter is that Art. 5 of Rome II applies per analogiam for mandatory direct claims against the producer for specific performance. 40 M. LEHMANN, Rom II. Art. 4 (note 17), marginal No. 138, 141–142; and Rom II. Art. 5, marginal No. 105. H. UNBERATH/ J. CZIUPKA, Art 4 Rom II-VO (note 12), marginal No. 82; and Art. 5 Rom II-VO, marginal No. 103. The same way A. JUNKER, Rom II-VO Art. 4 (note 24), marginal No. 46. 41 M. LEHMANN, Rom II. Art. 4 (note 17), marginal No. 143; and Rom II. Art. 5, marginal No. 107. 42 M. LEHMANN, Rom II. Art. 4 (note 17), marginal No. 150. 39

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IV. Summary and Conclusions As can be inferred from the reasoning above, the applicable law determines whether there is a mandatory direct claim for repair and/or replacement against producers/upstream sellers or not and, where such a direct remedy according to the applicable law exists, that law also determines the preconditions, limits, etc. thereof. Since the legal systems of some of the member States do not have such mandatory direct claims while those of others do, the “lottery” of the conflict of laws determines whether the final buyer – i.e. consumer – can raise such a remedy in cross-border cases. Additionally, it cannot be excluded that the applicable law will then classify the claim in a completely different way from the classification applied by the conflict of laws rules. Let us suppose that the analogous application of Art. 5 of Rome II points to Belgian law as the applicable law. After the applicable law has been identified, all issues are decided on that basis and the perception of the direct claim as having an extracontractual character – based on the autonomous application and interpretation of the Rome II regulation – can be put in brackets and/or pushed aside by the classification of the applicable (substantive) law. In our last example, Belgian law considers the direct claim as a derivative contractual claim (action directe) being transferred automatically alongside the contractual chain, and Belgian law is going to be the one that designates which particular remedies are available for the buyer as well. The classification of this remedy from the point of view of private international law is uncertain, since the Rome regulations do not cover such claims explicitly. The applicable law can be identified via Art. 5 of Rome II (conflict of laws rules on product liability) by analogy, based on the similarities and common policy considerations attached to the unified product liability law and to the unharmonised direct claim for specific performance in overview. These similarities and policy considerations are, among others, the inclusion of the upstream sellers besides the manufacturer; predictability of lawsuits in particular countries; the extracontractual nature of both claims – at least from the point of view of private international law; the partly overlapping functions of specific performance and damage claims for the losses in the defective product itself. The general escape clause of Art. 5.2. Rome II may play an important balancing role, rerouting the case to a legal system where a kind of mandatory direct claim for repair or replacement exists, provided that the case has a manifestly closer connection to that country. In order to avoid ambiguous classification issues and the “conflict of laws lottery” and, moreover, to promote and support cross-border trade in the internal market, it may be advisable to enact – or at least to consider the enactment of – such a mandatory direct claim at the EU level, at least as far as consumers are concerned.43

43 In the same manner as S. SENDMEYER (note 9), at 167. A detailed analysis including suggestions de lege ferenda is presented by Á. FUGLINSZKY (note 8), at 590 et seq.

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PROVISIONAL MEASURES IN FAMILY LAW AND THE BRUSSELS II TER REGULATION Ilaria PRETELLI* I. II.

III.

IV.

Introduction In Search of a Taxonomy A. Provisional and Protective Measures in National Legal Traditions B. Provisional and Protective Measures in Supranational Codifications on Family Matters 1. The Dichotomy Employed by the Hague Conventions: Urgent Measures of Protection and Provisional Measures 2. The Specific Regime of Provisional Measures in the Brussels IIbis and ter Regulations a) A Synthetic Notion of Provisional and Protective Measures in Civil, Including Family Law, Matters b) The Special Regime of Provisional Measures in Article 15 of the Brussels IIter Regulation The System of Allocation of Jurisdiction for Provisional and Protective Measures A. The Court Enjoying Jurisdiction as to the Substance 1. Jurisdiction as to the Substance of the Case Encompasses Provisional and Protective Measures 2. The Problem of Identifying the Ground of Jurisdiction on the Basis of which a Court Grants a Measure ante causam B. The National Forum Allowed to Issue Provisional Measures 1. Implicit and Explicit Conditions set by the CJEU for the Subsumption of a Measure under Article 20 Brussels IIbis a) Urgency b) Presence c) The Provisional Character d) Other Conditions? 2. The Acquis in the Brussels IIter Regulation and the Introduction of an Exception to Strict Territoriality The Applicable Law

Ph.D. (Paris II-Assas, Padua) Habil. (MIUR, Italy), Swiss Institute of Comparative Law. I wish to thank the editors, Andrea Bonomi and Gian Paolo Romano, for their valuable comments, and Florence Guillaume also for the fruitful collaboration on the parallel article “Coherence and Inconsistencies in the Regime of Provisional and Protective Measures in the European Private International Law”, to be published by Schulthess in 2019 as part of the Conference Proceedings “Recíproco encaje y coherencia de los ámbitos de los reglamentos comunitarios de Derecho internacional privado” funded by the Spanish Ministerio de Economía, Industria y Competitividad (DER2016-75318-P). *

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 113-148 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Ilaria Pretelli A.

VI.

Are Provisional and/or Protective Measures Necessarily Subject to the Lex Fori? B. The Granting of Provisional Measures by the “Provisional Court” between the Lex Fori, EU Requirements and the Lex Causae Recognition and Enforcement of Provisional Justice A. The General Principles Governing intra-EU Recognition and Enforcement of Provisional and Protective Measures B. The Exceptional Regime Safeguarding the Best Interests of Children and its Possible Extension to all Measures for the Protection of Self-Determination of Persons Conclusion

I.

Introduction

V.

Provisional and protective measures influence the outcome of the proceedings in the context of which they are issued in many ways and to varying extents. In conflicts of laws, they are sometimes used to impact jurisdiction in order to access a specific judge, not necessarily empowered with jurisdiction on the merits. Such interferences are all the more sensitive in cases concerning children because of the specific characteristics of “urgency” in family matters, due, in particular, to the brief duration of childhood development and to the crucial importance of that limited number of years. In addition, there are ontological differences distancing civil and commercial litigation from litigation in family matters. In the first place, if children are involved in a civil litigation process, any decision – whether on the substance or merely on provisional and protective measures – will need to adhere to the principle of the best interests of the child, a specific principle that takes priority over the usual principles of commutative and distributive justice. In the absence of children, the decision on the substance is motivated by the need to distribute justice equally, i.e. to ensure that each party has an equal share of rights and duties, to commute justice, i.e. to rectify torts that have already occurred,1 etc. These basic principles of justice, which are part of the legal tradition of the Member States, are overridden in family proceedings involving children by the need to ensure that, first and above all, the decision allows the children to have the best possible opportunities to develop their personality and talents. The judge should look to the rights of adults, only after making sure that their decision is the one most likely to ensure the best interests of the child. In the second place, family law proceedings are not merely about ascertaining ex post which of the parties is (or was) right and which is (or was) wrong according to the rules in force in a given area of the planet. Neither are they aimed simply at deciding, once and for all, who is entitled to what, under the applicable law. They consist, rather, in administering justice in a more literal sense.

1

The text echoes the renowned passage of Aristotle’s Nicomachean Ethics, Book V,

chap. II.

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Provisional Measures in Family Law Administering here means managing or, better yet, organising the best possible conditions governing how a family – however disrupted – will live its future years. In family matters a change of circumstance that overturns the agreed organisation of family life, impacting the family’s daily routine, necessitates a reorganisation that may require the supervision of a judge. Even though provisional and protective measures on family matters are rarely placed in a category apart, a closer look reveals how their specific characteristics may justify the development of a concept that places them within a specific subcategory covering all cases involving children. In the most sophisticated codification of supranational private international law, which is that embodied in the uniform rules laid down by the European Union,2 rules on “provisional, including protective measures”3 are placed within a 2 Reference is made to the Brussels I system – which includes the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (as amended by the Accession Conventions under the successive enlargements of the European Union), OJ L 299, 31.12.1972, p. 32 (also referred to, in the text as “the Brussels I Convention”); Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12, 16.1.2001, p. 1 (no longer in force); Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351, 20.12.2012, p. 1) – as well as to the Lugano system, parallel to the former – which includes the Lugano Convention of 16 September 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ L 319, 25.11.1988, p. 9 and the Lugano Convention of 30 October 2007 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 339, 21.12.2007, p. 3; and also to the Brussels II system – which includes Regulation (EC) No 1347/2000 of 29 May 2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses, OJ L 160, 30.6.2000, p. 19 (Brussels II Regulation, no longer in force); Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, OJ L 338, 23.12.2003, p. 1 (Brussels IIbis Regulation); Regulation (EU) No 1111/2019 of 25 June 2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction, OJ L 178, 2.7.2019, p. 1 (Brussels IIter Regulation, not yet in force); and to the more recent Regulations as Regulation (EU) No 650/2012 of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, OJ L 201, 27.7.2012, p. 107; Regulation (EU) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, OJ L 7, 10.1.2009, p. 1; Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes, OJ L 183, 8.7.2016, p. 1; Regulation (EU) 2016/1104 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of the property consequences of registered partnerships, OJ L 183, 8.7.2016, p. 30.

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Ilaria Pretelli given, repetitive structure, without apparent changes reflecting the specificity of the subject matter to which they belong – or the scope of the private international law regulation providing for them. It is conceivable that European Private International Law could use a similar synthetic notion to encompass provisional and protective measures in all civil and commercial matters, including family, succession etc. The use of a synthetic notion is not only real, in that it corresponds to the state of the art, but also theoretically defensible. It complies with the Occam’s razor principle, which deserves scrupulous consideration in any tentative theorisation of the current plethora of EU rules. The EU legislator has consciously consolidated the complex, articulated legal framework for provisional and protective measures already adumbrated in the Brussels I Convention.4 It consists in an autonomous notion, explicated by the Court of Justice of the European Union, and of an identical regime embodied in a single provision, systematically copy-pasted Regulation after Regulation.5 However, the copy-paste rules on provisional and protective measures are not reproduced in the Brussels IIter Regulation (nor were they in the Brussels IIbis Regulation), confirming the existence of the specific regime of provisional and protective measures in certain family proceedings. In addition, the rule on provisional measures in Article 15 of the Brussels IIter Regulation goes further than its predecessor – Article 20 of the Brussels IIbis Regulation – since it also innovates as regards the well-known two-track system, which is common to the various Regulations. In short, the use of a synthetic notion covering all provisional measures has not hindered the enactment of specific provisions, testifying to the particularity of provisional measures that impact on the lives of children. This notion, in essence, reflects the Roman legal tradition whereby provisional and protective measures are intended to prevent a danger from becoming a reality (periculum in mora), where there is the assumption of a right (fumus boni iuris).6 Both conditions are echoed by those considered necessary and sufficient for the granting of English injunctions: the plaintiff needs to have a good arguable case and show the existence of a risk of irreparable harm.7

In French, the term is “mesures provisoires et conservatoires”. In Italian, these terms correspond to those of “provvedimenti provvisori e cautelari”. For the linguistic variations and their significance, si vis I. PRETELLI, Provisional and Protective Measures in the European Civil Procedure of the Brussels I System, in V. LAZIC/ S. STUIJ (eds), Brussels Ibis Regulation, Springer 2017, p. 97-117, at p. 101-102, footnotes 8-9. 4 See supra (note 1). 5 See F. GUILLAUME/ I. PRETELLI, Coherence and Inconsistencies in the Regime of Provisional and Protective Measures in the European Private International Law, forthcoming (see note * at p. 113), para. 3 and para. 9. 6 G. CHIOVENDA, Istituzioni di diritto processuale civile, vol. 1, Napoli, 1960, n° 83, p. 237; Principii di diritto processuale civile, Napoli 1980, p. 227. 7 See A. GIARDINA, Provisional Measures in Europe, Some Comparative Observations, in Etudes de droit international en l’honneur de Pierre Lalive, Bâle, 1993, p. 500 with reference to Mareva injunctions. 3

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II.

In Search of a Taxonomy

Provisional and protective measures are always the expression of pragmatic needs and the result of experiences with the stratagems that proved to be most effective. The practical aspect of provisional measures explains the variety of strategies developed at national level. This variety has been organised in legal theory, through the creation of an interesting series of dichotomies. Comparative law shows a great number of classifications of provisional and protective measures, many of them common to different legal traditions. In the body of law of the European Union, reference has been made to the renowned distinction between measures of a protective nature and measures of a provisional character (A). As regards measures involving children, an innovative dichotomy was introduced by the Hague Conference. Its influences on the regime of the Brussels II system have increased in the case of the Brussels IIter Regulation (B). A.

Provisional and Protective Measures in National Legal Traditions

The various language versions of the EU articles on “provisional, including protective, measures” confront the reader with a series of recurrent hendiadyses.8 In some languages these versions point to a distinction, which draws on the aim of providing interim relief, between measures that are provisional and measures that are protective. However, within the current EU international civil procedure there is no need to insist on this theoretical distinction. Despite being acknowledged by the EU, the linguistic separation between measures that are protective in nature and measures that grant, albeit provisionally, the outcome sought by the applicant, has not been deemed worthy of the tailoring of separate regimes. The variety of existing measures in national law is in fact irreducible to this dichotomy and it would be a fruitless exercise to classify existing measures in order to subsume them into one or the other category. Some provisional measures may also have a protective character and, conversely, protective measures an interim one. The distinction between provisional measures and protective measures may be more significant within national law systems. Broadly speaking, a measure is provisional when it anticipates the future settlement of a dispute by giving a temporary solution that will subsequently be confirmed, or rejected, by the judgment on the merits. A measure is of protective nature when it aims to freeze the situation 8 For German, see Article 35 of the Brussels Ibis Regulation (einstweilige Maßnahmen einschließlich Sicherungsmaßnahmen) and Article 31 of the Brussels I Regulation (einstweilige Maßnahmen einschließlich solcher, die auf eine Sicherung gerichtet sind); for French, see Recital 33 of the Recast (mesures provisoires ou conservatoires); for Italian, see the title of section 10 and Article 31 of the Brussels I Regulation (Provvedimenti provvisori e cautelari), and the corresponding section and Article 35 of the Recast (Provvedimenti provvisori o cautelari).

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Ilaria Pretelli of an asset or a piece of evidence in order to forestall the outcome of litigation; in short, the aim is to preserve a situation of fact pending a decision on the merits.9 For instance, the characteristic purpose of a UK freezing order is that of preventing the debtor from contriving insolvency in order to avoid payments.10 In addition, protective measures may logically survive a final decision, whereas measures anticipating the merits are often cancelled by the decision on the merits. The latter will naturally extinguish provisional measures, even in those cases where it confirms the settlement found thereby.11 In essence, the aim of a provisional measure is to guarantee, as far as possible, the continuity of a legal relationship or situation after its disruption until the future final judicial settlement, so that there is no significant gap or legal vacuum between the circumstance at the origin of the dispute and its end. As an example, Italian law prescribes that the President of the court before which a couple has been summoned for the first hearing of separation proceedings shall adopt “provvedimenti temporanei ed urgenti […] nell'interesse della prole e dei coniugi”12 which may consist in a provisional settlement of all the issues raised by the disruption of the family: allocation of the family home; the amount of maintenance due; arrangements for the sharing of parental responsibility and custody, etc. These measures aim to provide the creditor with continuity of a source of income.

9 In Italian procedural law, the main dichotomy is between “misure anticipatorie del merito” and “misure conservative”. See P. PICONE, Misure provvisorie in materia familiare e diritto internazionale privato, Riv. dir. int. priv. proc., 1995, p. 7-75, at p. 10; see also M. NIOCHE, La décision provisoire en droit international privé européen, Qualification et régime en matière civile et commerciale, Bruxelles, 2012, p. 160 et seq.; N. NISI, I Provvedimenti provvisori e cautelari nel nuovo regolamento Bruxelles I-Bis, Cuadernos de Derecho Transnacional, 2015, Vol. 7, nº 1, p. 128-141. 10 JSC BTA Bank (Appellant) v Ablyazov (Respondent) [2015] UKSC 64: “(i) the enforcement principle, namely that “the purpose of a freezing order is to stop the injuncted defendant dissipating or disposing of property which could be the subject of enforcement if the claimant goes on to win the case it has brought, and not to give the claimant security for his claim” (para. 34); (ii) the flexibility principle, namely that “the jurisdiction to make a freezing order should be exercised in a flexible and adaptable manner so as to be able to deal with new situations and new ways used by sophisticated and wily operators to make themselves immune to the courts’ orders or deliberately to thwart the effective enforcement of those orders” (para. 36); and (iii) the strict construction principle, namely that, because the consequences of breach are serious, injunctions must be “clear and unequivocal” and “strictly construed” in favour of the addressee (para. 37). See also Metropolitan Housing Trust Limited v Devenkumar Keshavlal Taylor, Jugjit Ladhur (Aka Jagjit Ladhur), Informatrix Enterprise Solutions Limited [2015] Ewhc 2897 (Ch), para. 15. 11 See Article 669 novies, para 3. of the Italian Code on Civil Procedure stating that a foreign decision causes a provisional measure to elapse: “Il provvedimento cautelare perde altresì efficacia […] se con sentenza, anche non passata in giudicato, è dichiarato inesistente il diritto a cautela del quale era stato concesso.” 12 Article 708 of the Italian Code of Civil Procedure on “provisional and urgent orders in the interests of sons and daughters, husband and wife”. See M.G. CIVINNINI, Provvedimenti cautelari e rapporti patrimoniali tra coniugi in crisi, Famiglia e diritto, 1995, p. 371-381.

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Provisional Measures in Family Law Another dichotomy, common to many legal systems, is that between measures available before litigation (ante causam) and measures issued during the proceedings (interim reliefs). Among the measures granted ante causam, there are ex parte measures – issued on the sole basis of the allegations of the applicant – and measures that may only be granted in adversarial proceedings, i.e. audita et altera parte – once the defendant has been given the opportunity to present arguments against the taking of the requested measure. Ex parte measures are often referred to as unilateral measures in the French and other languages. Their efficacy in preventing fraudulent concealing of assets is linked to their “surprise effect”.13 For instance, a parent causing harm to his child may be ordered to move out of the family home by means of a provisional measure to be granted immediately, regardless of the commencement of a proceeding on parental responsibility or of a divorce proceeding. The practical interest of protecting the child prevails over the necessity of immediately initiating an adversarial proceeding. Measures in rem are contrasted with measures in personam. The first group consists of measures that are enforced on an asset or other valuable good with the result of creating an obstacle operating erga omnes – in respect of everyone – to its commercialisation; the second, of measures that are enforced by imposing on one of the parties, an obligation to do something or to refrain from doing something, for instance, thus limiting the freedom of movement and self-determination of one of the parties involved in the proceeding.14 Measures in personam are frequent in family law and, since they have the effect of restricting the freedom of movement or, more generally, self-determination of citizens, need specific procedural rules and should be given special attention, especially if minors are involved. The importance and depth of the judicial investigation required to uphold the claim of the applicant also provides the pivot for another dichotomy. In German doctrine a traditional distinction was made according to the scope of the analysis of the merits required from the judge. When it appears that the defendant does not seriously challenge the plaintiff’s claim, a measure may be issued per tabulas

13 “Effet de surprise” in French and “Überraschungseffekt” in German. See P. SCHLOSSER, “Die Überraschungseffekt der Zwangsvollstreckung – national und international”, Recht der Internationalen Wirtschaft, 2002, p. 809 et seq. 14 The same result may be obtained through in personam measures and in rem measures. A. GIARDINA (note 7) p. 500, notes that Mareva injunctions, which prevent the defendant from removing their assets from the jurisdiction, are in personam whereas the corresponding measures in German (Arrest), French (saisie conservatoire) and Italian (sequestro conservativo) law are in rem. Critical on the use of this distinction for provisional measures is M. NIOCHE (note 9), arguing that all provisional and protective measures are in personam (p. 224), and proposing a different terminology to distinguish measures that may be enforced authoritatively – such as the seizing of an asset, the blocking of a bank account by an administrative authority etc. and measures that require the collaboration of the parties involved in order to be enforced, exemplified by the interlocutory injunctions assisted by the sanction of contempt of court of the common law tradition and the astreintes of French and Belgian law. The author proposes the dichotomy per officium – per partes (p. 229-246).

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Ilaria Pretelli “without substantial analysis of the merits”,15 as opposed to measures that require a deeper investigation to be issued (summaria cognitio).16 The breadth of the judge’s discretion in deciding the content of the measure offers another criterion, allowing measures with a typical content and effect to be contrasted with more “abstract” orders. In Italy, Article 700 of the Italian code of civil procedure allows the judge to adopt any “urgent order that appears according to the circumstances, the most apt to temporarily guarantee the effect of the decision on the merits”.17 An order such as this is also available in family matters and ante causam.18 It is subject to the aforementioned conditions that the plaintiff has a good arguable case and that there is danger in waiting. In particular, there must be a risk of imminent and irreparable harm. Another example of an open, atypical measure is the French référé. Contrastingly, measures such as the French saisieconservatoire or the Italian sequestro conservativo have strictly typical effects. These classifications, built on national experience, are all equally accurate in describing the measures available in national systems of civil procedure. Of these, the distinction between protective measures and measures that are provisional in the sense that they temporarily anticipate the decision on the merits requested by the applicant is particularly relevant in family matters and hence capable of explaining the rupturing of the uniformity of the EU reference rule on provisional measures.19 Family law proceedings are often linked to the need to frame, from a legal point of view, a change in circumstances requiring judicial attention; the need to preserve a situation of fact is less recurrent than in civil and commercial proceedings. Strictly protective measures are hence comparatively less frequent than measures anticipating the effects sought by the applicant from the future (or on going) proceeding on the merits.

15 D. LEIPOLD, Grundlagen des einsweilegen Rechtsschutzes, München 1971; O. MERKT, Les mesures provisoires, Neuchâtel, 1993, p. 53 draws a parallel between certain German and English Provisional Measures in that both lead to “summary judgments” when the defendant does not seriously challenge the plaintiff’s claim. The author acknowledges, on p. 54, that it is sometimes difficult to distinguish summary judgments from procedural measures. 16 H. GIESSLER/ J. SOYKA, Vorläufiger Rechtsschutz in Ehe-, Familien- und Kindschaftssachen, Beck, 2005; R. CAPONI, La tutela cautelare nel processo civile tedesco, Il Foro Italiano, Vol. 121 (1998), c. 25 s. See, extensively, P. PICONE (note 9), loc. cit. 17 The translation of Article 700 of the Italian CCP is our own. 18 E. VULLO, Sull’ammissibilità dei provvedimenti d’urgenza ex Article 700 c.p.c. nel processo di separazione giudiziale dei coniugi, Famiglia e Diritto, 2005, p. 641-652. 19 See F. GUILLAUME/ I. PRETELLI (note 5), para. 6.

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Provisional Measures in Family Law B.

Provisional and Protective Measures in Supranational Codifications on Family Matters

1.

The Dichotomy Employed by the Hague Conventions: Urgent Measures of Protection and Provisional Measures

The Hague Convention of 5 October 1961 concerning the powers of authorities and the law applicable in respect of the protection of infants contains rules on provisional measures. In particular, Article 8 distinguishes “measures of protection” to be taken to protect the child “threatened by a serious danger to his person or property”20 from Article 9 measures, to be taken “in case of urgency”.21 The dichotomy was transposed into the Hague Convention of 19 October 1996 on jurisdiction, applicable law, recognition, enforcement and co-operation in respect of parental responsibility and measures for the protection of children, albeit in the modified version of, respectively, Article 1122 and 12.23 In both Conventions the “urgent measures” of the 1996 Hague Convention (Article 11) and the 1961 Hague Convention (Article 9) are given a different regime as compared to that of “measures of a provisional character for protection” of articles 12 and 8 of, respectively, the 1996 Hague Convention and the 1961 Hague Convention.

20 Article 8 of the 1961 Hague Convention reads: “[…] the authorities of the State of the infant's habitual residence [as opposed to those of the infant’s nationality] may take measures of protection in so far as the infant is threatened by serious danger to his person or property. The authorities of the other Contracting States are not bound to recognise these measures” (emphasis added). 21 Article 9 of the 1961 Hague Convention reads: “In all cases of urgency, the authorities of any Contracting State in whose territory the infant or his property is, may take any necessary measures of protection. When the authorities which are competent according to the present Convention shall have taken the steps demanded by the situation, measures taken theretofore under this Article shall cease, subject to the continued effectiveness of action completed thereunder” (emphasis added). 22 Article 11 of the 1996 Hague Convention reads: “(1) In all cases of urgency, the authorities of any Contracting State in whose territory the child or property belonging to the child is present have jurisdiction to take any necessary measures of protection. (2) The measures taken under the preceding paragraph with regard to a child habitually resident in a Contracting State shall lapse as soon as the authorities which have jurisdiction under Articles 5 to 10 have taken the measures required by the situation. […].” (emphasis added). 23 Article 12 of the 1996 Hague Convention reads: “(1) Subject to Article 7, the authorities of a Contracting State in whose territory the child or property belonging to the child is present have jurisdiction to take measures of a provisional character for the protection of the person or property of the child which have a territorial effect limited to the State in question, in so far as such measures are not incompatible with measures already taken by authorities which have jurisdiction under Articles 5 to 10. (2) The measures taken under the preceding paragraph with regard to a child habitually resident in a Contracting State shall lapse as soon as the authorities which have jurisdiction under Articles 5 to 10 have taken a decision in respect of the measures of protection which may be required by the situation. […]” (emphasis added).

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Ilaria Pretelli In the 1996 Convention, “urgent measures” are the measures of protection taken in respect of a child that is present, which may be taken in the expectation that the State having jurisdiction in respect of the situation of the child is capable of taking the measures required by the situation. The condition of urgency is met when there is a risk that the child may suffer irreparable harm.24 In that case, the presence of the child suffices to create a head of jurisdiction in order to allow the State to fulfill its duty to protect the child who is present in its jurisdiction. The pragmatic character of proceedings aimed at issuing provisional measures makes the link with the territory where enforcement is to be sought particularly relevant. On the other hand, it creates a potential conflict with the Court invested with the merits of the dispute. The Hague rule thus aims to coordinate the jurisdictional power of the State in which the child is present and that of the State of the child’s habitual residence (or the State that has jurisdiction according to the Convention, for instance the judge of divorce ex Article 10). According to a realistic presumption that enshrines the rationale of the rule, the court which is – hic et nunc – closest to the child is the most appropriate and most effective in taking all necessary measures, until the competent court is in a position to take full responsibility for the child’s protection. These provisional measures are not subject to any territorial restriction, albeit to a temporal one: they lapse as soon as the competent court takes other measures. These measures are therefore typically taken ante causam. Contracting States are under an obligation to recognise and enforce “urgent measures”. The Lagarde report provides the example of “a decision by which the court of the State where the child is present withdraws from the father the right to determine the child’s place of residence, because of the urgency created by risks of sexual abuse to which the child would be exposed”.25 The decision is taken while waiting for the competent authority, taking all the time necessary to have a thorough knowledge of the family’s situation, to decide on the question of parental responsibility. A territorial limitation does, however, characterise the “measures of protection” pursuant to Article 12 of the 1996 Convention, that may be taken by the Court in the jurisdiction of which the child is present. These measures may not be exported. In particular, they may not be subject to enforcement in jurisdictions other than that which has issued them. The dividing line between the two kinds of measures is not always easy to draw.26 Despite the absence of a “settled practice” on what constitutes “a case of urgency”, the following circumstances are cited as examples of “a case of urgency”: i) an order to impose medical treatment necessary to save the child’s life; ii) an order to immediately suspend contact with the person having care of the child See the Rapport explicatif de Paul Lagarde, on line at https://assets.hcch.net/ upload/expl34.pdf, p. 566. 25 Ibid., p. 569. 26 P. PICONE, La nuova convenzione dell'Aja sulla protezione dei minori, Rivista di diritto internazionale, 1995, p. 705-748, p. 720, and the examples quoted, with reference to Italian law, by A. BONOMI, La convenzione dell'Aja del 1961 sulla protezione dei minori: un riesame dopo la ratifica italiana e l’avvio dei lavori di revisione, Riv. dir. int. priv. proc., 1995, p. 607-656, p. 646. 24

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Provisional Measures in Family Law where there are allegations of physical, including sexual, abuse; iii) an order rapidly to sell perishable property of the child; iv) measures accompanying the safe return of an abducted child.27 In short, Article 11 addresses situations where an extraterritorial application of provisional measures may be necessary to prevent irreparable harm, whereas Article 12 addressees situations in which a State has the opportunity to grant expeditiously a measure benefiting a child, even if there is no actual risk of irreparable harm. Even in the presence of proceedings already pending before a Court having full jurisdiction in respect of the situation of the child, the presence of the child within the jurisdiction may suffice to justify the request for a provisional measure in loco. As for measures taken under Article 11, non-urgent provisional measures are no longer justified when the competent authority takes appropriate measures or considers that there is no need for a measure in respect of the child. 2.

The Specific Regime of Provisional Measures in the Brussels IIbis and ter Regulations

An EU notion of provisional and protective measures needs to embrace the great variety of types of remedy offered by national civil procedure systems. With a view to understanding the need for special rules on family matters, this section examines these and other criteria in the quest for a taxonomy of provisional and protective measures. The peculiar circumstances of family proceedings have justified two departures from the traditional rule based on the “two-track system” principle: a less strict application of the territoriality principle for measures taken by the court that is not judging on the merits; and a less automatic application of the lex fori by the judge granting the provisional measure. a)

A Synthetic Notion of Provisional and Protective Measures in Civil, Including Family Law, Matters

Ratione materiae family matters may include a very broad set of provisional and protective measures, covered by at least five European PIL specific provisions in as many regulations. A bird’s eye view encompasses Article 14 of the Maintenance Obligations Regulation,28 Article 19 of three regulations: the Matrimonial Property Regimes Regulation, its twin Property of Registered Partnerships Regulation, and the Succession Regulation; and, last but most importantly, Article 20 of the Brussels IIbis Regulation, now recast in article 15 of the Brussels IIter Regulation. PERMANENT BUREAU, Practical Handbook on the operation of the Hague Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children, The Hague, 2014, available on line at https://assets.hcch.net/docs/eca03d40-29c64cc4-ae52-edad337b6b86.pdf (2014), No 6.4, p. 70 (accessed on 2.7.2019). 28 All EU regulations mentioned in the text are quoted in extenso supra (note 2). 27

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Ilaria Pretelli Although all of these may be included in a broad, comprehensive notion of “provisional and protective measures in family matters”, the present part of this paper draws solely on the Brussels II system.29 First, as opposed to the former types of measure, whose purpose is to secure or temporarily adjudicate property or wealth in the framework of family-related events, the latter type of measure may have consequences for the social life of persons and their freedom of movement, including that of children involved in legal disputes. The second reason, which is a consequence of the first, is that Article 15 of the Brussels IIter Regulation, as well as Article 20 of the Brussels IIbis Regulation differ significantly, in their wording, from the other rules, all of which are identical, with texts that do not substantially diverge from the reference rule first enacted in the Brussels Convention.30 Article 14 of the Maintenance Regulation and Article 19 of the Matrimonial Property Regulation, of the Registered Partnerships Regulation, and of the Succession Regulation, all read as follows: “Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.” We may therefore conclude that this version appears to be consolidated since it is present in the aforementioned and other EU Regulations on civil procedure. Neither are the twin rules of the Lugano Conventions substantially divergent. The texts of Article 15 of the Brussels IIter Regulation and Article 20 of the Brussels IIbis Regulation are very different. The reasons for the difference lie in part in the origins of the rule. The first paragraph of Article 20 of the Brussels IIbis Regulation copies the text of Article 12 of the Brussels II Convention (which never entered into force).31 Its Article 12 echoes the “urgent measures” of the 1961 Hague Convention (now reproduced in the 1996 Hague Convention). However, the Brussels II Convention does not envisage any extraterritorial effect for these “urgent measures”. In this respect, the Hague regime guarantees continuity in the protection of the child and hence, a more efficient and perhaps less bureaucratic coordination Ibid. F. GUILLAUME/ I. PRETELLI (note 5), para. 6. 31 Article 12 of the Brussels II Convention (Council Act of 28 May 1998 drawing up, on basis of Article K.3 of the Treaty on European Union, the Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, OJ C 221, 16.7.1998, p. 1) reads: “In urgent cases, the provisions of this Convention shall not prevent the courts of a Member State from taking such provisional, including protective, measures in respect of persons or assets in that State as may be available under the law of that Member State, even if, under this Convention, the court of another Member State has jurisdiction as to the substance of the matter”. The convention was drafted during the last decade of the last century with a view to concluding an intra-European treaty that would complement the Brussels Convention. 29 30

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Provisional Measures in Family Law between the court taking action in the best interests of the child and the court that has jurisdiction as to the substance. However, the Brussels II Convention has abandoned the dichotomy between urgent and provisional measures characteristic of the Hague regimes. The result is that there is no need for the seised Court to consider the degree of urgency of the requested measure: Article 20 of Brussels IIbis provides for the same regime for urgent and less urgent provisional measures. This is also true of Article 15 of the Brussels IIter Regulation. However, the territorial constraint for the judge confronted with a child who is present within their jurisdiction was found to be excessively rigid, as revealed by the famous conflict of decisions between the European Court of Human Rights and the Court of justice of the European Union.32 As pointed out in the Explanatory Report of the Brussels II Convention, the rule laid down by Article 12 of the Brussels II Convention “goes further than the provisions of Article 24” of the Brussels I Convention,33 since it concerns not only provisional and protective measures falling within the scope of the projected convention, but also measures only partially related to it. By way of example, the report mentions a measure taken on the basis of a marriage contract. Such a measure would have been covered by Article 12 of the Brussels II Convention – since it is related to a divorce proceeding – but would have been able to survive a decision on divorce, since it would fall outside the scope of the projected convention.34 The main – or rather the sole – reason to set a specific regime for provisional and protective measures in family matters is related to the object of the measure, which is not merely material (e.g. a sum of money, assets, etc.), but consists in a substantial interference in the self-determination of one or more persons. Against this background, Article 20 of the Brussels IIbis Regulation and Article 15 of the Brussels IIter Regulation validate and clarify the regime already envisaged for provisional measures by the preceding Brussels II Convention.

32 See, e multis, N. LOWE, A supra-national approach to interpreting the 1980 Hague Child Abduction Convention – a tale of two European courts: Part 1: setting the scene, International Family Law, 2012, pp. 48-52; Part 2: the substantive impact of the two European Courts' rulings upon the application of the 1980 Convention, International Family Law, 2012, pp. 170-179; B. ANCEL / H. MUIR WATT, L’intérêt supérieur de l’enfant dans le concert des juridictions: le Règlement Bruxelles II bis, Rev. crit. dr. int. pr. 2005, p. 571. 33 A. BORRÁS, Explanatory Report on the Convention, drawn up on the basis of Article K.3 of the Treaty on European Union, on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters (approved by the Council on 28 May 1998), 98/C 221/04, OJ C 221, 16.7.1998, No 47, p. 27. 34 Ibid.

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Ilaria Pretelli b)

The Special Regime of Provisional Measures in Article 15 of the Brussels IIter Regulation

A further specialisation of the regime of interim reliefs, with the aim of ensuring the best possible protection for children, is sought by Article 15 of the Brussels IIter Regulation:35 “Provisional, including protective, measures in urgent cases 1. In urgent cases, even if the court of another Member State has jurisdiction as to the substance of the matter, the courts of a Member State shall have jurisdiction to take provisional, including protective, measures which may be available under the law of that Member State in respect of: (a) a child who is present in that Member State; or (b) property belonging to a child which is located in that Member State. 2. [omissis: rule on the duty to inform the central authority and courts exercising jurisdiction as to the substance that a measure has been granted]. 3. The measures taken pursuant to paragraph 1 shall cease to apply as soon as the court of the Member State having jurisdiction under this Regulation as to the substance of the matter has taken the measures it considers appropriate. [omissis: rule on the duty of courts exercising jurisdiction as to the substance to inform the court having taken provisional measures that a measure repealing it has been granted]”. Three core elements may be noted in the recast. The first is the insistence on urgency: it is striking for being both repetitive and redundant. In the tentatively rigid and anti-forum shopping EU Area, the condition of urgency has been traditionally interpreted as addressing the impossibility of bringing a request for an interim measure in a timely fashion before the judge empowered with jurisdiction on the merits.36 Secondly, the provision is focused on the protection of the child, both as a person and as an owner of property. Thirdly, the provision innovates in that it creates a welcome coordination rule between the courts involved in the treatment of the case. Compare the draft Article 14 of the Proposal for a Council Regulation on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) – General approach of 30.11.2018, 14784/18. 36 See Jasna Detiček v Maurizio Sgueglia, C-403/09 PPU, ECR 2009 I-12193, ECLI:EU:C:2009:810, para 42: “the concept of urgency in [Article 20] relates both to the situation of the child and to the impossibility in practice of bringing the application concerning parental responsibility before the court with jurisdiction as to the substance”. 35

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Provisional Measures in Family Law These three elements are reinforced by an additional rule on provisional measures specifically designed to facilitate return orders issued in cases of wrongful removal or retention of a child.37 In addition to the general rule laid down in Article 15 (as reproduced above), these are to be dealt with by a regime described in Article 27 para. 5: “Where the court orders the return of the child, the court may, where appropriate, take provisional, including protective, measures in accordance with Article 15 of this Regulation in order to protect the child from the grave risk referred to in point (b) of Article 13(1) of the 1980 Hague Convention, provided that the examining and taking of such measures would not unduly delay the return proceedings”. In all cases of wrongful removal or retention of children, the issue of coordination between the courts of the countries involved – one of which may be granting provisional and protective measures and the other vindicating jurisdiction as to the substance – is particularly sensitive. The need to protect the child functions as an important deterrent to the adoption of decisions on return. The main aim of taking provisional and protective measures is “to eliminate any risks to the best interests of the child which could prevent the return pursuant to point (b) of Article 13(1) of the 1980 Hague Convention”. Examples include a court order prohibiting the left-behind parent from coming close to the child or prescribing a particular type of contact, and measures allowing the child to stay with the abducting parent until a decision on the substance of custody is available. Central authorities, European or Hague Convention network judges38 and professionals may be involved in the decision on which type of arrangement is appropriate for the particular child at risk. 37 In some cases, the “emotive force” of the term “abduction” may lead to a distorted description of reality. For this reason, I have argued for the need to differentiate between situations of “abduction” in the true sense and situations of “wrongful transfers of a child’s residence”, with a view to preventing the stigmatisation of behaviours, which – despite being wrongful – have been undertaken in the best interests of the child (I. PRETELLI, Critical Assessment of the Legal Framework Applicable to Parental Child Abduction, in L. HECKENDORN/ I. PRETELLI (eds), Cross-Border Parental Child Abduction in the European Union, Study for the LIBE Committee of the European Parliament, PE 510.012, pp. 54-95 at 55) since “As revealed by the Commission’s consultants in the Impact Assessment study, some of the ‘abductions’ occurring within the European Area are an unintended illegal behavior […] carried out in the firm belief that the transfer is an exercise of parental responsibility” (I. PRETELLI, Child Abduction and return procedures, in Recasting the Brussels IIa Regulation, Study requested by the European Parliament's Committee on Legal Affairs, PE 571.383, 2016, p. 4-17, at 8). More recently, si vis, Original Aporiae in the 1980 Child Abduction Convention and in the Brussels II System Consequences in Their Present Implementation, Interdisziplinäre Zeitschrift für Familienrecht, 2019, p. 275 et seq. 38 In the framework of the European Judicial Network (see the Council Decision 2001/470/EC of 28 May 2001 establishing a European Judicial Network in civil and commercial matters, OJ L 174, 27.6.2001, p. 25), special judges, named “liaison judges” have been created with the specific aim of coordinating the action of judges in the framework of child abduction proceedings. Liaison judges have been appointed in the

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Ilaria Pretelli Recital 30 of the recast significantly prescribes that measures taken to protect the child from a grave danger, with reference to point (b) of Article 13(1) of the 1980 Hague Convention, in addition to remaining in force until a court of the Member State of the habitual residence of the child has taken the measures it considers appropriate, also have extraterritorial effect and should be recognised and enforced “in any other Member State under this Regulation”.39 The statement, at odds with the well-established rule on the exclusive territorial effects of provisional, including protective, measures decided by a court deprived of jurisdiction power as to the substance, is reminiscent of the coordination mechanism of the two Hague Conventions of 1961 and 1996 on the protection of children.40

III. The System of Allocation of Jurisdiction for Provisional and Protective Measures Within the system of civil procedure under construction within the EU, the reference regime of the Brussels I system for civil and commercial matters has never been transposed into the provisional and protective measures covered by the Brussels II system: be it the Brussels II Convention (which never entered into force), the Brussels II Regulation or its 2003 and 2019 recasts (i.e. the Brussels IIbis Regulation and Brussels IIter Regulation).41 Mindful of the particular kind of periculum in mora – the existence of a danger pending a decision by the competent court – that characterises the latter, the drafters of the Brussels II Convention departed from the text of Article 24 of the Brussels I Convention and introduced an “exception” to what would become the reference rule in the civil procedure established by the EU for intra-European cases.42 The Brussels IIter Regulation makes it possible for the court of a Member State to order provisional or protective measures: i) if it has jurisdiction as to the substance of the case; ii) if it has jurisdiction to pronounce a provisional and protective measure on the basis of the lex fori and

Netherlands, Germany etc. The Hague Conference has also created its network of judges to the same end. See the conclusions and recommendations adopted by the latter here: https://assets.hcch.net/docs/69f03498-8a72-4ffe-aa44-30fc70493859.pdf. 39 See also I. PRETELLI, Child Abduction and return procedures (note 37), p. 12. 40 See supra B.1. 41 For references see supra (note 2). 42 On the distinction between intra-EU and extra-EU cases, see L. MARI/ I. PRETELLI, Possibility and Terms for Applying the Brussels I Regulation (Recast) to Extra-EU Disputes, this Yearbook, vol. 15 (2013/2014), pp. 211-253.

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Provisional Measures in Family Law a) the measure may be enforced within its borders or b) the measure is urgent. Indeed, the court of the habitual residence of a child may adopt provisional and protective measures – for instance, in the framework of a pending divorce proceeding, and on the basis of Article 8 para. 1 of the Brussels IIbis Regulation. In the same context, the court of another Member State in which the child is temporarily present may take measures by virtue of Article 20 of the Brussels IIbis Regulation. The need to take action with regard to a vulnerable person is absent in the case of civil and commercial disputes. It is also often absent in those family matters where only credits or property are at stake. Hence, a different function underlies the textual differences between Article 20 and the reference provision of Article 31 of the Brussels I Regulation. This difference hinders a mere transposition of the acquis on provisional measures related to the latter. The CJEU stated that: “[T]hose […] texts differed too much in their objectives and in other provisions to permit the application, in the context of Regulation No 2201/2003, of any solutions adopted in the context of the Brussels Convention or Regulation No 44/2001.”43 A.

The Court Enjoying Jurisdiction as to the Substance

1.

Jurisdiction as to the Substance of the Case Encompasses Provisional and Protective Measures

If a court is vested with the power to decide on the merits, it will a fortiori be vested with the power to decide on provisional and protective measures. No doubts have ever been raised as to the principle that the court deciding on the merits also has jurisdiction to order provisional or protective measures ex ante, during, or after a case has been filed. In the EU system, ever since the Brussels Convention, this clear principle has remained implicit and is still not expressed by a specific provision.44 43 CJEU, 9 November 2010, Bianca Purrucker v Guillermo Vallés Pérez, C-296/10, ECR 2010 I-11163, ECLI:EU:C:2010:665, para. 62. See L. IDOT, Recent ECJ Judgments in Cases of Children Abduction and Parental Responsibility The ECJ Judgments “Deticek”, “Povse” and “Purrucker”, Int'l Lis, 2010, p. 118-127; C. HONORATI, Purrucker I e II ed il regime speciale dei provvedimenti provvisori e cautelari a tutela dei minori, Int'l Lis, 2011, p. 66-80; O. FERACI, Riconoscimento ed esecuzione all’estero dei provvedimenti provvisori in materia familiare: alcune riflessioni sulla sentenza Purrucker, Riv. dir. int. priv. proc., 2011, p. 107-134; etc. 44 See CJEU, 17.11.1998, Van Uden Maritime BV v Kommanditgesellschaft in Firma Deco-Line e.a., C-391/95, ECR 1998 I-7091, ECLI:EU:C:1998:543, para. 19. See also CJEU, 27.4.1999, Hans-Hermann Mietz v Intership Yachting Sneek BV, C-99/96, ECR 1999 I-2277, ECLI:EU:C:1999:202, para. 40. It is, however, noteworthy that an explicit provision has been included in Article 19 para. 3 of Regulation (EC) No 1348/2000 of 29 May 2000 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (OJ L 160, 30.6.2000, p. 37) and in the subsequent Regulation

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Ilaria Pretelli The Brussels IIter Regulation confirms that “provisional, including protective, measures [may be] ordered by a court having jurisdiction as to the substance of the matter” in its Recital 59. Recital 59 anticipates and clarifies point (b) of Article 2 para. 1, which includes “provisional, including protective, measures ordered by a court which by virtue of this Regulation has jurisdiction as to the substance of the matter”, within the autonomous notion of “decision” adopted by the Regulation. The provision is new, despite the fact that recognition and enforcement of provisional measures adopted by the Court having jurisdiction as to the substance was plainly admitted in the framework of the Brussels I and Brussels II systems. 2.

The Problem of Identifying the Ground of Jurisdiction on the Basis of which a Court Grants a Measure ante causam

Whenever a provisional or protective measure is granted ante causam, it can be difficult to assess whether the court judging on the measure will also be the one taking jurisdiction on the merits. With few, albeit significant, exceptions,45 the Brussels II system allows multiple fora to an even greater extent than the Brussels I system. The series of alternative fora available to someone applying for a divorce on grounds of Article 3 of the Brussels IIbis Regulation has led the doctrine to identify the principle of favor divortii as one of the guiding principles inspiring the Regulation.46 In case of uncertainty as to the head of jurisdiction of the court granting a measure ante causam, the CJEU indicates that it should be the special head of jurisdiction of Article 20 Brussels IIbis:47 “where the substantive jurisdiction […] of a court which has taken provisional measures is not plainly evident from the content of the judgment adopted, or where that judgment does not contain a statement, which is free of any ambiguity, of the grounds in support of (EC) No 1393/2007 of 13 November 2007 (OJ L 324, 10.12.2007, p. 79). See F. GUILLAUME/ I. PRETELLI (note 5), para. 4.2, recalling that these explicit rules of the EU Service Regulations are copied from Article 15, para. 3 of the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. 45 Reference is made to Article 10 of the Brussels IIbis Regulation on “jurisdiction in case of child abduction” now Article 9 of the Brussels IIter Regulation on “Jurisdiction in cases of the wrongful removal or retention of a child”. On the terminology see supra at footnote 37. 46 The EU rule on jurisdiction for divorce proceedings belongs to those conflict of law rules explicitly pursuing a material result and identified by the French doctrine as “règles de rattachement à caractère substantiel” (see A. BUCHER, Sur le règles de rattachement à caractère substaniel, in Liber amicorum A. F. Schnitzer, Genève, 1979, p. 37 et seq. and p. 39) or, in Germany, by reference to the the Günstigkeitsprinzip (see L. RAAPE/ F. STURM, Internationales Privatrecht, t.1, Munich, 1977, p. 9 et seq.). 47 CJEU, 9.11.2010, Bianca Purrucker v Guillermo Vallés Pérez, C-296/10, ECR 2010 I-11163, ECLI:EU:C:2010:665, para. 86. See also C. HONORATI, (note 43), p. 66.

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Provisional Measures in Family Law the substantive jurisdiction of that court, with reference made to one of the criteria of jurisdiction specified in Articles 8 to 14 of that regulation, it may be inferred that that judgment was not adopted in accordance with the rules of jurisdiction laid down by that regulation”. Even though the court may have jurisdiction as to the substance in the future, the adoption of provisional and protective measures will nevertheless need to satisfy the conditions set out in Article 20 of the Brussels IIbis Regulation,48 unless the court has stated, in clear terms, that it founds its decision on provisional measures on one of the heads of jurisdiction listed in Articles 8 to 14 of the Brussels IIbis Regulation. The CJEU has introduced a rebuttable presumption according to which provisional measures granted ante causam fall under Article 20 of the Brussels IIbis Regulation. The rationale for this presumption finds its roots in the need to neutralise the forum arresti in order to avoid a crystallisation of jurisdiction in that forum. Jurisdiction as to the substance should not necessarily be attracted by the forum used for the provisional measure.49 B.

The National Forum Allowed to Issue Provisional Measures

The “congenital”50 pluralism of provisional measures inevitably encourages forum shopping. As a consequence, there is a tendency to limit the jurisdictional power to grant provisional measures. In English law, a forum without jurisdiction as to the substance is normally forbidden to grant injunctions.51 The only exception stems from the implementation of the European system of civil procedure. The systems is based on two-tracks of jurisdiction, adding an urgent forum to the forum empowered with jurisdiction as to the substance. The case law of the European Court of Justice on the jurisdictional power to order provisional or protective measures under Article 20 of the Brussels IIbis Regulation only includes orders protecting children. In addition, most cases concern children who were victims of parental cross-border child abduction. 48 CJEU, 19.9.2018, Hampshire County Council v C.E., N.E., Joined Cases C‑325/18 PPU and C‑375/18 PPU, ECLI:EU:C:2018:739, para. 86; CJEU, 15.7.2010, Bianca Purrucker v Guillermo Vallés Pérez, C-256/09, ECR 2010 I-7353, ECLI:EU:C:2010:437, para. 76 and 78. 49 On this “side-effect” of provisional measures, already fought by the Lugano convention, see O. MERKT, (note 15), p. 56. 50 J.F. VAN DROOGHENBROECK, Compétences internationale et territoriale du juge du provisoire, in J. VAN COMPERNOLLE/ G. TARZIA, Les mesures provisoires en droit belge, français et italien, Bruxelles, 1998, p. 475. 51 See The Siskina v. Distos Compania Naviera S.a. 1979 A.C. 210. In Switzerland jurisdiction of the forum on provisional measures is explicitly admitted by the Swiss Federal Private International Law Act. See A. BUCHER, Commentaire romand à la LDIP/CL, Helbing Lichtenhahn, 2011, no 14 ad Article 10 LDIP.

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1.

Implicit and Explicit Conditions set by the CJEU for the Subsumption of a Measure under Article 20 Brussels IIbis

a)

Urgency

The rule on provisional measures of the Brussels II system makes explicit the condition of urgency (“in case of urgency” / “in urgent cases”).52 On the other hand, it clarifies that the relief sought may relate both “to persons or property present in that State” (“in respect of persons or assets in that State”). In addition, unlike the rule under the Brussels I system and the other Regulations taken into account,53 Article 20 of the Brussels IIbis Regulation starts with a negative formulation (“shall not prevent”) which is not purely accidental or due to the personal style of different drafters. It is easy to infer from it a certain reluctance on the part of the legislator to admit the taking of a provisional measure by a judge other than the one having jurisdiction as to the substance of the matter. This reluctance finds an explanation in negative experiences of “biased” legal battles. In litigation involving children, and above all in the framework of wrongful removal or retention of a child, contradictory outcomes of parallel litigations in Member States have often occurred, with one of the parents able to take advantage more than the other of the “conflict of decisions”54. Spontaneous “assistance” to their own nationals by Member States involved in a family dispute, is not due to nationalistic interests or a xenophobic attitude; it is quite simply the consequence of the easier access to justice that a national has as compared to a foreigner for cultural reasons alone. There are sufficient heuristic reasons behind the procedural advantages of an integrated national: the language spoken by the party “litigating at home”, his or her knowledge of the functioning of the national legal system, his or her culture’s influence in the construction of a trusting relationship with the lawyer and the authorities dealing with his or her case, which is often very emotional and easily lead to empathy, etc. These experiences are particularly striking in the context of proceedings originating in the wrongful removal or retention of a child. In the Povse case,55 Austrian and Italian courts had adopted provisional measures that were incompatible with each other.56 In this case, which is not an isolated one, each judge had See supra B.1.a). See supra (note 2). 54 “Whenever one parent has moved, motivated by the desire to found a family, and then finds himself or herself deprived of a family, of an appropriate job, with difficulties in speaking the language, without an affective or professional network of contacts, etc., the “assistance” of his or her referential State may be a key factor in order to avoid the feeling of being locked-in to the country of a previous, regretted immigration”. I. PRETELLI, Child Abduction and Return Procedures, (note 37), p. 12. 55 CJEU, 1.7.2010, Doris Povse v Mauro Alpago, C-211/10 PPU, ECR 2010 I06673, ECLI:EU:C:2010:400. 56 B. SIMMA, Vollstreckung europäischer Rückkehrentscheidungen: Neue Mittel und Wege sind gefragt!, Zeitschrift für Ehe- und Familienrecht, 2015, p. 52; L. IDOT, Mesures 52 53

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Provisional Measures in Family Law issued measures based on the assumption that the child should grow up in their own jurisdiction. It is possible that, when cultural differences are displaced by deeper European integration within the European area of freedom, justice and security, formalistic implementation of the EU regulations – in order to prevent any risk of parochialism – will fade away. At present, the CJEU approach is indeed able to explain the text of Article 20 of the Brussels IIbis Regulation and the dangers it aims to prevent. However, the background to the text must not stand in the way of the correct implementation of this provision. The positive conflict of jurisdictions in the Povse case was solved by the CJEU via a strict, and perhaps formalistic, application of the principle giving precedence to the court of origin.57 Article 20 of the Brussels IIbis Regulation and Article 15 of the Brussels IIter Regulation aim to favour the taking of “urgent” and anticipatory measures with a view to putting in place a provisional settlement of the broken home until the situation is properly evaluated.58 In family matters, the need for an available court is linked to the urgency of most of the situations related to family disputes. The problem of forum shopping must give way to prompt and timely management of conflicts of jurisdiction. A potential positive conflict of jurisdictions, where two courts are taking action to protect a child, carries less serious risks than that of a negative conflict, since in the latter case a child may be left unprotected. In this respect, Article 20 of the Brussels IIbis Regulation can clearly ensure that there is no gap in jurisdiction and it attempts to provide coordination between an acting court or authority and a court that, although competent, fails to act for instance because the party willing to protect the child is not within its jurisdiction and/or is not bringing any claim before it. Article 15 of the Brussels IIter Regulation goes even further. The requirement of “urgency”, inherited from the 1961 Hague Convention where it serves as a ground for jurisdiction, is an expression of a periculum in mora that is inherent in all provisional and protective justice. Urgency expresses, in particular, a qualified periculum: the need to prevent irreparable harm to the child. Urgency can also express the timeline of the coordination between the two courts involved in the solution of a family dispute. Whenever a court uses Article 20 of the Brussels IIbis Regulation in order to take a provisional measure in lieu of the court having jurisdiction on the merits, the measure it has granted will cease to have effect as soon as the court having jurisdiction on the merits is able to take over the delicate situation of the broken home (para. 2).

urgentes de protection de l’enfance et application du règlement, in Europe, Juris Class. 2009, n. 265, p. 44 et seq. 57 C. HONORATI, (note 43), p. 71, views the CJEU’s approach as regrettable because of the automation it introduces into the management of situations that are often very delicate. 58 On the need to take into account the anticipatory character of provisional measures in family matters see P. PICONE, (note 9), p. 13.

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Ilaria Pretelli The test for urgency requires the judge to consider “the child’s circumstances, his likely development and the effectiveness of the provisional or protective measures adopted”.59 Article 20 of the Brussels IIbis Regulation provides a ground for jurisdiction when a change in circumstances unknown to the competent authority and endangering the fundamental human rights of the child requires action. The CJEU had occasion to deal with a case where a family made up of three children, their mother and a stepfather had lived in Finland and then in Sweden. After some time they had moved back to Finland, but because of their frequent changes of address in that country they did not establish a new habitual residence there. The Finnish authorities, who, in the past, had already placed the older children in care to protect them from their stepfather’s violence, once again placed the children in care. The decision was challenged by the mother on the grounds that the children were Swedish nationals with permanent residence in Sweden. The CJEU therefore held that the case fell within the jurisdiction of the Swedish courts. In a case like the above, regardless of the initiatives taken by the competent court in respect of the children involved, the authorities benefiting from proximity to the child have a specific duty to act. This responsibility has its origin in international law and can be inferred from Articles 2 and 9 of the UN Convention on the rights of the child, to name the main two of the many international law rules protecting children. Within the specific EU system the concept of urgency encompasses not only a situation of fact – the danger to which the child is exposed – but also the ineffectiveness of the competent court: “[T]he concept of urgency in [Article 20] relates both to the situation of the child and to the impossibility in practice of bringing the application concerning parental responsibility before the court with jurisdiction as to the substance”.60 In Detiček, despite the presence of the child within the jurisdiction issuing the provisional measure, a “danger in the wait” was completely absent. The court with jurisdiction as to the substance had already issued provisional measures consisting in the granting of sole custody of the child, Antonella, to her father and, at the same time, her placement in the children’s home of the Calasantian Sisters in Rome. However, after the child was brought to Slovenia in violation of that order, the Slovenian court, claiming jurisdiction under Article 20 of the Brussels IIbis Regulation, had issued a provisional and protective measure giving custody of Antonella to her mother. As a result, the child had been targeted by two successive 59 CJEU, 2 April 2009, A., C-523/07, ECLI:EU:C:2009:225, para. 60. See L. IDOT, (note 56), n. 265, p. 44 et seq. 60 CJEU, 23.12.2009, Jasna Detiček v Maurizio Sgueglia, C-403/09 PPU, ECR 2009 I-12193, ECLI:EU:C:2009:810, para. 42. See C. BRIÈRE, Bruxelles II bis: mesure provisoire sur mesure provisoire ne vaut, Dalloz, 2010, No 17, p. 1056-1058; A. GOUTTENOIRE, Les droits de l'enfant devant la Cour de justice de l'Union européenne, Revue des affaires européennes, 2009, p. 627-634; Ph. GUEZ, Les mesures urgentes et provisoires de l’article 20 du règlement Bruxelles II bis en cas de déplacement illicite d’enfant, Gazette du Palais, 2010, No 148-149 Jur., p. 47-49.

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Provisional Measures in Family Law provisional measures incompatible with each other. In order to solve the contradiction, the CJEU considers that the condition of urgency, which could have upheld the provisional measure granted by the court claiming jurisdiction under Article 20, was not met, since the second order was merely contradicting the previous one, which, in addition, had been taken by the court having jurisdiction as to the substance. The court of the Member State where the child is present takes action only to the extent that the court having jurisdiction as to the substance of the case is not in a position to protect the child from an imminent danger. b)

Presence

As in civil and commercial matters, a departure from the competent forum only finds a legitimate justification in the principle of effectiveness. Only to the extent that the measure needs to be prompt and effective does it become possible to avoid the double passage: first before the original competent authority and then before the enforcement authority. Provisional measures issued on grounds of the special rule cannot cross the borders of the issuing State. To impose measures issued on grounds of the special rule on the judge who has “wider” jurisdictional power – and is making use of that power – would contradict the logic of the system.61 Either the issuing judge has the power to decide on the merits of the case or they have the authority to enforce the relief sought within their jurisdiction. There is no other option (tertium non datur). c)

The Provisional Character “[I]t is for the national legislature to lay down the measures to be adopted by the national authorities in order to protect the best interests of the child and to lay down detailed procedural rules for their implementation”.62 The provisional character of a measure needs thus to be extracted from national rules of civil procedure. No temporal parameters are set,63 except that:

CJEU, A. (note 59), para. 47. See M. PERTEGÁS SENDER, Article 20, in U. MAGNUS/ P. MANKOWSKI (eds), Brussels IIbis Regulation, Munich, 2012, No. 255, on the differences between the “presence” test of Article 20 of the Brussels IIbis Regulation and that of the Brussels I system. For a discussion on the “real connecting link” required by the latter see I. PRETELLI, (note 3), p. 102. See also the critical comments on strict interpretations of the “presence” requirement by U. JANZEN/ V. GÄRTNER, Kindschaftsrechtliche Spannungsverhältnisse im Rahmen der EuEheVO – die Entscheidung des EuGH in Sachen Detiček (EuGH, S. 190), IPRax, 2011, p. 158-166, p. 164. 62 CJEU, A. (note 59), para. 51. 63 M. PERTEGÁS SENDER, (note 61), No 255. 61

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Ilaria Pretelli The provisional nature of a measure “arises from the fact that, […] they cease to apply when the court of the Member State having jurisdiction as to the substance of the matter has taken the measures it considers appropriate”.64 Article 20 of the Brussels IIbis Regulation sets a coordination rule between the authorities taking action to expeditiously protect persons through provisional measures available in loco and the authorities which, in the absence of tight time pressure, decide on the best possible resolution of a family crisis. d)

Other Conditions?

Case law on Article 20 of the Brussels IIbis Regulation is not abundant. However, it is interesting to recall that a point was raised in relation to an administrative measure taken by authorities prima facie deprived of jurisdiction as to the substance of the matter. The CJEU stated that the public law origin of a measure should not be regarded as an obstacle to its subsumption under Article 20 of the Brussels IIbis Regulation, as long as the measure aims to protect children in the framework of a family dispute falling within the scope of the Brussels IIbis Regulation. This principle has been affirmed in a case concerning an order of placement taken by a Finnish public body under Finnish law. The CJEU observed that the administrative nature of the measure in question did not mean that the order fell outside the scope of the Brussels IIbis Regulation.65 2.

The Acquis in the Brussels IIter Regulation and the Introduction of an Exception to Strict Territoriality

As usual, the acquis on Article 20 has been codified in the Recast. Recital 57 specifies that urgency exists whenever – for instance – “there is imminent danger for the child's physical and psychological integrity or life and any further delay might bear the risk that this danger materializes”. As regards presence, Recital 30 points out that Member States always have jurisdiction to take urgent provisional or protective measures with regard “to the person or property of a child present” in their jurisdiction. In respect of these measures, justified by the principle of effectiveness and thus confined to the territory of the issuing jurisdiction, the new regulation introduces a significant exception. When aimed at protecting a child from a grave risk of harm – within the meaning of point (b) of Article 13(1), i.e. a risk entailing an exception to the discipline of the 1980 Hague Convention prescribing the child’s return – these measures may have extraterritorial effects. Those measures should apply until a court of a Member State having jurisdiction over the substance of the matter under the regulation has taken the measures it considers appropriate. 64 65

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Provisional Measures in Family Law In this respect, as already observed, Brussels IIter aligns the EU provisions to the “Hague rules” on the protection of children.66 The scope of the coordination rule ensuring that there is no gap in the handling of a case concerning a child becomes broader in Brussels IIter, as the following hypothetical example will show. A child, habitually resident in Greece, is brought to Italy by her mother without the father’s consent. The latter files for return of the child to Athens, where the child was being raised until her illegal transfer to Italy. The mother opposes the child’s return on grounds of point (b) of Article 13(1), showing that she has been diagnosed with “Battered Women’s Syndrome”, a Post-Traumatic-Stress Disorder. A provisional measure granting sole custody to the mother is issued in Italy pending the Court of Athens proceedings on the substance. The order is enforced in Italy and continues to apply until a decision is taken by the Court of Athens. Meanwhile, the father visits the child in Italy and brings her back to Athens. The mother asks the Greek authorities to enforce the Italian protection order. The Brussels IIbis regime would prevent the Greek authorities from enforcing the Italian order, since Italy would not seem to be invested with jurisdiction as to the substance whereas Greece is. Brussels IIter introduces a specific exception for cases such as the one in the example. The possibility of enforcing the Italian order in Greece averts the risk of placing the child in an intolerable situation while waiting for the Greek courts to assess whether the mother, in illegally transferring the child, has acted in a way that constitutes an impulsive and egoistic act or the essential exercise of her parental duties. In so doing, the Brussels IIter Regulation acknowledges that in dramatic cases, as cases of domestic violence often are, obliging the mother to stay with the child in Greece until the decision on return is taken could affect her mental health and create a situation that is intolerable for the child.67 66 Supra B.1. See also L. CARPANETO, La ricerca di una (nuova) sintesi tra interesse superiore del minore “in astratto” e “in concreto” nella riforma del regolamento Bruxelles II-bis, Riv. dir. int. priv. proc., 2018, pp. 944-977, p. 964. 67 On the paradoxes of pursuing deterrence through an inflexible application of the 1980 Hague Convention on the civil aspects of international child abduction in cases of domestic violence see M. KAYE, The Hague Convention and the Flight from Domestic Violence: How Women and Children are being Returned by Coach and Four, Int’l J. of Law, Policy and the Family, 1999, 191 et seq., L. SILBERMAN, The Hague Child Abduction Convention Turns Twenty: Gender Politics and Other Issues, New York Un. J. of Int’l Law and Politics, 2000, p. 221, 241 et seq., S. SHETTY/ J.L. EDLESON, Adult Domestic Violence in Cases of International Parental Child Abduction, Violence Against Women, 2005, p. 11, 115 et seq., M.H. WEINER, Inertia and Inequality: Reconceptualizing Disputes Over Parental Relocation, Un. of California Davis L. Rev., Vol. 40, 2006-2007, p. 1797, P. PARKINSON, Family Law and the Indissolubility of Parenthood, Family Law Quarterly, Vol. 40, No 2, Summer 2006, p. 263, H. RHOADES, Children’s needs and Gender Wars: the Paradox of Parenting Law Reform, 2010, Australian J. of Family L., 160 et seq., R. LAMONT, Mainstreaming gender into European family law? The case of international child abduction

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IV. The Law Applicable to Provisional and Protective Measures A.

Are Provisional and/or Protective Measures Necessarily Subject to the Lex Fori?

It seems somehow natural that a State authority seeking the protection of a minor should apply the lex fori to provisional measures concerning children. This solution has been known since the Boll case,68 which arose after the Swedish authorities adopted a protection measure entrusting the supervision of a child to a Swedish institution while the child was in the material and affective care of her maternal grandparents. The measures were challenged before the International Court of Justice by the Netherlands, claiming exclusive jurisdiction to pronounce custody measures by virtue of the Hague Convention of 12 June 1902 on the Guardianship of Infants, which states, at Article 1 “La tutelle d'un mineur est réglée par sa loi nationale”. However, since the Swedish measures were temporary and did not aim to intervene in the issue of custody but rather to protect the child from a criminal environment,69 the ICJ did not find any violation of the Treaty by Sweden. Provisional measures have been considered to be subject to the lex fori, as a consequence of their characterisation either as procedural rules or as mandatory rules. Hence, as regards provisional measures “le problème du conflit de lois est assez largement absorbé par celui du conflit de juridictions”.70 Even if there seems to be little consensus on the granting of provisional measures based on the lex causae,71 application of the lex fori to provisional or protective measures is not dictated by logical necessity. In certain cases, first and foremost in cases of provisional measures as opposed to protective ones,72 a judge may well apply the lex causae, instead of the lex fori.73 and Brussels II revised, European Law J., 2011, p. 366 et seq., I. PRETELLI, Critical Assessment (note 37), p. 20, 31 et seq., R. SCHUZ, The Hague Child Abduction Convention, Hart Publishing, 2013, p. 58 et seq., M. SALTER, Getting Hagued: The impact of international law on child abduction by protective mothers, Alternative L. J., Vol. 39, 2014, http://search.informit.com.au/documentSummary;dn=430878643980482;res=IELHSS. 68 International Court of Justice, Case concerning the application of the Convention of 1902 Governing the Guardianship of Infants (Netherlands v Sweden), ICJ Reports, 1958, p. 55 (“the Boll case”). 69 See T. BALLARINO, Diritto internazionale privato, Padova, 1982, p. 509, 779. 70 P. DE VAREILLES-SOMMIÈRES, La competence internationale des tribunaux français en matière des mesures provisoires, Rev. crit. dr. int. pr., 1996, p. 398 71 H. GAUDEMET-TALLON, Divorce international: des précisions quant à la détermination de la loi applicable, Note sous Cour de cassation (1re civ.), 13.5.2015, No 1321.827, Rev. crit. dr. int. pr., 2015, p. 940; P. PICONE, (note 9), passim. 72 Supra II.A. 73 See extensively O. MERKT, (note 15), p. 155-162 and the analysis of the doctrinal opinions quoted therein.

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Provisional Measures in Family Law In Switzerland, a Czech woman had brought an action to obtain the ancillary effects of her divorce previously granted in the Czech Republic. She was domiciled in Switzerland and her former husband in the Czech Republic. Pending the procedure, she requested a provisional measure consisting in the payment of a maintenance contribution. While the Swiss cantonal courts of first and second instance, after recognizing the Czech judgment, had provisionally granted a maintenance contribution on grounds of the lex fori, the Federal Supreme Court overturned those judgments and applied the lex causae to the provisional measures. The Court clarified the respective scope of Articles 4 and 8 of the Hague Convention on the Law Applicable to Maintenance Obligations, stating that, in accordance with Art. 8 para. 1 of the Convention, the provisional maintenance contribution required for the duration of the proceedings completing the foreign divorce judgment needed to be governed by the law applicable to the divorce74. The law applicable to divorce has been effectively used to obtain a provisional measure75. If a Court needs to apply a foreign law in order to decide a case, it could also take all provisional measures available under such law, provided that the lex fori vests it with the necessary powers to do so. B.

The Granting of Provisional Measures by the “Provisional Court” between Lex Fori, EU Requirements and the Lex Causae

Under the current regime, measures falling within the scope of Article 20 of the Brussels IIbis Regulation seem to be entirely governed by the law of the forum, as the CJEU has frequently stressed: “The taking of the measure and its binding nature are determined in accordance with national law”.76 74 See the decision by the Swiss Federal Court, 24th May 2018, 5A_481/2018 – ATF 144 III 368, and the comment by A. BUCHER, Jurisprudence suisse en matière de droit international privé de la famille, Swiss Rev. of Int'l and European L., 2019 p. 303-327, p. 306. 75 See the French decision by the Cour de cassation (1re civ.), 13.5.2015, No 1321.827, on which GAUDEMET-TALLON, (note 71), p. 940 quoting the following precedents: Paris, 7.7.1959, Rev. crit. dr. int. pr., 1960, p. 354, note Y. LOUSSOUARN; 13.11.1979, Rev. crit. dr. int. pr., 1980, p. 568, 1re esp., note Y. LEQUETTE; Civ. 13.2.1973, Rev. crit. dr. int. pr., 1974, p. 631, note L. TOPOR. 76 CJEU, 2.4.2009, A., C-523/07, ECR 2009 I-2805, ECLI:EU:C:2009:225, para. 4 and 52; CJEU, 26.4.2012, Health Service Executive v S.C. et A.C., C-92/12 PPU, ECLI:EU:C:2012:255, para. 130, on which S. MARINO, Regolamento 2201/2003 e protezione dei minori: nuovi chiarimenti della Corte di giustizia CE in tema di ripartizione della competenza e di tutela cautelare, Rivista di diritto processuale, 2010, p. 477-486; F. JAULT-SESEKE, Gewöhnlicher Aufenthalt des Kindes bei internationalem Wanderleben und Voraussetzungen für die Zulässigkeit einstweiliger Maßnahmen in Sorgerechtssachen

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Ilaria Pretelli In addition, the rules of the lex fori need to comply with the requirements laid down by the EU and, in particular, with those expounded by the CJEU in its work of interpreting EU law. The existing CJEU case law on provisional and protective measures in the Brussels II system only includes orders protecting children. Most cases concern children who were wrongfully removed or retained by one of their parents. Within this framework, the CJEU has gradually set a test for the operation of Article 20 of the Brussels IIbis Regulation which postulates the existence of the aforementioned three conditions: urgency; presence in the Member State concerned; provisional character.77 In addition, the interpreter should always bear in mind that “in that it is an exception to the system of jurisdiction laid down by the Regulation, [Article 20] must be interpreted strictly”.78 Apparently, there should be no room, within this context, for the application of the law of the Member State that is ultimately invested with the power to decide on the substance. However, it may be argued that even though the “taking of the measure” and its “binding character” are to be consistent with national law and with the requirements of EU law, the content of the measure may – and sometimes should – take into account79 the law applicable to the substance of the case. The children of an Italian and German couple are wrongfully removed by their father from Germany to Italy in the context of a highly conflictual divorce. The divorce proceedings are pending in Germany and so is the application for return. The mother asks for an interim relief in Italy, in the form of Article 700 of the Italian code of civil procedure. Among the issues raised to justify the relief, the mother asks the Italian judge for provisional sole custody of the children and for a provisional amount for the maintenance of the children to be set. Even though the Italian judge will grant the measure in accordance with Article 700 of the Italian code of civil procenach der EuEheVO, IPRax, 2011, p. 50-55; J. PIRRUNG, Verfahrensrechtliche Anforderungen bei Zwangsunterbringung eines (suizid-)gefährdeten Jugendlichen in einem anderen EU-Staat, IPRax, 2013, p. 404-408. 77 CJEU, Hampshire County Council (note 48), para. 85; CJEU, Purrucker (note 43), para. 78; CJEU, 23.12.2009, Jasna Detiček v Maurizio Sgueglia, C-403/09 PPU, ECR 2009 I-12193, ECLI:EU:C:2009:810, para. 39; CJEU, A. (note 59), para. 47. 78 CJEU, Health Service (note 76), para. 130. 79 It is acknowledged that the extent to which a foreign rule may be applied may vary according to its content and adaptability to the case at stake. Hence a judge may simply “take into account the content of foreign law” when deciding the case. The method has been studied in France as “prise en considération du droit étranger”. See E. FOHRER, La prise en considération des normes étrangères, thèse Paris II-Panthéon-Assas, 2004, see in particular n° 502, p. 344. The French cour de cassation, 1re, 19 octobre 1999, n° 96-22.593, Bull. civ. I, n° 280 p. 182. See the analytical observations by D. BODEN, L'ordre public : limite et condition de la tolérance - Recherche sur le pluralisme juridique, thèse Paris I-PanthéonSorbonne, 2002, n° 131.

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Provisional Measures in Family Law dure, provided that the Brussels II system empowers them with the special jurisdiction for provisional justice, they may take into account German law in order to set a provisional amount for maintenance and the German conditions for sole custody. In the case of provisional justice, as opposed to protective justice, it seems unreasonable to apply the lex fori, when the final decision will be subject to another law. Applying the lex causae, in this case German law, is more likely to guarantee a smoother transition from the provisional settlement to the final one. Although the type of provisional measures that can be obtained is governed by the law of the court – a principle that also applies to definitive measures – i.e. the decision on the merits, the rights to be protected provisionally, and the related obligations to be imposed provisionally, may well be governed by the lex causae since it is the latter that will finally determine their existence, their non-existence and, in the first case, their extent.80

V.

Recognition and Enforcement of Provisional Justice

A.

The General Principles Governing intra-EU Recognition and Enforcement of Provisional and Protective Measures

Under the Brussels I system, national courts seised with the merits of a case may grant provisional measures intended to be enforced abroad.81 The reports that accompany the Brussels and Lugano Conventions, drafted by JENARD, SCHLOSSER and POCAR, clearly admit the enforcement abroad of provisional and protective measures.82 However, the CJEU has made it clear that, in order to be enforced abroad, these measures need to have been issued audita et altera parte.83 80 I wish to express once again my gratitude to Gian Paolo ROMANO for sharing his thoughts during our conversations and in : Conflits entre parents et conflits d'ordres juridiques en matière de responsabilité parentale, in Enlèvement parental international d'enfants, Neuchâtel / Bâle 2015, p. 85-127 ; Conflicts between parents and between legal orders in respect of parental responsibility, this Yearbook 2015, p. 129-166 ; Quelques remarques sur les conflits internationaux de statuts familiaux, in P. LAGARDE (ed), La méthode de la reconnaissance des situations en droit international privé, Paris, 2013, p. 185-216. 81 See, for instance, in France, Cour de cassation, 30 juin 2004, Stolzenberg c. CIB Mellon Trust Company, n° 01-03.248 01-15.452 confirming that a “Mareva injunction” may be enforced in France, under the Brussels Convention. For the enforcement of “freezing (Mareva) injunction” and “world-wide Mareva injunction” in the Lugano system see the Swiss federal court, Uzan v. Motorola Credit Corporation, BGE 129 III 626. See also M. NIOCHE, (note 9), passim, for further references. 82 See P. JENARD, Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters signed at Brussels on 27 September 1968, OJ C 5, 5.3.1979, p. 1-65, p. 43. P. SCHLOSSER, Report on the Convention on the

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Ilaria Pretelli Recognition and enforcement of provisional and protective measures is excluded in all other cases where these two conditions – their being issued by the judge enjoying jurisdiction as to the substance and their being issued in an adversarial proceeding – are not met. Provisional measure issued ex parte and not served on the defendant prior to the enforcement, as well as measures issued by the Court not having jurisdiction as to the substance, do not enjoy any extraterritorial effect.84 The first condition for a measure to circulate – that it must have been taken inter partes – was originally set by the Court of Justice and subsequently codified by the Brussels I recast Regulation.85 In addition to all the progeniture of the Brussels I system – the Conventions and Regulations that copy-paste the rules and jurisprudence on the 1968 Brussels Convention – this also applies to the Brussels II system, with a notable exception aimed at protecting children involved in wrongful transfers from one Member State to another. The Brussels IIter Regulation specifies in Article 2-1, point (b) jointly read with Article 2-1, last sentence, Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice signed at Luxembourg on 9 October 1978, OJ C 59, 5.3.1979, p. 71-151, p. 79; F. POCAR, Explanatory Report on the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, signed in Lugano on 30 October 2007, OJ C 319, 23.12.2009, p. 1-56. 83 CJEU, 21.5.1980, Bernard Denilauler v SNC Couchet Frères, Case 125/79, ECR 1980 p. 1553 et seq., ECLI:EU:C:1980:130, on the consistency with the Brussels I system of the “saisie conservatoire” ordered by the French Montbrison tribunal and targeting goods located in Germany (see para 16: “The courts of the place or, in any event, of the Contracting State, where the assets subject to the measures sought are located, are those best able to assess the circumstances which may lead to the grant or refusal of the measures sought or to the laying down of procedures and conditions which the plaintiff must observe in order to guarantee the provisional and protective character of the measures ordered. The Convention has taken account of these requirements by providing in Article 24 that application may be made to the courts of a Contracting State for such provisional, including protective, measures as may be available under the law of that State, even if, under the Convention, the courts of another Contracting State have jurisdiction as to the substance of the matter”). See also CJEU, 25.5.2016, Rudolfs Meroni v Recoletos Limited, C-559/14, ECLI:EU:C:2016:349, para. 54. In the national proceeding that led to the two De Cavel cases (CJEU, 27.3.1979, Jacques de Cavel v Luise de Cavel, Case 143/78, ECR 1979 p. 1055, ECLI:EU:C:1979:83 followed by Luise de Cavel v Jacques de Cavel, Case 120/79, ECR 1980 p. 731, ECLI:EU:C:1980:70) the Parisian judge had issued an order to affix seals to goods located in Germany. 84 The doctrine is sceptical as to the prescription of serving the ex parte measure on the defendant prior to its enforcement since it frustrates the typical effect of ex parte measures. See the convincing arguments by E. MERLIN, Le misure provvisorie e cautelari nello spazio giudiziario europeo, Rivista di Diritto Processuale, 2002, p. 759-804. G. CUNIBERTI, Les mesures conservatoires portant sur des biens situés à l’étranger, Paris, 2000, p. 196, n° 252 et seq., esp. at p. 202, is equally critical regarding the possibility of discriminating between unilateral and adversarial provisional measures at the enforcement stage. 85 See Article 2, point (a) and article 42 para. 2, point (c) of the Brussels I Regulation. Amplius GUILLAUME / PRETELLI, (note 5), para. 8.

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Provisional Measures in Family Law that “provisional, including protective, measures ordered by a court which by virtue of this Regulation has jurisdiction as to the substance of the matter” fit in the definition of “decision” enforceable abroad, subject to the condition that “the decision containing the measure is served on the respondent prior to enforcement”.86 B.

The Exceptional Regime Safeguarding the Best Interests of Children and its Possible Extension to all Measures for the Protection of SelfDetermination of Persons

As we have noted above,87 the Brussels IIter Regulation introduces an exception to the general acquis on circulation of provisional measures, since it admits an extraterritorial effect of specific provisional, including protective, measures even when they were issued by a judge empowered with jurisdiction by his own law and on grounds of Article 15 of the Regulation. The exception is based on the principle of the pursuit of the best interests of the child. The solution aims to remedy shortcomings that emerged, for instance, in the two Purrucker cases.88 In the first Purrucker case, the CJEU denied that the text of Articles 21 et seq. of the Brussels IIbis Regulation could apply to “provisional measures, relating to rights of custody, falling within the scope of Article 20 of that regulation”.89 This conclusion has been maintained in the Brussels IIter Regulation, albeit with the introduction of a narrow exception concerning measures taken in respect of a case involving the wrongful removal or retention of a child. Case law sadly illustrates how these measures are of paramount importance in counteracting risks of irreparable damage. The structure of the system has the advantage of being extremely clear as regards the allocation of jurisdiction and the recognition and enforcement of provisional measures. However, it has been met with criticisms of excessive formalism in a subject that requires attentive scrutiny of the actual family situation involved.90 It is regrettable that the Recast introduces a very narrow exception to the rule – with regard to measures accompanying return proceedings – without following, in this respect, a wise suggestion of Advocate General Eleanor Sharpston in

See also Article 35, para.2, point (c) of the Brussels IIter Regulation (note 2). See para. B.2. 88 CJEU, 15.7.2010, Bianca Purrucker v Guillermo Vallés Pérez, C-256/09, ECR 2010 I-7353, ECLI:EU:C:2010:437 (Purrucker I) and CJEU, 9.11.2010, Bianca Purrucker v Guillermo Vallés Pérez, C-296/10, ECR 2010 I-11163, ECLI:EU:C:2010:665 (Purrucker II). 89 Purrucker I, para. 26. 90 See E. MERLIN, (note 84), passim, regrets the scant attention to the needs of litigants already within the Brussels I system, which may lead a party to seek provisional measures in every country where his or her counterparty may be present or have property. Similar criticisms, but with a focus on family matters, are expressed by C. HONORATI (note 43), p. 71. 86 87

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Ilaria Pretelli the second Purrucker case.91 In that occasion, the AG had stressed that “[a]rticle 20 creates no bar to seising the court having substantive jurisdiction under the Regulation, whose decisions will immediately supersede those taken on the basis of Article 20”.92 Accordingly, in her view there could be no possible “danger of undermining the overall scheme of the Regulation or the general rule conferring jurisdiction on the courts of the Member State of the child’s habitual residence if provisional measures taken in the circumstances set out in Article 20 are recognised or enforced in Member States other than that in which they were issued”93 at least until the baton is passed to the other jurisdiction concerned by the dispute. The lack of any kind of extraterritorial effect, on the other hand, carries the risk that “the efficacy of measures taken [ex Article 20] – which are, by definition, urgently necessary – would be potentially easy to avoid […] if their enforceability were to evaporate as soon as the child was taken across a national border”.94 This being the case, following the experience of EU Regulation 606/2013,95 it would be judicious to establish a specific regime for the recognition and enforcement of provisional and protective measures that affect children, instead of basing a general rule on bad practices experienced in the specific context of parental child abduction.96 At any rate, it should be born in mind that national law incorporates the regime of recognition and enforcement. Thus, even when the EU conditions are not met and the provisional measures would seem not to be enforceable abroad on grounds of the Brussels IIter Regulation, they could nevertheless be enforceable on grounds of the national law of the Member State called upon for the enforcement of the measure. “Where provisional, including protective, measures are ordered by a court having jurisdiction as to the substance of the matter, the circulation of those measures should be ensured under this Regulation. However, provisional, including protective, measures which were ordered by such a court without the defendant being summoned to appear should not be recognised and enforced under this Regulation 91 In Purrucker II, the German judge was hesitant as regards the applicability of the rules on lis pendens between the action brought for provisional measures and the action brought on the merits. 92 Opinion of Advocate General SHARPSTON, 20 May 2010, Bianca Purrucker v Guillermo Vallés Pérez, Case C‑256/09, ECLI:EU:C:2010:296, para. 169 et seq. 93 Ibidem. 94 Ibidem. 95 Regulation (EU) No 606/2013 of the European Parliament and of the Council of 12 June 2013 on mutual recognition of protection measures in civil matters, OJ L 181, 29.6.2013, p. 4. 96 According to A. DUTTA, Cross-border protection measures in the European Union, Journal of private international law, 2016, p. 169-184, p. 180 et seq., a protection measure falling within the scope of the Protection Measures Regulation could constitute an “adequate arrangement” accompanying a return order on grounds of Article 11 para. 4 of the Brussels IIbis Regulation. In that case, such measure would circulate under the Protection Measures Regulation.

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Provisional Measures in Family Law unless the decision containing the measure is served on the defendant prior to enforcement. This should not preclude the recognition and enforcement of such measures under national law”.97 Although Recital 59 of the Brussels IIter Regulation only refers to the availability of national law for the recognition and enforcement of ex parte measures issued by the Court having jurisdiction as to the substance, the measures concerning them should, a fortiori, and in the name of the principle of the best interests of the child, be able to enjoy extraterritorial effect by virtue of the national law of the Member State where the measure needs to be enforced (and subject to the coordination rule that prescribes that the measure expire once the court having jurisdiction as to the substance adopts an incompatible measure).

VI. Conclusions The traditional requirements regarding provisional and protective measures are evoked by continental lawyers by reference to the Latin expressions fumus boni iuris and periculum in mora. Inherited from Roman law, these expressions synthesise the conditions under which provisional and protective measures are traditionally granted. The expression fumus boni iuris reminds the judge to assess whether the case is sufficiently well-founded and corroborated to merit the initiation of protection of the rights involved. Periculum in mora calls for an evaluation of the risk of a danger intervening during the time required for a thorough investigation of the case. Both are the traditional tests for provisional and protective measures. Within the EU PIL Regulations, only Article 20 of the Brussels IIbis and Article 15 of the Brussels IIter Regulations mention urgency as a condition to be met in order for a provisional measure to be granted. From a semantic point of view, “urgency” is a more specific concept than that of a “danger requiring prompt action”. However, a situation may not be urgent and yet require action without delay. It is commonly understood that in every legal matter, be it civil or commercial, the supplementary judicial activity required to address requests for provisional measures would be difficult to justify in the absence of a periculum in mora.98 In other words, a danger in delaying judicial action is an inherent condition for provisional measures. If there is no need immediately to protect the rights involved in the litigation or to prevent a risk that its outcome will be frustrated during the proceedings, the applicant may simply wait for a decision on the merits. As regards the notion of provisional and protective measures, the system constructed by the EU PIL Regulations does not need to differentiate civil and commercial matters from the family matters which are covered by the Brussels IIbis and IIter Regulations. A comprehensive definition of “provisional, including See the first part of Recital 59, Brussels IIter Regulation (note 2). See, extensively, C. CHAINAIS, La protection juridictionnelle provisoire en droits français et italien, Dalloz, 2007, passim. 97 98

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Ilaria Pretelli protective, measures” is able to encompass the measures that are characteristic in family matters, as the taxonomy adopted by the EU PIL Regulations confirms. Such a concept includes all measures granted on the basis of the appearance of a right requiring protection during the lapse of time necessary for a decision on the merits to be issued. Within the current EU international civil procedure, the general rule on provisional and protective measures, common to the EU PIL Regulations in force, prescribes a two-track system of awarding jurisdiction. In principle, the Brussels I system and the Regulations examined in the framework of the present paper are all consistent in prescribing: i) that the court having jurisdiction as to the substance of the case may issue provisional and protective measures; ii) that decisions issuing provisional and protective measures on the basis of the uniform heads of jurisdiction are “decisions” subject to recognition and enforcement abroad; iii) that the rules on jurisdiction on the merits do not prevent the taking of provisional and protective measures by a court not having jurisdiction on the merits, but capable of enforcing the measures within the borders of its own jurisdiction; iv) that the latter court must be empowered with jurisdiction to take the provisional and protective measure under its own domestic law, since the specific rule on provisional and protective measures of the EU PIL Regulations does not create a specific head of jurisdiction for provisional and protective measures; v) that the law applicable to the measures taken in implementation of the specific rule is the lex fori, combined with the specific requirements of the EU system, and the possible taking into account of the lex causae (since ubi lex voluit dixit, ubi noluit tacuit). As regards the Brussels II system, the special target and the consequences of measures falling within its scope, seem to justify a significant exception to the regime summarised above. It is pertinent to recall that the regime designed by the Brussels II systems introduces a subdivision of provisional measures that hinges on their target. In particular, it draws up a specific regime for measures taken in proceedings on child abduction or wrongful removal of children, allowing extraterritorial effect for provisional measures taken in respect of the child. This distinction could be the starting point for a more extensive differentiation between provisional and protective measures targeting credits or property – maintenance obligations, matrimonial property, etc. – and provisional measures that may interfere with the self-determination and freedom of movement of persons, in particular children. In addition, we have argued that the second kinds of measure require the judge to take into due account the content of the lex causae when he or she orders a provisional measure in respect of a child present in their jurisdiction. Both in the Brussels I and in the Brussels II system, the special rule for provisional measures is not intended to add a specific head of jurisdiction to the system. This is rather unfortunate in the case of provisional measures in family matters, especially in light of the continuity of jurisdiction now improving the efficacy of the 1980 Hague Convention proceedings. 146

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Provisional Measures in Family Law Even though theoretically defensible, the distinction made by the Brussels II system between rules allocating jurisdiction and the special rule for provisional measures is somewhat puzzling as to its practical consequences and perhaps unnecessary.99 In point of fact, being autonomous, the procedures for the delivery of provisional and protective measures could have benefited from a head of jurisdiction – as in the Hague Conventions of 1961 and 1996 on the protection of children100 – without impairing the functioning of the system. A clause of coordination, such as those of the aforementioned Hague Conventions, would have been sufficient to avoid strategical misuses of Article 15 of the Brussels IIter Regulation to deflect jurisdiction away from the competent courts. The reciprocal autonomy of provisional justice and justice on the merits has been underlined by the CJEU, in the second Purrucker case.101 Article 19 of the Brussels IIbis Regulation – which deals with lis pendens – is inapplicable in those circumstances because there is no risk of contradictory judgements since the final judgements will override the provisional one. Despite the clarity of this logic, when children and, more generally, when the self-determination and freedom of movement of persons are involved, it is important to open the door to exceptions that may be grounded in fundamental principles such as the best interests of the child and may allow the coexistence of measures of provisional character taken by two courts, provided they are not incompatible. It should also be stressed that, under Article 15 of the Brussels IIbis Regulation, and now under Article 12 and 13 of the Brussels IIter Regulation the two courts involved in the family dispute may agree on which of them shall take responsibility for the decision on the merits. However, “[a]fter the protective measure has been taken, the national court is not required to transfer the case to the court of another Member State having jurisdiction”.102 On the other hand, Article 15 of the Brussels IIbis Regulation needs to gain substantial practical

99 Compare the opinion of Advocate General JÄÄSKINEN, delivered on 4 October 2010, Bianca Purrucker v Guillermo Vallés Pérez, Case C‑296/10, ECLI:EU:C:2010:578, para. 109, and the view of the High Court of Justice Family Division held in Re ML and AL (Children) [2006] EWHC 2385 (Fam), para. 34, both quoting the Practice Guide for the application of the new Brussels II Regulation, drawn up by the Commission in consultation with the European Judicial Network (p. 11). For the terms of the doctrinal discussion on this point see M. PERTEGÁS SENDER, (note 61), at No 251. 100 See supra B.1. 101 CJCE, Purrucker II (note 88), para. 16 and 132: “[W]here a court of a Member State first seised for the purpose of obtaining measures in matters of parental responsibility is seised only for the purpose of its granting provisional measures within the meaning of Article 20 of that regulation and where a court of another Member State which has jurisdiction as to the substance of the matter within the meaning of the same regulation is seised second of an action directed at obtaining the same measures, whether on a provisional basis or as final measures”. 102 CJEU, A. (note 59), para. 65.

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Ilaria Pretelli importance.103 Hopefully the new rules of the recast, and the increased specialisation of judges,104 will make judicial cross-border collaboration in the best interests of children more fruitful.

103 See G. CUNIBERTI/ C. CAMARA, The EU Forum Non Conveniens Rule in Child Care Proceedings Cases Involving Public Bodies, this Yearbook, Vol. 18 (2016/2017), pp. 431-440. 104 See supra (note 38).

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BRAZILIAN PRIVATE INTERNATIONAL LAW SELECTED ISSUES ________________

THE PROCEDURAL HAGUE CONVENTIONS AND THEIR IMPLEMENTATION IN BRAZIL Nadia DE ARAUJO* / Daniela VARGAS** / Marcelo DE NARDI*** I. II. III.

IV.

Introduction International Legal Cooperation in Brazil and The Hague Conference Analyses of The Hague Conference’s Procedural Conventions Adopted by Brazil and their Implementation A. Convention on International Access to Justice B. Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (“Evidence Convention”) C. Convention on Abolishing the Requirement of Legalisation of Foreign Public Documents (“Apostille Convention”) D. Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Service Convention”) Conclusions

* Associate Professor, Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Doctor in Private International Law, University of São Paulo (USP), Masters in Comparative Law, George Washington University. ** Associate Professor, Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Doctor in Civil Law, the University of the State of Rio de Janeiro (UERJ), Masters in Constitutional Law, PUC-Rio. *** Assistant Professor, University of Vale do Rio dos Sinos (UNISINOS), Doctor in Private Law, Federal University of Rio Grande do Sul.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 149-170 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Nadia de Araujo, Daniela Vargas, Marcelo De Nardi

I.

Introduction

1

Legal matters in general, and procedural acts specifically need particular norms to guarantee their effectiveness. The responsibility of States in this area is derived from a duty of cooperation in favour of justice. There is, then, an incentive to codify uniform solutions through international conventions to foster international legal cooperation (ILC), multilaterally, regionally or bilaterally. International judicial cooperation embraces two very different fields. The first involves inter-State assistance during proceedings to perform certain judicial acts abroad, such as service of process or taking of evidence. Also included in this category are rules on access to justice and legalisation of documents. The second field, known as post-trial assistance, addresses the recognition and enforcement of foreign judgments.2 Brazil has a long tradition of international judicial cooperation, and its first regulation on the matter dates from 1847 when Aviso Circular No 1 stated rules for execution of letters of request, also known as letters rogatory.3 Nevertheless, the influence of cooperation has grown steadily since the late 1990s, and it is still increasing in this century. Today, there are large numbers of Brazilian nationals living abroad who need to use instruments of judicial cooperation for daily problems, such as the service of process when they are involved in a judicial proceeding, legalisation of documents, and the recognition and enforcement of foreign decisions. Furthermore, in the criminal field, as money travels electronically, investigators must turn to other countries for tracking assistance. In Brazil, since 1934, all requests for international judicial cooperation were first analysed by the Supreme Court (Supremo Tribunal Federal - STF), which had exclusive jurisdiction over the recognition of foreign judgments, arbitral awards, and all foreign orders when execution in Brazil was requested. In 2004, with the reform of the Brazilian legal system through Constitutional Amendment No 45, jurisdiction over international judicial requests was transferred to the Superior Court of Justice (Superior Tribunal de Justiça - STJ).4 1 This article draws, in part, from N. DE ARAUJO/ D. VARGAS, The Hague Convention of Private International Law: the approximation of Brazil and analyses of the procedural conferences, Arbitration and Mediation Review, Vol. 35, 2012, p. 189. At that time, however, the 1973 Code of Civil Procedure (CPC 1973) was in force and the Conventions were not incorporated in the national legal order. Since 2019, Brazil is a State Party to most of the Conventions analysed and the CPC 2015 is in force. Thus, this is a new analysis of the 2012 article taking into account the material on the topic since the Conventions have been in force. This revision and updating greatly benefited from the invaluable contributions of A.J. ALVES SILVEIRA, Coordinator of the Division of Assets Recovery and International Legal Cooperation (DRCI), of the Ministry of Justice. 2 For a comprehensive introduction to international cooperation, see D. MCLEAN, International co-operation in civil and criminal matters, Oxford, Oxford University Press, 2002. 3 In Brazil, domestic legislation has, since its inception, used the term carta rogatória/ letter rogatory to designate letters of request from foreign jurisdictions. 4 Constitutional Amendment No. 45/2004. At the time, the Superior Court of Justice issued Resolution No. 9, in May 2005, which contained the legal requirements for the

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The Procedural Hague Conventions and their Implementation in Brazil This change was due to the overload of cases before the Supreme Court, a court that needed to focus on constitutional issues only. Therefore, international judicial cooperation would be better dealt with by the court that is also in charge of the application and interpretation of federal legislation. Under the current procedure, just after the STJ grants permission, federal judges of first instance execute the request. This two-step system has advantages and disadvantages: on the one hand, there is greater predictability and uniformity in the decisions, all originating from the same Court; on the other hand, it does not promote speedy compliance with the letters of request. The work of the Hague Conference on Private International Law (the Hague Conference) is widespread, but one of its primary achievements is the elaboration of a bundle of conventions establishing rules of a procedural nature. These conventions have successfully contributed to the codification of various practices, thereby facilitating ILC. The breadth of the subject matter of these conventions spans all areas of international judicial cooperation, ranging from family law to contracts. Since the 1960s, the Hague Conference adopted conventions of a procedural nature with a large number of ratifications; one example is the Convention on Abolishing the Requirement of Legalisation, which is in force in 117 States.5 One of the characteristics of the Hague Conference is its development, through the years, of a wealth of expertise in the analysis of post-convention implementation. It is a development that contributes to the optimal application of its instruments, setting the Hague Conference apart from other international organisations. In this sense, there is a sharp contrast with regional organisations, such as the Organization of American States (OAS) – of which Brazil is also a member recognition of foreign judgments and arbitration awards in Brazil, as well as the granting of exequatur to letters of request, and was in force until the final approval of its Internal Rules in 2015. Later, with the enactment of the 2015 Code of Civil Procedure, most of these rules were incorporated in the new law, Title II, chapter II, dedicated to International Cooperation. It is important to explain that until the Constitution of 1988, the Supreme Court had jurisdiction over all matters in the so-called third instance, the right to review any threats to the Constitution and to Federal Law. Although Brazil is a federal system, all legislation in civil and criminal matters is federal (thus the system can be called national). The states’ legislative power is very limited, unlike in other systems, such as Canada and the United States. The 1988 Constitution created a new Court, the Superior Court of Justice, which has taken over some of the jurisdiction for review in matters of Federal Law from the Supreme Court. With the 2004 amendment 45, additional jurisdiction of the Supreme Court has been transferred to the Superior Court of Justice in order to lighten the Supreme Court’s burden. The aim was that the Supreme Court would finally become a true Constitutional Court, dealing with constitutional questions only. All decisions cited in this paper can easily be accessed by their class and number directly at both courts’ websites: that of the Supreme Court is available at ; that of the Superior Court of Justice is available at . Research through these websites is easy and reliable, and full text of all decisions is also available. The key word to research case law is “jurisprudência”. A word in the decision or the type or number of the decision will then reveal the case. 5 As at 12 September, 2018. Available at .

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi and a party to multiple conventions – where there is no follow-up on the practical results of the many Inter-American conventions on private international law adopted under the CIDIPs acronym. If the OAS showed the same concern as the Hague Conference with the efficient use of its conventions through the establishment of regular follow-up meetings, the regional conventions would be more widely known and met with greater enthusiasm by those tasked with their application. We believe the Hague Conference’s support of its conventions offers notable positive aspects to the understanding and utilisation of said conventions, and the existence of a permanent follow-up has been an excellent tool for publicity and implementation. Brazil will undoubtedly benefit from this expertise in its future use of these instruments, and can also contribute to future discussions. For example, there is a current discussion at the Hague Conference on the use of information technology to support and improve the operation of the Service and Evidence Conventions.6 Brazil has a large experience in informing parties about their cases through electronic means, as today most cases before the judiciary are paperless and official communications are conducted electronically. As a final note to this introduction, it is important to highlight that Brazil was a member of the Hague Conference from 1971 to 1977, when it abruptly ceased to participate in the Conference and denounced the statute of the Hague Conference. In 1998, the Brazilian Congress once again approved the statute of the Hague Conference, but Brazil only reinstated its participation in the proceedings as a member in November 2001.7 Since its return to the Conference in 2001, Brazil has engaged in the negotiations of multiple conventions. It contributed actively toward the Hague Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance and its Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations. Recently, it supported and participated in the Special Commission on the Judgments Project, in addition to its contributions to individual meetings.8 Brazil has also been active in follow-up sessions on the adopted conventions. It is noteworthy that this active participation has resulted in Brazil’s ratification of a relevant number of Hague conventions, including the most important ones on procedural matters. The first convention of the procedural group, ratified by Brazil in 2011, was the Convention on International Access to Justice, still under the 1973 Code of Civil Procedure.9 In 2015, Brazil enacted a new Code of Civil Procedure, which See Preliminary Document No. 9, available at . 7 As an observer, Brazil participated in the proceedings for the International Convention on Adoption, which entered into force by Decree 3’087, of 1999. Decree 3’174, of 1999 organised the national institutions entrusted with the matter. 8 On the topic, see N. DE ARAUJO, The Project on the Convention on Maintenance Obligation of the Hague Conference: analysis and results of the Brazilian participation, RDE n6, 2007. Also on the Convention, see N. DE ARAUJO, Private International Law: theory and practice in Brazil, 7th ed., Sao Paulo: RT, 2018. 9 The convention on Access to Justice was ratified by Brazil in November of 2011 and entered into force through Decree 8343 of November 13, 2014, with a reservation to the second paragraph of article 7, regarding the use of English and French as default languages. 6

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The Procedural Hague Conventions and their Implementation in Brazil contains an entire section on international judicial cooperation, for the first time in a Brazilian procedural code. In 2016 and 2017, already under the new 2015 Code of Civil Procedure, two other Hague conventions entered into force in Brazil: the 1970 Convention on the Taking of Evidence Abroad in Civil and Commercial Matters;10 and the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, also known as the “Apostille Convention,” signed in The Hague on 5 October, 1961.11 The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of 15 November, 1965, was ratified in 2018.12 This paper focuses on four of the Hague Conference’s procedural conventions adopted by Brazil, as well as their domestic implementation.

II.

International Legal Cooperation in Brazil and The Hague Conference

One of the most relevant contributions of the Hague Conference to ILC was the introduction of the concept of central authorities. This innovation in the field of cooperation, included in recent conventions, seeks to foster expeditious operation. In Brazil, since the 18 February, 2004 enactment of Decree 4’991, the Ministry of Justice’s Department of Assets Recovery and International Legal Cooperation (DRCI) has fulfilled the role of a central authority.13 Article 26 of the 2015 Brazilian Code of Civil Procedure (CPC 2015) recognised the central authority as a crucial element for international cooperation. This same article designates the Ministry of Justice as the central authority by default, in the absence of any designated authority, while Article 31 highlights its prominence in the “legal handling and execution of the cooperation requests sent and received by the Brazilian State, in accordance with the specific provisions of the treaty.” The growth of cases involving international situations in the country led to increased activity in the legislative, judicial and doctrinal areas, with the goal of perfecting mechanisms for ILC. 14 The unfolding of case law in Brazil, particularly Promulgated by Decree 9039, of 27 April, 2017. Promulgated by Decree 8’660, of 29 January, 2016. 12 Legislative Decree 153, published on 20 December, 2016. International entry into force for Brazil on 1 June, 2018. Available at . 13 Article 11, Decree 6’061/2007. There are, however, other designated authorities for conventions ratified before 2004. One of the few examples of cooperation where the Ministry of Justice is not the central authority is the New York Convention on Maintenance Obligations. The General Prosecutor’s Office acts as issuing and intermediate authority in a role similar to that of the central authority. 14 For a recent publication, see Cooperação Jurídica Internacional, organised by FABRICIO BERTINI PASQUOT POLIDO, which contains several articles on the topic, published by Revista dos Tribunais, SP, in 2018. 10 11

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi at the STJ has been vital to develop new criteria on the topic that were not expressly provided by the law. The CPC 2015, in turn, reveals how the legislature is adapting to the demands of the times as it has a comprehensive chapter that regulates exclusively international judicial cooperation (Title II, Chapter 2, Articles 26 to 41). It has encouraged most of the developments achieved through the years of active labour in the field by the STF and later the STJ. Thus, the current legislation is in line with case-law in the area. Article 26 of CPC 2015 consolidated the principles directing Brazil’s ILC passive or active conduct.15 Its item I marks Congress’ concern with ensuring that requests emanating from a foreign State follow the dictates of due process of law, incorporated as a fundamental right in Article 5 of the Brazilian Constitution. The express reference to procedural guarantees in that article delineates the principles to be followed in ILC, thereby incorporating the only obstacle to requests received from abroad if all formal requisites are in place: the manifest violation of public policy. A recent decision by the STJ highlights the Court’s understanding of this notion. In a case disputing recognition of a foreign judgment, the Court evidenced its concerns with the guarantees of due process.16 As previously mentioned, the designation by the CPC 2015 of the Ministry of Justice as the central authority (Article 26, paragraph 4) demonstrates the T. ARRUDA ALVIM/ D. FREDIE Jr., (eds), CPC Brasileiro Traduzido para a Língua Inglesa. Salvador: Ed. Juspodivm, 2017, Chapter II - International Cooperation, Section I General Provisions, Art. 26: “International legal cooperation shall be governed by treaties to which Brazil is a signatory and shall observe: I –the guarantees of the due process of law in the requesting State; II – equality of treatment of nationals and non-nationals, resident or not in Brazil, with regard to access to justice and the handling of the lawsuits, assuring legal aid to the indigent; III – the public nature of proceedings, except in cases of confidentiality as provided for in Brazilian statutory law or in that of the requesting State; IV – the existence of a central authority to receive and send cooperation requests; V – spontaneity in the transfer of information to foreign authorities. § 1 In the absence of a treaty, international legal cooperation can take place on the basis of reciprocity, expressed by diplomatic means. § 2 The reciprocity mentioned in § 1 shall not be required for the recognition of a foreign judgment. § 3 The practice of acts contrary to, or producing results that are incompatible with, the basic rules that govern the Brazilian State, shall not be allowed for the purposes of international legal cooperation. § 4 The Ministry of Justice shall perform the functions of the central authority in the absence of a specific appointment.” 16 SEC 10’076, decided on 20 May by the Special Chamber. In the recognition proceedings, the requested party claimed offence to public order due to a default judgment in a suit at law in the United Kingdom. They argued that they were not party to the original proceedings due to lack of funds to travel to the United Kingdom, affecting their right to proper legal representation and defence. The SJT understood that in the recognition proceedings in Brazil there is no discussion on the merits: “the formalities of the decision are examined, in light of fundamental principles so as to ascertain if the proceeding were fair, which encompass: respect to due process, legality of the acts in the proceedings, respect of fundamental human rights, harmony with traditions.” In the case, defendants were properly served by letters of request to defend themselves in the foreign jurisdiction. M. B. GONCALVES noted that there was no notice in the foreign judgment of any requests for exemption of costs, neither in the foreign court nor to the judge that executed the service. Thus, the STJ ruled that the default judgment was legally rendered by the United Kingdom court and did not violate due process or public order. 15

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The Procedural Hague Conventions and their Implementation in Brazil domestic advances in regulating ILC. These functions have been centralised in the Ministry of Justice since 2004 when the DRCI, created by Decree 4’991/2004, was commissioned to act as the central authority in ILC in civil and criminal matters. The Interministerial Decree 501 of 2012, which designated the roles of the Ministries of Justice and of Foreign Affairs, also defined the DRCI’s attributions regarding letters of request and direct assistance.17 In a 10-year review of its activities in 2014, the DRCI found that there were over 40’000 requests of ILC between Brazil and other countries.18 Of those, about 26’700 were in civil matters, with an emphasis on family and business partnerships. ILC relies, for its very conception, on the international normative framework, whether multilateral or bilateral. For this reason, among others, it is quite positive to see in the CPC 2015, Article 13,19 at the very beginning of chapter II, the remark that treaties will have precedence over domestic regulations. This article guides the interpretation in case of conflicts between new laws and conventions adopted by Brazil, since, as is well known, local procedural law is immediately applicable, including to pending cases.20 The abovementioned Article 13 is in line with the Vienna Convention on the Law of Treaties (Vienna Convention), promulgated by Decree 7’030 of 2009. A part of the United Nations Commission on International Law’s agenda from the end of the 1940s and finalised in 1969, the Convention entered into force in 1980 and is currently adopted in 113 countries.21 Until the entry into force of the Vienna Convention in the Brazilian domestic legal order, the State had no specific statutory provisions to deal with treaty interpretation. Thus, for a long time, case law from the STF, and later from the STJ, occupied a prominent position in the formulation of guidelines to solve conflicts between international treaties and domestic law.22 Doctrinal studies represented a secondary law source on the matter.23

Published in 23 March, 2012 in the official register. DRCI 10 years. Activities related to the optimisation of ILC and the combat of corruption and money laundering. Justice Department. Available at . 19 Art 13 CPC 2015. Civil proceedings shall be governed by Brazilian procedural rules, with the exception of specific provisions set forth in international treaties to which Brazil is a signatory. 20 For comments on the CPC 2015, see N. Jr. NERY/ R.M. DE ANDRADE NERY, Comments on CPC, Sao Paulo: RT, 2015; N. DE ARAUJO/ L. GAMA/ D. VARGAS, Topics on Private International Law in the New CPC. Revista de Arbitragem e Mediação, Vol. 28, 2011, p 147 et seq. See also N. DE ARAUJO, Private International Law: Theory and Practice in Brazil, 7th ed., Sao Paulo: RT, 2018. 21 More information available at . 22 For a thorough discussion on the matter of conflict-of-laws between domestic provisions and international treaties, see N. DE ARAUJO, Private International Law: Theory and Practice in Brazil, 7th ed., Sao Paulo: RT, 2018. 23 N. DE ARAUJO. Private International Law: Theory and Practice in Brazil, 7th ed., Sao Paulo: RT, 2018. 17 18

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi The Vienna Convention’s entry into force modified this legal framework. Thus, today, the interpretation of treaties and their implementation in Brazil cannot ignore the Convention’s regulation as this international document brought specific rules on the topic to the Brazilian legal system.24 So, the interpretation of the meaning and applicability of treaties in force in Brazil must be made considering the provisions of part III of the Vienna Convention25 dealing with observance, application, and interpretation of treaties. However, it is worth noting that the Vienna Convention codified customary international laws that were already the practice by the States. Article 27 of the Vienna Convention is of utmost importance for the correct observance of rules contained in treaties as it precludes States from invoking domestic law rules if they contradict a treaty rule.26 Given Article 27 of the Vienna Convention and Article 13 of CPC 2015, the regulations of treaties must take precedence in case of conflict with domestic law. The STF has a further noteworthy concern with establishing a cohesive pattern of criteria for reconciling contradictions in the domestic legal system resulting from conflicts between treaty and national law. In RE 636,331,27 the STF ruled that regular standards for conflict-of-laws would apply since treaties and ordinary legislation were in the same hierarchy. According to Justice GILMAR MENDES, instead of the chronological rules, the specificity criterium should prevail on the interpretation of treaties about air transportation, which are to be considered as lex specialis, according to Article 2, paragraph 2, of Law of Introduction to Brazilian Rules (LINDB). He highlighted in his opinion that “both regulations coexist in the Brazilian legal order, the [national law] giving way whenever the relationship results from a contract of international air transportation.”28 24 At the STJ, there are few cases in which the Vienna Convention was taken into account. It is worth mentioning the Peticao de recurso especial (REsp) 1174235, of 2010, opinions by Justice HERMAN BENJAMIN, citing Art. 31.3 of the Vienna Convention. Available at . 25 Articles 26 to 33. 26 In this regard, see Recurso especial (REsp) 1,325,709, opinion by Justice NAPOLEÃO NUNES MAIA FILHO, decided on 24 April, 2014, citing Article 27. Here is the summary text: “6. Article VII of the Model Treaty on Income and Capital from OECD used by the majority of the Western countries, including Brazil, as seen in International Taxation Treaties celebrated with Belgium (decree 72,542/73), Denmark (Decree 75,106/74) and the Principality of Luxemburg (Decree 85, 051/80) establishes that the profits of a corporation in a contracting State are taxed in this State, unless the corporation operates in the other contracting State, through a permanent seat of business or subsidiary; moreover, the Vienna Convention establishes that a party cannot invoke its domestic laws to justify disobeying a treaty obligation (art 27) in harmony with the grounding principle of good faith.”. Available at < https://stj.jusbrasil.com.br/jurisprudencia/25092296/recurso-especial-resp-1325709-rj2012-0110520-7-stj/inteiro-teor-25092297>. 27 Recurso extraordinário (RE) 636,331, opinion by Justice GILMAR MENDES, decided in 2017. More information available at < http://www.stf.jus.br/portal/processo/ verProcessoDetalhe.asp?incidente=4040813>. 28 RE 636’331, p. 10.

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The Procedural Hague Conventions and their Implementation in Brazil Following these Brazilian judgments, we may safely say that, should incompatibilities with CPC 2015 arise, the treaties shall prevail. Moreover, combining Article 13 with the head of Article 26 of CPC 2015, whereby ILC “will be governed by treaties to which Brazil is a signatory…,” it becomes clear that the legislative emphasis was apparently to give prevalence to the joint initiative in the international sphere. We may conclude that the CPC 2015’s stipulation goes in the direction of amplifying ILC, conferring it a paramount role in the new domestic legislation.29 These rulings affect the analyses of the conventions examined here. Each of the conventions has an explanatory report, which, over time, ends up playing the role of an additional interpretative instrument. The report often brings information on the proceedings’ debates and the position of States throughout the negotiations, which helps clarify the international mens legis.

III. Analyses of The Hague Conference’s Procedural Conventions Adopted by Brazil and its Implementation A.

Convention on International Access to Justice

The Convention on International Access to Justice opened for signature in 1980 and entered into force in 1988.30 Article 1 establishes, as its goal, that nationals and residents in a contracting State, regardless of nationality, shall have legal assistance for court proceedings in civil and commercial matters under the same conditions as nationals or residents of the country in which aid is sought. That is, the Convention is not concerned with the domestic rules of each State regarding access to justice; it merely aims to equalise the application of norms related to the topic.

29 CPC 2015, Article 26: “International legal cooperation shall be governed by treaties to which Brazil is a signatory and shall observe: I – the guarantees of the due process of law in the requesting State; II – equality of treatment of nationals and nonnationals, resident or not in Brazil, with regard to access to justice and the handling of the lawsuits, assuring legal aid to the indigent; III – the public nature of proceedings, except in cases of confidentiality as provided for in Brazilian statutory law or in that of the requesting State; IV – the existence of a central authority to receive and send cooperation requests; V – spontaneity in the transfer of information to foreign authorities. § 1 In the absence of a treaty, international legal cooperation can take place on the basis of reciprocity, expressed by diplomatic means. § 2 The reciprocity mentioned in § 1 shall not be required for the recognition of a foreign judgment. § 3 The practice of acts contrary to, or producing results that are incompatible with, the basic rules that govern the Brazilian State, shall not be allowed for the purposes of international legal cooperation. § 4 The Ministry of Justice shall perform the functions of the central authority in the absence of a specific appointment.”. 30 More information available at .

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi Its function complements other conventions of a procedural character, such as the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, by imposing a rule of non-discrimination, thus creating a set of norms in favour of ILC. There is a great concern with the practical aspect of matters related to legal aid, so the Convention created a mechanism for the analysis of requests through a system of national authorities charged with their processing (Articles 3 and 4). It deals with the possibility of the applicant being absent from the requested State by establishing other means for processing the request by utilising appropriate forms (Article 5); also, it creates rules about the documents needed for applications (Article 17). It further regulates the translation of documents (Article 7), a thorn in the processing of applications because of high costs and establishes the exemption of charges for the legalisation of documents, court filing fees, and similar expenses. One of the advantages of adopting the Convention is the exemption for nonpermanent residents in Brazil to provide for bonds to file court proceedings pursuant to Article 14, superseding Article 83 of CPC 2015, which requires such a bond for non-residents who do not own property in the country. Paragraph 1, I of Article 14 dismisses the need for bonds where exemptions are established by a treaty to which Brazil is a party. Brazil recognises this exception for residents of Mercosul, considering the provisions of the Las Leñas Protocol, Article 4, and other bilateral agreements.31 The exemption at Article 14 represents, thus, a special rule, applicable to contracting States to the Convention. It, therefore, creates an exception to the general rule of Article 83 of CPC 2015, which continues to be relevant for parties of non-contracting States. Another critical aspect of the Convention for Brazil is the possibility of obtaining reciprocity abroad for Brazilian nationals and residents, similar to what In the sphere of Mercosul, the Protocol of Las Leñas, the Treaty of International Cooperation and Legal Assistance in Civil, Commercial, Labour and Administrative Matters between the States of Mercosul, the Republic of Bolivia and the Republic of Chile, updated in 2009 in Brazil by Decree 6,891, establishes parity of treatment between citizens and individuals from the member states. In the sphere of bilateral treaties, there are provisions for legal aid in the following documents: Argentina: Convention on Legal Aid, signed in Buenos Aires on 15 January, 1961, promulgated by Decree 62’978, of 11 June, 1968, Article 1; and treaty of Legal Cooperation in Civil, Commercial, Labour and Administrative Matters, signed in Brasília on 20 August, 1991, promulgated by Decree 1’560 of 18 July, 1995. In this latter one, Article 1 extends legal aid to administrative proceedings; Spain: Agreement on Legal Cooperation in Civil Matters, signed in Madrid on 13 April, 1989, promulgated by Decree 166 of 3 July, 1991 Articles 34 to 36, with Article 35 making express reference to bonds; Italy: Treaty on Legal Cooperation, Recognition and Execution of Judgments in Civil Matters, signed in Rome on 17 October, 1989, promulgated by Decree 1’476 of 2 May, 1995, Articles 9 and 10; Netherlands: Convention on Legal Aid, signed in Rio de Janeiro, on 16 March, 1959, promulgated by Decree 53’923, of 20 May, 1964, Article 1; Portugal: Convention on Legal Aid, signed in Lisbon on 9 August, 1960, promulgated by Decree 26 on 25 October, 1963, Article 1; Uruguay: Agreement on Legal Cooperation in Civil, Commercial, Labour and Administrative Matters, signed in Montevideo on 28 December, 1992, promulgated by Decree 1’850 on 10 April, 1996, Articles 1, 21 and 22, the latter expressly referring to bonds. 31

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The Procedural Hague Conventions and their Implementation in Brazil is now offered to foreigners who need legal aid in the country. Article 98 of CPC 2015 guarantees free access to justice to natural and legal persons, and Brazil has a rule that ensures full legal assistance in civil matters to those in need through the work of its Public Defender’s Office at the federal and State levels.32 Such guarantees are not as widespread in other countries. In Brazil there are public defenders for civil matters, including family court issues, as well as for criminal cases. In many countries, there are no systems of legal aid outside the criminal jurisdiction, while the majority of cases under the Convention deal with family matters, where many do not have the resources to afford the high costs associated with transnational litigation.33 Thus, a Brazilian resident abroad might not have the same level of legal aid as at home. Another important feature of the convention is that it led to a close collaboration between the DRCI, acting as the central authority, and the Federal Public Defender’s Office, assisting those in need. The two departments signed a joint memorandum of cooperation34 to handle the requests, which also relates to other treaties where there is the possibility of additional collaboration through non-diplomatic channels. In the sphere of post-convention follow-ups, developed by the Conference, the current Convention is always examined in connection with the Convention on the Taking of Evidence Abroad in Civil and Commercial Matters and the Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil and Commercial Matters. The Hague Conference held two special commissions on the topic: in 2009 and in 2014. The first special commission noted three issues after reviewing data from an extensive questionnaire sent to the contracting States. The first was its inapplicability to legal persons. The second, the need for literal interpretation of the word “presence”, at Article 2 of the Convention. Finally, the formulation of Article 14 brings uncertainty as to who is exempt from the obligation of offering guarantees for procedural expenses. As a recommendation, a feasibility 32 The Public Defender’s Office in Brazil provides legal aid and is organised at the State and federal level. The Public Defender is a public officer, with a career similar to that of the Prosecutor and Judiciary. A person who cannot pay for a lawyer can resort to the Public Defender in all areas of the judiciary, both criminal and civil, including in family law cases. For example, in the Hague Convention on Child Abduction, the Federal Public Defender will assist any party that cannot have counsel and there is no need to pay for it. It is different from a pro bono case, where the person assisted depends on the goodwill of assigned attorneys. 33 The Ministry of Justice, through its Department of Assets Recovery and International Cooperation/DRCI is concerned with the topic and organised two capacity building seminars on the cooperation between governmental bodies involved in International Legal Cooperation and access to legal aid. 34 Joint Memorandum of Understanding 231 of 17 December, 2015 between the Secretary of Justice and the Public Defender’s Office. It is worth noting the memorandum contains multiple annexes with forms to request cooperation. Annex II follows the template created by the Convention. The section dedicated to the Convention outlines a path for the processing of the model forms, including the option of downloading the original forms, required for the communication of requests between central authorities of parties to the Convention.

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi study for providing legal aid in some instances such as small claims or uncontested procedures was suggested. These topics, however, remain unresolved since they were not addressed by the special commission of 2014 or after.35 B.

Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (“Evidence Convention”)

This convention raises the largest number of issues in the category of procedural conventions under study, despite being considered one of the most successful if measured by the number of countries that use it. The Hague Conference works continuously on the revision of its operation.36 The Convention applies only between contracting States and has the added merit of reducing differences between Civil and Common Law countries.37 The Convention is divided into three parts: the first deals with letters of request and central authorities; the second is about the taking of evidence by diplomatic officers, consular agents and commissioners; and, the third, refers to general rules, especially the issue of pre-trial discovery.38 There are two ways of obtaining evidence abroad: employing a) letters of request or b) acts by diplomatic, consular or commissioned authorities. The Convention is limited in operation to civil and commercial matters. Letters of request can be transmitted through central authorities already designated as such, and competent authorities may request them. Such letters can only be used in proceedings as described in their scope of application. Article 3 lists the contents that the letters of request shall specify. Article 4 includes the obligation to translate the documents to the language of the requested State unless the contracting State issues a declaration accepting documents in French or English.39 Proceedings in the requested State follow domestic law, and several rules intend to facilitate communication between central authorities regarding the execution of letters of request. In the case of Brazil, the system of the previous exequatur must be followed, even with the convention in force. Thus, once a letter of request comes Conclusions and Recommendations of the Special Commission on the Practical Operation of the Hague Apostille, Service, Taking of Evidence and Access to Justice Conventions, 2nd to 12th February 2009. Available at . 36 Multiple meetings examined issues coming out of its utilisation and made suggestions to improve its operation. Furthermore, a manual called Practical Handbook was elaborated by the Secretariat and Member States, recently revised with the participation of the Brazilian Central Authority DRCI. 37 D. MCCLEAN, International Co-operation in civil and commercial matters, Oxford, Oxford University Press, 2002, chap. 4. 38 On this specific topic, Brazil made a declaration pursuant to Article 23, whereby letters of request addressed to Brazil in pre-trial discovery will not be executed. See Article 1, Decree 9,039/2017. 39 Brazil has not issued this declaration. 35

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The Procedural Hague Conventions and their Implementation in Brazil from abroad, it will still need to be submitted to the STJ before its effective execution by a Federal Judge.40 One of the advantages of the Convention is the reduction of costs since, according to Article 14, no fees shall be charged except for translators and experts, and costs associated with special procedures requested by the State of origin. Still, under paragraph 3 of Article 14, there are cases in which the requested authority needs to appoint a third party to execute the order, with the consent of the requesting authority. In those instances, charges are allowed, if consent is provided. Chapter II, in dealing with the taking of evidence by diplomatic officers, consular agents and commissioners, establishes a system that is unfamiliar for most countries of the Civil Law tradition, where such acts are exclusively reserved to judicial authorities. The proceedings must respect the lex fori of the State of execution. An example where the lex fori is paramount is when the request touches upon a right protected by the Constitution as a fundamental right. It has long been established by the STF and STJ that a letter of request for a DNA test of a Brazilian resident or national can only be processed with the person’s permission. To allow the test without consent would be a breach of the right to privacy. Thus, if the person refuses to be tested, the request cannot be met.41 Another difference between the Common Law systems and the Civil Law systems is that the courts of the former routinely accept the taking of evidence by diplomatic, consular or commissioners acting in place of a judge, while the courts of the latter have a monopoly over these procedures. In Brazil, considering the inadmissibility of the taking of evidence through diplomatic channels, the reservation to Article 33 prevents such procedures. Finally, Part III, Article 23 deals with evidence by documents obtained for pre-trial discovery purposes. This procedural mechanism is widely applied in the United States of America for the taking of evidence. It can either occur before or after the filing of any legal proceedings.42 In Brazil, there is no similar mechanism, and parties can only request from each other documents that are known to exist. The limitation contained in Article 23 applies to documents, but not to all kinds of 40 The CPC 2015 makes an exception to the need for exequatur in case the request for cooperation does “not arise directly from the decision of the foreign court” (Article 28) or when it is a matter of “the performance of acts which do not require judicial relief” (Article 32). In these cases, the central authority DRCI will adopt the necessary measures to execute the request. If a court decision is necessary to execute the cooperation request, the central authority (DRCI) will send it directly to the Attorney General’s Office (AGU), who will file the necessary court papers for direct cooperation (Article 33, CPC 2015). In the experience of the Brazilian central authority (DRCI) Article 32 is the most frequently used, particularly on requests for information about the Brazilian legal system that are prepared by the Attorney General’s Office, to obtain non-judicial documents and documents from public records, as well as to locate individuals for service. 41 See CR 2362, opinion by Justice BARROS MONTEIRO, to a letter of request from Portugal, decided in 2007. 42 Brazil does not have a similar mechanism, although it is possible to request the production of evidence by way of an autonomous request, under Articles 381 to 383 of CPC 2015.

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi evidence, signalling a restriction in the scope of the pre-trial discovery. Even with such a limitation, in tandem with our legal system, Brazil took the declaration aforementioned and will not execute letters of request seeking to obtain documents for pre-trial discovery. In the debates at the National Congress, it was underlined that Brazil’s accession to the Convention was justified by both the growth of Brazilian communities abroad and the need to fill the void caused by many contracting States refusing to negotiate bilateral treaties on the matter under the rationale that they preferred the multilateral instrument.43 The Convention on the Taking of Evidence was promulgated by Decree 9’039, of 27 April, 2017. The Convention’s ratification and entry into force in Brazil observed some reservations and declarations proposed by the Ministries of Justice and Foreign Affairs, considered by the legislature when approving it. They seek to better adapt the instrument to the domestic legal system as follows:44 a) reservation concerning paragraph 2, Article 4 according to Article 33: all letters of request issued to Brazil shall be accompanied by a Portuguese translation; b) declaration about Article 8: judicial authorities from the requesting State may attend to the execution of letters of request in Brazil if there is an authorisation by the Brazilian authority in charge to execute them; c) reservation to chapter II (Articles 15 to 22): Brazil does not abide by the system of the taking of evidence by commissioners without compulsion or the taking of evidence by diplomatic officers, consular agents or commissioners with constraint; d) declaration about Article 23: Brazil declares that it will not execute letters of request issued with the goal of obtaining what is known in common law countries as “pre-trial discovery of documents.”45 Thus, with the reservations and declarations to articles conflicting with domestic law, the Convention entered into force for Brazil. The establishment of communication by central authorities and the absence of costs observed in the majority of cases will bring expediency to these proceedings and will be invaluable in promoting ILC and facilitating the taking of evidence abroad. Brazil´s STJ has already applied the Convention on Taking of Evidence in a case where there was a request from a court of the USA. It granted exequatur and 43 The rapporteur of the Commission on Foreign Relations and National Security, senator ANIBAL DINIZ (PT-AC), recommended the approval of the matter according to the terms he presented. Thus, Brazil would not be obligated to receive letters of request in languages other than Portuguese. Moreover, legal authorities in a requesting State may assist in the fulfilment of a letter of request in Brazil, if there is an authorisation by the authority entrusted with honouring it. ANIBAL DINIZ’s text further establishes that Brazil is not required to execute letters of request issued with the intent of obtaining what is known in Common Law countries as pre-trial discovery documents. The text of the legislative Decree followed the recommendation and, as a result, the promulgation Decree preserved the same language. 44 See article 1, Decree 9039/2017 and the relevant annex. 45 Available at .

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The Procedural Hague Conventions and their Implementation in Brazil authorised taking of documentary evidence in possession of a federal criminal court in Brazil. An objection to the exequatur had been raised on the basis of the Brazilian declaration pursuant article 23 of the Convention, but the STJ has rejected the argument of the request coming from discovery pre-trial proceedings, and not identifying any abuse or unlawful conduct.46 Since its entry into force, the DRCI, the Central Authority to the Convention, has received many requests by contracting States. In the cases of active cooperation, Brazil has made available the forms for requests emanating from its authorities.47 For the application of this Convention, according to Article 39, paragraph 4, it is necessary that each contracting State accepts the accession of a new contracting State. That means that, at the present moment, the Convention applies only to cases involving Brazil and those contracting parties that have accepted Brazil’s accession.48 As for the post-convention work by the Hague Conference, the Taking of Evidence Convention is examined together with the Access to Justice and the Service Abroad Conventions. The last two special commissions on the topic happened in 2009 and 2014. The recommendations of 2014 dealt with numerous issues relating to the Convention’s application. One topic was that of the “bilateral” nature of accession established by Article 39, paragraph 4, providing that contracting States shall act on a bilateral basis in the relationship with acceding States. It also recommended more significant use of its forms, and adopted the interpretation that the reasons for refusal to execute a request of paragraph 1, Article 12 and Article 23 are exhaustive. As for the future of the Convention, the special commission, following a proposal by the Australian delegation, recommended the establishment of a group of specialists to explore the feasibility of taking of evidence through video conferencing within the scope of the Convention. The Counsel for General Affairs created a Group of Experts for that issue, whose report was adopted in 2016. The Counsel further recommended that the Secretariat establish a small sub-group tasked with preparing a Guide to Good Practice on the Convention, the work for which was still underway in 2018.

46 See CR 13559, decision by the STJ President, M. João Otávio de Noronha, judgment in March, 2019. 47 Form available at . 48 The updated list of States that have accepted other States’ accessions is available at . On information provided by ARNALDO SILVEIRA, the United States of America receives Brazilian requests, even though it has not yet formalised acceptance.

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi C.

Convention on Abolishing the Requirement of Legalization for Foreign Public Documents (“Apostille Convention”)

The Apostille Convention is one of the oldest and most used instruments elaborated by the Hague Conference. It does not hold the allure of the other ones, as it does not contain specific Private International Law rules or special rules that lend to doctrinal studies. Nonetheless, it is vital for ILC as there is always a document that needs to be validated in one country to be used in another, be it for a court of law or a public authority. The goal of the Convention is to facilitate the circulation of public documents from a contracting State to another, by abolishing the need for legalisation.49 Its Article 1 lists the public acts that it encompasses as well as the exceptions, and its Article 2 defines legalisation. The Convention establishes a system whereby the State issuing the document attests to its authenticity, relieving further measures (Article 4). To this end, the Convention creates a certificate – in its French name “Apostille.” Authorities with the power to issue such licenses are previously designated (Article 6) and must keep a public record of their work. According to the report of YVON LOUSSOUARN, the Convention did not want to abolish the validation systems existing in contracting States. On the contrary, it sought to create a simple system with only one verification in the State from which the document emanates, resulting in an Apostille to the document.50 On the other hand, to avoid fraud, it created a registry of the competent authorities able to offer information to those interested in the apostilled certificate, guaranteeing the authenticity of the system. The Convention thus facilitates the circulation of documents, particularly when the document comes from a country that does not have a system of legalisation and is aimed to be used in another, where legalisation is required. To be the object of an apostille the document must be public, that is, issued by a competent authority in a contracting State: for example, birth or marriage certificates, commercial registry entries, academic diplomas, etc. Certificates that refer to other documents may also be apostilled. Moreover, the Apostille Convention allows for the legalisation of private documents with notarised signatures. In the past the Brazilian system of legalisation was dependent on diplomatic legalisation. The Apostille is very useful, for 49 One important delimitation for the Convention’s application is its list of public documents in Article 1: “The present Convention shall apply to public documents which have been executed in the territory of one Contracting State and which have to be produced in the territory of another Contracting State. For the purposes of the present Convention, the following are deemed to be public documents: a) documents emanating from an authority or an official connected with the courts or tribunals of the State, including those emanating from a public prosecutor, a clerk of a court or a process-server (“huissier de justice”); b) administrative documents; c) notarial acts; d) official certificates which are placed on documents signed by persons in their private capacity, such as official certificates recording the registration of a document or the fact that it was in existence on a certain date and official and notarial authentications of signatures.” 50 Available at .

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The Procedural Hague Conventions and their Implementation in Brazil instance, to guarantee the authenticity of a power of attorney. Taking into account that the use of notaries is not widespread in Common Law countries, the Convention allows documents issued in those countries to be apostilled for use in another, where the demand of notarisation could have created problems for the parties. The establishment of a system of uniform apostilles in all contracting States is one of the significant advantages of the Convention. The effect of the apostille is to ensure the signature’s authenticity as well as the capacity of the authority that issued the document. The apostille does not certify the integrity of the material or substantial content of the document, but only the authority in the State of origin that enacted it. The system of the Convention is compatible with Brazilian law. Its adoption brought tremendous advantages to the country with the elimination of consular certification of documents destined to produce effects in another contracting State, thereby facilitating ordinary citizens’ and corporations’ lives, as the old system was costly and time-consuming. The Hague Conference has promoted, in the past years, great modernisation of the Convention through the implementation of an electronic system of apostilles and registers called e-APP. There were no alterations to the Convention’s rules with this measure, and the resources for the implementation of the e-APP system are available to the competent authorities without cost. This enables the verification of the Apostille’s authenticity from long distance through electronic means. A Guide to Good Practice is available on the Conference’s website.51 In Brazil, the National Council for Justice (CNJ) was designated as the authority in charge of the Convention’s implementation, and delivered Resolution 228 of 22 June, 2016 for that purpose. This Resolution standardised the procedure to verify and issue documents, in addition to other measures. It also vested notaries with powers to issue apostilles, thereby decentralising the service through the vast network of notaries spread throughout the country. Where the Convention is applicable, the implementation abolishes the need for legalisation via a diplomatic authority and establishes safe criteria for apostille. Nowadays, in all requests at the STJ for recognition of foreign decisions, an international document with apostille is widely accepted by the court. In the establishment of the domestic system of apostille, Brazil adopted a mixed policy whereby the apostille is attached to the document but will also be stored electronically, retrievable through a QR Code. The CNJ maintains a registry of all electronic apostilles. In tandem with other procedural conventions of the Hague Conference, the Apostille Convention expressly recognises bilateral and multilateral treaties in force. Article 3 states that the apostille “cannot be required when either the laws, regulations, or practice in force in the State where the document is produced or an agreement between two or more contracting States have abolished or simplified it, or exempt the document itself from legalisation.” In the same vein, Article 3 of the For more information, see the Apostille specialised section of the Hague Conference website, available at: . In addition, there is a document, “ABC of the Apostille Convention” meant for use by the general public. 51

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi Resolution 228 from CNJ mentioned above determines that “the apostille will not be required when, in the country where the document should produce effects, domestic legislation, treaty, convention or international agreement to which Brazil is a party exempts the need for diplomatic legalisation.” Therefore, pre-existing bilateral treaties dismissing the need for legalisation and consular legalization of public documents are compatible with the Convention and remain applicable. An example of this scenario is the Treaty on Cooperation in Civil Matters between the government of the Federal Republic of Brazil and the government of the French Republic, signed in Paris, on 28 May, 1996, promulgated through Decree 3’598, on 12 September, 2000. Its Article 23 lists acts which exempt the need for legalisation, as follows: a) documents emanating from courts, the General Attorney’s Office, and notary offices; b) certificates of civil status; c) notary acts; d) official certificates, such as registry transcriptions, visas with fixed dates and notarisation of signatures on private documents. In the context of post-convention work developed by the Conference, this Convention was studied together with the Convention on Access to Justice and the one on the Taking of Evidence Abroad. Presently, there is a dedicated working group, created by the Council on General Affairs in 2017, entrusted with dealing with the authentication of documents issued by intergovernmental or supranational organisations. D.

Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Service Convention”)

This Convention is one of the most important instruments, and one with the most significant number of ratifications by countries with which Brazil has strong ties. It has been of particular relevance in international cases involving more than one jurisdiction. As a general rule, domestic law (lex fori) regulates procedural matters. However, considering that States cannot exercise their jurisdiction outside their territory, only through ILC will it be possible to accept in State A a service that must occur in State B. This is a topic that has always exposed profound differences between Common and Civil Law systems, because in the former, attorneys may serve opposing parties by themselves, or use third parties for this purpose, as is the case in the United States of America,52 while in the latter, this is an exclusive prerogative of court officials. For their effectiveness, such acts require coordinated efforts from the State from which the documents originate and the State where the documents need to produce effects. The method utilised is of the utmost importance to produce a valid and useful act in the State of origin. For many years, diplomatic channels were the

52 The US State Department uses a private party, ABC Legal Services, as the central authority for services under The Hague and Inter-American system conventions (CIDIPs). Available at .

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The Procedural Hague Conventions and their Implementation in Brazil most used means, despite the delays they created. States, then, sought to address the matter through bilateral agreements. In Brazil, service originating abroad is executed through letters of request, which have been regulated since the XIX century. The procedure has always been slow, due to the need for obtaining, before the actual act, a previous exequatur. Since the XX century, the exequatur has been under the STF’s jurisdiction, until the Constitutional Amendment 45 of 2004 (EC 45/2004), which transferred this role to the STJ. Through the years, like Europe, Brazil has entered many bilateral and multilateral treaties to facilitate this communication.53 At the beginning of the 1960s, the Hague Conference prepared a project to substitute the Convention on Civil Procedure of 1905.54 The new Convention created the system of central authorities, a then innovative concept widely utilised today to facilitate the contact between previously designated authorities through the use of standardised forms. It sought to guarantee that defendants had adequate knowledge of procedures in another jurisdiction with the ultimate goal of greater mutual communication on legal affairs.55 The Convention’s purpose is its use in all cases involving service abroad of judicial and extrajudicial documents. It contains guarantees to prevent exorbitant requests, made in bad faith, seeking to obtain a decision by default. Among its rules is the demand for providing a correct address. It further allows the notification of administrative requests. This Convention eliminates the need for the legalisation of documents issued by the Central Authority, without cost, thus reducing expenses for the parties and facilitating the international circulation of legal documents. The service is attested through a certificate, issued in the proper form, written in English or French and in the language of the requested State. In addition to the issuance of documents by the Central Authority, the Convention allows alternative means, such as diplomatic, postal or direct channels, if authorised by the concerned States. As opposed to the formal service through letters of request, the Convention establishes at Article 17 the issuance of service for extrajudicial documents and not just service requests within the context of lawsuits already filed. In a time of expansion of legal cooperation to incorporate the administrative sphere through direct assistance, the establishment of an official way for the issuance of notification is desirable, filling a gap in the cooperation system. A list of international treaties in force in Brazil is available at . 54 Available at . The history of this Convention and its relationship to the early XX century rules is described in the report of the Convention on the Taking of Evidence, available at . 55 Signed in 1965, it entered into force in 1969. On 9 November, 2017, there were73 contracting parties, many of which offered reservations. More information is available at . 53

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi The Brazilian Congress approved the ratification of the Convention through Legislative Decree 153 of 20 December, 2016, and deposited the instrument for ratification on 29 November, 2018. The Convention entered into force in Brazil on June 1st, 201956. In the accession to the Convention, Brazil made declarations to Articles 5, 6 and 7, and reservations to Articles 8 and 10, as follows: a) Reservation to Article 8: Brazil opposed the use of methods of transmission of judicial and extrajudicial documents provided for in Article 8 of the Convention. b) Reservation to Article 10: Brazil opposed the methods of transmission of judicial and extrajudicial documents provided for in Article 10 of the Convention. c) Declaration pursuant to Article 5, paragraph 3 and Article 7, paragraph 2: All documents transmitted to the Brazilian Central Authority in order to be served must be accompanied by a translation into Portuguese (except in the case of the standard terms in the model annexed to the Convention, referred to in Article 7, paragraph 1). d) Declaration pursuant to Article 6: When Brazil is the requested State, the required certificate in the form of the model annexed to the Convention must be signed by the Judge who has jurisdiction or by the Central Authority designated in accordance with the provisions of Article 2 of the Convention. Among the advantages of the implementation of this specific Convention in Brazil, is the fact that Brazil’s main commercial partners are parties to the Convention. Though there are greater difficulties executing service requests in these countries, a significant group of Common Law countries are parties to the Convention: Australia, Canada, United Kingdom, and United States of America.57 To this end, the Convention will be a particularly valuable instrument when the need arises to process requests from States with very different legal systems than ours as far as the formal requisites for service, as is the case for the States already mentioned, as well as Japan and China. An interesting matter is that proof of service occurs through the answer to the Central Authority’s form (Article 6) prescribed by the Convention. In Brazil, that would happen after the exequatur of the STJ and the execution of the act by a Federal Judge, if necessary. This dramatically simplifies the current system whereby many requests flow through diplomatic channels. It is worth noting that the receiving of the document in Brazil is also facilitated. The previous examination of the admissibility of the request by the Central Authority facilitates the work of the STJ (Article 4), avoiding delays and the setting in motion of the whole judicial machinery when the request is incomplete. The service to a person without an address is not allowed by the Convention. In post-convention work undertaken by the Conference, this document has been analysed in connection with the one of Access to Justice and the one on Decree 9’734 of March 20, 2019. The DRCI, through ARNALDO SILVEIRA, informs that “active request of information on procedural acts to the United States of America are answered expeditiously and effectively through the Inter-American Convention on Letters of Request and its Additional Protocol”, in force since 1996 (Decrees 1’899 and 2’022, respectively). 56 57

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The Procedural Hague Conventions and their Implementation in Brazil Taking of Evidence Abroad in 2009 and, later on, in 2014. A result of the 2014 studies was the creation of a Practical Handbook for the Convention’s operation, in whose elaboration the DRCI participated. The Council on General Affairs approved the Handbook which is now available in its 4th edition (2016).

IV. Conclusions The Hague Conference conventions here examined deal with important procedural issues to foster ILC in civil and commercial matters. Although covering a wide range of situations, they share commonalities such as abolishing the need for legalisation, implementing use of standard forms, and the furthering of requests through central authorities, among others. Brazil’s accession to these procedural conventions greatly facilitates ILC, especially with countries receiving an extensive number of Brazilian migrants – Portugal (Brazil’s most celebrated counterpart in ILC in civil matters), Japan and the United States of America – by simplifying the circulation of legal documents and judicial acts. It further improves ILC in general, in its active and passive forms, in light of a large number of States Parties to The Hague system. The effects of the conventions here analysed go beyond procedural matters, in an attempt to expedite proceedings and reduce costs, having a big impact in solving issues related to personal rights and family matters. There are situations in which procedural costs, difficulties in obtaining legal aid and bureaucracy relative to proceedings and documents generate uncertainty and hamper full access to justice. In the sphere of international contracts, the conventions also have a positive impact as transaction costs are reduced, fostering better conditions for the negotiation and conclusion of international agreements. The Procedural Conventions hereby studied have a high number of States Parties, representing the day-to-day of international cooperation. These Conventions are, without a doubt, the ones with the greater success in obtaining accessions in the Hague Conference, and are beneficial for daily operations, in line with Goal 16 of the United Nations Sustainable Development Goals.58 The fundamental rights guaranteed by the Brazilian Constitution need to go one step beyond the statement of rights, to encompass the concrete application of such rights in situations that call for international judicial cooperation. Greater ease of access to the use of such rights, through the adoption of the conventions here examined, works to guarantee full access to justice to all, with better conditions for Brazilians and foreigners involved in procedures of an administrative or judicial

58 Available at : the Sustainable Development Goal 16 is dedicated to the promotion of peaceful and inclusive societies for sustainable development, the provision of access to justice for all, and the building of effective, accountable institutions at all levels.

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Nadia de Araujo, Daniela Vargas, Marcelo De Nardi character in instances of transnational implications, which are, by their very nature, costly, slow and entangled in bureaucracy.

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AN ASSESSMENT OF CROSS-BORDER COOPERATION REGARDING MAINTENANCE A BRAZILIAN PERSPECTIVE Inez LOPES*

I. II.

III.

IV.

V. VI. VII.

Introduction The 1956 New York Convention: The First Multilateral Legal Instrument A. An Overview B. Provisional Measures C. The Brazilian Central Authority D. No Discrimination Regarding Maintenance under Brazilian Law E. Biological Paternity Investigation and the Right to Pregnancy Maintenance in Brazil F. International Legal Cooperation Regarding Maintenance Claims by Country G. Obstacles to Obtaining Maintenance from Abroad The 2007 Hague Convention on Maintenance: Modernising the Recovery of International Maintenance A. The 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance 1. An Overview 2. The Ratification and Reservations of the Convention by Brazil 3. Private Agreements: on Ongoing Process B. The 2007 Hague Protocol on the Law Applicable to Maintenance Obligations 1. An Overview 2. The Ratification of the Protocol by Brazil C. Data on the 2007 Hague Convention and the Protocol on the Law Applicable to Maintenance Obligations D. Severability and Partial Recognition and Enforcement of Foreign Judgments E. Data Protection The 1989 Inter-American Convention on Support Obligations A. An Overview B. Data on the 1989 Inter-American Convention MERCOSUL: International Legal Cooperation on Maintenance The Brazilian Civil Procedure Code (CPC): Adjudication on Maintenance and International Legal Cooperation Conclusions

* Full Professor of Public and Private International Law at Faculty of Law, University of Brasilia (UnB).

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Printed in Germany

Inez Lopes

I.

Introduction

The right to maintenance is a human right, and those persons who are unable to maintain themselves are entitled to maintenance. This right is based upon reciprocal obligations between parents and children, and the obligation may be extended to ascendants and descendants and in certain situations may reach a collateral relative, pursuant to Articles 1.697 and 1.698 of the Civil Code. Conversely, the obligation to pay maintenance creates responsibilities on parents or other people legally obliged to pay. The content of this right differs from one country to another, and is affected by the rules on applicable law and international jurisdiction. Private international law therefore plays an important role in unifying the rules. This article assesses the legal effect of the existing international instruments on cross-border maintenance, from a Brazilian perspective. It evaluates these instruments from global and regional perspectives, looking to the 1956 Convention on the Recovery Abroad of Maintenance, the 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance, the 2007 Protocol on the Law Applicable to Maintenance Obligations, and the 1989 Inter-American Convention on Support Obligations. Based on quantitative and qualitative methodologies, the objective is to investigate which of the conventions on maintenance obligations are used most often to recover maintenance and enforce cross-border maintenance orders. This article also examines how the principle of international legal cooperation through central authorities facilitates communication to enable maintenance orders or judicial decisions to circulate among countries. It analyses decisions rendered by the Brazilian Superior Court of Justice, and the specific rules on international jurisdiction in maintenance matters under the Brazilian Code of Civil Procedure. It concludes that international legal instruments enhance cooperation among countries, ensure access to justice and predictably enable the recovery of maintenance abroad, but there are certain types of maintenance that are not covered by the convention nevertheless, such as the case of unborn child support. Private agreements on child support remain a challenge for maintenance order circulations.

II.

The 1956 New York Convention: The First Multilateral Legal Instrument

A.

An Overview

The beginning of the twentieth century saw optimism regarding the recovery of maintenance abroad, and the first studies on maintenance debts were made by the League of Nations.1 The Great War was responsible for family crises, and a new 1 Société des Nations (SdN), Institut Internationale de Rome pour l’Unification du Droit Privé (UDP), Étude II – Dettes alimentaires – Doc 1, 1929.

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective scenario of unprotected cross-border families arose. Many parents, mainly men, stopped contributing to the maintenance of (dependent) women and children abroad. In 1938, the International Institute for the Unification of Private International Law (UNIDROIT), together with the League of Nations, drew up, in Rome, the Preliminary Draft of a Convention on the Enforcement Abroad of Maintenance Obligations (the “Draft”). The main objective was to ensure the recognition and enforcement of judicial decisions or orders for maintenance payments to women and children abroad. This measure was meant to ensure that women and children had a minimum amount on which to support themselves. However, the work was interrupted by the outbreak of the Second World War, and the United Nations resumed work on the Draft after the end of the war. A decade later, under the United Nations system, the Convention of 20 June 19562 on the Recovery Abroad of Maintenance represented a great step forward in setting out rights and obligations regarding maintenance, enabling international procedural civil law to improve the recovery of maintenance abroad. Thirty-two countries at the United Nations Conference on Maintenance Obligations unanimously adopted this Convention, which was open for signature. Brazil ratified this international instrument on 14 November 1960 after Congress approved it by passing Legislative Decree No. 10 of 13 November 1958.3 CONTINI writes that “this was the last of a long series of steps taken by the international community in an effort to improve the condition of dependents – mostly women and children – abandoned without support by men who moved to other countries”.4 This Convention recasts the traditional international legal cooperation instruments, creating a cross-border regime to facilitate the enforcement of maintenance decisions beyond borders. It also tries to prevent the situation in which children and women do not receive any support from those who are legally bound to give them that support, regardless of the child’s parents’ marital status. Therefore, besides spouses and all lineal ascendants and descendants, the Convention was intended to also cover adopted children and children born out of wedlock.5 The New York Convention was the first instrument to create a judicial channel for cooperation in the area of the recovery of maintenance abroad. One of the great merits of this Convention is that it requires equal treatment of parties regardless of their nationality, giving them the same treatment in proceedings before the national courts. The Convention ensures that claimants will have access to justice regardless of their status as aliens or non-residents and that they will not be required to furnish a cautio judicatum solvi or make any payment or deposit as security for costs or otherwise. In addition, transmitting and receiving agencies Promulgated by Decree No.56.826 of 2 September 1965. I. LOPES, Maintenance Obligations in the Brazilian Law System: A Path to Hague Convention on Maintenance Recovery and Protocol, in P. BEAUMONT/ B. HESS/ L. WALKER/ S. SPANCKEN (eds.), The Recovery of Maintenance in the EU and Worldwide, Oxford, Hart Publishing, 2014, p. 215. 4 P. CONTINI, The United Nations Convention on the Recovery Abroad of Maintenance, St. John's Law Review, Vol. 21, No. 1, 1956, available at . 5 P. CONTINI (note 4), p. 8. 2 3

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Inez Lopes cannot charge any fees, including for the certification or legalisation of documents except to cover their expenses for proceedings brought in accordance with the Convention. B.

Provisional Measures

According to Article 6 of the 1956 New York Convention on Maintenance, the receiving agency is always subject to the authority given by the claimant and must take all appropriate measures in order to obtain the payment for maintenance. Therefore, a case by case analysis shows that the receiving agency has to be proactive, in the sense that it should take action before the court including provisional measures to provide maintenance payments in favour of the claimant (a woman or child). In the case Medida Cautelar No. 22.988-DF, the Superior Court of Justice (STJ) granted a temporary injunction to fix provisional maintenance in favour of the defendant’s former wife.6 Based upon the principles of fumus boni iuris and periculum in mora, the injunction gave a provisional right for the claimant to receive payment before the recognition of the judgment that had been rendered in Belgium. Although the judgment granted maintenance to the children and the woman, the request for recognition and enforcement before the Brazilian court was only made by the woman because the children had reached the age of majority. This case makes it clear that a provisional measure for maintenance payments is available under the Brazilian legal system, and the receiving agency has to adopt measures to guarantee this right. C.

The Brazilian Central Authority

In Brazil, the Attorney General’s Office of the Republic (PGR) is the central authority with jurisdiction under this international treaty, and its role mainly consists in transmitting and receiving intermediate administrative information. The PGR is the designated authority that performs both functions, pursuant to Article 26 of Law No. 5478 of 25 July 1968 (Law of Maintenance). In Case SE No. 4601/FR, the receiving agency – the PGR – applied for the recognition of a foreign judgment on maintenance that had been rendered in France. In this case, the Supreme Federal Court (STF), which had jurisdiction to decide on the recognition of foreign judgments, recognised the French judgment as requested by the PGR. In addition, the STF stated that “consular authentication or an official translation are not essential requirements to recognize a foreign maintenance judgment, in view of the fact that it has been transmitted through diplomatic channels in accordance with the New York Convention”.7

6 7

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Superior Court of Justice, 28 August 2014, Medida Cautelar No. 022988. Supreme Federal Court, 19 December 1997, Foreign Judgment No. 4601/FR.

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective After the 2004 Constitutional Amendment, the Superior Court of Justice (STJ) became the competent body for the recognition of foreign judgments.8 This court has also acknowledged that the PGR can represent the interests of a maintenance claimant by requesting the recognition and enforcement of a foreign decision before the national court based on the New York Convention.9 The STJ likewise understands that there is no need for the legalisation of foreign documents when they are transmitted between official central authorities.10 D.

No discrimination Regarding Maintenance under Brazilian Law

The 1988 Federal Constitution of Brazil prohibits any sort of discrimination related to affiliation. Article 227 states that all children, irrespective of whether they were born inside or outside of wedlock or adopted, have the same rights and designations under the law.11 Before that, Law No. 883 of 21 October 1949 had established that children born outside of wedlock could be recognised only after the separation of a couple. Later, children born outside a marriage could be recognised at any time (including during the marriage), in accordance with Law No. 6.515 of 26 December 1977 (the Divorce Law), which modified the sole paragraph of Article 1 of Law No. 883/1949. Currently, under Law No. 12.004 of 9 July 2009 there is a presumption of paternity if the alleged father refuses to undergo a genetic code or DNA examination. In this context, Brazil cooperates with the States Parties of the 1956 New York Convention on Maintenance regardless of the parents’ relationship or nationality. In addition, it is possible to obtain maintenance from same sex partnership. In the judgement of the STF, the union between persons of the same sex deserves the same rules and consequences. A family formed by a same sex union, called “união homoafetiva”, cannot suffer any discrimination, and shall have the same rights, privileges, obligations, and benefits that may be available to partners of different sex civil unions.12 These benefits include social security, child adoption, and maintenance obligation.

See N. ARAUJO, Cooperação Jurídica Internacional no Superior Tribunal de Justiça: Comentários à Resolução No. 9/2005, Renovar, Rio de Janeiro/São Paulo/Recife, 2010. 9 Superior Court of Justice, 5 November 2008, Processual Civil Divórcio por mútuo consentimento – Alimentos, Challenged Foreign Judgment No 2772-FR (2007/0276626-9); Supreme Federal Court, 19 September 2012, Foreign Judgment No 8359-PT (2012/0097720-0). 10 Superior Court of Justice, 23 August 2010, Foreign Judgment No 4703-NL (2009/0124980-3). 11 Article 227, para. 6 reads: “Os filhos, havidos ou não da relação do casamento, ou por adoção, terão os mesmos direitos e qualificações, proibidas quaisquer designações discriminatórias relativas à filiação”. 12 Supreme Federal Court, 18 September 2012, Benefício de Pensão por morte união homoafetiva, Agravo Regimental no Recurso Extraordinário nº 687432-MG. 8

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Inez Lopes E.

Biological Paternity Investigation and the Right to Pregnancy Maintenance in Brazil

Under Brazilian law, a court can fix “pregnancy provisional maintenance”, as set out in Precedent No. 277 of the STJ. This sets out an obligation to make maintenance payments once the debtor has received judicial notification, as well as during the investigation of the paternity claim. In Case AgRg no Agravo em Recurso Especial No. 457.640-SP, where there was a joint legal claim for a paternity investigation in addition to a maintenance order, it was decided that the initial term of the maintenance obligation started from the notification to the debtor and not from the date on which the judgment was rendered, in accordance with Precedent No. 277 of the STJ. In another case, AREsp No. 652152, the STJ decided that in order to set the pregnancy maintenance payment to be made by the alleged father, it had to consider his ability to pay the costs (duly evidenced) and the amount required to meet the pregnant woman’s needs.13 According to Brazilian law, pregnancy maintenance differs from child support, because the latter provides maintenance to the child for his or her own subsistence, while the former provides maintenance to the woman for her costs during her pregnancy. Law No. 11.804 of 5 November 2008 sets forth the rules on the right to pregnancy maintenance, which is made in proportion to the (financial) resources of both parents. Once the judge is convinced, by a paternity investigation, that the man is the father, the father has to pay maintenance to the pregnant woman until the child is born. After the child is born, the father’s maintenance obligation is owed to the child. This law does not place strict liability on the woman in the case of a negative DNA test. The Brazilian President had vetoed Article 10 of this provision, justifying this decision by stating that the imposition of strict liability went against the free exercise of the right of action. Nevertheless, there is a possibility that the supposed father can bring an action for a remedy, before the court, for the civil wrong related to the violation of the supposed father’s personality rights.14 The intention of the supposed wrongdoer (the woman) has to be proved by the man making the challenge. F.

International Legal Cooperation Regarding Maintenance Claims by Country

According to the PGR, the majority of applications for recognition and enforcement are for European judgments. These judgments are most commonly from England, France, Germany, Italy, the Netherlands, Portugal, Spain, and Switzerland. In Latin America, cross-border requests for legal cooperation on maintenance generally come from Argentina, Bolivia, Chile, Colombia, Paraguay, 13

Superior Court of Justice,  3 August 2015, Agravo em Recurso Especial No 652152. 14 See G.A. DONA, Os alimentos gravídicos e a possibilidade de indenização ao suposto pai quando da não confirmação da paternidade, Direito Net, 2012, available at

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective and Uruguay. It is important to highlight that, under Brazilian law, the STJ is the competent court for recognising a foreign judgment (as we mentioned before), but then enforcement takes place before a federal court. G.

Obstacles to Obtaining Maintenance from Abroad

The PGR reports the following problems relating to international legal cooperation on maintenance: translation of documents, missing addresses of creditors abroad, and paternity recognition issues.15 This information is available online16 to facilitate cooperation and to avoid delays in the recovery of maintenance.

III. The 2007 Hague Convention and Hague Protocol on Maintenance: Modernising the Recovery of International Maintenance A.

The 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance

1.

An Overview

The 2007 Hague Convention on Maintenance aims to ensure effective child support and other forms of family maintenance. It facilitates the circulation of administrative and judicial decisions and any other measures ordering maintenance payments. The primary focus is on the protection of the child, and this new instrument is “far more inclusive in its coverage than the previous multilateral instruments”.17 Just as in the 1956 New York Convention on Maintenance, the Hague Convention establishes an international obligation based upon the principle of guaranteeing children the right to maintenance, regardless of the marital status of the parents (Article 2). This Convention aims to replace the previous treaties among States Parties, both those elaborated within the framework of the Hague Conference (1956, 1958 and 1973 Conventions) and the 1956 New York Convention on Maintenance. The Hague Conference on Private International Law (HCCH) played an important role in developing international instruments and policies on private international law, as

15 Ministério Público Federal, Secretaria de Cooperação Internacional. Convenção de Nova York sobre prestação de alimentos no estrangeiro: o que é e como funciona / Secretaria de Cooperação Internacional, 2nd ed., MPF, Brasília 2016, p. 51 et seq. 16 Ministério Público Federal, available at . 17 W. DUNCAN, The New Hague Child Support Convention: Goals and Outcomes of the Negotiations, Family Law Quarterly, Vol. 43, No. 1, 2009, p. 9.

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Inez Lopes it relates to maintenance obligations, and on procedural law, to enforce support orders. It is important to emphasise that, initially, there will be coordination with the 1956 New York Convention,18 but as States ratify or accede to the 2007 Hague Convention on Maintenance, this will replace the previous convention. It will gradually establish a single global regime for the cross-border recovery of maintenance, keeping dialogues and coordination with other existing international instruments, such as the rules of the Inter-American Convention and the European Union systems, at a regional level. The 2007 Hague Convention on Maintenance prescribes a general obligation that is limited to family relationships between parents and children. It also applies to spousal support when the application is made in conjunction with a claim for child support, as provided in Article 2, paragraphs 1(a) and (b). However, the extension of such cooperation to maintenance claims between spouses, only applies in those States that make a declaration to the purpose of expanding the scope of the Convention. The 2007 Hague Convention on Maintenance contains traditional rules of private international law, as well as rules in relation to international legal and administrative cooperation.19 In addition, the Convention gives a proactive role to the central authorities. The list at Article 6 provides examples of their tasks. If the agreement had been too rigid it could hamper their operation, given the diversity of legal and administrative systems.20 The central authority designated by Brazil is the Department of Asset Recovery and International Legal Cooperation (DRCI) of the National Secretariat of Justice (SNJ) of the Ministry of Justice and Public Security. It is important to stress that the 2007 Hague Convention on Maintenance makes the rules on the recognition and enforcement of foreign judgments clearer than the previous treaties. First, it equates decisions and agreements rendered by administrative and judicial authorities in respect of a maintenance obligation.21 Second, even if a foreign decision is made in respect of other rights, it is possible that it will be partially recognised and enforced, especially for child support. In relation to access to justice, the requested State must guarantee effective access to procedures, including enforcement and appeal procedures, as well as free legal assistance. The Convention also grants equal treatment for foreign and domestic cases. Besides that, it guarantees that no security, bond or deposit to pay costs and expenses in proceedings can be required.

Article 49. L. WALKER, Maintenance and Child Support in Private International Law, Oxford, Hart, 2015, p. 201. 20 W. DUNCAN (note 17), p.10. 21 Article 19. 18 19

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective 2.

The Ratification and Reservations of the Convention by Brazil

Brazil signed and deposited the instruments of ratification of the 2007 Hague Convention on Maintenance on 17 July 2017, after Congress approved it by passing Legislative Decree No. 146 of 9 December 2016. The Convention entered into force on 1 November 2017, as promulgated by Decree No. 9.176, published officially on 19 October 2017. Brazil made reservations on Article 20, subparagraph 1(e), and on Article 30(8), related to written agreement by the parties as to jurisdiction. Brazil also made declarations on Article 2(3) to extend the application to other family members. The first reservation refers to Article 30, which contains provisions on maintenance arrangements. According to Article 3(e), “maintenance arrangement” has a twofold meaning: it is an agreement in writing relating to the payment of maintenance, which has either been formally drawn up or registered as an authentic instrument by a competent authority, or has been authenticated by, or concluded, registered or filed with a competent authority, and may be the subject of review and modification by a competent authority. Article 30(8) provides an opt-out mechanism, under which Brazil reserved the right not to recognise or enforce a maintenance arrangement containing provisions regarding minors, incapacitated adults and elderly persons, categories defined by the Brazilian legislation and specified in accordance with Article 57 of the Convention. The second reservation refers to the possibility for the parties to designate a court through a written agreement, under Article 20(1)(e). Furthermore, Brazil made a declaration regarding Article 2(3), in order to extend the application of the whole of the Convention to obligations to provide maintenance arising from collateral kinship, direct kinship, marriage or affinity, including, in particular, obligations involving vulnerable persons. This declaration will apply only if another contracting State has made the same declaration, on the basis of reciprocity. This means that Brazil must accept applications coming from a Contracting State that has made an analogous declaration. Nevertheless, Brazil may accept applications coming from a Contracting State that has not made such a declaration (although it is not obliged to do so under the Convention), based on the principle of reciprocity, as set forth in the Civil Procedural Code in the chapter on international cooperation. 3.

Private Agreements: on Ongoing Process

Private agreements are commonly used in some countries, such as Canada,22 but they are not so common in other countries, such as Brazil, in family matters involving children. According to Article 3(e) of the 2007 Hague Convention, a “maintenance arrangement” is an agreement in writing relating to the payment of maintenance which has been formally drawn up or registered as an authentic instrument by a competent authority; or has been authenticated by, or concluded, 22 A. BORRÁS/ J. DEGELING, Explanatory Report on the Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance, The Permanent Bureau of the Conference, 2009, p. 187.

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Inez Lopes registered or filed with a competent authority, and may be the subject of review and modification by a competent authority. The idea is to encompass both authentic instruments and private agreements within the scope of the Convention, and to include applications made through the Central Authorities, as provided for in Chapter III. The exclusion of private agreements from the scope would not only have been a great loss, but would have also limited the usefulness of the Convention.23 Whereas there is a tendency towards reaching amicable solutions to family disputes, this provision on maintenance arrangements tends to stimulate countries to adopt methods of alternative dispute resolution, instead of contentious procedures, to settle litigation.24 Unless a country makes a reservation in accordance with Article 62, it has to recognise and enforce a maintenance arrangement if that arrangement is enforceable as a decision rather than a contract in the State of origin. As seen above, Brazil made a reservation as to Article 30(8), which means that private agreements related to cross-border maintenance will not be enforced in Brazil when they involve vulnerable persons. ARAUJO and VARGAS have pointed out that “unlike commercial matters, in which boundaries are strictly set forth in the agreement, it is not always possible to foresee if a private agreement involving a family dispute will have an impact outside the country where it was contracted”.25 Article 20 of the Hague Convention on Maintenance provides a set of indirect rules on jurisdiction. Under sub-paragraph (e), a State must recognise and enforce a decision if there has been agreement to this jurisdiction in writing by the parties, except in disputes relating to maintenance obligations in favour of children. Party autonomy provides an adequate basis for recognition and enforcement, but with this clear limitation. Brazil also reserved the right not to recognise or enforce a decision in which the parties have reached a written agreement as to jurisdiction where the litigation involves obligations to provide maintenance for children or for individuals considered as incapacitated adults or elderly persons. Brazilian law does not allow private agreements on family matters involving child support or any matters relating to a child. Notwithstanding, the law allows parties to reach an extrajudicial agreement that has to be ratified by a national court after a hearing before the public prosecutor’s office for it to have A. BORRÁS/ J. DEGELING (note 22), para. 552, p. 187. The ASADIP Principle on Transnational Justice, adopted in November 2016 by its Council, establishes the Principle of favouring friendly settlements. Article 1.1(b): States and judges should encourage, facilitate and favour friendly solutions through negotiation, mediation, conciliation or any other non-judicial resolution of conflicts. See J.L.O. MUÑOZ, Acceso Transnacional a la Justicia y Gobernanza global (Comentarios Introductorios a los Principios ASADIP sobre el Acceso Transnacional a la Justicia), Revista de Direito Brasileira, Vol. 20, No. 8, p. 336 et seq. 25 N. ARAUJO/ D.T. VARGAS, The Cross-border Recognition and Enforcement of Private Agreements in Family Disputes on Debate at the Hague Conference on Private International Law, in J.A.M. RODRIGUES/ C.L. MARQUES (eds), Los Servicios en el Derecho Internacional Privado. Jornadas de la ASADIP 2014, Porto Alegre, Asunción, Gráfica e Editora RJR, 2014, p. 485 et seq., at 490. 23 24

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective judicial effect. Nevertheless, there is a tendency in Brazil to use methods of alternative dispute resolution in family matters, and these may include maintenance arrangements in the future. Will Brazil recognise private agreements or only ‘authentic instruments’ drawn up by an authority, such as a notary public? B.

The 2007 Hague Protocol on the Law Applicable to Maintenance Obligations

1.

An Overview

The 2007 Hague Protocol on the Law Applicable to Maintenance Obligations determines the law applicable to maintenance obligations arising from a family relationship, parentage, marriage or affinity, regardless of the marital status of the parents. The Contracting States agreed to create a system that is universally applicable, which means that the rules set forth in these international instruments are also applicable to a non-Contracting State. The Protocol also includes special rules in favour of the creditor, and in accordance with the best interests of the child. According to the general rule on applicable law,26 the law of the State of the habitual residence of the creditor governs the maintenance obligations, and if there is a change in the habitual residence of the creditor, the law of the new habitual residence is applied from the moment when the change occurs. 2.

The Ratification of the Protocol by Brazil

Brazil signed both instruments at the same time, therefore after the national Congress approved it by passing Legislative Decree No. 146 of 9 December 2016. The Convention and the Protocol entered into force on 1 November 2017, as promulgated by Decree No. 9.176, published officially on 19 October 2017. This Protocol does not allow reservations, only declarations are possible under the provisions of Article 28. Brazil has made no declarations. C.

Data on the 2007 Hague Convention and the Protocol on the Law Applicable to Maintenance Obligations

The effectiveness of cross-border maintenance depends on the circulation of claims between creditor and debtor, through the recognition of foreign decisions (judicial or administrative), and consequently, payment to the debtor. The first table below, published by the DRCI, illustrates the number of applications based on the 2007 Hague Convention on Maintenance and the Protocol on Applicable Law since Brazil’s ratification of these instruments. The second table illustrates the percentage of such applications relative to all

26

Article 3 of the Hague Protocol.

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Inez Lopes applications in Brazil for international legal cooperation, including civil and criminal matters. 2017-2018 – Requests on the grounds of the 2007 Hague Convention on Maintenance Month

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

Total

Number (%)

32 6.56

15 3.29

12 3.33

20 4.22

14 2.89

10 2.30

10 1.65

11 2

21 3.47

17 3.12

19 4.25

13 2.15

8 1.46

202 X

Source: Department of Assets Recovery and International Legal Cooperation (DRCI?snj?mj) Available at .

2017-2018 – Requests on the grounds of the 2007 Hague Protocol Month

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

Total

Number %

1 0.20

2 0.44

0 0

3 0.63

5 1.03

2 0.46

1 0.16

1 0.18

0 0

0 0

0 0

0 0

1 0.22

16 X

Source: Department of Assets Recovery and International Legal Cooperation (DRCI) Available at .

In the period 2017-2018, more than two hundred applications to recover maintenance were made pursuant to the 2007 Hague Convention, and sixteen based on rules of the 2007 Hague Protocol. These numbers reveal the importance of those instruments in enhancing international legal cooperation regarding these matters. With respect to the recognition of foreign judgments on maintenance, until now there have been no decisions by the STJ based on the 2007 Hague Convention. Until now, foreign judgments on maintenance enforced by the STJ have all been made pursuant to the 1956 New York Convention.27 It is important to highlight that these cases are applications from countries that are already party to both international instruments. In order to build capacity regarding cross-border maintenance, the central authority, the DRCI, has developed an online and interactive form28 for the use of citizens, lawyers, judges and any other interested parties. Although Brazil has become party to several global and regional treaties concerning private international law matters mainly related to maintenance obligations (the New York Convention and the Inter-American Convention), the ratification of both Hague instruments, the Convention and Protocol, is important for enhancing cooperation in cross-border litigations. Since the entry into force of both the 2007 Hague Convention and its Protocol, the majority of applications have been based on these two treatises, showing a tendency to use the global instruments. In 2017 and 2018, the Superior Court of Justice decided 17 cases based on the 1956 New York Convention on Maintenance (HDE 000008-PT; HDE 000197-CH; HDE 000009-PT, 000462-PT; HDE 000386-FR; HDE 000255–PT; HDE000387 PT; HDE 000464-FR; HDE 000198-AT; HDE 000385 CH; HDE 000467 – PL; HDE 000463-PT; HDE 000196-PT, HDE 000514-PT; HDE 000515-AR; and HDE 000907), available at . HDE stands for Homologação de Decisão Estrangeira, which means in English “foreign decision recognition”. 28 Ministry of Justice and Public Security, DRCI, Prestação de Alimentos, available at . 27

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Severability and Partial Recognition and Enforcement of Foreign Judgments

Under Article 21 of the 2007 Hague Convention on Maintenance, if the State addressed is unable to recognise or enforce the whole of a decision, it must recognise or enforce any severable part of the decision that can be recognised or enforced, and there can always be an application for the partial recognition or enforcement of a decision. The severability requirement means that the part of the decision in question is capable of standing alone.29 Therefore, a judgment on family matters may be partially recognised to guarantee the payment of maintenance by the debtor. For instance, in the case HDE No. 386-FR, the STJ partially recognised a foreign judgment on divorce rendered by a French court.30 This concept could be extended to a foreign judgment under which only the child support payment was recognised. E.

Data Protection

The Convention raises a concern with regard to data of a personal nature. The Convention also limits the use of information regarding the lex fori of the State where the data is processed. Pursuant Article 38 of the 2007 Hague Convention on Maintenance, personal data gathered or transmitted has to be used only for the purposes for which they were gathered or transmitted. In addition, an authority is prohibited from disclosing or confirming information gathered or transmitted as part of the application of the 2007 Convention if it determines that to do so could jeopardise the health, safety or liberty of an adult or child. In accordance with the Data Protection Law, Law No. 13.709 of 14 August 2018, when processing child’s personal data, it should have parent’s consent or authorization (Art. 14). In this sense, data processing has to observe the principle of the best interests of the child. This law will enter into force twenty-four months after its publication.

IV. The 1989 Inter-American Convention on Support Obligations A.

An Overview

At the regional level, the Organization of American States (OAS) has also developed important work in the area of private international law, adopting several international treaties. The States concerned are seeking to harmonise or unify the rules on substantive and/or procedural law, facilitating the dual flow of international legal cooperation requests. The work developed within the Inter-American 29 30

A. BORRÁS/ J. DEGELING (note 22), p. 475. Superior Court of Justice, 29 August 2017, HDE, No, 386-FR, 2017/0049259-9.

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Inez Lopes Specialized Conferences on Private International Law, known as CIDIPs, that was initiated in the 1970s is noteworthy in this respect.31 CIDIPs contributed to several international instruments that were adopted by the OAS members; among them, the Inter-American Convention on Support Obligations was adopted on 15 July 1989 and entered into force on 6 March 1996. Brazil ratified this international instrument on 11 July 1997.32 The designated central authority is also the Ministry of Justice and Public Security. To date, there are thirteen States Parties to this Convention. The purpose of this Convention is to establish rules on the law applicable to support obligations and jurisdiction, and on international procedural cooperation when the creditor and debtor are domiciled or habitually resident in one of the States Parties. The Convention applies to persons under the age of eighteen years, regardless of nationality, race, sex, religion, parentage, place of origin, immigration status or any other distinction. The maintenance obligation may be extended to a person who has attained the age of eighteen, according to the applicable law. The 1989 Inter-American Convention provides for the application of the law that is most favourable to the creditor, which may be the law of the State of domicile or habitual residence of the creditor or the debtor. This principle is directly connected to the principle of the best interests of the child, set forth in the 1989 UN Convention on the Rights of the Child. In addition, a judicial or administrative authority of another State shall also have jurisdiction if the defendant appears before it without challenging its jurisdiction. Nowadays, under the Brazilian legal system, the calculation of maintenance has to take into account three criteria: necessity of the creditor, possibility of the debtor, and proportionality of parent’s income. Concerning jurisdiction, the Convention gives the creditor the right to ask the judicial or administrative authorities to have the support claims be heard in the State of domicile or habitual residence of the creditor or the debtor or in a State in which the debtor possesses property, receives income or obtains financial benefits. The Contracting States have the obligation to enforce support orders if these requirements are met. The Convention also provides for the circulation of provisional or precautionary measures, but this implies neither a recognition of the jurisdiction of the requesting authority nor a commitment to enforce or recognise the validity of a support order presented for enforcement. The Convention ensures that the creditor has free legal assistance, since the States have to guarantee access to justice. In addition, no security of any kind may be required from the creditor based on his foreign nationality or his domicile or habitual residence in another State.

Organization of American States (OAS), Resolution AG/RES. 48 (I-O/71) approved 23 April 1971. 32 Promulgated by Decree No. 2.428, of 17 December 1997. 31

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective B.

Data on the 1989 Inter-American Convention

To date, there have been only two requests for recognition of foreign judgments before the STJ under the 1989 Inter-American Convention on Support Obligations. The table below should be compared to the same period investigated above for applications made pursuant to the Hague Conference instruments. 2017-2018 – Requests on the grounds of the 1989 Inter-American Convention on Support Obligations Month

NOV

DEC

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

Number

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

0 0

1 1.18

0 0

1 0.17

0 0

(%)

To tal 2 X

Source: Department of Assets Recovery and International Legal Cooperation (DRCI). Available at .

Although the 1989 Inter-American Convention is an important instrument at a regional level, it is rarely used, as can be seen from the number of applications made.

V.

MERCOSUL: International Legal Cooperation on Maintenance

MERCOSUL, the Southern Common Market, is a trade bloc established by the Treaty of Asunción, which was signed by Argentina, Brazil, Paraguay and Uruguay on 26 March 1991. Whereas MERCOSUL does not have a specific convention dealing with maintenance or family matters, there are protocols that apply to international legal cooperation on maintenance, such as the Protocol of Las Leñas on Jurisdictional Cooperation and Assistance in Civil, Commercial, Labour and Administrative Matters, adopted on 5 July 1992,33 and the 1994 Protocol of Ouro Preto on Provisional Measures.34 ARAUJO states that “while there is no uniformity among member countries in dealing with the issues of transnational litigation, Brazil has changed its prior position and has opened a special path for MERCOSUL cases”.35 The letter rogatory is traditionally a formal request for judicial or administrative assistance, made by a court of one country to another foreign court, for the purposes of service of process or obtaining evidence if it is in accordance with the law of the State to which the request is made. The execution of a request

MERCOSUL, CMC (MERCOSUL Trade Commission), entered into force in 1996, promulgated in Brazil by Decree 2.067, of 12 November 1996. 34 MERCOSUL/CMC/DEC. Nº 27/94, promulgated by Decree No. 2626, of 15 June 1998. 35 N. ARAUJO, Dispute Resolution in MERCOSUL: The Protocol of Las Leñas and the Case Law of the Brazilian Supreme Court, University of Miami Inter-American Law Review, 2001, Rev. 25 Vol. 32, p. 56, available at: . 33

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Inez Lopes through a letter rogatory may be based on an international treaty, or, in the absence of a treaty, on reciprocity through diplomatic means. Within the MERCOSUL system, the letter rogatory gets a new look, beyond the traditional international legal cooperation, and foreign judgments may be enforced through letters rogatory, according to Articles 10, 19 and 20 of the Las Leñas Protocol.36 In this manner, a foreign judgment may be recognised and enforced through a letter rogatory by the intermediation of the central authorities. In Case CR No. 4463-UY, the Family Law Court of Montevideo, Uruguay, requested, through a letter rogatory, that a company should withhold 20% of the debtor’s monthly income, as a fixed sum of provisional maintenance under Resolution No. 1987 of 28 June 2005. The STJ recognised the decision in accordance with Article 19 of the 1992 Las Leñas Protocol. In another case, CR No. 215-EX, the Argentinian court requested an attachment of the debtor’s income from the Institute of Energy and Nuclear Research, through letter rogatory, as a precautionary measure due to the non-payment of maintenance. According to the STJ, a letter rogatory is based on the Protocol of Provisional Measures, which provides for the implementation of precautionary measures without the application of exequatur proceedings that are, in turn, required for the recognition of foreign judgments.37

VI. The Brazilian Civil Procedure Code (CPC): Adjudication on Maintenance and International Legal Cooperation The 2015 Civil Procedure Code (CPC) contains some innovations from the previous Civil Procedure Code of 1973, since Article 22 provides special rules on concurrent jurisdiction on cross-border maintenance. Under Article 22, both Brazilian and foreign courts have jurisdiction to hear a case in which maintenance is claimed when the creditor is domiciled or resident in Brazil, or when the defendant maintains ties such as the possession or ownership of assets, or receives income or obtains economic benefits, in Brazil. The lis pendens rule is “important in order to ensure legal certainty, but it will not help in situations where one court is seized for divorce proceedings and another court is seized for maintenance”.38 Pursuant to Article 24 of the CPC, unless there is a provision in an international agreement adopted by Brazil, Brazilian courts have jurisdiction over a case even though there is a simultaneous Article 19 reads: “O reconhecimento e execução de sentenças e de laudos arbitrais solicitado pelas autoridades jurisdicionais poderá tramitar-se por via de cartas rogatórias e transmitir-se por intermédio da Autoridade Central, ou por via diplomática ou consular, em conformidade com o direito interno.” Letter rogatory is an instrument of international legal coooperation pursuant to Article 40 and Article 960 of the Civil Procedure Code. 37 Superior Court of Justice, 27 October 2005, Letter Rogatory No 215-EX (2005/0008842-1). 38 L. WALKER (note 19), p. 60. 36

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Cross-Border Cooperation Regarding Maintenance – A Brazilian Perspective case abroad involving the same cause of action between the same parties. Conversely, the fact that a case is pending before a Brazilian court does not prevent the recognition of a foreign judgment. Therefore, Article 24 of the CPC and Article 22(c) of the 2007 Hague Convention should be reconciled in order to avoid situations “where there are two conflicting decisions arising in two different States”.39 The current CPC includes clearer rules on international legal and administrative cooperation among States in comparison to the previous one that contained only two articles. These rules establishes great advances in guaranteeing the access to international justice, and facilitating the exercise of rights beyond national borders. The States’ commitment to guaranteeing people access to justice in other jurisdictions through international treaties is important in overcoming the fragile cooperation based only on reciprocity through diplomatic means.

VII. Conclusions The coexistence of a range of international instruments at global and regional levels has facilitated people’s ability to recover maintenance abroad. The 1956 New York Convention on Maintenance built a path to greater trust among countries, facilitating the circulation of foreign judgments to recover maintenance, including maintenance as a provisional measure. The 2007 Hague Convention on Maintenance and the Protocol on the Law Applicable to Maintenance Obligations are modern instruments that strengthen international cooperation among countries. Since Brazil’s ratification of these instruments in 2017, the number of applications pursuant to these instruments has increased considerably. However, there has not yet been an application for recognition of a foreign judgment on maintenance before the Superior Court of Justice based on these instruments. At the regional level, the international legal instruments of MERCOSUL, such as the Las Leñas and Ouro Preto Protocols, have facilitated the enforcement of maintenance orders, including through enforceable letters rogatory. The 1989 Inter-American Convention on Support Obligations also facilitates international cooperation among countries for the recovery of maintenance in accordance with the law most favourable to the creditor and the principle of access to justice. Nevertheless, this instrument has been used infrequently. It is also important to highlight the central authorities’ role that became very proactive, facilitating cooperation among countries. Challenges over different characterization on maintenance obligations may prevent a creditor from recovering maintenance abroad. For instance, in the case of “pregnancy maintenance” fixed to unborn child that is allowed in Brazil, a maintenance order may not circulate because there is no provision regarding unborn child’s rights in another country. Party autonomy in family matters, including private arrangements on maintenance, may face some problems with respect to the recognition and enforcement in some countries, mainly to child support. In this 39

L. WALKER (note 19), p. 161.

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Inez Lopes sense, States should be open to parties using alternative dispute resolution to facilitate amicable settlements in relation to cross-border maintenance.

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JURISDICTION, INTERNATIONAL LEGAL COOPERATION AND CROSS-BORDER INTERNET DISPUTES IN BRAZIL Fabricio B. PASQUOT POLIDO*

I. II.

III. IV.

V.

VI.

Introduction Jurisdiction and International Cooperation in Brazilian Courts A. Development of the Case Law in Brazilian STJ B. Back to the Origins: Federal State Prosecutor Office vs. Google Brasil Case Exploring the Narratives of Prescriptive Jurisdiction and the Internet Marco Civil da Internet, Jurisdictional Bases and Extraterritorial Reach A. Interactions between Marco Civil, US-Brazil MLAT and beyond B. Role of PIL and Scope of Art. 11 of Marco Civil International Legal Cooperation and Foreign E-Evidence A. Value of International Legal Cooperation and Internet Cases B. Normative Interactions between Marco Civil and International Cooperation C. Constitutional Challenges Ahead: to Cooperate or Not? Concluding Remarks

* Professor of Private International Law, International Intellectual Property Law, Internet Law and Comparative Law at the Law School of Federal University of Minas Gerais – UFMG, Brazil; PhD in International Law, University of São Paulo (USP); Member of the American Association of Private International Law – ASADIP and of the Brazilian Delegation at the Hague Conference of Private International Law. E-mail: [email protected]. I am deeply grateful to Professors Toni Williams, Luis Eslava and Donatella Alessandrini, (University of Kent/UK), Prof. Dr. Axel Metzger (Humboldt University of Berlin and Weizenbaum Institute for the Networked Society) for previous background discussions on the outcomes of the research project “State and Transnational Legal Processes: Frontiers of Labour and New Technologies”, which I carry out at the Centre for Graduate Research Studies in Law of the UFMG School of Law, and from which this article is derived. I am also grateful to my Brazilian academic peers for constant exchanges and dialogues on PIL, intellectual property and Internet issues, especially to Professors Nadia de Araujo, Inez Lopes, Andre Carvalho Ramos, Marcelo De Nardi, Lidia Spitz, Monica Guise Rosina, Marcel Leonardi, Carlos Affonso Souza, Carlos Eduardo Boucault, Valesca Borges and Gustavo Ribeiro. This article is funded in part by the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior – Brasil (CAPES) [FC 001 research grant PVE 45-2017 – “Visiting Professorship Programme Abroad” – Process No. 88881.171915/2018-01].

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 189-219 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Fabricio B. Pasquot Polido

I.

Introduction

Is international legal cooperation optional, unnecessary or superfluous for the adjudication of cross-border Internet disputes in times of “digital battles” among the Americas, European Union and China in their regional and global spheres of influence? To what extent does Internet user information and communication data, stored in a third country, constitute evidence that can be obtained abroad in the course of civil or criminal proceedings? Can information be handled as a pure asset, susceptible to concessions and transactions between governments and global Internet corporations? What are the emerging trends in international civil or criminal litigation in connection with the growing powers and tasks of law enforcement authorities – LEAs – and the apparent demise of the territoriality principle in transnational disputes involving Internet users, companies and governments? It would be premature to offer categorical responses to these questions from critical international and comparative legal standpoint. Nevertheless, in recent Internet cases arising from the investigation and prosecution of crimes committed in Brazil, administrative bodies and domestic courts have been resorting to very truncated approach undermining the advance of the very promising field of research represented by Private International Law/ Internet interface. Confronted with requests for data retention and disclosure of private communication between Internet users, made by LEAs (in particular federal and state prosecutors) to Internet companies, domestic courts have been called on to scrutinise the admissibility and legality of such measures under Brazilian laws. They examine current issues related to the consistent interpretation of the Brazilian Constitution and the 2014 statute called “Marco Civil da Internet” (hereinafter: “Marco Civil”)1 in light of international law, and determine the scope of application of jurisdictional rules granting power to Brazilian courts to hear cross-border Internet disputes. The recent case law in Brazil raises several concerns with regard to an indissociable public-private interplay in international law. Such concerns deal, for instance, with the availability, nature and scope of international obligations and principles on mutual legal assistance included in broader international legal cooperation schemes based on treaties to which Brazil is a signatory, and the use of such mechanisms in transnational civil litigation involving Internet-related disputes.2 “Marco Civil da Internet” (Law No. 12.965/2014) represents one of the most important statutory laws in Brazil dealing with regulation of the use of the Internet and comprises a set of principles, guarantees for users and civil liability rules for Internet companies. As I contend further in this article, some specific provisions of Marco Civil are relevant for the purpose of private international law interplay, in particular where applicable law, jurisdiction and international legal cooperation are related to cross-border Internet disputes. The interpretation and application of Marco Civil by Brazilian courts will gradually pave the way for a growing field of research aiming at understanding the intersections between Internet policies and public/private international law. 2 Both Brazilian Codes of Criminal Procedure (1941) and Civil Procedure (2015) establish the prevalence of treaties and conventions, to which Brazil is a signatory, to 1

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil There appears to be a new range of inter-related issues in public/private international law, such as the evolving patterns regarding Internet jurisdiction and enforcement of Internet laws; the effectiveness of existing international legal cooperation mechanisms, such as Mutual Legal Assistance Treaties (MLATs), and the pervasive governmental interests in regulatory policies dealing with the Internet. Likewise, the concerns raised reflect the constant struggle between national law enforcement authorities, judicial courts and global corporations regarding the exercise of jurisdiction and – very exceptionally – the extraterritorial application of national laws to Internet matters across the globe.3 The legal community may, however, be reviving or still experiencing a general incomprehension about the limits of territoriality, the distinct approaches to jurisdiction (as a conceptual frame in international law) or the overreactions as to the nature of technologies surrounding cross-border transfer of data and Internet cases.4 I would further contend that these issues could go beyond the theoretical analysis, focused on the hyper-regulatory schemes built upon different static legal systems,5 toward a jurisdictional race-to-the-top or “legal arms race”,6 particularly govern proceedings, jurisdiction, international legal cooperation and recognition and enforcement of foreign judgments, as set forth respectively in Articles 1, I, 780 et seq. of Code of Criminal Procedure 1941, and Articles 13, 26, 860 et seq. of Code of Civil Procedure of 2015. 3 Due to space constraints, this article will not deal with substantive and policy issues related to enforcement of human rights online, rule of law, due process and privacy, all of them also emerging from procedural and technical patterns on data collection, treatment and retention at transnational level. Nevertheless, one should recall that they are invariably intertwined with the architecture and functioning of the Internet and the settlement of cross-border Internet disputes, more importantly in those related to investigation and prosecution criminal cases by domestic authorities and judicial courts. In a seminal book chapter on Internet Governance, Professor Laura DE NARDIS sheds light on this interplay when discussing specifically the techniques associated to domain name seizures as carried out by the Immigration and Customs Enforcement Office in the US: “this technique, like many Internet governance areas, implicates conflicting public interest values such as freedom of expression versus law enforcement, complexities of national jurisdiction of cross-border infrastructures, as well as technical concerns about the stability and security of infrastructures of Internet governance” (cf. L. DE NARDIS, The emerging field of Internet governance, in W.H. DUTTON (ed), The Oxford Handbook of Internet studies, Oxford 2013, p. 564 et seq.). From the plain issue of seizure of domain names associated to business activity to the disclosure of communication data allocated overseas, there will be considerable ancillary stakes and public interests in favor of the preservation of freedom of enterprise and privacy protection. The Internet has been a fertile terrain for those experiments. 4 In distinct perspectives, see J.R. REIDENBERG, Technology and Internet jurisdiction, University of Pennsylvania Law Review (Univ. of Penn. L. Rev.) 2005/153, pp. 1951-1974; C. KUNER, Data protection law and international jurisdiction on the Internet - Part 1, International Journal of Law and Information Technology (Int. J. of L. Info. Tech.) 2010/18, p. 176 et seq; B. LA CHAPELLE/ P. FEHLINGER, Jurisdiction on the Internet: From Legal Arms Race to Transnational Cooperation, available at , p. 10 et seq.; F.B. PASQUOT POLIDO, Direito Internacional Privado nas Fronteiras do Trabalho e Tecnologias, Rio de Janeiro 2018, p. 86 et seq. 5 See, for instance, D.J. SVANTESSON, Solving the Internet Jurisdiction Puzzle, Oxford 2017, p. 105 et seq.; D.J. SVANTESSON, European Union Claims of Jurisdiction over

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Fabricio B. Pasquot Polido where Internet, jurisdictional issues and international legal cooperation come into consideration. In fact, these issues may be subject to a more sophisticated analysis in light of emerging patterns of “transnational division of information” and “data nationalism”. The irreversible consolidation of data protection and Internet legal regimes and their operation in different macro-regions across the globe have caused these patterns to emerge.7 In any case, they epitomize the fragmented regulatory frameworks and policies underlying laws enacted over the past ten years in the EU, China and the Americas in the field of Internet regulation, privacy and data protection. It is no mystery that these tree clusters – Internet regulation, privacy and data protection – represent today the hard spot and battle field challenging any plausible single chance for harmonisation or uniformisation of Internet law at a regional and multilateral level. Brazilian statutory laws and jurisdictional experiments may offer some illustrative examples of the main contradictions surrounding the topic of this article. One could begin with a judicial experiment to understand the limits of the public-private dichotomy in international law and the role of private international law in the adjudication of Internet disputes. In a distinct set of rulings, the Brazilian High Court of Justice – STJ – decided that global Internet corporations doing business in Brazil had to directly disclose, to national authorities, personal data, login information and access logs from Internet users subject to criminal prosecution in Brazil. Global Internet corporations can be required to comply with orders to provide LEAs with the content of user communication data, whether stored and allocated in Brazil or in a third country.8

the Internet – an analysis of three recent key developments, Journal of Intellectual Property, Information Technology and Electronic Commerce Law (JIPITEC) 2018/9, p. 113 et seq. 6 This has been the approach considered by the Internet & Jurisdiction Policy Network, which is a multi-stakeholder organization engaging with issues on the crossborder nature of the Internet and national jurisdictions. See INTERNET & JURISDICTION POLICY NETWORK, Towards Policy Coherence and Joint Action, available at , p. 3. 7 See, for instance, C. KUNER, Data nationalism and its discontents, Emory Law Journal (Emory L. J.) 2015/64, p. 2089 et seq.; R. HERIAN, Regulating Disruption: Blockchain, GDPR, and questions of data sovereignty, Journal of Internet Law 2018/22, p. 8 et seq.; F.B. PASQUOT POLIDO (note 4), at 65. 8 STJ, Microsoft Ltda./State of Mato Grosso, Recurso em Mandado de Segurança No. 46.685 - MT, Opinion of Judge Arruda Raposo, decision as of March 26, 2015, in DJe 06.04.2015; STJ, Facebook/Federal Prosecutor Office, RMS 44.892/SP, Judge Ribeiro Dantas, 5th Chamber, decision as of April 5, 2016, in DJe 15.04.2016; AgRg RMS No. 55.050, Facebook/Federal Prosecutor Office, Opinion of Judge Reynaldo Fonseca, decision as of October 3, 2017, in DJ 11.10.2017; STJ, Yahoo!/Federal Prosecutor Office, RMS No. 55.109/PR, Rel. Judge Joel Paciornik, decision as of December 17, 2017 (case “Castanheira-Brasil 247”); STJ, Facebook/Federal Prosecutor Office, RMS 55.109-PR, 5th Chamber, Opinion Judge Reynaldo Fonseca, decision as of November 7, 2017, in DJ 17.11.2017; STJ, Facebook do Brasil/Federal Prosecutor Office, RM. 54.444-RJ, Opinion of Judge Maria Thereza de Assis Moura, decision as of September 12, 2017, in DJe

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil This is certainly not an unknown topic for international and Internet lawyers. It has been articulated with the past development of the transatlantic negotiations on the US-EU Data Privacy Shield, the entering into force of the European Regulation on General Data Protection (GDPR),9 the enactment of the 2018 CLOUD Act in the United States10 and recent EU legislative initiatives toward the Directive on harmonised rules on the appointment of legal representatives for the purpose of gathering evidence11 and the Regulation on Production and Preservation Orders for electronic evidence in criminal matters.12 In Brazil, Art. 10 of Marco Civil da Internet establishes that the acquisition, maintenance and disclosure of Internet connection logs and Internet application access logs contemplated in the Law, as well as personal data and the content of private communications “shall respect the privacy, private life, honour and image of the parties directly or indirectly involved”. In addition, according to Art. 15 of Marco Civil, Internet application providers are requested to keep Internet users` personal data and Internet application access logs, for a period of 6 (six) months, under strict confidentiality and in a controlled and secure environment.13 In 13.10.2017; STJ, Facebook do Brasil/Federal Prosecutor Office, RMS No. 56.496 – RS, March 02, 2018, in DJ 08.03.2018. 9 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC, OJ L 119, 4.5.2016, pp. 1–88 (herein “General Data Protection Regulation” or “GDPR”). 10 Clarifying Lawful Overseas Use of Data Act (Cloud Act), H.R. 4943, available at . See notes Congress Enacts the Clarifying Lawful Overseas Use of Data (Cloud) Act, Reshaping U.S. Law Governing Cross-Border Access to Data, American Journal of International Law (Am. J. of Int’L) 2018/112, pp. 487-493. 11 Proposal for a Directive of the European Parliament and of the Council setting out harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings, COM(2018) 226 final – 2018/0107(COD), as of April 17, 2018. 12 Proposal for a Regulation of the European Parliament and of the Council on European Production and Preservation Orders for electronic evidence in criminal matters, COM(2018) 225 final – 2018/0108(COD), as of April 17, 2018. 13 See Article 15 of Marco Civil. According to this provision, Internet applications providers are characterised as “legal entities providing applications in an organized, professional manner, for profit”. The legal obligation contained in Article 15 to guard personal data, Internet connection logs and Internet application access logs is construed as a mandatory statutory rule addressing Internet providers and Internet companies and it was considerably opposed by Internet companies during the legislative process leading to the approval by Marco Civil da Internet in 2014. As already extensively discussed in the EU preparatory documents and the Impact Assessment Study for the proposed Regulation on European Production and Preservation Orders, such mandatory rules targeting Internet service providers generally clashes data minimization requirements existing in the course of data processing and treatment. One should argue, however, that the different substantive and procedural regulatory patterns for Internet related data, such as those pertaining the obligation to keep records or to guard Internet users’ personal data, access logs and further metadata associated with the underlying relationship between the user and the Internet

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Fabricio B. Pasquot Polido addition, Art. 15, Par.3, of Marco Civil expressly ensures that any disclosure of Internet users` personal data and Internet application access logs in possession of Internet service providers must be requested by judicial order. These rules are designed to regulate, from a substantive law perspective, the operations and legal transactions dealing with maintenance and disclosure of user data and the content of private communications by Internet companies. At first blush, Marco Civil’s provisions neither provide for statutory rules allowing courts to ascertain jurisdiction in cross-border Internet disputes, nor establish “escape clauses” or “waivers” for Brazilian authorities to set aside international legal assistance and other procedural instruments in cross-border (criminal, civil or commercial) Internet disputes . Here, there may be plenty of confusion created and further replicated by Brazilian courts in the field of jurisdiction, applicable law and international legal cooperation. As contended further, all matters related to jurisdiction in cross-border civil and commercial cases, including those related to jurisdiction to adjudicate crossborder Internet disputes, shall be addressed by the Brazilian Constitution, the Code of Civil Procedure of 2015 and treaties and conventions to which Brazil is a party. A brief look at the recent Brazilian case law, however, evidences a sort of eclectic view on cross-border Internet cases, most of them scrutinised by the STJ based on an inconsistent interpretation of Marco Civil’s provisions on the substantive law applicable to Internet transactions, errors in decisions regarding jurisdiction to adjudicate cross-border disputes, and a disregard of international cooperation involving the gathering of electronic evidence abroad. This article intends to explore the existing boundaries and intersections between jurisdiction and international legal cooperation regarding the Internet, taking into account the Brazilian legal and institutional landscape. This will gradually become a pervasive field in international civil and criminal litigation with inevitable repercussions on private international law.14 The article also seeks service provider, for example, has also been deemed a bottleneck for law enforcement and the effectiveness of judicial cooperation in criminal investigations and prosecutions. See, Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on European Production and Preservation Orders for electronic evidence in criminal matters and Proposal for a Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings, available at . 14 New technologies and the Internet are intertwined: a concurrent approach involves the emergence and consolidation of the field of international intellectual property litigation. It comprises a range of issues, including applicable law, jurisdiction, cross-border enforcement and legal and technical cooperation in intellectual property matters at the transnational level. See, for instance, E.-J. MIN/ J.C. WICHARD, Cross-Border Intellectual Property Enforcement, in R.C. DREYFUSS/ J. PILA (eds), The Oxford Handbook of Intellectual Property Law, Oxford 2018, p. 688 et seq. (illustrating the potential interfaces between the territoriality principle, cross-border litigation and perceived inefficiencies of cross-border IP enforcement). In addition, current normative patterns and legislative policies toward the enactment and enforcement of laws and regulation on data protection – at national, regional and intra-community levels – will also lead to the further strengthening of specific clusters in cross-border litigation in administrative and civil matters. New litigation

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil to expand support for the claim that the Brazilian Marco Civil includes rules based on prescriptive jurisdiction with regard to certain Internet transactions. A closer look at the interplay between international law and municipal law is no less relevant for a reappraisal of what has been said in scholarly literature and by courts. In Brazil, the courts refer to overlapping solutions provided by the Constitution, the Code of Civil Procedure and treaties establishing rules on jurisdiction to hear cross-border Internet cases (thus, in line with transnational civil litigation patterns) and international legal – judicial and administrative – cooperation. Specifically with regard to international legal cooperation, this article also explores some of the current issues pertaining to the international and extraterritorial effects of Marco Civil. One should recall that these topics together might not be unique to scholarly circles in the Americas, Europe and Asia. The coherence and consistency of legitimate instruments favouring the proper and fair adjudication of cross-border disputes and their necessary interplay with the main goals of private international law deserve further attention still. Internet transactions and the regulation of crossborder Internet disputes provide illustrative examples of how these areas are irreversibly entangled nowadays.

II.

Jurisdiction and International Cooperation in Brazilian Courts

A.

Development of the Case Law in the Brazilian STJ

Since the entering into force of Marco Civil in April 2015, Brazilian courts have been asked to engage in different tasks related to the interpretation and application of this statute’s provisions in connection with civil, commercial and criminal cases. Most of them involved issues relating to user rights, liability of Internet companies, the nature of data disclosed to LEAs in the course of criminal investigations, and also the law applicable to transactions involving the collection, processing and storage of data pertaining to Internet users domiciled or residing in Brazil.15 As repeatedly argued by legal scholars in Brazil, Marco Civil constitutes an important piece of statutory law mainly dealing with general principles on Internet use, user rights, and the liability of Internet service providers and Internet companies.16 profiles shall focus on cross-border disputes involving data subjects, data authorities and companies. See for instance, P. DE MIGUEL ASENSIO, Competencia y Derecho aplicable en el Reglamento General sobre Protección de Datos de la Unión Europea, REDI 2017/69, p. 75 et seq. 15 For an overview of the emerging case law related to Marco Civil from the standpoint of jurisdictional issues, judicial orders for content removal and users’ rights, see IRIS, Online secrecy, criminal investigations and international cooperation, available at . 16 F. MEDEIROS/ L.A. BYGRAVE, Brazil's Marco Civil da Internet: Does it live up to the hype?, Computer Law & Security Review 2015/31, p. 120 et seq. For a critique on

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Fabricio B. Pasquot Polido In Castanheira/Brasil 247, the STJ held that Yahoo! do Brasil Internet Ltda., a subsidiary of Yahoo Inc. and incorporated and existing under Brazilian laws, had the obligation to: “provide the tools necessary for the disclosure of electronic communication data as ordered by the appealed decision, under the legal penalties of being affected, individually or cumulatively, by sanctions of warning, administrative and judicial fines, temporary suspension of operational activities and, likewise, prohibition of the supplying Internet services and Internet applications in Brazil, as set forth by Art. 12 of Marco Civil”.17 The Court considered that jurisdiction of Brazilian courts could be established over Yahoo Inc., based on the general jurisdictional rule of Art. 21(I) of the Code of Civil Procedure of 2015 (CPC) and its sole paragraph, which extends jurisdiction to a defendant foreign legal entity operating in Brazil through branches, agencies, subsidiaries or affiliated companies. Art. 21(I) of the CPC indeed offers Brazilian courts strong grounds to establish jurisdiction based on the “place of the defendant’s domicile”, which is considered a very secure connecting factor granting the jurisdiction to Brazilian courts to hear cross-border disputes in civil and commercial matters.18 Except in cases where there is a valid forum selection clause (e.g choice-of-court or arbitration agreement)19 expressly excluding the jurisdiction of Brazilian courts in civil matters, or where a foreign judgement is successfully brought for recognition and enforcement in Brazil (Art. 960 CPC), Brazilian courts are required to the ascertain jurisdiction to hear a cross-border case based on the personal jurisdiction rule set forth by Art. 21(1) of CPC. However, since Art. 21(1) of CPC refers to a concurrent jurisdictional rule (and not a rule setting out a ground for “exclusive jurisdiction” in Brazil), there might be cases where the mere presence of the defendant in Brazil would render the dispute’s outcome absolutely ineffective for the plaintiff. This occurs in particular with regard to the enforcement of Brazilian

Marco Civil’s legislative design, see E. TOMASEVICIUS FILHO, Marco Civil da Internet: uma lei sem conteúdo normativo, Estudos Avançados 2016/30, p. 269 et seq. (contending that most provisions of the Law are deprived of adjudicatory character and merely embedded in a programmatic character, i.e. rules establishing goals to be attained in future by means of state actions, policies or further legislative initiative). 17 STJ, Yahoo!/Federal Prosecutor Office, RMS No. 55.109/PR (note 8). 18 See, for instance, N. ARAUJO, Direito Internacional Privado, São Paulo 2018, p. 176 et seq.; M. BASSO, Curso de Direito Internacional Privado, São Paulo 2016, p. 197 et seq.; F.B. PASQUOT POLIDO, Comentários aos Arts. 21-41, in L.L. STRECK et al. (eds), Comentários ao Código de Processo Civil, São Paulo 2017, p. 73 et seq. In European Private International Law, a similar analysis can be made with regard to Article 4(1) of Regulation (EU) No. 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Recast): “Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”. 19 See Articles 25 and 42 of Brazilian CPC.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil judgements where defendant’s assets and goods are located in a third country and a pure national enforcement would result useless. In previous cases involving the Federal Prosecutor Office and Facebook Brasil, the Court took the same approach as in Brasil 247. According to the STJ, the company’s seat and core operational activities in Brazil (in particular, the provision of services related to rental of advertising spaces and advertising and sales assistance) subject Facebook subsidiary to the obligation to provide Brazilian LEAs with the requested information for the purpose of criminal investigation and prosecution. In Brazil 247, said information included Internet connection logs, application access logs and content of communication amongst users having Facebook accounts. The information was presumably relevant to the alleged crimes being prosecuted.20 Likewise, the Court added, multinational corporations carrying out activities related to the supply of online services often resorted to the “deliberate selection” of the place of incorporation and establishment of headquarters with “a specific objective of circumventing their tax obligations and judicial orders aimed at regulating the content of the material these companies convey or the secrecy of information from its users”.21 Based on these arguments, the STJ finally stated: “since Facebook is established and operates in Brazil, the foreign legal entity is necessarily subject to Brazilian laws; this is why it seems unnecessary to resort to international cooperation to obtain the data requested by the […] court”.22 The trend revealed by the cases mentioned above would not be surprising at this stage. Contentious issues on jurisdiction and international cooperation, such as mutual legal assistance between Brazilian and US authorities in cross-border Internet disputes, constitutes what one could call the “second generation” of cases dealt by Brazilian Courts after 2010. They have been extremely common after the entry into force of Marco Civil in April 2015. Previously, Internet disputes and their related interfaces with civil and criminal matters seldom considered the repercussions – either from theoretical, doctrinal or judicial standpoint – on public/ private international law issues in Brazil.23 STJ, Facebook/Federal Prosecutor Office, RMS 55.109-PR, 5th Chamber, Opinion of Judge Reynaldo Fonseca, decision as of November 7, 2017, in DJ 17.11.2017. 21 Ibidem, Opinion of Judge Fonseca. 22 Ibidem. In those cases involving Yahoo, Facebook and Google before the Brazilian STJ, companies basically claimed that the lower courts’ decisions were unlawful, as they lacked legal grounds for incrimination of parties in main criminal proceedings, and that the Brazilian subsidiaries targeted by local LEAs in said proceedings were not responsible for delivering communication data allocated overseas. 23 Surely, the noisy case Microsoft Ireland (17 April 2018, United States v. Microsoft Corp., No. 17-2, 584 U.S.__2018), which was pending at the US Supreme Court between October 2017 and April 2018, touched precisely on similar questions, among them, the extent to which prescriptive jurisdiction of US laws would reach servers and data centres operating abroad. The enactment of the CLOUD Act in March 2018 resulted in subsequent claims made by Microsoft and other Internet companies challenging the legality of federal law enforcement measures. Most of these claims dealt with Microsoft’s submissions on the validity of the Stored Communications Act-related warrants for data stored on foreign servers (in the case at hand, they were located in Ireland). In sum, the CLOUD Act provides 20

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Fabricio B. Pasquot Polido The case law based on the most recent STJ rulings has been systematically evoked by lower courts in their decisions on the authorisation for data retention/ interception, and the disclosure of private communications between Internet users. In particular, the predominant approach appears to endorse the legality – or “appearance of legitimacy” – of a mandatory collaboration between Brazilian LEAs, courts and Internet companies in providing email, Internet apps and cloud computing services in Brazil for facilitation of data disclosure in the course of proceedings in the absence of a sound legal basis. Yet, those cases are still open to scrutiny and one could ask which consequences will arise from the outcome of the STJ rulings and their impact on the subsequent development of case law in Brazil, particularly with regard to private international law and Internet issues. The consequences can also be explained by several contextual elements. Firstly, Brazilian courts, in their judicial role, appear to underestimate the paramount relevance of jurisdictional dialogues between States and organisations. Secondly, they often echo the deficit and inadequacies of existing mechanisms within international legal cooperation frameworks (mostly by blaming resource scarcity and time-consuming features associated with MLATs) and ignore the actual needs related to the re-shaping of international legal cooperation frameworks on a global scale. Political, social or corporate-driven demands in the field of the Internet and new technologies would occupy no exclusive ranking in those areas, but they inevitably lead to an adverse effect, such as the strengthening of a certain judicial activism trend in Brazil. B.

Back to the Origins: Federal State Prosecutor Office vs. Google Brasil Case

Despite much confusion caused by domestic courts regarding the foundations of jurisdiction and applicable law, the leading case before the Brazilian STJ has been referred as to the decision rendered by the Court in the Criminal Inquiry No. 748, filed by Google in 2013.24 In this case, the STJ ruled on the opinion of Judge Laurita Vaz concerning preliminary issues related to requests made to Google Brasil Ltda. in the course of criminal proceedings involving Internet users that were pending before lower courts of the Distrito Federal. Some of the facts and legal arguments presented are relevant to this article. Google Brasil Ltda., a subsidiary of Google Inc., (a company incorporated under the laws of California), was asked by Brazilian LEAs to produce the content of messages sent and received by Brazilian users (private communication data), for the purpose of prosecuting crimes committed on Brazilian soil, and therefore, subject to Brazilian jurisdiction pursuant Brazilian criminal laws. Google Brasil, in new procedures for procuring legal orders for data located overseas in cross-border Internet/digital cases. On April 17, 2018, the US Supreme Court issued a “per curiam” opinion holding that the case was rendered moot, vacating and remitting it back to the lower courts for dismissal. See United States v. Microsoft Corp., No. 17-2, 584 U.S. (2018), available at: . 24 STJ, Federal Prosecutor Office/Google Brasil Ltda., Inquérito 784-DF, Opinion of Judge Ms. Laurita Vaz, decision as of April 17, 2013, in DJe as of 28.8.2013.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil turn, argued that it could not comply with the orders for disclosure of private communications involving alleged criminal offenders in Brazil since the information was stored in the US and compliance could result in breach of US statutory laws. Essentially, Google Brasil maintained that the provisions of the 1986 Electronic Communications Privacy Act (ECPA) would apply to those communications through Gmail services (in particular, Sections 2701-2712 of ECPA) and that Brazilian authorities should have resorted instead to diplomatic channels for obtaining the information stored in the US, in line with the 1997 US-Brazil Mutual Legal Assistance Treaty in Criminal Matters (“US-Brazil MLAT”).25 Furthermore, Google requested the STJ to grant an interim injunction to suspend criminal detention measures and fines targeting its directors and representatives in Brazil due to “reasonable doubts pertaining to the applicable proceedings, at least until the matter in dispute was settled on the merits by the Court (STJ)” in related pending cases”.26 The Court then considered that Google Brasil had the obligation to deliver the stored data to domestic law enforcement authorities, even if it was established that the data was not subject to Google Brazil’s “immediate power”. Google Brasil’s representatives, according to the Court, could be legally requested to comply with any judicial order determining the disclosure of communications data. In the majority opinion of the STJ, the data requested by LEAs would serve as evidence for the prosecution of serious crimes committed in the country, such as corruption, fraud in public procurement and tender bids, money laundering, administrative bias and peddling.27 Judge Vaz’s opinion deserves attention for two main reasons. First, it downplays the existing foreign connections or links to the parent Internet company overseas in order to reject the need for international legal cooperation or mutual legal assistance. The STJ considered that Brazilian authorities did not need to resort to diplomatic means or central authorities even in case of an existing MLAT or further bilateral/multilateral treaty to which both requested and requesting States are parties. According to Judge Vaz, the communication data requested from Google Brasil refers to “elements of evidence produced, transmitted and received within the Brazilian territory” and such evidence had “nothing to do with foreign countries, except for the fact that they are stored in the US for corporate-strategic reasons”.28 Secondly, the Court appeared to resort to the characterisation of acts of disclosure of communication data, which should be construed under Brazilian laws (prior, however, to the enactment of Marco Civil). The STJ asserted that the “pure transfer” of data from the holding or parent company, established in a third country, such as the US, to an affiliated entity in Brazil was not to be deemed a disclosure or breach of secrecy “per se”. In the Court’s view, the act of disclosure 25 Incorporated into Brazilian law by Executive Decree No. 3.810/2001. Full text in English is available at . 26 STJ, Federal Prosecutor Office/Google Brasil, IC 784-DF (note 24). 27 Ibidem. 28 Ibidem (note 24).

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Fabricio B. Pasquot Polido is justified solely to the extent that the requested data has been effectively handed over to national judicial authorities in Brazil.29 The Court understood that the direct delivery of the data to a Brazilian authority by the requested affiliated company of Google Inc. would not constitute a breach of privacy in relation to Internet users’ communications, regardless of the place or country where the data is stored or located. Judge’s Vaz opinion shows, to a certain extent, the Court’s reluctance to resort to international legal cooperation (through letters rogatory, mutual legal assistance among central authorities or other means established by convention, treaty or domestic law, such as the Codes of Civil and Criminal Procedure) during proceedings in Brazil. According to Vaz: “It is worth mentioning that this company (Google Brasil) was incorporated in accordance with Brazilian laws; clearly, the company must be subject to the domestic legislation and cannot fail to comply with a judicial request by simply invoking US laws, which are not, for all what has been aforementioned, applicable to the case. One could not admit that a company, established in the country, exploits the profitable Internet-based messaging service – which is absolutely licit – but fails to comply with municipal laws. To refer the Brazilian Judiciary Branch to diplomatic channels to obtain data overseas is to contravene national sovereignty, thus subjecting state powers to the unacceptable attempt by the company at stake to override domestic laws by means of corporate policy stratagems, who knows for what purpose.” She then continued: “[...] It is worth mentioning that, due to the criminal proceedings that led to the action filed before this Court, being it of a criminal nature, the principle of territoriality shall prevail. Brazilian criminal laws apply to acts taking place within the national territory, as set forth by Art. 5 of the Criminal Code.”30

29 As Judge Vaz contended, what has been seen as cross-border transfer of data should be considered, in the case at stake, as an “interna corporis” matter, thus taking place routinely in connection with business transactions and operational activities between companies belonging to the same group of companies; therefore, it had nothing to do with a procedural request related to the obtaining of foreign evidence. According to Ms. Vaz: “I insist: the mere transmission of data, protected in its content, among entities belonging to the same group of enterprises, for the exclusive purpose of delivery to the competent judicial authority, in the Brazilian case, does not have the power to even scratch the sovereignty of the foreign State”. See STJ, Federal Prosecutor Office/Google Brasil Ltda. (note 24). 30 Freely adapted and translated from the Portuguese version: “Remeter o Poder Judiciário Brasileiro á via diplomática para obter dados é afrontar a soberania nacional, sujeitando o Poder Estatal a inaceitável tentativa da empresa em questão de se sobrepor às leis pátrias, por meio de estratagemas de polícia empresarial, sabe-se lá com qual intenção”.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil To support her opinion, Judge Vaz maintained that foreign companies having affiliates or subsidiaries in Brazil were subject to the jurisdiction of Brazilian courts, pursuant to the sole paragraph of Art. 88 of the revoked Code of Civil Procedure of 1973 (now replaced by Art. 21 of the 2015 CPC). As mentioned before, the Brazilian CPC establishes that Brazilian judicial authorities have jurisdiction over any defendant domiciled in Brazil, regardless of his/her nationality (Art. 21(1)). Where the defendant is a foreign legal entity with branches, agencies, subsidiaries or affiliated companies in Brazil, it is deemed to have its domicile in the country for purpose of the general jurisdictional rule at Art. 21. According to Judge Vaz: “(…) therefore, being that the applicant is a company established within the national territory, Google has the obligation to provide the (requested) information to Brazilian courts, taking the necessary measures to comply with the judicial order; it is not justifiable to sustain limits of internal (corporate) administration to avoid compliance with judicial orders emanating under the scrutiny of Brazilian Laws”.31 These excerpts from the 2013 STJ ruling on Federal Prosecutor Office/Google Brasil (IC 784-DF) have been followed by lower courts in subsequent disputes adjudicated by the STJ regarding authorisation for data retention and disclosure of private communication among Internet users, either by messaging platforms or email services provided by major Internet companies, such as Google, Microsoft, Facebook and Yahoo!32

III. Exploring the Narratives of Prescriptive Jurisdiction and the Internet A brief review of existing case law in Brazil may shed light on the jurisdictional patterns related to cross-border Internet disputes, in particular “prescriptive jurisdiction”. Case law equally reveals divergent approaches to jurisdiction, as well as to the scope of application of Marco Civil’s provisions and its interpretation by domestic courts. In accordance with the meaning and conceptual frameworks provided by classical international law, jurisdiction defines the limits of the power Ibidem, Opinion of Judge Laurita Vaz (note 24). See, for instance, STJ, Federal Prosecutor Office vs. Facebook, RMS 44.892/SP, Judge Ribeiro Dantas, 5th Chamber, decision of April 5, 2016, in DJe 15.04.2016, at 4 (“Por estar instituída e em atuação no País, a pessoa jurídica multinacional submete-se, necessariamente, às leis brasileiras, motivo pelo qual se afigura desnecessária a cooperação internacional para a obtenção dos dados requisitados pelo juízo”). Free translation: “Once it is established and in operation in the country, a multinational legal entity invariably submits to Brazilian laws; this is the reason why international legal cooperation seems unnecessary for the purpose of obtaining data requested by the first instance judge”. 31 32

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Fabricio B. Pasquot Polido of the “sovereign” state coexisting, in particular, with other States’ regulatory activities in international law.33 The boundaries of jurisdiction, however, encompass three core dimensions, which are established according to a power to make and enforce laws within the territory of a particular State: prescriptive jurisdiction, adjudicatory jurisdiction and executive jurisdiction.34 This power, as traditionally attuned with the origins of the Westphalian order in international law, is directly addressed to the citizens and persons residing or domiciled in that State. The aforementioned division, which could not be taken as hermetic or watertight, is invariably linked to domestic courts’ ultimate goal of ensuring the application of substantive law to cases having foreign elements. This goal also comprises a consistent degree of compliance by administrative authorities with substantive law applicable to those cases. From a very recurrent private international law standpoint, jurisdiction serves basically three distinct purposes: first, to situate the different layers of powers exercised by domestic courts in their adjudicatory tasks related to settlement of cross-border disputes/litigation and in case of the Internet, disputes having foreign elements;35 second, it copes with regulatory tasks of states to define the governing law for cases with foreign elements; and third, it deals with the powers of state courts to recognise and enforce foreign judgments. All these objectives equally help courts to clarify the degree of complexity surrounding cross-border cases involving the Internet. Following the repercussions of the Microsoft Ireland case on a global scale, the notion of “jurisdiction”, as initially adopted by the US courts, and also invoked in decisions rendered by STJ in Brazil, appears to refer specifically to its prescriptive character. It involves the State power to address issues of substantive laws governing legal relationships and transactions taking place within its territory, involving their nationals and foreign parties or even legal transactions overseas whose effects are felt by that State.36 Here, “jurisdiction” may also be construed, as 33 See M. AKERHURST, Jurisdiction in international law, British Yearbook of International Law (Brit. YB. Int. L) 1972/46, p. 145 et seq.; D. DONOVAN/ A. ROBERTS, The emerging recognition of universal civil jurisdiction, Am. J. of Int’L 2006/100, p. 142 et seq. 34 See A. MILLS, Rethinking Jurisdiction in International Law, Brit. YB. Int. L 2014/84, p. 194. 35 The expression cross-border disputes within the broader context of cross-border civil and commercial litigation is defined by the legal transactions and relationships having foreign elements or cases having transnational impacts. Thus, for the purpose of this article, as traditionally adopted in scholarly circles of PIL, cross-border cases may comprise a set of facts, situations and legal relations containing foreign elements, thus linked to different legal systems and their jurisdictional reach. For PIL issues related to cross-border cases in Internet and new technologies, see F. B. PASQUOT POLIDO (note 4), at 97. 36 For different approaches on prescriptive jurisdiction and the Internet, see S. WILSKE/ T. SCHILLER, International Jurisdiction in Cyberspace: Which States May Regulate the Internet?, Federal Communications Law Journal (Fed. Comm L.J) 1997/50, p. 117 et seq.; H. PERRITT JR., Jurisdiction and the Internet: Basic Anglo/American Perspectives Projects in the Coming 2000's, Internet Law and Policy Forum 1999, available at ; S.F. MILLER, Prescriptive Jurisdiction over Internet Activity: the need to define and establish the boundaries of cyberliberty, Indiana Journal of Global Legal Studies 2003/10, p. 227 et seq.; A. MILLS, The Law Applicable to Cross-Border Defamation on Social Media: Whose Law Governs

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil related to private international law, as “applicable law” or “substantive jurisdiction”.37 Prescriptive jurisdiction denotes, thus, the power of the State to enact laws and regulations and substantially regulate social facts and interactions taking place within its territory, and only exceptionally outside the territory, as a result of the extraterritorial reach of its laws (e.g. in criminal, tax, antitrust, environmental and anticorruption matters). A different scenario would be the one related to exceptional extraterritorial enforcement of laws, acts and decisions of a State in relation to another State. If we accept the argument that extraterritorial enforcement is more intrusive than extraterritorial (substantive) regulation, a State may exercise prescriptive jurisdiction where it deems proper, absent an express prohibition to the contrary under international law. But this State may not exercise enforcement jurisdiction in a foreign territory or overseas, absent an affirmative grant of authority under international law to do so.38 Why, then, is the debate on Internet and jurisdiction relevant at this stage of analysis? The cases handled by the Brazilian STJ on data retention and disclosure of private communication between Internet users mostly deal with issues of prescriptive jurisdiction from the standpoint of statutory provisions of Marco Civil, and not adjudicatory or executive jurisdiction itself. Even from a legal-formalistic point-of-view, the main rule set out at Art. 11 of Marco Civil, for example, submits certain legal relationships involving legal entities and natural persons to substantive regulation provided by Brazilian law. Art. 11 does not refer to “adjudicatory jurisdiction” or provide jurisdictional grounds allowing Brazilian courts to directly assert jurisdiction over cross-border Internet disputes. This approach would only be admissible under general or specific jurisdictional rules, such as those established by treaty and conventions to which Brazil is a Party and domestic procedural laws, such as the Code of Civil Procedure.39 For the sake of a “procedural maturity” in legal practice involving crossborder litigation, in particular as jurisdiction is entertained by higher courts in Brazil, a confusion between applicable law and jurisdictional issues in transnational Internet disputes would be inadmissible at this stage. The same applies to existing mechanisms dealing with international legal cooperation available to parties and courts when cross-border Internet litigation comes into consideration.

Free Speech in Facebookistan, Journal of Media Law 2015/7, p. 1 et seq.; J.R. REIDENBERG, Technology and Internet jurisdiction, Univ. of Penn L. Rev 2005/153, pp. 1951-1974. 37 S. WILSKE/ T. SCHILLE (note 36), at 127. 38 See, for instance, the Lotus case of 7 September 1927, 1927 PCIJ (Ser. A) No. 10, France v. Turkey, paras 45-46, available at . 39 See CPC, Article 13 (power to ascertain jurisdiction in civil matters based on treaties to which Brazil is a Party and the rules of the CPC) and Article 21 (jurisdictional rules for hearing cross-border civil and commercial disputes). For current literature on international civil litigation and PIL issues in Brazil, see N. ARAUJO, Direito Internacional Privado (note 18), at 176; F.B. PASQUOT POLIDO (note 4), at 73.

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IV. Marco Civil da Internet, Jurisdictional Bases and Extraterritorial Reach A.

Interactions between Marco Civil, US-Brazil MLAT and beyond

There seems to be a misleading perception among lawyers, judges and academics in Brazil about the nature, scope and policy of Marco Civil da Internet, in particular in those cases where Marco Civil’s provisions are invoked by courts to address solutions for cross-border Internet disputes. One could contend, for instance, that there is an apparent conflict between provisions of the US-Brazil Mutual Legal Assistance Treaty (MLAT) of 199740 and Art. 11 of Marco Civil, which sets forth the unilateral application of Brazilian law for certain transactions involving data collection and data processing where one of the acts occurs within Brazilian territory. The US-Brazilian MLAT establishes relevant procedural mechanisms for bilateral legal cooperation and mutual assistance in criminal matters. The treaty has been in the spotlight in past years in USBrazilian external affairs, particularly with the emergence of the most outrageous cases involving corruption by public officers and foreign and national companies in Brazil,41 and more recently also in connection with legal issues arising from cross-border cases involving global Internet corporations. With the increasing number of disputes between Internet users residing or domiciled in Brazil, big Internet corporations based in the US and Brazilian LEAs, it not surprising that Brazilian courts have been running in circles in order to address cross-border Internet cases in a pragmatic way. Such cases may be mirroring the old and not less contentious solutions reached by US courts in relation to disputes involving the limits and legality of cross-border electronic evidence (“eevidence”). E-evidences are usually referred to those evidences gathered by LEAs within the framework of the 1986 Stored Communications Act and prior to the enactment of the CLOUD Act in April 2018. The CLOUD Act, by its turn, led the US Supreme Court to vacate the Microsoft Ireland case.42 40 The US-Brazilian MLAT was transposed into Brazilian Law by Decree No. 3.810 of 2001. 41 International cooperation between Brazil, Switzerland and the US became of paramount importance in criminal and administrative proceedings related to cases adjudicated by domestic courts within the framework of “Zelotes” and “Lava Jato” operations. The anticorruption task-forces triggered several criminal investigations and prosecutions of individuals involved in corruption cases in Brazil with ramifications abroad, and main activities of Brazilian LEAs and judicial courts in that field were enhanced by international legal cooperation and mutual assistance with third countries. 42 For an overview of the development of the law-making process and case law leading to the 2018 CLOUD Act and the amendment of the SCA of 1986, see N. SCHULTHEIS, Warrants in the Clouds: How Extraterritorial Application of the Stored Communications Act Threatens the United States' Cloud Storage Industry, Brooklyn Journal of Corporate, Financial & Commercial Law 2014/9, p. 661 et seq.; A.J. PECORARO, Drawing Lines in the Cloud: Implications of Extraterritorial Limits to the Stored Communications Act, Creighton Law Review 2017/51, p. 75 et seq.; J. DASKAL, Microsoft Ireland, the Cloud Act, and International Lawmaking 2.0, Stanford Law Review Online

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil A “conflict” between Marco Civil and the US-Brazil MLAT, however, seems to be nothing more than apparent. Both pieces of statutory and treaty law are based on absolute distinct normative policies and operate at distinct levels. Nevertheless, any treaty signed by Brazil and duly incorporated into Brazilian law, such as the US-Brazil MLAT, is part of a domestic legal system. Courts could not simply ignore this important feature conforming international norms directly affecting the operation of transnational process. Art. 3 of Marco Civil, furthermore, establishes that treaties and conventions to which Brazil is a party shall also have direct application to legal relationships and to related subject matter covered by Marco Civil. The case law of the Brazilian STJ dealing broadly with compliance with judicial orders by lower courts for obtaining data abroad, and targeting Internet companies, also clashes with the legal and institutional constraints related to extraterritorial effects of specific provisions of Marco Civil. This may be the case, for instance, for Art. 11, as it refers to the application of Brazilian laws to transactions involving foreign Internet companies operating in Brazil. According to the existing views of STJ judges in cases about the relationship between the US-BR MLAT and Marco Civil, while refusing to comply with Brazilian LEA requests and judicial orders to disclose communication data located overseas, service providers (for example, Google, Facebook and Yahoo!) were circumventing Brazilian laws and violating State sovereignty.43 This seems to go back to similar issues raised in the Microsoft Ireland case, particularly due to the expansive approach taken by the US courts in relation to the scope, reach and effects of the warrants and subpoenas issued based on the 1986 Stored Communications Act within the preceding legal landscape to the enactment of the CLOUD Act.44 According to the provisions of the US CLOUD Act, enforcement authorities are explicitly authorised to request access to data located overseas. Certain foreign (non-US) authorities may also seek disclosure of data by US providers under specific conditions set forth by the Act, such as the eligibility of a “qualifying foreign country” and the existence of an executive agreement entered into by the US.45 The main objective of these measures is to allow the disclosure of

2018/71, p. 9 et seq. The Stored Communications Act (18 U.S.C. Chapter 121 §§ 2701– 2712, hereinafter “SCA”) is a statutory law addressing voluntary and compelled disclosure of “stored wire and electronic communications and transactional records” held by thirdparty internet service providers (ISPs) to governmental entities in the US, such as law enforcement agencies. It was enacted as Title II of the Electronic Communications Privacy Act of 1986. Full text is available at < https://www.law.cornell.edu/uscode/text/18/2703>. 43 See Judge Vaz opinion in STJ, Federal Prosecutor Office/Google Brasil Ltda., Inquérito 784-DF (note 24). 44 N. SCHULTHEIS (note 42), at 661. 45 CLOUD Act, Section 2713(5): “Disclosure To Qualifying Foreign Government: (A) It shall not constitute a violation of a protective order issued under section 2705 for a provider of electronic communication service to the public or remote computing service to disclose to the entity within a qualifying foreign government, designated in an executive agreement under section 2523, the fact of the existence of legal process issued under this

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Fabricio B. Pasquot Polido content, records and other information pertaining to Internet users/customers in the possession, custody or control of a provider of electronic communication services or remote computer services (e.g. cloud computing related services) without the need to go through traditional mechanisms of international cooperation based on a MLAT.46 As to Brazilian law, however, the Constitution and statutory law in general, such as the Code of Civil Procedure Law and Marco Civil, expressly rely on compliance with bilateral and multilateral agreements to which Brazil is a party. International cooperation may be not left to the sole discretion of LEAs and domestic courts, in particular due to the actual or potential risk that international obligations will be breached, third states’ sovereignty and parties’ individual rights will be violated, and transnational due process will be disregarded.47 Brazilian courts and LEAs are beckoning to a misperception, primary because they are obfuscated by the overall argument that MLATs are simply outdated, bureaucratic and do not correspond to the current needs of criminal prosecution or to the availability of technological tools for favouring international cooperation mechanisms.48 Indeed, there are compelling reasons for some State actors like Brazil (which concentrates a vast digital community comprised of citizens, Internet users and subscribers of storage and communication services provided by companies operating on global scale) to engage in negotiations of new versions of MLATs and procedural conventions. MLATs and procedural conventions could indeed be adapted to the demands of criminal prosecution and help fight transnational crimes. They could also enhance the existing framework for international cooperation in civil and commercial matters, which is quite useful for Internet related disputes at the transnational level. Nevertheless, it is not expected that Brazilian laws alone will resolve all future Internet cases, unlike the fast-track solutions encountered by the US Congress with massive support and lobbies from giant Internet corporations for the

section seeking the contents of a wire or electronic communication of a customer or subscriber who is a national or resident of the qualifying foreign government”. 46 See comments by J. DASKAL (note 42), at 11. 47 F.B. PASQUOT POLIDO (note 4), at 86. 48 The arguments related to inefficiency, the effectiveness deficit and the bureaucracy of MLATs in the adjudication of cross-border disputes involving Internet and communication data, are commonly repeated in literature and blogs commenting on the situation in the US prior to and after the enactment of the 2018 US CLOUD Act. See, for instance, C. CORDERO/ A. ALTSCHULER, Responding to foreign requests for data through the MLAT process, available at . (“The MLAT process has been widely recognised across sectors as a legal framework and bureaucratic process that has not kept pace with the expansion of worldwide use of U.S.-based communications providers, the increasing volume of electronic data being stored in different countries, and the varying business and technology models adopted by different platforms”). See also A. MCQUINN/ D. CASTRO, How Law Enforcement Should Access Data Across Borders, Information Technology & Innovation Foundation 2017, available at ; J. DASKAL (note 42), at 12.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil approval of the 2018 CLOUD Act.49 Cases depending on the disclosure of communication data between users, such as requested by Brazilian LEA Authorities and related to the Marco Civil Act, may be subject to technical difficulties and delays for several reasons. Under Brazilian laws, criminal investigations and judicial prosecution in cross-border cases are intensively interconnected with administrative proceedings and involve the participation of police officers, state and federal prosecutors, state and federal attorneys, the Department of Justice, the Ministry of Foreign Affairs and courts.50 Hence, a complete disregard for international mechanisms for obtaining eevidence – reproducing the same degree of inconsistency achieved by US in the course of past cross-border civil and criminal proceedings – would potentially set back the proper functioning of the transnational process. In sum, a pragmatic view supporting expedited procedural results to be achieved by LEAs and domestic courts in particular cases could not justify the violation of fundamental rights in civil and criminal proceedings associated with international litigation.51 B.

Role of PIL and Scope of Art. 11 of Marco Civil

Any norm-setting shift in relation to jurisdiction and the Internet at the global level does not prevent further concerns with regard to applicable law as a matter of prescriptive jurisdiction. With the transnational features of Internet-related transactions and interactions, there would be little room for avoidance of conflict of foreign privacy and data protection laws when distinct substantive applicable laws are taken into consideration. In this sense, private international law in all its main 49 The legislative process and the approval of the CLOUD Act in the US were met with strong criticism by scholars and civil society organizations supporting the interests of Internet users and small- and medium-sized companies carrying out activities in IT and Internet sectors. See, for instance, C. FISCHER, The CLOUD Act: A Dangerous Expansion of Police Snooping on Cross-Border Data, Electronic Frontier Foundation 2018, available at . 50 Cultural and political aspects related to cross-border criminal proceedings in Brazil shall not be overlooked when it comes to international legal cooperation and mutual legal assistance mechanisms. The rise of judicial networks worldwide and particularly in the Americas (such as the informal and formal cooperation networks between judiciary bodies, judges and prosecutors) led to a massive strengthening of international cooperation capabilities in the last fifteen years. Additionally, this period coincided with the adherence and ratification by Brazil of important treaties and conventions under the auspices of the United Nations, OECD, and Organization of American States. In addition, Brazil undertook international obligations in the field of human rights. Here, both institutional and legal landscapes have profound impacts on the operation of private international law in the fields of jurisdiction, international legal cooperation and enforcement of foreign judgements in civil and commercial matters. 51 In the EU, similar concern has also been raised in the Commission Staff Working Document Impact Assessment in the Proposal for a Regulation of the European Parliament and of the Council on European Production and Preservation Orders and Directive on Representatives (note 12).

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Fabricio B. Pasquot Polido operative sectors – applicable law, jurisdiction, enforcement of foreign judgements – may be at the crossroads. This leads to a pervasive argument, particularly when simplistic, technically-neutral or pragmatic views are invoked, as if private international law had nothing to do with broader policy concerns involving regulation of new technologies and the Internet. There are equally reasonable arguments supporting an engaged approach of private international law’s foundations with the development and outcomes of cross-border Internet and data litigation. As to the standpoint of the US CLOUD Act, for instance, Brazil so far does not fall within the scope of a “qualifying foreign government”, since it is not included within a framework for bilateral cooperation established by an executive agreement.52 This means that requests made directly to US Internet companies would still amount to a breach of the provisions of the 1986 SCA by the party disclosing data related to private communications. Similarly, where any act related to collection, storage, custody and treatment of records takes place in Brazil, or at least where one of the terminals or company providers is located in Brazil, then Art. 11 of the Marco Civil also applies. Art. 11 reads as follows: “Art. 11. In any operation of collection, storage, retention and treating of personal data or communications data by Internet access providers and Internet applications providers where, at least, one of these acts takes place within national territory, the Brazilian law must be mandatorily respected, including in regard the rights to privacy, to protection of personal data, and to secrecy of private communications and of logs. §1°. The rule contained in Art. 11 applies to the data collected in the national territory and to the content of the communications in which at least one of the terminals is placed in Brazil. §2°. The rule contained in Art. 11 applies even if the activities are carried out by a legal entity placed abroad, provided that it offers services to the Brazilian public or at least one member of the same economic group is established in Brazil §3°. Both Internet access providers and Internet application providers must provide, in accordance with existing regulation, information that allows the verification as to its compliance with Brazilian laws regarding the collection, storage, retention and treating of data, as

52 US Code, Ch. 121, Title 18, § 2713. Required preservation and disclosure of communications and records: “(1) Definitions.—In this subsection—(A) the term “qualifying foreign government” means a foreign government—(i) with which the United States has an executive agreement that has entered into force under section 2523; and (ii) the laws of which provide to electronic communication service providers and remote computing service providers substantive and procedural opportunities similar to those provided under paragraphs (2) and (5)”.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil well as, with regard to the respect of privacy and of confidentiality of communications”. 53 Art. 11, §2, establishes that Brazilian (substantive) law applies even if the relevant activities on data collection, processing and storage are carried out by a legal entity which has its headquarters abroad and that has an establishment in Brazil, thus belonging to the same group of companies. With regard to Marco Civil, specifically, those two provisions (Art. 11 and Art. 11, § 2), could lead to confusion: the purpose of the legislative formula was to unilaterally submit the regulatory framework (or legal regime) of certain legal relationships involving Internet companies and users (“collection, storage, and handling of records in which one of the terminals is located in Brazil”) to Brazilian laws, in order to technically protect data subjects residing or domiciled in Brazil. In addition, Art. 11 refers to a mandatory rule addressing specific transactions, i.e. “operation of collection, storage, retention and treating of personal data or communications data”, where any of the relevant connecting factors can be identifiable in a particular case. It seems clear, thus, that Art. 11 of Marco Civil has nothing to do with the jurisdiction of Brazilian courts to adjudicate cross-border Internet disputes. In turn, the provision is related to a matter of applicable law and regulatory standard, under which a specific policy goal is envisaged. It does not establish or define the jurisdiction of national courts to settle a dispute involving parties nor serve as a legitimate ground for LEAs to obtaining foreign evidence without resorting to international cooperation. This analysis converges, furthermore, with the essential definitions of the scope and policies in private international law, since the underlying issue arising from the interpretation and application of Art. 11 may be described a typical question of law applicable to Internet cases having foreign elements.54 The nature and classification of the rule contained in Art. 11 of the Marco Civil, on the other hand, points to a “unilateral” type of conflict rule. That is to say, under a plain normative perspective, it is a conflict rule designating a single applicable law and, in the case at stake, it refers to Brazilian law.55

53 A free translation of Marco Civil is available at . 54 J. DOLINGER, Direito Internacional Privado, Rio de Janeiro 2011, p. 20 et seq. 55 A typical example of a unilateral conflict rule is contained in Article 7, para. 1, of the Introductory Act to Brazilian Laws – LINDB (“Should the marriage take place in Brazil, the Brazilian law will be applicable with regard to spouses’ impediments and the formalities of the act”). According to Professor DOLINGER (note 54), at 213, the overall normative pattern in the Brazilian system of private international law indicates the formulation of bilateral conflict rules, with few exceptional cases relying on unilateralism. As DOLINGER contends, proponents of unilateralism maintain that the legislator only has legislative competence over “the application of his own laws, and law-making process cannot go beyond and attribute competence in respect to the laws of another country, as legislators will be able to define the scope of the law of their own countries and how their laws apply”. From a technical legal standpoint, unilateralism was the policy choice inspiring the solution envisaged by Article 11 of the Marco Civil, according to which certain categories of legal relationships and transactions are inescapably submitted to Brazilian laws. As a consequence, Article 11 reaches those legal relationships and transactions

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Fabricio B. Pasquot Polido Clearly, the legislative policy envisaged by Art. 11 of Marco Civil seems to be based on a territorial approach focused on the “place of activity” for the collection, storage, or treatment of data in Brazil. Hence, as a matter of governing law (and not jurisdiction, or technically, “adjudicatory jurisdiction”), Brazilian law would apply to any act relating to the collection, storage or processing of data, as long as one objective connecting factor is present in the case (for instance, where acts of collection or storage or treatment takes place in Brazil, where the service provision, targets Brazilian users residing or domiciled in Brazil and foreign companies or one of the affiliates of the same group of companies that is established in Brazil). The overall scenario described above reveals a sort of “private international law-related component” attached to Art. 11 of Marco Civil. Even if one could contend that Art. 11 does not reflect an authentic conflict rule, or the policy goal of the provision was simply to address a sort of extraterritorial application of Marco Civil’s provisions to certain legal transactions taking place on the Internet (acts of collection, storage or processing of data related to Internet users), the chosen normative design deals with a matter of prescriptive jurisdiction and not adjudicatory or executive jurisdiction. Finally, it is important to remark that the legal regulatory framework involving data transactions and related activities in the Internet environment in Brazil exposes the need for complex solutions also when it comes to international legal cooperation. As contended further, this does not suggest rigidity or bureaucracy in the way that LEA authorities, state governments and companies will interact. The set of rules provided by Marco Civil, the Brazil-US MLAT of 1997 and the Federal Constitution still rely on international cooperation mechanisms in the course of civil and criminal proceedings involving Internet cases, and in particular, for obtaining evidence which is located in a third country. Private communication data, thus, seems to be characterised as evidence located abroad, as long as foreign Internet and privacy laws characterise them as such, as assets that could be physically assimilated to other assets, property and information.56 emerging from the “collection, storage, custody or treatment” of data, whenever at least one of the acts occurred or has been carried out in Brazil. 56 One should refrain from automatically transplanting jurisdictional solutions such as those provided by examples taken from foreign case law. For example, the “Bank of Nova Scotia Doctrine”, forged in the US, recognises that a grand jury subpoena could be issued to “compel a company subject to U.S. jurisdiction to produce evidence stored outside the country if the evidence is within the company's possession, custody, or control” (cf. United States of America vs. Bank of Nova Scotia, United States Court of Appeals, Eleventh Circuit, 740 F.2d at 817, decision as of Aug. 14, 1984). Critically, see N. SCHULTHEIS (note 42), p. 685 et seq.; A. PECORARO (note 42), at 99. As previously recalled in this article (item IV), the underlying challenge arising from jurisdictional and international cooperation issues in Brazil involves a very specific trend in judicial law; to set aside judicial cooperation and Internet cases having foreign elements and compel companies to directly deliver private communication data stored in third countries to requesting LEAs. This ultimately results in indirect enforcement of criminal laws through intermediaries, with questionable impacts on defendants’ procedural rights, privacy rights and compliance with transparency and security on the Internet.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil A different approach in Brazilian law could only be sustained further where an amendment to statutory law (e.g. Civil Procedural Code, Arts. 26 et seq., and Marco Civil, Art. 11) is implemented or a new MLAT standard is adopted. So far there has been a unilateral derogation from existing legal provisions by Brazilian courts in their adjudicatory function in individual decisions concerning disputes involving LEAs, governments and global Internet corporations.57

V.

International Legal Cooperation and Foreign E-Evidence

A.

Value of International Legal Cooperation and Internet Cases

Another analytical framework proposed by this article refers to the limits of international legal cooperation mechanisms, such as those embedded by existing MLATs, and their operation in relation to the adjudication of Internet cases. Despite the existing hurdles, international legal cooperation mechanisms still matter in cross-border disputes, even where there is a growing pressure for the achievement of expedited solutions in the field of transnational criminal and anticorruption law. The Brazilian legal environment and practices appear to be influenced, until recently, by the massive demands of investigation and prosecution of crimes related to corruption at the domestic level. Such demands could not justify, however, a deleterious suppression of vital procedural steps and fundamental rights of parties in the transnational process. One could raise red flags, but it is also important to value the joint work by different actors and stakeholders in reshaping mechanisms related to cross-border access to electronic evidence. Domestic courts in Brazil, for example, may have the chance to engage in different exercises and pave the way for institutional dialogues designed to enhance the existing

For example, even under the SCA of 1986 (as amended by the CLOUD Act of 2018) or the Brazilian Marco Civil of 2014, direct disclosure made by companies may apply to data related to, or generated in connection with, content of private communication between users. This has been generically named “metadata”. They are also required to be disclosed upon judicial order, as set forth by Marco Civil of Internet and targeted by warrants issued on grounds of the 1986 SCA. Nevertheless, pre-existing legal constraints established by the Stored Communications Act before the enactment of the CLOUD Act, prevented US companies from delivering the content of private communication without passing through the MLAT mechanisms, which was further challenged in the Microsoft Ireland Case (note 23). As to the new solutions envisaged by the CLOUD Act, there must be a legal framework for data sharing of electronic evidence, based on the existence of the Executive Agreement entered into between US and a third country. As remarked above in this article, countries without an executive agreement with the US (and thus, not falling within the category of “qualifying third country”) will face difficulties in operationalising the cross-border transfer of data, an exception being made, however, for international cooperation. 57

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Fabricio B. Pasquot Polido cooperative structures and to support the Executive Branch’s tasks concerning international legal cooperation, all of them based on rule of law and due process.58 International legal cooperation, including MLAT mechanisms, also involves State sovereignty interests in preserving individual rights over property, goods, and information – broadly speaking, “assets” – located in these State’s territories. Such interests are equally relevant in the absence of treaties or statutory laws expressly establishing that “communication data” qualifies as “foreign evidence” or that communication is subject to a special regime in the case of international cooperation not requiring traditional mutual legal assistance or not complying with administrative mechanisms for obtaining evidence abroad. These technical issues would be only partially solved by the facilitated regimes established under the US CLOUD Act of 2018 or the proposed EU Regulation on European Production and Preservations Orders. As previously remarked, under specific conditions set forth by the US CLOUD Act, US LEAs may have access to data stored by US companies overseas, and foreign LEAs would have access to data stored in the US. Two requirements, though, are decisive for the implementation of this new type of cooperation mechanism: (i) the existence of an executive agreement between the US and a third state and (ii) the characterisation of the third state as a “qualifying foreign country”, so that LEAs involved can submit and process requests, circulating under the cooperative scheme, and further exchange electronic data to be obtained from IT companies, such as Internet service providers. As to the proposed European Regulation on Production and Preservation Orders, specifically, LEAs in EU Member States will be able to obtain direct access to electronic data from IT and Internet companies (both content and metadata), regardless of where data is located or where the company/service provider is based. The proposal’s main goal would be to create a “common EU framework on gathering cross-border evidence”, but this is not simple to achieve without criticism and a technical margin for “conflict” of privacy and/or data protection laws.59 58 I have already devoted some of my recent scholarly attention to related PIL aspects of transnational anticorruption law enforcement, particularly the intersections between institutional design, jurisdictional and treaties and conventions with regard to Brazilian cases. See F.B. PASQUOT POLIDO, Combate Global à Corrupção e o Direito Internacional Privado: primeiros esforços de uma sistematização necessária, in C. FORTINI (ed), Corrupção e seus Múltiplos Enfoques Jurídicos, Belo Horizonte 2018, p. 289 et seq. 59 See, for instance FAIR TRIAL, Fair Trial’s Position Paper “The new proposed EU Production and Preservation Orders”, available at , pp. 1-20. There are still existing obstacles for US companies to process requests to disclose content/private communication data to non-US judicial authorities, due to the statutory rules of the US Electronic Communications Privacy Act. The Trans-Atlantic cooperation between the US and the EU remains troublesome with respect to accessing cross-border evidence. For example, when receiving a direct Production Order from an EU judicial authority for content data, IT companies in the US will be confronted with a conflict between their legal obligations to comply with the EU Production Order and the US ECPA of 1986. The Proposed EU Regulation recognises the potential situations involving conflicting obligations with regard to data privacy laws and regulation of the requested country. The

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil In Brazil, on the other hand, the legal landscape is still heavily dependent on traditional international cooperation mechanisms based on rogatory letters and direct legal assistance. Furthermore, existing provisions in Marco Civil da Internet expressly refer to international law as part of the legal regime governing Internet users’ rights and use of the Internet in Brazil. Art. 3 of the Law establishes that rights and principles enshrined in Marco Civil must be construed and applied in conjunction with international treaties and conventions to which Brazil is a Party. This provision introduces a rule aimed at opening the Brazilian Marco Civil to international law with respect to the protection of Internet users’ rights and guarantees. The provision at stake likewise requires State compliance with procedural obligations, such as the duty for courts to resort to legal cooperation in the course of transnational proceedings (including cross-border proceedings and enforcement in civil and commercial matters). B.

Normative Interactions between Marco Civil and International Cooperation

As argued above, international legal cooperation in cross-border Internet cases cannot be regarded as an act of mere discretion left to domestic administrative and judicial authorities, such that a technical shortcut with no legal support would entitle LEAs to directly request companies to disclose data related to private communication between Internet users. At first blush, the existing legal framework of international legal cooperation establishes itself as secure cooperative platform designed by procedural treaties and conventions (such as those concluded by Member States of the United Nations, the Hague Conference of Private International Law and the Organization of American States), the Code of Civil Procedure (Articles 26 and 960), and the Constitution (Art. 4, broadly with regard to international cooperation in foreign affairs) in the interest of achieving overarching objectives of fairness and procedural compliance in the settlement of cross-border disputes. Article 4 of the Brazilian Constitution, in particular, lays down general principles governing foreign affairs from the standpoint of Brazilian State practice, and, therefore, provides a guiding principle under which cases of legal cooperation should be adjudicated.60 International legal scholarship in Brazil highlights the CLOUD Act offers the solution based on the executive agreement aimed at lifting the ban with countries which already fulfil the requirements related to privacy protection, freedom of expression and human rights obligations, including fair trial rights, and are, therefore, characterised as “qualifying foreign countries”. According to Fair Trial’s Position Paper: “The European Commission, in its Explanatory Memorandum, suggests that the way to resolve the issue is for the EU to enter into an (executive) agreement with the US to lift the ban, on US companies, from disclosing data to the EU authorities. Only then could EU judicial authorities use an EU Production Order and get hold of content data directly from US based service providers without having to go through the conflict of law resolution mechanism in respect of each individual data disclosure request”. 60 According to Article 4 of Brazilian Constitution, the following principles govern foreign affairs from Brazilian state practice: i - national independence; ii- primacy of human

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Fabricio B. Pasquot Polido direct interplay between the principle of “cooperation amongst people for the progress of humanity”, as set forth by the Constitution, and international legal cooperation and mutual assistance.61 Furthermore, the interactions amongst international cooperation networks are of utmost importance to foster the development of foreign affairs and diplomatic standards from the standpoint of Brazilian State practice. This premise also embraces the activities carried out by LEAs and domestic courts in relation to treaties and conventions. A second level of normative interplay between international legal cooperation schemes under the Brazilian Constitution refers to direct application and primacy of international human rights treaties and conventions. Paragraph 2 of Article 5 of the Brazilian Constitution provides that individual rights and guarantees protected by the Constitution do not exclude other rights and principles established by international treaties to which Brazil has committed itself. A third level of normative interplay goes back to the scope of application and reach of MLATs, such as the US-Brazilian MLAT, in connection with crossborder Internet cases. For the sake of compliance with the principle of international cooperation, as well as further principles of international law, no consistent interpretation of provisions of Marco Civil da Internet would subsist with an isolated interpretation of statutory law. The MLAT itself, being transposed into Brazilian law by Decree No. 3.810 of 2001, establishes obligations for signatory parties to comply with the laws of the requested State in cases involving mutual legal assistance and the exequatur of letters rogatory. With regard to the Brazilian legal system, in particular, the US-Brazil MLAT is part of municipal law, it is enforceable by administrative bodies and domestic courts in procedures associated with mutual assistance and it interacts with other national laws and regulations. Furthermore, Art. 3 of Marco Civil da Internet, as remarked above, mandates courts – as to the legal regime governing Internet user rights in Brazil – to respect other rights and principles established by treaties to which Brazil is a Party. This interplay, hence, reveals the importance of a practical result of international litigation and cross-border cases involving data collected in Brazil: judicial adjudicatory regimes are also bound to achieve a satisfactory degree of compliance with international law. rights; iii- self-determination of communities; iv- non-intervention; v- equality between States; vi- defence of peace; vii- peaceful settlement of disputes; viii- repudiation of terrorism and racism; ix-cooperation amongst people for the progress of humanity; xgranting of political asylum. Those provisions also serve as mandatory guidance in connection with the power of the Executive Branch to conclude treaties and conventions (Art. 84, VIII) and the power of the National Congress to approve the texts of treaties and conventions negotiated by the Executive Branch (Art. 49, I) and to clear treaties’ signature, adhesion or ratification procedures. 61 Cf. H. ACCIOLY, Tratado de Direito Internacional Público, São Paulo 2009, pp. 314-15 (with regard to the following opinion: “The principle, among the moral duties of States, is mutual assistance, which takes form itself in several ways. These include the assistance and cooperation for the administration of justice, in both civil and criminal matters, including the adoption of appropriate measures to facilitate the social action against crime”).

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil As to practical repercussions of international cooperation and mutual assistance-related mechanisms, Decree No. 3.810 of 2001 establishes compliance with the laws of the requested State at least on three distinct points: (1) Article 1(2)(h) restricts any kind of mutual legal assistance which would be prohibited by the laws of the requested State;62 (2) Article 5(3) establishes that requests for legal cooperation are made in accordance with the laws of the requested State;63 (3) Article 14(1) provides that enforcement of search and seizure orders shall be justifiable under the laws of the requested State.64 The existing normative interactions involving Marco Civil da Internet, the US-Brazilian MLAT, the Code of Civil Procedure of 2015 and the Brazilian Constitution appear to pave the way to a consistent interpretation of provisions on legal cooperation and mutual assistance in cross-border civil and criminal proceedings. Unlike the mainstream approach developed by case law of the Brazilian STJ, there are no legal statutory provisions or authoritative legal scholarship allowing LEAs and courts to skip international cooperation in cross-border Internet cases, in particular based on an eclectic and slippery interpretation of prescriptive jurisdiction (i.e. a matter of applicable law, such as in relation to Paragraph 2 of Art. 11 of Marco Civil). In US-Brazilian bilateral relations, moreover, are conducive to the following existing mechanisms for legal cooperation: i) exchange of information on foreign law; service of documents; ii) obtaining of foreign evidence; iii) location of persons or items; and, iv) search and seizure of assets, goods and data. All of them shall be accessed in line with the laws of requested State.65

Article 1(2)(h): “Assistance shall include: (….) h) any other form of assistance not prohibited by the laws of the Requested State”. 63 Article 5(3): “Requests shall be executed in accordance with the laws of the Requested State except to the extent that this Treaty provides otherwise. However, the method of execution specified in the request shall be followed except insofar as it is prohibited by the laws of the Requested State”. 64 Article 14(1): “The Requested State shall execute a request for the search, seizure, and delivery of any item to the Requesting State if the request includes the information justifying such action under the laws of the Requested State”. 65 See Article 2(2) of US-Brazil MLAT, with regard to the scope of assistance: “(a) taking the testimony or statements of persons; (b) providing documents, records, and items; (c) locating or identifying persons or items; (d) serving documents; (e) transferring persons in custody for testimony or other purposes; (f) executing requests for search and seizure; (g) assisting in proceedings related to immobilisation and forfeiture of assets; restitution; collection of fines”. In the case of Microsoft Ltda. vs. State of Mato Grosso, the STJ indeed admitted that the scope of international cooperation, under the US-Brazil MLAT, would be broad enough to encompass several feasible alternatives to assist lower courts in criminal proceedings initiated in Brazil. See STJ, Microsoft Ltda./State of Mato Grosso, Recurso em Mandado de Segurança No. 46.685 - MT (2014/0254825-8), Opinion of Judge Arruda Raposo, decision as of March 26, 2015, in DJe 06.04.2015 (in which the main issue in dispute dealt with the legality of a judicial order aimed at determining the disclosure of private communication data and data interception associated with e-mail accounts hosted by Hotmail in the course of criminal investigation proceedings). 62

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Fabricio B. Pasquot Polido C.

Constitutional Challenges Ahead: to Cooperate or Not?

As argued above, the overall practice of Brazilian courts appears to uncover both a jurisprudential disagreement and the incomprehension of judges and administrative bodies regarding distinct jurisdictional patterns associated with transnational civil and criminal litigation and the need for coherence and legitimacy in international legal cooperation. Apart from the uncertain results of a constitutional action filed by the Federation of Associations of Brazilian Companies in Information Technology – Assespro Nacional – before the Brazilian Supreme Court,66 challenging the decisions of lower courts which avoided resorting to international cooperation in cross-border Internet disputes,67 there are still valuable reasons for analytical scrutiny and critique of the decisions rendered in connection with previous Internet cases. In the decisions challenged by the constitutional action filed by Assespro Nacional, judges held that breach of privacy of communication data located abroad (such as in messages exchanged through e-mail accounts and social network platforms) would not depend on international cooperation procedures or related mechanisms. According to the rulings, Brazilian LEAs could directly turn to global corporations and their truncated corporate structures, such as Microsoft, Google, Facebook and Yahoo! in order to get the requested electronic data.68 More interestingly, courts have been basing their ratio decidendi on ambiguous arguments of “irrelevance of judicial cooperation” for the purpose of obtaining evidence or e-evidence abroad where at least one affiliate company belonging to the same group of defendant companies is located in Brazil69. Further, according to opinions given by Brazilian judges in those rulings, international legal cooperation mechanisms should not result in obstacles “contravening national 66 See the Brazilian Supreme Court, Docket ADC No. 51/2017, filed on November 28, 2017. The opinion on the case will be delivered by Justice Gilmar Mendes. So far there is no information about the schedule for the hearing. Information on the case and the procedural steps are available at . 67 For an overview of the case, see J. S. ABREU, Jurisdictional battles for digital evidence, MLAT reform, and the Brazilian experience, Revista de Informação Legislativa 2018/55, available at , p. 233 et seq. 68 The majority of the cases adjudicated by the STJ highlighted arguments on the disregard of international judicial cooperation and direct access to cross-border e-evidence through Internet intermediaries or IT companies (note 8). That aspect, in addition, reinforces the increasing trend of “indirect enforcement” of “enforcement through Internet intermediaries”. As Professor Joel REIDENBERG aptly remarks, this trend can be explained as resulting from the exponential level of re-engineering of the Internet infrastructure and the proliferation and dispersion of Internet actors in the past decades. According to the author, as direct enforcement became very expensive in times of concurrent objectives and policies towards domestic regulation of new technologies, States would have more incentives to pursue direct enforcement by means of intermediaries and proxies. Cf. J.R. REIDENBERG, States and Internet enforcement, University of Ottawa Law & Technology Journal (Univ. Ott L. & Tech. J.) 2003/1, pp. 222-223. 69 See Brazil 247 case (note 8); Facebook/Federal Prosecutor Office (note 8).

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil sovereignty”.70 As mentioned before, the latter argument was invoked by Judge Vaz in the 2013 landmark decision, in which the Brazilian STJ converged to the opinion that the defendant’s strategy to refer domestic courts to diplomatic channels to obtain data in a foreign country would amount to “an offense to Brazilian sovereignty”. According to Judge Vaz’s opinion, the practice reflected a “manoeuvre of global corporate policies aimed at overriding domestic laws”.71 In spite of the legitimate concurrent interests from national LEAs in their constitutional roles and the fight against organised crime in Brazil, there are enormous risks in expanding Judge Vaz’s arguments in favour of pragmatic solutions for criminal prosecution and investigation taking place within the national territory. These risks could affect further consistency and predictability in international civil and commercial litigation. Above all, transnational litigation has been a very important and familiar part of private international law as we know it. The modernisation introduced by the Code of Civil Procedure represented a turning point in terms of the existing State practice. It innovated it with an enhanced legislative design for international cooperation mechanisms (mutual assistance, exequatur of letters rogatory, enforcement of foreign judgements) and by giving priority to treaties and conventions (Arts. 26 and 27, CPC). This combination of factors shall lead domestic judicial courts, administrative bodies and central authorities to comply with procedural rules established by the statutory instruments. Furthermore, if there was a single argument based on the place of business establishment or the headquarters of the company exclusively to tackle procedural and substantive issues arising from cross-border disputes involving LEAs and companies carrying out activities in the Internet industry, why would it not be possible to admit a sort of “international cooperation waiver” for a Brazilian subsidiary with respect to evidence in control, or possession or custody of bank data by an affiliate company belonging to the same financial institution operating on a global scale? For instance, could a Brazilian subsidiary of Santander Bank be requested to deliver individual clients’ data which are in the custody, control and possession of a branch managed by a sister company in Spain? Would Santander Brazil be required to directly disclose/provide/deliver bank data of a Brazilian national or resident for a current account held overseas? As a valid comparative assessment, bank data and confidential information are just as sensitive as communication data and further personal data in the course of civil/criminal litigation. For the sake of consistency, it seems that e-evidence should receive fair treatment in case of cross-border disputes. E-evidence comprising user data in cross-border proceedings, apart from what might fall within the substantial scope of data protection laws (for instance, Brazilian General Data Protection Act,72 the STJ, Federal Prosecutor Office/Google Brasil (note 24). Ibidem (with regard to the following excerpt of Judge Laurita Vaz’s opinion: “To refer the Brazilian Judiciary Branch to diplomatic channels to obtain data overseas is to contravene national sovereignty, thus subjecting State powers to the unacceptable attempt by the company at stake to override domestic laws by means of corporate policy stratagems, who knows for what purpose”). 72 Law No. 13.709 of August 14, 2018. Full text in Portuguese is available at . 70 71

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Fabricio B. Pasquot Polido European GDPR), has to be handled as evidentiary matter subject to international legal cooperation. In addition, participation of Internet intermediaries would be done “within” and “in line with” the proceedings, and not outside of proceedings or in a non-transparent fashion based on LEA’s global corporate arrangements.73 A combined approach, in line with a reinforcement of transnational due process, would open a window for significant improvement of institutional design in cross-border litigation, particularly where States and non-State actors may undertake further work toward the formulation of standard rules for bilateral/ multilateral cooperation in the area. The modernisation of MLATs, thus, could not depend solely on the discretion of centralised efforts of the US as to executive agreements based on the CLOUD Act or on the EU’s future European Production and Preservation Orders. The alternative paths are broader in their scope, as well as in the stakes involved.

VI. Concluding Remarks This article attempted to cover some of the ongoing issues in the PIL/Internet research agenda. It referred to the Brazilian jurisdictional experiments as the core elements for analysis and further critique. As remarked, the PIL/Internet interplay may offer new avenues for exploring the existing narratives, boundaries and intersections between jurisdiction and international legal cooperation. This interplay offers an opportunity for a reappraisal of the institutional and legal designs related to the adjudication of cross-border Internet disputes. Emerging Internet cases are able to provide new policy designs for international civil litigation in a broad sense. This thus applies to PIL scholarship and international legal practice. With regard to the development of Brazilian case law on cross-border Internet disputes, specifically, and the scope of application of Marco Civil da Internet there is still much to unfold. The article intentionally considered the recent development brought by Marco Civil due to its relevance as a piece of statutory law, constantly remembered as one of the leading legal experiments devoted to regulation of Internet user rights at the domestic level. The main theoretical claim that I proposed here, highlighted the relationship between Marco Civil and prescriptive jurisdiction. One could also recall the importance and role of the distinctive jurisdictional patterns when Internet related transactions and cross-border disputes come into question. They inevitably touch not only the most traditional issues (e.g. the relationship between international law and municipal law, the limits of the 73 Similar concerns have been expressed by FAIR TRIAL (note 59), at 4-5; see also F.B. PASQUOT POLIDO (note 4), at 92 where I contend that the operability of international legal cooperation regimes – both in judicial and administrative spheres – shall rely more on the adequate scrutiny and balance of interests related to the preservation of the openness and transnational nature of the Internet, the fight against cyber and transnational organised crimes and, utmost, the protection of fundamental procedural rights, such as those provided by domestic constitutions and human rights treaties and conventions.

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Jurisdiction, Int’l Cooperation and Cross-Border Internet Disputes in Brazil territoriality principle and the extraterritorial application of domestic laws), but also the more challenging scenarios. Amongst them all, one could mention the diverging policy formulations by law-makers vis-a-vis the complexities of decision-making by national courts in their tasks associated with the adjudication of cross-border disputes and the revised role of international legal cooperation as one of the core operative pillars of transnational civil process. Although many of these issues have been discussed in the literature, both in PIL and Internet law, in past years, it seems that urgent messages have to be delivered to legislators, international negotiators and courts, which I could summarise in the following policy recommendations: 1) Coherence and consistency of normative instruments favouring the proper and fair adjudication of cross-border Internet disputes should be promoted also in fine tuning with PIL’s primary goals. 2) Prescriptive jurisdiction has to be exercised by the State in those areas as allowed by, and in line with, international law; this makes substantive regulation of the Internet (and the designing of Internet laws) a field of prospective and informed development within international law. 3) International legal cooperation is necessary and suitable for the adjudication of cross-border Internet disputes, particular in present times of “digital battles” amongst macro-regions of regulatory influence. 4) From a PIL standpoint relevant to transnational civil/commercial litigation, Internet user information and communication data stored in a third country have to be treated as evidence to be obtained, accessed or disclosed in the course of cross-border proceedings, with full respect for fundamental procedural rights, as provided by law. 5) There should be a precautionary approach for the handling of e-evidence by LEAs and global IT and Internet corporations, such that courts can also individually assess the power imbalances of parties involved in disputes, particularly where criminal investigations and proceedings have direct/immediate repercussions related to civil and commercial matters. 6) Indirect enforcement of criminal laws through Internet intermediaries cannot be the general rule to the detriment of defendants’ procedural rights, privacy rights and compliance with transparency and security on the Internet. 7) Specifically with regard to the Brazilian case, in view of the comprehensive legal framework established by the Constitution, Marco Civil, the Code of Civil Procedure and treaties and conventions to which Brazil is a Party, international legal cooperation in cross-border Internet cases could not be conceived as an act of mere discretion left unilaterally to domestic administrative and judicial authorities and to IT companies, which are ordered to disclose Internet user data. Brazilian LEAs, courts and governmental bodies have indeed an opportunity to reach a joint solution and explore new paths for modernisation of MLATs and options for negotiations with third countries.

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RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS IN BRAZIL A CURRENT OVERVIEW Lidia SPITZ*

I. II. III. IV.

VII.

Introduction Recognition versus Enforcement Procedure for Recognition Requirements for Recognition A. Jurisdiction of the Rendering Court B. Service of Process C. Enforceability of the Foreign Judgment D. Res judicata E. Formalities F. Public Policy The Practice of the STJ Reflected in Numbers Recent Relevant Judicial Decisions: Abengoa v. Ometto and Salazar and Others v. Chevron Conclusions

I.

Introduction

V. VI.

The recognition and enforcement of a foreign judgment is governed by the law of the requested State, which varies significantly from one country to another. The Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, which was adopted on 2 July 2019 at the 22nd Diplomatic Session of the Hague Conference on Private International Law,1 is expected to be an effective global instrument regulating the matter with uniformity. However, until the instrument is ratified by a significant number of countries, a successful * PhD and Master in International Law, State University of Rio de Janeiro (Universidade do Estado do Rio de Janeiro – UERJ). Partner at Nadia de Araujo Advogados. 1 The Judgments Convention was designed to promote access to justice and to facilitate cross-border trade and investment. It is expected to increase predictability and to reduce the costs and timeframes for the recognition and enforcement of a judgment in other jurisdictions. The origins of the Judgments Convention date back to 1992, and all material related to it is available on the website of the Hague Conference on Private International Law .

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Printed in Germany

Lidia Spitz litigant may have to overcome intricate, expensive, time-consuming and uncertain procedure in order to have a foreign judgment recognised and enforced in an alien State. This paper aims to provide a current overview of the mechanism for recognition and enforcement of foreign judgments in Brazil through which a decision, issued by a foreign jurisdiction, can produce legal effects in the country.2 This study will address not only formal aspects expressly covered by applicable law, but also the current interpretation given by the Superior Court of Justice (Superior Tribunal de Justiça or “STJ”) regarding foreign judgment recognition proceedings. However, the framework will be described in general terms, and will not focus on bilateral agreements or Mercosur regulation. Brazil is the world’s fifth largest country by area, and it is the world’s sixth most populous State, with over two hundred and eight million people.3 Brazil’s economic power is also impressive, being constantly in the sights of investors due to its natural resources and large consumer market. The number of judicial proceedings filed per year in Brazil reflects the magnitude of the country. Currently there are over eighty million proceedings pending before the national courts.4 This colossal mass of proceedings is clearly incompatible with a robust analysis of each case by the judges. In this context, a new, modern, and more flexible system was recently designed. The new Code of Civil Procedure (“CCP”, Law No. 13105/2015) is a federal law which has been in force since March 2016 and superseded the previous Code of Civil Procedure of 1973. The CCP aims to simplify and speed up the rules of procedure, encouraging dispute resolution by consensual means and giving greater autonomy to the litigants. The CCP also enhances some mechanisms to support the rendering of uniform decisions. Some private international law matters related to procedure are regulated by the new CCP, which includes several important changes to the Brazilian legal system. For instance, for the first time, the choice of a foreign court, inserted into an international contract, is given force. Until 2016, the recognition of party autonomy on the choice of forum was a very controversial matter, and in several cases the agreement between the parties was disregarded in favour of the Brazilian jurisdiction hearing the case. However, article 25 of the new CCP expressly foresees that Brazilian courts do not have jurisdiction to decide an action when, in an international contract, the parties have agreed on an exclusive foreign jurisdiction, and this argument is raised by the defendant in defence.5 Finally, Brazilian law is In this paper, the expressions “foreign judgments” and “foreign decisions” are used interchangeably, and always in the broader sense that will be clarified in item II below. 3 As reported by the Brazilian Institute for Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), available at . 4 According to the official report “Justice in numbers 2018 (base year 2017)” (Justiça em números 2018 – ano base 2017), available on the website of the National Council of Justice (Conselho Nacional de Justiça). 5 For an extensive study of Article 25 of the CCP, its main features and application in practice, see M. RIBEIRO/ L. SPITZ, A Convenção da Haia sobre os Acordos de Eleição de Foro e efeitos de sua ratificação pelo Brasil, in A. RAMOS/ N. DE ARAUJO (eds.), A 2

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Recognition and Enforcement of Foreign Judgments in Brazil compatible with a more contemporary perspective recognising party autonomy with respect to the choice of forum. With regard to the matter of recognition of foreign judgments, the new CCP regulates this topic in detail. This has resulted in great innovation since, until 2016, the subject was governed by an outdated federal law from 1942. In fact, the Law of Introduction to the Rules of Brazilian Law6 had only a couple of articles expressing the requirements for recognition of foreign judgments. The Code of Civil Procedure of 1973, which was in force until 2016, had only one article on the subject (Article 483). The procedure was governed by the Internal Regulations (Regimento Interno) of the STJ.7

II.

Recognition versus Enforcement

A judgment given by a foreign court shall only produce legal effects in Brazil after the procedure for recognition is concluded, unless otherwise provided by law or treaty.8 The recognition of a foreign decision in Brazil is called homologação,9 and it is a proceeding that is distinct from the enforcement, being conducted before a different court.10 Article 105(I)(i) of the Brazilian Federal Constitution provides that the STJ is the competent court to recognise foreign judgments.11 This provision was Conferência da Haia de Direito Internacional Privado e seus impactos na sociedade – 125 anos (1893-2018), Belo Horizonte 2018, p. 394-424. 6 Lei de Introdução às Normas do Direito Brasileiro, Decree Law 4657/1942, as amended. 7 Professor ANDRÉ DE CARVALHO RAMOS describes in detail the evolution of Brazilian legislative regulation on the topic of recognition and enforcement of foreign judgments: see A. RAMOS, Curso de direito internacional privado, São Paulo 2018. 8 Article 961 of CCP states that “a foreign decision shall only produce legal effects in Brazil after its recognition or the granting of the exequatur of the letters of request, unless otherwise provided by law or treaty”. 9 Professor BARBOSA MOREIRA explains that the homologacão corresponds to a formal act of recognition of the foreign judgment, carried out by a national body. Only once the homologação is duly finalised can the foreign judgment be able to produce effects in Brazil, by means of the procedure for enforcement, see J.C.B. MOREIRA, Comentários ao Código de Processo Civil, Vol.V, Articles 476 to 565, 16 ed., Rio de Janeiro 2011, p. 63. 10 Professor CARMEN TIBURCIO describes the distinction between recognition and enforcement of a foreign judgment in Brazil as follows: “the recognition consists of the production of any and all effect of the decision, while the enforcement consists of the practice of acts of forced constriction”. See C. TIBURCIO, As inovações da EC 45/2004 em matéria de homologação de sentenças estrangeiras, Revista de Processo, Vol. 4, 2012, p. 949 et seq. 11 The Superior Court of Justice (STJ), instituted by the Brazilian Federal Constitution of 1988, is the court responsible for standardising the interpretation of federal law throughout Brazil. It is the competent court to definitively resolve any civil and criminal disputes which do not involve a constitutional matter or should be decided by a specialised

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Lidia Spitz included by a relatively recent amendment to the Constitution (Constitutional Amendment 45/2004), which came into force in January 2005.12 For over one hundred years, the Brazilian Federal Supreme Court (Supremo Tribunal Federal) was the competent court to decide on recognition of foreign judgments.13 However, a very well appreciated reform of the Judiciary, aimed at reducing the number of proceedings before the Federal Supreme Court that were not directly related to constitutional matters, led to the change of competence to the STJ. It is worth highlighting that the newly enacted Brazilian CCP makes reference to “foreign decisions” and not to “foreign judgments”, as they were previously termed by the Brazilian Constitution and the Law of Introduction to the Rules of Brazilian Law. This change in terminology was made to reinforce the notion that it is not mandatory that the foreign decision be rendered by a court (i.e., by a judge or tribunal belonging to the judiciary) in the State of origin. Nonjudicial decisions, whatever they may be called, may therefore be recognised in the country even though they would need to be of a judicial nature under Brazilian law.14 In fact, the new terminology, although undoubtedly more precise, did not result in any change in the interpretation given by the STJ, which has always focused on the substance of the foreign decision in the recognition procedure. To mention a very interesting example, in 2012, the STJ recognised, for the first time, an ecclesiastical decision on the annulment of a religious marriage confirmed by the Supreme Tribunal of the Apostolic Signatura in the Vatican, which is the highest authority in the Catholic Church.15 Clearly the decision was not rendered by a

court. Additionally, the STJ has an original competence (competência originária) to decide on certain matters, among which is the recognition of foreign judgments. With regards to the subjects that are part of the original competence of the STJ, see T.A. ZAVASCKI, Jurisdição Constitucional do Superior Tribunal de Justiça, Revista dos Tribunais, Vol. 977, 2017, p.41 et seq. 12 With respect to the changes introduced by Constitutional Amendment 45/2004 on the topic of recognition and enforcement of foreign judgments, see C. TIBURCIO, As inovações da EC 45/2004 em matéria de homologação de sentenças estrangeiras. Revista de Processo, Vol. 4, 2012, p. 94 et seq. 13 Since the enactment of Law 221, dated 20 November 1894, the Brazilian Federal Supreme Court was the competent court to decide on the recognition and enforcement of foreign judgments. The Brazilian Federal Constitution of 1934 conferred status of constitutional provision to this rule. Since then, all other subsequent constitutions maintained the same rule of competence, until the change of competence to the STJ included in Constitutional Amendment 45/2004. 14 Article 961, first paragraph, of CCP states that: “a final judicial decision, as well as a non-judicial decision that would be of a judicial nature under Brazilian law, may be recognized”. 15 See Sentença Estrangeira (SE) 6516, STJ, rapporteur Justice FELIX FISCHER, date of judgment 16 May 2013. Brazil has an agreement with the Holy See (Decree 7107/2010) in which ecclesiastical decisions confirmed by the superior body of the latter are considered foreign judgments for recognition procedure purposes. Similarly, see Sentença Estrangeira Contestada (SEC) 11962, Special Panel of STJ, rapporteur Justice FELIX FISCHER, date of judgment 4 November 2015. All decisions issued by the STJ mentioned in this paper are

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Recognition and Enforcement of Foreign Judgments in Brazil judicial State court. However, it was considered as a foreign judgment for recognition purposes by the Brazilian legal system. Several other decisions illustrate the same amplified concept of foreign judgments and include non-judicial acts in their meaning. For example, the STJ considered, as a foreign judgment, a divorce granted by an administrative authority from an alien legal system, with no judicial intervention,16 as well as a custody agreement executed between the parents of a minor, ratified by a foreign administrative body.17 With respect to foreign arbitral awards, they are also considered foreign judgments and, therefore, are subject to the proceeding of homologação before the STJ. The difference between the recognition of a judicial foreign decision and the recognition of a foreign award is that the latter is governed by the provisions of Arbitration Law18 and treaties, in particular the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.19 The CCP is applicable as a supplementary law, as provided for in its Article 960, third paragraph. However, in practice, the requirements set out by the CCP for recognition and enforcement of foreign judgments are, in most decisions issued by the STJ, considered explicitly as the legal framework when the court is verifying whether the requirements for recognition were satisfied. The general rule, according to which a foreign decision shall only produce legal effects in Brazil after its recognition by the STJ, unless otherwise provided by law or treaty, is not applicable in cases of consensual divorce. According to paragraph 5 of Article 961 of the CCP, a foreign judgment of consensual divorce is enforceable in Brazil, regardless of its recognition by the STJ. In accordance with the ruling issued by the National Council of Justice20 (Conselho Nacional de Justiça), a foreign judgment on consensual divorce shall be registered directly with the Civil Registry of Individuals. This exceptional rule is applicable only to those cases where the divorce is consensual and results in the dissolution of the marriage (divórcio consensual or puro). When the spouses have executed any kind of agreement or have a legal decision determining issues related to child custody, maintenance obligations or division of assets, the divorce is available for public consultation on the website of the court, at . 16 See Homologação de Decisão Estrangeira (HDE) 303, STJ, rapporteur Justice LAURITA VAZ, date of judgment 9 June 2017 (divorce issued by an administrative Colombian authority); (ii) SEC 9533, Special Panel of STJ, rapporteur Justice GILSON DIPP, date of judgment 17 September 2014 (consensual divorce issued by an administrative Russian authority). 17 See SEC 5635, Special Panel of STJ, rapporteur Justice LAURITA VAZ, date of judgment 18 April 2012 (administrative decision issued in Germany which ratified the extrajudicial agreement with respect to the right of custody of a minor between his German father and Brazilian mother. In this case, the recognition request was refused because a Brazilian court had issued a decision on the same matter). 18 Law No 9307, dated 23 September 1996. 19 Enacted by Decree 4311, dated 24 July 2002. 20 Provimento No. 53, dated 16 May 2016.

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Lidia Spitz considered a qualified divorce. According to this hypothesis, the recognition of the foreign decision before the STJ is still required. Analysis of the STJ case law makes it clear that the rule that exempts consensual divorce from recognition is frequently applied in practice. It is possible to identify numerous decisions issued in 2017 and 2018 by Justice Laurita Vaz, at the time in the position of Chief Justice of the STJ, where she stated that there was lack of procedural interest in the recognition of a consensual divorce, and the proceeding should be dismissed with no judgment on the merits (article 485, VI, of the CCP).21 Once the foreign decision is recognised (homologada) by the STJ, it acquires the status of a judicial enforcement instrument (Article 515, VIII, of the CCP). Therefore, at that moment, the judgment creditor is entitled to pursue the enforcement of the judgment in accordance with Brazilian law (Article 523 et seq. of the CCP). The enforcement of the foreign judgment shall be processed before a federal court at the request of the party (Article 965 of the CCP). Any issues in the context of the enforcement of the foreign judgment, such as the possible need for revision of the amount determined for family maintenance in the decision,22 shall be discussed at the federal court, and not submitted to the STJ. Hence, in Brazil, recognition and enforcement of a foreign decision is a complex two-stage procedure before two different courts: the recognition is processed before the STJ, and the enforcement before a federal court of first instance.

III. Procedure for Recognition The recognition of a foreign judgment in Brazil shall be required by means of a proceeding filed electronically and addressed to the Chief Justice of the STJ.23 The filing requires a prior payment of judicial costs, corresponding to an amount See (i) HDE 986, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018; (ii) HDE 381, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018; (iii) HDE 1084, STJ, rapporteur Justice LAURITA VAZ, date of judgment 6 December 2017; (iv) HDE 418, STJ, rapporteur Justice LAURITA VAZ, date of judgment 14 November 2017; (v) HDE 405, STJ, rapporteur Justice LAURITA VAZ, date of judgment 4 September 2017; (vi) HDE 524, STJ, rapporteur Justice LAURITA VAZ, date of judgment 31 August 2017; (vii) HDE 420, STJ, rapporteur Justice LAURITA VAZ, date of judgment 29 August 2017. 22 See, for example, SEC 11650, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 19 August 2015. 23 In line with Article 216-A of the Internal Regulations of the STJ, the Chief Justice of the court is the competent authority for recognising a foreign decision. However, whenever the judgment debtor opposing recognition contests the request, the procedure shall be re-distributed to be judged by the Special Panel of the STJ (Article 216-K of the Internal Regulations of the STJ). 21

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Recognition and Enforcement of Foreign Judgments in Brazil inferior to fifty US Dollars.24 No security, bond or deposit is due from the party requesting recognition, even when he or she is a national of another State or has his or her residence in another State. As is the general rule applicable to any kind of action filed in Brazil, the party seeking recognition must have procedural interest in the suit (interesse processual) and legal standing to sue (legitimidade).25 Regarding legal standing, in most cases the judgment creditor of the decision issued in the State of origin corresponds to the party requesting recognition in Brazil, and the judgment debtor is the party opposing recognition. However, the Brazilian legal system allows any person that has an interest in the effects of a foreign judgment in the country to file the documents instituting the recognition proceeding.26 Therefore, it is possible that the party requesting recognition does not correspond to any of the parties that litigated in the State of origin. In some cases, under the auspices of the New York Convention on the Recovery of Maintenance Abroad, the Federal Public Prosecutor’s Office (Ministério Público Federal) has acted as the party seeking recognition.27 With respect to the procedural interest in the suit, this precondition shall be examined in light of the effects desired by the party requesting recognition if the request is granted. There is no mandatory correspondence between the procedural interest in the action and an economic goal. There is procedural interest in the procedure for recognition even when there is a similar action in progress in a Brazilian court involving the same parties and the same cause of action. As long as the Brazilian judgment does not become res judicata, the recognition request may be granted by the STJ, depending on the concrete circumstances of the case. As such, Article 24, sole paragraph, of the CCP states that the pendency of an action before Brazilian courts does not impair the recognition of a foreign judgment.28 The first-in-time res judicata judgment has priority.

24 According to Resolution STJ/GP No. 2, dated 1 February 2007, as amended, the judicial costs of a recognition proceeding in Brazil is 179’37 Brazilian Reais. (Annex A). 25 In line with Article 330, II and III, of CCP. 26 J.C.B. MOREIRA, Comentários ao Código de Processo Civil, Vol. V, Articles 476 to 565, 16 ed., Rio de Janeiro 2011, p. 85. 27 See (i) SEC 16.180, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 20 November 2017; (ii) SEC 13818, Special Panel of STJ, rapporteur Justice MAURO CAMPBELL MARQUES, date of judgment 16 December 2015; (iii) SEC 11438, Special Panel of STJ, rapporteur Justice MAURO CAMPBELL MARQUES, date of judgment 6 May 2015; and (iv) SEC 11430, Special Panel of STJ, Justice NAPOLEÃO NUNES MAIA FILHO, date of judgment 17 December 2014. In all cases, the Federal Public Prosecutor’s Office acted in the condition of Transmitting Agency, under the terms of Article 2 of the New York Convention on the Recovery Abroad of Maintenance, promulgated in Brazil by Decree 56,826/1965. 28 See (i) RE on EDCl on SEC 4127, STJ, rapporteur Justice GILSON DIPP, date of judgment 10 February 2014; (ii) AgRg on SE 4091, Special Panel of STJ, rapporteur Justice ARI PARGENDLER, date of judgment 29 August 2012; (iii) AgRg on SEC 854, Special Panel of STJ, rapporteur Justice NANCY ANDRIGHI, date of judgment 12 February 2011.

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Lidia Spitz In one interesting decision, the STJ affirmed the procedural interest of a legal entity in the recognition of an arbitral award, despite the fact that the legal entity was not a party to the arbitration that took place in the State of origin. The court considered that the effects of the arbitral award in Brazil could be useful for the party requesting recognition.29 In another case, the requesting party had its interest in the recognition of a foreign judgment on bankruptcy, affirmed. Once recognition was granted, this person could proceed with the exclusion of the opposing party from a certain partnership it had in Brazil.30 The recognition proceeding may be instituted by both parties involved,31 or the documents may be filed by one of the parties with the consent of the other. In both of these situations the proceeding will have an expedited course since the party against whom recognition is sought will automatically be considered duly served.32 When there is no evident consent of the party against whom recognition is sought, the Chief Justice of the STJ will determine his or her service once the filing of the documents instituting the proceeding with the court is completed. The service of process carried out in Brazil in the course of the recognition proceeding shall be made in accordance with national procedural law. If the party against whom recognition is sought is domiciled abroad, he or she must be served by letter of request (carta rogatória); if domiciled in the country, by mandate (carta de ordem).33 This formula is mitigated in some situations. In cases of recognition of divorce decisions, the STJ takes the position that, even when the party against whom recognition is sought is domiciled abroad, the service is valid where published in an official newspaper if the spouses have had no contact with each other for a few years (when they have neither shared assets, nor minor children).34 If the party against whom recognition is sought is not found, either in the country or abroad, the party seeking recognition will have to produce convincing evidence that he or she has exhausted all possible means of finding the other party 29 SEC 1302, Special Panel of STJ, rapporteur Justice PAULO GALLOTTI, date of judgment 18 June 2008. 30 SEC 1735, Special Panel of STJ, rapporteur Justice ARNALDO ESTEVES LIMA, date of judgment 12 May 2011. 31 See (i) HDE 802, STJ, rapporteur Justice LAURITA, VAZ, date of judgment 1 March 2018; (ii) HDE 949, STJ, rapporteur Justice LAURITA VAZ, date of judgment 5 February 2018; (iii) HDE 730, STJ, rapporteur Justice LAURITA VAZ, date of judgment 2 October 2017. 32 See (i) HDE 634, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018; (ii) HDE 681, STJ, rapporteur Justice LAURITA VAZ, date of judgment 3 October 2017; (iii) HDE 707, STJ, rapporteur Justice LAURITA VAZ, date of judgment 6 September 2017. 33 See (i) HDE 1025, STJ, Justice LAURITA VAZ, date of judgment 1 February 2018; (ii) HDE 250, STJ, rapporteur Justice LAURITA VAZ, date of judgment 19 April 2017. 34 See (i) SEC 11700, Special Panel of STJ, rapporteur Justice O.G. FERNANDES, date of judgment 29 November 2017; and (ii) SEC 15004, Special Panel of STJ, rapporteur Justice NANCY ANDRIGHI, date of judgment 15 February 2017.

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Recognition and Enforcement of Foreign Judgments in Brazil without success. If his or her finding is not possible at all, despite all investigations to trace the party against whom recognition is sought, a formal service will be authorised by publication in an official newspaper.35 Once served, the party against whom recognition is sought has a fifteen-day term to raise (and electronically file) his or her defense.36 In all cases in which a defence is raised, the proceeding is distributed to one of the Justices who is part of the Special Panel (Corte Especial) of the STJ.37 The Special Panel includes the fifteen most senior Justices of the court, and among other specific attributions, is responsible for deciding the procedures for recognition when a defence has been raised. As a general rule, decisions issued by the Special Panel are collegium decisions. However, the rapporteur may decide as a single judge in those cases where there is established case law of the Special Panel of the STJ with respect to the topic, which has occurred very often.38 The Brazilian legal system allows the granting of interim measures (Article 961, third paragraph, of CCP) within recognition proceedings, although in practice this kind of decision has occurred in very few cases.39 The Public Prosecutor’s Office (Ministério Público) has mandatory standing in all recognition proceedings (as there is a public interest involved), and may oppose the granting of the recognition request.40 When the recognition request is granted, the resulting Brazilian decision will give the foreign decision the same effects in Brazil as it had in the State of origin.41 It is easy to identify numerous decisions granted by the STJ in which the

See (i) HDE 1413, STJ, rapporteur Justice LAURITA VAZ, date of judgment 13 March 2018; (ii) HDE 196, STJ, rapporteur Justice LAURITA VAZ, date of judgment 5 March 2018; (iii) HDE 583, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018. 36 As mentioned in Article 216-H of the Internal Regulations of the Superior Court of Justice. 37 In line with Article 216-K of the Internal Regulations of the Superior Court of Justice. 38 See SEC 15.897, STJ, rapporteur Justice MAURO CAMPBELL MARQUES, date of judgment 26 June 2017, (ii) SEC 9421, STJ, rapporteur Justice JORGE MUSSI, date of judgment 18 December 2017; (iii) HDE 255, STJ, rapporteur Justice HERMAN BENJAMIN, date of judgment 30 November 2017; (iv) SEC 11.609, STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 6 September 2017. 39 The following decisions granted the provisory measure request (i) HDE 1093, rapporteur Justice LAURITA VAZ, date of judgment 28 November 2017; and (ii) HDE 880, rapporteur Justice LAURITA VAZ, date of judgment 6 September 2017. The following decisions denied the provisory measure request: (i) HDE 626, STJ, rapporteur Justice LAURITA VAZ, date of judgment 13 June 2017; and (ii) HDE 401, STJ, rapporteur Justice LAURITA VAZ, date of judgment 30 March 2017. 40 In line with Article 216-L of the Internal Regulations of the Superior Court of Justice. 41 As a general rule, but not specifically addressing this topic, see Article 17 of the Law of Introduction to the Rules of Brazilian Law. In the Brazilian doctrine, see J.C.B. 35

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Lidia Spitz court expressed that the Brazilian decision on recognition had limited scope to give effect to a judgment rendered by a foreign court in accordance with its extent and content.42 There is no possibility of the STJ expanding the effects conferred by the authority that has issued the decision in the State of origin.43 Any issues not covered by the foreign decision should be decided by means of an independent claim, filed either in Brazil or abroad, and not in the recognition proceeding before the STJ, in which the scope is fairly limited to certain formal issues. On the other hand, the Brazilian legal system allows the partial recognition of foreign decisions, which has the consequence of partially granting effects to a foreign judgment (Article 961, second paragraph, of CCP). In this particular scenario, the foreign decision is not producing, as a whole, legal effects, but only to some extent. The partial recognition is very frequently granted by the STJ and has been authorised in the Brazilian legal system since 2005 by Resolution of the STJ nr. 9.44 The decisions rendered by the Chief Justice or the rapporteur may be appealed.45 Notwithstanding, an extraordinary appeal to the Federal Supreme Court of the referred decision is not possible, except when there is effectively a constitutional matter under discussion.46 The Brazilian legal system embraces the philosophy that there shall be no review of the merits of the foreign judgment in the procedure for recognition. The analysis carried out by the STJ is limited to an assessment of the legal requirements set out in the CCP.47 This formal assessment of the foreign decision is called MOREIRA, Comentários ao Código de Processo Civil, Vol. V, Articles 476 to 565, 16th ed., Rio de Janeiro 2011. 42 See (i) HDE 2521, STJ, rapporteur JOÃO OTÁVIO DE NORONHA, date of judgment 21 February 2019; (ii) HDE 1986, STJ, rapporteur JOÃO OTÁVIO DE NORONHA, date of judgment 11 February 2019; (iii) HDE 1160, STJ, rapporteur Justice LAURITA VAZ, date of judgment 7 December 2017. All those decisions share the same text which confirms that the Brazilian recognition decision has the limited scope to give to the foreign decision the same effects in Brazil it had in the State of origin (“considerando o juízo meramente homologatório do presente procedimento, em que a decisão proferida limita-se a dar eficácia à sentença estrangeira nos exatos termos em que prolatada”). 43 See (i) SEC 4278, Special Panel of STJ, rapporteur Justice NAPOLEÃO NUNES MAIA FILHO, date of judgment 6 May 2015; (iii) SEC 7670, STJ, rapporteur Justice RAÚL ARAÚJO, date of judgment 6 May 2015. 44 According to Article 961, para. 2, of CCP and Article 216-A, para. 2, of the Internal Regulations of the Superior Court of Justice. See (i) HDE 176, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 15 August 2018; (ii) SEC 7693, Special Panel of STJ, rapporteur Justice RAUL ARAÚJO, date of judgment 5 April 2017; (iii) SEC 8060, Special Panel of STJ, rapporteur Justice HERMAN BENJAMIN, date of judgment 7 December 2016. 45 In accordance with Article 216-M of the Internal Regulations of the Superior Court of Justice. 46 See RE 598770, Federal Supreme Court, rapporteur Justice LUIS BARROSO, date of judgment 12 February 2014. 47 See (i) SEC 6855, Special Panel of STJ, rapporteur Justice JORGE MUSSI, date of judgment 16 August 2017; (ii) SEC 15245, Special Panel of STJ, rapporteur Justice

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Recognition and Enforcement of Foreign Judgments in Brazil juízo de delibação,48 and corresponds to an examination of the foreign decision against the fundamental principles of the Brazilian system, such as due process rights, the right to be heard, the respect of human rights, as well as the compatibility with public policy.49 Therefore, the extent of the defence that may be raised by the party against whom recognition is sought is very limited. The legal discussion is limited to the fulfilment, in the specific case, of the legal requirements set out in the law. This is called a “limited litigation system” (sistema de contenciosidade limitada), whereby the defence may only address the non-compliance with the recognition requirements determined by Article 963 of the new CCP.50 The decision issued by the STJ with respect to the fulfilment or not, of the requirements for recognition is a decision on the merits.51 However, it is important to bear in mind that the merits of the Brazilian decision on recognition should not be confused with the merits of the dispute which was decided in the State of origin. The merits of latter decision cannot be reviewed in the procedure for recognition.

IV. Requirements for Recognition The new CCP establishes six requirements which should be met for the granting of recognition of the foreign judgment. They are cumulative requirements, which means that if any one of them is not fulfiled, the recognition shall be refused. Although at first sight the meaning of each requirement seems to be clear and simple, in fact they all require an accurate assessment. The STJ has interpreted the meaning and extension of each requirement for many years, and some outlines designed for the fulfilment of each one is described below, albeit not exhaustively.52 NAPOLEÃO NUNES MAIA, date of judgment 21 June 2017; and (iii) SEC 15733, Special Panel of STJ, rapporteur Justice MARIA THEREZA DE ASSIS MOURA, date of judgment 19 April 2017. 48 Professor MARISTELA BASSO explains that the juízo de delibação corresponds to an assessment of the external requirements and legitimacy of the foreign decision, with no interference either on the merits or the reasoning of the foreign judgment. See M. BASSO, Curso de direito internacional privado, 5th ed., São Paulo 2016, p. 397. 49 See (i) SEC 14.679, Special Panel of STJ, rapporteur Justice O.G. FERNANDES, date of judgment 7 June 2017; (ii) SEC 7634, Special Panel of STJ, rapporteur Justice NAPOLEÃO NUNES MAIA FILHO, date of judgment 7 December 2016; (iii) SEC 10076, Special Panel of STJ, rapporteur Justice O.G. FERNANDES, date of judgment 20 May 2015. 50 With respect to the limited litigation system, see SEC 9412, Special Panel of STJ, rapporteur Justice JOÃO OTÁVIO DE NORONHA, date of judgment 19 April 2017. 51 In regards to the merits of the recognition action in Brazil, see N. DE ARAUJO, Direito Internacional Privado: teoria e prática brasileira, Revista dos Tribunais, 8th ed., São Paulo 2019, p. 260 et seq. 52 A recent analysis of the requirements for recognition of a foreign judgment in Brazil was accurately made by R.F. BECKER, Homologação de decisão estrangeira:

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Jurisdiction of the Rendering Court

The first requirement is that the decision should be rendered by an authority with jurisdiction to decide (Article 963, I, of CCP). The reference made in the CCP is to “competent authority”, not to “competent judge”, as previously stated in the Law of Introduction to the Rules of Brazilian Law. This change of terminology was made to clarify that the entity issuing the decision in the State of origin does not necessarily need to be formally part of the local judiciary. To mention some examples, the STJ considered that the “competent authority” could be a Civil Registry in Denmark,53 the City Hall of Kanagawa city, Japan,54 or the Notary Office in Bogota, Colombia. Although the Brazilian judicial system does not interfere with the direct jurisdiction of the court in the State of origin, the recognition procedure of the foreign judgment indirectly results in an assessment, from a domestic perspective, of whether the jurisdiction of the court of origin was legitimate. This is known as indirect jurisdiction. In Brazil, the indirect control through the procedure for recognition has resulted in an overly “generous” interpretation of what constitutes legitimate exercise of jurisdiction since the STJ only verifies whether the exclusive bases for jurisdiction of the Brazilian judicial authority were not breached in a given case.55 In fact, as stated in Article 964 of the CCP, the foreign decision shall not be recognised when the Brazilian courts have exclusive jurisdiction over the matter. The limitation of the indirect control of jurisdiction to those cases covered by exclusive bases for jurisdiction corresponds to a confirmation of the jurisdiction of the court of origin in all other hypotheses. This minimal control is insufficient to provide an accurate assessment of the connection of the case with the State of origin from a Brazilian perspective. Additionally, this restricted indirect control does not properly protect the Brazilian system as a whole, and Brazilian litigants in particular, against the improper exercise of jurisdiction.56 comentários aos Arts. 960 a 964 do CPC, in S. RIBEIRO/ R.C. GOUVEIA FILHO/ I. PANTALEÃO/ L. GOUVEIA (eds.), Novo Código de Processo Civil Comentado: Tomo III – Arts. 771 a 1072, São Paulo 2017. 53 HDE 476, STJ, rapporteur Justice LAURITA VAZ, date of judgment 9 August 2017 (recognition of a certificate of divorce). 54 HDE 421, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018 (recognition of an administrative decree of adoption). 55 Sharing the same view of the limited assessment of the indirect control of jurisdiction in Brazil, see N. DE ARAUJO/M. DE NARDI, Projeto de Sentenças Estrangeiras da Conferência da Haia: por um regime global de circulação internacional de sentenças em matéria civil e comercial, Revista Estudos Institucionais, Vol. 2, No. 2, p. 707-735, 2016, p. 714. 56 Criticising the indirect control of jurisdiction carried out by the STJ, see M. DE NARDI, Controle indireto da jurisdição internacional: a “autoridade competente” na homologação de sentença estrangeira no Brasil, Revista da ESMAFE/RS: Escola Superior da Magistratura Federal no Rio Grande do Sul, Vol. 1, 2017, p. 77 et seq.; L. SPITZ, Necessidade e viabilidade do controle indireto da jurisdição estrangeira na ação de homologação no Brasil: inspiração no Projeto de Sentenças da Conferência da Haia, Tese

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Recognition and Enforcement of Foreign Judgments in Brazil B.

Service of Process

The second requirement for recognition expressed in the CCP is that the foreign decision should be preceded by suitable service of process, even when the judgment was rendered by default (Article 963, II, of CCP). This requirement, which is related to a formality that must have been observed in the proceeding that took place in the State of origin, has the purpose of protecting the defendant, who has the right to be heard. From a Brazilian perspective, it is essential that the defendant in the State of origin had the opportunity to arrange for his defence. When the defendant of an action carried out in another jurisdiction is domiciled in Brazil, as a general rule, he or she must be served by letter of request. On the other hand, if the defendant is domiciled abroad, he must be duly served in accordance with the relevant State law. There are numerous decisions issued by the STJ which address the invalidity of service of process in Brazil or in the foreign jurisdiction.57 Recently the STJ mitigated the interpretation according to which the defendant domiciled in Brazil should necessarily be served by letter of request. In cases where the parties have agreed in their international contract that service should be made by mail, and there was enough evidence that the defendant was duly served by mail, the STJ has considered the requirement fulfilled.58 Such an interpretation ensured compliance with the parties’ agreement and is also in accordance with the Brazilian law with respect to service by mail in internal judicial cases. In the case of a foreign arbitral award, the sole paragraph of Article 39 of the Arbitration Law permits service by mail, provided the Brazilian party is granted proper time to present its defence. In fact, the STJ has already confirmed that, in an international arbitral proceeding, the Brazilian party does not need to be served by letter of request; service by mail is permitted since arbitral tribunals are private bodies.59 It is worth mentioning that Brazil has ratified the Hague Convention of 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters,60 which has been in force since 1st June, 2019. Doutorado em Direito – Faculdade de Direito, Universidade do Estado do Rio de Janeiro, Rio de Janeiro 2018. 57 See (i) SEC 13332, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 4 May 2016 (required party domiciled in Brazil and not properly served by letter of request); and SEC 10135, STJ, rapporteur Justice HUMBERTO MARTINS, date of judgment 6 November 2015 (required party domiciled in Switzerland and served in accordance with the national laws of Switzerland). 58 See (i) HDE 896, Special Panel of STJ, rapporteur MARIA THEREZA DE ASSIS MOURA, date of judgment 16 May 2018; (ii) HDE 89, Special Panel of STJ, rapporteur MARIA THEREZA DE ASSIS MOURA, date of judgment 18 October 2017. 59 See (i) SEC 10702, Special Panel of STJ, rapporteur Justice LAURITA VAZ, date of judgment 4 March 2015; (ii) SEC 8847, Special Panel of STJ, rapporteur Justice JOÃO OTÁVIO DE NORONHA, date of judgment 20 November 2013; (iii) SEC 6760, Special Panel of STJ, rapporteur Justice SIDNEI BENETI, date of judgment 25 April 2013. 60 Enacted by Decree 9,734, dated 20 March 2019.

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Lidia Spitz C.

Enforceability of the Foreign Judgment

The third requirement is that the foreign judgment should be enforceable in the country where it was rendered (Article 963, III, of CCP). There is no need to prove that the decision became res judicata. The evidence that the foreign decision is final is sufficient; meaning, it is not subject to any kind of appeal in the State of origin.61 Therefore, according to the Brazilian system, even in cases where the judgment does not have the force of res judicata in the State of origin, it can be recognised in the country as long as it is enforceable.62 If there is any kind of judicial order in force in the State of origin, discontinuing the effects of the decision, even temporarily, the foreign judgment cannot be recognised in Brazil.63 In some situations, the fulfilment of this requirement is mitigated. In the hypotheses of consensual divorce, the STJ waives the demonstration of any evidence of enforceability of the foreign decision in the State of origin, assuming that the decision is final in that state.64 In addition, in cases of divorce, the requirement may be presumed to be fulfiled when there is a significant time lapse between the date of the judgment of the foreign decision and the filing of the recognition proceeding.65 D.

Res judicata

The fourth requirement is that the foreign decision should not violate a Brazilian res judicata judgment (Article 963, IV, of CCP). This requirement is relatively simple to understand and demonstrate. The party seeking recognition will have his or her request refused if it is shown that there is a res judicata judgment in Brazil with respect to the same dispute.66 The burden of proof is on the party against whom recognition is sought.67 61 See (i) SEC 16208, Special Panel of STJ, rapporteur Justice NANCY ANDRIGHI, date of judgment 29 November 2017; (ii) SEC 8004, Special Panel of STJ, rapporteur Justice RAUL ARAÚJO, date of judgment 16 September 2015. 62 See (i) SEC 15886, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, date of judgment 18 October 2017; (ii) SEC 9021, Special Panel of STJ, rapporteur Justice FELIX FISCHER, date of judgment 4 March 2015. 63 SEC 14812, Special Panel of STJ, rapporteur Justice NANCY ANDRIGHI, date of judgment 16 May 2018. 64 See (i) SEC 11912, STJ, Special Panel of STJ, rapporteur Justice HERMAN BENJAMIN, date of judgment 20 November 2017; (ii) SEC 10907, Special Panel of STJ, rapporteur Justice JORGE MUSSI, date of judgment 19 October 2016. 65 SEC 4513, Special Panel of STJ, rapporteur Justice NAPOLEÃO NUNES MAIA FILHO, date of judgment 6 May 2015. 66 See (i) SEC 11.609, Justice BENEDITO GONÇALVES, date of judgment 6 September 2017; and (ii) SEC 1271, Special Panel of STJ, rapporteur Justice CASTRO MEIRA, date of judgment 9 June 2011. 67 SEC 16208, Special Panel of STJ, rapporteur Justice NANCY ANDRIGHI, date of judgment 29 November 2017.

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Recognition and Enforcement of Foreign Judgments in Brazil On the contrary, when there is no final decision issued by a Brazilian court on the same dispute, there is no obstacle for the granting of the recognition request since the judgment which will first become res judicata will be enforceable. In fact, as set forth in Article 24, sole paragraph of the new CCP, the pendency of an action before Brazilian courts does not impair the recognition of a foreign judgment with respect to the same dispute.68 E.

Formalities

The fifth requirement determines that the foreign decision shall be accompanied by an official translation, unless its waiver is provided for by treaty (Article 963, V, of CCP). Specifically, with regard to the need for legalisation, it is relevant to mention that since 2016, Brazil has been party to the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention).69 Therefore, documents which are transmitted in accordance with the Apostille Convention are exempt from the requirement of consular legalisation formalities.70 F.

Public Policy

Finally, the decision shall not contain an express violation of public policy (Article 963, VI, of CCP). As it is widely accepted, the public policy defence should be used exceptionally in Brazil, and only in those cases where the foreign decision is manifestly incompatible with public policy.71 However, recourse to the public policy defence in the country occurs more often than it should, as it is a powerful means to obstruct the recognition request and the only one where the merits can at least be discussed in some measure. The STJ uses the argument of public policy as a reason to deny the request in some cases where the court should refer to other express requirements as barriers for the granting of recognition.72 See (i) SEC 11939, Special Panel of STJ, rapporteur Justice MARIA THEREZA DE ASSIS MOURA, date of judgment 6 May 2015; (ii) SEC 11138, Special Panel of STJ, rapporteur Justice MAURO CAMPBELL MARQUES, date of judgment 3 June 2015. 69 In Brazil, promulgated by Decree 8,660/2016, combined with Articles 2 and 3 of Resolution No. 228 of the National Council of Justice (Conselho Nacional de Justiça). 70 See (i) HDE 679, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 February 2018; (ii) HDE 363, STJ, rapporteur Justice LAURITA VAZ, date of judgment 8 November 2017; (iii) HDE 825, STJ, Justice LAURITA VAZ, date of judgment 18 September 2017; (iv) HDE 440, STJ, rapporteur Justice LAURITA VAZ, date of judgment 1 June, 2017 (v) HDE 483, STJ, rapporteur Justice LAURITA VAZ, date of judgment 17 May 2017. 71 With respect to Brazilian public policy, see N. DE ARAUJO, Direito Internacional Privado: teoria e prática brasileira, Revista dos Tribunais, 8 ed., São Paulo 2019. 72 Professor GUSTAVO RIBEIRO developed a specific study regarding the improper use of public policy (in some cases) as a reasoning for denial of the recognition request by 68

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Lidia Spitz For example, where a foreign court decides on matters over which Brazil has exclusive jurisdiction, the STJ denies the recognition request alleging that the judgment is incompatible with public policy.73 This reasoning is true, but the decision should be grounded on the lack of jurisdiction of the tribunal of origin, which consists in a specific requirement for recognition expressed in Article 963, I, of CCP. At the end of the day, a violation of any of the requirements could fall under the public policy exception.

V.

The Practice of the STJ Reflected in Numbers

From January 2005, the year in which the STJ became competent to decide the procedure for recognition, until December 2018, a total of 18’712 proceedings for recognition of foreign judgments were filed with the court. The average number of new proceedings filed per year is 1’337. A more precise analysis of the distribution of recognition proceedings per year reveals the following: Foreign Decisions - Superior Court of Justice Total: 18,712 Average: 1,337 1,786

1,898

1,994

1,638

1,613 1,348 1,179 864

837

929

1,030

1,308

1,225 1,063

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Superior Court of Justice

In 2005, the high number of recognition proceedings was due to the change of competence from the Federal Supreme Court to the STJ, introduced by Constitutional Amendment 45/2004. The proceedings that were in progress at the Federal Supreme Court that year were immediately transferred to the STJ. the STJ. See G. RIBEIRO, Princípio da ordem pública no indeferimento de homologação de sentenças arbitrais estrangeiras no Brasil: quando a imprecisão pode levar à desnecessidade, Revista Opinião Jurídica, No. 19, 2016, p. 86 et seq. 73 See (i) SEC 9877, STJ, Special Panel of STJ, rapporteur Justice BENEDITO GONÇALVES, decided on 16 December 2015; and (ii) SEC 8106, STJ, Special Panel of STJ, rapporteur Justice RAUL ARAÚJO, decided on 3 June 2015.

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Recognition and Enforcement of Foreign Judgments in Brazil From 2006 to 2015 the number of filings increased annually. The decrease in 2016 (mainly maintained in 2017 and 2018) result from the new rule in the CCP exempting consensual divorce decisions from being recognised before the STJ, as already analysed. With respect to the court of origin of the foreign decisions submitted to recognition in Brazil, the chart below illustrates the distribution from January 1st 2016 until May 17th, 2019: Court of Origin Country

Judgments

(%)

USA

1,272

30.5%

PORTUGAL

540

13.0%

SWITZERLAND

505

12.1%

GERMANY

429

10.3%

JAPAN

222

5.3%

SPAIN

210

5.0%

ITALY

169

4.1%

FRANCE

137

3.3%

UNITED KINGDOM

114

2.7%

CANADA

67

1.6%

OTHERS

500

12.0%

Total

4,165

100.0%

Source: Superior Court of Justice

Judgments rendered by US courts represented, by far, the largest number of judgments (30.5%) filed for recognition before the STJ, followed by Portuguese judgments (13%), Swiss judgments (12.1%), German judgments (10.3%), Japanese judgments (5.3%), Spanish judgments (5.0%) and Italian judgments (4.1%). It is interesting to note that foreign decisions issued by South American countries, including Mercosur countries, had minor significance. Specifically, in 2017, 1’063 proceedings for recognition were filed before the STJ. Regarding the subject matter of foreign decisions examined by the STJ in 2017, the chart below reveals the following: Subject

Quantity

Percentage

Divorce

637

88,5%

Adoption

37

5,1%

Civil / Commercial

17

2,4%

Child custody

12

1,7%

Maintenance obligations

8

1,1%

Family

6

0,8%

Arbitration

1

0,1%

Succession

1

0,1%

Labor

1

0,1%

Sub‐total

720

100,0%

Others not identified

343

Total

1.063

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Lidia Spitz Data on the merits of 343 proceedings, of the 1’063 requests filed in 2017, could not be obtained, and were therefore excluded for the purposes of calculating percentages. As a result, the subject matter of only 720 judgments could be identified. Divorce decisions are by far the largest number of foreign judgments, corresponding to 88.5%. Other family matters, such as adoption, child custody, and maintenance obligations represent most of the remaining decisions. Civil and commercial matters correspond to a small fraction of just 2.4% of the foreign judgments identified. The chart below illustrates the decisions on the requests for recognition of foreign decisions, as per the official data released by the STJ for 2017 and 2018:74

Superior Court of Justice Recognition Decisions in 2017

Superior Court of Justice Recognition Decisions in 2018 Others Refused 6.5% 0.9%

Others Refused 6.7% 2.2% Granted 91.1%

Granted 92.6%

Decision

Total

Percentage

Decision

Total

Percentage

Granted

844

91.1%

Granted

1,216

92.6%

Refused

20

2.2%

Refused

12

0.9%

Others

62

6.7%

Others

85

6.5%

TOTAL

926

100.0%

TOTAL

1,313

100.0%

Source: Superior Court of Justice

Source: Superior Court of Justice

In 2018, recognition was granted in 92.6% of the cases, and as a consequence, the foreign decisions were able to produce effects in Brazil. The State system is clearly very favorable to recognition and very open to accepting decisions issued by other jurisdictions.

VI. Recent Relevant Judicial Decisions: Abengoa v. Ometto and Salazar and Others v. Chevron In 2017, the STJ decided two highly complex actions for recognition of foreign judgments involving considerable amounts of money. Both cases had significant 74 Data obtained in the statistics report of the STJ, available electronically on the website of the court (Transparency, Procedural Statistics, year 2017) and also through consultations with the general ombudsman's office.

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Recognition and Enforcement of Foreign Judgments in Brazil repercussions in the country, and are still being debated in academic articles. This paper does not analyse these decisions in detail, but provides an overview of the disputes and highlights the main issues decided by the STJ. Abengoa v. Ometto75 was a request for recognition of two foreign arbitral awards rendered in accordance with the arbitration rules of the International Chamber of Commerce by an arbitral tribunal having its seat in New York. According to the official report of the case, a Swiss holding company of the Abengoa group (Asa Bionergy Holding A.G.) executed a sales quota and purchase agreement with Adriano Ometto. This agreement stated that Ometto should transfer the control of the “Dedini Agro” group and the property of certain sugar cane and ethanol plants to Abengoa. After having assumed control of the group Dedini Agro, Abengoa alleged that Ometto omitted and manipulated relevant information during the due diligence process and violated contractual warranties, and therefore initiated two arbitral proceedings against Ometto. At the end of both proceedings, Ometto was found liable and ordered to pay compensation in an amount superior to 100 million US Dollars to Abengoa, which subsequently submitted the two arbitral awards for recognition in Brazil. Among other issues raised by Ometto in order to justify the need to refuse recognition, the most delicate topic was related to the impartiality and independence of the chair of the arbitral tribunal. This chair was a senior partner of a prestigious and well-known law firm established in the USA, which had represented Abengoa’s interests in other judicial proceedings. Although the chair of the tribunal was not directly involved in any of the cases, he had received legal fees indirectly, as a partner of the firm. This issue had already been raised in the US courts and denied. However, the position of the STJ was that the impartiality of the judge is one of the guarantees that arises from due process in Brazil. Granting the recognition would violate Brazilian public policy. For this reason, the judges of the STJ, by majority vote, understood that the chair had previously and indirectly received an amount from one of the parties in previous proceedings affected his neutrality to decide the case, and therefore the recognition was refused. In Salazar and Others v. Chevron,76 a very well-known case, the courts of Ecuador issued a multi-billion dollar condemnation of the Chevron Corporation in an action, filed by numerous individuals, for indemnification for environmental damages. Chevron was found liable and ordered to pay compensation of around 9 billion dollars to the affected people, who collectively filed the recognition action in Brazil in order to obtain a practical outcome. SEC 9412, STJ, Special Panel of STJ, rapporteur Justice FELIX FISCHER (rapporteur of the decision Justice JOÃO OTÁVIO DE NORONHA), date of judgment 19 April 2017. For a very detailed description of the case and a critical analysis of the decision, see R. APRIGLIANO/ V.M. BARROS/ R.R. ALMEIDA, O controle da ordem pública no Direito brasileiro: análise do caso Abengoa, Revista Brasileira de Arbitragem, Vol. 14, No. 56, 2017, p. 107 et seq. 76 SEC 8542, STJ, Special Panel of STJ, rapporteur Justice LUIS FELIPE SALOMÃO, date of judgment 29 November 2017. 75

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Lidia Spitz The procedure was very intricate, as was reflected in the number of pages of the docket: when the decision was rendered, the docket had over twenty thousand pages. The rapporteur of the case understood that there were no legal grounds to justify Brazil’s jurisdiction to recognise the foreign judgment at stake. According to the Justice, the jurisdiction of the court to decide is an essential precondition applicable to any judicial action brought in Brazil, including the recognition proceeding which was under analysis. In accordance with the principle of effectiveness, the jurisdiction of each State should be limited to the disputes in which its judicial power is useful and effective. However, the only point of contact with Brazil was that the Chevron group also had assets and business in the country in the area of oil exploration. The defendant in the State of origin, Chevron Corporation, was not domiciled in Brazil and the affected entity in the procedure for enforcement would be Chevron Brasil Petróleo Ltda. This company was an indirect low-level subsidiary of the Chevron Corporation. Therefore, Justice Luiz Felipe Salomão asserted that the parties requesting recognition lacked procedural interest in the suit (interesse processual). For these reasons, he understood that Brazil had no reason to recognise the judgment, and refused the recognition request. This understanding was shared unanimously by all other Justices of the Special Panel of STJ. The brief analysis of these two precedents leads to the conclusion that the role of the STJ is clearly not restricted to simply giving effect to any foreign decision. It is fundamental that the Court proceeds with an effective control of the foreign judgment in light of the Brazilian legal system, promoting a complete and thorough analysis of the fulfilment of the requirements expressed in Article 963 of the Brazilian CCP. Both decisions illustrate that the STJ is conscious of its fundamental function of interpreting each of the requirements, in particular, public policy, so that it can precisely determine which foreign decisions are compatible with the national legal system and able to produce legal effects in the country.77

VII. Conclusion The philosophy of Brazilian private international law is clearly favor recognitionis, considering that the legal system foresees provisions oriented toward facilitating the recognition and enforcement of foreign judgments. The case law of the STJ promotes the same legal perspective, and the position of the Court is directed to foster judicial cooperation. The assessment carried out by the STJ has the purpose of confirming whether the foreign decision meets the requirements set out by the new CCP. Expressing a similar perception about the role of the STJ, making comments on Abengoa v. Ometto, see F. POLIDO, A irresistível força da ordem pública e a homologação de sentenças estrangeiras pelo STJ. Crônicas de Direito Internacional Privado, Revista de Direito Internacional, Vol. 14, No. 2, Brasília 2017, p. 9 et seq. 77

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Recognition and Enforcement of Foreign Judgments in Brazil However, the role of the Court is not mechanical; it involves reflection and interpretation of the extent and meaning of each of the requirements in light of the Brazilian legal system. Although in the vast majority of cases, recognition is granted by the STJ, the judgments issued in recent cases demonstrate that the court is conscious of its duty to protect Brazilian citizens and Brazilian assets against decisions which are inconsistent and incompatible with the national legal system.

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INTERNATIONAL ADOPTION IN BRAZILIAN PRIVATE INTERNATIONAL LAW Marcos Vinícius TORRES

I. II.

III.

IV.

V.

Introduction International Adoption and Brazilian Private International Law A. Brazilian Notion of International Adoption B. Adoption and Brazilian Private International Law 1. Conflict of Laws 2. Conflict of Jurisdictions International Adoption in Brazilian Law A. Historical Background of International Adoption and the Federal Constitution of 1988 B. The Exceptional Character of International Adoption in Brazilian Law C. International Adoption in the Children and Adolescents Act 1990 The Application of the Hague Convention on Protection of Children and CoOperation in respect of Intercountry Adoption of 1993 in Brazil A. Basic Scope of the Convention and its Compatibility with Brazilian Domestic Law B. Connecting Adoptees and Adopters with the Help of the Convention C. The Special Contribution of International Legal Cooperation for International Adoption in Brazil D. Conflicts between the Hague Convention on Adoption 1993 and the InterAmerican Convention on Adoption 1984? E. Statistical Analysis of the Application of the Hague Convention by Brazilian Courts Conclusions

This article talks about international adoption in Brazil, with a focus on private international law.1 It describes the domestic Brazilian law on international adoption, as well as treaty law applied in Brazil in this domain. The first part of this paper examines both ordinary domestic legislation – the statutes that regulate conflict of laws and conflict of jurisdictions in Brazil and the specific rules on adoption – and the Federal Constitution, which provides standards for the protection of children 

Professor of Private International Law at the National Law School at the Federal University of Rio de Janeiro. 1 This article uses the following abbreviations: CAA 1990 (Children’s and Adolescents’ Act 1990); IANBL 2010 (Introductory Act to the Norms of Brazilian Law 2010); PIL (Private International Law). Yearbook of Private International Law, Volume 20 (2018/2019), pp. 243-264 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Marcos Vinícius Torres with respect to measures to place abandoned children in foster families. The second part of this paper analyzes international conventions on international adoption applied in Brazil: the Hague Convention on Inter-Country Adoption of 1993 and the Interamerican Convention on International Adoption of 1989. These two conventions are compared and their compatibility with Brazilian law and their application by Brazilian courts are studied.

I.

Introduction

Adoption is the most traditional alternative to find offspring for couples who cannot have their own children. Since ancient times, it has been used to provide children to a childless couple or to specifically provide a male heir that could guarantee the continuity of the family. In some civilizations a male heir was necessary to ensure the longevity of the family name through marriage and procreation, for he would inherit the authority and responsibility for the family religious celebrations, as provided in the Manu Code and in ancient Roman and Greek law. Even though adoption has never disappeared, its importance decreased under Christianity, whose dogmas encouraged procreation through biological offspring, but not adoption itself. From the 19th century on, adoption began to enjoy more widespread recognition with the codification movement, but it was usually considered at this moment an exceptional alternative for couples whose children had passed away or who had never had children. A number of conditions were often imposed on potential parents, such as a high minimum age or the existence of medical conditions related to infertility. In some countries, foreigners or people who lived abroad were prohibited from adopting a child. The watershed for adoption was the Second World War. Never in history had devastation and mortality been so great. At the national level, the sheer number of orphans left by the conflict forced many countries to soften the restrictions they had imposed on adopters, such as minimum age, marital status, nationality and the absence of living children. At the international level, this also pushed countries to reflect on pragmatic policies to help these orphans. As an immediate response to the crisis, UNICEF was created by the international community in 1946 – around the time of the creation of the United Nations (UN) – as a provisory organism to raise funds and promote the welfare of the children who had survived the Second World War. It was turned into a permanent organization in 1961, since the world was convinced that there would always be helpless children in need of assistance. At the legal level, the targets were to provide foster families for orphans and financial support for children who had been neglected. The response came shortly after: the New York Convention on the Recovery Abroad on Maintenance of 1956 was signed under the support of the United Nations and the Hague Convention on Jurisdiction, Applicable Law and Recognition on Decrees Relating to Adoption of 1965 was a major post-war contribution of the Hague Conference on Private International Law. Due to the limited success of this Hague Convention of 1965 as well as the problems that were affecting children around the world, such as false adoptions and

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International Adoption in Brazilian Private International Law the misuse of adoptions for human trafficking of children (for sexual slavery, pedophilia, selling of organs, etc.), a new convention was drafted: the Hague Convention on Protection of Children and Cooperation in Respect of Intercountry Adoption of 1993 (hereinafter the Hague Convention on Adoption 1993), which enhanced the spread of international adoption at the universal level. As in other Latin American countries, due to adverse socio-economic circumstances, there are many orphans and abandoned children in Brazil in need of love, care and support. Adoption has long been a well-established and socially accepted legal form of parenthood in Brazilian law. However, it was only a few years ago that international adoptions gained significant popularity in the Brazilian courts as means to provide these children a new family would give them a chance to build up a new life in respect to their best interest. The Code of Minors 1979 did not establish intercountry adoption. From 1988 onwards, Brazil started promoting legal changes contributing to the promotion of international adoption. The Children and Adolescents Act 1990 (hereinafter: CAA 1990) matched the principles inscribed for the protection of minors in the Brazilian Constitution of 1988. In the nineties, Brazil promoted the internalization of international conventions on this issue: first, the ratification of the Inter-American Convention on Conflict of Laws Concerning the Adoption of Minors of 1984 in 1996; then the ratification of the Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption of 1993 in 1999. In 2009, the CAA 1990 was reformed to match international standards of international adoption. This contribution therefore illustrates Brazilian domestic law on international adoption to demonstrate its compatibility with the international conventions as applied in Brazil, for the purpose of improving inter-country adoption by national courts. It also studies the practice of Brazilian courts in the field of adoption.

II.

International Adoption and Brazilian Private International Law

A.

Brazilian Notion of International Adoption

The Brazilian notion of international adoption is defined by the CAA 1990. Article 51 defines international adoptions as adoptions when the adopter(s) have their domicile outside Brazil, but in one of the other contracting States of the Hague Convention on Adoption 1993. It should be pointed out that the connecting factor for personal statute under domestic Brazilian private international law is domicile, as determined by Article 7 of the Introductory Act to the Norms of Brazilian Law (hereinafter: IANBL 2010). The connecting factor of domicile matches the standards adopted by both the InterAmerican Convention on Conflict of Laws Concerning the Adoption of Minors of 1984 and the Hague Convention on Adoption 1993.2 The regional convention See Art. 2.1 of the Convention. The international adoption, for the Convention, occurs when a child habitually resident in one Contracting State (the “State of origin”) has 2

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Marcos Vinícius Torres harmonizes the criteria of domicile and habitual residence in Articles 1, 3 and 4. The connecting factor of domicile is very close to the standard adopted by the Hague Conference on Private International Law for its series of conventions produced after the Second World War: habitual residence. Article 1 of the Hague Convention on Adoption 1993 chooses the habitual residence as the criterion both for the law applicable and jurisdictional matters related to inter-country adoption. B.

Adoption and Brazilian Private International Law

1.

Conflict of Laws

Even though there is a clear concept of international adoption in the CAA 1990, there are no specific rules related to international adoption in Brazilian private international law. The applicable law on family matters is the law of the domicile of the person in accordance with Article 7 of the Introductory Act to the Brazilian Civil Code, enacted in 1942 and last reformed and renamed the Introductory Act to the Norms of Brazilian Law (IANBL) in 2010.3 This major act refers to all the criteria that should be applied for the conflict of laws in time and space, including traditional conflict of laws in the field of private international law. Article 7 of the IANBL 2010 determines that the law of the country where the person has his or her domicile governs the commencement and termination of rights relating to the personality, the name, the capacity and all family rights. Unlike other modern PIL acts,4 Brazilian law does not indicate specific rules for domains such as adoption, filiation, alimonies, bankruptcy, etc. Due to the absence of specific rules, the general criteria of domicile for family issues is necessarily applied to adoption, as to other family issues. This alternative solution may lead to two major difficulties. First, the simple choice of the domicile of the person involved in the dispute is not a good method for the reason that there are necessarily two people involved in a family issue and they may have different domiciles, which may lead to two potentially different applicable laws. Second, the mere application of the lex domicilii seems not to be enough to fulfill the appropriate solution internationally. This contribution shall closely examine the subtly different aspects contained in the complex act that is international adoption. Brazilian doctrine and jurisprudence on the law applicable to adoption categorizes it into four major subjects: the parties’ capacity, the essential conditions for the adoption, the procedure applied for the adoption and the effects of the adoption once it is achieved. As adoption implies a form of filiation that derives from a legal fiction to create a parental bond between the adoptee(s) and the adopter(s), it is done through been, is being, or is to be moved to another Contracting State in order to be adopted by a person habitually resident in the “receiving State”. 3 For detailed comments on the PIL rules of the IANBL 2010, see A.C. RAMOS/ E.F. GRAMSTRUP, Comentarios à lei de introdução às normas do direito brasileiro, São Paulo (Saravia) 2016. 4 See, for instance, the Italian PIL Act of 1995, the Venezuelan PIL Act of 1998 or the Swiss PIL Act of 1987.

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International Adoption in Brazilian Private International Law a legal act. Technically, every legal act requires a certain degree of formality and the legal capacity of the parties involved to produce it. When it comes to the capacity of the parties for international adoption, one must consider the capacity to adopt and the capacity to be adopted, which refers, respectively, to the adopter(s) and to the adoptee(s). Applying the Brazilian criteria of the lex domicilii in a distributive way, it implies that the moral and material conditions that one must fulfil in order to adopt (like the minimum age to adopt, a clean criminal record or a minimum financial/ professional status of the adopter that demonstrates he or she has enough funds to raise a child, for instance) are regulated by the law of the domicile of the adopter(s). On the other hand, the conditions for being adopted, such as a special age limit in the case of the adoption of minors (16, 17 or 18 years old) and a special family situation (like the absence of living parents and relatives up to a certain degree or a special situation of abandonment) shall be determined by the law of the domicile of the adoptee(s). It is important to note that this distributive application of the law of the domicile for the capacity of the parties is based on the aforementioned Article 7 of IANBL 2010, which foresees its application in matters relating to capacity, not essentially because it is related to family issues. The general connecting factor of the domicile is applied to all matters relating to capacity in the absence of specific rules to the contrary. This is clearly the case, for example, in succession cases. Article 10 §2 of IANBL 2010 states that the conditions applicable for the heirs or legatees to assume their heritage or legacy are ruled by the law of the domicile of the respective heir or legatee. However, as there is no specific rule for the capacity of the testator, his or her capacity to dispose in testament shall be governed by the general rule of the law of the domicile for capacity, according to Article 7 of the IANBL 2010, which should be understood as the law of the domicile of the testator at the time he or she made the will. Even though both capacity and family issues are contained within the concept of personal statute, derived from the Italian Statutory School, and imply the application of the law of the domicile, they consist of two different categories. Considering the conditions required for adoption, States usually impose some essential conditions for it, such as a minimum age difference between the adoptee(s) and the adopter(s), in order to psychologically reproduce the ideal age difference for a parental bond. According to the Brazilian connecting factor of the lex domicilii for family issues, the tendency is to prioritize the law of whichever domicile is more strict, when the lex domicilii of the adoptee(s) and the lex domicilii of the adopter(s) impose different restrictions. By choosing the stricter law, it is guaranteed that the adoption may be recognized in both jurisdictions. For example, Article 42 §3 of the CAA 1990 says that the age difference between adoptee(s) and adopter(s) must be at least 16 years for an adoption in Brazil. If the law of domicile of the adopter(s) should require a difference of at least 10 years, for example, Brazilian law should apply, as both the lex domicilii of the adoptee(s) and the lex domicilii of the adopter(s) would be respected. Therefore, we consider that the law applied to the essential conditions of the adoption follow cumulative conditions, but in reality the stricter lex domicilii prevails, as it tends to respect the other lex domicilii and ensures the validity of the adoption in both jurisdictions. With regard to the adoption procedure, due to the consequences it brings to family status, it is a formal and solemn act that must necessarily obey certain rules Yearbook of Private International Law, Volume 20 (2018/2019)

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Marcos Vinícius Torres to be considered regular, no matter whether it is conducted through a court procedure or before a notary or a religious authority (like Jewish or Muslim courts). With respect to the differences in procedure and bureaucracy from one jurisdiction to another, a legal act must obey the law of the place where it was entered into, complying with the traditional locus regit actum formula. Adoption shall thus respect the formal requirements of the law of the place it was entered into, such as the number of witnesses for the act, special formalities such as seals, etc. This formula is supported by Article 9 §1, second part, of the IANBL 2010. In relation to adoptions made in Brazil, for instance, all adoptions of minors should be carried out at court and no adoption through powers of attorney is allowed, according to Article 47 of the CAA 1990 which provides that adopters should present themselves personally before the court. As adoptions bring serious consequences for family status, it is important to evaluate the law applicable to its effects. By virtue of the lex domicilii, that governs family issues through Article 7 of the IANBL 2010, the law of the domicile of the adopter(s) should prevail, as it is presumed that the adoptee(s) would move and be integrated into the new environment of the domicile of their new family. It is important to note that this law shall be applied in the succession status of the adopted child(ren). In this sense, the CAA 1990 determines that the lex domicilii of the adopter(s) should be preventively examined to guarantee that the adopted minor would enjoy the same status he or she would as a son or daughter according to Brazilian law, including full succession rights. This measure is in consonance with the Brazilian Constitution of 1988 that prohibits any discrimination between children on the basis of legal status. When it comes to international adoption and comparative law, this provision is effective in preventing Brazilian judges from granting adoptions that would lead to the adoptee(s) moving to a country whose law would imply a discriminatory status in terms of filiation, such as countries that distinguish simple adoption and full adoption, or those which provide that the child shall enjoy a less favorable status or inheritance rights, by virtue of his or her status as an adopted child. In these cases, adoptions are denied on the basis of public policy. 2.

Conflict of Jurisdiction

In terms of transnational litigation, the cases in which Brazilian courts are entitled to exercise their direct competence to judge on PIL issues (compétence générale) are listed in Articles 21-23 of the Brazilian Civil Procedure Code. There is no specific provision for cases concerning international adoptions. However, any request brought for international adoption of children placed in foster homes in Brazil are easily supported by the application of Article 21(1), which states that Brazilian courts are competent when the respondent has his or her domicile in Brazil in accordance with the actor sequitur forum rei rule. Article 21(3) encapsulates the forum acti principle for Brazilian courts, as it provides that Brazilian courts are competent for suits related to acts entered into in Brazil, which can surely include any discussion on a formal act such as an adoption. It is important to note that both hypotheses are considered cases of relative competence, which implies that Brazilian courts are not exclusively competent for

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International Adoption in Brazilian Private International Law these cases and that, therefore, foreign courts may also be competent in such cases, depending on the private international law of their own country. This consequently opens the possibility for the Brazilian Higher Court of Justice to recognize a foreign adoption order, since this court, dealing exclusively with questions of law, is required to recognize foreign decisions and enforce letters rogatory in Brazil5 insofar as they do not threaten the exclusive competence of Brazilian courts, as laid down in Article 23 of the Brazilian Civil Procedure Code. When it comes to the recognition and enforcement of foreign decisions,6 it is important to bear in mind that Article 961 of the Brazilian Civil Procedure Code exempts the requirements that the Higher Court of Justice in Brazil recognize a foreign decision where there exists an international treaty into force between Brazil and the country where the decision was rendered that expressly provides for this exemption. This is precisely the case for adoptions made between contracting States of the Hague Convention on Adoption 1993.

III. International Adoption in Brazilian Law A.

Historical Background of International Adoption and the Federal Constitution of 1988

Even though Brazil has a long-track history of abandoned children and of “informal adoptions”, rules to promote adoption at the international level are relatively recent. The Minors Code of 1979 was extremely restrictive towards international adoption of minors in Brazil. It only allowed foreigners who had residence or domicile outside Brazil to adopt minors who had been abandoned through simple adoption;7 this was equivalent to custody, without full parental and inheritance rights. The Brazilian Constitution of 1988 was a watershed moment in Brazilian law, as it entailed new human rights obligations, special provisions for the protection of family life and legal international cooperation. In other words, it paved the way for the reform of domestic law on international adoption and for the ratification of international treaties on international adoption. Regarding the provisions focusing on the protection of the family, the Brazilian Constitution of 1988 recognized analogous treatment for the man/husband/father and woman/wife/mother, as well as for all children, whether they were The Higher Court of Justice has exclusive competence to recognize foreign decisions and agree that rogatory letters requested to Brazilian courts be enforced in Brazil. Once the Higher Court of Justice has recognized a foreign decision or agreed to enforce a rogatory commission in Brazil, the decision may be enforced and the legal cooperation and assistance may be accomplished by a federal judge, according to domestic rules concerning the territorial competence of federal judges. 6 For detailed rules and procedure for the recognition and enforcement of foreign decisions in Brazil, see N. DE ARAUJO, Direito internacional privado: teoria e pratica brasileira, 6th ed., Rio de Janeiro (Simplissimo), 2016, p. 243 et seq. 7 Art. 20 of the Code of Minors 1979. 5

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Marcos Vinícius Torres born out of a wedlock or not. These democratic principles reflected in equal treatment and the presumption of equal responsibilities for male and female adopters, as well as the restriction towards adoption that might place adopted children in a less favorable position than other children. Therefore, only full adoptions could be allowed in order to provide full parental rights to adopted children. Despite the openness of the Brazilian Constitution of 1988, it restricted international adoptions to a subsidiary alternative, coming into effect once all possibilities of finding foster families in Brazil were unsuccessful. It is also important to mention that provisions for the protection of the family in the Brazilian Constitution of 19888 opened the gate for the recognition of samesex couples in Brazil.9 Subsequent to a series of isolated decisions from local jurisdictions, the Supreme Federal Court conducted an extensive interpretation of the Constitution in 2011 to guarantee the same rights granted to heterosexual partners would also be granted to homosexual partners. Due to the possibility to convert partnerships into marriages,10 as well as a number of favourable lower-court decisions on the matter, the National Council of Justice extended civil marriage to homosexual couples in 2013, while prohibiting notaries from discriminating between petitioners on the basis of their sex or sexual orientation. This contributed to the multiplication of cases involving adoptions by same-sex couples, as isolated decisions in this domain appeared from 2009 on, and a major decision of the Federal Supreme Court approved the practice.11 B.

The Exceptional Character of International Adoption in Brazilian Law

Before analyzing in more detail the bases for international adoption in Brazil, it is important to understand its exceptional character. Much like many other countries, for minors who do not have a family and are placed into foster care, priority is given to foster families domiciled in Brazil, as a protective measure ensuring that the minor in question does not move from their home country and lose contact with their culture and homeland. However, the possibility of placing a minor who does not have a family in a home abroad is considered through adoption. It is important to clarify in this regard that the CAA 1990 establishes an order of priority for adopters in international adoptions, as follows: 1) Brazilian adopters who have domicile abroad,12 2) foreign adopters who have habitual residence in one of the other For the protection of family life and children, see especially Art. 226-227 of the Constitution of 1988. 9 For a detailed analysis of the long process to arrive at the recognition of same-sex couples in Brazil, see an article published by the author: M. V. TORRES PEREIRA, An Attempt for the Protection of Sexual Diversity in Brazilian Law, Panorama of Brazilian Law, No 2, Miami 2014. 10 Art. 1726 of the Brazilian Civil Code 2002. 11 “Recurso Extraordinario n. 846.102 (Parana). Dje n. 52/2015. Publ. 17/03/2015. Rel. Min. Carmen Lucia. (Constitutional Appel n. 846.102, Originated from the State of Parana, Dje n. 52/2015. Published on March 17th 2015. Rapporteur Justice Carmen Lucia).ˮ 12 Art. 51 §2 of the CAA 1990. 8

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International Adoption in Brazilian Private International Law contracting States of the Hague Convention on Adoption 1993; 3) foreign adopters who have their domicile or residence abroad but not in one of the other contracting States of the Hague Convention on Adoption 1993. In this last alternative, without the benefit of the application of the Hague Convention on Adoption 1993 and its international legal cooperation rules, the procedure runs under the same rules applied to domestic adoption cases and is then subject to a more bureaucratic and complex procedure since the adopters do not have residence or domicile in Brazil.13 It is also important to observe that even though there are two elements (the foreign nationality and the residence/domicile abroad) that would traditionally identify this type of adoption as a case of international adoption, when foreign adopters live in a country that is not a contracting State to the Hague Convention on Adoption 1993, the case is not technically considered a case of international adoption, according to Article 51 of the CAA 1990. Despite the exceptional character of international adoptions in Brazilian law, it remains the case that Brazilian courts admit international adoptions on a regular basis. As there are many minors available for adoption in the country, it is not always the case that adopters domiciled in Brazil match the criteria to adopt available minors or that there exist foster families in certain regions, at which point international adopters become considered eligible. The solution of international adoption is surely a more positive measure with respect to the best interest of the minor than leaving a minor living for years in foster institutions such as orphanages, in hopeless expectation for an ideal family.14 Aside from this, it appears that there are a wide range of restrictions manifested by national families to adopt (such as skin color, age, absence of disabilities, etc.), whereas foreign prospective parents are often not selective in this way. C.

International Adoption in the Children and Adolescents Act 1990

The Children and Adolescents Act 1990 was enacted in the spirit of the Brazilian Constitution of 1988 and shortly after the ratification of the United Nations Convention on the Rights of Children of 1989. Despite the fact that this legislation explicitly targets minors, it also focuses on the differences between children (0-12) and adolescents (13-18) and on the respective legal treatment applied to each. This extensive act, which serves as a micro-regime for minors’ rights generally, regulates adoption in Articles 39-52. In spite of the absence of specific traditional PIL rules for international adoption in the IANBL 2010, the CAA 1990 does not include them either. The Act provides basic rules for adoption in general and lays down various provisions on international adoptions. It is necessary to explain that the CAA 1990 has been

Art. 52-D of the CAA 1990. For this deeply-rooted cultural paradigm related to adoption in Brazil, see D. BORREL / T. JUNIOR / J.L. MINNICELLI, Instrumento legal da adoção internacional e meios de coibição do tráfico de crianças, (1989) 641:7- 8 Revista dos Tribunais. 13 14

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Marcos Vinícius Torres amended several times in order to bring it up to date with modern Brazilian legislation and was object of a major reform in 2009, with the aim of adjusting it and bringing it in line with the Hague Convention on Adoption 1993. CAA 1990 indicates a number of essential conditions that must be respected for all adoptions in Brazil, including international adoptions. When it comes to the parties, it establishes that capable majors over 18 years old may adopt,15 since an age difference of at least 16 years between adoptee(s) and adopter(s) be respected.16 Single people17 and married or partnered couples (through joint adoption) may adopt and this currently includes same-sex couples. Joint adoptions may also be granted to divorced or separated couples if the joint living period with the minor began during the marriage or union and there is proof of affection between the adoptee(s) and both parents.18 Post-mortem adoption is possible if the adoption procedure had already been initiated and clear consent had been expressed former to the death of one of the spouses or partners.19 Minors under 18 years old may be adopted20 if they are orphans and have no ascendants or relatives that may look after them. Minors living in a situation of abandonment, whose parents have been legally dispossessed of their authority over their children, may also be adopted. It is important to note that if the adoption procedure with respect to a minor starts during his or her age of minority and extends beyond the age of 18, the procedure will apply and benefit from the rules on the adoption of a minor. Normally, a minor will only be adopted if his or her parents or legal guardian(s) consent to the adoption, unless the parents are unknown, the situation of abandonment is recognized by the court, or the living parents or legal guardian(s) are legally dispossessed of their authority over the minor(s).21 In the case of the adoption of a minor over 12 years old, he or she must also consent to it.22 Considering the procedure for international adoption, it is notable that all adoptions of minors in Brazil must be made at a court of law before a specialist judge. Therefore, any adoption of a minor which is carried out by a notary is considered void. Furthermore, it is necessary for the adopter(s) to be present to the procedure, which means that it is not possible for him or her to be represented through power of attorney.23 One of the most important stages of the procedure in practice is the joint-living period that both adoptee(s) and adopter(s) must share together. This normally takes place over the maximum period of 90 days, extendable for a similar period should the judge deem necessary.24 In the case of an international adoption, it is reduced for a period to be specified by the judge between 30 and 45 days, which Art. 42 of the CAA 1990. Art. 42 §3 of the CAA 1990. 17 Art. 42 of the CAA 1990, when it refers to “regardless of civil status”. 18 Art. 42 §4 of the CAA 1990. 19 Art. 42 §6 of the CAA 1990. 20 Art. 40 of the CAA 1990. 21 Art. 45 of the CAA 1990. 22 Art. 45 §2 of the CAA 1990. 23 Art. 39 §2 of the CAA 1990. 24 Art. 46 §2 of the CAA 1990. 15 16

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International Adoption in Brazilian Private International Law may be extended only once for a similar period.25 This joint-living stage must occur on the Brazilian territory26 and the adopted minor(s) may only leave Brazil with the adopter(s) after the decision is definite.27 This joint-living period is extremely important, as a team of experts including psychologists and social assistants accompany the adoptee(s) and produce technical reports that advise the judge in his or her decision. Once the judge renders a favorable decision for the adoption, the order shall be fully registered before the civil registration office to produce all its legal effects, with reference to the details of the adopter(s)28 and no reference to either the former biological parents29 or to the reason for this “new” registration,30 to avoid any kind of discrimination. Despite this secrecy regarding the former family ties of the adoptee(s), all adopted minors may request information on their biological origins and on the adoption procedure once they reach the age of 18 years of age31 or before this point if they justify their reason for it before the judge.32 To protect the interests of the minor, which are considered paramount, the whole process of adoption must not exceed 120 days, extendable for an equal period,33 and priority is given for cases involving disabled minors or minors suffering from chronic diseases.34 The legal effects of adoption enter into force with the definitive decision, which is the date on which the decision becomes definitive unless it is a case of postmortem joint adoption, in which it shall be reverted back to the date of the death of the deceased adopter.35 It is important to mention that the Brazilian authorities may request information on the situation of adopted minors living abroad at any time.36 Reports on adoptees abroad must be sent to the Brazilian authorities every semester for at least two years and until the foreign authority provides proof that the adopted minors have been granted citizenship in the new country of residence.37 A major concern when considering the effects of adoption is that such adoption must abide by the doctrine of the best interest of the child, in accordance with the language in the UN Convention on the Rights of the Child (UNCRC). Besides being exceptional, an international adoption is only granted if it is verified that it is in the best interest of the adoptee(s).38 Therefore, as a condition to consider Art. 46 §3 of the CAA 1990. Art. 46 §5 of the CAA 1990. 27 Art. 52 §8 of the CAA 1990. 28 Art. 47 §1 of the CAA 1990. 29 Art. 47 §2 of the CAA 1990. 30 Art. 47 §4 of the CAA 1990. 31 Art. 48 of the CAA 1990. 32 Art. 48 of the CAA 1990. 33 Art. 47 §10 of the CAA 1990. 34 Art. 47 §9 of the CAA 1990. 35 Art. 47 §7 of the CAA 1990. 36 Art. 52 §10 of the CAA 1990. 37 Art. 52 §4, III of the CAA 1990. 38 Art. 43 of the CAA 1990. 25 26

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Marcos Vinícius Torres the adopter(s) eligible to adopt a minor in Brazil, the law of the domicile of the adopter(s) is verified to check its compatibility with Brazilian law.39 When it comes to international adoption, the judge shall take into consideration whether the adoptee(s) would enjoy full inheritance and nationality rights in the event of an adoption. The application of this rule may lead to the application of the escape clause of public policy, as adopters from countries whose laws discriminate against adopted daughters in favor of adopted sons in the context of inheritance rights would be considered ineligible40 due to the constitutional requirement of non-discrimination among children. Public policy also entails that requirements which would result in a simple adoption, in countries that distinguish simple adoption from full adoption, would be denied, since the Brazilian Constitution of 1988 has abolished simple adoption as a form of discrimination towards adopted children. Lastly, even though the effects of the adoption will be surely enjoyed at the jurisdiction of the domicile of the adopter(s), there is one major effect that remains in the Brazilian jurisdiction: restrictions on marriage between the adoptee(s) and his or her biological family, even though all other family bonds are completely extinguished due to the adoption.41

IV. The Application of the Hague Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption of 1993 in Brazil A.

Basic Scope of the Convention and its Compatibility with Brazilian Domestic Law

The Hague Convention on Adoption 1993 is one of the Hague Conventions that counts the largest number of States which have ratified or adhered to it.42 The focus on international legal cooperation is the key to its success, as it facilitates adoption and its subsequent recognition in other States applying the convention.43 Aside from this, the requirements listed in the Convention ensure that adoptions are made with due regard to the children’s protection and welfare. It is important to mention from the outset that the Hague Convention on Adoption 1993 is a very “humanized” instrument that not only understands adoption Art. 52 §4, VII of the CAA 1990. Art. 41 of the CAA 1990. 41 Art. 41 of the CAA 1990. 42 To check all contracting States, see the Conference page available at . 43 For a detailed analysis of the Hague Convention on Adoption 1993, see H. VAN LOON, International Co-Operation and Protection of Children with Regard to Intercountry Adoption, Recueil des cours, Vol. 244, 1993. See also L. SILBERMAN, Co-operative Efforts in Private International Law on Behalf of Children: The Hague Children’s Conventions, Recueil de cours, Vol. 323, 2006. 39 40

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International Adoption in Brazilian Private International Law as a form of parenthood, but also cares for the welfare of children in need of a family. The focus is the child who needs care and love, not the parents to whom a child is going to be entrusted to complete their family structure. The scope of the Convention consists of promoting intercountry adoptions, through three targets: the adoptees’ protection, the network of legal cooperation among Contracting States and the validity of adoption orders in other Contracting States. The aim of the Convention is to focus on international legal cooperation instead of providing traditional PIL rules based on the conflict of laws and the conflict of jurisdictions. To avoid fraudulent adoptions and to guarantee that international adoptions are made in the best interests of children and with due regard to their fundamental rights, the Convention promotes faster and less bureaucratic procedures. The Convention reproduces the formula of creating a net of cooperation authorities, as launched by the New York Convention on the Recovery Abroad on Maintenance of 1956. Each Contracting State indicates a domestic authority to represent its authorities and to exchange information and documents with the corresponding authorities of other Contracting States,44 so that a trustful net of cooperation is established among them. These authorities exchange information on available adoptees and interested adopters, validate international certificates of foster parents to reduce the long-time period to conclude adoptions, and exchange information on foreign laws, for example. When it comes to the requirements for intercountry adoptions, it is important to note that neither the adopter’s nationality nor the adoptee’s nationality is relevant according to the Convention’s connecting factor,45 which is the law and jurisdiction of habitual residence. Therefore, the Convention’s connecting factor for the applicable law matches the connecting factor of domicile contained in Brazilian domestic PIL. Like Brazilian law, the Convention also applies to the adoption of minors under 18 years old.46 As PIL instruments, the Hague Convention on Adoption 1993 and the IANBL 2010 match, for they both choose similar connecting factors for the conflict of laws – respectively, the habitual residence and the domicile. Aside from this, due to the nature of the Convention as one focused on international cooperation rules, its text does not conflict with Brazilian classic rules contained in the IANBL 2010 or with the content of the CAA 1990, which was in fact reformed in 2009 to bring the domestic procedure applied to adoptions in line with the standards contained within the Hague Convention on Adoption 1993. B.

Connecting Adoptees and Adopters with the Help of the Convention

Where a request is made for an international adoption in Brazil, and such request falls within the scope of the Hague Convention on Adoption 1993, the international legal cooperation provided for by the Convention contributes to facilitate the search for an adoptee(s) and the choice of the ideal adopter(s). Before applying for adoption in Brazil, all adopters are screened for adoption by the authority of their habitual Art. 6-9 of the Convention. Art. 4-5 of the Convention. 46 Art. 3 of the Convention. 44 45

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Marcos Vinícius Torres residence.47 The authorities of the receiving State should verify whether (i) the prospective adoptive parents are eligible and suitable to adopt – on a moral and material basis –; (ii) they have been duly advised; and (iii) the child is or will be authorized to enter and reside permanently in that State. These pre-approved candidates are certified to prove that they may apply for adoption in another contracting State. It is important to note that this connection may be mediated by special adoption agencies.48 Upon receiving a report from the Authority of the receiving State recommending the adopters certified for adopting in Brazil,49 adopters are screened by the local Brazilian judge, who shall rule on whether they are allowed to apply as potential adopters,50 and consequently determine their enrollment – valid for 1 year and renewable for the same period51 – in the local adoption lists, and subsequently in the national adoption list.52 It is important to clarify that Brazil is organized as a federative republic, with 27 autonomous federal units (corresponding to 26 States and the Federal District), as shown below:

For each of the 27 domestic jurisdictions, there is a local Commission on (International) Adoption that is in charge of the implementation of all policies and measures related to the Hague Convention on Adoption 1993 and connection with the national authority for matters of international legal cooperation. Both the national and local authorities have a crucial role in matching adoptee(s) and adopter(s) Art. 52, I of the CAA 1990. Art. 52, §§1-7 of the CAA 1990. 49 Art. 52, II and III of the CAA 1990. 50 Art. 52, VII of the CAA 1990. 51 Art. 52 §13 of the CAA 1990. 52 Art. 50 §§ 5, 6 and 7 of the CAA 1990. 47 48

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International Adoption in Brazilian Private International Law for international adoptions since they manage and update the list of possible adoptee(s) and suitable adopter(s). In preparation for adoption, interviews are conducted with the adopter(s) by a team of specialist psychologists and social workers, in order to provide written reports on the conditions of the adopters. This preparatory stage aims to inform potential adopters of their responsibilities and normally takes the form of talks/lectures and preferably includes contact between the adopters and minors from foster institutions, as an adaptation measure.53 During this phase, no contact is allowed between the adopters and the specific targeted adoptee. If reports on the performance of the potential adopter(s) are positive, a potential adoptee with the profile – with information related to gender, age, race, health conditions, etc. – indicated by the adopter(s) will be searched for in the local adoption lists, and, if necessary, subsequently in the national bank of adoption, in order to check if the adoptee(s) with the targeted profile is available in one of the other 26 local jurisdictions/banks of adoptions. To comply with the Hague Convention on Adoption 1993, Brazil, as the State of origin, verifies whether the child is adoptable, if, (i) after possibilities for placement of the child within the State of origin have been given due consideration, an intercountry adoption is deemed to be in the child’s best interests; (ii) those required to give their consent did so freely, in the required legal form, and without any form of compensation; (iii) consent was not revoked; and (iv) the child’s will and opinions were considered (in cases where the child is old and mature enough to express his/her opinion, which is deemed to be the case from 12 years of age in Brazil). The potential adoptee(s) will be searched from children who have undergone this verification, been considered “adoptable”, and then enrolled in the respective local and national banks of adoptions. Furthermore, with the objective of facilitating the search for an adoptee in Brazil – especially for adopters living outside Brazil – and in order to render the National Adoption List more effective, the National Council of Justice issued Resolution n. 190 in 2014, so that data of all 27 federal units referring to children available for adoption is consolidated, as well as all data related to adopters who live either in Brazil or abroad. After exchanging matching criteria, the adopter(s) will be informed as to the existence of desirable adoptee(s) – if the search is successful – in order to confirm his or her intention to proceed with the adoption procedure. At this point, it is important to clarify that any adopter(s) who refuse(s) potential adoptee(s) three consecutive times based on the profile of the adoptee(s) shall be excluded from all Brazilian banks of adoptions at the national level. Nevertheless, if the match is successful and once the potential adopter(s) and the suitable adoptee(s) are connected, the judge will determine a period of joint-living, from 45 to 60 days, to confirm the appropriateness of the adoption.54 It is important to state that this adaptation exercise of joint-living must be undergone in Brazil and that the new family may not leave Brazil before the adoption decision is made definitive,55 i.e. if it is not Art. 50 §§ 3 and 4 of the CAA 1990. Art. 46 §3 of the CAA 1990. 55 Art. 52 §8 of the CAA 1990. 53 54

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Marcos Vinícius Torres contested within the legal deadline (normally 15 “court” working days), or if a final decision is rendered in favor of the adoption, in the event that it is appealed. This joint-living period in Brazil – which is also accompanied by a team of expert psychologists and social workers and the subject of a report – precedes the adoption order and is taken into consideration by the judge to make sure that the adoption is the appropriate measure for the child.56 Even though international adoption is a subsidiary alternative for foster families in Brazil, it achieves considerable success. One of the reasons is that many adopters from abroad benefit from the priority clause that guarantees that adopters enjoy priority in the national adoption list if they accept the adoption of disabled minors, groups of brothers/sisters, minors with chronic diseases, or those suffering from special medical conditions.57

C.

The Special Contribution of International Legal Cooperation for International Adoption in Brazil

Brazilian authorities, as well as the authorities of other contracting States, benefit from the “worldwide network” created by the Convention. In essence, the Central Authorities of Contracting States exchange and validate information both on adoptees and adopters, certify documents such as the certificate that allows adopters to apply for adoption.58 The whole procedure is based on mutual trust, as these authorities are indicated by each Contracting State. It also guarantees safe adoptions and avoids the human trafficking of minors In Brazil, the Ministry of Justice was designated as the central authority on the national level, whereas the Judicial State Commissions on (International) Adoption (the so-called “CEJAs/CEJAIs”) represent the local (subsidiary) central authority for each of the 27 jurisdictions corresponding to the Brazilian States and the Federal District. International legal cooperation as provided by the Hague Convention on Adoption 1993 contributes not only to connecting and matching adoptee(s) in Brazil and adopter(s) from abroad, but also lends itself to other important points during and after the adoption process. As Brazilian courts are extremely cautious when granting adoptions to adopters whose laws are not in the benefit of the Brazilian adoptee(s), the exchange of information on the content of this foreign law can be easily conducted with the support of the central authority of the receiving State. After the conclusion of the adoption, the adoption order will be automatically recognized among contracting States if certified by a competent authority in compliance with the Hague Convention on Adoption 1993,59 which is a major advancement.

Art. 46 §3-A of the CAA 1990. Art. 50 §15 of the CAA 1990. 58 Art. 14-16 of the Convention. 59 Art. 23 of the Convention. 56 57

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International Adoption in Brazilian Private International Law On the one hand, it guarantees that Brazilian authorities may count on the recognition of the status of the adopted minor abroad. On the other hand, adoptions entered into abroad do not need to be submitted to the Higher Court of Justice for recognition in Brazil. This mutual channel of recognition may only be suspended by the escape clause of public policy, sometimes strengthened by the doctrine of the best interest of the child. It is important to note that adoptions undertaken by Brazilians, according to the local law, in a contracting State of the Convention, will enjoy the same automatic recognition.60 On the other hand, this benefit will be denied if Article 17(c) of the Hague Convention on Adoption 1993 is not respected, and it will receive the same treatment given to adoptions entered into in countries that do not apply the Hague Convention.61 In the past few years, the principle of public policy has been positively evaluated by Brazilian Courts to grant joint adoption for same-sex couples attempting to find an alternative to offspring abroad, as adoption is still a more accessible and easily recognized form of access to filiation for same-sex couples in many countries. Article 24 of the Convention contains the escape clause of public policy to deny adoption and its recognition under the application of the Convention. There is no reference to adoption by same-sex parents in the Convention’s text, since it was not a major concern at the time that the Convention was written, because it was neither possible nor a reality at that time. Only from the late nineties on have some countries started opening step-child adoption for same-sex partners/spouses and then joint adoption for same-sex couples. The Convention remains neutral on this matter, as it does not make any reference to the adopters’ sexual orientation, neither to prohibit nor to allow it. As a consequence, Brazilian courts understand and apply its provisions as if there were an absence of a restriction granting joint adoption to same-sex couples if both the jurisdiction of the receiving State and the Brazilian jurisdiction – as the jurisdiction of the State of origin – allow this kind of adoption. In this regard, many international adoptions have been granted to same-sex couples by Brazilian courts by virtue of the Convention. In the past few years, many same-sex couples have applied for joint adoption in Brazil. From a socio-legal perspective, it is important to notice that many countries which allow adoption by samesex couples do not have many children available for adoption. As the issue is still controversial, some leading countries (China, India, Russia, South Korea and Ukraine; for example) that are known for their great number of available children for adoption in the “international adoption arena” do not permit homosexual couples to jointly adopt a child. Brazil therefore appears to be an attractive center of adoption for same-sex couples, with the benefit of the application of the rules of the Hague Convention on Adoption 1993. As a compulsory post-adoption measure to guarantee the protection of minors adopted in Brazil, the connection between the Brazilian authority and the authority of the receiving State is essential for the communication of reports on adaptation and situation of the adopted minor abroad. The Brazilian Authority may also request information on the situation of adopted minors abroad at any time.62 Art. 52-B of the CAA 1990. Art. 52-B §§ 1 and 2 of the CAA 1990. 62 Art. 52 §10 of the CAA 1990. 60 61

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Conflicts between the Hague Convention on Adoption 1993 and the Inter-American Convention on Adoption 1984?

As the Reform made to the CAA 1990 prioritized the Hague Convention on Adoption 1993, it is appropriate to reflect on the pertinence of the application of the InterAmerican Convention on Adoption of 1984. Ab initio, it is important to recognise that this regional instrument does not conflict with the Hague Convention on Adoption 1993. The two instruments have two distinct aims: the Hague Convention focuses on promoting international legal cooperation, whereas the Inter-American Convention aims to resolve the traditional PIL dilemma of determining the law applicable to adoption. Even if we concentrate solely on the connecting factor chosen for adoption in the field of the conflict of laws, there is no incompatibility: the Hague Convention chooses the habitual residence, while the Inter-American Convention matches domicile and habitual residence63 – the predominant connecting factor for personal jurisdiction in PIL in Latin America – and both criteria are evidently intimately connected insofar as their practical application is concerned. Apart from this, the Hague Convention on Adoption 1993, in line with the wording of other Hague Conventions, governs the coexistence between it and other regional conventions insofar as they do not conflict with the Hague Convention.64 In this regard, the Hague Convention encourages the subsidiary application of the InterAmerican Convention. Given that the Convention thus permits the subsidiary application of regional conventions, it is important to assess what this means for adoptions entered into in Brazil. Of the nine States that have ratified or adhered to the Inter-American Convention on the Conflict of Laws Concerning the Adoption of Minors of 1984,65 Honduras is the only State that does not apply the Hague Convention. This means that any international adoption undertaken in Brazil by adopters who reside in one of the other seven States that also applies both international instruments will prioritize the rules from the Hague Convention and the provisions contained within the Brazilian CAA 1990 on this matter. For an adopter who has his or her domicile in Honduras to adopt in Brazil, the adoption procedure would follow the rules of a domestic adoption in Brazil and the only benefit would be the special and clear rules on the law applicable to adoption indicated in the Inter-American Convention. Notably, the special rule contained within the Inter-American Convention would 63 The Inter-American Convention essentially adopts a distributive connecting factor in relation to capacity for adoption. This means that the conditions related to the adoptee(s) to be adopted are regulated by his or her lex domicilii (Art. 3), whereas the conditions for the adopter(s) to adopt are ruled by his or her lex domicilii (Art. 4). The effects of the adoption are subject to regulation by the law of the domicile of the adopter, except those effects related to marital impediments; which are ruled by the law of the domicile of the adoptee (Art. 9-10). Therefore, the application of the Intern-American Convention in relation to applicable law reflects the same scheme as that explained above (2.2.1) in relation to Art. 7 of the Brazilian IANBL 2010, with regard to international adoption. 64 Art. 39 of the Convention. 65 The Convention has been ratified by Belize, Brazil, Chile, Colombia, Dominican Republic, Honduras, Mexico, Panama and Uruguay.

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International Adoption in Brazilian Private International Law prevail in this case over the general rule contained within Article 7 of the IANBL 2010 which refers to family issues in general, and not specifically to adoption. Finally, it is interesting to consider that the Hague Convention offers a universal approach, favoring large-scale use for the hundreds of foreign adopters who search for adoptable children in Brazil every year. However, the Inter-American Convention, even if applied subsidiarily, is limited to a regional scope and for legal reasons has limited application in Brazil as it is limited to isolated cases.

E.

Statistical Analysis of the Application of the Hague Convention by Brazilian Courts

Statistical data is the most effective method of demonstrating how the application of the Hague Convention on Adoption 1993 has contributed to promote international adoption in Brazil. Therefore, the following data66 analyses the full period between 1999 – when the Convention entered into force in Brazil – and 2017. The first aspect to be analyzed is the number of international adoptions entered into in Brazil and its distribution by gender, as shown below.:

66 These tables, as well as the map of Brazil and its respective sub-regions, were made with the contribution of undergraduate student Diogo Alexandre de Freitas, who the author sincerely thanks for his work collecting and organizing this statistical data. Mr. de Freitas carried out these activities as part of a research project on international legal cooperation applied to family issues in the field of private international law, supervised by the author, at the Law School of the Federal University of Rio de Janeiro. As a result of this work, Mr. de Freitas was granted a research scholarship from the Brazilian Ministry of Education for the academic year 2018. The author would also like to offer his sincere gratitude to the Brazilian national and local authorities (CEJAs/CEJAIs) for international legal cooperation for the information that they provided for this research.

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Marcos Vinícius Torres Furthermore, natality rates have decreased at a global scale in the last years, especially in Latin America. It is clear that international adoptions in Brazil enjoyed a peak in the early 2000s, with the consistent application of the Convention. In the past few years, the number of international adoptions has decreased, probably because of competition from other foreign centers for international adoption and due to the expansion of surrogacy centers. It is noticeable that more male minors are adopted internationally on average than female minors. This could be the result of a cultural bias among adopters in Brazil for girls. Therefore, considering the exceptional character of international adoption, it is understandable that boys, who might not match the preferences of national adopters, remain available for international adoption. The second aspect to be examined is the destination for minors adopted in Brazil, as shown below:

It is interesting to note a certain concentration of target receiving States where minors adopted in Brazil are taken to start a new life. Italy is clearly the leading country, followed by France and Spain. It is important to note that these three countries have a long-track history of cooperation with Brazil, including the existence of bilateral cooperation agreements focused on civil matters (Italy, 1989, Spain, 1989, France, 1996). In the case of Italy, it is important to mention that there are a huge number of Italians living in Brazil (with constant immigration flows to Brazil since the 19th century), which reinforces the cultural and legal changes between the two countries. In the case of France and Spain, a great number of minors adopted by residents in these two countries were granted to same-sex couples in the past few years, due to a close connection for it between the national authorities of these two foreign countries and some local commissions (local authorities) in Brazil.

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International Adoption in Brazilian Private International Law Other countries such as the United States, Germany, Norway and the Netherlands are frequent home destinations for minors adopted in Brazil for various reasons, such as a considerable flow of workers between these countries and Brazil, and the existence of several binational couples formed by a Brazilian partner/spouse and another partner/spouse who comes from one of these countries. Other destinations appear in smaller numbers, including other European countries and contracting States of the Hague Convention on Adoption 1993. The last item to be examined is the contribution of adoption agencies, as regulated in the Hague Convention on Adoption 1993, as shown below:

The data here reveals how the implementation of the Convention in Brazil contributed to promote the immediate use of the services of specialized agencies67 in order to achieve regular adoptions. From the end of the last decade, it is clear that the use of adoption agencies for international adoptions in Brazil becomes predominant. In fact, it was the Convention which introduced the culture of the use of adoption agencies in Brazil, which was almost unheard of before the Convention, as it ensured that such adoptions could be trusted.

67 Art. 10-12 of the Convention; for the use of accredited bodies; such as agencies, for promoting international adoption.

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V.

Conclusions

Even though Brazil is not as popular a country of origin for minors subject to intercountry adoption as China, India, Russia, South Korea or Ukraine, it is a country that unfortunately has many children waiting for a chance to have a family. On the one hand, Brazil has coherent rules that are strict enough to prevent adopted minors from being victims of human trafficking. On the other hand, Brazilian rules are clear and precise enough to encourage foreign adopters to think of considering Brazil a possible country to adopt a child. Its legal system matches the Hague Convention on Adoption of 1993 in such a way that it makes adoptions accessible for residents from other Contracting States, but not for residents of countries that are not parties to the Convention. Brazil has succeeded in bringing its domestic law up to the standards of the Hague Convention on Adoption 1993, with reforms to the CAA 1990, especially the reform made in 2009 (with the aim of adapting the domestic law to standards contained within the Hague Convention on Adoption 1993). Its domestic law clearly honors and reflects the criteria of the Convention for promoting international adoptions, attempting to promote the best interest of the child. Brazil has been perfectly fulfilling its obligations before other contracting States by duly applying the provisions of the Convention. In this regard, Brazil has issued a considerable number of adoption orders for adopters from contracting States of the Convention and has been open to the automatic recognition of adoption orders rendered in those States. As the country has recently been in the spotlight for different reasons, it would be nice if it could be recognized as a country with a serious and welcoming system for foreigners who wish to adopt a child. Maybe the possibility of adoption by same-sex couples, which is quite recent to some countries, could be a chance for many abandoned children in Brazil to find a new happy home abroad.

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NATIONAL REPORTS ________________

THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS IN RUSSIA IN THE ABSENCE OF TREATIES CURRENT PRACTICE Alexander ABYSHKO*

I.

III.

Problem Formulation A. Introduction B. Law and Justice C. The Principle of Cooperation among States and its Foundations Modern Russian Regulation and Practice A. Provisions of Procedural Laws and their Interpretation by the Courts B. The Right to a Fair Trial in the Practice of the ECHR and its Influence on Russia C. International Comity D. Broad Interpretation of International Treaties E. Application of the New York Convention of 1958 to Judgments of State Courts Closing Remarks

I.

Problem Formulation

A.

Introduction

II.

First, it is important to note that the Russian State court system is divided into two main branches: arbitration (arbitrazh) and common jurisdiction courts, with the Supreme Court of the Russian Federation as the head of both branches. The arbitrazh (commercial) courts are competent to hear cases of recognition of foreign judgments because they have jurisdiction over commercial and economic disputes between legal entities. The common jurisdiction courts deal mostly with disputes between individuals; therefore, they rarely consider applications for the recognition of foreign judgments. *

L.L.B., Higher School of Economics, Moscow.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 265-280 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Alexander Abyshko Generally, foreign judgments can be recognized and enforced in Russia only if a bilateral or multilateral international agreement exists (Art. 241 of the Arbitral Procedural Code; Art. 409 of the Civil Procedural Code). Only the Bankruptcy Law (Art 1. Cl. 6) allows the issuance of an exequatur without an international agreement on the grounds of the principle of reciprocity. The Russian Federation has concluded about 30 international agreements providing for the mutual enforcement of judgments. Most of these agreements, however, have been concluded with former socialist countries. None of the world's leading jurisdictions – such as the United States, Germany, Britain, France, and Japan – have such treaties with Russia. Decisions of foreign courts that do not require enforcement, e.g. divorce cases, as a rule also need to be recognized on the territory of the Russian Federation, but in a slightly different form. In case of recognition of such judgments, there are no stages of enforcement proceedings or specific actions aimed at implementation of judgments. The implementation of these judgments depends on the will of the interested parties, on the one hand, and requires the State and other bodies, as well as civil servants, to take all necessary actions to register the rights established by a foreign court decision that has entered into force, on the other. For scholars and practice lawyers from developed countries such an approach seems to be outdated. Nevertheless, the Russian legal system still follows some approaches which were generally accepted elsewhere not even in the 20th, but in the 19th century. While Russian procedural codes require the existence of an international treaty for the recognition and enforcement of foreign judgments, the Russian judicial system has been looking for ways to overcome this restrictive legislative regulation through various mechanisms. This restrictive interpretation of the aforementioned articles of Russian procedural codes, in my opinion, hinders Russia's integration into the world economy, and negatively impacts the protection of the rights and legitimate interests of Russian citizens and foreigners in the Russian Federation. This paper explores current trends in the use of various mechanisms of non-contractual inter-jurisdictional interactions in the absence of treaties by Russian courts, such as for example, international comity and broad interpretation of existing international treaties, that may allow some enforcement of foreign judgements in some cases. These specific attempts by Russian courts to overcome the present situation are rather interesting. B.

Law and Justice

Globalization is a modern stage in the evolution of society, where the interests of individuals and legal entities increasingly cease to be limited to the boundaries of one state. What is more, the opening of societies due to the evolving process of globalization has greatly enhanced the role of private actors in the ordering of transnational processes.1 As a result, the issue of operative cross-border enforcement of judgments has now become extremely urgent. 1 J. BASEDOW, The Law of Open Societies: Private Ordering and Public Regulation of International Relations: Recueil des cours, vol. 360, 2013, p. 62.

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Recognition and Enforcement of Foreign Judgments in Russia It should be noted that the theories behind inter-jurisdictional interaction in the execution of foreign judgments have very deep historical, cultural and political roots. Julius Paul, a famous Roman lawyer of the 3rd century, pointed out in the Digests that the law is not formed from the rule, but a rule is created from the acting law.2 A statement of Francis Accursius, glossator of the 13th century, is also well-known: “the right comes from justice, as from the parent, hence, justice – before the law.”3 One of the founders of the science of international law in Russia, F.F. Martens spoke similarly: “despite the diversity of political institutions, civil and criminal laws of modern civilized states, the basis of their law and legislation is the same source – the idea of truth and justice, inherent in human nature. International law has the same source from which all other branches of law are occurring.”4 In relation to the problem considered here, a modern Russian researcher A.I. Muranov noted that permission to enforce foreign judgments can be described as one of the specific means to achieve justice in the sphere of international civil and trade turnover.5 Why is it so extremely important to speak about justice? It should be clearly stated that the refusal to enforce a foreign judgment or arbitration award may violate universally recognized human rights, in particular, the right to a fair trial – and this situation, in my view, is completely unacceptable. Also, the impossibility to execute a foreign judgment may contradict the international obligations of states – in particular, the principle of jus cogens, according to which states are obliged to cooperate in order to promote the common welfare of people. Human rights and freedoms have become a universal, extraterritorial, supra-state principle of the created global law. C.

The Principle of Cooperation among States and its Foundation

One of the great achievements of human civilization is the generally recognized norms of international law (jus cogens), which are universally shared criteria for legitimacy and can even act as the basis for making decisions on specific cases by various international judicial institutions, as well as by domestic courts.6 Thus, according to Art. 53 of the Vienna Convention on the Law of Treaties, jus cogens is a norm accepted and recognized by the international community of states as a Non ex regula ius sumatur, sed ex iure quod est regula fiat. Available at . 3 Est autem ius a iustitia, sicut a matre sua, ergo prius fuit iustitia quam ius. See F. VON HAYEK, Law, legislation and freedom, Moscow 2006, p. 517. 4 F. MARTENS, Modern international law of civilized nations, Moscow 2008, p. 18. 5 See D. LITVINSKY, Recognition of foreign judgments in civil cases, St. Petersburg 2005, p. 21. 6 T. KLEINLEIN, Jus Cogens as the ‘Highest Law’? Peremptory Norms and Legal Hierarchies, Netherlands Yearbook of International Law, Vol. 46, 2015, p. 175. 2

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Alexander Abyshko whole as a norm from which no derogation is permitted and which can be modified only by a norm of the same character: “A treaty is void if, at the time of its conclusion, it conflicts with a peremptory norm of general international law. For the purposes of the present Convention, a peremptory norm of general international law is a norm accepted and recognized by the international community of States as a whole as a norm from which no derogation is permitted and which can be modified only by a subsequent norm of general international law having the same character.” 7 The Supreme Court of the Russian Federation, in the Decree on Application by the Courts of General Jurisdiction of Generally Recognized Principles and Norms of International Law and International Treaties of the Russian Federation of 10 October 2003,8 stated that the universally recognized principles of international law should be understood as the fundamental peremptory norms of international law accepted and recognized by the international community of states in general, deviation from which is unacceptable. One of these universally recognized principles of international law is the principle of cooperation among states, as enunciated in the Charter of the United Nations (Article 1, para. 3). The Declaration on the Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations (adopted by the UN General Assembly Resolution 2625 (XXV) of October 24, 1970), listing the generally recognized principles of international law, including the duty of States to cooperate with one another in the various spheres of international relations, irrespective of the differences in their political, economic and social systems, in order to maintain international peace and security and to promote international economic stability and progress, the general welfare of nations and international cooperation free from discrimination based on such differences. It is well known that generally recognized principles of international law regulate both public-law and private-law relations – they are obligatory for all actors in international law without exception – from states and international intergovernmental organizations to individuals and legal entities. The legal principle of cooperation is an integral part of the modern picture of the world and has both a mathematical and a biological basis (i.e. the corresponding substrate). The conceptualization of the need for cooperation has a foundation that was developed in game theory.9 American political scientist and economist R. Axelrod, who comprehensively studied the problem of cooperation, came to the conclusion that the best strategy for dealing with the well-known prisoner’s dilemma is tit-fortat (TFT, “an eye for an eye”). The basis of the strategy is to always cooperate during the first game, and then repeat the opponent's decision made during the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969. Entered into force on 27 January 1980. United Nations, Treaty Series, vol. 1155, p. 331 et seq. 8 Available at . 9 See R. AXELROD, The Evolution of Cooperation, New York 1984. 7

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Recognition and Enforcement of Foreign Judgments in Russia previous move. Axelrod extended his conclusions not only to the solution of this dilemma but also to the widest variety of life situations. Biological scientists (for example, J. Wilkinson) believe that TFT strategy based on cooperation is the most stable and effective evolutionary strategy as well.10 The prominent Austrian economist, philosopher and Nobel laureate F. von Hayek believes11 that the phenomenon of cultural evolution is expressed in group selection: groups that have effective institutions, flourish and increase in numbers, groups that have inefficient ones suffer from poverty and die out. From my point of view, this conclusion is applicable to the problems addressed in this paper: if the Russian Federation is striving to become a prosperous and economically developed country, it obviously must have a well-functioning and effective judicial system, which is essential for ensuring equal treatment, preventing arbitrariness and guaranteeing prompt protection of the rights of the widest circle of individuals and legal entities. The modern Russian judicial system is often seen as largely ineffective and corrupt, and the reasons for this situation are thought to be political, as some scholars consider: “At its most fundamental level the challenge of modernizing legal institutions in Russia is inherently political because while corruption and weak rule of law impose tremendous costs on society at large, they also produce concentrated benefits for powerful constituencies within the state and society. Rather than viewing corruption and weak rule of law as driven by the moral failings of state officials or the soviet legacy, it is far more productive to recognize the underlying political nature of the problem.” 12 However, it is very important to clarify one point here – international private law deals primarily with the actions of individuals, not States, and the actors in the mutual recognition and enforcement of foreign decisions are not states, but private parties. J. Basedow clarifies this aspect: “The enforcement of a foreign judgment is in the hands not of public applicants, but those of private parties, i.e. the winners of the foreign litigation. Neither the court addressed nor the government in the State of enforcement are reciprocally involved in the enforcement of their own judicial decisions in the country of origin of the foreign judgment… The consequences of non-enforcement are borne by private parties, not by States and their judiciary. It follows that their incentive to conclude and give effect to an international enforcement treaty is not the same as in the other fields of judicial cooperation.” 13 C. STEPHENS, Modelling Reciprocal Altruism, The British Journal for the Philosophy of Science, Vol. 47, Issue 4, 1 December 1996, p. 533–551. 11 See F. VON HAYEK, Fatal conceit. Errors of socialism, Chicago 1991. 12 T. FRYE/ M. SHULMAN, Corruption and Law in Russia: The View from the Firm, in A. ASLUND/ S. GURIEV/ A. KUCHINS (eds), Russia after the Global Crisis, Washington 2010. 13 J. BASEDOW, The Hague Conference and the Future of Private International Law – A Jubilee Speech, RabelsZ, Vol. 82 2018, p. 929. 10

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Alexander Abyshko Nevertheless, the obligation of States to provide opportunities for the realization of the rights of private parties should not be questioned. Thus, it is necessary to speak about the obligation of cooperation of States with each other for the benefit of private parties and the global community as a whole: this obligation is required by an imperative norm of international law, deviation from which is unacceptable. As for the legal system of the Russian Federation, its Constitution enshrines (Art. 17, Part 1) the recognition and guarantee of human and citizen rights and freedoms in accordance with generally recognized principles and norms of international law.14

II.

Modern Russian Regulation and Practice

A.

Provisions of Procedural Laws and their Interpretation by the Courts

As it was aforementioned above, at present, neither Russian procedure nor its codes provide the possibility of enforcing judgments rendered by foreign courts without an international treaty. Courts were looking for ways to overcome such a strict regulatory restriction. As far back as 2002, the Panel for Civil Cases of the Supreme Court adopted ruling No.5-G02-64 of June 7, 2002, stating explicitly that an application for recognizing and enforcing a foreign judgment may be granted by a competent Russian court without the existence of an appropriate international agreement. This ruling was also cited by the ECHR, which noted in Petr Korolev v. Russia: “At the same time, in view of the decision of the Supreme Court of Russia of 7 June 2002 cited above, it is cognisant that the Russian legal system does not exclude enforcement of the judgments adopted by the courts of the State with which Russia has no pertinent agreement and authorizes the courts of general jurisdiction to consider other relevant factors when examining the case.”15 On the other hand, the Constitutional Court of the Russian Federation in its Decision No. 890-О of 17 June 2013 stipulated: “In accordance with Art. 409, Part 1 of the Civil Procedure Code of the Russian Federation, decisions of foreign courts are recognized and enforced in the Russian Federation only if so provided by an international treaty of the Russian Federation. In accordance with this norm, adopted in the development of the provisions of Art. 6, Part 3 of the Federal Constitutional Law of December 31, 1996, 14 In the Russian Federation recognition and guarantees shall be provided for the rights and freedoms of man and citizen according to the universally recognized principles and norms of international law and according to the present Constitution. Available at: . 15 ECHR, 21 October 2010, Petr Korolev v. Russia, App. no. 38112/04.

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Recognition and Enforcement of Foreign Judgments in Russia No. 1-FKZ On the Judicial system of the Russian Federation, the Constitutional Court noted that in the absence of an international treaty with the foreign state, the foreign state’s decision does not have any legal effect within the territory of the Russian Federation.”16 It is important to understand that in this case the Constitutional Court speaks only of decisions requiring special proceedings for forced execution. Special proceedings are not necessary, e.g. for decisions to terminate or invalidate a marriage between Russian citizens if both spouses lived outside the Russian Federation at the time of the case. Notwithstanding, there is still a possibility for interested parties to file objections (Art. 413 of the Civil Procedure Code). Nevertheless, the Concept of a Unified Civil Procedure Code explicitly provides for the possibility of recognition and enforcement of foreign judgments not only in cases provided by an international treaty and federal law, but also on the basis of reciprocity (Chapter 57 of the Concept).17 In my opinion, such regulation is not sufficiently progressive – the recognition of judgments based on the principle of reciprocity has many shortcomings and the consistent implementation of this principle in practice can lead to a systematic violation of the right to a fair trial. B.

The Right to a Fair Trial in the Practice of the ECHR and its Influence on Russia

The right to a fair trial assumes two different dimensions: the most important one is that it allows each party to be treated equally and therefore to have the same chance to win on the merits; the other dimension of the right to a fair trial is that it protects the right of litigants to simply participate in the proceedings.18 However, the European Court of Human Rights in its practice has revealed several more elements of this right. The Russian Federation is a party to the European Convention for the Protection of Human Rights and Fundamental Freedoms of 1950, which entered into force for Russia on 5 May 1998. Art. 6 Part. 1 of the Convention states that everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. The ECHR interprets the provisions of this article not only as ensuring the right to a fair trial but also as the right to have a judgment enforced. The scope of Art. 6 was discussed by the Court in Hornsby v. Greece. The Court held that:

16 Author’s translation. Decision is available at: . 17 The Concept of the Unified Civil Procedure Code of the Russian Federation. (approved by the decision of the Committee on Civil, Criminal, Arbitration and Procedural Legislation of the State Duma of the Federal Assembly of December 12, 2014 No. 124 (1). 18 G. CUNIBERTI, Some Remarks on the Efficiency of Exequatur, University of Luxembourg Law Working Paper, 1/ 2012, p 5.

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Alexander Abyshko “Right would be illusory if a Contracting State’s domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party. It would be inconceivable that Article 6 para. 1 (art. 6-1) should describe in detail procedural guarantees afforded to litigants – proceedings that are fair, public and expeditious – without protecting the implementation of judicial decisions; to construe Article 6 as being concerned exclusively with access to a court and the conduct of proceedings would be likely to lead to situations incompatible with the principle of the rule of law which the Contracting States undertook to respect when they ratified the Convention (see, mutatis mutandis, the Golder v. the United Kingdom judgment of 21 February 1975, Series A no. 18, pp. 16-18, paras. 34-36). Execution of a judgment given by any court must therefore be regarded as an integral part of the «trial» for the purposes of Article 6.”19 The Court expressed a similar position in Burdov v. Russia. Of course, such an interpretation of Art. 6 of the Convention was given by the Court in relation to the enforcement of internal judgments. Nevertheless, as D. Litvinsky rightly notes, such an interpretation may be extended to the area of recognition and enforcement of a foreign State court’s decisions.20 It should be noted that in modern Russian judicial practice, the understanding of the need to recognize judgments of countries with which an international agreement is absent is beginning to find its place precisely in connecion with the provisions of Art. 6 of the European Convention. In 2012 the Supreme Arbitration Court in its ruling of 26 July 2012 on Case No. А40-119397/2011, enforcing the decision of High Court of Justice of England and Wales, referred, in particular, to the position of ECHR in Tolstoy Miloslavsky v United Kingdom and noted that “the application by the courts of the United Kingdom of the court bail is permissible and even necessary to ensure the right to a fair trial, both for the plaintiff and the defendant”.21 There are several more actual examples of the use of Art. 6 of European Convention for the enforcement of foreign judgments. The Arbitration Court of Moscow in its ruling of 28 February 2018 on Case No. А40-197683/2017, by which the decision of the Commercial Court of Paris was recognized, referred, inter alia, to Art. 6 of European Convention.22 The Arbitration Court of Sevastopol in the ruling of 27 April 2018 on Case No. A84-1200/2017 noted:

ECHR, 19 March 1997, Hornsby v. Greece, App. no. 18357/91. D. LITVINSKY (note 5), at 367. 21 Available at . 22 Available at . 19 20

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Recognition and Enforcement of Foreign Judgments in Russia “A special international treaty on legal assistance in relation to the recognition and enforcement of court’s decisions of the Kingdom of the Netherlands in the Russian Federation does not exist. However, the Russian Federation is a party to numerous international conventions and agreements that grants the rights of individuals to a fair and public hearing by an independent and impartial tribunal. Hence, in accordance with Art. 6 Part. 1 of the Convention for the Protection of Human Rights and Fundamental Freedoms of November 4, 1950, the execution of a judgment rendered by any court of a country, which is a party to the Convention must be recognised by the Russian court as the proper observance of the right of a person to a fair trial.”23 Moreover, the Arbitration Court of Moscow in its ruling of 16 March 2017 on Case A40-202676/2015 referred directly to the ECHR Judgment in Hornsby v. Greece, noting: “The execution of a judgment rendered by any court must be regarded as an integral part of the «court» for the purposes of Article 6 of the European Convention and the right to a court under Art. 6 of the 1950 Convention, is regarded by the ECHR as covering all stages of the trial and includes the stage of enforcement of judgments, including decisions made abroad.”24 The norms and principles contained in the Charter of the United Nations and international treaties should be the unconditional basis for fulfilling the functions of the state to ensure the full access of citizens to justice, regardless of state boundaries – such is the requirement of an imperative norm of international law. The following section analyses non-contractual instruments of interjurisdictional interaction applied by Russian courts in the execution of foreign judgments in the absence of an international treaty. The first such instrument is, of course, the doctrine of international comity. C.

International Comity

In accordance with the provisions of Art. 5, Part 3 of the Federal Constitutional Law On the Judicial System of Russian Federation, the court, having established in the proceedings a discrepancy between the act of a state or another body, and the Constitution of the Russian Federation, federal constitutional law, federal law, generally recognized principles and norms of international law, the international treaty of the Russian Federation, constitution (charter) of the subject of the Russian Author’s translation. Decision is available at . 24 Available at . 23

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Alexander Abyshko Federation, or the law of federal subject of the Russian Federation, takes a decision in accordance with the legal provisions that have the greater legal force. To understand the situation, it is necessary to clarify that in the Russian legal system an international treaty such as, e.g. the European Convention on Human Rights has a higher rank as compared with internal legislation. One of the universally recognized principles of international law is the principle of sovereign equality of States (Article 2 of the UN Charter). The recognition of sovereign equality led to the doctrine of international comity (comitas gentium), according to which recognition of foreign judgments is carried out with full respect for the manifestations of the sovereignty of a foreign State. Of course, it is very important to note that this doctrine is not universal and its influence expands mostly on common law countries – it has no place in many continental countries. Nevertheless, academic literature notes that an increasing number of countries refer to the international comity – with the United States, Britain, Switzerland, and Ireland among them.25 As the American scholar J. Paul emphasizes, international comity “requires respect not only for foreign sovereigns, ... but also for the market itself”. This concept was adopted by Russian doctrine and judicial practice. Thus, Supreme Arbitration Court in its ruling of 7 December 2009 on case No. A41-9613/09, by which the decision of Dutch court was enforced, stated: “This decision can be recognized and enforced on the territory of the Russian Federation on the basis of generally recognized principles of international law… The courts correctly determined the procedural and material grounds for recognizing a foreign judicial act: Art. 241 of the Arbitration Procedural Code; Par. 4 of Art. 15 of the Constitution; the generally recognized principle of international comity, which stipulates that States should respect foreign legal system; the principle of reciprocity, which provides for the mutual respect by the courts of different States for the judgments of each other; international treaties of the Russian Federation (Russia-European Union Partnership and Cooperation Agreement, Art. 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms of 1950). In addition, court’s conclusions do not contradict the established practice of arbitration courts and courts of general jurisdiction, which enforce foreign judgments in the absence of a bilateral international treaty…”26 The Supreme Arbitration Court reached the same conclusion in its ruling of 26 July 2012 on case No. VAS-6580/12 on case No. A40-119397/11-63-950).27 D. KAISIN/ M. BEZRUCHENKOV, Execution of Russian judgments abroad: current trends. Bulletin of International Commercial Arbitration, 2/2016, p. 166. 26 Author’s translation. Decision is available at . 27 Available at . 25

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Recognition and Enforcement of Foreign Judgments in Russia The concept of international comity, nevertheless, is characterized by its inconsistency and uncertainty. For example, J. Paul gives several opinions on this issue: comity is characterized as a principle of private international law, a principle of international public law, a moral obligation or as a norm of domestic law.28 There is also no agreement on whether international comity is a rule of natural law, custom, or a rule of internal law. J. Story spoke of international comity as “not only a theoretical but also a legal justification for the resolution of conflict of laws problems – a court in one country may apply the laws of another country by virtue of comity”.29 In general, international comity is usually understood as a doctrine, by virtue of which the State recognizes the legal acts of another State due to respect for the sovereignty of this State. In legal literature, three types of international comity are distinguished according to the form of acts of foreign jurisdiction: related to foreign legislative acts – prescriptive comity; related to foreign judicial acts – judicial comity (adjudicative comity); and related to the actions of a foreign sovereign as a party to litigation (sovereign party comity).30 In this study, the most important is the second type of international comity – that related to judicial acts. It is often called comity of the courts.31 The literature suggests that the principle of binding mutual cooperation of States originated from its mild form – comity, transformed into a duty to cooperate with each other for the benefit of their citizens.32 In Russian jurisprudence, international comity is often identified with reciprocity, which is, in my opinion, incorrect. As D. KAISIN rightly notes, reciprocity is a product of international comity, but there can be no equality between them.33 Nevertheless, the doctrine of international comity has long been recognized as not absolute. Considerations of respect for the sovereignty of States do not prevent courts from assessing violations of international law, public order, human rights or the requirements of fair justice. The enforcing court must determine whether the defendant was granted fair process by the foreign legal system when the foreign court granted judgment. Fair process is one that “reasonably guarantees basic procedural safeguards such as judicial independence and fair ethical rules governing the participants in the judicial system”.34 As Lord Collins expressed in 28 J. PAUL, The Transformation of International Comity, 71 Law and Contemporary Problems 2008, p. 20. 29 D. CHILDRESS, Comity as Conflict: Resituating International Comity as Conflict of Laws. UC Davis Law Review, Vol. 44, 2010, p. 13. 30 Ibid. 31 R. ALFORD, Ancillary Discovery to Prove Denial of Justice, 53 Virginia Journal of International Law 2012, p. 147. 32 T. NESHATAEVA, The court and universally recognized principles of international law, Journal of the Supreme Arbitration Court of Russia 2004/ 3, p. 128. 33 D. KAISIN, The doctrine of international comity and enforcement of foreign judgments in Russia, Law 2014/ 6, p. 157. 34 A. PRIBETIC, Thinking Globally, Acting Locally: Recent Trends in the Recognition and Enforcement of Foreign Judgments in Canada, in T. ARCHIBALD/ R. ECHLIN (eds), Annual Review of Civil Litigation 2006, p. 141 et seq.

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Alexander Abyshko AK Investment CJSC v. Kyrgyz Mobil Tel Ltd,35 considered by the High Court of the Isle of Man in 2011, “The true position is that there is no rule that the English court (or Manx court) will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence. … Otherwise the paradoxical result would follow that, the worse the system of justice in the foreign country, the less it would be permissible to make adverse findings on it. …comity considerations require the court not to pass judgment on the foreign court system without adequate evidence”. Thus, one of the main grounds for the recognition of foreign judgments is the concept of international comity, provided that the foreign court has not violated the fundamental principles of the rule of law established by existing international treaties. Russian courts make quite an active use of this instrument when enforcing foreign judgments. An example of this is a ruling of the Moscow Arbitration Court of 12 December 2017 on Case No. A40-186882/17-141-1724, by which a judgment of the High Court of the British Virgin Islands was enforced. The court noted, in particular, that “One of the universally recognized principles of international law is the principle of international comity, in accordance with which states should respect foreign legal order... [T]he principle of reciprocity presupposes mutual cooperation of states to recognize the rights and interests of individuals, and the rights of such persons can be determined not only by foreign law, but also by the decision of a foreign court, everyone is guaranteed judicial protection of his rights and freedoms.”36 The Court correctly referred not only to the principle of international comity, but also to the right to judicial protection, enshrined in the Constitution in close connection with the principle of cooperation under the UN Charter. D.

Broad Interpretation of International Treaties

The basis for the use of this instrument was the above-mentioned definition of the Supreme Court of Russia of 7 June 2002, No. 5-G02-64,37 where the Court referred Available at . Author’s translation. Available at . 37 Available at . 35 36

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Recognition and Enforcement of Foreign Judgments in Russia to the Agreement between the Government of Russia and the Government of the United Kingdom of Great Britain and Northern Ireland on Economic Cooperation of 9 November 199238 and the Agreement on partnership and cooperation between Russia and the European Union of 24 June 1994.39These international treaties do not provide for the mutual recognition and enforcement of judgments, but they contain a provision that the signatories of these Agreements provide non-discriminatory access to individuals and legal entities of the other party to their own courts to protect their individual rights. Later this practice was supported by the Supreme Arbitration Court. Thus, the Presidium of the Supreme Arbitration Court of the Russian Federation in its ruling No. 6004/13 of 8 October 2013 on Case No. A40-56571/124041 recognized the ruling of the High Court of Justice of Northern Ireland, referring to the fact that the Russian Federation and the United Kingdom of Great Britain and Northern Ireland are parties to the UN Convention against Corruption of 2003 (Art. 14, Part 5), the Agreement on Partnership and Cooperation of 1994 (Art. 98, Part 1) and the Agreement on Economic Cooperation of 1992 (Art. 11). None of the listed international treaties contains provisions on the recognition and enforcement of judgments – they only mention the cooperation of countries. In this way the Supreme Court in 2002 laid a fundamentally new, broad interpretation of the category “international treaty”, and since this moment Russian courts began to understand international treaties not only as special agreements with a particular state, which provide the mutual execution of judgments, but also as bilateral and regional agreements of a more general nature on legal assistance and cooperation between states. E.

Application of the New York Convention of 1958 to Judgments of State Courts

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards42 (ratified by the Decree of the Presidium of the Supreme Soviet of 38 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Russian Federation on economic co-operation. 09.11.1992. Available at . 39 Agreement on partnership and cooperation establishing a partnership between the European Communities and their Member States, of one part, and the Russian Federation, of the other part. OJ L 327, 28.11.1997, p. 3–69. Available at . 40 Available at . 41 Available at . 42 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1969. Entered into force on 7 June 1959. United Nations, Treaty Series, vol. 330, p. 3 et seq.

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Alexander Abyshko the USSR of 10 August 1960) plays a key role in the matter of regulating the procedure for recognizing and enforcing decisions of foreign arbitration bodies. A commonplace in modern Russian legal literature is that the application of this Convention to the recognition and enforcement of decisions of state courts is fundamentally wrong. For example, M.N. Samoilov wrote an article devoted to an analysis of this erroneous, in his opinion, practice.43 According to him, “the application of the New York Convention to the recognition of foreign judgments on the territory of Russia is a mistake that, without any doubt, should be eliminated”.44 Many authors have expressed a similar view. In my opinion, such a restrictive interpretation is not entirely accurate. Most likely, courts, referring to de lege lata not applicable 1958 Convention, unconsciously apply the above-mentioned concept of international comity. There seem to be no compelling political and legal reasons for refusing to issue an exequatur for the enforcement of foreign judgments, subject to the restrictions imposed by the New York Convention, which are natural for any legal order – namely contrary to public policy and non-arbitrability under the legislation that issues the country's exequatur. If the State trusts international commercial arbitration, and enforces their decisions, why not trust foreign State courts that have higher standard of proof? State courts, unlike commercial arbitration, have a multi-stage system for verifying judgments aimed at preventing an illegal decision. State courts are bound to the principle of “iura novit curia”– the basis for the cancellation of their decisions can be the improper application of substantive and procedural law, while there are no such grounds for the cancellation of an arbitral award. The UNCITRAL Model Law on International Commercial Arbitration, as well as the New York Convention, does not provide such a basis for the cancellation of the decision as the improper application by arbitrators of the rules of law recognized to be applicable. Thus, both the UNCITRAL Model Law and the New York Convention, in fact, grant arbitrators complete freedom both in the choice of the applicable law and in its application. Undoubtedly, erroneous decisions, where Russian courts could not distinguish commercial arbitration from State court, exist. For example, the Arbitration Court of the Rostov Region in its ruling of 29 July 2015 on case No. А53-11372/ 2015, enforcing the judgement of Ukrainian state court, noted that “the grounds for refusal to recognize and enforce the decision of the Economic Court of the Kharkiv Region ... provided for the provisions of Article V of the Convention [of the New York Convention] ... have not been established, the statement of LLC... to be satisfied.”45 Many more judgments like that can be mentioned, but such mistakes are more likely related to the fact that there is a contradiction in Russia regarding the understanding of the term “arbitration court”. None of the existing legal sys43 M. SAMOILOV, Application of the New York Convention to foreign judgments: an analysis of the erroneous practice of Russian courts, Bulletin of Economic Justice, 2017/ 2, p. 110–128. 44 Ibid. 45 Available at: .

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Recognition and Enforcement of Foreign Judgments in Russia tems include arbitration in the judicial system. Moreover, even in terms of terminology, a clear distinction is made between the court (“court”, “tribunal”, “cour”, “Gericht”) and an alternative private dispute resolution method – arbitration (“arbitration”, “arbitrage”, “Schiedsgericht”).

III. Closing Remarks International law offers many rules and principles prescribing the enforcement of foreign judgments, as a means of international cooperation. These principles are closely connected with the right to a fair trial, as stipulated in Art. 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. The right to a fair trial cannot be realized without guarantees that the judgment rendered by the competent court will be enforced – within the reasonable limitations established by international treaties. Nevertheless, the judicial practice of Russian courts of general jurisdiction does not provide many examples of enforcement of decisions of foreign courts in the absence of an international treaty. Arbitration courts, on the other hand, have adopted a more progressive position, since – as mentioned above, they actively issue exequatur for the enforcement of foreign decisions, using a variety of instruments. Some scholars condemn the current state of affairs, e.g. N.A. SHEBANOVA argues that “this state of affairs is contrary to national interests and affects the sovereignty of Russia”.46 J. BASEDOW emphasizes that as an empirical science, comparative law contributes to our knowledge about foreign legal systems and the law-related aspects of society and economy.47 In the reform of Russian legislation, in my opinion, the French approach should be taken into account. As pointed out by KAISIN and BEZRUCHENKOV, the Russian Federation may benefit of the example of France, where, despite the absence of a procedure for enforcing foreign judgments in the procedural law, as a result of a long evolution, three basic requirements for the enforcement of a foreign judgment are required: 1) the foreign court must have jurisdiction to resolve the dispute (c.d. contrôle de la compétence indirecte); 2) the foreign court must correctly apply its rules and procedures; 3) the foreign judgment must not conflict with public policy.48 A foreign decision that really affects sovereignty or violates the fundamental principles of Russian law may not be enforced because it would be contrary to Russian public policy. This exception seems to have been used by Russian courts 46 N. SHEBANOVA, Recognition and enforcement of foreign judgments in the practice of Russian courts), Works of the Institute of State and Law of the Russian Academy of Sciences, 2017/ 1, p. 25. 47 J. BASEDOW, Comparative Law and its Clients, American Journal of Comparative Law, Vol. 62, No. 4, pp. 821–857, 2014; Max Planck Private Law Research Paper No. 14/2, p. 33. 48 D. KAISIN/ M. BEZRUCHENKOV (note 25), at 166.

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Alexander Abyshko in recent years without sufficient basis, but this is an issue that should be discussed separately.49 The purpose of this paper was mainly to demonstrate that the categorical statements often expressed in Russian legal literature that there can be no enforcement of a foreign judicial decision50 in the absence of an international treaty disregards a plurality of sources of law, and primarily the UN Charter and international treaties.

49 Many Russian scholars notice the admissibility of such practice. See for instance: A. SHULAKOV, Public order in the international private law and problems regarding the interpretation of the overriding rules, Lex russica, Vol. 4 2018, p 81 et seq. 50 See for instance N. MARISHEVA, Issues of Recognition and Execution in Russia of Decisions of Foreign Courts, Journal of Russian Law, 2006/ 8, p. 21.

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THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS IN SLOVENIA NATIONAL LAW AND THE BRUSSELS I (RECAST) REGULATION Jerca KRAMBERGER ŠKERL*

I. II.

III.

Introduction The Recognition and Enforcement of Foreign Judgments under Slovenian National Law A. The Scope of Application of Slovenian National Law B. Historical Development C. The Judgment as the Object of Recognition and Enforcement D. The Recognition of Foreign Judgments in Slovenian National Law 1. The Procedure for Recognition as the Main Object of Proceedings a) The Application for Recognition and Appeals b) Parties to the Procedure for Recognition c) Costs of the Recognition Proceedings 2. Incidental Recognition 3. Foreign Judgment as Evidence in Civil Proceedings 4. Grounds for Refusal of Recognition of Foreign Judgments a) Violation of the Right to Be Heard b) Exclusive Jurisdiction of Slovenian Courts c) Exorbitant Jurisdiction of the Court of Origin d) The Existence of a Final Judgment in the Same Matter and Lis Pendens e) The Public Policy Defence f) The Lack of Reciprocity between the State of Origin and Slovenia E. The Enforcement of Foreign Judgments in Slovenian National Law 1. The Absence of Exequatur in Slovenian Law 2. The Enforcement of a Recognised Foreign Judgment 3. The Enforcement of a Foreign Judgment which Has Not Yet Been Recognised The Recognition and Enforcement of Judgments in Slovenia under the Brussels I (Recast) and Other EU Regulations A. The Temporal Scope of Application of the Brussels I (Recast) Regulation in Slovenia B. The Procedure for the Declaration of Enforceability under the Brussels I Regulation and Other EU Regulations Providing for the Exequatur

*

Associate Professor, Faculty of Law, University of Ljubljana.

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Printed in Germany

Jerca Kramberger Škerl C.

IV.

Procedure Relating to the Application for Refusal of Enforcement under the Brussels I (Recast) Regulation 1. Separate Adversarial Proceedings with the Application for Refusal of Enforcement 2. No Possibility of Incidental Proceedings Regarding Grounds for Refusal D. The Adaptation of Foreign Measures Conclusion

I.

Introduction

In Slovenia, the recognition and enforcement of foreign judgments is governed by numerous legal acts on the national, European Union (hereinafter EU) and international levels. The fact that such legislation is so scattered, especially at the EU level, can be problematic for practitioners, as well as for scholars trying to provide a clear and comprehensive representation of the Slovenian system. Such an endeavour would largely exceed the appropriate length of this article. This contribution will therefore focus on the most widely applied instruments. These are, in national law, the Slovenian Private International Law and Procedure Act (hereinafter the PILPA),1 and in EU law, the Brussels I Regulation both in its original2 and recast3 versions. Where necessary and relevant, other legislation will be briefly mentioned. As the title of this article suggests, this research will be limited to the recognition and enforcement of foreign judgments and will leave aside foreign authentic instruments and foreign arbitral awards.

1 Zakon o mednarodnem zasebnem pravu in postopku, Official Gazette of the Republic of Slovenia (hereinafter: OG RS) Nos. 56/99 and 45/08. For the English translation of the PILPA and a short presentation of Slovenian Private International Law in general, see: J. KRAMBERGER ŠKERL, Slovenia, in J. BASEDOW et al. (eds.), Encyclopedia of Private International Law, E. Elgar 2017, p. 2503-2515 and p. 3784-3804. 2 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12 of 16 January 2001. 3 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJ L 351 of 20 December 2012.

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Recognition and Enforcement of Foreign Judgments in Slovenia

II.

The Recognition and Enforcement of Foreign Judgments under Slovenian National Law

A.

The Scope of Application of Slovenian National Law

Slovenian national law applies to the recognition and enforcement of foreign judgments in the absence of applicable EU law or international bi- and multilateral treaties. This is explicitly stated in the PILPA,4 which is the main legal source in this field. The hierarchical position of international treaties and EU law in the Slovenian legal system is determined by the Constitution.5 Article 8 of the latter provides: “Laws and other regulations must comply with generally accepted principles of international law and with treaties that are binding on Slovenia. Ratified and published treaties shall be applied directly.” Article 3a/3 of the Constitution, added in 2003, defines the place of EU law within the national legal system: “Legal acts and decisions adopted within international organisations to which Slovenia has transferred the exercise of part of its sovereign rights shall be applied in Slovenia in accordance with the legal regulation of these organisations.” The PILPA came into force in July 1999. In the absence of any prevailing transitional provision, and provisions on recognition and enforcement being of a procedural nature, the PILPA thus applies to all proceedings for recognition and enforcement initiated after its entry into force, without regard to the moment of issuance of the foreign judgment.6 Regarding the material scope of application, Article 1 provides that the Act applies to all personal, family, labour, social, patrimonial and any other private law relationships with a foreign element. The Supreme Court of Slovenia held that the question of whether a judgment has been issued in the field of private law is to be determined under Slovenian law (and not under the law of the state of origin of the judgment).7

Article 4 of the PILPA reads as follows: “This act does not apply regarding the relationships which are regulated in another act or international treaty.” 5 Ustava Republike Slovenije, OG RS No. 33/91-I, with further amendments. The English translation of the Constitution is available at: (accessed on 1 March 2019). 6 According to Art. 119, the PILPA entered into force on 28 July 1999. Art. 118 provides: “On the day of the entry into force of this Act, the Act Regulating Conflict of Laws with Regulations of Other Countries in Certain Relations (OG of the Socialist Federative Republic of Yugoslavia, Nos. 43/82 and 72/82) shall cease to apply.” 7 E.g., in Judgment of the Supreme Court No. Cp 15/2014 of 14 May 2015 the Supreme Court held that a Serbian judgment on the annulment of a judgment by which the applicant was convicted on the ground of “collaboration with the enemy” and by which several of his assets were confiscated, does not fall into the scope of application of the PILPA. 4

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Jerca Kramberger Škerl B.

Historical Development

At the beginning of the 20th century, the enforcement of foreign judgments was regulated by the Enforcement Order of Slovenia-Dalmatia,8 which already adopted the so-called system of limited control (contrôle limité). Among the conditions for enforcement and grounds for refusal, this Order provided for the public policy exception, as well as for the right of the defendant to personal service of the introductory act in the proceedings and their right to participate in the proceedings. Later, the recognition and enforcement of foreign judgments was to be regulated in Article 17 and following of the Introductory Act to the Yugoslav Civil Procedure Act of 19579 as a special contentious procedure. In 1982, the Act on the Regulation of Conflicts with Foreign Laws in Specific Relationships10 was adopted.11 With this Act, the Yugoslav legislature for the first time systematically regulated recognition and enforcement of foreign judgments, regulating on one hand the grounds for refusal of recognition and enforcement, and on the other the procedure that the court was to follow in deciding on these issues. This was also the Act by which the Yugoslav legislature decided to regulate in a single Act international jurisdiction, applicable law, and the recognition and enforcement of foreign judgments. Until today, Slovenian legislation and doctrine define private international law as the ensemble of these three fields. The Germanic tendency of treating procedural questions separately from applicable law was thus not followed.12 The Yugoslav Act of 1982 was accepted into the legal order of the newly founded Slovenian state.13 It remained in force until 1999 when the PILPA was adopted. The new Act was a recast version of the old one: the structure of the Act and most of the rules remained the same. Regarding the grounds for refusal of recognition and enforcement of foreign judgments, the PILPA formulated the exception of public policy by a general clause and omitted two provisions determining special conditions as to the recognition of judgments on personal status. Other grounds for refusal went unchanged, while the rules on the procedure for recogni8 Slovensko-dalmatinski izvršilni red. See S. LAPAJNE, Mednarodno in medpokrajinsko zasebno pravo, Tiskovna zadruga, Ljubljana 1929, p. 240-241. 9 Uvodni zakon k Zakonu o pravdnem postopku, OG of Yugoslavia, No. 4/57. 10 Zakon o ureditvi kolizije zakonov s predpisi drugih držav v določenih razmerjih, OG of Yugoslavia, No. 43/82 and 72/82. 11 For a thorough presentation of this act’s chapter on recognition and enforcement of foreign judgments, see e.g. T. VARADY, Anerkennung und Vollstreckung ausländischer Entscheidungen in Yugoslawien, RabelsZ 4/1987, p. 632-680. 12 M. DIKA/ G. KNEŽEVIĆ/ S. STOJANOVIĆ, Komentar zakona o međunarodnom privatnom i procesnom pravu, Nomos, Belgrade 1991, p. 9. 13 Art. 4 of the Constitutional Act Implementing the Basic Constitutional Charter on the Independence and Sovereignty of the Republic of Slovenia (Ustavni zakon za izvedbo temeljne ustavne listine o samostojnosti in neodvisnosti Republike Slovenije, OG RS No. 1/91), which conferred to the legislation of the ex-Yugoslavia a prolongation of validity in the Slovenian territory until the adoption of new laws, under the condition that it is not contrary to the Slovenian legal order.

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Recognition and Enforcement of Foreign Judgments in Slovenia tion of foreign judgments also remained essentially the same, except for the newly regulated unilateral first stage of the recognition proceedings, as will be explained below. C.

The Judgment as the Object of Recognition and Enforcement

The nature of the judgment is determined, in Slovenian private international law, under the law of the country of origin of the judgment. Article 94 of the PILPA namely provides that a foreign judgment is a judgment issued by a court of a foreign country, a judicial settlement concluded before a foreign court or a decision issued by any authority of a foreign country which in that country carries weight equal to a court judgment or judicial settlement. Only foreign judgments on the merits can be considered for recognition, and not court decisions on procedural issues.14 As a consequence, foreign judgments granting recognition or exequatur cannot be recognised in Slovenia (the so-called prohibition of exequatur of the exequatur).15 The judgment must concern private law matters (Article 1/1 of the PILPA). Thus, it is not possible under this Act to file for the recognition of a foreign administrative decision.16 The judgment must be issued by an authority of a sovereign foreign country. The exact place where the judgment was issued is irrelevant. Judgments issued outside the territory of the state of origin of the judgment can be eligible for recognition and enforcement if they were issued by an authority of that state (the personal criterion).17 The Slovenian Supreme Court has decided that the legal and diplomatic recognition of the state of origin of the judgment is not a condition for the recognition of the judgment in Slovenia, as long as such state fulfils the conditions generally required for a state to be recognised by the international community.18 There is no general rule in the PILPA as to the possibility of recognition and enforcement of foreign provisional or temporary measures. However, given 14 M. PAŠEK, Priznanje in izvršitev tujih sodnih odločb, Master Thesis, Faculty of Law, University of Ljubljana, July 2005, p. 35-36. 15 This author shares the opinion of foreign doctrine on this matter, e.g., R. GEIMER, Internationales Zivilprozeßrecht, 3th ed., Köln, 1997, No. 2849, p. 712; Y. LOUSSOUARN/ P. BOUREL/ P. DE VAREILLES-SOMMIÈRES, Droit international privé, 9th ed. Dalloz, 2007, p. 738, No. 492-8; H. NAGEL/ P. GOTTWALD, Internationales Zivilprozessrecht, 6th ed., Köln, 2007, p. 533, No. 13. 16 Judgment of the Appellate Court of Ljubljana No. I Cp 1487/2018 of 9 January 2019. 17 For example, a judgment issued by a member of staff entitled to do so at the consular or diplomatic mission of the state A in the state B, would be considered foreign if its recognition was sought in the state B. The same argument can be used regarding judgments issued in the territories later annexed by the requested state etc. I. GRBIN, Priznanje i izvršenje odluka stranih sudova, Informator, Zagreb 1980, p. 20. 18 The judgment in question was a judgment issued in the Federal Republic of Yugoslavia at a time when Slovenia had not yet officially recognised that state. Judgment of the Supreme Court, No. Cp 6/2000 of 22 June 2000.

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Jerca Kramberger Škerl that Slovenian courts hold exclusive jurisdiction to permit and conduct enforcement proceedings if the enforcement is requested to be carried out on the Slovenian territory, the recognition and enforcement of foreign provisional measures will often be precluded, since the exclusive jurisdiction of Slovenian courts is one of the grounds for refusal of recognition and enforcement of foreign judgments (which the court controls proprio motu) (Article 97 of the PILPA). 19 Under Article 95 of the PILPA, only final foreign judgments having effect of res judicata and court settlements can be recognised. The finality of the judgment is interpreted according to the law of the country of origin of the judgment.20 The Slovenian courts cannot verify whether the foreign authority acted correctly in confirming the finality of the judgment.21 According to Article 103 of the PILPA, only final and enforceable, as opposed to provisionally enforceable, foreign judgments can be enforced.22 Foreign public documents produce effects in the Slovenian legal order under the conditions of the applicable EU regulations or the Hague Legalisation Convention,23 or else under the Slovenian Act on Verification of Documents in International Traffic.24 In a judgment of 2011, the Supreme Court had to decide whether a foreign directly enforceable notary act could be enforced in Slovenia. The Appellate Court of Koper decided, in Judgment No. Cpg 595/97 of 11 December 1997: “The interim order is a special judgment which is at the same time an enforceable title and the decision on the authorisation of enforcement. Since the judgment on the interim order is, at the same time, also a decision on the authorisation of enforcement, it is understandable that an interim order regarding assets located in the Republic of Slovenia cannot be issued by a court outside the territory of the Republic of Slovenia.” In Judgment of the Supreme Court No. Cp 6/2002 of 5 December 2002, the Supreme Court confirmed a first instance judgment refusing the recognition of a foreign interim order; however, the appeal was only lodged against another part of the judgment, so the Supreme Court did not comment on the mentioned provisional measure. Galič deems that provisional measures cannot be recognised and enforced in Slovenia, with a possible exception of the orders of attachment and transfer of a garnished claim. A. GALIČ, Die Anerkennung und Vollstreckung von gerichtlichen Entscheidungen in Slowenien nach dem Betritt zur EU, in M. KENGYEL/ W.H. RECHBERGER (eds.), Europäisches Zivilverfahrensrecht: Bestandsaufnahme und Zukunftsperspektiven nach der EU-Erweiterung, Wien, Graz, Berlin, 2007, p. 137. 20 In Judgment of the Supreme Court No. Cp 10/2000 of 15 November 2000, the Supreme Court dealt with the recognition of an Ethiopian judgment. The applicant produced the translations of the stamps on the English translation of the judgment and asserted that these stamps proved that the judgment became final. The Court held that the first instance court must establish ex officio whether these allegations were true under Ethiopian law. See also Judgment of the Supreme Court No. 3/2000 of 31 May 2000 on the certificate of finality under German law. 21 Judgment of the Supreme Court No. Cp 24/2018 of 26 July 2018. 22 Contrary to many other legal systems, the Slovenian contentious procedure does not provide for a possibility of a temporary enforceability, before the judgment acquires the res judicata effect. 23 Hague Convention of 5 October 1961 abolishing the requirement of legalisation for foreign public documents. 24 Zakon o overitvi listin v mednarodnem prometu (ZOLMP-1), OG RS No. 9/17. 19

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Recognition and Enforcement of Foreign Judgments in Slovenia The Court concluded: “A notary act is neither a judgment, nor a settlement, nor a decision of another authority. Even though it is directly enforceable, it is still a private document and not an act issued in proceedings before a state authority. To be sure, there are several points in common with the court settlement: they both confirm the existence of a claim, they can both be annulled in cases of vitiated consent, and the object of a notary act can only be an obligation which can also be the object of a settlement. However – and this is decisive – notary acts do not acquire a res judicata effect.”25 The recognition and enforcement of arbitral awards is regulated by the Arbitration Act of 2008,26 which in this field largely points to application of the New York Convention of 1958.27 D.

The Recognition of Foreign Judgments in Slovenian National Law

Judgments issued in civil proceedings can be of condemnatory nature – in which case they often need to be enforced – or else of declaratory or constitutive nature. The latter two only need recognition in other states to produce effects there. Included in the category of judgments which only require recognition are those rejecting the plaintiff’s claim28 – which are in fact declaratory judgments.29 Despite this fundamental difference, under Slovenian national law, all foreign judgments must first be recognised, at least incidentally. Namely, under an explicit legislative provision of Article 94/1 of the PILPA, a foreign judgment cannot produce effects in Slovenia without having first been subject to judicial control. In Slovenian national law, the recognition of a foreign judgment can be obtained in a special procedure or incidentally. Contrary to some EU regulations, it is not possible to seek a declaration to the effect that recognition is not possible. 1.

The Procedure for Recognition as the Main Object of Proceedings

Every time that the applicant seeks erga omnes effects, that is, the res judicata effect of the foreign judgment in the Slovenian territory, a special procedure called the delibation procedure30 (a procedure for recognition) has to be initiated, Judgment of the Supreme Court No. Cp 18/2011 of 9 February 2012. Zakon o arbitraži, OG RS No. 45/08. 27 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 (ratified in Slovenia by Zakon o ratifikaciji konvencije o priznavanju in izvrševanju tujih arbitražnih odločb (OG of Yugoslavia, MP No. 11/81)). 28 J. JUHART, Civilno procesno pravo FLRJ, Univerzitetna založba Ljubljana 1961, p. 601. 29 Ibid., p. 290. 30 The origin of this term may be found in the Italian Code of Civil Procedure [Codice di procedura civile] of 1865. The term was not preserved in the current Italian code of 1942, but it is still used in practice. T. BALLARINO/ A. BONOMI, The Italian Statute on Private International Law, this Yearbook, Vol. II, 2000, p. 128. 25 26

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Jerca Kramberger Škerl regardless of whether the nature of the judgment is such that it needs enforcement or not. The principal object of this special procedure is therefore the recognition of a foreign judgment, which will “render such judgment equal to a Slovenian judgment” (Article 94/1 of the PILPA). Neither the Yugoslav law of 1982 nor the Slovenian PILPA clearly determines the contentious or non-contentious character of the proceedings for recognition of foreign judgments. However, despite the procedure involving two parties with possibly opposing interests, as is characteristic of a contentious procedure, academic doctrine is unanimous as to the non-contentious nature of the proceedings, since such procedure grants more liberty and flexibility, which is important in the context of recognition proceedings.31 In line with these opinions, the PILPA prescribes the subsidiary application of the Non-Contentious Civil Procedure Act (NCCPA)32 (Article 111 of the PILPA). If the NCCPA does not contain relevant provisions, the Civil Procedure Act (CPA)33 is applicable (Article 37 of the NCCPA). Jurisdiction for recognition proceedings lies with a sole judge of a district court (Sl. okrožno sodišče) (Article 108/3 of the PILPA). Every district court is territorially competent to hear recognition proceedings (Article 108/4 of the PILPA), without regard to any connecting factors such as the domicile of the defendant. a)

The Application for Recognition and Appeals

Upon application for recognition, the district court will first verify whether the formal requirements are satisfied. The applicant must produce the original judgment (or its certified copy) and proof of the finality of the judgment in the state of origin (Article 95/1 of the PILPA). The applicant must also produce a translation of the foreign judgment if the judgment “is not drafted in a language which is in official use at the court” (Article 95/2 of the PILPA). The languages in official use in Slovenian courts are: Slovenian throughout the whole state territory, as well as Italian and Hungarian in territories where Italian and Hungarian minorities are present.34 There is no need for the applicant to be represented by an attorney – in Slovenia, such obligation only exists in proceedings with extraordinary legal remedies (Article 86/3 of the CPA). If, however, the applicant chooses to be represented, their representative can only be an attorney or a person who has passed the Slovenian bar exam (Article 87/3 of the CPA). In the absence of a prevailing EU 31 T. VARADI/ B. BORDAŠ/ G. KNEŽEVIĆ/ V. PAVIĆ, Međunarodno privatno pravo, 8th ed., Službeni glasnik, Belgrade 2007, p. 564. It has to be emphasised that such tradition has only existed since 1982. Before the adoption of the Yugoslav PILPA, the procedure for the recognition of foreign judgments was a special contentious procedure. 32 Zakon o nepravdnem postopku (ZNP-1), OG RS No. 16/19. 33 Zakon o pravdnem postopku, OG RS No. 26/99, with further amendments. 34 Art. 5 of the Courts Act [Zakon o sodiščih], OG RS No. 19/94 of 13 April 1994, with further amendments.

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Recognition and Enforcement of Foreign Judgments in Slovenia or international rule, an applicant who is domiciled in a foreign country must appoint a person authorised to take up court service on their behalf in Slovenia, or else the court will, should the applicant still fail to do so after a special court order to that effect, reject the application as inadmissible (Article 146 of the CPA). The applicant can apply for legal aid under the Slovenian Legal Aid Act.35 The procedure relating to the application (Sl. predlog) for recognition (Article 108 of the PILPA) is unilateral (ex parte), i.e. the application is not served on the defendant. When the court is satisfied that all formal requirements are fulfilled, it will proceed to verify whether one or more grounds exist for refusal, which the court examines proprio motu (namely, it examines whether the Slovenian courts have exclusive jurisdiction, whether the recognition contravenes Slovenian public policy, and the existence of res judicata). If the court grants recognition, such decision is served on the defendant, who can lodge an opposition (Sl. ugovor) (Article 109/3 of the PILPA) and invoke other grounds for refusal (which will be listed below). The same first instance court will decide on such opposition, but in a panel of three judges (so that the adversarial nature of the first instance proceedings is ensured ex post).36 It must be emphasised that, contrary to the system under the Brussels I Regulation of 2000, such opposition can only be lodged by the defendant; in case of refusal of the application for recognition, the applicant can only directly appeal to the Supreme Court. An appeal (Sl. pritožba) can be filed by any of the parties (depending on the result of the first instance proceedings) with the Supreme Court (Sl. Vrhovno sodišče). Interestingly, appellate courts are thus excluded from the control of foreign judgments, probably to ensure a more unified case-law without offering too many legal remedies. The appeal to the Supreme Court is considered a suspensive legal remedy, which means that it is not possible to apply for enforcement of the foreign judgment until a final decision is reached.37 In such appeal, the parties can invoke the erroneous application of substantive law, procedural errors, as well as the incorrect or incomplete establishment of facts (Article 338/1 of the CPA). This system resembles the one present under the initial version of the Brussels I Regulation and under the Brussels II bis Regulation.38 An important difference, however, lies in the fact that, in the proceedings under the PILPA, the Slovenian judge must verify as early as the first stage whether one of the grounds Zakon o brezplačni pravni pomoči, OG RS No. 48/01 of 13 June 2001, with further amendments. Article 10 provides that foreign citizens and stateless persons can be entitled to legal aid if they lawfully reside in Slovenia; other foreign citizens can be entitled to legal aid under the condition of reciprocity or according to applicable international treaties. 36 According to the case-law of the Supreme Court, one of the judges in this panel can be the judge who issued the decision on the recognition; e.g. Judgment of the Supreme Court No. Cp 2/2016 of 7 April 2016. 37 Under Art. 35 of the NCCPA, the court can exceptionally determine that a judgment is enforceable despite the fact that an appeal has been lodged. 38 Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, OJ L 338 of 23 December 2003. 35

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Jerca Kramberger Škerl exists for refusal of recognition that the court controls proprio motu. Under the mentioned EU regulations, the judge only exercises such control if an appeal is lodged by the defendant. The PILPA does not contain any provisions regarding extraordinary legal remedies, therefore the provisions of the NCCPA must be consulted. The latter provides for the possibility of revision (Sl. revizija) in non-contentious proceedings, under the same conditions as in contentious ones.39 Reopening of the proceedings (Sl. obnova postopka) and a request for the protection of legality (Sl. zahteva za varstvo zakonitosti) are also possible. In case of violations of human rights committed and not remedied by ordinary courts, the parties can also seize the Constitutional Court (Sl. Ustavno sodišče) via a legal remedy called a constitutional complaint.40 It must also be mentioned that a judgment can be recognised (or enforced) only partially. This conclusion is reached by a subsidiary application of the CPA (the rule on a “partial judgment”) (Article 314 of the CPA). This can happen on the initiative of the applicant or on the initiative of the judge if only a part of the judgment satisfies the conditions of recognition (or enforcement).41 However, the judge must ensure that the judgment is indeed divisible, i.e. that the parts of the judgment which could be recognised, maintain their original meaning even without the other parts of the judgment.42 According to the NCCPA, it is not necessary for the applicant to define whether the recognition of the judgment as a whole is requested, or only of a part of the judgment. Should the applicant give no further specification, it will be presumed that the applicant is requesting recognition of the judgment as a whole and against all persons concerned by the judgment.43 b)

Parties to the Procedure for Recognition

The parties in the procedure of recognition and enforcement of a foreign judgment are, in principle, the same as in the procedure of origin of the judgment.44 Parties can also be substituted by their legal successors, e.g. the heirs, the assignee etc.45

39 I.e. if the Supreme Court deems that an important legal question must be resolved (Article 37 of the NCCPA in connection with Article 367a of the CPA). 40 In Slovenian law, an individual can lodge a constitutional complaint regarding a specific judicial procedure: Article 50 and the following of the Constitutional Court Act [Zakon o ustavnem sodišču], OG RS No. 15/94, with further amendments. 41 H. ROTH, in F. STEIN/ M. JONAS, Kommentar zur Zivilprozessordnung, Mohr Siebeck, Tübingen 1998, p. 409; M. PAŠEK, Priznanje in izvršitev tujih sodnih odločb, Master Thesis, Faculty of Law, University of Ljubljana, July 2005, p. 62. 42 Ibid. Also see H. BATIFFOL/ P. LAGARDE, Droit international privé, 7th ed., L.G.D.J., 1983, p. 591. 43 A. GALIČ, (note 19), p. 122. 44 T. VARADI/ B. BORDAŠ/ G. KNEŽEVIĆ/ V. PAVIĆ, (note 31), p. 564. See e.g. Judgment of the Supreme Court No. Cp 3/2016 of 10 November 2016. 45 T. VARADI/ B/ BORDAŠ/ G. KNEŽEVIĆ/ V. PAVIĆ, (note 31), p. 564-565.

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Recognition and Enforcement of Foreign Judgments in Slovenia The applicant must, as in all civil proceedings, have a legal interest in judicial protection.46 The Supreme Court refused the application for recognition of an Austrian judgment, since it was lodged more than ten years after that judgment became final; under Slovenian law, the statute of limitations for the enforcement of claims resulting from final judgments is namely ten years from the finality of the judgment (Article 356/1 of the Slovenian Code of Obligations47). The court thus held that since enforcement would not be possible, there was no legal interest in the recognition of the judgment.48 This author deems that the question of the statute of limitations should not have been taken into account regarding the admissibility of the request for recognition. The expiring of the statute of limitations namely results in the impossibility of the claimant to request enforcement49 and does not preclude the recognition of the foreign judgment stating the existence of such claim. The PILPA explicitly provides that the applicant in the procedure for recognition of a judgment on personal status can be anyone with a legal interest, i.e. the request must not necessarily be lodged by the initial parties in the proceedings or their legal successors (Article 108/2 of the PILPA). It is the opinion of this author that the intervention (or participation, as this situation is called in non-contentious proceedings) of a third party having a legal interest should be possible (Article 19 of the NCCPA), however, there would appear to be no doctrine or case-law on this question yet. c)

Costs of the Recognition Proceedings

Under the PILPA, the distribution of the costs of the proceedings – mainly the court fees, the (possible) attorney fees and the translation costs50 – is determined 46 Judgment of the Supreme Court No. Cp 10/2003 of 10 July 2003, where the Court established that the applicant intended to use the foreign judgment as evidence in civil proceedings and thus did not have a legal interest in the recognition of such judgment. 47 Obligacijski zakonik, OG RS No. 83/01, with further amendments. See also V. KRANJC, in N. PLAVŠAK et al., Obligacijski zakonik s komentarjem, 2nd Book, GV Založba, 2003, p. 490. 48 Judgment of the Supreme Court No. Cp 6/2004 of 10 November 2004. The court did not address the question of the law applicable to the statute of limitations regarding claims arising from a foreign judgment. It would namely make a difference if Austrian law was applicable, since it provides that a claim is time-barred only 30 years after the judgment becomes enforceable (Art. 1478 and 1479 of the Austrian ABGB, see e.g. judgment of the Austrian Supreme Court, No. GZ 1 Ob 142/16p of 23 November 2016). Since the statute of limitations is, under Slovenian and Austrian law, as well as under Art. 12 of the Rome I Regulation, a question of substantive and not procedural law, the court, it appears, should have examined the possibility of the application of foreign law. 49 M. JUHART in N. PLAVŠAK, M. JUHART, R. VRENČUR, Obligacijsko pravo, Splošni del, GV Založba, 2009, p. 1048. 50 Art. 151 of the CPA provides: “Procedural costs are expenses which occur during the proceedings or result from the proceedings. Procedural costs are also the fees of the attorneys and other persons who are entitled to a fee under the law.”

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Jerca Kramberger Škerl under the procedural rules which would be applicable if the Slovenian court decided on the dispute at origin of the foreign judgment (Article 110 of the PILPA). If such case was an “ordinary” contentious matter (e.g. proceedings for the recognition of a foreign judgment issued in a dispute over the payment of the purchase money for a car), the provisions of the CPA shall apply.51 Those provide that the loser pay all the necessary costs, with the exception of liability for costs caused by fault – the latter are to be paid by the party who was at fault (Articles 154 and following of the CPA). If it was a non-contentious matter, the parties must, in principle, each cover their own costs, but the court has the discretion to decide otherwise (Article 40 of the NCCPA). Under the Court Fees Act,52 the court fee payable for application for recognition is 16 euros, the same as for the opposition, whereas the fee for the appeal to the Supreme Court is 33 euros. Parties and their attorneys are, in principle, free to determine the latter’s remuneration, however, when the court determines reimbursement of costs, it will do so by consulting the Attorneys’ Tariff.53 2.

Incidental Recognition

Recognition can also be decided upon within other judicial proceedings where it appears as a preliminary question (incidental recognition). In this case, every court deciding on the principal object of the proceedings has jurisdiction to decide on recognition (Article 108/6 of the PILPA). Such recognition will, however, only be effective in that specific proceedings. Therefore, any party wishing to invoke the same foreign judgment in other proceedings will be required to initiate either stand-alone or new incidental proceedings. Where the recognition is made as an incidental question, the legal remedies shall be those available against the judgment regarding the principal object of the proceedings. A subsequent decision on recognition in the delibation proceedings which diverges from the incidental recognition is not, under Slovenian case-law, a justified ground for reopening the proceedings where the question of recognition was decided incidentally.54 Contrary to EU regulations, such as the Brussels I Regulation of 2000 or the Brussels II bis regulation, incidental recognition is also possible within enforceIn a judgment of 2018, the Supreme Court held: “The Slovenian court would decide on the matter from the judgment, the recognition of which is being requested, under the rules of the civil contentious procedure. Under Art. 165/1 in connection with Art. 154/1 of the CPA, the court condemned the appellant who did not succeed with their appeal to reimbourse the costs of the response to the appeal to the opposite party. These costs were calculated according to the list of costs and according to the Attorneys’ Tariff”: Judgment of the Supreme Court No. Cp 3/2018 of 15 February 2018. In a judgment of 2007 the Supreme Court rejected the appeal against the decision on the recognition of a foreign judgment. The Court ruled that the party who responded to the opponent’s appeal, did not contribute, by this response, to the decision of the appellate court, so this party must bear the costs of this response: Judgment of the Supreme Court No. Cp 19/2006 of 28 June 2007. 52 Zakon o sodnih taksah, OG RS No. 37/08, with further amendments. 53 Odvetniška tarifa, OG RS Nos. 2/15 and 28/18. 54 Judgment of the Supreme Court No. II Ips 678/2009 of 5 November 2009. 51

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Recognition and Enforcement of Foreign Judgments in Slovenia ment proceedings. This can be practical when the creditor party to the foreign judgment seeks the enforcement of the judgment, but does not necessarily need the judgment to have res judicata effect in Slovenia, and thus is not interested in initiating delibation proceedings.55 This solution has, however, been subject to criticism from academic doctrine for harming the system, more precisely, taking into account the structure of enforcement proceedings conducted by local courts, which is considered unsuitable for deciding the often complex questions of the interpretation of the grounds for refusal of recognition, as well as the wish for unified caselaw in this field which can be better achieved in separate proceedings before the district courts.56 Under Articles 206 and 208 of the CPA, the court shall stay the proceedings if it decides to wait for the decision of the court which holds jurisdiction as to the preliminary issue at hand (i.e. if such proceedings are already pending). The proceedings are resumed when the decision of that court is final. The question arises as to whether the court may stay the proceedings where the recognition is a preliminary issue and refer the party to start the special delibation proceedings. One decision of the Appellate Court of Ljubljana confirms this option.57 In 2017, the same Court quashed a first instance judgment refusing to take into consideration a foreign judgment on the preliminary question, since it had not yet been recognised in Slovenia. The Appellate Court held that the first instance court should have decided on the recognition of such judgment incidentally: an explicit request for incidental recognition is not necessary, it suffices that the party invokes the foreign judgment.58 3.

Foreign Judgment as Evidence in Civil Proceedings

Sometimes, a party invokes a foreign judgment as evidence in civil proceedings, i.e. as proof of an adduced fact and not in order for such judgment to produce binding effects in Slovenia. In a 2017 judgment, the Appellate Court of Ljubljana deemed that whereas a foreign criminal judgment cannot be recognised in Slovenia (in separate proceedings or incidentally), it can be produced as evidence of a rele-

Judgment of the Supreme Court No. III Ips 64/2001 of 22 November 2001; M. ILEŠIČ/ A. POLAJNAR-PAVČNIK/ D. WEDAM-LUKIĆ, Mednarodno zasebno pravo, Komentar zakona, Uradni list, Ljubljana 1992, p. 151. 56 A. GALIČ, (note 19), p. 151. 57 Judgment of the Appellate Court of Ljubljana No. III Cp 798/97 of 19 November 1997. A. GALIČ, Postopek priznanja in razglasitve izvršljivosti tujih sodnih odločb po uredbi št. 44/2001 (“Bruseljski uredbi”), Zbornik znanstvenih razprav, Faculty of Law in Ljubljana 2006, p. 81. 58 Judgment of the Appellate Court of Ljubljana No. I Cpg 743/2017 of 27 September 2017. In 2012, the same Court (wrongly) stated that the applicant who directly initiated enforcement proceedings on the basis of a Croatian court settlement, should have requested that the enforcement court incidentally recognise such settlement, or else the refusal of the authorisation of the enforcement was justified. Judgment of the Appellate Court of Ljubljana No. I Ip 2238/2012 of 19 September 2012. 55

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Jerca Kramberger Škerl vant fact in civil proceedings.59 In another case, the Supreme Court held: “The applicant plans to use the foreign judgment as evidence that, in a presumably identical dispute between the parties, the opposite party was inactive in the proceedings, therefore their claim was considered withdrawn. It is therefore evident that the applicant needs the foreign judgment as evidence, which is not the aim of the proceedings for recognition and enforcement of foreign judgments.”60 4.

Grounds for Refusal of Recognition of Foreign Judgments

To begin with, it is interesting to mention that the PILPA speaks of “the obstacles to the recognition and enforcement of foreign judgments”. According to a literal interpretation, foreign judgments are thus presumed to be capable of recognition, or else the grounds for refusal must be proven. It must, however, be stressed that several grounds for refusal, for example, the contradiction of the recognition to Slovenian public policy and the absence of exclusive jurisdiction of Slovenian courts, must be verified by the court proprio motu. In Slovenian private international law, the court exercises limited control (contrôle limité) over foreign judgments. The court verifies proprio motu the existence of several grounds for refusal, while it reviews others only in response to an objection made by the opposing party. Under Article 102 of the PILPA, a foreign judgment concerning the personal status of a citizen of the state of origin of the judgment is recognised in Slovenia without review with regard to issues of exclusive jurisdiction, public policy, or reciprocity. Under Articles 96 to 101 of the Slovenian PILPA, recognition and enforcement of foreign judgments may be denied on the following grounds. a)

Violation of the Right to Be Heard

Relevant Slovenian academic doctrine and case-law agree that fundamental procedural provisions constitute procedural public policy, which in turn constitutes part of the public policy protected by the PILPA, although this is not expressly mentioned in the latter.61 Nevertheless, the legislature decided (and we can see a similar situation in the Brussels I Regulation) that the principle of contradiction is regulated separately from the public policy defence, possibly to emphasise its importance and eliminate every possible doubt that its violation could be the reason for the refusal of recognition and enforcement. The PILPA provides, in Article 96, that the recognition of a foreign judgment can be refused if the defendant in the 59 Judgment of the Appellate Court of Ljubljana No. II Cp 2364/2016 of 7 February 2017. In this case, the defendant presented a Croatian criminal judgment, in order to prove that the plaintiff was partly responsible for the traffic accident. The defendant thus actually wanted the Slovenian court to consider the legal solution of the Croatian judgment as binding (which was not possible) and not use such judgment as evidence of facts. 60 Judgment of the Supreme Court No. Cp 10/2003 of 10 July 2003. 61 See e.g. Judgment of the Supreme Court No. Cp 6/2001 of 28 June 2001.

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Recognition and Enforcement of Foreign Judgments in Slovenia procedure of origin did not have the possibility to participate in the procedure because of the irregularities of such procedure, but only if they invoke this in the recognition procedure. The violation of the principle of contradiction is therefore only verified on the initiative of the defendant, whereas other elements of procedural public policy (e.g. the impartiality of the judge) are controlled ex officio under Article 100 of the PILPA. The case-law on Article 96 is abundant. In order for the defendant to succeed, they must not only invoke, but also adduce evidence as to the violation of their right to be heard in the proceedings in the state of origin of the judgment.62 Additionally, the defendant must do so in their opposition against the first instance decision, and not only in the appeal before the Supreme Court.63 For example, a recognition of an Austrian default judgment was refused because the claim was served on the Slovenian defendant in violation of the then applicable rules on cross-border service between those states, and because the writings were served in German, without a translation.64 The PILPA also determines that the violation of the principle of contradiction has to be the consequence of “irregularities in the proceedings”. It is unclear if the legislators meant that the violation of the principle of contradiction had to be the result of a breach of the procedural laws of the state of origin, or that such violation would have been a breach of Slovenian procedural laws. In this author’s opinion, the standard of comparison should be the Slovenian concept of fair procedure, so that even the correct application of the foreign procedural law can lead to the refusal of recognition on the basis of Article 96.65 Such an interpretation would also ensue from the obligations of Slovenia under international instruments, such as Article 6 of the European Convention of Human Rights. Under the Pellegrini case-law of the European Court of Human Rights,66 Slovenia has to verify the conformity of the foreign procedure to such conventional standards, whereby it is irrelevant if the court of origin respected their national law or not. b)

Exclusive Jurisdiction of Slovenian Courts

The second ground for refusal of recognition is that Slovenian courts have exclusive jurisdiction over the subject matter judged by the foreign court (Article 97 of the PILPA). Contrary to a number of other legal systems, it is relatively easy to establish which areas of the law fall under the exclusive jurisdiction of Slovenian Judgment of the Supreme Court No. Cp 3/2016 of 10 November 2016. Judgment of the Supreme Court No. Cp 19/2006 of 28 June 2007. 64 Judgment of the Supreme Court No. Cp 6/2001 of 28 June 2001. 65 In the Judgment of the Supreme Court No. Cp 6/2001 of 28 June 2001, the Supreme Court held that when recognising foreign judgments, Slovenian courts must also respect the level of protection of human rights in Slovenia, of which a big part is contained in the Slovenian Constitution. 66 ECtHR, 20 July 2001, Pellegrini v Italy. In Judgment No. Cp 3/2001of 22 August 2001, the Supreme Court explicitly refers to Art. 6 of the ECHR, when refusing the recognition of a Croatian judgment because of the irregular service of the claim. 62 63

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Jerca Kramberger Škerl courts, since this is expressly stated in the jurisdiction chapter of the PILPA. Article 50 actually prevents any rules on jurisdiction from being interpreted as exclusive other than those for which the PILPA or another Act explicitly determines so. In a case concerning a German judgment on the separation of the common patrimony of spouses, the Supreme Court established that the foreign court was only to decide on the monetary claim and not on the claim ad rem regarding the common immovable property. Since the exclusive jurisdiction of Slovenian courts only exists in respect of rights ad rem in immovable property, the ground for refusal of Article 97 did not exist.67 In another case, the Supreme Court explained that a judgment concerning maintenance between former spouses had to be recognised, since the exclusive jurisdiction of the Slovenian courts only concerns judgments on divorce, and did not extend to judgments on patrimonial consequences of the divorce.68 c)

Exorbitant Jurisdiction of the Court of Origin

The third ground for refusal of recognition is that the court of origin founded its jurisdiction on a rule providing for an exorbitant jurisdiction. Under Article 98 of the PILPA, the jurisdiction is considered exorbitant if it is based exclusively on any of the following three circumstances: (i) the plaintiff’s citizenship; (ii) the defendant’s property in the country where the judgment was rendered; or (iii) personal service of the statement of claim on the defendant in the state of origin. Recognition will also be denied when the court of origin failed to take into account the agreement on jurisdiction of Slovenian courts. In a recent case before Slovenian courts, the word “exclusively” in the above context was one of the points of discussion. In this case, a plaintiff domiciled in Israel filed a law suit in Israel against a defendant domiciled in Slovenia for liability for (very grave) damage as a consequence of an operation performed by the defendant. The Israeli court first based its jurisdiction on the fact that the claim was served on the defendant in Israel. The defendant appealed stating that the court should have applied the forum non conveniens doctrine, since the defendant was domiciled in Slovenia and the operation was performed in Slovenia, and so there was a much closer connection with that state. The Israeli courts confirmed their jurisdiction, stating that there were elements connecting the case with Israel, other than just the service of the claim. Those were e.g. the fact that the plaintiff was severely handicapped and it would be very difficult for him to participate in proceedings in Slovenia (whereas the defendant could more easily participate in proceedings in Israel), that the plaintiff had been medically treated in Israel, that the contact regarding the operation was established in Israel etc. When the Israeli judgment condemning the defendant to pay damages was considered for recognition and enforcement in Slovenia, the question arose as to 67 68

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Recognition and Enforcement of Foreign Judgments in Slovenia whether the fact that the Israeli court, deciding on the application of forum non conveniens, found and stated other connecting factors with that state, even though it was clear that without the service of the claim in Israel the courts of that state could under no circumstances hold jurisdiction, sufficed to reject the appeal on the basis of the exorbitant jurisdiction. The Supreme Court decided that: “it suffices for the refusal of the appeal invoking the exorbitant jurisdiction of the court of origin that such court in the case at hand in deciding its jurisdiction following the appeal invoking the forum non conveniens doctrine, took into account, beside the service of the claim, also other circumstances which can, from the point of view of international law, be autonomous connecting factors for jurisdiction of the courts.”69 This author agrees that recognition must not be refused on the basis of exorbitant jurisdiction if the court of origin could have founded its jurisdiction on another rule providing for a non-exorbitant jurisdiction, independently of the applied rule on exorbitant jurisdiction.70 In our view, it is, however, questionable whether such a result is correct if the court of origin stated other connecting factors which are not independent grounds for jurisdiction in that particular state. d) The Existence of a Final Judgment in the Same Matter and Lis Pendens The fourth ground for refusal is the so-called res judicata exception whereby recognition of a foreign judgment can be denied if a Slovenian court or other authority has issued a legally binding decision on the same matter,71 or if some other foreign decision on the same matter has been recognised in Slovenia (Article 99 of the PILPA). In one case, the Appellate Court of Ljubljana quashed a first instance decision which had rejected a claim stating that a final judgment on the same matter existed; that judgment was namely a German judgment which had not yet been recognised in Slovenia and thus could not be considered as res judicata.72 This decision is, however, erroneous, since the court overlooked Article 108/6 of the PILPA, according to which any court may rule on such recognition as a preliminary issue if no special ruling has been issued regarding the recognition of a foreign judgment. In 2017, the same court confirmed the incidental recognition of a foreign judgment regarding the original parties to the proceedings, but refused the

69 Judgment of the Supreme Court No. II Ips 352/2013 of 9 April 2014. This judgment was quashed by the Constitutional Court (Decision No. Up-645/13 of 3 March 2016) which stated that the regular court should further explain their interpretation of Art. 98 regarding the exorbitant jurisdiction. The Supreme Court later repeated and confirmed the mentioned reasoning: Judgment of the Supreme Court No. Cp 18/2017 of 5 March 2018. 70 In Judgment of the Supreme Court No. Cp 2/2005, the Supreme Court established that the jurisdiction of the German court was not exclusively based on the location of the assets of the defendant in Germany, since the defendant also had her domicile in that country. The ground for refusal of Art. 98 of the PILPA thus did not exist. 71 Judgment of the Appellate Court of Ljubljana No. I Cp 1804/2017 of 17 January 2018. 72 Judgment of the Supreme Court No. Cp 674/2000 of 21 June 2000.

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Jerca Kramberger Škerl effects of such judgment regarding the claim against guarantors who are not the legal successors of the main debtors.73 Even though the Act only mentions “the same matter” and does not explicitly refer to “the same parties”, it is this author’s view that this provision only “covers” such judgments, which is a stricter standard than “irreconcilable judgments” in the EU regulations. To this author’s knowledge, this problem has not yet been brought up in case-law, but it appears that recognition of irreconcilable judgments that do not fall under the scope of Article 99 could be refused under the public policy exception. Article 99/2 of the PILPA provides that the court will suspend recognition proceedings if proceedings on the same matter and between the same parties are pending in Slovenia, provided that the claim in the Slovenian proceedings was served on the defendant earlier than the claim in foreign proceedings (in Slovenian law, the defining moment for lis pendens is the service of the claim on the defendant and not the filing of the claim, per Article 189/1 of the CPA). A subsequent Slovenian judgment on the merits will then prevail over the previous foreign one.74 If, however, the proceedings in Slovenia should end with no decision on the merits (e.g. because of the inadmissibility of the action), the recognition proceedings will continue. e)

The Public Policy Defence

The fifth ground for refusal is the violation of Slovenian public policy (ordre public) (Article 100 of the PILPA). The courts verify this ground for refusal proprio motu. Public policy covers substantive and procedural fundamental rights and values. In this author’s opinion, fraud could also be sanctioned via the public policy exception, as might irreconcilable judgments which cannot be sanctioned under Article 99 of the PILPA. Even though under the PILPA public policy is a national category, it also contains fundamental values and rights from international legal sources, especially the European Convention of Human Rights and the EU law.75 The public policy defence is invoked relatively often by defendants, but is very rarely successful since the courts stick to the strict interpretation of this notion, especially with regard to so-called substantive public policy. An important example of such case-law is a Supreme Court judgment of 2010 recognising a US judgment on adoption by a same-sex couple.76 In this case the adoptive parents sought recognition in Slovenia of an adoption pronounced by a US court. The district court decided that even if an adoption by a same-sex couple would not Judgment of the Appellate Court of Ljubljana No. I Cpg 743/2017 of 27 September 2017. 74 Judgments of the Appellate Court of Ljubljana No. I Cp 2168/2017 of 20 December 2017 and No. IV Cp 1971/2018 of 17 October 2018. 75 J. KRAMBERGER ŠKERL, European public policy (with an emphasis on exequatur proceedings), Journal of private international law, Dec. 2011, Vol. 7, No. 3, p 461-490. 76 Judgment of the Supreme Court No. II Ips 462/2009 of 28 January 2010. 73

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Recognition and Enforcement of Foreign Judgments in Slovenia have been possible in Slovenia at the time of the recognition proceedings, the US judgment had to be recognised, since such solution was not contrary to the Slovenian public policy (the doctrine of ordre public atténué). The State Attorney then filed a request for the protection of legality at the Supreme Court stating that such a decision was in breach of the law. The Supreme Court, however, confirmed that recognition was possible and thoroughly explained its (restrictive) vision of the public policy defence, stating in particular that public policy in private international law does not include all mandatory provisions of the national law, but only the most vital ones.77 On the same theme of substantive public policy, the Supreme Court has held, on several occasions, that determination of an amount of maintenance as a percentage of the parent’s salary is not contrary to Slovenian public policy, although such amount is calculated under different criteria in Slovenian law.78 In Slovenian case-law, procedural public policy mainly concerns the right to be heard, regulated under Article 96 of the PILPA, already discussed above. Regarding other elements of the right to a fair trial, only one Supreme Court judgment was found in which recognition was refused due to violation of the right of the defendant to use their own language in the proceedings (which is a fundamental right under Article 62 of the Slovenian Constitution).79 Arguably, such violation could also be dealt with under Article 96, but the Court chose to address it under Article 100. f)

The Lack of Reciprocity between the State of Origin and Slovenia

Lastly, as the sixth ground for refusal, the PILPA determines the lack of reciprocity between the state of origin of the judgment and Slovenia (Article 101). Reciprocity is presumed and the defendant must adduce evidence as to the contrary or at least request that the court seek further information from the Slovenian Ministry of Justice.80 The lack of reciprocity is not an obstacle to recognising a foreign judgment in matrimonial matters or regarding paternity and maternity claims, as well as in cases where the recognition or enforcement is being sought by a Slovenian citizen. The condition of reciprocity seems quite strict on a first glance, but it is actually only applicable in very few cases. Namely, only reciprocity in fact is required, i.e. it is not necessary for the foreign state to have made any official statement regarding their recognition of Slovenian judgments. It is, however, unclear how exactly the presumption of such reciprocity in fact could be rebutted, since a systematic refusal of Slovenian judgments in a foreign country should The translation of this judgment into English can be found on the Internet site of the Supreme Court available at (accessed on 1 March 2019). 78 Judgments of the Supreme Court No. Cp 6/2000 of 22 June 2000 and No. Cp 19/2003 of 25 March 2004. 79 Judgment of the Supreme Court No. Cp 11/2001 of 8 November 2001. 80 Judgment of the Supreme Court No. Cp 18/2017 of 5 March 2018. 77

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Jerca Kramberger Škerl probably be proven. A historical example of such rebuttal, applicable before the entry of Slovenia into the EU, was Article 79 of the Austrian Enforcement Act (Exekutionsordnung), which precluded the enforcement of foreign judgments if there was no bilateral or international treaty between the two states.81 Since there was no general bilateral treaty in civil and commercial matters (but only several treaties in specific matters, such as maintenance and successions), Slovenian courts considered that there was no reciprocity (outside the mentioned treaties) with that state and rejected the recognition of Austrian judgments if the defendants invoked the lack of reciprocity.82 The Supreme Court ruled that the reciprocity had to exist at the time of the recognition in Slovenia and not necessarily at the time of the issuing of the judgment in the state of origin.83 In the above-mentioned proceedings for the recognition of an Israeli judgment, the Supreme Court established that the non-existence of reciprocity84 was invoked too late in the proceedings to be taken into consideration, but nevertheless stated that: “for the existence of reciprocity it is not necessary that the foreign state provides for exactly the same prerequisites and procedure for recognition of foreign judgments, since that would mean that reciprocity almost never exists. It must only be assessed whether, in principle, the chances for the recognition of foreign judgments in that country are notably lower because of a different legal regulation. […] The appellate court is […] of the opinion that the establishment of the actual substantive reciprocity must be flexible, since it is in the interest of the states that mutual trust and legal certainty of the citizens are enhanced. The refusing of the recognition because of the lack of reciprocity must therefore be restrictive. The victims of the opposite approach are parties who wish to protect their rights. By enabling the enforcement of a foreign judgment the parties are guaranteed the effective protection of their rights, also of the right to a fair trial from Article 6 of the European Convention of Human Rights.”85 81 Art. 79/2 of the EO on 30 April 2004, i.e. before the entry of Slovenia into the EU, provided: “Acts and documents shall be declared enforceable if they are enforceable under the rules of the State in which they are constituted and reciprocity is guaranteed by treaties or regulations”. 82 Judgment of the Supreme Court No. Cp 16/2003 of 8 April 2004. But even at that time, Slovenian courts rarely refused recognition of Austrian judgments on the grounds of lack of reciprocity, probably because defendants did not invoke it (see e.g. Judgment of the Supreme Court No. Cp 6/2001 of 28 June 2001, by which the recognition of an Austrian default judgment was refused based on the violation of the right to be heard, without any mentioning of the reciprocity). 83 Judgments of the Supreme Court Nos. Cp 3/2015 of 12 March 2015, Cp 5/2014 of 28 August 2014, Cp 8/2007 of 7 June 2007, and Cp 5/2004 of 27 May 2004. In Judgment of the Supreme Court No. Cp 15/2015 of 22 October 2015, the Supreme Court dealt with the recognition of an Austrian judgment issued in 2003; the court correctly applied the PILPA and stated that at the time of the proceedings for recognition the reciprocity between the states existed since the Brussels I (Recast) Regulation was applicable in both of them. 84 The defendant invoked the so called Spiegelbild principle: for a thorough study of this case and the application of the mentioned principle, see A. GALIČ, Zdravniške ali pravniške napake?, Pravna praksa, 14 November 2013, Year 32, No. 44, p. 6-9. 85 Judgment of the Supreme Court No. Cp 18/2017 of 5 March 2018.

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E.

The Enforcement of Foreign Judgments in Slovenian National Law

1.

The Absence of Exequatur in Slovenian Law

Slovenian national law does not provide for a declaration of enforceability (exequatur) of foreign judgments as we know it from other legal systems and several EU regulations. The law speaks of recognition and enforcement86 of a foreign judgment and not of a declaration of enforceability of a foreign judgment. The declaration of enforceability exists for Slovenian judgments, but it is only a formality which will be completed by the court registrar when counting 15 days from the day when the judgment became final (Article 42 of the Claim Enforcement and Security Act, CESA).87 The “authorisation of enforcement” as the first phase of the enforcement proceedings under Slovenian law must not be confused with the declaration of enforceability as a prerequisite for starting the enforcement for domestic judgments and under several EU Regulations. The authorisation of enforcement namely precedes the “actual” enforcement and it is the procedural stage where the enforcement judge has fairly broad powers of examining if an enforceable judgment can actually be enforced (Art. 44 of the CESA).88 At that moment, the debtor can typically object that they have paid the debt from the enforceable judgment after that judgment became final, that the debt was transferred to a third party etc. (Art. 55 of the CESA). These arguments do not contest the enforceability of the judgment, but are intended to prevent the actual enforcement (i.e. the second stage of the enforcement proceedings)89 of the judgment. It is only after the authorisation of the enforcement that the judge or the bailiff will be able to proceed to the actual enforcement. Galič explains that, under the PILPA, the Slovenian court “recognizes the foreign declaration of enforceability”, as opposed to the declaration of enforceability of the foreign judgment.90 The grounds for refusal of recognition can only be invoked in the recognition proceedings, whereas the grounds for refusal of the authorisation of enforcement under the CESA can only be invoked in the enforcement proceedings.91 It is interesting to mention that the Slovenian language uses different words for the “actual” enforcement of domestic or foreign judgments (Sl. izvršba) and for the enforcement of foreign judgments in the sense of verifications before the actual enforcement (Sl. izvršitev). Neither of those terms, however, means declaration of enforceability. 87 Zakon o izvršbi in zavarovanju, OG RS No. 51/98, with further amendments. 88 This phase is similar to the Austrian “Exekutionsbewilligung”. 89 This second phase of the enforcement proceedings is similar to the Austrian “Exekutionsvollzug”. 90 A. GALIČ, Postopek priznanja in razglasitve izvršljivosti tujih sodnih odločb po uredbi št. 44/2001 (“Bruseljski uredbi”), Zbornik znanstvenih razprav, Faculty of Law in Ljubljana 2006, p. 84. 91 Judgment of the Supreme Court No. Cp 15/2017 of 11 January 2018, where the court explains that the proceedings for recognition of a foreign judgment are separate from enforcement proceedings, thus, oppositions concerning the enforcement cannot be decided 86

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2.

The Enforcement of a Recognised Foreign Judgment

Even if the foreign judgment is of a condemnatory nature, the creditor might be interested in first initiating recognition proceedings, for example in a case where the creditor begins by requesting partial enforcement of the foreign judgment, or when he or she wishes to invoke the same judgment in other official proceedings. Given the prevalence of condemnatory judgments, one would nevertheless expect in most cases for recognition to occur incidentally, but, interestingly, practice shows otherwise: most creditors first initiate recognition proceedings, even though they only wish to obtain enforcement in Slovenia and have no use for the judgment beyond this. A foreign judgment, recognised in the stand-alone delibation procedure, represents an enforceable title equal to a Slovenian judgment. The creditor must thus apply for enforcement before the competent enforcement court. The jurisdiction for enforcement lies with the local court (Sl. okrajno sodišče) within the area where the enforcement is to be carried out. This court will not re-verify the existence of the grounds for refusal which had already been verified in the recognition proceedings, since the foreign judgment already obtained its binding force within the Slovenian territory and its regularity can no longer be questioned. The creditor will nevertheless have to provide proof of one additional fact: that the judgment is enforceable in the country of its origin (Art. 103/2 of the PILPA). More precisely, even though the PILPA determines that a foreign judgment recognised in Slovenia has the same effects as domestic judgments, no judgment can produce more effects in Slovenia than in the country of its origin. The enforcement court will then proceed to enforcement, as if it were a Slovenian judgment, under the CESA.92 3.

The Enforcement of a Foreign Judgment which Has Not Yet Been Recognised

The second way for the creditor to obtain enforcement of the foreign judgment is to directly initiate enforcement proceedings, in which the regularity of the judgment will be examined incidentally, as a preliminary question. This is naturally only possible if the recognition was not yet refused in the delibation procedure because of the existence of one of the grounds for refusal – such a decision is binding on all courts.93 The creditor will choose this option if it is not important for him in the recognition proceedings, but only in the subsequent enforcement proceedings. In Judgment of the Supreme Court No. Cp 2/2004 of 8 April 2004, the Supreme Court explained that the defendant's argument that they no longer produce the product they were ordered to deliver under the foreign judgment was irrelevant in the recognition proceedings. 92 I.e. first with the authorisation of enforcement and then with the actual enforcement. 93 However, if recognition were refused due to a lack of formal prerequisites, such as the translation of the foreign judgment, this is not an obstacle to new recognition

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Recognition and Enforcement of Foreign Judgments in Slovenia or her whether or not the judgment will have binding effect on the Slovenian territory and he or she is therefore not interested in initiating stand-alone recognition proceedings.94 The enforcing judge will first verify whether any grounds for refusal of recognition of the judgment exist (as in the procedure for recognition, i.e. the judge will also assess the finality of the foreign judgment) and whether the judgment is enforceable in the country of origin. Then, the judge will proceed to enforcement under the CESA. Any decision on the recognition of the judgment which is made in the incidental procedure will only produce effects in these proceedings and will not obtain binding force outside of these proceedings, as was already explained. Although the option of incidental recognition in enforcement proceedings seems quite practical, it has already been mentioned that, as a rule, creditors first initiate the delibation procedure for recognition and then proceed to enforcement proceedings. Academic doctrine is supportive of such action because it is generally critical of the idea of incidental recognition in enforcement proceedings, as was mentioned earlier when dealing with incidental recognition.

III. Recognition and Enforcement of Judgments in Slovenia under the Brussels I (Recast) and Other EU Regulations EU regulations are applicable to the recognition and enforcement of judgments from other Member States within the scope of their application. The most broadly applicable is the Brussels I Regulation in its old and current versions. This contribution will deal with their application in Slovenia and the interplay between the provisions of these regulations and Slovenian national law. The recast Brussels I Regulation, in particular, leaves many questions to be determined by national legislation, arguably even more than the old version of the Regulation. This contribution will not delve into more general questions on the interpretation and application of these regulations, but will stick to explaining their application in Slovenia. A.

The Temporal Scope of Application of the Brussels I (Recast) Regulation in Slovenia

Both the Brussels I Regulation of 2000 and Brussels I (Recast) Regulation of 2012 contain transitional provisions, which define their temporal scope of application. Under Article 66 of the recast Regulation, this Regulation is only applicable to

proceedings or to incidental recognition: see e.g. Judgments of the Supreme Court No. 4/2008 of 17 April 2008 and No. Cp 7/2003 of 30 October 2003. 94 Judgment of the Supreme Court No. III Ips 64/2001 of 22 November 2001; M. ILEŠIČ/ A. POLAJNAR-PAVČNIK/ D. WEDAM-LUKIĆ, Mednarodno zasebno pravo, Komentar zakona, Uradni list, Ljubljana 1992, p. 151.

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Jerca Kramberger Škerl judgments issued in proceedings started95 on 10 January 2015 or later. For judgments issued in proceedings which began before that date, the previous version of the regulation applies. However, pursuant to Article 66 of the old Regulation of 2000 and the decision of the Court of Justice of the EU (CJEU) in Wolf Naturprodukte,96 its rules only apply if the proceedings started after the entry into force of the Regulation both in the state of origin of the judgment and in the state where its enforcement is sought. Thus, only judgments issued in proceedings started after 1 May 2004, the date of the entry of Slovenia into the EU, can be recognised and enforced under the Brussels I Regulation of 2000. The judgments from Romania, Bulgaria and Croatia, which joined the EU later than Slovenia, can be dealt with under that regulation only if the proceedings were started after the entry into the EU of each respective state. The transitional provision of the Brussels I Regulation of 2000 (but not the one of the recast version) has a second paragraph, which importantly broadens its temporal scope of application. Under the rule of this paragraph, judgments from other Member States, issued after the entry into force in both “involved” states, but in proceedings started before that date, can exceptionally be recognised and enforced under the rules of the Regulation if the jurisdiction of the court of origin was based on a rule common to both states (i.e. if the Brussels97 or Lugano Convention98 was applicable between the states or if another international treaty determining the international jurisdiction was applicable between these states at the time) or a rule that is also contained in the regulation. The Brussels and Lugano Conventions were not applicable in Slovenia before its entry in the EU and Slovenia concluded very few other treaties regulating international jurisdiction during this time.99 Outside those treaties, the only option for such exceptional application of the Brussels I Regulation, therefore, is that the jurisdiction of the court of origin was based on the same rule as is also contained in the Regulation. For example, a Croatian judgment, issued after the entry of Croatia into the EU, but in proceedings started before that date, will be recognised and enforced under the Brussels I Regulation if the jurisdiction was based on the domicile of the 95 The time at which proceedings shall be deemed to have commenced should be established under the law of the state of origin. F. GASCÓN-INCHAUSTI, La reconnaissance et l’exécution des décisions dans le règlement Bruxelles I bis, in E. GUINCHARD (ed.), Le nouveau règlement Bruxelles I bis, Bruylant 2014, p. 215; J. KRAMBERGER ŠKERL, The application “ratione temporis” of the Brussels I regulation (recast), in D. DUIĆ/ T. PETRAŠEVIĆ (eds.), EU and comparative law issues and challenges: procedural aspects of EU law, Faculty of Law, Osijek 2017, available at (accessed on 1 March 2019), p. 345-346. 96 CJEU, 21 June 2012, C-514/10, Wolf Naturprodukte GmbH v SEWAR spol. s r. o. 97 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ L 299, 31 December 1972. 98 Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 339 of 21 December 2007. 99 E.g. the Treaty between Yugoslavia and Austria on Mutual Legal Aid of 16 December 1954 in which the contracting parties regulated the jurisdiction in matters relating to successions (OG of the People's Federative Republic of Yugoslavia, No. MP 8/1955).

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Recognition and Enforcement of Foreign Judgments in Slovenia defendant.100 If, however, the jurisdiction was based on the fact that the defendant, otherwise domiciled abroad, only had his or her assets in Croatia,101 such a judgment will be dealt with under the bilateral treaty between the states or Slovenian national law, since such jurisdiction is considered exorbitant by the Regulation.102 In 2016, the Supreme Court quashed (and returned for retrial) the judgment of a district court granting declaration of enforceability to a Croatian judgment, issued in 2014 (i.e. after the entry of Croatia into the EU), in proceedings started in 1998. The district court applied the Brussels I Regulation of 2000, without explaining what the basis was for the jurisdiction of the Croatian court. The Supreme Court was therefore not able to verify whether the application of the Regulation was justified regarding the conditions of Article 66.103 Unfortunately, however, we can still find judgments where the court wrongly assessed the temporal scope of application of the Brussels regulations.104 B.

The Procedure for the Declaration of Enforceability under the Brussels I Regulation and Other EU Regulations Providing for the Exequatur

If enforcement of the judgment of another Member State is conducted under the Brussels I Regulation of 2000, or else under the Brussels II bis Regulation, the Maintenance Regulation105 or the Property Regimes Regulations,106 a declaration of 100 Art. 46 of the former Croatian Private International Law Act [Zakon o rješavanju sukoba zakona s propisima drugih zemalja u određenim odnosima], OG of the Republic of Croatia, Nos. 53/91 and 88/01, applicable until 28 January 2019; Art. 55 of the new Croatian Private International Law Act [Zakon o međunarodnom privatnom pravu], OG of the Republic of Croatia, No. 101/2017. 101 Art. 54 of the former Croatian Private International Law Act. Such provision no longer exists in the new act. 102 Art. 76 in relation to Art. 5(2) of the Brussels I (Recast) Regulation, Notices from Member States (2015/C 390/06): Croatia notified the above mentioned Art. 54 of the Private International Law Act. 103 Judgment of the Supreme Court No. Cp 2/2016 of 7 April 2016. 104 Judgment of the Appellate Court of Koper No. I Cpg 83/2018 of 7 June 2018, where the court deemed that the creditor should have demanded the declaration of enforceability of a Croatian enforceable notary deed drafted in April 2004 under the regulation No. 44/2001. However, being that Slovenia entered the EU in May 2004 and Croatia in 2013, the regulation could not be applied to documents drafted before that. 105 Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, OJ L 7 of 10 January 2009. 106 Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes, OJ L 183 of 8 July 2016, and Council Regulation (EU) 2016/1104 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of the property consequences of registered partnerships, OJ L 183 8 July 2016.

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Jerca Kramberger Škerl enforceability must first be sought. Under Article 42.b of the CESA the applicant has to start the procedure for exequatur at a district court (Sl. okrožno sodišče).107 This procedure is unilateral (ex parte) and the defendant is only notified of the granting of the declaration of enforceability.108 The defendant (or the applicant, in case of refusal of the declaration of enforceability) can then file an appeal (Sl. ugovor), which is again decided upon by the district court, but in a panel of three judges, and discussed inter partes (the applicant has 30 days to respond to this appeal). If the decision of the court depends on disputed facts, the court shall hold an oral hearing. Under the subsidiarily applicable NCCPA, the court must give reasons for its decision on the declaration of enforceability (Article 29 of the NCCPA). A second appeal (Sl. pritožba) can be filed at the Supreme Court within 30 days of the service of the decision by the district court regarding the first appeal. An application for the enforcement of the judgment (Sl. predlog za izvršbo) (Article 40 of the CESA) can be filed once the decision regarding the first appeal is issued, since, under a new provision of the CESA (Article 42.b/3), the filing of the second appeal does not suspend enforcement.109 For other procedural issues (including the question of costs), not regulated in the Regulations or in the CESA, the provisions of the PILPA on recognition and enforcement of foreign judgments apply. Under the Court Fees Act, the fee for the application for the declaration of enforceability is 16 euros, the same as for the first appeal, whereas the fee for the second appeal is 33 euros.110 In 2017, the Supreme Court had to decide what happens if a foreign final and enforceable judgment does not contain sufficient information in order to be able to be enforced in Slovenia (it was unclear from the wording of the judgment what exactly was the obligation of the debtor). The court judged that the Slovenian court deciding on the declaration of enforceability under Brussels I Regulation should have summoned the applicant to produce the necessary additional information (in casu a copy of the Italian first instance judgment in the same proceedings).111

107 First instance courts in Slovenia are district courts which deal with disputes of higher value (20,000 euros or more), with family disputes, commercial matters etc., and local courts, which deal with disputes of smaller value, with successions, the land register etc. For details, see Art. 30 and 32 of the CPA. 108 For this interpretation, see also A. GALIČ, (note 19), p. 121. 109 Until the adoption of the CESA amendment in February 2018, a second appeal under the Brussels I Regulation was, in principle, of a suspensive nature, since the rules of the NCCPA were applicable to the questions not regulated in the Regulation or the CESA. This was criticised by doctrine, since it could substantially prolong the exequatur proceedings: see e.g. A. GALIČ, (note 57), p. 74. This author also criticises the fact that such appeal can also be lodged on the questions of fact, not only on the questions of law: Ibid., p. 73. 110 For more details, see the section relating to costs in the procedure for recognition under national law, above. 111 Judgment of the Supreme Court No. Cpg 3/2017 of 26 October 2017.

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Recognition and Enforcement of Foreign Judgments in Slovenia C.

Procedure Relating to the Application for Refusal of Enforcement under the Brussels I (Recast) Regulation

The recast Regulation abolished the declaration of enforceability, but it preserved the possibility of the debtor to assert specific grounds for the refusal of enforcement in the state of enforcement (Articles 45 and 46).112 These grounds are the same as under the original version of the Regulation, with one additional ground being a violation of the protective jurisdiction in employment matters. The same grounds apply to the refusal of recognition which, as under the original version of the Regulation, happens ipso iure, without the need for a special procedure. Regarding Recital 30 of the Regulation, the question arose as to whether Member States were required to provide in their national law the possibility of filing the application for refusal of enforcement in the context of enforcement proceedings, or whether it was still possible to separate the procedure aimed at the verification of the grounds for refusal contained in the Regulation from the actual enforcement proceedings, as was the case under the old Regulation from 2000. The argument for the fusion of both proceedings was understandably procedural economy (i.e. reducing the time and costs of the proceedings), whereas major arguments for the requirement of a special procedure were that the same procedure should also be available for the application for refusal of recognition, i.e. when no enforcement is necessary (Article 45/4),113 as well as the fact that the procedure with the application for refusal of enforcement is, in principle, of a non-suspensive nature.114 Furthermore, the Regulation leaves to the national law the determination of whether the procedure flowing from the application for refusal of enforcement is a unilateral (as previously was the application for the declaration of enforceability) or an adversarial procedure (as previously was the procedure to appeal against the decision on the exequatur).

112 e.g., the certification as a European Enforcement Order requires the court in the state of origin of the judgment to verify a number of conditions (Art. 6 of the EEO Regulation), however, further control in the state of enforcement is not possible. On the other hand, the certificate of Annex I to the Brussels I (Recast) Regulation is issued without verifications as to the jurisdiction of the court of origin or the minimal procedural guarantees; the debtor has the possibility to invoke the grounds for refusal of enforcement in the state of enforcement. See F. GASCON-INCHAUSTI, (note 95) p. 214. 113 M. REQUEJO ISIDRO, Recognition and Enforcement in the new Brussels I Regulation (Regulation 1215/2012, Brussels I recast): The Abolition of Exequatur, 2014, available at (accessed on 1 March 2019), p. 8. 114 This ensues from Article 44 of the recast Regulation, since the court “may, on the application of the person against whom enforcement is sought: (a) limit the enforcement proceedings to protective measures; (b) make enforcement conditional on the provision of such security as it shall determine; or (c) suspend, either wholly or in part, the enforcement proceedings.”

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Separate Adversarial Proceedings with the Application for Refusal of Enforcement

At the time of the entry into force of the Regulation, Slovenia only notified the European Commission of information on the competent courts, but no national act was adopted to fill the lacunae and enable the smooth application of the Regulation. The amendment to the CESA, “implementing” the Brussels I (Recast) Regulation (as well as the Protective Measures Regulation)115 was finally adopted in February 2018 and entered into force at the end of March 2018.116 The legislature opted for an adversarial procedure with the application for the refusal of enforcement, where the district court decides, with the participation of the creditor, on the existence of the grounds for refusal invoked by the defendant. Only one appeal (Sl. pritožba) is then possible117 directly with the Supreme Court.118 In this author’s view, these two instances suffice, especially with the jurisdiction of the highest court in the country as the setting for the appeal. We must specifically remember that the application for refusal of enforcement is actually, regarding its content and goal, equal to a first appeal under the original version of the Brussels I Regulation, where only one further appeal was possible.119 The new (somewhat strangely numbered) Article a42.b thus provides that district courts hold jurisdiction regarding the application for the refusal of recognition, the application for the establishment that no grounds for refusal of recognition exist, and the application for the refusal of enforcement of a foreign Regulation (EU) No. 606/2013 of the European Parliament and of the Council of 12 June 2013 on mutual recognition of protection measures in civil matters, OJ L 181 of 29 June 2013. 116 Because of its temporal scope of application only for judgments issued in proceedings started after 10 January 2015, the recast Regulation was rarely applied in the field of recognition and enforcement of judgments before the entry into force of the amended CESA (the exact number of such judgments is impossible to establish, being that the Slovenian first instance judgments are not (yet) accessible in the internet). In Judgment of the Supreme Court No. Cpg 3/2018 of 10 April 2018, we can read that the district court handled the application for refusal of enforcement analogous to the system in the original version of the Regulation: first in a unilateral procedure and then, after the appeal of the creditor, in an adversarial procedure; a second appeal (which no longer exists under the amended CESA) was then filed before the Supreme Court. 117 Art. 49 and 50 of the Regulation oblige the states to provide one appeal and give the opportunity to provide two. According to the data accessible on the European E-Justice Portal, only five other Member States opted for only one appeal: Ireland, Croatia, Cyprus, Latvia and Gibraltar, available at (accessed on 1 March 2019). 118 As of 1 March 2019, the necessary changes to the notifications under Art. 75 of the Brussels I (Recast) Regulation as to the competent courts in Slovenia have not yet been made. 119 J. KRAMBERGER ŠKERL, Certain open issues regarding the refusal of enforcement under the Brussels I Regulation in Slovenia, in V. RIJAVEC (ed.), Conference Proceedings, 24th Conference Corporate Entities at the Market and European Dimensions, University of Maribor Press, Faculty of Law, 2016, available at (accessed on 1 March 2019), p. 136. 115

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Recognition and Enforcement of Foreign Judgments in Slovenia judgment, foreign court settlement, or foreign authentic instrument. Every district court has territorial jurisdiction for these proceedings, without regard to, for example, the domicile of the defendant. The applicant must base the application on facts and evidence, otherwise the application is considered unfounded (and is therefore rejected without being served on the creditor).120 Before the issuance of the decision, the court shall serve a complete, admissible and reasoned application to the opposing party who can respond within 30 days of such service. The court decides in a panel of three judges. If the decision depends on disputed facts, the court holds an oral hearing. The appeal to the Supreme Court can be lodged in 30 days from the service of the decision of the first instance court. A response to the appeal can be filed in 30 days from the service of the appeal. The provisions of the PILPA on the recognition and enforcement of foreign judgments apply to the matters not regulated in the relevant EU regulations and the CESA. Such regulation is consistent with the Slovenian legal tradition of district courts having competence to deal with foreign judgments. Unified case-law can also be better ensured by the 11 Slovenian district courts with, in principle, more experienced judges than by the 44 local courts.121 The jurisdiction of the Supreme Court to decide on the appeal under Article 49 and renouncement of the second appeal also combines the advantages of a shorter procedure (only one appeal) and unification of the case-law through the highest court in the country.122 Slovenian law thus provides for a special procedure where grounds for refusal from EU regulations are discussed and which is separate from the enforcement procedure, which is regulated by national legislation (which, naturally, must not contradict EU law)123 and conducted by local courts. The grounds for refusal from the EU regulations cannot be invoked in the enforcement proceedings, nor can any objections to enforcement under national law (e.g. the fact that the debt has already been paid after the issuance of the judgment) be invoked in the proceedings before the district courts. The possibility for the enforcement court to suspend enforcement due to pending proceedings regarding the grounds for refusal from the Brussels I Recast Regulation is regulated in Article 38/1/b) of the Regulation. 2.

No Possibility of Incidental Proceedings Regarding Grounds for Refusal

Contrary to recognition (Article 36/3), no binding article of the Regulation speaks of the possibility of raising the refusal of enforcement as an incidental question in enforcement proceedings. Furthermore, if a negative conclusion to proceedings for the refusal of enforcement is not a prerequisite for enforcement (given the aboliArt. 53 of the CESA. J. KRAMBERGER ŠKERL, The Abolition of Exequatur in the Proposal for the Review of Brussels I Regulation, in V. RIJAVEC/ T. IVANC (eds.), Cross-border civil proceedings in the EU: (conference papers), Faculty of Law, Maribor 2012, p. 132. 122 T. DOMEJ, Die Neufassung der EuGVVO, Quantensprünge im europäischen Zivilprozessrecht, RabelsZ, 3/2014, p. 513-514. 123 Art. 41/2 of the Brussels I (Recast) Regulation. 120 121

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Jerca Kramberger Škerl tion of exequatur and the non-suspensive nature of the procedure for the refusal of enforcement), we can hardly speak of an incidental question, i.e. a question upon which the decision of the court in the principal matter depends. Recognition as an incidental question in enforcement proceedings is currently possible under Slovenian national legislation (the PILPA), since no enforcement is possible without a decision on recognition. Therefore, this solution cannot be transferred to verification of the grounds for refusal under the recast Regulation. It is interesting to note that even under the Regulation of 2000, the verification of the grounds for refusal of enforcement as an incidental question in enforcement proceedings was not possible, even though enforcement was not possible without a declaration of enforceability.124 D.

The Adaptation of Foreign Measures

Article 54/1 of the Brussels I Recast Regulation provides: “if a judgment contains a measure or an order which is not known in the law of the Member State addressed, that measure or order shall, to the extent possible, be adapted to a measure or an order known in the law of that Member State which has equivalent effects attached to it and which pursues similar aims and interests.”125 Recital 28 to the Regulation further provides: “[w]here a judgment contains a measure or order which is not known in the law of the Member State addressed, that measure or order, including any right indicated therein, should, to the extent possible, be adapted to one which, under the law of that Member State, has equivalent effects attached to it and pursues similar aims. How, and by whom, the adaptation is to be carried out should be determined by each Member State.”126 Article 54/1 also provides that the adaptation shall not result in effects going beyond those provided for in the law of the Member State of origin. The doctrine speaks of the requirement of a “functional equivalence”.127 The doctrine emphasises that if the States are free to regulate the manner of adapting foreign measures, they cannot simply

124 Art. 38/1 of the Regulation of 2000 and, a contrario, Art. 33/3 on the automatic recognition of judgments. 125 Gascón-Inchausti argues that Art. 54/1 probably originates in the CJEU judgment 12 April 2011, [C-235/09], DHL Express France v. Chronopost SA on the recognition and enforcement of coercive measures (Fr. astreinte) under the Regulation No. 40/1994. F. GASCÓN-INCHAUSTI, (note 95), p. 229. See also X. KRAMER, in U. MAGNUS/ P. MANKOWSKI, Brussels Ibis Regulation, Commentary, European Commentaries on Private International Law, Sellier, 2016, p. 970. 126 As examples of situations in which adaptation would be necessary, Hovaguimian cites specific search orders and measures to gather evidence for expert reports: P. HOVAGUIMIAN, The enforcement of foreign judgments under Brussels I bis: false alarms and real concerns, Journal of Private International Law, 2015, Vol. 11, No. 2, p. 230. Gascón-Inchausti mentions coercive measures (Fr. astreinte), which do not exist in all legal systems or have different effects in other legal systems, and orders in personam from the English and Irish legal systems: F. GASCÓN-INCHAUSTI, (note 95), p. 229. 127 M. REQUEJO ISIDRO, (note 113), p. 9.

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Recognition and Enforcement of Foreign Judgments in Slovenia refuse to proceed to carry out such adaptation if necessary (and possible).128 Various authors are especially worried about the very loose regulation of such adaptation in the Regulation.129 The recent amendment of the Slovenian CESA unfortunately did not tackle the issue of adaptation, insufficiently regulated in the Regulation and needing implementation. It is thus still not clear how the adaptation of foreign measures under Article 54 of the Recast Regulation happens in Slovenia: is it on the initiative of the creditor, of the debtor, or of the court; does the enforcement court proceed to adaptation within the enforcement proceedings under national law or is it a special procedure before the same or another court? There are also no provisions on the jurisdiction for appellate proceedings regarding adaptation, on the time limits for the appeal, or on certain other procedural issues. The cases where adaptation will be needed are not very common, but they will be complicated. The adaptation of a foreign measure to one existing in the national legal order can namely be a very complex legal question demanding a good knowledge of comparative law and often of a foreign language. It could be argued that systems, like the Slovenian and Austrian one, where courts are entrusted with the enforcement of civil judgments and the enforcement is divided into the “authorisation of enforcement” and the “actual enforcement”130 are more suited to incorporating the adaptation into the “authorisation stage” of the enforcement proceedings.131 However, in this author’s view, the current organisation and division of tasks at the local courts in Slovenia, as well as the normal course of enforcement proceedings do not provide for appropriate handling of such questions.132 Nevertheless, being that neither the Regulation nor the Slovenian national J. FITCHEN, in A. DICKINSON/ E. LEIN, (eds.), The Brussels I Regulation Recast, Oxford University Press 2015, p. 506. 129 L.J.E. TIMMER, Abolition of Exequatur under the Brussels I Regulation: Ill Conceived and Premature?, Journal of Private International Law, Vol. 9, No. 1, 2013, p. 137-139; J. FITCHEN, (note 128), p. 506. 130 In Germany, on the other hand, the court simply issues an “enforceable judgment”, i.e. a copy of the judgment followed by a declaration of enforceability (Vollstreckungsklausel) (Art. 724 of the German Zivilprozessordnung [Civil Procedure Act]). 131 On (the difficulties in) combining the national rules on enforcement and the ones from the Brussels I Regulation, see, e.g., A. EKART/ V. RIJAVEC, Čezmejna izvršba v EU, osrednja tema evropskega civilnega procesnega prava, GV Založba 2010, p. 142-146. Hovaguimian, on the other hand, argues that also non-judicial authorities entrusted with enforcement are, in most Member States (with the notable exception of Germany) highly qualified lawyers who can also deal with such adaptation, if necessary: P. HOVAGUIMIAN, The enforcement of foreign judgments under Brussels I bis: false alarms and real concerns, Journal of Private International Law, 2015, Vol. 11, No. 2, p. 231. 132 It must be noted that the enforcement court will in any case have to determine whether the judgment falls within the scope of the Regulation, which can already be a difficult issue to solve. The majority of the doctrine is namely of the opinion that the fact that the certificate from Annex I was issued in the Member State of origin does not bind the Member State of enforcement regarding the applicability of the Regulation: P. HOVAGUIMIAN, (note 131), p. 224-226. 128

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Jerca Kramberger Škerl legislation provide for a different option, the adaptation will, until further regulation, have to be carried out within the enforcement proceedings by local courts. For the future, this author would suggest that the Slovenian legislature adopts special provisions regarding the adaptation, answering questions mentioned above and ensuring that adaptation is carried out with sufficient expertise and predictability, i.e. that the same foreign measure is always “transposed” in the same Slovenian measure. Therefore, a special procedure for adaptation would be sensible before the district courts, or, given the expected relative rarity of such cases, maybe even concentrated before one of the 11 Slovenian district courts. Such a procedure should be initiated ex officio by the enforcement courts when they would encounter a foreign measure needing adaptation (without the creditor necessarily losing the possibility of requesting the adaptation him/herself).133 The case-law of such an adaptation authority would subsequently be followed by the enforcement courts, without further referring the same foreign measures to such authority. These proceedings should be adversarial and an appeal under Article 54/2 of the Recast should be possible with the Supreme Court. The national law will also have to determine who is “any party” that can appeal and within what time limits they might do so.134 Fitchen points out that the Regulation is silent on the question of whether an appeal must be possible only in the event a positive decision on adaptation has been taken, or also in cases where adaptation was refused; various authors suggest that a wider interpretation would be better,135 and we agree. National law will also have to regulate the relationship between the adaptation proceedings and the enforcement proceedings.136

IV. Conclusion When confronted with the issue of recognition and/or enforcement of a foreign judgment, the Slovenian judge will often have to devote a meaningful amount of time and energy to establishing which legal act to apply. Is there any EU regulation applicable to the case at hand, maybe a bilateral or multilateral convention, or is it the Slovenian national act, the PILPA? If the case falls into the material scope of application of more than one of those acts, the temporal, and sometimes the territorial or personal, scope of application will have to be examined. As the Wolf Naturprodukte case showed, even the question of the temporal scope of a EU regulation sometimes needs an intervention by the CJEU (and before this the knowledge and the courage of a national judge to refer such a question).

133 See J. FITCHEN, (note 128), p. 507. For example, in England and Wales, Civil Procedure Rule No. 74.11A provides that “[t]he court may make an adaptation order on its own initiative or on an application by any party.” 134 Ibid., p. 510. 135 Ibid. 136 Ibid.

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Recognition and Enforcement of Foreign Judgments in Slovenia It can be established that the recognition system of the Slovenian PILPA is quite similar to that of the original version of the Brussels I Regulation (and even more to the Brussels Convention). A limited number of grounds for refusal are verified in court proceedings, which are unilateral at first and become adversarial once the defendant announces his or her opposition. However, the Slovenian court is able to verify several grounds for refusal proprio motu. Contrary to the aforementioned regulation, Slovenian law allows for incidental recognition in enforcement proceedings. Foreign judgments are enforceable in Slovenia after their recognition; Slovenian law does not provide for the declaration of enforceability of foreign judgments. The Slovenian legislature did not adopt any special acts to implement the EU regulations concerning the recognition and enforcement of judgments. Doctrine often speaks of a “minimalist approach”,137 according to which only particular provisions were incorporated into existing legislation, most notably into the CESA. The provisions necessary for the application of the Brussels I (Recast) Regulation were adopted in this way only in February 2018 and some issues still remain unsolved, such as the procedure for the adaptation of foreign measures. Somewhat paradoxically, the recast Brussels I Regulation leaves national legislatures more leeway than the old version, at least regarding the procedure for refusal of enforcement, even though the Regulation is intended to be a further step towards the cohesion and unification of EU private international law. The delegation of the regulation of important procedural questions to national laws could mean a step back from the mentioned goals, since states will inevitably regulate such questions differently.138 Additionally, this limits the possibility of intervention by the CJEU. Procedural rules must be clear and unequivocal, as well as very precise, and we could question whether the determination of such rules via directive-like provisions in the recast Regulation is the best option. This author can only agree with the warning from Gascón-Inchausti that, given that so much freedom is given to the national legislatures, these national bodies have to be very careful to make sure that the “implementation” of the Regulation in national legislation ensures and supports the progress towards easier cross-border enforcement.139 The new Slovenian legislation implementing the provisions of the recast Regulation regarding recognition and enforcement, although not yet complete, appears to be in line with this goal. However, it might be clearer and more “userfriendly” if the legislature opted for a separate act complementing the provisions of 137 N. BETETTO, Recognition And Enforcement Of Foreign Judgements – the Slovenian Experience, Network of the Presidents of the Supreme Judicial Courts of the European Union, Newsletter No 24-25/2013, available at (accessed on 1 March 2019). 138 Hess speaks about a “renationalisation” of the verification of the judgment: B. HESS, Die Reform der EuGVVO und die Zukunft des Europäischen Zivilprozessrechts, IPrax, 2/2011, p. 129. See also P. MANKOWSKI, in T. RAUSCHER (ed.), EuZPR – EuIPR, Europäisches Zivilprozess- und Kollisionsrecht, Kommentar, Brüssel Ia-VO, 4th ed., Sellier, Verlag Dr. Otto Schmidt 2016, p. 1125; P. HOVAGUIMIAN, (note 131), Vol. 11, No. 2, p. 242; G. CUNIBERTI/ I. RUEDA, in U. MAGNUS/ P. MANKOWSKI, Brussels Ibis Regulation, Commentary, European Commentaries on Private International Law, Sellier, 2016, p. 955. 139 F. GASCÓN-INCHAUSTI, (note 95), p. 248.

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Jerca Kramberger Škerl the EU regulations in the field of European civil procedure in view of their application in Slovenia.140

140 N. POGORELČNIK VOGRINC, Sprememba Bruseljske uredbe I, Pravosodni bilten, Year 37, No. 1, 2017, p. 220.

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THE SALIENT FEATURES OF THE NEW INTERNATIONAL COMMERCIAL ARBIRTATION ACT IN ARGENTINA Julio César RIVERA JR.*

I. II.

III.

Introduction The Salient Features of Law 27,449 A. The Scope of Law 27,449 1. What Is an International Arbitration under Law 27,449? 2. What Is a Commercial Arbitration under Law 27,449? B. Arbitrability C. Competent Courts D. The Form of the Arbitration Agreement E. Equality in the Appointment of Arbitrators F. Challenge of Arbitrators G. The Arbitral Tribunal’s Power to Select the Applicable Law H. The Duty to State Reasons in Arbitral Awards Conclusion

I.

Introduction

Argentina used to have one of the most outdated regulations of arbitration in Latin America. It consisted basically of few procedural provisions set forth in provincial procedural codes and in the National Civil and Commercial Procedural Code. In 2015, the National Congress enacted a new Civil and Commercial Code (“NCCC”) that regulates the contractual aspects of arbitration.1 The NCCC * Professor at University of San Andres (Buenos Aires) and Global Adjunct Professor of Law (NYU School of Law). Partner at Marval, O’Farrell & Mairal (Buenos Aires). 1 The arbitration regulation of the Civil and Commercial Code is premised on Section 75.12 of the Argentine Constitution, which provides that the National Congress has the power to enact national criminal, civil, commercial, and labor codes. According to this constitutional provision, the National Congress can regulate all matters related to civil and commercial matters, which encompasses contract law. Since the National Congress has the power to regulate contract law, it was understood that it also has the power to regulate the arbitration agreement, which is a type of contract. For a detailed analysis of the power of the National Congress to include a chapter on the arbitration agreement in the National Civil and Commercial Code, see J.C. RIVERA/ G. PARODI, Atribuciones del Congreso de la Nación para su Regulación. Principios Fundamentales de la Legislación Proyectada, in J.C. RIVERA /

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Printed in Germany

Julio César Rivera Jr. contains a chapter on arbitration that includes provisions on the definition, form, content, effects of the arbitration agreement; the types of disputes that may not be subject to arbitration; the appointment and challenge of arbitrators; and the arbitrators’ duties.2 The NCCC’s chapter on arbitration agreements is supplemented by the old procedural regulations of domestic arbitration in provincial and national procedural codes, applicable in each province and in the federal jurisdiction respectively. These procedural codes set forth the recourses available after an award (appeal, annulment, clarification) and the terms and conditions for their filing.3 In July 2018, the National Congress enacted Law 27,449 that is exclusively applicable to international commercial arbitration.4 As a result, the application of the NCCC’s chapter on the arbitration agreement and procedural codes is now limited to domestic arbitration. Law 27,499 has been modelled on the UNCITRAL Model Law with some minor modifications. The purpose of this article is to highlight the most relevant modifications introduced by the Argentinian legislator and their implications.

II.

The Salient Features of Law 27,449

A.

The Scope of Law 27,449

1.

What Is an International Arbitration under Law 27,449?

Article 1 of Law 27,449 provides that it exclusively governs international commercial arbitrations, without detriment to multilateral or bilateral treaties in force in Argentina.5 G.MEDINA (eds), Comentarios al Proyecto de Código Civil y Comercial de la Nación, Buenos Aires, 2012, p. 815. 2 See Articles 1649-1465 of the NCCC (available at ). 3 See, e.g., Articles 173-772 of the Código Procesal Civil y Comercial de la Nación available at ). 4 See Law No. 27.449 available at . 5 This provision acknowledges the constitutional primacy of international treaties over any domestic law set forth in Section 75(22) of the Argentine Constitution. Argentina is a party to the following international treaties concerning international commercial arbitration: the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention, 1958), the OAS Inter-American Convention on International Commercial Arbitration (Panama Convention, 1975), the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo, 1979), Las Leñas Protocol on Jurisdictional Cooperation and Assistance in Civil, Commercial, Labour and Administrative Matters (1992), and the International Commercial Arbitration Agreement of MERCOSUR (Buenos Aires, 1998). For a detailed analysis of these treaties

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The New International Commercial Arbitration Act in Argentina According to Article 3 of Law 27,449, an arbitration is international if: a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or b) one of the following places is situated outside the State in which the parties have their places of business: i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected. Article 3 replicates Article 1.3 of the Model Law with a significant difference. Unlike the Model Law, Law 27,449 does not consider an arbitration to be international when “the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.” Under Law 27,449, there must be an objective international element in the parties’ relationship.6 However, if an arbitration is international when the place of arbitration is situated outside the State in which both parties have their place of business, would it not be sufficient to select a seat outside Argentina to make an arbitration “international”? If the answer to this question were affirmative, then parties could easily transform a domestic case into an international one by simply choosing a seat outside Argentina, thus circumventing the need of an objective international element in the dispute. Some Argentine commentators have rejected this interpretation. In this regard, Uzal explains that, since Law 27,449 applies exclusively to arbitration seated in Argentina, the situation contemplated by Article 3(ii)(a) refers to a foreign domestic case in which the parties selected Argentina as a seat.7 According to Uzal, Law 27,449 does not regulate the opposite situation: a domestic Argentine dispute with a seat outside Argentina.8 Uzal understands that choosing a seat outside Argentina for a domestic dispute would entail a violation of Article 2605 of the NCCC that allows parties to submit a controversy to a foreign court or to an arbitral tribunal seated outside Argentina only in international disputes involving economic rights.9 This interpretation is buttressed by Article 107 of Law 27,449 that provides that Articles 1 to 6 of Law 27,449 will not prevent the application of Article 2605 of the NCCC. Argentine commentators disagree as to the whether an award issued in a purely domestic dispute but seated outside Argentina could be recognized in Argentina. Uzal argues that such an award could not be enforced in Argentina and how they interact between each other see A. BRAGHETTA, Polygamy of Treaties in Arbitration – A Latin America and MERCOSUL Perspective, in M.A. FERNÁNDEZ BALLESTEROS/ D. ARIAS, Liber Amicorum Bernardo Cremades, Madrid 2010, p. 253. 6 See R.J. CAIVANO/ V. SANDLER OBREGÓN, La nueva Ley argentina de arbitraje internacional, Revista de Arbitraje Comercial y de Inversiones 2018, p. 579. 7 M.E. UZAL, La internacionalidad, la arbitrabilidad y el derecho aplicable en la nueva Ley de Arbitraje Comercial Internacional, Revista de Derecho Comercial y de las Obligaciones 2018, p. 627. 8 Ibidem. 9 Ibidem.

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Julio César Rivera Jr. since it concerns a dispute whose subject matter “is not capable of settlement by arbitration under Argentine law” (Article 104(b)(I) of Law 27,449)10. By contrast, Boggiano asserts that the recognition and enforcement of such an award could only be denied if the award omits the application of a mandatory rule of law under Argentine law.11 2.

What Is a Commercial Arbitration under Law 27,449?

The definition of “commercial” provided in Law 27,449 is more problematic. The Model Law does not contain any definition of when an arbitration is understood to be “commercial”. It simply mentions in a footnote that: The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road. The Model Law notion of commercial “applies without regard to the nature or form of the parties’ claims and looks only to the character of the underlying transaction or conduct”.12 As a result, the “legal foundation of a claim … is irrelevant to the question whether an arbitration is ‘commercial’”.13 Article 6 of Law 27,449 defines commercial relationships as “any contractual or non-contractual relationship governed by private law or predominantly by it”. According to Article 6, the notion of “commercial” must be broadly interpreted and, in case of doubt as to the commercial nature of the arbitration, it must be judged that it is commercial. Unlike the Model Law, Law 27,449’s definition of “commercial” is not premised on the commercial nature of the underlying transaction but on the nature of applicable law to the transaction. Law 27,449 refers to relationships governed by “private law or predominantly by it”. This reference to private law indicates that Law 27,499 does not apply to relationships governed by public law. This would be the case of the vast majority of contracts to which the Argentine State is Ibidem, p. 627-628.   A. BOGGIANO, Observaciones preliminares a la ley argentina de Arbitraje Comercial Intenacional 27.449, El Derecho 21 de agosto de 2018, p. 1. 12 G.B. BORN, International Commercial Arbitration, Alphen aan den Rijn (Netherlands) 2014, Vol. I, p. 308 13 G. PETROCHILOS, Procedural Law in International Arbitration, New York 2004, p. 5. 10 11

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The New International Commercial Arbitration Act in Argentina a party, even though many of these contractual relationships may reflect an archetypical commercial transaction. For instance, Argentina enacted a Public-Private Partnership Law (Law 27,328) that allows parties to Public-Private Partnership Contracts to agree that contractual disputes may be settled by arbitration.14 Insofar as Public-Private Partnership Contracts are administrative contracts not predominantly governed by private law, any dispute arising out of these contracts cannot be considered a commercial dispute under Article 6 of Law 27,449.15 B.

Arbitrability

Article 5 of Law 27,449 states that this law will not affect any other rule of Argentine law under which a specific dispute may not be settled by arbitration or may only be settled pursuant to specific provisions. The general principle is that matters that cannot be subject to compromise or settlement cannot not be submitted to arbitration (Article 737, National Civil and Commercial Procedural Code), i.e., a criminal matter arising from an unlawful act. Article 1651 of the NCCC adds that disputes concerned with the civil status or capacity of a person, with family matters, adhesion contracts,16 consumer disputes17 and labor disputes may not be subject to arbitration. Besides, the parties See Article 25 of Law 27,328 available at . 15 With respect to the public law nature of Public-Private Partnership Contracts, see I.M. DE LA RIVA, ¿Es la “participación público-privada” (PPP) un Nuevo contrato administrativo?, El Derecho Administrativo 2017-534. 16 Since consumer disputes constitute a different category of disputes that may not be subject to arbitration under Article 1651, the reference to adhesion contracts should be read as particularly referring to adhesion contracts signed between commercial companies. However, National Commercial Courts have developed a restrictive notion of this nonarbitrability ground, according to which the mere existence of an arbitration clause in an adhesion contract does not entail that it is null and void. For instance, the National Court of Commercial Appeals held that an arbitration clause inserted in an adhesion contract was valid because it was a contract signed between businessmen and it had not be shown it was abusive. See Cámara Nacional De Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel C, “Servicios Santamaría S.A. c/ Energía de Argentina S.A. s/ ordinário”, § III. 17 Irrespective of what the NCCC states, consumer disputes may be settled by arbitration under Argentine law. The National System of Consumer Arbitration created by Decree 276/98 and recently updated by Resolution 65/2018 of the Secretary of Commerce is still in place, which indicates that consumer disputes may indeed be arbitrated, but under those rules specifically tailored to consumer disputes. The essential features of the system are: (i) pre-dispute arbitration agreements are not valid; (ii) after a specific dispute has arisen, a consumer may voluntarily decide to submit it to arbitration against a supplier of goods and services that have voluntarily joined the National System of Consumer Arbitration. See J. C. RIVERA, Arbitrabilidad de las relaciones de consumo. Posibilidad de ejecución en Argentina de un laudo extranjero, in C.A. SOTO COAGUILA/ D. REVOREDO MARSANO DE MUR, Arbitraje Internacional. Pasado, Presente y Futuro. Libro Homenaje a 14

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Julio César Rivera Jr. may not agree to arbitrate disputes that put the public order at stake (Article 1649). However, Argentine Courts have held that a dispute governed by public policy rules can be submitted to arbitration if it concerns only the parties’ monetary rights.18 C.

Competent Courts

Article 13 of Law 27,449 provides that the functions referred to in Articles 24 and 25 (appointment of arbitrators) will be exercised by the competent commercial court of first instance in the seat of arbitration. The functions referred to in Articles 31, 32 and 33 (challenge of arbitrators, and their replacement) 37 (interim measures and preliminary orders) and 99 (annulment actions) will be exercised by the competent commercial court of appeal in the seat of the arbitration. In the city of Buenos Aires, where most arbitrations are seated in Argentina, the national commercial courts will be the competent tribunal to exercise the above-mentioned functions. This criterion set forth in Article 13 is particularly welcome. National commercial courts seated in Buenos Aires have in general developed a deferential approach to commercial arbitration during the last years, within the context of annulment actions. The general principle according to which judges do not have the power to review the merits of the award has been consistently upheld by national commercial courts.19 In this same sense, national commercial courts have consistently rejected annulment arguments that attempt to show that the award is unfair,20 or that it contains mistakes in the interpretation of the applicable legal provisions.21 Similarly, national commercial courts have Bernardo Creamdes e Yves Derains, Lima 2013, p. 94). So, the National Civil and Commercial Code should be interpreted as stating that consumer disputes may be arbitrated but only according to those specific rules. 18 See, e.g., Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel D, 20/12/2016, “Francisco Ctibor S.A.C.I.y F. v./ Wall-Mart Argentina SRL s/ ordinario”, § V. 19 See, e.g., Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Pannel C, 24/10/2003, “Biomédica Argentina S.A. v. RTC Argentina S.A.”, § IV; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), 11/11/2008, “Otto Garde y Cia. V. Multiespacios San isidro S.A.”, § 3; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel C, 14/5/2010, “American Resturants Inc. y otros v. Outbank Steakhouse Int,” § 7; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel B, 3/4/2014, “Accor Argentina S.A. y otro v. NSB DS y otros s/ organismos externos”, § 8. 20 See, e.g., Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), anel D, 8/8/2007, “Mobil Argentina S.A. c. Gasnor S.A. s/ laudo arbitral”, § 11; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel D, 25/10/2006, “Decathlon España S.A. c. Bertone s/ proceso arbitral”, § 12. 21 See, e.g., Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel E, 19/4/2005, “Patrón Costas c. International Outdoor Advertising Holdings Co. y otro / queja” § 4; Cámara Nacional de Apelaciones en lo

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The New International Commercial Arbitration Act in Argentina disregarded arguments that attempt to challenge the weighting of the evidence performed by the arbitral tribunal,22 or that question the legal basis of an award.23 D.

The Form of the Arbitration Agreement

Article II(1) of the New York Convention states that Contracting States have a duty “to recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.” According to Article II(2) of the Convention, this “in writing” requirement is satisfied when an arbitral clause is included “in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.” To the extent that the New York Convention requires that there is an exchange of letters or telegrams – or any other similar written document – it is very debatable whether a tacit or oral acceptance of a written offer that contains an arbitration clause fulfills the “in writing” requirement.24 Acknowledging that the New York Convention’s understanding of the “in writing” requirement is not suited for international contractual practices, the UNCITRAL Model Law, as amended in 2006, establishes less rigorous formal standards than the New York Convention.25 Article 7 of UNCITRAL Model Law offers two alternatives. Option 2 simply eliminates the “in writing” requirement by providing that an “‘[a]rbitration agreement’ is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.” Option 1 maintains the “in writing requirement” but it “no longer requires signatures of the parties or an exchange of messages between the parties.”26 Consequently, the arbitration agreement is formally valid irrespective of how it has been concluded (orally, by conduct or by any other means) as long as there is a Comercial (National Court of Commercial Appeals), Panel A, 2/5/2008, “Red de Monitoreo S.R.L. c. ADT Security S.A.”, § 4; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel B, 3/4/2014, “NSB S.A. y otros c. A.A. S.A. y otros / organismos externos”, § 4. 22 See, e.g., Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel D, 12/7/2002, “Total Austral S.A. c. Saiz, §2; Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals) Panel D, 25/10/2006 “Decathlon España c. Bertone s/ processo arbirtal,” § 10. 23 Cámara Nacional de Apelaciones en lo Comercial (National Court of Commercial Appeals), Panel D, 19/12/2017, “Pan American Energy LLC (Sucursal Argentina) c. Metrogas S.A. (Chile) s/ organismos externos,” §VI.B of the concurring opinion of Judge Vasallo. 24 For a more detailed analysis of this issue, see G.B. BORN (note 12), at 683-685. 25 See Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on . 26 Ibidem.

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Julio César Rivera Jr. written record of the agreement to arbitrate.27 In other words, this requirement “is satisfied if one party to the agreement unilaterally records it in writing, whether or not it is signed or confirmed by all the parties involved”.28 Article 7 of UNCITRAL Model Law is compatible with the New York Convention for the Convention must be interpreted as only imposing a “minimum form” and not a “maximum form” requirement.29 As a consequence, Contracting States may not impose additional formal requirements but are free to set forth less rigorous formal standards in their domestic legislation. In this regard, UNCITRAL adopted a Recommendation in 2006 that encouraged States to: (i) apply article II(2) of the New York Convention “recognizing that the circumstances described therein are not exhaustive’” and to (ii) to adopt one of the two options of the revised article 7 of the UNCITRAL Model Law that “establish a more favourable regime for the recognition and enforcement of arbitral awards than that provided under the New York Convention”.30 Against this background, Argentina implemented option 1 of Article 7 but with some variations. Article 15 of Law 27,449 provides that “an agreement is deemed to be in writing if its content is recorded in any form”. However, unlike the Model Law, Article 15 does not expressly state that the arbitration agreement may be concluded “orally, by conduct or by other means.” In any case, considering that Law 27,449 does not require any signature of the parties nor any exchange of documents and that it acknowledges that the arbitration agreement may be recorded “in any form”, it entails a departure from the restrictive form requirements of the New York Convention. So, even though Article 15 of Law 27,449 does not mention the different ways in which an arbitration agreement may be concluded, it does not mean that an arbitration agreement may not be concluded orally or by conduct, as long as that agreement has been recorded in any form.31 This interpretation is also supported by Article 106 of Law 27,449 that states that Article II(2) of the New York Convention must be “interpreted and applied recognizing that the circumstances described therein are not exhaustive”.32

Ibidem. R. MERKIN/ J. HJALMARSSON, Singapore Arbitration Legislation Annotated, New York 2016, p. 17. 29 See G.B. BORN (note 12), at 667-674. 30 See Recommendation regarding the interpretation of Article II, paragraph 2, and Article VII, paragraph 1, of the Convention on The Recognition and Enforcement of Foreign Arbitral Awards done in New York, 10 June 1958 (2006) available at . 31 See R.J. CAIVANO/ V. SANDLER OBREGÓN (note 6), p. 582. 32 Article 106 of Law 27,449 is based on UNCITRAL Recommendations regarding the interpretation of Article II, paragraph 2, of the New York Convention (note 30). 27 28

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The New International Commercial Arbitration Act in Argentina E.

Equality in the Appointment of Arbitrators

Article 24 of Law 27,449 states that any clause that puts a party in a privileged position as to the appointment of the arbitrators is null. A similar provision was already contained in the NCCC (Article 1661). F.

Challenge of Arbitrators

Article 28 of Law 27,499 provides that “an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties.” Article 28 departs from the Model Law by adding that certain circumstances shall be considered as giving rise to lack of impartiality or independence, without any evidence to the contrary being admitted: (i) if an arbitrator or a member of his firm acts as counsel to one of the parties, irrespective of the nature or type of dispute or (ii) if they act as counsel to a third party in a dispute with the same cause of action or with the same object. The origin of this inclusion lies in Argentina’s unsatisfactory experience in investment arbitration with respect to challenges against arbitrators on “lack of independence” or “impartiality” grounds.33 The scope of Article 28 appears to be limited to conflicts of interest arising out of current and not past relationships. In this regard, Argentine commentators have highlighted that the circumstances described in Article 28 are also contemplated in the IBA Guidelines on Conflict of Interest, which have an even broader scope given the fact that they also encompass past relationships.34 In any case, if Article 28 of Law 27,449 were to be interpreted as including conflict of interest arising out of past relationships, Argentine commentators have held that this provision should be read in light of the IBA Guidelines on Conflict of Interest that include similar circumstances in its “orange list” only when they took place within the last three years.35 G.

The Arbitral Tribunal’s Power to Select the Applicable Law

Article 28(2) of the UNCITRAL Model Law provides that if the parties have not chosen the applicable law, “the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.” According to this indirect approach, the arbitral tribunal “must first identify the ‘appropriate’ conflict of law rules, then apply the selected conflicts of law rules and, finally, apply the law

33

See J.C. RIVERA, La Ley de Arbitraje Comercial Internacional, La Ley 2018-E,

p. 604. See R.J. CAIVANO / V. SANDLER OBREGÓN (note 6), p. 584-585. See J.C. RIVERA (note 33) referring to Articles 3.1.1 and 3.1.4 of the IBA Guidelines on Conflicts of Interest. 34 35

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Julio César Rivera Jr. identified by means of the latter rules.”36 As explained by Silberman and Ferrari, different approaches may be adopted by arbitral tribunals in order to determine what conflict of laws rules are appropriate.37 In this regard, Silberman and Ferrari explain that arbitrators may apply: (i) the conflict of laws system of the country that would have had jurisdiction but for the arbitration agreement; (ii) the conflict of laws rules of the arbitral seat; (iii) the conflicts of laws rules of the arbitrator’s home state; (iv) the conflict of laws system of the country in which the award may be enforced; (v) the conflict of laws system of the country most closely connected to the dispute; (vi) the conflict of laws rules set forth in international treaties such as the 1955 Hague Convention on the Law Applicable to Contract for International Sale of Goods or the 1980 Convention on the Law Applicable to Contractual Obligations (Rome Convention); (vii) the general principles of conflicts of law rules.38 Finally, arbitrators may adopt a cumulative approach that “involves simultaneously applying choice of law rules of all legal systems connected to the dispute”.39 According to this cumulative method, it is irrelevant whether those legal systems have different rules. What matters is that in the particular case in dispute all lead to the same law.40 Unlike the UNCITRAL Model Law, Article 80 of Law 27,449 provides that if the parties have not chosen the applicable law, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. Article 80 presents two significant differences with respect to the Model Law. First, it sets forth a direct approach to the selection of the applicable law according to which there is no need to make any conflict of law analysis. The arbitral tribunal may directly apply the substantive law that it deems appropriate.41 Second, by referring to rules of law, Article 80 allows the arbitral tribunal to apply rules that have not been incorporated into any national legal system such as the UNIDROIT Principles of International Commercial Contracts or the general principles of international trade law.42 H.

The Duty to State Reasons in Arbitral Awards

Article 30(2) of UNCITRAL Model Law provides that “[t]he award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are 36 L. SILBERMAN/ F. FERRARI, Getting to the law applicable to the merits in international arbitration and the consequences of getting it wrong, in L. SILBERMAN/ F. FERRARI (eds), Conflicts of Laws in International Arbitration, p. 280. 37 Ibidem, p. 281. 38 For a detailed analysis of each of these possibilities, see L. SILBERMAN/ F. FERRARI (note 36), p. 282-92. 39 P. FOUCHARD/ E. GAILLARD/ B. GOLDMAN, On International Commercial Arbitration (E. Gaillard and J. Savage eds., 1999), The Hague 1999, p. 872. 40 Ibidem. 41 For a more detailed analysis of this direct approach, see J.A. MORENO RODRÍGUEZ, Derecho applicable y arbitraje internacional, Asunción 2013, p. 196-210. 42 See J.C. RIVERA (note 33) p. 606.

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The New International Commercial Arbitration Act in Argentina to be given or the award is an award on agreed terms under article 30.” Article 87 of Law 27,449 eliminated the possibility that the parties agree to have an award without reasons. This modification of the Model Law is premised on the notion that the duty to state reasons of any judgment is a constitutional principle that cannot be derogated by the parties’ consent.43

III. Conclusion The enactment of Law 27,449 implies a significant improvement on Argentine legislation regarding arbitration. By creating a specific regime for international commercial arbitration based on UNCITRAL Model Law, Law 27,449 substantially increases the predictability of international commercial arbitrations seated in Argentina. This is reinforced by the fact that the recent case law of national commercial courts has adopted a deferential approach to commercial arbitration. Nevertheless, Argentina still lacks a modern legislation concerning arbitrations between private parties and the Argentine State not governed by private law. As a matter of fact, the outdated rules contained in the National Civil and Commercial Procedural Code still govern this type of arbitrations when seated in Buenos Aires. A reform is therefore necessary to definitely improve the attractiveness of Buenos Aires as a seat for international arbitration.

43 See L. CAPUTO, Apuntes sobre la reciente Ley de Arbitraje Comercial Internacional, La Ley 2018-E, p. 993.

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INTERIM RELIEFS IN CHINESE PRIVATE INTERNATIONAL LAW Wenliang ZHANG*

I. II.

III.

IV.

V.

VI.

Introduction Fundamentals of Chinese Interim Reliefs A. An Overview B. Preservation of Assets 1. Assets Preservation Pending a Case 2. Assets Preservation Prior to a Case 3. Further Requirements for Assets Preservation C. Preservation of Actions D. Preservation of Evidence E. Advance Enforcement 1. Basic Requirements 2. Further Restrictions F. Special Preservation Measures 1. Maritime Preservation 2. IP Preservation International Jurisdiction for Interim Reliefs A. An Overview B. For Pending Cases C. For “Future” Cases D. For Foreign Courts-Heard Cases E. Other Related Jurisdiction Issues Applicable Laws for Interim Reliefs A. An Overview B. China’s Stance Recognition and Enforcement of Foreign Interim Reliefs A. An Overview B. China’s Stance Conclusion

Associate Professor at Law and Technology Institute, Renmin University of China Law School. The author would like to thank Dr Ilaria Pretelli and Ms Lesia LI for their very helpful comments. Any errors and omissions are the author’s own. *

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 327-352 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Wenliang Zhang

I.

Introduction

Globally, international dispute resolution is increasingly tactical and strategic, and recourse to interim reliefs has become more and more popular. Interim relief has proved well able to serve some important ends of dispute resolution, for example preserving the effectiveness of final relief and maintaining the status quo.1 The parties’ reasonable expectations are largely guaranteed, and dishonest actions may be sharply countered by application of interim reliefs, which thus promotes international transactions and maintains order in dispute resolution. However, despite the growing significance of interim relief, it is largely territorial in nature and its application is generally confined to the jurisdiction of issue. Countries have long designed their own systems of interim relief and different requirements are usually imposed for seeking such reliefs, which in practice creates room for parties to seize the most powerful interim reliefs among the possible choices. This cannot lead to ideal outcomes as anticipated beyond borders. The reach and influence of interim reliefs are thus strongly affected. The international community has long observed the necessity for cooperation in the field of interim reliefs and at the regional or international levels, tries to work out some general principles, 2 or endeavors to agree rules coordinating the international jurisdiction and cross-border enforcement of such relief.3 However, to date, a satisfactory picture has not emerged for any globally-directed interim reliefs or for interim reliefs with international dimensions.4 To put it differently, interim reliefs is still largely a matter that is under the control of individual countries and international dispute resolution is not coupled with an effective set of interim reliefs with true international implications. Alongside China’s increasing integration into the global market, China5 is now witnessing the emergence of a large number of international disputes and the reasonable resolution of such disputes is often emphasized by China’s Supreme People’s Court (hereinafter “the Supreme Court”).6 As a whole, however, Chinese law has not yet provided for an effective legal system for international dispute resolution: its existing under-developed mechanism for international dispute resolution has remained almost stagnant over the past three decades. In this broad 1 See, e.g., F. K. Juenger, The ILA Principles on Provisional and Protective Measures, The American Journal of Comparative Law 1997/45, p. 941 et seq. 2 See, e.g., Art. 8 of ALI / UNIDROIT Principles of Transnational Civil Procedure, Unif. L. Rev. 2004/4, p. 772. 3 See, e.g., Preamble (33) & Art. 35, Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJEU, L 351/1, 20.12.2012. 4 HCCH judgments project has chosen to avoid this matter. See Art. 3(1)(b), the 2018 draft Convention, available at , last visited on November 18 2018. 5 Throughout the paper, “China” is to be used in the sense of “Mainland China” as opposed to the PRC. 6 See the annual working reports of the Supreme Court, e.g., the Supreme Court Working Report 2017 and the Supreme Court Working Report 2018.

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Interim Reliefs in Chinese Private International Law context, a useful legal regime does not exist for international interim relief, either. As a country with a civil law tradition, Chinese courts cannot create or rely on precedents in application of interim reliefs. The Supreme Court has been making efforts, adopting a piecemeal approach by implementing some judicial interpretations, to improve China’s international procedural rules including those on interim relief, but it cannot overhaul the legal system due to its incompetence to do so.7 Consequently, China’s current legal regime cannot cope very well with the practical demands. The other side of the picture is that interim relief is used quite regularly in Chinese domestic and international judicial practice. This paradox is exacerbated by the fact that for international commercial arbitration in China, the parties or arbitral tribunals must go to the people’s courts for interim reliefs since the arbitral tribunals in China are not empowered to grant such measures.8 These contrasts call for an in-time evaluation of Chinese international interim relief and in particular, the private international law aspects of such reliefs deserve to be carefully investigated since China is becoming an increasingly important hub in international dispute resolution. The following discussion is divided into four main parts: part II introduces the basic categories and requirements of Chinese interim reliefs; part III investigates the international jurisdiction on Chinese interim reliefs; part IV considers the applicable laws for Chinese interim reliefs and part V explores the recognizability and enforceability of foreign interim reliefs in China.

II.

Fundamentals of Chinese Interim Reliefs

A.

An Overview

In China, a more accurate English translation of the measures corresponding to interim reliefs requires the use of the term “preservation”. At present, Chinese law explicitly provides for preservation only in the context of domestic litigation. 9 China’s Code of Civil Procedure (hereinafter “CCP”) 10 is the cornerstone for preservation in China. Before the amendments made to CCP in 2012, there had actually been several provisions that were specifically targeted at international preservation, namely Artt. 249-254 of CCP 2007 and Artt. 251-256 of CCP 1991, although thereunder the special international preservation rules just duplicated the 7 In judicial practice, the Supreme Court is only empowered to interpret the laws passed by National People’s Congress (NPC) and the NPC Standing Committee, and it is actually not permitted to deviate, in a substantial manner, from the NPC laws. See Art. 104, Legislation Act. 8 Artt. 28, 46 & 68, Arbitration Act. 9 Artt. 100 et seq., CCP. 10 CCP was promulgated by National People’s Congress in 1991 and thereafter, the law has gone through three revisions. The latest revision occurred in 2017 and reference to the law is meant to refer to the 2017 version of CCP. An unofficial version of this law is available at , last visited on June 17, 2019.

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Wenliang Zhang domestic preservation rules. The amendments made in 2012 and subsequently to CCP in 2017 erased these special rules for international preservation. Such antiinternational preservation amendments do not change the landscape for international preservation in China, and rightly so. In the absence of any internationallydirected rules, Chinese courts will refer to domestic procedural rules for international proceedings;11 so domestic preservation rules will apply by analogy for international purposes. Relevant Chinese practice also shows that there is almost no substantial difference for domestic and international preservation. As the law underpinning preservation, CCP introduces some basic but very general rules. Some specific laws also lay down some special rules for preservation in particular fields, such as maritime and intellectual property (hereinafter “IP”) litigation.12 Apart from these laws, the Supreme Court has played an active and prominent role in developing preservation, by recourse to a number of judicial interpretations.13 In particular, the Supreme Court passed a detailed judicial interpretation in 2016 to specifically address the property preservation, namely the Supreme Court Provisions on Several Issues Concerning the Handling of Property Preservation Cases by the People's Courts (hereinafter “Property Preservation Regulation”).14 These laws contain no special rules for international preservation, although presumably they may equally apply in the international context by analogy. On a number of other occasions, the Supreme Court promotes the use of preservation by passing other judicial interpretations. Nevertheless, since the Supreme Court is only empowered to interpret the general CCP rules in practice within the aim and principles set by NPC laws,15 it is not free to develop a novel legal structure for China’s preservation, domestically or internationally. At the level of bilateral or international treaties to which China is a party,16 no rules can be found to tackle preservation with international dimensions. Chinese preservation is mainly divided into preservation of assets, preservation of actions and preservation of evidence.17 Advance enforcement, a form of Art. 259, CCP. See infra, II.F. on Special preservation measures. 13 Judicial interpretations are issued by the Supreme Court in the course of applying the laws that have been promulgated by National People’s Congress (NPC) and the Standing Committee of NPC. 14 Property Preservation Regulation, Fa Shi [2016] No. 22. An unofficial English version of the law is available at , last visited on June 17, 2019. 15 Art. 104, Legislation Act. 16 China has signed a number of bilateral treaties which contain rules regulating judicial cooperation, such as recognition and enforcement of foreign judgments. For an overview, available at , last visited on June 10, 2019. However, under these bilateral treaties, there are no arrangements on interim remedies. China has signed the 2005 Convention on Choice of Court Agreement, but this convention does not address international interim reliefs either. 17 Some Chinese scholars dispute the classification of the preservation of evidence as a category of preservation in the Chinese preservation system. However, from general worldwide practice, interim measures revolving around evidence can be put under the rubric 11 12

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Interim Reliefs in Chinese Private International Law interim payment, is also available in some circumstances. These categories of preservation are interim in nature, but they differ from each other in terms of objects, purpose, preservation measures and so on.18 In terms of function, preservation of assets seeks to freeze the concerned assets for future enforcement, which roughly corresponds to the freezing injunctions or other assets-directed injunctions seen in other jurisdictions, while preservation of actions is similar to the popular injunctions that are employed to restrain the parties from doing or not doing something. As a third category of interim remedy, preservation of evidence resembles the search orders available in some common law jurisdictions. It is necessary to state that Chinese preservation rules do not differentiate between ex parte preservation and inter partes preservation, although in practice ex parte preservation is more commonly used, with no different requirements imposed from those for the preservation made inter partes. From the perspective of historical development, preservation of actions was first introduced as a general category of preservation only after the amendments made to the CCP in 2012, although prior to that several specific IP laws had already provided for such type of preservation.19 In contrast, preservation of assets and evidence can be traced back to the CCP 1991 and even the CCP 1982 (For Trial Implementation). B.

Preservation of Assets

Preservation of assets is China’s first and traditional basic category of interim reliefs, and it is actually the foremost interim remedy in Chinese judicial practice. This category of preservation is premised on several requirements, which vary depending on when the preservation application is submitted, i.e., prior to or during the course of litigation. 1.

Assets Preservation Pending a Case

Art. 100 of CCP provides for preservation sought pending a case. The overarching Art. 100 of CCP sets forth that, “As regards a case where, due to one party’s actions or other reasons, it may render enforcement of the resulting judgment difficult or incur any other damage, a people’s court may, upon the other party’s application, issue a ruling on preservation of the party's property, or order the party to refrain from doing or not doing certain acts; without any party’s application, the people’s court may, when necessary, issue a ruling to take preservation measures.

of interim remedies. In Chinese law, preservation of evidence is explicitly tagged as one category of preservation and thus, it is treated as a kind of interim remedy here. 18 B. JIANG, Lectures on CCP, Beijing 2012, p. 291 et seq. 19 See infra, II.F on Special preservation measures. See also, e.g., G. CHEN, Civil Procedure Law, Beijing 2007, p. 167.

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Wenliang Zhang A people's court may order the applicant to provide security for taking preservation measures and, if the applicant fails to do so, the application shall be dismissed. After entertaining an application [for preservation measures], a people's court must, if the circumstances are urgent, issue a ruling within 48 hours; and if it rules to take preservation measures, the measures shall be enforced immediately.” Art. 100 introduces preservation of assets and actions.20 From this provision, it can be seen that the two categories of preservation share the same set of requirements. In fact, the requirements are rather general. The core requirement for preservation is that one party’s actions or other reasons make enforcement of a future judgment difficult or a risk exists that other damage may be incurred. For this sole requirement, the requested court may preserve the respondent’s assets or order the respondent to do or not to do some acts. Beyond this requirement, rules on security and time limit for issuing a preservation ruling are clearly laid down. It is explicit that CCP declares in principle the availability of preservation measures, and then stipulates rather general and low-threshold requirements for such measures. In practice, preservation is normally quite easily obtained if proper security is provided. In order to apply for such preservation measures, there are no official requirements such as the applicant’s success rate on the merits, irreparable damage to the parties, balance of the hardship between the parties and so on. In practice, this general provision [Art. 100] easily renders preservation measures an enforcement tool for applicants, which is thus biased and loses its inherent value as interim relief, although some Chinese courts may think twice beyond the limited requirements before making a preservation ruling. The recent Property Preservation Regulation introduces more detailed rules for applying for property preservation, and lays down a long list for the application documents. In particular, the Regulation requires applicants to provide the facts and grounds to support the application, and to furnish the information of the attempted preserved assets or the clues thereof.21 The Regulation further details the security to be provided for preservation, i.e., no more than 30% of the value of the assets for pending cases and 100% thereof for pre-litigation preservation,22 as well as some specified cases where a guarantee may be unnecessary.23 To alleviate the burden on the applicant arising from provision of a guarantee, a letter of insurance from an insurance company for property preservation liability satisfies the guarantee requirement.24 So too does an independent guarantee issued by a financial institution for the purposes of provision of the preservation guarantee.25 20 Preservation of actions will be further considered in the next section, and in this section, preservation of assets will mainly be considered. 21 Art. 1, Property Preservation Regulation. 22 Art. 5, Ibid. 23 Art. 9, Ibid. 24 Art. 7, Ibid. 25 Art. 8, Ibid.

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Interim Reliefs in Chinese Private International Law 2.

Asset Preservation Prior to a Case

By recourse to a separate Art., CCP in its Art. 101 imposes different requirements on the preservation that is applied for, prior to a case. Art. 101 provides for prelitigation preservation, “Where the lawful rights and interests of an interested party will be irreparably damaged if an application for preservation is not filed immediately under urgent circumstances, the interested party may, before an action is instituted or an arbitration is commenced, apply to the people's court where the property to be preserved is located or at the place of the respondent’s domicile or a people’s court having jurisdiction over the merits of the case for taking preservation measures. The applicant shall provide security and, if the applicant fails to do so, the people's court shall dismiss the application. After entertaining an application, a people's court must issue a ruling within 48 hours; and if it rules to take a preservation measure, the measure shall be enforced immediately. If the applicant fails to institute an action or apply for arbitration in accordance with law within 30 days after the people's court takes a preservation measure, the people's court shall dissolve the preservation.” Art. 101 supplements Art. 100 by clarifying the requirements for applying for prelitigation preservation measures. Slightly different from those prescribed for the preservation pending a trial, the requirements for pre-litigation preservation center on the urgency of the case and the irreparable harm that could possibly be incurred. Moreover, the applicants are required to provide security. For the requested courts, they shall respond swiftly and, to this end, a time limit of 2 days is imposed within which to make a ruling. Successful applicants must commence the substantive proceedings within 30 days. From the general wording of Art. 100, it is not clear if it is required that the cause of action should accrue for pre-litigation asset preservation. In practice, Chinese courts have not been uniform in applying this type of preservation; they vary from each other in interpreting the general requirements, especially in respect of the urgency requirement. Some courts impose much higher standards in interpreting the urgency requirement. For example, in Danieli China v. Bank Eghtesad Novin, 26 Danieli China, as beneficiary of a letter of credit, requested Beijing No. 4 Intermediate People’s Court for pre-litigation asset preservation, alleging that preservation should be granted based on the fact that Bank Eghtesad Novin dishonored the letter of credit. The Bank was said to have a bank account opened in Beijing. By ruling that no urgency had been demonstrated and no irreparable damage could be anticipated for the Bank as a result of dishonoring the letter of credit, the requested Chinese court dismissed this pre-litigation 26 Danieli China v. Bank Eghtesad Novin, Beijing Intermediate People’s Court No. 4, [2016] Jing 04 Cai Bao No. 34.

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Wenliang Zhang preservation. The court went on to affirm that the alleged irreparable harm did not result from non-adoption of any preservation measures but rather, the noncooperation of the bank and the possible difficulties in relation to service of process or subsequent recognition and enforcement of the ensuing Chinese judgment, and this could be remedied at the stage when an action is actually commenced on the substance of the dispute and at that time preservation may be granted during the trial. Such a cautious application of asset preservation is not always seen in practice. For example, in China Machinery Engineering Corporation v. The Sudanese Thermal Power Generating Co. Ltd.,27 the requested Beijing No. 2 Intermediate People’s Court granted pre-litigation asset preservation without specifying the urgency requirement or the possible irreparable harm in its ruling, but solely based on a guarantee provided by Beijing SMEs Credits Re-guarantee Co., Ltd. In spite of the conflicting approaches to pre-litigation property preservation, it is learnt from some Chinse judges that in practice, Chinese courts have typically been reluctant to grant the pre-litigation preservation measures unless they are relatively clear about the parties’ rights and obligations; there are far fewer cases of pre-litigation preservation given as compared to those granted during a trial. 3.

Further Requirements for Assets Preservation

Besides the basic requirements set forth in the two aforementioned provisions – namely Artt. 100 and 101 of CCP – there are several more general rules laid down by CCP in regulating recourse to preservation measures. They touch on, e.g., the scope of the assets that can be preserved, the measures to be employed to enforce preservation, the dissolution of preservation measures and the remedies against the grant or denial of preservation. First, preservation is limited to what applicants apply for, or to the assets and objects relevant to the case.28 In principle, the requested courts are also allowed to take the initiative to render the preservation measures if the courts consider it necessary,29 but it seldom occurs in practice. For the scope of the assets to be preserved, the preservation measures rendered shall be limited by the specified assets or objects, and above all, such measures shall not extend to the assets of third or bona fide parties,30 although third parties may play a key role in the application of preservation measures.31 Second, to preserve an asset, the court involved may take measures such as seizing, impounding and freezing the assets concerned, or may take other necessary legal measures. It is, however, prohibited from re-seizing, re-impounding or 27 China Machinery Engineering Corporation v. The Sudanese Thermal Power Generating Co.Ltd. (2014) Erzhong Minbaozi No. 01145. 28 Art. 102, CCP. 29 Art. 100, Ibid. 30 B. JIANG (note 18), at 297. 31 W. ZHANG, Third parties in interim remedies, Modern Law Science 2016/38(1), p. 164 et seq.

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Interim Reliefs in Chinese Private International Law re-freezing assets that have already been seized, impounded or frozen. After such compulsory measures are imposed, for the sake of fairness, the courts shall immediately inform the respondents of the adopted measures.32 Third, the courts shall dissolve the preservation ordered upon provision of security by the respondents.33 The main goal of China’s preservation measures is to guarantee the future enforcement of the resulting judgments. In this sense, provision of sufficient security by the respondents serves the same purpose as the preservation measures. Fourth, in the case of false preservation, the applicants shall compensate all the respondents’ losses incurred.34 This rule confirms in principle the applicants’ liability in the case of false preservation, but the question of how to define the elusive term “false preservation” remains unsettled. Fifth, there exists an extraordinary procedure, namely the review procedure, which may be instituted by the parties against the preservation rulings once only. However, for the sake of efficiency, this review procedure does not halt the enforcement of the preservation.35 The preservation rulings are not appealable; in the context of Chinese law, a review procedure is distinct from an appeal. To be succinct, appeal is a normal remedy sought before the higher people’s courts, while the review procedure is extraordinary in the sense that it is mainly sought before the original rendering courts. C.

Preservation of Actions

Preservation of actions is China’s second interim remedy, which was established by CCP in its 2012 amendment36 as a general branch of Chinese preservation. Like asset preservation, preservation of actions is also divided into two categories: preservation rendered pending a case and that made prior to a case. This category of preservation enriches the preservation armory and serves as a counterpart to the injunctions seen in other jurisdictions starts to emerge.37 The birth of this type of preservation is said to be out of the increasing practical demands and the lasting academic call for establishment of this system.38 It is also a move based on the development of preservation of actions seen in other special areas such as IP protection. For preservation of actions, the same set of requirements as those for the aforesaid assets preservation are imposed. So, for application of this preservation, emphasis is equally placed on the fact that in the case of the preservation pending a Art. 103, CCP. Art. 104, Ibid. 34 Art. 105, Ibid. 35 Art. 108, Ibid. 36 B. JIANG (note 18), at 287-288. 37 Cf., Michael J. MOSER, People’s Republic of China, in Michael Pryles (ed.), Dispute Resolution in Asia, The Hague 2006, at 90. 38 The Civil Division of NPC Legislative Affairs Commission, Paraphrase of CCP, Beijing 2012, at 257 et seq. 32 33

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Wenliang Zhang case one party’s actions or other reasons make enforcement of a future judgment difficult or other damage may be incurred while in the case of the preservation prior to a case there exist the urgency of the case and the risk of an irreparable harm. In some special areas such as IP protection, slightly different requirements are introduced, but the general legal framework is not fundamentally different from that set forth in CCP and other general laws.39 D.

Preservation of Evidence

According to CCP, evidence preservation may be ordered by the people’s courts in the course of court proceedings, based on the condition that the evidence concerned may dissipate or be difficult to obtain afterwards. In the case of urgency, an application for evidence preservation may be made before institution of a case if the evidence concerned may dissipate or be difficult to obtain afterwards. 40 In essence, the requirements for this type of preservation are the same as those for the assets or actions preservation. In the field of IP litigation, evidence preservation is explicitly prescribed under the relevant IP laws, but the requirements thereunder are almost the same as those set forth under the general CCP.41 Chinese courts are usually more cautious and stringent in examining the applicant’s request for pre-litigation evidence preservation, which is in fact also true for other types of pre-litigation preservation. Besides the general requirements such as urgency – as seen in CCP or other IP cases – the requested Chinese courts will usually examine for instance: qualification of the applicant, evidence of infringement, the existence, status, scale of the asserted infringement and the degree of damage, the provision of an adequate guarantee.42 For the time restraint, applications for evidence preservation may be made before the time period for submission of evidence expires.43 For other procedural issues, there are no special rules for this preservation and reference may be made to the rules for application of the aforesaid preservation measures against assets or actions.44

See, infra, II.F. on Special preservation measures. Art. 81, CCP. 41 See, infra, II.F. on Special preservation measures. 42 Available at , last visited on June 16, 2019. 43 Art. 98, Interpretation of the Supreme Court on Application of CCP (hereinafter “Interpretation on CCP”), Fa Shi [2015], No. 5. 44 Art. 81, CCP. 39 40

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Interim Reliefs in Chinese Private International Law E.

Advance Enforcement

1.

Basic Requirements

The CCP provides for a fourth category of interim remedy, that is, “advance enforcement”. This is a special category of interim remedy that applies in some urgent circumstances for the interests of the parties in difficulty to collect some of their claims on an interim basis. This is a counterpart of interim payment seen in some jurisdictions. Advance enforcement only applies pending a case, but not prior to the commencement of a case;45 and it is restricted to application in the actions of performance that can be actually enforced. 46 This interim remedy is strictly confined to application in some specified areas or circumstances, i.e., for recovering allowance, alimony, maintenance, pension, medical expenses, wages, and in other urgent circumstances calling for advance enforcement.47 The Supreme Court clarifies that the here-said other urgent circumstances include circumstances that require immediate halt of harm or exclusion of obstacles, immediate stop of some actions, claiming the insurance compensation for resuming production or business operation, immediate refunding of the social insurance or social assistance funds, and the circumstance where the applicants’ life and business operation may be severely affected unless immediate refund is made. 48 Such a wide scope for application of advance enforcement may easily overlap with other interim measures. The application for advance enforcement is further restricted by a set of requirements, which are quite different from those for the abovementioned categories of interim reliefs. For the people’s courts to render advance enforcement, the following three conditions shall be satisfied: (1) The rights and obligations between the parties are clear; (2) A denial of advance enforcement will seriously affect the applicant’s life or business operation; (3) The respondent is capable of performance.49 The parties’ rights and obligations are clear if, with the basic social experience, the applicant can be considered as the right holder before the final ruling and there are no claims on set-off. For example, an applicant is the respondent’s father and an action is instituted for maintenance. In this scenario, with daily experience the son can easily be considered to have maintenance obligations.50 2.

Further Restrictions

Besides the aforesaid basic requirements, application for advance enforcement is accompanied by several further restrictions or guarantees. First, provision of security may be ordered by the requested courts; otherwise, the application may be B. JIANG (note 18), at 292. G. CHEN (note 19), at 172. 47 Art. 106, CCP. 48 Art. 170, Interpretation on CCP. 49 Art. 107, CCP. 50 G. CHEN (note 19), at 172-173. 45 46

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Wenliang Zhang dismissed.51 This is to ensure that the respondents’ rights can be protected in a balanced way. Scholars submit that for recovering allowance, alimony, maintenance, pension, medical expenses and wages, security is not necessarily required, while in other circumstances where advance payment is ordered, security may be ordered.52 The Property Preservation Regulation removes the requirement for the provision of security in a large portion of advance enforcement cases.53 Second, in the event of losing the case, the applicant shall compensate for respondents’ losses incurred due to the advance enforcement.54 In fact, the applicants shall also make restitution of the advance payment. Third, a review procedure may be instituted against rulings of advance enforcement, but such review procedure does not halt the advance enforcement.55 These several restrictions or guarantees are actually the same as those set forth for the aforesaid preservation measures. As a special category of interim remedy in the context of Chinese law, advance enforcement applies with quite different requirements from those for other categories of interim relief. From a substantive perspective, the parties’ rights and obligations must be clear. This requirement regarding the substance of the case is quite striking in comparison with other categories of interim relief in China, since the abovementioned two categories of preservation measures do not impose any requirements whatsoever on the substance of the case. Furthermore, urgency is also required as an inherent element that the applicant is in great need of such an interim remedy. Beyond these two requirements, the respondent’s capacity of performance is also listed as a necessary element for the awarding of such a remedy, because otherwise it would be futile to order any of such measures. F.

Special Preservation Measures

Besides the general preservation discussed above, there are still some other special categories of preservation under Chinese law, which are set forth in some specific areas of law. This section provides a glance at such other preservation measures. 1.

Maritime Preservation

In maritime cases, preservation measures may be applied for and specific rules are laid down for such measures according to Special Maritime Procedure Law. 56 Chinese judicial practice has seen a large number of international maritime preservation. For the maritime preservation, there are two basic categories of preservation: asset-targeted preservation and evidence-directed preservation, while the Art. 107, CCP. E.g., S. QI, Civil Procedure Law, Beijing 2008, at 161. 53 Art. 9, Property Preservation Regulation. 54 Art. 107, CCP. 55 Art. 108, Ibid. 56 Special Maritime Procedure Law was passed by the Standing Committee of National People’s Congress and it has been in force since 2000. 51 52

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Interim Reliefs in Chinese Private International Law actions-directed preservation seen in CCP is not explicitly stipulated in this special law. In any case, the actions-directed preservation in CCP can be applied for in maritime cases. For maritime preservation, a distinction is drawn between preservation made pending a case and that issued prior to a case. For the assets-targeted maritime preservation, the requirements are different from those set forth in CCP. To obtain maritime assets preservation, the applicant only needs to submit an application, stating the claim, reasons, objects for preservation and the amount of guarantee to be provided [by the respondent if the intended preservation could be lifted]. 57 For the preservation application, a guarantee may be requested by the court to be provided 58 and a review procedure may also be started against the preservation.59 Like CCP, this special law also generally allows for the lifting of the maritime preservation measures and the awarding of damages if wrongful preservation is made.60 Except for the general rules mentioned above, there are no other requirements or restrictions on the recourse to such maritime preservation measures. Even the urgency requirement usually seen for preservation is not explicitly imposed. Not even to mention the requirements such as the hardship incurred to the parties if measures were taken and the success rate for the applicant on the substance of the matter. As regards maritime cases, preservation measures may also be sought to preserve evidence. For evidence preservation, more or less the same set of requirements are imposed as those for the maritime assets preservation. The major difference lies in the requirement that for maritime evidence preservation, urgency for the preservation must exist.61 2.

IP Preservation

Preservation measures are popular in the field of IP litigation, and specific rules are introduced in some IP laws although the rules thereunder do not deviate, in substance, from the general CCP rules on preservation. For the (impending) trademark infringement, it is prescribed that if irreparable harm is to be incurred, application may be made for assets-related or actions-related preservation;62 to halt any infringement, the evidence preservation may also be sought prior to a case if the evidence is likely to dissipate or be difficult to collect afterwards. 63 So in essence there are actually no differences from the general CCP rules for preservation.

Art. 15, Special Maritime Procedure Law. Art. 16, Ibid. 59 Art. 17, Ibid. 60 Artt. 18 & 20, Ibid. 61 Art. 67(4), Ibid. 62 Art. 65, Trademark Law. 63 Art. 66, Ibid. 57 58

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Wenliang Zhang In a recent case Talent Television and Film Co., Ltd v. Canxing Media,64 the requested Chinese court – Beijing Intellectual Property Court granted a prelitigation preservation of actions, based on consideration of a lot more grounds for preservation than stated in the relevant IP laws. To be specific, the Beijing Intellectual Property Court examined, in turn, the following basic issues: if the applicant is the right holder or interested person; the likelihood of success on the merits; the urgency of the applied preservation; the balance of harm between the parties; if the social and public interest may be infringed by the applied preservation; and the guarantee provided by the applicant. Clearly, the requested court goes much further than China’s existing preservation legal regime and this move is recommendable. It is true that Chinese courts are not in fact empowered to do so, and uniformity cannot be ensured throughout China in terms of preservation requirements. Therefore, it is far from clear whether the practice of Beijing Intellectual Property Court in Talent Television and Film Co., Ltd v. Canxing Media will be followed in the future. For patent infringement, it is explicitly prescribed that prior to commencement of a case, evidence preservation may be applied for if the evidence is likely to dissipate or be difficult to collect afterwards.65 For copyright infringement, prior to commencement of a case, preservation measures may be sought against the respondent’s assets or actions, if without an in-time restraint the applicant’s legitimate interests will incur irreparable damage;66 to halt infringement, prior to commencement of a case, an application may be submitted for preservation if the evidence is likely to dissipate or be difficult to collect afterwards. 67 Seen as a whole, although specific rules are introduced for preservation measures in IP infringement, they do not differ in substance from those set forth in CCP. The substantial requirement in IP preservation revolves around the irreparable harm to be incurred, which is slightly different from that prescribed for preservation in CCP, namely, the likely difficulty in future enforcement of the resulting judgments or other harm to be incurred.

III. International Jurisdiction for Interim Reliefs A.

An Overview

Formally speaking, Chinese law distinguishes international and domestic jurisdiction, 68 which is also of relevance to preservation proceedings although the 64

Talent Television and Film Co., Ltd v. Canxing Media, (2016) Jing 73 Xingbao

No. 1. Art. 67, Patent Law. Art. 50, Copyright Law. 67 Art. 51, Ibid. 68 Chapter 4 of CCP is titled “Special Rules on Foreign-related Procedure”. This part clearly distinguishes between foreign and domestic proceedings, and in terms of international jurisdiction, it provides for two direct grounds in Artt. 265 & 266. 65 66

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Interim Reliefs in Chinese Private International Law dichotomy between international and domestic jurisdiction is mainly targeted at the substantive matters, rather than the procedural issues such as interim relief. However, the preservation jurisdiction is only prescribed in the context of domestic litigation; by analogy, such jurisdiction rules are also applicable in international preservation.69 For the courts’ jurisdiction over preservation, CCP provides for some direct jurisdiction grounds, laying down some heads of preservation jurisdiction. Moreover, the preservation jurisdiction draws a line between the jurisdiction for pending cases and that for future non-initiated cases.70 In addition, Chinese law also separates jurisdiction for the substantive matters of a case and that for the grant of preservation measures, which accords with the worldwide practice that even if one court has exclusive jurisdiction over the merits of a case, other courts are not deprived of the jurisdiction to grant interim relief.71 In terms of judicial cooperation, there are, however, no explicit rules for Chinese courts to exercise jurisdiction to grant preservation measures for the sake of lending support to foreign proceedings, but the possibility for Chinese courts to intervene is not excluded either. B.

For Pending Cases

If an application for interim relief is submitted during the substantive proceedings, the trial court is qualified to render such relief. The court having jurisdiction over the substance of a case also has the inherent jurisdiction to order interim relief. This is a universal practice around the globe, which is of no exception to the application of preservation measures in China. So, for an international case being heard in China, the Chinese court hearing the merits of the case is competent to issue preservation measures against the respondent’s assets, actions or evidence. 72 If preservation proves wrong, a claim for damages may be submitted to the presservation court.73 Besides the court hearing the merits of a case, other courts are presumed to be able to join in the preservation proceedings, especially the courts where the attachable assets, evidence or the respondent is located. As ALI / UNIDROIT Principles of Transnational Civil Procedure acknowledges74, a court may grant provisional measures with respect to a person or to property in the territory of the forum state, even if the court does not have jurisdiction over the controversy. For Art. 259, CCP. Artt. 100 & 101, Ibid. 71 See, e.g., L. COLLINS, Essays in International Litigation and the Conflict of Laws, Oxford 1997, at 44 et seq. 72 Artt. 81 & 101, CCP. 73 Official Reply of the Supreme People's Court regarding Issues concerning the Jurisdiction over Harm Caused by a Property Preservation Application Filed during an Action, Fa Shi [2017] No. 14. 74 Art. 2.3, ALI / UNIDROIT Principles of Transnational Civil Procedure, Unif. L. Rev. 2004/4, p. 762. 69 70

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Wenliang Zhang domestic cases, the Chinese courts hearing the substance thereof oversee the whole preservation proceedings, although other courts may assist in the enforcement of the preservation rulings. For international cases, the Chinese courts hearing the substance thereof are competent to grant the preservation measures; however, a Chinese court will not grant the preservation measures in the cases of which the substance is being heard in another Chinese court not to mention the cases before foreign courts. If the attachable assets are found abroad, the Chinese courts hearing the substance of a case cannot make rulings against those foreign-located assets, since Chinese assets preservation measures are meant to be territorial and operate in rem. C.

For “Future” Cases

If the case on the merits has not yet begun, jurisdiction for preservation is allocated to several possible venues. To be specific, pursuant to the CCP, applications for preservation may be submitted to the courts where the assets to be preserved are located, where the respondents are domiciled, or to the courts having jurisdiction to hear the merits of the case.75 Therefore, there are three main connecting factors supporting the preservation jurisdiction: (1) location of the relevant assets, (2) respondents’ domiciles, and (3) the place of the courts that are competent to hear the merits of the case. These alternative factors enable the applicants to choose between the possible venues for preservation. Wrong identification of the location of the assets seized may result in lifting of the preservation measures taken. In the Kyowa Tourism Co. Ltd. case,76 the preservation order taken against the respondent’s bank account was lifted since it was beyond the court’s jurisdiction to make preservation measures against assets not located therein. Practically, it may be wise to apply to the courts where assets can be seized. However, for convenience of litigation as well as conformity of rulings, it is better for the courts competent to hear the merits to address the preservation application. The judge empowered with jurisdiction on the substance is better placed to decide on the interim protection, since he or she may evaluate not merely the fumus boni iuris and the periculum in mora but also the merits of the case.77 Indeed, it is possible that these factors may point to the same court which not only has jurisdiction over the substantive matters but also is located where the respondent is domiciled with assets to be seized. Notably, CCP grants international jurisdiction over the merits to the courts where the assets that can be seized, on the condition that the defendant has no domicile in China and contractual or property-related disputes are involved.78 This point echoes Opinions of the Supreme Court on Some Issues Concerning the Art. 101, CCP. (2010) Hu Erzhong Minbaozi No. 4. 77 I. PRETELLI, Provisional and Protective Measures in the European Civil Procedure of the Brussels I System, in V. Lazic´ and S. Stuij (eds.), Brussels Ibis Regulation, Short Studies in Private International Law, The Hague 2017, at 100. 78 Art. 265, CCP. 75 76

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Interim Reliefs in Chinese Private International Law Application of CCP (hereinafter “Opinions on CCP”),79 which awards the preservation court (not necessarily the court that is competent to hear the merits) to subsequently handle the merits of the case, irrespective of whether the preservation court has jurisdiction over the merits or not.80 That is to say, the ruling of preservation measures per se makes the preservation court substantively competent to hear the merits of a case. However, the Supreme Court clarified in Reply to How to Understand Art. 31(2) of Opinions on CCP81 that the prior asset preservation alone cannot make the preservation court competent to hear the merits; if the preservation court does not have jurisdiction over the merits, the case shall be moved to the courts competent to hear the merits.82 For international cases, however there is an explicit rule, mandating that the prior asset preservation can support jurisdiction over the merits,83 which thus differs substantially from the domestic preservation. Accordingly, in the international case the scope is effectively broadened for the parties to choose where to apply for preservation and where to sue in a very tactical way, which is, of course, not necessarily admirable. In DVB Bank SE v. ISIM Amin Limited et al.,84 DVB Bank sought to preserve the respondent’ ship MV Amin 2 that was docked in Zhangzhou Harbor, Fujian province; Xiamen Maritime Court of Fujian province ruled to arrest the ship and then adjudicated on the merits of the case. Besides this case, Chinese maritime courts in practice routinely arrest ships based on the presence within the courts’ jurisdiction and later rule on the substance of the case without finding any other grounds of jurisdiction over the merits.85 It is further prescribed that if the applicants opt to commence the case on the merits before the courts that are not the courts which render the preservation rulings, the prior preservation proceedings shall be forwarded to the later courts hearing the merits of the case.86 This provision is aimed to coordinate proceedings in China and prevent parallel proceedings. For the losses incurred to the respondents, lawsuits may be instituted for damages. As regards claims for damages, jurisdiction is allocated to the courts that have made the preservation rulings or that have exercised jurisdiction over the merits of the cases. 87 In VTB-Bank （ France ） SA v. Ferta Trade Ltd, 88 the Opinions on CCP, Fa Fa [1992], No. 22. This law was repealed in 2008. Art. 31(2), Opinions on CCP. 81 Reply to How to Understand Art. 31(2) of Opinions on CCP, Fa Shi [1998] No. 5. 82 B. JIANG (note 18), at 295-296. 83 Art. 265, CCP. 84 This case was selected as one of the ten typical maritime cases in Chinese courts. For the report of the case, see https://www.chinacourt.org/app/appcontent/2017/04/ id/2829355.shtml (accessed on June 3, 2019). 85 There are ten selected typical maritime cases on arrest and auction of ships. For instance, in the case SANEI-1 [(1999) Wu Haifa Tongzhizi No. 25], Tenyu Shipping S.A. Panama applied for the arrest of the ship SANEI-1 before a lawsuit was launched on the merits. Wuhan Maritime Court made the preservation order based on the presence of the ship and then ruled on the substance of the case. 86 Art. 160, Interpretation on CCP. 87 Art. 27, Ibid. 79 80

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Wenliang Zhang preservation court – Tianjin Maritime Court entertained the respondent’s claim for damages and awarded all the damages incurred due to wrongful preservation. And in Four Seasons Co. v. Cheongfuli（Hong Kong）Company, 89 the preservation court – Ningbo Maritime Court tried the respondent’s claim for damages due to the alleged wrong arrest. D.

For Foreign Courts-Heard Cases

If the case on the substantive matter is pending outside China, it is worth considering whether preservation measures may be sought before Chinese courts. The present Chinese law is silent on this issue. In practice, Chinese courts can grant such preservation applications even though the main substantive proceedings have been initiated abroad. By passing Interpretation on CCP, 90 the Supreme Court officially recognizes parallel proceedings, that is to say, it allows for Chinese courts to exercise jurisdiction over the substance of a matter according to Chinese jurisdictional standards, irrespective of the pending actions in other jurisdictions.91 As a result, Chinese courts may be mobilized to give preservation rulings. The real issue here is that Chinese courts will only grant preservation measures if they have jurisdiction over the substance of the case at hand and the awarding of preservation measures are not actually seeking to aid the foreign substantive proceedings but merely as a part of Chinese court proceedings, with no relevance to the foreign main proceedings. Bearing in mind the fact that CCP actually grants jurisdiction over the merits of a case based on preservation measurers taken, it may thus be concluded that Chinese courts will always be ready to render preservation measures. After obtaining preservation measures, successful applicants must institute the substantive proceedings before Chinese courts within 30 days.92 Otherwise, the preservation shall be annulled, which is strictly applied in practice.93 Thus, there are no ancillary preservation measures that may follow foreign main proceedings. If Chinese courts could facilitate the foreign substantive proceedings by granting preservation measures, a lot of judicial resources would be saved and conflicting judgments may also be avoided. However, Chinese judicial practice has not yet demonstrated this willingness. Nevertheless, it is certain that the parties are able to commence Chinese preservation proceedings, which shall nevertheless be followed by duplicate Chinese substantive proceedings. Clearly, this is not a good choice and the parties then face a dilemma. (2010) Jin Gao Minsi Zhongzi No. 033, Higher People’s Court of Tianjin Municipality. 89 (2014) Yong Haifa Shi Chuzi No. 49. 90 Interpretation on CCP, Fa Shi [2015] No. 5. 91 Art. 533, Interpretation on CCP. 92 Art. 101, CCP. 93 See, e.g., China Pacific Insurance (group) Co., Ltd. v. Dalian Yangfan Shipping Co., Ltd., Gazette of the Supreme People’s Court of the PRC, vol.1, 1999. 88

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Interim Reliefs in Chinese Private International Law If the case on the merits is not yet pending abroad, Chinese courts are believed to be more inclined and more easily involved in the international preservation, especially when Chinese courts are also considered to have jurisdiction over the merits of the intended cases. Here again, if Chinese courts are approached for preservation measures, the main substantive proceedings shall be started within 30 days as required; otherwise, the granted preservation measures will be lifted and the applicants may even be subject to lawsuits for damages due to wrongful preservation.94 The peculiar thing is that the applicant for preservation does not need to inquire into how to prove Chinese courts’ jurisdiction over the substance of the matter for his subsequent action, because as mentioned before, the assets preservation alone is established as an independent head of international jurisdiction, exorbitant as it appears, against those with no domicile in China.95 Therefore, parties can wield enormous power against those not domiciled in China by resorting to the asset preservation first and then commencing the main proceedings based thereupon. Globally, countries have been hospitable to each other in terms of lending help by granting interim reliefs. For example, if the substantive proceedings are pending (or about to be brought) anywhere in the world, it is now possible to apply for a freezing order in England, subject to an exception that the foreign court had no jurisdiction (in English eyes) or if its judgment would not be enforced in England for some other reason.96 In the EU, member States are able to aid each other’s proceedings even though they do not necessarily have jurisdiction over the substance of the matter.97 The lead taken by England and the EU points to a promising direction that countries, including China, may follow. E.

Other Related Jurisdiction Issues

Asset preservation operates only in rem, and not in personam. In other words, preservation is confined to assets seized or frozen in China, but not beyond. Chinese courts cannot grant extraterritorial asset preservation. Enforcement measures available for asset preservation ensure the preservation effects against the assets seized. For Preservation of actions, it is not yet clear if it is also territorial in nature, but the absence of effective punishment for non-compliance thereof under Chinese law may erode this preservation. Theoretically, Chinese court may grant extraterritorial preservation of actions, which has in personam effects, but it is still to be seen how this works in practice. Art. 27(1), Interpretation on CCP. Art. 265, CCP. This Article prescribes that for the defendants not domiciled in China, the people’s courts where their assets can be seized may exercise the jurisdiction over the substance of the contractual or assets-related cases. 96 T.C. HARTLEY, International Commercial Litigation: Text, Cases and Materials on Private International Law, Cambridge 2009, at 411 et seq. 97 Art. 35, Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJEU, L 351/1, 20.12.2012. 94 95

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Wenliang Zhang For international commercial arbitration seated in China, preservation measures may be employed. Evidence preservation is explicitly prescribed in the international arbitration;98 assets preservation can be applied for by reference to the preservation rules for domestic arbitration.99 For the jurisdiction to issue preservation measures in the course of international commercial arbitration, only the Chinese courts are empowered to grant such measures. The arbitral tribunals are not in a position to order any preservation measures. When a request for preservation measures is submitted, the arbitration institutions shall transfer the application to the Chinese courts with jurisdiction to do so.100 For evidence preservation, the intermediate people’s court where evidence is located is empowered to grant preservation measures.101 For assets preservation, jurisdiction to grant preservation measures is awarded to the intermediate people’s courts where the respondent is domiciled or where assets are located. 102 For international arbitration conducted outside China, there will be difficulty for seeking preservation measures in China. In Dongwon F&B,103 Shanghai No. 1 Intermediate People’s Court refused to entertain the application for the assets preservation while international arbitration was ongoing in Korean Commercial Arbitration Board. This is partly due to the ambiguities in relation to relevant Chinese laws, and also reflects the divergence and different attitudes towards international judicial cooperation. For pre-litigation maritime asset preservation, the maritime court where the assets can be seized shall be competent for preservation,104 irrespective of whether the parties have reached any jurisdiction agreement, or whether any arbitration agreement exists on the merits of the case. 105 What’s more, the pre-litigation maritime preservation furnishes one of the grounds of jurisdiction for the subsequent proceedings on the substance of the case. 106 For maritime preservation measures sought pending a case, the maritime court hearing the substance of the case is qualified for issuing such measures. But Special Maritime Procedure Law is silent on whether other people’s courts, including other maritime courts, may be involved in the rendering of such measures. Since one court’s measures can be enforced throughout the country, it thus appears that the maritime court hearing the substance of the case serves as the main, if not sole, qualified court to order maritime preservation measures. For maritime evidence preservation, the allocation of jurisdiction is the same as in the case of maritime asset preservation, that is, the pre-litigation evidence preservation will go to the maritime court where the evidence is to be preserved and the evidence preservation sought pending a case

Art. 68, Arbitration Act. Art. 28, Ibid. 100 Artt. 28 & 68, Ibid. 101 Art. 68, Arbitration Act. 102 Art. 272, CCP. 103 (2014) Hu Yizhong Shou Chuzi No. 2. 104 Art. 13, Special Maritime Procedure Law. 105 Art. 14, Ibid. 106 Art. 19, Ibid. 98 99

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Interim Reliefs in Chinese Private International Law will go to the maritime court hearing the substance of the case,107 irrespective of whether the parties have reached any jurisdiction agreement or whether any arbitration agreement exists on the merits of the case.108

IV. Applicable Laws for Interim Relief A.

An Overview

It is a universal tradition to draw a dichotomy between procedural and substantive issues for choice of law considerations, although the line between the two is not always clear. Questions of procedure are usually decided by lex fori, as it would be too complicated or impractical to do otherwise. And choice of law applies only to substantive law, never to procedural law.109 Indeed, there are indications in many jurisdictions suggesting a decreasing role for forum law in the traditionallyclassified procedural issues, including the grant of interim reliefs.110 However, the mainstream is still for the forum law to dominate the application of interim reliefs. In this broad context, the applicable laws for interim reliefs depend on how they are characterized. Despite that what constitutes procedure is sometimes controversial, besides the rules for bringing an action and holding a hearing, procedural issues also cover evidence and remedies.111 Interim reliefs are taken as a category of ordinary remedies available in the course of dispute resolution and they are widely taken as a procedural weapon. For example, it has long been held in Commonwealth countries that the availability of interim reliefs is governed by forum law as matters of procedure. Such a view is believed to be connected to the facts that interim reliefs are integrally related to the actions of proceedings in the forum and the applicable law on the merits may be unknown at the stage when interim reliefs are granted.112 From this sense, it is fair to characterize them as procedural rather than substantive, at least in a general sense. Therefore, to apply lexi fori for interim reliefs is acceptable. B.

China’s Stance

It is submitted that the orthodox rule of procedural characterization of interim reliefs is of no exception in Chinese courts’ practice. Assets preservation, advance Art. 63, Ibid. Art. 64, Ibid. 109 T.C. HARTLEY (note 96), at 505. 110 R. GARNETT, Substance and Procedure in Private International Law, Oxford 2012, at 299 et seq. 111 T.C. HARTLEY (note 96), at 505. 112 R. GARNETT (note 110), at 298 et seq. 107 108

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Wenliang Zhang enforcement and other preservation measures are procedural issues.113 Although the complete dominance of forum law for interim reliefs is declining around the world, Chinese courts have not yet realized the importance of foreign laws in ordering preservation and there is no sign for Chinese courts to refer to foreign laws in the course of deciding whether to grant such relief. The relevant practice shows that Chinese courts apply Chinese law in deciding all categories of preservation and the conditions under Chinese law shall be met.

IV. Recognition and Enforcement of Foreign Interim Reliefs A.

An Overview

Considering the great values surrounding interim reliefs, it is meaningful to explore whether interim reliefs can be recognized or enforced between jurisdictions. It is traditionally well established that only the final and monetary judgments may come in the scope of mutual recognition and enforcement. Interim reliefs per se are not final and moreover, not necessarily monetary in nature. Needless to say, the interim reliefs are usually territorial in nature, not demanding extraterritorial recognition or enforcement. 114 Therefore, as a general principle, interim reliefs cannot be recognized or enforced, or the desirability of enforcing interim measures abroad has not been apparent.115The core reason for this recognition exclusion lies in the very interim or preliminary nature of such reliefs, which means that interim reliefs are subject to variation in the court of origin. The requested court may be placed in a dilemma of taking either the recognition or non-recognition route. It is true that the recognition and enforcement of such interim reliefs will place the requested court in a state of uncertainty since these interim measures may be subject to subsequent variation or may even be completely cancelled afterwards. It is equally true that to confine the recognition and enforcement to final and monetary judgments limits the scope and degree of cooperation. The status quo of excluding interim reliefs from the scope of recognizability or enforceability is not always satisfactory. In particular, developments in modern technology, travel and communication have led to an increasing need for extraterritorial measures, which calls for the reaction by a country to another’s interim measures.116 That is to say, it begs an answer to why recognition or enforcement thereof is not possible. In times of globalization, especially with the rapid development of international transfer technology, it often occurs that without intime interim reliefs, the whole proceedings will be in vain, which is particularly B. JIANG (note 18), at 152. See, e.g., L. COLLINS (note 71), at 93. 115 Ibid, p. 94. 116 Ibid, p. 94. 113 114

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Interim Reliefs in Chinese Private International Law true in the international arena. Without lending help in the course of an action, it may become futile until the recognition and enforcement stage when, for example, the assets are totally dissipated or concealed. The EU has set a contrasting example of harmonizing jurisdiction to grant interim reliefs and imposing inter-member states’ recognition and enforcement thereof: where provisional, including protective, measures are ordered by a court having jurisdiction as to the substance of the matter with due process guarantee, their free circulation should be ensured under this [Brussels I Recast] Regulation.117 This stance has been consistent ever since 1968 when the Brussels Convention on judgment recognition was passed. It is now a consistent jurisprudence that interim reliefs are entitled to recognition or enforcement, at any rate if the action falls within the scope of EU judgements recognition scheme and the interim reliefs are made inter partes.118 However, Brussels I Recast Regulation does not go so far as to include all types of interim reliefs within the recognizability and enforceability sphere; rather, if provisional, including protective, measures are ordered by a court of a Member State not having jurisdiction as to the substance of the matter, the effect of such measures should be confined to the territory of that Member State.119 Moreover, ex parte interim measures cannot be enforced abroad either.120 Thus, it is submitted that this approach strikes a fair balance between recognition and nonrecognition of interim reliefs. B.

China’s Stance

To date, Chinese law has not yet specifically addressed the recognizability or enforceability of foreign interim reliefs. Nor are there any reported cases where foreign interim reliefs have or have not been recognized or enforced in China. Overall, the general picture for circulating such relief in China is rather gloomy for the time being. The first formidable hurdle for the recognition or enforcement of foreign interim reliefs in China is believed to come from the finality requirement. At the domestic law level, CCP explicitly sets forth that: only “legally effective” foreign judgments are within the scope of recognition and enforcement. 121 The term “legally effective” is used to introduce the finality requirement, although this expression is distinct from those commonly seen in other jurisdictions to prescribe the finality requirement. To understand the implications of this term, reference shall also be made to Chinese law. In the context of Chinese domestic law, “legally Preamble (33), Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJEU, L 351/1, 20.12.2012. 118 L. COLLINS (note 71), at 97 et seq. 119 Preamble (33), Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), OJEU, L 351/1, 20.12.2012. 120 I. PRETELLI (note 77), at 114 et seq. 121 Art. 281, CCP. 117

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Wenliang Zhang effective” is employed to indicate the “finality” of judgments, denoting the judgments being binding, affirmative and enforceable.122 To be more specific, only the Chinese judgments delivered by the Supreme Court and those not accompanied by any appeal remedy (including the circumstances where no appeal is allowed or the appeal period lapses) are “legally effective”.123 For foreign judgments to be recognizable or enforceable, they should be “legally effective” in the sense of Chinese law, i.e., not subject to ordinary review in the country of origin. To determine the status of foreign judgments seeking recognition or enforcement in China, the abovementioned Chinese standard of finality of judgments shall be followed. For interim reliefs, it will turn out to be very difficult to satisfy this standard mainly in the sense that it is not final or affirmative. To the author’s knowledge, there is no single reported case where a Chinese court has been faced with the recognition or enforcement of such interim reliefs, not even to mention that there is any successful recognition or enforcement thereof. In short, since it is very difficult to meet the finality requirement under CCP, there will be little hope for Chinese courts to recognize such foreign interim reliefs, including temporary injunctions.124 Even if foreign interim reliefs may be taken as satisfying the finality requirement, or if this requirement is not imposed for special considerations, other recognition requirements, especially the reciprocity requirement, amount to a second formidable hurdle for recognition and enforcement of foreign judgments.125 Over the years, the reciprocity requirement has blocked recognition of many foreign judgments in China, while a follow-suit model appears to be promising for breaking the reciprocity dilemma witnessed by a series of reciprocal recognition between China and foreign countries. 126 The traditional consideration of the reciprocity requirement is believed to be equally relevant in the context of recognition or enforcement of foreign interim reliefs in China, if future development allows for any cross-border movement of interim reliefs. At that stage, the due service requirement may also feature in enforcing foreign interim reliefs, while it is currently clear that many other prominent recognition requirements, such as international jurisdiction are not striking barriers for recognition or enforcement of foreign judgments in China.127 As discussed above, it appears possible to request Chinese courts to render preservation measures when the main proceedings are pending abroad. To some extent, the availability of this choice reduces the need for recognition or See W. ZHANG, Recognition and Enforcement of Foreign Judgments in China: A Call for Special Attention Paid to Both the “Due Service Requirement” and the “Principle of Reciprocity”, Chinese Journal of International Law, 2013/12, p. 143 et seq. 123 Art. 155, CCP. 124 W. ZHANG, Recognition and Enforcement of Foreign Non-Monetary Judgments in China, Frontiers of Law in China, 2018/13(2), p. 235. 125 W. ZHANG (note 122), p. 143 et seq. 126 W. ZHANG, Sino–Foreign Recognition and Enforcement of Judgments: A Promising “Follow-Suit” Model?, Chinese Journal of International Law, 2017/16, p. 515 et seq. 127 W. ZHANG (note 122), p. 147. 122

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Interim Reliefs in Chinese Private International Law enforcement of foreign interim reliefs. However, the problem remains that the separate preservation proceedings in China must be followed by initiation of new main proceedings before Chinese courts. If so, applicants will face a dilemma and the resulting parallel proceedings are not what applicants would like to see. If not, the preservation proceedings in China can be of good assistance, but then it is still necessary to resolve the trouble of the 30-day commencement of substantive proceedings in China as required by CCP.128 For promoting mutual trust, judicial cooperation and avoidance of the troubles surrounding parallel proceedings, it is submitted that the foreign substantive proceedings should be recognized and the applicants must be allowed to proceed to apply for preservation in China to aid the main proceedings abroad. In any case, any possible breakthroughs in this field must be based on new Chinese legislation with an open international outlook.

VI. Conclusion Undeniably, interim reliefs are playing an increasingly important role in contemporary international dispute resolution. Recourse to such reliefs will be more and more often involved with tactics or strategies. This explains why this matter has drawn intense attention around the globe, at both the domestic and international levels. In particular, under the current Brussels Jurisdiction and Judgments Regime, the issue of interim reliefs occupies a position that is of great significance. There are some prominent rules in this regard and the relevant legislation and practice stands for a promising direction for the development of judicial cooperation between countries. Unfortunately, the international community currently lacks a uniform mechanism for interim reliefs. Countries diverge from each other in the design of procedure, requirements or mutual recognition thereof, which in effect strongly hinders the values surrounding such reliefs. In China, preservation becomes quite popular for both domestic and international cases. Preservation measures can be taken towards the respondents’ assets, actions or evidence. Advance enforcement, as a kind of interim payment, is also available. In some areas such as IP and maritime litigation, special rules exist for preservation. In spite of this preservation armory, China’s preservation legal regime is still rather general, and a useful or favorable legal structure does not exist. In contrast, Chinese judicial practice is gradually improving in relation to preservation, but the overreaching preservation system underpinned by CCP cannot be overhauled fundamentally in practice. Nevertheless, the Supreme Court’s piecemeal approach of adopting some relevant judicial interpretations is promising to some extent, and it is a sign for a better future. For international preservation in China, reference must be made to the relevant procedure and requirements that are set forth for domestic preservation, since no explicit rules exist in the case of international preservation. Investigation into the relevant legal regime and judicial practice reveals that international preservation is available in Chinese courts. In international arbitration, Chinese 128

Art. 101, CCP.

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Wenliang Zhang courts can be mobilized to render preservation only when the arbitration is seated in China; arbitral tribunals are not empowered to order any preservation measures. Notably, assets preservation alone may make the preservation court jurisdictionally competent over the merits of a contractual or other property-related dispute if the respondent is not domiciled in China. In other circumstances, preservation measures can only be granted if the preservation court has jurisdiction over the merits of the case. Internationally, Chinese courts are seemingly not yet prepared to lend assistance to foreign main proceedings by granting preservation measures. For foreign interim reliefs, they cannot be recognized or enforced in China, mainly due to lack of the finality of such reliefs. Reciprocity may also erect high barriers for recognition of foreign interim reliefs in China. From the perspective of applicable law for interim relief, it is always considered procedural by Chinese courts and thus, the relevant preservation requirements under Chinese law shall apply. Overall, China has not furnished a very favorable mechanism for international preservation. It is also a pity that the international community has not yet taken the initiative to effectively tackle the problems in relation to international preservation. Therefore, to make use of Chinese international preservation, it is up to the parties to understand the fundamentals of such reliefs and commence Chinese preservation proceedings in an effective way.

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COURT DECISIONS ________________

SECULARISATION OF PRIVATE INTERNATIONAL FAMILY LAW IN ISRAEL VIA REMARKABLE SUPREME COURT JUDGMENTS Adi CHEN*

I. II.

III.

IV.

V.

Introduction Three Approaches in the District and Family Courts for Determining the Validity of a Civil Marriage Performed Abroad between Citizens who Are also Residents of Israel A. The First Approach B. The Second Approach C. The Third Approach Specific Rules Applicable to Exceptional Matters A. Registration of a Marriage B. Polygamy C. Dissolution of a Marriage The Israel Supreme Court Judgments that Opened the Path to Secularisation of Family Law A. The First Step: The Supreme Court Determined the Concept of Civil Maintenance – A New Kind of Maintenance in Israel B. The Second Step: The Israel Supreme Court Recognised the Validity of Civil Marriage between Jewish Couples who Are Citizens and also Residents of Israel, in Accordance with the Noahide Laws C. The Third Step: For the Purpose of Spousal Inheritance Rights, the Israel Supreme Court Recognised the Validity of Intermarriage when One Spouse Is a Jewish Citizen and Resident of Israel D. The Fourth Step: The Israel Supreme Court Ruled on the Registration of Same-Sex Marriages in the Israel Population Registry E. The Fifth Step: The Civil Union Law for the Religiously Unaffiliated – 2010 The Rights of a Spouse Arising from an Invalid Marriage or from a Marriage of Undetermined Validity A. Civil Maintenance

* Lecturer, The Academic Center for Law and Science; Israeli attorney with expertise in Family, Succession, and Private International Law; Chairperson, Committee for the Rights of the Child; Chairperson, Committee for Adoption and Surrogacy – the Israel Bar Association. I would like to thank Dr. Ilaria Pretelli for her very kind management of the editing, and her professional suggestions and constructive remarks. Thanks also to Dr. Alberto Aronovitz for his helpful comments.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 353-376 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Adi Chen

VI.

B. Matrimonial Property C. Inheritance D. Maintenance from the Estate Conclusions

In Israel marriage and divorce are governed only by religious laws. Civil marriage is not addressed in legislation, and cannot be performed in Israel. This continues despite the fact that each year an increasing number of individuals who are both citizens and residents of Israel marry abroad in civil marriages, whether due to the restrictions of religious law that prevent certain marriages (such as intermarriage) or due to an individual preference for civil marriage to avoid being bound by religious laws. Although many legislative proposals for the establishment of civil marriage in Israel have been submitted throughout the years to the Knesset (the Israel legislature), they have not been enacted into law due to objections from religious political parties. The desires to maintain the status quo in Israel and to avoid divisiveness between the religious and secular communities are the real reasons for a lack of legislative progress in this matter. The silence of the legislator posed a challenge for the Supreme Court of Israel in addressing the matter of civil marriage entered into abroad by Israeli citizens and residents. It needed to consider the fundamental right of freedom, the human dignity of spouses, the constitutional right to marriage and to family life, and the obligation of respect for the family unit. In addition, it needed to deal with the seemingly conflicting desires to not only respond to the local population seeking civil marriage, but also to maintain the status quo. This article provides a step-by-step presentation of the bold and outstanding initiatives taken by the Supreme Court over more than a decade in order to meet that challenge, even at the cost of conflicting judicial decisions. The court provided for (i) creation of a new type of spousal support referred to as “civil maintenance”; (ii) recognition of civil marriage performed abroad between Jewish citizens and residents of Israel who are not restricted by religious law from marrying each other; (iii) recognition of intermarriage for the purpose of inheritance rights when one of the spouses is a Jewish citizen and resident of Israel; and (iv) registration of a same-sex couple as a married couple in the Population Registry. The very positive steps taken by the Supreme Court brought about a significant change in Israeli family law, undoubtedly secularising and modernising what had always been considered outdated, since it was subject to religious law. The Civil Union Law for the Religiously Unaffiliated – 2010 provides clear evidence of the outstanding contribution of the Supreme Court in this field. However, these steps do not completely resolve all the issues. As seen in the current article, although Israel provides extensive rights to reputed spouses so that the absence of marriage is not detrimental to their rights, the decisions of the Supreme Court do not give a broad response to the entire population with respect to civil marriage. Although the road to complete regulation is still very long, the initial step is certainly of utmost significance. 354

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Secularisation of Private International Family Law in Israel

I.

Introduction

Israel does not provide for civil marriage, and marriage is performed exclusively in accordance with religious laws. In each of the recognised local religious communities,1 its respective religious law applies to marriage and divorce. For example, Section 2 of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law – 1953 sets forth that “Marriage and divorce of Jews will be performed in Israel according to Jewish religious law,” so that, in Israel, a civil marriage cannot take place at all. It must be emphasised that the phenomenon of civil marriage in which both spouses or only one of them is Jewish (the latter also referred to as “an intermarriage”) is an inseparable part of the Israeli reality. The reason for this is that Israel is a country that receives Jewish immigrants, their spouses and their families from all over the world. Most of the married Jewish immigrants, for example some of those who emigrated from the former Soviet Union, were married in civil marriages abroad, including among them a large number of intermarriages. These marriages are recognised in Israel without any difficulty. A civil marriage is recognised in Israel when it was performed outside of the country between spouses who were foreign nationals at the time of the marriage ceremony. Article 64(ii) of The Palestine Order in Council – 1922 states, “The personal law shall be the law of the nationality of the foreigner concerned unless that law imports the law of his domicile, in which case the latter shall be applied.” The leading decision of Skornik v. Skornik2 addressed whether the applicable law for determining the validity of a marriage is the national law on the date 1 The original version of The Palestine Order in Council – 1922 did not have a listing of recognised religious communities. The list appeared only the following year in the First Schedule to the Succession Ordinance – 1923, which included 10 recognised religious communities: the Jewish community and nine Christian communities. Afterwards, a 1939 legislative amendment to The Palestine Order in Council (in its Second Schedule), repeated the listing of the 10 communities in the First Schedule to the Succession Ordinance. The Druze community was later also listed in the First Schedule to the Succession Ordinance (4/6/1963). During the following years, the Evangelical Episcopal community in Israel and the Baha’i community were added to the listing in the Second Schedule to The Palestine Order in Council. With regard to Israeli citizens who do not belong to a recognised religious community, no applicable personal law applies. For further details, see M. SHAVA, Matters of Personal Status of Israeli Citizens not Belonging to a Recognized Religious Community, in Y. DINSTEIN (ed.), Yearbook of Human Rights, Vol. 11, The Hague: Kluwer Law International, 1989, 238. 2 CA 191/51 Skornik v. Skornik, 8 PD 141 (1951) (Isr.). The case concerned Jewish citizens and residents of Poland who entered into a civil marriage, in accordance with local Polish law. The three Supreme Court justices who decided the case determined that the applicable law was the Polish law, which validated the marriage, while each of them reached this conclusion based on a different legal analysis. For a broad and in-depth discussion of the Skornik ruling, and for the different opinions of the Supreme Court Justices Agranat, Olshan and Witkon, see Y. COHEN, Recognition or Non-Recognition of Foreign Civil Marriages in Israel, this Yearbook, Vol. 18, 2016/2017, 321, 327; M. SHAVA, Civil Marriages Celebrated Abroad :Validity In Israel, 9 Tel Aviv University Studies in Law, 1989, 311-346.

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Adi Chen of the marriage ceremony or the national law on the date of filing the claim. The court ruled that it must examine the validity of a marriage in accordance with the national law of the couple at the time of the marriage ceremony. If the marriage is valid according to the national law at that time, the court must recognise its validity, even if the marriage is invalid in Israel under religious law.3 In other words, the Skornik ruling determines that from the time that the parties acquire the status of a married couple under their national law, any subsequent change in their personal law due to a change in their citizenship will not cancel that marital status. Accordingly, the court is required to reach a similar conclusion even if one of the spouses is Jewish.4 However, such an intermarriage is invalid under the spouse’s Jewish religious law, while the national law at the time of the marriage recognises the marriage of both spouses.5 Thus, civil marriages of couples who immigrated to Israel from different countries are recognised even if they are intermarriages, provided such marriages do not conflict with Israeli external public policy (as, for instance, a marriage between a 12-year-old girl and a man who is 60). However, the difficulty arises when spouses both of whom are local citizens and residents enter into a civil marriage performed outside of Israel. Some choose civil marriage because their religious law imposes a marriage restriction that prohibits marriage of certain couples. For example, Jewish religious law does not allow a marriage between a Cohen6 and a divorcee. It also prohibits certain other marriages, such as an intermarriage between a Jewish woman and a non-Jewish man. Other individuals prefer civil marriages because of a strong aversion to religious laws or their implications in matters of marriage. As indicated above, a civil marriage cannot take place in Israel at all. In order to overcome these barriers, the only way to be married in a civil ceremony is to marry outside of Israel, in a country that recognises the validity of civil marriages under its laws. As a result, increasing numbers of Israeli Jewish couples travel abroad in order to marry in a civil ceremony that is valid according to the laws of the country in which it takes place.7 Perhaps somewhat surprisingly, up until more than one decade ago the Supreme Court decisions did not discuss the question of how to examine the validity of a civil marriage performed abroad between citizens who are also residents of Israel.8 Until that time, the court decided not to rule on the issue, leaving it to the legislature. It is a sensitive, complex and controversial question See M. SHAVA, (note 2), p. 329. See in detail, M. SHAVA, The Personal Law in Israel, Vol. 1, 4th edn., 2001, p. 80, the text next to note 19. 5 CA 566/81 Shmuel v. Shmuel, 39(4) PD 399, 403 (1985) (Isr.) in which the marriage of a Hindu man and a Jewish woman was recognised according to Indian law, the national law of the parties at the time the marriage ceremony was performed. 6 A Cohen is a descendant of the ancient priestly clan. 7 B. MENASHE, Civil Marriages, 1988, 9-11. 8 This question is necessarily brought before a civil court in Israel both directly and indirectly, for example in a claim for maintenance or any other claim requiring prior determination of the validity of a marriage. 3 4

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Secularisation of Private International Family Law in Israel involving matters of “religion and State” and affecting both the status quo in the country and an entire population of local residents.9

II.

Three Approaches in the District and Family Courts for Determining the Validity of a Civil Marriage Performed Abroad between Citizens who Are also Residents of Israel

The silence of the Israeli legislator, together with the lack of Supreme Court decisions, resulted in contrasting opinions among the District Court and Family Court judges. This brought about conflicting judicial decisions regarding the validity of a civil marriage performed outside the country between spouses who are citizens and residents of Israel. These decisions reflect three different approaches of the District and Family Courts. A.

The First Approach

Some judges ruled that without a specific provision of law determining choice of law, the English rules of private international law are applicable. These rules, which are part of English Common Law, were adopted in Israel through Article 46 of The Palestine Order in Council – 1922.10 The English rules of private international law distinguish between the question of the validity of a marriage from the perspectives of form (formal validity) and of legal capacity to marry (essential validity). With regard to formal validity, the applicable law is the law of the place in which the marriage ceremony took place (lex loci celebrationis). From the perspective of essential validity, the applicable law is the law of the domicile of the spouses at the time the marriage ceremony was performed (lex domicilii). When the spouses do not have the same domicile, the English rules of private interna9 CA 8256/99 Plonit v. Ploni, 58(2) PD 213 (2003) (Isr.) (hereinafter: Plonit); HCJ 51/80 Cohen v. The Rabbinical Court, 35(2) PD 8, 10 (1980) (Isr.). 10 Article 46 applies the English Common Law, which includes the principles of private international law. The Foundations of Law Act – 1980 stipulates in Section 2(b) that cancelling Article 46 of The Palestine Order in Council – 1922 “shall not derogate from the law which was accepted into Israel before the coming into force of this law.” However, following the abrogation cancelling of Article 46, questions are liable to arise regarding the continued use of the rules of English private international law by the civil courts in matters of personal status of local citizens, when precedents have not yet been set by the courts. See A. LEVONTINE/ H. GOLDWATER, The Choice-of-Law Rules in Israel and Article 46 of the Palestine Order in Council, Jerusalem, 1974, 16-17 (in Hebrew). For The Palestine Order in Council of 1922 see https://unispal.un.org/DPA/DPR/unispal.nsf/0/C7AAE196F41AA0 55052565F50054E656 and the comment by DICEY & MORRIS, Conflict of Laws, 13th edn., 2000, 651, 675.

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Adi Chen tional law determine that the applicable law is the law of the place where the marriage took place. Therefore, when the religious personal law of Jewish citizens who are residents of Israel determines that a couple is not prevented from marrying according to religious law, the validity of the “form of the marriage” (the civil ceremony) is examined according to the law of the place in which the marriage was performed. The result of this approach is that Israeli law recognises the validity of the marriage when the couple has the legal capacity to marry each other under religious law, provided the civil marriage ceremony reflects a valid form of marriage where it took place. The court also recognises related marital rights, such as the right of maintenance (hereinafter: “the first approach”). 11 B.

The Second Approach

Other judges ruled that a civil marriage performed abroad between Jewish citizens and residents of Israel is not valid in light of Article 47 of The Palestine Order in Council – 1922,12 which is an integral part of the rules of private international law in Israel. Under this approach, the validity of the marriage should be reviewed according to the personal law without distinguishing between essential capacity and formal validity. This provision relates to the question of choice of law and instructs the civil court to examine the validity of a marriage according to personal law. The personal law is the religious law applicable to a local citizen and resident who is affiliated with a recognised religious community. Thus, for Jews the Jewish religious law is the applicable law.13 With regard to the Jewish community, their religious law provides for becoming married only through “money” or “deed” ceremonies, or by sexual intercourse. It does not distinguish between the form of the marriage and the legal capacity to marry. Civil marriages are invalid, regardless of whether under religious law the parties have the capacity to marry each other or not. In accordance with this approach the courts refused to recognise the validity of marriages.14 The results in these decisions were unfortunate because the right of a wife to maintenance was denied when the parties did not have an express or implied agreement setting forth their rights (hereinafter: “the second approach”).15 The first approach was expressed by Justice Witkon in the case of Skornik, above, (note 2), 164-165. See the in-depth discussion by M. SHAVA (note 2), 327-335. 12 See Article 47 of The Palestine Order in Council, “The Civil Courts shall further have jurisdiction, subject to the provisions contained in this Part of this Order, in matters of personal status as defined in Article 51 of persons in Israel. Such jurisdiction shall be exercised in conformity with any law, Ordinances or regulations that may here after be applied or enacted and subject there to according to the personal law applicable.” 13 This is the religious law with respect to a local citizen who is affiliated with a recognised religious community. This was determined in the case law since the Palestine Order in Council does not define “personal law.” See CA 26/5 Kutik v. Wolfson, 5 PD 1341, 1345 (1951) (Isr.). 14 The second approach was expressed by Justice Agranat in Skornik (note 2), 164-169. See cited, SHAVA (note 4), 329-330. 15 See, for example, Family File (Tel-Aviv) 1044/99 Plonit v. Ploni (unpublished). 11

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The Third Approach

In contrast to the judges who preferred one of the approaches described above, some judges refused to determine the matter and preferred that it remain for consideration by the legislator.16

III. Specific Rules Applicable to Exceptional Matters Before presenting the Supreme Court decisions endorsing a prospective secularisation of family law, it is essential to emphasise that, regardless of the validity of a civil marriage, certain specific effects may be recognised in Israel.17 These rules are established in special legislation and in Supreme Court decisions. They concern matters including (a) registration of a marriage in the Population Registry; (b) the offence of polygamy; and (c) dissolution of a marriage. The rules reflect the protection given by the State of Israel to certain aspects of civil marriage in order to protect the married spouses as well as the general public. A.

Registration of a Marriage

In Israel, no difficulty arises with respect to the registration of civil marriage in the Israel Population Registry. According to the leading judgment, Funk-Schlesinger v. The Minister of the Interior,18 a civil marriage will be recorded in the registry even if the marriage is not valid according to the choice of law rules applicable in Israel. For the purpose of registration as a married couple, it is sufficient that they submit to the registry clerk prima facie evidence that a marriage ceremony was performed, regardless of whether or not the marriage is valid under Israeli law. Although the registry clerk has an administrative function of gathering statistical information for registry management, the determination of validity of a marriage is

16 See Request to Appeal 7248/99 Plonit v. Ploni (unpublished); Request to Appeal 1297/00 Cohen v. Cohen (unpublished). 17 See I. PRETELLI, Équivalence et reconnaissance du statut civil des personnes faisant ménage à deux, Studi in onore di Angelo Davì, in press, stating that "conflicts of laws arising from the difficulty of recognising unions which do not correspond to the family model enshrined in the law of the forum, and therefore heterodox in relation to those of the forum, are only resolved by imperfect compromises, involving the recognition of certain effects of the union, but not others" (translation from French provided by the author) and ID., in A. BONOMI/ P. WAUTELET with I. PRETELLI, Le droit européen des successions, 2ème éd., 2016, at 640. 18 HCJ 143/62 Funk-Schlesinger v. The Minister of the Interior, 17 PD 225 (1963) (Isr.), A. CHEN, Conflict of Laws, Conflict of Mores and External Public Policy in Israel: Registration and Recognition of Foreign Divorce Decrees – A Modern Critique, this Yearbook, Vol. 12, 2010, 531, 534, Y. COHEN (note 2) at 325-327.

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Adi Chen not within his authority or administrative function. The registry clerk must register the information that the citizen provides, unless it is manifestly incorrect.19 Thus, there is no assurance as to the accuracy of the information in the registry and its registration does not constitute any evidence of the validity of a marriage.20 However, the significance of the registration of a marriage should not be minimised. It enables the authorities of the State of Israel to grant rights related to personal status, unless the court refuses to recognise the validity of a marriage. B.

Polygamy

The Israel Penal Law – 1977, criminalises bigamy. Section 176 of the law sets forth that “A married man who marries another woman, or a married woman who marries another man, is liable to five years imprisonment.” With respect to criminal conviction for polygamy, it is sufficient that the previous marriage is valid according to the law of the country in which it was performed or according to the religious law under which it was performed,21 regardless of whether or not the new marriage is valid according to the choice of law rules applicable in Israel.22 In order to prevent violation of the law against polygamy, a spouse must be granted a final judgment of dissolution of an earlier marriage before entering into a new marriage.23 The Israeli law thus protects the prior civil marriage, even if it is invalid according to the local choice of law rules. The previous marriage will always be an obstacle to performing a new marriage, as long as it is not dissolved by an authorised court. C.

Dissolution of a Marriage

When the previous marriage is an intermarriage or even when no religious court in Israel is exclusively authorised to dissolve the marriage, the spouse must dissolve the previous marriage in accordance with the Matters of Dissolution of Marriage (Jurisdiction in Special Cases and International Jurisdiction) Law – 1969.24 This law provides a broad definition of the term “dissolution of marriage” which

Funk-Schlesinger, (note 18) at 244. Section 3 of the Population Registry Law – 1965 sets forth that registration in the Population Registry with regard to nationality, religion, personal status and being a spouse will not be prima facie evidence of its correctness. 21 Section 178(1) of the Penal Law – 1977. 22 Section 178(2) of the Penal Law – 1977. 23 Section 177 of the Penal Law – 1977. 24 Section 1 of the Matters of Dissolution of Marriage, (Jurisdiction in Special Cases and International Jurisdiction) Law – 1969. 19 20

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Secularisation of Private International Family Law in Israel includes divorce, annulment and certification that a marriage is intrinsically invalid.25 The choice of law rules in this law with regard to the dissolution of marriage differ entirely from those applicable to determining the validity of civil marriage entered into abroad by citizens who are residents of Israel. Thus, the provisions serve as strong additional evidence of the protection granted by Israeli law to civil marriages, even though they cannot be performed in Israel.26

IV. The Israel Supreme Court Judgments that Opened the Path to Secularisation of Family Law As further illustrated below, the silence of the legislator with respect to the recognition of civil marriage posed a challenge for the Israel Supreme Court in addressing this issue. In a number of significant decisions, the court transformed and secularised Israeli family law with respect to the fundamental right of freedom, the human dignity of spouses, the constitutional right to marriage and to family life, and the obligation of respect for the family unit. Notwithstanding these positive court decisions, the present legislative situation in Israel must be resolved. An increasing number of Jewish citizens who are also residents of Israel currently ask to enter into civil marriages outside of Israel under foreign law that does not fundamentally conflict with Israeli public policy. The following considers four crucial Supreme Court decisions which entirely altered the approach to recognition of civil marriage entered into abroad by Israeli citizens who are residents of Israel. Consequently, an additional small step was also taken by the legislator in order to respond to the population of the religiously unaffiliated who enter into civil marriages. All of these steps indicate a clear tendency to resolve the difficulty faced by many couples in Israel who enter civil marriages abroad, whether by choice or due to the restrictions of religious law. A.

The First Step: The Supreme Court Determined the Concept of Civil Maintenance – A New Kind of Maintenance in Israel

The first and extremely important step was due to a wise and remarkable decision in the matter of Plonit v. Ploni27 that was given in 2003. In this case, the Supreme Court of Israel intentionally avoided discussing the sensitive question of recognising the validity of a civil marriage performed abroad between citizens who are also Section 6 of the Matters of Dissolution of Marriage, (Jurisdiction in Special Cases and International Jurisdiction) Law – 1969. 26 Section 5 of the Matters of Dissolution of Marriage, (Jurisdiction in Special Cases and International Jurisdiction) Law – 1969. 27 Plonit (note 9). 25

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Adi Chen residents of Israel. However, and for the first time, the court determined the concept of “civil maintenance” on the basis of contract law. That case concerned a Jewish couple, citizens and residents of Israel, who entered into a civil marriage in Cyprus although they were not prevented from marrying in Israel according to their Jewish religious law. Following a dispute between the couple, the wife submitted a maintenance claim to the Family Court. Her claim was rejected solely on the basis of marital status. The marriage was not recognised since its validity was examined according to the second approach, which applies the personal law. The applicable law was the Jewish religious law, since the couple belonged to the Jewish community.28 The wife’s appeal against the Family Court decision was rejected by the District Court. Both the Family Court and the District Court focused only on the question of the validity of the marriage. They did not determine anything concerning the relationship between the couple or any relevant facts. These courts did not examine the extent of the wife’s needs in comparison with the husband’s ability to provide for her, because they found it irrelevant for the purpose of determining entitlement to maintenance. The District Court even added that it is inappropriate for the court to especially seek a solution for the wife, because the parties could have entered into an agreement resolving maintenance and property matters, but they had not done so.29 The wife submitted an appeal to the Supreme Court against the district court decision in her maintenance claim. The court granted her appeal and for the first time in Israel determined the husband’s obligation for civil maintenance. The Supreme Court based its discussion solely upon contract law. It held that the fact that the parties did not have an express written agreement regarding maintenance does not necessarily lead to the conclusion that they did not have an implied agreement entitling the appellant to maintenance. Chief Justice Barak determined that an agreement for civil marriage may under certain circumstances bring about civil obligations for maintenance. Such obligations arise from the civil meaning given by the court to the factual relationship between the parties.30 Accordingly, the civil status following the marriage and the civil relationship between the parties are separate matters. The existence or lack of recognition of the marriage does not necessarily determine the existence or lack of civil obligations between the parties. Therefore, even if the marriage and consequently the maintenance or other rights arising from it are not recognised, the civil rights that are not dependent upon and do not arise from the marriage continue to exist on the basis of the civil law.31 The Supreme Court based the entitlement to civil maintenance on an implied agreement between the spouses. The wedding ceremony creates the agreement, while the court determines its content by using the principle of “good faith” and without deciding upon the validity of a civil marriage under Israeli private international law. 28 See the text, above, next to notes 12-15 with respect to Section B. The Second Approach. 29 Plonit (note 9), 212. 30 Id, 224. 31 Id, 224-225.

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Secularisation of Private International Family Law in Israel The examination of the entitlements and obligations of the spouses with respect to maintenance and support, on the basis of contract law instead of the laws of personal status, redesigns the new family laws in Israel. This is due to the special character of contract laws that limit the freedom of contracts, intervene in their content, and in certain circumstances even determine that they are void.32 In this case, the Supreme Court implemented the principle of “good faith” as a technique intended to reflect the contractual fairness between the spouses by requiring the recognition of rights and obligations that continue the patterns of the couple’s behaviour. The court views these patterns as being based on the desire of a couple to formalise their relationship by civil marriage, similar to the relationship between a couple that enters into a religious marriage, and to reject the behaviour of one spouse who seeks to enforce his rights by ignoring both the interest of the other spouse and the interest of society. It is very important to emphasise that civil maintenance is substantially different from religious maintenance in content and purpose. One of the significant changes is reflected in the establishment of the value of gender equality. While religious maintenance is an obligation only of the husband until the time of divorce and as long as the right of the woman to maintenance has not been cancelled,33 civil maintenance reflects values of fairness, good faith and equality. When justified by the circumstances, the obligation will be placed upon one of the spouses without gender differentiation – either the husband or the wife. In other words, not only does a husband have an obligation to provide maintenance for his wife, but a wife also has an obligation to provide maintenance for her husband!34 Civil maintenance is intended to provide for the economic support of the weaker spouse, possibly for a specific period of time following the period of physical separation or divorce, in order to enable that spouse’s prompt rehabilitation. It is not limited to the period until the time of the divorce, so that the standard of living to which that spouse was accustomed may be maintained.35 Furthermore, the physical separation of the parties does not end the economic obligation between them, especially in cases of clear economic dependence of one of the spouses upon the other. Civil maintenance prevents the undesirable outcome in which many women must remain with their husbands in order to survive and because of the fear of suffering economic harm through divorce.

Section 30 of the Contracts (General Part) Law – 1973 determines that a contract, the signing, contents or purpose of which are illegal, immoral or conflict with public policy is void. In this connection, the judgment unambiguously determines that a contract to enter a civil marriage outside of the State of Israel between a Jewish couple who are citizens and residents of the State of Israel, and a contract for civil maintenance are not contrary to public policy in Israel. See Plonit (note 9), 228-229. 33 An example is the case of adultery. With regard to spousal maintenance for the wife see B.Z. SHARSHEVSKy, Family Law, (1993), 106 et seq. 34 The matter of Plonit (note 9), 234 (paragraph 25). 35 Id, 232-234. With respect to the considerations of fairness, equality, concern for children, etc., see SH. LIFSHITZ, Married Against Their Will? A Liberal Analysis of the Legal Aspect of Cohabitation, 25 Tel-Aviv Un. Law Rev., 2002, 741. 32

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Adi Chen The amount and period of civil maintenance, and the reasons that negate eligibility for maintenance, will be determined according to the principle of good faith. They will also be subject to the requirements of honesty and the considerations of fairness and justice in Israeli society.36 The payment of civil maintenance depends upon the particular circumstances in each case, the needs and ability of each of the spouses, the behaviour of the parties, their economic situation, support provided by subsequent spouses, and any other facts relevant to the principles of good faith, honesty and fairness in contract law.37 Clearly, this first step that establishes civil maintenance as set forth in the Plonit judgment is a significant contribution to the development of modern and secular family law in Israel. B.

The Second Step: The Israel Supreme Court Recognised the Validity of Civil Marriage between Jewish Couples who Are Citizens and also Residents of Israel, in Accordance with the Noahide Laws

The second step was taken in November 2006, in the matter of A v. Tel-Aviv Rabbinical Court.38 The decision was given by Chief Justice Aharon Barak shortly before he retired from the Israel Supreme Court. The petition to the court concerned a couple who were Jewish citizens and residents of Israel. Although they were not restricted by religious law from marrying each other, the couple had entered into a civil marriage outside of Israel. The petition was submitted to the High Court of Justice against a Rabbinical Court decision. It had ruled that according to Section 1 of the Rabbinical Courts Jurisdiction (Marriage and Divorce) Law – 195339 the only court competent to dissolve a marriage was the religious Rabbinical Court, and not the civil Family Court. The petitioner argued that, since the case did not concern a religious marriage but a civil marriage performed outside of Israel, the Rabbinical Court did not have the judicial authority to dissolve it. Thus, the entire purpose of this petition was for the High Court of Justice to determine the competent court for dissolution of the civil marriage. The Supreme Court decision in this case is one of its most remarkable decisions ever given in family law, and it reflects a most unexpected, significant and historic change. The Supreme Court viewed the recognition of civil marriage very differently from its preceding decisions. For the first time since the establishment of the State of Israel, the Supreme Court recognised the validity of civil marriage under these circumstances by referring to religious principles. Chief Justice Barak, with whom Justices Hayut and Naor concurred, followed an approach

The matter of Plonit, id, 233-236. The matter of Plonit, id, 234-235. 38 HCJ 2232/03 A v. Tel- Aviv Rabbinical Court (given on 21 December 2006) hereinafter: – HCJ A v. Tel-Aviv Rabbinical Court. 39 Section 1 provides, “Matters of marriage and divorce of Jews in Israel who are citizens and residents of the State shall be in the sole jurisdiction of the Rabbinical Courts.” 36 37

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Secularisation of Private International Family Law in Israel that will be referred to as the first approach.40 He determined that the validity of a civil marriage performed outside of Israel between two Jewish spouses, even if they were citizens and residents of Israel, would be examined according to the English common law rules of private international law, adopted in Israel from the English law through Article 46 of The Palestine Order in Council – 1922. According to these rules, such a marriage is valid from both the external perspective of the formal validity of the marriage, and from the internal perspective of its essential validity. With regard to the formal validity of the marriage, the applicable law is the law of the place in which the marriage took place, while with regard to its essential validity, the applicable law is the personal law of the parties. The Jewish religious law was the personal law of the couple, since both spouses were Jewish citizens and residents of Israel. Interestingly, the basis and inspiration for this Supreme Court decision are found in the Great Rabbinical Court decision in the same case. The Rabbinical Court recognised the validity of the marriage only from the “external perspective” of the civil marriage between Jews who are allowed by their religious law to marry each other. Such recognition is based upon the Noahide Laws.41 These laws were developed in Jewish law, from moral rules. They determine that the marriage is valid from the external perspective vis-à-vis the entire world. This means that: (1) The spouses are not considered unmarried; (2) without dissolution of the marriage, the spouses are not allowed to remarry; and (3) remarriage would be bigamy, which is prohibited by law. However, with regard to the internal relationship between the spouses, the marriage is invalid and no mutual rights and obligations arise from the marriage. In contrast to the external perspective that was examined on the basis of the Noahide Laws, the internal perspective was examined under Jewish religious law. It determines that the marriage is valid only for the purpose of divorce “according to the Noahide Laws” and does not grant the couple any rights. Chief Justice Barak saw in this Great Rabbinical Court decision an important contribution to the development of marriage laws in Israel. It is consistent with the first approach as discussed above, according to which the civil marriage is valid.42 The first approach and the decision of the Great Rabbinical Court recognise the validity of the marriage under Israeli law and the necessity of a divorce in order to end the marriage. With respect to the difference between them concerning the internal relationship between the spouses and their mutual obligations, Chief Justice Barak determined that this difference does not negate the existence of a civil relationship between the spouses, arising from the application of private international law. Accordingly, civil marriage performed outside of Israel between See the text that refers to footnotes 10-11 with regard to Section A: The “First Approach”. 41 The Noahide laws are, according to Jewish law, those that govern all the Children of Noah, i.e., all human beings. See S.L. STONE, Religion and State: Models of Separation from within Jewish Law, 6 International Journal of Constitutional Law, 2008, 631-661. For a discussion of these laws, see S. BERMAN, The Principles of Jewish Law, M. Elon, Ed., 1975, 708-710. 42 See above, the text preceding footnotes 10-11, with respect to the first approach. 40

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Adi Chen Jewish spouses who are residents and citizens of Israel, and are unrestricted by religious law from marrying each other, is recognised in Israel as a valid marriage.43 With respect to the jurisdiction for dissolution of a civil marriage between Jews, the Supreme Court ruled that the Rabbinical Court is the exclusive competent court. However, in contrast to the religious law, there is no need to show fault or grounds for divorce. It is sufficient that one of the spouses requests divorce. The remaining civil matters between the couple, such as matrimonial property, should be brought before the civil court, which is the Family Court. Furthermore, Chief Justice Barak recommended that issues concerning custody of minors should also be heard by the Family Court. In this decision, Chief Justice Barak appears to reject the second approach, which does not recognise civil marriage of citizens who are residents of Israel.44 As indicated above, the second approach examines the validity of a marriage according to the personal law of the parties (under Article 47 of The Palestine Order in Council – 1922 at the time of the marriage, (in accordance with the Skornik ruling). When considering Jewish spouses who were both citizens and residents of Israel at the time of their marriage, their personal law is the religious law – Jewish law, which does not recognise the validity of civil marriage. Nevertheless, according to Chief Justice Barak, Article 47 of The Palestine Order in Council – 1922 is a rule of municipal internal law that is customarily subject to the rules of private international law. Therefore, the second approach is rejected in favour of the first. Chief Justice Barak’s opinion is firmly based on the human dignity of each of the spouses, the constitutional right to marriage and to family life, and the obligation of respect for the family unit.45 The willingness to recognise the validity of the status obtained under foreign law by Jewish citizens who are residents of Israel, when it does not conflict with Israeli public policy, served as an additional basis for preferring the first approach, which recognises the validity of the marriage. Chief Justice Barak added that the result in his decision is also necessary in light of the reality of life in Israel, in which an increasing number of Jewish citizens who are also residents request to enter into civil marriages outside of Israel. However, Chief Justice Barak emphasised in his decision that the recognition of the validity of civil marriage is limited only to a civil marriage that took place (i) in the actual presence of the couple (thus excluding a marriage that was performed through an agent such as in a Paraguay marriage);46 (ii) between spouses who have the capacity to marry each other according to religious law; and (iii) in a marriage ceremony recognised by a foreign legal system.47 Therefore, the limited application of the decision does not resolve the matter of individuals who are restricted by religious law from marrying each other, such as a Cohen and a divorcee, or couples who belong to different religions and seek to intermarry. HCJ A v. Tel-Aviv Rabbinical Court, supra (note 38), paragraphs 27-28. See the text preceding footnotes 12-15, with regard to the second approach. 45 HCJ A v. Tel-Aviv Rabbinical Court, supra (note 38) in paragraph 26 of the decision. 46 HCJ A v. Tel-Aviv Rabbinical Court, id, in paragraph 24. 47 HCJ A v. Tel-Aviv Rabbinical Court, id, in paragraph 26. 43 44

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Secularisation of Private International Family Law in Israel Ostensibly, the opinion of Chief Justice Barak is obiter and not ratio decidendi because the petition concerned the question of the competent court for dissolution of a civil marriage, while the discussion of the validity of the marriage was unnecessary. Therefore, in the determination of the authorised court for dissolution of the civil marriage, the discussion and decision regarding the validity of the civil marriage were not required. Nevertheless, the actual decision concerning the validity of the marriage despite all the sensitivity and difficulties involved, shows the clear intention of the Israel Supreme Court to determine a binding precedent that recognises the validity of civil marriage under the circumstances in that judgment. The A v. Tel- Aviv Rabbinical Court ruling is undoubtedly regarded as binding, as seen in later Supreme Court decisions which do not argue that the opinion of Chief Justice Barak is obiter in this decision.48 C.

The Third Step: For the Purpose of Spousal Inheritance Rights, the Israel Supreme Court Recognised the Validity of Intermarriage when One Spouse Is a Jewish Citizen and Resident of Israel

One of the most problematic and complex issues in Israeli family law concerns recognition of the validity of intermarriage between one spouse who is a Jewish citizen and resident of Israel, and another who is not Jewish. The real difficulty is actually not a legal one, but rather its classification as involving matters of religion and State. There are undoubtedly many broad implications of recognising the validity of intermarriage in which one of the spouses is a Jewish citizen and resident of Israel. It involves considerations related to national social policy, primarily with respect to the State of Israel as a Jewish state and the future of the Jewish people. First and foremost is the concern for preservation of the status quo and prevention of divisiveness between the religious and secular communities. This consideration explains why today no law in Israel provides for civil marriage between members of different religions when one spouse is a Jewish citizen and resident of Israel. In order to consider the validity of a marriage, the question that first needs to be considered is whether it should be examined according to the law of the location in which the marriage took place, the rules of English private international law, or the personal law of the spouses. (With respect to a local citizen and resident of Israel, the personal law is his religious law.) Each of the laws referenced above certainly brings about a different result.49 Actually, the Israel Supreme Court has not yet given a decision, in principle, as to which law should be applied in examining the validity of intermarriage in such a case. Therefore, the general issue of the validity of intermarriage remains undetermined.

48 See the decision of Justice Rubinstein in FA 9607/03, Ploni v. Plonit 61(3) PD 726 (2006) (Isr.) (footnote 44). Hereinafter Ploni 9607/03 49 See an in-depth analytical discussion by Prof. SHAVA, Personal Law in Israel, (note 4), pp. 623-652 and the references there.

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Adi Chen Nevertheless, in November 2006, in an obiter dictum given by Chief Justice Barak in the matter of Ploni v. Plonit50 the Israel Supreme Court took a third exceptional step in this complex and sensitive issue. In this case, Chief Justice Barak recommended recognising the validity of an intermarriage celebrated in Romania between a Romanian Christian woman and a Jewish man who is a citizen and resident of Israel, provided that: (i) the marriage is valid under Romanian law, which is the lex loci; and (ii) that application of the foreign law does not conflict with Israeli external public policy.51 However, the recognition of the civil intermarriage in this case was restricted only to the specific purpose of eligibility for spousal inheritance under Israel’s Succession Law – 1965, in order to fulfil the appellant’s right to spousal inheritance.52 Chief Justice Barak held that the interpretation of the Succession Law – 1965, necessarily leads to the conclusion that in section 11 of that law, which pertains to spousal inheritance rights, the term “spouse” also includes someone who had been married to the deceased outside of Israel, in a civil marriage that was valid where the marriage ceremony was performed.53 In his recommendation to apply the law of the location where the marriage took place to the question of the validity of the marriage, Chief Justice Barak based his opinion on a side note of Justice Sussman in the Funk-Schlesinger54 judgment. Justice Sussman suggested that in determining the validity of the marriage (with regard to both the capacity to marry and the formal validity of the marriage), the U.S. law that applies the law of the location where the marriage took place is preferable to the English common law rules of private international law. As stated, these rules distinguish between the validity of the marriage with regard to its form and the capacity of the spouses to marry each other. Thus, with respect to the question of the validity of intermarriage, Chief Justice Barak shifted his view and chose a new option, unlike his previous decisions that followed the first approach,55 based upon the English rules of private international law. He made this change despite the difficulties from the perspectives of The Palestine Order in Council – 1922, Israeli rules of choice of law and the harsh criticism arguing that it does not withstand the test of legal review.56

Ploni 9607/03 (note 48). Ploni 9607/03, id, paragraphs 22-23 in the opinion of Chief Justice Barak. 52 Ploni 9607/03, id 747. 53 Paragraph 21 in the opinion of Chief Justice Barak and Section 4 in the opinion of Justice Rubinstein. 54 Funk-Schlesinger, supra (note 18), 253-256. 55 See above, notes 10-11, and the text preceding the footnote with regard to the first approach. 56 The application of the law of the state in which the marriage took place has a basis in case law during the period of the British Mandate prior to the establishment of the State of Israel. However, the application of that law was subject to harsh criticism arguing that it does not withstand the test of legal review. It was argued that the rule which applies the law of the location of the marriage ceremony has no independent status in Israeli private international law, and it may be relied upon only when the personal law of the parties refers 50 51

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Secularisation of Private International Family Law in Israel Chief Justice Barak explained the reasons for his decision on the basis of: the need to provide a solution for intermarried couples; the legal reality in Israel that does not allow for members of different religions to marry in civil marriages; the constitutional right to family life in general and to marriage in particular; and the obligation to respect the family unit.57 Justice Grunis concurred with the opinion of Chief Justice Barak, while in the minority opinion Justice Rubinstein determined that since it is a complex, fundamental matter of principle, it should be determined by the legislator and not by the court.58 This Supreme Court decision illustrates its tendency to validate intermarriage even though it did not determine this issue. As mentioned above, in its decision the Supreme Court changed its usual approach of choice of law and chose to address a very sensitive subject by offering a new approach to examining the validity of the civil marriage. This decision knowingly created clear disharmony and lack of uniformity concerning the rules of choice of law for determining the validity of civil marriage. However, since the Israeli legislator does not provide for civil intermarriage, this result seems unavoidable. D.

The Fourth Step: The Israel Supreme Court Ruled on the Registration of Same-Sex Marriages in the Israel Population Registry

The fourth step taken by the Supreme Court in 2006 was the registration of samesex spouses as a married couple in the Israel Population Registry. In the case of Ben Ari v. Director of the Administration of Population, Ministry of the Interior59 the Supreme Court removed the legal obstacles preventing the registration of same-sex marriages performed outside Israel. In this case, five Israeli male couples who had entered into civil marriages in Toronto, Canada in accordance with Canadian law subsequently applied to be registered as married in Israel. The registry clerk refused to register the marriages, arguing that in order to be registered as a “married couple” in Israel, the marriage must be between a man and a woman. Other patterns of family unions, even if recognised abroad, do not fit the current concepts of Israeli law. As previously mentioned, marriage and divorce in Israel are governed only by religious laws. The religious laws forbid relationships between same-sex couples. Accordingly, a same-sex couple can only be regarded as a common law couple with certain legal rights such as financial and property rights, as well as adoption rights.60 Their relationship is not regarded either as a legal pattern of marriage or a family union. In this case, following the leading judgment in Funk-Schlesinger v. Minister of the Interior,61 the Supreme Court to it through Renvoi. See in detail SHAVA (note 4), 625-629; E. VITTA, The Conflict of laws in Matters of Personal Status in Palestine, 1947, 252. 57 Ploni 9607/03, supra note 48, paragraph 23 in the opinion of Chief Justice Barak. 58 Ibid, paragraph 8 in the opinion of Justice Rubinstein. 59 HCJ 3045/05, 61(3) 537 PD (2006) (Isr.). 60 HCJ 1779/99 Brenner Kaddish v. Minister of Interior, PD 54(2)368 (2000) (Isr.). 61 Funk-Schlesinger, (note 18).

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Adi Chen rejected these arguments presented by the state and held that the registration is only a matter of state statistics. The registry clerk at the Population Registry is not competent to examine the validity of a marriage unless such a registration would be manifestly incorrect. The “manifestly incorrect” exception did not apply in this case. However, the court emphasised that its decision related only to the question of registration. It did not adopt any position with regard to recognition in Israel of marriages that take place outside Israel between individuals of the same sex, whether or not they are Israeli residents.62 E.

The Fifth Step: The Civil Union Law for the Religiously Unaffiliated – 2010

The Supreme Court decisions undoubtedly brought about a positive change in family law and paved the way for the legislator to take a preliminary step for the civil regulation of marriage laws. In March of 2010 the Knesset, Israel’s legislative body, passed the Civil Union Law for the Religiously Unaffiliated. This law goes a long way towards formal recognition of civil relationships between spouses without any religious affiliation and for the first time grants formal legal status to a relationship without reference to any religious law. It regulates the civil aspects of the relationship such as registration, nominating registration, a database of the couples and dissolution of a civil union, including dissolution in cases of unresolved conflicts.63 However, the application of this law is very limited and restricted. It applies only to couples who are already registered in the Population Registry as religiously unaffiliated.64 As previously mentioned, these couples were unable to formalise their relationship in a religious marriage under Israeli law. With respect to the rest of the population, the law does not replace the marriage and divorce regulations or affect the jurisdiction of the religious courts.65 In particular, the law does not offer any solution to large portions of the population that cannot enter into religious marriages in Israel. Included among them, for example, are couples who have different religious affiliations or those who are not permitted to marry each other such as a man who is a Cohen and a woman who is a divorcee.66

Ben Ari (note 59), see also Y. COHEN (note 4) 336-339. Sections 2-8 of The Civil Union Law for the Religiously Unaffiliated – 2010 (the conditions for registration of the civil union); secs. 10-11 (dissolution) and sec. 13 (legal status). 64 Section 2 of The Civil Union Law for the Religiously Unaffiliated – 2010. 65 Section 14 of The Civil Union Law for the Religiously Unaffiliated – 2010. 66 See R. LIBOWITZ, A Hot Debate in the Knesset: “The Spousal Covenant Law – a Political Bluff” Nana10Online News, http://news.nana10.co.il/Article/?ArticleID= 704699&TypeID=1&sid=126, in Hebrew. 62 63

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V.

The Rights of a Spouse Arising from an Invalid Marriage or from a Marriage of Undetermined Validity

As shown above, the Supreme Court substantially changed its approach by recognising the validity of civil marriage with respect to local citizens who are not prevented from marrying under religious law. However, the difficulty was not resolved for those local citizens, such as a Cohen and a divorcee, who are not permitted by religious law to marry each other. A response has not yet been given to the local population that chooses civil marriage because of limitations imposed by the religious law. Furthermore, despite the clear tendency of the Supreme Court to recognise intermarriage between local citizens and residents for the purpose of inheritance rights, no positive ruling broadly recognises the validity of such intermarriage. When the civil court reaches the conclusion that a marriage is invalid according to the choice of law rules applicable in Israel, or when the court prefers to refrain from determining the validity of a marriage, the financial claims of either of the spouses will not necessarily be denied, leaving a spouse with nothing only because the validity of a marriage is not recognised. In accordance with the Plonit decision,67 marital status is separate from the rights that arise from it. Such separation is contrary to the rule that marital status is determined by the choice of law rules applicable under the legal system in the domicile country, which holds the exclusive authority to decide this matter.68 This approach promotes uniformity and universality, and should be recognised by every state as a matter of fact determinative in rem.69 Nevertheless, with respect to rights and obligations arising from marital status, for example the obligation of maintenance, the spouses can agree on the applicable law and the court will consider their contractual agreements. The separation between the marital status and the rights arising from it is also inconsistent with the rule that spouses cannot agree between themselves on the applicable law for determining marital status and thus invalidate a valid marriage or allow an invalid marriage.70 In justified circumstances, even when the court determines a marriage is invalid although the spouses have lived as husband and wife over an extended period of time and assumed that they were married, their financial rights can be established on the basis of other legal principles and rules. Included among such Plonit (note 9). It is assumed that the home State is the State most cognisant and informed of the status of its nationals. It is also assumed to have most control over their status since their lives are centred there, and the majority of their ties are to that state. With regard to the problems and doubts raised by this approach in a period of increased mobility, and the changes in the uniqueness of the link between the state of domicile and the state of residence, see C. WASSERSTEIN FASSBERG, Foreign Judgments in Israeli Law: Deconstruction and Reconstruction, 1996, p. 959 (fn 26), and A. SHAPIRA, Comments on the Nature and Purpose of Private International Law, 10 Tel Aviv Un. Law Rev. 1984, 289-290. 69 CA 419/59 Koren v. Koren, 14(2) PD 997, 1007 (1960) (Isr.). 70 See CA 241/57 Paltiel v. Paltiel, 13 PD 599, 601-602 (1959) (Isr.). 67 68

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Adi Chen rights are the woman’s right to civil maintenance or to compensation in a particular matter. For example, a financial remedy may be based on an implied agreement between the parties, unjust enrichment, tort law, etc., all according to the circumstances of the individual case.71 As discussed later in further detail, these couples are certainly considered reputed spouses since they live a family life in a common household. They are granted the most important financial rights of legally married couples: civil maintenance, matrimonial property, inheritance, maintenance from the estate, and many additional rights and benefits according to different provisions of law.72 A.

Civil Maintenance

With respect to spousal maintenance, a distinction must be made between lifetime maintenance and maintenance from the estate of a deceased spouse, which under certain conditions is granted after death. In the present article, maintenance from the estate is further discussed separately.73 The Family Law Amendment (Maintenance) Law – 1959 (hereinafter: “the Maintenance Law”) sets forth that a person is obliged to provide maintenance to his spouse according to his applicable personal law, which for local citizens and residents is the religious law.74 Accordingly, if a Jewish divorcee marries a Cohen in a civil marriage and subsequently submits a claim for maintenance from him, the court could determine that according to the choice of law rules applicable in Israel their marriage is invalid. She will then not be considered a “spouse” according to the law, and will not be entitled to maintenance under the Maintenance Law.75 This unfortunate situation resulted in the submission of various bills to amend the law so that it would also apply to reputed spouses and thus allow maintenance for those women. However, none of the bills were approved so that today a woman who is a reputed spouse does not have a right to maintenance under the law.76 In the case of Yeger (Plink) v. Flavitz the Supreme Court ruled in a majority opinion that a woman who is a reputed spouse can base her maintenance right on an agreement between the spouses. As long as the spouses are living together, this can be deemed an agreement, whether express or implied from their 71 CA 805/82 Versano v. Cohen 37(1) PD 529 (1983) (Isr.), CA 563/65 Yeger (Plink) v. Flavitz 20(3) PD 244 (1966) (Isr.). 72 The case law defines a couple as “reputed spouses” when they fulfil the factual conditions of living together as husband and wife and maintaining a common household. For further details see M. SHAVA, The Property Rights of Spouses Cohabiting Without Marriage in Israel – A Comparative Commentary, 13 The Georgia J. of Int. and Comp. Law,1983, 465. 73 See below, Section D: Maintenance from the Estate, next to note 89. 74 Section 2 of the Family Law Amendment (Maintenance) Law – 1959. 75 See above (note 13), the case of Kutik v. Wolfson, and the adjacent text. 76 Knesset Minutes, Vol. 20 (1956) 1948-1949; Knesset Minutes, Vol. 26 (1959). 1144p. 1004-1010 (1965) 1004-1010.

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Secularisation of Private International Family Law in Israel behaviour. However, upon separation, the right to maintenance can be based only on explicit agreement.77 The Supreme Court later returned to this ruling in the matter of Versano v. Cohen when Justice Barak commented on his willingness to broaden it and base the wife’s right to maintenance, even after separation, on an implied agreement.78 Approximately 20 years later, in 2003, Chief Justice Barak wrote a precedent-setting decision in the previously mentioned case of Plonit v. Ploni, granting “civil maintenance” for the first time in Israel. The decision determined that the obligation for civil maintenance after separation, which is applicable to both men and women without any gender differentiation and even without an implied agreement between the parties, might also apply to reputed spouses.79 Clearly, the rulings mentioned above regarding the maintenance right of reputed spouses can be applied today to a civil marriage that afterwards was determined to be invalid, or whose validity was not determined by the case law. B.

Matrimonial Property

Matrimonial property is addressed in The Spouses (Property Relations) Law – 1973.80 The law applies a “balancing of resources” arrangement to spouses who married on or after 1/1/1974,81 whether in a religious marriage or a civil marriage, provided that the marriage was entered into according to law.82 Under this arrangement, with the termination of a marriage by divorce or upon the death of a spouse, each spouse is entitled to half the value of all the matrimonial property of the spouses.83 With respect to spouses who married prior to the effective date in the law and to reputed spouses, the rules of community of property between spouses as developed in the case law continue to apply. The community of property rulings are based upon the principles of justice, equality and integrity. They determine the assumption that with respect to couples who share their lives as husband and wife, under one roof and with a joint effort, the property acquired during their shared lifetime is jointly owned, even if registered in the name of only one of the spouses or in his exclusive possession. This assumption is derived from the nature of marriage, but it is based primarily on the express or implied agreement of the spouses.84 Yeger (Plink) v. Flavitz, (note 71). Versano v. Cohen ( note 71). 79 The matter of Plonit (note 9), 230. 80 Sections 3 to 10 of The Spouses (Property Relations) Law – 1973. 81 Section 14 of The Spouses (Property Relations) Law – 1973. 82 CA 640/82 Cohen v. A.G., 39(1)PD 673, 67 (1985) (Isr.). 83 Section 5(A) of The Spouses (Property Relations) Law – 1973. 84 For further detail and expansion on the rules of community of property, see M. SHAVA, The Property Rights of Spouses Cohabiting Without Marriage in Israel – A Comparative Commentary, Georgia J. International & Comparative Law 13, 1983, 465487. 77 78

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Adi Chen As mentioned above, the rules of community of property also apply to reputed spouses. Although these rules arise from case law, they are applied to married couples as if they were statutory provisions. However, with regard to reputed spouses, the level of proof required for applying the rules of community property is greater than that required for spouses who were married according to law.85 This judicial decision applied the rules of community of property that can obviously and even more readily be applied to other couples in different circumstances. An example is a couple who were married in a civil marriage, lived for a long time as husband and wife, and maintained a common household while assuming that their marriage was valid. However, only when the court afterwards determined the invalidity of the marriage, did the couple realise that their assumption was incorrect. C.

Inheritance

When the court determines the invalidity of a civil marriage, and the deceased spouse did not leave a Will, the right to inheritance from the estate of the deceased spouse can be based on Section 55 of the Succession Law, 1965. This section grants the right to inheritance and sets forth that when “a man and a woman lived as a family in a common household, and upon the death of one of them neither was married to another person, the surviving spouse is considered as if the deceased bequeathed to him what the surviving spouse would have inherited by law if they had been married to each other, and that is when there is no other provision, express or implied, in the Will of the deceased.” In the Succession Law the Israeli legislature does not specifically use the term “reputed spouses” as it does in the other legislation that grants them rights, but it instead uses more delicate language. However, it is clear with respect to its nature and content that the provision is intended to refer to reputed spouses.86 This section includes the additional condition that neither spouse was married to someone else, a condition that does not appear in other laws granting rights to reputed spouses. The language chosen in the Succession Law is a result of a compromise between the conflicting positions of religious and secular political parties with respect to reputed spouses. The position of the religious political parties refuses to recognise the concept of reputed spouses in Israel. In contrast, the position of the secular political parties demands removal of the condition requiring reputed spouses to be unmarried, and thus grants the inheritance right even when at the time of the death at least one of the reputed spouses was married to someone else.87

CA 52/80 Shachar v. Friedman, PD 38(1)443 (1984) (Isr.). A. MENACHEM, Religious Legislation in laws of the State of Israel and the Judgments of Courts and Rabbinical Court, 1968, 128-129. 87 Knesset Minutes, Vol. 42, 1965, 1004-1010. 85 86

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Maintenance from the Estate

Upon the death of one of the spouses, the right of the surviving spouse to maintenance from the estate is set forth in Section 56 of the Succession Law – 1965. This right is limited to individuals in need and is not given routinely.88 According to Section 57(c) of the Succession Law – 1965, the right of maintenance from the estate is also granted in situations in which a man and woman live a family life in a common household but are not married to each other, and at the time that one of them dies neither of them is married to another person. The surviving spouse is entitled to maintenance from the estate of the deceased, as if they had been married to each other, provided that the spouse is in need. In other words, and as discussed above in connection with inheritance from a spouse, the right to maintenance from the estate is granted to reputed spouses and not only to married couples. Accordingly, this provision of law will undoubtedly also apply to a civil marriage that was afterwards determined by the court to be invalid, or to a marriage of undetermined validity.

VI. Conclusions This article illustrates that despite a lack of legislation regulating civil marriage in Israel, the Supreme Court has taken on an active role in the secularisation and modernisation of family law. It shows a clear tendency to recognise the validity of civil marriage entered into abroad between individuals who are both citizens and residents of Israel. First, the Supreme Court determined a new kind of civil maintenance in Israel, which is based on the concepts of honesty, fairness, justice and good faith. Second, the court recognised the validity of civil marriage that took place abroad between Jewish citizens, residents of Israel, who were not prevented by religious law from marrying each other. Third, with regard to inheritance matters the court scrutinised the validity of intermarriage between a Jewish man who was a resident and citizen of Israel and a Christian woman from Romania. In that case, the court was willing to change the approach taken in its previous decisions, thus bringing about disharmony with the applicable rules of choice of law in examining the validity of civil marriage. For the purpose of inheritance rights, the Supreme Court applied a different choice of law from the law customarily applied in Israel with regard to the recognition of a marriage. However, the court’s recognition of the validity of the civil marriage enabled a widow to inherit from her Jewish husband. The Supreme Court stated its position that an intermarriage celebrated abroad should be recognised in Israel even when one of the spouses is a Jewish citizen and resident of Israel, and thus a person whose religious community prohibits intermarriage. Fourth, the Supreme Court instructed the Population Registry to register a same-sex couple married abroad as a married couple, although this registration was not evidence of the validity of the marriage. 88 S. SHILO, Commentary on the Succession Law, 1965, Vol II (Maintenance of the Estate, Conflict of Laws), 1995.

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Adi Chen This article presents the extensive path taken by the Supreme Court in order to provide a solution for and a response to the local population that asks to enter into civil marriages abroad, and in that way to fulfil the fundamental human right to freedom and respect for the family unit. It was all achieved through very careful judicial decisions that do not disrupt the status quo in Israel. These judicial decisions provide a response to a particular portion of the population (spouses who are not prevented by religious law from marrying each other), while other portions of the population such as couples with different religions and couples subject to religious marriage restrictions who married abroad may have a limping status in Israel. Nevertheless, the value of these court decisions should not be lessened. These decisions have secularised and created positive and very significant changes in Israeli family law. They even positively influenced the legislator and prepared for the law reform that now regulates the civil union within the population of the religiously unaffiliated. It is a small and limited step from the perspective of the Israeli legislator towards regulating a civil form of marriage. Certainly the road to complete regulation is still very long, but great changes have always begun with small steps.

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PUBLIC POLICY AND ISLAMIC INTESTATE SUCCESSION LAW ON CASE NO. 2 OB 170/18S OF THE AUSTRIAN SUPREME COURT OF JUSTICE Florian HEINDLER*

I. II. III. IV.

V. VI.

Facts and Procedures Relevant Private International Law The Provisions of Iranian Substantive Law Irreconcilability of the Gender Discrimination Resulting from Iranian Rules with Austrian Public Policy A. The Implicit Public Policy Clause in the Treaty B. Sufficient Domestic Nexus C. Irreconcilability and Hypothetical Disposition D. The Invalid Testamentary Disposition E. Maintenance Payments F. Article 10 of the EU Divorce Regulation G. Derogation of the Foreign Provision H. Outlook for Future Decisions Unequal Portions and Gender Discrimination in a Previous Austrian Case Summary and Conclusion

I.

Facts and Procedures

The deceased, who had his habitual residence in Austria, died in 2013. He was an Iranian citizen. He left behind his wife and four children. The widow, two daughters, and one son had their habitual residences in Austria. The widow is an Iranian citizen, whereas three of the children have Austrian and Iranian citizenship, and one son is an Iranian and Belgian citizen and has his habitual residence in Belgium. The wife was the beneficiary of the will of the deceased, written in Persian language and dated 12 December 2013. The will, however, did not comply with the formal validity requirements under either Austrian or Iranian law because it *

Assistant Professor at the Sigmund Freud University (Vienna). The author thanks Ilaria Pretelli for valuable comments, Philipp Oberndorfer for providing the decision of the court of appeal and Stella Galehr for editorial assistance. Yearbook of Private International Law, Volume 20 (2018/2019), pp. 377-393 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Florian Heindler was not signed by the deceased but only initialled. Moreover, when the will was written, on 12 December 2013, the deceased was already unable to read. Hence, the will had been written and then read to him by one of his daughters. The court of first instance decided that the will lacked of formal validity requirements. The court of second instance referring to the conflict-of-law rule of the bilateral Treaty of Friendship and Establishment between Austria and Iran (hereinafter the “bilateral treaty”),1 applied Iranian law but stipulated that none of the parties claimed formal validity under Austrian law. It found that the will lacked of formal validity requirements of Iranian law. As we observed, the application of Austrian law would not have changed the result. Although it makes no difference to the validity, the court of second instance would have had to applied the Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions which entered into force in Austria already on 5 January 1964 instead of the provision in the bilateral treaty. In the course of the proceedings, one daughter and one son agreed that one third of their portion of the inheritance be attributed to the widow, following Iranian law. The Austrian courts had to decide about the competing claims of the other two children. Whereas the other son pleaded for the application of Iranian law in order to determine his portion of the inheritance, the other daughter argued that unequal inheritance portions on the basis of intestate succession under Iranian law are contrary to the Austrian public policy clause (ordre public international or negative public policy). The court of first instance held that the Iranian rules of intestate succession are discriminatory and hence irreconcilable with the basic tenets of the Austrian legal order.2 The court of appeal altered the decision and confirmed the application of Iranian law. In its reasoning, the court of appeal focused on the obligation of male heirs to pay maintenance, which would compensate for the inequality of the portions in the estate.

II.

Relevant Private International Law

Successions to the estates of deceased Iranian citizens in Austria are subject to the Private International Law Rules of the bilateral treaty. Article 10(3) of the bilateral treaty stipulates that intestate and testate succession is governed by the laws of the contracting state whose nationality the deceased possessed: “En matière de […] succession et testament, les ressortissants de l’une des Hautes Parties Contractantes sur le territoire de l’autre Partie resteront soumis aux prescriptions de leur loi nationale.” 1 Traité d’Amitié et d’Etablissement entre la République d’Autriche et l’Empire de l’Iran, Austrian Federal Law Gazette 1966 no. 45. 2 Article 6 Austrian Private International Law Act, Austrian Federal Law Gazette 1978 no. 304 (autIPRG).

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Public Policy and Islamic Intestate Succession Law The precedence of this rule over those of Regulation (EU) No 650/20123 and of the Austrian Private International Law Act has been unanimously confirmed in doctrinal writings and court practice.4 The scope of the bilateral treaty, defined by the category “intestate and testate succession” encompasses all questions of substantive law relating to successions to estates to the connecting factor of the law of the contracting state whose nationality the deceased possessed. It is, to a large degree, the same category as the one of the former Austrian rule in Article 28 autIPRG.5 Ancillary sources on the basis of which to interpret the bilateral treaty are scarce. However, reference can be made to the bilateral Treaty of Establishment between Germany and Iran6 and the bilateral Treaty of Establishment between Switzerland and Iran,7 which contain similar, but not identical, provisions, because Article 10(3) of the bilateral treaty has been proposed by the Iranian delegation in the light of these two treaties which have been concluded by Iran earlier.8

3 Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, OJ L 201/107, 27.7.2012. Although the bilateral treaty has precedence over Regulation (EU) No 650/2012, the aspects of AustrianIranian successions to the estates of deceased persons that are not subject to Article 10(3) of the bilateral treaty may fall within the scope of Regulation (EU) No 650/2012; among these, for instance, are the “methods of transfer of ownership of an asset”. See CJEU, 12 October 2017, C-218/16, Kubicka, ECLI:EU:C:2017:755, recital 49. 4 See Article 53(1) autIPRG; Article 75 Regulation (EU) No 650/2012; A. DUCHEK/ F. SCHWIND, Internationales Privatrecht, Wien 1979, p. 73; S. FRODL/ F. KIEWELER, Historische Entwicklung und Anwendungsbereich der Verordnung, in W. RECHBERGER/ B. ZÖCHLING-JUD (eds), EU-Erbrechtsverordnung, Wien 2015, pp. 19-20; B. VERSCHRAEGEN, Internationales Erbrecht – Österreich, in M. FERID/ K. FIRSCHING/ H. DÖRNER/ R. HAUSMANN (eds), Internationales Erbrecht, München 2011, recital 40; B. VERSCHRAEGEN, Internationales Privatrecht, Wien 2012, pp. 55-57. 5 A similar solution is followed in Germany as pointed out by N. YASSARI, The Application of Iranian Succession Law in German Courts and its Compatibility with German Public Policy, in J. BASEDOW/ N. YASSARI (eds), Iranian Family and Succession Laws and their Application in German Courts, Tübingen 2004, pp. 35, 37. It is worth mentioning that, in accordance with Article 50(7) autIPRG, Article 28 autIPRG still applies to legal situations dealing with succession if Regulation (EU) No 650/2012 is inapplicable (see R. FUCIK, Articles 28-30 autIPRG, in A. DEIXLER-HÜBNER/ M. SCHAUER (eds), Kommentar zur EU-Erbrechtsverordnung, Wien 2015, recital 4; F. HEINDLER, Articles 2830 autIPRG, in P. RUMMEL/ M. LUKAS (eds), Kommentar zum Allgemeinen bürgerlichen Gesetzbuch, Wien (forthcoming) recital 1). 6 Convention d’Etablissement entre l’Allemagne et l’Empire de “Perse” (Iran) du 17 février 1929 (Article 8). 7 Convention d’établissement entre la Confédération suisse et l’Empire de Perse conclue le 25 avril 1934 (Article 8). 8 A. DUCHEK/ F. SCHWIND (note 4), p. 177.

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Florian Heindler The application of the connecting factor in Article 10(3) of the bilateral treaty derogates from a number of provisions of the general part of the autIPRG. Clearly, Article 5 autIPRG (Renvoi) is inapplicable in the case of a conflict of law rule in a bilateral treaty.9 On the other hand, other rules of the General Part of the autIPRG, as Article 3 on the application of foreign law ex officio and Article 4(1) on the ascertainment of foreign law, correspond well to Austria’s obligations under the bilateral treaty. More questionable is the application of Article 4(2) autIPRG,10 as well as the application of the public policy clause of Article 6 autIPRG.11 However, Article 10(4) of the bilateral treaty stipulates that a party can deviate from its obligations under Article 10(3) in exceptional cases and to the extent that such deviation corresponds with a general practice that is applied in relation to all other states as well: “Il ne pourra être dérogé à l’application de ces lois par l’autre Partie Contractante qu’à titre exceptionel [sic] et pour autant qu’une telle dérogation y est généralement pratiquée à l’égard de tout autre Etat étranger.”12 Article 10(4) of the bilateral treaty is referred to as the public policy clause of the bilateral treaty, according to Austrian doctrine.13 Similar observations have been made with regard to the respective provisions of the bilateral treaties of Iran with Germany and with Switzerland.14 It is, however, more precise to stipulate that Article 10(4) of the bilateral treaty entitles the parties to apply their respective public policy clauses.15

B. VERSCHRAEGEN 2012 (note 4) p. 243; see also N. YASSARI (note 5), p. 38. “If despite intensive efforts the foreign law cannot be ascertained within a reasonable time, Austrian law shall be applied” (translation by E. PALMER, The Austrian Codification of Conflicts Law, The American J. of Comp. L. [A.J.C.L.] 1980, p. 197, p. 223). 11 “A Provision of foreign law shall not be applied when its application would lead to a result irreconcilable with the basic tenets of the Austrian legal order. In its place, if necessary, the corresponding provision of Austrian law shall be applied.” (translation by E. PALMER [note 10] A.J.C.L. 1980, p. 223). 12 See the identical provision in Articles 8(3) sentence 2 of the bilateral Treaties of Establishment of Iran with Germany and with Switzerland. 13 See also A. DUCHEK/ F. SCHWIND (note 4), p. 178. 14 The Swiss Federal Court referred to Article 8(3) sentence 2 of the bilateral Treaty of Establishment between Iran and Switzerland as a public policy clause (BGer, BGE 129 III 250 E. 3.4.2 p. 255; BGer, 31 August 2007, 5A 197/2007). 15 The German Supreme Court referred to Article 8(3) sentence 2 of the bilateral Treaty of Establishment between Iran and Germany as a provision that allows the German authorities to invoke Article 6 EGBGB (German public policy clause), see BGH 14 October 1992, XII ZB 18/92 IPRax 1993, p. 102 (annotation by D. HENRICH, p. 81); OLG Düsseldorf, 19 December 2008 Familienrechtszeitung 2009, p. 1013; OLG Munich, 16 April 2012, Familienrechtszeitung 2013, p. 36; N. YASSARI (note 5), pp. 39-40. 9

10

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III. The Provisions of Iranian Substantive Law The treaty merely refers to Iranian law and the Austrian Supreme Court of Justice decision does not precise under which religious law the succession of the deceased was to be governed. We assume that the succession was governed by the rules applicable to Shia Muslims or Baha’i because no specific reference was made by the parties or the courts to the Iranian interreligious conflict rules.16 According to the Supreme Court, the applicable Iranian law provided for unequal portions in the estates depending on the sex of the heir.17 With regard to moveable property, Iranian intestate succession law was found to stipulate that a widow is entitled to a portion of one eighth, whereas a widower is entitled to a portion of one fourth.18 Male descendants are entitled to a portion equal to twice as much as that of female descendants.19 With regard to immovable property, the courts established that Iranian law excluded the widow from the succession as regards the immovable property of the deceased.20

IV. The Irreconcilability of the Gender Discrimination Resulting from Iranian Rules with Austrian Public Policy The Austrian Supreme Court of Justice altered the decision of the court of appeal. It concluded that the distinction in intestate successions to estates between heirs according to their sex is irreconcilable with the basic tenets of the Austrian legal order, and is not to be applied if (1) the legal situation has a sufficient connection 16 See with further references, H. DÖRNER, Zur Beerbung eines in der Bundesrepublik verstorbenen Iraners, IPRax 1994, p. 33; S. HOSSEINI, Die Rechtsstellung religiöser Minderheiten im Iran, Frankfurt 2017, pp. 263-281; N. YASSARI (note 5), pp. 4142. 17 For an overview, see A. PATTAR, Islamisch inspiriertes Erbrecht und deutscher Ordre public, Berlin 2007, pp. 162-181. 18 The Iranian Civil Code incorporates Qu’ran An-Nisa sure 4 verse 12: “And for you is half of what your wives leave if they have no child. But if they have a child, for you is one fourth of what they leave, after any bequest they [may have] made or debt. And for the wives is one fourth if you leave no child. But if you leave a child, then for them is an eighth of what you leave, after any bequest you [may have] made or debt […]” consulted on 18 April 2019. 19 See Qu’ran An-Nisa sure 4 verse 11: “Allah instructs you concerning your children: for the male, what is equal to the share of two females […]” consulted on 18 April 2019. 20 See on this particular Shiite provision, H.-G. PAULI, Islamisches Familien- und Erbrecht und ordre public, München 1994, p. 158.

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Florian Heindler with Austria, and (2) the rules have an impact on the pending case. Consequently, the court did not apply the Iranian provisions insofar as they would have resulted in unequal portions of the inheritance for the female heirs. In the present case, the court found a strong connection because of the fact that the deceased, as well as the majority of the heirs, had their habitual residence in Austria. The court dismissed two arguments according to which the Iranian intestate succession law leading to unequal portions in the estates of the deceased should not have been considered contrary to the public policy clause in the present case. First, it did not consider it relevant that Iranian verdicts obliged the male heirs to pay maintenance, and, secondly, it did not consider it relevant that the deceased, by testamentary disposition, could have disposed of the estates in the same way as Iranian intestate succession law provides. A.

The Implicit Public Policy Clause in the Treaty

The Austrian Supreme Court of Justice referred to Article 10(4) of the bilateral treaty as an “implicit public policy clause” (“implizite Ordre-public-Klausel”). In its subsequent reasoning the court tried to illustrate that at the time when the bilateral treaty was “concluded”, public policy clauses were an international practice (“bei Abschluss war es allgemeine Übung”). In order to establish such international practice, the court referred to Article 7 of the Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions and Article 16 of the Hague Convention of 5 October 1961. This approach, as well as the way in which it was implemented, cannot be left uncriticised. Austrian constitutional law is notorious for applying a so-called theory of petrification (“Versteinerungstheorie”). According to this theory, provisions relating to the competences of federal units in the Austrian Constitutions are to be interpreted solely in line with the meaning they had when the provision was drafted. Similarly, the court found it necessary to argue that Article 10(4) of the bilateral treaty is limited to a general practice that was applied in relation to all other states when the provision was drafted. Firstly, there is no indication of such a restriction in the text of the provision.21 Secondly, the reference to the date when the bilateral treaty was “concluded” seems random and fragile, taking into account that the model for Article 10(4) of the bilateral treaty was treaty provisions drafted in the 1920s.22 Moreover, the date of the “conclusion” does not seem convincing. The court obviously intends to refer to the date of entry into force. The formal relevance of both references seems questionable given that the bilateral treaty was signed on 9 September 1959, its ratification by the Austrian parliament was confirmed by 31 August 1960, and the instruments of ratification were exchanged on 16 March 1966, on which day, in accordance with its Article 15, the bilateral treaty See M. SCHWIMANN, Internationales Privatrecht, Wien 2001, p. 45. The text of Article 10(4) is copy-pasted from the bilateral treaties between Iran and Germany and Iran and Switzerland. 21 22

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Public Policy and Islamic Intestate Succession Law entered into force. Since the Hague Convention of 5 October 1961 concerning the powers of authorities and the law applicable in respect of the protection of infants was signed by Austria on 28 November 1966, was ratified on 12 March 1975, and entered into force on 11 May 1975, and the Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions was signed by Austria on 5 October 1961, was ratified on 28 October 1963, and entered into force on 5 January 1964, the date of the signing and ratification of the bilateral treaty was prior to Austria’s accession to the said instruments. In addition, in referring to the said instruments, the main focus should be on the particularities of the content of the public policy clauses of these instruments. They are known to be more restrictive than the public policy clause of Article 6 autIPRG.23 It is debatable whether the more restrictive language in the international instruments gives rise to the making of a distinction in the application of the public policy clause. Given that the court refers to more restrictive versions of public policy clauses, one might have expected the court to have applied, or at least to have discussed the application of, Article 10(4) of the bilateral treaty in a more restrictive way.24 B.

Sufficient Domestic Nexus

The court stressed the importance of a sufficient domestic nexus in order to apply the public policy clause.25 With reference to the term “flexible system” (“bewegliches System”),26 it explained that the application of the public policy clause should depend on the factor of a sufficient domestic nexus and the degree of deviation from Austrian substantive law. According to this reasoning, as the court put it, a stronger domestic nexus would lead to the application of the public policy clause even if the deviation from Austrian law were weaker, whereas if the nexus with Austrian law were less, a greater deviation from Austrian substantive law would be required.27 It would have been preferable for the Austrian Supreme Court of Justice to refer simply to a sufficient domestic nexus (“ausreichende Inlandsbeziehung”). 23 See already M. SCHWIMANN, Grundriß des internationalen Privatrechts, Wien 1982, p. 50; M. SCHWIMANN (note 21), p. 45. 24 See below, section IV.F. 25 See F. SCHWIND, Handbuch des Österreichischen Internationalen Privatrechts, Wien 1975, pp. 85-86; A. BONOMI, Article 35, in A. BONOMI / P. WAUTELET/ I. PRETELLI, Le droit européen des successions, Bruxelles 2016, p. 588; B. LURGER/ M. MELCHER, Handbuch Internationales Privatrecht, Wien 2017, pp. 19-20; OGH 12 October 2011, 3 Ob 186/11s. 26 See, W WILBURG, Entwicklung eines beweglichen Systems im bürgerlichen Recht, Graz 1950; English translation by W HAUSMANINGER, The Development of a Flexible System in the Area of Private Law, Wien 2000. 27 See already OGH 12 October 2011, 3 Ob 186/11s; W. WURMNEST, Ordre public, in S. LEIBLE/ H. UNBERATH (eds), Brauchen wir eine Rom 0-Verordnung?, Jena 2013, p. 445, pp. 469-470.

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Florian Heindler In a situation where the case has a strong Austrian nexus, the court may still not invoke the public policy clause easily.28 Given that the deceased and the majority of the heirs had their habitual residence in Austria, and that the majority of the heirs had Austrian citizenship in addition to Iranian citizenship, the court came to the correct conclusion that the case had a sufficient Austrian nexus.29 C.

Irreconcilability and Hypothetical Testamentary Disposition

The court dismissed the argument that under Austrian law there can be unequal portions if the deceased has made a testamentary disposition to this effect. The question whether it is the case that the public policy clause cannot be invoked as long as a hypothetical testamentary disposition in accordance with the lex fori could have led to the same results as Iranian intestate succession law is widely discussed in the doctrine. Although the Austrian literature has not, to the best of our knowledge, discussed this question,30 German legal writing, as well as court practice, have addressed this particular argument.31 For a more nuanced approach focusing on the scope of application of the respective provision of, for example, constitutional law, see L. KROIß/ C.-H. HORN/ D. SOLOMON, Nachfolgerecht, Baden-Baden 2015, Article 35 EU succession regulation, recital 5; D. LOOSCHELDERS, Internationales Privatrecht – Art. 3-46 EGBGB, Berlin 2004, Article 6 EGBGB recital 18, 27; contrary: N. YASSARI (note 5), p. 46: “In cases where the connection to Germany is very strong, the mere fact that the foreign rule itself infringes on the German constitution is sufficient as such to eliminate the foreign rule. A test for whether the result is unbearable or not is not necessary.” 29 M. BROSCH, Der materiell-rechtliche ordre public im internationalen Familienund Erbrecht: Nationale Perspektiven abseits der Europäisierung im IPR, IPRax 2019, forthcoming; L. KROIß/ C.-H. HORN/ D. SOLOMON (note 28), Article 35 EU succession regulation, recital 8; contrary: Higher Regional Court of Hamm (Germany), 29 April 1992 Familienrechtszeitung 1993, p. 111. 30 A. SCHWARTZE, Article 35, in A. DEIXLER-HÜBNER/ M. SCHAUER (eds), (note 5), recital 14, merely mentions a potential incompatibility with the public policy clause of Article 35 Regulation (EU) No 650/2012; C. RUDOLF/ B. ZÖCHLING-JUD/ G. KOGLER, Kollisionsrecht, in W. RECHBERGER/ B. ZÖCHLING-JUD (eds), Die EU-Erbrechtsverordnung in Österreich, Wien 2015, p. 227, argue for a general incompatibility with the public policy clause of Article 35 Regulation (EU) No 650/2012. 31 Arguing against public policy in all cases where the hypothetical testamentary disposition would be permitted A. DUTTA, Article 35 EGBGB, in F. SÄCKER/ R. RIXECKER/ H. OETKER/ B. LIMPERG (eds), Münchener Kommentar zum BGB, München 2018, recital 9; M. VOLTZ, Article 6 EGBG, in D. HENRICH (ed), J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch, München 2013, recital 188; L. KROIß/ C.-H. HORN/ D. SOLOMON (note 28), Article 35 EU succession regulation, recital 8; M. STÜRNER, Die Bedeutung des ordre public in der EuErbVO, Zeitschrift für das Privatrecht der Europäischen Union 2014, p. 317, p. 323; OLG Munich, 16 April 2012, Familienrechtszeitung 2013, p. 36; cf. OLG Hamm, 29 April 1992 Familienrechtszeitung 1993, p. 111; OLG Frankfurt, 10 May 2010, Zeitschrift für Erbrecht und Vermögensnachfolge 2011, p. 135; OLG Hamm, 28 February 28

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Public Policy and Islamic Intestate Succession Law The question as to whether a hypothetical testamentary disposition could have led to the inapplicability of the public policy clause requires an analysis of the nature of public policy exceptions. Whereas a restrictive interpretation of the public policy clause is that it is intended solely to protect the legal order, i.e. to attempt to preserve peace in society by maintaining the most important common standards, a broader interpretation also takes certain individual interests into consideration, in particular if such interests are protected by human and social fundamental rights. Under the restrictive approach, the argument for hypothetical testamentary disposition should have succeeded, since the legal order does not have to be protected from results, which it tolerates in the event of the existence of a will. On the other hand, the Austrian public policy clause in Article 6 autIPRG does not invariably follow such a restrictive approach.32 However, the court had to apply Article 10(4) of the bilateral treaty. The fact that the court did not also consider the relation between Article 6 autIPRG and Article 10(4) of the bilateral treaty, although it pointed to international instruments knowing that the public policy clauses stipulated therein were more restrictive than the public policy clause in Article 6 autIPRG, does not make this decision convincing. The notion of the public policy clause lies at the heart of this case and is decisive in deciding in one or the other direction. The court applied a broad interpretation of the public policy clause, taking into consideration individual claims to receive a fair portion of estates, but it did not elaborate on potential requirements stemming from Article 10(4) of the bilateral treaty and did not make explicit why it had interpreted the public policy clause rather broadly. D.

The Invalid Testamentary Disposition

The Supreme Court of Justice took note of a will of the deceased that was to the benefit of the wife. This will was invalid under both Austrian and Iranian law.33 Nevertheless, the will was used to demonstrate that the provisions of Iranian intestate succession law ran counter to the intention of the deceased. The court referred to the intention of the deceased when discussing whether a hypothetical testamentary disposition could have led to the inapplicability of the public policy clause. Whereas the existence of the deceased’s will would not be relevant if it is assumed that a public policy clause is intended solely to protect the legal order, a more nuanced approach to a public policy exemption would include 2005 Familienrechtszeitung 2005, p. 1705 (religious discrimination). Critical are D. LOOSCHELDERS, Begrenzung des ordre public durch den Willen des Erblassers, IPRax 2009, p. 246, p. 247; D. LOOSCHELDERS, Article 35 EU Succession Regulation, in R. HÜßTEGE/ H.-P. MANSEL (eds), Nomos-Kommentar BGB, Baden-Baden 2015, recital 19– 21; A. PATTAR (note 17), p. 512. 32 F. SCHWIND, Internationales Privatrecht, Wien 1990, p. 68; contrary: OGH 28 March 2000, 1 Ob 33/00k; OGH 12 March 1974, 8 Ob 33/74; U. WALTER, Internationales Familienrecht, Wien 2017, p. 16. 33 See above, section I.

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Florian Heindler consideration of the existence of the will.34 Given that the deceased tried to dispose of his estate to achieve the same result as under Iranian intestate succession law, his intention could have been honoured under Austrian law as well.35 On the other hand, if the deceased would not have welcomed the results of applying Iranian intestate succession law, the idea of a hypothetical possibility of disposing of the estate in accordance with Austrian law seems to be far from the reality of the situation in this particular case.36 The pragmatic approach takes account of the fact that the connecting factors in international succession and family law traditionally stress the importance of long-term relationships created under the foreign law on which the parties rely, as well as the importance of social customs and developments. According to this view, it would be inappropriate if the legal regime changes as soon as the couple has crossed the border. If, however, as in the given case, the testator states on his hospital bed that his wife is to inherit his estate,37 it is hardly a convincing argument to stress the importance of the Iranian law of succession for the relationships within the family of the deceased. E.

Maintenance Payments

The court discussed the relevance of maintenance payments, which must reportedly be made by male heirs under Iranian law.38 In the course of the proceedings, the parties mentioned a decision by an Iranian court which compelled the male heirs to pay maintenance to the female descendants. It is true that the Iranian substantive family and succession law provisions form a system that has some coherence within itself.39

34 See D. LOOSCHELDERS, Anpassung und ordre public im Internationalen Erbrecht, in H. KRONKE/ K. THORN (eds), Grenzen überwinden – Prinzipien bewahren. Festschrift von Hoffmann, Bielefeld 2011, p. 266, p. 276. 35 For a similar reasoning taking into account the established intention of the deceased, see A. BONOMI (note 25), p. 589; O. ELWAN, Ausgewählte Fragen in deutschalgerischen Erbrechtsfällen, in R. GEIMER/ R. SCHÜTZE (eds), Recht ohne Grenzen – Festschrift für Athanassios Kaissis zum 65. Geburtstag, Köln 2012, p. 167, p. 185; J. MÖRSDORF, Article 6 EGBGB, in H. PRÜTTING/ G. WEGEN/ G. WEINREICH (eds), Bürgerliches Gesetzbuch – Kommentar, München 2018, recital 20; OLG, 10 May 2010, Zeitschrift für Erbrecht und Vermögensnachfolge 2011, p. 135; OLG Munich, 16 April 2012, Familienrechtszeitung 2013, p. 36. 36 See also OLG Hamm, 28 February 2005 Familienrechtszeitung 2005, p. 1705 (religious discrimination); German Higher Regional Court of Düsseldorf, 19 December 2008 Familienrechtszeitung 2009, p. 1013. 37 See Regional Court of Wels, 18 July 2018, 22 R 164/18a. 38 See H.-G. PAULI (note 20), p. 159. 39 N. YASSARI (note 5), p. 46; with reference to questions of substitution and adaptation: H. DÖRNER (note 16), IPRax 1994, pp. 34-35.

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Public Policy and Islamic Intestate Succession Law The Supreme Court of Justice analysed this obligation from the perspective of the Austrian courts. The existence of the Iranian court decision was treated as foreign and irrelevant to the Austrian case. There was no attempt to take the effects of the factual existence of the decision into consideration; moreover, the court dismissed the reference to the foreign court decision on the basis of a legal analysis of relevant conflict of law provisions to be applied by the Austrian courts. It summarised to the effect that maintenance payments, notwithstanding the difficult delimitation between maintenance and succession law,40 are subject to the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, and accordingly are governed by Austrian law.41 Even if an Iranian court had applied Iranian law to the maintenance payments, an Iranian decision of this nature could not have been recognised or enforced in Austria. The court consequently dismissed the argument that unequal portions in the inheritances of women under Iranian law would be offset by maintenance obligations in favour of the women under Iranian law if such maintenance obligations were not applicable and enforceable in Austria.42 It would have been helpful if the court had assessed whether in fact an additional burden lay on the male heirs. Only in this case would maintenance payments have been taken into consideration.43 Inevitably, hypothetical claims under the foreign law are bound to be irrelevant. However, if the Iranian decision would have led to maintenance payments, notwithstanding whether they were enforceable in Austria, there are no grounds to reject the argument. This might have been particularly relevant in the present case, where the family reportedly still had considerable property in Iran, the widow had successfully claimed for her dowry (mahr) and matrimonial maintenance, and the children were, reportedly, served with the judgment at an address in Iran.44 The widow’s dowry (mahr) – a mandatory payment at the time of marriage that legally becomes the wife’s property and functionally provides her with a certain reserve, including in the event of death45 – can be taken into consideration F. HEINDLER (note 5), Article 1 EU succession regulation, recital 33. Somewhat similarly, the OLG Hamm, 29 April 1992 Familienrechtszeitung 1993, p. 111 ruled in a comparable case that the public policy clause shall not be applied because the widow was entitled to receive a share in the matrimonial property in accordance with Article 1371(1) German Civil Code (on the characterisation of questions relating to § 1371(1) see meanwhile CJEU, C-558/16, Mahnkopf, recital 40); see also, S. LORENZ, Islamisches Ehegattenerbrecht und deutscher ordre public – Vergleichsmaßstab für die Ergebniskontrolle, IPRax 1993, pp. 148-151. 42 Similarly, O. ELWAN (note 35), p. 167, p. 181; H.-G. PAULI (note 20), pp. 175176. 43 A. PATTAR (note 17), pp. 515-516; N. YASSARI (note 5), p. 47; cf. applauding the Supreme Court: M. LEGATH, Ordre-public-Widrigkeit der Ungleichbehandlung von Mann und Frau, Evidenzblätter 2019, p. 508. 44 See, Regional Court of Wels, 18 July 2018, 22 R 164/18a. 45 This was put in context to succession in the estate of the deceased by H.-G. PAULI (note 20), p. 169; M. BROSCH (note 29); recently on Mahr in substantive and conflicts law: N. YASSARI, Die Brautgabe im Familienvermögensrecht, Tübingen 2014. 40 41

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Florian Heindler in public policy reflections.46 Both the maintenance payments and the possibility of taking the dowry out of the estate would require reconsideration of the application of the public policy clause with regard to unequal portions in women’s inheritances. However, compensation via a dowry applies to the claims of the widow only, whereas in the decision in question the public policy clause was applied because of the unequal portions for the male and female descendants. F.

Article 10 of the EU Divorce Regulation

The court recognised, with reference to Article 7 of the Austrian Constitution,47 that equal treatment of men and women is regarded as one element of the basic tenets of the Austrian legal order.48 Interestingly, the court referred inter alia to Article 10 of Regulation (EU) No 1259/2010.49 Article 10 of Regulation (EU) No 1259/2010 could be seen as prescribing an abstract approach, which might lead to a general rejection in the case of unequal access to divorce.50 This abstract

Against substitution in general, M. LEGATH (note 43), Evidenzblätter 2019, p. 508 stating that functional equivalents in jurisdictions influenced by Islam must not be taken into consideration because islamic jurisdictions would consider men superior to women in general (“weil die Ungleichbehandlungen in der iranischen und in anderen islamisch geprägten Rechtsordnungen so zahlreich und divers sind, dass sie sich weder theoretisch ausgleichen könnten, noch in der Realität dazu führen, dass Mann und Frau einander gleichberechtigt gegenüberstehen”). 46

“No one may be discriminated against because of his personal impediment. The Republic, Federation, Länder and Municipalities are committed to guaranteeing equal treatment to the impaired and non-impaired humans in all areas of daily life.” (translation by

consulted on 17 April 2019). 48 See also B. VERSCHRAEGEN, Ordre public in einer Gesellschaft kultureller Vielfalt aus der Perspektive des Zivilrechts, Österreichische Richterzeitung 2012, p. 216, p. 218; OGH 10 July 1986, 7 Ob 600/86. 49 Council Regulation (EU) No 1259/2010 of 20 December 2019 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation OJ L 343/10; Article 10: “Where the law applicable pursuant to Article 5 or Article 8 makes no provision for divorce or does not grant one of the spouses equal access to divorce or legal separation on grounds of their sex, the law of the forum shall apply.” 50 With further references, M. BROSCH (note 29); S. GÖSSL, Rom III-VO Art. 10, in C. BUDZIKIEWICZ/ M.-P. WELLER/ W. WURMNEST (eds), beck-online Grosskommentar (1 November 2018) recital 20-23; S. GÖSSL, Überlegungen zum deutschen Scheidungskollisionsrecht nach “Sahyouni”, GPR 2018, p. 94, p. 95; S. GÖSSL, The public policy exception in the European civil justice system, The European Legal Forum 2016, p. 85, p. 91; D. MARTINY, IPR-Anh 3/Rom III, in H. PRÜTTING/ G. WEGEN/ G. WEINREICH (eds), Bürgerliches Gesetzbuch Kommentar, 13th ed, Köln 2018, Article 10 recital 2; W. WURMNEST (note 27), p. 445, pp. 466-468. 47

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Public Policy and Islamic Intestate Succession Law approach to invoking a public policy clause contrasts with the way the public policy clause is applied in many EU jurisdictions.51 By contrast, the Supreme Court of Justice stated that Article 10 of Regulation (EU) No 1259/2010 requires equal treatment of men and women as a matter of public policy and that the said article must be applied to divorce situations subject to the bilateral treaty “by way of analogy” (“analog”). This statement necessarily leads one to reflect on the application of a (specific) European Union public policy clause by the Austrian Supreme Court of Justice, and an extensive application of an abstract public policy clause. The application of this public policy clause to the bilateral treaty rules indicates that the court could potentially have reflected the universal character of the abstract public policy clause or applied it as an international public policy clause. Although the present case did not involve a divorce, the court argued that the (abstract) ratio decidendi underlying Article 10 of Regulation (EU) No 1259/2010 should be applied to succession to the estates of deceased persons as well. It is noteworthy that the item from the Austrian literature referred to,52 which the court cited in relation to the argument “by way of analogy”, did not even argue for application to bilateral treaties. Arguments relative to a European Union or international public policy clause, as well as any reference to the relevant literature, are missing. The court failed furthermore to invoke Article 21 of the Charter of Fundamental Rights of the European Union,53 Article 14 of the European Convention of Human Rights or Article 35 of Regulation (EU) No 650/2012.54 Tellingly, Regulation (EU) No 650/2012 does not contain an abstract public policy clause similar to Article 10 of Regulation (EU) No 1259/2010. Whether or not Article 10 of Regulation (EU) No 1259/2010 is to be regarded as a public policy clause within Regulation (EU) No 1259/2010,55 its priority over bilateral treaties or national public policy clauses56 cannot be demonstrated by an argument “of analogy”, as the court put it. Whereas the court triggered reflections about the application of a European Union or international public policy clause by suggesting its core to be found in Article 10 of Regulation (EU) No 1259/2010 in a matter of succession to the estates of deceased persons, it failed 51 For a comparative review, see S. GÖSSL (note 50), The European Legal Forum 2016, pp. 85-92. 52 M. NADEMLEINSKY/ M. NEUMAYR, Internationales Familienrecht, Wien 2017, p. 123. 53 Recital 25 Regulation (EU) No 1259/2010 explicitly refers to Article 21 of the Charter of Fundamental Rights of the European Union. 54 On the “Europeanisation” of the public policy exception, see inter alia S. GÖSSL (note 50), The European Legal Forum 2016, p. 87. 55 With further references: S. GÖSSL (note 50), recital 3; B. HEIDERHOFF, VO (EU) 1259/2010 Art. 10, in H. BAMBERGER/ H. ROTH/ W. HAU/ R. POSECK (eds), BeckOK BGB, 49th ed, München 1 February 2019, recital 1; G. MUSGER, Article 10 Rome III-Regulation, in H. KOZIOL/ P. BYDLINSKI/ R. BOLLENBERGER (eds), Kurzkommentar zum ABGB, Wien 2017, recital 1. 56 Cf. B. VERSCHRAEGEN (note 48) p. 216, p. 217.

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Florian Heindler to offer an explanation or argument for the application of Article 10 of Regulation (EU) No 1259/2010 in succession matters governed by bilateral treaties.57 G.

Derogation of the Foreign Provision

The public policy clause requires that the specific provision irreconcilable with the basic tenets of the Austrian legal order not be applied. Nevertheless, courts still have to apply the remaining provision of the lex causae to the extent possible.58 Only if necessary is Austrian law to be applied. If the ratio decidendi of Article 10 Regulation (EU) No 1259/2010 had applied “by way of analogy”, the court would have had to consider the application of the lex fori as indicated in Article 10 of Regulation (EU) No 1259/2010 in fine. In the case in question, the court did not apply the provisions of Austrian law on portions of the inheritance. Moreover, the court applied the Iranian provisions on portions of the inheritance but ignored those provisions that provided for a reduction in the portion of the female heirs.59 H.

Outlook for Future Decisions

In summarising its reflections, the court added a general paragraph. As a kind of conclusion, it stipulated that a foreign rule that distinguishes in the case of intestate succession to the estates of deceased persons between heirs according to their sex would be irreconcilable with the basic tenets of the Austrian legal order, and is not to be applied if the legal situation has a sufficient connection with Austria and the rules have an impact on the particular case.60 General statements such as this on the application of public policy clauses might have a negative effect on future decisions in Austria. As the court has correctly pointed out in several prior decisions,

See with further references: F. HEINDLER, Entscheidungsanmerkung zu OGH 2 Ob 170/18s, Juristische Blätter 2019. 57

58 A. DUCHEK/ F. SCHWIND (note 4), p. 25; M. SCHWIMANN (note 23), p. 46; B. VERSCHRAEGEN (note 4), p. 248; M. NEUMAYR, Article 6 autIPRG, in H. KOZIOL/ P. BYDLINSKI/ R. BOLLENBERGER (eds) Kurzkommentar zum ABGB, Wien 2017, recital 6; cf. B. LURGER/ M. MELCHER (note 25), p. 20. 59 For the same approach under Article 35 Regulation (EU) No 650/2012, A. BONOMI (note 25), p. 580; for the same approach under Article 6 EGBGB: M. ANDRAE, Wertungswidersprüche und internationales Erbrecht, in H. KRONKE/ K. THORN (eds), Grenzen überwinden – Prinzipien bewahren. Festschrift von Hoffmann, Bielefeld, 2011, p. 3, p. 10; S. LORENZ (note 41), IPRax 1993, p. 148, p. 150; N. YASSARI (note 5), p. 48. 60 “Regelungen einer fremden Rechtsordnung, die beim gesetzlichen Erbrecht nach dem Geschlecht der Erben unterscheiden, sind wegen Verstoßes gegen den österreichischen ordre public nicht anzuwenden, wenn sich die Verschiedenbehandlung im konkreten Fall auswirkt und ein ausreichender Inlandsbezug vorliegt.”

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Public Policy and Islamic Intestate Succession Law the application of the public policy clause requires a case-by-case analysis.61 The requirement to consider the circumstances of the individual case and, in particular, to take a functional approach to the legal situation, runs counter to a general rule for the treatment of Iranian intestate successions to the estates of deceased persons. If, for instance, the widow had received a mahr that would have generated a sufficient income, the result in the individual case could have been different. Similarly to the treatment of talaq divorces,62 the court – at least in its concluding remarks – tends to switch from its traditional pragmatic approach considering the outcome of the application of the foreign provision63 to an abstract approach, which would lead to a more general rejection of the foreign provision.64 A better approach would preferably include an evaluation of whether (1) the foreign rule and its motivation are, in general terms, (manifestly) irreconcilable with the basic tenets of the Austrian legal order, and (2) the application of an irreconcilable rule would lead to a result that would also be irreconcilable with the basic tenets of the Austrian legal order.65

V.

Unequal Portions and Gender Discrimination in a Previous Austrian Case

The question of the irreconcilability of unequal portions in women’s inheritances was not arising for the first time at the Austrian Supreme Court of Justice. It had been addressed in a case decided by the Austrian Supreme Court of Justice in 2013, under different circumstances.66 In the 2013 case, the court decided that Austrian courts do not have international jurisdiction to hear a case where the widow of a deceased Saudi Arabian citizen addressed the Austrian courts in respect of a securities account that was managed by an Austrian bank. The couple had their habitual residence in Saudi Arabia. The widow argued that the effective enforcement of her succession rights of inheritance in Saudi Arabia would be OGH 24 September 1998, 6 Ob 242/98a; OGH 26 September 2018, 7 Ob 145/18a; with further references, B. VERSCHRAEGEN, Article 6 autIPRG, in P. RUMMEL (ed), Kommentar zum Allgemeinen bürgerlichen Gesetzbuch, Wien 2001, recital 2. 62 See, F. HEINDLER, The Austrian Public Policy Clause and Islamic Family Law, ELTE L. J. 2016, p. 167, pp. 179-180. 63 See, for example, e.g. G. MUSGER (note 55), recital 3; OGH 15 February 2006, 3 Ob 242/05t; OGH 25 June 2002, 5 Ob 131/02d. 64 See on the development in general: M. ROHE, Islamic Law in Western Europe, in A. EMON/ R. AHMED (eds), Islamic Law, New York 2018, p. 725, pp. 732-733 with further references. 65 H. DÖRNER (note 16), IPRax 1994, p. 35; D. LOOSCHELDERS (note 34), p. 266, pp. 274-275. 66 OGH 21 May 2013, 1 Ob 74/13h, Interdisziplinäre Zeitschrift für Familienrecht 2013, p. 255. 61

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Florian Heindler impossible.67 Her reference to the discriminatory effects of unequal portions in women’s inheritances under Saudi Arabian law in order to demonstrate that she was prevented from effectively enforcing her rights of inheritance was dismissed. The Supreme Court of Justice concluded that since the competent foreign court would not dismiss an application from the widow on grounds that would be contrary to the Austrian public policy clause, the foreign decision could be recognised in Austria, and that the Austrian courts do not therefore have international jurisdiction.

VI. Summary and Conclusion The Austrian Supreme Court of Justice decided to invoke the public policy clause in order to award equal portions of the inheritance to a female and a male descendant. The Iranian provision, which provided for unequal portions, was found to be contrary to Austrian public policy. The court acknowledged the application of the bilateral treaty and argued for Article 10(4) of the bilateral treaty as an “implicit” public policy clause. The objections against the reasoning favoured by the court referred (1) to the hypothetical possibility that the deceased favoured the male descendants in the same manner as provided by Iranian intestate succession law, and (2) to maintenance payments that exist under Iranian law. As to the objection argument, the court concluded that the mere fact that Austrian intestate succession law would have accepted an unequal distribution of the inheritance does not decide the case. Moreover, the court adopted a broader view of the public policy clause. There is, according to that view, no requirement for it to be demonstrated that the result as such must be contrary to a result that can be hypothetically inferred by the application of Austrian law. As to the second objection, the court treated the argument of the male heir as an abstract description of the foreign legal order. It regarded the maintenance payments under substantive Iranian law as hypothetical, given that from the perspective of the Austrian legal system Iranian law would not be applicable to maintenance payments and Iranian decisions regarding maintenance payments cannot be enforced in Austria. Given that the court took account of the circumstances of the particular case, i.e. the strong domestic nexus and the possibility of ascertaining that the intention of the deceased was to designate his wife as a beneficiary, the decision of the court is justified. Prohibition of discrimination for gender reasons is a fundamental principle of the Austrian Constitution. Nevertheless, the application of Iranian provisions on intestate succession to the estates of deceased persons still requires a case-by-case analysis with a focus on the effects of their application. 67 See for this requirement Article 106 section 1 number 2 litera c of the Austrian Court Jurisdiction Act as in force before amended by the Federal Act on the Amendment of Succession Law 2015 (Federal Law Gazette I 2015/87).

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Public Policy and Islamic Intestate Succession Law Contrary to a side-remark made by the court, the distinction in intestate successions to the estates of deceased persons between heirs on the basis of their sex cannot be generally regarded as irreconcilable with the basic tenets of the Austrian legal order, even if the court could confirm that the case has a sufficient connection with Austria and whether the rules have an impact on the particular case.

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TIDINGS FROM KOREA DEVELOPMENTS IN PRIVATE INTERNATIONAL LAW DURING THE 2010S Issey PARK* I. II.

V.

Introduction Choice of Court in Patent Transfer A. Background B. Considerations C. Comments 1. International Adjudicatory Jurisdiction 2. Exclusive Jurisdiction Agreement 3. Exclusive Jurisdiction Related to Intellectual Property Rights Consumer Protection for Aircraft Passengers A. Background B. Considerations C. Comments 1. Restriction of Party Autonomy 2. Scope of Consumer Protection 3. Criteria for Passiveness Constitutional Value as Yardstick of Public Policy A. Background B. Considerations C. Comments 1. Recognition of Foreign Judgments 2. Public Policy Test 3. Role of Constitutional Values Concluding Remarks

I.

Introduction

III.

IV.

Although the Act on Private International Law (“PILA”)1 has not undergone any noticeable change since it wholly recast the Conflict of Laws Act in 2001,2 Korea

* Associate Expert, UNCITRAL. The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations. The author expresses his gratitude to Professor SUK Kwang Hyun and Professor Gian Paolo ROMANO.

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 395-412 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Issey Park has since amended other pieces of legislation that have a bearing on private international law.3 In 2006, the Debtor Rehabilitation and Bankruptcy Act, otherwise known as the Consolidated Insolvency Act, Part V of which is modelled on the UNCITRAL Model Law on Cross-Border Insolvency, came anew into force. In 2014, the Civil Procedure Act (“CPA”) and the Civil Execution Act (“CEA”) which govern recognition and enforcement of foreign judgments, were amended, inter alia, to expressly cover not only judgments of foreign courts that are no longer subject to ordinary recourse, but also others that may be deemed equivalent in effect. More recently, in late 2016, the Arbitration Act was reformed principally in order to adopt Option I of Article 7 and Chapter IV A of the UNCITRAL Model Law on International Commercial Arbitration. In the meantime, Korea’s close neighbours have experienced some notworthy developments. In Japan, the Act on General Rules for Application of Laws entered into force on 1 January 2007, and both the Code of Civil Procedure and the Civil Provisional Remedies Act were amended in 2012 for codification of detailed rules on international adjudicatory jurisdiction.4 In the People’s Republic of China, the first codification of its private international law rules became effective on 1 April 2011.5 Regionally, the Asian Principles of Private International Law, also known as the first “voice of Asia” in private international law, were finalised.6 Presently, changes are on the horizon in Korea as well. On 30 June 2014, the Ministry of Justice set up a ten-member Committee to amend the then thirteenyear-old PILA. The process was initiated to overhaul the PILA in light of both domestic jurisprudence and international developments since its whole amendment of the Conflict of Laws Act in 2001. Specifically, the mandate of the Committee was to forge more concrete and individualised rules on international jurisdiction. The mandate lasted until the end of 2015. Unfortunately, the Committee was not able to propose a draft.7 However, on 19 January 2018, the Ministry of Justice, Unofficial translation by Professor SUK Kwang Hyun in J. BASEDOW et al. (eds), Encyclopaedia of Private International Law (2017), p. 3810-3821 and this Yearbook 5 (2003), p. 315-336. 2 K.H. SUK, The New Conflict of Laws Act of the Republic of Korea, this Yearbook 5 (2003), p. 99-141. 3 Throughout this article, Korea refers to the Republic of Korea, i.e., South Korea. 4 Y. OKUDA, New Provisions on International Jurisdiction of Japanese Courts, this Yearbook 13 (2011), p. 367-380; D. YOKOMIZO, The New Act on International Jurisdiction in Japan: Significance and Remaining Problems, Zeitschrift für Japanisches Recht 17 (34) (2012), p. 95-113. 5 J. HUANG, Creation and Perfection of China’s Law Applicable to Foreign-Related Civil Relations, this Yearbook 14 (2012/2013), p. 269-288. See also K.H. SUK, Some Observations on the Chinese Private International Law Act: Korean Law Perspective, Zeitschrift für Chinesisches Recht 18 (2) 2011, p. 105-115. 6 W. CHEN/ G. GOLDSTEIN, The Asian Principles of Private International Law: objectives, contents, structure and selected topics on choice of law, Journal of Private International Law 13 (2) (2017), p. 411-434. 7 J. JANG, Reforming the Law of International Civil Jurisdiction: Committee Proposal, Korean Yearbook of International Law 3 (2015), p. 187; K.H. SUK, Proposed Amendments of the Private International Law Act of Korea: With a Focus on the Rules of 1

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Tidings from Korea with the help of some Committee Members, announced its draft bill, and subsequently on 27 February, held a public hearing thereon. 8 On 23 November 2018, the government-proposed bill (the “Bill”) was introduced.9 In purporting to introduce detailed rules on international adjudicatory jurisdiction, the Bill, which is to wholly amend the PILA, has taken a number of instruments into account – the 1999 Preliminary Draft, 10 the Brussels I Regulation,11 and the Choice of Court Convention12 to name a few.13 Structurally, the PILA is to have 10 Chapters, most of which will have a Section on international jurisdiction, and 96 Articles. Section 2, titled “International Jurisdiction to Adjudicate”, of Chapter I, titled “General Provisions”, includes some new provisions on, among others, jurisdiction agreements (Article 8), exclusive jurisdiction (Article 10), lis pendens (Article 11), 14 forum non conveniens (Article 12), provisional measures (Article 14),15 and non-contentious matters (Article 15). Against this background, this paper aims to provide a cursory – and inevitably piecemeal – update on some recent developments in Korean private international law by focusing on three important Supreme Court judgments from the present decade. It first addresses a case on international jurisdiction concerning choice of a Korean court in a patent transfer agreement, which facilitates assessment of some innovations brought about by the Bill (II), then looks at a much talked about case on choice of law in a contract of carriage to examine the scope of consumer protection (III), and goes on to discuss a historic case on recognition of a Japanese judgment to illuminate the Constitution as a public policy criterion (IV), before stating some conclusions (V).

International Jurisdiction, in Hague Conference on Private International Law, Asia Pacific Week Program Book, 2017, Part 1, p. 262, available at . 8 G. LEE, Revised Bill of Korea’s Act on Private International Law, Korean Yearbook of International Law 5 (2017), p. 203-204. 9 Bill No 2016788. 10 Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters adopted by the Special Commission on 30 October 1999. 11 Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. 12 Convention of 30 June 2005 on Choice of Court Agreements. 13 K.H. SUK, Introduction to Detailed Rules of International Adjudicatory Jurisdiction in the Republic of Korea: Proposed Amendments of the Private International Law Act, Japanese Yearbook of Private International Law 19 (2017), p. 3. 14 See also, Art. 21 of the 1999 Preliminary Draft. 15 Ibid., Art. 13.

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II.

Choice of Court in Patent Transfer

A.

Background

The plaintiff in this case (Supreme Court Judgment of 28 April 2011, Docket No 2009Da19093)16 is LG Display, a panel maker headquartered in Seoul, which in 1998 took over from LG Electronics assets related to its TFT-LCD (Thin Film Transistor Liquid Crystal Display) business. The defendants are Sakae Tanaka, a natural person of Japan, and Obayashi Seikou, a legal person of Japan. Mr Tanaka and the president of the said company, Naoto Hirota, were once colleagues in Japan. Mr Tanaka, pursuant to the two employment contracts with LG Electronics which were entered into in 1991 and 1995, had been an employee from 1991 to 1998. Both contracts conferred the ownership of any invention to the employer and prevented the employee from disclosing confidential information. However, since around 1997, Mr Tanaka, as both the inventor and applicant, had made patent applications for his inventions of LCD devices. He had also been involved in the second defendant’s filings, which had occurred since around 1996, designating Mr Hirota, the president of the second defendant, as the inventor. Eventually, on 3 April 2004, a patent transfer agreement was entered into by LG Display, Mr Tanaka, and Obayashi Seikou, according to which rights relating to certain patents and patent applications in Japan and elsewhere were to be assigned from the two Japanese parties to the Korean gratuitously. The agreement included a choice of court clause. In 2006, an action seeking transfer of the patent registration and change of the name of the patent applicant was brought before the Seoul Central District Court. The main interest of this case lies in the objection raised by the Japanese defendants that the courts of Japan – i.e., of the country of registration of the patents in dispute – have exclusive jurisdiction despite the forum selection. Contrary to the judgment of the first instance court,17 the Seoul High Court did not recognise the jurisdiction of the Japanese courts but instead assumed jurisdiction of the Korean chosen court.18 Thus, it was the Japanese defendants who filed the final appeal before the Supreme Court of Korea. B.

Considerations

The Supreme Court first recalled its jurisprudence on exclusive choice of court agreements conferring jurisdiction upon a foreign court to the exclusion of the jurisdiction of Korean courts, which is based on the following four requirements:19 Unofficial translation by the Supreme Court Library available at . 17 Seoul Central District Court Judgment of 23 August 2007, Docket No 2006GaHap 89560. 18 Seoul High Court Judgment of 21 January 2009, Docket No 2007Na96470. 19 Supreme Court Judgment of 9 September 1997, Docket No 96Da20093; Supreme Court Judgment of 25 March 2004, Docket No 2001Da53349; Supreme Court Judgment of 26 August 2010, Docket No 2010Da28185. See also, T.-A. RHO, An Analysis of Recent 16

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Tidings from Korea (i) that the case not fall under the exclusive jurisdiction of the Korean courts; (ii) that the foreign court have valid international jurisdiction under its own rules of jurisdiction; (iii) that the case have a reasonable connection with the foreign court; and (iv) that the exclusive choice of court agreement not be egregiously unreasonable or unfair to amount to a juridical act contrary to ordre public.20 The four requirements in case of an exclusive jurisdiction agreement in favour of a Korean court were likewise held to be: (i) that the case not fall under the exclusive jurisdiction of a foreign court; (ii) that the Korean court have international jurisdiction under the laws of Korea; (iii) that the case have a reasonable connection with the Korean court; and (iv) that the choice of court agreement not be egregiously unreasonable or unfair to amount to a juridical act contrary to ordre public. The Supreme Court, in affirming the appellate judgment, found that “when the main issues of dispute or examination are concerned only with [the] interpretation of a contract to transfer patent rights or the validity of such a contract, and [are] irrelevant as to the establishment of a patent right or a claim for validation, invalidation or revocation of a patent right, a lawsuit seeking performance of such transfer […] cannot be seen as falling under the exclusive jurisdiction of the country of registration or where registration has been filed.” The Supreme Court nevertheless acknowledged that the courts of the country in which the patent is registered or the patent application is filed would in general have exclusive jurisdiction for proceedings concerning the registration or validity of the patent as a patent is a legal product of that country. C.

Comments

1.

International Adjudicatory Jurisdiction

Article 2 of the 2001 PILA contains the general rule on international jurisdiction, which reflects the jurisprudence of the time. However, such broad rule was transitory ab initio, as the launch of the Committee would only confirm.21 The need to resume work on jurisdictional rules arose when it became clear that the Judgment Project, i.e., “the work undertaken by the Hague Conference since 1992 on […] the international jurisdiction of courts and the recognition and enforcement of their judgments abroad”,22 would scale down and fail to lead to a convention double or a convention mixte. Articles 27 and 28 of the PILA – the only additional

Supreme Court Decisions on International Jurisdiction – Focusing on the Interpretation of Article 2 of the Private International Act and the Substantial Connection Principle, Supreme Court Law Journal 3 (1) (2013), p. 50. 20 Public policy and ordre public are used interchangeably. 21 K.H. SUK (note 2), p. 112 (“it was premature to develop such detailed rules […]. Accordingly, as an interim measure, the drafters decided to incorporate only three articles on international jurisdiction”); K.H. SUK (note 7), p. 263. 22 Available at .

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Issey Park rules on international jurisdiction – set forth special rules to protect consumers and employees.23 The first paragraph of Article 2 provides that “[t]he courts shall have international jurisdiction to adjudicate if the parties or the case in dispute have a substantial connection with the Republic of Korea”. The second requires Korean courts to refer to “the provisions on jurisdiction of domestic laws” or ‘venue provisions’ in the CPA, such as Articles 2 to 25 and 29 to 31,24 while having due regard to the special characteristics of international jurisdiction. In other words, the first paragraph provides for an abstract and patulous standard based on “substantial connection”, while the second strives for predictability and legal certainty. In 2005, the Supreme Court developed a new, broadly formulated doctrine,25 which has been followed since.26 It held that “[t]he determination of international jurisdiction should follow the basic idea of aiming to achieve impartiality between the parties, and appropriateness, speediness and economy of adjudication, and should, more concretely, take into account not only private interests […], but also interests of the court as well as of the state […]. The issue of which interest among such diverse interests deserves protection should be determined reasonably, applying in each individual case the objective criteria of substantial relationship between the court and the parties, and substantial relationship between the court and the case in dispute.” However, the Supreme Court has failed to live up to the expectation that it would set up elaborate rules on international jurisdiction and has thus been criticised for its case-by-case analysis as well as for failing to take the venue provisions into sufficient consideration. According to the Bill, Article 2 of the PILA will survive the upheaval with slight variations and remain in place as the general principle in a new Section on international jurisdiction. The first paragraph will specify, in accordance with the doctrine of the Supreme Court, ‘fairness, justice, promptness, and economy’27 as “the ideas underlying the allocation of international jurisdiction”. Despite the more detailed, matter-specific rules being introduced in other Chapters of the PILA, Article 2 should continue to allow Korean courts to have jurisdiction based on “substantial connection” and to instruct them to refer to the venue provisions in determining international jurisdiction, but only to the extent that there exists no Art. 42-43 of the Bill. Art. 29(1) of the CPA provides “[p]arties to a lawsuit may decide by agreement the competent court of the first instance”. 25 Supreme Court Judgment of 27 January 2005, Docket No 2002Da59788. Unofficial translation by the Supreme Court Library available at . 26 Supreme Court Judgment of 29 May 2008, Docket No 2006Da71908,71915; Supreme Court Judgment of 15 July 2010, Docket No 2010Da18355; Supreme Court Judgment of 24 May 2012, Docket No 2009Da22549; Supreme Court Judgment of 12 July 2013, Docket No 2006Da17539; Supreme Court Judgment of 10 April 2014, Docket No 2012Da7571. 27 The author prefers this translation of the phrase to that by the Supreme Court Library, i.e., “impartiality […], and appropriateness, speediness and economy […]”. 23 24

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Tidings from Korea specific provision in the PILA, other statute or treaty that applies to the particular dispute. 2.

Exclusive Jurisdiction Agreement

Although the PILA is silent on this, it is generally understood that, unlike the formation and substantive validity of a choice of court agreement, its form, effect, and admissibility are, regardless of its legal nature, governed by the lex fori.28 And the Supreme Court in 1997, i.e., before the PILA wholly amended the Conflict of Laws Act in 2001, with respect to an exclusive jurisdiction agreement in favour of a foreign court, required: (i) that the case not fall under the exclusive jurisdiction of Korean courts; (ii) that the chosen foreign court have valid international jurisdiction under its law; (iii) that the case have a reasonable connection with the foreign court; and (iv) that the exclusive choice of court agreement not be egregiously unreasonable or unfair to amount to a juridical act contrary to ordre public.29 Although the third criterion, reasonable connection, has been rightly criticised,30 the Supreme Court in the present case required as much with respect to the forum selection in favour of a Korean court. Such connection, if at all, should be with Korea, not its court. According to the Bill, Article 8 of the PILA will not require a reasonable connection with the chosen court. The Committee decided to follow the solution embraced by the Choice of Court Convention although Korea is not yet a Contracting Party.31 Further, Article 8(1) of the Bill entitles the parties to conclude choice of court agreements, which are deemed exclusive,32 albeit with some well-defined exceptions that mirror those found in Article 6(a)-(c) of the Choice of Court Convention. Consistent with this principle, Article 8(5) of the PILA will, in case of forum selection in favour of a foreign court, require the Korean courts to dismiss the proceedings unless the chosen court declines to hear the case or such agreement cannot be performed.33 It should be noted that the Bill limitingly permits parties to designate a court in maintenance matters.34

K.H. SUK, International Civil Procedure Law [in Korean] (2012) p. 118. See also R. GEIMER, Internationales Zivilprozessrecht, 7th ed, Köln 2015, para. 1677 and 1757. 29 Supreme Court Judgment of 9 September 1997, Docket No 96Da20093. See also K.H. SUK, Korea, Encyclopaedia of Private International Law (2017), p. 2247. 30 K.H. SUK, Private International Law and International Litigation [in Korean], Vol. III (2004), p. 224 et seq. See also T.-A. RHO (note 19), p. 50-51. 31 K.H. SUK (note 7), p. 271. 32 Art. 8(3) of the Bill. See also Art. 3(b) of the Choice of Court Convention. 33 See also Art. 6(d)-(e) of the Choice of Court Convention. 34 Art. 60(2) of the Bill. 28

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Issey Park 3.

Exclusive Jurisdiction Related to Intellectual Property Rights

It is generally accepted that the courts of the State where the registration was applied for or took place have exclusive jurisdiction in proceedings concerned with the registration or validity of the patent.35 The same holds true in Korea and the disputes regarding the registration or validity are regarded as the most problematic of all patent disputes.36 However, such international jurisdiction does not derive from the Patent Act. While Article 186(1) provides that “[t]he Patent Court of Korea shall have exclusive jurisdiction” for certain proceedings, it is essentially concerned with domestic jurisdiction rather than international.37 According to Article 10(1) of the Bill, the PILA will introduce rules dealing with exclusive jurisdiction, inter alia, for proceedings concerned with the formation, validity, or extinguishment of intellectual property rights that require either registration or deposit. However, such rules do not apply when the matter arises as an incidental question.38 The stringent conclusion of the Supreme Court in the case at hand with respect to proceedings the subject matter of which involve interpretation and effect of contractual obligations, should be recalled: “when the main issues of dispute or examination are concerned only with [the] interpretation of a contract to transfer patent rights or the validity of such a contract, […] a lawsuit seeking performance of such transfer […] cannot be seen as falling under the exclusive jurisdiction of the country of registration or where registration has been filed.” This exception which applies to transfers or other acts of disposition required by contract between the parties, appears to have made its way as a proviso into subparagraph 1 of Article 10(1), according to which Korean courts have exclusive jurisdiction in proceedings relating to registration in public registers.

III. A.

Consumer Protection for Aircraft Passengers Background

On 24 June 2011, a law professor purchased a business class round-trip ticket from Incheon, Korea to Paris, France through a Korean travel agency. The return flight – Air France flight AF 262 operated by Korean Air as KE 902 – scheduled to depart from Charles de Gaulle Airport at 21:00 on 17 September 2011, was overbooked. He was the twenty-first business class passenger to check in, but only 35 K.H. SUK, Private International Law and International Litigation [in Korean], Vol. IV (2007), p. 597 et seq.; M. LEHMANN, Exclusive Jurisdiction, in A. DICKINSON/ E. LEIN, (eds), The Brussels I Regulation Recast, Oxford 2015, para. 8.40; Art. 11(1) of the draft Guidelines on Intellectual Property in Private International Law, in ILA Intellectual Property and Private International Law Committee, Fourth Activity Report (2018), p. 11. 36 K.H. SUK (note 29), p. 2246. 37 Y.S. LEE et al., Republic of Korea, in A. CARBALLO LEYDA (ed), Asian Conflict of Laws: East and South East Asia, Kluwer Law International 2015, p. 88. 38 Art. 10(3) of the Bill.

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Tidings from Korea 20 seats were available. Unfortunately, he was denied a business class seat. There were some remaining seats in first class and in economy class. However, for health reasons, he declined the offer of an economy seat with refund of the difference by Air France, which had maintained that the first class seats were not available as the in-flight meal could not be prepared. Subsequent proposals of alternative route via Tokyo, Japan were also rejected by the passenger. He then asked for a first class seat in KE 904 that was to depart for Incheon at 23:00, i.e. two hours later than the original take-off, because no business class seat was available in that flight either. When the request was not granted, the passenger chose to purchase the ticket from Korean Air at EUR 5,214.85. Air France issued a Certificate of Denied Boarding, awarded him EUR 600.00 in compensation, and refunded the original airfare. Not long after landing, the passenger filed a suit against Air France before the Seoul Central District Court. The plaintiff claimed payment of the Korean Air fare minus the compensation and the refunded airfare, and some moral damages. The defendant’s case was that the compensation and the refund had been made in accordance with the Regulation (EC) No 261/2004. As to compensation for denied boarding in the event of overbooking, the carrier was merely obligated under the contract to grant the compensation provided for by “the law in force”. Therefore, the main issue was whether Article 27 of the PILA, the second paragraph of which stipulates that the objective governing law of consumer contracts shall be “the law of the country of the consumer’s habitual residence”, was applicable to the dispute. In small claims cases, the judgment need not state the reasons upon which it is based. Thus, the plaintiff had to make an appeal just to seek some elucidation. The appellate panel of the Seoul Central District Court refused to apply Article 27 but instead found the Regulation to be the applicable law.39 Then, the final appeal was made by the plaintiff-appellant.40 B.

Considerations

The Supreme Court (Supreme Court Judgment of 28 August 2014, Docket No 2013Da8410)41 reversed the judgment of the Seoul Central District Court which, in applying the said Regulation pursuant to Article 26 of the PILA, found the contract of carriage to be most closely connected with France where the airport of departure was located, and excluded, referring to the Rome Convention, 42 the application of Article 27 to the contract at hand. The Supreme Court nevertheless 39

Seoul Central District Court Judgment of 5 December 2012, Docket No 2012Na

24544. According to the Supreme Court, although they “amount to over 70 percent of all civil suits”, “[o]nly about two percent of the judgments rendered by trial courts on small claim cases are appealed”, at . 41 Unofficial translation of the Summary available in T.-A. RHO, The Major Judicial Precedents in Private International Law and International Business Transaction Law, Korean Yearbook of International Law 2 (2014), p. 363. 42 Convention on the Law Applicable to Contractual Obligations opened for signature in Rome on 19 June 1980 (80/934/EEC). 40

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Issey Park confirmed the principle in Article 26(1) that the objective governing law of a contract shall be “the law of the country with which it is most closely connected”. The Supreme Court did not exclude from the scope of consumer contract protection either a contract of carriage or a contract for supply of services where the services are to be supplied to the consumer exclusively in a country other than that in which the consumer has his habitual residence.43 It then applied Article 27(2) of the PILA to find the governing law to be the law of the country in which the consumer has his habitual residence. However, the Supreme Court did not clarify which subparagraph(s), 1 and/or 2, of Article 27(1) was applicable to the case. C.

Comments

1.

Restriction of Party Autonomy

As to the choice of law rules on contractual obligations, Article 25 of the PILA establishes the principle of party autonomy and allows dépeçage, while Article 26 introduces the closest connection test, along with the presumption of characteristic performance. However, Article 27, which is modelled on Article 5 of the Rome Convention, restricts party autonomy to protect passive consumers. While Article 28 does the same to protect certain employees, it should be noted, as mentioned above, that both Articles 27 and 28 also contain special rules on international jurisdiction over consumer contracts and individual contracts of employment, respectively. Now, such special rules are separately found in Articles 42 and 43 of the Bill. According to Article 27(1), a choice of law made in a consumer contract that falls into one of its three subparagraphs cannot deprive the consumer of the protection afforded to him by the mandatory rules of law of the country in which he has his habitual residence.44 Article 27(2) then provides, as an exception to the general rule in Article 26, for a special default choice of law rule for consumer contracts in the absence of a choice of law by the parties, whereby the consumer contract shall be governed by the law of the country of the consumer’s habitual residence.45 Article 27(3) states that the formal validity is also governed by the law of the country in which the consumer has his habitual residence. These are found in Article 47 of the Bill. 2.

Scope of Consumer Protection

Unlike Article 5(4) of the Rome Convention or Recital (32) and Article 6(4) of the Rome I Regulation46 which expressly exclude contracts of carriage from consumer Although the PILA is silent, legal persons are not considered to be covered. See also Art. 5(1) and (2) of the Rome Convention. 45 Ibid., Art. 5(3). 46 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations. 43 44

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Tidings from Korea protection, the PILA is silent on whether or not Article 27 applies to contracts of carriage. However, it may be undesirable and impractical to apply a variety of laws depending on where the consumers habitually reside.47 For instance, the Supreme Court in the Air China case stated, although in a different context, that “applying different jurisdiction to damages claims based on the nationality of the claimants and their bases of boarding the airplane, when these claimants underwent the same accident on the same aircraft, causes another problem from the viewpoint of equity.”48 Such silence arguably originates in an imperfect understanding of the implications of international conventions and their taking precedence over conflict of law rules – notably the Montreal Convention49 in this Air France case. As a more down-to-earth explanation, such solution was also embraced because it had been embraced by the Swiss counterpart.50 To be sure, the literal interpretation that the Supreme Court favoured in Air France grants stronger protection to the weaker party, i.e., passengers who are passive consumers. However, teleological reduction of Article 27 has rightly been proposed by one scholar as a ground to exclude contracts of carriage from the material scope of Article 27.51 The law applicable to contracts of international carriage which supplements the Montreal Convention should be determined under the general rules in Articles 25 and 26, and not by the special conflict rules in Article 27 applicable to consumer contracts.52 The Seoul Central District Court erred in the process of reaching the correct conclusion, for the governing law is in fact the French law based on the principal place of business of the defendant that was to effect the characteristic performance, i.e., international carriage. 53 In practice, 47 M. MCPARLAND, The Rome I Regulation on the Law Applicable to Contractual Obligations, Oxford 2015, para. 12.26. 48 Supreme Court Judgment of 15 July 2010, Docket No 2010Da18355, unofficial translation by the Supreme Court Library, available at . See also T.-A- RHO (note 19), p. 34 et seq.; J.-H. LEE, International Jurisdiction to Adjudicate under the Korean Private International Law: Analysis of Recent Leading Cases of the Supreme Court of Korea, Seoul Law Journal 53 (3) (2012), p. 650 et seq. 49 Convention for the Unification of Certain Rules for International Carriage by Air. 50 Art. 120 of the Federal Act on Private International Law of 18 December 1987 of Switzerland; K.H. SUK, Private International Law [in Korean], 2013, p. 327. 51 K.H. SUK, Court Judgments on the Scope of Consumer Contracts under the Private International Law Act of Korea: With Reference to the Teleological Reduction of Article 27 [in Korean], Korea Private International Law Journal 22 (1) (2016), p. 56. Cf. C.-Y. KWON, Air Carrier’s Civil Liability for Overbooking [in Korean], The Korean Journal of Air & Space Law and Policy 31(1) (2016), p. 107-108. See also MCPARLAND (note 47), p. para. 12.30. 52 K.H. SUK (note 51), p. 54. See also A. BELOHLÁVEK, Rome Convention - Rome I Regulation, Juris 2010, para. 06.260. 53 K. CHUNG, Overbooking in the Contract for International Air Passenger Transportation, and the Application of the Act on the Regulation of Terms and Conditions: Seoul Central District Court Decision 2012Na24544 delivered on December 5, 2012 [in Korean], HUFS Law Review 39 (4) (2015), p. 25; K.H. SUK (note 51), p. 53.

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Issey Park notwithstanding the intervention of the law of the country of the consumer’s habitual residence, contracts of carriage should, with regard not only to contractual but also to non-contractual obligations, specify the governing law through a choice of law clause or incorporate such by reference.54 3.

Criteria for Passiveness

For a consumer to qualify as passive and hence enjoy protection under the mandatory rules of law of the country of his habitual residence according to Article 27(1), the contract, the purpose of which can be regarded as being outside his profession or business activity, must fall into one of the three subparagraphs of Article 27(1) that are modelled on the three indents of Article 5(2) of the Rome Convention. The first two criteria, subparagraphs 1 and 2 of Article 27(1), are as follows: “where, prior to the conclusion of the contract, the other party engaged in or directed to that country professional or business activities including soliciting business through publicity, and the consumer had taken steps in that country necessary for the conclusion of the contract”; and “where the other party received the consumer’s order in that country”. The passenger purchased the ticket through a Korean travel agency. However, the role that legal person played – which could help determine whether the first and/or second subparagraph(s) would apply – does not appear from either of the two judgments: the first criterion may be satisfied if, via the Internet, Air France is considered to have targeted its activity towards Korea and the plaintiff effected the purchase directly; and the second may be satisfied if the travel agency is considered as the defendant’s place of business.55 Since it had already applied Article 27 of the PILA to the contract of carriage, the Supreme Court perhaps could have elaborated on these factors. The requirement in the first subparagraph that “the consumer had taken steps in that country necessary for the conclusion of the contract” makes it difficult for the PILA to protect active consumers. However, the first subparagraph of Article 42(1) of the Bill, in line with Article 17.1 of the Brussels I Regulation Recast,56 merely demands that the contract fall within the scope of such professional or business activities, in an effort to cover certain active consumers.57

K.H. SUK (note 51), p. 56. K. CHUNG (note 55), p. 22; K.H. SUK, Protection of Consumers in Disputes Arising from Internet Purchases (so-called “Overseas Direct Purchase”): With a Focus on the Private International Law Act, the Arbitration Act and the Standard Terms and Conditions Regulation Act [in Korean], Seoul Law Review 57 (3) (2016), p. 86-87. 56 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast). 57 Art. 3-4 of the Code of Civil Procedure of Japan. 54 55

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Tidings from Korea

IV. Constitutional Value as Yardstick of Public Policy A.

Background

On 22 August 1910, Japan signed the Japan-Korea Treaty of 1910 with the Korean Empire, and soon started to rule the Korean Peninsula. Japan surrendered on 15 August 1945, effectively ending the Pacific War. During the Japanese occupation, Korean workers were forced to work at machine shops and shipbuilding factories owned by Mitsubishi Heavy Industries, the former Mitsubishi, in Hiroshima under the National Service Draft Ordinance, enacted in accordance with the Japanese National Mobilisation Law of 1938. On 1 May 2000, some of these former workers and their bereaved families – the plaintiffs in this Mitsubishi case – initiated proceedings against the newly established Mitsubishi Heavy Industries, Ltd. (“MHI”) before the Busan District Court, seeking payment of accrued wages and damages. The plaintiffs had first filed a suit in 1995 against MHI with the Hiroshima District Court in Japan, which dismissed the claims in 1999. The appeal and the final appeal were also dismissed by the Hiroshima High Court in 2005 and the Supreme Court of Japan in 2007, respectively. The Hiroshima High Court, according to the judgment of the Busan High Court,58 dismissed the claims on the grounds that the limitation period of twenty years for the damages claim based on forced mobilisation and labour, and the extinctive prescription of ten years for claims for breach of safety obligations and unpaid wages had elapsed. It should be noted that the Hiroshima High Court did not regard the Japanese mobilisation as unlawful. When the plaintiffs brought their case to the Busan District Court in 2000, the appeal was still pending in the Hiroshima High Court. The Busan District Court did not stay proceedings and proceeded to address the merits for it considered that the Japanese court was unlikely to render a judgment recognisable in Korea.59 Nevertheless, while the appeal was pending in the Busan High Court, the judgment of the Supreme Court of Japan (the “Japanese Judgment”) was rendered. As a consequence, the issue of lis pendens turned into a matter of res judicata. The Busan High Court found no public policy ground to refuse recognition of the Japanese Judgment. The plaintiffs made the final appeal contending, inter alia, that the judgment of the Busan High Court was in violation of the Constitution and/or that the appellate court had erred in its construction. B.

Considerations

The Supreme Court (Supreme Court Judgment of 24 May 2012, Docket No 2009 Da22549)60 reversed the judgment of the Busan High Court, refusing recognition Busan High Court Judgment of 3 February 2009, Docket No 2007Na4288. Busan District Court Judgment of 2 February 2007, Docket No 2000GaHap7960. 60 Unofficial translation by the Supreme Court Library available at . The Supreme 58 59

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Issey Park of the Japanese Judgment. With regard to the public policy test under Article 217(1) of the CPA, the Supreme Court held that whether the result of the recognition is incompatible with the “good morals and other social order” of Korea was to be determined by considering the influence, at the time of determination, that the recognition would exert on the basic moral beliefs and social orders that the domestic legal order of Korea intends to protect, in view of the connection between the matters dealt with by the foreign judgment and Korea. The Supreme Court also required this assessment to take comprehensively into account “[t]he foreign judgment’s holding, reasoning, and ramification of [its] recognition” in Korea. The Supreme Court went on to point out that the Japanese Judgment considered the application of the National Mobilisation Law and the National Service Draft Ordinance of Japan to the Korean Peninsula and workers to be valid, on the premise of normative perception that the colonisation was lawful. The Supreme Court referred to, inter alia, the first part of the Preamble of the Constitution: “We, the people of Korea, proud of a resplendent history and traditions dating from time immemorial, upholding the cause of the Provisional Republic of Korea Government born of the March First Independence Movement of 1919 and the democratic ideals of the April Nineteenth Uprising of 1960 against injustice”.61 As a result, the Supreme Court refused to recognise the Japanese Judgment, holding it to be directly at odds with the core values of the Constitution that views the mobilisation as illegal. The result of the recognition itself would be clearly contrary to the “good morals and other social order” of Korea. C.

Comments

1.

Recognition of Foreign Judgments

In Korea, a foreign judgment that fulfils the requirements of Article 217(1) of the CPA is automatically recognised62 and has the same effects as those attached to it in the foreign jurisdiction where it was rendered.63 The five conditions listed in

Court Judgment of 24 May 2012, Nippon Steel, Docket No 2009Da68620 is not mentioned due to the similarity in both its factual background and legal issues. Nippon Steel came to an first (Supreme Court Judgment of 30 October 2018, Docket No 2013Da61381) and then Mitsubishi (Supreme Court Judgment of 29 November 2018, Docket No 2013Da67587). 61 Unofficial translation by the Constitutional Court available at . 62 Article 217(1) of the CPA was amended in 2014 to expressly cover not only judgments of foreign courts that are no longer subject to ordinary recourse but also others that may be deemed equivalent in effect. See also G. LEE, Recognition and Enforcement of a Foreign Judgment under the Civil Procedure Act and the Civil Enforcement Act Revised in 2014, Korean Yearbook of International Law 2 (2014), p. 314. 63 K.H. SUK, Recognition and Enforcement of Foreign Judgments in the Republic of Korea, this Yearbook (2013/2014), p. 435; K.H. SUK (note 29), p. 2251.

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Tidings from Korea Article 217(1) of the CPA are that it is no longer subject to ordinary recourse,64 international jurisdiction, service, public policy, and reciprocity. 65 The public policy condition under the third subparagraph – that the foreign judgment is not contrary to the “good morals and other social order” of Korea – refers to the international public policy, i.e., “that part of the public policy of a State which, if violated, would prevent a party from invoking a foreign law or foreign judgment”.66 International public policy encompasses both procedural and substantive violations.67 The question is rather whether recognition leads to a result contrary to the public policy, not whether the foreign judgment itself is incompatible with it.68 Mitsubishi surely raises a number of issues besides recognition of the Japanese Judgment. Some relate to the public policy exception to reject the foreign law: whether the former Mitsubishi and the defendant MHI are the same legal entity; whether individual claims are extinguished in accordance with the Agreement on the settlement of problems concerning property and claims and on economic cooperation;69 and whether the plaintiffs are prevented from exercising their rights.70 However, the primary private international law question is whether the foreign judgment can be recognised in Korea. This turns out to be a particularly intriguing question since a Japanese judgment is at stake. 71 Indeed, Korea and Japan are thought to have common understanding of the objective scope of res judicata. 2.

Public Policy Test

Although révision au fond is generally prohibited,72 the public policy test in the third subparagraph of Article 217(1), which bears some resemblance with the fourth subparagraph of Section 328(1) of the Code of Civil Procedure of 64 This may exactly match “final and conclusive”. See Section 2 of Uniform Foreign Money-Judgments Recognition Act (“This Act applies to any foreign judgment that is final and conclusive and enforceable where rendered even though an appeal therefrom is pending or it is subject to appeal”). 65 See generally, K.H. SUK, South Korea, in A. CHONG (ed), Recognition and Enforcement of Foreign Judgments in Asia (2017), p. 180-201, available at . 66 P. MAYER/ A. SHEPPARD, Final ILA Report on Public Policy as a Bar to Enforcement, Arbitration International 19 (2) (2003), p. 251. 67 Supreme Court Judgment of 28 October 2004, Docket No 2002Da74213. 68 P. JENARD, Report on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (Signed at Brussels, 27 September 1968), Official Journal C 59 (1979), p. 44. 69 UNTS, Vol 583, p. 173 et seq. 70 K.H. SUK, Compensation of Damage resulting from Forced Labor during Japanese Colonial Era and the Law Applicable to Wages Claim [in Korean], Seoul Law Journal 54 (3) (2013), p. 283-325. 71 Y. KWON, Litigating in Korea: a general overview of Korean civil procedure, in K. CHO (ed.), Litigation in Korea (2010), p. 3. 72 Art. 27(1) of the CEA.

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Issey Park Germany,73 looks in principle to the operative part and the underlying reasoning of the foreign judgment.74 In this regard, the Supreme Court made clear that “[t]he foreign judgment’s holding, reasoning, and ramification of [its] recognition shall be considered as a whole.” Although it had been submitted that the conclusion reached by the Japanese Supreme Court that the colonisation was lawful and the application of the National Mobilisation Law and the National Service Draft Ordinance to the workers had a bearing on neither the operative part nor the underlying grounds, 75 cogent arguments have recently been put forward to take account of the reverberations the foreign judgment has across the domestic legal order.76 In Mitsubishi, the Supreme Court, with respect to substantive public policy, clearly required the matter at hand to have some connection with Korea for it to refuse recognition on that ground.77 However, such connection would not be required in case of a violation of ordre public universel.78 The Supreme Court also makes it clear that the point in time which is relevant for determining whether the result is incompatible with public policy is not the time when the foreign court made its determination but when the Korean court as the addressed court is to rule on recognition. This is so because what matters is the impact of recognition at that very moment on the addressed jurisdiction, even though the effect of the foreign judgment extends automatically from the time it takes effect in the rendering jurisdiction.79 3.

Role of Constitutional Values

An interesting point regarding the unlawfulness of the draft is that the Supreme Court, in determining the violation of substantive public policy, referred not only to the current but also to the Founding Constitution. In Korea, the Constitution is considered to include fundamental principles reflecting the most basic notions of morality and justice, and therefore may play a role in refusing not only recognition

Art. 118(iii) of the Code of Civil Procedure of Japan. K.H. SUK (note 28), p. 375. See also Supreme Court Judgment of 28 October 2004, Docket No 2002Da74213. 75 M.-H. HO, Zum Gegenstand der Beurteilung der Sittenwidrigkeit eines ausländischen Urteils – im Bezug auf die Entscheidungen des OGH über die Zwangsrequisition in der japanischen Besatzungszeit [in Korean], SNU Law Review 6 (2016), p. 73. 76 P.-B. LEE, The Subject Matter for Examination of Public Policy Exception in the Recognition of a Foreign Judgment, Juris 44 (2018), p. 291. 77 K.H. SUK, Private International Law and International Litigation [in Korean], Vol. I (2001), p. 307. 78 K.H. SUK (note 28), p. 376. See also, I. THOMA, Public policy, Encyclopaedia of Private International Law (2017), p. 1457-1458; T. DOMEJ, Recognition and enforcement of judgments (civil law), Encyclopaedia of Private International Law (2017), p. 1476. 79 K.H. SUK (note 77), p. 320-321. 73 74

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Tidings from Korea of a foreign judgment but also application of a provision of foreign law.80 With respect to the latter, Article 10 of the PILA provides that “[t]he application of provisions of a foreign law is excluded if such application would be manifestly incompatible with the good morals and other social order of the Republic of Korea.”81 The question is also whether the result of the application of a foreign law would be manifestly incompatible with Korean public policy, as is the case with the recognition of foreign judgments.82 Although the Supreme Court judgment in this saga would ultimately not be recognised in Japan, this Mitsubishi case is likely to have as significant implications in Korea as those of the decision of the Supreme Court of the United States in the Mitsubishi case of 1985,83 for it introduces Constitutional values as a yardstick of public policy.84

V.

Concluding Remarks

During the 2010s, albeit perhaps not to the same extent as in Japan or the People’s Republic of China, Korea witnessed considerable developments in its private international law. The three judgments of the Supreme Court presented in this article are certainly only a fraction of them. Further, as it was updated at the HCCH Asia Pacific Week 2017 held in Seoul, the Bill was introduced on 23 November 2018. The proposed new set of rules on international adjudicatory jurisdiction should enter into force shortly. In 2009Da19093, involving a choice of Korean court in a patent transfer case, the Supreme Court conformed to its jurisprudence on choice of court agreements conferring exclusive jurisdiction upon a foreign court by requiring that the case should have a reasonable connection with Korea. However, according to the Bill, the PILA will not require such reasonable connection. The drafting Committee took the Choice of Court Convention into consideration and it remains to be seen if Korea will join the Convention before long. The Bill introduces rules dealing with exclusive jurisdiction, inter alia, for proceedings concerned with the formation, validity, or extinguishment of intellectual property rights that require registration or deposit. In 2013Da8410, commonly referred to as the Air France case, the Supreme Court embraced a literal interpretation of Article 27 of the PILA and consequently decided not to exclude contracts of carriage from the scope of consumer contract 80 K.H. SUK, Recognition in Korea of Japanese Judgments on Forced Labor Cases, Korean Yearbook of International Law 2 (2014), p. 149. 81 Art. 23 of the Bill. See also Art. 4 of Convention of 24 October 1956 on the law applicable to maintenance obligations towards children; Art. 16 of the Rome Convention; Art. 21 of the Rome I Regulation. 82 M.-H. HO (note 75), p. 78. 83 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614. 84 K.H. SUK (note 80), p. 165.

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Issey Park protection. Although it is true that, unlike the Rome Convention or the Rome I Regulation, the PILA does not specify such exclusion, the Swiss approach that inspired Article 27 seems to prompt such exclusion despite the absence of any express reference. While teleological reduction has been proposed as a ground to exclude contracts of carriage from the scope of Article 27, according to the Bill, the PILA will, in line with 17.1(c) of the Brussels I Regulation Recast, broaden its protection by covering certain active customers. In 2009Da22549, the Supreme Court proclaimed Constitutional values as a yardstick for substantive public policy in refusing recognition of a judgment from Japan’s highest court which had dismissed claims for payment of accrued wages and damages from the Korean plaintiffs, forced labourers during the colonial era and their bereaved families. While it has been argued that the conclusion reached by the Supreme Court of Japan that the colonisation was lawful should not have stood in the way of its recognition, this Mitsubishi judgment, which will not be recognised in Japan, will have significant implications in Korea. It remains to be seen if the wholly amended PILA with its new detailed rules on international adjudicatory jurisdiction will be the true bearer of glad tidings from Korea before the end of the 2010s and further trigger and contribute to the harmonisation of private international law in Northeast Asia in the 2020s.85

85 K.H. SUK, Harmonization of Private International Law Rules in Northeast Asia, 114 (1) (2015), p. 1-26.

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FORUM ________________

FORUM SHOPPING IN INTERNATIONAL LITIGATION Claudia CAVICCHIOLI*

I.

II.

The Need to Fight against Certain Procedural Strategies Regarding Choice of Forum A. The Analysis of the Procedural Strategies Regarding Choice of Forum 1. The Analysis of the Underlying Considerations of Procedural Strategies Regarding Choice of Forum 2. The Categorisation of the Procedural Strategies Regarding Choice of Forum B. The Shortfalls Affecting the Mechanisms at French Courts’ Disposal to React to the Procedural Strategies Regarding Choice of Forum 1. The Analysis of the Mechanisms Used by French Courts to React to the Procedural Strategies Regarding Choice of Forum 2. The Existence of Unsanctioned Procedural Strategies Regarding Choice of Forum The Proposition of a New Legal Category: The Forum Shopping Malus A. The Methodology to Identify a Forum Shopping Malus 1. The Methodology in the Context of Primary Proceedings (Instance Directe) 2. The Methodology in the Context of an Action Aimed at Recognising or Enforcing a Foreign Judgment (Instance Indirecte) B. The Regime of Forum Shopping Malus 1. The Power to Relinquish Jurisdiction 2. The Power to Issue Injunctions

Issues relating to international jurisdiction and conflicts of jurisdiction have long remained a partially uncharted territory.1 International jurisdiction was regarded as *

PhD, Avocat au Barreau de Paris, Managing Associate at Linklaters LLP. This contribution summarises some of the ideas expounded by the author in her thesis on “The judicial treatment of procedural strategies relating to the choice of forum in international commercial litigation” (“Le traitement juridictionnel des stratégies procédurales touchant au choix de for dans le contentieux commercial international”). 1 H. BATIFFOL’s book on Aspects philosophiques du droit international privé (Dalloz, 1956) does not devote any development to issues related to conflicts of jurisdiction. See M.-L. NIBOYET, L’action en justice dans les rapports internationaux de droit privé, Yearbook of Private International Law, Volume 20 (2018/2019), pp. 413-438 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Claudia Cavicchioli the “poor cousin”2 of private international law, “barely an object of rights”3 and was thus “disregarded”4 by academics.5 The creation of a European area – and adopting an underlying objective of simplifying the recognition and reciprocal enforcement of judgments6 – as well as French courts’ assertion of jurisdiction over disputes involving a foreign party7 have opened the way to an in-depth study of the area of international jurisdiction and conflicts of jurisdiction.8 Recent scientific studies and the development of international instruments show that this area of private international law is now receiving an increasing attention, which is due, at least in part, to the importance attached to the right to access to justice.9 The predominant approach, however, is a static analysis focused on one litigant or conducted from the point of view of a particular State, which does not apprehend the international dispute as a whole. International litigation is a complex Economica, 1986, p. 1; L. USUNIER, La régulation de la compétence juridictionnelle en droit international privé, Economica, 2008, p. 1. 2 L. USUNIER (note 1), p. 1. 3 A. PILLET, Les conventions internationales relatives à la compétence judiciaire et à l’exécution des jugements, Sirey 1913, p. VI. 4 J.-P. NIBOYET, Traité de droit international privé français, t. VI, Sirey 1949, No. 1715. 5 Bartin had, however, laid the groundwork for a study on the international jurisdiction of the courts, independent of any conflict-of-law analysis, at the beginning of the 20th century. See É. BARTIN, Principes de droit international privé selon la loi et la jurisprudence françaises, t. 1, Domat-Montchrestien 1930, para. 119. 6 Treaty establishing the European Economic Community dated 25 March 1957. Pursuant to Art. 220 of said Treaty, the Member States agreed to enter into negotiations with a view to securing “the simplification of formalities governing the reciprocal recognition and enforcement of judgements of courts or tribunals and of arbitration awards”. 7 Cass. civ. 1st, 15 May 1963, Patino, with case comments by Ph. MALAURIE, Clunet 1963, p. 1016; H. MOTULSKY, J.C.P. 1963, II, p. 13365; P. LAGARDE, Rev. crit. dr. int. pr.1964, p. 532; P. HÉBRAUD, Revue trimestrielle de droit civil (RTD civ.) 1964, p. 164; B. ANCEL/ Y. LEQUETTE, Les grands arrêts de la jurisprudence française de droit international privé, 5th ed., Dalloz 2006, No. 38-39; Cass. civ. 1st, 19 October 1959, Pelassa, with case comments by Y. LOUSSOUARN, Rev. crit. dr. int. pr.1960, p. 215; G. HOLLEAUX, D. 1960, p. 37; Cass. civ. 1st, 30 October 1962, Scheffel, with case comments by Ph. FRANCESCAKIS, Rev. crit. dr. int. pr.1963, p. 387; G. HOLLEAUX, D. 1963, p. 109 and B. ANCEL/ Y. LEQUETTE, Les grands arrêts de la jurisprudence française de droit international privé, 5th ed., Dalloz 2006, No. 37. 8 H. GAUDEMET-TALLON, La prorogation volontaire de juridiction en droit international privé, Dalloz 1965; D. HOLLEAUX, Compétence du juge étranger et reconnaissance des jugements, Dalloz 1970; G.A.L. DROZ, Compétence judiciaire et effets des jugements dans le Marché commun, Dalloz 1972; Ph. THERY, Pouvoir juridictionnel et compétence. Étude de droit international privé, Thèse Paris II, 1981; P. LAGARDE, Le principe de proximité dans le droit international privé contemporain, Recueil des Cours 1986, t. 196, p. 9. 9 C. CHALAS, L’exercice discrétionnaire de la compétence juridictionnelle en droit international privé, PUAM 2000, p. 19.

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Forum Shopping in International Litigation problem,10 where several actors interact with each other during the different phases of the proceedings, by developing what can be described as a “procedural strategy”, namely a series of acts which are implemented in order to pursue a long-term objective.11 In the context of international litigation, faced with blurred national boundaries, claimants are called upon to decide before which tribunal to lodge their case. Choice of forum thus becomes part of the procedural strategy of the litigants, who will aim at maximising their chances of success by choosing the most suitable forum.12 Such a strategic choice characterises the phenomenon of forum shopping, which can be defined as “a common practice in international litigation, whereby the plaintiff chooses a court where to lodge his case”.13 Choice of forum will be based on a cost-benefit analysis and on a number of considerations, aiming at selecting the forum that will be the most advantageous.14 Two constituent elements characterise forum shopping. First, at least two legal systems must have concurrent jurisdiction over the same dispute. Such concurrent jurisdiction can also be created by the plaintiff himself, who may alter a connecting factor in order to benefit from a “provoked jurisdiction” of a court which would not otherwise have had jurisdiction over the case. Second, there must be a lack of uniformity between the legal systems at play. In the case of an international dispute, these two conditions will be present in the vast majority of cases. As regards the first element, two factors may contribute to the existence of a plurality of legal systems with concurrent jurisdiction over the same dispute. First of all, since the international dispute presents a connection to multiple States, several rules on international jurisdiction may apply and grant jurisdiction to the courts of different States. Given that the rules on international jurisdiction have a unilateral nature, nothing will prevent the existence of concurrent jurisdiction.15 Moreover, the presence of a plurality of potentially available fora may be due to jurisdictional options that are provided for by the rules on international jurisdiction. For instance, Regulation No. 2201/2003 concerning jurisdiction and the 10 The term “complexity” is to be construed here in accordance with its etymology complexus, which means “that is woven together” in an interlaced intricacy (plexus). See, in this respect, E. MORIN, La stratégie de reliance pour l’intelligence de la complexité, Revue Internationale de Systémique 1995, Vol. 9, No. 2. 11 H. COUTAU-BEGARIE, Traité de stratégie, Economica 2011, p. 135; R. ARON, Paix et guerre entre les nations, Calmann-Lévy 2004, p. 283. 12 A.S. BELL, Forum Shopping and Venue in Transnational Litigation, Oxford University Press 2003, p. 335; L. USUNIER (note 1), p. 3. 13 P. DE VAREILLES-SOMMIERES, Le forum shopping devant les juridictions françaises, Trav. Com. fr. dr. int. pr. 1998-1999, p. 50. See, also, F. FERRARI, Forum shopping: pour une définition ample dénuée de jugements de valeurs, Rev. crit. dr. int. pr.2016, p. 85. 14 P.J. BORCHERS, Punitive Damages, Forum Shopping, and the Conflict of Laws, Louisiana L. Rev. 2010, Vol. 70, p. 529. 15 F. MAILHE, L’organisation de la concurrence internationale des juridictions – Le droit de la compétence internationale face à la mondialisation économique, Thèse Paris II, 2013, p. 6.

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Claudia Cavicchioli recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility sets out under in Article 3 no less than seven grounds of jurisdiction which are at the plaintiff’s disposal. Although, in certain disputes, not all of those grounds of jurisdiction may be relied upon by the plaintiff and although some grounds of jurisdiction may point to the same courts, the claimant will benefit from a jurisdictional option in a high number of cases. The same findings apply to Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, to Regulation No. 44/2001 and to their predecessor, the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, which has been criticised as being the “forum shopper’s charter”.16 As regards the second element, the existence of a lack of uniformity between different legal systems constitutes the raison d’être of forum shopping and will make it crucial for the plaintiff to choose between those heterogeneous systems. In this respect, the plaintiff will take into account a number of factors, including rules on jurisdiction, conflict-of-law rules, applicable substantive and procedural laws, factors relating to the administration of justice, accessibility, impartiality, costs, etc. The existence of uniform law only reduces the phenomenon of forum shopping, as, in the absence of supreme courts which would ensure a uniform interpretation, each signatory country remains free to construe the relevant texts.17 Forum shopping may also be accompanied by the multiplication of parallel legal proceedings, which is often a procedural strategy in itself: the plaintiff may file several lawsuits before different courts in order to multiply his chances of success and/or to intensify the pressure on the defendant; the defendant may also decide to bring a parallel claim before a different court in order to obtain a favourable judgment to be invoked in the context of the first procedure. Forum shopping is not, in itself, a reprehensible practice. It is even an unavoidable necessity, whenever several States have concurrent jurisdiction over a dispute. One must, however, question whether certain procedural strategies regarding choice of forum should not be sanctioned by French courts. This could be the case, for instance, in light of the motives guiding the author of the strategy, or because of the harm caused to the rights of the victim of the procedural strategies, or on the basis of other criteria. French courts can already rely on certain instruments to hinder the procedural strategies of the parties in international litigation. In the context of primary proceedings (instance directe), French courts may, for instance, refer, under certain conditions, to concepts such as fraud, abuse of right, or estoppel. When parallel proceedings have been brought by the litigants, French courts may rely on 16

R. FENTIMAN, Tactical Declarations and the Brussels Convention, The

Cambridge Law Journal 1995, p. 261. 17 In this respect, see Cass. com., 4 March 1963, Hocke, with case comments by P. LESCOT, Juris-Classeur périodique (JCP) 1963, II, p. 13376; B. GOLDMAN, Clunet 1964, p. 806 and P. LAGARDE, Rev. crit. dr. int. pr.1964, p. 264; also see F. FERRARI, Forum shopping et droit matériel uniforme, Clunet 2002, p. 383 and F. FERRARI, Forum Shopping Despite International Uniform Contract Law Conventions, I.C.L.Q. 2002, Vol. 51, p. 689.

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Forum Shopping in International Litigation mechanisms such as lis pendens or the rules on related actions. In the context of an action aimed at recognising or enforcing a foreign judgment (instance indirecte), French courts may apply the criteria regarding recognition or enforcement, and notably the notion of public policy and irreconcilable judgments, as well as the notion of res judicata. Given the growing development of procedural strategies and the evolution of legislation on civil procedure, it is questionable whether the current mechanisms are still adequate and sufficient. An in-depth analysis of such mechanisms will show that they do not allow French courts to apprehend and fight effectively against reprehensible procedural strategies. Despite their variety, these instruments – which often constitute a translation of domestic tools to an international context – are sometimes inappropriate to apprehend the strategies that might be developed in international litigation and can only partially solve issues relating to forum shopping, thus leaving “blind spots”18 intact. It is therefore proposed to create a new legal category, the forum shopping malus,19 based on an analysis of the infringement, by a given procedural strategy, of the opposing party’s fundamental rights. If the harm caused by the procedural strategy is disproportionate to the objective pursued, the choice of forum will be deemed to constitute a forum shopping malus. This new legal category will have to be endowed with a specific regime, which will grant new powers to French courts. On the basis of an analysis of the procedural strategies regarding choice of forum that are likely to be implemented by the parties, it will be shown that legal categories at French courts’ disposal are sometimes insufficient to apprehend and fight against certain procedural strategies (1.). On the basis of these findings, it will be proposed to introduce, amongst the mechanisms at French courts’ disposal, the forum shopping malus, which would confer on French courts a new power to relinquish jurisdiction and to issue injunction, and which would also enable them to coordinate more easily with other judges who could be called upon to decide on the same or on a related procedural strategy regarding choice of forum (2.).

I.

The Need to Fight against Certain Procedural Strategies Regarding Choice of Forum

Procedural strategies regarding choice of forum may have different features and be guided by a variety of reasons, such as the willingness to benefit from specific procedural and/or substantive rules, or to obtain a judgment that can be easily recog18 K. TRILHA SCHAPPO, Les angles morts d’un monde juridiquement hétérogène. Essai sur l’exercice stratégique de la volonté en droit international privé contemporain, Thèse Sciences Po, 2016, p. 6. 19 P. DE VAREILLES-SOMMIERES (note 13), p. 50. The notion of forum shopping malus has been created by Professor Pascal de Vareilles-Sommières. However, the present proposal consists in creating a legal category, endowed with a specific regime, on the basis of such notion.

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Claudia Cavicchioli nised or enforced abroad, or even to cause harm to the defendant. In order to assess whether the mechanisms that are used by French courts are adequate and sufficient for both apprehending such procedural strategies and sanctioning those that are reprehensible, it is first necessary to conduct an in-depth analysis of the procedural strategies regarding choice of forum that are likely to be implemented in the context of international litigation (A.). On the basis of this analysis, it will be possible to critically assess the mechanisms that are available to French courts – whether they are seized on the basis of European or domestic private international law – when those courts are faced with forum shopping. This analysis will highlight that such mechanisms do not allow French courts to properly apprehend the procedural strategies and identify and sanction those that might be unacceptable, which therefore remain, for some of them, fully effective (B.). A.

The Analysis of the Procedural Strategies Regarding Choice of Forum

An assessment of the practice of international litigation reveals that forum shopping is guided by a variety of considerations, which can be grouped in two macrocategories (1.). On the basis of such considerations, litigants will implement a number of procedural strategies, which can, themselves, be classified in two categories depending on their main characteristic features (2.). 1.

The Analysis of the Underlying Considerations of Procedural Strategies Regarding Choice of Forum

The procedural strategies regarding choice of forum may be guided by different underlying considerations, which can be grouped into two macro-categories, one relating to the characteristics of the legal system and the other relating to the opposing party. The first macro-category can in turn be divided into two sub-categories, one relating to the features of the legal infrastructure taken as a whole and one relating more specifically to the legal action at stake. When assessing the features of the legal infrastructure taken as a whole,20 plaintiffs can find support in a number of studies that have been conducted with a view to appraising and/or comparing the characteristics of different legal systems. For instance, since 2013, the European Commission has been publishing the EU Justice Scoreboard, which assesses the Member States’ judicial systems on the basis of key indicators of effective justice, namely efficiency, quality and judicial independence.21 When selecting a venue, a plaintiff can therefore take into account these studies in order to file his action before the most suitable court(s). 20 H. MUIR WATT, Aspects économiques du droit international privé (réflexions sur l’impact de la globalisation économique sur les fondements des conflits de lois et de juridictions), Recueil des Cours 2004, t. 307, p. 25. 21 European Commission, Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social

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Forum Shopping in International Litigation Depending on his objective, a plaintiff may, for instance, decide to file his action before the courts of a legal system which are either known for their swiftness or, on the contrary, for their lengthy proceedings. A renowned example can be found in case law relating to the Italian torpedo, a practice which consisted in circumventing the court having jurisdiction by filing a lawsuit before Italian courts. This procedural strategy is aimed at benefitting from the lengthy proceedings which generally characterise Italian courts, thereby stalling any parallel action brought before the court having jurisdiction via the rules on lis pendens which were set out under the Brussels I Regulation.22 Likewise, a plaintiff can take into account the existence of specialised international commercial chambers,23 and notably the possibility of conducting the procedure in a foreign language, if he has to file a high number or exhibits in a foreign language. On the contrary, he may have an interest in filing his lawsuit before a court where there is an obligation to translate all exhibits in the local language, if the opposing party’s defence relies on foreign language documents. The second sub-category linked to the characteristics of the legal system relates more specifically to the legal action at stake, as the plaintiff will naturally seek to select the court that will apply a favourable procedural and/or substantive legal regime, thus maximising his chances of success. In this respect, the claimant will choose a forum which provides for specific procedural features or which is likely to implement rules of private international law leading to the application of favourable substantive rules,24 thus implementing a legislative forum shopping.25 As such, a plaintiff can, for instance, seek to benefit from procedural mechanisms such as class actions, injunctions, or declaratory actions, or try to take advantage of rules on evidence (e.g., those relating to discovery or to the burden of proof). A claimant can also seek to obtain a specific substantive remedy, such as punitive damages or the revision of the amount of a penalty clause. Committee and the Committee of the Regions, EU Justice Scoreboard 2019, COM(2019) 198/2. 22 ECJ, 9 December 2003, C-116/02, Gasser, with case comments by CH. BRUNEAU, Dalloz (D.) 2004, p. 1046; H. MUIR WATT, Rev. crit. dr. int. pr. 2004, p. 444; A. HUET, Clunet 2004, p. 641; C. NOURISSAT, Procédures 2004, p. 13; A. MOURRE/ Y. LAHLOU, Revue de Droit des Affaires Internationales (RDAI) 2004, p. 223; R. SMITH/ J. FREEMAN, Mealey's International Arbitration Report 2005, p. 45. The rules on lis pendens under the Brussels I Regulation Recast provide for an exception where a court not designated in an exclusive jurisdiction clause has been seized of proceedings and the designated court is seized subsequently of proceedings involving the same cause of action and between the same parties (see Art. 31.2). 23 See, for instance, the initiatives towards the creation of the Brussels International Business Court (BIBC), the Netherlands Commercial Court (NCC), the Chamber for International Commercial Disputes of the Landgericht Frankfurt am Main and the international commercial chamber of the Paris Commercial Court and Paris Court of Appeal. 24 F.K. JUENGER, Forum Non Conveniens – Who Needs It?, in M. TARUFFO (dir.), Abuse of Procedural Rights: Comparative Standards of Procedural Fairness, Kluwer Law International 1999, p. 251. 25 A. NUYTS, Forum shopping et abus du forum shopping dans l’espace judiciaire européen, in Mélanges John Kirkpatrick, Bruylant 2004, p. 745.

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Claudia Cavicchioli As regards the second macro-category, relating to the opposing party, the plaintiff’s goal may consist in trying to facilitate the enforcement of the judgment that will be rendered, or rather in attempting to cause a prejudice to the opposing party. Obtaining a favourable judgment is often only a step in a party’s global strategy, whenever the opposing party is located in a foreign state and such judgment must be enforced. As such, a plaintiff will have to ensure that the judgment will be recognised or enforced in the relevant country. For instance, a procedural strategy aiming at obtaining punitive damages will be deprived of any effect if the judgment cannot be enforced in the country where the opposing party is domiciled or holds its assets. A plaintiff may, however, be guided by a more reprehensible goal, namely harassing or vexing the opposing party,26 by filing a lawsuit at the most inconvenient place for the adversary, even at some inconvenience to himself.27 For instance, a plaintiff could burden the defendant with a repetitive litigation, which consists in bringing an action in a number of different jurisdictions, thereby forcing the defendant to incur additional costs and spend more time in handling his defence.28 An analysis of the practice of international litigation shows numerous examples of repetitive litigations used as harassing behaviours.29 The defendant could also retaliate by having recourse to a reactive litigation,30 where he would act as a claimant in parallel proceedings, with a view to harassing the original plaintiff.31 Similarly, the plaintiff’s claim can aim at obtaining the most favourable settlement agreement with the opposing party. To achieve this, the plaintiff may file one or more actions and try to increase the costs incurred by the opposing party, so that the latter seeks a settlement agreement to limit his costs.32 In this

26 R.L. TUCKER, Vexatious Litigation as Unfair Competition, and the Applicability of the Noerr-Pennington Doctrine, Ohio Northern Un. L. Rev. 1995, Vol. 22, p. 119. 27 Gulf Oil Corp. v. Gilbert, 10 March 1947, US 1947, Vol. 330, p. 501, with case comments by E.B. TOLMAN, American Bar Association J. 1947, Vol. 33, p. 608 and E.L. Jr. BARRETT, California L. Rev. 1947, Vol. 35, p. 380. 28 A.D. VESTAL, Repetitive Litigation, Iowa L. Rev. 1960, Vol. 45, p. 525; J.P. GEORGE, Parallel Litigation, Baylor L. Rev. 1999, Vol. 51, p. 769; L.J. POLLEMA, Beyond the Bounds of Zealous Advocacy: the Prevalence of Abusive Litigation in Family Law and the Need for Tort Remedies, Un. of Missouri Kansas City L. Rev. 2007, Vol. 75, p. 1107. 29 Cromer v. Kraft Foods North America Inc, 8 December 2004, F.3d 2004, Vol. 390, p. 812; Kurkowski v. Volcker, 26 May 1987, F.2d 1987, Vol. 819, p. 201; Anderson v. D.C. Public Defender Service, 12 February 1991, F. Supp. 1991, Vol. 756, p. 28. 30 A.L. PARRISH, Duplicative Foreign Litigation, George Washington L. Rev. 2010, Vol. 78, p. 237; A.D. VESTAL, Reactive Litigation, Iowa L. Rev. 1961, Vol. 47, p. 11. 31 M.T. GIBSON, Private Concurrent Litigation in Light of Younger, Pennzoil, and Colorado River, Oklahoma L. Rev. 1989, Vol. 185, p. 196. 32 A. KATZ, The Effect of Frivolous Lawsuits on the Settlement of Litigation, Int'l Rev. L. & Economics 1990, Vol. 10, p. 3.

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Forum Shopping in International Litigation case, the debate on jurisdiction will be of crucial importance, as the strength of each party’s position will depend on which court will hear the case.33 In light of the high number of underlying considerations that will give rise to procedural strategies regarding choice of forum, it is necessary to propose a categorisation of such strategies. Such categorisation will be useful when assessing the appropriateness of the instrument at French courts’ disposal to react against forum shopping. 2.

The Categorisation of the Procedural Strategies Regarding Choice of Forum

On the basis of the underlying considerations that have been described above, the plaintiff will select the most preferred court. While it is impossible to provide an exhaustive list of procedural strategies that may be developed by litigants, it is nevertheless possible to organise them according to their main features and to propose a taxonomy. Although such taxonomy is absent, to date, from French or foreign academic studies relating to forum shopping, it can constitute an important instrument to assess whether French courts’ reaction to the procedural strategies regarding choice of forum is adequate. The suggested taxonomy is based on transversal criteria, which allow to apprehend all of the procedural strategies that could be implemented in the context of international litigation. Such strategies can either be classified based on their objectives (namely, according to the aim pursued by the plaintiff) or based on their means (namely, according to the means employed by the plaintiff, i.e. according to the degree of interference with the connecting factors that the plaintiff will be willing to cause). These two classifications can be combined with one another, as a litigant may for instance decide to harm the opposing party (objective), either by “provoking” the jurisdiction of a court which would not otherwise have had jurisdiction over the case (first possible mean), or by exploiting a pre-existing ground of jurisdiction (second possible mean). As regards the objective, and as briefly discussed above, the procedural strategies can aim at obtaining a favourable issue or at harming the opposing party. Depending on the importance of each of these goals, a procedural strategy could be displayed on a X-Y graph where the X-axis is the “favourable issue” criteria and the Y-axis is the “willingness to harm” criteria. For instance, whenever a plaintiff The Al Battani, 5 April 1993, Lloyd’s Report 1993, Vol. 2, p. 219, with case comment by T. HOWARD/ B. DAVENPORT, J. Mar. L. & Com. 1994, Vol. 25, p. 393 (“I cannot help thinking that the reality of the matter is that my decision as to the venue for trial will put one party or the other into a stronger position when negotiating any possible settlement of this claim”). See also Spiliada Maritime Corp. v. Cansulex Ltd.,19 November 1986, Lloyd’s Report 1987, Vol. 1, p. 1 (“I suspect that what I am in fact deciding is not where the Spiliada action will ultimately be tried, but whether a settlement will be reached against the background of litigation pending in England or of litigation pending in Canada”). The Golden Mariner, 14 June 1990, Lloyd’s Report 1989, Vol. 2, p. 403 (“strong suspicion that the motive behind these applications […] has been a desire to improve negotiating position rather than any real desire for trial in another forum”). 33

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Claudia Cavicchioli aims at benefitting from a specific procedural and/or substantive rule, without any specific desire to harm the opposing party, the choice of forum will accordingly be placed on the graph next to the X-axis. Case law presents some examples of strategies that are specifically tainted with one objective or the other. In the Aérospatiale case, for instance, the plaintiff (the widow of a victim of a helicopter accident occurred in Brunei) commenced litigation against the manufacturer of the helicopter and the operating company, before the courts of Brunei, France and Texas. Texas courts did not present any specific connection to the dispute at stake and the procedural strategy at play clearly aimed at benefitting from the strict liability rules set out under Texan law.34 Similarly, in the Airbus case, following a plane crash in India, a lawsuit was brought in Texas against the manufacturer of the plane, although Texan courts presented no connection with the victims, the defendants or the accident.35 There again, the plaintiff’s goal was to benefit from the strict liability rules provided by Texan law. Case law also shows that plaintiffs can select a forum with a view to causing a harm to the opposing party. Leaving aside the cases of repetitive and reactive litigations that have already been described above, one can mention the strategic lawsuit against public participation (“SLAPP”), an action aiming at paralysing, intimidating and more generally exhausting the opposing party from a financial perspective, to ensure that the latter does not defend a case which is often characterised by an environmental, political or social interest.36 For instance, in the Webb v. Fury case, a farm owner was sued for defamation by a coal company (the requested damages amounted to 200.000 dollars), because he had criticised the construction of a coal factory.37 In the vast majority of cases, a SLAPP is characterised by the significant amount of damages that are requested by the plaintiff, and combined with a choice of forum towards a court which will apply rules on defamation which are favourable to the plaintiff. As regards the means, the plaintiff can either benefit from a pre-existing ground of jurisdiction or decide to “provoke” the jurisdiction of a court which would not otherwise have had jurisdiction over the case. When benefitting from a pre-existing ground of jurisdiction, the procedural strategy could consist in having recourse to the numerous options of jurisdiction that will be available, in order to choose the most suitable forum in light of the plaintiff’s objective. For instance, under Article 8.1 of Regulation No. 1215/2012, 34 Société Nationale Industrielle Aérospatiale v. Lee Kui Jak, 14 May 1987, AC 1987, p. 871, with case comments by D.W. ROBERTSON, L. Quarterly Rev. 1987, Vol. 103, p. 398; T.C. HARTLEY, Am. J. Comp. L. 1987, Vol. 35, p. 487. 35 Airbus Industries GIE v. Patel, 18 March 1999, AC 1999, Vol. 1, p. 119, WLR 1998, Vol. 2, p. 686, with case comments by K. ANDERSON, Yale J. Int’l L. 2000, Vol. 25, p. 195; H. MUIR WATT, Revue générale des procédures 1999, p. 747 and A. FILES, Flinders J. L. Reform 1999, p. 287. 36 P. CANAN/ G.W. PRING, Strategic Lawsuits Against Public Participation, Social Problems 1988, Vol. 35, No. 5, p. 506. 37 Webb v. Fury, 13 July 1981, S.E.2d 1981, Vol. 282, p. 28, with case comment by E.M. JACOBS, Am. Un. L. Rev. 1981, Vol. 31, p. 147.

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Forum Shopping in International Litigation the plaintiff can choose to sue a number of defendants in the courts of the place where an “anchor defendant” is domiciled, provided the claims are closely connected. The plaintiff may, however, artificially file a claim against an anchor defendant which has little relevance to the case, in order to secure the jurisdiction of a favourable court and bring proceeding in the same court against the real defendant(s). Otherwise, a plaintiff can “provoke” the jurisdiction of a court by either relying on the defendant’s voluntary appearance, when the claim is brought before a court that lacks jurisdiction and the defendant fails to challenge jurisdiction, or by modifying the factual situation in order to benefit from a specific rule on jurisdiction. In the first case, the plaintiff will rely on rules such as Article 26 of Regulation No. 1215/2012. In the second case, the plaintiff could notably modify the identity of the plaintiff, or the connecting factor. For instance, the plaintiff may assign his indemnity claim to another entity, thereby creating an artificial connecting factor enabling him to remove the dispute from the court(s) having jurisdiction over the case and to benefit from the jurisdiction of another court.38 The plaintiff could also change its domicile or nationality when those elements are the connecting factors of a rule on jurisdiction.39 The proposed categorisation that has been described above is necessary in order to assess whether French courts’ reaction to the procedural strategies regarding choice of forum are adequate and sufficient to apprehend and sanction those strategies that may be deemed to be reprehensible. B.

The Shortfalls Affecting the Mechanisms at French Courts’ Disposal to React to the Procedural Strategies Regarding Choice of Forum

In order to assess whether French courts’ reaction to forum shopping is adequate, it is necessary to critically analyse the mechanisms that are currently put into use when such courts are faced with the various categories of procedural strategies regarding choice of forum that have been identified (1.). On the basis of an analysis of the practice of international litigation and the shortcomings of French courts’ reaction to forum shopping, it is possible to note that certain procedural strategies regarding choice of forum are not effectively sanctioned, in spite of sometimes being unacceptable (2.).

Cass. civ. 1st, 24 November 1987, No. 85-14.778, Garrett, with case comments by G.A.L. DROZ, Rev. crit. dr. int. pr.1988, p. 364; E. LOQUIN, Clunet 1988, p. 793 and Ph. BLONDEL/ L. CADIET, JCP G 1989, II, 21201. 39 Cass. civ. 1st, 17 December 2014, No. 13-21.365, with case comments by S. LAVAL, Rev. crit. dr. int. pr.2015, p. 443; F. JAULT-SESEKE, D. 2015, p. 1056; R. NATOKALFANER/ C. ANGER, Gazette du Palais (Gaz. Pal.), 20 March 2015, p. 36. 38

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Claudia Cavicchioli 1.

The Analysis of the Mechanisms Used by French Courts to React to the Procedural Strategies Regarding Choice of Forum

When French courts are seized in the context of primary proceedings (instance directe), they can resort to a wide range of instruments when confronted with procedural strategies regarding choice of forum. However, some of those instruments have a limited scope of application, as they address only very specific types of forum shopping. As regards fraud, for instance, the criterion to distinguish between acceptable and unacceptable behaviours is the means that are employed by the author of the procedural strategy. Thus, all the procedural strategies that are aimed at benefitting from a pre-existing ground for jurisdiction will be deemed to be perfectly valid under this mechanism, because the author of the procedural strategy has not made any modification to or manipulation of the connecting factor. Fraud will only come into play in respect of procedural strategies that are aimed at benefitting from a “provoked jurisdiction”. It is only in this case that the author of the procedural strategy will manipulate the connecting factor in order to take avantage of a jurisdiction rule that would not have been applicable otherwise. Moreover, the mechanism of fraud will not take into account the objectives which are pursued via the procedural strategy. Therefore, it will be irrelevant whether the plaintiff has acted with the intention of harming the opposing party, or of benefitting from a procedural and/or substantive regime. The fraud mechanism will thus only be applicable in a very limited number of cases, thus leaving a number of procedural strategies unaffected. Similarly, with respect to estoppel, the criterion to distinguish between the procedural strategies that will be sanctioned and those that remain unaffected is whether the plaintiff has adopted a contradictory behaviour which has created a legitimate expectation for the defendant. Such a restrictive criterion, however, will only come into play in a very limited number of cases, thus leaving intact a high number of procedural strategies. Where the plaintiff has adopted a “linear” behaviour, the corresponding procedural strategy will in any case not be sanctioned. For instance, if the claimant decides to seize a remote forum, in order to cause harm to the defendant, this behaviour will not trigger the application of estoppel and the procedural strategy will therefore remain intact. Similarly, if the plaintiff decides to benefit from a more favourable procedural and/or substantive regime, the defendant will not be able to show any contradiction in the plaintiff’s behaviour, thus excluding any sanction on the basis of estoppel. On the contrary, the abuse of right constitutes a cross-cutting instrument that may be applied to all of the procedural strategies regarding choice of forum. Under European Union law, abuse of right as general principle of law has been defined on the basis of two criteria: if the right is exercised for a purpose other than its intended purpose and if there is a disproportion between the advantages and disadvantages of both parties.40 The first criterion appears to be particularly 40 ECJ, 23 March 2000, C-373/97, Diamantis, with case comment by M. LUBY, Revue trimestrielle de droit commercial (RTD com.) 2000, p. 777; L. IDOT, Europe 2000, p. 15.

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Forum Shopping in International Litigation restrictive, as it will only apply if the plaintiff has solely or primarily acted for purposes unrelated to those of the right in question.41 The second criterion, on the other hand, can be applied irrespective of the objective which is pursued by the plaintiff and without regard to the type of jurisdiction – “exploited” or “provoked” – that is exercised by the claimant. This possibility of theoretical application must, however, be put into perspective in view of the absence of any European or French case law applying the notion of abuse of right when confronted with forum shopping. As regards the French notion of abuse of right, this concept is based on two criteria: a subjective criterion (the plaintiff’s intention to cause harm) and an objective criterion (the exercise of a right for a purpose other than its intended purpose). Both of these criteria are restrictive: when applying the first criterion, any strategy that is not guided by an intention to harm will not be sanctioned; when applying the second criterion, any claim that is at least partly motivated by the intention to solve the dispute will not be sanctioned. As regards the actions aimed at recognising or enforcing a foreign judgment (instance indirecte), the French legal system is generally characterised by its openness to foreign judgments. Under European Union law, the principle of mutual recognition of judgments has been identified as a cornerstone in judicial cooperation.42 In commercial and civil matters, for instance, judgments from the courts of a Member State are automatically enforced in another Member State. In the event of a dispute, the grounds for the refusal of recognition and enforcement are highly limited. Under French national law, the rules governing the recognition and enforcement of foreign judgments have considerably varied and French law now easily recognises and enforces foreign judgments43. While this openness can be welcomed in terms of harmony of solutions and legal certainty, forum shopping is rarely sanctioned when a judgment has already been rendered. In the context of parallel proceedings, rules on lis pendens and related actions allow the courts to take into account the jurisdiction of foreign courts and, if necessary, decline jurisdiction if favour of the proceedings that have been initiated abroad. However, European Regulations leave no discretion to the courts of the Member States to decide upon the forum which would be the most appropriate to settle the case, as the only criterion is the chronological order upon which the courts have been seized. National rules on lis pendens and related actions are 41 J.-F. ROMAIN, Théorie critique du principe général de bonne foi en droit privé, Bruylant 2000, No. 392.2. 42 Tampere European Council, 15 and 16 October 1999. 43 Cass. civ. 1st, 20 February 2007, No. 05-14.082, Cornelissen, with case comments by B. ANCEL/ H. MUIR WATT, Rev. crit. dr. int. pr. 2007, p. 420; P. CHAUVIN, D. 2007, p. 892; L. D’AVOUT/ S. BOLLÉE, D. 2007, p. 1115; P. COURBE/ F. JAULT-SESEKE, D. 2007, p. 1751; I. GALLMEISTER, D. 2007, p. 1115; F.-X. TRAIN, Clunet 2007, p. 1195; M.-L. NIBOYET, Gaz. Pal. 29 April 2007, p. 2; F. GUERCHOUN, Gaz. Pal. 11 May 2007, p. 4; CH. LÉCUYER-THIEFFRY, Gaz. Pal. 11 May 2007, p. 15; Ch. BRUNEAU, Clunet G 2007, act. 107; A. MARMISSE-D’ABBADIE D’ARRAST, JCP G 2007, I, p. 172; Ch. LÉCUYER-THIEFFRY, Les Petites Affiches (LPA) 22 May 2007, p. 15; M. FARGE, Droit de la famille 2007, comm. 97 and M.-L. NIBOYET, L’abandon du contrôle de compétence législative indirecte, Gaz. Pal. 3 May 2007, p. 2.

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Claudia Cavicchioli also based on a chronological criterion and the courts cannot assess the opportunity to decline jurisdiction. As a result, French courts have at their disposal a number of procedural rules that can be applied in the context of forum shopping. However, these rules only partially apprehend the procedural strategies regarding choice of forum. 2.

The Existence of Unsanctioned Procedural Strategies Regarding Choice of Forum

A number of procedural strategies regarding choice of forum pass the filter of judicial control. Although it would be inconceivable to list and conduct an exhaustive study of these procedural strategies, it is possible to give some examples that are common in international litigation. In the context of primary proceedings (instance directe), one can mention, for instance, the procedural strategy aiming at increasing the financial burden for the defendant, by choosing, amongst the courts having jurisdiction, the most remote court from the defendant’s domicile. In the vast majority of cases, such strategy will remain unaffected. As discussed above, the criteria of fraud and estoppel are not met if the plaintiff has a “linear” behaviour and if he does not modify or manipulate the connecting factor. On the contrary, from a theoretical perspective and if the dispute is governed by European Union law, French courts may apply the notion of abuse of right if the defendant can show that the plaintiff did not pursue any legitimate goal, or that there is a disproportion between the advantages and disadvantages of the parties. In the present case, it will be difficult for the defendant to show that these criteria are met, as the plaintiff will also pursue a perfectly legitimate goal (to solve the dispute) and the mere fact of trying to increase the financial burden for the defendant will not necessarily entail a disproportion between the advantages and disadvantages of the parties. Moreover, as clearly stated by Laurence Usunier, “it is far from certain that the Court [of Justice] would accept that national courts apply the theory of abuse of right to decline jurisdiction where Regulation Brussels I recast grants jurisdiction to such courts”.44 If the dispute is governed by French national law, the defendant will be faced with the difficulty of adducing evidence in order to show that choice of forum was motivated by the plaintiff’s intention to harm the defendant or that the plaintiff’s right of action was exercised for a purpose other than its intended purpose (which will not be the case, as the plaintiff also intended to solve the dispute). In this respect, French courts do not seem to have applied the theory of abuse of right to fight against forum shopping. Finally, assuming that an abuse of right is characterised, the sanction also seems inadequate, as the defendant will only be compensated in damages. The choice of forum will therefore remain effective. In the context of an action aimed at recognising or enforcing a foreign judgment (instance indirecte), one can mention, for instance, the procedural strategy L. USUNIER, Le Règlement Bruxelles I bis et la théorie de l’abus de droit, in E. GUINCHARD, Le nouveau règlement Bruxelles I bis. Règlement n° 1215/2012 du 12 décembre 2012 concernant la compétence judiciaire, la reconnaissance et l’exécution des décisions en matière civile et commerciale, Bruylant 2014, p. 449. 44

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Forum Shopping in International Litigation which consists in fraudulently bringing proceedings in a court of a Member State to the European Union, in order to then enforce the judgment in another Member State. In this case, the defendant will not be in a position to successfully challenge the enforcement, unless he can show that such enforcement is manifestly contrary to public policy. Although the Report by Professor Dr Peter Schlosser dated 1979 stated, as regards the Brussels Convention, that “there is no doubt that to obtain a judgment by fraud can in principle constitute an offence against the public policy of the State addressed”,45 it is doubtful whether, under Regulation No. 1215/2012, the theory of fraud can be applied as a mean to refuse the enforcement of a foreign judgment. The theory of fraud could indeed be deemed to constitute an obstacle to the free movement of judgments, thus undermining one of the underlying principles of Regulation No. 1215/2012.46 Fraud itself will thus not suffice to oppose enforcement and both the choice of forum and the judgment will therefore remain effective. Apart from the above-mentioned examples, the practice of international litigation shows that a high number of procedural strategies regarding choice of forum remain effective47, despite the instruments that are currently at French courts’ disposal. It is possible, however, to show that some of these procedural strategies are unacceptable, as they infringe the fundamental rights of the opposing party. In this respect, in the context of primary proceedings (instance directe), a procedural strategy regarding choice of forum will only have a direct impact on the fundamental rights that have a procedural nature. On the contrary, such a choice of forum does not seem to have a direct impact on the substantive rights of the opposing party and, in any event, it would be impractical for a court to verify, when assessing jurisdiction, whether the decision to be taken will likely infringe such substantive rights. In the context of primary proceedings, the fundamental right at stake will therefore be the right to a fair trial, which includes both of its components: the right of access to a court and the right to equality of arms. As regards the right of access to a court, a series of elements such as distance, costs and language barrier may contribute to the lack of effective access to justice. As such, if the claimant sues the defendant before a remote court, where the latter will have to bear significant costs, the defendant’s fundamental right to access a court may be 45 Report by Professor Dr. Peter Schlosser on the Convention of 9 October 1978 on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, para. 192. 46 ECJ, 15 May 1990, C-365/88, Hagen, para. 20, with case comments by H. GAUDEMET-TALLON, Rev. crit. dr. int. pr. 1990, p. 564; A. HUET, Clunet 1990, p. 498; H. TAGARAS, Cah. Dr. Eur. 1990, p. 696, whereby the European Court of Justice held that the application of national procedural rules may not impair the effectiveness of the Brussels Convention. Although this case was rendered in the context of primary proceedings (instance directe), it seems possible to transpose its findings to an action aiming at recognising or enforcing a judgment (instance indirecte). 47 A more detailed description of such procedural strategies has been conducted in my thesis, in Section “The analysis of the procedural strategies regarding choice of forum remaining unaffected”.

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Claudia Cavicchioli infringed. As regards the right to equality of arms, the claimant may, for instance, file a lawsuit before a court that grants different rights of access to documents. In this case, the infringement of the principle of equality of arms will find its source in the domestic legislation of the chosen court, which provides for a difference of treatment between the litigants. The breach of the principle of equality of arms could also arise from the choice of forum itself and not from the domestic legislation of the chosen court. For instance, if the choice of forum leads to higher costs for the defendant, this imbalance could constitute an infringement of the principle of equality of arms. On the contrary, in the context of an action aimed at recognising or enforcing a foreign judgment (instance indirecte), the procedural strategy (which could be deployed either in the country of origin or in the court where recognition or enforcement is sought) could undermine both the procedural and substantive rights of the opposing party. Indeed, the judgment may have “crystallised” the substantive fundamental rights of the parties, so that a procedural strategy regarding choice of forum would also have an impact on the substantive fundamental rights. As regards the procedural rights, the choice of forum may have an impact on the right of access to a court and the right to equality of arms, as in the context of primary proceedings. The procedural strategy in the context of an action aimed at recognising or enforcing a foreign judgment may also lead to an infringement of the substantive fundamental rights that have been “crystallised” by the foreign judgment, such as the right to respect for one's private and family life, the right to property, or other substantive fundamental rights. At present, French courts do not, however, verify whether a procedural strategy regarding choice of forum could have an impact on the fundamental rights of the opposing party. In this respect, it is proposed to create a new legal category, the forum shopping malus, based on an assessment of the infringement of the opposing party’s fundamental rights.

II. The Proposition of a New Legal Category: The Forum Shopping Malus Forum shopping malus will be identified on the basis of a methodology aimed at distinguishing between, on the one hand, the infringements of the opposing party’s fundamental rights that should be deemed to be acceptable and, on the other hand, those which would cause an excessive harm and should therefore sanctioned (A.). Forum shopping malus should also benefit from a specific procedural regime, which consists of two new powers that should be granted to French courts, namely the power to relinquish jurisdiction in favour of a foreign court and the power to issue injunctions (B.).

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Forum Shopping in International Litigation A.

The Methodology to Identify a Forum Shopping Malus

It is necessary to identify a methodology to be applied in the context of primary proceedings (instance directe) (1.) and in the context of an action aimed at recognising or enforcing a foreign judgment (instance indirecte) (2.). 1.

The Methodology in the Context of Primary Proceedings (Instance Directe)

It is hereby proposed that the new legal category of forum shopping malus is based on a balancing test between the fundamental rights of the parties concerned by the procedural strategy at play. Amongst the different methods aiming at solving a conflict between fundamental rights, namely the prioritisation (hiérarchisation), the practical concordance (concordance pratique) and the rationalisation of the principle of proportionality (rationalisation du principe de proportionnalité)48, the latter seems to be able to provide French courts with the appropriate means to balance fundamental rights. This methodology, which has recently been implemented by the European Court of Human Rights to establish a balance between private parties’ fundamental rights,49 takes into account the abstract weight that is attributed to each right, to then assess in concreto the severity of the harm caused. In order to guide the judge when implementing this methodology, the European Court of Human Rights has developed a series of criteria in order to establish a panel of solutions on which a judge may rely upon to assess the harm caused to the fundamental rights.50 Similarly, the methodology to assess whether the procedural strategy regarding choice of forum amounts to forum shopping malus will be based on a series of criteria aiming at establishing a panel of solutions for the judge. If the fundamental rights at stake have been violated in their essence, forum shopping malus will be characterised without the need to conduct an analysis as to P. DUCOULOMBIER, Les conflits de droits fondamentaux devant la Cour européenne des droits de l’homme, Bruylant 2011, p. 3. 49 ECHR, 7 February 2012, No. 39954/08, Axel Springer AG v. Germany, with case comments by J. LEVIVIER, Clunet 2013, p. 1307; J.-P. MARGUÉNAUD/ P. RÉMY-CORLAY, RTD civ. 2012, p. 279; M. AFROUKH, JCP G 2012, p. 1062; PH. PIOT, Gaz. Pal. 1st October 2014, p. 13; E. PUTMAN, RJPF 2012, p. 12. See, also, ECHR, 7 February 2012, von Hannover v. Germany, Apps. Nos. 40660/08, 60641/08, with case comments by J.-P. MARGUÉNAUD/ P. RÉMY-CORLAY, RTD civ. 2012, p. 279; F. SUDRE, JCP G 2012, p. 1531; J.-F. RENUCCI, D. 2012, p. 1040; L. BURGORGUE-LARSEN, AJDA 2012, p. 1733. ECHR, 5 September 2017, Barbulescu v. Roumanie, App. Nos. 61496/08, with case comments by E. DERIEUX, D. IP/IT 2017, p. 548; J.-P. MARGUÉNAUD/ J. MOULY, JCP G 2017, p. 1992; F. SUDRE, JCP G 2018, p. 49; J. ANDRIANTSIMBAZOVINA, Gaz. Pal. 28 November 2017; L. BURGORGUE-LARSEN, AJDA 2018, p. 155; A. BUGADA, Procédures 2017, p. 240; L. DRAI, Comm. com. électr. 2018, p. 17; E.A. CAPRIOLI, Comm. com. électr. 2018, p. 42; F. KRENC, RTDH 2018, p. 311; Ch. PETTITI, RTDH 2018, p. 485. 50 J.-P. MARGUÉNAUD, La résolution des conflits entre le droit à la liberté d’expression et les droits à l’image et à la réputation, RTD civ. 2012, p. 279. 48

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Claudia Cavicchioli the proportionality of such an infringement. This will particularly be the case where the plaintiff chooses a forum where the defendant cannot appear or cannot defend himself. If, on the contrary, in light of the circumstances of the cases, the fundamental rights do not appear to have been violated in their essence, it will be necessary to balance the opposing fundamental rights at stake. In the context of primary proceedings (instance directe), French courts could consider the following criteria: (i) Are the mechanisms that are at the defendant’s disposal sufficient to effectively challenge the choice of forum and/or the procedural and/or substantial consequences of such choice? In this respect, the court should verify whether the defendant can avail himself of mechanisms such as a plea of lack of jurisdiction, fraud, estoppel, abuse of rights, or other instruments that would render the procedural/substantial consequences of the choice of forum ineffective. In light of the regime that will be proposed below, the legal category of forum shopping malus should only be applied if other mechanisms are not available to the defendant. (ii) Does the ground of jurisdiction which has been relied upon by the plaintiff present a connection with the dispute? In this respect, the judge should verify whether the action has been brought on the basis of an “exorbitant” ground of jurisdiction, such as Article 14 of the French Civil Code. (iii) Was the claimant in a position to bring proceedings before another court having jurisdiction? In this respect, the court will have to determine whether the plaintiff has resorted to the only court having jurisdiction or if other alternatives were available. In addition, the judge should assess whether such alternatives would have resulted in a significant burden for the plaintiff or whether, on the contrary, the relevant courts could have been easily or more easily accessible. (iv) Does the choice of forum entail any procedural and/or substantive consequences to the benefit of the plaintiff? In light of the answer given to the question above, the court will have to assess whether the plaintiff aimed at benefitting from a specific procedural and/or substantive regime that would not have been available before another court. (v) Does the choice of forum entail procedural and/or substantive consequences that are prejudicial to the defendant? Similarly, the court will have to ascertain whether the plaintiff appears to have chosen a specific court in order to deprive the defendant of a procedural and/or substantive regime which he could have invoked before another court having jurisdiction. (vi) Has the plaintiff modified an element of the factual situation in order to benefit from the jurisdiction of the seized court? In this respect, the court will draw a distinction between, on the one hand, the hypothesis of “provoked” jurisdiction and, on the other hand, those where the plaintiff benefits from a pre-existing ground of jurisdiction without any need to modify the factual situation. (vii) Is the defendant in a position to appear and to properly present his case before the seized court? In this respect, it will be necessary to take into account a series of factual elements, notably including the language of the procedure,

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Forum Shopping in International Litigation the costs incurred (for example, in terms of translations, witnesses, court agents, etc.). (viii) Are there any parallel proceedings in the same case or in a related matter? It will be necessary to identify whether the plaintiff or the defendants have already brought parallel proceedings in the same or related matter. Such a criterion will notably take into account the existence of repetitive litigation and reactive litigation. This methodology was put to the test, thus identifying some examples of forum shopping malus. For instance, one can imagine a case where the plaintiff is aware that the French defendant (domiciled in a distant State) will have to file a large number of foreign-language documents, but that he has very low resources. Instead of summoning the defendant before the court of his domicile (which, in our hypothesis, would have jurisdiction), the plaintiff decides to bring proceedings before French courts, where the defendant will be compelled to translate the documents in order to be able to properly present his case. Leaving aside this obligation to translate foreign documents, the submission to French courts does not have any procedural or substantive advantages. By applying the list of criteria described above, a French court will consider that: (i) the defendant could attempt to challenge the jurisdiction of French courts. He will, however, have very low chances of success, as the plaintiff will be able to benefit from Article 15 of the French Civil code, which grants jurisdiction to French courts on the sole basis of the defendant’s nationality; (ii) the ground of jurisdiction has no connection with the dispute at stake; (iii) the plaintiff could have initiated proceedings before the courts of the defendant’s domicile; (iv) the choice of forum does not entail any procedural and/substantive consequences to the benefit of the plaintiff’s action; (v) the choice of forum has a negative procedural consequence as regards the defendant, who will have to incur significant costs to translate the necessary documents; (vi) the plaintiff has benefitted from a pre-existing ground of jurisdiction, without modifying the factual situation; (vii) taking into account the costs and the resources of the defendant, the latter does not seem to be in a position to properly present his case. As such, the judge could hold that the procedural strategy regarding choice of forum amounts to forum shopping malus. The list of questions that has been described above could be further developed on the basis of the type of dispute at stake. For instance, in the context of a litigation relating to family law, it may be necessary to supplement the list of relevant criteria, by taking into account the specific interests that come into play, such as the best interest of the child. Likewise, in the context of a litigation relating to insolvency proceedings, it may be necessary to include additional criteria relating to the consideration to be given to the debtor and to the creditors. 2.

The Methodology in the Context of an Action Aimed at Recognising or Enforcing a Foreign Judgment (Instance Indirecte)

Procedural strategies in the context of an action aimed at recognising or enforcing a foreign judgment (instance indirecte) are more complex in nature, because a foreign judgment has already “crystallised” the substantive rights of the parties

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Claudia Cavicchioli involved. A refusal to recognise or enforce the foreign judgment would therefore constitute a public interference, whose proportionality should also be assessed. A series of criteria are also suggested in order to establish a panel of solutions on which a judge may rely upon to assess whether the procedural strategy at stake constitutes a forum shopping malus. If the procedural strategy regarding choice of forum has been deployed before the judge of origin, the judge that is then seized with a request to recognise or enforce the foreign judgment should take into account the following criteria: (i) Did the foreign judge rule on the procedural strategy regarding choice of forum? This criterion aims at distinguishing between the hypothesis where the judge can find in the judgment all or part of the reasoning of the judge of origin and those where the judgment is silent on the procedural strategy. (ii) Does the procedural strategy which has been implemented before the judge of origin cause a disproportionate harm to the opposing party’s fundamental rights? In this respect, the judge can apply the same criteria that have been identified in the context of primary proceedings. (iii) Did the judge of origin properly sanction the procedural strategy regarding choice of forum? In the context of proceedings aiming at recognising or enforcing a foreign judgment, the proportionality of the sanction that has been issued by the judge of origin must also be assessed. (iv) Does the refusal of recognition or enforcement cause a disproportionate harm to a fundamental right? In this respect, the judge will have to assess whether such a refusal is proportionate to the pursued objective. (v) Can the foreign judgment be challenged before the courts of the country of origin? If this is the case, a priority should be given to the judge of origin, who will be in a better position to rectify his views on the procedural strategy that has been implemented. If, on the other hand, the procedural strategy regarding choice of forum has been implemented before the judge that has been seized of a request to recognise or enforce the foreign judgment (instance indirecte), the same criteria that have been identified in the context of primary proceedings should be transposable. French courts will, however, also have to take into account the fact that a refusal to recognise or enforce the foreign judgment which crystallises the parties’ substantive rights may constitute a public interference, which is admissible only if such interference is necessary in a democratic society in order to reach an objective of public interest. There again, this methodology was put to the test, thus identifying some examples of forum shopping malus. For instance, one could imagine a case where the plaintiff has fraudulently seized the first judge, who did not rule on the existence of a fraud (which was revealed only after the judgment was rendered). In this hypothesis, foreign legislation would not allow the judge of origin to reopen the proceedings, despite the existence of this newly discovered element, and the French court would consider, on the basis of the criteria identified above, that the procedural strategy has caused a disproportionate harm to the opposing party’s fundamental rights. The court would therefore have to take into account the following elements: (i) the foreign judge did not rule on the procedural strategy regarding choice of forum, as such strategy has been revealed once the judgment 432

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Forum Shopping in International Litigation had already been rendered; (ii) the procedural strategy that was implemented before the judge of origin causes a disproportionate harm to the opposing party’s fundamental rights; (iii) the foreign judge has not properly sanctioned the procedural strategy regarding choice of forum, as he was not aware of the existence of such strategy; (iv) the question of whether the refusal of recognition or enforcement causes a disproportionate harm to a fundamental right depends on the content of the judgment. For instance, if the judgment grants an adoption, the fundamental rights of the persons at stake will constitute an argument in favour of recognition. In commercial matters, a judgment ordering damages could be deemed to be protected under Article 1 of the Protocol No. 1 to the European Convention on Human Rights; (v) the judgment cannot be challenged before the courts of the country of origin. As such, the judge could conclude that the procedural strategy regarding choice of forum amounts to forum shopping malus. On the basis of the suggested methodology, the legal category of forum shopping malus could be added to the range of legal instruments that are currently implemented by French courts to apprehend the procedural strategies regarding choice of forum. In order to effectively sanction forum shopping malus it is, however, also necessary to provide French courts with specific powers. This regime should be added to the body of instruments at French courts’ disposal, so that every judge may decide whether the “traditional” tools are sufficient or if it is necessary to rely on this new regime. B.

The Regime of Forum Shopping Malus

The creation of forum shopping malus requires a modification of the judge’s function, so that he may be granted the power to relinquish jurisdiction in favour of another judge (1.). In addition, French judges should be granted the power to issue injunctions against the author of a procedural strategy which is deemed to constitute forum shopping malus (2.). 1.

The Power to Relinquish Jurisdiction

When faced with a procedural strategy regarding choice of forum, French courts should be granted the power to relinquish jurisdiction in favour of a foreign court, so as to defeat such strategy and to move the dispute to another court, whose jurisdiction would not be based on the implementation of a procedural strategy. Although case law of the European Court of Justice rejects the application of forum non conveniens when European law is applicable51, Regulation No. 2201/ 2003 concerning jurisdiction and the recognition and enforcement of judgments in 51 ECJ, 1st March 2005, C-281/02, Owusu v. Jackson, with case comments by G. CUNIBERTI/ M. WINKLER, Clunet 2005, p. 1177; C. CHALAS, Rev. crit. dr. int. pr. 2005, p. 698; M.-L. NIBOYET, Gaz. Pal. May-June 2005, p. 31; C. NOURISSAT, Procédures 2006, p. 13; P. COURBE/ F. JAULT-SESEKE, D. 2005, p. 1499; A. RAYNOUARD, RJC 2005, p. 335; M. MORIN, Droit maritime français (DMF) 2005, p. 1077.

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Claudia Cavicchioli matrimonial matters and the matters of parental responsibility provides in Article 15 that a court having jurisdiction can transfer the case to a court better placed to hear the case.52 A court can, however, only transfer the case if such transfer is in the best interests of the child. In this respect, the European Court of Justice has ruled that the best interest of the child includes the respect of the latter’s fundamental rights.53 As such, the power to relinquish jurisdiction is admitted under Regulation No. 2201/2003 in light of the need to protect a child’s fundamental rights. Similarly, a power to relinquish jurisdiction could be introduced under European Union law in order to fight against forum shopping malus, as such power will aim at protecting the parties’ fundamental rights. In this respect, the mechanisms of forum non conveniens that exist under English, United States and Australian law have been studied in order to elaborate a proposal of a power to relinquish jurisdiction that could be granted to French courts. In this respect, liberal mechanisms such as the one which exists in the United States, where courts base their decision to relinquish jurisdiction on the advantages presented by the foreign court,54 do not appear to be appropriate. Indeed, the margin of discretion which is granted to the court may excessively affect the principles of legal certainty, predictability and legality provided for in Article 6 of the European Convention on Human Rights.55 On the contrary, the proposed new power to relinquish jurisdiction could follow the model of forum non conveniens that has been developed by Australian case law. Under this doctrine, a court can relinquish jurisdiction when it is a clearly inappropriate court to hear the case.56 The implementation of such power to relinquish jurisdiction would in any event be subject to the existence of a foreign court having jurisdiction to hear the court. As explained above, the forum shopping malus would combine objective criteria, based for instance on the existence of a connection between the ground for jurisdiction and the dispute, and subjective criteria, which would be more strictly related to the harm suffered by the defendant. As such, the requirement of legal certainty would not be undermined, because the judge’s analysis would be guided 52 B. ANCEL/ H. MUIR WATT, L’intérêt supérieur de l’enfant dans le concert des juridictions: le règlement Bruxelles II bis, Rev. crit. dr. int. pr.2005, p. 569. 53 ECJ, 27 October 2016, C-428/15, Child and Family Agency, para. 49, with case comments by E. GALLANT, Rev. crit. dr. int. pr. 2017, p. 464; C. NOURISSAT, Procédures 2017, p. 18; H. GAUDEMENT-TALLON/ F. JAULT-SESEKE, D. 2017, p. 101; L. IDOT, Europe 2016, comm. 491; S. GODECHOT-PATRIS, RJPF 2017, p. 42. 54 Piper Aircraft v. Reyno, 8 December 1981, 454 US 235, with case comments by S.L. BIRNBAUM/ B. WRUBEL, Forum 1984, Vol. 20, p. 59; J.S. WASHINGTON, J. Air L. & Com. 1989, Vol. 55, p. 303; G.J. FITZPATRICK, J. Air L. & Com. 1983, Vol. 48, p. 539; D. BOYCE, Tex. L. Rev. 1985, Vol. 64, p. 193; M. A. MAZZOLA, Fordham Int’l L. J. 1982, Vol. 6, p. 577. 55 F.K. JUENGER (note 24), p. 251; F. MARONGIU BUONAIUTI, Forum non conveniens e art. 6 della convenzione europea dei diritti dell’uomo, Riv. Dir. int. 2001, p. 420; L. USUNIER (note 1), p. 378-397. 56 Voth v. Manildra Flour Mills Pty Ltd., 13 December 1990, Columbia L. Rev. 1990, Vol. 11, p. 538, with case comments by L. COLLINS, L. Quarterly Rev. 1992, Vol. 107, p. 182 and F.P. KELLY, Adelaide L. Rev. 1990, Vol. 12, p. 490.

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Forum Shopping in International Litigation by a series of pre-fixed criteria, which would limit the number of cases where a judge would consider that it is necessary to relinquish jurisdiction on the basis of forum shopping malus. More importantly, the power to relinquish jurisdiction would deprive the forum shopping malus of its effects, thereby ensuring that the opposing party’s fundamental rights are protected. The fundamental rights of the plaintiffs would nonetheless also be taken into account, as the decision to relinquish jurisdiction would be subject to the existence of a foreign court having jurisdiction to hear the dispute. In case of parallel proceedings, the chronological criterion (prior in tempore potior in jure) which is currently adopted both under European law and French domestic law should be maintained, in light of its simplicity and its predictability.57 Moreover, legal academics have correctly noted that the chronological criterion acts as a deterrent, as it will deter the respondent from introducing parallel proceedings in order to encourage the first judge to relinquish jurisdiction in favour of another court.58 The adoption of the chronological criterion is the only way to resolve a conflict between parallel proceedings regardless of the methodology which is applied by the court first seized. If we assume that the second seized judge follows an approach which aims at identifying the court which is the best placed to solve the dispute: (i) if the court first seized adopts the same approach, there will be a significant risk that the two judges will disagree on which court should hear the dispute, and (ii) if the court first seized adopts a chronological criterion, there is still a risk of conflicting procedures if the court second seized considers that it is in a better position to solve the dispute. If, on the contrary, the court second seized applies a chronological criterion, such court will have to wait until the court first seized rules on its own jurisdiction and the issue of parallel proceedings will be resolved independently of the method which is used by the court first seized. However, the application of the chronological criterion should provide for an exception in case of forum shopping malus. If a French judge is first seized, the chronological criterion gives him primacy to solve the dispute. If the forum shopping malus has been implemented before the French court, the latter should relinquish jurisdiction in favour of the court second seized (subject to the fact that the court second seized rules that it holds jurisdiction over the dispute). In this case, the primacy of the court first seized will mean that French courts will assess whether there is a forum shopping malus and whether the conditions to relinquish jurisdiction are met. If the forum shopping malus has been implemented before the court second seized, the chronological criterion must a fortiori apply, as it would not only solve the issue of parallel proceedings, but also put an end to the forum shopping malus, as the French court will rule on the case without relinquishing jurisdiction in favour of the court second seized. 57 J.J. FAWCETT (dir.), Declining Jurisdiction in Private International Law, Clarendon Press 1995, p. 34; L. USUNIER (note 1), p. 417. 58 L. USUNIER (note 1), p. 418; V. MOISSINAC MASSENAT, Les conflits de procédures et de décisions en droit international privé, LGDJ 2007, p. 127.

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Claudia Cavicchioli If a French judge is second seized and the forum shopping malus has been implemented before him, he will be able to apply the chronological criterion and give primacy to the proceedings that have been brought before the foreign judge. In this case, it would also be appropriate to put in place a communication with the foreign judge, so that the latter is informed of the existence of the procedural strategy. If a French judge is second seized but the forum shopping malus has been implemented before the foreign judge, there is a risk that the foreign judge retains jurisdiction (either because he is not aware of the existence of the procedural strategy, or because he does not have the appropriate mechanisms to fight against the forum shopping malus, or because he does not consider it necessary to sanction the behaviour). In this respect, it is necessary to introduce an exception to the chronological criterion. After a phase of communication between judges, if the foreign judge decides to pursue the proceedings, the French court should not relinquish jurisdiction, as doing so would amount to a violation of a party’s fundamental rights. The French court will therefore have to pursue the proceedings, while assessing the need to issue an injunction against the author of the procedural strategy regarding choice of forum. 2.

The Power to Issue Injunctions

French courts should also be granted the power to issue injunctions against the author of a procedural strategy amounting to forum shopping malus, where a parallel procedure has been initiated. European Union law is traditionally opposed to the power to issue injunctions in the context of disputes subject to European law, in light of the principle of mutual trust between Member States. In the Turner case, the European Court of Justice ruled that an injunction restraining a claimant from commencing or continuing proceedings before a foreign court constitutes an interference with the jurisdiction of the foreign court, which is incompatible with the principle of mutual trust.59 The Court held, in particular, that a judgment as to the abusive nature of the plaintiff’s conduct implies an assessment of the appropriateness of initiating proceedings in a Member State. Such an assessment “runs counter to the principle of mutual trust which […] underpins the Convention”. The Court further confirmed its ruling in the West Tankers case.60 ECJ, 27 April 2004, C-159/02, Turner v. Grovit, with case comments by H. MUIR WATT, Rev. crit. dr. int. pr. 2004, p. 654; R. CARRIER, D. 2004, p. 1919; PH. THÉRY, RTD civ. 2004, p. 549; M.-L. NIBOYET, Gaz. Pal. 15 January 2005, p. 30; R. CARRIER, DMF 2004, p. 403. 60 ECJ, 10 February 2009, C-185/07, West Tankers, with case comments by B. AUDIT, Clunet 2009, p. 1281; H. MUIR WATT, Rev. crit. dr. int. pr. 2009, p. 373; C. KESSEDJIAN, D. 2009, p. 981; Ph. THÉRY, RTD civ. 2009, p. 357; A. MARMISSE-D’ABBADIE D’ARRAST, RTD com. 2009, p. 482; S. BOLLÉE, Rev. arb. 2009, p. 408; C. NOURISSAT, Procédures 2009, comm. 114; P. CALLÉ, JCP G 2009, p. 227; S. CLAVEL, LPA 16 March 2009, p. 15; A. MOURRE/ P. PEDONE, Gaz. Pal. 20 March 2009, p. 51; D. ROOZ, RDAI 2009, p. 101; M. MORIN, DMF 2009, p. 936. 59

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Forum Shopping in International Litigation Even in the context of a dispute governed by European Union law, the principle of mutual trust does not, however, seem to be able to limit the possibility of issuing an injunction if the judge characterises the existence of a forum shopping malus. First of all, as a preliminary point, it should be noted that the principle of mutual trust cannot be used as a mean to legitimise, in the relations between different Member States, a strategy aiming at bringing proceedings before a court, on the grounds that the judgment will then be recognised in the other States.61 Moreover, the European Court of Justice admits that, in certain circumstances, a court which rules on jurisdiction will also rule – even if indirectly – on the jurisdiction of a court belonging to another Member State, thus depriving the latter of the possibility of ruling itself on its own jurisdiction.62 This indirect influence on another court is not fundamentally different from the one that results from an injunction which would be issued by the court first seized which holds it has jurisdiction over the matter and considers that no other parallel proceedings must be initiated by the litigants before another court. Finally and, most importantly, the principle of mutual trust is only one of the many underlying principles of the European Union’s architecture. As such, this principle has no absolute value and must be reconciled with the other applicable principles. Since the proposed power of injunction is based on the finding of a disproportionate harm to the opposing party’s fundamental rights, the power to issue injunctions would find its theoretical justification in the protection of fundamental rights. Indeed, such protection should prevail over the principle of mutual trust that governs the relations between the courts of the European Union. As regards French national law, in its case Banque Worms, the French Supreme Court admitted the possibility for French courts to issue injunctions,63 although this decision remains isolated to date and French courts have not issued, since then, similar injunctions. For instance, in the Vivendi case, when faced with a request to issue an injunction on the basis of an alleged abuse of forum shopping, the Paris Court of Appeal denied the existence of an abuse, without ruling on the injunction itself.64 French courts should, however, also be granted the power to H. MUIR WATT, La procédure d’anti-suit injunction n’est pas contraire à l’ordre public international, Rev. crit. dr. int. pr. 2010, p. 158. 62 ECJ, 15 November 2012, C-456/11, Gothaer Allgemeine Versicherung, with case comments by M. NIOCHE, Rev. crit. dr. int. pr.2013, p. 686; F. JAULT-SESEKE, D. 2013, p. 1503; L. D’AVOUT/ S. BOLLEE, D. 2013, p. 2293; C. NOURISSAT, Procédures 2013, p. 16; L. IDOT, Europe 2013, comm. 57. 63 Cass. civ. 1st, 19 November 2002, No. 00-22.334, Banque Worms v. Époux Brachot, with case comments by G. KHAIRALLAH, D. 2003, p. 797; H. MUIR WATT, Rev. crit. dr. int. pr. 2003, p. 631; M.-L. NIBOYET, Gaz. Pal. 25 June 2003, p. 29; S. CHAILLE DE NERE, JCP G 2002, p. 2294; J. SAINTE-ROSE, JCP G 2002, p. 2295; PH. PETEL, JCP E 2003, p. 848; M. MENJUCQ, JCP E 2003, p. 1675; Ph. ROUSSEL-GALLE, Clunet 2003, p. 132; A. MARTIN-SERF/ J.-L. VAL-LENS, RTD com. 2003, p. 169; Ph. HAMEAU/ M. RAIMON, RDAI 2003, p. 645. 64 Paris Court of Appeal, 28 April 2010, Vivendi, with case comments by M. AUDIT/ M.-L. NIBOYET, Gaz. Pal. 28 May 2010, p. 11; F. JAULT-SESEKE, D. 2011, pan. p. 1374; X. DELPECH, D. 2010, p. 1224; J.-L. NAVARRO/ K. AKHZAM, JCP E 2011, p. 17; N. RONTCHEVSKY, RTD com. 2010, p. 753; R. MORTIER, Droit des sociétés 2010, p. 24; 61

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Claudia Cavicchioli issue injunctions when the dispute is governed by French national law, as such power would aim at protecting the opposing party’s fundamental rights. The introduction of a power to issue injunctions requires that the relevant French court communicates with the other courts that have been seized in parallel by the litigants, in order to increase the efficiency in the treatment of the procedural strategy. It is indeed inconceivable that an injunction be issued by a French judge without ensuring, at the very least, that the foreign judge was informed of the existence of the procedural strategy that is deemed to be unacceptable, as well as of the French court’s views in this respect, and of its intention to issue an injunction. Such communication should also aim at verifying whether the foreign judge will sanction the forum shopping malus and that the issuance of an injunction is the only way to fight against the unacceptable procedural strategy. Conceived as an instrument that can be used by French courts when the infringement of the opposing party’s fundamental rights is disproportionate, the forum shopping malus would thus constitute an effective weapon amongst the arsenal at French courts’ disposal when facing procedural strategies regarding choice of forum.

V. MAGNIER, Rev. sociétés 2010, p. 367; S. MESSAI-BAHRI, RJC 2010, p. 350; H. VAUPLANE, Banque et droit 2010, p. 23.

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DE

FRAGILITY OF CROSS-BORDER ADULT PROTECTION THE DIFFICULT INTERPLAY OF PRIVATE INTERNATIONAL LAW WITH SUBSTANTIVE LAW Katja KARJALAINEN*

I. II.

Introduction The Interests of Vulnerable Adults and the Adult Protection Convention A. The Interests of a Vulnerable Adult B. The Policy-Oriented Norms of the Adult Protection Convention

III.

V.

The Interest of Adult and Material Differences A. Problematic Recognition due to Substantive Interests B. Continuing Powers of Attorney in a Cross-Border Context C. The Creative Use of Adaptation and Acceptance of Implied Choice-of-Law Rules 1. Adaptation of a Foreign Guardianship Decision 2. Continuing Powers of Attorney and Implied Choice-of-Law Clauses D. Representation in Health Care Matters and Advance Directives in a CrossBorder Context The Twofold Impact of Substantive Values and the Need for Comparative Knowledge Conclusion

I.

Introduction

IV.

We might argue that the task of private international law as a field is to build a bridge between two different legal systems so that a case that has cross-border elements may be transferred back to the substantive law sphere as efficiently and legitimately as possible. Nevertheless, substantive law exerts an influence in many ways upon the field of private international law. On the one hand, it can be related to the so-called materialisation of private international law, i.e. policy-oriented private international law.1 The values and principles stemming from the sphere of substantive law influence private international norms and decision-making. On the other hand, the interplay between private international law and substantive law can Postdoctoral Researcher, Private International Law and Comparative Law, LL.D at the University of Eastern Finland. 1 E.g. G. KEGEL, The Crisis of Conflict of Laws, Recueil des Cours 1964, p. 112. A. BONOMI Mandatory rules in private international law: the quest for uniformity of decisions in a global environment, this Yearbook, 1999, pp. 216-217. *

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 439-465 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

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Katja Karjalainen be viewed in an even wider perspective when one takes into account the way in which norms and principles stemming from the substantive law level can erode the foundations of private international law. There are several different cross-border situations in which the interests of vulnerable adults should be safeguarded and in which private international law is needed. A vulnerable adult may have property in multiple countries and require assistance in managing or selling that property. He or she may require representation in a cross-border inheritance situation or need medical care abroad, but be incapable of making the necessary decisions concerning his or her treatment without assistance.2 An adult may or may not have given continuing powers of attorney or an advance directive to allow others to make such decisions on their behalf. The ageing of the global population and the corresponding increase in agerelated illnesses are issues that have come to the fore over the past few decades.3 The mobility of people from all age groups has grown significantly as a result of technological advances and increasingly open borders. Thus, the cross-border protection of adults is a field of private international law that is likely to play a greater role in the near future.4 Nevertheless, while it may seem in theory that private international law offers tools to safeguard the interests of a vulnerable adult in cross-border situations, it often collides with substantive norms and the framework of substantive law in such a way as to cause one to wonder whether the apparently useful private international law fulfils its function in practice. One might question whether it can indeed build the desired bridge between legal systems in fields such as cross-border adult protection. This article aims to show how substantive law interests and norms influence the cross-border protection of adults and, thus, how they weaken the traditional structures of private international law. In support of this argument, I draw upon comparative knowledge of the Finnish, Spanish and Estonian guardianship systems. The first part of the article concentrates on the interests of vulnerable adults and The Hague Adult Protection Convention5. I summarise the main content These problems can be seen, for instance, in questions referred to the Helsinki Local Register Office, Finland, and the Central Notary of Lyon, France. 3 The number of people suffering from, for instance, Alzheimer’s disease and other forms of dementia is growing constantly. See Alzheimer’s Disease International, World Alzheimer Report 2018, “The state of the art of dementia research: New frontiers”, . 4 P. LAGARDE, Explanatory Report on the Hague Convention of 13 January 2000 on the International Protection of Adults, New and Revised Edition, 2017 paras 3-4. It is not uncommon, for instance, for a retiree from a northern country to spend his or her final years in the Spanish sun. See, for example, M. ECHEZARRETA FERRER, Gestión de la diversidad y de la pluriconexión jurídica. Respuesta del derecho internacional privado español a la protección de los gerontoinmigrantes comunitarios (GIC) en situación de vulnerabilidad, in M. ECHEZARRETA FERRER (ed), El lugar XVI europeo de retiro. Indicadores de excelencia para administrar la gerontoinmigración de ciudadanos de la Unión Europea en municipios españoles, Editorial Comares 2005, pp. 335-398. 5 Hague Convention of 13 January 2000 on the International Protection of Adults. The Convention entered into force 1 January 2009. 2

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Fragility of Cross-Border Adult Protection of the concept and how it has been taken into consideration in the Convention. The interests of the adult is an interesting concept as it can used, and seen, to bring together the different material needs and controversies of adult protection stemming in particular from the sphere of fundamental and human rights. In the second, and core, part of the article, I use direct recognition and continuing powers of attorney to illustrate that the substantive differences between jurisdictions cannot be disregarded despite the seemingly straightforward and functional nature of a private international law norm. The treatment of substantive law interests may ask for more flexibility from private international law norms than might be anticipated, thus placing pressure on the fundamental premises of these norms. I also cover representation in health care matters and advance directives, which exemplify how the limits of private international law may have already been reached as a consequence of differing substantive law interests. In the final part of the article, I consider what the aforementioned issues mean for the field of private international law. It will be noted that the effects of the key principles, such as the safeguarding of the interests of vulnerable adults, are twofold. They can be used in a controlled manner, but their effects with respect to the fundamental rights and human rights can be so far-reaching as to mean that they erode the framework of private international law. This shows a compelling need for comparative information in cross-border adult protection cases.

II.

The Interests of Vulnerable Adults and the Adult Protection Convention

A.

The Interests of a Vulnerable Adult

The policy orientation of private international family law stems from the need to protect the weaker party in legal relations. It may be argued that the special concept used in the cross-border protection of adults – the interests of the adult – accords with the general idea of protecting the weaker party, but at the same time places limits on the more protective characteristics of this approach.6 That is to say that the protection of the weaker party does not sufficiently safeguard that party’s right to have his or her wishes respected. This is self-evident in many cases, but historically – and due to the nature of the field – it has not always been the case when it comes to adult protection matters.7 6 See, for example, U. LIUKKUNEN, The role of mandatory rules in international labour law: a comparative study in the conflict of laws, Talentum 2004, pp. 9-12; D-J. VICENTE BLANCO, La protección de los adultos en el derecho internacional privado codificado por la conferencia de La Haya: el convenio de 13 de enero de 2000 y sus soluciones, in Oñati Socio-Legal Series 7 2011, pp. 1-8. 7 E.g. I. DORON, Elder Guardianship Kaleidoscope – A Comparative Perspective, Int. J. Law Policy Family 2002, pp. 3-16; M. RHEINSTEIN/ S.J. STOLJAR, Persons and family: Children, parents and guardians, in International Encyclopedia of Comparative Law, Vol 4, pp. 19-23.

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Katja Karjalainen It may be argued that the concept of the interests of a vulnerable adult brings together the different substantive law issues that exercise a background influence in cross-border adult protection cases and reflects the Adult Protection Convention’s policy orientation. The flexibility of the concept allows the special circumstances of individual cases to be taken into consideration. However, it can be difficult to determine the interests of the adult that are at stake in any given case. Problematically, while the corresponding concept of the best interests of a child is defined in the UN Convention on the Rights of the Child8, there is no internationally agreed definition of the interests of a vulnerable adult.9 However, the interests of a vulnerable adult must also be interpreted in the light of the fundamental and human rights framework, most importantly in accordance with the UN Convention on the Rights of the Persons with Disabilities (hereinafter UNCRPD)10 and its Article 12. It provides inter alia that “States Parties shall recognize that persons with disabilities enjoy legal capacity on an equal basis with others in all aspects of life” (para. 2) and that “States Parties shall take appropriate measures to provide access by persons with disabilities to the support they may require in exercising their legal capacity” (para. 3). Article 12 requires that a system never deny legal capacity and instead that it provide appropriate assessment limited to what types of support a vulnerable adult needs in order to be able to exercise his or her legal capacity.11 The emphasis is intended to be on the best interpretation of the will and preferences of a vulnerable adult.12 The concept of the interests of the adult is thus to be interpreted as referring, on the one hand, to the independent wishes of the adult and, on the other, to the right to be supported and protected on a flexible basis. Measures to protect a vulnerable adult 8 Resolution adopted by General Assembly on 20 November 1989, A/RES/44/25. The Convention on the Rights of the Child entered into force on 2 September 1990. 9 The “best interests of the child” concept is utilised in the parallel Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children. The best interests of a child and the interests of a vulnerable adult are not wholly synonymous, as the latter relates. Among other things, the differences relate to the adult’s right to personal autonomy, the right to have his or her wishes respected and the capacity he or she once had and which a child cannot have had in view of his or her age. Hence, the best interests concept might be viewed as too limiting and patronizing in relation to adults. The legal literature is, however, unanimous on the matter. See, J. LONG Rethinking Vulnerable Adults Protection in the light of the 2000 Hague Convention, 27 1 Int J Law Policy Family 2013, pp. 58-59; A. RUCK KEENE, Part II: The Cross-border Protection of Adults: Hague 35 in R. FRIMSTON et al. (eds), The International Protection of Adults, Oxford University Press 2015, pp. 98-99, pp. 172-173. 10 Resolution adopted by the UN General Assembly on 13 December 2006, A/RES/61/106. The Convention on the Rights of Persons with Disabilities entered into force on 3 May 2008. 11 A. ARSTEIN-KERLAKE, Legal Capacity and Supported Decision-making: Respecting Rights and Empowering People, in C. O´MAHONY / G. QUINN (eds), Disability Law and Policy. An Analysis of the UN Convention, Clarus 2017, pp. 77-78. 12 UN Committee on the Rights of Persons with Disabilities, General Comment No. 6 (2018) on equality and non-discrimination CRPD/C/GC/6, para. p. 49.

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Fragility of Cross-Border Adult Protection must always be secondary. They can only be used if the adult cannot be supported in any other way. Decisions made in adult protection matters must be proportionate and necessary.13 In accordance with the Recommendation of the Council of Europe, in deciding whether a legal measure is necessary, any less formal arrangements that might be employed and any assistance that might be provided by family members, public authorities or by other means must be taken into account (principle of subsidiarity). No measure of protection should be established unless it is strictly necessary, bearing in mind the circumstances of the case (principle of necessity). The principle of proportionality requires that where a measure of protection is necessary it should be proportionate to the degree of capacity of the person concerned and tailored to the individual circumstances of the case. The measure should restrict the rights and freedoms of the person concerned by the minimum that is consistent with achieving the purpose of the intervention.14 The question of what constitutes the interests of a vulnerable adult in a particular cross-border case is controversial and can be approached from opposing angles. On the one hand, it is in the interests of a vulnerable adult that the recognition of guardianship decisions is as robust as provided for under the Adult Protection Convention. On the other hand, the interests of a vulnerable adult may require that the adult’s right to personal autonomy and to have his or her wishes respected is safeguarded in the receiving State to a higher level than that indicated by direct recognition of a foreign decision. Different jurisdictions interpret the interests of a vulnerable adult differently. In this context, it is worth bearing in mind the fundamental rights laid down in, and the foundations of, the national guardianship system in question. The examples given below show that in a crossborder adult protection case one jurisdiction might consider limiting the competency of a vulnerable adult to being in his or her interests – despite the approach laid out by the UNCRPD – while another might have a totally different perspective because it places greater emphasis than the first on the adult’s right to have his or her wishes respected.

Council of Europe, Recommendation No. R (99) 4 of the Committee of Ministers to Member States on Principles Concerning the Legal Protection of Incapable Adults (Adopted by the Committee of Ministers on 23 February 1999 at the 660th meeting of the Ministers' Deputies). This requirement is also very visible in the relevant case-law of the European Court of Human Rights (ECHR). See, for example, ECHR, 27 March 2008, Shtukaturov v Russia, App. No 44009/05; 24 March 2009, Berková v Slovakia, App. No 67149/01; 22 November 2012, Sýkora v Czech Republic, App. No 23419/07; 18 September 2014, Ivinovic v Croatia, App. No 13006/13. 14 Council of Europe, Explanatory Memorandum on principles concerning the legal protection of incapable adults (Adopted by the Committee of Ministers on 23 February 1999, at the 660th meeting of the Ministers' Deputies), paras 38-40. 13

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Katja Karjalainen B.

The Policy-Oriented Norms of the Adult Protection Convention

The Adult Protection Convention covers all aspects of private international law.15 The Convention demonstrates that the cross-border protection of adults is a field in which the emphasis is on procedural norms. Given that it is situated somewhere in the grey area where private law and public law meet, rules on conflict of laws often play a less significant role in the field than those on jurisdiction, recognition of foreign decisions and international cooperation.16 The aim of safeguarding the interests of a vulnerable adult and the flexibility employed in order to do so pervade the entire Convention, as the following few examples show. The main connecting factor under the Adult Protection Convention is habitual residence. The State where an adult has his or her habitual residence is competent in matters falling under the scope of the Convention (Article 5). Other connecting factors included in the Convention are secondary and depend either on special circumstances or on the State’s acceptance of the habitual residence of an adult.17 The idea of balancing predictability and objective legal certainty against flexibility underlies the system of primary and secondary connecting factors.18 Their purpose is to promote legal certainty while simultaneously providing sufficient flexibility to serve the interests of the vulnerable adult in the best possible manner. Article 8 of the Convention illustrates this point particularly well. The authorities of the State in which the vulnerable adult is habitually resident may request certain other authorities to take measures for the protection of that adult or of his or her property if such a request is considered to be in that person’s interests (Article 8(1)).19 Interestingly, the provision can be seen as a civil law modification The number of States Party to the Adult Protection Convention is rising slowly but surely. To date, the Convention has twelve Contracting States; Austria, Czech Republic, Cyprus, Germany, Estonia, Finland, France, Latvia, Monaco, Portugal, Switzerland and the United Kingdom (in relation to Scotland only). The status table of the Convention is available on the webpage of the Hague Conference: . 16 The public-law-related nature of protection questions leads to the conclusion that it is often problematic to apply foreign law. This was acknowledged in the Boll case that dealt with guardianship measures of a minor who was a Dutch citizen living in Sweden: ICJ, Case Concerning the Application of the Convention of 1902 Governing the Guardianship of Infants (Netherlands v Sweden), [1958]. See also W. RIPHAGEN, The Relationship between Public and Private Law and the Rules of Conflict of Laws, Recueil des Cours 1962, pp. 232238; H. VAN LOON/ S. DE DYCKER, The Role of the International Court of Justice in the Development of Private International Law, in R. LESAFFER (ed.), One Century Peace Palace, from Past to Present, Asser Press 2013, pp. 87-90. 17 Other secondary connecting factors mentioned in the Convention are (a) the nationality of the adult (Art. 7); (b) a request made by the authorities of the State in which the adult is habitually resident or is located (Art. 8); (c) lex rei sitae (Art. 9); (d) urgency (Art. 10); and (e) the presence of an adult in a State in relation to measures for the protection of the person of the adult which are temporary in nature and have limited territorial effect (Art. 11). 18 See, for example, T. KRUGER, The Quest for Legal Certainty in International Civil Cases, Recueil des Cours, 2015, pp. 291-292. 19 The Contracting States whose authorities may be addressed are (a) a State of which the adult is a national; (b) the State in which the adult was previously habitually 15

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Fragility of Cross-Border Adult Protection of the forum non conveniens doctrine. The decisive factor is not, however, the inappropriateness of the State in question having jurisdiction, but the interests of a vulnerable adult in any given case. Another State may be in a better position to protect the interests of the adult, in which case jurisdiction should be transferred to it. Unlike in the forum non conveniens situation, the transferee State must accept jurisdiction.20 The principle of lex fori in foro proprio applies in cross-border adult protection matters (Article 7(1)).21 Nevertheless, the authorities of the contracting State may exceptionally apply or take into consideration the law of another State with which the situation has a substantial connection if that is in the interests of an adult (Article 7(2)). The application of lex fori is often the only possible option in view of the public-law nature of the protection issues involved, but it also has the advantage of contributing to the efficiency of the procedure. It is naturally in the interests of the vulnerable adult that cross-border issues related to protection are resolved as quickly and cheaply as possible.22 The Adult Protection Convention sets out rules governing international cooperation (Chapter 5) and provides for a certificate of protection (Article 38). In this context, the need to safeguard the interests of a vulnerable adult is not explicitly spelled out. However, the principle can be seen to exert an influence in the background. International cooperation and the provision of a certificate are important in order to reduce expenses and streamline the procedures to be followed in cross-border protection situations.23 The influence of the interests of a vulnerable adult on the provisions is well illustrated by the views of BORRÁS on the protection of children to the effect that the best possible guarantees are required by the principle of protecting the weaker party and that for this reason intervention by the

resident; (c) a State in which property of the adult is located; (d) the State the authorities of which the adult has designated to take measures directed to his or her protection; (e) the State of the habitual residence of a person close to the adult who is prepared to undertake his or her protection; and (f) the State in whose territory the adult is present, with regard to the protection of the person of the adult. 20 D-J. VICENTE BLANCO (note 6), p. 12. 21 Other connecting factors, such as nationality, can only very seldom be used in relation to guardianship matters. See, for example, K. SIEHR, Protection of Adults in Private International Law under the 1997 Hague Preliminary Draft Convention, in K. BOELEWOELKI/ E. MOSTERMANS (eds), Volwassen maar onzelfstandig – Meerderjaringebesherming in Europees en internationaal privaatrechtelijk perspectief, Intersentia 1999, p. 119. 22 There may be certain rare cases in which it is justifiable to apply the law of another State. For instance, it is reasonable to take into consideration requirements which another jurisdiction sets for the guardian if it is clear under the given circumstances that the adult also needs to be represented in this other jurisdiction because he or she has property there. See, for example, E. CLIVE, The New Hague Convention on the Protection of Adults, this Yearbook, 2000, pp. 10-11. 23 N. COLEMAN et al., Cases that Cross Borders, 1 J. Int'l Aging L. & Policy 2005, p. 91.

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Katja Karjalainen central authority is justified or even required when a child is in need of protection.24 The few examples mentioned above show that the Adult Protection Convention probably strikes a workable balance between the requirement for legal certainty and predictability and the need for flexibility. Thus, it seems at first glance to place sufficient emphasis on substantive law needs but at the same time to fulfil the traditional goals of private international law. Given the relatively strong status of the main solutions set out in the Convention, its secondary solutions and the flexibility they provide should not in theory cause unnecessary uncertainty in relation to decision-making.25 Nevertheless, a number of seemingly functional solutions contained in the Convention may not work as well as one might wish when differences between the substantive guardianship laws of different States are taken into consideration. For instance, challenges may be encountered in relation to the direct recognition of foreign guardianship decisions and continuing powers of attorneys used in cross-border cases, and such problems may be still more acute in relation to representation in health care matters and in the case of advance directives.

III. The Interest of Adult and Material Differences A.

Problematic Recognition due to Substantive Interests

It is in the interests of a vulnerable adult that his or her representative appointed in one jurisdiction can act on behalf of the adult in another jurisdiction if necessary. This is both cost-effective and time-efficient when set against the need to hand down an identical decision in another jurisdiction. In theory, the Adult Protection Convention contains functional rules concerning recognition and enforcement of foreign decisions. It provides that in principle a decision handed down in one Contracting State is directly applicable in another Contracting State (Article 22(1)). Recognition may, however, be refused if one of the grounds for refusal provided by the Convention applies (Article 22(2)).26 In practice, the issue is more 24 A. BORRAS RODRIGUEZ, El papel de la “autoridad central”: Los Convenios de la Haya y España, REDI, 1993, pp. 78-79. 25 It should be noted, moreover, that the significance of such flexibility is doubtful in practice. One may ask whether an individual involved in a cross-border guardianship case has the time and resources to benefit from the flexibility provided by the Convention. This is emphasized by the fact that the Adult Protection Convention seems to be applied relatively frequently. For instance, it entered into force in March 2011 in Finland but as of October 2017 no cases involving the Convention had been handled by any Finnish court. 26 On the basis of the Adult Protection Convention, a Contracting State may refuse to recognize a measure taken in another Contracting State (a) if the measure was taken by an authority whose jurisdiction was not based on, or was not in accordance with, one of the grounds provided for by the provisions of Chapter II; (b) if the measure was taken, except in a case of urgency, in the context of judicial or administrative proceedings, without the adult having been provided the opportunity to be heard, in violation of fundamental principles of

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Fragility of Cross-Border Adult Protection complex because the differences in the substantive laws in force in different States must be taken into account. The guardianship norms under Finnish and Spanish law can be used to illustrate relevant differences in the substantive law framework. The Spanish Civil Code provides that the use of protective measures requires a declaration of incompetency (Article 200).27 A decision to this effect states the vulnerable adult’s actual functionality and its limitations. Depending on the adult’s condition, his or her competency may be categorised as either wholly or partially limited.28 Only after this declaration has been made is it decided what type of protective measure (tutela, curatela, defensor judicial) meets the needs of the incapacitated adult, and whether there is, for instance, a need for institutional care.29 In the majority of cases the competency of the adult is categorised as wholly limited, and a tutor is appointed.30 It is considered necessary to substitute, for instance, the competency of a person in a coma, because in that condition he or she does not have decision-

procedure of the requested State; (c) if such recognition is manifestly contrary to public policy of the requested State, or conflicts with a provision of the law of that State which is mandatory whatever law would otherwise be applicable; (d) if the measure is incompatible with a later measure taken in a non-Contracting State which would have had jurisdiction under Arts 5 to 9, where this later measure fulfils the requirements for recognition in the requested State; and (e) if the procedure provided in Art. 33 has not been complied with. 27 In this article, references to declarations of incompetency and limiting the competency of an adult refer solely to limitations placed on a person’s capacity to act. These terms do not refer to any limitation on an adult’s legal personality, that is, his or her capacity to have rights and obligations as a natural person. Also, the same applies to term legal capacity used in this article in the context of the UNCRPD. It can be claimed that the UNCRPD does not sufficiently distinguish between the two components – legal personality and capacity to act – of legal capacity. See e.g. Submission by the Norwegian Government. Committee on the Rights of the Persons with Disabilities. Draft General Comment No. 1 on Article 12 of the Convention (2014). 28 C. GANZEN MÜLLER/ J. ESCUDERO MORATALLA, Discapacidad y derecho: tratamiento jurídico y sociológico, Bosch 2005, p. 30. 29 As in most legal systems of Roman tradition, also in Spain tutela refers to full and comprehensive guardianship. It covers representation in both financial and personal matters. Curatela involves representation only in financial matters. Under tutela the competency of a vulnerable adult is wholly replaced. A vulnerable adult under curatela preserves his or her capacity to act but must exercise this in conjunction with a curator. A defensor judicial is needed to represent a vulnerable adult temporarily, for instance where there is a conflict of interest between the vulnerable adult and his or her tutor or curator. It is worth noting that the strict differences between these legal concepts have gradually started to dissolve, and more flexible approaches have begun to be used. See e.g., B. SILLERO CROVETTO, Implicaciones del artículo 12 de la convención internacional sobre los derechos de las personas con discapacidad en el sistema jurídico español, in J. GONZALEZ GARCIA/ D. JIMENEZ LIEBANA (eds), Estudios de derecho civil en homenaje al profesor José González García, Aranzadi 2012, pp. 156-157. 30 For instance, according to an unpublished Catalan survey from 2014 by the Fundació ACE, Barcelona Alzheimer Treatment & Research Center, in 98 per cent of cases an adult is placed under tutela.

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Katja Karjalainen making capacity.31 The Finnish Guardianship Services Act (Laki holhoustoimesta 1.4.1999/442) lays down a very different general principle. It stipulates that only in very exceptional cases is the competency of a vulnerable person limited (section 18). A court may restrict an adult’s competency if the appointment of a guardian is not in itself sufficient to safeguard his or her interests.32 Basically, the main idea is that the competency of an adult can only be limited if he or she actively acts against his or her own interests and if merely appointing a guardian is not sufficient to safeguard these interests.33 Hence, whereas the Spanish Civil Code requires a decision on declaring incompetency, the Finnish Guardianship Services Act mostly ignores such a possibility. The competency of a person lying in a coma cannot be limited under the Finnish system, because he or she is, among other things, unable to act against his or her own interests. The private international law chapter of the Finnish Guardianship Services Act is closely modelled on the Adult Protection Convention. Thus, in principle, a Spanish tutela decision is directly applicable in Finland (section 95j). Hence, remarkably, when a Spanish guardianship decision is recognized and takes effect in Finland, the adult’s competency is not limited because of his or her need for protection, but because the guardianship decision was made abroad, in a State in which the guardianship system follows guidelines that take a different approach to achieving a balance between protection and self-determination. This is obviously a highly undesirable outcome. It most probably contravenes the UNCRPD (Article 12(3)) and the principles of necessity and proportionality, because the limitation on competency, from the perspective of the receiving State, oversteps the necessary level of protection. Furthermore, it leads to unequal treatment of vulnerable adults depending on where the guardianship decision concerning them was originally made. As recognition of a Spanish guardianship decision in Finland raises questions relating to the proportionality and necessity of the protection, and equal treatment, of vulnerable persons, the overriding mandatory provisions and public policy cannot be disregarded. There are also expressly stated grounds for refusal of recognition both in the Adult Protection Convention and in the Guardianship Services Act. The Finnish travaux préparatoires on international protection of adults maintain that due to public policy exception a decision that manifestly conflicts with the Finnish guardianship legislation cannot be recognised. Such decisions include, for instance, one under which the guardian’s competency is 31 M. LINACERO DE LA FUENTE, Protección jurídica de personas con discapacidad, menores desfavorecidos y personas mayors, Universidad Complutense Madrid 2004, p. 43. J. RAMS ALBESA, Hombre y persona. Personalidad. Capacidad e incapacidad. Discapacidad y vejez, 723 Revista Crítica de Derecho Inmobiliario 2011, pp. 279-284. 32 In such a case, the court may decide that (a) the adult may enter into given transactions or administer given property only in conjunction with the guardian; (b) the adult is not competent to enter into certain transactions or to administer certain property; or (c) the adult is declared incompetent. 33 At the end of 2015, the competency of a principal had been partially limited or an adult had been declared incompetent in less than 3 per cent of operative guardianships in Finland. See Maistraattien ohjaus- ja kehittämisyksikkö, Itä-Suomen aluehallintovirasto, Statistics 31.12.2015.

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Fragility of Cross-Border Adult Protection significantly disproportionate.34 However, it is also very likely that Section 18 of the Guardianship Services Act concerning the limitation of a vulnerable adult’s competency is, in the light of its nature, a provision which can be thought of as internationally mandatory.35 The competency of an adult and his or her right to personal autonomy and to have his or her wishes respected is a fundamental right and a human right which is deeply embedded in national legal systems.36 A provision limiting such a right is a norm which cannot easily be disregarded even in a cross-border situation.37 Hence it may be argued that a protective measure laid down by another State that does not fulfil the requirements of necessity and proportionality applicable to guardianship decisions made in the receiving State should not be recognized (1) because it conflicts with internationally mandatory rules (if we take the view that the substantive rules that limit an adult’s competency are mandatory norms) or (2) because such a limitation would lead to an outcome contrary to public policy in the receiving State. B.

Continuing Powers of Attorney in a Cross-Border Context

Another example of a seemingly functional general approach under private international law is provided by the choice-of-law rules regarding the law applicable to the existence, extent, modification and extinction of powers of representation granted by an adult, either under an agreement or by a unilateral act contained in the Adult Protection Convention (Article 15). The law applicable to powers of representation is the law of the State of the adult’s habitual residence at the time of the agreement or act. The adult can, however, also designate the law applicable in writing.38 The provision is one of the most important in the Convention, albeit not because of its practical significance. It must be admitted that it is unlikely that very many consider a choice-of-law clause to be an essential part of continuing powers 34 Hallituksen esitys Eduskunnalle aikuisten kansainvälisestä suojelusta tehdyn yleissopimuksen hyväksymisestä ja laeiksi sopimuksen lainsäädännön alaan kuuluvien määräysten voimaan- saattamisesta ja sopimuksen soveltamisesta sekä eräiden siihen liittyvien lakien muuttamisesta, HE 61/2010, p. 33. E. CLIVE (note 22), p. 13. 35 Correspondingly, A. RUCK KEENE (note 9), pp. 136-137, considers that recognition might properly be refused under Art. 22(2) of the Adult Protection Convention when it is sought in respect of a protective measure taken in relation to an adult who would not fall within the scope of those eligible for protection under the relevant domestic legislation. Regeringskansliet, Justitiedepartementet: Skydd för vuxna i internationella situationer - 2000 års Haagkonvention, SOU 2015:74, pp. 220-221. 36 The Finnish Constitution, section 7(1). See also the case-law of the ECtHR referred to in note 9. 37 See, e.g., L. KIESTRA, The impact of the European Convention on Human Rights on Private International Law, Asser Press 2014, pp. 275-281. 38 The laws that may be designated on the basis of the Convention are: (a) the law of the State of which the adult is a national; (b) the law of the State of former habitual residence of the adult; (c) the law of the State in which property of the adult is located, with respect to that property.

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Katja Karjalainen of attorney.39 In addition, one might imagine that third parties do not necessarily trust and hence are not very willing to enter into a contract with the representative.40 Nevertheless, it is impossible to evaluate modern adult protection without acknowledging the continuing power of representation given in advance by the vulnerable adult him- or herself. The Adult Protection Convention would be hopelessly outdated if it lacked provisions on continuing powers of representation.41 Simply put, the provision recognizes an adult’s right to have his or her wishes respected even where he or she has diminished capacity to act. This is also one of the main principles set out in UNCRPD Article 12(3). In addition, the provision has symbolic value in that it acknowledges party autonomy as one of the connecting factors in cross-border adult protection. The solution provided by the Adult Protection Convention is, however, somewhat problematic in view of the differences between the substantive laws of different States. A Finnish-Estonian continuing power of attorney and comparative notions on the substantive guardianship laws of Finland and Estonia offer an illuminating example. Both States have ratified the Adult Protection Convention. Finnish legislation provides rules for continuing powers of attorney, which are not, however, recognized under Estonian law. Consider, therefore, the following scenario. A Finnish citizen living in Estonia grants a continuing power of attorney that fulfils the requirements set out in the Finnish Act on Continuing Powers of Attorney (Laki edunvalvontavaltuutuksesta 25.5.2007/648). The private international law aspect of the power of attorney is unfamiliar to the lawyer drafting it and the document lacks a choice-of-law clause. The Finnish citizen then moves back to Finland, is involved in a road accident and suffers severe brain damage as a result of which his capacity to act is permanently diminished. Because Article 15(1) requires that the law chosen must be designated expressly in writing, the continuing power of attorney granted by the adult in advance would in these circumstances be invalid.42 This is, naturally, a result that is hardly in the vulnerable adult’s interests. The adult’s own wishes are not respected because of a technical choice-of-law rule which in theory has a protective function, but which may in practice prove counterproductive. On the one hand, differences in the substantive law on adult protection choice-of-law rules can lead to the adult’s wishes being disregarded without, perhaps, objectively acceptable reasons. It is questionable whether the result is in line with the requirement to respect legal capacity set out in the UNCRPD. On the other hand, the question of the validity of the continuing power 39 For instance, in pre-nuptial agreements the choice-of-law aspect is very seldom taken into consideration. M. JÄNTERA-JAREBORG, Partsautonomi och efterlevande makes rättsställning: en internationellt-privaträttslig studie, Iustus förlag 1989, pp. 198-199. 40 M. HELIN, Suomen kansainvälinen perhe- ja perintöoikeus, Talentum 2013, p. 524. A. RUCK KEENE (note 9), p. 162. 41 The real international breakthrough in respect of continuing powers of attorney happened after the Convention was concluded, which also explains the fact that the relevant provision is tucked away in the chapter dealing with choice of law. Ruck Keene, for example, has criticised this outcome. See ibid. 170. 42 P. LAGARDE (note 4) para 98; SOU 2015, (note 35) p. 228.

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Fragility of Cross-Border Adult Protection of attorney would most probably not even emerge if the choice-of-law rule governing the matter did not exist. It is unlikely that the validity of the instrument given by the Finnish citizen living abroad would be compromised in that case. C.

The Creative Use of Adaptation and Acceptance of Implied Choice-ofLaw Rules

As noted above, both direct recognition and choice of law relating to continuing powers of attorney can be problematic due to the differences in substantive law. At worst, the problems thrown up by these issues have the potential to erode the framework of private international law. On the one hand, the credibility of private international law suffers if it produces results that are seemingly unacceptable in specific cases. On the other hand, problems create a temptation to bypass the framework of private international law and to resolve the case directly under substantive law. The problems thrown up by private international law in relation to direct recognition and continuing powers of attorney are not exactly the same. Both issues, however, raise the question of whether there are further means available to accommodate the needs of both substantive law and private international law. It is worth noting that in respect of both of these issues it may be possible to make more extensive use of the traditional tools of private international law. 1.

Adaptation of a Foreign Guardianship Decision

It is clear that, given the need to respect adults’ legal capacity and competency and the requirement of equal treatment of adults, recognition of protective measures in another State is problematic in the absence of knowledge of its substantive protective system or in circumstances where it is clear that the principles governing the system differ markedly from those applied in the receiving State, for instance in relation to the limitation of an adult’s competency. Nevertheless, the vulnerable adult in question is still in need of protection and starting new guardianship proceedings in the receiving State is unlikely to be in his or her interests either. One therefore has to ask whether a Spanish guardianship decision could be adapted and recognized without limiting a vulnerable adult’s competency in Finland.43 As mentioned above, thus far a Finnish-Spanish guardianship case is not one that falls within the scope of the Adult Protection Convention. Nevertheless, adaptation could be considered on the basis of the possibilities provided by the Convention. On the one hand, it is unreasonable to think that cases falling within the scope of the Convention should be adapted in a different manner from those

The question is especially relevant in relation to registration of the decision. If the adult in question becomes habitually resident in Finland, the decision must be registered in the guardianship register (Guardianship Services Act, section 65). One may then ask how the local register office should deal with such a decision. For instance, can it register the decision and state that the principal is under general guardianship but that his or her competency is not limited, even though the foreign decision states that it is limited? 43

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Katja Karjalainen that do not.44 On the other hand, differences similar to those between the substantive laws of different States can emerge in cases covered by the Convention. For instance, Estonian guardianship legislation is based on the same approach as the Spanish legislation on this topic, which means that the same problem regarding recognition emerges in Finnish-Estonian guardianship cases. The provision relating to adaptation in the Adult Protection Convention states simply that when a measure taken in one Contracting State is implemented in another Contracting State, the conditions of its implementation are governed by the law of that other State (Article 14). Interpretation of this provision can be challenging. For instance, Helin writes that it may be difficult to draw a distinction between the protective measure itself and its conditions of implementation. Helin considers that the conditions of implementation should not be given a wide interpretation. The nature of the protective measure applied in one State should not change in another as a result of its adaptation. He argues that it would be a better option to take a new decision than to change the nature of the protective measure, if that is possible on the basis of competence norms.45 This opinion appears justified when one takes into account the comity required under private international law, pursuant to which the law of another State should be applied loyally, and adaptation should be carried out as discreetly as possible and should not be used to promote the receiving State’s policy goals.46 Nevertheless, adaptation of the decision could arguably be regarded as a functional approach even if it necessitates bending the rules laid down in the Adult Protection Convention. In such circumstances, adaptation could be utilised to strike a balance between the requirements of fundamental rights and human rights and the efficient recognition of foreign decisions, and to promote equal treatment.47 Thus, adaptation might be required by the UNCRPD Article 5 in respect of the rights provided under its Article 12(3).48 Also, from a practical perspective, it may often prove more reasonable to recognize a decision and make the necessary adaptations rather than declining to recognize the decision at all. It is hardly in the interests of a vulnerable adult to have to start the proceedings needed in order to protect him or her all over again in another State. Especially if the same person, for instance a close relative, would be his or her representative in both States. Furthermore, it must be noted that the scope of adaptation in private international family law appears to have gradually grown. The assimilations made between registered 44 This is also the general approach taken in the corresponding provision of the Finnish Guardianship Services Act (section 95 l), HE 61/2010 (n 31), p. 34. 45 M. HELIN (note 40), pp. 510-512. Similarly, W. KENNETT, Current Developments: Private International Law, 4 I.C.L.Q. 1999, p. 500, takes the view that interpretation is likely to lead to some difficulty when States whose laws are potentially applicable take very different approaches to the regulatory issues concerned. 46 M. BOGDAN, Svensk internationell privat- och processrätt, 7th edn, Norstedts Juridik 2008, pp. 51-54, p. 113. 47 See, e.g. G. DANNEMANN, Adaptation, in S. LEIBLE (ed.), General Principles of European Private International Law, Wolters Kluwer 2016, pp. 340-341. 48 See Committee on the Rights of Persons with Disabilities General Comment No. 6 (2018) on equality and non-discrimination CRPD/C/GC/6 para. 49.

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Fragility of Cross-Border Adult Protection partnerships and same-sex marriages in the context of recognition serve as an illustrative example of this.49 The general problem is that direct recognition does not allow one to investigate the foundations of the foreign decision in order to discover whether there is a reason that would justify the limitation of an adult’s competency from the receiving country’s perspective. Uncertainties also delay completion of procedures and cause extra expense. Furthermore, as Dannemann notes, there is a risk that wide use of adaptation gives judges “carte blanche” to adapt freely whenever they feel uneasy about a foreign decision.50 Nevertheless, despite the obvious problems involved in the wider use of adaptation, it seems clear that at least in cases where it is obvious that there are substantial differences between the general guardianship approaches of the legal systems involved, the minimum requirement is undoubtedly that the basic values of the receiving State are taken into consideration when it seems that the foreign decision may not reflect them. 2.

Continuing Powers of Attorney and Implied Choice-of-Law Clauses

Continuing powers of attorney are similarly not problem-free in a cross-border context. As noted above, differences between the guardianship laws and approaches of different States may lead to insecurities in relation to the use of continuing powers of attorney. One way to resolve such issues would be to allow implied choice-of-law clauses. Another solution, which could in some cases be used alongside such clauses, would be to evaluate continuing powers of attorney by reference to the law of the jurisdiction where they are used. Implied choice-of-law clauses were prohibited in the Adult Protection Convention in order to avoid uncertainty in relation to the law applicable to the powers to be exercised at a time when the adult who conferred them is no longer in a position to protect his or her interests.51 This is a seemingly understandable general principle. By the time the powers are used, the adult in question will probably not be able to offer an opinion on the matter. It is possible that allowing implied choice-of-law clauses would open the door to the fraudulent use of continuing powers of attorney. Furthermore, the general principle is in line with the generally sceptical approach taken under private international family law to the acceptance of implied choice-of-law clauses. The protection of a weaker party reasonably requires that that party has chosen the applicable law knowingly.52 However, a complete prohibition of an implied choice-of-law clause can be called into question. This is especially true of cases in which all the relevant factors clearly 49 See, e.g., M. BOGDAN, Some Reflections on the Treatment of Dutch Same-Sex Marriages in European and Private International Law, in T. EINHORN/ K. SIEHR (eds), Intercontinental Cooperation through Private International Law, Asser Press 2004, pp. 2829. 50 G. DANNEMANN, (note 47), p. 341. 51 P. LAGARDE (note 4), para 101. 52 See, e.g., A. BONOMI, Explanatory Report on the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations, 2013, para 59.

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Katja Karjalainen indicate the adult’s intention. It should also be noted that no other party whose interests need to be considered is involved in the continuing power of attorney. There is only the adult him- or herself who granted the power in advance while still fully competent. One must therefore ask whether a blanket prohibition of implied choice-oflaw clauses leads to a result that is in the interests of the vulnerable adult, for instance in the Finnish-Estonian scenario discussed above. The adult’s own wishes are clear. One may also ask whether a third party exists in whose justified interests it would be for the continuing power of attorney to be regarded as invalid, taking into consideration the legal nature of such instruments. They are markedly personal in nature and are designed to safeguard an individual’s right to provide advance guidance on decision-making to be carried out at a point in the future when he or she is no longer capable of making such decisions for him- or herself. If the instrument implicitly fulfils the requirements set for continuing powers of attorney in some closely linked jurisdiction, there would seem to be no reason not to respect the personal wishes of the vulnerable adult concerned. Furthermore, in this context it is worth noting that the Adult Protection Convention contains rules allowing for the interests of the vulnerable adult to be safeguarded when the continuing powers of representation do not provide such protection to a sufficient degree. The powers granted can be withdrawn or modified by an authority that has jurisdiction under the Convention (Article 16). It is also worth bearing in mind that the manner in which such powers may be exercised is governed by the law of the State in which they are exercised (Article 15(3)). It could of course be argued that this is merely a theoretical question, given that a third party would probably not accept a power of attorney that lacked the necessary choice-of-law clause. However, the Finnish Act on Continuing Powers of Attorney provides that in certain cases the power of attorney must be registered in the guardianship register.53 This might arguably lead to the question being raised as to whether the Local Register Office would register a Finnish-Estonian continuing power of attorney drafted by a Finnish citizen living in Estonia. The fact that the continuing power of attorney was drafted in accordance with the Finnish requirements implies that the intention was for Finnish law to be applied. It could be reasoned that in the circumstances outlined here it would be in the interests of a vulnerable adult for the continuing power of attorney to be deemed to include an implied and valid choice-of-law clause and to be registered despite the fact that the Adult Protection Convention expressly prohibits the use of implied choice-of-law clauses.

The Act on Continuing Powers of Attorney provides that the Finnish authority has the competence to confirm the continuing power of attorney if the principal is habitually resident in Finland (s 38). In addition, if the principal is not habitually resident in Finland, but the continuing power of attorney deals with property located in Finland, the power of attorney can be confirmed in Finland with regard to that property. If the Finnish authority has the competence to confirm the power of attorney, it is also competent to register the power of attorney in the register of guardianship matters. Furthermore, a continuing power of attorney that deals with financial matters must be registered in the register of guardianship matters if the principal is habitually resident in Finland. 53

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Fragility of Cross-Border Adult Protection An adult might have elected in his or her continuing power of attorney for the laws of a State that does not recognize such an instrument to apply in respect of it. The choice-of-law clause might have been omitted from the continuing power of attorney even though it was clearly drafted in accordance with the law of a given State. In such a case it would seem justifiable either for the continuing power of attorney to be deemed to include an implied choice-of-law clause or for it to be evaluated in relation to the laws of the State in which it is implemented, if this is possible in the light of its content. An interpretation of the Adult Protection Convention in line with the UNCRPD supports the view that priority should be given to respecting the adult’s personal wishes rather than being bound by the prohibition relating to implied choice of law. It is hardly in the interests of the adult for the continuing power of attorney to be automatically displaced. A solution that respects the adult’s personal wishes should be sought. Both examples – direct recognition and choice-of-law clauses – show that in certain individual cases there may be a need to bend the rules laid down in, for instance, the Adult Protection Convention, in order to serve the interests of the vulnerable adult and respect his or her fundamental and human rights. It may be argued that in some cases the material needs and interests of a vulnerable adult, together with his or her right to have his or her wishes respected and to receive equal treatment, override the general approaches of private international law. It is also a question of subjective legal certainty, which involves respecting an individual’s legitimate expectations.54 Furthermore, using private international law tools as far as possible in order to accommodate needs that originate in the sphere of substantive law is an important aspect of ensuring that the credibility of private international law is maintained rather than being circumvented entirely in favour of substantive law. However, it is worth noting that cases also arise in which it may prove impossible to reconcile differences between substantive norms using the tools of private international law. D.

Representation in Health Care Matters and Advance Directives in a Cross-Border Context

In relation to cross-border adult protection, the most problematic examples concerning the reconciliation of private international law with the requirements laid down in human rights law and the substantive laws of different jurisdictions may well be those connected with the needs of decision-making in medical and health care matters and in relation to advance directives. The morally and culturally embedded nature of medical treatment and health care makes one question whether it is realistic even to place this issue in the sphere of private international law. In the context of health care matters, it is worth taking account of two separate but overlapping issues: the representation of a vulnerable adult in health care matters, and provisions on the refusal of treatment and on statements or wishes concerning care and treatment.

54

See T. KRUGER, (note 18), pp. 298-302.

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Katja Karjalainen The representation of vulnerable adults in health care matters is covered by the Adult Protection Convention. First, protective measures applied by a Contracting State are not necessarily limited to representation in financial matters, but often include so-called personal matters such as, inter alia, representation in respect of medical treatment and health care. Second, an adult can use an advance directive to appoint a representative to make decisions on his or her behalf. This advance directive may constitute part of a continuing power of attorney, but need not necessarily do so. Both these issues undoubtedly fall within the scope of the Adult Protection Convention.55 Advance decisions to refuse medical treatment or advance statements or wishes as to the use of a particular medical treatment are not covered by the Adult Protection Convention. However, they may fall within the scope of the Convention if they are included in a mandate given by the adult him – or herself. The legal literature is not unanimous as to the extent to which advance directives are covered by the Convention. For instance, Coleman et al. consider that, owing to differences in substantive laws, the Convention is ambiguous in relation to the matter.56 Ruck Keene argues that advance directives do not fall within the scope of the Convention with regard to the refusal of treatment, and statements and wishes given in advance.57 On the other hand, Fagan and Hill argue that advance directives are entirely covered by the Convention despite the fact that medical issues are excluded from its scope.58 In addition, Currey-Sumner, in the European Parliament study on international protection of adults, seems to share this opinion.59 In Spain, the tutor’s competency covers decision-making in health care matters. The Spanish Patients’ Rights Law60 sets out requirements for health care decision-making on the basis of the patient’s competence. If the patient is incapacitated, his or her legal representative grants consent in health care matters (Article 9(3)).61 The tutor is competent to give consent to the termination or withdrawal of medical treatment, nutrition or other life support for incapacitated persons.62 The P. LAGARDE (note 4), paras 40-42. N. COLEMAN et al. (note 23), pp. 75-76. 57 A. RUCK KEENE, (note 9), pp. 166-167. 58 D. HILL, The Hague Convention on the International Protection of Adults, 58 I.C.L.Q 2009, pp. 473-475; A. FAGAN, Analysis on the Convention on International Protection of Adults, 10 2 Elder L. J. 2002, pp. 342-343. 59 I. CURRY-SUMNER, Vulnerable Adults in Europe. European added value of an EU legal instrument on the protection of vulnerable adults, Annex I to: European Parliament, Protection of Vulnerable Adults European Added Value Assessment, Study PE 581.388, 2016, p. 58. 60 Ley 41/2002, de 14 de noviembre, básica reguladora de la autonomía del paciente y de derechos y obligaciones en materia de información y documentación clínica. BOE núm. 274, de 15 de noviembre de 2002. 61 If the patient’s competency is not limited, but he or she is unable to make decisions in matters related to his or health, consent must be given by a relative or other next of kin. 62 Committee on the Rights of Persons with Disabilities criticises Spain for this reason. CRPD/C/ESP/ CO/1, para 29. 55 56

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Fragility of Cross-Border Adult Protection competence of a tutor in health care matters is thus comprehensive. The advance directive is a binding document which can be given before a notary or, otherwise, should be witnessed. A person who has been declared incompetent cannot revoke an advance directive that he or she gave when still competent.63 Again, the Finnish perspective differs dramatically. The Guardianship Services Act provides that the guardian may have competence to represent his or her principal in matters pertaining to his or her person if the principal cannot understand the significance of the matter (Section 29(2)). The principal always decides on his or her personal matters him- or herself if he or she is, in fact, capable of understanding the matter at the point when the decision is made. Thus, in respect of personal matters the competence of the guardian is always secondary. It is irrelevant that the decision-making competency of the vulnerable adult may be limited in one way or another.64 Furthermore, the Patient Act (Laki potilaan asemasta ja oikeuksista 17.8.1992/785) provides that the patient must be cared for in mutual understanding with him or her. If an adult patient cannot decide on the treatment he or she is to be given, the legal representative or a family member or other next of kin of the patient must be heard before an important decision concerning treatment is made. The general principle is that only in exceptional circumstances should the legal representative, if not a family member, make decisions on health care matters, because he or she cannot be aware of the adult’s beliefs or previous wishes concerning his or her treatment.65 There are no requirements on the form of an advance directive or the manner in which one should be revoked. As noted above, a Spanish guardianship decision will be directly recognized in Finland. A tutor appointed in Spain is likely also to have competence to represent the vulnerable adult in personal matters, for instance in relation to medical and health care matters. In accordance with the law applicable to the protective measure – Spanish law – the tutor is the person who should give consent in respect of medical and health care matters. However, the law of the country in which the decision is made – Finnish law – provides that consent must be given by the adult him- or herself if he or she is in fact capable of giving consent at the time the decision is made. Despite the fact that the Finnish Guardianship Services Act, reflecting the Adult Protection Convention, provides for direct recognition of the Spanish Guardianship decision, it seems highly unlikely that the provisions of the Guardianship Services Act and the Patient Act concerning decision-making in personal matters 63 In such cases, it is possible that the tutor may seek to revoke the advance directive with the prior approval of the public prosecutor and the approval of the relevant guardianship court. See the report on Healthcare and decision-making in dementia, in Dementia in Europe Yearbook 2009, pp. 186-188. 64 Hallituksen esitys Eduskunnalle holhouslainsäädännön uudistamiseksi, HE 146/1998, p. 29. The Act on Continuing Powers of Attorney includes a similar provision concerning personal matters. An adult decides by himself or herself if he or she understands the personal matter at the time the decision is made (section 2(1)). M. HELIN, Edunvalvojan päätösvallan rajoista, 6-7 Lakimies 2001, p. 1084–5. 65 I. PAHLMAN, Potilaan itsemääräämisoikeus, Edita 2003, p. 220. M. HELIN ibid, p. 1086.

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Katja Karjalainen and the right to have the patient’s wishes respected in medical and health care matters would be entirely disregarded in a health care decision made in Finland concerning an adult who was declared incompetent in Spain. If at the time the relevant decision is made the adult in question has sufficient capacity to decide, he or she will clearly make that decision him- or herself. It is also obvious that an adult whose competency is limited has the right to renounce an advance directive even if this would not be possible under the law applied to it. Similar assumptions regarding internationally mandatory norms and public policy can be made in relation to representation in personal matters and provisions of advance directives as can be made in relation to limiting a vulnerable adult’s competency.66 Nevertheless, the context of health care representation and advance directives is different, because this framework also requires consideration of national medical norms and professional practices that determine, for example, the point at which a newborn child is deemed to have legal status in its own right or the conditions under which an abortion can be carried out.67 The problems related to advance directives and provisions on refusal of treatment are reflected in what BALLARINO writes on euthanasia68. While euthanasia is, owing to the outcome involved, a very different issue in factual terms, it entails similar decision-making on health care matters, and the process followed and weight attached to the patient’s wishes and statements are equally firmly embedded issues both ethically and culturally. BALLARINO’s view is that euthanasia should be dealt with outside the realm of conflict of laws, given that the laws of the majority of States are radically opposed to euthanasia and only a few States allow it. While certain States allow euthanasia, they do not control “the bureaucracy of death” in other countries. Although the means of determining which national law applies in respect of a request for euthanasia could be placed in the private international law sphere, the medical and administrative “bureaucracy of death” is inevitably governed by the national medical norms and professional practices of the State where euthanasia takes place. Similarly, it may be argued that whether representation in health care matters and advance directives have any cross-border effect depends upon the national laws and health care practices of the State in which they are used.69 One may therefore ask whether it is even reasonable to handle representation in health care matters and advance directives in the private international law sphere. Although in theory such representation could be governed in the choice-oflaw context, would it not perhaps be more rational for the entire subject to be handled within the sphere of substantive law rather than artificially using choiceof-law rules and tools of private international law to limit the effects of foreign law?70 This is a difficult question to answer. D. HILL (note 58), pp. 474-475. See B. UBERTAZZI, La capacità delle persone fisiche nel diritto internazionale private, Padova, 2006, pp. 151-156. 68 T. BALLARINO, Is a Conflict Rule for Living Wills and Euthanasia Needed?, this Yearbook, 2006, pp. 13-14. 69 See A. RUCK KEENE (note 9), p. 168. 70 For instance, C. GONZALEZ BEILFUSS, La protección de adultos en derecho international privado, in A-L. CALVO CARAVACA/ J. IRIARTE ANGEL (eds), Estatuto personal 66 67

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Fragility of Cross-Border Adult Protection It must be admitted that the private international law norms regarding representation in health care matters and advance directives may be useful in some specific cases. Thus, despite the uncertainties involved, the use of such norms to this effect can justifiably be viewed as falling within the scope of private international law. The findings of Curry-Sumner presented in the European Added Value Assessment Study illustrates the matter. The study argues that the non-recognition of powers of representation in respect of health care matters, such as the ability to sign discharge documents or make the decision to switch off life support, is both emotionally damaging and financially burdensome for the parties concerned. In addition, uncertainty as to the legal position in terms of lack of clarity as to who has decision-making power may lead to medical care costs being unnecessarily incurred.71 Furthermore, as HILL opines in relation to advance directives and the provisions of the Adult Protection Convention, the norms are likely to fulfil their function in most cases. Problems generally occur only in relation to rare and final decisions such as refusal of treatment. Thus it can be assumed that it is only relatively seldom and in the most extreme cases that adults’ wishes cannot be reconciled with the norms of the receiving countries.72 Nevertheless, one may ask why private international law should play a role at all in relation to advance directives. Why are they not dealt with directly under substantive law? In theory, human rights create a universal basis for the right to autonomy and dignity in medical and health care matters.73 In Pretty v. United Kingdom,74 the European Court of Human Rights confirmed the applicant’s personal autonomy and right to have his or her wishes respected under Article 8(1) of the European Convention on Human Rights). However, the right is limited by the margin of appreciation of the State involved (Article 8(2)).75 Thus, no matter where the advance directive was originally given in a particular case, an adult has the right to have his or her wishes respected in a manner compatible with the strictures of the receiving State’s legal system. It should be recognized that the realization of vulnerable adults’ right to self-determination must be reconciled with the national substantive norms of the receiving country in respect of representation and decision-making in medical and health care matters. This balance between the y multiculturidad de la familia, Colex 2000, p. 98 argues that owing to the delicate nature of the issue, it may have been too early to create choice-of-law rules on representation in health care matters. 71 I. CURRY-SUMNER (note 59), p. 72. 72 D. HILL (note 58), p. 475. 73 See, for instance, Article 8(1) of the European Convention on Human Rights (ECHR), Article 25 of the UNCRPD , Articles 6 and 9 of the Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the Application of Biology and Medicine (Oviedo Convention). A. DI STASI/ R. PALLADINO, Advance Health Care Directives Under European Law and European Biolaw, in S. NEGRI et al. (eds), Advance Care Decision Making in Germany and Italy, Springer 2013, p. 39, and A. MÄKIPETÄJÄ-LEINONEN, Ikääntymisen ennakointi: vanhuuteen varautumisen keinot, Talentum 2013, pp. 134-135. 74 ECHR, 29 April 2002, Pretty v United Kingdom, App. No 2346/02. 75 ECHR, Pretty v United Kingdom, (note 74), paras. 66– 67.

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Katja Karjalainen adult’s wishes and statements and the substantive law of the given State should be sought, and probably is in practice sought, even in the absence of relevant norms of private international law. Roughly speaking, the result appears to be more or less the same as that offered by the private international law framework, which makes private international law look like a mere bureaucratic step on the path back to the sphere of substantive law.

IV. The Twofold Impact of Substantive Values and the Need for Comparative Knowledge Comparative analysis of substantive guardianship provisions shows that substantive values have two different consequences in relation to the framework of private international law. On the one hand, they can benefit from the controlled approach that policy-oriented private international law provides, and on the other hand their consequences go beyond policy orientation. It is obvious that substantive law forces private international law to give up some of the neutrality and efficiency the straightforward, objective traditional framework of private international law seeks.76 The policy orientation of private international law norm-drafting and decision-making means that the principle of safeguarding the interests of a vulnerable adult disallows the use of blanket rules in cross-border adult protection situations. It cannot be argued that the guardian of a vulnerable adult living in Finland must always be appointed in Finland. There might be exceptional reasons, such as the location of the adult’s property or his or her current whereabouts, that mean that the adult’s interests are better served by deviating from the main rule and appointing the guardian in some other State. The special circumstances of each individual case must be taken into consideration. It is necessary to evaluate which solution leads to the result that most effectively promotes the interests of the adult and his or her fundamental rights. The emphasis on the interests of vulnerable adults can be seen in the Adult Protection Convention and its individual provisions. This focus makes deviation from the main principles applicable in respect of the cross-border protection of adults possible when this is in the interest of a vulnerable adult in any given case. The policy-oriented, one might even say vague, principles such as safeguarding the interests of vulnerable adults are open to wide-ranging legal argumentation and interpretation that leads to insecurity in all the traditional aspects of private international law – jurisdiction, applicable law, recognition and enforcement. They may have a negative impact on efficiency, which is naturally crucial when, for example, a vulnerable person is in need of protection. At worst, they prolong decision-making processes and make them more expensive.77 The policy 76 E.g. W. GOLDSCHMIDT, Sistema y Filosofia del Derecho Internacional Privado 12, Barcelona, 1948, pp. 29-32. G. KEGEL, (note 1), pp. 103-107, 177-178. 77 In addition to the interplay with the sphere of substantive law, time and money is the other Achilles heel of private international family law. The question may be asked whether it is capable at all of tackling fields such as adult protection, given that the need for protection is probably urgent, and an adult may lack financial resources. Even the national guardianship processes are relatively slow and costly. This problem can escalate when the

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Fragility of Cross-Border Adult Protection orientation may lessen objective legal certainty and predictability, which are traditional goals of private international law, but endows its stiff framework with a much-needed flexibility that allows justice to be done in individual cases.78 Furthermore, the problems it causes in relation to efficiency are not that farreaching. This is well illustrated by the Adult Protection Convention, regarding which it may be argued that the principle of safeguarding the interests of the adult is used in a controlled manner and utilised to bridge the gap between the spheres of substantive and private international law. Nevertheless, the interplay of private international law and substantive law can also be less well controlled. Direct recognition utilised in the Adult Protection Convention serves as an example of an efficient private international law approach.79 However, given the differences between substantive guardianship laws, it is clear that the general approach is dogged by certain problems. The placing of limitations on an adult’s competency is a delicate matter towards which different legal traditions take very different approaches, as a comparison between the Finnish and Spanish guardianship laws shows. Direct recognition can lead to unequal treatment of vulnerable adults depending on whether the protective measure was taken by domestic or foreign authorities. The foreign protective measure may not fulfil the requirements of necessity and proportionality. Also, understandably, in order to avoid uncertainty in the law applicable to the powers given with private mandate, implied choice-of-law clauses are prohibited under the Adult Protection Convention. However, the complete prohibition of implied choice-of-law clauses is problematic because some States do not acknowledge continuing powers of attorney. This fact is perhaps insufficiently taken into account in the drafting of individual powers of attorney. The principle of safeguarding the interests of a vulnerable adult are closely connected with fundamental and human rights. The core of the principle lies in the adult’s right to have his or her personal autonomy and wishes respected. The interpretation of the Adult Protection Convention in accordance with the UNCRPD requires best interpretation of will and preferences and equal recognition before the law. The States Parties must ensure that instruments of protection are not based on the removal of legal capacity. In this context, it could be argued that it might be necessary to adapt a foreign protective measure in order to be able to fulfil both the practical needs of protection and the requirements of fundamental and human rights. Also, it is in the interests of the vulnerable adult for his or her personal wishes expressed in advance to be respected as broadly as possible, which might require the acceptance of implied choice-of-law clauses. issue under consideration acquires a cross-border dimension. It could be argued that private international law adult protection mostly functions effectively only when a person is affluent and the case is not that urgent. See generally, B. SILLERO CROVETTO, Respuesta del derecho civil Español a la protección de las personas mayores vulnerables, in M. ECHEZARRETA FERRER (ed.) El lugar europeo de retiro. Indicadores de excelencia para administrar la gerontoinmigración de ciudadanos de la Unión Europea en municipios españoles, Editorial Comares 2005, p. 265. 78 E.g. T. KRUGER, (note 18), pp. 313-314. 79 E.g. A.V.M. STRUYCKEN, Co-ordination and Co-operation in Respectful Disagreement, Recueil des Cours 2004, p. 523.

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Katja Karjalainen The problems concerning direct recognition and choice-of-law clauses could be resolved to a degree by using tools offered by private international law. Nevertheless, cross-border adult protection involves issues that are, in view of their morally and culturally delicate nature, so imbued with the substantive values of the forum State that it is highly questionable whether it is reasonable to handle them at all in the private international law sphere. Representation in health care matters and advance directives serve as an example of this issue. The use of advance directives in cross-border situations is particularly questionable, both in view of the receiving State’s public policy and mandatory legal provisions and in view of the requirement to follow the medical norms and professional practices of that State. Decision-making in respect of medical and health care matters is inevitably carried out in compliance with the medical and administrative norms and practices of the State in question, even though advance directives fall wholly or partially within the scope of the protection of adults under private international law. Although it could be argued that in theory the question is about the traditional effects of either internationally mandatory norms or public policy, the impacts of substantive values are so far-reaching that the whole rationale of private international law can be called into question.80 It seems that substantive values can lead to situations in which private international law is unable wholly to fulfil its function and to provide objective legal certainty and predictability in cross-border cases. The framework of private international law is disrupted, because substantive values become the primary consideration. As distinct from policy-oriented private international law, it is then no longer a question of balancing the legal certainty provided by private international law against the flexibility required by substantive values and interests. The difficulties faced by private international law in respect of issues of fundamental and human rights is well demonstrated, for instance, by the case of McB handled by the European Court of Justice.81 In the case, the mother had taken the children from the United Kingdom to Ireland without the consent of the father. The unmarried father did not have custody rights in accordance with the Irish law meaning that the mother´s action was not wrongful under the Brussels IIbis and the Hague Child Abduction Convention82. The case shows the tension between the fundamental rights and freedoms provided for by the EU Charter of Fundamental Rights (Article 7 on Respect for Private and Family Life and Article 24 on the Rights of the Child) and private international law in terms of the legal certainty private international law norms seek.83 In the given case, the tension was eventually relieved as the ECJ came to the conclusion that national law sufficiently 80 In this context, T. KRUGER (note 18), pp. 433-434, interestingly suggests that it may be time to give up the old public policy construction and replace it with a fundamental and human rights test, on the basis that this would probably offer stronger grounds than the public policy exception with all its national variations. This despite the fact that human rights can also be interpreted differently. 81 ECJ, 5 October 2010 , J. McB. v L. E., ECLI:EU:C:2010:582. 82 Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction. 83 T. KRUGER (note 18), pp. 311-312.

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Fragility of Cross-Border Adult Protection fulfilled the Charter rights even though unmarried father does not automatically possess rights of custody.84 Furthermore, the infamous cases of Neulinger85 and Latvia v X86 highlight how difficult it is to reconcile the neutrality and efficiency required under traditional private international law framework and the principles laid down in the ECHR, in particular Article 8 on the Right to Privacy and Family Life. In the Neulinger European Court of Human Rights decided that returning a child requires in-depth examination of the factors influencing the best interests of the child.87 In the Latvia v. X the Court mitigated its position, but still stated that the effective examinations of the exceptions to return should be conducted.88 The views are problematic noting the need of efficiency required by the prompt return of the child back to his or her country of habitual residence under the Child Abduction Convention.89 It is clear that balancing conflicting interests of substantive values and private international law calls for the underlying character, principles and legal sources of private international law to be understood and respected in order to prevent such disruptive results as occurred, for example, in Neulinger.90 Nevertheless, it must be acknowledged that cases involving, for example, the representation of vulnerable adults in medical and health care matters may simply exhaust the resources of private international law. One of the key effects of both phenomena – that is, on the one hand, the controlled use of principles such as the best interests of the child and the interests of a vulnerable adult based on human and fundamental rights and, on the other, the disruptive force of substantive values – is that they emphasize the relationship between private international law decision-making and the method of comparative law. The weighing of different interests and values against each other in a particular case cannot be carried out without knowledge of the substantive law and values of the jurisdictions involved.91 Furthermore, the use of comparative law methods in fields such as cross-border adult protection shines a light on hitherto unseen defects of private international law by laying bare the disruption of private international law caused by differences between substantive laws and their fundamental principles, interests and approaches. Without comparative knowledge, it would be possible neither to be aware of nor to tackle these problems. The conclusion and its justifications are open to criticism. E.g. P. JIMÉNEZ BLANCO, Unmarried Fathers and Child Abduction in European Union Law. 1 Journal of Private International Law, 2012, pp. 139-141. 85 ECHR, 6 July 2010, Neulinger and Shuruk v Switzerland, App. No 41615/07. 86 ECHR, 26 November 2013, Latvia v X, App. No 27853/09. 87 ECHR, Neulinger (note 85), paras. 138-139. 88 ECHR, Latvia (note 86), paras. 105-109. 89 E.g. P. BEAUMONT et al., Child Abduction: Recent Jurisprudence of the European Court of Human Rights. I.C.L.Q. 2015, pp. 43-48. 90 M. HELIN, Perusoikeuksilla argumentoinnin ongelmallisuus, in I. TERE (ed), Juhlajulkaisu Jarmo Tuomisto 1952 – 9/6 – 2012, Turun yliopisto 2012, pp. 17-24. 91 U. LIUKKUNEN, The method of understanding and an internal viewpoint: on the interface between comparative law and private international law, RabelsZ 2007, pp. 141157. 84

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Katja Karjalainen It lies outside the scope of this article to consider what constitutes a sufficient level of comparative knowledge in individual cases or how to acquire that knowledge. It is not always possible, nor necessary to carry out a full comparison of the substantive laws of the States involved in any given case. However, some basic knowledge of the general principles applied in the law of the other State involved in a matter may be necessary, especially in relation to issues at the heart of autonomy and the right to have personal wishes respected, limitations of competency and the equal treatment of vulnerable adults. Private international law should always be viewed through the lens of comparative law in order to fully understand and respect its prescriptions.92 A judge’s inability to conduct a full comparative analysis should not mean that he or she refrains from comparison altogether. The requirements of practice are not as high as the requirements of theory.93 Significantly, the thriving principles of adult protection – necessity and proportionality of protection – cannot be disregarded, even in the name of the proper functioning of the framework of private international law and cross-border efficiency. It is essential to find the necessary balance between the needs of efficiency and respect for the fundamental rights of a vulnerable individual.

V.

Conclusion

The basic task of private international law sounds in theory relatively simple. Rules that apply in a particular case simply, refer to the law applicable in a given situation or guide the case to the competent jurisdiction. Nevertheless, in practice it is questionable whether, in certain cases, private international law is in fact able to offer the required bridge between the legal systems involved. Cross-border protection of vulnerable adults is without doubt one of the areas in which such problems emerge. All the examples given in this article ultimately illustrate, in their own way, the same issue. The cross-border protection of adults is greatly influenced by factors that diminish the efficiency of private international law. The application of private international law norms requires familiarity with, and understanding of, the relevant substantive norms and the values and principles on which they are based. Thus, the use of comparative knowledge is crucial in order to understand the complexity of cross-border adult protection situations. Despite their limits, private international law rules on the cross-border protection of adults have a positive influence on the efficiency of protection: they offer some legal certainty and predictability and they contain provisions that allow cross-border cases to be directed to the correct jurisdiction for resolution. They E.g. D. FERNANDEZ ARROYO, Private International Law and Comparative Law: A Relationship Challenged by International and Supranational Law, this Yearbook, 2009, pp. 62-66. 93 See R. MICHAELS Comparative Law and Private International Law in J. BASEDOW et al. (eds), Encyclopedia of Private International Law, Edward Elgar Publishing 2017, p. 424. 92

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Fragility of Cross-Border Adult Protection thus contribute to protecting the interests of vulnerable adults and the rights enshrined, for example, in the UNCRPD.

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IPSO FACTO CLAUSES IN INTERNATIONAL CONTRACTS Patrick KEINERT*

I.

II.

III.

Introduction A. Contractual Remedies in Insolvency B. Implications for International Insolvency Cases 1. The Law Applicable to Restrictions on ipso facto Clauses 2. Coordination of Parallel Proceedings with Executory Contracts Comparison of Substantive National Laws A. International Trend towards the Prohibition of ipso facto Clauses B. Rationale behind the Prohibition of ipso facto Clauses C. Systematic Overview 1. Restrictive Approach to ipso facto Clauses 2. Selective Approach to ipso facto Clauses 3. Range of Prohibitions a) Application Range b) Legal Consequences 4. Exceptions D. Intermediary Conclusions Private International Insolvency Law A. Concepts of International Insolvency Law B. Recent Case Law C. Applicable Law under the EU-Insolvency Regulation 1. Preliminary Remarks 2. Classification of ipso facto Clauses 3. Practical Application a) Case 1: lex fori concursus Prohibits Insolvency-Related ipso facto Clauses (i) Termination Clauses: Link to the Opening of Insolvency Proceedings (ii) Termination Clauses: Pre-Insolvency Links (iii) Termination Clauses: Fate after the End of the Proceedings b) Case 2: lex contractus prohibits Insolvency-Related Termination Clauses 4. Intermediary Conclusion

* Rechtsanwalt in Heidelberg/Neckargemünd (Germany); PhD at the University of Geneva in comparative insolvency law. This article is based upon the author’s thesis Vertragsbeendigung in der Insolvenz, Tübingen (Mohr Siebeck) 2018.

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Printed in Germany

Patrick Keinert D.

IV.

Coordination of Parallel Insolvency Proceedings 1. Requirements for Secondary Insolvency Proceedings 2. Assignment of the Contract to a Specific Insolvency Procedure 3. Assessment a) Point of Departure under EIR b) Problematic Factual Situations c) Criticism on the Relation to Establishment d) Criticism on the External Multiple Responsibility of Administrators e) Solution: Internal Multiple Responsibility of Administrators f) Temporal Delimitation of the Procedures Conclusion

I.

Introduction “Making ipso facto clauses unenforceable during a company restructure will ensure that the objectives of the existing voluntary administration regime […] work more effectively by assisting viable but financially distressed companies to continue to operate while they restructure their business.” 1

A.

Contractual Remedies in Insolvency

In insolvency proceedings, the administrator usually has the right to assume or reject executory – unfulfilled – contracts. He may choose to adopt them, resulting in privileged obligations; or he may decline performance under the contract, in which case the obligations are fulfilled solely as pro rata claims.2 Nevertheless, contractual parties are often reluctant to await the administrator’s decision and instead agree on contractual remedies like “ipso facto clauses” (hereafter also “termination clauses”). An ipso facto clause is a contractual provision that allows one party to terminate or modify the contract in the event of insolvency.3 Termination may occur upon notice of one party or automatically. In practice, insolvency-related contractual termination clauses are widespread worldwide and The Parliament of the Commonwealth of Australia, Treasury Laws Amendment (2017 Enterprise Incentives No. 2 Bill) Bill No. X, 2017, Explanatory Memorandum, p. 20. 2 For instance, Germany: § 103 para. 1 InsO; Switzerland: Art. 211 para. 2 SchKG; Austria: § 21 IO; France: Artt. L. 622-13, II, 641-11-1, II Code du commerce; USA: 11 U.S.C. § 365 (a); England: Sect. 178 (3)(a) IA 1986. 3 E.g.: “This Agreement shall terminate, without notice, (i) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of either party’s debts, (ii) upon either party making an assignment for the benefit of creditors, or (iii) upon either party’s dissolution or ceasing to do business.” 1

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Ipso facto Clauses in International Contracts occur in a wide variety of legal areas from construction contracts to financial transactions and rental agreements.4 Since continued contractual performance is an important consideration in insolvency proceedings, especially with regard to essential supplies, ipso facto clauses therein reveal a fundamental tension between contractual freedom and the restructuring efforts of the insolvency administrator. As, however, the basic principle of contractual freedom collides with mandatory insolvency law norms, the topic has developed into one of the most discussed problems of insolvency law in all its ramifications.5 A bundle of different approaches to treat these clauses exist among the substantive law of different legal orders. In the past, contractual freedom prevailed. Today, more and more legislators are interfering to restrict ipso facto clauses (as discussed below, Section II). B.

Implications for International Insolvency Cases

Since the national treatment of ipso facto clauses is already controversial and undergoing change, the legal situation becomes much more complicated if, in addition, the law applicable to contracts and the law applicable to procedural insolvency should diverge with respect to a particular contract. The distinction between the law of contracts and insolvency law is particularly interesting because the applicable law will generally permit a choice of law in contractual matters. Therefore, insolvency-related termination clauses exemplify a particular need for coordination in private international law. 1.

The Law Applicable to Restrictions on ipso facto Clauses

Contractual termination clauses and legislative restrictions on these clauses have to be qualified to determine the applicable law. The question is whether prohibitions on termination rights are to be classified as a general encroachment on a contract, and thus pertaining to the law of contracts (lex contractus), or whether the prohibitions functionally pursue an objective under insolvency law and thus fall under Cf. R. SUCHAK, International Corporate Rescue (LJI) 2011, p. 131 et seq., at 132; C. HOENIG, RdW 2013, p. 515 et seq.; concerning financial contracts, J.-L. BISMUTH/ D. CARREAU, in: CHAMBER OF COMMERCE (ed.), Exchange Rate Risk in International Contracts, Survey and Synthesis, p. 57 et seq. 5 See for Germany: S. MATTHIES, jurisPR-PrivBauR 7/2012, note 3; R. KLIEBISCH/ M. LINSENBARTH, DZWIR 2013, p. 449; M. HUBER, NZBau 2005, p. 177, at 181 (“Die Meinungen dazu sind sehr gespalten, das Schrifttum kaum noch überschaubar”); W. GERHARDT, AcP 2000, p. 426, at 439 (“jeder Insolvenzrechtler hat sich irgendwie zu diesem Problem geäußert”); J. GRASSER, Unwirksamkeit vertraglicher Lösungsklauseln für den Insolvenzfall (2017), p. 2 (“insolvenzrechtlicher Klassiker”); cf. J. POHLE, K&R 2013, p. 297, at 298; from an Austrian perspective, W. FICHTINGER/ S. FOGLAR-DEINHARDSTEIN, ÖBA 2010, p. 818, at 820 (“höchst umstritten und nur noch schwer zu überschauen”). In regards to the administrator’s right to assume or reject the contract, D. HAHN, 13 U. Pa. J. Bus. L. 723 (2011), at 724; Y.-K. CHE/ A. SCHWARTZ, J.L. Econ. & Org. 441 (1999), at 442 et seq., in respect to 11 U.S.C. § 365. 4

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Patrick Keinert insolvency law (lex fori concursus). This inquiry holds importance e.g. when insolvency law prohibits the termination of the contract, but contract law permits it. The situation becomes even more complex when taking into account that the insolvency norms of most jurisdictions require insolvency proceedings to already be open. Does the fact that insolvency law is applicable at a later stage retroactively lead to the invalidity of an insolvency termination clause made prepetition, e.g. a clause providing that termination can be made in the case of insolvency proceedings being brought or in the case of financial distress prior to insolvency proceedings? It is also important to recognise that legal systems restrict termination clauses with different legal consequences: for example, France provides for ex tunc nullity, whereas in the USA there are restrictions on the exercise of such right, and in Austria both legal consequences are provided for. 2.

Coordination of Parallel Proceedings with Executory Contracts

In which legal system are international treaties “situated”?6 This is an important preliminary question, since it determines the applicable administrator’s right to assume or reject an executory contract where multiple parallel insolvency proceedings are ongoing. This assignment is also relevant for the determination of the applicable law governing the effects of insolvency law on executory contracts. It must also be assessed to what extent several insolvency proceedings (e.g. domestic primary proceedings with foreign secondary proceedings and vice versa) can be coordinated with regard to pending contractual relationships and what effects different insolvency laws have on a uniform contractual relationship. This article deals with contractual ipso facto clauses in cross-border insolvency cases. To this effect, the article will first present the recent development of legislation under different substantive national laws (II) and then highlight the treatment of applicable insolvency law and the coordination of parallel proceedings under private international law (III).

II.

Comparison of Substantive National Laws

Decades ago, termination clauses were effective in almost all legal systems.7 They were an expression of private autonomy and consequently protected. Termination rights developed into a uniform contractual standard and were approved by insolvency law. This trend has reversed (A) on the basis of several convincing grounds (B). In this respect, the various national legislators have developed a bundle of different approaches (C).

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M. VEDER, IILR 2011, p. 285, at 296. T. TRETTNAK/ F. HÖFER, ZIK 2010, p. 204, at 206.

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Ipso facto Clauses in International Contracts A.

International Trend towards the Prohibition of ipso facto Clauses

A predominant tendency in modern legislation to restrict insolvency-related ipso facto clauses may be evidenced by the prohibitions being implemented in more and more legal systems:8 Singapore (2018),9 Australia (2017),10 Poland (2016/2003),11 England and Wales (2015),12 Greece (2015),13 Romania (2014),14 Germany (2012),15 Austria (2010),16 Canada (2009),17 Italy (2006),18 Spain (2004),19 France (1985/

For detailed information on substantive law, see P. KEINERT, Vertragsbeendigung in der Insolvenz (2018), passim. 9 Singapore introduced an “omnibus bill” to parliament in September 2018 to restrict ipso facto clauses under sect. 440. The legislator explicitly referred to sect. 34 of the Canadian Companies’ Creditor Arrangement Act 1985, Bill No. 32/2018, p. 636. 10 Cf. sect. 415D et seq., sect. 434J et seq., sect. 451E et seq. Corporations Act 2001 (2017): termination clauses referring to the financial condition or the commencement of a reorganisation procedure are unenforceable in such a reorganisation procedure. 11 Ipso facto clauses permitting termination of an ongoing contract in case of petition or the opening of an insolvency procedure are void: Art. 83 Polish Insolvency Act. 12 Insolvency-related terms of a contract for the supply of essential goods or services cease to have effect in reorganisation procedures (administration, voluntary arrangement): sect. 233A Insolvency Act. 13 The termination of a contract due to the opening of an insolvency procedure is void, cf. the abrogation of Art. 32 para. 2 of the Greek Insolvency Act previously expressly permitting such a termination: Law 3588/2007, 10.7.2007 (ΝΟΜΟΣ 3588/2007 – ΦΕΚ 153/Α/10.7.2007, Πτωχευτικός Κώδικας modified by Law 4336/2015, 14.8.2015 (ΝΟΜΟΣ 4336/2015 – ΦΕΚ Α 94/14.8.2015). 14 Art. 123 para. 1 sent. 2 Romanian Insolvency Act (Law 85/2014) declares contractual clauses for void which permit the termination of an executory contract after the commencement of an insolvency procedure. 15 The legal positions are disputed. Sect. 119 German Insolvency Code prohibits the circumvention of the administrator’s right to assume or reject the contract. The Federal Supreme Court has declared ipso facto clauses referring to the petition of an insolvency procedure in energy supply contracts as void: BGH, 15.11.2012, IX ZR 169/11. By contrast, another bench of the Federal Supreme Court declared such ipso facto clauses as valid in construction contracts: BGH, 7.4.2016, VII ZR 56/15. 16 Ipso facto clauses referring to the opening of insolvency procedures are void, sect. 25b para. 2 Austrian Insolvency Code. Additionally, termination for reasons of the debtor’s financial condition or pre-petition default is blocked for six months if such a termination endangers the restructuring, sect. 25a para. 1 Austrian Insolvency Code. 17 Termination clauses are partially restricted in some reorganisation procedures according to Art. 34 para. 1 Companies’ Creditors Arrangement Act and in insolvency procedures for natural persons according to sect. 65.1 para. 1 Bankruptcy and Insolvency Act. 18 Contractual clauses defining the opening of an insolvency procedure as a reason to terminate the contract are void: Art. 72 para. 6 Italian Bankruptcy Law. 19 Termination rights in the event of the declaration opening insolvency proceedings are void: Art. 61 para. 3 Spanish Bankruptcy Law. 8

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Patrick Keinert 1975,)20 USA (1978),21 New Zealand (1967).22 As a result, more and more legislators are placing the reorganisation objectives of insolvency law above contractual freedom. The interest in corporate restructuring can be traced back to the birth of insolvency laws.23 In recent years, the efficiency of restructuring proceedings has once again gained stronger significance. It is in this context that the European Union presented a new draft directive “on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures”.24 According to the proposed Art. 7 para. 5, the Member States shall ensure that a creditor may not terminate or modify executory contracts in reorganisation procedures, in case of “a request for an opening of a preventive restructuring procedure; a request for a stay of individual enforcement actions; the opening of a preventive restructuring procedure; or the granting of a stay of individual enforcement actions as such.” European legislators today see restrictions on insolvency-related termination rights as a central component of a successful restructuring process. International actors also recommend such restrictions: the World Bank carefully proposes to prohibit insolvency-related termination clauses.25 UNCITRAL Recommendation No. 70 expressly states that ipso facto clauses shall be restricted from the moment that an insolvency procedure is brought, arguing that executory contracts may be essential for corporate restructuring.26 At the same rate that reorganisation-friendly insolvency regimes have been reformed, legal prohibitions on termination rights in the event of insolvency have increased. It can be assumed that more and more legal systems will continue to follow this Zeitgeist in the future, especially now that the European Union is adopting a new directive which provides that insolvency law should be easy to restructure. 20 The French Supreme Court declared ipso facto clauses as irreconcilable with the administrator’s right to assume or reject the contract: Cass. com., 17.3.1975, No. 73-12955. Today the prohibition of termination rights is regulated by law in L. 622-13, I Code de commerce. The opening of insolvency procedures may not result in terminating a contract. Such clauses are null and void. 21 With particular regard to 11 U.S.C. § 365 (e)(1), an executory contract may not be terminated or modified at any time after the commencement of an insolvency procedure on the grounds of the insolvency or the financial condition of the debtor, the commencement of the insolvency procedure or the appointment of the administrator. 22 Termination clauses remain valid throughout the insolvency procedure. Notwithstanding this, the administrator may demand the economic value of the contract from the creditor in money (sect. 188 Insolvency Act). 23 For instance, the former German Bankruptcy Code 1855. See U. FALK/ C. KLING, The Regulatory Concept of Compulsory Composition in the German Bankruptcy Act, in A. CORDES/ M. SCHULTE BEERBÜHL (eds.), Dealing with Economic Failure, Between Norm and Practice (15th to 21st Century), Frankfurt am Main (etc.) 2016, at 231. 24 COM (2016) 723 final – 2016/0359 (COD). 25 WORLD BANK, Principles for Effective Creditor Rights and Insolvency Systems, p. 37, No. 119. 26 UNCITRAL, Legislative Guide on Insolvency Law, p. 121 et seq.

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Ipso facto Clauses in International Contracts B.

Rationale behind the Prohibition of ipso facto Clauses

The primary purpose of prohibiting termination rights is to obtain important contracts restructuring vital businesses and allowing for the continuation of the company in insolvency proceedings.27 This is fully in line with the goal of enabling a fresh start and giving a second chance to the debtor.28 The declared goal of restructuring and company rescue requires mechanisms to maintain and protect the debtor’s contracts. At the start of the proceedings, a high level of liquidity is required.29 Therefore prohibiting termination clauses provides for such liquidity since contracts may be maintained and no additional money is needed for renegotiating of new contracts. Since restructuring efforts require the uninterrupted continuation of operations, termination of the contract must necessarily be restricted.30 There is often too little time for fair renegotiations; new contracts may regularly fail to be concluded simply as a result of a lack of liquid funds.31 Empirical evidence shows that creditors use termination rights in insolvency to exert pressure on the administrator and thereby obtain advantages in the conclusion of essential (supply) contracts.32 The success of restructuring depends on restrictions on extensive privileges and preferential rights in the event of insolvency. Considerations on mass protection are only of secondary importance. For this reason, the insolvency administrator’s right to assume or reject a contract should not be influenced by the contractual advantages such decision may hold for

F. ROBERT-TISSOT, IILR 2012, p. 234 et seq., at 247; D. HAHN (note 5), at 731 (“Often the continuation of certain contracts will be the basis for the entire business operation of the debtor”); R. SUCHAK (note 4), at 132 (“they [ipso facto clauses] allow suppliers and customers to walk away at a time when the company is most dependent on their continued custom, thus frustrating the effect of the administration moratorium”); U.S. Senate Report No. 95-989 (1978) (“[Ipso facto clause] frequently hampers rehabilitation efforts”). 28 Concerning the fresh start, see R. VERGA, 61 Fordham L. Rev. 935 (1993), fn. 3; concerning the second chance: EU, COM(2012) 742 final, p. 5 et seq.; 2014/135/EU; COM(2016) 723 final, p. 3. 29 H. HAARMEYER/ W. WUTZKE/ K. FÖRSTER, Handbuch der vorläufigen Insolvenzverwaltung, C.H. Beck, 2010, § 1, N. 11; § 12, N. 1; G. BITTER/ S. RÖDER, ZInsO 2009, p. 1283, at 1286 et seq.; E. HERMES, Wirtschaft Konkret Nr. 414 – Ursachen von Insolvenzen – Gründe für Unternehmensinsolvenzen aus der Sicht von Insolvenzverwaltern, p. 5 and 7; COM(2016) 723 final, recital 16 and 17. 30 D. HAHN (note 5), at 732; also see the empirical study by S. DJANKOV/ O. HART/ C. MCLIESH/ A. SHLEIFER, J. Pol. Econ. 2008, p. 1105 et seq., at 1149. 31 D. HAHN (note 5), at 731. 32 See German Federal Supreme Court, 15.11.2012, IX ZR 169/11, BGHZ 195, 348; cf. “Holding Rescue to Ransom” campaign (2013) by R3 in England; R. SUCHAK (note 4), at 132 (“Ipso facto clauses can, therefore, give suppliers considerable leverage against administrators to get paid ahead of other creditors, thereby disrupting the administration process. Where the supply is essential to the survival of the business, the potential for abuse by suppliers is even greater.”); K. WIDHALM-BUDAK, IRÄG 2010, p. 23 et seq., at 25; A. KONECNY, ZIK 2010, p. 82 et seq., at 84. 27

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Patrick Keinert the benefit of creditors as a whole.33 In any case, the prohibitions in question are not driven by overriding reasons such as violations of mandatory insolvency law or the principle of equal treatment of creditors. Legislators have been led to support a prohibition of ipso facto clauses mainly through the fact that insolvency law has been oriented as a restructuring system, and thus its prohibition goes to the heart of the purpose of insolvency law.34 With respect to the tertiary economic sector of services, the value of contracts may not be underestimated for the vitality of business operations in financially distressed companies.35 The shift towards restructuring has become more important as the tertiary economic sector continues to expand and has fewer “real” assets. The tertiary sector is particularly dependent on knowledge and ideal economic factors. Thus, the assets represented in contracts acquire a special significance for the satisfaction of creditors. Prohibitions to terminate contracts make it possible to use these contractual assets for the insolvency estate. With the administrator’s right to assume or reject a contract, the legislator specifies a binding standard system for the handling of the contractual relationship. In this respect, legislative decisions as e.g. in § 103 German InsO are assigned to the administrator. The legislator himself has therefore created ambiguity in relation to the applicability of each contract at the beginning of the insolvency proceedings.36 The legislator has imposed a waiting period on solvent contracting parties which lasts until the moment that the administrator has exercised his right to assume or reject pending contractual relationships. Even if the solvent contracting party is forced to continue an unprofitable contract, the legislator has fundamentally decided to maintain contractual reciprocity and to give the administrator the option of assuming or rejecting the contract.37 The latter does not decide in favour of a creditor or the debtor, but in the interest of the group of creditors as a whole. The administrator’s right to assume or reject a contract thus provides a solution to economic externalities and coordination problems. This regulatory network must not be undermined by private actors. Termination clauses had the effect of harming the decision-making structures that were sensibly designed to combat scarcity. The legally mandatory character of the administrator’s right to assume or reject a contract ultimately reflects the fact that contractual relationships are to be handled in accordance with insolvency law. Privileges for individual creditors are not compatible with this legal model and efficient restructuring. This underlines the legitimacy of a ban on insolvency-related termination clauses. Termination clauses in particular are an expression of the opposition of a smaller number of creditors against the interests of the legal community of G. WILHELM, RdW 1986, p. 363 et seq., at 364. P. KEINERT (note 8), at 386 et seq. 35 C. PAULUS, KTS 2000, p. 239 et seq., at 247; C. PAULUS, JZ 2009, p. 1148 et seq., at 1152; C. PAULUS, RIW 2013, p. 577 et seq., at 578. 36 OLG Frankfurt, 16.3.2015 – 1 U 38/14, NZI 2015, p. 466; P. MOSSLER, ZIP 2002, p. 1831 et seq, at 1836; F. SCHWÖRER, Lösungsklauseln für den Insolvenzfall (2000), p. 107; F. JACOBY, ZIP 2014, p. 649 et seq., at 654. 37 For the opposite economic conclusion, Y.-K. CHE/ A. SCHWARTZ, J.L. Econ. & Org. 441 (1999), at 442. 33 34

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Ipso facto Clauses in International Contracts insolvency creditors. In the sense of material justice in insolvency proceedings, the interests of the community are to be valued higher. Prohibitions on contractual termination clauses are to be justified if the termination clause has a sufficient relation to insolvency, i.e. if it unfolds its effect in the insolvency proceedings.38 C.

Systematic Overview

There are still jurisdictions which uphold contractual freedom and accept ipso facto clauses, like the majority opinion in Switzerland – in contrast to the international trend.39 Although more and more legislators tend to restrict ipso facto clauses, such legislative approaches diverge fundamentally: 1.

Restrictive Approach to ipso facto Clauses

Legal systems, like France, the USA and Austria have taken restrictive action against termination rights in insolvency. Greece, Poland, Romania, Italy and Spain have also pursued a restrictive approach. In these jurisdictions, ipso facto clauses are basically void or unenforceable. 2.

Selective Approach to ipso facto Clauses

England and Wales has followed a more selective approach. Here, the freedom of contract is generally given priority. Nevertheless, the British legislator has recognised a considerable potential for termination clauses to be abused and provoke insolvency scarcity, which could have the effect of endangering the restructuring. As a result, insolvency-related clauses are only prohibited selectively for some endangered supply contracts and only in reorganisation proceedings. The Australian solution, which also only prohibits termination clauses in reorganisation proceedings, is comparable. However, the approach is not limited to supply contracts. Canada has also opted for a partial ban in some types of proceedings. Following a line of case law concerning energy supply contracts and construction contracts, Germany is deciding the permissibility of such clauses on a case-by-case basis. The clauses are only declared inadmissible in energy supply contracts. According to the case law of the Federal Court of Justice, the right to terminate should be effective in construction contracts. P. KEINERT (note 8), at 386 et seq. N. JEANDIN, Les effets de la faillite sur le contrat de durée, in: Le contrat dans tous ses états: publication de la Société genevoise de droit et de législation à l’occasion du 125e anniversaire de la Semaine Judiciaire, Genève/Berne 2004, p. 71 et seq., at 93; M. PLENIO, Das Erfüllungsrecht der Konkursverwaltung und schuldrechtliche Verträge im Konkurs, Diss. St. Gallen (2003), p. 119 et seq.; E. TAILLENS, Des effets de la faillite sur les contrats du débiteur, Vevey (1950), p. 60; P. WEYDMANN, Zweiseitige Verträge im Konkurs einer Vertragspartei, Diss. St. Gallen (1958), p. 35 et seq.; D. STAEHELIN, AJP/PJA 2004, p. 363 et seq., at 366. 38 39

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Patrick Keinert 3.

Range of Prohibitions

a)

Application Range

The most important parameter to restrict insolvency-related termination clauses is the scope of the prohibited connecting or reference points. Which connecting factors of termination clauses are inadmissible? In most legal systems which restrict insolvency-related termination clauses, it is inadmissible to link a clause to the opening of insolvency proceedings. In addition, the initiation of proceedings or the filing of an application is regularly regarded as an inadmissible criterion: for example, in Poland, Romania, Spain, the USA and England and Wales. Austria and the USA go even further: in the USA, the debtor’s insolvency or financial situation is already restricted, in Austria the deterioration of the debtor’s economic situation or even a pre-insolvency default of the debtor. Moreover, in the USA, the appointment of an administrator prior to the initiation of proceedings is not a permissible connecting factor. Furthermore, a distinction must be made between the types of insolvency proceedings and the type of contract affected by a prohibition. For example, in England and Wales, prohibitions of ipso facto clauses only concern reorganisation proceedings. b)

Legal Consequences

There are two main legal consequences which may result from the prohibition of ipso facto clauses: Firstly, it might bring about the ex tunc nullity of the clause itself like in France, Romania, Italy, Spain, Poland and Germany. In order to establish a connection to insolvency proceedings, clauses are only usually affected when their wording is linked to the filing of the application or the opening of the insolvency proceedings. Secondly, the termination right may just be unenforceable ex nunc from the commencement of an insolvency proceedings like in the USA and England. In such cases, the clauses do not lose their validity if the insolvency proceedings are dismissed e.g. for lack of assets. In Austria, the insolvency-related nature of the prohibition is particularly clear. Clauses which explicitly link their wording to the opening of proceedings are null and void. In addition, clauses independent of the debtor’s insolvency are also affected; the deterioration of the debtor’s economic situation and a pre-insolvency default of the debtor do not entitle the creditor to an extraordinary termination of the contract in the six months following the opening of the insolvency proceedings. Furthermore, any ordinary termination is stopped by a suspension of the termination right (an automatic stay for ipso facto clauses). 4.

Exceptions

Probably the most comprehensive exception is a large number of financial transactions such as listed commodity transactions and close-out netting agreements in 476

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Ipso facto Clauses in International Contracts each jurisdiction.40 Moreover, the prohibition is usually not applicable in cases of hardship for the contractual partner.41 D.

Intermediary Conclusions

For the goal of fostering the reorganisation of viable businesses, it is not only important for the insolvency administrator to have the possibility to terminate burdensome contracts, but also to ensure that contracts such as essential utility contracts are maintained to allow for a successful reorganisation.

III. Private International Insolvency Law A.

Concepts of International Insolvency Law

Two primary concepts are recalled here: the territoriality principle and the universality principle.42 According to the territoriality principle, insolvency proceedings limit their effects to the national territory and thus protect state sovereignty.43 Above all, local creditors, who only have to deal with their own national law, are protected.44

40

E.g. 11 U.S.C. 365 (e)(2)(B); Art. 7 n. 5a COM (2016) 723 final, – 2016/0359

(COD). Cf. P. KEINERT (note 8), at 167 et seq. and 187 et seq. On the principles of international insolvency law, see I. FLETCHER, Insolvency in Private International Law, 2nd ed., Oxford 2005, No. 1.11 et seq.; R. RODRIGUEZ, Zuständigkeiten im internationalen Insolvenzrecht, Bern 2016, p. 47 et seq.; U. GRAF, Die Anerkennung ausländischer Insolvenzentscheidungen, Tübingen 2003, p. 10 et seq.; S. KOLMANN, Kooperationsmodelle im internationalen Insolvenzrecht: empfiehlt sich für das deutsche internationale Insolvenzrecht eine Neuorientierung? (2001), p. 5 et seq.; C. PAULUS, DStR 2005, p. 334 et seq., at 334; S. SMID, Deutsches und Europäisches Internationales Insolvenzrecht (2004), Einl., No. 1, 2; D. STAEHELIN, Die Anerkennung ausländischer Konkurse und Nachlassverträge in der Schweiz (Art. 166 ff. IPRG), Basle 1989, p. 1 with further references; A. TRUNK, Internationales Insolvenzrecht – Systematische Darstellung des deutschen Rechts mit rechtsvergleichenden Bezügen (1998), p. 10 et seq. For a plea in favour of the principle of universality, see J.L. WESTBROOK, 17 Brook. J. Int’l L. 499 (1991), at 513 and already F. SAVIGNY, System des heutigen römischen Rechts, Bd. 8, p. 283 et seq. 43 E. NAEF/ F. NAEF, PJA 2008, p. 1396 et seq., at 1400; R. MASON, Chapter 2 – Cross-Border Insolvency Law: Where Private International Law and Insolvency Law Meet in: P. OMAR (ed.), Cross-Border Insolvency Law (2008), p. 42 et seq. The principle of territoriality is also referred to as the “grab rule”, because it is the rule under which every legal system seizes the assets located in the country: J. L. WESTBROOK, 23 Penn St. Int'l L. Rev. 625 (2005). 44 E. NAEF/ F. NAEF (note 43), at 1397. 41 42

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Patrick Keinert Several individual procedures (plurality) are the result of the territoriality principle.45 Therefore foreign companies have to bear higher insolvency costs.46 By contrast, the universality principle aims to have a worldwide impact. The opening of insolvency proceedings is recognised wherever the principle of universality applies.47 The legal system from which the insolvency proceedings are conducted must regularly be identified according to the centre of the economic interests of the insolvency debtor. For local creditors in particular, this can lead to surprises if, contrary to their expectations, a different insolvency regime is to be applied and national law is superseded.48 Universality aims at a main procedure, a mass, a single law applicable with regard to all insolvency-related legal issues.49 The consequence of universality is that a court may also be forced to apply foreign law if, for example, foreign insolvency law is applicable.50 Today, the principles are not realized in their pure form.51 Legal systems that follow territoriality recognise the limited effects of foreign insolvency proceedings and the principle of universality is also weakened by secondary proceedings and settlement insolvencies. Thus, irrespective of the systemic orientation of international insolvency law, there are several parallel proceedings that need to be coordinated. B.

Recent Case Law

The Karlsruhe Higher Regional Court52 dealt with the effects of insolvency on international executory contracts in the first case of its kind in Germany referring to ipso facto clauses.53 It had to decide on a German-French case.54 On September 12, 1990, the parties concluded a building contract for the construction of an office building. This contract contained an insolvency-related termination clause based on the VOB/B.55 The principal was established in Germany and commissioned a French construction company. VOB/B and German law were chosen. On August D. STAEHELIN (note 42), p. 2. L. BEBCHUK/ A. GUZMAN, 42 J.L. & Econ. 775 (1999), p. 778 and 803 et seq. 47 R. MASON (note 43), at 45. 48 I. FLETCHER (note 42), at 12. 49 D. STAEHELIN (note 42), at 2. 50 J.L. WESTBROOK (note 43), at 627. 51 C. PAULUS (note 42), at 334. 52 OLG Karlsruhe, 15.2.2012 – 13 U 150/10, NZI 2012, 526, discussed by T. PFEIFFER, in: Ars aequi et boni in mundo, Festschrift R.A. Schütze (2014), p. 422 et seq.; R. DAMMANN/ O. LEHMKUHL, NJW 2012, p. 3069 et seq. 53 R. DAMMANN/ O. LEHMKUHL (note 52), at 3069. 54 LG Freiburg, 8.7.2010 – 14 O 111/09, BeckRS 2012, 11442. 55 The VOB is a general contract for the construction sector drawn up by the “Deutsche Vergabe- und Vertragsausschuss für Bauleistungen”. See C. HINGER, Die Bauunternehmerinsolvenz – Die Sicherungs- und Vertragslösungsrechte zum Schutz der Vermögensinteressen des privaten Auftraggebers im Kontext von § 103 InsO (2010), p. 50. 45 46

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Ipso facto Clauses in International Contracts 13, 1991, a French reorganisation procedure was opened over the construction company. The parties disputed whether the construction contract could be effectively terminated under § 8 II No. 1 VOB/B because of the judicial reorganisation proceedings. Under French law, such a clause is null and void. The Karlsruhe Higher Regional Court applied German law (lex contractus) and thus came to the conclusion that the contract could be effectively terminated since the termination clauses were regarded to be valid. 56 Ultimately, an intervention in the contractual relationship shall be governed by the lex contractus and not by the lex fori concursus. The lower court, the LG Freiburg, had simply overlooked the international context and applied German law.57 Although the decision was made under the old German insolvency law, the same principles apply as under the EIR.58 The English High Court dealt with a similar English-Korean case.59 Pan Ocean was a Korean shipping company that signed a long-term transportation contract with the Brazilian company Fibria Celulose in 2011. The contract stipulated English law in a choice of law clause and contained an arbitration agreement based in London. The agreement also contained an insolvency-related termination clause. A main Korean bankruptcy proceedings was opened against Pan Ocean, and Fibria Celulose terminated the contract. Insolvency-related termination clauses were alleged to be inadmissible under Korean law. The High Court refused to apply Korean insolvency law and, under English law, approved the termination of the contract. Dogmatically, the main issue is the interpretation of Art. 21(1)(g) Cross-Border Insolvency Regulations 2006 (“CBIR”), the implementation of the UNCITRAL model law for cross-border insolvencies.60 Accordingly, the insolvency court may order measures to protect the assets involved in insolvency proceedings. The English High Court follows a strong territorial claim and pushes back the legal effects of foreign proceedings. Foreign insolvency proceedings have

56 Approving S. MATTHIES (note 5), note 3, dismissive R. DAMMANN/ O. LEHMKUHL (note 52), at 3071. 57 LG Freiburg, 8.7.2010 (note 54). 58 R. DAMMANN/ O. LEHMKUHL (note 52), at 3070. 59 Fibria Celulose S/A v Pan Ocean Co. Ltd, Mr You Sik Kim, 30.6.2014, [2014] EWHC 2124 (Ch); annotated by J. TILLMAN/ A. HOHL, 27 Insolv. Intel. 107 (2014), at 107; R. MATTHEWS, 30 J. I. B. L. R. 62 (2015), at 62; M. PHILLIPS, South Square Digest 11/2014, 6, 11, 13 (“Morgan J’s decision can be criticised in every point […] In Pan Ocean Morgan J made a decision that would have been recognised in Victorian England”). 60 The UNCITRAL Model Law on Cross-Border Insolvency (1997) has been implemented in 22 countries, including the United States – Chapter 15 (Ancillary and Other Cross-Border Cases) of the Bankruptcy Code (Title 11 USC), in force since 17 October 2005 – and the United Kingdom: Cross-Border Insolvency Regulations, in force since 4 April 2006. The Model Law regulates the recognition of foreign insolvency proceedings, the rights of foreign creditors and aims to be a means of cooperation, and coordination. However, rules on applicable law are not included: J. GARAŠIĆ, Anerkennung ausländischer Insolvenzverfahren: ein Vergleich des kroatischen, des deutschen und des schweizerischen Rechts sowie der Europäischen Verordnung über Insolvenzverfahren, des Istanbuler Übereinkommens und des UNCITRAL-Modellgesetzes (2005), Teil 2, p. 317.

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Patrick Keinert no effect on current contracts if they are subject to English law.61 The choice of English law thus determines whether termination clauses are valid – provided that the English courts have to decide this legal question. Ultimately, the parties would rely on the application of English law as a result of the choice of law.62 In addition, it would not be possible to give priority to the insolvency policy decisions of Korean law over English law in an English court.63 The decision makes it clear that the conflict between private autonomy and insolvency law also continues in international insolvency law.64 On the basis of this decision, insolvency law and restrictions to terminate a contract may be circumvented by means of a choice of law.65 American courts regularly recognise the insolvency law of the state in which the main insolvency proceedings were opened – for example, a Canadian ban on the termination of pending contracts in insolvency matters has also been recognized in the USA.66 The differences between US and English insolvency law can be illustrated by two proceedings resulting from the insolvency of the American bank Lehman Brothers. These cases involved a complex financial transaction made by Lehman Brothers Special Financing Inc. (“LBSF”) with a specialpurpose vehicle. Securities were issued for which security interests were created. As a rule, LBSF was to be satisfied from the security interests before the security holders; in the event of insolvency, the security holders were to be given priority (flip clause). The contracts were governed by English law. LBSF filed for insolvency. The security holders brought an action in England for satisfaction of their security interests. At the same time, LBSF filed an application for a declaratory judgment before a US court. The English Supreme Court considered this type of insolvency-related clause to be effective: In particular, a complex economic transaction that was entered into in good faith in the specific case must also be maintained in the event of insolvency.67 The US courts, on the other hand, considered the change in payment priorities to be unenforceable under the Chapter 11 protection provisions.68 Although English law was chosen by the contracting parties, the 61 Concerning the “Gibbs doctrine”, Antony Gibbs & Sons v La Société Industrielle et Commerciale des Métaux, 26.6.1890, 25 Q.B.D. 399. The English common law continues to apply in parallel with the CBIR, cf. In Re Stanford International Bank Ltd. (In Receivership), [2009] EWHC 1441 (Ch) N. 100; Rubin v. Eurofinance SA, [2009] EWHC 2129 (Ch) N. 22. L. CHAN HO, 25 J. I. B. L. R. 552 (2010); R. MATTHEWS (note 59), at 64; 25 Q.B.D. 399 (Ca); (1844) 13 M. & W. 443, 153 E.R. 185. The Gibbs doctrine is strongly criticised R. MATTHEWS (note 59), at 64 with further references. 62 Fibria Celulose S/A v Pan Ocean Co. Ltd, 30.6.2014 (note 59), No. 110 et seq. 63 Fibria Celulose S/A v Pan Ocean Co. Ltd, 30.6.2014 (note 59), No. 110 et seq. 64 J. TILLMAN/ A. HOHL, 27 Insolv. Intel. 107 (2014), 110. 65 M. PHILLIPS (note 59), at 17. 66 Cf. In re Gandi Innovations Holding, LLC., [2009] Bkrtcy LEXIS 2751; In re W.C. Wood Corp., Ltd., Case No. 09-11893 (KG) (Bkrtcy D. Del. June 1, 2009). 67 Belmont Park Investments Pty Ltd and others v BNY Corporate Trustee Services Ltd and another, [2012] 1 A.C. 383, N. 108. 68 In re Lehman Brothers Holdings Inc. v. BNY Corporate Trustee Services Limited, 422 B.R. 407 (Bkrtcy S.D.N.Y. 2010).

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Ipso facto Clauses in International Contracts more extensive protection provided by US law should be taken into account. A restrictive application of foreign insolvency law, based on the territoriality principle, thus underlines the considerable danger for the international decision-making process. C.

Applicable Law under the EU-Insolvency Regulation

1.

Preliminary Remarks

European international insolvency law is governed by the EU/2015/848 Regulation on Insolvency Proceedings (“EIR”) of 20 May 2015.69 The theoretical basis underpinning the EIR is the principle of universality, albeit in a somewhat modified format (“modified universality”), since a secondary procedure can be opened at the debtor’s place of establishment.70 The place of establishment must not be of a temporary nature and must indicate economic activities through the use of personnel and assets.71 The secondary proceedings are not insolvency proceedings aimed at recovering assets of the establishment. Rather, the establishment criterion serves only as connecting factor where local creditor interests are considered to be eligible for protection and, as a result, all assets in the Member State of establishment are to be covered.72 In contrast to Swiss or German law, the mere existence of assets in a given jurisdiction is not sufficient to open proceedings in that jurisdiction.73 International jurisdiction for the opening of insolvency proceedings is determined by the centre of the main interests of the insolvency debtor (“COMI”), according to Art. 3 EIR.74 Art. 7 (1) EIR establishes a coordinated relationship between international jurisdiction and applicable law: The “insolvency proceedings and their effects” are governed by the “insolvency law of the Member State” in which the proceedings are opened.75 The lex fori concursus is intended to ensure a neutral, practicable and consistent application of the law, as well as to facilitate harmonious decision-making, legal certainty, procedural economy, the equal

69 On the reform of the EIR: C. THOLE, ZEuP 2014, p. 39 et seq. On the mode of action of the EIR, M. FEHRENBACH, Haupt- und Sekundärinsolvenzverfahren (2014), p. 59 et seq.; R. RODRIGUEZ (note 42), p. 111 et seq. 70 Cf. J.-H. WYEN, Rechtswahlfreiheit im europäischen Insolvenzrecht (2014), p. 18 et seq. 71 Art. 2 Nr. 10 EIR; M. VIRGÓS/ E. SCHMIT, Report on the Convention on Insolvency Proceedings European Union Council Report (3.5.1996), 6500/96, No. 71. 72 H.-J. LÜER, Art. 3 EIR in: W. UHLENBRUCK, Insolvenzordnung, No. 6. 73 M.-P. WELLER, ZHR 2005, p. 570 et seq., at 586. Cf. § 354 para. 2 German Insolvency Code. 74 Cf. J.-H. WYEN (note 70), at 39; R. RODRIGUEZ (note 42), at 196. 75 J. NERLICH, in: J. NERLICH/V. RÖMERMANN, InsO, EIR, Art. 4, No. 1; M. VIRGÓS/ F. GARCIMARTÍN, The European Insolvency Regulation: Law and Practice (2004), p. 72.

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Patrick Keinert treatment of creditors, cost savings, and efficient litigation.76 This effect is mitigated by specific exceptions and secondary procedures.77 2.

Classification of ipso facto Clauses

All procedural and substantive effects resulting from the proceedings, and in particular their effects on legal relationships, must be assessed uniformly in accordance with the lex fori concursus.78 Art. 7 para. 2 sentence 2 lit. e EIR specifies that insolvency norms shall regulate in particular “the effects of insolvency proceedings on current contracts to which the debtor is party”.79 Rights and obligations arising from the contract itself are determined according to the lex causae.80 It is recognised that insolvency norms cover not only the insolvency administrator’s right to assume, but also the ability of the administrator and creditor to facilitate termination of a contract.81 But how do we deal with restrictions on contractual termination rights? The accompanying report on the former European Insolvency Convention argues that only those effects which are procedural in nature need to be assessed under insolvency norms.82 Insolvency law is characterised above all by norms aimed at the joint satisfaction of creditors and thus at equal treatment of creditors.83 Art. 7 para. 2 sent. 2 lit. e EIR therefore grants norms of insolvency law precedence over the applicable law only within the scope of what is necessary and thus represents a lex specialis in private international law.84 The starting point is that contract law is applicable to the contract. Only if the insolvency or the insolvency proceedings modify the contractual relationship, contract law is superimposed by

Enumeration according to P. KINDLER, in: MüKo-BGB, Art. 4 EIR, No. 4. M.-P. WELLER (note 73), at 575. 78 Recital 66 EIR. J. NERLICH, in: J. NERLICH/ V. RÖMERMANN (note 75), No. 4; D. HAß/ C. HERWEG, Art. 4, in P. HUBER/ D. HAß/ U. P. GRUBER/ B. HEIDERHOFF/ C. HERWEG (eds.), EIR, VO (EG) 1346/2000, No 2; M. VIRGÓS/ E. SCHMIT (note 71), at n. 90. 79 It is generally disputed whether Art. 7 EIR should be interpreted extensively in order to achieve uniform effect in insolvency proceedings: cf. H.-C.D. DUURSMAKEPPLINGER, in: EIR, Art. 4, N. 7; M. BALZ, ZIP 1996, p. 948 et seq.; vgl. S. LEIBLE/ A. STAUDINGER, KTS 2000, p. 533 et seq., p. 550. More restrictive M. VIRGÓS/ E. SCHMIT (note 71), No. 90; U. HAAS, NZI 2001, p. 1 et seq., p. 10: only those norms which are particularly closely related to insolvency proceedings should be subject to insolvency norms. 80 B. WESSELS, International Insolvency Law (2011), No. 10679. 81 J. NERLICH (note 75), Art. 4, No. 40; P. KINDLER (note 76), at Art. 4 EIR, No. 29; H.-C. DUURSMA-KEPPLINGER, Art. 4, in H.-C. DUURSMA-KEPPLINGER/ D. DUURSMA/ E. CHALUPSKY (eds.), Europäische Insolvenzordnung – Kommentar (2002), No. 18; R. GEIMER, Internationales Zivilprozessrecht, 8. Aufl. (2015), No. 3538. 82 M. VIRGÓS/E. SCHMIT (note 71), No. 90. 83 P. KINDLER (note 76), Art. 4 EIR, No. 10. 84 J.-H. WYEN (note 70), at 20; T. PFEIFFER (note 52), at 423. 76 77

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Ipso facto Clauses in International Contracts the applicable insolvency law – the latter is then decisive.85 The general rules for terminating a contract are thus subject by default to the lex contractus;86 only the context and effects of the insolvency proceedings may influence this position in order to fulfil the objectives of insolvency proceedings.87 Comparative law (as discussed above, Section II) shows that the prohibition of termination clauses pursues an inherent purpose under insolvency law. There is a direct link between it and the administrator’s right to assume contracts in order to facilitate restructuring. The right pertaining to the administrator should be protected uniformly. The mass should be increased and a better joint satisfaction of creditors should be made possible. The international insolvency principles can best be realised if the effects of insolvency are universally and imperatively subject to the lex fori concursus. The basic principles of insolvency law, such as equal treatment of creditors, are globally uniform principles.88 The European Union is taking this universal approach as its starting point. The coordination of the competence to open proceedings at the centre of the debtor’s interests and the applicable law contributes to a high degree of predictability and procedural efficiency in the context of insolvency.89 Since insolvencies have an impact on many legal aspects of a contractual relationship, the effects of the applicable insolvency law should be subject to uniform law.90 For these reasons, contractual relationships and the administrator’s right to assume or reject contracts are to be comprehensively linked to the lex fori concursus for all insolvency-related questions. The preliminary question of whether a contractual claim exists is based on general conflict-of-law rules;91 its treatment under insolvency law is subject to the norms on insolvency. Moratoria and prohibitions concerning termination rights are inextricably linked with the proceedings and therefore require unity in the insolvency proceedings. In particular, protective mechanisms for insolvency proceedings, which are subject to the lex fori concursus, are only effective if a fragmentation of the applicable law is avoided.92 This means that the restrictions and prohibitions on termination rights in the event of insolvency must be found under insolvency law. There is necessarily a specific close connection with the functional objectives of 85 S. REINHART, Art. 4, in: H.-P. KIRCHHOF/ R. STÜRNER/ H. EIDENMÜLLER (eds.), Münchener Kommentar zur Insolvenzordnung, VO (EG) 1346/2000, No. 9; H.-J. LÜER (note 72), Art. 4, No. 15; B. WESSELS (note 80), No. 10678. 86 Cf. Art. 12 (1)(d) Rome I; M. VIRGÓS/ F. GARCIMARTÍN (note 75), at 121. 87 M. VIRGÓS/ F. GARCIMARTÍN (note 75), at 122; R. MATTHEWS (note 61), at 64. 88 H. BUXBAUM, 36 Stan. J. Int'l L. 23 (2000), 52; J. L. WESTBROOK, 65 Am. Bankr. L.J. 457 (1991), 466; I. FLETCHER (note 42), No. 1.08. 89 J. L. WESTBROOK (note 43), at 634; J.-H. WYEN (note 70), at 372; H. BUXBAUM (note 88), at 48. 90 H.-J. LÜER (note 72), at pre-§§ 335, No. 3. 91 J. L. WESTBROOK (note 43), at 630; H. BUXBAUM (note 88), at 54; M. VIRGÓS/ F. GARCIMARTÍN (note 75), No. 112a. 92 S. KOLMANN/ M. KELLER in: Insolvenzrechts-Handbuch (2015), § 133, No. 6.

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Patrick Keinert the insolvency proceedings.93 The lex contractus is displaced and no longer applicable.94 Only for employment contracts and financial contracts is a special link created under the EIR according to the lex contractus. In this case, the applicable law is governed exclusively by the special status; there is no cumulation with the lex fori concursus.95 If the parties have made the contract subject to a certain legal system, it may well be unexpected if another (insolvency) law decides on the validity of contractual clauses.96 A choice of law for the insolvency law of a given jurisdiction is, however, not possible.97 Nor is it possible to invoke the argument that there was a legitimate expectation that a particular lex fori concursus would be applied.98 Ultimately, predictability – given by the debtor’s center of main interest – must be guaranteed to avoid arbitrary determination.99 3.

Practical Application

The case studies are intended to illustrate this abstract regulatory concept. a)

Case 1: lex fori concursus Prohibits Insolvency-Related ipso facto Clauses

In the first case, the lex contractus permits termination of the contract in the context of insolvency, while the lex fori concursus prohibits termination of the contract in the event of insolvency. (i)

Termination Clauses: Link to the Opening of Insolvency Proceedings

Insofar as the prohibition to terminate the contract is linked to the opening of the proceedings, the prohibition shall coincide with the application of insolvency norms. In this respect, the requirements of the prohibition and its legal consequences are governed by insolvency law. Nullity of termination rights under insolvency norms is effective as of the beginning of the procedure. As a result, a double consideration of the termination clauses must be carried out: First, the clauses must 93 H.-J. LÜER (note 72), Art. 4, No. 12; I. M. LÖFFLER, BB 2013, p. 1283 et seq., at 1288; T. PFEIFFER (note 52), at 423. 94 Comp. P. KINDLER (note 76), Art. 4 EIR, No. 29; R. DAMMANN/ O. LEHMKUHL (note 52), at 3071; M. VIRGÓS/ F. GARCIMARTÍN (note 75), at 122. 95 M. VIRGÓS/ E. SCHMIT (note 71), No 127; P. KINDLER, § 4. Geltungsbereich und Grenzen des Insolvenzstatuts, in: P. KINDLER/ J. NACHMANN (eds.), Handbuch Insolvenzrecht in Europa, 4. Aufl. (2014), p. 91. 96 Cf. the arguments in Fibria Celulose S/A v Pan Ocean Co. Ltd, Mr You Sik Kim, 30.6.2014, [2014] EWHC 2124 (Ch). 97 M.-P. WELLER (note 73), at 590. 98 E. SCHOLLMEYER, Gegenseitige Verträge im internationalen Insolvenzrecht (1997), p. 163. 99 E. SCHOLLMEYER (note 98), at 163.

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Ipso facto Clauses in International Contracts be measured under the lex contractus against their general admissibility under contract law. The clauses may already be null and void under the lex contractus. Secondly, admissibility under insolvency law must be assessed according to the lex fori concursus as of the moment that the proceedings are brought. Automatic stay of termination rights shall only be considered purely procedural if the lex fori concursus provides so. Insolvency-related moratoria under the applicable contract law are irrelevant. Insolvency norms may superimpose and block both contractual and statutory provisions of the lex contractus – the facts and legal consequences of the prohibition shall be decisive. In this respect, the termination rights may be regarded as inapplicable. If, however, the lex fori concursus itself permits termination of the contract in certain cases, it is coherent to apply insolvency norms uniformly and to permit termination of the contract. (ii)

Termination Clauses: Pre-Insolvency Links

Insolvency norms can even further prohibit the termination of a contract prior to the insolvency procedure itself – for example, in the case of termination clauses referring to the filing of a procedure or the mere existence of a reason for opening insolvency proceedings or in the case of a significant deterioration of the debtor’s assets. In principle, insolvency norms will take effect once proceedings have been opened, which in practice means that insolvency norms have no effect before the insolvency proceedings are initiated.100 PFEIFFER therefore proposes that the effect of insolvency norms be brought forward in view of the resulting norm contradiction: as soon as an insolvency-related termination clause is fulfilled, its effectiveness should depend on the potential lex fori concursus of the debtor.101 If the clause is linked to the filing of the procedure, then the insolvency norms may have prior effects. The obligation to file an insolvency application or the liability for failure to file an insolvency application shall also be subject to insolvency norms.102 These rules already have an effect in the run-up to the procedure.103 Typically, a bundle of insolvency-specific norms already apply and must have their nature determined under the applicable insolvency law before the formal opening of proceedings, such as the reasons for the opening of insolvency proceedings or insolvency avoidance situations.104 In this respect, it is logical that insolvency norms should be given effect as of the moment of the filing for insolvency proceedings.105 With filing, the links to a given lex fori concursus have sufficiently intensified. As long as the application procedure is ongoing, its effects will already 100 P. KINDLER (note 99), § 4, No. 2, having regard to the exception for liability in the event of failure to make an application. 101 T. PFEIFFER (note 52), at 425. 102 P. KINDLER (note 76), Art. 4 EIR, No. 63 and 71.

103

P. KINDLER (note 76), Art. 4 EIR, No. 67. P. KINDLER (note 76), Art. 4 EIR, No. 67: “Der insolvenzrechtlichen Qualifikation kann nicht in einer Art ‘Stichtagsregelung’ entgegengesetzt werden, bei dem Verstoß gegen die Insolvenzantragspflicht handele es sich um eine Pflichtverletzung aus der Zeit vor Insolvenzeröffnung”. 104

105

Cf. also C. THOLE, ZNER 2013, p. 465 et seq., at 467.

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Patrick Keinert be subject to insolvency norms. Thus, if the termination of the contract is linked to the filing of the procedure, the effectiveness of the termination clause shall already be subject to the norms contained in insolvency law. If the termination clause is linked at an even earlier point in time than the filing of the application, e.g. to the moment at which the substantive grounds for insolvency arise, then insolvency norms may only be applied if justified extensively. First of all, it should be remembered that the application of insolvency law is usually determined at the opening of the insolvency proceedings. But can insolvency norms be applied retroactively and thus enforce a ban on solving pre-insolvency problems retroactively? In principle, contracts are to be taken over by the administrator in the same way as they are found. The applicable contract law may hold that the contract is effectively terminated before the insolvency, such that the administrator would no longer be able to exercise avoiding powers. In this respect, the trust of the contractual partner must be protected, as he can hardly know whether insolvency proceedings will actually be opened or not.106 This leaves the possibility for a pre-insolvency effect to reverse the (pre-filing) termination of the contract by means of the rules for voidability of insolvency proceedings. The voidability of legal acts is also based on the lex fori concursus (cf. Art. 7 para. 2, sent. 2 lit. m EIR). For purely national circumstances, the challenge of insolvency does not seem to be a sufficient means to meet the reorganisation purposes of prohibitions on the termination of contracts. At the international level, it may be an adequate means to achieve coordination between national and international facts. Therefore, in line with the view of PFEIFFER, insolvency norms already have a preliminary effect from the filing of insolvency proceedings.107 Nevertheless, further adjustment and extension of the application of insolvency norms on the contract cannot be supported since it is not certain whether the insolvency proceedings will ultimately be opened and a complete shift towards normative effect of insolvency law will take place.108 The norm contradiction shall not be eliminated more comprehensively. In this limited scope, the contradiction may be adjusted on the level of private international law. (iii)

Termination Clauses: Fate after the End of the Proceedings

If the insolvency proceedings should be brought to an end, insolvency norms shall no longer have effect on proceedings. There is a change in the applicable law such that the termination of the contract shall again be fully governed by contract law. If only a moratorium has been ordered, this shall lose its effect. It may be the case, however, that insolvency norms have already taken effect to order the nullity of the termination clause. In respect of a contract, insolvency norms only take precedence over contractual norms in so far as is necessary. The clauses shall be deemed null Cf. T. PFEIFFER (note 52), at 425. T. PFEIFFER (note 52), at 425. 108 Cf. J. GRASSER (note 5), at 342, who advocates an adjustment according to which the invalidity of pre-insolvency insolvency-dependent solution clauses only takes effect when the proceedings are opened, but then ex tunc has an effect on the assertion of termination rights [...]. 106 107

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Ipso facto Clauses in International Contracts and void according to the norms of insolvency law. However, the lex contractus is not completely superseded, but only superimposed. This provides a theoretical basis for why the contract clause remains valid under contract law. Nullity of the termination clause only has to be carried out under insolvency law. The legal consequence of nullity leads on a factual level to a moratorium for the duration that the insolvency norms are in effect. If the applicable insolvency law shall no longer be in effect, the effectiveness of the clause shall remain unaffected. Further insolvency proceedings may take place at a later stage under another lex fori concursus which permits termination clauses. In such cases, it would not be understandable why old contracts which have already survived insolvency proceedings should no longer contain contractual termination clauses. b)

Case 2: lex contractus Prohibits Insolvency-Related Termination Clauses

Whether a contractual claim has arisen at all is also determined by the lex contractus in the event of insolvency. If the insolvency law of the jurisdiction designated as the law applicable to contracts should declare insolvency-related termination clauses null and void, these clauses may be deemed invalid. The contracting parties shall be deemed to have no interest worthy of protection that these clauses could have been effective in insolvency, even if the lex fori concursus later applicable does not contain a prohibition. A change in the applicable law cannot act to render the clauses effective. If, however, the lex contractus only intends moratoria or automatic stays, the provision shall not interfere with the contractual relationship. Instead, it is to be considered a procedural norm in the exclusive domain of insolvency. The legal consequence of it is not nullity, but simply a temporary suspension of its effect. Such a moratorium can therefore result exclusively from the lex fori concursus. 4.

Intermediary Conclusion

The application of the lex fori concursus enables a uniform set of rules for all executory contracts – irrespective of the law to which these contracts are subject by choice of law. In the case of a prohibition of a “pre-petition” termination clause in the run-up to insolvency, the potentially applicable lex fori concursus may already have preliminary effects as soon as the application for insolvency has been filed. D.

Coordination of Parallel Insolvency Proceedings

Where are contracts to be located? How are pending contractual relationships or the administrator’s right to assume a contract in parallel insolvency proceedings coordinated? Contractual reciprocity is mainly protected by the administrator’s right to assume a contract, and therefore the determination of the competent administrator is of considerable importance – especially as national law can differ considerably.

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Requirements for Secondary Insolvency Proceedings

Due to the modified universality of the EIR, a territorially-limited part of the insolvency debtor’s assets may be subject to secondary proceedings. It is crucial that an establishment is maintained in this territory. This means that an insolvency debtor – one (legal) person – shall be wound up in two proceedings. The consequence is that two or more administrators deal with the insolvency of a debtor. The purpose of this mechanism is to protect local creditors, whose trust is linked to the establishment. There is no explicit regulation as to how the competence of the administrators involved is to be delimited in the case of executory contracts. Art. 41 et seq. EIR only contain general coordination provisions. A clear demarcation is necessary since the powers of the administrator and the right to assume or reject contracts are in principle governed by the lex fori concursus and because there are considerable differences between the Member States (cf. Art. 7 para. 2 sentence 2, lit. c, e EIR).109 Each administrator shall manage the assets and liabilities of his procedure in accordance with the relevant lex fori concursus.110 The assignment of the contract to the respective insolvency proceedings indirectly determines which lex fori concursus is to be applied and whether termination clauses are consequently permissible. The active mass – i.e. the assets – of the main proceedings is limited by the active mass of the secondary proceedings.111 Since the active mass can only be realized once, a clear delimitation is necessary, whereby only the secondary administrator may realise the assets of the secondary procedure.112 The liabilities, on the other hand, are ubiquitous since the creditors of the insolvency proceedings can file their claims in any proceedings – however, their claims may be treated differently in the different proceedings in accordance with the respective lex fori concursus.113 The contract as such is not to be considered as part of the estate.114 A contract, especially an executory contract, consists of mutual claims – “assets” and “obligations”. Thus, pending contracts play a role both for assets and liabilities. 2.

Assignment of the Contract to a Specific Insolvency Procedure

The question arises as to which insolvency procedure a contract should be assigned to and which administrator should be given administrative authority. Ideally, the insolvency administrator should be afforded direct control of the assets.115 Receivables have no natural location, meaning that they may only constitute legal Art. 21 Abs. 3 EIR 2015 shall be taken into account. M. FEHRENBACH (note 69), at 262. 111 M. FEHRENBACH (note 69), at 126. 112 M. VIRGÓS/E. SCHMIT (note 71), at N. 163; M. FEHRENBACH (note 69), at 268. 113 M. FEHRENBACH (note 69), at 262 and 267. 114 M.-P. WELLER (note 73), at 589. 115 M. VIRGÓS/ F. GARCIMARTÍN (note 75), at 164 (“logic of enforcement”, “power with obligation to pay or perform”); M. FEHRENBACH (note 69), at 154. 109 110

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Ipso facto Clauses in International Contracts fictions.116 Art. 2 No. 9 EIR contains general rules on the location of assets. Claims are localised by normative means.117 They are presumed to be at the centre of the main interests of the third party obliged to perform (Art. 2 No. 9 viii EIR).118 In this respect, there is only a legal provision for the “asset claim.” Various solutions for contract assignment are proposed in the literature on this topic – a uniform view has not yet emerged. Any eventual solution must answer the question as to which procedure a contractual relationship is most closely related to.119 REINHART assigns executory contracts according to the general rules. It herein depends on the centre of the interests of the debtor of the asset claim. In principle, therefore, the main administrator has the right to exercise the option, unless the contracting party (debtor of the asset claim) has its centre of main interests in the country of the secondary proceedings.120 This view is based on the presumption rule on the location of the asset claim. BLOCHING points out that the main administrator always has the most comprehensive overview of the company as a whole and could therefore most easily exercise the right to assume or reject its contracts. Ultimately, however, it is the closest administrator who shall decide. The criterion as to whether the establishment provides or receives the service shall be inappropriate if several establishments are affected by one contract. Therefore, the administrator in whose country the contracting party has its general place of jurisdiction shall be competent.121 TRUNK opposes determination through the localisation of the “asset claim”. In this view, a qualified domestic reference shall be necessary, which is to be decided in individual cases by a flexible weighing of domestic references with regard to the objectives of the secondary procedure.122 The particular procedure’s claim over proceedings does not cover all the pending legal relationships of the debtor from that territory.123 APELDOORN requires an exclusive relationship with the establishment such that the secondary administrator can assume or reject the contractual relationship.124 ESPINIELLA MENÉNDEZ is also in favour of a close relationship with the establishment such that only contracts relating to economic activities taking place in the jurisdiction of establishment are covered by the secondary procedure.125 WELLER requires a qualified reference of the contractual performance to the establishment of the debtor. This is the case if M. BLOCHING, Pluralität und Partikularinsolvenz (2000), p. 193. Swiss Federal Supreme Court, 11.3.2010 – 5A.83/2010. 118 In German international insolvency law there is no presumption of the location of claims. Rather, § 23 ZPO outlines that it should be based on where the right can actually be accessed. Claims are thus substantiated at the debtor’s place of business, wherein a choice of law is irrelevant. See H.-J. LÜER (note 72), § 335, No. 16. 119 Cf. M.-P. WELLER (note 73), at 590. 120 S. REINHART (note 85), Art. 27, No. 25. 121 M. BLOCHING (note 116), at 210. 122 A. TRUNK (note 42), at 249 et seq.; approving S. KOLMANN (note 42), at 223. 123 A. TRUNK (note 42), at 249. 124 J.C. van APELDOORN, Wederkerige overeenkomsten, Tijdschrift voor Insolventierecht (TvI) 2002, p. 123 et seq., at 126, quoted from B. WESSELS (note 80). 125 A. ESPINIELLA MENÉNDEZ, 19 Int. Insolv. Rev. 99 (2010), at 128. 116 117

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Patrick Keinert the establishment provides the service or receives it and the secondary mass benefits from the contract. A pure reference to the asset claim shall not be sufficient.126 GARAŠIĆ sees three cumulative prerequisites for assigning a contractual relationship to the secondary procedure: the performance of the liability claim must belong to the secondary procedure, the creditor of the asset claim must have his centre of main interests in the jurisdiction of secondary procedure, and the contract must have a close domestic relation to the secondary procedure.127 FEHRENBACH sees the exercise of the administrator’s right to assume the contract as the management of the liabilities side of the balance sheet. Thus he assumes the ubiquitous competence of the passive claim and achieves a multiple competence of the administrators. Only a repeated exercise of the administrator’s right shall be problematic. Nevertheless, this should not be considered a serious risk, since only the administrator who has the power to fulfil the contract will assume the contract.128 3.

Assessment

a)

Point of Departure under EIR

The allocation of administrative competence must be based on the legal provisions of Art. 2 EIR, as proposed by REINHART. First of all, the solvent contracting party has an unprivileged insolvency claim. This can be asserted ubiquitously as a passive claim in any proceedings. This claim is therefore not suitable for a precise localisation of the contractual relationship. Only the “asset claim” can be localised with precision according to the legal dispositions.129 The “asset claim” can only be assigned to one estate and must be decisive for the assignment of the contractual relationship. It may be the case that, due to the protection of the principle of contractual reciprocity, which is also effective in international insolvency cases, the enforcement of the “asset claim” is linked to the “liability claim”.130 The general principle is that, in the event of insolvency, the contracting party no longer has to pay the “asset claim” to the insolvency estate without consideration. If the administrator demands the performance of an executory contract, the estate’s liabilities are privileged. Since the administrator’s right to assume or reject contracts represents a mechanism to protect reciprocity, it is to be understood as an annex to the collection of the “asset claim”. Locating the “asset claim” leads indirectly to the localisation of the contractual relationship. Therefore, the centre of the main interests of the third party debtor of the asset claim in essence enables a simple and meaningful allocation in a large number of cases. If the debtor of the “asset claim” has his habitual residence in the country of a given proceedings, these proceedings shall be responsible for the contractual relationship connected with the asset claim; if the third-party debtor is established M.-P. WELLER (note 73), at 590. Without further explanation J. GARAŠIĆ (note 60), at 322. 128 M. FEHRENBACH (note 69), at 293. 129 M. FEHRENBACH (note 69), at 290. 130 M.-P. WELLER (note 73), at 589. 126 127

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Ipso facto Clauses in International Contracts in the main proceedings state, the claim shall be located in the main proceedings. Separate localisation of the asset and liability claims shall be prohibited. This could lead to different applicable insolvency law and administrative powers. A single contractual relationship could then be “torn apart”, such that two different administrative rights or different termination rules would have to be applied to a single contractual relationship. This means that the administrative powers of the administrator must be determined as an accessory to the “asset claim”. Intervention by one administrator in the powers of the other must also be ruled out. The sole competence of the principal administrator also contradicts the purpose of particular proceedings, which should also include contractual relationships.131 b)

Problematic Factual Situations

However, this solution seems to lead to considerable problems in some situations: The first situation arises where the demand for the services arising from the executory contract is unequally distributed between the parallel proceedings. For example, the company as a whole maintains an IT contract with a contractual partner based in its country of establishment. The consequence of this would in fact be the responsibility of the secondary administrator. However, the need or interest of the secondary administrator may be quantitatively limited, since the establishment procedure does not require the IT services of the entire company. However, the contract can only be fulfilled uniformly on a regular basis. The second situation arises where the possibilities of fulfilment are unequally distributed. If the establishment procedure receives the asset claim under Art. 2 EIR, but only the administrator of the other parallel procedure can fulfil the liability claim, this would regularly lead to choose the rejection of the contract. Otherwise, the result would be that assets would be transferred from one mass to another: one mass would get the advantage, the other mass would have to pay. It is true that the body of creditors as a whole would gain an advantage, since the right to assume the contract would only be exercised to their benefit. Creditors can also lodge their EIR claims ubiquitously and thus benefit from these advantages. However, the different procedures may have different distribution systems, such that the exercise of the administrator’s right to assume the contract may shift the creditors’ chances of satisfaction. The intervention by one administrator in the management powers of the other administrator would ideally be ruled out. c)

Criticism on the Relation to Establishment

However, even those contrary opinions, which require a qualified reference of the claim or the contractual relationship to the establishment when localising the contract, cannot definitively solve these challenges. It is a legitimate goal to achieve an optimal delimitation of administrative competences. However, the problematic cases described above remain conceivable. The allocation of administration rights 131

M.-P. WELLER (note 73), at 589; M. VIRGÓS/ E. SCHMIT (note 71), No. 155.

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Patrick Keinert to a procedure does not completely solve all allocation problems and other partial administrators may also have a proportionate interest or need to fulfil the contract. In particular, individual solutions do not provide legal certainty for the contractual partner. In the event of insolvency, the primary interest of the contractual partner is to obtain certainty about the contractual relationship as quickly as possible. With such open delimitations of responsibility on the administrator’s right to assume the contract, this goal is missed and conjures up legal disputes.132 Ultimately, the protective purpose of the territorial procedure must once again be borne in mind. Its primary purpose is to protect the local creditors from external insolvency laws, i.e., the solvent contracting party with habitual residence in the territorial procedural state. It is not a question of the settlement of the establishment itself, but of the protection of the interests of the local creditor. On the basis of abstract general provisions, the need for protection has been determined systematically in a large number of cases. If the contractual partner has his centre of main interests in the country of establishment and secondary proceedings take place, his interest must be subject to the protection of local insolvency laws. He may also initiate the secondary proceedings himself in accordance with Art. 37 EIR, which underlines his worthiness of protection. Local creditors rely on the estate in the country of establishment.133 Art. 2 EIR defines precisely the asset masses, in particular the asset claims. In this context, a reference limiting claims to the establishment is not required by law and contradicts the current legal situation. Furthermore, there is no apparent argument as to why a special establishment reference should be necessary to locate the contractual relationships or claims. A movable object which has no relation to the establishment but is located in the territorial procedural state falls within the scope of this particular procedure. To this effect, REINHART’S view is to be adopted: the centre of the main interests of the debtor of the asset claim is necessary, but also sufficient, to locate a contractual relationship and the administrative powers. Therefore, a different solution is to be reached for the two problematic categories described above. d)

Criticism on the External Multiple Responsibility of Administrators

So far, attempts made to establish a delimitation of administrative responsibility in external relations have not produced an outcome. To overcome the difficulties faced in regard to this approach, FEHRENBACH proposes multiple responsibilities for each of the administrators. In the administrator’s request for performance, he recognises a change in the quality of the asset such that the asset can only be assigned to one of the insolvency assets with a request for performance.134 This is ultimately a less convincing formal argument. The asset already exists from the time the contract is concluded because the claim arises at that time. The choice of settlement does not create a new receivable, but the receivable retains its value.

M. FEHRENBACH (note 69), at 292. M. BLOCHING (note 116), at 72. 134 M. FEHRENBACH (note 69), at 293. 132 133

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Ipso facto Clauses in International Contracts Otherwise it would be possible for the administrators to decide on the applicable law. Nevertheless, the multiple responsibility approach proposed by FEHRENBACH overlooks the fact that each administrator applies his own lex fori concursus. This can lead to friction between the differently applicable laws, since the powers afforded to the administrator and applicable insolvency law differ considerably depending on the legal system. If we take the example of a German and a French insolvency administrator, each with competence over the insolvency procedure, the German administrator could choose to fulfil existing contracts and the French administrator could opt for non-compliance. Under French law, this might have the effect of terminating the contract, unlike under German law. If the bankruptcy is successfully reorganised, it remains open as to whether the continuation of the contract is governed by German or French law. Furthermore, a multiple allocation does not take into account Art. 2 EIR, which establishes clear and unambiguous rules to localise assets. It contradicts the regulatory concept of the clear allocation of assets if it is left to the administrators to decide who chooses faster fulfilment. e)

Solution: Internal Multiple Responsibility of Administrators

It is more convincing to assume an internal multiple responsibility over the EIRcooperation requirement of the insolvency administrators.135 If one accepts the distribution of the asset mass in accordance with Art. 2 EIR, the administrative competences vis-à-vis the contracting parties are clearly delimited in the external relationship. This also corresponds to the above mentioned protective purposes of the secondary procedure and can thus allow him to calculate his risks.136 As has already been said, it is not a question of the liquidation of the establishment.137 The establishment office is only a trusted partner and a point of contact.138 Ultimately, the procedure will be extended to the entire territory, irrespective of the specific relationship with the establishment.139 The exclusive responsibility in the external relationship is countered by an internal duty to cooperate. For example, Art. 41 EIR provides that the administrators shall agree internally and, in particular, reach necessary agreements. Furthermore, there is an internal obligation to compensate as a joint creditor, much like under FEHRENBACH’s proposal. In this way, the advantages from mutual contracts can be balanced in favour of all proceedings. If the contractual relationship falls within the scope of the territorial procedure, but the main administrator needs the contract, the right to assume or reject the contract must be exercised by the secondary administrator. Internally, the secondary mass may be exempted from the On the necessary cooperation of administrators in the case of external multiple responsibility, see M. FEHRENBACH (note 69), at 295. 136 M.-P. WELLER (note 73), at 584. 137 M. FEHRENBACH (note 69), at 124. 138 M.-P. WELLER (note 73), at 590. 139 M. FEHRENBACH (note 69), at 125. 135

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Patrick Keinert obligations entered into by the main mass. In the other problem category, for example, if the secondary administrator is externally responsible, but can only fulfil the privileged passive claim with the objects of a parallel procedure, an agreement with the other insolvency administrator solves the problem: an internal compensation mechanism may divide the benefits and costs of fulfilling the contract between the two procedures. The advantage of this solution lies in a simple and clear external allocation of competences. This enables the contractual partner to have certainty and to be able to determine the applicable law more quickly. The exclusive competences reduce the uncertainties in insolvency and are advantageous for a quick and legally compliant solution. Above all, the insolvency laws are clearly defined: What deadlines apply to the administrator’s right to adopt or reject, do courts have to agree to the right to opt, are there prohibitions on termination clauses, and can the contractual partner request the exercise of the right to adopt executory contracts? Under the new EIR, secondary proceedings are no longer compulsory for liquidation, but allow a more cooperative approach with the main procedure. This is in line with the solution proposed here. The solution may also prevent the administrator’s right from being exercised in problem cases without an agreement. If an administrator demands performance without being in a position to do so, then liability shall arise vis-à-vis the contractual partner.140 Without the consent of the other administrator, no right can be exercised at the expense of parallel proceedings. This interaction with the liability system increases the pressure on international cooperation which is indispensable for successful restructuring. The other administrator may not refuse an overall advantage if he also achieves an advantage and no one-sided burden on his estate. If no agreement is reached, the right to vote cannot be exercised in case of doubt. This does not represent a deterioration of the initial situation, as the contractual partner is not entitled to compel performance. Instead, the rule is intended to be that an administrator chooses to reject the contract. As long as territorial proceedings exist, such situations are simply to be accepted. Only in the procedure that is externally competent is the liability claim to be privileged in accordance with its law.141 The connecting criterion of Art. 2 EIR is the centre of the main interests of the third-party debtor. Despite all the criticism of this criterion, the case law and the new version of Art. 3 EIR offer a certain degree of legal certainty. Certainly, the domicile or habitual residence of the debtor can also be taken as a basis.142 However, this should regularly coincide with the focus of the main interests. Other criteria for determining the asset claim could include the creditor’s residence, nationality or place of performance. It would also be conceivable to link this to a choice of law. However, these proposals do not show any superior advantage. An international standard has not yet been fully established.143

Cf. e.g. § 61 German Insolvency Code. Cf. M. FEHRENBACH (note 69), at 291. Cf. M. FEHRENBACH (note 69), at 294. 142 Cf. on this point M. BLOCHING (note 116), at 184 and 196, with further references, and § 23 German ZPO. 143 M. BLOCHING (note 116), at 185. 140 141

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Ipso facto Clauses in International Contracts f)

Temporal Delimitation of the Procedures

Finally, the temporal delimitation of the parallel proceedings has to be dealt with. A territorial procedure initiated at a later date does not have a retroactive effect: if the principal administrator has already exercised his rights over the executory contract or, for example, has terminated the contract, this has to be accepted by the second procedure.144 A completed fact, such as the exercise of the right of option or the expiry of a time limit, shall be preserved.145 Nevertheless, it should be considered whether time limits which have started to run with the opening of the main proceedings should be credited against time limits in the secondary proceedings.146 Since the uncertainties for the protection of the contracting parties in insolvency proceedings are to be kept as low as possible and prohibitions on termination clauses are justified by limited powers to exercise the administrator’s right, any periods commenced must also be taken into account in the secondary proceedings.

IV. Conclusion Contracts are the basis for entrepreneurial action and thus have a special significance in insolvency. This applies in particular to essential supply and utility contracts, the continuation of which determines the chances of reorganisation in insolvency. Despite this importance, substantive law concerning insolvency-related ipso facto clauses differs fundamentally: there are still legal systems permitting the termination of contractual relationships during insolvency proceedings, while other legal systems restrict such contractual freedom. Furthermore, prohibitions of ipso facto clauses vary in their design and scope of application. Therefore, there is a special need for coordination at the level of private international law for international insolvency proceedings. In line with the principle of par conditio creditorum and the universal approach of the EIR, the existing European private law allows for a target-oriented mechanism to promote successful restructuring. The advantages and the decision to assume or reject an executory contract can be assigned to a particular procedure. When determining the applicable law for the effectiveness of ipso facto clauses, the objectives of the insolvency proceedings and the chances of reorganisation must especially be taken into account. The existing European private law makes it possible to effectively coordinate restrictions of ipso facto clauses in favour of the successful structuring of insolvency proceedings. Although the European Union has taken first measures to restrict ipso facto clauses under substantive law in early restructuring proceedings, no full harmonisation for the problem in question is to be expected soon. So far, it is a task for private international law.

B. WESSELS (note 80), No. 10680 and 10682. M. BLOCHING (note 116), at 257. 146 M. BLOCHING (note 116), at 257. 144 145

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THE EXERCISE BY U.S. COURTS OF THEIR EXTRATERRITORIAL JURISDICTION OVER CORPORATE WRONGS CLAIMS: OVERVIEW AND PERSPECTIVES Adeline MICHOUD*

I. II. III. IV. V.

Introduction The U.S. Alien Tort Statute’s Interpretation: A Forerunning System The Presumption against Territoriality Established by the Kiobel Case The Jesner Case: A Further Blow to the Extraterritorial Jurisdiction of U.S. Courts Conclusion

I.

Introduction

Today’s economy is largely run by transnational corporations (TNCs), which account for 80% of global trade.1 These multinational companies use the services of contractors and suppliers abroad whose production costs are substantially lower than those of developed countries. In the context of globalisation, transnational corporations of Western countries have thus relocated a substantial part of their operating factories and created subsidiary groups in developing countries. To outsource their activities, TNCs have generally opted for zones of weak governance 2 where the rule of law is in most cases absent. Indeed, given the substantial economic impact that the establishment of a TNC can have on the local economy of the chosen territory (in terms of technology sharing, employment, revenue, growth, etc.), 3 the governments of many host countries in the Southern * LL.M, Teaching & Research Assistant at the University of Geneva, Ph.D candidate, Trainee Lawyer. 1 UNCTAD, World Investment Report 2013, Global Value Chains: Investment and Trade for Development 2013, p. 10, available at: . 2 This strategic expansion often coincided with “compromised, but often indirect, relationships with corrupt governments or government owned enterprises in Africa and elsewhere”. See C. PARKER/ J. HOWE, Ruggie’s Diplomatic Project and its Missing Regulatory Infrastructure, in R. MARES (ed.), The UN Guiding Principles on Business and Human Rights: Foundations and Implementation, Martinus Nijhoff 2012, p. 296. 3 J. HARRELSON-STEPHENS/ R. Callaway, Does Trade Openness Promote Security Rights in Developing Countries? Examining the Liberal Perspective, 29(2) International Interactions 2003, p. 143 et seq.

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Adeline Michoud hemisphere have shown willingness to provide a legal environment favourable to economic productivity, notably through the reduction of liability of these companies for the adverse impact that their activities may generate.4 The influence of TNCs is so broad that many governments appear unable to constrain their operations. Indeed, in many developing countries, the legal mechanisms necessary to ensure that multinational enterprises’ supply chains comply with the laws that protect individuals from harm are often weak or simply nonexistent. This has resulted in instances of abuse in various countries, affecting thousands of victims around the world, notably as a result of the violation of labour law norms.5 When a tort arises as a result of the activities of a TNC’s subsidiary in a developing country, victims are often confronted with two main issues. First, the wrongdoer (the subsidiary) often does not have enough capital resources to pay for the damages, whereas the Western parent company (the head of the supply chain) does.6 Second, taking legal action in the host country where the wrong occurred does not offer much chance of success, as these host states are often crippled with inadequate and/or unfair justice systems. The difficulties faced when seeking justice in these countries can also be explained by the inefficiency or corruption plaguing the judicial systems of some countries which make it practically impossible to present a claim.7 Moreover, courts in these countries often do not have the capacity or resources to undertake lengthy and costly dispute resolution processes. Therefore, the victims of transnational businesses’ violations of international human rights norms are regularly left without an appropriate remedy before their home courts. 4 UNCTAD, Trade and Development Report 2016, p. 12, available at . 5 One of the most famous of these scandals is the Rana Plaza clothing factory collapse, which occurred on April 24th 2013, in Bangladesh, killing more than 1100 people and injuring 3000 others. See: . 6 AMNESTY INTERNATIONAL, Universal Jurisdiction: The Duty Of States To Enact And Enforce Legislation, Introduction, 2001, p. 17 available at ; J.E. STIGLITZ, Regulating Multinational Corporations: Towards Principles of Cross- Border Legal Frameworks in a Globalized World Balancing Rights with Responsibilities, 23(3) American University International Law Review 2007, p. 474. 7 See e.g. K. MACDONALD, The Reality of Rights: Barriers to Accessing Remedies When Business Operates Beyond Borders, Corporate Responsibility Coalition & London School of Economics and Political Science 2009, available at: ; G. L. SKINNER, Beyond Kiobel: Providing Access to Judicial Remedies for Violations of International Human Rights Norms By Transnational Business in A New (Post-Kiobel) World, Columbia Human Rights Law Review 2014, p. 169-173 (discussing the failings of host countries in holding TNCs accountable for their wrongs). Also see J.A. KIRSHNER, Why is the U.S. Abdicating the Policing of Multinational Corporations to Europe? – Extraterritoriality, Sovereignty, and the Alien Tort Statute, 30 Berkeley Journal of International Law 2012, p. 266-267 (explaining that many host countries often lack functioning systems or may not have sufficient resources to bring multinationals to justice).

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims The remaining hope for victims lies in the filing of a claim against the Western company at the top of the supply chain before the courts where this company is headquartered. In this sense, Western courts represent the sole forum for these victims to seek justice. As a consequence, private international law rules of Western tribunals, contrary to their original purpose to remain neutral and to ensure legal security, can constitute a tool to reduce the initial inequality of arms that exists between transnational corporations and individual victims of corporate wrongs. Robert Wai even argues that private international law rules must play a regulatory function to ensure access to justice to victims of corporate wrongs abroad.8 Ensuring access to an effective judicial remedy to victims lies at the core of the third pillar of the United Nations Guiding Principles on business and human rights (UNGPs). Principle 26 of the UNGPs outlines the duty of states to ensure the effectiveness of their judicial mechanisms and remove barriers that could lead to a denial of access to justice.9 The commentary to this Principle provides: “Legal barriers that can prevent legitimate cases involving business-related human rights abuse from being addressed can arise where, for example: (…) claimants face a denial of justice in a host State [where the harmful event has occurred] and cannot access home State courts [where the company-defendant is domiciled] regardless of the merits of the claim.”10 TNCs thus present a challenge to elaborate liability systems that can ensure that these companies and their global value chains comply with fundamental labour or environmental rules, no matter where they operate.11 Extraterritoriality, a legal doctrine that allows judicial systems to exercise authority outside the national jurisdiction of the courts, has thus become a useful tool for countering the accountability gap that globalization has caused.12 Indeed, extraterritorial jurisdiction can contribute to hold these corporate actors accountable in situations where R. WAI, Transnational Lift-Off and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization, 40(2) Columbia Journal of Transnational Law 2002, p. 274. 9 Guiding Principle 26 states as follows: “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.” 10 UN Doc. A/HRC/17/31, 21 March 2011, Commentary on Guiding Principle 26. 11 See for example O. DE SCHUTTER, Extraterritorial Jurisdiction as a Tool for Improving the Human Rights Accountability of Transnational Corporations, 40 Business and Human Rights Resource Centre November 2006, p. 5 available at ; M. A DDO, Human Rights and Transnational Corporations – an Introduction, in Human Rights Standards and The Responsibility of Transnational Corporations, Alphen aan den Rijn 1999, p. 11. 12 See for example O . DE SCHUTTER, Extraterritorial Jurisdiction as a Tool for Improving the Human Rights Accountability of Transnational Corporations, 40 Business and Human Rights Resource Centre November 2006, available at . 8

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Adeline Michoud they try to escape their liabilities by establishing their activities in countries with weak governance systems.13 Victims of business-related human rights abuses have increasingly been seeking remedies in the domestic legal systems where Western parent companies are incorporated.14 In this regard, the United States is the first country that started addressing such extraterritorial claims, through the application of the Alien Tort Statute (ATS), which grants jurisdiction to the U.S. Federal courts for civil actions brought by foreigners for the torts “committed in violation of the law of Nations or of a treaty of the United States”.15 Until the recent U.S. Supreme Court Kiobel decision,16 courts in the U.S. interpreted the ATS as affording rather extensive jurisdictional power to U.S. federal courts, allowing foreign claimants to seek redress before U.S. courts, even if the harm that they suffered had taken place outside of the United States and the defendant had only remote links with the United States. As a result, U.S. federal courts were entitled to sanction international law infringements occurring abroad. This approach was based on the idea that access to courts should be allowed to avoid a denial of justice and ensure the application of peremptory norms of international law.17 The invocation of a breach of a peremptory norm of international law has therefore long been a motive of intervention for U.S. courts.18 One main argument justifying this type of intervention relates to the fact that equal human rights standards should apply to activities led by Western companies, even when these activities are performed abroad.19 However, since the ruling of the U.S. Supreme Court in the Kiobel case, which posed the principle of the presumption against extraterritoriality, questions have begun to be raised as to the possibility for foreign claimants to have their Ibid., p. 2-7. Also see M. RAHMANI, Exploring Extraterritoriality In Business And Human Rights, Summary Note Of Expert Meeting September 14 2010, p. 3, available at . 14 J-J. ALVAREZ-RUBIO/ K. YIANNIBAS, Human Rights in Business: Removal of Barriers to Access to Justice in the European Union, London 2017, p. 16. 15 Under 28 U.S.C. § 1350. 16 727 F.3d 174 (2013). 17 See for example L. CATÁ-BACKER, Multinational Corporations as Objects and Sources of Transnational Regulation, International law Students Association, 14 Journal of International and Comparative Law 2008, p. 505-507; N. SACHS, Beyond the Liability Wall: Strengthening Tort Remedies in International Environmental Law, 55 UCLA Law Review 2008, p. 837 et seq.; S.R. RATNER, Corporations and Human Rights: A Theory of Legal Responsibility, 111 Yale Law Journal 2001, p. 443 et seq. 18 See for example C.B. ANDERSON, Damage to Natural Resource and the Costs of Restoration, 72 Tulane Law Review 1997, p. 424-425. 19 See P.T. MUCHLINSKI, Corporate Social Responsibility and International Law: The Case of Human Rights and Multinational Enterprises, in D. MCBARNET/ A. VOICULESCU/ T . CAMPBELL (eds.), The New Corporate Accountability: Corporate Social Responsibility and the Law, Cambridge 2007, p. 457, citing the Trafigura litigation: “[a] British company should act in Abidjan in exactly the same way as they would act in Abergavenny”. 13

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims claims heard for corporate abuses taking place abroad. This presumption against territoriality was recently reinforced by the Jesner case, which confirmed U.S. federal courts’ reluctance to exercise their jurisdiction over such matters.20 This article shall thus be dedicated to the exercise of extraterritorial jurisdiction by U.S. courts over cases of corporate abuses abroad, amounting to the violation of international human rights (notably labour and environmental rights). First, we shall study the historical interpretation made by U.S. courts of the Alien Tort Statute, entitling them to exercise their jurisdiction over cases involving violations of international human rights abroad. Then, we shall analyse the limitation posed by the U.S. Supreme Court in the Kiobel case relating to the exercise of extraterritorial jurisdiction. Finally, we shall discuss the recent decision of the U.S. Supreme Court in the 2018 Jesner case and its impact on the access to justice for victims of corporate wrongs abroad.

II.

The U.S. Alien Tort Statute's Interpretation: A Forerunning System

Two main legal texts have expressly recognized the possibility for U.S. courts to address cases involving extraterritorial wrongs. First, Article III (2) of the U.S. Constitution defines the jurisdiction of the federal courts as follows: “The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority; (…) between a state and citizens of another state; between citizens of different states; (…) between a state, or the citizens thereof, and foreign states, citizens or subjects.” The second legal instrument on which U.S. courts have mostly relied to determine their extraterritorial jurisdiction is the Alien Tort Statute (ATS).21 Today codified under 28 U.S.C. § 1350, the ATS is a jurisdictional statute deemed to allow non-American nationals to bring claims in the United States for torts committed in violation of the law of nations.22 Indeed, the ATS provides: “The Federal District Courts will have the power to try in first instance any action formulated by a foreigner regarding a tort liability for an act committed in violation of the laws of nations or of a treaty in which the U.S. are a party.” Therefore, an ATS-lawsuit against a natural or legal person can in theory be based on any harm resulting from a violation of international law, no matter where the harm occurred or who is the wrongdoer, as long as the plaintiff invokes a violation of an international norm or

Jesner v. Arab Bank, PLC, 584 U.S. (2018). F. GÓMEZ ISA/ K . DE FEYTER (eds.), International Human Rights Law in a Global Context 2009, p. 21, available at: < http://www.deusto-publicaciones.es/deusto/ pdfs/hnet/hnet26.pdf >. 22 C. KOSTER, Die völkerrechtliche Verantwortlichkeit privater (multinationaler) Unternehmen für Menschenrechtsverletzungen (2010), p. 49. 20 21

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Adeline Michoud the law of nations.23 The law of nations can be understood as core values of international law and human rights.24 The ATS was thus thought to award a very extensive jurisdiction power to the U.S. courts, allowing foreign claimants to seek redress, even if the harm that they have suffered took place outside of the United States and even if the defendant had remote links with the United States. Enacted in 1789 with little application at the beginning of its enactment, the original purpose of the ATS seemed to have been to assure other governments that foreign diplomats and merchants living in the United States would have access to legal remedies.25 The Act remained largely unused following its adoption.26 It is finally in the 1980s that the Act was “rediscovered” by human rights activists who understood its potential for corporate human rights cases. The Act thus constituted an efficient mean to hold corporations accountable and to provide foreign victims the opportunity to obtain reparation in a forum other than the one of their country of origin, which might be compromised by poor functioning or corruption.27 Initially, the ATS was mainly used as a basis for civil claims against individual perpetrators of international human rights violations or international crimes, like in the case of Kadic v Karadzic.28 One of the first modern cases to be heard in the U.S. on the basis of the jurisdiction granted by the ATS was Filartiga

C. KOSTER, Die völkerrechtliche Verantwortlichkeit privater (multinationaler) Unternehmen für Menschenrechtsverletzungen (2010), p. 50; A.J. BELLIA/ B.R. CLARK, The Alien Tort Statute and the law of nations, 78(2) University of Chicago Law Review 2011, p. 445 et seq. 24 S. RATNER, The thin justice of international law – a moral reckoning of the law of nations, Oxford 2015, p. 73; J.L. BRIERLY, The Law of Nations, Oxford 1963, p. 2. 23

G.C. HUFBAUER/ N.K. MITROKOSTAS, International Implications of the Alien Tort Statute, 16 Saint Thomas Law Review 2004, p. 609. This view, further described in C.A. BRADLEY, The Alien Tort Statute and Article III, 42 Virginia Journal of International Law 2002, p. 588; but see W.R. CASTO, The Federal Courts Protective Jurisdiction Over Torts Committed in Violation of the Law of Nations, 18 Connecticut Law Review 1986, p. 490-493; W . S . DODGE, The Historical Origins of the Alien Tort Statute: A Response to the Originalists, 19 Hastings International and Comparative Law Review 1996, p. 234. 26 The ATS was used in Adra v. Clift 195 F. Supp 857, and in Bolchos v. Darell, 3 Fed.Cas. 810 in (1795). See generally: M-J. VAN DER HEIJDEN, Transnational corporations and human rights liabilities – linking standards of international public law to national civil litigation procedures, Cambridge 2012, p. 53; C. HAILER, Menschenrechte vor Zivilgerichten – die human rights litigation in den USA (2006), p. 35. 27 O. AMAO, Corporate social responsibility, human rights and the law: multinational corporations in developing countries, Routledge Research in Corporate Law, Abingdon 2011, p. 251. See generally S. COLLIVER et al., Holding human rights violators accountable by using international law in U.S. courts: advocacy efforts and complementary strategies, 19 Emory International Law Review 2005, p. 169 et seq.; J-J. ALVAREZ RUBIO/ K. YIANNIBAS, Human Rights in Business: Removal of Barriers to Access to Justice in the European Union, Abingdon 2017, p. 53. 28 Kadic v. Karadzic, 70 F.3d 232, 239 (2d Cir. 1995). 25

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims v. Pena-Irala in 1980.29 In this case, Mr. Filartiga, a Paraguayan citizen, filed a complaint against a former Paraguayan police officer, Americo Pena-Irala, for torturing and killing his son during his imprisonment. Mr. Filartiga, who was a notorious opponent of the Paraguayan regime, claimed that his son had been killed because of his opposition to the political regime.30 The Court of Appeals for the Second Circuit, after initially dismissing the case at first instance, considered that international law expressly prohibited torture and therefore held that the case could be heard in the United States.31 The court found torture to be a violation of the law of nations, citing the Universal Declaration of Human Rights and other UN instruments, considering the claim to be actionable under the statute.32 Therefore, the jurisdiction of U.S. courts was justified because there was a breach of peremptory norms of international law.33 At the time of the case, the prohibition of torture had become part of established international law, as defined by the Universal Declaration of Human Rights, the Declaration on the Protection of All Persons from Being Subjected to Torture and several other treaties establishing the universal prohibition of torture.34 The (federal) Second Circuit Court thus recognized that it had jurisdiction to hear this case, as this jurisdiction fulfilled the “ageless dream to free all people from brutal violence.”35 The Filartiga decision was acclaimed as one of the most significant domestic cases of the century dealing with international law.36 The court was celebrated as one “educated in modern international law which recognized its constitutional authority and responsibility to apply international law in the appropriate cases.”37 The recognition of international law as a part of national law constituted a justification for the activist role that the court had accepted to endorse.38 29 Filartiga v. Pena-Irala, 630 F. 2d 876 (2nd Cir. 1980). See also A. FELDBERG, Der Alien Tort Claims Act: Darstellung und Analyse unter besonderer Berücksichtigung der Auswirkungen auf und Risiken für die deutsche Wirtschaft, Berlin 2008, p.14. 30 630 F. 2d 876, para. 878. 31 M. DANAHER, Torture as a tort in violation of international law: Filartiga v. Pena-Irala, 33 Stanford Law Review 1981, p. 353 et seq. 32 Filartiga v. Pena-Irala, 630 F. 2d 876 (2nd Cir. 1980), para. 879-883. 33 Ibid., para. 887. See also A. FELDBERG, Der Alien Tort Claims Act: Darstellung und Analyse unter besonderer Berücksichtigung der Auswirkungen auf und Risiken für die deutsche Wirtschaft, Berlin 2008, p. 9. 34 Filartiga v. Pena-Irala, 630 F. 2d 876 (2nd Cir. 1980), para. 883.

Ibid, para. 890. J. LOUDEN, The domestic application of international human rights law: evolving the species, 5 Hastings International Comparative Law Review 1981 p. 177. 37 K. BURKE/ S. COLIVER/ C. DE LA VEGA/ S. ROSENBAUM, Application of international human rights law in state and federal courts, 18 Texas International Law Journal 1983, p. 321. 38 K. HOLT, Filartiga v. Pena-Irala after ten years: major breakthrough or legal oddity?, 20 Georgia Journal of International and Comparative Law 1990, p. 547. See generally S. SCHNEEBAUM, Human rights in the federal courts: a review of recent cases, 44 University of Pittsburgh Law Review 1983, p. 287 et seq. 35 36

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Adeline Michoud Jefferey Blum and Ralph Steinhardt interpret the decision of the judges in Filartiga as a way to dissuade torturers and other human rights violators to seek refuge in the United States for fear of being sued by their former victims under the ATS.39 According to them, the underlying idea is that “the U.S. shall not represent a safe haven for human rights violators.”40 However, the use of non-binding international law instruments as authoritative instruments by the courts has also been heavily criticized.41 Indeed, it has been argued that international law could not be held to be applicable unless the national authorities intended it to have direct effect when they adopted the international norm.42 The members of the Supreme Court were thus accused of having exceeded their functions43 and to have generated an undesirable extension of human rights obligations.44 Despite the criticism, the Filartiga case articulated a new role for the domestic courts of the United States when applying international law,45 as it transformed the ATS into a tool to remedy human rights violations committed abroad.46 In the years following Filartiga, claimants increasingly invoked the ATS as the basis of their claims to seek compensation for human rights abuses committed abroad, either by foreign government officials or by multinational corporations for their role in “aiding and abetting” human rights violations committed by foreign governments.47 However, over time, the Supreme Court started imposing conditions on the exercise of extraterritorial jurisdiction. First, in the Sosa v. Alvarez-Machain case,48 the Supreme Court established that only widely recognized and established norms J. BLUM/ R. STEINHARDT, Federal jurisdiction over international human rights claims: The Alien Tort Claims Act after Filartiga v. Pena-Irala, 22 (1) Harvard International Law Journal 1981, p. 113. 40 K. HOLT, Filartiga v. Pena-Irala after ten years: major breakthrough or legal oddity?, 20 Georgia Journal of International and Comparative Law 1990, p. 549. 41 28 U.S.C. 1350: A Legal Remedy for Torture in Paraguay? Case Comment, 69 Georgetown Law Journal 1981, p. 845. 42 K. HOLT, Filartiga v. Pena-Irala after ten years: major breakthrough or legal oddity?, 20 Georgia Journal of International and Comparative Law 1990, p. 550. 39

43 C.T. OLIVER, A brief replication: the big picture and Mr. Schneebaum’s reply, 5 Houston Journal of International Law 1982, p. 152. 44 F. HASSAN, International human rights and the Alien Tort Statute: past and future, 5 Houston Journal of International Law 1982, p. 137. 45 J. BLUM/ R. STEINHARDT, Federal jurisdiction over international human rights claims: the Alien Tort Claims Act after Filartiga v. Pena-Irala, 22(1) Harvard International Law Journal 1981, p. 112. 46 See, for example M.A. VEGA, Balancing Judicial Cognizance and Caution: Whether Transnational Corporations Are Liable for Foreign Bribery Under the Alien Tort Statute, 31 Michigan Journal of International Law 2010, p. 388. 47 L.F.H. ENNEKING, Foreign Direct Liability and beyond. Exploring the role of tort law in promoting international corporate social responsibility and accountability, The Hague 2012, p. 77–83. 48 Sosa v. Alvarez-Machain, 124 S. Ct. 2739 (2004).

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims of international law could be enforced and protected by U.S. courts.49 Later, in the Goodyear v. Brown50 case, relating to U.S. courts’ jurisdiction in a case seeking justice for the wrongs committed abroad by a foreign subsidiary of a U.S. company, the Supreme Court held that only a very close relationship between the subsidiary and the parent company could create a nexus between the case and the United States and thus justify U.S. courts’ jurisdiction.51 In this case, the Court considered that the corporate relationship between the U.S. parent company and the foreign subsidiary was not strong enough to establish jurisdiction in the United States. Throughout time, the Supreme Court continued to restrict the application of the ATS to a limited number of international law violations. These violations include genocide and crimes against humanity,52 acts of torture,53 war crimes,54 forced labour,55 forced disappearance56 as well as cruel, inhuman and degrading treatment.57 The U.S. Courts have adopted quite a strict approach to admit the infringement of one of these core rights, as illustrated in the Doe v. Exxon Mobil Corp. case.58 In this case, the claimants sued Exxon for its extraction and processing activities in Indonesia during the war between the Indonesian Government and some rebel groups.59 Due to the violence, Exxon hired a unit of the Indonesian military for security purposes, giving them logistical support and providing them facilities such as training instructors and campsites.60 The defendants argued that Exxon was liable for aiding and abetting the Indonesian army for the violations of international law, as the security forces allegedly committed acts of genocide, crimes against humanity and torture.61 The District Court analysed the case in light of the outcome of Sosa. The District Court dismissed the plaintiffs’ claim for aiding and abetting the alleged violations of international law, finding that this theory was not actionable under the ATS.62 The District Court explained that allowing these claims would amount to expanding actionable claims under the ATS, whereas the Sosa case law had expressly ruled against such an expansion.63 Ibid, p. 38-39. Goodyear Dunlop Tires Operations S.A. v Brown, 131 S Ct 2846 (2011). 51 Ibid., para. 754. 52 Kadic v. Karadzic, 70 F. 3d 232 (2d Cir. 1995). 49 50

Hilao v. Estate of Marcos, 103 F.3d 789 (9th Cir. 1996). Doe I v. Islamic Salvation Front, 993 F. Supp. 3 (D.D.C. 1998). 55 Doe I v. Unocal Corp., 963 F. Supp 880 (C.D. Cal. 1997). 56 Forti v. Suarez-Mazon, 672 F. Supp. 1531 (N.D. Cal. 1987). 57 Xuncax v. Gramajo, 88F. Supp. 162 (D. Mass. 1995). 58 393 F. Supp. 2d 20 (D.D. C.2005). 53 54

Doe v. Exxon Mobil Corp., 393 F. Supp. 2d 20 (2005). Ibid., para. 22. 61 J. GOODWIN/ A. ROSENCRANZ, Holding oil companies liable for human rights violations in a post-Sosa world, 42 New England Law Review 2007-2008, p. 723. 62 Ibid., p. 725. 63 Doe v. Exxon Mobil Corp., 393 F. Supp. 2d 20 (2005), para. 26. See also M. VAN DER HEIJDEN, Transnational corporations and human rights liabilities-linking 59 60

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Adeline Michoud Moreover, the Court invoked the fact that international law liability did not involve corporations.64 Finally, the Court held that allowing such a claim would interfere with the domestic policies of Indonesia, which could amount to problems for the foreign policy of the United States.65 The courts adopted a similar line of reasoning in Bowoto v. Chevron Corp.66 The Bowoto case arose out of the oil exploitation activities of Chevron in Nigeria, where the company hired Nigerian government security forces to protect its sites of exploitation. The plaintiffs alleged that following a protest by local people against their activities, Chevron enlisted Nigerian government forces to regain control of the area where the protests were taking place.67 During their intervention, security forces killed two people and injured several others. The District Court stated that private parties could be held liable for serious violations of fundamental international law norms.68 The plaintiffs alleged that Chevron had aided and abetted the Nigerian government security forces in their commission of crimes under international law. However, the Chevron corporation argued that customary international law did not allow sanctions to be imposed on private persons for aiding and abetting liability.69 The Court rejected Chevron’s arguments, stating that several courts had recognized aiding and abetting liability since the Sosa case law.70 Nevertheless, the Court held that crimes against humanity invoked by the claimants (here the killing of a civilian population) had not been committed in a widespread or systematic manner, contrary to the conditions required by international law.71 Over time, the ATS has allowed U.S. courts to exercise extraterritorial jurisdiction and enabled the adjudication of claims concerning the adverse impacts of TNCs’ activities provoked by violations of core principles of international law.72 standards of international public law to national civil litigation procedures, Cambridge 2012, p. 72. 64 Doe v. Exxon Mobil Corp., 393 F. Supp. 2d 20 (2005), para. 26, citing Sosa: “A related consideration is whether international law extends the scope of liability of a given norm to the perpetrator being sued, if the defendant is a private actor, such as a corporation or individual”, 542 U.S., para. 732. 65 Ibid., para. 26. 66 557 F.Supp.2d 1080 (2008). 67 J. GOODWIN/ A. ROSENCRANZ, Holding oil companies liable for human rights violations in a post-Sosa world, 42 New England Law Review 2007-2008, p. 733. 68 Bowoto v Chevron Texaco, No. C 99-2506 SI, 2004 US Dis LEXIS 4603 (ND, Cal 2004), para. 2. 69 WL 2455752 (ND, Cal 2006), paras. 3 and 8. 70 WL 2455752 (ND, Cal 2006), para. 5. 71 WL 2349343 (ND, Cal 2007), para. 9–10. M. HRISTOVA, The Alien Tort Statute: A Vehicle for Implementing the United Nations Guiding Principles for Business and Human Rights and Promoting Corporate Social Responsibility, 47 University of San Francisco Law Review 2012, p. 89. For a discussion on pre-Kiobel trends in ATS litigation, see J.C. DRIMMER / S.R. LAMOREE, Think Globally, Sue Locally: Trends and Out-of-Court Tactics in Transnational Tort Actions, 29 Berkeley Journal of International Law 2011, p. 461. 72

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims The U.S. thus assumed a certain leadership role in human rights litigation, as the ATS provided a mechanism to bring foreign claims before U.S. courts. However, initial enthusiasm for the application of the ATS to provide an access to justice to victims of corporate abuses abroad has been revised in light of recent case law.

III. The Presumption against Territoriality Established by the Kiobel Case For several decades, the United States has acted as the global leader in imposing accountability on multinational corporations in the area of human rights. Recently, however, in the Kiobel case,73 U.S. courts have declined jurisdiction to hear a claim involving TNCs’ extraterritorial abuses. Kiobel v. Royal Dutch Petroleum is a landmark decision as it considerably altered the way U.S. courts adjudicate ATS cases and has announced the beginning of a certain reluctance from U.S courts to recognise their jurisdiction for cases involving corporate wrongs occurring abroad. The Kiobel case was brought on behalf of inhabitants of the Ogoni region of Nigeria against Royal Dutch Petroleum, an Anglo-Dutch company. The case began life as a class action suit presented by Esther Kiobel, widow of Ogoni protest leader, Mr. Kiobel, and several other Nigerian protesters under the Alien Tort Statute. Royal Dutch Petroleum was accused of having hired military forces who had shot and killed several individuals who had been protesting against the oil exploitation in their region.74 In this case, the claimants alleged that Royal Dutch Petroleum aided and abetted the Nigerian government in the extrajudicial killings, torture, cruel and degrading treatment, arbitrary arrest and detention as well as crimes against humanity and the violation of the right to life, liberty and security. The Court of Appeals had held that there was insufficient evidence to prove abuses relating to extrajudicial killings and violation of the right to life, as these notions are not well-defined enough in international law to meet the requirement established in the Sosa case, according to which international law breaches must be universal, specific and obligatory in order for a claim to be admissible before U.S. courts.75 As for the accusations relating to crimes against humanity, torture, arbitrary arrest and detention, the Court of Appeals for the Second Circuit held that Royal Dutch Petroleum could not be held responsible for the alleged conduct in Nigeria because they were not subject to human rights liability under customary international law: “Our recognition of a norm of liability as a matter of domestic law, therefore, cannot create a norm of customary international law. In other words, the fact that corporations are liable as juridical persons under domestic law does not mean that they are liable under international law (and, therefore, under the ATS). Moreover, the fact that a legal norm is found in most or even all ‘civilized 73 74 75

Kiobel v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010). Ibid., para. 123. Ibid., pp. 11–21.

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Adeline Michoud nations’ does not make that norm a part of customary international law (...) We must conclude, therefore, that insofar as plaintiffs bring claims under the ATS against corporations, plaintiffs fail to allege violations of the law of Nations, and plaintiffs’ claims fall outside the limited jurisdiction provided by the ATS.”76 Therefore, the Court of Appeals considered that corporations, since they do not have obligations under international law, cannot be subject to any liability under international human rights law. Following this reasoning of the Court, corporate liability is not a universally accepted rule of international law and therefore the case had to be dismissed because no breach of a general peremptory norm of international law had been committed: “imposing liability on corporations for violations of customary international law has not attained a discernible, much less universal, acceptance among nations of the world in their relations inter se. Because corporate liability is not recognized as a ‘specific, universal, and obligatory’ norm (…), it is not a rule of customary international law that we may apply under the ATS. Accordingly, insofar as plaintiffs in this action seek to hold only corporations liable for their conduct in Nigeria (as opposed to individuals within those corporations), and only under the ATS, their claims must be dismissed for lack of subject matter jurisdiction.”77 The Court of Appeals thus concluded: “Provisions imposing corporate liability in some recent specialized treaties have not established corporate liability as a norm of customary international law”78 and further explained: “One cannot discern, neither from tribunals nor from treaty sources, that there exists a compelling international norm that would place upon corporations the duty to respect human rights. As a consequence, corporate liability for human rights violations is a public opinion and desire but has not yet evolved into a legal concept firm enough to withstand the requirements in Sosa, namely being specific, universal and obligatory”.79 Faced with this dismissal of their claim, the plaintiffs appealed before the U.S. Supreme Court. In 2013, the U.S. Supreme Court rendered its decision.80 It did not address the question of whether international law recognizes corporate liability for human rights breaches. The U.S. Supreme Court focused on the extraterritorial application of the ATS and held that the Act would only apply to conduct occurring within the United States’ territory or on the high seas. The U.S. Supreme Court thus considered that the ATS did not establish jurisdiction for claims regarding conduct which occurred in the territory of another foreign state. As Justice Breyer held: “Adjudicating any such claim must (…) also be consistent with those notions of comity that lead each nation to respect the sovereign rights of other nations by limiting the reach of its own laws and their enforcement.”81

Kiobel v. Royal Dutch Petroleum, 621 F.3d 111 (2d Cir. 2010), para.119. Kiobel v. Royal Dutch Petroleum, 621 F.3d, para. 132. 78 Ibid., para. 139. 79 Ibid., para. 140. 76 77

80 81

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133 S.Ct. 1659 (2013). Ibid., para. 761.

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims Therefore, the notion of comity, that is, the consideration for other nations’ policies and the foreign relations of the United States with other governments played an important role in this decision.82 According to the U.S. Supreme Court, comity concerns “the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.”83 Therefore, under comity, courts have the discretion to decline to exercise their jurisdiction in order to respect the sovereignty of other countries.84 The U.S. Supreme Court has thus posed a presumption against extraterritoriality, which means that the laws of the United States should be interpreted as only applicable to domestic concerns.85 As stated by the Supreme Court: “There is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms.”86 The underlying idea of this judgment was therefore that the United States should not be the world’s human rights watchdog. The U.S. Supreme Court thus considered that the presumption against extraterritoriality can only be overcome if the claim “touches and concerns” the United States with sufficient force. In their concurring opinion, the Justices explained that US courts could have jurisdiction under the ATS if one of the three following conditions were met: (1) the “alleged tort occurs on American soil (which amounts to the principle of territoriality); (2) the defendant is an American national (this is the principle of nationality); 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 harbour (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.”87 Therefore, the ATS could in theory apply to cases where the interests of the U.S. are at stake, as long as there is a sufficient nexus with the U.S, that is, if the “touch and concern” test is fulfilled. The problem raised by the Kiobel case is that no clear definition of what could be concerning enough American interests has been clearly provided. Therefore, this leaves much uncertainty as to what can be

82 For more details on the role of comity: T. SCHULTZ/ N. RIDI, Comity in U.S. Courts, 10(1) Northeastern University Law Review 2018, p. 281 et seq.; T.K.P. SCHULTZ/ N. RIDI, Comity and International Courts and Tribunals, 50 (3) Cornell International Law Journal 2018, p. 577 et seq. 83 Hilton v. Guyot, 159 US 113, 143 (1895). 84 For more on the doctrine of comity see B. STEPHENS/ J. CHOMSK/ J. GREEN/ P. HOFFMAN/ M. RATNER (eds.) International Human Rights Litigation in US Courts, Leiden 2008, p. 354 et. seq. 85 See also Morrison v. National Australia Bank Ltd., 561 U. S. 247 (2010). See also S. CLEVELAND, The Kiobel presumption and extraterritoriality, commentary on Kiobel v Royal Dutch Petroleum, 52 Columbia Journal of Transnational Law 2013, p. 11. 86 133 S.Ct. 1659 (2013), p.12, Opinion of the Court. 87 133 S.Ct. 1659 (2013), p.7.

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Adeline Michoud accepted as a case involving an American interest.88 Whether the ATS can be relied upon as a basis to find parent companies liable for tortious acts committed outside the United States is therefore uncertain following this case law.

IV.

The Jesner Case: A Further Blow to the Extraterritorial Jurisdiction of U.S. Courts

The possibility of relying upon ATS in tort litigations for extraterritorial corporate human rights abuses having been limited by the Kiobel decision,89 we shall now study what has been the impact of this decision and the subsequent case law. One illustrative case is Daimler AG v. Bauman.90 This case concerned an allegation that Daimler’s Argentinian subsidiary, Mercedes-Benz Argentina, had collaborated with the Argentinian security forces to detain, torture, and kill a number of Argentinian workers. The link with the United States was based on the fact that Daimler’s vehicles were sold in the U.S., notably in California. However, the Supreme Court held that neither Daimler nor its subsidiary were incorporated or had their principal place of business in California. Neither the parent company nor the subsidiary which had committed the alleged wrongs were domiciled in the U.S., nor did they have principal place of business on the American territory. The main criteria that the court considered were the place of incorporation and the principal place of business of the companies. The “touch and concern” test was not met as there was too slim a nexus between the case and the U.S.. Jurisdiction of U.S. courts was thus denied. The Court refused to consider the fact that a company’s contacts with a third state are “so substantial and of such a nature” that they “render the company at home in the State.”91 Several other decisions have been rendered since the Kiobel case on the question of extraterritoriality in the United States. In Balintulo v. Daimler,92 the claim stated that U.S. companies aided and abetted the apartheid regime of South Africa. Claimants invoked that defendants had engaged in workplace discrimination that enhanced apartheid, assisting security forces in identifying and torturing anti-apartheid leaders. In this case, all of the human rights violations took place in South Africa. None of those acts occurred on the U.S. territory and therefore the U.S. parent corporations could not be vicariously liable for that conduct under the 88 J.R-M. WETZEL, Human Rights in Transnational Business, Berlin 2015, p. 70; See also M.C. MARULLO/ F.J. ZAMORA CABOT, Transnational Human Rights Litigations. Kiobel’s Touch and Concern: A Test Under Construction, April 2016, available at < https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2765068>. 89 H. VAN LOON, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, 23 Uniform Law Review 2018, p. 306. 90 Daimler AG v. Bauman, no. 11-965, 571 US (2014). 91 Ibid, para. 761. 92 727 F.3d 174 (2013).

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims ATS. Therefore, the Federal Second Circuit Court denied its jurisdiction. A similar approach was then adopted by the federal Eleventh Circuit Court in Cardona v. Chiquita Brands.93 The Supreme Court has also had to recently address claims relating to the presumption against extraterritoriality. In RJR Nabisco v. European Community94 European Union’s Member States brought a claim against RJR Nabisco, accusing the company of cigarette smuggling and tax evasion. At this occasion, the Supreme Court held that when determining whether a statute applies for facts that have occurred both inside and outside of the United States’ territory, courts should examine where the conduct that is the “focus” of the claim occurred:95 “[to] determine whether the case involves a domestic application of the statute… we... look at the statute’s ‘focus.’” If the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application ... but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.”96 The same approach was relied upon by another federal court, namely the Central District Court of California in the Doe I v. Nestlé USA Inc case.97 In this case, allegations of forced child labour on cocoa plantations in Côte d’Ivoire were presented against Nestlé.98 The claimants accused Nestlé of having had knowledge of these workings conditions, which according to them, amounted to being complicit in forced child labour and breaches of international law. After several appeals before different courts,99 the case was finally presented before the Central District of California, which held that the plaintiffs’ claims did not “touch and concern” the United States with sufficient force to rebut the presumption against extraterritorial application of the ATS set forth in Kiobel. Judge Wilson considered that the defendants’ alleged conduct in the United States constituted ordinary business operations and did not involve the planning and direction of child slave labour, and therefore did not constitute a violation of the law of nations. Moreover, the Court considered that the fact the defendants had a general corporate supervision over 93

760 F.3D 1185 (2014).

579 S.C. (2016). A similar test had been adopted before Kiobel, notably in the 2010 Morrison v. National Australia Bank Ltd decision. Lower courts following Kiobel had also considered that the focus test should apply, such as the Second and Eleventh Circuits in Mastafa v. Chevron Corp. and Doe v. Drummond. 96 RJR Nabisco v. European Community, 579 S.C. (2016), para. 2101. 97 Doe I v. Nestlé USA Inc., no. 15-01364-CJC (C.D.Cal.2015). 94 95

For detailed articles on the case, see L.E. WILKINSON, Piercing the Chocolate Veil: Ninth Circuit Allows Child Cocoa Slaves To Sue under the Alien Tort Statute in Doe I v. Nestle USA, 62 Villanova Law Review Online 2018, p. 20 et seq. Read also: S.S. BEALE, The Trafficking Victim Protection Act: The Best Hope for International Human Rights Litigation in the U.S. Courts, 50 Case Western Reserve Journal of International Law 2018, p. 17 et seq. 99 For a chronological and detailed account of Doe I v. Nestlé, consult the website of the Business and Human Rights Resource Centre, available at: . 98

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Adeline Michoud subsidiaries in the Côte d’Ivoire did not touch and concern the U.S. with sufficient force. This reluctance of federal courts to hear extraterritorial claims was also illustrated in the Doe v. Cisco case.100 In this case, the claimants, Chinese dissidents, argued that Cisco Systems (a California-based technology provider), sold a system to the Chinese authorities to enable them to monitor the activities of the dissidents and ultimately to subject them to torture in prisons. The claimants thus accused Cisco System and its CEO of having aided and abetted their arbitrary detention and torture. The Ninth District Court dismissed their case on the basis that the human rights abuses committed against the plaintiffs occurred in China and that any conduct by Cisco did not sufficiently touch and concern the United States to overcome Kiobel’s presumption against extraterritoriality. Although the Supreme Court’s decision in RJR Nabisco v. European Community appeared to mandate that the focus test should be applied in all cases relating to the ATS, the application of the “focus” test has recently been put into doubt by the Adhikari v. Kellogg Brown & Root case. In this case, the claimants accused a U.S. defence contractor of human trafficking in Nepal, Jordan and Iraq. The plaintiffs claimed that the trafficking was conducted by paid agents of the Kellogg Brown & Root company, who had issued orders and directed their actions from the United States. The Fifth Circuit,101 applying the 2013 U.S. Supreme Court’s decision in Kiobel, held that the presumption against extraterritorial application of a statute bars claims under the ATS for injuries occurring abroad. However, the plaintiffs filed a petition in June 2017 before the Supreme Court, arguing that another test, developed by the Fourth Circuit’s court in the case of Al-Shimari,102 should be applied to consider a “broader range of facts” to grant jurisdiction to U.S. courts. The plaintiffs argued that the test to determine whether the ATS applies should not only focus on the location where the alleged violations of international law took place. However, in 2018, the Supreme Court put an end to the possibility of holding foreign corporations liable for the torts that they committed abroad. The application of the ATS Statute to foreign corporate extraterritorial responsibility cases now seems to have been set aside by the Supreme Court with the Jesner v. Arab Bank case.103 In this case, the foreign claimants, victims of terrorist attacks that occurred in Israel and Palestine, alleged that the Arab Bank (headquartered in Jordan) provided financial services to various terrorist groups, which amounted to a violation of the law of nations as it directly contributed to Doe I, et.al. v. Cisco Systems Inc, no. 15-16909 (9th Cir. 2016). Adhikari v. Kellogg Brown & Root, no. 15-20225, 845 F.3d 184, (5th Cir. 2017). 102 Al Shimari v. CACI Premier Technology, Inc., 657 F. Supp. 2d 700 (4th Cir. 2012) involved the case of Iraqi prisoners who had been tortured and inflicted degrading treatments in Abu Ghraib prison. The claimants sued CACI, the U.S.-based government contractor for directing and participating in acts of torture in the Iraqi prisons. The U.S. Courts held that the “touch and concern” test was fulfilled because CACI was a US corporation and their contract to act in Iraq has been concluded with the U.S. Department of Defense. 103 Jesner v. Arab Bank, PLC, 584 U.S. (2018). 100 101

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims genocide and crimes against humanity in foreign countries. The claimants asserted that it was necessary to hold the bank accountable for the acts done on its behalf, to deter future terrorist plots. Yet, on April 24th 2018, in a 5 to 4 decision, the Supreme Court held that the ATS could not be applied to the liability of foreign corporations. As Justice Kennedy explained: “Neither the language of the ATS nor precedent supports an exception to these general principles in this context. (…) The question whether a proper application of Sosa would preclude courts from ever recognising new ATS causes of action need not be decided here, for either way it would be inappropriate for courts to extend ATS liability to foreign corporations absent further action from Congress”.104 Therefore, the U.S. Supreme Court held here that the scope of application of the ATS did not encompass foreign corporations and that, as a consequence, they could not be drawn before U.S. federal courts. The lack of any international law rule on the responsibilities of corporations seems to have played a major role in this decision. Indeed, Chief Justice Roberts and Justice Thomas both agreed on the fact that ATS did not allow suits against foreign corporations as there is no “specific, universal and obligatory norm of corporate liability”105 in international law. Therefore, it seems that from now on, only American firms will be able to be sued before American courts.106 This was confirmed by Justice Gorsuch’s concurring opinion, in which he argued that ATS suits should only be allowed against domestic defendants.107 The Supreme Court also retained the argument of international relations between the U.S. and foreign nations to justify its decision in Jesner: “Separationof-powers concerns that counsel against courts creating private rights of action apply with particular force in the context of the ATS, which implicates foreignpolicy concerns that are the province of the political branches. And courts must exercise ‘great caution’ before recognising new forms of liability under the ATS.”108 One important argument of the Supreme Court thus seems to have been the separation of powers. To this effect, the Court relied on the idea that the exercise of extraterritorial jurisdiction by the courts involved exceeding the power conferred to the judges by the Alien Tort Statute and mingling with international affairs and policies, which belong to the prerogatives of the Executive Power. The Supreme Court notably insisted on its wish to avoid “significant diplomatic tensions”109 with Jordan, which could be exacerbated by the exercise of extraterritorial jurisdiction by the Court: “creating causes of action against foreign Ibid., p.18-19. Ibid., p.16. 106 Cases involving American firms will still have to meet the criteria developed in Sosa as well as to overcome the presumption against extraterritoriality developed in Kiobel. See notably: U.T. DOYLE, The Cost of Territoriality: Jus Cogens Claims against Corporations, 50 Case Western Reserve Journal of International Law 2018, p. 232-233; S.P. MULLIGAN, The Rise and Decline of the Alien Tort Statute, Congressional Research Service 2018, p. 2-3, available at . 107 Jesner v. Arab Bank, PLC, 584 U.S. (2018), p. 6. 104 105

108

Ibid., p. 18-19.

109

Ibid., p. 26.

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Adeline Michoud corporations under the ATS may instead provoke (…) diplomatic strife”.110 The Supreme Court thus considered that this case required to judge states’ foreign policies, a task that the judicial power is not entitled to perform. In her dissenting opinion, Justice Sotomayor criticised the majority decision, which goes against “the text, history, and purpose of the ATS, as well as the long and consistent history of corporate liability in tort”, which in her views “confirm that tort claims for law-of-nations violations may be brought against corporations under the ATS”.111 Moreover, she regretted that the majority had not considered the “touch and concern” test to determine whether the allegations sufficiently concerned the United States.112 In her conclusion, Justice Sotomayor warned against the risks of such a decision, fearing that it could lead foreign corporations to “remain immune from liability for human rights abuses, however egregious they may be”.113 It seems now that the U.S. Congress is the only remaining authority with sufficient power to decide on the scope of application of the ATS, as it appears quite uncertain that a foreign corporate defendant could be drawn before American federal courts, even in a situation where the “touch and concern” test were to be met. The decision in Jesner has already generated an impact on the subsequent federal courts’ case law,114 notably in the Doe v. Exxon Mobil case.115 This suit was filed by Indonesian villagers who alleged that military personnel hired by ExxonMobil (a company headquartered in the United States) as security guards committed killings and acts of torture. The plaintiffs alleged that Exxon Mobil should be held liable for aiding and abetting human rights abuses committed by members of the Indonesian military. In July 2015, the federal Court for the District of Columbia held that the plaintiffs succeeded in showing that the case sufficiently “touched and concerned” the US,116 as Exxon Mobil executives in the United States knew of the abuses committed and had made decisions that facilitated those abuses. It was thus held that U.S. courts had jurisdiction to hear the claim against Exxon Mobil. For several years, the case had remained pending, awaiting the decision in Jesner. The final decision was finally rendered in June 2019117 and confirmed the reluctance of U.S. courts to exercise extraterritorial jurisdiction, including in cases involving a U.S. company. In fact, in this recent decision, the District Court of Columbia, drawing upon the reasoning of the Supreme Court in Jesner, declined to recognize domestic corporate liability under the ATS. The Court notably underlined the fact that in the Ibid., p. 7. Ibid., p. 1 of Justice Sotomayor’s dissent. 112 Ibid., p. 33 of Justice Sotomayor’s dissent. 113 Ibid., p. 33. 114 Read on the topic: M. STERIO, Corporate Liability for Human Rights Violations: The Future of the Alien Tort Claims Act, 50 Case Western Reserve Journal of International Law 2018, p. 127 et seq. 115 Doe v. Exxon Mobil Corp., WL 5042118, (D.D.C., 2015). 116 Ibid. 117 See . 110 111

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims past years, the Supreme Court had drastically reduced the scope of application of the ATS, citing notably Sosa and Kiobel.118 Following the same reasoning as in Jesner, the District Court of Columbia also insisted on the separation of powers and foreign relations concerns that led it to decline to recognize domestic corporate liability under the ATS. The District Court of Columbia notably explained the diplomatic tensions raised between Indonesia and the United States following the opening of this case before U.S. courts: “Indonesia has also submitted letters to the United States, stating that it cannot accept the extraterritorial jurisdiction of a United States court over an allegation against an Indonesian government institution (…) Indonesia reaffirmed its position that it considers this litigation to be a severe affront to its sovereignty”.119 Moreover, the Court relied on the lack of international law rules extending liability for human rights violations to corporations: “International law has not extended the scope of liability to corporations. Accordingly, there is not a specific, universal and obligatory norm of corporate liability under current prevailing international law”.120 Some of the arguments raised by the Court are more debatable. Notably, the District Court of Columbia considered that corporate liability was not essential to serve the goals of the ATS and that claimants could instead sue corporate employees individually responsible for the human rights violations at stake.121 This argument can be disputed. Indeed, given the high sums at stake in corporate liability cases and taking into consideration the insolvency problems that may arise by requiring one single employee of the firm to compensate for the wrongs that occurred can make it impossible for victims to obtain proper compensation. We believe on the contrary that corporations should be held responsible, as their policies and practices are at the core of these human rights violations. Imposing corporate liability can subsequently lead corporations to reconsider their practices and constitute an efficient incentive to respect human rights. The District Court of Columbia also invoked an economic argument to justify its decision to set aside corporate liability: “allowing plaintiffs to sue corporations under the ATS could discourage U.S. corporations from investing abroad, including in developing economies where the governments may have histo122 ries of alleged human-rights violations”. The imposition of corporate liability ought to generate a broader reflection for companies on their investments abroad and encourage them to prefer sustainable investments, respecting human rights of local populations and workers. This could also represent an incentive for host countries of foreign investments to focus their efforts on the promotion of human rights and redesign their strategies. However, the District Court of Columbia, in line with Jesner, did not take such considerations into account: “Congress is better suited

John Doe I v. Exxon Mobil Corp. et al, Civil No. 01-cv-1357-RCL, (District Court for the District of Columbia, 3 June 2019), p. 8. 119 Ibid., p.15-16. 120 Ibid., p.23. 121 Ibid., p.26. 122 Ibid., p.26. 118

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Adeline Michoud than the Judiciary to examine the difficult and complex policy questions about 123 whether to impose liability on corporations”. Yet, some argue that all hope might not be lost to obtain redress in the United States against foreign corporations for violations of human rights abroad. Indeed, some authors claim that state courts still have a role to play in extraterritorial corporate wrongs cases and could represent an alternative forum.124 With the federal courts shutting the door to these claims, claimants could start using another litigation strategy and addressing state courts to present their claims relating to corporate wrongs involving human rights violations.125 Indeed, state courts have jurisdiction over all claims, except in limited cases where federal courts have exclusive jurisdiction.126 Therefore, state courts can hear claims arising under both state and federal law. However, when applying federal law, state courts must follow federal judicial precedents,127 and must therefore abide by the rulings of the Federal Supreme Court. Therefore, state courts will not be able to apply the ATS in a different manner than the interpretation provided in the Jesner case. However, state courts may have recourse to state law to find that they have jurisdiction to hear foreign corporate social responsibility cases. Critiques counter-argue that this can pose the risk of hurting the American federal policy in the conduct of U.S. foreign relations.128 In Kiobel, Chief Justice John Roberts had underlined the “danger of unwarranted judicial interference in the conduct of foreign policy”.129 However, this argument can be opposed in so far as states do have an interest in redressing wrongs, as states’ constitutions provide the power to the states to remedy wrongs.130 Moreover, the Alien Tort Statute does not specify that federal jurisdiction is exclusive.131 One other specific point raised in response to the idea of the exercise of jurisdiction by state courts is the fact that state courts’ remedies to violations of human rights might lead to a lack of harmonisation between the various states’ case law,132 turning human rights litigation into “an unruly patchwork of unpredictable Ibid., p.26. S. DAVIS/ C.A. WHYTOCK, State Remedies for Human Rights, 98 Boston University Law Review 2018, p. 483. 125 D.E. CHILDRESS III, The Alien Tort Statute, Federalism and the Next Wave of Transnational Litigation, 100 Georgetown Law Journal 2012, p. 709; R.A. GHATAN, The Alien Tort Statute and Prudential Exhaustion, 96 Cornell Law Review 2011, p. 1278; J. KALB, Human Rights Treaties in State Courts: The International Prospects of State Constitutionalism After Medellin, 115 Pennsylvania State Law Review 2011 p. 1051. 126 P. HAY, An overview of the Law of the United States, München 2016, p. 64. 127 Ibid. 128 For example, in the case Chy Lung v. Freeman, 92 U.S. 275, 279 (1875), the Court expressed concern that a judge, somehow “obstinate…may bring disgrace upon the whole country, the enmity of a powerful nation or the loss of an equally powerful friend”. 129 Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 1661 (2013), para. 1664. 130 Ibid. 131 Ibid., p.479. 132 N.J. MILLER, Human Rights Abuse as Tort Harms: Losses in Translation, 46 Seton Hall Law Review 2016, p. 514. 123 124

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims rules”.133 Similarly, the District of Massachusetts Court held: “Municipal law is an inadequate placeholder for [human rights] values.”134 This reluctance to see state courts address cases involving human rights and corporate wrongs can be explained by the fact that the level of authority of treaties and their degree of application in state courts in the judicial decision-making is still unclear.135 Yet, the argument that state courts lack the competence or capacity to address cases involving human rights and corporate wrongs can be dismissed as misdirected. Indeed, state courts “have developed rich bodies of common law that can provide redress for most, if not all, of the wrongs that arise in human rights litigation in domestic courts”.136 Therefore, using their mechanisms, state courts are already well equipped to provide remedies to many claimants invoking reparation for corporate wrongs abroad. Moreover, one cannot ignore the important deterrent effect that the competence of state courts can have, in dissuading companies from committing torts abroad.137 Indeed, the risk for companies to be tried and held accountable, can represent an important factor for companies to promote a more preventive approach and to abide to human rights standards. Future case law shall tell if state courts are able to provide a viable alternative to federal courts to provide remedies to victims of corporate wrongs committed abroad.

V.

Conclusion

The United States’ courts have been frontrunners in holding foreign defendants accountable for international human rights violations occurring abroad, relying upon the extraterritorial jurisdiction offered by the Alien Tort Statute.138 Some, like Brief for Amici Curiae Hassan Ahmed et al. in Support of Petitioners, Kiobel v. Royal Dutch Petroleum Co. 133 S. Ct. 1659 (2013) (No. 10-1491), 2012 WL 2165343, para. 30. 134 Xuncax v. Gramajo, 886 F. Supp. 162, 183 (D. Mass. 1995). In the same vein, see A.L. PARRISH, State Court International Human Rights Litigation: A Concerning Trend, 3(25) UC Irvine Law Review 2013, p. 41: “There is … something uncomfortable about addressing claims like genocide or torture through state common law claims of wrongful death or battery”. 135 J. KALB, Human Rights Treaties in State Courts: The International Prospects of State Constitutionalism After Medellin, 115 Pennsylvania State Law Review 2011, p. 1056. 136 S. DAVIS/ C.A. WHYTOCK, State Remedies for Human Rights, 98 Boston University Law Review 2018, p. 413. 137 A.L. PARRISH, State Court International Human Rights Litigation: A Concerning Trend, 3(25) UC Irvine Law Review 2013, p. 42. 138 See notably: Doe v. Unocal Corp., 963 F. Supp. 880 (C.D. Cal. 1997); Filartiga v. Pena -Irala, 630 F.2d 876 (2d Cir. 1980). See, also for example L.J. DHOOGE, The Alien Tort Claims Act and the Modern Transnational Enterprise: Deconstructing the Mythology of Judicial Activism, 35 Georgetown Journal of International Law 2003, p. 7-8; H. VAN LOON, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, 23 Uniform Law Review 2018, p. 305. 133

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Adeline Michoud Judge Oberdorfer, consider that such an intervention by U.S. courts is legitimate: “The United States, as leader of the free world, has an overarching vital interest in the safety, prosperity, and consequences of the behaviour of its citizens, particularly its super-corporations conducting business in one or more foreign countries.”139 In the last decades, no country had done more than the United States to enforce universally recognized international norms. Nevertheless, this openness has gradually narrowed. Since the Kiobel case law,140 the U.S. courts have shown reluctance to hear international corporate liability cases and have reduced the Alien Tort Statute’s scope of application. The 2018 Jesner decision141 confirmed the U.S. federal courts’ opposition to hear claims involving foreign defendant companies without an express statement of the U.S. Congress allowing them to do so. In light of the recent Exxon Mobil142 case rendered by the District Court of Columbia, the opening of U.S. courts to hear claims presented against U.S. companies’ operations abroad also seems considerably compromised. Yet, important questions relating to the scope of application of the ATS remain unresolved and further guidance from the U.S. Supreme Court (as well as from the Congress) appears to be necessary, notably regarding the application of the “touch and concern” test for U.S. companies operating abroad. The United States had often been criticised in the past for their expansive view of general jurisdiction, granting jurisdiction to their courts even when the defendant was not domiciled in the U.S.143 However, in view of the most recent federal case law, the tendency to recognise general jurisdiction in cases involving both U.S. and non-U.S. based defendants is drastically limited. It is regrettable that the U.S. courts do not grant more importance to the risk of denial of justice at stake when they reject a case involving corporate breaches of human rights norms.144 As Symeon Symeonides notes, while reform of general jurisdiction was indeed needed in U.S. federal law, the Supreme Court seems to have overcorrected what needed correcting.145 Hans Van Loon even affirms that “it looks like the pendulum has

Doe v. Exxon Mobil Corp, 2006 WL 516744, (D.D.C., 2006), para. 2. See for example Gonzalez v. Chrysler Corp., 301 F. 3d 377, 381-84 (5th Cir. 2002); Polanco v. H.B. Fuller Co., 941 F. Supp. 1512, 1529 (D. Minn. 1996); Torres v. S. Peru Copper Corp., 965 F. Supp. 899, 900 (S.D. Tex. 1996); Ernst v. Ernst, 722 F. Supp. 61, 64-68 (S.D.N.Y. 1989). 141 Jesner v. Arab Bank, PLC, 584 U.S. (2018). 142 John Doe I v. Exxon Mobil Corp. et al, Civil No. 01-cv-1357-RCL, (District Court for the District of Columbia, 3 June 2019). 143 H. VAN LOON, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, 23 Uniform Law Review 2018, p. 307. 144 We can notably quote the recent U.S. Supreme Court decision, BNSF Ry. Co. v Tyrrell, 137 S.Ct. 1549 (U.S. 2017), where the majority opinion does not seem to take into account the lack of open jurisdictions in other countries to hear the case that they reject. 145 S. SYMEONIDES, Choice of Law in the American Courts in 2017: Thirty-First Annual Survey (December 29, 2017), 66 (1) American Journal of Comparative Law 2018, available at . 139 140

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Extraterritorial jurisdiction of U.S. courts over corporate wrongs claims swung from one extreme to another – from overly broad to overly narrow bases of adjudicatory jurisdiction”.146 By now, access to federal U.S. courts for victims of international human rights violations appears substantially blocked. However, some hope for victims resides in the possibility of addressing U.S. state courts to seek justice and obtain redress. Time shall tell if they can constitute viable forums. Yet, obtaining access to justice in the United States might reveal difficult in the years to come and discourage prospective claimants to take legal action, thus limiting access to justice for many victims of corporate abuses.

146 H. VAN LOON, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, 23 Uniform Law Review 2018, p. 308.

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THE FOUNDATIONS OF EUROPEAN PRIVATE INTERNATIONAL FAMILY LAW Lukas RASS-MASSON*

I. II.

V.

Introduction The Presuppositions of European Private International Family Law A. The Concept of Private International Law throughout History B. The Contemporary Challenges of Family Law The Objectives of European Private International Family Law A. Unity of Family Status B. Diversity of Family Laws Conceiving European Private International Family Law in Light of its Theoretical and Political Foundations A. Articulating Conflict of Jurisdictions with Conflict of Laws B. Assuming the National Dimension of Family Law Conclusion

I.

Introduction

III.

IV.

1

The situation of European families has been addressed in law through the emergence of European private international family law, defined as the set of rules of conflict of laws and conflict of jurisdictions – in the broad sense – provided for by the European Union to apply to European family relationships. Given the novelty of the matter and uncertainties surrounding its related concepts, it has proved necessary to analyse the foundations of European private family law in order to better understand this new field of law and to be able to make proposals in order to let it evolve. This research is focused, first, on the presuppositions of European private international family law (II), then, on its

* Professor at the University Toulouse 1 Capitole, Director of the Toulouse European School of Law. 1 This contribution is an extended summary of the PhD thesis “Les fondements du droit international privé européen de la famille”, completed in December 2015, under the supervision of Professor Yves Lequette at the University Paris II Panthéon-Assas. The thesis will be published by LGDJ, Bibliothèque de droit privé (end of 2019 or beginning of 2020). The references to paragraphs in this summary refer to the numbering of the version to be published. A French summary, on which the present article is widely based, was published by the Revue de droit international d’Assas (RDIA), No. 1, 2018, p. 236-254, available at: .

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Lukas Rass-Masson objectives (III), in order to finally propose a concept of private international law that aligns with these theoretical and political foundations (IV).

II.

The Presuppositions of European Private International Family Law

Understanding European Private International Family Law requires an awareness of its underlying principles. An enquiry of underlying principles, which takes into account existing debates on the definitions and functions of both private international law and family law, is an essential precursor to any in-depth analysis of European Private International Family Law. Therefore, as a preliminary step, the theoretical foundations of European Private International Family Law have to be established in light of, on the one hand, the history of private international law (A) and, on the other hand, the contemporary challenges of family law (B). A.

The Concept of Private International Law throughout History

A historical analysis of the concept of private international law illustrates that contemporary private international law is founded on the dual axiom of the anteriority and the universality of the national legal system. From this double axiom emerges the necessity for legal systems to accept otherness (“accepter l’altérité”) through recourse to a concept of “universal” conceived in a manner that is open to plurality. Contemporary private international law thus descends from a longstanding tradition of studying the evolution of private international law alongside the evolution of political philosophy and philosophy in general. From this historical analysis, key conclusions can be drawn for European private international family law, and for private international law as a whole, particularly in the present context in which relations between legal systems and dialogues between cultures are being redefined. Therefore, it is necessary to propose a vision of private international law that is both classic and renewed, based on the demonstration that this renewed classicism adequately addresses challenges which history proves that they are today more current than ever. Private international law or “conflict of laws” is founded upon concepts initially designed to overcome the phenomenon of exclusivism that existed for most of the history of law. Under the exclusivist approach, foreign relations were not understood as strictly legal, or were considered as legal within a model of inclusion (which internalises the situation and renders the law of the forum applicable) or exclusion (which refuses otherness). The concept of private international law as an independent legal field is only conceivable, however, if means are discovered that allow for the application of foreign law or foreign legal solutions. The underlying concepts of private international law can be identified by studying the evolution of private international law alongside the evolution of Western philosophy, in light of reflections on “the universal, the uniform, the common and dialogue 522

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The Foundations of European Private International Family Law between cultures.”2 A crucial first step was the discovery of relative universality, which arose out of the philosophical universality of Greek cosmopolitanism (§§ 49-54) and the political universality of Roman citizenship (§§ 55-62). The major contribution of this chapter is to highlight that universality is the essential driving force for the opening of the legal system to extraneity or foreignness. The early Middle Ages are characterised by a deepening of this form of universality, as the universal concept of humanity is one of the characteristic elements of Christianity (§§ 64-69). However, the political influence of the Church will transform this universality into exclusivism, making it impossible to accept the plurality of legal norms (§§ 70-75). The idea of applying foreign law, and thus accepting law’s extraterritorial effect, is revived in the Statute theory of some postglossators. The plurality of legal relationships is rediscovered first as a community of law, which is particularly the case of Italian authors, among which Bartole plays a preeminent role (§§ 86-94), and second, as a political community, which is characterised by the French school. As an emblematic member of the latter, d’Argentré provides a decisive intellectual element, by disconnecting, in theory, the acceptance of diversity from the community of law (§§ 95-106). This idea is further developed by the Dutch School, for which plurality is prescribed by a universality imposed upon legal systems, in application of the principles of sovereignty and comitas. These universal principles found private international law upon the respect of plurality (§§ 112-128). The Dutch School thus makes it possible to accept diversity without limiting it to any particular community, a step that will be decisively realised by Savigny. While integrating the contributions of Story, Savigny introduces the “Copernican revolution” of private international law.3 The major innovation of the Savignian method of localising legal relationships, which will become the classic bilateral conflict of laws method, is that such method is not founded, contrary to what is still commonly professed today, on the existence of a community of substantive law (§§ 134-138), but on a universal conceived as an objective of private law deriving from the equality between foreigners and nationals (§§ 139-151). This return to the concept of universality allows private international law to resist extant particularist and nationalistic tendencies. Indeed, particularists have demonstrated the need to take into account the necessarily national dimension of civil law, which dismisses public international law as a foundation of private international law (§§ 158-162). This dimension also entails awareness of a necessarily singular conception of private international law (§§ 163-167). This singular conception of private international law, however, involves dangers, notably the impasse of nationalism (§§ 169-172) and the lack of coordination inherent to unilateralism (§§ 173-177), which have to be overcome in order to develop a coherent private international law.

2 F. JULLIEN, De l’universel, de l’uniforme, du commun et du dialogue entre les cultures, Fayard, Paris, 2008. In English On the Universal, the Uniform, the Common and Dialogue Between Cultures, Polity Press, 2014. 3 P.H. NEUHAUS, Savigny und die Rechtsfindung aus der Natur der Sache, RabelsZ 1949, 364–381, at 366.

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Lukas Rass-Masson The contribution of this historical research to the emergence of private international law as an independent legal field is to propose a coherent foundation for private international law, as a matter based on the concept of a “universal and plural singular”. It is necessary to take into account the axiomatic value of the anteriority (or precedence) of the national legal system in relation to international legal relationships (§§ 180-183). But this singularity of the law does not prevent the possibility of applying a foreign law. On the contrary, insofar as our singular legal systems are also based on the axiom of the universality of the national legal system (§§ 184-194), and therefore on the idea of the universality of certain values, they must necessarily integrate this open-mindedness towards otherness (“altérité”). Respect for the concept of universality also implies that the universal be open to plurality, centred around the moral requirements that underpin such claim to universality (§§ 197-202). This plural universal has indeed an undeniable fertility for private international law, especially given the need to distinguish between “jurisdictional integration” (“intégration juridictionnelle”), which expresses the interest of the legal system to recognise the international situation as falling within its sphere of influence, and “substantive integration” (“intégration matérielle”), which in turn corresponds not only to the interest of the legal system to intervene, but also to the interest of the latter to see its own substantive concepts, and therefore internal legal rules, applied (§§ 203-210). Three major phases thus characterise the history of private international law, understood as the “law of diversity” (“droit de la diversité”). The first step is the discovery of the universal, even though, considered in isolation, it is a source of standardisation and rejection of otherness. The second step, more convincingly, is the emergence of a plural within a community, first legal and political, then conceptual. The third and final step is an awareness of the lack of community, which goes hand in hand with the rise of a private international law based on the sovereignty of States, leading to the discovery and affirmation of the singularity of each legal system. By consecrating the open-mindedness of different national societies, legal systems accepted their plurality, which allowed for the adaptation and continuation of private international law. A renewed definition of private international law as a legal field emerged. Private international law is the set of rules by which a singular legal system tends towards universality, in a manner that is necessarily open to plurality. This conclusion also makes it possible to insist on the originality of the European Union’s private international law, in light of the community of law that exists between the Member States of the Union and given the need to distinguish between intra-European and extra-European relations. B.

The Contemporary Challenges of Family Law

Basic research on contemporary issues of family law reveals to what extent family law is today in a critical situation. The crisis in family law is the result of the tension between the traditional conception of law, inherited by Rousseau, in which the right (“Droit”) should not be reduced to the right of the strongest, and contemporary family law, which is increasingly abandoning this traditional conception by submitting the law to the sole satisfaction of individual desires. This tension can be

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The Foundations of European Private International Family Law resolved in favour of a rediscovery of the meaning of family law, based on the exigency of responsibility. It has to be admitted, however, that this rediscovery is probably an illusionary objective in the contemporary context, in particular in view of the current conception of the notion of human rights. The exigency of responsibility should nonetheless constitute a guideline for research on the foundations of European private international family law, due to the risks associated with a hyperindividualist vision of the law. In the current Western context, characterised by the prevalence of the subject and the individual, it not surprising that the law is conceived as serving the satisfaction of individual desires. This carries with it a great number of dangers for the cohesion of law and society, which should be highlighted in the context of the risks associated with “hyper-individualism” (§§ 225-231). An in-depth analysis reveals that family law, but also the law as a whole, is increasingly serving a hyperindividualism that is doing more than simply taking into account the objective of satisfaction of individual interests, but even submitting the law to the satisfaction of individual desires. By proceeding in this way, individual satisfaction becomes the ultimate purpose of the law, to the exclusion of the social considerations that the law, especially family law, should be called to defend (§§ 232-242). The consequences of this paradox, which makes individualism a fundamental social value, are particularly detrimental in the field of family law. The intention of family law is indeed to be a right of a different nature, whose focus in not on the preservation of minimum rules of respect for living together, but on the promotion of certain behaviours deemed to be particularly beneficial, and therefore legitimate, for society. This is the reason why, in family law, there are many “droits-devoirs”, i.e. rights that are also duties. Nevertheless, European society seems to evolve in such an individualistic sense that family law risks losing the elements that distinguish it from other branches of law. If family law is no longer a law organising duties linked to a family relationship, one must ask what is the remaining meaning and rationale of family law (§§ 243-249). It is therefore necessary to propose a more coherent understanding of the concept of family law, reconstruing it around the requirement of responsibility. This requirement of responsibility arises out of the acceptance of family as a place of otherness (§§ 252-261). It is reinforced by the acceptance of family as a place of community (§§ 262-272). The requirement of responsibility is also necessary for the acceptance of family as a place of fulfilment of the individual (§§ 273-283). Nevertheless, our conception of human rights makes it difficult to understand family law as something that includes more than a bundle of individual subjective rights. In order to conceive of family law as bringing with it and organising a coherent set of duties, it is necessary to explain the conditions under which the reconstruction of family law is possible, in light of the requirements of the concept of human rights (§§ 284-298). We must rethink the concept of human rights, to understand, in line with the persuasive philosophy of Emmanuel Levinas, that “human rights absolutely and originally, take on meaning only in the other, as the right of the other human” and that there is therefore an “infinite responsibility for the Other”, deriving from human rights, to which the subject is awakened from the “right that challenges the I, substantial and persevering remorselessly in its being,

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Lukas Rass-Masson that Pascal called hateful”. Human rights are thus “originally the rights of the other human and [...] express the for-the-other of the social, of the for-the-stranger”.4 Such a reading of human rights is not a negation of the value of human rights, nor of the necessity or usefulness of independent judicial review to ensure their respect, but an answer to the fear of “their impoverishment by overinvestment of the self”.5 Such a reading also respects the idea that “a right is nothing but the other aspect of a duty”6 and that the purpose of the law does not lie in individual rights, but that these individual rights are, on the contrary, an indispensable tool enabling individuals to assume duties (§§ 289-290). It is therefore necessary to put more emphasis on the duties which derive from our quality of humans than on our individual rights, as these rights are not an exclusive finality, but simply one means by which we are able to assume our duties.

III. The Objectives of European Private International Family Law The theoretical foundations of European private family law are a prerequisite for the understanding of European private international family law, but not sufficient in order to analyse comprehensively the constituent elements of this new legal field. Its political foundations also need to be investigated. These foundations result from the founding treaties of the European Union, the legal instruments adopted in the field of European private family law, and the main political programmes published by the European institutions. Two objectives emerge in family matters, both of which reflect two different meanings of the French term “statut”. This word first refers to family “status”, where the objective of unity is a founding element of European private international family law (A). Second, it implies the laws (“statutes”) adopted in the field of family law, and thereby refers to the national laws relating to family law, where the objective of diversity of family laws is paramount (B).

E. LEVINAS, Altérité et transcendance, Biblio Essais, Le Livre de Poche, Paris, 2006 (translation by the author); see also trans. M. B. SMITH, London: The Athlone Press, 1999, and Columbia University Press, 2000. 5 M.-T. MEULDERS-KLEIN, Internationalisation des droits de l’Homme et évolution du droit de la famille: un voyage sans destination?, in Internationalisation des droits de l’Homme et évolution du droit de la famille, Actes du colloque organisé par le LERADP de l’Université de Lille II les 15 et 16 décembre 1994, LGDJ, 1996, pp. 179-213, translation by the author. 6 J.-P. SARTRE, La Nausée, Gallimard, 1938 (English translation, J.-P. SARTRE, Nausea, New Directions Publishing, 2013). 4

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The Foundations of European Private International Family Law A.

Unity of Family Status

The intervention of the European Union in family matters finds a convincing basis in the objective of unity of family status, as this unity is an essential corollary of a citizenship of the Union conceived as a political and active citizenship. The objective of unity of family status thus implies that we retain an ambitious vision of European construction and accept a deepening of European federalism in its noneconomic dimension. The place of concepts related to the objective of unity of the family in the Treaties, namely the emergence of the citizenship of the Union and the creation of the area of freedom, security and justice, indicate a certain shyness in the recognition of this objective of unity. The initial dynamism of the Maastricht and Amsterdam Treaties (§§ 306-309) was followed by institutional immobility, with the Treaty of Nice and the failure of the Treaty establishing a Constitution for Europe (§§ 310 -315). The Treaty of Lisbon is also hesitant (§§ 317-324), while the economic dimension of the European Union could be overcome by the recognition of an increased role conferred on the citizenship of the Union and the Charter of Fundamental Rights (§§ 325-328). Regarding implementation of the Treaties, it is important to distinguish between strategic programmes, which are indicative of the objectives pursued by the European institutions, and secondary legislation. In light of the former, a first phase, with the 1999 Tampere programme, the 2004 The Hague programme and the 2009 Stockholm programme, deepened the objective of unity of family status. It was followed by a second phase, still characteristic of current political orientations, of deceleration of the dynamic, revealed by the “Post-Stockholm Proramme” of 2014 (§§ 330-346). In the context of secondary legislation, there is similarly an incomplete and unaccomplished consecration of the objective of unity of family status (§§ 347-362). In the absence of any genuine recognition of the objective of unity of family status, the main difficulty is to determine accurately what scope should be allocated to this objective. In view of the ambitions of these strategic programmes, the tangible achievements obtained show a very partial and incomplete concretisation of this objective, which is certainly indicative of a political will that is at best unsteady as to the full realisation of this objective. Given these uncertainties, it is therefore necessary to analyse the possible justifications of the objective of unity of family status. This analysis emphasises that the objective has a resolutely non-economic nature. As regards the free movement of persons, its influence on the objective of unity of family status remains limited. The existence of a family law of the European Union based on the free movement of persons is certainly an undeniable reality (§§ 366-371). This European family law based on the free movement of persons nonetheless contains major conceptual deficits (§§ 372-383) which reveal a “reference-dependence” on national legal systems incompatible with a generalisation of the objective of unity of family status on this basis (§§ 384-387). It is impossible a fortiori to found this objective on its link with the internal market (§§ 390-393). This leads to the necessity of marginalisation of the traditional objectives of the European Union with regard to the objective of unity of family status (§§ 394-399).

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Lukas Rass-Masson The objective of unity of family status, if it is not of an economic nature, must therefore be of a political nature or else not be justified at all. But the identification of the foundation of the objective of unity of family status is all but evident. It is indeed impossible to base the objective of unity of family status on the objectives specifically linked to the creation of the area of security, freedom and justice (§§ 404-406) on the principle of non-discrimination (§§ 407-414) or any international fundamental right (§§ 415-418). The only possible foundation is therefore the notion of European citizenship (§§ 419-425). The objective of unity of family status is necessary for the achievement of European citizenship, at least as long as the purpose is to give a non-economic dimension to the European Union (§§ 429 -434) and as citizenship is conceived as implying not only a passive, but also an active dimension, based on the implication of the citizen, as opposed to a citizen who would merely remain a consumer and holder of its individual rights (§§ 435-440). It is therefore necessary to give a meaning to European citizenship based on the idea that this citizenship is a binding tool for its addressee comprising duties that may go against his individual desires when social interests require it. Therefore, the intervention of the European legislator in the field of private international family law is even more necessary, as the absence of intervention would be a premium for individualism, incompatible not only with the idea of European citizenship, but undermining also national citizenships. Thus, the objective of unity of family status provides important elements that allow a deepening of European federalism, taking into account the hybrid nature, both international and federal, of the European Union (§§ 441-445). Therefore, if the European Union wants to conceive itself as something other than a simple economic union, the objective of unity of family status has to be placed at the heart of the European construction, despite the ambiguity of the affirmation of this objective at the political level. The objective of unity of family status is therefore closely linked to the importance attached to the political dimension of the citizenship of the Union. It implies that the citizenship of the Union be assumed as genuine citizenship, construed around the duties of the citizen. By its contribution to the citizenship of the Union, the objective of unity of family status is thus not only a necessary element for the European private international family law. It also is an element providing for a better understanding of the nature of the European Union's legal system as a “federation of states of a federal nature”.7 This objective deepens the federal dimension of the European Union, reinforcing its political dimension and its links with European citizens. Likewise, a refusal of this objective would imply a strong limitation on the federal nature of the European Union. In this respect, the objective of unity of family status is also an indispensable instrument for the identification or strengthening of the legitimacy of the European Union. By analogy with the expression used by M. Christoph SCHÖNBERGER talking about “la nature fédérale de l’Union d’États”; C. SCHÖNBERGER, Unionsbürger, Europas föderales Bürgerrecht in vergleichender Sicht, Tübingen, Mohr, 2005, at 268, translated into French by O. BEAUD, Théorie de la Fédération, 2e éd., Presses Universitaires de France – PUF, Paris, 2009, at 271. 7

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The Foundations of European Private International Family Law B.

Diversity of Family Laws

The ambitious objective of unity of family status is not the exclusive objective of European private international family law. It is accompanied by the objective of diversity of family laws, which refers to the respect of the diversity of national family laws. This second objective makes it possible to accurately comprehend the deeply plural nature of the European Union's legal system, according to which the European Union can achieve its own objectives only by fully respecting the identities, legal systems and legal traditions of the Member States, hence revealing the profound essence of the European project. The diversity of family laws appears as a fact, with regard to substantive law (§§ 455-461) and private international law (§§ 462-468). This diversity is, moreover, only moderately framed by common European principles, in particular fundamental rights derived from Article 8 of the ECHR. These fundamental rights constitute a framework for family law, including private international law (§§ 473477), but this framework is highly nuanced by the national margin of appreciation recognised by the European Court of Human Rights (§§ 478-483). The objective of respect of the diversity of national family legislations is moreover affirmed by the European Union. In the Treaties, the principle of the respect of national identities is clearly affirmed, having historically responded to the emergence of the concept of citizenship of the Union (§§ 486-490). The principle of respect of the different legal systems and legal traditions of the Member States also accompanies the deepening of the area of freedom, security and justice (§§ 491-495). The implementation of the Treaties furthermore confirms the crucial importance of the objective of diversity, despite the initial limitations. Affirmed by the 2004 Hague Programme, the objective of respect of diversity has indeed been maintained by the 2009 Stockholm and the 2014 “Post-Stockholm” programmes (§§ 497-502). In regulations adopted in the field of European private international family law, the objective of respecting the diversity of national family laws is also central, in particular because the public policy exception continues to play a major role (§§ 503-513). This institutional and legal framework is clearly affirmed by the need to maintain the diversity of national family laws. Taking into account the failures of attempts at international unification or harmonisation, whether official (§§ 517522) or unofficial (§§ 523-528), it is necessary to highlight that family law has an inevitably national dimension given its social and political implications (§§ 530533) and its democratic relevance (§§ 534-540). The unification of family law would also be unproductive for the European Union, since the Union does not necessarily have to rely on a common substantive law in family matters (§§ 542552). On the contrary, the Union must respect national identities, legal systems and legal traditions (§§ 553-561). The objective of diversity is therefore particularly important for the understanding and implementation of the European project, as this objective reveals the pluralistic nature of the European Union’s legal system, which is required to respect national legal systems (§§ 563-572). The objective of the diversity of family laws thus leads, very concretely, to the consequence that the European Union is totally deprived of the power to harmonise substantive family law. Lack of competence in the field of substantive family law and respect for the principles of subsidiarity and proportionality in the exercise of the Union's

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Lukas Rass-Masson competences in the field of free movement of persons, which might justify private international family law, are in this regard an insurmountable obstacle (§§ 573581). The objective of diversity of family laws also contributes to the reality of European federalism. European Union family law is required to fully respect the peculiar federal nature of the European Union, which in particular is based on respect for the plurality and the diversity of the Member States. The European Union can therefore seek to achieve the unity of family status only insofar as it still respects the prerequisites of the prevalence and anteriority of national legal systems. This respect for national diversity has an axiomatic value for the construction of the European private international family law. The chance for European citizens is that this prerequisite does not preclude the construction of a common regime. European family law must however be construed in accordance with the particularities of the national legal systems and the central and inevitable role of the objective of respect for the diversity of family laws.

IV. Conceiving European Private International Family Law in Light of its Theoretical and Political Foundations Identifying the foundations of European private international law is a useful enterprise if it is possible to construe this legal field in a manner that conciliates the different theoretical and political foundations. It is thus necessary to propose a conception of European private international family law respecting these foundations. This renewed conception must fully take into account the need to articulate efficiently the conflict of jurisdictions with the conflict of laws (A). It also must be fully respectful of the national dimension of family law (B). A.

Articulating Conflict of Jurisdictions with Conflict of Laws

European private international family must be elaborated in a manner that mobilises all methods of private international law, articulating them efficiently in line with the central role of the conflict of laws rule, the determination of the applicable law being the true cornerstone of the regime. This articulation of methods is based in particular on the condemnation of the recognition “method”, which is not a method in itself, but part of conflict of laws. The law of the European Union, however, is currently far from being a convincing comprehensive private international family law regime. The construction of a European private international family law cannot rely only on rules limited to conflict of jurisdictions, i.e. rules pertaining to the international competence of the judge or the recognition and enforcement of foreign situations, acts or decisions. A regime based solely on the method of recognition is therefore totally inappropriate to meet the challenges of European private interna530

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The Foundations of European Private International Family Law tional family law. However, before proceeding with an analysis of its suitability for European private international family law, it is necessary to propose a coherent definition of the method of recognition. Given the fluctuations in contemporary doctrine on this matter, it is certainly not easy to find such a coherent definition. The search for a definition of the method of recognition leads to the rejection of definitions that would narrow this method down to a purely factual method, since it is inconceivable that situations might be recognised unconditionally for the sole reason that they simply exist (§§ 606-617). It is also unsuitable to rely exclusively on the internal conditions imposed by the jurisdiction of recognition (§§ 618-627). An appropriate method of recognition instead needs to retain conflictual acceptance, and therefore some kind of conflict of laws rule. It is a method based on the potential application of a foreign law, thus relying on a conflictual approach (§§ 629-644). The method of recognition is “simply” a particularly liberal rule of conflict, accompanied by conditions of regularity unilaterally imposed by the jurisdiction of recognition (§§ 645-650). It is thus “the conflict of laws rule according to which the conditions of validity and effects of a situation are determined by the legal order which recognises their validity and which is invoked by at least one of the interested parties for the purpose of reception of this situation by the legal order of the forum” (see especially § 653). This conflictual acceptance of the recognition method leads to a necessary refinement of the conflict of laws rule (§§ 651-666). But even reconstrued in a conflictual sense, this method of recognition remains insufficient in light of the objectives of European private family law, since this method has a necessary substantive dimension incompatible with the objective of respect of the diversity of family laws. The only way to overcome this substantivity is to resort to controlling mechanisms that mobilise other methods of private international law, thus providing for a regime that is not limited to the method of recognition. The method of recognition, as outlined above, does indeed contain an intrinsic substantivity, which is associated, on the one hand, with the substantive conditions of reception, even if these remain unproblematic (§§ 670-675 ), and, on the other hand, with the establishment of a kind of “premium for creating new situations” leading to an unjustified weakening of the international permanence of the family status, undermining the objective of unity of family status (§§ 676-683). To mitigate this risk, it would be necessary to determine a unique authority for the consecration of family status. The obvious advantage would be to favour the unicity and stability of family status. A first step in this direction is to limit the grounds of indirect international jurisdiction, in order to ensure that the jurisdiction of establishment of family status is able to legitimately intervene, based on the links that it presents with the situation (§§ 686-691). But an in-depth analysis reveals that this limitation of indirect jurisdiction necessarily entails a limitation of the criteria of direct international competence, at least in an integrated regime such as the European Union (§§ 692-698). It is therefore necessary to expand the analysis to a regime based at the least on common rules on direct international competence and on recognition and enforcement of foreign decisions. Such a regime could potentially be coherent, as the uniqueness of international jurisdiction would guarantee the unity of family status (§§ 702-709). It would furthermore be possible to resort to cooperation mechanisms in order to Yearbook of Private International Law, Volume 20 (2018/2019)

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Lukas Rass-Masson ensure the complementarity of the criteria of international competence, notably with techniques inspired by the forum non conveniens exception (§§ 710-716). Nonetheless, such a regime would be doomed to fail in practice. Effective access to a judge requires broad access to available fora in family situations (§§ 718-721), leading to a multiplication of competences, which in turn would lead to an inevitable substantive dimension of the regime in favour of the precariousness of the family situation (§§ 722-727). Therefore, it is only by fully taking into account the conflict of laws that European private international family law can achieve its objectives, through an effective articulation of methods. The purpose is the identification of a unique substantive integration. In this context, unique substantive integration guaranteed by conflict of laws is crucial (§§ 732-739). This does not preclude relevance of methods of conflict of jurisdictions, but the conception and implementation of these methods must accept the fundamental role of the conflict of laws. Rules of international jurisdiction must thus be designed in a way that ensures the effectiveness of the conflict of laws rule (§§ 741-744), just as the conflict of laws rule must be revaluated in the context of the requirement of recognition (§§ 745-749). Such a regime, construed around the conflict of laws, is an appropriate response to the challenges of free movement of persons and families within the European Union. In such a regime, the liberalism of the European conflict of jurisdictions rules is justified, as long as this liberalism, with regard to the rules of recognition, is based on the determination of unique substantive integration (§§ 752-759) and the jurisdictional rules protect unique substantive integration (§§ 760-765). An articulation of methods based on the central role of the conflict of laws is also required in order to respect the diversity of national family laws. Indeed, while rules of substantive family law retain an irreducible national dimension (§§ 767-770), it is possible to overcome the persistent diversity of national conflict of laws rules through a common European framework which is construed in a manner that conciliates the respect of national diversity with the need to ensure the unity of family situations (§§ 771-777). Given the impossibility of conceiving recognition without recourse to the conflict of laws method and the inadequacies of a method based merely on “receptive” conflict rules,8 it is more necessary than ever to conceptualise a “renaissancemétamorphose” of the method of determining the applicable law. European private international family law must be construed around the idea that the rights and duties of individuals involved in family relationships are the same within the entire European judicial area, regardless of where those rights and duties are invoked. Hence, it would be a mistake to neglect conflict of laws at the European level for as long as the aim of European international private family law is to guarantee, through the unity of the rights and duties of individuals, that the European Union is a union in which the rule of law is fully ensured. It is thus necessary to return to Henri Batiffol’s convincing idea: “when we identify the law applicable to a question, it is always a matter, in one form or another, of determining the legal system 8 On the concept of “règles de conflit réceptives”, see A. BUCHER, La dimension sociale du droit international privé, Recueil des cours, t. 341, Brill, Nijhoff, Leyde, Boston, 2009.

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The Foundations of European Private International Family Law with which the situation has the most intimate links, in order to prevent that the blind application of the law of the court seized disorganises a relationship whose essential elements have already been, or sooner or later necessarily will be, settled under application of another law. The concern for coherence is inseparable from a harmony of the results”.9 It is precisely this concern for coherence that is absent from today’s positive private international law. A rigorous analysis of the consequences of the foundations of European private international family law would, however, make it possible to restore this coherence de lege ferenda. B.

Assuming the National Dimension of Family Law

In order to overcome the faults of current European law, it is crucial to endorse the national dimension of family law. It is thus necessary to construe a European private international family law that effectively organises the plurality of national family laws, while ensuring the effectiveness of family duties. European private international law must therefore integrate the respect of national legal systems and effectively implement it through a private international law regime based on conflict of laws rules designed to take into account the irreducible national dimension of family law. The European Union must thus revalue nationality as connecting factor, especially with regard to the validity of family relations. Habitual residence remains relevant as a connecting factor when the effects of the family relationship are at stake. Such a regime is also the most effective solution to avoid and limit the use of the public policy exception, which remains a key tool in European private international family law. Ordre public is an indispensable safeguard for the respect of the anteriority of the national legal system in the event of a conflict between national substantive objectives and the objective of coordination inherent to the objective of unity of family status. In this way, use of the public policy exception determines the remaining limits of European private international family law. In order to understand the operation of European private international family law, it is necessary to distinguish between the normal and the disrupted functioning of the regime. The normal functioning of the European private international family law system must rely on the most appropriate objective connecting factors. This appropriateness lies with connecting factors that effectively protect the stability and effectiveness of the European family relationship. If the use of habitual residence is justified when the assessment of the effectiveness of the family situation is at stake (§§ 801-804), and notwithstanding the vagueness of this connecting factor which confers a broad discretion to the judge (§§ 805-811), it is still necessary in this context to revalue nationality as a con-necting factor. The 9 “Quand […] on recherche la loi applicable à une question il s’agit toujours, sous une forme ou sous une autre, de déterminer le système juridique avec lequel la situation considérée a les liens les plus intimes, de manière à éviter que l’application aveugle de la loi du juge saisi ne désorganise une matière dont les éléments essentiels ont déjà été ou seront tôt ou tard nécessairement réglés selon une autre loi. Le souci de cohérence est inséparable d’une harmonie des résultats”: H. BATIFFOL, Aspects philosophiques du droit international privé, Préface Y. LEQUETTE, Dalloz, Paris, 2002, at 220-221 (translation by the author).

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Lukas Rass-Masson advantages in terms of stability and respect of the legal systems of Member States are indeed important considerations and must play a central role with respect to the validity of family relationships (§§ 814-824). This role must also be recognised, albeit in a more nuanced way, with respect to the effects of family relationships, for which the possibility to choose which national law is applicable must be possible under certain conditions (§§ 825-828). The problem of conflicting nationalities, which is often invoked against the use of nationality as connecting factor, is not an obstacle, since these conflicts are surmountable both with regard to the validity (§§ 831 -837) and the effects of the family relationship (§§ 838-842). The admission of the possibility to opt for national law as being applicable does not, however, imply adherence to a regime based on party autonomy. A “pure” and unlimited autonomy of the will would indeed be unsuitable, due to the individualism that it necessarily promotes (§§ 845-851) and the inevitable substantivity of the choice. This is perfectly illustrated by the hypothesis of a European divorce (§§ 852-861). The will of family members can only be accepted if its expression is subject to a binding framework, particularly with regard to the objective links existing between the chosen law and the family relationship in question. Such a stringent framework is incompatible with a classic understanding of party autonomy. This binding framework is necessary both to protect individual freedom and to ensure respect of family duties (§§ 863-874). As to the necessarily imperative nature of family law, the role of the State can be preserved so long as the choice of law is subject to sufficiently strict conditions, especially with regard to the objective links required between the family situation and the chosen law (§§ 875-890). Disrupted functioning of the regime refers to situations in which the public policy exception interferes with the normal operation of the rules. Ordre public is a very meaningful revealer of the institutional balance of European private international family law. Fundamental research on the public policy exception highlights the national dimension and the indispensable social function of ordre public. The foundation of this exception is not the neutrality of conflict of laws rules (§§ 898901), but the anteriority of the national legal system (§§ 902-907). The public policy exception relies on a necessary indeterminacy of the content of public policy (§§ 909-912) and the fundamentally central role of the judge (§§ 913-916). Transposed to the European context, these requirements, inherent to the public policy exception, underline the necessarily incomplete nature of European private international family law. In the event of a “diagonal conflict”,10 i.e. a conflict between European conflictual objectives and national substantive objectives, the European regime gives way to the unity of family status via the public policy, and national objectives prevail (§§ 920-924). In order to ensure the coherence of the regime, this solution should be extended to the refusal to recognise the situation resulting from the application of the public policy exception by another Member State (§§ 925-930). Nevertheless, the implications of the intervention of the public policy exception can be so detrimental for family relationships that European control 10 On the notion of “conflit diagonal”, see in particular J. HEYMANN, Le droit international privé à l’épreuve du fédéralisme européen, Economica, Paris, 2010, espec. p. 117 and p. 119-204.

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The Foundations of European Private International Family Law over the public policy exception should be carried out, in light of the principles of mutual trust and mutual recognition (§§ 936-942). The purpose must be to prevent the use of the public policy exception through the effective coordination between national legal systems, which requires in particular the existence of a coherent private international law system, based on the conflict of laws method (§§ 943953). The public policy exception makes it possible to understand that the only regime apt to provide satisfactory answers to the challenges of diagonal conflicts is a European private international family law based on the localisation of family situations construed in a manner that articulates the methods of private international law. Such a regime, based both on conflict of jurisdictions and conflict of laws, can confine ordre public to an extremely limited role in practice, without having to deny national competence and sovereignty in the application of the public policy exception. This articulation is also the only method which makes it possible to conceive the family law of the European Union in a way that ensures the unicity of the substantive integration of the family situation, while guaranteeing the effectiveness of this situation through the recognition of multiple jurisdictional integrations. It also enables the proper localisation of family situations through conflict of law rules by which the European Union’s private international law respects national identities and cultures. The European legislator can thus meet the objective of ensuring maximum respect of national laws. The existence of the European conflict of laws rule and its primacy over contradicting national norms would thus be justified, since the European rule would make it possible to achieve the unity of European family status while preserving the diversity of national family laws. The justification of the primacy of the European rule is thus also a condition for its application, in the sense that this rule is justified and must be applied if and so long as it achieves a harmonious and effective coordination of different national laws. This is the only way to reconcile the various foundations and objectives of European private international family law. In the absence of such coordination, national ordre public intervenes and constitutes an obstacle to the achievement of the unity of family status, since the other major European objective, which is respect for the diversity of national family laws, also deserves protection. Hence, everything is a question of balance between two conflicting objectives, and this balance must be found by national authorities under the control of the European authorities. The art of private international law is to avoid this conflict by simultaneously achieving both objectives through a conciliation that achieves them both. Such conciliation is often possible. Where it is not, the impossibility of conciliation probably marks the limits of European private international family law.

V.

Conclusion

Research on the foundations of European private international family law proves that the European Union, while proposing a private international law respectful of the concept of universality understood as implying plurality, could, in the field of Yearbook of Private International Law, Volume 20 (2018/2019)

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Lukas Rass-Masson family law (re-)discover the pluralistic identity of its devise “unity in diversity”. It could thereby gradually promote the identity of a genuine European citizen, who fulfils and identifies himself with the diversity of national laws and the harmonious coordination of their diversity. This coordination would ensure not only that each national family law is the result of a democratic process in which the citizen who is directly interested actively participates, but also and above all would ensure that each Member State can continue to defend its essential national values in the context of European federalism. Construed as the research for an ideal model where legal rules are consistent with the foundations of the relevant legal field, a study on the foundations of European private international family law probably finds its limits when its results are compared to positive law and contemporary evolutions in the matter. At a time when the European project seems to approach the dead point, including European private international family law, pleading in favour of a deepening of the European construction is a conclusion which may seem at the least hazardous. The reclassification of regulations on matrimonial property regimes and property consequences of registered partnerships into projects conducted in the framework of enhanced cooperation, the “downgrading” of the project on the free movement of public documents and civil status into a regulation of purely administrative nature and the delay taken in the revision of the Brussels IIa Regulation are all examples of the difficulties in deepening European private international family law. But it is perhaps precisely in such a context of multiplication of crises, be them of the European Union, of family law or of private international law, that it is necessary to fight in favour of an ideal conception of law, even if this ideal vision often takes on classic structures. This classicism is indeed a renewed classicism, adapted in order to meet the contemporary challenges of European private international family law. It is by fully accepting this prerequisite that we can still conceive a legal system respectful of its calling, which is not to adapt the law to the facts or to limit the regime to the consecration of factual situations. European private international family law can and must be founded on the true calling of each legal system: to ensure that the factual situations adapt and conform themselves to the law and the values conveyed by the law.

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(BREAKING) NEWS FROM THE HAGUE ________________

A GAME CHANGER IN INTERNATIONAL LITIGATION? ROADMAP TO THE 2019 HAGUE JUDGMENTS CONVENTION Andrea BONOMI*/ Cristina M. MARIOTTINI**

I. II. III.

IV. V. VI.

Introduction Goals and Architecture of the Convention The Scope of Application A. Material Scope 1. Civil or Commercial Matters 2. Exclusions 3. Definition of Judgments B. Geographical Scope Non-Exclusivity of the Convention General Provisions on Recognition and Enforcement Bases for Recognition and Enforcement A. Habitual Residence B. Jurisdiction Based on Consent 1. Explicit Consent 2. Implicit Consent 3. The Claimant’s or the Cross-Claimant’s Implicit Consent 4. Choice-of-Court Agreements C. Judgments in Contractual Matters 1. Place of Performance 2. A Purposeful and Substantial Connection D. Consumer and Employment Contracts E. Judgments in Tort Matters F Judgments on Immovable Property 1. The Exclusive Basis for Judgments on Rights in Rem in Immovable Property *

Professor at the University of Lausanne. Senior Research Fellow at the Max Planck Institute Luxembourg for Procedural

**

Law. Yearbook of Private International Law, Volume 20 (2018/2019), pp. 537-567 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Andrea Bonomi/Cristina Mariottini 2. 3.

VII. VIII. IX. X.

Judgments on Leases of Immovable Property Judgments on Residential Leases or on the Registration of Immovable Property 4. Judgments on Related Contractual Claims Grounds for Refusal of Recognition and Enforcement Preliminary Questions Procedure Concluding Remarks

I.

Introduction

On 2 July 2019, the Twenty-Second Diplomatic Session of the Hague Conference on Private International Law adopted the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (“2019 Hague Judgments Convention”).1 Thus, almost twenty years after an initial, unsuccessful attempt to set up a global instrument on jurisdiction and recognition and enforcement of judgments in civil or commercial matters and after the first partial, and nonetheless meaningful, achievement marked by the adoption of the 2005 Hague Convention on Choice of Court Agreements,2 the Hague Judgments Project has set up a new significant landmark in a core aspect of private international law in civil and commercial matters.3 As is well known, the Judgments Project initially focused on developing a “double convention” on both issues of jurisdiction and circulation of judgments. In this framework, two draft instruments were drawn up at the turn of the last century: the 1999 preliminary draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters (1999 preliminary draft Convention)4 and the 2001 1 On the same day of the signature of the Final Act of the 2019 Hague Judgments Convention, Uruguay signed the Convention. All the documents relating to the Judgments Project mentioned in this article, including the full text of the 2019 Hague Judgments Convention, are available on the website of the Hague Conference at under the “Judgments” section. 2 The Convention entered into force on 1 October 2015: it is currently in force between the European Union (including Denmark), Mexico, Montenegro, and Singapore. It was also signed by the United States in 2009, Ukraine in 2016, and the People’s Republic of China in 2017. More information on the Convention is available on the website of the Hague Conference at under “Choice of Court”. See also, among others, R.A. BRAND/ P.M. HERRUP, The 2005 Hague Convention on Choice of Court Agreements: Commentary and Documents (2008). 3 See A. BONOMI, Courage or Caution? A Critical Overview of the Hague Preliminary Draft on Judgments, this Yearbook 2015-2016, pp. 1-32. 4 See the “Preliminary draft Convention on jurisdiction and foreign judgments in civil and commercial matters, adopted by the Special Commission and Report by Peter

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The 2019 Hague Judgments Convention Interim Text.5 However, the fundamental differences that characterised, in each legal system, the understanding and shaping of jurisdiction hindered any possibility of reaching a global agreement on jurisdiction.6 The Judgments Project was subsequently scaled down to focus on forum selection agreements: this led to the conclusion of the Hague Convention of 30 June 2005 on Choice of Court Agreements. After resuming the Judgments Project in 2012 and investigating the Project’s possible trajectories,7 the Council on General Affairs and Policy of the Hague Conference opted for a “simple convention” focused on recognition and enforcement: in such an instrument, jurisdiction should only be regulated as a condition for recognition and enforcement, i.e., as “indirect jurisdiction.”8 Against this backdrop, a Working Group met between 2013 and 2015 and prepared a preliminary draft text9 on the basis of which, in 2016, the Council on General Affairs and Policy convened the Special Commission on the Recognition and Enforcement of Foreign Judgments.10 During the course of its meetings, the Special Commission discussed several drafts.11 Nygh and Fausto Pocar”, Prel. Doc. No 11 of August 2000 for the attention of the Nineteenth Session of June 2001, in Proceedings of the Twentieth Session (2005), Tome II, Judgments, 2013, p. 191. 5 See the “Summary of the Outcome of the Discussion in Commission II of the First Part of the Diplomatic Conference 6-20 June 2001 – Interim Text” prepared by the Permanent Bureau and the Co-Reporters, in Proceedings of the Twentieth Session (2005), Tome II, Judgments, 2013, p. 621. 6 The feasibility of a global convention on jurisdiction is scheduled to be explored again shortly: see Conclusions & Recommendations adopted by the Council on General Affairs and Policy of 5 to 8 March 2019, para. 5, mandating the Permanent Bureau to make arrangements for a further meeting of the Experts’ Group addressing matters relating to direct jurisdiction (including exorbitant grounds and lis pendens / declining jurisdiction), to be held the first week of February 2020. See also Conclusions & Recommendations adopted by the Council on General Affairs and Policy of 13 to 15 March 2018, para. 5. 7 See, respectively, the Conclusions & Recommendations adopted by the Council of 17 to 20 April 2012, para. 16, and the Conclusions & Recommendations of the Experts’ Group on Possible Future Work on Cross-border Litigation in Civil and Commercial Matters (Work. Doc. No 2 of April 2012 for the attention of the Council of April 2012 on General Affairs and Policy of the Conference). 8 See “Ongoing work on international litigation”, Prel. Doc. No 3 of March 2013 for the attention of the Council of April 2013 on General Affairs and Policy of the Conference, Annex 2, and the Conclusions & Recommendations adopted by the Council of 9 to 11 April 2013, para. 8. 9 See the Report of the fifth meeting of the Working Group on the Judgments Project and proposed draft text resulting from the meeting, Prel. Doc. No 7A of November 2015 for the attention of the Council of March 2016 on General Affairs and Policy of the Conference. 10 See the Conclusions & Recommendations adopted by the Council on General Affairs and Policy of 15 to 17 March 2016, para. 12. 11 A first preliminary draft Convention in 2016, the February 2017 draft Convention, the November 2017 draft Convention, and the 2018 draft Convention, respectively. A detailed assessment of the November 2017 draft Convention, notably vis-à-vis its interaction with the legal framework of the European Union, is offered in the Study “The Hague

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Andrea Bonomi/Cristina Mariottini In 2019, subsequent to the fourth and final meeting of the Special Commission, the Council tasked the Permanent Bureau with the preparation of the TwentySecond Diplomatic Session. The Diplomatic Session was held in The Hague from 18 June to 2 July 2019 and resulted in the adoption of the Final Act.12

II.

Goals and Architecture of the Convention

As underscored in its Preamble, the 2019 Hague Judgments Convention establishes a regime that fosters greater predictability and certainty in relation to the circulation of foreign judgments. The Convention aims to promote effective access to justice and to enhance trade, investment and mobility, thus contributing to both legal certainty and economic growth. In particular, the Convention is meant to increase foreseeability and reduce costs in the transaction phase of cross-border dealings; facilitate informed decisions on whether to bring claims and whether to file a response, based on the likelihood that the ensuing decision be eligible for recognition and enforcement; reduce the need for duplicative proceedings; and curb the costs and time frames associated with obtaining recognition and enforcement of judgments.13 The 2019 Hague Judgments Convention is meant to complement and coexist with the 2005 Hague Convention on Choice of Court Agreements. The structure of the Convention is quite traditional and does not present any surprises as such. Many general provisions reflect the solutions adopted by previous Hague Conventions on recognition and enforcement. They are also in conformity with the recognition systems that are currently applied in most recognitionfriendly countries. The Convention identifies the judgments that are eligible for recognition and enforcement and sets out common provisions with respect to recognition and enforcement. The core obligation established under the Convention is set out at Article 4, according to which a judgment given by a court of a Contracting State shall be recognised and enforced in another Contracting State in accordance with the provisions of Chapter 2. Notably, a judgment which satisfies the bases for recognition and enforcement put forth at Article 5 (see infra, section VI) is eligible for recognition and enforcement; however, the judgment’s eligibility to circulate may be Conference on Private International Law ‘Judgments Convention’” (April 2018), commissioned by the European Parliament and prepared by A. De Miguel Asensio, G. Cuniberti, P. Franzina, C. Heinze, and M. Requejo Isidro, available at http://www.europarl.europa.eu/RegData/etudes/STUD/2018/604954/IPOL_STU(2018)6049 54_EN.pdf. 12 See the Conclusions & Recommendations adopted by the Council on General Affairs and Policy of 5 to 8 March 2019, para. 4. 13 See esp. F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, paras 6 et seq.

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The 2019 Hague Judgments Convention challenged on the limited (and traditional) set of grounds for refusal of recognition and enforcement set out at Article 7 (see infra, section VII). This means that, if the criteria put forth under Chapter 2 are satisfied, a Contracting State may not refuse recognition or enforcement on other grounds under national law. In any case, if the criteria set out in the Convention are not met, the State addressed may still recognise or enforce the judgment under national law and under other bilateral or regional arrangements (Article 15; see more in detail infra, section IV), subject to Article 6 (which provides for an exclusive basis for recognition and enforcement of judgments ruling on rights in rem in immovable property). The Convention does not include any rules on lis pendens and parallel proceedings. At first glance, this might seem justified, because the instrument does not address (direct) jurisdiction. However, if one considers that pending proceedings and irreconcilable decisions represent very serious obstacles to the recognition and enforcement of foreign judgments (as it also clearly results from the Convention),14 the inclusion of some mechanism capable of preventing or at least reducing parallel proceedings would have certainly been desirable.15

III. The Scope of Application A.

Material Scope

1.

Civil or Commercial Matters

Articles 1(1) and 2 define the material scope of application of the Convention. Using a well-known technique – notably adopted in several EU Regulations, but also in the 2005 Choice of Court Convention (Articles 1 and 2) – they do so by first positively defining, in Article 1(1), which judgments are to be covered, namely judgments “in civil or commercial matters”. Article 1(1) goes on to explicitly exclude revenue, customs, and administrative matters. As in several EU instruments (and notably the Brussels I-bis Regulation), these express exclusions are meant to facilitate the application of the Convention in States whose national law does not establish a distinction between private and public law.16 Similar language was not included in the 2005 Choice of Court Convention since it was obvious that such public law matters could not be construed to be civil or commercial, as explained in the Hartley/Dogauchi Report,17 but also because the need for such clarification in the choice of court context was See Article 7(1)(e)-(f) and Article 7(2). This question will have to be discussed in the framework of the next phase of the Judgments Project: see supra, note 6. 16 F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para. 28. 17 T. HARTLEY/ M. DOGAUCHI, Explanatory Report, in Proceedings of the Twentieth Session (2005), Tome III, Choice of Court Agreements, p. 785, esp. footnote 73. 14 15

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Andrea Bonomi/Cristina Mariottini less stringent, as it would be uncommon for there to be a jurisdiction agreement relating to disputes in those matters.18 Article 2(4) clarifies that a judgment is not excluded from the scope of the Convention by the mere fact that a State, including a government, a governmental agency, or any person acting for a State, was a party to the proceedings. To mitigate the strength of this principle, some delegations insisted on the introduction of Article 19, under which a State may declare that it shall not apply the Convention to judgments arising from proceedings to which that State, or a governmental agency of that State, or a natural person acting for such a governmental agency, is a party. However, such declaration shall not distinguish based on the procedural position as claimant or defendant of the public body involved; therefore, a Contracting State making the declaration will not be able to avail itself of the Convention for the recognition and enforcement of a favourable judgment. Regardless, paragraph 5 of Article 2 clarifies that “[n]othing in the Convention is intended to affect the privileges and immunities of a State or of an international organization, in respect of themselves and of their property”. 2.

Exclusions

Article 2(1) then lists several matters that are specifically excluded from the material scope of the Convention. In this context, it should be noted that Article 18 on “declarations with respect to specific matters” offers the ultimate safeguard for those States that wish to further restrain the material scope of the Convention in their relationships with other Contracting States. Some of the exclusions under Article 2 mirror the list of excluded matters under Article 1(2) of the Brussels I-bis Regulation (status and capacity of natural persons, maintenance obligations, other family matters, wills and succession, insolvency, arbitration). In many respects, however, the Convention goes further and excludes matters that would otherwise fall into the category of civil or commercial matters. Some of these exclusions, such as the carriage of passengers and goods, liability claims for nuclear damages, and liability for maritime claims and general average, are accepted: they are also provided in Article 2 of the 2005 Choice of Court Convention and are mainly motivated either by the existence of other specific international instruments in the relevant areas or by the fact that those matters fall under exclusive jurisdiction in some legal systems. With respect to some of these areas, the scope of the 2019 Hague Judgments Convention is broader than that of the 2005 Hague Convention on Choice of Court Agreements. The 2019 Convention is applicable in disputes over emergency towage and salvage. The inclusion of such disputes is all the more remarkable, since none of the other existing international conventions that apply to these “Explanatory Note Providing Background on the Proposed Draft Text and Identifying Outstanding Issues”, Prel. Doc. No 2 of April 2016 for the attention of the Special Commission of June 2016 on the Recognition and Enforcement of Foreign Judgments, para. 23. 18

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The 2019 Hague Judgments Convention matters cover dispute resolution, and the circulation of the judgments on these matters is currently governed by national laws or regional instruments.19 Further complexity is introduced with respect to marine pollution. This matter is completely excluded from the scope of the 2005 Choice of Court Convention, on grounds that some existing conventions, which deal with recognition and enforcement, establish regimes with exclusive jurisdiction.20 However, Article 2(1)(g) of the 2019 Hague Judgments Convention breaks down the exclusion in three sub-parts, providing that only transboundary marine pollution, marine pollution in areas beyond national jurisdiction, and ship-source marine pollution be excluded from its scope. This way, the 2019 Convention avoids overlap with existing specialised instruments in the area of transboundary pollution, including maritime issues.21 Furthermore, it does not interfere with current attempts to regulate pollution in areas beyond States’ jurisdiction.22 However, at the same time it also ensures that domestic judgments on marine pollution covered by a State’s jurisdiction circulate under the Convention, hence expanding the outreach of the instrument and facilitating full compensation in those cases. The exclusion of other matters, such as defamation and privacy, intellectual property, and anti-trust matters (Article 2(1)(k)-(m) and (p), respectively), proved to be more controversial. The exclusion of defamation and privacy (Article 2(1)(k)-(l)) is premised on the divergent national laws and policies in these very sensitive areas.23 The recognition and enforcement of judgments on defamation and privacy usually call for a balancing exercise between fundamental principles (freedom of expression, on one hand, and personality rights, on the other) and are frequently denied if the contrary would amount to an unreasonable and disproportionate compromise of such 19 “Note on reconsidering ‘marine pollution and emergency towage and salvage’ within the scope of the draft Convention on the recognition and enforcement of foreign judgments in civil or commercial matters”, Prel. Doc. No 12 of June 2019, para. 61 et seq. 20 Such as the International Convention on Civil Liability for Bunker Oil Pollution Damage, IMO LEG/CONF.12/19; OJ [2002] L 256/7, Article 9, and the International Convention on Civil Liability for Oil Pollution Damage, 973 UNTS 3, 9 ILM 45, as amended by the 1992 Protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND 1992), Article 7. 21 “Note on reconsidering ‘marine pollution and emergency towage and salvage’ within the scope of the draft Convention on the recognition and enforcement of foreign judgments in civil or commercial matters”, Prel. Doc. No 12 of June 2019, para. 58. Pollution and environmental issues are dealt with by, in particular, the United Nations Environmental Program and the United Nations Environmental Assembly (https://web.unep. org/environmentassembly/). 22 A mechanism concerning the systems and laws for areas beyond national jurisdiction is currently tackled by Members of the United Nations in the context of the UN Convention on the Law of the Sea. See the Intergovernmental Conference on an international legally binding instrument under the United Nations Convention on the Law of the Sea on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction (U.N. General Assembly resolution 72/249). 23 C.M. MARIOTTINI, The Exclusion of Defamation and Privacy from the Scope of the Hague Draft Convention on Judgments, this Yearbook 2017-2018, pp. 475-486.

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Andrea Bonomi/Cristina Mariottini principles in the requested State. For instance, because of the strong U.S. policy,24 favouring freedom of expression under the First Amendment of the Constitution, there are significant obstacles in the U.S. to the recognition of foreign libel decisions.25 Similar challenges may arise also with respect to decisions on privacy: this area of the law is so delicate that conflicts may emerge to the detriment of the circulation of judgments, even between States that share, to a significant extent, a common understanding of procedural law and fundamental values, and are bound by a qualified degree of mutual trust as is the case of EU Member States.26 While the provision at Article 2(1) of the Convention omits any reference to judgments on data protection, intrusion or breach of confidence, these matters may be construed as excluded from the scope of the Convention insofar as they relate to the private life of the defendant.27 The question of the inclusion and treatment of judgments on intellectual property rights sparked one of the most lively discussions among members of the Special Commission: ultimately, the position of those delegations that favoured a general exclusion prevailed at the Diplomatic Session (Article 2(1)(m)). This outright exclusion is the result of the inherent complexity of this subject, which is largely governed by the principle of territoriality. It also recognises the different and variously nuanced views that States often have with respect to certain core issues related to intellectual property rights – including the fact that some aspects of it may be construed by some legal systems as falling within the realm of administrative or criminal law and may to some extent overlap with anti-trust matters. In any case, the exclusion of intellectual property from the scope of the Convention does not entail the exclusion of all contractual disputes with an IP component. 24 Also mirrored in the 2010 SPEECH Act, 28 U.S.C. §§ 4101-4105. See L.E. LITTLE, Internet Defamation, Freedom of Expression, and the Lessons of Private International Law, this Yearbook 2012-2013, pp. 181-204, esp. p. 196; C.M. MARIOTTINI, Freedom of Speech and Foreign Defamation Judgments: From New York Times v Sullivan via Ehrenfeld to the 2010 SPEECH Act, in B. HESS/ C.M. MARIOTTINI (eds), Protecting Privacy in Private International and Procedural Law and by Data Protection. European and American Developments, Nomos-Ashgate 2015, pp. 115-168. 25 In particular, under title 28 U.S.C. § 4102(a)(1), recognition and enforcement are possible only if the court addressed “determines that (A) the defamation law applied in the foreign court’s adjudication provided at least as much protection for freedom of speech and press in the case as would be provided by the first amendment to the Constitution of the United States and by the constitution and law of the State in which the domestic court is located […].” 26 See, for instance, BGH, 19 July 2018 - IX ZB 10/18 where the German Supreme Court (Bundesgerichtshof – BGH) declined to recognise and enforce a Polish judgment under the Brussels I Regulation (before the recast) on grounds that enforcement would conflict with German public policy. Notably, the Court ruled that, pursuant to Article 45 of the Brussels I Regulation, to mandate the defendant to publish an apology drafted by the court of origin as its own opinion would violate the defendant’s fundamental rights under Article 5(1) of the German Constitution. See B. HESS, Protecting Privacy by Cross-Border Injunction, 2 RDIPP 2019 (forthcoming). 27 See also F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para. 55.

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The 2019 Hague Judgments Convention The exclusion of anti-trust issues is more nuanced. In principle, this exclusion is rooted in the acknowledgment that anti-trust rules and regulations are very different among States and touch upon complex policy issues. Also, as with intellectual property, the characterisation of the legal nature of anti-trust matters is far from being uniform. Though synchronising the exclusion of anti-trust and intellectual property clarifies the scope of application of the Convention in the future, the provision at Article 2(1)(p) carves out some exceptions and enumerates specific judgments that are to be construed as falling within the scope of the Convention. Notably, judgments based on actual or potential anti-competitive behaviour based on conduct (agreement or concerted practice) are covered by the Convention, provided that both the conduct and its effect occurred in the market of the State where the judgment was rendered.28 Finally, Article 2(1)(q), a novelty if compared to discussions of the Special Commission, excludes, from the scope of the Convention, sovereign debt restructuring through unilateral State measures. Though obvious insofar as sovereign debt and restructuring processes fall within the realm of sovereign administration and, as such, do not qualify as civil or commercial matters, this provision – together with those found at Article 2(1)(n)-(o), excluding activities of armed forces and law enforcement activities from the scope of the Convention, Article 2(4)-(5) and Article 19 – assists in delineating the boundaries of the Convention when a State is involved in the proceedings that led to the judgment for which recognition or enforcement are sought.29 3.

Definition of Judgments

The broad definition of “judgments” included in Article 3(1)(b) also serves to specify the material scope of the Convention. While all judgments on the merits rendered in matters falling within the scope of the Convention are covered – including non-monetary judgments, default judgments and determinations of procedural costs or expenses (see also Article 14(2)) – the Convention is not intended to apply to interim measures of protection. Although such exclusion may be understandable in light of the restrictive approach adopted under various national legal systems, it is nevertheless disappointing in view of the great practical importance of interim relief.30

This inclusion has been adopted by consensus at the Diplomatic Session. Although the last condition may appear as the equivalent of a jurisdictional filter, its purpose seems to ensure that the Convention will not apply to judgments based on the extraterritorial application of anti-trust laws. 29 The language of the provision mirrors that of the Resolution adopted by the General Assembly on 10 September 2015: Basic Principles on Sovereign Debt Restructuring Processes, UN General Assembly (69th sess.: 2014-2015), A/RES/69/319/EN. 30 Note that the 1999 draft preliminary Convention was applicable to interim measures ordered by the court having jurisdiction to make decisions on the merits of a case (Article 13). 28

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Andrea Bonomi/Cristina Mariottini On the other hand, the recognition of judicial settlements – i.e., settlements approved by, or concluded before a court – is ensured by Article 11.31 Any conflict with the 2019 Singapore Convention on International Settlement Agreements Resulting from Mediation is pre-empted by Article 1(3) of said Convention, according to which, settlement agreements that have been approved by a court or reached during the course of judicial proceedings and that are enforceable as a judgment in the State of that court, do not fall within the scope of application of the Convention.32 B.

Geographical Scope

Article 1(2) clarifies that the 2019 Convention only applies to the recognition and enforcement of judgments in one Contracting State of a judgment given in another Contracting State. As with all existing conventions and regulations in the area of recognition and enforcement, the new instrument will be based on reciprocity and will thus only apply inter partes. Pursuant to Article 24(1) and (3), the Convention is open for signature and accession by all States, even those that are currently non-Member States of the Hague Conference. While such unrestricted openness reflects the instrument’s universality, it might also backfire and be perceived as a serious hindrance to ratification or accession. Since lack of trust in the legal and/or judicial systems of (certain) foreign countries is the primary reason for some States’ reluctance to recognise and enforce foreign judgments,33 the success of the Convention also depends on Contracting States (or States considering ratification or accession) being provided with the right to exclude treaty-obligations with other Contracting States that they perceive as “untrustworthy”. Since a full “bilateralisation” provision, as it was included, for instance, in Article 21 et seq. of 1971 Hague Judgments Convention34 and in Article 42, Option A, of the 2001 Interim Text,35 would have proved too complicated and potentially detrimental to the smooth functioning of the Convention, an “opt-out” mechanism, 31 Similarly, see Article 12 of the 2005 Hague Convention on Choice of Court Agreements. 32 United Nations Convention on International Settlement Agreements Resulting from Mediation adopted by the General Assembly on 20 December 2018 (62nd plenary meeting) and signed in Singapore on 7 August 2019. 33 See A. BONOMI, New Challenges in the Context of Recognition and Enforcement of Judgments, in F. FERRARI/ D.P. FERNANDEZ ARROYO (eds), The Continuing Relevance of Private International Law and Its Challenges, Elgar (forthcoming, 2019). 34 Pursuant to these provisions, the recognition and enforcement of decisions between two Contracting States is subject to them concluding a bilateral “Supplementary Agreement”. 35 See supra, note 5. Pursuant to this provision of the Interim Text, the (planned) Convention would “become effective” between any two Contracting States only “provided that the two States [had] each deposited a declaration confirming the entry into force between the two States of treaty relations under this Convention”.

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The 2019 Hague Judgments Convention allowing a Contracting State to exclude the application of the Convention in the relationship with one or more other Contracting States, was included at Article 29 during the Diplomatic Session. Article 29 lays down, at paragraph 1, the general policy by stating that the Convention shall have effect between two Contracting States “only if neither of them has notified the depositary” of its intention to avoid relations with the other. Such notification can be made in two cases, addressed in paragraphs 2 and 3 of the same provision: the first is where a Contracting State notifies the depositary that it objects to establishing relations with a State having deposited its instrument of ratification or accession (paragraph 2), the second one is where a newly Contracting State objects to establishing relations with another Contracting State (paragraph 3). While a Contracting State has 12 months, under paragraph 2, to object, given the delicate nature of an objection, particularly for a Regional Economic Integration Organization, a similar period is not provided for newly Contracting States. A newly Contracting State has time to consider its decision to object before taking formal steps to ratifying or acceding to the Convention. Finally, paragraph 4 regulates the withdrawal of objections, which can be made at any time. A withdrawal takes effect three months after its notification to the depositary. It should be noted that neither the 2005 Choice of Court Convention, nor the 2019 Singapore Convention on International Settlement Agreements Resulting from Mediation or the 1958 New York Convention on Arbitral Awards includes a similar opt-out clause,36 however, it is reasonable to assume that the fact that these Conventions focus on respect for party autonomy generated fewer policy reasons for objections.37

IV. Non-Exclusivity of the Convention According to Article 15, the Convention is not exclusive and will thus not prevent the recognition and enforcement of judgments under national law of the Contracting States. This provision reflects a classic approach followed in most international instruments for the recognition and enforcement of foreign judgments: since the goal of such instruments is to facilitate the transnational circulation of decisions, they normally do not prevent the application of national rules where these better serve that objective. Another well-known expression of this same principle is

36 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York on 10 June 1958, 330 UNTS 38; 21 UST 2517; 7 ILM 1046 (1968). 37 On the other hand, see (albeit with significant differences in the drafting of the opt-out clause compared to the one found in the 2019 Hague Judgments Convention) the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, at Article 28 and the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, at Article 39.

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Andrea Bonomi/Cristina Mariottini Article VII of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.38 It follows from Article 15 that the criteria put forth under Chapter 2 of the 2019 Hague Judgments Convention are not designed to be exclusive or exhaustive; rather, the Convention sets minimum requirements for recognition and enforcement. The only exception are judgments falling within in the scope of Article 6, a provision that expressly limits the circulation of judgments on rights in rem in immovable property to those rendered by a court of the State where the property is situated. The non-exclusivity of the Convention might have been implicitly deduced by its goal (favor recognitionis). However, the inclusion of express language must be met with approval because it prevents possible misunderstandings on the exclusive or non-exclusive application of the instrument, such as those generated, for instance, by the 1970 Hague Evidence Convention.39 Article 15 will probably be quite relevant in practice. As a matter of fact, the Convention might prove on several points (and in particular with regard to indirect jurisdiction) to be less recognition-friendly than the national law of several Contracting States.40

V.

General Provisions on Recognition and Enforcement

Article 4(1) lays down the basic obligation under the Convention, based on which recognition or enforcement may be refused only on specific grounds outlined in the Convention. The same provision also reaffirms some general principles on recognition and enforcement, mostly drawn from the 2005 Choice-of-Court Convention. Thus Article 4(2) states that there will be no review of the foreign judgment on the merits. Article 4(3) makes clear that recognition is only possible if the judgment has effect in the State of origin, and enforcement is only possible if the judgment is enforceable in that State (Article 4(3)). 38 Pursuant to Article VII of the 1958 New York Convention, “[t]he provisions of the present convention shall not […] deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.” 39 Contrary to most European Contracting States, U.S. courts consider that the Hague Evidence Convention does not exclude the application of national procedural rules: see Société Nationale Industrielle Aérospatiale v. U.S. District Court, 482 U.S. 522 (1987). 40 While the Convention does not include a provision such as Article 5(1)(k) of the Working Group’s Proposed Draft Text of November 2015, according to which recognition and enforcement would also have been possible if the court of origin “would have had jurisdiction in accordance with the national law of the requested State,” Article 15 will probably have the same effect.

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The 2019 Hague Judgments Convention Similar to the Brussels I-bis Regulation, but contrary to what is provided in several national recognition systems, the Convention allows for recognition and enforcement of a non-final judgment, provided that it has effects and is enforceable in the country of origin. However, the Contracting States are under no obligation in this respect. Thus, when the judgment is still subject to review, or when the time limit for seeking ordinary review has not expired, the courts of the requested State may refuse recognition or enforcement or postpone it until the final judgment; obviously, a refusal does not prevent a subsequent application for recognition or enforcement once the judgment has become final (Article 4(4)). This range of possible options will allow the courts of the Contracting States to choose the solution that best fits the particular case. However, national practices will also have an impact. Thus, it is likely that courts in the EU Member States will be more easily prepared to grant immediate recognition or enforcement under a security provision because this possibility is already provided for within the Brussels systems. Meanwhile, courts in other less recognition-friendly countries will probably more easily opt for a refusal or a stay of proceedings, which might result in some disparities in the application of the Convention. In accordance with Article 9, recognition or enforcement of a severable part of a judgment can also be granted where an application for recognition or enforcement of only that part is made, or when only a part of the judgment is capable of being recognised or enforced under the Convention. For instance, in accordance with Article 10, only part of a judgment awarding, i.a., punitive or exemplary damages may be recognised or enforced by the court of the requested State under the Convention (see more in detail infra, section VII).

VI. Bases for Recognition and Enforcement Article 5 lists the grounds for recognition and enforcement: it is at the heart of the 2019 Convention. In contributing, on the one hand, to the claimant’s choice on where to file a claim and, on the other hand, to the defendant’s decision on whether to appear and defend the case, jurisdictional filters assist the parties to design a litigation strategy based on the eligibility of the ensuing judgment to circulate in other Contracting States. Rather than putting forth jurisdictional filters that are as broad as possible, Article 5 identifies areas of commonality with a view to increasing acceptance. 41 Broad jurisdictional filters would hardly have garnered general acceptance at the negotiation stage and would hinder the prospect of signature/ratification, thus undermining the Convention’s chances of effectiveness – “Explanatory Note Providing Background on the Proposed Draft Text and Identifying Outstanding Issues”, Prel. Doc. No 2 of April 2016 for the attention of the Special Commission of June 2016 on the Recognition and Enforcement of Foreign Judgments, para. 63, stating that: “The goal was to identify the circumstances in which the person against whom recognition or enforcement was sought could not reasonably claim that the proceeding should have been heard in some other court”. 41

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Andrea Bonomi/Cristina Mariottini As a result of the Convention’s focus on recognition and enforcement, the courts of the Contracting States will continue to apply their national rules on jurisdiction, including those grounds that are not listed as jurisdictional filters under the Convention. In planning their litigation strategy, claimants will have to decide whether they wish to bring proceedings on “exorbitant” jurisdictional grounds, knowing that, if they do so, they may be unable to take advantage of the Convention. However, even in those instances where the court of origin establishes jurisdiction on grounds that are not listed under Article 5, the ensuing judgment may still benefit from circulation under the Convention, provided there is a basis for recognition as set out under this instrument. The case, for instance, may be of a court of origin establishing its jurisdiction on grounds that it is located in the State where the damage occurred or on grounds that the claimant is a national of the forum State (grounds that are not listed under Article 5): the judgment will still be eligible for recognition and enforcement if, e.g., the habitual residence of the person against whom recognition and enforcement is sought also happens to be situated in the State of origin. A.

Habitual Residence

Pursuant to Article 5(1)(a), a judgment is eligible for recognition and enforcement if the person against whom such recognition or enforcement is sought was habitually resident in the State of origin at the time that person became a party to the proceedings. This is one of the few “general” bases for recognition included in the Convention. As such, it is meant to apply to all kinds of judgments within the scope of application of the instrument, the only exception being those rendered in violation of the exclusive jurisdiction rule under Article 6. Of the jurisdictional filters under Article 5(1), the one at sub-paragraph (a) is also the only one whereby indirect jurisdiction is based solely on connections between the person against whom recognition is sought and the State of origin. All the other filters in paragraph 1 are based either on consent or on connections between the court of origin and the dispute giving rise to the judgment. Being the expression of the widely-accepted principle actor sequitur forum rei, this provision mirrors jurisdictional grounds that are accepted in most national legal systems and international instruments. However, it does present some original features. A first particularity is that – contrary to similar provisions currently applicable in some national or supranational systems42 – Article 5(1)(a) does not refer to

In Europe, the equivalent is obviously Article 4(1) of the Brussels I-bis Regulation, (Regulation (EU) No 1215/2012, OJ [2012] L 351, p. 1). For the U.S., see § 5(a) of the 2005 Uniform Recognition Act and § 5(a) of the 1962 Uniform Recognition Act. See R.A. BRAND, New Challenges in the Recognition and Enforcement of Judgments, in F. FERRARI/ D.P. FERNANDEZ ARROYO (eds), The Continuing Relevance of Private 42

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The 2019 Hague Judgments Convention a party’s domicile, but to his/her habitual residence. This solution is based on the frequently voiced concern that the notion of domicile could be interpreted in different ways in the Contracting States based on traditional local understanding. The same concern has led to the surge in popularity of habitual residence in the Hague Conventions as well as in most European Regulations. According to the Convention, corporations and other legal persons also have a “habitual residence.” Of course, this use of the notion of habitual residence is not completely novel: in Europe, we find it in the Rome I and Rome II Regulations.43 And in the U.S., this notion seems to be in line with the “essentially at home” metaphor used by the Supreme Court in the Goodyear and Daimler cases – language that undoubtedly resembles the notion of habitual residence. While the habitual residence of a natural person is not defined, the Convention provides for a definition of a legal person’s habitual residence (Article 3(2)). This definition, which is drawn from the 2005 Hague Choice of Court Convention (Article 4(2)), very closely resembles that included in current Article 63 of the Brussels I-bis Regulation. Unsurprisingly, the Convention does not allow general jurisdiction based on “doing-business” in the forum State – a U.S. doctrine that was sharply criticised abroad and finally rejected in the Goodyear and Daimler judgments of the Supreme Court. “Doing business” in a State is not the same as having the “principal place of business” there: the threshold for a court to render a decision capable of recognition or enforcement under the Convention should be distinctly higher. Similarly, the simple fact that the defendant has a branch, agency, or establishment, i.e. a “place of business” in the forum State will not be sufficient to assert general jurisdiction. Following the approach of the Brussels I-bis Regulation (Article 7(5)), the Convention allows in Article 5(1)(d), for the recognition and enforcement of a judgment given at the place of a defendant’s branch, agency, or other establishment, but only if “the claim on which the judgment is based arose out of the activities of that branch, agency, or other establishment.” As this condition makes clear, this is not a rule of general jurisdiction, but only one of specific jurisdiction. Another peculiar feature of the proposed Article 5(1)(a), is that it does not refer to the habitual residence “of the defendant,” but rather of “the person against whom recognition or enforcement is sought.” This terminology makes sense because, as mentioned, the Convention does not deal with (direct) jurisdiction; it only provides bases for recognition and enforcement. Obviously, recognition and enforcement of a judgment can be sought not only against the original defendant, but against everyone who has become a party to the foreign proceedings (including cases of joinder, intervention, impleader, interpleader, subrogation, and succession).44 International Law and Its Challenges, Elgar (forthcoming, 2019), U. of Pittsburgh Legal Studies Research Paper No 2018-29, esp. section II. 43 See Rome I Regulation (Regulation (EC) No 593/2008, OJ [2008] L 177, p. 6), Article 19; Rome II Regulation (Regulation (EC) No 864/2007, OJ [2007] L 199, p. 40), Article 23. 44 “Explanatory Note Providing Background on the Proposed Draft Text and Identifying Outstanding Issues”, Prel. Doc. No 2 of April 2016 for the attention of the

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Jurisdiction Based on Consent

Establishing a composite regulation based on sub-sets of provisions, the 2019 Hague Judgments Convention articulates jurisdiction based on consent in different variations: Article 5(1) governs, at sub-paragraph (e), express consent given during the course of the proceedings before the court of origin; subparagraph (f) of the same provision regulates implicit consent; the claimant’s implicit consent is also the rationale for the recognition basis of the provision at sub-paragraph (c); finally, non-exclusive choice of court agreements are regulated at sub-paragraph (m). By contrast, exclusive choice-of-court agreements do not constitute a recognition basis under the new instrument: the recognition and enforcement of judgments based on such agreements is left entirely to the 2005 Choice-of-Court Convention. Also, some restrictions apply to the relevance of jurisdiction based on party autonomy, notably vis-à-vis the circulation of, on the one hand, judgments rendered against a consumer or an employee (Article 5(2)) and, on the other hand, judgments on rights in rem in immovable property, regarding which Article 6 sets out an exclusive basis for recognition and enforcement. 1.

Explicit Consent

Article 5(1)(e) establishes two preconditions for consent to jurisdiction to operate as a basis for recognition and enforcement: the defendant must have given express consent to the jurisdiction of the court of origin and such consent must have been given “in the course of the proceedings” which later resulted in the judgment for which recognition and enforcement is sought. The precondition whereby express consent must be given during the course of proceedings does not mandate that consent be necessarily given before the court: for instance, consent expressed in court documents (e.g., memoranda, briefs, statements) that are exchanged between the parties in the course of the proceedings also satisfies such a precondition. The provision at Article 5(1)(f) is based on the uncontroversial notion that express consent is a widely accepted basis for recognition and enforcement. It is also premised on the assumption that a defendant who has expressed its consent cannot legitimately object on jurisdictional grounds to the circulation of the ensuing judgments. Like the jurisdictional filter on habitual residence, and subject to Articles 5(2) and 6, express consent applies to all judgments covered by the Convention, regardless of the nature of the claim.

Special Commission of June 2016 on the Recognition and Enforcement of Foreign Judgments, para. 81.

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The 2019 Hague Judgments Convention 2.

Implicit Consent

According to Article 5(1)(f), a foreign judgment is eligible for recognition and enforcement if the defendant argued on the merits before the court of origin without contesting jurisdiction. The circulation of judgments rendered in proceedings where the defendant tacitly submitted to jurisdiction also mirrors a widely-accepted rule.45 Unlike sub-paragraph (e) of the same provision, Article 5(1)(f) governs the case where consent is implied (as opposed to expressed) during the proceedings from the defendant arguing on the merits and failing to challenge jurisdiction, in spite of grounds on which to legitimately object. To ensure that consent is actually voluntary, the provision restricts the scope of implicit consent: in particular, for the purposes of sub-paragraph (f) implied consent is established provided that: (i) the defendant argued on the merits before the court of origin; and (ii) the defendant failed to contest jurisdiction “within the timeframe provided in the law of the State of origin”. Moreover, unlike most national or international systems, the Convention puts forth a negative precondition in accordance to which (iii) uncontested appearance does not entail consent when “it is evident that an objection to jurisdiction or to the exercise of jurisdiction would not have succeeded” under the law of the State of origin. The rationale of this condition is clear: uncontested appearance should not be regarded as implied consent to jurisdiction when the defendant did not have good grounds to contest the foreign court’s jurisdiction. In light of the burdens of proof that surround tacit submission, it is reasonable to presume that implied consent will come into play as a residual ground for recognition and enforcement, i.e. in case the other jurisdictional filters under the Convention are not satisfied. 3.

The Claimant’s or the Cross-Claimant’s Implicit Consent

Implicit consent is also the underlying rationale for the jurisdictional filter put forth at Article 5(1)(c), according to which the judgment against the claimant is eligible for recognition and enforcement without any further requirements. Since it is the claimant who chooses where to bring a claim, it would be contradictory to then allow the same individual to challenge the circulation of the ensuing judgment on grounds of jurisdiction. Accordingly, regardless of the fact that a counterclaimant’s procedural position is analogous to that of a claimant, the provision clarifies that the same rule does not apply to counterclaims since a counterclaimant is not the one who chooses where to bring the claim. Nevertheless, indirect jurisdiction can also be based on a counterclaim: in this respect, Article 5(1)(l) distinguishes between judgments in favour of the counterclaimant and judgments against the counterclaimant. In the first case, pursuant to subparagraph (i) the claimant’s implicit consent allows for recognition of a judgment in favour of a counterclaimant, provided the

45

See Article 26 of the Brussels I-bis Regulation.

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Andrea Bonomi/Cristina Mariottini counterclaim arose from the same transaction or the same occurrence as the original claim. By contrast, if the court ruled against the counterclaimant, the judgment’s eligibility for recognition and enforcement on the basis of the counterclaimant’s implied consent is limited to the case where the latter freely decided to assert his claim as a counterclaim instead of bringing a separate suit (“permissive counterclaim”). By contrast, consent may not be presumed when the law of the country of origin required the counterclaim to be filed in order to avoid preclusion (“compulsory counterclaim”, Article 5(1)(l)(ii)).46 4.

Choice-of-Court Agreements

According to Article 5(1)(m), a judgment is also eligible for recognition and enforcement if the rendering court was designated in an agreement “other than exclusive choice of court agreements”. The provision does not explicitly mention that it is meant to regulate agreements reached prior to the commencement of proceedings; however, this may be reasonably implied in light of the fact that an agreement reached during the proceedings would be the result of the defendant consenting to jurisdiction of the court seized (see Article 5(1)(f)).47 With regard to the formal validity of the choice-of-court agreement, the new Convention follows the liberal approach of the 2005 Choice of Court Convention and only requires that the agreement be recorded in such a way as to make it accessible for future reference. To avoid overlap with the 2005 Convention and discouraging States from ratifying that instrument, exclusive choice of court agreements are not covered by the 2019 Hague Judgments Convention.48 Consistency in the coordination between the two instruments is also furthered by the fact that the notion of “exclusive choice of court agreement” in sub-paragraph (m) is modelled on the one found at Article 3 of the 2005 Convention. However, a judgment, rendered on the basis of an exclusive choice of court agreement, by the court of a State that is not a Contracting State to the 2005 Hague Choice of Court Convention but that has ratified the 2019 Hague Judgments Convention, would still be eligible for recognition and enforcement under the national rules on recognition and enforcement of the State addressed, as it follows from the non-exclusivity rule of Article 15.

For example, see Rule 13(a) of the U.S. Federal Rules of Civil Procedure. In the same vein see also F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para. 219. 48 See also Article 23, esp. paragraph (2) on the relationship between the 2019 Hague Judgments Convention and international instruments concluded before it. 46 47

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The 2019 Hague Judgments Convention C.

Judgments in Contractual Matters

In accordance with Article 5(1)(g), a judgment ruling on a contractual obligation is eligible for recognition or enforcement if it was rendered by a court of the State in which performance of that obligation took place or should have taken place under the parties’ agreement, or, absent such an agreement, in accordance with the law applicable to the contract. Regardless of whether this condition is satisfied, recognition or enforcement can still be denied if “the defendant’s activities in relation to the transaction clearly did not constitute a purposeful and substantial connection” to that State. This provision exemplifies an interesting attempt to draw a compromise between diverging underlying principles regarding jurisdiction, as further detailed below. 1.

Place of Performance

While the first condition, based on the place of performance of the contractual obligation, is clearly reminiscent of the European rules of specific jurisdiction in contractual matters (Article 7(1) of the Brussels I-bis Regulation), the rule at Article 5(1)(g) of the Convention does not entirely mirror those included since 2001 in the Brussels regime, and more closely resembles the original Brussels Convention, as interpreted by the European Court of Justice (ECJ). On the one hand, unlike the Brussels I-bis Regulation – where the relevant obligation is often the “characteristic” obligation (as is the case for the sale of goods and provision of services under Article 7(1)(b) of the current Brussels system) – the Convention identifies, in the obligation on which the judgment has “ruled”, the relevant factor with a view to establishing jurisdiction. This language seems to point to the “disputed obligation” or the “obligation in question”, as it is called in Europe since the 1976 De Bloos decision49 (which is of course still relevant today under Article 7(1)(a) of the Brussels I-bis Regulation, but only for contracts other than for the sale of goods or the provision of services). This means that, under the Convention, the place of performance will be determined based on which party has brought the claim (e.g. the place of delivery if the claim was brought by the buyer, and the place of payment if the claim was brought by the seller). On the other hand, unlike the Brussels I-bis Regulation, the Convention holds that, absent an agreed place of performance, the latter is to be determined by reference to the law applicable to the contract (lex contractus). This mirrors the well-known Tessili case law of the ECJ50 – which is still relevant under the current Brussels regime for contracts governed by Article 7(1)(a), however not for the sale of goods and provision of services under Article 7(1)(b).

ECJ, Case 14/76, De Bloos, ECR [1976] 1497. ECJ, Case 12/76, Tessili, ECR [1976] 1473; ECJ, Case C-288/92, Custom Made, ECR [1994] I-2913; ECJ, Case C-440/97, Groupe Concorde, ECR [1999] I-6307. 49 50

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Andrea Bonomi/Cristina Mariottini The consequence of such differences is that a judgement rendered by the court of a Member State based on the Brussels I-bis Regulation will not necessarily benefit from recognition and enforcement in the (non-European) Contracting States of the Convention. 2.

A Purposeful and Substantial Connection

According to the last sentence of Article 5(1)(g), recognition and enforcement of a judgment on a contractual obligation given at the place of performance is in any event excluded, if “the defendant’s activity in relation with the transaction clearly did not constitute a purposeful and substantial connection to that State.” This part of the provision introduces a safeguard by prescribing that a fuller analysis of the contacts of the defendant with the State of origin be performed for the purposes of recognition and enforcement of a judgment under the jurisdictional filter on contractual matters. The wording of the “purposeful and substantial connection” test included in the provision may be described as a hybrid stemming from the U.S.’s “purposeful availment” and Canada’s “real and substantial connection” tests to establish a constitutionally proper jurisdiction. 51 On one hand, the U.S. Supreme Court has interpreted the Fourteenth Amendment of the U.S. Constitution (in accordance to which no state shall “deprive any person of life, liberty, or property, without due process of law”) as limiting personal jurisdiction to those cases in which the defendant “purposefully availed itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws”52 in such a manner that the defendant “should reasonably anticipate being hauled into court” in that State.53 On the other hand, in a sequence of decisions the Supreme Court of Canada (SCC) has developed a test that, rather than looking into the purposeful nature of the defendant’s activity, focuses on the existence of a real and substantial connection. Unlike the U.S. Supreme Court’s, the SCC appeared to suggest that the

51 See the “Note on the concept of ‘Purposeful and Substantial Connection’ in Article 5(1)(g) and 5(1)(n)(ii) of the February 2017 draft Convention” by R.A. Brand and C.M. Mariottini, Prel. Doc. No 6 of September 2017. 52 The “purposeful availment” requirement was first set out by the Supreme Court in Hanson v. Denckla, 357 U.S. 235, 253 (1958), as a refinement of the International Shoe’s “minimum contacts” test. The rationale behind it is that the contacts between the defendant and the forum should not be “random, fortuitous, or attenuated”, nor be a result “of the unilateral activity of another party or a third person,” but be created from purposeful actions of the defendant himself. 53 World-Wide Volkwagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). See more recently Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty.,582 U.S. ___ (2017) (Sotomayor, J., dissenting), where the U.S. Supreme Court – relying on Walden v. Fiore et al., 571 U.S. ___ (slip op., at 8) (2014) – ruled that “for specific jurisdiction, a defendant’s general connections with the forum are not enough”.

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The 2019 Hague Judgments Convention connection could be between the forum State and either the cause of action or the defendant.54 This provision introduces a certain degree of uncertainty given the possibility of different interpretations, especially by those courts whose national laws are not immediately familiar with the provision’s underlying notions. Judgments rendered at the place of performance will often satisfy the “purposeful and substantial connection” test. This will more easily be the case when the performance entails a plurality of acts to be performed in the forum State, and the defendant actually accomplished at least some of these acts there (or expressly agreed to do so). By contrast, a purposeful and substantial connection might be considered as lacking, when performance in the forum State consists of one single act (e.g. the delivery of the goods), unless the defendant created other purposeful contacts with that State. A fortiori, when the place of performance does not result from actual acts accomplished by the defendant, nor from the express contractual terms, but only from subsidiary rules of the lex contractus, recognition or enforcement might be refused under the Convention, even if the judgment was rendered at the place of performance. D.

Consumer and Employment Contracts

In partial derogation from the recognition bases discussed above, the Convention includes some special rules for the protection of consumers and employees in those cases where recognition and enforcement is sought of a judgment against a consumer or an employee.55 The Convention does not mandate exceptions with respect to the eligibility to circulate of judgments rendered in favour of consumers or employees, which therefore, remain subject to the rules put forth in paragraph 1. This differentiation is premised on the assumption that, in those latter instances, consumers and employees may actually benefit from the fact that a judgment rendered in their favour is eligible for circulation on additional grounds. The exceptions put forth at Article 5(2) tackle jurisdiction based on consent and jurisdiction based on the place of performance of a contractual obligation. Notably, Article 5(2)(a) limits the relevance of Article 5(1)(e) on express consent given in court only to those instances where “consent was addressed to the court, orally or in writing”. Contrary to other cases, implied consent cannot be inferred from other acts, such as the memoranda exchanged by the parties. Under Article 5(2)(b), the recognition basis under Article 5(1)(f), (g) and (m) cannot be invoked as against a consumer or an employee. This rules out implicit consent, the ground for special recognition based on the place of performance, and non-exclusive choice-of-court agreements. 54 See the “Note on the concept of ‘Purposeful and Substantial Connection’ in Article 5(1)(g) and 5(1)(n)(ii) of the February 2017 draft Convention” by R.A. Brand and C.M. Mariottini, Prel. Doc. No 6 of September 2017, esp. para 23. 55 Such contracts are excluded from the scope of the 2005 Choice of Court Convention (Article 2(1)(a)-(b)).

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Andrea Bonomi/Cristina Mariottini It follows from the exceptions carved out at Article 5(2) that eligibility to circulate judgments against a consumer or employee is limited to those judgments rendered by a court of the State of that person’s habitual residence except where the consumer or employee addressed, to the court seized, express consent to the jurisdiction of that court.56 While excluding some of the recognition bases, the Convention does not provide for specific grounds in the interest of weak parties. In particular, contrary to the approach under the Brussels I-bis Regulation, judgments obtained by a consumer or an employee in his or her country of domicile will not be entitled to recognition under the Convention unless they meet one of the existing grounds for recognition and enforcement under Article 5. Moreover, unlike the Brussels I-bis Regulation, the Convention does not put forth a specific provision for judgments on insurance contracts. E.

Judgments in Tort Matters

Under Article 5(1)(j) a judgment on a non-contractual obligation arising from death, physical injury, damage or loss of tangible property is entitled to recognition and enforcement “if the act or omission directly causing such harm occurred in the State of origin, irrespective of where the harm occurred.” This special jurisdictional ground based on the place of wrongful conduct is widely accepted internationally. By contrast, recognition is not granted to judgments rendered at the place of the harmful event (place of the damage). While in line with U.S. case law, this departs from the broad jurisdictional approach of the Brussels I-bis Regulation and of several European countries. The narrow scope of this provision is intended to increase acceptance of the Convention. It should be stressed that this provision does not cover damage to intangible rights, in line with the exclusion of intellectual property rights that was finally decided at the Diplomatic Session. The fact that this provision is tailored to cover only physical injury (including death) and damage or loss of tangible property could have been an argument in support of the inclusion of judgments on non-contractual defamation or privacy matters within the Convention’s scope of application. In fact, as a result of the narrow scope of the provision, judgments on such matters would not circulate under Article 5(1)(j). It follows that the problem of identifying, with respect to such matters, the place of the act or omission that directly caused the harm, would not arise in the context of the Convention.57 56 F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para. 231. 57 Specifically tackling privacy (including defamation) in the cross-border setting is the work undertaken in the framework of, respectively, the ILA Committee on the Protection of Privacy in Private International and Procedural Law at and the IDI 8th Commission on Internet and the Infringement of Privacy: Issues of Jurisdiction, Applicable Law and Enforcement of Foreign Judgments at .

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The 2019 Hague Judgments Convention F.

Judgments on Immovable Property

Under the Convention, the grounds for circulation of judgments on immovable property are listed in a sub-set of provisions. 1.

The Exclusive Basis for Judgments on Rights in Rem in Immovable Property

Article 6 sets out a rule of exclusive jurisdiction for recognition and enforcement purposes that closely resembles some of the rules included in Article 24 of the Brussels I-bis Regulation. According to Article 6, a judgment on rights in rem in immovable property shall be recognised and enforced “if and only if” it is rendered by the courts of the State where the property is situated. Unlike the grounds for recognition and enforcement at Article 5 (that establish a minimum standard for recognition and enforcement but, in accordance with Article 15, do not prevent recognition of foreign judgments that satisfy other criteria for recognition provided under national law), the obligation put forth at Article 6 is two-fold: on the one hand, it positively mandates (subject to Article 7) recognition and enforcement, in a Contracting State, of a judgment rendered by a court of the State where the property is located; on the other hand, it negatively requires the courts of a Contracting State to refuse recognition and enforcement of a judgment rendered in this matter by the court of any other State. Rights in rem in immovable property and tenancies of immovable property are excluded from the scope of the 2005 Hague Choice of Court Convention (Article 2(2)(l)): this ensures consistency and coordination between the 2005 and 2019 Conventions. It is noteworthy that Article 6 underwent significant amendments during the Twenty-Second Diplomatic Session. On one hand, the exclusive basis for the circulation of judgments on “the [registration or] validity of an intellectual property right” originally put forth at Article 6(a) of the 2018 May Draft Convention was repealed subsequent to the exclusion of intellectual property from the matters covered by the 2019 Hague Judgements Convention (Article 2(1)(m)). On the other hand, the rules on judgments on residential lease of immovable property were removed from Article 6 and replaced by specific rules under Article 5. 2.

Judgments on Lease of Immovable Property

Article 5(1)(h) regulates the lease of immovable property (tenancy) by providing that such judgments are eligible for circulation if they were rendered by the court of the State in which the property is situated. This provision, which embodies a widely acknowledged rule, lays down a specific ground for recognition and enforcement which is not intended to be exclusive, i.e. it does not rule out that such judgments circulate under a different jurisdictional filter (for instance, on grounds of habitual residence pursuant to sub-paragraph (a)).

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Judgments on Residential Lease or on the Registration of Immovable Property

By contrast, pursuant to Article 5(3) a judgment ruling on residential lease of immovable property, or on the registration of immovable property is eligible for recognition and enforcement “only if it was given by a court of the State where the property is situated”, to the exclusion of all the other grounds put forth at paragraph 1. The provision at Articles 5(1)(h) and 5(3) of the Convention are based on the same jurisdictional filter in that they both identify, in the State where property is situated, the relevant connecting factor. However, unlike Article 5(1)(h), Article 5(3) makes this jurisdictional filter to a certain extent “exclusive” when it comes to residential (as opposed to non-residential or commercial) leases. Nonetheless, the character of this “exclusivity” is not the same as the one under Article 6: in fact, unlike the provision under Article 6, the provision at Article 5(3) is without prejudice to Article 15, i.e. it does not prevent the recognition and enforcement of a judgment rendered elsewhere if the judgment is eligible for recognition and enforcement pursuant to the national law of the State addressed. This distinction was introduced during the Twenty-Second Diplomatic Session. In the May 2018 Draft Convention, judgments on “tenancy on immovable property for a period of more than six months” fell within the scope of exclusive grounds for recognition and enforcement under the then Article 6(c), whereas the text emerging from the Twenty-Second Diplomatic Session requalifies the provision as non-exclusive for the purpose of Article 15. It also drops the time requirement (an element that, while present at the EU level,58 is not broadly recognised), introduces the distinction between residential and commercial leases, and extends the scope of the provision so as to also include also the registration of immovable property. 4.

Judgments on a Related Contractual Claim

Finally, Article 5(1)(i) furthers the circulation of a judgment against the defendant arising from proceedings in which a claim on a contractual obligation secured by a right in rem in immovable property was joined with a claim relating to that right in rem. This provision ties into the one at Article 6 in that it facilitates the circulation of a judgment against the defendant on the related contractual claim in case the judgment fails to meet other jurisdictional filters, such as the habitual residence of the person against whom recognition and enforcement is sought (Article 5(1)(a)), or where payments are due (Article 5(1)(g)).59 See Article 24 of the Brussels I-bis Regulation. F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, paras 199-200. 58 59

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The 2019 Hague Judgments Convention While the provision at sub-paragraph (i) of Article 5(1) covers judgments rendered against the defendant, homologous judgments against the claimant may circulate, in any case, in accordance with sub-paragraph (c).

VII. Grounds for Refusal of Recognition and Enforcement While partially departing from many national systems and from the Brussels I-bis Regulation, the grounds for refusal of recognition and enforcement listed at Article 7 of the 2019 Hague Judgments Convention are modelled on those put forth at Article 9 of the 2005 Hague Choice of Court Convention as well as in other national or supranational instruments. As clarified in Article 4(1), the list of defences under Article 7 is exhaustive. It is also non-mandatory (“[r]ecognition or enforcement may be refused […]”). It follows that the court of a Contracting State may refuse recognition or enforcement of a judgment rendered in another Contracting State in accordance with Article 7; at the same time, the requested court is precluded from denying such recognition or enforcement on grounds other than those put forth under Article 7. The grounds for denial under Article 7(1) include: absence of sufficient notice (Article 7(1)(a)); the manifest incompatibility with the public policy of the requested State of the judgment for which recognition or enforcement is sought (Article 7(1)(c)), which includes fundamental principles of both substantive and procedural law (“fundamental principles of procedural fairness”); the fact that the judgment was obtained in breach of an agreement or designation in a trust instrument, according to which the dispute should have been decided by a Court of a State other than the one that actually rendered the decision (Article 7(1)(d)); and, inconsistency with a judgment involving the same parties, either in the requested State or in another State (Article 7(1)(e)-(f)). In the latter case, it is requested that the judgment for which recognition or enforcement is sought be an earlier judgment, and obviously eligible for recognition in the requested State. The defences listed at Article 7(1) closely mirror those enumerated in the Brussels I-bis Regulation (Article 45). The defence under Article 7(1)(a) applies not only (as also provided in the Brussels I-bis Regulation) when the defendant was not notified of the document which instituted the proceedings (or equivalent document) “in sufficient time and in such a way” as to enable him to defend himself, but also when such notice was given in a way that was “incompatible with the fundamental principles of the requested State concerning service of process.” (see Article 7(1)(a), sub-paragraphs (i) and (ii), respectively).60 Furthermore, the 2019 Hague Judgments Convention puts forth some additional defences that are not found in the Brussels system. 60 This provision is modelled on Article 9(c) of the 2005 Choice of Court Convention.

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Andrea Bonomi/Cristina Mariottini On the one hand, recognition and enforcement can be denied when the foreign judgment was obtained by fraud (Article 7(1)(b)). This rule is found in several national systems and international conventions although its exact interpretation may differ. In many cases, fraud will be construed as already falling under the public policy exception, in particular within its “procedural” effects (lack of procedural fairness). On the other hand, refusal is also possible when proceedings between the same parties on the same subject matter are already pending before a court of the requested State (Article 7(2) of the Convention). A similar rule is also found in several national and international recognition systems.61 However, recognition may be refused only if the proceedings in the requested State were instituted before those that have led to the judgment for which recognition and enforcement is sought, and only provided the dispute was closely connected with that State. Furthermore, pursuant to Article 10, recognition and enforcement of a judgment may be refused “if, and to the extent that” the judgment awards damages, including exemplary or punitive damages, which do not compensate a party for the actual loss or harm suffered. This provision – which is modelled after Article 11 of the 2005 Hague Choice of Court Convention – clearly reflects the wariness that traditionally surrounds punitive damages in jurisdictions other than the U.S., and notably in civil law countries.62 However, the provision mitigates the rejection in two ways. On the one hand, in accordance with Article 10(1) refusal of recognition or enforcement is limited to the part of the foreign judgment which awards noncompensatory damages. It follows that the foreign judgment may not be rejected in its entirety on the sole premise that it includes an award for non-compensatory damages. Rather, provided the judgment does not meet any other grounds for refusal under the Convention, the remaining parts of the judgment are eligible for recognition and enforcement, as echoed at Article 9 on severability. This may be the case with a declaration of liability, a (positive or negative) injunction and, obviously, the award of compensatory damages.63 On the other hand, in accordance with Article 10(2), in assessing the eligibility of the judgment on damages to circulate, the requested court shall take into account “whether and to what extent the damages awarded serve to compensate costs and expenses relating to the proceedings.”64 This provision appears to accommodate an argument that is often invoked: punitive damages, especially in 61 For instance, see Article 27(2)(c) of the Swiss PIL Act (Federal Act of 18 December 1987 and subsequent amendments), Article 64(1)(f) of the Italian PIL Act (Law 31 May 1995 No 218 and subsequent amendments), or Article 22(c) of the 2007 Hague Child Support Convention. 62 Specific provisions against punitive damages are included in various national PIL codifications: e.g. Articles 135(2) and 137(2) of the Swiss PIL Act and Article 40(3) of the German EGBGB. 63 See also the similar rule included in Article 33(1) of the 1999 preliminary draft Convention. 64 A similar rule was included in Article 33(3) of the 1999 preliminary draft Convention.

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The 2019 Hague Judgments Convention the U.S., serve to counterbalance the equal splitting of costs for the procedural expenses and attorney’s fees among parties. In this respect, it is reasonable that the requested court be required to proceed with the assessment of whether and to what extent non-compensatory damages serve the purpose of compensating the procedural costs

VIII.

Preliminary Questions

Like the 2005 Hague Choice of Court Convention,65 the 2019 Convention includes two provisions addressing rulings on preliminary questions. The first provision, Article 2(2), assists in shaping the material scope of the Convention in those instances where preliminary questions on matters excluded from the Convention arise in the course of the main proceeding before the court of origin. Under this provision, a judgment is not excluded from the scope of the Convention merely because one of the matters excluded from such scope under Article 1(1), Article 2(1) or Article 18 arose incidentally, in particular by way of defence, in the course of the proceedings before the court of origin. This reflects the widely recognised principle, according to which it is the object of the proceedings, rather than the preliminary questions, that defines the application of the Convention. Pursuant to Article 2(2), the judgment on the principal object is covered by the Convention, irrespective of the fact that a preliminary question, falling within the exclusions, arose during the course of the proceedings in the State of origin. Article 2(2) is then complemented by Article 8, which regulates the circulation of judgments in those instances where an incidental ruling on a preliminary question is involved. On one hand, Article 8(1) mandates that rulings on preliminary questions excluded from the scope of the Convention (see supra, section III.2; e.g. the validity of an IP right), or judgments falling within the scope of Article 6 rendered by a court of a State other than the one where the property is situated (see supra, sect. VI), shall not circulate under the Convention. A contrario, it follows from Article 8(1) that rulings on preliminary questions that do fall within the scope of the Convention or that do comply with Article 6 are eligible for recognition and enforcement under the Convention, provided of course that they satisfy all the other conditions set up by this instrument. On the other hand, Article 8(2) introduces an ad-hoc basis for denial of recognition and enforcement of a judgment falling within the scope of the Convention “if, and to the extent that” such judgment is based on an incidental ruling on a preliminary question that does not fall within the scope of the Convention, or on a matter falling under Article 6, rendered by a court other than the one where the property is situated. These grounds for denial are not mandatory but merely discretionary and should only be used when the requested court finds that the judgment 65

See Articles 2(3) and 10 of the 2005 Choice of Court Convention.

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Andrea Bonomi/Cristina Mariottini on the main object of the proceedings would have been decided differently had the incidental question also been decided in a different manner.66 Article 8(2) also applies without qualification when the incidental ruling relates to the validity of an intellectual property right since the inclusion of a specific rule in line with Article 10(3) of the 2005 Hague Choice of Court Convention,67 as it was envisaged in previous drafts,68 was finally rejected at the Diplomatic Session.

IX. Procedure Mirroring the approach adopted in the 2005 Hague Choice of Court Convention and several other Hague Conventions on recognition of foreign judgments,69 as well as in the 1958 New York Convention on the recognition and enforcement of arbitral awards, the 2019 Hague Judgments Convention echoes at Article 13(1) the traditional principle according to which the law of the requested State governs the procedure for recognition and enforcement, provided the Convention does not state otherwise (see infra, Articles 12 and 14). While the 2019 Convention does not put forth a uniform and thorough recognition and enforcement procedure, the last sentence of Article 13(1) of the Convention pragmatically prompts the court of the requested State to “act expeditiously”. Consequently, the requested court shall have recourse to expeditious procedures under national law, and avoid unreasonable or undue delays.70 By providing that recognition and enforcement may not be refused on grounds that they should be sought in another State, Article 13(2) precludes the requested court from applying the doctrine of forum non conveniens at the recognition or enforcement stage. It remains to be seen whether the practical effect of this rule will also be to dispense with any particular requirement of personal

66 F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para 322. 67 Under Article 10(3) of the 2005 Hague Choice of Court Convention, when a judgment is based on a ruling regarding the validity of a registered intellectual property right, recognition or enforcement of such a judgment may be refused only where certain additional conditions are met. 68 See Article 8(3) of the 2018 draft Convention. 69 A notable exception can be found at Article 23 of the 2007 Child Support Convention, a provision which clearly reflects the particular importance of swift procedures in the area of maintenance recovery. 70 F.J. GARCIMARTÍN ALFÉREZ/ G. SAUMIER, Judgments Convention: Revised Draft Explanatory Report, Prel. Doc. No 1 of December 2018, para. 356, citing the NYGH/ POCAR Report (note 4), para. 355 and the HARTLEY/ DOGAUCHI Report (note 17), para. 216.

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The 2019 Hague Judgments Convention jurisdiction to hear a recognition or enforcement action, contrary to the approach followed by courts in some Common Law States.71 Regarding the procedural requirements that the Convention regulates directly, Article 12 lists the documents that, in accordance with the Convention, must be produced for the purpose of seeking recognition or enforcement. Article 14 regulates costs of recognition and enforcement proceedings. Paragraph 1 reflects a traditional non-discriminatory rule by providing that no security, bond or deposit may be required from a party solely on grounds that the party is not domiciled and is neither a national, nor a resident of the State in which enforcement is sought. Securities, bonds or deposits may still be required on other grounds. The provision at Article 14(2) puts forth an ex-post protection for the judgment debtor in those instances where the judgment is denied recognition or enforcement, and an order for payment of costs or expenses is issued against the judgment creditor: according to this provision, the order may circulate under the Convention when the judgment creditor (or any other person) was exempt from the security, bond or deposit requirement either under paragraph 1 or under the law of the requested State. This result would, otherwise, be impossible under the Convention given that, according to Article 3(1)(b), a determination of costs or expenses falls within the definition of “judgments” under the Convention only provided it relates to a decision on the merits. Finally, Article 14(3) establishes a declaration mechanism according to which a Contracting State may opt-out of paragraph 1 or declare that it excludes the application of paragraph 1 to certain courts.

X.

Concluding Remarks

The lengthy and winding path that has led to the adoption of the 2019 Hague Judgments Convention is indicative of the fact that States identify, in the recognition and enforcement of foreign judgments in civil or commercial matters, a very delicate issue, regarding which they wish to retain a high level of scrutiny and control. However, it is also indicative of the importance that they attach to this matter, as signified by the years of commitment to the negotiations and by the determination of the experts and negotiators to identify viable solutions and reach consensus on the more complex issues. In this respect, the adoption of the 2019 Hague Judgments Convention may be welcome as an expression of openness and remarkable dedication towards global cooperation – rare and precious qualities in the times in which we live. The negotiations that have led to the adoption of the Convention have created the opportunity for a unique forum to discuss, with a broad spectrum, the See R.A. BRAND, Recognition and Enforcement of Foreign Judgments in the United States, Federal Judicial Center International Litigation Guide, April 2012, at 10. However, the courts in some U.S. jurisdictions (notably New York) have held that the debtor does not need to be subject to personal jurisdiction in the enforcement State. 71

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Andrea Bonomi/Cristina Mariottini issues that surround the circulation of judgments in civil or commercial matters. In this respect, the value of the new instrument is further strengthened by the fact that over 400 experts representing 81 States and Observers convened to negotiate it on the occasion of the Twenty-Second Diplomatic Session.72 The significance of the new Convention goes beyond the inherent fact of its adoption; it extends to the exchange of knowledge between experts from different jurisdictions, often with different backgrounds, which has characterised the negotiations. The importance of this exchange will inform and be reflected in the mutual exchanges and relationships between States and their experts and practitioners for years to come. The Convention’s impact on the global circulation of judgments could have been stronger had the list of matters falling within its scope of application been broader. The impression is that the number of exclusions could have been reduced, all the more in light of the possibility for Contracting States to declare, subject to a strong interest, and in accordance with Article 18, that they will not apply the Convention to a given matter. Also, with respect to judgments rendered in some of the excluded areas, such as defamation or privacy, the grounds for denial based on the manifest incompatibility with public policy under Article 7(1)(c) could have been a sufficient safeguard. Regrettably, despite their variety, the multifaceted jurisdictional filters of Article 5 are in many ways more restrictive than those accepted in the most advanced recognition systems.73 While foreign judgments will continue to benefit, under the non-exclusivity principle of Article 15, from more liberal rules in force in the Contracting States, the risk exists that the 2019 Convention might inhibit, in the future, more recognition-friendly reforms at the national level. The fragmentation and the resulting need for coordination generated by the numerous and variously articulated grounds for recognition and enforcement may raise concerns in the future. On the one hand, they may discourage ratification, as the understanding of the system in its entirety could be prima facie less clear-cut than it appears to be. On the other hand, the reading of some grounds for recognition and enforcement is not as unambiguous as one may wish for a global treaty. This is the case, for instance, with the crucial provision at Article 5(1)(g) on judgments on contractual obligations which is based on notions of European, U.S. and Canadian law, with which many other legal systems are not familiar in practice. The variety of (specific, semi-exclusive, and exclusive) grounds for recognition finally provided at Articles 5 and 6 for judgments on immovable property may also prove to generate unnecessary complexity. The level of uncertainty is then increased because of the declarations that may be made under the Convention: again, while these declarations unquestionably serve the purpose of maximising the level of acceptance of the Convention, it is nevertheless also true that they increase the difficulties in the practical application of the treaty. It also remains to be seen whether the “opt out” mechanism of Article

72 73

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See https://www.hcch.net/en/news-archive/details/?varevent=683. See A. BONOMI (note 33).

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INDEX ____________ Abduction of children and Brussels II-ter Regulation 127, 132 Abolition of exequatur under Brussels I-bis Regulation 307 and Slovenia recognition law 302 Abuse of right 416, 424 Access providers (Internet) and jurisdiction 208 Access to justice 414 Accountability of transnational corporations 497, 519 Action directe 100 Active v. passive consumer in South Korean PIL 406 Actual enforcement of judgments in Slovenia 312 Adaptation of foreign measures 311 theory of (Anpassung) 453 Adhesion contracts and question of arbitrability in Argentina 319 Adjudicative comity 275 Adjudicatory jurisdiction 201 also see “Jurisdiction” Adoption and maintenance 175 in Brazil 243-264 ADR in maintenance issues 181, 182 Adults protection of 439-465 Advance directives and protection of adults 456 Advance enforcement in China 337 Agencies transmitting and receiving in maintenance issues 173

Agency (branch or subsidiary) and jurisdiction 199 ALI / UNIDROIT Principles of Transnational Civil Procedure 341 Alien Tort Statute 501 American Law Institute and private international law 15-30 Anchor defendant 423 Annulment of arbitral awards 25 Ante causam provisional measures 130 Anti-trust 543 Apostille 235 Apostille Convention 153 and Brazil 154 Arbitrability of disputes in Argentina 318 Arbitral awards recognition of in Slovenia 287 recognition of in Brazil 225, 239 Arbitration in Russia law 278 in Argentina 315-325 in the U.S. 15-30 its influence on private international law 36 Arbitration agreement 18 under Argentine law 317 Asian Principles of Private International Law 396 Assets preservation of in Chinese PIL 330 Attachment Chinese PIL 327-352 Attorney, power of protection of adults 449, 451, 454 Austria public policy in succession 377393 Bankruptcy recognition in Russia 266 also see “Insolvency” Bartole 523

Yearbook of Private International Law, Volume 20 (2018/2019), pp. 569-576 © Verlag Dr. Otto Schmidt & Swiss Institute of Comparative Law

Printed in Germany

Index Best interests of the child 114, 253, 434 Birth certificate 85 Branch, agency or establishment 551 Brussels Convention 101 Brussels I-bis Regulation 416 and interim relief 124, 349 Brussels II-bis Regulation jurisdiction 64, 416 recognition of divorces 434 provisional measures 126, 128 recognition of judgments 289 Brussels II-ter Regulation 124 Capacity to adopt 247 Carriage of passengers 542 Cautio judicatum solvi 173 Center of main interests of debtor 481 and protection of adults 446 Central authorities 258 in maintenance issues 174, 178 in Brazil 154 Challenge of arbitrators in Argentine law 323 Characteristic performance contract law in South Korea 405 Charter of the United Nations 268 China and interim relief 327-352 Choice of court agreements 554 in South Korea 398, 399 CIDIP and maintenance issues 184 Civil marriage in Israel 354 Civil unions and Italian law 47 Civil War (US) 4 Closest connection product liability 109 Cloud Act 193, 204, 207, 208, 212 Cloud computing 206 Coman 52 COMI 481 Comitas gentium 274 Comity 511 and protection of adults 452 and recognition of judgments 274 Commercial notion of under arbitration law of Argentina 318 Commercial courts in Argentina 320

570

Commission internationale de l’état civil 76 Common nationality as connecting factor in Japan 69 Competence-competence 19, 37 Conflict rules and unilateralism in Brazil 209 Conflicts of data protection laws 207 Consent in adoption proceedings 252 and jurisdiction 552 Constitution public policy in South Korea 407 Consumer contracts 557 and arbitrability in Argentina 319 in South Korea 402 Continuing power of attorney protection of adults 455 Continuity of personhood 74 Contractual freedom 469, 471 insolvency law 467-495 Contractual v. extracontractual 101 Convention No. 16 on the issue of multilingual extracts from civilstatus records (1976) 78 Convention No. 34 on multilingual and coded extracts and certificates from civil-status records (2014) 79 Convention on the Recovery Abroad of Maintenance (1956) 172, 244, 255 Corporations and human rights 497-519 Criminal law and the Internet in Brazil 199, 210 Cross-border evidence 212 also see “Evidence” Culpa in contrahendo 102 Currency enforcement of judgments 12 Damages law governing product liability 95 Data protection 183, 207, 212 maintenance issues 183 Declaration of enforceability under Brussels I Regulation 306 Defamation 543, 558 Denationalisation of private international law 33 Direct remedy against producer or seller 95 Discovery 419 Divorce recognition in Brazil 225, 237-238

Yearbook of Private International Law, Volume 20 (2018/2019)

Index law applicable to in Japan 61, 66 recognition of in Russia 266 Doing business 551 Domicile as connecting factor in Internet 196 of defendant in Japanese law 63, 65 as connecting factor for personal status in Brazil 245, 246 of plaintiff 66 Domicile vs habitual residence 551 Donetsk private international law 5 Dutch school 523 ECHR and private international law 34 and recognition and enforcement of foreign judgments 272 and the right to fair trial 272 ECJ and same-sex marriage 36, 47 ECtHR and private international law 58 Electronic Apostille Programme 92 Enforcement of money judgments 12 also see “Recognition” Equal treatment of creditors 476 Equality of arms 427 Escape clause and Rome II Regulation 109, 110 Estoppel 416, 424 EU Regulation on European Production and Preservation Orders 212 European citizenship 528 European Private International Family Law 117, 522 Europeanisation of PIL 35 Euthanasia and protection of adults 448 and letters rogatory in Brazil 164 Evidence preservation of in Chinese PIL 336 in arbitration in China 346 over the Internet 190, 212 Ex parte procedure 127 and recognition of judgments 289 Exclusive jurisdiction in Slovenia 296 in South Korea 399, 401 Exequatur and Slovenia recognition law 285 Exorbitant jurisdiction as ground for non-recognition 296 Extraterritorial jurisdiction 506

Extraterritoriality 501 and prescriptive jurisdiction 203 Facebook and internet cases in Brazil 196 Fair trial right to 427 Family matters and arbitrability in Argentina 321 Family status 527 Favor creditoris law applicable to maintenance 184 Favor recognitionis in Brazil 240 and recognition law in Brazil 234 as precondition for recognition of interim relief in China 349 Finality of judgments and Hague Judgments Convention (2019) 549 Forced labor 505 Foreseeability of damage and law applicable to product liability 108 Forum arresti 131 Forum law as law governing interim relief 349 Forum necessitatis 13, 39 Forum non conveniens 39, 297, 434, 445, 565 in Japan 63, 65, 70, 71 in South Korea 397 Forum selection clause in Internet disputes 196 Forum shopping 126, 131, 413-438 Foster parents 255 Fourteenth Amendment 556 Fraud 426, 427 and direct jurisdiction 424 Hague Judgments Convention 562 Freedom of movement and same-sex marriage 52 Freezing injunction in China 331, 345 French school 523 GDPR 193 Genocide 505 Good faith and recognition of maintenance from invalid marriage in Israel 362 Guardianship 3, 447 also see “Protection of adults” Habitual residence 105 in adoption matters 246 of consumer 404 of protection of adults 444

Yearbook of Private International Law, Volume 20 (2018/2019)

571

Index and Hague Judgments Convention 550 in succession matters 391 in the Hague Abduction Convention (1980) 127 of the maintenance creditor 184 Hague Adoption Convention (1993) 245 Hague Adult Protection Convention (2000) 440, 443 Hague Child Abduction Convention (1980) 35, 127 Hague Children Protection Convention (1996) 121 Hague Choice of Court Convention (2005) 399, 541, 55 Hague Conference on Private International Law 151 and maintenance issues 177 Hague Convention on Abolishing the Requirement of Legalisation 151 Hague Convention on International Access to Justice and Brazil 157 Hague Convention on Jurisdiction, Applicable Law and Recognition of Decrees relating to Adoption (1965) 244 Hague Maintenance Convention (2007) 152, 177-183 Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions (1961) 382 Hague Convention on the Law Applicable to Contract for the International Sale of Goods (1955) 324 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (2019) 221, 537-567 Hague Service Convention (1965) 153 Hague Evidence Convention (1970) and Brazil 157 Hague Maintenance Protocol 152 Hague Protocol on the Law Applicable to Maintenance Obligations (2007) in Brazil 172, 181 Handte 100 Human rights and private international law 7, 34 Human trafficking and adoption 264 ICSID 44

572

ICSID Convention Arbitration in the U.S. 29 Immovable property 559 Incapacitated adults 439-465 and maintenance 180 Incidental question and validity of IP rights in South Korea 402 Incidental recognition 292 Individualism and private international law 525 Inheritance law and public policy 377 Injunctions 436 Inlandsbeziehung and public policy 383 Insolvency and ipso facto clauses 467-495 Intellectual property 543, 544 Inter-American Convention on Conflict of Laws Concerning the Adoption of Minors (1984) 245 Inter-American Convention on Support Obligations (1989) 183 Inter-American Convention on the Conflict of Laws Concerning the Adoption of Minors (1984) 260 Inter-American Court of Human Rights 35 Inter-German conflict of laws 8 Intercountry adoptions 254-255 Interim payment 331 Hague Judgments Convention 545 Interim relief Chinese PIL 327-352 Slovenian PIL 285 also see “Provisional measures” and “Protective measures” Intermarriages and private international law in Israel 353-376 International comity recognition of judgments 274 International commercial courts 40 International Court of Justice and private international law 33 International judicial cooperation and Brazil 150 International jurisdiction and forum shopping 413-414 also see “Jurisdiction” International migration and ICCS Conventions 84

Yearbook of Private International Law, Volume 20 (2018/2019)

Index Internet companies and their obligations towards authorities in Brazil 195 Internet disputes in Brazilian case-law 189-219 Investor-state arbitration 40 IP litigation and interim measures in China 341 and exclusive jurisdiction in South Korea 402 Ipso facto clauses 469-497 Italian torpedo 419 Italy and same-sex marriage 47 Ius cogens and recognition of judgments 267 Japan jurisdiction rules over divorce 61 rules on international jurisdiction 396 Japan-Korea Treaty of 1910 407 Judicial assistance and the Internet 190 Jurisdiction in maintenance issues 180 and international adoption in Brazil 247-248 and public international law 202 in divorce matters in Japan 61 over interim relief in China 340 over Internet companies in Brazil 197-201 Kiobel 500, 501, 504 Korea (South) and private international law in contractual matters 395-412 Labour contracts 557 Lagarde Report 122 Lease of immovable property 559 Legal certainty and foreign judgments 540 Legal standing to sue in Brazilian recognition law 227 Letters rogatory 228 and Brazil 150 and maintenance issues 185 Lex arbitri 29 Lex contractus and insolvency law 469 Lex fori governing interim relief 347

governing procedure 166 Lex fori concursus 481, 482, 483 Lex fori in foro proprio and protection of adults 445 Lex loci celebrationis 355, 365 Lis pendens 146, 298, 416, 425, 541 and maintenance issues in Brazil 186 in South Korea 397 Luhansk and private international law 5 Mahr 387 arrangements 179 in Brazil 177 in Israel 354, 362 and validity of marriage 362, 372 in South Korea 401 Maintenance as human right 172 under Iranian law 386 Maintenance Obligations Regulation 124 Mandatory norms and protection of adults 458, 462 and consumer protection 406 in insolvency law 474 Marine pollution 543 Maritime claims 542 Maritime law and provisional measures in China 338 Marriage law applicable to essential validity 355, 357 Matrimonial domicile as jurisdictional connecting factor in Japan 68 Matrimonial property and PIL in Israel 373 Measures in rem and measures in personam 119 Mediation and divorce law in Japan 62 Mercosur / Mercosul and maintenance issues 185 Montreal Convention 405 Mutual agreement and divorce legislation in Japan 61 Mutual trust 437 Namibia and private international law 6 Nationality

Yearbook of Private International Law, Volume 20 (2018/2019)

573

Index and personal status 3 as connecting factor in Germany 9 as connecting factor in Japan 64 Negotiorum gestio 102 New York Convention on Arbitral Awards (1958) 19, 278, 323, 547 in Argentina 321 and recognition law in Russia 278 Noahide laws 365 Non-recognised States and private international law 1-14 Non-State law 32 Oliari and others v. Italy 48 Organization of American States and judicial cooperation 151, 183 Orlandi and others v. Italy 49 Palestine and private international law 3 Palestine Order in Council and its application in Israel 360 Panama Convention 24, 25, 27 Parallel proceedings 470 in insolvency law 487 and forum shopping 416 also see “Lis pendens” Parent company and internet cases in Brazil 199 Partial recognition of foreign judgments 290 in maintenance issues 182 Party autonomy 11 and consumer protection in South Korea 404 Personality rights 543 in Brazil 246 Petrification theory and Austrian jurisprudence 382 Place of assets as connection for interim relief 342 Place of establishment of the debtor in insolvency 481 Place of marketing law governing product liability 106 Place of performance in contractual matters 555 Place of purchase law governing product liability 107 Polygamy 360 Post-mortem adoption 252 Post-post-modern private international law 32 Povse 132

574

Power of representation and protection of adults 449, 459 Pregnancy and maintenance issues 176, 187 Prescriptive comity 275 Prescriptive jurisdiction 201 Private adjudication 35 Private enforcement 37 Product liability 96, 100 Protection of adults 439-465 Protective measures and children 117-147 Provisional measures in maintenance obligations 174 and children 113-147 Provisional vs. protective measures 117 Public documents recognition of in Slovenia 286 Public international law and private international law 34 Public policy 49, 295, 533, 561 as a defense against recognition of foreign judgments 299 in Brazilian recognition law 235 in South Korea 407 inheritance law 377-393 in Austria 381 international adoption in Brazil 248 protection of adults 448, 462 recognition of arbitral awards 24 recognition of divorces in Japan 71 Russian recognition law 280 under a bilateral treaty 382 validity of marriages 356, 363, 368 Punitive damages 419, 563 Purposeful and substantial connection 556 Purposeful availment 556 Purrucker 146 Rabbinical courts and their jurisdiction with respect to divorce proceedings in Israel 364 Reciprocity 187, 273 recognition law in Russia 266 Recognition and international law 267 of arbitral awards in the U.S. 24 of civil marriages in Israel 353 of foreign divorces in Japan 71 of divorces under Brussels II 71 of interim relief in China 348 and non-recognized States 11

Yearbook of Private International Law, Volume 20 (2018/2019)

Index of foreign judgments in the Hague Judgments Convention (2019) 537-567 of foreign judgments in Brazil 221-241 of foreign judgments in Russia 265 of foreign judgments in Slovenia 279-313 of foreign judgments in South Korea 407 of maintenance orders 173 of measures for the protection of adults 446 of provisional measures 142 of public documents 73-93 of same-sex marriage 47-59 Recovery of maintenance 171-188 Référé 120 Registration of foreign marriages in Israel 360 Regulation (EU) 2016/1191 on promoting the free movement of citizens by simplifying the requirements for presenting certain public documents in the European Union 79 Regulation (EU) No 1259/2010 on law applicable to divorce and legal separation 388 Regulation (EU) No 650/2012 on succession 379 REIO Courts 35 Related actions 425 Related claim 560 Religious laws marriage in Israel 354 Renvoi and succession 380 Res iudicata recognition of arbitral awards 27 Restatement of U.S. Law on Arbitration 15-30 Révision au fond in South Korea 409 Right to fair trial Russian recognition law 269, 277 Rogatory letters in Brazil 211 Romania same-sex marriage 47 Rome Convention on the Law Applicable to Contractual Obligations (1980) 324 Rome I Regulation and product liability 103 Rule of law

and recognition law in Russia 274 Russia and recognition of foreign judgments 263-278 Same sex union maintenance issues in Brazil 175 Same-sex marriage 47-59 and adoption 248 in Brazil 257, 262 in Israel 369 in Romania 47 Savigny, Friedrich Carl von 523 Security for costs 173, 174 Separability and arbitration agreement 21 Sequestro conservativo 120 Service as part of recognition proceedings in Brazil 228 Service of documents in Brazil 165 Service of process and recognition proceedings in Brazil 233 Severability 562 Simple v. full adoption in Brazil 248 Singapore Convention on International Settlement Agreements resulting from Mediation (2019) 546, 547 Slovenia recognition of judgments 283-313 Sovereign equality of States 274 Sovereignty and activity on the Internet 204 and private international law 39 State its role in private international law 31-45 Statelessness 3 and the work of the Commission internationale de l’état civil 77 Story, Joseph 523 and international comity 276 Sufficient nexus in application of public policy 383 Sufficient notice and the Hague Judgments Convention 561 Swiss PIL and jurisdiction over divorce cases 64-65

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575

Index Switzerland and the bilateral treaty with Iran 379, 381 Temporary measures recognition of in Slovenia 285 also see “Interim relief” Termination clauses 467-495 Territoriality 509 Territoriality principle and insolvency law 477 and the Internet 190, 191 Torts and the Hague Judgments Convention 558 Transnational corporations 499 Treaty of Friendship and Establishment, Austria and Iran (1966) 380 Turner 438 U.N. Commission on International Law 155 UN Charter and private international law 280 UN Convention on the Rights of the Child 134, 184, 442 and adoption matters 253 UN Convention on the Rights of the Persons with Disabilities 443 UNCITRAL Model Law of International Commercial Arbitration 18 UNICEF 244 UNCITRAL Model Law (Arbitration) 322

576

UNIDROIT and maintenance obligations 173 UNIDROIT Principles of International Commercial Contracts 326 Unilateralism 523 Brazilian law on “Marco Civil” of Internet 204, 209 United Nations Guiding Principles on business and human rights 499 United Nations Sustainable Development Goals 169 Unity of family status 528 Universal Declaration of Human Rights 74 Universality principle and insolvency law 477 Urgent cases Brussels II-ter Regulation 126 Urgent measures 121 Validity of marriages celebrated abroad 356 Vienna Convention on the Law of the Treaties 155, 268 Vulnerable adults 440 also see “Protection of adults” Warranty claims and private international law 95 Weaker party and adult protection 441 Wills formal validity 378 Yahoo internet cases in Brazil 196

Yearbook of Private International Law, Volume 20 (2018/2019)